Document:

<PAGE>   1
                                                                   EXHIBIT 10.23

        AMENDMENT NUMBER FIVE TO LOAN AND SECURITY AGREEMENT AND CONSENT

     THIS AMENDMENT NUMBER FIVE TO LOAN AND SECURITY AGREEMENT AND CONSENT (this
"Amendment"), dated effective as of March 21, 2001, is entered into by and among
Grant Geophysical, Inc., a Delaware corporation ("Borrower"), Foothill Capital
Corporation, a California corporation ("Foothill"), and Elliott Associates,
L.P., a Delaware limited partnership ("EALP"), as follows:

     WHEREAS, Borrower, EALP and Foothill are parties to that certain Loan and
Security Agreement (including any and all amendments, the "Loan Agreement"),
dated as of May 11, 1999, as amended by Amendment Number One to Loan and
Security Agreement, dated to be effective as of August 13, 1999, by and among
Borrower, Foothill and EALP, Amendment Number Two to Loan and Security
Agreement, dated to be effective as of September 23, 1999, by and among
Borrower, Foothill and EALP, Amendment Number Three to Loan and Security
Agreement, dated to be effective as of February 14, 2000, by and among Borrower,
Foothill and EALP and Amendment Number Four to Loan and Security Agreement,
dated to be effective as of February 7, 2001, by and among Borrower, Foothill
and EALP;

     WHEREAS, Borrower has informed Lenders of Borrower's intention to sell to
Seitel, Inc., or its subsidiaries (collectively, "Seitel") certain seismic data
from Borrower's non-exclusive data library, all licenses and other contracts
relating to the use of such data by third persons and all revenue relating to
such data from February 15, 2001 or a specified date thereafter, as more
particularly described on Exhibit "B" attached hereto (collectively, the "Sale
Assets"), such sale hereinafter referred to as the "Sale" and Borrower
acknowledges that the Sale is a Disposition prohibited by Section 7.4(d) of the
Loan Agreement without the prior written consent of the Lenders;

     WHEREAS, Borrower has requested that Lenders consent to the Sale and
release the Lenders' security interests in the Sale Assets;

     WHEREAS, Borrower and Lenders have agreed to extend the term of the Loan
Agreement for three years from the currently effective Renewal Date; and

     WHEREAS, subject to the conditions set forth in this Amendment, Borrower,
Foothill, and EALP have agreed to amend the Loan Agreement as set forth below;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
conditions, and provisions as hereinafter set forth, the parties hereto agree as
follows:

     1. DEFINITIONS. Initially capitalized terms used herein have the meanings
defined in the Loan Agreement unless otherwise defined herein.

     2. AMENDMENT.

     2.01 ADDITIONS TO SECTION 1.1 OF THE LOAN AGREEMENT. Section 1.1 of the
Loan Agreement is hereby amended by adding the following definition of "Fifth
Amendment to Loan

                                     Page 1

<PAGE>   2

and Security Agreement" to such section in the appropriate alphabetical order,
such definition to read in its entirety as follows:

          "'Fifth Amendment to Loan and Security Agreement' means that certain
     Amendment Number Five to Loan and Security Agreement, dated to be effective
     as of March 21, 2001, by and among Borrower, Foothill and EALP."

     2.02 AMENDMENT AND RESTATEMENT OF SECTION 2.3 OF THE LOAN AGREEMENT.
Effective as of the date hereof, Section 2.3 of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:

          "2.3 FCC TERM LOAN

               (a) General. Foothill has agreed to make a term loan (the "FCC
     Term Loan") to Borrower in the stated principal amount not to exceed Eleven
     Million Five Hundred Thousand Dollars ($11,500,000.00). The FCC Term Loan
     shall be repaid in thirty-one monthly installments, and one final
     installment, of principal in the following amounts:

<TABLE>
<CAPTION>
=====================================================================================
               Month                                    Installment Amount
-------------------------------------------------------------------------------------
<S>                                          <C>
April 1, 2000, through October 1, 2002       $363,260.00/month
-------------------------------------------------------------------------------------
November 1, 2002                             The outstanding principal balance of the
                                             FCC Term Loan
=====================================================================================
</TABLE>

     Each such principal installment shall be due and payable on the first day
     of each month commencing April 1, 2000, and continuing on the first day of
     each succeeding month until and including the date on which the unpaid
     balance of the FCC Term Loan is paid in full. The outstanding principal
     balance and all accrued and unpaid interest under the FCC Term Loan shall
     be due and payable upon the termination of this Agreement, whether by its
     terms, by prepayment, by acceleration, or otherwise. Subject to Section
     3.6, the unpaid principal balance of the FCC Term Loan may be prepaid in
     whole or in part at any time during the term of this Agreement upon 30
     days' prior written notice by Borrower to Foothill, all such prepaid
     amounts to be applied to the installments due on the FCC Term Loan in the
     inverse order of their maturity. All amounts outstanding under the FCC Term
     Loan shall constitute Obligations.

               (b) Prepayment Upon Disposition of Eligible Equipment. Except as
     otherwise expressly permitted by Section 7.4 of this Agreement, Borrower
     shall prepay the FCC Term Loan in an amount equal to the net proceeds of
     any disposition of Eligible Equipment, regardless of whether such
     disposition is permitted under Section 7.4 of this Agreement (but without
     approving any such disposition not otherwise expressly permitted under
     Section 7.4 of this Agreement). The mandatory prepayment shall be due and
     payable immediately upon the corresponding disposition of Eligible
     Equipment.

                                     Page 2

<PAGE>   3

     Mandatory prepayments shall be applied to installments under the FCC Term
     Loan in inverse order of maturity.

               (c) FCC Term Note. The FCC Term Loan shall be evidenced by that
     certain Third Amended and Restated Secured Promissory Note, dated as of
     February 14, 2000, in the original principal amount of $11,500,000.00,
     executed by Borrower, payable to the order of Foothill, the form of which
     is attached as Exhibit A to the Fifth Amendment to Loan and Security
     Agreement (together with any and all renewals, extensions and modifications
     thereof, the "FCC Term Note")."

     2.03 AMENDMENT AND RESTATEMENT OF SECTION 3.4 OF THE LOAN AGREEMENT.
Effective as of the date hereof, Section 3.4 of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:

         "3.4 TERM; AUTOMATIC RENEWAL. This Agreement shall become effective
upon May 11, 1999 and shall continue in full force and effect for a term ending
on May 11, 2005 (the "Renewal Date") and automatically shall be renewed for
successive one-year periods thereafter, unless sooner terminated pursuant to the
terms hereof. Either Borrower or the Required Lenders may terminate this
Agreement without, in the case of Borrower, penalty or premium effective on the
Renewal Date by giving the other party at least ninety days' prior written
notice. Thereafter, Borrower may terminate this Agreement at any time without
penalty or premium subject to Section 3.5 hereof, provided that the Required
Lenders may only terminate this Agreement on the annual anniversary of the
Renewal Date by giving Borrower at least ninety days' prior written notice. The
foregoing notwithstanding, the Lenders shall have the right to terminate their
respective obligations under this Agreement immediately and without notice upon
the occurrence and during the continuation of an Event of Default."

     2.04 AMENDMENT AND RESTATEMENT OF SECTION 3.6 OF THE LOAN AGREEMENT.
Effective as of the date hereof, Section 3.6 of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:

         "3.6 EARLY TERMINATION BY BORROWER. The provisions of Section 3.4 that
may prohibit termination of this Agreement by Borrower prior to the Renewal Date
notwithstanding, Borrower has the option, at any time upon 30 days' prior
written notice to Agent, to terminate this Agreement prior to the Renewal Date
by paying to Agent (for the benefit of Foothill), in cash, the Obligations
(including an amount equal to 102% of the undrawn and unreimbursed amount of the
Letters of Credit that remain outstanding as of the date of termination of this
Agreement), in full, together with a premium (the "Early Termination Premium")
equal to the Maximum Amount multiplied by the percentage indicated below that
corresponds to the period during which Borrower pays the Obligations in full, in
cash:

<TABLE>
<CAPTION>
  Percentage                               Period
  ----------                               ------
<S>                <C>
      3%           From the Closing Date, through and including May 11, 2002;

      2%           After May 11, 2002, through and including August 11, 2002;
</TABLE>

                                     Page 3
<PAGE>   4

<TABLE>
<S>                <C>
  1-3/4%           After August 11, 2002, through and including November 11, 2002

  1-1/2%           After November 11, 2002, through and including February 11, 2003

  1-1/4%           After February 11, 2003, through and including May 11, 2003

      1%           After May 11, 2003, through and including August 11, 2003

    3/4%           After August 11, 2003, through and including November 11, 2003

    1/2%           After November 11, 2003, through and including February 11, 2004

    1/4%           After February 11, 2004, and prior to the Renewal Date; and

      0%           On the Renewal Date and thereafter.
</TABLE>

     "Any amount paid in respect of undrawn and unreimbursed Letters of Credit
outstanding as of the termination of this Agreement shall be repaid to Borrower
on a dollar-for-dollar basis (without interest) when the outstanding Letters of
Credit expire, terminate, or are replaced, after reducing such amount by the
amount, if any, drawn by or paid to any beneficiary under such Letters of
Credit.

     "Borrower may prepay the FCC Term Loan in whole or in part at any time
without payment of an Early Termination Premium so long as the prepayment is
made with proceeds derived from the sale of Borrower's equity securities. The
following prepayments may be made without payment of an Early Termination
Premium: (a) mandatory prepayments of the FCC Term Loan required under Section
2.3(b) as a result of a disposition of Eligible Equipment otherwise permitted by
Section 7.4, but only to the extent all such Dispositions during any Fiscal Year
result in aggregate net proceeds of less than $1,000,000; and (b) prepayments
pursuant to Section 2.5 as a result of an Overadvance. Any prepayment on the FCC
Term Loan will apply to payments due under the FCC Term Loan in the inverse
order of maturities. Borrower may not prepay the EALP Term Loan in whole or in
part unless and until all other Obligations have been repaid in full to Foothill
and to Agent."

     3. CONSENT TO SALE. Subject to Borrower's satisfaction of the terms and
conditions set forth herein, the Lenders hereby (i) consent (the "Consent") to
the Sale of the Sale Assets, (ii) release their security interest in the Sale
Assets, and (iii) agree to execute and deliver partial releases of financing
statements to evidence the release of security interests in the Sale Assets. The
Consent and release set forth herein apply only to the Sale of the Sale Assets
and nothing contained herein or any other communication among Foothill, any
Lender, and/or Borrower shall constitute a course of dealing or other basis for
altering any obligation of Borrower under the Loan Agreement or any other Loan
Document or any right, privilege or remedy of Agent or Lenders under the Loan
Agreement, any other Loan Document or any other contract or instrument or any
consent to any future Dispositions of any property.

     4. CONDITIONS TO EFFECTIVENESS.

     4.01 CONDITIONS TO EFFECTIVENESS OF AMENDMENT. This Amendment (other than
the Consent) shall become effective upon fulfillment of the following
conditions, in each case to the satisfaction of Foothill:

                                     Page 4
<PAGE>   5

     (a)  a counterpart of this Amendment shall be executed by Borrower and
          delivered to Foothill;

     (b)  a counterpart of this Amendment shall be executed by EALP and
          delivered to Foothill;

     (c)  each of AST, GGC and GGII shall reaffirm its obligations under the
          Loan Documents to which it is a party, pursuant to an instrument in
          form and substance satisfactory to Foothill;

     (d)  Borrower shall execute and deliver to Foothill the "FCC Term Note" in
          the form attached hereto as Exhibit A; and

     (e)  Borrower shall pay all fees and expenses required to be paid by
          Borrower pursuant to Section 7.03 of this Amendment.

     4.02 CONDITIONS TO EFFECTIVENESS OF CONSENT. The Consent set forth in this
Amendment shall become effective upon fulfillment of the conditions to the
effectiveness of this Amendment and the fulfillment of the following additional
conditions, in each case to the satisfaction of Foothill:

     (a)  Borrower shall have received cash consideration in the aggregate
          amount of $15,000,000 upon consummation of the Sale of the Sale
          Assets.

     5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.

     5.01 REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower hereby represents
and warrants to Foothill as follows:

          (a) the execution, delivery and performance by Borrower of this
     Amendment have been duly authorized by all necessary corporate action of
     Borrower and do not and will not require any registration with, consent or
     approval of, notice to or action by, any Person in order to be effective
     and enforceable;

          (b) the execution, delivery and performance by Borrower of this
     Amendment will not violate the articles of incorporation, bylaws or any
     other agreement to which Borrower is a party or by which the property of
     Borrower may be bound;

          (c) the Loan Agreement, as amended by this Amendment, constitutes the
     legal, valid and binding obligation of Borrower, enforceable against
     Borrower in accordance with its terms, without defense, counterclaim or
     offset;

          (d) the representations and warranties contained in the Loan Agreement
     (as amended by this Amendment) and each other Loan Document are true and
     correct on and as of the date hereof as though made on and as of the date
     hereof, except to the extent such representations and warranties relate to
     only a prior specified date;

                                     Page 5

<PAGE>   6

          (e) Borrower is in full compliance with all covenants and agreements
     contained in the Loan Agreement, as amended by this Amendment, and all such
     covenants and agreements are, and shall remain, in full force and effect;
     and

          (f) no Default or Event of Default is continuing as of the date
     hereof, nor shall any Default or Event of Default occur as a result of the
     execution and delivery hereof, or the Borrower's performance of the
     obligations herein or under the Loan Agreement, as amended hereby.

     5.02 COVENANTS OF BORROWER. Borrower hereby agrees as follows:

          (a) Borrower agrees to pay in full all sums owing to EALP relating to
     all net revenue interests acquired by EALP from Borrower; and

          (b) Borrower shall cause to be prepared and delivered to Foothill all
     partial releases of financing statements required in connection with the
     release of Lenders' security interests in the Sale Assets.

     6. RATIFICATIONS.

     6.01 AGREEMENT OF DESIGNATED SUBSIDIARIES. The Designated Subsidiaries
hereby join in this Amendment for the purpose of consenting to the terms hereof.
The Designated Subsidiaries hereby agree that all terms, covenants and
provisions of the Loan Agreement and the other Loan Documents are, and shall
remain, in full force and effect, including (without limitation) the Designated
Subsidiaries guaranty of the Obligations of Borrower pursuant to the Subsidiary
Guaranties, which Subsidiary Guaranties are hereby acknowledged and reaffirmed
with respect to all Obligations of Borrower arising pursuant to the Loan
Agreement and other Loan Documents, as amended by this Amendment.

     6.02 AGREEMENT OF EALP. EALP hereby joins in this Amendment for the purpose
of consenting to the terms hereof. EALP hereby agrees that all terms, covenants
and provisions of the Loan Agreement and the other Loan Documents are, and shall
remain, in full force and effect, including (without limitation) the
subordination provisions set forth at Section 17.16 of the Loan Agreement and
EALP's guaranty of the Obligations of Borrower (other than the EALP Term Loan)
pursuant to the EALP Guaranty, which EALP Guaranty is hereby acknowledged and
reaffirmed with respect to all Obligations of Borrower (other than the EALP Term
Loan) arising pursuant to the Loan Agreement and other Loan Documents, as
amended by this Amendment.

     7. MISCELLANEOUS.

     7.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made herein and in the Loan Agreement shall survive the execution and
delivery of this Amendment, and no investigation by Foothill or any closing
shall affect the representations and warranties or the right of Foothill to rely
upon them.

                                     Page 6
<PAGE>   7

     7.02 REFERENCE TO LOAN AGREEMENT. The Loan Agreement, as amended hereby,
and all other Loan Documents, whether now or hereafter executed and delivered,
are hereby amended so that any reference to the Loan Agreement shall mean a
reference to the Loan Agreement, as amended by this Amendment.

     7.03 EXPENSES OF FOOTHILL AND AMENDMENT AND CONSENT FEE. In consideration
of Foothill's execution and delivery of this Amendment and the Consent, Borrower
shall pay to Foothill a fee in the aggregate amount of $75,000, which fee shall
be earned by Foothill and shall be due and payable upon the execution by
Foothill of a counterpart of this Amendment. In addition to such fee and as
provided in the Loan Agreement, Borrower agrees to pay on demand all costs and
expenses incurred by Foothill in connection with the preparation, negotiation
and execution of this Amendment, including, without limitation, the costs and
fees of Foothill's legal counsel, and all costs and expenses incurred by
Foothill in connection with the enforcement or preservation of any rights under
the Loan Agreement, as amended hereby, or any other Loan Document.

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

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

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

     7.07 FACSIMILE TRANSMISSION OF SIGNATURES. Any party to this Amendment may
indicate its intention to be bound by its execution and delivery of this
Amendment by its signature to the signature page hereof and the delivery of the
signature page hereof, to the other party or its representatives by facsimile
transmission or telecopy. The delivery of a party's signature on the signature
page by facsimile transmission or telecopy shall have the same force and effect
as if such party signed and delivered this Amendment in person.

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

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

                                     Page 7

<PAGE>   8

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

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

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     Page 8

<PAGE>   9

     IN WITNESS HEREOF, this Amendment has been executed and delivered as of the
date first set forth above.

                                       GRANT GEOPHYSICAL, INC.,
                                       a Delaware corporation

                                       By:
                                           -------------------------------------
                                           Thomas L. Easley,
                                           Executive Vice President-Finance and
                                           Administration

                                       FOOTHILL CAPITAL CORPORATION,
                                       a California corporation, as Agent and
                                       as a Lender

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

                                       ELLIOTT ASSOCIATES, L.P.
                                       a Delaware limited partnership

                                       By:
                                           -------------------------------------
                                           Paul E. Singer,
                                           General Partner

                                       ADVANCED SEISMIC TECHNOLOGY, INC.,
                                       a Texas corporation

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

                                     Page 9
<PAGE>   10

                                  GRANT GEOPHYSICAL DO BROSIL LTDA.,
                                  a corporation organized under the laws of the
                                  Republic of Brazil, South America

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

                                  GRANT GEOPHYSICAL CORP.,
                                  a Texas corporation

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

                                  GRANT GEOPHYSICAL (INT'L) INC.,
                                  a Texas corporation

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

                                  PT. GRANT GEOPHYSICAL INDONESIA,
                                  a corporation organized under the laws of
                                  the Republic of Indonesia

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

                                    Page 10
<PAGE>   11

                                  SOLID STATE GEOPHYSICAL INC.,
                                  a corporation organized under the laws of the
                                  Province of Alberta, Canada

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

                                    Page 11
<PAGE>   12

                                    EXHIBIT A

                        (FORM OF FCC TERM NOTE ATTACHED)

<PAGE>   13

                           THIRD AMENDED AND RESTATED
                             SECURED PROMISSORY NOTE

$11,500,000.00                                            Boston, Massachusetts
                              March 21, 2001, effective as of February 14, 2000

         FOR VALUE RECEIVED, GRANT GEOPHYSICAL, INC., a Delaware corporation
("Borrower"), promises to pay to the order of FOOTHILL CAPITAL CORPORATION, a
California corporation ("Foothill"), at its offices at 11111 Santa Monica
Boulevard, Suite 1500, California 90025-3333, or at such other place or places
as Foothill may from time to time designate in writing, the principal sum of
Eleven Million Five Hundred Thousand and No/100 Dollars ($11,500,000.00), plus
interest in the manner and upon the terms and conditions set forth below. This
Third Amended and Restated Secured Promissory Note (this "Note") is made
pursuant to that certain Loan and Security Agreement (as amended, the "Loan
Agreement"), dated as of May 11, 1999, among Borrower, the lending entities from
time to time party thereto (together with their respective successors and
assigns, the "Lenders"), and Foothill, as agent for the Lenders (the "Agent"),
the provisions of which are incorporated herein by this reference, and evidences
the FCC Term Loan, as defined and described in the Loan Agreement. Capitalized
terms herein, unless otherwise noted, shall have the meaning set forth in the
Loan Agreement.

1.0 SCHEDULE OF PAYMENTS; RATE AND PAYMENT OF INTEREST; PREPAYMENT.

         1.1 Except to the extent this Note may become due and payable earlier
in accordance with the Loan Agreement, this Note shall be due and payable in as
follows:

         (a) thirty-one (31) equal successive monthly installments of principal
     of Three Hundred Sixty-Three Thousand Two Hundred Sixty Dollars and No/100
     ($363,260.00), each on the first day of each month, beginning April 1,
     2000, and continuing through and including October 1, 2002;

         (b) accrued interest on the principal balance from time to time
     remaining unpaid, payable monthly on the first day of each and every month,
     beginning March 1, 2000; and

         (c) a final principal installment equal to the unpaid principal balance
     of this Note on November 1, 2002, together with accrued interest on the
     principal balance remaining unpaid.

         1.2 Prepayment may be made under this Note in whole or in part, subject
to the provisions of Section 3.6 set forth in the Loan Agreement.
Notwithstanding anything herein to the contrary, in the event that the Loan
Agreement is terminated by Borrower, by Foothill or by any other person at any
time, then the entire unpaid principal balance of this Note, together with all
accrued and unpaid interest hereon, shall become immediately due and payable in
full on the effective date of such termination, without presentment, notice or
demand of any kind.

         1.3 Interest shall be computed on the basis of a 360-day year for the
actual number of days elapsed, and shall be at the rate of one and one-half
(1-1/2) percentage points above the Reference Rate (as hereinafter defined),
computed on the basis of a 360-day year; provided, however, upon the occurrence
and during the continuance of an Event of Default (as hereinafter defined),
interest shall accrue on the outstanding principal balance of this Note at a
default rate (the "Default Rate") of five and one-half (5-1/2) percentage
points above the Reference Rate, and shall be payable on demand. "Reference
Rate" means, for any day, the rate of interest per annum (over a year of 360
days) announced by Wells Fargo Bank, National Association, or any successor
thereto (the "Bank"), from time to time, as its "base rate" (or any successor
thereto) in effect on such day. The Reference Rate is not necessarily the lowest

SECURED PROMISSORY NOTE--Page 1

<PAGE>   14

rate charged by the Bank. The applicable rate of interest assessed hereunder
will be increased or decreased from time to time hereafter in an amount equal to
any increase or decrease hereafter made by the Bank in the Reference Rate. A
change in the Reference Rate shall be effective automatically and immediately on
the occurrence of such change.

2.0 EVENTS OF DEFAULTS; REMEDIES.

         2.1 The occurrence of an Event of Default under the Loan Agreement
shall constitute a default by Borrower under this Note (hereinafter an "Event of
Default").

         2.2 Upon the occurrence of any Event of Default hereunder, the Lenders
and the Agent shall have all rights and remedies as may be provided under the
Loan Agreement or applicable law.

3.0 GENERAL PROVISIONS.

         3.1 Borrower warrants and represents to the Agent and the Lenders that
Borrower has used and will continue to use the loans and advances represented by
this Note solely for proper business purposes, and consistent with all
applicable laws and statutes.

         3.2 This Note is secured by the Collateral described in the Loan
Agreement.

         3.3 Borrower waives presentment, demand and protest, notice of protest,
notice of presentment, notice of intention to accelerate, notice of
acceleration, and all other notices and demands in connection with the
enforcement of the Lenders', Foothill's or the Agent's rights hereunder or under
the Loan Agreement, except as specifically provided and called for by this Note
or the Loan Agreement, and hereby consents to, and waives notice of, the
release, addition, or substitution, with or without consideration, of any
collateral or of any person liable for payment of this Note or any other
Obligation. Any failure of the Lenders or the Agent to exercise any right
available hereunder, under the Loan Agreement or otherwise shall not be
construed as a waiver of the right to exercise the same or as a waiver of any
other right at any other time.

         3.4 If this Note is not paid when due or upon the occurrence of an
Event of Default, Borrower further promises to pay all costs of collection,
foreclosure fees, attorneys' fees and expert witness fees incurred by the
Lenders or the Agent, whether or not suit is filed hereon, and the fees, costs
and expenses as provided in the Loan Agreement.

         3.5 It is the intent of the parties to comply with applicable usury
laws (the "Applicable Usury Law"). Accordingly, it is agreed that
notwithstanding any provisions to the contrary in this Note, or in any of the
documents securing payment hereof or otherwise relating hereto, in no event
shall this Note or such documents require the payment or permit the collection
of interest in excess of the Maximum Interest Rate, then in any such event (1)
the provisions of the paragraph shall govern and control, (2) neither Borrower
nor any other person or entity now or hereafter liable for the payment hereof
shall be obligated to pay the amount of such interest to the extent that it is
in excess of the Maximum Interest Rate, (3) any such excess which may have been
collected shall be either applied as a credit against the then unpaid principal
amount hereof or refunded to Borrower, at Foothill's option, and (4) the
effective rate of interest shall be automatically reduced to the Maximum
Interest Rate. It is further agreed, without limiting the generality of the
foregoing, that to the extent permitted by the Applicable Usury Law, (x) all
calculations of interest which are made for the purpose of determining whether
such rate would exceed the Maximum Interest Rate shall be made by amortizing,
prorating, allocating and spreading during the period of the full stated term of
the loan evidenced hereby, all interest at any time contracted for, charged or
received from Borrower or otherwise in connection with such loan; and (y) in

SECURED PROMISSORY NOTE--Page 2

<PAGE>   15

the event that the effective rate of interest on the loan should at any time
exceed the Maximum Interest Rate, such excess interest that would otherwise have
been collected had there been no ceiling imposed by the Applicable Usury Law
shall be paid to Foothill from time to time, if and when the effective interest
rate on the loan otherwise falls below the Maximum Interest Rate, until the
entire amount of interest which would otherwise have been collected had there
been no ceiling imposed by the Applicable Usury Law has been paid in full.
Borrower further agrees that should the Maximum Interest Rate be increased at
any time hereafter because of a change in the Applicable Usury Law, then to the
extent not prohibited by the Applicable Usury Law, such increases shall apply to
all indebtedness evidenced hereby regardless of when incurred; but, again to the
extent not prohibited by the Applicable Usury Law, should the Maximum Interest
Rate be decreased because of a change in the Applicable Usury Law, such
decreases shall not apply to the indebtedness evidenced hereby regardless of
when incurred.

         3.6 Subject to the applicable provisions of the Loan Agreement,
Foothill may at any time transfer this Note and Foothill's rights in any or all
collateral securing this Note, and Foothill thereafter shall be relieved from
all liability with respect to such collateral arising after the date of such
transfer.

         3.7 This Note shall be binding upon Borrower and its legal
representatives, successors and assigns. Wherever possible, each provision of
this Note shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Note shall be prohibited by or
invalid under such law, such provision shall be severable, and be ineffective to
the extent of such prohibition or invalidity, without invalidating the remaining
provision of this Note.

         THIS NOTE HAS BEEN DELIVERED FOR ACCEPTANCE BY FOOTHILL IN BOSTON,
MASSACHUSETTS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF THE
COMMONWEALTH OF MASSACHUSETTS, AS THE SAME MAY FROM TIME TO TIME BE IN EFFECT,
INCLUDING, WITHOUT LIMITATION, THE UNIFORM COMMERCIAL CODE AS ADOPTED IN
MASSACHUSETTS. BORROWER HEREBY (i) IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED IN SUFFOLK COUNTY, MASSACHUSETTS OVER ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO
THIS NOTE; (ii) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT BORROWER MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
ANY SUCH ACTION OR PROCEEDING; (iii) AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR
PROCEEDING AGAINST FOOTHILL OR ANY OF FOOTHILL'S DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS OR PROPERTY, CONCERNING ANY MATTER ARISING OUT OF OR RELATING TO THIS
NOTE IN ANY COURT OTHER THAN ONE LOCATED IN SUFFOLK COUNTY, MASSACHUSETTS; AND
(iv) IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING UNDER
OR IN CONNECTION WITH THIS NOTE. NOTHING IN THIS PARAGRAPH SHALL AFFECT OR
IMPAIR FOOTHILL'S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW OR
FOOTHILL'S RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR
BORROWER'S PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.

         This Note amends, modifies, restates and replaces, but does not
extinguish the indebtedness evidenced by, that certain Second Amended and
Restated Secured Promissory Note, dated February 14, 2000, executed by Borrower
and payable to the order of Foothill in the original principal amount of
$11,500,000 (the "Third Prior Note"), which Third Prior Note, in turn, amended,
modified, restated and replaced but did not extinguish the indebtedness
evidenced by, that certain Amended and Restated Secured Promissory Note, dated
September 23, 1999, executed by Borrower and payable to the order of

SECURED PROMISSORY NOTE--Page 3

<PAGE>   16

Foothill in the original stated principal amount of $11,637,500.00 (the "Second
Prior Note"), which Second Prior Note, in turn, amended, modified, increased,
restated and replaced, but did not extinguish the indebtedness evidenced by,
that certain Secured Promissory Note, dated May 11, 1999, executed by Borrower
and payable to the order of Foothill in the original stated principal amount of
$11,500,000.00 ("First Prior Note"). All rights, titles, liens, security
interests and agreements securing or benefiting the Third Prior Note, the Second
Prior Note or the First Prior Note, or all of them, are preserved, maintained
and carried forward to secure and benefit this Note.

                                       GRANT GEOPHYSICAL, INC.,
                                       a Delaware corporation

                                       By:
                                           -------------------------------------
                                           Thomas L. Easley,
                                           Executive Vice President-Finance and
                                           Administration

                                       "Borrower"

                                       Federal Taxpayer Identification
                                       Number: 76-0548468

                                       Address:
                                       16850 Park Row
                                       Houston, Texas  77084

SECURED PROMISSORY NOTE--Page 4

<PAGE>   17

                                    EXHIBIT B

                           Description of Sale Assets

All of the Borrower's right, title and interest in and to approximately 1,300
square miles of 3-D seismic data in the Matagorda, Bay City, Polk County,
Tri-County, Weimer and Mills Bennett surveys, including all processed tapes,
field tapes, other tapes and support data, files, films, microfilms, mylar,
blacklines, sections (stack and migration), shot points base maps, x-y
coordinates and derivatives related to such surveys (collectively, the "Data");

All of the Borrower's right, title and interest in and to the Borrower's
agreements regarding the acquisition, ownership or licensing of the Data which
may be assigned by the Borrower without the consent of any person or for which
Borrower has obtained all necessary consents to assign (the "Assumed Contracts")
as of the date specified (the "Closing Date") in the Seismic Data Purchase
Agreement between Seitel Data, Ltd. and Borrower, entered into after February
15, 2001;

All of the Borrower's rights accruing after the Closing Date under any
agreements regarding the acquisition, ownership or licensing of Data, which may
not be assigned by the Borrower without the consent of a third party and which
consents have not been obtained as of the Closing Date (the "Assigned Rights");
and

Any and all copyrights, trade secrets, know-how, inventions, rights to software,
patents, patent applications, and other intellectual property rights, whether
registered or unregistered, existing in the Data (the "Intellectual Property
Rights").<PAGE>

                                                                     Exhibit 4.1

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

                            Star Gas Partners, L.P.

                                      and

                    American Stock Transfer & Trust Company

                                As Rights Agent

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

                        Unit Purchase Rights Agreement

                          Dated as of April 17, 2001

--------------------------------------------------------------------------------
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                              Page
<S>        <C>                                               <C>

SECTION 1.  CERTAIN DEFINITIONS..............................  1
SECTION 2.  APPOINTMENT OF RIGHTS AGENT......................  1
SECTION 3.  ISSUANCE OF RIGHTS CERTIFICATES..................  1
SECTION 4.  FORM OF RIGHTS CERTIFICATES......................  1
SECTION 5.  SECTION 5. COUNTERSIGNATURE AND REGISTRATION.....  1
SECTION 6.  TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
            OF RIGHTS CERTIFICATES; MUTILATED, DESTROYED,
            LOST OR STOLEN RIGHTS CERTIFICATES...............  1
SECTION 7.  EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
            DATE OF RIGHTS...................................  1
SECTION 8.  CANCELLATION AND DESTRUCTION OF RIGHTS
            CERTIFICATES.....................................  1
SECTION 9.  RESERVATION AND AVAILABILITY OF CLASS A
            COMMON UNITS.....................................  1
SECTION 10. CLASS A COMMON UNITS RECORD DATE.................  1
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF
            CLASS A COMMON UNITS OR NUMBER OF RIGHTS.........  1
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
            OF COMMON UNITS..................................  1
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
            ASSETS OR EARNING POWER........................    1
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL COMMON UNITS....  1
SECTION 15. RIGHTS OF ACTION.................................  1
SECTION 16. AGREEMENT OF RIGHTS HOLDERS......................  1
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A UNITHOLDER  1
SECTION 18. CONCERNING THE RIGHTS AGENT......................  1
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME
            OF RIGHTS AGENT..................................  1
SECTION 20. DUTIES OF RIGHTS AGENT...........................  1
SECTION 21. CHANGE OF RIGHTS AGENT...........................  1
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES..............  1
SECTION 23. REDEMPTION.......................................  1
SECTION 24. EXCHANGE.........................................  1
</TABLE>
<PAGE>

SECTION 25. NOTICE OF CERTAIN EVENTS.........................  1
SECTION 26. NOTICES..........................................  1
SECTION 27. SUPPLEMENTS AND AMENDMENTS.......................  1
SECTION 28. SUCCESSORS.......................................  1
SECTION 29. DETERMINATIONS AND ACTIONS BY THE GENERAL
            PARTNER, ETC.....................................  1
SECTION 30. BENEFITS OF THIS AGREEMENT.......................  1
SECTION 31. SEVERABILITY.....................................  1
SECTION 32. GOVERNING LAW....................................  1
SECTION 33. COUNTERPARTS.....................................  1
SECTION 34. DESCRIPTIVE HEADINGS.............................  1
SECTION 35. AMENDMENT TO PARTNERSHIP AGREEMENT...............  1

                                   EXHIBITS

Exhibit A Form of Rights Certificate
Exhibit B Summary of Rights
Exhibit C Fee Schedule
<PAGE>

                        UNIT PURCHASE RIGHTS AGREEMENT

                This Unit Purchase Rights Agreement (the "Agreement"), is dated
     as of April 17, 2001, between STAR GAS PARTNERS, L.P., a Delaware limited
     partnership (the "Partnership"), and AMERICAN STOCK TRANSFER & TRUST
     COMPANY, as rights agent (the "Rights Agent").

                On April 16, 2001 (the "Rights Distribution Declaration Date"),
     the General Partner (as hereinafter defined) of the Partnership authorized
     and declared a distribution of one unit purchase right (a "Right") for each
     Unit (as hereinafter defined) of the Partnership outstanding as of the
     Close of Business (as hereinafter defined) on April 27, 2001 (the "Record
     Date"), each Right representing the right to purchase one Class A Common
     Unit (as such number may be adjusted pursuant to the provisions of this
     Agreement), having the rights, preferences and privileges set forth in the
     Partnership Agreement, upon the terms and subject to the conditions herein
     set forth, and further authorized and directed the issuance of one Right
     (as such number may be adjusted pursuant to the provisions of this
     Agreement) with respect to each Unit that shall become outstanding between
     the Record Date and the earlier of the Distribution Date and the Expiration
     Date (as such terms are hereinafter defined), and in certain circumstances
     after the Distribution Date. Capitalized terms used but not defined shall
     have the meanings assigned to such terms in Section 1.

                NOW, THEREFORE, in consideration of the promises and the mutual
     agreements herein set forth, the parties hereby agree as follows:

                SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
     the following terms have the meanings indicated:

                (a) "Acquiring Person" shall mean any Person who or which,
     together with all Affiliates and Associates of such Person, shall be the
     Beneficial Owner of 15% or more of (i) the Common Units or (ii) the
     Subordinated Units then outstanding but shall not include an Exempt Person
     (as hereinafter defined). Notwithstanding the foregoing, no Person shall be
     deemed to be an Acquiring Person either (i) as the result of an acquisition
     of either Common Units or Subordinated Units by the Partnership which, by
     reducing the number of Units outstanding, increases the proportionate
     number of Common Units or Subordinated Units beneficially owned by such
     Person, together with all Affiliates or Associates of such Person, to 15%
     or more of either the Common Units or the Subordinated Units then
     outstanding; provided, however, that if a Person, together with all
     Affiliates or Associates of such Person, shall become the Beneficial Owner
     of 15% or more of either the Common Units or the Subordinated Units then
     outstanding by reason of Unit purchases by the Partnership and shall, after
     such Unit purchases by the Partnership, become the Beneficial Owner of any
     additional Common Units or Subordinated Units, then such Person shall be
     deemed to be an Acquiring Person unless upon the consummation of the
     acquisition of such additional Common Units or Subordinated Units such
     Person, together with all Affiliates or Associates of such Person, does not
     own 15% or more of either the Common Units or the Subordinated Units then
     outstanding. Notwithstanding the foregoing, if the General Partner
     determines in good faith that a Person who would otherwise be an "Acquiring
     Person", as defined pursuant to the foregoing provisions of this paragraph
     (a), has become such inadvertently, and such Person divested or divests as
     promptly as practicable a

                                       1
<PAGE>

     sufficient number of Common Units or Subordinated Units so that such Person
     would no longer be an "Acquiring Person", as defined pursuant to the
     foregoing provisions of this paragraph (a), then such Person shall not be
     deemed to be or to have become an "Acquiring Person" for any purposes of
     this Agreement. Notwithstanding anything to the contrary contained herein,
     for the purpose of the definition of a "Triggering Event" a Person that
     becomes an Acquiring Person prior to the end of the Subordination Period
     will continue to be deemed to be an Acquiring Person following the date of
     the termination of the Subordination Period whether or not such Person owns
     15% or more of the Common Units at such time.

                (b) "Affiliate" shall have the meaning ascribed to such term in
     Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as
     in effect on the date of this Agreement.

                (c) "Assignee" shall have the meanings ascribed to it in the
     Partnership Agreement.

                (d) "Associate" shall have the meaning ascribed to such term in
     Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as
     in effect on the date of this Agreement.

                (e) A Person shall be deemed the "Beneficial Owner" of and shall
     be deemed to "beneficially own" any securities:

                (i)  which such Person or any of such Person's Affiliates or
     Associates beneficially owns, directly or indirectly, for purposes of
     Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or any
     comparable or successor law or regulation);

                (ii) which such Person or any of such Person's Affiliates or
     Associates has (A) the right to acquire (whether such right is exercisable
     immediately or only after the passage of time) pursuant to any agreement,
     arrangement or understanding (other than customary agreements with and
     between underwriters and selling group members with respect to a bona fide
     public offering of securities), or upon the exercise of conversion rights,
     exchange rights, rights (other than the Rights), warrants or options, or
     otherwise; provided, however, that a Person shall not be deemed pursuant to
     this Section 1(e)(ii)(A) the Beneficial Owner of, or to beneficially own,
     (1) securities tendered pursuant to a tender or exchange offer made by or
     on behalf of such Person or any of such Person's Affiliates or Associates
     until such tendered securities are accepted for purchase or exchange, or
     (2) securities which a Person or any of such Person's Affiliates or
     Associates may be deemed to have the right to acquire pursuant to any
     merger or other acquisition agreement between the Partnership and such
     Person (or one or more of its Affiliates or Associates) if such agreement
     has been approved by the General Partner prior to such Person becoming an
     Acquiring Person; or (B) the right to vote pursuant to any agreement,
     arrangement or understanding; provided, however, that a Person shall not be
     deemed the Beneficial Owner of, or to beneficially own, any security under
     this Section 1(e)(ii)(B) if the agreement, arrangement or understanding to
     vote such security (1) arises solely from a revocable proxy or consent
     given to such Person in response to a public proxy or consent solicitation
     made pursuant to, and in accordance with, the

                                       2
<PAGE>

     applicable rules and regulations of the Exchange Act and (2) is not also
     then reportable on Schedule 13D under the Exchange Act (or any comparable
     or successor report); or

                (iii)  which are beneficially owned, directly or indirectly, by
     any other Person (or any Affiliate or Associate thereof) with which such
     Person or any of such Person's Affiliates or Associates has any agreement,
     arrangement or understanding, whether or not in writing (other than
     customary agreements with and between underwriters and selling group
     members with respect to a bona fide public offering of securities) for the
     purpose of acquiring, holding, voting (except to the extent contemplated by
     the proviso to Section 1(e)(ii)(B)) or disposing of any securities of the
     Partnership; provided, however, that in no case shall an officer or
     director of the General Partner be deemed to be (x) the Beneficial Owner of
     any securities beneficially owned by another officer or director of the
     General Partner solely by reason of actions undertaken by such persons in
     their capacity as officers or directors of the General Partner or (y) the
     Beneficial Owner of securities held of record by the trustee of any
     employee benefit plan of the General Partner or any Subsidiary of the
     Partnership for the benefit of any employee of the Partnership or any
     Subsidiary of the Partnership, other than the officer or director, by
     reason of any influence that such officer or director may have over the
     voting of the securities held in the plan.

                (f) "Business Day" shall mean any day other than a Saturday,
     Sunday or a day on which banking institutions in New York are authorized or
     obligated by law or executive order to close.

                (g) "Class A Common Unit" shall mean a Unit representing a
     fractional part of the Partnership Interests of all Limited Partners and
     Assignees and having the rights and obligations specified with respect to
     Class A Common Units in the Partnership Agreement; no Class A Common Units
     shall be outstanding until the expiration of the Subordination Period, at
     which time all Common Units Outstanding immediately prior to the expiration
     of the Subordination Period shall be redesignated as Class A Common Units.

                (h) "Class B Common Unit" shall mean a Unit representing a
     fractional part of the Partnership Interests of all Limited Partners and
     Assignees and having the rights and obligations specified with respect to
     Class B Common Units in the Partnership Agreement; no Class B Common Units
     shall be outstanding until the expiration of the Subordination Period, at
     which time each Outstanding Senior Subordinated Unit and Junior
     Subordinated Unit shall convert into one Class B Common Unit.

                (i) "Close of Business" on any given date shall mean 5:00 P.M.,
     New York time, on such date; provided, however, that if such date is not a
     Business Day, it shall mean 5:00 P.M., New York time, on the next
     succeeding Business Day.

                (j) "Common Unit" shall mean a Unit representing a fractional
     part of the Partnership Interests of all Limited Partners and Assignees and
     having the rights and obligations specified with respect to Common Units in
     the Partnership Agreement. All references herein to Common Units after the
     expiration of the Subordination Period shall be

                                       3
<PAGE>

     deemed to be references to both Class A Common Units and Class B Common
     Units, unless otherwise indicated.

                (k) "Distribution Date" shall mean the earlier of (i) the Close
     of Business on the tenth calendar day (or such later date as may be
     determined by action of the General Partner but not later than the date on
     which a Triggering Event occurs) after the Unit Acquisition Date (or, if
     the tenth day after the Unit Acquisition Date occurs before the Record
     Date, the Close of Business on the Record Date) or (ii) the Close of
     Business on the tenth calendar day (or such later date as may be determined
     by action of the General Partner prior to such time as any Person becomes
     an Acquiring Person) after the date that any Person (other than an Exempt
     Person) has first published, sent or given the means to tender or exchange
     Units to Unitholders, within the meaning of Rule 14d-2(a) of the General
     Rules and Regulations under the Exchange Act, if, assuming the successful
     consummation thereof, such Person would be the Beneficial Owner of 15% or
     more of either the Common Units or the Subordinated Units then outstanding.

                (l) "Equivalent Units " shall mean Common Units and any other
     class or series of Partnership Securities which is entitled to participate
     in distributions, including distributions upon the liquidation, dissolution
     or winding up of the Partnership, on a proportional basis with the Class A
     Common Units. In calculating the number of any class or series of
     Equivalent Units for purposes of Section 11 of this Rights Agreement, the
     number of Equivalent Units, or fractions of an Equivalent Unit, of such
     class or series of Equivalent Units that is entitled to the same
     distribution as a whole Class A Common Unit shall be deemed to be one unit.

                (m) "Exchange Act" shall mean the Securities Exchange Act of
     1934, as amended.

                 (n) "Exchange Ratio" shall have the meaning set forth in
     Section 11(a)(i) hereof.

                 (o) "Exempt Person" shall mean the Partnership, the General
     Partner, any Subsidiary of the Partnership, any Subsidiary or Affiliate of
     the General Partner, or any employee benefit plan or employee unit purchase
     plan of the Partnership or the General Partner or of any Subsidiary of the
     Partnership or of any Subsidiary or Affiliate of the General Partner, or
     any trust or other entity organized, appointed, established or holding
     Units for or pursuant to the terms of any such plan.

                 (p) "Expiration Date" shall mean the earliest of (i) the Close
     of Business on the Final Expiration Date, (ii) the Redemption Date, (iii)
     the time at which all exercisable Rights are exchanged as provided in
     Section 24 hereof or (iv) the consummation of a transaction contemplated by
     Section 13(d) hereof.

                 (q)  "Final Expiration Date" shall mean April 16, 2011.

                 (r) "General Partner" shall mean Star Gas LLC, a Delaware
     limited liability company, and its successor as general partner of the
     Partnership.

                                       4
<PAGE>

                (s) "General Partner Interest" shall mean the ownership interest
     of the general partner in the Partnership (in its capacity as a general
     partner without reference to any Limited Partner Interest held by it) which
     is evidenced by General Partner Units and includes any and all benefits to
     which the general partner is entitled as provided in the Partnership
     Agreement, together with all obligations of the general partner to comply
     with the terms and provisions of the Partnership Agreement.

                (t) "General Partner Unit" shall mean a Unit representing a
     fractional part of the General Partner Interest and having the rights and
     obligations specified with respect to the General Partner Interest in the
     Partnership Agreement.

                (u) "Junior Subordinated Unit" shall mean a Unit representing a
     fractional part of the Partnership Interests of all Limited Partners and
     Assignees and having the rights and obligations specified with respect to
     Junior Subordinated Units in the Partnership Agreement.

                (v) "Limited Partner shall have the meaning ascribed to it in
     the Partnership Agreement.

                (w) "Limited Partner Interest" shall mean the ownership interest
     of a Limited Partner in the Partnership which is evidenced by Common Units,
     Senior Subordinated Units and Junior Subordinated Units or other
     Partnership Securities and includes any and all benefits to which a Limited
     Partner is entitled as provided in this Agreement, together with all
     obligations of a Limited partner to comply with the terms and provisions of
     this Agreement.

                (x) "Nasdaq" shall mean the National Association of Securities
     Dealers, Inc. Automated Quotation System.

                (y) "Partnership Agreement" shall mean the Amended and Restated
     Agreement of Limited Partnership of the Partnership, dated as of March 26,
     1999, as the same may be amended or supplemented from time to time
     hereafter, including, without limitation, pursuant to Section 35 hereof.

                (z) "Partnership Interest" shall mean an interest in the
     Partnership which shall include General Partner Interests and Limited
     Partner Interests.

                (aa) "Partnership Security" shall mean any class or series of
     Units, any option, right, warrant or appreciation rights relating thereto,
     or any other type of equity interest that the Partnership may lawfully
     issue pursuant to the Partnership Agreement, or any unsecured or secured
     debt obligation of the Partnership that is convertible into any class or
     series of equity interests of the Partnership.

                (bb) "Permitted Offer" shall mean a tender offer for all
     outstanding Units made in the manner prescribed by Section 14(d) of the
     Exchange Act and the rules and regulations promulgated thereunder;
     provided, however, that such tender offer occurs at a time when General
     Partner has determined that the offer is both adequate and otherwise in the
     best

                                       5
<PAGE>

     interests of the Partnership and its partners (taking into account all
     factors that the General Partner deems relevant).

                (cc) "Person" shall mean any individual, firm, corporation
     limited liability company, partnership, limited partnership or other
     entity, and shall include any successor (by merger or otherwise) of such
     entity.

                (dd) "Purchase Price" shall have the meaning set forth in
     Section 7(b) hereof.

                (ee) "Record Date" shall have the meaning set forth in the
     recitals at the beginning of this Agreement.

                (ff) "Redemption Date" shall mean the time at which the General
     Partner orders redemption of the Rights as provided in Section 23 hereof.

                (gg) "Redemption Price" shall have the meaning set forth in
     Section 23(a) hereof.

                (hh) "Rights Certificate" shall have the meaning set forth in
     Section 3(c) hereof.

                (ii) "Rights Distribution Declaration Date" shall have the
     meaning set forth in the recitals at the beginning of this Agreement.

                (jj) "Section 13 Event" shall mean any event described in clause
     (i), (ii) or (iii) of Section 13(a) hereof.

                (kk) "Securities Act" shall have the meaning set forth in
     Section 9(c) hereof.

                (ll) "Senior Subordinated Unit" shall mean a Unit representing a
     fractional part of the Partnership Interests of all Limited Partners and
     Assignees, and having the rights and obligations specified with respect to
     Senior Subordinated Units in the Partnership Agreement.

                (mm) "Subordinated Units" shall mean the Senior Subordinated
     Units and the Junior Subordinated Units."

                (nn) "Subordination Period" shall have the meaning ascribed to
     it in the Partnership Agreement.

                (oo) "Subsidiary" of any Person shall mean any corporation or
     other entity of which an amount of voting securities sufficient to elect a
     majority of the directors or Persons having similar authority of such
     corporation or other entity is beneficially owned, directly or indirectly,
     by such Person, or any corporation or other entity otherwise controlled by
     such Person.

                                       6
<PAGE>

                (pp) "Summary of Rights" shall have the meaning set forth in
     Section 3(b) hereof.

                (qq) "Total Exercise Price" shall have the meaning set forth in
     Section 4(a) hereof.

                (rr) "Trading Day" shall have the meaning set forth in Section
     11(d) hereof.

                (ss) A "Triggering Event" shall be deemed to have occurred upon
    either:

                     (A) the date on which any Person (other than an Exempt
                     Person) becomes an Acquiring Person if on or prior to such
                     date the Subordination Period shall have terminated, or, if
                     the Subordination Period shall not have terminated on the
                     date that a Person becomes an Acquiring Person, the date on
                     which the Subordinated Period subsequently terminates
                     (provided that if a Person became an Acquiring Person prior
                     to the date on which the Subordination Period terminates
                     there continues to be an Acquiring Person on such date), or

                     (B) the date of the occurrence of a Section 13 Event.

                (tt) "Unit" shall mean a Partnership Interest of a Partner or
     Assignee in the Partnership representing a fractional part of the
     Partnership Interests of all Partners and Assignees and shall include
     Common Units (Class A Common Units and Class B Common Units after the
     expiration of the Subordination Period), Senior Subordinated Units, Junior
     Subordinated Units and General Partner Units; provided that each Unit at
     any time Outstanding shall represent the same fractional part of the
     Partnership Interests of all Partners and Assignees holding Units as each
     other Unit.

                (uu) "Unit Acquisition Date" shall mean the first date of public
     announcement (which, for purposes of this definition, shall include,
     without limitation, a report filed pursuant to Section 13(d) under the
     Exchange Act) by the Partnership or an Acquiring Person that an Acquiring
     Person has become such; provided that, if such person is determined not to
     have become an Acquiring Person pursuant to Section 1(a) hereof, then no
     Unit Acquisition Date shall be deemed to have occurred.

         SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Partnership hereby appoints
     the Rights Agent to act as agent for the Partnership and the holders of the
     Rights (who, in accordance with Section 3 hereof, shall prior to the
     Distribution Date also be the holders of the Units) in accordance with the
     terms and conditions hereof, and the Rights Agent hereby accepts such
     appointment. The Partnership may from time to time appoint such co-Rights
     Agents as it may deem necessary or desirable.

                                       7
<PAGE>

         SECTION 3.  ISSUANCE OF RIGHTS CERTIFICATES.

                    (a)  Until the Distribution Date, (i) the Rights will be
     evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by
     the certificates for Units registered in the names of the holders thereof
     (which certificates shall also be deemed to be Rights Certificates) and not
     by separate Rights Certificates and (ii) the right to receive Rights
     Certificates will be transferable only in connection with the transfer of
     Units. Until the earlier of the Distribution Date, or the Expiration Date,
     the surrender for transfer of such Unit certificates shall also constitute
     the surrender for transfer of the Rights associated with the Units
     represented thereby. As soon as practicable after the Distribution Date,
     the Partnership will prepare and execute, the Rights Agent will
     countersign, and the Partnership will send or cause to be sent (and the
     Rights Agent will, if requested, send) by first-class, postage-prepaid
     mail, to each record holder of Units as of the close of business on the
     Distribution Date, at the address of such holder shown on the records of
     the Partnership, a Rights Certificate, in substantially the form of Exhibit
     A hereto (a "Rights Certificate"), evidencing one Right for each Unit so
     held, subject to adjustment as provided herein. In the event that an
     adjustment in the number of Rights per Unit has been made pursuant to
     Section 11(a)(i) or Section 11(i) hereof, then at the time of distribution
     of the Rights Certificates, the Partnership shall make the necessary and
     appropriate rounding adjustments (in accordance with Section 14(a) hereof)
     so that Rights Certificates representing only whole numbers of Rights are
     distributed and cash is paid in lieu of any fractional Rights. As of the
     Distribution Date, the Rights will be evidenced solely by such Rights
     Certificates and may be transferred solely by the transfer of the Rights
     Certificates as permitted hereby, separately and apart from any transfer of
     one or more Units, and the holders of such Rights Certificates as listed in
     the records of the Partnership or any transfer agent or registrar for the
     Rights shall be the record holders there of.

                    (b)  As soon as practicable after the Record Date, the
     Partnership will send a copy of a Summary of Rights in substantially the
     form of Exhibit B hereto (the "Summary of Rights"), by first-class,
     postage-prepaid mail, to each holder of Units that requests same, at the
     address of such holder shown on the records of the Partnership.

                    (c)  Unless the General Partner by resolution adopted at or
     before the time of the issuance (including pursuant to the exercise of
     options under the Partnership's benefit plans) of any Units specifies to
     the contrary, Rights shall be issued in respect of all Units that are
     issued after the Record Date but prior to the earlier of the Distribution
     Date or the Expiration Date or, in certain circumstances provided in
     Section 22 hereof, after the Distribution Date. Certificates representing
     such Units shall also be deemed to be certificates for Rights, and shall
     bear the following legend:

          This certificate also evidences and entitles the holder hereof to
          certain rights as set forth in a Rights Agreement between Star Gas
          Partners, L.P. and American Stock Transfer & Trust Company as the
          Rights Agent, dated as of April 17, 2001 (the "Rights Agreement"), the
          terms of which are hereby incorporated herein by reference and a copy
          of which is on file at the principal executive offices of Star Gas
          Partners, L.P.  Under certain circumstances, as set forth in the
          Rights Agreement, such Rights will be evidenced by separate
          certificates and will no longer be evidenced by this certificate.
          Star Gas Partners, L.P. will mail to the

                                       8
<PAGE>

          holder of this certificate a copy of the Rights Agreement without
          charge after receipt of a written request therefor. Under certain
          circumstances set forth in the Rights Agreement, Rights issued to, or
          held by, any Person who is, was or becomes an Acquiring Person or any
          Affiliate or Associate thereof (as such terms are defined in the
          Rights Agreement), whether currently held by or on behalf of such
          Person or by any subsequent holder, may become null and void.

          With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the
Rights associated with the Units represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the
Units represented thereby. In the event that the Partnership purchases or
acquires any Units after the Record Date but prior to the Distribution Date, any
Rights associated with such Units shall be deemed canceled and retired so that
the Partnership shall not be entitled to exercise any Rights associated with the
Units which are no longer outstanding.

          SECTION 4.  FORM OF RIGHTS CERTIFICATES.

                (a)  The Rights Certificates (and the forms of election to
     purchase Class A Common Units and of assignment to be printed on the
     reverse thereof) shall be substantially in the form of Exhibit A hereto and
     may have such marks of identification or designation and such legends,
     summaries or endorsements printed thereon as the Partnership may deem
     appropriate and as are not inconsistent with the provisions of this
     Agreement, or as may be required to comply with any applicable law or with
     any rule or regulation made pursuant thereto or with any rule or regulation
     of any stock exchange or quotation system on which the Rights may from time
     to time be listed, or to conform to usage. Subject to the provisions of
     Section 11 and Section 22 hereof, the Rights Certificates, whenever
     distributed, shall be dated as of the Record Date (or in the case of Rights
     issued with respect to Units issued by the Partnership after the Record
     Date, as of the date of issuance of such Units) and on their face shall
     entitle the holders thereof to purchase such number of Class A Common Units
     as shall be set forth therein at the Purchase Price set forth therein (the
     aggregate Purchase Price of all Class A Common Units issuable upon exercise
     of one Right shall hereinafter be referred to as the "Total Exercise
     Price"), but the number and type of securities purchasable upon the
     exercise of each Right and the Purchase Price shall be subject to
     adjustment as provided herein.

                (b)  Any Rights Certificate issued pursuant to Section 3(a) or
     Section 22 hereof that represents Rights beneficially owned by: (i) an
     Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii)
     a transferee of an Acquiring Person (or of any such Associate or Affiliate)
     who becomes a transferee after the Acquiring Person becomes such (a "Post-
     Transferee"), (iii) a transferee of an Acquiring Person (or of any such
     Associate or Affiliate) who becomes a transferee prior to or concurrently
     with the Acquiring Person becoming such and receives such Rights pursuant
     to either (A) a transfer (whether or not for consideration) from the
     Acquiring Person to holders of equity interests in such Acquiring Person or
     to any Person with whom such Acquiring Person has any continuing agreement,
     arrangement or understanding regarding the transferred Rights or (B) a
     transfer which the General Partner has determined is part of a plan,
     arrangement or understanding which has as a primary purpose or effect
     avoidance of Section 7(e) hereof (a "Prior Transferee"), or (iv) any
     subsequent transferee

                                       9
<PAGE>

     receiving transferred Rights from a Post Transferee or a Prior Transferee
     either directly or through one or more intermediate transferees, and any
     Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
     transfer, exchange, replacement or adjustment of any other Rights
     Certificate referred to in this sentence, shall contain (to the extent
     feasible) the following legend:

          The Rights represented by this Rights Certificate are or were
          beneficially owned by a Person who was or became an Acquiring Person
          or an Affiliate or Associate of an Acquiring Person (as such terms are
          defined in the Rights Agreement). Accordingly, this Rights Certificate
          and the Rights represented hereby may become null and void in the
          circumstances specified in Section 7(e) of the Rights Agreement.

          SECTION 5.  COUNTERSIGNATURE AND REGISTRATION.

               (a)  The Rights Certificates shall be executed on behalf of the
     Partnership by the Chairman of the Board, Chief Executive Officer,
     President or any Vice President of the General Partner, either manually or
     by facsimile signature, and by the Secretary or an Assistant Secretary of
     the General Partner, either manually or by facsimile signature. The Rights
     Certificates shall be countersigned by the Rights Agent, either manually or
     by facsimile signature, and shall not be valid for any purpose unless
     countersigned. In case any officer of the General Partner who shall have
     signed any of the Rights Certificates shall cease to be such officer of the
     General Partner before countersignature by the Rights Agent and issuance
     and delivery by the Partnership, such Rights Certificates, nevertheless,
     may be countersigned by the Rights Agent and issued and delivered by the
     Partnership with the same force and effect as though the person who signed
     such Rights Certificates had not ceased to be such officer of the General
     Partner, and any Rights Certificate may be signed on behalf of the
     Partnership by any person who, at the actual date of the execution of such
     Rights Certificate, shall be a proper officer of the General Partner to
     sign such Rights Certificate, although at the date of the execution of this
     Rights Agreement any such person was not such an officer.

               (b)  Following the Distribution Date, the Rights Agent will keep
     or cause to be kept, at its office designated for such purposes, books for
     registration and transfer of the Rights Certificates issued hereunder. Such
     books shall show the names and addresses of the respective holders of the
     Rights Certificates, the number of Rights evidenced on its face by each of
     the Rights Certificates and the date of each of the Rights Certificates.

          SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
     CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.

               (a)  Subject to the provisions of Sections 7(e), 14 and 24
     hereof, at any time after the Close of Business on the Distribution Date,
     and at or prior to the Close of Business on the Expiration Date, any Rights
     Certificate or Rights Certificates may be transferred, split up, combined
     or exchanged for another Rights Certificate or Rights Certificates,
     entitling the registered holder to purchase a like number of Class A Common
     Units (or, following a Triggering Event, other securities, cash or other
     assets, as the case may be) as the Rights

                                      10
<PAGE>

     Certificate or Rights Certificates surrendered then entitled such holder to
     purchase. Any registered holder desiring to transfer, split up, combine or
     exchange any Rights Certificate or Rights Certificates shall make such
     request in writing delivered to the Rights Agent, and shall surrender the
     Rights Certificate or Rights Certificates to be transferred, split up,
     combined or exchanged at the office of the Rights Agent designated for such
     purpose. Neither the Rights Agent nor the Partnership shall be obligated to
     take any action whatsoever with respect to the transfer of any such
     surrendered Rights Certificate until the registered holder shall have
     completed and signed the certificate contained in the form of assignment on
     the reverse side of such Rights Certificate and shall have provided such
     additional evidence of the identity of the Beneficial Owner (or former
     Beneficial Owner) or Affiliates or Associates thereof as the Partnership
     shall reasonably request. Thereupon the Rights Agent shall, subject to
     Sections 7(e), 14 and 24 hereof, countersign and deliver to the person
     entitled thereto a Rights Certificate or Rights Certificates, as the case
     may be, as so requested. The Partnership may require payment of a sum
     sufficient to cover any tax or governmental charge that may be imposed in
     connection with any transfer, split up, combination or exchange of Rights
     Certificates.

                (b)  Subject to the provisions of Sections 7(c), 14 and 24
     hereof, at any time after the Close of Business on the Distribution Date,
     and at or prior to the Close of Business on the Expiration Date, upon
     receipt by the Partnership and the Rights Agent of evidence reasonably
     satisfactory to them of the loss, theft, destruction or mutilation of a
     Rights Certificate, and, in case of loss, theft or destruction, of
     indemnity or security reasonably satisfactory to them, and, at the
     Partnership's request, reimbursement to the Partnership and the Rights
     Agent of all reasonable expenses incidental thereto, and upon surrender to
     the Rights Agent and cancellation of the Rights Certificate if mutilated,
     the Partnership will make and deliver a new Rights Certificate of like
     tenor to the Rights Agent for delivery to the registered holder in lieu of
     the Rights Certificate so lost, stolen, destroyed or mutilated.

                SECTION 7.  EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
     OF RIGHTS.

                (a)  Subject to Sections 7(e), 7(f), 23(b) and 24(b) hereof, the
     registered holder of any Rights Certificate may exercise the Rights
     evidenced thereby (except as otherwise provided herein), in whole or in
     part, at any time after the Distribution Date, upon surrender of the Rights
     Certificate, with the form of election to purchase on the reverse side
     thereof duly executed, to the Rights Agent at the office of the Rights
     Agent designated for such purpose, together with payment of the Purchase
     Price for each Class A Common Unit as to which the Rights are exercised, at
     or prior to the Expiration Date. Notwithstanding the foregoing, no Right
     may be exercised prior to the end of the Subordination Period.

                (b)  The purchase price (the "Purchase Price") for each Class A
     Common Unit issuable pursuant to the exercise of a Right shall initially be
     Eighty Dollars ($80.00), shall be subject to adjustment from time to time
     as provided in Sections 11 and 13 hereof and shall be payable in lawful
     money of the United States of America in accordance with paragraph (c)
     below.

                (c)  Upon receipt of a Rights Certificate representing
     exercisable Rights, with the form of election to purchase duly executed,
     accompanied by payment of the

                                      11
<PAGE>

     Purchase Price for the number of Class A Common Units (or other securities
     or property, as the case may be) to be purchased and an amount equal to any
     applicable transfer tax required to be paid by the holder of such Rights
     Certificate in accordance with Section 9 hereof in cash, or by certified
     check or cashier's check payable to the order of the Partnership, the
     Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
     requisition from any transfer agent of the Class A Common Units (or make
     available, if the Rights Agent is the transfer agent for the Class A Common
     Units) a certificate or certificates for the number of Class A Common Units
     to be purchased and the Partnership hereby irrevocably authorizes its
     transfer agent to comply with all such requests, (ii) when appropriate,
     requisition from the Partnership the amount of cash to be paid in lieu of
     issuance of fractional Class A Common Units in accordance with Section 14
     hereof, (iii) after receipt of such certificates, cause the same to be
     delivered to or upon the order of the registered holder of such Rights
     Certificate, registered in such name or names as may be designated by such
     holder and (iv) when appropriate, after receipt thereof, deliver such cash
     to or upon the order of the registered holder of such Rights Certificate.
     The payment of the Purchase Price (as such amount may be reduced (including
     to zero) pursuant to Section 11(a)(iv) hereof) may be made in cash or by
     certified bank check or bank draft payable to the order of the Partnership.
     In the event that the Partnership is obligated to issue other securities of
     the Partnership, pay cash and/or distribute other property pursuant to
     Section 11(a) hereof, the Partnership will make all arrangements necessary
     so that such other securities, cash and/or other property are available for
     distribution by the Rights Agent, if and when appropriate.

                (d)  In case the registered holder of any Rights Certificate
     shall exercise less than all the Rights evidenced thereby, a new Rights
     Certificate evidencing Rights equivalent to the Rights remaining
     unexercised shall be issued by the Rights Agent to the registered holder of
     such Rights Certificate or to his or her duly authorized assigns, subject
     to the provisions of Section 14 hereof.

                (e)  Notwithstanding anything in this Agreement to the contrary,
     from and after the first occurrence of a Triggering Event, any Rights
     beneficially owned by (i) an Acquiring Person or an Associate or Affiliate
     of an Acquiring Person, (ii) a Post Transferee, (iii) a Prior Transferee or
     (iv) any subsequent transferee receiving transferred Rights from a Post
     Transferee or a Prior Transferee, either directly or through one or more
     intermediate transferees, shall become null and void without any further
     action and no holder of such Rights shall have any rights whatsoever with
     respect to such Rights, whether under any provision of this Agreement or
     otherwise. The Partnership shall use all reasonable efforts to insure that
     the provisions of this Section 7(e) and Section 4(b) hereof are complied
     with, but shall have no liability to any holder of Rights Certificates or
     to any other Person as a result of its failure to make any determinations
     with respect to an Acquiring Person or any of such Acquiring Person's
     Affiliates, Associates or transferees hereunder.

                (f)  Notwithstanding anything in this Agreement to the contrary,
     neither the Rights Agent nor the Partnership shall be obligated to
     undertake any action with respect to a registered holder upon the
     occurrence of any purported exercise as set forth in this Section 7 unless
     such registered holder shall have (i) completed and signed the certificate
     contained in the form of election to purchase set forth on the reverse side
     of the Rights Certificate surrendered for such exercise and (ii) provided
     such additional evidence of the

                                      12
<PAGE>

     identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
     or Associates thereof as the Partnership shall reasonably request.

                SECTION 8.  CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.
     All Rights Certificates surrendered for the purpose of exercise, transfer,
     split up, combination or exchange shall, if surrendered to the Partnership
     or to any of its agents, be delivered to the Rights Agent for cancellation
     or in canceled form, or, if surrendered to the Rights Agent, shall be
     canceled by it, and no Rights Certificates shall be issued in lieu thereof
     except as expressly permitted by any of the provisions of this Agreement.
     The Partnership shall deliver to the Rights Agent for cancellation and
     retirement, and the Rights Agent shall so cancel and retire, any other
     Rights Certificate purchased or acquired by the Partnership otherwise than
     upon the exercise thereof. The Rights Agent shall deliver all canceled
     Rights Certificates to the Partnership, or shall, at the written request of
     the Partnership, destroy such canceled Rights Certificates, and in such
     case shall deliver a certificate of destruction thereof to the Partnership.

                SECTION 9.  RESERVATION AND AVAILABILITY OF CLASS A COMMON
     UNITS.

                (a)  Subject to Article IV of the Partnership Agreement, the
     Partnership covenants and agrees that it will use its best efforts to cause
     to be reserved and kept available out of and to the extent of its
     authorized and unissued Class A Common Units the number of Class A Common
     Units that will be sufficient to permit the exercise in full of all
     outstanding Rights.

                (b)  If the Partnership shall hereafter list any of its Class A
     Common Units on a national securities exchange or quotation system, then so
     long as the Class A Common Units issuable and deliverable upon exercise of
     the Rights may be listed on such exchange or quotation system, the
     Partnership shall use its best efforts to cause, from and after such time
     as the Rights become exercisable (but only to the extent that it is
     reasonably likely that the Rights will be exercised), all Class A Common
     Units reserved for such issuance to be listed on such exchange upon
     official notice of issuance upon such exercise.

                (c)  The Partnership shall use its best efforts to (i) file, as
     soon as practicable following the earliest date after the first occurrence
     of a Triggering Event in which the consideration to be delivered by the
     Partnership upon exercise of the Rights has been determined in accordance
     with Section 11(a)(iv) hereof, or as soon as is required by law following
     the Distribution Date, as the case may be, a registration statement under
     the Securities Act, with respect to the securities purchasable upon
     exercise of the Rights on an appropriate form, (ii) cause such registration
     statement to become effective as soon as practicable after such filing and
     (iii) cause such registration statement to remain effective (with a
     prospectus at all times meeting the requirements of the Securities Act)
     until the earlier of (A) the date as of which the Rights are no longer
     exercisable for such securities and (B) the Final Expiration Date. After
     the date set forth in clause (i) of the first sentence of this Section
     9(c), the Partnership may temporarily suspend, for a period not to exceed
     ninety (90) days, the exercisability of the Rights in order to prepare and
     file such registration statement and permit it to become effective. Upon
     any such suspension, the Partnership shall issue a public announcement
     stating, and notify the Rights Agent, that the exercisability of the Rights
     has been temporarily suspended, as well as a public announcement and
     notification to the Rights Agent at such time as the suspension is no

                                      13
<PAGE>

     longer in effect. The Partnership will also take such action as may be
     appropriate under, or to ensure compliance with, the securities or "blue
     sky" laws of the various states in connection with the exercisability of
     the Rights. Notwithstanding any provision of this Agreement to the
     contrary, the Rights shall not be exercisable in any jurisdiction, unless
     the requisite qualification in such jurisdiction shall have been obtained,
     or an exemption therefrom shall be available, and until a registration
     statement (if requested) has been declared effective.

                (d)  The Partnership covenants and agrees that it will take all
     such action as may be necessary to ensure that all Class A Common Units
     delivered upon exercise of Rights shall, at the time of delivery of the
     certificates for such Class A Common Units (subject to payment of the
     Purchase Price), be duly and validly authorized and issued and fully paid
     and nonassessable Class A Common Units.

                (e)  The Partnership further covenants and agrees that it will
     pay when due and payable any and all federal and state transfer taxes and
     charges which may be payable in respect of the original issuance or
     delivery of the Rights Certificates or of any Class A Common Units upon the
     exercise of Rights. The Partnership shall not, however, be required to pay
     any transfer tax which may be payable in respect of any transfer or
     delivery of Rights Certificates to a person other than, or the issuance or
     delivery of certificates for the Class A Common Units in a name other than
     that of, the registered holder of the Rights Certificate evidencing Rights
     surrendered for exercise or to issue or to deliver any certificates for
     Class A Common Units upon the exercise of any Rights until any such tax
     shall have been paid (any such tax being payable by the holder of such
     Rights Certificate at the time of surrender) or until it has been
     established to the Partnership's reasonable satisfaction that no such tax
     is due.

                SECTION 10. CLASS A COMMON UNITS RECORD DATE. Each person in
     whose name any certificate for a Class A Common Unit is issued upon the
     exercise of Rights shall for all purposes be deemed to have become the
     holder of record of Class A Common Units represented thereby on, and such
     certificate shall be dated, the date upon which the Rights Certificate
     evidencing such Rights was duly surrendered and payment of the Purchase
     Price multiplied by the number of Class A Common Units with respect to
     which the Rights have been exercised (and any applicable transfer taxes)
     was made; provided, however, that if the date of such surrender and payment
     is a date upon which the Class A Common Units transfer books of the
     Partnership are closed, such person shall be deemed to have become the
     record holder of such Class A Common Units on, and such certificate shall
     be dated, the next succeeding Business Day on which the Class A Common
     Units transfer books of the Partnership are open. Prior to the exercise of
     the Rights evidenced thereby, the holder of a Rights Certificate shall not
     be entitled to any rights of a holder of Class A Common Units for which the
     Rights shall be exercisable, including, without limitation, the right to
     vote, to receive distributions or to exercise any preemptive rights, and
     shall not be entitled to receive any notice of any proceedings of the
     Partnership, except as provided herein.

                SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF CLASS A
     COMMON UNITS OR NUMBER OF RIGHTS. The Purchase Price, the number and kind
     of Class A Common Units or other securities or property covered by each
     Right and the number of Rights outstanding are subject to adjustment from
     time to time as provided in this Section 11.

                                      14
<PAGE>

                (a) (i) In the event the Partnership shall at any time after the
     date of this Agreement (A) declare a distribution on the Common Units
     payable in Common Units, (B) subdivide the outstanding Common Units, (C)
     combine the outstanding Common Units (by reverse unit split or otherwise)
     into a smaller number of Common Units, or (D) issue any Partnership
     Securities in a reclassification of the Common Units (including any such
     reclassification in connection with a consolidation or merger in which the
     Partnership is the continuing or surviving entity), then, in each such
     event, except as otherwise provided in this Section 11(a) and Section 7(e)
     hereof: (1) each of the Rights outstanding at the time of the record date
     for such distribution or the effective date of such subdivision,
     combination or reclassification shall be proportionately adjusted to that
     number of Rights (calculated to the nearest one ten-thousandth (1/10,000)
     of a Right) equal to a fraction (the "Exchange Ratio"), the numerator of
     which shall be the total number of Common Units or Partnership Securities
     issued in such distribution, subdivision, combination or reclassification
     of the Common Units outstanding immediately following such time and the
     denominator of which shall be the total number of Common Units outstanding
     immediately prior to such time; (2) the number of Rights that shall
     thereafter be issued with respect to each Unit or other Partnership
     Securities that shall become outstanding thereafter but prior to the
     Distribution Date shall be equal to the total number of outstanding Rights
     immediately after such event (as adjusted pursuant to this clause (1))
     divided by the total number of outstanding Units or such other Partnership
     Securities immediately after such event (subject to further adjustment
     pursuant to the provisions of this Agreement); (3) the Purchase Price in
     effect at the time of the record date for such distribution or of the
     effective date of such subdivision, combination or reclassification shall
     be adjusted so that the Purchase Price thereafter shall equal the result
     obtained by dividing the Purchase Price in effect immediately prior to such
     time by the Exchange Ratio; and (4) the number of Class A Common Units or
     such other Partnership Securities issuable upon the exercise of each Right
     shall remain unchanged immediately after such event, but, in the event of a
     reclassification, the kind of Partnership Securities issuable upon the
     exercise of each Right immediately after such reclassification shall be
     appropriately adjusted. If an event occurs which would require an
     adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof,
     the adjustment provided for in this Section 11(a)(i) shall be in addition
     to, and shall be made prior to, any adjustment required pursuant to Section
     11(a)(ii) hereof. Notwithstanding anything to the contrary contained
     herein, references to "Common Units" in this Agreement shall be deemed to
     be references to "Class A Common Units" following the expiration of the
     Subordination Period.

                (ii) Subject to Sections 9, 23, and 24 of this Agreement, in the
     event a Triggering Event shall have occurred, then from and after the date
     of such Triggering Event, each holder of a Right, except as provided in
     Section 7(e) hereof, shall thereafter have the right to receive for each
     Right, upon exercise thereof in accordance with the terms of this Agreement
     and payment of the then-current Total Exercise Price, the greater of (A)
     such number of Class A Common Units for which such Right was exercisable
     immediately prior to such event or (B) such number of Class A Common Units
     as shall equal the result obtained by multiplying the then-current Purchase
     Price by the then number of Class A Common Units for which a Right was
     exercisable (or would have

                                      15
<PAGE>

     been exercisable if the Distribution Date had occurred) immediately prior
     to the first occurrence of a Triggering Event, and dividing that product by
     50% of the current per unit market price (determined pursuant to Section
     11(d) hereof) for Common Units on the date of occurrence of the Triggering
     Event (such number of Class A Common Units being hereinafter referred to as
     the "Adjustment Units").

               (iii)  The right to buy Class A Common Units pursuant to Section
     11(a)(ii) hereof shall not arise as a result of any Person becoming an
     Acquiring Person through an acquisition of Units pursuant to a Permitted
     Offer.

               (iv) In lieu of issuing Class A Common Units in accordance with
     Section 11(a)(ii) hereof, the Partnership may, if the General Partner
     determines that such action is necessary or appropriate and not contrary to
     the interest of holders of Rights (and, in the event that the number of
     Class A Common Units which are authorized by the Partnership Agreement but
     not outstanding or reserved for issuance for purposes other than upon
     exercise of the Rights are not sufficient to permit the exercise in full of
     the Rights, or if any necessary regulatory approval for such issuance has
     not been obtained by the Partnership, the Partnership shall:  (A) determine
     the excess of (1) the value of the Class A Common Units issuable upon the
     exercise of a Right (the "Current Value") over (2) the then current
     Purchase Price (such excess, the "Spread") and (B) with respect to each
     Right (other than the Rights which have become null and void pursuant to
     Section 7(e)), make adequate provision to substitute for such Class A
     Common Units, upon exercise of the Rights, (1) cash, (2) a reduction in the
     Purchase Price, (3) other equity securities of the Partnership (including,
     without limitation, Partnership Securities which the General Partner has
     deemed to have the same value as Class A Common Units (such Partnership
     Securities are herein called "Unit Equivalents")), except to the extent
     that the Partnership has not obtained any necessary unitholder or
     regulatory approval for such issuance, (4) debt securities of the
     Partnership, except to the extent that the Partnership has not obtained any
     necessary unitholder or regulatory approval for such issuance, (5) other
     assets or (6) any combination of the foregoing, having an aggregate value
     equal to the [Current Value], where such aggregate value has been
     determined by the General Partner based upon the advice of a nationally
     recognized investment banking firm selected by the General Partner;
     provided, however, if the Partnership shall not have made adequate
     provision to deliver value pursuant to clause (B) above within thirty (30)
     days following the later of (x) the first occurrence of a Triggering Event
     and (y) the date on which the Partnership's right of redemption pursuant to
     Section 23(a) expires (the later of (x) and (y) being referred to herein as
     the "Section 11(a)(ii) Trigger Date"), then the Partnership shall be
     obligated to deliver, upon the surrender for exercise of a Right and
     without requiring payment of the Purchase Price, Class A Common Units (to
     the extent available), except to the extent that the Partnership has not
     obtained any necessary Unitholder or regulatory approval for such issuance,
     and then, if necessary, cash, which Class A Common Units and/or cash have
     an aggregate value equal to the Spread. If the General Partner of the
     Partnership shall determine in good faith that it is likely that sufficient
     additional Class A Common Units could be authorized for issuance upon
     exercise in full of the Rights or that any necessary regulatory approval
     for such issuance will be obtained, the thirty (30)-day period set forth
     above may be extended to the extent necessary, but not more than ninety
     (90) days after the Section 11(a)(ii) Trigger Date, in

                                      16
<PAGE>

     order that the Partnership may seek Unitholder approval for the
     authorization of such additional Class A Common Units or take action to
     obtain such regulatory approval (such period, as it may be extended, the
     "Substitution Period"). To the extent that the Partnership determines that
     some action need be taken pursuant to the first and/or second sentences of
     this Section 11(a)(iv), the Partnership (x) shall provide, subject to
     Section 7(e) hereof, that such action shall apply uniformly to all
     outstanding Rights and (y) may suspend the exercisability of the Rights
     until the expiration of the Substitution Period in order to seek any
     authorization of additional units, to take any action to obtain any
     required regulatory approval and/or to decide the appropriate form of
     distribution to be made pursuant to such first sentence and to determine
     the value thereof. In the event of any such suspension, the Partnership
     shall issue a public announcement stating that the exercisability of the
     Rights has been temporarily suspended, as well as a public announcement at
     such time as the suspension is no longer in effect. For purposes of this
     Section 11(a)(iv), the value of the Class A Common Units shall be the
     current per unit market price (as determined pursuant to Section 11(d)
     hereof) of the Common Units on the Section 11(a)(ii) Trigger Date and the
     value of any "Unit Equivalent" shall be deemed to have the same value as
     the Common Units on such date.

                (b)  In case the Partnership shall, at any time after the date
     of this Agreement, fix a record date for the issuance of rights, options or
     warrants to all holders of Common Units or of any class or series of
     Equivalent Units entitling such holders (for a period expiring within
     forty-five (45) calendar days after such record date) to subscribe for or
     purchase Common Units or Equivalent Units or securities convertible into
     Common Units or Equivalent Units at a price per Unit (or having a
     conversion price per unit, if a security convertible into Common Units or
     Equivalent Units) less than the then current per unit market price (as
     defined in Section 11(d) of the Common Units or Equivalent Units on such
     record date, then, in each such case, the Purchase Price to be in effect
     after such record date shall be determined by multiplying the Purchase
     Price in effect immediately prior to such record date by a fraction, the
     numerator of which shall be the number of Common Units and Equivalent Units
     (if any) outstanding on such record date, plus the number of Common Units
     or Equivalent Units, as the case may be, which the aggregate offering price
     of the total number of Common Units or Equivalent Units, as the case may
     be, so to be offered (and/or the aggregate initial conversion price of the
     convertible securities so to be offered) would purchase at such current per
     unit market price, and the denominator of which shall be the number of
     Common Units and Equivalent Units (if any) outstanding on such record date,
     plus the number of additional Common Units or Equivalent Units, as the case
     may be, to be offered for subscription or purchase (or into which the
     convertible securities so to be offered are initially convertible). In case
     such subscription price may be paid in a consideration part or all of which
     shall be in a form other than cash, the value of such consideration shall
     be as determined in good faith by the General Partner, whose determination
     shall be described in a statement filed with the Rights Agent and shall be
     binding on the Rights Agent and the holders of the Rights. Common Units and
     Equivalent Units owned by or held for the account of the Partnership shall
     not be deemed outstanding for the purpose of any such computation. Such
     adjustment shall be made successively whenever such a record date is fixed,
     and in the event that such rights, options or warrants are not so issued,
     the Purchase Price shall be adjusted to be the Purchase Price which would
     then be in effect if such record date had not been fixed.

                                      17
<PAGE>

                (c)  In case the Partnership shall, at any time after the date
     of this Agreement, fix a record date for the making of a distribution to
     all holders of Common Units or of any class or series of Equivalent Units
     (including any such distribution made in connection with a consolidation or
     merger in which the Partnership is the continuing or surviving entity) of
     evidences of indebtedness or assets (other than a regular quarterly cash
     distribution, if any, or a distribution payable in Common Units) or
     subscription rights, options or warrants (excluding those referred to in
     Section 11(b)), then, in each such case, the Purchase Price to be in effect
     after such record date shall be determined by multiplying the Purchase
     Price in effect immediately prior to such record date by a fraction, the
     numerator of which shall be the current per unit market price (as
     determined pursuant to Section 11(d) hereof) of a Common Unit or an
     Equivalent Unit on such record date, less the fair market value (as
     determined in good faith by the General Partner of the Partnership, whose
     determination shall be described in a statement filed with the Rights
     Agent) of the portion of the cash, assets or evidences of indebtedness so
     to be distributed or of such subscription rights or warrants applicable to
     a Common Unit or Equivalent Unit, as the case may be, and the denominator
     of which shall be such current market price (as determined pursuant to
     Section 11(d) hereof) of a Common Unit or Equivalent Unit on such record
     date. Such adjustments shall be made successively whenever such a record
     date is fixed, and in the event that such distribution is not so made, the
     Purchase Price shall be adjusted to be the Purchase Price which would have
     been in effect if such record date had not been fixed.

                (d)  For the purpose of any computation hereunder, other than
     computations made pursuant to Section 11(a)(iv) hereof, the "current per
     unit market price" of any security (a "Security" for the purpose of this
     Section 11(d) on any date shall be deemed to be the average of the daily
     closing prices per unit of such Security for the thirty (30) consecutive
     Trading Days immediately prior to such date, and for purposes of
     computations made pursuant to Section 11(a)(iv) hereof, the "current per
     unit market price" of any Security on any date shall be deemed to be the
     average of the daily closing prices per unit of such Security for the ten
     (10) consecutive Trading Days immediately prior to such date; provided,
     however, that in the event that the current per unit market price of the
     Security is determined during a period following the announcement by the
     issuer of such Security of (i) a distribution on such Security payable in
     units of such Security or securities convertible into such units or (ii)
     any subdivision, combination or reclassification of such Security, and
     prior to the expiration of the requisite thirty (30) Trading Day or ten
     (10) Trading Day period, after the ex-dividend date for such dividend or
     distribution, or the record date for such subdivision, combination or
     reclassification, then, and in each such case, the current per unit market
     price shall be appropriately adjusted to reflect the current market price
     per unit equivalent of such Security. The closing price for each day shall
     be the last sale price, regular way, or, in case no such sale takes place
     on such day, the average of the closing bid and asked prices, regular way,
     in either case as reported in the principal consolidated transaction
     reporting system with respect to securities listed or admitted to trading
     on the New York Stock Exchange or, if the Security is not listed or
     admitted to trading on the New York Stock Exchange, as reported in the
     principal consolidated transaction reporting system with respect to
     securities listed on the principal national securities exchange on which
     the Security is listed or admitted to trading or, if the Security is not
     listed or admitted to trading on any national securities exchange, the last
     sale price or, if such last sale price is not reported, the average of the
     high bid and low asked prices in the over-the-counter market, as reported
     by Nasdaq or such other system then in use, or, if on any such date the
     Security is not quoted by any

                                      18
<PAGE>

     such organization, the average of the closing bid and asked prices as
     furnished by a professional market maker making a market in the Security
     selected by the General Partner. If on any such date no market maker is
     making a market in the Security, the fair value of such Security on such
     date as determined in good faith by the General Partner shall be used. The
     term "Trading Day" shall mean a day on which the principal national
     securities exchange on which the Security is listed or admitted to trading
     is open for the transaction of business or, if the Security is not listed
     or admitted to trading on any national securities exchange, a Business Day.
     If the Security is not publicly held or so listed or traded, "current per
     unit market price" shall mean the fair value per Security as determined in
     good faith by the General Partner, whose determination shall be described
     in a statement filed with the Rights Agent and shall be conclusive for all
     purposes.

                (e)  Anything herein to the contrary notwithstanding, no
     adjustment in the Purchase Price shall be required unless such adjustment
     would require an increase or decrease of at least 1% in the Purchase Price;
     provided, however, that any adjustments which by reason of this Section
     11(e) are not required to be made shall be carried forward and taken into
     account in any subsequent adjustment. All calculations under this Section
     11 shall be made to the nearest cent or to the nearest ten-thousandth of a
     Security. Notwithstanding the first sentence of this Section 11(e), any
     adjustment required by this Section 11 shall be made no later than the
     earlier of (i) three (3) years from the date of the transaction which
     requires such adjustment or (ii) the Expiration Date.

                (f)  If as a result of an adjustment made pursuant to Section
     11(a) or 13(a) hereof, the holder of any Right thereafter exercised shall
     become entitled to receive any Partnership Securities other than Class A
     Common Units, thereafter the number of such other Partnership Securities so
     receivable upon exercise of any Right and if required, the Purchase Price
     thereof, shall be subject to adjustment from time to time in a manner and
     on terms as nearly equivalent as practicable to the provisions with respect
     to the Class A Common Units contained in Sections 11(a), (b), (c), (e),
     (h), (i), (j), (k), (l) and (m), and the provisions of Sections 7, 9, 10,
     13 and 14 with respect to the Class A Common Units shall apply on like
     terms to any such other Partnership Securities.

                (g)  All Rights originally issued by the Partnership subsequent
     to any adjustment made to the Purchase Price hereunder shall evidence the
     right to purchase, at the adjusted Purchase Price, the number of Class A
     Common Units purchasable from time to time hereunder upon exercise of the
     Rights, all subject to further adjustment as provided herein.

                (h)  Unless the Partnership shall have exercised its election as
     provided in Section 11(i), upon each adjustment of the Purchase Price as a
     result of the calculations made in Section 11(b) and 11(c), each Right
     outstanding immediately prior to the making of such adjustment shall
     thereafter evidence the right to purchase, at the adjusted Purchase Price,
     that number of Class A Common Units (calculated to the nearest one ten-
     thousandth of a Class A Common Unit) obtained by (i) multiplying (x) the
     number of Class A Common Units covered by a Right immediately prior to this
     adjustment, by (y) the Purchase Price in effect immediately prior to such
     adjustment of the Purchase Price, and (ii) dividing the product so obtained
     by the Purchase Price in effect immediately after such adjustment of the
     Purchase Price.

                                      19
<PAGE>

                (i)  The Partnership may elect on or after the date of any
     adjustment of the Purchase Price as a result of the calculations made in
     Section 11(b) and 11(c) to adjust the number of Rights, in substitution for
     any adjustment in the number of Class A Common Units purchasable upon the
     exercise of a Right. Each of the Rights outstanding after such adjustment
     of the number of Rights shall be exercisable for the number of Class A
     Common Units for which a Right was exercisable immediately prior to such
     adjustment. Each Right held of record prior to such adjustment of the
     number of Rights shall become that number of Rights (calculated to the
     nearest one ten-thousandth) obtained by dividing the Purchase Price in
     effect immediately prior to adjustment of the Purchase Price by the
     Purchase Price in effect immediately after adjustment of the Purchase
     Price. The Partnership shall make a public announcement of its election to
     adjust the number of Rights, indicating the record date for the adjustment,
     and, if known at the time, the amount of the adjustment to be made. This
     record date may be the date on which the Purchase Price is adjusted or any
     day thereafter, but, if the Rights Certificates have been issued, shall be
     at least ten (10) days later than the date of the public announcement. If
     Rights Certificates have been issued, upon each adjustment of the number of
     Rights pursuant to this Section 11(i), the Partnership shall, as promptly
     as practicable, cause to be distributed to holders of record of Rights
     Certificates on such record date Rights Certificates evidencing, subject to
     Section 14 hereof, the additional Rights to which such holders shall be
     entitled as a result of such adjustment, or, at the option of the
     Partnership, shall cause to be distributed to such holders of record in
     substitution and replacement for the Rights Certificates held by such
     holders prior to the date of adjustment, and upon surrender thereof, if
     required by the Partnership, new Rights Certificates evidencing all the
     Rights to which such holders shall be entitled after such adjustment.
     Rights Certificates so to be distributed shall be issued, executed and
     countersigned in the manner provided for herein (and may bear, at the
     option of the Partnership, the adjusted Purchase Price) and shall be
     registered in the names of the holders of record of Rights Certificates on
     the record date specified in the public announcement.

                (j) Irrespective of any adjustment or change in the Purchase
     Price or the number of Class A Common Units issuable upon the exercise of
     the Rights, the Rights Certificates theretofore and thereafter issued may
     continue to express the Purchase Price per one Common Unit and the number
     of Class A Common Units which were expressed in the initial Rights
     Certificates issued hereunder.

                (k)  In any case in which this Section 11 shall require that an
     adjustment in the Purchase Price be made effective as of a record date for
     a specified event, the Partnership may elect to defer until the occurrence
     of such event the issuing to the holder of any Right exercised after such
     record date of the number of Class A Common Units and other Partnership
     Securities, if any, issuable upon such exercise over and above the number
     of Class A Common Units and other Partnership Securities, if any, issuable
     upon such exercise on the basis of the Purchase Price in effect prior to
     such adjustment; provided, however, that the Partnership shall deliver to
     such holder a due bill or other appropriate instrument evidencing such
     holder's right to receive such additional units (fractional or otherwise)
     upon the occurrence of the event requiring such adjustment.

                (l)  Anything in this Section 11 to the contrary
     notwithstanding, prior to the Distribution Date, the General Partner shall
     be entitled to make such reductions in the Purchase Price, in addition to
     those adjustments expressly required by this Section 11, as and to

                                      20
<PAGE>

     the extent that it in its sole discretion shall determine to be advisable
     in order that any (i) consolidation or subdivision of the Common Units,
     (ii) issuance wholly for cash of any Common Units at less than the current
     market price, (iii) issuance wholly for cash of Common Units or securities
     which by their terms are convertible into or exchangeable for Common Units,
     (iv) distributions or (v) issuance of rights, options or warrants referred
     to in this Section 11, hereafter made by the Partnership to holders of its
     Units shall not be taxable to such Unitholders.

                (m)  The Partnership covenants and agrees that it shall not, at
     any time after the Distribution Date, effect or permit to occur any
     Triggering Event or Section 13 Event, if (i) at the time or immediately
     after such Triggering Event or Section 13 Event there are any rights,
     warrants or other instruments or securities outstanding or agreements in
     effect which would substantially diminish or otherwise eliminate the
     benefits intended to be afforded by the Rights or (ii) prior to,
     simultaneously with or immediately after such Section 13 Event, the
     securityholders of the Person who constitutes, or would constitute, the
     "Principal Party" for purposes of Section 13(b) hereof shall have received
     a distribution of Rights previously owned by such Person or any of its
     Affiliates and Associates.

                (n)  The Partnership covenants and agrees that, after the
     Distribution Date, it will not, except as permitted by Sections 23, 24 or
     27 hereof, take (or permit to be taken) any action if at the time such
     action is taken it is reasonably foreseeable that such action will diminish
     substantially or otherwise eliminate the benefits intended to be afforded
     by the Rights.

           SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
     COMMON UNITS. Whenever an adjustment is made as provided in Sections 11 and
     13 hereof, the Partnership shall promptly (a) prepare a certificate setting
     forth such adjustment and a brief statement of the facts accounting for
     such adjustment, (b) file with the Rights Agent and with each transfer
     agent for the Common Units a copy of such certificate and (c) mail a brief
     summary thereof to each holder of a Rights Certificate in accordance with
     Section 26 hereof. Notwithstanding the foregoing sentence, the failure of
     the Partnership to make such certification or give such notice shall not
     affect the validity of such adjustment or the force or effect of the
     requirement for such adjustment. The Rights Agent shall be fully protected
     in relying on any such certificate and on any adjustment contained therein
     and shall not be deemed to have knowledge of such adjustment unless and
     until it shall have received such certificate.

           SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
     EARNING POWER.

                (a)  In the event that at any time after a Person has become
     Acquiring Person:

                (i)  the Partnership shall consolidate with, or merge with and
     into, any other Person (other than a Subsidiary of the Partnership in a
     transaction the principal purpose of which is to change the state of
     organization of the Partnership or which complies with Section 11(n)
     hereof);

                (ii) any Person (other than a Subsidiary of the Partnership in a
     transaction that complies with Section 11(n) hereof) shall consolidate with
     the
                                      21
<PAGE>

     Partnership, or merge with and into the Partnership and the Partnership
     shall be the continuing or surviving entity of such consolidation or
     merger; or

                (iii)  the Partnership shall sell or otherwise transfer (or one
     or more of its Subsidiaries shall sell or otherwise transfer), in one or
     more transactions, assets or earning power aggregating 50% or more of the
     assets or earning power of the Partnership and its Subsidiaries (taken as a
     whole) to any other Person or Persons (other than the Partnership or one or
     more of its wholly owned Subsidiaries in one or more transactions, each of
     which complies with Section 11(n) hereof), then, and in each such case,
     proper provision shall be made so that

                       (A) each holder of a Right (except as otherwise provided
     herein) shall thereafter have the right to receive, upon the exercise
     thereof in accordance with the terms of this Agreement, such number of
     validly authorized and issued, fully paid and nonassessable common units or
     equivalent securities of the Principal Party (as hereinafter defined), free
     of any liens, encumbrances, rights of first refusal or other adverse
     claims, as shall be equal to the result obtained by (1) multiplying the
     then current Purchase Price by the number of Class A Common Units for which
     a Right was exercisable immediately prior to the first occurrence of a
     Section 13 Event (or, if a Triggering Event has occurred prior to the first
     occurrence of a Section 13 Event, multiplying the number of Class A Common
     Units for which a Right was exercisable immediately prior to the first
     occurrence of a Triggering Event by the Purchase Price in effect
     immediately prior to such first occurrence of a Triggering Event) and (2)
     dividing that product (which, following the first occurrence of a Section
     13 Event, shall be referred to as the "Total Exercise Price" for each Right
     and for all purposes of this Agreement) by 50% of the current per unit or
     per share market price (determined pursuant to Section 11(d) hereof) of the
     common units or equivalent securities of such Principal Party on the date
     of consummation of such Section 13 Event;

                       (B)  such Principal Party shall thereafter be liable for,
     and shall assume, by virtue of such Section 13 Event, all the obligations
     and duties of the Partnership pursuant to this Agreement;

                       (C)  the term "Partnership" shall thereafter be deemed to
     refer to such Principal Party, it being specifically intended that the
     provisions of Section 11 hereof shall apply only to such Principal Party
     following the first occurrence of a Section 13 Event;

                       (D)  such Principal Party shall take such steps
     (including, but not limited to, the reservation of a sufficient number of
     its common units or equivalent securities) in connection with the
     consummation of any such transaction as may be necessary to assure that the
     provisions hereof shall thereafter be applicable, as nearly as reasonably
     may be, in relation to its common units or equivalent securities thereafter
     deliverable upon the exercise of the Rights.

                   (b)  "Principal Party" shall mean, in the case of any
     transaction described in clause (i), (ii) or (iii) of Section 13(a), the
     Person referred to therein (or

                                      22
<PAGE>

     such Person's or Acquiring Person's successor, including, if applicable,
     the Partnership, if it is the surviving entity), provided, however, that in
     any such case, (i) if such Person is a direct or indirect Subsidiary of
     another Person, "Principal Party" shall refer to such other Person and (ii)
     in case such Person is a Subsidiary, directly or indirectly, of more than
     one Person, "Principal Party" shall refer to whichever of such Persons is
     the issuer of the common units or equivalent securities having the greatest
     aggregate value, and provided, further, that for purposes of transactions
     described in clause (iii) hereof, "Principal Party" shall refer to that
     Person receiving the greatest portion of the assets or earning power
     transferred pursuant to such transaction or transactions.

                        (c)  If, for any reason, the Rights cannot be exercised
     for common units or equivalent securities of such Principal Party as
     provided in Section 13(a), or, if within 60 days following the completion
     of any such transaction such common units or equivalent securities have not
     been issued, then each holder of Rights shall have the right to exchange
     its Rights for cash from such Principal Party in an amount equal to the
     number of common units or equivalent securities that it would otherwise be
     entitled to purchase times 50% of the current per share market price, as
     determined pursuant to Section 11(d) hereof, of such common units or
     equivalent securities of such Principal Party. If, for any reason, the
     foregoing formulation cannot be applied to determine the cash amount into
     which the Rights are exchangeable, then the General Partner, based upon the
     advice of one or more nationally recognized investment banking firms, and
     based upon the total value of the Partnership, shall determine such amount
     reasonably and with good faith to the holders of Rights. Any such
     determination shall be final and binding on the Rights Agent.

                        (d)  Notwithstanding anything in this Agreement to the
     contrary, Section 13 shall not be applicable to a transaction described in
     clauses (i) and (ii) of Section 13(a) if: (i) such transaction is
     consummated with a Person or Persons who acquired Units pursuant to a
     Permitted Offer (or a wholly-owned Subsidiary of any such Person or
     Persons); (ii) the price per Unit offered in such transaction is not less
     than the price per unit of Unit paid to all holders of Units whose Units
     were purchased pursuant to such Permitted Offer; and (iii) the form of
     consideration being offered to the remaining holders of Units pursuant to
     such transaction is the same form as the form of consideration paid
     pursuant to such Permitted Offer. Upon consummation of any such transaction
     contemplated by this Section 13(d), all Rights hereunder shall expire.

                        (e)  The Partnership shall not consummate any Section 13
     Event unless the Principal Party shall have a sufficient number of
     authorized common units or equivalent securities that have not been issued
     or reserved for issuance to permit the exercise in full of the Rights in
     accordance with this Section 13 and unless prior thereto the Partnership
     and such issuer shall have executed and delivered to the Rights Agent a
     supplemental agreement confirming that such Principal Party shall, upon
     consummation of such Section 13 Event, assume this Agreement in accordance
     with Sections 13(a) and (b) hereof, that all rights of first refusal or
     preemptive rights in respect of the issuance of common units or equivalent
     securities of such Principal Party upon exercise of outstanding Rights have
     been waived, that there are no rights, warrants, instruments or securities
     outstanding or any agreements or arrangements which, as a result of the
     consummation of such transaction, would eliminate or substantially diminish
     the benefits intended to be afforded by the Rights and that such
     transaction shall not result in a default by

                                      23
<PAGE>

     such Principal Party under this Agreement, and further providing that, as
     soon as practicable after the date of such Section 13 Event, such Principal
     Party will:

                     (i)  prepare and file a registration statement under the
     Securities Act with respect to the Rights and the securities purchasable
     upon exercise of the Rights on an appropriate form, use its best efforts to
     cause such registration statement to become effective as soon as
     practicable after such filing and use its best efforts to cause such
     registration statement to remain effective (with a prospectus at all times
     meeting the requirements of the Securities Act) until the Expiration Date,
     and similarly comply with applicable state securities laws;

                     (ii) use its best efforts to list (or continue the listing
     of) the Rights and the securities purchasable upon exercise of the Rights
     on a national securities exchange or to meet the eligibility requirements
     for quotation on Nasdaq; and

                     (iii)  deliver to holders of the Rights historical
     financial statements for such Principal Party which comply in all respects
     with the requirements for registration on Form 10 (or any successor form)
     under the Exchange Act.

          In the event that at any time after the occurrence of a Triggering
     Event some or all of the Rights shall not have been exercised at the time
     of a transaction described in this Section 13, the Rights which have not
     theretofore been exercised shall thereafter be exercisable in the manner
     described in Section 13(a) (without taking into account any prior
     adjustment required by Section 11(a)(ii)).

                     (f)  The provisions of this Section 13 shall similarly
     apply to successive mergers or consolidations or sales or other transfers.

     SECTION 14.  FRACTIONAL RIGHTS AND FRACTIONAL COMMON UNITS.

                     (a)  The Partnership shall not be required to issue
     fractions of Rights or to distribute Rights Certificates which evidence
     fractional Rights. In lieu of such fractional Rights, there shall be paid
     to the registered holders of the Rights Certificates with regard to which
     such fractional Rights would otherwise be issuable, an amount in cash equal
     to the same fraction of the current market value of a whole Right. For the
     purposes of this Section 14(a), the current market value of a whole Right
     shall be the closing price of the Rights for the Trading Day immediately
     prior to the date on which such fractional Rights would have been otherwise
     issuable, as determined pursuant to the second sentence of Section 11(d)
     hereof.

                     (b)  The Partnership shall not be required to issue
     fractions of Class A Common Units upon exercise of the Rights or to
     distribute certificates which evidence fractional Class A Common Units. In
     lieu of fractional Class A Common Units, the Partnership shall pay to the
     registered holders of Rights Certificates at the time such Rights are
     exercised as herein provided an amount in cash equal to the same fraction
     of the current market value of a Class A Common Unit. For purposes of this
     Section 14(b), the current market value of a Class A Common Unit shall be
     the closing price of a Class A Common Unit (as determined pursuant to

                                      24
<PAGE>

     the second sentence of Section 11(d) hereof) for the Trading Day
     immediately prior to the date of such exercise.

                (c)  The holder of a Right by the acceptance of the Right
     expressly waives his or her right to receive any fractional Rights or any
     fractional Class A Common Units upon exercise of a Right.

        SECTION 15.  RIGHTS OF ACTION.  All rights of action in respect of this
     Agreement, excepting the rights of action given to the Rights Agent under
     Section 18 hereof, are vested in the respective registered holders of the
     Rights Certificates (and, prior to the Distribution Date, the registered
     holders of the Units); and any registered holder of any Rights Certificate
     (or, prior to the Distribution Date, of the Units), without the consent of
     the Rights Agent or of the holder of any other Rights Certificate (or,
     prior to the Distribution Date, of the Units), may, in his or her own
     behalf and for his or her own benefit, enforce, and may institute and
     maintain any suit, action or proceeding against the Partnership to enforce,
     or otherwise act in respect of, his or her right to exercise the Rights
     evidenced by such Rights Certificate in the manner provided in such Rights
     Certificate and in this Agreement. Without limiting the foregoing or any
     remedies available to the holders of Rights, it is specifically
     acknowledged that the holders of Rights would not have an adequate remedy
     at law for any breach of this Agreement and will be entitled to specific
     performance of the obligations under, and injunctive relief against actual
     or threatened violations of, the obligations of any Person subject to this
     Agreement.

          SECTION 16.  AGREEMENT OF RIGHTS HOLDERS.  Every holder of a Right, by
     accepting the same, consents and agrees with the Partnership and the Rights
     Agent and with every other holder of a Right that:

                (a)  prior to the Distribution Date, the Rights will be
     transferable only in connection with the transfer of the Units;

                (b)  after the Distribution Date, the Rights Certificates are
     transferable only on the registry books of the Rights Agent if surrendered
     at the principal office or offices of the Rights Agent designated for such
     purposes, duly endorsed or accompanied by a proper instrument of transfer
     and with the appropriate forms and certificates fully executed; and

                (c)  the Partnership and the Rights Agent may deem and treat the
     person in whose name the Rights Certificate (or, prior to the Distribution
     Date, the associated Units certificate) is registered as the absolute owner
     thereof and of the Rights evidenced thereby (notwithstanding any notations
     of ownership or writing on the Rights Certificates or the associated Units
     certificate made by anyone other than the Partnership or the Rights Agent)
     for all purposes whatsoever, and neither the Partnership nor the Rights
     Agent shall be affected by any notice to the contrary.

               SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A UNITHOLDER. No
     holder, as such, of any Rights Certificate shall be entitled to vote,
     receive distributions or be deemed for any purpose the holder of the Class
     A Common Units or any other Partnership Securities which may at any time be
     issuable on the exercise of the Rights

                                      25
<PAGE>

     represented thereby, nor shall anything contained herein or in any Rights
     Certificate be construed to confer upon the holder of any Rights
     Certificate, as such, any of the rights of a unitholder of the Partnership
     or any right to vote upon any matter submitted to unitholders at any
     meeting thereof, or to give or withhold consent to any action, or to
     receive notice of meetings or other actions affecting unitholders (except
     as provided in Section 25 hereof), or to receive distributions or
     subscription rights, or otherwise, until the Right or Rights evidenced by
     such Rights Certificate shall have been exercised in accordance with the
     provisions hereof.

                SECTION 18.  CONCERNING THE RIGHTS AGENT.

                    (a) The Partnership agrees to pay to the Rights Agent
     reasonable compensation for all services rendered by it hereunder and, from
     time to time, on demand of the Rights Agent, its reasonable expenses and
     counsel fees and other disbursements incurred in the administration and
     execution of this Agreement and the exercise and performance of its duties
     hereunder. The Partnership also agrees to indemnify the Rights Agent for,
     and to hold it harmless against, any loss, liability or expense, incurred
     without negligence, bad faith or willful misconduct on the part of the
     Rights Agent, for anything done or omitted by the Rights Agent in
     connection with the acceptance and administration of this Agreement,
     including the costs and expenses of defending against any claim of
     liability in the premises. Anything in this Agreement to the contrary
     notwithstanding, in no event shall the Rights Agent be liable for special,
     indirect or consequential loss or damage of any kind whatsoever (including
     but not limited to lost profits), even if the Rights Agent has been advised
     of the likelihood of such loss or damage and regardless of the form of the
     action.

                    (b) The Rights Agent shall be protected and shall incur no
     liability for, or in respect of any action taken, suffered or omitted by it
     in connection with, its administration of this Agreement in reliance upon
     any Rights Certificate or certificate for the Class A Common Units or for
     other Partnership Securities, instrument of assignment or transfer, power
     of attorney, endorsement, affidavit, letter, notice, direction, consent,
     certificate, statement or other paper or document believed by it to be
     genuine and to be signed, executed and, where necessary, verified or
     acknowledged, by the proper Person or Persons, or otherwise upon the advice
     of counsel as set forth in Section 20 hereof.

                SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
     AGENT.

                    (a) Any corporation into which the Rights Agent or any
     successor Rights Agent may be merged or with which it may be consolidated,
     or any corporation resulting from any merger or consolidation to which the
     Rights Agent or any successor Rights Agent shall be a party, or any
     corporation succeeding to the corporate trust business of the Rights Agent
     or any successor Rights Agent, shall be the successor to the Rights Agent
     under this Agreement without the execution or filing of any paper or any
     further act on the part of any of the parties hereto; provided, however,
     that such corporation would be eligible for appointment as a successor
     Rights Agent under the provisions of Section 21 hereof. In case at the time
     such successor Rights Agent shall succeed to the agency created by this
     Agreement, any of the Rights Certificates shall have been countersigned but
     not delivered, any such successor Rights Agent may adopt the
     countersignature of the predecessor Rights Agent and deliver such Rights

                                      26
<PAGE>

     Certificates so countersigned; and in case at that time any of the Rights
     Certificates shall not have been countersigned, any successor Rights Agent
     may countersign such Rights Certificates either in the name of the
     predecessor Rights Agent or in the name of the successor Rights Agent; and
     in all such cases such Rights Certificates shall have the full force
     provided in the Rights Certificates and in this Agreement.

                        (b)  In case at any time the name of the Rights Agent
     shall be changed and at such time any of the Rights Certificates shall have
     been countersigned but not delivered, the Rights Agent may adopt the
     countersignature under its prior name and deliver Rights Certificates so
     countersigned; and in case at that time any of the Rights Certificates
     shall not have been countersigned, the Rights Agent may countersign such
     Rights Certificates either in its prior name or in its changed name; and in
     all such cases such Rights Certificates shall have the full force provided
     in the Rights Certificates and in this Agreement.

                SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
     the duties and obligations imposed by this Agreement upon the following
     terms and conditions, by all of which the Partnership and the holders of
     Rights Certificates, by their acceptance thereof, shall be bound:

                (a)  The Rights Agent may consult with legal counsel (who may be
     legal counsel for the Partnership), and the opinion of such counsel shall
     be full and complete authorization and protection to the Rights Agent as to
     any action taken or omitted by it in good faith and in accordance with such
     opinion.

                (b)  Whenever in the performance of its duties under this
     Agreement the Rights Agent shall deem it necessary or desirable that any
     fact or matter (including, without limitation, the identity of any
     Acquiring Person and the determination of "current per unit market price")
     be proved or established by the Partnership prior to taking or suffering
     any action hereunder, such fact or matter (unless other evidence in respect
     thereof be herein specifically prescribed) may be deemed to be conclusively
     proved and established by a certificate signed by any one of the Chairman
     of the Board, the Chief Executive Officer, the President, any Vice
     President, the Chief Financial Officer, the Secretary or any Assistant
     Secretary of the Partnership and delivered to the Rights Agent; and such
     certificate shall be full authorization to the Rights Agent for any action
     taken or suffered in good faith by it under the provisions of this
     Agreement in reliance upon such certificate .

                (c)  The Rights Agent shall be liable hereunder to the
     Partnership and any other Person only for its own negligence, bad faith or
     willful misconduct.

                (d)  The Rights Agent shall not be liable for or by reason of
     any of the statements of fact or recitals contained in this Agreement or in
     the Rights Certificates (except its countersignature thereof) or be
     required to verify the same, but all such statements and recitals are and
     shall be deemed to have been made by the Partnership only.

                (e)  The Rights Agent shall not be under any responsibility in
     respect of the validity of this Agreement or the execution and delivery
     hereof (except the due execution hereof by the Rights Agent) or in respect
     of the validity or execution of any Rights Certificate

                                      27
<PAGE>

     (except its countersignature thereof); nor shall it be responsible for any
     breach by the Partnership of any covenant or condition contained in this
     Agreement or in any Rights Certificate; nor shall it be responsible for any
     change in the exercisability of the Rights or any adjustment in the terms
     of the Rights (including the manner, method or amount thereof) provided for
     in Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of
     facts that would require any such change or adjustment (except with respect
     to the exercise of Rights evidenced by Rights Certificates after receipt by
     the Rights Agent of a certificate furnished pursuant to Section 12
     describing such change or adjustment); nor shall it by any act hereunder be
     deemed to make any representation or warranty as to the authorization or
     reservation of any Class A Common Units to be issued pursuant to this
     Agreement or any Rights Certificate or as to whether any Class A Common
     Units will, when issued, be validly authorized and issued, fully paid and
     nonassessable.

                (f)  The Partnership agrees that it will perform, execute,
     acknowledge and deliver or cause to be performed, executed, acknowledged
     and delivered all such further and other acts, instruments and assurances
     as may reasonably be required by the Rights Agent for the carrying out or
     performing by the Rights Agent of the provisions of this Agreement.

                (g)  The Rights Agent is hereby authorized and directed to
     accept instructions with respect to the performance of its duties hereunder
     from any one of the Chairman of the Board, the Chief Executive Officer, the
     President, any Vice President, the Chief Financial Officer, the Secretary
     or any Assistant Secretary of the General Partner, and to apply to such
     officers for advice or instructions in connection with its duties, and it
     shall not be liable for any action taken or suffered by it in good faith in
     accordance with instructions of any such officer or for any delay in acting
     while waiting for those instructions. Any application by the Rights Agent
     for written instructions from the Partnership may, at the option of the
     Rights Agent, set forth in writing any action proposed to be taken or
     omitted by the Rights Agent under this Rights Agreement and the date on
     and/or after which such action shall be taken or such omission shall be
     effective. The Rights Agent shall not be liable for any action taken by, or
     omission of, the Rights Agent in accordance with a proposal included in any
     such application on or after the date specified in such application (which
     date shall not be less than five (5) Business Days after the date any
     officer of the Partnership actually receives such application, unless any
     such officer shall have consented in writing to an earlier date) unless,
     prior to taking any such action (or the effective date in the case of an
     omission), the Rights Agent shall have received written instructions in
     response to such application specifying the action to be taken or omitted.

                (h)  The Rights Agent and any unitholder, director, officer or
     employee of the Rights Agent may buy, sell or deal in any of the Rights or
     other securities of the Partnership or become pecuniarily interested in any
     transaction in which the Partnership may be interested, or contract with or
     lend money to the Partnership or otherwise act as fully and freely as
     though it were not Rights Agent under this Agreement. Nothing herein shall
     preclude the Rights Agent from acting in any other capacity for the
     Partnership or for any other legal entity.

                (i)  The Rights Agent may execute and exercise any of the rights
     or powers hereby vested in it or perform any duty hereunder either itself
     or by or through its attorneys or agents, and the Rights Agent shall not be
     answerable or accountable for any act, default, neglect or misconduct of
     any such attorneys or agents or for any loss to the Partnership

                                      28
<PAGE>

     resulting from any such act, default, neglect or misconduct, provided
     reasonable care was exercised in the selection and continued employment
     thereof.

                (j)  No provision of this Agreement shall require the Rights
     Agent to expend or risk its own funds or otherwise incur any financial
     liability in the performance of any of its duties hereunder or in the
     exercise of its rights if there shall be reasonable grounds for believing
     that repayment of such funds or adequate indemnification against such risk
     or liability is not reasonably assured to it.

                (k)  If, with respect to any Rights Certificate surrendered to
     the Rights Agent for exercise or transfer, the certificate attached to the
     form of assignment or form of election to purchase, as the case may be, has
     either not been completed or indicates an affirmative response to clause 1
     and/or 2 thereof, the Rights Agent shall not take any further action with
     respect to such requested exercise or transfer without first consulting
     with the Partnership.

                SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
     successor Rights Agent may resign and be discharged from its duties under
     this Agreement upon thirty (30) days' notice in writing mailed to the
     Partnership and to each transfer agent of the Units by registered or
     certified mail, and to the holders of the Rights Certificates by first-
     class mail. The Partnership may remove the Rights Agent or any successor
     Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
     Agent or successor Rights Agent, as the case may be, and to each transfer
     agent of the Units by registered or certified mail, and to the holders of
     the Rights Certificates by first-class mail. If the Rights Agent shall
     resign or be removed or shall otherwise become incapable of acting, the
     Partnership shall appoint a successor to the Rights Agent. If the
     Partnership shall fail to make such appointment within a period of thirty
     (30) days after giving notice of such removal or after it has been notified
     in writing of such resignation or incapacity by the resigning or
     incapacitated Rights Agent or by the holder of a Rights Certificate (who
     shall, with such notice, submit his or her Rights Certificate for
     inspection by the Partnership), then the registered holder of any Rights
     Certificate may apply to any court of competent jurisdiction for the
     appointment of a new Rights Agent. Any successor Rights Agent, whether
     appointed by the Partnership or by such a court, shall be a corporation
     organized and doing business under the laws of the United States or of any
     state of the United States, in good standing, which is authorized under
     such laws to exercise corporate trust or unitholder services powers and is
     subject to supervision or examination by federal or state authority and
     which has at the time of its appointment as Rights Agent a combined capital
     and surplus of at least $50 million. After appointment, the successor
     Rights Agent shall be vested with the same powers, rights, duties and
     responsibilities as if it had been originally named as Rights Agent without
     further act or deed; but the predecessor Rights Agent shall deliver and
     transfer to the successor Rights Agent any property at the time held by it
     hereunder, and execute and deliver any further assurance, conveyance, act
     or deed necessary for the purpose. Not later than the effective date of any
     such appointment, the Partnership shall file notice thereof in writing with
     the predecessor Rights Agent and each transfer agent of the Units, and mail
     a notice thereof in writing to the registered holders of the Rights
     Certificates. Failure to give any notice provided for in this Section 21,
     however, or any defect therein, shall not affect the legality or validity
     of the resignation or removal of the Rights Agent or the appointment of the
     successor Rights Agent, as the case may be.

                                      29
<PAGE>

                SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding
     any of the provisions of this Agreement or of the Rights to the contrary,
     the Partnership may, at its option, issue new Rights Certificates
     evidencing Rights in such form as may be approved by its General Partner to
     reflect any adjustment or change in the Purchase Price and the number or
     kind or class of Units or other securities or property purchasable under
     the Rights Certificates made in accordance with the provisions of this
     Agreement. In addition, in connection with the issuance or sale of Units
     following the Distribution Date and prior to the earlier of the Redemption
     Date and the Final Expiration Date, the Partnership (a) shall, with respect
     to Units so issued or sold pursuant to the exercise, conversion or exchange
     of securities hereinafter issued by the Partnership and (b) may, in any
     other case, if deemed necessary or appropriate by the General Partner,
     issue Rights Certificates representing the appropriate number of Rights in
     connection with such issuance or sale; provided, however, that (i) no such
     Rights Certificate shall be issued and this sentence shall be null and void
     ab initio if, and to the extent that, such issuance or this sentence would
     create a significant risk of or result in material adverse tax consequences
     to the Partnership or the Person to whom such Rights Certificate would be
     issued and (ii) no such Rights Certificate shall be issued if, and to the
     extent that, appropriate adjustment shall otherwise have been made in lieu
     of the issuance thereof.

                SECTION 23.  REDEMPTION.

                (a)  The Partnership may, at its option and with the approval of
     the General Partner, at any time prior to the Close of Business on the
     earlier of (i) the tenth calendar day following the Unit Acquisition Date
     or such later date as may be determined by action of the General Partner
     and publicly announced by the Partnership but not later than the
     Distribution Date or (ii) the Final Expiration Date, redeem all but not
     less than all the then outstanding Rights at a redemption price of $0.01
     per Right, appropriately adjusted to reflect any unit split, unit
     distribution or similar transaction occurring after the date hereof (such
     redemption price being herein referred to as the "Redemption Price") and
     the Partnership may, at its option, pay the Redemption Price either in
     Common Units (based on the current per unit market price thereof (as
     determined pursuant to Section 11(d) hereof) at the time of redemption) or
     cash. Such redemption of the Rights by the Partnership may be made
     effective at such time, on such basis and with such conditions as the
     General Partner in its sole discretion may establish.

                (b)  Immediately upon the action of the General Partner ordering
     the redemption of the Rights pursuant to paragraph (a) of this Section 23,
     evidence of which shall have been filed with the Rights Agent, and without
     any further action and without any notice, the right to exercise the Rights
     will terminate and the only right thereafter of the holders of Rights shall
     be to receive the Redemption Price. The Partnership shall promptly give
     public notice of any such redemption; provided, however, that the failure
     to give, or any defect in, any such notice shall not effect the validity of
     such redemption. Within ten (10) days after the action of the General
     Partner ordering the redemption of the Rights, the Partnership shall give
     notice of such redemption to the Rights Agent and the holders of the then
     outstanding Rights by mailing such notice to all such holders at their last
     addresses as they appear upon the registry books of the Rights Agent or,
     prior to the Distribution Date, on the registry books of the transfer agent
     for the Units. Any notice which is mailed in the manner herein provided
     shall be deemed given, whether or not the holder receives the notice. Each
     such notice of redemption will state the method by which the payment of the
     Redemption Price will be made. Neither the Partnership nor any of its

                                      30
<PAGE>

     Affiliates or Associates may redeem, acquire or purchase for value any
     Rights at any time in any manner other than that specifically set forth in
     this Section 23 or in Section 24 hereof, and other than in connection with
     the purchase of Units prior to the Distribution Date.

                SECTION 24.  EXCHANGE.

                    (a)  Subject to applicable laws, rules and regulations, and
     subject to subsection (c) below, the General Partner may, at its option, at
     any time after the Distribution Date but prior to the occurrence of a
     Triggering Event, authorize the exchange of all or part of the then
     outstanding and exercisable Rights (which shall not include Rights that
     have become void pursuant to the provisions of Section 7(e) hereof) for
     Class A Common Units at an exchange ratio of one Class A Common Unit per
     Right, appropriately adjusted to reflect any unit split, unit distribution
     or similar transaction occurring after the date hereof (such exchange ratio
     being hereinafter referred to as the "Ratio of Exchange"). The exchange
     shall become effective on the date (the "Exchange Date") of a Triggering
     Event. [Notwithstanding the foregoing, the General Partner shall not be
     empowered to effect such exchange at any time after any Person (other than
     the Partnership, any Subsidiary of the Partnership, any employee benefit
     plan of the Partnership or any such Subsidiary, or any entity holding Units
     for or pursuant to the terms of any such plan), together with all
     Affiliates and Associates of such Person, becomes the Beneficial Owner of
     50% or more of the Units then outstanding].

                    (b) Immediately upon the action of the General Partner
     ordering the exchange of any Rights pursuant to subsection (a) of this
     Section 24 and without any further action and without any notice, the right
     to exercise such Rights shall terminate and the only right thereafter of a
     holder of such Rights shall be to receive that number of Class A Common
     Units equal to the number of such Rights held by such holder multiplied by
     the Ratio of Exchange. The Partnership shall give public notice of any such
     exchange; provided, however, that the failure to give, or any defect in,
     such notice shall not affect the validity of such exchange. The Partnership
     shall mail a notice of any such exchange to all of the holders of such
     Rights at their last addresses as they appear upon the registry books of
     the Rights Agent. Any notice which is mailed in the manner herein provided
     shall be deemed given, whether or not the holder receives the notice. Each
     such notice of exchange will state the method by which the exchange of the
     Class A Common Units for Rights will be effected and, in the event of any
     partial exchange, the number of Rights which will be exchanged. Any partial
     exchange shall be effected pro rata based on the number of Rights (other
     than Rights which have become void pursuant to the provisions of Section
     7(e) hereof) held by each holder of Rights.

                    (c)  In the event that there shall not be sufficient Class A
     Common Units issued but not outstanding or authorized but unissued on the
     Exchange Date to permit any exchange of Rights as contemplated in
     accordance with Section 24(a), the Partnership shall either take such
     action as may be necessary to authorize additional Class A Common Units for
     issuance upon exchange of the Rights or alternatively, at the option of the
     General Partner, with respect to each Right (i) pay cash in an amount equal
     to the Current Value (as hereinafter defined), in lieu of issuing Class A
     Common Units in exchange therefor, or (ii) issue debt or equity securities
     or a combination thereof, having a value equal to the Current Value, in
     lieu of issuing Class A Common Units in exchange for each such Right, where
     the value of such securities shall be determined by a nationally recognized
     investment banking firm selected by the

                                      31
<PAGE>

     General Partner, or (iii) deliver any combination of cash, property, Class
     A Common Units and/or other securities having a value equal to the Current
     Value in exchange for each Right. For purposes of this Section 24(c) only,
     the Current Value shall mean the product of the current per Unit market
     price of Common Units (determined pursuant to Section 11(d) on the date of
     the occurrence of the event described above in subparagraph (a)) multiplied
     by the number of Class A Common Units for which the Right otherwise would
     be exchangeable if there were sufficient units available. To the extent
     that the Partnership determines that some action need be taken pursuant to
     clauses (i), (ii) or (iii) of this Section 24(c), the General Partner may
     temporarily suspend the exercisability of the Rights for a period of up to
     sixty (60) days following the date on which the event described in Section
     24(a) shall have occurred, in order to seek any authorization of additional
     Class A Common Units and/or to decide the appropriate form of distribution
     to be made pursuant to the above provision and to determine the value
     thereof. In the event of any such suspension, the Partnership shall issue a
     public announcement stating that the exercisability of the Rights has been
     temporarily suspended.

                (d) The Partnership shall not be required to issue fractions of
     Class A Common Units or to distribute certificates which evidence
     fractional Class A Common Units. In lieu of such fractional Class A Common
     Units, there shall be paid to the registered holders of the Rights
     Certificates with regard to which such fractional Class A Common Units
     would otherwise be issuable, an amount in cash equal to the same fraction
     of the current per unit market value of a whole Common Unit (as determined
     pursuant to the second sentence of Section 11(d) hereof).

                (e)  The General Partner may, at its option, at any time before
     any Person has become an Acquiring Person, exchange all or part of the then
     outstanding Rights for rights of substantially equivalent value, as
     determined reasonably and with good faith by the General Partner, based
     upon the advice of one or more nationally recognized investment banking
     firms.

                (f)  Immediately upon the action of the General Partner ordering
     the exchange of any Rights pursuant to subsection (e) of this Section 24
     and without any further action and without any notice, the right to
     exercise such Rights shall terminate and the only right thereafter of a
     holder of such Rights shall be to receive that number of rights in exchange
     therefor as has been determined by the General Partner in accordance with
     subsection (e) above. The Partnership shall give public notice of any such
     exchange; provided, however, that the failure to give, or any defect in,
     such notice shall not affect the validity of such exchange. The Partnership
     shall mail a notice of any such exchange to all of the holders of such
     Rights at their last addresses as they appear upon the registry books of
     the transfer agent for the Units of the Partnership. Any notice which is
     mailed in the manner herein provided shall be deemed given, whether or not
     the holder receives the notice. Each such notice of exchange will state the
     method by which the exchange of the Rights will be effected.

            SECTION 25.  NOTICE OF CERTAIN EVENTS.

                (a)  In case the Partnership shall propose to effect or permit
     to occur any of the transactions referred to in Section 11(a)(i) or a
     Section 13 Event, the Partnership shall give notice thereof to each holder
     of Rights in accordance with Section 26 hereof at least twenty (20) days
     prior to occurrence of such Triggering Event or such Section 13 Event.

                                      32
<PAGE>

                (b)  In case any Triggering Event or Section 13 Event shall
     occur, then, in any such case, the Partnership shall as soon as practicable
     thereafter give to each holder of a Rights Certificate, in accordance with
     Section 26 hereof, a notice of the occurrence of such event, which shall
     specify the event and the consequences of the event to holders of Rights
     under Sections 11(a)(ii) and 13 hereof.

               SECTION 26. NOTICES. Notices or demands authorized by this
     Agreement to be given or made by the Rights Agent or by the holder of any
     Rights Certificate to or on the Partnership shall be sufficiently given or
     made if sent by first-class mail, postage prepaid, addressed (until another
     address is filed in writing with the Rights Agent) as follows:

               STAR GAS PARTNERS, L.P.
               2187 Atlantic Street
               Stamford, CT  06902
               Attn:  Richard F. Ambury, Vice President - Finance

               Subject to the provisions of Section 21 hereof, any notice or
    demand authorized by this Agreement to be given or made by the Partnership
    or by the holder of any Rights Certificate to or on the Rights Agent shall
    be sufficiently given or made if sent by first-class mail, postage prepaid,
    addressed (until another address is filed in writing with the Partnership)
    as follows:

               AMERICAN STOCK TRANSFER & TRUST COMPANY
               59 Maiden Lane
               New York, New York 10038
               Attn:  Reorganization Department

               Notices or demands authorized by this Agreement to be given or
     made by the Partnership or the Rights Agent to the holder of any Rights
     Certificate shall be sufficiently given or made if sent by first-class
     mail, postage prepaid, addressed to such holder at the address of such
     holder as shown on the registry books of the Partnership.

               SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
     Date, the Partnership may supplement or amend this Agreement in any respect
     without the approval of any holders of Rights and the Rights Agent shall,
     if the Partnership so directs, execute such supplement or amendment. From
     and after the Distribution Date, the Partnership and the Rights Agent may
     from time to time supplement or amend this Agreement without the approval
     of any holders of Rights in order to (i) cure any ambiguity, (ii) correct
     or supplement any provision contained herein which may be defective or
     inconsistent with any other provisions herein, (iii) shorten or lengthen
     any time period hereunder (which lengthening or shortening, shall be
     effective only if it is effected prior to the occurrence of a Triggering
     Event or (iv) to change or supplement the provisions hereunder in any
     manner that the Partnership may deem necessary or desirable and that shall
     not adversely affect the interests of the holders of Rights (other than an
     Acquiring Person or an Affiliate or Associate of an Acquiring Person);
     provided, this Agreement may not be supplemented or amended to lengthen,
     pursuant to clause (iii) of this sentence, (A) a time period relating to
     when the Rights may be redeemed at such time as the Rights are not then
     redeemable or (B) any other time period unless such lengthening is for the

                                      33
<PAGE>

     purpose of protecting, enhancing or clarifying the rights of, and/or the
     benefits to, the holders of Rights. Upon the delivery of a certificate from
     an appropriate officer of the Partnership that states that the proposed
     supplement or amendment is in compliance with the terms of this Section 27,
     the Rights Agent shall execute such supplement or amendment. Prior to the
     Distribution Date, the interests of the holders of Rights shall be deemed
     coincident with the interests of the holders of Units.

                SECTION 28. SUCCESSORS. All the covenants and provisions of this
     Agreement by or for the benefit of the Partnership or the Rights Agent
     shall bind and inure to the benefit of their respective successors and
     assigns hereunder.

                SECTION 29. DETERMINATIONS AND ACTIONS BY THE GENERAL PARTNER,
     ETC. For all purposes of this Agreement, any calculation of the number of
     Units outstanding at any particular time, including for purposes of
     determining the particular percentage of such outstanding Units of which
     any Person is the Beneficial Owner, shall be made in accordance with the
     last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
     under the Exchange Act. The General shall have the exclusive power and
     authority to administer this Agreement and to exercise all rights and
     powers specifically granted to the General Partner, or the Partnership or
     as may be necessary or advisable in the administration of this Agreement,
     including, without limitation, the right and power to (i) interpret the
     provisions of this Agreement and (ii) make all determinations deemed
     necessary or advisable for the administration of this Agreement (including
     a determination to redeem or not redeem the Rights or to amend the
     Agreement). All such actions, calculations, interpretations and
     determinations (including, for purposes of clause (y) below, all omissions
     with respect to the foregoing) which are done or made by the General
     Partner in good faith, shall (x) be final, conclusive and binding on the
     Partnership, the Rights Agent, the holders of the Rights Certificates and
     all other parties and (y) not subject General Partner to any liability to
     the holders of the Rights.

                SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this
     Agreement shall be construed to give to any Person other than the
     Partnership, the Rights Agent and the registered holders of the Rights
     Certificates (and, prior to the Distribution Date, the Units) any legal or
     equitable right, remedy or claim under this Agreement; but this Agreement
     shall be for the sole and exclusive benefit of the Partnership, the Rights
     Agent and the registered holders of the Rights Certificates (and, prior to
     the Distribution Date, the Units).

                SECTION 31. SEVERABILITY. If any term, provision, covenant or
     restriction of this Agreement is held by a court of competent jurisdiction
     or other authority to be invalid, void or unenforceable, the remainder of
     the terms, provisions, covenants and restrictions of this Agreement shall
     remain in full force and effect and shall in no way be affected, impaired
     or invalidated; provided, however, that notwithstanding anything in this
     Agreement to the contrary, if any such term, provision, covenant or
     restriction is held by such court or authority to be invalid, void or
     unenforceable and the General Partner determines in its good faith judgment
     that severing the invalid language from this Agreement would adversely
     affect the purpose or effect of this Agreement, the right of redemption set
     forth in Section 23 hereof shall be reinstated and shall not expire until
     the close of business on the tenth day following the date of such
     determination by the General Partner.

                                      34
<PAGE>

                SECTION 32. GOVERNING LAW. This Agreement and each Right and
     each Rights Certificate issued hereunder shall be deemed to be a contract
     made under the laws of the State of Delaware and for all purposes shall be
     governed by and construed in accordance with the laws of such State
     applicable to contracts to be made and performed entirely within such
     State.

                SECTION 33. COUNTERPARTS. This Agreement may be executed in any
     number of counterparts and each of such counterparts shall for all purposes
     be deemed to be an original, and all such counterparts shall together
     constitute but one and the same instrument.

                SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
     several Sections of this Agreement are inserted for convenience only and
     shall not control or affect the meaning or construction of any of the
     provisions hereof.

                SECTION 35. AMENDMENT TO PARTNERSHIP AGREEMENT. Upon the
     Distribution Date, the Partnership Agreement shall be amended automatically
     as follows:

                    a.   To incorporate by this reference into the Partnership
          Agreement all of the terms and provisions of the Rights Agreement.

                    b.   To amend Article V to add the following new Section
          5.9:

          "Section 5.9   Special Provisions Relating to Adjustment of Minimum
                         Quarterly Distribution and Target Level Distributions
                         in Connection with Rights.

                    (a)  Upon the date of a Triggering Event (the "Trigger
                         Date"), the Minimum Quarterly Distribution, First
                         Target Distribution, Second Target Distribution and
                         Third Target Distribution (collectively, the
                         "Distribution Levels") shall each automatically be
                         adjusted so that the Distribution Levels thereafter
                         shall equal the result obtained by multiplying the
                         Distribution Levels in effect immediately prior to the
                         date of a Triggering Event by the Distribution Ratio
                         (defined below).

                    (b)  The distribution ratio (the "Distribution Ratio") shall
                         equal a fraction the numerator of which shall be the
                         number of Units outstanding on the Trigger Date, plus
                         the number of Class A Common Units or other Partnership
                         Securities, as the case may be, that the aggregate
                         exercise price of the Rights would purchase at the
                         current per unit market price for the Common Units on
                         the Trigger Date and the denominator of which shall be
                         the number of Units outstanding on the Trigger Date,
                         plus the number of Class A Common Units or other
                         Partnership Securities, as the case may be, that would
                         be issuable upon the exercise in full of the Rights;
                         provided, however, that if the General

                                      35
<PAGE>

                         Partner shall have exercised the option pursuant to
                         Section 24 of the Rights Agreement to exchange all or a
                         part of the then outstanding and exercisable Rights for
                         Class A Common Units or other Partnership Securities,
                         as the case may be, then the Distribution Ratio shall
                         be adjusted accordingly to reflect the number of Class
                         A Common Units or other Partnership Securities, as the
                         case may be, that would be issuable in connection
                         within such exchange."

                     c.  To amend Section 15.3 of the Partnership Agreement to
                 add the following new paragraph (f):

                         "(f) Notwithstanding anything to the contrary contained
                         herein, following the Distribution Date the Partnership
                         shall not supplement or amend the terms of the
                         Partnership Agreement in any manner that may materially
                         adversely affect the interests of the holders of Rights
                         (other than an Acquiring Person or an Affiliate or an
                         Associate of an Acquiring Person)."

               [Remainder of This Page Intentionally Left Blank]

                                      36
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.

                                   STAR GAS PARTNERS, L.P.
                                   By:  Star Gas, LLC
                                      (General Partner)

                                   By:______________________________
                                      Name:
                                      Title:

                                   AMERICAN STOCK TRANSFER &
                                      TRUST COMPANY

                                   By:______________________________
                                      Name:
                                      Title:

                                      37
<PAGE>

                                   EXHIBIT A
                          FORM OF RIGHTS CERTIFICATE

Certificate No. R-                                                _____ Rights

          NOT EXERCISABLE AFTER April 16, 2011 OR EARLIER IF TERMINATED BY THE
     PARTNERSHIP OR IF THE PARTNERSHIP EXCHANGES THE RIGHTS PURSUANT TO THE
     RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
     THE PARTNERSHIP, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
     AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
     ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
     SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
     OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
     RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
     BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
     PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
     THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL
     AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(E) OF SUCH RIGHTS
     AGREEMENT.]

______________________________
* The portion of the legend in bracket shall be inserted only if applicable and
  shall replace the preceding sentence.

                                      A-1
<PAGE>

                              RIGHTS CERTIFICATE
                            STAR GAS PARTNERS, L.P.

          This certifies that ______________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of April 17, 2001 (the "Rights Agreement"),
between Star Gas Partner, L.P., a Delaware corporation (the "Partnership"), and
American Stock Transfer & Trust Company, as rights agent (the "Rights Agent"),
to purchase from the Partnership at any time after the Distribution Date (as
such term is defined in the Rights Agreement) and prior to 5:00 P.M., New York
time, on April 16, 2011 at the office of the Rights Agent designated for such
purpose, or at ____________________________, the office of its successor as
Rights Agent, one fully paid non-assessable Class A common unit of limited
partner interest (the "Class A Common Units"), of the Partnership, at a purchase
price of $80.00 per unit (the "Purchase Price"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of Class A Common Units which may be purchased upon
exercise hereof) set forth above are the number and Purchase Price as of
__________, 2001, based on the Class A Common Units as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number and kind
of Class A Common Units or other securities which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.

          This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Partnership and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Partnership and the above-mentioned office of the Rights Agent.

          Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate (i) may be redeemed by the Partnership, at
its option, at a redemption price of $0.01 per Right or (ii) may be exchanged by
the Partnership in whole or in part for Class A Common Units, substantially
equivalent rights or other consideration as determined by the Partnership.

          This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate amount of securities as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.

                                      A-2
<PAGE>

          No fractional portion of less than one Class A Common Unit will be
issued upon the exercise of any Right or Rights evidenced hereby but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement. No
holder of this Rights Certificate, as such, shall be entitled to vote or receive
distributions or be deemed for any purpose the holder of the Common Units or of
any other securities of the Partnership which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
unitholder of the Partnership or any right to vote upon any matter submitted to
Unitholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
Unitholders (except as provided in the Rights Agreement), or to receive
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.

          This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.

          WITNESS the facsimile signature of the proper officers of the
Partnership.  Dated as of ___________ __, 2001.

ATTEST:                                    STAR GAS PARTNERS, L.P.
                                           By: Star Gas, LLC
                                           (General Partner)

                                           By:
                                              Name:
                                              Title:
Countersigned:

AMERICAN STOCK TRANSFER & TRUST COMPANY

____________________
as Rights Agent

By:__________________________
Authorized Signature

                                      A-3
<PAGE>

                  FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE
                              FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the
                              Rights Certificate)

          FOR VALUE RECEIVED __________________ hereby sells, assigns and
transfers unto
                 (Please print name and address of transferee)

_________________________________________________________________________ this
Rights Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint __________________________
Attorney, to transfer the within Rights Certificate on the books of the within-
named Partnership, with full power of substitution.

Dated: _______________, 20__

                              ___________________________________
                              Signature

                              IMPORTANT:  The signature(s) of the assignor(s)
                              must be guaranteed by an eligible guarantor
                              institution (bank, stock broker, savings and loan
                              association or credit union) with membership in an
                              approved signature guarantee medallion program
                              pursuant to Securities and Exchange Commission
                              Rule 17Ad-15.

                              ____________________________________________

                              ____________________________________________
                              (person(s) executing this power sign(s) here)

                              ____________________________________________
                                       Signature Medallion Guaranteed

                                      A-4
<PAGE>

                                  CERTIFICATE

          The undersigned hereby certifies by checking the appropriate boxes
that:

          (i) this Rights Certificate [   ] is [   ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person,
or an Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement);

          (ii) after due inquiry and to the best knowledge of the undersigned,
it [   ] did [   ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person.

Dated: _______________, 20__

                              ____________________________________
                              Signature

                              IMPORTANT:  The signature(s) of the assignor(s)
                              must be guaranteed by an eligible guarantor
                              institution (bank, stock broker, savings and loan
                              association or credit union) with membership in an
                              approved signature guarantee medallion program
                              pursuant to Securities and Exchange Commission
                              Rule 17Ad-15.

                              ___________________________________________

                              ___________________________________________
                              (person(s) executing this power sign(s) here)

                              ___________________________________________
                                       Signature Medallion Guaranteed

                                      A-5
<PAGE>

            FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED
                         FORM OF ELECTION TO PURCHASE

     (To be executed if holder desires to exercise the Rights Certificate)

To: __________________________________

          The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Rights Certificate to purchase the number of Class A
Common Units issuable upon the exercise of such Rights and requests that
certificates for such number of Class A Common Units issued in the name of:

Please insert social security or other identifying number:

                        (Please print name and address)

________________________________________________________________________________

          If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:

Please insert social security or other identifying number:

                        (Please print name and address)

________________________________________________________________________________

Dated: ___________________, 20__

                              _________________________________
                              Signature

IMPORTANT:  The signature(s) of the holder(s) must be guaranteed by an eligible
guarantor institution (bank, stock broker, savings and loan association or
credit union) with membership in an approved signature guarantee medallion
program pursuant to Securities and Exchange Commission Rule 17Ad-15.

                              ____________________________________________

                              ____________________________________________
                              (person(s) executing this power sign(s) here)

                              ____________________________________________
                                       Signature Medallion Guaranteed

                                      A-6
<PAGE>

                                  CERTIFICATE

The undersigned hereby certifies by checking the appropriate boxes that:

          (1) the Rights evidenced by this Rights Certificate [   ] are [   ]are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement);

          (2)  after due inquiry and to the best knowledge of the undersigned,
it [   ]did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Person.

Dated: __________ 20__

                              ________________________________
                              Signature

                              IMPORTANT:  The signature(s) of the holder(s) must
                              be guaranteed by an eligible guarantor institution
                              (bank, stock broker, savings and loan association
                              or credit union) with membership in an approved
                              signature guarantee medallion program pursuant to
                              Securities and Exchange Commission Rule 17Ad-15.

                              ____________________________________________

                              ____________________________________________
                              (person(s) executing this power sign(s) here)

                              ____________________________________________
                                       Signature Medallion Guaranteed

                                      A-7
<PAGE>

            FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                                    NOTICE

     The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.

                                      A-8
<PAGE>

                                   EXHIBIT B

                            STAR GAS PARTNERS, L.P.

                            UNITHOLDER RIGHTS PLAN

Summary of Rights

Distribution Transfer of Rights:

          The General Partner has declared a Rights Certificate distribution of
one Right for each limited partner unit and general partner unit of Star Gas
Partners, L.P. outstanding. Prior to the Distribution Date referred to below,
the Rights will be evidenced by, and trade with, the certificates for the Units.
After the Distribution Date, Star Gas Partners, L.P. (the "Partnership") will
mail Rights certificates to the Partnership's unitholders and the Rights will
become transferable apart from the Units.

Distribution Date:

          Rights will separate from the Units and become exercisable (following
the end of the Subordination Period) on the tenth day (or such later date as may
be determined by the General Partner) after a person or group (a) acquires
beneficial ownership of 15% or more of either the Common Units or the
Subordinated Units or (b) announces a tender or exchange offer, the consummation
of which would result in ownership by a person or group of 15% or more of the
Common Units or the Subordinated Units.

Common Units Purchasable Upon Exercise of Rights:

          After the Distribution Date, each Right will entitle the holder to
purchase, for $80.00, a Class A Common Unit following the end of the
Subordination Period.

Flip-In:

          If a person or group (an "Acquiring Person") obtains 15% or more of
either the Common Units or the Subordinated Units (other than pursuant to a
tender offer deemed adequate and in the best interests of the Partnership and
its Unitholders by the General Partner (a "Permitted Offer")), and the
Subordination Period ends then each Right (other than Rights owned by an
Acquiring Person or its affiliates) will entitle the holder thereof to purchase,
for the exercise price, a number of Class A Common Units having a then current
market value of twice the exercise price.

                                      B-1
<PAGE>

Flip-Over:

          If, after the Distribution Date, (a) the Partnership merges into
another entity, (b) an acquiring entity merges into the Partnership or (c) the
Partnership sells more than 50% of the Partnership's assets or earning power,
then each Right (other than Rights owned by an Acquiring Person or its
affiliates) will entitle the holder thereof to purchase, for the exercise price,
a number of common units or equivalent securities of the person engaging in the
transaction having a then current market value of twice the exercise price
(unless the transaction satisfies certain conditions and is consummated with a
person who acquired units pursuant to a Permitted Offer, in which case the
Rights will expire).

Exchange Provision:

          At any time after an event triggering the flip-in or flip-over rights
and prior to the acquisition by the Acquiring Person of 50% or more of the
outstanding Units , the General Partner may exchange the Rights (other than
Rights owned by the Acquiring Person or its affiliates), in whole or in part, at
an exchange ratio of one Class A Common Unit per Right (subject to adjustment).

Redemption of the Rights:

          Rights will be redeemable at the Partnership's option for $0.01 per
Right at any time on or prior to the Distribution Date.

Expiration of the Rights:

          The Rights expire on the earliest of (a) April 16, 2011, (b) exchange
or redemption of the Rights as described above, or (c) consummation of a merger
or consolidation resulting in expiration of the Rights as described above.

Amendment of Terms of Rights:

          The terms of the Rights and the Rights Agreement may be amended in any
respect without the consent of the Rights holders on or prior to the
Distribution Date; thereafter, the terms of the Rights and the Rights Agreement
may be amended without the consent of the Rights holders in order to cure any
ambiguities or to make changes which do not adversely affect the interests of
Rights holders (other than the Acquiring Person).

Voting Rights:

          Rights will not have any voting rights.

Anti-Dilution Provisions:

          Rights will have the benefit of certain customary anti-dilution
provisions.

                                      B-2
<PAGE>

Taxes:

          The Rights distribution should not be taxable for federal income tax
purposes. However, following an event which renders the Rights exercisable or
upon redemption of the Rights, Unitholders may recognize taxable income.

          The foregoing is a summary of certain principal terms of the
Unitholder Rights Plan only and is qualified in its entirety by reference to the
detailed terms of the Rights Agreement dated as of April 17, 2001, between the
Partnership and the Rights Agent.

                                      B-3
<PAGE>

                                   EXHIBIT C

                                  FEE SCHEDULE

$2,500.00 Flat Fee per annum for services, plus reasonable out of pocket
expenses, in connection with the Unit Purchase Rights Agreement dated April 17,
2001 by and between Star Gas Partners, L.P., a Delaware limited partnership, and
American Stock Transfer & Trust Company, as Rights Agent.

Billable to Star Gas Partners, L.P.

                                      C-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}]]