Document:

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                                                                     EXHIBIT 4.7

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                                     FORM OF

                          TREASURE ISLAND ROYALTY TRUST

                  AMENDED AND RESTATED ROYALTY TRUST AGREEMENT

                                 _______, 2002

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                                TABLE OF CONTENTS

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<S>                                                                                                              <C>
ARTICLE I. DEFINITIONS............................................................................................2

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

ARTICLE II. NAME AND PURPOSE OF THE TRUST.........................................................................5

   Section 2.1.      Name.........................................................................................5
   Section 2.2.      Purposes.....................................................................................5
   Section 2.3.      Nature of the Trust..........................................................................5
   Section 2.4.      Transfer of Trust Property to the Trust......................................................6
   Section 2.5.      Issuance of Units............................................................................6

ARTICLE III. ADMINISTRATION OF THE TRUST..........................................................................6

   Section 3.1.      General......................................................................................6
   Section 3.2.      Limited Power to Dispose of Royalties........................................................6
   Section 3.3.      No Power to Engage in Business, Make Investments or Enter into Certain Contracts.............7
   Section 3.4.      Interest on Cash on Hand.....................................................................8
   Section 3.5.      Power to Settle Claims.......................................................................8
   Section 3.6.      Power to Contract for Services...............................................................8
   Section 3.7.      Payment of Liabilities of Trust..............................................................9
   Section 3.8.      Establishment of Reserves....................................................................9
   Section 3.9.      Limited Power to Borrow......................................................................9
   Section 3.10.        Income and Principal.....................................................................10
   Section 3.11.        Term of Contracts........................................................................10
   Section 3.12.        Transactions between Related Parties.....................................................10
   Section 3.13.        No Bond Required.........................................................................10
   Section 3.14.        Timing of Trust Income and Expenses......................................................10
   Section 3.15.        Divestiture of Units.....................................................................10
   Section 3.16.        Filing of Registration Statement.........................................................12
   Section 3.17.        Reserve Reports..........................................................................13
   Section 3.18.        Miscellaneous............................................................................14
   Section 3.19.        Unitholders..............................................................................14

ARTICLE IV. BENEFICIAL SHARES AND CERTIFICATES...................................................................14

   Section 4.1.      Creation and Distribution...................................................................14
   Section 4.2.      Beneficial Interest of Unitholders..........................................................14
   Section 4.3.      Execution of Certificates...................................................................15
   Section 4.4.      Registration and Transfer of Units..........................................................15
   Section 4.5.      Mutilated, Lost, Stolen and Destroyed Certificates..........................................16
   Section 4.6.      Protection of Trustee.......................................................................16
   Section 4.7.      Determination of Ownership of Certificates..................................................16

ARTICLE V. ACCOUNTING AND DISTRIBUTION; REPORTS..................................................................17

   Section 5.1.      Fiscal Year and Accounting Method...........................................................17
   Section 5.2.      Distributions...............................................................................17
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<S>                  <C>                                                                                        <C>
   Section 5.3.      Income Tax Reporting........................................................................17
   Section 5.4.      Reports to Unitholders......................................................................17
   Section 5.5.      Filings.....................................................................................18
   Section 5.6.      Information to be Supplied by Grantor and Trustee...........................................18
   Section 5.7.      Reliance on Information.....................................................................18

ARTICLE VI. LIABILITY OF TRUSTEE, INDEMNIFICATION AND METHOD OF SUCCESSION.......................................19

   Section 6.1.      Liability of Trustee........................................................................19
   Section 6.2.      Indemnification of Trustee..................................................................19
   Section 6.3.      Priority and Continuity of Indemnification Obligations......................................19
   Section 6.4.      Contribution................................................................................20
   Section 6.5.      Indemnification Procedures..................................................................20
   Section 6.6.      Resignation of Trustee......................................................................21
   Section 6.7.      Removal of Trustee..........................................................................21
   Section 6.8.      Appointment of Successor Trustee............................................................21
   Section 6.9.      Laws of Other Jurisdictions.................................................................22
   Section 6.10.        Force Majeure............................................................................23

ARTICLE VII. COMPENSATION OF THE TRUSTEE.........................................................................23

   Section 7.1.      Compensation of Trustee.....................................................................23
   Section 7.2.      Expenses....................................................................................23
   Section 7.3.      Other Services..............................................................................23
   Section 7.4.      Source of Funds.............................................................................23
   Section 7.5.      Funding.....................................................................................24
   Section 7.6.      Ownership of Units by Trustee...............................................................24

ARTICLE VIII. MEETINGS OF UNITHOLDERS............................................................................24

   Section 8.1.      Purpose of Meetings.........................................................................24
   Section 8.2.      Call and Notice of Meetings.................................................................24
   Section 8.3.      Voting......................................................................................25
   Section 8.4.      Conduct of Meetings.........................................................................25
   Section 8.5.      Unitholder Proposals........................................................................26
   Section 8.6.      Action Without Meeting......................................................................26
   Section 8.7.      Units Owned by Grantor Deemed Not Outstanding...............................................26

ARTICLE IX. DURATION, REVOCATION AND TERMINATION OF TRUST........................................................27

   Section 9.1.      Revocation..................................................................................27
   Section 9.2.      Termination.................................................................................27
   Section 9.3.      Disposition and Distribution of Properties..................................................27

ARTICLE X. AMENDMENTS............................................................................................28

   Section 10.1.        Prohibited...............................................................................28
   Section 10.2.        Permitted................................................................................28

ARTICLE XI. ARBITRATION..........................................................................................29
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<S>                                                                                                             <C>
ARTICLE XII. MISCELLANEOUS.......................................................................................31

   Section 12.1.        Inspection of Trustee's Books............................................................31
   Section 12.2.        Trustee's Employment of Experts..........................................................31
   Section 12.3.        Merger or Consolidation of Trustee.......................................................31
   Section 12.4.        Filing of this Agreement.................................................................32
   Section 12.5.        Severability.............................................................................32
   Section 12.6.        Notices..................................................................................32
   Section 12.7.        Counterparts.............................................................................33
   Section 12.8.        Successors...............................................................................33
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          TREASURE ISLAND AMENDED AND RESTATED ROYALTY TRUST AGREEMENT

         This Amended and Restated Royalty Trust Agreement ("AGREEMENT") of
Treasure Island Royalty Trust (the "TRUST") is entered into as of [_________],
2002, between Newfield Exploration Company, a Delaware corporation ("GRANTOR"),
as Grantor, and Wachovia Bank, National Association, a national banking
association organized under the laws of the United States (the "BANK"), as
trustee.

         WHEREAS, EEX Corporation, a Texas corporation ("EEX") is engaged in the
business of exploring for, developing and producing oil and gas and owns
leasehold working interests in properties located in the U.S. Gulf of Mexico on
the federal Outer Continental Shelf that may contain reserves of oil and gas,
but which are not currently producing oil and gas;

         WHEREAS, Grantor, Newfield Operating Company ("Grantor Merger Sub") and
EEX are parties to an Agreement and Plan of Merger dated May 29, 2002 (the
"MERGER AGREEMENT") pursuant to which, and subject to satisfaction of the
conditions precedent thereto, Grantor Merger Sub will merge with and into EEX,
with the result that EEX shall become a wholly owned subsidiary of Grantor;

         WHEREAS, as provided in the Merger Agreement, holders of shares of the
Common Stock of EEX may elect to receive, as a part of the Merger Consideration
(as defined in the Merger Agreement), Units (hereinafter defined) (such electing
holders, the "ELECTING HOLDERS");

         WHEREAS, pursuant to the Merger Agreement, Grantor has agreed to cause
EEX to convey, after the Effective Time but on or before the Issuance Date, the
Royalties (hereinafter defined) to the Trust pursuant to the Conveyances
(hereinafter defined) in consideration for the issuance by the Trust to Grantor
upon the execution hereof of 42,574,298 Units representing in the aggregate
ownership of the entire Beneficial Interest (hereinafter defined) in the assets
of the Trust, which conveyance shall be effective as of the Effective Time;

         WHEREAS, pursuant to the Merger Agreement, at the Issuance Date,
Grantor is required to distribute Units to the Electing Holders;

         WHEREAS, as of June 17, 2002, certain individuals, as Trustees (the
"ORIGINAL TRUSTEES") and Grantor entered into a Trust Agreement (the "ORIGINAL
TRUST AGREEMENT") pursuant to which the Trust was formed under the terms and
conditions set forth therein;

         WHEREAS, the merger transaction contemplated by the Merger Agreement
has been consummated, and the Effective Time (as hereinafter defined) has
occurred;

         WHEREAS, each of the original Trustees under the Original Trust
Agreement has resigned his position as Trustee for the Trust and the Bank has
been appointed and has agreed to act as the new Trustee of the Trust; and

         WHEREAS, the Bank and Grantor desire to amend and restate the Original
Trust Agreement in its entirety.

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         NOW, THEREFORE, in furtherance of forming the Trust, Grantor has
heretofore delivered to the Original Trustees, on behalf of the Trust, One
Hundred Dollars ($100.00) upon execution of the Original Trust Agreement, which
the Bank now accepts and agrees to hold in trust, together with the Royalties to
be received hereunder, for the purposes, and in accordance with the duties,
terms and conditions hereof.

                                   ARTICLE I.
                                   DEFINITIONS

         Section 1.1. Defined Terms. In addition to certain other terms defined
elsewhere in this Agreement, as used herein, the following terms are used with
the meanings indicated:

         "AFFILIATE" of a Person means another Person controlled by, controlling
or under common control with such Person. As used herein, "control" (including
the terms "controlling," "controlled by" and "under common control with") means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

         "AGREEMENT" means this instrument, as originally executed, or, if
amended or supplemented, as so amended or supplemented.

         "BANK" has the meaning set forth in the introductory paragraph of this
Agreement.

         "BENEFICIAL INTEREST" means the aggregate equitable interest of the
Unitholders in the Trust Estate as expressly set out in this Agreement and all
other rights of beneficiaries of express trusts created under the Texas Trust
Code, subject to the limitations set forth in this Agreement.

         "BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which national banking institutions in the City of Houston, Texas, are
closed as authorized or required by law.

         "CERTIFICATE" means a certificate issued by the Trustee pursuant to
Article IV evidencing the ownership of one or more Units.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "CONVEYANCES" means, collectively, the Master Conveyance and each
Recordable Conveyance.

         "DISTRIBUTION DATE" means the date of a distribution, which shall be on
or before ten (10) Business Days after the Quarterly Record Date.

         "EEX" has the meaning set forth in the recitals of this Agreement.

         "EFFECTIVE TIME" has the meaning given thereto in the Merger Agreement.

         "ELECTING HOLDERS" has the meaning set forth in the recitals of this
Agreement.

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         "ENVIRONMENTAL LAWS" means all applicable federal, state and local
laws, regulations, ordinances, rules, orders, permits and governmental
restrictions relating to the environment, the effect of the environment on human
health or safety, pollutants, contaminants, hazardous substances, or hazardous
waste, in effect on the date of this Agreement, and all binding judicial and
administrative interpretations thereof.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "EXCHANGE ACT REGISTRATION STATEMENT" means the registration statement
by which the Units may be registered under Section 12 of the Exchange Act.

         "EXPENSES" has the meaning set forth in Section 3.16(f) of this
Agreement.

         "GRANTOR" has the meaning set forth in the introductory paragraph of
this Agreement.

         "GRANTOR LOANS" has the meaning set forth in Section 3.9(a) of this
Agreement.

         "ISSUANCE DATE" means the date, which shall not be later than sixty
(60) days after the Effective Time, on which Units are distributed by Grantor to
Electing Holders as provided in, and pursuant to the terms of, the Merger
Agreement.

         "MASTER CONVEYANCE" means the non-recordable Master Conveyance of
Overriding Royalty Interest between EEX and/or its Affiliates, on the one hand,
and the Trust, on the other, pursuant to which the Royalties are to be conveyed
to the Trust effective as of the Effective Time.

         "MERGER AGREEMENT" has the meaning set forth in the recitals of this
Agreement.

         "ORIGINAL TRUSTEES" has the meaning set forth in the recitals of this
Agreement.

         "PERSON" means an individual, a corporation, partnership, limited
liability company, trust, estate or other organization.

         "QUARTER" means, for the initial period, the period which commences on
the Effective Time and continues through and includes the Quarterly Record Date
for the applicable calendar quarter during which the Effective Time occurs, and
for succeeding periods the period which commences on the day following a
Quarterly Record Date and continues through and includes the next succeeding
Quarterly Record Date.

         "QUARTERLY DISTRIBUTION AMOUNT" means for each Quarter an amount
determined by the Trustee (pursuant to Section 5.2 hereof) to be equal to the
excess, if any, of (a) the cash received by the Trustee during the Quarter
attributable to the Royalties, plus any cash available for distribution as a
result of the reduction or elimination during the Quarter of any existing cash
reserve created pursuant to Section 3.8 hereof to provide for the payment of
liabilities of the Trust, plus any other cash receipts of the Trust during the
Quarter including any cash received from interest earned pursuant to Section
3.4, other than interest earned on deposits of the Quarterly Distribution Amount
for any prior Quarter pending distribution of such amount, over (b) the
liabilities of the Trust paid during the Quarter, plus the amount of any cash
used pursuant

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to Section 3.8 hereof in the Quarter to establish or increase a cash reserve for
the payment of any accrued, future or contingent liabilities of the Trust. If
the Quarterly Distribution Amount determined in accordance with the preceding
sentence shall for any Quarter be a negative amount, then the Quarterly
Distribution Amount shall be zero, and such negative amount shall reduce the
next Quarterly Distribution Amount. If the Quarterly Distribution Amount
determined in accordance with the second preceding sentence is less than 92% of
the amount of cash received by the Trustee during the Quarter attributable to
the Royalties and the amount of administrative expenses incurred by the Trustee
pursuant to Section 7.2 is greater than 8% of such amount, the Quarterly
Distribution Amount will include funds borrowed from Grantor pursuant to the
second sentence of Section 7.4.

         "QUARTERLY RECORD DATE" for each quarter means the close of business on
the last Business Day of such quarter.

         "RECORDABLE CONVEYANCE" means each recordable Conveyance of Overriding
Royalty Interests between EEX and/or its Affiliates and the Trust contemplated
by the Master Conveyance pursuant to which Royalties are to be conveyed to the
Trust.

         "RESERVE REPORT" means a report of estimated proved reserves
attributable to the Royalties and the present value thereof prepared on the
basis required by the SEC for inclusion in financial statements filed with the
SEC.

         "ROYALTIES" means the overriding royalty interests conveyed to the
Trustee pursuant to the Conveyances.

         "SEC" means the Securities and Exchange Commission and any agency which
may succeed to its responsibilities and functions after the date hereof.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SECURITIES ACT REGISTRATION STATEMENT" means the registration
statement on Form S-4 and complying with the requirements of the Securities Act,
and the rules and regulations thereunder, to be filed with the SEC by Grantor
and the Trust and by which, among other things, the Units may be offered under
the Securities Act.

         "SUBJECT INTERESTS" has the meaning set forth in the Conveyances.

         "TRANSFEREE," as to any Unitholder or former Unitholder, means any
Person succeeding to the interest of such Unitholder or former Unitholder in one
or more Units of the Trust, whether as purchaser, donee, legatee or otherwise.

         "TRUST" means the express trust created hereby which shall be held and
administered as provided herein and in accordance with the terms and provisions
(not inconsistent with any terms and provisions hereof) of the Texas Trust Code.

         "TRUST ESTATE" means the assets held by the Trustee under this
Agreement, and shall include both income and principal if separate accounts or
records are kept therefor.

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         "TRUST ORRI PERCENTAGE" has the meaning set forth in Section 3.2(b) of
this Agreement.

         "TRUST PROPERTY PERCENTAGE" has the meaning set forth in Section 3.2(b)
of this Agreement.

         "TRUSTEE" means the initial trustee under this instrument, or any
successor, during the period it is so serving in such capacity.

         "UNIT" means an undivided fractional interest in the Beneficial
Interest, determined as hereinafter provided.

         "UNITHOLDER" means the owner of one or more Units as reflected on the
books of the Trustee pursuant to Article IV.

                                  ARTICLE II.
                         NAME AND PURPOSE OF THE TRUST

         Section 2.1. Name. The Trust shall be known as the Treasure Island
Royalty Trust, and the Trustee may transact the affairs of the Trust in that
name.

         Section 2.2. Purposes. The purposes of the Trust are:

         (a) to receive, hold, protect and conserve, for the benefit of the
Unitholders, the Trust Estate;

         (b) to convert the Royalties to cash either (1) by retaining them and
collecting the proceeds from production payable with respect thereto until
production has ceased or the Royalties have otherwise terminated or (2) by
selling or otherwise disposing of all or a part of the Royalties in accordance
with and subject to the terms of this Agreement;

         (c) to pay, or provide for the payment of, any costs and liabilities
incurred in carrying out the purposes of the Trust, and thereafter to distribute
the remaining amounts of cash received by the Trust to the Unitholders pro rata
based on the number of Units owned; and

         (d) subject to Section 3.3 of this Agreement, to engage in such other
activities as are necessary or convenient for the attainment of any of the
foregoing or are incident thereto and which may be engaged in or carried out by
a trust under the Texas Trust Code.

         Section 2.3. Nature of the Trust. It is the intention and agreement of
Grantor and the Trustee to create an express trust within the meaning of Section
111.004(4) of the Texas Trust Code, for the benefit of the owners of Units, and
a grantor trust for federal income tax purposes of which the owners of Units are
the grantors. As set forth above and amplified herein, the Trust is intended to
be limited to the receipt of revenues attributable to the Royalties and the
distribution of such revenues, after payment of or provision for Trust expenses
and liabilities, to the Unitholders. It is neither the purpose nor the intention
of the parties hereto to create, and nothing in this Trust Agreement shall be
construed as creating, a partnership, joint venture, joint stock company or
business association between or among Unitholders, present or future, or among
or between Unitholders, or any of them, and the Trustee or Grantor.

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         Section 2.4. Transfer of Trust Property to the Trust. Grantor has (a)
paid to the Trustee, in trust, and the Trustee has accepted, for the uses and
purposes provided herein, the sum of One Hundred Dollars ($100) in consideration
for 42,574,298 Units to be issued by the Trust to Grantor, which Units shall
collectively represent the entire Beneficial Interest in accordance with Section
4.1 of this Agreement and (b) pursuant to the Merger Agreement, agreed to cause
EEX and/or its Affiliates, after the Effective Time but on or before the
Issuance Date to enter into the Master Conveyance and to grant, bargain, sell,
convey and assign the Royalties to the Trust as provided for in the Master
Conveyance, effective as of the Effective Time, for the uses and purposes
provided herein and for the benefit of the Unitholders, pursuant to the
Conveyances.

         Section 2.5. Issuance of Units. The Units to be issued by the Trust to
Grantor in accordance with Section 2.4 shall be evidenced by a single temporary
Certificate. Upon receipt of written transfer instructions from Grantor, the
Trustee shall prepare Certificates (which may be temporary Certificates) in
proper form duly executed and countersigned in accordance with Section 4.3 of
this Agreement in such names and in such denominations as Grantor may request in
writing not less than two (2) full Business Days before the Issuance Date. The
Trustee shall deliver such Certificates to such location and at such time as is
stated in the written transfer instructions from Grantor and shall release such
Certificates (a) upon the receipt from Grantor of the Certificate referred to in
the first sentence of this Section 2.5, duly endorsed for transfer and (b) in
accordance with the instructions of Grantor.

                                  ARTICLE III.
                           ADMINISTRATION OF THE TRUST

         Section 3.1. General. The Trustee accepts the Trust created by this
Agreement and agrees to perform its duties in accordance with the terms of this
Agreement. Subject to the limitations set forth in this Agreement, the Trustee
is authorized to take such action as in its judgment is necessary or advisable
best to achieve the purposes of the Trust, including the authority to enter into
the Conveyances, to agree to modifications or settlements of the terms of the
Conveyances or to settle disputes with respect thereto, so long as such
modifications or settlements do not alter the nature of the Royalties as rights
to receive a share of the proceeds of oil and gas produced from the properties
presently burdened by such Royalties which are free of any obligation for
drilling, development or operating expenses and as rights which do not possess
any operating rights or obligations. The Trustee may not dispose of all or any
portion of the Royalties except as provided in Sections 3.2, 3.5, 3.9 and 9.3 of
this Agreement.

         Section 3.2. Limited Power to Dispose of Royalties.

         (a) In the event the Trustee determines it to be in the best interest
of the Unitholders the Trustee may sell, at any time and from time to time, all
or any part of any of the Royalties for cash in such a manner as it deems in the
best interest of the Unitholders if approved by the Unitholders present or
represented at a meeting held in accordance with the requirements of Article
VIII. This Section 3.2(a) shall not be construed to require approval of the
Unitholders for any sale or other disposition of all or any part of the
Royalties pursuant to Sections 3.2(b), 3.5, 3.9 or 9.3. The Trustee is
authorized to retain any of the Royalties in the form in which such

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property was transferred to the Trustee, without regard to any requirement to
diversify investments or other requirements.

         (b) Following commencement of commercial production of any of the
Subject Interests, Grantor may thereafter at any time and from time to time
notify the Trustee that it desires to sell for cash any of such Subject
Interests in commercial production to any Person other than the Grantor or an
Affiliate of Grantor free of and unburdened by the Royalties, and upon receipt
of such notice the Trustee shall be required to join in such sale and execute
and deliver a partial release, assignment or such other instrument as Grantor
may reasonably request to evidence that such Subject Interest is being sold free
and unburdened by the Royalties; provided, however, that the Trustee shall not
be required to join in such sale if (i) the value of the Royalties (determined
as provided below) associated with the Subject Interests to be so sold in any
calendar year pursuant to this Section 3.2(b) exceeds ten percent (10%) of the
value of all the Royalties then attributed with proved reserves (determined as
provided below) before such sale or (ii) the value of the Royalties (determined
as provided below) associated with the Subject Interests to be sold pursuant to
this Section 3.2(b) when added to the value of all the Royalties (determined as
provided below) sold pursuant to this Section 3.2(b) exceeds twenty-five percent
(25%) of the value of all the Royalties then attributed with proved reserves
(determined as provided below). The net proceeds from any sale pursuant to this
Section 3.2(b) shall be allocated to the Trust in a percentage equal to the
Overriding Royalty Percentage (as such term is defined in the applicable
Recordable conveyance with respect to the Subject Interest being sold, the
"Trust ORRI Percentage") divided by the sum of (x) the Trust ORRI Percentage
plus (y) the total net revenue interest of Grantor or any affiliate of Grantor
with respect to the Subject Interest being sold (the "Trust Property
Percentage") and to the Grantor in a percentage equal to the difference between
one hundred percent (100%) less the Trust Property Percentage applicable to the
Subject Interests being sold. For purposes of this Section 3.2(b), the value of
the Royalties associated with the Subject Interests to be sold and of all the
Royalties then attributed with proved reserves shall be the discounted present
value (using a discount rate of ten percent (10%) or such other rate required by
the SEC) of the future net revenues (calculated in accordance with criteria
prescribed by the SEC) attributable to the proved reserves attributable to such
Royalties, respectively, as determined by reference to the Reserve Report as of
December 31 of the year preceding the closing of the sale. The use of such
values is solely for the purpose of determining compliance with this Section
3.2(b) and it is recognized that the proceeds of sale may be greater or lesser
than the value so determined.

         Section 3.3. No Power to Engage in Business, Make Investments or Enter
into Certain Contracts. The Trustee shall not, in its capacity as Trustee under
the Trust, engage in any business or commercial activity of any kind whatsoever
and shall not, under any circumstances, use any portion of the Trust Estate to
acquire any oil and gas lease, royalty or other mineral interest other than the
Royalties, or, except as permitted in Sections 3.4 and 3.15, acquire any other
asset. The Trustee shall have no right or duty to operate the Subject Interests
burdened by the Royalties or to market any production therefrom. The Trustee
shall not accept contributions to the Trust other than the Royalties and the
initial cash deposit. The Trustee shall have no authority to, and shall not,
enter into any contract or undertaking in its capacity as Trustee under the
Trust that does not expressly provide that (i) any liability of the Trust
arising out of such contract shall be satisfiable only out of the Trust Estate
and (ii) in any event, including the

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<PAGE>

exhaustion of the Trust Estate, such liability shall not be satisfiable out of
any amounts at any time distributed to any Unitholder or out of any other assets
of any Unitholder.

         Section 3.4. Interest on Cash on Hand. Cash being held by the Trustee
as a reserve for liabilities (other than current routine administrative costs
payable pursuant to Article VII) or for distribution at the next Distribution
Date shall be invested (in the Trustee's discretion) in: (a) a money market or
similar account payable on demand without penalty, (b) obligations issued (or
unconditionally guaranteed) by the United States of America or any agency or
instrumentality thereof (provided such agency or instrumentality obligations are
secured by the full faith and credit of the United States of America), (c)
repurchase agreements secured by obligations qualifying under subparagraph (b)
above, (d) certificates of deposit of any bank having capital, surplus and
undivided profits in excess of $100,000,000, or (e) money market mutual funds
comprised solely of securities described in clauses (b) and (c). The interest
rate on reserves placed with any bank or financial institution serving as
Trustee shall be the interest rate that such bank or financial institution pays
in the normal course of business on amounts placed with it, taking into account
the amounts involved, the period held and other relevant factors and (ii) the
rate of interest paid on obligations qualifying under subparagraph (a) above.
Any such government obligations, repurchase agreements or certificates of
deposit representing funds to be distributed at the next Distribution Date must
mature on or before the next succeeding Distribution Date and must be held to
maturity. To the extent not prohibited by Section 113.057 of the Texas Trust
Code, any such cash may be placed with the Bank or any successor bank serving as
Trustee.

         Section 3.5. Power to Settle Claims. Subject to the limitations
specified in Article XI, the Trustee is authorized to prosecute or defend, or to
settle by arbitration or otherwise, any claim of or against the Trustee, the
Trust or the Trust Estate, to waive or release rights of any kind and to pay or
satisfy any debt, tax or claim upon any evidence by it deemed sufficient,
without the joinder or consent of any Unitholder. Such authority shall include,
but not be limited to, the authority to dispose of or relinquish title to any of
the Royalties that are the subject of such a dispute upon receipt of such
evidence. The Trustee agrees to respond definitively to, and within a
commercially reasonable time period following its receipt of, any written
request by Grantor relating to any such claim and complying with the last
sentence of this Section 3.5, and the failure of the Trustee so to respond
definitively and timely shall conclusively estop the Trustee from thereafter
claiming a right that is inconsistent with the stated intent as set forth in the
notice and materially detrimental to Grantor or its Affiliates with respect to
such requested matter. Any request made by Grantor intended to be governed by
this Section 3.5 shall specifically reference this Section.

         Section 3.6. Power to Contract for Services. In the administration of
the Trust, the Trustee is empowered to employ oil and gas consultants,
independent reservoir engineers, accountants (who may be the same accounting
firm who are engaged as outside auditors for Grantor), attorneys (who may be
counsel to Grantor unless Grantor otherwise notifies the Trustee in writing),
transfer agents and other professional and expert Persons and to employ or
contract for clerical and other administrative assistance (including assistance
from Grantor or its Affiliates) and to make payments of all fees for services or
expenses in any manner thus incurred out of the Trust Estate.

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<PAGE>

         Section 3.7. Payment of Liabilities of Trust. The Trustee shall, to the
extent that funds of the Trust are available therefor (which shall not include
funds previously set aside for payment of a Quarterly Distribution Amount), make
payment of all liabilities of the Trust, including, but without limiting the
generality of the foregoing, all expenses, taxes, liabilities of all kinds,
including compensation to it for its services hereunder, and compensation to
such Persons as may be employed as provided for in Section 3.6 hereof.

         Section 3.8. Establishment of Reserves. With respect to any liability
that which is contingent or uncertain in amount or that otherwise is not
currently due and payable, the Trustee in its sole discretion may, but is not
obligated to, establish a cash reserve for the payment of such liability.

         Section 3.9. Limited Power to Borrow.

         (a) If at any time the cash on hand and to be received by the Trust and
available to pay liabilities (other than compensation payable to the Trustee
pursuant to Section 7.1 and administrative expenses incurred pursuant to Section
7.2, such amounts to be funded by Grantor or an affiliate of Grantor through
loans to the trust as required by Section 7.5 ("GRANTOR LOANS")) is not, or will
not be, in the judgment of the Trustee, sufficient to pay such liabilities of
the Trust as they become due or to purchase Units if required under Section
3.15(b), the Trustee is authorized to borrow the funds required to pay such
liabilities or make such purchases. Provided, if Grantor or its Affiliates fails
to make any Grantor Loans, Trustee is authorized to borrow such funds as would
have been received from the Grantor Loans from any other Person. If the Trust
borrows any amounts pursuant to this Section, no further distributions will be
made to Unitholders (except in respect of previously determined Quarterly
Distribution Amounts) until the indebtedness created by such borrowing has been
paid in full. Such funds may be borrowed from any Person, including, without
limitation, Grantor or any Affiliate of Grantor, or the Bank or any other
fiduciary hereunder. To secure payment of such indebtedness, the Trustee is
authorized to mortgage, pledge, grant security interests in or otherwise
encumber (and to include as a part thereof any and all terms, powers, remedies,
covenants and provisions deemed necessary or advisable in the Trustee's
discretion, including, without limitation, the power of sale with or without
judicial proceedings) the Trust Estate, or any portion thereof, including the
Royalties, and to carve out and convey production payments.

         (b) Trustee is authorized to borrow funds from Grantor or any Affiliate
of Grantor, directly or indirectly, for the purposes described in Sections 7.4
or 7.5, and to the extent Trustee borrows such funds, such loans (and accrued
interest thereon) shall be repaid in quarterly installments only from the
excess, if any, of (i) the product of (A) the cash received by the Trustee
during the applicable Quarter and (B) .08 over (ii) all compensation,
reimbursements and other charges owing and paid to the Trustee for such Quarter
pursuant to Article VII. In the event that upon termination of the Trust, any
such loans remain outstanding, such loans, together with all accrued and unpaid
interest thereon, will be and be deemed forgiven, cancelled and discharged by
Grantor, or its Affiliates, as applicable, without the necessity of further act
or evidence. Such limitations shall not be applicable to any loans made by
Grantor or an Affiliate of Grantor pursuant to Section 3.9(a) above and such
loans by Grantor or its Affiliates pursuant to such Section shall be treated in
the same manner as a loan from a third party.

                                       9
<PAGE>

         Section 3.10. Income and Principal. The Trustee shall not be required
to keep separate accounts or records for income and principal or maintain any
reserves for depletion of the Royalties. However, if the Trustee does keep such
separate accounts or records, then the Trustee is authorized to treat all or any
part of the receipts from the Royalties as income or principal, and in general
to determine all questions as between income and principal and to credit or
charge to income or principal or to apportion between them any receipt or gain
and any charge, disbursement or loss as is deemed advisable under the
circumstances of each case. Regardless of any such characterization, however,
the Trustee shall not make any distribution, accumulate any funds, or maintain
any reserve except as expressly provided in this Agreement.

         Section 3.11. Term of Contracts. In exercising the rights and powers
granted hereunder, subject to Section 3.3, the Trustee is authorized to make the
term of any transaction or contract or other instrument extend beyond the term
of the Trust.

         Section 3.12. Transactions between Related Parties. The Trustee shall
not be prohibited in any way in exercising its powers from making contracts or
having dealings with itself in any other capacity (fiduciary or otherwise) or
with Grantor.

         Section 3.13. No Bond Required. The Trustee shall not be required to
furnish any bond or security of any kind.

         Section 3.14. Timing of Trust Income and Expenses. The Trustee will use
all reasonable efforts to cause the Trust and the Unitholders to recognize
income and expenses on Quarterly Record Dates. The Trustee will invoice the
Trust for services rendered by the Trustee only on a Quarterly Record Date and
shall cause the Trust to pay any such invoices only on the Quarterly Record Date
on which an invoice is rendered and will use all reasonable efforts to cause all
Persons to whom the Trust becomes liable to invoice the Trust for such liability
on a Quarterly Record Date and to cause the Trust to pay any such liabilities on
the Quarterly Record Date on which such liability is invoiced. In connection
with the requirements of any securities exchange on which the Units are listed
or market system through which Units are traded, the Trustee will, if required
by such securities exchange or market system, use all reasonable efforts to
determine the Quarterly Distribution Amount and report such amount to the
exchange or market system at such time as may be required by such securities
exchange or market system. Nothing in this Section 3.14 shall be construed as
requiring the Trustee to cause payment to be made for Trust liabilities on any
date other than on such date as in its sole discretion it shall deem to be in
the best interest of the Unitholders.

         Section 3.15. Divestiture of Units. If at any time the Trust or the
Trustee is named a party in any judicial or administrative proceeding which
seeks the cancellation or forfeiture of any property in which the Trust has an
interest because of the nationality, or any other status, of any one or more
Unitholders, the following procedures will be applicable:

         (a) The Trustee will promptly give written notice ("NOTICE") to each
Unitholder ("INELIGIBLE HOLDER") whose nationality or other status is an issue
in the proceeding as to the existence of such controversy related to the
Royalties, the Trust or the Units. The Notice will contain a reasonable summary
of such controversy and will constitute a demand to each

                                       10
<PAGE>

Ineligible Holder that he dispose of his Units to a party which would not be an
Ineligible Holder within 30 days after the date of the Notice.

         (b) If any Ineligible Holder fails to dispose of his Units as required
by the Notice, the Trustee will have the right to purchase, and will purchase,
any such Units at any time during the 90 days after the expiration of the 30-day
period specified in the Notice. The purchase price on a per Unit basis will be
determined as of the last Business Day ("DETERMINATION DAY") preceding the end
of the 30-day period specified in the Notice and will equal the following per
Unit amount: (i) if the Units are then listed on a securities exchange the price
will equal the closing price of the Units on such exchange (or, if the Units are
then listed on more than one exchange, on the largest such exchange in terms of
the volume of Units traded thereon during the preceding twelve months) on the
determination day if any Units were sold on such exchange on such day or, if
not, on the last preceding day on which any Units were sold on such exchange or
(ii) if the Units are not then listed on any securities exchange, but are traded
through a market system, the price will equal the mean between the closing bid
and asked prices for the Units in such market system on the determination day if
quotations for such prices on such day are available or, if not, on the last
preceding day for which such quotations are available or (iii) if the Units are
not then listed on any stock exchange or traded through any market system, the
price will be determined by dividing the present value of the estimated future
net revenues attributable to proved reserves of the Royalties as reflected in
the latest Reserve Report prepared for the Trust, prepared using a discount rate
of ten percent (10%) or such other rate required by the SEC and otherwise in
accordance with such other criteria as shall then be prescribed by the SEC as
contemplated by Section 3.17 (minus all liabilities of the Trust) by the number
of Units (including the Units to be purchased) then outstanding. Such purchase
will be accomplished by tender of the above cash price to the Ineligible Holder
at his address as shown on the records of the Trustee, either in person or by
mail as provided in Section 12.6, accompanied by notice of cancellation.
Concurrently with such tender the Trustee shall cancel or cause to be cancelled
all Certificates representing Units then owned by such Ineligible Holder and for
which tender has been made, and the Trustee shall issue or cause to be issued to
itself a Certificate or Certificates representing the same number of Units as
were so cancelled. Upon such cancellation, the Ineligible Holder shall part with
the Beneficial Interest attributable to the Units theretofore owned by him and
all interests, rights and benefits of the Ineligible Holder as a Unitholder
shall terminate. In the event the tender is refused by the Ineligible Holder or
if he cannot be located after reasonable efforts to do so, the tendered sum
shall be held by the Trustee in an interest bearing account for the benefit of
such Ineligible Holder, until proper claim for same (together with interest
accrued thereon) has been made by such Holder, but subject to applicable laws
concerning unclaimed property. If a determination day shall occur prior to the
earliest date at which a Reserve Report is available to the Trust and at such
time, the Units are not then listed on any stock exchange or traded through any
market system, the price will be determined by the good faith resolution of
Grantor's Board of Directors, a copy of which, certified by Grantor's Secretary,
will be provided by Grantor to the Trustee promptly upon the adoption thereof.

         (c) The Trustee may, in its sole discretion, cancel any Units acquired
in accordance with the foregoing procedures or may sell such Units, either
publicly or privately, in accordance with all applicable laws. The proceeds of
any such sale of Units, less the expenses of such sale, will constitute revenues
of the Trust.

                                       11
<PAGE>

         Section 3.16. Filing of Registration Statement.

         (a) The Trustee shall, in connection with the distribution of the Units
by Grantor to Electing Holders and otherwise, upon the request of Grantor, on
behalf of the Trust, cooperate with Grantor and otherwise use its best efforts
to cause:

                  (i) the Securities Act Registration Statement to be prepared,
         signed, filed and declared effective by the SEC;

                  (ii) an Exchange Act Registration Statement to be prepared,
         signed, filed and become effective; and

                  (iii) the Units to be qualified or exempted from qualification
         under the securities or Blue Sky laws of the several states

         (b) Grantor shall be obligated and entitled, at its own expense except
as otherwise herein provided, to take or cause to be taken all steps customary
or appropriate to the accomplishment of the objectives set forth above
including, without limitation, engaging counsel for itself and approving special
counsel for the Trust, engaging accountants for the Trust, contracting for all
printing and engraving services, making all filings and applications necessary
to the foregoing and paying all filing and application fees associated
therewith. The Trustee shall execute, by and on behalf of the Trust, any
documents incidental or related to the foregoing as reasonably requested by
Grantor. Notwithstanding anything in this Section 3.16 to the contrary, unless
required by the SEC, the Trustee shall not be required to sign any Securities
Act Registration Statement or Exchange Act Registration Statement in connection
with the distribution of Units by Grantor to Electing Holders. If the Trustee
does not sign any Securities Act Registration Statement or Exchange Act
Registration Statement on behalf of the Trust in connection with such
distribution of Units by Grantor to Electing Holders, then Grantor may sign on
behalf of the Trust.

         (c) Except as precluded in Article VI, the reasonable fees, charges,
expenses, disbursements and other costs incurred by the Trustee in connection
with the discharge of its duties under this Section 3.16 shall be paid by the
Trust.

         (d) The Trustee shall cooperate with and assist Grantor in every
reasonable way and in good faith in accomplishing the foregoing. Among other
things, the Trustee shall permit counsel, special counsel and accountants
engaged by Grantor and other representatives of Grantor reasonable access to
information responsive to the requirements of the Securities Act, the Exchange
Act, the securities or Blue Sky laws of the several states and to Trustee
personnel having such information, as fully and to the same extent as if the
Trustee were proceeding for its own purposes to accomplish such objectives. The
Trustee agrees to provide Grantor with the authority and, if required pursuant
to Section 3.16(b) above, the signatures required for the filing of the
Securities Act Registration Statement, the Exchange Act Registration Statement
and any registration statements, notices of exemption, applications for
exemption, consents to service of process and all other documents necessary to
comply with the Blue Sky laws of the several states The Trustee shall also
provide Grantor upon request with a Unitholders' list as of the latest Quarterly
Record Date in such form as Grantor may reasonably request.

                                       12
<PAGE>

         (e) After the registration of the Units pursuant to the Exchange Act,
the Trustee, on behalf of the Trust, shall cause the Trust to comply with all of
the rules, orders and regulations of the SEC and take all such other actions
necessary for the Units to remain so registered until the Trust is terminated.

         (f) To the fullest extent permitted by law, Grantor agrees to defend,
indemnify and hold the Trust and the Trustee and its officers, employees, agents
and controlling persons harmless from and against any liabilities, obligations,
suits, costs, expenses, claims, damages, losses, penalties, taxes, fees and
other charges (collectively, "EXPENSES"), joint or several, or any action in
respect thereof, to which the Trust or the Trustee or the officers, employees or
agents of the Trustee or any controlling person of the Trustee becomes subject,
under or with respect to the Securities Act, the Exchange Act, any other federal
or state securities law or otherwise, insofar as such Expenses arise out of, or
are based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Securities Act Registration Statement or Exchange
Act Registration Statement, listing application with any national securities
exchange or the National Association of Securities Dealers Automated Quotation
System, or any other document filed by or on behalf of Grantor with the SEC or
pursuant to any other federal or state securities law, or any other statement
publicly made by or on behalf of Grantor, or (ii) the omission or alleged
omission to state in any Securities Act Registration Statement or Exchange Act
Registration Statement listing application with any national securities exchange
or the National Association of Securities Dealers Automated Quotation System, or
any other document, or any other statement publicly made by or on behalf of
Grantor, any material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that Grantor shall not
be liable in any case to the extent that any Expense arises out of, or is based
upon, (A) any fraudulent misrepresentation, gross negligence or willful
misconduct of the Trustee or (B) any untrue statement or alleged untrue
statement or omission or alleged omission included in any such Securities Act
Registration Statement or Exchange Act Registration Statement, or any other
document filed by or on behalf of Grantor, the Trust or the Trustee with the
SEC, or any other statement publicly made by or on behalf of Grantor, the Trust
or the Trustee in reliance upon and in conformity with written information
furnished by or on behalf of the Trustee specifically for inclusion therein.
This provision shall in no way limit the general rights to indemnification and
contribution and limitations on liability of the Trust and Trustee set forth in
Article VI of this Agreement or elsewhere herein. Grantor shall promptly
reimburse the Trustee for, or advance to the Trustee, any fees or expenses,
including reasonable legal expenses, incurred by the Trustee in connection with
the investigation or defense of any Expenses with respect to which the Trustee
is entitled to indemnity by Grantor under this Section 3.16(f).

         Section 3.17. Reserve Reports. Provided that the Royalties have
quantifiable reserves related to them as of December 31 of any year, the Trustee
shall cause a Reserve Report for the Royalties to be prepared as of December 31
of such year, in accordance with criteria established by the SEC showing
estimated proved oil and gas reserves attributable to the Royalties as of
December 31 of such year and other reserve information required in order for the
Trustee to furnish the information required in Sections 5.3 and 5.4 of this
Agreement. The Reserve Reports shall be prepared by a firm of independent
petroleum engineers selected by the Trustee. Such Reserve Report shall also show
estimated future net revenues and the net present value (discounted at ten
percent (10%) or such other rate required by the SEC) of the estimated future

                                       13
<PAGE>

net revenues (calculated in accordance with criteria established by the SEC) of
proved reserves attributable to the Royalties. The costs of such Reserve
Reports, whether provided by Grantor or obtained by the Trustee, shall
constitute an administrative expense of the Trust payable out of the Trust
Estate pursuant to Section 3.7. Grantor shall assist the Trustee in the
preparation of the Reserve Reports by furnishing all current and existing
reserve, production and geophysical data in its possession relating to the
Royalties reasonably requested by or on behalf of the independent petroleum
engineers selected by the Trustee as necessary to prepare such Reserve Reports;
provided, however, that Grantor shall not be required to disclose or produce any
information, documents or other materials which (a) were generated for analysis
or discussion purposes or contain interpretative data or (b) are subject to the
attorney-client or attorney-work product privileges, or any other privileges to
which Grantor may be entitled pursuant to applicable law.

         Section 3.18. Miscellaneous. Except as otherwise provided in this
Agreement, this Agreement and the Trust shall be governed, construed,
administered and controlled by and under the laws of the State of Texas, and the
rights, powers, duties and liabilities of the Trustee shall be in accordance
with and governed by the terms and provisions of the Texas Trust Code and other
applicable laws of the State of Texas as in effect at any applicable time.

         Section 3.19. Unitholders. Trustee shall provide to any Unitholder a
list of each Unitholder of record as of the immediately preceding Quarterly
Distribution Date prior to the date of receipt of such request. By accepting the
Units, each Unitholder consents to Trustee providing such listing of Unitholders
to other Unitholders.

                                  ARTICLE IV.
                       BENEFICIAL SHARES AND CERTIFICATES

         Section 4.1. Creation and Distribution. The entire Beneficial Interest
shall be divided into 42,574,298 Units. The ownership of the Units shall be
evidenced by Certificates in substantially the form of Schedule 1 attached to
this Agreement, containing such changes or alterations of form, but not
substance, as the Trustee shall from time to time, in its discretion, deem
necessary or desirable.

         Section 4.2. Beneficial Interest of Unitholders. Each Unit shall
represent pro rata undivided ownership of the Beneficial Interest and shall
entitle its holder to participate pro rata in the rights and benefits of the
Unitholders under this Agreement. A Unitholder (by assignment or otherwise)
shall take and hold each Unit subject to all the terms and provisions of this
Agreement and the Conveyances, which shall be binding upon and inure to the
benefit of the heirs, personal representatives, successors and assigns of the
Unitholder. By an assignment or transfer of one or more Units represented by a
Certificate, the assignor thereby shall, effective as of the close of business
on the date of transfer and with respect to such assigned or transferred Unit or
Units, part with, except as provided in Section 4.4 in the case of a transfer
after a Quarterly Record Date and prior to the corresponding quarterly payment
date, (i) all his Beneficial Interest attributable thereto; (ii) all his rights
in, to and under such Certificate; and (iii) all interests, rights and benefits
under this Trust of a Unitholder which are attributable to such Unit or Units as
against all other Unitholders and the Trustee. The Certificates, the Units and
the rights, benefits and interests evidenced by either or both (including,
without limiting the

                                       14
<PAGE>

foregoing, the entire Beneficial Interest) are and shall be held and construed
to be in all respects intangible personal property, and the Certificates and
Units evidenced thereby shall be bequeathed, assigned, disposed of and
distributed as intangible personal property. No Unitholder as such shall have
any legal or equitable title in or to any real or personal property interest
which is a part of the Trust Estate, including, without limiting the foregoing,
the Royalties or any part thereof, but the sole interest of each Unitholder
shall be such Unitholder's Beneficial Interest and the obligation of the Trustee
to hold, manage and dispose of the Trust Estate and to account for the proceeds
thereof as herein provided. No Unitholder shall have the right to call for or
demand or secure any partition or distribution of the Royalties during the
continuance of the Trust or during the period of liquidation and winding up
under Section 9.3 of this Agreement.

         Section 4.3. Execution of Certificates.

         (a) All Certificates shall be signed by a duly authorized officer of
the Trustee. Certificates may be signed on behalf of the Trustee by such persons
as at the actual date of the signing of such Certificates shall be the proper
officers of the Trustee, although at the nominal date of such Certificates any
such person shall not have been such officer of the Trustee. Any such signature
may be the manual or facsimile signature (to the extent permitted by law or the
rules or regulations of any stock exchange or quotation system on which the
Units are listed or traded) of such officers and may be affixed, imprinted or
otherwise reproduced on the Certificate.

         (b) Pending the preparation of definitive Certificates, the Trustee
shall execute, and the transfer agent and registrar for the Units appointed in
accordance with Section 3.6 of this Agreement shall countersign and register,
temporary Certificates, as directed in a certificate of an officer of Grantor.
Temporary Certificates may contain such references to any provisions of this
Agreement as may be appropriate. Each temporary Certificate shall be executed by
the Trustee and signed and registered upon the same conditions and in
substantially the same manner, and with like effect as the definitive
Certificates.

         (c) As promptly as practicable, the Trustee shall execute and furnish
definitive Certificates and thereupon temporary Certificates may be surrendered
in exchange therefor without charge to the Unitholders at the principal office
of the transfer agent at which Certificates may be presented for transfer
pursuant to Section 4.4 hereof, and the Trustee (or the transfer agent and
registrar if the Trustee is not serving in such capacities) shall sign and
register in exchange for such temporary Certificates a like aggregate amount of
definitive Certificates. Until so exchanged, the temporary Certificates shall be
entitled to the same benefits under this Agreement as definitive Certificates.

         Section 4.4. Registration and Transfer of Units. The Units shall be
transferable as against the Trustee as provided herein, and then only on the
records of the Trustee and, except as provided in Section 3.15 hereof, upon the
surrender of Certificates, if any, and compliance with such reasonable
regulations as it may prescribe. No service charge shall be made to Unitholders
or Transferees for any transfer of a Unit, but the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto. Until any such transfer is completed, the Trustee
may treat the owner of any Unit as shown by its records as the owner of the Unit
for all purposes and shall not be charged with notice of any claim or

                                       15
<PAGE>

demand respecting such Unit or the Beneficial Interest represented thereby by
any other Person. Any such transfer of a Unit shall, as to the Trustee, transfer
to the Transferee as of the close of business on the date of transfer all of the
Beneficial Interest of the transferor; provided, however, that a transfer of a
Unit after any Quarterly Record Date shall not transfer to the Transferee the
right of the transferor to any sum payable to such transferor as title holder of
the Certificate of record on such Quarterly Record Date. As to matters affecting
the title, ownership, warranty or transfer of Units and Certificates, except as
provided to the contrary herein, Article 8 of the Uniform Commercial Code, the
Texas Uniform Act for Simplification of Fiduciary Security Transfers under
Chapter 33 of the Texas Business and Commerce Code and other statutes and rules
with respect to the transfer of securities, each as adopted and then in force in
the State of Texas, shall govern and apply. The death of any Unitholder shall
not entitle the Transferee to an accounting or valuation for any purpose, but
such Transferee shall succeed to all rights of the deceased Unitholder under
this Agreement upon proper proof of title satisfactory to the Trustee.

         Section 4.5. Mutilated, Lost, Stolen and Destroyed Certificates. If any
Certificate is lost, stolen, destroyed or mutilated, the Trustee, in its
discretion and upon proof satisfactory to the Trustee, together with receipt by
the Trustee of a surety bond sufficient in the opinion of the Trustee to
indemnify the Trustee and the Trust against all losses and expenses that may
reasonably be expected to be incurred in connection therewith (if deemed
advisable by the Trustee), and surrender of the mutilated Certificate, will
issue a new Certificate to the holder of such lost, stolen, destroyed or
mutilated Certificate as shown by the records of the Trustee, upon payment of a
reasonable charge of the Trustee and any reasonable expenses incurred by it in
connection therewith.

         Section 4.6. Protection of Trustee. The Trustee shall be protected in
acting or relying upon any notice, certificate, assignment or other document or
instrument believed by the Trustee to be genuine and to be signed by the proper
party or parties, including, without limitation, any instructions or documents
received from Grantor in connection with this Agreement. Except as provided
herein to the contrary, the Trustee is specifically authorized to rely upon the
application of Article 8 of the Uniform Commercial Code, the application of the
Texas Uniform Act for Simplification of Fiduciary Security Transfers under
Chapter 33 of the Texas Business and Commerce Code and the application of other
statutes and rules with respect to the transfer of securities, each as adopted
and then in force in the State of Texas, as to all matters affecting title,
ownership, warranty or transfer of the Certificates and the Units represented
thereby, without any personal liability for such reliance, and the indemnity
granted under Section 6.2 of this Agreement shall specifically extend to any
matters arising as a result thereof.

         Section 4.7. Determination of Ownership of Certificates. In the event
of any disagreement between Persons claiming to be Transferees of any Unit, and
in addition to any other rights it may have under applicable law, the Trustee
shall be entitled, at its option, to refuse to recognize any such claim so long
as such disagreement shall continue. In so refusing, the Trustee may elect to
make no delivery or other disposition of the interest represented by the
Certificate involved, or any part thereof, or of any sum or sums of money,
accrued or accruing thereunder, and, in so doing, the Trustee shall not be or
become liable to any Person for the failure or refusal of the Trustee to comply
with such conflicting claims, and the Trustee shall be entitled to continue so
to refrain and refuse so to act, until

                                       16
<PAGE>

         (a) the rights of the adverse claimants have been adjudicated by
arbitration (pursuant to Article XI) or by a final nonappealable judgment of a
court assuming and having jurisdiction of the parties and the interest and money
involved, or

         (b) all differences have been resolved by valid agreement between such
parties and the Trustee shall have been notified thereof in writing signed by
all of the interested parties.

                                   ARTICLE V.
                      ACCOUNTING AND DISTRIBUTION; REPORTS

         Section 5.1. Fiscal Year and Accounting Method. The fiscal year of the
Trust shall be the calendar year. The Trustee shall maintain its books in
accordance with generally accepted accounting principles or such other method as
will provide appropriate financial data responsive to the needs of the
Unitholders and which shall comply with Sections 5.3 and 5.4.

         Section 5.2. Distributions. The Trustee shall determine the Quarterly
Distribution Amount for each Quarter and shall establish a cash reserve equal to
such amount on the Quarterly Record Date for such Quarter. On the Distribution
Date for such Quarterly Distribution Amount, the Trustee will distribute pro
rata to the Unitholders of record on such Quarterly Record Date such Quarterly
Distribution Amount. Notwithstanding anything herein to the contrary, Trustee
shall not make any distribution to the Unitholders unless and until the Trust
has received revenues generated from the Royalties.

         Section 5.3. Income Tax Reporting. For federal or state income tax
purposes, the Trustee shall file for the Trust such returns and statements as in
its judgment are required to comply with applicable provisions of the Code and
regulations and any applicable state laws and regulations, in either case to
permit each Unitholder to report such Unitholder's share of the income and
deductions of the Trust. The Trustee will treat all income and deductions of the
Trust for each Quarter as having been realized on the Quarterly Record Date for
such month unless otherwise advised by its counsel or the Internal Revenue
Service. The Trustee will report as a grantor trust until and unless it receives
an opinion of tax counsel that such reporting is no longer proper. Within 75
days following the end of each fiscal year, the Trustee shall mail, to each
Unitholder of record on a Quarterly Record Date during such fiscal year, a
report which shall show in reasonable detail such information as is necessary to
permit all holders of record of Units on a Quarterly Record Date during such
fiscal year to make calculations necessary for tax purposes, including
depletion.

         Section 5.4. Reports to Unitholders. As promptly as practicable
following the end of each calendar quarter except the fourth calendar quarter,
(a) the Trustee shall mail to each Person who was a Unitholder of record on a
Quarterly Record Date during such quarter a report which shall show in
reasonable detail such information as is necessary to permit holders of Units to
make all calculations necessary for tax purposes including depletion, and (b)
the Trustee shall mail to each Person who was a Unitholder of record on the last
Quarterly Record Date during such calendar quarter a report, which may be a copy
of the Trust's report on Form 10-Q under the Exchange Act, which shall show the
assets and liabilities of the Trust at the end of such quarter and distributable
income of the Trust for such quarter. Within 120 days following the end of each
fiscal year, the Trustee shall mail, to each Unitholder of record on a date to
be

                                       17
<PAGE>

selected by the Trustee, an annual report containing financial statements
audited by a nationally recognized firm of public accountants selected by the
Trustee. Notwithstanding the foregoing, the Trustee will furnish to the
Unitholders such reports, in such manner and at such times, as are at any time
required by law or by rules or regulations of any securities exchange or
quotation system on which the Units are listed or admitted for trading, if
applicable.

         Section 5.5. Filings. The Trustee is authorized to make all Exchange
Act filings on behalf of the Trust required by applicable law or regulation.
Grantor shall prepare and file all filings and reports required under state
securities or Blue Sky laws. The Trustee is authorized to and shall take all
reasonable actions to prepare and mail to Unitholders any reports, press
releases or statements, financial or otherwise, that Grantor notifies the
Trustee in writing are required to be provided by the Trust to Unitholders by
law or governmental regulation or the requirements of any securities exchange or
quotation system on which the Units are listed or admitted for trading, if
applicable, subject to receipt by the Trustee of a satisfactory opinion of
counsel confirming the necessity of such reports, if such an opinion is deemed
necessary by the Trustee.

         Section 5.6. Information to be Supplied by Grantor and Trustee. Grantor
shall provide, or cause to be provided, to the Trustee on a timely basis (a)
annual audited financial statements of the Trust and quarterly unaudited
financial statements of the Trust in each case as shall be necessary for Trustee
to comply with the reporting obligations of the Trust pursuant to the Exchange
Act and/or the requirements of any securities exchange or quotation system on
which the Units are listed or admitted for trading and (b) such other
information as is not known to the Trustee or is otherwise more easily available
to Grantor than to the Trustee concerning the Royalties (including information
with respect to the properties burdened by the Royalties) and related matters as
shall be necessary for Trustee to comply with the reporting obligations of the
Trust pursuant to the Exchange Act, the requirements of any securities exchange
or quotation system on which the Units are listed or admitted for trading and
this Agreement, if applicable, including, without limitation, Sections 5.3, 5.4
and 5.5 hereof. For purposes of this Section 5.6, the phrase "timely basis"
shall mean not less than 10 days prior to the date on which the Trustee is
required to comply with such reporting obligations of the Trust. In addition,
Grantor shall provide to the Trustee on a timely basis, for use in connection
with the Trust's Form 10-K annual report and Form 10-Q quarterly report, a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" relating to such financial statements. Notwithstanding any provision
to the contrary in this Agreement or the Conveyances, Grantor and its Affiliates
shall not be required to disclose, produce or prepare any information, documents
or other materials which (i) were generated for analysis or discussion purposes
or contain interpretative data or (ii) are subject to the attorney-client or
attorney-work-product privileges, or any other privileges to which they may be
entitled pursuant to applicable law.

         Section 5.7. Reliance on Information. The Trustee, so long as acting in
good faith, shall be entitled to rely, without investigation, on all information
provided to it by Grantor for purposes of complying with the reporting
obligations of the Trust as contemplated by Section 5.6, including, without
limitation, information regarding depletion and entitlement to tax credits under
Section 29 of the Code. Notwithstanding any time limit imposed by applicable
laws or regulations or by the provisions of this Agreement, if, due to the
unavailability prior to the expiration of any such time limit of information
necessary, or a delay in receipt by the Trustee of

                                       18
<PAGE>

information necessary, for preparation of a report required to be filed, made or
delivered by the Trustee, the Trustee shall be unable to prepare and file or
mail such report within such time limit, the Trustee shall prepare and file or
mail such report as soon as practicable after such information is received.

                                  ARTICLE VI.
                      LIABILITY OF TRUSTEE, INDEMNIFICATION
                            AND METHOD OF SUCCESSION

         Section 6.1. Liability of Trustee. The Trustee, in carrying out its
powers and performing its duties, may act in its discretion directly, or at the
expense of the Trust, through agents or attorneys pursuant to agreements entered
into with any of them, and shall be personally or individually liable only for
fraud or gross negligence or for acts or omissions in bad faith as adjudicated
by arbitration or a final, nonappealable judgment of a court of competent
jurisdiction and shall not individually or personally be liable for any act or
omission of any agent or employee of the Trustee unless the Trustee has acted in
bad faith or with gross negligence in the selection and retention of such agent
or employee.

         Section 6.2. Indemnification of Trustee. The Trustee and its officers,
agents and employees when acting in such capacity shall be indemnified and held
harmless by, and receive reimbursement from, the Trust Estate and the Grantor,
jointly and severally, against and from any and all Expenses incurred by it
individually or as Trustee in the administration of the Trust and the Trust
Estate or any part or parts thereof, including, without limitation, any Expenses
arising out of or in connection with any liability under Environmental Laws, or
in the doing of any act done or performed or omission occurring on account of
its being Trustee or acting in such capacity, except such Expenses to which it
is liable under Section 6.1. Trustee shall have a lien upon the Trust Estate to
secure it for such indemnification and reimbursement and for compensation to be
paid to Trustee. Except as provided in Section 4.5, neither the Trustee nor any
officer, agent or employee of the Trustee shall be entitled to any reimbursement
or indemnification from any Unitholder for any Expenses incurred by the Trustee
or any such officer, agent or employee, their right of reimbursement and
indemnification, if any, being limited solely to the Trust Estate (and Grantor
pursuant to Section 6.3), whether or not the Trust Estate is exhausted without
full reimbursement or indemnification of the Trustee or any such officer, agent
or employee. The Trust Estate or the Grantor shall promptly reimburse the
Trustee for, or advance to the Trustee, any fees or expenses, including
reasonable legal expenses, incurred by the Trustee in connection with the
investigation or defense of any Expenses with respect to which the Trustee is
entitled to indemnity by Grantor under this Section 6.2.

         Section 6.3. Priority and Continuity of Indemnification Obligations.
Any Expenses for which the Trustee or any officer, agent, employee or
controlling person of the Trustee may be entitled to indemnification under
Section 6.2 shall be first satisfied out of the Trust Estate prior to any
indemnification from Grantor; provided, Grantor shall be required to provide
such indemnification at any time and from time to time that cash in the Trust
Estate or cash reasonably anticipated to be available is inadequate to satisfy
and discharge such Expenses. The obligations of the Trust Estate and Grantor to
indemnify the Trustee and its officers, agents, employees or controlling persons
under Sections 3.16(f) and 6.2 shall survive the resignation or removal of the
Trustee and the termination of the Trust and this Agreement.

                                       19
<PAGE>

         Section 6.4. Contribution. If the indemnification provided for in this
Agreement shall for any reason (including, without limitation, due to violation
of public policy) be unavailable to or insufficient to hold harmless the Trustee
in respect of any liability, expense, claims, damages or loss as to which the
Trustee would otherwise be entitled to indemnification pursuant to Sections
3.16(f) or 6.2, then Grantor and the Trust shall, in lieu of indemnifying the
Trustee, contribute to the amount paid or payable by the Trustee as a result of
such liability, expense, claims, damages or loss, in such proportion as shall be
appropriate to reflect the relative fault of Grantor (with respect to
contribution by the Trust or Grantor) or the Trustee with respect to the events,
acts or circumstances giving rise to the liability, expense, claims, damages or
loss, as well as any other relevant equitable considerations. For purposes of
determining contribution liability with respect to claims based upon the
Exchange Act, relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by Grantor or
by the Trustee. The Trustee shall look first to the Trust Estate for
contribution under this Section 6.4, and then to Grantor to the extent the
assets of the Trust Estate are not sufficient to reimburse the Trustee fully for
all such liability, expense, claims, damages or loss.

         Section 6.5. Indemnification Procedures. If any action or proceeding
shall be brought or asserted against the Trust, or the Trustee or any officer,
agent or employee thereof (each referred to as an "INDEMNIFIED PARTY" and,
collectively, the "INDEMNIFIED PARTIES") in respect of which indemnity may be
sought from Grantor or the Trust (the "INDEMNIFYING PARTY") pursuant to Sections
3.16(f) or 6.2 of this Agreement, of which the Indemnified Party shall have
received notice, the Indemnified Party shall promptly notify the Indemnifying
Party in writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all costs and expenses; provided, however, that the
failure so to notify the Indemnifying Party of the commencement of any such
action or proceeding shall not relieve the Indemnifying Party from any liability
that it may have to any Indemnified Party except to the extent that the
Indemnifying Party is prejudiced or damaged by the failure to receive prompt
notice. The Indemnified Party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Indemnified Party unless
(a) the Indemnifying Party has agreed to pay such fees and expenses, (b) the
Indemnifying Party shall have failed to assume the defense of such action or
proceeding and employ counsel reasonably satisfactory (including the
qualifications of such counsel) to the Indemnified Party on any such action or
proceeding or (c) the named parties to any such action or proceeding include
both the Indemnified Party and the Indemnifying Party and the Indemnified Party
shall have been advised by counsel that there may be one or more legal defenses
available to such Indemnified Party that are different from or in addition to
those available to the Indemnifying Party or any other Indemnified Party (in
which case, if the Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense of
such action or proceeding on behalf of the Indemnified Party and the Indemnified
Party may employ such counsel for the defense of such action or proceeding as is
reasonably satisfactory to the Indemnifying Party; it being understood, however,
that except in the case of the addition of counsel caused by the existence or
development of a conflict rendering unified representation impermissible or
unadvisable, the Indemnifying Party shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings in the same

                                       20
<PAGE>

jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys for
the Indemnified Parties at any time). The Indemnifying Party shall not be liable
for any settlement of any such action or proceeding effected without the written
consent of the Indemnifying Party, but, if settled with such written consent, or
if there be a final judgment for the plaintiff in any such action or proceeding,
the Indemnifying Party agrees (to the extent stated above) to indemnify and hold
harmless the Indemnified Party from and against any Expenses by reason of such
settlement or judgment. The Indemnified Party and the Indemnifying Party (if not
Grantor) shall, if so requested by Grantor, provide reports to Grantor on the
status of such actions or proceedings.

         Section 6.6. Resignation of Trustee. The Trustee may resign, with or
without cause, at any time by notice to Grantor and each of the then Unitholders
of record. Such notice shall specify a date when such resignation shall take
effect, which shall be a Business Day not fewer than sixty (60) days after the
date such notice is mailed; provided, however, that in no event shall any
resignation of the Trustee be effective until a qualified successor Trustee has
accepted appointment as successor Trustee. In case of such resignation, the
Trustee will use its reasonable efforts to nominate a successor, and will call a
meeting of Unitholders for the purpose of appointing a successor, and will
solicit proxies for such meeting. If the Trustee has given notice of resignation
in accordance with this Section 6.6 and a successor has not accepted its
appointment as successor Trustee during the 180-day period following the receipt
by Grantor of such notice of resignation, then Grantor will use its best efforts
to nominate a successor, and will request the resigning Trustee to call a
meeting for the purpose of appointing such nominee and Grantor will solicit
proxies for such meeting. If the Trustee has given notice of resignation in
accordance with this Section 6.6 and a successor has not accepted its
appointment as successor Trustee during the 180-day period following the receipt
by Grantor of such notice of resignation, the annual fee payable to the Trustee
in accordance with Section 7.1 of this Agreement to such resigning Trustee in
accordance with Schedule 2 hereto shall be increased as of the end of such
180-day period by 1%, and shall be further increased by 1% for each month or
portion thereof thereafter (to a maximum of three times the fee payable at the
time the notice of resignation was received by Grantor) until a successor has
accepted its appointment as successor Trustee.

         Section 6.7. Removal of Trustee. The Trustee may be removed, with or
without cause, at a meeting held in accordance with the requirements of Article
VIII by the affirmative vote of the holders of a majority of all the Units then
outstanding; provided, however, that any removal of the Trustee shall be
effective only at such time as a qualified successor Trustee has accepted
appointment as successor Trustee.

         Section 6.8. Appointment of Successor Trustee. In the event of a
vacancy in the position of Trustee or if the Trustee has given notice of its
intention to resign, the Unitholders present or represented at a meeting held in
accordance with the requirements of Article VIII may appoint a successor
Trustee. Nominees for appointment may be made by (a) the resigned, resigning or
removed Trustee, (b) any Unitholder or Unitholders owning of record at least
fifteen percent (15%) of the Units then outstanding or (c) Grantor. Any such
successor Trustee shall be a bank or trust company having a capital, surplus and
undivided profits (as of the end of its last fiscal year prior to its
appointment) of at least $100,000,000. In the event that a new Trustee has not
been approved within sixty (60) days after the notice of resignation, a vote of
a majority of the holders of Units removing the Trustee, or other occurrence of
a vacancy in the position of

                                       21
<PAGE>

Trustee, a successor Trustee may be appointed by any State or Federal District
Court having jurisdiction in Harris County, Texas, upon the application of
Grantor, any Unitholder or the Trustee tendering its resignation as Trustee, and
in the event any such application is filed, such court may appoint a temporary
trustee at any time after such application is filed, which shall, pending the
final appointment of a Trustee, have such powers and duties as the court
appointing such temporary trustee shall provide in its order of appointment,
consistent with the provisions of this Agreement.

         Immediately upon the appointment of any successor Trustee, all rights,
titles, duties, powers and authority of the predecessor Trustee hereunder
(except for the predecessor Trustee's rights to amounts payable under Article
VII prior to the appointment of such successor Trustee) shall be vested in and
undertaken by the successor Trustee, which shall be entitled to receive from the
predecessor Trustee all of the Trust Estate held by it hereunder and all records
and files in connection therewith. Any resigning or removed Trustee shall
account to its successor for its administration of the Trust. No successor
Trustee shall be obligated to examine or seek alteration of any account of any
preceding Trustee, nor shall any successor Trustee be liable personally for
failing to do so or for any act or omission of any preceding Trustee. The
preceding sentence shall not prevent any successor Trustee or anyone else from
taking any action otherwise permissible in connection with any such account.

         Section 6.9. Laws of Other Jurisdictions. If, notwithstanding the other
provisions of this Agreement, the laws of jurisdictions other than Texas (each
being referred to below as "SUCH JURISDICTION") apply to the administration of
properties under this Agreement, the following provisions shall apply. If it is
necessary or advisable for a trustee to serve in such jurisdiction and if the
Trustee is disqualified from serving in such jurisdiction or for any other
reason fails or ceases to serve there, an ancillary trustee which need not meet
the requirements set forth in the third sentence of Section 6.8 shall be
designated in writing by the Trustee. To the extent permitted under the laws of
such jurisdiction, the Trustee may remove the ancillary trustee in such
jurisdiction, without cause and without necessity of court proceeding or
Unitholder approval, and may or may not appoint a successor ancillary trustee in
such jurisdiction from time to time. The ancillary trustee serving in such
jurisdiction is requested and authorized, to the extent not prohibited under the
laws of such jurisdiction, to appoint the Trustee to handle the details of
administration in such jurisdiction. The ancillary trustee in such jurisdiction
shall have all rights, powers, discretions, responsibilities and duties as are
delegated in writing by the Trustee, subject to such limitations and directions
as shall be specified by the Trustee in the instrument evidencing such
appointment. Any ancillary trustee in such jurisdiction shall be responsible for
all assets with respect to which such trustee is empowered to act. To the extent
the provisions of this Agreement and Texas law cannot be made applicable to the
administration in such jurisdiction, the rights, powers, duties and liabilities
of the ancillary trustee in such jurisdiction shall be the same (or as near the
same as permitted under the laws of such jurisdiction if applicable) as if
governed by Texas law. In all events, the administration in such jurisdiction
shall be as free and independent of court control and supervision as permitted
under the laws of such jurisdiction. Whenever the term "Trustee" is applied in
this Agreement to the administration in such jurisdiction, it shall refer only
to the trustee then serving in such jurisdiction. The fees and expenses of any
ancillary trustee shall constitute expenses that are reimbursable to the Trustee
pursuant to Section 7.2. Without limiting the generality of Sections 6.1 and
6.2, the Trustee shall never have any personal liability for taking or failing
to take any

                                       22
<PAGE>

action authorized or contemplated by this Section 6.9, or for any action or
inaction thereof by any ancillary trustee appointed hereunder.

         Section 6.10. Force Majeure. No party to this Agreement (or its
Affiliates) shall incur any liability to any other party to this Agreement or to
any Unitholder if, by reason of any current or future law or regulation
thereunder of the federal government or any other governmental authority, or by
reason of any act of God, war or other circumstance beyond its control, such
party is prevented or forbidden from doing or performing any act or thing
required by the terms hereof to be done or performed; nor shall any party to
this Agreement incur any liability to any other party to this Agreement or any
Unitholder by reason of any nonperformance or delay caused as aforesaid in the
performance of any act or thing required by the terms hereof to be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for herein caused as set forth above.

                                  ARTICLE VII.
                           COMPENSATION OF THE TRUSTEE

         Section 7.1. Compensation of Trustee. The Trustee shall receive
compensation for its services as Trustee hereunder and as transfer agent as set
forth in Schedule 2 attached hereto.

         Section 7.2. Expenses. The reasonable out-of-pocket costs incurred by
the Trustee, including, but not limited to, charges for SEC and other fees,
Reserve Reports, audits, long distance telephone calls, overtime necessitated by
rush orders, travel, legal, accounting and other professional services,
printing, stationery, binders, envelopes, ledger sheets, transfer sheets,
checks, Certificate list sheets, postage and insurance will be reimbursed to the
Trustee at actual cost. The Trustee shall be reimbursed for actual reasonable
expenditures made on account of the performance of its duties in connection with
matters pertaining to the Trust, and the compensation and expenses of its
counsel, accountants or other skilled Persons and of all other Persons not
regularly in its employ.

         Section 7.3. Other Services. In the event of litigation involving the
Trust, audits or inspection of the records of the Trust pertaining to the
transactions affecting the Trust or any other unusual or extraordinary services
rendered in connection with the administration of the Trust, the Trustee shall
be entitled to receive reasonable compensation for the services rendered,
including but not limited to, the payment of the Trustee's standard rate or $100
per hour for all time spent by Trust personnel on such matters; provided,
however, the Trustee shall not be entitled to reimbursement or compensation for
services that unreasonably duplicate services provided by or through Grantor.

         Section 7.4. Source of Funds. All compensation, reimbursements and
other charges owing to the Trustee shall constitute indebtedness under this
Agreement and will be payable by the Trust out of the Trust Estate, and the
Trustee shall have a lien on the Trust Estate for the payment of such
compensation, reimbursements, and other changes, entitling the Trustee under
this Agreement to priority as to payment thereof over payment to any other
Person. If the amount equal to the product of (i) funds held by the Trustee in
the Trust Estate at a Quarterly Record Date and (ii) .08 are insufficient to
satisfy in full all such amounts owing to the Trustee under Section 7.1 and
Section 7.2 for the applicable Quarter, Grantor shall make loans available

                                       23
<PAGE>

to the Trustee, for the use and benefit of the Trust, pursuant to Section 3.9 in
such amounts as may be necessary from time to time to satisfy any deficiencies.

         Section 7.5. Funding. From time to time as the Trustee deems reasonably
necessary to assure adequate funding for the routine administration of the Trust
until such time as cash proceeds generated by the Royalties, or any of them,
that are received by the Trustee on behalf of the Trust are sufficient for such
purpose, the Trustee may request Grantor to make loans (and Grantor agrees to
make such loans), in amounts estimated by the Trustee to be required to cover
routine administrative expenses expected to be incurred within the 90-day period
following the date each such loan is made. All such loans shall be senior
unsecured obligations of the Trust, shall bear interest at the rate of eight
percent (8%) per annum and shall be repaid in accordance with, and otherwise be
subject to and entitled to the benefits of, Section 3.9(b).

         Section 7.6. Ownership of Units by Trustee. The Trustee, in its
individual or other capacities, may become the owner or pledgee of Units with
the same rights as it would have if it were not a Trustee hereunder.

                                 ARTICLE VIII.
                             MEETINGS OF UNITHOLDERS

         Section 8.1. Purpose of Meetings. A meeting of the Unitholders may be
called at any time and from time to time pursuant to the provisions of this
Article VIII to transact any matter that the Unitholders may be authorized to
transact.

         Section 8.2. Call and Notice of Meetings. Any such meeting of the
Unitholders may be called by the Trustee in its discretion and will be called by
the Trustee at the written request of Grantor or Unitholders owning of record
not less than fifteen percent (15%) in number of the Units then outstanding. All
such meetings shall be held at such time and at such place in Harris County,
Texas, as the notice of any such meeting may designate. Except as may otherwise
be required by applicable law or by any securities exchange or market system on
which the Units are admitted for trading, as applicable, written notice of every
meeting of the Unitholders signed by the Trustee setting forth the time and
place of the meeting and in general terms the matters proposed to be acted upon
at such meeting shall be given in person or by mail not more than sixty (60) nor
less than twenty (20) days before such meeting is to be held to all of the
Unitholders of record as of a record date set by the Trustee (the "RECORD DATE
UNITHOLDERS"), which shall be not more than sixty (60) days before the date of
such mailing. No matter other than that stated in the notice shall be acted upon
at any meeting. If such notice is given to any Unitholder by mail, it shall be
directed to him at his last address as shown by the ownership ledger of the
Trustee and shall be deemed duly given when so addressed and deposited in the
United States mail, postage paid. Only Record Date Unitholders shall be entitled
to notice of and to exercise rights at or in connection with the meeting. Except
as provided in Section 8.6, any action required by this Agreement to be taken at
a meeting of the Unitholders, or any action which may be taken at a meeting of
the Unitholders, may not be taken and shall not be effective without an actual
meeting of the Unitholders, prior written notice to the Unitholders thereof and
a vote by the Unitholders with respect thereto.

                                       24
<PAGE>

         Section 8.3. Voting. Each Record Date Unitholder shall be entitled to
one vote for each Unit owned by him, and any Record Date Unitholder may vote in
person or by duly executed written proxy. At any such meeting the presence in
person or by proxy of Record Date Unitholders holding a majority of the Units
outstanding at the record date shall constitute a quorum, and, except as
otherwise specifically provided herein, any matter shall be deemed to have been
approved by the Unitholders if it is approved by the vote of a majority in
interest of such Record Date Unitholders constituting a quorum, although less
than a majority of all of the Units at the time outstanding, except that the
affirmative vote by the Record Date Unitholders of

         (a) eighty percent (80%) or more of all the Units outstanding at the
record date shall be required to:

                  (i) approve or authorize any sale or other disposition of all
         or substantially all of the assets of the Trust, in a single
         transaction or series of transactions (including sales or dispositions
         authorized by Section 9.3); or

                  (ii) terminate the Trust pursuant to Section 9.2(c); or

                  (iii) approve any amendment to or affecting this Section
         8.3(a);

         (b) sixty percent (60%) or more of all the Units outstanding at the
record date shall be required to:

                  (i) approve or authorize any transaction with (i) Grantor or
         any Affiliate of Grantor, (ii) any Unitholder that is not an Affiliate
         of Grantor or (iii) any third Person not an Affiliate of Grantor that
         owns a leasehold working interest in any lease burdened by a Royalty;

                  (ii) approve or authorize any sale or other disposition of
         assets of the Trust (excluding sales or dispositions referred to in
         Section 8.3(a)(i) and sales or dispositions authorized under Sections
         3.2(b), 3.5, 3.9 or 9.3); or

                  (iii) approve any amendment to or affecting this Agreement
         other than amendments with respect to Section 8.3(a), except that
         amendments prohibited by Section 10.1 shall not be effected in any
         event and amendments authorized by Section 10.2 shall not require the
         approval of any Unitholder.

         Section 8.4. Conduct of Meetings. The Trustee may make such reasonable
regulations consistent with the provisions hereof as it may deem advisable for
any meeting of the Unitholders, including regulations covering the closing of
the transfer books of the Trustee for purposes of determining Unitholders
entitled to notice of or to vote at any meeting, the appointment of proxies, the
appointment and duties of inspectors of votes, the submission and examination of
proxies, Certificates and other evidence of the right to vote, the preparation
and use at the meeting of a list authenticated by or on behalf of the Trustee of
the Unitholders entitled to vote at the meeting and such other matters
concerning the calling and conduct of the meeting as it shall deem advisable.

                                       25
<PAGE>

         Section 8.5. Unitholder Proposals. In the event a meeting of
Unitholders is called for any purpose or a written consent is executed pursuant
to Section 8.6 at the request of any Unitholder or Unitholders pursuant to the
provisions of this Article VIII and the Trust remains subject to the
requirements of Section 12 of the Exchange Act, the Unitholder or Unitholders
requesting such meeting or executing such written consent shall be required to
prepare and file a proxy or information statement with the SEC regarding such
meeting or written consent in satisfaction of all applicable SEC rules and
regulations and at the expense of such requesting Unitholder or Unitholders. The
Unitholder or Unitholders requesting such meeting or executing such written
consent shall bear the expense of distributing to Unitholders the notice of
meeting and the proxy or information statement related thereto. The Trustee
shall cooperate in the preparation of any such proxy or information statement
and any related materials and shall provide such information for inclusion
therein as and to the extent reasonably necessary at the expense of the Trust.

         Section 8.6. Action Without Meeting. Any action required or permitted
to be authorized or taken at any meeting of Unitholders may be taken without a
meeting, without prior notice and without a vote if a consent in writing setting
forth the authorization or action as taken is signed by Unitholders holding
Units representing not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all Units
entitled to vote thereon were present and voted. Prompt notice of the
authorization or taking of any action pursuant to this Section 8.6 shall be
given to those Unitholders who have not consented in writing.

         Section 8.7. Units Owned by Grantor Deemed Not Outstanding. In
determining whether Unitholders holding the requisite number of Units have
concurred in any vote, direction, consent or waiver under this Agreement, Units
which are beneficially owned (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) by Grantor or by any Affiliate of Grantor or, for purposes of
Section 8.3(a)(ii) and 8.3(b)(iii), any third Person not an Affiliate of Grantor
that owns a leasehold working interest in any lease burdened by a Royalty, or,
for purposes of Section 8.3(b)(ii), the Unitholder proposing to enter into a
transaction with the Trustee for the benefit of the Trust that is the subject of
the required vote shall be disregarded and deemed not to be outstanding for the
purpose of any such vote or determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on any such vote,
direction, consent or waiver only Units which the Trustee actually knows are so
owned shall be so disregarded. In case of a dispute as to such right, the advice
of counsel shall be full protection in respect of any decision made by the
Trustee in accordance with such advice. Upon request of the Trustee, Grantor
shall furnish to the Trustee promptly an officer's certificate listing and
identifying all Units so owned by Grantor or any of its Affiliates, if any; all
Units actually known by employees of Grantor servicing the Trust (i) to be so
owned or held by or for the account of any third Person not an Affiliate of
Grantor that owns a leasehold working interest in any lease burdened by a
Royalty, if any; and/or (ii) all Units so owned by any Unitholder proposing to
enter into a transaction with the Trustee for the benefit of the Trust; and,
subject to Section 6.1, the Trustee shall be entitled to accept such officer's
certificate as conclusive evidence of the facts therein set forth and of the
fact that all Units not listed therein are outstanding for the purpose of any
such determination.

                                       26
<PAGE>

                                  ARTICLE IX.
                  DURATION, REVOCATION AND TERMINATION OF TRUST

         Section 9.1. Revocation. The Trust is and shall be irrevocable and
Grantor, as such, retains no power to alter, amend or terminate the Trust. The
Trust shall be terminable only as provided in Section 9.2, and shall continue
until so terminated.

         Section 9.2. Termination. The Trust shall terminate upon the first to
occur of the following events:

         (a) the disposition of all of the Royalties pursuant to the terms of
this Agreement;

         (b) at such time as the aggregate cash proceeds received by the Trustee
with respect to the Royalties for each of two successive years after the first
full year during which any of the Subject Interests produce Hydrocarbons (as
defined in the Conveyances) in commercial quantities is less than $1,000,000 per
year;

         (c) the Trustee shall have failed to receive any aggregate cash
proceeds attributable to the Royalties during the period commencing on the
Effective Time through the third anniversary after the date that none of the
Subject Interests remain in their respective primary terms (including by way of
maintenance of any Subject Interest in the absence of production beyond its
stated primary term through Suspension of Production orders or other regulatory
relief granted by the federal Minerals Management Service or successor agency);

         (d) a vote in favor of termination by the Unitholders present or
represented at a meeting and entitled to vote thereon, held in accordance with
the requirements of Article VIII; or

         (e) the expiration of twenty-one years after the death of the last
survivor of the lawful descendants of any degree of the signers of the
Declaration of Independence in being on the date of execution hereof.

provided, however, that notwithstanding anything else in this Agreement to the
contrary, in no event shall the Trust be terminable or terminated if any Subject
Interest remains in its primary term (including by way of maintenance of such
Subject Interest in the absence of production beyond its stated primary term
through a Suspension of Production order or other regulatory relief granted by
the federal Minerals Management Service or successor agency).

         Section 9.3. Disposition and Distribution of Properties. For the
purpose of liquidating and winding up the affairs of the Trust at its
termination, the Trustee shall continue to act as such and exercise each power
until its duties have been fully performed and the Trust Estate finally
distributed. Upon the termination of the Trust, the Trustee shall sell for cash
in one or more sales all the properties other than cash then constituting the
Trust Estate. The Trustee shall as promptly as possible distribute the proceeds
of any such sales and any other cash in the Trust Estate according to the
respective interests and rights of the Unitholders, after paying, satisfying and
discharging all of the liabilities of the Trust, or, when necessary, setting up
reserves in such amounts as the Trustee in its discretion deems appropriate for
contingent liabilities. In the event that any property which the Trustee is
required to sell is not sold by the Trustee within two years after the
termination of the Trust, the Trustee shall cause such property to be sold at
public

                                       27
<PAGE>

auction to the highest cash bidder. Notice of such sale by auction shall be
mailed at least thirty (30) days prior to such sale to each Unitholder of record
as of a date set by the Trustee at such Unitholder's address as it appears upon
the books of the Trustee. Grantor may purchase all or any portion of the Trust
Estate properties at any sale pursuant to this Section 9.3. The Trustee shall
not be required to obtain approval of the Unitholders prior to selling property
pursuant to this Section 9.3. In connection with sales pursuant to this Section
9.3, the Trustee may accept any offer to purchase the properties constituting
the Trust Estate that it deems reasonable in its discretion and shall have no
liability in connection with any such sales except under the circumstances
described in Section 6.1(a). The Trustee may engage the services of one or more
investment advisers or other parties deemed by the Trustee to be qualified as
experts on such matters to assist with such sales and shall be entitled to rely
on the advice of such professionals as contemplated by Section 12.2. Upon making
final distribution to the Unitholders, the Trustee shall be under no further
liability except as provided in Section 6.1(b).

                                   ARTICLE X.
                                   AMENDMENTS

         Section 10.1. Prohibited. No amendment may be made to any provision of
the Agreement which would

         (a) alter the purposes of the Trust or permit the Trustee to engage in
any business or investment activities or any activity substantially different
from that specified herein;

         (b) alter the rights of the Unitholders vis-a-vis each other;

         (c) permit the Trustee to distribute the Royalties in kind either
during the continuation of the Trust or during the period of liquidation or
winding up under Section 9.3; or

         (d) adversely affect the rights and duties of the Trustee under this
Agreement, unless such amendment has been approved, in writing, by the Trustee.

         Section 10.2. Permitted. Grantor and the Trustee may, jointly, from
time to time, supplement or amend this Agreement, without the approval of the
Unitholders, in order to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
hereof, or to change the name of the Trust, provided that such supplement or
amendment does not adversely affect the interests of the Unitholders. All other
amendments to the provisions of the Agreement shall be made only by a vote of
the Unitholders present or represented at a meeting held in accordance with the
requirements of Article VIII. The Trustee shall approve all amendments permitted
under this Section 10.2, provided all prior conditions are satisfied and there
is no adverse effect on the Trust or the Trustee. In connection with any request
by Grantor to supplement or amend this Agreement to cure any ambiguity, defect
or inconsistency, Grantor shall provide to the Trustee, and it shall be a
condition to the Trustee's approval thereof, an officer's certificate and an
opinion of counsel deemed satisfactory to the Trustee to support a determination
of the existence of an ambiguity, defect or inconsistency that may properly be
cured under this Section 10.2 and applicable law. The Trustee shall be entitled
to rely on such officer's certificate and opinion, and such officer's

                                       28
<PAGE>

certificate and opinion shall be full and complete authorization and protection
in respect of any action taken or suffered by it hereunder in good faith and in
accordance therewith.

                                  ARTICLE XI.
                                   ARBITRATION

         THE PARTIES TO THIS AGREEMENT AGREE THAT ANY DISPUTE, CONTROVERSY OR
CLAIM THAT MAY ARISE BETWEEN OR AMONG GRANTOR (ON THE ONE HAND) AND THE TRUST OR
THE TRUSTEE (ON THE OTHER HAND) IN CONNECTION WITH OR OTHERWISE RELATING TO THIS
AGREEMENT OR THE CONVEYANCES OR THE APPLICATION, IMPLEMENTATION, VALIDITY OR
BREACH OF THIS AGREEMENT OR THE CONVEYANCES OR ANY PROVISION OF THIS AGREEMENT
OR THE CONVEYANCES (INCLUDING, WITHOUT LIMITATION, CLAIMS BASED ON CONTRACT,
TORT OR STATUTE), SHALL BE FINALLY, CONCLUSIVELY AND EXCLUSIVELY SETTLED BY
BINDING ARBITRATION IN HOUSTON, TEXAS IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES (THE "RULES") OF THE AMERICAN ARBITRATION ASSOCIATION OR ANY
SUCCESSOR THERETO ("AAA") THEN IN EFFECT. THE PARTIES TO THIS AGREEMENT (AND ON
BEHALF OF THE TRUST) HEREBY EXPRESSLY WAIVE THEIR RIGHT TO SEEK REMEDIES IN
COURT, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO TRIAL BY JURY, WITH RESPECT
TO ANY MATTER SUBJECT TO ARBITRATION PURSUANT TO THIS ARTICLE XI. ANY PARTY TO
THIS AGREEMENT MAY BRING AN ACTION, INCLUDING, WITHOUT LIMITATION, A SUMMARY OR
EXPEDITED PROCEEDING, IN ANY COURT HAVING JURISDICTION, TO COMPEL ARBITRATION OF
ANY DISPUTE, CONTROVERSY OR CLAIM TO WHICH THIS ARTICLE XI APPLIES. EXCEPT WITH
RESPECT TO THE FOLLOWING PROVISIONS (THE "SPECIAL PROVISIONS"), WHICH SHALL
APPLY WITH RESPECT TO ANY ARBITRATION PURSUANT TO THIS ARTICLE XI, THE
INITIATION AND CONDUCT OF ARBITRATION SHALL BE AS SET FORTH IN THE RULES, WHICH
RULES ARE INCORPORATED IN THIS AGREEMENT BY REFERENCE WITH THE SAME EFFECT AS IF
THEY WERE SET FORTH IN THIS AGREEMENT.

         (a) In the event of any inconsistency between the Rules and the Special
Provisions, the Special Provisions shall control. References in the Rules to a
sole arbitrator shall be deemed to refer to the tribunal of arbitrators provided
for under subparagraph (c) below in this Article XI.

         (b) The arbitration shall be administered by AAA.

         (c) The arbitration shall be conducted by a tribunal of three
arbitrators. Within ten (10) days after arbitration is initiated pursuant to the
Rules, the initiating party or parties (the "CLAIMANT") shall send written
notice to the other party or parties (the "RESPONDENT"), with a copy to the
Houston office of AAA, designating the first arbitrator (who shall not be a
representative or agent of any party but may or may not be an AAA panel member
and, in any case, shall be reasonably believed by the Claimant to possess the
requisite experience, education and expertise in respect of the matters to which
the claim relates to enable such person to completely perform arbitral duties).
Within ten (10) days after receipt of such notice, the Respondent shall send
written notice to the Claimant, with a copy to the Houston office of AAA

                                       29
<PAGE>

and to the first arbitrator, designating the second arbitrator (who shall not be
a representative or agent of any party, but may or may not be an AAA panel
member and, in any case, shall be reasonably believed by the Respondent to
possess the requisite experience, education and expertise in respect of the
matters to which the claim relates to enable such person to competently perform
arbitral duties). Within ten (10) days after such notice from the Respondent is
received by the Claimant, the Respondent and the Claimant shall cause their
respective designated arbitrators to select any mutually agreeable AAA panel
member as the third arbitrator. If the respective designated arbitrators of the
Respondent and the Claimant cannot so agree within such ten (10) day period,
then the third arbitrator will be determined pursuant to the Rules. For purposes
of this Article XI, Grantor (on the one hand) and the Trust and the Trustee (on
the other hand) shall each be entitled to the selection of one (1) arbitrator.
Prior to commencement of the arbitration proceeding, each arbitrator shall have
provided the parties with a resume outlining such arbitrator's background and
qualifications and shall certify that such arbitrator is not a representative or
agent of any of the parties. If any arbitrator shall die, fail to act, resign,
become disqualified or otherwise cease to act, then the arbitration proceeding
shall be delayed for fifteen (15) days and the party by or on behalf of whom
such arbitrator was appointed shall be entitled to appoint a substitute
arbitrator (meeting the qualifications set forth in this Article XI) within such
fifteen (15) day period; provided, however, that if the party by or on behalf of
whom such arbitrator was appointed shall fail to appoint a substitute arbitrator
within such fifteen (15) day period, the substitute arbitrator shall be a
neutral arbitrator appointed by the AAA arbitrator within fifteen (15) days
thereafter.

         (d) All arbitration hearings shall be commenced within one hundred
twenty (120) days after arbitration is initiated pursuant to the Rules, unless,
upon a showing of good cause by a party to the arbitration, the tribunal of
arbitrators permits the extension of the commencement of such hearing; provided,
however, that any such extension shall not be longer than sixty (60) days.

         (e) All claims presented for arbitration shall be particularly
identified and the parties to the arbitration shall each prepare a statement of
their position with recommended courses of action. These statements of position
and recommended courses of action shall be submitted to the tribunal of
arbitrators chosen as provided hereinabove for binding decision. The tribunal of
arbitrators shall not be empowered to make decisions beyond the scope of the
position papers.

         (f) The arbitration proceeding will be governed by the substantive laws
of the State of Texas and will be conducted in accordance with such procedures
as shall be fixed for such purpose by the tribunal of arbitrators, except that
(i) discovery in connection with any arbitration proceeding shall be conducted
in accordance with the Federal Rules of Civil Procedure and applicable case law,
(ii) the tribunal of arbitrators shall have the power to compel discovery and
(iii) unless the parties otherwise agree and except as may be provided in this
Article XI, the arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. Sections 1- 16, to the exclusion of any provision of state law or
other applicable law or procedure inconsistent therewith or which would produce
a different result. The parties shall preserve their right to assert and to
avail themselves of the attorney-client and attorney-work-product privileges,
and any other privileges to which they may be entitled pursuant to applicable
law. No party to the arbitration or any arbitrator may compel or require
mediation and/or settlement conferences without the prior written consent of all
such parties and the tribunal of arbitrators.

                                       30
<PAGE>

         (g) The tribunal of arbitrators shall make an arbitration award as soon
as possible after the later of the close of evidence or the submission of final
briefs, and in all cases the award shall be made not later than thirty (30) days
following submission of the matter. The finding and decision of a majority of
the arbitrators shall be final and shall be binding upon the parties. Judgment
upon the arbitration award or decision may be entered in any court having
jurisdiction thereof or application may be made to any such court for a judicial
acceptance of the award and an order of enforcement, as the case may be. The
tribunal of arbitrators shall have the authority to assess liability for
pre-award and post-award interest on the claims, attorneys' fees, expert witness
fees and all other expenses of arbitration as such arbitrators shall deem
appropriate based on the outcome of the claims arbitrated. Unless otherwise
agreed by the parties to the arbitration in writing, the arbitration award shall
include findings of fact and conclusions of law.

         (h) Nothing in this Article XI shall be deemed to (i) limit the
applicability of any otherwise applicable statute of limitations or repose or
any waivers contained in this Agreement, (ii) constitute a waiver by any party
hereto of the protections afforded by 12 U.S.C. Section 91 or any successor
statute thereto or any substantially equivalent state law or (iii) restrict the
right of the Trustee to make application to any state or federal district court
having jurisdiction in Harris County, Texas, to appoint a successor Trustee or
to request instructions with regard to any provision in this Agreement when the
Trustee is unsure of its obligations thereunder.

                                  ARTICLE XII.
                                  MISCELLANEOUS

         Section 12.1. Inspection of Trustee's Books. Each Unitholder and such
Unitholder's duly authorized agents, attorneys and auditors shall have the
right, at such Unitholder's own expense and during reasonable business hours, to
examine and inspect the records of the Trust and the Trustee, including lists of
Unitholders, for any proper purpose in reference thereto. For purposes of
determining whether a purpose asserted by a Unitholder is a "proper purpose",
the Trustee, in the absence of controlling precedent applicable to trusts
organized under the Texas Trust Code, may rely on any reasonably analogous
precedent, including laws and court decisions relating to corporations of the
State of Texas or other jurisdictions.

         Section 12.2. Trustee's Employment of Experts. The Trustee may, but
shall not be required to, consult with counsel, who may be its own counsel,
accountants, geologists, engineers and other parties deemed by the Trustee to be
qualified as experts on the matters submitted to them, and the opinion or advice
of any such parties on any matter submitted to them by the Trustee shall be full
and complete authorization and protection in respect of any action taken or
suffered by it hereunder in good faith and in accordance with the opinion of any
such party. The Trustee is authorized to make payments of all reasonable and
necessary fees billed by third parties for services or expenses thus incurred
out of the Trust Estate.

         Section 12.3. Merger or Consolidation of Trustee. Neither a change of
name of the Trustee nor any merger or consolidation of it or of its corporate
powers with another bank or with a trust company shall affect its right or
capacity to act hereunder. Upon any merger, consolidation, sale of assets or
other transaction involving the Trustee in which the Trustee is not the
surviving entity, the surviving entity in such transaction shall automatically
become Trustee of the Trust and succeed to all rights, titles, duties, powers
and authority of the predecessor

                                       31
<PAGE>

Trustee hereunder, without the requirement of Unitholder approval or any other
action, provided such surviving entity has succeeded to the rights and
obligations of the predecessor Trustee in accordance with applicable law and is
a bank or trust company having capital, surplus and undivided profits (as of the
end of its last fiscal year prior to the consummation of such transaction) of at
least $100,000,000.

         Section 12.4. Filing of this Agreement. Neither this Agreement nor any
executed copy hereof need be filed in any county in which any of the Trust
Estate is located, but the same may be filed for record in any county by the
Trustee. In order to avoid the necessity of filing this Agreement for record,
the Trustee agrees that for the purpose of vesting the record title to the
Royalties in any successor Trustee, the succeeded Trustee will, upon appointment
of any successor Trustee, execute and deliver to such successor Trustee
appropriate assignments or conveyances.

         Section 12.5. Severability. If any provision of this Agreement or the
application thereof to any Person or circumstances shall be finally determined
by a court of proper jurisdiction to be illegal, invalid or unenforceable to any
extent, the remainder of this Agreement or the application of such provision to
Persons or circumstances, other than those as to which it is held illegal,
invalid or unenforceable, shall not be affected thereby, and every provision of
this Agreement shall be valid and enforced to the fullest extent permitted by
law.

         Section 12.6. Notices. Any and all notices or demands permitted or
required to be given under this Agreement shall be in writing and shall be
validly given or made if (a) personally delivered, (b) delivered and confirmed
by telecopier or like instantaneous transmission service, or by Federal Express
or other overnight courier delivery service, which shall be effective as of
confirmation of receipt by the courier at the address for notice hereinafter
stated, (c) solely in the case of notice to any Unitholder, by press release in
a nationally recognized and distributed media, or (d) deposited in the United
States mail, first class, postage prepaid, certified or registered, return
receipt requested, addressed as follows:

         If to the Trustee, to:

                  Wachovia Bank, National Association
                  5847 San Felipe, Suite 1050
                  Houston, Texas 77057
                  Attention: Corporate Trust Group
                  Telecopier No: (713) 278-4329

         If to Grantor, to:

                  Newfield Exploration Company
                  363 N. Sam Houston Pkwy E., Suite 2020
                  Houston, Texas 77060
                  Attention:  Chief Financial Officer
                  Telecopier No.: (___)___-_____

                                       32
<PAGE>

         If to a Unitholder, to:

                  the Unitholder
                  at its last address as shown on the
                  ownership records maintained by the Trustee

         Notice which is mailed in the manner specified shall be conclusively
deemed given three (3) days after the date postmarked or upon receipt, whichever
is sooner. Any party to this Agreement may change its address for the purpose of
receiving notices or demands by notice given as provided in this Section 12.6.

         Section 12.7. Counterparts. This Agreement may be executed in a number
of counterparts, each of which shall constitute an original, but such
counterparts shall together constitute but one and the same instrument.

         Section 12.8. Successors. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns.

                            [Signature Page Follows]

                                       33
<PAGE>

         IN WITNESS WHEREOF, Grantor and Trustee have caused this Agreement to
be duly executed the day and year first above written at Houston, Harris County,
Texas.

                                     NEWFIELD EXPLORATION COMPANY,
                                     as Grantor

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

                                     WACHOVIA BANK, NATIONAL
                                     ASSOCIATION, as Trustee

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

<PAGE>

                                   SCHEDULE 2

                              TRUSTEE COMPENSATION

A.       Administrative Fee

         1. For all administrative and other services to be provided by the
Trustee under the Agreement including, but not limited to, costs of Trustee's
personnel, the Trustee will be paid, from the Trust Estate, the sum of
$[_________] per year, with such fee to be paid in equal monthly installments.

         2. The Administrative Fee provided above will be adjusted annually,
beginning [_________], 2003. The adjustment shall be computed by multiplying the
current Administrative Fee by the percentage increase or decrease in the average
weekly earnings of Crude Petroleum and Gas Production Workers for the last
calendar year compared to the calendar year preceding as shown by the index of
average weekly earnings of Crude Petroleum and Gas Production Workers as
published by the United States Department of Labor, Bureau of Labor Statistics.
The adjusted Administrative Fee shall be the Administrative Fee currently in
use, plus or minus the computed adjustment.

B. Termination Fee

         Upon termination of the Trust, the Trustee shall be paid a Termination
Fee of $[__________].

C. The fees provided above are in addition to out-of-pocket cost reimbursements
permitted under the Agreement.<PAGE>

                                                                   EXHIBIT 10.21

                          MONT BELVIEU STORAGE CAPACITY
                               PURCHASE AGREEMENT
                                 BY AND BETWEEN
                            EOTT ENERGY LIQUIDS, L.P.
                                       AND
                             ENRON GAS LIQUIDS, INC.

                               DATED JUNE 29, 2001

<PAGE>

This Mont Belvieu Storage Capacity Purchase Agreement dated as of June 29, 2001
(this "Agreement"), is made between EOTT ENERGY LIQUIDS, L.P., a Delaware
limited partnership ("Seller"), and ENRON GAS LIQUIDS, INC., a Delaware
corporation ("Buyer"). In connection herewith and as part of an integrated
transaction, the Seller and the Buyer have entered into the Toll Conversion
Agreement (as defined below). Seller and Buyer may hereinafter be referred to
collectively as the "Parties" and individually as a "Party."

                                    ARTICLE 1
                                   DEFINITIONS

         1.1 Definitions. Except as otherwise indicated by the context, all
capitalized terms used in this Agreement have the meanings hereinafter set forth
in Appendix I hereto.

         1.2 Division, Headings and Index. The division of this Agreement into
articles, sections, and subsections, and the insertion of headings and any table
of contents or index, if any, are for convenience of reference only, and shall
not affect the construction or interpretation hereof.

         1.3 Industry Usage. Words, phrases, or expressions which are not
defined herein and which, in the usage or custom of the business of the
transportation, storage, distribution, or sale of Products have an accepted
meaning, shall have that meaning.

         1.4 Extended Meaning. Unless the context otherwise requires, words
implying the singular include the plural and vice versa, and words implying
gender include all genders. The words "herein", and "hereunder" and words of
similar nature refer to the entirety of this Agreement, including any Exhibits,
Schedules, and appendices incorporated into this Agreement, and not only to the
section in which such use occurs.

                                    ARTICLE 2
                        PURCHASE OF STORAGE AND SERVICES

         2.1 Storage. Seller hereby (a) sells to Buyer the Allotted Storage
Capacity associated with each Storage Well on a Firm Basis and the ancillary
rights to the Storage Facilities in connection therewith, including all existing
transportation and handling capacity associated with the Storage Pipeline
System, (b) grants to Buyer a right to acquire all or any part of the Additional
Allotted Storage Capacity (incurring only Excess Throughput Fees, if any, if
such right is exercised) prior to making all or any part of such Additional
Allotted Storage Capacity available to third parties, and (c) throughout the
Term, agrees to provide all storage, transportation, handling, maintenance and
other operational services in connection with the foregoing as provided herein
in accordance with customary industry practice and as historically provided at
the Storage Facilities for the twenty-four (24) Month period prior to the date
hereof. The storage space and the related services shall include (i) the
injection of Products owned by Buyer or with respect to which Buyer has legal
custody under agreements with third parties up to the Maximum Daily Injection
Quantity for each of the Storage Wells and (ii) the withdrawal and

                                      -2-
<PAGE>

delivery of Products owned by Buyer or with respect to which Buyer has legal
custody under agreements with third parties up to the Maximum Daily Withdrawal
Quantity for each of the Storage Wells.

         2.2 Receipt and Delivery. In connection with such sale, Seller shall
from time-to-time and adhering to the Nomination Procedures receive Products for
storage from Buyer at the Receipt Point(s) for injection into the Storage Wells;
provided, that Seller shall not be obligated to receive from Buyer any quantity
of Products for injection which (a) would cause Buyer's Product Storage Account
to exceed the Available Storage Capacity for each Storage Well or (b) is at a
rate greater than the rate contemplated by the Maximum Daily Injection Quantity.
Seller shall from time-to-time and adhering to the Nomination Procedures deliver
Products to Buyer at the Delivery Point(s); provided, that Seller shall not be
obligated to deliver to Buyer any quantity of Product that is at a rate greater
than the rate contemplated by the Maximum Daily Withdrawal Quantity. In
connection with the foregoing, Seller agrees (y) to return to Buyer in
accordance with the terms and conditions of this Agreement all Products
delivered into storage hereunder and (z) in connection with the removal of all
Product from any Storage Well, to deliver to Buyer all product in such Storage
Well, notwithstanding that volumes recorded in the Product Storage Account may
be less than the volume of product in such Storage Well (or to deliver Buyer's
ratable share of such product in such Storage Well if a third party has
contracted with Seller and stored product in such Storage Well).

                                    ARTICLE 3
                                      FEES

         Buyer agrees to pay to Seller (i) the Storage Purchase Fee, (ii) the
Throughput Fee, (iii) the Excess Throughput Fee, if any, and (iv) any additional
fees provided for in Section 3.4, all as determined and paid as provided in this
Article 3.

         3.1 Storage Purchase Fee. For each Contract Year, Buyer agrees to pay
Seller the fee for such Contract Year as set forth on Schedule 3.1 for the
Product storage capacity purchased pursuant to this Agreement ("Storage Purchase
Fee"), which shall be payable in equal monthly installments in accordance with
the provisions of Article 11 (Billing and Payment) hereof. In the event that
Buyer from time to time exercises its right to acquire all or any portion of the
Additional Allotted Storage Capacity, no additional charge or fee shall be
imposed pursuant to this Section 3.1, except as set forth in Section 3.6.

         3.2 Throughput Fee. For each Contract Year, Buyer agrees to pay Seller
the fee for such Contract Year as set forth on Schedule 3.1 for the Product
movements within the Storage Pipeline System pursuant to this Agreement
("Throughput Fee"), which shall be payable in equal monthly installments in
accordance with the provisions of Article 11 (Billing and Payment) hereof. In
the event that Buyer from time to time exercises its right to acquire all or any
portion of the Additional Allotted Storage Capacity, no additional charge or fee
shall be imposed, except as may be incurred pursuant to Section 3.3, except as
set forth in Section 3.6.

         3.3 Excess Throughput Fee. Within thirty (30) days after the end of
each quarter of each Contract Year, Seller shall notify Buyer in writing of the
Quarterly Excess Barge Throughput,

                                      -3-
<PAGE>

Quarterly Excess Pipeline Throughput, Quarterly Excess Rail Throughput, and
Quarterly Excess Truck Throughput, each with respect to such quarter of such
Contract Year and the corresponding Quarterly Excess Throughput Fee for such
quarter of such Contract Year. Reasonable documentation evidencing such
quantities of quarterly excess throughput shall be provided to Buyer by Seller
within such period following the end of such quarter within such Contract Year.
Within thirty (30) days after notice from Seller of such quantities of quarterly
excess throughput for such quarter, Buyer shall pay Seller an amount equal to
the Quarterly Excess Throughput Fee. Within thirty (30) days after the end of
each Contract Year, Seller shall determine, and notify Buyer with respect to,
the Excess Barge Throughput, Excess Pipeline Throughput, Excess Rail Throughput,
and Excess Truck Throughput for such Contract Year and the corresponding Excess
Throughput Fee for such Contract Year. To the extent that the Excess Throughput
Fee for any Contract Year does not equal the sum of the Quarterly Excess
Throughput Fee for each such quarter of such Contract Year (such difference in
fees, the "Fee Difference"'), the Party possessing the Fee Difference promptly
shall pay such Fee Difference to the other Party.

         3.4 Additional Fees. In addition to those fees set forth in Sections
3.1, 3.2 and 3.3, Buyer shall pay Seller a mutually agreed upon fee taking into
account industry standards and practices and how such standards and practices
are applicable to the Storage Facilities for any service requested by Buyer
unless the Parties' negotiation and determination of the Storage Fee and/or
Throughput Fee as provided herein included such service. Buyer shall have no
obligation to pay any other amounts, costs or fees in connection with the
Storage Facilities or for any services related thereto except as set forth in
this Article 3.

         3.5 Fees for Loading and Unloading. Seller shall pay to Buyer the
following amounts within ten (10) Business Days of Seller's receipt of notice of
such applicable charge or fee from the Buyer:

                  (a) any and all demurrage, laytime and other charges incurred
         by Buyer as a result of Seller's failure to load methyl tertiary butyl
         ether and other products owned by or under the legal custody of Buyer
         into barges or other transport vessels, tank cars or trucks at the
         Storage Facilities, at rates not less than the applicable rate listed
         for each such product set forth on Schedule 3.5 unless a lower rate is
         otherwise required by the barge, vessel, tank car or truck operator, as
         applicable; and

                  (b) any and all demurrage and laytime fees or other charges of
         the same nature caused by Seller's failure to promptly unload methanol
         (at a rate less than 3000 barrels per hour) from transport barges or
         other vessels upon arrival at the Storage Facilities.

         3.6 Additional Storage Capacity. At such time after the date of this
Agreement as any of the storage wells or any portion thereof identified in
Exhibit B-2 are developed and placed into commercial operation by Seller, such
Storage Well(s) will be included in this Agreement and the fees established in
Sections 3.1 and 3.2 shall be adjusted as negotiated by the Parties for the
increased volume of storage capacity purchased, and Schedule 3.1 and Exhibits A
and B hereto shall be revised accordingly to include any new storage wells and
to include such additional storage capacity as Allotted Storage Capacity and
Additional Storage Capacity hereunder. All

                                      -4-
<PAGE>

changes required pursuant to this Section 3.6 shall be reduced to writing,
signed by the Parties and attached as one or more amendments to this Agreement.

                                    ARTICLE 4
                                   NOMINATIONS

          4.1 General. As commercially reasonable, Seller shall make available a
dispatcher who shall be authorized (subject to Seller's operating requirements
pertaining to the Storage Facilities) (i) to accept nominations from Buyer
respecting quantities of Products that Buyer desires to tender for injection
into the Storage Wells or to withdraw therefrom or to transport on the Storage
Pipeline System in accordance with this Agreement and (ii) to furnish to Buyer
any operating information which may affect the quantities of Products to be
tendered for injection by or withdrawn for or transported for Buyer.

          4.2 Procedures. At any time during the Term and unless otherwise
provided herein, Buyer shall give Seller its nomination for injections or
withdrawals or transportation orally, in writing, or via electronic bulletin
board or other electronic means in a form prescribed by the Seller from
time-to-time, transmitted to Seller in accordance with Article 15 (Notices)
hereof and subject to Article 2 (Purchase of Storage and Services) hereof. Such
nominations shall be made by Buyer based on information provided to Buyer by
Seller on a routine basis setting forth the quantity of available storage in
each Storage Well based on the Allotted Storage Capacity (and any Additional
Allotted Storage Capacity) of each Storage Well. The procedures set forth in
Sections 4.2 and 4.3 below shall be referred to in this Agreement as the
"Nomination Procedures". All nominations are subject to confirmation by the
Transporting Pipeline on which the nomination is made and in accordance with
such Transporting Pipeline's nomination procedures. Nominations will be based on
the number of Barrels provided by Buyer. Seller shall promptly acknowledge
receipt of Buyer's nomination and confirm same in accordance with Article 15
(Notices) hereof. Oral nominations by Buyer shall be confirmed in writing by
Seller within 2 Days of Seller's receipt of such oral nomination. A nomination
given and confirmed in accordance with the foregoing shall be binding upon the
Parties.

         4.3 Nomination Form Terms. A nomination is intended to include:

                  (a) Name of purchaser or shipper;

                  (b) Contact person for purchaser or shipper (Name and Phone
         No.);

                  (c) Effective date and time;

                  (d) Downstream and/or upstream Transporting Pipeline;

                  (e) Contact person for such downstream and/or upstream
         Transporting Pipeline identified by name and phone number;

                  (f) Delivery or Receipt Point on such downstream and/or
         upstream Transporting Pipeline;

                                      -5-
<PAGE>
                  (g) Number of Barrels and/or Gallons; and

                  (h) the Product nominated.

If nominations do not include all of the aforementioned information or if
nominations are not made in the form reasonably prescribed by Seller from
time-to-time, Seller shall nevertheless accept such nomination and shall advise
Buyer of such non-conforming elements so that Buyer may correct its procedures.
Requests for changes in flow rate must be made by written nomination in
accordance with the foregoing Nomination Procedures.

         4.4 Modification of Nomination Procedures. Written modifications of the
Nomination Procedures set forth in this Article 4 (Nominations) shall be made by
the Parties from time to time so that they shall comply with or take full
commercial advantage of newly enacted regulatory requirements or then prevailing
Transporting Pipeline standards, as contemplated by the terms and provisions of
this Agreement.

                                    ARTICLE 5
                RECEIPT AND DELIVERY POINTS, TITLE, RISK OF LOSS

         5.1 Receipt Point. The Receipt Points for all Products tendered by
Buyer to Seller for storage hereunder shall be as set forth on Exhibit C.

         5.2 Delivery Point. The Delivery Points for all Products delivered by
Seller to Buyer out of storage shall be as set forth on Exhibit C.

         5.3 Interconnections. Upon thirty (30) Business Days prior written
notice to Seller and subject to specifications provided to Buyer by Seller and
applicable safety and operational requirements (including interfacing pressures
at such interconnection so as not to adversely affect operating pressures of the
subject pipeline), Buyer shall have the right to construct and initiate
interconnections on the Storage Pipeline System and to designate such
interconnections as Receipt Points and/or Delivery Points, provided Buyer shall
have complied with applicable laws and regulations and obtained all necessary
consents from third parties, including consents and authority under applicable
rights of way and easements. Such construction and initiation of
interconnections shall include but not be limited to meters, meter stations and
piping related thereto, and all costs associated with such additional
interconnections shall be borne by Buyer. All such additional interconnections
shall be owned by Buyer.

         5.4 Title. Buyer represents and warrants to Seller that Buyer has and
will have title to or legal custody of all Products delivered to Seller
hereunder, that Buyer has the authority to deliver such Products to Seller, and
that such Products are and will be free from any and all liens, charges, adverse
claims, and encumbrances against Buyer other than purchase money liens and
customary liens granted by Buyer in connection with financings of Buyer's
operations, assets or properties. In addition to any other rights, remedies, or
indemnities herein contained, Buyer shall indemnify, defend, and hold harmless
Seller from and against any and all suits, actions, claims,

                                      -6-
<PAGE>

demands, damages, costs, losses, and expense, including reasonable attorney's
fees and related expenses arising from or out of any adverse third party claims
to or against such Products or any interest therein or in the value thereof.
Seller acknowledges that Buyer owns and has title to all volumes of Line Pack
Product. Title to and/or legal custody of the Products in storage and of the
Line Pack Product shall at all times be and remain in Buyer.

         5.5 Risk of Loss. Notwithstanding Seller's obligation in Section 2.2 to
return and deliver Products to Buyer, Seller shall be responsible for the loss
of Product only when and to the extent that such loss is caused by the
negligence or willful misconduct of Seller, its employees or agents.

                                    ARTICLE 6
                              QUALITY AND PRESSURE

         6.1 Quality. The specifications of each Product from time-to-time
delivered by Buyer at the Receipt Point(s) and redelivered by Seller at the
Delivery Point(s) shall comply with the minimum standards then specified in the
transportation tariff of any Transporting Pipeline through which a Product is to
be transported. Without negation of the foregoing quality requirements, Buyer
agrees that the Products shall not be corrosive or contain contaminants that
will be deleterious to the integrity of the applicable Storage Well, the
wellhead assembly, the products injection pump, and all piping and
appurtenances. Buyer and Seller recognize that the Products may contain
moisture, and Seller shall use its commercially reasonable efforts to insure
that the Products withdrawn for the account of Buyer from the Storage Wells will
at all times meet or exceed the quality specifications for the receiving
pipeline.

         6.2 Pressure. Buyer shall deliver such Product at a pressure sufficient
to overcome the operating pressure existing from time-to-time in the applicable
Storage Well at such point(s). Seller shall deliver such Product to or for the
account of Buyer at the pressure available from time-to-time in the applicable
Storage Well at such point(s). Seller agrees at a minimum to maintain the
operating pressures for the Storage Wells and the Storage Pipeline Systems in
accordance with customary industry practices and in a manner necessary to
perform its obligations under this Agreement. Without limiting the foregoing,
Buyer will arrange for delivery of Product at the Delivery Points and redelivery
of Products at the Receipt Points at minimum and maximum pressures consistent
with the historical operating practices at the Storage Facilities but in no
event shall such pressure exceed the maximum operating pressure for the
Transporting Pipeline.

                                    ARTICLE 7
                                   MEASUREMENT

         7.1 Unit of Measure. The unit of volume for measurement of all
quantities of Product hereunder shall be one Barrel. Atmospheric pressure shall
be assumed to be 15.025 pounds per square inch absolute at the Receipt Point(s)
and Delivery Point(s) irrespective of the actual atmospheric pressure at such
points from time-to-time. Adjustment shall be made for flowing temperature and
specific gravity as determined from instruments located at the Receipt Point(s)

                                      -7-
<PAGE>

and Delivery Point(s). Receipt and delivery meters will serve as the primary
means for Product measurement.

         7.2 Temperature Measurement. The flowing temperature of Product being
metered shall be determined continuously during periods of flow by means of a
recording thermometer of standard make, and the arithmetic average of the
temperature recorded during periods of flow only shall be deemed the Product
temperature. Temperature so determined shall be used in computing the quantities
of Product delivered or tendered hereunder.

         7.3 Other Measurement. The specific gravity, gross heating value, and
degree of saturation by water vapor of the Product delivered or tendered
hereunder shall be determined by using an on-line Product chromatograph or by
such other method as Seller may determine in a commercially reasonable manner.
The values so determined shall be used in computing the volumes of Product
delivered or tendered hereunder.

         7.4 Maintenance and Operation of Measurement Equipment. Seller shall
operate and maintain or cause to be operated and maintained existing and future
measuring facilities to measure the quantity and quality of Products delivered
or tendered hereunder at the Receipt Point(s) and Delivery Point(s).

         7.5 Meter Testing. No less frequently than required by prudent
operating practices and as is customary in the industry, Seller at its expense,
will test and calibrate all meters and metering equipment to be used to confirm
quality, delivery, receipt and pressure of Product at each Receipt Point and
Delivery Point (hereinafter collectively called the "Metering Equipment").
Seller will provide Buyer with written notice so that Buyer will have ample
opportunity to have its representatives present during such calibrations and
tests. At any time requested by Buyer, Seller will test the Metering Equipment
in the presence of Buyer's representatives and, if the Metering Equipment is
found on such test to be accurate, Buyer will pay Seller the cost and expense of
such test, but, if found on such test to be inaccurate, then the cost and
expense of such test and of correcting the inaccuracy in the Metering Equipment
will be borne by Seller. If, on any test of the Metering Equipment, its
inaccuracy is not in excess of one quarter of one percent (.25%), the Metering
Equipment will be considered accurate.

                                    ARTICLE 8
                                   OPERATIONS

         8.1 Buyer Obligations. Buyer shall be responsible for the
transportation of Product to the Receipt Point(s) and from the Delivery
Point(s), including without limitation, securing and maintaining all necessary
transportation services with Transporting Pipelines, complying with all
reporting requirements and payment obligations arising in respect of Product
transportation, and securing and maintaining all required permits and
authorizations required for Buyer's operations, except as otherwise provided
herein. Throughout the Term, Buyer shall be responsible for maintaining
sufficient quantity of Line Pack Product in the Storage Pipeline System to allow
the Seller to perform its obligations of injection and withdrawal of Product
from the Storage Wells

                                      -8-
<PAGE>

in accordance herewith. In the performance of its obligations hereunder, Buyer
shall at all times act in Good Faith.

         8.2 Seller Obligations. Seller's obligations under Article 2 shall be
subject to Seller's scheduling and customary operational restrictions. Seller
agrees to own, operate and maintain the Storage Facilities in compliance with
prudent industry practice and in compliance, in all material respects, with the
rules and regulations established by the Texas Railroad Commission ("Railroad
Commission") and other governmental authorities having jurisdiction over the
operations, services and facilities which are integral to the performance of
Seller's obligations under this Agreement (including all permitting and
licensing requirements). At its expense, Buyer shall be entitled to inspect
Seller's operations and facilities at any time during normal business hours. In
the performance of its obligations hereunder, Seller shall at all times act in
Good Faith.

         8.3 Permits. Seller shall obtain such permits and licenses as may be
required by the Railroad Commission and/or any other governmental agency or
regulatory authority having jurisdiction over the storage operations or the
facilities or equipment employed therein. Seller shall at all times, during the
term of this Agreement, use reasonable best efforts to maintain its equipment
used in connection with its facilities in compliance with all applicable rules
and regulations of the Railroad Commission or any other governmental agency
which may, from time to time, have jurisdiction over such equipment, provided,
however, that in the event that Seller is unable to acquire permission,
forbearance or consent of the Railroad Commission or other regulatory authority,
to maintain, conduct and operate such facilities as contemplated by this
Agreement as a whole, but not merely in part, or having once obtained such
permission, forbearance or consent, the same should later be withdrawn by any
such regulatory authority, or if any material change in laws or governmental
regulations, or interpretations thereof, or administrative or judicial
determinations shall be adopted or promulgated which would require an
expenditure greater than $5,000,000 by Seller, then in that event, Seller shall
immediately notify Buyer of such regulatory action and such required
expenditure, and the Parties shall mutually (a) agree upon allocation of the
cost of such expenditure to the Buyer (such allocation in a manner acceptable to
the Buyer) and (b) make all necessary modifications to this Agreement, if any,
to implement such allocated cost. In the event the Parties cannot agree upon the
amount and manner of such allocation within thirty (30) Business Days of
Seller's notice to Buyer of such required regulatory action and required
expenditure, Buyer may terminate this Agreement by providing prior written
notice of such date of termination at least 90 Days prior to termination or such
lesser time that Seller may operate lawfully without incurring the cost of
expenditure, and no further fees or charges shall be due hereunder (except as
Section 9.3 may apply) and no termination fee shall be payable by Buyer.

                                    ARTICLE 9
                              TERM AND TERMINATION

         9.1 General. This Agreement shall be effective as of the Effective
Date, subject to the satisfaction of the conditions precedent in Section 9.2,
and shall continue in full force and effect until the Termination Date.

                                      -9-
<PAGE>

         9.2 Conditions to Effectiveness of the Agreement. The obligations of
each Party under this Agreement shall be subject to the conditions precedent
that the Buyer Guaranty and the Seller Guaranty shall have been fully executed
and delivered to the beneficiary of such guaranty.

         9.3 End of Term Matters. If, upon termination of this Agreement
pursuant to terms set forth herein (other than a termination due to an event of
Force Majeure in accordance with Section 14.8), any volume of Product delivered
by Buyer hereunder remains in the Storage Wells, then the term of this Agreement
shall be extended for the number of Days as designated by Seller to allow Buyer
to withdraw from storage such remaining Product at rates and conditions of
delivery reasonably determined by Seller taking into account the applicable
terms of this Agreement and commercial and market conditions at the time,
provided however that such extended term may not exceed the first ninety (90)
day period following the Termination Date during which the Storage Facilities
are operational to allow Buyer to withdraw its Product under normal operating
conditions. In addition to any applicable Excess Throughput Fee provided for in
Article 3, Buyer shall pay Seller each Month, or portion thereof, during any
extension of the Term a fee of $4.00 per Barrel in lieu of any Storage Purchase
Fee and Throughput Fee (the "Extended Term Storage Purchase Fee"). If any of
Buyer's Product shall remain in storage after expiration of the extended term or
if Buyer fails to pay the Extended Term Storage Purchase Fee to Seller within 10
Days of receipt of Seller's invoice therefor, then Seller, acting as Buyer's
duly authorized agent, shall have the right, but not the obligation, to dispose
of all or any portion of such Product on behalf of Buyer in a commercially
reasonable manner and on commercially reasonable terms and conditions. Buyer's
execution of this Agreement shall constitute its appointment of Seller as its
agent for the limited purpose set forth in the previous sentence. Volumes of
Line Pack Product in the Storage Pipeline System provided by Buyer pursuant to
Section 8.1 shall be, at the Buyer's discretion, (y) withdrawn from the Storage
Pipeline System and delivered by Seller to Buyer or (z) sold to Seller at a
price mutually agreed upon by the Parties.

                                   ARTICLE 10
                         REPRESENTATIONS AND WARRANTIES

         As a material inducement to the agreement of the other Party to enter
into this Agreement, each Party, with respect to itself, hereby represents and
warrants to the other Party as follows:

                  (a) There are no suits, proceedings, judgments, rulings, or
         orders by or before any court or any governmental authority to which it
         is a party or is otherwise bound that materially and adversely affect
         its ability to perform this Agreement or, to its knowledge, the rights
         of the other Party under this Agreement;

                  (b) It is duly organized, validly existing, and in good
         standing under the laws of the jurisdiction of its formation, and is
         duly qualified to conduct its business in each jurisdiction in which it
         is required to be so qualified, and it has the legal right, power, and
         authority to execute and deliver this Agreement and to perform its
         obligations under this

                                      -10-
<PAGE>

         Agreement, and all regulatory authorizations have been maintained as
         necessary for it to legally perform its obligations hereunder;

                  (c) Entering into this Agreement and performing its
         obligations hereunder are within its corporate or partnership powers,
         have been duly authorized by all necessary corporate or partnership
         action on its part, and do not and will not violate any provision of
         law or any rule, regulation, order, writ, judgment, decree, or other
         determination presently in effect applicable to it or to its charter
         and other governing documents;

                  (d) This Agreement constitutes a legal, valid, and binding act
         and obligation of it, enforceable against it in accordance with its
         terms, subject to bankruptcy, insolvency, reorganization, and other
         laws affecting creditors' rights generally, and with regard to
         equitable remedies, to the discretion of the court before which
         proceedings to obtain such remedies may be pending;

                  (e) There are no bankruptcy, insolvency, reorganization,
         receivership, or other arrangement proceedings pending or being
         contemplated by it, or to its knowledge, threatened against it; and

                  (f) It is not in a disparate bargaining position with the
         other Party.

                                   ARTICLE 11
                     BILLING, PAYMENT AND EVENTS OF DEFAULT

         11.1 Billing. Seller shall on or before the l2th Day of each Month,
submit to Buyer a statement showing the following information with regard to the
storage capacity and related services provided in the prior Month:

                  (a) the amounts due for the Month from Buyer for fees assessed
         in accordance with Article 3;

                  (b) the number of Barrels of each Product received by Seller
         from Buyer at the Receipt Point(s) during the Month for each Storage
         Well;

                  (c) the number of Barrels of Product delivered by Seller to or
         on behalf of Buyer at the Delivery Point(s) during the Month from each
         Storage Well;

                  (d) the number of Barrels of each Product comprising the
         Buyer's Product Storage Account at the beginning and at the end of the
         Month;

                  (e) the amount of any adjustment applicable to any Month prior
         to the Billing Month; and

                  (f) the amount payable by Buyer to Seller hereunder, and for
         any taxes or other charges that are payable by Buyer pursuant to
         Article 12 but that have been paid by Seller.

                                      -11-
<PAGE>

         11.2 Payment. Buyer shall pay, or cause to be paid, to Seller to an
account to be designated in writing by Seller from time to time, the amount
shown as due in the statement described in Section 11 .1 above, on or before the
fifth day (or first Business Day following such fifth day if such day does not
fall on a Business Day) of the subsequent Month of such statement.

         11.3 Interest. In addition to all other remedies available to Seller,
should Buyer fail to pay any amount due Seller when the same is due, interest
thereon shall accrue at the Interest Rate, from the date when such amount is due
until the same is paid.

         11.4 Events of Default. An event of default ("Event of Default") with
respect to a Party (the "Defaulting Party") shall mean any of the following: (i)
the failure of Defaulting Party to pay when due any required payment under this
Agreement and such failure is not remedied within 5 days after written notice
thereof; (ii) the failure of the Defaulting Party to comply with its other
respective obligations under this Agreement and such failure continues uncured
for 30 days (10 days, however, with respect to Seller's obligation to receive
and deliver Products hereunder) after written notice thereof; (iii) the
Defaulting Party shall be subject to a Bankruptcy Proceeding; (iv) any
representation or warranty made by a Party under this Agreement shall prove to
be untrue or misleading in any material respect when made or repeated or deemed
to have been made or repeated; (v) with respect to Seller, the Seller Guarantor
shall give notice to revoke or revoke the Seller Guaranty or challenge the
Seller Guaranty, the Seller Guaranty shall cease to be in full force and effect,
the Seller Guarantor shall breach its obligations under the Seller Guaranty, the
Seller Guarantor shall be subject to a Bankruptcy Proceeding, or any
representation or warranty made by the Seller Guarantor in the Seller Guaranty
shall prove to be untrue or misleading in any material respect when made or
repeated or deemed to have been made or repeated; (vi) with respect to Buyer,
the Buyer Guarantor shall give notice to revoke or revoke the Buyer Guaranty or
challenge the Buyer Guaranty, the Buyer Guaranty shall cease to be in full force
and effect, the Buyer Guarantor shall breach its obligations under the Buyer
Guaranty, the Buyer Guarantor shall be subject to a Bankruptcy Proceeding, or
any representation or warranty made by the Buyer Guarantor in the Buyer Guaranty
shall prove to be untrue or misleading in any material respect when made or
repeated or deemed to have been made or repeated; (vii) with respect to Seller,
any default, event of default, termination event, or other similar condition or
event (however described) shall occur or exist under any Transaction Agreement
(as such term is defined in the Toll Conversion Agreement) with respect to
Seller or the Seller Guarantor provided that any applicable grace or cure
periods have expired, or (viii) with respect to Buyer, any default, event of
default, termination event, or other similar condition or event (however
described) shall occur or exist under any such Transaction Agreement with
respect to Buyer or Buyer Guarantor, provided that any applicable grace or cure
periods have expired.

         Upon the occurrence and during the continuation of an Event of Default
as to the Defaulting Party, the other Party (the "Non-Defaulting Party") may, in
its sole discretion, (a) accelerate and liquidate the Parties' respective
obligations under this Agreement by establishing, and notifying the Defaulting
Party of, an early termination date (which shall be no earlier than the date of
such notice) on which this Agreement shall terminate ("Early Termination Date"),
(b) withhold any payments due to the Defaulting Party until such Event of
Default is cured, or (c) set

                                      -12-
<PAGE>

off any or all amounts which the Defaulting Party owes to the Non-Defaulting
Party (without prejudice and in addition to any right of setoff, combination of
accounts, lien, or other right to which the Non-Defaulting Party is at any time
otherwise entitled (whether by operation of law, contract, or otherwise)). If
notice of an Early Termination Date is given under this Section 11.4, the Early
Termination Date will occur on the designated date, whether or not the relevant
Event(s) of Default is then continuing. Any rights of a Non-Defaulting Party
under this Section 11.4 shall be in addition to such Non-Defaulting Party's
other rights under this Agreement, at law or in equity.

         11.5 Accounting Adjustment of Billing Errors. If the Parties discover
any overcharge as a result of Metering Equipment inaccuracy or otherwise and the
invoice therefor has been paid, the Party which received the overpayment shall
pay to the other within thirty (30) Days after the final determination thereof,
the amount which it was overpaid; provided, however, that no retroactive
adjustment shall be made beyond a period of twenty-four (24) Months following
the date of such overpayment unless such retroactive adjustment is made
necessary by measurement or allocation adjustments instigated by the
Transporting Pipeline, in which case, such twenty-four (24) Month limitation
shall not apply.

         11.6 Audit Rights. Each Party (which may act through its
representatives) has the right, at its sole expense during normal working hours
and upon reasonable advance notice, to have the Storage Wells measured and to
examine the records of the other Party to the extent reasonably necessary to
verify the accuracy of any statement, charge, or computation made pursuant to
this Agreement. If requested, a Party shall provide to the other Party all
inventory, storage, transportation, withdrawal, injection and other operational
reports and all statements for the two-year period preceding the audit date
evidencing the quantities of Products stored or transported within the Storage
Facilities, including all reports indicating unused storage capacity in each of
the Storage Wells. If any such examination reveals any inaccuracy in any
statement or report provided to Buyer, the necessary adjustments in such
statements and the payments thereof will be promptly made and shall bear
interest calculated at the Interest Rate from the date the overpayment or
underpayment was made until paid; provided, however, that no adjustment for any
statement or payment will be made unless objection to the accuracy thereof was
made prior to the lapse of two years from the rendition thereof; and provided
further, that for the purpose of such statement and payment objections, this
Section will survive any termination of this Agreement.

         11.7 Credit Support. If at any time the Seller Guarantor has an
Unacceptable Credit Rating or no Credit Rating, then within five (5) days after
the occurrence of such circumstance and as long as such circumstance shall
exist, at Buyer's request, Seller shall cause to be issued and maintained for
the benefit of Buyer an irrevocable letter of credit in an amount reasonably
requested by Buyer not to exceed $25,000,000, having an effective period of one
year and automatically renewable at the end of each one year period until the
end of the term of this Agreement, issued by a bank reasonably acceptable to the
Buyer, and otherwise having terms and conditions reasonably acceptable to Buyer.
The letter of credit may be drawn upon by Buyer if Seller fails to pay any
amount owed to Buyer hereunder. In the event the letter of credit is drawn to
satisfy any of Seller's obligations, Seller shall promptly, but in no event more
than five (5) days following the date that the letter of credit is drawn,
restore the letter of credit to its

                                      -13-
<PAGE>

original amount. The letter of credit may be drawn upon in part or in full by
Buyer if Seller fails to maintain the letter of credit as required or Seller
fails to renew the letter of credit at least twenty (20) days prior to its
expiration, in which case Buyer may hold the proceeds thereof for application
from time to time for the obligations of Seller under this Agreement until the
letter of credit is restored, in each case without limiting Seller's obligation
to maintain the letter of credit as required or any Event of Default applicable
thereto.

         If at any time the Buyer Guarantor has an Unacceptable Buyer Credit
Rating or no Credit Rating, then within five (5) days after the occurrence of
such circumstance and as long as such circumstance shall exist, at Seller's
request, Buyer shall cause to be issued and maintained for the benefit of Seller
an irrevocable letter of credit in an amount reasonably requested by Seller
having an effective period of one year, issued by a bank reasonably acceptable
to Seller, and otherwise having terms and conditions reasonably acceptable to
Seller. The letter of credit may be drawn upon by Seller if Buyer fails to pay
any amount owed to Seller hereunder. In the event the letter of credit is drawn
to satisfy any of Buyer's obligations, Buyer shall promptly, but in no event
more than five (5) days following the date that the letter of credit is drawn,
restore the letter of credit to its original amount. The letter of credit may be
drawn upon in part or in full by Seller if Buyer fails to maintain the letter of
credit as required or Buyer fails to renew the letter of credit at least twenty
(20) days prior to its expiration, in which case Seller may hold the proceeds
thereof for application from time to time for the obligations of Buyer under
this Agreement until the letter of credit is restored, in each case without
limiting Buyer's obligation to maintain the letter of credit as required or any
Event of Default applicable thereto.

                                   ARTICLE 12
                                      TAXES

         All taxes, duties, and similar governmental charges (other than income
and franchise taxes) related to this Agreement, the Storage Facilities, and the
storage of Products hereunder shall be paid by Seller; provided, that Buyer
agrees to render, negotiate, and pay directly to the taxing authorities all ad
valorem taxes assessed on Buyer's Products and Line Pack Product owned by Buyer.
Each Party shall be responsible for the payment of income and franchise taxes
imposed on it. Seller shall invoice Buyer for any taxes paid by Seller but for
which Buyer is responsible hereunder in accordance with Section 11.1, and Buyer
shall pay such amounts in accordance with such section. Seller shall pay to
Buyer any amounts paid by Buyer for taxes for which Seller is responsible
hereunder within ten (10) Business Days of Seller's receipt of notice of such
applicable amounts from Buyer.

                                   ARTICLE 13
                              INSURANCE, LIABILITY

         13.1 Insurance. Each Party shall be responsible for providing its own
insurance coverage with respect to the Products (in the case of Buyer) and the
Storage Facilities (in the case of Seller) consistent with prudent industry
practice.

         13.2 Seller Liability. Subject to the provisions of Article 14 and
Section 13.3 hereof, Seller shall be liable for and agrees to indemnify, defend
and save Buyer harmless from and

                                      -14-
<PAGE>

against all claims, demands, suits, actions, debts, accounts, damages, costs,
losses, liabilities, and expenses of any kind and however made or incurred,
arising out of any misrepresentation by Seller, the failure by Seller to perform
any covenant, obligation or requirement under this Agreement or the negligent or
willful acts or omissions of Seller; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL
SELLER BE LIABLE TO BUYER FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL CLAIMS OF ANY CHARACTER, INCLUDING WITHOUT LIMITATION, LOSS OF
USE, LOST PROFITS OR REVENUES (OTHER THAN LOST PROFITS SUFFERED BY BUYER AND
RELATED COSTS INCURRED BY BUYER TO PHYSICALLY REPLACE PRODUCT NOT DELIVERED BY
SELLER HEREUNDER AND FOR WHICH SELLER HAS AN OBLIGATION TO DELIVER HEREUNDER),
COST OF CAPITAL, CANCELLATION OF PERMITS, OR TERMINATION OF CONTRACTS,
ADDITIONAL OUT-OFPOCKET EXPENSES INCURRED BY BUYER, TORT OR CONTRACT CLAIMS
OTHER THAN CONTRACT CLAIMS ARISING OUT OF THIS AGREEMENT, CONSEQUENTIAL PROPERTY
DAMAGES SUFFERED BY BUYER, AND IRRESPECTIVE OF WHETHER CLAIMS FOR SUCH DAMAGES
ARE BASED UPON CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE.

         13.3 Buyer Liability. Subject to the provisions of Article 14 and
Section 13.2, Buyer shall be liable for and agrees to indemnify and save Seller
harmless from and against any and all claims, demands, suits, actions, debts,
accounts, damages, costs, losses, liabilities, and expenses of any kind and
however, made or incurred, arising out of any misrepresentation by Buyer, the
failure by Buyer to perform any covenant, obligation or requirement under this
Agreement or the negligent or willful acts or omissions of Buyer; PROVIDED,
HOWEVER, THAT IN NO EVENT SHALL BUYER BE LIABLE TO SELLER FOR ANY SPECIAL,
INDIRECT, INCIDENTAL, OR CONSEQUENTIAL CLAIMS OF ANY CHARACTER INCLUDING WITHOUT
LIMITATION, LOSS OF USE, LOST PROFITS OR REVENUES, COST OF CAPITAL, CANCELLATION
OF PERMITS, OR TERMINATION OF CONTRACTS, ADDITIONAL OUT-OF-POCKET EXPENSES
INCURRED BY SELLER, TORT OR CONTRACT CLAIMS OTHER THAN CONTRACT CLAIMS ARISING
OUT OF THIS AGREEMENT, CONSEQUENTIAL PROPERTY DAMAGES SUFFERED BY SELLER, AND
IRRESPECTIVE OF WHETHER CLAIMS FOR SUCH DAMAGES ARE BASED UPON CONTRACT,
WARRANTY, NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE.

                                   ARTICLE 14
                                  FORCE MAJEURE

         14.1 Definition. An event of "Force Majeure" shall mean a restraint on
Seller's performance of one or more of its obligations under this Agreement
("Obligation" or "Obligations") resulting from a cause not within the control of
Seller (including, but not limited to, acts of God, acts of negligence or
willful misconduct of third parties, whether or not under the

                                      -15-
<PAGE>

control, contract, or supervision of Seller) and which, by the exercise of
generally acceptable industry standards, the Seller was unable to prevent.

         14.2 Suspension. If, due to an event of Force Majeure, Seller is unable
to perform any Obligation in whole or in part, it shall be entitled, unless
otherwise provided to the contrary in this Agreement, to claim suspension of
that Obligation to the extent of and for the duration of the event of Force
Majeure; provided, however, that Seller gives written notice to Buyer, setting
out the details of such Force Majeure event and its expected duration (if known)
as soon as reasonably possible after the commencement of the event of Force
Majeure.

         14.3 Mitigation. When Seller has claimed suspension of an Obligation
under Section 14.2, Seller shall be relieved of its commitment to perform that
Obligation to the extent and for the period that the event of Force Majeure
restrains Seller's performance of that Obligation, provided, however, that:

                  (a) Seller effects those measures that are commercially
         reasonable under the circumstances to mitigate the cause of and effect
         of Force Majeure;

                  (b) Seller recommences performance of such Obligation to the
         extent reasonably possible during the cessation of and upon the
         conclusion of the event of Force Majeure; and

                  (c) as soon as reasonably possible after the conclusion of the
         event of Force Majeure, Seller gives notice to Buyer of the date of
         such conclusion.

         14.4 Labor Disputes. Notwithstanding any other provision hereof, the
settlement of a strike, lockout, or other industrial disturbance shall be
entirely within the discretion of the Seller.

         14.5 Dependent Obligations. If pursuant to the provisions of Section
14.2, an obligation of Seller is suspended in whole or in part, the obligations
of Buyer shall also be suspended if and to the extent that such obligations of
Buyer hereunder are dependent upon are a consequence of the performance of that
suspended Obligation of Seller; provided, however, such obligations shall not be
suspended as to either Party's payment obligations with respect to amounts
accrued hereunder prior to the event of Force Majeure.

         14.6 Demand Charges. It is expressly understood and agreed that if and
for so long as Seller is unable due to an event of Force Majeure to fully
perform its Obligations for a period of ten (10) consecutive Days in response to
a nomination for injection or withdrawal of Product properly made by Buyer
hereunder, then for so long as and to the extent that Seller is so restrained,
the Storage Purchase Fee and the Throughput Fee payable by Buyer shall be
reduced proportionately.

         14.7 Exclusions. Seller shall not be entitled to the benefit of the
provisions of Force Majeure hereunder if any or all of the following
circumstances prevail: (i) the failure resulting in an event of Force Majeure
was caused by the gross negligence or willful misconduct of Seller; (ii) the
failure was caused or extended by Seller where Seller failed to remedy the event
by

                                      -16-
<PAGE>

making all reasonable efforts (short of litigation, if such remedy would require
litigation); or (iii) the failure was caused by lack of funds.

         14.8 Force Majeure Termination. If a Force Majeure shall continue for 6
Months and, as a result of such Force Majeure, Buyer is precluded from
delivering and/or withdrawing a volume of Product greater than 50% of Buyer's
Allotted Storage Capacity, Buyer shall have the right to terminate this
Agreement upon ten (10) days prior written notice to Seller. Upon the effective
date of such termination, no further fees or charges shall be due hereunder and
no termination fee shall be payable. Seller shall deliver to Buyer all Products
of Buyer held in the Storage Wells as soon as prudent operating conditions allow
and at no cost or charge to Buyer.

                                   ARTICLE 15
                                     NOTICES

         All notices, requests, statements, or payments under this Agreement
shall be made to the addresses specified set forth below. Unless expressly
provided otherwise, notices shall be in writing and delivered by letter,
facsimile, or other documentary form. Notice by facsimile or hand delivery shall
be deemed to have been received by the close of the Business Day on which it was
transmitted or hand delivered (unless transmitted or hand delivered after the
close of the Business Day, in which case it shall be deemed received at the
close of the next Business Day). Notice by overnight mail or overnight courier
shall be deemed to have been received one Business Day after it was sent. A
Party may change its address by providing notice thereof in accordance with this
Section.

         If to Buyer:

                  Enron Gas Liquids, Inc.
                  Attention:       Operations Manager
                  1400 Smith Street
                  Houston, Texas 77002
                  Phone:           713-853-6461
                  Fax:             713-853-9169

         With a copy to:

                  Enron Global Markets LLC
                  Attention: Vice President & General Counsel
                  400 Smith Street
                  Houston, Texas 77002
                  Fax: 713-646-3490

         If to Seller:

                  EOTT Energy Liquids, L.P.
                  Attention:       Vice President & General Counsel
                  By courier:      2000 W. Sam Houston Parkway S., Suite 400
                                   Houston, Texas 77042
                  By mail:         P.O. Box 4666
                                   Houston, Texas 772 10-4666
                  Phone:           713-993-5027
                  Fax:             713-993-5813

                                      -17-
<PAGE>

                                   ARTICLE 16
                                  MISCELLANEOUS

         16.1 Assignment. The rights and obligations of either Party under this
Agreement may be assigned and delegated only with the prior written consent of
the other Party. No delegation of obligations hereunder shall be effective
unless the entity assuming the obligations agrees in writing to be bound by the
terms and conditions hereof. Notwithstanding the foregoing, (a) the rights and
obligations of Buyer under this Agreement may be assigned and delegated to any
subsidiary, Affiliate, or entity directly or indirectly controlled by or under
the direction or management of or formed for the purposes of a financing
transaction by a subsidiary or Affiliate of Enron Corp. or to any entity
purchasing all or substantially all of the assets of the Seller, in each case
without the prior written consent of the Seller, provided, however, that the
obligations of Buyer shall be not be released unless the entity assuming the
obligations has the financial capacity to perform under this Agreement or such
assignee provides a guaranty by a financially responsible party upon
substantially the same terms and conditions as the Buyer Guaranty and (b) the
rights and obligations of Seller under this Agreement may be assigned and
delegated to any wholly owned subsidiary of the Seller or the Seller Guarantor,
in either case without the prior written consent of the Buyer. All covenants,
terms, conditions, and provisions of this Agreement shall be binding upon the
Parties hereto and shall extend to and be binding upon the successors and
permitted assigns of the Parties hereto. Without assigning any rights and
obligations hereunder, Buyer shall have the right to contract with third parties
for the sale and purchase of all or any portion of the storage capacity
purchased and sold hereunder.

         16.2 Arbitration. ANY AND ALL DISPUTES ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, INCLUDING ANY QUESTION REGARDING ITS EXISTENCE, VALIDITY,
OR TERMINATION, SHALL BE RESOLVED BY BINDING ARBITRATION GOVERNED BY THE FEDERAL
ARBITRATION ACT AND CONDUCTED IN ACCORDANCE WITH THE AMERICAN ARBITRATION
ASSOCIATION COMMERCIAL ARBITRATION RULES ("RULES"), WHICH RULES ARE DEEMED TO BE
INCORPORATED BY REFERENCE INTO THIS CLAUSE. THE NUMBER OF ARBITRATORS SHALL BE
THREE, EACH PARTY HAVING THE RIGHT TO APPOINT ONE ARBITRATOR, WHO SHALL TOGETHER
APPOINT A THIRD NEUTRAL ARBITRATOR WITH AT LEAST FIVE YEARS EXPERIENCE IN THE
INDUSTRY WITHIN 30 DAYS IN ACCORDANCE WITH THE RULES. THE LOCATION OF
ARBITRATION HEARINGS SHALL ALTERNATE BETWEEN THE OFFICES OF BUYER AND SELLER,
THE FIRST BEING HELD AT SELLER'S OFFICES. THE PARTIES HEREBY EXPRESSLY WAIVE ANY
RIGHT OF APPEAL TO ANY COURT. THERE WILL BE NO WRITTEN TRANSCRIPT OR RECORD OF
THE ARBITRATION PROCEEDING. THE ARBITRATORS WILL ONLY MAKE THEIR AWARD AND WILL

                                      -18-
<PAGE>

NOT RENDER A WRITTEN OPINION EXPLAINING THEIR AWARD. IT IS EXPRESSLY AGREED THAT
THE ARBITRATORS SHALL HAVE NO AUTHORITY TO AWARD ATTORNEY'S FEES (EXCEPT FOR
LEGAL COSTS EXPRESSLY PROVIDED FOR HEREIN), OR CONSEQUENTIAL, SPECIAL, INDIRECT,
TREBLE, EXEMPLARY OR PUNITIVE DAMAGES OF ANY TYPE, THE PARTIES HEREBY WAIVING
THEIR RIGHTS, IF ANY, TO RECOVER ATTORNEY'S FEES (EXCEPT FOR LEGAL COSTS
EXPRESSLY PROVIDED FOR HEREIN) AND CONSEQUENTIAL, SPECIAL, INDIRECT, TREBLE,
EXEMPLARY AND PUNITIVE DAMAGES WITH RESPECT TO THIS AGREEMENT. ALL OF THE
ARBITRATORS' ORDERS AND DECISIONS MAY BE ENFORCEABLE IN, AND JUDGMENT UPON ANY
AWARD RENDERED IN THE ARBITRATION PROCEEDING MAY BE CONFIRMED AND ENTERED BY ANY
COURT HAVING PROPER JURISDICTION. THE PARTIES AGREE THAT ALL ARBITRATION
PROCEEDINGS CONDUCTED HEREUNDER AND THE DECISION OF THE ARBITRATORS SHALL BE
KEPT CONFIDENTIAL AND NOT DISCLOSED, EXCEPT TO A PARTY'S AFFILIATES,
ACCOUNTANTS, AND LAWYERS AND AS REQUIRED BY LAW.

         16.3 Choice of Law. This Agreement shall be governed by, and construed,
enforced, and performed in accordance with Texas law without regard to its
principles on conflicts of law which would select another law.

         16.4 Entire Agreement; Amendments: Interpretation. This Agreement
including the Exhibits hereto constitute the entire agreement between the
Parties relating to the subject matter contemplated by this Agreement and
supersedes any prior or contemporaneous agreements or representations affecting
the same subject matter. No amendment, modification, or change to this Agreement
shall be enforceable unless reduced to a writing executed by the Party against
whom such amendment, modification, or change is sought to be enforced. The
Parties acknowledge that each Party and its counsel have reviewed and revised
this Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting Party shall not be used in
interpretation of this Agreement.

         16.5 Counterparts Severability: Survival. This Agreement may be
executed in several counterparts, each of which is an original and all of which
constitute one and the same instrument. Except as may otherwise be stated
herein, any provision or Section hereof that is declared or rendered unlawful by
any applicable court of law or regulatory agency, or deemed unlawful because of
a statutory change, will not otherwise affect the lawful obligations that arise
under this Agreement. If any provision of this Agreement is declared unlawful,
the Parties will promptly renegotiate to restore this Agreement as near as
possible to its original intent and effect. All indemnities and audit rights
shall survive the termination of this Agreement in full for a period of two
years.

         16.6 Non-Waiver; Duty to Mitigate; No Partnership or Third Party
Beneficiaries. No waiver by any Party of any its rights with respect to the
other Party or with respect to any matter or default arising in connection with
this Agreement shall be construed as a waiver of any subsequent right, matter,
or default whether of a like kind or different nature. Any waiver shall be in
writing signed by the waiving Party. Each Party agrees that it has a duty to
mitigate

                                      -19-
<PAGE>

damages. Except as provided in Section 9.3, nothing contained in this Agreement
shall be construed or constitute any Party as the employee, agent, partner,
joint venturer, or contractor of any other Party. This Agreement is made and
entered into for the sole protection and legal benefit of the Parties, and their
permitted successors and assigns, and no other person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement.

         16.7 Further Assurances. Each of the Parties to this Agreement shall
provide such data and information, execute and deliver such further documents
and instruments, give such further assurances and perform such acts as may be
reasonably required by the other Party to this Agreement in order to carry out
the purposes, intentions, and provisions of this Agreement.

                           [Signature Page to Follow]

                                      -20-
<PAGE>

         IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in multiple originals as of the first date written above.

                                          BUYER

                                          ENRON GAS LIQUIDS, INC.

                                          BY:     /s/                      (MAR)
                                               ---------------------------------
                                          NAME:   JOHN NOWLAN
                                                --------------------------------
                                          TITLE:  VICE PRESIDENT
                                                 -------------------------------

                                          SELLER

                                          EOTT ENERGY LIQUIDS, L.A.

                                          By: EOTT ENERGY GENERAL PARTNER,
                                              L.L.C., its General Partner

                                          BY:      /s/                     (MMS)
                                              ----------------------------------
                                          NAME:    DANA R. GIBBS
                                                --------------------------------
                                          TITLE:   PRESIDENT & COO
                                                 -------------------------------

                                      -21-
<PAGE>

                                   APPENDIX I
                                   DEFINITIONS

         "ADDITIONAL ALLOTTED STORAGE CAPACITY" means with respect to each
Storage Well the volume of storage capacity set forth in the corresponding
column on Exhibit B-1 hereto.

         "AFFILIATE" means, in relation to any Party or entity, any entity
controlled, directly or indirectly, by such Party or entity, by a subsidiary of
such Party or entity, or by such Party's or entity, or by such Party's or
entity's parent. For this purpose, "control" of any entity or Party means
ownership of a majority of the voting power of such entity or Party.

         "AGREEMENT" has the meaning in the preamble hereto.

         "ALLOTTED STORAGE CAPACITY" means with respect to each Storage Well the
volume of storage capacity set forth in the corresponding column on Exhibit B-I
hereto.

         "ANCILLARY PIPELINES" means (i) the three pipelines extending from the
Storage Wells to the MTBE Plant for transportation of ethane, normal butane,
natural gasoline and isobutane and (ii) the two pipelines extending south out of
the MTBE Plant for transportation of ethane, natural gasoline, iso-butane, and
propane/propylene mix.

         "AVAILABLE STORAGE CAPACITY" means with respect to each Storage Well
the volume of storage capacity set forth in the corresponding column on Exhibit
B-1 hereto.

         "BANKRUPTCY PROCEEDING" means with respect to a Party or entity, such
Party or entity (i) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or
fails or admits in writing its inability generally to pay its debts as they
become due; (iii) makes a general assignment, arrangement or composition with or
for the benefit of its creditors; (iv) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or liquidation; (v) has a
resolution passed for its winding-up, official management or liquidation (other
than pursuant to a consolidation, amalgamation or merger); (vi) seeks or becomes
subject to the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian, or other similar official for it or
for all or substantially all its assets; (vii) has a secured party take
possession of all or substantially all its assets or has a distress, execution,
attachment, sequestration, or other legal process levied, enforced, or sued on
or against all or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed, or
restrained, in each case within thirty (30) days thereafter; (viii) causes or is
subject to any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in clauses
(i) to (vii) (inclusive); or (ix) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing
acts.

         "BARREL" means 42 gallons.

                                Definitions - 22
<PAGE>

         "BUSINESS DAY" means any day other than a Saturday, a Sunday, or a
holiday on which national banking associations in the state of Texas are closed.

         "BUYER GUARANTOR" means Enron Corp.

         "BUYER GUARANTY" means the Guaranty dated as of June 29, 2001, made by
Buyer Guarantor in favor of the Seller guaranteeing the obligations of Buyer
under this Agreement and the Toll Conversion Agreement.

         "CONTRACT YEAR" means each twelve month period during the Term which
begins on the Effective Date or an anniversary date of the Effective Date, as
applicable.

         "DAY" means a period of 24 consecutive hours commencing at 8:00 a.m.,
local time.

         "DEFAULTING PARTY" has the meaning set forth in Section 11.4.

         "DELIVERY POINT(S)" means the points on the Storage Pipeline System
specified in Section 5.2 at which Seller shall tender Product withdrawn from the
Storage Wells to Buyer.

         "EARLY TERMINATION DATE" has the meaning set forth in Section 11.4.

         "EFFECTIVE DATE" means the date of this Agreement.

         "EVENT OF DEFAULT" has the meaning set forth in Section 11.4.

         "EXCESS BARGE THROUGHPUT" means, for each Contract Year, the number of
Gallons by which (a) the sum of the quantity of (i) Products received into the
Storage Facilities by barge and (ii) Products delivered from the Storage
Facilities by barge at Buyer's request pursuant to this Agreement exceeds (b)
383,250,000 Gallons for such Contract Year.

         "EXCESS BARGE THROUGHPUT FEE" means the fee, if any, equal to the
product of $.0075 per Gallon and the Excess Barge Throughput for barge receipts
and deliveries.

         "EXCESS PIPELINE THROUGHPUT" means, for each Contract Year, the number
of Barrels by which (a) the sum of the quantity of (i) Products received into
the Storage Facilities through pipelines and (ii) Products delivered from the
Storage Facilities through pipelines at Buyer's request pursuant to this
Agreement exceeds (b) 40,000,000 Barrels for such Contract Year.

         "EXCESS PIPELINE THROUGHPUT FEE" means the fee, if any, equal to the
product of $.02 per Barrel and the Excess Pipeline Throughput for pipeline
receipts and deliveries.

         "EXCESS RAIL THROUGHPUT" means, for each Contract Year, the number of
Gallons by which (a) the sum of the quantity of (i) Products received into the
Storage Facilities by rail and (ii) Products delivered from the Storage
Facilities by rail at Buyer's request pursuant to this Agreement exceeds (b)
1,533,000 Gallons for such Contract Year.

                                Definitions - 23
<PAGE>

         "EXCESS RAIL THROUGHPUT FEE" means the fee, if any, equal to the
product of $.005 per Gallon and the Excess Rail Throughput for rail receipts and
deliveries.

         "EXCESS THROUGHPUT FEE" means the sum of the Excess Barge Throughput
Fee, Excess Pipeline Throughput Fee, Excess Rail Throughput Fee, and Excess
Truck Throughput Fee.

         "EXCESS TRUCK THROUGHPUT" means, for each Contract Year, the number of
Gallons by which (a) the sum of the quantity of (i) Products received into the
Storage Facilities by truck and (ii) Products delivered from the Storage
Facilities by truck at Buyer's request pursuant to this Agreement exceeds (b)
15,330,000 Gallons for such Contract Year.

         "EXCESS TRUCK THROUGHPUT FEE" means the fee, if any, equal to the
product of $.0075 per Gallon and the Excess Truck Throughput for truck receipts
and deliveries.

         "EXTENDED TERM STORAGE PURCHASE FEE" has the meaning set forth in
Section 9.3 above.

         "FIRM BASIS" means that injections and withdrawals of Product into or
out of the Storage Wells during the term of this Agreement shall not be subject
to interruption, curtailment or suspension by Seller for any reason other than
Force Majeure and as otherwise provided in this Agreement.

         "GALLON" means one (1) U.S. gallon.

         "GOOD FAITH" means honesty in fact and the observance of reasonable
commercial standards of fair dealing in the trade.

         "INTEREST RATE" means, for any date, the per annum rate of interest
equal to the prime lending rate as may from time to time be published in the
Wall Street Journal under "Money Rates" plus two percent (2.00%); provided the
Interest Rate shall never exceed the maximum rate allowed by applicable law.

         "LINE PACK PRODUCT" means volumes of product maintained in the Storage
Pipeline System at all times in order to maintain pressure and uninterrupted
flow for transportation of Product through the Storage Pipeline System.

         "MAXIMUM DAILY INJECTION QUANTITY" means the aggregate maximum quantity
of Product that Buyer may nominate and deliver and Seller shall receive at the
Receipt Point(s) for injection into the Storage Facilities each Day at constant
hourly rates of flow over the course of such Day consistent with (i) the overall
capacity of the Storage Facilities, (ii) the capacity of each Storage Well and
(iii) customary industry practice and historical operating practices at the
Storage Facilities.

         "MAXIMUM DAILY WITHDRAWAL QUANTITY" means the aggregate maximum
quantity of Product that Buyer may nominate and that Seller will withdraw from
the Storage Facilities and tender to Buyer at the Delivery Point(s) each Day at
constant hourly rates of flow over the course

                                Definitions - 24
<PAGE>

of such Day consistent with (i) the overall capacity of the Storage Facilities,
(ii) the capacity of each Storage Well and (iii) customary industry practice and
historical operating practices at the Storage Facilities.

         "METERING EQUIPMENT" has the meaning set forth in Section 7.5.

         "MONTH" means a period of one calendar Month commencing at 8:00 a.m.,
local time, on the first Day of a calendar Month and ending at 8:00 a.m. on the
first Day of the following calendar Month.

         "MTBE PLANT" means Seller's facility adjacent to the Houston Ship
Channel in LaPorte and Morgan's Point, Texas.

         "NOMINATION PROCEDURES" has the meaning set forth in Article 4 above.

         "NON-DEFAULTING PARTY" has the meaning set forth in Section 11.4.

         "OBLIGATION has the meaning set forth in Section 14 above.

         "PARTY" OR "PARTIES" refers to the parties to this Agreement,
individually and collectively as the context indicates.

         "PRODUCT" OR "PRODUCTS," as applicable, means ethane, propane,
normal-butane, iso-butane, natural gasoline, propylene, other liquified
petroleum gas mixtures and brine meeting the specifications as set forth on
Exhibit D hereto for such product.

         "PRODUCT STORAGE ACCOUNT" means the quantity of each Product in each
Storage Well designated for Buyer's account.

         "QUARTERLY EXCESS BARGE THROUGHPUT" means, for each quarter for each
Contract Year, the number of Gallons by which the (a) the sum of the quantity of
(i) Products received by barge into the Storage Facilities and (ii) Products
delivered by barge from the Storage Facilities at Buyer's request pursuant to
this Agreement exceeds (b) 95,812,500 Gallons for such quarter of such Contract
Year.

         "QUARTERLY EXCESS BARGE THROUGHPUT FEE" means the fee, if any, equal to
the product of $.0075 per Gallon and the Quarterly Excess Barge Throughput for
barge receipts and deliveries.

         "QUARTERLY EXCESS PIPELINE THROUGHPUT" means, for each quarter of each
Contract Year, the number of Barrels by which the (a) the sum of the quantity of
(i) Products received through pipelines into the Storage Facilities and (ii)
Products delivered through pipelines from the Storage Facilities at Buyer's
request pursuant to this Agreement exceeds (b) 10,000,000 Barrels for such
quarter of such Contract Year.

                                Definitions - 25
<PAGE>

         "QUARTERLY EXCESS PIPELINE THROUGHPUT FEE" means the fee, if any, equal
to the product of $.02 per Barrel and the Quarterly Excess Pipeline Throughput
for pipeline receipts and deliveries.

         "QUARTERLY EXCESS RAIL THROUGHPUT" means, for each quarter for each
Contract Year, the number of Gallons by which the (a) the sum of the quantity of
(i) Products received by rail into the Storage Facilities and (ii) Products
delivered by rail from the Storage Facilities at Buyer's request pursuant to
this Agreement exceeds (b) 383,250 Gallons for such quarter of such Contract
Year.

         "QUARTERLY EXCESS RAIL THROUGHPUT FEE" means the fee, if any, equal to
the product of $.005 per Gallon and the Quarterly Excess Rail Throughput for
rail receipts and deliveries.

         "QUARTERLY EXCESS THROUGHPUT FEE" means the sum of the Quarterly Excess
Barge Throughput Fee, Quarterly Excess Pipeline Throughput Fee, Quarterly Excess
Rail Throughput Fee, and Quarterly Excess Truck Throughput Fee.

         "QUARTERLY EXCESS TRUCK THROUGHPUT" means, for each quarter for each
Contract Year, the number of Gallons by which the (a) the sum of the quantity of
(i) Products received by truck into the Storage Facilities and (ii) Products
delivered by truck from the Storage Facilities at Buyer's request pursuant to
this Agreement exceeds (b) 3,832,500 Gallons for such quarter of such Contract
Year.

         "QUARTERLY EXCESS TRUCK THROUGHPUT FEE" means the fee, if any, equal to
the product of $ .0075 per Gallon and the Quarterly Excess Truck Throughput for
truck receipts and deliveries.

         "RECEIPT POINT(S)" means the points on the Storage Pipeline System
specified in Section 5.1 at which Seller shall receive Product from Buyer for
injection into the Storage Wells.

         "SELLER GUARANTOR" means EOTT Energy Operating Limited Partnership.

         "SELLER GUARANTY" means the Guaranty dated as of June 29, 2001 made by
the Seller Guarantor in favor of Buyer guaranteeing the obligations of Seller
under this Agreement and the Toll Conversion Agreement.

         "STORAGE FACILITIES" means the Storage Wells and the Storage Pipeline
Systems.

         "STORAGE PIPELINE SYSTEM" means the pipeline system, including the
Ancillary Pipelines and all loading and unloading facilities for trucks, tank
cars, barges and other vessels, for transporting Product interconnecting the
Storage Wells, the Transporting Pipelines, the MTBE Plant, and as otherwise
delineated in Exhibit A, together with all associated equipment.

         "STORAGE PURCHASE FEE" means the annual fee as defined and determined
pursuant to Section 3.1 hereof.

                                Definitions - 26
<PAGE>

         "STORAGE WELLS" means the ten (10) storage wells and related facilities
owned and operated by Seller, together with the associated compressors,
dehydrators and other surface equipment (hereinafter the "Surface Facilities"),
all located in Mont Belvieu, Texas. As those additional storage wells listed in
Exhibit B-2 are brought online at Seller's facilities associated with the
Storage Facilities and become available for storage of Product, such storage
wells will be included as Storage Wells. Each Storage Well shall include, but
not be limited to the following:

                  (i) A products storage well consisting of an existing brine
         well which is designed for LPG storage service and capable of providing
         storage capacity not less than the storage capacity for such Storage
         Well listed in Exhibit A hereto. Each such facility shall have ample
         capacity to deliver fresh water and/or brine to the respective Storage
         Well and to withdraw brine from the Storage Well.

                  (ii) Necessary wellhead valves and an industry standard
         emergency shutdown system.

                  (iii) All brine and fresh water handling facilities.

                  (iv) A fire protection system.

                  (v) A products injection pump.

                  (vi) Miscellaneous pipe, fittings, and accessories to connect
         the pump station to the wellhead.

                  (vii) Measurement facilities.

                  (viii) A liquids chromatograph.

         "TERM" means the period of time beginning on the Effective Date and
ending on the Termination Date.

         "TERMINATION DATE" means the first to occur of (i) termination of this
Agreement in accordance with Sections 8.3, or 14.8, (ii) the Early Termination
Date and (iii) June 29, 2011.

         "THROUGHPUT FEE" means the annual fee as defined and determined
pursuant to Section 3.2 hereof.

         "TRANSPORTING PIPELINE" means the pipeline that (a) delivers Product to
the Receipt Point(s) for injection into the Storage Facilities for storage
and/or (b) accepts Product withdrawn from the Storage Facilities at the Delivery
Point(s), in accordance with this Agreement.

                                Definitions - 27
<PAGE>

         "TOLL CONVERSION AGREEMENT" means the Toll Conversion Agreement dated
June 29, 2001, by and between the Seller and the Buyer executed in connection
herewith.

         "UNACCEPTABLE SELLER CREDIT RATING" means a Credit Rating of B+ or
lower by Standard & Poor's and Bal or lower by Moody's.

         "UNACCEPTABLE BUYER CREDIT RATING" means a Credit Rating of BB+ or
lower by Standard & Poor's and Bal or lower by Moody's.

         "YEAR" means a period of 365 consecutive Days, or 366 consecutive days
if the intervening period contains a February 29, with the first Year commencing
at 8:00 a.m. local time on the Effective Date, and with each subsequent Year
commencing at 8:00 a.m. local time on the anniversary thereof.

                                Definitions - 28
<PAGE>

                                    EXHIBIT A

                     DESCRIPTION OF STORAGE PIPELINE SYSTEM

The following along with associated equipment shall comprise the Storage
Pipeline System:

MTBE Plant

         The MTBE Plant is located in Morgan's Point, Texas, which is
approximately thirty miles east of Houston, Texas. The MTBE Plant consists of
(i) a dehydrogenation unit (the "Oleflex Unit"), (ii) a MTBE unit (the "MTBE
Unit", and together with the Oleflex Unit the "Units"), (iii) a butane
isomerization unit and (iv) various product handling facilities.

Mont Belvieu

         The Mont Belvieu facility is a natural gas liquids storage facility
located at Mont Belvieu, Chamber's County, Texas, which is approximately sixteen
miles from the MTBE Plant. The Mont Belvieu facility consists of ten active
wells with a total capacity of nine million barrels. These facilities are
connected by pipeline directly to the MTBE Plant and a variety of other
end-users throughout the Texas/Louisiana Gulf Coast region.

The Grid System

         The Grid System a pipeline system used for the transportation of
natural gas liquids and other products from the Mont Belvieu Facility to the
MTBE Plant, to other pipelines, as well as to refineries owned by Amoco Corp.,
Marathon Oil Co., Phibro Energy U.S.A. and Shell Oil Co.

Dock

The dock is located at Barbours Cut, adjacent to the Houston Container Port at
the entrance of the Houston Ship Channel. The dock can provide a loading berth
for barges up to 400 feet in length, 120 feet in beam and 15 feet in molded
draft.

<PAGE>

                                   EXHIBIT B-1
                     ITEMIZED INFORMATION FOR STORAGE WELLS

<Table>
<Caption>

                                                                                                      Additional
                                                   Available Storage       Allotted Storage       Allotted Storage
    Storage Well               Product                 Capacity               Capacity                Capacity
    ------------               -------             -----------------       ----------------       ----------------
<S>                           <C>                  <C>                     <C>                    <C>

         1                     Y-Grade                   721,200                 576,960               36,060

         2                     BG Iso                    660,000                 528,000               33,000

         3                     Ethane                  1,328,610               1,062,888               66,431

         4                    Butylene                 1,014,279                 811,423               50,714

         5                     Normal                  1,115,619                 892,495               55,781
                               Butane
         6                    Gasoline                 1,392,000               1,113,600               69,600

         7                     SG Iso                  1,570,000               1,256,000               78,500

         8                    Gasoline                 1,850,000               1,480,000               92,500

         9                    Gasoline                 1,330,000               1,064,000               66,500

         10                    Normal                  1,708,175               1,366,540               85,409
                               Butane
</Table>

o        ALL QUANTITIES LISTED ABOVE IN BARRELS.

<PAGE>

                                   EXHIBIT B-2
                ITEMIZED INFORMATION FOR ADDITIONAL STORAGE WELLS

<Table>
<Caption>

                                                                                                      Additional
                                                   Available Storage        Allotted Storage           Allotted
    Storage Well               Product                  Capacity               Capacity             Storage Capacity
    ------------               -------             -----------------        ----------------        ----------------
<S>                            <C>                 <C>                      <C>                     <C>

         11                      N/A                    812,264                 81,227                 609,198

         12                      N/A                    659,215                 65,922                 494,412

         13                      N/A                    860,498                 85,050                 645,374
</Table>

o   ALL QUANTITIES LISTED ABOVE IN BARRELS.

<PAGE>

                                    EXHIBIT C
                           RECEIPT AND DELIVERY PORTS

DISTRIBUTION LINES:

<Table>
<Caption>

     Line         Line Size         Meter Number         Meter Size      Usual Service         Custody Transfer
     ----         ---------         ------------         ----------      -------------         ----------------

<S>               <C>               <C>                  <C>             <C>                   <C>

      1A              6"             1AA & 1AB             2" & 3"       Normal Butane           At Customer

      1B              6"                 1B                  4"             Gasoline             At Customer

      1C              6"                 1C                  4"             Utility               Depends on
                                                                                             Direction of Flow(1)

      1D              6"                 1D                  4"             Utility               Depends on
                                                                                            Direction of Flow(1)

      1E              6"                 1E                  3"             Gasoline         At Storage Facility

      1F              6"             1FA & 1FB             3" & 4"          Gasoline             At Customer

      1G              8"             1GA & 1GB             4" & 4"          Utility               Depends on
                                                                                             Direction of Flow(1)
</Table>

CROSS CHANNEL LINES:

<Table>
<Caption>

     Line         Line Size         Meter Number         Meter Size         Service             Meter Custody
     ----         ---------         ------------         ----------         -------             -------------

<S>               <C>              <C>                   <C>                <C>               <C>

    Line 1         6" & 8"               L1                  4"              Ethane           At Morgan's Point

  Dean Line        6" & 8"         Dean P/L Meter            4"             Y-Grade          At Storage Facility

    Line 8         6" & 8"           L8A & L8B               4"             Butanes          At Storage Facility

    Line 9            6"             L9A & L9B               4"             Utility          At Storage Facility
</Table>

MORGAN'S POINT LINES:

<Table>
<Caption>

     Line         Line Size         Meter Number         Meter Size         Service             Meter Custody
     ----         ---------         ------------         ----------         -------             -------------

<S>               <C>             <C>                    <C>                <C>               <C>

    Line 2            6"           Manifold Meter           2 1/2"            Ethane           At Morgan's Point

    Line 3            6"           Manifold Meter            3"             Gasoline          At Morgan's Point

    Line 6            6"          Texas City Meter           3"             Utility         Meter's in Texas City

    Dock 1           12"           Manifold Meter            4"             Methonal          At Morgan's Point

    Dock 2           12"           Manifold Meter            4"             Methonal          At Morgan's Point

    Dock 3            8"           Manifold Meter            4"             Utility           At Morgan's Point

    Dock 4           12"           Manifold Meter            4"             Gasoline          At Morgan's Point

    Dock 5           12"           Manifold Meter            6"               MTBE            At Morgan's Point

    Dock 6           12"           Manifold Meter            6"               MTBE            At Morgan's Point

    Dock 7            8"           Manifold Meter            4"            Iso-Butane         At Morgan's Point
</Table>

(1) If Storage Facility is receiving material, custody will transfer at shippers
meter. If Storage Facility is shipping material, custody will transfer at
Storage Facility meter.

<PAGE>

                                   EXHIBIT - D

                         PRODUCT SPECIFICATION - ETHANE

<Table>
<Caption>

                                                                                                 Method-Latest
Composition, Liquid Volume %                                                                     Rev.
----------------------------                                                                     --------------

<S>                                                                         <C>                  <C>

     Methane                                                                3.0% Max.

     Ethane                                                                 95.0% Min.           ASTM D-2163

     Propane                                                                5.0% Max.

     Butanes & Heavier                                                      None

     Carbon Dioxide and other non-hydrocarbons, ppm                         1,000 Max.

     Total Sulphur, ppm, wt                                                 15 Max.              ASTM D-2784

     Corrosion, Copper Strip, Max.                                          No.  1*              ASTM D-1838

     Free Water                                                             None
</Table>

*    This method may not accurately determine the corrosivity of the liquefied
     petroleum gas if the sample contains corrosion inhibitors or other
     chemicals which diminish the corrosivity of the sample to the copper strip.
     Therefore, the addition of such compounds for the sole purpose of biasing
     the test is prohibited.

<PAGE>

                                   EXHIBIT - D

                      PRODUCT SPECIFICATION - HD 5 PROPANE

<Table>
<Caption>

                                                                                                 Method-Latest
Composition, Liquid Volume %                                                                     Rev.
----------------------------                                                                     --------------
<S>                                                                         <C>                  <C>
     Propane                                                                90.0 Min.            ASTM D-2163
     Propylene                                                              5.0 Max.
     Butane & Heavier                                                       2.5% Max.
     Specific Gravity @ 60(degree)F                                         0.500 Min.           ASTM D-1657
                                                                            0.510 Max
     Vapor Pressure @ 100(degree)F, Psig.                                   208 Max.             ASTM D-1267-84
     Volatile Residue:
     Temperature at 95% evaporation, deg. F., Max.                          -37 degrees          ASTM D-1837

     Residue on Evaporation of 100 ml, Max.                                 0.05 MI              ASTM D-2158

     Oil Stain Observation                                                  Pass*                ASTM D-2158

     Ammonia, ppm, wt.                                                      1.0 Max.             UOP-430
     Carbonyl Sulfide, ppm, wt.                                             1.0 Max.             UOP-212
     Chlorides, ppm, wt.                                                    15.0 Max

     Corrosion, Copper Strip, Max.                                          No.  1**             ASTM D-1838

     Total Sulphur, ppm, wt.                                                123 Max.             ASTM D-2784

     Free Water                                                             None
</Table>

*    An acceptable product shall not yield a persistent oil ring when 0.3 ml of
     solvent residue mixture is added to filter paper in 0.1 increments and
     examined in daylight after 2 minutes as described in ASTM D-2158.

**   This method may not accurately determine the corrosivity of the liquefied
     petroleum gas if the sample contains corrosion inhibitors or other
     chemicals which diminish the corrosivity of the sample to the copper strip.
     Therefore, the addition of such compounds for the sole purpose of biasing
     the test is prohibited.

<PAGE>

                                   EXHIBIT - D

                       PRODUCT SPECIFICATION - ISO BUTANE

<Table>
<Caption>

                                                                                                 Method-Latest
Composition, Liquid Volume %                                                                     Rev.
----------------------------                                                                     -------------
<S>                                                                         <C>                  <C>

     Iso-Butane                                                             96.0 Min.            ASTM D-2163
     Propane                                                                3.0 Max.
     Normal Butane & Heavier                                                4.0 Max.
     Total Sulphur, ppm, wt.                                                140 Max.             ASTM D-2784
     Vapor pressure, psig                                                   70 Max.              ASTM D-1267

     Corrosion, Copper Strip, Max                                           No.  1*              ASTM D-1838

     Volatile Residue
     Temp.  @ 95% Evaporation
     Degree F., Max.                                                        +16                  ASTM D-1837

     Free Water                                                             None
</Table>

*    This method may not accurately determine the corrosivity of the liquefied
     petroleum gas if the sample contains corrosion inhibitors or other
     chemicals which diminish the corrosivity of the sample to the copper strip.
     Therefore, the addition of such compounds for the sole purpose of biasing
     the test is prohibited.

<PAGE>

                                   EXHIBIT - D

                      PRODUCT SPECIFICATION - NORMAL BUTANE

<Table>
<Caption>

                                                                                           Method-Latest
Composition, Liquid Volume %                                                               Rev.
----------------------------                                                               --------------
<S>                                                                    <C>                 <C>
     Normal Butane                                                     95.0 Max.            ASTM D-2163
     Iso Butane                                                        3.0 Max.             ASTM D-2163
     Pentanes                                                          2.0 Max.             ASTM D-2163
     Propane                                                           2.0 Max.             ASTM D-2163

     Total Sulphur, ppm, wt                                            140 Max.             ASTM D-2784

     Vapor Pressure, psig @ 100(degree)F                               50 Max               ASTM D-1267

     Corrosion, Copper Strip, Max                                      No. 1*               ASTM D-1838

     Volatile Residue
     Temp.  @ 95% Evaporation
     Degree F., Max.                                                   +36                  ASTM D-1837

     Free Water                                                        None
</Table>

*    This method may not accurately determine the corrosivity of the liquefied
     petroleum gas if the sample contains corrosion inhibitors or other
     chemicals which diminish the corrosivity of the sample to the copper strip.
     Therefore, the addition of such compounds for the sole purpose of biasing
     the test is prohibited.

<PAGE>

                                   EXHIBIT - D
                              PRODUCT SPECIFICATION

                       NORMAL BUTANE RECEIVED VIA PIPELINE

<Table>
<Caption>

                                                                                NORMAL
PRODUCT CHARACTERISTICS                                                         BUTANE          TEST METHODS
-----------------------                                                         ------          ------------
<S>                                                                             <C>             <C>
COMPOSITION:
Liquid Volume %:
     Normal Butane, Min.                                                          94.0%          ASTM D-2163
     Propane and lighter, Max.                                                     0.5%
     Isobutane, Max.                                                               6.0%
     Pentanes, Max.                                                                1.5%
     Hexanes and heavier, Max.                                                    0.05%
     Total Olefins, Max.                                                          0.35%
         Isobutylene, Max.                                                        0.02%
         Butadiene and other diolefins, Max.                                     0.002%

Vapor Pressure @ 100 Degrees F, Max.                                            50 psig          ASTM D-1267

Volatile Residue: Temp @95%                                                         +36          ASTM D-1837
     evaporation, Degrees F, Max

Corrosion, Copper Strip, Max.                                                    No.  1          ASTM D-1838

Free Water Content                                                                 None

Total Oxygenates, ppm wt., Max.                                                    20.0          UOP-845
     (Methanol, C02, heavy alcohols, ethers, gylcols)
     Methanol, ppm wt., Max.                                                       20.0
     IPA and Heavier Alcohols, ppm wt., Max.                                        5.0
     MTBE and Other Ethers, ppm wt., Max.                                           2.0
     Other Oxygenates, ppm wt., Max.                                                5.0

Total Sulphur, ppm wt., Max.                                                        140          ASTM D-2784

Fluorides, ppm wt., Max.                                                            1.0          UOP-619

Fuel Bound Nitrogen, ppm wt., Max.                                                  0.5          ASTM D-4629

Metals, ppb wt., Max.                                                                15          UOP 834
                                                                                                 UOP 906
</Table>

NOTE:    These specifications define only a basic purity for this product. The
         product is to be free of any contaminates that might render the product
         unsuitable for isomerization.

<PAGE>

                                   EXHIBIT - D
                    PRODUCT SPECIFICATION - NATURAL GASOLINE

<Table>
<Caption>

                                                                                                 Test Methods
                                                          Minimum             Maximum            Latest Revision
                                                          -------             -------            ---------------
<S>                                                <C>                        <C>             <C>

Reid Vapor Pressure @ 100(degrees)F                                           13.5 psi        ASTM D-323-82

Distillation End Point                                                        375(degree)F    ASTM D-216-77 (82)

Corrosiveness, Cooper strip @ 100(degrees)F                                   No. 1           ASTM D-130-80 (MODIFIED)

Color, Saybolt minimum                                      +25                               ASTM D-156-82

Total Sulfur, wt. ppm, max.                                                   1000            ASTM D-2622

Butanes and Lighter, LV%                                                      3%              ASTM D-2597

Reactive Sulfur                                    Negative, "sweet"                          ASTM D-4952-97 or GPA 1138

Free Water                                                                    None
</Table>

<PAGE>

                                   EXHIBIT - D
                              PRODUCT SPECIFICATION

                   NORMAL BUTANE RECEIVED VIA TRUCK/RAIL CARS

<Table>
<Caption>
                                                                            NORMAL               TEST
PRODUCT CHARACTERISTICS                                                     BUTANE               METHODS
-----------------------                                                     ------               -------
<S>                                                                         <C>                  <C>
COMPOSITION:
Liquid Volume %:
     Normal Butane, Min.                                                      94.0%              ASTM D-2163
     Propane and lighter, Max.                                                 0.5%
     Isobutane, Max.                                                           6.0%
     Pentanes, Max.                                                            1.5%
     Hexanes and heavier, Max.                                                0.05%
     Total Olefins, Max.                                                      0.35%
         Isobutylene, Max.                                                    0.02%
         Butadiene and other diolefins, Max.                                 0.002%

Vapor Pressure @ 100 Degrees F, Max.                                        50 psig              ASTM D-1267

Volatile Residue: Temp @ 95%                                                    +36              ASTM D-1837
     evaporation, Degrees F, Max

Corrosion, Copper Strip, Max.                                                 No. 1              ASTM D-1838

Free Water Content                                                             None

Total Oxygenates, ppm wt., Max.                                                 1.0              UOP-845
     (Methanol, C02, heavy alcohols, ethers, gylcols)

Total Sulphur, ppm wt., Max.                                                    140              ASTM D-2784

Fluorides, ppm wt., Max.                                                        1.0              UOP-619

Fuel Bound Nitrogen, ppm wt., Max.                                              0.5              ASTM D-4629

Metals, ppb wt., Max.                                                            15              UOP 834
                                                                                                 UOP 906
</Table>

NOTE:    These specifications define only a basic purity for this product. The
         product is to be free of any contaminates that might render the product
         unsuitable for isomerization.

<PAGE>

                                  SCHEDULE 3.1

STORAGE PURCHASE FEE

<Table>
<Caption>

    DATE                                           Rate            Annual Volumes
    ----                                           ----            --------------
<S>                                                <C>             <C>
   Jul 1, 2001 - Dec. 31, 2001                     $0.0500             60,911,438
   Jan 1, 2002 - Dec. 31, 2002                     $0.0500            121,822,877
   Jan 1, 2003 - Dec. 31, 2003                     $0.0500            121,822,877
   Jan 1, 2004 - Dec. 31, 2004                     $0.0500            121,822,877
   Jan 1, 2005 - Dec. 31, 2005                     $0.0500            121,822,877
   Jan 1, 2006 - Dec. 31, 2006                     $0.0500            121,822,877
   Jan 1, 2007 - Dec. 31, 2007                     $0.0500            121,822,877
   Jan 1, 2008 - Dec. 31, 2008                     $0.0500            121,822,877
   Jan 1, 2009 - Dec. 31, 2009                     $0.0500            121,822,877
   Jan 1, 2010 - Dec. 31, 2010                     $0.0500            121,822,877
   Jan 1, 2011 - June 30, 2011                     $0.0500             60,911,438
</Table>

THROUGHPUT FEE

<Table>
<Caption>

                                                                   Annual
                                                                   Minimum
    DATE                                           Rate            Volumes
    ----                                           ----            -------
<S>                                                <C>             <C>

   Jul 1, 2001 - Dec. 31, 2001                     $0.2532         20,000,000
   Jan 1, 2002 - Dec. 31, 2002                     $0.2434         40,000,000
   Jan 1, 2003 - Dec. 31, 2003                     $0.2484         40,000,000
   Jan 1, 2004 - Dec. 31, 2004                     $0.2534         40,000,000
   Jan 1, 2005 - Dec. 31, 2005                     $0.2586         40,000,000
   Jan 1, 2006 - Dec. 31, 2006                     $0.2638         40,000,000
   Jan 1, 2007 - Dec. 31, 2007                     $0.2692         40,000,000
   Jan 1, 2008 - Dec. 31, 2008                     $0.2748         40,000,000
   Jan 1, 2009 - Dec. 31, 2009                     $0.2805         40,000,000
   Jan 1, 2010 - Dec. 31, 2010                     $0.2863         40,000,000
   Jan 1, 2011 - June 30, 2011                     $0.2927         20,000,000
</Table>

*  All QUANTITIES LISTED ABOVE IN BARRELS.

<PAGE>

                                  SCHEDULE 3.5

                      LOADING RATES PER VESSEL AND PRODUCT

<Table>
<Caption>

                                 MTBE                         Nat. Gasoline              PP Mix
                                 ----                         -------------              ------
<S>                              <C>                          <C>                        <C>
   Barge                         3,000                          2,300                       N/A

   Tank Car                        N/A                            150                       N/A

   Truck                           100                            150                       100
</Table>

*  ALL RATES LISTED ABOVE IN BARRELS PER HOUR.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}]]