Document:

<PAGE>
                                                                    EXHIBIT 10.4

                                                                  EXECUTION COPY

================================================================================

                              DEBTOR IN POSSESSION
                           LETTER OF CREDIT AGREEMENT

                          dated as of October 18, 2002

                                      among

                   EOTT ENERGY OPERATING LIMITED PARTNERSHIP,

                     EOTT ENERGY CANADA LIMITED PARTNERSHIP,

                            EOTT ENERGY LIQUIDS, L.P.

                                       and

                    EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,

    as debtors and debtors in possession and as joint and several Borrowers,

                           EOTT ENERGY PARTNERS, L.P.

                                       and

                       EOTT ENERGY GENERAL PARTNER, L.L.C.

             as debtors and debtors in possession and as Guarantors,

                            STANDARD CHARTERED BANK,

                   as LC Agent, LC Issuer and Collateral Agent

                                       and

                        THE LC PARTICIPANTS PARTY HERETO

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                                Page
                                                                                                                ----

<S>                                                                                                            <C>
1.       DEFINITIONS AND RULES OF INTERPRETATION..................................................................2

2.       THE LETTERS OF CREDIT...................................................................................29

         (a)      General........................................................................................29
         (b)      Requesting Letters of Credit...................................................................30
         (c)      Reimbursement and Participations...............................................................30
         (d)      No Duty to Inquire.............................................................................31
         (e)      LC Collateral..................................................................................32
         (f)      Conditions Precedent to Extension of Credit....................................................33
         (g)      Use of Proceeds................................................................................36
         (h)      Mandatory Prepayments..........................................................................37
         (i)      Application of Payments made to LC Agent.......................................................37
         (j)      Interest Rates and Fees; Voluntary Reduction of Maximum Facility Amount........................38

3.       PAYMENTS TO LC PARTICIPANTS.............................................................................39

         (a)      General Procedures.............................................................................39
         (b)      Payment Obligations Absolute...................................................................39
         (c)      Capital Reimbursement..........................................................................39
         (d)      Increased Cost of Letters of Credit............................................................40
         (e)      Notice; Change of Applicable Lending Office....................................................40
         (f)      Availability...................................................................................40
         (g)      Reimbursable Taxes.............................................................................41

4.       INTENTIONALLY OMITTED...................................................................................42

5.       INTENTIONALLY OMITTED...................................................................................42

6.       INTENTIONALLY OMITTED...................................................................................42

7.       OTHER ACTIONS OF DEBTORS................................................................................42

8.       REPRESENTATIONS AND WARRANTIES..........................................................................43

9.       AFFIRMATIVE COVENANTS...................................................................................50

         (a)      Payment and Performance........................................................................50
         (b)      Payment of Expenses............................................................................50
         (c)      Instruments, Documents, Securities or Chattel Paper............................................50
         (d)      Books, Financial Statements and Reports........................................................50
         (e)      Other Information and Inspections..............................................................53
         (f)      Appraisals for Eligible Fixed Assets...........................................................54
         (g)      Notice of Material Events and Change of Address................................................54
</Table>

                                       -i-

<PAGE>

                                TABLE OF CONTENTS
                                   (Continued)

<Table>
<Caption>
                                                                                                                Page
                                                                                                                ----

<S>                                                                                                             <C>
         (h)      Maintenance of Properties......................................................................55
         (i)      Discharge of Liens.............................................................................55
         (j)      Maintenance of Existence and Qualifications....................................................55
         (k)      Payment of Trade Liabilities, Taxes, etc.......................................................55
         (l)      Insurance......................................................................................56
         (m)      Performance on Borrowers' Behalf...............................................................56
         (n)      Interest.......................................................................................56
         (o)      Compliance with Agreements and Law.............................................................56
         (p)      Environmental Matters; Environmental Reviews...................................................57
         (q)      Evidence of Compliance.........................................................................57
         (r)      Agreement to Deliver Security Documents........................................................57
         (s)      Guaranties of Newly Created or Acquired Subsidiaries...........................................57
         (t)      Compliance with Agreements.....................................................................58
         (u)      Risk Management Policies.......................................................................58
         (v)      Critical Vendor Program........................................................................58
         (w)      Retention of Financial Advisor and Commercial Finance Audits...................................58

10.      NEGATIVE COVENANTS......................................................................................59

         (a)      Indebtedness...................................................................................59
         (b)      Accounts.......................................................................................60
         (c)      Limitation on Liens............................................................................60
         (d)      Hedging Contracts..............................................................................60
         (e)      Limitation on Mergers, etc. and Issuances of Securities........................................60
         (f)      Limitation on Asset Sales......................................................................61
         (g)      Limitation on Distributions, Dividends and Redemptions.........................................61
         (h)      Limitation on New Businesses, Investments and Capital Expenditures.............................61
         (i)      Limitation on Credit Extensions................................................................62
         (j)      Transactions with Affiliates...................................................................62
         (k)      Prohibited Contracts...........................................................................62
         (l)      Modification of Certain Agreements.............................................................62
         (m)      Open Positions.................................................................................62
         (n)      Redelivery of Borrowing Base Report............................................................62
         (o)      Books and Records..............................................................................63
         (p)      Bankruptcy Cases...............................................................................63
         (q)      Cash Budget....................................................................................63
         (r)      Minimum Crude Oil Lease Volumes................................................................64
         (s)      Prepetition Indebtedness.......................................................................64

11.      EVENTS OF DEFAULT.......................................................................................64

12.      RIGHTS AND REMEDIES.....................................................................................67

13.      GUARANTY ...............................................................................................68
</Table>

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                   (Continued)

<Table>
<Caption>
                                                                                                                Page
                                                                                                                ----

<S>                                                                                                             <C>
14.      LC AGENT................................................................................................70

         (a)      Appointment and Authority......................................................................70
         (b)      Exculpation, the LC Agent's Reliance, etc......................................................70
         (c)      Credit Decisions...............................................................................71
         (d)      Indemnification................................................................................71
         (e)      Rights as LC Participant.......................................................................71
         (f)      Sharing of Set-Offs and Other Payments.........................................................71
         (g)      Investments....................................................................................72
         (h)      Benefit of this Section........................................................................72
         (i)      Resignation....................................................................................72
         (j)      Other Lender Parties...........................................................................73

15.      ASSIGNMENTS AND PARTICIPATIONS..........................................................................73

16.      INDEMNIFICATION.........................................................................................75

17.      MISCELLANEOUS...........................................................................................76

SCHEDULES AND EXHIBITS:

SCHEDULE I                 DISCLOSURE SCHEDULE

SCHEDULE II                LC PARTICIPANT SCHEDULE

SCHEDULE III               SECURITY SCHEDULE

SCHEDULE IV                DESIGNATED CUSTOMERS

EXHIBIT A                  LETTER OF CREDIT REQUEST

EXHIBIT B                  CERTIFICATE ACCOMPANYING FINANCIAL STATEMENTS

EXHIBIT C                  BORROWING BASE REPORT

EXHIBIT D                  CASH FLOW REPORT

EXHIBIT E                  ENVIRONMENTAL COMPLIANCE CERTIFICATE

EXHIBIT F                  OPEN POSITION REPORT

EXHIBIT G                  INITIAL CASH BUDGET
</Table>

                                      -iii-

<PAGE>

                                TABLE OF CONTENTS
                                   (Continued)

<Table>
<S>                        <C>
EXHIBIT H                  CRITICAL VENDOR ORDER

EXHIBIT I                  WEEKLY COMPLIANCE CERTIFICATE

EXHIBIT J                  SECOND INTERIM ORDER

EXHIBIT K                  LEASE VOLUME REPORT
</Table>

                                      -iv-

<PAGE>

                              DEBTOR IN POSSESSION
                           LETTER OF CREDIT AGREEMENT

         DEBTOR-IN-POSSESSION LETTER OF CREDIT AGREEMENT, dated as of October
18, 2002 (as amended, supplemented or otherwise modified from time to time, and
including all Schedules and Exhibits attached hereto, this "AGREEMENT"), among
EOTT ENERGY OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership and a
debtor and debtor in possession ("EOTT OLP"), EOTT ENERGY CANADA LIMITED
PARTNERSHIP, a Delaware limited partnership and a debtor and debtor in
possession ("EOTT CANADA"), EOTT ENERGY LIQUIDS, L.P., a Delaware limited
partnership and a debtor and debtor in possession ("EOTT LIQUIDS"), EOTT ENERGY
PIPELINE LIMITED PARTNERSHIP, a Delaware limited partnership and a debtor and
debtor in possession ("EOTT PIPELINE" and together with EOTT Canada and EOTT
Liquids, each an "ADDITIONAL OBLIGOR" and collectively, "ADDITIONAL OBLIGORS"
and the Additional Obligors together with EOTT OLP on a joint and several basis,
"BORROWERS"), EOTT ENERGY PARTNERS, L.P., a Delaware limited partnership and a
debtor and debtor in possession ("EOTT MLP"), EOTT ENERGY GENERAL PARTNER,
L.L.C. a Delaware limited liability company and a debtor and debtor in
possession ("EOTT GP" and together with EOTT MLP, each a "GUARANTOR" and
collectively, "GUARANTORS" and together with EOTT OLP and each of the Additional
Obligors, each a "DEBTOR" and collectively, "DEBTORS"), STANDARD CHARTERED BANK,
a banking institution organized and existing under the laws of England and
Wales, as administrative agent for the LC Participants (as defined below) (in
such capacity, the "LC AGENT" and in its individual capacity, "STANDARD
CHARTERED") and as LC Issuer and Collateral Agent hereunder, and each of the
banks or other lending institutions which is a party hereto (as evidenced by the
signature pages of this Agreement) or which may from time to time become a party
hereto or any successor or assignee thereof (each an "LC PARTICIPANT" and
collectively, the "LC PARTICIPANTS").

         WHEREAS, on October 8, 2002 (the "FILING DATE"), the Debtors filed
separate petitions under Chapter 11 in the Bankruptcy Court for the Southern
District of Texas;

         WHEREAS, each of the Debtors intends to continue to operate its
business pursuant to Sections 1107 and 1108 of the Bankruptcy Code;

         WHEREAS, before the Filing Date, EOTT OLP, EOTT Canada, EOTT Liquids,
and EOTT Pipeline (collectively, the "PREPETITION BORROWERS"), EOTT MLP and EOTT
GP (collectively, the "PREPETITION GUARANTORS"), the lenders party thereto (the
"PREPETITION LENDERS"), Standard Chartered as administrative agent for the
Prepetition Lenders (the "PREPETITION AGENT") and letter of credit issuer
thereunder (the "PREPETITION LC ISSUER"), entered into that certain Second
Amended and Restated Reimbursement, Loan and Security Agreement, dated as of
April 23, 2002, as amended by that certain Limited Forbearance and First
Amendment, dated as of August 27, 2002 (the "FIRST AMENDMENT"), among the
Prepetition Borrowers, the Prepetition Guarantors, the Prepetition Lenders, and
the Prepetition Agent (as so amended, the "PREPETITION CREDIT AGREEMENT"),
pursuant to which the Prepetition Lenders extended credit to the Prepetition
Borrowers on the terms set forth therein;

<PAGE>

         WHEREAS, as of the date hereof, the Prepetition Lenders under the
Prepetition Credit Agreement are owed approximately $20,000,000 in revolving
loan principal obligations incurred directly by the Prepetition Borrowers plus
interest, fees and expenses (the "PREPETITION LOANS"), and $276,205,489.48 in
reimbursement obligations relating to letters of credit issued under the
Prepetition Credit Agreement (the "PREPETITION LETTERS OF CREDIT", and together
with the Prepetition Loans, the "PREPETITION BANK DEBT"), the obligations of the
Prepetition Borrowers in respect thereof being guaranteed by the Prepetition
Guarantors;

         WHEREAS, the Borrowers have requested that Standard Chartered and the
other LC Participants provide financing to the Borrowers pursuant to Sections
364(c)(1), (2) and (3) and 364(d) of the Bankruptcy Code, and enter into this
Agreement pursuant to which Standard Chartered and the other LC Participants
would extend to Borrower a letter of credit facility (the "DIP FACILITY") not to
exceed at any one time outstanding $325,000,000 (as such amount may be reduced
or terminated pursuant to this Agreement and subject to availability under the
Borrowing Base), to be made available in the form of letters of credit issued
from time to time by the LC Issuer at the request and for the account of
Borrowers to issue Letters of Credit and to be used by the Borrowers as provided
in Section 2(a)(ii)(4) in which Letters of Credit and Borrowers' reimbursement
obligations thereunder the LC Participants would participate;

         WHEREAS, the LC Participants have indicated their willingness to agree
to extend such credit to the Borrowers, all on the terms and conditions set
forth herein and in the other Credit Documents and in accordance with Sections
364(c)(1), (2) and (3) and 364(d) of the Bankruptcy Code, so long as:

         (a) such postpetition credit obligations are (i) secured by Liens on
         all of the property and interest, real and personal, tangible and
         intangible, of the Debtors whether now owned or hereafter acquired,
         subject in priority only to certain Liens and the Carve Out as
         hereinafter provided and (ii) given superpriority status as provided in
         the Orders; and

         (b) the Prepetition Lenders receive certain adequate protection for the
         Debtors' use, sale or lease of collateral, including the Borrowers' use
         of cash collateral, and the priming of the prepetition Liens securing
         the obligations of the Borrowers in respect of the Prepetition Credit
         Agreement;

         WHEREAS, the Borrowers have agreed to provide such collateral,
superpriority claims and adequate protection subject to the approval of the
Bankruptcy Court;

         WHEREAS, each of the Guarantors will derive substantial direct and
indirect benefit from the credit made available by the LC Participants to the
Borrowers; and

         WHEREAS, the Guarantors are willing to guarantee the reimbursement and
other obligations of Borrowers hereunder;

         NOW, THEREFORE, in consideration of these premises and the mutual
undertakings set forth herein, the parties hereto hereby agree as follows:

1. DEFINITIONS AND RULES OF INTERPRETATION. As used in this Agreement, all terms
used herein which are defined in Article 1 or Article 9 of the UCC (as in effect
from time

                                      -2-
<PAGE>

to time) shall have the meanings set forth therein unless otherwise defined in
this Agreement, and all references to the plural herein shall also mean the
singular. As used in this Agreement, each of the following terms has the meaning
given to such term in this Section 1 or in the Sections and subsections referred
to below:

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

         "ACCOUNT" has the meaning given that term in the UCC.

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

         "ADDITIONAL GUARANTOR" has the meaning set forth in Section 12(b).

         "ADMINISTRATIVE AGENTS" means the Term Lender Agent and the LC Agent.

         "AFFILIATE" means, as to any Person, each other Person that directly or
         indirectly (through one or more intermediaries or otherwise) controls,
         is controlled by, or is under common control with, such Person. A
         Person shall be deemed to be "controlled by" any other Person if such
         other Person possesses, directly or indirectly, power (i) to vote 5% or
         more of the securities (on a fully diluted basis) having ordinary
         voting power for the election of directors or managing general partners
         or (ii) to direct or cause the direction of the management and policies
         of such Person whether by contract or otherwise.

         "AGREED ADMINISTRATIVE EXPENSES" means (i) amounts payable pursuant to
         28 U.S.C. Section 1930(a)(6) and (ii) Priority Professional Expenses.

         "AGREEMENT" has the meaning set forth in the preamble.

         "ALTERNATE BASE RATE" means the higher of (A) the variable per annum
         rate of interest so designated from time to time by the LC Agent as its
         "base rate" and (B) the Federal Funds Rate, plus one-half percent
         (0.5%) per annum, in each case, plus three percent (3%) per annum. The
         "base rate" is a reference rate and does not necessarily represent the
         lowest or best rate being charged to any customer of the LC Agent.
         Changes in the Alternate Base Rate resulting from changes in the "base
         rate" shall take place immediately without notice or demand of any
         kind.

         "APPLICABLE LENDING OFFICE" means with respect to any LC Participant,
         the office of such LC Participant specified as its "Applicable Lending
         Office" in the LC Participant Schedule, or such other office as such LC
         Participant may from time to time specify to the Borrower
         Representative and the LC Agent and, with respect to the LC Agent, the
         office, branch or agency through which it administers this Agreement.

                                      -3-
<PAGE>

         "APPLICABLE MARGIN" means the applicable margin set forth below that
         corresponds to the Average Daily Maximum Drawing Amount as determined
         on the last business day of each month:

<Table>
<Caption>

                                                        APPLICABLE MARGIN FOR
             AVERAGE DAILY MAXIMUM                        LETTERS OF  CREDIT
                 DRAWING AMOUNT                              (PER ANNUM)
             ---------------------                    --------------------------

<S>                                                <C>
     Less than or equal to $325,000,000 but                     2.75%
     greater than $250,000,000

     Less than or equal to $250,000,000 but                     2.50%
     greater than $200,000,000

     Less than or equal to $200,000,000                         2.25%
</Table>

         "APPRAISED VALUE OF ELIGIBLE FIXED ASSETS" means the value of Eligible
         Fixed Assets on an orderly liquidation basis as calculated by an
         independent appraiser selected by the LC Agent utilizing methodologies
         satisfactory to the LC Agent. On the Closing Date, the aggregate
         Appraised Value of Eligible Fixed Assets (i.e., those assets which are
         specifically identified as "Eligible Fixed Assets" in the definition
         thereof) will be at least $206,000,000.

         "AVERAGE DAILY MAXIMUM DRAWING AMOUNT" means, for any Letter of Credit
         for any month, the quotient of (i) the sum of the Maximum Drawing
         Amount for such Letter of Credit as it exists at 5:00 p.m., New York
         time, for each day of such month divided by (ii) the total number of
         days in such month.

         "AVOIDANCE ACTIONS" means avoidance actions of the Borrowers under
         Chapter 5 or Section 724(a) of the Bankruptcy Code (or proceeds
         thereof).

         "BANKRUPTCY CODE" means Title 11, United States Code.

         "BANKRUPTCY COURT" means the United States Bankruptcy Court for the
         Southern District of Texas, Corpus Christi Division.

         "BARREL REPORT" means a report in the form delivered to the
         Administrative Agents from time to time setting forth the aggregate
         crude oil purchases and cancellations from top twenty-five (25)
         leaseholders identified therein for any given week, with such
         supporting information in detail as may from time to time be prescribed
         by the LC Agent, duly completed and certified by an authorized officer
         of EOTT Energy.

         "BENEFICIARY" means any beneficiary identified in any Letter of Credit
         issued hereunder.

                                      -4-
<PAGE>

         "BONDHOLDERS" means those parties holding interests in the EOTT MLP
         Senior Notes issued pursuant to the EOTT MLP Supplemental Indenture.

         "BONDHOLDER'S COMMITTEE" means a committee of Bondholders, if any,
         appointed to the Cases.

         "BORROWER EXPENSES" means any and all sums, costs and expenses incurred
         in connection with the preparation and negotiation of this Agreement,
         the other Credit Documents and any related agreements or instruments,
         together with any amendments or supplements hereto or thereto, or in
         defending, protecting or enforcing the security interest granted herein
         or in defending, collecting or attempting to collect the Obligations,
         including, without limitation, all search, filing and recording fees,
         taxes, attorneys' fees, legal expenses, all expenses of KPMG, all
         expenses for appraisals conducted in order to calculate the Appraised
         Value of Eligible Fixed Assets, all fees and expenses for the service
         and filing of papers, marshals, sheriffs, custodians, auctioneers and
         others and all court costs and collection charges, with interest
         thereon, from the date of demand until paid at the Alternate Base Rate.

         "BORROWERS" has the meaning set forth in the preamble.

         "BORROWER REPRESENTATIVE" means, for purposes of making Letter of
         Credit Requests to the LC Agent, receiving Letters of Credit from the
         LC Issuer, and otherwise communicating with the LC Agent on behalf of
         the Borrowers, and taking any action required under this Agreement on
         behalf of the Borrowers (and all of the Borrowers shall be bound
         thereby), including consent to and any modifications, amendments or
         supplements to this Agreement or related documents, EOTT OLP.

         "BORROWING BASE" means the remainder of (i) minus the sum of (ii),
         (iii), (iv) and (v) below as of the date of determination (without
         duplication):

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

                  (A)      100% of Eligible Cash Equivalents; plus

                  (B)      90% of Tier I Eligible Receivables; plus

                  (C)      85% of Tier II Eligible Receivables; plus

                  (D)      90% of Tier I Eligible Crude/Product/Liquid
                           Deliveries; plus

                  (E)      85% of Tier II Eligible Crude/Product/Liquid
                           Deliveries; plus

                  (F)      80% of the Appraised Value of Eligible Fixed Assets,
                           but in no event to exceed $165,000,000; plus

                  (G)      90% of NYMEX Hedged Eligible Inventory; plus

                  (H)      80% of Other Hedged Eligible Inventory; plus

                                      -5-
<PAGE>

                  (I)      80% of the Market Value of Unhedged Eligible
                           Inventory; plus

                  (J)      80% of Eligible Margin Deposits; plus

                  (K)      80% of all Undrawn Product Purchase Letters of
                           Credit;

         (ii)     minus the following as of the date of determination:

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

                  (B)      100% of Other Priority Claims; plus

                  (C)      110% of the aggregate net amounts payable by each
                           Borrower under all Hedging Contracts to which it is a
                           party; plus

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

         (iii) minus the principal amount of loans outstanding and any accrued
         and unpaid fees and expenses under the Lehman DIP Credit Agreement;

         (iv) minus all outstanding amounts under the SCTSC Purchase Agreements,
         including all accrued and unpaid fees and expenses thereunder;

         (v) minus the Carve Out;

         provided, however, that (a) any assets of the Borrowers that are
         subject to a successful Lien challenge (with respect to any of the
         Liens granted under the Prepetition Credit Agreement, this Agreement or
         the SCTSC Purchase Agreements) shall be excluded from the Borrowing
         Base and (b) the reference to the Receivables Purchase Agreement in
         item (iv) shall not be construed as a characterization of the
         transactions thereunder as loans and not true sales.

         "BUSINESS DAY" means any day, other than a Saturday, Sunday or day
         which shall be in the State of New York a legal holiday or day on which
         banking institutions are required or authorized to close.

         "CAPITAL EXPENDITURES" means for any period, Consolidated expenditures
         (including the aggregate amount of Capital Lease obligations incurred
         during such period) made by EOTT MLP and its Consolidated Subsidiaries
         to acquire or construct fixed assets, plant or equipment (including
         renewals, improvements or replacements, but excluding repairs) during
         such period and which, in accordance with GAAP, are classified as
         capital expenditures.

                                      -6-
<PAGE>

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

         "CARVE OUT" means, at any time of determination, the sum of (i) allowed
         administrative expenses payable pursuant to 28 U.S.C. Section
         1930(a)(6) and (ii) Priority Professional Expenses incurred on and
         after the Filing Date.

         "CASES" means, collectively, the Debtors' reorganization cases under
         Chapter 11 of the Bankruptcy Code, pending in the Bankruptcy Court
         (Chapter 11 Case No. 02-21730.

         "CASH BUDGET" has the meaning set forth in Section 8(w).

         "CASH EQUIVALENTS" means Investments in:

                  (i)      marketable obligations, maturing within 12 months
                           after acquisition thereof, issued or unconditionally
                           guaranteed by the United States of America or an
                           instrumentality or agency thereof and entitled to the
                           full faith and credit of the United States of
                           America;

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

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

                  (iv)     commercial paper, other than commercial paper issued
                           by any Debtor or its Affiliates, maturing within 180
                           days after acquisition thereof and having a rating of
                           at least P-1 by Moody's or A-1 by S&P; and

                  (v)      money market or other mutual funds substantially all
                           of whose assets comprise securities of the types
                           described in subsections (i) through (iv) above.

         "CASH FLOW REPORT" means a report prepared each Business Day by the
         Borrower Representative reflecting on such day EOTT MLP's and its
         Subsidiaries' cash flows for the current month, on an actual
         (historical) and projected (forecast) basis, substantially in the form
         of Exhibit D hereto.

         "CASH WATERFALL" has the meaning set forth in the Intercreditor
         Agreement.

                                      -7-
<PAGE>

         "CERCLA" means the Comprehensive Environmental Response, Compensation
         and Liability Act of 1980, as amended.

         "CERCLIS" means the Comprehensive Environmental Response, Compensation
         and Liability Information System List of the Environmental Protection
         Agency.

         "CHANGE IN CONTROL" means the occurrence of any of the following
         events: (i) Any of Steve Myers, Dana Gibbs and Susan Ralph, shall cease
         for any reason not reasonably acceptable to the LC Agent to serve as an
         executive officer of EOTT MLP (unless any such officer shall have
         ceased to serve as a result of death, disability, termination for cause
         as determined by the EOTT MLP Board of Directors or other reason
         Currently Approved by the LC Agent) and such individual has not been
         replaced by Persons reasonably acceptable to the LC Agent within a
         reasonable period of time, and (ii) any Person or Group shall be the
         legal and beneficial owner (within the meaning of Rule 13d-3 under the
         Securities Exchange Act of 1934, as amended) of 50% or more of the
         combined voting power of the then total partnership interests
         (including all securities that are convertible into partnership
         interests) of EOTT MLP.

         "CLOSING DATE" means the date agreed to by the Borrower Representative
         and the LC Agent for the initial Extensions of Credit under this
         Agreement, which date shall occur promptly after entry by the
         Bankruptcy Court of the Second Interim Order and must be a Business Day
         occurring no later than October 18, 2002, but not before all of the
         conditions precedent in this Agreement for such Extension of Credit
         have been satisfied.

         "COLLATERAL" has the meaning set forth in the Intercreditor Agreement.

         "COLLATERAL AGENT" means Standard Chartered, acting as collateral agent
         on behalf of the LC Issuer, the LC Participants, SCTSC, the Term
         Lenders and the Administrative Agents in accordance with the
         Intercreditor Agreement.

         "COMMITMENT FEE RATE" means one-half percent (0.5%) per annum.

         "COMMITMENT PERIOD" means the period from and including the Closing
         Date until the Termination Declaration Date.

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

         "CONTROL AGREEMENT" has the meaning set forth in the Intercreditor
         Agreement.

         "CREDIT DOCUMENTS" means, collectively (i) the SCTSC Purchase
         Agreements and each and every other agreement, document, certificate or
         instrument between SCTSC and any Debtor or otherwise made, executed or
         delivered by any Debtor for the benefit of SCTSC Party that is entered
         into or delivered on or after the date hereof, (ii) this Agreement, the
         Letters of Credit, the Letter of Credit Requests, and each and every
         other agreement,

                                      -8-
<PAGE>

         document, certificate or instrument between any Lender Party, and any
         Debtor or otherwise for the benefit of any Lender Party that is entered
         into or delivered on or after the date hereof, (iii) the Orders, and
         (iv) the Security Documents.

         "CREDITORS' COMMITTEE" means the official unsecured creditors'
         committee, if any, appointed to the Cases.

         "CRITICAL VENDOR ORDER" means the Order for Authority to Pay and Honor
         Prepetition Obligations to Critical Customers and Vendors including
         Crude Suppliers and Purchasers entered by the Bankruptcy Court attached
         hereto as Exhibit H.

         "CRUDE OIL PURCHASE AGREEMENT" means, that certain Amended and Restated
         Commodities Repurchase Agreement, dated as of the date hereof, by and
         among SCTSC and EOTT OLP (as amended, amended and restated,
         supplemented or otherwise modified from time to time).

         "CURRENTLY APPROVED BY THE LC AGENT" means such Person (including a
         limit on the maximum credit exposure to any such Person), storage
         location, pipeline, form of letter of credit, event, action, policy, or
         other matter, as the case may be, as reflected in the most recent
         written notice given by the LC Agent to the Borrower Representative as
         being approved. Each such written notice will supersede and revoke each
         prior notice. The LC Agent will give or withhold its approval in
         accordance with the same general standards it applied under the
         Prepetition Credit Agreement.

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

         "DEBTOR" has the meaning set forth in the preamble.

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

         "DEFAULT RATE" means a rate per annum equal to (a) in the case of fees
         on any Letters of Credit, the rate that otherwise would be applicable
         to such fees plus 2% per annum; and (b) in the case of any other
         monetary Obligations, the Alternate Base Rate plus 2% per annum.

         "DESIGNATED ASSETS" means the following assets: (i) MTBE, (ii) the Mont
         Belvieu Storage Facility and Grid in Chambers, Harris and Galveston
         Counties, Texas and (iii) the gas processing, storage and
         transportation facilities at Tupman, Kern County, California.

         "DIP FACILITY" has the meaning set forth in the fifth recital.

         "DIP FACILITY USAGE" means, at the time in question, the aggregate
         amount of DIP LC Obligations outstanding at such time.

                                      -9-
<PAGE>

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

         "DIP MAXIMUM COMMITMENT" means, upon entry of the Second Interim Order,
         an aggregate outstanding principal amount not to exceed $325,000,000.

         "DISCLOSURE SCHEDULE" means Schedule I hereto.

         "ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the
         laws of the United States, or any state thereof or (ii) a commercial
         bank organized under the laws of any other country which is a member of
         the Organization for Economic Cooperation and Development, or a
         political subdivision of any such country provided, that such bank is
         acting through a branch or agency in the United States, and, in the
         case of each of (i) and (ii), having combined capital, surplus and
         undivided profits of at least $100,000,000; or (iii) a Person that is
         primarily engaged in the business of commercial banking and that is (A)
         a Subsidiary of an LC Participant, (B) a Subsidiary of a Person of
         which an LC Participant is a Subsidiary, or (C) a Person of which an LC
         Participant is a Subsidiary, or (iv) any other commercial bank, savings
         and loan association, savings bank, finance company, insurance company,
         pension fund, mutual fund or other financial institution (whether a
         corporation, partnership or other entity) acceptable to the LC Agent
         and, unless there shall have occurred and be continuing a Default, the
         Borrower Representative, such acceptance not to be unreasonably
         withheld or delayed.

         "ELIGIBLE CASH EQUIVALENTS" means Cash Equivalents in which any
         Borrower has lawful and absolute title, which are free from any express
         or implied at law Lien, trust or other beneficial interest, in which
         the Collateral Agent holds a fully perfected first-priority security
         interest prior to the rights of, and enforceable as such against, any
         other Persons pursuant to a Control Agreement.

         "ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means at the time of any
         determination thereof (and without duplication), each Account
         representing an amount that will be, as reasonably determined in good
         faith by the Borrower Representative, an Account of any Borrower with
         respect to sales and deliveries of crude oil, refined petroleum
         products or NGLs made or committed to be made in each case under a firm
         written purchase and sale agreement but for which a Borrower has not
         yet issued an invoice to the purchaser, and as to which the following
         requirements have been fulfilled to the reasonable satisfaction of the
         LC Agent:

         (i)      such Borrower has lawful and absolute title to such Account;

         (ii)     such Account is a valid, legally enforceable obligation of an
                  Account Debtor payable in United States or Canadian dollars,
                  arising from the sale and delivery of crude oil, refined
                  petroleum products or NGLs to such Person in the United States
                  of America and/or Canada in the ordinary course of business of
                  such Borrower, to the extent of the volumes of crude oil,
                  refined petroleum products or NGLs delivered to such Person
                  prior to the date of determination;

                                      -10-
<PAGE>

         (iii)    there has been excluded from such Account (i) any portion that
                  is subject to any dispute, rejection, loss, non-conformance,
                  counterclaim, offset, deduction or other claim or defense on
                  the part of any Account Debtor or to any claim on the part of
                  any Account Debtor denying liability under such Account, (ii)
                  the amount of any account payable or other liability owed by
                  such Borrower to the Account Debtor on such Account, whether
                  or not a specific netting agreement may exist, excluding,
                  however, any portion of any such account payable or other
                  liability which is at the time in question covered by a Letter
                  of Credit, limited to the total amount of such Account and
                  (iii) the amount of any tax liability owed by such Borrower to
                  any governmental authority with respect to collections on such
                  Account;

         (iv)     such Borrower has the full and unqualified right to assign and
                  grant a security interest in such Account to the Collateral
                  Agent as security for the Obligations;

         (v)      such Account (A) represents the uninvoiced amount in respect
                  of volumes of crude oil, refined petroleum products or NGLs,
                  title to which was or will be assigned or otherwise
                  transferred by such Borrower during the month of determination
                  or the month immediately preceding or immediately following
                  the month of determination, (B) is governed by an enforceable
                  purchase and sale agreement and (C) and is not evidenced by
                  any promissory note or other instrument;

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

         (vii)    such Account will be due not more than 30 days following the
                  last day of the calendar month in which such Borrower's
                  invoice will be submitted;

         (viii)   such Account is not payable by an Account Debtor with more
                  than twenty percent (20%) of its Accounts to the Borrowers
                  that are outstanding more than 60 days from the invoice date;

         (ix)     the Account Debtor in respect of such Account (i) is located,
                  is conducting significant business or has significant assets
                  in the United States of America and/or Canada, (ii) is a
                  Person Currently Approved by the LC Agent, (iii) is not an
                  Affiliate of Borrower, (iv) is not the subject of any event of
                  the type described in Section 11(h) and (v) has established a
                  credit limit with such Borrower in an amount Currently
                  Approved by the LC Agent;

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

                                      -11-
<PAGE>

         (xi)     such Account is not the obligation of an Account Debtor as to
                  which the LC Agent determines in its reasonable discretion
                  that there is a legitimate concern over the timing or
                  collection of such obligation.

         "ELIGIBLE FIXED ASSETS" means assets of any Borrower that (i) are
         included in Property, Plant and Equipment as reflected in the most
         current Consolidated balance sheet of EOTT MLP and its Subsidiaries,
         (ii) are subject to a fully perfected first-priority security interest
         (subject only to Permitted Liens) in favor of the Collateral Agent
         pursuant to the Security Documents and the Orders prior to the rights
         of, and enforceable as such against, any other Person and (iii) have
         been appraised by an independent appraiser selected by the LC Agent. At
         the Closing Date hereof, Eligible Fixed Assets will include only the
         assets known as (i) MTBE, (ii) the Mont Belvieu storage facility and
         grid in Chambers, Harris and Galveston Counties, Texas, (iii) the
         Mississippi/Alabama pipeline system and related Mobile terminal, (iv)
         the Kansas pipelines, (v) the Oklahoma pipelines and (vi) the Rockies
         pipelines (which comprise of assets located in the states of Colorado,
         North Dakota, South Dakota, Wyoming, Montana and Nebraska), to the
         extent that such assets are subject to a first-priority security
         interest (subject only to Permitted Liens) in favor of the Collateral
         Agent, provided, that if the first priority perfected security interest
         of the Collateral Agent on any asset which otherwise satisfies the
         criteria of an Eligible Fixed Asset shall be successfully challenged by
         any Person, such asset shall be excluded as an Eligible Fixed Asset.

         "ELIGIBLE INVENTORY" means inventories of crude oil or NGLs in which
         any Borrower has lawful and absolute title (or which are owned by SCTSC
         pursuant to the Crude Oil Purchase Agreement), which are (i) not
         subject to any Lien in favor of any Person (other than Permitted
         Inventory Liens), (ii) subject to a fully perfected first-priority
         security interest (subject only to Permitted Inventory Liens) in favor
         of the Collateral Agent pursuant to the Credit Documents securing all
         the Obligations prior to the rights of, and enforceable as such
         against, any other Person, (iii) located in storage locations
         (including pipelines) that are either (A) owned by a Debtor or (B)
         Currently Approved by the LC Agent and (iv) otherwise satisfactory to
         the LC Agent in its sole discretion in terms of quality, quantity and
         such other matters as the LC Agent deems relevant, minus, the amount of
         any Permitted Inventory Lien on any such inventory. For the avoidance
         of doubt, inventories included in Eligible Crude/Product/Liquid
         Deliveries are excluded from Eligible Inventory.

         "ELIGIBLE MARGIN DEPOSIT" means the net equity value of investments by
         any Borrower in margin deposit accounts with commodities brokers
         Currently Approved by the LC Agent on nationally recognized exchanges
         subject to a perfected first-priority security interest in favor of the
         Collateral Agent and a three-party agreement among Borrower, the
         Collateral Agent and the depository institution, in form and substance
         satisfactory to the Collateral Agent.

         "ELIGIBLE RECEIVABLES" means at the time of any determination thereof
         (and without duplication), each Account with respect to sales and
         deliveries by any Borrower of crude oil or NGLs, and as to which the
         following requirements have been fulfilled to the reasonable
         satisfaction of the LC Agent:

                                      -12-
<PAGE>

         (i)      such Borrower, or SCTSC pursuant to the Receivables Purchase
                  Agreement, has lawful and absolute title to such Account;

         (ii)     such Account is a valid, legally enforceable obligation of an
                  Account Debtor payable in United States or Canadian dollars,
                  arising from the sale and delivery of crude oil or NGLs to
                  such Person in the United States of America in the ordinary
                  course of business of such Borrower, to the extent of the
                  volumes of crude oil or NGLs delivered to such Person prior to
                  the date of determination;

         (iii)    there has been excluded from such Account (i) any portion that
                  is subject to any dispute, rejection, loss, non-conformance,
                  counterclaim, offset, deduction or other claim or defense on
                  the part of any Account Debtor or to any claim on the part of
                  any Account Debtor denying liability under such Account, (ii)
                  the amount of any account payable or other liability owed by
                  such Borrower to the Account Debtor on such Account, whether
                  or not a specific netting agreement may exist, excluding,
                  however, any portion of any such account payable or other
                  liability which is at the time in question covered by a Letter
                  of Credit and (iii) the amount of any tax liability owed by
                  such Borrower to any governmental authority with respect to
                  collections on such Account;

         (iv)     such Borrower has the full and unqualified right to assign and
                  grant a security interest in such Account to the Collateral
                  Agent as security for the Obligations;

         (v)      such Account is evidenced by an invoice rendered to the
                  Account Debtor, is governed by a purchase and sale agreement,
                  exchange agreement or other written agreement and is not
                  evidenced by any promissory note or other instrument;

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

         (vii)    such Account is due not more than 30 days following the last
                  day of the calendar month in which the crude oil or NGLs
                  delivery occurred and is not more than 30 days past due
                  (except that any Account or group of Accounts of a single
                  Account Debtor, in either case in excess of $500,000 shall be
                  excluded from Eligible Receivables if not paid within five
                  days after the original invoice due date);

         (viii)   such Account is not payable by an Account Debtor with more
                  than twenty percent (20%) of its Accounts to any Borrower that
                  are outstanding more than 60 days from the invoice date;

         (ix)     the Account Debtor in respect of such Account (i) is located,
                  is conducting significant business or has significant assets
                  in the United States of America and/or Canada, (ii) is a
                  Person Currently Approved by the LC Agent, (ii) is not an
                  Affiliate of Borrower, (iii) is not the subject of any event
                  of the type described in

                                      -13-
<PAGE>

                  Section 11(h) and (iv) has established a credit limit with a
                  Borrower in an amount Currently Approved by the LC Agent;

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

         (xi)     such Account is not the obligation of an Account Debtor as to
                  which the LC Agent determines in its reasonable discretion
                  that there is a legitimate concern over the timing or
                  collection of such obligation.

         "EMPLOYEE TRANSITION AGREEMENT" means that certain employee transition
         agreement, dated as of October 7, 2002, by and among the EOTT Parties
         and the Enron Parties.

         "ENRON" means Enron Corp., an Oregon corporation and
         debtor-in-possession in the Enron Bankruptcy Proceedings.

         "ENRON BANKRUPTCY PROCEEDINGS" means the actions under the petitions
         for relief filed by Enron and certain of its Affiliates under the
         Bankruptcy Code in the United States Bankruptcy Court for the Southern
         District of New York, In re Enron Corp., et al, jointly administered
         under Case No. 01-16034.

         "ENRON PARTIES" means Enron, Enron Energy Services, Inc. a Delaware
         corporation and a debtor in possession, Enron North America Corp., a
         Delaware corporation and debtor in possession, Enron Pipeline Services
         Company, a Delaware corporation, EGP Fuels Company, a Delaware
         corporation, and Enron Gas Liquids, Inc., a Delaware corporation and a
         debtor and a debtor in possession.

         "ENRON SETTLEMENT AGREEMENT" means the settlement agreement, dated as
         of October 7, 2002, by and among the EOTT Parties and the Enron Parties
         settling, among other things, certain claims owed by each of the EOTT
         Parties to the Enron Parties.

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

         "EOTT CANADA" has the meaning set forth in the preamble.

         "EOTT ENERGY" means EOTT Energy Corp., a Delaware corporation.

         "EOTT FINANCE CORP." means EOTT Energy Finance Corp., a Delaware
         corporation and a debtor and a debtor in possession.

         "EOTT GP" has the meaning set forth in the preamble.

                                      -14-
<PAGE>

         "EOTT LIQUIDS" has the meaning set forth in the preamble.

         "EOTT MLP" has the meaning set forth in the preamble.

         "EOTT MLP SENIOR NOTES" means EOTT MLP's $235,000,000, in original
         aggregate principal amount, of 11% Senior Notes due 2009.

         "EOTT MLP SENIOR NOTES INDENTURE" means the Indenture, dated October 1,
         1999, among EOTT MLP, EOTT Finance Corp., a Delaware corporation ("EOTT
         FINANCE CORP."), EOTT OLP, EOTT Pipeline, EOTT Canada and the Bank of
         New York, as supplemented by the EOTT MLP Supplemental Indenture.

         "EOTT MLP SUPPLEMENTAL INDENTURE" means the First Supplemental
         Indenture, dated October 1, 1999, among EOTT MLP, EOTT Finance Corp.,
         EOTT OLP, EOTT Pipeline, EOTT Canada and The Bank of New York.

         "EOTT PARTIES" means the Borrowers, the Guarantors and EOTT Energy.

         "EOTT TERMINAL" means any storage terminal, tankage or facility owned
         by any Borrower.

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

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

         "ERISA PLAN" means any employee pension benefit plan subject to Title
         IV of ERISA maintained by any ERISA Affiliate with respect to which any
         Debtor has a fixed or contingent Liability.

         "EVENT OF DEFAULT" shall mean the occurrence of any event described in
         Section 11 of this Agreement.

         "EXTENSION OF CREDIT" means (i) the issuance of a Letter of Credit or
         the amendment of any Letter of Credit having the effect of extending
         the stated termination date thereof or increasing the maximum amount
         available to be drawn thereunder or (ii) the funding of the
         participation in an unpaid Matured DIP LC Obligation. The initial
         Extensions of Credit shall occur on the Closing Date with the
         conversion of the Prepetition Letters of Credit to the Letters of
         Credit hereunder pursuant to Section 2(a)(i).

         "FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
         upwards, if necessary, to the nearest 1/1000th of one percent) equal to
         the weighted average of the rates on overnight Federal funds
         transactions with members of the Federal Reserve System arranged by
         Federal funds brokers on such day, as published by the Federal

                                      -15-
<PAGE>

         Reserve Bank of New York on the Business Day next succeeding such day;
         provided, however, that (i) if the day for which such rate is to be
         determined is not a Business Day, the Federal Funds Rate for such day
         shall be such rate on such transactions on the next preceding Business
         Day as so published on the next succeeding Business Day and (ii) if
         such rate is not so published for any day, the Federal Funds Rate for
         such day shall be the average rate quoted to the LC Agent on such day
         on such transactions as determined by the LC Agent.

         "FINAL ORDER" means a final order of the Bankruptcy Court in the Cases
         authorizing and approving this Agreement and the other Credit Documents
         under Sections 364(c) and (d) of the Bankruptcy Code and entered at a
         final hearing, in form and substance satisfactory to the Administrative
         Agents. The Final Order shall, among other things, provide the same
         Superpriority Claims and superpriority Lien status as the Second
         Interim Order.

         "FIRST INTERIM ORDER" means the first interim DIP financing order of
         the Bankruptcy Court in the Cases authorizing and approving this
         Agreement and the other Credit Documents under Sections 364(c) and (d)
         of the Bankruptcy Code and entered at the first interim hearing on
         October 9, 2002.

         "FIRST PURCHASE CRUDE PAYABLES" means the unpaid amount of any payable
         obligation related to the purchase of crude oil by any Borrower that
         the LC Agent determines will be secured by a statutory Lien, including
         but not limited to the statutory Liens, if any, created under the laws
         of Alabama, Arkansas, California, Colorado, Kansas, Louisiana,
         Mississippi, Montana, Nebraska, New Mexico, North Dakota, Oklahoma,
         South Dakota, Texas or any other state to the extent such payable
         obligation is not at the time in question covered by a Letter of
         Credit.

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

         "FISCAL YEAR" means a twelve-month period ending on December 31 of any
         year.

         "FIXED PRICE CONTRACT" means a purchase or sale contract for crude oil,
         refined petroleum products or NGLs where the price has been fixed.

         "GAAP" means those generally accepted accounting principles and
         practices recognized as such by the Financial Accounting Standards
         Board (or any generally recognized successor).

         "GUARANTORS" has the meaning set forth in the preamble.

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

         "HEDGING CONTRACT" means (i) any agreement providing for options,
         swaps, floors, caps, collars, forward sales or forward purchases
         involving interest rates, commodities or commodity prices, equities,
         currencies, bonds or indexes based on any of the foregoing,

                                      -16-
<PAGE>

         (ii) any option, futures or forward contract traded on an exchange and
         (iii) any other derivative agreement or other similar agreement or
         arrangement, excluding in the case of subsection (i), (ii) and (iii),
         for purposes of Section 10(d) only, any such agreement or contract
         covering crude oil, refined oil products or NGLs that is entered into
         by a Borrower (A) in the ordinary course of business, (B) in accordance
         with the then effective Risk Management Policies and (C) not for
         speculative purposes.

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

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

         (i)      Liabilities for borrowed money,

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

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

         (iv)     Liabilities that would be required under GAAP to be shown on
                  such Person's balance sheet as a liability,

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

         (vi)     Liabilities constituting principal under Capital Leases,

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

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

         (ix)     Liabilities consisting of an obligation to purchase or redeem
                  commodities, securities or other property, if such Liabilities
                  arise out of or in connection with the sale or issuance of the
                  same or similar commodities, securities or property (for

                                      -17-
<PAGE>

                  example, repurchase agreements, mandatorily redeemable
                  preferred stock and sale/leaseback agreements),

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

         (xi)     Liabilities with respect to banker's acceptances or

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

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

         "INELIGIBLE PROFESSIONAL EXPENSES" means fees or expenses incurred by
         any Person, including professionals retained by the Borrowers, the
         Guarantors, the Creditors' Committee or any Bondholder's Committee, in
         (A) preventing, hindering or delaying the LC Participants', the LC
         Agent's or the Collateral Agent's enforcement or realization upon any
         of the Collateral once the Termination Declaration Date has occurred,
         (B) using cash collateral or selling any other Collateral without the
         consent of the Administrative Agents (except to the extent permitted by
         this Agreement), (C) incurring Indebtedness without the consent of the
         Administrative Agents (except to the extent permitted by this
         Agreement) and (D) objecting to or contesting in any manner, or in
         raising any defenses to, the validity, extent, perfection, priority or
         enforceability of the Prepetition Bank Debt or the Obligations or any
         mortgages, liens or security interests with respect thereto or any
         other rights or interests of the LC Issuer, the LC Participants, SCTSC,
         the Term Lenders, the Administrative Agents or the Collateral Agent, or
         in asserting any claims or causes of action, including, without
         limitation, Avoidance Actions or equitable subordination claims against
         the LC Issuer, the LC Participants, SCTSC, the Term Lenders, the
         Administrative Agents or the Collateral Agent. The term does not
         include fees or expenses incurred for investigation by the Borrowers or
         the Guarantors (or an authorized substitute for the Borrowers or the
         Guarantors if the Borrowers or the Guarantors are for some reason
         unable to conduct an investigation) of claims, causes of action or
         theories for litigation regarding (a) the validity, enforceability,
         perfection or priority of the prepetition liens in the prepetition
         collateral, (b) the validity, allowability, priority, status or amount
         of the prepetition indebtedness, within 30 days following the Filing
         Date or (c) the validity and enforceability of the SCTSC Purchase
         Agreements (provided, that the expenses incurred for such investigation
         shall not exceed $75,000).

         "INITIAL CASH BUDGET" has the meaning set forth in Section 8(w).

                                      -18-
<PAGE>

         "INITIAL FINANCIAL STATEMENTS" means the unaudited Consolidated balance
         sheet of EOTT MLP and its Subsidiaries as of August 31, 2002 and the
         related Consolidated statement of operations, cash flows and partners'
         capital for the month ended August 31, 2002.

         "INTERCREDITOR AGREEMENT" means the Intercreditor and Security
         Agreement, dated as of the date hereof, among the Borrowers, the
         Guarantors, the LC Agent, the LC Participants, SCTSC, the Term Lender
         Agent, the Term Lenders and the Collateral Agent, as amended, amended
         and restated, supplemented, or otherwise modified in accordance with
         Section 10(l).

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

         "KPMG" means KPMG L.L.P., acting as financial advisor to the LC Agent's
         Special Counsel.

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

         "LC AGENT" has the meaning set forth in the preamble.

         "LC AGENT'S SPECIAL COUNSEL" means Lovells and Bingham McCutchen LLP or
         such other counsel as may be approved by the LC Agent.

         "LC COLLATERAL" has the meaning set forth in Section 2(e)(i).

         "LC CONDITIONS" has the meaning set forth in Section 2(i).

         "LC ISSUER" means Standard Chartered, in its capacity as an issuer of
         Letters of Credit hereunder, its successors in such capacity and any
         other LC Participant appointed by the LC Agent as an LC Issuer
         hereunder in place of or in addition to Standard Chartered; provided,
         however, such appointment shall have been approved by the Majority LC
         Participants.

         "LC PARTICIPANT SCHEDULE" means Schedule II hereto.

         "LC PARTICIPANTS" means each signatory hereto (other than any Debtor
         that is a party hereto), including Standard Chartered, in its capacity
         as an LC Participant hereunder rather than as the LC Agent, LC Issuer
         or Collateral Agent, and the successors of each such party.

         "LEHMAN DIP CREDIT AGREEMENT" means the Debtor In Possession Term Loan
         Agreement, dated as of the date hereof, among the Borrowers, the
         Guarantors, the Term

                                      -19-
<PAGE>

         Lenders and the Term Lender Agent, as amended, amended and restated,
         supplemented, or otherwise modified from time to time pursuant to which
         the lenders thereunder will make available to the Borrowers an
         aggregate principal amount of $75,000,000.00.

         "LENDER PARTIES" means the LC Agent, the LC Issuer, all LC Participants
         and SCTSC.

         "LETTER OF CREDIT" means any letter of credit issued by the LC Issuer
         hereunder at the application of the Borrower Representative.

         "LETTER OF CREDIT FEE" means with respect to each Letter of Credit for
         each month or a portion thereof while such Letter of Credit remains
         outstanding, a fee equal to the product of (i) the Applicable Margin
         for Letters of Credit and (ii) the Average Daily Maximum Drawing Amount
         thereof.

         "LETTER OF CREDIT REQUEST" means a request in the form and substance of
         Exhibit A or substantially in such form as the LC Issuer may from time
         to time prescribe delivered by the Borrower Representative to the LC
         Issuer in accordance with the provisions of this Agreement.

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

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

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

         "MARKET PRICE" means, on each day, a spot price for the inventory of
         crude oil or NGLs being valued, determined by published prices and
         methodology as Currently Approved by the LC Agent at the time of
         determination.

                                      -20-
<PAGE>

         "MARKET VALUE OF UNHEDGED ELIGIBLE INVENTORY" means, with respect to
         any volume of Unhedged Eligible Inventory, the net proceeds that would
         be realized upon an immediate sale thereof for cash at the Market Price
         and otherwise on an as-is/where-is basis pursuant to foreclosure of the
         Liens thereon in favor of the Collateral Agent.

         "MATERIAL ADVERSE CHANGE" means a material and adverse change, from the
         state of affairs since the Filing Date, including any such change that
         may result from the settlement, discharge, release or other resolution
         of, or any change that may result from any development or event
         affecting any matter disclosed in the Disclosure Schedule, or as
         represented or warranted in any Credit Document, including any such
         change that may result from the settlement, discharge, release or other
         resolution of, or any change that may result from any development or
         event affecting any matter disclosed in the Disclosure Schedule, to (i)
         EOTT MLP's Consolidated financial condition as set forth in the Cash
         Budget, (ii) EOTT MLP's Consolidated operations, properties or
         prospects, considered as a whole, (iii) the Borrowers' ability to
         timely pay the Obligations or (iv) the enforceability of any Credit
         Document.

         "MATURED DIP LC OBLIGATIONS" means all amounts paid by LC Issuer on
         drafts or demands for payment drawn or made under or purported to be
         under any Letter of Credit and all other amounts due and owing to LC
         Issuer under any Letter of Credit Request.

         "MATURITY DATE" means the earlier to occur of (i) March 31, 2003 and
         (ii) the effective date of a Reorganization Plan of the Debtors that
         has been confirmed by an order of the Bankruptcy Court.

         "MAXIMUM DRAWING AMOUNT" means, at the time in question, the maximum
         amounts that LC Issuer might then or thereafter be called upon to
         advance under any Letter of Credit issued by LC Issuer then outstanding
         (including any Letter of Credit converted from Prepetition Letters of
         Credit) or, if the context requires, the sum of all such amounts under
         all such Letters of Credit.

         "MONTHLY PAYMENT DATE" means the first Business Day of each month.

         "MOODY'S" means Moody's Investors Service, Inc., or its successor.

         "MTBE" means the MTBE facility in Harris County, Texas.

         "NGLS" means liquid hydrocarbon products extracted from a natural gas
         stream, including ethane, propane, normal butane, isobutane and natural
         gasoline.

         "NYMEX" means the New York Mercantile Exchange.

         "NYMEX HEDGED ELIGIBLE INVENTORY" means Eligible Inventory which has
         been hedged for delivery within the next 190 days by a contract on the
         NYMEX arranged through brokers approved by the LC Agent and with whom a
         three-party agreement among any Borrower, the Collateral Agent and such
         broker has been entered in form and substance satisfactory to the
         Collateral Agent or otherwise hedged in a manner satisfactory to the LC
         Agent (it being understood that any such Eligible Inventory which

                                      -21-
<PAGE>

         has been sold to SCTSC pursuant to the Crude Oil Purchase Agreement
         shall be included in "NYMEX Hedged Eligible Inventory"). The value of
         NYMEX Hedged Eligible Inventory shall be the volume of the inventory
         times the Market Price.

         "OBLIGATION" means any part of the Obligations.

         "OBLIGATIONS" shall mean and include any and all Indebtedness,
         Liabilities and obligations of every kind, nature and description of
         each Debtor to any Lender Party, or any of them, however evidenced,
         arising under this Agreement or the other Credit Documents, whether now
         existing or hereafter arising, whether direct or indirect, absolute or
         contingent, joint and/or several, due or not due, primary or secondary,
         liquidated or unliquidated, secured or unsecured, or on original,
         renewed or extended terms and whether arising directly or acquired by
         LC Participants from any other party to the Credit Documents
         (including, without limitation, participations or interests of any LC
         Participant in the obligations of any Debtor to others), whether
         incurred by any Debtor as principal, surety, endorser, guarantor,
         accommodation party, indemnitor or otherwise.

         "OFFSETTING POSITION" means any offsetting sale or SCTSC Purchase
         Agreements, an offsetting NYMEX contract, an offsetting physical
         inventory position (excluding tank bottoms and pipeline linefill
         inventory classified as a long term asset and working inventory not
         held for resale) or an offsetting swap, collar or option contract, in
         each case eliminating price risk and substantially all basis risk.

         "OPEN POSITION" means, with respect to crude oil inventory or crude oil
         purchase or sale contracts, any position that does not have an
         Offsetting Position.

         "ORDERS" means, collectively, the First Interim Order, the Second
         Interim Order and the Final Order.

         "OTHER HEDGED ELIGIBLE INVENTORY" means Eligible Inventory (other than
         NYMEX Hedged Eligible Inventory) which has been hedged with a contract
         for physical delivery to a counterparty whose Account would qualify as
         a Tier I Eligible Receivable or otherwise hedged in a manner
         satisfactory to the LC Agent in its sole discretion (it being
         understood that any such Eligible Inventory which has been sold to
         SCTSC pursuant to the Crude Oil Purchase Agreement shall be included in
         "Other Hedged Eligible Inventory"). The value of Other Hedged Eligible
         Inventory shall be the volume of the inventory times the Market Price.

         "OTHER PRIORITY CLAIMS" means any account payable, obligation or
         liability that the LC Agent has determined has or will have a Lien upon
         or claim against any Cash Equivalent, Account or inventory of any
         Borrower senior or equal in priority to the security interests in favor
         of the Collateral Agent, in each case to the extent such Cash
         Equivalent, Account or inventory of any Borrower is otherwise included
         in the determination of the Borrowing Base and the included portion
         thereof has not already been reduced by such Lien or claim.

         "PERCENTAGE SHARE" means, with respect to any LC Participant the
         percentage obtained by dividing (A) the sum of the Matured DIP LC
         Obligations which such LC Participant

                                      -22-
<PAGE>

         has funded pursuant to Section 2(c)(ii), plus the portion of the
         Maximum Drawing Amount which such LC Participant might be obligated to
         fund under Section 2(c)(ii) by (B) the aggregate amount of DIP LC
         Obligations outstanding at such time. On the Closing Date, the
         Percentage Share of each LC Participant shall be as set forth in the LC
         Participant Schedule.

         "PERMITTED CAPITAL EXPENDITURES" means cash Capital Expenditures made
         to maintain, up to the level that exists on the Closing Date, the
         operating capacity of the capital assets of Borrowers, taken as a
         whole, as such assets exist on the Closing Date and not to exceed
         $12,000,000 in the aggregate during the Commitment Period.

         "PERMITTED INVENTORY LIENS" means any Lien and the amount of any
         Liability secured thereby, on crude oil or NGLs inventory that would be
         a Permitted Lien under Section 10(a)(ii) (so long as such Lien is
         inchoate) or Section 10(a)(iv).

         "PERMITTED INVESTMENTS" means (i) Cash Equivalents, (ii) Investments
         described in the Disclosure Schedule, and (iii) Investments by EOTT MLP
         or any of its Subsidiaries in any Wholly Owned Subsidiary of EOTT MLP
         that is a Borrower or a Guarantor.

         "PERMITTED LIEN" shall mean any of the following:

         (i)      Liens in favor of the Prepetition Agent and the Prepetition
                  Lenders securing the Prepetition Bank Debt;

         (ii)     Permitted Prior Liens;

         (iii)    pledges or deposits of cash or securities under worker's
                  compensation, unemployment insurance or other social security
                  legislation or deposits with insurers to cover self-retention
                  obligations under employee life or medical insurance programs;

         (iv)     carriers', warehousemen's, mechanics', materialmen's,
                  repairmen's, landlord's or other like Liens (including,
                  without limitation, Liens on property of any Debtor in the
                  possession of storage facilities, pipelines or barges) arising
                  in the ordinary course of business for amounts that are not
                  more than 60 days past due or the validity of which is being
                  contested in good faith and by appropriate proceedings, if
                  necessary, and for which adequate reserves are maintained on
                  the books of any Debtor in accordance with GAAP;

         (v)      Liens under or with respect to accounts with brokers or
                  counterparties with respect to the following commodity
                  accounts maintained by EOTT OLP with Refco, L.L.C.: Account
                  Nos. 1725 43979; 1725 65803; 1725 67320; 1725 67543; 1725
                  72336; 1725 72611; 1725 67544 and 67544M; and L610 54999 (for
                  transactions effected with or through United Energy, Inc.),
                  consisting of cash, commodities or futures contracts, options,
                  securities, instruments and other like assets;

                                      -23-
<PAGE>

         (vi)     deposits of cash or securities to secure the performance of
                  bids, trade contracts (other than for borrowed money), leases,
                  statutory or regulatory obligations, surety and appeal bonds,
                  performance bonds and other obligations of a like nature
                  incurred in the ordinary course of business;

         (vii)    Liens in respect of existing Capital Leases but encumbering
                  only the property under lease;

         (viii)   statutory Liens related to the purchase of crude oil by a
                  Borrower;

         (x)      Liens permitted by the Security Documents and the Orders;

         (xi)     Liens for taxes, assessments or governmental charges or claims
                  that are not yet delinquent or that are being contested in
                  good faith and by appropriate proceedings, if necessary, and
                  for which adequate reserves are maintained on the books of any
                  Debtor in accordance with GAAP; and

         (xii)    easements, rights-of-way, restrictions, minor defects and
                  irregularities in title and other similar charges or
                  encumbrances not interfering in any material respect with the
                  business of any Debtor.

         "PERMITTED PRIOR LIENS" means valid, perfected and otherwise
         unavoidable Liens existing as of the Filing Date, senior to the
         prepetition Liens in respect of the Prepetition Credit Agreement, and
         Liens otherwise approved in writing by the Administrative Agents. The
         term includes the priming Lien granted to the Collateral Agent pursuant
         to the terms of this Credit Agreement and the Orders and securing the
         Obligations.

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

         "PREPETITION BANK DEBT" has the meaning set forth in the fourth
         recital.

         "PREPETITION CREDIT AGREEMENT" has the meaning set forth in the third
         recital.

         "PREPETITION LENDERS" has the meaning set forth in the third recital.

         "PREPETITION LETTERS OF CREDIT" means each of the letters of credit
         issued, extended or renewed by the Prepetition LC Issuer under the
         Prepetition Credit Agreement.

         "PREPETITION LOANS" means each of the loans made by the Prepetition
         Lenders under the Prepetition Credit Agreement.

         "PRESCRIBED FORMS" has the meaning set forth in Section 3(g)(iv).

                                      -24-
<PAGE>

         "PRIORITY CLAIMS" means any Liabilities that will give rise to claims
         against the Debtors that are senior or equal in priority to the
         Superpriority Claims in favor of the Lender Parties, the Term Lender
         Agent and the Term Lenders.

         "PRIORITY PROFESSIONAL EXPENSES" means allowed and unpaid fees, costs
         and reasonable expenses of professionals retained in the Cases pursuant
         to Sections 327 and 1103 of the Bankruptcy Code consisting of
         attorneys, accountants, financial advisors, and consultants retained by
         the Borrowers, the Guarantors, the Creditors' Committee or any
         Bondholder's Committee; provided, however, that (i) Ineligible
         Professional Expenses and the fees, costs and expenses of third-party
         professionals employed by the members of the Creditors' Committee or
         any Bondholder's Committee shall not be included, and (ii) the amount
         of Priority Professional Expenses shall not exceed the applicable
         Professional Expense Cap if in effect at the time of reference thereto.

         "PROFESSIONAL EXPENSE CAP" If, at the time of reference thereto, the
         Termination Declaration Date has not occurred, there is no Professional
         Expense Cap. If, at the time of reference thereto, the Termination
         Declaration Date has occurred, the Professional Expense Cap is the
         aggregate sum of $2,000,000, whether the fees and expenses are allowed
         and unpaid at the time of the Termination Declaration Date or are
         incurred before or after the Termination Declaration Date. The term
         includes any holdbacks required by the Bankruptcy Court. All payments
         of Priority Professional Expenses made on and after the Termination
         Declaration Date shall reduce the Professional Expense Cap dollar for
         dollar.

         "RATING AGENCY" means either S&P or Moody's.

         "RECEIVABLES PURCHASE AGREEMENT" means that certain Amended and
         Restated Receivables Purchase Agreement, dated as of the date hereof,
         by and among SCTSC and EOTT OLP (as amended, amended and restated,
         supplemented or otherwise modified from time to time).

         "REGISTER" has the meaning set forth in Section 15(e).

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

         "REIMBURSABLE TAXES" has the meaning set forth in Section 3(g)(i).

         "RELEASE" has the meaning given such term in 42 U.S.C. Section
         9601(22).

         "REORGANIZATION PLAN" means a plan or plans of reorganization in the
         Cases.

         "RISK MANAGEMENT POLICIES" means, with respect to any Borrower, such
         risk management procedures and internal controls and such trading
         policies with such Open Position limits, with such changes thereto in
         effect at any time after the Closing Date, as are then currently
         approved by the EOTT Energy board of directors.

                                      -25-
<PAGE>

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

         "SCTSC" means, Standard Chartered Trade Services Corporation, a
         Delaware corporation, as purchaser under the SCTSC Purchase Agreements.

         "SCTSC PURCHASE AGREEMENTS" means, collectively, the Crude Oil Purchase
         Agreement and the Receivables Purchase Agreement.

         "SECOND INTERIM ORDER" means a second interim DIP financing order of
         the Bankruptcy Court in the Cases authorizing and approving this
         Agreement and the other Credit Documents under Sections 364(c) and (d)
         of the Bankruptcy Code and entered at the second interim hearing, in
         form and substance satisfactory to the Administrative Agents and
         attached hereto as Exhibit J.

         "SECURITY" means any rights, properties or interests of any Lender
         Party and the Collateral Agent under the Credit Documents, which
         provide recourse or other benefits to any Lender Party or the
         Collateral Agent in connection with the Obligations or the non-payment
         or non-performance thereof, including any Collateral, guaranties of the
         payment of any Obligation, bonds, surety agreements, keep-well
         agreements, letters of credit, rights of subrogation, rights of offset
         and other rights provided for thereunder.

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

         "SECURITY SCHEDULE" means Schedule III hereto.

         "STANDARD CHARTERED" has the meaning set forth in the preamble.

         "SUBSIDIARY" means, with respect to any Person, any corporation,
         association, partnership, limited liability company, joint venture or
         other business or corporate entity, enterprise or organization which is
         directly or indirectly (through one or more intermediaries) controlled
         or owned more than 50% by such Person.

         "SUPERPRIORITY CLAIM" means a claim against a Borrower or its estate in
         its Case which is an administrative claim having priority over (i) any
         and all allowed administrative expenses and (ii) unsecured claims now
         existing or hereafter arising, including, without limitation,
         administrative expenses of the kind specified in Section 503(b),
         506(c), or 507(b) of the Bankruptcy Code.

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

                                      -26-
<PAGE>

         "TEN-DAY WAITING PERIOD" means the period of time beginning on the date
         that the aggregate amount of drawings on Letters of Credit during a
         calendar month exceeds $15,000,000 and ending on the date which is the
         earlier of (a) ten days from such date or (b) the date that the Term
         Lender Agent, as directed by the Majority Term Lenders (as defined in
         the Lehman DIP Credit Agreement), gives notice to the Collateral Agent
         that they do or do not elect to designate such drawings in excess of
         $15,000,000 as a Triggering Event (as defined in the Intercreditor
         Agreement).

         "TERM LENDER AGENT" means Lehman Brothers Inc., as agent for the Term
         Lenders under the Lehman DIP Credit Agreement.

         "TERM LENDERS" means the lenders under the Lehman DIP Credit Agreement.

         "TERMINATION DECLARATION DATE" means the earliest to occur of (i) the
         date on which the LC Agent declares all Obligations to be due and
         payable on account of an Event of Default, (ii) the date on which the
         LC Agent declares a termination, reduction or restriction of any
         further commitment to extend credit to the Borrowers on account of an
         Event of Default, and (iii) the Maturity Date.

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

         "TIER I ACCOUNT DEBTOR" means a Person (i) whose Debt Rating is either
         at least Baa3 by Moody's or at least BBB- by S&P, (ii) whose commercial
         paper is rated A-1 by S&P or P-1 by Moody's or (iii) which is Currently
         Approved by the LC Agent as a Tier I Account Debtor.

         "TIER I ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means each Eligible
         Crude/Product/Liquid Delivery (i) to a Tier I Account Debtor; (ii)
         fully and unconditionally guaranteed as to payment by a Person whose
         Debt Rating is either at least Baa3 by Moody's or at least BBB- by S&P;
         or (iii) fully covered by a letter of credit from an Acceptable Issuer,
         in form Currently Approved by the LC Agent (it being understood that
         any Account which has been sold to SCTSC pursuant to the Receivables
         Purchase Agreement shall be included in "Tier I Eligible
         Crude/Product/Liquid Deliveries") .

                                      -27-
<PAGE>

         "TIER I ELIGIBLE RECEIVABLES" means each Eligible Receivable (i) from a
         Tier I Account Debtor; (ii) fully and unconditionally guaranteed as to
         payment by a Person whose Debt Rating is either at least Baa3 by
         Moody's or at least BBB- by S&P or whose commercial paper is rated A-1
         by S&P or P-1 by Moody's; or (iii) fully covered by a letter of credit
         from an Acceptable Issuer, in form Currently Approved by the LC Agent.

         "TIER II ACCOUNT DEBTOR" means a Person Currently Approved by the LC
         Agent as a Tier II Account Debtor.

         "TIER II ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means each Eligible
         Crude/Product/Liquid Delivery to a Tier II Account Debtor.

         "TIER II ELIGIBLE RECEIVABLES" means each Eligible Receivable from a
         Tier II Account Debtor.

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

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

         "U.C.P." means the Uniform Customs and Practice for Documentary Credits
         (1993 revision), International Chamber of Commerce Publication No. 500,
         or any subsequent revision thereof.

         "UNDRAWN PRODUCT PURCHASE LETTERS OF CREDIT" means, on any day, the
         aggregate amount of all underlying product purchase obligations
         supported by one or more Letters of Credit. As used herein, "underlying
         product purchase obligation" means all existing unpaid obligations of a
         Borrower to the beneficiary of such Letter of Credit in respect of
         crude oil, refined petroleum products or NGLs that such Borrower is
         obligated to purchase or receive or has then nominated to purchase or
         receive and such beneficiary is obligated to sell or deliver, in each
         case pursuant to an enforceable purchase and sale or exchange
         agreement. For the avoidance of doubt, any such crude oil, refined
         petroleum products or NGLs are excluded from Eligible Inventory and
         Eligible Crude/Product/Liquid Deliveries.

         "UNHEDGED ELIGIBLE INVENTORY" means Eligible Inventory other than NYMEX
         Hedged Eligible Inventory and Other Hedged Eligible Inventory (it being
         understood that any such Eligible Inventory which has been sold to
         SCTSC pursuant to the Crude Oil Purchase Agreement shall be included in
         "Unhedged Eligible Inventory").

         "WEEKLY COMPLIANCE CERTIFICATE" means a certificate in the form of
         Exhibit I duly completed and certified by an authorized officer of EOTT
         Energy.

         "WHOLLY OWNED SUBSIDIARY" means any Subsidiary of a Person, all of the
         issued and outstanding stock, limited liability company membership
         interests or partnership interests

                                      -28-
<PAGE>

         of which (including all rights or options to acquire such stock or
         interests) are directly or indirectly (through one or more
         Subsidiaries) owned by such Person, excluding any general partner
         interests owned by EOTT GP in any such Subsidiary that is a
         partnership, such general partner interests not to exceed two percent
         (2%) of the aggregate ownership interests of any such partnership and
         directors' qualifying shares if applicable.

2.       THE LETTERS OF CREDIT

         (a)      General.

                  (i) From and after the entry of the Second Interim Order, all
reimbursement obligations in respect of the Prepetition Letters of Credit issued
pursuant to the Prepetition Credit Agreement shall constitute reimbursement
obligations hereunder and the Prepetition Letters of Credit shall be treated as
Letters of Credit issued hereunder.

                  (ii) Subject to the terms and conditions hereof, the Borrowers
may request LC Issuer to issue, amend or extend the expiration date of, one or
more Letters of Credit; provided, however, that:

                           (1) after taking any Letter of Credit into account,
                  the DIP Facility Usage does not at such time exceed the lesser
                  of (A) the DIP Maximum Commitment and (B) Borrowing Base,
                  minus the sum of the (x) aggregate outstanding amount of
                  undrawn and drawn and unreimbursed Prepetition Letters of
                  Credit and (y) the aggregate outstanding principal amount on
                  all Prepetition Loans;

                           (2) the expiration date of such Letter of Credit is
                  prior to the earlier of (A) 70 days after the date such Letter
                  of Credit is to be issued, or such longer period (not to
                  exceed 365 days) as may be approved by the Majority LC
                  Participants and (B) the Stated Maturity Date;

                           (3) the issuance of any Letter of Credit will be in
                  compliance with all applicable governmental restrictions,
                  policies and guidelines and will not subject LC Issuer to any
                  cost that is not reimbursable under Section 3;

                           (4) such Letter of Credit is (A) issued at the
                  Borrowers' application for the benefit of (i) their critical
                  crude oil suppliers and other vendors related to the purchase
                  or exchange by any Borrower of crude oil or NGLs or other
                  business purposes (ii) Enron Corp., in the amount and as
                  required pursuant to the terms of the Enron Settlement
                  Agreement, (iii) SCTSC or (iv) any other party as otherwise
                  agreed to by the LC Agent, and (B) is in a form and with terms
                  as is usual and customary for letters of credit issued by LC
                  Issuer and shall be acceptable to LC Issuer in its sole and
                  absolute discretion and Currently Approved by the LC Agent;
                  and

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

                                      -29-
<PAGE>

         LC Issuer will honor any such request if the foregoing conditions (1)
         through (5) (in the following Section (b) referred to as the "LC
         CONDITIONS") have been met as of the date of issuance, amendment or
         extension of such Letter of Credit.

                  (b) Requesting Letters of Credit. The Borrower Representative
         must make written request for any Letter of Credit at least one
         Business Day before the date on which any of the Borrowers desire for
         LC Issuer to issue such Letter of Credit. By making any such written
         request, unless otherwise expressly stated therein, the Borrowers shall
         be deemed to have represented and warranted that the LC Conditions
         described in Section (a) will be met as of the date of issuance of such
         Letter of Credit. Each such written request for a Letter of Credit must
         be made in writing in the form and substance of Exhibit A, the terms
         and provisions of which are hereby incorporated herein by reference (or
         in such other form as may mutually be agreed upon by LC Issuer and the
         Borrower Representative). If all LC Conditions for a Letter of Credit
         have been met as described in Section (a) on any Business Day before
         11:00 a.m., New York, New York time, LC Issuer will issue such Letter
         of Credit on the same Business Day at LC Issuer's Applicable Lending
         Office. If the LC Conditions are met as described in Section (a) on any
         Business Day on or after 11:00 a.m., New York, New York time, LC Issuer
         will issue such Letter of Credit on the next succeeding Business Day at
         LC Issuer's Applicable Lending Office. If any provisions of any Letter
         of Credit Request conflict with any provisions of this Agreement, the
         provisions of this Agreement shall govern and control.

                  (c) Reimbursement and Participations

                  (i) Each Matured DIP LC Obligation shall constitute a loan by
         LC Issuer to Borrowers. Borrowers promise to pay to the Collateral
         Agent, for the benefit of the LC Issuer, on demand but subject to a
         deferral of such payment as required by Section 3.2(d) of the
         Intercreditor Agreement, the full amount of each Matured DIP LC
         Obligation, together with interest thereon (A) at the Alternate Base
         Rate to and including the second Business Day after the Matured DIP LC
         Obligation is incurred and (B) at the Default Rate on each day
         thereafter. All such funds received by the Collateral Agent from the
         Borrowers shall be applied in accordance with the Cash Waterfall.

                  (ii) LC Issuer irrevocably agrees to grant and hereby grants
         to each LC Participant, and, to induce LC Issuer to issue Letters of
         Credit hereunder, each LC Participant irrevocably agrees to accept and
         purchase and hereby accepts and purchases from LC Issuer, on the terms
         and conditions hereinafter stated and for such LC Participant's own
         account and risk an undivided interest equal to such LC Participant's
         Percentage Share of LC Issuer's obligations and rights under each
         Letter of Credit issued hereunder and the amount of each Matured DIP LC
         Obligation paid by LC Issuer thereunder. Each LC Participant
         unconditionally and irrevocably agrees with LC Issuer that, if a
         Matured DIP LC Obligation is paid under any Letter of Credit for which
         LC Issuer is not reimbursed in full by Borrowers in accordance with the
         terms of this Agreement and the related Letter of Credit Request
         (including by the application of LC Collateral), such LC Participant
         shall (in all circumstances and without set-off or counterclaim) pay to
         LC Issuer on demand, in immediately available funds at LC Issuer's
         address for notices hereunder, such LC Participant's Percentage Share
         of such Matured

                                      -30-
<PAGE>

         DIP LC Obligation (or any portion thereof that has not been reimbursed
         by Borrowers). Each LC Participant's obligation to pay LC Issuer
         pursuant to the terms of this subsection is irrevocable and
         unconditional. If any amount required to be paid by any LC Participant
         to an LC Issuer pursuant to this subsection is paid by such LC
         Participant to LC Issuer within three Business Days after the date such
         payment is due, LC Issuer shall in addition to such amount be entitled
         to recover from such LC Participant, on demand, interest thereon
         calculated from such due date at the Federal Funds Rate. If any amount
         required to be paid by any LC Participant to an LC Issuer pursuant to
         this subsection is not paid by such LC Participant to LC Issuer within
         three Business Days after the date such payment is due, LC Issuer shall
         in addition to such amount be entitled to recover from such LC
         Participant, on demand, interest thereon calculated from such due date
         at the Alternate Base Rate.

                  (iii) Whenever an LC Issuer has in accordance with subsection
         (ii) above received from any LC Participant payment of such LC
         Participant's Percentage Share of any Matured DIP LC Obligation, if LC
         Issuer thereafter receives any payment of such Matured DIP LC
         Obligation, or any payment of interest thereon (whether directly from
         the Borrowers or by application of LC Collateral or otherwise, and
         excluding only interest for any period prior to LC Issuer's demand that
         such LC Participant make such payment of its Percentage Share), LC
         Issuer will distribute to such LC Participant its Percentage Share of
         the amounts so received by LC Issuer; provided, however, that if any
         such payment received by LC Issuer must thereafter be returned by LC
         Issuer, such LC Participant shall return to LC Issuer the portion
         thereof that LC Issuer has previously distributed to it.

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

                  (d) No Duty to Inquire

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

                                      -31-
<PAGE>

                  (ii) If the maturity of any Letter of Credit is extended by
         its terms or by Law or governmental action, if any extension of the
         maturity or time for presentation of drafts or any other modification
         of the terms of any Letter of Credit is made at the request of the
         Borrower Representative, or if the amount of any Letter of Credit is
         increased at the request of the Borrower Representative, this Agreement
         shall be binding upon all Debtors with respect to such Letter of Credit
         as so extended, increased or otherwise modified, with respect to drafts
         and property covered thereby and, with respect to any action taken by
         LC Issuer, LC Issuer's correspondents or any LC Participant in
         accordance with such extension, increase or other modification.

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

                  (e) LC Collateral.

                  (i) If, after the making of all mandatory prepayments required
         under Section 2(h), the outstanding DIP LC Obligations to the LC Issuer
         will exceed (a) the lesser of (1) the Borrowing Base and (2) the DIP
         Maximum Commitment, Borrowers will immediately pay to the Collateral
         Agent an amount equal to such excess attributable to the DIP LC
         Obligations held by LC Issuer to be applied in accordance with the Cash
         Waterfall. In accordance with the Intercreditor Agreement, the
         Collateral Agent will hold such amount as collateral security for the
         remaining DIP LC Obligations held by the LC Issuer (all such amounts
         held as collateral security for such DIP LC Obligations being herein
         collectively referred to as the "LC COLLATERAL") and the other
         Obligations, and such collateral may be applied from time to time in
         accordance with the Cash Waterfall to pay the Matured DIP LC
         Obligations of the LC Issuer.

                  (ii) If the Obligations or any part thereof (a) become
         immediately due and payable pursuant to Section 11 and (b) remain
         outstanding on the Maturity Date (unless the DIP Facility is extended
         on terms acceptable to the LC Agent), then, unless all LC Participants
         otherwise specifically elect to the contrary (which election may
         thereafter be retracted by such LC Participants at any time), all DIP
         LC Obligations shall become immediately due and payable without regard
         to whether or not actual drawings or payments on the Letters of Credit
         have occurred, and Borrowers shall be obligated to pay to the
         Collateral Agent immediately an amount equal to the aggregate DIP LC

                                      -32-
<PAGE>

         Obligations of LC Issuer that are then outstanding, plus an additional
         amount acceptable to the LC Agent, to be held as LC Collateral.

                  (f) Conditions Precedent to Extension of Credit.

                  (i) Initial Extensions of Credit. No LC Participant or LC
Issuer has any obligation to make the initial Extension of Credit unless the
following conditions precedent have been satisfied:

                  (1)      Restructuring Agreement. The restructuring agreement
                           by and among the Borrowers, the Prepetition Lenders,
                           SCTSC, the Bondholders and the Enron Parties (the
                           "RESTRUCTURING Agreement") has been executed by at
                           least 66% of the Bondholders and shall be in full
                           force and effect. No party to the Restructuring
                           Agreement has exercised any termination rights with
                           respect thereto.

                  (2)      SCTSC Purchase Agreements. Each of the SCTSC Purchase
                           Agreements shall have been assumed by the Borrowers
                           and approved by the Bankruptcy Court pursuant to the
                           Second Interim Order.

                  (3)      Enron Settlement Agreement. The Enron Settlement
                           Agreement, and Employee Transition Agreement and any
                           other documents executed in connection with the
                           foregoing, shall have been executed by the EOTT
                           Parties and the Enron Parties.

                  (4)      Credit Documents. Each of the Credit Documents shall
                           have been duly executed and delivered by the
                           respective parties thereto, shall be in full force
                           and effect and shall be in form and substance
                           satisfactory to the LC Participants. Each LC
                           Participant shall have received a fully executed copy
                           of each such document.

                  (5)      Funding Conditions. All the conditions precedent to
                           extension of credit under the Lehman DIP Credit
                           Agreement shall concurrently be satisfied.

                  (6)      Certified Copy of Charter Documents. Each of the LC
                           Participants shall have received from each of the
                           Borrowers and the Guarantors a copy, certified by a
                           duly authorized officer of such Person to be true and
                           complete as of the Closing Date, of each of (A) its
                           charter or other incorporation documents as in effect
                           on such date of certification and (B) its by-laws as
                           in effect on such date.

                  (7)      Corporate Action. All corporate action necessary for
                           the valid, execution, delivery and performance by
                           each of the Borrowers of this Agreement and the other
                           Credit Documents to which it is or is to become a
                           party shall have been duly and effectively taken, and
                           evidence thereof satisfactory to the LC Participants
                           shall have been provided to each of the LC
                           Participants.

                                      -33-
<PAGE>

                  (8)      Incumbency Certificate. The LC Agent shall have
                           received from each of the Borrowers an incumbency
                           certificate, dated as of the Closing Date, signed by
                           a duly authorized officer of such Borrower, and
                           giving the name and bearing a specimen signature of
                           each individual who shall be authorized: (A) to sign,
                           in the name and on behalf of the each such Borrower,
                           each of the Credit Documents to which such Borrower
                           is or is to become a party, (B) to apply for Letters
                           of Credit, and (C) to give notices and to take other
                           action on its behalf under the Credit Documents.

                  (9)      Certificates of Insurance. The Collateral Agent shall
                           have received (A) a certificate of insurance form an
                           independent insurance broker dated as of the Closing
                           Date, identifying insurers, types of insurance,
                           insurance limits, and policy terms, and otherwise
                           describing the insurance obtained in accordance with
                           the provisions hereof and the Security Documents and
                           (B) certified copies of all policies evidencing such
                           insurance (or certificates therefor signed by the
                           insurer or an agent authorized to bind the insurer).

                  (10)     Opinions of Counsel. Each of the LC Participants and
                           the LC Agent shall have received a favorable opinion
                           addressed to the LC Participants and the LC Agent,
                           dated as of the Closing Date, in form and substance
                           satisfactory to the LC Participants and the Agent,
                           from counsel to the Borrowers.

                  (11)     Payment of Fees. The Borrowers shall have paid to the
                           LC Agent, for the account of the LC Participants and
                           the LC Agent, as applicable, all accrued and unpaid
                           fees, costs and expenses incurred by the LC
                           Participants and the LC Agent to the extent invoiced.

                  (12)     Validity of Liens. The Second Interim Order, upon
                           entry thereof, be effective to create in favor of the
                           Collateral Agent, a legal, valid, and enforceable
                           first priority (except for Permitted Liens entitled
                           to priority under applicable law) Lien upon the
                           Collateral. All filings, recordings, deliveries of
                           instruments and other actions necessary or desirable
                           in the opinion of the Collateral Agent to protect and
                           preserve such Liens shall have been duly effected.
                           The Collateral Agent shall have received evidence
                           thereof in form and substance satisfactory to the
                           Collateral Agent and the Administrative Agents.

                  (13)     Cash Budget. The LC Participants shall have received
                           (A) the Cash Budget, (B) rolling sixteen-week weekly
                           projections and cash flow forecasts for the Borrowers
                           through February 1, 2003.

                  (14)     First Day Orders. All cash management and other
                           "first day orders" submitted for entry on or about
                           the date of the commencement of the Cases shall be in
                           form and substance satisfactory to the LC Agent.

                                      -34-
<PAGE>

                  (15)     Lehman DIP Credit Documents. The Lehman DIP Credit
                           Documents, satisfactory to the LC Agent shall
                           concurrently be executed.

                  (16)     Repayment of Prepetition Loans, Etc. All outstanding
                           Prepetition Loans shall concurrently be repaid in
                           full in cash from the proceeds of the Lehman DIP
                           Credit Agreement, and all accrued and unpaid
                           interest, fees, costs and expenses that are then due
                           and payable under the Prepetition Credit Agreement
                           and the SCTSC Purchase Agreements (supported by, to
                           the extent required by the Borrowers, invoices and
                           proper supporting documentation) shall concurrently
                           be paid in full in cash.

                  (ii) Extensions of Credit. In addition to the foregoing, no LC
Participant or LC Issuer has any obligation to make any Extension of Credit
(including the initial Extension of Credit on the Closing Date) unless the
following conditions precedent have been satisfied:

                  (1)      Second Interim Order. The Bankruptcy Court shall have
                           entered the Second Interim Order and such Second
                           Interim Order shall be in full force and effect and
                           shall not have been amended, modified, stayed or
                           reversed. If the Second Interim Order is the subject
                           of a pending appeal in any respect, such Second
                           Interim Order, the issuance, extension or renewal of
                           any Letters of Credit, or the performance by any of
                           the Borrowers of any of the Obligations shall not be
                           the subject of a presently effective stay pending
                           appeal. The Borrowers, the LC Agent, the LC
                           Participants, the Prepetition Agent and the
                           Prepetition Lenders shall be entitled to rely in good
                           faith upon the Second Interim Order notwithstanding
                           objection thereto or appeal therefrom by any
                           interested party. The Borrowers, the LC Agent, the LC
                           Participants, the Prepetition Agent and the
                           Prepetition Lenders shall be permitted and required
                           to perform their respective obligations in compliance
                           with this Agreement, notwithstanding any such
                           obligation or appeal unless the Second Interim Order
                           has been stayed by a court of competent jurisdiction.

                  (2)      Representations True; No Event of Default. Each of
                           the representations and warranties of any of the
                           Borrowers contained in this Agreement, the other
                           Credit Documents or in any document or instrument
                           delivered pursuant to or in connection with this
                           Agreement shall be true as of which they were made
                           and shall also be true at and as of the time of the
                           making of such Loan or issuance of such Letter of
                           Credit, with the same effect as if made at and as of
                           that time (except to the extent changes resulting
                           from transactions contemplated or permitted by this
                           Agreement and the other Credit Documents and the to
                           the extent that such representations and warranties
                           relate expressly to an earlier date), no Default or
                           Event of Default shall have occurred and be
                           continuing or would result from the making of such
                           Extension of Credit, and no Ten-Day Waiting Period
                           shall be continuing.

                                      -35-
<PAGE>

                  (3)      No Material Adverse Change. No Material Adverse
                           Change shall have occurred.

                  (4)      No Legal Impediment. No change shall have occurred in
                           any Law or regulations thereunder or interpretations
                           thereof that in the reasonable opinion of any LC
                           Participant would make it illegal for such LC
                           Participant to participate in the issuance, extension
                           or renewal of such Letter of Credit or in the
                           reasonable opinion of the LC Issuer would make it
                           illegal for such LC Issuer to issue, extend of renew
                           such Letter of Credit.

                  (5)      Governmental Regulation. Each LC Participant shall
                           have received such statements in substance and form
                           reasonably satisfactory to such LC Participant as
                           such LC Participant shall require for the purpose of
                           compliance with any applicable regulations of the
                           Comptroller of the Currency or the Board of Governors
                           of the Federal Reserve System.

                  (6)      Proceedings and Documents. All proceedings in
                           connection with the transactions contemplated by this
                           Agreement, the other Credit Documents and all other
                           documents incident thereto shall be reasonably
                           satisfactory in substance and in form to the LC
                           Participants and to the LC Agent and the LC Agent's
                           Special Counsel, and the LC Participants, the LC
                           Agent and such counsel shall have received all
                           information and such counterpart originals or
                           certified or other copies of such documents as the LC
                           Agent shall reasonably request.

                  (7)      Payment of Fees. The Borrowers shall have paid to the
                           LC Agent all fees, expenses and other amounts due and
                           owing on the date of the issuance, extension or
                           renewal of any Letter of Credit.

                  (8)      No Challenge. No proceeding shall have been brought
                           by the Debtors to challenge (a) any of the Liens
                           granted pursuant to the Intercreditor Agreement or
                           the Orders or (b) the lien priorities set forth in
                           the Intercreditor Agreement.

                  (g) Use of Proceeds

                  (i) Borrowers shall use all Letters of Credit solely for the
purposes specified in Section 2(a)(ii)(4).

                  (ii) In no event shall any Letter of Credit be used directly
or indirectly by any Person for personal, family, household or agricultural
purposes, (A) for the purpose, whether immediate, incidental or ultimate, of
purchasing, acquiring or carrying any "margin stock" (as such term is defined in
Regulation U promulgated by the Board of Governors of the Federal Reserve
System) or (B) to extend credit to others directly or indirectly for the purpose
of purchasing or carrying any such margin stock. The Borrowers represent and
warrant that no Borrower is engaged principally in, or has as one of any
Borrower's important activities, the business of extending credit to others for
the purpose of purchasing or carrying such margin stock.

                                      -36-
<PAGE>

                  (h) Mandatory Prepayments

                  (i) The Borrowers shall ensure that at no time will the DIP
         Facility Usage exceed the Borrowing Base as calculated on any day
         during the Commitment Period, which amount as so calculated may differ
         from the amount of the Borrowing Base reflected in the most recently
         delivered Borrowing Base Report. If at any time the DIP Facility Usage
         exceeds the Borrowing Base (whether due to a reduction in the Borrowing
         Base in accordance with this Agreement, or otherwise), or the DIP
         Maximum Commitment, the Borrowers shall pay to the Collateral Agent, an
         amount at least equal to such excess to be applied in accordance with
         the Cash Waterfall.

                  (ii) If at any time prior to the Termination Declaration Date
         the Borrowers shall receive or be entitled to receive any proceeds with
         respect to any sale or issuance by the Borrowers of (a) any
         Indebtedness not permitted by Section 10(a) or (b) any additional
         equity, the Borrowers shall pay to the Collateral Agent, an amount
         equal to such proceeds to be applied in accordance with the Cash
         Waterfall.

                  (iii) If at any time prior to the Termination Declaration Date
         the Borrowers shall receive or be entitled to receive proceeds of any
         Designated Assets, the Borrowers shall pay to the Collateral Agent, an
         amount equal to such proceeds, to be applied by the Collateral Agent in
         accordance with the Cash Waterfall.

                  (iv) Any amounts prepaid pursuant to this Section shall be in
         addition to, and not in lieu of, all payments otherwise required to be
         paid under the Credit Documents at the time of such prepayment.

                  (i) Application of Payments made to LC Agent. Subject to the
provisions of the Intercreditor Agreement, funds received by the LC Agent in
accordance with the Cash Waterfall shall be applied as follows:

                  (1)      first, to pay expenses incurred by the LC Agent and
                           the Prepetition Agent;

                  (2)      second, to pay fees and other amounts (other than
                           principal) then due and payable under the DIP
                           Facility;

                  (3)      third, to cash collateralize any Letters of Credit;
                           and

                  (4)      fourth, unless an Event of Default under this
                           Agreement has occurred and is then continuing, to pay
                           obligations under the Prepetition Credit Agreement,
                           if any.

         If any LC Participant owes payments to LC Issuer for the purchase of a
         participation under Section 2(c) or to the LC Agent hereunder, any
         amounts otherwise distributable under this Section to such LC
         Participant shall be deemed to belong to LC Issuer or the LC Agent,
         respectively, to the extent of such unpaid payments, and the LC Agent
         shall apply such amounts to make such unpaid payments rather than
         distribute such amounts to such LC Participant.

                                      -37-
<PAGE>

                  (j) Interest Rates and Fees; Voluntary Reduction of Maximum
Facility Amount

                  (i) Upon the occurrence and during the continuance of a
         Default or Event of Default, all Obligations shall bear interest on
         each day outstanding at the Default Rate.

                  (ii) In consideration of each LC Participant's commitment to
         participate in the LC Issuer's obligations and rights under each Letter
         of Credit issued hereunder and the amount of each Matured DIP LC
         Obligation paid by LC Issuer thereunder, Borrowers will pay to the LC
         Agent for the account of each of LC Participant a commitment fee
         determined on a daily basis equal to the Commitment Fee Rate in effect
         on such day multiplied by the unused portion of such LC Participant's
         Percentage Share of the unused portion of the DIP Maximum Commitment on
         each day during the Commitment Period, determined for each such day by
         deducting from the amount of the DIP Maximum Commitment at the end of
         such day the DIP Facility Usage. This commitment fee shall be due and
         payable in arrears on the Monthly Payment Date and at the end of the
         Commitment Period.

                  (iii) In consideration of LC Issuer's issuance of any Letter
         of Credit, the Borrowers agree to pay to the LC Agent, for the account
         of all LC Participants under the DIP Facility in accordance with their
         respective Percentage Shares, the Letter of Credit Fee, payable monthly
         in arrears on the next Monthly Payment Date or portion thereof, that
         any Letter of Credit is outstanding. If the LC Agent, in contravention
         of the terms of this Agreement, receives any amount in excess of the
         Letter of Credit Fee required to be paid by the Borrowers, the LC Agent
         shall promptly deposit such excess amount into the Collection Account
         (as defined in the Intercreditor Agreement). If, however, the LC Agent
         receives an amount less than the Letter of Credit Fee required to be
         paid by the Borrowers (the "DEFICIENCY"), the Borrowers shall promptly
         pay the Deficiency to the LC Agent for the account of all LC
         Participants in accordance with their respective Percentage Shares.

                  (iv) In consideration of LC Issuer's issuance of any Letter of
         Credit, the Borrowers will pay to LC Issuer for its account, (A) upon
         issuance, a letter of credit fronting fee equal to the greater of (1)
         an amount equal to 0.25% per annum times the face amount of such Letter
         of Credit and (2) $250, and (B) a minimum administrative issuance fee
         and such other fees and charges customarily charged by LC Issuer in
         respect of any issuance, amendment or negotiation of any Letter of
         Credit in accordance with LC Issuer's published schedule of such
         charges effective as of the date of such amendment or negotiation.

                  (v) In addition to all other amounts due to the LC Agent under
         the Credit Documents, Borrowers will pay to the LC Agent, for its own
         account, an arrangement fee, payable monthly in arrears on the first
         day of each month with respect to the immediately preceding month in an
         amount equal to (1) one percent (1%) per annum multiplied by (2) the
         Average Daily Maximum Facility Amount for each month. The first
         installment of such fee shall be payable on November 30, 2002. For
         purposes of this Section 2(i), the "AVERAGE DAILY MAXIMUM FACILITY
         AMOUNT" for any month shall

                                      -38-
<PAGE>

         equal the quotient of (A) the sum of the Maximum Facility Amount as it
         exists at 5:00 p.m. New York time, for each day in the month divided by
         (B) the total number of days in such month.

3.       PAYMENTS TO LC PARTICIPANTS.

                  (a) General Procedures. The Debtors will make each payment
that they owe under the Credit Documents (other than fees payable to the Lender
Parties on the Closing Date) to the Collateral Agent for the account of the
Lender Party to whom such payment is owed in lawful money of the United States
of America, without set-off, deduction or counterclaim and in immediately
available funds. Each such payment must be received by the Collateral Agent not
later than noon, New York, New York time, on the date such payment becomes due
and payable. Any payment received by the Collateral Agent after such time will
be deemed to have been made on the next following Business Day. Should any such
payment become due and payable on a day other than a Business Day, the maturity
of such payment shall be extended to the next succeeding Business Day, and, in
the case of a payment of principal or past due interest, interest shall accrue
and be payable thereon for the period of such extension in the Credit Document
under which such payment is due. Each payment under a Credit Document shall be
due and payable at the place provided therein. When the Collateral Agent
collects or receives money on account of the Obligations, the Collateral Agent
shall distribute all money so collected or received to each Lender Party in
accordance with the Cash Waterfall.

                  (b) Payment Obligations Absolute. Notwithstanding any payment
by the Debtors to the Collateral Agent pursuant to Section 3(a), nothing
contained in this Agreement is intended to or shall (a) impair, as among the
Debtors and the Lender Parties, the obligation of the Debtors, which is absolute
and unconditional, to pay to the Lender Parties any Obligations payable by the
Debtors under or this Agreement or any other Credit Document as and when the
same shall become due and payable in accordance with their respective terms, or
(b) prevent the Lender Parties from exercising all remedies otherwise permitted
by applicable law upon default under this Agreement or any other Credit
Document, subject to the Intercreditor Agreement and the Orders.

                  (c) Capital Reimbursement. If either (i) the introduction or
implementation of or the compliance with or any change in or in the
interpretation of any Law or (ii) the introduction or implementation of or the
compliance with any request, directive or guideline from any central bank or
other governmental authority (whether or not having the force of Law) affects or
would affect the amount of capital required or expected to be maintained by any
Lender Party or any Person controlling any Lender Party, then, within five
Business Days after demand by such Lender Party, Borrowers will pay to such
Lender Party, from time to time as specified by such Lender Party, such
additional amount or amounts as such Lender Party shall determine to be
appropriate to compensate such Lender Party or any Person controlling such
Lender Party in light of such circumstances, to the extent that such Lender
Party reasonably determines that the amount of any such capital would be
increased or the rate of return on any such capital would be reduced by, or in
whole or in part based on, the existence of the face amount of such Lender
Party's Letters of Credit or participations in Letters of Credit.

                                      -39-
<PAGE>

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

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

                  (ii) shall change, impose, modify, apply or deem applicable
         any reserve, special deposit or similar requirements in respect of any
         Letter of Credit or against assets of, deposits with or for the account
         of, or credit extended by, such Lender Party; or

                  (iii) shall impose on any Lender Party any other condition
         affecting any Letter of Credit, the result of which is to increase the
         cost to any Lender Party of issuing any Letter of Credit or to reduce
         the amount of any sum receivable by any Lender Party in respect of any
         Letter of Credit by an amount deemed by any Lender Party to be
         material,

         then such Lender Party shall promptly notify the LC Agent and the
         Borrower Representative in writing of the happening of such event and
         of the amount required to compensate such Lender Party for such event
         (on an after-tax basis, taking into account any taxes on such
         compensation), whereupon Borrower shall, within five Business Days
         after demand therefor by such Lender Party, pay such amount to the LC
         Agent for the account of such Lender Party.

                  (e) Notice; Change of Applicable Lending Office. A Lender
Party shall notify the Borrower Representative of any event occurring after the
date of this Agreement that will entitle such Lender Party to compensation under
Sections 3(a), (c), or (d) as promptly as practicable, but in any event within
90 days after such Lender Party obtains actual knowledge thereof; provided,
however, that (i) if such Lender Party fails to give such notice within 90 days
after it obtains actual knowledge of such an event, such Lender Party shall,
with respect to compensation payable pursuant to Sections 3(a), (c), or (d) in
respect of any costs resulting from such event, only be entitled to payment
under Sections 3(a), (c), or (d) for costs incurred from and after the date 90
days prior to the date that such Lender Party does give such notice and (ii)
such Lender Party will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Lender Party, be disadvantageous to
such Lender Party, except that such Lender Party shall have no obligation to
designate an Applicable Lending Office located in the United States of America.
Each Lender Party will furnish to the Borrower Representative a certificate
setting forth the basis and amount of each request by such Lender Party for
compensation under Sections 3(a), (c), or (e).

                  (f) Availability. If any change in applicable Laws, or in the
interpretation or administration thereof, of or in any jurisdiction whatsoever,
domestic or foreign, shall make it

                                      -40-
<PAGE>

unlawful or impracticable for such Lender Party to issue or participate in
Letters of Credit, then, upon notice by such Lender Party to the Borrower
Representative and such Lender Party, Borrowers' right to obtain Letters of
Credit shall be suspended to the extent and for the duration of such illegality,
impracticability or restriction. Borrower agrees to indemnify each Lender Party
and hold it harmless against all costs, expenses, claims, penalties, liabilities
and damages that may result from any such change in Law, interpretation or
administration. Such indemnification shall be on an after-tax basis, taking into
account any taxes imposed on the amounts paid as indemnity.

                  (g) Reimbursable Taxes.

         Borrowers covenant and agree that:

                  (i) Borrowers will indemnify each Lender Party against and
         reimburse each Lender Party for all present and future stamp and other
         taxes, levies, costs and charges whatsoever imposed, assessed, levied
         or collected on or in respect of this Agreement or any Letters of
         Credit (whether or not legally or correctly imposed, assessed, levied
         or collected), excluding, however, any taxes imposed on or measured by
         the overall net income of such Lender Party or any Applicable Lending
         Office of such Lender Party by any jurisdiction in which such Lender
         Party or any such Applicable Lending Office is located (all such
         non-excluded taxes, levies, costs and charges being collectively called
         "REIMBURSABLE TAXES" in this Section). Such indemnification shall be on
         an after-tax basis, taking into account any taxes imposed on the
         amounts paid as indemnity.

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

                  (iii) Notwithstanding the foregoing provisions of this
         Section, Borrowers shall be entitled, to the extent it is required to
         do so by Law, to deduct or withhold (and not to make any
         indemnification or reimbursement for) income or other similar taxes
         imposed by the United States of America (other than any portion thereof
         attributable to a change in federal income tax Laws effected after the
         date hereof) from interest, fees or other amounts payable hereunder for
         the account of any Lender Party, other than Lender Party (A) who is a
         U.S. person for Federal income tax purposes or (B) who has the
         Prescribed Forms on file with the LC Agent (with copies provided to the
         Borrower Representative) for the applicable year to the extent
         deduction or withholding of such taxes is not

                                      -41-
<PAGE>

         required as a result of the filing of such Prescribed Forms; provided,
         however, that if Borrower shall so deduct or withhold any such taxes,
         it shall provide a statement to the LC Agent and such Lender Party,
         setting forth the amount of such taxes so deducted or withheld, the
         applicable rate and any other information or documentation which such
         Lender Party may reasonably request for assisting such Lender Party to
         obtain any allowable credits or deductions for the taxes so deducted or
         withheld in the jurisdiction or jurisdictions in which such Lender
         Party is subject to tax. As used in this Section, "PRESCRIBED FORMS"
         means such duly executed forms or statements, and in such number of
         copies, which may, from time to time, be prescribed by Law and which,
         pursuant to applicable provisions of (i) an income tax treaty between
         the United States and the country of residence of such Lender Party
         providing the forms or statements, (ii) the Tax Code or (iii) any
         applicable rules or regulations thereunder, permit Borrowers to make
         payments hereunder for the account of such Lender Party free of such
         deduction or withholding of income or similar taxes.

4.       INTENTIONALLY OMITTED.

5.       INTENTIONALLY OMITTED.

6.       INTENTIONALLY OMITTED.

7.       OTHER ACTIONS OF DEBTORS.

                  (a)      Each Debtor shall at any time and from time to time
                           take such steps as the LC Agent may request for the
                           Collateral Agent to (i) obtain an acknowledgment, in
                           form and substance satisfactory to the Collateral
                           Agent, of any bailee having possession of any of the
                           Collateral that the bailee holds such Collateral for
                           the Collateral Agent, (ii) obtain "control" of any
                           investment property, deposit accounts,
                           letter-of-credit rights or electronic chattel paper
                           (as such terms are defined in Article 9 of the UCC
                           with corresponding provisions in Sections 9-104,
                           9-105, 9-106 and 9-107, relating to what constitutes
                           "control" for such items of Collateral), with any
                           agreements establishing control to be in form and
                           substance satisfactory to the Collateral Agent, and
                           (iii) otherwise insure the continued perfection and
                           priority of the Collateral Agent's security interest
                           in any of the Collateral and of the preservation of
                           its rights therein.

                  (b)      Each Debtor shall at any time and from time to time
                           take such steps as the Collateral Agent may request
                           with respect to the creation and perfection of valid,
                           enforceable, first priority mortgage Liens on and/or
                           security interests in any real property or fixtures
                           included in the Collateral owned or leased by such
                           Debtor, including, without limitation, (i) the
                           execution, delivery, acknowledgement, filing and
                           recordation of such mortgages, deeds of trust,
                           fixture filings and similar instruments as the
                           Collateral Agent deems necessary or desirable to the
                           granting of a valid, enforceable first priority
                           mortgage Lien on any such property or fixtures and
                           (ii) the delivery of such mortgagee's title
                           insurance, title opinions and other legal

                                      -42-
<PAGE>

                           opinions as the Collateral Agent deems necessary or
                           desirable to better confirm the granting to the
                           Collateral Agent by the applicable Debtor of such
                           Lien on such Debtor's real property or fixtures
                           included in the Collateral owned or leased by such
                           Debtor.

                  (c)      Nothing contained in this Agreement shall be
                           construed to narrow the scope of the Collateral
                           Agent's security interest in any of the Collateral or
                           the perfection or priority thereof or to impair or
                           otherwise limit any of the rights, powers, privileges
                           or remedies of the Collateral Agent hereunder.

8. REPRESENTATIONS AND WARRANTIES. Each Debtor hereby makes the following
representations and warranties, each of which is a continuing representation and
warranty, the continuing truth and accuracy of each of such representations and
warranties being a continuing condition of financing of Borrowers by the LC
Participants:

                  (a)      Such Debtor is duly organized, formed or incorporated
                           and validly existing under the Laws of its
                           jurisdiction of organization or incorporation, having
                           all powers required to carry on its business. Such
                           Debtor has the partnership, corporate or limited
                           liability company, as applicable, power to execute,
                           deliver and perform the terms and provisions of this
                           Agreement and the other Credit Documents. Such Debtor
                           has taken or caused to be taken all necessary
                           partnership, corporate or limited liability company,
                           as applicable, action to authorize the execution,
                           delivery and performance of this Agreement and the
                           other Credit Documents. Each Borrower is duly
                           authorized to borrow funds hereunder.

                  (b)      Except as set forth in Section 8(b) of the Disclosure
                           Schedule, upon entry of the Second Interim Order,
                           this Agreement and the other Credit Documents
                           constitute and will constitute legal, valid and
                           binding obligations of such Debtor, enforceable in
                           accordance with their respective terms.

                  (c)      Such Debtor is in material compliance with the
                           requirements of all applicable laws, rules,
                           regulations and orders of any governmental authority
                           or Tribunal relating to its business as presently
                           conducted or contemplated, including, without
                           limitation, all permits, licensing and approval
                           requirements; ERISA; the Tax Code; all limitations,
                           restrictions, conditions, standards, prohibitions,
                           requirements, obligations, schedules and timetables
                           contained in any Environmental Law, or in any
                           regulation, code, plan, order, decree, judgment,
                           injunction, notice or demand letter issued, entered,
                           promulgated or approved thereunder, except as set
                           forth in Section 8(c) of the Disclosure Schedule and
                           to the extent that all such instances of
                           noncompliance (if any) in the aggregate could not
                           cause a Material Adverse Change.

                  (d)      No action of, or filing with, any governmental or
                           public body or authority (other than as set forth in
                           Section 8(d) of the Disclosure Schedule) is

                                      -43-
<PAGE>

                           required in connection with the execution, delivery
                           and performance of this Agreement, the other Credit
                           Documents or any of the instruments or documents to
                           be delivered pursuant hereto or thereto.

                  (e)      The execution and delivery by such Debtor of the
                           Credit Documents to which it is a party, the
                           performance by such Debtor of its obligations under
                           such Credit Documents and the consummation of the
                           transactions contemplated by the various Credit
                           Documents do not and will not (i) except as set forth
                           in Section 8(e) of the Disclosure Schedule, conflict
                           with any provision of (1) any law, or (2) the
                           organizational or other charter documents of such
                           Debtor, or (ii) result in or require the creation of
                           any Lien upon any assets or properties of such Debtor
                           or any of its Affiliates, except as expressly
                           contemplated in the Credit Documents. Except as
                           expressly contemplated in the Credit Documents, no
                           permit, consent, approval, authorization or order of
                           and no notice to or filing, registration or
                           qualification with, any Tribunal or third party is
                           required in connection with the execution, delivery
                           or performance by such Debtor of any Credit Document
                           or to consummate any transactions contemplated by the
                           Credit Documents, other than consents, approvals,
                           authorizations or orders that have been obtained or
                           notices given or filings made prior to the date
                           hereof.

                  (f)      Such Debtor's place of incorporation, organization or
                           formation, as applicable, is the State of Delaware,
                           and its principal place of business and chief
                           executive office, where its records are maintained
                           are disclosed on the signature page hereto. Except as
                           set forth in Section 8(f) of the Disclosure Schedule,
                           such Debtor does not use any trade styles, trade
                           names or fictitious partnership names.

                  (g)      Except as set forth in Section 8(g) of the Disclosure
                           Schedule, upon entry of the Second Interim Order, all
                           filings, assignments, pledges and deposits of
                           documents or instruments will have been made and all
                           other actions will have been taken that are necessary
                           or advisable, under applicable law, to establish and
                           perfect the Collateral Agent's security interest in
                           the Collateral. The Collateral and the Collateral
                           Agent's rights with respect to the Collateral are not
                           subject to any set-off, claims, withholdings or other
                           defenses. The Debtors are the owners of the
                           Collateral, free from any lien, security interest,
                           encumbrance or any other claim of demand except for
                           Permitted Liens and as otherwise set forth in the
                           Intercreditor Agreement.

                  (h)      All Debtors are subject as debtor to a Case in the
                           Bankruptcy Court.

                  (i)      After giving effect to the transactions contemplated
                           by this Agreement and the other Credit Documents,
                           there does not exist at the date hereof any condition
                           or event which constitutes a Default hereunder or
                           which after notice or lapse of time, or both, would
                           constitute such a Default hereunder.

                                      -44-
<PAGE>

                  (j)      Subject to the matters described in Section 8(j) of
                           the Disclosure Schedule: (a) no Termination Event has
                           occurred with respect to any ERISA Plan and all ERISA
                           Affiliates are in compliance with ERISA in all
                           material respects excluding any such failure that
                           could not reasonably be expected to result in a
                           Material Adverse Change, (b) no ERISA Affiliate is
                           required to contribute to, or has any other absolute
                           or contingent Liability in respect of, any
                           "multiemployer plan" as defined in Section 4001 of
                           ERISA which could reasonably be expected to result in
                           a Material Adverse Change, and (c) no "accumulated
                           funding deficiency" (as defined in Section 412(a) of
                           the Tax Code) exists with respect to any ERISA Plan,
                           whether or not waived by the Secretary of the
                           Treasury or his delegate and the current value of
                           each ERISA Plan's benefits does not exceed the
                           current value of such ERISA Plan's assets available
                           for the payment of such benefits except to the extent
                           such excess could not reasonably be expected to
                           result in a Material Adverse Change.

                  (k)      Without limiting the provisions of Section 8(c):

                  (i)      No notice, notification, demand, request for
                           information, citation, summons or order has been
                           issued, no complaint has been filed, no penalty has
                           been assessed and no investigation or review is
                           pending or threatened by any Tribunal or any other
                           Person with respect to any of the following except
                           (1) as set forth in the Section 8(k)(i) of the
                           Disclosure Schedule or (2) to the extent the same
                           could not reasonably be expected to result in a
                           Material Adverse Change: (A) any alleged generation,
                           treatment, storage, recycling, transportation,
                           disposal or Release of any Hazardous Materials,
                           either by any Debtor or on any property owned by such
                           Debtor, (B) any remedial action that might be needed
                           to respond to any such alleged generation, treatment,
                           storage, recycling, transportation, disposal or
                           Release, or (C) any alleged failure by any Debtor to
                           have any permit, license or authorization required in
                           connection with the conduct of its business or with
                           respect to any such generation, treatment, storage,
                           recycling, transportation, disposal or Release.

                  (ii)     Except as set forth in Section 8(k)(ii) of the
                           Disclosure Schedule, no Debtor otherwise has any
                           known material contingent Liability in connection
                           with any alleged generation, treatment, storage,
                           recycling, transportation, disposal or Release of any
                           Hazardous Materials that has caused, or could
                           reasonably be expected to cause, a Material Adverse
                           Change.

                  (iii)    Except as set forth in Section 8(k)(iii) of the
                           Disclosure Schedule, no Debtor has handled any
                           Hazardous Materials, other than as a generator, on
                           any properties now or previously owned or leased by
                           any Debtor to an extent that such handling has
                           caused, or could cause, a Material Adverse Change.

                                      -45-
<PAGE>

                  (iv)     Except as set forth in Section 8(k)(iv) of the
                           Disclosure Schedule or to the extent that the
                           following in the aggregate has not caused and could
                           not cause a Material Adverse Change:

                                    (1)      no PCBs are or have been present at
                                             any properties now or previously
                                             owned or leased by any Debtor;

                                    (2)      no asbestos is or has been present
                                             at any properties now or previously
                                             owned or leased by any Debtor;

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

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

                  (v)      Except as set forth in Section 8(k)(v) of the
                           Disclosure Schedule or to the extent that the
                           following in the aggregate has not caused and could
                           not cause a Material Adverse Change, no Debtor has
                           transported or arranged for the transportation of any
                           Hazardous Material to any location listed on the
                           National Priorities List under CERCLA, any location
                           listed for possible inclusion on the National
                           Priorities List by the Environmental Protection
                           Agency in CERCLIS, nor, except as set forth in
                           Section 8(k)(v) of the Disclosure Schedule or to the
                           extent that such has not caused and could not cause a
                           Material Adverse Change, any location listed on any
                           similar state list or which is the subject of
                           federal, state or local enforcement actions or other
                           investigations that may lead to claims against such
                           Debtor for clean-up costs, remedial work, damages to
                           natural resources or for personal injury claims,
                           including, but not limited to, claims under CERCLA.

                  (vi)     Except as set forth in Section 8(k)(vi) of the
                           Disclosure Schedule or to the extent that such has
                           not caused and could not cause a Material Adverse
                           Change, no property now or previously owned or leased
                           by any Debtor is listed or proposed for listing on
                           the National Priorities List promulgated pursuant to
                           CERCLA, in CERCLIS, nor on any similar state list of
                           sites requiring investigation or clean-up.

                  (vii)    Except as set forth in Section 8(k)(vii) of the
                           Disclosure Schedule or to the extent that such has
                           not caused and could not cause a Material Adverse
                           Change, there are no Liens arising under or pursuant
                           to any Environmental Laws on any of the real
                           properties or properties owned or leased by any
                           Debtor, and no governmental actions of which any
                           Debtor is aware have been taken or are in process
                           that could subject any of such properties to such
                           Liens; nor would any Debtor be required to place any
                           notice or

                                      -46-
<PAGE>

                           restriction relating to the presence of Hazardous
                           Materials at any properties owned by it or in any
                           deed to such properties.

                  (viii)   All environmental investigations, studies, audits,
                           tests, reviews or other analyses for ground water or
                           soil contamination relating to the Release of
                           Hazardous Materials conducted by or which are in the
                           possession of such Debtor in relation to any
                           properties or facility now or previously owned or
                           leased by such Debtor are available for inspection by
                           the LC Agent or the Collateral Agent at the Borrower
                           Representative's offices or facilities.

                  (l)      No Debtor is subject to regulation under the Public
                           Utility Holding Company Act of 1935, the Investment
                           Company Act of 1940 (as any of the preceding acts
                           have been amended) or any other law which regulates
                           the incurring by such Debtor of indebtedness,
                           including laws relating to common contract carriers
                           or the sale of electricity, gas, steam, water or
                           other public utility services. Such Debtor is not
                           subject to regulation under the Federal Power Act
                           that would violate, result in a default under or
                           prohibit the effectiveness or the performance of any
                           of the provisions of the Credit Documents.

                  (m)      None of the following securities is evidenced by a
                           certificate: (i) the limited partner interest of EOTT
                           MLP in EOTT OLP; (ii) the membership interest of EOTT
                           MLP in EOTT GP; (iii) the limited partner interest of
                           EOTT OLP in any of EOTT Canada, EOTT Liquids or EOTT
                           Pipeline; or (iv) the general partner interest of
                           EOTT GP in any of EOTT OLP, EOTT Canada, EOTT Liquids
                           or EOTT Pipelines.

                  (n)      No Debtor is in default in the performance of any of
                           the covenants and agreements contained in any Credit
                           Document. No event has occurred and is continuing
                           that constitutes a Default.

                  (o)      EOTT MLP has heretofore delivered to the LC Agent
                           true, correct and complete copies of the Initial
                           Financial Statements. The Initial Financial
                           Statements fairly present (subject to normal and
                           recurring adjustments in conformity with GAAP) EOTT
                           MLP's Consolidated financial position at the date
                           thereof, the Consolidated results of EOTT MLP's
                           operations for the periods thereof and Consolidated
                           cash flows for the periods thereof. The Initial
                           Financial Statements were prepared in accordance with
                           GAAP.

                  (p)      Except as shown in the Initial Financial Statements
                           or disclosed in Section 8(p) of the Disclosure
                           Schedule (with respect to Liabilities described below
                           that will give rise to Priority Claims) or the
                           Bankruptcy Schedule (with respect to all other
                           Liabilities described below), as of the Closing Date,
                           no Debtor has any outstanding Liabilities of any kind
                           (including contingent obligations, tax assessments
                           and unusual forward or long-term commitments) which
                           are, in the aggregate, material to such

                                      -47-
<PAGE>

                           Debtor or material with respect to EOTT MLP's
                           Consolidated financial condition.

                  (q)      Except as shown in the Initial Financial Statements
                           or disclosed in Section 8(q) of the Disclosure
                           Schedule, as of the Closing Date, no Debtor is
                           subject to or restricted by any franchise, contract,
                           deed, charter restriction or other instrument or
                           restriction that could cause a Material Adverse
                           Change.

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

                  (s)      As of the Closing Date, except for the Cases, as
                           disclosed in the Initial Financial Statements or in
                           Section 8(s) of the Disclosure Schedule: (i) there
                           are no actions, suits or legal, equitable,
                           arbitrative or administrative proceedings pending or,
                           to the knowledge of any Debtor threatened, against
                           any Debtor or affecting any Collateral (including,
                           without limitation, any that challenge or otherwise
                           pertain to any Debtor's title to any Collateral)
                           before any Tribunal that could cause a Material
                           Adverse Change and (ii) there are no outstanding
                           judgments, injunctions, writs, rulings or orders by
                           any such Tribunal against any Debtor or any Debtor's
                           stockholders, partners, directors or officers or
                           affecting any Collateral that could cause a Material
                           Adverse Change.

                  (t)      As of the Closing Date, except as disclosed in
                           Section 8(t) of the Disclosure Schedule, neither the
                           business nor the properties of any Debtor has been
                           affected by any fire, explosion, accident, strike,
                           lockout or other labor dispute, drought, storm, hail,
                           earthquake, embargo, act of God or of the public
                           enemy or other casualty (whether or not covered by
                           insurance), which could cause a Material Adverse
                           Change.

                  (u)      Neither EOTT MLP nor any Borrower presently has any
                           Subsidiary or owns any capital stock in any other
                           corporation or association except those listed in
                           Section 8(u) of the Disclosure Schedule. No Debtor is
                           a member

                                      -48-
<PAGE>

                           of any general or limited partnership, limited
                           liability company, joint venture or association of
                           any type whatsoever except those listed in Section
                           8(u) of the Disclosure Schedule. Each of EOTT MLP and
                           EOTT OLP owns, directly or indirectly, the entire
                           equity interest in each of its Subsidiaries listed in
                           Section 8(u) of the Disclosure Schedule.

                  (v)      Section 8(v) of the Disclosure Schedule contains a
                           complete and correct list, as of the date of this
                           Agreement, of each credit agreement, loan agreement,
                           indenture, SCTSC Purchase Agreement, guaranty or
                           other arrangement providing for or otherwise relating
                           to any Indebtedness or any extension of credit (or
                           commitment for any extension of credit), or guaranty
                           by, any Debtor, or to which any Debtor is subject, in
                           excess of $1,000,000 with respect to any single
                           Person and such Person's Affiliates taken as whole,
                           other than the Credit Documents. The aggregate
                           principal or face amount outstanding or that may
                           become outstanding under each such arrangement is
                           correctly described in Section 8(v) of the Disclosure
                           Schedule.

                  (w)      The Debtors have delivered to the LC Agent and each
                           of the LC Participants an initial sixteen-week weekly
                           cash revenue and expense budget (as supplemented from
                           time to time on a rolling sixteen-week basis and
                           approved by the LC Agent as to form and substance for
                           each subsequent week, the "CASH BUDGET"). The Cash
                           Budget has been prepared in good faith based on
                           reasonable assumptions. The initial Cash Budget (the
                           "INITIAL CASH BUDGET") is attached hereto as Exhibit
                           G. The projections are based upon reasonable
                           estimates and assumptions have been prepared on the
                           basis of assumptions stated therein and reflect the
                           reasonable estimates of the Borrowers of the results
                           of operations and other information projected
                           therein.

                  (x)      The state of affairs referred to in the Disclosure
                           Schedule, and those in any supplement thereto, relate
                           only to the representations and warranties in the
                           Section or paragraph of the Agreement that
                           corresponds with the Section reference to which the
                           disclosures in the Disclosure Schedule expressly
                           refer or otherwise incorporate by express reference
                           and not to any other representation or warranty in
                           this Agreement.

                  (y)      Subject to the rights of the Debtors set forth in the
                           proviso below, the Debtors shall acknowledge and
                           agree that (a) they have no claims or causes of
                           action (including, without limitation, avoidance
                           actions) against the Prepetition Agent or the
                           Prepetition Lenders under the Prepetition Credit
                           Agreement (or any of their directors, officers,
                           employees or agents), (b) they have no offset right,
                           counterclaim or defense of any kind against any of
                           its obligations, indebtedness or liabilities to the
                           agent or the lenders under the Prepetition Credit
                           Agreement, (c) the Prepetition Agent and the
                           Prepetition Lenders under the Prepetition Credit
                           Agreement have valid perfected liens on the
                           prepetition collateral described in their

                                      -49-
<PAGE>

                           mortgages and security agreements and that there have
                           been no past conditions, acts, omissions, events,
                           circumstances or matters which have impaired or
                           adversely affected any of the agent's or the lenders'
                           rights, interests and title under the Prepetition
                           Credit Agreement with respect to such prepetition
                           collateral and (d) the Prepetition Agent and the
                           Prepetition Lenders under the Prepetition Credit
                           Agreement have properly performed and satisfied in a
                           timely manner all of their obligations to the
                           Borrowers; provided, however, that the Debtors shall
                           retain their rights, if any, to object to or
                           challenge within 30 days following the Filing Date
                           (a) the validity, enforceability, extent, perfection
                           or priority of the security interests and liens
                           securing indebtedness under the Prepetition Credit
                           Agreement and the SCTSC Purchase Agreements or (b)
                           the validity, allowability, status or amount of the
                           indebtedness under the Prepetition Credit Agreement
                           and the SCTSC Purchase Agreements.

9. AFFIRMATIVE COVENANTS. To conform with the terms and conditions under which
each LC Participant is willing to have Extensions of Credit outstanding to
Borrowers, and to induce each LC Participant to enter into this Agreement and to
make Extensions of Credit, the Debtors covenant and agree jointly and severally
that until the full and final payment in cash of the Obligations and the
expiration or termination of all Letters of Credit, unless the Majority LC
Participants have has previously agreed otherwise:

                  (a) Payment and Performance. Each Debtor will pay all amounts
due under the Credit Documents to which it is a party in accordance with the
terms thereof and will observe, perform and comply with every covenant, term and
condition expressed in the Credit Documents to which it is a party.

                  (b) Payment of Expenses. All Borrower Expenses shall be part
of the Obligations. Borrower shall pay any Lender Party, on such Lender Party's
demand, any and all Borrower Expenses which such Lender Party may pay in
connection with the provisions hereof.

                  (c) Instruments, Documents, Securities or Chattel Paper. Each
Debtor shall promptly notify the Collateral Agent of any instruments, documents,
securities or chattel paper that are owned or acquired by such Debtor. At any
time and from time to time, upon the demand of the LC Agent, such Debtor shall
deliver and pledge to the Collateral Agent, duly endorsed and/or accompanied by
such instruments of assignment and transfer in such form and substance as the LC
Agent may reasonably request, any and all instruments, documents, securities
and/or chattel paper which are included in the Collateral as the LC Agent may
request. Such Debtor shall maintain and safeguard any and all documents,
instruments and chattel paper in its possession and its individual books and
records relating to the Collateral in a commercially reasonable manner and cause
the security interest granted herein to the Collateral Agent to be marked
thereon.

                  (d) Books, Financial Statements and Reports. Each Debtor will
at all times maintain full and accurate books of account and records. EOTT MLP
will maintain and will cause its Subsidiaries to maintain a standard system of
accounting, will maintain its Fiscal Year and will furnish the following
statements and reports to the LC Agent at Borrowers' expense:

                                      -50-
<PAGE>

                  (i) As soon as available, and in any event within 120 days
         after the end of each Fiscal Year, commencing with Fiscal Year 2002 (A)
         complete Consolidated financial statements of EOTT MLP as of, or for
         the period ending, December 31 of the preceding year, together with all
         notes thereto, prepared in reasonable detail in accordance with GAAP,
         and (B) consolidating unaudited balance sheets and statements of income
         of each Consolidated Subsidiary of EOTT MLP. The Consolidated financial
         statements referred to in subclause (A) of the preceding sentence shall
         set forth in comparative form the corresponding figures for the
         preceding Fiscal Year. In addition, within 120 days after the end of
         each Fiscal Year, commencing with Fiscal Year 2002 EOTT MLP will
         furnish a certificate signed by such accountants (1) stating that they
         have read this Agreement, and (2) further stating that in making their
         examination and reporting on the Consolidated financial statements
         described above they obtained no knowledge of any Default existing at
         the end of such Fiscal Year, or, if they did so conclude that a Default
         existed, specifying its nature and period of existence.

                  (ii) As soon as available, and in any event within 45 days
         after the end of each of Fiscal Quarter of each Fiscal Year, (1) EOTT
         MLP's Consolidated balance sheet as of the end of such Fiscal Quarter
         and Consolidated statements of EOTT MLP's operations and cash flows for
         such Fiscal Quarter and for the period from the beginning of the then
         current Fiscal Year to the end of such Fiscal Quarter, (2)
         consolidating balance sheets and statements of income of each
         Consolidated Subsidiary as of (A) the end of such Fiscal Quarter or (B)
         for such Fiscal Quarter and for the period from the beginning of the
         then current Fiscal Year to the end of such Fiscal Quarter, all in
         reasonable detail and prepared in accordance with GAAP, subject to
         changes resulting from normal and recurring adjustments in conformity
         with GAAP, and as soon as available, and in any event within 60 days
         after the end of the last Fiscal Quarter of each Fiscal Year, EOTT
         MLP's unaudited Consolidated balance sheet as of the end of such Fiscal
         Quarter and Consolidated statement of operations for such Fiscal
         Quarter and for the period from the beginning of the current Fiscal
         Year to the end of such Fiscal Quarter.

                  (iii) As soon as available, and in any event within 45 days
         after the end of each calendar month, (1) EOTT MLP's unaudited
         Consolidated balance sheet as of the end of such month and an unaudited
         Consolidated statement of EOTT MLP's earnings for such calendar month,
         all in reasonable detail and prepared in accordance with GAAP, subject
         to changes resulting from normal and recurring adjustments in
         conformity with GAAP and (2) a report setting forth for such month
         aggregate volumes for all marketing activities of all Debtors.

                  (iv) Together with each set of financial statements furnished
         under subsections (i), (ii) and (iii) above, a certificate in the form
         of Exhibit B signed by the chief financial officer or treasurer of EOTT
         Energy stating that such financial statements are accurate and complete
         in all material respects (subject to normal and recurring adjustments
         in conformity with GAAP in the case of unaudited financial statements),
         stating that he has reviewed the Credit Documents containing the
         calculations and stating that no Default exists at the end of such
         Fiscal Quarter or month, respectively, or at the time of such
         certificate or specifying the nature and period of existence of any
         such Default.

                                      -51-
<PAGE>

                  (v) Promptly, copies of all material pleadings, notices,
         orders and other papers filed in the Cases and copies of all reports
         filed with the United States Trustee in the Cases.

                  (vi) No later than 12:00 pm (noon) on Monday of each week, (1)
         the Cash Budget, (2) a cash flow report showing actual performance for
         each weekly period reflected in the Cash Budget and variance of actual
         performance from projected performance in the Cash Budget, commencing
         the week ended October 12, 2002, (3) a Barrel Report, (4) a Weekly
         Compliance Certificate and (5) a Borrowing Base Report in the form of
         Exhibit C with such supporting information in detail as may from time
         to time be prescribed by the LC Agent, duly completed and certified by
         an authorized officer of EOTT Energy. Each Borrowing Base Report shall
         include (A) a detailed listing of each Borrower's Accounts and Eligible
         Crude/Product/Liquid Deliveries; (B) a detailed listing of the volumes
         of each such party's crude oil and NGLs and the location of same; and
         (C) a listing of each such party's crude oil, refined petroleum product
         or NGL repurchase transactions in place or executed during the period
         covered by such report.

                  (vii) Promptly upon their becoming available, copies of all
         financial statements, reports, notices and proxy statements sent by
         EOTT MLP to its unit holders and all registration statements,
         prospectus supplements, periodic reports and other statements and
         schedules filed by EOTT MLP with any securities exchange, the
         Securities and Exchange Commission or any similar governmental
         authority.

                  (viii) From time to time upon request, a written or oral
         report, in reasonable detail, as to the status of the Reorganization
         Plan.

                  (ix) On each Business Day, (1) a Cash Flow Report in the form
         of Exhibit D duly completed by an authorized officer of EOTT Energy, as
         of the preceding Business Day and (2) a statement reconciling such
         report with the most recent Cash Flow Report previously delivered
         pursuant to this subsection (ix).

                  (x) As soon as available, and in any event within 45 days
         after the end of Fiscal Year 2002, an environmental compliance
         certificate signed by the chief executive officers of EOTT GP and EOTT
         Energy in the form attached hereto as Exhibit E. Further, if requested
         by the LC Agent, the Debtors shall permit and cooperate with an
         environmental and safety review made in connection with the operations
         of the Debtors' properties one time during each Fiscal Year, by
         consultants selected by the LC Agent which review shall, if requested
         by the LC Agent, be arranged and supervised by environmental legal
         counsel for the LC Agent, all at the Debtors' cost and expense. The
         consultant shall render an oral or written report, as specified by the
         LC Agent, based upon such review at the Debtors' cost and expense and a
         copy thereof will be provided to the Debtors.

                  (xi) Concurrently with the annual renewal of the Debtors'
         insurance policies, the Debtors shall at their own cost and expense, if
         requested by the LC Agent in writing, cause a certificate or report to
         be issued by the Debtors' professional insurance

                                      -52-
<PAGE>

         consultants or other insurance consultants satisfactory to the LC Agent
         certifying that the Debtors' insurance for the next succeeding year
         after such renewal (or for such longer period for which such insurance
         is in effect) complies with the provisions of this Agreement and the
         Security Documents.

                  (xii) On or about the fifth (5th) (but no later than the
         eighth (8th)) and on or about the twentieth (20th) (but no later than
         the twenty-third (23rd)) day of each calendar month and upon request by
         the LC Agent an Open Position Report in the form of Exhibit F, with
         such supporting information in detail as may from time to time be
         prescribed by the LC Agent, duly completed by an authorized officer of
         EOTT Energy as of the last day of the preceding month if delivered on
         or about the fifth (5th) day of a month, as of the fifteenth (15th) day
         if delivered on or about the twentieth (20th) day of a month, or as of
         the date otherwise requested. Such report shall include (A) a listing
         of all long and short positions; (B) crude oil, refined petroleum
         product and NGL location information; (C) pricing information published
         by an independent publication acceptable to the LC Agent; and (D) a
         report on a mark to market basis of all Fixed Price Contracts together
         with a complete list of all net realized gains and losses on any Fixed
         Price Contracts in form satisfactory to the LC Agent.

                  (xiii) On or before the tenth (10th) Business Day following
         receipt by any Borrower or any other Debtor, a copy of any account
         statement received from any bank, securities intermediary, commodities
         or futures broker or other institution with whom such Borrower or such
         Debtor maintains any deposit, investment, trading or other account.

                  (xiv) Within 30 days after the end of each calendar month, a
         copy of the Lease Volume Report attached hereto as Exhibit K.

                  (xv) Promptly, from time to time, such other information,
         documents or reports regarding any Borrower or any other Debtor
         (including accountants' management letters and updates to the Cash
         Budget) as the LC Agent may request, including any regulatory filings.

                  (e) Other Information and Inspections. In each case, subject
to the last sentence of this Section 9(e), each Debtor will furnish to each LC
Participant any information that the LC Agent or any LC Participant may from
time to time request concerning any covenant, provision or condition of the
Credit Documents or any matter in connection with the Debtors' businesses and
operations. In each case, subject to the last sentence of this Section 9(e),
each Debtor will permit representatives appointed by the LC Agent (including
independent accountants, auditors, agents, attorneys, appraisers and any other
Persons) to visit and inspect during normal business hours any of such Debtor's
property, including its books of account, other books and records and any
facilities or other business assets, to make extra copies therefrom and
photocopies and photographs thereof and to write down and record any information
such representatives obtain, and each Debtor shall permit the LC Agent or its
representatives to investigate and verify the accuracy of the information
furnished to the LC Agent or any LC Participant in connection with the Credit
Documents and to discuss all such matters with its officers, employees and, upon
prior notice to the Borrower Representative, its

                                      -53-
<PAGE>

representatives. Without limitation of the foregoing, at such reasonable times
and intervals as the LC Agent and the LC Participants shall reasonably request,
Borrowers shall permit the LC Agent and its representatives to conduct an audit,
examination, test and verification of the Collateral and the other business and
assets of the Debtors and in connection with such examination to have full
access to and the right to examine, audit, make abstracts and copies from and
inspect the Debtors' records, files, books of account and all other documents,
instruments and agreements to which any Debtor is a party. Borrowers shall pay
all reasonable costs and expenses of the LC Agent associated with any such
audits. Additionally, at Borrowers' expense, from time to time the LC Agent may
require an inspection of the Collateral in storage at EOTT Terminals to be
conducted by an independent appraiser selected by the LC Agent. Each of the
foregoing audits, inspections and examinations shall be made subject to
compliance with applicable safety standards and the same conditions applicable
to any Debtor in respect of property of that Debtor on the premises of Persons
other than a Debtor or an Affiliate of a Debtor, and all information, books and
records furnished or requested to be furnished, or of which copies, photocopies
or photographs are made or requested to be made, all information to be
investigated or verified and all discussions conducted with any officer,
employee or representative of any Debtor shall be subject to any applicable
attorney-client privilege exceptions that the Debtor reasonably determines is
necessary and to compliance with conditions to disclosures under non-disclosure
agreements between any Debtor and Persons other than a Debtor or an Affiliate of
a Debtor, and subject further to the express undertaking of each Person acting
at the direction of or on behalf of the LC Agent to be bound by the
confidentiality provisions of Section 17(p).

                  (f) Appraisals for Eligible Fixed Assets. Each Debtor will,
within 45 days of the Closing Date, deliver to the LC Agent, all necessary
appraisals conducted by an appraiser selected by the LC Agent in order to
calculate the Appraised Value of Eligible Fixed Assets.

                  (g) Notice of Material Events and Change of Address. Each
Debtor will notify each LC Participant, not later than five Business Days after
any executive officer of such Debtor has knowledge thereof, stating that such
notice is being given pursuant to this Agreement, of:

                  (i) the occurrence of any Material Adverse Change,

                  (ii) the occurrence of any Default,

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

                  (iv) the occurrence of any Termination Event,

                  (v) Under any Environmental Law, any claim of $1,000,000 or
         more, any notice of potential liability that might be reasonably likely
         to exceed such amount or any other material adverse claim asserted
         against any Debtor or with respect to any Debtor's properties taken as
         a whole,

                                      -54-
<PAGE>

                  (vi) (1) any material loss, damage, investigation, action,
         suit, proceeding, claims, setoff, withholding or other defenses
         relating to the Collateral, and (2) the occurrence of any Event of
         Default or event which, with the passing of time or giving of notice or
         both, would constitute an Event of Default, and

                  (vii) the filing of any suit or proceeding, or the assertion
         in writing of a claim against any Debtor or with respect to any
         Debtor's properties.

         Upon the occurrence of any of the foregoing, the Debtors will take all
         necessary or appropriate steps to remedy promptly any such Material
         Adverse Change, Default, acceleration, default or Termination Event to
         protect against any such adverse claim, to defend any such suit or
         proceeding and to resolve all controversies on account of any of the
         foregoing. The Debtors will also notify the LC Agent and the LC Agent's
         counsel in writing at least 20 Business Days prior to the date that any
         Debtor changes its name or the location of its chief executive office
         or principal place of business or the place where it keeps its books
         and records concerning the Collateral, furnishing with such notice any
         necessary financing statement amendments or requesting the LC Agent and
         its counsel to prepare the same.

                  (h) Maintenance of Properties. Each Debtor will maintain,
preserve, protect and keep all Collateral and all other property used or useful
in the conduct of its business in good condition (ordinary wear and tear
excepted) and in material compliance with all applicable Laws and will from time
to time make all repairs, renewals and replacements reasonably needed to enable
the business and operations carried on in connection therewith to be promptly
and advantageously conducted at all times.

                  (i) Discharge of Liens. At its option, should any Debtor fail
to do so, except to the extent permitted hereunder, the Collateral Agent may
discharge post-petition taxes, Liens or security interests or other encumbrances
or charges at any time levied or placed on the Collateral and may pay for the
insurance, maintenance and preservation of the Collateral. The Borrowers agree
to reimburse the Collateral Agent on demand, together with interest thereon at
the Alternate Base Rate, for any payment made or expense incurred by the
Collateral Agent in connection with the foregoing or otherwise under this
Agreement, and any such payment or expense shall constitute a part of the
Obligations secured by the Collateral.

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

                  (k) Payment of Trade Liabilities, Taxes, etc. Each Debtor will
(i) timely file all required tax returns including any extensions; (ii) timely
pay all post-petition taxes, assessments and other governmental charges or
levies imposed upon it or upon its income, profits or property; (iii) within 120
days after the date such goods are delivered or such services are rendered, pay
all post-petition Liabilities owed by it on ordinary trade terms to vendors,
suppliers and other Persons providing goods and services used by it in the
ordinary course of its business; (iv) pay and discharge when due all other
post-petition Liabilities now or hereafter

                                      -55-
<PAGE>

owed by it, other than royalty payments suspended in the ordinary course of
business; and (v) maintain appropriate accruals and reserves for all of the
foregoing in accordance with GAAP. However, each Debtor may delay paying or
discharging any of the foregoing so long as it has set aside on its books
adequate reserves therefor in accordance with GAAP and (i) it is in good faith
contesting the validity thereof in the Enron Bankruptcy Proceedings, if
applicable, or by other appropriate proceedings, if necessary or (ii) it is in
good faith contesting the validity of such Liability, and such Liability is
claimed by an Affiliate of Enron that is not a debtor-in-possession in the Enron
Bankruptcy Proceedings.

                  (l) Insurance. Each Debtor shall at all times carry insurance
for all of its property (irrespective of whether such property is owned or
acquired before, on or after the Closing Date) with financially sound and
reputable insurers, of a character usually carried by responsible Persons
engaged in the same business or a business similarly situated against loss or
damage, of the kinds and in the amounts customarily carried by such Persons and
carry such other insurance as is usually carried by such Persons, including,
without limitation, insurance against its liability for injury to Persons (with
the LC Agent, the LC Participants and the Collateral Agent named as additional
insureds), all in amounts and of the type currently carried by such Debtor.
Within thirty (30) days after the Closing Date, Borrower will provide to the LC
Agent a detailed schedule describing all insurance coverages maintained by or
for any Debtor together with copies of the underlying policies. Within thirty
(30) days after the Closing Date, all insurance policies covering Collateral
shall be endorsed (i) to provide for payment of losses to the Collateral Agent,
(ii) to provide that such policies may not be canceled or reduced or affected in
any material manner for any reason without 15 days prior notice to the
Collateral Agent and (iii) to provide for any other matters specified in any
applicable Security Document or which the Collateral Agent may reasonably
require.

                  (m) Performance on Borrowers' Behalf. If any Debtor fails to
pay any post-petition taxes, insurance premiums, expenses, attorneys' fees or
other amounts it is required to pay under any Credit Document, the LC Agent may
pay the same after notice of such payment by the LC Agent is given to the
Borrower Representative. Borrower shall immediately reimburse the LC Agent for
any such payments and each amount paid by the LC Agent shall constitute an
Obligation owed hereunder that is due and payable on the date such amount is
paid by the LC Agent.

                  (n) Interest. Borrower hereby promises to each LC Participant
to pay interest at the Default Rate on all Obligations (including Obligations to
pay fees or to reimburse or indemnify any LC Participant) that Borrower has in
this Agreement promised to pay to such LC Participant and that are not paid when
due. Such interest shall accrue from the date such Obligations become due until
they are paid.

                  (o) Compliance with Agreements and Law. Subject to its rights
and duties as a debtor in a Case, each Debtor will perform all material
obligations it is required to perform under the terms of each indenture,
including in the case of EOTT MLP, the EOTT MLP Senior Notes Indenture,
mortgage, deed of trust, security agreement, lease and franchise and each
material agreement, contract or other instrument or obligation to which it is a
party or by which it or any of its properties is bound, except where performance
is excused or delayed by the

                                      -56-
<PAGE>

Bankruptcy Code. Each Debtor will conduct its business and affairs in compliance
with all Laws applicable thereto.

                  (p) Environmental Matters; Environmental Reviews.

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

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

                  (iii) Each Debtor will promptly furnish to the LC Agent all
         requests for information, notices of claim, demand letters and other
         notifications received after the date hereof by such Debtor in
         connection with its ownership or use of its properties or the conduct
         of its business, relating to potential responsibility with respect to
         any investigation or clean-up of Hazardous Material at any location,
         the potential liability of which exceeds $1,000,000 or could cause a
         Material Adverse Change if resolved adversely against such Debtor.

                  (q) Evidence of Compliance. Subject to the last sentence of
Section 9(e), each Debtor will furnish to each LC Participant at such Debtor's
expense all evidence which the LC Agent from time to time reasonably requests in
writing as to the accuracy and validity of or compliance with all
representations, warranties and covenants made by any Debtor in the Credit
Documents, the satisfaction of all conditions contained therein and all other
matters pertaining thereto.

                  (r) Agreement to Deliver Security Documents. To further secure
the Obligations whenever requested by the LC Agent in its sole and absolute
discretion, the Debtors will deliver chattel mortgages, security agreements,
financing statements and other Security Documents in form and substance
satisfactory to the LC Agent for the purpose of granting, confirming and
perfecting first and prior Liens or security interests in any personal property
(tangible or intangible) now owned or hereafter acquired by any Debtor.

                  (s) Guaranties of Newly Created or Acquired Subsidiaries. Each
Subsidiary of EOTT created, acquired or coming into existence after the date
hereof shall, promptly upon request by the LC Agent, execute and deliver to the
LC Agent an instrument of joinder pursuant

                                      -57-
<PAGE>

to which each Subsidiary adopts, ratifies, confirms and agrees to perform and be
bound by Section 13 hereof and the absolute and unconditional guaranty of the
timely repayment of the Obligations and the due and punctual performance of the
obligations of Borrower hereunder set forth therein, which instrument shall
otherwise be satisfactory to the LC Agent in form and substance. EOTT MLP will
cause each such Subsidiary to deliver to the LC Agent, simultaneously with its
delivery of such an instrument of joinder, written evidence satisfactory to the
LC Agent and its counsel that such Subsidiary has taken all corporate, limited
liability company or partnership action necessary to duly approve and authorize
its execution, delivery and performance of such instrument and any other
documents that it is required to execute.

                  (t) Compliance with Agreements. Each Debtor shall observe,
perform or comply with any term or condition under the Restructuring Agreement.
In addition, each Debtor shall observe, perform or comply with any agreement
with any Person or any term or condition of any instrument, if such agreement or
instrument is materially significant to such Debtor or to EOTT MLP on a
Consolidated basis or materially significant to any Guarantor, unless any such
failure to so observe, perform or comply is remedied within the applicable
period of grace (if any) provided in such agreement or instrument.

                  (u) Risk Management Policies. During the term of this
Agreement, EOTT MLP will maintain in effect the Risk Management Policies and
adhere to and conduct its risk management activities, and cause the other
Debtors to adhere to and conduct their respective risk management activities, in
accordance with such policies. The Borrower Representative shall provide written
notice to the LC Agent of any changes to the Risk Management Policies that the
EOTT Energy board of directors adopts promptly upon the EOTT Energy board of
directors' action thereon, and in no event more than 30 days after approval by
the EOTT Energy board of directors of such changes.

                  (v) Critical Vendor Program. The Debtors shall have
established a critical vendor program satisfactory to the LC Agent on the date
of the Second Interim Order.

                  (w) Retention of Financial Advisor and Commercial Finance
Audits. The Debtors acknowledge that the LC Agent and/or the LC Agent's Special
Counsel may continue to retain KPMG to, among other things, make visits to, and
discuss financial and operational matters with, the Borrowers and to advise the
LC Agent and the LC Participants as to business, operations and financial
condition of the Debtors. Such consultant shall not be limited in the frequency
of visits to the facilities of the Debtors. The Debtors shall cooperate with
such consultant and provide such consultant with all information reasonably
requested by such consultant in connection with its engagement by the LC Agent
and/or the LC Agent's Special Counsel. Upon the reasonable request of the LC
Agent, the Borrowers will obtain and deliver to the LC Agent, or, if the LC
Agent so elects, will cooperate with the LC Agent in the LC Agent's obtaining, a
report of an independent collateral auditor satisfactory to the LC Agent (which
may be affiliated with one of the LC Participants) with respect to the accounts,
inventory and fixed assets components included in the Borrowing Base, which
report shall indicate whether or not the information set forth in the Borrowing
Base Certificate most recently delivered is accurate and complete in all
material respects based upon a review by such auditors of the accounts
receivable (including verification with respect to the amount, aging, identity
and credit of the respective Account Debtors and the billing practices of the
Borrowers) and inventory (including

                                      -58-
<PAGE>
verification as to the value, location and respective types). All such
collateral value reports shall be conducted and made at the expense of the
Borrowers.

10. NEGATIVE COVENANTS. To conform with the terms and conditions under which
each LC Participant is willing to have Extensions of Credit outstanding to the
Borrowers, and to induce each LC Participant to enter into this Agreement and
make the Extensions of Credit, the Debtors covenant and agree jointly and
severally that until the full and final payment in cash of the Obligations and
the expiration or termination of all Letters of Credit, unless the Majority LC
Participants have previously agreed otherwise:

                  (a) Indebtedness. No Debtor will in any manner owe or be
liable for Indebtedness except:

                  (i) the Obligations;

                  (ii) Indebtedness arising under Hedging Contracts permitted
         under Section 10(d) or consisting of options, swaps, collars and
         similar instruments that relate to crude oil, refined petroleum
         products or NGLs that satisfy the requirements of subclauses (A), (B)
         and (C) of the proviso to the definition of "Hedging Contracts";

                  (iii) Indebtedness of any Borrower owing to any other
         Borrower;

                  (iv) Liabilities with respect to obligations to deliver crude
         oil, refined petroleum products or NGLs or to render terminalling or
         storage services in consideration for advance payments to a Borrower;
         provided, however, such delivery or rendering, as applicable, is to be
         made within 60 days after such payment;

                  (v) guaranties by EOTT MLP or any Borrower of trade payables
         of any Borrower incurred and paid in the ordinary course of business on
         ordinary trade terms;

                  (vi) Indebtedness of the Debtors incurred prior to the Filing
         Date;

                  (vii) any Indebtedness outstanding under the SCTSC Purchase
         Agreements;

                  (viii) any Indebtedness existing under the note referred to in
         the Enron Settlement Agreement;

                  (ix) any Indebtedness existing under the Lehman DIP Credit
         Agreement not exceeding $75,000,000 in principal amount, less any
         optional or mandatory prepayments or repayments of principal;

                  (x) any Indebtedness existing under the EOTT MLP Senior Notes;
         and

                  (xi) Daylight Overdraft obligations to Standard Chartered, as
         contemplated in the Intercreditor Agreement, not to exceed $15,000,000.

                                      -59-
<PAGE>

                  (b) Accounts. No Debtor shall, without the prior written
consent of the Majority LC Participants, open or maintain any commodity,
investment, securities or deposit accounts except for those listed on the
Disclosure Schedule.

                  (c) Limitation on Liens. No Debtor will assign, sell,
mortgage, lease, transfer, set over, pledge, grant any security interest in or
Lien upon, encumber, or otherwise dispose of or abandon any Accounts, inventory,
cash, investment securities, margin deposit accounts with commodities brokers or
other rights or properties that constitute Collateral, whether now owned or
hereafter acquired, nor will any Debtor permit any such Lien, encumbrance or
disposition to exist or occur with respect to such property, except for (i) the
sale from time to time in the ordinary course of business of such property as
may constitute inventory of such Debtor; (ii) Liens in favor of the Collateral
Agent; (iii) taxes constituting a Lien but not due and payable; (iv) Liens
described in any description of property attached to any mortgage, deed of trust
or fixture filing included in the Security Documents and any renewals,
extensions or modifications (but not enlargements) thereof; (v) Liens securing
purchase money financing for any property or asset hereafter acquired; (vi)
Liens reserved in leases, or arising by operation of law, for rent and for
compliance with the terms of the lease with respect to leasehold estates; (vii)
mechanic's or materialmen's Liens or other similar Liens, whether contractual or
arising by operation of law, for amounts that are not more than 60 days past due
or the validity of which is being contested in good faith by appropriate
proceedings; (viii) those consented to in writing by the LC Agent; and (ix)
Permitted Liens. Except as provided in the Intercreditor Agreement, no Debtor
shall abandon, forfeit, surrender, or release any rights in the Collateral or
enter into any operating, joint venture or similar agreement with respect to the
Collateral.

                  (d) Hedging Contracts. No Debtor will be a party to or in any
manner be liable on any Hedging Contract, except Hedging Contracts to hedge the
Debtors' risk from fluctuations in commodity prices in the ordinary course of
business or pursuant to the Crude Oil Repurchase Agreement.

                  (e) Limitation on Mergers, etc. and Issuances of Securities.
Except as expressly provided in this Section and as contemplated by the
Reorganization Plan filed with the Bankruptcy Court, no Debtor will (i) enter
into any transaction of merger or consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), (ii)
acquire any business or property from, or capital stock of, or be a party to any
acquisition of, any Person except for (1) purchases of inventory and other
property to be sold or used in the ordinary course of business, and (2)
Investments permitted under Section 10(h) or (iii) sell, transfer, lease,
exchange, alienate or otherwise dispose of, in one transaction or a series of
transactions, any part of its business or property, whether now owned or
hereafter acquired, except for sales or transfers not prohibited by Section
10(f). EOTT MLP will not issue any securities other than limited partnership
interests and any options or warrants giving the holders thereof only the right
to acquire such interests. No Subsidiary of EOTT MLP will issue any additional
partnership or limited liability company interests or shares of its capital
stock or other securities or any options, warrants or other rights to acquire
such additional partnership or limited liability company interests or shares or
other securities, except that a direct Subsidiary of a Debtor may issue
additional partnership or limited liability company interests or shares or other
securities to such Debtor or to EOTT MLP so long as such Subsidiary is a Wholly
Owned

                                      -60-
<PAGE>

Subsidiary of EOTT MLP after giving effect thereto. No Subsidiary of a Borrower
which is a partnership will allow any diminution of such Borrower's interest
(direct or indirect) therein.

                  (f) Limitation on Asset Sales. No Debtor will sell, transfer,
lease, exchange, alienate or dispose of any Collateral or any of its material
assets or properties or any material interest therein, including pursuant to any
sale/leaseback transaction, except:

                  (i) equipment that is worthless or obsolete or no longer
necessary or useful to the proper conduct of its business or that is replaced by
equipment of equal suitability and value;

                  (ii) (x) inventory (including pipeline linefill) sold in the
ordinary course of business on ordinary trade terms and (y) such inventory sold
pursuant to the Crude Oil Purchase Agreement (including documents of title
delivered to SCTSC in connection therewith and all proceeds thereof);

                  (iii) Accounts, contract rights and any proceeds thereof sold
pursuant to the Receivables Purchase Agreement; and

                  (iv) Designated Assets on terms and conditions satisfactory to
the LC Agent.

         All proceeds of any such sales shall be paid directly to the Collateral
         Agent as provided for in the Intercreditor Agreement. No Debtor will
         sell, transfer or otherwise dispose of capital stock of or partnership
         or other interests in any of its Subsidiaries except to EOTT MLP or a
         Wholly Owned Subsidiary of EOTT MLP. No Debtor will discount, sell,
         pledge or assign any notes payable to it, Accounts or future income.
         The Collateral Agent will, at the Borrower Representative's request and
         expense, execute a release, satisfactory to the Borrower Representative
         and the LC Agent, of any Collateral so sold, transferred, leased,
         exchanged, alienated or disposed of pursuant to this Section 10(f).

                  (g) Limitation on Distributions, Dividends and Redemptions. No
Debtor will declare or pay any dividends on, or make any other distribution of
any kind in respect of, any class of its capital stock or any partnership,
limited liability company or other interest in it, nor will any Debtor directly
or indirectly make any capital contribution of any nature to, or purchase,
redeem, acquire or retire any shares of the capital stock of or partnership or
limited liability company interests in, any Debtor (whether such interests are
now or hereafter issued, outstanding or created), or cause or permit any
reduction or retirement of the capital stock of any Debtor, while any
Obligations are outstanding. Notwithstanding the foregoing, Subsidiaries of a
Borrower shall not be restricted, directly or indirectly, from declaring and
paying dividends or making any other distributions to such Borrower.

                  (h) Limitation on New Businesses, Investments and Capital
Expenditures. No Debtor will (i) make any expenditure or commitment or incur any
obligation or enter into or engage in any transaction except in the ordinary
course of business, (ii) engage directly or indirectly in any business or
conduct any operations except in connection with or incidental to its present
businesses and operations, (iii) make any capital contributions to or other
Investments in any Person, other than Permitted Investments, or (v) make or
incur any Capital Expenditures other than Permitted Capital Expenditures. All
transactions permitted under this Section are subject to Section 10(f).

                                      -61-
<PAGE>

                  (i) Limitation on Credit Extensions. Except for Permitted
Investments and Hedging Contracts permitted under Section 10(d), no Debtor will
extend credit, make advances or make loans other than normal and prudent
extensions of credit to customers buying goods and services in the ordinary
course of business or to another Debtor in the ordinary course of business,
which extensions shall not be for longer periods than those extended by similar
businesses operated in a normal and prudent manner.

                  (j) Transactions with Affiliates. No Debtor will engage in any
material transaction with Enron or any of its Affiliates, except as contemplated
in the Enron Settlement Agreement and the Employee Transition Agreement.

                  (k) Prohibited Contracts. Except as expressly provided for in
the Credit Documents and as described in the Disclosure Schedule, no Debtor
will, directly or indirectly, enter into, create or otherwise allow to exist any
contract or other consensual arrangement restricting the ability of any
Subsidiary of EOTT MLP, including but not limited to any Borrower to: (i) pay
dividends or make other distributions, (ii) purchase or redeem equity interests
held in it by any Borrower or EOTT MLP, (iii) repay loans and other Indebtedness
owing by it to Borrower or EOTT MLP, (iv) transfer any of its assets to any
Borrower or EOTT MLP or (v) create, incur, assume or suffer to exist any Lien
upon its property or assets to secure the Obligations. No Debtor will enter into
any "take-or-pay" contract or other contract or arrangement for the purchase of
goods or services that obligates it to pay for such goods or service regardless
of whether they are delivered or furnished to it other than contracts for
pipeline capacity or for services in either case reasonably anticipated to be
utilized in the ordinary course of business. No ERISA Affiliate will incur any
obligation to contribute to any "multiemployer plan" as defined in Section 4001
of ERISA that is subject to Title IV of ERISA. No Debtor shall prepay the
principal of, or purchase, redeem or otherwise acquire or retire for value, any
of the EOTT MLP Senior Notes.

                  (l) Modification of Certain Agreements. Except as contemplated
by the Reorganization Plan filed with the Bankruptcy Court, no Debtor will
amend, modify, or permit any amendment or modification to (i) its partnership
agreement, limited liability company agreement, certificate of formation,
certificate of incorporation or other organizational document, as applicable,
(ii) the EOTT MLP Senior Notes Indenture, or (iii) any contract or lease, that
releases, qualifies, limits, makes contingent or otherwise detrimentally affects
the rights and benefits of the LC Agent or any other Lender Party under or
acquired pursuant to any Security Documents.

                  (m) Open Positions. The Debtors shall at all times limit their
Open Positions in accordance with the Risk Management Policies as from time to
time in effect.

                  (n) Redelivery of Borrowing Base Report. If any contract gives
rise to an Eligible Receivable that is reflected in a Borrowing Base Report
representing the obligation to deliver crude oil in the month next succeeding
the month in which the Borrowing Base Report is delivered, and such contract is
modified, sold or exchanged in any way that would negatively affect the
Borrowing Base, then the Borrower Representative shall immediately (i) deliver
to the LC Agent a revised Borrowing Base Report satisfactory to the LC Agent and
(ii) make any prepayment as may be required under Section 2(g) resulting from
such reduced Borrowing Base.

                                      -62-
<PAGE>

                  (o) Books and Records. No Debtor shall permit any material
change in the accounting treatment or reporting practices of each Debtor from
those used in preparation of the financial statements referenced in Section
9(d), except as required or permitted under GAAP.

                  (p) Bankruptcy Cases. No Debtor will seek, consent or suffer
to exist (i) any modification, stay, vacation or amendment to the Orders, unless
(1) the LC Participants have failed to perform their obligations hereunder in
any respect material to the business operations of the Debtors and the effect of
such modification, stay, vacation or amendment is solely to remedy such failure
or to obtain for the Debtors substitute performance or (2) the LC Agent has
consented to such modification, stay, vacation or amendment in writing, (ii) a
priority claim for administrative expense or unsecured claim against any of the
Debtors (now existing or hereafter arising of any kind or nature whatsoever,
including without limitation any administrative expense of the kind specified in
Section 503(b), 506(c) or 507(b) of the Bankruptcy Code) equal or superior to
the priority claims of the LC Agent and the LC Participants in respect of the
Obligations, except for Agreed Administrative Expenses, or (iii) any Lien on any
Collateral, having a priority equal or superior to the Liens in favor of the LC
Agent and the LC Participants or the Collateral Agent in respect of the
Obligations or securing the Prepetition Bank Debt, except for Permitted Prior
Liens.

                  (q) Cash Budget. No Debtor will permit the actual Cumulative
Net Cash Flow for any two consecutive Reference Periods to be less than 90% of
the amount of projected Cumulative Net Cash Flow for such Reference Periods as
specified in the Fixed Cash Budget.

                  As used herein:

                  (i)      "CUMULATIVE NET CASH FLOW" has the meaning set forth
                           in the Initial Cash Budget;

                  (ii)     "FIXED CASH BUDGET" means the Initial Cash Budget and
                           any other subsequent sixteen-week weekly cash revenue
                           and expense budget prepared by the Debtors and
                           approved by the LC Agent as to form and substance and
                           designated in writing by the Debtors and the LC Agent
                           as the "Fixed Cash Budget" for purposes of this
                           Agreement. In the event that the Initial Cash Budget
                           has not been replaced by a subsequent Fixed Cash
                           Budget, as provided above, then for periods between
                           the last period covered by the Initial Cash Budget
                           and the Maturity Date, and for purposes of
                           determining compliance with this Section 10(q), the
                           projected Cumulative Net Cash Flow shall be
                           determined by extrapolating the Cumulative Cash Flow
                           for the last month covered by the Initial Cash Budget
                           on a basis satisfactory to the LC Agent; and

                  (iii)    "REFERENCE PERIOD" means any period described in the
                           Fixed Cash Budget which starts with the first week
                           covered by such Budget and ends with the most
                           recently ended week. Accordingly, the first Reference
                           Period will be the first week covered by the Fixed
                           Cash Budget, the second Reference Period will be the
                           first two weeks (considered as a single period)
                           covered by the Fixed Cash Budget, the third Reference

                                      -63-
<PAGE>

                           Period will be the first three weeks (considered as a
                           single period) covered by the Fixed Cash Budget, and
                           so on.

                  (r) Minimum Crude Oil Lease Volumes. No Debtor shall permit
aggregate crude oil purchases at the lease during any month to be less than 98%
of the Minimum Lease Volumes. As used herein, "Minimum Lease Volume" means
230,000 barrels per day. In the event that the Borrowers wish to enter into a
marketing arrangement with a third party that will cause a decrease in aggregate
crude oil purchases from leaseholders, the LC Participants may amend this clause
(s) to reduce the Minimum Lease Volume in accordance with Section 17(r).

                  (s) Prepetition Indebtedness. The Debtors shall not pay or
discharge, or cause to be paid or discharged, any Indebtedness of any Debtor
incurred before the Filing Date other than payments:

                  (i) on Prepetition Bank Debt;

                  (ii) approved by the Bankruptcy Court on or before the date of
         the Second Interim Order, including, without limitation, the Critical
         Vendor Order;

                  (iii) required by Section 1114 of the Bankruptcy Code;

                  (iv) as required in the Reorganization Plan, on or about the
         effective date of the Reorganization Plan; or

                  (v) of severance and other payments approved by the Bankruptcy
         Court and to which the LC Agent consents in writing.

         None of the Borrowers shall (x) file any motion with the Bankruptcy
         Court in accordance with Section 546(g) of the Bankruptcy Code seeking
         to return any goods shipped to any of the Borrowers prior to the Filing
         Date, or (y) consent to any creditor taking a set-off against any
         Prepetition Bank Debt based upon any such return pursuant to Section
         553(b)(1) of the Bankruptcy Code or otherwise, in each case without the
         LC Agent's consent in writing.

11. EVENTS OF DEFAULT. Each of the following events constitutes an Event of
Default under this Agreement:

                  (a)      Borrower fails to pay any Obligations with respect to
                           any Matured DIP LC Obligations when due and payable;

                  (b)      Any Debtor fails to pay any Obligation (other than
                           the Obligations in subsection (a) above) when due and
                           payable, whether at a date for the payment of a fixed
                           installment or as a contingent or other payment
                           becomes due and payable or as a result of
                           acceleration or otherwise, within three Business Days
                           after the same becomes due;

                  (c)      Any event defined as a "default" or "event of
                           default" in any Credit Document (other than this
                           Agreement and such "events of default" that are

                                      -64-
<PAGE>

                           defined to have occurred upon the occurrence of
                           Events of Default hereunder) occurs, and the same is
                           not remedied within the applicable period of grace
                           (if any) provided in such Credit Document;

                  (d)      Any Debtor fails to duly observe, perform or comply
                           with any covenant, agreement or provision of Section
                           2(g), Section 2(h), Section 9(f), Section 9(g),
                           Section 9(l), or Section 10;

                  (e)      Any Debtor fails (other than as referred to in
                           subsection (a), (b), (c) or (d) above) to duly
                           observe, perform or comply with any covenant,
                           agreement, condition or provision of any Credit
                           Document to which it is a party, and such failure
                           remains unremedied for a period of 10 days after
                           notice of such failure is given by the LC Agent to
                           the Borrower Representative;

                  (f)      Any representation or warranty previously, presently
                           or hereafter made or deemed made in writing by or on
                           behalf of any Debtor in connection with any Credit
                           Document shall prove to have been false or incorrect
                           in any material respect on any date on or as of which
                           made or deemed made, or any Credit Document at any
                           time ceases to be valid, binding and enforceable as
                           warranted in Section 8(b) for any reason other than
                           its release or subordination by all LC Participants;

                  (g)      Any Debtor shall default in the payment when due of
                           any principal of or interest on any postpetition
                           Indebtedness, or any prepetition Indebtedness if, by
                           order of the Bankruptcy Court issued with respect to
                           such prepetition Indebtedness, the default thereunder
                           entitles the holder thereof to relief from the
                           automatic stay pursuant to Section 362 of the
                           Bankruptcy Code, in excess of $500,000 in the
                           aggregate of such postpetition or prepetition
                           Indebtedness, or any event specified in any note,
                           agreement, indenture, mortgage, deed of trust,
                           security agreement or other document evidencing or
                           relating to any such Indebtedness shall occur if the
                           effect of such event is to cause, or (with the giving
                           of any notice or the lapse of time or both) to permit
                           the holder or holders of such post-petition
                           Indebtedness (or a trustee or agent on behalf of such
                           holder or holders) to cause, such post-petition
                           Indebtedness to become due, or to be prepaid in full
                           (whether by redemption, purchase, offer to purchase
                           or otherwise), prior to its stated maturity;

                  (h)      Any Debtor has entered against it judgment or
                           execution action which remains undismissed for a
                           period of thirty (30) days, or relief from the
                           automatic stay under Section 362(a) of the Bankruptcy
                           Code shall be granted to any creditor or creditors of
                           any of the Debtors with respect to assets having an
                           aggregate value in excess of $500,000 or where the
                           deprivation of any of the Debtors of such assets
                           would reasonably be expected to have a material
                           adverse effect on the Debtors, considered as a whole;

                                      -65-
<PAGE>

                  (i)      Any Change in Control occurs;

                  (j)      Any Borrower (i) maintains in effect Risk Management
                           Policies that are not Currently Approved by the LC
                           Agent or (ii) fails to adhere to or conduct its risk
                           management activities, or cause the other Debtors to
                           adhere to or conduct their respective risk management
                           activities, in accordance with the Risk Management
                           Policies as in effect from time to time;

                  (k)      Any Material Adverse Change occurs;

                  (l)      Any of the Borrowers shall be enjoined from
                           conducting any part of its business as a debtor in
                           possession;

                  (m)      The Bankruptcy Court shall enter an order (i)
                           amending, supplementing, altering, staying, vacating
                           rescinding or otherwise modifying any Order or any
                           other order with respect to any of the Cases
                           affecting in any material respect this Agreement or
                           the Prepetition Credit Agreement, (ii) appointing a
                           chapter 11 trustee or an examiner with enlarged
                           powers relating to the operation of the business
                           (powers beyond those set forth in Section 1106(a)(3)
                           and (4) of the Bankruptcy Code) under Section 1106(b)
                           of the Bankruptcy Code in any of the Cases, (iii)
                           dismissing any of the Cases or converting any of the
                           Cases to a chapter 7 case, (iv) granting relief from
                           the automatic stay to any creditor holding or
                           asserting a Lien or reclamation claim on a material
                           portion (i.e. more than $500,000 in the aggregate) of
                           the assets of any of the Borrowers or where the
                           deprivation of any of the Borrowers of such assets
                           would reasonably be expected to have a material
                           adverse effect on the Borrowers, considered as a
                           whole, or (v) granting of any security interest in or
                           any Lien on any property of the Debtors in favor of
                           any party (other than liens granted pursuant to the
                           Second Interim Order or otherwise permitted therein);

                  (n)      The Bankruptcy Court shall fail to sign the Final
                           Order by October 25, 2002;

                  (o)      An application shall be filed by any of the Borrowers
                           for the approval of any other Superpriority Claim
                           (exclusive of the Superpriority Claim in favor of the
                           Prepetition Lenders, the LC Participants, the LC
                           Issuer, the Term Lenders, the Administrative Agents
                           and the Collateral Agent) in any of the Cases which
                           is pari passu with or senior to the claims of the LC
                           Agent and the LC Participants against any of the
                           Borrowers unless after giving effect to the
                           transactions contemplated by such application all
                           Obligations and the Prepetition Bank Debt (whether
                           contingent or otherwise) shall be paid in full in
                           cash and the DIP Maximum Commitment shall be
                           terminated, or there shall arise any such
                           Superpriority Claim;

                                      -66-
<PAGE>

                  (p)      Any of the Borrowers shall be unable to pay its
                           postpetition debts as they mature or shall fail to
                           comply with any order of the Bankruptcy Court in any
                           material respect;

                  (q)      Any party to the Restructuring Agreement (other than
                           any of the Prepetition Lenders) shall breach any of
                           its obligations under the Restructuring Agreement;

                  (r)      The occurrence of an event of default under any of
                           the Orders or, when it was in effect, the First
                           Interim Order or the Second Interim Order; or

                  (s)      Any of the Borrowers shall file a motion in any of
                           the Cases (i) except as provided in the Orders, to
                           use cash collateral of the LC Participants or of the
                           Prepetition Lenders under Section 363(c) of the
                           Bankruptcy Code without the LC Participants' and the
                           Prepetition Lenders' consent, (ii) to recover from
                           any portions of the Collateral any costs or expenses
                           of preserving or disposing of such Collateral
                           pursuant to Section 506(c) of the Bankruptcy Code, or
                           (iii) to take any other action or actions adverse to
                           the LC Participants or the Prepetition Lenders or
                           their rights and remedies hereunder or any of the
                           other Credit Documents or any of the documents
                           evidencing or creating any of the Prepetition Bank
                           Debt or the LC Participants' or the Prepetition
                           Lenders' interest in any of the Collateral; or

                  (t)      Any failure to complete the following actions within
                           the time periods set forth below:

                           (i)      By the week of December 3, 2002, hearing
                                    held on the adequacy of the disclosure
                                    statement;

                           (ii)     By January 3, 2003, mail solicitation
                                    materials to creditors, Bondholders and the
                                    Enron Parties;

                           (iii)    By February 4, 2003, obtain all ballot and
                                    confirmation and objections to
                                    Reorganization Plan;

                           (iv)     By February 11, 2003, hearing held on
                                    confirmation of Reorganization Plan; and

                           (v)      By March 1, 2003, Reorganization Plan to
                                    become effective.

                  (u)      Any event defined as a "default" or "event of
                           default" in either SCTSC Purchase Agreements occurs
                           and the same is not remedied within the applicable
                           period of grace (if any) provided in such SCTSC
                           Purchase Agreement.

12. RIGHTS AND REMEDIES. Upon the occurrence and during the continuance of any
Event of Default, the LC Agent, upon the direction of the Majority LC
Participants, shall by

                                      -67-
<PAGE>

notice to the Borrower Representative declare all or any portion of the DIP LC
Obligations and other Obligations to be due and payable and/or the commitment to
extend credit to the Borrowers (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Obligations which shall be so declared
due and payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the commitment to
extend credit to the Borrowers shall terminate. In addition pursuant to Section
2.3(a) of the Intercreditor Agreement, if the obligations under the Lehman DIP
Credit Agreement are accelerated as a result of a continuing "Event of Default"
thereunder, the LC Agent, upon the direction of the Majority LC Participants,
shall by notice to the Borrower Representative declare all or any portion of the
Obligations to be due and payable at the same time as the obligations under the
Lehman DIP Credit Agreement, whereupon the full unpaid amount of such
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment. In
accordance with the Intercreditor Agreement, the LC Agent shall not exercise
certain of its remedies without the consent of the Required Secured Parties (as
defined in the Intercreditor Agreement).

13. GUARANTY.

                  (a)      Each Guarantor hereby jointly and severally,
                           irrevocably, absolutely and unconditionally
                           guarantees to the LC Participants the prompt,
                           complete and full payment and performance when due,
                           no matter how the same shall become due, of all
                           Obligations, including but not limited to:

                  (i)      All obligations of Borrowers to make reimbursements
                           and other payments to LC Participants in respect of
                           Letters of Credit issued;

                  (ii)     All other sums payable under this Agreement and the
                           other Credit Documents, whether for principal,
                           interest, fees or otherwise; and

                  (iii)    Any and all other Indebtedness, obligations or
                           Liabilities that may at any time be owed by Borrowers
                           to the LC Participants, whether incurred heretofore
                           or hereafter or concurrently herewith, under or
                           pursuant to any of the Credit Documents, and
                           including interest, attorneys' fees and collection
                           costs as may be provided by law or in any instrument
                           evidencing any such Indebtedness or Liability.

         Without limiting the generality of the foregoing, the Guarantors'
         liability hereunder shall extend to and include all postpetition
         interest, expenses and other Liabilities of Borrowers described above
         in this subsection (a), or below in the following subsection (b), which
         would be owed by Borrowers but for the fact that they are unenforceable
         or not allowable due to the existence of a bankruptcy, reorganization
         or similar proceeding involving a Borrower.

                  (b)      If Borrowers shall for any reason fail to pay any
                           Obligation described in Section 13(a), as and when
                           such Obligation shall become due and payable, whether
                           at its stated maturity, as a result of the exercise
                           of any power to accelerate, or otherwise, the
                           Guarantors will, forthwith upon demand by

                                      -68-
<PAGE>

                           the LC Agent, pay such Obligation in full to the
                           Collateral Agent for the account of the LC
                           Participants.

                  (c)      If any Guarantor fails to pay any obligation as
                           described in the immediately preceding subsections
                           (a) or (b), each Guarantor will incur the additional
                           joint and several obligation to pay to the Collateral
                           Agent for the account of the LC Agent, and the
                           Guarantors will forthwith upon demand by the LC Agent
                           pay to the Collateral Agent for the account of the LC
                           Agent, the amount of any and all expenses, including
                           fees and disbursements of the LC Agent's counsel and
                           of any experts or agents retained by the LC Agent
                           that the LC Agent may incur as a result of such
                           failure.

                  (d)      As between the Guarantors and LC Participants, this
                           guaranty shall be considered a primary and liquidated
                           Liability of the Guarantors.

                  (e)      Each Guarantor hereby waives all defenses based on
                           suretyship and agrees that its obligations shall
                           continue and the enforceability thereof against such
                           Guarantor shall not be affected by:

                  (i)      any waiver, delay or failure of any LC Participant to
                           exercise or to exhaust any right or remedy or to
                           bring any right or remedy or action against the
                           Borrowers, the Collateral or any other security
                           available to the LC Participants in connection with
                           the Obligations;

                  (ii)     any extension, renewal, settlement, compromise,
                           modification, amendment, consent, waiver or release
                           in any respect, arising under or in connection with
                           any of the Obligations;

                  (iii)    the existence of any claim, set-off, or other rights
                           that any Borrower may have at any time against any
                           Lender Party, whether in connection with the
                           Obligations or any unrelated transactions;

                  (iv)     any invalidity or unenforceability relating to or
                           against any Borrower, for any reason, of any of the
                           Obligations or any agreement relating thereto;

                  (v)      any Event of Default; or

                  (vi)     any other act or failure to act or delay of any kind
                           by any Borrower or Lender Party or any other
                           circumstance whatsoever which might, but for the
                           provisions hereof, constitute a defense available to,
                           or a legal or equitable discharge of, the Borrowers.

                  (f)      The obligations of each Guarantor hereunder shall
                           continue to be effective or be reinstated, as the
                           case may be, if at any time, payment, or any part
                           thereof, of any obligation or interest thereon is
                           rescinded or must otherwise be restored by any Lender
                           Party in connection with the bankruptcy of the
                           Borrowers.

                                      -69-
<PAGE>

                  (g)      Each Guarantor hereby waives promptness, diligence,
                           presentment, demand of payment, protest, order and
                           receipt of any notice in connection with its
                           obligations hereunder.

14. LC AGENT.

                  (a) Appointment and Authority. Each Lender Party hereby
irrevocably authorizes the LC Agent, and the LC Agent hereby undertakes, to
receive payments of principal, interest and other amounts due hereunder as
specified herein and to take all other actions and to exercise such powers under
the Credit Documents as are specifically delegated to the LC Agent by the terms
hereof or thereof, together with all other powers reasonably incidental thereto.
The relationship of the LC Agent to the other Lender Parties and, in so far as
such action relates to them, the Prepetition Lenders, is only that of one
commercial lender acting as agent for others, and nothing in the Credit
Documents shall be construed to constitute the LC Agent a trustee or other
fiduciary for any Lender Party and, in so far as such action relates to them,
the Prepetition Lenders, nor to impose on the LC Agent duties and obligations
other than those expressly provided for in the Credit Documents. With respect to
any matters not expressly provided for in the Credit Documents and any matters
that the Credit Documents place within the discretion of the LC Agent, the LC
Agent shall not be required to exercise any discretion or take any action, and
it may request instructions from the Lender Parties with respect to any such
matter, in which case it shall be required to act or to refrain from acting (and
shall be fully protected and free from liability to all Lender Parties in so
acting or refraining from acting) upon the instructions of the Majority LC
Participants (including itself); provided, however, that the LC Agent shall not
be required to take any action that exposes it to a risk of personal liability
that it considers unreasonable or which is contrary to the Credit Documents or
to applicable Law. Upon receipt by the LC Agent from the Borrower Representative
of any communication calling for action on the part of the LC Participants or
upon notice from the Borrower Representative or any LC Participant to the LC
Agent of any Default or Event of Default, the LC Agent shall promptly notify
each other LC Participant thereof.

                  (b) Exculpation, the LC Agent's Reliance, etc. Neither the LC
Agent nor any of its directors, officers, agents, attorneys or employees shall
be liable for any action taken or omitted to be taken by any of them under or in
connection with the Credit Documents, including their negligence of any kind,
except that each shall be liable for its own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the LC Agent (i)
may consult with legal counsel (including counsel for the Borrowers),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (ii) makes
no warranty or representation to any other Lender Party or any Prepetition
Lender and shall not be responsible to any other Lender Party or any Prepetition
Lender for any statements, warranties or representations made in or in
connection with the Credit Documents; (iii) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of the Credit Documents on the part of any Debtor or to inspect
the property (including the books and records) of any Debtor; (iv) shall not be
responsible to any other Lender Party, or any Prepetition Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Credit Document or any instrument or document furnished in connection
therewith; (v) may rely upon the representations and

                                      -70-
<PAGE>

warranties of each Debtor, Lender Party or any Prepetition Lender in exercising
its powers hereunder; and (vi) shall incur no Liability under or in respect of
the Credit Documents by acting upon any notice, consent, certificate or other
instrument or writing (including any facsimile, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper Person or Persons.

                  (c) Credit Decisions. Each Lender Party acknowledges that it
has, independently and without reliance upon any other Lender Party, made its
own analysis of the Borrowers and the transactions contemplated hereby and its
own independent decision to enter into this Agreement and the other Credit
Documents. Each Lender Party also acknowledges that it will, independently and
without reliance upon any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents.

                  (d) Indemnification. Each LC Participant agrees to indemnify
the LC Agent (to the extent not reimbursed by the Borrowers within ten (10) days
after demand) from and against such LC Participant's Percentage Share of any and
all Liabilities and Costs which to any extent (in whole or in part) may be
imposed on, incurred by or asserted against the LC Agent growing out of,
resulting from or in any other way associated with any of the Collateral, the
Credit Documents and the transactions and events (including the enforcement
thereof) at any time associated therewith or contemplated therein (whether
arising in contract or in tort or otherwise and including any violation or
noncompliance with any Environmental Laws by any Person or any Liabilities or
duties of any Person with respect to Hazardous Materials found in or released
into the environment). The foregoing indemnification shall apply whether or not
such Liabilities and Costs are in any way or to any extent owed, in whole or in
part, under any claim or theory of strict Liability or caused, in whole or in
part, by any negligent act or omission of any kind by the LC Agent; provided,
however, only that no LC Participant shall be obligated under this Section to
indemnify the LC Agent for that portion, if any, of any Liabilities and Costs
proximately caused by the LC Agent's own individual gross negligence or willful
misconduct, as determined in a final judgment. Cumulative of the foregoing, each
LC Participant agrees to reimburse the LC Agent promptly upon demand for such LC
Participant's Percentage Share of any costs and expenses to be paid to the LC
Agent by Borrower under Section 1 to the extent that the LC Agent is not timely
reimbursed for such expenses by Borrower as provided in such section. As used in
this Section the term "THE LC AGENT" shall refer not only to the Person
designated as such in Section 1 but also to each director, officer, agent,
attorney, employee, representative and Affiliate of such Person.

                  (e) Rights as LC Participant. In its capacity as an LC
Participant, the LC Agent shall have the same rights and obligations as any LC
Participant and may exercise such rights as though it were not the LC Agent. The
LC Agent may accept deposits from, lend money to, act as trustee under
indentures of and generally engage in any kind of business with any Debtor or
their Affiliates, all as if it were not the LC Agent hereunder and without any
duty to account therefor to any other LC Participant.

                  (f) Sharing of Set-Offs and Other Payments. Each Lender Party
agrees that if it shall, whether through the exercise of rights under any
Security Document or rights of banker's Lien, set off or counterclaim against
any of the Borrowers or otherwise, obtain payment of a

                                      -71-
<PAGE>

portion of the aggregate Obligations owed to it which, taking into account all
distributions made by the LC Agent under Section 2(i), causes such Lender Party
to have received more than it would have received had such payment been
distributed by the LC Agent pursuant to Section 2(i), then (i) it shall be
deemed to have simultaneously purchased and shall be obligated to purchase
interests in the Obligations as necessary to cause all Lender Parties to share
all payments and (ii) such other adjustments shall be made from time to time as
shall be equitable to ensure that the LC Agent and all Lender Parties share all
payments of Obligations as provided in Section 2(i); provided, however, that
nothing herein contained shall in any way affect the right of any Lender Party
to obtain payment (whether by exercise of rights of banker's Lien, set-off or
counterclaim or otherwise) of Indebtedness other than the Obligations. The
Borrowers expressly consent to the foregoing arrangements and agree that any
holder of any such interest or other participation in the Obligations, whether
or not acquired pursuant to the foregoing arrangements, may to the fullest
extent permitted by Law and, subject to the Intercreditor Agreement, exercise
any and all rights of banker's Lien, set-off or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
Section is thereafter recovered from the seller under this Section which
received the same, the purchase provided for in this Section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to the order of a Tribunal to be paid on
account of the possession of such funds prior to such recovery.

                  (g) Investments. Whenever the LC Agent in good faith
determines that it is uncertain about how to distribute to the Lender Parties,
any funds that it has received, or whenever the LC Agent in good faith
determines that there is any dispute among the Lender Parties about how such
funds should be distributed, the LC Agent may choose to defer distribution of
the funds that are the subject of such uncertainty or dispute. If the LC Agent
in good faith believes that the uncertainty or dispute will not be promptly
resolved, or if the LC Agent is otherwise required to invest funds pending
distribution to the Lender Parties, the LC Agent shall invest such funds pending
distribution, and all interest on any such Investment shall be distributed upon
the distribution of such Investment in the same proportion and to the same
Persons as such Investment. All moneys received by the LC Agent for distribution
to the Lender Parties (other than to the Person who is the LC Agent in its
separate capacity as Lender Party) shall be held by the LC Agent pending such
distribution solely as the LC Agent for such Lender Parties, and the LC Agent
shall have no equitable title to any portion thereof.

                  (h) Benefit of this Section. The provisions of this Section
are intended solely for the benefit of the Lender Parties and, in so far as such
provisions relate to them, the Prepetition Lenders, and no Debtor shall be
entitled to rely on any such provision or assert any such provision in a claim
or defense against any LC Participant (other than in relation to the reference
to the Intercreditor Agreement contained in Section 14(f)). The Lender Parties
may waive or amend such provisions as they desire without any notice to or
consent of Borrower or any other Debtor.

                  (i) Resignation. The LC Agent may resign at any time by giving
written notice thereof to the LC Participants and the Borrower Representative.
Each such notice shall set forth the date of such resignation. Upon any such
resignation, the Majority LC Participants shall have the right to appoint a
successor LC Agent. A successor must be appointed for any retiring

                                      -72-
<PAGE>

LC Agent, and such LC Agent's resignation shall become effective when such
successor accepts such appointment. If, within 30 days after the date of the
retiring LC Agent's resignation, no successor LC Agent has been appointed and
has accepted such appointment, then the retiring LC Agent may appoint a
successor LC Agent, which shall be a commercial bank organized or licensed to
conduct a banking or trust business under the Laws of the United States of
America or of any state thereof. Upon the acceptance of any appointment as the
LC Agent hereunder by a successor LC Agent, the retiring LC Agent shall be
discharged from its duties and obligations under this Agreement and the other
Credit Documents. After any retiring LC Agent's resignation hereunder, the
provisions of this Section shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was the LC Agent under the
Credit Documents.

                  (j) Other Lender Parties. None of the Lender Parties in such
capacities, other than the LC Agent in such capacity, shall have any duties or
responsibilities or incur any liabilities in their respective agency capacities
(as opposed to their respective capacities as LC Participants or LC Issuer, as
applicable) under or in connection with this Agreement or under any of the other
Credit Documents. The relationship between the Borrowers, on the one hand, and
the LC Agent and such other Lender Parties, on the other hand, shall be solely
that of borrower and lender. The LC Agent, the Lender Parties and the
Prepetition Lenders shall not have any fiduciary responsibilities to the
Borrowers or any of their Affiliates. The LC Agent, the Lender Parties and the
Prepetition Lenders do not undertake any responsibility to the Borrowers or any
of their Affiliates to review or inform any of the Borrowers of any matter in
connection with any phase of any the Borrowers' or their Affiliate's business or
operations.

15. ASSIGNMENTS AND PARTICIPATIONS.

                  (a)      None of the Debtors may, without the consent of the
                           LC Agent, assign or delegate any of its respective
                           rights or obligations under this Agreement or any
                           other Credit Document. Each LC Participant may,
                           without the consent of any other Lender Party or any
                           Debtor, assign any or all of its rights and
                           obligations under this Agreement to any Eligible
                           Assignee, provided, that such assignment include (i)
                           the agreement of the assignee to be bound by the
                           terms of the Restructuring Agreement and (ii) such
                           assignment shall include the assignment of the same
                           percentage of the Prepetition Bank Debt as the LC
                           Participant's Percentage Share of the DIP Maximum
                           Commitment.

                  (b)      Upon execution and delivery of any assignment
                           permitted hereunder, from and after the closing date
                           specified in the assignment, (i) the assignee
                           thereunder shall be a party hereto and, to the extent
                           that rights and obligations hereunder have been
                           assigned to it pursuant to such assignment, have the
                           rights and obligations as an LC Participant hereunder
                           and (ii) the assignor LC Participant shall, to the
                           extent that rights and obligations hereunder have
                           been assigned by it pursuant to such assignment,
                           relinquish its rights and be released from its
                           obligations under this Agreement (and, in the case of
                           an assignment covering all of such LC

                                      -73-
<PAGE>

                           Participant's rights and obligations under this
                           Agreement, such LC Participant shall cease to be a
                           party hereto).

                  (c)      By executing and delivering an assignment, the
                           assignor LC Participant and the assignee thereunder
                           confirm to and agree with each other and the other
                           parties hereto as follows: (i) other than as provided
                           in such assignment, such LC Participant makes no
                           representation or warranty and assumes no
                           responsibility with respect to any statements,
                           warranties or representations made in or in
                           connection with this Agreement or any other Credit
                           Document or the execution, legality, validity,
                           enforceability, genuineness, sufficiency or value of
                           this Agreement or any other Credit Document or any
                           other instrument or document furnished pursuant
                           hereto; (ii) such LC Participant makes no
                           representation or warranty and assumes no
                           responsibility with respect to the financial
                           condition of any Debtor or the performance or
                           observance by any Debtor of any of its obligations
                           under this Agreement or any other Credit Document or
                           any other instrument or document furnished pursuant
                           hereto; (iii) such assignee confirms that it has
                           received a copy of this Agreement, and such other
                           Credit Documents and other documents and information
                           as it has deemed appropriate to make its own credit
                           analysis and decision to enter into such assignment;
                           (iv) such assignee will, independently and without
                           reliance upon such LC Participant and based on such
                           documents and information as it shall deem
                           appropriate at the time, continue to make its own
                           credit decisions in taking or not taking action under
                           this Agreement; and (v) such assignee agrees that it
                           will perform in accordance with their terms all of
                           the obligations which by the terms of this Agreement
                           are required to be performed by it as an LC
                           Participant.

                  (d)      Upon its receipt of an assignment executed by an LC
                           Participant and an assignee, the LC Agent shall give
                           prompt notice thereof to the Borrower Representative.

                  (e)      The LC Agent shall maintain a copy of each assignment
                           delivered to it and a register for the recordation of
                           the names and addresses of each assignee and, with
                           respect to the LC Participants, the principal amount
                           owing to each LC Participant from time to time (the
                           "REGISTER"). The entries in the Register shall be
                           conclusive and binding for all purposes, absent
                           manifest error, and the Borrower Representative and
                           each LC Participant may treat each person,
                           corporation, partnership, limited liability company
                           or other entity whose name is recorded in the
                           Register as an LC Participant hereunder for the
                           purposes of this Agreement. The Register shall be
                           available for inspection by the Borrower
                           Representative or any LC Participant at any
                           reasonable time and from time to time upon reasonable
                           prior notice.

                  (f)      Any LC Participant may sell participations to one or
                           more Assignees in or to all or a portion of its
                           rights and obligations under this Agreement;

                                      -74-
<PAGE>

                           provided, however, that (i) such LC Participant's
                           obligations under this Agreement shall remain
                           unchanged, (ii) such LC Participant shall remain
                           solely responsible to the other parties hereto for
                           the performance of such obligations, (iii) the
                           Borrower Representative shall continue to deal solely
                           and directly with such LC Participant in connection
                           with such LC Participant's rights and obligations
                           under this Agreement and (iv) in any proceeding under
                           any bankruptcy, insolvency or similar proceeding in
                           respect of any Borrower or any other Debtor, such LC
                           Participant shall remain and be, to the fullest
                           extent permitted by law, the sole representative with
                           respect to the rights and obligations held in the
                           name of such LC Participant (whether such rights or
                           obligations are for such LC Participant's own account
                           or for the account of any participant).

                  (g)      Each LC Participant may, in connection with any
                           assignment or participation or proposed assignment or
                           participation pursuant to this Section, disclose to
                           the assignee or participant or proposed assignee or
                           participant any information relating to the Debtors
                           or their Affiliates furnished to such LC Participant
                           by or on behalf of the Debtors, provided, that such
                           assignees have agreed to be bound by the
                           confidentiality provisions in Section 17(p).

16. INDEMNIFICATION.

                  (a)      Subject to Section 16(b) and the prosecution of
                           Avoidance Actions, the Debtors, on a joint and
                           several basis, shall indemnify each Lender Party on
                           demand against any and all Liabilities, costs and
                           claims which to any extent (in whole or in part) may
                           be imposed on, incurred by or asserted against any
                           Lender Party growing out of, resulting from or in any
                           other way associated with:

                  (i)      any LC Issuer's compliance with a completed Letter of
                           Credit Request that the Borrower Representative
                           provides to any LC Issuer by facsimile, telecopier or
                           similar means of electronic transmission and that
                           such LC Issuer believes to be genuine;

                  (ii)     any LC Issuer's issuance of or performance under any
                           Letter of Credit;

                  (iii)    any cash management arrangements with respect to
                           agency accounts and lockbox accounts maintained by
                           any of the Borrowers with any Person; and

                  (iv)     any of the Collateral, the Credit Documents, the
                           Prepetition Credit Agreement, the Restructuring
                           Agreement, the Reorganization Plan, and the
                           transactions and events (including the enforcement or
                           defense thereof) at any time associated therewith or
                           contemplated therein, whether arising in contract or
                           in tort or otherwise and including any violation or
                           noncompliance with any Environmental Laws by any
                           Lender Party or any

                                      -75-
<PAGE>

                           other Person or any Liabilities or duties of any
                           Lender Party or any other Person with respect to
                           Hazardous Materials found in or Released into the
                           environment.

                  (b)      The foregoing indemnification shall apply whether or
                           not such Liabilities, costs and claims are in any way
                           or to any extent owed, in whole or in part, under any
                           claim or theory of strict liability or caused, in
                           whole or in part, by any negligent act or omission of
                           any kind by any Lender Party; provided, however, only
                           that Lender Party shall not be entitled under this
                           Section to receive indemnification for that portion,
                           if any, of any Liabilities, costs and claims
                           proximately caused by its own individual gross
                           negligence or willful misconduct, as determined in a
                           final judgment. If any Person (including any Debtor
                           or any of its Affiliates) ever alleges such gross
                           negligence or willful misconduct by Lender Party, the
                           indemnification provided for in this Section shall
                           nonetheless be paid upon demand, subject to later
                           adjustment or reimbursement, until such time as a
                           court of competent jurisdiction enters a final
                           judgment as to the extent and effect of the alleged
                           gross negligence or willful misconduct. As used in
                           this Section the term "Lender Party" shall refer not
                           only to Lender Party but also to each director,
                           officer, agent, attorney, employee, representative
                           and affiliate of such Lender Party.

                  (c)      The Debtors further agree to indemnify on a joint and
                           several basis each of the LC Agent's Special Counsel
                           and KPMG and their respective personnel from, and to
                           hold each of the LC Agent's Special Counsel and KPMG
                           and their respective personnel harmless against, any
                           and all claims, liabilities, costs and expenses
                           relating to the services rendered by KPMG as special
                           financial advisor to the LC Agent's Special Counsel
                           in connection with the LC Agent's Special Counsel's
                           representation of the LC Agent on matters relating to
                           this Agreement and the Credit Documents and the
                           Cases, except to the extent finally determined to
                           have resulted from the willful misconduct, gross
                           negligence or fraudulent behavior as determined in a
                           final non-appealable judgment of the LC Agent's
                           Special Counsel or (as the case may be ) KPMG
                           relating to such services. Each of the LC Agent's
                           Special Counsel and KPMG may rely upon the provisions
                           contained in this Section 16(c) although such Person
                           is not a party to this Agreement.

17. MISCELLANEOUS.

                  (a)      All Exhibits and Schedules attached to or referred to
                           in this Agreement are a part hereof for all purposes.
                           Reference is hereby made to the Security Schedule for
                           the meaning of certain terms defined therein and used
                           but not defined herein, which definitions are
                           incorporated herein by reference.

                  (b)      Unless the context otherwise requires or unless
                           otherwise provided herein the terms defined in this
                           Agreement that refer to a particular agreement,

                                      -76-
<PAGE>

                           instrument or document also refer to and include all
                           renewals, extensions, modifications, amendments and
                           restatements of such agreement, instrument or
                           document; provided, however, that nothing contained
                           in this Section shall be construed to authorize any
                           such renewal, extension, modification, amendment or
                           restatement.

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

                  (d)      All calculations under the Credit Documents of
                           interest and fees shall be made on the basis of
                           actual days elapsed (including the first day but
                           excluding the last) and a year of 360 days. Each
                           determination by Lender Party of amounts to be paid
                           under Section 3 or any other matters that are to be
                           determined hereunder by Lender Party shall, in the
                           absence of manifest error, be conclusive and binding.
                           Unless otherwise expressly provided herein or unless
                           the Majority LC Participants otherwise consent, all
                           financial statements and reports furnished to any
                           Lender Party hereunder shall be prepared and all
                           financial computations and determinations pursuant
                           hereto shall be made in accordance with GAAP as in
                           effect at the Closing Date.

                  (e)      Notwithstanding that the Collateral Agent, whether on
                           its own behalf and/or on behalf of others, may
                           continue to hold the Collateral, and regardless of
                           the value thereof, each Debtor shall be and remain
                           liable for the payment in full, including principal
                           and interest, of any balance of the Obligations and
                           expenses hereunder at any time unpaid.

                  (f)      Each Debtor hereby expressly waives demand,
                           presentment, protest, notice of protest and notice of
                           dishonor with respect to any and all instruments and
                           commercial paper included in or evidencing any of the
                           Obligations or the Collateral, and any and all other
                           demands and notices of any kind or nature whatsoever
                           with respect to the Obligations, the

                                      -77-
<PAGE>

                           Collateral, this Agreement and the other Credit
                           Documents, except such as are expressly provided for
                           herein or therein.

                  (g)      Under no circumstances shall any Lender Party be
                           deemed to have assumed any responsibility for or
                           obligation or duty of any nature or kind with respect
                           to any Collateral, or any matter or proceedings
                           arising out of or relating thereto, but the same
                           shall be at the sole risk of Debtors at all times.
                           The Debtors hereby release each Lender Party from any
                           claims, causes of action and demands at any time
                           arising out of, relating to or with respect to this
                           Agreement, the other Credit Documents, the
                           Obligations, the Collateral and/or any actions taken
                           or omitted to be taken by any Lender Party with
                           respect thereto, and the Debtors hereby agree jointly
                           and severally to indemnify and hold each LC
                           Participant harmless from and with respect to any and
                           all such claims, Liabilities, causes of action and
                           demands by any Person.

                  (h)      Subject to Section 14(f), upon the occurrence and
                           during the continuance of any Event of Default
                           hereunder, each LC Participant is hereby authorized
                           at any time and from time to time, to the fullest
                           extent permitted by law, to set off and apply any and
                           all deposits (general or special, time or demand,
                           provisional or final) at any time held and other
                           Indebtedness at any time owing by such LC Participant
                           to or for the credit or the account of any Debtor
                           against any and all of the Obligations which are then
                           liquidated and matured. Such LC Participant agrees
                           promptly to notify the LC Agent and the Borrower
                           Representative after any such set-off and application
                           is made by such LC Participant; provided, however,
                           that the failure to give such notice shall not affect
                           the validity of such set-off and application. The
                           rights of the LC Participants under this Section are
                           in addition to other rights and remedies (including,
                           without limitation, other rights of set-off) which
                           the LC Participants may have.

                  (i)      No LC Participant shall be liable to any Debtor for
                           (i) the performance of any transaction between any
                           Debtor or one or more of its Affiliates and a
                           Beneficiary that underlies a Letter of Credit, (ii)
                           any act or omission of any Person unless due to the
                           gross negligence or willful misconduct of such LC
                           Participant, such LC Participant's own branches or
                           such LC Participant's agents, (iii) loss or
                           destruction of any draft, demand, or document in
                           transit or in the possession of others unless due to
                           the gross negligence or willful misconduct of such LC
                           Participant, such LC Participant's own branches or
                           such LC Participant's agents, (iv) lack of knowledge
                           of any particular trade usage (other than standard
                           banking usage as used in the normal course of
                           business) unless such lack of knowledge is due to the
                           gross negligence or willful misconduct of such LC
                           Participant, such LC Participant's own branches or
                           such LC Participant's agents, or (v) the genuineness,
                           falsification, or effect of any document which
                           appears on due examination to be regular on its face.

                                      -78-
<PAGE>

                  (j)      The Debtors agree that no LC Participant, its
                           Affiliates or its correspondents shall be responsible
                           for: (i) the failure of any Letter of Credit Request
                           to bear any reference to any Letter of Credit, or
                           inadequate reference in any Letter of Credit Request
                           to the relevant Letter of Credit, or failure of
                           documents (other than documents expressly required to
                           be presented under the relevant Letter of Credit) to
                           accompany any Letter of Credit Request at
                           negotiation, or failure of any Person to note the
                           amount of any Letter of Credit Request on the reverse
                           of the relevant Letter of Credit, or to surrender or
                           to take up any Letter of Credit or to forward
                           documents apart from Letter of Credit Requests as
                           required by the terms of the relevant Letter of
                           Credit, each of which provisions, if contained in any
                           Letter of Credit itself, may be waived by LC Issuer;
                           (ii) errors, omissions, interruptions or delays in
                           transmissions, or delivery of any messages, by mail,
                           facsimile, telex, cable, telegraph, wireless or other
                           teletransmission or by oral instructions, whether or
                           not they may be in cipher; (iii) the existence,
                           character, quality, quantity, condition, packing,
                           value or delivery of any property purporting to be
                           represented by documents; (iv) any difference in
                           character, quality, quantity, condition, packing,
                           value or delivery of such property from that
                           expressed in documents; (v) any breach of contract
                           between any Debtor and any Beneficiary or any other
                           Person or any dispute as to the use which may be made
                           of any Letter of Credit or funds obtained thereunder
                           by any Beneficiary or other party; (vi) the validity,
                           sufficiency, or genuineness of any Letter of Credit
                           Request or other document; and (vii) the time, place,
                           manner or order in which shipment is made.

                  (k)      No LC Participant shall be responsible for any act,
                           error, neglect or default, omission, insolvency or
                           failure in business of its correspondents.

                  (l)      The occurrence of any one or more of the
                           contingencies or events referred to in the U.C.P. or
                           in the preceding clauses of Sections 17(j) and (k)
                           shall not affect, impair, or prevent the vesting of
                           any LC Participant's rights or powers hereunder or
                           the enforceability of any Obligations.

                  (m)      This Agreement, the Credit Documents and all the
                           transactions contemplated thereby shall be governed
                           by and construed in accordance with the laws of the
                           State of New York, without regard to choice of law
                           principles.

                  (n)      Each Debtor hereby irrevocably and unconditionally
                           submits, for itself and its property, to the
                           nonexclusive jurisdiction of the Bankruptcy Court
                           and/or the courts of New York State or federal court
                           of the United States of America sitting in New York
                           City, whether trial or appellate, in any action or
                           proceeding arising out of, or relating to, this
                           Agreement, or for recognition or enforcement of any
                           judgment in respect thereof, and each Debtor hereby
                           irrevocably and unconditionally agrees that all
                           claims in respect of any such action or proceeding
                           may be heard and determined in

                                      -79-
<PAGE>

                           the Bankruptcy Court and/or any such New York State
                           court or, to the extent permitted by law, in such
                           federal court and consents that any such action or
                           proceeding may be brought in such courts and waives
                           to the fullest extent permitted by law any objection
                           or claim that it may now or hereafter have to the
                           venue of any such action or proceeding in any such
                           court or that such action or proceeding was brought
                           in an inconvenient court and agrees not to plead or
                           claim the same. Each Debtor hereby agrees that a
                           final judgment in any such action or proceeding shall
                           be conclusive and may be enforced in other
                           jurisdictions by suit on the judgment or in any other
                           manner provided by law. Nothing in this Agreement
                           shall affect any right that any party may otherwise
                           have to bring any action or proceeding relating to
                           this Agreement in the courts of any jurisdiction.
                           EACH DEBTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
                           TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
                           COUNTERCLAIM ARISING OUT OF, OR RELATING TO, THIS
                           AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE ACTIONS
                           OF ANY LENDER PARTY IN THE NEGOTIATION,
                           ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

                  (o)      The U.C.P. shall be binding upon Borrower and each LC
                           Issuer with respect to each Letter of Credit issued
                           by LC Issuer except to the extent otherwise expressly
                           agreed, if any.

                  (p)      The LC Agent and each LC Issuer may rely on the
                           written notices, requests, waivers and consents of
                           the Borrower Representative, its officers and
                           designated agents, including, without limitation, any
                           Letter of Credit Requests, as the binding actions of
                           Borrower hereunder. Any such notices, requests,
                           waivers or consents received by the LC Agent and each
                           LC Issuer from the Borrower Representative on behalf
                           of Borrower hereunder shall be deemed to have been
                           sent by Borrower, and all notices and other
                           information furnished by the LC Agent or any LC
                           Issuer to the Borrower Representative hereunder will
                           be received by the Borrower Representative on behalf
                           of Borrower. In addition, the LC Agent and each LC
                           Issuer may receive from the Borrower Representative,
                           on behalf of Borrower, all amounts required to be
                           paid by Borrower and may pay to the Borrower
                           Representative for Borrower's account, all amounts
                           required to be paid by or on behalf of any LC
                           Participant to Borrower; provided, however, that
                           neither the LC Agent nor any LC Issuer shall have any
                           responsibility to inquire as to the application of
                           such amounts by the Borrower Representative and is
                           hereby released from any liability to Borrower or any
                           other Debtor arising from such application by the
                           Borrower Representative.

                  (q)      Each Lender Party agrees (on behalf of itself and
                           each of its Affiliates, and each of its and their
                           directors, officers, agents, attorneys, employees and
                           representatives) that it (and each of them) will take
                           all reasonable steps to

                                      -80-
<PAGE>

                           keep confidential any non-public information supplied
                           to it by or at the direction of any Debtor; provided,
                           however, that this restriction shall not apply to
                           information which (i) has at the time in question
                           entered the public domain, (ii) is required to be
                           disclosed by Law (whether valid or invalid) of any
                           Tribunal, (iii) is disclosed to any of its
                           Affiliates, auditors, attorneys or agents, (iv) is
                           furnished to any other Lender Party or to any
                           assignee or prospective assignee of, or purchaser or
                           prospective purchaser of participations or other
                           interests in, any interest under the Credit Documents
                           (provided each such assignee or prospective assignee
                           or purchaser or prospective purchaser first agrees to
                           hold such information in confidence on the terms
                           provided in this Section), or (v) is disclosed in the
                           course of enforcing its rights and remedies following
                           the occurrence of an Event of Default.

                  (r)      Each of the Debtors acknowledges and agrees that,
                           upon the expiration of 30 days after the Filing Date,
                           (i) it has no claim or cause of action (including
                           without limitation, Avoidance Actions) against the
                           Prepetition Agent or the Prepetition Lenders (or any
                           of the Prepetition Agent's or the Prepetition
                           Lenders' directors, officers, employees or agents),
                           (ii) it has no offset right, counterclaim or defense
                           of any kind against any of its obligations,
                           indebtedness or liabilities to the Prepetition Agent
                           or the Prepetition Lenders, (iii) the Prepetition
                           Agent and the Prepetition Lenders have valid first
                           priority perfected liens on the "Collateral" under
                           and as defined in the Prepetition Credit Agreement
                           and that there have been no past conditions, acts,
                           omissions, events, circumstances or matters which
                           have impaired or adversely affected any of the
                           Prepetition Agent's or Prepetition Lenders' rights
                           interest and title with respect to such "Collateral"
                           under and as defined in the Prepetition Credit
                           Agreement, and (iv) the Prepetition Agent and the
                           Prepetition Lenders have properly performed and
                           satisfied in a timely manner all of their obligations
                           to the Debtors.

                  (s)      Waivers and Amendments; Acknowledgments.

                  (i)      No failure or delay (whether by course of conduct or
                           otherwise) by any LC Participant in exercising any
                           right, power or remedy which such Lender Party may
                           have under any of the Credit Documents shall operate
                           as a waiver thereof or of any other right, power or
                           remedy, nor shall any single or partial exercise by
                           any Lender Party of any such right, power or remedy
                           preclude any other or further exercise thereof or of
                           any other right, power or remedy. No waiver of any
                           provision of any Credit Document and no consent to
                           any departure therefrom shall ever be effective
                           unless it is in writing and signed as provided below
                           in this Section, and then such waiver or consent
                           shall be effective only in the specific instances and
                           for the purposes for which given and to the extent
                           specified in such writing. No notice to or demand on
                           any Debtor shall in any case of itself entitle any
                           Debtor to any other or further notice or demand in
                           similar or other

                                      -81-
<PAGE>

                           circumstances. This Agreement and the other Credit
                           Documents set forth the entire understanding among
                           the parties hereto with respect to the transactions
                           contemplated herein and therein and supersede all
                           prior discussions and understandings with respect to
                           the subject matter hereof and thereof, and no waiver,
                           consent, release, modification or amendment of or
                           supplement to this Agreement or the other Credit
                           Documents shall be valid or effective against any
                           party hereto unless the same is in writing and signed
                           by (A) if such party is a Debtor, by such party, (B)
                           if such party is the LC Agent or an LC Issuer, by
                           such party and (C) if such party is an LC
                           Participant, by such LC Participant or by the LC
                           Agent with the consent of the Majority LC
                           Participants. Notwithstanding the foregoing or
                           anything to the contrary herein, the LC Agent shall
                           not, without the prior consent of each individual
                           Lender Party, execute and deliver on behalf of such
                           Lender Party any waiver or amendment that would: (A)
                           increase the Percentage Share of any LC Participant
                           or the maximum amount any such LC Participant is
                           committed to fund in respect of DIP LC Obligations or
                           subject such LC Participant to any additional
                           obligations, (B) reduce any fees payable to such LC
                           Participant hereunder, (C) change any date fixed for
                           any payment of any such fees, (D) amend the
                           definition herein of "Borrowing Base" or any of the
                           terms used in that definition, (E) amend the
                           definition herein of "Majority LC Participants" or
                           otherwise change the aggregate amount of Percentage
                           Shares required for the LC Agent, the LC Participants
                           or any of them to take any particular action under
                           the Credit Documents, (F) release Borrower from its
                           requirement to pay the Obligations or any Guarantor
                           from its guaranty of such payment, or (G) except as
                           otherwise expressly provided for in Section 10(c),
                           release any Collateral. In addition, the LC Agent
                           shall not without the "Majority LC Participants"
                           under and as defined in the Prepetition Credit
                           Agreement modify any express representation,
                           warranty, covenant or condition precedent in favor of
                           the Prepetition Lenders under this Agreement.

                  (ii)     Each Borrower hereby represents, warrants,
                           acknowledges and admits that (A) it has been advised
                           by counsel in the negotiation, execution and delivery
                           of the Credit Documents to which it is a party, (B)
                           it has made an independent decision to enter into
                           this Agreement and the other Credit Documents to
                           which it is a party, without reliance on any
                           representation, warranty, covenant or undertaking by
                           the LC Agent, any Lender Party, the Prepetition Agent
                           or any Prepetition Lender (C) there are no
                           representations, warranties, covenants, undertakings
                           or agreements by any Lender Party as to the Credit
                           Documents, (D) no Lender Party has any fiduciary
                           obligation toward any Debtor with respect to any
                           Credit Document or the transactions contemplated
                           thereby, (E) the relationship pursuant to the Credit
                           Documents between Borrower and the other Debtors, on
                           one hand, and each Lender Party, on the other hand,
                           is and shall be solely that of debtor and creditor,
                           respectively, (F) no partnership or joint venture
                           exists with respect to the Credit Documents between
                           any Debtor and any Lender Party, (G) the LC Agent is
                           not Borrowers' agent,

                                      -82-
<PAGE>

                           but the LC Agent for LC Participants, (H) should an
                           Event of Default or Default occur or exist, each
                           Lender Party will determine in its sole discretion
                           and for its own reasons what remedies and actions it
                           will or will not exercise or take at that time, (I)
                           without limiting any of the foregoing, Borrower is
                           not relying upon any representation or covenant by
                           any Lender Party, or any representative thereof, and
                           no such representation or covenant has been made,
                           that any Lender Party will, at the time of an Event
                           of Default or Default, or at any other time, waive,
                           negotiate, discuss or take or refrain from taking any
                           action permitted under the Credit Documents with
                           respect to any such Event of Default or Default or
                           any other provision of the Credit Documents and (J)
                           all Lender Parties have relied upon the truthfulness
                           of the acknowledgments in this Section in deciding to
                           execute and deliver this Agreement and to become
                           obligated hereunder.

                  (t)      The Lender Parties, the Debtors and any other parties
                           to the Credit Documents intend to contract in strict
                           compliance with applicable usury Law from time to
                           time in effect. In furtherance thereof such Persons
                           stipulate and agree that none of the terms and
                           provisions contained in the Credit Documents shall
                           ever be construed to create a contract to pay, for
                           the use, forbearance or detention of money, interest
                           in excess of the maximum amount of interest permitted
                           to be contracted for, charged or received by
                           applicable Law from time to time in effect. Neither
                           any Debtor nor any present or future guarantors,
                           endorsers or other Persons hereafter becoming liable
                           for payment of any Obligation shall ever be liable
                           for unearned interest thereon or shall ever be
                           required to pay interest thereon in excess of the
                           maximum amount that may be lawfully contracted for,
                           charged or received under applicable Law from time to
                           time in effect, and the provisions of this Section
                           shall control over all other provisions of the Credit
                           Documents that may be in conflict or apparent
                           conflict herewith. The Lender Parties expressly
                           disavow any intention to contract for, charge or
                           receive excessive unearned interest or finance
                           charges in the event the maturity of any Obligation
                           is accelerated. If (i) the maturity of any Obligation
                           is accelerated for any reason, (ii) any Obligation is
                           prepaid and as a result any amounts held to
                           constitute interest are determined to be in excess of
                           the legal maximum or (iii) any LC Participant or any
                           other holder of any or all of the Obligations shall
                           otherwise collect moneys that are determined to
                           constitute interest which would otherwise increase
                           the interest on any or all of the Obligations to an
                           amount in excess of that permitted to be contracted
                           for, charged or received by applicable Law then in
                           effect, then all sums determined to constitute
                           interest in excess of such legal limit shall, without
                           penalty, be promptly applied to reduce the then
                           outstanding principal of the related Obligations or,
                           at such LC Participant's or holder's option, promptly
                           returned to Borrower or other payor thereof upon such
                           determination. In determining whether or not the
                           interest paid or payable, under any specific
                           circumstance, exceeds the maximum amount permitted
                           under applicable Law, the Lender Parties and

                                      -83-
<PAGE>

                           the Debtors (and any other payors thereof) shall to
                           the greatest extent permitted under applicable Law,
                           (i) characterize any non-principal payment as an
                           expense, fee or premium rather than as interest, (ii)
                           exclude voluntary prepayments and the effects thereof
                           and (iii) amortize, prorate, allocate and spread the
                           total amount of interest throughout the entire
                           contemplated term of the instruments evidencing the
                           Obligations in accordance with the amounts
                           outstanding from time to time thereunder and the
                           maximum legal rate of interest from time to time in
                           effect under applicable Law in order to lawfully
                           charge the maximum amount of interest permitted under
                           applicable Law. In the event applicable Law provides
                           for an interest ceiling under Chapter 303 of the
                           Texas Finance Code (the "TEXAS FINANCE CODE") as
                           amended, to the extent that the Texas Finance Code is
                           mandatorily applicable to any LC Participant, for
                           that day, the ceiling shall be the "weekly ceiling"
                           as defined in the Texas Finance Code; provided,
                           however, that if any applicable Law permits greater
                           interest, the Law permitting the greatest interest
                           shall apply. In no event shall Chapter 346 of the
                           Texas Finance Code apply to this Agreement, any other
                           Credit Document or any transactions or loan
                           arrangement provided or contemplated hereby or
                           thereby.

                  (u)      The Debtors and the Lender Parties mutually hereby
                           knowingly, voluntarily and intentionally waive the
                           right to a trial by jury in respect of any claim
                           based hereon, arising out of, under or in connection
                           with this Agreement or any other Credit Documents
                           contemplated to be executed in connection herewith or
                           any course of conduct, course of dealings, statements
                           (whether oral or written) or actions of any party.
                           This waiver constitutes a material inducement for the
                           Lender Parties to enter into this Agreement and the
                           other Credit Documents and to make Extensions of
                           Credit. Each Debtor and each Lender Party hereby
                           further (i) irrevocably waives, to the maximum extent
                           not prohibited by law, any right it may have to claim
                           or recover in any such litigation any Special
                           Damages, as defined below, (ii) certifies that no
                           party hereto nor any representative or agent or
                           counsel for any party hereto has represented,
                           expressly or otherwise, or implied that such party
                           would not, in the event of litigation, seek to
                           enforce the foregoing waivers and (iii) acknowledges
                           that it has been induced to enter into this
                           Agreement, the other Credit Documents and the
                           transactions contemplated hereby and thereby by,
                           among other things, the mutual waivers and
                           certifications contained in this Section. "SPECIAL
                           DAMAGES" includes all special, consequential,
                           exemplary or punitive damages (regardless of how
                           named), but does not include any payments of funds
                           that any party hereto has expressly promised to pay
                           or deliver to any other party hereto.

                  (v)      All of the Debtors' various representations,
                           warranties, covenants and agreements in the Credit
                           Documents shall survive the execution and delivery of
                           this Agreement and the other Credit Documents and the
                           performance hereof and thereof, including the
                           delivery of the Credit

                                      -84-
<PAGE>

                           Documents and shall further survive until all of the
                           Obligations are paid in full in cash to each Lender
                           Party and all of the Lender Parties' obligations to
                           Borrower are terminated. All statements and
                           agreements contained in any certificate or other
                           instrument delivered by any Debtor to any Lender
                           Party under any Credit Document shall be deemed
                           representations and warranties by Borrower or
                           agreements and covenants of Borrower under this
                           Agreement. The representations, warranties,
                           indemnities and covenants made by the Debtors in the
                           Credit Documents, and the rights, powers and
                           privileges granted to the Lender Parties in the
                           Credit Documents, are cumulative and, except for
                           expressly specified waivers and consents, no Credit
                           Document shall be construed in the context of another
                           to diminish, nullify or otherwise reduce the benefit
                           to any Lender Party of any such representation,
                           warranty, indemnity, covenant, right, power or
                           privilege. In particular and without limitation, no
                           exception set out in this Agreement to any
                           representation, warranty, indemnity or covenant
                           herein contained shall apply to any similar
                           representation, warranty, indemnity or covenant
                           contained in any other Credit Document, and each such
                           similar representation, warranty, indemnity or
                           covenant shall be subject only to those exceptions
                           that are expressly made applicable to it by the terms
                           of the various Credit Documents.

                  (w)      Intercreditor Agreement. Each of the LC Issuer, LC
                           Participants, the LC Agent and the Collateral Agent
                           acknowledges and agrees that the rights and
                           obligations of such parties under this Agreement are
                           subject in all respects to the Intercreditor
                           Agreement.

                  [Remainder of page intentionally left blank.]

                                      -85-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Debtor In
Possession Letter of Credit and Security Agreement as of the day and year first
above written.

                            EOTT ENERGY OPERATING LIMITED PARTNERSHIP,
                            as a Borrower and as the Borrower Representative

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

                                By:    /s/  Susan Ralph
                                   --------------------------------------
                                       Name:  Susan Ralph
                                       Title: Treasurer

                            EOTT ENERGY CANADA LIMITED PARTNERSHIP,
                            as a Borrower

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

                                By:    /s/  Susan Ralph
                                   --------------------------------------
                                       Name:  Susan Ralph
                                       Title: Treasurer

                            EOTT ENERGY LIQUIDS, L.P.,
                            as a Borrower

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

                                By:    /s/  Susan Ralph
                                   --------------------------------------
                                       Name:  Susan Ralph
                                       Title: Treasurer

                                      -86-
<PAGE>

                            EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,
                            as a Borrower

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

                                   By:    /s/  Susan Ralph
                                      --------------------------------------
                                          Name:  Susan Ralph
                                          Title: Treasurer

                            EOTT ENERGY PARTNERS, L.P.,
                            as a Guarantor

                            By:    EOTT ENERGY CORP., its General Partner

                                   By:    /s/  Susan Ralph
                                      --------------------------------------
                                          Name:  Susan Ralph
                                          Title: Treasurer

                            EOTT ENERGY GENERAL PARTNER, L.L.C.,
                            as a Guarantor

                                   By:    /s/  Susan Ralph
                                      --------------------------------------
                                          Name:  Susan Ralph
                                          Title: Treasurer

                            Address for each Debtor:
                            Attention:        Vice President & General Counsel
                            By courier:       2000 W. Sam Houston Parkway,
                                              Suite 400
                                              Houston, Texas 77042
                            By mail:          P.O. Box 4666
                                              Houston, Texas 77210-4666
                            Phone:                     713-993-5027
                            Fax:                       713-993-5813

                                      -87-
<PAGE>

                            STANDARD CHARTERED BANK,
                            as LC Agent, LC Issuer, an LC Participant and as
                            Collateral Agent

                                   By:
                                       --------------------------------
                                       Name:  Allan J. Lee
                                       Title: Senior Vice President

                                   By:
                                       --------------------------------
                                       Name:  Neil McCauley
                                       Title: Senior Vice President

                            Address:
                                       Special Assets Management
                                       One Madison Avenue
                                       New York, NY 10010-3603

                                      -88-
<PAGE>
                                                                     SCHEDULE I

                              DISCLOSURE SCHEDULE
<PAGE>

                                                                     SCHEDULE II

                            LC PARTICIPANT SCHEDULE

<PAGE>
                                                                   SCHEDULE III

                               SECURITY SCHEDULE

<PAGE>
                                                                    SCHEDULE IV

                              DESIGNATED CUSTOMERS

<PAGE>

                                    EXHIBIT A

                            LETTER OF CREDIT REQUEST

                    EOTT ENERGY OPERATING LIMITED PARTNERSHIP
                                  P.O. BOX 4666
                            HOUSTON, TEXAS 77210-4666

Date:                      [                  ]
                            -----------------

To:                        [                  ]
                            -----------------
                           Standard Chartered Bank

Fax No.:                   212-667-0120
                           212-667-0780

From:                      [                  ]
                            -----------------
                           Phone:   713/993-5280
                           Fax:     713/993-5841

Subject:                   Letter of Credit Request

Please [issue] [amend] the following irrevocable standby Letter of Credit:

Applicant:

Beneficiary:               [                  ]
                            -----------------
Address:                   [                  ]
                            -----------------
Phone:                     [                  ]
                            -----------------
Fax:                       [                  ]
                            -----------------

Dollar Value:             $[                  ] USD Maximum
                            -----------------

Expiration Date:           [                  ]
                            -----------------

Conditions for Drawing(s): [Insert Conditions for Drawing(s)]

Special Conditions:        [Insert Special Conditions]

Special Instructions:      [Insert Special Instructions]

         To induce the LC Participants to issue, amend or extend the Letter of
Credit, the Borrowers hereby represent, warrant, acknowledge and agree to and
with the LC Issuer, the LC Agent and each LC Participant that:

<PAGE>

1.       The manager or officer of EOTT General Partner, L.L.C. ("EOTT GP")
         signing this instrument is the duly elected, qualified and acting
         manager or officer of EOTT GP as indicated below such manager's or
         officer's signature hereto, having all necessary authority to act for
         EOTT GP in its capacity as the sole General Partner of the Borrower
         Representative in making the request on behalf of the Borrowers herein
         contained.

2.       The representations and warranties of the Guarantors and the Borrowers
         set forth in the Debtor in Possession Letter of Credit Agreement, dated
         as of October 18, 2002 (as from time to time amended, the "AGREEMENT"),
         among EOTT Energy Operating Limited Partnership ("EOTT OLP"), EOTT
         Energy Canada Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids,
         L.P. ("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership ("EOTT
         PIPELINE" and together with EOTT OLP, EOTT Canada and EOTT Liquids, on
         a joint and several basis, the "BORROWERS"), EOTT Energy Partners,
         L.P., EOTT GP, Standard Chartered Bank, as LC Agent and the other
         signatories thereto, and the other Credit Documents are true and
         correct on and as of the date hereof (except to the extent that the
         facts on which such representations and warranties are based have been
         changed by Extensions of Credit under the Agreement or to the extent
         that such representation or warranty was made as of a specific date or
         updated, modified or supplemented as of a subsequent date with the
         consent of Majority LC Participants), with the same effect as though
         such representations and warranties had been made on and as of the date
         hereof.

3.       There does not exist on the date hereof any condition or event that
         constitutes a Default; no such Default will exist upon the Borrowers'
         receipt and application of the Extension of Credit requested hereby;
         and no Material Adverse Change has occurred or will occur upon the
         Borrowers' receipt and application of the Extension of Credit requested
         hereunder. The Borrowers will use the Letter of Credit hereby requested
         in compliance with Section 2(a)(ii)(4) of the Agreement.

4.       Each Debtor has performed and complied with all agreements and
         conditions in the Agreement and the other Credit Documents required to
         be performed or complied with by such Debtor on or prior to the date
         hereof, and each of the conditions precedent to Extensions of Credit
         contained in the Agreement remains satisfied.

5.       After taking the issuance, amendment or extension such Letter of Credit
         into account, the DIP Facility Usage does exceed the lesser of (A) the
         DIP Maximum Commitment and (B) the Borrowing Base in each case on the
         date requested for the Extension of Credit.

6.       The Credit Documents have not been modified, amended or supplemented by
         any unwritten representations or promises, by any course of dealing or
         by any other means not provided for in the Agreement. The Agreement and
         the other Credit Documents are hereby ratified, approved and confirmed
         in all respects.

         Capitalized terms used and not defined herein have the meanings given
to them in the Agreement.

<PAGE>

         The manager or officer of EOTT GP signing this instrument hereby
certifies that, to the best of his or her knowledge after due inquiry, the above
representations, warranties, acknowledgments and agreements of the Borrowers are
true, correct and complete in all material respects.

                             EOTT ENERGY OPERATING LIMITED PARTNERSHIP

                             By:      EOTT ENERGY GENERAL PARTNER, L.L.C.

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

<PAGE>

                                    EXHIBIT B

                            CERTIFICATE ACCOMPANYING
                              FINANCIAL STATEMENTS

         Reference is made to the Debtor in Possession Letter of Credit
Agreement dated as of October 18, 2002 (as from time to time amended, the
"AGREEMENT"), among EOTT Energy Operating Limited Partnership ("EOTT OLP"), EOTT
Energy Canada Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids, L.P.
("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership ("EOTT PIPELINE" and
together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint and several
basis, the "BORROWERS"), EOTT Energy Partners, L.P. ("EOTT MLP"), EOTT Energy
General Partner, L.L.C. ("EOTT GP") and Standard Chartered Bank, as LC Agent and
the other signatories thereto. Capitalized terms used and not defined herein
have the meanings given to them in the Agreement.

         This Certificate is furnished pursuant to Section 9(d) of the
Agreement. Together herewith EOTT MLP is furnishing to the LC Agent and each LC
Participant, EOTT MLP's [AUDITED/UNAUDITED] consolidated financial statements
(the "FINANCIAL STATEMENTS") and supporting consolidating financial statements,
if required, as at _____________, 200__ (the "REPORTING DATE"). EOTT MLP and the
Borrowers hereby jointly and severally represent, warrant and acknowledge to the
LC Agent and each LC Participant that:

                  (a) the officer of EOTT Corp. signing this instrument is a
         duly elected, acting and qualified officer of EOTT Corp. as indicated
         below such officer's signature hereto having all necessary authority to
         act for EOTT Corp. in its capacity as the sole General Partner of EOTT
         MLP in making the representations, warranties and acknowledgements set
         forth herein;

                  (b) the manager or officer of EOTT GP signing this instrument
         is the duly elected, acting and qualified manager of EOTT GP as
         indicated below such manager's or officer's signature hereto having all
         necessary authority to act for EOTT GP in its capacity as the sole
         General Partner of each Borrower in making the representations,
         warranties and acknowledgements set forth herein;

                  (c) the Financial Statements are accurate and complete in all
         material respects (subject, in the case of such unaudited financial
         statements, to normal and recurring adjustments made in conformity with
         GAAP) and satisfy the requirements of the Agreement;

                  (d) on the Reporting Date each of EOTT MLP and the Borrowers
         was, and on the date hereof is, in full compliance with the disclosure
         requirements of Section 9(f) of the Agreement, and no Default otherwise
         existed on the Reporting Date or otherwise exists on the date of this
         instrument;

                  (e) The representations and warranties of EOTT MLP and the
         Borrowers set forth in the Agreement and the other Credit Documents are
         true and correct on and as of the date hereof (except to the extent
         that the facts on which such representations and

<PAGE>

         warranties are based have been changed by Extensions of Credit under
         the Agreement or to the extent that such representation or warranty was
         made as of a specific date or updated, modified or supplemented as of a
         subsequent date with the consent of Majority LC Participants), with the
         same effect as though such representations and warranties had been made
         on and as of the date hereof.

         The officer of EOTT Corp. signing this instrument hereby certifies that
he/she has reviewed the Credit Documents, the Financial Statements and the
supporting consolidating financial statements and has otherwise undertaken such
inquiry as is in his/her opinion necessary to enable him/her to express an
informed opinion with respect to the above representations, warranties and
acknowledgments of EOTT MLP and, to the best of his/her knowledge, such
representations, warranties and acknowledgments are true, correct and complete
in all material respects.

         The officer of EOTT GP signing this instrument hereby certifies that
he/she has reviewed the Credit Documents, the Financial Statements and the
supporting consolidating financial statements and has otherwise undertaken such
inquiry as is in his/her opinion necessary to enable him/her to express an
informed opinion with respect to the above representations, warranties and
acknowledgments of the Borrowers and, to the best of his/her knowledge, such
representations, warranties and acknowledgments are true, correct and complete
in all material respects.

         IN WITNESS WHEREOF, this instrument is executed as of
__________,200___.

                            EOTT ENERGY PARTNERS, L.P.

                            By:      EOTT ENERGY CORP., its General Partner

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

                            EOTT ENERGY OPERATING LIMITED PARTNERSHIP

                            By:      EOTT ENERGY GENERAL PARTNER, L.L.C.

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

<PAGE>

                            EOTT ENERGY CANADA LIMITED PARTNERSHIP

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

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

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

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

                            EOTT ENERGY PIPELINE LIMITED PARTNERSHIP

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

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

                            EOTT ENERGY GENERAL PARTNER, L.L.C.

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

<PAGE>

                                    EXHIBIT C
                            [LETTERHEAD OF BORROWER]

                              BORROWING BASE REPORT
                                as of ___/___/___

<Table>
<Caption>
I.       COLLATERAL TYPE                                                   MARKET VALUE   ADVANCE RATE    BORROWING BASE
<S>      <C>                                                               <C>            <C>             <C>
         1.   Eligible Cash Equivalents                                                       100%
                                                                           ---------                       ------------
         2.   Eligible Accounts Receivables
              a.  Tier I Eligible Receivables                                                 90%
                                                                           ---------                       ------------
              b.  Tier II Eligible Receivables                                                85%
                                                                           ---------                       ------------
         3.   Eligible Crude/Product/Liquid Deliveries
              a.  Tier I Eligible Crude/Product/Liquid Deliveries                             90%
                                                                           ---------                       ------------
              b.  Tier II Eligible Crude/Product/Liquid Deliveries                            85%
                                                                           ---------                       ------------
         4.   Appraised Value of Eligible Fixed Assets                                        80%
                                                                           ---------                       ------------
         5.   Inventory
              a.  (i) NYMEX Hedged Eligible Inventory                                         90%
                                                                           ---------                       ------------
                  (ii)Other Hedged Eligible Inventory                                         80%
                                                                           ---------                       ------------
              b.   Market Value of Unhedged Eligible Inventory                                80%
                                                                           ---------                       ------------
         6.   Eligible Margin Deposits                                                        80%
                                                                           ---------                       ------------
         7.   Undrawn Product Purchase Letters of Credit                                      80%
                                                                           ---------                       ------------

         MINUS:

         8.   First Purchaser Crude Payables                                                  100%
                                                                           ---------                       ------------
         9.   Other Priority Claims                                                           100%
                                                                           ---------                       ------------
         10.  The aggregate net amounts payable by each Borrower under
         all Hedging Contracts to which it is a party:                                        110%
                                                                           ---------                       ------------
         11.  The amount of any setoff or contra account to any Eligible
         Receivable that could arise from an obligation of any Borrower
         to sell or purchase crude oil in any future month to the extent
         not otherwise reflected as a reduction of Eligible Receivables,
         such amount to be determined on an early termination or mark to
         market basis:                                                                        100%
                                                                           ---------                       ------------

         COLLATERAL TOTAL:
                                                                                                           ------------

II.      OUTSTANDINGS
         1.   Principal amount of loans outstanding and any accrued and
         unpaid fees and expenses under Lehman DIP Credit Agreement:
                                                                                           ----------
         2.    Outstanding amounts under SCTSC Purchase Agreements and
         all accrued and unpaid fees and expenses thereunder:
                                                                                           ----------
         3.    Carve Out
                                                                                           ----------
         TOTAL OUTSTANDINGS
                                                                                           ----------

III.     EXCESS / DEFICIT (I-II)
                                                                                           ----------
</Table>

I hereby certify that the information provided herein is true and correct to the
best of my knowledge and that the Borrowers have been in compliance with all
terms and conditions of all Credit Documents at all times.

                                        BY:
                                           ---------------------------------
                                        TITLE:  (CEO, CFO or Treasurer)
                                              ------------------------------

<PAGE>

                                    EXHIBIT D

                                CASH FLOW REPORT

<PAGE>

                                    EXHIBIT D
                                CASH FLOW REPORT

<Table>
<Caption>
EOTT Energy                                          Beg Bal       Beg Bal       Beg Bal       Beg Bal       Beg Bal       Beg Bal
[Actual] [Forecast] Cashflows
[Month Year]                                                        Actual       Forecast      Forecast      Forecast      Forecast

                                                      [date]        [date]        [date]        [date]        [date]        [date]
                                                     -------       -------       -------       -------       -------       -------
<S>                                                  <C>           <C>           <C>           <C>           <C>           <C>
Operating Receipts
     Crude Receipts
     Crude Disbursements
     Crude Lockbox
     Crude/Product/NGL Payables (888802239)
     Royalty Checks (888802242)
     Canada Receipts/Disbursements
     Pipeline Receipts
     Pipeline Disbursements
     Pipeline Lockbox
     NGL & Product-Receipts
     NGL & Product-Disbursements
     NGL & Product-Lockbox
     MTBE Receipts
     MTBE Disbursements (Working Cap)
     MTBE Deposits
     Storage & Grid Receipts
     Tax Disbursements
     Merc
     Other Miscellaneous Incoming
                                                     -------       -------       -------       -------       -------       -------
        Operating Receipts

OPERATING DISBURSEMENTS
     Payroll
     Payroll Wires (Benefits)
     ETS Monthly Operating
     OLP Monthly Operating (105)
     Pipeline Monthly Operating (601)
     MTBE/G&S Monthly Operating (609)
     Field Account (444400598)
     Other A/P
                                                     -------       -------       -------       -------       -------       -------
        Operating Disbursements

        CASHFLOW - OPERATIONS
                                                     -------       -------       -------       -------       -------       -------

CAPITAL & NON-OPERATING:
     Miss #3 Pipeline
     MTBE TurnAround
     Interest/LC Cost - s/t
     ETS Payable
     SCB Loan Advances/Payments
     Unitholder/Senior Debt/New Debt
                                                     -------       -------       -------       -------       -------       -------
        Capital & Non-Operating

     Cash Balance (All US Bank Accts)
                                                     -------       -------       -------       -------       -------       -------
       LOAN BALANCE - SCB
                                                     =======       =======       =======       =======       =======       =======

     CHANGE IN BOOK CASH

     Beginning Cash (all US bank accts)
     Change in Book Cash
     Change in O/S Check Float
                                                     -------       -------       -------       -------       -------       -------
     Ending Cash
                                                     =======       =======       =======       =======       =======       =======

     CHECKING ACCOUNT DATA

     OUTSTANDING CHECK TOTAL @ [___]
     CHECKS ISSUED
     Royalty Account (888802242)
     Expense (888802226)
        Ad Valorem Taxes
        Environmental
        West Coast Capital & Other
     Pipeline Account (888802320)
        Ad Valorem Taxes
        Environmental
     Payroll Account (888802255)
     Trade Payables (888802239)
        Crude Payables
        Product/NGL Payables
     Field Account (444400598)
     MTBE/G&S Monthly Oper.(888802918)
        Turnaround
        Annual Preventive Maintenance
                                                     -------       -------       -------       -------       -------       -------
         SUBTOTAL CHECKS ISSUED

     CHECKS CLEARED
     Royalty Account (888802242)
     Expense (888802226)
     Pipeline Account (888802320)
     Payroll Account (888802255)
     Trade Payables (888802239)
     Field Account (444400598)
     MTBE/G&S Monthly Oper.(888802918)
                                                     -------       -------       -------       -------       -------       -------
         SUBTOTAL CHECKS CLEARED

     FLOAT BALANCE
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                     -------       -------       -------       -------       -------       -------
     Ending Check Float
        CHANGE IN CHECK FLOAT

     FLOAT BALANCE-ROYALTY
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                     -------       -------       -------       -------       -------       -------
     Ending Check Float

     FLOAT BALANCE-OTHER
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                     -------       -------       -------       -------       -------       -------
     Ending Check Float

     Checks Issued
     Checks Cleared

<Caption>
EOTT Energy                                         Beg Bal       Beg Bal       Beg Bal       Beg Bal       Beg Bal       Beg Bal
[Actual] [Forecast] Cashflows
[Month Year]                                        Forecast      Forecast      Forecast      Forecast      Forecast      Forecast

                                                     [date]        [date]        [date]        [date]        [date]        [date]
                                                    -------       -------       -------       -------       -------       -------
<S>                                                 <C>           <C>           <C>           <C>           <C>           <C>
Operating Receipts
     Crude Receipts
     Crude Disbursements
     Crude Lockbox
     Crude/Product/NGL Payables (888802239)
     Royalty Checks (888802242)
     Canada Receipts/Disbursements
     Pipeline Receipts
     Pipeline Disbursements
     Pipeline Lockbox
     NGL & Product-Receipts
     NGL & Product-Disbursements
     NGL & Product-Lockbox
     MTBE Receipts
     MTBE Disbursements (Working Cap)
     MTBE Deposits
     Storage & Grid Receipts
     Tax Disbursements
     Merc
     Other Miscellaneous Incoming
                                                    -------       -------       -------       -------       -------       -------
        Operating Receipts

OPERATING DISBURSEMENTS
     Payroll
     Payroll Wires (Benefits)
     ETS Monthly Operating
     OLP Monthly Operating (105)
     Pipeline Monthly Operating (601)
     MTBE/G&S Monthly Operating (609)
     Field Account (444400598)
     Other A/P
                                                    -------       -------       -------       -------       -------       -------
        Operating Disbursements

        CASHFLOW - OPERATIONS
                                                    -------       -------       -------       -------       -------       -------

CAPITAL & NON-OPERATING:
     Miss #3 Pipeline
     MTBE TurnAround
     Interest/LC Cost - s/t
     ETS Payable
     SCB Loan Advances/Payments
     Unitholder/Senior Debt/New Debt
                                                    -------       -------       -------       -------       -------       -------
        Capital & Non-Operating

     Cash Balance (All US Bank Accts)
                                                    -------       -------       -------       -------       -------       -------
       LOAN BALANCE - SCB
                                                    =======       =======       =======       =======       =======       =======

     CHANGE IN BOOK CASH

     Beginning Cash (all US bank accts)
     Change in Book Cash
     Change in O/S Check Float
                                                    -------       -------       -------       -------       -------       -------
     Ending Cash
                                                    =======       =======       =======       =======       =======       =======

     CHECKING ACCOUNT DATA

     OUTSTANDING CHECK TOTAL @ [___]
     CHECKS ISSUED
     Royalty Account (888802242)
     Expense (888802226)
        Ad Valorem Taxes
        Environmental
        West Coast Capital & Other
     Pipeline Account (888802320)
        Ad Valorem Taxes
        Environmental
     Payroll Account (888802255)
     Trade Payables (888802239)
        Crude Payables
        Product/NGL Payables
     Field Account (444400598)
     MTBE/G&S Monthly Oper.(888802918)
        Turnaround
        Annual Preventive Maintenance
                                                    -------       -------       -------       -------       -------       -------
         SUBTOTAL CHECKS ISSUED

     CHECKS CLEARED
     Royalty Account (888802242)
     Expense (888802226)
     Pipeline Account (888802320)
     Payroll Account (888802255)
     Trade Payables (888802239)
     Field Account (444400598)
     MTBE/G&S Monthly Oper.(888802918)
                                                    -------       -------       -------       -------       -------       -------
         SUBTOTAL CHECKS CLEARED

     FLOAT BALANCE
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                    -------       -------       -------       -------       -------       -------
     Ending Check Float
        CHANGE IN CHECK FLOAT

     FLOAT BALANCE-ROYALTY
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                    -------       -------       -------       -------       -------       -------
     Ending Check Float

     FLOAT BALANCE-OTHER
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                    -------       -------       -------       -------       -------       -------
     Ending Check Float

     Checks Issued
     Checks Cleared

<Caption>
EOTT Energy                                       Beg Bal       Beg Bal       Beg Bal       Beg Bal       Beg Bal       Beg Bal
[Actual] [Forecast] Cashflows
[Month Year]                                      Forecast      Forecast      Forecast      Forecast      Forecast      Forecast

                                                   [date]        [date]        [date]        [date]        [date]        [date]
                                                  -------       -------       -------       -------       -------       -------
<S>                                               <C>           <C>           <C>           <C>           <C>           <C>
Operating Receipts
     Crude Receipts
     Crude Disbursements
     Crude Lockbox
     Crude/Product/NGL Payables (888802239)
     Royalty Checks (888802242)
     Canada Receipts/Disbursements
     Pipeline Receipts
     Pipeline Disbursements
     Pipeline Lockbox
     NGL & Product-Receipts
     NGL & Product-Disbursements
     NGL & Product-Lockbox
     MTBE Receipts
     MTBE Disbursements (Working Cap)
     MTBE Deposits
     Storage & Grid Receipts
     Tax Disbursements
     Merc
     Other Miscellaneous Incoming
                                                  -------       -------       -------       -------       -------       -------
        Operating Receipts

OPERATING DISBURSEMENTS
     Payroll
     Payroll Wires (Benefits)
     ETS Monthly Operating
     OLP Monthly Operating (105)
     Pipeline Monthly Operating (601)
     MTBE/G&S Monthly Operating (609)
     Field Account (444400598)
     Other A/P
                                                  -------       -------       -------       -------       -------       -------
        Operating Disbursements

        CASHFLOW - OPERATIONS
                                                  -------       -------       -------       -------       -------       -------

CAPITAL & NON-OPERATING:
     Miss #3 Pipeline
     MTBE TurnAround
     Interest/LC Cost - s/t
     ETS Payable
     SCB Loan Advances/Payments
     Unitholder/Senior Debt/New Debt
                                                  -------       -------       -------       -------       -------       -------
        Capital & Non-Operating

     Cash Balance (All US Bank Accts)
                                                  -------       -------       -------       -------       -------       -------
       LOAN BALANCE - SCB
                                                  =======       =======       =======       =======       =======       =======

     CHANGE IN BOOK CASH

     Beginning Cash (all US bank accts)
     Change in Book Cash
     Change in O/S Check Float
                                                  -------       -------       -------       -------       -------       -------
     Ending Cash
                                                  =======       =======       =======       =======       =======       =======

     CHECKING ACCOUNT DATA

     OUTSTANDING CHECK TOTAL @ [___]
     CHECKS ISSUED
     Royalty Account (888802242)
     Expense (888802226)
        Ad Valorem Taxes
        Environmental
        West Coast Capital & Other
     Pipeline Account (888802320)
        Ad Valorem Taxes
        Environmental
     Payroll Account (888802255)
     Trade Payables (888802239)
        Crude Payables
        Product/NGL Payables
     Field Account (444400598)
     MTBE/G&S Monthly Oper.(888802918)
        Turnaround
        Annual Preventive Maintenance
                                                  -------       -------       -------       -------       -------       -------
         SUBTOTAL CHECKS ISSUED

     CHECKS CLEARED
     Royalty Account (888802242)
     Expense (888802226)
     Pipeline Account (888802320)
     Payroll Account (888802255)
     Trade Payables (888802239)
     Field Account (444400598)
     MTBE/G&S Monthly Oper.(888802918)
                                                  -------       -------       -------       -------       -------       -------
         SUBTOTAL CHECKS CLEARED

     FLOAT BALANCE
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                  -------       -------       -------       -------       -------       -------
     Ending Check Float
        CHANGE IN CHECK FLOAT

     FLOAT BALANCE-ROYALTY
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                  -------       -------       -------       -------       -------       -------
     Ending Check Float

     FLOAT BALANCE-OTHER
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                  -------       -------       -------       -------       -------       -------
     Ending Check Float

     Checks Issued
     Checks Cleared

<Caption>
EOTT Energy                                           Beg Bal       Beg Bal       Beg Bal       Beg Bal
[Actual] [Forecast] Cashflows
[Month Year]                                          Forecast      Forecast      Forecast      Forecast      Forecast

                                                       [date]        [date]        [date]        [date]        [date]
                                                      -------       -------       -------       -------       -------
<S>                                                   <C>           <C>           <C>           <C>           <C>
Operating Receipts
     Crude Receipts
     Crude Disbursements
     Crude Lockbox
     Crude/Product/NGL Payables (888802239)
     Royalty Checks (888802242)
     Canada Receipts/Disbursements
     Pipeline Receipts
     Pipeline Disbursements
     Pipeline Lockbox
     NGL & Product-Receipts
     NGL & Product-Disbursements
     NGL & Product-Lockbox
     MTBE Receipts
     MTBE Disbursements (Working Cap)
     MTBE Deposits
     Storage & Grid Receipts
     Tax Disbursements
     Merc
     Other Miscellaneous Incoming
                                                      -------       -------       -------       -------
        Operating Receipts

OPERATING DISBURSEMENTS
     Payroll
     Payroll Wires (Benefits)
     ETS Monthly Operating
     OLP Monthly Operating (105)
     Pipeline Monthly Operating (601)
     MTBE/G&S Monthly Operating (609)
     Field Account (444400598)
     Other A/P
                                                      -------       -------       -------       -------
        Operating Disbursements

        CASHFLOW - OPERATIONS
                                                      -------       -------       -------       -------

CAPITAL & NON-OPERATING:
     Miss #3 Pipeline
     MTBE TurnAround
     Interest/LC Cost - s/t
     ETS Payable
     SCB Loan Advances/Payments
     Unitholder/Senior Debt/New Debt
                                                      -------       -------       -------       -------
        Capital & Non-Operating

     Cash Balance (All US Bank Accts)
                                                      -------       -------       -------       -------
       LOAN BALANCE - SCB
                                                      =======       =======       =======       =======

     CHANGE IN BOOK CASH

     Beginning Cash (all US bank accts)
     Change in Book Cash
     Change in O/S Check Float
                                                      -------       -------       -------       -------
     Ending Cash
                                                      =======       =======       =======       =======

     CHECKING ACCOUNT DATA

     OUTSTANDING CHECK TOTAL @ [___]                                                                        Total Checks Issued
     CHECKS ISSUED                                                                                          Totals Breakdown
     Royalty Account (888802242)
     Expense (888802226)
        Ad Valorem Taxes
        Environmental
        West Coast Capital & Other
     Pipeline Account (888802320)
        Ad Valorem Taxes
        Environmental
     Payroll Account (888802255)
     Trade Payables (888802239)
        Crude Payables
        Product/NGL Payables
     Field Account (444400598)
     MTBE/G&S Monthly Oper.(888802918)
        Turnaround
        Annual Preventive Maintenance
                                                      -------       -------       -------       -------
         SUBTOTAL CHECKS ISSUED

     CHECKS CLEARED
     Royalty Account (888802242)
     Expense (888802226)
     Pipeline Account (888802320)
     Payroll Account (888802255)
     Trade Payables (888802239)
     Field Account (444400598)
     MTBE/G&S Monthly Oper.(888802918)
                                                      -------       -------       -------       -------
         SUBTOTAL CHECKS CLEARED

     FLOAT BALANCE
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                      -------       -------       -------       -------
     Ending Check Float
        CHANGE IN CHECK FLOAT

     FLOAT BALANCE-ROYALTY
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                      -------       -------       -------       -------
     Ending Check Float

     FLOAT BALANCE-OTHER
     Beginning O/S Check Balance
     Checks Issued
     Checks Cleared
                                                      -------       -------       -------       -------
     Ending Check Float

     Checks Issued
     Checks Cleared
</Table>

<PAGE>

                                    EXHIBIT E

                      ENVIRONMENTAL COMPLIANCE CERTIFICATE

         Reference is made to that certain Debtor in Possession Letter of Credit
Agreement, dated as of October 18, 2002 (as from time to time amended, the
"AGREEMENT"), among EOTT Energy Operating Limited Partnership ("EOTT OLP"), EOTT
Energy Canada Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids, L.P.
("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership ("EOTT PIPELINE" and
together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint and several
basis, the "BORROWERS"), EOTT Energy Partners, L.P., EOTT Energy General
Partner, L.L.C. ("EOTT GP"), and Standard Chartered Bank, as LC Agent and the
other signatories thereto. Capitalized terms used and not defined herein have
the meanings given to them in the Agreement.

         This Certificate is furnished pursuant to Section 9(d)(x) of the
Agreement. The Borrowers hereby represent, warrant, and acknowledge to the LC
Agent and each LC Participant that:

                  1. For the Fiscal Year ending immediately prior to the date
hereof, the Borrowers have complied and are complying with Section 9(o) of the
Agreement;

                  2. To the best knowledge of the undersigned after due inquiry,
the Borrowers are on the date hereof in compliance with all applicable
Environmental Laws, noncompliance with which could cause a Material Adverse
Change;

                  3. The Borrowers have taken (and continue to take) reasonable
steps to minimize the generation of potentially harmful effluents; and

                  4. The Borrowers have established an ongoing program of
conducting an internal audit of each operating facility of the Borrowers to
identify actual or potential environmental Liabilities that could cause a
Material Adverse Change.

         The manager or officer of EOTT GP signing this instrument hereby
certifies that (i) such manager or officer is a duly elected, acting and
qualified manager or officer of EOTT GP as indicated below such manager's or
officer's signature hereto, having all necessary authority to act for EOTT GP in
its capacity as the sole General Partner of each Borrower in making the
representations, warranties and acknowledgements set forth herein and (ii) to
the best of such manager's or officer's knowledge after due inquiry and
consultation with the operating officers of each Borrower, such representations,
warranties, acknowledgments and agreements are true, correct and complete in all
material respects.

<PAGE>

         IN WITNESS WHEREOF, this instrument is executed as of __________,
200__.

                         EOTT ENERGY OPERATING LIMITED PARTNERSHIP

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

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

                         EOTT ENERGY CANADA LIMITED PARTNERSHIP

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

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

                         EOTT ENERGY LIQUIDS, L.P.

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

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

                         EOTT ENERGY PIPELINE LIMITED PARTNERSHIP

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

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

<PAGE>

                         EOTT ENERGY PARTNERS, L.P.

                         By:      EOTT ENERGY CORP., its General Partner

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

                         EOTT ENERGY GENERAL PARTNER, L.L.C

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

<PAGE>

                                    EXHIBIT F

                              OPEN POSITION REPORT

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Delivery Month

                                     SUMMARY
                                   Fixed Price
<Table>
<Caption>
Delivery                     Dom-
Month                  DOM   NUMEX    Ho-NYMES SOUR   SWEET    WTI   WTS    NET   ROLL NET  N/A   N/A    N/A   N/A   N/A   N/A
---------------------- ----- -------- -------- ------ -------- ----- ------ ----- --------- ----- ------ ----- ----- ----- -----
<S>                    <C>   <C>      <C>      <C>    <C>      <C>   <C>    <C>   <C>       <C>   <C>    <C>   <C>   <C>   <C>

INVENTORY

14-West Texas

32-EOTT Terminaling    -100                               100

33- Offshore              1                                                    1

4-NAT                   -56                                                  -56

44-Ms AI FI

64- Rocky Mountain      337                              -338                 -1

74-Oklahoma              14                               -45                -31

Total                   196        0        0      0     -283     0      0   -87

0209

14-West Texas           388                                    -467     48   -31

32-EOTT Terminaling    -140      -45             120       40           50    25

4-NAT                   -19       27                                           8

54-ArkLaTex              -9                                                   -9

64- Rocky Mountain      -35      270                                         235

74-Oklahoma              -8                                             30    22

Total                   177      252        0    120       40  -467    128   250

0210

14-West Texas           609                                    -636

32-EOTT Terminaling    -295      -21             310                          -6

<Caption>
Delivery
Month                  N/A   N/A    N/A   N/A   N/A   N/A   N/A   N/A   N/A   N/A
---------------------- ----- ------ ----- ----- ----- ----- ----- ----- ----- -----
<S>                    <C>   <C>    <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>

INVENTORY

14-West Texas

32-EOTT Terminaling

33- Offshore

4-NAT

44-Ms AI FI

64- Rocky Mountain

74-Oklahoma

Total

0209

14-West Texas

32-EOTT Terminaling

4-NAT

54-ArkLaTex

64- Rocky Mountain

74-Oklahoma

Total

0210

14-West Texas

32-EOTT Terminaling
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Delivery Month

                                     SUMMARY
                                   Fixed Price

<Table>
<Caption>
Delivery                     Dom-
Month                  DOM   NUMEX    Ho-NYMES SOUR   SWEET    WTI   WTS    NET   ROLL NET  N/A   N/A    N/A   N/A   N/A   N/A
---------------------- ----- -------- -------- ------ -------- ----- ------ ----- --------- ----- ------ ----- ----- ----- -----
<S>                    <C>   <C>      <C>      <C>    <C>      <C>   <C>    <C>   <C>       <C>   <C>    <C>   <C>   <C>   <C>
34-Bayou                 89                               -89

4-NAT                   128     -133                                          -5

44-Ms AI FI              -2      -78                                         -80

54-ArkLaTex

64-Rocky Mountain       -18      133                       15                130

74-Oklahoma              50       42                                          92

Total                   561      -57        0    310      -74  -636      2   106

0211

14-West Texas           -16                                                  -16

32-EOTT Terminaling       8       -8

34-Bayou                 60                               -60

4-NAT                    63                                                   63

44-Ms AI FI               2       -3                                          -1

54-ArkLaTex                      -31                                         -31

64-Rocky Mountain        -3     -101                                        -104

74-Oklahoma             -55       -8                                         -63

Total                    59     -151        0      0      -60     0      0  -152

0212

34-Bayou                 62                               -62

4-NAT

64-Rocky Mountain                -63                                         -63

Total                    62      -63        0      0      -62     0      0   -63

<Caption>
Delivery
Month                  N/A   N/A    N/A   N/A   N/A   N/A   N/A   N/A   N/A   N/A
---------------------- ----- ------ ----- ----- ----- ----- ----- ----- ----- -----
<S>                    <C>   <C>    <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
34-Bayou

4-NAT

44-Ms AI FI

54-ArkLaTex

64-Rocky Mountain

74-Oklahoma

Total

0211

14-West Texas

32-EOTT Terminaling

34-Bayou

4-NAT

44-Ms AI FI

54-ArkLaTex

64-Rocky Mountain

74-Oklahoma

Total

0212

34-Bayou

4-NAT

64-Rocky Mountain

Total
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Delivery Month

                                     SUMMARY
                                   Fixed Price

<Table>
<Caption>
Delivery                     Dom-
Month                  DOM   NUMEX    Ho-NYMES SOUR   SWEET    WTI   WTS    NET   ROLL NET  N/A   N/A    N/A   N/A   N/A   N/A
---------------------- ----- -------- -------- ------ -------- ----- ------ ----- --------- ----- ------ ----- ----- ----- -----
<S>                    <C>   <C>      <C>      <C>    <C>      <C>   <C>    <C>   <C>       <C>   <C>    <C>   <C>   <C>   <C>
0301

64-Rocky Mountain                 27                                          27

Total                     0       27        0      0       0      0      0    27

0302

64-Rocky Mountain                 10                                          10

Total                     0       10        0      0       0      0      0    10

0312

4-NAT

Total                     0        0        0      0       0      0      0     0

Summary

14-West Texas           981                                   -1103     50   -72

32-EOTT Terminaling    -527      -74             430     140            50    19

33-Offshore               1                                                    1

34-Bayou                211                             -211

4-NAT                   116     -106                                          10

44-Ms AF FI                      -81                                         -81

54-ArkLaTex              -9      -31                                         -40

64-Rocky Mountain       281      276                    -323                 234

74-Oklahoma               1       34                     -45            30    20

Total                  1055       18        0    430    -439  -1103    130    91

<Caption>
Delivery
Month                  N/A   N/A    N/A   N/A   N/A   N/A   N/A   N/A   N/A   N/A
---------------------- ----- ------ ----- ----- ----- ----- ----- ----- ----- -----
<S>                    <C>   <C>    <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
0301

64-Rocky Mountain

Total

0302

64-Rocky Mountain

Total

0312

4-NAT

Total

Summary

14-West Texas

32-EOTT Terminaling

33-Offshore

34-Bayou

4-NAT

44-Ms AF FI

54-ArkLaTex

64-Rocky Mountain

74-Oklahoma

Total
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY
                                  Ratable Price

<Table>
<Caption>
Delivery            dom*    heavy*    sour*    sweet*   unk*   wti*    net*   ***      conoc    eott*    koch*    market    MERC*
Month.                                                                                    o*                           *
--------------     ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- --------- --------
<S>                <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>       <C>

4-NAT

0209                 -10                                                -10                                                   -10

0210                                                                                                         1

0211

   Total             -10         0        0         0      0      0     -10     0          0        0        1         0       -10

<Caption>
Delivery            other*   platt*  unpric*    net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------    --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>               <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

4-NAT

0209                                             -10

0210                             -1

0211

   Total                 0       -1        0     -10
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY
                                  Ratable Price

<Table>
<Caption>
Delivery          dom*    heavy*    sour*    sweet*   unk*   wti*    net*   ***      conoc    eott*    koch*    market    MERC*
Month.                                                                                  o*                           *
--------------   ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- --------- --------
<S>              <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>       <C>

14-West Texas

0209                -5                                          5                                                             5

0210                                                           56      56                                                    56

0211                                                           54      54                                                    54

   Total            -5         0        0         0      0    115     110     0          0        0        0         0       115

<Caption>
Delivery            other*   platt*  unpric*    net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------    --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>               <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

14-West Texas

0209                             -5

0210                                              56

0211                                              54

   Total                 0       -5        0     110
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY
                                  Ratable Price

<Table>
<Caption>
Delivery           dom*    heavy*    sour*    sweet*   unk*   wti*    net*   ***      conoc    eott*    koch*    market    MERC*
Month.                                                                                   o*                           *
--------------    ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- --------- --------
<S>               <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>       <C>

24-South Texas

0210                  3                          -14     -9            -20                        -9

   Total              3         0        0       -14     -9      0     -20     0          0       -9        0         0         0

<Caption>
Delivery             other*   platt*  unpric*    net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------     --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>                <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

24-South Texas

0210                             -11              -20

   Total                  0      -11        0     -20
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY
                                  Ratable Price

<Table>
<Caption>
Delivery                   dom*    heavy*    sour*    sweet*   unk*   wti*    net*   ***      conoc    eott*    koch*    market
Month.                                                                                           o*                           *
--------------            ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
<S>                       <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>

32-EOTT Terminaling

0209                        -20                                         -5     -25                       -25

0210

0211

   Total                    -20         0        0         0      0     -5     -25     0          0      -25        0         0

<Caption>
Delivery                   MERC*    other*   platt*  unpric*    net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------           -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>                      <C>      <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

32-EOTT Terminaling

0209                          -5                  5              -25

0210

0211

   Total                       -5        0        5        0     -25
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY
                                  Ratable Price

<Table>
<Caption>
Delivery                   dom*    heavy*    sour*    sweet*   unk*   wti*    net*   ***      conoc    eott*    koch*    market
Month.                                                                                           o*                           *
--------------            ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
<S>                       <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>

34-Bayou

0209

0210

0211                         24                         -157                  -133                                         -120

   Total                     24         0        0      -157      0      0    -133     0          0        0        0      -120

<Caption>
Delivery               MERC*    other*   platt*  unpric*    net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------       -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>                  <C>      <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

34-Bayou

0209

0210

0211                                        -13             -133

   Total                    0        0      -13        0    -133
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY
                                  Ratable Price

<Table>
<Caption>
Delivery                   dom*    heavy*    sour*    sweet*   unk*   wti*    net*   ***      conoc    eott*    koch*    market
Month.                                                                                           o*                           *
--------------            ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
<S>                       <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>

44-Ms Al Fl

0209                                                                                                              -60

0210                         26                          -80                   -54                                          -80

   Total                     26         0        0       -80      0      0     -54     0          0        0      -60       -80

<Caption>
Delivery                MERC*    other*   platt*  unpric*    net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------        -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>                   <C>      <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

44-Ms Al Fl

0209                                          60

0210                                          26              -54

   Total                     0        0       86        0     -54
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY

                                  Ratable Price

<Table>
<Caption>
Delivery                    dom*   heavy*    sour*    sweet*    unk*  wti*    net*    ***     conoc    eott*    koch*    market
Month.                                                                                           o*                           *
--------------            ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
<S>                       <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>

54-ArkLaTex

0209                           9                                                 9

0210                         -18                                               -18

0211

   Total                      -9        0        0         0       0     0      -9      0         0        0        0         0

<Caption>
Delivery              MERC*    other*   platt*   unpric*   net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------      -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>                 <C>      <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

54-ArkLaTex

0209                                         9                9

0210                                       -18              -18

0211

   Total                  0         0       -9         0     -9
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY
                                  Ratable Price

<Table>
<Caption>
Delivery                    dom*   heavy*    sour*    sweet*    unk*  wti*    net*    ***     conoc    eott*    koch*    market
Month.                                                                                           o*                           *
--------------            ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
<S>                       <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>

64-Rocky Mountain

0209                         150                        -386                  -236                       -62       55

0210                         353               -10      -238                   105                         4       50

0211                         -64                         117                    53                         4
0212                         -66                         120                    54                         4
0301                          -4                           4                                               4

   Total                     369        0      -10      -383       0     0     -24      0         0      -46      105         0

<Caption>
Delivery                 MERC*    other*   platt*   unpric*   net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------         -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>                    <C>      <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

64-Rocky Mountain

0209                        -8       -12     -211         2   -236

0210                                          -89       140    105

0211                                           49               53
0212                                           50               54
0301                                           -4

   Total                    -8       -12     -205       142    -24
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY

                                  Ratable Price

<Table>
<Caption>
Delivery                    dom*   heavy*    sour*    sweet*    unk*  wti*    net*    ***     conoc    eott*    koch*    market
Month.                                                                                           o*                           *
--------------            ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
<S>                       <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>

73-Kansas

0209                        -140                           5      -6          -141                        -5

0210

0211

   Total                    -140        0        0         5      -6          -141      0         0       -5        0         0

<Caption>
Delivery               MERC*    other*   platt*   unpric*   net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------       -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>                  <C>      <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

73-Kansas

0209                                       -136             -141

0210

0211

   Total                   0         0     -136         0   -141
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY

                                  Ratable Price

<Table>
<Caption>
Delivery                    dom*   heavy*    sour*    sweet*    unk*  wti*    net*    ***     conoc    eott*    koch*    market
Month.                                                                                           o*                           *
--------------            ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
<S>                       <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>

74 Oklahoma

0209                         -41                          26                   -15                        12       30

0210                         255                                        31     286                                 87

0211

   Total                     214        0        0        26       0    31     271      0         0       12      117         0

<Caption>
Delivery               MERC*    other*   platt*   unpric*   net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------       -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>                  <C>      <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

74 Oklahoma

0209                      26                -83              -15

0210                                        199              286

0211

   Total                  26         0      116         0    271
</Table>

<PAGE>

EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group

                                     SUMMARY

                                  Ratable Price

<Table>
<Caption>
Delivery                    dom*   heavy*    sour*    sweet*    unk*  wti*    net*    ***     conoc    eott*    koch*    market
Month.                                                                                           o*                           *
--------------            ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
<S>                       <C>    <C>       <C>      <C>       <C>    <C>    <C>     <C>   <C>        <C>      <C>      <C>

SUMMARY

0209                          83                        -360                  -277                       -75       25

0210                         503               -10      -484     -15    87      81                       -10      138      -200

0211                         -64                         117            54     107                         4
0212                         -66                         120                    54                         4
0301                          -4                           4                                               4

   Total                     452        0      -10      -603     -15   141     -35      0         0      -73      163      -200

<Caption>
Delivery             MERC*    other*   platt*   unpric*   net*   n/a    n/a   n/a    n/a   n/a    n/a   n/a    n/a
Month.
--------------     -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
<S>                <C>      <C>       <C>      <C>      <C>     <C>   <C>    <C>   <C>    <C>   <C>    <C>   <C>

SUMMARY

0209                     8       -12     -225         2   -277

0210                    56                -43       140     81

0211                    54                 49              107
0212                                       50               54
0301                                       -4

   Total               118       -12     -173       142    -35
</Table>

<PAGE>

                                    EXHIBIT G

                               INITIAL CASH BUDGET

<PAGE>

<Table>
<Caption>
(DOLLAR AMOUNTS IN THOUSANDS)         Period 1          Period 2          Period 3         Period 4          Period 5
                                   Forecast Stub        Forecast          Forecast         Forecast          Forecast
                                   3 Days Ending      Week Ending       Week Ending       Week Ending       Week Ending
                                     10/12/2002        10/19/2002        10/26/2002        11/2/2002         11/9/2002
                                    ------------      ------------      ------------      ------------      ------------

<S>                                 <C>               <C>               <C>               <C>               <C>
SOURCES                             $         --      $      3,510      $     36,650      $      9,390      $      1,975
CGS USES                                   2,943             4,440            26,418             5,323             4,359
                                    ------------      ------------      ------------      ------------      ------------
                                          (2,943)             (930)           10,232             4,067            (2,384)

OPERATING EXPENSES                           895            12,764             1,980             9,065             3,730
NON-OPERATING EXPENSES                        --                --             2,500             2,650             2,490
                                    ------------      ------------      ------------      ------------      ------------
NET CASH INFLOWS/(OUTFLOWS)               (3,838)          (13,694)            5,752            (7,648)           (8,604)
                                    ============      ============      ============      ============      ============

CUMULATIVE NET CASH FLOW BUDGET           (3,838)          (17,532)          (11,779)          (19,427)          (28,031)
CUMULATIVE NET CASH FLOW ACTUAL             (534)             (534)             (534)             (534)             (534)
                                    ------------      ------------      ------------      ------------      ------------
FAVORABLE (UNFAVORABLE) VARIANCE           3,304            16,997            11,245            18,893            27,496
PERCENTAGE VARIANCE                           86%               97%               95%               97%               98%

<Caption>
(DOLLAR AMOUNTS IN THOUSANDS)          Period 6          Period 7          Period 8          Period 9         Period 10
                                       Forecast          Forecast          Forecast          Forecast          Forecast
                                     Week Ending       Week Ending       Week Ending       Week Ending       Week Ending
                                      11/16/2002        11/23/2002        11/30/2002        12/7/2002         12/14/2002
                                     ------------      ------------      ------------      ------------      ------------

<S>                                  <C>               <C>               <C>               <C>               <C>
SOURCES                              $      1,920      $     37,735      $     13,713      $      3,650      $      3,650
CGS USES                                    3,902            24,729             6,385             6,578             3,973
                                     ------------      ------------      ------------      ------------      ------------
                                           (1,982)           13,006             7,328            (2,928)             (323)

OPERATING EXPENSES                          5,151             1,465             4,165             3,650             4,565
NON-OPERATING EXPENSES                        200               110             2,500             2,413               200
                                     ------------      ------------      ------------      ------------      ------------
NET CASH INFLOWS/(OUTFLOWS)                (7,333)           11,431               663            (8,990)           (5,088)
                                     ============      ============      ============      ============      ============

CUMULATIVE NET CASH FLOW BUDGET           (35,364)          (23,933)          (23,269)          (32,260)          (37,348)
CUMULATIVE NET CASH FLOW ACTUAL              (534)             (534)             (534)             (534)             (534)
                                     ------------      ------------      ------------      ------------      ------------
FAVORABLE (UNFAVORABLE) VARIANCE           34,829            23,398            22,735            31,725            36,813
PERCENTAGE VARIANCE                            98%               98%               98%               98%               99%

<Caption>
(DOLLAR AMOUNTS IN THOUSANDS)      Period 11          Period 12         Period 13        Period 14         Period 15
                                    Forecast          Forecast          Forecast          Forecast         Forecast
                                  Week Ending       Week Ending       Week Ending       Week Ending       Week Ending
                                   12/21/2002        12/28/2002         1/4/2003         1/11/2003         1/18/2003
                                  ------------      ------------      ------------      ------------      ------------

<S>                               <C>               <C>               <C>               <C>               <C>
SOURCES                           $     37,762      $     11,940      $      4,603      $      3,250      $      3,650
CGS USES                                25,764             3,810             4,446             5,474             4,087
                                  ------------      ------------      ------------      ------------      ------------
                                        11,998             8,130               157            (2,224)             (437)

OPERATING EXPENSES                       1,515             1,415             5,106             1,830             3,565
NON-OPERATING EXPENSES                     200             2,565                --             2,443               190
                                  ------------      ------------      ------------      ------------      ------------
NET CASH INFLOWS/(OUTFLOWS)             10,283             4,150            (4,949)           (6,497)           (4,192)
                                  ============      ============      ============      ============      ============

CUMULATIVE NET CASH FLOW BUDGET        (27,065)          (22,915)          (27,863)          (34,360)          (38,552)
CUMULATIVE NET CASH FLOW ACTUAL           (534)             (534)             (534)             (534)             (534)
                                  ------------      ------------      ------------      ------------      ------------
FAVORABLE (UNFAVORABLE) VARIANCE        26,530            22,380            27,329            33,826            38,018
PERCENTAGE VARIANCE                         98%               98%               98%               98%               99%

<Caption>
(DOLLAR AMOUNTS IN THOUSANDS)       Period 16         Period 17
                                     Forecast          Forecast            TOTAL
                                   Week Ending       Week Ending        for the 17
                                    1/25/2003          2/1/2003         Week period
                                   ------------      ------------      ------------

<S>                                <C>               <C>               <C>
SOURCES                            $     37,697      $     12,075      $    223,170
CGS USES                                 23,800             7,454           163,883
                                   ------------      ------------      ------------
                                         13,897             4,621            59,287

OPERATING EXPENSES                        2,270             3,033            66,163
NON-OPERATING EXPENSES                      190               690            19,341
                                   ------------      ------------      ------------
NET CASH INFLOWS/(OUTFLOWS)              11,437               898           (26,217)
                                   ============      ============      ============

CUMULATIVE NET CASH FLOW BUDGET         (27,115)          (26,217)
CUMULATIVE NET CASH FLOW ACTUAL            (534)             (534)
                                   ------------      ------------
FAVORABLE (UNFAVORABLE) VARIANCE         26,581            25,682
PERCENTAGE VARIANCE                          98%               98%
</Table>
<PAGE>

                                    EXHIBIT H

                              CRITICAL VENDOR ORDER

<PAGE>

                      IN THE UNITED STATES BANKRUPTCY COURT
                       FOR THE SOUTHERN DISTRICT OF TEXAS
                             CORPUS CHRISTI DIVISION

In re:                                        )     (Chapter 11)
                                              )
EOTT ENERGY PARTNERS, L.P.                    )     CASE NO. 02-21730
                                              )
EOTT ENERGY FINANCE CORP.                     )     CASE NO. 02-21731
                                              )
EOTT ENERGY GENERAL PARTNER, LLC              )     CASE NO. 02-21732
                                              )
EOTT ENERGY OPERATING LIMITED PARTNERSHIP     )     CASE NO. 02-21733
                                              )
                                              )
EOTT ENERGY CANADA LIMITED PARTNERSHIP        )     CASE NO. 02-21734
                                              )
                                              )
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP      )     CASE NO. 02-21735
                                              )
                                              )
EOTT ENERGY LIQUIDS, L.P.                     )     CASE NO. 02-21736
                                              )
                                              )
                           Debtors.           )     (Motion for Joint
                                                    Administration pending)

                    ORDER AUTHORIZING PAYMENT OR HONORING OF
                       PREPETITION OBLIGATIONS TO CRITICAL
                      CUSTOMERS AND VENDORS INCLUDING CRUDE
                     OIL SUPPLIERS, RAW MATERIAL SUPPLIERS,
                               AND TRADE PARTNERS

         Came on for consideration the Debtors' Emergency Motion for Authority
to Pay or Honor Prepetition Obligations to Critical Customers and Vendors
Including Crude Oil Suppliers, Raw Material Suppliers and Trade Partners (the
"Motion") filed by the above-referenced Debtors (collectively, "EOTT" or the
"Debtors"). The Motion requests entry of an order authorizing the Debtors to pay
or honor their prepetition obligations to customers and certain vendors. The
Court has considered the Motion, arguments of counsel, the evidence presented,
and finds that the relief requested in the Motion is in the best interest of the
Debtors, their estates and creditors.

<PAGE>

The Court also finds that, given the circumstances and the nature of the relief
requested, no further notice need be given. It is therefore, hereby

                  ORDERED that the Motion and all relief requested therein is
GRANTED in full and in all respects;

                  ORDERED that the Debtors are authorized to pay the actual
prepetition claims of Suppliers including the undisputed claims of CIMA Energy,
LLC and Burlington Resources, and the Critical Vendor Claims as identified on
EXHIBIT A to the Motion, or as subsequently identified by the Debtors in their
reasonable judgment; and it is further

                  ORDERED that the Debtors are authorized to pay Critical Vendor
Claims and prepetition claims of Suppliers including the undisputed claims of
CIMA Energy, LLC and Burlington Resources incurred during the first week of
October, 2002 ratably whether or not such claims appear on EXHIBIT A to the
Motion.

         Signed this 9th day of October, 2002.

                                            /s/ Judge Richard S. Schmidt
                                            ----------------------------------
                                            UNITED STATES BANKRUPTCY JUDGE

AFTER ENTRY, PLEASE RETURN COPY TO:
Robert D. Albergotti
Trey A. Monsour
Meredyth A. Purdy
Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, Texas  75202

<PAGE>

                                    EXHIBIT I

                          WEEKLY COMPLIANCE CERTIFICATE

                             Dated _______ __, 200__

         Reference is made to that certain Debtor in Possession Letter of Credit
Agreement, dated as of October __, 2002 (as from time to time amended, the
"AGREEMENT"), among EOTT Energy Operating Limited Partnership ("EOTT OLP"), EOTT
Energy Canada Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids, L.P.
("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership ("EOTT PIPELINE" and
together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint and several
basis, the "BORROWERS"), EOTT Energy Partners, L.P., EOTT Energy General
Partner, L.L.C. ("EOTT GP"), and Standard Chartered Bank, as LC Agent and the
other signatories thereto. Capitalized terms used and not defined herein have
the meanings given to them in the Agreement.

         This Certificate is furnished pursuant to Section 9(d)(vi)(4) of the
Agreement. The Borrowers hereby represent, warrant, and acknowledge to the LC
Agent and each LC Participant that:

         5.       Cash Budget

                  (a)      Current Reference Period

                           (i)      The projected Cumulative Net Cash Flow as
                                    reflected in the Cash Budget for the current
                                    Reference Period ended ______ __, 200__ was
                                    ____________.

                           (ii)     The actual Cumulative Net Cash Flow as
                                    reflected in the Cash Budget for the current
                                    Reference Period ended _________ __, 200__
                                    was ____________.

                           (iii)    Variance

                                    (A)      Item 1(a)(i) minus Item 1(a)(ii):
                                             ________ .

                                    (B)     Item 1(a)(iii)(A) divided by Item
                                            1(a)(i), expressed as a percentage:
                                            ________.

                  (b)      Prior Reference Period

                           (i)      The projected Cumulative Net Cash Flow as
                                    reflected in the Cash Budget for the prior
                                    Reference Period ended _______ __, 200__ was
                                    __________.

                           (ii)     The actual Cumulative Net Cash Flow as
                                    reflected in the Cash Budget for the prior
                                    Reference Period ended ______ __, 200__ was
                                    __________.

<PAGE>

                           (iii)    Variance

                                    (A)      Item 1(b)(i) minus Item 1(b)(ii):
                                             _________.

                                    (B)     Item 1(b)(iii)(A) divided by Item
                                            1(b)(i), expressed as a percentage:
                                            ___________.

                  (c)      The actual Cumulative Net Cash Flow [was/was not]
                           less than ninety percent (90%) of the amount of the
                           projected Cumulative Net Cash Flow for the Reference
                           Periods included in Items 1(a) and 1(b) above.

         2.       Minimum Crude Oil Lease Volumes(1)

                  (a)      The aggregate crude oil purchases at the lease at the
                           end of such calendar month most recently ended was
                           _________________.

                  (b)      Number of days in the calendar month most recently
                           ended was __________.

                  (c)      Actual daily lease volume

                           Item 2(a) divided by Item 2(b): ___________.

                  (d)      Variance

                           Item 2(c) divided by the Minimum Lease Volume,
                           expressed as a percentage: ___________.

                  (e)      The actual daily lease volume during the calendar
                           month most recently ended [was/was not] less than
                           ninety-eight percent (98%) of the required Minimum
                           Lease Volume.

         The manager or officer of EOTT GP signing this instrument hereby
certifies that (i) such manager or officer is a duly elected, acting and
qualified manager or officer of EOTT GP as indicated below such manager's or
officer's signature hereto, having all necessary authority to act for EOTT GP in
its capacity as the sole General Partner of each Borrower in making the
representations, warranties and acknowledgements set forth herein and (ii) to
the best of such manager's or officer's knowledge after due inquiry and
consultation with the operating officers of each Borrower, such representations,
warranties, acknowledgments and agreements are true, correct and complete in all
material respects.

----------
(1)      To be completed at the end of any week which is the end of the fourth
         week of a calendar month.

<PAGE>

         IN WITNESS WHEREOF, this instrument is executed as of __________,
200__.

                      EOTT ENERGY OPERATING LIMITED PARTNERSHIP

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

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

                      EOTT ENERGY CANADA LIMITED PARTNERSHIP

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

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

                      EOTT ENERGY LIQUIDS, L.P.

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

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

                      EOTT ENERGY PIPELINE LIMITED PARTNERSHIP

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

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

<PAGE>

                      EOTT ENERGY PARTNERS, L.P.

                      By:      EOTT ENERGY CORP., its General Partner

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

<PAGE>

                                   SCHEDULE J

                              SECOND INTERIM ORDER

<PAGE>

                      IN THE UNITED STATES BANKRUPTCY COURT

                       FOR THE SOUTHERN DISTRICT OF TEXAS

                             CORPUS CHRISTI DIVISION

In re:                                   )          (Chapter 11)
                                         )
EOTT ENERGY PARTNERS, L.P., et al.       )          Case Nos. 02-21730 through
                                         )          02-21736
                              Debtors.   )
                                         )          JOINTLY ADMINISTERED UNDER
                                         )          CASE NO. 02-21730

                SECOND INTERIM ORDER (I) TERMINATING USE OF CASH
                COLLATERAL (II) AUTHORIZING SECURED POSTPETITION
                FINANCING ON A SUPERPRIORITY BASIS PURSUANT TO 11
              U.S.C. SECTIONS 364 AND 507(b), (III) GRANTING RELIEF
              FROM THE AUTOMATIC STAY PURSUANT TO 11 U.S.C. SECTION
                 362, AND (IV) AUTHORIZING ASSUMPTION OF RELATED
              AMENDED EXECUTORY CONTRACTS PURSUANT TO 11.U.S.C. 365

         Upon the motion (the "Motion") dated October 8, 2002 of EOTT Energy
         Operating Limited Partnership, a Delaware limited partnership ("EOTT
         OLP"), EOTT Energy Canada Limited Partnership, a Delaware limited
         partnership ("EOTT Canada"), EOTT Energy Liquids, L.P., a Delaware
         limited partnership ("EOTT Liquids"), EOTT Energy Pipeline Limited
         Partnership, a Delaware limited partnership ("EOTT Pipeline" and

<PAGE>

         together with EOTT OLP, EOTT Canada and EOTT Liquids, as debtors and
         debtors-in-possession herein (collectively, the "Borrowers"), EOTT
         Energy Partners, L.P, a Delaware limited partnership ("EOTT MLP") and
         EOTT Energy General Partner, L.L.C., a Delaware limited liability
         company ("EOTT GP" together with EOTT MLP, the "Guarantors" and,
         together with the Borrowers, the "Debtors") (A) seeking entry of first
         interim order ("First Interim Order") pursuant to sections 363(c)(2)
         and (e) of Title 11 of the United States Code, 11 U.S.C. Sections 101,
         et seq. (as amended, the "Bankruptcy Code") and Rule 4001(b)(i) of the
         Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), (i)
         authorizing the use of cash collateral of the Prepetition Agent and
         Prepetition Lenders (as defined below), (ii) granting security
         interests in and replacement liens on all of the Debtors' currently
         owned or after-acquired property and the proceeds thereof, as provided
         herein, in favor of (x) the Prepetition Agent, for the benefit of the
         Prepetition Lenders, to provide adequate protection for their interests
         in the Prepetition Collateral (as defined herein) and (y) SCTSC to
         provide adequate protection for its interests in the prepetition
         Receivables Collateral and the prepetition Commodities Collateral (both
         as defined herein), which security interests and liens will be junior
         to the Postpetition Liens (as defined herein) and senior to any and all
         other security interests and liens, except as provided herein, and
         subject to the Carve-Out (as defined below); (iii) granting SCTSC
         security interests in and liens on the Commodities Collateral and
         Receivables Collateral (both as defined herein) to provide adequate
         protection for its interests in the prepetition Receivables Collateral
         and the prepetition Commodities Collateral (both as defined herein),
         which security interests and liens will be senior to the Postpetition
         Liens and (iv) granting administrative superpriority claims in favor of
         SCTSC and the Prepetition Agent for the benefit of the Prepetition
         Lenders which will be junior to the Superpriority Claims

<PAGE>

         (as defined herein) but will have priority over any and all other
         administrative expenses, except as provided herein, and subject to the
         Carve-Out; (B) pending a second interim hearing on the Motion (the
         "Second Interim Hearing"), seeking entry of a second interim order (the
         "Second Interim Order") requesting this Court's authorization pursuant
         to sections 364(c)(1), 364(c)(2), 364(c)(3) and 364(d)(1) of the
         Bankruptcy Code Rules 2002, 4001(c) and 9014 of the Bankruptcy Rules
         for the Debtors, inter alia, (i) to obtain secured postpetition
         financing pursuant to (u) a Debtor In Possession Letter of Credit
         Agreement (the "SCB DIP LC Agreement")(2) by and among the Borrowers,
         Standard Chartered Bank ("SCB") as issuer (the "LC Issuer") of
         postpetition letters of credit (the "Letters of Credit") and as
         administrative agent (the "LC Agent") for itself and the participants
         in such Letters of Credit (the "LC Participants"), (v) an overdraft
         facility by and among the Borrowers and SCB and its affiliates (the
         "Overdraft Facility"), (w) the Debtor In Possession Term Loan Agreement
         (the "Lehman DIP Credit Agreement") by and among the Borrowers, Lehman
         Brothers, Inc. ("Lehman") as administrative agent (the "Term Lender
         Agent") on behalf of itself and the term lenders party thereto,
         including but not limited to Lehman Commercial Paper, Inc. (the "Term
         Lenders" together with the LC Participants and SCB and its affiliates
         under the Overdraft Facility, the "Lenders"), (x) the Amended and
         Restated Commodities Repurchase Agreement (the "Crude Oil Purchase
         Agreement"), by and between Standard Chartered Trade Services
         Corporation ("SCTSC") and EOTT OLP, (y) the Amended and Restated
         Receivables Purchase Agreement (the "Receivables Purchase Agreement,"
         together with the Crude Oil Purchase Agreement, the "SCTSC Purchase
         Agreements," together with the SCB DIP

----------
(2)      Capitalized terms not otherwise defined herein shall have the meaning
         ascribed to them in the SCB DIP LC Agreement.

<PAGE>

         LC Agreement and the Lehman DIP Credit Agreement, the "DIP
         Facilities"), by and among SCTSC and EOTT OLP, and (z) the
         intercreditor and security agreement (the "Intercreditor Agreement") by
         and among the Debtors, SCB, the LC Agent, the Term Lender Agent, the
         Lenders and SCTSC, under which SCB will act as collateral agent for
         SCTSC, the LC Agent, the Term Lender Agent and the Lenders under the
         DIP Facilities (the "Collateral Agent" together with the LC Agent and
         the Term Lender Agent, the "DIP Agents"), with substantially final
         forms of the foregoing agreements (except with respect to the Overdraft
         Facility) having been filed with the Court and made available to
         requesting parties on or before October 14, 2002, (the SCB DIP LC
         Agreement, the Overdraft Facility, the Lehman DIP Credit Agreement, the
         SCTSC Purchase Agreements, the Intercreditor Agreement and the other
         loan documents contemplated therein being collectively referred to
         herein as the "DIP Financing Documents"), (ii) to assume the SCTSC
         Purchase Agreements; (iii) to grant security interests in and liens on
         all of the Debtors' currently owned or after-acquired property and the
         proceeds thereof, other than Avoidance Actions, (the "DIP Collateral")
         to the Collateral Agent for the benefit of the DIP Agents, the Lenders
         and SCTSC, in order to secure the Debtors' obligations to them under
         the DIP Financing Documents, which security interests and liens will be
         senior to any and all other security interests and liens except as
         provided herein and in the Intercreditor Agreement and subject to the
         Carve-Out (the "Postpetition Liens"); (iv) to grant administrative
         superpriority claims in favor of the DIP Agents, the Lenders and SCTSC
         which will have priority over any and all administrative expenses,
         except as provided herein and in the Intercreditor Agreement and
         subject to the Carve-Out; and (v)

<PAGE>

         (a) to use a portion of the proceeds of the term loans provided
         pursuant to the Lehman DIP Credit Agreement (the "Term Loans") to repay
         the Prepetition Loans (as defined below), (b) to use the proceeds of,
         and the Letters of Credit issued under, the DIP Facilities to fund and
         support the Debtors' operations (including in the amount and as
         required pursuant to the settlement agreement between the Debtors and
         Enron Corp. and certain subsidiaries thereof), (c) to repay their
         reimbursement obligations under any Prepetition Letters of Credit
         outstanding (as defined below) and cause new or replacement Letters of
         Credit to be issued for the Debtors' account, which new or replacement
         Letters of Credit shall be considered and treated as postpetition
         obligations of the Debtors, and (d) to enter into the Commodities
         Stipulation (as defined herein); and (C) in accordance with Bankruptcy
         Rule 4001(c)(2), requesting this Court to schedule a Second Interim
         Hearing and a final hearing (the "Final Hearing") to consider the entry
         of a second interim order (the "Second Interim Order") and a final
         order (the "Final Order") authorizing the DIP Facilities on a second
         interim and final basis, and approve notice with respect thereto; and
         the Court having considered the Motion and the DIP Financing Documents;
         and, in accordance with Bankruptcy Rule 4001(c), requisite notice of
         the Motion, the First Interim Order and the Second Interim and Final
         Hearings having been provided; and a hearing to consider the interim
         relief requested in the Motion having been held and concluded (the
         "First Interim Hearing") on October 9, 2002; and, the First Interim
         Order having been entered on this Court's electronic docket on October
         11, 2002; and the Second Interim Hearing having been held before this
         Court on October 17, 2002; and all objections, if any, to the interim
         relief requested in the Motion having been withdrawn, resolved or
         overruled by the Court; and it appearing to the Court that the interim
         relief requested in the Motion is necessary to avoid immediate and
         irreparable

<PAGE>

         harm to the estates pending the Final Hearing and otherwise is in the
         best interests of the Debtors and their creditors and is essential for
         the continued operation of the Debtors' businesses; and upon
         consideration of the evidence presented or proffered at the First and
         Second Interim Hearings; and after due deliberation and consideration
         and good and sufficient cause appearing therefor

                  IT IS HEREBY FOUND that:

         On October 8, 2002 (the "Petition Date"), the Debtors each filed a
voluntary petition for relief with this Court under Chapter 11 of the Bankruptcy
Code (collectively, the "Chapter 11 Cases"). The Debtors are continuing in
possession of their property, and operating and managing their businesses, as
debtors-in-possession, pursuant to sections 1107 and 1108 of the Bankruptcy
Code.

         The Chapter 11 Cases have been consolidated for procedural purposes
only and are being jointly administered.

         This Court has jurisdiction over the Chapter 11 Cases pursuant to 28
U.S.C. Sections 157(b) and 1334. Consideration of the Motion presents a core
proceeding as defined in 28 U.S.C. Section 157(b)(2).

         Pursuant to the Second Amended and Restated Reimbursement, Loan and
Security Agreement, dated as of April 23, 2002, as amended (the "Prepetition
Credit Agreement"), among EOTT OLP, EOTT Canada, EOTT Liquids and EOTT Pipeline
(collectively, the "Prepetition Borrowers"), EOTT MLP and EOTT GP (collectively
the "Prepetition Guarantors"), the lenders party thereto (the "Prepetition
Lenders"), Standard Chartered Bank as administrative agent for the Prepetition
Lenders (in such capacity, the "Prepetition Agent") and issuer of prepetition
letters of credit thereunder (the "Prepetition LC Issuer"), the Prepetition
Lenders extended credit to the Prepetition Borrowers. (To the extent, if any,
that SCTSC is found to be a lender under

<PAGE>

either of the predecessor agreements to the SCTSC Purchase Agreements, SCTSC
shall also be considered a "Prepetition Lender".)

         As of the Petition Date, the Prepetition Lenders are owed approximately
$20,000,000 in revolving loan principal obligations incurred directly by the
Prepetition Borrowers, plus interest, fees and expenses thereon (the
"Prepetition Loans") and approximately $276,205,489.48 in reimbursement
obligations (either contingent, or fully due and payable) relating to letters of
credit issued and outstanding under the Prepetition Credit Agreement (the
"Prepetition Letters of Credit" and, together with the Prepetition Loans, the
"Prepetition Indebtedness"), the obligations of the Prepetition Borrowers in
respect thereof being guaranteed by the Prepetition Guarantors.

         To secure the Prepetition Indebtedness, the Prepetition Borrowers
granted to the Prepetition Agent for the benefit of the Prepetition Lenders
security interests and liens (collectively referred to herein as the
"Prepetition Liens") as follows: (i) a first-priority security interest in and
lien on substantially all of the Prepetition Borrowers' assets including,
without limitation, a substantial majority of the Prepetition Borrowers' and
Prepetition Guarantors' real property and fixtures and all goods (including
without limitation, equipment and inventory), deposit accounts, investment
property, accounts, chattel paper, instruments, documents, letter of credit
rights, commercial tort claims, insurance claims, supporting obligations and
liens, real estate interests and general intangibles of the Prepetition
Borrowers and the Prepetition Guarantors of any nature, whether then owned or
thereafter acquired and any proceeds, products, rents and profits of all of the
foregoing (the "Prepetition Collateral"), with priority over all other liens
except as otherwise provided in the Prepetition Credit Agreement or under
applicable non-bankruptcy law. The Prepetition Collateral includes property
constituting "cash collateral" as defined in section 363(a) of the Bankruptcy
Code ("Cash Collateral").

<PAGE>

         Pursuant to the Crude Oil Purchase Agreement, EOTT OLP has obligations
to SCTSC to repurchase certain commodities purchased by SCTSC from EOTT OLP.
Pursuant to the Receivables Purchase Agreement, under certain circumstances,
EOTT OLP has obligations to sell certain receivables to SCTSC at certain prices.
Under both SCTSC Purchase Agreements, EOTT OLP is obligated to pay interest,
yield, fees and collection costs or other costs to SCTSC in connection therewith
(all of the foregoing obligations, together with EOTT OLP's repurchase
obligations under the Crude Oil Purchase Agreement, collectively, the
"Prepetition Purchase Obligations").

         As a precautionary measure, the Prepetition Purchase Obligations are
secured by a perfected first-priority security interest and lien granted by EOTT
OLP to SCTSC, in and on (x) all receivables and contract rights purchased by
SCTSC under the Receivables Purchase Agreement and all proceeds related thereto
(the "Receivables Collateral") and (y) all commodities purchased by SCTSC but
not repurchased by the EOTT OLP under the Crude Oil Purchase Agreement, all
documents of title delivered to SCTSC pursuant thereto and all proceeds thereof
(the "Commodities Collateral").

         The Debtors will be provided thirty (30) days from the Petition Date to
assert any claims or commence any causes of action against the Prepetition
Agent, the Prepetition Lenders (including the Prepetition Agent's or Prepetition
Lenders' directors, officers, employees or agents) or SCTSC (including SCTSC's
directors, officers, employees or agents) to object to or challenge (x) the
validity, enforceability, extent, perfection or priority of the Prepetition
Liens in the Prepetition Collateral and SCTSC's liens in the Receivables
Collateral and the Commodities Collateral; (y) the validity, allowability,
priority, status or amount of the Prepetition Indebtedness and the Prepetition
Purchase Obligations; or (z) to assert any avoidance or subordination actions
with respect to the Prepetition Indebtedness and the Prepetition Purchase
Obligations; provided,

<PAGE>

however, that if the Debtors do not commence such an action or assert such a
claim within such 30-day period, the Prepetition Borrowers and the Prepetition
Guarantors will acknowledge and agree that (i) the Prepetition Liens and SCTSC's
liens on the Receivables Collateral and the Commodities Collateral are valid,
binding, enforceable and perfected liens with priority over all other liens
(other than the Postpetition Liens) except as otherwise provided in the
Prepetition Credit Agreement or under applicable non-bankruptcy law, and are not
subject to avoidance or subordination pursuant to the Bankruptcy Code or
applicable non-bankruptcy law; (ii) the Prepetition Indebtedness and the
Prepetition Purchase Obligations constitute legal, valid and binding obligations
of the Debtors, enforceable in accordance with the terms of the Prepetition
Credit Agreement and the SCTSC Purchase Agreements (other than in respect of the
stay of enforcement arising from section 362 of the Bankruptcy Code); (iii) no
offsets, defenses or counterclaims of any kind to the Prepetition Indebtedness
and the Prepetition Purchase Obligations exist, and no portion of the
Prepetition Indebtedness or the Prepetition Purchase Obligations is subject to
avoidance or subordination pursuant to the Bankruptcy Code or applicable
non-bankruptcy law; (iv) the Prepetition Borrowers and Prepetition Guarantors
have no claims or causes of action, including, without limitation, avoidance
actions under Chapter 5 of the Bankruptcy Code (the "Avoidance Actions") against
the Prepetition Agent or the Prepetition Lenders (including the Prepetition
Agent's or Prepetition Lenders' directors, officers, employees or agents) or
SCTSC (including SCTSC's directors, officers, employees or agents)); and (v) as
of the Petition Date, the Prepetition Indebtedness and the Prepetition Purchase
Obligations constitute allowed secured claims within the meaning of section 506
of the Bankruptcy Code in an amount that is not less than $276,205,489.48, plus
additional interest and fees, including, without limitation, attorneys' fees and
related expenses, and other charges owing in respect thereof.

<PAGE>

         Pursuant to sections 361, 362, 363 and 364 of the Bankruptcy Code, (a)
the Prepetition Agent and the Prepetition Lenders are entitled to adequate
protection of their interest in the Prepetition Collateral, including for the
Debtors' use of Cash Collateral, any diminution in the value of the Prepetition
Collateral (including Cash Collateral), resulting from the Debtors' use, sale or
lease of the Prepetition Collateral, the imposition of the automatic stay and
the priming of the Prepetition Liens as described below, and (b) SCTSC is
entitled to adequate protection of its interest in the Receivables Collateral
and the Commodities Collateral, including for the Debtors' use of Cash
Collateral, any diminution in the value of the Receivables Collateral and the
Commodities Collateral resulting from the Debtors' use, sale or lease of the
Receivables Collateral or the Commodities Collateral and the imposition of the
automatic stay. The DIP Facilities will enable the Debtors to continue operating
their businesses and thereby preserve the value of the Prepetition Collateral,
the Receivables Collateral and the Commodities Collateral.

         The Debtors operate one of the largest independent crude oil gathering
and marketing operations in North America and engage in interstate and
intrastate crude oil transportation, crude oil terminalling and storage
activities and refined petroleum products marketing. Prior to the Petition Date,
the Debtors used proceeds from the Prepetition Credit Agreement to purchase
crude oil and other inventory items for their marketing and pipeline operations
and otherwise to finance their business activities.

         An immediate need exists for the Debtors to obtain funds with which to
purchase inventory, continue their business operations, and administer and
preserve the value of their estates. Upon entry of the First Interim Order, the
Debtors were authorized to use Cash Collateral for the Specified Period as
defined in the First Interim Order up to an amount not to exceed $58,255,847.00.
Upon entry of this Second Interim Order, the Debtors' authority to use Cash
Collateral shall cease. The Debtors now seek authority to enter into the DIP
Facilities upon

<PAGE>

this Court's signing of this Second Interim DIP Order, failing which the Debtors
would suffer immediate and irreparable harm to estates. In the absence of the
DIP Facilities, the continued operation of the Debtors' businesses would not be
possible. The Debtors do not have sufficient available sources of working
capital and financing to operate their businesses in the ordinary course of
business or maintain their property in accordance with state and federal law
without the DIP Facilities. The Debtors' ability to maintain business
relationships with their vendors, suppliers and customers, to pay their
employees and otherwise finance their operations is essential to the Debtors'
continued viability.

         Given the Debtors' current financial condition, financing arrangements
and capital structure, the Debtors are unable to obtain financing from sources
other than the Lenders and SCTSC on terms more favorable than under the DIP
Facilities. The Debtors have been unable to obtain interim unsecured credit
solely under section 503(b)(1) of the Bankruptcy Code as an administrative
expense. The Debtors have been unable to obtain credit (i) having priority over
that of administrative expenses of the kind specified in sections 503(b) and
507(a) and (b) of the Bankruptcy Code, (ii) secured by a lien on property of the
estates that is not otherwise subject to a lien or (iii) secured solely by a
junior lien on property of the estates that is subject to a lien.

         Financing on a postpetition basis is not otherwise available without
(i) the granting to the Collateral Agent for the benefit of DIP Agents, the
Lenders and SCTSC of superpriority claims, perfected first-priority security
interests in, priming liens and junior liens, as provided below, on all of the
Debtors' assets (except Avoidance Actions) and (ii) the granting to the
Prepetition Agent and the Prepetition Lenders of adequate protection,
replacement liens and superpriority claims, pursuant to sections 361, 362, 363
and 364 of the Bankruptcy Code and in the DIP Financing Documents.

<PAGE>

         The Debtors are seeking authority to (a) enter into the DIP Facilities;
(b) assume the SCTSC Purchase Agreements; (c) use proceeds of the Term Loans to
repay the Prepetition Loans; (d) use the proceeds of, and Letters of Credit
issued under, the DIP Facilities to fund and support the Debtors' operations in
accordance with the Budget (as defined herein), as well as in the amount and as
required pursuant to the settlement agreement between the Debtors and Enron
Corp. and certain subsidiaries thereof, and (e) satisfy their reimbursement
obligations under any Prepetition Letters of Credit outstanding and cause new
and replacement letters of credit to be issued for the Debtors' account which
letters of credit shall thereupon be considered and treated as postpetition
obligations of the Debtors up to an amount not to exceed $325,000,000, all on
the terms described herein and in the DIP Financing Documents.

         In connection with the assumption of the Crude Oil Purchase Agreement,
the Debtors seek to stipulate with SCTSC that (1) all rights, title and interest
to the crude oil in the pipelines owned or used by EOTT OLP up to a maximum of
3,000,000 barrels on the date of such assumption belong to SCTSC, and (2)
notwithstanding that crude oil is injected into and released from such pipelines
from time to time after such assumption, all rights, title and interest to the
barrels of crude oil described in the preceding clause (1) shall be deemed to
belong to SCTSC, to the extent that such crude oil has not been repurchased by
EOTT OLP pursuant to the terms of the Crude Oil Purchase Agreement (the
"Commodities Stipulation").

         In light of (a) the Prepetition Agent's and the Prepetition Lenders'
agreement to the priming of the Prepetition Liens as provided herein and the
Carve-Out, (b) the DIP Agents' and the Lenders' agreement to provide necessary
financing to the Debtors and their agreement to the Carve-Out, and (c) the
agreement of SCTSC to the assumption of the SCTSC Purchase Agreements, the DIP
Agents, the Lenders, SCTSC, the Prepetition Agent, and the Prepetition

<PAGE>

Lenders are seeking a waiver of claims under section 506(c) of the Bankruptcy
Code and of any "equities of the case" claim under section 552(b) of the
Bankruptcy Code.

         The Lenders and SCTSC have indicated a willingness to provide financing
to the Debtors subject to (i) the entry of this Second Interim Order (ii) the
terms and conditions of the DIP Financing Documents and (iii) findings by the
Court that such financing is essential to the Debtors' estates, that the Lenders
and SCTSC will be providing such financing in good faith, and that the
Collateral Agent's (on behalf of the DIP Agents, the Lenders and SCTSC)
mortgages, security interests, liens, claims, superpriority claims and other
protections granted pursuant to this Second Interim Order, and the DIP
Facilities will not be affected by any subsequent reversal, modification,
vacatur or amendment of this Second Interim Order or any other order, as
provided in section 364(e) of the Bankruptcy Code.

         The terms of this Second Interim Order and the DIP Financing Documents
are fair and reasonable, and reflect the Debtors' exercise of prudent business
judgment consistent with their fiduciary duties. The extensions of credit
authorized herein are supported by reasonably equivalent value and fair
consideration and have been negotiated in good faith and at arm's length among
the Debtors, and the DIP Agents, the Lenders, the Prepetition Agents, the
Prepetition Lenders and SCTSC. Any credit extended, letters of credit issued or
loans made or funds advanced to pursuant to the DIP Financing Documents shall be
deemed to have been extended, issued, made, advanced or, as the case may be,
permitted to be used in good faith by the Lenders, the Prepetition Lenders and
SCTSC as required by, and within the meaning of, section 364(e) of the
Bankruptcy Code.

         Notice of the Second Interim Hearing and the Final Hearing and the
entry of this Second Interim Order has been properly provided to (i) the Office
of the United States Trustee, (ii) the holders of the twenty (20) largest
prepetition unsecured claims against the Debtors' estates, (iii)

<PAGE>

the Prepetition Agent, (iv) the DIP Agents, (v) the Collateral Agent, (vi)
counsel to the ad hoc committee of noteholders, (vii) SCTSC and (viii) those
parties that filed a request for service of documents. Notice of the Motion and
the relief requested thereby have been given in accordance with Bankruptcy Rule
4001, and is sufficient under the Bankruptcy Code, including, without
limitation, sections 102(a) and 364 of the Bankruptcy Code, and no other notice
need be given for entry of this Second Interim Order.

         Based upon the foregoing findings and conclusions, and upon the record
made before this Court at the First Interim Hearing and the Second Interim
Hearing, and good and sufficient cause appearing therefor

                  IT IS HEREBY ORDERED that:

                  1. The Motion is granted, subject to the terms and conditions
set forth in this Second Interim Order.

                           CASH COLLATERAL TERMINATION

                  2. Cessation of Cash Collateral Use. As indicated in the First
Interim Order, upon entry of this Second Interim Order, the authorization of the
Debtors to use the Cash Collateral of $58,255,847.00 shall, and hereby does,
cease.

     DIP FINANCING AUTHORIZATION AND ASSUMPTION OF SCTSC PURCHASE AGREEMENTS

                  3. Authorization of the Financing and the Documents. On or
before October 14, 2002, the Debtors filed and made available to all creditors
and parties in interest substantially final versions of the principal DIP
Financing Documents. Modifications made to the DIP

<PAGE>

Financing Documents subsequent to their filing with the Court on October 14,
2002, were not material and did not adversely affect the rights of creditors or
other parties in interest. The Debtors and Lenders are hereby authorized to make
such additional modifications to the DIP Financing Documents without further
order of the Court, provided that any such modifications are not material. The
Debtors are hereby expressly authorized, empowered and directed to complete,
execute and deliver the DIP Financing Documents and to perform their obligations
hereunder and thereunder (the "DIP Obligations") in accordance with, and subject
to, the terms of this Second Interim Order and the DIP Financing Documents. The
Debtors are hereby authorized and directed to pay the fees and other expenses
described in the DIP Financing Documents as such become due, including, without
limitation, agents' fees, facility fees, arranger fees, commitment fees, letter
of credit fees and the reasonable fees and disbursements of the DIP Agents' and
SCTSC's attorneys, financial advisers and accountants and as provided in the DIP
Financing Documents. Upon execution and delivery of the DIP Financing Documents,
they shall represent valid and binding obligations of the Debtors, enforceable
against each of the Debtors in accordance with their terms.

                  4. Assumption of SCTSC Purchase Agreement. In accordance with
sections 364, 365 and 549 of the Bankruptcy Code, the Debtors are hereby
expressly authorized, empowered and directed to assume the SCTSC Purchase
Agreements and to perform their obligations hereunder and thereunder, including,
without limitation, the payment of the fees and other expenses described in the
SCTSC Purchase Agreements as they become due. The automatic stay is hereby
modified to permit SCTSC to deposit to its account such fees, other expenses and
any other payments received from the Debtors in accordance with the terms of the
SCTSC Purchase Agreements, which payments are hereby authorized.

<PAGE>

                  5. Approval of Commodities Stipulation. EOTT OLP and SCTSC
hereby stipulate and agree as follows:

                  (a) All rights, title and interest to the crude oil in the
         pipelines owned or used by EOTT OLP, in the amount to be specified in
         the Crude Oil Purchase Agreement, up to a maximum of 3,000,000 barrels
         on the date of assumption of the Crude Oil Purchase Agreement by SCTSC,
         belong to SCTSC.

                  (b) Notwithstanding that crude oil is injected into and
         released from such pipelines from time to time after the date of
         assumption of the Crude Oil Purchase Agreement by SCTSC, all rights,
         title and interest to such specified barrels of crude oil in such
         pipelines shall be deemed to belong to SCTSC to the extent that such
         crude oil has not been repurchased by EOTT OLP pursuant to the terms of
         the Crude Oil Purchase Agreement.

                  (c) This Commodities Stipulation shall be binding on the
         employees, agents, successors and assigns of EOTT OLP, including any
         trustee appointed in any of these Chapter 11 Cases or superseding cases
         under Chapter 7 of the Bankruptcy Code, and on any person or entity
         appointed for purposes of implementing a plan of reorganization or
         resolving claims in any of these Chapter 11 Cases.

The Court hereby approves the Commodities Stipulation as part of this Second
Interim Order.

                  6. Drawings under the DIP Facilities. Subject to the terms and
conditions of the DIP Financing Documents, the Debtors are hereby authorized
through the Termination Declaration Date (a) to draw the full amount of the Term
Loans in an amount not to exceed $75,000,000, (b) to use proceeds of the Term
Loans in an amount not to exceed $40,000,000 to repay the Prepetition Loans, (c)
to use proceeds of, and Letters of Credit issued under, the DIP

<PAGE>

Facilities to fund and support the Debtors' operations in accordance with the
budget approved by this Court from time to time (the "Budget") (with any line
item variance not to exceed 10% and any total overall variance not to exceed 5%)
(including in the amount and as required pursuant to the settlement agreement
between the Debtors and Enron Corp. and certain subsidiaries thereof), (d) to
use the proceeds of the Overdraft Facility not to exceed $15,000,000 for cash
management services, and (e) to obtain Letters of Credit under the SCB DIP LC
Agreement in an amount not to exceed $325,000,000, inclusive of (i) outstanding
Prepetition Letters of Credit which upon entry of this Second Interim Order
shall be considered and treated as Letters of Credit issued under the SCB DIP LC
Agreement by SCB for the Debtors' account as postpetition obligations of the
Debtors and (ii) new Letters of Credit to be issued by SCB for the Debtors'
account as postpetition obligations of the Debtors. Clause (e)(i) of the
foregoing sentence is without prejudice to the estates' right to cause
disgorgement from the holders of the repaid Prepetition Indebtedness to the
extent, if any, that any of the Prepetition Indebtedness or any of the
Prepetition Liens is determined to be avoidable or undersecured in accordance
with and subject to paragraph 15, below.

                  7. DIP Obligations. The DIP Obligations include, without
limitation, all loans, advances, letter of credit reimbursement obligations,
repurchase obligations, overdraft obligations and any other indebtedness or
obligations, contingent or absolute, which may now or from time to time
hereafter be owing by the Debtors to any of the DIP Agents, the Lenders or SCTSC
under any of the DIP Financing Documents or hereunder, including, without
limitation, all principal and accrued interest, reimbursement obligations under
letters of credit, costs, and reasonable fees and expenses incurred in
connection therewith.

                  8. Superpriority Claims. In accordance with sections 364(c)(1)
and 507(b) of the Bankruptcy Code, subject to the Carve-Out and without
prejudice to the rights of the Debtors as

<PAGE>

set forth in paragraph 15, the DIP Obligations will constitute claims (the
"Superpriority Claims") with priority in payment over any and all administrative
expenses of the kinds specified or ordered pursuant to any provision of the
Bankruptcy Code, including, but not limited to, sections 105, 326, 328, 330,
331, 503(b), 506(c), 507(a), 507(b), 546(c), 726 (to the extent permitted by
law), 1113 and 1114 of the Bankruptcy Code and shall at all times be senior to
the rights of the Debtors, any successor trustee to the extent permitted by law,
or any other creditor in the Chapter 11 Cases. The relative priorities of the
Superpriority Claims as among the DIP Agents, the Lenders and SCTSC are set
forth in the Intercreditor Agreement; however, the Superpriority Claims shall
have priority over the Adequate Protection Superpriority Claims provided for
below.

                  9. Postpetition Liens. As security for the DIP Obligations,
each of the Debtors is hereby authorized and directed to grant, and hereby
grants, to the Collateral Agent, for the benefit of the DIP Agents, the Lenders
and SCTSC, the Postpetition Liens in the nature of perfected, valid, binding and
enforceable security interests and liens, subject to the Carve-Out and without
prejudice to the rights of the Debtors pursuant to paragraph 15, below, as
follows:

                  (a) pursuant to section 364(c)(2) of the Bankruptcy Code, a
                      perfected first-priority security interest in and lien on
                      the DIP Collateral, owned as of the Petition Date or
                      thereafter acquired, that was not encumbered as of the
                      Petition Date; and

                  (b) pursuant to section 364(c)(3) of the Bankruptcy Code, a
                      perfected security interest in and lien on all other DIP
                      Collateral, owned as of the Petition Date or thereafter
                      acquired, which security interest and lien shall, except
                      as provided in clause (c) below, be junior in priority to:

                           (i)      any other security interest in or lien on
                                    such assets to the extent that, as of the
                                    Petition Date, such other security interest
                                    or lien was valid, perfected and not subject
                                    to avoidance and senior to the Prepetition
                                    Liens, and

<PAGE>

                           (ii)     any security interest in or lien on proceeds
                                    or products of, or accessions to, assets
                                    subject to a security interest or lien
                                    referred to in the foregoing clause (i) and
                                    arising or created after the Petition Date
                                    to the extent that (A) such security
                                    interest in or lien on the proceeds,
                                    products or accessions would have been
                                    valid, perfected and not subject to
                                    avoidance if the proceeds, products or
                                    accessions had arisen or been created
                                    immediately prior to the commencement of
                                    these Chapter 11 Cases and (B) such security
                                    interest in or lien on the proceeds,
                                    products or accessions would be entitled,
                                    under applicable non-bankruptcy law, to
                                    priority over any security interest in or
                                    lien on the proceeds, products or accessions
                                    securing the Prepetition Indebtedness; and

                  (c) pursuant to section 364(d)(1) of the Bankruptcy Code, the
                      security interest and lien referred to in clause (b) above
                      shall be senior in priority to the Prepetition Liens and
                      to any security interests and liens to which the
                      Prepetition Liens are senior in priority.

The Postpetition Liens will not be subject to any security interest or lien
which is avoided and preserved for the benefit of the Debtors' estates under
section 551 of the Bankruptcy Code, and the Postpetition Liens will not be
subordinated to or made pari passu with any other lien under section 364(d) of
the Bankruptcy Code or otherwise. Receiving the benefits of the Postpetition
Liens will not make the Collateral Agent, the DIP Agents, the Lenders or SCTSC
responsible for any obligations or liabilities of the Prepetition Borrowers, the
Prepetition Guarantors or the Debtors with respect to the DIP Collateral,
including without limitation any obligations or liabilities for environmental
remediation. The relative priorities of the benefits of the Postpetition Liens
as among the DIP Agents, the Lenders and SCTSC are hereby ordered to be as set
forth in the Intercreditor Agreement.

   PROVISIONS APPLICABLE TO BOTH THE AUTHORIZED USE OF CASH COLLATERAL AND THE
                   PROPOSED FINAL DIP FINANCING AUTHORIZATION

                  10. Section 506(c) Waiver. The Debtors shall not assert a
claim under section 506(c) of the Bankruptcy Code for any costs and expenses
incurred in connection with the preservation, protection or enhancement of, or
realization by the DIP Agents, the Lenders,

<PAGE>

SCTSC, the Prepetition Agents or the Prepetition Lenders upon, the DIP
Collateral, the Prepetition Collateral, the Receivables Collateral, the
Commodities Collateral or the collateral subject to the liens that secure the
Adequate Protection Obligations or for any expenses of the administration of the
estate. The DIP Agents, the Lenders and SCTSC shall not be subject to the
equitable doctrine of "marshalling" or any other similar doctrine with respect
to any DIP Collateral.

                  11. Priority of Superpriority Claims. No cost or expense of
administration under sections 105, 364(c)(1), 503(b), 506(c), 507(b), 726 (to
the extent permitted by law), 1113, 1114 or otherwise of the Bankruptcy Code,
shall be senior to, equal to, or pari passu with the Superpriority Claims,
subject only to the Carve-Out.

                  12. Carve-Out. As used in this Second Interim Order,
"Carve-Out" means, at any time of determination, the sum of (a) allowed
administrative expenses payable pursuant to 28 U.S.C. Section 1930(a)(6) and (b)
Priority Professional Expenses (as defined below), subject to the Priority
Expense Cap (as defined below). "Priority Professional Expenses" means allowed
fees, costs and reasonable expenses of professionals retained by the Debtors and
the official committee of unsecured creditors (the "Committee") or any official
committee of noteholders in the Chapter 11 Cases pursuant to sections 327 and
1103 of the Bankruptcy Code, but shall not include fees, costs and expenses of
third-party professionals employed by the members of the Committee. "Priority
Expense Cap" means upon the occurrence of the Termination Declaration Date, all
unpaid Priority Professional Expenses (including holdbacks) up to an aggregate
of $2,000,000. With respect to clause (b) above, Priority Professional Expenses
shall not include fees or expenses incurred by any Person, including the
Debtors, the Committee or any committee of noteholders, in (i) preventing,
hindering or delaying the Lenders', the DIP Agents' or SCTSC's enforcement or
realization upon any of the DIP Collateral, Receivables Collateral or

<PAGE>

Commodities Collateral once an Event of Default has occurred, (ii) using or
seeking to use Cash Collateral or selling DIP Collateral, Receivables Collateral
or Commodities Collateral without the DIP Agents' and SCTSC's consent, except as
authorized herein, (iii) incurring indebtedness without the DIP Agents' and
SCTSC's consent, (iv) objecting to or contesting in any manner, or raising any
defenses to, the validity, extent, amount, perfection, priority or
enforceability of the Prepetition Indebtedness or the DIP Obligations or any
mortgages, liens or security interests with respect thereto or any other rights
or interests of the DIP Agents, the Lenders and SCTSC, or in asserting any
claims or causes of action, including, without limitation, any Avoidance Actions
or requests for equitable subordination, against the DIP Agents, the Lenders,
SCTSC, the Prepetition Agent or the Prepetition Lenders, (v) objecting to or
contesting in any manner, or raising any defenses to, the validity, or
enforceability of the SCTSC Purchase Agreements or the amounts due SCTSC
thereunder, or (vi) investigating the validity, enforceability, extent,
perfection and priority of the Prepetition Liens or the validity or
enforceability of the SCTSC Purchase Agreements if another Person has already
commenced or conducted an investigation of claims, causes of action and
equitable theories for relief against the Prepetition Agent, the Prepetition
Lenders of SCTSC, and claims and causes of action challenging the validity,
enforceability, extent, perfection and priority of the Prepetition Liens or the
liens on the Commodities Collateral and the Receivables Collateral. The
exclusion from Priority Professional Expenses shall not include the first
$75,000 in expenses incurred by the Debtors (or an authorized substitute for the
Debtors if the Debtors are for some reason unable to conduct an investigation)
in conducting an investigation within 30 days following the Petition Date, of
claims, causes of action or theories for litigation regarding (a) the validity,
enforceability, perfection or priority of the Prepetition Liens in the
Prepetition Collateral, (b) the validity, allowability, priority, status or
amount of the Prepetition Indebtedness or (c) the validity and

<PAGE>

enforceability of the SCTSC Purchase Agreements; provided, however, that any
expenses in excess of $75,000, or any expenses incurred by a Person in
conducting such an investigation when one has already been conducted or is
ongoing shall be excluded from Priority Professional Expenses. The Carve-Out
shall not apply to the liens securing the SCTSC Purchase Agreements, the
Receivables Collateral and the Commodities Collateral.

                  13. Permission to Pay Compensation. Nothing herein shall be
construed as consent to the allowance of any Priority Professional Expenses or
shall affect the right of the DIP Agents, the Lenders, SCTSC, the Prepetition
Agent or the Prepetition Lenders to object to the allowance and payment of such
expenses. Prior to the Termination Declaration Date, the Debtors shall be
permitted to pay compensation and reimbursement of expenses (other than those
excluded from Priority Professional Expenses) authorized to be paid under
sections 330 and 331 of the Bankruptcy Code or otherwise pursuant to an order of
this Court, as the same may be due and payable, and such payments shall not
reduce the Carve-Out.

                  14. Adequate Protection. (A) To the extent appropriate and
necessary, as adequate protection of their interest in the Prepetition
Collateral, including for any diminution in the value of the Prepetition
Collateral resulting from the Debtors' use, sale or lease of the Prepetition
Collateral, the imposition of the automatic stay, the priming of the Prepetition
Liens and the Prepetition Agent's and the Prepetition Lenders' consent to the
Carve-Out, the Prepetition Agents and Prepetition Lenders are hereby granted (i)
monthly cash payments comprised of interest on the Prepetition Loans, advances
and letter of credit reimbursement obligations, letter of credit fees, accrued
and unpaid fees, expenses and any out-of-pocket expense reimbursements owing on
or after the Petition Date to the Prepetition Agent under the Prepetition Credit
Agreement, until such time as all Prepetition Indebtedness is indefeasibly paid
in full, provided that no Event of Default has occurred and is continuing under
the SCB DIP LC

<PAGE>

Agreement or the Lehman DIP Credit Agreement; and (ii) Adequate Protection Liens
in the form of additional and replacement security interests in and liens on the
DIP Collateral and Adequate Protection Superpriority Claims in the form of
superpriority claims equivalent in scope to those granted to the DIP Agents and
the Lenders under the DIP Facilities and this Second Interim Order, such
Adequate Protection Liens and Adequate Protection Superpriority Claims being
junior only to (x) the Postpetition Liens and Superpriority Claims granted in
this Second Interim Order with respect to the DIP Obligations, and (y) any
perfected and non-avoidable security interests and liens to which the
Postpetition Liens are junior, in all cases subject to the Carve-Out; and (B) to
the extent appropriate and necessary, as adequate protection of its interest in
the prepetition Receivables Collateral and the prepetition Commodities
Collateral, including for any diminution in the value of the prepetition
Receivables Collateral and the prepetition Commodities Collateral resulting from
the Debtors' use, sale or lease of the prepetition Receivables Collateral or the
prepetition Commodities Collateral and the imposition of the automatic stay,
SCTSC is hereby granted (i) Adequate Protection Liens in the form of additional
and replacement security interests in and liens on the DIP Collateral and
Adequate Protection Superpriority Claims in the form of superpriority claims
equivalent in scope to those granted to the DIP Agents and the Lenders under the
DIP Facilities and this Second Interim Order, such Adequate Protection Liens and
Adequate Protection Superpriority Claims being junior only to (x) the
Postpetition Liens and Superpriority Claims granted in this Second Interim Order
with respect to the DIP Obligations, and (y) any perfected and non-avoidable
security interests and liens to which the Postpetition Liens are junior; and
(ii) the Adequate Protection Receivables Lien and the Adequate Protection
Commodities Lien such Adequate Protection Receivables Lien and Adequate
Protection Commodities Lien being junior only to the Postpetition Liens and
Superpriority Claims granted in this Second Interim Order with respect to the
DIP Obligations.

<PAGE>

                  15. Debtors' Right to Challenge Liens. Nothing in this Order
or the DIP Financing Documents shall prejudice the rights of the Debtors to
object to or challenge (a) the validity, enforceability, extent, perfection or
priority of the Prepetition Liens in the Prepetition Collateral and SCTSC's
prepetition liens in the Receivables Collateral and the Commodities Collateral,
or (b) the validity, allowability, priority, status or amount of the Prepetition
Indebtedness and the Prepetition Purchase Obligations; provided, however, that
unless the Debtors commence, as appropriate, a contested matter or adversary
proceeding raising such objection or challenge within 30 days after the Petition
Date, all such challenges and objections shall be forever waived, and the
Prepetition Indebtedness and the Prepetition Purchase Obligations shall be
allowed as secured claims within the meaning of section 506 of the Bankruptcy
Code for all purposes in connection with the Chapter 11 Cases and as set forth
in this Second Interim Order. No such period of limitation shall be extended
without the written consent of SCB and SCTSC. Thereafter, any and all objections
or challenges (including, but not limited to, those under sections 544, 547
and/or 548 of the Bankruptcy Code), by any party (including, without limitation,
the Committee, any committee of noteholders and any Chapter 11 or Chapter 7
trustee appointed herein) to the validity, allowability, enforceability,
sufficiency, extent, perfection, status or priority, or seeking the avoidance or
equitable subordination of the Prepetition Liens, the Prepetition Indebtedness
or any payments thereon, and the Prepetition Purchase Obligations shall be
forever barred. Notwithstanding the foregoing, for the avoidance of doubt, the
Prepetition Liens shall not have priority over other liens to the extent so
provided in the Prepetition Credit Agreement or under applicable non-bankruptcy
law.

                  16. Obligation to Advance Funds. The DIP Agents and Lenders
shall have no obligation to make any loan or advance or issue any Letters of
Credit or Term Loans under the

<PAGE>

DIP Facilities unless the conditions precedent to the making of such Term Loan
or advance or issuing of such DIP LC under the DIP Financing Documents are
satisfied.

                  17. Use of Proceeds. From and after the Petition Date, the
Debtors shall use the proceeds of the loans and advances pursuant to the DIP
Facilities, and the Debtors shall request letters of credit to be issued,
extended or renewed, only for the purposes specifically set forth in the DIP
Financing Documents.

                  18. Perfection of Liens Granted by Second Interim Order. The
security interests, liens and priority granted to the Collateral Agent on behalf
of the DIP Agents, the Lenders and SCTSC, to the Prepetition Agent on behalf of
itself and the Prepetition Lenders and to SCTSC pursuant to this Second Interim
Order and the DIP Financing Documents shall be fully perfected by operation of
law upon execution of this Second Interim Order by the Court such that no
additional steps need be taken to perfect the security interests and liens or to
insure the priority thereof. None of the Collateral Agent, the Prepetition Agent
or SCTSC is required to obtain or file financing statements, mortgages, bank
account control agreements, amendments, notices of lien or similar instruments
in any jurisdiction or effect any other action to attach, perfect or establish
the priority of the Postpetition Liens and Adequate Protection Liens granted
under this Second Interim Order and the DIP Financing Documents. Notwithstanding
the foregoing, the Collateral Agent, SCTSC or the Prepetition Agent may, in its
or their sole discretion, obtain and file such financing statements, mortgages,
bank account control agreements, amendments, notices of liens and other similar
documents, and is hereby granted relief from the automatic stay contained in
section 362 of the Bankruptcy Code in order to do so. The Debtors shall execute
and deliver to the Collateral Agent, SCTSC or the Prepetition Agent all such
financing statements, mortgages, bank account control agreements, amendments,
notices and other documents as the Collateral Agent, SCTSC or the Prepetition
Agent may reasonably request to

<PAGE>

evidence, confirm, validate or perfect, or to insure the contemplated priority
of the Postpetition Liens or the Adequate Protection Liens granted pursuant
hereto and the DIP Financing Documents.

                  19. Rights of Access to Information. Without limiting the
rights of access and information afforded the DIP Agents and the Lenders under
the DIP Financing Documents, the Debtors shall be and hereby are required to
afford representatives, agents and/or employees of the DIP Agents and the
Lenders access to the Debtors' premises and their personnel and records, in
whatever form maintained, in accordance with the DIP Financing Documents and
shall, and hereby are directed to, cooperate, consult with, and provide to such
persons all such non-privileged information and information not subject to a
binding confidentiality agreement.

                  20. "Equities of the Case". No person may assert an "equities
of the case" claim under section 552(b) of the Bankruptcy Code against the
Prepetition Agent, the Prepetition Lenders or SCTSC with respect to proceeds,
product, offspring or profits of the Prepetition Collateral.

                  21. Automatic Modification of Automatic Stay. The automatic
stay of section 362(a) of the Bankruptcy Code shall be, and it hereby is,
modified to the extent necessary to permit the DIP Agents for the sole benefit
of themselves, SCTSC and the Lenders, and the Prepetition Agent for the sole
benefit of the Prepetition Lenders, and SCTSC to receive, collect and apply
payments and proceeds in respect of the DIP Collateral, the Prepetition
Collateral, the Commodities Collateral and the Receivables Collateral and any
collateral subject to Adequate Protection Liens in accordance with the terms and
provisions of this Order and the DIP Financing Documents.

                  22. DIP Obligations Automatically Due and Payable. The DIP
Obligations shall be due and payable, without notice or demand, on the
Termination Declaration Date. Any

<PAGE>

Letter of Credit outstanding on the Termination Declaration Date that is not
replaced shall be cash collateralized in an amount equal to a percentage of the
maximum drawing amount, which percentage shall be acceptable to the LC Agent.

                  23. Waiting Period. As more fully described in section 3.2(d)
of the Intercreditor Agreement, a waiting period of up to ten business days
shall occur when more than $15,000,000 in Letters of Credit are drawn during any
one month. As provided in section 3.2(d) of the Intercreditor Agreement, during
such waiting period, certain duties of the Lenders and SCTSC shall be suspended
(including, among others, the obligation of SCB to issue Letters of Credit or
otherwise extend credit under the DIP Financing Documents and the obligation of
SCTSC to make payments under the Purchase Agreements) and the Debtors' access to
cash shall be restricted.

                  24. Events of Default. As long as any portion of the DIP
Obligations remains unpaid or any DIP Financing Document remains in effect, in
addition to events of default which occur under the DIP Financing Documents, it
shall also constitute an event of default if (a) there shall be entered any
order dismissing any of the Chapter 11 Cases or converting any of the Chapter 11
Cases to a case under Chapter 7 of the Bankruptcy Code; (b) there shall be
entered in any of the Chapter 11 Cases or any subsequent Chapter 7 case any
order which authorizes under any section of the Bankruptcy Code, including
sections 105 or 364 of the Bankruptcy Code, (i) the granting of security
interest in or any lien and any property of the Debtors in favor of any party
(other than liens granted pursuant to this Second Interim Order or otherwise
permitted herein) or (ii) the obtaining of credit or the incurring of
indebtedness that is entitled to superpriority administrative status, in either
case equal or superior to the Superpriority Claims; (c) the appointment of a
Chapter 11 trustee or examiner with expanded powers; or (d) the Debtors seek any
of the foregoing relief unless, in connection with any transaction cited in
clause

<PAGE>

(b) of this paragraph 24, such order requires that the DIP Obligations be
indefeasibly paid in full first (including cash collateralization of all
reimbursement obligations in respect of Letters of Credit) and, as to clauses
(a) and (c) hereof, without the prior written consent of the DIP Agents, the
requisite Lenders and SCTSC.

                  25. Remedies Upon Events of Default. Upon the occurrence of an
Event of Default (under any of the First Interim or Second Interim Orders or
pursuant to the DIP Facilities), each of the DIP Agents and SCTSC may (subject
to the Intercreditor Agreement) declare all DIP Obligations owing under the
applicable DIP Facilities to be immediately due and payable and may declare a
termination of any further commitment to extend credit to the Borrowers to the
extent any such commitment remains. Upon the declaration of an Event of Default
(under any of the First Interim or Second Interim Orders or pursuant to the DIP
Facilities) or termination of commitment under the SCB DIP LC Agreement and
acceleration of the DIP Obligations by any DIP Agent, the obligations of the
Debtors to SCTSC under the Purchase Agreements and the Adequate Protection
Obligations described in paragraph 14 with respect to the Prepetition Lenders
and SCTSC shall be immediately due and payable and the Debtors' right to use
cash collateral shall cease. Similarly, upon SCTSC's declaration of an event of
default and acceleration of EOTT OLP's obligations under the Purchase
Agreements, the obligations of the Debtors to the DIP Agents and the Lenders
under the DIP Loan Documents and the Adequate Protection Obligations described
in paragraph 13 with respect to SCTSC and the Prepetition Lenders shall be
immediately due and payable and the Debtors' right to use cash collateral shall
cease. Upon the occurrence of an Event of Default and following the giving of
five business days' notice to the Debtors, the Committee, and the United States
Trustee, and subject to the terms and provisions with respect to remedies
contained in the Intercreditor Agreement as between the Lenders and SCTSC, the
DIP Agents shall have immediate relief

<PAGE>

from the automatic stay and may foreclose on all or any portion of the DIP
Collateral, as permitted by applicable non-bankruptcy law (including exercise of
rights of set-off and maintenance of cash collateral in an amount equal to a
percentage of all undrawn Letters of Credit, which percentage shall be
acceptable to the LC Agent). During such five-business-day notice period, the
Debtors shall be entitled to an emergency hearing with this Court for the sole
purposes of contesting whether an Event of Default has occurred, but the Debtors
shall have no right to seek to use cash collateral of the Lenders except for the
payment of payroll and payroll-related expenses. Unless, during such period,
this Court determines that an Event of Default has not occurred, the automatic
stay, as to the Lenders and the DIP Agents, shall automatically terminate at the
end of such notice period. In the event that during such notice period this
Court finds that an Event of Default has not in fact occurred, the rights and
obligations of the DIP Agents, Lenders, SCTSC, the Prepetition Agent and
Prepetition Lenders hereunder shall continue in full force and effect.

                  26. Modification of Second Interim Order. The Debtors shall
not seek or consent to, directly or indirectly, (a) any modification, stay,
vacation or amendment to this Second Interim Order; (b) any order allowing use
of cash collateral, except for the payment of payroll and payroll-related
expenses, of the Prepetition Lenders and the Lenders without the Prepetition
Agent's and DIP Agents' prior written consent; (c) a priority claim for any
administrative expense or unsecured claim against the Debtors (now existing or
hereafter arising of any kind or nature whatsoever, including without limitation
any administrative expense of the kind specified in sections 503(b), 506(c) or
507(b) of the Bankruptcy Code) equal or superior to the Superpriority Claims or
the Adequate Protection Superpriority Claims, other than the Carve-Out; or (d)
any lien on any of the DIP Collateral with priority equal or superior to the
Postpetition Liens or the Adequate Protection Liens, except as specifically
provided in the DIP Facilities.

<PAGE>

                  27. Indemnification. Subject to paragraph 15, the Debtors
shall indemnify and hold harmless the DIP Agents, SCTSC, the Lenders and their
respective shareholders, directors, agents, officers, subsidiaries and
affiliates, successors and assigns from and against any and all claims, actions
and suits, whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and reasonable expenses of every nature and
character arising out of the DIP Facilities or any of the other DIP Financing
Documents or the transactions contemplated thereby, pursuant to the terms of the
DIP Financing Documents and as further described therein.

                  28. Subject to paragraph 15, the Debtors shall indemnify and
hold harmless SCTSC and its shareholders, directors, agents, officers,
subsidiaries and affiliates, successors and assigns from and against any and all
claims, actions and suits, whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and reasonable expenses of every nature
and character arising out of the assumption of the SCTSC Purchase Agreements or
the transactions contemplated thereby, pursuant to the terms of the SCTSC
Purchase Agreements and as further described therein.

                  29. The provisions of this Second Interim Order shall be
binding upon and inure to the benefit of the DIP Agents, the Lenders, the
Prepetition Agent, the Prepetition Lenders, SCTSC, the Debtors and their
respective successors and assigns (including any trustee or other fiduciary
hereinafter appointed as a legal representative of the Debtors or with respect
to the property of the estate of the Debtors) whether in these Chapter 11 Cases,
in any subsequent cases under Chapter 7 of the Bankruptcy Code or upon dismissal
of any such Chapter 11 or Chapter 7 cases.

                  30. Good Faith under Section 364(e) of the Bankruptcy Code.
Based on the findings set forth in paragraphs Q and R of this Second Interim
Order and to the extent provided under section 364(e) of the Bankruptcy Code,
which is applicable to the DIP Facilities

<PAGE>

contemplated by this Second Interim Order, in the event any or all of the
provisions of this Second Interim Order are hereafter modified, amended or
vacated by a subsequent order of this or any other Court, no such modification,
amendment or vacation shall affect the validity and enforceability of any
advances made hereunder or lien or priority authorized or created hereby.
Notwithstanding any such modification, amendment or vacation, any (i) claim,
including without limitation Superpriority Claims and Adequate Protection
Superpriority Claims, or (ii) lien, including without limitation, Postpetition
Liens and Adequate Protection Liens hereunder arising prior to the effective
date of such modification, amendment or vacation shall be governed in all
respects by the original provisions of this Second Interim Order, and the DIP
Agents, the Lenders, SCTSC, the Prepetition Agent and the Prepetition Lenders,
as the case may be, shall be entitled to all of the rights, remedies, privileges
and benefits thereof.

                  31. Negative Notice for Amendments to DIP Financing Documents.
After consultation with the Committee, any amendment to the provisions of the
DIP Financing Documents which makes other substantive changes to the DIP
Financing Documents shall be made on fifteen (15) days' negative notice to all
parties which have entered notices of appearance in these Chapter 11 Cases under
Bankruptcy Rule 2002.

                  32. Survival of Provisions in Second Interim Order. The
provisions of this Second Interim Order and any actions taken pursuant hereto
shall survive entry of any order which may be entered (a) confirming any plan of
reorganization (a "Plan") in any of these Chapter 11 Cases, (b) converting any
of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code, or (c)
dismissing any of the Chapter 11 Cases, and the terms and provisions of this
Second Interim Order as well as the Superpriority Claims and Postpetition Liens
granted pursuant to this Second Interim Order and the DIP Facilities and the
Adequate Protection Liens and Adequate Protection Superpriority Claims shall
continue in full force and effect

<PAGE>

notwithstanding the entry of such order, and such Superpriority Claims,
Postpetition Liens, Adequate Protection Liens and Adequate Protection
Superpriority Claims shall maintain their priority as provided by this Second
Interim Order and as set forth in the Intercreditor Agreement until all the
obligations of the Debtors to the Agents, the Lenders, SCTSC, the Prepetition
Lenders and the Prepetition Agents pursuant to the DIP Financing Documents and
this Second Interim Order are indefeasibly paid in full and discharged;
provided, however, that the Superpriority Claims and Adequate Protection
Superpriority Claims shall not survive dismissal of these Chapter 11 Cases. The
DIP Obligations shall not be discharged by the entry of an order confirming a
Plan, the Debtors having waived such discharge. Without the consent of the DIP
Agents, none of the Debtors shall propose or support any Plan that is not
conditioned upon the payment in full in cash, on or prior to the earlier to
occur of (i) the effective date of such Plan and (ii) the Termination
Declaration Date, of all of the DIP Obligations, nor shall any of the Debtors
propose or support any sale under section 363 of the Bankruptcy Code without the
express consent of the Dip Agents, the Lenders and SCTSC, which is not
conditioned upon the payment in full in cash of all the DIP Obligations at
closing.

                  33. Joint and Several DIP Obligations. The DIP Obligations of
the Debtors hereunder and under the DIP Financing Documents shall be joint and
several, with each Debtor that is a secondary obligor waiving all suretyship
defenses.

                  34. Consistency of Second Interim Order with DIP Financing
Documents. The DIP Financing Documents and this Second Interim Order shall be
construed consistently with each other, but to the extent there are provisions
in the DIP Financing Documents that are irreconcilably inconsistent with this
Second Interim Order, the provisions of this Second Interim Order shall control.

<PAGE>

                  35. No Waiver. Notwithstanding anything herein, the entry of
this Second Interim Order is without prejudice to, and does not constitute a
waiver of, expressly or implicitly, or otherwise impair (a) any of the rights of
the DIP Agents, the Lenders, SCTSC, the Prepetition Agent or the Prepetition
Lenders under the Bankruptcy Code or under non-bankruptcy law, including,
without limitation, the right of the DIP Agents, the Lenders, SCTSC, the
Prepetition Agent or the Prepetition Lenders to (i) request modification of the
automatic stay of section 362 of the Bankruptcy Code, (ii) request dismissal of
any of the Chapter 11 Cases, conversion of any of the Chapter 11 Cases to cases
under Chapter 7, or appointment of a Chapter 11 trustee or examiner with
expanded powers, or (iii) propose, subject to the provisions of section 1121 of
the Bankruptcy Code, a Chapter 11 plan or plans or (b) any of the rights, claims
or privileges (whether legal, equitable or otherwise) of the DIP Agents, the
Lenders, SCTSC, the Prepetition Agent or the Prepetition Lenders.

                  36. Notice of Final Hearing. Notice of the Final Hearing has
been given. The Final Hearing to consider the Final Order approving the DIP
Facilities is scheduled for October 24, 2002, at 2:00 p.m. at the United States
Bankruptcy Court, Corpus, Christi, Texas (the "Bankruptcy Court"). On or before
October 21, 2002, the Debtors shall serve, by United States mail, first-class
postage prepaid, notice of the entry of this Second Interim Order on: (a) the
parties having been given notice of the Second Interim Hearing; (b) any party
which has filed prior to such date a request for notices with this Court; (c)
counsel for the Committee, if any; and (d) the parties on the official service
list.

                  37. Nunc Pro Tunc Relief. This Second Interim Order shall
constitute findings of fact and conclusions of law pursuant to Bankruptcy Rule
7052 and shall take effect and be fully enforceable nunc pro tunc to the
Petition Date immediately upon execution thereof; provided, however, that
notwithstanding the provisions of this Second Interim Order, the Court shall not
be

<PAGE>

precluded from entering a Final Order inconsistent with the provisions herein
subject to the protection of section 364(e) of the Bankruptcy Code in favor of
the DIP Agents, the Lenders and SCTSC with respect to monies advanced and
letters of credit issued during the Interim period.

                  38. Jurisdiction. The Court has and will retain jurisdiction
to enforce this Second Interim Order according to its terms.

Dated:   October 17, 2002

                  Houston, Texas

                                             /s/ Judge Richard S. Schmidt
                                             --------------------------------
                                             UNITED STATES BANKRUPTCY JUDGE

<PAGE>

                                   SCHEDULE K

                               LEASE VOLUME REPORT

                             CRUDE OIL LEASE VOLUMES

                                VOLUMES BY REGION

<Table>
<Caption>
        REGION                                        MONTH
        ------                                        -----

<S>                                                   <C>
MID CONTINENT

GULF COAST

ROCKIES

WEST TEXAS

CANADA

  TOTAL BARRELS

  TOTAL BARRELS PER DAY
</Table><PAGE>
                                                                    EXHIBIT 10.5
================================================================================

                              DEBTOR IN POSSESSION
                               TERM LOAN AGREEMENT

                          dated as of October 18, 2002

                                      among

                   EOTT ENERGY OPERATING LIMITED PARTNERSHIP,

                     EOTT ENERGY CANADA LIMITED PARTNERSHIP,

                            EOTT ENERGY LIQUIDS, L.P.

                                       and

                    EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,

    as debtors and debtors in possession and as joint and several Borrowers,

                           EOTT ENERGY PARTNERS, L.P.

                                       and

                       EOTT ENERGY GENERAL PARTNER, L.L.C.

             as debtors and debtors in possession and as Guarantors,

                              LEHMAN BROTHERS INC.,

                              as Term Lender Agent

                                       and

                          THE TERM LENDERS PARTY HERETO

================================================================================

<PAGE>

                                TABLE OF CONTENTS
<Table>
<Caption>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
DEBTOR IN POSSESSION TERM LOAN AGREEMENT..........................................................................1

1.       DEFINITIONS AND RULES OF INTERPRETATION..................................................................3

2.       THE TERM LOANS..........................................................................................20

         (a)      Commitment to Lend; Notes......................................................................20
         (b)      Requesting Term Loans..........................................................................20
         (c)      Conditions Precedent to Extension of Credit....................................................20
         (d)      Use of Proceeds................................................................................23
         (e)      Mandatory Prepayments..........................................................................24
         (f)      Optional Prepayment of Term Loans..............................................................24
         (g)      Interest Rates and Fees........................................................................25

3.       PAYMENTS TO TERM LENDERS................................................................................25

         (a)      General Procedures.............................................................................25
         (b)      Payment Obligations Absolute...................................................................26
         (c)      Application of Payments made to Term Lender Agent..............................................26
         (d)      Capital Reimbursement..........................................................................26
         (e)      Increased Cost of Term Loans...................................................................27
         (f)      Notice; Change of Applicable Lending Office....................................................27
         (g)      Reimbursable Taxes.............................................................................28

4.       INTENTIONALLY OMITTED...................................................................................29

5.       INTENTIONALLY OMITTED...................................................................................29

6.       INTENTIONALLY OMITTED...................................................................................29

7.       OTHER ACTIONS OF DEBTORS................................................................................29

8.       REPRESENTATIONS AND WARRANTIES..........................................................................30

9.       AFFIRMATIVE COVENANTS...................................................................................36

         (a)      Payment and Performance........................................................................36
         (b)      Payment of Expenses............................................................................36
         (c)      Instruments, Documents, Securities or Chattel Paper............................................36
         (d)      Books, Financial Statements and Reports........................................................37
         (e)      Other Information and Inspections..............................................................39
         (f)      Notice of Material Events and Change of Address................................................40
         (g)      Maintenance of Properties......................................................................41
         (h)      Discharge of Liens.............................................................................41
         (i)      Maintenance of Existence and Qualifications....................................................41
         (j)      Payment of Trade Liabilities, Taxes, etc.......................................................41
</Table>

                                      -i-

<PAGE>

                                TABLE OF CONTENTS
                                   (Continued)

<Table>
<Caption>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
         (k)      Insurance......................................................................................42
         (l)      Performance on Borrowers' Behalf...............................................................42
         (m)      Interest.......................................................................................42
         (n)      Compliance with Agreements and Law.............................................................43
         (o)      Environmental Matters; Environmental Reviews...................................................43
         (p)      Evidence of Compliance.........................................................................43
         (q)      Agreement to Deliver Security Documents........................................................43
         (r)      Guaranties of Newly Created or Acquired Subsidiaries...........................................44
         (s)      Compliance with Agreements.....................................................................44
         (t)      Risk Management Policies.......................................................................44
         (u)      Critical Vendor Program........................................................................44

10.      NEGATIVE COVENANTS......................................................................................44

         (a)      Indebtedness...................................................................................44
         (b)      Accounts.......................................................................................45
         (c)      Limitation on Liens............................................................................45
         (d)      Hedging Contracts..............................................................................46
         (e)      Limitation on Mergers, etc. and Issuances of Securities........................................46
         (f)      Limitation on Asset Sales......................................................................46
         (g)      Limitation on Distributions, Dividends and Redemptions.........................................47
         (h)      Limitation on New Businesses, Investments and Capital Expenditures.............................47
         (i)      Limitation on Credit Extensions................................................................47
         (j)      Transactions with Affiliates...................................................................47
         (k)      Prohibited Contracts...........................................................................47
         (l)      Modification of Certain Agreements.............................................................48
         (m)      Open Positions.................................................................................48
         (n)      Intentionally Omitted..........................................................................48
         (o)      Books and Records..............................................................................48
         (p)      Bankruptcy Cases...............................................................................48
         (q)      Cash Budget....................................................................................49
         (r)      Minimum Crude Oil Lease Volumes................................................................49
         (s)      Prepetition Indebtedness.......................................................................49

11.      EVENTS OF DEFAULT.......................................................................................50

12.      RIGHTS AND REMEDIES.....................................................................................53

13.      GUARANTY................................................................................................54

14.      TERM LENDER AGENT.......................................................................................55

         (a)      Appointment and Authority......................................................................55
         (b)      Exculpation, the Term Lender Agent's Reliance, etc.............................................56
</Table>

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                   (Continued)

<Table>
<Caption>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
         (c)      Credit Decisions...............................................................................56
         (d)      Indemnification................................................................................56
         (e)      Rights as Term Lender..........................................................................57
         (f)      Sharing of Set-Offs and Other Payments.........................................................57
         (g)      Investments....................................................................................58
         (h)      Benefit of this Section........................................................................58
         (i)      Resignation....................................................................................58
         (j)      Other Lender Parties...........................................................................58

15.      ASSIGNMENTS AND PARTICIPATIONS..........................................................................59

16.      INDEMNIFICATION.........................................................................................61

17.      MISCELLANEOUS...........................................................................................62
</Table>

SCHEDULES AND EXHIBITS:

SCHEDULE I                 DISCLOSURE SCHEDULE
SCHEDULE II                TERM LENDER SCHEDULE
SCHEDULE III               SECURITY SCHEDULE
EXHIBIT A-1                FORM OF TIER-A TERM NOTE
EXHIBIT A-2                FORM OF TIER-B TERM NOTE
EXHIBIT B                  BORROWING NOTICE
EXHIBIT C                  CERTIFICATE ACCOMPANYING FINANCIAL STATEMENTS
EXHIBIT D                  CASH FLOW REPORT
EXHIBIT E                  ENVIRONMENTAL COMPLIANCE CERTIFICATE
EXHIBIT F                  OPEN POSITION REPORT
EXHIBIT G                  CASH BUDGET
EXHIBIT H                  CRITICAL VENDOR ORDER
EXHIBIT I                  WEEKLY COMPLIANCE CERTIFICATE
EXHIBIT J                  SECOND INTERIM ORDER
EXHIBIT K                  LEASE VOLUME REPORT

                                     -iii-
<PAGE>

                              DEBTOR IN POSSESSION
                               TERM LOAN AGREEMENT

         DEBTOR-IN-POSSESSION TERM LOAN AGREEMENT, dated as of October 18, 2002
(as amended, supplemented or otherwise modified from time to time, and including
all Schedules and Exhibits attached hereto, this "AGREEMENT"), among :

                  o        EOTT ENERGY OPERATING LIMITED PARTNERSHIP, a Delaware
                           limited partnership and a debtor and debtor in
                           possession ("EOTT OLP"),

                  o        EOTT ENERGY CANADA LIMITED PARTNERSHIP, a Delaware
                           limited partnership and a debtor and debtor in
                           possession ("EOTT CANADA"),

                  o        EOTT ENERGY LIQUIDS, L.P., a Delaware limited
                           partnership and a debtor and debtor in possession
                           ("EOTT LIQUIDS"),

                  o        EOTT ENERGY PIPELINE LIMITED PARTNERSHIP, a Delaware
                           limited partnership and a debtor and debtor in
                           possession ("EOTT PIPELINE" and together with EOTT
                           Canada and EOTT Liquids, each an "ADDITIONAL OBLIGOR"
                           and collectively, "ADDITIONAL OBLIGORS" and the
                           Additional Obligors together with EOTT OLP on a joint
                           and several basis, "BORROWERS"),

                  o        EOTT ENERGY PARTNERS, L.P., a Delaware limited
                           partnership and a debtor and debtor in possession
                           ("EOTT MLP"),

                  o        EOTT ENERGY GENERAL PARTNER, L.L.C. a Delaware
                           limited liability company and a debtor and debtor in
                           possession ("EOTT GP" and together with EOTT MLP,
                           each a "GUARANTOR" and collectively, "GUARANTORS" and
                           together with EOTT OLP and each of the Additional
                           Obligors, each a "DEBTOR" and collectively,
                           "DEBTORS"),

                  o        each of the banks or other lending institutions which
                           is a listed as a Term Lender on the signature pages
                           of this Agreement or which may from time to time
                           become a party hereto in such capacity or any
                           successor or assignee thereof (each a "TERM LENDER"
                           and collectively, the "TERM LENDERS"),

                  o        and LEHMAN BROTHERS INC., as Term Lender Agent for
                           the Term Lenders (in such capacity, the "TERM LENDER
                           AGENT" and in its individual capacity, "LEHMAN").

         WHEREAS, on October 8, 2002 (the "FILING DATE"), the Debtors filed
separate petitions under Chapter 11 in the Bankruptcy Court for the Southern
District of Texas;

         WHEREAS, each of the Debtors intends to continue to operate its
business pursuant to Sections 1107 and 1108 of the Bankruptcy Code;

                                      -1-
<PAGE>

         WHEREAS, before the Filing Date, EOTT OLP, EOTT Canada, EOTT Liquids,
and EOTT Pipeline (collectively, the "PREPETITION BORROWERS"), EOTT MLP and EOTT
GP (collectively, the "PREPETITION GUARANTORS"), the lenders party thereto (the
"PREPETITION LENDERS"), Standard Chartered Bank as administrative agent for the
Prepetition Lenders (the "PREPETITION AGENT") and letter of credit issuer
thereunder (the "PREPETITION LC ISSUER"), entered into that certain Second
Amended and Restated Reimbursement, Loan and Security Agreement, dated as of
April 23, 2002, as amended by that certain Limited Forbearance and First
Amendment, dated as of August 27, 2002, among the Prepetition Borrowers, the
Prepetition Guarantors, the Prepetition Lenders, and the Prepetition Agent (as
so amended, the "PREPETITION CREDIT AGREEMENT"), pursuant to which the
Prepetition Lenders extended credit to the Prepetition Borrowers on the terms
set forth therein;

         WHEREAS, as of the date hereof, the Prepetition Lenders under the
Prepetition Credit Agreement are owed approximately $20,000,000 in revolving
loan principal obligations incurred directly by the Prepetition Borrowers plus
interest, fees and expenses (the "PREPETITION LOANS"), and $276,205,489.48 in
reimbursement obligations relating to letters of credit issued under the
Prepetition Credit Agreement (the "PREPETITION LETTERS OF CREDIT", and together
with the Prepetition Loans, the "PREPETITION BANK DEBT"), the obligations of the
Prepetition Borrowers in respect thereof being guaranteed by the Prepetition
Guarantors;

         WHEREAS, the Borrowers have requested that the Term Lenders provide
financing to the Borrowers pursuant to Sections 364(c)(1), (2) and (3) and
364(d) of the Bankruptcy Code, and enter into this Agreement pursuant to which
Term Lenders would make term loans to Borrowers in the aggregate principal
amount of $75,000,000 to be used by the Borrowers as provided in Section
2(d)(i);

         WHEREAS, the Term Lenders have indicated their willingness to agree to
extend such credit to the Borrowers, all on the terms and conditions set forth
herein and in the other Credit Documents and in accordance with Sections
364(c)(1), (2) and (3) and 364(d) of the Bankruptcy Code, so long as:

         (a) such postpetition credit obligations are (i) secured by Liens on
         all of the property and interest, real and personal, tangible and
         intangible, of the Debtors whether now owned or hereafter acquired,
         subject in priority only to certain Liens and the Carve Out as
         hereinafter provided and (ii) given superpriority status as provided in
         the Orders; and

         (b) the Prepetition Lenders receive certain adequate protection for the
         Debtors' use, sale or lease of collateral, including the Borrowers' use
         of cash collateral, and the priming of the prepetition Liens securing
         the obligations of the Borrowers in respect of the Prepetition Credit
         Agreement;

         WHEREAS, the Borrowers have agreed to provide such collateral,
superpriority claims and adequate protection subject to the approval of the
Bankruptcy Court;

         WHEREAS, each of the Guarantors will derive substantial direct and
indirect benefit from the credit made available by the Term Lenders to the
Borrowers; and

                                      -2-
<PAGE>

         WHEREAS, the Guarantors are willing to guarantee the obligations of
Borrowers hereunder;

         NOW, THEREFORE, in consideration of these premises and the mutual
undertakings set forth herein, the parties hereto hereby agree as follows:

1.       DEFINITIONS AND RULES OF INTERPRETATION.

         As used in this Agreement, all terms used herein which are defined in
Article 1 or Article 9 of the UCC (as in effect from time to time) shall have
the meanings set forth therein unless otherwise defined in this Agreement, and
all references to the plural herein shall also mean the singular. As used in
this Agreement, each of the following terms has the meaning given to such term
in this Section 1 or in the Sections and subsections referred to below:

         "ACCOUNT" has the meaning given that term in the UCC..

         "ADMINISTRATIVE AGENTS" means the Term Lender Agent and the LC Agent.

         "AFFILIATE" means, as to any Person, each other Person that directly or
         indirectly (through one or more intermediaries or otherwise) controls,
         is controlled by, or is under common control with, such Person. A
         Person shall be deemed to be "controlled by" any other Person if such
         other Person possesses, directly or indirectly, power (i) to vote 5% or
         more of the securities (on a fully diluted basis) having ordinary
         voting power for the election of directors or managing general partners
         or (ii) to direct or cause the direction of the management and policies
         of such Person whether by contract or otherwise.

         "AGREED ADMINISTRATIVE EXPENSES" means (i) amounts payable pursuant to
         28 U.S.C. Section 1930(a)(6) and (ii) Priority Professional Expenses.

         "AGREEMENT" has the meaning set forth in the preamble.

         "ALTERNATE BASE RATE" has the meaning set forth in the DIP Letter of
         Credit Agreement.

         "APPLICABLE LENDING OFFICE" means with respect to any Term Lender, the
         office of such Term Lender specified as its "Applicable Lending Office"
         in the Term Lender Schedule, or such other office as such Term Lender
         may from time to time specify to the Borrower Representative and the
         Term Lender Agent and, with respect to the Term Lender Agent, the
         office, branch or agency through which it administers this Agreement.

         "AVOIDANCE ACTIONS" means avoidance actions of the Borrowers under
         Chapter 5 or Section 724(a) of the Bankruptcy Code (or proceeds
         thereof).

         "BANKRUPTCY CODE" means Title 11, United States Code.

         "BANKRUPTCY COURT" means the United States Bankruptcy Court for the
         Southern District of Texas, Corpus Christi Division.

                                      -3-
<PAGE>

         "BANKRUPTCY SCHEDULE" means the schedule of assets and liabilities and
         the statement of financial affairs filed by the Debtors with the
         Bankruptcy Court in connection with the Cases.

         "BARREL REPORT" means a report in the form delivered to the
         Administrative Agents from time to time setting forth the aggregate
         crude oil purchases and cancellations from the top twenty-five (25)
         leaseholders identified therein for any given week, with such
         supporting information in detail as may from time to time be prescribed
         by the Term Lender Agent, duly completed and certified by an authorized
         officer of EOTT Energy.

         "BONDHOLDERS" means those parties holding interests in the EOTT MLP
         Senior Notes issued pursuant to the EOTT MLP Supplemental Indenture.

         "BONDHOLDER'S COMMITTEE" means the committee of Bondholders, if any,
         appointed to the Cases.

         "BORROWER EXPENSES" means any and all sums, costs and expenses incurred
         in connection with the preparation and negotiation of this Agreement,
         the other Credit Documents and any related agreements or instruments,
         together with any amendments or supplements hereto or thereto, or in
         defending, protecting or enforcing the security interest granted herein
         or in defending, collecting or attempting to collect the Obligations,
         including, without limitation, all search, filing and recording fees,
         taxes, attorneys' fees, legal expenses, all fees and expenses for the
         service and filing of papers, marshals, sheriffs, custodians,
         auctioneers and others and all court costs and collection charges, with
         interest thereon, from the date of demand until paid at the Alternate
         Base Rate.

         "BORROWERS" has the meaning set forth in the preamble.

         "BORROWER REPRESENTATIVE" means, for purposes of executing the
         Borrowing Notice and otherwise communicating with the Term Lender Agent
         on behalf of the Borrowers, and taking any action required under this
         Agreement on behalf of the Borrowers (and all of the Borrowers shall be
         bound thereby), including consent to and any modifications, amendments
         or supplements to this Agreement or related documents, EOTT OLP.

         "BORROWING BASE" means, as of any date of determination, the borrowing
         base determined pursuant to the DIP Letter of Credit Agreement.

         "BORROWING NOTICE" means a written request made by the Borrower
         Representative that meets the requirements of Section 2(a)(ii).

         "BUSINESS DAY" means any day, other than a Saturday, Sunday or day
         which shall be in the State of New York a legal holiday or day on which
         banking institutions are required or authorized to close.

         "CAPITAL EXPENDITURES" means for any period, Consolidated expenditures
         (including the aggregate amount of Capital Lease obligations incurred
         during such period) made by EOTT MLP and its Consolidated Subsidiaries
         to acquire or construct fixed assets, plant or equipment (including
         renewals, improvements or replacements, but excluding repairs)

                                      -4-
<PAGE>

         during such period and which, in accordance with GAAP, are classified
         as capital expenditures.

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

         "CARVE OUT" means, at any time of determination, the sum of (i) allowed
         administrative expenses payable pursuant to 28 U.S.C. Section
         1930(a)(6) and (ii) Priority Professional Expenses incurred on and
         after the Filing Date.

         "CASES" means, collectively, the Debtors' reorganization cases under
         Chapter 11 of the Bankruptcy Code, pending in the Bankruptcy Court
         (Chapter 11 Case No. 02-21730.

         "CASH BUDGET" has the meaning set forth in Section 8(w).

         "CASH EQUIVALENTS" means Investments in:

                  (i)      marketable obligations, maturing within 12 months
                           after acquisition thereof, issued or unconditionally
                           guaranteed by the United States of America or an
                           instrumentality or agency thereof and entitled to the
                           full faith and credit of the United States of
                           America;

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

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

                  (iv)     commercial paper, other than commercial paper issued
                           by any Debtor or its Affiliates, maturing within 180
                           days after acquisition thereof and having a rating of
                           at least P-1 by Moody's or A-1 by S&P; and

                  (v)      money market or other mutual funds substantially all
                           of whose assets comprise securities of the types
                           described in subsections (i) through (iv) above.

         "CASH FLOW REPORT" means a report prepared each Business Day by the
         Borrower Representative reflecting on such day EOTT MLP's and its
         Subsidiaries' cash flows for the current month, on an actual
         (historical) and projected (forecast) basis, substantially in the form
         of Exhibit D hereto.

                                      -5-
<PAGE>

         "CASH WATERFALL" has the meaning set forth in the Intercreditor
         Agreement.

         "CERCLA" means the Comprehensive Environmental Response, Compensation
         and Liability Act of 1980, as amended.

         "CERCLIS" means the Comprehensive Environmental Response, Compensation
         and Liability Information System List of the Environmental Protection
         Agency.

         "CHANGE IN CONTROL" means the occurrence of any of the following
         events: (i) any of Steve Myers, Dana Gibbs and Susan Ralph shall cease
         for any reason not reasonably acceptable to the Term Lender Agent to
         serve as an executive officer of EOTT MLP (unless any such officer
         shall have ceased to serve as a result of death, disability,
         termination for cause as determined by the EOTT MLP Board of Directors
         or other reason Currently Approved by the Term Lender Agent and such
         individual has not been replaced by a Person reasonably acceptable to
         the Term Lender Agent within a reasonable period of time), and (ii) any
         Person or Group shall be the legal and beneficial owner (within the
         meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
         amended) of 50% or more of the combined voting power of the then total
         partnership interests (including all securities that are convertible
         into partnership interests) of EOTT MLP.

         "CLOSING DATE" means the date agreed to by the Borrower Representative
         and the Term Lender Agent for the Extensions of Credit under this
         Agreement, which date shall occur promptly after entry by the
         Bankruptcy Court of the Second Interim Order and must be a Business Day
         occurring no later than October 18, 2002, but not before all of the
         conditions precedent in this Agreement for such Extension of Credit
         have been satisfied.

         "COLLATERAL" has the meaning set forth in the Intercreditor Agreement.

         "COLLATERAL AGENT" means Standard Chartered Bank, acting as collateral
         agent on behalf of the LC Issuer, the LC Participants, SCTSC, the Term
         Lenders and the Administrative Agents in accordance with the
         Intercreditor Agreement.

         "COLLECTION ACCOUNT" has the meaning set forth in the Intercreditor
         Agreement.

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

         "CONTROL AGREEMENT" has the meaning set forth in the Intercreditor
         Agreement.

         "CREDIT DOCUMENTS" means, collectively (i) this Agreement, the Term
         Notes, and each and every other agreement, document, certificate or
         instrument between any Lender Party, and any Debtor or otherwise for
         the benefit of any Lender Party that is entered into or delivered on or
         after the date hereof, (ii) the Orders, and (iii) the Security
         Documents.

                                      -6-
<PAGE>

         "CREDITORS' COMMITTEE" means the official unsecured creditors'
         committee, if any, appointed to the Cases.

         "CRITICAL VENDOR ORDER" means the Order for Authority to Pay and Honor
         Prepetition Obligations to Critical Customers and Vendors including
         Crude Suppliers and Purchasers entered by the Bankruptcy Court attached
         hereto as Exhibit H.

         "CRUDE OIL PURCHASE AGREEMENT" means, that certain Amended and Restated
         Commodities Repurchase Agreement, dated as of the date hereof, by and
         among SCTSC and EOTT OLP (as amended, amended and restated,
         supplemented or otherwise modified from time to time).

         "CURRENTLY APPROVED BY THE TERM LENDER AGENT" means such event, action,
         policy, or other matter, as the case may be, as reflected in the most
         recent written notice given by the Term Lender Agent to the Borrower
         Representative as being approved. Each such written notice will
         supersede and revoke each prior notice.

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

         "DEBTOR" has the meaning set forth in the preamble.

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

         "DEFAULT RATE" means a rate per annum equal to twelve percent (12%).

         "DESIGNATED ASSETS" means the following assets: (i) MTBE, (ii) the Mont
         Belvieu Storage Facility and Grid in Chambers, Harris and Galveston
         Counties, Texas and (iii) the gas processing, storage and
         transportation facilities at Tupman, Kern County, California.

         "DIP LETTER OF CREDIT AGREEMENT" means the Debtor In Possession Letter
         of Credit Agreement, dated as of the date hereof, among the Borrowers,
         the Guarantors, the LC Participants, the LC Issuer, the LC Agent, and
         the Collateral Agent, as amended, amended and restated, supplemented,
         or otherwise modified from time to time pursuant to which the
         participants thereunder will make available to the Borrowers a letter
         of credit facility not to exceed at any one time outstanding
         $325,000,000.

         "DISCLOSURE SCHEDULE" means Schedule I hereto.

         "EMPLOYEE TRANSITION AGREEMENT" means that certain employee transition
         agreement, dated as of October 7, 2002, by and among the EOTT Parties
         and the Enron Parties.

         "ENRON" means Enron Corp., an Oregon corporation and
         debtor-in-possession in the Enron Bankruptcy Proceedings.

                                      -7-
<PAGE>

         "ENRON BANKRUPTCY PROCEEDINGS" means the actions under the petitions
         for relief filed by Enron and certain of its Affiliates under the
         Bankruptcy Code in the United States Bankruptcy Court for the Southern
         District of New York, In re Enron Corp., et al, jointly administered
         under Case No. 01-16034.

         "ENRON PARTIES" means Enron, Enron Energy Services, Inc. a Delaware
         corporation and a debtor in possession, Enron North America Corp., a
         Delaware corporation and debtor in possession, Enron Pipeline Services
         Company, a Delaware corporation, EGP Fuels Company, a Delaware
         corporation, and Enron Gas Liquids, Inc., a Delaware corporation and a
         debtor and a debtor in possession.

         "ENRON SETTLEMENT AGREEMENT" means the settlement agreement, dated as
         of October 7, 2002, by and among the EOTT Parties and the Enron Parties
         settling, among other things, certain claims owed by each of the EOTT
         Parties to the Enron Parties.

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

         "EOTT CANADA" has the meaning set forth in the preamble.

         "EOTT ENERGY" means EOTT Energy Corp., a Delaware corporation.

         "EOTT FINANCE CORP." means EOTT Energy Finance Corp., a Delaware
         corporation and a debtor and a debtor in possession.

         "EOTT GP" has the meaning set forth in the preamble.

         "EOTT LIQUIDS" has the meaning set forth in the preamble.

         "EOTT MLP" has the meaning set forth in the preamble.

         "EOTT MLP SENIOR NOTES" means EOTT MLP's $235,000,000, in original
         aggregate principal amount, of 11% Senior Notes due 2009.

         "EOTT MLP SENIOR NOTES INDENTURE" means the Indenture, dated October 1,
         1999, among EOTT MLP, EOTT Finance Corp., a Delaware corporation ("EOTT
         FINANCE CORP."), EOTT OLP, EOTT Pipeline, EOTT Canada and the Bank of
         New York, as supplemented by the EOTT MLP Supplemental Indenture.

         "EOTT MLP SUPPLEMENTAL INDENTURE" means the First Supplemental
         Indenture, dated October 1, 1999, among EOTT MLP, EOTT Finance Corp.,
         EOTT OLP, EOTT Pipeline, EOTT Canada and The Bank of New York.

                                      -8-
<PAGE>

         "EOTT PARTIES" means the Borrowers, the Guarantors and EOTT Energy.

         "EOTT TERMINAL" means any storage terminal, tankage or facility owned
         by any Borrower.

         "EQUITYHOLDERS" means those parties holding equity interests in EOTT
         MLP.

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

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

         "ERISA PLAN" means any employee pension benefit plan subject to Title
         IV of ERISA maintained by any ERISA Affiliate with respect to which any
         Debtor has a fixed or contingent Liability.

         "EVENT OF DEFAULT" shall mean the occurrence of any event described in
         Section 11 of this Agreement.

         "EXTENSION OF CREDIT" means the disbursement of proceeds of any Term
         Loan.

         "FILING DATE" has the meaning set forth in the preamble.

         "FINAL ORDER" means a final order of the Bankruptcy Court in the Cases
         authorizing and approving this Agreement and the other Credit Documents
         under Sections 364(c) and (d) of the Bankruptcy Code and entered at a
         final hearing, in form and substance satisfactory to the Administrative
         Agents. The Final Order shall, among other things, provide the same
         Superpriority Claims and superpriority Lien status as the Second
         Interim Order.

         "FIRST INTERIM ORDER" means the first interim DIP financing order of
         the Bankruptcy Court in the Cases authorizing and approving this
         Agreement and the other Credit Documents under Sections 364(c) and (d)
         of the Bankruptcy Code and entered at the first interim hearing on
         October 9, 2002.

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

         "FISCAL YEAR" means a twelve-month period ending on December 31 of any
         year.

         "FIXED PRICE CONTRACT" means a purchase or sale contract for crude oil,
         refined petroleum products or NGLs where the price has been fixed.

                                      -9-
<PAGE>

         "GAAP" means those generally accepted accounting principles and
         practices recognized as such by the Financial Accounting Standards
         Board (or any generally recognized successor).

         "GUARANTORS" has the meaning set forth in the preamble.

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

         "HEDGING CONTRACT" means (i) any agreement providing for options,
         swaps, floors, caps, collars, forward sales or forward purchases
         involving interest rates, commodities or commodity prices, equities,
         currencies, bonds or indexes based on any of the foregoing, (ii) any
         option, futures or forward contract traded on an exchange and (iii) any
         other derivative agreement or other similar agreement or arrangement,
         excluding in the case of subsection (i), (ii) and (iii), for purposes
         of Section 10(d) only, any such agreement or contract covering crude
         oil, refined petroleum products or NGLs that is entered into by a
         Borrower (A) in the ordinary course of business, (B) in accordance with
         the then effective Risk Management Policies and (C) not for speculative
         purposes.

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

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

         (i)      Liabilities for borrowed money,

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

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

         (iv)     Liabilities that would be required under GAAP to be shown on
                  such Person's balance sheet as a liability,

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

         (vi)     Liabilities constituting principal under Capital Leases,

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

                                      -10-
<PAGE>

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

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

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

         (xi)     Liabilities with respect to banker's acceptances or

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

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

         "INELIGIBLE PROFESSIONAL EXPENSES" means fees or expenses incurred by
         any Person, including professionals retained by the Borrowers, the
         Guarantors, the Creditors' Committee or the Bondholder's Committee, in
         (A) preventing, hindering or delaying the Term Lenders', the Term
         Lender Agent's or the Collateral Agent's enforcement or realization
         upon any of the Collateral once the Termination Declaration Date has
         occurred, (B) using cash collateral or selling any other Collateral
         without the consent of the Administrative Agents (except to the extent
         permitted by this Agreement), (C) incurring Indebtedness without the
         consent of the Administrative Agents (except to the extent permitted by
         this Agreement) and (D) objecting to or contesting in any manner, or in
         raising any defenses to, the validity, extent, perfection, priority or
         enforceability of the Prepetition Bank Debt or the Obligations or any
         mortgages, liens or security interests with respect thereto or any
         other rights or interests of the LC Issuer, the LC Participants, SCTSC,
         the Term Lenders, the Administrative Agents or the Collateral Agent, or
         in asserting any claims or causes of action, including, without
         limitation, Avoidance Actions or equitable subordination claims against
         the LC Issuer, the LC Participants, SCTSC, the Term Lenders, the
         Administrative Agents or the Collateral Agent. The term does not

                                      -11-
<PAGE>

         include fees or expenses incurred for investigation by the Borrowers or
         the Guarantors (or an authorized substitute for the Borrowers or the
         Guarantors if the Borrowers or the Guarantors are for some reason
         unable to conduct an investigation) of claims, causes of action or
         theories for litigation regarding (a) the validity, enforceability,
         perfection or priority of the prepetition liens in the prepetition
         collateral, (b) the validity, allowability, priority, status or amount
         of the prepetition indebtedness, within 30 days following the Filing
         Date or (c) the validity and enforceability of the SCTSC Purchase
         Agreements (provided, that the expenses incurred for such investigation
         shall not exceed $75,000).

         "INITIAL CASH BUDGET" has the meaning set forth in Section 8(w).

         "INITIAL FINANCIAL STATEMENTS" means the unaudited Consolidated balance
         sheet of EOTT MLP and its Subsidiaries as of August 31, 2002 and the
         related Consolidated statement of operations, cash flows and partners'
         capital for the month ended August 31, 2002.

         "INTERCREDITOR AGREEMENT" means the Intercreditor and Security
         Agreement, dated as of the date hereof, among the Borrowers, the
         Guarantors, the LC Agent, the LC Participants, SCTSC, the Term Lender
         Agent, the Term Lenders and the Collateral Agent, as amended, amended
         and restated, supplemented, or otherwise modified in accordance with
         Section 10(l).

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

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

         "LC AGENT" means Standard Chartered Bank in its capacity as agent for
         the LC Participants under the DIP Letter of Credit Agreement.

         "LC ISSUER" means Standard Chartered Bank in its capacity as issuer of
         letters of credit under the DIP Letter of Credit Agreement.

         "LC PARTICIPANTS" means the Persons from time to time designated as
         such participants under the DIP Letter of Credit Agreement.

         "LEHMAN" has the meaning set forth in the preamble.

         "LENDER PARTIES" means the Term Lender Agent and all Term Lenders.

         "LIABILITIES" means, as to any Person, all Indebtedness, liabilities
         and obligations of such Person, whether matured or unmatured,
         liquidated or unliquidated, primary or secondary,

                                      -12-
<PAGE>

         direct or indirect, absolute, fixed or contingent, and whether or not
         required to be considered pursuant to GAAP.

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

         "MAJORITY TERM LENDERS" means the Term Lenders whose aggregate
         Percentage Shares exceed fifty percent (50%) plus, so long as (i)
         Lehman is the Term Lender Agent and (ii) Lehman Commercial Paper, Inc.
         or any other Affiliate of Lehman is the beneficial holder of at least
         twenty-percent of the aggregate outstanding Term Loans, Lehman, in its
         capacity as Term Lender Agent.

         "MATERIAL ADVERSE CHANGE" means a material and adverse change, from the
         state of affairs since the Filing Date (including any such change that
         may result from the settlement, discharge, release or other resolution
         of, or any change that may result from any development or event
         affecting any matter disclosed in the Disclosure Schedule, or as
         represented or warranted in any Credit Document, including any such
         change that may result from the settlement, discharge, release or other
         resolution of, or any change that may result from any development or
         event affecting any matter disclosed in the Disclosure Schedule) to (i)
         EOTT MLP's Consolidated financial condition as set forth in the Cash
         Budget, (ii) EOTT MLP's Consolidated operations, properties or
         prospects, considered as a whole, (iii) the Borrowers' ability to
         timely pay the Obligations or (iv) the enforceability of any Credit
         Document.

         "MATURITY DATE" means the earlier to occur of (i) March 31, 2003 and
         (ii) the effective date of a Reorganization Plan of the Debtors that
         has been confirmed by an order of the Bankruptcy Court.

         "MONTHLY PAYMENT DATE" means the first Business Day of each month.

         "MOODY'S" means Moody's Investors Service, Inc., or its successor.

         "MTBE" means the MTBE facility in Harris County, Texas.

                                      -13-
<PAGE>

         "NGLS" means liquid hydrocarbon products extracted from a natural gas
         stream, including ethane, propane, normal butane, isobutane and natural
         gasoline.

         "NYMEX" means the New York Mercantile Exchange.

         "OBLIGATION" means any part of the Obligations.

         "OBLIGATIONS" shall mean and include any and all Indebtedness,
         Liabilities and obligations of every kind, nature and description of
         each Debtor to any Lender Party, or any of them, however evidenced,
         arising under this Agreement or the other Credit Documents, whether now
         existing or hereafter arising, whether direct or indirect, absolute or
         contingent, joint and/or several, due or not due, primary or secondary,
         liquidated or unliquidated, secured or unsecured, or on original,
         renewed or extended terms and whether arising directly or acquired by
         any Term Lender from any other party to the Credit Documents
         (including, without limitation, participations or interests of any Term
         Lender in the obligations of any Debtor to others), whether for
         principal, interest, fees, expenses, indemnities or other amounts and
         whether incurred by any Debtor as principal, surety, endorser,
         guarantor, accommodation party, indemnitor or otherwise.

         "OFFSETTING POSITION" means any offsetting sale or SCTSC Purchase
         Agreements, an offsetting NYMEX contract, an offsetting physical
         inventory position (excluding tank bottoms and pipeline linefill
         inventory classified as a long term asset and working inventory not
         held for resale) or an offsetting swap, collar or option contract, in
         each case eliminating price risk and substantially all basis risk.

         "OPEN POSITION" means, with respect to crude oil inventory or crude oil
         purchase or sale contracts, any position that does not have an
         Offsetting Position.

         "ORDERS" means, collectively, the First Interim Order, the Second
         Interim Order and the Final Order.

         "OTHER PRIORITY CLAIMS" means any account payable, obligation or
         liability that the Term Lender Agent has determined has or will have a
         Lien upon or claim against any Cash Equivalent, Account or inventory of
         any Borrower senior or equal in priority to the security interests in
         favor of the Collateral Agent, in each case to the extent such Cash
         Equivalent, Account or inventory of any Borrower is otherwise included
         in the determination of the Borrowing Base and the included portion
         thereof has not already been reduced by such Lien or claim.

         "PERCENTAGE SHARE" means, with respect to any Term Lender (1) when used
         in Section 2(a), the percentage set forth such Term Lender's name on
         the Term Lender Schedule hereto and (2) when used otherwise, the
         percentage obtained by dividing (A) the sum of the unpaid principal
         balance of such Term Lender's Term Loans at the time in question by (B)
         the sum of the aggregate unpaid principal balance of all Term Loans at
         such time.

         "PERMITTED CAPITAL EXPENDITURES" means cash Capital Expenditures made
         to maintain, up to the level that exists on the Closing Date, the
         operating capacity of the capital assets of Borrowers, taken as a
         whole, as such assets exist on the Closing Date and not to

                                      -14-
<PAGE>

         exceed $12,000,000 in the aggregate during the period beginning on the
         Closing Date and ending on the Termination Declaration Date.

         "PERMITTED INVESTMENTS" means (i) Cash Equivalents, (ii) Investments
         described in the Disclosure Schedule, and (iii) Investments by EOTT MLP
         or any of its Subsidiaries in any Wholly Owned Subsidiary of EOTT MLP
         that is a Borrower or a Guarantor.

         "PERMITTED LIEN" shall mean any of the following:

         (i)      Liens in favor of the Prepetition Agent and the Prepetition
                  Lenders securing the Prepetition Bank Debt;

         (ii)     Permitted Prior Liens;

         (iii)    pledges or deposits of cash or securities under worker's
                  compensation, unemployment insurance or other social security
                  legislation or deposits with insurers to cover self-retention
                  obligations under employee life or medical insurance programs;

         (iv)     carriers', warehousemen's, mechanics', materialmen's,
                  repairmen's, landlord's or other like Liens (including,
                  without limitation, Liens on property of any Debtor in the
                  possession of storage facilities, pipelines or barges) arising
                  in the ordinary course of business for amounts that are not
                  more than 60 days past due or the validity of which is being
                  contested in good faith and by appropriate proceedings, if
                  necessary, and for which adequate reserves are maintained on
                  the books of any Debtor in accordance with GAAP;

         (v)      Liens under or with respect to accounts with brokers or
                  counterparties with respect to the following commodity
                  accounts maintained by EOTT OLP with Refco, L.L.C.: Account
                  Nos. 1725 43979; 1725 65803; 1725 67320; 1725 67543; 1725
                  72336; 1725 72611; 1725 67544 and 67544M; and L610 54999 (for
                  transactions effected with or through United Energy, Inc.),
                  consisting of cash, commodities or futures contracts, options,
                  securities, instruments and other like assets;

         (vi)     deposits of cash or securities to secure the performance of
                  bids, trade contracts (other than for borrowed money), leases,
                  statutory or regulatory obligations, surety and appeal bonds,
                  performance bonds and other obligations of a like nature
                  incurred in the ordinary course of business;

         (vii)    Liens in respect of existing Capital Leases but encumbering
                  only the property under lease;

         (viii)   statutory Liens related to the purchase of crude oil by a
                  Borrower;

         (ix)     Liens permitted by the Security Documents and the Orders;

                                      -15-
<PAGE>

         (x)      Liens for taxes, assessments or governmental charges or claims
                  that are not yet delinquent or that are being contested in
                  good faith and by appropriate proceedings, if necessary, and
                  for which adequate reserves are maintained on the books of any
                  Debtor in accordance with GAAP; and

         (xi)     easements, rights-of-way, restrictions, minor defects and
                  irregularities in title and other similar charges or
                  encumbrances not interfering in any material respect with the
                  business of any Debtor.

         "PERMITTED PRIOR LIENS" means valid, perfected and otherwise
         unavoidable Liens existing as of the Filing Date, senior to the
         prepetition Liens in respect of the Prepetition Credit Agreement, and
         Liens otherwise approved in writing by the Administrative Agents. The
         term includes the priming Lien granted to the Collateral Agent pursuant
         to the terms of this Credit Agreement and the Orders and securing the
         Obligations.

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

         "PREPETITION BANK DEBT" has the meaning set forth in the fourth
         recital.

         "PREPETITION CREDIT AGREEMENT" has the meaning set forth in the third
         recital.

         "PREPETITION LENDERS" has the meaning set forth in the third recital.

         "PREPETITION LETTERS OF CREDIT" means each of the letters of credit
         issued, extended or renewed by the Prepetition LC Issuer under the
         Prepetition Credit Agreement.

         "PREPETITION LOANS" means each of the loans made by the Prepetition
         Lenders under the Prepetition Credit Agreement.

         "PRESCRIBED FORMS" has the meaning set forth in Section 3(g)(iii).

         "PRIORITY CLAIMS" means any Liabilities that will give rise to claims
         against the Debtors that are senior or equal in priority to the
         Superpriority Claims in favor of the Lender Parties, the LC
         Participants and the LC Agent.

         "PRIORITY PROFESSIONAL EXPENSES" means allowed and unpaid fees, costs
         and reasonable expenses of professionals retained in the Cases pursuant
         to Sections 327 and 1103 of the Bankruptcy Code consisting of
         attorneys, accountants, financial advisors, and consultants retained by
         the Borrowers, the Guarantors, the Creditors' Committee or the
         Bondholder's Committee; provided, however, that (i) Ineligible
         Professional Expenses and the fees, costs and expenses of third-party
         professionals employed by the members of the Creditors' Committee or
         the Bondholder's Committee shall not be included, and (ii) the amount
         of Priority Professional Expenses shall not exceed the applicable
         Professional Expense Cap if in effect at the time of reference thereto.

                                      -16-
<PAGE>

         "PROFESSIONAL EXPENSE CAP" If, at the time of reference thereto, the
         Termination Declaration Date has not occurred, there is no Professional
         Expense Cap. If, at the time of reference thereto, the Termination
         Declaration Date has occurred, the Professional Expense Cap is the
         aggregate sum of $2,000,000, whether the fees and expenses are allowed
         and unpaid at the time of the Termination Declaration Date or are
         incurred before or after the Termination Declaration Date. The term
         includes any holdbacks required by the Bankruptcy Court. All payments
         of Priority Professional Expenses made on and after the Termination
         Declaration Date shall reduce the Professional Expense Cap dollar for
         dollar.

         "RATING AGENCY" means either S&P or Moody's.

         "RECEIVABLES PURCHASE AGREEMENT" means that certain Amended and
         Restated Receivables Purchase Agreement, dated as of the date hereof,
         by and among SCTSC and EOTT OLP (as amended, amended and restated,
         supplemented or otherwise modified from time to time).

         "REGISTER" has the meaning set forth in Section 15(e).

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

         "REIMBURSABLE TAXES" has the meaning set forth in Section 3(d)(i).

         "RELEASE" has the meaning given such term in 42 U.S.C.
         Section 9601(22).

         "REORGANIZATION PLAN" means a plan or plans of reorganization in the
         Cases.

         "RISK MANAGEMENT POLICIES" means, with respect to any Borrower, such
         risk management procedures and internal controls and such trading
         policies with such Open Position limits, with such changes thereto in
         effect at any time after the Closing Date, as are then currently
         approved by the EOTT Energy board of directors.

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

         "SCTSC" means, Standard Chartered Trade Services Corporation, a
         Delaware corporation, as purchaser under the SCTSC Purchase Agreements.

         "SCTSC PURCHASE AGREEMENTS" means, collectively, the Crude Oil Purchase
         Agreement and the Receivables Purchase Agreement.

         "SECOND INTERIM ORDER" means a second interim DIP financing order of
         the Bankruptcy Court in the Cases authorizing and approving this
         Agreement and the other Credit Documents under Sections 364(c) and (d)
         of the Bankruptcy Code and entered at the second interim hearing, in
         form and substance satisfactory to the Administrative Agents and
         substantially in the form attached hereto as Exhibit J.

                                      -17-
<PAGE>

         "SECURITY" means any rights, properties or interests of any Lender
         Party and the Collateral Agent under the Credit Documents, which
         provide recourse or other benefits to any Lender Party or the
         Collateral Agent in connection with the Obligations or the non-payment
         or non-performance thereof, including any Collateral, guaranties of the
         payment of any Obligation, bonds, surety agreements, keep-well
         agreements, letters of credit, rights of subrogation, rights of offset
         and other rights provided for thereunder.

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

         "SECURITY SCHEDULE" means Schedule III hereto.

         "SUBSIDIARY" means, with respect to any Person, any corporation,
         association, partnership, limited liability company, joint venture or
         other business or corporate entity, enterprise or organization which is
         directly or indirectly (through one or more intermediaries) controlled
         or owned more than 50% by such Person.

         "SUPERPRIORITY CLAIM" means a claim against a Borrower or its estate in
         its Case which is an administrative claim having priority over (i) any
         and all allowed administrative expenses and (ii) unsecured claims now
         existing or hereafter arising, including, without limitation,
         administrative expenses of the kind specified in Section 503(b),
         506(c), or 507(b) of the Bankruptcy Code.

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

         "TERM LENDER AGENT" has the meaning set forth in the preamble.

         "TERM LENDERS" each signatory hereto other than any Debtor that is a
         party hereto and other than Lehman, in its capacity as Term Lender
         Agent, and the successors of each such party.

         "TERM LENDER SCHEDULE" means Schedule II hereto.

         "TERM LOANS" has the meaning set forth in Section 2(a)(i).

         "TERM LENDER AGENT'S SPECIAL COUNSEL" means Thompson & Knight LLP or
         such other counsel as may be approved by the Term Lender Agent.

         "TERM NOTES" means the promissory notes of Borrowers dated the date
         hereof and made payable to the order of Term Lenders in accordance with
         their respective Percentage

                                      -18-
<PAGE>

         Shares, all of which shall evidence the aggregate joint and several
         Indebtedness of Borrowers in respect of the Term Loans.

         "TERMINATION DECLARATION DATE" means the earlier to occur of (i) the
         date on which the Term Lender Agent declares all Obligations to be due
         and payable on account of an Event of Default and (ii) the Maturity
         Date.

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

         "TIER-A TERM LOANS" means Term Loans in the aggregate principal amount
         of $50,000,000 evidenced, or to be evidenced, by Term Notes in the form
         of Exhibit A-1.

         "TIER-B TERM LOANS" means Term Loans in the aggregate principal amount
         of $25,000,000 evidenced, or to be evidenced, by Term Notes in the form
         of Exhibit A-2.

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

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

         "WEEKLY COMPLIANCE CERTIFICATE" means a certificate in the form of
         Exhibit I duly completed and certified by an authorized officer of EOTT
         Energy.

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

                                      -19-
<PAGE>

2.       THE TERM LOANS.

                  (a) Commitment to Lend; Notes.

                  (i) Subject to the terms and conditions hereof, each Term
Lender agrees to make a single advance (collectively, the "TERM LOANS") to
Borrowers on or before October 18, 2002, in an amount equal to such Term
Lender's Percentage Share of $75,000,000.

                  (ii) The obligation of Borrowers to repay to each Term Lender
the amount of the Term Loans made by such Term Lender, together with interest
accruing in connection therewith, shall be evidenced by two Term Notes made by
Borrowers payable to the order of such Term Lender in the form of Exhibit A-1
and Exhibit A-2 with appropriate insertions. One such Note will evidence
two-thirds of such Term Lender's Term Loans, will be in the form of Exhibit A-1
and will state that it is a "Tier-A Term Note". The other Note will evidence
one-third of such Term Lender's Term Loans, will be in the form of Exhibit A-2
and will state that it is a "Tier-B Term Note." Interest on each Term Note shall
accrue as provided herein and therein. The Obligations shall be due and payable
as provided in the Term Notes and herein. Borrowers shall be jointly and
severally liable for the payment of the Obligations.

                  (b) Requesting Term Loans.

         The Borrower Representative must give to each Term Lender a written
request for the Term Loans to be received by the Term Lender Agent on or before
the Closing Date. Such written request must be made in the form and substance of
the Borrowing Notice attached hereto as Exhibit B, duly completed. If all
conditions precedent to the Term Loans have been met, each Term Lender will on
the date requested promptly wire transfer its Percentage Share of $75,000,000 in
immediately available funds as provided herein.

                  (c) Conditions Precedent to Extension of Credit.

                  (i) Extensions of Credit. No Term Lender has any obligation to
make the Extension of Credit unless the following conditions precedent have been
satisfied:

                  (1)      Restructuring Agreement. The restructuring agreement
                           by and among the Borrowers, the Prepetition Lenders,
                           SCTSC, the Bondholders, and the Enron Parties (the
                           "RESTRUCTURING AGREEMENT") has been executed by at
                           least 66% of the Bondholders and shall be in full
                           force and effect. No party to the Restructuring
                           Agreement has exercised any termination rights with
                           respect thereto.

                  (2)      SCTSC Purchase Agreements. Each of the SCTSC Purchase
                           Agreements shall have been assumed by the Borrowers
                           and approved by the Bankruptcy Court pursuant to the
                           Second Interim Order.

                  (3)      Enron Settlement Agreement. The Enron Settlement
                           Agreement, and Employee Transition Agreement and any
                           other documents executed in connection with the
                           foregoing, shall have been executed by the EOTT
                           Parties and the Enron Parties.

                                      -20-
<PAGE>

                  (4)      Credit Documents. Each of the Credit Documents shall
                           have been duly executed and delivered by the
                           respective parties thereto, shall be in full force
                           and effect and shall be in form and substance
                           satisfactory to the Term Lender Agent and the Term
                           Lenders. The Term Lender Agent shall have received a
                           fully executed copy of each such document.

                  (5)      Certified Copy of Charter Documents. The Term Lender
                           Agent shall have received from each of the Borrowers
                           and the Guarantors a copy, certified by a duly
                           authorized officer of such Person to be true and
                           complete as of the Closing Date, of each of (A) its
                           charter or other incorporation documents as in effect
                           on such date of certification and (B) its by-laws as
                           in effect on such date.

                  (6)      Corporate Action. All corporate action necessary for
                           the valid, execution, delivery and performance by
                           each of the Borrowers of this Agreement and the other
                           Credit Documents to which it is or is to become a
                           party shall have been duly and effectively taken, and
                           evidence thereof satisfactory to the Term Lender
                           Agent and the Term Lenders shall have been provided
                           to the Term Lender Agent.

                  (7)      Incumbency Certificate. The Term Lender Agent shall
                           have received from each of the Borrowers an
                           incumbency certificate, dated as of the Closing Date,
                           signed by a duly authorized officer of such Borrower,
                           and giving the name and bearing a specimen signature
                           of each individual who shall be authorized: (A) to
                           sign, in the name and on behalf of the each such
                           Borrower, each of the Credit Documents to which such
                           Borrower is or is to become a party, (B) to request
                           the Term Loans, and (C) to give notices and to take
                           other action on its behalf under the Credit
                           Documents.

                  (8)      Certificates of Insurance. The Collateral Agent shall
                           have received (A) a certificate of insurance form an
                           independent insurance broker dated as of the Closing
                           Date, identifying insurers, types of insurance,
                           insurance limits, and policy terms, and otherwise
                           describing the insurance obtained in accordance with
                           the provisions hereof and the Security Documents and
                           (B) certified copies of all policies evidencing such
                           insurance (or certificates therefor signed by the
                           insurer or an agent authorized to bind the insurer).

                  (9)      Opinions of Counsel. The Term Lender Agent shall have
                           received a favorable opinion addressed to the Term
                           Lender Agent, dated as of the Closing Date, in form
                           and substance satisfactory to the Term Lender Agent
                           and the Term Lenders, from counsel to the Borrowers.

                  (10)     Payment of Fees. The Borrowers shall have paid to the
                           Term Lender Agent, for the account of the Term
                           Lenders and the Term Lender Agent, as applicable, all
                           accrued and unpaid fees, costs and expenses incurred
                           by the Term Lenders and the Term Lender Agent to the
                           extent invoiced.

                                      -21-
<PAGE>

                  (11)     Validity of Liens. The Second Interim Order, upon
                           entry thereof, shall be effective to create in favor
                           of the Collateral Agent, a legal, valid, and
                           enforceable first priority (except for Permitted
                           Liens entitled to priority under applicable law) Lien
                           upon the Collateral. All filings, recordings,
                           deliveries of instruments and other actions necessary
                           or desirable in the opinion of the Collateral Agent
                           to protect and preserve such Liens shall have been
                           duly effected. The Collateral Agent shall have
                           received evidence thereof in form and substance
                           satisfactory to the Collateral Agent, the
                           Administrative Agents and the Term Lenders.

                  (12)     Cash Budget. The Term Lender Agent and each Term
                           Lender shall have received (A) the Cash Budget, and
                           (B) rolling sixteen-week weekly projections and cash
                           flow forecasts for the Borrowers through February 1,
                           2003.

                  (13)     First Day Orders. All cash management and other
                           "first day orders" submitted for entry on or about
                           the date of the commencement of the Cases shall be in
                           form and substance satisfactory to the Term Lender
                           Agent and the Term Lenders.

                  (14)     DIP Letter of Credit Agreement. The DIP Letter of
                           Credit Agreement, satisfactory to the Term Lender
                           Agent and the Term Lenders shall concurrently be
                           executed.

                  (15)     Funding Conditions. All the conditions precedent to
                           extension of credit under the DIP Letter of Credit
                           Agreement shall concurrently be satisfied or waived .

                  (ii) Extensions of Credit. In addition to the foregoing, no
Term Lender has any obligation to make the Extension of Credit unless the
following conditions precedent have been satisfied:

                  (1)      Second Interim Order. The Bankruptcy Court shall have
                           entered the Second Interim Order and such Second
                           Interim Order shall be in full force and effect and
                           shall not have been amended, modified, stayed or
                           reversed. If the Second Interim Order is the subject
                           of a pending appeal in any respect, such Second
                           Interim Order, the Extensions of Credit and the
                           performance by any of the Borrowers of any of the
                           Obligations shall not be the subject of a presently
                           effective stay pending appeal. The Borrowers, the
                           Term Lender Agent and the Term Lenders shall be
                           entitled to rely in good faith upon the Second
                           Interim Order notwithstanding objection thereto or
                           appeal therefrom by any interested party. The
                           Borrowers, the Term Lender Agent and the Term Lenders
                           shall be permitted and required to perform their
                           respective obligations in compliance with this
                           Agreement, notwithstanding any such obligation or
                           appeal unless the Second Interim Order has been
                           stayed by a court of competent jurisdiction.

                                      -22-
<PAGE>

                  (2)      Representations True; No Event of Default. Each of
                           the representations and warranties of any of the
                           Borrowers contained in this Agreement, the other
                           Credit Documents or in any document or instrument
                           delivered pursuant to or in connection with this
                           Agreement shall be true as of which they were made
                           and shall also be true at and as of the time of the
                           making of such Extension of Credit, with the same
                           effect as if made at and as of that time (except to
                           the extent changes resulting from transactions
                           contemplated or permitted by this Agreement and the
                           other Credit Documents and the to the extent that
                           such representations and warranties relate expressly
                           to an earlier date) and no Default or Event of
                           Default shall have occurred and be continuing or
                           would result from the making of such Extension of
                           Credit.

                  (3)      No Material Adverse Change. No Material Adverse
                           Change shall have occurred.

                  (4)      No Legal Impediment. No change shall have occurred in
                           any Law or regulations thereunder or interpretations
                           thereof that in the reasonable opinion of any Term
                           Lender would make it illegal for such Term Lender to
                           make such Extension of Credit.

                  (5)      Governmental Regulation. Each Term Lender shall have
                           received such statements in substance and form
                           reasonably satisfactory to such Term Lender as such
                           Term Lender shall require for the purpose of
                           compliance with any applicable regulations of the
                           Comptroller of the Currency or the Board of Governors
                           of the Federal Reserve System.

                  (6)      Proceedings and Documents. All proceedings in
                           connection with the transactions contemplated by this
                           Agreement, the other Credit Documents and all other
                           documents incident thereto shall be reasonably
                           satisfactory in substance and in form to the Term
                           Lenders and to the Term Lender Agent and the Term
                           Lender Agent's Special Counsel, and the Term Lenders,
                           the Term Lender Agent and such counsel shall have
                           received all information and such counterpart
                           originals or certified or other copies of such
                           documents as the Term Lender Agent shall reasonably
                           request.

                  (7)      No Challenge. No proceeding shall have been brought
                           by the Debtors to challenge (a) any of the Liens
                           granted pursuant to the Intercreditor Agreement or
                           the Orders or (b) the lien priorities set forth in
                           the Intercreditor Agreement.

                  (d) Use of Proceeds.

                  (i) The proceeds of the Term Loans shall be used as follows:
         (i) approximately $20,000,000 shall be paid to the Prepetition Lenders
         to refinance the Prepetition Loans, (ii) a portion shall be used to pay
         the fees and expenses of the Term Lenders (including

                                      -23-
<PAGE>

         counsel fees and expenses) and the Term Lender Agent's Special Counsel,
         and (iii) the balance shall be used by Borrowers as provided herein and
         in the Intercreditor Agreement.

                  (ii) In no event shall the proceeds of any Term Loan be used
directly or indirectly by any Person for personal, family, household or
agricultural purposes, (A) for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any "margin stock" (as such term
is defined in Regulation U promulgated by the Board of Governors of the Federal
Reserve System) or (B) to extend credit to others directly or indirectly for the
purpose of purchasing or carrying any such margin stock. The Borrowers represent
and warrant that no Borrower is engaged principally in, or has as one of any
Borrower's important activities, the business of extending credit to others for
the purpose of purchasing or carrying such margin stock.

                  (e) Mandatory Prepayments.

                  (i) The Borrowers shall make any prepayment or other payment
         required from time to time under the Intercreditor Agreement.

                  (ii) If at any time prior to the Termination Declaration Date,
         the Borrowers shall receive or be entitled to receive any proceeds with
         respect to any sale or issuance by the Borrowers of (a) any
         Indebtedness not permitted by Section 10(a) or (b) any additional
         equity, the Borrowers shall pay to the Collateral Agent, an amount
         equal to such proceeds to be applied in accordance with the Cash
         Waterfall.

                  (iii) If at any time prior to the Termination Declaration
         Date, the Borrowers shall receive or be entitled to receive proceeds of
         any Designated Assets, the Borrowers shall pay to the Collateral Agent,
         an amount equal to such proceeds, to be applied by the Collateral Agent
         in accordance with the Cash Waterfall.

                  (iv) Any amounts prepaid pursuant to this Section shall be in
         addition to, and not in lieu of, all payments otherwise required to be
         paid under the Credit Documents at the time of such prepayment.

                  (f) Optional Prepayment of Term Loans.

         The Borrowers may, upon five Business Days' notice to the Term Lender
Agent (and the Term Lender Agent will promptly give notice to the other Term
Lenders), from time to time and without premium or penalty, prepay the Term
Loans in whole or in part, so long as the aggregate amount of all partial
prepayments of principal on the Term Loans equals $5,000,000 or any higher
integral multiple thereof. Any amounts prepaid pursuant to this Section shall be
in addition to, and not in lieu of, all payments otherwise required to be paid
under the Credit Documents at the time of such prepayment. Any such payment will
be paid to the Collateral Agent for application in accordance with the Cash
Waterfall and, in any event, shall be applied first to the Tier-A Term Loans and
then to the Tier-B Term Loans.

                                      -24-
<PAGE>

                  (g) Interest Rates and Fees.

                  (i) The Obligations under the Term Notes shall bear interest
         as provided therein.

                  (ii) Upon the occurrence and during the continuance of a
         Default or Event of Default, all Obligations shall bear interest on
         each day outstanding at the Default Rate.

                  (iii) Borrowers will pay to Term Lender Agent, for its own
         account, an arrangement fee of $100,000, which fee shall be fully
         earned and due and payable on the Closing Date. The amount of such
         arrangement fee shall be reduced by the amounts received and retained
         by the Term Lender Agent pursuant to that certain letter agreement
         dated September 30, 2002, between the Term Lender Agent and EOTT OLP.

                  (iv) In consideration of each Term Lender's commitment to fund
         its Percentage Share of the Term Loans, Borrowers will pay to Term
         Lender Agent, for the account of each Term Lender in accordance with
         such Term Lender's Percentage Share, a facility fee in the aggregate
         amount of $750,000, which fee shall be fully earned and due and payable
         on the Closing Date.

                  (v) In consideration of Term Lenders' Extension of Credit,
         Borrowers will pay to Term Lender Agent, for the account of each Term
         Lender in accordance with such Term Lender's Percentage Share, a
         deferred financing fee in the aggregate amount of $2,000,000 on, at
         Borrowers' option, either (1) the Closing Date or (2) the earlier to
         occur of (A) the Maturity Date and (B) the date the Term Loans are paid
         in full (whether by prepayment or upon acceleration). In the event
         Borrowers prepay the Term Loans in full prior to the Maturity Date and
         no Event of Default is then continuing, the aggregate amount of the
         financing fee shall be reduced to $1,000,000. The deferred financing
         fee shall be fully earned on the Closing Date.

3.       PAYMENTS TO TERM LENDERS.

                  (a) General Procedures. The Debtors will make each payment
that they owe under the Credit Documents (other than fees payable to the Lender
Parties on the Closing Date) to the Collateral Agent for the account of the
Lender Party to whom such payment is owed in lawful money of the United States
of America, without set-off, deduction or counterclaim and in immediately
available funds. Each such payment must be received by the Collateral Agent not
later than noon, New York, New York time, on the date such payment becomes due
and payable. Any payment received by the Collateral Agent after such time will
be deemed to have been made on the next following Business Day. Should any such
payment become due and payable on a day other than a Business Day, the maturity
of such payment shall be extended to the next succeeding Business Day, and, in
the case of a payment of principal or past due interest, interest shall accrue
and be payable thereon for the period of such extension in the Credit Document
under which such payment is due. Each payment under a Credit Document shall be
due and payable at the place provided therein. When the Collateral Agent
collects or receives money on account of the Obligations, the Collateral Agent
shall distribute all money so collected or received to each Lender Party in
accordance with the Cash Waterfall.

                                      -25-
<PAGE>

                  (b) Payment Obligations Absolute. Notwithstanding any payment
by the Debtors to the Collateral Agent pursuant to Section 3(a), nothing
contained in this Agreement is intended to or shall (a) impair, as among the
Debtors and the Lender Parties, the obligation of the Debtors, which is absolute
and unconditional, to pay to the Lender Parties any Obligations payable by the
Debtors under this Agreement or any other Credit Document as and when the same
shall become due and payable in accordance with their respective terms, or (b)
prevent the Lender Parties from exercising all remedies otherwise permitted by
applicable law upon default under this Agreement or any other Credit Document,
subject to the Intercreditor Agreement and the Orders.

                  (c) Application of Payments made to Term Lender Agent. Subject
to the provisions of the Intercreditor Agreement, funds received by the Term
Lender Agent in accordance with the Cash Waterfall shall be applied as follows:

                  (1)      first, to pay expenses incurred by the Term Lender
                           Agent;

                  (2)      second, for the payment of interest on the Tier-A
                           Term Loans which is then due;

                  (3)      third, to the payment of required principal payments
                           on the Tier-A Term Loans which are then due;

                  (4)      fourth, to the payment of interest on the Tier-B Term
                           Loans which is then due;

                  (5)      fifth, to the payment of required principal payments
                           on the Tier-B Term Loans which are then due; and

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

         If any Term Lender owes payments to the Term Lender Agent hereunder,
         any amounts otherwise distributable under this Section to such Term
         Lender shall be deemed to belong to Term Lender Agent to the extent of
         such unpaid payments, and the Term Lender Agent shall apply such
         amounts to make such unpaid payments rather than distribute such
         amounts to such Term Lender. All distributions of amounts described in
         subsections 2 through 5 shall be made by Term Lender Agent to each Term
         Lender in accordance with such Term Lender's Percentage Share.

                  (d) Capital Reimbursement. If either (i) the introduction or
implementation of or the compliance with or any change in or in the
interpretation of any Law or (ii) the introduction or implementation of or the
compliance with any request, directive or guideline from any central bank or
other governmental authority (whether or not having the force of Law) affects or
would affect the amount of capital required or expected to be maintained by any
Lender Party or any Person controlling any Lender Party, then, within five
Business Days after demand by such Lender Party, Borrowers will pay to such
Lender Party, from time to time as specified by such Lender Party, such
additional amount or amounts as such Lender Party shall determine to be
appropriate to compensate such Lender Party or any Person controlling such
Lender Party in light of such circumstances, to the extent that such Lender
Party reasonably determines that the amount of any such capital would be
increased or the rate of return on any such capital would be

                                      -26-
<PAGE>

reduced by, or in whole or in part based on, the existence of the face amount of
such Lender Party's Term Loans.

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

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

                  (ii) shall change, impose, modify, apply or deem applicable
         any reserve, special deposit or similar requirements in respect of any
         Term Loan or against assets of, deposits with or for the account of, or
         credit extended by, such Lender Party; or

                  (iii) shall impose on any Lender Party any other condition
         affecting any Term Loan, the result of which is to increase the cost to
         any Lender Party of making any Term Loan or to reduce the amount of any
         sum receivable by any Lender Party in respect of any Term Loan by an
         amount deemed by any Lender Party to be material,

         then such Lender Party shall promptly notify the Term Lender Agent and
         the Borrower Representative in writing of the happening of such event
         and of the amount required to compensate such Lender Party for such
         event (on an after-tax basis, taking into account any taxes on such
         compensation), whereupon Borrower shall, within five Business Days
         after demand therefor by such Lender Party, pay such amount to the Term
         Lender Agent for the account of such Lender Party.

                  (f) Notice; Change of Applicable Lending Office. A Lender
Party shall notify the Borrower Representative of any event occurring after the
date of this Agreement that will entitle such Lender Party to compensation under
Section 3(d) or (e) as promptly as practicable, but in any event within 90 days
after such Lender Party obtains actual knowledge thereof; provided, however,
that (i) if such Lender Party fails to give such notice within 90 days after it
obtains actual knowledge of such an event, such Lender Party shall, with respect
to compensation payable pursuant to Section 3(d) or (e) in respect of any costs
resulting from such event, only be entitled to payment under Section 3(d) or (e)
for costs incurred from and after the date 90 days prior to the date that such
Lender Party does give such notice and (ii) such Lender Party will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion of
such Lender Party, be disadvantageous to such Lender Party, except that such
Lender Party shall have no obligation to designate an Applicable Lending Office
located in the United States of America. Each Lender Party will furnish to the
Borrower Representative a certificate setting forth the basis and amount of each
request by such Lender Party for compensation under Section 3 (d) or (e).

                                      -27-
<PAGE>

                  (g) Reimbursable Taxes.

         Borrowers covenant and agree that:

                  (i) Borrowers will indemnify each Lender Party against and
         reimburse each Lender Party for all present and future stamp and other
         taxes, levies, costs and charges whatsoever imposed, assessed, levied
         or collected on or in respect of this Agreement (whether or not legally
         or correctly imposed, assessed, levied or collected), excluding,
         however, any taxes imposed on or measured by the overall net income of
         such Lender Party or any Applicable Lending Office of such Lender Party
         by any jurisdiction in which such Lender Party or any such Applicable
         Lending Office is located (all such non-excluded taxes, levies, costs
         and charges being collectively called "REIMBURSABLE TAXES" in this
         Section). Such indemnification shall be on an after-tax basis, taking
         into account any taxes imposed on the amounts paid as indemnity.

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

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

                                      -28-
<PAGE>

         by Law and which, pursuant to applicable provisions of (i) an income
         tax treaty between the United States and the country of residence of
         such Lender Party providing the forms or statements, (ii) the Tax Code
         or (iii) any applicable rules or regulations thereunder, permit
         Borrowers to make payments hereunder for the account of such Lender
         Party free of such deduction or withholding of income or similar taxes.

4.       INTENTIONALLY OMITTED.

5.       INTENTIONALLY OMITTED.

6.       INTENTIONALLY OMITTED.

7.       OTHER ACTIONS OF DEBTORS.

                  (a)      Each Debtor shall at any time and from time to time
                           take such steps as the Term Lender Agent may request
                           for the Collateral Agent to (i) obtain an
                           acknowledgment, in form and substance satisfactory to
                           the Collateral Agent, of any bailee having possession
                           of any of the Collateral that the bailee holds such
                           Collateral for the Collateral Agent, (ii) obtain
                           "control" of any investment property, deposit
                           accounts, letter-of-credit rights or electronic
                           chattel paper (as such terms are defined in Article 9
                           of the UCC with corresponding provisions in Sections
                           9-104, 9-105, 9-106 and 9-107, relating to what
                           constitutes "control" for such items of Collateral),
                           with any agreements establishing control to be in
                           form and substance satisfactory to the Collateral
                           Agent, and (iii) otherwise insure the continued
                           perfection and priority of the Collateral Agent's
                           security interest in any of the Collateral and of the
                           preservation of its rights therein.

                  (b)      Each Debtor shall at any time and from time to time
                           take such steps as the Collateral Agent may request
                           with respect to the creation and perfection of valid,
                           enforceable, first priority mortgage Liens on and/or
                           security interests in any real property or fixtures
                           included in the Collateral owned or leased by such
                           Debtor, including, without limitation, (i) the
                           execution, delivery, acknowledgement, filing and
                           recordation of such mortgages, deeds of trust,
                           fixture filings and similar instruments as the
                           Collateral Agent deems necessary or desirable to the
                           granting of a valid, enforceable first priority
                           mortgage Lien on any such property or fixtures and
                           (ii) the delivery of such mortgagee's title
                           insurance, title opinions and other legal opinions as
                           the Collateral Agent deems necessary or desirable to
                           better confirm the granting to the Collateral Agent
                           by the applicable Debtor of such Lien on such
                           Debtor's real property or fixtures included in the
                           Collateral owned or leased by such Debtor.

                  (c)      Nothing contained in this Agreement shall be
                           construed to narrow the scope of the Collateral
                           Agent's security interest in any of the Collateral or
                           the perfection or priority thereof or to impair or
                           otherwise limit any of the rights, powers, privileges
                           or remedies of the Collateral Agent hereunder.

                                      -29-
<PAGE>

8. REPRESENTATIONS AND WARRANTIES. Each Debtor hereby makes the following
representations and warranties, each of which is a continuing representation and
warranty, the continuing truth and accuracy of each of such representations and
warranties being a continuing condition of financing of Borrowers by the Term
Lenders:

                  (a)      Such Debtor is duly organized, formed or incorporated
                           and validly existing under the Laws of its
                           jurisdiction of organization or incorporation, having
                           all powers required to carry on its business. Such
                           Debtor has the partnership, corporate or limited
                           liability company, as applicable, power to execute,
                           deliver and perform the terms and provisions of this
                           Agreement and the other Credit Documents. Such Debtor
                           has taken or caused to be taken all necessary
                           partnership, corporate or limited liability company,
                           as applicable, action to authorize the execution,
                           delivery and performance of this Agreement and the
                           other Credit Documents. Each Borrower is duly
                           authorized to borrow funds hereunder.

                  (b)      Except as set forth in Section 8(b) of the Disclosure
                           Schedule, upon entry of the Second Interim Order,
                           this Agreement and the other Credit Documents
                           constitute and will constitute legal, valid and
                           binding obligations of such Debtor, enforceable in
                           accordance with their respective terms.

                  (c)      Such Debtor is in material compliance with the
                           requirements of all applicable laws, rules,
                           regulations and orders of any governmental authority
                           or Tribunal relating to its business as presently
                           conducted or contemplated, including, without
                           limitation, all permits, licensing and approval
                           requirements; ERISA; the Tax Code; all limitations,
                           restrictions, conditions, standards, prohibitions,
                           requirements, obligations, schedules and timetables
                           contained in any Environmental Law, or in any
                           regulation, code, plan, order, decree, judgment,
                           injunction, notice or demand letter issued, entered,
                           promulgated or approved thereunder, except as set
                           forth in Section 8(c) of the Disclosure Schedule and
                           to the extent that all such instances of
                           noncompliance (if any) in the aggregate could not
                           cause a Material Adverse Change.

                  (d)      No action of, or filing with, any governmental or
                           public body or authority (other than as set forth in
                           Section 8(d) of the Disclosure Schedule) is required
                           in connection with the execution, delivery and
                           performance of this Agreement, the other Credit
                           Documents or any of the instruments or documents to
                           be delivered pursuant hereto or thereto.

                  (e)      The execution and delivery by such Debtor of the
                           Credit Documents to which it is a party, the
                           performance by such Debtor of its obligations under
                           such Credit Documents and the consummation of the
                           transactions contemplated by the various Credit
                           Documents do not and will not (i) except as set forth
                           in Section 8(e) of the Disclosure Schedule, conflict
                           with any provision of (1) any law, or (2) the
                           organizational or other charter

                                      -30-
<PAGE>

                           documents of such Debtor, or (ii) result in or
                           require the creation of any Lien upon any assets or
                           properties of such Debtor or any of its Affiliates,
                           except as expressly contemplated in the Credit
                           Documents. Except as expressly contemplated in the
                           Credit Documents, no permit, consent, approval,
                           authorization or order of and no notice to or filing,
                           registration or qualification with, any Tribunal or
                           third party is required in connection with the
                           execution, delivery or performance by such Debtor of
                           any Credit Document or to consummate any transactions
                           contemplated by the Credit Documents, other than
                           consents, approvals, authorizations or orders that
                           have been obtained or notices given or filings made
                           prior to the date hereof.

                  (f)      Such Debtor's place of incorporation, organization or
                           formation, as applicable, is the State of Delaware,
                           and its principal place of business and chief
                           executive office, where its records are maintained
                           are disclosed on the signature page hereto. Except as
                           set forth in Section 8(f) of the Disclosure Schedule,
                           such Debtor does not use any trade styles, trade
                           names or fictitious partnership names.

                  (g)      Except as set forth in Section 8(g) of the Disclosure
                           Schedule, upon entry of the Second Interim Order, all
                           filings, assignments, pledges and deposits of
                           documents or instruments will have been made and all
                           other actions will have been taken that are necessary
                           or advisable, under applicable law, to establish and
                           perfect the Collateral Agent's security interest in
                           the Collateral. The Collateral and the Collateral
                           Agent's rights with respect to the Collateral are not
                           subject to any set-off, claims, withholdings or other
                           defenses. The Debtors are the owners of the
                           Collateral, free from any lien, security interest,
                           encumbrance or any other claim of demand except for
                           Permitted Liens and as otherwise set forth in the
                           Intercreditor Agreement.

                  (h)      All Debtors are subject as debtor to a Case in the
                           Bankruptcy Court.

                  (i)      After giving effect to the transactions contemplated
                           by this Agreement and the other Credit Documents,
                           there does not exist at the date hereof any condition
                           or event which constitutes a Default hereunder or
                           which after notice or lapse of time, or both, would
                           constitute such a Default hereunder.

                  (j)      Subject to the matters described in Section 8(j) of
                           the Disclosure Schedule: (a) no Termination Event has
                           occurred with respect to any ERISA Plan and all ERISA
                           Affiliates are in compliance with ERISA in all
                           material respects excluding any such failure that
                           could not reasonably be expected to result in a
                           Material Adverse Change, (b) no ERISA Affiliate is
                           required to contribute to, or has any other absolute
                           or contingent Liability in respect of, any
                           "multiemployer plan" as defined in Section 4001 of
                           ERISA which could reasonably be expected to result in
                           a Material Adverse Change, and (c) no "accumulated
                           funding deficiency" (as defined in Section 412(a) of
                           the Tax Code) exists with respect to any

                                      -31-
<PAGE>

                           ERISA Plan, whether or not waived by the Secretary of
                           the Treasury or his delegate and the current value of
                           each ERISA Plan's benefits does not exceed the
                           current value of such ERISA Plan's assets available
                           for the payment of such benefits except to the extent
                           such excess could not reasonably be expected to
                           result in a Material Adverse Change.

                  (k)      Without limiting the provisions of Section 8(c):

                  (i)      No notice, notification, demand, request for
                           information, citation, summons or order has been
                           issued, no complaint has been filed, no penalty has
                           been assessed and no investigation or review is
                           pending or threatened by any Tribunal or any other
                           Person with respect to any of the following except
                           (1) as set forth in the Section 8(k)(i) of the
                           Disclosure Schedule or (2) to the extent the same
                           could not reasonably be expected to result in a
                           Material Adverse Change: (A) any alleged generation,
                           treatment, storage, recycling, transportation,
                           disposal or Release of any Hazardous Materials,
                           either by any Debtor or on any property owned by such
                           Debtor, (B) any remedial action that might be needed
                           to respond to any such alleged generation, treatment,
                           storage, recycling, transportation, disposal or
                           Release, or (C) any alleged failure by any Debtor to
                           have any permit, license or authorization required in
                           connection with the conduct of its business or with
                           respect to any such generation, treatment, storage,
                           recycling, transportation, disposal or Release.

                  (ii)     Except as set forth in Section 8(k)(ii) of the
                           Disclosure Schedule, no Debtor otherwise has any
                           known material contingent Liability in connection
                           with any alleged generation, treatment, storage,
                           recycling, transportation, disposal or Release of any
                           Hazardous Materials that has caused, or could
                           reasonably be expected to cause, a Material Adverse
                           Change.

                  (iii)    Except as set forth in Section 8(k)(iii) of the
                           Disclosure Schedule, no Debtor has handled any
                           Hazardous Materials, other than as a generator, on
                           any properties now or previously owned or leased by
                           any Debtor to an extent that such handling has
                           caused, or could cause, a Material Adverse Change.

                  (iv)     Except as set forth in Section 8(k)(iv) of the
                           Disclosure Schedule or to the extent that the
                           following in the aggregate has not caused and could
                           not cause a Material Adverse Change:

                                    (1)      no PCBs are or have been present at
                                             any properties now or previously
                                             owned or leased by any Debtor;

                                    (2)      no asbestos is or has been present
                                             at any properties now or previously
                                             owned or leased by any Debtor;

                                      -32-
<PAGE>

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

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

                  (v)      Except as set forth in Section 8(k)(v) of the
                           Disclosure Schedule or to the extent that the
                           following in the aggregate has not caused and could
                           not cause a Material Adverse Change, no Debtor has
                           transported or arranged for the transportation of any
                           Hazardous Material to any location listed on the
                           National Priorities List under CERCLA, any location
                           listed for possible inclusion on the National
                           Priorities List by the Environmental Protection
                           Agency in CERCLIS, nor, except as set forth in
                           Section 8(k)(v) of the Disclosure Schedule or to the
                           extent that such has not caused and could not cause a
                           Material Adverse Change, any location listed on any
                           similar state list or which is the subject of
                           federal, state or local enforcement actions or other
                           investigations that may lead to claims against such
                           Debtor for clean-up costs, remedial work, damages to
                           natural resources or for personal injury claims,
                           including, but not limited to, claims under CERCLA.

                  (vi)     Except as set forth in Section 8(k)(vi) of the
                           Disclosure Schedule or to the extent that such has
                           not caused and could not cause a Material Adverse
                           Change, no property now or previously owned or leased
                           by any Debtor is listed or proposed for listing on
                           the National Priorities List promulgated pursuant to
                           CERCLA, in CERCLIS, nor on any similar state list of
                           sites requiring investigation or clean-up.

                  (vii)    Except as set forth in Section 8(k)(vii) of the
                           Disclosure Schedule or to the extent that such has
                           not caused and could not cause a Material Adverse
                           Change, there are no Liens arising under or pursuant
                           to any Environmental Laws on any of the real
                           properties or properties owned or leased by any
                           Debtor, and no governmental actions of which any
                           Debtor is aware have been taken or are in process
                           that could subject any of such properties to such
                           Liens; nor would any Debtor be required to place any
                           notice or restriction relating to the presence of
                           Hazardous Materials at any properties owned by it or
                           in any deed to such properties.

                  (viii)   All environmental investigations, studies, audits,
                           tests, reviews or other analyses for ground water or
                           soil contamination relating to the Release of
                           Hazardous Materials conducted by or which are in the
                           possession of such Debtor in relation to any
                           properties or facility now or previously owned or
                           leased by such Debtor are available for inspection by
                           the Term Lender Agent or the Collateral Agent at the
                           Borrower Representative's offices or facilities.

                                      -33-
<PAGE>

                  (l)      No Debtor is subject to regulation under the Public
                           Utility Holding Company Act of 1935, the Investment
                           Company Act of 1940 (as any of the preceding acts
                           have been amended) or any other law which regulates
                           the incurring by such Debtor of indebtedness,
                           including laws relating to common contract carriers
                           or the sale of electricity, gas, steam, water or
                           other public utility services. Such Debtor is not
                           subject to regulation under the Federal Power Act
                           that would violate, result in a default under or
                           prohibit the effectiveness or the performance of any
                           of the provisions of the Credit Documents.

                  (m)      None of the following securities is evidenced by a
                           certificate: (i) the limited partner interest of EOTT
                           MLP in EOTT OLP; (ii) the membership interest of EOTT
                           MLP in EOTT GP; (iii) the limited partner interest of
                           EOTT OLP in any of EOTT Canada, EOTT Liquids or EOTT
                           Pipeline; or (iv) the general partner interest of
                           EOTT GP in any of EOTT OLP, EOTT Canada, EOTT Liquids
                           or EOTT Pipelines.

                  (n)      No Debtor is in default in the performance of any of
                           the covenants and agreements contained in any Credit
                           Document. No event has occurred and is continuing
                           that constitutes a Default.

                  (o)      EOTT MLP has heretofore delivered to the Term Lender
                           Agent true, correct and complete copies of the
                           Initial Financial Statements. The Initial Financial
                           Statements fairly present (subject to normal and
                           recurring adjustments in conformity with GAAP) EOTT
                           MLP's Consolidated financial position at the date
                           thereof, the Consolidated results of EOTT MLP's
                           operations for the periods thereof and Consolidated
                           cash flows for the periods thereof. The Initial
                           Financial Statements were prepared in accordance with
                           GAAP.

                  (p)      Except as shown in the Initial Financial Statements
                           or disclosed in Section 8(p) of the Disclosure
                           Schedule (with respect to Liabilities described below
                           that will give rise to Priority Claims) or the
                           Bankruptcy Schedule (with respect to all other
                           Liabilities described below), as of the Closing Date,
                           no Debtor has any outstanding Liabilities of any kind
                           (including contingent obligations, tax assessments
                           and unusual forward or long-term commitments) which
                           are, in the aggregate, material to such Debtor or
                           material with respect to EOTT MLP's Consolidated
                           financial condition.

                  (q)      Except as shown in the Initial Financial Statements
                           or disclosed in Section 8(q) of the Disclosure
                           Schedule, as of the Closing Date, no Debtor is
                           subject to or restricted by any franchise, contract,
                           deed, charter restriction or other instrument or
                           restriction that could cause a Material Adverse
                           Change.

                                      -34-
<PAGE>

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

                  (s)      As of the Closing Date, except for the Cases, as
                           disclosed in the Initial Financial Statements or in
                           Section 8(s) of the Disclosure Schedule: (i) there
                           are no actions, suits or legal, equitable,
                           arbitrative or administrative proceedings pending or,
                           to the knowledge of any Debtor threatened, against
                           any Debtor or affecting any Collateral (including,
                           without limitation, any that challenge or otherwise
                           pertain to any Debtor's title to any Collateral)
                           before any Tribunal that could cause a Material
                           Adverse Change and (ii) there are no outstanding
                           judgments, injunctions, writs, rulings or orders by
                           any such Tribunal against any Debtor or any Debtor's
                           stockholders, partners, directors or officers or
                           affecting any Collateral that could cause a Material
                           Adverse Change.

                  (t)      As of the Closing Date, except as disclosed in
                           Section 8(t) of the Disclosure Schedule, neither the
                           business nor the properties of any Debtor has been
                           affected by any fire, explosion, accident, strike,
                           lockout or other labor dispute, drought, storm, hail,
                           earthquake, embargo, act of God or of the public
                           enemy or other casualty (whether or not covered by
                           insurance), which could cause a Material Adverse
                           Change.

                  (u)      Neither EOTT MLP nor any Borrower presently has any
                           Subsidiary or owns any capital stock in any other
                           corporation or association except those listed in
                           Section 8(u) of the Disclosure Schedule. No Debtor is
                           a member of any general or limited partnership,
                           limited liability company, joint venture or
                           association of any type whatsoever except those
                           listed in Section 8(u) of the Disclosure Schedule.
                           Each of EOTT MLP and EOTT OLP owns, directly or
                           indirectly, the entire equity interest in each of its
                           Subsidiaries listed in Section 8(u) of the Disclosure
                           Schedule.

                  (v)      Section 8(v) of the Disclosure Schedule contains a
                           complete and correct list, as of the date of this
                           Agreement, of each credit agreement, loan agreement,
                           indenture, SCTSC Purchase Agreement, guaranty or
                           other

                                      -35-
<PAGE>

                           arrangement providing for or otherwise relating to
                           any Indebtedness or any extension of credit (or
                           commitment for any extension of credit), or guaranty
                           by, any Debtor, or to which any Debtor is subject, in
                           excess of $1,000,000 with respect to any single
                           Person and such Person's Affiliates taken as whole,
                           other than the Credit Documents. The aggregate
                           principal or face amount outstanding or that may
                           become outstanding under each such arrangement is
                           correctly described in Section 8(v) of the Disclosure
                           Schedule.

                  (w)      The Debtors have delivered to the Term Lender Agent
                           and each of the Term Lenders an initial sixteen-week
                           weekly cash revenue and expense budget (as
                           supplemented from time to time on a rolling
                           sixteen-week basis and approved by the Term Lender
                           Agent as to form and substance for each subsequent
                           week, the "CASH BUDGET"). The Cash Budget has been
                           prepared in good faith based on reasonable
                           assumptions. The initial Cash Budget (the "INITIAL
                           CASH BUDGET") is attached hereto as Exhibit G. The
                           projections are based upon reasonable estimates and
                           assumptions have been prepared on the basis of
                           assumptions stated therein and reflect the reasonable
                           estimates of the Borrowers of the results of
                           operations and other information projected therein.

                  (x)      The state of affairs referred to in the Disclosure
                           Schedule, and those in any supplement thereto, relate
                           only to the representations and warranties in the
                           Section or paragraph of the Agreement that
                           corresponds with the Section reference to which the
                           disclosures in the Disclosure Schedule expressly
                           refer or otherwise incorporate by express reference
                           and not to any other representation or warranty in
                           this Agreement.

9. AFFIRMATIVE COVENANTS. To conform with the terms and conditions under which
each Term Lender is willing to have Extensions of Credit outstanding to
Borrower, and to induce each Term Lender to enter into this Agreement and to
make Extensions of Credit, the Debtors covenant and agree jointly and severally
that until the full and final payment in cash of the Obligations, unless the
Majority Term Lenders have has previously agreed otherwise:

                  (a) Payment and Performance. Each Debtor will pay all amounts
due under the Credit Documents to which it is a party in accordance with the
terms thereof and will observe, perform and comply with every covenant, term and
condition expressed in the Credit Documents to which it is a party.

                  (b) Payment of Expenses. All Borrower Expenses shall be part
of the Obligations. Borrower shall pay any Lender Party, on such Lender Party's
demand, any and all Borrower Expenses which such Lender Party may pay in
connection with the provisions hereof.

                  (c) Instruments, Documents, Securities or Chattel Paper. Each
Debtor shall promptly notify the Collateral Agent of any instruments, documents,
securities or chattel paper that are owned or acquired by such Debtor. At any
time and from time to time, upon the demand of the Term Lender Agent, such
Debtor shall deliver and pledge to the Collateral Agent, duly

                                      -36-
<PAGE>

endorsed and/or accompanied by such instruments of assignment and transfer in
such form and substance as the Term Lender Agent may reasonably request, any and
all instruments, documents, securities and/or chattel paper which are included
in the Collateral as the Term Lender Agent may request. Such Debtor shall
maintain and safeguard any and all documents, instruments and chattel paper in
its possession and its individual books and records relating to the Collateral
in a commercially reasonable manner and cause the security interest granted
herein to the Collateral Agent to be marked thereon.

                  (d) Books, Financial Statements and Reports. Each Debtor will
at all times maintain full and accurate books of account and records. EOTT MLP
will maintain and will cause its Subsidiaries to maintain a standard system of
accounting, will maintain its Fiscal Year and will furnish the following
statements and reports to the Term Lender Agent at Borrowers' expense:

                  (i) As soon as available, and in any event within 120 days
         after the end of each Fiscal Year, commencing with Fiscal Year 2002 (A)
         complete Consolidated financial statements of EOTT MLP as of, or for
         the period ending, December 31 of the preceding year, together with all
         notes thereto, prepared in reasonable detail in accordance with GAAP,
         and (B) consolidating unaudited balance sheets and statements of income
         of each Consolidated Subsidiary of EOTT MLP. The Consolidated financial
         statements referred to in subclause (A) of the preceding sentence shall
         set forth in comparative form the corresponding figures for the
         preceding Fiscal Year. In addition, within 120 days after the end of
         each Fiscal Year, commencing with Fiscal Year 2002 EOTT MLP will
         furnish a certificate signed by such accountants (1) stating that they
         have read this Agreement, and (2) further stating that in making their
         examination and reporting on the Consolidated financial statements
         described above they obtained no knowledge of any Default existing at
         the end of such Fiscal Year, or, if they did so conclude that a Default
         existed, specifying its nature and period of existence.

                  (ii) As soon as available, and in any event within 45 days
         after the end of each of Fiscal Quarter of each Fiscal Year, (1) EOTT
         MLP's Consolidated balance sheet as of the end of such Fiscal Quarter
         and Consolidated statements of EOTT MLP's operations and cash flows for
         such Fiscal Quarter and for the period from the beginning of the then
         current Fiscal Year to the end of such Fiscal Quarter, (2)
         consolidating balance sheets and statements of income of each
         Consolidated Subsidiary as of (A) the end of such Fiscal Quarter or (B)
         for such Fiscal Quarter and for the period from the beginning of the
         then current Fiscal Year to the end of such Fiscal Quarter, all in
         reasonable detail and prepared in accordance with GAAP, subject to
         changes resulting from normal and recurring adjustments in conformity
         with GAAP, and as soon as available, and in any event within 60 days
         after the end of the last Fiscal Quarter of each Fiscal Year, EOTT
         MLP's unaudited Consolidated balance sheet as of the end of such Fiscal
         Quarter and Consolidated statement of operations for such Fiscal
         Quarter and for the period from the beginning of the current Fiscal
         Year to the end of such Fiscal Quarter.

                  (iii) As soon as available, and in any event within 45 days
         after the end of each calendar month, (1) EOTT MLP's unaudited
         Consolidated balance sheet as of the end of such month and an unaudited
         Consolidated statement of EOTT MLP's earnings for such

                                      -37-
<PAGE>

         calendar month, all in reasonable detail and prepared in accordance
         with GAAP, subject to changes resulting from normal and recurring
         adjustments in conformity with GAAP and (2) a report setting forth for
         such month aggregate volumes for all marketing activities of all
         Debtors.

                  (iv) Together with each set of financial statements furnished
         under subsections (i), (ii) and (iii) above, a certificate in the form
         of Exhibit C signed by the chief financial officer or treasurer of EOTT
         Energy stating that such financial statements are accurate and complete
         in all material respects (subject to normal and recurring adjustments
         in conformity with GAAP in the case of unaudited financial statements),
         stating that he has reviewed the Credit Documents containing the
         calculations and stating that no Default exists at the end of such
         Fiscal Quarter or month, respectively, or at the time of such
         certificate or specifying the nature and period of existence of any
         such Default.

                  (v) Promptly, copies of all material pleadings, notices,
         orders and other papers filed in the Cases and copies of all reports
         filed with the United States Trustee in the Cases.

                  (vi) No later than 12:00 pm (noon) on Monday of each week, (1)
         the Cash Budget, (2) a cash flow report showing actual performance for
         each weekly period reflected in the Cash Budget and variance of actual
         performance from projected performance in the Cash Budget, commencing
         the week ended October 12, 2002, (3) a Barrel Report, (4) a Weekly
         Compliance Certificate and (5) a true, correct and complete copy of the
         Borrowing Base Report provided to the LC Agent with such supporting
         information in detail as may from time to time be prescribed by the LC
         Agent, duly completed and certified by an authorized officer of EOTT
         Energy

                  (vii) Promptly upon their becoming available, copies of all
         financial statements, reports, notices and proxy statements sent by
         EOTT MLP to its unit holders and all registration statements,
         prospectus supplements, periodic reports and other statements and
         schedules filed by EOTT MLP with any securities exchange, the
         Securities and Exchange Commission or any similar governmental
         authority.

                  (viii) From time to time upon request, a written or oral
         report, in reasonable detail, as to the status of the Reorganization
         Plan.

                  (ix) On each Business Day, (1) a Cash Flow Report in the form
         of Exhibit D duly completed by an authorized officer of EOTT Energy, as
         of the preceding Business Day and (2) a statement reconciling such
         report with the most recent Cash Flow Report previously delivered
         pursuant to this subsection (ix).

                  (x) As soon as available, and in any event within 45 days
         after the end of Fiscal Year 2002, an environmental compliance
         certificate signed by the chief executive officers of EOTT GP and EOTT
         Energy in the form attached hereto as Exhibit E. Further, if requested
         by the Term Lender Agent, the Debtors shall permit and cooperate with
         an environmental and safety review made in connection with the
         operations of the

                                      -38-
<PAGE>

         Debtors' properties one time during each Fiscal Year, by consultants
         selected by the Term Lender Agent which review shall, if requested by
         the Term Lender Agent, be arranged and supervised by environmental
         legal counsel for the Term Lender Agent, all at the Debtors' cost and
         expense. The consultant shall render an oral or written report, as
         specified by the Term Lender Agent, based upon such review at the
         Debtors' cost and expense and a copy thereof will be provided to the
         Debtors.

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

                  (xii) On or about the fifth (5th) (but no later than the
         eighth (8th)) and on or about the twentieth (20th) (but no later than
         the twenty-third (23rd)) day of each calendar month and upon request by
         the Term Lender Agent an Open Position Report in the form of Exhibit F,
         with such supporting information in detail as may from time to time be
         prescribed by the Term Lender Agent, duly completed by an authorized
         officer of EOTT Energy as of the last day of the preceding month if
         delivered on or about the fifth (5th) day of a month, as of the
         fifteenth (15th) day if delivered on or about the twentieth (20th) day
         of a month, or as of the date otherwise requested. Such report shall
         include (A) a listing of all long and short positions; (B) crude oil,
         refined petroleum product and NGL location information; (C) pricing
         information published by an independent publication acceptable to the
         Term Lender Agent; and (D) a report on a mark to market basis of all
         Fixed Price Contracts together with a complete list of all net realized
         gains and losses on any Fixed Price Contracts in form satisfactory to
         the Term Lender Agent.

                  (xiii) On or before the tenth (10th) Business Day following
         receipt by any Borrower or any other Debtor, a copy of any account
         statement received from any bank, securities intermediary, commodities
         or futures broker or other institution with whom such Borrower or such
         Debtor maintains any deposit, investment, trading or other account.

                  (xiv) Within 30 days after the end of each calendar month, a
         copy of the Lease Volume Report attached hereto as Exhibit K.

                  (xv) Promptly, from time to time, such other information,
         documents or reports regarding any Borrower or any other Debtor
         (including accountants' management letters and updates to the Cash
         Budget) as the Term Lender Agent may request, including any regulatory
         filings.

                  (e) Other Information and Inspections. In each case, subject
to the last sentence of this Section 9(e), each Debtor will furnish to each Term
Lender any information that the Term Lender Agent or any Term Lender may from
time to time request concerning any covenant, provision or condition of the
Credit Documents or any matter in connection with the Debtors'

                                      -39-
<PAGE>

businesses and operations. In each case, subject to the last sentence of this
Section 9(e), each Debtor will permit representatives appointed by the Term
Lender Agent (including independent accountants, auditors, agents, attorneys,
appraisers and any other Persons) to visit and inspect during normal business
hours any of such Debtor's property, including its books of account, other books
and records and any facilities or other business assets, to make extra copies
therefrom and photocopies and photographs thereof and to write down and record
any information such representatives obtain, and each Debtor shall permit the
Term Lender Agent or its representatives to investigate and verify the accuracy
of the information furnished to the Term Lender Agent or any Term Lender in
connection with the Credit Documents and to discuss all such matters with its
officers, employees and, upon prior notice to the Borrower Representative, its
representatives. Without limitation of the foregoing, at such reasonable times
and intervals as the Term Lender Agent and the Term Lenders shall reasonably
request, Borrowers shall permit the Term Lender Agent and its representatives to
conduct an audit, examination, test and verification of the Collateral and the
other business and assets of the Debtors and in connection with such examination
to have full access to and the right to examine, audit, make abstracts and
copies from and inspect the Debtors' records, files, books of account and all
other documents, instruments and agreements to which any Debtor is a party.
Borrowers shall pay all reasonable costs and expenses of the Term Lender Agent
associated with any such audits. Additionally, at Borrowers' expense, from time
to time the Term Lender Agent may require an inspection of the Collateral in
storage at EOTT Terminals to be conducted by an independent appraiser selected
by the Term Lender Agent. Each of the foregoing audits, inspections and
examinations shall be made subject to compliance with applicable safety
standards and the same conditions applicable to any Debtor in respect of
property of that Debtor on the premises of Persons other than a Debtor or an
Affiliate of a Debtor, and all information, books and records furnished or
requested to be furnished, or of which copies, photocopies or photographs are
made or requested to be made, all information to be investigated or verified and
all discussions conducted with any officer, employee or representative of any
Debtor shall be subject to any applicable attorney-client privilege exceptions
that the Debtor reasonably determines is necessary and to compliance with
conditions to disclosures under non-disclosure agreements between any Debtor and
Persons other than a Debtor or an Affiliate of a Debtor, and subject further to
the express undertaking of each Person acting at the direction of or on behalf
of the Term Lender Agent to be bound by the confidentiality provisions of
Section 17(p).

                  (f) Notice of Material Events and Change of Address. Each
Debtor will notify each Term Lender, not later than five Business Days after any
executive officer of such Debtor has knowledge thereof, stating that such notice
is being given pursuant to this Agreement, of:

                  (i) the occurrence of any Material Adverse Change,

                  (ii) the occurrence of any Default,

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

                  (iv) the occurrence of any Termination Event,

                                      -40-
<PAGE>

                  (v) Under any Environmental Law, any claim of $1,000,000 or
         more, any notice of potential liability that might be reasonably likely
         to exceed such amount or any other material adverse claim asserted
         against any Debtor or with respect to any Debtor's properties taken as
         a whole,

                  (vi) (1) any material loss, damage, investigation, action,
         suit, proceeding, claims, setoff, withholding or other defenses
         relating to the Collateral, and (2) the occurrence of any Event of
         Default or event which, with the passing of time or giving of notice or
         both, would constitute an Event of Default, and

                  (vii) the filing of any suit or proceeding, or the assertion
         in writing of a claim against any Debtor or with respect to any
         Debtor's properties.

         Upon the occurrence of any of the foregoing, the Debtors will take all
         necessary or appropriate steps to remedy promptly any such Material
         Adverse Change, Default, acceleration, default or Termination Event to
         protect against any such adverse claim, to defend any such suit or
         proceeding and to resolve all controversies on account of any of the
         foregoing. The Debtors will also notify the Term Lender Agent and the
         Term Lender Agent's counsel in writing at least 20 Business Days prior
         to the date that any Debtor changes its name or the location of its
         chief executive office or principal place of business or the place
         where it keeps its books and records concerning the Collateral,
         furnishing with such notice any necessary financing statement
         amendments or requesting the Term Lender Agent and its counsel to
         prepare the same.

                  (g) Maintenance of Properties. Each Debtor will maintain,
preserve, protect and keep all Collateral and all other property used or useful
in the conduct of its business in good condition (ordinary wear and tear
excepted) and in material compliance with all applicable Laws and will from time
to time make all repairs, renewals and replacements reasonably needed to enable
the business and operations carried on in connection therewith to be promptly
and advantageously conducted at all times.

                  (h) Discharge of Liens. At its option, should any Debtor fail
to do so, except to the extent permitted hereunder, the Collateral Agent may
discharge post-petition taxes, Liens or security interests or other encumbrances
or charges at any time levied or placed on the Collateral and may pay for the
insurance, maintenance and preservation of the Collateral. The Borrowers agree
to reimburse the Collateral Agent on demand, together with interest thereon at
the Alternate Base Rate, for any payment made or expense incurred by the
Collateral Agent in connection with the foregoing or otherwise under this
Agreement, and any such payment or expense shall constitute a part of the
Obligations secured by the Collateral.

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

                  (j) Payment of Trade Liabilities, Taxes, etc. Each Debtor will
(i) timely file all required tax returns including any extensions; (ii) timely
pay all post-petition taxes, assessments

                                      -41-
<PAGE>

and other governmental charges or levies imposed upon it or upon its income,
profits or property; (iii) within 120 days after the date such goods are
delivered or such services are rendered, pay all post-petition Liabilities owed
by it on ordinary trade terms to vendors, suppliers and other Persons providing
goods and services used by it in the ordinary course of its business; (iv) pay
and discharge when due all other post-petition Liabilities now or hereafter owed
by it, other than royalty payments suspended in the ordinary course of business;
and (v) maintain appropriate accruals and reserves for all of the foregoing in
accordance with GAAP. However, each Debtor may delay paying or discharging any
of the foregoing so long as it has set aside on its books adequate reserves
therefor in accordance with GAAP and (i) it is in good faith contesting the
validity thereof in the Enron Bankruptcy Proceedings, if applicable, or by other
appropriate proceedings, if necessary or (ii) it is in good faith contesting the
validity of such Liability, and such Liability is claimed by an Affiliate of
Enron that is not a debtor-in-possession in the Enron Bankruptcy Proceedings.

                  (k) Insurance. Each Debtor shall at all times carry insurance
for all of its property (irrespective of whether such property is owned or
acquired before, on or after the Closing Date) with financially sound and
reputable insurers, of a character usually carried by responsible Persons
engaged in the same business or a business similarly situated against loss or
damage, of the kinds and in the amounts customarily carried by such Persons and
carry such other insurance as is usually carried by such Persons, including,
without limitation, insurance against its liability for injury to Persons (with
the Term Lender Agent, the Term Lenders and the Collateral Agent named as
additional insureds), all in amounts and of the type currently carried by such
Debtor. Within thirty (30) days after the Closing Date, Borrower will provide to
the Term Lender Agent a detailed schedule describing all insurance coverages
maintained by or for any Debtor together with copies of the underlying policies.
Within thirty (30) days after the Closing Date, all insurance policies covering
Collateral shall be endorsed (i) to provide for payment of losses to the
Collateral Agent, (ii) to provide that such policies may not be canceled or
reduced or affected in any material manner for any reason without 15 days prior
notice to the Collateral Agent and (iii) to provide for any other matters
specified in any applicable Security Document or which the Collateral Agent may
reasonably require.

                  (l) Performance on Borrowers' Behalf. If any Debtor fails to
pay any post-petition taxes, insurance premiums, expenses, attorneys' fees or
other amounts it is required to pay under any Credit Document, the Term Lender
Agent may pay the same after notice of such payment by the Term Lender Agent is
given to the Borrower Representative. Borrower shall immediately reimburse the
Term Lender Agent for any such payments and each amount paid by the Term Lender
Agent shall constitute an Obligation owed hereunder that is due and payable on
the date such amount is paid by the Term Lender Agent.

                  (m) Interest. Borrower hereby promises to each Term Lender to
pay interest at the Default Rate on all Obligations (including Obligations to
pay fees or to reimburse or indemnify any Term Lender) that Borrower has in this
Agreement promised to pay to such Term Lender and that are not paid when due.
Such interest shall accrue from the date such Obligations become due until they
are paid.

                                      -42-
<PAGE>

                  (n) Compliance with Agreements and Law. Subject to its rights
and duties as a debtor in a Case, each Debtor will perform all material
obligations it is required to perform under the terms of each indenture,
including in the case of EOTT MLP the EOTT MLP Senior Notes Indenture, mortgage,
deed of trust, security agreement, lease and franchise and each material
agreement, contract or other instrument or obligation to which it is a party or
by which it or any of its properties is bound, except where performance is
excused or delayed by the Bankruptcy Code. Each Debtor will conduct its business
and affairs in compliance with all Laws applicable thereto.

                  (o) Environmental Matters; Environmental Reviews.

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

                  (ii) Each Debtor will promptly furnish to the Term Lender
         Agent all written notices of violation, orders, claims, citations,
         complaints, penalty assessments, suits or other proceedings received by
         any such Debtor after the date hereof, or of which it has notice after
         the date hereof, pending or threatened against such Debtor, the
         potential liability of which exceeds $1,000,000 or could cause a
         Material Adverse Change if resolved adversely against such Debtor, by
         any governmental authority with respect to any alleged violation of or
         non-compliance with any Environmental Laws or any permits, licenses or
         authorizations in connection with its ownership or use of its
         properties or the operation of its business.

                  (iii) Each Debtor will promptly furnish to the Term Lender
         Agent all requests for information, notices of claim, demand letters
         and other notifications received after the date hereof by such Debtor
         in connection with its ownership or use of its properties or the
         conduct of its business, relating to potential responsibility with
         respect to any investigation or clean-up of Hazardous Material at any
         location, the potential liability of which exceeds $1,000,000 or could
         cause a Material Adverse Change if resolved adversely against such
         Debtor.

                  (p) Evidence of Compliance. Subject to the last sentence of
Section 9(e), each Debtor will furnish to each Term Lender at such Debtor's
expense all evidence which the Term Lender Agent from time to time reasonably
requests in writing as to the accuracy and validity of or compliance with all
representations, warranties and covenants made by any Debtor in the Credit
Documents, the satisfaction of all conditions contained therein and all other
matters pertaining thereto.

                  (q) Agreement to Deliver Security Documents. To further secure
the Obligations whenever requested by the Term Lender Agent in its sole and
absolute discretion, the Debtors will deliver chattel mortgages, security
agreements, financing statements and other Security Documents in form and
substance satisfactory to the Term Lender Agent for the purpose of

                                      -43-
<PAGE>

granting, confirming and perfecting first and prior Liens or security interests
in any personal property (tangible or intangible) now owned or hereafter
acquired by any Debtor.

                  (r) Guaranties of Newly Created or Acquired Subsidiaries. Each
Subsidiary of EOTT created, acquired or coming into existence after the date
hereof shall, promptly upon request by the Term Lender Agent, execute and
deliver to the Term Lender Agent an instrument of joinder pursuant to which each
Subsidiary adopts, ratifies, confirms and agrees to perform and be bound by
Section 13 hereof and the absolute and unconditional guaranty of the timely
repayment of the Obligations and the due and punctual performance of the
obligations of Borrower hereunder set forth therein, which instrument shall
otherwise be satisfactory to the Term Lender Agent in form and substance. EOTT
MLP will cause each such Subsidiary to deliver to the Term Lender Agent,
simultaneously with its delivery of such an instrument of joinder, written
evidence satisfactory to the Term Lender Agent and its counsel that such
Subsidiary has taken all corporate, limited liability company or partnership
action necessary to duly approve and authorize its execution, delivery and
performance of such instrument and any other documents that it is required to
execute.

                  (s) Compliance with Agreements. Each Debtor shall observe,
perform or comply with any term or condition under the Restructuring Agreement.
In addition, each Debtor shall observe, perform or comply with any agreement
with any Person or any term or condition of any instrument, if such agreement or
instrument is materially significant to such Debtor or to EOTT MLP on a
Consolidated basis or materially significant to any Guarantor, unless any such
failure to so observe, perform or comply is remedied within the applicable
period of grace (if any) provided in such agreement or instrument.

                  (t) Risk Management Policies. During the term of this
Agreement, EOTT MLP will maintain in effect the Risk Management Policies and
adhere to and conduct its risk management activities, and cause the other
Debtors to adhere to and conduct their respective risk management activities, in
accordance with such policies. The Borrower Representative shall provide written
notice to the Term Lender Agent of any changes to the Risk Management Policies
that the EOTT Energy board of directors adopts promptly upon the EOTT Energy
board of directors' action thereon, and in no event more than 30 days after
approval by the EOTT Energy board of directors of such changes.

                  (u) Critical Vendor Program. The Debtors shall have
established a critical vendor program satisfactory to the Term Lender Agent on
the date of the Second Interim Order.

10. NEGATIVE COVENANTS. To conform with the terms and conditions under which
each Term Lender is willing to have Extensions of Credit outstanding to
Borrowers, and to induce each Term Lender to enter into this Agreement and make
the Extensions of Credit, the Debtors covenant and agree jointly and severally
that until the full and final payment in cash of the Obligations , unless the
Majority Term Lenders have previously agreed otherwise:

                  (a) Indebtedness. No Debtor will in any manner owe or be
liable for Indebtedness except:

                  (i) the Obligations;

                                      -44-
<PAGE>

                  (ii) Indebtedness arising under Hedging Contracts permitted
         under Section 10(d) or consisting of options, swaps, collars and
         similar instruments that relate to crude oil, refined petroleum
         products or NGLs that satisfy the requirements of subclauses (A), (B)
         and (C) of the proviso to the definition of "Hedging Contracts";

                  (iii) Indebtedness of any Borrower owing to any other
         Borrower;

                  (iv) Liabilities with respect to obligations to deliver crude
         oil, refined petroleum products or NGLs or to render terminalling or
         storage services in consideration for advance payments to a Borrower;
         provided, however, such delivery or rendering, as applicable, is to be
         made within 60 days after such payment;

                  (v) guaranties by EOTT MLP or any Borrower of trade payables
         of any Borrower incurred and paid in the ordinary course of business on
         ordinary trade terms;

                  (vi) Indebtedness of the Debtors incurred prior to the Filing
         Date;

                  (vii) any Indebtedness outstanding under the SCTSC Purchase
         Agreements;

                  (viii) any Indebtedness existing under the note referred to in
         the Enron Settlement Agreement;

                  (ix) any Indebtedness existing under the DIP Letter of Credit
         Agreement not exceeding $325,000,000 in principal amount;

                  (x) any Indebtedness existing under the EOTT MLP Senior Notes;
         and

                  (xi) Daylight Overdraft obligations to Standard Chartered
         Bank, as contemplated in the Intercreditor Agreement, not to exceed
         $15,000,000.

                  (b) Accounts. No Debtor shall, without the prior written
consent of the Majority Term Lenders, open or maintain any commodity,
investment, securities or deposit accounts except for those listed on the
Disclosure Schedule.

                  (c) Limitation on Liens. No Debtor will assign, sell,
mortgage, lease, transfer, set over, pledge, grant any security interest in or
Lien upon, encumber, or otherwise dispose of or abandon any Accounts, inventory,
cash, investment securities, margin deposit accounts with commodities brokers or
other rights or properties that constitute Collateral, whether now owned or
hereafter acquired, nor will any Debtor permit any such Lien, encumbrance or
disposition to exist or occur with respect to such property, except for (i) the
sale from time to time in the ordinary course of business of such property as
may constitute inventory of such Debtor; (ii) Liens in favor of the Collateral
Agent; (iii) taxes constituting a Lien but not due and payable; (iv) Liens
described in any description of property attached to any mortgage, deed of trust
or fixture filing included in the Security Documents and any renewals,
extensions or modifications (but not enlargements) thereof; (v) Liens securing
purchase money financing for any property or asset hereafter acquired; (vi)
Liens reserved in leases, or arising by operation of law, for rent and for
compliance with the terms of the lease with respect to leasehold estates; (vii)
mechanic's or materialmen's Liens or other similar Liens, whether contractual or
arising by operation of law,

                                      -45-
<PAGE>

for amounts that are not more than 60 days past due or the validity of which is
being contested in good faith by appropriate proceedings; (viii) those consented
to in writing by the Term Lender Agent; and (ix) Permitted Liens. Except as
provided in the Intercreditor Agreement, no Debtor shall abandon, forfeit,
surrender, or release any rights in the Collateral or enter into any operating,
joint venture or similar agreement with respect to the Collateral.

                  (d) Hedging Contracts. No Debtor will be a party to or in any
manner be liable on any Hedging Contract, except Hedging Contracts to hedge the
Debtors' risk from fluctuations in commodity prices in the ordinary course of
business or pursuant to the Crude Oil Repurchase Agreement.

                  (e) Limitation on Mergers, etc. and Issuances of Securities.
Except as expressly provided in this Section and as contemplated by the
Reorganization Plan filed with the Bankruptcy Court, no Debtor will (i) enter
into any transaction of merger or consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), (ii)
acquire any business or property from, or capital stock of, or be a party to any
acquisition of, any Person except for (1) purchases of inventory and other
property to be sold or used in the ordinary course of business, and (2)
Investments permitted under Section 10(h) or (iii) sell, transfer, lease,
exchange, alienate or otherwise dispose of, in one transaction or a series of
transactions, any part of its business or property, whether now owned or
hereafter acquired, except for sales or transfers not prohibited by Section
10(f). EOTT MLP will not issue any securities other than limited partnership
interests and any options or warrants giving the holders thereof only the right
to acquire such interests. No Subsidiary of EOTT MLP will issue any additional
partnership or limited liability company interests or shares of its capital
stock or other securities or any options, warrants or other rights to acquire
such additional partnership or limited liability company interests or shares or
other securities, except that a direct Subsidiary of a Debtor may issue
additional partnership or limited liability company interests or shares or other
securities to such Debtor or to EOTT MLP so long as such Subsidiary is a Wholly
Owned Subsidiary of EOTT MLP after giving effect thereto. No Subsidiary of a
Borrower which is a partnership will allow any diminution of such Borrower's
interest (direct or indirect) therein.

                  (f) Limitation on Asset Sales. No Debtor will sell, transfer,
lease, exchange, alienate or dispose of any Collateral or any of its material
assets or properties or any material interest therein, including pursuant to any
sale/leaseback transaction, except:

                  (i) equipment that is worthless or obsolete or no longer
necessary or useful to the proper conduct of its business or that is replaced by
equipment of equal suitability and value;

                  (ii) inventory (including pipeline linefill) sold in the
ordinary course of business on ordinary trade terms and such inventory sold
pursuant to the Crude Oil Purchase Agreement (including documents of title
delivered to SCTSC in connection therewith and all proceeds thereof;

                  (iii) Accounts, contract rights and any proceeds thereof sold
pursuant to the Receivables Purchase Agreement; and

                                      -46-
<PAGE>

                  (iv) Designated Assets on terms and conditions satisfactory to
the Term Lender Agent and the Majority Term Lenders.

         All proceeds of any such sales shall be paid directly to the Collateral
         Agent as provided for in the Intercreditor Agreement. No Debtor will
         sell, transfer or otherwise dispose of capital stock of or partnership
         or other interests in any of its Subsidiaries except to EOTT MLP or a
         Wholly Owned Subsidiary of EOTT MLP. No Debtor will discount, sell,
         pledge or assign any notes payable to it, Accounts or future income.
         The Collateral Agent will, at the Borrower Representative's request and
         expense, execute a release, satisfactory to the Borrower
         Representative, the Term Lender Agent and the Majority Term Lenders, of
         any Collateral so sold, transferred, leased, exchanged, alienated or
         disposed of pursuant to this Section 10(f).

                  (g) Limitation on Distributions, Dividends and Redemptions. No
Debtor will declare or pay any dividends on, or make any other distribution of
any kind in respect of, any class of its capital stock or any partnership,
limited liability company or other interest in it, nor will any Debtor directly
or indirectly make any capital contribution of any nature to, or purchase,
redeem, acquire or retire any shares of the capital stock of or partnership or
limited liability company interests in, any Debtor (whether such interests are
now or hereafter issued, outstanding or created), or cause or permit any
reduction or retirement of the capital stock of any Debtor, while any
Obligations are outstanding. Notwithstanding the foregoing, Subsidiaries of a
Borrower shall not be restricted, directly or indirectly, from declaring and
paying dividends or making any other distributions to such Borrower.

                  (h) Limitation on New Businesses, Investments and Capital
Expenditures. No Debtor will (i) make any expenditure or commitment or incur any
obligation or enter into or engage in any transaction except in the ordinary
course of business, (ii) engage directly or indirectly in any business or
conduct any operations except in connection with or incidental to its present
businesses and operations, (iii) make any capital contributions to or other
Investments in any Person, other than Permitted Investments, or (v) make or
incur any Capital Expenditures other than Permitted Capital Expenditures. All
transactions permitted under this Section are subject to Section 10(f).

                  (i) Limitation on Credit Extensions. Except for Permitted
Investments and Hedging Contracts permitted under Section 10(d), no Debtor will
extend credit, make advances or make loans other than normal and prudent
extensions of credit to customers buying goods and services in the ordinary
course of business or to another Debtor in the ordinary course of business,
which extensions shall not be for longer periods than those extended by similar
businesses operated in a normal and prudent manner.

                  (j) Transactions with Affiliates. No Debtor will engage in any
material transaction with Enron or any of its Affiliates, except as contemplated
in the Enron Settlement Agreement and the Employee Transition Agreement.

                  (k) Prohibited Contracts. Except as expressly provided for in
the Credit Documents and as described in the Disclosure Schedule, no Debtor
will, directly or indirectly, enter into, create or otherwise allow to exist any
contract or other consensual arrangement

                                      -47-
<PAGE>

restricting the ability of any Subsidiary of EOTT MLP, including but not limited
to any Borrower to: (i) pay dividends or make other distributions, (ii) purchase
or redeem equity interests held in it by any Borrower or EOTT MLP, (iii) repay
loans and other Indebtedness owing by it to Borrower or EOTT MLP, (iv) transfer
any of its assets to any Borrower or EOTT MLP or (v) create, incur, assume or
suffer to exist any Lien upon its property or assets to secure the Obligations.
No Debtor will enter into any "take-or-pay" contract or other contract or
arrangement for the purchase of goods or services that obligates it to pay for
such goods or service regardless of whether they are delivered or furnished to
it other than contracts for pipeline capacity or for services in either case
reasonably anticipated to be utilized in the ordinary course of business. No
ERISA Affiliate will incur any obligation to contribute to any "multiemployer
plan" as defined in Section 4001 of ERISA that is subject to Title IV of ERISA.
No Debtor shall prepay the principal of, or purchase, redeem or otherwise
acquire or retire for value, any of the EOTT MLP Senior Notes.

                  (l) Modification of Certain Agreements. Except as contemplated
by the Reorganization Plan filed with the Bankruptcy Court, no Debtor will
amend, modify, or permit any amendment or modification to (i) its partnership
agreement, limited liability company agreement, certificate of formation,
certificate of incorporation or other organizational document, as applicable,
(ii) the EOTT MLP Senior Notes Indenture, or (iii) any contract or lease, that
releases, qualifies, limits, makes contingent or otherwise detrimentally affects
the rights and benefits of the Term Lender Agent or any other Lender Party under
or acquired pursuant to any Security Documents.

                  (m) Open Positions. The Debtors shall at all times limit their
Open Positions in accordance with the Risk Management Policies as from time to
time in effect.

                  (n) Intentionally Omitted.

                  (o) Books and Records. No Debtor shall permit any material
change in the accounting treatment or reporting practices of each Debtor from
those used in preparation of the financial statements referenced in Section
9(d), except as required or permitted under GAAP.

                  (p) Bankruptcy Cases. No Debtor will seek, consent or suffer
to exist (i) any modification, stay, vacation or amendment to the Orders, unless
(1) the Term Lenders have failed to perform their obligations hereunder in any
respect material to the business operations of the Debtors and the effect of
such modification, stay, vacation or amendment is solely to remedy such failure
or to obtain for the Debtors substitute performance or (2) the Term Lender Agent
has consented to such modification, stay, vacation or amendment in writing, (ii)
a priority claim for administrative expense or unsecured claim against any of
the Debtors (now existing or hereafter arising of any kind or nature whatsoever,
including without limitation any administrative expense of the kind specified in
Section 503(b), 506(c) or 507(b) of the Bankruptcy Code) equal or superior to
the priority claims of the Term Lender Agent and the Term Lenders in respect of
the Obligations, except for Agreed Administrative Expenses, or (iii) any Lien on
any Collateral, having a priority equal or superior to the Liens in favor of the
Term Lender Agent and the Term Lenders in respect of the Obligations or securing
the Prepetition Bank Debt, except for Permitted Prior Liens.

                                      -48-
<PAGE>

                  (q) Cash Budget. No Debtor will permit the actual Cumulative
Net Cash Flow for two consecutive Reference Periods to be less than 90% of the
amount of projected Cumulative Net Cash Flow for such Reference Periods as
specified in the Fixed Cash Budget.

                  As used herein:

                  (i) "CUMULATIVE NET CASH FLOW" has the meaning set forth in
the Initial Cash Budget;

                  (ii) "FIXED CASH BUDGET" means the Initial Cash Budget and any
other subsequent sixteen-week weekly cash revenue and expense budget prepared by
the Debtors and approved by the Term Lender Agent as to form and substance and
designated in writing by the Debtors and the Term Lender Agent as the "Fixed
Cash Budget" for purposes of this Agreement. In the event that the Initial Cash
Budget has not been replaced by a subsequent Fixed Cash Budget, as provided
above, then for periods between the last period covered by the Initial Cash
Budget and the Maturity Date, and for purposes of determining compliance with
this Section 10(q), the projected Cumulative Net Cash flow shall be determined
by extrapolating the Cumulative Cash Flow for the last month covered by the
Initial Cash Budget on a basis satisfactory to the Term Lender Agent; and

                  (iii) "REFERENCE PERIOD" means any period described in the
Fixed Cash Budget which starts with the first week covered by such Budget and
ends with the most recently ended week. Accordingly, the first Reference Period
will be the first week covered by the Fixed Cash Budget, the second Reference
Period will be the first two weeks (considered as a single period) covered by
the Fixed Cash Budget, the third Reference Period will be the first three weeks
(considered as a single period) covered by the Fixed Cash Budget, and so on.

                  (r) Minimum Crude Oil Lease Volumes. The Borrowers shall not
permit aggregate crude oil purchases at the lease during any month to be less
than 98% of the Minimum Lease Volumes. As used herein, "Minimum Lease Volume"
means 230,000 barrels per day. In the event that the Borrowers wish to enter
into a marketing arrangement with a third party that will cause a decrease in
aggregate crude oil purchases from leaseholders, the Term Lenders may amend this
clause (r) to reduce the Minimum Lease Volume in accordance with Section 17(n).

                  (s) Prepetition Indebtedness. The Debtors shall not pay or
discharge, or cause to be paid or discharged, any Indebtedness of any Debtor
incurred before the Filing Date other than payments:

                  (i) on Prepetition Bank Debt;

                  (ii) approved by the Bankruptcy Court on or before the date of
         the Second Interim Order, including without limitation, the Critical
         Vendor Order;

                  (iii) required by Section 1114 of the Bankruptcy Code;

                  (iv) as required in the Reorganization Plan, on or about the
         effective date of the Reorganization Plan; or

                                      -49-
<PAGE>

                  (v) of severance and other payments approved by the Bankruptcy
         Court and to which the Term Lender Agent consents in writing.

         None of the Borrowers shall (x) file any motion with the Bankruptcy
         Court in accordance with Section 546(g) of the Bankruptcy Code seeking
         to return any goods shipped to any of the Borrowers prior to the Filing
         Date, or (y) consent to any creditor taking a set-off against any
         Prepetition Bank Debt based upon any such return pursuant to Section
         553(b)(1) of the Bankruptcy Code or otherwise, in each case without the
         Term Lender Agent's consent in writing.

11. EVENTS OF DEFAULT. Each of the following events constitutes an Event of
Default under this Agreement:

                  (a)      Borrower fails to pay any Obligations with respect to
                           any Term Loan when due and payable;

                  (b)      Any Debtor fails to pay any Obligation (other than
                           the Obligations in subsection (a) above) when due and
                           payable, whether at a date for the payment of a fixed
                           installment or as a contingent or other payment
                           becomes due and payable or as a result of
                           acceleration or otherwise, within three Business Days
                           after the same becomes due;

                  (c)      Any event defined as a "default" or "event of
                           default" in any Credit Document (other than this
                           Agreement and such "events of default" that are
                           defined to have occurred upon the occurrence of
                           Events of Default hereunder) occurs, and the same is
                           not remedied within the applicable period of grace
                           (if any) provided in such Credit Document;

                  (d)      Any Debtor fails to duly observe, perform or comply
                           with any covenant, agreement or provision of Section
                           2(d), Section 2(e), Section 9(f), Section 9(k), or
                           Section 10;

                  (e)      Any Debtor fails (other than as referred to in
                           subsection (a), (b), (c) or (d) above) to duly
                           observe, perform or comply with any covenant,
                           agreement, condition or provision of any Credit
                           Document to which it is a party, and such failure
                           remains unremedied for a period of 10 days after
                           notice of such failure is given by the Term Lender
                           Agent to the Borrower Representative;

                  (f)      Any representation or warranty previously, presently
                           or hereafter made or deemed made in writing by or on
                           behalf of any Debtor in connection with any Credit
                           Document shall prove to have been false or incorrect
                           in any material respect on any date on or as of which
                           made or deemed made, or any Credit Document at any
                           time ceases to be valid, binding and enforceable as
                           warranted in Section 8(b) for any reason other than
                           its release or subordination by all Term Lenders;

                                      -50-
<PAGE>

                  (g)      Any Debtor shall default in the payment when due of
                           any principal of or interest on any postpetition
                           Indebtedness, or any prepetition Indebtedness if, by
                           order of the Bankruptcy Court issued with respect to
                           such prepetition Indebtedness, the default thereunder
                           entitles the holder thereof to relief from the
                           automatic stay pursuant to Section 362 of the
                           Bankruptcy Code, in excess of $500,000 in the
                           aggregate of such postpetition or prepetition
                           Indebtedness, or any event specified in any note,
                           agreement, indenture, mortgage, deed of trust,
                           security agreement or other document evidencing or
                           relating to any such post-petition Indebtedness shall
                           occur if the effect of such event is to cause, or
                           (with the giving of any notice or the lapse of time
                           or both) to permit the holder or holders of such
                           post-petition Indebtedness (or a trustee or agent on
                           behalf of such holder or holders) to cause, such
                           post-petition Indebtedness to become due, or to be
                           prepaid in full (whether by redemption, purchase,
                           offer to purchase or otherwise), prior to its stated
                           maturity;

                  (h)      Any Debtor has entered against it judgment or
                           execution action which remains undismissed for a
                           period of thirty (30) days, or relief from the
                           automatic stay under Section 362(a) of the Bankruptcy
                           Code shall be granted to any creditor or creditors of
                           any of the Debtors with respect to assets having an
                           aggregate value in excess of $500,000 or where the
                           deprivation of any of the Debtors of such assets
                           would reasonably be expected to have a material
                           adverse effect on the Debtors, considered as a whole;

                  (i)      Any Change in Control occurs;

                  (j)      Any Borrower (i) maintains in effect Risk Management
                           Policies that are not Currently Approved by the Term
                           Lender Agent or (ii) fails to adhere to or conduct
                           its risk management activities, or cause the other
                           Debtors to adhere to or conduct their respective risk
                           management activities, in accordance with the Risk
                           Management Policies as in effect from time to time;

                  (k)      Any Material Adverse Change occurs;

                  (l)      Any of the Borrowers shall be enjoined from
                           conducting any part of its business as a debtor in
                           possession;

                  (m)      The Bankruptcy Court shall enter an order (i)
                           amending, supplementing, altering, staying, vacating
                           rescinding or otherwise modifying any Order or any
                           other order with respect to any of the Cases
                           affecting in any material respect this Agreement or
                           the Prepetition Credit Agreement, (ii) appointing a
                           chapter 11 trustee or an examiner with enlarged
                           powers relating to the operation of the business
                           (powers beyond those set forth in Section 1106(a)(3)
                           and (4) of the Bankruptcy Code) under Section 1106(b)
                           of the Bankruptcy Code in any of the

                                      -51-
<PAGE>

                           Cases, (iii) dismissing any of the Cases or
                           converting any of the Cases to a chapter 7 case or
                           (iv) granting relief from the automatic stay to any
                           creditor holding or asserting a Lien or reclamation
                           claim on a material portion (i.e. more than $500,000
                           in the aggregate) of the assets of any of the
                           Borrowers or where the deprivation of any of the
                           Borrowers of such assets would reasonably be expected
                           to have a material adverse effect on the Borrowers,
                           considered as a whole, or (v) the granting of any
                           security interest in or any Lien on any property of
                           the Debtors in favor of any party (other than Liens
                           granted pursuant to the Second Interim Order or
                           otherwise permitted therein);

                  (n)      The Bankruptcy Court shall fail to sign the Final
                           Order by October 25, 2002;

                  (o)      An application shall be filed by any of the Borrowers
                           for the approval of any other Superpriority Claim
                           (exclusive of the Superpriority Claim in favor of the
                           Prepetition Lenders, the LC Participants, the LC
                           Issuer, the Term Lenders, the Administrative Agents
                           and the Collateral Agent) in any of the Cases which
                           is pari passu with or senior to the claims of the
                           Term Lender Agent and the Term Lenders against any of
                           the Borrowers unless after giving effect to the
                           transactions contemplated by such application all
                           Obligations and the Prepetition Bank Debt (whether
                           contingent or otherwise) shall be paid in full in
                           cash, or there shall arise any such Superpriority
                           Claim;

                  (p)      Any of the Borrowers shall be unable to pay its
                           postpetition debts as they mature or shall fail to
                           comply with any order of the Bankruptcy Court in any
                           material respect;

                  (q)      Any party to the Restructuring Agreement (other than
                           any of the Prepetition Lenders) shall breach any of
                           its obligations under the Restructuring Agreement;

                  (r)      The occurrence of an event of default under any of
                           the Orders or, when it was in effect, the First
                           Interim Order or the Second Interim Order; or

                  (s)      Any of the Borrowers shall file a motion in any of
                           the Cases (i) except as provided in the Orders, to
                           use cash collateral of the Term Lenders under Section
                           363(c) of the Bankruptcy Code without the Term
                           Lenders' consent, (ii) to recover from any portions
                           of the Collateral any costs or expenses of preserving
                           or disposing of such Collateral pursuant to Section
                           506(c) of the Bankruptcy Code, or (iii) to take any
                           other action or actions adverse to the Term Lenders
                           or their rights and remedies hereunder or any of the
                           other Credit Documents or any of the documents
                           evidencing or creating any of the Term Lenders'
                           interest in any of the Collateral; or

                                      -52-
<PAGE>

                  (t)      Any failure to complete the following actions within
                           the time periods set forth below:

                  (i)      By the week of December 3, 2002, hearing held on the
                           adequacy of the disclosure statement;

                  (ii)     By January 3, 2003, mail solicitation materials to
                           creditors, Bondholders and Enron Parties;

                  (iii)    By February 4, 2003, obtain all ballot and
                           confirmation and objections to Reorganization Plan;

                  (iv)     By February 11, 2003, hearing held on confirmation of
                           Reorganization Plan; and

                  (v)      By March 1, 2003, Reorganization Plan to become
                           effective; or

                  (u)      Any event defined as a "default" or "event of
                           default" in either SCTSC Purchase Agreement occurs
                           and the same is not remedied within the applicable
                           period of grace (if any) provided in such SCTSC
                           Purchase Agreement.

12. RIGHTS AND REMEDIES. Upon the occurrence and during the continuance of any
Event of Default, the Term Lender Agent, upon the direction of the Majority Term
Lenders, shall by notice to the Borrower Representative declare all or any
portion of the Obligations to be due and payable and/or the commitment to extend
credit to the Borrowers (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Obligations which shall be so declared
due and payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the commitment to
extend credit to the Borrowers shall terminate. In addition pursuant to Section
2.3(a) of the Intercreditor Agreement, if the obligations under the DIP Letter
of Credit Agreement are accelerated as a result of a continuing "Event of
Default" thereunder, the Term Lender Agent, upon the direction of the Majority
Term Lenders, shall by notice to the Borrower Representative declare all or any
portion of the Obligations to be due and payable at the same time as the
obligations under the DIP Letter of Credit Agreement, whereupon the full unpaid
amount of such Obligations which shall be so declared due and payable shall be
and become immediately due and payable, without further notice, demand or
presentment. In accordance with the Intercreditor Agreement, the Term Lender
Agent shall not exercise certain of its remedies without the consent of the
Required Secured Parties (as defined in the Intercreditor Agreement). In
addition, the Term Lender Agent will not, without the consent of Majority Term
Lenders, direct the Collateral Agent to take any "Enforcement Action" (as
defined in the Intercreditor Agreement), give any consent under Section 2.3(e)
or 7.3 of the Intercreditor Agreement, or make any election or designation under
Section 3.2(d) of the Intercreditor Agreement.

                                      -53-
<PAGE>

13. GUARANTY.

                  (a)      Each Guarantor hereby jointly and severally,
                           irrevocably, absolutely and unconditionally
                           guarantees to the Term Lenders the prompt, complete
                           and full payment and performance when due, no matter
                           how the same shall become due, of all Obligations,
                           including but not limited to:

                  (i)      All obligations of Borrowers to pay the principal of
                           and accrued interest on the Term Notes;

                  (ii)     All other sums payable under this Agreement and the
                           other Credit Documents, whether for principal,
                           interest, fees or otherwise; and

                  (iii)    Any and all other Indebtedness, obligations or
                           Liabilities that may at any time be owed by Borrowers
                           to the Term Lenders, whether incurred heretofore or
                           hereafter or concurrently herewith, under or pursuant
                           to any of the Credit Documents, and including
                           interest, attorneys' fees and collection costs as may
                           be provided by law or in any instrument evidencing
                           any such Indebtedness or Liability.

         Without limiting the generality of the foregoing, the Guarantors'
         liability hereunder shall extend to and include all postpetition
         interest, expenses and other Liabilities of Borrowers described above
         in this subsection (a), or below in the following subsection (b), which
         would be owed by Borrowers but for the fact that they are unenforceable
         or not allowable due to the existence of a bankruptcy, reorganization
         or similar proceeding involving a Borrower.

                  (b)      If Borrowers shall for any reason fail to pay any
                           Obligation described in Section 13(a), as and when
                           such Obligation shall become due and payable, whether
                           at its stated maturity, as a result of the exercise
                           of any power to accelerate, or otherwise, the
                           Guarantors will, forthwith upon demand by the Term
                           Lender Agent, pay such Obligation in full to the
                           Collateral Agent for the account of the Term Lenders.

                  (c)      If any Guarantor fails to pay any obligation as
                           described in the immediately preceding subsections
                           (a) or (b), each Guarantor will incur the additional
                           joint and several obligation to pay to the Collateral
                           Agent for the account of the Term Lender Agent, and
                           the Guarantors will forthwith upon demand by the Term
                           Lender Agent pay to the Collateral Agent for the
                           account of the Term Lender Agent, the amount of any
                           and all expenses, including fees and disbursements of
                           the Term Lender Agent's counsel and of any experts or
                           agents retained by the Term Lender Agent that the
                           Term Lender Agent may incur as a result of such
                           failure.

                  (d)      As between the Guarantors and Term Lenders, this
                           guaranty shall be considered a primary and liquidated
                           Liability of the Guarantors.

                                      -54-
<PAGE>

                  (e)      Each Guarantor hereby waives all defenses based on
                           suretyship and agrees that its obligations shall
                           continue and the enforceability thereof against such
                           Guarantor shall not be affected by:

                  (i)      any waiver, delay or failure of any Term Lender to
                           exercise or to exhaust any right or remedy or to
                           bring any right or remedy or action against the
                           Borrowers, the Collateral or any other security
                           available to the Term Lenders in connection with the
                           Obligations;

                  (ii)     any extension, renewal, settlement, compromise,
                           modification, amendment, consent, waiver or release
                           in any respect, arising under or in connection with
                           any of the Obligations;

                  (iii)    the existence of any claim, set-off, or other rights
                           that any Borrower may have at any time against any
                           Lender Party, whether in connection with the
                           Obligations or any unrelated transactions;

                  (iv)     any invalidity or unenforceability relating to or
                           against any Borrower, for any reason, of any of the
                           Obligations or any agreement relating thereto;

                  (v)      any Event of Default; or

                  (vi)     any other act or failure to act or delay of any kind
                           by any Borrower or Lender Party or any other
                           circumstance whatsoever which might, but for the
                           provisions hereof, constitute a defense available to,
                           or a legal or equitable discharge of, the Borrowers.

                  (f)      The obligations of each Guarantor hereunder shall
                           continue to be effective or be reinstated, as the
                           case may be, if at any time, payment, or any part
                           thereof, of any obligation or interest thereon is
                           rescinded or must otherwise be restored by any Lender
                           Party in connection with the bankruptcy of the
                           Borrowers.

                  (g)      Each Guarantor hereby waives promptness, diligence,
                           presentment, demand of payment, protest, order and
                           receipt of any notice in connection with its
                           obligations hereunder.

14. TERM LENDER AGENT.

                  (a) Appointment and Authority. Each Lender Party hereby
irrevocably authorizes the Term Lender Agent, and the Term Lender Agent hereby
undertakes, to receive payments of principal, interest and other amounts due
hereunder as specified herein and to take all other actions and to exercise such
powers under the Credit Documents as are specifically delegated to the Term
Lender Agent by the terms hereof or thereof, together with all other powers
reasonably incidental thereto. The relationship of the Term Lender Agent to the
other Lender Parties is only that of one commercial lender acting as an agent
for others, and nothing in the Credit Documents shall be construed to constitute
the Term Lender Agent a trustee or other fiduciary for any Lender Party, nor to
impose on the Term Lender Agent duties and obligations other than those

                                      -55-
<PAGE>

expressly provided for in the Credit Documents. With respect to any matters not
expressly provided for in the Credit Documents and any matters that the Credit
Documents place within the discretion of the Term Lender Agent, the Term Lender
Agent shall not be required to exercise any discretion or take any action, and
it may request instructions from the Lender Parties with respect to any such
matter, in which case it shall be required to act or to refrain from acting (and
shall be fully protected and free from liability to all Lender Parties in so
acting or refraining from acting) upon the instructions of the Majority Term
Lenders (including itself); provided, however, that the Term Lender Agent shall
not be required to take any action that exposes it to a risk of personal
liability that it considers unreasonable or which is contrary to the Credit
Documents or to applicable Law. Upon receipt by the Term Lender Agent from the
Borrower Representative of any communication calling for action on the part of
the Term Lenders or upon notice from the Borrower Representative or any Term
Lender to the Term Lender Agent of any Default or Event of Default, the Term
Lender Agent shall promptly notify each other Term Lender thereof.

                  (b) Exculpation, the Term Lender Agent's Reliance, etc.
Neither the Term Lender Agent nor any of its directors, officers, agents,
attorneys or employees shall be liable for any action taken or omitted to be
taken by any of them under or in connection with the Credit Documents, including
their negligence of any kind, except that each shall be liable for its own gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, the Term Lender Agent (i) may consult with legal counsel (including
counsel for the Borrowers), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation to any other
Lender Party and shall not be responsible to any other Lender Party for any
statements, warranties or representations made in or in connection with the
Credit Documents; (iii) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
the Credit Documents on the part of any Debtor or to inspect the property
(including the books and records) of any Debtor; (iv) shall not be responsible
to any other Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Credit Document or any
instrument or document furnished in connection therewith; (v) may rely upon the
representations and warranties of each Debtor or any Lender Party in exercising
its powers hereunder; and (vi) shall incur no Liability under or in respect of
the Credit Documents by acting upon any notice, consent, certificate or other
instrument or writing (including any facsimile, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper Person or Persons.

                  (c) Credit Decisions. Each Lender Party acknowledges that it
has, independently and without reliance upon any other Lender Party, made its
own analysis of the Borrowers and the transactions contemplated hereby and its
own independent decision to enter into this Agreement and the other Credit
Documents. Each Lender Party also acknowledges that it will, independently and
without reliance upon any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents.

                  (d) Indemnification. Each Term Lender agrees to indemnify the
Term Lender Agent (to the extent not reimbursed by the Borrowers within ten (10)
days after demand) from

                                      -56-
<PAGE>

and against such Term Lender's Percentage Share of any and all Liabilities and
Costs which to any extent (in whole or in part) may be imposed on, incurred by
or asserted against the Term Lender Agent growing out of, resulting from or in
any other way associated with any of the Collateral, the Credit Documents and
the transactions and events (including the enforcement thereof) at any time
associated therewith or contemplated therein (whether arising in contract or in
tort or otherwise and including any violation or noncompliance with any
Environmental Laws by any Person or any Liabilities or duties of any Person with
respect to Hazardous Materials found in or released into the environment). The
foregoing indemnification shall apply whether or not such Liabilities and Costs
are in any way or to any extent owed, in whole or in part, under any claim or
theory of strict Liability or caused, in whole or in part, by any negligent act
or omission of any kind by the Term Lender Agent; provided, however, only that
no Term Lender shall be obligated under this Section to indemnify the Term
Lender Agent for that portion, if any, of any Liabilities and Costs proximately
caused by the Term Lender Agent's own individual gross negligence or willful
misconduct, as determined in a final judgment. Cumulative of the foregoing, each
Term Lender agrees to reimburse the Term Lender Agent promptly upon demand for
such Term Lender's Percentage Share of any costs and expenses to be paid to the
Term Lender Agent by Borrower under Section 1 to the extent that the Term Lender
Agent is not timely reimbursed for such expenses by Borrower as provided in such
section. As used in this Section the term "THE TERM LENDER AGENT" shall refer
not only to the Person designated as such in Section 1 but also to each
director, officer, agent, attorney, employee, representative and Affiliate of
such Person.

                  (e) Rights as Term Lender. In its capacity as a Term Lender,
the Term Lender Agent shall have the same rights and obligations as any Term
Lender and may exercise such rights as though it were not the Term Lender Agent.
The Term Lender Agent may accept deposits from, lend money to, act as trustee
under indentures of and generally engage in any kind of business with any Debtor
or their Affiliates, all as if it were not the Term Lender Agent hereunder and
without any duty to account therefor to any other Term Lender.

                  (f) Sharing of Set-Offs and Other Payments. Each Lender Party
agrees that if it shall, whether through the exercise of rights under any
Security Document or rights of banker's Lien, set off or counterclaim against
any of the Borrowers or otherwise, obtain payment of a portion of the aggregate
Obligations owed to it which, taking into account all distributions made by the
Term Lender Agent under Section 3(b), causes such Lender Party to have received
more than it would have received had such payment been distributed by the Term
Lender Agent pursuant Section 3(b), then (i) it shall be deemed to have
simultaneously purchased and shall be obligated to purchase interests in the
Obligations as necessary to cause all Lender Parties to share all payments and
(ii) such other adjustments shall be made from time to time as shall be
equitable to ensure that the Term Lender Agent and all Lender Parties share all
payments of Obligations as provided in Section 3(b); provided, however, that
nothing herein contained shall in any way affect the right of any Lender Party
to obtain payment (whether by exercise of rights of banker's Lien, set-off or
counterclaim or otherwise) of Indebtedness other than the Obligations. The
Borrowers expressly consent to the foregoing arrangements and agree that any
holder of any such interest or other participation in the Obligations, whether
or not acquired pursuant to the foregoing arrangements, may to the fullest
extent permitted by Law and, subject to the provisions of Section 9(t), exercise
any and all rights of banker's Lien, set-off or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such

                                      -57-
<PAGE>

interest or other participation. If all or any part of any funds transferred
pursuant to this Section is thereafter recovered from the seller under this
Section which received the same, the purchase provided for in this Section shall
be deemed to have been rescinded to the extent of such recovery, together with
interest, if any, if interest is required pursuant to the order of a Tribunal to
be paid on account of the possession of such funds prior to such recovery.

                  (g) Investments. Whenever the Term Lender Agent in good faith
determines that it is uncertain about how to distribute to the Lender Parties,
any funds that it has received, or whenever the Term Lender Agent in good faith
determines that there is any dispute among the Lender Parties about how such
funds should be distributed, the Term Lender Agent may choose to defer
distribution of the funds that are the subject of such uncertainty or dispute.
If the Term Lender Agent in good faith believes that the uncertainty or dispute
will not be promptly resolved, or if the Term Lender Agent is otherwise required
to invest funds pending distribution to the Lender Parties, the Term Lender
Agent shall invest such funds pending distribution, and all interest on any such
Investment shall be distributed upon the distribution of such Investment in the
same proportion and to the same Persons as such Investment. All moneys received
by the Term Lender Agent for distribution to the Lender Parties (other than to
the Person who is the Term Lender Agent in its separate capacity as Lender
Party) shall be held by the Term Lender Agent pending such distribution solely
as the Term Lender Agent for such Lender Parties, and the Term Lender Agent
shall have no equitable title to any portion thereof.

                  (h) Benefit of this Section. The provisions of this Section
are intended solely for the benefit of the Lender Parties and no Debtor shall be
entitled to rely on any such provision or assert any such provision in a claim
or defense against any Term Lender (other than in relation to the reference to
Section 9(t) contained in Section 14(f). The Lender Parties may waive or amend
such provisions as they desire without any notice to or consent of Borrower or
any other Debtor.

                  (i) Resignation. The Term Lender Agent may resign at any time
by giving written notice thereof to the Term Lenders and the Borrower
Representative. Each such notice shall set forth the date of such resignation.
Upon any such resignation, the Majority Term Lenders shall have the right to
appoint a successor Term Lender Agent. A successor must be appointed for any
retiring Term Lender Agent, and such Term Lender Agent's resignation shall
become effective when such successor accepts such appointment. If, within 30
days after the date of the retiring Term Lender Agent's resignation, no
successor Term Lender Agent has been appointed and has accepted such
appointment, then the retiring Term Lender Agent may appoint a successor Term
Lender Agent, which shall be a commercial bank organized or licensed to conduct
a banking or trust business under the Laws of the United States of America or of
any state thereof. Upon the acceptance of any appointment as the Term Lender
Agent hereunder by a successor Term Lender Agent, the retiring Term Lender Agent
shall be discharged from its duties and obligations under this Agreement and the
other Credit Documents. After any retiring Term Lender Agent's resignation
hereunder, the provisions of this Section shall continue to inure to its benefit
as to any actions taken or omitted to be taken by it while it was the Term
Lender Agent under the Credit Documents.

                  (j) Other Lender Parties. None of the Lender Parties in such
capacities, other than the Term Lender Agent in such capacity, shall have any
duties or responsibilities or incur any liabilities in their respective agency
capacities (as opposed to their respective capacities as

                                      -58-
<PAGE>

Term Lenders) under or in connection with this Agreement or under any of the
other Credit Documents. The relationship between the Borrowers, on the one hand,
and the Term Lender Agent and such other Lender Parties, on the other hand,
shall be solely that of borrower and lender. The Term Lender Agent and the
Lender Parties shall not have any fiduciary responsibilities to the Borrowers or
any of their Affiliates. The Term Lender Agent and the Lender Parties do not
undertake any responsibility to the Borrowers or any of their Affiliates to
review or inform any of the Borrowers of any matter in connection with any phase
of any the Borrowers' or their Affiliate's business or operations.

15. ASSIGNMENTS AND PARTICIPATIONS.

                  (a)      None of the Debtors may, without the consent of the
                           Term Lender Agent, assign or delegate any of its
                           respective rights or obligations under this Agreement
                           or any other Credit Document. Each Term Lender may,
                           without the consent of any other Lender Party or any
                           Debtor, assign any or all of its rights and
                           obligations under this Agreement to any Person;
                           provided that (i) such assignment shall include the
                           assignment of the same percentage of the assignor's
                           Tier-A Term Loans and Tier-B Term Loans and (ii) any
                           assignment made by Lehman Commercial Paper, Inc., in
                           its capacity as a Term Lender, during the two week
                           period following the Closing Date shall solely be to
                           Persons who are Bondholders and their Affiliates.

                  (b)      Upon execution and delivery of any assignment
                           permitted hereunder, from and after the closing date
                           specified in the assignment, (i) the assignee
                           thereunder shall be a party hereto and, to the extent
                           that rights and obligations hereunder have been
                           assigned to it pursuant to such assignment, have the
                           rights and obligations as a Term Lender hereunder and
                           (ii) the assignor Term Lender shall, to the extent
                           that rights and obligations hereunder have been
                           assigned by it pursuant to such assignment,
                           relinquish its rights and be released from its
                           obligations under this Agreement (and, in the case of
                           an assignment covering all of such Term Lender's
                           rights and obligations under this Agreement, such
                           Term Lender shall cease to be a party hereto).

                  (c)      By executing and delivering an assignment, the
                           assignor Term Lender and the assignee thereunder
                           confirm to and agree with each other and the other
                           parties hereto as follows: (i) other than as provided
                           in such assignment, such Term Lender makes no
                           representation or warranty and assumes no
                           responsibility with respect to any statements,
                           warranties or representations made in or in
                           connection with this Agreement or any other Credit
                           Document or the execution, legality, validity,
                           enforceability, genuineness, sufficiency or value of
                           this Agreement or any other Credit Document or any
                           other instrument or document furnished pursuant
                           hereto; (ii) such Term Lender makes no representation
                           or warranty and assumes no responsibility with
                           respect to the financial condition of any Debtor or
                           the performance or observance by any Debtor of any of
                           its obligations under

                                      -59-
<PAGE>

                           this Agreement or any other Credit Document or any
                           other instrument or document furnished pursuant
                           hereto; (iii) such assignee confirms that it has
                           received a copy of this Agreement, and such other
                           Credit Documents and other documents and information
                           as it has deemed appropriate to make its own credit
                           analysis and decision to enter into such assignment;
                           (iv) such assignee will, independently and without
                           reliance upon such Term Lender and based on such
                           documents and information as it shall deem
                           appropriate at the time, continue to make its own
                           credit decisions in taking or not taking action under
                           this Agreement; and (v) such assignee agrees that it
                           will perform in accordance with their terms all of
                           the obligations which by the terms of this Agreement
                           are required to be performed by it as a Term Lender.
                           (d) Upon its receipt of an assignment executed by a
                           Term Lender and an assignee, the Term Lender Agent
                           shall give prompt notice thereof to the Borrower
                           Representative. The assignor or assignee shall pay to
                           the Term Lender Agent a processing and recordation
                           fee of $3,500 for each assignment. Within two
                           Business Days after its receipt of such notice,
                           Borrowers shall execute and deliver to the assignor
                           Term Lender and the assignee in exchange for the
                           surrendered Term Note, new Term Notes to the order of
                           the assignor Term Lender and such assignee,
                           respectively. Such new Term Notes shall be in an
                           aggregate principal amount equal to the aggregate
                           principal amount of such surrendered Term Note. The
                           new Term Notes shall be dated the closing date of
                           such assignment and shall otherwise be in
                           substantially the form of Exhibit A-1 or Exhibit A-2,
                           as applicable.

                  (e)      The Term Lender Agent shall maintain a copy of each
                           assignment delivered to it and a register for the
                           recordation of the names and addresses of each
                           assignee and, with respect to the Term Lenders, the
                           principal amount owing to each Term Lender from time
                           to time (the "REGISTER"). The entries in the Register
                           shall be conclusive and binding for all purposes,
                           absent manifest error, and the Borrower
                           Representative and each Term Lender may treat each
                           person, corporation, partnership, limited liability
                           company or other entity whose name is recorded in the
                           Register as a Term Lender hereunder for the purposes
                           of this Agreement. The Register shall be available
                           for inspection by the Borrower Representative or any
                           Term Lender at any reasonable time and from time to
                           time upon reasonable prior notice.

                  (f)      Any Term Lender may sell participations to one or
                           more Assignees in or to all or a portion of its
                           rights and obligations under this Agreement;
                           provided, however, that (i) such Term Lender's
                           obligations under this Agreement shall remain
                           unchanged, (ii) such Term Lender shall remain solely
                           responsible to the other parties hereto for the
                           performance of such obligations, (iii) the Borrower
                           Representative shall continue to deal solely and
                           directly with such Term Lender in connection with
                           such Term

                                      -60-
<PAGE>

                           Lender's rights and obligations under this Agreement
                           and (iv) in any proceeding under any bankruptcy,
                           insolvency or similar proceeding in respect of any
                           Borrower or any other Debtor, such Term Lender shall
                           remain and be, to the fullest extent permitted by
                           law, the sole representative with respect to the
                           rights and obligations held in the name of such Term
                           Lender (whether such rights or obligations are for
                           such Term Lender's own account or for the account of
                           any participant).

                  (g)      Each Term Lender may, in connection with any
                           assignment or participation or proposed assignment or
                           participation pursuant to this Section, disclose to
                           the assignee or participant or proposed assignee or
                           participant any information relating to the Debtors
                           or their Affiliates furnished to such Term Lender by
                           or on behalf of the Debtors, provided, that such
                           assignees or participants have agreed to be bound by
                           the confidentiality provisions in Section 17(p).

16. INDEMNIFICATION.

                  (a)      Subject to Section 16(b) and the prosecution of
                           Avoidance Actions, the Debtors, on a joint and
                           several basis, shall indemnify each Lender Party on
                           demand against any and all Liabilities, costs and
                           claims which to any extent (in whole or in part) may
                           be imposed on, incurred by or asserted against any
                           Lender Party growing out of, resulting from or in any
                           other way associated with:

                  (i)      the Extensions of Credit;

                  (ii)     any cash management arrangements with respect to
                           agency accounts and lockbox accounts maintained by
                           any of the Borrowers with any Person; and

                  (iii)    any of the Collateral, the Credit Documents, the
                           Restructuring Agreement, the Reorganization Plan, and
                           the transactions and events (including the
                           enforcement or defense thereof) at any time
                           associated therewith or contemplated therein, whether
                           arising in contract or in tort or otherwise and
                           including any violation or noncompliance with any
                           Environmental Laws by any Lender Party or any other
                           Person or any Liabilities or duties of any Lender
                           Party or any other Person with respect to Hazardous
                           Materials found in or Released into the environment.

                  (b)      The foregoing indemnification shall apply whether or
                           not such Liabilities, costs and claims are in any way
                           or to any extent owed, in whole or in part, under any
                           claim or theory of strict liability or caused, in
                           whole or in part, by any negligent act or omission of
                           any kind by any Lender Party; provided, however, only
                           that Lender Party shall not be entitled under this
                           Section to receive indemnification for that portion,
                           if any, of any Liabilities, costs and claims
                           proximately caused by its own individual

                                      -61-
<PAGE>

                           gross negligence or willful misconduct, as determined
                           in a final judgment. If any Person (including any
                           Debtor or any of its Affiliates) ever alleges such
                           gross negligence or willful misconduct by Lender
                           Party, the indemnification provided for in this
                           Section shall nonetheless be paid upon demand,
                           subject to later adjustment or reimbursement, until
                           such time as a court of competent jurisdiction enters
                           a final judgment as to the extent and effect of the
                           alleged gross negligence or willful misconduct. As
                           used in this Section the term "Lender Party" shall
                           refer not only to Lender Party but also to each
                           director, officer, agent, attorney, employee,
                           representative and affiliate of such Lender Party.

                  (c)      The Debtors further agree to indemnify on a joint and
                           several basis the Term Lender Agent's Special Counsel
                           from, and to hold the Term Lender Agent's Special
                           Counsel harmless against, any and all claims,
                           liabilities, costs and expenses relating to the Term
                           Lender Agent's Special Counsel's representation of
                           the Term Lender Agent on matters relating to this
                           Agreement and the Credit Documents and the Cases,
                           except to the extent finally determined to have
                           resulted from the willful misconduct, gross
                           negligence or fraudulent behavior as determined in a
                           final non-appealable judgment of the Term Lender
                           Agent's Special Counsel relating to such services.
                           The Term Lender Agent's Special Counsel may rely upon
                           the provisions contained in this Section 16(c)
                           although such Person is not a party to this
                           Agreement.

17. MISCELLANEOUS.

                  (a)      All Exhibits and Schedules attached to or referred to
                           in this Agreement are a part hereof for all purposes.
                           Reference is hereby made to the Security Schedule for
                           the meaning of certain terms defined therein and used
                           but not defined herein, which definitions are
                           incorporated herein by reference.

                  (b)      Unless the context otherwise requires or unless
                           otherwise provided herein the terms defined in this
                           Agreement that refer to a particular agreement,
                           instrument or document also refer to and include all
                           renewals, extensions, modifications, amendments and
                           restatements of such agreement, instrument or
                           document; provided, however, that nothing contained
                           in this Section shall be construed to authorize any
                           such renewal, extension, modification, amendment or
                           restatement.

                  (c)      All references in this Agreement to Exhibits,
                           Schedules, Articles, Sections, subsections and other
                           subdivisions refer to the Exhibits, Schedules,
                           Articles, Sections, subsections and other
                           subdivisions of this Agreement unless expressly
                           provided otherwise. Titles appearing at the beginning
                           of any subdivisions are for convenience only and do
                           not constitute any part of such subdivisions and
                           shall be disregarded in construing the language
                           contained in such subdivisions. The words "this
                           Agreement," "this instrument," "herein," "hereof,"
                           "hereby," "hereunder"

                                      -62-
<PAGE>

                           and words of similar import refer to this Agreement
                           as a whole and not to any particular subdivision
                           unless expressly so limited. The phrases "this
                           Section" and "this subsection" and similar phrases
                           refer only to the Sections or subsections hereof in
                           which such phrases occur. The word "or" is not
                           exclusive, and the word "including" (in its various
                           forms) means "including, without limitation."
                           Pronouns in masculine, feminine and neuter genders
                           shall be construed to include any other gender, and
                           words in the singular form shall be construed to
                           include the plural and vice versa, unless the context
                           otherwise requires.

                  (d)      All calculations under the Credit Documents of
                           interest and fees shall be made on the basis of
                           actual days elapsed (including the first day but
                           excluding the last) and a year of 360 days. Each
                           determination by Lender Party of amounts to be paid
                           under Section 3 or any other matters that are to be
                           determined hereunder by Lender Party shall, in the
                           absence of manifest error, be conclusive and binding.
                           Unless otherwise expressly provided herein or unless
                           the Majority Term Lenders otherwise consent, all
                           financial statements and reports furnished to any
                           Lender Party hereunder shall be prepared and all
                           financial computations and determinations pursuant
                           hereto shall be made in accordance with GAAP as in
                           effect at the Closing Date.

                  (e)      Notwithstanding that the Collateral Agent, whether on
                           its own behalf and/or on behalf of others, may
                           continue to hold the Collateral, and regardless of
                           the value thereof, each Debtor shall be and remain
                           liable for the payment in full, including principal
                           and interest, of any balance of the Obligations and
                           expenses hereunder at any time unpaid.

                  (f)      Each Debtor hereby expressly waives demand,
                           presentment, protest, notice of protest and notice of
                           dishonor with respect to any and all instruments and
                           commercial paper included in or evidencing any of the
                           Obligations or the Collateral, and any and all other
                           demands and notices of any kind or nature whatsoever
                           with respect to the Obligations, the Collateral, this
                           Agreement and the other Credit Documents, except such
                           as are expressly provided for herein or therein.

                  (g)      Under no circumstances shall any Lender Party be
                           deemed to have assumed any responsibility for or
                           obligation or duty of any nature or kind with respect
                           to any Collateral, or any matter or proceedings
                           arising out of or relating thereto, but the same
                           shall be at the sole risk of Debtors at all times.
                           The Debtors hereby release each Lender Party from any
                           claims, causes of action and demands at any time
                           arising out of, relating to or with respect to this
                           Agreement, the other Credit Documents, the
                           Obligations, the Collateral and/or any actions taken
                           or omitted to be taken by any Lender Party with
                           respect thereto, and the Debtors hereby agree jointly
                           and severally to indemnify and hold each Term Lender
                           harmless from and

                                      -63-
<PAGE>

                           with respect to any and all such claims, Liabilities,
                           causes of action and demands by any Person.

                  (h)      Subject to Section 14(f), upon the occurrence and
                           during the continuance of any Event of Default
                           hereunder, each Term Lender is hereby authorized at
                           any time and from time to time, to the fullest extent
                           permitted by law, to set off and apply any and all
                           deposits (general or special, time or demand,
                           provisional or final) at any time held and other
                           Indebtedness at any time owing by such Term Lender to
                           or for the credit or the account of any Debtor
                           against any and all of the Obligations which are then
                           liquidated and matured. Such Term Lender agrees
                           promptly to notify the Term Lender Agent and the
                           Borrower Representative after any such set-off and
                           application is made by such Term Lender; provided,
                           however, that the failure to give such notice shall
                           not affect the validity of such set-off and
                           application. The rights of the Term Lenders under
                           this Section are in addition to other rights and
                           remedies (including, without limitation, other rights
                           of set-off) which the Term Lenders may have.

                  (i)      No Term Lender shall be liable to any Debtor for (i)
                           any act or omission of any Person unless due to the
                           gross negligence or willful misconduct of such Term
                           Lender, such Term Lender's own branches or such Term
                           Lender's agents, (ii) loss or destruction of any
                           draft, demand, or document in transit or in the
                           possession of others unless due to the gross
                           negligence or willful misconduct of such Term Lender,
                           such Term Lender's own branches or such Term Lender's
                           agents, (iii) lack of knowledge of any particular
                           trade usage (other than standard banking usage as
                           used in the normal course of business) unless such
                           lack of knowledge is due to the gross negligence or
                           willful misconduct of such Term Lender, such Term
                           Lender's own branches or such Term Lender's agents,
                           or (iv) the genuineness, falsification, or effect of
                           any document which appears on due examination to be
                           regular on its face.

                  (j)      This Agreement, the Credit Documents and all the
                           transactions contemplated thereby shall be governed
                           by and construed in accordance with the laws of the
                           State of New York, without regard to choice of law
                           principles.

                  (k)      Each Debtor hereby irrevocably and unconditionally
                           submits, for itself and its property, to the
                           nonexclusive jurisdiction of the Bankruptcy Court
                           and/or the courts of New York State or federal court
                           of the United States of America sitting in New York
                           City, whether trial or appellate, in any action or
                           proceeding arising out of, or relating to, this
                           Agreement, or for recognition or enforcement of any
                           judgment in respect thereof, and each Debtor hereby
                           irrevocably and unconditionally agrees that all
                           claims in respect of any such action or proceeding
                           may be heard and determined in the Bankruptcy Court
                           and/or any such New York State court or, to the
                           extent permitted by law, in such federal court and
                           consents that any such

                                      -64-
<PAGE>

                           action or proceeding may be brought in such courts
                           and waives to the fullest extent permitted by law any
                           objection or claim that it may now or hereafter have
                           to the venue of any such action or proceeding in any
                           such court or that such action or proceeding was
                           brought in an inconvenient court and agrees not to
                           plead or claim the same. Each Debtor hereby agrees
                           that a final judgment in any such action or
                           proceeding shall be conclusive and may be enforced in
                           other jurisdictions by suit on the judgment or in any
                           other manner provided by law. Nothing in this
                           Agreement shall affect any right that any party may
                           otherwise have to bring any action or proceeding
                           relating to this Agreement in the courts of any
                           jurisdiction. EACH DEBTOR HEREBY IRREVOCABLY WAIVES
                           ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
                           OR COUNTERCLAIM ARISING OUT OF, OR RELATING TO, THIS
                           AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE ACTIONS
                           OF ANY LENDER PARTY IN THE NEGOTIATION,
                           ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF..

                  (l)      The Term Lender Agent may rely on the written
                           notices, requests, waivers and consents of the
                           Borrower Representative, its officers and designated
                           agents, including, without limitation, the Borrowing
                           Notice, as the binding actions of Borrowers
                           hereunder. Any such notices, requests, waivers or
                           consents received by the Term Lender Agent from the
                           Borrower Representative on behalf of Borrower
                           hereunder shall be deemed to have been sent by
                           Borrower, and all notices and other information
                           furnished by the Term Lender Agent to the Borrower
                           Representative hereunder will be received by the
                           Borrower Representative on behalf of Borrower. In
                           addition, the Term Lender Agent may receive from the
                           Borrower Representative, on behalf of Borrowers, all
                           amounts required to be paid by Borrowers and may pay
                           to the Borrower Representative for Borrowers'
                           account, all amounts required to be paid by or on
                           behalf of any Term Lender to Borrowers; provided,
                           however, that the Term Lender Agent shall not have
                           any responsibility to inquire as to the application
                           of such amounts by the Borrower Representative and is
                           hereby released from any liability to Borrower or any
                           other Debtor arising from such application by the
                           Borrower Representative.

                  (m)      Each Lender Party agrees (on behalf of itself and
                           each of its Affiliates, and each of its and their
                           directors, officers, agents, attorneys, employees and
                           representatives) that it (and each of them) will take
                           all reasonable steps to keep confidential any
                           non-public information supplied to it by or at the
                           direction of any Debtor; provided, however, that this
                           restriction shall not apply to information which (i)
                           has at the time in question entered the public
                           domain, (ii) is required to be disclosed by Law
                           (whether valid or invalid) of any Tribunal, (iii) is
                           disclosed to any of its Affiliates, auditors,
                           attorneys or agents, (iv) is furnished to any other
                           Lender Party or to any assignee or prospective
                           assignee of, or purchaser or prospective purchaser

                                      -65-
<PAGE>

                           of participations or other interests in, any interest
                           under the Credit Documents (provided each such
                           assignee or prospective assignee or purchaser or
                           prospective purchaser first agrees to hold such
                           information in confidence on the terms provided in
                           this Section), or (v) is disclosed in the course of
                           enforcing its rights and remedies following the
                           occurrence of an Event of Default.

                  (n)      Each of the Debtors acknowledges and agrees that,
                           upon the expiration of 30 days after the Filing Date,
                           (i) it has no claim or cause of action (including
                           without limitation, Avoidance Actions) against the
                           Prepetition Agent or the Prepetition Lenders (or any
                           of the Prepetition Agent's or the Prepetition
                           Lenders' directors, officers, employees or agents),
                           (ii) it has no offset right, counterclaim or defense
                           of any kind against any of its obligations,
                           indebtedness or liabilities to the Prepetition Agent
                           or the Prepetition Lenders, (iii) the Prepetition
                           Agent and the Prepetition Lenders have valid first
                           priority perfected liens on the "Collateral" under
                           and as defined in the Prepetition Credit Agreement
                           and that there have been no past conditions, acts,
                           omissions, events, circumstances or matters which
                           have impaired or adversely affected any of the
                           Prepetition Agent's or Prepetition Lenders' rights
                           interest and title with respect to such "Collateral"
                           under and as defined in the Prepetition Credit
                           Agreement, and (iv) the Prepetition Agent and the
                           Prepetition Lenders have properly performed and
                           satisfied in a timely manner all of their obligations
                           to the Debtors.

                  (o)      Waivers and Amendments; Acknowledgments.

                  (i)      No failure or delay (whether by course of conduct or
                           otherwise) by any Lender Party in exercising any
                           right, power or remedy which such Lender Party may
                           have under any of the Credit Documents shall operate
                           as a waiver thereof or of any other right, power or
                           remedy, nor shall any single or partial exercise by
                           any Lender Party of any such right, power or remedy
                           preclude any other or further exercise thereof or of
                           any other right, power or remedy. No waiver of any
                           provision of any Credit Document and no consent to
                           any departure therefrom shall ever be effective
                           unless it is in writing and signed as provided below
                           in this Section, and then such waiver or consent
                           shall be effective only in the specific instances and
                           for the purposes for which given and to the extent
                           specified in such writing. No notice to or demand on
                           any Debtor shall in any case of itself entitle any
                           Debtor to any other or further notice or demand in
                           similar or other circumstances. This Agreement and
                           the other Credit Documents set forth the entire
                           understanding among the parties hereto with respect
                           to the transactions contemplated herein and therein
                           and supersede all prior discussions and
                           understandings with respect to the subject matter
                           hereof and thereof, and no waiver, consent, release,
                           modification or amendment of or supplement to this
                           Agreement or the other Credit Documents shall be
                           valid or effective against any party hereto unless
                           the same is in writing and

                                      -66-
<PAGE>

                           signed by (A) if such party is a Debtor, by such
                           party, (B) if such party is the Term Lender Agent, by
                           such party and (C) if such party is a Term Lender, by
                           such Term Lender or by the Term Lender Agent with the
                           consent of the Majority Term Lenders. Notwithstanding
                           the foregoing or anything to the contrary herein, the
                           Term Lender Agent shall not, without the prior
                           consent of each individual Lender Party, execute and
                           deliver on behalf of such Lender Party any waiver or
                           amendment that would: (A) increase or reduce the
                           Percentage Share of any Term Lender or the maximum
                           amount any such Term Lender is committed to fund in
                           respect of the Term Loans or subject such Term Lender
                           to any additional obligations, (B) reduce any
                           principal, interest or fees payable to such Term
                           Lender hereunder, (C) change any date fixed for any
                           payment of any such principal, interest or fees, (D)
                           amend the definition herein of "Majority Term
                           Lenders" or otherwise change the aggregate amount of
                           Percentage Shares required for the Term Lender Agent,
                           the Term Lenders or any of them to take any
                           particular action under the Credit Documents, (E)
                           release Borrower from its requirement to pay the
                           Obligations or any Guarantor from its guaranty of
                           such payment, or (F) except as otherwise expressly
                           provided for in Section 10(c), release any
                           Collateral.

                  (ii)     Each Borrower hereby represents, warrants,
                           acknowledges and admits that (A) it has been advised
                           by counsel in the negotiation, execution and delivery
                           of the Credit Documents to which it is a party, (B)
                           it has made an independent decision to enter into
                           this Agreement and the other Credit Documents to
                           which it is a party, without reliance on any
                           representation, warranty, covenant or undertaking by
                           the Term Lender Agent or any Lender Party (C) there
                           are no representations, warranties, covenants,
                           undertakings or agreements by any Lender Party as to
                           the Credit Documents, (D) no Lender Party has any
                           fiduciary obligation toward any Debtor with respect
                           to any Credit Document or the transactions
                           contemplated thereby, (E) the relationship pursuant
                           to the Credit Documents between Borrower and the
                           other Debtors, on one hand, and each Lender Party, on
                           the other hand, is and shall be solely that of debtor
                           and creditor, respectively, (F) no partnership or
                           joint venture exists with respect to the Credit
                           Documents between any Debtor and any Lender Party,
                           (G) the Term Lender Agent is not Borrowers' agent,
                           but the Term Lender Agent for Term Lenders, (H)
                           should an Event of Default or Default occur or exist,
                           each Lender Party will determine in its sole
                           discretion and for its own reasons what remedies and
                           actions it will or will not exercise or take at that
                           time, (I) without limiting any of the foregoing,
                           Borrower is not relying upon any representation or
                           covenant by any Lender Party, or any representative
                           thereof, and no such representation or covenant has
                           been made, that any Lender Party will, at the time of
                           an Event of Default or Default, or at any other time,
                           waive, negotiate, discuss or take or refrain from
                           taking any action permitted under the Credit
                           Documents with respect to any such Event of Default
                           or Default or any other provision of the Credit
                           Documents and (J) all Lender Parties have

                                      -67-
<PAGE>

                           relied upon the truthfulness of the acknowledgments
                           in this Section in deciding to execute and deliver
                           this Agreement and to become obligated hereunder.

                  (p)      The Lender Parties, the Debtors and any other parties
                           to the Credit Documents intend to contract in strict
                           compliance with applicable usury Law from time to
                           time in effect. In furtherance thereof such Persons
                           stipulate and agree that none of the terms and
                           provisions contained in the Credit Documents shall
                           ever be construed to create a contract to pay, for
                           the use, forbearance or detention of money, interest
                           in excess of the maximum amount of interest permitted
                           to be contracted for, charged or received by
                           applicable Law from time to time in effect. Neither
                           any Debtor nor any present or future guarantors,
                           endorsers or other Persons hereafter becoming liable
                           for payment of any Obligation shall ever be liable
                           for unearned interest thereon or shall ever be
                           required to pay interest thereon in excess of the
                           maximum amount that may be lawfully contracted for,
                           charged or received under applicable Law from time to
                           time in effect, and the provisions of this Section
                           shall control over all other provisions of the Credit
                           Documents that may be in conflict or apparent
                           conflict herewith. The Lender Parties expressly
                           disavow any intention to contract for, charge or
                           receive excessive unearned interest or finance
                           charges in the event the maturity of any Obligation
                           is accelerated. If (i) the maturity of any Obligation
                           is accelerated for any reason, (ii) any Obligation is
                           prepaid and as a result any amounts held to
                           constitute interest are determined to be in excess of
                           the legal maximum or (iii) any Term Lender or any
                           other holder of any or all of the Obligations shall
                           otherwise collect moneys that are determined to
                           constitute interest which would otherwise increase
                           the interest on any or all of the Obligations to an
                           amount in excess of that permitted to be contracted
                           for, charged or received by applicable Law then in
                           effect, then all sums determined to constitute
                           interest in excess of such legal limit shall, without
                           penalty, be promptly applied to reduce the then
                           outstanding principal of the related Obligations or,
                           at such Term Lender's or holder's option, promptly
                           returned to Borrower or other payor thereof upon such
                           determination. In determining whether or not the
                           interest paid or payable, under any specific
                           circumstance, exceeds the maximum amount permitted
                           under applicable Law, the Lender Parties and the
                           Debtors (and any other payors thereof) shall to the
                           greatest extent permitted under applicable Law, (i)
                           characterize any non- principal payment as an
                           expense, fee or premium rather than as interest, (ii)
                           exclude voluntary prepayments and the effects thereof
                           and (iii) amortize, prorate, allocate and spread the
                           total amount of interest throughout the entire
                           contemplated term of the instruments evidencing the
                           Obligations in accordance with the amounts
                           outstanding from time to time thereunder and the
                           maximum legal rate of interest from time to time in
                           effect under applicable Law in order to lawfully
                           charge the maximum amount of interest permitted under
                           applicable Law. In the event applicable Law provides
                           for an interest ceiling under Chapter 303 of the
                           Texas Finance

                                      -68-
<PAGE>

                           Code (the "TEXAS FINANCE CODE") as amended, to the
                           extent that the Texas Finance Code is mandatorily
                           applicable to any Term Lender, for that day, the
                           ceiling shall be the "weekly ceiling" as defined in
                           the Texas Finance Code; provided, however, that if
                           any applicable Law permits greater interest, the Law
                           permitting the greatest interest shall apply.

                  (q)      The Debtors and the Lender Parties mutually hereby
                           knowingly, voluntarily and intentionally waive the
                           right to a trial by jury in respect of any claim
                           based hereon, arising out of, under or in connection
                           with this Agreement or any other Credit Documents
                           contemplated to be executed in connection herewith or
                           any course of conduct, course of dealings, statements
                           (whether oral or written) or actions of any party.
                           This waiver constitutes a material inducement for the
                           Lender Parties to enter into this Agreement and the
                           other Credit Documents and to make Extensions of
                           Credit. Each Debtor and each Lender Party hereby
                           further (i) irrevocably waives, to the maximum extent
                           not prohibited by law, any right it may have to claim
                           or recover in any such litigation any Special
                           Damages, as defined below, (ii) certifies that no
                           party hereto nor any representative or agent or
                           counsel for any party hereto has represented,
                           expressly or otherwise, or implied that such party
                           would not, in the event of litigation, seek to
                           enforce the foregoing waivers and (iii) acknowledges
                           that it has been induced to enter into this
                           Agreement, the other Credit Documents and the
                           transactions contemplated hereby and thereby by,
                           among other things, the mutual waivers and
                           certifications contained in this Section. "SPECIAL
                           DAMAGES" includes all special, consequential,
                           exemplary or punitive damages (regardless of how
                           named), but does not include any payments of funds
                           that any party hereto has expressly promised to pay
                           or deliver to any other party hereto.

                  (r)      All of the Debtors' various representations,
                           warranties, covenants and agreements in the Credit
                           Documents shall survive the execution and delivery of
                           this Agreement and the other Credit Documents and the
                           performance hereof and thereof, including the
                           delivery of the Credit Documents and shall further
                           survive until all of the Obligations are paid in full
                           in cash to each Lender Party and all of the Lender
                           Parties' obligations to Borrower are terminated. All
                           statements and agreements contained in any
                           certificate or other instrument delivered by any
                           Debtor to any Lender Party under any Credit Document
                           shall be deemed representations and warranties by
                           Borrower or agreements and covenants of Borrower
                           under this Agreement. The representations,
                           warranties, indemnities and covenants made by the
                           Debtors in the Credit Documents, and the rights,
                           powers and privileges granted to the Lender Parties
                           in the Credit Documents, are cumulative and, except
                           for expressly specified waivers and consents, no
                           Credit Document shall be construed in the context of
                           another to diminish, nullify or otherwise reduce the
                           benefit to any Lender Party of any such
                           representation, warranty, indemnity, covenant, right,
                           power or privilege. In particular and without
                           limitation, no exception set

                                      -69-
<PAGE>

                           out in this Agreement to any representation,
                           warranty, indemnity or covenant herein contained
                           shall apply to any similar representation, warranty,
                           indemnity or covenant contained in any other Credit
                           Document, and each such similar representation,
                           warranty, indemnity or covenant shall be subject only
                           to those exceptions that are expressly made
                           applicable to it by the terms of the various Credit
                           Documents.

                  (s)      Each of the Term Loan Agent and the Term Lenders
                           acknowledges and agrees that the rights and
                           obligations of such parties under this Agreement are
                           subject in all respects to the Intercreditor
                           Agreement.

                           [Remainder of page intentionally left blank.]

                                      -70-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Debtor In
Possession Term Loan Agreement as of the day and year first above written.

                                       EOTT ENERGY OPERATING LIMITED
                                       PARTNERSHIP,
                                       as a Borrower and as the Borrower
                                       Representative

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

                                           By: /s/  Susan Ralph
                                               ---------------------------------
                                               Name:  Susan Ralph
                                               Title: Treasurer

                                       EOTT ENERGY CANADA LIMITED
                                       PARTNERSHIP,
                                       as a Borrower

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

                                           By: /s/  Susan Ralph
                                               ---------------------------------
                                               Name:  Susan Ralph
                                               Title: Treasurer

                                       EOTT ENERGY LIQUIDS, L.P.,
                                       as a Borrower

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

                                           By: /s/  Susan Ralph
                                              ----------------------------------
                                              Name:  Susan Ralph
                                              Title: Treasurer

<PAGE>

                                       EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,
                                       as a Borrower

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

                                           By: /s/  Susan Ralph
                                              ----------------------------------
                                              Name:  Susan Ralph
                                              Title: Treasurer

                                       EOTT ENERGY PARTNERS, L.P.,
                                       as a Guarantor

                                       By: EOTT ENERGY CORP.,
                                           its General Partner

                                           By: /s/  Susan Ralph
                                              ----------------------------------
                                              Name:  Susan Ralph
                                              Title: Treasurer

                                       EOTT ENERGY GENERAL PARTNER, L.L.C.,
                                       as a Guarantor

                                           By: /s/  Susan Ralph
                                              ----------------------------------
                                              Name:  Susan Ralph
                                              Title: Treasurer

                                       Address for each Debtor:

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

<PAGE>

                                       LEHMAN BROTHERS INC.
                                       Term Lender Agent

                                           By: /s/  J. Robert Chambers
                                              ----------------------------------
                                              Name:  J. Robert Chambers
                                              Title: Managing Director

                                       LEHMAN COMMERCIAL PAPER, INC.
                                       a Term Lender

                                           By: /s/  J. Robert Chambers
                                              ----------------------------------
                                              Name:  J. Robert Chambers
                                              Title: Authorized Signatory

<PAGE>
                                       FARALLON CAPITAL PARTNERS, L.P., a
                                       California limited partnership, as
                                       a Term Lender

                                       By: Farallon Partners, L.L.C.,
                                           as General Partner

                                           By: /s/  Not Legible
                                              ----------------------------------
                                              Managing Member
                                              Farallon Partners, L.L.C.

                                       FARALLON CAPITAL INSTITUTIONAL
                                       PARTNERS, L.P., a California limited
                                       partnership, as a Term Lender

                                       By: Farallon Partners, L.L.C.,
                                           as General Partner

                                           By: /s/  Not Legible
                                              ----------------------------------
                                              Managing Member
                                              Farallon Partners, L.L.C.

                                       FARALLON CAPITAL INSTITUTIONAL
                                       PARTNERS II, L.P., a California limited
                                       partnership, as a Term Lender

                                       By: Farallon Partners, L.L.C.,
                                           as General Partner

                                           By: /s/  Not Legible
                                              ----------------------------------
                                               Managing Member,
                                               Farallon Partners, L.L.C.

<PAGE>

                                       FARALLON CAPITAL INSTITUTIONAL
                                       PARTNERS III, L.P., a Delaware limited
                                       partnership, as a Term Lender

                                       By: Farallon Partners, L.L.C.,
                                           as General Partner

                                           By: /s/  Not Legible
                                              ----------------------------------
                                              Managing Member,
                                              Farallon Partners, L.L.C.

                                       TINICUM PARTNERS, L.P., a New York
                                       limited partnership, a Term Lender

                                       By: Farallon Partners, L.L.C.,
                                           as General Partner

                                           By: /s/  Not Legible
                                              ----------------------------------
                                              Managing Member,
                                              Farallon Partners, L.L.C.

<PAGE>

                                       HIGH YIELD PORTFOLIO, a series of
                                       Income Trust

                                           By: /s/  Timothy J. Masek
                                              ----------------------------------
                                              Name:  Timothy J. Masek
                                              Title: Assistant Vice President
                                                     Income Trust

                                       AXP VARIABLE PORTFOLIO-EXTRA INCOME FUND,
                                       a series of AXP Variable Portfolio
                                       Income Series, Inc.

                                           By: /s/  Timothy J. Masek
                                               ---------------------------------
                                               Name:  Timothy J. Masek
                                               Title: Assistant Vice President
                                                      AXP Variable Portfolio
                                                      Income Series, Inc.

<PAGE>

                                   SCHEDULE I

                               DISCLOSURE SCHEDULE

<PAGE>

                                                                     SCHEDULE II

                              TERM LENDER SCHEDULE

                                                                Percentage Share
                                                                ----------------

Lehman Commercial Paper Inc.                                        56.2667%
745 Seventh Avenue
New York, New York  10019
Attention:  Francis Chang/Diane Albanese
Telecopy:  (212) 526-0242/(212) 526-6643

with a copy (excluding financial reports and information) to:

John W. Rain
Thompson & Knight LLP
1700 Pacific Avenue, Suite 3300
Dallas, Texas  75201
Telecopy:  (214) 969-1751

High Yield Portfolio                                                10.6667%
AXP Variable Portfolio - Extra Income Fund                           2.6667%

c/o Kris Robinson
Assistant Manager - Legal Affairs
General Counsel's Office
American Express Financial Advisors
50592 AXP Financial Center
Minneapolis, Minnesota  55474
Telecopy:  612) 671-3767

Farallon Capital Partners, L.P.                                     11.2000%
Farallon Capital Institutional Partners, L.P.                       14.9333%
Farallon Capital Institutional Partners II, L.P.                     2.1333%
Farallon Capital Institutional Partners III, L.P.                    1.6000%
Tinicum Partners, L.P.                                                .5333%

c/o Derek Schrier and Mark C. Wehrly
Farallon Capital Management, L.L.C.
One Maritime Plaza, Suite 1325
San Francisco, California  94111
Telecopy:  (415) 421-2133

<PAGE>
                                  SCHEDULE III

                                SECURITY SCHEDULE

<PAGE>

                                   EXHIBIT A-1

                                 PROMISSORY NOTE

                                TIER-A TERM NOTE

$                              New York, New York                       *[Date]
 ----------------

                  FOR VALUE RECEIVED, the undersigned, EOTT ENERGY OPERATING
LIMITED PARTNERSHIP, a Delaware limited partnership and a debtor and debtor in
possession, EOTT ENERGY CANADA LIMITED PARTNERSHIP, a Delaware limited
partnership and a debtor and debtor in possession, EOTT ENERGY LIQUIDS, L.P.,
a Delaware limited partnership and a debtor and debtor in possession,
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP, a Delaware limited partnership
and a debtor and debtor in possession (herein collectively called
"BORROWERS"), hereby jointly and severally promise to pay to the order
of________________________________________________, a *[____________ ]
(herein called "TERM LENDER"), the principal sum of
_______________________________________________________ Dollars ($__________),
together with interest on the unpaid principal balance thereof at
the rate of nine percent (9%) per annum, calculated on the basis of a 360 day
year and the actual number of days elapsed. Both principal and interest shall be
payable as herein provided in lawful money of the United States of America by
payment to the Collateral Agent to be applied as set forth in the Intercreditor
Agreement.

                  This Note (a) is issued and delivered under that certain
Debtor In Possession Term Loan Agreement of even date herewith among Borrowers,
EOTT Energy Partners, L.P. and EOTT Energy General Partner, L.L.C., as
guarantors, Lehman Brothers, Inc., as Term Loan Agent, and the term lenders
(including Term Lender) referred to therein (herein, as from time to time
supplemented, amended or restated, called the "LOAN AGREEMENT"), and is a
"TIER-A TERM NOTE" as defined therein, (b) is subject to the terms and
provisions of the Loan Agreement, which contains provisions for payments and
prepayments hereunder and acceleration of the maturity hereof upon the happening
of certain stated events, and (c) is secured by and entitled to the benefits of
certain Security Documents (as identified and defined in the Loan Agreement).
Payments on this Note shall be made and applied as provided herein and in the
Loan Agreement. Reference is hereby made to the Loan Agreement for a description
of certain rights, limitations of rights, obligations and duties of the parties
hereto and for the meanings assigned to terms used and not defined herein and to
the Security Documents for a description of the nature and extent of the
security thereby provided and the rights of the parties thereto.

                  The principal amount of this Note, together with all interest
accrued hereon, shall be due and payable in full on the Maturity Date. Interest
on this Note shall be due and payable

                                       1
<PAGE>

monthly as it accrues on each Monthly Payment Date, beginning November 1, 2002,
and continuing regularly thereafter until this Note has been paid in full.

                  If an Event of Default has occurred and is continuing, all
Obligations from time to time outstanding hereunder shall bear interest at the
Default Rate. Notwithstanding the foregoing provisions of this Note: (a) this
Note shall never bear interest in excess of the Highest Lawful Rate, and (b) if
at any time the rate at which interest is payable on this Note is limited by the
Highest Lawful Rate this Note shall bear interest at the Highest Lawful Rate and
shall continue to bear interest at the Highest Lawful Rate until such time as
the total amount of interest accrued hereon equals (but does not exceed) the
total amount of interest which would have accrued hereon had there been no
Highest Lawful Rate applicable hereto.

                  Notwithstanding the foregoing paragraph and all other
provisions of this Note, in no event shall the interest payable hereon, whether
before or after maturity, exceed the maximum amount of interest which, under
applicable Law, may be contracted for, charged, or received on this Note, and
this Note is expressly made subject to the provisions of the Loan Agreement
which more fully set out the limitations on how interest accrues hereon. In the
event applicable Law provides for an interest ceiling under Chapter 303 of the
Texas Finance Code (the "Texas Finance Code") as amended, for that day, the
ceiling shall be the "weekly ceiling" as defined in the Texas Finance Code and
shall be used in this Note for calculating the Highest Lawful Rate and for all
other purposes. The term "applicable Law" as used in this Note shall mean the
laws of the State of New York or the laws of the United States, whichever laws
allow the greater interest, as such laws now exist or may be changed or amended
or come into effect in the future.

                  If this Note is placed in the hands of an attorney for
collection after default, or if all or any part of the indebtedness represented
hereby is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, each Borrower
and all endorsers, sureties and guarantors of this Note jointly and severally
agree to pay reasonable attorneys' fees and collection costs to the holder
hereof in addition to the principal and interest payable hereunder.

                  Each Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the bringing
of any suit against any party and any notice of or defense on account of any
extensions, renewals, partial payments or changes in any manner of or in this
Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.

                                       2
<PAGE>

                  This Note and the rights and duties of the parties hereto
shall be governed by the Laws of the State of New York (without regard to
principles of conflicts of law), except to the extent the same are governed by
applicable federal Law.

                                       EOTT ENERGY OPERATING LIMITED
                                       PARTNERSHIP,
                                       as a Borrower and as the Borrower
                                       Representative

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

                                           By:
                                               ---------------------------------
                                               Name: Susan Ralph
                                               Title: Treasurer

                                       EOTT ENERGY CANADA LIMITED
                                       PARTNERSHIP,
                                       as a Borrower

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

                                           By:
                                               ---------------------------------
                                               Name: Susan Ralph
                                               Title: Treasurer

                                       EOTT ENERGY LIQUIDS, L.P.,
                                       as a Borrower

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

                                           By:
                                               ---------------------------------
                                               Name: Susan Ralph
                                               Title: Treasurer

<PAGE>

                                       EOTT ENERGY PIPELINE LIMITED
                                       PARTNERSHIP,
                                       as a Borrower

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

                                           By:
                                               ---------------------------------
                                               Name: Susan Ralph
                                               Title: Treasurer

<PAGE>

                                   EXHIBIT A-2

                                 PROMISSORY NOTE

                                TIER-B TERM NOTE

$                              New York, New York                       *[Date]
 ----------------

                  FOR VALUE RECEIVED, the undersigned, EOTT ENERGY OPERATING
LIMITED PARTNERSHIP, a Delaware limited partnership and a debtor and debtor in
possession, EOTT ENERGY CANADA LIMITED PARTNERSHIP, a Delaware limited
partnership and a debtor and debtor in possession, EOTT ENERGY LIQUIDS, L.P., a
Delaware limited partnership and a debtor and debtor in possession, EOTT ENERGY
PIPELINE LIMITED PARTNERSHIP, a Delaware limited partnership and a debtor and
debtor in possession (herein collectively called "BORROWERS"), hereby jointly
and severally promise to pay to the order of
________________________________________________, a *[____________ ] (herein
called "TERM LENDER"), the principal sum of
________________________________________________________________ Dollars ($
__________), together with interest on the unpaid principal balance thereof at
the rate of ten percent (10%) per annum, calculated on the basis of a 360 day
year and the actual number of days elapsed. Both principal and interest shall be
payable as herein provided in lawful money of the United States of America by
payment to the Collateral Agent to be applied as set forth in the Intercreditor
Agreement.

                  This Note (a) is issued and delivered under that certain
Debtor In Possession Term Loan Agreement of even date herewith among Borrowers,
EOTT Energy Partners, L.P. and EOTT Energy General Partner, L.L.C., as
guarantors, Lehman Brothers, Inc., as Term Loan Agent, and the term lenders
(including Term Lender) referred to therein (herein, as from time to time
supplemented, amended or restated, called the "LOAN AGREEMENT"), and is a
"TIER-B TERM NOTE" as defined therein, (b) is subject to the terms and
provisions of the Loan Agreement, which contains provisions for payments and
prepayments hereunder and acceleration of the maturity hereof upon the happening
of certain stated events, and (c) is secured by and entitled to the benefits of
certain Security Documents (as identified and defined in the Loan Agreement).
Payments on this Note shall be made and applied as provided herein and in the
Loan Agreement. Reference is hereby made to the Loan Agreement for a description
of certain rights, limitations of rights, obligations and duties of the parties
hereto and for the meanings assigned to terms used and not defined herein and to
the Security Documents for a description of the nature and extent of the
security thereby provided and the rights of the parties thereto.

                  The principal amount of this Note, together with all interest
accrued hereon, shall be due and payable in full on the Maturity Date. Interest
on this Note shall be due and payable monthly as it accrues on each Monthly
Payment Date, beginning November 1, 2002, and continuing regularly thereafter
until this Note has been paid in full.

                                       1
<PAGE>

                  If an Event of Default has occurred and is continuing, all
Obligations from time to time outstanding hereunder shall bear interest at the
Default Rate. Notwithstanding the foregoing provisions of this Note: (a) this
Note shall never bear interest in excess of the Highest Lawful Rate, and (b) if
at any time the rate at which interest is payable on this Note is limited by the
Highest Lawful Rate this Note shall bear interest at the Highest Lawful Rate and
shall continue to bear interest at the Highest Lawful Rate until such time as
the total amount of interest accrued hereon equals (but does not exceed) the
total amount of interest which would have accrued hereon had there been no
Highest Lawful Rate applicable hereto.

                  Notwithstanding the foregoing paragraph and all other
provisions of this Note, in no event shall the interest payable hereon, whether
before or after maturity, exceed the maximum amount of interest which, under
applicable Law, may be contracted for, charged, or received on this Note, and
this Note is expressly made subject to the provisions of the Loan Agreement
which more fully set out the limitations on how interest accrues hereon. In the
event applicable Law provides for an interest ceiling under Chapter 303 of the
Texas Finance Code (the "Texas Finance Code") as amended, for that day, the
ceiling shall be the "weekly ceiling" as defined in the Texas Finance Code and
shall be used in this Note for calculating the Highest Lawful Rate and for all
other purposes. The term "applicable Law" as used in this Note shall mean the
laws of the State of New York or the laws of the United States, whichever laws
allow the greater interest, as such laws now exist or may be changed or amended
or come into effect in the future.

                  If this Note is placed in the hands of an attorney for
collection after default, or if all or any part of the indebtedness represented
hereby is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, each Borrower
and all endorsers, sureties and guarantors of this Note jointly and severally
agree to pay reasonable attorneys' fees and collection costs to the holder
hereof in addition to the principal and interest payable hereunder.

                  Each Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the bringing
of any suit against any party and any notice of or defense on account of any
extensions, renewals, partial payments or changes in any manner of or in this
Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.

                                       2
<PAGE>

         This Note and the rights and duties of the parties hereto shall be
governed by the Laws of the State of New York (without regard to principles of
conflicts of law), except to the extent the same are governed by applicable
federal Law.

                                       EOTT ENERGY OPERATING LIMITED
                                       PARTNERSHIP,
                                       as a Borrower and as the Borrower
                                       Representative

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

                                           By:
                                               ---------------------------------
                                               Name: Susan Ralph
                                               Title: Treasurer

                                       EOTT ENERGY CANADA LIMITED
                                       PARTNERSHIP,
                                       as a Borrower

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

                                           By:
                                               ---------------------------------
                                               Name: Susan Ralph
                                               Title: Treasurer

                                       EOTT ENERGY LIQUIDS, L.P.,
                                       as a Borrower

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

                                           By:
                                               ---------------------------------
                                               Name: Susan Ralph
                                               Title: Treasurer

<PAGE>
                                       EOTT ENERGY PIPELINE LIMITED
                                       PARTNERSHIP,
                                       as a Borrower

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

                                           By:
                                               ---------------------------------
                                               Name: Susan Ralph
                                               Title: Treasurer

<PAGE>

                                    EXHIBIT B

                                BORROWING NOTICE

         Reference is made to that certain Debtor In Possession Term Loan
Agreement dated as of October 18, 2002 (as from time to time amended, the
"AGREEMENT"), by and among EOTT ENERGY OPERATING LIMITED PARTNERSHIP, a Delaware
limited partnership and a debtor and debtor in possession, EOTT ENERGY CANADA
LIMITED PARTNERSHIP, a Delaware limited partnership and a debtor and debtor in
possession, EOTT ENERGY LIQUIDS, L.P., a Delaware limited partnership and a
debtor and debtor in possession, EOTT ENERGY PIPELINE LIMITED PARTNERSHIP, a
Delaware limited partnership and a debtor and debtor in possession
(collectively, "BORROWERS"), EOTT Energy Partners, L.P. and EOTT Energy General
Partner, L.L.C., as guarantors, Lehman Brothers, Inc., as Term Lender Agent, and
the term lenders from time to time party thereto ("TERM LENDERS"). Terms which
are defined in the Agreement are used herein with the meanings given them in the
Agreement. Pursuant to the terms of the Agreement the Borrower Representative,
on behalf of the Borrowers, hereby requests the Term Loans to be advanced
pursuant to Section 2(b) of the Agreement on October __, 2002.

         To induce Term Lenders to make the Term Loans, Borrowers hereby
represent, warrant, acknowledge, and agree to and with Term Lender Agent and
each Term Lender that:

                  (a) The officer of the Borrower Representative signing this
         instrument is the duly elected, qualified and acting officer of the
         Borrower Representative as indicated below such officer's signature
         hereto having all necessary authority to act for the Borrower
         Representative in making the request herein contained.

                  (b) The representations and warranties of Borrowers set forth
         in the Agreement and the other Credit Documents are true and correct on
         and as of the date hereof (except to the extent that the facts on which
         such representations and warranties are based have been changed by the
         Extension of Credit under the Agreement), with the same effect as
         though such representations and warranties had been made on and as of
         the date hereof.

                  (c) There does not exist on the date hereof any condition or
         event which constitutes a Default or Event of Default; nor will any
         such Default or Event of Default exist upon Borrowers' receipt and
         application of the Term Loans. Borrowers will use the Term Loans in
         compliance with Section 2(d) of the Agreement.

                  (d) Borrowers have performed and complied with all agreements
         and conditions in the Agreement required to be performed or complied
         with by Borrowers on

<PAGE>

         or prior to the date hereof, and each of the conditions precedent to
         the Extension of Credit contained in the Agreement remains satisfied.

                  (e)  The Credit Documents have not been modified, amended or
         supplemented by any unwritten representations or promises, by any
         course of dealing, or by any other means not provided for in Section
         17(n) of the Agreement. The Agreement and the other Credit Documents
         are hereby ratified, approved, and confirmed in all respects.

         The officer of Borrower Representative signing this instrument hereby
certifies that, to the best of his knowledge after due inquiry, the above
representations, warranties, acknowledgments, and agreements of Borrowers are
true, correct and complete.

         IN WITNESS WHEREOF, this instrument is executed as of October 17, 2002.

                                                EOTT ENERGY OPERATING LIMITED
                                                PARTNERSHIP
                                                As the Borrower Representative

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

                                                By:  /s/  Susan Ralph
                                                    ----------------------------
                                                     Susan Ralph
                                                     Treasurer

<PAGE>

                                    EXHIBIT C

                  CERTIFICATE ACCOMPANYING FINANCIAL STATEMENTS

                       (Included as part of Exhibit 10.4)

<PAGE>

                                    EXHIBIT D

                                CASH FLOW REPORT

                       (Included as part of Exhibit 10.4)

<PAGE>

                                    EXHIBIT E

                      ENVIRONMENTAL COMPLIANCE CERTIFICATE

                       (Included as part of Exhibit 10.4)

<PAGE>

                                    EXHIBIT F

                              OPEN POSITION REPORT

                       (Included as part of Exhibit 10.4)

<PAGE>

                                    EXHIBIT G

                                   CASH BUDGET

                       (Included as part of Exhibit 10.4)

<PAGE>

                                    EXHIBIT H

                              CRITICAL VENDOR ORDER

                       (Included as part of Exhibit 10.4)

<PAGE>

                                    EXHIBIT I

                          WEEKLY COMPLIANCE CERTIFICATE

                       (Included as part of Exhibit 10.4)

<PAGE>

                                    EXHIBIT J

                              SECOND INTERIM ORDER

                       (Included as part of Exhibit 10.4)

<PAGE>

                                    EXHIBIT K

                               LEASE VOLUME REPORT

                       (Included as part of Exhibit 10.4)

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