Document:

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                         FOURTH SUPPLEMENTAL INDENTURE

                                    BETWEEN

                          TRANSOCEAN SEDCO FOREX INC.

                                      AND

                           THE CHASE MANHATTAN BANK,

                                   as Trustee

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

                                  MAY 11, 2001

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                               TABLE OF CONTENTS

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<S>           <C>                                                     <C>
ARTICLE ONE THE 2021 DEBENTURES                                        1
 SECTION 101  Designation of 2021 Debentures; Establishment of Form.   1
 SECTION 102  Amount................................................   1
 SECTION 103  Interest..............................................   1
 SECTION 104  Additional Amounts....................................   1
 SECTION 105  Denominations.........................................   1
 SECTION 106  Place of Payment......................................   1
 SECTION 107  Redemption............................................   1
 SECTION 108  Conversion............................................   1
 SECTION 109  Maturity..............................................   1
 SECTION 110  Repurchase............................................   1
 SECTION 111  Discharge of Liability on 2021 Debentures.............   1
 SECTION 112  Other Terms of 2021 Debentures........................   1

ARTICLE TWO AMENDMENTS TO THE INDENTURE                                1
 SECTION 201  Definitions...........................................   1
 SECTION 202  Registration, Registration of Transfer and Exchange...   1
 SECTION 203  Mutilated, Destroyed, Lost and Stolen Securities......   1
 SECTION 204  Payment of Interest; Interest Rights Preserved........   1
 SECTION 205  Satisfaction and Discharge of Indenture...............   1
 SECTION 206  Discharge of Liability on Securities of Any Series....   1
 SECTION 207  Unconditional Right of Holders to Receive Principal,
              Premium and Interest..................................   1
 SECTION 208  Consolidation, Merger and Sale........................   1
 SECTION 209  Supplemental Indentures Without Consent of Holders....   1
 SECTION 210  Supplemental Indenture with Consent of Holder.........   1
 SECTION 211  Maintenance of Office or Agency.......................   1
 SECTION 212  Redemption............................................   1
 SECTION 213  Conversion, Repurchase................................   1
 SECTION 214  Amendment to Events of Default........................   1

ARTICLE THREE MISCELLANEOUS PROVISIONS                                 1
 SECTION 301  Integral Part.........................................   1
 SECTION 302  General Definitions...................................   1
 SECTION 303  Adoption, Ratification and Confirmation...............   1
 SECTION 304  Counterparts..........................................   1
 SECTION 305  Governing Law.........................................   1

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                          TRANSOCEAN SEDCO FOREX INC.

                         FOURTH SUPPLEMENTAL INDENTURE

     THIS FOURTH SUPPLEMENTAL INDENTURE, dated as of May 11, 2001 (the "Fourth
Supplemental Indenture"), between Transocean Sedco Forex Inc. (formerly
Transocean Offshore Inc.), a Cayman Islands exempted company limited by shares
(the "Company"), and The Chase Manhattan Bank (formerly Texas Commerce Bank
National Association) (the "Trustee").

                              W I T N E S S E T H

     WHEREAS, the Company has heretofore executed and delivered to the Trustee
an Indenture, dated as of April 15, 1997 (as supplemented by the First
Supplemental Indenture thereto dated as of April 15, 1997, the Second
Supplemental Indenture thereto dated as of May 14, 1999, the Third Supplemental
Indenture thereto dated as of May 24, 2000 and this Fourth Supplemental
Indenture, the "Indenture"), providing for the issuance from time to time of one
or more series of the Company's Securities;

     WHEREAS, Section 901(5) of the Indenture provides that the Company and the
Trustee may from time to time enter into one or more indentures supplemental
thereto to establish the form or terms of Securities of a new series;

     WHEREAS, Section 901(8) of the Indenture provides that the Company and the
Trustee may from time to time enter into one or more indentures supplemental
thereto to make provision with respect to matters or questions arising under the
Indenture which do not adversely affect the interests of the Holders of
Securities of any series in any material respect;

     WHEREAS, Sections 901(2) and 901(3) of the Indenture permit the execution
of supplemental indentures without the consent of any Holders to add to the
covenants of the Company for the benefit of, and to add any additional Events of
Default with respect to, all or any series of Securities;

     WHEREAS, Section 901(4) of the Indenture permits the execution of
supplemental indentures without the consent of any Holders to change or
eliminate any of the provisions of the Indenture; provided that such change or
elimination does not adversely affect any outstanding Security of any series
created prior to the execution of such supplemental indenture;

     WHEREAS, Section 301 of the Indenture provides that the Company may enter
into supplemental indentures to establish the terms and provisions of a series
of Securities issued pursuant to the Indenture;

     WHEREAS, the Company desires to issue 1.5% Convertible Debentures due
May 15, 2021 (the "2021 Debentures"), a new series of Security the issuance of
which was authorized by or pursuant to resolution of the Board of Directors of
the Company;
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     WHEREAS, the Company, pursuant to the foregoing authority, proposes in and
by this Fourth Supplemental Indenture to supplement and amend the Indenture
insofar as it will apply only to the 2021 Debentures in certain respects; and

     WHEREAS, all things necessary have been done to make the 2021 Debentures,
when executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Fourth Supplemental Indenture a valid agreement of the Company, in accordance
with their and its terms.

     NOW THEREFORE:

     In consideration of the premises provided for herein, the Company and the
Trustee mutually covenant and agree for the equal and proportionate benefit of
all Holders of the 2021 Debentures as follows:

                                  ARTICLE ONE

                              THE 2021 DEBENTURES

SECTION 101   Designation of 2021 Debentures; Establishment of Form.

     There shall be a series of Securities designated "1.5% Convertible
Debentures Due May 15, 2021" of the Company (the "2021 Debentures"), and the
form thereof shall be substantially as set forth in Annex A hereto, which is
incorporated into and shall be deemed a part of this Fourth Supplemental
Indenture, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers of the Company executing such 2021 Debentures, as
evidenced by their execution of the 2021 Debentures.

     The 2021 Debentures will initially be issued in permanent global form,
substantially in the form set forth in Annex A hereto (the "Global Securities"),
as a Book-Entry Security.  Each Global Security shall represent such of the
Outstanding 2021 Debentures as shall be specified therein and shall provide that
it shall represent the aggregate amount of Outstanding 2021 Debentures from time
to time endorsed thereon and that the aggregate amount of Outstanding 2021
Debentures represented thereby may from time to time be reduced to reflect
exchanges and redemptions.  Any endorsement of a Global Security to reflect the
amount, or any increase or decrease in the amount, of Outstanding 2021
Debentures represented thereby shall be made by the Trustee in accordance with
written instructions or such other written form of instructions as is customary
for the Depositary, from the Depositary or its nominee on behalf of any Person
having the beneficial interest in the Global Security.

     The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global Securities.

     The Company initially appoints the Trustee to act as Paying Agent and
Conversion Agent with respect to the 2021 Debentures.

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SECTION 102  Amount.

     (a) The Trustee shall authenticate and deliver 2021 Debentures for original
issue in an aggregate Principal Amount of up to $400,000,000 upon Company Order
for the authentication and delivery of 2021 Debentures, without any further
action by the Company. The aggregate Principal Amount of 2021 Debentures that
may be authenticated and delivered under the Indenture may not exceed the amount
set forth in the foregoing sentence, except for 2021 Debentures authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other 2021 Debentures pursuant to Section 204, 304, 305, 306, 906 or 1107 of
the Indenture.

     (b) The Company may not issue new 2021 Debentures to replace 2021
Debentures that it has paid or delivered to the Trustee for cancellation or that
any Holder has converted pursuant to Article Fourteen.

SECTION 103  Interest.

     The 2021 Debentures shall bear interest at the rate set forth under the
caption "Interest" in the 2021 Debentures, commencing on the Issue Date of the
2021 Debentures.  Interest on the 2021 Debentures shall be payable to the
persons in whose name the 2021 Debentures are registered at the close of
business on the Regular Record Date for such interest payment.  The date from
which interest shall accrue for each 2021 Debenture shall be May 11, 2001.  The
Interest Payment Dates on which interest on the 2021 Debentures shall be payable
are May 15 and November 15, commencing on November 15, 2001.  The Regular Record
Dates for the interest payable on the 2021 Debentures on any Interest Payment
Date shall be May 1 or November 1, as the case may be, immediately preceding
such Interest Payment Date.

SECTION 104  Additional Amounts.

     Additional Amounts with respect to the 2021 Debentures shall be payable in
accordance with the provisions and in the amounts set forth under the caption
"Tax Additional Amounts" in the 2021 Debentures and in accordance with the
provisions of the Indenture.

SECTION 105  Denominations.

     The 2021 Debentures shall be in fully registered form without coupons in
denominations of $1,000 of Principal Amount or any integral multiple thereof.

SECTION 106  Place of Payment.

     The Place of Payment for the 2021 Debentures and the place or places where
the principal of and interest on the 2021 Debentures shall be payable, the 2021
Debentures may be surrendered for registration of transfer, the 2021 Debentures
may be surrendered for exchange, repurchase, redemption or conversion and where
notices may be given to the Company in respect of the 2021 Debentures is at the
office or agency of the Trustee in New York, New York or in Dallas, Texas;
provided that payment of interest may be made at the option of the Company by
check mailed to the address of the person entitled thereto as such address shall
appear in the

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Security Register (as defined in the Indenture) or by wire transfer of
immediately available funds to the accounts specified by the Holder of such 2021
Debentures.

SECTION 107  Redemption.

     (a) There shall be no sinking fund for the retirement of the 2021
Debentures.

     (b) The Company, at its option, may redeem the 2021 Debentures in
accordance with the provisions of and at the Redemption Prices set forth under
the captions "Optional Redemption" and "Notice of Redemption" in the 2021
Debentures and in accordance with the provisions of the Indenture, including,
without limitation, Article Eleven.

     (c) The Company, at the option of the Holders thereof, shall redeem the
2021 Debentures in accordance with the provisions of and at the Change in
Control Purchase Prices set forth under the caption "Purchase of Securities at
Option of Holder Upon a Change in Control" in the 2021 Debentures and in
accordance with the provisions of the Indenture, including, without limitation,
Article Eleven.

SECTION 108  Conversion.

     The 2021 Debentures shall be convertible in accordance with the provisions
and at the Conversion Rate set forth under the caption "Conversion" in the 2021
Debentures and in accordance with the provisions of the Indenture, including,
without limitation, Article Fourteen.

SECTION 109  Maturity.

     The date on which the principal of the 2021 Debentures is payable, unless
accelerated pursuant to the Indenture, shall be May 15, 2021.

SECTION 110  Repurchase.

     The 2021 Debentures shall be repurchased by the Company in accordance with
the provisions and at the Repurchase Prices set forth under the caption
"Repurchase by the Company at the Option of the Holder" in the 2021 Debentures
and in accordance with the provisions of the Indenture, including, without
limitation, Article Fifteen.

SECTION 111  Discharge of Liability on 2021 Debentures.

     Section 403 of the Indenture shall be applicable to the 2021 Debentures.

SECTION 112  Other Terms of 2021 Debentures.

     Without limiting the foregoing provisions of this Article One, the terms of
the 2021 Debentures shall be as set forth in the form of 2021 Debentures set
forth in Annex A hereto and as provided in the Indenture.

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                                  ARTICLE TWO

                          AMENDMENTS TO THE INDENTURE

     The amendments contained herein shall apply to 2021 Debentures only and not
to any other series of Security issued under the Indenture and any covenants
provided herein are expressly being included solely for the benefit of the 2021
Debentures. These amendments shall be effective for so long as there remains any
2021 Debentures Outstanding.

SECTION 201  Definitions.

     Section 101 of the Indenture is amended by inserting or restating, as the
case may be, in their appropriate alphabetical position, the following
definitions:

     "Capital Stock" or "capital stock" of any Person means any and all shares,
interests, partnership interests, participations, rights or other equivalents
(however designated) of such Person's equity interest (however designated)
issued by that Person.

     "Change in Control" has the meaning specified in Section 1110.

     "Change in Control Purchase Date" has the meaning specified in
Section 1110.

     "Change in Control Purchase Notice" has the meaning specified in
Section 1110.

     "Change in Control Purchase Price" has the meaning specified in
Section 1110.

     "Company Notice Date" has the meaning specified in Section 1503.

     "Conversion Agent" shall be the agent specified in Section 101.

     "Conversion Date" has the meaning specified in Section 1402.

     "Conversion Rate" has the meaning specified in Section 1401.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute.

     "Global Securities" has the meaning specified in Section 101.

     "Issue Date" of any 2021 Debenture means the date on which the 2021
Debenture was originally issued or deemed issued as set forth on the face of the
2021 Debenture.

     "Issue Price" of any 2021 Debenture means, in connection with the original
issuance of such 2021 Debenture, the initial issue price at which the 2021
Debenture is sold as set forth on the face of the 2021 Debenture.

     "Market Price" has the meaning specified in Section 1504.

     "non-electing share" has the meaning specified in Section 1411.

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     "Ordinary Shares" means any stock of any class of the Company (including,
without limitation, the Company's ordinary shares of a nominal or par value of
$0.01 per share) which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by the Company.

     "Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:

            (i) Securities theretofore cancelled by the Trustee or delivered to
     the Trustee for cancellation;

            (ii) Securities for whose payment, repurchase or redemption money or
     Ordinary Shares in the necessary amount has been theretofore deposited with
     the Trustee or any Paying Agent (other than the Company) in trust or set
     aside and segregated in trust by the Company (if the Company shall act as
     its own Paying Agent) for the Holders of such Securities; provided that, if
     such Securities are to be redeemed, notice of such redemption has been duly
     given pursuant to this Indenture or provision therefor satisfactory to the
     Trustee has been made;

            (iii) Securities which have been cancelled pursuant to Section 309
     or in exchange for or in lieu of which other Securities have been
     authenticated and delivered pursuant to this Indenture, other than any such
     Securities in respect of which there shall have been presented to the
     Trustee proof satisfactory to it that such Securities are held by a bona
     fide purchaser in whose hands such Securities are valid obligations of the
     Company; and

            (iv) 2021 Debentures converted for Ordinary Shares pursuant to
     Article Fourteen;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.

     "Principal Amount" of a 2021 Debenture means the Principal Amount as set
forth on the face of the 2021 Debenture.

     "Repurchase Date" has the meaning specified in Section 1501.

     "Repurchase Notice" has the meaning specified in Section 1501.

     "Repurchase Price" has the meaning specified in Section 1501.

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     "Sale Price" has the meaning specified in Section 1504.

     "Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture, including 2021 Debentures.

     "Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.

     "Tax Additional Amounts" has the meaning specified in the form of 2021
Debentures attached hereto as Annex A.

     "Trading Day" means a day during which trading in securities generally
occurs on the New York Stock Exchange or, if the Ordinary Shares are not listed
on the New York Stock Exchange, on the principal other national or regional
securities exchange on which the Ordinary Shares are then listed or, if the
Ordinary Shares are not listed on a national or regional securities exchange, on
the National Association of Securities Dealers Automated Quotation System or, if
the Ordinary Shares are not quoted on the National Association of Securities
Dealers Automated Quotation System, on the principal other market on which the
Ordinary Shares are then traded.

     "2021 Debentures" means the 1.5% Convertible Debentures due May 15, 2021 of
the Company authorized by or pursuant to resolution of the Board of Directors.

     "Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof under ordinary circumstances have the power to vote in
the election of the board of directors, managers or trustees of any Person (or
other Persons performing similar functions), irrespective of whether or not, at
the time, Capital Stock of any other class or classes shall have, or might have,
voting power by reason of the happening of any contingency.

SECTION 202  Registration, Registration of Transfer and Exchange.

     The Indenture shall be amended by replacing the eighth paragraph of
Section 305 with the following paragraph:

          The Company shall not be required (i) to issue, register the transfer
     of or exchange the Securities of any series during a period beginning at
     the opening of business 15 days before the day of the mailing of a notice
     of redemption of Securities of that series selected for redemption and
     ending at the close of business on the day of such mailing, (ii) to
     register the transfer of or exchange any 2021 Debenture so selected for
     redemption in whole or in part, except the unredeemed portion of any
     Security being redeemed in part, or (iii) to exchange or register a
     transfer of any 2021 Debenture or portions thereof in respect of which a
     Change in Control Purchase Notice or Repurchase Notice has been delivered
     and not withdrawn by the Holder thereof (except, in the case of the
     purchase of a 2021 Debenture in part, the portion not to be purchased).

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SECTION 203  Mutilated, Destroyed, Lost and Stolen Securities.

     The Indenture shall be amended by replacing  the fourth paragraph of
Section 306 with the following paragraph:

          In case any such mutilated, destroyed, lost or stolen Security has or
     is about to become due and payable, or is about to be redeemed or purchased
     by the Company upon a Change in Control pursuant to Article Eleven or
     purchased by the Company on a Repurchase Date pursuant to Article Fifteen,
     the Company in its discretion may, instead of issuing a new Security, pay
     such Security.

SECTION 204  Payment of Interest; Interest Rights Preserved.

     The Indenture shall be amended by inserting the following paragraph before
the final paragraph in Section 307:

          In the case of any 2021 Debenture or portion thereof which is
     surrendered for conversion after the close of business on the Regular
     Record Date immediately preceding any Interest Payment Date and prior to
     the opening of business on such next succeeding Interest Payment Date
     (unless such 2021 Debenture or portion thereof which is being surrendered
     for conversion has been called for redemption on a Redemption Date within
     such period), interest whose Stated Maturity is on such Interest Payment
     Date shall be payable on such Interest Payment Date notwithstanding such
     conversion, and such interest (whether or not punctually paid or duly
     provided for) shall be paid to the Person in whose name that 2021 Debenture
     (or one or more Predecessor Securities) is registered at the close of
     business on such Regular Record Date; provided, however, that such payment
     of interest shall be subject to the payment to the Company by the Holder of
     such 2021 Debenture or portion thereof surrendered for conversion (such
     payment to accompany such surrender) of an amount equal to the amount of
     such interest, in accordance with but only to the extent required by
     Section 1402. Except as otherwise provided in the immediately preceding
     sentence, in the case of any 2021 Debenture which is converted, interest
     whose Stated Maturity is after the date of conversion of such 2021
     Debenture shall not be payable.

SECTION 205  Satisfaction and Discharge of Indenture.

     The Indenture shall be amended by replacing the last paragraph of Section
401 with the following paragraph:

          Notwithstanding the satisfaction and discharge of this Indenture with
     respect to the Outstanding Securities of such series pursuant to this
     Section 401, the obligations of the Company to the Trustee under Section
     607, the obligations of the Trustee to any Authenticating Agent under
     Section 614 and, except for a discharge pursuant to subclause (A) of clause
     (1) of this Section 401, the obligations of the Company under Sections 305,
     306, 404, 610(e), 701, 1001 and 1002 and Articles Eleven, Fourteen and
     Fifteen and the obligations of the Trustee under Section 402 and the last
     paragraph of Section 1003 shall survive.

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SECTION 206  Discharge of Liability on Securities of Any Series.

     The Indenture shall be amended by replacing the last paragraph of
Section 403 with the following paragraph:

          Upon the satisfaction of the conditions set forth in this Section with
     respect to all the Outstanding Securities of any series, the terms and
     conditions of such series, including the terms and conditions with respect
     thereto set forth in this Indenture, shall no longer be binding upon, or
     applicable to, the Company; provided that the Company shall not be
     discharged from (a) any payment obligations in respect of Securities of
     such series that are deemed not to be Outstanding under clause (iii) of the
     definition thereof if such obligations continue to be valid obligations of
     the Company under applicable law or (b) any obligations pursuant to Section
     305 or 306 or Articles Eleven, Fourteen and Fifteen.

SECTION 207  Unconditional Right of Holders to Receive Principal, Premium and
Interest.

     Section 508 of the Indenture shall be amended by replacing that section
with the following:

          Section 508.  Unconditional Right of Holders to Receive Principal,
                        Premium, Interest and Tax Additional Amounts.

          Notwithstanding any other provision in this Indenture, the Holder of
     any Security shall have the right, which is absolute and unconditional, to
     receive payment of the principal of (and premium, if any) and (subject to
     Section 307) interest on and Tax Additional Amounts, if any, with respect
     to such Security on the Stated Maturity or Maturities expressed in such
     Security (or in the case of redemption, to receive the Redemption Price on
     the Redemption Date, in the case of a repurchase, to receive the Repurchase
     Price on the Repurchase Date, or in the case of a Change in Control, to
     receive the Change in Control Purchase Price on the Change in Control
     Purchase Date) and to institute suit for the enforcement of any such
     payment on or after such respective dates, and such rights shall not be
     impaired without the consent of such Holder.

SECTION 208  Consolidation, Merger and Sale.

     The Indenture shall be amended by inserting "and shall have provided for
conversion rights in accordance with Section 1411" at the end of Section 801(1).

SECTION 209 Supplemental Indentures Without Consent of Holders.

     Section 901 of the Indenture shall be amended by inserting the following
paragraph:

          (9) to make provision with respect to the conversion rights, if any,
     to Holders of 2021 Debentures pursuant to the requirements of Article
     Fourteen hereof.

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SECTION 210  Supplemental Indenture with Consent of Holder.

     The Indenture shall be amended by inserting ", or adversely affect the
right to convert any 2021 Debenture as provided in Article Fourteen, or
adversely affect the right to require the Company to repurchase the 2021
Debentures as provided in Article Fifteen." at the end of Section 902(1).

SECTION 211  Maintenance of Office or Agency.

     The first paragraph of Section 1002 of the Indenture is amended by changing
the first sentence thereof to read in its entirety as follows:

          If Securities of a series are issuable only as Registered Securities,
     the Company will maintain in each Place of Payment for any series of
     Securities an office or agency where Securities of that series may be
     presented or surrendered for payment, where Securities of that series may
     be surrendered for registration of transfer or exchange, where 2021
     Debentures may be surrendered for conversion and where notices and demands
     to or upon the Company in respect of the Securities of that series and this
     Indenture may be served. The Company will give prompt written notice to the
     Trustee of the location, and any change in the location, of such office or
     agency. If at any time the Company shall fail to maintain any such required
     office or agency or shall fail to furnish the Trustee with the address
     thereof, such presentations, surrenders, notices and demands may be made or
     served at the Corporate Trust Office of the Trustee, and the Company hereby
     appoints the Trustee as its agent to receive all such presentations,
     surrenders, notices and demands.

SECTION 212  Redemption.

     Article Eleven shall be amended by inserting the following sections in
their entirety:

     Section 1109  Conversion Arrangement on Call for Redemption

          In connection with 2021 Debentures, the Company may arrange for the
     purchase and conversion of any 2021 Debentures called for redemption by an
     agreement with one or more investment bankers or other purchasers to
     purchase such 2021 Debentures by paying to a Paying Agent (other than the
     Company or any of its Affiliates) in trust for the Holders, on or before
     11:00 A.M. New York City time on the Redemption Date, an amount that,
     together with any amounts deposited with such Paying Agent by the Company
     for the redemption of such 2021 Debentures, is not less than the Redemption
     Price of such 2021 Debentures. Notwithstanding anything to the contrary
     contained in this Article Eleven, the obligation of the Company to pay the
     Redemption Price of such 2021 Debentures, including interest, if any, shall
     be deemed to be satisfied and discharged to the extent such amount is so
     paid by such purchasers; provided, however, that nothing in this Section
     1109 shall relieve the Company of its obligation to pay the Redemption
     Price on 2021 Debentures called for redemption. If such an agreement is
     entered into, any 2021 Debentures called for redemption and not

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     surrendered for conversion by the Holders thereof prior to the relevant
     Redemption Date may, at the option of the Company upon written notice to
     the Trustee, be deemed, to the fullest extent permitted by law, acquired by
     such purchasers from such Holders and (notwithstanding anything to the
     contrary contained in Article Fourteen) surrendered by such purchasers for
     conversion, all as of 11:00 A.M. New York City time on the Redemption Date,
     subject to payment of the above amount as aforesaid. The Paying Agent shall
     hold and pay to the Holders whose 2021 Debentures are selected for
     redemption any such amount paid to it for purchase in the same manner as it
     would money deposited with it by the Company for the redemption of 2021
     Debentures. Without the Paying Agent's prior written consent, no
     arrangement between the Company and such purchasers for the purchase and
     conversion of any 2021 Debentures shall increase or otherwise affect any of
     the powers, duties, responsibilities or obligations of the Paying Agent as
     set forth in this Indenture, and the Company agrees to indemnify the Paying
     Agent from, and hold it harmless against, any loss, liability or expense
     arising out of or in connection with any such arrangement for the purchase
     and conversion of any 2021 Debentures between the Company and such
     purchasers, including the costs and expenses incurred by the Paying Agent
     in the defense of any claim or liability reasonably incurred without
     negligence or bad faith on their part arising out of or in connection with
     the exercise or performance of any of its powers, duties, responsibilities
     or obligations under this Indenture, in accordance with the indemnity
     provisions applicable to the Trustee set forth herein.

     Section 1110  Purchase of Securities at Option of the Holder Upon Change in
                   Control

          (a) If at any time that 2021 Debentures remain Outstanding there shall
     occur a Change in Control, 2021 Debentures shall be purchased by the
     Company at the option of the Holders thereof as of a date that is within 35
     Business Days after the occurrence of the Change in Control (the "Change in
     Control Purchase Date") at a purchase price equal to the Principal Amount
     plus accrued and unpaid interest up to but excluding the Change in Control
     Purchase Date (the "Change in Control Purchase Price"), subject to
     satisfaction by or on behalf of any Holder of the requirements set forth in
     subsection (c) of this Section 1110.

          A "Change in Control" shall be deemed to have occurred if any of the
     following occurs after the Issue Date:

          (1) any "person" or "group" (as such terms are defined below) is or
     becomes the "beneficial owner" (as defined below), directly or indirectly,
     of shares of Voting Stock of the Company representing 50% or more of the
     total voting power of all outstanding classes of Voting Stock of the
     Company or has the power, directly or indirectly, to elect a majority of
     the members of the Board of Directors of the Company (but specifically
     excluding any right of any Person or Persons to designate directors of the
     Company pursuant to Article 3 of the

                                       11
<PAGE>

     Agreement and Plan of Merger dated July 12, 1999 among Schlumberger
     Limited, the Company and certain of their respective subsidiaries); or

          (2) the Company consolidates with, or merges with or into, another
     person or the Company sells, assigns, conveys, transfers, leases or
     otherwise disposes of all or substantially all of the assets of the
     Company, or any person consolidates with, or merges with or into, the
     Company, or the Company completes a scheme of arrangement under Cayman
     Islands law with another Person, in any such event other than pursuant to a
     transaction in which the persons that "beneficially owned" (as defined
     below), directly or indirectly, shares of Voting Stock of the Company
     immediately prior to such transaction "beneficially own" (as defined
     below), directly or indirectly, shares of Voting Stock of the Company
     representing at least a majority of the total voting power of all
     outstanding classes of Voting Stock of the surviving or transferee person;
     or

          (3) there shall occur the liquidation or dissolution of the Company.

          For the purpose of the definition of "Change in Control", (i) "person"
     and "group" have the meanings given such terms under Section 13(d) and
     14(d) of the Exchange Act or any successor provision to either of the
     foregoing, and the term "group" includes any group acting for the purpose
     of acquiring, holding or disposing of securities within the meaning of Rule
     13d-5(b)(1) under the Exchange Act (or any successor provision thereto),
     (ii) a "beneficial owner" shall be determined in accordance with Rule 13d-3
     under the Exchange Act, as in effect on May 8, 2001, except that the number
     of shares of Voting Stock of the Company shall be deemed to include, in
     addition to all outstanding shares of Voting Stock of the Company and
     Unissued Shares deemed to be held by the "person" or "group" (as such terms
     are defined above) or other person with respect to which the Change in
     Control determination is being made, all Unissued Shares deemed to be held
     by all other persons, and (iii) the terms "beneficially owned" and
     "beneficially own" shall have meanings correlative to that of "beneficial
     owner". The term "Unissued Shares" means shares of Voting Stock not
     outstanding that are subject to options, warrants, rights to purchase or
     conversion privileges exercisable within 60 days of the date of
     determination of a Change in Control.

          (b) Within 15 Business Days after the occurrence of a Change in
     Control, the Company shall mail a written notice of the Change in Control
     to the Trustee and to each Holder. The notice shall include the form of a
     Change in Control Purchase Notice to be completed by the Holder and shall
     state:

               (1) the date of such Change in Control and, briefly, the events
          causing such Change in Control;

               (2) the date by which the Change in Control Purchase Notice
          pursuant to this Section 1110 must be given;

                                       12
<PAGE>

               (3) the Change in Control Purchase Date;

               (4) the Change in Control Purchase Price;

               (5) briefly, the conversion rights of the 2021 Debentures;

               (6) the name and address of each Paying Agent and Conversion
          Agent;

               (7) the Conversion Rate and any adjustments thereto;

               (8) that 2021 Debentures as to which a Change in Control Purchase
          Notice has been given may be converted into Ordinary Shares pursuant
          to Article Fourteen only to the extent that the Change in Control
          Purchase Notice has been withdrawn in accordance with the terms of
          this Indenture;

               (9) the procedures that the Holder must follow to exercise rights
          under this Section 1110;

               (10) the procedures for withdrawing a Change in Control Purchase
          Notice, including a form of notice of withdrawal; and

               (11) that the Holder must satisfy the requirements set forth in
          the 2021 Debentures in order to convert the 2021 Debentures.

          If any of the 2021 Debentures is in the form of a Global Security,
     then the Company shall modify such notice to the extent necessary to accord
     with the procedures of the Depositary applicable to the repurchase of
     Global Securities.

          (c) A Holder may exercise its rights specified in subsection (a) of
     this Section 1110 upon delivery of a written notice (which shall be in
     substantially the form included as an attachment to the Security and which
     may be delivered by letter, overnight courier, hand delivery, facsimile
     transmission or in any other written form and, in the case of Global
     Securities, may be delivered electronically or by other means in accordance
     with the Depositary's customary procedures) of the exercise of such rights
     (a "Change in Control Purchase Notice") to any Paying Agent at any time
     prior to the close of business on the Business Day next preceding the
     Change in Control Purchase Date.

          The delivery of such 2021 Debenture to any Paying Agent (together with
     all necessary endorsements) at the office of such Paying Agent shall be a
     condition to the receipt by the Holder of the Change in Control Purchase
     Price therefor.

          The Company shall purchase from the Holder thereof, pursuant to this
     Section 1110, a portion of a 2021 Debenture if the Principal Amount of such
     portion is $1,000 or an integral multiple of $1,000. Provisions of this
     Indenture

                                       13
<PAGE>

     that apply to the purchase of all of a 2021 Debenture pursuant to Sections
     1110 through 1115 also apply to the purchase of such portion of such 2021
     Debenture.

          Notwithstanding anything herein to the contrary, any Holder delivering
     to a Paying Agent the Change in Control Purchase Notice contemplated by
     this subsection (c) shall have the right to withdraw such Change in Control
     Purchase Notice in whole or in a portion thereof that is a Principal Amount
     of $1,000 or in an integral multiple thereof at any time prior to the close
     of business on the Business Day next preceding the Change in Control
     Purchase Date by delivery of a written notice of withdrawal to the Paying
     Agent in accordance with Section 1111.

          A Paying Agent shall promptly notify the Company of the receipt by it
     of any Change in Control Purchase Notice or written withdrawal thereof.

          Anything herein to the contrary notwithstanding, in the case of Global
     Securities, any Change in Control Purchase Notice may be delivered or
     withdrawn and such 2021 Debentures may be surrendered or delivered for
     purchase in accordance with the applicable procedures of the Depositary as
     in effect from time to time.

     Section 1111  Effect of Change in Control Purchase Notice

          Upon receipt by any Paying Agent of the Change in Control Purchase
     Notice specified in Section 1110(c), the Holder of the 2021 Debenture in
     respect of which such Change in Control Purchase Notice was given shall
     (unless such Change in Control Purchase Notice is withdrawn as specified
     below) thereafter be entitled to receive the Change in Control Purchase
     Price with respect to such 2021 Debenture. Such Change in Control Purchase
     Price shall be paid to such Holder promptly following the later of (a) the
     Change in Control Purchase Date with respect to such 2021 Debenture
     (provided the conditions in Section 1110(c) have been satisfied) and (b)
     the time of delivery of such 2021 Debenture to a Paying Agent by the Holder
     thereof in the manner required by Section 1110(c). 2021 Debentures in
     respect of which a Change in Control Purchase Notice has been given by the
     Holder thereof may not be converted into Ordinary Shares on or after the
     date of the delivery of such Change in Control Purchase Notice unless such
     Change in Control Purchase Notice has first been validly withdrawn.

          A Change in Control Purchase Notice may be withdrawn by means of a
     written notice (which may be delivered by letter, overnight courier, hand
     delivery, facsimile transmission or in any other written form and, in the
     case of Global Securities, may be delivered electronically or by other
     means in accordance with the Depositary's customary procedures) of
     withdrawal delivered by the Holder to a Paying Agent at any time prior to
     the close of business on the Business Day immediately preceding the Change
     in Control Purchase Date, specifying the Principal Amount of the Security
     or portion thereof (which must be a Principal

                                       14
<PAGE>

     Amount of $1,000 or an integral multiple of $1,000 in excess thereof) with
     respect to which such notice of withdrawal is being submitted.

     Section 1112  Deposit of Change in Control Purchase Price

          On or before 11:00 a.m. New York City time on the Change in Control
     Purchase Date, the Company shall deposit with the Trustee or with a Paying
     Agent (other than the Company or an Affiliate of the Company) an amount of
     money (in immediately available funds if deposited on such Business Day)
     sufficient to pay the aggregate Change in Control Purchase Price of all the
     2021 Debentures or portions thereof that are to be purchased as of such
     Change in Control Purchase Date. The manner in which the deposit required
     by this Section 1112 is made by the Company shall be at the option of the
     Company, provided that such deposit shall be made in a manner such that the
     Trustee or a Paying Agent shall have immediately available funds on the
     Change in Control Purchase Date.

          If a Paying Agent holds, in accordance with the terms hereof, money
     sufficient to pay the Change in Control Purchase Price of any 2021
     Debenture for which a Change in Control Purchase Notice has been tendered
     and not withdrawn in accordance with this Indenture then, on the Change in
     Control Purchase Date, such 2021 Debenture will cease to be Outstanding and
     the rights of the Holder in respect thereof shall terminate (other than the
     right to receive the Change in Control Purchase Price as aforesaid). The
     Company shall publicly announce the Principal Amount of 2021 Debentures
     purchased as a result of such Change in Control on or as soon as
     practicable after the Change in Control Purchase Date.

     Section 1113  Securities Purchased In Part

          Any 2021 Debenture that is to be purchased only in part shall be
     surrendered at the office of a Paying Agent and promptly after the Change
     in Control Purchase Date the Company shall execute and the Trustee shall
     authenticate and deliver to the Holder of such 2021 Debenture, without
     service charge, a new 2021 Debenture or 2021 Debentures, of such authorized
     denomination or denominations as may be requested by such Holder, in
     aggregate Principal Amount equal to, and in exchange for, the portion of
     the Principal Amount of the 2021 Debenture so surrendered that is not
     purchased.

     Section 1114  Compliance With Securities Laws Upon Purchase of Securities

          In connection with any offer to purchase or purchase of 2021
     Debentures under Section 1110, the Company shall (a) comply with Rule 13e-4
     (or any successor to either such Rule), if applicable, under the Exchange
     Act, (b) file the related Schedule TO (or any successor or similar
     schedule, form or report) if required under the Exchange Act, and (c)
     otherwise comply with all federal and state securities laws in connection
     with such offer, all so as to permit the rights of

                                       15
<PAGE>

     the Holders and obligations of the Company under Sections 1110 through 1115
     to be exercised in the time and in the manner specified therein.

     Section 1115  Repayment to the Company

          To the extent that the aggregate amount of cash deposited by the
     Company pursuant to Section 1112 exceeds the aggregate Change in Control
     Purchase Price together with interest, if any, thereon of the 2021
     Debentures or portions thereof that the Company is obligated to purchase,
     then promptly after the Change in Control Purchase Date the Trustee or a
     Paying Agent, as the case may be, shall return any such excess to the
     Company.

SECTION 213  Conversion, Repurchase.

     The Indenture is amended by adding the following Articles Fourteen and
Fifteen to the Indenture:

                                ARTICLE FOURTEEN

                                   CONVERSION

     Section 1401  Conversion Privilege

          2021 Debentures shall be convertible in accordance with their terms
     and in accordance with this Article.

          A Holder of a 2021 Debenture may convert the Principal Amount of such
     2021 Debenture (or any portion thereof equal to a Principal Amount of
     $1,000 or any integral multiple of a Principal Amount of $1,000 in excess
     thereof) into Ordinary Shares at any time during the period set forth under
     the caption "Conversion" in the 2021 Debentures, at the Conversion Rate
     then in effect. In case a 2021 Debenture or portion thereof is called for
     redemption pursuant to Article Eleven, such conversion right shall
     terminate at the close of business on the fourth Trading Day prior to the
     earlier of (a) May 15, 2021 and (b) the date on which such 2021 Debenture
     (or portion thereof) is redeemed (unless the Company shall default in
     making the redemption payment when due, in which case the conversion right
     shall terminate at the close of business on the date such default is cured
     and such 2021 Debenture is redeemed). The number of Ordinary Shares
     issuable upon conversion of a 2021 Debenture per $1,000 of Principal Amount
     thereof (the "Conversion Rate") shall be that set forth under the caption
     "Conversion" in the 2021 Debentures, subject to adjustment as herein set
     forth. Provisions of this Indenture that apply to conversion of all of a
     2021 Debenture also apply to conversion of a portion of a 2021 Debenture.

          A 2021 Debenture in respect of which a Holder has delivered a
     Repurchase Notice or Change in Control Purchase Notice exercising the
     option of such Holder to require the Company to purchase such 2021
     Debenture, may be converted only if such notice of exercise is withdrawn in
     accordance with the

                                       16
<PAGE>

     terms of this Indenture. A Holder of 2021 Debentures is not entitled to any
     rights of a holder of Ordinary Shares until such Holder has converted its
     2021 Debentures to Ordinary Shares, and only to the extent such 2021
     Debentures are deemed to have been converted into Ordinary Shares pursuant
     to this Article Fourteen.

     Section 1402  Conversion Procedure

          To convert a 2021 Debenture, a Holder must satisfy the requirements
     set forth under the caption "Conversion" in the 2021 Debenture.  The date
     on which the Holder satisfies all of those requirements is the "Conversion
     Date." As soon as practicable after the Conversion Date, the Company shall
     deliver to the Holder through a Conversion Agent a certificate for the
     number of whole Ordinary Shares issuable upon the conversion and cash in
     lieu of any fractional shares pursuant to Section 1403. Anything herein to
     the contrary notwithstanding, in the case of Global Securities, conversion
     notices may be delivered and such 2021 Debentures may be surrendered for
     conversion in accordance with the applicable procedures of the Depositary
     as in effect from time to time.  The Person in whose name the Ordinary
     Shares certificate is registered shall be deemed to be a shareholder of
     record on the Conversion Date; provided, however, that no surrender of a
     2021 Debenture on any date when the stock transfer books of the Company
     shall be closed shall be effective to constitute the Person or Persons
     entitled to receive the Ordinary Shares upon such conversion as the record
     holder or holders of such Ordinary Shares on such date, but such surrender
     shall be effective to constitute the Person or Persons entitled to receive
     such Ordinary Shares as the record holder or holders thereof for all
     purposes at the close of business on the next succeeding day on which such
     stock transfer books are open; provided, further, that such conversion
     shall be at the Conversion Rate in effect on the date that such 2021
     Debenture shall have been surrendered for conversion, as if the stock
     transfer books of the Company had not been closed. Upon conversion of a
     2021 Debenture, such Person shall no longer be a Holder of such 2021
     Debenture.

          No payment or adjustment will be made for dividends on, or other
     distributions with respect to, any Ordinary Shares except as provided in
     this Article Fourteen. On conversion of a 2021 Debenture, the fair market
     value of such Ordinary Shares (together with any such cash payment in lieu
     of fractional shares) shall be treated as issued in exchange for the 2021
     Debenture being converted pursuant to the provisions hereof.

          If a Holder converts more than one 2021 Debenture at the same time,
     the number of Ordinary Shares issuable upon the conversion shall be based
     on the aggregate Principal Amount of 2021 Debentures converted.

          Upon surrender of a 2021 Debenture that is converted in part, the
     Company shall execute, and the Trustee shall authenticate and deliver to
     the

                                       17
<PAGE>

     Holder, a new 2021 Debenture equal in Principal Amount to the Principal
     Amount of the unconverted portion of the 2021 Debenture surrendered.

          2021 Debentures or portions thereof surrendered for conversion after
     the close of business on any Regular Record Date immediately preceding any
     Interest Payment Date and prior to the opening of business on such Interest
     Payment Date shall (unless such 2021 Debentures or portions thereof have
     been called for redemption on a Redemption Date within such period) be
     accompanied by payment to the Company or its order, in New York Clearing
     House funds or other funds acceptable to the Company, of an amount equal to
     the interest payable on such Interest Payment Date on the principal amount
     of 2021 Debentures or portions thereof being surrendered for conversion,
     and such interest payable on such Interest Payment Date shall be payable to
     the registered Holder notwithstanding the conversion of such 2001
     Debenture.

     Section 1403  Fractional Shares

          The Company will not issue fractional Ordinary Shares upon conversion
     of 2021 Debentures. In lieu thereof, the Company will pay an amount in cash
     based upon the closing price of the Ordinary Shares on the Trading Day
     immediately prior to the Conversion Date.

     Section 1404  Taxes on Conversion

          If a Holder converts a 2021 Debenture, the Company shall pay any
     documentary, stamp or similar issue or transfer tax due on the issue of
     Ordinary Shares upon such conversion. However, the Holder shall pay any
     such tax which is due because the Holder requests the shares to be issued
     in a name other than the Holder's name. The Conversion Agent may refuse to
     deliver the certificate representing the Ordinary Shares being issued in a
     name other than the Holder's name until the Conversion Agent receives a sum
     sufficient to pay any tax which will be due because the shares are to be
     issued in a name other than the Holder's name. Nothing herein shall
     preclude any tax withholding required by law or regulation.

     Section 1405  Company to Provide Ordinary Shares

          The Company shall, prior to issuance of any 2021 Debentures under this
     Article Fourteen, and from time to time as may be necessary, reserve, out
     of its authorized but unissued Ordinary Shares, a sufficient number of
     Ordinary Shares to permit the conversion of all 2021 Debentures Outstanding
     into Ordinary Shares. All Ordinary Shares delivered upon conversion of the
     2021 Debentures shall be newly issued shares, shall be duly authorized,
     validly issued, fully paid and nonassessable and shall be free from
     preemptive rights and free of any lien or adverse claim.

          The Company will endeavor promptly to comply with all federal and
     state securities laws regulating the registration of the offer and delivery
     of Ordinary

                                       18
<PAGE>

     Shares to a converting Holder upon conversion of 2021 Debentures, if any,
     and will list or cause to have quoted such Ordinary Shares on each national
     securities exchange or on the Nasdaq National Market or other over-the-
     counter market or such other market on which the Ordinary Shares are then
     listed or quoted.

     Section 1406  Adjustment of Conversion Rate

          The Conversion Rate shall be adjusted from time to time by the Company
     as follows:

          (a) In case the Company shall (i) pay a dividend on its Ordinary
     Shares in Ordinary Shares, (ii) make a distribution on its Ordinary Shares
     in Ordinary Shares, (iii) subdivide its outstanding Ordinary Shares into a
     greater number of shares, or (iv) combine its outstanding Ordinary Shares
     into a smaller number of shares, the Conversion Rate in effect immediately
     prior thereto shall be adjusted so that the Holder of any 2021 Debenture
     thereafter surrendered for conversion shall be entitled to receive that
     number of Ordinary Shares which it would have owned had such 2021 Debenture
     been converted immediately prior to the happening of such event.  An
     adjustment made pursuant to this subsection (a) shall become effective
     immediately after the record date in the case of a dividend or distribution
     and shall become effective immediately after the effective date in the case
     of subdivision or combination.

          (b) In case the Company shall issue rights or warrants to all or
     substantially all holders of its Ordinary Shares entitling them (for a
     period commencing no earlier than the record date described below and
     expiring not more than 60 days after such record date) to subscribe for or
     purchase Ordinary Shares at a price per share less than the current market
     price per Ordinary Share (as determined in accordance with subsection (e)
     of this Section 1406) on the record date for the determination of
     shareholders entitled to receive such rights or warrants, the Conversion
     Rate in effect immediately prior thereto shall be adjusted so that the same
     shall equal the rate determined by multiplying the Conversion Rate in
     effect immediately prior to such record date by a fraction of which the
     numerator shall be the number of Ordinary Shares outstanding on such record
     date plus the number of additional Ordinary Shares offered, and of which
     the denominator shall be the number of Ordinary Shares outstanding on such
     record date plus the number of shares which the aggregate offering price of
     the total number of Ordinary Shares so offered would purchase at the
     current market price per share (as determined in accordance with subsection
     (e) of this Section 1406) of Ordinary Shares on such record date.  Such
     adjustment shall be made successively whenever any such rights or warrants
     are issued, and shall become effective immediately after such record date.
     If at the end of the period during which such rights or warrants are
     exercisable not all rights or warrants shall have been exercised, the
     adjusted Conversion Rate shall be immediately readjusted to what it would
     have been based upon the number of additional Ordinary Shares actually
     issued.

                                       19
<PAGE>

          (c)  In case the Company shall distribute to all or substantially all
     holders of its Ordinary Shares any shares of capital stock (other than
     dividends or distributions of Ordinary Shares on Ordinary Shares to which
     Section 1406(a) applies) of the Company, evidences of indebtedness or other
     securities or assets (including securities of any Person other than the
     Company, but excluding all-cash distributions or any rights or warrants
     referred to in Section 1406(b)), then in each such case the Conversion Rate
     shall be adjusted so that the same shall equal the rate determined by
     multiplying the current Conversion Rate by a fraction of which the
     numerator shall be the current market price per share (as determined in
     accordance with subsection (e) of this Section 1406) of the Ordinary Shares
     on the record date mentioned below, and of which the denominator shall be
     the current market price per share (as determined in accordance with
     subsection (e) of this Section 1406) of the Ordinary Shares on such record
     date less the fair market value on such record date (as determined by the
     Board of Directors, whose determination shall be conclusive evidence of
     such fair market value and which shall be evidenced by an Officers'
     Certificate delivered to the Trustee) of the portion of the capital stock,
     evidences of indebtedness, securities or other non-cash assets so
     distributed applicable to one Ordinary Share (determined on the basis of
     the number of Ordinary Shares outstanding on the record date).  Such
     adjustment shall be made successively whenever any such distribution is
     made and shall become effective immediately after the record date for the
     determination of shareholders entitled to receive such distribution.

          In the event that the Company implements a shareholder rights plan,
     such rights plan shall provide, subject to customary exceptions and
     limitations, that upon conversion of the 2021 Debentures the Holders will
     receive, in addition to the Ordinary Shares issuable upon such conversion,
     the rights issued under such rights plan (notwithstanding the occurrence of
     an event causing such rights to separate from the Ordinary Shares at or
     prior to the time of conversion). Any distribution of rights or warrants
     pursuant to a shareholder rights plan complying with the requirements set
     forth in the immediately preceding sentence of this paragraph shall not
     constitute a distribution of securities for the purposes of this Section
     1406(c).

          Rights or warrants distributed by the Company to all holders of
     Ordinary Shares entitling the holders thereof to subscribe for or purchase
     shares of the Company's capital stock (either initially or under certain
     circumstances), which rights or warrants, until the occurrence of a
     specified event or events ("Trigger Event"): (i) are deemed to be
     transferred with such Ordinary Shares; (ii) are not exercisable; and (iii)
     are also issued in respect of future issuances of Ordinary Shares, shall be
     deemed not to have been distributed for purposes of this Section 1406(c)
     (and no adjustment to the Conversion Rate under this Section 1406(c) will
     be required) until the occurrence of the earliest Trigger Event. If such
     right or warrant is subject to subsequent events, upon the occurrence of
     which such right or warrant shall become exercisable to purchase different
     securities, evidences of indebtedness or other assets or entitle the holder
     to purchase a different number or amount of the foregoing or to purchase
     any of the foregoing at a different

                                       20
<PAGE>

     purchase price, then the occurrence of each such event shall be deemed to
     be the date of issuance and record date with respect to a new right or
     warrant (and a termination or expiration of the existing right or warrant
     without exercise by the holder thereof). In addition, in the event of any
     distribution (or deemed distribution) of rights or warrants, or any Trigger
     Event or other event (of the type described in the preceding sentence) with
     respect thereto, that resulted in an adjustment to the Conversion Rate
     under this Section 1406(c), (1) in the case of any such rights or warrants
     which shall all have been redeemed or repurchased without exercise by any
     holders thereof, the Conversion Rate shall be readjusted upon such final
     redemption or repurchase to give effect to such distribution or Trigger
     Event, as the case may be, as though it were a cash distribution, equal to
     the per share redemption or repurchase price received by a holder of
     Ordinary Shares with respect to such rights or warrants (assuming such
     holder had retained such rights or warrants), made to all holders of
     Ordinary Shares as of the date of such redemption or repurchase, and (2) in
     the case of such rights or warrants all of which shall have expired or been
     terminated without exercise, the Conversion Rate shall be readjusted as if
     such rights and warrants had never been issued.

          (d) (1) In case the Company shall, by dividend or otherwise, at any
     time distribute (a "Triggering Distribution") to all or substantially all
     holders of its Ordinary Shares all-cash distributions in an aggregate
     amount that, together with the aggregate amount of (A) any cash and the
     fair market value (as determined by the Board of Directors, whose
     determination shall be conclusive evidence thereof and which shall be
     evidenced by an Officers' Certificate delivered to the Trustee) of any
     other consideration, payable in respect of any tender offer by the Company
     or a Subsidiary of the Company for Ordinary Shares consummated within the
     12 months preceding the date of payment of the Triggering Distribution and
     in respect of which no Conversion Rate adjustment pursuant to this Section
     1406 has been made and (B) all other cash distributions to all or
     substantially all holders of its Ordinary Shares made within the 12 months
     preceding the date of payment of the Triggering Distribution and in respect
     of which no Conversion Rate adjustment pursuant to this Section 1406 has
     been made, exceeds an amount equal to 12.5% of the product of the current
     market price per Ordinary Share (as determined in accordance with
     subsection (e) of this Section 1406) on the Business Day (the
     "Determination Date") immediately preceding the day on which such
     Triggering Distribution is declared by the Company multiplied by the number
     of Ordinary Shares outstanding on the Determination Date (excluding shares
     held in the treasury of the Company), the Conversion Rate shall be
     increased so that the same shall equal the rate determined by multiplying
     such Conversion Rate in effect immediately prior to the Determination Date
     by a fraction of which the numerator shall be such current market price per
     Ordinary Share (as determined in accordance with subsection (e) of this
     Section 1406) on the Determination Date, and the denominator shall be the
     current market price per Ordinary Share (as determined in accordance with
     subsection (e) of this Section 1406) on the Determination Date less the sum
     of the aggregate amount of cash and the aggregate fair market value
     (determined as aforesaid) of any such other consideration, so distributed,
     paid or payable (in the case of amounts paid in any

                                       21
<PAGE>

     tender offer, including only that portion of the aggregate amount paid in
     the tender offer that was in excess of the aggregate value of the shares
     purchased in the tender offer (based on the current market price per
     Ordinary Share as determined in accordance with subsection (e) of this
     Section 1406 on the day the tender offer expired)) within such 12 months
     (including, without limitation, the Triggering Distribution) applicable to
     one Ordinary Share (determined on the basis of the number of Ordinary
     Shares outstanding on the Determination Date), such increase to become
     effective immediately prior to the opening of business on the day following
     the date on which the Triggering Distribution is paid.

          (2) In case any tender offer made by the Company or any of its
     Subsidiaries for Ordinary Shares shall expire and such tender offer (as
     amended upon the expiration thereof) shall involve the payment of aggregate
     consideration in an amount (determined as the sum of the aggregate amount
     of cash consideration and the aggregate fair market value (as determined by
     the Board of Directors, whose determination shall be conclusive evidence
     thereof and which shall be evidenced by an Officers' Certificate delivered
     to the Trustee thereof ) of any other consideration) that, together with
     the aggregate amount of (A) any cash and the fair market value (as
     determined by the Board of Directors, whose determination shall be
     conclusive evidence thereof and which shall be evidenced by an Officers'
     Certificate delivered to the Trustee) of any other consideration payable in
     respect of any other tender offers by the Company or any Subsidiary of the
     Company for Ordinary Shares consummated within the 12 months preceding the
     date of the Expiration Date (as defined below) and in respect of which no
     Conversion Rate adjustment pursuant to this Section 1406 has been made and
     (B) all cash distributions to all or substantially all holders of its
     Ordinary Shares made within the 12 months preceding the Expiration Date and
     in respect of which no Conversion Rate adjustment pursuant to this Section
     1406 has been made, exceeds an amount equal to 12.5% of the product of the
     current market price per Ordinary Share (as determined in accordance with
     subsection (e) of this Section 1406) as of the last date (the "Expiration
     Date") tenders could have been made pursuant to such tender offer (as it
     may be amended) (the last time at which such tenders could have been made
     on the Expiration Date is hereinafter sometimes called the "Expiration
     Time") multiplied by the number of Ordinary Shares outstanding (including
     tendered shares but excluding any shares held in the treasury of the
     Company) at the Expiration Time, then, immediately prior to the opening of
     business on the day after the Expiration Date, the Conversion Rate shall be
     increased so that the same shall equal the rate determined by multiplying
     the Conversion Rate in effect immediately prior to close of business on the
     Expiration Date by a fraction of which the numerator shall be the sum of
     (x) the aggregate consideration (determined as aforesaid) payable to
     stockholders based on the acceptance (up to any maximum specified in the
     terms of the tender offer) of all shares validly tendered and not withdrawn
     as of the Expiration Time (the shares deemed so accepted, up to any such
     maximum, being referred to as the "Purchased Shares") and (y) the product
     of the number of Ordinary Shares outstanding (excluding any Purchased
     Shares and any shares held in the treasury of the Company) at the
     Expiration Time and the current market price per Ordinary

                                       22
<PAGE>

     Share (as determined in accordance with subsection (e) of this Section
     1406) on the Trading Day next succeeding the Expiration Date, and the
     denominator shall be the product of the number of Ordinary Shares
     outstanding (including tendered shares but excluding any shares held in the
     treasury of the Company) at the Expiration Time multiplied by the current
     market price per Ordinary Share (as determined in accordance with
     subsection (e) of this Section 1406) on the Trading Day next succeeding the
     Expiration Date, such increase to become effective immediately prior to the
     opening of business on the day following the Expiration Date. In the event
     that the Company is obligated to purchase shares pursuant to any such
     tender offer, but the Company is permanently prevented by applicable law
     from effecting any or all such purchases or any or all such purchases are
     rescinded, the Conversion Rate shall again be adjusted to be the Conversion
     Rate which would have been in effect based upon the number of shares
     actually purchased. If the application of this Section 1406(d)(2) to any
     tender offer would result in a decrease in the Conversion Rate, no
     adjustment shall be made for such tender offer under this Section
     1406(d)(2).

          (3) For purposes of this Section 1406(d), the term "tender offer"
     shall mean and include both tender offers and exchange offers, all
     references to "purchases" of shares in tender offers (and all similar
     references) shall mean and include both the purchase of shares in tender
     offers and the acquisition of shares pursuant to exchange offers, and all
     references to "tendered shares" (and all similar references) shall mean and
     include shares tendered in both tender offers and exchange offers.

          (e) For the purpose of any computation under subsections (b), (c) and
     (d)(l) of this Section 1406, the current market price per Ordinary Share on
     any date shall be deemed to be the average of the daily closing prices for
     a period selected by the Company of either 5 consecutive Trading Days or 30
     consecutive Trading Days commencing not more than 45 Trading Days before,
     and ending not later than, (i) the Determination Date with respect to
     distributions under subsection (d)(l) of this Section 1406 or (ii) the
     record date with respect to distributions, issuances or other events
     requiring such computation under subsection (b) or (c) of this Section
     1406.  For the purpose of any computation under subsection (d)(2) of this
     Section 1406, the current market price per Ordinary Share on any date shall
     be deemed to be the average of the daily closing prices for the 5
     consecutive Trading Days commencing on that date.  The closing price for
     each day shall be the last reported sales price or, in case no such
     reported sale takes place on such date, the average of the reported closing
     bid and asked prices in either case on the New York Stock Exchange (the
     "NYSE") or, if the Ordinary Shares are not listed or admitted to trading on
     the NYSE, on the principal national securities exchange on which the
     Ordinary Shares are listed or admitted to trading or, if not listed or
     admitted to trading on any national securities exchange, the last reported
     sales price of the Ordinary Shares as quoted on NASDAQ (the term "NASDAQ"
     shall include, without limitation, the Nasdaq National Market) or, in case
     no reported sales takes place, the average of the closing bid and asked
     prices as quoted on NASDAQ or any comparable system

                                       23
<PAGE>

     or, if the Ordinary Shares are not quoted on NASDAQ or any comparable
     system, the closing sales price or, in case no reported sale takes place,
     the average of the closing bid and asked prices, as furnished by any two
     members of the National Association of Securities Dealers, Inc. selected
     from time to time by the Company for that purpose. If no such prices are
     available, the current market price per share shall be the fair value of an
     Ordinary Share as determined by the Board of Directors (which shall be
     evidenced by an Officers' Certificate delivered to the Trustee).

          (f) In any case in which this Section 1406 shall require that an
     adjustment be made following a record date or a Determination Date or
     Expiration Date, as the case may be, established for purposes of this
     Section 1406, the Company may elect to defer (but only until five Business
     Days following the filing by the Company with the Trustee of the
     certificate described in Section 1409) issuing to the Holder of any 2021
     Debenture converted after such record date or Determination Date or
     Expiration Date the Ordinary Shares and other capital stock of the Company
     issuable upon such conversion over and above the Ordinary Shares and other
     capital stock of the Company issuable upon such conversion only on the
     basis of the Conversion Rate prior to adjustment; and, in lieu of the
     shares the issuance of which is so deferred, the Company shall issue or
     cause its transfer agents to issue due bills or other appropriate evidence
     prepared by the Company of the right to receive such shares. If any
     distribution in respect of which an adjustment to the Conversion Rate is
     required to be made as of the record date or Determination Date or
     Expiration Date therefor is not thereafter made or paid by the Company for
     any reason, the Conversion Rate shall be readjusted to the Conversion Rate
     which would then be in effect if such record date had not been fixed or
     such effective date or Determination Date or Expiration Date had not
     occurred.

     Section 1407  No Adjustment

          No adjustment in the Conversion Rate shall be required unless the
     adjustment would require an increase or decrease of at least 1% in the
     Conversion Rate as last adjusted; provided, however, that any adjustments
     which by reason of this Section 1407 are not required to be made shall be
     carried forward and taken into account in any subsequent adjustment. All
     calculations under this Article Fourteen shall be made to the nearest cent
     or to the nearest 1/1000th of a share, as the case may be.

          No adjustment need be made for issuances of Ordinary Shares pursuant
     to a Company plan for reinvestment of dividends or interest or for a change
     in the par value or a change to no par value of the Ordinary Shares.

          To the extent that the 2021 Debentures become convertible into the
     right to receive cash, no adjustment need be made thereafter as to the
     cash. Interest will not accrue on the cash.

                                       24
<PAGE>

     Section 1408  Adjustment for Tax Purposes

          The Company shall be entitled to make such increases in the Conversion
     Rate, in addition to those required by Section 1406, as it in its
     discretion shall determine to be advisable in order that any stock
     dividends, subdivisions of shares, distributions of rights to purchase
     stock or securities or distributions of securities convertible into or
     exchangeable for stock hereafter made by the Company to its shareholders
     shall not be taxable.

     Section 1409  Notice of Adjustment

          Whenever the Conversion Rate is adjusted, the Company shall promptly
     mail to Holders a notice of the adjustment and file with the Trustee an
     Officers' Certificate specifying the adjusted Conversion Rate, and briefly
     stating the facts requiring the adjustment and the manner of computing it.

     Section 1410  Notice of Certain Transactions

          In the event that:

          (1) the Company takes any action which would require an adjustment in
     the Conversion Rate,

          (2)  the Company takes any action that requires a supplemental
     indenture pursuant to Section 1411, or

          (3)  there is a dissolution or liquidation of the Company,

     the Company shall mail to Holders and file with the Trustee a notice
     stating the proposed record or effective date, as the case may be. The
     Company shall mail the notice at least fifteen days before such date.
     Failure to mail such notice or any defect therein shall not affect the
     validity of any transaction referred to in clause (1), (2) or (3) of this
     Section 1410.

     Section 1411  Effect of Reclassification, Consolidation, Merger or Sale on
                   Conversion Privilege

          If any of the following shall occur, namely: (a) any reclassification
     or change of Ordinary Shares issuable upon conversion of the 2021
     Debentures (other than a change in par value, or from par value to no par
     value, or from no par value to par value, or as a result of a subdivision
     or combination); (b) any consolidation, merger or scheme of arrangement in
     which the Company is a party consolidating with another entity or merging
     with or into another entity other than a merger in which the Company is the
     continuing corporation and which does not result in any reclassification
     of, or change (other than a change in par value, or from par value to no
     par value, or from no par value to par value, or as a result of a
     subdivision or combination triggering an adjustment under Section 1406(a))
     in, Outstanding Ordinary Shares; or (c) any sale or conveyance of all or
     substantially

                                       25
<PAGE>

     all of the property and assets of the Company to any Person, then the
     Company, or such successor, purchasing or transferee corporation, as the
     case may be, shall (if consideration is receivable by Holders of the
     Ordinary Shares in such consolidation, merger, scheme of arrangement, sale
     or conveyance), as a condition precedent to such reclassification, change,
     consolidation, merger, scheme of arrangement, sale or conveyance, execute
     and deliver to the Trustee a supplemental indenture providing that the
     Holder of each 2021 Debenture then Outstanding shall have the right to
     convert such 2021 Debenture into the kind and amount of shares of stock and
     other securities and property (including cash) receivable upon such
     reclassification, change, consolidation, merger, scheme of arrangement,
     sale or conveyance by a holder of the number of Ordinary Shares deliverable
     upon conversion of such 2021 Debenture immediately prior to such
     reclassification, change, consolidation, merger, scheme of arrangement,
     sale or conveyance assuming such Holder of Ordinary Shares of the Company
     (i) is not a person party to such transaction and (ii) failed to exercise
     his rights of an election, if any, as to the kind or amount of stock and
     other securities and property (including cash) receivable upon such
     reclassification, change, consolidation, merger, scheme of arrangement,
     sale or conveyance (provided, however, that if the kind or amount of stock
     and other securities and property (including cash) receivable upon such
     reclassification, change, consolidation, merger, scheme of arrangement,
     sale or conveyance is not the same for each Ordinary Share of the Company
     held immediately prior to such reclassification, change, consolidation,
     merger, scheme of arrangement, sale or conveyance in respect of which such
     rights of election shall not have been exercised ("non-electing share"),
     then for the purpose of this Section 1411 the kind and amount of stock and
     other securities and property (including cash) receivable upon such
     reclassification, change, consolidation, merger, scheme of arrangement,
     sale or conveyance by each non-electing share shall be deemed to be the
     kind and amount so receivable per share by a plurality of the non-electing
     shares). Such supplemental indenture shall provide for adjustments of the
     Conversion Rate which shall be as nearly equivalent as may be practicable
     to the adjustments of the Conversion Rate provided for in this Article
     Fourteen. If, in the case of any such consolidation, merger, scheme of
     arrangement, sale or conveyance, the stock or other securities and property
     (including cash) receivable thereupon by a holder of Ordinary Shares
     include shares of stock or other securities and property of a Person other
     than the successor, purchasing or transferee corporation, as the case may
     be, in such consolidation, merger, scheme of arrangement, sale or
     conveyance, then such supplemental indenture shall also be executed by such
     other Person and shall contain such additional provisions to protect the
     interests of the Holders of the 2021 Debentures as the Board of Directors
     shall reasonably consider necessary by reason of the foregoing. The
     provisions of this Section 1411 shall similarly apply to successive
     reclassifications, changes, consolidations, mergers, schemes of
     arrangements, sales or conveyances.

          In the event the Company shall execute a supplemental indenture
     pursuant to this Section 1411, the Company shall promptly file with the
     Trustee (x) an Officers' Certificate briefly stating the reasons therefor,
     the kind or amount of

                                       26
<PAGE>

     shares of stock or other securities or property (including cash) receivable
     by Holders of the 2021 Debentures upon the conversion of their 2021
     Debentures after any such reclassification, change, consolidation, merger,
     scheme of arrangement, sale or conveyance, any adjustment to be made with
     respect thereto and that all conditions precedent have been complied with
     and (y) an Opinion of Counsel that all conditions precedent have been
     complied with, and shall promptly mail notice thereof to all Holders.

     Section 1412  Trustee's Disclaimer

          The Trustee shall have no duty to determine when an adjustment under
     this Article Fourteen should be made, how it should be made or what such
     adjustment should be, but may accept as conclusive evidence of that fact or
     the correctness of any such adjustment, and shall be protected in relying
     upon, an Officers' Certificate including the Officers' Certificate with
     respect thereto which the Company is obligated to file with the Trustee
     pursuant to Section 1409. The Trustee makes no representation as to the
     validity or value of any securities or assets issued upon conversion of
     2021 Debentures, and the Trustee shall not be responsible for the Company's
     failure to comply with any provisions of this Article Fourteen.

          The Trustee shall not be under any responsibility to determine the
     correctness of any provisions contained in any supplemental indenture
     executed pursuant to Section 1411, but may accept as conclusive evidence of
     the correctness thereof, and shall be fully protected in relying upon, the
     Officers' Certificate with respect thereto which the Company is obligated
     to file with the Trustee pursuant to Section 1411.

     Section 1413  Voluntary Increase

          The Company from time to time may increase the Conversion Rate by any
     amount for any period of time if the period is at least 20 days or such
     longer period as may be required by law and if the increase is irrevocable
     during the period.

                                ARTICLE FIFTEEN

               REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER

     Section 1501  General

          The Company may be required to repurchase 2021 Debentures in
     accordance with their terms and in accordance with this Article.

          2021 Debentures shall be purchased by the Company under the paragraph
     "Repurchase by the Company at the Option of the Holder" of the 2021
     Debentures on May 15, 2006, May 15, 2011 and May 15, 2016 (each, a

                                       27
<PAGE>

     "Repurchase Date"), at the repurchase price specified therein (the
     "Repurchase Price"), at the option of the Holder thereof, upon:

          (1) delivery to the Paying Agent, by the Holder of a written notice of
     purchase (a "Repurchase Notice") at any time from the opening of business
     on the date that is 20 Business Days prior to a Repurchase Date until the
     close of business on such Repurchase Date stating:

               (A) the certificate number of the 2021 Debenture which the Holder
          will deliver to be repurchased or if any of the 2021 Debentures is in
          the form of a Global Security, then a beneficial owner of a 2021
          Debenture shall comply with the procedures of the Depositary
          applicable to the repurchase of a Global Security,

               (B) the portion of the Principal Amount of the 2021 Debenture
          which the Holder will deliver to be repurchased, which portion must be
          $1,000 or an integral multiple thereof,

               (C) that such 2021 Debenture shall be purchased as of the
          Repurchase Date pursuant to the terms and conditions specified under
          the caption "Repurchase by the Company at the Option of the Holder" of
          the 2021 Debentures and in this Indenture,

               (D) in the event that the Company elects, pursuant to Section
          1502 hereof, to pay the Repurchase Price to be paid as of such
          Repurchase Date, in whole or in part, in Ordinary Shares but such
          portion of the Repurchase Price shall ultimately be payable to such
          Holder entirely in cash because any of the conditions to payment of
          the Repurchase Price in Ordinary Shares is not satisfied prior to the
          close of business on such Repurchase Date, as set forth in Section
          1503 hereof, whether such Holder elects (i) to withdraw such
          Repurchase Notice as to some or all of the 2021 Debentures to which
          such Repurchase Notice relates (stating the Principal Amount at
          Maturity and certificate numbers of the 2021 Debentures as to which
          such withdrawal shall relate or if certificated 2021 Debentures have
          not been issued, a beneficial owner of a 2021 Debenture shall comply
          with the procedures of the Depositary applicable to the withdrawal of
          a Repurchase Notice), or (ii) to receive cash in respect of the entire
          Repurchase Price for all 2021 Debentures (or portions thereof) to
          which such Repurchase Notice relates, and

          (2) delivery of such 2021 Debenture to the Paying Agent prior to, on
     or after the Repurchase Date (together with all necessary endorsements) at
     the offices of the Paying Agent, such delivery being a condition to receipt
     by the Holder of the Repurchase Price therefor; provided, however, that
     such Repurchase Price shall be so paid pursuant to this Article Fifteen
     only if the 2021 Debenture so delivered to the Paying Agent shall conform
     in all respects to the description thereof in the related Repurchase
     Notice.

                                       28
<PAGE>

          If a Holder, in such Holder's Repurchase Notice and in any written
     notice of withdrawal delivered by such Holder pursuant to the terms of
     Section 1509 hereof, fails to indicate such Holder's choice with respect to
     the election set forth in clause (D) of Section 1501(1), such Holder shall
     be deemed to have elected to receive cash in respect of the Repurchase
     Price for all 2021 Debentures subject to the Repurchase Notice in the
     circumstances set forth in such clause (D).

          The Company shall purchase from the Holder thereof, pursuant to this
     Article Fifteen, a portion of a 2021 Debenture if the Principal Amount of
     such portion is $1,000 or an integral multiple of $1,000. Provisions of
     this Indenture that apply to the purchase of all of a 2021 Debenture also
     apply to the purchase of such portion of such 2021 Debenture.

          Any purchase by the Company contemplated pursuant to the provisions of
     this Article Fifteen shall be consummated by the delivery of the
     consideration to be received by the Holder promptly following the later of
     the Repurchase Date and the time of delivery of the 2021 Debenture.

          Notwithstanding anything herein to the contrary, any Holder delivering
     to the Paying Agent the Repurchase Notice contemplated by this Section 1501
     shall have the right to withdraw such Repurchase Notice at any time prior
     to the close of business on the Repurchase Date by delivery of a written
     notice of withdrawal to the Paying Agent in accordance with Section 1509.

          The Paying Agent shall promptly notify the Company of the receipt by
     it of any Repurchase Notice or written notice of withdrawal thereof.

     Section 1502  The Company's Right to Elect Manner of Payment of Repurchase
     Price

          (a) The Repurchase Price of 2021 Debentures or a specified portion
     thereof in respect of which a Repurchase Notice pursuant to Section 1501
     has been given will be paid by the Company, at the election of the Company,
     with cash or Ordinary Shares or in any combination of cash and Ordinary
     Shares, subject to the conditions set forth in Section 1503 and 1504
     hereof.  The Company shall designate, in the Company Notice delivered
     pursuant to Section 1505 hereof, whether the Company will purchase the 2021
     Debentures for cash or Ordinary Shares, or, if a combination thereof, the
     percentages of the Repurchase Price of 2021 Debentures in respect of which
     it will pay in cash and Ordinary Shares; provided that the Company will pay
     cash for fractional interests in Ordinary Shares.  For purposes of
     determining the existence of potential fractional interests, all 2021
     Debentures subject to purchase by the Company held by a Holder shall be
     considered together (no matter how many separate certificates are to be
     presented).  Each Holder whose 2021 Debentures are purchased pursuant to
     this Article Fifteen shall receive the same percentage of cash or Ordinary
     Shares in payment of the Repurchase Price for such 2021 Debentures, except
     (i) as provided in Section 1504 with regard to the payment of cash in lieu
     of fractional

                                       29
<PAGE>

     Ordinary Shares and (ii) in the event that the Company is unable to
     purchase the 2021 Debentures of a Holder or Holders for Ordinary Shares
     because any necessary qualifications or registrations of the Ordinary
     Shares under applicable state securities laws cannot be obtained, the
     Company may purchase the 2021 Debentures of such Holder or Holders for
     cash. The Company may not change its election with respect to the
     consideration (or components or percentages of components thereof) to be
     paid once the Company has given its Company Notice to Holders except
     pursuant to this Section 1502 or pursuant to Section 1504 in the event of a
     failure to satisfy, prior to the close of business on the Repurchase Date,
     any condition to the payment of the Repurchase Price, in whole or in part,
     in Ordinary Shares.

          At least three Business Days before the Company Notice Date, the
     Company shall deliver an Officers' Certificate to the Trustee specifying:

          (i) the manner of payment selected by the Company,

          (ii) the information required by Section 1505,

          (iii)  if the Company elects to pay the Repurchase Price, or a
     specified percentage thereof, in Ordinary Shares, that the conditions to
     such manner of payment set forth in Section 1504 have been or will be
     complied with, and

          (iv) whether the Company desires the Trustee to give the Company
     Notice required by Section 1505.

     Section 1503  Purchase with Cash

          On each Repurchase Date, at the option of the Company, the Repurchase
     Price of 2021 Debentures in respect of which a Repurchase Notice pursuant
     to Section 1501 has been given, or a specified percentage thereof, may be
     paid by the Company with cash equal to the aggregate Repurchase Price of
     such 2021 Debentures.  If the Company elects to purchase 2021 Debentures
     with cash, the Company Notice, as provided in Section 1505, shall be sent
     to Holders (and to beneficial owners as required by applicable law) not
     less than 20 Business Days prior to such Purchase Date (the "Company Notice
     Date").

     Section 1504  Payment by Issuance of Ordinary Shares

          On each Repurchase Date, at the option of the Company, the Repurchase
     Price of 2021 Debentures in respect of which a Repurchase Notice pursuant
     to Section 1501 has been given, or a specified percentage thereof, may be
     paid by the Company by the issuance of a number of Ordinary Shares equal to
     the quotient obtained by dividing (i) the amount of cash to which the
     Holders would have been entitled had the Company elected to pay all or such
     specified percentage, as the case may be, of the Repurchase Price of such
     2021 Debentures in cash by (ii) the Market Price of an Ordinary Share,
     subject to the next succeeding paragraph.

                                       30
<PAGE>

          The Company will not issue a fractional Ordinary Share in payment of
     the Repurchase Price.  Instead the Company will pay cash for the current
     market value of the fractional share.  The current market value of a
     fraction of an Ordinary Share shall be determined by multiplying the Market
     Price by such fraction and rounding the product to the nearest whole cent
     with one half cent being rounded upwards.  It is understood that if a
     Holder elects to have more than one 2021 Debenture repurchased, the number
     of Ordinary Shares shall be based on the aggregate amount of 2021
     Debentures to be repurchased.

          If the Company elects to purchase the 2021 Debentures by the issuance
     of Ordinary Shares, the Company Notice, as provided in Section 1505, shall
     be sent to the Holders (and to beneficial owners as required by applicable
     law) not later than the Company Notice Date.

          The Company's right to exercise its election to purchase the 2021
     Debentures pursuant to this Article Fifteen through the issuance of
     Ordinary Shares shall be conditioned upon:

          (i) the Company's not having given its Company Notice of an election
     to pay entirely in cash and its giving of timely Company Notice of election
     to purchase all or a specified percentage of the 2021 Debentures with
     Ordinary Shares as provided herein;

          (ii) the registration of the Ordinary Shares to be issued in respect
     of the payment of the Repurchase Price under the Securities Act or the
     Exchange Act, in each case, if required for the initial issuance thereof;

          (iii)  any necessary qualification or registration under applicable
     state securities laws or the availability of an exemption from such
     qualification and registration; and

          (iv) the receipt by the Trustee of an Officers' Certificate and an
     Opinion of Counsel each stating that (A) the terms of the issuance of the
     Ordinary Shares are in conformity with this Indenture and (B) the Ordinary
     Shares to be issued by the Company in payment of the Repurchase Price in
     respect of 2021 Debentures have been duly authorized and, when issued and
     delivered pursuant to the terms of this Indenture in payment of the
     Repurchase Price in respect of the 2021 Debentures, will be validly issued,
     fully paid and non-assessable and, to the best of such counsel's knowledge,
     free from preemptive rights, and, in the case of such Officer's
     Certificate, stating that conditions (i), (ii) and (iii) above and the
     condition set forth in the third paragraph of this Section 1504 have been
     satisfied and, in the case of such Opinion of Counsel, stating that
     conditions (ii) and (iii) above have been satisfied.

          Such Officers' Certificate shall also set forth the number of Ordinary
     Shares to be issued for each $1,000 Principal Amount of 2021 Debentures and
     the Sale Price of an Ordinary Share on each trading day during the period

                                       31
<PAGE>

     commencing on the first trading day of the period during which the Market
     Price is calculated and ending three Business Days prior to the applicable
     Repurchase Date.  The Company may pay the Repurchase Price (or any portion
     thereof) in Ordinary Shares only if the information necessary to calculate
     the Market Price is published in The Wall Street Journal or another daily
     newspaper of national circulation.  If the foregoing conditions are not
     satisfied with respect to a Holder or Holders prior to the close of
     business on the Repurchase Date and the Company has elected to repurchase
     the 2021 Debentures pursuant to this Article Fifteen through the issuance
     of Ordinary Shares, the Company shall pay, without further notice, the
     entire Repurchase Price of the 2021 Debentures of such Holder or Holders in
     cash.

          The "Market Price" means the average of the Sale Prices of the
     Ordinary Shares for the five trading day period ending on the third
     Business Day prior to the applicable Repurchase Date (or if the third
     Business Day prior to the applicable Repurchase Date is not a trading day,
     then on the last trading day prior to such third Business Day),
     appropriately adjusted to take into account the occurrence, during the
     period commencing on the first of such trading days during such five
     trading day period and ending on such Repurchase Date, of any event
     described in Section 1406; subject, however, to the conditions set forth in
     Sections 1406(f) and 1407.

          The "Sale Price" of the Ordinary Shares on any date means the closing
     sale price per Ordinary Share (or, if no closing sale price is reported,
     the average of the closing bid and ask prices or, if more than one in
     either case, the average of the average closing bid and average closing ask
     prices) on such date as reported in the composite transactions for the
     principal United States securities exchange on which the Ordinary Shares
     are traded or, if the Ordinary Shares are not listed on a United States
     national or regional securities exchange, as reported by the National
     Association of Securities Dealers Automated Quotation System or its
     successors.

     Section 1505  Notice of Election

          The Company's notice of election to repurchase with cash or Ordinary
     Shares or any combination thereof shall be sent to the Holders in the
     manner provided in Section 106 at the time specified in Section 1503 or
     1504, as applicable (the "Company Notice"). Such Company Notice shall state
     the manner of payment elected and shall contain the following information:

          In the event the Company has elected to pay the Repurchase Price (or a
     specified percentage thereof) with Ordinary Shares, the Company Notice
     shall:

          (1) state that each Holder will receive Ordinary Shares with a Market
     Price equal to the Repurchase Price (or such specified percentage thereof)
     of the 2021 Debentures held by such Holder (except any cash amount to be
     paid in lieu of fractional shares);

                                       32
<PAGE>

          (2) set forth the method of calculating the Market Price of the
     Ordinary Shares; and

          (3) state that because the Market Price of Ordinary Shares will be
     determined prior to the Repurchase Date, Holders will bear the market risk
     with respect to the value of the Ordinary Shares to be received from the
     date such Market Price is determined to the Repurchase Date.

          In any case, each Company Notice shall include a form of Repurchase
     Notice to be completed by a Holder and shall state:

          (A) the Repurchase Price and the Conversion Rate;

          (B) the name and address of the Paying Agent and the Conversion Agent;

          (C) that 2021 Debentures as to which a Repurchase Notice has been
     given may be converted pursuant to Article Fourteen hereof only if the
     applicable Repurchase Notice has been withdrawn in accordance with the
     terms of this Indenture;

          (D) that 2021 Debentures must be surrendered to the Paying Agent to
     collect payment;

          (E) that the Repurchase Price for any 2021 Debenture as to which a
     Repurchase Notice has been given and not withdrawn will be paid promptly
     following the later of the Repurchase Date and the time of surrender of
     such 2021 Debenture as described in (D);

          (F) the procedures the Holder must follow to exercise repurchase
     rights under this Article Fifteen and a brief description of those rights;

          (G) briefly, the conversion rights of the 2021 Debentures; and

          (H) the procedures for withdrawing a Repurchase Notice (including,
     without limitation, for a conditional withdrawal pursuant to the terms of
     Section 1501 or 1509).

          At the Company's request, the Trustee shall give such Company Notice
     in the Company's name and at the Company's expense; provided, however,
     that, in all cases, the text of such Company Notice shall be prepared by
     the Company.

          Upon determination of the actual number of Ordinary Shares to be
     issued for each $1,000 Principal Amount of 2021 Debentures, the Company
     will publish such determination at the Company's Web site on the World Wide
     Web or through such other public medium as the Company may use at that
     time.

                                       33
<PAGE>

     Section 1506  Covenants of the Company

          All Ordinary Shares delivered upon purchase of the 2021 Debentures
     shall be newly issued shares, shall be duly authorized, validly issued,
     fully paid and nonassessable and shall be free from preemptive rights and
     free of any lien or adverse claim.  The Company shall use its reasonable
     efforts to list or cause to have quoted any Ordinary Shares to be issued to
     purchase 2021 Debentures on the principal national securities exchange or
     over-the-counter or other domestic market on which the Ordinary Shares are
     then listed or quoted.

     Section 1507  Procedure upon Repurchase

          The Company shall deposit cash (in respect of a cash purchase under
     Section 1503 or for fractional Ordinary Shares, as applicable) or Ordinary
     Shares, or a combination thereof, as applicable, at the time and in the
     manner as provided in Section 1510, sufficient to pay the aggregate
     Repurchase Price of all 2021 Debentures to be purchased on the applicable
     Repurchase Date pursuant to this Article Fifteen.

          As soon as practicable after the Repurchase Date, the Company shall
     deliver to each Holder entitled to receive Ordinary Shares through the
     Paying Agent, a certificate for the number of full Ordinary Shares issuable
     in payment of the Repurchase Price and cash in lieu of any fractional
     Ordinary Shares.  The Person in whose name the certificate for Ordinary
     Shares is registered shall be treated as a holder of record of Ordinary
     Shares on the Business Day following the Repurchase Date.  Subject to
     Section 1504, no payment or adjustment will be made for dividends on the
     Ordinary Shares the record date for which occurred on or prior to the
     Repurchase Date.

     Section 1508  Taxes

          If a Holder of a 2021 Debenture is paid in Ordinary Shares, the
     Company shall pay any documentary, stamp or similar issue or transfer tax
     due on such issue of Ordinary Shares.  However, the Holder shall pay any
     such tax which is due because the Holder requests the Ordinary Shares to be
     issued in a name other than the Holder's name.  The Paying Agent may refuse
     to deliver the certificates representing the Ordinary Shares being issued
     in a name other than the Holder's name until the Paying Agent receives a
     sum sufficient to pay any tax which will be due because the Ordinary Shares
     are to be issued in a name other than the Holder's name.  Nothing herein
     shall preclude any income tax withholding required by law or regulations,
     subject to the payment by the Company of any Tax Additional Amounts
     required by the terms of each 2021 Debenture.

     Section 1509  Effect of Repurchase Notice

          Upon receipt by the Paying Agent of the Repurchase Notice, the Holder
     of the 2021 Debenture in respect of which such Repurchase Notice was given
     shall (unless such Repurchase Notice is withdrawn as specified in the
     following two

                                       34
<PAGE>

     paragraphs) thereafter be entitled to receive solely the Repurchase Price
     with respect to such 2021 Debenture. Such Repurchase Price shall be paid to
     such Holder, subject to receipt of funds and/or Ordinary Shares by the
     Paying Agent, promptly following the later of (x) the Repurchase Date with
     respect to such 2021 Debenture (provided the conditions in Section 1501
     have been satisfied) and (y) the time of delivery of such 2021 Debenture to
     the Paying Agent by the Holder thereof in the manner required by Section
     1501. 2021 Debentures in respect of which a Repurchase Notice has been
     given by the Holder thereof may not be converted pursuant to Article
     Fourteen hereof on or after the date of the delivery of such Repurchase
     Notice unless such Repurchase Notice has first been validly withdrawn as
     specified in the following two paragraphs.

          A Repurchase Notice may be withdrawn by means of a written notice of
     withdrawal delivered to the office of the Paying Agent in accordance with
     the Repurchase Notice at any time prior to the close of business on the
     applicable Repurchase Date specifying:

          (1) the certificate number of the 2021 Debenture in respect of which
     such notice of withdrawal is being submitted or if any of the 2021
     Debentures is in the form of a Global Security, then a beneficial owner of
     a 2021 Debenture shall comply with the procedures of the Depositary
     applicable to the withdrawal of a Repurchase Notice;

          (2) the Principal Amount of the 2021 Debenture with respect to which
     such notice of withdrawal is being submitted; and

          (3) the Principal Amount, if any, of such 2021 Debenture which remains
     subject to the original Repurchase Notice and which has been or will be
     delivered for purchase by the Company.

          A written notice of withdrawal of a Repurchase Notice may be in the
     form set forth in the preceding paragraph or may be in the form of (i) a
     conditional withdrawal contained in a Repurchase Notice pursuant to the
     terms of Section 1501(1)(D) or (ii) a conditional withdrawal containing the
     information set forth in Section 1501(1)(D) and the preceding paragraph and
     contained in a written notice of withdrawal delivered to the Paying Agent
     as set forth in the preceding paragraph.

          There shall be no purchase of any 2021 Debentures pursuant to this
     Article Fifteen (other than through the issuance of Ordinary Shares in
     payment of the Repurchase Price, including cash in lieu of fractional
     shares) if there has occurred (prior to, on or after, as the case may be,
     the giving, by the Holders of such 2021 Debentures, of the required
     Repurchase Notice) and is continuing an Event of Default (other than a
     default in the payment of the Repurchase Price with respect to such 2021
     Debentures). The Paying Agent will promptly return to the respective
     Holders thereof any 2021 Debentures (x) with respect to which a Repurchase
     Notice has been withdrawn in compliance with this Indenture, or (y)

                                       35
<PAGE>

     held by it during the continuance of an Event of Default (other than a
     default in the payment of the Repurchase Price with respect to such 2021
     Debentures) in which case, upon such return, the Repurchase Notice with
     respect thereto shall be deemed to have been withdrawn.

     Section 1510  Deposit of Repurchase Price

          Prior to 11:00 a.m. (New York City time) on the Business Day following
     the Repurchase Date, the Company shall deposit with the Trustee or with the
     Paying Agent an amount of money (in immediately available funds if
     deposited on such Business Day) and/or Ordinary Shares, if permitted
     hereunder, sufficient to pay the aggregate Repurchase Price of all of the
     2021 Debentures or portions thereof which are to be purchased as of the
     Repurchase Date.

     Section 1511  Securities Repurchased in Part

          Any 2021 Debenture which is to be purchased only in part shall be
     surrendered at the office of the Paying Agent (with, if the Company or the
     Trustee so requires, due endorsement by, or a written instrument of
     transfer in form satisfactory to the Company or the Trustee duly executed
     by, the Holder thereof or such Holder's attorney duly authorized in
     writing) and the Company shall execute and the Trustee shall authenticate
     and deliver to the Holder of such 2021 Debenture, without service charge, a
     new 2021 Debenture or 2021 Debentures, of any authorized denomination as
     requested by such Holder in aggregate Principal Amount equal to, and in
     exchange for, the portion of the Principal Amount of the 2021 Debenture so
     surrendered which is not purchased.

     Section 1512  Comply with Securities Laws Upon Purchase of Securities

          In connection with any offer to purchase or purchase of 2021
     Debentures under this Article Fifteen (provided that such offer or purchase
     constitutes an "issuer tender offer" for purposes of Rule 13e-4 (which
     term, as used herein, includes any successor provision thereto) under the
     Exchange Act at the time of such offer or purchase), the Company shall (i)
     comply with Rule 13e-4 under the Exchange Act, (ii) file the related
     Schedule TO (or any successor schedule, form or report) under the Exchange
     Act, and (iii) otherwise comply with all Federal and state securities laws
     so as to permit the rights and obligations under Article Fifteen to be
     exercised in the time and in the manner specified in this Article Fifteen.

     Section 1513  Repayment to the Company

          The Trustee and the Paying Agent shall return to the Company any cash
     or Ordinary Shares that remain unclaimed for two years, subject to
     applicable unclaimed property law, together with interest or dividends, if
     any, thereon held by them for the payment of the Repurchase Price;
     provided, however, that to the extent that the aggregate amount of cash or
     Ordinary Shares deposited by the Company pursuant to Section 1510 exceeds
     the aggregate Repurchase Price of the

                                       36
<PAGE>

     2021 Debentures or portions thereof which the Company is obligated to
     purchase as of the Repurchase Date, then promptly after the Business Day
     following the Repurchase Date the Trustee shall return any such excess to
     the Company together with interest or dividends, if any, thereon. After
     that, Holders entitled to money must look to the Company for payment as
     general creditors, unless an applicable abandoned property law designates
     another Person.

     Section 1514  Conversion Arrangement on Repurchase

          Any  2021 Debentures required to be repurchased under this Article
     Fifteen, unless surrendered for conversion before the close of business on
     the Repurchase Date, may be deemed to be purchased from the Holders of such
     2021 Debentures for an amount in cash not less than the Repurchase Price,
     by one or more investment bankers or other purchasers who may agree with
     the Company to purchase such  2021 Debentures from the Holders, to convert
     them into Ordinary Shares of the Company and to make payment for such  2021
     Debentures to the Trustee in trust for such Holders.

SECTION 214  Amendment to Events of Default.

     (a) Clause (1) of Section 501 of the Indenture is amended to read in its
entirety as follows:

          (1) default in the payment of any interest or of any Tax Additional
     Amounts upon any 2021 Debentures when such interest or Tax Additional
     Amounts become due and payable and continuance of such default for a period
     of 30 days;

     (b)  Clause (2) of Section 501 of the Indenture is amended to read in its
entirety as follows:

          (2) default in the payment of the Principal Amount, the Redemption
     Price, the Repurchase Price or the Change in Control Purchase Price when
     the same becomes due and payable at its Stated Maturity upon redemption,
     upon declaration of acceleration, when due for repurchase by the Company or
     otherwise;

                                 ARTICLE THREE

                           MISCELLANEOUS PROVISIONS

SECTION 301  Integral Part.

     This Fourth Supplemental Indenture constitutes an integral part of the
Indenture.

SECTION 302  General Definitions.

     For all purposes of this Fourth Supplemental Indenture:

                                       37
<PAGE>

     (a) capitalized terms used herein without definition shall have the
meanings specified in the Indenture; and

     (b) the terms "herein", "hereof", "hereunder" and other words of similar
import refer to this Fourth Supplemental Indenture.

SECTION 303  Adoption, Ratification and Confirmation.

     The Indenture, as supplemented and amended by this Fourth Supplemental
Indenture, is in all respects hereby adopted, ratified and confirmed.

SECTION 304  Counterparts.

     This Fourth Supplemental Indenture may be executed in any number of
counterparts, each of which when so executed shall be deemed an original; and
all such counterparts shall together constitute but one and the same instrument.

SECTION 305  Governing Law.

     THIS FOURTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO
THE APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

                                       38
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental
Indenture to be duly executed and their respective corporate seals to be
hereunto fixed and attested as of the day and year first written above.

                                    TRANSOCEAN SEDCO FOREX INC.

[SEAL]
                                    By: /s/ Gregory Cauthen
                                       ----------------------------------------
                                       Name: Gregory Cauthen
                                       Title: Vice President, Finance and
                                              Treasurer

                                    THE CHASE MANHATTAN BANK, AS TRUSTEE

[SEAL]
                                    By: /s/ Mauri J. Cowen
                                       ----------------------------------------
                                       Name: Mauri J. Cowen
                                       Title: Vice President and Trust Officer

                                       39
<PAGE>

STATE OF TEXAS     )
                   )
COUNTY OF HARRIS   )

     The foregoing instrument was acknowledged before me on May 11, 2001, by
Gregory Cauthen, the Vice President of TRANSOCEAN SEDCO FOREX INC., a
Cayman Islands exempted company limited by shares, on behalf of said company.

                                        /s/ LAUREN SEAMANS
                                        ------------------------------------
                                                    Notary Public

STATE OF TEXAS     )
                   )
COUNTY OF HARRIS   )

     The foregoing instrument was acknowledged before me on May 11, 2001, by
Mauri J. Cowen, a Vice President and Trust Officer of The Chase Manhattan Bank,
a New York banking corporation, on behalf of said banking corporation.

                                        /s/ LAUREN SEAMANS
                                        ------------------------------------
                                                    Notary Public

                                       40
<PAGE>

                                                                         ANNEX A

                           [FORM OF GLOBAL SECURITY]

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

     UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.

                      FORM OF 1.5% CONVERTIBLE DEBENTURES

                                DUE MAY 15, 2021

                          TRANSOCEAN SEDCO FOREX INC.

Issue Date: May 11, 2001                                Maturity: May 15, 2021

Principal Amount: $400,000,000                              CUSIP: 893830 AD1

Registered: No. R-

     Transocean Sedco Forex Inc., a Cayman Islands exempted company limited by
shares (herein called the "Company", which term includes any successor
corporation under the indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal sum
of Four Hundred Million Dollars ($400,000,000) on May 15, 2021 and to pay
interest thereon and Tax Additional Amounts, if any, in immediately available
funds as specified on the other side of this Security.  This Security is
convertible as specified on the other side of this Security.

     Payment of the principal of and interest and Tax Additional Amounts, if
any, on this Security will be made at the office or agency of the Company
maintained for that purpose in the City of New York, New York or Dallas, Texas
in such coin or currency of the United States of

                                      A-1
<PAGE>

America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company, payment of
interest and Tax Additional Amounts, if any, may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or by wire transfer of immediately available funds to the
accounts designated by the Holder of this Security.

     Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:

                                    TRANSOCEAN SEDCO FOREX INC.

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

Attest:

--------------------------------
Assistant Secretary

[SEAL]

                                      A-2
<PAGE>

                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

                                        THE CHASE MANHATTAN BANK, AS TRUSTEE

                                        --------------------------------------
                                        Authorized Signature

Date of Authentication:
                       ----------------

                                      A-3
<PAGE>

                       [FORM OF REVERSE SIDE OF SECURITY]

                          TRANSOCEAN SEDCO FOREX INC.

                  1.5% CONVERTIBLE DEBENTURE DUE MAY 15, 2021

     This Security is one of a duly authorized issue of senior securities of the
Company issued and to be issued in one or more series under an Indenture, dated
as of April 15, 1997, as amended by the First Supplemental Indenture thereto
dated as of April 15, 1997, the Second Supplemental Indenture thereto dated as
of May 14, 1999, the Third Supplemental Indenture thereto dated as of May 24,
2000 and the Fourth Supplemental Indenture thereto dated as of May 11, 2001 (as
so amended, herein called the "Indenture"), between the Company and The Chase
Manhattan Bank, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), or their respective predecessors, as
applicable, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $400,000,000.  As used
herein, the term "Securities" means securities of the series designated on the
face hereof except that, where the context requires that such term be construed
as including another series of securities (e.g., where phrases such as
"Securities of each series" or Securities of any series" or similar phrases are
used), the term "Securities" means securities of any series issued or to be
issued under the Indenture.

INTEREST

     The rate at which this Security shall bear interest shall be 1.5% per
annum.  The date from which interest shall accrue for this Security shall be
May 11, 2001. The Interest Payment Dates on which interest on this Security
shall be payable are May 15 and November 15 of each year, commencing on
November 15, 2001. The Regular Record Date for the interest payable on this
Security on any Interest Payment Date shall be the May 1 or November 1, as the
case may be, immediately preceding such Interest Payment Date. Interest will
cease to accrue on this Security upon its maturity, conversion, purchase by the
Company at the option of a holder or redemption.

METHOD OF PAYMENT

     Payments in respect of principal of and interest, if any, on the Securities
shall be made by the Company in immediately available funds.

OPTIONAL REDEMPTION

     No sinking fund is provided for the Securities of this series. After May
20, 2006, the Securities of this series are redeemable as a whole, or from time
to time in part, at any time at the option of the Company at a redemption price
(the "Redemption Price") equal to the Principal Amount plus accrued and unpaid
interest up to but not including the Redemption Date.

                                      A-4
<PAGE>

     If the Company redeems less than all of the outstanding Securities, the
Trustee will select the Securities to be redeemed (i) by lot, (ii) pro rata or
(iii) by another method the Trustee considers fair and appropriate. If the
Trustee selects a portion of a Holder's Securities for partial redemption and
the Holder converts a portion of the same Securities, the converted portion will
be deemed to be from the portion selected for redemption.

NOTICE OF REDEMPTION

     Notice of redemption will be mailed by first-class mail at least 20 days
but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. Securities in denominations
larger than $1,000 Principal Amount may be redeemed in part, but only in whole
multiples of $1,000. On and after the Redemption Date, subject to the deposit
with the Paying Agent of funds sufficient to pay the Redemption Price, interest
ceases to accrue on Securities or portions thereof called for redemption.

PURCHASE OF SECURITIES AT OPTION OF HOLDER UPON A CHANGE IN CONTROL

     At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase all or any part
specified by the Holder (so long as the Principal Amount of such part is $1,000
or an integral multiple of $1,000 in excess thereof) of the Securities held by
such Holder on the date that is 35 Business Days after the occurrence of a
Change in Control, at a Change in Control Purchase Price equal to the Principal
Amount plus accrued and unpaid interest up to but not including the Change in
Control Purchase Date. The Holder shall have the right to withdraw any Change in
Control Purchase Notice (in whole or in a portion thereof that is $1,000
Principal Amount or an integral multiple of $1,000 in excess thereof) at any
time prior to the close of business on the Business Day prior to the Change in
Control Purchase Date by delivering a written notice of withdrawal to the Paying
Agent in accordance with the terms of the Indenture.

CONVERSION

     A Holder of a Security may convert the Security into Ordinary Shares at any
time until the close of business on the Business Day prior to the Stated
Maturity; provided, that one of the conditions in the following paragraph is
satisfied; provided, further, that if the Security is called for redemption, the
conversion right will terminate at the close of business on the fourth Trading
Day prior to the earlier of (a) May 15, 2021 and (b) the date on which such
Security (or portion thereof) is redeemed (unless the Company shall default in
making the redemption payment when due, in which case the conversion right shall
terminate at the close of business on the date such default is cured and such
Security is redeemed). A Security in respect of which a Holder has delivered a
Repurchase Notice exercising the option of such Holder to require the Company to
purchase such Security may be converted only if such notice of exercise is
withdrawn in accordance with the terms of the Indenture. The initial Conversion
Rate is 13.8627 Ordinary Shares per $1,000 Principal Amount, subject to
adjustment in certain events described in the Indenture. The Company will
deliver cash or a check in lieu of any fractional Ordinary Share.

     Holders may surrender Securities for conversion into Ordinary Shares on a
Conversion Date if the Sale Price (as defined in the Indenture) of the Ordinary
Shares is greater than 110% of

                                      A-5
<PAGE>

the then current Conversion Price for at least 20 Trading Days in the 30 Trading
Day period ending on the Trading Day immediately prior to the Conversion Date.
The "Conversion Price", as of any date, means an amount per Ordinary Share equal
to the quotient of (i) $1,000 (representing the Principal Amount of a Security
with such Principal Amount) divided by (ii) the number of Ordinary Shares
issuable upon conversion of a Security with a $1,000 Principal Amount on such
Conversion Date. In addition, a Holder may surrender for conversion a Security
or portion of a Security which has been called for redemption pursuant to the
section "Optional Redemption" hereof, even if the foregoing provision has not
been satisfied. In the event that the Company declares (a) a dividend or
distribution described in Section 1406(b) of the Indenture, or (b) a dividend or
distribution described in Section 1406(c) or (d)(1) of the Indenture where the
fair market value of such dividend or distribution per Ordinary Share, as
determined pursuant to Section 1406(c) or (d)(l), as applicable, of the
Indenture, exceeds 15% of the Sale Price of the Ordinary Shares as of the
Business Day prior to the date of declaration, the Securities may be surrendered
for conversion beginning on the date the Company gives notice to the Holders of
such right, which shall be not less than 20 days prior to the ex-dividend date
for such dividend or distribution and Securities may be surrendered for
conversion at any time thereafter until the close of business on the Business
Day immediately prior to the ex-dividend date or until the Company announces
that such distribution will not take place. Finally, in the event that the
Company is a party to a reclassification or change, consolidation, merger or
scheme of arrangement under Cayman Islands law, or a sale or conveyance of all
or substantially all of the Company's assets to another person, pursuant to
which the Ordinary Shares would be converted into shares of stock and other
securities and property (including cash) as set forth in Section 1411 of the
Indenture, the Securities may be surrendered for conversion at any time from and
after the date which is 15 days prior to the date the Company announces as the
anticipated effective time until 15 days after the actual date of such
transaction.

     Securities surrendered for conversion after the close of business on any
Regular Record Date immediately preceding any Interest Payment Date and prior to
the opening of business of such Interest Payment Date (except Securities or
portions of Securities to be redeemed on a Redemption Date occurring during such
period) must be accompanied by payment from the Holder of an amount equal to the
interest thereon that the registered Holder is to receive from the Company on
such Interest Payment Date. Except where Securities surrendered for conversion
must be accompanied by payment as described above, no interest on converted
Securities will be payable by the Company on any Interest Payment Date
subsequent to the date of conversion.

     A Holder may convert a portion of a Security if the Principal Amount of
such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on the Ordinary Shares except as provided
in the Indenture.

     No fractional shares will be issued upon conversion; in lieu thereof, an
amount will be paid in cash based upon the closing price of the Ordinary Shares
on the Trading Day immediately prior to the Conversion Date.

     To convert a Security, a Holder must (a) complete and manually sign the
conversion notice set forth below and deliver such notice to a Conversion Agent,
(b) surrender the Security to the Conversion Agent, (c) furnish appropriate
endorsements and transfer documents (including

                                      A-6
<PAGE>

any certification that may be required under applicable law) if required by the
Conversion Agent, and (d) pay any transfer or similar tax, if required.

REPURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER

     Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Securities held
by such Holder on May 15, 2006, May 15, 2011 and May 15, 2016 (each, a
"Repurchase Date"), upon delivery of a Repurchase Notice containing the
information set forth in the Indenture, at any time from the opening of business
on the date that is 20 Business Days prior to such Repurchase Date until the
close of business on such Repurchase Date and upon delivery of the Securities to
the Paying Agent by the Holder as set forth in the Indenture.

     The "Repurchase Price" shall be equal to the Principal Amount plus accrued
and unpaid interest up to but not including the Business Day immediately
following the Repurchase Date.  The Repurchase Price may be paid, at the option
of the Company, in cash or by the issuance of Ordinary Shares at the Conversion
Rate, or in any combination thereof.  Interest due on an Interest Payment Date
that is also a Repurchase Date will be paid to the holder of record on the
relevant Regular Record Date and will not be included in the Repurchase Price.

     Holders have the right to withdraw any Repurchase Notice by delivering to
the Paying Agent a written notice of withdrawal prior to the close of business
on the Repurchase Date in accordance with the provisions of the Indenture.

     If cash (and/or securities if permitted under the Indenture) sufficient to
pay the Repurchase Price of all Securities or portions thereof to be purchased
as of the Repurchase Date, is deposited with the Paying Agent on the Business
Day following the Repurchase Date, interest ceases to accrue on such Securities
(or portions thereof) immediately after such Repurchase Date, and the Holder
thereof shall have no other rights as such (other than the right to receive the
Repurchase Price upon surrender of such Security).

CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION

     Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Securities at an amount not less than the
Redemption Price, by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Securities from the Holders, to convert
them into Ordinary Shares of the Company and to make payment for such Securities
to the Paying Agent in trust for such Holders.

TAX ADDITIONAL AMOUNTS

     The Company agrees that any amounts to be paid by the Company hereunder
with respect to any Security shall be paid without deduction or withholding for
any and all present and future withholding taxes, levies, imposts and charges
whatsoever imposed by or for the account of the Cayman Islands or any political
subdivision or taxing authority thereof or therein, or if deduction or
withholding of any such taxes, levies, imposts or charges shall at any time be
required by the Cayman Islands or any such subdivision or authority thereof or
therein, the Company will

                                      A-7
<PAGE>

(subject to compliance by the Holder of such Security with any relevant
administrative requirements) pay such additional amounts ("Tax Additional
Amounts") in respect of principal amount, premiums (if any), Redemption Price,
Repurchase Price and interest (if any), in accordance with the terms of the
Securities and the Indenture, as the case may be, in order that the amounts
received by the Holder of the Security, after such deduction or withholding,
shall equal the respective amounts of principal, premium (if any), Redemption
Price, Repurchase Price and interest (if any), in accordance with the terms of
the Securities and the Indenture, as specified in such Securities to which such
Holder is entitled; provided, however, that the foregoing shall not apply to:

          (1) any such tax, levy, impost or charge which would not be payable or
due but for the fact that (A) the Holder of a Security (or a fiduciary, settlor,
beneficiary of, member or shareholder of, such Holder, if such Holder is an
estate, trust, partnership or corporation) is a domiciliary, national or
resident of, or engaging in business or maintaining a permanent establishment or
being physically present in, the Cayman Islands or such political subdivision or
otherwise having some present or former connection with the Cayman Islands other
than the holding or ownership of such Security or the collection of the
respective amounts of principal, premium (if any), Redemption Price, Repurchase
Price and interest (if any), in accordance with the terms of the Security and
the Indenture, or the enforcement of such Security or (B) where presentation is
required, such Security was presented more than 30 days after the date such
payment became due or was provided for, whichever is later;

          (2) any estate, inheritance, gift, sales, transfer, excise, personal
property or similar tax, levy, impost or charge;

          (3) any tax, levy, impost or charge which is payable otherwise than by
withholding from payment of the respective amounts of principal, premium (if
any), Redemption Price, Repurchase Price and interest (if any);

          (4) any tax, levy, impost or charge which would not have been imposed
but for the failure to comply with certification, information, documentation or
other reporting requirements concerning the nationality, residence, identity or
connections with the relevant tax authority of the Holder or beneficial owner of
such Security, if such compliance is required by statute or by regulation as a
precondition to relief or exemption from such tax, levy, impost or charge; or

          (5) any combination of (1) through (4);

nor shall any Tax Additional Amounts be paid to any Holder who is a fiduciary or
partnership or other than the sole beneficial owner of such Security to the
extent that a beneficiary or settlor with respect to such fiduciary, or a member
of such partnership or a beneficial owner thereof, would not have been entitled
to the payment of such Tax Additional Amounts had such beneficiary, settlor,
member or beneficial owner been the Holder of the Security.

TRANSFER

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for

                                      A-8
<PAGE>

registration or transfer at the office or agency in a Place of Payment for
Securities of this series, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of any
authorized denominations and for the same aggregate principal amount, executed
by the Company and authenticated and delivered by the Trustee, will be issued to
the designated transferee or transferees.

     The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations set forth therein
and on the face of this Security, Securities of this series are exchangeable for
a like aggregate principal amount of Securities of this series of a different
authorized denomination as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee or any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

AMENDMENT, SUPPLEMENT AND WAIVER; LIMITATION ON SUITS

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

     Subject to the right of the Holder of any Securities of this series to
institute proceedings to enforce the Holder's right to receive payment of the
principal thereof (and premium, if any) and interest thereon (or repurchase
price thereof) and any Tax Additional Amounts with respect thereto and to
receive shares on conversion, no Holder of the Securities of this series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to the Indenture, or for the appointment of a receiver or trustee, or for any
other remedy thereunder, unless

                                      A-9
<PAGE>

     (1) an Event of Default with respect to the Securities of this series shall
have occurred and be continuing and such Holder has previously given written
notice to the Trustee of such continuing Event of Default;

     (2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of this series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;

     (3) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;

     (4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and

     (5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities of this series;

it being understood and intended that no one or more of such Holders shall have
the right in any manner whatever by virtue of, or by availing of, any provision
of the Indenture to affect, disturb or prejudice the rights of any other of such
Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under the Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders.

SUCCESSOR CORPORATION

     When a successor corporation assumes all the obligations of its predecessor
under the Securities and the Indenture in accordance with the terms and
conditions of the Indenture, the predecessor corporation will (except in certain
circumstances specified in the Indenture) be released from those obligations.

DEFAULTS AND REMEDIES

     If an Event of Default with respect to Securities of this series shall
occur and be continuing, all unpaid Principal Amount plus accrued and unpaid
interest through the acceleration date of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

DEFEASANCE

     The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Security or certain restrictive covenants and Events of
Default with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.

NO RECOURSE AGAINST OTHERS

     No recourse shall be had for the payment of the principal of or the
interest, if any, on this Security, for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of

                                     A-10
<PAGE>

the Indenture or any indenture supplemental thereto, against any incorporator,
shareholder, officer or directory, as such, past, present or future, of the
Company or of any successor corporation, whether by virtue of any constitution,
statute or rule of law or by the enforcement of any assessment of penalty or
otherwise, all such liability being, by acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.

INDENTURE TO CONTROL; GOVERNING LAW

     In the case of any conflict between the provisions of this Security and the
Indenture, the provisions of the Indenture shall control.

     THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO
THE APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

DEFINITIONS

     All terms defined in the Indenture and used in this Security but not
specifically defined herein are used herein as so defined.

                                     A-11
<PAGE>

                               CONVERSION NOTICE

     To convert this Security into Ordinary Shares of the Company, check the
box: [ ]

     To convert only part of this Security, state the Principal Amount to be
converted (must be $1,000 or a multiple of $1,000): $______________.

     If you want the stock certificate made out in another person's name, fill
in the form below:

________________________________________________________________________________
               (Insert other person's soc. sec. or tax I.D. no.)

________________________________________________________________________________
           (Print or type other person's name, address and zip code)

Your Signature:_____________________________________  Date:_____________________
(Sign exactly as your name appears on the other side of this Security)

* Signature guaranteed by:______________________________________________________

By:________________________________

----------
* The signature must be guaranteed by an institution which is a member of one of
  the following recognized signature guaranty programs: (i) the Securities
  Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange
  Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or
  (iv) such other guaranty program acceptable to the Trustee.

                                     A-12
<PAGE>

            OPTION OF HOLDER TO ELECT PURCHASE ON CHANGE IN CONTROL

          If you want to elect to have this Security purchased, in whole or in
part, by the Company pursuant to Section 1110 of the Indenture, check the
following box:

          If you want to have only part of this Security purchased by the
Company pursuant to Section 1110 of the Indenture, state the Principal Amount
you want to be purchased (must be $1,000 or a multiple of $1,000):
$________________

Your Signature:_________________________________ Date:______________________
(Sign exactly as your name appears on the other side of this Security)

* Signature guaranteed by:__________________________________________________

By:__________________________

-----------
* The signature must be guaranteed by an institution which is a member of one of
  the following recognized signature guaranty programs: (i) the Securities
  Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange
  Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or
  (iv) such other guaranty program acceptable to the Trustee.

                                     A-13<PAGE>

                     AMENDED AND RESTATED CREDIT AGREEMENT
               [Letter of Credit and Hedged Inventory Facility]
            _______________________________________________________

                            PLAINS MARKETING, L.P.,

                                 as Borrower,

                          ALL AMERICAN PIPELINE, L.P.
                                      and
                      PLAINS ALL AMERICAN PIPELINE, L.P.,

                                as Guarantors,

                             FLEET NATIONAL BANK,

                           as Administrative Agent,

                          FIRST UNION NATIONAL BANK,

                             as Syndication Agent,

                            BANK OF AMERICA, N.A.,

                            as Documentation Agent,

              BANK ONE, NA (MAIN OFFICE CHICAGO) and BNP PARIBAS,

                          as Senior Managing Agents,

                            FLEET SECURITIES, INC.,

                      as Lead Arranger and Book Manager,

                      and CERTAIN FINANCIAL INSTITUTIONS,

                                  as Lenders
            _______________________________________________________

                                 $200,000,000

                                  May 4, 2001

================================================================================
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                         <C>
ARTICLE I - Definitions and References.......................................  1
     Section 1.1.  Defined Terms.............................................  1
     Section 1.2.  Exhibits and Schedules; Additional Definitions............ 28
     Section 1.3.  Amendment of Defined Instruments.......................... 28
     Section 1.4.  References and Titles..................................... 29
     Section 1.5.  Calculations and Determinations........................... 29

ARTICLE II - The Loans....................................................... 29
     Section 2.1.  Commitments to Lend; Notes................................ 29
     Section 2.2.  Requests for New Loans.................................... 30
     Section 2.3.  Continuations and Conversions of Existing Loans........... 31
     Section 2.4.  Use of Proceeds........................................... 32
     Section 2.5.  Optional Prepayments of Loans............................. 32
     Section 2.6.  Mandatory Prepayments..................................... 32
     Section 2.7.  Letters of Credit......................................... 33
     Section 2.8.  Requesting Letters of Credit.............................. 34
     Section 2.9.  Reimbursement and Participations.......................... 34
     Section 2.10. No Duty to Inquire........................................ 36
     Section 2.11. LC Collateral............................................. 37
     Section 2.12. Interest Rates and Fees; Reduction in Commitment.......... 38
     Section 2.13. Borrowing Base Reporting.................................. 39

ARTICLE III - Payments to Lenders............................................ 40
     Section 3.1.  General Procedures........................................ 40
     Section 3.2.  Capital Reimbursement..................................... 41
     Section 3.3.  Increased Cost of LIBOR Loans or Letters of Credit........ 41
     Section 3.4.  Notice; Change of Applicable Lending Office............... 42
     Section 3.5.  Availability.............................................. 43
     Section 3.6.  Funding Losses............................................ 43
     Section 3.7.  Reimbursable Taxes........................................ 43

ARTICLE IV - Conditions Precedent to Credit.................................. 45
     Section 4.1.  Documents to be Delivered................................. 45
     Section 4.2.  Additional Conditions Precedent........................... 47

ARTICLE V - Representations and Warranties................................... 48
     Section 5.1.  No Default................................................ 48
     Section 5.2.  Organization and Good Standing............................ 49
     Section 5.3.  Authorization............................................. 49
     Section 5.4.  No Conflicts or Consents.................................. 49
     Section 5.5.  Enforceable Obligations................................... 49
     Section 5.6.  Initial Financial Statements.............................. 50
</TABLE>

<PAGE>

<TABLE>
                                                                            Page
<S>                                                                         <C>
     Section 5.7.  Other Obligations and Restrictions.......................  50
     Section 5.8.  Full Disclosure..........................................  50
     Section 5.9.  Litigation...............................................  50
     Section 5.10. Labor Disputes and Acts of God...........................  51
     Section 5.11. ERISA Plans and Liabilities..............................  51
     Section 5.12. Compliance with Laws.....................................  51
     Section 5.13. Environmental Laws.......................................  52
     Section 5.14. Names and Places of Business.............................  53
     Section 5.15. Borrower's Subsidiaries..................................  54
     Section 5.16. Title to Properties; Licenses............................  54
     Section 5.17. Government Regulation....................................  54
     Section 5.18. Insider..................................................  54
     Section 5.19. Solvency.................................................  54
     Section 5.20. Credit Arrangements......................................  55

ARTICLE VI - Affirmative Covenants..........................................  55
     Section 6.1.  Payment and Performance..................................  55
     Section 6.2.  Books, Financial Statements and Reports..................  55
     Section 6.3.  Other Information and Inspections........................  58
     Section 6.4.  Notice of Material Events and Change of Address..........  59
     Section 6.5.  Maintenance of Properties................................  59
     Section 6.6.  Maintenance of Existence and Qualifications..............  60
     Section 6.7.  Payment of Trade Liabilities, Taxes, etc.................  60
     Section 6.8.  Insurance................................................  60
     Section 6.9.  Performance on Borrower's Behalf.........................  60
     Section 6.10. Interest.................................................  60
     Section 6.11. Compliance with Agreements and Law.......................  61
     Section 6.12. Environmental Matters; Environmental Reviews.............  61
     Section 6.13. Evidence of Compliance...................................  61
     Section 6.14. Agreement to Deliver Security Documents..................  62
     Section 6.15. Perfection and Protection of Security Interests
                   and Liens................................................  62
     Section 6.16. Bank Accounts; Offset....................................  62
     Section 6.17. Guaranties of Subsidiaries...............................  62
     Section 6.18. Compliance with Agreements...............................  63
     Section 6.19. Rents....................................................  63
     Section 6.20. Operating Practices......................................  63

ARTICLE VII - Negative Covenants............................................  64
     Section 7.1.  Indebtedness.............................................  64
     Section 7.2.  Limitation on Liens......................................  65
     Section 7.3.  Hedging Contracts........................................  67
     Section 7.4.  Limitation on Mergers, Issuances of Securities...........  67
     Section 7.5.  Limitation on Sales of Property..........................  68
     Section 7.6.  Limitation on Dividends and Redemptions..................  69
     Section 7.7.  Limitation on Investments and New Businesses.............  69
     Section 7.8.  Limitation on Credit Extensions..........................  70
</TABLE>
<PAGE>

<TABLE>
<S>                                                                          <C>
     Section 7.9.  Transactions with Affiliates............................. 70
     Section 7.10. Prohibited  Contracts.................................... 70
     Section 7.11. Current Ratio............................................ 70
     Section 7.12. Debt Coverage Ratio...................................... 71
     Section 7.13. Interest Coverage Ratio.................................. 71
     Section 7.14. Debt to Capital Ratio.................................... 71
     Section 7.15. Open Position; Certain Permitted Financial
                   Instruments; NYMEX Transactions.......................... 72
     Section 7.16. Redelivery of Borrowing Base Report...................... 73
     Section 7.17. 3794865 Canada Ltd....................................... 73

ARTICLE VIII - Events of Default and Remedies............................... 74
     Section 8.1.  Events of Default........................................ 74
     Section 8.2.  Remedies................................................. 77

ARTICLE IX - Administrative Agent........................................... 77
     Section 9.1.  Appointment and Authority................................ 77
     Section 9.2.  Exculpation, Administrative Agent's Reliance, Etc........ 78
     Section 9.3.  Credit Decisions......................................... 78
     Section 9.4.  Indemnification.......................................... 78
     Section 9.5.  Rights as Lender......................................... 79
     Section 9.6.  Sharing of Set-Offs and Other Payments................... 79
     Section 9.7.  Investments.............................................. 80
     Section 9.8.  Benefit of Article IX.................................... 80
     Section 9.9.  Resignation.............................................. 80
     Section 9.10. Other Agents............................................. 81

ARTICLE X - Miscellaneous................................................... 81
     Section 10.1.  Waivers and Amendments; Acknowledgments................. 81
     Section 10.2.  Survival of Agreements; Cumulative Nature............... 83
     Section 10.3.  Notices................................................. 83
     Section 10.4.  Payment of Expenses; Indemnity.......................... 84
     Section 10.5.  Joint and Several Liability; Parties in Interest;
                    Assignments; Replacement Notes.......................... 85
     Section 10.6.  Confidentiality......................................... 88
     Section 10.7.  Governing Law; Submission to Process.................... 88
     Section 10.8.  Waiver of Judgment Interest Act (Alberta)............... 89
     Section 10.9.  Deemed Reinvestment Not Applicable...................... 89
     Section 10.10. Limitation on Interest.................................. 90
     Section 10.11. Termination; Limited Survival........................... 90
     Section 10.12. Severability............................................ 91
     Section 10.13. Counterparts............................................ 91
     Section 10.14. Waiver of Jury Trial, Punitive Damages, etc............. 91
     Section 10.15. Amendment and Restatement............................... 92
</TABLE>
<PAGE>

Schedules and Exhibits:
----------------------

Schedule 1 - Lender Schedule
Schedule 2 - Disclosure Schedule
Schedule 3 - Security Schedule
Schedule 4 - Insurance Schedule
Schedule 5 - Borrowing Base Procedures

Exhibit A - Promissory Note
Exhibit B - Borrowing Notice
Exhibit C - Continuation/Conversion Notice
Exhibit D - Forms of Letter of Credit
Exhibit E - Letter of Credit Application and Agreement
Exhibit F - Certificate Accompanying Financial Statements
Exhibit G-1 - Opinion of In-House Counsel for Restricted Persons
Exhibit G-2 - Opinion of Fulbright & Jaworski L.L.P., Counsel for Restricted
Persons
Exhibit G-3 - Opinion of Bennett Jones, Canadian Counsel for Restricted Persons
Exhibit H - Borrowing Base Report
Exhibit I - Environmental Compliance Certificate
Exhibit J - Assignment and Acceptance Agreement
Exhibit K - Intercreditor Agreement
<PAGE>

                     AMENDED AND RESTATED CREDIT AGREEMENT
                     -------------------------------------

     THIS AMENDED AND RESTATED CREDIT AGREEMENT is made as of May 4, 2001, by
and among PLAINS MARKETING, L.P. ("Borrower"), a Delaware limited partnership,
ALL AMERICAN PIPELINE, L.P. ("All American"), a Texas limited partnership,
PLAINS ALL AMERICAN PIPELINE, L.P. ("Plains MLP"), a Delaware limited
partnership, and FLEET NATIONAL BANK, as administrative agent (in such capacity,
"Administrative Agent"), FIRST UNION NATIONAL BANK, as syndication agent (in
such capacity, "Syndication Agent"), BANK OF AMERICA, N.A., as documentation
agent (in such capacity, "Documentation Agent"), FLEET SECURITIES, INC., as lead
arranger and book manager (in such capacity, "Lead Arranger and Book Manager")
and the Lenders referred to below.

                             W I T N E S S E T H:

     WHEREAS, Borrower, All American, Plains MLP, Administrative Agent, and
Lenders entered into that certain Credit Agreement [Letter of Credit and Hedged
Inventory Facility] dated May 8, 2000 (as amended, restated, or supplemented to
the date hereof, the "Existing Agreement") for the purposes and consideration
therein expressed, pursuant to which one or more such Lenders became obligated
to make and made loans to, and issue letters of credit for the account of,
Borrower as therein provided; and

     WHEREAS, Borrower, All American, Plains MLP, Administrative Agent, and
Lenders desire to amend and restate the Existing Agreement for the purposes
described herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Existing Agreement, as amended and
restated hereby, in consideration of the loans which may hereafter be made by
Lenders to, and the Letters of Credit that may hereafter be issued by the LC
Issuer for the account of, Borrower, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto do hereby agree as follows:

                    ARTICLE I - Definitions and References
                                --------------------------

     Section 1.1.  Defined Terms.  As used in this Agreement, each of the
                   -------------
following terms has the meaning given to such term  in this Section 1.1 or in
the sections and subsections referred to below:

     "Acceptable Issuer" means any national or state bank or trust company which
      -----------------
is organized under the laws of the United States of America or any state thereof
or any branch licensed to operate under the laws of the United States of America
or any state thereof, which is a branch of a bank organized under any country
which is a member of the Organization for Economic Cooperation and Development,
in each case which has capital, surplus and undivided profits of at least
$500,000,000 and whose commercial paper is rated at least P-1 by Moody's or A-1
by S&P.

                                       1
<PAGE>

     "Account" shall have the meaning given that term in the UCC.
      -------

     "Account Debtor" means any Person who is or who may become obligated under,
      --------------
with respect to, or on account of, an Account.

     "Administrative Agent" means Fleet National Bank, as Administrative Agent
      --------------------
hereunder, and its successors in such capacity.

     "Affiliate" means, as to any Person, each other Person that directly or
      ---------
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person.  A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power

          (a)  to vote 5% or more of the securities (on a fully diluted basis)
     having ordinary voting power for the election of directors or managing
     general partners; or

          (b)  to direct or cause the direction of the management and policies
     of such Person whether by contract or otherwise.

     "Affiliate Agreements" means the Crude Oil Marketing Agreement and the
      --------------------
Omnibus Agreement.

     "Agent" means any of the Administrative Agent, Syndication Agent or
      -----
Documentation Agent.

     "Agreement" means this Credit Agreement.
      ---------

     "All American" means All American Pipeline, L.P., a Texas limited
      ------------
partnership.

     "Applicable Lending Office" means, with respect to each Lender, such
      -------------------------
Lender's Domestic Lending Office in the case of Base Rate Loans and such
Lender's LIBOR Lending Office in the case of LIBOR Loans.

     "Applicable Leverage Level" means the level set forth below that
      -------------------------
corresponds to the ratio of (i) Consolidated Funded Indebtedness of Plains MLP
and its Subsidiaries to (ii) the Consolidated EBITDA for the applicable period
of four Fiscal Quarters (the "Leverage Ratio"):

                                       2
<PAGE>

<TABLE>
<CAPTION>
            ==========================================================
               Applicable
             Leverage Level              Leverage Ratio
             --------------              --------------
            ----------------------------------------------------------
             <S>                <C>
               Level I          greater than or equal to 4.50 to 1.0
            ----------------------------------------------------------
               Level II         greater than or equal to 4.25 to 1.0
                                     but less than 4.50 to 1.0
            ----------------------------------------------------------
               Level III        greater than or equal to 4.00 to 1.0
                                     but less than 4.25 to 1.0
            ----------------------------------------------------------
               Level IV         greater than or equal to 3.50 to 1.0
                                     but less than 4.00 to 1.0
            ----------------------------------------------------------
               Level V          greater than or equal to 3.00 to 1.0
                                     but less than 3.50 to 1.0
            ----------------------------------------------------------
               Level VI         greater than or equal to 2.25 to 1.0
                                     but less than 3.00 to 1.0
            ----------------------------------------------------------
               Level VII        greater than or equal to 1.75 to 1.0
                                     but less than 2.25 to 1.0
            ----------------------------------------------------------
               Level VIII               less than 1.75 to 1.0
            ==========================================================
</TABLE>

The Leverage Ratio will be determined as of the date hereof based upon the pro
forma Initial Financial Statements, and shall be determined thereafter quarterly
by Administrative Agent within two (2) Business Days after Administrative
Agent's receipt of Plains MLP's Consolidated financial statements for the
immediate preceding Fiscal Quarter based upon:  (i) Consolidated Funded
Indebtedness as of the end of such Fiscal Quarter, and (ii) the Consolidated
EBITDA for the four Fiscal Quarters ending with such Fiscal Quarter.  The
Applicable Leverage Level shall become effective upon such determination of the
Leverage Ratio by Administrative Agent and shall remain effective until the next
such determination by Administrative Agent of the Leverage Ratio.

     "Approved Eligible Receivables" means each Eligible Receivable (other than
      -----------------------------
Eligible Exchange Balances) (a) from a Person whose Debt Rating is either at
least Baa3 by Moody's or at least BBB- by S&P; (b) fully and unconditionally
guaranteed as to payment by a Person whose Debt Rating is either at least Baa3
by Moody's or at least BBB- by S&P; (c) from any other Person Currently Approved
by Majority Lenders; or (d) fully covered by a letter of credit from an
Acceptable Issuer.

     "Available Cash" has the meaning given such term in the Partnership
      --------------
Agreement.

     "Bankruptcy and Insolvency Act (Canada)" means the Bankruptcy and
      --------------------------------------
Insolvency Act, S.C. 1992, c. 27, including the regulations made and, from time
to time, in force under that Act.

                                       3
<PAGE>

     "Base Rate" means the sum of (a) the Base Rate Margin plus (b) the higher
      ---------
of (i) the variable per annum rate of interest so designated from time to time
by Administrative Agent as its "prime rate", or (ii) the Federal Funds Rate plus
one-half percent (0.5%) per annum.  The "prime rate" is a reference rate and
does not necessarily represent the lowest or best rate being charged to any
customer.  Changes in the Base Rate resulting from changes in the "prime rate"
shall take place immediately without notice or demand of any kind.

     "Base Rate Loan" means a Loan which does not bear interest at the LIBOR
      --------------
Rate.

     "Base Rate Margin" means (i) from the date hereof through but not including
      ----------------
the six-month anniversary of the date hereof, the greater of (A) 0.125% per
annum and (B) the percent per annum set forth below based on the Applicable
Leverage Level in effect on such date, and (ii) on and after the six-month
anniversary of the date hereof, the percent per annum set forth below based on
the Applicable Leverage Level in effect on such date.

<TABLE>
<CAPTION>
          ===================================================
            Applicable Leverage Level       Base Rate Margin
          ---------------------------------------------------
           <S>                              <C>
           Level I, Level II, Level III          0.250%
                   or Level IV
          ---------------------------------------------------
                     Level V                     0.125%
          ---------------------------------------------------
              Level VI, Level VII or             0.000%
                    Level VIII
          ===================================================
</TABLE>

Changes in the applicable Base Rate Margin will occur automatically without
prior notice as changes in the Applicable Leverage Level occur.  Administrative
Agent will give notice promptly to Borrower and Lenders of changes in the Base
Rate Margin.

     "Borrower" means Plains Marketing, L.P., a Delaware limited partnership.
      --------

     "Borrowing" means a borrowing of new Loans of a single Type pursuant to
      ---------
Section 2.2 or a Continuation or Conversion of all or a portion of an existing
Loan (whether alone or as a combination with a new Loan) into a single Type
(and, in the case of LIBOR Loans, with the same Interest Period) pursuant to
Section 2.3.

     "Borrowing Base" means the remainder of (a) minus (b) below as of the date
      --------------
of determination (without duplication):

     (a) the sum of the following as of the date of determination :

          (i)  100% of Eligible Cash Equivalents; plus

          (ii) 90% of Approved Eligible Receivables; plus

                                       4
<PAGE>

          (iii)  the lesser of (A) 85% of Other Eligible Receivables or (B) 1/3
                 of the sum of the amounts of clauses (a)(i) plus (a)(ii)
                 [(i.e., (a)(i) plus (a)(ii) must be 75% of (a)(i) plus (a)(ii)
                 plus (a)(iii)]; plus

          (iv)   85% of Eligible Margin Deposits; plus

          (v)    the lesser of (A) 95% of Hedged Eligible Inventory plus 100% of
                 Other Eligible Inventory Value or (B) $100,000,000; plus

          (vi)   80% of Eligible Exchange Balances; plus

          (vii)  100% of all Paid but Unexpired Letters of Credit

     MINUS (b) the following as of the date of determination:

          (i)    100% of First Purchase Crude Payables; plus

          (ii)   100% of Other Priority Claims; plus

          (iii)  The Estimate Adjustment Amount as provided in Section 2.13;
                 plus

          (iv)   The amount of any setoff or contra account to any Eligible
                 Receivable which could arise from an obligation of Borrower to
                 sell or purchase Petroleum Products in any future month to the
                 extent not otherwise reflected as a reduction of Eligible
                 Receivables, such amount to be determined on an early
                 termination or mark to market basis.

MINUS that portion of such amount attributed to natural gas liquids or propane
exceeding $40,000,000.

     "Borrowing Notice" means a written or telephonic request, or a written
      ----------------
confirmation, made by Borrower which meets the requirements of Section 2.2.

     "Business Day" means any day, other than a Saturday, Sunday or day which
      ------------
shall be in the Commonwealth of Massachusetts a legal holiday or day on which
banking institutions are required or authorized to close.  Any Business Day in
any way relating to LIBOR Loans (such as the day on which an Interest Period
begins or ends) must also be a day on which commercial banks settle payments in
London.

     "Canadian Cash and Carry Purchases" means purchases of Petroleum Products
      ---------------------------------
for physical storage at a Plains Terminal or in storage or in transit in
pipelines Currently Approved by Majority Lenders which constitute Canadian
Hedged Eligible Inventory, as such terms are defined in the Revolver Agreement.

     "Canadian Dollars" and "C$" means the lawful currency of Canada.
      ----------------       --

                                       5
<PAGE>

     "Canadian Letter of Credit" means any Letter of Credit related to a
      -------------------------
purchase or exchange of Petroleum Products in Canada by any Canadian Subsidiary.

     "Canadian Subsidiaries" means each of PMC (Nova Scotia) Company, a Nova
      ---------------------
Scotia unlimited liability company, Plains Marketing Canada, L.P., an Alberta
limited partnership, and each of their Subsidiaries, whether now owned or
existing or hereafter formed or acquired.

     "CanPet Acquisition" means the acquisition by Borrower and Plains Marketing
      ------------------
Canada, L.P. of all or substantially all of the assets of CanPet Energy Group
(USA) Inc. and CanPet Energy Group, Inc., respectively, pursuant to the CanPet
Acquisition Documents.

     "CanPet Acquisition Closing Date" means the date on which the CanPet
      -------------------------------
Acquisition shall have been consummated and Borrower and Plains Marketing
Canada, L.P. shall have taken good and defensible title to the assets subject
thereof.

     "CanPet Acquisition Documents" means the purchase and sale agreement, title
      ----------------------------
transfer documents and all other agreements or instruments executed and
delivered by Borrower, Plains Marketing Canada, L.P. or any of their Affiliates
in connection therewith to consummate the CanPet Acquisition.

     "Capital Lease" means a lease with respect to which the lessee is required
      -------------
concurrently to recognize the acquisition of an asset and the incurrence of a
liability in accordance with GAAP.

     "Capital Lease Obligation" means, with respect to any Person and a Capital
      ------------------------
Lease, the amount of the obligation of such Person as the lessee under such
Capital Lease which would, in accordance with GAAP, appear as a liability on a
balance sheet of such Person.

     "Cash and Carry Purchases" means purchases of Petroleum Products for
      ------------------------
physical storage at a Plains Terminal or in storage or in transit in pipelines
Currently Approved by Majority Lenders which constitute Hedged Eligible
Inventory.

     "Cash Equivalents" means Investments in:
      ----------------

     (a)  marketable obligations, maturing within 12 months after acquisition
thereof, issued or unconditionally guaranteed by the United States of America or
the federal government of Canada or an instrumentality or agency thereof and
entitled to the full faith and credit of the United States of America or the
federal government of Canada, as the case may be;

     (b)  demand deposits and time deposits (including certificates of deposit)
maturing within 12 months from the date of deposit thereof, (i) with any office
of any Lender or (ii) with a domestic office of any national, state or
provincial bank or trust company which is organized under the Laws of the United
States of America or any state therein, or the federal government of Canada or
any province therein, which has capital, surplus and undivided profits of at
least $500,000,000, and whose long-term certificates of deposit are rated at
least Aa3 by Moody's or AA- by S&P;

                                       6
<PAGE>

     (c)  repurchase obligations with a term of not more than seven days for
underlying securities of the types described in subsection (a) above entered
into with (i) any Lender or (ii) any other commercial bank meeting the
specifications of subsection (b) above;

     (d)  open market commercial paper, maturing within 270 days after
acquisition thereof, which are rated at least P-1 by Moody's or A-1 by S&P; and

     (e)  money market or other mutual funds substantially all of whose assets
comprise securities of the types described in subsections (a) through (d) above.

     "Change of Control" means the occurrence of any of the following events:
      -----------------
(i) an event or series of events by which any Person or other entity or group of
Persons or other entities acting in concert as a partnership or other group (a
"Group of Persons") shall, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases, merger, consolidation or
otherwise, have become the beneficial owner (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended) of (A) 50% or more of the
combined voting power of the then outstanding voting stock of Resources, in the
case of any Person or Group of Persons constituting or controlled by Affiliates
of Kayne Anderson Investment Management, Inc., or (B) 40% or more of such
combined voting power in the case of any other Person or Group of Persons, (ii)
during any period of two consecutive years (A) the members of the board of
directors of Resources (the "Board") as of January 1, 2001, (B) any director
elected thereafter in any annual meeting of the stockholders of Resources upon
the recommendation of the Board, and (C) any other member of the Board who will
be recommended or elected to succeed those Persons described in subclauses (A)
and (B) of this clause (ii) by a majority of such Persons who are then members
of the Board, cease for any reason to constitute collectively a majority of the
Board then in office, (iii) the direct or indirect sale, lease, exchange or
other transfer of all or substantially all of the Consolidated assets of
Resources and its Subsidiaries, to any Person or Group of Persons, or (iv)
Resources, either directly or through a Wholly Owned Subsidiary of Resources,
shall cease to be the legal and beneficial owner (as defined above) of more than
50% of the voting power of the outstanding voting stock of General Partner, or
General Partner shall cease to be, directly or indirectly, the sole legal and
beneficial owner (as defined above) of all of the general partner interests
(including all securities which are convertible into general partner interests),
of Plains MLP, All American, or Borrower, (v) any Person or Group of Persons
other than Resources or any Subsidiary of Resources shall be the legal and
beneficial owner (as defined above) of 50% or more of the combined voting power
of the then total partnership interests (including all securities which are
convertible into partnership interests) of Plains MLP, Borrower, All American or
any other Restricted Person that is a partnership, (vi) Plains MLP or Borrower
shall cease to be the sole legal and beneficial owner (as defined above) of all
of the limited partnership interests of Borrower and All American, respectively
(including all securities which are convertible into limited partner interests),
(vii) Borrower shall cease to be the direct or indirect owner of all capital
stock of PMC (Nova Scotia) Company or all partnership interests of Plains
Marketing Canada, L.P. (other than the limited partnership interests of Plains
Marketing Canada, L.P. that may be issued to CanPet Energy Group (USA), Inc. or
CanPet Energy Group Inc., as permitted under Section 7.4), or (viii) Resources
and its Wholly Owned Subsidiaries taken as a whole shall hold legal and
beneficial ownership of issued and outstanding partnership
                                       7
<PAGE>

interests of Plains MLP representing less than 5% of the total outstanding
partnership interests of Plains MLP.

     "Co-Agent" shall have the meaning given that term in Section 9.10.
      --------

     "Code" means the Internal Revenue Code of 1986, as amended from time to
      ----
time, together with all rules and regulations promulgated with respect thereto.

     "Collateral" means all property of any kind which is subject to a Lien in
      ----------
favor of Lenders (or in favor of Administrative Agent or the collateral agent
under the Intercreditor Agreement for the benefit of Lenders) or which, under
the terms of any Security Document, is purported to be subject to such a Lien,
in each case granted or created to secure all or part of the Obligations.

     "Commitment Fee Rate" means, on any day (i) from the date hereof through
      -------------------
but not including the six-month anniversary of the date hereof, 0.5% per annum,
and (ii) on and after the six-month anniversary of the date hereof, the rate per
annum set forth below based on the Applicable Leverage Level on such date.

<TABLE>
<CAPTION>
          =======================================================
              Applicable Leverage Level       Commitment Fee Rate
          -------------------------------------------------------
          <S>                                 <C>
          Level I or Level II or Level III           0.500%
               or Level IV or Level V
          -------------------------------------------------------
               Level VI or Level VII                 0.375%
          -------------------------------------------------------
                     Level VIII                      0.250%
          =======================================================
</TABLE>

Changes in the applicable Commitment Fee Rate will occur automatically without
prior notice as changes in the Applicable Leverage Level occur.  Administrative
Agent will give notice promptly to Borrower and Lenders of changes in the
Commitment Fee Rate.

     "Commitment Period" means the period from and including the date hereof
      -----------------
until April 30, 2004 (or, if earlier, the day on which (i) the obligation of
Lenders to make Loans hereunder and the obligations of LC Issuer to issue
Letters of Credit hereunder have terminated, (ii) the obligation of LC Issuer to
issue Letters of Credit hereunder has terminated, or (iii) the Notes first
become due and payable in full, whichever shall first occur).

     "Companies' Creditors Arrangement Act (Canada)" means the Companies'
      ---------------------------------------------
Creditors Arrangement Act, R.S.C. 1985, c. C-36, including the regulations made
and from time to time in force under that Act.

     "Consolidated" refers to the consolidation of any Person, in accordance
      ------------
with GAAP, with its properly consolidated subsidiaries.  References herein to a
Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.

                                       8
<PAGE>

     "Consolidated EBITDA" means, for any period, the sum of (1) the
      -------------------
Consolidated Net Income of Plains MLP and its Subsidiaries during such period,
plus (2) all interest expense which was deducted in determining such
Consolidated Net Income for such period, plus (3) all income taxes (including
any franchise taxes to the extent based upon net income) which were deducted in
determining such Consolidated Net Income, plus (4) all depreciation,
amortization (including amortization of good will and debt issue costs) and
other non-cash charges (including any provision for the reduction in the
carrying value of assets recorded in accordance with GAAP) which were deducted
in determining such Consolidated Net Income, plus (5) settlement payments made
in such period with respect to litigation arising out of the unauthorized
trading activity by Borrower during the period of January 1, 1999 to November
20, 1999 not to exceed an aggregate amount of $6,963,000, minus (6) all non-cash
items of income which were included in determining such Consolidated Net Income.

     "Consolidated Funded Indebtedness" means as of any date, the sum of the
      --------------------------------
following (without duplication): (i) all Indebtedness which is classified as
"long-term indebtedness" on a consolidated balance sheet of Plains MLP and its
Consolidated Subsidiaries prepared as of such date in accordance with GAAP and
any current maturities and other principal amount in respect of such
Indebtedness due within one year but which was classified as "long-term
indebtedness" at the creation thereof, (ii) indebtedness for borrowed money of
Plains MLP and its Consolidated Subsidiaries outstanding under a revolving
credit or similar agreement providing for borrowings (and renewals and
extensions thereof) over a period of more than one year, notwithstanding the
fact that any such borrowing is made within one year of the expiration of such
agreement, and (iii) Indebtedness in respect of Capital Leases of Plains MLP and
its Consolidated Subsidiaries; provided, however, Consolidated Funded
Indebtedness shall not include Indebtedness in respect of letters of credit or
in respect of Cash and Carry Purchases, Canadian Cash and Carry Purchases or
margin deposits.

     "Consolidated Net Income" means, for any period, Plains MLP's and its
      -----------------------
Subsidiaries' gross revenues for such period, including any cash dividends or
distributions actually received from any other Person during such period, minus
Plains MLP's and its Subsidiaries' expenses and other proper charges against
income (including taxes on income to the extent imposed), determined on a
Consolidated basis after eliminating earnings or losses attributable to
outstanding minority interests and excluding the net earnings of any Person
other than a Subsidiary in which Plains MLP or any of its Subsidiaries has an
ownership interest. Consolidated Net Income shall not include (i) any gain or
loss from the sale of assets, (ii) any extraordinary gains or losses, or (iii)
any non-cash gains or losses resulting from mark to market activity as a result
of the implementation of SFAS 133. In addition, Consolidated Net Income shall
not include the cost or proceeds of purchasing or selling options which are used
to hedge future activity, until the period in which such hedged future activity
occurs.

     "Consolidated Net Worth" means the remainder of all Consolidated assets, as
      ----------------------
determined in accordance with GAAP, of Plains MLP and its Subsidiaries minus the
sum of (a) Plains MLP's Consolidated liabilities, as determined in accordance
with GAAP, and (b) all outstanding Minority Interests. The effect of any
increase or decrease in net worth in any period as a result of items of income
or loss not reflected in the determination of net income but reflected in the

                                       9
<PAGE>

determination of comprehensive income (to the extent provided under GAAP as in
effect on the date hereof) shall be excluded in determining Consolidated Net
Worth. "Minority Interests" means the book value of any equity interests in any
of Plains MLP's Subsidiaries (exclusive of the general partner interests held,
directly or indirectly, by the General Partner in Borrower, All American or any
other Restricted Person and by PMC (Nova Scotia) Company in Plains Marketing
Canada, L.P., in each case of up to two percent (2%) of the aggregate ownership
interest in any such Person) which equity interests are owned by a Person other
than Plains MLP or a Wholly Owned Subsidiary of Plains MLP.

     "Continuation/Conversion Notice" means a written or telephonic request, or
      ------------------------------
a written confirmation, made by Borrower which meets the requirements of Section
2.3.

     "Continue", "Continuation", and "Continued" shall refer to the continuation
      --------    ------------        ---------
pursuant to Section 2.3 hereof of a LIBOR Loan as a LIBOR Loan from one Interest
Period to the next Interest Period.

     "Convert", "Conversion", and "Converted" shall refer to a conversion
      --------------------------------------
pursuant to Section 2.3 or Article III of one Type of Loan into another Type of
Loan.

     "Crude Oil Marketing Agreement" means that certain Crude Oil Marketing
      -----------------------------
Agreement among Resources, Plains Illinois Inc., Stocker Resources, L.P.,
Arguello Inc. and Borrower dated November 23, 1998.

     "Current Trading Month" has the meaning given that term in Section 7.15.
      ---------------------

     "Currently Approved by Majority Lenders" means such Person (including a
      --------------------------------------
limit on the maximum credit exposure to any such Person), storage location,
pipeline, form of Letter of Credit or other matter as the case may be, as
reflected in the most recent written notice given by Administrative Agent to
Borrower as being approved by Majority Lenders.  Each such written notice will
supersede and revoke each prior notice.

     "Debt Coverage Ratio" shall have the meaning given that term in Section
      -------------------
7.12.

     "Debt Rating" means with respect to a Person, the rating then in effect by
      -----------
a Rating Agency for the long term senior unsecured non-credit enhanced debt of
such Person.

     "Default" means any Event of Default and any default, event or condition
      -------
which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.

     "Default Rate" means, at the time in question, (i) three and three-fourths
      ------------
percent (3.75%) per annum plus the LIBOR Rate then in effect for any LIBOR Loan
(up to the end of the applicable Interest Period) or (ii) two percent (2%) per
annum plus the Base Rate for each Base Rate Loan; provided, however, the Default
Rate shall never exceed the Highest Lawful Rate

                                      10
<PAGE>

     "Default Rate Period" means (i) any period during which an Event of
      -------------------
Default, other than pursuant to Section 8.1 (a) or (b), is continuing, provided
that such period shall not begin until notice of the commencement of the Default
Rate has been given to Borrower by Administrative Agent upon the instruction by
Majority Lenders and (ii) any period during which any Event of Default pursuant
to Section 8.1 (a) or (b) is continuing unless Borrower has been notified
otherwise by Administrative Agent upon the instruction by Majority Lenders.

     "Disclosure Schedule" means Schedule 2 hereto.
      -------------------

     "Dollar Equivalent" of any amount of any currency at any date means (i) if
      -----------------
such currency is Dollars, the amount of such currency, or (ii) if such currency
is Canadian Dollars, the equivalent in Dollars of such amount of such currency
based upon the rate of exchange for such conversion as quoted by the Bank of
Canada at approximately 12:00 noon, Toronto time (or, if not so quoted, the spot
rate of exchange quoted for wholesale transactions made by Administrative Agent)
on the date on or as of which such amount is to be determined.

     "Dollars" and "$" means the lawful currency of the United States of
      -------       -
America, except where otherwise specified.

     "Domestic Lending Office" means, with respect to any Lender, the office of
      -----------------------
such Lender specified as its "Domestic Lending Office" in the Lender Schedule
hereto, or such other office as such Lender may from time to time specify to
Borrower and Administrative Agent; with respect to LC Issuer, the office,
branch, or agency through which it issues Letters of Credit; and, with respect
to Administrative Agent, the office, branch, or agency through which it
administers this Agreement.

     "Effective Time" shall have the meaning given that term in Section 10.13.
      --------------

     "Eligible Cash Equivalents" means Cash Equivalents in which Borrower has
      -------------------------
lawful and absolute title, which are free from any express or implied at law
Lien, trust or other beneficial interest, in which Administrative Agent holds a
fully perfected first-priority security interest prior to the rights of, and
enforceable as such against, any other Persons pursuant to an account agreement
satisfactory to Administrative Agent and which remain under the sole dominion
and control of Administrative Agent.

     "Eligible Exchange Balances" means each Approved Eligible Receivable
      --------------------------
(including for this purpose only either the right to receive Petroleum Products
in kind or to receive money) arising from the trading, lending, borrowing or
exchange of Petroleum Products, net of any netted obligations or other offsets
or counterclaims determined in accordance with prices set forth in the
applicable exchange contracts, based on current value at the Market Price, in
which Borrower has lawful and absolute title, which is not subject to any Lien
in favor of any Person (other than Permitted Inventory Liens), and which is
subject to a fully perfected first-priority security interest (subject only to
Permitted Inventory Liens) in favor of Administrative Agent pursuant to the Loan
Documents prior to the rights of, and enforceable as such against, any other

                                      11
<PAGE>

Persons minus without duplication the amount of any Permitted Inventory Lien on
any Petroleum Products receivable in kind.

     "Eligible Inventory" means inventories of Petroleum Products in which
      ------------------
Borrower has lawful and absolute title (specifically excluding, however, tank
bottoms and pipeline linefill of any Restricted Person classified as a long-term
asset), which are not subject to any Lien in favor of any Person (other than
Permitted Inventory Liens), which are subject to a fully perfected first
priority security interest (subject only to Permitted Inventory Liens) in favor
of Administrative Agent pursuant to the Loan Documents prior to the rights of,
and enforceable as such against, any other Person, which are otherwise
satisfactory to Majority Lenders in their reasonable business judgment and which
are located in storage locations (including pipelines) which are either (a)
owned by a Restricted Person or (b) Currently Approved by Majority Lenders minus
without duplication the amount of any Permitted Inventory Lien on any such
inventory.  Eligible Inventory shall specifically exclude inventory to be
delivered in the current or next succeeding trading month.

     "Eligible Margin Deposit" means net equity value of investments by Borrower
      -----------------------
in margin deposit accounts with commodities brokers on nationally recognized
exchanges subject to a perfected security interest in favor of Administrative
Agent and a three-party agreement among Borrower, Administrative Agent and the
depository institution, in form and substance satisfactory to Administrative
Agent.

     "Eligible Receivables" means, at the time of any determination thereof (and
      --------------------
without duplication), each Account and, with respect to each determination made
on or after the 20th day of each calendar month and prior to the first day of
the next calendar month, each amount which will be, in the good faith estimate
reasonably determined by Borrower, an Account of the Borrower or Plains
Marketing Canada, L.P. with respect to sales and deliveries of Petroleum
Products during such calendar month or deliveries of Petroleum Products during
the next calendar month under firm written purchase and sale agreements, in
either event as to which the following requirements have been fulfilled (or as
to future Accounts, will be fulfilled as of the date of such sales and
deliveries of Petroleum Products), to the reasonable satisfaction of
Administrative Agent:

          (i)    Borrower or Plains Marketing Canada, L.P. has lawful and
     absolute title to such Account;

          (ii)   such Account is a valid, legally enforceable obligation of an
     Account Debtor payable in Dollars or Canadian Dollars, arising from the
     sale and delivery of Petroleum Products to such Person in the United States
     of America or Canada in the ordinary course of business of Borrower or
     Plains Marketing Canada, L.P., to the extent of the volumes of Petroleum
     Products delivered to such Person prior to the date of determination;

          (iii)  there has been excluded from such Account (A) any portion that
     is subject to any dispute, rejection, loss, non-conformance, counterclaim
     or other claim or defense

                                      12
<PAGE>

     on the part of any Account Debtor or to any claim on the part of any
     Account Debtor denying liability under such Account, and (B) the amount of
     any account payable or other liability owed by Borrower or Plains Marketing
     Canada, L.P. to the Account Debtor on such Account, whether or not a
     specific netting agreement may exist, excluding, however, any portion of
     any such account payable or other liability which is at the time in
     question covered by a Letter of Credit;

          (iv)   Borrower or Plains Marketing Canada, L.P. has the full and
     unqualified right to assign and grant a security interest in such Account
     to Administrative Agent as security for the Obligation;

          (v)    such Account (A) is evidenced by an invoice rendered to the
     Account Debtor, or (B) represents the uninvoiced amount in respect of
     volumes of Petroleum Products scheduled to be delivered by Borrower or
     Plains Marketing Canada, L.P. in the current or next-following calendar
     month, is governed by a purchase and sale agreement, exchange agreement or
     other written agreement, and in either event such Account is not evidenced
     by any promissory note or other instrument;

          (vi)   such Account is not subject to any Lien in favor of any Person
     and is subject to a fully perfected first priority security interest in
     favor of Administrative Agent pursuant to the Loan Documents, prior to the
     rights of, and enforceable as such against, any other Person except for a
     Lien in respect of First Purchase Crude Payables;

          (vii)  such Account is due not more than 30 days following the last
     day of the calendar month in which the Petroleum Products delivery occurred
     and is not more than 30 days past due (except that Accounts of a single
     Account Debtor in excess of the Dollar Equivalent of $500,000 which are not
     Approved Eligible Receivables shall be excluded from Eligible Receivables
     if not paid within three Business Days after the due date);

          (viii) such Account is not payable by an Account Debtor with more
     than twenty percent (20%) of its Accounts to Borrower or Plains Marketing
     Canada, L.P. that are outstanding more than 60 days from the invoice date;

          (ix)   the Account Debtor in respect of such Account (A) is located,
     is conducting significant business or has significant assets in the United
     States of America or Canada or is a Person Currently Approved by Majority
     Lenders, (B) is not an Affiliate of Borrower or Plains Marketing Canada,
     L.P., and (C) is not the subject of any event of the type described in
     Section 8.1(i);

          (x)    the Account Debtor in respect of such Account is not a
     governmental authority, domestic or foreign;

          (xi)   such Account is not the obligation of an Account Debtor that
     Administrative Agent or Majority Lenders determine in good faith that there
     is a legitimate concern over the timing or collection of such receivable;
     and

                                      13
<PAGE>

          (xii)  if such Account is an Account owned by Plains Marketing Canada,
     L.P., to the extent the Lien on such Account in favor of Administrative
     Agent described in clause (vi) above is valid and non-avoidable under
     applicable Law.

     "Eligible Transferee" means a Person which either (a) is a Lender, or (b)
      -------------------
is consented to as an Eligible Transferee by Administrative Agent and, so long
as no Default or Event of Default is continuing, by Borrower, which consents in
each case will not be unreasonably withheld (provided that no Person organized
outside the United States may be an Eligible Transferee if Borrower would be
required to pay withholding taxes on interest or principal owed to such Person).

     "Environmental Laws" means any and all Laws relating to the environment or
      ------------------
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
      -----
amended from time to time, together with all rules and regulations promulgated
with respect thereto.

     "ERISA Affiliate" means each Restricted Person and all members of a
      ---------------
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control that, together with such Restricted Person,
are treated as a single employer under Section 414 of the Code.

     "ERISA Plan" means any employee pension benefit plan subject to Title IV of
      ----------
ERISA maintained by any ERISA Affiliate with respect to which any Restricted
Person has a fixed or contingent liability.

     "Event of Default" has the meaning given to such term in Section 8.1.
      ----------------

     "Existing Agreement" has the meaning given in the first recital.
      ------------------

     "Facility Usage" means, at the time in question, the aggregate amount of
      --------------
outstanding Loans and LC Obligations at such time.

     "Federal Funds Rate" means, for any day, the rate per annum (rounded
      ------------------
upwards, if necessary, to the nearest 1/1000th of one percent) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for

                                      14
<PAGE>

such day shall be the average rate quoted to Administrative Agent on such day on
such transactions as determined by Administrative Agent.

     "First Purchase Crude Payables" means the unpaid amount of any payable
      -----------------------------
obligation related to the purchase of Petroleum Products by Borrower which
Administrative Agent determines will be secured by a statutory Lien, including
but not limited to the statutory Liens, if any, created under the laws of Texas,
New Mexico, Wyoming, Kansas, Oklahoma or any other state or under the Laws of
Canada or any province thereof to the extent such payable obligation is not at
the time in question covered by a Letter of Credit.

     "Fiscal Quarter" means a three-month period ending on March 31, June 30,
      --------------
September 30 or December 31 of any year.

     "Fiscal Year" means a twelve-month period ending on December 31 of any
      -----------
year.

     "Floating Price Contract" has the meaning given that term in Section 7.15.
      -----------------------

     "GAAP" means those generally accepted accounting principles and practices
      ----
which are recognized as such by the Financial Accounting Standards Board (or any
generally recognized successor) and which, in the case of Plains MLP and its
Consolidated Subsidiaries, are applied for all periods after the date hereof in
a manner consistent with the manner in which such principles and practices were
applied to the Initial Financial Statements.  If any change in any accounting
principle or practice is required by the Financial Accounting Standards Board
(or any such successor) in order for such principle or practice to continue as a
generally accepted accounting principle or practice, all reports and financial
statements required hereunder with respect to Plains MLP or with respect to
Plains MLP and its Consolidated Subsidiaries may be prepared in accordance with
such change, but all calculations and determinations to be made hereunder may be
made in accordance with such change only after notice of such change is given to
each Lender, and Majority Lenders agree to such change insofar as it affects the
accounting of Plains MLP or of Plains MLP and its Consolidated Subsidiaries.

     "General Partner" means Plains All American Inc., a Delaware corporation.
      ---------------

     "Guarantors" means Plains MLP and all of its Subsidiaries (including All
      ----------
American but excluding Borrower) and any other Person who has guaranteed some or
all of the Obligations and who has been accepted by Administrative Agent as a
Guarantor or any Subsidiary of Plains MLP which now or hereafter executes and
delivers a guaranty to Administrative Agent pursuant to Section 6.17.

     "Hazardous Materials" means any substances regulated under any
      -------------------
Environmental Law, whether as pollutants, contaminants, or chemicals, or as
industrial, toxic or hazardous substances or wastes, or otherwise.

     "Hedged Eligible Inventory" means (a) Eligible Inventory or (b) Petroleum
      -------------------------
Products inventory scheduled to be purchased in the following month, which in
either case has been

                                      15
<PAGE>

(i) hedged for delivery within the next 190 days (or as to liquefied petroleum
gases, within the next 365 days) by either

          (x) a contract on the NYMEX arranged through brokers approved by
     Administrative Agent and with whom a three-party agreement among Borrower,
     Administrative Agent and such broker has been entered in form and substance
     satisfactory to Administrative Agent or

          (y) a contract for physical delivery of such inventory to a
     counterparty whose Account would qualify as an Approved Eligible Receivable
     or

(ii) otherwise hedged in a manner satisfactory to Majority Lenders.  The value
of Hedged Eligible Inventory shall be the volume of the inventory times the
prices fixed in such hedge, minus all storage, transportation and other
applicable costs.

     "Hedging Contract" means (a) any agreement providing for options, swaps,
      ----------------
floors, caps, collars, forward sales or forward purchases involving interest
rates, commodities or commodity prices, equities, currencies, bonds, or indexes
based on any of the foregoing, (b) any option, futures or forward contract
traded on an exchange, and (c) any other derivative agreement or other similar
agreement or arrangement, excluding in each case for purposes of Section 7.3
only, any such agreement or contract covering Petroleum Products.

     "Highest Lawful Rate" means, with respect to each Lender Party to whom
      -------------------
Obligations are owed, the maximum nonusurious rate of interest that such Lender
Party is permitted under applicable Law to contract for, take, charge, or
receive with respect to such Obligations.  All determinations herein of the
Highest Lawful Rate, or of any interest rate determined by reference to the
Highest Lawful Rate, shall be made separately for each Lender Party as
appropriate to assure that the Loan Documents are not construed to obligate any
Person to pay interest to any Lender Party at a rate in excess of the Highest
Lawful Rate applicable to such Lender Party.

     "Incentive and Option Plans" means the Plains All American Inc. 1998 Long-
      --------------------------
Term Incentive Plan as in effect on the date hereof, the Plains All American
Inc. Management Incentive Plan as in effect on the date hereof and those certain
Transaction Grant Agreements disclosed in writing to Administrative Agent prior
to the date of this Agreement.

     "Income Tax Act (Canada)" means the Income Tax Act, R.S.C. 1985 c. 1 (fifth
      -----------------------
supplement), including the regulations made and, from time to time, in force
under that Act.

     "Indebtedness" of any Person means its Liabilities (without duplication) in
      ------------
any of the following categories:

     (a)  Liabilities for borrowed money,

     (b)  Liabilities constituting an obligation to pay the deferred purchase
price of property or services,

                                      16
<PAGE>

     (c)  Liabilities evidenced by a bond, debenture, note or similar
instrument,

     (d)  Liabilities (other than reserves for taxes and reserves for contingent
obligations) which (i) would under GAAP be shown on such Person's balance sheet
as a liability and (ii are payable more than one year from the date of creation
or incurrence thereof,

     (e)  Liabilities arising under Hedging Contracts (on a net basis to the
extent netting is provided for in the applicable Hedging Contract),

     (f)  Liabilities constituting principal under Capital Leases,

     (g)  Liabilities arising under conditional sales or other title retention
agreements,

     (h)  Liabilities owing under direct or indirect guaranties of Liabilities
of any other Person or otherwise constituting obligations to purchase or acquire
or to otherwise protect or insure a creditor against loss in respect of
Liabilities of any other Person (such as obligations under working capital
maintenance agreements, agreements to keep-well, or agreements to purchase
Liabilities, assets, goods, securities or services), but excluding endorsements
in the ordinary course of business of negotiable instruments in the course of
collection,

     (i)  Liabilities consisting of an obligation to purchase or redeem
securities or other property, if such Liabilities arises out of or in connection
with the sale or issuance of the same or similar securities or property (for
example, repurchase agreements, mandatorily redeemable preferred stock and
sale/leaseback agreements),

     (j)  Liabilities with respect to letters of credit or applications or
reimbursement agreements therefor,

     (k)  Liabilities with respect to banker's acceptances, or

     (l)  Liabilities with respect to obligations to deliver goods or services
in consideration of advance payments therefor;

provided, however, that the "Indebtedness" of any Person shall not include
Liabilities that were incurred in the ordinary course of business by such Person
on ordinary trade terms to vendors, suppliers or other Persons providing goods
and services for use by such Person in the ordinary course of its business,
unless and until such Liabilities are outstanding more than 120 days after the
date the respective goods are delivered or the respective services are rendered,
other than Liabilities contested in good faith by appropriate proceedings, if
required, and for which adequate reserves are maintained on the books of such
Person in accordance with GAAP.

     "Initial Financial Statements" means (i) the audited Consolidated financial
      ----------------------------
statements of Plains MLP as of December 31, 2000, (ii) the unaudited
consolidating balance sheet and income statement of Plains MLP as of December
31, 2000, (iii) the unaudited Consolidated and consolidating balance sheet and
income statement of Plains MLP as of February 28, 2001, and

                                      17
<PAGE>

(iv) the unaudited pro forma Consolidated and consolidating balance sheet of
Plains MLP as of February 28, 2001, after giving effect to the Murphy
Acquisition and the CanPet Acquisition.

     "Insurance Schedule" means Schedule 4 attached hereto.
      ------------------

     "Intercreditor Agreement" means that certain Intercreditor Agreement of
      -----------------------
even date herewith among Administrative Agent, the Lenders and the other Lender
Parties, and the "Administrative Agent", the "Lenders" and the other "Lender
Parties" under the Revolver Agreement substantially in the form of Exhibit K
hereto.

     "Interest Act (Canada)" means the Interest Act, R.S.C. 1985, c. I-15,
      ---------------------
including the regulations made and, from time to time, in force under that Act.

     "Interest Expense" means, with respect to any period, the sum (without
      ----------------
duplication) of the following (in each case, eliminating all offsetting debits
and credits between Plains MLP and its Subsidiaries and all other items required
to be eliminated in the course of the preparation of Consolidated financial
statements of Plains MLP and its Subsidiaries in accordance with GAAP): (a) all
interest and commitment fees in respect of Indebtedness of Plains MLP or any of
its Subsidiaries (including imputed interest on Capital Lease Obligations) which
are accrued during such period and whether expensed in such period or
capitalized; plus (b) all fees, expenses and charges in respect of letters of
credit issued for the account of Plains MLP or any of its Subsidiaries, which
are accrued during such period and whether expensed in such period or
capitalized. The determination of Interest Expense for the Fiscal Quarter ended
March 31, 2000 shall exclude (i) interest and fees under the Paribas Linefill
Financing (as defined in the Existing Agreement), and (ii) interest paid under
the All American Agreement (as defined in the Revolver Agreement) with respect
to a principal amount equal to the net proceeds applied from the assets sold
pursuant to the El Paso Longline Sale Agreement (as defined in the Existing
Agreement).

     "Interest Payment Date" means (a) with respect to each Base Rate Loan, the
      ---------------------
last day of each March, June, September and December beginning June 30, 2001,
and (b) with respect to each LIBOR Loan, the last day of the Interest Period
that is applicable thereto.

     "Interest Period" means, with respect to each particular LIBOR Loan in a
      ---------------
Borrowing, the period specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and including
the date specified in such Borrowing Notice or Continuation/Conversion Notice
(which must be a Business Day), and ending one, two or three months thereafter,
as Borrower may elect in such notice; provided that:  (a) any Interest Period
which would otherwise end on a day which is not a Business Day shall be extended
to the next succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Business Day; (b) any Interest Period which begins on the last
Business Day in a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day in a calendar month; and (c) notwithstanding
the foregoing, no Interest Period may be selected that would end after the last
day of the Commitment Period.

                                      18
<PAGE>

     "Investment" means any investment made, directly or indirectly in any
      ----------
Person, whether by acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan, advance, capital contribution or otherwise
and whether made in cash, by the transfer of property or by any other means.

     "Judgment Interest Act (Alberta)" means the Judgment Interest Act, S.A.
      -------------------------------
1984 c. J-O.5, including the regulations made and, from time to time, in force
under that Act.

     "Law" means any statute, law, regulation, ordinance, rule, treaty,
      ---
judgment, order, decree, permit, concession, franchise, license, agreement or
other governmental restriction of the United States or Canada or any state,
province or political subdivision thereof or of any foreign country or any
department, state, province or other political subdivision thereof.

     "LC Application" means any application for a Letter of Credit hereafter
      --------------
made by Borrower or Plains Marketing Canada, L.P. to LC Issuer.

     "LC Collateral" has the meaning given to such term in Section 2.11(a).
      -------------

     "LC Issuer" means Fleet National Bank, in its capacity as the issuer of
      ---------
Letters of Credit hereunder, and its successors in such capacity.
Administrative Agent may, with the consent of Borrower and the Lender in
question, appoint any Lender hereunder as an LC Issuer in place of or in
addition to Fleet National Bank.

     "LC Obligations" means, at the time in question, the sum of all Matured LC
      --------------
Obligations plus the maximum amounts which LC Issuer might then or thereafter be
called upon to advance under all Letters of Credit then outstanding.

     "Lender Parties" means Administrative Agent, LC Issuer, and all Lenders.
      --------------

     "Lender Schedule" means Schedule 1 hereto.
      ---------------

     "Lenders" means each signatory hereto (other than Borrower and any
      -------
Restricted Person that is a party hereto), including Fleet National Bank, in its
capacity as a Lender hereunder rather than as Administrative Agent and LC
Issuer, and the successors and each permitted assign of each such party as
holder of a Note.

     "Letter of Credit" means any letter of credit issued by LC Issuer hereunder
      ----------------
or under the Existing Agreement (i) at the application of Borrower, which shall
be issued in Dollars, or (ii) with respect to Canadian Letters of Credit, at the
application of either Borrower or Plains Marketing Canada, L.P., which may be
issued in either Dollars or Canadian Dollars.

     "Letter of Credit Fee Rate" means, on any day (i) from the date hereof
      -------------------------
through but not including the six-month anniversary of the date hereof, the
greater of (A) 1.625% per annum and (B) the rate per annum set forth below based
on the Applicable Leverage Level on such date, and

                                      19
<PAGE>

(ii) on and after the six-month anniversary of the date hereof, the rate per
annum set forth below based on the Applicable Leverage Level on such date.

<TABLE>
<CAPTION>
          ==============================================
              Applicable Leverage Level      LC Fee Rate
          ----------------------------------------------
          <S>                                <C>
          Level I, Level II, Level III or       1.750%
                     Level IV
          ----------------------------------------------
                      Level V                   1.625%
          ----------------------------------------------
                     Level VI                   1.500%
          ----------------------------------------------
                     Level VII                  1.250%
          ----------------------------------------------
                    Level VIII                  1.000%
          ==============================================
</TABLE>

Changes in the applicable Letter of Credit Fee Rate will occur automatically
without prior notice as changes in the Applicable Leverage Level occur.
Administrative Agent will give notice promptly to Borrower and Lenders of
changes in the Letter of Credit Fee Rate.

     "Liabilities" means, as to any Person, all indebtedness, liabilities and
      -----------
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.

     "LIBOR Lending Office" means, with respect to any Lender, the office of
      --------------------
such Lender specified as its "LIBOR Lending Office" on the Lender Schedule
hereto (or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time specify to
Borrower and Administrative Agent.

     "LIBOR Loan" means a Loan that bears interest at a rate based upon the
      ----------
LIBOR Rate.

     "LIBOR Rate" means, as applicable to any LIBOR Loan within a Borrowing and
      ----------
with respect to the related Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/32 of 1%) as determined on the
basis of offered rates for deposits in U.S. dollars, for a period of time
comparable to such Interest Period which appears on Telerate Page 3750 (or any
successor page) as of 11:00 a.m. London time on the day that is two Business
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 Rate shall be the rate (rounded upwards
as described above, if necessary) for deposits in dollars for a period
substantially equal to such 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 date that is two
Business Days prior to the beginning of such Interest Period; provided, however,
if more than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates (rounded upwards, if
necessary, to the nearest 1/1000 of 1%).  If both the Telerate and Reuters
system are unavailable, then the LIBOR Rate for that date will be determined on
the basis of the offered rates for

                                      20
<PAGE>

deposits in U.S. dollars for a period of time comparable to such Interest Period
which are offered by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the day that is two (2) Business Days
preceding the first day of such LIBOR Loan as selected by Administrative Agent.
The principal London office of each of the four major London banks will be
requested to provide a quotation of its U.S. dollar deposit offered rate. If at
least two 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 Interest Period offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the day that is two Business
Days preceding the first day of such LIBOR Loan. In the event that
Administrative Agent is unable to obtain any such quotation as provided above,
it will be deemed that the LIBOR Rate pursuant to such 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 any
Lender, then for any period during which such Reserve Percentage shall apply,
the LIBOR Rate shall be equal to the amount determined above divided by an
amount equal to 1 minus the Reserve Percentage. "Reserve Percentage" means the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal, special, emergency and other reserves) which is imposed on member
banks of the Federal Reserve System against "Euro-currency Liabilities" as
defined in Regulation D. Without limiting the effect of the foregoing, the
Reserve Percentage shall reflect any other reserves required to be maintained by
such member banks with respect to (a) any category of liabilities which includes
deposits by reference to which the LIBOR Rate is to be determined, or (b) any
category of extensions of credit or other assets which include LIBOR Loans. The
LIBOR Rate for any LIBOR Loan shall change whenever the Reserve Percentage
changes.

     "LIBOR Rate Margin" means (i) from the date hereof through but not
      -----------------
including the six-month anniversary of the date hereof, the greater of (A)
1.625% per annum and (B) the percent per annum set forth below based on the
Applicable Leverage Level in effect on such date, and (ii) on and after the six-
month anniversary of the date hereof, the percent per annum set forth below
based on the Applicable Leverage Level in effect on such date.

<TABLE>
<CAPTION>
          =====================================================
           Applicable Leverage Level         LIBOR Rate Margin
          -----------------------------------------------------
          <S>                                <C>
          Level I, Level II, Level III or           1.750%
                     Level IV
          -----------------------------------------------------
                      Level V                       1.625%
          -----------------------------------------------------
                     Level VI                       1.500%
          -----------------------------------------------------
                     Level VII                      1.250%
          -----------------------------------------------------
                    Level VIII                      1.000%
          =====================================================
</TABLE>

                                      21
<PAGE>

Changes in the applicable LIBOR Rate Margin will occur automatically without
prior notice as changes in the Applicable Leverage Level occur.  Administrative
Agent will give notice promptly to Borrower and Lenders of changes in the LIBOR
Rate Margin.

     "Lien" means, with respect to any property or assets, any right or interest
      ----
therein of a creditor to secure Liabilities owed to it or any other arrangement
with such creditor which provides for the payment of such Liabilities out of
such property or assets or which allows such creditor to have such Liabilities
satisfied out of such property or assets prior to the general creditors of any
owner thereof, including any lien, mortgage, security interest, pledge, deposit,
production payment, rights of a vendor under any title retention or conditional
sale agreement or lease substantially equivalent thereto, tax lien, mechanic's
or materialman's lien, or any other charge or encumbrance for security purposes,
whether arising by Law or agreement or otherwise, but excluding any right of
offset which arises without agreement in the ordinary course of business.
"Lien" also means any filed financing statement, any registration of a pledge
(such as with an issuer of uncertificated securities), or any other arrangement
or action which would serve to perfect a Lien described in the preceding
sentence, regardless of whether such financing statement is filed, such
registration is made, or such arrangement or action is undertaken before or
after such Lien exists.

     "Loans" has the meaning given to such term in Section 2.1.
      -----

     "Loan Documents" means this Agreement, the Notes, the Security Documents,
      --------------
the Letters of Credit, the LC Applications, and all other agreements,
certificates, documents, instruments and writings at any time delivered in
connection herewith or therewith (exclusive of term sheets and commitment
letters).

     "Majority Lenders" means Lenders whose aggregate Percentage Shares equal or
      ----------------
exceed sixty-six and two-thirds percent (66 2/3%).

     "Market Price" means on each day a spot price for the inventory of
      ------------
Petroleum Products being valued, determined by published prices and methodology
approved by Administrative Agent from time to time, based on an index gravity
and grade of Petroleum Products at a delivery point reflecting as nearly as
practical the actual gravity, grade, and location of the Petroleum Products
being valued, adjusted to reflect any differences in gravity and grade between
the index Petroleum Products and the actual inventory and to reflect
transportation costs or other appropriate location price differential from the
actual location to the index location.

     "Material Adverse Change" means a material and adverse change, from the
      -----------------------
state of affairs presented in the Initial Financial Statements or as represented
or warranted in any Loan Document, to (a) Plains MLP's Consolidated financial
condition, (b) Plains MLP's Consolidated operations, properties or prospects,
considered as a whole, (c) Borrower's ability to timely pay the Obligations, or
(d) the enforceability of the material terms of any Loan Document.

     "Material Market Open Position Loss" means a cumulative amount of net
      ----------------------------------
losses resulting from Open Positions (other than Open Positions permitted under
Section 7.15) of all Restricted

                                      22
<PAGE>

Persons on a mark to market basis during any period of 12 consecutive months in
excess of the Dollar Equivalent of $5,000,000, calculated without inclusion of
that portion of the loss arising from unauthorized trading activity by Borrower
during the period of January 1, 1999 to November 20, 1999 incurred during such
12-month period.

     "Matured LC Obligations" means all amounts paid by LC Issuer on drafts or
      ----------------------
demands for payment drawn or made under or purported to be under any Letter of
Credit and all other amounts due and owing to LC Issuer under any LC Application
for any Letter of Credit, to the extent the same have not been repaid to LC
Issuer (with the proceeds of Loans or otherwise).

     "Maximum Drawing Amount" means at the time in question the sum of the
      ----------------------
maximum amounts which LC Issuer might then or thereafter be called upon to
advance under all Letters of Credit then outstanding.

     "Maximum Facility Amount" means the amount of $200,000,000, as such amount
      -----------------------
may be reduced by Borrower from time to time as provided in Section 2.12.

     "Maximum Loan Amount" means $100,000,000.
      -------------------

     "Moody's" means Moody's Investor Service, Inc., or its successor.
      -------

     "Murphy Acquisition" means the acquisition by Plains Marketing Canada, L.P.
      ------------------
of certain assets from Murphy Oil Company Ltd. as previously disclosed by
Borrower to Administrative Agent and Lenders pursuant to the Murphy Acquisition
Documents.

     "Murphy Acquisition Closing Date" means the date on which the Murphy
      -------------------------------
Acquisition shall have been consummated and Plains Marketing Canada, L.P. shall
have taken good and defensible title to the assets subject thereof.

     "Murphy Acquisition Documents" means the purchase and sale agreement, title
      ----------------------------
transfer documents and all other agreements or instruments executed and
delivered by Plains Marketing Canada, L.P. or any Affiliate in connection
therewith to consummate the Murphy Acquisition.

     "Note" has the meaning given to such term in Section 2.1.
      ----

     "NYMEX" means the New York Mercantile Exchange.
      -----

     "Obligations" means all Liabilities from time to time owing by any
      -----------
Restricted Person to any Lender Party under or pursuant to any of the Loan
Documents, including all LC Obligations. "Obligation" means any part of the
                                          ----------
Obligations.

     "Offsetting Position" means any offsetting sale or purchase agreement, an
      -------------------
offsetting NYMEX contract, an offsetting physical inventory position (excluding
tank bottoms and pipeline linefill inventory classified as a long term asset and
working inventory not held for resale), or an

                                      23
<PAGE>

offsetting swap, collar or option contract, in each case eliminating price risk
and substantially all basis risk.

     "Omnibus Agreement" means that certain Omnibus Agreement between Resources,
      -----------------
Plains MLP, Borrower, All American and General Partner dated November 23, 1998.

     "Open Position" means, with respect to Petroleum Products inventory or
      -------------
Petroleum Products purchase or sale contracts, any position that does not have
an Offsetting Position.

     "Other Eligible Inventory Value" means the following amount of Eligible
      ------------------------------
Inventory, other than Hedged Eligible Inventory: (a) if the WTI Price is less
than or equal to $30 per barrel, 80% of the product of the volume of such crude
oil times the Market Price, or (b) if the WTI Price is greater than $30 per
barrel the greater of (i) 70% of the product of the volume of such crude oil
times the Market Price or (ii) 80% of the product of the volume of such crude
oil times $30 per barrel; minus, in each case, all storage, transportation and
other applicable costs.  As used herein "WTI Price" means on each day the
                                         ---------
Platt's Average Spot Price for West Texas intermediate crude oil (Cushing,
Oklahoma).

     "Other Eligible Receivable" means any Eligible Receivable which is not an
      -------------------------
Approved Eligible Receivable nor an Eligible Exchange Balance.  The portions of
the aggregate of the Other Eligible Receivables owed by any obligor and its
Affiliates exceeding five percent (5%) of the sum of (i) Approved Eligible
Receivables plus (ii) Other Eligible Receivables, shall not be included without
the prior written approval of the Majority Lenders.

     "Other Priority Claims" means any account payable, obligation or liability
      ---------------------
which Administrative Agent has determined has or will have a Lien upon or claim
against any Cash Equivalent, account or inventory of Borrower or Plains
Marketing Canada, L.P. senior or equal in priority to the security interests in
favor of Administrative Agent for the benefit of Lenders, in each case to the
extent such Cash Equivalent, account or inventory of Borrower or Plains
Marketing Canada, L.P. is otherwise included in the determination of the
Borrowing Base and the included portion thereof has not already been reduced by
such Lien or claim.

     "Paid but Unexpired Letters of Credit" means, on any day, the maximum
      ------------------------------------
drawing amount of Letters of Credit on such day where no underlying obligation
exists on such day, or if the amount of the Letter of Credit exceeds the
underlying obligation on such day, the amount of such excess.  As used herein,
"underlying obligation" includes without limitation, all existing and future
obligations to the beneficiary of such Letter of Credit in respect of Petroleum
Products purchased or received on or prior to such day or in respect of
Petroleum Products Borrower or Plains Marketing Canada, L.P. is then obligated
to purchase or receive or has then nominated to purchase or receive.

     "Partnership Agreement" means the Second Amended and Restated Agreement of
      ---------------------
Limited Partnership of Plains MLP dated November 23, 1998.

                                      24
<PAGE>

     "Percentage Share" means, with respect to any Lender (a) when used in
      ----------------
Sections 2.1, 2.2 or 2.12, in any Borrowing Notice or when no Loans are
outstanding hereunder, the percentage set forth opposite such Lender's name on
the Lender Schedule hereto, and (b) when used otherwise, the percentage obtained
by dividing (i) the sum of the unpaid principal balance of such Lender's Loans
at the time in question plus the Matured LC Obligations which such Lender has
funded pursuant to Section 2.9(c) plus the portion of the Maximum Drawing Amount
which such Lender might be obligated to fund under Section 2.9(c), by (ii) the
sum of the aggregate unpaid principal balance of all Loans at such time plus the
aggregate amount of LC Obligations outstanding at such time.

     "Permitted Acquisitions" means (A) the acquisition of all of the capital
      ----------------------
stock or other equity interest in a Person (exclusive of general partner
interests held by General Partner or another Wholly Owned Subsidiary of
Resources not in excess of a 1% economic interest) and exclusive of director
qualifying shares and other equity interests required to be held by an Affiliate
to comply with a requirement of Law), (B) the CanPet Acquisition and the Murphy
Acquisition, or (C) any other acquisition of all or a portion of the business,
assets or operations of a Person (whether in a single transaction or a series of
related transactions), provided that (i) prior to and after giving effect to
such acquisition no Default or Event of Default shall have occurred and be
continuing; (ii) all representations and warranties shall be true and correct as
if restated immediately following the consummation of such acquisition; and
(iii) substantially all of such business, assets and operations so acquired, or
of the Person so acquired, consists of Petroleum Products and/or gas marketing,
gathering, transportation, storage, terminaling and pipeline operation.

     "Permitted Inventory Liens" means any Lien, and the amount of any Liability
      -------------------------
secured thereby, on Petroleum Products inventory which would be a Permitted Lien
under Section 7.2(ii)(b) (so long as such Lien is inchoate) or Section
7.2(ii)(d).

     "Permitted Investments" means:
      ---------------------

     (a) Cash Equivalents,

     (b) Investments described in the Disclosure Schedule,

     (c) Investments by any Canadian Subsidiary in Borrower or any other
Restricted Person that is a Guarantor,

     (d) Investments by Plains MLP or any of its Subsidiaries (other than any
Canadian Subsidiaries) in:

          (I)  Borrower or any Wholly Owned Subsidiary of Plains MLP which is a
     Guarantor, other than any Canadian Subsidiary or

          (II) any Canadian Subsidiary with respect to the consummation of the
     Murphy Acquisition and the CanPet Acquisition,, provided that (A) the
                                                     --------
     aggregate amount of such

                                      25
<PAGE>

     Investments in Canadian Subsidiaries shall not exceed (y) $57,000,000 with
     respect to the Murphy Acquisition, the proceeds of which shall be used to
     consummate the Murphy Acquisition, to fund Canadian Cash and Carry
     Purchases and for working capital purposes with respect to the Murphy
     Acquisition and (z) $84,000,000 (including any Investment described in
     clause (y) above), such Investment in excess of the Investment described in
     clause (y) above with respect to the CanPet Acquisition, the proceeds of
     which shall be used to consummate the CanPet Acquisition, to fund Canadian
     Cash and Carry Purchases and for working capital purposes with respect to
     the CanPet Acquisition,

          (III) any Canadian Subsidiary pursuant to guaranties of trade payables
     of any Canadian Subsidiary incurred and paid in the ordinary course of
     business on ordinary trade terms,

          (IV) Borrower or Plains Marketing Canada, L.P. consisting solely of
     units issued by Plains MLP to be used by Borrower or Plains Marketing
     Canada, L.P. to satisfy contingent payment obligations of such Persons as
     contemplated by the CanPet Acquisition Documents;

          (V) any Canadian Subsidiary consisting solely of one or more loans,
     provided (A) the Canadian Revolver Facility Usage shall equal the Canadian
     Revolver Commitment (as such terms are defined in the Revolver Agreement),
     (B) the aggregate outstanding amount of all such loans shall not at any
     time exceed the Dollar Equivalent of $10,000,000, (C) the proceeds of each
     such loan shall be used solely as short-term working capital for
     specifically identified purposes, and (D) each such loan shall be repaid
     within 90 days after the making thereof from funds other than proceeds of
     loans made pursuant to this clause (V); and

          (VI) any Canadian Subsidiary not covered by the preceding clauses
     (II), (III), (IV) or (V), provided the aggregate outstanding amount of such
     other Investments in Canadian Subsidiaries shall not at any time exceed the
     Dollar Equivalent of $5,000,000,

     (e) Investments in publicly traded units of master limited partnerships
whose dividends are "qualifying income" as such term is defined in Section 7704
of the Code (provided, the amount of any such Investments under this clause (e)
             --------
minus any amounts received on such Investments (excluding dividends thereon)
-----
shall not at any time exceed the Dollar Equivalent of $5,000,000), and

     (f) Permitted Acquisitions.

     "Permitted Lien" has the meaning given to such term in Section 7.2.
      --------------

     "Person" means an individual, corporation, partnership, limited liability
      ------
company, association, joint stock company, trust or trustee thereof, estate or
executor thereof, unincorporated organization or joint venture, Tribunal, or any
other legally recognizable entity.

                                      26
<PAGE>

     "Petroleum Products" means crude oil, condensate, natural gas liquids
      ------------------
(NGL's), liquefied petroleum gases (LPG's) or any blend thereof.

     "Plains MLP" means Plains All American Pipeline, L.P., a Delaware limited
      ----------
partnership.

     "Plains Terminal" means any storage terminal, tankage or facility owned by
      ---------------
any Restricted Person.

     "Rating Agency" means either S&P or Moody's.
      -------------

     "Regulation D" means Regulation D of the Board of Governors of the Federal
      ------------
Reserve System as from time to time in effect.

     "Resources" means Plains Resources Inc., a Delaware corporation.
      ---------

     "Restricted Person" means any of Plains MLP and each Subsidiary of Plains
      -----------------
MLP, including but not limited to Borrower, All American, and each Subsidiary of
Borrower and/or All American.

     "Revolver Agreement" means that certain Amended and Restated Credit
      ------------------
Agreement [Revolving Credit Facility] of even date herewith among Borrower, All
American and Plains MLP, as guarantors, and the agents and lenders named
therein, providing for a $500,000,000 revolving credit facility for Borrower, a
$100,000,000 term loan to PMC (Nova Scotia) Company and a $30,000,000 revolving
credit facility for Plains Marketing Canada, L.P.

     "Revolver Availability" means for any day, the unutilized portion available
      ---------------------
on such day of the "Total Revolver Commitment" (as defined in Section 7.11 of
the Revolver Agreement) for revolving credit loans to Borrower pursuant to the
Revolver Agreement.

     "S&P" means Standard & Poor's Ratings Group (a division of McGraw Hill,
      ---
Inc.) or its successor.

     "Security Documents" means the instruments listed in the Security Schedule
      ------------------
and all other security agreements, deeds of trust, mortgages, chattel mortgages,
pledges, guaranties, financing statements, continuation statements, extension
agreements and other agreements or instruments now, heretofore, or hereafter
delivered by any Restricted Person to Administrative Agent in connection with
this Agreement or any transaction contemplated hereby to secure or guarantee the
payment of any part of the Obligations or the performance of any Restricted
Person's other duties and obligations under the Loan Documents.

     "Security Schedule" means Schedule 3 hereto.
      -----------------

     "Subsidiary" means, with respect to any Person, any corporation,
      ----------
association, partnership, limited liability company, joint venture, or other
business or corporate entity, enterprise or

                                      27
<PAGE>

organization which is directly or indirectly (through one or more
intermediaries) controlled or owned more than fifty percent by such Person.

     "Termination Event" means (a) the occurrence with respect to any ERISA Plan
      -----------------
of (i) a reportable event described in Sections 4043(c)(5) or (6) of ERISA or
(ii) any other reportable event described in Section 4043(c) of ERISA other than
a reportable event not subject to the provision for 30-day notice to the Pension
Benefit Guaranty Corporation pursuant to a waiver by such corporation under
Section 4043(a) of ERISA, or (b) the withdrawal of any ERISA Affiliate from an
ERISA Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of intent
to terminate any ERISA Plan or the treatment of any ERISA Plan amendment as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate any ERISA Plan by the Pension Benefit Guaranty Corporation under
Section 4042 of ERISA, or (e) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any ERISA Plan.

     "Tribunal" means any government, any arbitration panel, any court or any
      --------
governmental department, commission, board, bureau, agency or instrumentality of
the United States of America, the Dominion of Canada, any state, province,
commonwealth, nation, territory, possession, county, parish, town, township,
village or municipality, whether now or hereafter constituted or existing.

     "Type" means, with respect to any Loans, the characterization of such Loans
      ----
as either Base Rate Loans or LIBOR Loans.

     "UCC" means the Uniform Commercial Code as in effect in the State of New
      ---
York.

     "Wholly Owned Subsidiary" means any Subsidiary of a Person, all of the
      -----------------------
issued and outstanding stock, limited liability company membership interests, or
partnership interests of which (including all rights or options to acquire such
stock or interests) are directly or indirectly (through one or more
Subsidiaries) owned by such Person, excluding any general partner interests
owned, directly or indirectly, by General Partner in any such Subsidiary that is
a partnership, in each case such general partner interests not to exceed two
percent (2%) of the aggregate ownership interests of any such partnership and
directors' qualifying shares if applicable.

      Section 1.2.  Exhibits and Schedules; Additional Definitions.  All
                    ----------------------------------------------
Exhibits and Schedules attached to this Agreement are a part hereof for all
purposes.  Reference is hereby made to the Security Schedule for the meaning of
certain terms defined therein and used but not defined herein, which definitions
are incorporated herein by reference.

      Section 1.3.  Amendment of Defined Instruments.  Unless the context
                    --------------------------------
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document,

                                      28
<PAGE>

provided that nothing contained in this section shall be construed to authorize
any such renewal, extension, modification, amendment or restatement. All
references to the term "Revolver Agreement" shall be deemed to be references to
such agreement as such agreement is executed and delivered by the parties
thereto on the date hereof.

      Section 1.4.  References and Titles.  All references in this Agreement to
                    ---------------------
Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement," "this instrument," "herein," "hereof," "hereby," "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases "this section"
and "this subsection" and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word "or" is not exclusive,
and the word "including" (in its various forms) means "including without
limitation." Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.

      Section 1.5.  Calculations and Determinations.  All calculations under the
                    -------------------------------
Loan Documents of interest chargeable with respect to LIBOR Loans and of fees
shall be made on the basis of actual days elapsed (including the first day but
excluding the last) and a year of 360 days.  All other calculations of interest
made under the Loan Documents shall be made on the basis of actual days elapsed
(including the first day but excluding the last) and a year of 365 or 366 days,
as appropriate.  Each determination by a Lender Party of amounts to be paid
under Article III or any other matters which are to be determined hereunder by a
Lender Party (such as any LIBOR Rate, Business Day, Interest Period, or Reserve
Percentage) shall, in the absence of manifest error, be conclusive and binding.
Unless otherwise expressly provided herein or unless Majority Lenders otherwise
consent all financial statements and reports furnished to any Lender Party
hereunder shall be prepared and all financial computations and determinations
pursuant hereto shall be made in accordance with GAAP.

                 ARTICLE II - The Loans and Letters of Credit
                              -------------------------------

      Section 2.1.  Commitments to Lend; Notes.  Subject to the terms and
                    --------------------------
conditions hereof, each Lender agrees to make loans to Borrower (herein called
such Lender's "Loans") upon Borrower's request from time to time during the
Commitment Period, provided that (a) subject to Sections 3.3, 3.4 and 3.6, all
Lenders are requested to make Loans of the same Type in accordance with their
respective Percentage Shares and as part of the same Borrowing, (b) after giving
effect to such loans, the aggregate principal amount of outstanding Loans will
not exceed the Maximum Loan Amount, and (c) after giving effect to such Loans,
the Dollar Equivalent of the Facility Usage does not exceed the lesser of (i)
the Maximum Facility Amount and (ii) the Borrowing Base determined as of the
date on which the requested Loans are to be made. The aggregate amount of all
Loans in any Borrowing must be equal to $2,000,000 or any higher integral
multiple of $250,000. Borrower may have no more than five Borrowings of LIBOR

                                      29
<PAGE>

Loans outstanding at any time. The obligation of Borrower to repay to each
Lender the aggregate amount of all Loans made by such Lender, together with
interest accruing in connection therewith, shall be evidenced by a single
promissory note (herein called such Lender's "Note") made by Borrower payable to
the order of such Lender in the form of Exhibit A with appropriate insertions.
The amount of principal owing on any Lender's Note at any given time shall be
the aggregate amount of all Loans theretofore made by such Lender minus all
payments of principal theretofore received by such Lender on such Note. Interest
on each Note shall accrue and be due and payable as provided herein and therein.
Each Note shall be due and payable as provided herein and therein, and shall be
due and payable in full on the last day of the Commitment Period. Subject to the
terms and conditions of this Agreement, Borrower may borrow, repay, and reborrow
hereunder.

      Section 2.2.  Requests for New Loans.  Borrower must give to
                    ----------------------
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of any requested Borrowing of Loans to be funded by Lenders.  Each such
notice constitutes a "Borrowing Notice" hereunder and must:

          (a)  specify (i) the aggregate amount of any such Borrowing of Base
     Rate Loans and the date on which such Base Rate Loans are to be advanced,
     or (ii) the aggregate amount of any such Borrowing of LIBOR Loans, the date
     on which such LIBOR Loans are to be advanced (which shall be the first day
     of the Interest Period which is to apply thereto), and the length of the
     applicable Interest Period; and

          (b)  be received by Administrative Agent not later than 11:00 a.m.,
     Boston, Massachusetts time, on (i) the day on which any such Base Rate
     Loans are to be made, or (ii) the third Business Day preceding the day on
     which any such LIBOR Loans are to be made.

Each such written request or confirmation must be made in the form and substance
of the "Borrowing Notice" attached hereto as Exhibit B, duly completed.  Each
such telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by Borrower as to the matters which are required to
be set out in such written confirmation.  Upon receipt of any such Borrowing
Notice, Administrative Agent shall give each Lender prompt notice of the terms
thereof.  If all conditions precedent to such new Loans have been met, each
Lender will on the date requested promptly remit to Administrative Agent at
Administrative Agent's office in Boston, Massachusetts the amount of such
Lender's Loan in immediately available funds, and upon receipt of such funds,
unless to its actual knowledge any conditions precedent to such Loans have been
neither met nor waived as provided herein, Administrative Agent shall promptly
make such Loans available to Borrower.  Unless Administrative Agent shall have
received prompt notice from a Lender that such Lender will not make available to
Administrative Agent such Lender's new Loan, Administrative Agent may in its
discretion assume that such Lender has made such Loan available to
Administrative Agent in accordance with this section and Administrative Agent
may if it chooses, in reliance upon such assumption, make such Loan available to
Borrower.  If and to the extent such Lender shall not so make its new Loan
available to Administrative Agent, such Lender and Borrower severally agree to
pay or repay to

                                      30
<PAGE>

Administrative Agent within three days after demand the amount of such Loan
together with interest thereon, for each day from the date such amount was made
available to Borrower until the date such amount is paid or repaid to
Administrative Agent, with interest at (i) the Federal Funds Rate, if such
Lender is making such payment and (ii) the interest rate applicable at the time
to the other new Loans made on such date, if Borrower is making such repayment.
If neither such Lender nor Borrower pays or repays to Administrative Agent such
amount within such three-day period, Administrative Agent shall be entitled to
recover from Borrower, on demand, in lieu of the interest provided for in the
preceding sentence, interest thereon at the Default Rate, calculated from the
date such amount was made available to Borrower. The failure of any Lender to
make any new Loan to be made by it hereunder shall not relieve any other Lender
of its obligation hereunder, if any, to make its new Loan, but no Lender shall
be responsible for the failure of any other Lender to make any new Loan to be
made by such other Lender.

      Section 2.3.  Continuations and Conversions of Existing Loans.  Borrower
                    -----------------------------------------------
may make the following elections with respect to Loans already outstanding:  to
Convert, in whole or in part, Base Rate Loans to LIBOR Loans, to Convert, in
whole or in part, LIBOR Loans to Base Rate Loans on the last day of the Interest
Period applicable thereto, and to Continue, in whole or in part, LIBOR Loans
beyond the expiration of such Interest Period by designating a new Interest
Period to take effect at the time of such expiration.  In making such elections,
Borrower may combine existing Loans made pursuant to separate Borrowings into
one new Borrowing or divide existing Loans made pursuant to one Borrowing into
separate new Borrowings, provided that Borrower may have no more than five
Borrowings of LIBOR Loans outstanding at any time.  To make any such election,
Borrower must give to Administrative Agent written notice (or telephonic notice
promptly confirmed in writing) of any such Conversion or Continuation of
existing Loans, with a separate notice given for each new Borrowing.  Each such
notice constitutes a "Continuation/Conversion Notice" hereunder and must:

          (a)  specify the existing Loans which are to be Continued or
     Converted;

          (b)  specify (i) the aggregate amount of any Borrowing of Base Rate
     Loans into which such existing Loans are to be Continued or Converted and
     the date on which such Continuation or Conversion is to occur, or (ii) the
     aggregate amount of any Borrowing of LIBOR Loans into which such existing
     Loans are to be Continued or Converted, the date on which such Continuation
     or Conversion is to occur (which shall be the first day of the Interest
     Period which is to apply to such LIBOR Loans), and the length of the
     applicable Interest Period; and

          (c)  be received by Administrative Agent not later than 11:00 a.m.,
     Boston, Massachusetts time, on (i) the day on which any such Continuation
     or Conversion to Base Rate Loans is to occur, or (ii) the third Business
     Day preceding the day on which any such Continuation or Conversion to LIBOR
     Loans is to occur.

Each such written request or confirmation must be made in the form and substance
of the "Continuation/Conversion Notice" attached hereto as Exhibit C, duly
completed. Each such

                                      31
<PAGE>

telephonic request shall be deemed a representation, warranty, acknowledgment
and agreement by Borrower as to the matters which are required to be set out in
such written confirmation. Upon receipt of any such Continuation/Conversion
Notice, Administrative Agent shall give each Lender prompt notice of the terms
thereof. Each Continuation/Conversion Notice shall be irrevocable and binding on
Borrower. During the continuance of any Default, Borrower may not make any
election to Convert existing Loans into LIBOR Loans or Continue existing Loans
as LIBOR Loans beyond the expiration of their respective and corresponding
Interest Period then in effect. If (due to the existence of a Default or for any
other reason) Borrower fails to timely and properly give any
Continuation/Conversion Notice with respect to a Borrowing of existing LIBOR
Loans at least three days prior to the end of the Interest Period applicable
thereto, such LIBOR Loans, to the extent not prepaid at the end of such Interest
Period, shall automatically be Converted into Base Rate Loans at the end of such
Interest Period. No new funds shall be repaid by Borrower or advanced by any
Lender in connection with any Continuation or Conversion of existing Loans
pursuant to this section, and no such Continuation or Conversion shall be deemed
to be a new advance of funds for any purpose; such Continuations and Conversions
merely constitute a change in the interest rate applicable to already
outstanding Loans.

      Section 2.4.  Use of Proceeds.  Borrower shall use the proceeds of all
                    ---------------
Loans to finance Cash and Carry Purchases, as margin deposits not to exceed
$50,000,000 in the aggregate at any time outstanding with respect to Hedging
Contracts as permitted pursuant to Section 7.2(e) and to refinance Matured LC
Obligations. Borrower and, with respect to Canadian Letters of Credit, Borrower
or Plains Marketing Canada, L.P., as the case may be, shall use all Letters of
Credit solely for the purposes specified in Section 2.7(d). In no event shall
any Loan or any Letter of Credit be used (i) to fund distributions by Plains
MLP, (ii) directly or indirectly by any Person for personal, family, household
or agricultural purposes, (iii) for the purpose, whether immediate, incidental
or ultimate, of purchasing, acquiring or carrying any "margin stock" (as such
term is defined in Regulation U promulgated by the Board of Governors of the
Federal Reserve System) or (iv) to extend credit to others directly or
indirectly for the purpose of purchasing or carrying any such margin stock.
Borrower represents and warrants that Borrower is not engaged principally, or as
one of Borrower's important activities, in the business of extending credit to
others for the purpose of purchasing or carrying such margin stock.

      Section 2.5.  Optional Prepayments of Loans.  Borrower may, upon five
                    -----------------------------
Business Days' notice to Administrative Agent (and Administrative Agent will
promptly give notice to the other Lenders), from time to time and without
premium or penalty prepay the Loans, in whole or in part, so long as the
aggregate amounts of all partial prepayments of principal on the Loans equals
$2,000,000 or any higher integral multiple of $250,000.  Each prepayment of
principal under this section shall be accompanied by all interest then accrued
and unpaid on the principal so prepaid. Any principal or interest prepaid
pursuant to this section shall be in addition to, and not in lieu of, all
payments otherwise required to be paid under the Loan Documents at the time of
such prepayment.

      Section 2.6.  Mandatory Prepayments.  If at any time the Dollar Equivalent
                    ---------------------
of the Facility Usage exceeds the Borrowing Base (whether due to a reduction in
the Borrowing Base in accordance with this Agreement, or otherwise), Borrower
shall immediately upon demand prepay

                                      32
<PAGE>

the principal of the Loans in an amount at least equal to such excess. If at any
time the outstanding principal balance of the Loans exceed the sum of (i) Hedged
Eligible Inventory plus (ii) the outstanding amount of Accounts resulting from
the sale of such Hedged Eligible Inventory (without duplication), Borrower shall
within one Business Day prepay the principal of the Loans in an amount at least
equal to such excess. Each prepayment of principal under this section shall be
accompanied by all interest then accrued and unpaid on the principal so prepaid.
Any principal or interest prepaid pursuant to this section shall be in addition
to, and not in lieu of, all payments otherwise required to be paid under the
Loan Documents at the time of such prepayment.

     Section 2.7.  Letters of Credit.  Subject to the terms and conditions
                    -----------------
hereof, Borrower and, with respect to Canadian Letters of Credit, Borrower or
Plains Marketing Canada, L.P., may during the Commitment Period request LC
Issuer to issue, amend, or extend the expiration date of, one or more Letters of
Credit, provided that:

          (a)  after taking such Letter of Credit into account, the Dollar
     Equivalent of the Facility Usage does not exceed the lesser of (i) the
     Maximum Facility Amount at such time or (ii) the Borrowing Base at such
     time;

          (b)  the expiration date of such Letter of Credit is prior to the
     earlier of (i) (A) 70 days, (B) 180 days, if the beneficiary thereof is
     Exxon Mobil Company, or (C) one year, if the beneficiary thereof is only
     the United States Mineral Management Service or other federal or state
     governmental agency regulating Petroleum Products purchases, after the date
     of issuance of such Letter of Credit, and (ii) 30 days prior to the end of
     the Commitment Period;

          (c)  the issuance of such Letter of Credit will be in compliance with
     all applicable governmental restrictions, policies, and guidelines and will
     not subject LC Issuer to any cost which is not reimbursable under Article
     III;

          (d)  such Letter of Credit is related to the purchase or exchange by
     Borrower or, with respect to any purchase or exchange in Canada, by
     Borrower or by Plains Marketing Canada, L.P., of Petroleum Products and is
     in the Form of Exhibit D hereto or such other form and terms as shall be
     acceptable to LC Issuer in its sole and absolute discretion and Currently
     Approved by Majority Lenders, and, if the beneficiary thereof is the United
     States Mineral Management Service, after taking such Letter of Credit into
     account, the aggregate amount of LC Obligations in respect to all Letters
     of Credit naming the United States Mineral Management Service as
     beneficiary does not exceed $5,000,000;

          (e) if such Letter of Credit is a Canadian Letter of Credit, after
     taking such Canadian Letter of Credit into account, the Dollar Equivalent
     of the aggregate amount of LC Obligations at such time relating to Canadian
     Letters of Credit does not exceed (1) $50,000,000 prior to the Murphy
     Acquisition Closing Date, (2) $80,000,000 during the four-month period
     commencing with the Murphy Acquisition Closing Date, and (3) $50,000,000
     thereafter; and

                                      33
<PAGE>

          (f)  all other conditions in this Agreement to the issuance of such
     Letter of Credit have been satisfied.

LC Issuer will honor any such request if the foregoing conditions (a) through
(f) (in the following Section 2.8 called the "LC Conditions") have been met as
                                              -------------
of the date of issuance, amendment, or extension of such Letter of Credit. The
outstanding letters of credit issued by LC Issuer under the Existing Agreement
shall be deemed to be Letters of Credit issued hereunder; Borrower hereby
represents and warrants that the LC Conditions have been met as of the date
hereof with respect to each such Letter of Credit.  Borrower or Plains Marketing
Canada, L.P., as the case may be, may request that any Canadian Letter of Credit
be issued in Dollars or in Canadian Dollars, and, subject to the terms and
conditions hereof, LC Issuer will honor such request.

      Section 2.8.  Requesting Letters of Credit.  Borrower or Plains Marketing
                    ----------------------------
Canada, L.P., as the case may be, must make written application for any Letter
of Credit at least one Business Day before the date on which Borrower or Plains
Marketing Canada, L.P., as the case may be, desires for LC Issuer to issue such
Letter of Credit.  By making any such written application, unless otherwise
expressly stated therein, Borrower or Plains Marketing Canada, L.P., as the case
may be, shall be deemed to have represented and warranted that the LC Conditions
described in Section 2.7 will be met as of the date of issuance of such Letter
of Credit.  Each such written application for a Letter of Credit must be made in
writing in the form and substance of Exhibit E, the terms and provisions of
which are hereby incorporated herein by reference (or in such other form as may
mutually be agreed upon by LC Issuer and Borrower or Plains Marketing Canada,
L.P., as the case may be).  If all LC Conditions for a Letter of Credit have
been met as described in Section 2.7 on any Business Day before 11:00 a.m,
Boston, Massachusetts time, LC Issuer will issue such Letter of Credit on the
same Business Day at LC Issuer's office in Boston, Massachusetts. If the LC
Conditions are met as described in Section 2.7 on any Business Day on or after
11:00 a.m, Boston, Massachusetts time, LC Issuer will issue such Letter of
Credit on the next succeeding Business Day at LC Issuer's office in Boston,
Massachusetts.  If any provisions of any LC Application conflict with any
provisions of this Agreement, the provisions of this Agreement shall govern and
control.

      Section 2.9.  Reimbursement and Participations.
                    --------------------------------

     (a)  Reimbursement.  Each Matured LC Obligation shall constitute a loan by
          -------------
LC Issuer to Borrower or Plains Marketing Canada, L.P., as the case may be.
Borrower promises to pay to LC Issuer, or to LC Issuer's order, on demand, the
full amount of each Matured LC Obligation (which, in the case of any Letter of
Credit issued in Canadian Dollars, shall as demanded by LC Issuer be payable in
Canadian Dollars or in an amount equal to the equivalent in Dollars of such
amount of Canadian Dollars determined by LC Issuer in accordance with its normal
procedures and after deducting any premium and costs of exchange), including
without limitation all Matured LC Obligations with respect to Canadian Letters
of Credit issued at the request of Plains Marketing Canada, L.P., together with
interest thereon (i) at the Base Rate to and including the second Business Day
after the Matured LC Obligation is incurred and (ii) at the Default Rate on each
day thereafter.  In addition, and notwithstanding the foregoing, Plains
Marketing Canada,
<PAGE>

L.P., pursuant to each LC Application executed by it, shall be obligated to pay
to LC Issuer, or to LC Issuer's order, on demand, the full amount of each
Matured LC Obligation with respect to Canadian Letters of Credit requested by it
(which, in the case of any Letter of Credit issued in Canadian Dollars, shall as
demanded by LC Issuer be payable in Canadian Dollars or in an amount equal to
the equivalent in Dollars of such amount of Canadian Dollars determined by LC
Issuer in accordance with its normal procedures and after deducting any premium
and costs of exchange), together with interest thereon as set forth in the
foregoing sentence (such obligation and Borrower's obligation set forth in the
foregoing sentence with respect to such Canadian Letters of Credit to be joint
and several). Any such reimbursement made by Plains Marketing Canada, L.P.
shall, pursuant to Section 3.7(b) hereof, include all such additional amounts as
are needed to cause the amount received by LC Issuer, after any deduction or
withholding as may be required pursuant to the Income Tax Act (Canada) or other
applicable Canadian Laws, to equal the amount which would have been receivable
in the absence of such deduction or withholding.

     (b)  Letter of Credit Advances.  If the beneficiary of any Letter of Credit
          -------------------------
makes a draft or other demand for payment thereunder then Borrower may, during
the interval between the making thereof and the honoring thereof by LC Issuer,
request Lenders to make Loans to Borrower in the amount of such draft or demand,
which Loans shall be made concurrently with LC Issuer's payment of such draft or
demand and shall be immediately used by LC Issuer to repay the amount of the
resulting Matured LC Obligation.  Such a request by Borrower shall be made in
compliance with all of the provisions hereof, provided that for the purposes of
the first sentence of Section 2.1, the amount of such Loans shall be considered,
but the amount of the Matured LC Obligation to be concurrently paid by such
Loans shall not be considered.

     (c)  Participation by Lenders.  LC Issuer irrevocably agrees to grant and
          ------------------------
hereby grants to each Lender, and -- to induce LC Issuer to issue Letters of
Credit hereunder -- each Lender irrevocably agrees to accept and purchase and
hereby accepts and purchases from LC Issuer, on the terms and conditions
hereinafter stated and for such Lender's own account and risk an undivided
interest equal to such Lender's Percentage Share of LC Issuer's obligations and
rights under each Letter of Credit issued hereunder and the amount of each
Matured LC Obligation paid by LC Issuer thereunder.  Each Lender unconditionally
and irrevocably agrees with LC Issuer that, if a Matured LC Obligation is paid
under any Letter of Credit for which LC Issuer is not reimbursed in full by
Borrower or, with respect to Canadian Letters of Credit requested by Plains
Marketing Canada, L.P., by either Borrower or Plains Marketing Canada, L.P. in
accordance with the terms of this Agreement and the related LC Application
(including any reimbursement by means of concurrent Loans or by the application
of LC Collateral), such Lender shall (in all circumstances and without set-off
or counterclaim) pay to LC Issuer on demand, in immediately available funds at
LC Issuer's address for notices hereunder, such Lender's Percentage Share of
such Matured LC Obligation (or any portion thereof which has not been reimbursed
by Borrower or, with respect to Canadian Letters of Credit requested by Plains
Marketing Canada, L.P., by either Borrower or Plains Marketing Canada, L.P.).
Each Lender's obligation to pay LC Issuer pursuant to the terms of this
subsection is irrevocable and unconditional.  If any amount required to be paid
by any Lender to LC Issuer pursuant to this subsection is paid by such Lender to
LC Issuer within three Business Days after the date such payment is due, LC
Issuer shall in addition to such amount be entitled to recover from such Lender,
on demand, interest thereon calculated

                                      35
<PAGE>

from such due date at the Federal Funds Rate. If any amount required to be paid
by any Lender to LC Issuer pursuant to this subsection is not paid by such
Lender to LC Issuer within three Business Days after the date such payment is
due, LC Issuer shall in addition to such amount be entitled to recover from such
Lender, on demand, interest thereon calculated from such due date at the Base
Rate.

     (d)  Distributions to Participants.  Whenever LC Issuer has in accordance
          -----------------------------
with this section received from any Lender payment of such Lender's Percentage
Share of any Matured LC Obligation, if LC Issuer thereafter receives any payment
of such Matured LC Obligation or any payment of interest thereon (whether
directly from Borrower or, with respect to Canadian Letters of Credit requested
by Plains Marketing Canada, L.P., by either Borrower or Plains Marketing Canada,
L.P. or by application of LC Collateral or otherwise, and excluding only
interest for any period prior to LC Issuer's demand that such Lender make such
payment of its Percentage Share), LC Issuer will distribute to such Lender its
Percentage Share of the amounts so received by LC Issuer; provided, however,
                                                          --------  -------
that if any such payment received by LC Issuer must thereafter be returned by LC
Issuer, such Lender shall return to LC Issuer the portion thereof which LC
Issuer has previously distributed to it.

     (e)  Calculations.  A written advice setting forth in reasonable detail the
          ------------
amounts owing under this section, submitted by LC Issuer to Borrower or any
Lender from time to time, shall be conclusive, absent manifest error, as to the
amounts thereof.

     Section 2.10.  No Duty to Inquire.
                    ------------------

     (a)  Drafts and Demands.  LC Issuer is authorized and instructed to accept
          ------------------
and pay drafts and demands for payment under any Letter of Credit without
requiring, and without responsibility for, any determination as to the existence
of any event giving rise to said draft, either at the time of acceptance or
payment or thereafter.  LC Issuer is under no duty to determine the proper
identity of anyone presenting such a draft or making such a demand (whether by
tested telex or otherwise) as the officer, representative or agent of any
beneficiary under any Letter of Credit, and payment by LC Issuer to any such
beneficiary when requested by any such purported officer, representative or
agent is hereby authorized and approved.  Borrower releases each Lender Party
from, and agrees to hold each Lender Party harmless and indemnified against, any
liability or claim in connection with or arising out of the subject matter of
this section, WHICH INDEMNITY SHALL APPLY WHETHER OR NOT ANY SUCH LIABILITY OR
CLAIM IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY LENDER PARTY, provided only that no
Lender Party shall be entitled to indemnification for that portion, if any, of
any liability or claim which is proximately caused by its own individual gross
negligence or willful misconduct, as determined in a final judgment.

     (b)  Extension of Maturity.  If the maturity of any Letter of Credit is
          ---------------------
extended by its terms or by Law or governmental action, if any extension of the
maturity or time for presentation of drafts or any other modification of the
terms of any Letter of Credit is made at the request of Borrower, or if the
amount of any Letter of Credit is increased at the request of Borrower, this

                                      36
<PAGE>

Agreement shall be binding upon all Restricted Persons with respect to such
Letter of Credit as so extended, increased or otherwise modified, with respect
to drafts and property covered thereby, and with respect to any action taken by
LC Issuer, LC Issuer's correspondents, or any Lender Party in accordance with
such extension, increase or other modification.

     (c)  Transferees of Letters of Credit.  If any Letter of Credit provides
          --------------------------------
that it is transferable, LC Issuer shall have no duty to determine the proper
identity of anyone appearing as transferee of such Letter of Credit, nor shall
LC Issuer be charged with responsibility of any nature or character for the
validity or correctness of any transfer or successive transfers, and payment by
LC Issuer to any purported transferee or transferees as determined by LC Issuer
is hereby authorized and approved, and Borrower releases each Lender Party from,
and agrees to hold each Lender Party harmless and indemnified against, any
liability or claim in connection with or arising out of the foregoing, WHICH
INDEMNITY SHALL APPLY WHETHER OR NOT ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY
OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION
OF ANY KIND BY ANY LENDER PARTY, provided only that no Lender Party shall be
entitled to indemnification for that portion, if any, of any liability or claim
which is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment.

     Section 2.11.  LC Collateral.
                    -------------

     (a)  LC Obligations in Excess of Borrowing Base.  If, after the making of
          ------------------------------------------
all mandatory prepayments required under Section 2.6, the Dollar Equivalent of
outstanding LC Obligations will exceed the Borrowing Base, then in addition to
prepayment of the entire principal balance of the Loans Borrower will
immediately pay to LC Issuer an amount equal to such excess.  LC Issuer will
hold such amount as collateral security for the remaining LC Obligations (all
such amounts held as collateral security for LC Obligations being herein
collectively called "LC Collateral") and the other Obligations, and such
                     -------------
collateral may be applied from time to time to pay Matured LC Obligations or any
other Obligations which are then due and payable.  Neither this subsection nor
the following subsection shall, however, limit or impair any rights which LC
Issuer may have under any other document or agreement relating to any Letter of
Credit, LC Collateral or LC Obligation, including any LC Application, or any
rights which any Lender Party may have to otherwise apply any payments by
Borrower and any LC Collateral under Section 3.1.

     (b)  Acceleration of LC Obligations.  If the Obligations or any part
          ------------------------------
thereof become immediately due and payable pursuant to Section 8.1 then, unless
all Lenders otherwise specifically elect to the contrary (which election may
thereafter be retracted by all Lenders at any time), all LC Obligations shall
become immediately due and payable without regard to whether or not actual
drawings or payments on the Letters of Credit have occurred, and Borrower shall
be obligated to pay to LC Issuer immediately an amount equal to the aggregate
Dollar Equivalent of LC Obligations which are then outstanding to be held as LC
Collateral.

                                      37
<PAGE>

     (c)  Investment of LC Collateral.  Pending application thereof, all LC
          ---------------------------
Collateral shall be invested by LC Issuer in such Cash Equivalents as LC Issuer
may choose in its sole discretion. All interest on (and other proceeds of) such
Investments shall be reinvested or applied to Matured LC Obligations or other
Obligations which are due and payable.  When all Obligations have been satisfied
in full, including all LC Obligations, all Letters of Credit have expired or
been terminated, and all of Borrower's reimbursement obligations in connection
therewith have been satisfied in full, LC Issuer shall release any remaining LC
Collateral.  Borrower hereby assigns and grants to LC Issuer for the benefit of
Lenders a continuing security interest in all LC Collateral paid by it to LC
Issuer, all Investments purchased with such LC Collateral, and all proceeds
thereof to secure its Matured LC Obligations and its Obligations under this
Agreement, each Note, and the other Loan Documents, and Borrower agrees that
such LC Collateral, Investments and proceeds shall be subject to all of the
terms and conditions of the Security Documents.  Borrower further agrees that LC
Issuer shall have all of the rights and remedies of a secured party under the
UCC with respect to such security interest and that an Event of Default under
this Agreement shall constitute a default for purposes of such security
interest.

     (d)  Payment of LC Collateral.  When Borrower is required to provide LC
          ------------------------
Collateral for any reason and fails to do so on the day when required, LC Issuer
or Administrative Agent may without prior notice to Borrower or any other
Restricted Person provide such LC Collateral (whether by application of proceeds
of other Collateral, by transfers from other accounts maintained with LC Issuer,
or otherwise) using any available funds of Borrower or any other Person also
liable to make such payments, and LC Issuer or Administrative Agent will give
notice thereof to Borrower promptly after such application or transfer.  Any
such amounts which are required to be provided as LC Collateral and which are
not provided on the date required shall, for purposes of each Security Document,
be considered past due Obligations owing hereunder, and LC Issuer is hereby
authorized to exercise its respective rights under each Security Document to
obtain such amounts.

     Section 2.12.  Interest Rates and Fees; Reduction in Commitment.
                    ------------------------------------------------

     (a)  Interest Rates.  Unless the Default Rate shall apply, (i) each Base
          --------------
Rate Loan shall bear interest on each day outstanding at the Base Rate plus the
Base Rate Margin in effect on such day and (ii) each LIBOR Loan shall bear
interest on each day during the related Interest Period at the related LIBOR
Rate plus the LIBOR Rate Margin in effect on such day.  During a Default Rate
Period, all Loans shall bear interest on each day outstanding at the applicable
Default Rate.  If an Event of Default based upon Section 8.1(a), Section 8.1(b)
or, with respect to Borrower, based upon Section 8.1(i)(i), (i)(ii) or (i)(iii)
exists and the Loans are not bearing interest at the Default Rate, the past due
principal and past due interest shall bear interest on each day outstanding at
the applicable Default Rate.  The interest rate shall change whenever the
applicable Base Rate, the Base Rate Margin, the LIBOR Rate or the LIBOR Rate
Margin changes.  In no event shall the interest rate on any Loan exceed the
Highest Lawful Rate.

     (b)  Commitment Fees.  In consideration of each Lender's commitment to make
          ---------------
Loans, Borrower will pay to Administrative Agent for the account of each Lender
a commitment fee determined on a daily basis equal to the Commitment Fee Rate in
effect on such day times such

                                      38
<PAGE>

Lender's Percentage Share of the unused portion of the Maximum Facility Amount
on each day during the Commitment Period, determined for each such day by
deducting from the amount of the Maximum Facility Amount at the end of such day
the Dollar Equivalent of the Facility Usage. This commitment fee shall be due
and payable in arrears on the last day of each Fiscal Quarter and at the end of
the Commitment Period. Borrower shall have the right from time to time to
permanently reduce the Maximum Facility Amount, provided that (i) notice of such
reduction is given not less than 2 Business Days prior to such reduction, (ii)
the resulting Maximum Facility Amount is not less than the Dollar Equivalent of
the Facility Usage, and (iii) each partial reduction shall be in an amount at
least equal to $500,000 and in multiples of $100,000 in excess thereof.

     (c)  Letter of Credit Fees.  In consideration of LC Issuer's issuance of
          ---------------------
any Letter of Credit, Borrower agrees to pay (i) to Administrative Agent, for
the account of all Lenders in accordance with their respective Percentage
Shares, a letter of credit fee equal to the Letter of Credit Fee Rate applicable
each day times the Dollar Equivalent of the face amount of such Letter of Credit
and (ii) to such LC Issuer for its own account, a letter of credit fronting fee
at a rate equal to one-eighth percent (0.125%) per annum times the Dollar
Equivalent of the face amount of such Letter of Credit.  Each such fee will be
calculated on the face amount of each Letter of Credit outstanding on each day
at the above applicable rates and will be payable monthly in arrears on the last
day of each month.  In addition, Borrower will pay to LC Issuer a minimum
administrative issuance fee and such other fees and charges customarily charged
by the LC Issuer in respect of any issuance, amendment or negotiation of any
Letter of Credit in accordance with the LC Issuer's published schedule of such
charges effective as of the date of such amendment or negotiation.  In addition,
in the event any Canadian Letter of Credit shall at the request of Borrower or
Plains Marketing Canada, L.P., as the case may be, be issued pursuant to an LC
Issuer's Canadian office, Borrower will pay a minimum fee for such service as
customarily charged by such LC Issuer.  In addition, and notwithstanding the
foregoing, Plains Marketing Canada, L.P., pursuant to each LC Application
executed by it, shall with respect to Canadian Letters of Credit requested by it
agree to pay such letter of credit fees as set forth in this Section 2.12(c)
(such obligation and Borrower's obligation set forth in this Section 2.12(c)
with respect to such Canadian Letters of Credit to be joint and several).  Any
such payment of letter of credit fees made by Plains Marketing Canada, L.P.
shall, pursuant to Section 3.7(b) hereof, include all such additional amounts as
are needed to cause the amount received by Administrative Agent and LC Issuer,
in each case, after any deduction or withholding as may be required pursuant to
the Income Tax Act (Canada) or other applicable Canadian Laws, to equal the
amount which would have been receivable in the absence of such deduction or
withholding.

     (d)  Administrative Agent's Fees.  In addition to all other amounts due to
          ---------------------------
Administrative Agent under the Loan Documents, Borrower will pay fees to
Administrative Agent as described in a letter agreement of even date herewith
between Administrative Agent and Borrower.

     Section 2.13.  Borrowing Base Reporting.  The Borrowing Base Reports are
                    ------------------------
subject to the procedures set forth on Schedule 6.

                                      39
<PAGE>

                       ARTICLE III - Payments to Lenders
                                     -------------------

     Section 3.1.  General Procedures.  Borrower will make each payment which it
                   ------------------
owes under the Loan Documents to Administrative Agent for the account of the
Lender Party to whom such payment is owed in lawful money of the United States
of America, (unless otherwise expressly provided in this Agreement), without
set-off, deduction or counterclaim, and in immediately available funds. Each
such payment must be received by Administrative Agent not later than noon,
Boston, Massachusetts time, on the date such payment becomes due and payable.
Any payment received by Administrative Agent after such time will be deemed to
have been made on the next following Business Day. Should any such payment
become due and payable on a day other than a Business Day, the maturity of such
payment shall be extended to the next succeeding Business Day, and, in the case
of a payment of principal or past due interest, interest shall accrue and be
payable thereon for the period of such extension as provided in the Loan
Document under which such payment is due. Each payment under a Loan Document
shall be due and payable at the place provided therein and, if no specific place
of payment is provided, shall be due and payable at the place of payment of
Administrative Agent's Note. When Administrative Agent collects or receives
money on account of the Obligations, Administrative Agent shall distribute all
money so collected or received, and each Lender Party shall apply all such money
so distributed, as follows:

          (a)  first, for the payment of all Obligations which are then due (and
     if such money is insufficient to pay all such Obligations, first to any
     reimbursements due Administrative Agent under Section 6.9 or 10.4 and then
     to the partial payment of all other Obligations then due in proportion to
     the amounts thereof, or as Lender Parties shall otherwise agree);

          (b)  then for the prepayment of amounts owing under the Loan Documents
     (other than principal on the Notes) if so specified by Borrower;

          (c)  then for the prepayment of principal on the Notes, together with
     accrued and unpaid interest on the principal so prepaid, and then held as
     LC Collateral pursuant to Section 2.11(c); and

          (d)  last, for the payment or prepayment of any other Obligations.

All payments applied to principal or interest on any Note shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and accrued interest thereon in
compliance with Sections 2.5 and 2.6, as applicable.  All distributions of
amounts described in any of subsections (b), (c) or (d) above shall be made by
Administrative Agent pro rata to each Lender Party then owed Obligations
described in such subsection in proportion to all amounts owed to all Lender
Parties which are described in such subsection; provided that if any Lender then
owes payments to LC Issuer for the purchase of a participation under Section
2.9(c) or to Administrative Agent under Section 9.4, any amounts otherwise
distributable under this section to such Lender shall be deemed to belong to LC
Issuer or Administrative Agent, respectively, to the extent of such unpaid
payments, and Administrative

                                      40
<PAGE>

Agent shall apply such amounts to make such unpaid payments rather than
distribute such amounts to such Lender. If any payment on account of any
Obligation is received in Canadian Dollars, instead of Dollars as required
pursuant to this section (whether voluntarily or pursuant to an order or
judgment or the enforcement thereof or the realization of any security or the
liquidation of such Restricted Person or otherwise howsoever), such payment
shall constitute a discharge of such Obligation only to the extent of the
equivalent in Dollars of such amount of Canadian Dollars determined by
Administrative Agent in accordance with its normal procedures and after
deducting any premium and costs of exchange, determined as of the Business Day
next following such receipt. If, for the purpose of obtaining or enforcing
judgment in any court in any Canadian jurisdiction, it becomes necessary to
convert any amount due in Dollars into Canadian Dollars, then the Dollar
Equivalent of such amount shall be determined on the Business Day following the
date such judgment is given, and in any event Restricted Persons shall continue
to be obligated to pay any deficiency owing to any Lender Party. If any Lender
Party receives any payment or payments on account of the liability of any
Restricted Person hereunder pursuant to any judgment or order in Canadian
Dollars, and the Dollar Equivalent of such amount on the Business Day next
following such receipt is less than the full amount of the Obligation due
immediately prior to such judgment or order, then Borrower on demand shall
indemnify and save such Lender Party harmless from and against any loss, cost or
expense arising out of or in connection with such deficiency. The agreement of
indemnity provided for in this Section 3.1 shall constitute an obligation
separate and independent from all other obligations contained in this Agreement,
shall give rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by the Lender Parties or any of them from
time to time, and shall continue in full force and effect notwithstanding any
judgment or order for a liquidated sum in respect of an amount due hereunder or
under any judgment or order.

     Section 3.2.  Capital Reimbursement.  If either (a) the introduction or
                   ---------------------
implementation of or the compliance with or any change in or in the
interpretation of any Law, or (b) the introduction or implementation of or the
compliance with any request, directive or guideline from any central bank or
other governmental authority (whether or not having the force of Law) affects or
would affect the amount of capital required or expected to be maintained by any
Lender Party or any corporation controlling any Lender Party, then, within five
Business Days after demand by such Lender Party, Borrower will pay to
Administrative Agent for the benefit of such Lender Party, from time to time as
specified by such Lender Party, such additional amount or amounts which such
Lender Party shall determine to be appropriate to compensate such Lender Party
or any corporation controlling such Lender Party in light of such circumstances,
to the extent that such Lender Party reasonably determines that the amount of
any such capital would be increased or the rate of return on any such capital
would be reduced by or in whole or in part based on the existence of the face
amount of such Lender Party's Loans, Letters of Credit, participations in
Letters of Credit or commitments under this Agreement.

     Section 3.3.  Increased Cost of LIBOR Loans or Letters of Credit.  If any
                   --------------------------------------------------
applicable Law (whether now in effect or hereinafter enacted or promulgated,
including Regulation D) or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of Law):

                                      41
<PAGE>

          (a)  shall change the basis of taxation of payments to any Lender
     Party of any principal, interest, or other amounts attributable to any
     LIBOR Loan or Letter of Credit or otherwise due under this Agreement in
     respect of any LIBOR Loan or Letter of Credit (other than taxes imposed on,
     or measured by, the overall net income of such Lender Party or any
     Applicable Lending Office of such Lender Party by any jurisdiction in which
     such Lender Party or any such Applicable Lending Office is located); or

          (b)  shall change, impose, modify, apply or deem applicable any
     reserve, special deposit or similar requirements in respect of any LIBOR
     Loan or any Letter of Credit (excluding those for which such Lender Party
     is fully compensated pursuant to adjustments made in the definition of
     LIBOR Rate) or against assets of, deposits with or for the account of, or
     credit extended by, such Lender Party; or

          (c)  shall impose on any Lender Party or the interbank eurocurrency
     deposit market any other condition affecting any LIBOR Loan or Letter of
     Credit, the result of which is to increase the cost to any Lender Party of
     funding or maintaining any LIBOR Loan or of issuing any Letter of Credit or
     to reduce the amount of any sum receivable by any Lender Party in respect
     of any LIBOR Loan or Letter of Credit by an amount deemed by such Lender
     Party to be material,

then such Lender Party shall promptly notify Administrative Agent and Borrower
in writing of the happening of such event and of the amount required to
compensate such Lender Party for such event (on an after-tax basis, taking into
account any taxes on such compensation), whereupon (i) Borrower shall, within
five Business Days after demand therefor by such Lender Party, pay such amount
to Administrative Agent for the account of such Lender Party and (ii Borrower
may elect, by giving to Administrative Agent and such Lender Party not less than
three Business Days' notice, to Convert all (but not less than all) of any such
LIBOR Loans into Base Rate Loans.

      Section 3.4.  Notice; Change of Applicable Lending Office.  A Lender Party
                    -------------------------------------------
shall notify Borrower of any event occurring after the date of this Agreement
that will entitle such Lender Party to compensation under Section 3.2, 3.3 or
3.5 hereof as promptly as practicable, but in any event within 90 days, after
such Lender Party obtains actual knowledge thereof; provided, that (i) if such
                                                    --------
Lender Party fails to give such notice within 90 days after it obtains actual
knowledge of such an event, such Lender Party shall, with respect to
compensation payable pursuant to Section 3.2, 3.3 or 3.5 in respect of any costs
resulting from such event, only be entitled to payment under Section 3.2, 3.3 or
3.5 hereof for costs incurred from and after the date 90 days prior to the date
that such Lender Party does give such notice and (ii) such Lender Party will
designate a different Applicable Lending Office for the Loans affected by such
event if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender Party, be
disadvantageous to such Lender Party, except that such Lender Party shall have
no obligation to designate an Applicable Lending Office located in the United
States of America.  Each Lender Party will furnish to Borrower a certificate
setting forth the basis and amount of each request by such Lender Party for
compensation under Section 3.2, 3.3 or 3.5 hereof.

                                      42
<PAGE>

      Section 3.5.  Availability.  If (a) any change in applicable Laws, or in
                    ------------
the interpretation or administration thereof of or in any jurisdiction
whatsoever, domestic or foreign, shall make it unlawful or impracticable for any
Lender Party to fund or maintain LIBOR Loans or to issue or participate in
Letters of Credit, or shall materially restrict the authority of any Lender
Party to purchase or take offshore deposits of dollars (i.e., "eurodollars"), or
(b) any Lender Party determines that matching deposits appropriate to fund or
maintain any LIBOR Loan are not available to it, or (c) any Lender Party
determines that the formula for calculating the LIBOR Rate does not fairly
reflect the cost to such Lender Party of making or maintaining loans based on
such rate, then, upon notice by such Lender Party to Borrower and Administrative
Agent, Borrower's right to elect LIBOR Loans from such Lender Party (or, if
applicable, to obtain Letters of Credit) shall be suspended to the extent and
for the duration of such illegality, impracticability or restriction and all
LIBOR Loans of such Lender Party which are then outstanding or are then the
subject of any Borrowing Notice and which cannot lawfully or practicably be
maintained or funded shall immediately become or remain, or shall be funded as,
Base Rate Loans of such Lender Party. Borrower agrees to indemnify each Lender
Party and hold it harmless against all costs, expenses, claims, penalties,
liabilities and damages which may result from any such change in Law,
interpretation or administration. Such indemnification shall be on an after-tax
basis, taking into account any taxes imposed on the amounts paid as indemnity.

     Section 3.6.  Funding Losses.  In addition to its other obligations
                   --------------
hereunder, Borrower will indemnify each Lender Party against, and reimburse each
Lender Party on demand for, any loss or expense incurred or sustained by such
Lender Party (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by a Lender
Party to fund or maintain LIBOR Loans), as a result of (a) any payment or
prepayment (whether or not authorized or required hereunder) of all or a portion
of a LIBOR Loan on a day other than the day on which the applicable Interest
Period ends, (b) any payment or prepayment, whether or not required hereunder,
of a Loan made after the delivery, but before the effective date, of a
Continuation/Conversion Notice, if such payment or prepayment prevents such
Continuation/Conversion Notice from becoming fully effective, (c) the failure of
any Loan to be made or of any Continuation/Conversion Notice to become effective
due to any condition precedent not being satisfied or due to any other action or
inaction of any Restricted Person, or (d) any Conversion (whether or not
authorized or required hereunder) of all or any portion of any LIBOR Loan into a
Base Rate Loan or into a different LIBOR Loan on a day other than the day on
which the applicable Interest Period ends.  Such indemnification shall be on an
after-tax basis, taking into account any taxes imposed on the amounts paid as
indemnity.

     Section 3.7.  Reimbursable Taxes.  Borrower covenants and agrees that:
                   ------------------

          (a)  Borrower will indemnify each Lender Party against and reimburse
     each Lender Party for all present and future stamp and other taxes, duties,
     levies, imposts, deductions, charges, costs, and withholdings whatsoever
     imposed, assessed, levied or collected on or in respect of this Agreement
     or any LIBOR Loans or Letters of Credit (whether or not legally or
     correctly imposed, assessed, levied or collected) including all taxes
     imposed pursuant to Part XIII of the Income Tax Act (Canada) and any
     withholding

                                      43
<PAGE>

     or other taxes imposed on any Lender Party under Canadian Law, excluding,
     however, any taxes imposed on or measured by the overall net income of
     Administrative Agent or such Lender Party or any Applicable Lending Office
     of such Lender Party by any jurisdiction in which such Lender Party or any
     such Applicable Lending Office is located (all such non-excluded taxes,
     levies, costs and charges being collectively called "Reimbursable Taxes" in
     this section). Such indemnification shall be on an after-tax basis, taking
     into account any taxes imposed on the amounts paid as indemnity.

          (b)  All payments on account of the principal of, and interest on,
     each Lender Party's Loans and Note, and all other amounts payable by
     Borrower to any Lender Party hereunder, shall be made in full without set-
     off or counterclaim and shall be made free and clear of and without
     deductions or withholdings of any nature by reason of any Reimbursable
     Taxes, all of which will be for the account of Borrower. In the event of
     Borrower being compelled by Law to make any such deduction or withholding
     from any payment to any Lender Party, Borrower shall pay on the due date of
     such payment, by way of additional interest, such additional amounts as are
     needed to cause the amount receivable by such Lender Party after such
     deduction or withholding to equal the amount which would have been
     receivable in the absence of such deduction or withholding. If Borrower
     should make any deduction or withholding as aforesaid, Borrower shall
     within 60 days thereafter forward to such Lender Party an official receipt
     or other official document evidencing payment of such deduction or
     withholding.

          (c)  If Borrower is ever required to pay any Reimbursable Tax with
     respect to any LIBOR Loan, Borrower may elect, by giving to Administrative
     Agent and such Lender Party not less than three Business Days' notice, to
     Convert all (but not less than all) of any such LIBOR Loan into a Base Rate
     Loan, but such election shall not diminish Borrower's obligation to pay all
     Reimbursable Taxes.

          (d)  Notwithstanding the foregoing provisions of this section,
     Borrower shall be entitled, to the extent it is required to do so by Law,
     to deduct or withhold (and not to make any indemnification or reimbursement
     for) income or other similar taxes imposed by the United States of America
     (other than any portion thereof attributable to a change in federal income
     tax Laws effected after the date hereof) from interest, fees or other
     amounts payable hereunder for the account of any Lender Party, other than a
     Lender Party (i) who is a U.S. person for Federal income tax purposes or
     (ii) who has the Prescribed Forms on file with Administrative Agent (with
     copies provided to Borrower) for the applicable year to the extent
     deduction or withholding of such taxes is not required as a result of the
     filing of such Prescribed Forms, provided that if Borrower shall so deduct
     or withhold any such taxes, it shall provide a statement to Administrative
     Agent and such Lender Party, setting forth the amount of such taxes so
     deducted or withheld, the applicable rate and any other information or
     documentation which such Lender Party may reasonably request for assisting
     such Lender Party to obtain any allowable credits or deductions for the
     taxes so deducted or withheld in the jurisdiction or jurisdictions in which
     such Lender Party is subject to tax.  As used in this section, "Prescribed
     Forms" means such duly executed forms or statements, and in such number of
     copies, which may,

                                      44
<PAGE>

     from time to time, be prescribed by Law and which, pursuant to applicable
     provisions of (x) an income tax treaty between the United States and the
     country of residence of the Lender Party providing the forms or statements,
     (y) the Code, or (z) any applicable rules or regulations thereunder, permit
     Borrower to make payments hereunder for the account of such Lender Party
     free of such deduction or withholding of income or similar taxes.

     Section 3.8   Replacement of Lenders.  If any Lender Party seeks
                   ----------------------
reimbursement for increased costs under Sections 3.2 through 3.7, then within
ninety days thereafter -- provided no Event of Default then exists -- Borrower
shall have the right (unless such Lender Party withdraws its request for
additional compensation) to replace such Lender Party by requiring such Lender
Party to assign its Loans and Notes and its commitments hereunder to an Eligible
Transferee reasonably acceptable to Administrative Agent and to Borrower,
provided that: (i) all Obligations of Borrower owing to such Lender Party being
replaced (including such increased costs and any breakage costs with respect to
any outstanding LIBOR Loans), but excluding principal and accrued interest on
the Notes being assigned) shall be paid in full to such Lender Party
concurrently with such assignment, and (ii) the replacement Eligible Transferee
shall purchase the Note being assigned by paying to such Lender Party a price
equal to the principal amount thereof plus accrued and unpaid interest and
accrued and unpaid commitment fees thereon.  In connection with any such
assignment Borrower, Administrative Agent, such Lender Party and the replacement
Eligible Transferee shall otherwise comply with Section 10.5. Notwithstanding
the foregoing rights of Borrower under this section, however, Borrower may not
replace any Lender Party which seeks reimbursement for increased costs under
Section 3.2 through 3.7 unless Borrower is at the same time replacing all Lender
Parties which are then seeking such compensation.

                  ARTICLE IV - Conditions Precedent to Credit
                               ------------------------------

     Section 4.1.  Documents to be Delivered.  This Agreement shall not be
                   -------------------------
effective to amend or restate the Existing Agreement or govern the indebtedness,
obligations or liabilities thereunder and no Lender has any obligation to make
its first Loan, and LC Issuer has no obligation to issue the first Letter of
Credit unless Administrative Agent shall have received all of the following, at
Administrative Agent's office in Boston, Massachusetts, duly executed and
delivered and in form, substance and date satisfactory to Administrative Agent:

          (a)  This Agreement and any other documents that Lenders are to
     execute in connection herewith.

          (b)  Each Note.

          (c)  Each Security Document listed in the Security Schedule.

          (d)  Certain certificates including:

                    (i)  An "Omnibus Certificate" of the secretary and of the
          president of General Partner, which shall contain the names and
          signatures of the officers of

                                      45
<PAGE>

          General Partner authorized to execute Loan Documents and which shall
          certify to the truth, correctness and completeness of the following
          exhibits attached thereto: (1) a copy of resolutions duly adopted by
          the Board of Directors of General Partner and in full force and effect
          at the time this Agreement is entered into, authorizing the execution
          of this Agreement and the other Loan Documents delivered or to be
          delivered in connection herewith and the consummation of the
          transactions contemplated herein and therein, (2) a copy of the
          charter documents of each Restricted Person and all amendments
          thereto, certified by the appropriate official of such Restricted
          Person's jurisdiction of organization, and (3) a copy of any bylaws or
          agreement of limited partnership of each Restricted Person;

                 (ii)  A certificate of the president and of the chief financial
          officer of General Partner, regarding satisfaction of Section 4.2; and

                 (iii) A solvency certificate from Borrower and each Guarantor,
          with attached pro forma balance sheet for such Person giving effect to
          the transactions contemplated by the Murphy Acquisition Documents.

          (e)  A certificate (or certificates) of the due formation, valid
     existence and good standing of each Restricted Person in its respective
     jurisdiction of organization, issued by the appropriate authorities of such
     jurisdiction, and certificates of each Restricted Person's good standing
     and due qualification to do business, issued by appropriate officials in
     any jurisdictions in which such Restricted Person owns property subject to
     Security Documents.

          (f)  Documents similar to those specified in subsections (d)(i) and
     (e) of this section with respect to each Guarantor and the execution by it
     of its guaranty of Borrower's Obligations.

          (g)  A favorable opinion of Tim Moore, Esq., General Counsel for
     Restricted Persons, substantially in the form set forth in Exhibit G-1,
     Fulbright & Jaworski L.L.P., special Texas and New York counsel to
     Restricted Persons, substantially in the form set forth in Exhibit G-2,
     Bennett Jones LLP, special Canadian counsel to Restricted Persons,
     substantially in the form set forth in Exhibit G-3, and local counsel for
     the states of California, Illinois, Louisiana, Mississippi and Oklahoma
     satisfactory to Administrative Agent.

          (h)  The Initial Financial Statements.

          (i)  Certificates or binders evidencing Restricted Persons' insurance
     in effect on the date hereof.

          (j)  Copies of such permits and approvals regarding the property and
     business of Restricted Persons as Administrative Agent may request.

                                      46
<PAGE>

          (k)  A certificate signed by the chief executive officer of General
     Partner in form and detail acceptable to Administrative Agent confirming
     the insurance that is in effect as of the date hereof and certifying that
     such insurance is customary for the businesses conducted by Restricted
     Persons and is in compliance with the requirements of this Agreement.

          (l)  Payment of all commitment, facility, agency and other fees
     required to be paid to any Lender pursuant to any Loan Documents or any
     commitment agreement heretofore entered into.

          (m)  The Intercreditor Agreement.

          (n)  Borrower and Plains Marketing Canada, L.P. shall have adopted
     such risk management procedures and controls and such trading policies as
     shall be satisfactory to each Agent in its sole and absolute discretion.

          (o)  Each Agent and its counsel shall have reviewed and approved, in
     its sole and absolute discretion, all outstanding Plains MLP or Resources
     shareholder litigation and available insurance with respect thereto.

          (p)  The Murphy Acquisition Documents, and the Murphy Acquisition
     Closing Date shall have previously or contemporaneously occurred.

          (q)  Each Restricted Person shall have executed and delivered the
     Revolver Agreement and all conditions precedent to the Revolver Agreement
     shall have been satisfied.

          (r)  General Partner shall have delivered to Administrative Agent a
     certificate by the chief financial officer of General Partner, certifying
     the pro forma Initial Financial Statements delivered pursuant to clause (h)
     above and reflecting pro forma compliance with each event specified in
     Sections 7.11 through 7.14, inclusive.

          (s)  The Borrowing Base as of the date of such first Loan and first
     Letter of Credit shall be at least $5,000,000 more than the initial
     Facility Usage on such date after giving effects to the Loans and Letters
     of Credit requested for such date, and General Partner shall have delivered
     to the Administrative Agent a Borrowing Base Report in reasonable detail
     demonstrating compliance with this requirement.

      Section 4.2.  Additional Conditions Precedent.  No Lender has any
                    -------------------------------
obligation to make any Loan (including its first), and LC Issuer has no
obligation to issue any Letter of Credit (including its first), unless the
following conditions precedent have been satisfied:

          (a)  All representations and warranties made by any Restricted Person
     in any Loan Document shall be true on and as of the date of such Loan or
     the date of issuance of such Letter of Credit as if such representations
     and warranties had been made as of the date of such Loan or the date of

                                      47
<PAGE>

     issuance of such Letter of Credit except to the extent that such
     representation or warranty was made as of a specific date or updated,
     modified or supplemented as of a subsequent date with the consent of
     Majority Lenders.

          (b)  No Default shall exist at the date of such Loan or the date of
     issuance of such Letter of Credit.

          (c)  No Material Adverse Change shall have occurred to, and no event
     or circumstance shall have occurred that could cause a Material Adverse
     Change to, Plains MLP's or Borrower's Consolidated financial condition or
     businesses since the date of the Initial Financial Statements.

          (d)  Each Restricted Person shall have performed and complied with all
     agreements and conditions required in the Loan Documents to be performed or
     complied with by it on or prior to the date of such Loan or the date of
     issuance of such Letter of Credit.

          (e)  The making of such Loan or the issuance of such Letter of Credit
     shall not be prohibited by any Law and shall not subject any Lender or any
     LC Issuer to any penalty or other onerous condition under or pursuant to
     any such Law.

          (f)  Administrative Agent shall have received all documents and
     instruments which Administrative Agent has then requested, in addition to
     those described in Section 4.1 (including opinions of legal counsel for
     Restricted Persons and Administrative Agent; corporate documents and
     records; documents evidencing governmental authorizations, consents,
     approvals, licenses and exemptions; and certificates of public officials
     and of officers and representatives of Borrower and other Persons), as to
     (i) the accuracy and validity of or compliance with all representations,
     warranties and covenants made by any Restricted Person in this Agreement
     and the other Loan Documents, (ii the satisfaction of all conditions
     contained herein or therein, and (ii all other matters pertaining hereto
     and thereto.  All such additional documents and instruments shall be
     satisfactory to Administrative Agent in form, substance and date.

                  ARTICLE V - Representations and Warranties
                              ------------------------------

     To confirm each Lender's understanding concerning Restricted Persons and
Restricted Persons' businesses, properties and obligations and to induce each
Lender to enter into this Agreement and to extend credit hereunder, after giving
effect to the consummation of the transactions set forth in the Murphy
Acquisition Documents, Plains MLP and Borrower represent and warrant to each
Lender that:

     Section 5.1.  No Default.  No Restricted Person is in default in the
                   ----------
performance of any of the covenants and agreements contained in any Loan
Document.  No event has occurred and is continuing which constitutes a Default.

                                      48
<PAGE>

     Section 5.2.  Organization and Good Standing.  Each Restricted Person is
                   ------------------------------
duly organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated hereby.
Each Restricted Person is duly qualified, in good standing, and authorized to do
business in all other jurisdictions within the United States and Canada wherein
the character of the properties owned or held by it or the nature of the
business transacted by it makes such qualification necessary except where the
failure to so qualify would not cause a Material Adverse Change.  Each
Restricted Person has taken all actions and procedures customarily taken in
order to enter, for the purpose of conducting business or owning property, each
jurisdiction outside the United States and Canada wherein the character of the
properties owned or held by it or the nature of the business transacted by it
makes such actions and procedures necessary except where the failure to so
qualify would not cause a Material Adverse Change.

     Section 5.3.  Authorization.  Each Restricted Person has duly taken all
                   -------------
action necessary to authorize the execution and delivery by it of the Loan
Documents to which it is a party and to authorize the consummation of the
transactions contemplated thereby and the performance of its obligations
thereunder.  Borrower is duly authorized to borrow funds hereunder.

     Section 5.4.  No Conflicts or Consents.  The execution and delivery by the
                   ------------------------
various Restricted Persons of the Loan Documents and Murphy Acquisition
Documents to which each is a party, the performance by each of its obligations
under such Loan Documents and Murphy Acquisition Documents, and the consummation
of the transactions contemplated by the various Loan Documents and various
Murphy Acquisition Documents, do not and will not (i) conflict with any
provision of (1) any Law, (2) the organizational documents of any Restricted
Person or any of its Affiliates, or (3) any agreement, judgment, license, order
or permit applicable to or binding upon any Restricted Person or any of its
Affiliates, (ii result in the acceleration of any Indebtedness owed by any
Restricted Person or any of its Affiliates, or (ii result in or require the
creation of any Lien upon any assets or properties of any Restricted Person or
any of its Affiliates except as expressly contemplated in the Loan Documents.
Except as expressly contemplated in the Loan Documents or disclosed in the
Disclosure Schedule, no permit, consent, approval, authorization or order of,
and no notice to or filing, registration or qualification with, any Tribunal or
third party is required in connection with the execution, delivery or
performance by any Restricted Person of any Loan Document or Murphy Acquisition
Document or to consummate any transactions contemplated by the Loan Documents
and the Murphy Acquisition Documents (except, in each case with respect to the
Murphy Acquisition Documents, as may be waived by the parties thereto or the
party thereunder to whom such obligation is owed or who has imposed such
obligation), other than consents, approvals, authorizations or orders that have
been obtained or notices given or filings made prior to the date hereof and
other than various notices or filings required to be given or made following the
effectiveness of the Murphy Acquisition Documents.

     Section 5.5.  Enforceable Obligations.  This Agreement is, and the other
                   -----------------------
Loan Documents and the Murphy Acquisition Documents when duly executed and
delivered will be, legal, valid and binding obligations of each Restricted
Person which is a party hereto or thereto, enforceable

                                      49
<PAGE>

in accordance with their terms except as such enforcement may be limited by
bankruptcy, insolvency or similar Laws of general application relating to the
enforcement of creditors' rights.

     Section 5.6.  Initial Financial Statements.  Plains MLP has heretofore
                   ----------------------------
delivered to each Lender true, correct and complete copies of the Initial
Financial Statements.  The Initial Financial Statements other than pro forma
financial statements fairly present Plains MLP's Consolidated and consolidating
financial position at the date thereof and the Consolidated and consolidating
results of Plains MLP's operations for the periods thereof, and in the case of
the annual Initial Financial Statements, Consolidated cash flows for the period
thereof.  The pro forma Initial Financial Statements fairly present Plains MLP's
pro forma Consolidated and consolidating financial position at the date thereof
and the pro forma Consolidated results of Plains MLP's operations for the period
thereof.  Since the date of the annual Initial Financial Statements no Material
Adverse Change has occurred, except as reflected in the quarterly Initial
Financial Statements or in the Disclosure Schedule.  All Initial Financial
Statements other than pro forma financial statements were prepared in accordance
with GAAP.  All Initial Financial Statements that are pro forma financial
statements were prepared in accordance with GAAP with such pro forma adjustments
as have been accepted by Administrative Agent.

     Section 5.7.  Other Obligations and Restrictions.  No Restricted Person has
                   ----------------------------------
any outstanding Liabilities of any kind (including contingent obligations, tax
assessments, and unusual forward or long-term commitments) which are, in the
aggregate, material to Plains MLP or material with respect to Plains MLP's
Consolidated financial condition and not shown in the Initial Financial
Statements, disclosed in the Disclosure Schedule or otherwise permitted under
Section 7.1. Except as shown in the Initial Financial Statements or disclosed in
the Disclosure Schedule, no Restricted Person is subject to or restricted by any
franchise, contract, deed, charter restriction, or other instrument or
restriction which could cause a Material Adverse Change.

     Section 5.8.  Full Disclosure.  No certificate, statement or other
                   ---------------
information delivered herewith or heretofore by any Restricted Person to any
Lender in connection with the negotiation of this Agreement or in connection
with any transaction contemplated hereby contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading as of the date made or deemed made.  All
written information furnished after the date hereof by or on behalf of any
Restricted Person to Administrative Agent or any Lender Party in connection with
this Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby will be true, complete and accurate in every material respect
in light of the circumstances in which made, or based on reasonable estimates on
the date as of which such information is stated or certified.  There is no fact
known to any Restricted Person that has not been disclosed to each Lender in
writing which could cause a Material Adverse Change.

     Section 5.9.  Litigation.  Except as disclosed in the Initial Financial
                   ----------
Statements, in the Disclosure Schedule or pursuant to Section 6.4:  (i) there
are no actions, suits or legal, equitable, arbitrative or administrative
proceedings pending, or to the knowledge of any Restricted Person threatened,
against any Restricted Person or affecting any Collateral (including, without

                                      50
<PAGE>

limitation, any which challenge or otherwise pertain to any Restricted Person's
title to any Collateral) before any Tribunal which could reasonably be expected
to cause a Material Adverse Change, and (ii) there are no outstanding judgments,
injunctions, writs, rulings or orders by any such Tribunal against any
Restricted Person or any Restricted Person's stockholders, partners, directors
or officers or affecting any Collateral which could reasonably be expected to
cause a Material Adverse Change.

     Section 5.10.  Labor Disputes and Acts of God.  Except as disclosed in the
                    ------------------------------
Disclosure Schedule or otherwise disclosed in writing to Administrative Agent,
neither the business nor the properties of any Restricted Person has been
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance), which could cause
a Material Adverse Change.

     Section 5.11.  ERISA Plans and Liabilities.  All currently existing ERISA
                    ---------------------------
Plans are listed in the Disclosure Schedule.  Except as disclosed in the Initial
Financial Statements or in the Disclosure Schedule, no Termination Event has
occurred with respect to any ERISA Plan and all ERISA Affiliates are in
compliance with ERISA in all material respects.  No ERISA Affiliate is required
to contribute to, or has any other absolute or contingent liability in respect
of, any "multiemployer plan" as defined in Section 4001 of ERISA.  Except as set
forth in the Disclosure Schedule:  (i) no "accumulated funding deficiency" (as
defined in Section 412(a) of the Code exists with respect to any ERISA Plan,
whether or not waived by the Secretary of the Treasury or his delegate, and (ii)
the current value of each ERISA Plan's benefits does not exceed the current
value of such ERISA Plan's assets available for the payment of such benefits by
more than $500,000.

     Section 5.12.  Compliance with Laws.  Except as set forth in the Disclosure
                    --------------------
Schedule, each Restricted Person has all permits, licenses and authorizations
required in connection with the conduct of its businesses, except to the extent
failure to have any such permit, license or authorization could not cause a
Material Adverse Change. Each Restricted Person is in compliance with the terms
and conditions of all such permits, licenses and authorizations, and is also in
compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any Law, including applicable Environmental Law, or in any regulation, code,
plan, order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, except to the extent failure to
comply could not cause a Material Adverse Change. Without limiting the
foregoing, each Restricted Person (i) has filed and maintained all tariffs
applicable to its business with each applicable commission, (ii) and all such
tariffs are in compliance with all Laws administered or promulgated by each
applicable commission and (iii) has imposed charges on its customers in
compliance with such tariffs, all contracts applicable to its business and all
applicable Laws. As used herein, "commission" includes the Federal Energy
Regulatory Commission, the Public Utility Commission of the State of California
and each other US federal, Canadian federal, state, provincial, or local
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over any Restricted Person or its properties.

                                      51
<PAGE>

     Section 5.13.  Environmental Laws.  As used in this section: "CERCLA" means
                    ------------------                             ------
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, "CERCLIS" means the Comprehensive Environmental Response,
                   -------
Compensation and Liability Information System List of the Environmental
Protection Agency, and "Release" has the meaning given such term in 42 U.S.C.
                        -------
(S) 9601(22).  Without limiting the provisions of Section 5.12 and except as set
forth in the Disclosure Schedule:

     (a)  No notice, notification, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed, and no investigation or review is pending or threatened by any
Tribunal or any other Person with respect to any of the following which in the
aggregate could cause a Material Adverse Change (i) any alleged generation,
treatment, storage, recycling, transportation, disposal, or Release of any
Hazardous Materials, either by any Restricted Person or on any property owned by
any Restricted Person, (ii) any remedial action which might be needed to respond
to any such alleged generation, treatment, storage, recycling, transportation,
disposal, or Release, or (iii) any alleged failure by any Restricted Person to
have any permit, license or authorization required in connection with the
conduct of its business or with respect to any such generation, treatment,
storage, recycling, transportation, disposal, or Release.

     (b)  No Restricted Person otherwise has any known material contingent
liability in connection with any alleged generation, treatment, storage,
recycling, transportation, disposal, or Release of any Hazardous Materials.

     (c)  No Restricted Person has handled any Hazardous Materials, other than
as a generator, on any properties now or previously owned or leased by any
Restricted Person to an extent that such handling has caused, or could cause, a
Material Adverse Change.

     (d)  Except to the extent that the following in the aggregate has not
caused and could not cause a Material Adverse Change:

     (i)    no PCBs are or have been present at any properties now or previously
            owned or leased by any Restricted Person;

     (ii)   no asbestos is or has been present at any properties now or
            previously owned or leased by any Restricted Person;

     (iii)  there are no underground storage tanks for Hazardous Materials,
            active or abandoned, at any properties now or previously owned or
            leased by any Restricted Person; and

     (iv)   no Hazardous Materials have been Released at, on or under any
            properties now or previously owned or leased by any Restricted
            Person.

     (e)  No Restricted Person has transported or arranged for the
transportation of any Hazardous Material to any location which is listed on the
National Priorities List under

                                      52
<PAGE>

CERCLA, any location listed for possible inclusion on the National Priorities
List by the Environmental Protection Agency in CERCLIS, nor, except to the
extent that has not caused and could not cause a Material Adverse Change, any
location listed on any similar state list or which is the subject of federal,
state or local enforcement actions or other investigations which may lead to
claims against any Restricted Person for clean-up costs, remedial work, damages
to natural resources or for personal injury claims, including, but not limited
to, claims under CERCLA.

     (f)  No property now or previously owned or leased by any Restricted Person
is listed or proposed for listing on the National Priority list promulgated
pursuant to CERCLA, in CERCLIS, nor, except to the extent that has not caused
and could not cause a Material Adverse Change, on any similar state list of
sites requiring investigation or clean-up.

     (g)  There are no Liens arising under or pursuant to any Environmental Laws
on any of the real properties or properties owned or leased by any Restricted
Person, and no government actions of which Borrower is aware have been taken or
are in process which could subject any of such properties to such Liens; nor
would any Restricted Person be required to place any notice or restriction
relating to the presence of Hazardous Materials at any properties owned by it in
any deed to such properties.

     (h)  There have been no environmental investigations, studies, audits,
tests, reviews or other analyses for ground water or soil contamination relating
to the Release of Hazardous Materials conducted by or which are in the
possession of any Restricted Person in relation to any properties or facility
now or previously owned or leased by any Restricted Person which have not been
made available to Administrative Agent.

     (i)  (i) Each Canadian Subsidiary and each Subsidiary of either such Person
are conducting their businesses in material compliance with all applicable Laws,
including Environmental Laws, and have and are in compliance with all licenses
and permits required under any such Laws, unless failure to so comply could not
reasonably be expected to cause a Material Adverse Change; (ii) none of the
operations or properties of either Canadian Subsidiary nor any Subsidiary of
either such Person is the subject of federal, provincial or local investigation
evaluating whether any material remedial action is needed to respond to a
release of any Hazardous Materials into the environment or to the improper
storage or disposal (including storage or disposal at offsite locations) of any
Hazardous Materials, unless such remedial action could not reasonably be
expected to cause a Material Adverse Change; and (iii) neither Canadian
Subsidiary nor any Subsidiary of either such Person (and to the best knowledge
of each Canadian Subsidiary, no other Person) has filed any notice under any Law
indicating that any such Person is responsible for the improper release into the
environment, or the improper storage or disposal, of any material amount of any
Hazardous Materials or that any Hazardous Materials have been improperly
released, or are improperly stored or disposed of, upon any property of any such
Person, unless such failure to so comply could not reasonably be expected to
cause a Material Adverse Change.

     Section 5.14.  Names and Places of Business.  No Restricted Person has,
                    ----------------------------
during the preceding five years, had, been known by, or used any other trade or
fictitious name, except as

                                      53
<PAGE>

disclosed in the Disclosure Schedule. Except as otherwise indicated in the
Disclosure Schedule, the chief executive office and principal place of business
of each Restricted Person are (and for the preceding five years have been)
located at the address of Borrower set out in Section 10.3. Except as indicated
in the Disclosure Schedule or otherwise disclosed in writing to the
Administrative Agent, no Restricted Person has any other office or place of
business.

      Section 5.15.  Borrower's Subsidiaries.  Borrower does not presently have
                     -----------------------
any Subsidiary or own any stock in any other corporation or association except
those listed in the Disclosure Schedule or hereafter disclosed to Administrative
Agent in writing.  Neither Borrower nor any Restricted Person is a member of any
general or limited partnership, limited liability company, joint venture or
association of any type whatsoever except those listed in the Disclosure
Schedule or hereafter disclosed to Administrative Agent in writing.  Borrower
owns, directly or indirectly, the equity interest in each of its Subsidiaries
which is indicated in the Disclosure Schedule.

      Section 5.16.  Title to Properties; Licenses.  Each Restricted Person has
                     -----------------------------
good and defensible title to all of its material properties and assets, free and
clear of all Liens other than Permitted Liens and of all impediments to the use
of such properties and assets in such Restricted Person's business.  Each
Restricted Person possesses all licenses, permits, franchises, patents,
copyrights, trademarks and trade names, and other intellectual property (or
otherwise possesses the right to use such intellectual property without
violation of the rights of any other Person) which are necessary to carry out
its business as presently conducted and as presently proposed to be conducted
hereafter, and no Restricted Person is in violation in any material respect of
the terms under which it possesses such intellectual property or the right to
use such intellectual property.

      Section 5.17.  Government Regulation.  Neither Borrower nor any other
                     ---------------------
Restricted Person owing Obligations is subject to regulation under the Public
Utility Holding Company Act of 1935, the Investment Company Act of 1940 (as any
of the preceding acts have been amended) or any other Law which regulates the
incurring by such Person of Indebtedness, including Laws relating to common
contract carriers or the sale of electricity, gas, steam, water or other public
utility services.  Neither Borrower nor any other Restricted Person is subject
to regulation under the Federal Power Act which would violate, result in a
default of, or prohibit the effectiveness or the performance of any of the
provisions of the Loan Documents.

      Section 5.18.  Insider.  No Restricted Person, nor any Person having
                     -------
"control" (as that term is defined in 12 U.S.C. (S) 375b(9) or in regulations
promulgated pursuant thereto) of any Restricted Person, is a "director" or an
"executive officer" or "principal shareholder" (as those terms are defined in 12
U.S.C. (S) 375b(8) or (9) or in regulations promulgated pursuant thereto) of any
Lender, of a bank holding company of which any Lender is a Subsidiary or of any
Subsidiary of a bank holding company of which any Lender is a Subsidiary.

      Section 5.19.  Solvency.  Upon giving effect to the issuance of the Notes,
                     --------
the execution of the Loan Documents by Borrower and each Guarantor and the
consummation of the transactions contemplated hereby, (i) Borrower and each
Guarantor will be solvent (as such term is used in applicable bankruptcy,
liquidation, receivership, insolvency or similar Laws), and the sum of

                                      54
<PAGE>

Borrower's and each Guarantor's absolute and contingent liabilities, including
the Obligations or guarantees thereof, shall not exceed the fair market value of
such Restricted Person's assets, and (ii) Borrower's and each Guarantor's
capital should be adequate for the businesses in which such Restricted Person is
engaged and intends to be engaged.  Neither Borrower nor any Restricted Person
has incurred (whether under the Loan Documents or otherwise), nor does any
Restricted Person intend to incur or believe that it will incur, debts which
will be beyond its ability to pay as such debts mature.

     Section 5.20.  Credit Arrangements.  The Disclosure Schedule contains a
                    -------------------
complete and correct list, as of the date of this Agreement, of each credit
agreement, loan agreement, indenture, purchase agreement, guaranty or other
arrangement providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or guaranty
by, any Restricted Person, or to which any Restricted Person is subject, other
than the Loan Documents, the Revolver Agreement and the "Loan Documents" as
defined therein, and the aggregate principal or face amount outstanding or which
may become outstanding under each such arrangement is correctly described in the
Disclosure Schedule.  No Restricted Person is subject to any restriction under
any credit agreement, loan agreement, indenture, purchase agreement, guaranty or
other arrangement providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or guaranty
by, any Affiliate, other than another Restricted Person.

                      ARTICLE VI - Affirmative Covenants
                                   ---------------------

     To conform with the terms and conditions under which each Lender is willing
to have credit outstanding to Borrower, and to induce each Lender to enter into
this Agreement and extend credit hereunder, Plains MLP and Borrower covenant and
agree that until the full and final payment of the Obligations and the
termination of this Agreement, unless Majority Lenders, or all Lenders as
required under Section 10.1, have previously agreed otherwise:

     Section 6.1.  Payment and Performance.  Each Restricted Person will pay all
                   -----------------------
amounts due under the Loan Documents, to which it is a party, in accordance with
the terms thereof and will observe, perform and comply with every covenant, term
and condition expressed in the Loan Documents to which it is a party.

     Section 6.2.  Books, Financial Statements and Reports.  Each Restricted
                   ---------------------------------------
Person will at all times maintain full and accurate books of account and
records. Plains MLP will maintain and will cause its Subsidiaries to maintain a
standard system of accounting, will maintain its Fiscal Year, and will furnish
the following statements and reports to each Lender at Restricted Person's
expense:

          (a)  As soon as available, and in any event within ninety (90) days
     after the end of each Fiscal Year (i) complete Consolidated financial
     statements of Plains MLP together with all notes thereto, prepared in
     reasonable detail in accordance with GAAP, together with an unqualified
     opinion, based on an audit using generally accepted auditing standards, by
     PricewaterhouseCoopers LLP, or other independent certified public

                                      55
<PAGE>

     accountants selected by General Partner and acceptable to Majority Lenders,
     stating that such Consolidated financial statements have been so prepared
     and (ii) supporting unaudited consolidating balance sheets and statements
     of income of each other Restricted Person (except for any Restricted Person
     whose financial statements are substantially the same as those of Plains
     MLP).  These financial statements shall contain a Consolidated and
     consolidating balance sheet as of the end of such Fiscal Year and
     Consolidated and consolidating statements of earnings for such Fiscal Year.
     Such Consolidated financial statements shall set forth in comparative form
     the corresponding figures for the preceding Fiscal Year.  In addition,
     within ninety (90) days after the end of each Fiscal Year Plains MLP will
     furnish a certificate signed by such accountants (i) stating that they have
     read this Agreement, (ii) containing calculations showing compliance (or
     non-compliance) at the end of such Fiscal Year with the requirements of
     Sections 7.11 through 7.14, inclusive, and (iii) further stating that in
     making their examination and reporting on the Consolidated financial
     statements described above they obtained no knowledge of any Default
     existing at the end of such Fiscal Year, or, if they did so conclude that a
     Default existed, specifying its nature and period of existence.

          (b)  As soon as available, and in any event within forty-five (45)
     days after the end of each of the first three Fiscal Quarters of each
     Fiscal Year (i) Plains MLP's Consolidated balance sheet as of the end of
     such Fiscal Quarter and Consolidated statements of Plains MLP's earnings
     and cash flows for such Fiscal Quarter and for the period from the
     beginning of the then current Fiscal Year to the end of such Fiscal
     Quarter, and (ii) supporting consolidating balance sheets and statements of
     income of each other Restricted Person (except for any Restricted Person
     whose financial statements are substantially the same as those of Plains
     MLP), all in reasonable detail and prepared in accordance with GAAP,
     subject to changes resulting from normal year-end adjustments, and as soon
     as available, and in any event within forty-five (45) days after the end of
     the last Fiscal Quarter of each Fiscal Year, Plains MLP's unaudited
     Consolidated balance sheet as of the end of such Fiscal Quarter and income
     statement for such Fiscal Quarter and for the period from the beginning of
     the current Fiscal Year to the end of such Fiscal Quarter.  In addition
     Plains MLP will, together with each such set of financial statements and
     each set of financial statements furnished under subsection (a) of this
     section, furnish a certificate in the form of Exhibit F signed by the chief
     financial officer, principal accounting officer or treasurer of General
     Partner stating that such financial statements are accurate and complete in
     all material respects (subject to normal year-end adjustments), stating
     that he has reviewed the Loan Documents, containing calculations showing
     compliance (or non-compliance) at the end of such Fiscal Quarter with the
     requirements of Sections 7.11 through 7.14, inclusive and stating that no
     Default exists at the end of such Fiscal Quarter or at the time of such
     certificate or specifying the nature and period of existence of any such
     Default.

          (c)  Promptly upon their becoming available, copies of all financial
     statements, reports, notices and proxy statements sent by Plains MLP to its
     unit holders and all registration statements, periodic reports and other
     statements and schedules filed by

                                      56
<PAGE>

     Plains MLP with any securities exchange, the Securities and Exchange
     Commission or any similar governmental authority.

          (d)  As soon as available, and in any event within ninety (90) days
     after the end of each Fiscal Year, a business and financial plan for Plains
     MLP (in form reasonably satisfactory to Administrative Agent), prepared or
     caused to be prepared by a senior financial officer thereof, setting forth
     for the first year thereof, quarterly financial projections and budgets for
     Plains MLP, and thereafter yearly financial projections during the
     Commitment Period.

          (e)  On or about the twenty-sixth (26th) (but no later than the
     twenty-eighth (28th)) day of each calendar month (i) a Borrowing Base
     Report in the form of Exhibit H duly completed by an authorized officer of
     General Partner and conforming with the requirements of Section 2.13, and
     (ii) a statement reconciling such report with the Borrowing Base Report
     delivered on or about the 26th day of the preceding calendar month.

          (f)  As soon as available, and in any event within thirty-five (35)
     days after the end of each calendar month, a report setting forth for such
     month aggregate volumes and margins for all marketing activities of
     Restricted Persons.

          (g)  As soon as available, and in any event within thirty (30) days
     after the end of each Fiscal Year, an environmental compliance certificate
     signed by the president or chief executive officer of General Partner in
     the form attached hereto as Exhibit I.  Further, if requested by
     Administrative Agent, Restricted Persons shall permit and cooperate with an
     environmental and safety review made in connection with the operations of
     Restricted Persons' properties one time during each Fiscal Year, by Pilko &
     Associates, Inc. or other consultants selected by Administrative Agent
     which review shall, if requested by Administrative Agent, be arranged and
     supervised by environmental legal counsel for Administrative Agent, all at
     Restricted Persons' cost and expense.  The consultant shall render a verbal
     or written report, as specified by Administrative Agent, based upon such
     review at Restricted Persons' cost and expense and a copy thereof will be
     provided to Restricted Persons.

          (h)  Concurrently with the annual renewal of Restricted Persons'
     insurance policies, Restricted Persons shall at their own cost and expense,
     if requested by Administrative Agent in writing, cause a certificate or
     report to be issued by Administrative Agent's professional insurance
     consultants or other insurance consultants satisfactory to Administrative
     Agent certifying that Restricted Persons' insurance for the next succeeding
     year after such renewal (or for such longer period for which such insurance
     is in effect) complies with the provisions of this Agreement and the
     Security Documents.

                                      57
<PAGE>

          (i)  As soon as available, and in any event within thirty-five (35)
     days after the end of each calendar month, a Consolidated statement of
     Plains MLP's earnings for such calendar month in form satisfactory to
     Administrative Agent.

          (j)  By 10:00 a.m., Boston Massachusetts time, each Monday, a report
     on a mark to market basis of all Floating Rate Contracts as of the close of
     business on the previous Friday, and together with such report a complete
     list of all net realized losses on any Floating Rate Contracts for the
     prior twelve months in form satisfactory to Administrative Agent.

     Section 6.3.  Other Information and Inspections.  In each case subject to
                   ---------------------------------
the last sentence of this Section 6.3, each Restricted Person will furnish to
each Lender any information which Administrative Agent or any Lender may from
time to time request concerning any covenant, provision or condition of the Loan
Documents or any matter in connection with Restricted Persons' businesses and
operations. In each case subject to the last sentence of this Section 6.3, each
Restricted Person will permit representatives appointed by Administrative Agent
(including independent accountants, auditors, agents, attorneys, appraisers and
any other Persons) to visit and inspect during normal business hours any of such
Restricted Person's property, including its books of account, other books and
records, and any facilities or other business assets, and to make extra copies
therefrom and photocopies and photographs thereof, and to write down and record
any information such representatives obtain, and each Restricted Person shall
permit Administrative Agent or its representatives to investigate and verify the
accuracy of the information furnished to Administrative Agent or any Lender in
connection with the Loan Documents and to discuss all such matters with its
officers, employees and, upon prior notice to Borrower, its representatives.
Without limitation of the foregoing, within one hundred twenty (120) days after
the end of each Fiscal Year, and in addition once during each Fiscal Year, if
requested by Administrative Agent at the instruction of Majority Lenders,
Borrower shall permit commercial financial examiners appointed by Administrative
Agent to conduct a commercial finance examination of the business and assets of
Restricted Persons and in connection with such examination to have full access
to and the right to examine, audit, make abstracts and copies from, and inspect
Restricted Persons' records, files, books of account and all other documents,
instruments and agreements to which a Restricted Person is a party.  Borrower
shall pay all reasonable costs and expenses of Administrative Agent associated
with any such examination. Each of the foregoing inspections and examinations
shall be made subject to compliance with applicable safety standards and the
same conditions applicable to any Restricted Person in respect of property of
that Restricted Person on the premises of Persons other than a Restricted Person
or an Affiliate of a Restricted Person, and all information, books and records
furnished or requested to be furnished, or of which copies, photocopies or
photographs are made or requested to be made, all information to be investigated
or verified and all discussions conducted with any officer, employee or
representative of any Restricted Person shall be subject to any applicable
attorney-client privilege exceptions which the Restricted Person determines is
reasonably necessary and compliance with conditions to disclosures under non-
disclosure agreements between any Restricted Person and Persons other than a
Restricted Person or an Affiliate of a Restricted Person and the express
undertaking of each Person acting at the direction of or on

                                      58
<PAGE>

behalf of any Lender Party to be bound by the confidentiality provisions of
Section 10.6 of this Agreement.

     Section 6.4.  Notice of Material Events and Change of Address.  Each
                   -----------------------------------------------
Restricted Person will notify each Lender Party, not later than five (5)
Business Days after any executive officer of Restricted Persons has knowledge
thereof, stating that such notice is being given pursuant to this Agreement, of:

          (a)  the occurrence of any Material Adverse Change,

          (b)  the occurrence of any Default,

          (c)  the acceleration of the maturity of any Indebtedness owed by any
     Restricted Person or of any default by any Restricted Person under any
     indenture, mortgage, agreement, contract or other instrument to which any
     of them is a party or by which any of them or any of their properties is
     bound, if such acceleration or default could cause a Material Adverse
     Change,

          (d)  the occurrence of any Termination Event,

          (e)  Under any Environmental Law, any claim of the Dollar Equivalent
     of $1,000,000 or more, any notice of potential liability which might be
     reasonably likely to exceed such amount, or any other material adverse
     claim asserted against any Restricted Person or with respect to any
     Restricted Person's properties taken as a whole, and

          (f)  the filing of any suit or proceeding, or the assertion in writing
     of a claim against any Restricted Person or with respect to any Restricted
     Person's properties in which an adverse decision reasonably could be
     expected to cause a Material Adverse Change.

Upon the occurrence of any of the foregoing, Restricted Persons will take all
necessary or appropriate steps to remedy promptly any such Material Adverse
Change, Default, acceleration, default, or Termination Event to protect against
any such adverse claim, to defend any such suit or proceeding, and to resolve
all controversies on account of any of the foregoing.  Restricted Persons will
also notify Administrative Agent and Administrative Agent's counsel in writing
at least twenty Business Days prior to the date that any Restricted Person
changes its name or the location of its chief executive office or principal
place of business or the place where it keeps its books and records concerning
the Collateral, furnishing with such notice any necessary financing statement
amendments or requesting Administrative Agent and its counsel to prepare the
same.

     Section 6.5.  Maintenance of Properties.  Each Restricted Person will
                   -------------------------
maintain, preserve, protect, and keep all Collateral and all other property used
or useful in the conduct of its business in good condition (ordinary wear and
tear excepted) and in compliance with all applicable Laws, and will from time to
time make all repairs, renewals and replacements needed to enable the

                                      59
<PAGE>

business and operations carried on in connection therewith to be promptly and
advantageously conducted at all times.

      Section 6.6.  Maintenance of Existence and Qualifications. Each Restricted
                    -------------------------------------------
Person will maintain and preserve its existence and its rights and franchises in
full force and effect and will qualify to do business in all states or
jurisdictions where required by applicable Law, except where the failure so to
qualify will not cause a Material Adverse Change.

      Section 6.7.  Payment of Trade Liabilities, Taxes, etc.  Each Restricted
                    -----------------------------------------
Person will (a) timely file all required tax returns including any extensions;
(b) timely pay all taxes, assessments, and other governmental charges or levies
imposed upon it or upon its income, profits or property; (c) within one hundred
twenty (120) days after the date such goods are delivered or such services are
rendered, pay all Liabilities owed by it on ordinary trade terms to vendors,
suppliers and other Persons providing goods and services used by it in the
ordinary course of its business; (d) pay and discharge when due all other
Liabilities now or hereafter owed by it, other than royalty payments suspended
in the ordinary course of business; and (e) maintain appropriate accruals and
reserves for all of the foregoing in accordance with GAAP.  Each Restricted
Person may, however, delay paying or discharging any of the foregoing so long as
it is in good faith contesting the validity thereof by appropriate proceedings,
if necessary,  and has set aside on its books adequate reserves therefor which
are required by GAAP.

      Section 6.8.  Insurance.  Each Restricted Person shall at all times
                    ---------
maintain insurance for its property in accordance with the Insurance Schedule
which insurance shall be by financially sound and reputable insurers.  Each
Restricted Person will maintain any additional insurance coverage as described
in the respective Security Documents.  Upon demand by Administrative Agent any
insurance policies covering Collateral shall be endorsed (a) to provide for
payment of losses to Administrative Agent as its interests may appear, (b) to
provide that such policies may not be canceled or reduced or affected in any
material manner for any reason without fifteen days prior notice to
Administrative Agent, and (c) to provide for any other matters specified in any
applicable Security Document or which Administrative Agent may reasonably
require.  Each Restricted Person shall at all times maintain insurance against
its liability for injury to persons or property in accordance with the Insurance
Schedule, which insurance shall be by financially sound and reputable insurers.
Without limiting the foregoing, each Restricted Person shall at all time
maintain liability insurance in accordance with the Insurance Schedule.

      Section 6.9.  Performance on Borrower's Behalf.  If any Restricted Person
                    --------------------------------
fails to pay any taxes, insurance premiums, expenses, attorneys' fees or other
amounts it is required to pay under any Loan Document, Administrative Agent may
pay the same after notice of such payment by Administrative Agent is given to
Borrower.  Borrower shall immediately reimburse Administrative Agent for any
such payments and each amount paid by Administrative Agent shall constitute an
Obligation owed hereunder which is due and payable on the date such amount is
paid by Administrative Agent.

      Section 6.10.  Interest.  Borrower hereby promises to each Lender to pay
                     --------
interest at the Default Rate on all Obligations (including Obligations to pay
fees or to reimburse or indemnify

                                      60
<PAGE>

any Lender) which Borrower has in this Agreement promised to pay to such Lender
and which are not paid when due. Such interest shall accrue from the date such
Obligations become due until they are paid.

     Section 6.11.  Compliance with Agreements and Law.  Each Restricted Person
                    ----------------------------------
will perform all material obligations it is required to perform under the terms
of each indenture, mortgage, deed of trust, security agreement, lease, and
franchise, and each material agreement, contract or other instrument or
obligation to which it is a party or by which it or any of its properties is
bound.  Each Restricted Person will conduct its business and affairs in
compliance with all Laws applicable thereto.

     Section 6.12.  Environmental Matters; Environmental Reviews.
                    --------------------------------------------

     (a)  Each Restricted Person will comply in all material respects with all
Environmental Laws now or hereafter applicable to such Restricted Person as well
as all contractual obligations and agreements with respect to environmental
remediation or other environmental matters and shall obtain, at or prior to the
time required by applicable Environmental Laws, all environmental, health and
safety permits, licenses and other authorizations necessary for its operations
and will maintain such authorizations in full force and effect.

     (b)  Each Restricted Person will promptly furnish to Administrative Agent
all written notices of violation, orders, claims, citations, complaints, penalty
assessments, suits or other proceedings received by any Restricted Person or
General Partner, or of which it has notice, pending or threatened against any
Restricted Person, the potential liability of which exceeds the Dollar
Equivalent of $1,000,000 or would cause a Material Adverse Change if resolved
adversely against any Restricted Person, by any governmental authority with
respect to any alleged violation of or non-compliance with any Environmental
Laws or any permits, licenses or authorizations in connection with its ownership
or use of its properties or the operation of its business.

     (c)  Each Restricted Person will promptly furnish to Administrative Agent
all requests for information, notices of claim, demand letters, and other
notifications, received by any Restricted Person or General Partner in
connection with its ownership or use of its properties or the conduct of its
business, relating to potential responsibility with respect to any investigation
or clean-up of Hazardous Material at any location, the potential liability of
which exceeds  the Dollar Equivalent of $1,000,000 or would cause a Material
Adverse Change if resolved adversely against any Restricted Person.

     Section 6.13.  Evidence of Compliance.  Subject to the last sentence of
                    ----------------------
Section 6.3, each Restricted Person will furnish to each Lender at such
Restricted Person's expense all evidence which Administrative Agent from time to
time reasonably requests in writing as to the accuracy and validity of or
compliance with all representations, warranties and covenants made by any
Restricted Person in the Loan Documents, the satisfaction of all conditions
contained therein, and all other matters pertaining thereto.

                                      61
<PAGE>

      Section 6.14.  Agreement to Deliver Security Documents.  Restricted
                     ---------------------------------------
Persons will deliver to further secure the Obligations whenever requested by
Administrative Agent in its sole and absolute discretion, deeds of trust,
mortgages, chattel mortgages, security agreements, financing statements and
other Security Documents in form and substance satisfactory to Administrative
Agent for the purpose of granting, confirming, and perfecting first and prior
liens or security interests in any real or personal property now owned or
hereafter acquired by any Restricted Person.

      Section 6.15.  Perfection and Protection of Security Interests and Liens.
                     ---------------------------------------------------------
Each Restricted Person will from time to time deliver to Administrative Agent
any financing statements, continuation statements, extension agreements and
other documents, properly completed and executed (and acknowledged when
required) by Restricted Persons in form and substance satisfactory to
Administrative Agent, which Administrative Agent requests for the purpose of
perfecting, confirming, or protecting any Liens or other rights in Collateral
securing any Obligations.

      Section 6.16.  Bank Accounts; Offset.  To secure the repayment of the
                     ---------------------
Obligations, each Restricted Person hereby grants to each Lender a security
interest, a lien, and a right of offset, each of which shall be in addition to
all other interests, liens, and rights of any Lender at common Law, under the
Loan Documents, or otherwise, and each of which shall be upon and against (a)
any and all moneys, securities or other property (and the proceeds therefrom) of
such Restricted Person now or hereafter held or received by or in transit to any
Lender from or for the account of such Restricted Person, whether for
safekeeping, custody, pledge, transmission, collection or otherwise, (b) any and
all deposits (general or special, time or demand, provisional or final) of such
Restricted Person with any Lender, and (c) any other credits and claims of such
Restricted Person at any time existing against any Lender, including claims
under certificates of deposit.  At any time and from time to time during the
continuance of any Event of Default, each Lender is hereby authorized to
foreclose upon, or to offset against the Obligations then due and payable (in
either case without notice to any Restricted Person), any and all items herein
above referred to.  The remedies of foreclosure and offset are separate and
cumulative, and either may be exercised independently of the other without
regard to procedures or restrictions applicable to the other.

      Section 6.17.  Guaranties of Subsidiaries.  Each Subsidiary of Plains MLP
                     --------------------------
now existing or created, acquired or coming into existence after the date hereof
shall, promptly upon request by Administrative Agent, execute and deliver to
Administrative Agent an absolute and unconditional guaranty of the timely
repayment of the Obligations and the due and punctual performance of the
obligations of Borrower hereunder, which guaranty shall be satisfactory to
Administrative Agent in form and substance.  Each Subsidiary of Plains MLP
existing on the date hereof shall duly execute and deliver such a guaranty prior
to the making of any Loan hereunder.  Plains MLP will cause each of its
Subsidiaries to deliver to Administrative Agent, simultaneously with its
delivery of such a guaranty, written evidence satisfactory to Administrative
Agent and its counsel that such Subsidiary has taken all corporate, limited
liability company or partnership action necessary to duly approve and authorize
its execution,

                                      62
<PAGE>

delivery and performance of such guaranty and any other documents which it is
required to execute.

      Section 6.18.  Compliance with Agreements.  Each Restricted Person shall
                     --------------------------
observe, perform or comply with any agreement with any Person or any term or
condition of any instrument, if such agreement or instrument is materially
significant to such Restricted Person or to Restricted Persons on a Consolidated
basis or materially significant to any Guarantor, unless any such failure to so
observe, perform or comply is remedied within the applicable period of grace (if
any) provided in such agreement or instrument.

      Section 6.19.  Rents.  By the terms of the various Security Documents,
                     -----
certain Restricted Persons are and will be assigning to Administrative Agent,
for the benefit of Lender Parties, all of the "Rents" (as defined therein)
accruing to the property covered thereby.  Notwithstanding any such assignments,
so long as no Default has occurred and is continuing, (i) such Restricted
Persons may continue to receive and collect from the payors of such Rents all
such Rents, subject, however, to the Liens created under the Security Documents,
which Liens are hereby affirmed and ratified, and free and clear of such Liens,
use the proceeds of the Rents, and (ii) the Administrative Agent will not notify
the obligors of such Rents or take any other action to cause proceeds thereof to
be remitted to the Administrative Agent. Upon the occurrence of a Default,
Administrative Agent may exercise all rights and remedies granted under the
Security Documents, including the right to obtain possession of all Rents then
held by such Restricted Persons or to receive directly from the payors of such
Rents all other Rents until such time as such Default is no longer continuing.
If the Administrative Agent shall receive any Rent proceeds from any payor at
any time other than during the continuance of a Default, then it shall notify
Borrower thereof and (i) upon request and pursuant to the instructions of
Borrower, it shall, if no Default is then continuing, remit such proceeds to the
Borrower and (ii) at the request and expense of Borrower, execute and deliver a
letter to such payors confirming Restricted Persons' right to receive and
collect Rents until otherwise notified by Administrative Agent.  In no case
shall any failure, whether purposed or inadvertent, by Administrative Agent to
collect directly any such Rents constitute in any way a waiver, remission or
release of any of its rights under the Security Documents, nor shall any release
of any Rents by Administrative Agent to such Restricted Persons constitute a
waiver, remission, or release of any other Rents or of any rights of
Administrative Agent to collect other Rents thereafter.

      Section 6.20.  Operating Practices.  Each Restricted Person shall operate
                     -------------------
its business in a manner that is consistent with the policies and procedures
approved by the board of directors of General Partner and in effect on, and
delivered to Administrative Agent and Lenders prior to, the date hereof, and
revisions thereto referred to in the following sentence.  Borrower shall review
such policies and procedures at least annually, and shall promptly recommend to
the board of directors of General Partner such revisions to such policies and
procedures as may be recommended by Restricted Persons' or, upon consultation
with Borrower and its consultants and at the request of Administrative Agent,
Administrative Agent's third party consultants, to remedy deficiencies in
internal controls, and Borrower shall promptly provide a report to Lenders
regarding such policies and procedures, including such policies and procedures
which the board of directors of General Partner could adopt and has adopted.

                                      63
<PAGE>

                       ARTICLE VII - Negative Covenants
                                     ------------------

     To conform with the terms and conditions under which each Lender is willing
to have credit outstanding to Borrower, and to induce each Lender to enter into
this Agreement and make the Loans, Plains MLP and Borrower covenant and agree
that until the full and final payment of the Obligations and the termination of
this Agreement, unless Majority Lenders, or all Lenders as required under
Section 10.1, have previously agreed otherwise:

     Section 7.1.  Indebtedness.  No Restricted Person will in any manner owe or
                   ------------
be liable for Indebtedness except:

     (a)  the Obligations;

     (b)  Indebtedness arising under Hedging Contracts (i) permitted under
Section 7.3 or (ii) consisting of options, swaps, collars and similar
instruments that relate to Petroleum Products and are either referred to in any
of clauses (i) - (iii) of Section 7.15(a) or permitted by Section 7.15(b) or
(c);

     (c)  Indebtedness of any Restricted Person owing to another Restricted
Person;

     (d)  Liabilities with respect to obligations to deliver Petroleum Products
or to render terminaling or storage services in consideration for advance
payments to a Restricted Person provided such delivery or rendering, as
applicable, is to be made within 60 days (or, as to liquefied petroleum gases,
within 365 days) after such payment;

     (e)  Indebtedness under the Revolver Agreement, provided that the principal
amount of loans and face amount of letters of credit thereunder at any one time
outstanding (excluding any exposure related to Hedging Contracts secured in
connection therewith) shall not exceed $630,000,000;

     (f)  guaranties by Plains MLP, Borrower or any Guarantor of trade payables
of any Restricted Person incurred and paid in the ordinary course of business on
ordinary trade terms;

     (g)  Indebtedness owing by Plains MLP or any other Restricted Person under
its senior unsecured privately placed or public term Indebtedness (and any
Indebtedness issued in exchange therefor), provided (1) such Indebtedness shall
not permit optional redemption by the issuer or mandatory redemption by any
holder thereof solely at the option of any such holder, nor any stated maturity,
in each case prior to the Maturity Date, (2) the indenture governing such
Indebtedness shall have no covenants or other requirements more onerous than the
Loan Documents, (3) the aggregate outstanding face amount of such Indebtedness
shall not exceed $400,000,000, (4) all of the net proceeds of such originally
issued Indebtedness shall be used to repay US Loans (as defined in the Revolver
Agreement) to Borrower outstanding under the Revolver Agreement as therein
provided, (5) upon the receipt of net proceeds from the original issuance of
such Indebtedness, the US Commitment (as defined in the Revolver Agreement)
under the Revolver Agreement shall be reduced (as provided in the Revolver
Agreement) by an

                                      64
<PAGE>

amount equal to (A) forty percent (40%) of the face amount of such Indebtedness,
if the aggregate face amount is less than $350,000,000, or (B) fifty percent
(50%) of the face amount of such Indebtedness, if the aggregate face amount of
such Indebtedness is equal to or greater than $350,000,000, and (6) both
immediately prior to and immediately following the consummation of such
offering, no Default or Event of Default shall have occurred and be continuing;
and

     (h)  other Indebtedness not to exceed in the aggregate in respect of all
Restricted Persons the principal amount of the Dollar Equivalent of $25,000,000
at any one time outstanding.

     Section 7.2.  Limitation on Liens.  No Restricted Person will create,
                   -------------------
assume or permit to exist (i) any Lien upon any Accounts, inventory, cash or
investment securities which constitute Collateral except (A) Permitted Inventory
Liens, (B) Liens created pursuant to the Security Documents, Liens created
pursuant to the Revolver Agreement, and Liens created pursuant to the "Security
Documents" (as such term is defined in the Existing Agreement), (C) statutory
Liens in respect of First Purchase Crude Payables, (D) Liens of the type
described in clause (e) below in connection with any Eligible Margin Deposit to
secure Hedging Contracts permitted under Section 7.1 with the broker that is the
holder of such Eligible Margin Deposit, (E) Liens of the type described in
clauses (a), (c) and (f) below, and (F) any other Liens expressly permitted to
encumber such Collateral under any Security Document covering such Collateral or
(ii) any Lien upon any of the properties or assets other than such Collateral
which it now owns or hereafter acquires except the following (Liens, to the
extent permitted by this Section, herein called "Permitted Liens"):

     (a)  Liens created pursuant to this Agreement or the Security Documents,
Liens existing on the date of this Agreement and listed in the Disclosure
Schedule, and Liens created pursuant to the Revolver Agreement or the "Security
Documents" as defined in the Revolver, subject to the terms of the Intercreditor
Agreement.

     (b)  Liens imposed by any governmental authority for taxes, assessments or
charges not yet due or the validity of which is being contested in good faith
and by appropriate proceedings, if necessary, for which adequate reserves are
maintained on the books of any Restricted Person  in accordance with GAAP;

     (c)  pledges or deposits of cash or securities under worker's compensation,
unemployment insurance or other social security legislation;

     (d)  carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlord's, or other like Liens (including, without limitation, Liens on
property of any Restricted Person in the possession of storage facilities,
pipelines or barges) arising in the ordinary course of business for amounts
which are not more than 60 days past due or the validity of which is being
contested in good faith and by appropriate proceedings, if necessary, and for
which adequate reserves are maintained on the books of any Restricted Person in
accordance with GAAP;

     (e)  Liens under or with respect to accounts with brokers or counterparties
with respect to Hedging Contracts consisting of cash, commodities or futures
contracts, options,

                                      65
<PAGE>

securities, instruments, and other like assets securing only Hedging Contracts
permitted under Section 7.1;

     (f)  deposits of cash or securities to secure the performance of bids,
trade contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;

     (g)  easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business and encumbrances consisting of
zoning restrictions, easements, licenses, restrictions on the use of real
property or minor imperfections in title thereto which, in the aggregate, are
not material in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the business of any Restricted Person;

     (h)  Liens in respect of operating leases and Capital Leases permitted
under Section 7.1;

     (i)  Liens upon any property or assets acquired after the date hereof by a
Restricted Person, each of which either (i) existed on such property or asset
before the time of its acquisition and was not created in anticipation thereof,
or (ii) was created solely for the purpose of securing Indebtedness
representing, or incurred to finance, refinance or refund, the cost (including
the cost of construction) of such property or asset; provided that no such Lien
shall extend to or cover any property or asset of a Restricted Person other than
the property or asset so acquired (or constructed) and the Indebtedness secured
thereby is permitted under Section 7.1(g) hereof; and any extension, renewal,
refinancing, refunding or replacement (or successive extensions, renewals,
refinancings, refundings or replacements), in whole or part, of the foregoing,
provided, however, that such Liens shall not cover or secure any additional
Indebtedness, obligations, property or asset;

     (j)  rights reserved to or vested in any governmental authority by the
terms of any right, power, franchise, grant, license or permit, or by any
provision of law, to revoke or terminate any such right, power, franchise,
grant, license or permit or to condemn or acquire by eminent domain or similar
process;

     (k)  rights reserved to or vested by Law in any governmental authority to
in any manner, control or regulate in any manner any of the properties of any
Restricted Person or the use thereof or the rights and interests of any
Restricted Person therein, in any manner under any and all Laws;

     (l)  rights reserved to the grantors of any properties of any Restricted
Person, and the restrictions, conditions, restrictive covenants and limitations,
in respect thereto, pursuant to the terms, conditions and provisions of any
rights-of-way agreements, contracts or other agreements therewith; and

                                      66
<PAGE>

     (m)  inchoate Liens in respect of pending litigation or with respect to a
judgment which has not resulted in an Event of Default under Section 8.1.

     Section 7.3.  Hedging Contracts.  No Restricted Person will be a party to
                   -----------------
or in any manner be liable on any Hedging Contract, except:

     (a)  Hedging Contracts entered into by a Restricted Person with the purpose
and effect of fixing interest rates on a principal amount of indebtedness of
such Restricted Person that is accruing interest at a variable rate, provided
that (i) the aggregate notional amount of such contracts never exceeds one
hundred percent (100%) of the anticipated outstanding principal balance of the
indebtedness to be hedged by such contracts or an average of such principal
balances calculated using a generally accepted method of matching interest swap
contracts to declining principal balances, (ii) the floating rate index of each
such contract generally matches the index used to determine the floating rates
of interest on the corresponding indebtedness to be hedged by such contract and
(iii) each such contract is with a counterparty or has a guarantor of the
obligation of the counterparty who (unless such counterparty is a Lender, a
"Lender" as such term is defined in the Revolver Agreement, or an Affiliate of
any Lender or "Lender" at the time such contract is entered into) at the time
the contract is made has long-term unsecured and unenhanced debt obligations
rated A or A2 or better, respectively, by either Rating Agency or is otherwise
acceptable to Majority Lenders.

     (b)  Hedging Contracts entered into by a Canadian Subsidiary (or by a
Restricted Person on behalf of a Canadian Subsidiary) with the purpose and
effect of fixing foreign exchange rates on its reasonably anticipated net
revenues, and not for speculative purposes, provided that (i) no such contract
fixes an exchange rate for a term of more than 5 years, (ii) the aggregate
notional amount of such contracts (determined, in the case of contracts that are
not settled on a monthly basis, by a monthly proration acceptable to
Administrative Agent) for any single month never exceeds (A) ninety percent
(90%) of the reasonably anticipated net revenues to be hedged by such contracts
plus (B) one hundred percent (100%) of the anticipated outstanding principal
balance of the indebtedness to be hedged by such contracts, and (iii) each such
contract is with a counterparty or has a guarantor of the obligation of the
counterparty who (unless such counterparty is a Lender, a "Lender" as such term
is defined in the Revolver Agreement, or an Affiliate of a Lender or "Lender" at
the time such contract is entered into) at the time the contract is made has
long-term unsecured and unenhanced debt obligations rated A or A2 or better,
respectively, by either Rating Agency or is otherwise acceptable to Majority
Lenders.

     (c)  Hedging Contracts relating to heating oil used to hedge price risk for
fuel requirements of the truck fleet of a Restricted Person in the ordinary
course of business.

     Section 7.4.  Limitation on Mergers, Issuances of Securities.  Except as
                   ----------------------------------------------
expressly provided in this section, no Restricted Person will (a) enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), (b) acquire any
business or property from, or capital stock of, or be a party to any acquisition
of, any Person except for purchases of inventory and other property to be sold
or used

                                      67
<PAGE>

in the ordinary course of business and Investments permitted under Section 7.7
hereof or (c) sell, transfer, lease, exchange, alienate or otherwise dispose of,
in one transaction or a series of transactions, any part of its business or
property, whether now owned or hereafter acquired, except for sales or transfers
not prohibited by under Section 7.5 hereof. Any Person, other than Borrower,
that is a Subsidiary of a Restricted Person may, however, be merged into or
consolidated with (i) another Subsidiary of such Restricted Person, so long as a
Guarantor is the surviving business entity, or (ii such Restricted Person, so
long as such Restricted Person is the surviving business entity. Plains MLP will
not issue any securities other than (i) limited partnership interests and any
options or warrants giving the holders thereof only the right to acquire such
interests, (ii) general or subordinate partnership interests issued to Resources
or a Wholly Owned Subsidiary of Resources and (iii) debt securities permitted by
Section 7.1(g). No Subsidiary of Plains MLP will issue any additional shares of
its capital stock or other securities or any options, warrants or other rights
to acquire such additional shares or other securities except a direct Subsidiary
of a Restricted Person may issue additional shares or other securities to such
Restricted Person, to Plains MLP or to General Partner so long as such
Subsidiary is a Wholly Owned Subsidiary of Plains MLP after giving effect
thereto. No Subsidiary of Borrower which is a partnership will allow any
diminution of Borrower's interest (direct or indirect) therein. Notwithstanding
the foregoing, Plains Marketing Canada, L.P. may issue limited partner interests
to CanPet Energy Group (USA), Inc. or CanPet Energy Group Inc. to effect the
consummation of the CanPet Acquisition as set forth in the CanPet Acquisition
Documents, provided, such limited partner interests shall:
           --------

          (i)   pay no cash dividend nor entitle the holder thereof to any cash
     distribution, except upon dissolution (provided that the foregoing shall
     not prevent the accrual of any such dividends or distributions);

          (ii)  not entitle the holder thereof to any right to manage or control
     Plains Marketing Canada, L.P. or vote with respect thereto; and

          (iii) not be redeemable or exchangeable by the holder thereof for cash
     or callable or subject to a put option for cash at the option of any such
     holder.

     Section 7.5.  Limitation on Sales of Property. No Restricted Person will
                   -------------------------------
sell, transfer, lease, exchange, alienate or dispose of any Collateral or any of
its material assets or properties or any material interest therein except:

     (a)  equipment which is worthless or obsolete or no longer necessary or
useful to the proper conduct of its business or which is replaced by equipment
of equal suitability and value;

     (b)  inventory (including pipeline linefill) which is sold in the ordinary
course of business on ordinary trade terms;

     (c)  in other property which is sold for fair consideration not in the
aggregate in excess of the Dollar Equivalent of $10,000,000 in any Fiscal Year,
the sale of which will not materially

                                      68
<PAGE>

impair or diminish the value of the Collateral or any Restricted Person's
financial condition, business or operations; and

     (d)  sales or transfers, subject to the Security Documents, by a Person
(other than Borrower) that is a Subsidiary of a Restricted Person to such
Restricted Person or to a Wholly Owned Subsidiary of such Restricted Person that
is a Guarantor.

No Restricted Person will sell, transfer or otherwise dispose of capital stock
of or interest in any of its Subsidiaries except to Plains MLP or a Wholly Owned
Subsidiary of Plains MLP; provided, in the event any limited partner interests
issued by Plains Marketing Canada, L.P. to CanPet Energy Group (USA), Inc. or
CanPet Energy Group Inc. pursuant to Section 7.4 are exchanged for units issued
by Plains MLP, Lenders hereby consent to the contribution by Plains MLP to
Borrower of any and all such partnership interests.  No Restricted Person will
discount, sell, pledge or assign any notes payable to it, accounts receivable or
future income.  So long as no Default then exists, Administrative Agent will, at
Borrower's request and expense, execute a release, satisfactory to Borrower and
Administrative Agent, of any Collateral so sold, transferred, leased, exchanged,
alienated or disposed of pursuant to the clause (a) or (c) of this Section.

     Section 7.6.  Limitation on Dividends and Redemptions. No Restricted Person
                   ---------------------------------------
will declare or pay any dividends on, or make any other distribution in respect
of, any class of its capital stock or any partnership, limited liability company
or other interest in it, nor will any Restricted Person directly or indirectly
make any capital contribution of any nature to or purchase, redeem, acquire or
retire any shares of the capital stock of or partnership or limited liability
company interests in any Restricted Person (whether such interests are now or
hereafter issued, outstanding or created), or cause or permit any reduction or
retirement of the capital stock of any Restricted Person, while any Loan or
commitment hereunder is outstanding. Notwithstanding the foregoing, but subject
to Section 7.5, (i) Subsidiaries of Plains MLP, Borrower, or of any Guarantor
shall not be restricted, directly or indirectly, from declaring and paying
dividends or making any other distributions to Plains MLP, Borrower, or any such
Guarantor, respectively, and to General Partner pursuant to and in accordance
with such Subsidiary's partnership agreement, (ii) no Restricted Person shall be
restricted from making capital contributions of any nature to a Wholly Owned
Subsidiary of such Restricted Person that is a Guarantor, and (iii) so long as
no Default or Event of Default has occurred and is continuing or would result
therefrom, Plains MLP shall not be restricted from (A) distributing Available
Cash (other than amounts required to be applied as otherwise required in any
Loan Document) to its partners in accordance with the Partnership Agreement or
(B) purchasing its partnership units on the open market in connection with the
Incentive and Option Plans.

     Section 7.7.  Limitation on Investments and New Businesses.  No Restricted
                   --------------------------------------------
Person will (a) make any expenditure or commitment or incur any obligation or
enter into or engage in any transaction except in the ordinary course of
business, (b) engage directly or indirectly in any business or conduct any
operations except in connection with or incidental to its present businesses and
operations, (c) make any acquisitions of or capital contributions to or other
Investments in any Person, other than Permitted Investments and Permitted
Acquisitions, or (d)

                                      69
<PAGE>

make any acquisitions of properties other than Permitted Acquisitions. All
transactions permitted under the foregoing subsections (a) through (d),
inclusive, are subject to Section 7.5.

     Section 7.8.  Limitation on Credit Extensions.  Except for Permitted
                   -------------------------------
Investments and Hedging Contracts permitted under Section 7.3(b) hereof, no
Restricted Person will extend credit, make advances or make loans other than
normal and prudent extensions of credit to customers buying goods and services
in the ordinary course of business or to another Restricted Person in the
ordinary course of business, which extensions shall not be for longer periods
than those extended by similar businesses operated in a normal and prudent
manner.

     Section 7.9.  Transactions with Affiliates. No Restricted Person will
                   ----------------------------
engage in any material transaction with any of its Affiliates except: (a)
transactions among Plains MLP and Wholly Owned Subsidiaries of Plains MLP,
subject to the other provisions of this Agreement, (b) transactions governed by
the Affiliate Agreements, and (c) transactions entered into in the ordinary
course of business of such Restricted Person on terms which are no less
favorable to such Restricted Person than those which would have been obtainable
at the time in arm's-length transactions with Persons other than such
Affiliates.

     Section 7.10.  Prohibited  Contracts.  Except as expressly provided for in
                    ---------------------
the Loan Documents and as described in the Disclosure Schedule, no Restricted
Person will, directly or indirectly, enter into, create, or otherwise allow to
exist any contract or other consensual restriction on the ability of any
Subsidiary of  Plains MLP, including but not limited to Borrower and any
Subsidiary of Borrower to: (a) pay dividends or make other distributions to
Borrower or Plains MLP, (b) redeem equity interests held in it by Borrower or
Plains MLP, (c) repay loans and other indebtedness owing by it to Borrower or
Plains MLP, or (d) transfer any of its assets to Borrower or Plains MLP.  No
Restricted Person will enter into any "take-or-pay" contract or other contract
or arrangement for the purchase of goods or services which obligates it to pay
for such goods or service regardless of whether they are delivered or furnished
to it other than contracts for pipeline capacity or for services in either case
reasonably anticipated to be utilized in the ordinary course of business.  No
Restricted Persons will amend, modify or release any of the Affiliate
Agreements.  No Restricted Person will amend or permit any amendment to any
contract or lease which releases, qualifies, limits, makes contingent or
otherwise detrimentally affects the rights and benefits of Administrative Agent
or any Lender under or acquired pursuant to any Security Documents.  No ERISA
Affiliate will incur any obligation to contribute to any "multiemployer plan" as
defined in Section 4001 of ERISA that is subject to Title IV of ERISA.

     Section 7.11.  Current Ratio.  The ratio of (i) the sum of Plains MLP's
                    -------------
Consolidated current assets plus the Revolver Availability to (ii) Plains MLP's
Consolidated current liabilities will never be less than 1.0 to 1.0.  For
purposes of this section, Plains MLP's Consolidated current liabilities will be
calculated without including (a) any payments of principal on the Notes or on
the notes or banker's acceptances under the Revolver Agreement which are
required to be repaid within one year from the time of calculation and (b) all
Liabilities arising under permitted Hedging Contracts.

                                      70
<PAGE>

      Section 7.12.  Debt Coverage Ratio.  (a) At the end of any Fiscal Quarter,
                     -------------------
(b) on any date on which General Partner declares a distribution permitted under
Section 7.6 and (c) on the date of any Permitted Acquisition, both immediately
prior to and after giving effect to the consummation thereof, the Debt Coverage
Ratio will not be greater than:

          (A) 4.75 to 1.0, in the case of any determination during the period
     from the date hereof through and including September 29, 2001,

          (B) 4.50 to 1.0, in the case of any determination from September 30,
     2001 through and including June 29, 2002,

          (C) 4.25 to 1.0, in the case of any determination from June 30, 2002
     through and including December 30, 2002, and

          (D) 4.00 to 1.0, in the case of any determination thereafter.

As used herein, "Debt Coverage Ratio" means the ratio of (a) Consolidated Funded
                 -------------------
Indebtedness to (b) Consolidated EBITDA for the four Fiscal Quarter period (or
other period specified below) most recently ended prior to the date of
determination for which financial statements contemplated by Section 6.2(a) or
(b) are available to Borrower; provided, for purposes of this Section 7.12, if,
                               --------
since the beginning of the four Fiscal Quarter period ending on the date for
which Consolidated EBITDA is determined, any Restricted Person shall have made
any asset disposition or acquisition, shall have consolidated or merged with or
into any Person (other than another Restricted Person), or shall have made any
disposition or acquisition of a Restricted Person, Consolidated EBITDA shall be
calculated giving pro forma effect thereto as if the disposition, acquisition,
consolidation or merger had occurred on the first day of such period. Such pro
forma effect shall include adjustments with respect to management fees
previously distributed with respect to the assets subject to the CanPet
Acquisition and the acquisition of the remaining 50% of the Manito Pipeline in
mid calendar year 2000, and shall otherwise be determined (i) in good faith by
the chief financial officer of Borrower, and (ii) without giving effect to any
anticipated or proposed change in operations, revenues, expenses or other items
included in the computation of Consolidated EBITDA, except with the consent of
Majority Lenders.

      Section 7.13.  Interest Coverage Ratio.  The ratio of (a) Consolidated
                     -----------------------
EBITDA to (b) Interest Expense for each four Fiscal Quarter period ending on or
after March 31, 2001 will not be less than 2.75 to 1.0.

      Section 7.14.  Debt to Capital Ratio.  The ratio of (a) all Consolidated
                     ---------------------
Funded Indebtedness to (b) the sum of Consolidated Funded Indebtedness plus
Consolidated Net Worth will never be greater than:

          (i)   prior to December 31, 2002, 0.73 to 1.0 at any time; and

          (ii)  from and after December 31, 2002, 0.65 to 1.0 at any time.

                                      71
<PAGE>

     Section 7.15.  Open Position; Certain Permitted Financial Instruments;
                    -------------------------------------------------------
NYMEX Transactions.
------------------

     (a)  Open Position.  No Restricted Person shall at any time have any Open
          -------------
Positions; provided, however, that a Restricted Person may have:

          (i)  Physical inventories of Petroleum Products (A) consisting of tank
     bottoms and pipeline linefill requirements, in each case classified as a
     long-term asset, (B) working inventory of up to 1,400,000 barrels in the
     aggregate at any time, (C) excess inventory of up to 200,000 barrels in the
     aggregate at any time resulting from crude gathering receipts in excess of
     scheduled quantities, provided that such Restricted Person shall establish
     an Offsetting Position with respect to such quantities within five business
     days following identification of such inventory, but in any event not later
     than the 20/th/ day following the month in which such excess volumes were
     received and (D) Hedged Eligible Inventory.

          (ii) Floating Price Contracts to purchase or sell Petroleum Products
     in the Current Trading Month; provided that, such Floating Price Contracts
     either (A) have an Offsetting Position by the 26th day of the month
     preceding the month of receipt or delivery, or (B) are scheduled to be
     stored at a Plains Terminal or in pipelines Currently Approved by Majority
     Lenders and are hedged in the delivery month with NYMEX contracts; and
     further provided that such Floating Price Contracts relating to the sale of
     Petroleum Products for the Current Trading Month do not exceed purchases by
     more than 15,000 barrels per day.

          (iii) Floating Price Contracts to purchase or sell Petroleum Products
     to be received or delivered after the Current Trading Month, but within the
     twelve months following the Current Trading Month provided that (A) such
     contracts are at the then market price and (B) at any point in time the sum
     of (x) net realized losses relating to such contracts within the preceding
     twelve months (excluding Physically Covered Near Term Floating Price
     Contract Losses) and (y) mark to market exposure relating to such contracts
     (excluding aggregate mark to market exposure of up to the Dollar Equivalent
     of $20,000,000 relating to Near Term Floating Price Contracts) does not, at
     any time, exceed the Dollar Equivalent of $5,000,000.

As used herein, "Current Trading Month" means (i) with respect to the first
                 ---------------------
twenty-five days of any calendar month, the next following calendar month and
(ii) with respect to the period from the 26/th/ day of a calendar month through
the last day of such month, the second calendar month next following such month
(for example, for the period from January 26/th/ through February 25/th/, the
Current Trading Month is March), "Floating Price Contract"  means (i) a purchase
                                  -----------------------
or sale contract based upon a daily index such as a posted price or NYMEX price
from time to time in effect during the delivery month and (ii) a NYMEX spread
transaction in which the length of time between the offsetting purchase and sale
obligations do not exceed twelve months, "Physically Covered Near Term Floating
                                          -------------------------------------
Price Contract Losses" means net realized losses incurred in the Current Trading
---------------------
Month with respect to Near Term Floating Price Contracts entered into prior to
such Current Trading Month, for which the Company expects to have an

                                      72
<PAGE>

offsetting physical position in the delivery month originally specified in such
Near Term Floating Price Contract, and "Near Term Floating Price Contract" means
                                        ---------------------------------
(A) Floating Price Contracts within the First Trading Month following the
Current Trading Month, covering volumes up to 60% of projected crude gathering
receipts for crude under 30-day evergreen floating price contracts for the First
Trading Month; and (B) Floating Price Contracts within the Second Trading Month
following the Current Trading Month, covering volumes up to 40% of projected
crude gathering receipts for crude under 30-day evergreen floating price
contracts for the Second Trading Month. Using the same example as that used for
Current Trading Month, the First Trading Month following the Current Trading
Month for the same period is April and the Second Trading Month following the
Current Trading Month for the same period is May.

     (b)  Certain Permitted Financial Instruments. No Restricted Person will
          ---------------------------------------
write (i.e. sell) or otherwise participate in any swap, collar or similar
agreement relating to Petroleum Products, or write (i.e. sell) any option,
unless, with respect thereto, (i) such Restricted Person has an Offsetting
Position in crude volumes for which there is no basis risk between such
financial instrument and such Offsetting Position and (ii) the counter-party (or
guarantor to the obligations of such counter-party) at the time such financial
instrument is made (A) has one or more long term unsecured and unenhanced debt
obligations rated A or A2 or better, respectively, by either Rating Agency, or
(B) is a Lender, a "Lender" as such term is defined in the Revolver Agreement,
or an Affiliate of a Lender or "Lender", or (C) is listed in the Disclosure
Schedule.

     (c)  NYMEX Transactions.  No Restricted Person will enter in to any NYMEX
          ------------------
contracts that are time-spread positions to each other, except (i) in the case
where the sale obligation is in the future month of the purchase obligation,
where both (A) the length of time between the purchase and sale contracts does
not exceed thirty-six months and (B) the volume does not in the aggregate exceed
the lesser of 3,000,000 barrels or 30% of the Plains Terminals' storage capacity
and (ii) in the case where the purchase obligation is in the future month of the
sale obligation, where the length of time between the sale and purchase
contracts does not exceed twelve months.  No Restricted Person will convert a
NYMEX position to a physical position by way of an "exchange for physicals" or
an "alternative delivery procedure"unless the credit extended in connection with
such physical position would comply with the credit requirements of the
definition of "Approved Eligible Receivables".

     Section 7.16.  Redelivery of Borrowing Base Report.  If any contract gives
                    -----------------------------------
rise to an "Eligible Receivable" that is reflected in a Borrowing Base Report
representing the obligation to deliver Petroleum Products in the month next
succeeding the month in which the Borrowing Base Report is delivered, and such
contract is modified, sold or exchanged in any way that would negatively affect
the Borrowing Base, then Borrower shall immediately (i) deliver to
Administrative Agent a revised Borrowing Base Report satisfactory to
Administrative Agent, which Administrative Agent shall thereafter furnish to
Lenders, and (ii) make any prepayment as may be required under Section 2.6
resulting from such reduced Borrowing Base.

     Section 7.17.  3794865 Canada Ltd.  Notwithstanding anything contained
                    -------------------
herein or in any other Loan Document, 3794865 Canada Ltd., a corporation
organized under Canadian federal law and a wholly-owned Subsidiary of Term
Borrower, shall not: (a) own any assets, other than

                                      73
<PAGE>

the Certificate of Public Convenience and Need issued by the National Energy
Board of Canada with respect to the Wascana pipeline (the "Certificate"), (b)
owe or be liable for any Indebtedness, (c) create, assume or permit to exist any
Lien upon any of the properties or assets which it now owns or hereafter
acquires, (d) sell, transfer, lease, exchange, alienate or dispose of the
Certificate or any rights thereunder or associated therewith, except to Term
Borrower or Canadian Revolver Borrower, (e) engage in any other business
activities of any kind, other than entering into an operating agreement with
Canadian Revolver Borrower with respect to the operation of the Wascana pipeline
(the "Wascana Operating Agreement") and such other activities as may be
necessary in order to maintain and preserve the Certificate and its rights and
franchises thereunder in full force and effect. Promptly upon any change in
applicable Law resulting in Term Borrower being able to legally hold the
Certificate, Term Borrower shall cause 3794865 Canada Ltd. to apply with the
appropriate Tribunal for the transfer of the Certificate to Term Borrower. No
Restricted Person shall make any Investment in 3794865 Canada Ltd. or enter into
any transaction therewith, other than the Wascana Operating Agreement, the
transfer of the Certificate to Term Borrower, or such other transaction as may
be necessary in order to maintain and preserve the Certificate and the rights
and franchises thereunder in full force and effect.

                 ARTICLE VIII - Events of Default and Remedies
                                ------------------------------

     Section 8.1.  Events of Default.  Each of the following events constitutes
                   -----------------
an Event of Default under this Agreement:

     (a)  Any Restricted Person fails to pay the principal component of any Loan
or any reimbursement obligation with respect to any Letter of Credit when due
and payable, whether at a date for the payment of a fixed installment or as a
contingent or other payment becomes due and payable or as a result of
acceleration or otherwise;

     (b)  Any Restricted Person fails to pay any Obligation (other than the
Obligations in subsection (a) above) when due and payable, whether at a date for
the payment of a fixed installment or as a contingent or other payment becomes
due and payable or as a result of acceleration or otherwise, within three
Business Days after the same becomes due;

     (c)  Any event defined as a "default" or "event of default" in any Loan
Document occurs, and the same is not remedied within the applicable period of
grace (if any) provided in such Loan Document;

     (d)  Any Restricted Person fails to duly observe, perform or comply with
any covenant, agreement or provision of Section 6.4 or Article VII;

     (e)  Any Restricted Person fails (other than as referred to in subsections
(a), (b), (c) or (d) above) to duly observe, perform or comply with any
covenant, agreement, condition or provision of any Loan Document to which it is
a party, and such failure remains unremedied for a period of thirty (30) days
after notice of such failure is given by Administrative Agent to Borrower;

                                      74
<PAGE>

     (f)  Any representation or warranty previously, presently or hereafter made
in writing by or on behalf of any Restricted Person in connection with any Loan
Document shall prove to have been false or incorrect in any material respect on
any date on or as of which made, or any Loan Document at any time ceases to be
valid, binding and enforceable as warranted in Section 5.5 for any reason other
than its release or subordination by Administrative Agent;

     (g)  Any Restricted Person shall default in the payment when due of any
principal of or interest on any of its other Indebtedness in excess of the
Dollar Equivalent of $2,500,000 in the aggregate (other than Indebtedness the
validity of which is being contested in good faith by appropriate proceedings
and for which adequate reserves with respect thereto are maintained on the books
of such Restricted Person in accordance with GAAP), or any event specified in
any note, agreement, indenture or other document evidencing or relating to any
such Indebtedness shall occur if the effect of such event is to cause, or (with
the giving of any notice or the lapse of time or both) to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such Indebtedness to become due, or to be prepaid in full
(whether by redemption, purchase, offer to purchase or otherwise), prior to its
stated maturity;

     (h)  Either (i) any "accumulated funding deficiency" (as defined in Section
412(a) of the Code) in excess of $500,000 exists with respect to any ERISA Plan,
whether or not waived by the Secretary of the Treasury or his delegate, or (ii
any Termination Event occurs with respect to any ERISA Plan and the then current
value of such ERISA Plan's benefit liabilities exceeds the then current value of
such ERISA Plan's assets available for the payment of such benefit liabilities
by more than $500,000 (or in the case of a Termination Event involving the
withdrawal of a substantial employer, the withdrawing employer's proportionate
share of such excess exceeds such amount);

     (i)  General Partner or any Restricted Person:

             (i)  has entered against it of a judgment, decree or order for
     relief by a Tribunal of competent jurisdiction in an involuntary proceeding
     commenced under any applicable bankruptcy, insolvency or other similar Law
     of any jurisdiction now or hereafter in effect, including the federal
     Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada) or the
     Companies' Creditors Arrangement Act (Canada), as from time to time
     amended, or has any such proceeding commenced against it, in each case,
     which remains undismissed for a period of sixty days; or

             (ii) commences a voluntary case under any applicable bankruptcy,
     insolvency or similar Law now or hereafter in effect, including the federal
     Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada) or the
     Companies' Creditors Arrangement Act (Canada), as from time to time
     amended; or applies for or consents to the entry of an order for relief in
     an involuntary case under any such Law; or makes a general assignment for
     the benefit of creditors; or is generally unable to pay (or admits in
     writing its inability to so pay) its debts as such debts become due; or
     takes corporate or other action to authorize any of the foregoing; or

                                      75
<PAGE>

             (iii)  has entered against it the appointment of or taking
     possession by a receiver, liquidator, assignee, custodian, trustee,
     sequestrator or similar official of all or a substantial part of its assets
     in a proceeding brought against or initiated by it, and such appointment or
     taking possession is neither made ineffective nor discharged within sixty
     days after the making thereof, or such appointment or taking possession is
     at any time consented to, requested by, or acquiesced to by it; or

             (iv)   has entered against it the appointment of or taking
     possession by a receiver, liquidator, assignee, custodian, trustee,
     sequestrator or similar official of any part of the Collateral of a value
     in excess of the Dollar Equivalent of $2,500,000 in a proceeding brought
     against or initiated by it, and such appointment or taking possession is
     neither made ineffective nor discharged within sixty days after the making
     thereof, or such appointment or taking possession is at any time consented
     to, requested by, or acquiesced to by it; or

             (v)    has entered against it a final judgment for the payment of
     money in excess of the Dollar Equivalent of $2,500,000 (in each case not
     covered by insurance satisfactory to Administrative Agent in its
     discretion), unless the same is stayed or discharged within thirty days
     after the date of entry thereof or an appeal or appropriate proceeding for
     review thereof is taken within such period and a stay of execution pending
     such appeal is obtained; or

             (vi)   suffers a writ or warrant of attachment or any similar
     process to be issued by any Tribunal against all or any substantial part of
     its assets or any part of the Collateral of a value in excess of the Dollar
     Equivalent of $2,500,000, and such writ or warrant of attachment or any
     similar process is not stayed or released within thirty days after the
     entry or levy thereof or after any stay is vacated or set aside;

     (j)  General Partner shall default in the payment when due of any principal
of or interest on any of its Indebtedness in excess of $1,000,000 in the
aggregate, or any event specified in any note, agreement, indenture or other
document evidencing or relating to any such Indebtedness shall occur if the
effect of such event is to cause, or (with the giving of any notice or the lapse
of time or both) to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause, such
Indebtedness to become due, or to be prepaid in full (whether by redemption,
purchase, offer to purchase or otherwise), prior to its stated maturity;

     (k)  Any Change in Control occurs; or

     (l)  Any Material Market Open Position Loss occurs.

Upon the occurrence of an Event of Default described in subsection (i)(i),
(i)(ii) or (i)(iii) of this section with respect to Borrower or Plains MLP, all
of the Obligations shall thereupon be immediately due and payable, without
demand, presentment, notice of demand or of dishonor and nonpayment, protest,
notice of protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly

                                      76
<PAGE>

waived by Borrower and each Restricted Person who at any time ratifies or
approves this Agreement. Upon any such acceleration, any obligation of any
Lender to make any further Loans and any obligation of LC Issuer to issue
Letters of Credit hereunder shall be permanently terminated. During the
continuance of any other Event of Default, Administrative Agent at any time and
from time to time may (and upon written instructions from Majority Lenders,
Administrative Agent shall), without notice to Borrower or any other Restricted
Person, do either or both of the following: (1) terminate any obligation of
Lenders to make Loans hereunder and any obligation of LC Issuer to issue Letters
of Credit hereunder, and (2) declare any or all of the Obligations immediately
due and payable, and all such Obligations shall thereupon be immediately due and
payable, without demand, presentment, notice of demand or of dishonor and
nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of any
kind, all of which are hereby expressly waived by Borrower and each Restricted
Person who at any time ratifies or approves this Agreement.

      Section 8.2.  Remedies.  If any Default shall occur and be continuing,
                    --------
each Lender Party may protect and enforce its rights under the Loan Documents by
any appropriate proceedings, including proceedings for specific performance of
any covenant or agreement contained in any Loan Document, and each Lender Party
may enforce the payment of any Obligations due it or enforce any other legal or
equitable right which it may have.  All rights, remedies and powers conferred
upon Lender Parties under the Loan Documents shall be deemed cumulative and not
exclusive of any other rights, remedies or powers available under the Loan
Documents or at Law or in equity.

                       ARTICLE IX - Administrative Agent
                                    --------------------

      Section 9.1.  Appointment and Authority.  Each Lender Party hereby
                    -------------------------
irrevocably authorizes Administrative Agent, and Administrative Agent hereby
undertakes, to receive payments of principal, interest and other amounts due
hereunder as specified herein and to take all other actions and to exercise such
powers under the Loan Documents as are specifically delegated to Administrative
Agent by the terms hereof or thereof, together with all other powers reasonably
incidental thereto. The relationship of Administrative Agent to the other Lender
Parties is only that of one commercial lender acting as administrative agent for
others, and nothing in the Loan Documents shall be construed to constitute
Administrative Agent a trustee or other fiduciary for any Lender Party or any
holder of any participation in a Note nor to impose on Administrative Agent
duties and obligations other than those expressly provided for in the Loan
Documents. With respect to any matters not expressly provided for in the Loan
Documents and any matters which the Loan Documents place within the discretion
of Administrative Agent, Administrative Agent shall not be required to exercise
any discretion or take any action, and it may request instructions from Lenders
with respect to any such matter, in which case it shall be required to act or to
refrain from acting (and shall be fully protected and free from liability to all
Lender Parties in so acting or refraining from acting) upon the instructions of
Majority Lenders (including itself), provided, however, that Administrative
Agent shall not be required to take any action which exposes it to a risk of
personal liability that it considers unreasonable or which is contrary to the
Loan Documents or to applicable Law. Upon receipt by Administrative Agent

                                      77
<PAGE>

from Borrower of any communication calling for action on the part of Lenders or
upon notice from Borrower or any Lender to Administrative Agent of any Default
or Event of Default, Administrative Agent shall promptly notify each other
Lender thereof. Each Lender hereby expressly authorizes Administrative Agent, on
behalf of such Lender, to execute and deliver the Intercreditor Agreement in the
form attached hereto as Exhibit K.

      Section 9.2.  Exculpation, Administrative Agent's Reliance, Etc.  Neither
                    -------------------------------------------------
Administrative Agent nor any of its directors, officers, agents, attorneys, or
employees shall be liable for any action taken or omitted to be taken by any of
them under or in connection with the Loan Documents, INCLUDING THEIR NEGLIGENCE
OF ANY KIND, except that each shall be liable for its own gross negligence or
willful misconduct.  Without limiting the generality of the foregoing,
Administrative Agent (a) may treat the payee of any Note as the holder thereof
until Administrative Agent receives written notice of the assignment or transfer
thereof in accordance with this Agreement, signed by such payee and in form
satisfactory to Administrative Agent; (b) may consult with legal counsel
(including counsel for Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any other
Lender Party and shall not be responsible to any other Lender Party for any
statements, warranties or representations made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of the
Loan Documents on the part of any Restricted Person or to inspect the property
(including the books and records) of any Restricted Person; (e) shall not be
responsible to any other Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Loan Document or any
instrument or document furnished in connection therewith; (f) may rely upon the
representations and warranties of each Restricted Person or Lender Party in
exercising its powers hereunder; and (g) shall incur no liability under or in
respect of the Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (including any facsimile, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper Person or Persons.

      Section 9.3.  Credit Decisions.  Each Lender Party acknowledges that it
                    ----------------
has, independently and without reliance upon any other Lender Party, made its
own analysis of Borrower and the transactions contemplated hereby and its own
independent decision to enter into this Agreement and the other Loan Documents.
Each Lender Party also acknowledges that it will, independently and without
reliance upon any other Lender Party and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents.

      Section 9.4.  Indemnification.  EACH LENDER AGREES TO INDEMNIFY
                    ---------------
ADMINISTRATIVE AGENT (TO THE EXTENT NOT REIMBURSED BY BORROWER WITHIN TEN (10)
DAYS AFTER DEMAND) FROM AND AGAINST SUCH LENDER'S PERCENTAGE SHARE OF ANY AND
ALL LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES, PENALTIES, FINES,
ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES OR DISBURSEMENTS
(INCLUDING REASONABLE FEES OF ATTORNEYS, ACCOUNTANTS, EXPERTS AND ADVISORS) OF
ANY KIND OR

                                      78
<PAGE>

NATURE WHATSOEVER (IN THIS SECTION COLLECTIVELY CALLED "LIABILITIES AND COSTS")
WHICH TO ANY EXTENT (IN WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST ADMINISTRATIVE AGENT GROWING OUT OF, RESULTING FROM OR IN ANY
OTHER WAY ASSOCIATED WITH ANY OF THE COLLATERAL, THE LOAN DOCUMENTS AND THE
TRANSACTIONS AND EVENTS (INCLUDING THE ENFORCEMENT THEREOF) AT ANY TIME
ASSOCIATED THEREWITH OR CONTEMPLATED THEREIN (WHETHER ARISING IN CONTRACT OR IN
TORT OR OTHERWISE AND INCLUDING ANY VIOLATION OR NONCOMPLIANCE WITH ANY
ENVIRONMENTAL LAWS BY ANY PERSON OR ANY LIABILITIES OR DUTIES OF ANY PERSON WITH
RESPECT TO HAZARDOUS MATERIALS FOUND IN OR RELEASED INTO THE ENVIRONMENT).

THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY ADMINISTRATIVE AGENT,

provided only that no Lender shall be obligated under this section to indemnify
Administrative Agent for that portion, if any, of any liabilities and costs
which is proximately caused by Administrative Agent's own individual gross
negligence or willful misconduct, as determined in a final judgment.  Cumulative
of the foregoing, each Lender agrees to reimburse Administrative Agent promptly
upon demand for such Lender's Percentage Share of any costs and expenses to be
paid to Administrative Agent by Borrower under Section 10.4(a) to the extent
that Administrative Agent is not timely reimbursed for such expenses by Borrower
as provided in such section.  As used in this section the term "Administrative
Agent" shall refer not only to the Person designated as such in Section 1.1 but
also to each director, officer, agent, attorney, employee, representative and
Affiliate of such Person.

      Section 9.5.  Rights as Lender.  In its capacity as a Lender,
                    ----------------
Administrative Agent shall have the same rights and obligations as any Lender
and may exercise such rights as though it were not Administrative Agent.
Administrative Agent may accept deposits from, lend money to, act as trustee
under indentures of, and generally engage in any kind of business with any
Restricted Person or their Affiliates, all as if it were not Administrative
Agent hereunder and without any duty to account therefor to any other Lender.

      Section 9.6.  Sharing of Set-Offs and Other Payments.  Each Lender Party
                    --------------------------------------
agrees that if it shall, whether through the exercise of rights under Security
Documents or rights of banker's lien, set off, or counterclaim against Borrower
or otherwise, obtain payment of a portion of the aggregate Obligations owed to
it which, taking into account all distributions made by Administrative Agent
under Section 3.1, causes such Lender Party to have received more than it would
have received had such payment been received by Administrative Agent and
distributed pursuant to Section 3.1, then (a) it shall be deemed to have
simultaneously purchased and shall be obligated to purchase interests in the
Obligations as necessary to cause all Lender Parties to share all payments as
provided for in Section 3.1, and (b) such other adjustments shall be made from
time to time as shall be equitable to ensure that Administrative Agent and all
Lender Parties

                                      79
<PAGE>

share all payments of Obligations as provided in Section 3.1; provided, however,
that nothing herein contained shall in any way affect the right of any Lender
Party to obtain payment (whether by exercise of rights of banker's lien, set-off
or counterclaim or otherwise) of indebtedness other than the Obligations.
Borrower expressly consents to the foregoing arrangements and agrees that any
holder of any such interest or other participation in the Obligations, whether
or not acquired pursuant to the foregoing arrangements, may to the fullest
extent permitted by Law and, subject to the provisions of Section 6.16, exercise
any and all rights of banker's lien, set-off, or counterclaim as fully as if
such holder were a holder of the Obligations in the amount of such interest or
other participation. If all or any part of any funds transferred pursuant to
this section is thereafter recovered from the seller under this section which
received the same, the purchase provided for in this section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to the order of a Tribunal to be paid on
account of the possession of such funds prior to such recovery.

      Section 9.7.  Investments.  Whenever Administrative Agent in good faith
                    -----------
determines that it is uncertain about how to distribute to Lender Parties any
funds which it has received, or whenever Administrative Agent in good faith
determines that there is any dispute among Lender Parties about how such funds
should be distributed, Administrative Agent may choose to defer distribution of
the funds which are the subject of such uncertainty or dispute.  If
Administrative Agent in good faith believes that the uncertainty or dispute will
not be promptly resolved, or if Administrative Agent is otherwise required to
invest funds pending distribution to Lender Parties, Administrative Agent shall
invest such funds pending distribution; all interest on any such Investment
shall be distributed upon the distribution of such Investment and in the same
proportion and to the same Persons as such Investment.  All moneys received by
Administrative Agent for distribution to Lender Parties (other than to the
Person who is Administrative Agent in its separate capacity as a Lender Party)
shall be held by Administrative Agent pending such distribution solely as
Administrative Agent for such Lender Parties, and Administrative Agent shall
have no equitable title to any portion thereof.

      Section 9.8.  Benefit of Article IX.  The provisions of this Article are
                    ---------------------
intended solely for the benefit of Lender Parties, and no Restricted Person
shall be entitled to rely on any such provision or assert any such provision in
a claim or defense against any Lender (other than in relation to the reference
to Section 6.16 contained in Section 9.6 or the right to reasonably approve a
successor Administrative Agent under Section 9.9).  Lender Parties may waive or
amend such provisions as they desire without any notice to or consent of
Borrower or any other Restricted Person.

      Section 9.9.  Resignation.  Administrative Agent may resign at any time by
                    -----------
giving written notice thereof to Lenders and Borrower.  Each such notice shall
set forth the date of such resignation.  Upon any such resignation Majority
Lenders shall have the right to appoint a successor Administrative Agent,
subject to the approval of Borrower, unless a Default has occurred and is
continuing, which approval will not be unreasonably withheld.  A successor must
be appointed for any retiring Administrative Agent, and such Administrative
Agent's resignation shall become effective when such successor accepts such
appointment.  If, within thirty days after the date of the retiring
Administrative Agent's resignation, no successor Administrative

                                      80
<PAGE>

Agent has been appointed and has accepted such appointment, then the retiring
Administrative Agent may appoint a successor Administrative Agent, which shall
be a commercial bank organized or licensed to conduct a banking or trust
business under the Laws of the United States of America or of any state thereof.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. After any retiring Administrative Agent's resignation hereunder
the provisions of this Article IX shall continue to inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent
under the Loan Documents.

      Section 9.10.  Other Agents.  Neither the Syndication Agent nor the
                     ------------
Documentation Agent ("Co-Agents"), in such capacities, shall have any duties or
responsibilities or incur any liabilities in such agency capacities (as opposed
to its capacity as a Lender) under or in connection with this Agreement or under
any of the other Loan Documents.  The relationship between Borrower, on the one
hand, and the Co-Agents and Administrative Agent, on the other hand, shall be
solely that of borrower and lender.  None of the Co-Agents shall have any
fiduciary responsibilities to Borrower or any of its Affiliates.   None of the
Co-Agents undertakes any responsibility to Borrower or any of its respective
Affiliates to review or inform Borrower of any matter in connection with any
phase of Borrower's or such Affiliate's business or operations.

                           ARTICLE X - Miscellaneous
                                       -------------

      Section 10.1.  Waivers and Amendments; Acknowledgments.
                     ---------------------------------------

      (a)  Waivers and Amendments.  No failure or delay (whether by course of
           ----------------------
conduct or otherwise) by any Lender in exercising any right, power or remedy
which such Lender Party may have under any of the Loan Documents shall operate
as a waiver thereof or of any other right, power or remedy, nor shall any single
or partial exercise by any Lender Party of any such right, power or remedy
preclude any other or further exercise thereof or of any other right, power or
remedy.  No waiver of any provision of any Loan Document and no consent to any
departure therefrom shall ever be effective unless it is in writing and signed
as provided below in this section, and then such waiver or consent shall be
effective only in the specific instances and for the purposes for which given
and to the extent specified in such writing.  No notice to or demand on any
Restricted Person shall in any case of itself entitle any Restricted Person to
any other or further notice or demand in similar or other circumstances.  This
Agreement and the other Loan Documents set forth the entire understanding
between the parties hereto with respect to the transactions contemplated herein
and therein and supersede all prior discussions and understandings with respect
to the subject matter hereof and thereof, and no waiver, consent, release,
modification or amendment of or supplement to this Agreement or the other Loan
Documents shall be valid or effective against any party hereto unless the same
is in writing and signed by (i) if such party is Borrower, by Borrower, (ii if
such party is Administrative Agent or LC Issuer, by such party, and (ii if such
party is a Lender, by such Lender or by Administrative Agent on behalf of
Lenders with the written consent of Majority Lenders (which consent has already
been given as to the termination of the Loan Documents as provided in Section
10.9).

                                      81
<PAGE>

Notwithstanding the foregoing or anything to the contrary herein, Administrative
Agent shall not, without the prior consent of each individual Lender, execute
and deliver on behalf of such Lender any waiver or amendment which would: (1)
waive any of the conditions specified in Article IV (provided that
Administrative Agent may in its discretion withdraw any request it has made
under Section 4.2(f)), (2) increase the Percentage Share of any such Lender or
the maximum amount any such Lender is committed to fund in respect of Letter of
Credit Obligations and Loans or subject such Lender to any additional
obligations, (3) reduce any fees payable to such Lender hereunder, or the
principal of, or interest on, such Lender's Note, (4) change any date fixed for
any payment of any such fees, principal or interest, (5) amend the definition
herein of "Borrowing Base" or any of the terms used in that definition, (6)
amend the definition herein of "Majority Lenders" or otherwise change the
aggregate amount of Percentage Shares which is required for Administrative
Agent, Lenders or any of them to take any particular action under the Loan
Documents, (7) release Borrower from its obligation to pay such Lender's Note or
any Guarantor from its guaranty of such payment, or (8) release any Collateral,
except such releases relating to sales of property permitted under Section 7.5.

     (b)  Acknowledgments and Admissions.  Borrower hereby represents, warrants,
          ------------------------------
acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the Loan Documents to which it is a
party, (ii it has made an independent decision to enter into this Agreement and
the other Loan Documents to which it is a party, without reliance on any
representation, warranty, covenant or undertaking by Administrative Agent or any
other Lender Party, whether written, oral or implicit, other than as expressly
set out in this Agreement or in another Loan Document delivered on or after the
date hereof, (ii there are no representations, warranties, covenants,
undertakings or agreements by any Lender Party as to the Loan Documents except
as expressly set out in this Agreement or in another Loan Document delivered on
or after the date hereof, (iv no Lender Party has any fiduciary obligation
toward Borrower with respect to any Loan Document or the transactions
contemplated thereby, (v) the relationship pursuant to the Loan Documents
between Borrower and the other Restricted Persons, on one hand, and each Lender
Party, on the other hand, is and shall be solely that of debtor and creditor,
respectively, (vi no partnership or joint venture exists with respect to the
Loan Documents between any Restricted Person and any Lender Party, (vi
Administrative Agent is not Borrower's Administrative Agent, but Administrative
Agent for Lenders, (vi should an Event of Default or Default occur or exist,
each Lender Party will determine in its sole discretion and for its own reasons
what remedies and actions it will or will not exercise or take at that time, (ix
without limiting any of the foregoing, Borrower is not relying upon any
representation or covenant by any Lender Party, or any representative thereof,
and no such representation or covenant has been made, that any Lender Party
will, at the time of an Event of Default or Default, or at any other time,
waive, negotiate, discuss, or take or refrain from taking any action permitted
under the Loan Documents with respect to any such Event of Default or Default or
any other provision of the Loan Documents, and (x) all Lender Parties have
relied upon the truthfulness of the acknowledgments in this section in deciding
to execute and deliver this Agreement and to become obligated hereunder.

     (c)  Representation by Lenders.  Each Lender hereby represents that it will
          -------------------------
acquire its Note for its own account in the ordinary course of its commercial
lending business; however, the

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<PAGE>

disposition of such Lender's property shall at all times be and remain within
its control and, in particular and without limitation, such Lender may sell or
otherwise transfer its Note, any participation interest or other interest in its
Note, or any of its other rights and obligations under the Loan Documents
subject to compliance with Sections 10.5(b) through (f), inclusive, and
applicable Law.

     (d)  Joint Acknowledgment.  THIS WRITTEN AGREEMENT AND THE OTHER LOAN
          --------------------
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND 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.

     (e)  Annual Rates of Interest.  For the purposes of the Interest Act
          ------------------------
(Canada), whenever interest payable pursuant to this Agreement is calculated on
the basis of a period other than a calendar year (in this Section 10.1(e), the
"Interest Period"), each rate of interest determined pursuant to such
calculation expressed as an annual rate is equivalent to such rate as so
determined multiplied by the actual number of days in the calendar year in which
the same is to be ascertained and divided by the number of days in the Interest
Period.

     Section 10.2.  Survival of Agreements; Cumulative Nature. All of Restricted
                    -----------------------------------------
Persons' various representations, warranties, covenants and agreements in the
Loan Documents shall survive the execution and delivery of this Agreement and
the other Loan Documents and the performance hereof and thereof, including the
making or granting of the Loans and the delivery of the Notes and the other Loan
Documents, and shall further survive until all of the Obligations are paid in
full to each Lender Party and all of Lender Parties' obligations to Borrower are
terminated. All statements and agreements contained in any certificate or other
instrument delivered by any Restricted Person to any Lender Party under any Loan
Document shall be deemed representations and warranties by Borrower or
agreements and covenants of Borrower under this Agreement. The representations,
warranties, indemnities, and covenants made by Restricted Persons in the Loan
Documents, and the rights, powers, and privileges granted to Lender Parties in
the Loan Documents, are cumulative, and, except for expressly specified waivers
and consents, no Loan Document shall be construed in the context of another to
diminish, nullify, or otherwise reduce the benefit to any Lender Party of any
such representation, warranty, indemnity, covenant, right, power or privilege.
In particular and without limitation, no exception set out in this Agreement to
any representation, warranty, indemnity, or covenant herein contained shall
apply to any similar representation, warranty, indemnity, or covenant contained
in any other Loan Document, and each such similar representation, warranty,
indemnity, or covenant shall be subject only to those exceptions which are
expressly made applicable to it by the terms of the various Loan Documents.

     Section 10.3.  Notices.  All notices, requests, consents, demands and other
                    -------
communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document (provided
that Administrative Agent

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<PAGE>

may give telephonic notices to the other Lender Parties), and shall be deemed
sufficiently given or furnished if delivered by personal delivery, by facsimile
or other electronic transmission, by delivery service with proof of delivery, or
by registered or certified United States mail, postage prepaid, to Borrower and
Restricted Persons at the address of Borrower specified on the signature pages
hereto and to each Lender Party at its address specified on the signature pages
hereto (unless changed by similar notice in writing given by the particular
Person whose address is to be changed). Any such notice or communication shall
be deemed to have been given (a) in the case of personal delivery or delivery
service, as of the date of first attempted delivery during normal business hours
at the address provided herein, (b) in the case of facsimile or other electronic
transmission, upon receipt, or (c) in the case of registered or certified United
States mail, three days after deposit in the mail; provided, however, that no
Borrowing Notice or Continuation/Conversion Notice shall become effective until
actually received by Administrative Agent.

     Section 10.4.  Payment of Expenses; Indemnity.
                    ------------------------------

     (a)  Payment of Expenses.  Whether or not the transactions contemplated by
          -------------------
this Agreement are consummated, Borrower will promptly (and in any event, within
30 days after any invoice or other statement or notice) pay: (i) all transfer,
stamp, mortgage, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement or
any of the other Loan Documents or any other document referred to herein or
therein, (ii all reasonable costs and expenses incurred by or on behalf of
Administrative Agent (including attorneys' fees, consultants' fees and
engineering fees, travel costs and miscellaneous expenses) in connection with
(1) the negotiation, preparation, execution and delivery of the Loan Documents,
and any and all consents, waivers or other documents or instruments relating
thereto, (2) the filing, recording, refiling and re-recording of any Loan
Documents and any other documents or instruments or further assurances required
to be filed or recorded or refiled or re-recorded by the terms of any Loan
Document, (3) the borrowings hereunder and other action reasonably required in
the course of administration hereof, (4) monitoring or confirming (or
preparation or negotiation of any document related to) Borrower's compliance
with any covenants or conditions contained in this Agreement or in any Loan
Document, and (ii all reasonable costs and expenses incurred by or on behalf of
any Lender Party (including attorneys' fees, consultants' fees and accounting
fees) in connection with the defense or enforcement of any of the Loan Documents
(including this section) or the defense of any Lender Party's exercise of its
rights thereunder.  In addition to the foregoing, until all Obligations have
been paid in full, Borrower will also pay or reimburse Administrative Agent for
all reasonable out-of-pocket costs and expenses of Administrative Agent or its
agents or employees in connection with the continuing administration of the
Loans and the related due diligence of Administrative Agent, including travel
and miscellaneous expenses and fees and expenses of Administrative Agent's
outside counsel, reserve engineers and consultants engaged in connection with
the Loan Documents.

     (b)  Indemnity.  Borrower agrees to indemnify each Lender Party, upon
          ---------
demand, from and against any and all liabilities, obligations, claims, losses,
damages, penalties, fines, actions, judgments, suits, settlements, costs,
expenses or disbursements (including reasonable fees of

                                      84
<PAGE>

attorneys, accountants, experts and advisors) of any kind or nature whatsoever
(in this section collectively called "liabilities and costs") which to any
extent (in whole or in part) may be imposed on, incurred by, or asserted against
such Lender Party growing out of, resulting from or in any other way associated
with any of the Collateral, the Loan Documents and the transactions and events
(including the enforcement or defense thereof) at any time associated therewith
or contemplated therein whether arising in contract or in tort or otherwise and
including any violation or noncompliance with any Environmental Laws by any
Lender Party or any other Person or any liabilities or duties of any Lender
Party or any other Person with respect to Hazardous Materials found in or
released into the environment).

THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY ANY LENDER PARTY,

provided only that no Lender Party shall be entitled under this section to
receive indemnification for that portion, if any, of any liabilities and costs
which is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment.  If any Person (including
Borrower or any of its Affiliates) ever alleges such gross negligence or willful
misconduct by any Lender Party, the indemnification provided for in this section
shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct.  As used in this section the term "Lender Party" shall refer
not only to each Person designated as such in Section 1.1 but also to each
director, officer, agent, attorney, employee, representative and Affiliate of
such Persons.

     Section 10.5.  Joint and Several Liability; Parties in Interest;
                    -------------------------------------------------
Assignments; Replacement Notes.
------------------------------

     (a)  All Obligations which are incurred by two or more Restricted Persons
shall be their joint and several obligations and liabilities.  All grants,
covenants and agreements contained in the Loan Documents shall bind and inure to
the benefit of the parties thereto and their respective successors and permitted
assigns; provided, however, that no Restricted Person may assign or transfer any
of its rights or delegate any of its duties or obligations under any Loan
Document without the prior consent of all Lenders.  Neither Borrower nor any
Affiliates of Borrower shall directly or indirectly purchase or otherwise retire
any Obligations owed to any Lender nor will any Lender accept any offer to do
so, unless each Lender shall have received substantially the same offer with
respect to the same Percentage Share of the Obligations owed to it.  If Borrower
or any Affiliate of Borrower at any time purchases some but less than all of the
Obligations owed to all Lender Parties, such purchaser shall not be entitled to
any rights of any Lender under the Loan Documents unless and until Borrower or
its Affiliates have purchased all of the Obligations.

                                      85
<PAGE>

     (b)  No Lender shall sell any participation interest in its commitment
hereunder or any of its rights under its Loans or under the Loan Documents to
any Person unless the agreement between such Lender and such participant at all
times provides: (i) that such participation exists only as a result of the
agreement between such participant and such Lender and that such transfer does
not give such participant any right to vote as a Lender or any other direct
claims or rights against any Person other than such Lender, (ii) that such
participant is not entitled to payment from any Restricted Person under Sections
3.2 through 3.6 of amounts in excess of those payable to such Lender under such
sections (determined without regard to the sale of such participation), and
(iii) unless such participant is an Affiliate of such Lender, that such
participant shall not be entitled to require such Lender to take any action
under any Loan Document or to obtain the consent of such participant prior to
taking any action under any Loan Document, except for actions which would
require the consent of all Lenders under subsection (a) of Section 10.1.  No
Lender selling such a participation shall, as between the other parties hereto
and such Lender, be relieved of any of its obligations hereunder as a result of
the sale of such participation.  Each Lender which sells any such participation
to any Person (other than an Affiliate of such Lender) shall give prompt notice
thereof to Administrative Agent and Borrower; provided, however, that no
liability shall arise if any Lender fails to give such notice to Borrower.

     (c)  Except for sales of participations under the immediately preceding
subsection, no Lender shall make any assignment or transfer of any kind of its
commitments or any of its rights under its Loans or under the Loan Documents,
except for assignments to an Eligible Transferee, or, subject to the provisions
of subsection (g) below, to an Affiliate and then only if such assignment is
made in accordance with the following requirements:

             (i)  Each such assignment shall apply to all Obligations owing to
     the assignor Lender hereunder and to the unused portion of the assignor
     Lender's commitments, so that after such assignment is made the assignor
     Lender shall have a fixed (and not a varying) Percentage Share in its Loans
     and Note and be committed to make that Percentage Share of all future
     Loans, the assignee shall have a fixed Percentage Share in such Loans and
     Note and be committed to make that Percentage Share of all future Loans,
     and the Percentage Share of the Maximum Loan Amount of each of the assignor
     and assignee shall equal or exceed $5,000,000.

             (ii) The parties to each such assignment shall execute and deliver
     to Administrative Agent, for its acceptance and recording in the "Register"
     (as defined below in this section), an Assignment and Acceptance in the
     form of Exhibit J, appropriately completed, together with the Note subject
     to such assignment and a processing fee payable by such assignor Lender
     (and not at Borrower's expense) to Administrative Agent of $3,500.  Upon
     such execution, delivery, and payment and upon the satisfaction of the
     conditions set out in such Assignment and Acceptance, then (i) Borrower
     shall issue new Notes to such assignor and assignee upon return of the old
     Notes to Borrower, and (ii) as of the "Settlement Date" specified in such
     Assignment and Acceptance the assignee thereunder shall be a party hereto
     and a Lender hereunder and Administrative Agent shall thereupon deliver to
     Borrower and each Lender a revised Schedule 1 hereto showing the revised
     Percentage Shares of such assignor Lender and such assignee Lender and the
     Percentage Shares of all other Lenders.

                                      86
<PAGE>

             (iii)  Each assignee Lender which is not a United States person (as
     such term is defined in Section 7701(a)(30) of the Code) for Federal income
     tax purposes, shall (to the extent it has not already done so) provide
     Administrative Agent and Borrower with the "Prescribed Forms" referred to
     in Section 3.7(d).

     (d)  Any Lender may at any time pledge all or any portion of its Loan and
Note (and related rights under the Loan Documents including any portion of its
Note) to any of the twelve (12) Federal Reserve Banks organized under Section 4
of the Federal Reserve Act, 12 U.S.C. Section 341.  No such pledge or
enforcement thereof shall release any such Lender from its obligations under any
of the Loan Documents; provided that all related costs, fees and expenses in
connection with any such pledge shall be for the sole account of such Lender.

     (e)  By executing and delivering an Assignment and Acceptance, each
assignee Lender thereunder will be confirming to and agreeing with Borrower,
Administrative Agent and each other Lender Party that such assignee understands
and agrees to the terms hereof, including Article IX hereof.

     (f)  Administrative Agent shall maintain a copy of each Assignment and
Acceptance and a register for the recordation of the names and addresses of
Lenders and the Percentage Shares of, and principal amount of the Loans owing
to, each Lender from time to time (in this section called the "Register").  The
entries in the Register shall be conclusive, in the absence of manifest error,
and Borrower and each Lender Party may treat each Person whose name is recorded
in the Register as a Lender Party hereunder for all purposes.  The Register
shall be available for inspection by Borrower or any Lender Party at any
reasonable time and from time to time upon reasonable prior notice.

     (g)  Any Lender may assign or transfer its commitment or its rights under
its Loans or under the Loan Documents to (i) any Affiliate that is wholly-owned
direct or indirect subsidiary of such Lender or of any Person that wholly owns,
directly or indirectly, such Lender, or (ii) if such Lender is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by (A) the same investment advisor as any Lender or (B) any Affiliate
of such investment advisor that is a wholly-owned direct or indirect subsidiary
of any Person that wholly owns, directly or indirectly, such investment advisor,
subject to the following additional conditions:

     (x)  any right of such Lender assignor and such assignee to vote as a
     Lender, or any other direct claims or rights against any other Persons,
     shall be uniformly exercised or pursued in the manner that such Lender
     assignor would have so exercised such vote, claim or right if it had not
     made such assignment or transfer;

     (y)  such assignee shall not be entitled to payment from any Restricted
     Person under Sections 3.2 through 3.7 of amounts in excess of those payable
     to such Lender assignor under such sections (determined without regard to
     such assignment or transfer); and

                                      87
<PAGE>

     (z)  if such Lender assignor assigns or transfers to such assignee any of
     such Lender's commitment, such assignee may become primarily liable for
     such commitment, but such assignment or transfer shall not relieve or
     release such Lender from such commitment.

     (h)  Upon receipt of an affidavit reasonably satisfactory to Borrower of an
officer of any Lender as to the loss, theft, destruction or mutilation of its
Note or any Security Document which is not of public record, and, in the case of
any such loss, theft, destruction or mutilation, upon cancellation of such Note
or such Security Document, Borrower will execute and deliver, in lieu thereof, a
replacement Note in the same principal amount thereof and otherwise of like
tenor (or each Restricted Person a party to any such Security Document will
execute and deliver a replacement Security Document of like tenor).

     Section 10.6.  Confidentiality.   Each Lender Party agrees (on behalf of
                    ---------------
itself and each of its Affiliates, and each of its and their directors,
officers, agents, attorneys, employees, and representatives) that it (and each
of them) will take all reasonable steps to keep confidential any non-public
information supplied to it by or at the direction of any Restricted Person so
identified when delivered, provided, however, that this restriction shall not
apply to (a) information which has at the time in question entered the public
domain, (b) information which is required to be disclosed by Law (whether valid
or invalid) of any Tribunal, (c) any disclosure to any Lender Party's
Affiliates, auditors, attorneys, or agents, (d) any disclosure to any other
Lender Party or to any purchaser or prospective purchaser of participations or
other interests in any Loan or Loan Document (provided each such Person first
agrees to hold such information in confidence on the terms provided in this
section), or (e) any disclosure in the course of enforcing its rights and
remedies during the existence of an Event of Default.

     Section 10.7.  Governing Law; Submission to Process.  EXCEPT TO THE EXTENT
                    ------------------------------------
THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT,
THE LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS
OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE LAWS OF THE UNITED
STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. BORROWER
HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST BORROWER WITH RESPECT
TO THIS AGREEMENT, THE NOTES OR ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK AS LENDER PARTIES MAY ELECT, AND, BY EXECUTION AND
DELIVERY HEREOF, BORROWER ACCEPTS AND CONSENTS FOR ITSELF AND IN RESPECT TO ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. BORROWER AGREES THAT SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO

                                      88
<PAGE>

THE LOAN DOCUMENTS AND WAIVES ANY RIGHT TO STAY OR TO DISMISS ANY ACTION OR
PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS OF FORUM NON CONVENIENS. IN
FURTHERANCE OF THE FOREGOING, BORROWER HEREBY IRREVOCABLY DESIGNATES AND
APPOINTS CORPORATION SERVICE COMPANY, 80 STATE STREET, ALBANY, NEW YORK 12207,
AS AGENT OF BORROWER TO RECEIVE SERVICE OF ALL PROCESS BROUGHT AGAINST BORROWER
WITH RESPECT TO ANY SUCH PROCEEDING IN ANY SUCH COURT IN NEW YORK, SUCH SERVICE
BEING HEREBY ACKNOWLEDGED BY BORROWER TO BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT. COPIES OF ANY SUCH PROCESS SO SERVED SHALL ALSO, IF PERMITTED BY
LAW, BE SENT BY REGISTERED MAIL TO BORROWER AT ITS ADDRESS SET FORTH BELOW, BUT
THE FAILURE OF BORROWER TO RECEIVE SUCH COPIES SHALL NOT AFFECT IN ANY WAY THE
SERVICE OF SUCH PROCESS AS AFORESAID. BORROWER SHALL FURNISH TO LENDER PARTIES A
CONSENT OF CORPORATION SERVICE COMPANY AGREEING TO ACT HEREUNDER PRIOR TO THE
EFFECTIVE DATE OF THIS AGREEMENT. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
LENDER PARTIES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF LENDER PARTIES TO BRING PROCEEDINGS AGAINST BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. IF FOR ANY REASON CORPORATION SERVICE COMPANY
SHALL RESIGN OR OTHERWISE CEASE TO ACT AS BORROWER'S AGENT, BORROWER HEREBY
IRREVOCABLY AGREES TO (A) IMMEDIATELY DESIGNATE AND APPOINT A NEW AGENT
ACCEPTABLE TO ADMINISTRATIVE AGENT TO SERVE IN SUCH CAPACITY AND, IN SUCH EVENT,
SUCH NEW AGENT SHALL BE DEEMED TO BE SUBSTITUTED FOR CORPORATION SERVICE COMPANY
FOR ALL PURPOSES HEREOF AND (B) PROMPTLY DELIVER TO AGENT THE WRITTEN CONSENT
(IN FORM AND SUBSTANCE SATISFACTORY TO ADMINISTRATIVE AGENT) OF SUCH NEW AGENT
AGREEING TO SERVE IN SUCH CAPACITY.

     Section 10.8.  Waiver of Judgment Interest Act (Alberta).  To the extent
                    -----------------------------------------
permitted by Law, the provisions of the Judgment Interest Act (Alberta) shall
not apply to LC Obligations with respect to Canadian Letters of Credit and the
other Loan Documents and are hereby expressly waived by Borrower.

     Section 10.9.  Deemed Reinvestment Not Applicable.  For the purposes of the
                    ----------------------------------
Interest Act (Canada), the principle of deemed reinvestment of interest shall
not apply to any interest calculation under the Loan Documents, and the rates of
interest stipulated in this Agreement are intended to be nominal rates and not
effective rates or yields.

                                      89
<PAGE>

      Section 10.10.  Limitation on Interest. Lender Parties, Restricted Persons
                      ----------------------
and any other parties to the Loan Documents intend to contract in strict
compliance with applicable usury Law from time to time in effect.  In
furtherance thereof such Persons stipulate and agree that none of the terms and
provisions contained in the Loan Documents shall ever be construed to create a
contract to pay, for the use, forbearance or detention of money, interest in
excess of the maximum amount of interest permitted to be contracted for,
charged, or received by applicable Law from time to time in effect.  Neither any
Restricted Person nor any present or future guarantors, endorsers, or other
Persons hereafter becoming liable for payment of any Obligation shall ever be
liable for unearned interest thereon or shall ever be required to pay interest
thereon in excess of the maximum amount that may be lawfully contracted for,
charged, or received under applicable Law from time to time in effect, and the
provisions of this section shall control over all other provisions of the Loan
Documents which may be in conflict or apparent conflict herewith.  Lender
Parties expressly disavow any intention to contract for, charge, or receive
excessive unearned interest or finance charges in the event the maturity of any
Obligation is accelerated.  If (a) the maturity of any Obligation is accelerated
for any reason, (b) any Obligation is prepaid and as a result any amounts held
to constitute interest are determined to be in excess of the legal maximum, or
(c) any Lender or any other holder of any or all of the Obligations shall
otherwise collect moneys which are determined to constitute interest which would
otherwise increase the interest on any or all of the Obligations to an amount in
excess of that permitted to be contracted for, charged or received by applicable
Law then in effect, then all sums determined to constitute interest in excess of
such legal limit shall, without penalty, be promptly applied to reduce the then
outstanding principal of the related Obligations or, at such Lender's or
holder's option, promptly returned to Borrower or other payor thereof upon such
determination.  In determining whether or not the interest paid or payable,
under any specific circumstance, exceeds the maximum amount permitted under
applicable Law, Lender Parties and Restricted Persons (and any other payors
thereof) shall to the greatest extent permitted under applicable Law, (i)
characterize any non-principal payment as an expense, fee or premium rather than
as interest, (ii exclude voluntary prepayments and the effects thereof, and (ii
amortize, prorate, allocate, and spread the total amount of interest throughout
the entire contemplated term of the instruments evidencing the Obligations in
accordance with the amounts outstanding from time to time thereunder and the
maximum legal rate of interest from time to time in effect under applicable Law
in order to lawfully charge the maximum amount of interest permitted under
applicable Law.  In the event applicable Law provides for an interest ceiling
under Chapter 303 of the Texas Finance Code (the "Texas Finance Code") as
amended, to the extent that the Texas Finance Code is mandatorily applicable to
any Lender, for that day, the ceiling shall be the "weekly ceiling" as defined
in the Texas Finance Code, provided that if any applicable Law permits greater
interest, the Law permitting the greatest interest shall apply.  In no event
shall Chapter 346 of the Texas Finance Code apply to this Agreement or any other
Loan Document, or any transactions or loan arrangement provided or contemplated
hereby or thereby.

      Section 10.11.  Termination; Limited Survival.  In its sole and absolute
                      -----------------------------
discretion Borrower may at any time that no Obligations are owing or outstanding
elect in a written notice delivered to Administrative Agent to terminate this
Agreement. Upon receipt by Administrative Agent of such a notice, if no
Obligations are then owing or outstanding this Agreement and all other Loan
Documents shall thereupon be terminated and the parties thereto released from
all

                                      90
<PAGE>

prospective obligations thereunder.  Notwithstanding the foregoing or
anything herein to the contrary, any waivers or admissions made by any
Restricted Person in any Loan Document, any Obligations under Sections 3.2
through 3.6, and any obligations which any Person may have to indemnify or
compensate any Lender Party shall survive any termination of this Agreement or
any other Loan Document.  At the request and expense of Borrower, Administrative
Agent shall prepare and execute all necessary instruments to reflect and effect
such termination of the Loan Documents.  Administrative Agent is hereby
authorized to execute all such instruments on behalf of all Lenders, without the
joinder of or further action by any Lender.

      Section 10.12.  Severability.  If any term or provision of any Loan
                      ------------
Document shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable Law.

      Section 10.13.  Counterparts.  This Agreement may be separately executed
                      ------------
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.

      Section 10.14.  Waiver of Jury Trial, Punitive Damages, etc.  RESTRICTED
                      --------------------------------------------
PERSONS AND LENDER PARTIES MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDERS
TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND MAKE THE LOANS.
BORROWER AND EACH LENDER PARTY HEREBY FURTHER (A) IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY "SPECIAL DAMAGES," AS DEFINED BELOW, (B) CERTIFIES
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (C)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
AS USED IN THIS SECTION, "SPECIAL DAMAGES" INCLUDES ALL SPECIAL, CONSEQUENTIAL,
EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW

                                      91
<PAGE>

NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS
EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.

      Section 10.15.  Amendment and Restatement.  Upon satisfaction with each of
                      --------------------------
the conditions set forth in Section 4.1 (except any condition the performance of
which has been waived as a condition to the initial Loan or initial issuance of
a Letter of Credit pursuant to this Agreement), this Agreement shall be deemed
to amend and restate in its entirety the Existing Agreement, at which time (the
"Effective Time") each Lender and each Restricted Person hereby agrees that (i)
the Percentage Share of each Lender shall be as set forth in the definition to
this Agreement, (ii) the loans outstanding under the Existing Agreement and all
accrued and unpaid interest thereon, all letters of credit issued and
outstanding under the Existing Agreement and reimbursement obligations with
respect thereto, and all accrued and unpaid fees and expenses under the Existing
Agreement (the "Outstanding Obligations") shall be deemed to be outstanding
under and governed by this Agreement, and (iii) any party named as a "Lender"
under the Existing Agreement that is not a signatory hereto as a Lender under
this Agreement (an "Exiting Lender") shall cease to be a Lender and shall be
released from its obligations under the Existing Agreement and this Agreement.
At the Effective Time, the Borrower shall make such adjustments in the Loans,
including the borrowing of additional Loans and the repayment of Loans under the
Existing Agreement plus all applicable accrued interest, fees and expenses
(including any costs under Article III of the Existing Agreement) as shall be
necessary to repay in full all Exiting Lenders and to provide for Loans by each
Lender in the amount of its new Percentage Share of all Loans as of the
Effective Time.

     Section 10.17.  CanPet Acquisition.  Lender Parties hereby consent to the
                     ------------------
CanPet Acquisition, subject to the following:

          (a) Administrative Agent shall have received and approved copies of
     all environmental evaluations, reports or reviews related to properties to
     be acquired pursuant to the CanPet Acquisition, and there shall be no
     existing or potential environmental liabilities disclosed thereunder or
     otherwise existing except as disclosed by Borrower to Administrative Agent
     and Lender Parties prior to the date hereof.

          (b) Administrative Agent and each Lender Party shall have received any
     updated or revised business and/or financial projections with respect to
     the assets and operations to be acquired pursuant to the CanPet
     Acquisition, and no such projection shall materially and adversely differ
     from those projections previously delivered to Administrative Agent and
     Lenders.

          (c) The CanPet Acquisition shall exclude the acquisition of any
     existing or potential environmental or litigation liabilities incurred
     prior to the CanPet Acquisition Closing Date, except as disclosed by
     Borrower to Administrative Agent and Lender Parties prior to the date
     hereof, and Borrower and Plains Marketing Canada, L.P., as acquirers, shall
     have received an environmental indemnity providing for a deductible of not
     more than C$50,000 in the aggregate (not applicable with respect to
     environmental

                                      92
<PAGE>

     liabilities disclosed to Administrative Agent and Lender Parties prior to
     the date hereof) and a cap of not less than C$3,000,000 in the aggregate,
     to be effective for not less than two years with respect to on-site
     contamination and three years with respect to off-site contamination
     following the CanPet Acquisition Closing Date, and otherwise reasonably
     satisfactory to Administrative Agent with respect to such liabilities.

          (d) Administrative Agent  shall have received and approved copies of
     all CanPet Acquisition Documents and all other related documents as
     Administrative Agent may request.

          (e) The cash portion of the purchase price shall not exceed
     C$39,700,000, subject to purchase price adjustments with respect to
     purchased inventory, prepayment made or received, and income earned from
     the March 1, 2001 effective date of the CanPet Acquisition through the
     CanPet Acquisition Closing Date, as provided for in the purchase agreement
     included in the CanPet Acquisition Documents.

          (f) Both immediately prior to and immediately following the
     consummation of the CanPet Acquisition, no Material Adverse Change shall
     have occurred since December 31, 2000, and no Default or Event of Default
     shall have occurred and be continuing.

          (g) Canadian Subsidiaries shall have delivered Security Documents
     pursuant to Section 6.14 of this Agreement with respect to the properties
     acquired pursuant to the CanPet Acquisition.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                      93
<PAGE>

   IN WITNESS WHEREOF, this Agreement is executed as of the date first written
                                     above.

BORROWER:                     PLAINS MARKETING, L.P.

                                    By:  PLAINS ALL AMERICAN INC.,
                                          its general partner

                                    By:  ___________________________________
                                         Phil Kramer, Exec. Vice President

GUARANTORS:                         ALL AMERICAN PIPELINE, L.P.

                                    By:  PLAINS ALL AMERICAN INC.,
                                          its general partner

                                    By:  ___________________________________
                                         Phil Kramer, Exec. Vice President

                                    PLAINS ALL AMERICAN PIPELINE, L.P.

                                    By:  PLAINS ALL AMERICAN INC.,
                                          its general partner

                                    By:  ___________________________________
                                         Phil Kramer, Exec. Vice President

                                    Address for Borrower and Guarantors:

                                    500 Dallas Street, Suite 700
                                    Houston, Texas 77002
                                    Attention: Phil Kramer
                                    Telephone: (713) 654-1414
                                    Fax: (713) 654-1523

                                      94
<PAGE>

                                    FLEET NATIONAL BANK,
                                    Administrative Agent, LC Issuer and
                                     a Lender

                                    By:_____________________________________
                                         Terrence Ronan, Managing Director

                                    Address:

                                    100 Federal Street
                                    Boston, Massachusetts 02110
                                    Attention: Terrence Ronan
                                    Mail Code: MADE 10008A

                                    Telephone: (617) 434-5472
                                    Fax: (617) 434-3652

                                    FLEET SECURITIES, INC.,
                                    Lead Arranger and Book Manager

                                    By:____________________________________
                                         Richard Makin, Managing Director

                                      95
<PAGE>

                                    FIRST UNION NATIONAL BANK,
                                    Syndication Agent and a Lender

                                    By:_______________________________________
                                         Robert R. Wetteroff, Sr. Vice Pres.

                                    Address:

                                    1001 Fannin, Suite 2255
                                    Houston, Texas 77002
                                    Attention: David Humphreys

                                    Telephone: (713) 650-9843
                                    Fax: (713) 650-6354

                                      96
<PAGE>

                                    BANK OF AMERICA, N.A.,
                                    Documentation Agent and a Lender

                                    By:________________________________
                                         Name:
                                         Title:

                                    Address:

                                    Energy Finance Group
                                    333 Clay Street, Suite 4550
                                    Houston, Texas 77002
                                    Attention: Irene Rummel

                                    Telephone: (713) 651-4921
                                    Fax: (713) 651-4801

                                      97
<PAGE>

                                    BANK ONE, NA (MAIN OFFICE CHICAGO),
                                    Senior Managing Agent and a Lender

                                    By:___________________________________
                                         Name:
                                         Title:

                                    Address:

                                    910 Travis
                                    Houston, Texas 77002
                                    Attention: Charles Kingswell-Smith

                                    Telephone: (713) 751-7803
                                    Telecopy: (713) 751-3544

                                      98
<PAGE>

                                    BNP PARIBAS,
                                    Senior Managing Agent and a Lender

                                    By:___________________________________
                                         Name:
                                         Title:

                                    By:___________________________________
                                         Name:
                                         Title:

                                    Address:

                                    787 7th Avenue
                                    New York, New York 10019
                                    Attention: Edward Chin/Marcie Weiss

                                    Telephone: (212) 841-2020 (EC); -2029
                                    Telecopy:  (212) 841-2536

                                      99
<PAGE>

                                    FORTIS CAPITAL CORP.,
                                    Senior Managing Agent and a Lender

                                    By:___________________________________
                                         Name:
                                         Title:

                                    By:___________________________________
                                         Name:
                                         Title:

                                    Address:

                                    100 Crescent Court, Suite 1777
                                    Dallas, Texas 75201
                                    Attention: Darrell W. Holley

                                    Telephone: (214) 754-0009
                                    Telecopy:  (214) 754-5951

                                      100
<PAGE>

                                    U.S. BANK NATIONAL ASSOCIATION,
                                    a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    918 17th Street
                                    Denver, Colorado 80202
                                    Attention: Monte E. Deckerd

                                    Telephone: (303) 585-4212
                                    Telecopy:  (303) 585-4362

                                      101
<PAGE>

                                    BANK OF SCOTLAND,
                                    a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    565 Fifth Avenue
                                    New York, New York 10017
                                    Attention: Annie Glynn

                                    Telephone: (212) 450-0871
                                    Telecopy: (212) 557-9460

                                    With Copy to:

                                    1021 Main Street, Suite 1370
                                    Houston, Texas 77002
                                    Attention: Richard C. Butler

                                    Telephone: (713) 650-0609
                                    Telecopy:  (713) 651-9714

                                      102
<PAGE>

                                    WELLS FARGO BANK (TEXAS),
                                    NATIONAL ASSOCIATION, a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    1000 Louisiana, 3rd Floor
                                    Houston, Texas 77002
                                    Attention: John Lane

                                    Telephone: (713) 319-1370
                                    Telecopy:  (713) 739-1087

                                      103
<PAGE>

                                    SIEMENS FINANCIAL SERVICES, INC.,
                                    a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    991 US Highway 22
                                    Bridgewater, New Jersey 08807
                                    Attention: Victor Alarcon

                                    Telephone: (908) 575-4074
                                    Telecopy:  (908) 575-4060

                                      104
<PAGE>

                                    THE BANK OF NOVA SCOTIA,
                                    a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    600 Peachtree Street, N.E., Ste 2700
                                    Atlanta, Georgia 30308
                                    Attention: Claude Ashby

                                    Telephone: 404-877-_____
                                    Telecopy: 404-888-8998

                                    With Copy to:

                                    Houston Representative Office
                                    1100 Louisiana, Ste 3000
                                    Houston, Texas 77002
                                    Attention: Bryan Bulawa

                                    Telephone: 713-759-3427
                                    Telecopy: 713-752-2425

                                      105
<PAGE>

                                    CREDIT AGRICOLE INDOSUEZ,
                                    a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    600 Travis Street, Suite 2340
                                    Houston, Texas 77002
                                    Attention: Doug Whiddon

                                    Telephone: 713-223-7003
                                    Telecopy: 713-223-7029

                                      106
<PAGE>

                                    GUARANTY BANK,
                                    a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    1100 Northeast Loop 410
                                    San Antonio, Texas 78209
                                    Attention: James Hamilton

                                    Telephone: 210-930-2926
                                    Telecopy: 210-930-1783

                                      107
<PAGE>

                                    TORONTO DOMINION (TEXAS), INC.,
                                    a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    909 Fannin, Suite 1700
                                    Houston, Texas 77010
                                    Attention: Alice Ellis

                                    Telephone: (713) 653-8234
                                    Telecopy: (713) 951-9921

                                      108
<PAGE>

                                    SOUTHWEST BANK OF TEXAS, N.A.,
                                    a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    5 Post Oak Park
                                    4400 Post Oak Parkway
                                    Houston, Texas 77027
                                    Attention: Stephen Kennedy

                                    Telephone: (713) 235-8870
                                    Telecopy:  (713) 439-5925

                                      109
<PAGE>

                                    UNION BANK OF CALIFORNIA, N.A.,
                                    a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    500 North Akard, Suite 4200
                                    Dallas, Texas 75201
                                    Attn: Dustin Gaspari

                                    Telephone: (214) 922-4200
                                    Telecopy: (214) 922-4209

                                      110
<PAGE>

                                    COMERICA BANK-TEXAS,
                                    a Lender

                                    By:_________________________________
                                         Name:
                                         Title:

                                    Address:

                                    910 Louisiana, Suite 410
                                    Houston, Texas 77002
                                    Attention: Dan Steele

                                    Telephone: (713) 220-5640
                                    Telecopy:  (713) 220-5650

                                      111

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