Document:

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                                                                    EXHIBIT 10.1

                           PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into
this 29th day of June, 2001, by and between Rocky Mountain Gas, Inc., with an
address of 877 North 8th West, Riverton, Wyoming 82501 (hereinafter as "RMG")
and CCBM, Inc., a Delaware Corporation, with an address of 14701 St. Mary's
Lane, Suite 800, Houston, Texas (herein referred to as "CCBM").

                                   BACKGROUND

WHEREAS, RMG is the owner of certain oil and gas or gas leases and certain
contractual rights related thereto, all being specifically described in the
following instruments (collectively, the "RMG Assets"):

A. Those certain Oil & Gas Leases or Option Agreements and wells described on
Exhibit "A", attached hereto and made a part hereof (the "Leases"), and the
royalty and overriding royalty in same as denoted on said Exhibit "A".

B. Agreement dated January 1, 2000, a copy of which is attached hereto and made
a part hereof as Exhibit "B-1", together with all amendments and revisions
thereto (the "Quantum Agreement").

C. Agreement dated December 31, 2000, a copy of which is attached hereto and
made a part hereof as Exhibit "B-2", together with all amendments and revisions
thereto (the "Suncor Agreement").

D. Agreement dated December 17, 1999, a copy of which is attached hereto and
made a part hereof as Exhibits "C-1, C-2, C-3", and C-4, together with all
amendments and revisions thereto (the , UPR Agreement, Infinity Agreement,
Lebsack Agreement, and Patina Agreement collectively referred as the " Oyster
Ridge Agreements").

WHEREAS, CCBM desires to purchase an undivided 50% interest in the RMG Assets
(the "Acquired Assets"); and

NOW, THEREFORE, in consideration of the mutual covenants, agreements, valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties, the parties hereto agree as follows:

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                                    ARTICLE I
                      PURCHASE AND SALE OF ACQUIRED ASSETS

1.1 Transfer of Acquired Assets. Subject to the terms and conditions hereof, RMG
hereby sells, conveys, transfers, assigns and delivers to CCBM, and CCBM
purchases, acquires and accepts from RMG, an undivided fifty percent (50%) of
RMG's right, title and interest in and to the RMG Assets, together with an
undivided 50% of RMG's right, title and interest in and to any Oil and Gas
Leases, Option Agreements, contractual rights, coalbed methane leases, wells,
facilities and/or other right ("Interest") of RMG within the Area of Mutual
Interests whether or not the Interest is described in this Purchase and Sales
Agreement.

1.2 Representations and Warranties. RMG represents that (i) the Acquired Assets
are valid and in full force and effect, (ii) RMG owns the interest set forth on
the attached Exhibits and (iii) RMG owns the Acquired Assets free and clear of
all mortgages, pledges, liens, charges, security interests, encumbrances and any
burdens (excepting the rights created by the Suncor and Quantum Agreements and
provided for in the lease documents) or otherwise set forth in the lease
documents created by or in favor of RMG. RMG shall warrant title to the interest
conveyed to CCBM in the Acquired Assets as to all parties claiming by, through
or under RMG, but not otherwise.

1.3 Earnest Money Deposit. In accordance with that certain Letter of Intent
dated May 31, 2001 between RMG and CCBM, CCBM paid RMG the sum of a
non-refundable Earnest Money Deposit of $50,000, and RMG hereby acknowledges the
timely receipt of the Deposit. The Earnest Money Deposit shall be credited
against CCBM's obligation to spend $2.5 million for RMG's share of the drilling
program described in Section 2.1. Such credit shall apply to the final payment
(s) due by CCBM for such obligation.

1.4 Payment for Purchase. As consideration for the purchase and assignment of
the Acquired Assets, in addition to the remaining obligations set forth
elsewhere in this Agreement, CCBM will pay at closing to RMG a purchase price of
$7.5 million subject to reductions provided for in Section 1.5 (the "Purchase
Price") in the form of a promissory note in a form identical to Exhibit "D"
attached hereto ("the Note") secured solely by the Acquired Assets, excluding
any acreage or wells deemed to be earned pursuant to Section 2.1 (a) below.

For the consideration set forth herein, CCBM will be entitled to a 50% interest
in the RMG Assets. At Closing, RMG will assign the Acquired Assets to CCBM. The
Acquired Assets will be pledged back to RMG as collateral for the Note and
Mortgage until such collateral is released. RMG shall release 25% interest in
the Acquired Assets upon receiving principal payments totaling 33.3% of the
Purchase Price. When RMG receives principal payments totaling 66.6% of the
Purchase Price, 50% interest in the Acquired Assets shall be released as
collateral. Upon RMG receiving the entire Purchase Price plus all interest due,
all the remaining interest in the Acquired Assets shall be released as
collateral.

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1.5 Title Defects and Remedies. CCBM has identified certain title defects as
identified in that certain letter dated June 15, 2001 a copy of which is
attached as Exhibit "I" and in the event that additional title defects arise
within 60 days of the Closing Date for any of the Acquired Assets, upon written
notice to RMG of the title deficiencies, RMG shall have curative rights as
follows:

         a.       RMG shall have 120 days from the date of the notice to cure
                  the defects;

         b.       If the defect cannot be cured to CCBM's satisfaction within
                  120 days, RMG will have 60 additional days to offer to CCBM
                  alternative acreage located in the same vicinity and of the
                  same quality and quantity. CCBM, in its sole discretion may
                  accept the alternative properties, recommend alternative
                  properties or refuse the substitute properties;

         c.       If alternative property can not be agreed upon and if title is
                  not cured within 180 days of notice, the Purchase Price
                  (initially $7.5 million) and the outstanding principal balance
                  of the Note shall be reduced in an amount equal to the amount
                  specified for each respective property identified on Exhibit "
                  E" at the price per acre listed and the final payment due on
                  the Note shall be reduced by such amount.

                                   ARTICLE II
                  DRILLING PROGRAM AND AREA OF MUTUAL INTEREST

2.1 Drilling Program for 2001. CCBM and RMG shall enter into a Joint Operating
Agreement ("JOA") identical in form to the agreement attached hereto as Exhibit
"F", which shall govern operations on the RMG Assets, and the Area of Mutual
Interest ("AMI"), as defined below. RMG shall be designated as the Operator,
subject to the JOA.

(a)  CCBM agrees to fund $5,000,000 for an initial drilling program on the
     Acquired Assets. As funded, CCBM will earn a 50% interest of RMG's interest
     in each well drilled and a 50% ownership in RMG's ownership interest in the
     associated acreage, (i.e. 80 acres per well), and production. CCBM's
     ownership in such wells shall be earned regardless of the status of the
     Note or CCBM's ownership in the balance of the RMG Assets. RMG will be
     carried for the initial drilling program and will retain the remaining 50%
     interest. After the above $5,000,000 is expended, subject to the JOA, all
     future operations will be funded equally by CCBM and RMG.

(b)  Notwithstanding anything to the contrary, prior to the expenditure of any
     monies attributable to the $5,000,000 to be funded by CCBM, RMG shall
     furnish CCBM with an Authority for Expenditure ("AFE") in accordance with
     the Procedure set forth in the JOA for CCBM's review and approval for each
     individual well to be drilled and completed or for facilities construction.
     Such AFE's shall be in a form similar to that set out in Exhibit "G".
     Multiple AFE's may be submitted by RMG to CCBM, however for the period
     beginning July 1, 2001, and ending November 30, 2001 no more than a
     cumulative amount of $1.5

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     million of AFE's may be submitted during any thirty (30) day period unless
     mutually agreed upon by both parties. RMG shall cash call CCBM only for
     work RMG reasonably expects to complete during the ensuing 30 day period.
     Cash calls and such AFE amounts shall be due and payable by CCBM to RMG
     within five (5) business days of commencement of work related to each
     individual AFE. Any portion of the $5,000,000 not expended during calendar
     year 2001 shall be carried over to the 2002 and 2003 drilling program or to
     property acquisitions, if mutually agreed to by the parties. No payment
     shall be due until CCBM has received copies of all permits, rights of way,
     title opinions, surface use agreements and any other ancillary agreements
     necessary for the operation for which the cash call is being made along
     with representations from RMG that the operation will be conducted during
     the ensuing 30 day period, unless mutually agreed upon in writing by the
     parties. It is specifically agreed and understood that the aforementioned
     $5,000,000 funded by CCBM shall not be expended for any operation
     associated with water disposal wells, compression beyond 100 PSIG nor for
     facilities downstream of compression beyond 100 PSIG. Further, the
     $5,000,000 funded by CCBM will only be used to pay for CCBM's final working
     interest and an equal working interest for RMG. CCBM's final working
     interest will not be less than 50% of CCBM's paying interest, less and
     except the $225,000 Suncor drilling program per section 2.5, unless
     approved by CCBM in writing. Should a cash call amount not be expended
     during the ensuing 30 day period, the unspent portion of such cash call
     shall be applied to a subsequently due cash call or shall be immediately
     refunded if not used for the AFE for which the cash call was made within 90
     days of being delivered.

(c)  In the event less then the entire $5,000,000 is expended as provided above,
     within two (2) years of the closing date (subject to extensions for Force
     Majeure), CCBM shall pay to RMG one-half of the unspent portion of the
     $5,000,000. The foregoing payment is subject to RMG complying with all of
     the terms and provisions of this Agreement, the JOA and the procedures set
     forth therein for submitting AFE's to drill $5 million worth of "reasonable
     wells". A "reasonable well" shall meet the following economic criteria:

                  1.       Individual well cost, including hook-up to sales,
                           must meet a projected internal rate of return ("IRR")
                           in excess of 15% at prevailing market prices.

                  2.       Such wells must be on acreage blocks that are
                           touching and contain a minimum size as follows:

                                   a) Kirby - at least 2560 acres
                                   b) Clearmont - at least 640 acres
                                   c) Arvada - at least 480 acres

                  3.       No more than 10 wells/calendar year at Oyster Ridge
                           qualify as reasonable.

     The intent of this provision is for CCBM to spend $2.5 million on behalf of
     RMG. If CCBM fails to do this despite a total of $5,000,000 of reasonable
     well proposals by RMG

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     then CCBM shall be obligated to pay any remaining unspent portion of the
     $2.5 million directly to RMG.

2.2 Allocation and Payment of Revenue. CCBM is entitled to 20% of RMG's net
revenue interest from all wells jointly drilled under this Agreement (per
Sections 2.1 or 2.2) until such time as the net revenue received by CCBM from
this additional interest equals a total of $1,250,000 in dollars of the day or
CCBM defaults on the Note. The revenues due CCBM shall not be paid to CCBM in
cash, but instead, RMG shall apply such revenue towards prepayment of the Note,
with such payments being applied towards the final payment due under the Note.
The $1,250,000 mentioned above will be reduced proportionately with reductions
in the Purchase Price, if any, under Section 1.5.

2.3 Area of Mutual Interest. CCBM and RMG hereby establish an AMI, which shall
include the entire State of Wyoming and the Powder River Basin of Montana as
outlined on Exhibit "H", which is attached hereto and made a part hereof, and
subject to pre-existing AMI's between RMG, Quaneco and Suncor. The AMI shall be
for a four year term commencing on June 30, 2001 and ending on June 30, 2005
unless otherwise modified by the terms herein or modified by the mutual written
consent of the parties. The JOA shall govern operations within the AMI with CCBM
and RMG each owning a 50% interest in the AMI.

2.4 Management Committee. CCBM and RMG shall form a Management Committee for the
purpose of overseeing operations on the RMG Assets.

(a)  The Management Committee shall be composed of two (2) Members representing
     CCBM and two (2) Members representing RMG. There shall be at least two (2)
     Members representing CCBM and two (2) Members representing RMG at a meeting
     to constitute a quorum for the Management Committee.

(b)  Upon payment of the Purchase Price, and with the consent of Quaneco, CCBM
     shall be allocated one of the RMG Managing Member seats with Powder River
     Gas, LLC provided for in the Quaneco Agreement (Exhibit B-1 in Section
     3.4(c) (ii)). Prior to such time, RMG agrees to consult with CCBM in order
     to come to mutual Agreement on all major decisions made by Powder River
     Gas, LLC.

(c)  The Management Committee shall:

         i.       Review and recommend overall annual and quarterly capital
                  expenditures and preparing for approval budgets for all
                  expenditures for each succeeding quarter relating to the
                  Acquired Assets.

         ii.      Review such other matters as may be necessary to option and/or
                  lease lands, drill and complete or otherwise conduct
                  activities within the AMI.

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         iii.     Review drilling results and the costs thereof in relation to
                  the budget approved by the Management Committee, and make
                  recommendations and modifications to the budget as necessary;

         iv.      Review all drilling contracts to determine that they are
                  competitive, and if necessary negotiate competitive drilling
                  contracts for future drilling;

         v.       Investigate whether to build or contract out the building of
                  the gathering system;

         vi.      Meet not less than quarterly or at the request of either CCBM
                  or RMG. The meeting site shall alternate between
                  Sheridan/Riverton, Wyoming and CCBM offices in Houston, Texas,
                  unless otherwise agreed to by the Parties;

         vii.     Conduct any other business necessary to oversee this
                  Agreement.

(d)  It is specifically agreed that RMG shall have a tie breaking vote
     concerning all general operations as outlined herein until the $5 million
     drilling commitment has been expended and until the Purchase Price has been
     paid.

2.5 Suncor Option Acreage.

(a) The Suncor Agreement (Exhibit B-2) contains a provision whereby RMG has
provided Suncor Energy of Calgary, Alberta ("Suncor") an option to purchase a
37.5% net working interest in approximately 112,000 acres in Montana ("Option
Acreage") known as the Castle Rock Project with a remaining balance of
approximately $2,900,000 from Suncor to RMG, due in February 2002, plus various
drilling commitments. If Suncor exercises the option, all proceeds of such sale
will be solely for the benefit of RMG. If Suncor does not exercise its option
with RMG, then CCBM shall have thirty (30 day) after receipt of written notice
from RMG to elect to purchase 50% of RMG's interest in the Option Acreage for
the equivalent value that would have been due RMG under the Suncor Agreement. If
CCBM does not exercise this option on or before thirty (30) days after receipt
of written notice, then the Option Acreage will belong solely to RMG and will be
removed from the AMI.

CCBM and RMG have agreed that RMG will AFE CCBM for $225,000 on July 1, 2001 for
RMG's obligations for the wells to be drilled for the drilling program that will
take place beginning in July of 2001 with Suncor as operator on the Castle Rock
Properties in Montana. Subject to obtaining the consent of Quaneco and Suncor,
and as consideration for CCBM funding the above-mentioned AFE, CCBM shall
receive an undivided 6.25% working interest in the wells drilled and the leases
underlying an 80 acre area attributable thereto during the 2001 drilling program
conducted by Suncor. The $225,000 funded and paid by CCBM shall be part of the
$5,000,000 drilling program described in Section 2.1.

2.6 Rentals, Surface Use and Option Payments. Subject to the provisions of the
JOA, RMG and CCBM will each be obligated to pay one-half (1/2) of all on going
payments of any kind to maintain any and all leases, options and farmin
agreements and pay for all surface use

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agreements and other ongoing obligations on the Acquired Assets. RMG shall AFE
CCBM for these costs (not to exceed $500,000), which will be part of the
$5,000,000 drilling program. After completion of the $5,000,000 drilling program
or expenditures of this type reaching the $500,000 cap each party shall be
responsible for its share of these payments.

2.7 Land Bank Fund. CCBM agrees that it will use its best efforts to seek out,
obtain and secure financing and raise no less than $20 million to be used for
the acquisition of lease hold interests to develop oil and gas properties within
the AMI. Such funds will be secured and be available for use on or before June
30, 2002, subject to the terms of the financing agreement(s) between the
lender(s) and RMG and CCBM. In the event CCBM is unable to establish the Land
Bank Fund prior to June 30, 2002, RMG shall notify CCBM of its desire to extend
the AMI for or before December 20, 2002. Failure to notify CCBM shall result in
AMI being reduced to a 6 mile radius on all then existing properties held
jointly by the Parties.

                                   ARTICLE III
                  RIGHT TO RECORDS AND INSPECTION OF PROPERTIES

3.1 Book and records. Upon 10 days of CCBM's written request, RMG shall provide
CCBM with access to and upon request the ability to copy all books, maps,
records, title records, files or other information related to the Acquired
Assets in the possession of RMG, or within RMG's control to obtain, relating to
RMG's activity on the Acquired Assets and within the AMI. CCBM shall reimburse
RMG for its reasonable costs in providing such copies. Similarly, upon 10 days
written request, CCBM shall provide to RMG access to and upon request, the
ability to copy all books, maps, records, title records, files or other
information related to the RMG Assets in the possession of CCBM, or within
CCBM's control to obtain, relating to CCBM's activity on the RMG Assets and
within the AMI. RMG shall reimburse CCBM for its reasonable costs in providing
such copies.

3.2 Access to Inspection of the RMG Assets. Either Party may independently
inspect or cause to be inspected by other qualified persons, at their sole cost
and expense, all aspects of the RMG Assets which in its sole discretion are
relevant or material to their undivided working interest in the RMG Assets.

                                   ARTICLE IV
                                     CLOSING

4.1 CCBM's Conditions to Closing.

The obligation of CCBM to close the transaction consistent with this Agreement
is subject to CCBM's satisfaction, as determined solely by CCBM, of the
following conditions which are for the sole benefit of CCBM and which may be
waived in whole or in part by CCBM at any time on or before the Closing Date.

         (a) CCBM shall have satisfied itself regarding RMG's represented
         interests in the Acquired Assets including, but not limited to,
         verification that RMG owns such

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         represented interests as listed on the attached on Exhibit "A" and is
         capable of assigning such interest to CCBM;

         (b) Any consents, rights of refusal or other restrictions on the
         farmout, transfer, disposition, sale or assignment by RMG of any of the
         working interests or net revenue interests represented in Exhibit "A"
         shall have been waived or complied with;

         (c) CCBM shall have the opportunity to review, and shall be satisfied
         with, all agreements relating to RMG's interest in the Acquired Assets.

         (d) RMG shall continue to diligently pursue all permits necessary for
         drilling and production for state, fee and federal land locations on
         the Acquired Assets and CCBM shall be satisfied with the status
         thereof;

         (e) Subject to no material change in the environmental issues or
         liabilities occurring between May 31, 2001 and the Closing Date, CCBM
         shall have the opportunity to conduct an environmental audit or
         inspection on the Acquired Assets and be satisfied that there are:

                  (1)      no significant environmental issues which would
                           constrain coalbed methane exploration, development
                           and production activity, and

                  (2)      no significant outstanding environmental liabilities;

         (f) If appropriate, CCBM shall have received releases and registerable
         discharges from all parties holding security interests against RMG's
         interest in the Acquired Assets.

         (g) Subject to no material change in the facts occurring between May
         31, 2001 and the Closing Date, CCBM shall review and evaluate any and
         all claims or proceedings threatened or pending involving RMG in
         connection with the Acquired Assets.

         (h) All of RMG's interest in the Acquired Assets shall not be subject
         to any contracts for the sale of petroleum substances.

         (i) Subject to the approval of the Board of Directors of CCBM and the
         consent and approval CCBM's lenders under existing debt agreements.

4.2 RMG's Conditions to Closing.

The obligation of RMG to close the transaction consistent with this Agreement is
subject to RMG's satisfaction, as determined solely by RMG, of the following
conditions which are for the sole benefit of RMG and which may be waived in
whole or in part by RMG at any time on or before the Closing Date.

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         (a)  RMG shall have received the $50,000 non-refundable Earnest Money
              Deposit as described in Section 1.3.

         (b)  RMG shall have satisfied itself that CCBM will commit to
              establishing a "Land Bank" in the amount of $20 million or more
              from outside sources for the financing of future land acquisitions
              within the AMI. If such Land Bank is not established by June 30,
              2002, the AMI described in paragraph 2.7, may be reduced
              consistent with paragraph 2.7. If a Land Bank is established in an
              amount less than $20 million and committed to be used to fund an
              AMI acquisition, such AMI Interest shall be included in the
              existing joint property package.

         (c)  Subject to the approval of the Board of Directors of RMG.

4.3 Closing Date. The transfer of an undivided fifty percent (50%) of RMG's
right, title and interest in the RMG Assets to CCBM and all other transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of RMG in Riverton, Wyoming at 2:00 p.m., local time on June 29, 2001 or at such
other time or other place as RMG and CCBM may mutually agree (the "Closing
Date").

4.4 Deliveries by RMG. At the Closing, RMG shall deliver the following to CCBM,
the receipt of which shall be a condition to Closing:

         (a)  The duly executed Assignment in recordable form transferring an
              undivided fifty percent (50%) of RMG's right, title and interest
              in the RMG Assets to CCBM.

         (b)  Such other documents as may are reasonably requested by CCBM or
              its counsel.

4.5 Deliveries by CCBM. At the Closing, CCBM shall deliver the following, the
receipt of which shall be a condition to Closing:

         (a)  The Note and Mortgage as described in Section 1.4. (a).

                                    ARTICLE V
                      REPRESENTATIONS AND WARRANTIES OF RMG

The RMG represents and warrants to CCBM as follows:

5.1 Organization and Qualification. RMG is a corporation duly organized under
the laws of the State of Wyoming, and has all corporate powers to own its
properties and to carry on its business as now owned and operated by RMG. RMG is
qualified to do business, is in good standing, and has all appropriate or
necessary licenses in each jurisdiction or place in which the nature of its
business or the character of its properties requires such registration.

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5.2 Authority to Transfer. RMG has the right, power, legal capacity and
authority to enter into this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby, and no approvals,
authorizations or consents of any person other than RMG are necessary in
connection with RMG's execution, performance and delivery of this Agreement.
This Agreement constitutes the legal, valid and binding obligation of RMG,
enforceable against RMG in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles relating to or limiting creditor's rights generally.

5.3 Title to Acquired Assets. RMG has unencumbered title to all of the Acquired
Assets.

5.4 Condition of Acquired Assets. From May 31, 2001 through the Closing Date,
RMG shall not enter into any agreements, or amend any existing agreements
relating to the Acquired Assets, nor shall RMG enter into any agreements
relating to the sale of production of petroleum substances therefrom, save and
except for such agreements and expenditures as are in the normal course of
business or approved in writing by CCBM. Furthermore, RMG agrees to not directly
or indirectly market its interest in the Acquired Assets or the AMI to any other
party through the Closing Date.

5.5 Agreement Not in Breach of Other Instruments. Subject to the consent
requirements in the Suncor, Quantum and Oyster Ridge Agreements, the execution
and delivery of this Agreement and the other documents to be executed and
delivered in connection herewith and the consummation of the transactions
contemplated hereby and thereby will not result in or constitute any of the
following: (a) a default or event that, with the giving of notice or lapse of
time, or both, would be a default breach or violation of any operating agreement
of RMG or any agreement, instrument or arrangement to which RMG is a party or by
which RMG or any assets or property of RMG is bound; (b) an event that would
permit any party to terminate any contract or other agreement; or (c) the
creation or imposition of any lien, charge, or encumbrance an any of the
Acquired Assets.

5.6 Indemnity Suncor. RMG agrees to defend, indemnify and hold harmless CCBM,
and its Acquired Asset from any and all debts, losses, liabilities, duties,
damages, obligations, payments, settlement, judgment or compromise, cost and
expenses (including, without limitation, any attorneys' fees and any and all
expenses incurred for investigating, preparing or defending any such Action)
under, out of or in connection with any dispute, suite arbitration, or
proceeding (collectively "Action") related in any way whatsoever to the Article
IV, Section 4.2, ;under the Suncor Agreement.

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                                   ARTICLE VI
                     REPRESENTATIONS AND WARRANTIES OF CCBM

CCBM represents and warrants to RMG as follows:

6.1 Organization and Qualifications. CCBM is a corporation duly organized under
the laws of the State of Texas, and has all corporate power to own its
properties and to carry on its business as now owned and operated by CCBM. CCBM
is qualified to do business, is in good standing, and has all appropriate or
necessary licenses in each jurisdiction or place in which the nature of its
business or the character of its properties requires such registration.

6.2 Authority to Purchase. CCBM has the right, power, legal capacity and
authority to enter into this Agreement, to perform its obligation hereunder and
to consummate the transactions contemplated hereby, and no approvals,
authorizations or consents of any person other than CCBM is necessary in
connection with CCBM's execution, performance and delivery of this Agreement.
This Agreement constitutes the legal, valid, and binding obligation of CCBM,
enforceable against CCBM in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles relating to or limiting creditor's rights generally.

                                   ARTICLE VII
                                   TERMINATION

7.1 Termination. This Agreement may only be terminated by the mutual consent of
both RMG and CCBM.

                                  ARTICLE VIII
                                 CONFIDENTIALITY

8.1 Confidentiality

     (a) Until the Closing Date, there shall be no public release of information
     of any kind by RMG or CCBM with respect to this transaction unless mutually
     approved by the parties, or, if such release is required by the law,
     including necessary disclosure under the security laws, then the parties
     shall receive and approve a copy of such release at least twenty four (24)
     hours prior to its dissemination, unless waived by both parties.

     (b) In the event CCBM does not close the transaction consistent with this
     Agreement, CCBM agrees to return all information of any kind obtained by it
     from RMG, and its agent and representative, concerning the Acquired Assets,
     including proprietary data obtained from drilling and testing coalbed
     methane wells on the Acquired Assets ("Information") and to keep any and
     all Information obtained by CCBM or its agents and representatives
     confidential for a period of four (4) years from May 31, 2001. The
     Information obtained by CCBM shall not be considered confidential if:

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         (i)   It obtained such Information from the public domain other than as
               a result of a disclosure by RMG, or one of its agents or
               representatives;

         (ii)  Such Information became available to CCBM on a non-confidential
               basis from a source other than RMG, or one of its agents or
               representatives, where that source has represented CCBM it is
               entitled to disclose it; or

         (iii) Such Information was known to CCBM on a non-confidential basis
               prior to its disclosure to CCBM by RMG, or one of its agents or
               representatives.

                                   ARTICLE IX
                               GENERAL PROVISIONS

9.1 Notices. All notices and other communication hereunder ("Notices") shall be
in writing and shall be deemed given upon personal delivery, facsimile
transmissions (with written or facsimile confirmation of receipt), or delivery
by a reputable overnight commercial delivery service (delivery, postage or
freight charges prepaid) on the fourth day following deposit in the United
States mail (if sent by registered or certified mail, return receipt requested,
delivery, postage or freight charges prepaid), addressed to the parties at the
following addresses (or at such other address for a party as shall be specified
by like Notice):

         If to RMG:

         Rocky Mountain Gas, Inc.
         1 East Alger
         Suite 206
         Sheridan, WY  82801
         Fax: (307) 673-9711
         Attn: Peter G. Schoonmaker, President

         And

         U.S. Energy Corp.
         877 N. 8TH West
         Riverton, WY 82501
         Fax: (307) 857-3050
         Attn: Keith G. Larsen, President

         If to CCBM:

         CCBM, INC.
         14701 St. Mary's Lane, Suite 800
         Houston, TX 77079
         Fax: (281) 496-0884
         Attn: Ken Trahan

                                       12
<PAGE>   13

9.2 Survival of Representations, Warranties, Covenants and Agreements, All
representations, warranties, covenants, obligations, liabilities and agreements
of the parties contained in this Agreement or in any schedule, document
certificate or other instrument delivered by or on behalf of the parties
pursuant to this Agreement, shall survive the Closing Date, except for the
representations and warranties contained in Sections 1.2 and 5.3, which are
limited in their application solely to events or circumstances occurring or
arising before the transfer of the Acquired Assets to CCBM.

9.3 Further Assurances. The parties hereto agree to do such further acts and to
execute and deliver any additional agreements or documents as maybe required to
consummate, evidence or confirm the transactions and agreements contained in
this Agreement.

9.4 Entire Agreement, Amendment Waivers. This Agreement and any exhibits
delivered by the parties hereto contemporaneously herewith constitute the entire
agreement between the parties pertaining to the subject matter contained herein
and supersede all prior agreement, representations and understandings of the
parties hereto. No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by all of the parties hereto.

9.5 Binding Upon Heirs and Successors. This Agreement shall be binding upon and
inure to the benefit of the respective successors, heirs, assigns and personal
representatives of the parties hereto.

9.6 Signatures in a Representative Capacity. Each party whose signature is
affixed hereto in a representative capacity represents and warrants that he is
authorized to execute this Agreement on behalf of and to bind the entity on
whose behalf his signature is affixed.

9.7 Governing Law. This Agreement shall be construed in accordance with and be
governed by the laws of the State of Wyoming.

9.8 Severability. In the event any provision of this Agreement shall be held to
be void or unenforceable, the remaining provisions shall remain in full force
and effect.

9.9 Expenses. Each party to this Agreement shall bear its own expenses in
connection with this Agreement and the transactions contemplated hereby.

9.10 Currency. All references herein to dollars or "$" shall be in the currency
of the United States of America.

9.11 Headings. The paragraph heading in this Agreement are included for ease and
reference only and are in no way intended to describe, interpret, define or
limit the scope of this Agreement or any provisions hereof.

9.12 Arbitration. Any dispute that arises by virtue of this Agreement between
CCBM and RMG shall be resolved by arbitration pursuant to the rules and
procedures of the American

                                       13

<PAGE>   14

Arbitration Association and governed by the laws of the State of Wyoming.
Arbitration shall be conducted in the state of Colorado.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the _____ day
of June, 2001.

ROCKY MOUNTAIN GAS, INC.                    CCBM, INC.

By:                                         By:
   ---------------------------------           ---------------------------------

Title:                                      Title:
      ------------------------------              ------------------------------

                                       14<PAGE>   1

[Note: Asterisks denote material omitted that has been separately filed with the
SEC pursuant to a request for confidential treatment.]

                                                                   Exhibit 10.39

                          MONT BELVIEU STORAGE CAPACITY

                               PURCHASE AGREEMENT

                                 BY AND BETWEEN

                            EOTT ENERGY LIQUIDS, L.P.

                                       AND

                             ENRON GAS LIQUIDS, INC.

                               DATED JUNE 29, 2001

<PAGE>   2

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

                                   ARTICLE 1
                                   DEFINITIONS

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

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

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

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

                                   ARTICLE 2
                        PURCHASE OF STORAGE AND SERVICES

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

                                       -2-
<PAGE>   3

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

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

                                   ARTICLE 3
                                      FEES

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

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

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

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

                                      -3-
<PAGE>   4

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

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

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

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

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

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

                                      -4-
<PAGE>   5

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

                                   ARTICLE 4
                                   NOMINATIONS

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

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

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

                  (a) Name of purchaser or shipper;

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

                  (c) Effective date and time;

                  (d) Downstream and/or upstream Transporting Pipeline;

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

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

                                      -5-
<PAGE>   6

                  (g) Number of Barrels and/or Gallons; and

                  (h) the Product nominated.

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

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

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

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

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

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

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

                                      -6-
<PAGE>   7

interest therein or in the value thereof. Seller acknowledges that Buyer owns
and has title to all volumes of Line Pack Product. Title to and/or legal custody
of the Products in storage and of the Line Pack Product shall at all times be
and remain in Buyer.

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

                                   ARTICLE 6
                              QUALITY AND PRESSURE

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

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

                                   ARTICLE 7
                                   MEASUREMENT

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

                                      -7-
<PAGE>   8

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

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

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

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

                                   ARTICLE 8
                                   OPERATIONS

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

         8.2 Seller Obligations. Seller's obligations under Article 2 shall be
subject to Seller's scheduling and customary operational restrictions. Seller
agrees to own, operate and maintain

                                       -8-
<PAGE>   9

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

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

                                   ARTICLE 9
                              TERM AND TERMINATION

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

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

                                       -9-
<PAGE>   10

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

                                   ARTICLE 10
                         REPRESENTATIONS AND WARRANTIES

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

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

                  (b) It is duly organized, validly existing, and in good
         standing under the laws of the jurisdiction of its formation, and is
         duly qualified to conduct its business in each jurisdiction in which it
         is required to be so qualified, and it has the legal right, power, and
         authority to execute and deliver this Agreement and to perform its
         obligations under this Agreement, and all regulatory authorizations
         have been maintained as necessary for it to legally perform its
         obligations hereunder;

                  (c) Entering into this Agreement and performing its
         obligations hereunder are within its corporate or partnership powers,
         have been duly authorized by all necessary corporate or partnership
         action on its part, and do not and will not violate any provision

-------------
[*****]  Indicates that material has been omitted and confidential treatment
         requested therefore. All such material has been filed separately with
         the Commission pursuant to Rule 24b-2 of the Securities Exchange Act
         of 1934.

                                      -10-
<PAGE>   11

         of law or any rule, regulation, order, writ, judgment, decree, or other
         determination presently in effect applicable to it or to its charter
         and other governing documents;

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

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

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

                                   ARTICLE 11
                     BILLING, PAYMENT AND EVENTS OF DEFAULT

         11.1 Billing. Seller shall on or before the 12th Day of each Month,
submit to Buyer a statement showing the following information with regard to the
storage capacity and related services provided in the prior Month:

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

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

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

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

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

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

         11.2 Payment. Buyer shall pay, or cause to be paid, to Seller to an
account to be designated in writing by Seller from time to time, the amount
shown as due in the statement described in Section 11.1 above, on or before the
fifth day (or first Business Day following such fifth day if such day does not
fall on a Business Day) of the subsequent Month of such statement.

                                      -11-
<PAGE>   12

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

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

         Upon the occurrence and during the continuation of an Event of Default
as to the Defaulting Party, the other Party (the "Non-Defaulting Party") may, in
its sole discretion, (a) accelerate and liquidate the Parties' respective
obligations under this Agreement by establishing, and notifying the Defaulting
Party of, an early termination date (which shall be no earlier than the date of
such notice) on which this Agreement shall terminate ("Early Termination Date"),
(b) withhold any payments due to the Defaulting Party until such Event of
Default is cured, or (c) set off against any amounts due to the Defaulting Party
any or all amounts which the Defaulting Party owes to the Non-Defaulting Party
(without prejudice and in addition to any right of setoff, combination of
accounts, lien, or other right to which the Non-Defaulting Party is at any time
otherwise entitled (whether by operation of law, contract, or otherwise)). If
notice of an Early Termination Date is given under this Section 11.4, the Early
Termination Date will occur on the designated date, whether or not the relevant
Event(s) of Default is then continuing. Any rights of

                                      -12-
<PAGE>   13

a Non-Defaulting Party under this Section 11.4 shall be in addition to such
Non-Defaulting Party's other rights under this Agreement, at law or in equity.

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

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

         11.7 Credit Support. If at any time the Seller Guarantor has an
Unacceptable Credit Rating or no Credit Rating, then within five (5) days after
the occurrence of such circumstance and as long as such circumstance shall
exist, at Buyer's request, Seller shall cause to be issued and maintained for
the benefit of Buyer an irrevocable letter of credit in an amount reasonably
requested by Buyer not to exceed $[*****], having an effective period of one
year and automatically renewable at the end of each one year period until the
end of the term of this Agreement, issued by a bank reasonably acceptable to the
Buyer, and otherwise having terms and conditions reasonably acceptable to Buyer.
The letter of credit may be drawn upon by Buyer if Seller fails to pay any
amount owed to Buyer hereunder. In the event the letter of credit is drawn to
satisfy any of Seller's obligations, Seller shall promptly, but in no event more
than five (5) days following the date that the letter of credit is drawn,
restore the letter of credit to its original amount. The letter of credit may be
drawn upon in part or in full by Buyer if Seller fails to maintain the letter of
credit as required or Seller fails to renew the letter of credit at least twenty
(20) days prior to its expiration, in which case Buyer may hold the proceeds
thereof for application from time to time for the obligations of Seller under
this Agreement until the letter of credit is restored, in each case without
limiting Seller's obligation to maintain the letter of credit as required or any
Event of Default applicable thereto.

-------------
[*****]  Indicates that material has been omitted and confidential treatment
         requested therefore. All such material has been filed separately with
         the Commission pursuant to Rule 24b-2 of the Securities Exchange Act
         of 1934.

                                      -13-
<PAGE>   14

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

                                   ARTICLE 12
                                      TAXES

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

                                   ARTICLE 13
                              INSURANCE, LIABILITY

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

         13.2 Seller Liability. Subject to the provisions of Article 14 and
Section 13.3 hereof, Seller shall be liable for and agrees to indemnify, defend
and save Buyer harmless from and against all claims, demands, suits, actions,
debts, accounts, damages, costs, losses, liabilities, and expenses of any kind
and however made or incurred, arising out of any misrepresentation by Seller,
the failure by Seller to perform any covenant, obligation or requirement under
this Agreement or the negligent or willful acts or omissions of Seller;
PROVIDED, HOWEVER, THAT IN NO EVENT SHALL SELLER BE LIABLE TO BUYER FOR ANY
SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL CLAIMS OF ANY CHARACTER,
INCLUDING WITHOUT LIMITATION, LOSS OF USE, LOST PROFITS OR

                                      -14-
<PAGE>   15

REVENUES (OTHER THAN LOST PROFITS SUFFERED BY BUYER AND RELATED COSTS INCURRED
BY BUYER TO PHYSICALLY REPLACE PRODUCT NOT DELIVERED BY SELLER HEREUNDER AND FOR
WHICH SELLER HAS AN OBLIGATION TO DELIVER HEREUNDER), COST OF CAPITAL,
CANCELLATION OF PERMITS, OR TERMINATION OF CONTRACTS, ADDITIONAL OUT-OF-POCKET
EXPENSES INCURRED BY BUYER, TORT OR CONTRACT CLAIMS OTHER THAN CONTRACT CLAIMS
ARISING OUT OF THIS AGREEMENT, CONSEQUENTIAL PROPERTY DAMAGES SUFFERED BY BUYER,
AND IRRESPECTIVE OF WHETHER CLAIMS FOR SUCH DAMAGES ARE BASED UPON CONTRACT,
WARRANTY, NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE.

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

                                   ARTICLE 14
                                  FORCE MAJEURE

         14.1 Definition. An event of "Force Majeure" shall mean a restraint on
Seller's performance of one or more of its obligations under this Agreement
("Obligation" or "Obligations") resulting from a cause not within the control of
Seller (including, but not limited to, acts of God, acts of negligence or
willful misconduct of third parties, whether or not under the control, contract,
or supervision of Seller) and which, by the exercise of generally acceptable
industry standards, the Seller was unable to prevent.

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

                                      -15-
<PAGE>   16

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

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

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

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

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

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

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

         14.7 Exclusions. Seller shall not be entitled to the benefit of the
provisions of Force Majeure hereunder if any or all of the following
circumstances prevail: (i) the failure resulting in an event of Force Majeure
was caused by the gross negligence or willful misconduct of Seller; (ii) the
failure was caused or extended by Seller where Seller failed to remedy the event
by making all reasonable efforts (short of litigation, if such remedy would
require litigation); or (iii) the failure was caused by lack of funds.

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

                                      -16-
<PAGE>   17

                                   ARTICLE 15
                                     NOTICES

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

         If to Buyer:

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

         With a copy to:

                  Enron Global Markets LLC
                  Attention: Vice President & General Counsel
                  1400 Smith Street
                  Houston, Texas 77002
                  Fax: 713-646-3490

         If to Seller:

                  EOTT Energy Liquids, L.P.
                  Attention:        Vice President & General Counsel
                  By courier:       2000 W. Sam Houston Parkway S., Suite 400
                                    Houston, Texas 77042
                  By mail:          P.O. Box 4666
                                    Houston, Texas 77210-4666
                  Phone:            713-993-5027
                  Fax:              713-993-5813

                                      -17-
<PAGE>   18

                                   ARTICLE 16
                                  MISCELLANEOUS

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

         16.2 Arbitration. ANY AND ALL DISPUTES ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, INCLUDING ANY QUESTION REGARDING ITS EXISTENCE, VALIDITY,
OR TERMINATION, SHALL BE RESOLVED BY BINDING ARBITRATION GOVERNED BY THE FEDERAL
ARBITRATION ACT AND CONDUCTED IN ACCORDANCE WITH THE AMERICAN ARBITRATION
ASSOCIATION COMMERCIAL ARBITRATION RULES ("RULES"), WHICH RULES ARE DEEMED TO BE
INCORPORATED BY REFERENCE INTO THIS CLAUSE. THE NUMBER OF ARBITRATORS SHALL BE
THREE, EACH PARTY HAVING THE RIGHT TO APPOINT ONE ARBITRATOR, WHO SHALL TOGETHER
APPOINT A THIRD NEUTRAL ARBITRATOR WITH AT LEAST FIVE YEARS EXPERIENCE IN THE
INDUSTRY WITHIN 30 DAYS IN ACCORDANCE WITH THE RULES. THE LOCATION OF
ARBITRATION HEARINGS SHALL ALTERNATE BETWEEN THE OFFICES OF BUYER AND SELLER,
THE FIRST BEING HELD AT SELLER'S OFFICES. THE PARTIES HEREBY EXPRESSLY WAIVE ANY
RIGHT OF APPEAL TO ANY COURT. THERE WILL BE NO WRITTEN TRANSCRIPT OR RECORD OF
THE ARBITRATION PROCEEDING. THE ARBITRATORS WILL ONLY MAKE THEIR AWARD AND WILL
NOT RENDER A WRITTEN OPINION EXPLAINING THEIR AWARD. IT IS EXPRESSLY AGREED THAT
THE ARBITRATORS SHALL HAVE NO AUTHORITY TO AWARD ATTORNEY'S FEES (EXCEPT FOR
LEGAL COSTS EXPRESSLY PROVIDED FOR HEREIN), OR CONSEQUENTIAL, SPECIAL, INDIRECT,
TREBLE, EXEMPLARY OR

                                      -18-
<PAGE>   19

PUNITIVE DAMAGES OF ANY TYPE, THE PARTIES HEREBY WAIVING THEIR RIGHTS, IF ANY,
TO RECOVER ATTORNEY'S FEES (EXCEPT FOR LEGAL COSTS EXPRESSLY PROVIDED FOR
HEREIN) AND CONSEQUENTIAL, SPECIAL, INDIRECT, TREBLE, EXEMPLARY AND PUNITIVE
DAMAGES WITH RESPECT TO THIS AGREEMENT. ALL OF THE ARBITRATORS' ORDERS AND
DECISIONS MAY BE ENFORCEABLE IN, AND JUDGMENT UPON ANY AWARD RENDERED IN THE
ARBITRATION PROCEEDING MAY BE CONFIRMED AND ENTERED BY ANY COURT HAVING PROPER
JURISDICTION. THE PARTIES AGREE THAT ALL ARBITRATION PROCEEDINGS CONDUCTED
HEREUNDER AND THE DECISION OF THE ARBITRATORS SHALL BE KEPT CONFIDENTIAL AND NOT
DISCLOSED, EXCEPT TO A PARTY'S AFFILIATES, ACCOUNTANTS, AND LAWYERS AND AS
REQUIRED BY LAW.

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

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

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

         16.6 Non-Waiver; Duty to Mitigate; No Partnership or Third Party
Beneficiaries. No waiver by any Party of any its rights with respect to the
other Party or with respect to any matter or default arising in connection with
this Agreement shall be construed as a waiver of any subsequent right, matter,
or default whether of a like kind or different nature. Any waiver shall be in
writing signed by the waiving Party. Each Party agrees that it has a duty to
mitigate damages. Except as provided in Section 9.3, nothing contained in this
Agreement shall be construed or constitute any Party as the employee, agent,
partner, joint venturer, or contractor of any other Party. This Agreement is
made and entered into for the sole protection and legal benefit of the Parties,
and their permitted successors and assigns, and no other person shall be a

                                      -19-
<PAGE>   20

direct or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement.

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

                           [Signature Page to Follow]

                                      -20-
<PAGE>   21

[Note: Asterisks denote material omitted that has been separately filed with the
SEC pursuant to a request for confidential treatment.]

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

                                       BUYER

                                       ENRON GAS LIQUIDS, INC.

                                       By:  /s/ JOHN NOWLAN
                                          --------------------------------------
                                       Name:    John Nowlan
                                            ------------------------------------
                                       Title:   Vice President
                                             -----------------------------------

                                       SELLER

                                       EOTT ENERGY LIQUIDS, L.P.

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

                                       By:  /s/ DANA R. GIBBS
                                          --------------------------------------
                                       Name:    Dana R. Gibbs
                                            ------------------------------------
                                       Title:   President & COO
                                             -----------------------------------

<PAGE>   22

                                   APPENDIX I
                                   DEFINITIONS

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

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

         "AGREEMENT" has the meaning in the preamble hereto.

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

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

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

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

                                 Definitions-22
<PAGE>   23

         "BARREL" means 42 Gallons.

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

         "BUYER GUARANTOR" means Enron Corp.

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

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

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

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

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

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

         "EFFECTIVE DATE" means the date of this Agreement.

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

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

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

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

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

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

                                 Definitions-23

<PAGE>   24

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

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

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

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

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

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

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

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

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

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

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

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

                                 Definitions-24

<PAGE>   25

each Storage Well and (iii) customary industry practice and historical operating
practices at the Storage Facilities.

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

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

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

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

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

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

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

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

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

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

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

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

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

                                 Definitions-25

<PAGE>   26

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

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

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

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

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

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

         "SELLER GUARANTOR" means EOTT Energy Operating Limited Partnership.

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

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

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

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

         "STORAGE WELLS" means the ten (10) storage wells and related facilities
owned and operated by Seller, together with the associated compressors,
dehydrators and other surface equipment (hereinafter the "Surface Facilities"),
all located in Mont Belvieu, Texas. As those additional storage wells listed in
Exhibit B-2 are brought online at Seller's facilities associated with the
Storage Facilities and become available for storage of Product, such storage
wells will

                                 Definitions-26

<PAGE>   27

be included as Storage Wells. Each Storage Well shall include, but not be
limited to the following:

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

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

                  (iii)  All brine and fresh water handling facilities.

                  (iv)   A fire protection system.

                  (v)    A products injection pump.

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

                  (vii)  Measurement facilities.

                  (viii) A liquids chromatograph.

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

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

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

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

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

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

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

                                 Definitions-27

<PAGE>   28

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

                                 Definitions-28
<PAGE>   29
                                    EXHIBIT A
                     DESCRIPTION OF STORAGE PIPELINE SYSTEM

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

MTBE Plant

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

Mont Belvieu

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

The Grid System

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

Dock

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

<PAGE>   30
                                   EXHIBIT B-1
                     ITEMIZED INFORMATION FOR STORAGE WELLS

<Table>
<Caption>
----------------------------------------------------------------------------------------------
                                                                                    Additional
                                          Available              Allotted            Allotted
  Storage                                  Storage               Storage             Storage
   Well            Product                Capacity               Capacity           Capacity
----------------------------------------------------------------------------------------------
<S>               <C>                   <C>                   <C>                  <C>
     1             Y-Grade                 721,200               576,960              36,060

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

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

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

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

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

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

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

    10              Normal                1,708,175             1,366,540             85,409
                    Butane

----------------------------------------------------------------------------------------------
</Table>

o        ALL QUANTITIES LISTED ABOVE IN BARRELS.

<PAGE>   31
                                   EXHIBIT B-2
                ITEMIZED INFORMATION FOR ADDITIONAL STORAGE WELLS

<Table>
<Caption>
--------------------------------------------------------------------------------------
                                Available          Allotted       Additional Allotted
                                 Storage           Storage              Storage
Storage Well     Product        Capacity           Capacity             Capacity
--------------------------------------------------------------------------------------
<S>              <C>           <C>                <C>                 <C>
     11            N/A           812,264            81,227              609,198

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

     13            N/A           860,498            86,050              645,374

--------------------------------------------------------------------------------------
</Table>

o        ALL QUANTITIES LISTED ABOVE IN BARRELS.

<PAGE>   32
                                    EXHIBIT C
                           RECEIPT AND DELIVERY POINTS
<TABLE>
<CAPTION>

DISTRIBUTION LINES:

    LINE        LINE SIZE    METER NUMBER        METER SIZE    USUAL SERVICE      CUSTODY TRANSFER
--------------------------------------------------------------------------------------------------------
<S>                 <C>      <C>                    <C>        <C>              <C>
1A                  6"       1AA & 1AB              2" & 3"    Normal Butane         At Customer

1B                  6"       1B                       4"       Gasoline              At Customer

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

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

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

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

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

CROSS CHANNEL LINES:
                                                                                        METER
    LINE        LINE SIZE                         METER SIZE       SERVICE             CUSTODY
--------------------------------------------------------------------------------------------------------
Line 1           6" & 8"     L1                       4"       Ethane             At Morgan's Point

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

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

Line 9              8"       L9A & L9B                4"       Utility           At Storage Facility

MORGAN'S POINT LINES:
                                                                                        METER
    LINE        LINE SIZE                         METER SIZE       SERVICE             CUSTODY
--------------------------------------------------------------------------------------------------------
Line 2              6"       Manifold Meter         2 1/2"     Ethane          At Morgan's Point

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

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

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

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

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

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

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

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

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

(1) If Storage Facility is receiving material, custody will transfer at shippers
meter. If Storage Facility is shipping material, custody will transfer at
Storace Facility meter.
<PAGE>   33
                                   EXHIBIT - D

                         PRODUCT SPECIFICATION - ETHANE
<TABLE>
<CAPTION>
                                                                  Method-Latest Rev.
Composition, Liquid Volume %

<S>                                                             <C>
   Methane                                                      3.0% Max.

   Ethane                                                      95.0% Min.    ASTM D-2163

   Propane                                                      5.0% Max.

   Butanes & Heavier                                           None

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

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

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

   Free Water                                                  None
</TABLE>

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

<PAGE>   34
                                   EXHIBIT - D

                      PRODUCT SPECIFICATION - HD 5 PROPANE
<TABLE>
<CAPTION>

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

   Volatile Residue:
   Temperature at 95% evaporation, deg. F., Max.               -37 degrees   ASTM D-1837

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

   Oil Stain Observation                                       Pass *        ASTM D-2158

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

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

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

   Free Water                                                  None
</TABLE>

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

** This method may not accurately determine the corrosivity of the liquefied
   petroleum gas if the sample contains corrosion inhibitors or other chemicals
   which diminish the corrosivity of the sample to the copper strip. Therefore,
   the addition of such compounds for the sole purpose of biasing the test is
   prohibited.
<PAGE>   35
                                   EXHIBIT - D

                       PRODUCT SPECIFICATION - ISO-BUTANE
<TABLE>
<CAPTION>
                                                                   Method-Latest Rev.
Composition, Liquid Volume %

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

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

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

   Free Water                                        None
</TABLE>

*  This method may not accurately determine the corrosivity of the liquefied
   petroleum gas if the sample contains corrosion inhibitors or other chemicals
   which diminish the corrosivity of the sample to the copper strip. Therefore,
   the addition of such compounds for the sole purpose of biasing the test is
   prohibited.
<PAGE>   36
                                   EXHIBIT - D

                      PRODUCT SPECIFICATION - NORMAL BUTANE
<TABLE>
<CAPTION>
                                                                             Method-Latest Rev.
Composition, Liquid Volume %
<S>                                                            <C>           <C>
   Normal Butane                                               95.0 Min.     ASTM D-2163
   Iso-Butane                                                   3.0 Max.     ASTM D-2163
   Pentanes                                                     2.0 Max.     ASTM D-2163
   Propane                                                      2.0 Max.     ASTM D-2163

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

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

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

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

   Free Water                                                  None
</TABLE>

*  This method may not accurately determine the corrosivity of the liquefied
   petroleum gas if the sample contains corrosion inhibitors or other chemicals
   which diminish the corrosivity of the sample to the copper strip. Therefore,
   the addition of such compounds for the sole purpose of biasing the test is
   prohibited.
<PAGE>   37
                                   EXHIBIT - D
                              PRODUCT SPECIFICATION

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

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

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

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

Free Water Content                                          None

Total Oxygenates, ppm wt., Max.                             20.0             UOP-845
   (Methanol, CO2, heavy alcohols, ethers, glycols)
      Methanol, ppm wt., Max.                               20.0
      IPA and Heavier Alcohols, ppm wt., Max.                5.0
      MTBE and Other Ethers, ppm wt., Max.                   2.0
      Other Oxygenates, ppm wt., Max.                        5.0

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

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

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

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

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

<PAGE>   38
                                   EXHIBIT - D

                    PRODUCT SPECIFICATION - NATURAL GASOLINE
<TABLE>
<CAPTION>
                                                                                  Test Methods
                                                    Minimum          Maximum      Latest Revision

<S>                                            <C>                <C>            <C>
Reid Vapor Pressure @ 100(degree)F                                  13.5 psi      ASTM D-323-82

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

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

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

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

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

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

Free Water                                                            None
</TABLE>

<PAGE>   39
                                   EXHIBIT - D
                              PRODUCT SPECIFICATION

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

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

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

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

Free Water Content                                           None

Total Oxygenates, ppm wt., Max.                               1.0         UOP-845
   (Methanol, CO2, heavy alcohols, ethers, glycols)

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

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

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

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

NOTE: These specifications define only a basic purity for this product. The
      product is to be free of any contaminates that might render the product
      unsuitable for isomerization.
<PAGE>   40
                                  SCHEDULE 3.1

STORAGE PURCHASE FEE

            DATE                      Rate             Annual Volumes
            ----                      ----            ---------------
Jul. 1, 2001 - Dec. 31, 2001        $[*****]             60,911,438
Jan. 1, 2002 - Dec. 31, 2002        $[*****]            121,822,877
Jan. 1, 2003 - Dec. 31, 2003        $[*****]            121,822,877
Jan. 1, 2004 - Dec. 31, 2004        $[*****]            121,822,877
Jan. 1, 2005 - Dec. 31, 2005        $[*****]            121,822,877
Jan. 1, 2006 - Dec. 31, 2006        $[*****]            121,822,877
Jan. 1, 2007 - Dec. 31, 2007        $[*****]            121,822,877
Jan. 1, 2008 - Dec. 31, 2008        $[*****]            121,822,877
Jan. 1, 2009 - Dec. 31, 2009        $[*****]            121,822,877
Jan. 1, 2010 - Dec. 31, 2010        $[*****]            121,822,877
Jan. 1, 2011 - June 30, 2011        $[*****]             60,911,438

THROUGHPUT FEE

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

o        ALL QUANTITIES LISTED ABOVE IN BARRELS.

-------------
[*****]  Indicates that material has been omitted and confidential treatment
         requested therefore. All such material has been filed separately with
         the Commission pursuant to Rule 24b-2 of the Securities Exchange Act
         of 1934.

<PAGE>   41
                                  SCHEDULE 3.5

                      LOADING RATES PER VESSEL AND PRODUCT

                     MTBE               Nat. Gasoline                  PP Mix
                     ----               -------------                  ------

Barge                3,000                 2,300                         N/A

Tank Car               N/A                   150                         N/A

Truck                  100                   150                         100

o        ALL RATES LISTED ABOVE IN BARRELS PER HOUR

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}]]