Document:

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                                                                    EXHIBIT-10.R

                                                                  EXECUTION COPY

                          EL PASO ENERGY PARTNERS, L.P.

                   EL PASO ENERGY PARTNERS FINANCE CORPORATION

                                   as Issuers

                                       and

                      THE SUBSIDIARIES LISTED ON SCHEDULE A

                            as Subsidiary Guarantors

                                  $200,000,000

              10 5/8% Series A Senior Subordinated Notes due 2012

                               Purchase Agreement

                                November 22, 2002

                           J.P. MORGAN SECURITIES INC.

                              GOLDMAN, SACHS & CO.

                                 UBS WARBURG LLC

                            WACHOVIA SECURITIES, INC.

                              as Initial Purchasers

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                                  $200,000,000

              10 5/8% Series A Senior Subordinated Notes due 2012

                                       of

                          EL PASO ENERGY PARTNERS, L.P.
                                       and
                   EL PASO ENERGY PARTNERS FINANCE CORPORATION

                               Purchase Agreement

                                                               November 22, 2002

J.P. MORGAN SECURITIES INC.
GOLDMAN, SACHS & CO.
UBS WARBURG LLC
WACHOVIA SECURITIES, INC.

c/o J.P. Morgan Securities Inc.
270 Park Avenue, 5th Floor
New York, New York  10017

Ladies and Gentlemen:

         El Paso Energy Partners, L.P., a Delaware limited partnership (the
"Partnership"), and El Paso Energy Partners Finance Corporation, a Delaware
corporation ("El Paso Finance" and together with the Partnership, the
"Issuers"), propose to issue and sell to J.P. Morgan Securities Inc., Goldman,
Sachs & Co., UBS Warburg LLC and Wachovia Securities, Inc. (each an "Initial
Purchaser" and, collectively, the "Initial Purchasers") an aggregate of
$200,000,000 in principal amount of its 10?% Series A Senior Subordinated Notes
due 2012 (the "Series A Notes"), subject to the terms and conditions set forth
herein. The Series A Notes are to be issued pursuant to the provisions of an
indenture, to be dated as of November 27 (the "Indenture"), among the Issuers,
the Guarantors (as defined below) and JPMorgan Chase Bank, as trustee (the
"Trustee"). The Series A Notes and the Series B Notes (as defined below)
issuable in exchange therefor are collectively referred to herein as the
"Notes." The Series A Notes will be guaranteed pursuant to guarantees (the
"Series A Guarantees") by each of the entities listed on Schedule A hereto
(each, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors").
The Series A Guarantees and the Series B Guarantees (as defined below) are
collectively referred to herein as the "Guarantees".

1.       Offering Memorandum. The Series A Notes will be offered and sold to the
         Initial Purchasers pursuant to one or more exemptions from the
         registration requirements under the Securities Act of 1933, as amended
         (the "Act"). The Issuers and the Subsidiary Guarantors have prepared a
         preliminary offering memorandum, dated November 18,

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         2002 (the "Preliminary Offering Memorandum"), and a final offering
         memorandum, dated November 22, 2002 (the "Offering Memorandum"),
         relating to the Series A Notes and the Guarantees. Any reference herein
         to the Preliminary Offering Memorandum or the Offering Memorandum shall
         be deemed to include the documents and other information incorporated
         by reference therein.

         Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:

                  "THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
                  TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
                  SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS NOTE
                  MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
                  ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
                  THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT
                  THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM
                  THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
                  RULE 144A THEREUNDER.

                  THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUERS
                  OF THIS NOTE THAT: (A) THIS NOTE MAY BE OFFERED, RESOLD,
                  PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO EL PASO ENERGY
                  PARTNERS, L.P., EL PASO ENERGY PARTNERS FINANCE CORPORATION,
                  OR ANY SUBSIDIARY OF EL PASO ENERGY PARTNERS, L.P., (II) IN
                  THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
                  BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
                  RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
                  THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES
                  IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER
                  THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
                  REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
                  THEREUNDER (IF AVAILABLE) , (V) TO AN INSTITUTIONAL
                  "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1),
                  (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
                  INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR
                  ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH INSTITUTIONAL
                  ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
                  AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
                  AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH
                  ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (VI)
                  PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
                  SECURITIES ACT, IN

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                  EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY
                  APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES,
                  AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
                  REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE
                  RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."

2.       Agreements to Sell and Purchase. On the basis of the representations,
         warranties and covenants contained in this Agreement, and subject to
         the terms and conditions contained herein, the Issuers agree to issue
         and sell to the Initial Purchasers, and each Initial Purchaser agrees,
         severally and not jointly, to purchase from the Issuers, the principal
         amounts of Series A Notes set forth opposite the name of such Initial
         Purchaser on Schedule B hereto at a purchase price equal to 97.242% of
         the principal amount thereof (the "Purchase Price").

3.       Terms of Offering. The Initial Purchasers have advised the Issuers that
         the Initial Purchasers will make offers (the "Exempt Resales") of the
         Series A Notes purchased hereunder on the terms set forth in the
         Offering Memorandum, as amended or supplemented, solely to (i) persons
         whom the Initial Purchasers reasonably believe to be "qualified
         institutional buyers" as defined in Rule 144A under the Act ("QIBs")
         and (ii) persons permitted to purchase the Series A Notes in offshore
         transactions in reliance upon Regulation S under the Act (each, a
         "Regulation S Purchaser") (such persons specified in clauses (i) and
         (ii) being referred to herein as the "Eligible Purchasers"). The
         Initial Purchasers will offer the Series A Notes to Eligible Purchasers
         initially at a price equal to 99.242% of the principal amount thereof.

         Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated as of the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such Series A Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers
and the Subsidiary Guarantors will agree to file with the Securities and
Exchange Commission (the "Commission") under the circumstances set forth
therein, (i) a registration statement under the Act (the "Exchange Offer
Registration Statement") relating to the Issuers' 10?% Series B Senior
Subordinated Notes due 2012 (the "Series B Notes"), and the guarantees thereof
by each of the Subsidiary Guarantors (the "Series B Guarantees") to be offered
in exchange for the Series A Notes and the Series A Guarantees thereof (such
offer to exchange being referred to as the "Exchange Offer") and (ii) a shelf
registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement" and, together with the Exchange Offer Registration
Statement, the "Registration Statements") relating to the resale by certain
holders of the Series A Notes and to use its best efforts to cause such
Registration Statements to be declared and remain effective and usable for the
periods specified in the Registration Rights Agreement and to consummate the
Exchange Offer. This Agreement, the Indenture, the Notes, the Guarantees and the
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "Operative Documents."

4.       Delivery and Payment.

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         (a) Delivery of, and payment of the Purchase Price for, the Series A
         Notes shall be made at the offices of Akin, Gump, Strauss, Hauer &
         Feld, L.L.P., 1900 Pennzoil Place South Tower, 711 Louisiana Street,
         Houston, TX 77002, or such other location as may be mutually
         acceptable. Such delivery and payment shall be made at 9:00 a.m. New
         York City time, on November 27, 2002 or at such other time on the same
         date or such other date as shall be agreed upon by the Initial
         Purchasers and the Issuers in writing. The time and date of such
         delivery and the payment for the Series A Notes are herein called the
         "Closing Date."

         (b) One or more of the Series A Notes in definitive global form,
         registered in the name of Cede & Co., as nominee of the Depository
         Trust Company ("DTC"), having an aggregate principal amount
         corresponding to the aggregate principal amount of the Series A Notes
         (collectively, the "Global Note"), shall be delivered by the Issuers to
         the Initial Purchasers (or as the Initial Purchasers direct) in each
         case with any transfer taxes thereon duly paid by the Issuers against
         payment by the Initial Purchasers of the Purchase Price thereof by wire
         transfer in same day funds to the order of the Partnership. The Global
         Note shall be made available to the Initial Purchasers for inspection
         not later than 9:30 a.m., New York City time, on the business day
         immediately preceding the Closing Date.

5.       Agreements of the Issuers and the Subsidiary Guarantors. Each of the
         Partnership, El Paso Finance and the Subsidiary Guarantors hereby
         agrees with the Initial Purchasers as follows:

         (a) To advise the Initial Purchasers promptly and, if requested by the
         Initial Purchasers, to confirm such advice in writing, (i) of the
         issuance by any state securities commission of any stop order
         suspending the qualification or exemption from qualification of any
         Series A Notes for offering or sale in any jurisdiction designated by
         the Initial Purchasers pursuant to Section 5(e) hereof, or the
         initiation of any proceeding by any state securities commission or any
         other federal or state regulatory authority for such purpose and (ii)
         of the happening of any event during the period referred to in Section
         5(c) below that makes any statement of a material fact made in the
         Offering Memorandum untrue or that requires any additions to or changes
         in the Offering Memorandum in order to make the statements therein not
         misleading. The Issuers and the Subsidiary Guarantors shall use their
         best efforts to prevent the issuance of any stop order or order
         suspending the qualification or exemption of any Series A Notes under
         any state securities or Blue Sky laws and, if at any time any state
         securities commission or other federal or state regulatory authority
         shall issue an order suspending the qualification or exemption of any
         Series A Notes under any state securities or Blue Sky laws, the Issuers
         and the Subsidiary Guarantors shall use their best efforts to obtain
         the withdrawal or lifting of such order at the earliest possible time;

         (b) To furnish the Initial Purchasers and those persons identified by
         the Initial Purchasers to the Issuers as many copies of the Offering
         Memorandum, and any amendments or supplements thereto, as the Initial
         Purchasers may reasonably request for the time period specified in
         Section 5(c). Subject to the Initial Purchasers' compliance with its
         representations and warranties and agreements set forth in Section 7
         hereof, the Issuers

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         consent to the use of the Offering Memorandum, and any amendments and
         supplements thereto required pursuant hereto, by the Initial Purchasers
         in connection with Exempt Resales;

         (c) At any time prior to the completion of the initial offering of the
         Series A Notes and in connection with market-making activities of the
         Initial Purchasers for so long as any Series A Notes are outstanding,
         (i) not to make any amendment or supplement to the Offering Memorandum
         of which the Initial Purchasers shall not previously have been advised
         or to which the Initial Purchasers shall reasonably object after being
         so advised, provided, that this clause (i) shall not apply to any
         filing by the Partnership of an Annual Report on Form 10-K, Quarterly
         Report on Form 10-Q or Current Report on Form 8-K with respect to
         matters unrelated to the Series A Notes and the offering or exchange
         thereof, and (ii) to prepare promptly upon the Initial Purchasers'
         reasonable request, any amendment or supplement to the Offering
         Memorandum which may be necessary or advisable in connection with such
         Exempt Resales or such market-making activities;

         (d) If, during the period referred to in Section 5(c) above, any event
         shall occur or condition shall exist as a result of which, in the
         opinion of counsel to the Initial Purchasers, it becomes necessary to
         amend or supplement the Offering Memorandum in order to make the
         statements therein, in the light of the circumstances when such
         Offering Memorandum is delivered to an Eligible Purchaser, not
         misleading, or if, in the opinion of counsel to the Initial Purchasers,
         it is necessary to amend or supplement the Offering Memorandum to
         comply with any applicable law, forthwith to prepare, subject to
         Section 5(c), an appropriate amendment or supplement to such Offering
         Memorandum so that the statements therein, as so amended or
         supplemented, will not, in the light of the circumstances when it is so
         delivered, be misleading, or so that such Offering Memorandum will
         comply with applicable law, and to furnish to the Initial Purchasers
         and such other persons as the Initial Purchasers may designate such
         number of copies thereof as the Initial Purchasers may reasonably
         request;

         (e) Prior to the sale of all Series A Notes pursuant to Exempt Resales
         as contemplated hereby, to cooperate with the Initial Purchasers and
         counsel to the Initial Purchasers in connection with the registration
         or qualification of the Series A Notes for offer and sale to the
         Initial Purchasers and pursuant to Exempt Resales under the securities
         or Blue Sky laws of such jurisdictions as the Initial Purchasers may
         request and to continue such registration or qualification in effect so
         long as required for Exempt Resales and to file such consents to
         service of process or other documents as may be necessary in order to
         effect such registration or qualification; provided, however, that
         neither the Issuers nor any Subsidiary Guarantor shall be required in
         connection therewith to qualify as a foreign partnership, limited
         liability company, trust or corporation in any jurisdiction in which it
         is not now so qualified or to take any action that would subject it to
         general consent to service of process or taxation other than as to
         matters and transactions relating to the Preliminary Offering
         Memorandum, the Offering Memorandum or Exempt Resales, in any
         jurisdiction in which it is not now so subject;

         (f) For so long as the Series A Notes are outstanding, to furnish or
         make available to the Initial Purchasers copies of any annual reports,
         quarterly reports and current reports filed

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         by the Partnership with the Commission on Forms 10-K, 10-Q and 8-K, and
         such other documents, reports and information as shall be furnished by
         the Company to the Trustee or to the holders of Series A Notes, in each
         case pursuant to the Indenture;

         (g) Whether or not the transactions contemplated in this Agreement are
         consummated or this Agreement is terminated, to pay or cause to be paid
         all expenses incident to the performance of the obligations of the
         Issuers and the Subsidiary Guarantors under this Agreement, including:

                  (i) the fees, disbursements and expenses of counsel to the
                  Issuers and the Subsidiary Guarantors and accountants of the
                  Issuers and the Subsidiary Guarantors in connection with the
                  sale and delivery of the Series A Notes to the Initial
                  Purchasers and pursuant to Exempt Resales, and all other fees
                  and expenses in connection with the preparation, printing,
                  filing and distribution of the Offering Memorandum and all
                  amendments and supplements to any of the foregoing (including
                  financial statements), including the mailing and delivery of
                  copies thereof to the Initial Purchasers and persons
                  designated by them in the quantities specified herein,

                  (ii) all costs and expenses related to the transfer and
                  delivery of the Series A Notes to the Initial Purchasers and
                  pursuant to Exempt Resales, including any transfer or other
                  taxes payable thereon,

                  (iii) all costs of printing or producing this Agreement, the
                  other Operative Documents and any other agreements or
                  documents in connection with the offering, purchase, sale or
                  delivery of the Series A Notes,

                  (iv) all expenses in connection with the registration or
                  qualification of the Series A Notes and the Series A
                  Guarantees for offer and sale under the securities or Blue Sky
                  laws of the several states and all costs of printing or
                  producing any preliminary and supplemental Blue Sky memoranda
                  in connection therewith (including the filing fees and fees
                  and disbursements of counsel for the Initial Purchasers in
                  connection with such registration or qualification and
                  memoranda relating thereto),

                  (v) the cost of printing certificates representing the Series
                  A Notes and the Series A Guarantees,

                  (vi) all expenses and listing fees in connection with the
                  application for quotation of the Series A Notes in the
                  National Association of Securities Dealers, Inc. ("NASD")
                  Automated Quotation System - PORTAL ("PORTAL"),

                  (vii) the fees and expenses of the Trustee and the Trustee's
                  counsel in connection with the Indenture, the Notes and the
                  Guarantees,

                  (viii) the costs and charges of any transfer agent, registrar
                  and/or depositary (including DTC),

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                  (ix) any fees charged by rating agencies for the rating of the
                  Notes,

                  (x) all costs and expenses of the Exchange Offer and any
                  Registration Statement, as set forth in the Registration
                  Rights Agreement, and

                  (xi) all other costs and expenses incident to the performance
                  of the obligations of the Issuers and the Subsidiary
                  Guarantors hereunder for which provision is not otherwise made
                  in this Section;

         (h) To use its best efforts to effect the inclusion of the Series A
         Notes in PORTAL and to maintain the listing of the Series A Notes on
         PORTAL for so long as the Series A Notes are outstanding;

         (i) To obtain the approval of DTC for "book-entry" transfer of the
         Notes, and to comply with all of its agreements set forth in the
         representation letters of the Issuers and the Subsidiary Guarantors to
         DTC relating to the approval of the Notes by DTC for "book-entry"
         transfer;

         (j) During the period beginning on the date hereof and continuing to
         and including the Closing Date, not to offer, sell, contract to sell or
         otherwise transfer or dispose of any debt securities of each of the
         Issuers or any Subsidiary Guarantor or any warrants, rights or options
         to purchase or otherwise acquire debt securities of the Issuers or any
         Subsidiary Guarantor substantially similar to the Notes and the
         Guarantees (other than (i) the Notes and the Guarantees, (ii)
         commercial paper issued in the ordinary course of business and (iii)
         the incurrence of debt in connection with the Credit Facility, the EPN
         Holding Term Loan and the Acquisition Loan) without the prior written
         consent of J.P. Morgan Securities Inc. As used herein, the term "Credit
         Facility" means the Sixth Amended and Restated Credit Agreement among
         the Partnership, El Paso Finance, the several lenders from time to time
         parties thereto, Credit Lyonnais New York Branch and Wachovia Bank,
         National Association, as Co-Syndication Agents, Fleet National Bank and
         Fortis Capital Corp., as Co-Documentation Agents, and JPMorgan Chase
         Bank, as Administrative Agent, dated as of March 23, 1995, as amended
         and restated through October 10, 2002, and the collateral documents
         related thereto. As used herein, the term "EPN Holding Term Loan" means
         the Amended and Restated Credit Agreement among EPN Holding Company,
         L.P., the Lenders party thereto, Banc One Capital Markets, Inc. and
         Wachovia Bank, National Association, as Co-Syndication Agents, Fleet
         National Bank and Fortis Capital Corp., as Co-Documentation Agents, and
         JPMorgan Chase Bank, as Administrative Agent, dated as of April 8,
         2002, as amended and restated through October 10, 2002, and the related
         collateral documents. As used herein, the term "Acquisition Loan" means
         the acquisition term loan to be entered into by the Partnership in
         connection with the San Juan Acquisition, and the related collateral
         documents.

         (k) Not to sell, offer for sale or solicit offers to buy or otherwise
         negotiate in respect of any security (as defined in the Act) that would
         be integrated with the sale of the Series A Notes to the Initial
         Purchasers or pursuant to Exempt Resales in a manner that would require
         the registration of any such sale of the Series A Notes under the Act;

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         (l) Not to voluntarily claim, and to actively resist any attempts to
         claim, the benefit of any usury laws against the holders of any Notes
         and the related Guarantees;

         (m) To comply with all of its agreements set forth in the Registration
         Rights Agreement;

         (n) To use its best efforts to do and perform all things required or
         necessary to be done and performed under this Agreement by it prior to
         the Closing Date and to satisfy all conditions precedent to the
         delivery of the Series A Notes and the Series A Guarantees; and

         (o) Promptly following the Closing Date, apply the proceeds from the
         issuance and sale of the Series A Notes as described in the Offering
         Memorandum under "Use of Proceeds."

6.       Representations, Warranties and Agreements of the Partnership, El Paso
         Finance and the Subsidiary Guarantors. As of the date hereof, each of
         the Partnership, El Paso Finance and the Subsidiary Guarantors
         represents and warrants to, and agrees with, the Initial Purchasers as
         to the following:

         (a) the Offering Memorandum does not, and any supplement or amendment
         to it will not, contain any untrue statement of a material fact or omit
         to state any material fact required to be stated therein or necessary
         to make the statements therein, in the light of the circumstances under
         which they were made, not misleading, except that the representations
         and warranties contained in this paragraph (a) shall not apply to
         statements in or omissions from the Offering Memorandum (or any
         supplement or amendment thereto) based upon information relating to the
         Initial Purchasers furnished to the Issuers in writing by the Initial
         Purchasers expressly for use therein. The parties hereto acknowledge
         and agree that for purposes of this Agreement, including this Section
         6(a) and Section 8(b) hereof, the only information furnished to the
         Issuers in writing by the Initial Purchasers expressly for use in the
         Offering Memorandum (or any amendment or supplement to it) is the
         information set forth in the third paragraph, the fifth and sixth
         sentences in the ninth paragraph, and the eleventh paragraph under the
         caption "Plan of Distribution" in the Offering Memorandum. Furthermore,
         the parties hereto acknowledge that for purposes of this Agreement,
         including this Section 6(a) and Section 8(b) hereof, the Initial
         Purchasers shall not be deemed to have provided any information (and
         therefore are not responsible for any statements or omissions)
         pertaining to any arrangement or agreement with respect to any party
         other than the Initial Purchasers. No stop order preventing the use of
         the Offering Memorandum, or any amendment or supplement thereto, or any
         order asserting that any of the transactions contemplated by this
         Agreement are subject to the registration requirements of the Act, has
         been issued.

         (b) Each of the Partnership and its Restricted Subsidiaries (as defined
         in the Offering Memorandum), the San Juan Subsidiaries (as defined in
         Section 6(g) hereof) which, upon consummation of the San Juan
         Acquisition (as defined in Section 9(n) hereof), would constitute
         Restricted Subsidiaries of the Partnership (the "San Juan Restricted
         Subsidiaries"), and El Paso Finance, as applicable, has been duly
         formed or incorporated, is validly existing as a partnership,
         corporation, business trust or limited liability

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         company in good standing under the laws of their respective
         jurisdictions of formation or incorporation and has, and upon
         consummation of the San Juan Acquisition will have, the partnership,
         corporate, trust or limited liability company power and authority to
         carry on their respective businesses as described in the Offering
         Memorandum and to own, lease and operate their respective properties,
         and each (other than the general partnerships) is, and upon
         consummation of the San Juan Acquisition will be, duly qualified and
         is, and upon consummation of the San Juan Acquisition will be, in good
         standing as a foreign limited partnership, corporation, business trust
         or limited liability company authorized to do business in each
         jurisdiction in which the nature of each of their businesses or their
         ownership or leasing of property requires such qualification, except
         where the failure to be so qualified could reasonably be expected not
         to have a material adverse effect on the business, financial condition
         or results of operations of the Partnership, its subsidiaries and El
         Paso Finance and, upon consummation of the San Juan Acquisition, the
         San Juan Businesses (as defined in Section 6(aa) hereof), taken as a
         whole (a "Material Adverse Effect").

         (c) El Paso Energy Partners Company, a Delaware corporation, (the
         "General Partner") has been duly incorporated and is validly existing
         in good standing under the laws of the State of Delaware with full
         corporate power and authority to carry on its businesses; to own, lease
         and operate its properties; and to act as the general partner of the
         Partnership in all material respects as described in the Offering
         Memorandum. The General Partner is duly qualified and is in good
         standing as a foreign corporation authorized to do business in each
         jurisdiction in which the nature of its businesses or its ownership or
         leasing of property requires such qualification, except where the
         failure to be so qualified could reasonably be expected not to (i) have
         a Material Adverse Effect, or (ii) subject the limited partners of the
         Partnership to any material liability or disability.

         (d) All of the issued and outstanding shares of capital stock of the
         General Partner have been duly and validly authorized and issued and
         are fully paid and nonassessable, and are owned by DeepTech
         International Inc. ("DeepTech") free and clear of any lien, adverse
         claim, security interest equity or other encumbrance (each, a "Lien"),
         except for any Permitted Encumbrances. DeepTech is a wholly-owned
         subsidiary of El Paso Corporation. As used herein "Permitted
         Encumbrances" means any lien or adverse claim established by or under
         (i) the Credit Facility, (ii) the credit agreement to which Poseidon
         Oil Pipeline Company, L.L.C., a Delaware limited liability company in
         which a Subsidiary of the Partnership owns a 36% membership interest,
         is party, and the collateral documents related thereto, (iii) the
         credit agreement to which Deepwater Gateway, L.L.C., a Delaware limited
         liability company in which a Subsidiary of the Partnership owns a 50%
         membership interest, is party, and the collateral documents related
         thereto, (iv) the financing arrangements to which Sabine I and Sabine
         II (each as defined below) are parties, and the collateral documents
         related thereto, (v) the EPN Holding Term Loan, (vi) the Acquisition
         Term Loan, (vii) the indenture into which the Partnership entered on
         May 27, 1999, as amended and supplemented, (viii) the indenture into
         which the Partnership entered on May 17, 2001, as amended and
         supplemented and (ix) the Indenture, as amended and supplemented.

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         (e) All outstanding shares of capital stock or partnership interests of
         El Paso Finance or the Partnership, as applicable, have been duly
         authorized and validly issued and are fully paid, non-assessable
         (except, in the case of the partnership interests of the Partnership,
         to the extent set forth in Section 17-303 of the Delaware Revised
         Uniform Limited Partnership Act (the "DRULPA")) and not subject to any
         preemptive or similar rights except as otherwise set forth in the
         Partnership Agreement and disclosed in the Offering Memorandum.

         (f) The entities listed on Schedule C hereto are the only subsidiaries,
         direct or indirect, of the Partnership. All of the outstanding shares
         of capital stock, limited partner interests, general partner interests
         or limited liability company interests or other equity interests of
         each of the Partnership's subsidiaries have been duly authorized and
         validly issued and are fully paid and (except (i) as required to the
         contrary by the Delaware Limited Liability Company Act and DRULPA and
         (ii) with respect to any general partner interests) non-assessable, and
         except as otherwise set forth in the Offering Memorandum (exclusive of
         any supplement or amendment) or on Schedule C are owned by the
         Partnership, directly or indirectly through one or more wholly-owned
         subsidiaries or the General Partner, free and clear of any Lien, other
         than Permitted Encumbrances.

         (g) The entities listed on Schedule D hereto are the corporations,
         associations, limited liability companies, trusts, partnerships and
         other legal entities in which the Partnership will acquire a direct or
         indirect controlling interest in the San Juan Acquisition (the "San
         Juan Subsidiaries"). All of the outstanding shares of capital stock,
         limited partner interests, general partner interests or limited
         liability company interests or other equity interests of each of the
         San Juan Subsidiaries have been duly authorized and validly issued and
         are fully paid and (except (i) as required to the contrary by the
         Delaware Limited Liability Company Act and DRULPA and (ii) with respect
         to any general partner interests) non-assessable, and except as
         otherwise set forth in the Offering Memorandum (exclusive of any
         supplement or amendment) or on Schedule D will be owned by the
         Partnership, directly or indirectly through one or more wholly-owned
         subsidiaries or the General Partner, free and clear of any Lien, other
         than Permitted Encumbrances.

         (h) The General Partner is the sole general partner of the Partnership
         with a 1.0% general partner interest in the Partnership, and such
         general partner interest is duly authorized and validly issued to the
         General Partner in accordance with the Second Amended and Restated
         Agreement of Limited Partnership of El Paso Energy Partners, L.P. dated
         as of February 19, 1993 as amended and restated effective as of August
         31, 2000 (as amended, the "Partnership Agreement"). The Partnership
         Agreement has been duly authorized, executed and delivered by the
         General Partner and is a valid and legally binding agreement of the
         General Partner, enforceable against the General Partner in accordance
         with its terms, except as (i) the enforceability thereof may be limited
         by bankruptcy, insolvency or similar laws affecting creditors' rights
         generally and (ii) rights of acceleration and the availability of
         equitable remedies may be limited by equitable principles of general
         applicability. The General Partner owns such general partner interest
         free and clear of any Lien, other than Permitted Encumbrances.

                                       10
<PAGE>
         (i) The General Partner, El Paso Field Services Holding Company ("EPFS
         Holding"), Sabine River Investors I, L.L.C. ("Sabine I") and Sabine
         River Investors II, L.L.C. ("Sabine II") own limited partner interests
         in the Partnership represented by 11,674,245 common units ("Common
         Units"); all of such Common Units and the limited partner interests
         represented thereby have been duly authorized and validly issued and
         are fully paid (to the extent required by the Partnership Agreement)
         and nonassessable (except (i) as required to the contrary by DRULPA and
         (ii) as such nonassessability may be affected by matters described in
         the Offering Memorandum); and the General Partner and its affiliates
         own such limited partner interests free and clear of any Lien, other
         than Permitted Encumbrances.

         (j) This Agreement has been duly authorized, executed and delivered by
         each of the Issuers and each of the Subsidiary Guarantors and
         constitutes a valid and binding obligation of each of the Issuers and
         each of the Subsidiary Guarantors, enforceable in accordance with its
         terms, except as (i) the enforceability thereof may be limited by
         bankruptcy, insolvency or similar laws affecting creditors' rights
         generally and (ii) rights of acceleration and the availability of
         equitable remedies may be limited by equitable principles of general
         applicability.

         (k) The Indenture has been duly authorized by each of the Issuers and
         each of the Subsidiary Guarantors and, on the Closing Date, will have
         been validly executed and delivered by each of the Issuers and each of
         the Subsidiary Guarantors and will be a valid and binding agreement of
         each of the Issuers and each of the Subsidiary Guarantors, enforceable
         against each of the Issuers and each of the Subsidiary Guarantors in
         accordance with its terms, except as (i) the enforceability thereof may
         be limited by bankruptcy, insolvency or similar laws affecting
         creditors' rights generally and (ii) rights of acceleration and the
         availability of equitable remedies may be limited by equitable
         principles of general applicability. The Indenture conforms in all
         material respects to the requirements of the Trust Indenture Act of
         1939, as amended (the "TIA"), and the rules and regulations of the
         Commission applicable to an indenture which is qualified thereunder.

         (l) The Series A Notes have been duly authorized and, on the Closing
         Date, will have been validly executed and delivered by each of the
         Issuers. When the Series A Notes have been issued, executed and
         authenticated in accordance with the provisions of the Indenture and
         delivered to and paid for by the Initial Purchasers in accordance with
         the terms of this Agreement, the Series A Notes will be entitled to the
         benefits of the Indenture and will be valid and binding obligations of
         the Issuers, enforceable in accordance with their terms, except as (i)
         the enforceability thereof may be limited by bankruptcy, insolvency or
         similar laws affecting creditors' rights generally and (ii) rights of
         acceleration and the availability of equitable remedies may be limited
         by equitable principles of general applicability. On the Closing Date,
         the Series A Notes will conform as to legal matters to the description
         thereof contained in the Offering Memorandum.

         (m) On the Closing Date, the Series B Notes will have been duly
         authorized by each of the Issuers. When the Series B Notes are issued,
         executed and authenticated in accordance with the terms of the Exchange
         Offer and the Indenture, the Series B Notes

                                       11
<PAGE>

         will be entitled to the benefits of the Indenture and will be the valid
         and binding obligations of the Issuers, enforceable against the Issuers
         in accordance with their terms, except as (i) the enforceability
         thereof may be limited by bankruptcy, insolvency or similar laws
         affecting creditors' rights generally and (ii) rights of acceleration
         and the availability of equitable remedies may be limited by equitable
         principles of general applicability.

         (n) The Series A Guarantee to be endorsed on the Series A Notes by each
         Subsidiary Guarantor has been duly authorized by such Subsidiary
         Guarantor and, on the Closing Date, will have been duly executed and
         delivered by each such Subsidiary Guarantor. When the Series A Notes
         have been issued, executed and authenticated in accordance with the
         Indenture and delivered to and paid for by the Initial Purchasers in
         accordance with the terms of this Agreement, the Series A Guarantee of
         each Subsidiary Guarantor endorsed thereon will be entitled to the
         benefits of the Indenture and will be the valid and binding obligation
         of such Subsidiary Guarantor, enforceable against such Subsidiary
         Guarantor in accordance with its terms, except as (i) the
         enforceability thereof may be limited by bankruptcy, insolvency or
         similar laws affecting creditors' rights generally and (ii) rights of
         acceleration and the availability of equitable remedies may be limited
         by equitable principles of general applicability. On the Closing Date,
         the Series A Guarantees to be endorsed on the Series A Notes will
         conform as to legal matters to the description thereof contained in the
         Offering Memorandum.

         (o) The Series B Guarantee to be endorsed on the Series B Notes by each
         Subsidiary Guarantor has been duly authorized by such Subsidiary
         Guarantor and, when issued, will have been duly executed and delivered
         by each such Subsidiary Guarantor. When the Series B Notes have been
         issued, executed and authenticated in accordance with the terms of the
         Exchange Offer and the Indenture, the Series B Guarantee of each
         Subsidiary Guarantor endorsed thereon will be entitled to the benefits
         of the Indenture and will be the valid and binding obligation of such
         Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
         accordance with its terms, except as (i) the enforceability thereof may
         be limited by bankruptcy, insolvency or similar laws affecting
         creditors' rights generally and (ii) rights of acceleration and the
         availability of equitable remedies may be limited by equitable
         principles of general applicability. When the Series B Notes are
         issued, authenticated and delivered, the Series B Guarantees to be
         endorsed on the Series B Notes will conform as to legal matters to the
         description thereof in the Offering Memorandum.

         (p) The Registration Rights Agreement has been duly authorized by each
         of the Issuers and each of the Subsidiary Guarantors and, on the
         Closing Date, will have been duly executed and delivered by each of the
         Issuers and each of the Subsidiary Guarantors. When the Registration
         Rights Agreement has been duly executed and delivered, the Registration
         Rights Agreement will be a valid and binding agreement of each of the
         Issuers and each of the Subsidiary Guarantors, enforceable against each
         of the Issuers and each of the Subsidiary Guarantors in accordance with
         its terms, except as (i) the enforceability thereof may be limited by
         bankruptcy, insolvency or similar laws affecting creditors' rights
         generally and (ii) rights of acceleration and the availability of
         equitable remedies may be limited by equitable principles of general
         applicability. On the Closing

                                       12
<PAGE>

         Date, the Registration Rights Agreement will conform as to legal
         matters to the description thereof in the Offering Memorandum.

         (q) Neither the Issuers nor any of their subsidiaries nor any of the
         San Juan Subsidiaries is, or upon consummation of the San Juan
         Acquisition will be, in violation of its respective limited partnership
         agreement, limited liability company agreement, charter, by-laws or
         similar organizational document or in default in the performance of any
         obligation, agreement, covenant or condition contained in any
         indenture, loan agreement, mortgage, lease or other agreement or
         instrument that is, or upon consummation of the San Juan Acquisition
         will be, material to the Issuers and their subsidiaries, taken as a
         whole, to which the Issuers or any of their subsidiaries or the San
         Juan Subsidiaries is, or upon consummation of the San Juan Acquisition
         will be, a party or by which the Issuers or any of their subsidiaries
         or the San Juan Subsidiaries or their respective property or the San
         Juan Assets (as defined in Section 9(n) hereof) is, or upon the
         consummation of the San Juan Acquisition will be, bound, except with
         respect to any such indenture, loan agreement, mortgage, lease or other
         agreement or instrument, any default which could reasonably be expected
         not to have a Material Adverse Effect.

         (r) The execution, delivery and performance of this Agreement and the
         other Operative Documents by each of the Issuers and each of the
         Subsidiary Guarantors, compliance by each of the Issuers and each of
         the Subsidiary Guarantors with all provisions hereof and thereof and
         the consummation of the transactions contemplated hereby and thereby
         did not and will not (whether upon consummation of the San Juan
         Acquisition or otherwise) and did not (i) require any consent,
         approval, authorization, filing with or other order of, or
         qualification with, any court or governmental body or agency (except
         such as may be required under the securities or Blue Sky laws of the
         various states or, with respect to the proposed offer to exchange the
         Exchange Notes for the Notes, the federal securities laws), (ii)
         conflict with or constitute a breach of any of the terms or provisions
         of, or a default under, the limited partnership agreement, limited
         liability company agreement, charter, by-laws or similar organizational
         document of the Partnership or any of its Restricted Subsidiaries, the
         San Juan Restricted Subsidiaries or El Paso Finance (collectively, the
         "Organizational Documents") or any existing indenture, loan agreement,
         mortgage, lease or other agreement or instrument that is material to
         the Partnership and its Restricted Subsidiaries, the San Juan
         Businesses and El Paso Finance, taken as a whole, to which the
         Partnership or any of its Restricted Subsidiaries, the San Juan
         Restricted Subsidiaries or El Paso Finance is, or upon consummation of
         the San Juan Acquisition will be, a party or by which the Partnership
         or any of its Restricted Subsidiaries, the San Juan Restricted
         Subsidiaries or El Paso Finance or their respective property is, or
         upon consummation of the San Juan Acquisition will be, bound, (iii)
         violate or conflict with any applicable existing law or any rule,
         regulation, judgment, order or decree of any court or any governmental
         body or agency having jurisdiction over the Partnership or any of its
         Restricted Subsidiaries, the San Juan Restricted Subsidiaries or El
         Paso Finance or their respective property or the San Juan Assets, (iv)
         result in the imposition or creation of (or the obligation to create or
         impose) a Lien under, any existing agreement or instrument to which the
         Partnership or any of its Restricted Subsidiaries, the San Juan
         Restricted Subsidiaries or El Paso Finance is, or upon the consummation
         of the San Juan Acquisition will be, a party or by which the
         Partnership or any of its Restricted

                                       13
<PAGE>

         Subsidiaries, the San Juan Restricted Subsidiaries or El Paso Finance
         or their respective property is, or upon the consummation of the San
         Juan Acquisition will be, bound, other than the Acquisition Loan or (v)
         result in the termination, suspension or revocation of any existing
         Authorization (as defined below) of the Partnership or any of its
         Restricted Subsidiaries, the San Juan Restricted Subsidiaries or El
         Paso Finance, or included in the San Juan Assets, or result in any
         other impairment of the rights of the holder of any such Authorization,
         except (other than in the case of clause (ii) above with respect to
         Organizational Documents) to the extent they could reasonably be
         expected not to have a Material Adverse Effect.

         (s) No action, suit or governmental proceedings by or before any court
         or governmental agency, authority or body is pending or, to our
         knowledge, threatened to which the Partnership or any of its Restricted
         Subsidiaries or El Paso Finance or any of the San Juan Subsidiaries is
         or could be a party or to which any of their respective property or the
         San Juan Assets is or could be subject, except for such proceedings
         which, singly or in the aggregate, could reasonably be expected not to
         result in a Material Adverse Effect and except as set forth in the
         Offering Memorandum.

         (t) The Partnership, its Restricted Subsidiaries, the San Juan
         Restricted Subsidiaries and El Paso Finance are, and upon consummation
         of the San Juan Acquisition will be, (i) in compliance with any and all
         foreign, federal, state or local law or regulation relating to the
         protection of human health and safety, the environment or hazardous or
         toxic substances or wastes, pollutants or contaminants ("Environmental
         Laws"), (ii) have received and are in compliance with all permits,
         licenses or other approvals required of them under applicable
         Environmental Laws to conduct their respective businesses and (iii)
         have not received notice of any actual or potential liability under the
         Environmental Laws, in the case of (i) through (iii), except where such
         non-compliance or liability, singly or in the aggregate, could
         reasonably be expected not to result in a Material Adverse Effect. None
         of the Partnership, its Restricted Subsidiaries, the San Juan
         Restricted Subsidiaries or El Paso Finance have been named as a
         "potentially responsible party" under the Comprehensive Environmental
         Response, Compensation, and Liability Act of 1980, as amended
         ("CERCLA"). The Partnership, its Restricted Subsidiaries, the San Juan
         Restricted Subsidiaries and El Paso Finance are not in violation of any
         provisions of the Employee Retirement Income Security Act of 1974, as
         amended ("ERISA"), or any provisions of the Foreign Corrupt Practices
         Act or the rules and regulations promulgated thereunder, except for
         such violations which, singly or in the aggregate, could reasonably be
         expected not to result in a Material Adverse Effect.

         (u) There are no costs or liabilities associated with Environmental
         Laws (including, without limitation, any capital or operating
         expenditures required for clean-up, closure of properties or compliance
         with Environmental Laws or any Authorization, any related constraints
         on operating activities and any potential liabilities to third parties)
         which, singly or in the aggregate, could reasonably be expected to
         result in a Material Adverse Effect.

         (v) Each of the Partnership and its Restricted Subsidiaries, the San
         Juan Restricted Subsidiaries and El Paso Finance has, and upon
         consummation of the San Juan

                                       14
<PAGE>
         Acquisition will have, such permits, licenses, consents, exemptions,
         franchises, authorizations and other approvals (each, an
         "Authorization") of, and has made, and upon consummation of the San
         Juan Acquisition will have made, all filings with and notices to, all
         governmental or regulatory authorities and self-regulatory
         organizations and all courts and other tribunals, including without
         limitation, under any applicable Environmental Laws, as are necessary
         to own, lease, license and operate its respective properties and to
         conduct its business, except where the failure to have any such
         Authorization or to make any such filing or notice could, singly or in
         the aggregate, reasonably be expected not to have a Material Adverse
         Effect. Each such Authorization is, and upon consummation of the San
         Juan Acquisition will be, valid and in full force and effect and each
         of the Partnership and its Restricted Subsidiaries, the San Juan
         Restricted Subsidiaries and El Paso Finance is, and upon consummation
         of the San Juan Acquisition will be, in compliance with all the terms
         and conditions thereof and with the rules and regulations of the
         authorities and governing bodies having jurisdiction with respect
         thereto; and no event has occurred (including, without limitation, the
         receipt of any notice from any authority or governing body) which
         allows or, after notice or lapse of time or both, would allow,
         revocation, suspension or termination of any such Authorization or
         results or, after notice or lapse of time or both, would result in any
         other impairment of the rights of the holder of any such Authorization;
         and such Authorizations contain no restrictions that are, or upon
         consummation of the San Juan Acquisition will be, burdensome to the
         Partnership or any of its Restricted Subsidiaries, the San Juan
         Restricted Subsidiaries or El Paso Finance; except where such failure
         to be valid and in full force and effect or to be in compliance, the
         occurrence of any such event or the presence of any such restriction
         could, singly or in the aggregate, reasonably be expected not to have a
         Material Adverse Effect.

         (w) Each of the Partnership and its Restricted Subsidiaries and El Paso
         Finance owns or leases all such properties as are necessary to the
         conduct of its operations as presently conducted, except where the lack
         of ownership or leasing would not, individually or in the aggregate,
         have a Material Adverse Effect.

         (x) Each of the Partnership and its Restricted Subsidiaries, the San
         Juan Restricted Subsidiaries and El Paso Finance has, or at the Closing
         Date will have, and upon the consummation of the San Juan Acquisition
         will have, such consents, easements, right-of-way or licenses from any
         person ("rights-of-way") as are necessary to conduct its business in
         the manner described in the Offering Memorandum, subject to such
         qualifications as may be set forth in the Offering Memorandum and
         except for such rights-of-way which, if not obtained, could, singly or
         in the aggregate, reasonably be expected not to have a Material Adverse
         Effect; each of the Partnership and its subsidiaries, the San Juan
         Restricted Subsidiaries and El Paso Finance has, or at the Closing Date
         will have, and upon consummation of the San Juan Acquisition will have,
         fulfilled and performed all its material obligations with respect to
         such rights-of-way and no event has occurred which allows, or after
         notice or lapse of time would allow, revocation or termination thereof
         or would result in any impairment of the rights of the holder of any
         such rights-of-way, except for such revocations, terminations and
         impairments that could reasonably be expected not to have a Material
         Adverse Effect, subject in each case to such qualifications as may be
         set forth in the Offering

                                       15
<PAGE>

         Memorandum; and except as described in the Offering Memorandum, none of
         such rights-of-way contains any restriction that is, or upon
         consummation of the San Juan Acquisition will be, materially burdensome
         to the Partnership and its subsidiaries, the San Juan Subsidiaries and
         El Paso Finance considered as a whole.

         (y) The accountants, PricewaterhouseCoopers LLP, that have certified
         financial statements and supporting schedules included in the Offering
         Memorandum are independent public accountants with respect to the
         Issuers, the Subsidiary Guarantors and Poseidon Oil Pipeline Company,
         L.L.C., as required by the Act and the Exchange Act. The historical
         financial statements, together with related schedules and notes, set
         forth in the Offering Memorandum comply as to form in all material
         respects with the requirements applicable to registration statements on
         Form S-3 under the Act.

         (z) The historical financial statements, together with related
         schedules and notes, forming part of the Offering Memorandum (and any
         amendment or supplement thereto), present fairly the consolidated
         financial position, results of operations and changes in financial
         position of the Partnership and its subsidiaries (including El Paso
         Finance) on the basis stated in the Offering Memorandum at the
         respective dates or for the respective periods to which they apply;
         such statements and related schedules and notes have been prepared in
         accordance with generally accepted accounting principles consistently
         applied throughout the periods involved, except as disclosed therein;
         and the other financial and statistical information and data set forth
         in the Offering Memorandum (and any amendment or supplement thereto)
         are, in all material respects, accurately presented and prepared on a
         basis consistent with such financial statements and the books and
         records of the Partnership and El Paso Finance.

         (aa) The historical financial statements of El Paso Field Services' San
         Juan Gathering and Processing Businesses, Typhoon Gas Pipeline, Typhoon
         Oil Pipeline and Coastal Liquids Partners' NGL Business (the "San Juan
         Businesses"), together with related schedules and notes, forming part
         of the Offering Memorandum (and any amendment or supplement thereto),
         present fairly the consolidated financial position, results of
         operations and changes in financial position of the San Juan Businesses
         on the basis stated in the Offering Memorandum at the respective dates
         or for the respective periods to which they apply; such statements and
         related schedules and notes have been prepared in accordance with
         generally accepted accounting principles consistently applied
         throughout the periods involved, except as disclosed therein.

         (bb) The pro forma financial statements included in the Offering
         Memorandum have been prepared on a basis consistent with the historical
         financial statements of the Partnership and its subsidiaries and El
         Paso Finance and give effect to assumptions used in the preparation
         thereof on a reasonable basis and in good faith and present fairly the
         historical and proposed transactions contemplated by the Offering
         Memorandum; and such pro forma financial statements comply as to form
         in all material respects with the requirements applicable to pro forma
         financial statements included in registration statements on Form S-3
         under the Act. The other pro forma financial and statistical
         information and data included in the Offering Memorandum are, in all
         material respects,

                                       16
<PAGE>

         accurately presented and prepared on a basis consistent with the pro
         forma financial statements.

         (cc) Neither of the Issuers nor any of the Partnership's Restricted
         Subsidiaries nor any of the San Juan Restricted Subsidiaries is and,
         after giving effect to the offering and sale of the Series A Notes, the
         application of the net proceeds thereof as described in the Offering
         Memorandum and the San Juan Acquisition, neither of the Issuers will
         be, an "investment company," as such term is defined in the Investment
         Company Act of 1940, as amended or a "holding company" within the
         meaning of, or subject to regulation under, the Public Utility Holding
         Company Act of 1935, as amended, and the rules and regulations
         promulgated by the Commission thereunder.

         (dd) There are, and upon consummation of the San Juan Acquisition will
         be, no contracts, agreements or understandings between the Issuers or
         any Subsidiary Guarantor or any San Juan Restricted Subsidiary, on the
         one hand, and any person, on the other hand, granting such person the
         right to require the Issuers or such Subsidiary Guarantor or such San
         Juan Restricted Subsidiary to file a registration statement under the
         Act with respect to any securities of the Issuers or such Subsidiary
         Guarantor or such San Juan Restricted Subsidiary other than the rights
         (i) of the General Partner and its affiliates in Section 6.14 of the
         Partnership Agreement and in the Registration Rights Agreement to be
         executed upon the closing of the San Juan Acquisition pursuant to the
         San Juan Agreement (the "Series C RRA"); (ii) of EPEC Deepwater
         Gathering Company ("EPEC") and its successors pursuant to a
         registration rights agreement between EPEC and the Partnership executed
         in connection with the acquisition by the Partnership of an additional
         interest in Viosca Knoll Gathering Company; (iii) of Crystal Gas
         Storage, Inc. pursuant to the registration rights agreement between
         Crystal Gas Storage, Inc. and the Partnership which was executed in
         connection with the acquisition by the Partnership of the Crystal
         storage facilities; provided, however, that with respect to (i), (ii)
         and (iii) above, the General Partner, EPEC, Sabine I, Sabine II and
         Crystal Gas Storage, Inc. have agreed not to exercise their rights with
         respect to such securities in connection with the offering of the Notes
         for 90 days hereafter pursuant to letter agreements of even date
         herewith; (iv) granted under the Credit Facility, EPN Holding Term
         Loan, the Acquisition Loan and related agreements; and (v) granted
         under the Registration Rights Agreement. There are, and upon
         consummation of the San Juan Acquisition will be, no contracts,
         agreements or understandings between the Issuers or any Subsidiary
         Guarantor or any San Juan Restricted Subsidiary, on the one hand, and
         any person, on the other hand, granting such person the right to
         require the Issuers or such Subsidiary Guarantor or such San Juan
         Restricted Subsidiary to include such securities with the Notes and
         Guarantees registered pursuant to any Registration Statement, other
         than the rights of the General Partner and its affiliates in Section
         6.14 of the Partnership Agreement (which rights have been waived in
         connection with any Registration Statement filed pursuant to the
         Registration Rights Agreement).

         (ee) Neither the Partnership nor any of its subsidiaries nor El Paso
         Finance nor any agent thereof acting on the behalf of them has taken,
         and none of them will take, any action that might cause this Agreement
         or the issuance or sale of the Series A Notes to violate Regulation T
         (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or

                                       17
<PAGE>

         Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
         Federal Reserve System.

         (ff) No "nationally recognized statistical rating organization" as such
         term is defined for purposes of Rule 436(g)(2) under the Act (i) has
         imposed (or has informed the Issuers or any Subsidiary Guarantor that
         it is considering imposing) any condition (financial or otherwise) on
         the Issuers' or any Subsidiary Guarantor's or any San Juan Restricted
         Subsidiary's retaining any rating assigned to the Issuers or any
         Subsidiary Guarantor or any San Juan Restricted Subsidiary, any
         securities of the Issuer or any Subsidiary Guarantor or any San Juan
         Restricted Subsidiary or (ii) has indicated to the Issuers or any
         Subsidiary Guarantor or any San Juan Restricted Subsidiary that it is
         considering (a) the downgrading, suspension, or withdrawal of, or any
         review for a possible change that does not indicate the direction of
         the possible change in, any rating so assigned or (b) any change in the
         outlook for any rating of the Issuers, any Subsidiary Guarantor , any
         San Juan Restricted Subsidiary or any securities of the Issuers or any
         Subsidiary Guarantor or any San Juan Restricted Subsidiary, other than,
         in the case of this cause (ii), any such downgrading, suspension,
         withdrawal, review or change that has been publicly announced by such
         organization as of the time of the execution of this Agreement.

         (gg) Since the respective dates as of which information is given in the
         Offering Memorandum other than as set forth in the Offering Memorandum
         (exclusive of any amendments or supplements thereto subsequent to the
         date of this Agreement), (i) there has not occurred any material
         adverse change or any development involving a prospective material
         adverse change in the condition, financial or otherwise, or the
         earnings, business, management or operations of the Partnership and its
         subsidiaries, the San Juan Businesses and El Paso Finance, taken as a
         whole, (ii) there has not been any material adverse change or any
         development involving a prospective material adverse change in the
         capital stock, limited liability company interests or partnership
         units, as applicable, or in the long-term debt of the Partnership or
         any of its subsidiaries, the San Juan Subsidiaries or El Paso Finance
         and (iii) neither the Partnership, any of its subsidiaries, the San
         Juan Subsidiaries nor El Paso Finance has incurred any material
         liability or obligation, direct or contingent.

         (hh) The Offering Memorandum, as of its date, contains all the
         information specified in, and meets all of the requirements of, Rule
         144A(d)(4) under the Act.

         (ii) The Offering Memorandum, as of its date, contains all of the
         information specified in, and complies in all material respects with,
         the applicable requirements of the Act as if such document were filed
         using a registration statement on Form S-3.

         (jj) Upon execution and delivery by the parties thereto, the Indenture
         will comply as to form in all material respects with the requirements
         of the TIA, and the rules and regulations of the Commission applicable
         to an indenture which is qualified thereunder. It is not necessary in
         connection with the offer, sale and delivery of the Series A Notes to
         the Initial Purchasers in the manner contemplated by this Agreement or
         in connection with the initial placement of the Series A Notes by the
         Initial Purchasers in the manner

                                       18
<PAGE>

         contemplated by the Offering Memorandum pursuant to Exempt Resales to
         qualify the Indenture under the TIA.

         (kk) The statements under the captions "Description of Notes,"
         "Description of Other Indebtedness," "United States Federal Income and
         Estate Tax Considerations" and "Plan of Distribution" in the Offering
         Memorandum, insofar as such statements purport to constitute a summary
         of the legal matters, documents or proceedings referred to therein,
         fairly present in all material respects such legal matters, documents
         and proceedings.

         (ll) When the Series A Notes and the Series A Guarantees are issued and
         delivered pursuant to this Agreement, neither the Series A Notes nor
         the Series A Guarantees will be of the same class (within the meaning
         of Rule 144A under the Act) as any security of the Issuers or the
         Subsidiary Guarantors or the San Juan Restricted Subsidiaries that is
         listed on a national securities exchange registered under Section 6 of
         the Exchange Act or that is quoted in a United States automated
         inter-dealer quotation system.

         (mm) No form of general solicitation or general advertising (as defined
         in Regulation D under the Act) was used by the Issuers, the Subsidiary
         Guarantors or any of their respective representatives (other than the
         Initial Purchasers, as to whom the Issuers and the Subsidiary
         Guarantors make no representation) in connection with the offer and
         sale of the Series A Notes contemplated hereby, including, but not
         limited to, articles, notices or other communications published in any
         newspaper, magazine, or similar medium or broadcast over television or
         radio, or any seminar or meeting whose attendees have been invited by
         any general solicitation or general advertising. No securities of the
         same class as the Series A Notes have been issued and sold by the
         Issuers within the six-month period immediately prior to the date
         hereof.

         (nn) It is not necessary to qualify the Indenture under the TIA in
         connection with the offering of the Series A Notes.

         (oo) None of the Issuers, the Subsidiary Guarantors nor any of their
         respective affiliates or any person acting on its or their behalf
         (other than the Initial Purchasers, as to whom the Issuers and the
         Subsidiary Guarantors make no representation) has engaged or will
         engage in any directed selling efforts within the meaning of Regulation
         S under the Act ("Regulation S") with respect to the Series A Notes or
         the Series A Guarantees.

         (pp) The Issuers, the Subsidiary Guarantors and their respective
         affiliates and all persons acting on their behalf (other than the
         Initial Purchasers, as to whom the Issuers and the Subsidiary
         Guarantors make no representation) have complied with and will comply
         with the offering restrictions requirements of Regulation S in
         connection with the offering of the Series A Notes outside the United
         States and, in connection therewith, the Offering Memorandum will
         contain the disclosure required by Regulation S.

         (qq) The Partnership is a "reporting issuer," as defined in Rule 902
         under the Act.

         (rr) The Series A Notes offered and sold in reliance on Regulation S
         have been and will be offered and sold only in offshore transactions.

                                       19
<PAGE>
         (ss) The sale of the Series A Notes pursuant to Regulation S is not
         part of a plan or scheme to evade the registration provisions of the
         Act.

         (tt) No registration under the Act of the Series A Notes or the
         Series A Guarantees is required for the sale of the Series A Notes and
         the Series A Guarantees to the Initial Purchasers as contemplated
         hereby or for the Exempt Resales assuming the accuracy of the Initial
         Purchasers' representations and warranties and agreements set forth in
         Section 7 hereof.

         (uu) Each certificate signed by any officer of the Issuers or any
         Subsidiary Guarantor and delivered to the Initial Purchasers or counsel
         for the Initial Purchasers shall be deemed to be a representation and
         warranty by the Issuers or such Subsidiary Guarantor to the Initial
         Purchasers as to the matters covered thereby.

         (vv) Except as otherwise set forth in the Offering Memorandum or such
         as are not material to the business, prospects, financial condition or
         results of operations of the Partnership and its subsidiaries and the
         San Juan Businesses (taken as a whole), and except for liens created by
         operation and maintenance agreements, space lease agreements and other
         similar types of agreements ordinary and customary to the operations of
         the General Partner, the Partnership and its subsidiaries, and the San
         Juan Subsidiaries, the Partnership and the Subsidiary Guarantors and
         the San Juan Restricted Subsidiaries have, and with respect to the San
         Juan Assets, will have upon the consummation of the San Juan
         Acquisition, good and defensible title to their interests in their oil
         and gas properties.

         (ww) The information which was supplied by the Partnership to
         Netherland, Sewell & Associates, Inc. ("Netherland & Sewell"),
         independent petroleum engineers, for purposes of evaluating the oil and
         gas reserves of the Partnership and the Subsidiary Guarantors as of
         December 31, 2001, including, without limitation, production, costs of
         operation and development, current prices for production, agreements
         relating to current and future operations and sales of production, was
         true and correct in all material respects on the dates such estimates
         were made and such information was supplied and was prepared in
         accordance with customary industry practices, as indicated in the
         letter of Netherland & Sewell dated January 28, 2002 (the "Netherland &
         Sewell Letter"); Netherland & Sewell was, as of the date of the
         Netherland & Sewell Letter, and is, as of the date hereof, independent
         with respect to the Partnership and the Subsidiary Guarantors; other
         than normal production of the reserves and intervening spot market
         product price fluctuations, the Partnership is not aware of any facts
         or circumstances that would result in a materially adverse change in
         the reserves, or the present value of future net cash flows therefrom,
         as described in the Offering Memorandum and as reflected in the
         Netherland & Sewell Letter and the reserve report referenced therein;
         estimates of such reserves and present values as described in the
         Offering Memorandum and reflected in the Netherland & Sewell Letter and
         the reserve report referenced therein comply in all material respects
         to the applicable requirements of Regulation S-X and Industry Guide 2
         under the Securities Act. For calendar years prior to 2002, the
         Partnership did not include as production costs in the reserve reports
         platform fees that it paid under its platform use agreements. Beginning
         in 2002 the Partnership will include platform costs as production

                                       20
<PAGE>

         costs for its reserve reports. The exclusion of such platform fees does
         not materially affect the Partnership's 2001 or prior financial
         statements.

         (xx) The Partnership and each of its subsidiaries and the San Juan
         Subsidiaries are, and upon consummation of the San Juan Acquisition
         will be, insured by insurers of recognized financial responsibility
         against such losses and risks and in such amounts as are prudent and
         customary in the businesses in which they are engaged; and neither the
         Partnership nor any of its subsidiaries nor any of the San Juan
         Subsidiaries (i) has received notice from any insurer or agent of such
         insurer that substantial capital improvements or other material
         expenditures will have to be made in order to continue such insurance
         or (ii) has any reason to believe that it will not be able to renew its
         existing insurance coverage as and when such coverage expires or to
         obtain similar coverage from similar insurers at a cost that could
         reasonably be expected not to have a Material Adverse Effect;

         (yy) Except as disclosed in the Offering Memorandum, no relationship,
         direct or indirect, exists, or will exist upon consummation of the San
         Juan Acquisition, between or among the Partnership or any of its
         subsidiaries on the one hand, and the directors, officers,
         stockholders, customers or suppliers of the Partnership or any of its
         subsidiaries, on the other hand, which would be required by the Act to
         be described in the Offering Memorandum if the Offering Memorandum were
         a prospectus included in a registration statement on Form S-1 filed
         with the Commission.

         (zz) There is no (i) significant unfair labor practice complaint,
         grievance or arbitration proceeding pending or threatened against the
         Partnership or any of its subsidiaries or any of the San Juan
         Subsidiaries before the National Labor Relations Board or any state or
         local labor relations board, (ii) strike, labor dispute, slowdown or
         stoppage pending or threatened against the Partnership or any of its
         subsidiaries or any of the San Juan Subsidiaries or (iii) union
         representation question existing with respect to the employees of the
         Partnership or any of its subsidiaries or any of the San Juan
         Subsidiaries, except in the case of clauses (i), (ii) and (iii) for
         such actions which, singly or in the aggregate, could reasonably be
         expected not to have a Material Adverse Effect. To the best knowledge
         of the Partnership, no collective bargaining organizing activities are
         taking place with respect to the Partnership or any of its subsidiaries
         or any of the San Juan Subsidiaries.

         (aaa) The Issuers and each of their subsidiaries and the San Juan
         Subsidiaries maintain a system of internal accounting controls
         sufficient to provide reasonable assurance that (i) transactions are
         executed in accordance with management's general or specific
         authorizations; (ii) transactions are recorded as necessary to permit
         preparation of financial statements in conformity with generally
         accepted accounting principles and to maintain asset accountability;
         (iii) access to assets is permitted only in accordance with
         management's general or specific authorization; and (iv) the recorded
         accountability for assets is compared with the existing assets at
         reasonable intervals and appropriate action is taken with respect to
         any differences.

                                       21
<PAGE>

         (bbb) All material tax returns required to be filed by the Issuers and
         each of their subsidiaries and each of the San Juan Subsidiaries in any
         jurisdiction have been filed, other than those filings being contested
         in good faith, and all material taxes, including withholding taxes,
         penalties and interest, assessments, fees and other charges due
         pursuant to such returns or pursuant to any assessment received by the
         Issuers or any of their subsidiaries or any of the San Juan
         Subsidiaries have been paid, other than those being contested in good
         faith and for which adequate reserves have been provided. There are no
         transfer taxes or other similar fees or charges under Federal law or
         the laws of any state, or any political subdivision thereof, required
         to paid in connection with the execution and delivery of this Agreement
         or the issuance and sale of the Notes.

         (ccc) All indebtedness of the Partnership that will be repaid with the
         proceeds of the issuance and sale of the Series A Notes was incurred,
         and the indebtedness represented by the Series A Notes is being
         incurred, for proper purposes and in good faith and each of the Issuers
         and the Subsidiary Guarantors was, at the time of the incurrence of
         such indebtedness that will be repaid with the proceeds of the issuance
         and sale of the Series A Notes, and will be on the Closing Date (after
         giving effect to the application of the proceeds from the issuance of
         the Series A Notes) solvent, and had at the time of the incurrence of
         such indebtedness that will be repaid with the proceeds of the issuance
         and sale of the Series A Notes and will have on the Closing Date (after
         giving effect to the application of the proceeds from the issuance of
         the Series A Notes) sufficient capital for carrying on their respective
         business and were, at the time of the incurrence of such indebtedness
         that will be repaid with the proceeds of the issuance and sale of the
         Series A Notes, and will be on the Closing Date (after giving effect to
         the application of the proceeds from the issuance of the Series A
         Notes) able to pay their respective debts as they mature.

         (ddd) No action has been taken and no law, statute, rule or regulation
         or order has been enacted, adopted or issued by any governmental agency
         or body which prevents the execution, delivery and performance of any
         of the Operative Documents, or the issuance of the Series A Notes or
         the Series A Guarantees, or suspends the sale of the Series A Notes or
         the Series A Guarantees in any jurisdiction referred to in Section
         5(e); and no injunction, restraining order or other order or relief of
         any nature by a federal or state court or other tribunal of competent
         jurisdiction has been issued with respect to the Issuers or any of
         their subsidiaries which would prevent or suspend the issuance or sale
         of the Series A Notes or the Series A Guarantees in any jurisdiction
         referred to in Section 5(e).

         The Issuers acknowledge that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Issuers and the Subsidiary Guarantors and counsel to the
Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.

7.       Initial Purchasers' Representations and Warranties. Each of the Initial
         Purchasers, severally and not jointly, represents and warrants to each
         of the Issuers and the Subsidiary Guarantors, and agrees that:

                                       22
<PAGE>

         (a) Such Initial Purchaser is a QIB with such knowledge and experience
         in financial and business matters as is necessary in order to evaluate
         the merits and risks of an investment in the Series A Notes;

         (b) Such Initial Purchaser (A) is not acquiring the Series A Notes with
         a view to any distribution thereof or with any present intention of
         offering or selling any of the Series A Notes in a transaction that
         would violate the Act or the securities laws of any state of the United
         States or any other applicable jurisdiction and (B) will be reoffering
         and reselling the Series A Notes only to (x) QIBs in reliance on the
         exemption from the registration requirements of the Act provided by
         Rule 144A, and (y) in offshore transactions in reliance upon Regulation
         S under the Act;

         (c) Such Initial Purchaser agrees that no form of general solicitation
         or general advertising (within the meaning of Regulation D under the
         Act) has been or will be used by such Initial Purchaser or any of its
         representatives in connection with the offer and sale of the Series A
         Notes pursuant hereto, including, but not limited to, articles, notices
         or other communications published in any newspaper, magazine or similar
         medium or broadcast over television or radio, or any seminar or meeting
         whose attendees have been invited by any general solicitation or
         general advertising;

         (d) Such Initial Purchaser agrees that, in connection with Exempt
         Resales, such Initial Purchaser will solicit offers to buy the Series A
         Notes only from, and will offer to sell the Series A Notes only to,
         Eligible Purchasers. Each Initial Purchaser further agrees that it will
         offer to sell the Series A Notes only to, and will solicit offers to
         buy the Series A Notes only from (A) Eligible Purchasers that the
         Initial Purchaser reasonably believes are QIBs, and (B) Regulation S
         Purchasers, in each case, that will be deemed to have agreed that (x)
         the Series A Notes purchased by them may be offered, resold, pledged or
         otherwise transferred, only (i) to the Partnership, El Paso Finance, or
         any subsidiary of the Partnership, (ii) in the United States to a
         person whom the seller reasonably believes is a Qualified Institutional
         Buyer (as defined in Rule 144A under the Securities Act) in a
         transaction meeting the requirements of Rule 144A, (iii) outside the
         United States in an offshore transaction in accordance with Rule 904
         under the Securities Act, (iv) pursuant to an exemption from
         registration under the Securities Act provided by Rule 144 thereunder
         (if available) or (v) pursuant to an effective registration statement
         under the Securities Act, in each of cases (i) through (v) in
         accordance with any applicable securities laws of any state of the
         United States, and (y) they will deliver to each person to whom such
         Series A Notes or an interest therein is transferred a notice
         substantially to the effect of the foregoing;

         (e) Such Initial Purchaser and its affiliates or any person acting on
         its or their behalf have not engaged or will not engage in any directed
         selling efforts within the meaning of Regulation S with respect to the
         Series A Notes or the Series A Guarantees;

         (f) The Series A Notes offered and sold by such Initial Purchaser
         pursuant hereto in reliance on Regulation S have been and will be
         offered and sold only in offshore transactions;

                                       23

<PAGE>

         (g) The sale of the Series A Notes offered and sold by such Initial
         Purchaser pursuant hereto in reliance on Regulation S is not part of a
         plan or scheme to evade the registration provisions of the Act;

         (h) Such Initial Purchaser agrees that it has not offered or sold and
         will not offer or sell the Series A Notes in the United States or to,
         or for the benefit or account of, a U.S. Person (other than a
         distributor), in each case, as defined in Rule 902 under the Act (i) as
         part of its distribution at any time and (ii) otherwise until 40 days
         after the later of the commencement of the offering of the Series A
         Notes pursuant hereto and the Closing Date, other than in accordance
         with Regulation S of the Act or another exemption from the registration
         requirements of the Act. Such Initial Purchaser agrees that, during
         such 40-day restricted period, it will not cause any advertisement with
         respect to the Series A Notes (including any "tombstone" advertisement)
         to be published in any newspaper or periodical or posted in any public
         place and will not issue any Memorandum relating to the Series A Notes,
         except such advertisements as are permitted by and include the
         statements required by Regulation S;

         (i) Such Initial Purchaser agrees that, at or prior to confirmation of
         a sale of Series A Notes by it to any distributor, dealer or person
         receiving a selling concession, fee or other remuneration during the
         40-day restricted period referred to in Rule 903(b) under the Act, it
         will send to such distributor, dealer or person receiving a selling
         concession, fee or other remuneration a confirmation or notice to
         substantially the following effect:

                  "The Series A Notes covered hereby have not been registered
                  under the U.S. Securities Act of 1933, as amended (the
                  "Securities Act"), and may not be offered and sold within the
                  United States or to, or for the account or benefit of, U.S.
                  persons (i) as part of your distribution at any time or (ii)
                  otherwise until 40 days after the later of the commencement of
                  the Offering and the Closing Date, except in either case in
                  accordance with Regulation S under the Securities Act (or Rule
                  144A or to institutional accredited investors as defined in
                  Rule 501(a)(1), (2), (3) or (7) under the Securities Act, in
                  transactions that are exempt from the registration
                  requirements of the Securities Act), and in connection with
                  any subsequent sale by you of the Series A Notes covered
                  hereby in reliance on Regulation S during the period referred
                  to above to any distributor, dealer or person receiving a
                  selling concession, fee or other remuneration, you must
                  deliver a notice to substantially the foregoing effect. Terms
                  used above have the meanings assigned to them in Regulation
                  S."; and

         (j) Such initial purchaser:

                  (i) has not offered or sold and, prior to the date six months
                  after the date of issuance of the Series A Notes, will not
                  offer or sell any notes to persons in the United Kingdom
                  except to persons whose ordinary activities involve them in
                  acquiring, holding, managing or disposing of investments (as
                  principal or agent) for the purposes of their businesses or
                  otherwise in circumstances which have not resulted and will
                  not result in an offer to the public in the United Kingdom
                  within the meaning of the Public Offers of Securities
                  Regulations 1995 (as amended);

                                       24
<PAGE>

                  (ii) has only communicated or caused to be communicated and
                  will only communicate or cause to be communicated any
                  invitation or inducement to engage in investment activity
                  (within the meaning of Section 21 of the Financial Services
                  and Markets Act 2000 received by it in connection with the
                  issue or sale of any Series A Notes in circumstances in which
                  Section 21(1) of the Financial Services and Markets Act 2000
                  does not apply to us or the guarantors; and

                  (iii) has complied and will comply with all applicable
                  provisions of the Financial Services and Markets Act 2000 with
                  respect to anything done by it in relation to the Series A
                  Notes in, from or otherwise involving the United Kingdom.

         Each Initial Purchaser acknowledges that the Issuers and the Subsidiary
Guarantors and, for purposes of the opinions to be delivered to each Initial
Purchaser pursuant to Section 9 hereof, counsel to the Issuers and the
Subsidiary Guarantors and counsel to the Initial Purchasers will rely upon the
accuracy and truth of the foregoing representations and the Initial Purchasers
hereby consent to such reliance.

8.       Indemnification.

         (a) Each of the Issuers and each Subsidiary Guarantor agree, jointly
         and severally, to indemnify and hold harmless the Initial Purchasers,
         their directors, affiliates, their officers and each person, if any,
         who controls such Initial Purchasers within the meaning of Section 15
         of the Act or Section 20 of the Exchange Act, from and against any and
         all losses, claims, damages, liabilities and judgments (including,
         without limitation, any legal or other expenses incurred in connection
         with investigating or defending any matter, including any action, that
         could give rise to any such losses, claims, damages, liabilities or
         judgments) caused by any untrue statement or alleged untrue statement
         of a material fact contained in the Preliminary Offering Memorandum (or
         any amendment or supplement thereto), the Offering Memorandum (or any
         amendment or supplement thereto) or any information provided by the
         Issuers or any Subsidiary Guarantor to any holder or prospective
         purchaser of Series A Notes pursuant to Section 5(f), or caused by any
         omission or alleged omission to state therein a material fact required
         to be stated therein or necessary to make the statements therein not
         misleading, except insofar as such losses, claims, damages, liabilities
         or judgments are caused by any such untrue statement or omission or
         alleged untrue statement or omission based upon information relating to
         the Initial Purchasers furnished in writing to the Issuers by such
         Initial Purchaser (and not with respect to the information provided by
         any other Initial Purchaser).

         (b) The Initial Purchasers agree, severally and not jointly, to
         indemnify and hold harmless the Issuers and the Subsidiary Guarantors,
         and their respective directors and officers and each person, if any,
         who controls (within the meaning of Section 15 of the Act or Section 20
         of the Exchange Act) the Issuers or the Subsidiary Guarantors, to the
         same extent as the foregoing indemnity from the Issuers and the
         Subsidiary Guarantors to the Initial Purchasers but only with reference
         to information relating to the Initial Purchaser furnished in writing
         to the Issuers by such Initial Purchaser expressly for use in

                                       25
<PAGE>

         the Preliminary Offering Memorandum or the Offering Memorandum and not
         with respect to the information provided by any other Initial
         Purchaser.

         (c) In case any action shall be commenced involving any person in
         respect of which indemnity may be sought pursuant to Section 8(a) or
         8(b) (the "indemnified party"), the indemnified party shall promptly
         notify the person against whom such indemnity may be sought (the
         "indemnifying party") in writing and the indemnifying party shall
         assume the defense of such action, including the employment of counsel
         reasonably satisfactory to the indemnified party and the payment of all
         fees and expenses of such counsel, as incurred (except that in the case
         of any action in respect of which indemnity may be sought pursuant to
         both Sections 8(a) and 8(b), the Initial Purchasers shall not be
         required to assume the defense of such action pursuant to this Section
         8(c), but may employ separate counsel and participate in the defense
         thereof, but the fees and expenses of such counsel, except as provided
         below, shall be at the expense of the Initial Purchasers). Any
         indemnified party shall have the right to employ separate counsel in
         any such action and participate in the defense thereof, but the fees
         and expenses of such counsel shall be at the expense of the indemnified
         party unless (i) the employment of such counsel shall have been
         specifically authorized in writing by the indemnifying party, (ii) the
         indemnifying party shall have failed to assume the defense of such
         action or employ counsel reasonably satisfactory to the indemnified
         party or (iii) the named parties to any such action (including any
         impleaded parties) include both the indemnified party and the
         indemnifying party, and the indemnified party shall have been advised
         by such counsel that there may be one or more legal defenses available
         to it which are different from or additional to those available to the
         indemnifying party (in which case the indemnifying party shall not have
         the right to assume the defense of such action on behalf of the
         indemnified party). In any such case, the indemnifying party shall not,
         in connection with any one action or separate but substantially similar
         or related actions in the same 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 (in addition to
         any local counsel) for all indemnified parties and all such fees and
         expenses shall be reimbursed as they are incurred. Such firm shall be
         designated in writing by J.P. Morgan Securities Inc., in the case of
         the parties indemnified pursuant to Section 8(a), and by the Issuers,
         in the case of parties indemnified pursuant to Section 8(b). The
         indemnifying party shall indemnify and hold harmless the indemnified
         party from and against any and all losses, claims, damages, liabilities
         and judgments by reason of any settlement of any action (i) effected
         with its written consent or (ii) effected without its written consent
         if the settlement is entered into more than twenty business days after
         the indemnifying party shall have received a request from the
         indemnified party for reimbursement for the fees and expenses of
         counsel (in any case where such fees and expenses are at the expense of
         the indemnifying party) and, prior to the date of such settlement, the
         indemnifying party shall have failed to comply with such reimbursement
         request. No indemnifying party shall, without the prior written consent
         of the indemnified party, effect any settlement or compromise of, or
         consent to the entry of judgment with respect to, any pending or
         threatened action in respect of which the indemnified party is or could
         have been a party and indemnity or contribution may be or could have
         been sought hereunder by the indemnified party, unless such settlement,
         compromise or judgment (i) includes an unconditional release of the
         indemnified party from all liability on claims that are or

                                       26
<PAGE>

         could have been the subject matter of such action and (ii) does not
         include a statement as to or an admission of fault, culpability or a
         failure to act, by or on behalf of the indemnified party.

         (d) To the extent the indemnification provided for in this Section 8 is
         unavailable to an indemnified party or insufficient in respect of any
         losses, claims, damages, liabilities or judgments referred to therein,
         then each indemnifying party, in lieu of indemnifying such indemnified
         party, shall contribute to the amount paid or payable by such
         indemnified party as a result of such losses, claims, damages,
         liabilities and judgments (i) in such proportion as is appropriate to
         reflect the relative benefits received by the Issuers and the
         Subsidiary Guarantors, on the one hand, and the Initial Purchasers on
         the other hand from the offering of the Series A Notes or (ii) if the
         allocation provided by clause 8(d)(i) above is not permitted by
         applicable law, in such proportion as is appropriate to reflect not
         only the relative benefits referred to in clause 8(d)(i) above but also
         the relative fault of the Issuers and the Subsidiary Guarantors, on the
         one hand, and the Initial Purchasers, on the other hand, in connection
         with the statements or omissions which resulted in such losses, claims,
         damages, liabilities or judgments, as well as any other relevant
         equitable considerations. The relative benefits received by the Issuers
         and the Subsidiary Guarantors, on the one hand and the Initial
         Purchasers, on the other hand, shall be deemed to be in the same
         proportion as the total net proceeds from the offering of the Series A
         Notes (after discounts and commissions received by the Initial
         Purchasers, but before deducting expenses) received by the Issuers, and
         the total discounts and commissions received by the Initial Purchasers
         bear to the total price to investors of the Series A Notes, in each
         case as set forth in the table on the cover page of the Offering
         Memorandum. The relative fault of the Issuers and the Subsidiary
         Guarantors, on the one hand, and the Initial Purchasers, on the other
         hand, shall be determined by reference to, among other things, whether
         the untrue or alleged untrue statement of a material fact or the
         omission or alleged omission to state a material fact relates to
         information supplied by the Issuers or the Subsidiary Guarantors, on
         the one hand, or the Initial Purchasers, on the other hand, and the
         parties' relative intent, knowledge, access to information and
         opportunity to correct or prevent such statement or omission.

         The Issuers and the Subsidiary Guarantors, and the Initial Purchasers
         agree that it would not be just and equitable if contribution pursuant
         to this Section 8(d) were determined by pro rata allocation, even if
         the Initial Purchasers were treated as one entity for such purpose, or
         by any other method of allocation which does not take account of the
         equitable considerations referred to in the immediately preceding
         paragraph. The amount paid or payable by an indemnified party as a
         result of the losses, claims, damages, liabilities or judgments
         referred to in the immediately preceding paragraph shall be deemed to
         include, subject to the limitations set forth above, any legal or other
         expenses incurred by such indemnified party in connection with
         investigating or defending any matter, including any action, that could
         have given rise to such losses, claims, damages, liabilities or
         judgments. Notwithstanding the provisions of this Section 8, the
         Initial Purchasers shall not be required to contribute any amount in
         excess of the amount by which the total discounts and commissions
         received by such Initial Purchasers exceeds the amount of any damages
         which each Initial Purchaser has otherwise been required to pay by
         reason of such untrue or alleged untrue statement or omission or
         alleged omission.

                                       27
<PAGE>

         No person guilty of fraudulent misrepresentation (within the meaning of
         Section 11(f) of the Act) shall be entitled to contribution from any
         person who was not guilty of such fraudulent misrepresentation. The
         Initial Purchasers' obligations to contribute pursuant to this Section
         8(d) are several in proportion to the respective principal amount of
         Series A Notes purchased by each of the Initial Purchasers hereunder
         and not joint.

         (e) The remedies provided for in this Section 8 are not exclusive and
         shall not limit any rights or remedies which may otherwise be available
         to any indemnified party at law or in equity.

9.       Conditions of Initial Purchasers' Obligations. The obligations of each
         of the Initial Purchasers to purchase the Series A Notes under this
         Agreement are subject to the satisfaction of each of the following
         conditions:

         (a) All the representations and warranties of the Issuers and the
         Subsidiary Guarantors contained in this Agreement shall be true and
         correct in all material respects on the Closing Date with the same
         force and effect as if made on and as of the Closing Date, provided
         that the representations and warranties qualified by "materiality"
         shall be true and correct on the Closing Date;

         (b) On or after the date hereof, there shall not have occurred (i) any
         downgrading, suspension or withdrawal of, nor shall any notice have
         been given of any potential or intended downgrading, suspension or
         withdrawal of, or of any review (or of any potential or intended
         review) for a possible change that either does not indicate the
         direction of the possible change or indicates a negative change in, any
         rating of the Issuers or any Subsidiary Guarantor or any securities of
         the Issuers or any Subsidiary Guarantor (including, without limitation,
         the placing of any of the foregoing ratings on credit watch with
         negative or developing implications or under review with an uncertain
         or negative direction) by any "nationally recognized statistical rating
         organization" as such term is defined for purposes of Rule 436(g)(2)
         under the Act, (ii) any change, nor shall any notice have been given of
         any potential or intended change, in the outlook for any rating of the
         Issuers or any Subsidiary Guarantor or any securities of the Issuers or
         any Subsidiary Guarantor by any such rating organization and (iii) no
         such rating organization shall have given notice that it has assigned
         (or is considering assigning) a lower rating to the Notes than that on
         which the Notes were marketed; (iv) any change in U.S. or international
         financial, political or economic conditions or currency exchange rates
         or exchange controls as would, in the judgment of J.P. Morgan
         Securities Inc., be likely to prejudice materially the success of the
         proposed issue, sale or distribution of the Notes, whether in the
         primary market or in respect of dealings in the secondary market; (v)
         any material suspension or material limitation of trading in securities
         generally on the New York Stock Exchange or any setting of minimum
         prices for trading on such exchange, or any suspension of trading of
         any securities of the Issuers on any exchange or in the
         over-the-counter market; (vi) any banking moratorium declared by U.S.
         Federal or New York authorities; (vii) any major disruption of
         settlements of securities or clearance services in the United States or
         (viii) any attack on, outbreak or escalation of hostilities or act of
         terrorism involving the United States, any declaration of war by
         Congress or any other national or international calamity or emergency
         if, in the judgment of J.P. Morgan

                                       28
<PAGE>

         Securities Inc., the effect of any such attack, outbreak, escalation,
         act, declaration, calamity or emergency makes it impractical or
         inadvisable to proceed with completion of the offering or sale of and
         payment for the Series A Notes on the terms and in the manner
         contemplated in the Offering Memorandum.

         (c) Since the respective dates as of which information is given in the
         Offering Memorandum other than as set forth in the Offering Memorandum
         (exclusive of any amendments or supplements thereto subsequent to the
         date of this Agreement), (i) there shall not have occurred any change
         or any development involving a prospective change in the condition,
         financial or otherwise, or the earnings, business, management or
         operations of the Partnership and its subsidiaries and El Paso Finance,
         taken as a whole, or the San Juan Business (ii) there shall not have
         been any change or any development involving a prospective change in
         the capital stock, limited liability company interests or partnership
         units, as applicable, or in the long-term debt of the Issuers or any of
         their subsidiaries and (iii) neither the Issuers nor any of their
         subsidiaries shall have incurred any liability or obligation, direct or
         contingent, the effect of which, in any such case described in clause
         9(c)(i), 9(c)(ii) or 9(c)(iii), in your judgment, is material and
         adverse and, in your judgment, makes it or impracticable or inadvisable
         to proceed with the completion of the offering and sale and payment for
         market the Series A Notes on the terms and in the manner contemplated
         in the Offering Memorandum;

         (d) You shall have received on the Closing Date a certificate dated the
         Closing Date, signed by the President or a Senior Vice President and
         the Chief Financial Officer of the Partnership and El Paso Finance and
         each of the Subsidiary Guarantors, confirming the matters set forth in
         Sections 6(ee), 9(a) and 9(b)(i), (ii) and (iii) and stating that each
         of the Issuers and the Subsidiary Guarantors has complied with all the
         agreements and satisfied all of the conditions herein contained and
         required to be complied with or satisfied on or prior to the Closing
         Date;

         (e) You shall have received on the Closing Date an opinion
         (satisfactory to you and counsel for the Initial Purchasers), dated the
         Closing Date, of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel for
         the Issuers and the Subsidiary Guarantors, to the effect that:

                  (i) Each of the Partnership and its Restricted Subsidiaries
                  (other than any business trust), the San Juan Restricted
                  Subsidiaries and El Paso Finance, as applicable, has been duly
                  formed or incorporated and is validly existing as a
                  partnership, corporation or limited liability company and in
                  good standing (other than any general partnership) under the
                  laws of its jurisdiction of formation or incorporation and has
                  the partnership, corporate or limited liability company power
                  and authority to conduct its business and to own, lease and
                  operate its properties, in each case as described in the
                  Offering Memorandum;

                  (ii) Each of the Partnership and its Restricted Subsidiaries
                  (other than general partnerships) and El Paso Finance, as
                  applicable, is duly qualified or registered to do business as
                  a foreign limited partnership, corporation, limited liability
                  company or business trust, as the case may be, and, based
                  solely on the various

                                       29
<PAGE>

                  certificates from public officials of Texas, Louisiana,
                  Mississippi, New Mexico, Massachusetts, Nevada and Alabama
                  (the "Good Standing Certificates"), is in good standing as a
                  foreign limited partnership, corporation, limited liability
                  company or business trust authorized to do business in the
                  respective jurisdictions listed on Schedule E hereto;

                  (iii) The General Partner has been duly incorporated and is
                  validly existing in good standing under the laws of the State
                  of Delaware with full corporate power and authority to carry
                  on its businesses; to own, lease and operate its properties;
                  and to act as the general partner of the Partnership in all
                  material respects as described in the Offering Memorandum. The
                  General Partner is duly qualified and, based solely on the
                  Good Standing Certificates, is in good standing as a foreign
                  corporation authorized to do business in the jurisdictions
                  listed on Schedule E hereto;

                  (iv) The General Partner is the sole general partner of the
                  Partnership and owns (of record) a 1.0% general partner
                  interest in the Partnership;

                  (v) the Series A Notes have been duly authorized by each of
                  the Issuers and, when executed and authenticated in accordance
                  with the provisions of the Indenture and delivered to and paid
                  for by the Initial Purchasers in accordance with the terms of
                  this Agreement, will be entitled to the benefits of the
                  Indenture and will be valid and binding obligations of the
                  Issuers, enforceable in accordance with their terms except as
                  may be limited by (i) applicable bankruptcy, insolvency,
                  fraudulent transfer and conveyance, reorganization, moratorium
                  and similar laws affecting creditors' rights and remedies
                  generally; (ii) general principles of equity, including
                  principles of commercial reasonableness, good faith and fair
                  dealing (regardless of whether enforcement is sought in a
                  proceeding at law or in equity); (iii) commercial
                  reasonableness and unconscionability and an implied covenant
                  of good faith and fair dealing; (iv) the power of the courts
                  to award damages in lieu of equitable remedies; and (v)
                  securities laws and public policy underlying such laws with
                  respect to rights to indemnification and contribution (the
                  "General Exceptions");

                  (vi) The Series A Guarantees have been duly authorized and,
                  when the Series A Notes are executed and authenticated in
                  accordance with the provisions of the Indenture and delivered
                  to and paid for by the Initial Purchasers in accordance with
                  the terms of this Agreement, the Series A Guarantees endorsed
                  by the notations on the Series A Notes will be entitled to the
                  benefits of the Indenture and will be valid and binding
                  obligations of the Subsidiary Guarantors, enforceable in
                  accordance with their terms except as may be limited by the
                  General Exceptions;

                  (vii) The Series B Guarantees have been duly authorized and,
                  when the Series B Notes are executed and authenticated in
                  accordance with the provisions of the Indenture and delivered
                  to and paid for by the Initial Purchasers in accordance with
                  the terms of this Agreement, the Series B Guarantees endorsed
                  by the

                                       30
<PAGE>

                  notations on the Series B Notes will be entitled to the
                  benefits of the Indenture and will be valid and binding
                  obligations of the Subsidiary Guarantors, enforceable in
                  accordance with their terms except as may be limited by the
                  General Exceptions;

                  (viii) The Indenture has been duly authorized, executed and
                  delivered by each of the Issuers and each Subsidiary Guarantor
                  and is a valid and binding agreement of each of the Issuers
                  and each Subsidiary Guarantor, enforceable against each of the
                  Issuers and each Subsidiary Guarantor in accordance with its
                  terms except as may be limited by the General Exceptions;

                  (ix) This Agreement has been duly authorized, executed and
                  delivered by each of the Issuers and the Subsidiary
                  Guarantors;

                  (x) The Registration Rights Agreement has been duly
                  authorized, executed and delivered by each of the Issuers and
                  the Subsidiary Guarantors and is a valid and binding agreement
                  of each of the Issuers and each Subsidiary Guarantor,
                  enforceable against each of the Issuers and each Subsidiary
                  Guarantor in accordance with its terms, except as may be
                  limited by the General Exceptions;

                  (xi) The Series B Senior Notes have been duly authorized by
                  each of the Issuers;

                  (xii) The statements under the captions "Description of
                  Notes," "Description of Other Indebtedness," "United States
                  Federal Income and Estate Tax Considerations" and "Plan of
                  Distribution" in the Offering Memorandum, insofar as such
                  statements purport to constitute a summary of the legal
                  matters, documents or proceedings referred to therein, fairly
                  present in all material respects such legal matters, documents
                  and proceedings;

                  (xiii) To the knowledge of such counsel, neither the
                  Partnership nor any of its Restricted Subsidiaries nor El Paso
                  Finance is in violation of its respective partnership
                  agreement, limited liability company agreement, charter or
                  by-laws or other organizational documents, as applicable and,
                  neither the Partnership nor any of its subsidiaries nor El
                  Paso Finance is in default in the performance of any
                  obligation, agreement, covenant or condition contained in any
                  of the material agreements attached as exhibits to the
                  Partnership's 2001 Annual Report on Form 10-K or any Current
                  Report on Form 8-K or Quarterly Report on Form 10-Q filed
                  since January 1, 2002 (the "Material Agreements");

                  (xiv) The execution, delivery and performance of this
                  Agreement and the other Operative Documents by each of the
                  Issuers and each of the Subsidiary Guarantors, the compliance
                  by each of the Issuers and each of the Subsidiary Guarantors
                  with all provisions hereof and thereof and the consummation by
                  the Issuers and the Subsidiary Guarantors, of the transactions
                  contemplated by this Agreement and the other Operative
                  Documents will not, upon the consummation of the San Juan
                  Acquisition or otherwise, to the knowledge of such counsel,

                                       31
<PAGE>

                  (i) require any consent, approval, authorization, filing with
                  or other order of, or qualification with, any court or
                  governmental body or agency (except (x) such as may be
                  required under the securities or Blue Sky laws of the various
                  states or, with respect to the proposed offer to exchange the
                  Exchange Notes for the Notes, the federal securities laws or
                  the TIA, (y) routine corporate, partnership and limited
                  liability company filings required after the date thereof, and
                  (z) routine filings under the Exchange Act), (ii) conflict
                  with or constitute a breach of any of the terms or provisions
                  of, or a default under, the partnership agreement, limited
                  liability company agreement, charter or by-laws or other
                  organizational documents, as applicable, of the Partnership or
                  any of its Restricted Subsidiaries, the San Juan Restricted
                  Subsidiaries or El Paso Finance or any Material Agreement, or
                  (iii) result in the imposition or creation of (or the
                  obligation to create or impose) a Lien under any Material
                  Agreement; and except that such counsel need express no
                  opinion regarding antifraud provisions of federal or state
                  securities or blue sky laws with respect to clause (i) of this
                  paragraph (xiii);

                  (xv) Neither of the Issuers is and, after giving effect to the
                  offering and sale of the Series A Notes, the application of
                  the net proceeds thereof as described in the Offering
                  Memorandum and the San Juan Acquisition, neither of the
                  Issuers will be, an "investment company" as such term is
                  defined in the Investment Company Act of 1940, as amended;

                  (xvi) To the knowledge of such counsel, there are, and upon
                  the consummation of the San Juan Acquisition there will be, no
                  contracts, agreements or understandings between the
                  Partnership, El Paso Finance, any Subsidiary Guarantor or any
                  San Juan Restricted Subsidiary and any person granting such
                  person the right to require the Partnership, El Paso Finance,
                  such Subsidiary Guarantor or such San Juan Restricted
                  Subsidiary to file a registration statement under the Act with
                  respect to any securities of the Partnership, El Paso Finance,
                  such Subsidiary Guarantor or such San Juan Restricted
                  Subsidiary (other than the rights (i) of the General Partner
                  and its affiliates in Section 6.14 of the Partnership
                  Agreement and in the Series C RRA; (ii) of EPEC and its
                  successors pursuant to a registration rights agreement between
                  EPEC and the Partnership executed in connection with the
                  acquisition by the Partnership of an additional interest in
                  Viosca Knoll Gathering Company; (iii) of Crystal Gas Storage,
                  Inc. pursuant to the registration rights agreement between
                  Crystal Gas Storage, Inc. and the Partnership which was
                  executed in connection with the acquisition by the Partnership
                  of the Crystal storage facilities; provided, however, that
                  with respect to (i) and (ii) above, the General Partner, EPEC,
                  Sabine I and Sabine II have agreed not to exercise their
                  rights with respect to such securities in connection with the
                  offering of the Notes for 90 days hereafter pursuant to letter
                  agreements of even date herewith; (iv) granted under the
                  Credit Facility, the EPN Holding Term Loan, the Acquisition
                  Loan and related agreements; and (v) granted under the
                  Registration Rights Agreement); and to the knowledge of such
                  counsel there are no contracts, agreements or understandings
                  between the Partnership, El Paso Finance,

                                       32
<PAGE>

                  any Subsidiary Guarantor or any San Juan Restricted Subsidiary
                  and any person granting such person the right to require the
                  Partnership, El Paso Finance, such Subsidiary Guarantor or
                  such San Juan Restricted Subsidiary to include such securities
                  with the Notes and Guarantees registered pursuant to any
                  Registration Statement other than the rights of the General
                  Partner and its affiliates in Section 6.14 of the Partnership
                  Agreement and in the Series C RRA (which rights have been
                  waived in connection with any Registration Statement filed
                  pursuant to the Registration Rights Agreement).

                  (xvii) The Indenture complies as to form in all material
                  respects with the requirements of the TIA, and the rules and
                  regulations of the Commission applicable to an indenture which
                  is qualified thereunder. It is not necessary in connection
                  with the offer, sale and delivery of the Series A Notes to the
                  Initial Purchasers in the manner contemplated by this
                  Agreement or in connection with the initial placement of the
                  Series A Notes by the Initial Purchasers in the manner
                  contemplated by the Offering Memorandum pursuant to Exempt
                  Resales to qualify the Indenture under the TIA (it being
                  understood that such counsel need express no opinion as to any
                  other offer or sale);

                  (xviii) No registration under the Act of the Series A Notes is
                  required for the sale of the Series A Notes to the Initial
                  Purchasers as contemplated by this Agreement or for the Exempt
                  Resales assuming that (i) each Initial Purchaser is a QIB, or
                  a Regulation S Purchaser, (ii) the accuracy of, and compliance
                  with, the Initial Purchasers' representations and agreements
                  contained in Section 7 of this Agreement and (iii) the
                  accuracy of the representations and agreements of each of the
                  Issuers and the Subsidiary Guarantors set forth in Sections
                  5(f) and (k) and 6(ff), (ii), (jj), (ll), (mm), (oo) and (pp)
                  of this Agreement;

                  (xix) The Offering Memorandum, as of its date, and each
                  amendment or supplement thereto, as of its date, complied as
                  to form in all material respects with the applicable
                  requirements of Rule 144A(d)(4) of the Act (it being
                  understood that such counsel need express no opinion with
                  respect to this paragraph (xix) regarding the financial
                  statements and the notes thereto, oil and gas reserve
                  information and the schedules and other financial data
                  included in the Offering Memorandum);

                  (xx) A court applying Texas conflict of laws rules in a
                  properly presented and argued case should give effect to the
                  express choice of law provisions contained in the Operative
                  Documents to the extent that such provisions provide that the
                  laws of the State of New York are to govern issues under the
                  Operative Documents.

         In addition, such counsel shall include a statement in such opinion
         letter to the effect that although such counsel has not undertaken,
         except as otherwise indicated in their opinion, to determine
         independently, and does not assume any responsibility for, the accuracy
         or completeness of the statements in the Offering Memorandum, such
         counsel has participated in the preparation of the Offering Memorandum
         and any amendments or supplements thereto, including review and
         discussion of the contents thereof, and nothing has come to the
         attention of such counsel that has caused them to believe that, as of
         the

                                       33
<PAGE>

         date of the Offering Memorandum or as of the Closing Date, the Offering
         Memorandum, as amended or supplemented, if applicable, contained or
         contains any untrue statement of a material fact or omitted or omits to
         state a material fact necessary in order to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading (it being understood that such counsel need express no
         opinion with respect to the financial statements and notes thereto, oil
         and gas reserve information and the schedules and other financial data
         included in the Offering Memorandum).

         The opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. described in
         Section 9(e) above (i) may be subject to customary qualifications,
         assumptions and limitations and (ii) shall be rendered to you at the
         request of the Issuers and the Subsidiary Guarantors and shall so state
         therein.

         (f) The Initial Purchasers shall have received on the Closing Date an
         opinion, dated the Closing Date, of Robert W. Baker, counsel for the
         Partnership, to the effect that: (i) except as set forth in the
         Offering Memorandum, such counsel does not know of any legal or
         governmental proceedings pending or threatened to which the Partnership
         or any of its Restricted Subsidiaries, the San Juan Restricted
         Subsidiaries or El Paso Finance is a party or to which any of their
         respective property is, or upon consummation of the San Juan
         Acquisition will be, subject, except for those which, singly or in the
         aggregate, could reasonably be expected not to result in a Material
         Adverse Effect;

                  (ii) The execution, delivery and performance of this Agreement
                  and the other Operative Documents by each of the Issuers and
                  each of the Subsidiary Guarantors, the compliance by each of
                  the Issuers and each of the Subsidiary Guarantors with all
                  provisions hereof and thereof and the consummation by the
                  Issuers and the Subsidiary Guarantors, of the transactions
                  contemplated by this Agreement and the other Operative
                  Documents will not, upon the consummation of the San Juan
                  Acquisition or otherwise, to the knowledge of such counsel,
                  (i) violate or conflict with any applicable law or any rule,
                  regulation, judgment, order or decree of any court or any
                  governmental body or agency having jurisdiction over the
                  Partnership, any of its Restricted Subsidiaries, the San Juan
                  Restricted Subsidiaries or El Paso Finance or their respective
                  property or (ii) result in the termination, suspension or
                  revocation of any Authorization of the Partnership or any of
                  its Restricted Subsidiaries, the San Juan Restricted
                  Subsidiaries or El Paso Finance or result in any other
                  impairment of the rights of the holder of any such
                  Authorization, except for those which, singly or in the
                  aggregate, could reasonably be expected not to result in a
                  Material Adverse Effect; and except that such counsel need
                  express no opinion regarding antifraud provisions of federal
                  or state securities or blue sky laws with respect to clause
                  (i) of this paragraph (ii);

                  (iii) To the knowledge of such counsel, (A) each of the
                  Partnership and its Restricted Subsidiaries, the San Juan
                  Restricted Subsidiaries and El Paso Finance has, and upon
                  consummation of the San Juan Acquisition will have, such
                  Authorizations of, and has, and upon consummation of the San
                  Juan Acquisition will have, made all filings with and notices
                  to, all governmental or regulatory authorities and
                  self-regulatory organizations and all courts and other
                  tribunals,

                                       34
<PAGE>

                  including without limitation, under any applicable
                  Environmental Laws, as are necessary to own, lease, license
                  and operate its respective properties and to conduct its
                  business, except where the failure to have any such
                  Authorization or to make any such filing or notice could,
                  singly or in the aggregate, reasonably be expected not to have
                  a Material Adverse Effect; (B) each such Authorization known
                  to us is, and upon consummation of the San Juan Acquisition
                  will be, valid and in full force and effect and, to the
                  knowledge of such counsel, each of the Partnership and its
                  Restricted Subsidiaries, the San Juan Restricted Subsidiaries
                  and El Paso Finance is, and upon consummation of the San Juan
                  Acquisition will be, in compliance with all the terms and
                  conditions thereof and with the rules and regulations of the
                  authorities and governing bodies having jurisdiction with
                  respect thereto; (C) no event has occurred (including the
                  receipt of any notice from any authority or governing body)
                  which allows or, after notice or lapse of time or both, would
                  allow, revocation, suspension or termination of any such
                  Authorization or results or, after notice or lapse of time or
                  both, would result in any other material impairment of the
                  rights of the holder of any such Authorization; and (D) such
                  Authorizations contain no restrictions that are, or upon
                  consummation of the San Juan Acquisition will be, materially
                  burdensome to the Partnership or any of its Restricted
                  Subsidiaries, the San Juan Restricted Subsidiaries or El Paso
                  Finance; except in the case of (A) through (D) above those
                  which could reasonably be expected not to, singly or in the
                  aggregate, have a Material Adverse Effect; and

                  (iv) Neither the General Partner nor the Partnership is a
                  "holding company" or, after giving effect to the offering and
                  sale of the Series A Notes and the application of the proceeds
                  thereof as described in the Offering Memorandum will be a
                  "holding company," within the meaning of, or subject to
                  regulation under, the Public Holding Utility Company Act of
                  1935, as amended, and the rules and regulations promulgated by
                  the Commission thereunder.

         (g) The Initial Purchasers shall have received on the Closing Date an
         opinion, dated the Closing Date, of Simpson Thacher & Bartlett, counsel
         for the Initial Purchasers, in form and substance reasonably
         satisfactory to the Initial Purchasers.

         (h) The Initial Purchasers shall have received, at the time this
         Agreement is executed and at the Closing Date, letters dated the date
         hereof or the Closing Date, as the case may be, in form and substance
         satisfactory to the Initial Purchasers containing the information and
         statements of the type ordinarily included in accountants' "comfort
         letters" to the Initial Purchasers from PricewaterhouseCoopers LLP,
         independent public accountants, with respect to the financial
         statements of the Issuers and their subsidiaries, and certain financial
         information contained in the Offering Memorandum.

         (i) The Initial Purchasers shall have received, at the time of this
         Agreement is executed and at the Closing Date, letters dated the date
         hereof or the Closing Date, as the case may be, in form and substance
         satisfactory to the Initial Purchasers from Netherland & Sewell.

                                       35
<PAGE>

         (j) The Series A Notes shall have been approved by the NASD for trading
         and duly listed in PORTAL.

         (k) The Issuers, the Subsidiary Guarantors and the Trustee shall have
         executed the Indenture.

         (l) The Issuers and the Subsidiary Guarantors shall have executed the
         Registration Rights Agreement and the Initial Purchasers shall have
         received an original copy thereof, duly executed by the Issuers and the
         Subsidiary Guarantors.

         (m) Neither the Issuers nor the Subsidiary Guarantors shall have failed
         at or prior to the Closing Date to perform or comply with any of the
         agreements herein contained and required to be performed or complied
         with by each of the Issuers or the Subsidiary Guarantors, as the case
         may be, at or prior to the Closing Date.

         (n) As contemplated by the Contribution, Purchase and Sale Agreement
         dated as of November 21, 2002 by and between El Paso Corporation, a
         Delaware corporation, and the Partnership (the "San Juan Agreement"),
         the Partnership shall have consummated its acquistion (the "San Juan
         Acquisition") from El Paso Corporation of the gas gathering, processing
         and treating assets in the San Juan Basin of New Mexico and the other
         assets identified in the San Juan Agreement (the "San Juan Assets").

10. Effectiveness of Agreement and Termination. This Agreement shall become
effective upon the execution and delivery of this Agreement by the parties
hereto.

         This Agreement may be terminated at any time on or prior to the Closing
Date by the Initial Purchasers by written notice to the Issuers if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in any of the
Initial Purchasers' judgment, is material and adverse and, in any of the Initial
Purchasers' judgment, makes it impracticable or inadvisable to proceed with the
completion of the offering and sale and payment for the Series A Notes on the
terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Issuers or any Subsidiary
Guarantor on any exchange or in the over-the-counter market, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects, or will materially and adversely
affect, the business, prospects, financial condition or results of operations of
the Issuers and their subsidiaries, taken as a whole, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.

                                       36
<PAGE>

            If on the Closing Date any one or more of the Initial Purchasers
shall fail or refuse to purchase the Series A Notes which it or they have agreed
to purchase hereunder on such date and the aggregate principal amount of the
Series A Notes which such defaulting Initial Purchaser or Initial Purchasers, as
the case may be, agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of the Series A Notes to be
purchased on such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated severally, in the proportion which the principal
amount of the Series A Notes set forth opposite its name in Schedule B bears to
the aggregate principal amount of the Series A Notes which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to purchase,
or in such other proportion as you may specify, to purchase the Series A Notes
which such defaulting Initial Purchaser or Initial Purchasers, as the case may
be, agreed but failed or refused to purchase on such date; provided that in no
event shall the aggregate principal amount of the Series A Notes which any
Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of the Series A Notes without the consent of such Initial
Purchaser. If on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase the Series A Notes and the aggregate principal
amount of the Series A Notes with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of the Series A Notes to be
purchased by all Initial Purchasers and arrangements satisfactory to the Initial
Purchasers and the Issuers for purchase of such Series A Notes are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Initial Purchaser and the Issuers.
In any such case which does not result in termination of this Agreement, either
you or the Issuers shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Offering Memorandum or any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting Initial
Purchaser from liability in respect of any default of any such Initial Purchaser
under this Agreement.

         This Agreement may be terminated at any time on or prior to the Closing
Date by the Issuers by written notice to the Initial Purchasers if, there is a
failure to obtain any consent or waiver under, or amendment of, the Credit
Facility, that is required in order for the issuance of the Notes to not
constitute a default thereunder.

11.      Miscellaneous.

         (a) Notices given pursuant to any provision of this Agreement shall be
         addressed as follows:

                  (i)    if to the Issuers or any Subsidiary Guarantor, to:

                         El Paso Energy Partners, L.P.
                         4 Greenway Plaza
                         Houston, Texas 77046
                         Attention: Chief Financial Officer;

                         With a copy to (which shall not constitute notice):

                                       37
<PAGE>

                         Akin Gump Strauss Hauer & Feld, LLP
                         1900 Pennzoil Place, South Tower
                         711 Louisiana Street
                         Houston, Texas  77002
                         Attention:  J. Vincent Kendrick

                 (ii)    if to the Initial Purchasers, to:

                                    J.P. Morgan Securities Inc.
                                    270 Park Avenue
                                    New York, New York  10017
                                    Attention:  Lawrence Landry

or in any case to such other address as the person to be notified may have
requested in writing.

(b) The respective indemnities, contribution agreements, representations,
warranties and other statements of the Issuers, the Subsidiary Guarantors and
the Initial Purchasers, set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Series A Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the Initial
Purchasers, the officers or directors of the Initial Purchasers, any person
controlling the Initial Purchasers, the Issuers, any Subsidiary Guarantor, the
officers or directors of the Issuers or any Subsidiary Guarantor, or any person
controlling the Issuers or any Subsidiary Guarantor, (ii) acceptance of the
Series A Notes and payment for them hereunder and (iii) termination of this
Agreement.

(c) If for any reason the Series A Notes are not delivered by or on behalf of
the Issuers as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Issuers and each Subsidiary
Guarantor, jointly and severally, agree to reimburse the Initial Purchasers for
all out-of-pocket expenses (including the fees and disbursements of counsel)
incurred by them. Notwithstanding any termination of this Agreement, the Issuers
shall be liable for all expenses which they have agreed to pay pursuant to
Section 5(i) hereof. Each of the Issuers and each Subsidiary Guarantor also
agrees, jointly and severally, to reimburse each of the Initial Purchasers and
its officers, directors and each person, if any, who controls such Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act for any and all fees and expenses (including without limitation the
fees and expenses of counsel) incurred by them in connection with enforcing
their rights under this Agreement (including without limitation its rights under
Section 8).

(d) Except as otherwise provided, this Agreement has been and is made solely for
the benefit of and shall be binding upon the Partnership, El Paso Finance, the
Subsidiary Guarantors, the Initial Purchasers, each of the Initial Purchasers'
affiliates, directors and officers, any controlling persons referred to herein,
the directors of the Issuers and the Subsidiary Guarantors and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or

                                       38
<PAGE>

by virtue of this Agreement. The term "successors and assigns" shall not include
a purchaser of any of the Series A Notes from the Initial Purchasers merely
because of such purchase.

(e) This Agreement shall be governed and construed in accordance with the laws
of the State of New York.

(f) This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.

                            (Signatures Page Follows)

                                       39
<PAGE>

         Please confirm that the foregoing correctly sets forth the agreement
among the Partnership, El Paso Finance, the Subsidiary Guarantors and the
Initial Purchasers.

                               Very truly yours,

                               Issuers:

                               EL PASO ENERGY PARTNERS, L.P.

                               By: /s/ Keith Forman
                                   ---------------------------------------------
                               Name: Keith Forman
                               Title: Vice President and Chief Financial Officer

                               EL PASO PARTNERS FINANCE CORPORATION

                               By: /s/ Keith Forman
                                   ---------------------------------------------
                               Name: Keith Forman
                               Title: Vice President and Chief Financial Officer

                                       40
<PAGE>

                       Subsidiary Guarantors:

                       ANR CENTRAL GULF GATHERING COMPANY, L.L.C.*
                       ARGO, L.L.C.*
                       ARGO I, L.L.C*
                       ARGO II, L.L.C.*
                       CRYSTAL HOLDING, L.L.C.*
                       CHACO LIQUIDS PLANT TRUST
                          By: EL PASO ENERGY PARTNERS OPERATING
                              COMPANY, L.L.C., in its capacity as trustee of the
                              Chaco Liquids Plant Trust*
                       DELOS OFFSHORE COMPANY, L.L.C.*
                       EAST BREAKS GATHERING COMPANY, L.L.C.*
                          By: EL PASO ENERGY PARTNERS DEEPWATER, L.L.C.
                              its sole member*
                       EL PASO ENERGY INTRASTATE, L.P.*
                       EL PASO ENERGY PARTNERS DEEPWATER, L.L.C.*
                       EL PASO ENERGY PARTNERS OIL TRANSPORT, L.L.C.*
                       EL PASO ENERGY PARTNERS OPERATING
                              COMPANY, L.L.C.*
                       EL PASO ENERGY WARWINK I COMPANY, L.P.*
                       EL PASO ENERGY WARWINK II COMPANY, L.P.*
                       EL PASO HUB SERVICES COMPANY, L.L.C.*
                       EL PASO INDIAN BASIN, L.P.*
                       EL PASO OFFSHORE GATHERING & TRANSMISSION, L.P.*
                       EL PASO SAN JUAN, L.L.C.*
                       EL PASO SOUTH TEXAS, L.P.*
                       EPGT TEXAS PIPELINE, L.P.*
                       EPN GATHERING AND TREATING COMPANY, L.P.*
                       EPN GATHERING AND TREATING GP HOLDING, L.L.C.*
                       EPN GP HOLDING, L.L.C.*
                       EPN GP HOLDING, I, L.L.C.*
                       EPN HOLDING COMPANY, L.P.*
                       EPN HOLDING COMPANY, I, L.P.*
                       EPN NGL STORAGE, L.L.C.*
                       EPN PIPELINE GP HOLDING, L.L.C.*
                       FIRST RESERVE GAS, L.L.C.*
                       FLEXTREND DEVELOPMENT COMPANY, L.L.C.*
                       GREEN CANYON PIPE LINE COMPANY, L.P.*
                       HATTIESBURG GAS STORAGE COMPANY*
                       HATTIESBURG INDUSTRIAL GAS SALES, L.L.C.*
                       HIGH ISLAND OFFSHORE SYSTEM, L.L.C.
                          By: EL PASO ENERGY PARTNERS DEEPWATER, L.L.C.,
                              its sole member*
                       MANTA RAY GATHERING COMPANY, L.L.C.*
                       PETAL GAS STORAGE, L.L.C.*

                                       41
<PAGE>

                       POSEIDON PIPELINE COMPANY, L.L.C.*
                       VK DEEPWATER GATHERING COMPANY, L.L.C.*
                       VK-MAIN PASS GATHERING COMPANY, L.L.C.*
                       WARWINK GATHERING AND TREATING COMPANY*

                       *By: /s/ D. Mark Leland
                            --------------------------------------------------
                       Name: D. Mark Leland
                       Title:  Senior Vice President and Controller

                                       42
<PAGE>

                        Initial Purchasers:

                        J.P. MORGAN SECURITIES INC.
                        GOLDMAN, SACHS & CO.
                        UBS WARBURG LLC
                        WACHOVIA SECURITIES, INC.

                        By: J.P. MORGAN SECURITIES INC.

                        By: /s/ Lawrence (Larry) Landry
                           ------------------------------
                           Name:  Lawrence (Larry) Landry
                           Title: Managing Director

                                       43<PAGE>

                                                                   EXHIBIT 10.47

                           NOVEMBER 2002 AMENDMENT TO
                           LOAN AND SECURITY AGREEMENT
                  AND AMENDMENT TO CERTAIN OTHER LOAN DOCUMENTS

         THIS NOVEMBER 2002 AMENDMENT TO LOAN AND SECURITY AGREEMENT AND
AMENDMENT TO CERTAIN OTHER LOAN DOCUMENTS (the "Amendment") is made and entered
into on this 26th day of November, 2002, to be effective (unless otherwise
specified herein) as of November 1, 2002 (the "Effective Date"), by and among
FLEET CAPITAL CORPORATION, a Rhode Island corporation, successor in interest by
merger to FLEET CAPITAL CORPORATION, a Connecticut corporation, formerly known
as SHAWMUT CAPITAL CORPORATION, successor in interest by assignment to BARCLAYS
BUSINESS CREDIT, INC. ("Lender"), LOWRANCE ELECTRONICS, INC., a Delaware
corporation ("Lowrance"), LEI EXTRAS, INC., a Delaware corporation ("LEI"),
LOWRANCE CONTRACTS, INC., a Delaware corporation ("Lowrance Contracts"), and SEA
ELECTRONICS, INC., an Oklahoma corporation ("Sea Electronics") (Lowrance, LEI,
Lowrance Contracts and Sea Electronics are herein individually and collectively
called "Borrower").

                                    RECITALS

         (A) Borrower, Lowrance Australia Pty Limited ("Lowrance Australia") and
Lender have entered into that certain Loan and Security Agreement, dated
December 15, 1993, as such Loan and Security Agreement has been amended,
including, without limitation, as amended by (i) that certain First Amendment to
Loan and Security Agreement, dated October 16, 1995, by and among Lender,
Borrower and Lowrance Australia, (ii) that certain Second Amendment to Loan and
Security Agreement, dated November 1, 1996 by and among Lender and Borrower,
(iii) that certain Third Amendment to Loan and Security Agreement, dated
December 30, 1996, by and among Lender and Borrower, (iv) that certain Fourth
Amendment to Loan and Security Agreement, entered into effective as of April 1,
1997, by and among Lender and Borrower, (v) that certain Fifth Amendment to Loan
and Security Agreement, entered into effective as of August 25, 1997, by and
between Lender and Borrower, (vi) that certain Sixth Amendment to Loan and
Security Agreement and Certain Other Loan Documents, entered into effective as
of August 28, 1997, by and between Lender and Borrower, (vii) that certain
Seventh Amendment to Loan and Security Agreement, entered into effective as of
November 1, 1997, by and between Lender and Borrower, (viii) that certain Eighth
Amendment to Loan and Security Agreement, made and entered into as of December
9, 1997, by and between Lender and Borrower, (ix) that certain Ninth Amendment
to Loan and Security Agreement made and entered into as of September 14, 1998,
by and between Lender and Borrower, (x) that certain Tenth Amendment to Loan and
Security Agreement and Amendment to Certain Other Loan Documents, executed in
November of 1998, by Lender and Borrower; (xi) that certain Eleventh Amendment
to Loan and Security Agreement and Amendment to Certain Other Loan Documents,
executed March 14, 2000, by Lender and Borrower, (xii) that certain Twelfth
Amendment to Loan and Security Agreement and Amendment to Certain Other Loan
Documents, executed October 15, 2000, by

                                       1
<PAGE>

Lender and Borrower, (xiii) that certain Thirteenth Amendment to Loan and
Security Agreement and Amendment to Certain Other Loan Documents and Limited
Waiver entered into on October 19, 2001, by Lender and Borrower, (xiv) that
certain letter agreement, dated December 14, 2001, by and between Lender and
Borrower, and (xv) that certain Fourteenth Amendment to Loan and Security
Agreement and Amendment to Certain Other Loan Documents, entered into on March
11, 2002, by Lender and Borrower (as amended, the "Loan Agreement").

         (B) Borrower and Lender desire to amend the Loan Agreement and certain
of the other Loan Documents as hereinafter set forth.

         NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS

         1.01 Capitalized terms used in this Amendment are defined in the Loan
Agreement, as amended hereby, unless otherwise stated.

                                   ARTICLE II
                                   AMENDMENTS

         2.01 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; ADDITION OF NEW
DEFINITIONS. Section 1.1 of the Loan Agreement is hereby amended by adding the
following new definitions thereto to be inserted in their proper alphabetical
order and to read as follows:

         "Base Rate Loans - all Loans other than LIBOR Loans.

         Banking Relationship Indebtedness - Indebtedness or other obligations
         of Borrower or any Affiliate of Borrower relating to or arising out of
         (i) checking and operating account relationships between Borrower or
         any Affiliate of Borrower and Lender or any Affiliate of Lender
         (including Bank), including any obligations under Cash Management
         Agreements, and (ii) Hedging Agreements with Lender or any Affiliate of
         Lender (including Bank).

         Cash Management Agreements - any agreement entered into from time to
         time between Borrower or any Affiliate of Borrower, on the one hand,
         and Bank or any of its Affiliates or any other banking or financial
         institution, on the other, in connection with cash management services
         for operating, collections, payroll and trust accounts of Borrower or
         any Affiliate of Borrower provided by such banking or financial
         institution, including automatic clearinghouse services, controlled
         disbursement services, electronic funds transfer services, information
         reporting services, lockbox services, stop payment services and wire
         transfer services.

                                       2
<PAGE>

         Hedging Agreement - any interest rate protection agreement, foreign
         currency exchange agreement, commodity price protection agreement or
         other interest or currency exchange rate or commodity price hedging
         arrangement.

         LIBOR Base Rate - as applicable to any LIBOR Loan, the rate per annum
         (rounded upward, if necessary, to the nearest 1/32 of one percent) as
         determined on the basis of the offered rates for deposits in U.S.
         dollars, for a period of time comparable to such LIBOR Loan which
         appears on the Telerate page 3750 as of 11:00 a.m. (London time) on the
         day that is two (2) London Banking Days preceding the first day of such
         LIBOR Loan; provided, however, if the rate described above does not
         appear on the Telerate System on any applicable interest determination
         date, the LIBOR Base Rate shall be the rate (rounded upwards as
         described above, if necessary) for deposits in U.S. dollars for a
         period substantially equal to the interest period on the Reuters Page
         'LIBO' (or such other page as may replace the LIBO Page on that service
         for the purpose of displaying such rates), as of 11:00 a.m. (London
         Time), on the day that is two (2) London Banking Days prior to the
         beginning of such interest period. If both the Telerate and Reuters
         systems are unavailable, then the rate for that date will be determined
         on the basis of the offered rates for deposits in U.S. dollars for a
         period of time comparable to such LIBOR Loan which are offered by four
         (4) major banks in the London interbank market at approximately 11:00
         a.m. (London time), on the day that is two (2) London Banking Days
         preceding the first day of such LIBOR Loan as selected by Lender. The
         principal London office of each of the major London Banks so selected
         will be requested to provide a quotation of its U.S. dollar deposit
         offered rate. If at least two (2) such quotations are provided, the
         rate for that date will be the arithmetic mean of the quotations. If
         fewer than two quotations are provided as requested, the rate for that
         date will be determined on the basis of the rates quoted for loans in
         U.S. dollars to leading European banks for a period of time comparable
         to such LIBOR Loan offered by major banks in New York City at
         approximately 11:00 a.m. (New York City time), on the day that is two
         (2) London Banking Days preceding the first day of such LIBOR Loan. In
         the event that Lender is unable to obtain any such quotation as
         provided above, it will be determined that LIBOR Base Rate pursuant to
         a LIBOR Loan cannot be determined. In the event that the Board of
         Governors of the Federal Reserve System shall impose a Reserve
         Percentage with respect to LIBOR deposits of Bank then for any period
         during which such Reserve Percentage shall apply, LIBOR Base Rate shall
         be equal to the amount determined above divided by an amount equal to 1
         minus the Reserve Percentage.

         LIBOR Borrowing Notice - as defined in Section 3.8(A) of this
         Agreement.

         LIBOR Interest Period - as applicable to any LIBOR Loan, a period
         commencing on the date a LIBOR Loan is made, and ending on the date
         which is one (1) month, two (2) months, or three (3) months later, as
         may then be requested by Borrower; provided that (i) any LIBOR Interest
         Period which would otherwise end on a day which is not a Business Day
         shall end on the next preceding or succeeding Business Day as is
         Lender's custom in the market to which such LIBOR Loan relates; (ii)
         there remains a minimum

                                       3
<PAGE>

         of one (1) month, two (2) months, or three (3) months (depending upon
         which LIBOR Interest Period Borrower selects) in the Original Term; and
         (iii) all LIBOR Interest Periods of the same duration which commence on
         the same date shall end on the same date.

         LIBOR Loan - any Loan which bears interest at a LIBOR Base Rate.

         London Banking Day - any date on which commercial banks are open for
         business in London, England.

         Reserve Percentage - the maximum aggregate reserve requirement
         (including all basic, supplemental, marginal and other reserves) which
         is imposed on member banks of the Federal Reserve System against
         'Eurocurrency Liabilities' as defined in Regulation D."

         2.02 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; AMENDMENT OF
DEFINITION OF "OBLIGATIONS." Effective as of the Effective Date, the definition
of "Obligations" contained in Section 1.1 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:

         "Obligations - all Loans and all other advances, debts, liabilities,
         obligations, covenants and duties (including, without limitation,
         Banking Relationship Indebtedness) owing, arising, due or payable from
         Borrower or any Affiliate of Borrower to Lender (including Bank), of
         any kind or nature, present or future, whether or not evidenced by any
         note, guaranty or other instrument, whether arising under this
         Agreement or any of the other Loan Documents or otherwise, whether
         direct or indirect (including those acquired by assignment), absolute
         or contingent, primary or secondary, due or to become due, now existing
         or hereafter arising and however acquired. The term includes, without
         limitation, the obligations of Borrower under Section 2.5 of this
         Agreement in connection with the foreign currency purchase contracts
         described therein, and all other interest, charges, expenses, fees,
         attorneys' fees and any other sums chargeable to Borrower under any of
         the Loan Documents."

         2.03 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; AMENDMENT OF
DEFINITION OF "PERMITTED RAW MATERIALS LOAN AMOUNT." Effective as of the
Effective Date, the definition of "Permitted Raw Materials Loan Amount"
contained in Section 1.1 of the Loan Agreement is hereby amended and restated to
read in its entirety as follows:

         "Permitted Raw Materials Loan Amount" -$575,000."

         2.04 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; AMENDMENT OF
DEFINITION OF "SEASONAL DATING ACCOUNTS LOAN AMOUNT". Effective as of the
Effective Date, the definition of "Seasonal Dating Accounts Loan Amount"
contained in Section 1.1 of the Loan Agreement is hereby amended and restated to
read in its entirety as follows:

         "Seasonal Dating Accounts Loan Amount" - the amount indicated below for
the periods indicated below:

                                       4
<PAGE>

<Table>
<Caption>

          Applicable Period                                      Seasonal Dating Accounts Loan Amount
          -----------------                                      ------------------------------------
<S>                                                              <C>
          (a)   December 1 through May 31                        (a) $10,000,000

          (b)   June 1 through November 30                       (b) $ 5.000,000"
</Table>

         2.05 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; AMENDMENT OF
DEFINITION OF "TEMPORARY FINISHED GOODS ELIGIBLE INVENTORY INCREASED AMOUNT."
Effective as of the Effective Date, the definition of "Temporary Finished Goods
Eligible Inventory Increased Amount" contained in Section 1.1 of the Loan
Agreement is hereby amended and restated to read in its entirety as follows:

         "Temporary Finished Goods Eligible Inventory Increased Amount - the
         amount indicated below, during the time period indicated below:

<Table>
<Caption>

          Time Period                                            Maximum Amount
          -----------                                            --------------

<S>                                                              <C>
          (a)   First Use during a Specific Calendar             (a)    the lesser of (i) $1,500,000 or
                Year through the earlier to occur of                    (ii) 20% of the value of Finished
                the 68th day after the First Use during                 Goods Eligible Inventory at the
                a Specific Calendar Year or January 18                  relevant calculation date
                of the immediately succeeding calendar
                year

          (b)   Seven day period beginning on the day            (b)    the lesser of (i) $1,125,000 or
                immediately succeeding the end of the                   (ii) 20% of the value of Finished
                period described in (a) above                           Goods Eligible Inventory at the
                                                                        relevant calculation date

          (c)   Seven day period beginning on the day            (c)    the lesser of (i) $750,000 or
                immediately succeeding the end of the                   (ii) 20% of the value of
                period described in (b) above                           Finished Goods Eligible
                                                                        Inventory at the relevant
                                                                        calculation date
</Table>

                                       5
<PAGE>
<Table>
<S>                                                              <C>
          (d)   Seven day period beginning on the day            (d)    the lesser of (i) $375,000 or
                immediately succeeding the end of the                   (ii) 20% of the value of
                period described in (c) above                           Finished Goods Eligible
                                                                        Inventory at the relevant
                                                                        calculation date

          (e)   Earlier to occur of (i) February 12 of the       (e)    $0.00"
                immediately succeeding calendar year or
                (ii) the day immediately succeeding the
                end of the period described in (d) above,
                and at all times thereafter until the next
                occurring First Use during a Specific
                Calendar Year
</Table>

         2.06 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; AMENDMENT OF
DEFINITION OF "TEMPORARY FINISHED GOODS ELIGIBLE INVENTORY INCREASED AMOUNT
PERIOD." Effective as of the Effective Date, the definition of "Temporary
Finished Goods Eligible Inventory Increased Amount Period" contained in Section
1.1 of the Loan Agreement is hereby amended and restated to read in its entirety
as follows:

         "Temporary Finished Goods Eligible Inventory Increased Amount Period -
         the period of time beginning on (i) the first day after October 15 of
         any calendar year, that the Borrower requests that the Temporary
         Finished Goods Eligible Inventory Increased Amount be included in the
         calculation of the Borrowing Base (the 'First Use during a Specific
         Calendar Year') and ending on (ii) the earlier to occur of February 12
         of the immediately succeeding calendar year or the ninetieth day after
         the First Use during a Specific Calendar Year."

         2.07 AMENDMENT TO SECTION 2.1(B) OF THE LOAN AGREEMENT. Effective as of
the Effective Date, Section 2.1(B) of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:

         "(B) Notwithstanding the foregoing provisions of Section 2.1(A), it is
         expressly agreed and understood that (i) the aggregate outstanding
         amount of all Revolving Credit Loans advanced against Eligible Accounts
         and Eligible Inventory of LEI, Lowrance Contracts and Sea Electronics
         shall not exceed $500,000 at any time; (ii) the aggregate outstanding
         amount of Revolving Credit Loans advanced against Eligible Accounts of
         Lowrance arising from sales to Account Debtors located in Australia and
         Australian Finished Goods Eligible Inventory shall not exceed
         $1,000,000 at any time; (iii) the aggregate outstanding amount of all
         Revolving Credit Loans advanced against Raw Materials Eligible
         Inventory shall not exceed the Permitted Raw Materials Loan Amount at
         any time; (iv) the aggregate outstanding amount of all Revolving Credit
         Loans advanced against Seasonal Dating Accounts shall not exceed the
         Seasonal Dating Accounts Loan Amount at any time and the aggregate
         outstanding amount of all Revolving Credit Loans

                                       6
<PAGE>
         advanced against Seasonal Dating Accounts arising from sales to Persons
         who in the sole judgment of Lender are part of the 'Big Rock Sports
         Group' shall not exceed $4,000,000 at any time; and (v) the aggregate
         outstanding amount of all Revolving Credit Loans advanced against
         Mexican Raw Materials Eligible Inventory shall not exceed $1,000,000 at
         any time."

         2.08 INCREASE IN APPLICABLE ANNUAL RATE AS TO CERTAIN REVOLVING CREDIT
LOANS DURING TEMPORARY FINISHED GOODS ELIGIBLE INVENTORY INCREASED AMOUNT
PERIOD. Effective as of the Effective Date, the parties hereto agree that
notwithstanding anything to the contrary in the Loan Agreement or any other Loan
Document, during the Temporary Finished Goods Eligible Inventory Increased
Amount Period, the Applicable Annual Rate relating to the Revolving Credit Loans
advanced against the Temporary Finished Goods Eligibility Inventory Increased
Amount shall be one and one half percent (1.50%) above the Base Rate.

         2.09 AMENDMENT TO SECTION 3.1(A) OF THE LOAN AGREEMENT. Effective as of
the Effective Date, Section 3.1(A) of the Loan Agreement is hereby deleted in
its entirety and the following substituted in lieu thereof:

         "Outstanding principal on the Loans shall bear interest, calculated
         daily, at the following rates per annum (individually called, as
         applicable, an 'Applicable Annual Rate'): (i) (a) each Term Loan which
         is a LIBOR Loan shall bear interest at a rate per annum equal to 3.00%
         above the LIBOR Base Rate and (b) each Term Loan which is a Base Rate
         Loan shall bear interest at a rate per annum equal to 0.50% above the
         Base Rate, (ii) (a) each Equipment Loan which is a LIBOR Loan shall
         bear interest at a rate per annum equal to 3.00% above the LIBOR Base
         Rate and (b) each Equipment Loan which is a Base Rate Loan shall bear
         interest at a fluctuating rate per annum equal to 0.50% above the Base
         Rate and (iii) (a) each Revolving Credit Loan which is a LIBOR Loan
         shall bear interest at a rate per annum equal to 2.75% above the LIBOR
         Base Rate and (b) each Revolving Credit Loan which is a Base Rate Loan
         shall bear interest at a fluctuating rate per annum equal to 0.50%
         above the Base Rate. Interest rate on each Base Rate Loan shall be
         increased or decreased, as the case may be, by an amount equal to any
         increase or decrease in the Base Rate, with such adjustments to be
         effective as of the opening of business on the day that any such change
         in the Base Rate becomes effective. The Base Rate in effect on the date
         hereof shall be the Base Rate effective as of the opening of business
         on the date hereof, but if this Agreement is executed on a day that is
         not a Business Day, the Base Rate on the date hereof shall be the Base
         Rate effective as of the opening of business on the last Business Day
         immediately preceding the date hereof. The interest rate on each Loan
         shall be calculated daily, based on the actual days elapsed over a 360
         day year. Further, for the purpose of computing interest, all items of
         payment received by Lender shall be applied by Lender (subject to final
         payment of all drafts and other items received in form other than
         immediately available funds) against the Obligations on the first
         Business Day after receipt. The determination of when a payment is
         received by Lender will be made in accordance with Section 3.6."

         2.10 AMENDMENT TO SECTION 3.1(D) OF THE LOAN AGREEMENT. Effective as
of the

                                       7
<PAGE>

Effective Date, the fourth sentence of Section 3.1(D) of the Loan Agreement is
hereby deleted in its entirety and the following is hereby substituted therefor:

         "Borrower recognizes that, with fluctuations in the Base Rate, the
Eurodollar Base Rate and the Maximum Legal Rate, such a result could
inadvertently occur."

         2.11 AMENDMENT TO SECTION 3.2 OF THE LOAN AGREEMENT. Effective as of
the Effective Date, Section 3.2 of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:

         "3.2 Term of Agreement. Subject to Lender's right to cease making Loans
         to Borrower at any time upon or after the occurrence of a Default or an
         Event of Default, this Agreement shall be in effect through and
         including December 31, 2005 (the 'Original Term'). Notwithstanding
         anything herein to the contrary, Lender may terminate this Agreement
         without notice upon or after the occurrence of an Event of Default."

         2.12 AMENDMENT TO ARTICLE III; ADDITION OF NEW SECTIONS. Article III of
the Loan Agreement is hereby amended by adding new Sections 3.8 and 3.9 thereto
which shall read as follows:

         "3.8     Additional Provisions Regarding LIBOR Loans.

                  (A) Manner of Borrowing a LIBOR Loan. In the event Borrower
                  desires to obtain a LIBOR Loan, Borrower shall give Lender
                  prior, written irrevocable notice no later than 11:00 a.m. New
                  York City time on the 2nd Business Day prior to the requested
                  borrowing date specifying (w) Borrower's election to obtain a
                  LIBOR Loan, (x) the date of the proposed borrowing (which
                  shall be a Business Day), (y) the amount to be borrowed, which
                  amount shall be in a minimum principal amount of $100,000 and
                  any increase in integral multiples of $100,000 and (z) the
                  LIBOR Interest Period applicable thereto ('LIBOR Borrowing
                  Notice'). In no event shall Borrower be permitted to have
                  outstanding at any one time LIBOR Loans with more than five
                  (5) different LIBOR Interest Periods.

                  (B) Interest on LIBOR Loans. Each LIBOR Loan shall bear
                  interest from and including the first day of the LIBOR
                  Interest Period applicable thereto (but not including the last
                  day of such LIBOR Interest Period) at the interest rate
                  determined as applicable to such LIBOR Loan, but interest on
                  such LIBOR Loan shall be payable as provided in Section 3.5 of
                  this Agreement.

                  (C) Conversion of Base Rate Loans. Provided that no Default
                  has occurred which is then continuing, Borrower may, on any
                  Business Day, convert any Base Rate Loan into a LIBOR Loan. If
                  Borrower desires to convert a Base Rate Loan, Borrower shall
                  give Lender not less than two (2) Business Days' prior written
                  notice (prior to 11:00 a.m. New York City time on such
                  Business Day), specifying the date of such conversion and the
                  amount to be converted. Each

                                       8
<PAGE>

                  conversion into or conversion of a LIBOR Loan shall be in a
                  minimum principal amount of $100,000 and may increase in
                  integral multiples of $100,000 in excess thereof. After giving
                  effect to any conversion of Base Rate Loans to LIBOR Loans,
                  Borrower shall not be permitted to have outstanding at any one
                  time LIBOR Loans with more than five (5) different Interest
                  Periods.

                  (D) Continuation of LIBOR Loans. Borrower shall have the right
                  on two (2) Business Days' prior irrevocable written notice
                  given to Lender by Borrower (prior to 11:00 a.m. New York City
                  time on such Business Day), subject to the provisions hereof,
                  to continue any LIBOR Loan into a subsequent LIBOR Interest
                  Period of the same or a different permitted duration, in each
                  case subject to the satisfaction of the following conditions:

                           (i) in the case of a continuation of less than all
                           LIBOR Loans, the LIBOR Loans continued shall each be
                           in a minimum principal amount of $100,000 and may
                           increase in integral multiples of $100,000; and

                           (ii) no LIBOR Loan (or portion thereof) may be
                           continued as a LIBOR Loan if a Default has occurred
                           which is then continuing or if, after giving effect
                           to such continuation, Borrower shall have outstanding
                           more than five (5) separate LIBOR Loans in the
                           aggregate.

                           If Borrower shall fail to give timely notice of its
                  election to continue any LIBOR Loan or portion thereof as
                  provided above, or if such continuation shall not be
                  permitted, such LIBOR Loan or portion thereof, unless such
                  LIBOR Loan shall be repaid, shall automatically be converted
                  into a Base Rate Loan at the end of the LIBOR Interest Period
                  then in effect with respect to such LIBOR Loan.

                  (E) Inability to Make LIBOR Loans. Notwithstanding any other
                  provision hereof, if any applicable law, treaty, regulation or
                  directive, or any change therein or in the interpretation or
                  application thereof, shall make it unlawful for Lender (for
                  purposes of this Section 3.8(E), the term 'Lender' shall
                  include the office or branch where Lender or any corporation
                  or bank then controlling Lender makes or maintains any LIBOR
                  Loans) to make or maintain its LIBOR Loans, or if with respect
                  to any LIBOR Interest Period, Lender is unable to determine
                  the LIBOR Base Rate relating thereto, or adverse or unusual
                  conditions in, or changes in applicable law relating to, the
                  London interbank market make it, in the reasonable judgment of
                  Lender, impracticable to fund therein any of the LIBOR Loans,
                  or make the projected LIBOR Base Rate unreflective of the
                  actual costs of funds therefor to Lender, the obligation of
                  Lender to make LIBOR Loans hereunder shall forthwith be
                  suspended during the pendency of such circumstances and
                  Borrower shall, if any affected LIBOR Loans are then
                  outstanding, promptly upon request from Lender, convert such
                  affected LIBOR Loans into Base Rate Loans.

                                       9
<PAGE>

                  (F) Prepayment of LIBOR Loans. Borrower may prepay a LIBOR
                  Loan only upon at least three (3) Business Days prior written
                  notice to Lender (which notice shall be irrevocable), and any
                  such prepayment shall occur only on the last day of the LIBOR
                  Interest Period for such LIBOR Loan. Borrower shall pay to
                  Lender, upon request of Lender, such amount or amounts as
                  shall be sufficient (in the reasonable opinion of Lender) to
                  compensate Lender for any loss, cost, or expense incurred as a
                  result of: (i) any payment of a LIBOR Loan on a date other
                  than the last day of the LIBOR Interest Period for such LIBOR
                  Loan; (ii) any failure by Borrower to borrow a LIBOR Loan on
                  the date specified by Borrower's written notice; or (iii) any
                  failure by Borrower to pay a LIBOR Loan on the date for
                  payment specified in Borrower's written notice. Without
                  limiting the foregoing, Borrower shall pay to Lender a 'yield
                  maintenance fee' in an amount computed as follows: the current
                  rate for United States Treasury securities (bills on a
                  discounted basis shall be converted to a bond equivalent) with
                  a maturity date closest to the LIBOR Interest Period chosen
                  pursuant to the LIBOR Loan as to which the prepayment is made,
                  shall be subtracted from the LIBOR Base Rate in effect at the
                  time of prepayment. If the result is zero or a negative
                  number, there shall be no yield maintenance fee. If the result
                  is a positive number, then the resulting percentage shall be
                  multiplied by the amount of the principal balance being
                  prepaid. The resulting amount shall be divided by 360 and
                  multiplied by the number of days remaining in the LIBOR
                  Interest Period chosen pursuant to the LIBOR Loan as to which
                  prepayment is made. Said amount shall be reduced to present
                  value calculated by using the above referenced United States
                  Treasury securities rate and the number of days remaining in
                  the term chosen pursuant to the LIBOR Loan as to which
                  prepayment is made. The resulting amount shall be the yield
                  maintenance fee due to Lender upon the prepayment of a LIBOR
                  Loan. If by reason of an Event of Default, Lender elects to
                  declare the Obligations to be immediately due and payable,
                  then any yield maintenance fee with respect to a LIBOR Loan
                  shall become due and payable in the same manner as though the
                  Borrower exercised such right of prepayment.

                  (G) Basis for Determining Interest Rate Inadequate or Unfair.
                  In the event that Lender shall have determined that:

                           (i) reasonable means do not exist for ascertaining
                           the LIBOR Base Rate for any LIBOR Interest Period; or

                           (ii) Dollar deposits in the relevant amount and for
                           the relevant maturity are not available in the London
                           interbank market with respect to a proposed LIBOR
                           Loan, or a proposed conversion of a Base Rate Loan
                           into a LIBOR Loan; then

                  Lender shall give Borrower prompt written, telephonic or
                  electronic notice of the determination of such effect. If such
                  notice is given, (i) any such requested

                                       10
<PAGE>

                  LIBOR Loan shall be made as a Base Rate Loan, unless Borrower
                  shall notify Lender no later than 10:00 a.m. (New York City
                  time) two (2) Business Days prior to the date of such proposed
                  borrowing that the request for such borrowing shall be
                  canceled or made as an unaffected type of LIBOR Loan, and (ii)
                  any Base Rate Loan which was to have been converted to an
                  affected type of LIBOR Loan shall be continued as or converted
                  into a Base Rate Loan, or, if Borrower shall notify Lender, no
                  later than 10:00 a.m. (New York City time) two (2) Business
                  Days prior to the proposed conversion, shall be maintained as
                  an unaffected type of LIBOR Loan.

                  (H) Lender Statements; Survival of Indemnity. Within sixty
                  (60) days of the date upon which Lender suspends the
                  availability of LIBOR Loans under Section 3.8(E) hereof or
                  learns of any loss or cost or expenses for which Borrower is
                  to pay Lender under Section 3.8(F) hereof, Lender shall
                  deliver a written statement as to the amount due under Section
                  3.8(E) or Section 3.8(F). Such written statement shall set
                  forth in reasonable detail the calculations and basis therefor
                  upon which Lender determined such amount and shall be final,
                  conclusive and binding on Borrower in the absence of manifest
                  error. Unless otherwise provided herein, the amount specified
                  in the written statement shall be payable on demand after
                  receipt by Borrower of the written statement.

         3.9 Yield Protection. If either (i) the adoption of any applicable law,
         rule or regulation, or any change therein, or any change in the
         interpretation or administration thereof by any governmental authority,
         central bank or comparable agency charged with the interpretation or
         administration thereof, or compliance by Lender with any request or
         directive (whether or not having the force of law) of any such
         authority, central bank or comparable agency shall subject Lender to
         any tax (including without limitation any United States interest
         equalization or similar tax, however named), duty or other charge with
         respect to any LIBOR Loan or Lender's obligation to compute interest on
         the principal balance of any LIBOR Loan at a rate based upon the LIBOR
         Base Rate, or shall change the basis of taxation of payments to Lender
         of the principal of or interest on any LIBOR Loan or any other amounts
         due under this Agreement in respect of any LIBOR Loan or Lender's
         obligation to compute the interest on the principal balance of any
         LIBOR Loan at a rate based upon the LIBOR Base Rate, or (ii) any
         governmental authority, central bank or other comparable authority
         shall at any time impose, modify or deem applicable any reserve
         (including, without limitation, any imposed by the Board of Governors
         of the Federal Reserve System), special deposit or similar requirement
         against assets of, deposits with or for the account of, or credit
         extended by, Lender, or shall impose on Lender (or its LIBOR lending
         office) or any relevant interbank LIBOR market any other condition
         affecting any LIBOR Loan or Lender's obligation to compute the interest
         on the principal balance of any LIBOR Loan at a rate based upon the
         LIBOR Base Rate; and the result of any of the foregoing is to increase
         the cost to Lender of maintaining any LIBOR Loans, or to reduce the
         amount of any sum received or receivable by Lender under this Agreement
         by an amount deemed by Lender to be material, then upon demand by
         Lender, Borrower shall pay to Lender such additional

                                       11
<PAGE>

         amount or amounts as will compensate Lender for such increased cost or
         reduction. Lender will promptly notify Borrower of any event of which
         it has knowledge, occurring after the date hereof, which will entitle
         Lender to compensation pursuant to this Section 3.9. A certificate of
         Lender claiming compensation under this Section 3.9 and setting forth
         the additional amount or amounts to be paid to Lender hereunder shall
         be conclusive in the absence of manifest error."

         2.13 AMENDMENT TO SECTION 9.2(M) OF THE LOAN AGREEMENT. Effective as of
the Effective Date, Section 9.2(M) Capital Lease Obligations of the Loan
Agreement is hereby amended and restated to read in its entirety as follows:

         "(M) Capital Lease Obligations. Incur Capital Lease Obligations which,
         in the aggregate, as to Borrower and its Subsidiaries exceed $3,500,000
         during any fiscal year of Borrower."

         2.14 AMENDMENT TO SECTION 9.3 OF THE LOAN AGREEMENT. Effective as of
the Effective Date, Section 9.3 of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:

         "9.3 Specific Financial Covenants. During the term of this Agreement
         and thereafter for so long as there are any Obligations, Borrower
         covenants that, unless otherwise consented to by Lender in writing,
         Borrower shall:

                  (A) [Internationally Omitted]

                  (B) [Internationally Omitted]

                  (C) Fixed Charge Ratio. Maintain, on a Consolidated basis, a
                  Fixed Charge Ratio of not less than 1.1 to 1.0 for the twelve
                  calendar month period ending on the last day of each October,
                  January, April and July, beginning with October 31, 2002.

                  (D) Minimum EBITDA. Maintain, on a Consolidated basis, EBITDA
                  of not less than $3,174,000 for the twelve calendar month
                  ending on the last day of each October, January, April and
                  July, beginning with October 31, 2002.

                  (E) Maximum Inventory. Maintain, on a Consolidated basis,
                  Inventory with an aggregate value (calculated on the basis of
                  the higher of cost or market with cost calculated on a
                  first-in, first-out basis) of not more than the amount shown
                  below as of the date indicated below:

                                       12
<PAGE>
<Table>
<Caption>
                                      Date                                  Amount
                                      ----                                  ------
<S>                                                                  <C>
                  (i)    Last day of each October, beginning         (i)    $16,000,000
                         October 31, 2002

                  (ii)   Last day of each January, beginning         (ii)   $22,500,000
                         January 31, 2003

                  (iii)  Last day of each April beginning            (iii)  $16,750,000
                         April 30, 2003

                  (iv)   Last day of each July, beginning            (iv)   $14,000,000"
                         July 31, 2003
</Table>

         2.15 AMENDMENT TO REVOLVING CREDIT NOTES. Effective as of the Effective
Date, each Revolving Credit Note is amended by deleting therefrom the date
"December 31, 2002" and substituting therefor the date "December 31, 2005".

         2.16 AMENDMENT FEE. In consideration for the agreements of Lender
contained herein but subject to Section 3.1(D) of the Loan Agreement, Borrower
agrees to pay Lender a fee of $50,000. Such fee shall be due and payable and
shall be fully earned as of the date of execution of this Amendment.

                                   ARTICLE III
                              CONDITIONS PRECEDENT

         3.01 CONDITIONS PRECEDENT. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent, unless
specifically waived in writing by Lender:

                  (a) Lender shall have received each of the following, each in
         form and substance satisfactory to Lender: (i) this Amendment, duly
         executed by Borrower; (ii) Sixth Amendment to Mortgage, Security
         Agreement, Financing Statement and Assignment of Rents, duly executed
         by Lowrance regarding the existing Mortgage, in favor of Lender,
         covering Lowrance's Tulsa, Oklahoma real property; and (iii) such
         additional documents, instruments and information as Lender or its
         legal counsel may request;

                  (b) The representations and warranties contained herein, in
         the Loan Agreement and in the other Loan Documents, as each is amended
         hereby, shall be true and correct as of the date hereof, as if made on
         the date hereof;

                  (c) After giving effect to this Amendment, no Default or Event
         of Default shall have occurred and be continuing, unless such Default
         or Event of Default has been specifically waived in writing by Lender;

                  (d) All corporate proceedings taken in connection with the
         transactions contemplated by this Amendment and all documents,
         instruments and other legal matters incident thereto shall be
         satisfactory to Lender and its legal counsel; and

                                       13
<PAGE>

                  (e) Lender shall have received, in immediately available
         funds, payment of the fee described in Section 2.16 of this Amendment.

                                   ARTICLE IV
                                    NO WAIVER

         Nothing contained in this Amendment shall be construed as a waiver by
Lender of any covenant or provision of the Loan Agreement, the other Loan
Documents, this Amendment, or of any other contract or instrument between
Borrower and Lender, and the failure of Lender at any time or times hereafter to
require strict performance by Borrower of any provision thereof shall not waive,
affect or diminish any right of Lender to thereafter demand strict compliance
therewith. Lender hereby reserves all rights granted under the Loan Agreement,
the other Loan Documents, this Amendment and any other contract or instrument
between Borrower and Lender.

                                    ARTICLE V
                  RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

         5.01 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Loan Agreement and the other Loan Documents, and, except as
expressly modified and superseded by this Amendment, the terms and provisions of
the Loan Agreement and the other Loan Documents are ratified and confirmed and
shall continue in full force and effect. Borrower and Lender agree that the Loan
Agreement and the other Loan Documents, as amended hereby, shall continue to be
legal, valid, binding and enforceable in accordance with their respective terms.

         5.02 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Lender that (a) the execution, delivery and performance of this
Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of Borrower and will not violate the Certificate of Incorporation or
Bylaws of Borrower; (b) the representations and warranties contained in the Loan
Agreement, as amended hereby, and any other Loan Documents are true and correct
on and as of the date hereof and on and as of the date of execution hereof as
though made on and as of each such date; (c) no Default or Event of Default
under the Loan Agreement, as amended hereby, has occurred and is continuing; (d)
Borrower is in full compliance with all covenants and agreements contained in
the Loan Agreement and the other Loan Documents, as amended hereby; (e) the
Borrower's Certificate of Incorporation and Bylaws are in full force and effect
on and as of the date hereof without modification or amendment in any respect
since November 1, 1996; (f) as of the date hereof, (i) Borrower is in existence
and in corporate and tax good standing in the State of its organization, (ii)
the Borrower is qualified to do business as a foreign corporation and is in
corporate and tax good standing in each jurisdiction where Borrower is doing
business and is required to be so qualified, (iii) Borrower does not owe
franchise taxes or other taxes required to maintain its corporate existence and
no franchise tax reports are due, and (iv) no proceedings are pending for
forfeiture of the Borrower's charter or for its dissolution either voluntarily
or involuntarily; and (g) the officer of Borrower executing this Amendment has
been duly elected and is, at present, qualified and acting in the office
indicated below such officer's name and is duly authorized to execute this
Amendment on behalf of Borrower.

                                       14
<PAGE>

                                   ARTICLE VI
                            MISCELLANEOUS PROVISIONS

         6.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in the Loan Agreement or any other Loan Document, including,
without limitation, any document furnished in connection with this Amendment,
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Lender or any closing shall affect the
representations and warranties or the right of Lender to rely upon them.

         6.02 REFERENCE TO LOAN AGREEMENT. Each of the Loan Agreement and the
other Loan Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof or pursuant
to the terms of the Loan Agreement, as amended hereby, are hereby amended so
that any reference in the Loan Agreement and such other Loan Documents to the
Loan Agreement shall mean a reference to the Loan Agreement, as amended hereby.

         6.03 EXPENSES OF LENDER. As provided in the Loan Agreement, Borrower
agrees to pay on demand all costs and expenses incurred by Lender in connection
with the preparation, negotiation and execution of this Amendment and the other
Loan Documents executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including, without limitation, the costs
and fees of Lender's legal counsel, and all costs and expenses incurred by
Lender in connection with the enforcement or preservation of any rights under
the Loan Agreement, as amended hereby, or any other Loan Documents, including,
without, limitation, the costs and fees of Lender's legal counsel.

         6.04 SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

         6.05 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of Lender and Borrower and their respective successors and
assigns, except that Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.

         6.06 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.

         6.07 EFFECT OF WAIVER. No consent or waiver, express or implied, by
Lender to or for any breach of or deviation from any covenant or condition by
Borrower shall be deemed a consent to or waiver of any other breach of the same
or any other covenant, condition or duty.

                                       15
<PAGE>

         6.08 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

         6.09 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE
IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS.

         6.10 FINAL AGREEMENT. THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS,
EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE
LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO
MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS
AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER AND
LENDER.

         6.11 RELEASE. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE "OBLIGATIONS" OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF
ANY KIND OR NATURE FROM LENDER. BORROWER HEREBY VOLUNTARILY AND KNOWINGLY
RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS, OFFICERS, DIRECTORS,
AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS,
ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER,
KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED,
CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART
ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH THE BORROWER MAY NOW OR
HEREAFTER HAVE AGAINST LENDER, ITS PREDECESSORS, OFFICERS, DIRECTORS, AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH
CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, AND ARISING FROM ANY "LOANS", INCLUDING, WITHOUT LIMITATION, ANY
CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST
IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE LOAN AGREEMENT OR OTHER LOAN DOCUMENTS, AND THE NEGOTIATION
OF AND EXECUTION OF THIS AMENDMENT.

                                       16
<PAGE>

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       17
<PAGE>

         IN WITNESS WHEREOF, this Amendment has been executed and is effective
as of the date first above-written.

                                            "LENDER"

                                            FLEET CAPITAL CORPORATION

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

                                            "BORROWER"

                                            LOWRANCE ELECTRONICS, INC.

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

                                            LEI EXTRAS, INC.

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

                                            LOWRANCE CONTRACTS, INC.

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

                                            SEA ELECTRONICS, INC.

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

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