CORNERSTONE PROPANE PARTNERS LP, S-1/A, 1996-12-06

CORNERSTONE PROPANE PARTNERS LP
S-1/A, 1996-12-06
RETAIL STORES, NEC

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 6, 1996

REGISTRATION NO. 333-13879
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------

AMENDMENT NO. 2
TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933
-------------------

CORNERSTONE PROPANE PARTNERS, L.P.

(Exact name of registrant as specified in its charter)
-------------------

<TABLE>
<S> <C> <C>
DELAWARE 5984 77-0439862
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) number)
</TABLE>

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432 WESTRIDGE DRIVE
WATSONVILLE, CALIFORNIA 95076
(408) 724-1921

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
-------------------

RONALD J. GOEDDE
432 WESTRIDGE DRIVE
WATSONVILLE, CALIFORNIA 95076
(408) 724-1921

(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:

<TABLE>
<S> <C> <C>
ANDREWS & KURTH L.L.P. SCHIFF HARDIN & WAITE BAKER & BOTTS,
425 LEXINGTON AVENUE 7200 SEARS TOWER L.L.P.
10TH FLOOR 233 S. WACKER DRIVE ONE SHELL PLAZA
NEW YORK, NEW YORK 10017 CHICAGO, ILLINOIS 60606 910 LOUISIANA
(212) 850-2800 (312) 258-5500 HOUSTON, TEXAS
ATTN: MICHAEL ROSENWASSER ATTN: LINDA JEFFRIES WIGHT 77002
(713) 229-1234
ATTN: WALTER J.
SMITH
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
-------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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<PAGE>

EXPLANATORY NOTE

Cornerstone Propane Partners, L.P. has prepared this Amendment No. 2 to its
Registration Statement on Form S-1 for the purpose of filing with the Securities
and Exchange Commission exhibits to the Registration Statement. This Amendment
No. 2 does not modify any provision of the prospectus included in the
Registration Statement; accordingly, such prospectus has not been included
herein.

<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Set forth below are the expenses (other than underwriting discounts and
commissions) expected to be incurred in connection with the issuance and
distribution of the securities registered hereby. With the exception of the
Securities and Exchange Commission registration fee, the NASD filing fee and the
NYSE filing fee, the amounts set forth below are estimates.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........... $ 65,474
NASD filing fee............................................... 22,107
NYSE filing fee............................................... 100,000
Printing and engraving expenses............................... 775,000
Legal fees and expenses....................................... 2,200,000
Accounting fees and expenses.................................. 480,000
Blue Sky fees and expenses.................................... 15,000
Transfer agent and registrar fees............................. 2,500
Miscellaneous expenses........................................ 139,919
---------
Total....................................................... $3,800,000
---------
---------
</TABLE>

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* To be furnished by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Section of the Prospectus entitled "The Partnership Agreement --
Indemnification" is incorporated herein by this reference.

Reference is made to Section 7 of the Underwriting Agreement filed as
Exhibit 1.1 to this Registration Statement.

Subject to any terms, conditions or restrictions set forth in the
Partnership Agreements, Section 17-108 of the Delaware Revised Limited
Partnership Act empowers a Delaware limited partnership to indemnify and hold
harmless any partner or other person from and against all claims and demands
whatsoever.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

There has been no sale of securities of the Partnership within the past
three years.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

a. Exhibits

<TABLE>
<C> <C> <S>
*1.1 -- Form of Underwriting Agreement
**3.1 -- Form of Amended and Restated Agreement of Limited Partnership of
Cornerstone Propane Partners, L.P. (included as Appendix A to the
Prospectus)
*3.2 -- Form of Amended and Restated Agreement of Limited Partnership of
Cornerstone Propane, L.P.
*5.1 -- Opinion of Andrews & Kurth L.L.P. as to the legality of the securities
being registered
*8.1 -- Opinion of Andrews & Kurth L.L.P. relating to tax matters
*10.1 -- Form of Credit Agreement among Cornerstone Propane, L.P. and certain banks
*10.2 -- Form of Note Purchase Agreement among Cornerstone Propane, L.P. and
certain investors
</TABLE>

II-1
<PAGE>

<TABLE>
<C> <C> <S>
*10.3 -- Form of Contribution, Conveyance and Assumption Agreement, among
Cornerstone Propane Partners, L.P., Cornerstone Propane, L.P.,
Cornerstone Propane GP, Inc., and certain other parties
*10.4 -- Form of 1996 Cornerstone Propane Partners, L.P. Restricted Unit Plan
*10.5 -- Form of Employment Agreements for Messrs. Baxter, Kittrell, Goedde and
DiCosimo
*10.6 -- Form of Indemnity Agreement among Northwestern Growth Corporation,
Cornerstone Propane GP, Inc., Cornerstone Propane Partners, L.P. and
Cornerstone Propane, L.P.
*21.1 -- List of Subsidiaries
**23.1 -- Consent of Arthur Andersen LLP
**23.2 -- Consent of Baird, Kurtz & Dobson
**23.3 -- Consent of Price Waterhouse LLP
*23.4 -- Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1 and 8.1)
**24.1 -- Powers of Attorney (included on signature page)
*27.1 -- Financial Data Schedule
</TABLE>

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

* Filed herewith

** Previously filed

b. Financial Statement Schedules --
All Financial statement schedules are omitted because the information is not
required, is not material or is otherwise included in the financial statements
or related notes thereto.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefor, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(i) For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be a part of this
Registration Statement as of the time it was declared effective.

(ii) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-2
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Watsonville, State of California, on December 6, 1996.

CORNERSTONE PROPANE PARTNERS, L.P.

By: CORNERSTONE PROPANE GP, INC.

AS GENERAL PARTNER

By:____/s/_KEITH G. BAXTER____________

Name: Keith G. Baxter

Title: President and Chief
Executive Officer

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND DATES INDICATED BELOW.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------ ----------------------------------------------------- --------------------

<C> <S> <C>
/s/ MERLE D. LEWIS* Chairman of the Board and Director of Cornerstone
---------------------------- Propane GP, Inc.
Merle D. Lewis

/s/ RICHARD R. HYLLAND* Vice Chairman of the Board and Director of
---------------------------- Cornerstone Propane GP, Inc.
Richard R. Hylland

/s/ KEITH G. BAXTER President, Chief Executive Officer and Director of
---------------------------- Cornerstone Propane GP, Inc. (Principal Executive
Keith G. Baxter Officer) December 6, 1996

/s/ RONALD J. GOEDDE* Executive Vice President and Chief Financial Officer
---------------------------- of Cornerstone Propane GP, Inc. (Principal Financial
Ronald J. Goedde and Accounting Officer)

/s/ DANIEL K. NEWELL* Director of Cornerstone Propane GP, Inc.
----------------------------
Daniel K. Newell
</TABLE>

*By:____/s/_KEITH G. BAXTER___________

<TABLE>
<C> <S> <C>
December 6, 1996
</TABLE>

Keith G. Baxter

Attorney in fact

II-3
<PAGE>
INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBITS PAGE
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<C> <S> <C>

*1.1 Form of Underwriting Agreement
**3.1 Form of Amended and Restated Agreement of Limited Partnership of Cornerstone Propane Partners,
L.P. (included as Appendix A to the Prospectus)
*3.2 Form of Amended and Restated Agreement of Limited Partnership of Cornerstone Propane, L.P.
*5.1 Opinion of Andrews & Kurth L.L.P. as to the legality of the securities being registered
*8.1 Opinion of Andrews & Kurth L.L.P. relating to tax matters
*10.1 Form of Credit Agreement among Cornerstone Propane, L.P. and certain banks
*10.2 Form of Note Purchase Agreement among Cornerstone Propane, L.P. and certain investors
*10.3 Form of Contribution, Conveyance and Assumption Agreement, among Cornerstone Propane Partners,
L.P., Cornerstone Propane, L.P. Cornerstone Propane GP, Inc., and certain other parties
*10.4 Form of 1996 Cornerstone Propane Partners, L.P. Restricted Unit Plan
*10.5 Form of Employment Agreements for Messrs. Baxter, Kittrell, Goedde and DiCosimo
*10.6 Form of Indemnity Agreement among Northwestern Growth Corporation, Cornerstone Propane GP,
Inc., Cornerstone Propane Partners, L.P. and Cornerstone Propane, L.P.
*21.1 List of Subsidiaries
**23.1 Consent of Arthur Andersen LLP
**23.2 Consent of Baird, Kurtz & Dobson
**23.3 Consent of Price Waterhouse LLP
*23.4 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1 and 8.1)
**24.1 Powers of Attorney (included on signature page)
*27.1 Financial Data Schedule
</TABLE>

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* Filed herewith

** Previously filed

<PAGE>

DRAFT 12/03/96

CORNERSTONE PROPANE PARTNERS, L.P.

8,540,000 COMMON UNITS REPRESENTING LIMITED PARTNER INTERESTS

UNDERWRITING AGREEMENT

December ___, 1996

<PAGE>

December ___, 1996

Morgan Stanley & Co.
Incorporated
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Oppenheimer & Co., Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
c/o Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036

Dear Sirs and Mesdames:

Cornerstone Propane Partners, L.P., a Delaware limited partnership
(the "Partnership"), proposes to issue and sell to the several Underwriters
named in Schedule I hereto (the "Underwriters") 8,540,000 common units
representing limited partner interests in the Partnership (the "Firm Units").
The Partnership also proposes to issue and sell to the several Underwriters not
more than an additional 1,281,000 common units representing limited partner
interests in the Partnership (the "Additional Units") if and to the extent that
you, as Managers of the offering, shall have determined to exercise, on behalf
of the Underwriters, the right to purchase such Additional Units granted to the
Underwriters in Section 2 hereof. The Firm Units and the Additional Units are
hereinafter collectively referred to as the "Units." The common units
representing limited partner interests in the Partnership to be outstanding
after giving effect to the sales contemplated hereby are hereinafter referred to
as the "Common Units."

The Partnership has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, including a prospectus, relating to
the Units. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement;" the prospectus in the form first
used to confirm sales of Units is hereinafter referred to as the "Prospectus;"
each of the preliminary prospectus dated November 21, 1996 filed as part of the
registration statement and each preliminary prospectus filed as a part of any
subsequent amendment thereto, or filed pursuant to Rule 424 under the Securities
Act prior to the Prospectus, is hereinafter referred to as a "Preliminary
Prospectus." If the Partnership has filed an abbreviated registration statement
to register additional Common Units pursuant to Rule 462(b) under the

<PAGE>

Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such
Rule 462 Registration Statement.

It is understood and agreed to by all parties that the Partnership was
formed to acquire and operate the business and assets of (a) SYN Inc., a
Delaware corporation ("Synergy"), and Empire Energy Corporation, a Tennessee
corporation ("Empire Energy"), each of which is a subsidiary of Northwestern
Growth Corporation, a South Dakota corporation ("NGC"), which is a subsidiary of
Northwestern Public Service Company, a Delaware corporation ("NPS"), (b) Myers
Propane Gas Company, an Ohio corporation ("Myers"), which is a subsidiary of
NPS, (c) CGI Acquisition Corporation, a Delaware corporation ("Acquisition
Corp."), which is a subsidiary of NGC, and (d) CGI Holdings, Inc., a Delaware
corporation ("Coast"), which will be acquired by NGC prior to the closing of the
offering of the Units contemplated hereby. Cornerstone Propane GP, Inc., a
Delaware corporation ("Newco"), is the general partner (the "Managing General
Partner") of both the Partnership and Cornerstone Propane, L.P., a Delaware
limited partnership (the "Operating Partnership"). Upon the closing of the
offering of the Units, Synergy will be the special general partner (the "Special
General Partner") of the Partnership and the Operating Partnership. Synergy,
Empire Energy, Myers, Coast and their respective subsidiaries are collectively
referred to herein as the "Predecessor Entities." The Partnership, the
Operating Partnership and Cornerstone Services Corporation, a Delaware
corporation and a wholly owned subsidiary of the Operating Partnership (the
"Corporate Sub"), are collectively referred to herein as the "Partnership
Entities."

It is further understood and agreed to by all parties that prior to or
concurrently with the closing of the offering of the Units contemplated hereby,
(1)(a) NGC will purchase stock of (and certain rights related to) Synergy and
Myers owned by Empire Gas Corporation, a ____________ corporation currently
known as "All Star Gas Corporation" ("Empire Gas"), (b) NGC will cause CGI
Acquisition to merge with and into Coast, (c) NPS will contribute all the
outstanding shares of capital stock of Myers to NGC as a capital contribution
(and not in exchange for stock of NGC), (d) NGC will contribute all of the
outstanding shares of capital stock of (and certain rights related to) Synergy,
Myers, Empire Energy and Newco owned by NGC and a promissory note of Empire
Energy in the outstanding principal amount of $[8,000,000] (the "Empire Energy
Promissory Note"), including accrued interest, to Coast approximately
[$8,000,000 in outstanding principal amount of] indebtedness of NGC and the
Predecessor Entities and (e) Coast will contribute all of the outstanding shares
of capital stock of (and certain rights related to) Synergy, Myers, Empire
Energy and Newco owned by Coast, the Empire Energy Promissory Note (including
accrued interest) and [the assets of CGI Acquisition] to Coast Gas, Inc., a
California corporation and a wholly owned subsidiary of Coast ("Coast Gas"),
indebtedness of [Coast] on such date, (2)(a) all of the subsidiaries of Synergy
will merge into Synergy, (b) all of the subsidiaries of Empire Energy, other
than Empire Service Corporation, a Tennessee corporation ("SC"), will merge into
Empire Energy, (c) Empire Energy and Myers will merge into Coast Gas, (d) Coast
Energy Group, Inc., a Delaware corporation and the sole subsidiary of Coast Gas
("CEG"), will merge into Coast Gas, (e) Coast will merge into NGC and (f) Newco
will merge into Coast Gas (in connection with which Coast Gas will change its
name to "Cornerstone Propane GP, Inc." and will become the Managing General
Partner), (3) pursuant to a Contribution and Conveyance Agreement (the
"Contribution Agreement"),

2
<PAGE>

(a) Synergy will convey substantially all of its assets to the Operating
Partnership in exchange for a ____% general partner interest and a ____%
limited partner interest in the Operating Partnership and the assumption by
the Operating Partnership of substantially all of the liabilities of Synergy,
(b) SC will convey all of its assets to the Operating Partnership in exchange
for a ____% limited partner interest in the Operating Partnership and the
assumption by the Operating Partnership of all of the liabilities of SC, and
(c) Coast Gas will convey substantially all of its assets (other than
approximately $_______ of amounts receivable due from SC and the shares of
the capital stock of Synergy and SC) to the Operating Partnership in exchange
for a ____% limited partner interest in the Operating Partnership, a ______%
general partner interest in the Operating Partnership and the assumption by
the Operating Partnership of all of the liabilities of Coast Gas (other than
approximately $31.7 million in outstanding principal amount of indebtedness
assumed from Empire Energy) (the assets to be conveyed to the Operating
Partnership pursuant to the Contribution Agreement (including, without
limitation, the assets to be acquired by Coast Gas pursuant to the
transactions listed in clauses (1) and (2) of this sentence) are collectively
referred to as the "Transferred Assets"), (4) the Operating Partnership will
enter into a Bank Credit Agreement (the "Bank Credit Agreement") providing
for a $50.0 million working capital facility and a $75.0 million acquisition
facility, (5)(a) the Operating Partnership will issue $220.0 million in
Senior Secured Notes (the "Senior Notes") to certain institutional investors
pursuant to a Note Purchase Agreement (the "Note Agreement"), which Senior
Notes will be secured pursuant to a Security Agreement (the "Security
Agreement"), (b) the Operating Partnership will borrow
[approximately $12.8 million] under the working capital facility provided for
in the Bank Credit Agreement and (c) the proceeds from the issuance of the
Senior Notes and the borrowing under the working capital facility will be
used to repay approximately [$158.7 million] principal amount of indebtedness
assumed by the Operating Partnership and to distribute an aggregate of
approximately $_______ to the Managing General Partner and $_______ to the
Special General Partner, (6) pursuant to the Contribution Agreement, (a)
Synergy will convey all of its limited partner interest in the Operating
Partnership to the Partnership in exchange for _______ subordinated units
representing limited partner interests in the Partnership ("Subordinated
Units"), a _____% special general partner interest in the Partnership and
________ units representing non-voting limited partner interests in the
Partnership entitling the holder to certain incentive distribution rights
(the "Incentive Distribution Rights"), (b) Coast Gas will convey all of its
limited partner interests in the Operating Partnership to the Partnership in
exchange for _______ Subordinated Units, a __% general partner interest in
the Partnership and _______ Incentive Distribution Rights and (c) SC will
convey all of its limited partner interest in the Operating Partnership to
the Partnership in exchange for _______ Subordinated Units (as a result of
which the Partnership will own a 98.9899% limited partner interest in the
Operating Partnership), (7) the Partnership will contribute the proceeds from
the sale of the Units to the Underwriters to the Operating Partnership, which
will use such proceeds to repay approximately [$172.7 million] principal
amount of indebtedness and will use borrowings of approximately
[$14.8 million] from NPS to pay expenses associated with the Transactions (as
defined below), (8)(a) the Special General Partner will redeem _______ shares
of its preferred stock and (b) pursuant to a Conveyance, Assignment and
Assumption Agreement--Service Assets (the "Service Assets Conveyance
Agreement"), the Operating Partnership will convey its appliance sales,
installation and service assets to the Corporate Sub, in exchange for shares
of its common stock,

3
<PAGE>

(c) the Managing General Partner will lend $_______ to NGC and redeem ______
shares of its preferred stock, (d) the Managing General Partner will repay
approximately [$31.7 million] of indebtedness and (e) SC will merge into the
Managing General Partner (such merger and the mergers described in clause (2)
above are collectively referred to herein as the "Northwestern Mergers") (the
transactions described in clauses (1) through (8) above are collectively
referred to as the "Transactions"). In connection with the consummation of
the Transactions, the Predecessor Entities, the Partnership Entities, Newco
and NGC will enter into various agreements and certificates of merger, bills
of sale, conveyances, deeds and other assignments pursuant to the
Contribution Agreement (collectively with the Contribution Agreement and the
Service Assets Conveyance Agreement, the "Merger and Conveyance Documents").

1. REPRESENTATIONS AND WARRANTIES. Each of the Partnership, the
Operating Partnership, the Managing General Partner and Synergy represents and
warrants to and agrees with each of the Underwriters that:

(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of the
Partnership, the Operating Partnership, Newco or Synergy, threatened by the
Commission.

(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement, any Preliminary Prospectus and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) any Preliminary Prospectus
and the Prospectus do not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph 1(b) do not apply to
statements or omissions in the Registration Statement, any Preliminary
Prospectus or the Prospectus, as amended or supplemented, if applicable, based
upon information relating to any Underwriter furnished to the Partnership in
writing by such Underwriter through you expressly for use therein.

(c) None of the Predecessor Entities, the Partnership Entities,
Newco, NGC and NPS has taken, and none of them will take, directly or
indirectly, any action designed to or that could reasonably be expected to cause
or result in the stabilization or manipulation of the price of the Common Units,
and the Partnership has not distributed and, prior to the later to occur of (i)
the Closing Date (as defined in Section 4 hereof) and (ii) completion of the
distribution of the Units, will not distribute, any prospectus (as defined under
the Securities Act) in connection with the offering and sale of the Units other
than the Registration Statement, any Preliminary Prospectus, the

<PAGE>

Prospectus or other materials, if any, permitted by the Securities Act,
including Rule 134 of the general rules and regulations thereunder.

(d) Each of the Partnership and the Operating Partnership is a
limited partnership duly formed, validly existing and in good standing under the
Delaware Revised Uniform Limited Partnership Act (the "Delaware Act") with full
partnership power and authority to own or lease its properties to be owned or
leased at the Closing Date, to assume the liabilities being assumed by it
pursuant to the Merger and Conveyance Documents and to conduct its business to
be conducted at the Closing Date in all material respects as described in the
Registration Statement and the Prospectus, and each of the Partnership and the
Operating Partnership is, or at the Closing Date will be, duly registered or
qualified as a foreign limited partnership to conduct its business and in good
standing in each jurisdiction or place where the nature or location of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify (i) would not
have a material adverse effect on the condition, financial or otherwise, or in
the earnings, business or operations of the Partnership Entities taken as a
whole, and (ii) would not subject the limited partners of the Partnership to any
material liability or disability.

(e) Corporate Sub is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to own or lease its properties to be owned or
leased at the Closing Date and to conduct its business to be conducted at the
Closing Date in all material respects as described in the Registration Statement
and the Prospectus, and Corporate Sub is, or at the Closing Date will be, duly
registered or qualified as a foreign corporation to conduct its business and is
in good standing in each jurisdiction or place where the nature or location of
its properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify (i) would not
have a material adverse effect on the condition, financial or otherwise, or in
the earnings, business or operations of the Partnership Entities taken as a
whole, and (ii) would not subject the limited partners of the Partnership to any
material liability or disability.

(f) Newco is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware with full corporate power
and authority to own or lease its properties and to conduct its business and to
act as a general partner of the Partnership and of the Operating Partnership, in
each case in all material respects as described in the Registration Statement
and the Prospectus, and Newco is duly registered or qualified as a foreign
corporation to conduct its business and is in good standing in each jurisdiction
or place where the nature or location of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify (i) would not have a material adverse effect on the
condition, financial or otherwise, or in the earnings, business or operations of
the Partnership Entities taken as a whole, and (ii) would not subject the
limited partners of the Partnership to any material liability or disability.

(g) Coast Gas is a corporation duly organized, validly existing and
in good standing under the laws of the State of California with full corporate
power and authority to own or

5
<PAGE>

lease its properties and to conduct its business and to act as managing
general partner of the Partnership and of the Operating Partnership in each
case in all material respects as described in the Registration Statement and
the Prospectus, and Coast Gas is duly registered or qualified as a foreign
corporation to conduct its business and is in good standing in each
jurisdiction or place where the nature or location of its properties or the
conduct of its business requires such registration or qualification, except
where the failure so to register or qualify (i) would not have a material
adverse effect on the condition, financial or otherwise, or in the earnings,
business or operations of the Partnership Entities taken as a whole, and (ii)
would not subject the limited partners of the Partnership to any material
liability or disability.

(h) Synergy is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware with full corporate power
and authority to own or lease its properties and to conduct its business and to
act as a general partner of the Partnership and the Operating Partnership in
each case in all material respects as described in the Registration Statement
and the Prospectus, and Synergy is duly registered or qualified as a foreign
corporation to conduct its business and is in good standing in each jurisdiction
or place where the nature or location of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify (i) would not have a material adverse effect on the
condition, financial or otherwise, or in the earnings, business or operations of
the Partnership Entities taken as a whole, and (ii) would not subject the
limited partners of the Partnership to any material liability or disability.

(i) NGC is a corporation duly organized and validly existing in good
standing under the laws of the State of South Dakota, with full corporate power
and authority to perform the Transactions to which it is a party (the "NGC
Transactions").

(j) NPS is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware, with full corporate power and
authority to contribute the stock of Myers to NGC (the "NPS Transaction").

(k) At the Closing Date, neither the Managing General Partner, the
Special General Partner, the Partnership, the Operating Partnership nor the
Corporate Sub will have any subsidiaries (other than the Special General
Partner, the Partnership, the Operating Partnership and the Corporate Sub
themselves in their capacities as subsidiaries) which, individually or taken as
a whole, would be deemed to be a significant subsidiary (as such term is defined
in Section 1-02 of Regulation S-X of the Commission).

(l) The Managing General Partner is the sole managing general partner
of the Partnership with a ___% general partner interest in the Partnership; such
general partner interest is duly authorized by the Agreement of Limited
Partnership of the Partnership (as the same may be amended and restated as of
the Closing Date, the "Partnership Agreement") between Newco and NGC, as
organizational limited partner (the "Organizational Limited Partner"), and was
validly issued to the Managing General Partner; and the Managing General Partner
owns such managing

6
<PAGE>

general partner interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims, except as set forth in the
Partnership Agreement.

(m) The Managing General Partner is the sole managing general partner
of the Operating Partnership with a _____% general partner interest in the
Operating Partnership; such general partner interest is duly authorized by the
Agreement of Limited Partnership of the Operating Partnership (as the same may
be amended and restated as of the Closing Date, the "Operating Partnership
Agreement," and together with the Partnership Agreement, the "Partnership
Agreements") between Newco and the Partnership, and was validly issued to the
Managing General Partner; and the Managing General Partner owns such general
partner interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except as set forth in the Operating Partnership
Agreement.

(n) At the Closing Date, the Special General Partner will be the sole
special general partner of the Partnership with a ___% general partner interest
in the Partnership; such general partner interest will have been duly authorized
by the Partnership Agreement and will have been validly issued to the Special
General Partner; and the Special General Partner will own such general partner
interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except as set forth in the Partnership Agreement.

(o) At the Closing Date, the Special General Partner will be the sole
special general partner of the Operating Partnership with a ____% general
partner interest in the Operating Partnership; such general partner interest
will have been duly authorized by the Operating Partnership Agreement and will
have been validly issued to the Special General Partner; and the Special General
Partner will own such general partner interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims, except as set
forth in the Operating Partnership Agreement.

(p) At the Closing Date, the Managing General Partner will own
limited partner interests in the Partnership represented by ________
Subordinated Units and ______ Incentive Distribution Rights; at the Closing
Date, the Special General Partner will own limited partner interests in the
Partnership represented by ____ Subordinated Units and ______ Incentive
Distribution Rights; at the Closing Date, there will be issued to the
Underwriters the Firm Units (assuming no purchase by the Underwriters of
Additional Units); at the Closing Date or the Option Closing Date (as defined in
Section 4 hereof), as the case may be, the Firm Units or the Additional Units,
as the case may be, and the limited partner interests represented thereby will
be duly authorized by the Partnership Agreement and, when issued and delivered
to the Underwriters against payment therefor as provided herein, will be validly
issued, fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by matters
described in the Prospectus under the caption "The Partnership
Agreement--Limited Liability"); and other than such Subordinated Units and such
Incentive Distribution Rights owned by the Managing General Partner and the
Special General Partner at the Closing Date or the Option

<PAGE>

Closing Date, as the case may be, the Units will be the only limited partner
interests of the Partnership issued and outstanding.

(q) At the Closing Date and the Option Closing Date, (i) the
Partnership will be the sole limited partner of the Operating Partnership, with
a limited partner interest in the Operating Partnership of 98.9899%; (ii) such
limited partner interest will be duly authorized by the Operating Partnership
Agreement, will be validly issued in accordance with the Operating Partnership
Agreement and will be fully paid (to the extent required under the Operating
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by matters similar to those described in the Prospectus under the
caption "The Partnership Agreement--Limited Liability"); and (iii) the
Partnership will own such limited partner interest in the Operating Partnership
free and clear of all liens, encumbrances, security interests, equities, charges
or claims, except as set forth in the Operating Partnership Agreement.

(r) At the Closing Date and the Option Closing Date, all of the
outstanding shares of capital stock of Corporate Sub will have been duly
authorized and validly issued and will be fully paid and nonassessable; and all
of the issued shares of capital stock of Corporate Sub will be registered on its
books in the name of the Operating Partnership, free and clear of all liens,
encumbrances, security interests, equities, charges or claims, except pursuant
to the Note Agreement, the Security Agreement or the Bank Credit Agreement.

(s) All of the outstanding shares of capital stock of Newco have been
duly authorized and validly issued and are fully paid and nonassessable; and all
of the issued shares of capital stock of Newco are registered on its books in
the name of NGC free and clear of all liens, encumbrances, security interests,
equities, charges or claims.

(t) At the Closing Date and the Option Closing Date, all of the
outstanding shares of capital stock of Coast Gas will have been duly authorized
and validly issued and will be fully paid and nonassessable; and all of the
issued shares of capital stock of Coast Gas will be registered on its books in
the name of NGC, free and clear of all liens, encumbrances, security interests,
equities, charges or claims.

(u) At the Closing Date and the Option Closing Date, the outstanding
shares of capital stock of Synergy will consist of ______ shares of common
stock, all of which will have been duly authorized and validly issued and will
be fully paid and nonassessable; and _______ shares of common stock of Synergy
will be registered on its books in the name of Coast Gas, free and clear of all
liens, encumbrances, security interests, equities, charges or claims.

(v) Except as described in the Prospectus, there are no preemptive
rights or other rights to subscribe for or to purchase, nor any restriction upon
the voting or transfer of, any limited partner interests in the Partnership or
the Operating Partnership pursuant to either of the Partnership Agreements or
any agreement or other instrument to which the Partnership or the Operating
Partnership is a party or by which either of them may be bound. Except as
described in the

8
<PAGE>

Prospectus, there are no outstanding options or warrants to purchase any
Common Units or Subordinated Units. The Units, when issued and delivered
against payment therefor as provided herein, and the Subordinated Units, when
issued and delivered in accordance with the terms of the Partnership
Agreement and the Contribution Agreement, will conform in all material
respects to the descriptions thereof contained in the Prospectus. The
Partnership has all requisite power and authority to issue, sell and deliver
(i) the Units, in accordance with and upon the terms and conditions set forth
in this Agreement and in the Prospectus, and (ii) the Subordinated Units, in
accordance with the terms and conditions set forth in the Partnership
Agreement and the Contribution Agreement. At the Closing Date and the Option
Closing Date, all corporate and partnership action, as the case may be,
required to be taken by any of the Predecessor Entities, the Partnership
Entities, Newco, NGC and NPS or any of their shareholders or partners for the
authorization, issuance, sale and delivery of the Units and the Subordinated
Units and the consummation of the transactions (including the Transactions)
contemplated by this Agreement and the Operative Agreements (as defined in
Section 1(v) hereof) shall have been validly taken.

(w) This Agreement has been duly authorized, executed and delivered
by each of the Partnership, the Operating Partnership, the Managing General
Partner and Synergy.

(x) At or before the Closing Date, the Partnership Agreement will
have been duly authorized, executed and delivered by the Managing General
Partner, the Special General Partner and the Organizational Limited Partner and
will be a valid and legally binding agreement of the Managing General Partner,
the Special General Partner and the Organizational Limited Partner, enforceable
against the Managing General Partner, the Special General Partner and the
Organizational Limited Partner in accordance with its terms; at or before the
Closing Date, the Operating Partnership Agreement will have been duly
authorized, executed and delivered by the Managing General Partner, the Special
General Partner and the Partnership and will be a valid and legally binding
agreement of the Managing General Partner, the Special General Partner and the
Partnership, enforceable against the Managing General Partner, the Special
General Partner and the Partnership in accordance with its terms; at or before
the Closing Date, each of the Merger and Conveyance Documents will have been
duly authorized, executed and delivered by the parties thereto and, as
applicable, (i) will be a valid and legally binding agreement of the parties
thereto enforceable against such parties in accordance with its terms or (ii)
will have been duly filed with all appropriate state authorities and shall be in
full force and effect in accordance with its terms; at or before the Closing
Date, each of NGC and NPS will have taken all corporate action necessary to duly
authorize the NGC Transactions and the NPS Transaction, respectively, and such
authorizations shall remain in full force and effect; at or before the Closing
Date, the Senior Notes and the Note Agreement will have been duly authorized,
executed and delivered by the Operating Partnership and will be valid and
legally binding agreements of the Operating Partnership enforceable against the
Operating Partnership in accordance with their respective terms; at or before
the Closing Date, the Bank Credit Agreement will have been duly authorized,
executed and delivered by the Operating Partnership and will be a valid and
legally binding agreement of the Operating Partnership enforceable against the
Operating Partnership in accordance with its terms; provided that, with respect
to each agreement described in this Section 1(v), the enforceability thereof may
be limited

9
<PAGE>

by bankruptcy, insolvency, fraudulent transfer, reorganization, receivership,
moratorium and similar laws of general application relating to or affecting
creditors' rights generally and to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law), and provided further, that indemnification, contribution and
exoneration provisions provided in any such agreement may be limited by
public policy and applicable law relating to fiduciary duties. The
Partnership Agreements, the Merger and Conveyance Documents, the Senior
Notes, the Note Agreement, the Security Agreement and the Bank Credit
Agreement are herein collectively referred to as the "Operative Agreements."

(y) None of the offering, issuance and sale by the Partnership of the
Units, the offering, issuance and sale by the Operating Partnership of the
Senior Notes, the execution, delivery and performance of this Agreement and the
Operative Agreements by any of the Predecessor Entities, the Partnership
Entities or Newco which are parties thereto, nor the consummation of the
transactions contemplated hereby and thereby (including the Transactions) (i)
will conflict with or will constitute a violation of the agreement of limited
partnership, certificate or articles of incorporation or bylaws or other
organizational documents of any of the Predecessor Entities, the Partnership
Entities, Newco, NGC or NPS, (ii) will conflict with or will constitute a breach
or violation of, or a default (or an event which, with notice or lapse of time
or both, would constitute such an event) under any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which any of
the Predecessor Entities, the Partnership Entities, Newco, NGC or NPS is a
party or by which any of them or any of their respective properties may be
bound, (iii) violates or will violate any order, judgment, decree or injunction
of any court or governmental agency or body directed to any of the Predecessor
Entities, the Partnership Entities, Newco, NGC or NPS or any of their properties
in a proceeding to which any of them or their property is a party, (iv) violates
or will violate any statute, law or regulation applicable to any of the
Predecessor Entities, the Partnership Entities, Newco, NGC or NPS or any of
their respective properties, or (v) will result in the creation or imposition of
any lien, charge or encumbrance (except as contemplated by the Note Agreement
and the Bank Credit Agreement) upon any property or assets of any of the
Predecessor Entities, the Partnership Entities or Newco, in the case of clause
(ii), (iii), (iv) or (v) which conflicts, breaches, violations or defaults would
have a material adverse effect upon the condition, financial or otherwise, or in
the earnings, business or operations of the Partnership Entities taken as a
whole.

(z) No permit, consent, approval, authorization or order of any
court, governmental agency or body or financial institution is required in
connection with the execution and delivery of, or the consummation of the
transactions contemplated by, this Agreement or the Operative Agreements, or the
consummation by any of the Predecessor Entities, the Partnership Entities,
Newco, NGC or NPS of the Transactions, except (i) for such permits, consents,
approvals and similar authorizations required under the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
securities or "Blue Sky" laws of certain jurisdictions, (ii) for such permits,
consents, approvals and similar authorizations which have been, or on or prior
to the Closing Date will be, obtained, (iii) for such permits, consents,
approvals and similar authorizations which, if not obtained, would not,
individually or in the aggregate, have a material

10
<PAGE>

adverse effect upon the condition, financial or otherwise, or in the
earnings, business or operations of the Partnership Entities taken as a whole
and (iv) as set forth or contemplated in the Prospectus.

(aa) Except as described in the Prospectus, none of the Predecessor
Entities, the Partnership Entities, Newco, NGC and NPS is in (i) breach or
violation of the provisions of its certificate or articles of incorporation or
bylaws or other organizational documents, or of any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it or of any
decree of any court or governmental agency or body having jurisdiction over it,
or (ii) breach, default (and no event has occurred which, with notice or lapse
of time or both, would constitute such an event) or violation in the performance
of any term, covenant or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a party or
by which it is bound or to which any of its properties may be subject, which (x)
would have a material adverse effect on the condition, financial or otherwise,
or in the earnings, business or operations of the Partnership Entities taken as
a whole, (y) could impair the ability of the Predecessor Entities, the
Partnership Entities or Newco to perform their obligations under the Operative
Agreements or (z) could impair the ability of NGC to consummate the NGC
Transactions or the ability of NPS to consummate the NPS Transaction. To the
knowledge of the Partnership, the Operating Partnership, Newco and Synergy, no
third party to any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which any of the Predecessor Entities, the
Partnership Entities or Newco is a party or by which any of them is bound or to
which any of their properties is subject, is in default under any such
agreement, which breach, default or violation would, if continued, have a
material adverse effect on the condition, financial or otherwise, or in the
earnings, business or operations of the Partnership Entities taken as a whole.
Neither the conduct of the business currently operated by the Predecessor
Entities nor the conduct of the business as described or contemplated in the
Prospectus to be operated by the Partnership Entities immediately following the
Transactions violates or will violate any agreement limiting the ability of any
of the Predecessor Entities or any of the Partnership Entities to compete in
their businesses, including, without limitation, the Non-Competition Agreement
dated May 7, 1994 by and among Empire Gas Corporation, a Missouri corporation
("Empire Gas"), Empire Energy, Mr. Robert W. Plaster, Mr. Stephen R. Plaster,
Mr. Joseph Schaefer and Mr. Paul S. Lindsey, Jr. and the Management Agreement
dated May 17, 1995 among Empire Gas, NGC and Synergy, as amended, and as further
amended by the Termination Agreement among Empire Gas, NGC and Synergy dated
September 28, 1996 (collectively, the "Empire Non-Competition Agreements").

(bb) Arthur Andersen LLP, who have expressed their opinions on the pro
forma consolidated financial statements of the Partnership and the audited
consolidated financial statements of the Partnership, Newco and Synergy included
in the Registration Statement and the Prospectus, are independent public
accountants as required by the Securities Act and the rules and regulations
thereunder.

(cc) Baird, Kurtz & Dobson, who have expressed their opinions on the
audited consolidated financial statements of Empire Energy and Synergy Group,
Incorporated included in

<PAGE>

the Registration Statement and the Prospectus, are independent public
accountants as required by the Securities Act and the rules and regulations
thereunder.

(dd) Price Waterhouse LLP, who have expressed their opinion on the
audited consolidated financial statements of Coast included in the Registration
Statement and the Prospectus, are independent public accountants as required by
the Securities Act and the rules and regulations thereunder.

(ee) At September 30, 1996, the Partnership would have had, on the pro
forma basis indicated in the Prospectus, the capitalization set forth therein.
The financial statements (including the related notes and supporting schedules)
included in the Registration Statement and the Prospectus present fairly in all
material respects the financial position, results of operations and cash flows
of the entities purported to be shown thereby on the basis stated therein at the
respective dates or for the respective periods to which they apply and have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except to the extent
disclosed therein. The information set forth in the Registration Statement and
the Prospectus under the captions "Selected Pro Forma Financial and Operating
Data" and "Selected Historical Financial and Operating Data" is accurately
presented in all material respects and has been prepared on a basis consistent
with the unaudited pro forma financial statements and the audited and unaudited
historical consolidated financial statements from which it has been derived.
The pro forma financial statements of the Partnership included in the
Registration Statement and the Prospectus have been prepared in all material
respects in accordance with the applicable accounting requirements of Article 11
of Regulation S-X of the Commission; the assumptions used in the preparation of
such pro forma financial statements are, in the opinion of the management of the
Managing General Partner, reasonable; and the pro forma adjustments reflected in
such pro forma financial statements have been properly applied in all material
respects to the historical amounts in the compilation of such pro forma
financial statements.

(ff) Each of the Predecessor Entities has, and, upon consummation of
the Transactions, on the Closing Date each of the Operating Partnership and
Corporate Sub will have, good and marketable title in fee simple to all real
property and good title to all personal property described in the Prospectus to
be owned by it, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere with the use
made of such property by the Predecessor Entities and proposed to be made of
such property by the Partnership Entities; and all real property and buildings
held under lease by the Predecessor Entities and proposed to be held by the
Operating Partnership or the Corporate Sub are held by the Predecessor Entities,
and, upon consummation of the Transactions, on the Closing Date will be held by
the Operating Partnership or Corporate Sub under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made of such property and buildings by the Predecessor Entities and
proposed to be made of such property and buildings by the Partnership Entities,
in each case except as described in or contemplated by the Prospectus. The
Merger and Conveyance Documents will be, as of the Closing Date, legally
sufficient to transfer or convey to the Operating Partnership or

<PAGE>

Corporate Sub all properties that are, individually or in the aggregate,
required to enable the Operating Partnership or Corporate Sub to conduct its
operations (in all material respects as contemplated by the Prospectus),
subject to the conditions, reservations and limitations contained in the
Merger and Conveyance Documents and those set forth in the Prospectus. The
Operating Partnership and Corporate Sub will, upon execution, delivery and
effectiveness of the Merger and Conveyance Documents, succeed in all material
respects to the business, assets, properties, liabilities and operations
reflected by the pro forma financial statements of the Partnership, except as
disclosed in the Prospectus. On the Closing Date, each of the Northwestern
Mergers will have become effective.

(gg) Each of the Predecessor Entities possesses, and at the Closing
Date and the Option Closing Date each of the Partnership Entities will possess,
all certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct its business as
described in the Prospectus, including, without limitation, the business
currently conducted by CEG, except for such certificates, authorizations and
permits which, if not obtained, would not, individually or in the aggregate,
have a material adverse effect upon the ability of the Partnership Entities,
taken as a whole, to conduct their businesses as described in the Prospectus;
and none of the Predecessor Entities or the Partnership Entities has received
any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Partnership Entities, taken as a whole,
except as described in or contemplated by the Prospectus.

(hh) Each of the Predecessor Entities has filed all material tax
returns required to be filed through the date hereof, which returns are complete
and correct in all material respects, and has timely paid all taxes shown to be
due pursuant to such returns, other than those (i) which, if not paid, would not
have a material adverse effect on the condition, financial or otherwise, or in
the earnings, business or operations of the Partnership Entities taken as a
whole, or (ii) which are being contested in good faith.

(ii) Each of the Predecessor Entities owns or possesses, and at the
Closing Date and the Option Closing Date each of the Partnership Entities will
own, possess, have the right to use or be able to acquire on reasonable terms,
all material patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names currently employed by the Predecessor Entities in connection with
the business now operated by them other than those which if not so owned or
possessed would not have a material adverse effect on the condition, financial
or otherwise, or in the earnings, business or operations of the Partnership
Entities, taken as a whole; and none of the Predecessor Entities has received
any notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result

<PAGE>

in any material adverse change in the condition, financial or otherwise, or
in the earnings, business or operations of the Partnership Entities, taken as
a whole.

(jj) None of the Predecessor Entities, the Partnership Entities or
Newco, is now, or after sale of the Units to be sold by the Partnership
hereunder and application of the net proceeds from such sale as described in the
Prospectus under the caption "Use of Proceeds" will be, an "investment company"
or a company "controlled by" an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

(kk) After sale of the Units to be sold by the Partnership hereunder
and application of the net proceeds from such sale as described in the
Prospectus under the caption "Use of Proceeds," the Operating Partnership will
not be a "gas utility company" and none of the Partnership Entities, the
Managing General Partner or the Special General Partner will be a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or subject to regulation thereunder.

(ll) No material labor dispute with the employees of the Predecessor
Entities exists, except as described in or contemplated by the Prospectus, or,
to the knowledge of any of the Partnership, the Operating Partnership, Newco or
Synergy is imminent.

(mm) At each of the Closing Date and the Option Closing Date, as the
case may be, the Managing General Partner and the Special General Partner will
have (excluding their interests in the Partnership and the Operating Partnership
and any notes receivable from or payable to the Partnership or the Operating
Partnership) a combined net worth of at least $15 million. For purposes of this
representation, assets will be valued at fair market value, and the interests of
the Managing General Partner and the Special General Partner in the Partnership
and the Operating Partnership (as general partner, limited partner and creditor)
shall not be taken into account except as an offset to the Partnership's or the
Operating Partnership's liabilities that are taken into account in computing
such net worth.

(nn) Each of the offer, sale and issuance of the Subordinated Units to
the Managing General Partner and the Special General Partner pursuant to the
Contribution Agreement and the Partnership Agreement and the offer, sale and
issuance of the Senior Notes pursuant to the Note Agreement is exempt from the
registration requirements of the Securities Act and the securities laws of any
state having jurisdiction with respect thereto, and none of the Predecessor
Entities, the Partnership Entities, Newco, NGC and NPS has taken or will take
any action that would cause the loss of such exemption.

(oo) The Units have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.

(pp) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the

14
<PAGE>

earnings, business or operations of the Partnership Entities taken as a whole
from that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).

(qq) There are no legal or governmental proceedings pending or
threatened to which any of the Predecessor Entities or the Partnership Entities
is a party or to which any of the properties of the Predecessor Entities or the
Partnership Entities is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.

(rr) All of the Predecessor Entities and all of the Partnership
Entities (i) are in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect upon the condition,
financial or otherwise, or in the earnings, business or operations of the
Partnership Entities taken as a whole.

(ss) Each of the Predecessor Entities maintains insurance against such
losses and risks and in such amounts as is reasonably adequate to protect the
Partnership Entities, the Managing General Partner, the Special General Partner
and their businesses; none of the Predecessor Entities has within the last two
years been refused any insurance coverage sought or applied for; and none of the
Predecessor Entities has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), business or operations of the Partnership Entities
taken as a whole, except as described in or contemplated by the Prospectus.

(tt) Each of the Predecessor Entities maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(1) transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (3) access to assets
is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

15
<PAGE>

(uu) There are no contracts, agreements or understandings between any
of the Predecessor Entities, the Partnership Entities, Newco, NGC or NPS and any
person granting such person the right to require the Partnership to file a
registration statement under the Securities Act with respect to any securities
of the Partnership or to require the Partnership to include such securities with
the Units registered pursuant to the Registration Statement.

(vv) Each of the Predecessor Entities, the Partnership Entities and
Newco has complied with all provisions of Section 517.075, Florida Statutes
relating to issuers doing business with the Government of Cuba or with any
person or affiliate located in Cuba.

(ww) On the date hereof and at the Closing Date, (i) Richard R.
Hylland, Keith G. Baxter and Ronald J. Goedde will be duly qualified and acting
officers of Newco and (ii) Mr. Hylland, Mr. Baxter and Daniel K. Newell will be
members of the Board of Directors of Newco.

2. AGREEMENTS TO SELL AND PURCHASE. The Partnership hereby agrees
to sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Partnership the respective number of Firm Units set forth in Schedule I hereto
opposite its name, at $_________ a Unit (the "Purchase Price").

On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Partnership agrees to
sell to the Underwriters the Additional Units, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to 1,281,000
Additional Units at the Purchase Price. If you, on behalf of the Underwriters,
elect to exercise such option, you shall so notify the Partnership in writing
not later than 30 days after the date of this Agreement, which notice shall
specify the number of Additional Units to be purchased by the Underwriters and
the date on which such Units are to be purchased. Such date may be the same as
the Closing Date (as defined below) but not earlier than the Closing Date nor
later than ten business days after the date of such notice. Additional Units
may be purchased as provided in Section 4 hereof solely for the purpose of
covering over-allotments made in connection with the offering of the Firm Units.
If any Additional Units are to be purchased, each Underwriter agrees, severally
and not jointly, to purchase the number of Additional Units (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Units to be purchased as the
number of Firm Units set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Units.

Each of the Partnership, the Managing General Partner and the Special
General Partner hereby agrees that, without the prior written consent of Morgan
Stanley & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 180 days after the date of the Prospectus, (i) offer, issue,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, any Common
Units, Subordinated Units or any securities convertible into or exercisable or
exchangeable for Common Units or Subordinated Units

16
<PAGE>

or (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of the
Common Units or such other securities, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Units or
such other securities, in cash or otherwise. The foregoing sentence shall
not apply to (A) the Units to be sold hereunder, (B) the Subordinated Units
to be issued on the Option Closing Date as provided in the Partnership
Agreement, (C) issuances of Common Units pursuant to employee benefit plans
described in the Prospectus, (D) the issuance of Common Units in connection
with Acquisitions or Capital Improvements (each as defined in the Partnership
Agreement) or (E) the issuance of Common Units and Subordinated Units to the
Managing General Partner and the Special General Partner in connection with
the Transactions; provided that the Subordinated Units may be transferred
without such consent to an affiliate of the Managing General Partner who
agrees to be bound by the transfer restrictions contained in this paragraph.

3. TERMS OF PUBLIC OFFERING. The Partnership is advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Units as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Partnership is further
advised by you that the Units are to be offered to the public initially at
$_________ a Unit (the "Public Offering Price") and to certain dealers selected
by you at a price that represents a concession not in excess of $_________ a
Unit under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $__________ a Unit, to
any Underwriter or to certain other dealers.

4. PAYMENT AND DELIVERY. Payment for the Firm Units shall be made
to the Partnership in federal or other funds immediately available in New York
City against delivery of such Firm Units for the respective accounts of the
several Underwriters at 9:00 A.M., New York City time, on ___________, 1996, or
at such other time on the same or such other date, not later than __________,
1996, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date."

Payment for any Additional Units shall be made to the Partnership in
federal or other funds immediately available in New York City against delivery
of such Additional Units for the respective accounts of the several Underwriters
at 9:00 A.M., New York City time, on the date specified in the notice described
in Section 2 or at such other time on the same or on such other date, in any
event not later than ____________, 1996, as shall be designated in writing by
you. The time and date of such payment are hereinafter referred to as the
"Option Closing Date."

Certificates for the Firm Units and the Additional Units shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Units and the Additional Units shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Units to the Underwriters duly paid,
against payment of the Purchase Price therefor.

<PAGE>

5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations
of the Partnership to sell the Units to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Units on the
Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than 5:30 P.M., New York City time, on
the date hereof.

The several obligations of the Underwriters to purchase and pay for
the Units on the Closing Date are subject to the following further conditions:

(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Partnership
Entities taken as a whole from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and that makes it,
in your judgment, impracticable to market the Units on the terms and in the
manner contemplated in the Prospectus.

(b) The representations and warranties of the Partnership, the
Operating Partnership, the Managing General Partner and Synergy contained in
this Agreement shall be true and correct as of the Closing Date and the
Partnership, the Operating Partnership, the Managing General Partner and
Synergy shall have complied in all material respects with all of the
agreements and satisfied in all material respects all of the conditions on
their part to be performed or satisfied hereunder on or before the Closing
Date.

(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
each of the Managing General Partner and the Special General Partner, to the
effect set forth in clause (a)(i) and (b) above.

(d) The Underwriters shall have received on the Closing Date an
opinion of Andrews & Kurth L.L.P., special outside counsel for the
Partnership, the Operating Partnership, the Managing General Partner and the
Special General Partner, dated the Closing Date, to the effect that:

(i) Each of the Partnership and the Operating Partnership has been
duly formed and is validly existing in good standing as a limited
partnership under the Delaware Act with all necessary partnership power
and authority to own or lease its properties, to assume the liabilities
being assumed by it pursuant to the Operative Agreements and to conduct
its business, in each case in all material respects as described in the
Prospectus.

(ii) The Managing General Partner is the sole managing general
partner of the Partnership and the Operating Partnership with a general
partner interest in the Partnership of 0.7686% and a general partner
interest in the Operating Partnership of 0.7764%; such general partner
interests are duly authorized by the Partnership

<PAGE>

Agreement and the Operating Partnership Agreement, respectively, and were
validly issued.

(iii) The Special General Partner is the sole special general
partner of the Partnership and the Operating Partnership with a general
partner interest in the Partnership of 0.2314% and a general partner
interest in the Operating Partnership of 0.2337%; such general partner
interests are duly authorized by the Partnership Agreement and the
Operating Partnership Agreement, respectively, and were validly issued.

(iv) The 6,055,869 Subordinated Units and the 7,686 Incentive
Distribution Rights to be issued to the Managing General Partner and the
1,822,750 Subordinated Units and the 2,314 Incentive Distribution Rights
to be issued to the Special General Partner pursuant to the Contribution
Agreement and the Partnership Agreement and the limited partner
interests represented thereby are duly authorized by the Partnership
Agreement and, when issued and delivered pursuant to the terms of the
Contribution Agreement and the Partnership Agreement, will be validly
issued, fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be
affected by matters described in the Prospectus under "The Partnership
Agreement--Limited Liability").

(v) The Partnership is the sole limited partner of the Operating
Partnership, with a limited partner interest of 98.9899%; such limited
partner interest is duly authorized by the Operating Partnership
Agreement and is validly issued, fully paid (to the extent required
under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters similar to those described
in the Prospectus under the caption "The Partnership Agreement--Limited
Liability").

(vi) The 8,540,000 Common Units to be issued and sold to the
Underwriters by the Partnership pursuant to the Underwriting Agreement
and the limited partner interests represented thereby are duly
authorized by the Partnership Agreement and, when issued and delivered
against payment therefor as provided in the Underwriting Agreement, will
be validly issued, fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the Prospectus
under the caption "The Partnership Agreement--Limited Liability").

(vii) Other than the 6,055,869 Subordinated Units and the 7,686
Incentive Distribution Rights that will be owned by the Managing General
Partner and the 1,822,750 Subordinated Units and the 2,314 Incentive
Distribution Rights that will be owned by the Special General Partner,
the Firm Units will be the only limited

<PAGE>

partner interests of the Partnership issued at the Closing Date, unless
the Option Closing Date and the Closing Date are the same date.

(viii) The Partnership Agreement constitutes a valid and legally
binding agreement of the Managing General Partner, the Special General
Partner and the Organizational Limited Partner, enforceable against the
Managing General Partner, the Special General Partner and the
Organizational Limited Partner in accordance with its terms, except as
the enforceability thereof may be limited by (A) bankruptcy, insolvency,
fraudulent transfer, reorganization, receivership, moratorium and
similar laws of general application relating to or affecting creditors'
rights generally and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law) and (B) public policy, applicable law relating to fiduciary
duties and an implied covenant of good faith and fair dealing.

(ix) The Operating Partnership Agreement constitutes a valid and
legally binding agreement of the Managing General Partner, the Special
General Partner and the Partnership, enforceable against the Managing
General Partner, the Special General Partner and the Partnership in
accordance with its terms, except as the enforceability thereof may be
limited by (A) bankruptcy, insolvency, fraudulent transfer,
reorganization, receivership, moratorium and similar laws of general
application relating to or affecting creditors' rights generally and to
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and (B) public
policy, applicable law relating to fiduciary duties and an implied
covenant of good faith and fair dealing.

(x) The Managing General Partner owns its general partner
interests in the Partnership and the Operating Partnership, and will own
the 6,055,869 Subordinated Units and the 7,686 Incentive Distribution
Rights to be issued to it pursuant to the Partnership Agreement and the
Contribution Agreement, in each case free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of
which a financing statement under the Uniform Commercial Code of
California or Delaware naming the Managing General Partner as debtor is
on file in the office of the Secretary of State of the State of South
Dakota or Delaware as of a recent date or (B) otherwise known to such
counsel, without independent investigation, other than those created by
or arising under the Delaware Act or the Partnership Agreement.

(xi) The Special General Partner owns its general partner interest
in the Partnership and the Operating Partnership and will own the 2,314
Subordinated Units and the 1,822,750 Incentive Distribution Rights to be
issued to it pursuant to the Partnership Agreement and the Contribution
Agreement, in each case free and clear of all liens, encumbrances,
security interests, charges or claims (A) in respect of which a
financing statement under the Uniform Commercial Code of the State of

<PAGE>

Missouri or Delaware naming the Special General Partner as debtor is on
file in the office of the Secretary of State of the State of Missouri or
Delaware as of a recent date or (B) otherwise known to such counsel,
without independent investigation, other than those created by or
arising under the Delaware Act or the Partnership Agreement.

(xii) The Partnership owns its limited partner interest in the
Operating Partnership free and clear of all liens, encumbrances,
security interests, charges or claims (A) in respect of which a
financing statement under the Uniform Commercial Code of the State of
California or Delaware naming the Partnership as debtor is on file in
the office of the Secretary of State of the State of California or
Delaware as of a recent date or (B) otherwise known to such counsel,
without independent investigation, other than those created by or
arising under the Delaware Act or the Operating Partnership Agreement.

(xiii) The statements in the Registration Statement and Prospectus
under the captions "The Transactions," "Cash Distribution Policy" (other
than the table under the subsection "--Incentive
Distributions--Hypothetical Annualized Yield," as to which such counsel
need not express any opinion), "Cash Available for Distribution,"
"Conflicts of Interest and Fiduciary Responsibilities," "Description of
the Common Units," "The Partnership Agreement," "Units Eligible for
Future Sale" and "Underwriters" and in the Registration Statement in
Items 14 and 15, in each case insofar as such statements constitute
descriptions of the Operative Agreements or summaries of the legal
matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such Operative Agreements,
legal matters, documents and proceedings and fairly summarize the
matters referred to therein, and the Units and the Subordinated Units
conform in all material respects to the descriptions thereof contained
in the Registration Statement and Prospectus under the captions
"Prospectus Summary--Risk Factors--Risks Interest in an Investment in
the Partnership," "--Risk Factors--Conflicts of Interest and Fiduciary
Responsibilities," "--Cash Available for Distribution," "--Partnership
Structure and Management," "--The Offering," "Risk Factors--Risks
Inherent in an Investment in the Partnership," "--Conflicts of Interest
and Fiduciary Responsibilities," "Cash Distribution Policy," "Cash
Available for Distribution," "Conflicts of Interest and Fiduciary
Responsibilities," "Description of the Common Units," "The Partnership
Agreement" and "Units Eligible for Future Sale."

(xiv) None of the offering, issuance and sale by the Partnership
of the Units, the offering, issuance and sale by the Operating
Partnership of the Senior Notes, the execution, delivery and performance
of this Agreement and the Operative Agreements by any of the Predecessor
Entities, the Partnership Entities or Newco, which are parties thereto,
nor the consummation of the transactions contemplated hereby and thereby
(including the Transactions) (A) will constitute a violation of the

<PAGE>

agreement of limited partnership, certificate or articles of incorporation
or bylaws or other organizational documents of any of the Partnership
Entities, (B) will constitute a breach or violation of, or a default
under (or an event which, with notice or lapse of time or both, would
constitute such an event), any Operative Agreement or any other
agreement filed as an exhibit to the Registration Statement, (C) will
violate the Delaware Act or the Delaware General Corporation Law or (D)
will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any of the Partnership
Entities except as contemplated by the Note Agreement and the Bank
Credit Agreement.

(xv) No permit, consent, approval, authorization or order of any
federal or Delaware court, governmental agency or body is required in
connection with the execution and delivery of, or the consummation of
the transactions contemplated by, this Agreement or the issuance and
sale of the Common Units and the Subordinated Units under the
Partnership Agreement, except (A) for such permits, consents, approvals
and similar authorizations required under the Securities Act and the
Exchange Act, (B) as may be required under state securities or "Blue
Sky" laws, as to which such counsel need not express any opinion, (C)
for permits, consents, approvals and similar authorizations as may be
required by the Interstate Commerce Commission or the U.S. Department of
Transportation (or their successor agencies or departments, as the case
may be) or under the Public Utility Holding Company Act of 1935 or the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as to which such
counsel need not express any opinion, (D) for such permits, consents,
approvals and similar authorizations which have been obtained, (E) for
such permits, consents, approvals and similar authorizations which (1)
are of a routine or administrative nature, (2) need not be or are not
customarily obtained or made prior to the consummation of transactions
such as those contemplated hereby and (3) are expected in the reasonable
judgment of the Managing General Partner to be obtained in the ordinary
course of business subsequent to the consummation of the Transactions
and (F) as set forth or contemplated in the Prospectus.

(xvi) The opinion of Andrews & Kurth L.L.P. that is filed as
Exhibit 8.1 to the Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to them.

(xvii) The Registration Statement was declared effective under the
Securities Act on __________________, 1996; to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or threatened by the Commission; and any required filing of
the Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by such Rule.

<PAGE>

(xviii) Upon delivery to the Underwriters of certificates
evidencing the Units issued in the name of the Underwriters and payment
by the Underwriters of the purchase price for the Units, the
Underwriters will acquire the Units free of any adverse claim (as such
term is defined in Section 8-302 of the New York Uniform Commercial
Code), assuming that the Underwriters are acting in good faith and
without notice of any adverse claim.

(xix) Except as described in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any limited partner
interests pursuant to either of the Partnership Agreements. The
Partnership has all requisite power and authority to issue, sell and
deliver (A) the Units, in accordance with and upon the terms and
conditions set forth in this Agreement and in the Registration Statement
and Prospectus, and (B) the Subordinated Units, in accordance with the
terms and conditions set forth in the Contribution Agreement and the
Partnership Agreement.

(xx) The Units have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.

(xxi) The offer, sale and issuance of the Subordinated Units to
the Managing General Partner and the Special General Partner pursuant to
the Contribution Agreement and the Partnership Agreement are exempt from
the registration requirements of the Securities Act and the securities
laws of any state having jurisdiction with respect thereto.

(xxii) Such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for historical and pro forma financial
statements and schedules and other historical and pro forma financial
and statistical data included therein as to which such counsel need not
express any opinion) comply as to form in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder, (B) has no reason to believe that (except for
historical and pro forma financial statements and schedules and other
historical and pro forma financial and statistical data as to which such
counsel need not express any belief) the statements in the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective under the captions "Prospectus
Summary--Risk Factors--Risks Inherent in an Investment in the
Partnership," "--Risk Factors--Conflicts of Interest and Fiduciary
Responsibilities," "--Cash Available for Distribution," "--Partnership
Structure and Management," "--The Offering," "--Summary of Tax
Considerations," "Risk Factors--Risks Inherent in an Investment in the
Partnership," "--Conflicts of Interest and Fiduciary Responsibilities,"
"--Tax Risks," "The Transactions," "Use of Proceeds," "Cash Distribution
Policy" (other than the table under the subsection "--Incentive
Distributions--Hypothetical Annualized Yield," as to which such counsel
need not

<PAGE>

comment), "Cash Available for Distribution," "Conflicts of Interest and
Fiduciary Responsibilities," "Description of the Common Units," "The
Partnership Agreement," "Units Eligible for Future Sale," "Tax
Considerations" and "Investment in the Partnership by Employee Benefit
Plans" contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (C) has no reason to believe
that (except for historical and pro forma financial statements and
schedules and other historical and pro forma financial and statistical
data as to which such counsel need not express any belief) the
statements in the Prospectus under the captions "Prospectus
Summary--Risk Factors Risks Inherent in an Investment in the
Partnership," "--Risk Factors--Conflicts of Interest and Fiduciary
Responsibilities," "--Cash Available for Distribution," "--Partnership
Structure and Management," "--The Offering," "--Summary of Tax
Consideration," "Risk Factors--Risks Inherent in an Investment in the
Partnership," "--Conflicts of Interest and Fiduciary Responsibilities,"
"--Tax Risks," "The Transactions," "Use of Proceeds," "Cash Distribution
Policy" (other than the table under the subsection "--Incentive
Distributions--Hypothetical Annualized Yield," as to which such counsel
need not comment), "Cash Available for Distribution," "Conflicts of
Interest and Fiduciary Responsibilities," "Description of the Common
Units," "The Partnership Agreement," "Units Eligible for Future Sale,"
"Tax Considerations" and "Investment in the Partnership by Employee
Benefit Plans" contain any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.

(e) The Underwriters shall have received on the ng Date, an opinion of
Schiff Hardin & Waite, outside el for the Partnership, the Operating
Partnership, the ing General Partner and the Special General Partner, dated
losing Date, to the effect that:

(i) Coast Gas is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware, with full
corporate power and authority to own or lease its properties and to
conduct its business and to act as managing general partner of the
Partnership and of the Operating Partnership, in each case in all
material respects as described in the Registration Statement and the
Prospectus.

(ii) Synergy is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware, with full
corporate power and authority to own or lease its properties and to
conduct its business and to act as special general partner of the
Partnership and the Operating Partnership, in each case in all material
respects as described in the Registration Statement and the Prospectus.

<PAGE>

(iii) Corporate Sub is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware, with
full corporate power and authority to own or lease its properties and to
conduct its business as contemplated by the Registration Statement and
the Prospectus.

(iv) NGC is a corporation duly organized and validly existing in
good standing under the laws of the State of South Dakota, with full
corporate power and authority to perform the NGC Transactions.

(v) NPS is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware, with full
corporate power and authority to perform the NPS Transaction.

(vi) Each of the Partnership and the Operating Partnership is duly
qualified or registered as a foreign limited partnership for the
transaction of business under the laws of the states listed on Schedule
I to such opinion; and, to such counsel's knowledge, such jurisdictions
are the only jurisdictions in which the character of the business
conducted by the Partnership or the Operating Partnership or the
location of the properties owned or leased by it makes such
qualification or registration necessary (except where the failure to so
qualify or so register would not (A) have a material adverse effect on
the financial condition, business or results of operations of the
Partnership Entities taken as a whole or (B) subject the limited
partners of the Partnership to any material liability or disability).

(vii) Coast Gas is duly qualified or registered as a foreign
corporation for the transaction of business under the laws of the states
listed on Schedule II to such opinion; and to the knowledge of such
counsel, such jurisdictions are the only jurisdictions in which the
character of the business conducted by Coast Gas or the location of the
properties owned or leased by it makes such qualification or
registration necessary (except where the failure to so qualify or so
register would not (A) have a material adverse effect on the financial
condition, business or results of operations of the Partnership Entities
taken as a whole or (B) subject the limited partners of the Partnership
to any material liability or disability).

(viii) Synergy is duly qualified or registered as a foreign
corporation for the transaction of business under the laws of the states
listed on Schedule III to such opinion; and to the knowledge of such
counsel, such jurisdictions are the only jurisdictions in which the
character of the business conducted by Synergy or the location of the
properties owned or leased by it makes such qualification or
registration necessary (except where the failure to so qualify or so
register would not (A) have a material adverse effect on the financial
condition, business or results of operations of the Partnership Entities
taken as a whole or (B) subject the limited partners of the Partnership
to any material liability or disability).

<PAGE>

(ix) Corporate Sub is duly qualified or registered as a foreign
corporation for the transaction of business under the laws of the states
listed on Schedule IV to such opinion; and to the knowledge of such
counsel, such jurisdictions are the only jurisdictions in which the
character of the business conducted by Corporate Sub or the location of
the properties owned or leased by it makes such qualification or
registration necessary (except where the failure to so qualify or so
register would not (A) have a material adverse effect on the financial
condition, business or results of operations of the Partnership Entities
taken as a whole or (B) subject the limited partners of the Partnership
to any material liability or disability).

(x) All of the issued and outstanding shares of capital stock of
Coast Gas have been duly authorized and validly issued and are fully
paid and nonassessable and are owned by NGC free and clear of all liens,
encumbrances, security interests, charges or claims known to such
counsel, without independent investigation, other than those created by
or arising under the California Corporations Code.

(xi) The outstanding capital stock of Synergy consists of ______
shares of common stock, all of which have been duly authorized and
validly issued and are fully paid and nonassessable, ______ shares of
which are owned by the Managing General Partner free and clear of all
liens, encumbrances, security interests, charges or claims known to such
counsel, without independent investigation, other than those created by
or arising under the Delaware General Corporation Law.

(xii) All of the issued and outstanding shares of capital stock of
Corporate Sub have been duly authorized and validly issued and are fully
paid and nonassessable; and all of such shares are owned of record by
the Operating Partnership free and clear of all liens, encumbrances,
security interests, charges or claims known to such counsel, without
independent investigation, other than those created by or arising under
the Delaware General Corporation Law.

(xiii) This Agreement has been duly authorized, executed and
delivered by each of the Partnership, the Operating Partnership, the
Managing General Partner and Synergy.

(xiv) Each of the Merger and Conveyance Documents has been duly
authorized and validly executed and delivered by each of the
Partnership, the Operating Partnership, Newco and Synergy, to the extent
a party thereto; each of the Merger and Conveyance Documents
constitutes the valid and legally binding agreement of the parties
thereto, enforceable against such parties in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws relating to or affecting creditors' rights
generally and to general principles of equity (regardless of whether
such enforceability is

<PAGE>

considered in a proceeding in equity or at law). Each of the
Northwestern Mergers has become effective.

(xv) Each of NGC and NPS has taken all corporate action necessary
to duly authorize the NGC Transactions and the NPS Transaction,
respectively, and such authorizations remain in full force and effect.

(xvi) The Senior Notes, the Note Agreement and the Security
Agreement have been duly authorized and validly executed and delivered
by the Operating Partnership; and the Senior Notes, the Note Agreement
and the Security Agreement constitute valid and legally binding
agreements of the Operating Partnership, enforceable against the
Operating Partnership in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws relating to or affecting creditors' rights generally
and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

(xvii) The Bank Credit Agreement has been duly authorized and
validly executed and delivered by the Operating Partnership; and the
Bank Credit Agreement constitutes a valid and legally binding agreement
of the Operating Partnership, enforceable against the Operating
Partnership in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws relating to or affecting creditors' rights generally and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

(xviii) The statements in the Registration Statement and the
Prospectus under the captions "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Description of
Indebtedness," "Business and Properties--Government Regulation,"
"Business and Properties--Transfer of the Partnership Assets," "Certain
Relationships and Related Transactions--Contribution and Conveyance
Agreement," insofar as they constitute descriptions of the Operative
Agreements or refer to statements of law or legal conclusions, are
accurate and complete in all material respects.

(xix) After due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which any of the
Predecessor Entities or the Partnership Entities is a party or to which
any of the properties of any of the Predecessor Entities or the
Partnership Entities is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that are not
described or filed as required.

<PAGE>

(xx) To the knowledge of such counsel, other than as described or
contemplated in the Prospectus, there is no litigation, proceeding or
governmental investigation pending or overtly threatened against any of
Synergy, Empire Energy, Coast and Coast Gas (the "Material Predecessor
Entities"), the Partnership Entities, Newco, NGC or NPS that relates to
any of the transactions contemplated by the Prospectus or which, if
adversely determined, (x) would have a material adverse effect on the
financial condition, business or results of operations of the
Partnership Entities taken as a whole, (y) would impair or call into
question the validity of this Agreement or the performance by any of the
Partnership Entities or Newco of their obligations under this Agreement,
any of the Operative Agreements or the Transactions or, (z) would impair
or call into question the performance by NGC or NPS of the NGC
Transactions or the NPS Transaction, respectively.

(xxi) None of the Partnership Entities or Newco is now, or after
sale of the Units to be sold by the Partnership hereunder and
application of the net proceeds from such sale as described in the
Prospectus under the caption "Use of Proceeds" none of them will be, an
"investment company" or a company "controlled by" an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.

(xxii) After sale of the Units to be sold by the Partnership
hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds," the
Operating Partnership will not be a "gas utility company" and none of
the Partnership Entities, the Managing General Partner or the Special
General Partner will be a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or subject to
regulation thereunder.

(xxiii) The consummation of the Transactions is not subject to any
further pre-merger notification and waiting period requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976.

(xxiv) None of the offering, issuance and sale by the Partnership
of the Units, the offering, issuance and sale by the Operating
Partnership of the Senior Notes, the execution, delivery and performance
of this Agreement and the Operative Agreements by any of the Material
Predecessor Entities, the Partnership Entities, Newco, NGC or NPS which
are parties thereto, nor the consummation of the transactions
contemplated hereby and thereby (including the Transactions) (A) will
constitute a violation of the certificate or articles of incorporation
or bylaws or other organizational documents of any of the Material
Predecessor Entities, Newco, NGC or NPS, (B) will constitute a breach or
violation of, or a default under (or an event which, with notice or
lapse of time or both, would constitute such an event), any indenture,
mortgage, deed of trust, loan agreement or

<PAGE>

other material agreement or instrument (other than the Operative
Agreements) known to such counsel to which any of the Material
Predecessor Entities, the Partnership Entities, Newco, NGC or NPS is a
party or by which any of them or any of their respective properties may
be bound, (C) will violate any order, judgment, decree or injunction of
any court or governmental agency or body known to such counsel directed
to any of the Material Predecessor Entities, the Partnership Entities,
Newco, NGC or NPS or any of their properties in a proceeding to which
any of the Material Predecessor Entities, the Partnership Entities,
Newco, NGC or NPS or their property is a party, (D) violates or will
violate any federal statute, law or regulation applicable to any of the
Material Predecessor Entities or any of their respective properties, (E)
violates or will violate the South Dakota Public Utilities Act or (F)
will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any of the Partnership
Entities except as contemplated by the Note Agreement and the Bank
Credit Agreement.

(xxv) No permit, consent, approval, authorization or order of any
federal or South Dakota court, governmental agency or body or any
financial institution is required in connection with the execution and
delivery of, or the consummation of the transactions contemplated by,
this Agreement or the Operative Agreements or the consummation by the
Material Predecessor Entities, the Partnership Entities, Newco, NGC or
NPS of the Transactions, except (A) as may be required under state
securities or "Blue Sky" laws, as to which such counsel need not express
any opinion, (B) for such permits, consents, approvals and similar
authorizations which have been obtained, (C) for such permits, consents,
approvals and similar authorizations which (1) are of a routine or
administrative nature, (2) need not be or are not customarily obtained
or made prior to the consummation of transactions such as those
contemplated hereby and by the Operative Agreements and (3) are expected
in the reasonable judgment of the Managing General Partner to be
obtained in the ordinary course of business subsequent to the
consummation of the Transaction and (D) as set forth or contemplated in
the Prospectus.

(xxvi) Except as described in the Prospectus, to the knowledge of
such counsel, none of the Material Predecessor Entities, Newco, NGC and
NPS was immediately prior to the Transactions, and none of the
Partnership Entities, Newco, NGC and NPS is, in (A) breach or violation
of the provisions of its certificate or articles of incorporation or
bylaws or other organizational documents or (B) breach, default (and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default) or violation in the due performance of any
term, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties are subject, which (x) would have a material adverse effect
on the financial condition, business or results of operations of the
Partnership

<PAGE>

Entities taken as a whole, (y) could impair the ability of any of the
Partnership Entities or Newco to perform their obligations under the
Operative Agreements, or (z) could impair the ability of NGC to
consummate the NGC Transactions or the ability of NPS to consummate the
NPS Transaction. The conduct of the business as described or
contemplated in the Prospectus to be operated by the Partnership
Entities immediately following the Transactions does not and will not
violate any agreement limiting the ability of any of the Partnership
Entities to compete in their businesses, including, without limitation,
the Empire Non-Competition Agreements.

(xxvii) Each of the Partnership Entities possesses all
certificates, authorizations and permits issued by the appropriate
federal regulatory authorities necessary to conduct its business as
described in the Prospectus, including, without limitation, the business
conducted by CEG prior to consummation of the Transactions.

(xxviii) Except as described in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any limited partner
interests in the Partnership or the Operating Partnership or shares of
capital stock of the Managing General Partner or the Special General
Partner pursuant to the certificate of incorporation or bylaws of the
Managing General Partner or the Special General Partner or, to the
knowledge of such counsel, pursuant to any agreement or instrument to
which any Northwestern Entity, any Northwestern Party or any Partnership
Entity is a party or by which any of them may be bound. To such
counsel's knowledge, neither the filing of the Registration Statement
nor the offering or sale of the Units as contemplated hereby gives rise
to any rights for or relating to the registration of any Units or other
securities of the Partnership. To such counsel's knowledge, except as
disclosed in the Prospectus, there are no outstanding options or
warrants to purchase any Units or Subordinated Units or other
partnership interests in the Partnership or the Operating Partnership.
All corporate and partnership action required to be taken by the
Material Predecessor Entities, the Partnership Entities, Newco, NGC, NPS
and their shareholders or partners for the authorization, issuance, sale
and delivery of the Units and Subordinated Units and the consummation of
the transactions contemplated hereby and by the Operative Agreements
(including the Transactions) has been validly taken.

(xxix) Such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and schedules
and other financial and statistical data included therein as to which
such counsel need not express any opinion) comply as to form in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (B) has no reason to believe
that (except for financial statements and schedules and other financial
and statistical data as to which such counsel need not express any
belief) the Registration Statement and the prospectus included therein
at the time the Registration Statement

<PAGE>

became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (C) has no
reason to believe that (except for financial statements and schedules
and other financial and statistical data as to which such counsel need
not express any belief) the Prospectus contains any untrue statement of
a material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.

You shall also have received on the Closing Date, a copy of the
opinion of Schiff Hardin & Waite delivered pursuant to the Note Agreement,
substantially in the form of Exhibit ___ attached to the Note Agreement,
accompanied by a letter dated the Closing Date and addressed to you from such
counsel stating that you are entitled to rely on the opinion expressed in
paragraph ___ of such opinion as if it were addressed to you.

(f) The Underwriters shall have received on the Closing Date, an
opinion or opinions of outside counsel to the Partnership, the Operating
Partnership, Newco and Synergy in each of the States of Alabama, Arkansas,
California, Florida, Kentucky, Mississippi, Missouri, New York and Tennessee,
dated the Closing Date, to the effect that:

(i) Each of the Partnership, the Operating Partnership, the
Managing General Partner, the Special General Partner and Corporate Sub
has been duly qualified or registered, to the extent required in such
state, as a foreign limited partnership or a foreign corporation, as the
case may be, for the transaction of business under the laws of such
state.

(ii) The Operating Partnership has all requisite partnership power
and authority under the laws of such state to own or lease its
properties and to conduct its business in such state; Corporate Sub has
all requisite corporate power and authority under the laws of such state
to own or lease its properties and to conduct its business in such
state; and upon the consummation of the Transactions, assuming that the
Partnership will not be liable under the laws of the State of Delaware
for the liabilities of the Operating Partnership and assuming that the
Unitholders will not be liable under the laws of the State of Delaware
for liabilities of the Partnership or the Operating Partnership, the
Partnership will not be liable as a limited partner under the laws of
such state for the liabilities of the Operating Partnership, and the
Unitholders will not be liable as limited partners under the laws of
such state for the liabilities of the Partnership or the Operating
Partnership, except in each case to the same extent as under the laws of
the State of Delaware.

(iii) The execution, delivery and performance of the Merger and
Conveyance Documents relating to the transfer of property in such state
or the merger of one or more entities organized under the laws of such
state in accordance

<PAGE>

with the terms thereof will not violate any statute of such state or any
rule, regulation or, to the knowledge of such counsel, any order of any
agency of such state having jurisdiction over any of the Predecessor
Entities, the Partnership Entities, Newco or any of their respective
properties, except for any such violations which, individually or in the
aggregate, would not have a material adverse effect upon the holders of
Common Units or upon the operations to be conducted in such state by the
Partnership Entities taken as a whole.

(iv) Each of the Merger and Conveyance Documents relating to the
transfer of property in such state or the merger of one or more entities
organized under the laws of such state, assuming the due authorization,
execution and delivery thereof by the parties thereto and assuming such
Merger and Conveyance Documents are governed by the laws of such state
notwithstanding any choice of law provisions thereof, is a valid and
legally binding agreement of the parties thereto under the laws of such
state, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general application relating to or affecting creditors' rights
generally and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law);
each of such Merger and Conveyance Documents is in a form legally
sufficient as between the parties thereto to convey to the transferee
thereunder all of the right, title and interest of the transferor stated
therein in and to the properties located in such state, as described in
such Merger and Conveyance Documents, subject to the conditions,
reservations and limitations contained in such Merger and Conveyance
Documents, except motor vehicles or other property requiring conveyance
of certificated title as to which such Merger and Conveyance Documents
are legally sufficient to compel delivery of such certificated title.

(v) Each of the deeds and assignments (including, without
limitation, the form of the exhibits and schedules thereto) relating to
the transfer of property in such state is in a form legally sufficient
for recordation in the appropriate public offices of such state, to the
extent such recordation is required, and, upon proper recordation of any
of such deeds and assignments in such state, will constitute notice to
all third parties under the recordation statutes of such state
concerning record title to the assets transferred thereby; recordation
in the office of the County Clerk for each county in which the Operating
Partnership or Corporate Sub owns property is the appropriate public
office in such state for the recordation of deeds and assignments of
interests in real property located in such county.

(vi) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body of such state
having jurisdiction over any of the Predecessor Entities, Partnership
Entities or Newco, as the case may be, or any of their respective
properties is required for the issue and sale of the Units by the
Partnership or for the conveyance of the properties located in such

<PAGE>

state purported to be conveyed to the Operating Partnership or Corporate
Sub pursuant to the Merger and Conveyance Documents, except (A) such
permits, consents, approvals and similar authorizations required under
the Act and the securities or "Blue Sky" laws of such state, (B) such
permits, consents, approvals and similar authorizations which have been
obtained, (C) such permits, consents, approvals and similar
authorizations which (1) are of a routine or administrative nature, (2)
need not be or are not customarily obtained or made prior to the
consummation of transactions such as those contemplated hereby and by
the Merger and Conveyance Documents and (3) are expected in the
reasonable judgment of such counsel to be obtained in the ordinary
course of business subsequent to the consummation of the Transactions or
(D) such permits, consents, approvals and similar authorizations which,
if not obtained, would not, individually or in the aggregate, have a
material adverse effect upon the operations to be conducted in such
state by the Partnership Entities taken as a whole.

(vii) The Predecessor Entities and the Partnership Entities
possess all certificates, authorizations or permits issued by the
appropriate state regulatory agencies or bodies necessary to conduct the
business currently (or, as described or contemplated in the Prospectus,
to be) operated by them, except (A) with respect to the Partnership, the
Operating Partnership and Corporate Sub for such certificates,
authorizations or permits which (1) are of a routine or administrative
nature, (2) need not be or are not customarily obtained or made prior to
the consummation of transactions such as those contemplated hereby and
by the Merger and Conveyance Documents and (3) are expected in the
reasonable judgment of such counsel to be obtained in the ordinary
course of business subsequent to the consummation of the Transactions
and (B) such certificates, authorizations or permits which would not,
individually or in the aggregate, have a material adverse effect upon
the operations to be conducted in such state by the Partnership Entities
taken as a whole.

(g) The Underwriters shall have received on the Closing Date an
opinion of Baker & Botts, L.L.P., counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in subparagraphs (vi) and
(xiii) (but only as to the statements in the Prospectus under "Cash
Distribution Policy," "Cash Available for Distribution," "Conflicts of
Interest and Fiduciary Responsibilities," "Description of the Common Units,"
"The Partnership Agreement," "Units Eligible for Future Sale" and
"Underwriters") of paragraph (d) above and subparagraphs (xi) and (xxvi) of
paragraph (e) above.

With respect to subparagraph (xxii) of paragraph (d) above and
subparagraph (xxvi) of paragraph (e) above, Baker & Botts, L.L.P., Andrews &
Kurth L.L.P. and Schiff Hardin & Waite may state that their opinion and
belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.

<PAGE>

The opinions described in paragraphs (d), (e) and (f) above shall
be rendered to the Underwriters at the request of the Partnership and shall
so state therein.

(h) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from each of Arthur Andersen LLP, Baird, Kurtz & Dobson and
Price Waterhouse LLP, independent public accountants, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus; provided that the letters delivered on the Closing Date shall use
a "cut-off date" not earlier than the date hereof.

(i) The Units shall have been approved for listing on the New York
Stock Exchange.

(j) Acquisition Corp. shall have merged with and into Coast in
accordance with the terms of the Stock Purchase and Merger Agreement dated
September 4, 1996 among NGC, Acquisition Corp., Coast and the holders of all
of the preferred stock of Coast.

(k) Prior to or simultaneously with the sale of the Units on the
Closing Date, the Northwestern Mergers shall have been consummated.

(l) Simultaneously with the sale of the Units on the Closing Date,
(i) the closing of the offering of the Senior Notes shall have occurred on
the basis set forth in the Prospectus and (ii) the Bank Credit Agreement
shall have been executed and delivered and become effective in substantially
the form filed as an exhibit to the Registration Statement.

(m) Prior to or simultaneously with the sale of the Units on the
Closing Date, the conveyance of the Transferred Assets to the Operating
Partnership shall have been consummated.

The several obligations of the Underwriters to purchase Additional
Units hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the Partnership, the due authorization and issuance of the
Additional Units and other matters related to the issuance of the Additional
Units and the satisfaction of the foregoing conditions to the several
obligations of the Underwriters to purchase and pay for the Units on the
Closing Date (other than paragraph (f)), except that all references to the
Firm Units and the Closing Date shall be deemed to refer to the Additional
Units and the Option Closing Date, respectively.

<PAGE>

6. COVENANTS OF THE PARTNERSHIP. In further consideration of the
agreements of the Underwriters herein contained, each of the Partnership, the
Operating Partnership, the Managing General Partner and Synergy covenants
with each Underwriter as follows:

(a) To furnish to you, without charge, three signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge,
prior to 5:00 P.M., New York City time, on the business day next succeeding
the date of this Agreement and during the period mentioned in paragraph (c)
below, as many copies of the Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request;
provided that if such request is made nine months or more after the effective
date of the Registration Statement, you shall pay the expenses of providing
such copies.

(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.

(c) If, at any time prior to the expiration of nine months after
the effective date of the Registration Statement when, in the opinion of
counsel for the Underwriters the Prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, any event
shall occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and addresses
you will furnish to the Partnership) to which Units may have been sold by you
on behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading
or so that the Prospectus, as amended or supplemented, will comply with law;
and, in case any Underwriter is required to deliver the Prospectus nine
months or more after the effective date of the Registration Statement, the
Partnership upon the request of the Representatives and at the expense of
such Underwriter will prepare promptly such amendment or supplement to the
Prospectus as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Securities Act.

(d) To endeavor to qualify the Units for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; PROVIDED, HOWEVER, that neither the Partnership, the Managing
General Partner nor Synergy shall be required to qualify to do business or to
file a general consent to service of process in any such jurisdictions.

<PAGE>

(e) To make generally available to the Partnership's security
holders and to you as soon as practicable an earnings statement covering the
twelve-month period ending December 31, 1997 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.

(f) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Partnership's counsel and the Partnership's accountants in connection with
the registration and delivery of the Units under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any Preliminary Prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove specified,
(ii) all costs and expenses related to the transfer and delivery of the Units
to the Underwriters, including any transfer or other taxes payable thereon,
(iii) the cost of printing or producing any Blue Sky or Legal Investment
memorandum in connection with the offer and sale of the Units under state
securities laws and all expenses in connection with the qualification of the
Units for offer and sale under state securities laws as provided in Section
6(d) hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all filing
fees and disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Units by the
National Association of Securities Dealers, Inc., (v) all fees and expenses
in connection with the preparation and filing of the registration statement
on Form 8-A relating to the Common Units and all costs and expenses incident
to listing the Units on the New York Stock Exchange, (vi) the cost of
printing certificates representing the Units, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) the costs and expenses of
the Partnership relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Units,
including, without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of the
Partnership, travel and lodging expenses of the representatives and officers
of the Partnership and any such consultants, and the cost of any aircraft
chartered in connection with the road show, and (ix) all other costs and
expenses incident to the performance of the obligations of the Partnership
hereunder for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 7
entitled "Indemnity and Contribution," and the last paragraph of Section 9
below, the Underwriters will pay all of their costs and expenses, including
fees and disbursements of their counsel, stock transfer taxes payable on
resale of any of the Units by them and any advertising expenses connected
with any offers they may make. Notwithstanding anything to the contrary
provided in the foregoing, each of the parties to this Agreement shall bear
its own expenses in connection with road show presentations.

(g) To cause the Predecessor Entities, the Partnership Entities
and the Managing General Partner to accomplish or obtain, as soon as
practicable, all consents, recordings and filings

<PAGE>

necessary to perfect, preserve and protect the title of the Operating
Partnership and Corporate Sub to the properties and assets owned by them as a
result of the Transactions.

(h) The Partnership Entities, the Managing General Partner and the
Special General Partner will use the net proceeds received by them from the
sale of the Units and the Senior Notes in the manner specified in the
Prospectus under "Use of Proceeds."

7. INDEMNITY AND CONTRIBUTION. (a) Each of the Partnership, the
Operating Partnership and the Managing General Partner, jointly and
severally, agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Partnership shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement
or omission (i) based upon information relating to any Underwriter furnished
to the Partnership in writing by such Underwriter through you expressly for
use therein; PROVIDED, HOWEVER, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages
or liabilities purchased Units, or any person controlling such Underwriter,
if a copy of the Prospectus (as then amended or supplemented if the
Partnership shall have furnished any amendments or supplements thereto) was
not sent or given by or on behalf of such Underwriter to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Units to such person, and if the Prospectus
(as so amended or supplemented) would have cured the defect giving rise to
such losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Partnership with Section 6(a) hereof.

(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Partnership, the Operating Partnership and
the Managing General Partner, their respective directors and officers who
sign the Registration Statement and each person, if any, who controls the
Partnership within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Partnership, the Operating Partnership and the Managing General
Partner to such Underwriter, but only with reference to information relating
to such Underwriter furnished to the Partnership in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.

<PAGE>

(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraph (a) or (b) of this Section 7,
such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying
party shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties and
that all such fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated, in the case of parties indemnified pursuant to paragraph (a) of
this Section 7, and by the Managing General Partner, in the case of parties
indemnified pursuant to paragraph (b) of this Section 7. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be
a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of
any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

(d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in
lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Partnership, the
Operating Partnership and the Managing General Partner on the one hand and
the Underwriters on the other hand from the offering of the Units or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Partnership, the Operating Partnership and the Managing General Partner on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received

<PAGE>

by the Partnership, the Operating Partnership and the Managing General
Partner on the one hand and the Underwriters on the other hand in connection
with the offering of the Units shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Units (before
deducting expenses) received by the Partnership and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate
Public Offering Price of the Units. The relative fault of the Partnership,
the Operating Partnership and the Managing General Partner on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Partnership, the Operating Partnership
and the Managing General Partner or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in
proportion to the respective number of Units they have purchased hereunder,
and not joint.

(e) The Partnership, the Operating Partnership and the Managing
General Partner and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) of this Section 7.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Units underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in
this Section 7 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.

(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Partnership, the Operating Partnership, the Managing General Partner and
Synergy contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Partnership, the
Operating Partnership, the Managing General Partner and Synergy, the
respective officers or directors or any person controlling the Partnership
and (iii) acceptance of and payment for any of the Units.

<PAGE>

8. TERMINATION. This Agreement shall be subject to termination
by notice given by you to the Partnership, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date, (i) trading
generally shall have been suspended or materially limited on or by, as the
case may be, any of the New York Stock Exchange, the American Stock Exchange,
the National Association of Securities Dealers, Inc., the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade, (ii) trading of any securities of the Partnership or NPS shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have
been declared by either federal or New York State authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change
in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event, singly or together with any other
such event, makes it, in your judgment, impracticable to market the Units on
the terms and in the manner contemplated in the Prospectus.

9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.

If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase
Units that it has or they have agreed to purchase hereunder on such date, and
the aggregate number of Units which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Units to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions that
the number of Firm Units set forth opposite their respective names in
Schedule I bears to the aggregate number of Firm Units set forth opposite the
names of all such nondefaulting Underwriters, or in such other proportions as
you may specify, to purchase the Units which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Units that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 9
by an amount in excess of one-ninth of such number of Units without the
written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Units and
the aggregate number of Firm Units with respect to which such default occurs
is more than one-tenth of the aggregate number of Firm Units to be purchased,
and arrangements satisfactory to you and the Partnership for the purchase of
such Firm Units are not made within 48 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Partnership. In any such case either you or the
Partnership shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and in the Prospectus or in any other documents
or arrangements may be effected. If, on the Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional Units
and the aggregate number of Additional Units with respect to which such
default occurs is more than one-tenth of the aggregate number of Additional
Units to be purchased, the nondefaulting Underwriters shall have the option
to (i) terminate their obligation hereunder to purchase Additional Units or
(ii) purchase not less than the number of Additional Units that such
nondefaulting Underwriters would have been obligated to

<PAGE>

purchase in the absence of such default. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.

If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Partnership,
the Operating Partnership, the Managing General Partner or Synergy to comply
with the terms or to fulfill any of the conditions of this Agreement, or if
for any reason the Partnership, the Operating Partnership, the Managing
General Partner or Synergy shall be unable to perform their obligations under
this Agreement, the Partnership, the Operating Partnership, the Managing
General Partner and Synergy will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.

10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.

12. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.

Very truly yours,

CORNERSTONE PROPANE PARTNERS, L.P.

By Cornerstone Propane GP, Inc.,
its Managing General Partner

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

<PAGE>

CORNERSTONE PROPANE, L.P.

By Cornerstone Propane GP, Inc.,
its Managing General Partner

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

CORNERSTONE PROPANE GP, INC.

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

SYN INC.

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

<PAGE>

Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Oppenheimer & Co., Inc.
PaineWebber Incorporated
Prudential Securities Incorporated

Acting severally on behalf
of themselves and the several
Underwriters named herein.

By Morgan Stanley & Co. Incorporated

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

<PAGE>

SCHEDULE I

<TABLE>
<CAPTION>
Number of
Firm Units
Underwriter To Be Purchased
----------- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated................
Dean Witter Reynolds Inc. .......................
A.G. Edwards & Sons, Inc. .......................
Oppenheimer & Co., Inc. .........................
PaineWebber Incorporated.........................
Prudential Securities Incorporated...............
---------------
Total........................................ 8,540,000
---------------
---------------
</TABLE>

<PAGE>

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

DRAFT 12/4/96

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

CORNERSTONE PROPANE, L.P.

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

<PAGE>

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

SECTION 1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . .11

ARTICLE II

ORGANIZATION

SECTION 2.1 FORMATION. . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 2.2 NAME . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 2.3 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE;
OTHER OFFICES. . . . . . . . . . . . . . . . . . . . . . .12
SECTION 2.4 PURPOSE AND BUSINESS . . . . . . . . . . . . . . . . . . .12
SECTION 2.5 POWERS . . . . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 2.6 POWER OF ATTORNEY. . . . . . . . . . . . . . . . . . . . .13
SECTION 2.7 TERM . . . . . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 2.8 TITLE TO PARTNERSHIP ASSETS. . . . . . . . . . . . . . . .15

ARTICLE III

RIGHTS OF LIMITED PARTNERS

SECTION 3.1 LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . .15
SECTION 3.2 MANAGEMENT OF BUSINESS . . . . . . . . . . . . . . . . . .15
SECTION 3.3 OUTSIDE ACTIVITIES OF THE LIMITED PARTNERS . . . . . . . .16
SECTION 3.4 RIGHTS OF LIMITED PARTNERS . . . . . . . . . . . . . . . .16

ARTICLE IV

TRANSFER OF PARTNERSHIP INTERESTS

SECTION 4.1 TRANSFER GENERALLY . . . . . . . . . . . . . . . . . . . .17
SECTION 4.2 TRANSFER OF A GENERAL PARTNER'S PARTNERSHIP INTEREST . . .17
SECTION 4.3 TRANSFER OF THE LIMITED PARTNERS' PARTNERSHIP INTERESTS. .18
SECTION 4.4 RESTRICTIONS ON TRANSFERS. . . . . . . . . . . . . . . . .18

<PAGE>

ARTICLE V

CONTRIBUTIONS AND INITIAL TRANSFERS

SECTION 5.1 INITIAL CONTRIBUTIONS. . . . . . . . . . . . . . . . . . .18
SECTION 5.2 CONTRIBUTIONS AND INITIAL TRANSFERS BY THE GENERAL
PARTNERS AND THEIR AFFILIATES. . . . . . . . . . . . . . .19
SECTION 5.3 ADDITIONAL CAPITAL CONTRIBUTIONS . . . . . . . . . . . . .19
SECTION 5.4 INTEREST AND WITHDRAWAL. . . . . . . . . . . . . . . . . .19
SECTION 5.5 CAPITAL ACCOUNTS . . . . . . . . . . . . . . . . . . . . .20
SECTION 5.6 LOANS FROM PARTNERS. . . . . . . . . . . . . . . . . . . .23
SECTION 5.7 LIMITED PREEMPTIVE RIGHTS. . . . . . . . . . . . . . . . .23
SECTION 5.8 FULLY PAID AND NON-ASSESSABLE NATURE OF LIMITED PARTNER
PARTNERSHIP INTERESTS. . . . . . . . . . . . . . . . . . .23

ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS

SECTION 6.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES . . . . . . . . .24
SECTION 6.2 ALLOCATIONS FOR TAX PURPOSES . . . . . . . . . . . . . . .28
SECTION 6.3 SPECIAL DISTRIBUTION . . . . . . . . . . . . . . . . . . .30
SECTION 6.4 GENERAL DISTRIBUTIONS. . . . . . . . . . . . . . . . . . .30

ARTICLE VII

MANAGEMENT AND OPERATION OF BUSINESS

SECTION 7.1 MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 7.2 CERTIFICATE OF LIMITED PARTNERSHIP . . . . . . . . . . . .33
SECTION 7.3 RESTRICTIONS ON GENERAL PARTNERS' AUTHORITY. . . . . . . .33
SECTION 7.4 REIMBURSEMENT OF THE MANAGING GENERAL PARTNER. . . . . . .34
SECTION 7.5 OUTSIDE ACTIVITIES . . . . . . . . . . . . . . . . . . . .35
SECTION 7.6 LOANS FROM THE GENERAL PARTNERS; LOANS OR CONTRIBUTIONS
FROM THE PARTNERSHIP; CONTRACTS WITH AFFILIATES; CERTAIN
RESTRICTIONS ON THE GENERAL PARTNERS . . . . . . . . . . .36
SECTION 7.7 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . .38
SECTION 7.8 LIABILITY OF INDEMNITEES . . . . . . . . . . . . . . . . .40
SECTION 7.9 RESOLUTION OF CONFLICTS OF INTEREST. . . . . . . . . . . .40
SECTION 7.10 OTHER MATTERS CONCERNING THE MANAGING GENERAL PARTNER. . .42
SECTION 7.11 RELIANCE BY THIRD PARTIES. . . . . . . . . . . . . . . . .43

<PAGE>

ARTICLE VIII

BOOKS, RECORDS, ACCOUNTING AND REPORTS

SECTION 8.1 RECORDS AND ACCOUNTING . . . . . . . . . . . . . . . . . .43
SECTION 8.2 FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . .44

ARTICLE IX

TAX MATTERS

SECTION 9.1 TAX RETURNS AND INFORMATION. . . . . . . . . . . . . . . .44
SECTION 9.2 TAX ELECTIONS. . . . . . . . . . . . . . . . . . . . . . .44
SECTION 9.3 TAX CONTROVERSIES. . . . . . . . . . . . . . . . . . . . .44
SECTION 9.4 WITHHOLDING. . . . . . . . . . . . . . . . . . . . . . . .45

ARTICLE X

ADMISSION OF PARTNERS

SECTION 10.1 ADMISSION OF THE GENERAL PARTNERS AND THE MLP. . . . . . .45
SECTION 10.2 ADMISSION OF SUBSTITUTED LIMITED PARTNERS. . . . . . . . .45
SECTION 10.3 ADMISSION OF SUCCESSOR OR TRANSFEREE GENERAL PARTNER . . .46
SECTION 10.4 ADMISSION OF ADDITIONAL LIMITED PARTNERS . . . . . . . . .46
SECTION 10.5 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED
PARTNERSHIP. . . . . . . . . . . . . . . . . . . . . . . .46

ARTICLE XI

WITHDRAWAL OR REMOVAL OF PARTNERS

SECTION 11.1 WITHDRAWAL OF THE GENERAL PARTNERS . . . . . . . . . . . .47
SECTION 11.2 REMOVAL OF THE MANAGING GENERAL PARTNER. . . . . . . . . .49
SECTION 11.3 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL
PARTNER. . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 11.4 WITHDRAWAL OF THE LIMITED PARTNER. . . . . . . . . . . . .49

ARTICLE XII

DISSOLUTION AND LIQUIDATION

SECTION 12.1 DISSOLUTION. . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 12.2 CONTINUATION OF THE BUSINESS OF THE PARTNERSHIP AFTER
DISSOLUTION. . . . . . . . . . . . . . . . . . . . . . . .50

iii

<PAGE>

SECTION 12.3 LIQUIDATOR . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 12.4 LIQUIDATION. . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 12.5 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP . . . .53
SECTION 12.6 RETURN OF CONTRIBUTIONS. . . . . . . . . . . . . . . . . .53
SECTION 12.7 WAIVER OF PARTITION. . . . . . . . . . . . . . . . . . . .53
SECTION 12.8 CAPITAL ACCOUNT RESTORATION. . . . . . . . . . . . . . . .53

ARTICLE XIII

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

SECTION 13.1 AMENDMENT TO BE ADOPTED SOLELY BY THE MANAGING GENERAL
PARTNER. . . . . . . . . . . . . . . . . . . . . . . . . .54
SECTION 13.2 AMENDMENT PROCEDURES . . . . . . . . . . . . . . . . . . .55

ARTICLE XIV

MERGER

SECTION 14.1 AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 14.2 PROCEDURE FOR MERGER OR CONSOLIDATION. . . . . . . . . . .56
SECTION 14.3 APPROVAL BY LIMITED PARTNER OF MERGER OR CONSOLIDATION . .57
SECTION 14.4 CERTIFICATE OF MERGER. . . . . . . . . . . . . . . . . . .58
SECTION 14.5 EFFECT OF MERGER . . . . . . . . . . . . . . . . . . . . .58

ARTICLE XV

GENERAL PROVISIONS

SECTION 15.1 ADDRESSES AND NOTICES. . . . . . . . . . . . . . . . . . .58
SECTION 15.2 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 15.3 FURTHER ACTION . . . . . . . . . . . . . . . . . . . . . .59
SECTION 15.4 BINDING EFFECT . . . . . . . . . . . . . . . . . . . . . .59
SECTION 15.5 INTEGRATION. . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 15.6 CREDITORS. . . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 15.7 WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 15.8 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 15.9 APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . .60
SECTION 15.10 INVALIDITY OF PROVISIONS . . . . . . . . . . . . . . . . .60
SECTION 15.11 CONSENT OF PARTNERS. . . . . . . . . . . . . . . . . . . .60

<PAGE>

AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
CORNERSTONE PROPANE, L.P.

THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CORNERSTONE
PROPANE, L.P. dated as of , 1996, is entered into by and
among Cornerstone Propane GP, Inc., a California corporation, as the Managing
General Partner, SYN Inc., a Delaware corporation, as Special General Partner
and Cornerstone Propane Partners, L.P., a Delaware limited partnership, as the
Organizational Limited Partner, together with any other Persons who become
Partners in the Partnership or parties hereto as provided herein. In
consideration of the covenants, conditions and agreements contained herein, the
parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1 DEFINITIONS.

The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.

"Additional Limited Partner" means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 10.4 and who is shown as such on the books
and records of the Partnership.

"Adjusted Capital Account" means the Capital Account maintained for each
Partner as of the end of each fiscal year of the Partnership, (a) increased by
any amounts that such Partner is obligated to restore under the standards set by
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to
restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and
(b) decreased by (i) the amount of all losses and deductions that, as of the end
of such fiscal year, are reasonably expected to be allocated to such Partner in
subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury
Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions
that, as of the end of such fiscal year, are reasonably expected to be made to
such Partner in subsequent years in accordance with the terms of this Agreement
or otherwise to the extent they exceed offsetting increases to such Partner's
Capital Account that are reasonably expected to occur during (or prior to) the
year in which such distributions are reasonably expected to be made (other than
increases as a result of a minimum gain chargeback pursuant to Section
6.1(d)(i) or 6.1(d)(ii)). The foregoing definition of Adjusted Capital Account
is intended to comply with the provisions of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The
"Adjusted Capital Account" of a Partner in respect of a general partner interest
or any other specified interest in the Partnership shall be the amount which
such Adjusted Capital Account would be if such general partner interest or other
interest in the Partnership were

<PAGE>

the only interest in the Partnership held by a Partner from and after the date
on which such general partner interest or other interest was first issued.

"Adjusted Property" means any property the Carrying Value of which has been
adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii). Once an Adjusted Property
is deemed distributed by, and recontributed to, the Partnership for federal
income tax purposes upon a termination thereof pursuant to Treasury Regulation
Section 1.708-1(b)(1)(iv) such property shall thereafter constitute a
Contributed Property until the Carrying Value of such property is subsequently
adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii). Upon a termination of the
Partnership following the publication of Proposed Treasury Regulation
1.708-1(b)(1)(iv) as a final regulation, an Adjusted Property deemed contributed
to a new partnership in exchange for an interest in the new partnership,
followed by the deemed liquidation of the Partnership, shall thereafter
constitute a Contributed Property until the Carrying Value of such property is
subsequently adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii).

"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.

"Agreed Allocation" means any allocation, other than a Required Allocation,
of an item of income, gain, loss or deduction pursuant to the provisions of
Section 6.1, including, without limitation, a Curative Allocation (if
appropriate to the context in which the term "Agreed Allocation" is used).

"Agreed Value" of any Contributed Property means the fair market value of
such property or other consideration at the time of contribution as determined
by the Managing General Partner using such reasonable method of valuation as it
may adopt; provided, however, that the Agreed Value of any property deemed
contributed to the Partnership for federal income tax purposes upon termination
and reconstitution thereof pursuant to Section 708 of the Code (whether before
or after finalization of Proposed Treasury Regulation Section 1.708-1(b)(1)(iv))
shall be determined in accordance with Section 5.5(c). Subject to Section
5.5(c), the Managing General Partner shall, in its discretion, use such method
as it deems reasonable and appropriate to allocate the aggregate Agreed Value of
Contributed Properties contributed to the Partnership in a single or integrated
transaction among each separate property on a basis proportional to the fair
market value of each Contributed Property.

"Agreement" means this Amended and Restated Agreement of Limited
Partnership of Cornerstone Propane, L.P., as it may be amended, supplemented or
restated from time to time.

<PAGE>

"Assets" means the asset being conveyed by the General Partners and EESC,
to the Partnership on the Closing Date pursuant to Section 5.2(a) and the
Contribution and Conveyance Agreement.

"Associate" means, when used to indicate a relationship with any Person,
(a) any corporation or organization of which such Person is a director, officer
or partner or is, directly or indirectly, the owner of 20% or more of any class
of voting stock or other voting interest; (b) any trust or other estate in which
such Person has at least a 20% beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity; and (c) any relative or
spouse of such Person, or any relative of such spouse, who has the same
principal residence as such Person.

"Assumed Liabilities" means the liabilities that the Partnership is either
assuming or taking subject in connection with the conveyance of the Assets
pursuant to Section 5.2(a) and the Contribution and Conveyance Agreement.

"Audit Committee" means a committee of the Board of Directors of the
Managing General Partner composed entirely of two or more directors who are
neither officers nor employees of either of the General Partners nor officers,
directors or employees of any Affiliate of the General Partners.

"Available Cash" means, with respect to any Quarter ending prior to the
Liquidation Date,

(a) the sum of (i) all cash and cash equivalents of the Partnership Group
on hand at the end of such Quarter, and (ii) all additional cash and cash
equivalents of the Partnership Group on hand on the date of determination of
Available Cash with respect to such Quarter resulting from borrowings for
working capital purposes made subsequent to the end of such Quarter, less

(b) the amount of any cash reserves that is necessary or appropriate in
the reasonable discretion of the Managing General Partner to (i) provide for the
proper conduct of the business of the Partnership Group (including reserves for
future capital expenditures and for the anticipated future credit needs of the
Partnership Group) subsequent to such Quarter, (ii) comply with applicable law
or any loan agreement, security agreement, mortgage, debt instrument or other
agreement or obligation to which any Group Member is a party or by which it is
bound or its assets are subject or (iii) provide funds for distributions under
Section 6.4 or 6.5 of the MLP Agreement in respect of any one or more of the
next four Quarters; provided, however, that the Managing General Partner may not
establish cash reserves pursuant to (iii) above if the effect of such reserves
would be that the MLP is unable to distribute the Minimum Quarterly Distribution
on all Common Units with respect to such Quarter; and, provided further, that
disbursements made by a Group Member or cash reserves established, increased or
reduced after the end of such Quarter but on or before the date of determination
of Available Cash with respect to such Quarter shall be deemed to have been
made, established, increased or reduced, for purposes of determining Available
Cash, within such Quarter if the Managing General Partner so determines.

<PAGE>

Notwithstanding the foregoing, "Available Cash" with respect to the Quarter
in which the Liquidation Date occurs and any subsequent Quarter shall equal
zero.

"Book-Tax Disparity" means with respect to any item of Contributed Property
or Adjusted Property, as of the date of any determination, the difference
between the Carrying Value of such Contributed Property or Adjusted Property and
the adjusted basis thereof for federal income tax purposes as of such date. A
Partner's share of the Partnership's Book-Tax Disparities in all of its
Contributed Property and Adjusted Property will be reflected by the difference
between such Partner's Capital Account balance as maintained pursuant to Section
5.5 and the hypothetical balance of such Partner's Capital Account computed as
if it had been maintained strictly in accordance with federal income tax
accounting principles.

"Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States of
America or the states of New York or California shall not be regarded as a
Business Day.

"Capital Account" means the capital account maintained for a Partner
pursuant to Section 5.5. The "Capital Account" of a Partner in respect of a
general partner interest or any other Partnership Interest shall be the amount
which such Capital Account would be if such general partner interest or other
Partnership Interest were the only interest in the Partnership held by a Partner
from and after the date on which such general partner interest or other
Partnership Interest was first issued.

"Capital Contribution" means any cash, cash equivalents or the Net Agreed
Value of Contributed Property that a Partner contributes to the Partnership
pursuant to this Agreement.

"Carrying Value" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all depreciation,
amortization and cost recovery deductions charged to the Partners' and
Assignees' Capital Accounts in respect of such Contributed Property, and
(b) with respect to any other Partnership property, the adjusted basis of such
property for federal income tax purposes, all as of the time of determination.
The Carrying Value of any property shall be adjusted from time to time in
accordance with Sections 5.5(d)(i) and 5.5(d)(ii) and to reflect changes,
additions or other adjustments to the Carrying Value for dispositions and
acquisitions of Partnership properties, as deemed appropriate by the Managing
General Partner.

"Certificate of Limited Partnership" means the Certificate of Limited
Partnership of the Partnership filed with the Secretary of State of the State of
Delaware as referenced in Section 2.1, as such Certificate of Limited
Partnership may be amended, supplemented or restated from time to time.

"Closing Date" means the first date on which Common Units are sold by the
MLP to the Underwriters pursuant to the provisions of the Underwriting
Agreement.

<PAGE>

"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time. Any reference herein to a specific section or sections of the
Code shall be deemed to include a reference to any corresponding provision of
successor law.

"Common Unit" has the meaning assigned to such term in the MLP Agreement.

"Contributed Property" means each property or other asset, in such form as
may be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership (or deemed contributed to the Partnership on termination and
reconstitution thereof pursuant to Section 708 of the Code whether before or
after finalization of Proposed Treasury Regulation Section 1.708-1(b)(1)(iv)).
Once the Carrying Value of a Contributed Property is adjusted pursuant to
Section 5.5(d), such property shall no longer constitute a Contributed Property,
but shall be deemed an Adjusted Property.

"Contribution and Conveyance Agreement" means that certain Contribution,
Conveyance and Assumption Agreement, dated as of the Closing Date, among the
General Partners, the Partnership, the MLP and certain other parties, together
with the additional conveyance documents and instruments contemplated or
referenced thereunder.

"Cornerstone Propane GP, Inc." means Cornerstone Propane GP, Inc., a
California corporation, which is currently the Managing General Partner of the
Partnership.

"Curative Allocation" means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 6.1(d)(ix).

"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
6 Del C. Section 17-101, et seq., as amended, supplemented or restated from time
to time, and any successor to such statute.

"Departing Partner" means a former General Partner (either Managing General
Partner or Special General Partner) from and after the effective date of any
withdrawal or removal of such former General Partner pursuant to Section 11.1 or
11.2.

"Economic Risk of Loss" has the meaning set forth in Treasury Regulation
Section 1.752-2(a).

"EESC" means Empire Energy SC Corporation, a Delaware corporation.

"Event of Withdrawal" has the meaning assigned to such term in Section
11.1(a).

"General Partners" means the Managing General Partner and the Special
General Partner and their successors and permitted assigns as general partners
of the Partnership.

<PAGE>

"Group Member" means a member of the Partnership Group.

"Indemnitee" means (a) any General Partner, any Departing Partner and any
Person who is or was an Affiliate of any General Partner or any Departing
Partner, (b) any Person who is or was a director, officer, employee, agent or
trustee of a Group Member, (c) any Person who is or was an officer, member,
partner, director, employee, agent or trustee of any General Partner or any
Departing Partner or any Affiliate of the General Partner or any Departing
Partner, or any Affiliate of any such Person, (d) any Person who is or was
serving at the request of any General Partner or any Departing Partner or any
such Affiliate as a director, officer, employee, member, partner, agent,
fiduciary or trustee of another Person; provided, that a Person shall not be an
Indemnitee by reason of providing, on a fee-for-services basis, trustee,
fiduciary or custodial services.

"Initial Offering" means the initial offering and sale of Common Units to
the public, as described in the Registration Statement.

"Limited Partner" means any Person that is admitted to the Partnership as a
limited partner pursuant to the terms and conditions of this Agreement; but the
term Limited Partner shall not include any Person from and after the time such
Person withdraws as a Limited Partner from the Partnership.

"Liquidation Date" means (a) in the case of an event giving rise to the
dissolution of the Partnership of the type described in clauses (a) and (b) of
the first sentence of Section 12.2, the date on which the applicable time period
during which the Partners have the right to elect to reconstitute the
Partnership and continue its business has expired without such an election being
made, and (b) in the case of any other event giving rise to the dissolution of
the Partnership, the date on which such event occurs.

"Liquidator" means one or more Persons selected by the Managing General
Partner to perform the functions described in Section 12.3 as liquidating
trustee of the Partnership within the meaning of the Delaware Act.

"Managing General Partner" means Cornerstone Propane GP, Inc. and its
successors and permitted assigns as general partner of the Partnership.

"Merger Agreement" has the meaning assigned to such term in Section 14.1.

"Minimum Quarterly Distribution" has the meaning assigned to such term in
the MLP Agreement.

"MLP" means Cornerstone Propane Partners, L.P., a Delaware limited
partnership.

"MLP Agreement" means the Amended and Restated Agreement of Limited
Partnership of the MLP, dated __________.

<PAGE>

"National Securities Exchange" means an exchange registered with the
Commission under Section 6(a) of the Securities Exchange Act of 1934, as
amended, supplemented or restated from time to time, and any successor to such
statute, or the Nasdaq Stock Market or any successor thereto.

"Net Agreed Value" means, (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any liabilities either assumed by the
Partnership upon such contribution or to which such property is subject when
contributed, and (b) in the case of any property distributed to a Partner or
Assignee by the Partnership, the Partnership's Carrying Value of such property
(as adjusted pursuant to Section 5.5(d)(ii)) at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner or
Assignee upon such distribution or to which such property is subject at the time
of distribution, in either case, as determined under Section 752 of the Code.

"Net Income" means, for any taxable year, the excess, if any, of the
Partnership's items of income and gain (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over the Partnership's items of loss and deduction (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation
of Net Income shall be determined in accordance with Section 5.5(b) and shall
not include any items specially allocated under Section 6.1(d).

"Net Loss" means, for any taxable year, the excess, if any, of the
Partnership's items of loss and deduction (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over the Partnership's items of income and gain (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation
of Net Loss shall be determined in accordance with Section 5.5(b) and shall not
include any items specially allocated under Section 6.1(d).

"Net Note Proceeds" means $74,051,000 of proceeds remaining from the
issuance of the Partnership's Notes after the Partnership repays a portion of
the Assumed Liabilities.

"Net Termination Gain" means, for any taxable year, the sum, if positive,
of all items of income, gain, loss or deduction recognized by the Partnership
after the Liquidation Date. The items included in the determination of Net
Termination Gain shall be determined in accordance with Section 5.5(b) and shall
not include any items of income, gain or loss specially allocated under Section
6.1(d).

"Net Termination Loss" means, for any taxable year, the sum, if negative,
of all items of income, gain, loss or deduction recognized by the Partnership
after the Liquidation Date. The items included in the determination of Net
Termination Loss shall be determined in accordance with Section 5.5(b) and shall
not include any items of income, gain or loss specially allocated under Section
6.1(d).

<PAGE>

"Nonrecourse Built-in Gain" means with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or pledge
securing a Nonrecourse Liability, the amount of any taxable gain that would be
allocated to the Partners pursuant to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and
6.2(b)(iii) if such properties were disposed of in a taxable transaction in full
satisfaction of such liabilities and for no other consideration.

"Nonrecourse Deductions" means any and all items of loss, deduction or
expenditures (described in Section 705(a)(2)(B) of the Code) that, in accordance
with the principles of Treasury Regulation Section 1.704-2(b), are attributable
to a Nonrecourse Liability.

"Nonrecourse Liability" has the meaning set forth in Treasury Regulation
Section 1.752-1(a)(2).

"Notes" means the $220 million of Senior Secured Notes issued by the
Partnership in a private placement in conjunction with the Initial Offering.

"OLP Subsidiary" means a Subsidiary of the Partnership.

"Opinion of Counsel" means a written opinion of counsel (who may be regular
counsel to the Partnership or the General Partners or any of their Affiliates)
acceptable to the Managing General Partner in its reasonable discretion.

"Over-allotment Option" means the over-allotment option granted to the
Underwriters by the Partnership pursuant to the Underwriting Agreement.

"Partner Nonrecourse Debt" has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(4).

"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Treasury Regulation Section 1.704-2(i)(2).

"Partner Nonrecourse Deductions" means any and all items of loss, deduction
or expenditure (including, without limitation, any expenditure described in
Section 705(a)(2)(B) of the Code) that, in accordance with the principles of
Treasury Regulation Section 1.704-2(i), are attributable to a Partner
Nonrecourse Debt.

"Partners" means the General Partners and the Limited Partner.

"Partnership" means Cornerstone Propane, L.P., a Delaware limited
partnership, and any successors thereto.

"Partnership Group" means the Partnership and the OLP Subsidiaries, treated
as a single consolidated entity.

<PAGE>

"Partnership Interest" means an ownership interest of a Partner in the
Partnership.

"Partnership Minimum Gain" means that amount determined in accordance with
the principles of Treasury Regulation Section 1.704-2(d).

"Percentage Interest" means (a) as to the General Partners (in their
capacity as general partners of the Partnership) 1.0101% and (b) as to the
Limited Partner 98.9899%.

"Person" means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.

"Pro Rata" means when modifying the General Partners, apportioned 76.8645%
to the Managing General Partner and 23.1355% to the Special General Partner,
provided, however, to the extent an allocation of losses pursuant to Section
6.1(b) or Section 6.1(c)(ii) would cause the Special General Partner to have a
deficit balance in its Adjusted Capital Account at the end of such taxable year
(or increase any existing deficit in its Adjusted Capital Account), then Pro
Rata shall mean 100% to the Managing General Partner and zero to the Special
General Partner.

"Quarter" means, unless the context requires otherwise, a fiscal quarter of
the Partnership.

"Recapture Income" means any gain recognized by the Partnership (computed
without regard to any adjustment required by Sections 734 or 743 of the Code)
upon the disposition of any property or asset of the Partnership, which gain is
characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.

"Registration Statement" means the Registration Statement on Form S-1
(Registration No. 333-13879) as it has been or as it may be amended or
supplemented from time to time, filed by the MLP with the Commission under the
Securities Act to register the offering and sale of the Common Units in the
Initial Offering.

"Required Allocations" means (a) any limitation imposed on any allocation
of Net Losses or Net Termination Losses under Section 6.1(b) or 6.1(c)(ii) and
(b) any allocation of an item of income, gain, loss or deduction pursuant to
Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or 6.1(d)(ix).

"Residual Gain" or "Residual Loss" means any item of gain or loss, as the
case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of a Contributed Property
or Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to eliminate
Book-Tax Disparities.

<PAGE>

"Securities Act" means the Securities Act of 1933, as amended, supplemented
or restated from time to time and any successor to such statute.

"Special Approval" means approval by a majority of the members of the Audit
Committee.

"Special General Partner" mean SYN and it successors and assigns as special
general partner of the Partnership.

"Subordinated Unit" has the meaning assigned to such term in the MLP
Agreement.

"Subordination Period" has the meaning assigned to such term in the MLP
Agreement.

"Subsidiary" means, with respect to any Person, (a) a corporation of which
more than 50% of the voting power of shares entitled (without regard to the
occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof, or (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or indirectly,
at the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.

"Substituted Limited Partner" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 10.2 in place of and with all the
rights of a Limited Partner and who is shown as a Limited Partner on the books
and records of the Partnership.

"Surviving Business Entity" has the meaning assigned to such term in
Section 14.2(b).

"SYN" means SYN Inc., a Delaware corporation.

"Transfer" has the meaning assigned to such term in Section 4.1(a).

"Underwriter" means each Person named as an underwriter in Schedule I to
the Underwriting Agreement who purchases Common Units pursuant thereto.

"Underwriting Agreement" means the Underwriting Agreement dated ____, 1996,
among the Underwriters, the MLP and certain other parties, providing for the
purchase of Common Units by such Underwriters.

<PAGE>

"Unit" has the meaning assigned to such term in the MLP Agreement.

"Unit Majority" has the meaning assigned to such term in the MLP Agreement.

"Unrealized Gain" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (a) the fair market
value of such property as of such date (as determined under Section 5.5(d)) over
(b) the Carrying Value of such property as of such date (prior to any adjustment
to be made pursuant to Section 5.5(d) as of such date).

"Unrealized Loss" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (a) the Carrying Value
of such property as of such date (prior to any adjustment to be made pursuant to
Section 5.5(d) as of such date) over (b) the fair market value of such property
as of such date (as determined under Section 5.5(d)).

"U.S. GAAP" means United States Generally Accepted Accounting Principles
consistently applied.

"Withdrawal Opinion of Counsel" has the meaning assigned to such term in
Section 11.1(b).

SECTION 1.2 CONSTRUCTION.

Unless the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa; (b) references to Articles and Sections refer to Articles and
Sections of this Agreement; and (c) "include" or "includes" means includes,
without limitation, and "including" means including, without limitation.

ARTICLE II

ORGANIZATION

SECTION 2.1 FORMATION.

The Managing General Partner and the Organizational Limited Partner have
previously formed the Partnership as a limited partnership pursuant to the
provisions of the Delaware Act and hereby amend and restate the original
Agreement of Limited Partnership of Cornerstone Propane Partners, L.P. in its
entirety. This amendment and restatement shall become effective on the date of
this Agreement. Except as expressly provided to the contrary in this Agreement,
the rights, duties (including fiduciary duties), liabilities and obligations of
the Partners and the administration, dissolution and termination of the
Partnership shall be governed by the Delaware Act. All Partnership Interests
shall constitute personal property of the owner thereof for all purposes.

<PAGE>

SECTION 2.2 NAME.

The name of the Partnership shall be "Cornerstone Propane, L.P." The
Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the Managing General Partner in its sole discretion,
including the name of the Managing General Partner. The words "Limited
Partnership," "L.P.," "Ltd." or similar words or letters shall be included in
the Partnership's name where necessary for the purpose of complying with the
laws of any jurisdiction that so requires. The Managing General Partner in its
discretion may change the name of the Partnership at any time and from time to
time and shall notify the Limited Partner of such change in the next regular
communication to the Limited Partners.

SECTION 2.3 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE; OTHER
OFFICES.

Unless and until changed by the Managing General Partner, the registered
office of the Partnership in the State of Delaware shall be located at 1209
Orange Street, New Castle County, Wilmington, Delaware 19801, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office shall be The Corporation Trust Company. The principal office
of the Partnership shall be located at 432 Westridge Drive, Watsonville,
California 95076 or such other place as the Managing General Partner may from
time to time designate by notice to the Limited Partners. The Partnership may
maintain offices at such other place or places within or outside the State of
Delaware as the Managing General Partner deems necessary or appropriate. The
address of the Managing General Partner shall be 432 Westridge Drive,
Watsonville, California 95076 or such other place as the Managing General
Partner may from time to time designate by notice to the Limited Partners.

SECTION 2.4 PURPOSE AND BUSINESS.

The purpose and nature of the business to be conducted by the Partnership
shall be to (a) acquire, manage and operate the Assets and any similar assets or
properties, (b) engage directly in, or enter into or form any corporation,
partnership, joint venture, limited liability company or other arrangement to
engage indirectly in, any type of business or activity engaged in by the General
Partners and their predecessors prior to the Closing Date and, in connection
therewith, to exercise all of the rights and powers conferred upon the
Partnership pursuant to the agreements relating to such business activity,
(c) engage directly in, or enter into or form any corporation, partnership,
joint venture, limited liability company or other arrangement to engage
indirectly in, any business activity that is approved by the Managing General
Partner and which lawfully may be conducted by a limited partnership organized
pursuant to the Delaware Act and, in connection therewith, to exercise all of
the rights and powers conferred upon the Partnership pursuant to the agreements
relating to such business activity; provided, however, that the Managing General
Partner reasonably determines, as of the date of the acquisition or commencement
of such activity, that such activity (i) generates "qualifying income" (as such
term is defined pursuant to Section 7704 of the Code) or (ii) enhances the
operations of an activity of the Partnership that generates qualifying income,
and (d) do anything necessary or appropriate to the foregoing, including the
making of capital contributions or loans to

<PAGE>

a Group Member, the MLP or any Subsidiary of the MLP. The Managing General
Partner has no obligation or duty to the Partnership, the Limited Partners, or
the Assignees to propose or approve, and in its discretion may decline to
propose or approve, the conduct by the Partnership of any business.

SECTION 2.5 POWERS.

The Partnership shall be empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described in Section
2.4 and for the protection and benefit of the Partnership.

SECTION 2.6 POWER OF ATTORNEY.

(a) The Special General Partner, each Limited Partner and each Assignee
hereby constitutes and appoints the Managing General Partner and, if a
Liquidator shall have been selected pursuant to Section 12.3, the Liquidator,
severally (and any successor to the Liquidator by merger, transfer, assignment,
election or otherwise) and each of their authorized officers and
attorneys-in-fact, as the case may be, with full power of substitution, as his
true and lawful agent and attorney-in-fact, with full power and authority in his
name, place and stead, to:

(i) execute, swear to, acknowledge, deliver, file and record in
the appropriate public offices (A) all certificates, documents and other
instruments (including this Agreement and the Certificate of Limited
Partnership and all amendments or restatements hereof or thereof) that
the Managing General Partner or the Liquidator deems necessary or
appropriate to form, qualify or continue the existence or qualification
of the Partnership as a limited partnership (or a partnership in which
the limited partners have limited liability) in the State of Delaware and
in all other jurisdictions in which the Partnership may conduct business
or own property; (B) all certificates, documents and other instruments
that the Managing General Partner or the Liquidator deems necessary or
appropriate to reflect, in accordance with its terms, any amendment,
change, modification or restatement of this Agreement; (C) all
certificates, documents and other instruments (including conveyances and
a certificate of cancellation) that the Managing General Partner or the
Liquidator deems necessary or appropriate to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement;
(D) all certificates, documents and other instruments relating to the
admission, withdrawal, removal or substitution of any Partner pursuant
to, or other events described in, Article IV, X, XI or XII; (E) all
certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges of any class or
series of Partnership Securities issued pursuant to Section 5.6; and (F)
all certificates, documents and other instruments (including agreements
and a certificate of merger) relating to a merger or consolidation of the
Partnership pursuant to Article XIV; and

<PAGE>

(ii) execute, swear to, acknowledge, deliver, file and record all
ballots, consents, approvals, waivers, certificates, documents and other
instruments necessary or appropriate, in the discretion of the Managing
General Partner or the Liquidator, to make, evidence, give, confirm or
ratify any vote, consent, approval, agreement or other action that is
made or given by the Partners hereunder or is consistent with the terms
of this Agreement or is necessary or appropriate, in the discretion of
the Managing General Partner or the Liquidator, to effectuate the terms
or intent of this Agreement; provided, that when required by any
provision of this Agreement that establishes a percentage of the Limited
Partners or of the Limited Partners of any class or series required to
take any action, the Managing General Partner and the Liquidator may
exercise the power of attorney made in this Section 2.6(a)(ii) only after
the necessary vote, consent or approval of the Limited Partners or of the
Limited Partners of such class or series, as applicable.

Nothing contained in this Section 2.6(a) shall be construed as
authorizing the Managing General Partner to amend this Agreement except
in accordance with Article XIII or as may be otherwise expressly provided
for in this Agreement.

(b) The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive and, to the maximum
extent permitted by law, not be affected by the subsequent death, incompetency,
disability, incapacity, dissolution, bankruptcy or termination of any Limited
Partner or Assignee and the transfer of all or any portion of such Special
General Partner's, Limited Partner's or Assignee's Partnership Interest and
shall extend to such Special General Partner's. Limited Partner's or Assignee's
heirs, successors, assigns and personal representatives. Each such Special
General Partner's, Limited Partner or Assignee hereby agrees to be bound by any
representation made by the Managing General Partner or the Liquidator acting in
good faith pursuant to such power of attorney; and each such Special General
Partner's, Limited Partner or Assignee, to the maximum extent permitted by law,
hereby waives any and all defenses that may be available to contest, negate or
disaffirm the action of the Managing General Partner or the Liquidator taken in
good faith under such power of attorney. Each Special General Partner's, Limited
Partner or Assignee shall execute and deliver to the Managing General Partner or
the Liquidator, within 15 days after receipt of the request therefor, such
further designation, powers of attorney and other instruments as the Managing
General Partner or the Liquidator deems necessary to effectuate this Agreement
and the purposes of the Partnership.

SECTION 2.7 TERM.

The term of the Partnership commenced upon the filing of the Certificate of
Limited Partnership in accordance with the Delaware Act and shall continue in
existence until the close of Partnership business on December 31, 2086 or until
the earlier dissolution of the Partnership in accordance with the provisions of
Article XII. The existence of the Partnership as a separate legal entity shall
continue until the cancellation of the Certificate of Limited Partnership as
provided in the Delaware Act.

<PAGE>

SECTION 2.8 TITLE TO PARTNERSHIP ASSETS.

Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner or Assignee, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
a General Partner, one or more of its Affiliates or one or more nominees, as the
Managing General Partner may determine. The General Partners hereby declare and
warrant that any Partnership assets for which record title is held in the name
of a General Partner or one or more of its Affiliates or one or more nominees
shall be held by such General Partner or such Affiliate or nominee for the use
and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that such General Partner shall use reasonable
efforts to cause record title to such assets (other than those assets in respect
of which the Managing General Partner determines that the expense and difficulty
of conveyancing makes transfer of record title to the Partnership impracticable)
to be vested in the Partnership as soon as reasonably practicable; provided,
further, that, prior to the withdrawal or removal of such General Partner or as
soon thereafter as practicable, such General Partner shall use reasonable
efforts to effect the transfer of record title to the Partnership and, prior to
any such transfer, will provide for the use of such assets in a manner
satisfactory to the Managing General Partner. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which record title to such Partnership assets is
held.

ARTICLE III

RIGHTS OF LIMITED PARTNERS

SECTION 3.1 LIMITATION OF LIABILITY.

The Limited Partners and the Assignees shall have no liability under this
Agreement except as expressly provided in this Agreement or the Delaware Act.

SECTION 3.2 MANAGEMENT OF BUSINESS.

No Limited Partner or Assignee, in its capacity as such, shall participate
in the operation, management or control (within the meaning of the Delaware Act)
of the Partnership's business, transact any business in the Partnership's name
or have the power to sign documents for or otherwise bind the Partnership. Any
action taken by any Affiliate of the Managing General Partner or any officer,
director, employee, member, general partner, agent or trustee of the Managing
General Partner or any of its Affiliates, or any officer, director, employee,
member, general partner or agent or trustee of a Group Member, the MLP or any
Subsidiary of the MLP, in its capacity as such, shall not be deemed to be
participation in the control of the business of the Partnership by a limited
partner of the Partnership (within the meaning of Section 17-303(a) of the
Delaware Act) and shall

<PAGE>

not affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.

SECTION 3.3 OUTSIDE ACTIVITIES OF THE LIMITED PARTNERS.

Subject to the provisions of Section 7.5, which shall continue to be
applicable to the Persons referred to therein, regardless of whether such
Persons shall also be Limited Partners or Assignees, any Limited Partner or
Assignee shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Partnership, including
business interests and activities in direct competition with the Partnership
Group. Neither the Partnership nor any of the other Partners or Assignees shall
have any rights by virtue of this Agreement in any business ventures of any
Limited Partner or Assignee.

SECTION 3.4 RIGHTS OF LIMITED PARTNERS.

(a) In addition to other rights provided by this Agreement or
by applicable law, and except as limited by Section 3.4(b), each Limited Partner
shall have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon reasonable written demand
and at such Limited Partner's own expense:

(i) to obtain true and full information regarding
the status of the business and financial condition of the Partnership;

(ii) promptly after becoming available, to obtain a
copy of the Partnership's federal, state and local income tax returns for
each year;

(iii) to have furnished to him a current list of the
name and last known business, residence or mailing address of each
Partner;

(iv) to have furnished to him a copy of this
Agreement and the Certificate of Limited Partnership and all amendments
thereto, together with a copy of the executed copies of all powers of
attorney pursuant to which this Agreement, the Certificate of Limited
Partnership and all amendments thereto have been executed;

(v) to obtain true and full information regarding the
amount of cash and a description and statement of the Net Agreed Value of
any other Capital Contribution by each Partner and which each Partner has
agreed to contribute in the future, and the date on which each became a
Partner; and

(vi) to obtain such other information regarding the
affairs of the Partnership as is just and reasonable.

<PAGE>

(b) The General Partners may keep confidential from the Limited
Partners and Assignees, for such period of time as the Managing General Partner
deems reasonable, (i) any information that the Managing General Partner
reasonably believes to be in the nature of trade secrets or (ii) other
information the disclosure of which the Managing General Partner in good faith
believes (A) is not in the best interests of the MLP or the Partnership Group,
(B) could damage the MLP or the Partnership Group or (C) that the MLP or any
Group Member is required by law or by agreement with any third party to keep
confidential (other than agreements with Affiliates of the Partnership the
primary purpose of which is to circumvent the obligations set forth in this
Section 3.4).

ARTICLE IV

TRANSFER OF PARTNERSHIP INTERESTS

SECTION 4.1 TRANSFER GENERALLY.

(a) The term "transfer," when used in this Agreement with
respect to a Partnership Interest, shall be deemed to refer to a transaction
by which a Partner assigns its Partnership Interest to another Person, and
includes a sale, assignment, gift, pledge, encumbrance, hypothecation,
mortgage, exchange or any other disposition by law or otherwise.

(b) No Partnership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article IV. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article IV shall be null and void.

(c) Nothing contained in this Agreement shall be construed
to prevent a disposition by any shareholder of a General Partner of any or
all of the issued and outstanding capital stock of a General Partner.

SECTION 4.2 TRANSFER OF A GENERAL PARTNER'S PARTNERSHIP [caad 214]INTEREST.

If a General Partner transfers its Partnership Interest as the general
partner of the MLP to any Person in accordance with the provisions of the MLP
Agreement, such General Partner shall contemporaneously therewith transfer all,
but not less than all, of its Partnership Interest as the general partner of the
Partnership to such Person, and the Limited Partners hereby expressly consent to
such transfer. Except as set forth in the immediately preceding sentence and in
Section 5.2, a General Partner may not transfer all or any part of its
Partnership Interest as the general partner of the Partnership; provided,
however, that this provision shall not preclude or limit a General Partner's
ability to mortgage, pledge, hypothecate or grant a security interest in its
Partnership Interest as the General Partner of the Partnership and shall not
prevent any forced sale of any or all of its Partnership Interest as the General
Partner of the Partnership pursuant to the foreclosure of, or other realization
upon, any such encumbrance.

<PAGE>

SECTION 4.3 TRANSFER OF THE LIMITED PARTNERS' PARTNERSHIP INTERESTS.

Any Limited Partner may transfer all, but not less than all, of its
Partnership Interest as a limited partner of the Partnership in connection with
the merger, consolidation or other combination of any of the Limited Partners
with or into any other Person or the transfer by any of the Limited Partners of
all or substantially all of its assets to another Person, and following any such
transfer such Person may become a Substituted Limited Partner pursuant to
Article X. Except as set forth in the immediately preceding sentence and in
Section 5.2, or in connection with any pledge of (or any related foreclosure on)
the Limited Partner's Partnership Interest as a limited partner of the
Partnership solely for the purpose of securing, directly or indirectly,
indebtedness of the Partnership or the MLP, and except for the transfers
contemplated by Sections 5.2 and 10.1, a Limited Partner may not transfer all or
any part of its Partnership Interest or withdraw from the Partnership.

SECTION 4.4 RESTRICTIONS ON TRANSFERS.

(a) Notwithstanding the other provisions of this Article IV, no
transfer of any Partnership Interest shall be made if such transfer would (i)
violate the then applicable federal or state securities laws or rules and
regulations of the Commission, any state securities commission or any other
governmental authority with jurisdiction over such transfer, (ii) terminate the
existence or qualification of the Partnership or the MLP under the laws of the
jurisdiction of its formation or (iii) cause the Partnership or the MLP to be
treated as an association taxable as a corporation or otherwise to be taxed as
an entity for federal income tax purposes (to the extent not already so treated
or taxed).

(b) The Managing General Partner may impose restrictions on the
transfer of Partnership Interests if a subsequent Opinion of Counsel determines
that such restrictions are necessary to avoid a significant risk of the
Partnership or the MLP becoming taxable as a corporation or otherwise to be
taxed as an entity for federal income tax purposes. The restrictions may be
imposed by making such amendments to this Agreement as the Managing General
Partner may determine to be necessary or appropriate to impose such
restrictions.

ARTICLE V

CONTRIBUTIONS AND INITIAL TRANSFERS

SECTION 5.1 INITIAL CONTRIBUTIONS.

In connection with the formation of the Partnership under the Delaware
Act, the Managing General Partner made an initial Capital Contribution to
the Partnership in the amount of $_____ in exchange for an interest in the
Partnership and has been admitted as a general partner of the Partnership,
and the MLP made an initial Capital Contribution to the Partnership in the
amount of $_____ in exchange for an interest in the Partnership and has been
admitted as a limited partner fo the Partnership.

<PAGE>

SECTION 5.2 CONTRIBUTIONS AND INITIAL TRANSFERS BY THE GENERAL PARTNERS AND
THEIR AFFILIATES.

On the Closing Date, pursuant to, and subject to the conditions of, the
Contribution and Conveyance Agreement, the following transactions shall occur in
the following order:

(a) The General Partners and ESSC shall convey the Assets to the
Partnership. In exchange, the Partnership shall (A) continue the General
Partners' 1.0101% general partner interest in the Partnership, (B) issue to the
General Partners and EESC a 98.9899% limited partner interest in the Partnership
and (C) assume the Assumed Liabilities. The Managing General Partner's interest
in 1.0101% in the general partner described in (A) above shall be 76.8645% and
the remaining 23.1355% belongs to the Special General Partner. The Managing
General Partner and EESC shall share their combined 76.8645% of the 98.9899%
limited partner interest based on the relative Net Agreed Value of the Property
each contributed for such interest.

(b) The General Partners and EESC shall transfer all of their limited
partner interest in the Partnership to the MLP in exchange for the consideration
provided for in the Contribution and Conveyance Agreement.

SECTION 5.3 ADDITIONAL CAPITAL CONTRIBUTIONS.

With the consent of the Managing General Partner, any Limited Partner may,
but shall not be obligated to, make additional Capital Contributions to the
Partnership. Contemporaneously with the making of any Capital Contributions by
a Limited Partner in addition to those provided in Sections 5.1 and 5.2, the
General Partners shall be obligated to make an additional combined Capital
Contribution to the Partnership in an amount equal to 1.0101 DIVIDED BY 98.9899
of the Net Agreed Value of the additional Capital Contribution then made by such
Limited Partner (other than with respect to additional Capital Contributions by
the Limited Partner of the net proceeds received by the MLP upon the issuance of
Common Units pursuant to the Over-allotment Option). Each General Partner shall
contribute its Pro Rata share of such additional combined Capital Contribution.
Except as set forth in the immediately preceding sentence and Article XII, the
General Partners shall not be obligated to make any additional Capital
Contributions to the Partnership.

SECTION 5.4 INTEREST AND WITHDRAWAL.

No interest shall be paid by the Partnership on Capital Contributions. No
Partner or Assignee shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent, if any, that distributions made pursuant to
this Agreement or upon termination of the Partnership may be considered as such
by law and then only to the extent provided for in this Agreement. Except to the
extent expressly provided in this Agreement, no Partner or Assignee shall have
priority over any other Partner or Assignee either as to the return of Capital
Contributions or as to profits, losses or distributions. Any such return shall
be a compromise to which all Partners and Assignees agree within the meaning of
Section 17-502(b) of the Delaware Act.

<PAGE>

SECTION 5.5 CAPITAL ACCOUNTS.

(a) The Partnership shall maintain for each Partner (or a beneficial
owner of Partnership Interests held by a nominee in any case in which the
nominee has furnished the identity of such owner to the Partnership in
accordance with Section 6031(c) of the Code or any other method acceptable to
the Managing General Partner in its sole discretion) owning a Partnership
Interest a separate Capital Account with respect to such Partnership Interest in
accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such
Capital Account shall be increased by (i) the amount of all Capital
Contributions made to the Partnership with respect to such Partnership Interest
pursuant to this Agreement and (ii) all items of Partnership income and gain
(including, without limitation, income and gain exempt from tax) computed in
accordance with Section 5.5(b) and allocated with respect to such Partnership
Interest pursuant to Section 6.1, and decreased by (x) the amount of cash or Net
Agreed Value of all actual and deemed distributions of cash or property made
with respect to such Partnership Interest pursuant to this Agreement and (y) all
items of Partnership deduction and loss computed in accordance with
Section 5.5(b) and allocated with respect to such Partnership Interest pursuant
to Section 6.1.

(b) For purposes of computing the amount of any item of income, gain,
loss or deduction which is to be allocated pursuant to Article VI and is to be
reflected in the Partners' Capital Accounts, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes (including,
without limitation, any method of depreciation, cost recovery or amortization
used for that purpose), provided, that:

(i) Solely for purposes of this Section 5.5, the
Partnership shall be treated as owning directly its proportionate share
(as determined by the Managing General Partner) of all property owned by
any OLP Subsidiary that is classified as a partnership for federal income
tax purposes.

(ii) All fees and other expenses incurred by the
Partnership to promote the sale of (or to sell) a Partnership Interest
that can neither be deducted nor amortized under Section 709 of the Code,
if any, shall, for purposes of Capital Account maintenance, be treated as
an item of deduction at the time such fees and other expenses are
incurred and shall be allocated among the Partners pursuant to Section
6.1.

(iii) Except as otherwise provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), the computation of all items of income,
gain, loss and deduction shall be made without regard to any election
under Section 754 of the Code which may be made by the Partnership and,
as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of
the Code, without regard to the fact that such items are not includable
in gross income or are neither currently deductible nor capitalized for
federal income tax purposes. To the extent an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Treasury

<PAGE>

Regulation Section 1.704-1(b)(2)(iv)(m) to be taken into account in
determining Capital Accounts, the amount of such adjustment in the
Capital Accounts shall be treated as an item of gain or loss.

(iv) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if the
adjusted basis of such property as of such date of disposition were equal
in amount to the Partnership's Carrying Value with respect to such
property as of such date.

(v) In accordance with the requirements of Section 704(b)
of the Code, any deductions for depreciation, cost recovery or
amortization attributable to any Contributed Property shall be determined
as if the adjusted basis of such property on the date it was acquired by
the Partnership were equal to the Agreed Value of such property. Upon an
adjustment pursuant to Section 5.5(d) to the Carrying Value of any
Partnership property subject to depreciation, cost recovery or
amortization, any further deductions for such depreciation, cost recovery
or amortization attributable to such property shall be determined (A) as
if the adjusted basis of such property were equal to the Carrying Value
of such property immediately following such adjustment and (B) using a
rate of depreciation, cost recovery or amortization derived from the same
method and useful life (or, if applicable, the remaining useful life) as
is applied for federal income tax purposes; provided, however, that, if
the asset has a zero adjusted basis for federal income tax purposes,
depreciation, cost recovery or amortization deductions shall be
determined using any reasonable method that the Managing General Partner
may adopt.

(vi) If the Partnership's adjusted basis in a depreciable
or cost recovery property is reduced for federal income tax purposes
pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount of such
reduction shall, solely for purposes hereof, be deemed to be an
additional depreciation or cost recovery deduction in the year such
property is placed in service and shall be allocated among the Partners
pursuant to Section 6.1. Any restoration of such basis pursuant to
Section 48(q)(2) of the Code shall, to the extent possible, be allocated
in the same manner to the Partners to whom such deemed deduction was
allocated.

(c) A transferee of a Partnership Interest shall succeed to a pro
rata portion of the Capital Account of the transferor relating to the
Partnership Interest so transferred; provided, however, that if the transfer
causes a termination of the Partnership under Section 708(b)(1)(B) of the Code,
the Partnership's properties and liabilities shall be deemed (i) to have been
distributed in liquidation of the Partnership to the Partners (including any
transferee of a Partnership Interest that is a party to the transfer causing
such termination) pursuant to Section 12.4 (after adjusting the balance of the
Capital Accounts of the Partners as provided in Section 5.5(d)(ii) and
recontributed by such Partners in reconstitution of the Partnership or (ii) in
the event of a termination of the Partnership that occurs after the finalization
of Proposed Treasury Regulation Section 1.704-1(b)(1)(iv), to have been
contributed to a new partnership which will be deemed to make liquidating
distributions of the interests in this new partnership to the Partners
(including any transferee of a

<PAGE>

Partnership Interest that is a party to the transfer causing such termination)
pursuant to Section 12.4 (after adjusting the balance of the Capital Accounts of
the Partners as provided in Section 5.5(d)(ii)). Any such deemed distribution
and contribution, in the case of a characterization under clause (i) of the
preceding sentence, or any such deemed contribution and distribution, in the
case of a characterization under clause (ii) of the preceding sentence, shall be
treated as an actual contribution and distribution for purposes of this Section
5.5. In such event, the Carrying Values of the Partnership's properties shall
be adjusted immediately prior to such deemed distribution and contribution, or
deemed contribution and distribution, pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv) and this Section 5.5 and such Carrying Values shall then
constitute the Agreed Values of such properties upon such deemed contribution to
the new partnership. In either case, the Capital Accounts of the new
partnership that results under the applicable characterization shall be
maintained in accordance with the principles of this Section 5.5.

(d) (i) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership
Interests for cash or Contributed Property or the conversion of the
General Partners' Combined Interest to Common Units pursuant to
Section 11.3(a) (or upon the occurance of any other event list in
such regulation), the Capital Account of all Partners and the
Carrying Value of each Partnership property immediately prior to
such issuance shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership
property, as if such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property immediately prior
to such issuance and had been allocated to the Partners at such time
pursuant to Section 6.1 in the same manner as any item of gain or loss
actually recognized during such period would have to be allocated. In
determining such Unrealized Gain or Unrealized Loss, the aggregate
cash amount and fair market value of all Partnership assets
(including, without limitation, cash or cash equivalents)
immediately prior to the issuance of additional Partnership
Interests shall be determined by the Managing General Partner using
such reasonable method of valuation as it may adopt; provided,
however, that the Managing General Partner, in arriving at such
valuation, must take fully into account the fair market value of the
Partnership Interests of all Partners at such time. The Managing General
Partner shall allocate such aggregate value among the assets of the
Partnership (in such manner as it determines in its discretion to be
reasonable) to arrive at a fair market value for individual
properties.

(ii) In accordance with Treasury Regulation
Section 1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed
distribution to a Partner of any Partnership property (other than a
distribution of cash that is not in redemption or retirement of a
Partnership Interest), the Capital Accounts of all Partners and the
Carrying Value of all Partnership property shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable to
such Partnership property, as if such Unrealized Gain or Unrealized Loss
had been recognized in a sale of such property immediately prior to such
distribution for an amount equal to its fair market value, and had been
allocated to the Partners, at such time, pursuant to Section 6.1 in the
same manner as any item of gain or loss

<PAGE>

actually recognized during such period would have been allocated. In
determining such Unrealized Gain or Unrealized Loss the aggregate cash
amount and fair market value of all Partnership assets (including, without
limitation, cash or cash equivalents) immediately prior to a distribution
shall (A) in the case of an actual distribution which is not made pursuant
to Section 12.4 or in the case of a deemed contribution and/or distribution
occurring as a result of a termination of the Partnership pursuant to
Section 708 of the Code, be determined and allocated in the same manner as
that provided in Section 5.5(d)(i) or (B) in the case of a liquidating
distribution pursuant to Section 12.4, be determined and allocated by the
Liquidator using such reasonable method of valuation as it may adopt.

SECTION 5.6 LOANS FROM PARTNERS.

Loans by a Partner to the Partnership shall not constitute Capital
Contributions. If any Partner shall advance funds to the Partnership in excess
of the amounts required hereunder to be contributed by it to the capital of the
Partnership, the making of such excess advances shall not result in any increase
in the amount of the Capital Account of such Partner. The amount of any such
excess advances shall be a debt obligation of the Partnership to such Partner
and shall be payable or collectible only out of the Partnership assets in
accordance with the terms and conditions upon which such advances are made.

SECTION 5.7 LIMITED PREEMPTIVE RIGHTS.

Except as provided in Section 5.3, no Person shall have preemptive,
preferential or other similar rights with respect to (a) additional Capital
Contributions; (b) issuance or sale of any class or series of Partnership
Interests, whether unissued, held in the treasury or hereafter created; (c)
issuance of any obligations, evidences of indebtedness or other securities of
the Partnership convertible into or exchangeable for, or carrying or accompanied
by any rights to receive, purchase or subscribe to, any such Partnership
Interests; (d) issuance of any right of subscription to or right to receive, or
any warrant or option for the purchase of, any such Partnership Interests; or
(e) issuance or sale of any other securities that may be issued or sold by the
Partnership.

SECTION 5.8 FULLY PAID AND NON-ASSESSABLE NATURE OF LIMITED PARTNER
PARTNERSHIP INTERESTS.

All Limited Partner Partnership Interests issued pursuant to, and in
accordance with the requirements of, this Article V shall be fully paid and
non-assessable Limited Partner Partnership Interests in the Partnership, except
as such non-assessability may be affected by Section 17-607 of the Delaware Act.

<PAGE>

ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS

SECTION 6.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES.

For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Section 5.5(b)) shall be
allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.

(a) Net Income. After giving effect to the special allocations set
forth in Section 6.1(d), Net Income for each taxable year and all items of
income, gain, loss and deduction taken into account in computing Net Income for
such taxable year shall be allocated as follows:

(i) First, 100% to the General Partners, Pro Rata, until the
aggregate Net Income allocated to the General Partners pursuant to this
Section 6.1(a)(i) for the current taxable year and all previous taxable
years is equal to the aggregate Net Losses allocated to the General
Partners pursuant to Section 6.1(b)(ii) for all previous taxable years;

(ii) Second, 1.0101% to the General Partners, Pro Rata, and
98.9899% the Limited Partners, in accordance with their respective
Percentage Interests.

(b) Net Losses. After giving effect to the special allocations set
forth in Section 6.1(d), Net Losses for each taxable period and all items of
income, gain, loss and deduction taken into account in computing Net Losses for
such taxable period shall be allocated as follows:

(i) First, 1.0101% to the General Partners, Pro Rata, and
98.9899% the Limited Partners, in accordance with their respective
Percentage Interests; provided, that Net Losses shall not be allocated
pursuant to this Section 6.1(b)(i) to the extent that such allocation would
cause a Limited Partner to have a deficit balance in its Adjusted Capital
Account at the end of such taxable year (or increase any existing deficit
balance in its Adjusted Capital Account);

(ii) Second, the balance, if any, 100% to the General
Partners, Pro Rata.

(c) Net Termination Gains and Losses. After giving effect to the
special allocations set forth in Section 6.1(d), all items of income, gain, loss
and deduction taken into account in computing Net Termination Gain or Net
Termination Loss for such taxable period shall be allocated in the same manner
as such Net Termination Gain or Net Termination Loss is allocated hereunder.
All allocations under this Section 6.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided under this Section
6.1 and after all distributions of Available Cash provided under Section 6.4
have been made with respect to the taxable period

<PAGE>

ending on or before the Liquidation Date; provided, however, that solely for
purposes of this Section 6.1(c), Capital Accounts shall not be adjusted for
distributions made pursuant to Section 12.4.

(i) If a Net Termination Gain is recognized (or deemed
recognized pursuant to Section 5.5(d)), such Net Termination Gain shall be
allocated between the General Partners, Pro Rata, and the Limited Partners
in the following manner (and the Capital Accounts of the Partners shall be
increased by the amount so allocated in each of the following subclauses,
in the order listed, before an allocation is made pursuant to the next
succeeding subclause):

(A) First, to each Partner having a deficit balance in
its Capital Account, in the proportion that such deficit balance bears
to the total deficit balances in the Capital Accounts of all Partners,
until each such Partner has been allocated Net Termination Gain equal
to any such deficit balance in its Capital Account; and

(B) Second, 100% to the General Partners, Pro Rata,
and the Limited Partners in accordance with their respective
Percentage Interests.

(ii) If a Net Termination Loss is recognized (or deemed
recognized pursuant to Section 5.5(d)), such Net Termination Loss shall be
allocated to the Partners in the following manner:

(A) First, 100% to the General Partners, Pro Rata, and
the Limited Partners in proportion to, and to the extent of, the
positive balances in their respective Capital Accounts; and

(B) Second, the balance, if any, 100% to the General
Partners, Pro Rata.

(d) Special Allocations. Notwithstanding any other provision of this
Section 6.1, the following special allocations shall be made for such taxable
period:

(i) PARTNERSHIP MINIMUM GAIN CHARGEBACK. Notwithstanding any
other provision of this Section 6.1, if there is a net decrease in
Partnership Minimum Gain during any Partnership taxable period, each
Partner shall be allocated items of Partnership income and gain for such
period (and, if necessary, subsequent periods) in the manner and amounts
provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and
1.704-2(j)(2)(i), or any successor provision. For purposes of this Section
6.1(d), each Partner's Adjusted Capital Account balance shall be
determined, and the allocation of income or gain required hereunder shall
be effected, prior to the application of any other allocations pursuant to
this Section 6.1(d) with respect to such taxable period (other than an
allocation pursuant to Sections 6.1(d)(v) and 6.1(d)(vi)). This
Section 6.1(d)(i) is intended to comply with the

<PAGE>

Partnership Minimum Gain chargeback requirement in Treasury Regulation
Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii) CHARGEBACK OF PARTNER NONRECOURSE DEBT MINIMUM GAIN.
Notwithstanding the other provisions of this Section 6.1 (other than
Section 6.1(d)(i)), except as provided in Treasury Regulation
Section 1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain during any Partnership taxable period, any Partner with a
share of Partner Nonrecourse Debt Minimum Gain at the beginning of such
taxable period shall be allocated items of Partnership income and gain for
such period (and, if necessary, subsequent periods) in the manner and
amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(j)(2)(ii), or any successor provisions. For purposes of this
Section 6.1(d), each Partner's Adjusted Capital Account balance shall be
determined, and the allocation of income or gain required hereunder shall
be effected, prior to the application of any other allocations pursuant to
this Section 6.1(d), other than Section 6.1(d)(i) and other than an
allocation pursuant to Sections 6.1(d)(v) and 6.1(d)(vi), with respect to
such taxable period. This Section 6.1(d)(ii) is intended to comply with the
chargeback of items of income and gain requirement in Treasury Regulation
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

(iii) QUALIFIED INCOME OFFSET. In the event any Partner
unexpectedly receives any adjustments, allocations or distributions
described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Partnership
income and gain shall be specially allocated to such Partner in an amount
and manner sufficient to eliminate, to the extent required by the Treasury
Regulations promulgated under Section 704(b) of the Code, the deficit
balance, if any, in its Adjusted Capital Account created by such
adjustments, allocations or distributions as quickly as possible unless
such deficit balance is otherwise eliminated pursuant to Section 6.1(d)(i)
or (ii).

(iv) GROSS INCOME ALLOCATIONS. In the event any Partner has a
deficit balance in its Capital Account at the end of any Partnership
taxable period in excess of the sum of (A) the amount such Partner is
required to restore pursuant to the provisions of this Agreement and
(B) the amount such Partner is deemed obligated to restore pursuant to
Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner
shall be specially allocated items of Partnership gross income and gain in
the amount of such excess as quickly as possible; provided, that an
allocation pursuant to this Section 6.1(d)(iv) shall be made only if and to
the extent that such Partner would have a deficit balance in its Capital
Account as adjusted after all other allocations provided for in this
Section 6.1 have been tentatively made as if this Section 6.1(d)(iv) were
not in this Agreement.

(v) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any
taxable period shall be allocated to the Partners in accordance with their
respective Percentage Interests. If the Managing General Partner determines
in its good faith discretion that the

<PAGE>

Partnership's Nonrecourse Deductions must be allocated in a different ratio
to satisfy the safe harbor requirements of the Treasury Regulations
promulgated under Section 704(b) of the Code, the Managing General Partner
is authorized, upon notice to the other Partners, to revise the prescribed
ratio to the numerically closest ratio that does satisfy such requirements.

(vi) PARTNER NONRECOURSE DEDUCTIONS. Partner Nonrecourse
Deductions for any taxable period shall be allocated 100% to the Partner
that bears the Economic Risk of Loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Treasury Regulation Section 1.704-2(i). If
more than one Partner bears the Economic Risk of Loss with respect to a
Partner Nonrecourse Debt, such Partner Nonrecourse Deductions attributable
thereto shall be allocated between or among such Partners in accordance
with the ratios in which they share such Economic Risk of Loss.

(vii) NONRECOURSE LIABILITIES. For purposes of Treasury
Regulation Section 1.752-3(a)(3), the Partners agree that Nonrecourse
Liabilities of the Partnership in excess of the sum of (A) the amount of
Partnership Minimum Gain and (B) the total amount of Nonrecourse Built-in
Gain shall be allocated among the Partners in accordance with their
respective Percentage Interests.

(viii) CODE SECTION 754 ADJUSTMENTS. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Section
734(b) or 743(c) of the Code is required, pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining
Capital Accounts, the amount of such adjustment to the Capital Accounts
shall be treated as an item of gain (if the adjustment increases the basis
of the asset) or loss (if the adjustment decreases such basis), and such
item of gain or loss shall be specially allocated to the Partners in a
manner consistent with the manner in which their Capital Accounts are
required to be adjusted pursuant to such Section of the Treasury
Regulations.

(ix) CURATIVE ALLOCATION.

(A) Notwithstanding any other provision of this Section 6.1,
other than the Required Allocations, the Required Allocations shall be
taken into account in making the Agreed Allocations so that, to the
extent possible, the net amount of items of income, gain, loss and
deduction allocated to each Partner pursuant to the Required
Allocations and the Agreed Allocations, together, shall be equal to
the net amount of such items that would have been allocated to each
such Partner under the Agreed Allocations had the Required Allocations
and the related Curative Allocation not otherwise been provided in
this Section 6.1. Notwithstanding the preceding sentence, Required
Allocations relating to (1) Nonrecourse Deductions shall not be taken
into account except to the extent that there has been a decrease in
Partnership Minimum Gain and (2) Partner Nonrecourse Deductions shall
not be taken into account except

<PAGE>

to the extent that there has been a decrease in Partner Nonrecourse
Debt Minimum Gain. Allocations pursuant to this Section 6.1(d)(ix)(A)
shall only be made with respect to Required Allocations to the extent
the Managing General Partner reasonably determines that such
allocations will otherwise be inconsistent with the economic agreement
among the Partners. Further, allocations pursuant to this
Section 6.1(d)(ix)(A) shall be deferred with respect to allocations
pursuant to clauses (1) and (2) hereof to the extent the Managing
General Partner reasonably determines that such allocations are likely
to be offset by subsequent Required Allocations.

(B) The Managing General Partner shall have reasonable
discretion, with respect to each taxable period, to (1) apply the
provisions of Section 6.1(d)(ix)(A) in whatever order is most likely
to minimize the economic distortions that might otherwise result from
the Required Allocations, and (2) divide all allocations pursuant to
Section 6.1(d)(ix)(A) among the Partners in a manner that is likely to
minimize such economic distortions.

SECTION 6.2 ALLOCATIONS FOR TAX PURPOSES.

(a) Except as otherwise provided herein, for federal income tax
purposes, each item of income, gain, loss and deduction shall be allocated among
the Partners in the same manner as its correlative item of "book" income, gain,
loss or deduction is allocated pursuant to Section 6.1.

(b) In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be allocated for
federal income tax purposes among the Partners as follows:

(i) (A) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the Partners in the manner
provided under Section 704(c) of the Code that takes into account the
variation between the Agreed Value of such property and its adjusted basis
at the time of contribution; and (B) any item of Residual Gain or Residual
Loss attributable to a Contributed Property shall be allocated among the
Partners in the same manner as its correlative item of "book" gain or loss
is allocated pursuant to Section 6.1.

(ii) (A) In the case of an Adjusted Property, such items shall
(1) first, be allocated among the Partners in a manner consistent with the
principles of Section 704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to such property and the
allocations thereof pursuant to Section 5.5(d)(i) or 5.5(d)(ii), and
(2) second, in the event such property was originally a Contributed
Property, be allocated among the Partners

<PAGE>

in the same manner as its correlative item of "book" gain or loss is
allocated pursuant to Section 6.1.

(iii) The Managing General Partner shall apply the principles
of Treasury Regulation Section 1.704-3(d) to eliminate Book-Tax
Disparities.

(c) For the proper administration of the Partnership and for the
preservation of uniformity of the Units or other limited partner interests of
the MLP (or any class or classes thereof), the Managing General Partner shall
have sole discretion to (i) adopt such conventions as it deems appropriate in
determining the amount of depreciation, amortization and cost recovery
deductions; (ii) make special allocations for federal income tax purposes of
income (including, without limitation, gross income) or deductions; and (iii)
amend the provisions of this Agreement as appropriate (x) to reflect the
proposal or promulgation of Treasury Regulations under Section 704(b) or Section
704(c) of the Code or (y) otherwise to preserve or achieve uniformity of the
Units or other limited partner interests of the MLP (or any class or classes
thereof). The Managing General Partner may adopt such conventions, make such
allocations and make such amendments to this Agreement as provided in this
Section 6.2(c) only if such conventions, allocations or amendments would not
have a material adverse effect on the Partners, the holders of any class or
classes of Units or other limited partner interests of the MLP issued and
Outstanding or the Partnership, and if such allocations are consistent with the
principles of Section 704 of the Code.

(d) The Managing General Partner in its discretion may determine to
depreciate or amortize the portion of an adjustment under Section 743(b) of the
Code attributable to unrealized appreciation in any Adjusted Property (to the
extent of the unamortized Book-Tax Disparity) using a predetermined rate derived
from the depreciation or amortization method and useful life applied to the
Partnership's common basis of such property, despite any inconsistency of such
approach with Proposed Treasury Regulation Section 1.168-2(n), Treasury
Regulation Section 1.167(c)-l(a)(6) or the legislative history of Section 197 of
the Code. If the Managing General Partner determines that such reporting
position cannot reasonably be taken, the Managing General Partner may adopt
depreciation and amortization conventions under which all purchasers acquiring
Limited Partner Interests of the MLP in the same month would receive
depreciation and amortization deductions, based upon the same applicable rate as
if they had purchased a direct interest in the Partnership's property. If the
Managing General Partner chooses not to utilize such aggregate method, the
Managing General Partner may use any other reasonable depreciation and
amortization conventions to preserve the uniformity of the intrinsic tax
characteristics of any Limited Partner Interests of the MLP that would not have
a material adverse effect on the Limited Partners or the holders of any class or
classes of Limited Partner Interests of the MLP.

(e) Any gain allocated to the Partners upon the sale or other taxable
disposition of any Partnership asset shall, to the extent possible, after taking
into account other required allocations of gain pursuant to this Section 6.2, be
characterized as Recapture Income in the same proportions and to the same extent
as such Partners (or their predecessors in interest) have been

<PAGE>

allocated any deductions directly or indirectly giving rise to the treatment of
such gains as Recapture Income.

(f) All items of income, gain, loss, deduction and credit recognized
by the Partnership for federal income tax purposes and allocated to the Partners
in accordance with the provisions hereof shall be determined without regard to
any election under Section 754 of the Code which may be made by the Partnership;
provided, however, that such allocations, once made, shall be adjusted as
necessary or appropriate to take into account those adjustments permitted or
required by Sections 734 and 743 of the Code.

(g) The Managing General Partner may adopt such methods of allocation
of income, gain, loss or deduction between a transferor and a transferee of a
Partnership Interest as it determines necessary, to the extent permitted or
required by Section 706 of the Code and the regulations or rulings promulgated
thereunder.

SECTION 6.3 SPECIAL DISTRIBUTION.

Immediately following the Note Offering, the Partnership shall, subject to
Section 17-607 of the Delaware Act, distribute to the General Partners and EESC,
the Net Note Proceeds. $59,245,000 of such proceeds will be distributed to the
Special General Partner and the $17,369,000 balance will be distributed 23.1355%
to the Special General Partner and 76.8645% to the Managing General Partner.

SECTION 6.4 GENERAL DISTRIBUTIONS.

(a) Within 45 days following the end of each Quarter commencing with
the Quarter ending on March 31, 1997, an amount equal to 100% of Available Cash
with respect to such Quarter shall, subject to Section 17-607 of the Delaware
Act, be distributed in accordance with this Article VI by the Partnership to the
Partners in accordance with their respective Percentage Interests. The
immediately preceding sentence shall not require any distribution of cash if and
to the extent such distribution would be prohibited by applicable law or by any
loan agreement, security agreement, mortgage, debt instrument or other agreement
or obligation to which the Partnership is a party or by which it is bound or its
assets are subject. All distributions required to be made under this Agreement
shall be made subject to Section 17-607 of the Delaware Act.

(b) In the event of the dissolution and liquidation of the
Partnership, all receipts received during or after the Quarter in which the
Liquidation Date occurs, other than from borrowings described in (a)(ii) of the
definition of Available Cash, shall be applied and distributed solely in
accordance with, and subject to the terms and conditions of, Section 12.4.

(c) The Managing General Partner shall have the discretion to treat
taxes paid by the Partnership on behalf of, or amounts withheld with respect to,
all or less than all of the Partners, as a distribution of Available Cash to
such Partners.

<PAGE>

ARTICLE VII.

MANAGEMENT AND OPERATION OF BUSINESS

SECTION 7.1 MANAGEMENT.

(a) The Managing General Partner shall conduct, direct and manage all
activities of the Partnership. Except as otherwise expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership shall be exclusively vested in the Managing General Partner, neither
the Special General Partner nor any Limited Partner or Assignee shall have any
management power over the business and affairs of the Partnership. In addition
to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the Managing General
Partner under any other provision of this Agreement, the Managing General
Partner, subject to Section 7.3, shall have full power and authority to do all
things and on such terms as it, in its sole discretion, may deem necessary or
appropriate to conduct the business of the Partnership, to exercise all powers
set forth in Section 2.5 and to effectuate the purposes set forth in
Section 2.4, including the following:

(i) the making of any expenditures, the lending or borrowing
of money, the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of
indebtedness, including indebtedness that is convertible into Partnership
Interests, and the incurring of any other obligations;

(ii) the making of tax, regulatory and other filings, or
rendering of periodic or other reports to governmental or other agencies
having jurisdiction over the business or assets of the Partnership;

(iii) the acquisition, disposition, mortgage, pledge,
encumbrance, hypothecation or exchange of any or all of the assets of the
Partnership or the merger or other combination of the Partnership with or
into another Person (the matters described in this clause (iii) being
subject, however, to any prior approval that may be required by
Section 7.3);

(iv) the use of the assets of the Partnership (including cash
on hand) for any purpose consistent with the terms of this Agreement,
including the financing of the conduct of the operations of the Partnership
Group, (subject to Section 7.6) the lending of funds to other Persons
(including the MLP, the General Partners and their Affiliates), the
repayment of obligations of the Partnership, the MLP or Partnership Group
and the making of capital contributions to any member of the Partnership
Group;

(v) the negotiation, execution and performance of any
contracts, conveyances or other instruments (including instruments that
limit the liability of the Partnership under contractual arrangements to
all or particular assets of the Partnership, with

<PAGE>

the other party to the contract to have no recourse against the General
Partners or their assets other than their interest in the Partnership, even
if same results in the terms of the transaction being less favorable to the
Partnership than would otherwise be the case);

(vi) the distribution of Partnership cash;

(vii) the selection and dismissal of employees (including
employees having titles such as "president," "vice president," "secretary"
and "treasurer") and agents, outside attorneys, accountants, consultants
and contractors and the determination of their compensation and other terms
of employment or hiring;

(viii) the maintenance of such insurance for the benefit of the
Partnership Group and the Partners (including the assets of the
Partnership) as it deems necessary or appropriate;

(ix) the formation of, or acquisition of an interest in, and
the contribution of property and the making of loans to, any further
limited or general partnerships, joint ventures, corporations or other
relationships subject to the restrictions set forth in Section 2.4;

(x) the control of any matters affecting the rights and
obligations of the Partnership, including the bringing and defending of
actions at law or in equity and otherwise engaging in the conduct of
litigation and the incurring of legal expense and the settlement of claims
and litigation;

(xi) the indemnification of any Person against liabilities and
contingencies to the extent permitted by law;

(b) Notwithstanding any other provision of this Agreement, the MLP
Agreement, the Delaware Act or any applicable law, rule or regulation, each of
the Partners hereby (i) approves, ratifies and confirms the execution, delivery
and performance by the parties thereto of the MLP Agreement, the Underwriting
Agreement, the Contribution and Conveyance Agreement, the agreements and other
documents filed as exhibits to the Registration Statement, and the other
agreements described in or filed as a part of the Registration Statement;
(ii) agrees that the Managing General Partner (on its own or through any officer
of the Partnership) is authorized to execute, deliver and perform the agreements
referred to in clause (i) of this sentence and the other agreements, acts,
transactions and matters described in or contemplated by the Registration
Statement on behalf of the Partnership without any further act, approval or vote
of the Partners; and (iii) agrees that the execution, delivery or performance by
the General Partners, the MLP, any Group Member or any Affiliate of any of them,
of this Agreement or any agreement authorized or permitted under this Agreement
(including the exercise by the Managing General Partner or any Affiliate of the
Managing General Partner of the rights accorded pursuant to Article XV), shall
not constitute a breach by the Managing General Partner of any duty that the
General Partners may owe the

<PAGE>

Partnership or the Limited Partners or the Assignees or any other Persons under
this Agreement (or any other agreements) or of any duty stated or implied by law
or equity.

SECTION 7.2 CERTIFICATE OF LIMITED PARTNERSHIP.

The Managing General Partner has caused the Certificate of Limited
Partnership to be filed with the Secretary of State of the State of Delaware as
required by the Delaware Act and shall use all reasonable efforts to cause to be
filed such other certificates or documents as may be determined by the Managing
General Partner in its sole discretion to be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware or any other state in which the Partnership
may elect to do business or own property. To the extent that such action is
determined by the Managing General Partner in its sole discretion to be
reasonable and necessary or appropriate, the Managing General Partner shall file
amendments to and restatements of the Certificate of Limited Partnership and do
all things to maintain the Partnership as a limited partnership (or a
partnership or other entity in which the limited partners have limited
liability) under the laws of the State of Delaware or of any other state in
which the Partnership may elect to do business or own property. Subject to the
terms of Section 3.4(a), the Managing General Partner shall not be required,
before or after filing, to deliver or mail a copy of the Certificate of Limited
Partnership, any qualification document or any amendment thereto to any Limited
Partner or Assignee.

SECTION 7.3 RESTRICTIONS ON GENERAL PARTNERS' AUTHORITY.

(a) The Managing General Partner may not, without written approval of
the specific act by the Limited Partner or by other written instrument executed
and delivered by the Limited Partner subsequent to the date of this Agreement,
take any action in contravention of this Agreement, including, except as
otherwise provided in this Agreement, (i) committing any act that would make it
impossible to carry on the ordinary business of the Partnership; (ii) possessing
Partnership property, or assigning any rights in specific Partnership property,
for other than a Partnership purpose; (iii) admitting a Person as a Partner;
(iv) amending this Agreement in any manner; or (v) transferring its interest as
general partner of the Partnership.

(b) Except as provided in Articles XII and XIV, the Managing General
Partner may not sell, exchange or otherwise dispose of all or substantially all
of the Partnership's assets in a single transaction or a series of related
transactions or approve on behalf of the Partnership the sale, exchange or other
disposition of all or substantially all of the assets of the Partnership,
without the approval of the Limited Partners; provided however that this
provision shall not preclude or limit the Managing General Partner's ability to
mortgage, pledge, hypothecate or grant a security interest in all or
substantially all of the assets of the Partnership and shall not apply to any
forced sale of any or all of the assets of the Partnership pursuant to the
foreclosure of, or other realization upon, any such encumbrance. Without the
approval of holders of at least a Unit Majority, the Managing General Partner
shall not, on behalf of the MLP, (i) consent to any amendment to this Agreement

<PAGE>

or, except as expressly permitted by Section 7.9(d) of the MLP Agreement, take
any action permitted to be taken by a partner of the Partnership, in either
case, that would have a material adverse effect on the MLP as a partner of the
Partnership or (ii) except as permitted under Sections 4.6, 11.1 and 11.2 of the
MLP Agreement, elect or cause the MLP to elect a successor general partner of
the Partnership.

(c) At all times while serving as a General Partner of the
Partnership, each of the General Partners shall not make any dividend or
distribution on, or repurchase any shares of, its stock or take any other action
within its control if the effect of such action would cause their combined net
worth, independent of their interest in the Partnership Group, to be less than
$15.0 million or such lower amount, which lower amount is based on an Opinion of
Counsel that states, (i) based on a change in the position of the Internal
Revenue Service with respect to partnership status pursuant to Code
Section 7701, such lower amount would not cause the Partnership or the MLP to be
treated as an association taxable as a corporation or otherwise to be taxed as
an entity for federal income tax purposes and (ii) would not result in the loss
of the limited liability of any Limited Partner.

SECTION 7.4 REIMBURSEMENT OF THE MANAGING GENERAL PARTNER.

(a) Except as provided in this Section 7.4 and elsewhere in this
Agreement or in the MLP Agreement, the Managing General Partner shall not be
compensated for its services as general partner of the MLP or any Group Member.

(b) The Managing General Partner shall be reimbursed on a monthly
basis, or such other reasonable basis as the Managing General Partner may
determine in its sole discretion, for (i) all direct and indirect expenses it
incurs or payments it makes on behalf of the Partnership (including salary,
bonus, incentive compensation and other amounts paid to any Person including
Affiliates of the Managing General Partner to perform services for the
Partnership or for the Managing General Partner in the discharge of its duties
to the Partnership), and (ii) all other necessary or appropriate expenses
allocable to the Partnership or otherwise reasonably incurred by the Managing
General Partner in connection with operating the Partnership's business
(including expenses allocated to the Managing General Partner by its
Affiliates). The Managing General Partner shall determine the expenses that are
allocable to the Partnership in any reasonable manner determined by the Managing
General Partner in its sole discretion. Reimbursements pursuant to this
Section 7.4 shall be in addition to any reimbursement to the Managing General
Partner as a result of indemnification pursuant to Section 7.7.

(c) Subject to Section 5.7, the Managing General Partner, in
its sole discretion and without the approval of the Limited Partners (who shall
have no right to vote in respect thereof), may propose and adopt on behalf of
the Partnership employee benefit plans, employee programs and employee
practices, or cause the Partnership to issue partnership securities, in
connection with, pursuant to any employee benefit plan, employee program or
employee practice maintained or sponsored by the Managing General Partner or any
of its Affiliates, in each case for the benefit of

<PAGE>

employees of the Managing General Partner, any Group Member or any Affiliate, or
any of them, in respect of services performed, directly or indirectly, for the
benefit of the Partnership Group. Expenses incurred by the Managing General
Partner in connection with any such plans, programs and practices shall be
reimbursed in accordance with Section 7.4(b). Any and all obligations of the
Managing General Partner under any employee benefit plans, employee programs or
employee practices adopted by the Managing General Partner as permitted by this
Section 7.4(c) shall constitute obligations of the Managing General Partner
hereunder and shall be assumed by any successor Managing General Partner
approved pursuant to Section 11.1 or 11.2 or the transferee of or successor to
all of the Managing General Partner's Partnership Interest as a general partner
in the Partnership pursuant to Section 4.2.

SECTION 7.5 OUTSIDE ACTIVITIES.

(a) After the Closing Date, the Managing General Partner, for so long
as it is the Managing General Partner of the Partnership (i) agrees that its
sole business will be to act as a general partner of the Partnership, the MLP,
and any other partnership of which the Partnership or the MLP is, directly or
indirectly, a partner and to undertake activities that are ancillary or related
thereto (including being a limited partner in the MLP), (ii) shall not engage in
any business or activity or incur any debts or liabilities except in connection
with or incidental to (A) its performance as general partner of the MLP or one
or more Group Members or as described in or contemplated by the Registration
Statement or (B) the acquiring, owning or disposing of debt or equity securities
in the MLP or any Group Member and (iii) shall not engage in the retail sale of
propane to end users in the continental United States. Except as provided in
this Section 7.5(a) with respect to the retail sale of propane to end users in
the continental United States, nothing herein contained in this paragraph shall
prohibit an Affiliate of the Managing General Partner (including the Special
General Partner) from competing with the Partnership.

Affiliates of the Managing General Partner (including the Special General
Partner) may engage in a business activity that involves the retail sales of
propane to end users in the continental United States only if (i) the Managing
General Partner determines in its reasonable judgment, prior to the commencement
of such activity, that it is not in the best interests of the Partnership to
engage in such activity either (A) because of the financial commitments or
operating characteristics associated with such activity or (B) because such
activity is not consistent with the Partnership's business strategy or cannot
otherwise be integrated with the Partnership's operations on a beneficial basis
to the Partnership or (ii) such activity is being undertaken as provided in a
joint venture agreement or other agreement between the Partnership and an
Affiliate of a General Partner and such joint venture or other agreement was
determined at the time it was entered into to be fair to the Partnership in the
reasonable judgment of the Managing General Partner.

(b) Except as specifically restricted by Section 7.5(a), each
Indemnitee shall have the right to engage in businesses of every type and
description and other activities for profit and to engage in and possess an
interest in other business ventures of any and every type or description,
whether in businesses engaged in or anticipated to be engaged in by the MLP or
any Group Member,

<PAGE>

independently or with others, including business interests and activities in
direct competition with the business and activities of the MLP or any Group
Member, and none of the same shall constitute a breach of this Agreement or any
duty express or implied by law to the MLP or any Group Member or any Partner or
Assignee. Neither the MLP, any Group Member, any Limited Partner nor any other
Person shall have any rights by virtue of this Agreement, the MLP Agreement or
the partnership relationship established hereby or thereby in any business
ventures of any Indemnitee.

(c) Subject to the terms of Section 7.5(a) and (b), but otherwise
notwithstanding anything to the contrary in this Agreement, (i) the engaging in
competitive activities by any Indemnitees (other than the Managing General
Partner) in accordance with the provisions of this Section 7.5 is hereby
approved by the Partnership and all Partners and (ii) it shall be deemed not to
be a breach of the Managing General Partner's fiduciary duty or any other
obligation of any type whatsoever of the General Partners for the Indemnitees
(other than the Managing General Partner) to engage in such business interests
and activities in preference to or to the exclusion of the Partnership
(including, without limitation, the Managing General Partner and the Indemnities
shall have no obligation to present business opportunities to the Partnership).

(d) The Managing General Partner and any of its Affiliates may
acquire Units or other Partnership Securities (as defined in the MLP Agreement)
of the MLP in addition to those acquired on the Closing Date and, except as
otherwise provided in this Agreement, shall be entitled to exercise all rights
of a General Partner or Limited Partner, as applicable, relating to such Units
or Partnership Securities of the MLP.

(e) The term "Affiliates" when used in Section 7.5(a) and
Section 7.5(b) with respect to the Managing General Partner shall not include
the MLP, any Group Member or any Subsidiary of the MLP or any Group Member.

(f) Anything in this Agreement to the contrary notwithstanding, to
the extent that provisions of Sections 7.7, 7.8, 7.9 or 7.10 or other Sections
of this Agreement purport or are interpreted to have the effect of restricting
the fiduciary duties that might otherwise, as a result of Delaware or other
applicable law, be owed by the Managing General Partner to the Partnership and
its Limited Partners, or to constitute a waiver or consent by the Limited
Partners to any such restriction, such provisions shall be inapplicable and have
no effect in determining whether the Managing General Partner has complied with
its fiduciary duties in connection with determinations made by it under this
Section 7.5.

SECTION 7.6 LOANS FROM THE GENERAL PARTNERS; LOANS OR CONTRIBUTIONS FROM THE
PARTNERSHIP; CONTRACTS WITH AFFILIATES; CERTAIN RESTRICTIONS ON
THE GENERAL PARTNERS.

(a) The General Partners or their Affiliates may lend to the MLP or
any Group Member, and the MLP or any Group Member may borrow from the General
Partners or any of their Affiliates, funds needed or desired by the MLP or the
Group Member for such periods of time and in such amounts as the Managing
General Partner may determine; provided, however, that in any

<PAGE>

such case the lending party may not charge the borrowing party interest at a
rate greater than the rate that would be charged the borrowing party or impose
terms less favorable to the borrowing party than would be charged or imposed on
the borrowing party by unrelated lenders on comparable loans made on an
arm's-length basis (without reference to the lending party's financial abilities
or guarantees). The borrowing party shall reimburse the lending party for any
costs (other than any additional interest costs) incurred by the lending party
in connection with the borrowing of such funds. For purposes of this
Section 7.6(a) and Section 7.6(b), the term "Group Member" shall include any
Affiliate of a Group Member that is controlled by the Group Member. No Group
Member may lend funds to the General Partners or any of their Affiliates (other
than the MLP, a Subsidiary of the MLP, any other Group Member or any Subsidiary
of a Group Member).

(b) The Partnership may lend or contribute to any Group Member and
any Group Member may borrow from the Partnership, funds on terms and conditions
established in the sole discretion of the Managing General Partner; provided,
however, that the Partnership may not charge the Group Member interest at a rate
less than the rate that would be charged to the Group Member (without reference
to the General Partners' financial abilities or guarantees) by unrelated lenders
on comparable loans. The foregoing authority shall be exercised by the Managing
General Partner in its sole discretion and shall not create any right or benefit
in favor of any Group Member or any other Person.

(c) The Managing General Partner may itself, or may enter into an
agreement with any of its Affiliates to, render services to a Group Member or to
the Managing General Partner in the discharge of its duties as general partner
of the Partnership. Any services rendered to a Group Member by the Managing
General Partner or any of its Affiliates shall be on terms that are fair and
reasonable to the Partnership; provided, however, that the requirements of this
Section 7.6(c) shall be deemed satisfied as to (1) any transaction approved by
Special Approval, (ii) any transaction, the terms of which are no less favorable
to the Partnership Group than those generally being provided to or available
from unrelated third parties or (iii) any transaction that, taking into account
the totality of the relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous to the
Partnership Group), is equitable to the Partnership Group. The provisions of
Section 7.4 shall apply to the rendering of services described in this
Section 7.6(c).

(d) Any Group Member may transfer assets to joint ventures, other
partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions as are consistent with this Agreement and applicable
law.

(e) Neither the General Partners nor any of their Affiliates shall
sell, transfer or convey any property to, or purchase any property from the
Partnership, directly or indirectly, except pursuant to transactions that are
fair and reasonable to the Partnership; provided, however, that the requirements
of this Section 7.6(e) shall be deemed to be satisfied as to (1) the
transactions effected pursuant to Sections 5.2 and 5.3, the Contribution and
Conveyance Agreement and any other

<PAGE>

transactions described in or contemplated by the Registration Statement,
(ii) any transaction approved by Special Approval, (iii) any transaction, the
terms of which are no less favorable to the Partnership than those generally
being provided to or available from unrelated third parties, or (iv) any
transaction that, taking into account the totality of the relationships between
the parties involved (including other transactions that may be particularly
favorable or advantageous to the Partnership), is equitable to the Partnership.

(f) The General Partners and their Affiliates will have no obligation
to permit any Group Member to use any facilities or assets of the General
Partners and their Affiliates, except as may be provided in contracts entered
into from time to time specifically dealing with such use, nor shall there be
any obligation on the part of the General Partners or their Affiliates to enter
into such contracts.

(g) Without limitation of Sections 7.6(a) through 7.6(f), and
notwithstanding anything to the contrary in this Agreement, the existence of the
conflicts of interest described in the Registration Statement are hereby
approved by all Partners.

SECTION 7.7 INDEMNIFICATION.

(a) To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all Indemnitees shall be
indemnified and held harmless by the Partnership from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in which
any Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as an Indemnitee, provided, that in each case
the Indemnitee acted in good faith and in a manner that such Indemnitee
reasonably believed to be in, or (in the case of a Person other than a General
Partner) not opposed to, the best interests of the Partnership and, with respect
to any criminal proceeding, had no reasonable cause to believe its conduct was
unlawful; provided, further, no indemnification pursuant to this Section 7.7
shall be available to the General Partners with respect to their obligations
incurred pursuant to the Underwriting Agreement or the Contribution and
Conveyance Agreement (other than obligations incurred by the Managing General
Partner on behalf of the Partnership or the MLP). The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption that
the Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership, it being agreed that the General Partners shall not
be personally liable for such indemnification and shall have no obligation to
contribute or loan any monies or property to the Partnership to enable it to
effectuate such indemnification.

(b) To the fullest extent permitted by law, expenses (including legal
fees and expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 7.7(a) in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Partnership

<PAGE>

prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by the Partnership of any undertaking by or on behalf of the
Indemnitee to repay such amount if it shall be determined that the Indemnitee is
not entitled to be indemnified as authorized in this Section 7.7.

(c) The indemnification provided by this Section 7.7 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, both as to actions in the Indemnitee's capacity as an Indemnitee and
as to actions in any other capacity (including any capacity under the
Underwriting Agreement), and shall continue as to an Indemnitee who has ceased
to serve in such capacity and shall inure to the benefit of the heirs,
successors, assigns and administrators of the Indemnitee.

(d) The Partnership may purchase and maintain (or reimburse the
General Partners or their Affiliates for the cost of) insurance, on behalf of
the General Partners, their Affiliates and such other Persons as the Managing
General Partner shall determine, against any liability that may be asserted
against or expense that may be incurred by such Person in connection with the
Partnership's activities or such Person's activities on behalf of the
Partnership, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this
Agreement.

(e) For purposes of this Section 7.7, the Partnership shall be deemed
to have requested an Indemnitee to serve as fiduciary of an employee benefit
plan whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute "fines" within the meaning of Section 7.7(a); and action taken
or omitted by it with respect to any employee benefit plan in the performance of
its duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, the best interests of the Partnership.

(f) In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.

(g) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.

(h) The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

(i) No amendment, modification or repeal of this Section 7.7 or any
provision hereof shall in any manner terminate, reduce or impair the right of
any past, present or future Indemnitee to be indemnified by the Partnership, nor
the obligations of the Partnership to indemnify

39
<PAGE>

any such Indemnitee under and in accordance with the provisions of this
Section 7.7 as in effect immediately prior to such amendment, modification or
repeal with respect to claims arising from or relating to matters occurring, in
whole or in part, prior to such amendment, modification or repeal, regardless of
when such claims may arise or be asserted.

SECTION 7.8 LIABILITY OF INDEMNITEES.

(a) Notwithstanding anything to the contrary set forth in this
Agreement, no Indemnitee shall be liable for monetary damages to the
Partnership, the Limited Partners, the Assignees or any other Persons who have
acquired interests in the Units or other Partnership Securities of the MLP, for
losses sustained or liabilities incurred as a result of any act or omission if
such Indemnitee acted in good faith.

(b) Subject to its obligations and duties as Managing General Partner
set forth in Section 7.1(a), the Managing General Partner may exercise any of
the powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents, and the Managing
General Partner shall not be responsible for any misconduct or negligence on the
part of any such agent appointed by the Managing General Partner in good faith.

(c) To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the Partnership
or to the Partners, the General Partners and any other Indemnitee acting in
connection with the Partnership's business or affairs shall not be liable to the
Partnership or to any Partner for its good faith reliance on the provisions of
this Agreement. The provisions of this Agreement, to the extent that they
restrict or otherwise modify the duties and liabilities of an Indemnitee
otherwise existing at law or in equity, are agreed by the Partners to replace
such other duties and liabilities of such Indemnitee.

(d) Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the liability to the Partnership, the Limited Partners, the
General Partners, and the Partnership's and General Partners' directors,
officers and employees under this Section 7.8 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.

SECTION 7.9 RESOLUTION OF CONFLICTS OF INTEREST.

(a) Unless otherwise expressly provided in this Agreement or the MLP
Agreement, whenever a potential conflict of interest exists or arises between
any of the General Partners or any of their Affiliates, on the one hand, and the
Partnership, the MLP, any Partner or any Assignee, on the other, any resolution
or course of action by the Managing General Partner or its Affiliates in respect
of such conflict of interest shall be permitted and deemed approved by all
Partners, and shall not constitute a breach of this Agreement, of the MLP
Agreement, of any

<PAGE>

agreement contemplated herein or therein, or of any duty stated or implied by
law or equity, if the resolution or course of action is, or by operation of this
Agreement is deemed to be, fair and reasonable to the Partnership. The Managing
General Partner shall be authorized but not required in connection with its
resolution of such conflict of interest to seek Special Approval of such
resolution. Any conflict of interest and any resolution of such conflict of
interest shall be conclusively deemed fair and reasonable to the Partnership if
such conflict of interest or resolution is (i) approved by Special Approval (as
long as the material facts known to the Managing General Partner or any of its
Affiliates regarding any proposed transaction were disclosed to the Audit
Committee at the time it gave its approval), (ii) on terms no less favorable to
the Partnership than those generally being provided to or available from
unrelated third parties or (iii) fair to the Partnership, taking into account
the totality of the relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous to the
Partnership). The Managing General Partner may also adopt a resolution or course
of action that has not received Special Approval. The Managing General Partner
(including the Audit Committee in connection with Special Approval) shall be
authorized in connection with its determination of what is "fair and reasonable"
to the Partnership and in connection with its resolution of any conflict of
interest to consider (A) the relative interests of any party to such conflict,
agreement, transaction or situation and the benefits and burdens relating to
such interest; (B) any customary or accepted industry practices and any
customary or historical dealings with a particular Person; (C) any applicable
generally accepted accounting practices or principles; and (D) such additional
factors as the Managing General Partner (including the Audit Committee)
determines in its sole discretion to be relevant, reasonable or appropriate
under the circumstances. Nothing contained in this Agreement, however, is
intended to nor shall it be construed to require the Managing General Partner
(including the Audit Committee) to consider the interests of any Person other
than the Partnership. In the absence of bad faith by the Managing General
Partner, the resolution, action or terms so made, taken or provided by the
Managing General Partner with respect to such matter shall not constitute a
breach of this Agreement or any other agreement contemplated herein or a breach
of any standard of care or duty imposed herein or therein or, to the extent
permitted by law, under the Delaware Act or any other law, rule or regulation.

(b) Whenever this Agreement or any other agreement contemplated
hereby provides that the Managing General Partner or any of its Affiliates is
permitted or required to make a decision (i) in its "sole discretion" or
"discretion," that it deems "necessary or appropriate" or "necessary or
advisable" or under a grant of similar authority or latitude, except as
otherwise provided herein, the Managing General Partner or such Affiliate shall
be entitled to consider only such interests and factors as it desires and shall
have no duty or obligation to give any consideration to any interest of, or
factors affecting, the Partnership, any Limited Partner or any Assignee, (ii) it
may make such decision in its sole discretion (regardless of whether there is a
reference to "sole discretion" or "discretion") unless another express standard
is provided for, or (iii) in "good faith" or under another express standard, the
Managing General Partner or such Affiliate shall act under such express standard
and shall not be subject to any other or different standards imposed by this
Agreement, the MLP Agreement, any other agreement contemplated hereby or under
the Delaware Act or any other Law, rule or regulation. In addition, any actions
taken by the Managing General

<PAGE>

Partner or such Affiliate consistent with the standards of "reasonable
discretion" set forth in the definitions of Available Cash shall not constitute
a breach of any duty of the Managing General Partner to the Partnership, any
Limited Partner or any limited partner of the Limited Partner. The Managing
General Partner shall have no duty, express or implied, to sell or otherwise
dispose of any asset of the Partnership Group other than in the ordinary course
of business. No borrowing by any Group Member or the approval thereof by the
Managing General Partner shall be deemed to constitute a breach of any duty of
the Managing General Partner to the Partnership or any Limited Partners by
reason of the fact that the purpose or effect of such borrowing is directly or
indirectly to (A) enable distributions to the General Partners or their
Affiliates (including in their capacities as Limited Partners) to exceed 1% of
the total amount distributed to all partners or (B) hasten the expiration of the
Subordination Period or the conversion of any Subordinated Units into Common
Units.

(c) Whenever a particular transaction, arrangement or resolution of a
conflict of interest is required under this Agreement to be "fair and
reasonable" to any Person, the fair and reasonable nature of such transaction,
arrangement or resolution shall be considered in the context of all similar or
related transactions.

(d) The Limited Partner hereby authorizes the Managing General
Partner, on behalf of the Partnership as a partner of a Group Member, to approve
of actions by the General Partner of such Group Member similar to those actions
permitted to be taken by the Managing General Partner pursuant to this
Section 7.9.

SECTION 7.10 OTHER MATTERS CONCERNING THE MANAGING GENERAL PARTNER.

(a) The Managing General Partner may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.

(b) The Managing General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be
taken in reliance upon the opinion (including an Opinion of Counsel) of such
Persons as to matters that the Managing General Partner reasonably believes to
be within such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with such
opinion.

(c) The Managing General Partner shall have the right, in respect of
any of its powers or obligations hereunder, to act through any of its duly
authorized officers, a duly appointed attorney or attorneys-in-fact or the duly
authorized officers of the Partnership.

(d) Any standard of care and duty imposed by this Agreement or under
the Delaware Act or any applicable law, rule or regulation shall be modified,
waived or limited, to the

<PAGE>

extent permitted by law, as required to permit the Managing General Partner to
act under this Agreement or any other agreement contemplated by this Agreement
and to make any decision pursuant to the authority prescribed in this Agreement,
so long as such action is reasonably believed by the Managing General Partner to
be in, or not inconsistent with, the best interests of the Partnership.

SECTION 7.11 RELIANCE BY THIRD PARTIES.

Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the Managing
General Partner and any officer of the Managing General Partner authorized by
the Managing General Partner to act on behalf of and in the name of Partnership
has full power and authority to encumber, sell or otherwise use in any manner
any and all assets of the Partnership and to enter into any authorized contracts
on behalf of the Partnership, and such Person shall be entitled to deal with the
Managing General Partner or any such officer as if it were the Partnership's
sole party in interest, both legally and beneficially. Each Limited Partner
hereby waives any and all defenses or other remedies that may be available
against such Person to contest, negate or disaffirm any action of the Managing
General Partner or any such officer in connection with any such dealing. In no
event shall any Person dealing with the Managing General Partner or any such
officer or its representatives be obligated to ascertain that the terms of the
Agreement have been complied with or to inquire into the necessity or expedience
of any act or action of the Managing General Partner or any such officer or its
representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the Managing General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (a) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (b) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (c) such certificate, document or instrument was
duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership.

ARTICLE VIII

BOOKS, RECORDS, ACCOUNTING AND REPORTS

SECTION 8.1 RECORDS AND ACCOUNTING.

The Managing General Partner shall keep or cause to be kept at the
principal office of the Partnership appropriate books and records with respect
to the Partnership's business, including all books and records necessary to
provide to the Limited Partners any information required to be provided pursuant
to Section 3.4(a). Any books and records maintained by or on behalf of the
Partnership in the regular course of its business, including books of account
and records of Partnership proceedings, may be kept on, or be in the form of,
computer disks, hard drives, punch cards, magnetic tape, photographs,
micrographics or any other information storage device; provided,

<PAGE>

that the books and records so maintained are convertible into clearly legible
written form within a reasonable period of time. The books of the Partnership
shall be maintained, for financial reporting purposes, on an accrual basis in
accordance with U.S. GAAP.

SECTION 8.2 FISCAL YEAR.

The fiscal year of the Partnership shall be a fiscal year ending June 30.

ARTICLE IX

TAX MATTERS

SECTION 9.1 TAX RETURNS AND INFORMATION.

The Partnership shall timely file all returns of the Partnership that are
required for federal, state and local income tax purposes on the basis of the
accrual method and a taxable year ending on December 31. The tax information
reasonably required by the Partners for federal and state income tax reporting
purposes with respect to a taxable year shall be furnished to them within 90
days of the close of the calendar year in which the Partnership's taxable year
ends. The classification, realization and recognition of income, gain, losses
and deductions and other items shall be on the accrual method of accounting for
federal income tax purposes.

SECTION 9.2 TAX ELECTIONS.

(a) The Partnership shall make the election under Section 754 of the
Code in accordance with applicable regulations thereunder, subject to the
reservation of the right to seek to revoke any such election upon the Managing
General Partner's determination that such revocation is in the best interests of
the Limited Partners.

(b) The Partnership shall elect to deduct expenses incurred in
organizing the Partnership ratably over a sixty-month period as provided in
Section 709 of the Code.

(c) Except as otherwise provided herein, the Managing General Partner
shall determine whether the Partnership should make any other elections
permitted by the Code.

SECTION 9.3 TAX CONTROVERSIES.

Subject to the provisions hereof, the Managing General Partner is
designated as the Tax Matters Partner (as defined in the Code) and is authorized
and required to represent the Partnership (at the Partnership's expense) in
connection with all examinations of the Partnership's affairs by tax
authorities, including resulting administrative and judicial proceedings, and to
expend Partnership funds for professional services and costs associated
therewith. Each Partner agrees to cooperate with

<PAGE>

the Managing General Partner and to do or refrain from doing any or all things
reasonably required by the Managing General Partner to conduct such proceedings.

SECTION 9.4 WITHHOLDING.

Notwithstanding any other provision of this Agreement, the Managing General
Partner is authorized to take any action that it determines in its discretion to
be necessary or appropriate to cause the Partnership to comply with any
withholding requirements established under the Code or any other federal, state
or local law including, without limitation, pursuant to Sections 1441, 1442,
1445 and 1446 of the Code. To the extent that the Partnership is required or
elects to withhold and pay over to any taxing authority any amount resulting
from the allocation or distribution of income to any Partner or Assignee
(including, without limitation, by reason of Section 1446 of the Code), the
amount withheld may at the discretion of the Managing General Partner be treated
by the Partnership as a distribution of cash pursuant to Section 6.3 in the
amount of such withholding from such Partner.

ARTICLE X

ADMISSION OF PARTNERS

SECTION 10.1 ADMISSION OF THE GENERAL PARTNERS AND THE MLP.

Upon the conveyance referred to in Section 5.2(a), the General Partners and
EESC shall be admitted to the Partnership as Limited Partners. Upon the
transfer referred to in Section 5.2(b), the General Partners and EESC shall
withdraw from, and cease to be a Limited Partner of, the Partnership and the MLP
shall be admitted as a Limited Partner.

SECTION 10.2 ADMISSION OF SUBSTITUTED LIMITED PARTNERS.

Any person that is the successor in interest to a Limited Partner as
described in Section 4.3 shall be admitted to the Partnership as a Limited
Partner upon (a) furnishing to the General Partner (i) acceptance in form
satisfactory to the Managing General Partner of all of the terms and conditions
of this Agreement and (ii) such other documents or instruments as may be
required to effect its admission as a Limited Partner in the Partnership and (b)
obtaining the consent of the Managing General Partner, which consent may be
given or withheld in the Managing General Partner's sole discretion. Such
Person shall be admitted to the Partnership as a Limited Partner immediately
prior to the transfer of the Partnership Interest, and the business of the
Partnership shall continue without dissolution, except that the Managing General
Partner shall give such consent to a person who has become a successor in
interest pursuant to a bonafide pledge and foreclosure as contemplated by
Section 4.3.

<PAGE>

SECTION 10.3 ADMISSION OF SUCCESSOR OR TRANSFEREE GENERAL PARTNER.

A successor General Partner approved pursuant to Section 11.1 or 11.2 or
the transferee of or successor to all of a General Partner's Partnership
Interest as general partner in the Partnership pursuant to Section 4.2 who is
proposed to be admitted as a successor General Partner shall, subject to
compliance with the terms of Section 11.3, if applicable, be admitted to the
Partnership as a General Partner, effective immediately prior to the withdrawal
or removal of the predecessor or transferring General Partner pursuant to
Section 11.1 or 11.2 or the transfer of a General Partner's Partnership Interest
as a general partner in the Partnership pursuant to Section 4.2, provided,
however, that no such successor shall be admitted to the Partnership until
compliance with the terms of Section 4.2 has occurred and such successor has
executed and delivered such other documents or instruments as may be required to
effect such admission. Any such successor shall, subject to the terms hereof,
carry on the business of the members of the Partnership Group without
dissolution.

SECTION 10.4 ADMISSION OF ADDITIONAL LIMITED PARTNERS.

(a) A Person (other than the General Partners, the MLP or a
Substituted Limited Partner) who makes a Capital Contribution to the Partnership
in accordance with this Agreement shall be admitted to the Partnership as an
Additional Limited Partner only upon furnishing to the Managing General Partner
(i) evidence of acceptance in form satisfactory to the Managing General Partner
of all of the terms and conditions of this Agreement, including the power of
attorney granted in Section 2.6, and (ii) such other documents or instruments as
may be required in the discretion of the Managing General Partner to effect such
Person's admission as an Additional Limited Partner.

(b) Notwithstanding anything to the contrary in this Section 10.4, no
Person shall be admitted as an Additional Limited Partner without the consent of
the Managing General Partner, which consent may be given or withheld in the
Managing General Partner's discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded as such in the books and records of the
Partnership, following the consent of the Managing General Partner to such
admission.

SECTION 10.5 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP.

To effect the admission to the Partnership of any Partner, the Managing
General Partner shall take all steps necessary and appropriate under the
Delaware Act to amend the records of the Partnership to reflect such admission
and, if necessary, to prepare as soon as practicable an amendment to this
Agreement and, if required by law, the Managing General Partner shall prepare
and file an amendment to the Certificate of Limited Partnership, and the
Managing General Partner may for this purpose, among others, exercise the power
of attorney granted pursuant to Section 2.6.

<PAGE>

ARTICLE XI

WITHDRAWAL OR REMOVAL OF PARTNERS

SECTION 11.1 WITHDRAWAL OF THE GENERAL PARTNERS.

(a) The Managing General Partner shall be deemed to have withdrawn
from the Partnership upon the occurrence of any one of the following events
(each such event herein referred to as an "Event of Withdrawal");

(i) The Managing General Partner voluntarily withdraws from
the Partnership by giving written notice to the Limited Partners;

(ii) The Managing General Partner transfers all of its rights
as Managing General Partner pursuant to Section 4.2;

(iii) The Managing General Partner is removed pursuant to
Section 11.2;

(iv) The Managing General Partner of the MLP withdraws from, or
is removed as the managing general partner of, the MLP;

(v) The Managing General Partner (A) makes a general
assignment for the benefit of creditors; (B) files a voluntary bankruptcy
petition for relief under Chapter 7 of the United States Bankruptcy Code;
(C) files a petition or answer seeking for itself a liquidation,
dissolution or similar relief (but not a reorganization) under any law;
(D) files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against the Managing General
Partner in a proceeding of the type described in clauses (A)-(C) of this
Section 11.1(a)(v); or (E) seeks, consents to or acquiesces in the
appointment of a trustee (but not a debtor in possession), receiver or
liquidator of the Managing General Partner or of all or any substantial
part of its properties;

(vi) A final and non-appealable order of relief under Chapter 7
of the United States Bankruptcy Code is entered by a court with appropriate
jurisdiction pursuant to a voluntary or involuntary petition by or against
the Managing General Partner; or

(vii) (A) in the event the Managing General Partner is a
corporation, a certificate of dissolution or its equivalent is filed for
the Managing General Partner, or 90 days expire after the date of notice to
the Managing General Partner of revocation of its charter without a
reinstatement of its charter, under the laws of its state of incorporation;
(B) in the event the Managing General Partner is a partnership, the
dissolution and commencement of winding up of the Managing General Partner;
(C) in the event the Managing General Partner is acting in such capacity by
virtue of being a trustee of a trust, the termination of the trust; (D) in
the event the Managing General Partner is a natural

<PAGE>

person, his death or adjudication of incompetency; and (E) otherwise in the
event of the termination of the Managing General Partner.

If an Event of Withdrawal specified in Section 11.1(a)(iv)(with respect to
withdrawal), (v), (vi) or (vii)(A), (B), (C) or (E) occurs, the withdrawing
Managing General Partner shall give notice to the Limited Partners within 30
days after such occurrence. The Partners hereby agree that only the Events of
Withdrawal described in this Section 11.1 shall result in the withdrawal of the
Managing General Partner from the Partnership.

(b) Withdrawal of the Managing General Partner from the Partnership
upon the occurrence of an Event of Withdrawal shall not constitute a breach of
this Agreement under the following circumstances: (i) at any time during the
period beginning on the Closing Date and ending at 12:00 midnight, Eastern
Standard Time, on December 31, 2006, the Managing General Partner voluntarily
withdraws by giving at least 90 days' advance notice of its intention to
withdraw to the Limited Partners; provided that prior to the effective date of
such withdrawal, the withdrawal is approved by the Limited Partner and the
Managing General Partner delivers to the Partnership an Opinion of Counsel
("Withdrawal Opinion of Counsel") that such withdrawal (following the selection
of the successor General Partner) would not result in the loss of the limited
liability of any Limited Partner or of the limited partner of the MLP or cause
the Partnership or the MLP to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal income tax
purposes (to the extent not previously treated as such); (ii) at any time after
12:00 midnight, Eastern Standard Time, on December 31, 2006, the Managing
General Partner voluntarily withdraws by giving at least 90 days' advance notice
to the Limited Partners, such withdrawal to take effect on the date specified in
such notice; (iii) at any time that the Managing General Partner ceases to be
the Managing General Partner pursuant to Section 11.1(a)(ii), (iii) or (iv). If
the Managing General Partner gives a notice of withdrawal pursuant to
Section 11.1(a)(i) or Section 11.1(a)(1) of the MLP Agreement, the Limited
Partner may, prior to the effective date of such withdrawal, elect a successor
Managing General Partner; provided, however, that such successor shall be the
same person, if any, that is elected by the limited partners of the MLP pursuant
to Section 11.1 of the MLP Agreement as the successor to the Managing General
Partner in its capacity as general partner of the MLP. If, prior to the
effective date of the Managing General Partner's withdrawal, a successor is not
selected by the Limited Partners as provided herein or the Partnership does not
receive a Withdrawal Opinion of Counsel, the Partnership shall be dissolved in
accordance with Section 12.1. Any successor Managing General Partner elected in
accordance with the terms of this Section 11.1 shall be subject to the
provisions of Section 10.3.

(c) An Event of Withdrawal of the Managing General Partner shall also
be an Event of Withdrawal of the Special General Partner from the Partnership
and as general partner of other Group Members of which the Special General
Partner is a general partner at the same time and upon the same conditions as
set forth in Section 11.1(a) and 11.1(b) with respect to the Managing General
Partner. The Partners hereby agree that only the Events of Withdrawal described
in Section 11.1 with respect to the Managing General Partner shall result in a
withdrawal of the Special General

<PAGE>

Partner. Upon a withdrawal of the Special General Partner, the Limited Partners
are not required to elect a successor Special General Partner of the
Partnership.

SECTION 11.2 REMOVAL OF THE MANAGING GENERAL PARTNER.

The Managing General Partner shall be removed if such Managing General
Partner is removed as a Managing General Partner of the MLP pursuant to Section
11.2 of the MLP Agreement. Such removal shall be effective concurrently with
the effectiveness of the removal of such Managing General Partner as the
Managing General Partner of the MLP pursuant to the terms of the MLP Agreement.
If a successor Managing General Partner is elected in connection with the
removal of such Managing General Partner as a Managing General Partner of the
MLP, such successor Managing General Partner shall, upon admission pursuant to
Article X, automatically become a successor Managing General Partner of the
Partnership. The admission of any such successor Managing General Partner to the
Partnership shall be subject to the provisions of Section 10.3.

SECTION 11.3 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL PARTNER.

(a) The Partnership Interest of a Departing Partner departing as a
result of withdrawal or removal pursuant to Section 11.1 or 11.2 shall (unless
it is otherwise required to be converted into Common Units pursuant to Section
11.3(b) of the MLP Agreement) be purchased by the successor to the Departing
Partner for cash in the manner specified in the MLP Agreement. Such purchase
(or conversion into Common Units, as applicable) shall be a condition to the
admission to the Partnership of the successor as the General Partner. Any
successor General Partner shall indemnify the Departing General Partner as to
all debts and liabilities of the Partnership arising on or after the effective
date of the withdrawal or removal of the Departing Partner.

(b) The Departing Partner shall be entitled to receive all
reimbursements due such Departing Partner pursuant to Section 7.4, including any
employee-related liabilities (including severance liabilities), incurred in
connection with the termination of any employees employed by such Departing
Partner for the benefit of the Partnership.

SECTION 11.4 WITHDRAWAL OF THE LIMITED PARTNER.

Without the prior written consent of the Managing General Partner, which
may be granted or withheld in its sole discretion, and except as provided in
Section 10.1, no Limited Partner shall have the right to withdraw from the
Partnership.

<PAGE>

ARTICLE XII

DISSOLUTION AND LIQUIDATION

SECTION 12.1 DISSOLUTION.

The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor Managing General Partner in accordance with the terms of this
Agreement. Upon the removal or withdrawal of the Managing General Partner, if a
successor Managing General Partner is elected pursuant to Section 11.1 or 11.2,
the Partnership shall not be dissolved and such successor Managing General
Partner shall continue the business of the Partnership. The Partnership shall
dissolve, and (subject to Section 12.2) its affairs shall be wound up, upon:

(a) the expiration of its term as provided in Section 2.7;

(b) an Event of Withdrawal of the Managing General Partner as
provided in Section 11.1(a) (other than Section 11.1(a)(ii)), unless a successor
is elected and an Opinion of Counsel is received as provided in
Section 11.1(b) or 11.2 and such successor is admitted to the Partnership
pursuant to Section 10.3;

(c) an election to dissolve the Partnership by the Managing General
Partner that is approved by all the Limited Partners;

(d) the entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Delaware Act;

(e) the sale of all or substantially all of the assets and properties
of the Partnership Group; or

(f) the dissolution of the MLP.

SECTION 12.2 CONTINUATION OF THE BUSINESS OF THE PARTNERSHIP AFTER
DISSOLUTION.

Upon (a) dissolution of the Partnership following an Event of Withdrawal
caused by the withdrawal or removal of the Managing General Partner as provided
in Section 11.1(a)(i) or (iii) and the failure of the Partners to select a
successor to such Departing Partner pursuant to Section 11.1 or 11.2, then
within 90 days thereafter, or (b) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v) or
(vi) of the MLP Agreement, then, to the maximum extent permitted by law, within
180 days thereafter, all of the Limited Partners may elect to reconstitute the
Partnership and continue its business on the same terms and conditions set forth
in this Agreement by forming a new limited partnership on terms identical to
those set forth in this Agreement and having as a general partner a Person
approved by

<PAGE>

the majority in interest of the Limited Partners. In addition, upon dissolution
of the Partnership pursuant to Section 12.1(f), if the MLP is reconstituted
pursuant to Section 12.2 of the MLP Agreement, the reconstituted MLP may, within
180 days after such event of dissolution, as the Limited Partner (whether or not
it is the sole limited partner), elect to reconstitute the Partnership in
accordance with the immediately preceding sentence. Upon any such election by
the Limited Partners, all Partners shall be bound thereby and shall be deemed to
have approved same. Unless such an election is made within the applicable time
period as set forth above, the Partnership shall conduct only activities
necessary to wind up its affairs. If such an election is so made, then:

(i) the reconstituted Partnership shall continue until the end
of the term set forth in Section 2.7 unless earlier dissolved in accordance
with this Article XII;

(ii) if the successor General Partner is not the former General
Partner, then the interest of the former General Partners shall be
purchased by the successor General Partner or converted into Common Units
of the MLP as provided in the MLP Agreement; and

(iii) all necessary steps shall be taken to cancel this
Agreement and the Certificate of Limited Partnership and to enter into and,
as necessary, to file a new partnership agreement and certificate of
limited partnership, and the successor General Partner may for this purpose
exercise the powers of attorney granted the General Partner pursuant to
Section 2.6; provided, that the right to approve a successor General
Partner and to reconstitute and to continue the business of the Partnership
shall not exist and may not be exercised unless the Partnership has
received an Opinion of Counsel that (x) the exercise of the right would not
result in the loss of limited liability of the Limited Partners or any
limited partner of the MLP and (y) neither the Partnership, the
reconstituted limited partnership nor any Group Member would be treated as
an association taxable as a corporation or otherwise be taxable as an
entity for federal income tax purposes upon the exercise of such right to
continue.

SECTION 12.3 LIQUIDATOR.

Upon dissolution of the Partnership, unless the Partnership is continued
under an election to reconstitute and continue the Partnership pursuant to
Section 12.2, the Managing General Partner shall select one or more Persons to
act as Liquidator. The Liquidator (if other than the Managing General Partner)
shall be entitled to receive such compensation for its services as may be
approved by the Limited Partners. The Liquidator (if other than the Managing
General Partner) shall agree not to resign at any time without 15 days' prior
notice and may be removed at any time, with or without cause, by notice of
removal approved by the Limited Partner. Upon dissolution, removal or
resignation of the Liquidator, a successor and substitute Liquidator (who shall
have and succeed to all rights, powers and duties of the original Liquidator)
shall within 30 days thereafter be approved by the Limited Partner. The right
to approve a successor or substitute Liquidator in the manner provided herein
shall be deemed to refer also to any such successor or substitute Liquidator
approved

<PAGE>

in the manner herein provided. Except as expressly provided in this Article XII,
the Liquidator approved in the manner provided herein shall have and may
exercise, without further authorization or consent of any of the parties hereto,
all of the powers conferred upon the Managing General Partner under the terms of
this Agreement (but subject to all of the applicable limitations, contractual
and otherwise, upon the exercise of such powers, other than the limitation on
sale set forth in Section 7.3(b)) to the extent necessary or desirable in the
good faith judgment of the Liquidator to carry out the duties and functions of
the Liquidator hereunder for and during such period of time as shall be
reasonably required in the good faith judgment of the Liquidator to complete the
winding up and liquidation of the Partnership as provided for herein.

SECTION 12.4 LIQUIDATION

The Liquidator shall proceed to dispose of the assets of the Partnership,
discharge its liabilities, and otherwise wind up its affairs in such manner and
over such period as the Liquidator determines to be in the best interest of the
Partners, subject to Section 17-804 of the Delaware Act and the following:

(a) Disposition of Assets. The assets may be disposed of by public
or private sale or by distribution in kind to one or more Partners on such terms
as the Liquidator and such Partner or Partners may agree. If any property is
distributed in kind, the Partner receiving the property shall be deemed for
purposes of Section 12.4(c) to have received cash equal to its fair market
value; and contemporaneously therewith, appropriate cash distributions must be
made to the other Partners. The Liquidator may, in its absolute discretion,
defer liquidation or distribution of the Partnership's assets for a reasonable
time if it determines that an immediate sale or distribution of all or some of
the Partnership's assets would be impractical or would cause undue loss to the
Partners. The Liquidator may, in its absolute discretion, distribute the
Partnership's assets, in whole or in part, in kind if it determines that a sale
would be impractical or would cause undue loss to the partners.

(b) Discharge of Liabilities. Liabilities of the Partnership include
amounts owed to Partners otherwise than in respect of their distribution rights
under Article VI. With respect to any liability that is contingent conditional
or unmatured or is otherwise not yet due and payable, the Liquidator shall
either settle such claim for such amount as it thinks appropriate or establish a
reserve of cash or other assets to provide for its payment. When paid, any
unused portion of the reserve shall be distributed as additional liquidation
proceeds.

(c) Liquidation Distributions. All property and all cash in excess
of that required to discharge liabilities as provided in Section 12.4(b) shall
be distributed to the Partners in accordance with, and to the extent of, the
positive balances in their respective Capital Accounts, as determined after
taking into account all Capital Account adjustments (other than those made by
reason of distributions pursuant to this Section 12.4(c)) for the taxable year
of the Partnership during which the liquidation of the Partnership occurs (with
such date of occurrence being determined pursuant to Treasury Regulation
Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of
such taxable year (or, if later, within 90 days after said date of such
occurrence).

<PAGE>

SECTION 12.5 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP.

Upon the completion of the distribution of Partnership cash and property as
provided in Section 12.4 in connection with the liquidation of the Partnership,
the Partnership shall be terminated and the Certificate of Limited Partnership
and all qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Delaware shall be canceled and such other
actions as may be necessary to terminate the Partnership shall be taken.

SECTION 12.6 RETURN OF CONTRIBUTIONS.

The General Partners shall not be personally liable for, and shall have no
obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate, the return of the Capital Contributions of the Limited
Partners, or any portion thereof, it being expressly understood that any such
return shall be made solely from Partnership assets.

SECTION 12.7 WAIVER OF PARTITION.

To the maximum extent permitted by law, each Partner hereby waives any
right to partition of the Partnership property.

SECTION 12.8 CAPITAL ACCOUNT RESTORATION.

No Limited Partner shall have any obligation to restore any negative
balance in its Capital Account upon liquidation of the Partnership. Each of the
General Partners shall be obligated to restore any negative balance in their
Capital Account upon liquidation of its interest in the Partnership by the end
of the taxable year of the Partnership during which such liquidation occurs, or,
if later, within 90 days after the date of such liquidation; provided, however,
the Special General Partner's total obligation, pursuant to this Section 12.8
and Section 12.8 of the MLP Agreement, shall be limited to $78,000,000. The
non-contributing General Partner shall indemnify the contributing General
Partner for amounts contributed to the Partnership pursuant to this Section 12.8
and Section 12.8 of the MLP Agreement to the extent it exceeds the contributing
General Partner's Pro Rata share of the amounts so contributed, provided,
however, that the Special General Partner's total indemnification obligation is
limited by the excess of $78,000,000 over the aggregate amount previously
contributed to the Partnership pursuant to this Section 12.8 and Section 12.8 of
the MLP Agreement.

<PAGE>

ARTICLE XIII

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS;
RECORD DATE

SECTION 13.1 AMENDMENT TO BE ADOPTED SOLELY BY THE MANAGING GENERAL PARTNER.

Each Partner agrees that the Managing General Partner, without the approval
of any Partner or Assignee, may amend any provision of this Agreement and
execute, swear to, acknowledge, deliver, file and record whatever documents may
be required in connection therewith, to reflect:

(a) a change in the name of the Partnership, the location of the
principal place of business of the Partnership, the registered agent of the
Partnership or the registered office of the Partnership;

(b) admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;

(c) a change that, in the sole discretion of the Managing General
Partner, is necessary or advisable to qualify or continue the qualification of
the Partnership as a limited partnership or a partnership in which the Limited
Partners have limited liability under the laws of any state or to ensure that
neither the Partnership and the MLP will not be treated as an association
taxable as a corporation or otherwise taxed as an entity for federal income tax
purposes;

(d) a change that, in the discretion of the Managing General Partner,
(i) does not adversely affect the the Limited Partners in any material respect,
(ii) is necessary or advisable to (A) satisfy any requirements, conditions or
guidelines contained in any opinion, directive, order, ruling or regulation of
any federal or state agency or judicial authority or contained in any federal or
state statute (including the Delaware Act) or (B) facilitate the trading of the
Units or other Limited Partner Partnership Interests of the MLP (including the
division of any class or classes of Outstanding Units into different classes to
facilitate uniformity of tax consequences within such classes of Units) or
comply with any rule, regulation, guideline or requirement of any National
Securities Exchange on which the Units or other Limited Partner Partnership
Interests of the MLP are or will be listed for trading, compliance with any of
which the Managing General Partner determines in its discretion to be in the
best interests of the Partnership and the Limited Partners, (iii) is required to
effect the intent expressed in the Registration Statement or the intent of the
provisions of this Agreement or is otherwise contemplated by this Agreement or
(iv) is required to conform the provisions of this Agreement with the provisions
of the MLP Agreement as the provisions of the MLP Agreement may be amended,
supplemented or restated from time to time;

(e) a change in the fiscal year or taxable year of the Partnership
and any changes that, in the discretion of the Managing General Partner, are
necessary or advisable as a result of a change in the fiscal year or taxable
year of the Partnership including, if the Managing General

<PAGE>

Partner shall so determine, a change in the definition of "Quarter" and the
dates on which distributions are to be made by the Partnership;

(f) an amendment that is necessary, in the Opinion of Counsel, to
prevent the Partnership, or the General Partners or their directors, officers,
trustees or agents from in any manner being subjected to the provisions of the
Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940,
as amended, or "plan asset" regulations adopted under the Employee Retirement
Income Security Act of 1974, as amended, regardless of whether such are
substantially similar to plan asset regulations currently applied or proposed by
the United States Department of Labor;

(g) any amendment expressly permitted in this Agreement to be made by
the Managing General Partner acting alone;

(h) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 14.3;

(i) an amendment that, in the discretion of the Managing General
Partner, is necessary or advisable to reflect, account for and deal with
appropriately the formation by the Partnership of, or investment by the
Partnership in, any corporation, partnership, joint venture, limited liability
company or other entity, in connection with the conduct by the Partnership of
activities permitted by the terms of Section 2.4;

(j) a merger or conveyance pursuant to Section 14.3(d); or

(k) any other amendments substantially similar to the foregoing.

SECTION 13.2 AMENDMENT PROCEDURES.

Except with respect to amendments of he type described in Section 13.1, all
amendments to this Agreement shall be made in accordance with the following
requirements: Amendments to this Agreement may be proposed only by or with the
consent of the Managing General Partner which consent may be given or withheld
in its sole discretion. A proposed amendments shall be effective upon its
approval by the Limited Partner.

<PAGE>

ARTICLE XIV

MERGER

SECTION 14.1 AUTHORITY.

The Partnership may merge or consolidate with one or more corporations,
limited liability companies, business trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including a
general partnership or limited partnership, formed under the laws of the State
of Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation ("Merger Agreement") in accordance
with this Article IV.

SECTION 14.2 PROCEDURE FOR MERGER OR CONSOLIDATION.

Merger or consolidation of the Partnership pursuant to this Article XIV
requires the prior approval of the Managing General Partner. If the Managing
General Partner shall determine, in the exercise of its discretion, to consent
to the merger or consolidation, the Managing General Partner shall approve the
Merger Agreement, which shall set forth:

(a) The names and jurisdictions of formation or organization of each
of the business entities proposing to merge or consolidate;

(b) The name and jurisdiction of formation or organization of the
business entity that is to survive the proposed merger or consolidation (the
"Surviving Business Entity");

(d) The manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property or
general or limited partner interests, rights, securities or obligations of the
Surviving Business Entity; and (i) if any general or limited partner interests,
securities or rights of any constituent business entity are not to be exchanged
or converted solely for, or into, cash, property or general or limited partner
interests, rights, securities or obligations of the Surviving Business Entity,
the cash, property or general or limited partner interests, rights, securities
or obligations of any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such general or
limited partner interests, securities or rights are to receive in exchange for,
or upon conversion of their general or limited partner interests, securities or
rights, and (ii) in the case of securities represented by certificates, upon the
surrender of such certificates, which cash, property or general or limited
partner interests, rights, securities or obligations of the Surviving Business
Entity or any general or limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof, are to be
delivered;

<PAGE>

(e) A statement of any changes in the constituent documents or the
adoption of new constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust, certificate or agreement
of limited partnership or other similar charter or governing document) of the
Surviving Business Entity to be effected by such merger or consolidation;

(f) The effective time of the merger, which may be the date of the
filing of the certificate of merger pursuant to Section 14.4 or a later date
specified in or determinable in accordance with the Merger Agreement (provided,
that if the effective time of the merger is to be later than the date of the
filing of the certificate of merger, the effective time shall be fixed no later
than the time of the filing of the certificate of merger and stated therein);
and

(g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the Managing General
Partner.

SECTION 14.3 APPROVAL BY LIMITED PARTNER OF MERGER OR CONSOLIDATION.

(a) Except as provided in Section 14.3(d), the Managing General
Partner, upon its approval of the Merger Agreement, shall direct that a copy or
a summary of the Merger Agreement be submitted to a vote of Limited Partner,
whether at a special meeting or by written consent, in either case in accordance
with the requirements of Article XIII. A copy or a summary of the Merger
Agreement shall be included in or enclosed with the notice of a special meeting
or the written consent.

(b) Except as provided in Section 14.3(d), the Merger Agreement shall
be approved upon receiving the approval of the Limited Partner.

(c) After such approval by the Limited Partner, and at any time prior
to the filing of the certificate of merger pursuant to Section 14.4, the merger
or consolidation may be abandoned pursuant to provisions therefor, if any, set
forth in the Merger Agreement.

(d) Notwithstanding anything else contained in this Article XIV or in
this Agreement, the Managing General Partner is permitted, in its discretion,
without approval of the other Partners, to merge the Partnership or any Group
Member into, or convey all of the Partnership's assets to, another limited
liability entity which shall be newly formed and shall have no assets,
liabilities or operations at the time of such Merger other than those it
receives from the Partnership or other Group Member if (1) the Managing General
Partner has received an Opinion of Counsel that the merger or conveyance, as the
case may be, would not result in the loss of the limited liability of any
Limited Partner or any limited partner in the MLP or cause the Partnership or
the MLP to be treated as an association taxable as a corporation or otherwise to
be taxed as an entity for federal income tax purposes (to the extent not
previously treated as such), (ii) the sole purpose of such merger or conveyance
is to effect a mere change in the legal form of the Partnership into another
limited liability entity and (iii) the governing instruments of the new entity
provide the

<PAGE>

Limited Partners and the Managing General Partner with the same rights and
obligations as are herein contained.

SECTION 14.4 CERTIFICATE OF MERGER.

Upon the required approval by the Managing General Partner and the Limited
Partner of a Merger Agreement, a certificate of merger shall be executed and
filed with the Secretary of State of the State of Delaware in conformity with
the requirements of the Delaware Act.

SECTION 14.5 EFFECT OF MERGER.

(a) At the effective time of the certificate of merger:

(i) all of the rights, privileges and powers of each of the
business entities that has merged or consolidated, and all property, real,
personal and mixed, and all debts due to any of those business entities and
all other things and causes of action belonging to each of those business
entities shall be vested in the Surviving Business Entity and after the
merger or consolidation shall be the property of the Surviving Business
Entity to the extent they were of each constituent business entity;

(ii) the title to any real property vested by deed or otherwise
in any of those constituent business entities shall not revert and is not
in any way impaired because of the merger or consolidation;

(iii) all rights of creditors and all liens on or security
interests in property of any of those constituent business entities shall
be preserved unimpaired; and

(iv) all debts, liabilities and duties of those constituent
business entities shall attach to the Surviving Business Entity and may be
enforced against it to the same extent as if the debts, liabilities and
duties had been incurred or contracted by it.

(b) A merger or consolidation effected pursuant to this Article shall
not be deemed to result in a transfer or assignment of assets or liabilities
from one entity to another.

ARTICLE XV

GENERAL PROVISIONS

SECTION 15.1 ADDRESSES AND NOTICES.

Any notice, demand, request, report or proxy materials required or
permitted to be given or made to a Partner or Assignee under this Agreement
shall be in writing and shall be deemed given or made when received by it at the
principal office of the Partnership referred to in Section 2.3.

<PAGE>

SECTION 15.2 REFERENCES.

Except as specifically provided as otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.

SECTION 15.3 FURTHER ACTION.

The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.

SECTION 15.4 BINDING EFFECT.

This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

SECTION 15.5 INTEGRATION.

This Agreement constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.

SECTION 15.6 CREDITORS.

None of the provisions of this Agreement shall be for the benefit of, or
shall be enforceable by, any creditor of the Partnership.

SECTION 15.7 WAIVER.

No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach of any other covenant, duty, agreement or condition.

SECTION 15.8 COUNTERPARTS.

This Agreement may be executed in counterparts, all of which together shall
constitute an agreement binding on all the parties hereto, notwithstanding that
all such parties are not signatories to the original or the same counterpart.
Each party shall become bound by this Agreement immediately upon affixing its
signature hereto, independently of the signature of any other party.

<PAGE>

SECTION 15.9 APPLICABLE LAW.

This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware, without regard to the principles of conflicts of
law.

SECTION 15.10 INVALIDITY OF PROVISIONS.

If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

SECTION 15.11 CONSENT OF PARTNERS.

Each Partner hereby expressly consents and agrees that, whenever in this
Agreement it is specified that an action may be taken upon the affirmative vote
or consent of less than all of the Partners, such action may be so taken upon
the concurrence of less than all of the Partners and each Partner shall be bound
by the results of such action.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

MANAGING GENERAL PARTNER:

CORNERSTONE PROPANE GP, INC.

By:___________________________
Name:
Title:

SPECIAL GENERAL PARTNER:

SYN INC.

By:___________________________
Name:
Title:

ORGANIZATIONAL LIMITED
PARTNER:

CORNERSTONE PROPANE
PARTNERS, L.P.

By:___________________________
Name:
Title:

LIMITED PARTNER

EMPIRE ENERGY SC CORPORATION

By:___________________________
Name:
Title:

<PAGE>

EXHIBIT 5.1
[Letterhead of Andrews & Kurth L.L.P.
425 Lexington Avenue
New York, New York 10017]

December 6, 1996

Cornerstone Propane Partners, L.P.
432 Westridge Drive
Watsonville, California 95076

Gentlemen:

We have acted as counsel to Cornerstone Propane Partners, L.P., a Delaware
limited partnership (the "Partnership"), Cornerstone Propane, L.P., a Delaware
limited partnership, and Cornerstone Propane GP, Inc., a Delaware corporation,
in connection with the registration under the Securities Act of 1933, as amended
(the "Act"), of the offering and sale of up to an aggregate of 9,821,000 common
units representing limited partner interests in the Partnership (the "Common
Units"). This opinion also relates to any registration statement (including any
amendment thereto) for the offering that is to be effective upon filing pursuant
to Rule 462(b) under the Act.

As the basis for the opinion hereinafter expressed, we have examined such
statutes, regulations, corporate records and documents, certificates of
corporate and public officials, and other instruments as we have deemed
necessary or advisable for the purposes of this opinion. In such examination we
have assumed the authenticity of all documents submitted to us as originals and
the conformity with the original documents of all documents submitted to us as
copies.

Based on the foregoing and on such legal considerations as we deem
relevant, we are of the opinion that:

1. The Partnership has been duly formed and is validly existing as a
limited partnership under the Delaware Revised Uniform Limited Partnership Act.

2. The Common Units to be issued by the Partnership, when issued and paid
for as contemplated by the Partnership's Registration Statement on Form S-1
(File No. 333-13879) relating to the Common Units, as amended (the "Registration
Statement"), and any registration statement relating to the offering filed
pursuant to Rule 462(b) of the Act, will be duly authorized, validly issued,
fully paid and nonassessable, except as such nonassessability may be affected by
the matters

<PAGE>

December 6, 1996
Page 2

described in the prospectus included in the Registration Statement (the
"Prospectus") under the caption "The Partnership Agreement--Limited Liability."

We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Validity of
the Common Units" in the Prospectus.

Very truly yours,

Andrews & Kurth L.L.P.

1111/2438/2523

<PAGE>

EXHIBIT 8.1
[Letterhead of Andrews & Kurth L.L.P.
425 Lexington Avenue
New York, New York 10017]

December 6, 1996

Cornerstone Propane Partners, L.P.
432 Westridge Drive
Watsonville, California 95076

TAX OPINION

Gentlemen:

We have acted as special counsel to Cornerstone Propane Partners, L.P, a
Delaware limited partnership (the "Partnership"), in connection with the
offering of up to 9,821,000 common units representing limited partner interests
("Common Units") in the Partnership pursuant to the Registration Statement on
Form S-1 of the Partnership (Registration No. 333-13879) relating to the Common
Units (the "Registration Statement").

All statements of legal conclusions contained in the discussion under the
caption "Tax Considerations" in the prospectus included in the Registration
Statement, unless otherwise noted, reflect our opinion with respect to the
matters set forth therein.

In addition, based on the foregoing, we are of the opinion that the federal
income tax discussion in the prospectus included in the Registration Statement
with respect to those matters as to which no legal conclusions are provided is
an accurate discussion of such federal income tax matters (except for the
representations and statements of fact of the Partnership and its general
partners, included in such discussion, as to which we express no opinion).

We hereby consent to the references to our firm and this opinion contained
in the prospectus included in the Registration Statement.

Very truly yours,

Andrews & Kurth L.L.P.

2445/1117

<PAGE>

FORM OF

CREDIT AGREEMENT,

dated as of December [12], 1996

among

CORNERSTONE PROPANE, L.P.,
as the Borrower,

and

VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,

and

BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Agent for the Lenders.

<PAGE>

TABLE OF CONTENTS

Page

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . 1

1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Use of Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.3 Cross-References. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.4 Accounting and Financial Determinations . . . . . . . . . . . . . . . . 27

ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES . . . . . . . 27

2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.1.1 Working Capital Loan Commitment . . . . . . . . . . . . . . . . 27
2.1.2 Acquisition Loan Commitment . . . . . . . . . . . . . . . . . . 27
2.1.3 Lenders Not Permitted or Required To Make Loans . . . . . . . . 27

2.2 Reduction of Commitment Amounts . . . . . . . . . . . . . . . . . . . . 28
2.2.1 Optional. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.2.2 Mandatory . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

2.3 Borrowing Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.4 Continuation and Conversion Elections . . . . . . . . . . . . . . . . . 29
2.5 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.6 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.7 Swing Line. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES. . . . . . . . 33

3.1 Repayments and Prepayments. . . . . . . . . . . . . . . . . . . . . . . 33
3.1.1 Stated Maturity Date and Loan Commitment
Termination Date. . . . . . . . . . . . . . . . . . . . . . . 35

3.2 Interest Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.2.1 Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.2.2 Post-Maturity Rates . . . . . . . . . . . . . . . . . . . . . . 38
3.2.3 Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . 38

<PAGE>

3.3 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.3.1 Facility Fee. . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.3.2 Letter of Credit Face Amount Fee. . . . . . . . . . . . . . . . 39
3.3.3 Letter of Credit Issuing Fee. . . . . . . . . . . . . . . . . . 39
3.3.4 Additional Fee. . . . . . . . . . . . . . . . . . . . . . . . . 39

ARTICLE IV
LETTERS OF CREDIT. . . . . . . . . . . . . . 39

4.1 Issuance Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.2 Issuances and Extensions. . . . . . . . . . . . . . . . . . . . . . . . 40
4.3 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.4 Other Lenders' Participation. . . . . . . . . . . . . . . . . . . . . . 41
4.5 Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.6 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.7 Deemed Disbursements. . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.8 Nature of Reimbursement Obligations . . . . . . . . . . . . . . . . . . 44
4.9 Increased Costs; Indemnity. . . . . . . . . . . . . . . . . . . . . . . 45

ARTICLE V
CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS . . . . . . . 46

5.1 Eurodollar Rate Lending Unlawful. . . . . . . . . . . . . . . . . . . . 46
5.2 Deposits Unavailable. . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.3 Increased Eurodollar Rate Loan Costs, etc . . . . . . . . . . . . . . . 47
5.4 Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.5 Increased Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . 48
5.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.7 Payments, Computations, etc . . . . . . . . . . . . . . . . . . . . . . 50
5.8 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.9 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.11 Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

SECTION 5.12 Replacement of Lenders . . . . . . . . . . . . . . . . . . . . 53

ARTICLE VI

<PAGE>
Page
----

CONDITIONS TO BORROWING . . . . . . . . . . . . 53

6.1 Initial Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.1.1 Partnership Action. . . . . . . . . . . . . . . . . . . . . . . 53
6.1.2 Delivery of Notes . . . . . . . . . . . . . . . . . . . . . . . 54
6.1.3 Private Placement Debt and Public Partnership
Common Units. . . . . . . . . . . . . . . . . . . . . . . . . 54
6.1.4 Payment of Outstanding Indebtedness, etc. . . . . . . . . . . . 54
6.1.5 Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.1.6 Working Capital Debt. . . . . . . . . . . . . . . . . . . . . . 54
6.1.7 Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . 54
6.1.8 Security Agreement. . . . . . . . . . . . . . . . . . . . . . . 54
6.1.9 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.1.10 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 55
6.1.11 Closing Fees, Expenses, etc . . . . . . . . . . . . . . . . . . 55
6.1.12 Compliance Certificate. . . . . . . . . . . . . . . . . . . . . 56
6.1.13 Insurance Certificate . . . . . . . . . . . . . . . . . . . . . 56

SECTION 6.1.14 Environmental Disclosure . . . . . . . . . . . . . . . . . . 56
SECTION 6.1.15 Solvency Certificate . . . . . . . . . . . . . . . . . . . . 56

6.2 All Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.2.1 Compliance with Warranties, No Default, etc.. . . . . . . . . . 56
6.2.2 Borrowing Request . . . . . . . . . . . . . . . . . . . . . . . 57
6.2.3 Satisfactory Legal Form . . . . . . . . . . . . . . . . . . . . 57

ARTICLE VII
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 58

7.1 Organization, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.2 Partnership Interests.. . . . . . . . . . . . . . . . . . . . . . . . . 58
7.3 Qualification.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.4 Due Authorization, Non-Contravention, etc.. . . . . . . . . . . . . . . 59
7.5 Government Approval, Regulation, etc. . . . . . . . . . . . . . . . . . 60
7.6 Business Financial Statements . . . . . . . . . . . . . . . . . . . . . 60
7.7 No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . . 62
7.8 Litigation, Labor Controversies, etc. . . . . . . . . . . . . . . . . . 62
7.9 Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . . . 62

iii

<PAGE>

Page
----

7.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.11 Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . . . 63
7.12 Environmental Warranties. . . . . . . . . . . . . . . . . . . . . . . . 63
7.13 Regulations G, U and X. . . . . . . . . . . . . . . . . . . . . . . . . 66
7.14 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . 66
7.15 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.16 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.17 Private Placement Debt Representations. . . . . . . . . . . . . . . . . 67
7.18 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . 67

ARTICLE VIII
COVENANTS. . . . . . . . . . . . . . . . 67

8.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.1.1 Financial Information, Reports, Notices, etc. . . . . . . . . . 67
8.1.2 Compliance with Laws, etc.. . . . . . . . . . . . . . . . . . . 71
8.1.3 Maintenance of Properties . . . . . . . . . . . . . . . . . . . 71
8.1.4 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.1.5 Books and Records . . . . . . . . . . . . . . . . . . . . . . . 72
8.1.6 Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.1.7 Environmental Covenant. . . . . . . . . . . . . . . . . . . . . 72
8.1.8 Ranking/Security . . . . . . . . . . . . . . . . . . . . . . . . 73
8.1.9 Clean Down Period. . . . . . . . . . . . . . . . . . . . . . . . 73

8.2 Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.2.1 Business Activities . . . . . . . . . . . . . . . . . . . . . . 73
8.2.2 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.2.3 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
8.2.4 Financial Condition . . . . . . . . . . . . . . . . . . . . . . 79
8.2.5 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 79
8.2.7 Consolidation, Merger, etc. . . . . . . . . . . . . . . . . . . 81
8.2.8 Asset Dispositions, etc.. . . . . . . . . . . . . . . . . . . . 82
8.2.9 Modification of Certain Agreements. . . . . . . . . . . . . . . 84
8.2.10 Transactions with Affiliates. . . . . . . . . . . . . . . . . . 84
8.2.11 Negative Pledges, Restrictive Agreements, etc.. . . . . . . . . 85
8.2.12 Limitation on Issuance of Subsidiary Stock. . . . . . . . . . . 85
8.2.13 Operating Leases. . . . . . . . . . . . . . . . . . . . . . . . 85
8.2.14 Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . 85

<PAGE>

Page
----

SECTION 8.2.15 Organic Documents. . . . . . . . . . . . . . . . . . . . . . 87

ARTICLE IX
EVENTS OF DEFAULT. . . . . . . . . . . . . . 87

9.1 Listing of Events of Default. . . . . . . . . . . . . . . . . . . . . . 87
9.1.1 Non-Payment of Obligations. . . . . . . . . . . . . . . . . . . 87
9.1.2 Breach of Warranty. . . . . . . . . . . . . . . . . . . . . . . 87
9.1.3 Non-Performance of Other Covenants and
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.1.4 Default on Other Indebtedness . . . . . . . . . . . . . . . . . 88
9.1.5 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.1.6 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.1.7 Change in Control . . . . . . . . . . . . . . . . . . . . . . . 88
9.1.8 Bankruptcy, Insolvency, etc.. . . . . . . . . . . . . . . . . . 88
9.1.9 Impairment of Security, etc.. . . . . . . . . . . . . . . . . . 90
9.1.10 Split-Up. . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

SECTION 9.1.11 Partners . . . . . . . . . . . . . . . . . . . . . . . . . . 91

9.2 Action if Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.3 Action if Other Event of Default. . . . . . . . . . . . . . . . . . . . 91

ARTICLE X
THE AGENT. . . . . . . . . . . . . . . . 92

10.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . 92
10.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.3 Liability of Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
10.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
10.6 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.7 Indemnification of Agent. . . . . . . . . . . . . . . . . . . . . . . . 94
10.8 Agent in Individual Capacity. . . . . . . . . . . . . . . . . . . . . . 95
10.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.10 Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.11 Collateral Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 97

<PAGE>

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----

ARTICLE XI
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . 98

11.1 Waivers, Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . . 98
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.3 Payment of Costs and Expenses . . . . . . . . . . . . . . . . . . . . . 99
11.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
11.5 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
11.6 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
11.7 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
11.8 Execution in Counterparts, Effectiveness, etc.. . . . . . . . . . . . . 101
11.9 Governing Law; Entire Agreement . . . . . . . . . . . . . . . . . . . . 102
11.10 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 102
11.11 Sale and Transfer of Loans and Notes; Participations
in Loans and Notes. . . . . . . . . . . . . . . . . . . . . . . . . . 102
11.11.1 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . 102
11.11.2 Participations. . . . . . . . . . . . . . . . . . . . . . . . . 103

11.12 Other Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . 104
11.13 Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . . 104
11.14 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . . . 105

<PAGE>

SCHEDULE AND EXHIBITS

SCHEDULE I - Disclosure Schedule
ITEM 7.2 - Subsidiaries
ITEM 7.3 - Jurisdictions
ITEM 7.5 - Government Approvals
ITEM 7.8 - Litigation
ITEM 7.9 - Real Property
ITEM 7.11 - Employee Benefit Plans
ITEM 7.12 - Environmental Matters
ITEM 7.15 - Capitalization
ITEM 8.2.2(a) - Indebtedness to be Paid on Effective Date
ITEM 8.2.3 - Liens
ITEM 8.2.10 - Transactions with Affiliates
EXHIBIT A - Form of Working Capital Note
EXHIBIT B - Form of Acquisition Note
EXHIBIT C - Form of Swing Note
EXHIBIT D - Form of Borrowing Request
EXHIBIT E - Form of Issuance Request
EXHIBIT F - Form of Continuation/Conversion Notice
EXHIBIT G - Form of Lender Assignment Agreement
EXHIBIT H - Form of Intercreditor Agreement
EXHIBIT I - Form of Commitment Termination Date Extension Request
EXHIBIT J - Form of Security Agreement
EXHIBIT K - Form of Opinion of Counsel to the
Borrowers
EXHIBIT L - Form of Notice of Payment of Seller Debt
EXHIBIT M - Form of Swing Loan Request
EXHIBIT N - Form of Letter of Credit

vii

<PAGE>

CREDIT AGREEMENT

THIS CREDIT AGREEMENT, dated as of December [12], 1996 among CORNERSTONE
PROPANE, L.P., a Delaware limited partnership (the "BORROWER"), the various
financial institutions as are or may become parties hereto (collectively, the
"LENDERS"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BOFA"),
as agent (the "AGENT") for the Lenders,

W I T N E S E T H:

WHEREAS, the Borrower is engaged in the wholesale and retail sale,
distribution, and storage of propane and natural gas and related petroleum
derivative products, leasing propane storage tanks, related retail sales of
supplies and equipment, including home appliances, other business activities
described in the Registration Statement (as defined below) and any other
business reasonably related thereto.

WHEREAS, the Borrower is a limited partnership owned by Cornerstone Propane
Partners, L.P., a Delaware limited partnership (the "Public Partnership"),
Cornerstone Propane GP, Inc., a California corporation (the "Managing General
Partner") and SYN Inc., a [Delaware] corporation (the "Special General Partner",
and collectively with the Public Partnership and the Managing General Partner,
the "Partners");

WHEREAS, the Borrower desires to obtain Commitments from the Lenders
pursuant to which Loans, in a maximum aggregate principal amount at any one time
outstanding not to exceed $125,000,000, will be made to the Borrower from time
to time prior to the Loan Commitment Termination Date; and

WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including ARTICLE VI), to extend such
Commitments and make such Loans to the Borrower; and

WHEREAS, the proceeds of such Loans will be used for acquisitions permitted
by the terms of this Agreement and general working capital purposes of the
Borrower;

<PAGE>

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1 DEFINED TERMS. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):

"ACQUISITION LOAN" is defined in SECTION 2.1.2.

"ACQUISITION LOAN COMMITMENT" means, relative to any Lender, such Lender's
obligation to make Loans pursuant to SECTION 2.1.2.

"ACQUISITION LOAN COMMITMENT AMOUNT" means, on any date, $75,000,000 as
such amount may be reduced from time to time pursuant to SECTION 2.2.

"ACQUISITION LOAN CONVERSION DATE" means the earliest of

(a) December 31, 1999;

(b) the date on which the Acquisition Loan Commitment Amount is
terminated in full or reduced to zero pursuant to SECTION 2.2; and

Upon the occurrence of any event described in CLAUSE (B) or (c), the Acquisition
Loan Commitments shall terminate automatically and without any further action.

"ACQUISITION NOTE" means a promissory note of the Borrower payable to the
Agent, in the form of Exhibit B hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from outstanding
Acquisition

<PAGE>

Loans, and also means all other promissory notes accepted from time
to time in substitution therefor or renewal thereof.

"ACQUISITION PERCENTAGE" means, relative to any Lender, the Acquisition
Percentage set forth opposite its signature hereto or set forth in the Lender
Assignment Agreement, as such percentage may be adjusted from time to time
pursuant to Lender Assignment Agreement(s) executed by such Lender and its
Assignee Lender(s) and delivered pursuant to SECTION 11.11.1.

"AFFILIATE" of any Person means as applied to any Person, any other Person
directly or indirectly controlling or controlled by or under common control with
such Person, PROVIDED that, for purposes of this definition, "control" as used
with respect to any Person shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether as a general partner or through the ownership of voting
securities or by contract or otherwise. As applied to the Borrower and its
Restricted Subsidiaries, "Affiliate" includes without limitation the Managing
General Partner and the Public Partnership.

"AGENT" is defined in the PREAMBLE and includes each other Person as shall
have subsequently been appointed as the successor Agent pursuant to
SECTION 10.9.

"AGENT-RELATED PERSON" means BofA in its capacity as agent and any
successor agent arising under SECTION 10.9 and any Issuer hereunder, together
with their respective Affiliates, and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.

"AGREEMENT" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.

"ALTERNATE BASE RATE" means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum equal to the higher of

<PAGE>

(a) the rate of interest most recently announced by the Agent at its
principal office as its reference rate for Dollar loans; and

(b) the Federal Funds Rate most recently determined by the Agent plus
1/2 of 1%.

The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Reference Lender in connection with extensions of
credit. Changes in the rate of interest on that portion of any Loans maintained
as Base Rate Loans will take effect simultaneously with each change in the
Alternate Base Rate. The Agent will give notice promptly to the Borrower and
the Lenders of changes in the Alternate Base Rate.

"APPLICABLE BASE RATE MARGIN" means, with respect to any Base Rate Loan,
the then applicable per annum rate set forth in the Pricing Grid; PROVIDED, that
the Applicable Base Rate Margin for the period from the Effective Date through
(and including) the first Quarterly Payment Date of 1997 shall be determined on
the assumption that Tier ___________ is in effect until the Financial Statement
Delivery Date following March 31, 1997.

"APPLICABLE EURODOLLAR RATE MARGIN" means, with respect to any Eurodollar
Rate Loan, the then applicable per annum rate set forth in the Pricing Grid;
PROVIDED, that the Applicable Eurodollar Rate Margin for the period from the
Effective Date through (and including) the delivery of the first Quarterly
Payment Date of 1997 shall be determined on the assumption that Tier
_________________ is in effect until the Financial Statement Delivery Date
following March 31, 1997.

"ASSET DISPOSITION" is defined in SECTION 8.2.8.

"ASSETS" mean the assets conveyed to the Borrower pursuant to the
Conveyance Documents.

"ASSIGNEE LENDER" is defined in SECTION 11.11.1.

"AUTHORIZED OFFICER" means, relative to any Obligor, those of its officers
(or, in the case of the Borrower, those officers of the Managing General
Partner) whose signatures and incumbency

<PAGE>

shall have been certified to the Agent and the Lenders pursuant to SECTION 6.1.1
or in a similar certificate delivered at any subsequent time during the term of
this Agreement.

["AVAILABLE CASH" means

(a) the sum of (i) all cash and cash equivalents of the Partnership
Group on hand at the end of such Fiscal Quarter and (ii) all additional
cash and cash equivalents of the Partnership Group on hand on the date of
determination of Available Cash with respect to such Fiscal Quarter
resulting from borrowings for working capital purposes made subsequent to
the end of such Fiscal Quarter, less

(b) the amount of any cash reserves that is necessary or appropriate
in the reasonable discretion of the Managing General Partner to (i) provide
for the proper conduct of the business of the Partnership Group (including
reserves for future capital expenditures and for anticipated future credit
needs of the Partnership Group) subsequent to such Fiscal Quarter, (ii)
comply with applicable law or any loan agreement, security agreement,
mortgage, debt instrument or other agreement or obligation to which any
member of the Partnership Group is a party or by which it is bound or its
assets are subject, or (iii) provide funds for distributions to Unitholders
and the General Partners in respect of any one or more of the next four
Fiscal Quarters; provided, however, that the Managing General Partner may
not establish cash reserves pursuant to (iii) above if the effect of such
reserves would be that the Public Partnership is unable to distribute the
Minimum Quarterly Distribution on all Common Units with respect to such
Fiscal Quarter; and, provided, further, that disbursements made by a either
member of the Partnership Group or cash reserves established, increased or
reduced after the end of such Fiscal Quarter but on or before the date of
determination of Available Cash with respect to such Fiscal Quarter shall
be deemed to have been made, established, increased or reduced for purposes
of determining Available Cash within such Fiscal Quarter if the Managing
General so determines. Notwithstanding the foregoing, "Available Cash"
with respect to the Fiscal

<PAGE>

Quarter in which the liquidation of the Public
Partnership occurs and any subsequent Fiscal Quarter shall equal zero.]

"BANKRUPTCY CODE" means Title 11 of the United States Code or any successor
statute.

"BANKRUPTCY LAW" is defined in SECTION 9.1.8.

"BASE RATE LOAN" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.

"BOFA" is defined in the PREAMBLE.

"BORROWER" is defined in the PREAMBLE.

"BORROWING" means the Loans of the same type and, in the case of Eurodollar
Rate Loans, having the same Interest Period made by all Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
SECTION 2.3.

"BORROWING REQUEST" means a loan request and certificate duly executed by
an Authorized Officer of the Borrower, substantially in the form of EXHIBIT D
hereto.

"BUSINESS DAY" means

(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in Chicago,
Illinois, San Francisco, California or New York, New York; and

(b) relative to the making, continuing, prepaying or repaying of any
Eurodollar Rate Loans, any day on which dealings in Dollars are carried on
in the interbank eurodollar market.

"CAPITALIZED LEASE LIABILITIES" means all monetary obligations of any
Borrower or any Subsidiary under any leasing or similar arrangement which, in
accordance with GAAP, would be classified as capitalized leases, and, for
purposes of this Agreement and each other Loan Document, the amount of such

<PAGE>

obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.

"CAPITAL STOCK" means, with respect to any Person, any capital stock
(including preferred stock), shares, units, interests, participations or other
ownership interests (however designated, including without limitation such items
as they may apply to a partnership, limited liability company or similar Person)
of such Person and any rights, warrants or options to purchase any thereof.

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

"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.

"CHANGE IN CONTROL" means any of the following events or circumstances:

(i) the liquidation or dissolution of the Managing General Partner,

(ii) any merger or consolidation of the Managing General Partner with
or into any Person, other than NPS or any of its Affiliates if the
Managing General Partner is not the surviving entity thereof, or any
sale, whether direct or indirect, of substantially all of the assets
of the Managing General Partner to any person or group (as such term
is used in Section 13(d) and 14(d) of the Exchange Act), other than
NPS or any of its Affiliates,

(iii) any Person or group other than NPS or any of its Affiliates, is or
becomes the beneficial owner, directly or indirectly, of more than 50%
of the total voting power in the aggregate then outstanding of all
classes of stock of the Managing General Partner then

<PAGE>

outstanding normally entitled to vote in elections of directors, or

(iv) during any period of 12 consecutive months after the Closing
Date, individuals who at the beginning of such 12 month period (or
persons nominated by such members of the Board of Directors of the
Managing General Partner to succeed them) constitute the Board of
Directors of the Managing General Partner cease, for any reason, to
constitute a majority of the Board of Directors of the Managing
General Partner then in office;

provided that a transfer of a general partnership interest shall not
constitute a Change of Control; and notwithstanding the foregoing, it
shall not be a Change of Control as it relates to clause (ii), (iii),
or (iv) above if the Chief Executive Officer and the Chief Financial
Officer of the Borrower following any of the events described above in
clause (ii), (iii) or (iv) retain the same positions with the same
levels of authority as they previously had prior to such event.

"CLOSING DATE" means the date on which all conditions precedent set forth
in SECTION 6.1 are satisfied or waived by all Lenders and shall occur on or
before December 31, 1996 or such later date upon which the Borrower and the
Lenders shall mutually agree.

"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

"COLLATERAL" is defined in SECTION 5.11.

"COLLATERAL AGENT" means the collateral agent engaged by the Lenders and
the Private Placement Debt holders to hold and maintain perfected security
interests in the Collateral on behalf of the holders of the Obligations, the
Private Placement Debt and the Parity Debt and as more fully described in the
Intercreditor Agreement.

<PAGE>

"COMMITMENT" means, as the context may require, a Lender's Working Capital
Loan Commitment or Acquisition Loan Commitment, or both.

"COMMITMENT AMOUNT" means, as the context may require, either the Working
Capital Loan Commitment Amount or the Acquisition Loan Commitment Amount.

COMMITMENT TERMINATION DATE EXTENSION REQUEST means an extension request
executed by an Authorized Officer of the Borrower, substantially in the form of
EXHIBIT I hereto.

"COMMITMENT TERMINATION EVENT" means

(a) the occurrence of any Default described in CLAUSES (A), (B) or
with respect to the Borrower or the Managing General Partner, (E) of
SECTION 9.1.8; or

(b) the occurrence and continuance of any other Event of Default and
either

(i) the declaration of the Loans to be due and payable pursuant
to SECTION 9.3, or

(ii) in the absence of such declaration, the giving of notice by
the Agent, acting at the direction of the Required Lenders, to the
Borrower that the Commitments have been terminated.

"COMMODITY HEDGING AGREEMENT" means any agreement or arrangement designed
solely to protect the Borrower against fluctuations in the price of propane or
natural gas with respect to quantities of propane or natural gas that the
Borrower reasonably expects to purchase from suppliers, sell to its customers or
need for its inventory during the period covered by such agreement or
arrangement.

"COMMON UNITS" means the common limited partner interests of the Public
Partnership.

<PAGE>

"COMMON UNITS ISSUANCE" means issuance of Common Units by the Public
Partnership with net proceeds of at least $162,500,000 received by the Public
Partnership.

"CONSOLIDATED" or "CONSOLIDATED," when used with reference to any
accounting term, means the amount described by such accounting term, determined
on a consolidated basis in accordance with GAAP, after elimination of
intercompany items.

"CONSOLIDATED CASH FLOW" means with respect to the Borrower at any date of
determination, for the period of four consecutive Fiscal Quarters most recently
completed at least 45 days prior to such date of determination,

(i) the sum of, without duplication, the amounts for such period, taken as
a single accounting period, of

(a) consolidated net income,

(b) consolidated non-cash items,

(d) consolidated income tax expense, and

(e) all fees, costs and expenses with respect to the retirement or
repayment of Indebtedness existing immediately prior to the
closing, to the extent that the same were deducted from
consolidated net income LESS

(ii) the sum of, without duplication, the amounts for such period, taken on
a single accounting period, any non-cash items added in the
determination of such consolidated net income for such period.

Consolidated Cash Flow shall be calculated after giving effect, on a
pro forma basis for the four consecutive Fiscal Quarters most recently
completed, to, without duplication, any asset sales or asset acquisitions
(including without limitation any asset acquisition giving rise to the need
to make such calculation as a result of the Borrower or one of

<PAGE>

its Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the asset acquisition) incurring, assuming or
otherwise being liable for acquired debt) occurring during the period
commencing on the first day of such period to and including the date of
determination (the "Reference Period"), as if such asset sale or asset
acquisition occurred on the first day of the Reference Period; provided,
that Consolidated Cash Flow generated by an acquired business or asset
shall be determined on the basis of, without duplication, (a) the actual
gross profit (revenues minus cost of goods sold) of the acquired business
or asset during the immediately preceding four full Fiscal Quarters) minus
(b) the pro forma expenses that would have been incurred by the Borrower in
the operation of such acquired business or asset during such period
computed on the basis of personnel expenses for employees retained or to be
retained by the Borrower in the operation of such acquired business or
asset and non-personnel costs and expenses incurred by the Borrower or the
Managing General Partner in the operation of the Borrower's business at
similarly situated facilities. If the applicable Reference Period for any
calculation of Consolidated Cash Flow shall include a partial period
occurring prior to the Closing Date, then such Consolidated Cash Flow shall
be calculated based upon the Consolidated Cash Flow on a pro forma basis
for such portion of the Reference Period prior to the Closing Date (giving
effect to the transactions occurring on the Closing Date) and the
Consolidated Cash Flow for the remaining portion of the Reference Period
occurring on and after the Closing Date, giving pro forma effect, as
described in the preceding sentences, to all applicable transactions
occurring on the Closing Date or otherwise.

"CONSOLIDATED CASH FLOW COVERAGE OF DEBT SERVICE" means pro forma
Consolidated Cash Flow for such period of four Fiscal Quarters divided by pro
forma cash interest expense and scheduled principal payments payable during the
four consecutive Fiscal Quarters following the date of determination associated
with the Private Placement Debt and other Indebtedness (other than the
Obligations, except as provided below) and including the actual interest
payments on Working Capital Loans and Acquisition Loans

<PAGE>

during the most recent four Fiscal Quarters and including all principal
amounts relating to Working Capital Loans during the 12 month period
immediately prior to the termination or final maturity thereof (unless
extended, renewed or replaced), and including principal payments relating
to Acquisition Loans based on the assumption that the Acquisition Loan
Conversion Date has occurred. This calculation will be after giving
effect to any Indebtedness proposed to be incurred on such date and to
the repayment of any Indebtedness that is being refinanced and repaid
within 12 months from such date of determination.

"CONSOLIDATED CASH FLOW COVERAGE OF MAXIMUM DEBT SERVICE" means pro forma
Consolidated Cash Flow for such period of four Fiscal Quarters divided by the
maximum pro forma cash interest and scheduled principal payments due during any
future period of four consecutive Fiscal Quarters (from the Closing Date through
the Stated Maturity Date) associated with the Private Placement Debt and all
other Indebtedness (other than the Obligations, except as provided below)
outstanding and including the actual interest payments associated with the
Working Capital Loans and Acquisition Loans during the most recent four Fiscal
Quarters and including all principal amounts relating to the Working Capital
Loans during the 12 month period immediately prior to the termination or final
maturity thereof (unless extended, renewed or replaced) and including principal
payments of Acquisition Loans based on the assumption that the Acquisition Loan
Conversion Date has occurred. This calculation will be after giving effect to
any Indebtedness proposed to be incurred on such date and to the repayment of
any Indebtedness that is being refinanced and repaid within 12 months from such
date of determination.

"CONSOLIDATED NET WORTH" means at any time of determination:

(a) the total assets of the Borrower and its Restricted Subsidiaries which
would be shown as assets on a consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as of such time, prepared in accordance with GAAP, MINUS

(b) the total liabilities of the Borrower and its Restricted Subsidiaries
which would be shown as liabilities on a

<PAGE>

consolidated balance sheet of the Borrower and, its Restricted Subsidiaries as
such time, prepared in accordance with GAAP.

"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other
Person. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount of the debt, obligation or other liability
guaranteed thereby.

"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of EXHIBIT D hereto.

"CONTROLLED GROUP" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.

"CONVEYANCE DOCUMENTS" means (a)(i) [the Contribution and Assumption
Agreement, dated as of the Closing Date, among the Borrower and the [Managing]
General Partner and Cornerstone Service Corporation, and (ii) the Conveyance,
Contribution and Assumption Agreement, dated as of the Closing Date, among the
Public Partnership, the Borrower and the [Managing] General Partner, and (b)
each of the individual conveyances, assignments and bills of sale delivered to
the Borrower pursuant to the agreements referred to in the foregoing clause
(a)].

"COVERAGE TEST" means the pro forma ratio of Consolidated Cash Flow to
Consolidated Interest Expense.

<PAGE>

"DEBT" means all Indebtedness of the type described in CLAUSES (a), (b),
and (c) of the definition of Indebtedness and all Indebtedness of the type
described in CLAUSE (i) of such definition in respect of Indebtedness described
in CLAUSES (a), (b), and (c) of such definition.

"DEFAULT" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.

"DISBURSEMENT DATE" is defined in SECTION 4.5.

"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Agent and the Required
Lenders.

"DISQUALIFIED STOCK" means, with respect to any Person, any Capital Stock
of such Person which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable or exercisable), upon the
happening of any event or otherwise (i) matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, (ii) is convertible into or
exchangeable or exercisable for Indebtedness or Disqualified Stock or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the first anniversary of the stated maturity of such Capital
Stock.

"DOLLAR" and the sign "$" mean lawful money of the United States.

"EFFECTIVE DATE" means the date this Agreement becomes effective pursuant
to SECTION 11.8.

"ENVIRONMENTAL CLAIM" means any written or oral notice, claim, demand or
other communication (collectively, a "claim") for investigatory costs, cleanup
costs, Government Authority response costs, damages to natural resources or
other property, personal injuries, fines or penalties arising out of, based on
or resulting from (a) the presence, or release into the environment, of any
Hazardous Material at any location, or (b) circumstances forming the basis of
any violation, or alleged violation, of any

<PAGE>

Environmental Law. The term "Environmental Claim" shall include, without
limitation, any claim by any Government Authority for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and any claim by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the
environment.

"ENVIRONMENTAL LAW" means any law, regulation, statute, ordinance, code,
rule, regulation, order or guideline (including consent decrees or
administrative orders) relating to human health, safety or the environment or to
emissions, discharges, releases or threatened releases of Hazardous Materials
into the environment (including, without limitation, ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata), or otherwise relating
to the presence, existence, manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.

"EUROCURRENCY RESERVE PERCENTAGE" is defined in SECTION 3.2.1

"EURODOLLAR OFFICE" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender, as the case may be, to each other Person
party hereto. A Lender may have separate Eurodollar Offices for purposes of
making, maintaining or continuing, as the case may be, Base Rate Loans and
Eurodollar Rate Loans.

"EURODOLLAR RATE" is defined in SECTION 3.2.1.

<PAGE>

"EURODOLLAR RATE LOAN" means a Loan bearing interest, at all times during
an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the Eurodollar Rate (Reserve Adjusted).

"EURODOLLAR RATE (RESERVE ADJUSTED)" is defined in SECTION 3.2.1.

"EVENT OF DEFAULT" is defined in SECTION 9.1.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to

(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York; or

(b) if such rate is not so published for any day which is a Business
Day, the average of the quotations for such day on such transactions
received by the Reference Lender from three federal funds brokers of
recognized standing selected by it.

"FINANCIAL STATEMENT DELIVERY DATE" means the earlier of each date on which
the Borrower delivers, or is required to deliver, financial statements pursuant
to SECTION 8.1.1(a) or SECTION 8.1.1(b), as the case may be.

"FISCAL QUARTER" means any quarter of a Fiscal Year.

"FISCAL YEAR" means any period of twelve consecutive calendar months ending
on June 30; references to a Fiscal Year with a number corresponding to any
calendar year (E.G., the "1996 Fiscal Year") refer to the Fiscal Year ending on
the June 30 occurring during such calendar year.

<PAGE>

"F.R.S. BOARD" means the Board of Governors of the Federal Reserve System
or any successor thereto.

"GAAP" is defined in SECTION 1.4.

"GENERAL COLLATERAL" is defined in SECTION 5.11.

"GENERAL PARTNERS" means the Managing General Partner and the Special
General Partner.

"GOVERNMENT AUTHORITY" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
any governmental or quasi-governmental unit, whether federal, state, county,
district, city or other political subdivision, foreign or otherwise and whether
now or hereafter in existence, or any officer or official of any thereof.

"GUARANTY" means the Guaranty executed and delivered pursuant to
SECTION 6.1.16, substantially in the form of EXHIBIT hereto, as amended,
supplemented, restated or otherwise modified from time to time.

"HAZARDOUS MATERIAL" means

(a) any "hazardous substance", as defined by CERCLA;

(b) any "hazardous waste", as defined by the Resource Conservation
and Recovery Act, as amended;

(d) any petroleum product or related compound;

(e) any polychlorinated biphenyls or asbestos;

(f) any radioactive material or substance; or

(g) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material, substance or waste within the meaning of any other
applicable federal, state or local law, regulation, statute, ordinance,
order or

<PAGE>

requirement (including consent decrees and administrative orders
issued to any Borrower or Subsidiary) relating to or imposing liability or
standards of conduct concerning any hazardous, toxic or dangerous waste,
substance or material, all as amended or hereafter amended.

"HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.

"IMPERMISSIBLE QUALIFICATION" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification

(a) which is of a "going concern" or similar nature;

(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or

(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Borrower to be in default of any of its obligations under
SECTION 8.2.4.

"INCLUDING" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of EJUSDEM GENERIS
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.

"INDEBTEDNESS" of any Person means, without duplication:

(a) all indebtedness for borrowed money;

<PAGE>

(b) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services;

(c) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with
the acquisition of property, assets or businesses;

(d) all indebtedness created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property);

(e) all Capitalized Lease Liabilities;

(f) all indebtedness referred to in clauses (a) through (e) above
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contracts rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Indebtedness;

(g) all capital stock of such Person that is redeemable prior to the
final maturity of the Private Placement Debt, valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued
dividends;

(h) any redeemable preferred stock redeemable prior to the final
maturity of the Private Placement Debt of any Restricted Subsidiary of such
Person valued at the sum of the liquidation preference thereof or any
mandatory redemption payment obligations in respect thereof plus, in either
case, accrued dividends thereon; and

(i) all guaranty obligations of such Person in respect of indebtedness
or obligations of others of the kinds referred to in clauses (a) through
(h) above. For purposes of this definition, undrawn letters of credit,
trade

<PAGE>

accounts payable, accrued interest and other accrued expenses and
customer credit balances arising in the ordinary course of business on
ordinary terms shall not constitute Indebtedness.

"INDEMNIFIED LIABILITIES" is defined in SECTION 11.4.

"INDEMNIFIED PARTIES" is defined in SECTION 11.4.

"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement executed and
delivered pursuant to SECTION 6.1.7, substantially in the form of EXHIBIT H
hereto, as amended, supplemented, restated or otherwise modified from time to
time.

"INTEREST EXPENSE" means, for any period, the aggregate consolidated
interest expense of the Borrower and all Subsidiaries determined in accordance
with GAAP but including, without duplication, all commissions, discounts and
other fees and charges owed with respect to letters of credit and banker's
acceptances, net costs under interest rate protection agreements and the portion
of any Capitalized Lease Liabilities allocable to consolidated interest expense
and the product of (A) the amount of all dividends (whether in cash or otherwise
(except dividends payable solely in shares of Qualified Capital Stock)) on all
Disqualified Stock of such Person and its Subsidiaries, times (B) a fraction,
the numerator of which is one and the denominator of which is one minus the then
current effective consolidated federal, state and local income tax rate of such
Person, expressed as a decimal.

"INTEREST PERIODS" means, relative to any Eurodollar Rate Loans, the period
beginning on (and including) the date on which such Eurodollar Rate Loan is made
or continued as, or converted into, a Eurodollar Rate Loan pursuant to SECTION
2.3 or 2.4 and ending on (but excluding) the day which numerically corresponds
to such date one, two, three or six months thereafter (or, if such month as no
numerically corresponding day, on the last Business Day of such month), in each
case as the Borrower may select in its relevant notice pursuant to SECTION 2.3
or 2.4; PROVIDED, HOWEVER, that

<PAGE>

(a) the Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more
than [ten] different dates;

(b) Interest Periods commencing on the same date for Loans comprising
part of the same Borrowing shall be of the same duration;

(c) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless, if such Interest Period applied to Eurodollar Rate
Loans, such next following Business Day is the first Business Day of a
calendar month, in which case such Interest Period shall end on the
Business Day next preceding such numerically corresponding day); and

(d) no Interest Period may end later than the date set forth in
CLAUSE (a) of the definition "WORKING CAPITAL LOAN COMMITMENT TERMINATION
DATE", in the case of Interest Periods for Working Capital Loans, or in the
case of Interest Periods for Acquisition Loans any date on which a
principal payment is due if it would be necessary to repay Acquisition
Loans before the end of the Interest Period applicable thereto.

"INTEREST RATE AGREEMENT" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or arrangement designed
solely to protect the Borrower against fluctuations in interest rates on
Indebtedness outstanding under the Working Capital Loan Commitments or the
Acquisition Loan Commitments as long as it is provided by a Lender or an
Affiliate of a Lender.

"INVESTMENT" means, relative to any Person,

(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business);

<PAGE>

(b) any Contingent Liability of such Person; and

The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.

"ISSUANCE REQUEST" means a request and certificate duly executed by an
Authorized Officer of the Borrower, in substantially the form of EXHIBIT E
attached hereto (with such changes thereto as may be agreed upon from time to
time by the Agent and the Borrower).

"ISSUER" means BofA or any successor issuer thereto as may be reasonably
agreed upon by the Agent, Required Lenders and Borrower.

"LENDER ASSIGNMENT AGREEMENT" means a Lender Assignment Agreement
substantially in the form of EXHIBIT G hereto.

"LENDERS" is defined in the PREAMBLE.

"LETTER OF CREDIT" is defined in SECTION 4.1.

"LETTER OF CREDIT AVAILABILITY" means, at any time, the lesser of

(a) the excess of

(i) $30,000,000 at any time prior to March 31, 1997 or
$20,000,000 at any time thereafter

OVER

(ii) the then Letter of Credit Outstandings,

<PAGE>

(b) the Working Capital Loan Commitment Amount at such time.

"LETTER OF CREDIT OUTSTANDINGS" means, at any time, an amount equal to the
sum of

(a) the aggregate Stated Amount at such time of all Letters of Credit
then outstanding and undrawn (as such aggregate Stated Amount shall be
adjusted, from time to time, as a result of drawings, the issuance of
Letters of Credit, or otherwise),

PLUS

(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.

"LIEN" shall mean any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not including
the interest of a lessor under an operating lease.

"LOAN" means, as the context may require, either a Working Capital Loan, an
Acquisition Loan or a Swing Loan.

"LOAN COMMITMENT TERMINATION DATE" means, as the context may require,
either the Working Capital Loan Commitment Termination Date or the Acquisition
Loan Conversion Date.

<PAGE>

"LOAN DOCUMENT" means this Agreement, the Notes, the Security Agreement and
any pledge agreement, security agreement, guaranty, or mortgage delivered to the
Agent pursuant to this Agreement.

"MANAGING GENERAL PARTNER" is defined in the recitals and shall include any
successor thereto.

"MINIMUM QUARTERLY DISTRIBUTION" shall have the meaning given to it in the
Partnership Agreement.

"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA.

"NET INCOME" means with respect to any Person or any assets the net income
(or loss) of such Person or arising from such assets; PROVIDED that there shall
be specifically excluded therefrom (a) gains or losses from the sale of capital
assets outside the ordinary course of business, (b) gains or losses arising from
extraordinary items, and (c) any net income of any Subsidiary of the referent
Person if such Subsidiary is subject to restrictions, directly or indirectly
(including, without limitation, restrictions imposed by operation of the terms
of its Organic Documents or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary), on the
payment of dividends or the making of distributions by such Subsidiary, directly
or indirectly, to the referent Person, except that (A) the referent Person's
equity in the net income of any such Subsidiary for such period shall be
included in such consolidated Net Income up to the aggregate amount of cash
actually distributed by such Subsidiary during such period to the referent
Person as a dividend or other distribution and (B) the referent Person's equity
in a net loss of any Subsidiary subject to such restrictions for such period
shall be included in determining such Net Income.

"NGC" means Northwestern Growth Corporation, a South Dakota corporation and
a wholly owned subsidiary of NPS.

"NOTE" means, as the context may require, either a Working Capital Note, an
Acquisition Note or a Swing Note.

<PAGE>

"NOTE AGREEMENT" means, [collectively, the several substantially identical]
the note agreement[s] dated __________ pursuant to which the Private Placement
Debt shall be issued.

"NPS" means Northwestern Public Service Company, a Delaware company.

"OBLIGATIONS" means the obligations of the Borrower to the Agent and the
Lenders under this Agreement, the Notes and each other Loan Document.

"OBLIGOR" means the Borrower or any other Person (other than the Agent or
any Lender) obligated under any Loan Document.

"OPERATIVE AGREEMENTS" means __________________________

"ORGANIC DOCUMENT" means, relative to any Obligor, its partnership
agreement, certificate of incorporation, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of capital stock or other equity interests.

"PARITY DEBT" means the obligations of the Borrower described in clauses
(c), (d), (h), and (l) of, and subsection (i) of the last paragraph of, SECTION
8.2.2 which is secured and will rank pari passu with the Obligations hereunder.

"PARTICIPANT" is defined in SECTION 11.11.2.

"PARTNERSHIP AGREEMENT" means the Amended and Restated Agreement of Limited
Partnership of the Borrower as in effect on the Closing Date and as the same may
be from time to time amended, supplemented or otherwise modified subject to
SECTION 8.2.9.

"PARTNERSHIP GROUP" means the Borrower and the Public Partnership.

"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

<PAGE>

"PENSION PLAN" means a "pension plan", as such term is defined in section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in section 4001(a)(3) of ERISA), and to which the Borrower or
any corporation, trade or business that is, along with the Borrower, a member of
a Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under section 4069 of ERISA.

"PERCENTAGE" means the Working Capital Percentage or the Acquisition
Percentage, as applicable, or both.

"PERSON" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity, whether
acting in an individual, fiduciary or other capacity.

"PLAN" means any Pension Plan or Welfare Plan.

<PAGE>

"PRICING GRID" means the pricing grid (the last three columns being
expressed in hundredths of one percent) as follows:

- -------------------------------------------------------------------------------
Total
Funded
Indebtedness to Applicable Applicable
Consolidated Eurodollar Facility Base Rate
Tier Cash Flow Ratio Rate Margin Fee Margin
- -------------------------------------------------------------------------------
I (2.75 25.0 12.5 0.0
- -------------------------------------------------------------------------------
)=2.75
II but
(3.25 32.5 17.5 0.0
- -------------------------------------------------------------------------------
III )=3.25
but (3.75 47.5 22.5 0.0
- -------------------------------------------------------------------------------
)=3.75
IV but (4.25 60.0 27.5 0.0
- -------------------------------------------------------------------------------
V )=4.25 80.0 32.5 12.5
- -------------------------------------------------------------------------------

The applicable Tier on the Pricing Grid shall be established on each Financial
Statement Delivery Date and shall be applicable until the next Financial
Statement Delivery Date; PROVIDED, that for the period from the Effective Date
to the Financial Statement Delivery Date for the Fiscal Quarter ending March 31,
1997 the applicable level shall be Tier [IV]; and provided further that if the
financial statements required to be delivered pursuant to SECTION 8.1.1(a) or
SECTION 8.1.1(b) shall not be delivered when due, the applicable level shall be
Tier V from the due date until the date so delivered.

"PRIVATE PLACEMENT DEBT" means the issuance of $220 million aggregate
principal amount of Senior Secured Notes, with net proceeds of not less than
$210 million, having a stated interest rate, prior to default, of 7.53% per
annum.

"PUBLIC PARTNERSHIP" is defined in the recitals hereto.

<PAGE>

""QUALIFIED CAPITAL STOCK" means Capital Stock not constituting
Disqualified Stock.

"QUARTERLY PAYMENT DATE" means the last day of each March, June, September,
and December or, if any such day is not a Business Day, the next succeeding
Business Day.

"REFERENCE LENDER" shall mean BofA, so long as BofA is the Agent, or such
Lender which may serve as a successor Agent to BofA pursuant to SECTION 10.9.

"REFERENCE PERIOD", with respect to any incurrence of Indebtedness, or any
transaction pursuant to SECTION 8.2.10, means the period of four consecutive
Fiscal Quarters ending with the last full Fiscal Quarter for which financial
information in respect thereof is available immediately preceding the date of
such incurrence or transaction.

"REGISTRATION STATEMENT" means the registration statement originally filed
on October 10, 1996 on Form S-1 by the Public Partnership with the Securities
and Exchange Commission, as amended through Amendment Number ____ dated
_____________.

"REGULATORY CHANGE" means, relative to the Agent or any Lender, any change
after the date hereof in any (or the adoption after the date hereof of any new):

(a) United States Federal or state law or foreign law applicable to
the Agent or such Lender; or

(b) regulation, interpretation, directive, or request (whether or not
having the force of law) applicable to such Agent or such Lender or any
court or government authority charged with the interpretation or
administration of any law referred to in the immediately preceding CLAUSE
(a) or of any fiscal, monetary, or other authority having jurisdiction over
the Agent or such Lender.

"REIMBURSEMENT OBLIGATIONS" is defined in SECTION 4.6.

"RELEASE" means a "release", as such term is defined in CERCLA.

<PAGE>

"REQUIRED LENDERS" means Lenders holding not less than 50% of the
Commitments (or, if the Commitments are terminated, Lenders having not less than
50% of the aggregate outstanding Obligations).

"RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 690, ET SEQ., as in effect from time to
time.

"RESPONSIBLE OFFICER" means with respect to any Person, the President, any
Senior Vice President, the Chief Financial Officer, the Treasurer and the
Secretary of such Person and any other officer of such Person who is responsible
for compliance with or performance of any obligation under this Agreement with
respect to the Borrower, any such officer of any General Partner of the Borrower
and, in any case, any employee of the Borrower performing any of the above
functions.

"RESTRICTED PAYMENT" means any payment or other distribution in respect of
any partnership interest in the Borrower, except a distribution payable solely
in additional partnership interests in the Borrower, and any payment by the
Borrower or a Restricted Subsidiary on account of the redemption, retirement,
purchase or other acquisition of any partnership interest in the Borrower.

"RESTRICTED SUBSIDIARY" means any wholly owned Subsidiary of the Borrower
organized under the laws of the United States or any state thereof or the
District of Columbia, none of the capital stock or ownership interests of which
is owned by Unrestricted Subsidiaries and substantially all of the operating
assets of which are located in, and substantially all of the business of which
is conducted within the United States and is designated as a Restricted
Subsidiary or which shall be designated as a Restricted Subsidiary by the
Managing General Partner at a subsequent date; provided, however, that (a) to
the extent a newly formed or acquired Subsidiary meeting the foregoing
requirements is not declared either a Restricted Subsidiary or an Unrestricted
Subsidiary within 90 days of its formation or acquisition, such subsidiary shall
be deemed a Restricted Subsidiary and (b) a Restricted Subsidiary may be
designated as

<PAGE>

an Unrestricted Subsidiary in accordance with the provisions of SECTION 8.2.15.

"SECURITY AGREEMENT" means the Security Agreement executed and delivered
pursuant to SECTION 6.1.8, substantially in the form of EXHIBIT J hereto, as
amended, supplemented, restated or otherwise modified from time to time.

"SECURITY DOCUMENTS" means any of the documents securing the Notes.

"STATED AMOUNT" of each Letter of Credit means the "Stated Amount" as
defined therein.

"STATED EXPIRY DATE" is defined in SECTION 4.1.

"STATED MATURITY DATE" means with respect to the Working Capital Loans,
Swing Loans and Letters of Credit, December 31, 1999 subject to SECTION 3.1.1,
and with respect to the Acquisition Loans December 31, 2003.

"SUBSIDIARY" means, with respect to any Person, any corporation, limited
liability company, partnership, joint venture, association, trust or other
entity of which (or in which) more than 50% of (a) the issued and outstanding
Capital Stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time Capital Stock
of any other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interests in the capital
or profits of such partnership, limited liability company, joint venture or
association with ordinary voting power to elect a majority of the board of
directors (or Persons performing similar functions) of such partnership, limited
liability company, joint venture or association, or (c) the beneficial interests
in such trust or other entity with ordinary voting power to elect a majority of
the board of trustees (or Persons performing similar functions) of such trust or
other entity, is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries, or by one or
more of such Person's other Subsidiaries.

<PAGE>

"SWING LINE" is defined in SECTION 2.7.

"SWING LINE LENDER" is defined in SECTION 2.7.

"SWING LOAN" is defined in SECTION 2.7.

"SWING LOAN REQUEST" means a loan request and certificate duly executed by
an Authorized Officer of the Borrower on behalf of the Borrower and
substantially in the form of EXHIBIT M.

"SWING NOTE" means a promissory note of the Borrower payable to the Swing
Line Lender, in the form of EXHIBIT C hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of such Borrower to such Swing Line Lender resulting from
outstanding Swing Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.

"TAXES" is defined in SECTION 5.6.

"TOTAL FUNDED INDEBTEDNESS TO CONSOLIDATED CASH FLOW RATIO" means the ratio
of consolidated Debt for the Borrower and its Subsidiaries to Consolidated Cash
Flow as at any Fiscal Quarter end for the period then ending.

"TRANSFER" means the transfer of the Assets and the assumption of the
liabilities contemplated by the Conveyance Documents.

"TYPE" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a Eurodollar Rate Loan.

"UNITHOLDERS" shall have the meaning given to it in the Partnership
Agreement.

"UNITED STATES" or "U.S." means the United States of America, its fifty
States and the District of Columbia.

"UNRESTRICTED SUBSIDIARY" means any Subsidiary other than a Restricted
Subsidiary.

<PAGE>

"WELFARE PLAN" means a "welfare plan", as such term is defined in section
3(1) of ERISA.

"WORKING CAPITAL LOAN" is defined in SECTION 2.1.1.

"WORKING CAPITAL LOAN COMMITMENT" means, relative to any Lender, such
Lender's obligation to make Working Capital Loans pursuant to SECTION 2.1.1.

"WORKING CAPITAL LOAN COMMITMENT AMOUNT" means, on any date, $50,000,000,
as such amount may be reduced from time to time pursuant to SECTION 2.2.

"WORKING CAPITAL LOAN COMMITMENT TERMINATION DATE" means the earliest of

(a) December 31, 1999, subject to SECTION 3.1.1;

(b) the date on which the Working Capital Loan Commitment Amount is
terminated in full or reduced to zero pursuant to SECTION 2.2; and

Upon the occurrence of any event described in CLAUSE (b) or (c), the Working
Capital Loan Commitments shall terminate automatically and without any further
action.

"WORKING CAPITAL NOTE" means a promissory note of the Borrower payable to
the Agent, in the form of EXHIBIT A hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Working Capital Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.

"WORKING CAPITAL PERCENTAGE" means, relative to any Lender, the Working
Capital Percentage set forth opposite its signature hereto or set forth in the
Lender Assignment Agreement, as such percentage may be adjusted from time to
time pursuant to Lender

<PAGE>

Assignment Agreement(s) executed by such Lender and its Assignee Lender(s)
and delivered pursuant to SECTION 11.11.1.

SECTION 1.2 USE OF DEFINED TERMS. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, Loan Document,
notice and other communication delivered from time to time in connection with
this Agreement or any other Loan Document.

SECTION 1.3 CROSS-REFERENCES. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.

SECTION 1.4 ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under SECTION 8.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those generally accepted accounting principles ("GAAP") applied
in the preparation of the financial statements referred to in SECTION 7.5.

ARTICLE II

COMMITMENTS, BORROWING PROCEDURES AND NOTES

SECTION 2.1 COMMITMENTS. On the terms and subject to the conditions of
this Agreement (including ARTICLE VI), each Lender severally agrees to make
Loans pursuant to the Commitments described in this SECTION 2.1.

SECTION 2.1.1 WORKING CAPITAL LOAN COMMITMENT. From time to time on any
Business Day occurring prior to the Working Capital Loan Commitment Termination
Date, each Lender will make

<PAGE>

Loans (relative to such Lender, its "WORKING CAPITAL LOANS") to the Borrower
equal to such Lender's Working Capital Percentage of the aggregate amount of
the Borrowing of Working Capital Loans requested by the Borrower to be made
on such day. The Commitment of each Lender described in this SECTION 2.1.1
is herein referred to as its "WORKING CAPITAL LOAN COMMITMENT". On the terms
and subject to the conditions hereof, the Borrower may from time to time
borrow, prepay and reborrow Working Capital Loans.

SECTION 2.1.2 ACQUISITION LOAN COMMITMENT. From time to time on any
Business Day occurring prior to the Acquisition Loan Conversion Date, each
Lender will make Loans (relative to such Lender, its "ACQUISITION LOANS") to the
Borrower equal to such Lender's Percentage of the aggregate amount of the
Borrowing of Acquisition Loans requested by the Borrower to be made on such day.
The Commitment of each Lender described in this SECTION 2.1.2 is herein referred
to as its "ACQUISITION LOAN COMMITMENT". On the terms and subject to the
conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow Acquisition Loans prior to the Acquisition Loan Conversion Date.

SECTION 2.1.3 LENDERS NOT PERMITTED OR REQUIRED TO MAKE LOANS. No Lender
shall be permitted or required to

(a) make any Working Capital Loan if, after giving effect thereto,
the aggregate outstanding principal amount of all Working Capital Loans

(i) of all Lenders, together with all Letters of Credit
Outstandings and the aggregate outstanding amount of all Swing Loans,
would exceed the Working Capital Loan Commitment Amount, or

(ii) of such Lender, together with its Working Capital Percentage
of all Letters of Credit Outstandings and its Percentage of the
aggregate outstanding amount of all Swing Loans (assuming conversion
of such Swing Loans to Working Capital Loans), would exceed such
Lender's Working Capital Percentage of the Working Capital Loan
Commitment Amount; or

<PAGE>

(b) make any Acquisition Loan if, after giving effect thereto, the
aggregate outstanding principal amount of all Acquisition Loans

(i) of all Lenders would exceed the Acquisition Loan Commitment
Amount, or

(ii) of such Lender would exceed such Lender's Acquisition
Percentage of the Acquisition Loan Commitment Amount, or

(c) issue (in the case of any Issuer that is a Lender) or participate
in (in the case of each Lender) any Letter of Credit if, after giving
effect thereto

(i) all Letter of Credit Outstandings and all Swing Loans
together with the aggregate outstanding principal amount of all
Working Capital Loans of all Lenders would exceed the Working Capital
Loan Commitment Amount, or

(ii) such Issuer's or Lender's Working Capital Percentage of all
Letter of Credit Outstandings and all Swing Loans together with the
aggregate outstanding principal amount of all Working Capital Loans of
such Issuer or Lender would exceed such Issuer's or Lender's
Percentage of the Working Capital Loan Commitment Amount.

SECTION 2.2 REDUCTION OF COMMITMENT AMOUNTS. The Commitment Amounts are
subject to reduction from time to time pursuant to this SECTION 2.2.

SECTION 2.2.1 OPTIONAL. The Borrower may, from time to time on any
Business Day occurring after the Closing Date, voluntarily reduce the unused
amount of either Commitment Amount; PROVIDED, HOWEVER, that all such reductions
shall require at least three Business Days' prior notice to the Agent and be
permanent, and any partial reduction of either Commitment Amount shall be in an
integral multiple of $1,000,000.

<PAGE>

SECTION 2.2.2 MANDATORY. The applicable Commitment Amount shall be
reduced by an amount equal to any amount required as a mandatory prepayment of
the Working Capital Loans or Acquisition Loans as applicable pursuant to SECTION
3.1 (whether or not any loans shall then be outstanding under the applicable
Loan).

SECTION 2.3 BORROWING PROCEDURE. By delivering a Borrowing Request to
the Agent on or before [1:00 p.m.], Chicago time, on a Business Day, the
Borrower may from time to time irrevocably request, on not less than three nor
more than five Business Days' notice in the case of Eurodollar Rate Loans, and
on not less than one nor more than five Business Days' notice in the case of
Base Rate Loans, that a Borrowing be made in a minimum amount of $3,000,000 and
an integral multiple of $100,000, or in the unused amount of the applicable
Commitment. On the terms and subject to the conditions of this Agreement, each
Borrowing shall be comprised of the type of Loans, and shall be made on the
Business Day, specified in such Borrowing Request. Each Borrowing Request must
be signed by an Authorized Officer of the Managing General Partner on behalf of
or of the Borrower. On or before [2:00 p.m.] (Chicago time) on such Business
Day each Lender shall deposit with the Agent same day funds in an amount equal
to such Lender's Percentage of the requested Borrowing. Such deposit will be
made to an account which the Agent shall specify from time to time by notice to
the Lenders. To the extent funds are received from the Lenders, the Agent shall
make such funds available to the Borrower by wire transfer to the accounts
specified in the applicable Borrowing Request. No Lender's obligation to make
any Loan shall be affected by any other Lender's failure to make any Loan.
Swing Loans shall not be subject to this SECTION 2.3.

SECTION 2.4 CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/Conversion Notice to the Agent on or before 1:00 p.m., Chicago
time, on a Business Day, the Borrower may from time to time irrevocably elect,
on not less than three nor more than five Business Days' notice that all, or any
portion in an aggregate minimum amount of [$3,000,000] and an integral multiple
of [$100,000], of any Loans be, in the case of Base Rate Loans, converted into
Eurodollar Rate Loans or, in the case of Eurodollar Rate Loans, be converted
into a Base Rate Loan or a Eurodollar Rate Loan or continued as a Eurodollar
Rate Loan (in

<PAGE>

the absence of delivery of a Continuation/Conversion Notice with respect to
any Eurodollar Rate Loan at least three Business Days before the last day of
the then current Interest Period with respect thereto, such Eurodollar Rate
Loan shall, on such last day, automatically convert to a Base Rate Loan);
PROVIDED, HOWEVER, that (i) each such conversion or continuation shall be pro
rated among the applicable outstanding Loans of all Lenders, and (ii) no
portion of the outstanding principal amount of any Loans may be continued as,
or be converted into, Eurodollar Rate Loans when any Default has occurred and
is continuing. Each Continuation/Conversion Notice must be signed by an
Authorized Officer of the Managing General Partner on behalf of the Borrower
or of the Borrower.

SECTION 2.5 FUNDING. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert Eurodollar Rate Loans hereunder by
causing one of its foreign branches or Affiliates (or an international banking
facility created by such Lender) to make or maintain such Eurodollar Rate Loan;
PROVIDED, HOWEVER, that such Eurodollar Rate Loan shall nonetheless be deemed to
have been made and to be held by such Lender, and the obligation of the Borrower
to repay such Eurodollar Rate Loan shall nevertheless be to such Lender for the
account of such foreign branch, Affiliate or international banking facility. In
addition, the Borrower hereby consents and agrees that, for purposes of any
determination to be made for purposes of SECTIONS 5.1, 5.2, 5.3 or 5.4, it shall
be conclusively assumed that each Lender elected to fund all Eurodollar Rate
Loans by purchasing, as the case may be, Dollar certificates of deposit in the
U.S. or Dollar deposits in its Eurodollar Office's interbank eurodollar market.

SECTION 2.6 NOTES. The Loans under the Commitments shall be evidenced
by two Notes of the Borrower payable to the Agent, for the account of the
Lenders, in a maximum principal amount equal to the original applicable
Commitment Amount. The Borrower hereby irrevocably authorizes the Agent to make
(or cause to be made) appropriate notations on the grid attached to the Notes
(or on any continuation of such grid), which notations, if made, shall evidence,
INTER ALIA, the date of, the outstanding principal of, and the interest rate and
Interest Period applicable to the Loans evidenced thereby. Such notations shall

<PAGE>

be conclusive and binding on the Borrower absent manifest error; PROVIDED,
HOWEVER, that the failure of the Agent to make any such notations shall not
limit or otherwise affect any Obligations of the Borrower.

SECTION 2.7 SWING LINE.

(a) Upon the Borrower's request, and subject to the terms and
conditions of this Agreement, the Agent (in such capacity, the "Swing Line
Lender") may, in its sole discretion, on and after the Effective Date and
prior to the Working Capital Loan Commitment Termination Date, provide to
the Borrower a swing line credit facility (the "Swing Line") of up to
$5,000,000; provided that the Swing Line Lender shall not in any event be
permitted to make any Loan (each a "Swing Loan") under the Swing Line if,
after giving effect thereto, (i) the sum of the then aggregate outstanding
principal amount of all Working Capital Loans and Swing Loans plus the then
aggregate amount of all Letter of Credit Outstandings would exceed the
Working Capital Loan Commitment Amount, or (ii) the then aggregate
outstanding principal amount of all Swing Loans made by the Swing Line
Lender would exceed $5,000,000. The Swing Line Lender shall not be at any
time obligated to make any Swing Loan.

(b) Each request for Swing Loans shall be made from time to time by
the Borrower delivering a Swing Loan Request therefor to the Swing Line
Lender at or before [10:00 a.m.], Chicago time, on any Business Day. On
the terms and subject to the conditions of this Agreement, each Swing Loan
shall be disbursed on the Business Day on which the request therefor was
timely made, in same day funds by wire transfer to such transferee(s), or
to such account(s) of the Borrower, as the Borrower shall have specified in
the request therefor. Swing Loans shall be in an aggregate minimum
principal amount of $_________ and an integral multiple of $_________.

(c) Each Swing Loan outstanding under the Swing Line shall accrue
interest at a rate per annum equal to the interest accrued on a Base Rate
Loan which interest shall be payable quarterly in arrears on each Quarterly
Payment Date

<PAGE>

and upon demand therefor, if made earlier, and shall be payable to the
Swing Line Lender; provided that, notwithstanding any other provision of
this Agreement, each Swing Loan shall bear interest for a minimum of one
day.

(d) The principal and interest outstanding under the Swing Line shall
be due and payable

(i) at or before 9:00 a.m., Chicago time, on the [seventh]
Business Day immediately following any Swing Loan made pursuant to the
Swing Line; and

(ii) in any event on the Working Capital Loan Commitment
Termination Date;

provided that, if no Event of Default shall have occurred and be
continuing, then unless the Borrower notifies the Swing Line Lender that it
will repay such Swing Loans, on the due date of any Swing Loan, if and to
the extent that the Borrower is permitted to borrow Working Capital Loans
under the terms of this Agreement (the Working Capital Loan Commitment
being determined for such purpose without giving effect to any reduction
thereof occasioned by such Swing Loans due and payable) at the time such
Swing Loans are due, the Borrower shall be deemed to have submitted a
Borrowing Request for Working Capital Loans at the Base Rate in an amount
necessary to repay the amount demanded, and the provisions of SECTION 2.3
concerning the minimum principal amounts and integral multiples thereof
required for Borrowings of Working Capital Loans shall not apply to Working
Capital Loans made pursuant to this Section 2.7(d).

(e) The Borrower may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Swing Loans, without incurring any premium or penalty;
provided that

(i) each such voluntary prepayment shall require prior written
notice given to the Swing Line Lender no later than [10:00 a.m.],
Chicago time, on the day on

<PAGE>

which the Borrower intends to make a voluntary prepayment, and

(ii) each such voluntary prepayment shall be in a minimum amount
of [$1,000,000] and in an integral multiple of [$100,000] (or, if
less, the aggregate outstanding principal amount of all Swing Loans
then outstanding).

(f) Each Lender shall be deemed to have unconditionally and
irrevocably purchased a pro rata risk participation from the Agent in such
Swing Line Lender's Swing Loans, without recourse or warranty in an amount
equal to such Lender's Working Capital Percentage of such Swing Loans. In
addition, from and after the date that any Lender funds such participation,
such Lender shall, to the extent of its Percentage, be entitled to receive
a ratable portion of any payment of principal and interest received by the
Swing Line Lender on account of such Swing Loans, payable promptly to such
Lender upon such receipt.

(g) The Swing Line Lender may at any time during the continuance of
an Event of Default, without the consent of the Borrower, upon one Business
Day's notice to the Borrower terminate the Swing Line and cause Working
Capital Loans to be made by the Lenders in an aggregate amount equal to the
amount of principal and interest outstanding under the Swing Line, and the
conditions precedent set forth in SECTION 2.3 and SECTION 6.2 shall not
apply to such Working Capital Loans. The proceeds of such Working Capital
Loans shall be paid to the Swing Line Lender to retire the outstanding
principal and interest under the Swing Line.

(h) The Swing Line Lender shall not, without the approval of all
Lenders, make a Swing Loan if the Swing Line Lender then has actual
knowledge that a Default has occurred and is continuing.

<PAGE>

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

SECTION 3.1 REPAYMENTS AND PREPAYMENTS. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date
applicable to such Loan. Prior thereto, the Borrower

(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of any
Loans; PROVIDED, HOWEVER, that

(i) any such prepayment shall be made PRO RATA among Loans of
the same type and, if applicable, having the same Interest Period of
all Lenders;

(ii) all such voluntary prepayments of Eurodollar Rate Loans,
and all Acquisition Loans that shall be subsequent to the Acquisition
Loan Conversion Date, shall require at least three but no more than
five Business Days' prior written notice to the Agent and all such
voluntary prepayments of Base Rate Loans, that are not Acquisition
Loans subsequent to the Acquisition Loan Conversion Date, shall
require prior written notice to the Agent at least by 1:00 p.m. at
least one Business Day prior to such repayment but no more than five
Business Days prior to such repayment;

(iii) all such voluntary prepayments of Eurodollar Rate Loans or
Acquisition Loans shall be made in a minimum amount of $1,000,000 and
an integral multiple of $500,000, or in the whole outstanding
principal amount of such Loans, and all such voluntary prepayments of
Working Capital Loans maintained as Base Rate Loans shall be made in a
minimum amount of $500,000 and an integral multiple of $100,000, or in
the whole outstanding principal amount of such Loan; and

<PAGE>

(b) shall, on each date when any reduction in the applicable
Commitment Amount shall become effective, including pursuant to
SECTION 2.2, make a mandatory prepayment of all applicable Loans equal to
the excess, if any, of the aggregate outstanding principal amount of all
applicable Loans over the applicable Commitment Amount as so reduced;

(c) shall, subject to the provisions of SECTION 8.2.8(B), within five
Business Days after receipt by the Borrower or any Subsidiary of the net
proceeds of any Asset Dispositions (or if committed to be expended within
365 days, after such 365 days if not so expended), make a mandatory
prepayment of the Loans, the Private Placement Debt and the Parity Debt pro
rata in an amount equal to the net proceeds of such Asset Disposition not
so expended;

(d) shall, within five Business Days of receipt, apply 100% of the
net proceeds of insurance and condemnation awards after payment of costs
and expense and associated taxes (not applied to the restoration or
replacement of like kind assets within 365 days) over an aggregate of
$2,500,000 in any Fiscal Year to prepay the Loans, and if required by the
express terms thereof the Private Placement Debt and the Parity Debt pro
rata (taking into account any premiums that may be due);

(e) shall, immediately upon any acceleration of the Stated Maturity
Date of any Loans pursuant to SECTION 9.2 or SECTION 9.3, repay all Loans;
and

(f) shall, on each Quarterly Payment Date immediately following the
Acquisition Loan Conversion Date, make a scheduled repayment of the
aggregate principal amount, if any, of all Acquisition Loans equal to 1/16
of the principal amount of the Acquisition Loans outstanding on the
Acquisition Loan Conversion Date, with final payment of any remaining
Acquisition Loan due on the Acquisition Loan Stated Maturity Date. No
prepayment of any Acquisition Loan pursuant to this paragraph shall cause
an increase in the Acquisition Loan Commitment Amount.

<PAGE>

Subsequent to the Acquisition Loan Conversion Date each voluntary prepayment of
Acquisition Loans made pursuant to CLAUSE (a) and each mandatory prepayment of
Acquisition Loans made pursuant to CLAUSE (b), (c), (d) and (e) shall be
applied, to the extent of such prepayment, to the scheduled repayments of the
Acquisition Loans installments pro rata. Mandatory prepayment shall be applied
first to the Acquisition Loans, then the Working Capital Loans then to the
payment of the then outstanding Swing Loans and then to the outstanding
aggregate amount of all Letter of Credit Outstandings to be held as cash
collateral therefor pursuant to the terms of SECTION 4.7 hereof. Each
prepayment of any Loans made pursuant to this Section shall be without premium
or penalty, except as may be required by SECTION 5.4. No voluntary prepayment
of principal of any Working Capital Loan or Acquisition Loan, prior to the
applicable Loan Commitment Termination Date, shall cause a reduction in the Loan
Commitment Amount.

SECTION 3.1.1 STATED MATURITY DATE AND LOAN COMMITMENT TERMINATION DATE.
(a) The Stated Maturity Date with respect to the Working Capital Loans shall
terminate and each Lender shall be relieved of its obligations to make any
Working Capital Loans on the Working Capital Loan Commitment Termination Date.
The Borrower may from time to time request an extension of the Working Capital
Loan Commitment Termination Date for an additional one-year period by executing
and delivering to the Agent a Commitment Termination Date Extension Request at
least sixty but not more than ninety days prior to the then scheduled Working
Capital Loan Commitment Termination Date. The Working Capital Loan Commitment
Termination Date shall be so extended if the Agent shall have received from each
Lender on or prior to the thirtieth day preceding the then scheduled Working
Capital Loan Commitment Termination Date a duly executed counterpart of such
Commitment Termination Date Extension Request. Each Lender may in its sole and
absolute discretion withhold its consent to any such Commitment Termination Date
Extension Request.

(b) Notwithstanding the foregoing, if the Agent shall have received duly
executed counterparts of a Commitment Termination Date Extension Request from
Lenders representing, in the aggregate, 85% or more of the Working Capital Loan
Commitments, but less than 100% of the Working Capital Loan Commitments, on or

<PAGE>

prior to the thirtieth day preceding the then scheduled Working Capital
Commitment Termination Date, the Agent shall so notify (the date of such notice
being the "NOTICE DATE") the Borrower and the Borrower shall have the right to
seek a substitute lender or lenders (the "NEW LENDERS") which New Lenders would
meet the requirements to be Assignee Lenders as defined in SECTION 11.11.1,
acceptable to the Agent and the Borrower (which may be one or more of the
Lenders) to replace the Lender or Lenders which have not delivered a counterpart
of such Commitment Termination Date Extension Request by such time; PROVIDED
that such New Lenders shall replace such nonrenewing Lenders on all such
nonrenewing Lenders' Working Capital Loan Commitments, Working Capital Loans and
Letter of Credit Outstandings, so the pro rata share of any New Lender of the
Acquisition Loan Commitments, Working Capital Loan Commitments, and Letter of
Credit Outstandings shall be the same. If any Working Capital Loan Commitment
Termination Date shall not have been extended pursuant to CLAUSE (a) above, the
Borrower shall elect, by delivering to the Agent at least four Business Days
prior to the then scheduled Working Capital Loan Commitment Termination Date a
written notice of election, either (i) not to extend such Working Capital Loan
Commitment Termination Date, in which case such Working Capital Loan Commitment
Termination Date shall not be so extended for any Lender irrespective of whether
such Lender has or has not sent its duly executed counterpart of the Commitment
Termination Date Extension Request or (ii) if the aggregate Working Capital Loan
Commitments of the Lenders who have delivered duly executed counterparts of a
Commitment Termination Date Extension Request represent at least 85% of the
Working Capital Loan Commitments, to extend such current Working Capital Loan
Commitment Termination Date, in which case (x) the Working Capital Loan
Commitment Termination Date shall be extended for an additional period of one
year from the then scheduled Working Capital Loan Commitment Termination Date,
and (y) the Working Capital Loan Commitments shall be reduced on the then
scheduled Working Capital Loan Commitment Termination Date to an amount equal to
the aggregate of the Working Capital Loan Commitments of the Lenders who had
delivered duly executed counterparts of a Commitment Termination Date Extension
Request on or prior to the thirtieth day preceding the then scheduled Working
Capital Loan Commitment Termination Date, plus the aggregate Working Capital
Loan Commitments of the New Lenders and (z) the Working Capital

<PAGE>

Loan Commitments shall be reduced on the then scheduled Working Capital Loan
Commitment Termination Date to an amount equal to (1) the aggregate of the
Working Capital Loan Commitments of the Lenders who have delivered executed
counterparts of a Commitment Termination Date Extension Request on or prior
to the thirtieth day preceding the then scheduled Working Capital Loan
Commitment Termination Date plus (2) the aggregate Commitments of the New
Lenders, and the Borrower shall pay (such payment to be made on such Working
Capital Loan Commitment Termination Date) in full all Working Capital Loans
and Acquisition Loans plus all accrued interest and fees (including any
amounts owed under SECTION 5.4) owing to each such non-renewing Lender and
each such non-renewing Lender (to the extent that such Loans have not been
acquired by the New Lenders) shall no longer have any Working Capital Loan
Commitment for purposes of this Agreement and each other Loan Document. If
the Borrower shall not have delivered such a written notice of election to
the Agent on or prior to the then scheduled Working Capital Loan Commitment
Termination Date, such Working Capital Loan Termination Date shall not be
extended.

SECTION 3.2 INTEREST PROVISIONS. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this SECTION 3.2.

SECTION 3.2.1 RATES. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:

(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the sum of the Alternate Base Rate from time to time in effect
plus the Applicable Base Rate Margin;

(b) on that portion maintained as a Eurodollar Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the Eurodollar Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Eurodollar
Rate Margin.

The "EURODOLLAR RATE (RESERVE ADJUSTED)" means, relative to any Loan to be
made, continued or maintained as, or converted

<PAGE>

into, a Eurodollar Rate Loan for any Interest Period, a rate per annum
(rounded upward, if necessary, to the nearest 1/16 of 1%) determined pursuant
to the following formula:

Eurodollar Rate = EURODOLLAR RATE
------------------------------------
(Reserve Adjusted) 1.00 - Eurodollar Reserve Percentage

The Eurodollar Rate (Reserve Adjusted) for any Interest Period for Eurodollar
Rate Loans will be determined by the Agent on the basis of the Eurodollar
Reserve Percentage in effect on, and the applicable rates furnished to and
received by the Agent from the Reference Lender, two Business Days before the
first day of such Interest Period.

"EURODOLLAR RATE" means, relative to any Interest Period for Eurodollar
Rate Loans, the rate of interest per annum determined by the Agent at which
Dollar deposits are offered (i) by BofA's Grand Cayman Branch, Grand Cayman
B.W.I. (or such other office as may be designated by BofA for such purpose), or
(ii) in the event BofA is not the Reference Lender, the office as may be
designated by the Reference Lender for such purpose, in each case, to major
banks in the offshore dollar market at their request at approximately 10:00 a.m.
Chicago time two Business Days prior to the commencement of such Interest Period
in an amount approximately equal to the amount of the Reference Lender's
Eurodollar Rate Loan and for a period approximately equal to such Interest
Period.

"EUROCURRENCY RESERVE PERCENTAGE" means, relative to any Interest Period
for Eurodollar Rate Loans, the reserve percentage (expressed as a decimal) equal
to the maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.

<PAGE>

All Eurodollar Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the last day of
such Interest Period at the rate determined as applicable to such Eurodollar
Rate Loan.

SECTION 3.2.2 POST-MATURITY RATES. After the date any principal amount of
any Loan is due and payable (whether on the Stated Maturity Date applicable to
such Loan, upon acceleration or otherwise), or after any other monetary
Obligation of the Borrower shall have become due and payable, the Borrower shall
pay, but only to the extent permitted by law, interest (after as well as before
judgment) on such amounts at a rate per annum equal to the Alternate Base Rate
plus the Applicable Base Rate Margin plus 2% per annum.

SECTION 3.2.3 PAYMENT DATES. Interest accrued on each Loan shall be
payable, without duplication:

(a) on the Stated Maturity Date applicable to such Loan;

(b) with respect to any prepayment of a Loan in connection with a
reduction in the applicable Loan Commitment Amount, on the date of any such
prepayment;

(c) with respect to Base Rate Loans, on each Quarterly Payment Date
occurring after the date of the initial Borrowing hereunder;

(d) with respect to Eurodollar Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed 90
days, on the 90th day of such Interest Period); and

(e) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to SECTION 9.2 or SECTION 9.3, immediately upon such
acceleration.

Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the applicable Stated

<PAGE>

Maturity Date, upon acceleration or otherwise) shall be payable upon demand.

SECTION 3.3 FEES. The Borrower agrees to pay the fees set forth in this
SECTION 3.3. All such fees shall be non-refundable.

SECTION 3.3.1 FACILITY FEE. The Borrower agrees to pay to the Agent for
the account of each Lender, for the period (including any portion thereof when
any of its Commitments are suspended by reason of the Borrower's inability to
satisfy any condition of ARTICLE VI) commencing on the Effective Date and
continuing through the applicable Loan Commitment Termination Date, a facility
fee at the rate as established on the Pricing Grid per annum on such Lender's
applicable Percentage of the applicable Commitment Amount on the date hereof.
Such facility fees shall be payable by the Borrower in arrears on each Quarterly
Payment Date, commencing with the first such day following the Effective Date,
and on the applicable Loan Commitment Termination Date.

SECTION 3.3.2 LETTER OF CREDIT FACE AMOUNT FEE. The Borrower agrees to
pay to the Agent, for the account of the Lenders, a fee for each Letter of
Credit for the period from and including the date of the issuance of such Letter
of Credit to (but not including) the date upon which such Letter of Credit
expires, equal to the product of the Applicable Eurodollar Rate Margin per annum
times the face amount of such Letter of Credit. Such fee shall be payable by
the Borrower in arrears each Quarterly Payment Date, and on the Working Capital
Loan Commitment Termination Date for any period then ending for which such fee
shall not theretofore have been paid, commencing on the first such date after
the issuance of such Letter of Credit.

SECTION 3.3.3 LETTER OF CREDIT ISSUING FEE. The Borrower agrees to pay to
the Agent, for the account of the applicable Issuer, an issuing fee for each
Letter of Credit of 1/8 of 1% of the face amount of such Letter of Credit. Such
fee shall be payable by the Borrower upon issuance of such Letter of Credit.

SECTION 3.3.4 ADDITIONAL FEE. The Borrower agrees to pay to BofA those
fees specified in the letter agreement dated

<PAGE>

November 19, 1996 between the Borrower and BofA at the times specified in such
letter agreement.

ARTICLE IV

LETTERS OF CREDIT

SECTION 4.1 ISSUANCE REQUESTS. By delivering to the Agent and the
applicable Issuer an Issuance Request on or before 11:00 a.m., Chicago time, the
Borrower may request, from time to time prior to the Working Capital Loan
Commitment Termination Date and on not less than [three nor more than five]
Business Days' notice, that such Issuer issue an irrevocable standby letter of
credit in substantially the form of EXHIBIT N hereto, or in such other form as
may be requested by the Borrower and approved by such Issuer (each a "LETTER OF
CREDIT"), in support of obligations of the Borrower or any Restricted Subsidiary
incurred in the Borrower's ordinary course of business of the Borrower or its
Restricted Subsidiaries and which are described in such Issuance Request. Upon
receipt of an Issuance Request, the Agent shall promptly notify the Lenders
thereof. Each Letter of Credit shall by its terms:

(a) be issued in a Stated Amount which

(i) is at least $[100,000]; and

(ii) does not exceed (or would not exceed) the then Letter of
Credit Availability;

(b) be stated to expire on a date (its "STATED EXPIRY DATE") no later
than the earlier of thirteen months from its date of issuance and the
Working Capital Loan Commitment Termination Date; and

(i) terminate immediately upon notice to the Issuer thereof from
the beneficiary thereunder that all

<PAGE>

obligations covered thereby have been terminated, paid, or otherwise
satisfied in full, or

(ii) reduce in part immediately and to the extent the
beneficiary thereunder has notified the Issuer thereof that the
obligations covered thereby have been paid or otherwise satisfied in
part.

So long as no Default has occurred and is continuing, by delivery to the
applicable Issuer and the Agent of an Issuance Request at least three but not
more than five Business Days prior to the Stated Expiry Date of any Letter of
Credit, the Borrower may request such Issuer to extend the Stated Expiry Date of
such Letter of Credit for an additional period not to exceed the earlier of
thirteen months from its date of extension and the Working Capital Loan
Commitment Termination Date.

SECTION 4.2 ISSUANCES AND EXTENSIONS. On the terms and subject to the
conditions of this Agreement (including ARTICLE VI), the Issuer shall issue
Letters of Credit, and extend the Stated Expiry Dates of outstanding Letters of
Credit, in accordance with the Issuance Requests made therefor. Each Issuer
will make available the original of each Letter of Credit which it issues in
accordance with the Issuance Request therefor to the beneficiary thereof and
will notify the beneficiary under any Letter of Credit of any extension of the
Stated Expiry Date thereof.

SECTION 4.3 EXPENSES. The Borrower agrees to pay to the Agent for the
account of the applicable Issuer(s) all administrative expenses of such
Issuer(s) in connection with the issuance, maintenance, modification (if any)
and administration of each Letter of Credit issued by such Issuer(s) upon demand
from time to time.

SECTION 4.4 OTHER LENDERS' PARTICIPATION. Each Letter of Credit issued
pursuant to SECTION 4.2 shall, effective upon its issuance and without further
action, be issued on behalf of all Lenders (including the Issuer thereof) PRO
RATA according to their respective Working Capital Percentages. Each Lender
shall, to the extent of its Percentage, be deemed irrevocably to have
participated in the issuance of such Letter of Credit and shall

<PAGE>

be responsible to reimburse promptly the Issuer thereof for Reimbursement
Obligations which have not been reimbursed by the Borrower in accordance with
SECTION 4.5, or which have been reimbursed by the Borrower but must be
returned, restored or disgorged by such Issuer for any reason, and each
Lender shall, to the extent of its Working Capital Percentage, be entitled to
receive from the Agent a ratable portion of the letter of credit fees
received by the Agent pursuant to SECTION 3.3.2, with respect to each Letter
of Credit. In the event that the Borrower shall fail to reimburse any
Issuer, or if for any reason Working Capital Loans shall not be made to fund
any Reimbursement Obligation, all as provided in SECTION 4.5 and in an amount
equal to the amount of any drawing honored by such Issuer under a Letter of
Credit issued by it, or in the event such Issuer must for any reason return
or disgorge such reimbursement, such Issuer shall promptly notify each Lender
of the unreimbursed amount of such drawing and of such Lender's respective
participation therein. Each Lender shall make available to such Issuer,
whether or not any Default shall have occurred and be continuing, an amount
equal to its respective participation in immediately available funds at the
office of such Issuer specified in such notice not later than 10:00 a.m.,
Chicago time, on the Business Day (under the laws of the jurisdiction of such
Issuer) after the date notified by such Issuer. In the event that any Lender
fails to make available to such Issuer the amount of such Lender's
participation in such Letter of Credit as provided herein, such Issuer shall
be entitled to recover such amount on demand from such Lender together with
interest at the daily average Federal Funds Rate for three Business Days
(together with such other compensatory amounts as may be required to be paid
by such Lender to the Agent pursuant to the Rules for Interbank Compensation
of the council on International Banking or the Clearinghouse Compensation
Committee, as the case may be, as in effect from time to time) and thereafter
at the Alternate Base Rate plus the Applicable Base Rate Margin plus 2%.
Nothing in this Section shall be deemed to prejudice the right of any Lender
to recover from any Issuer any amounts made available by such Lender to such
Issuer pursuant to this Section in the event that it is determined by a court
of competent jurisdiction that the payment with respect to a Letter of Credit
by such Issuer in respect of which payment was made by such Lender
constituted gross negligence or wilful misconduct on the part of such Issuer.
Each

<PAGE>

Issuer shall distribute to each other Lender which has paid all amounts
payable by it under this Section with respect to any Letter of Credit issued
by such Issuer such other Lender's Percentage of all payments received by
such Issuer from the Borrower in reimbursement of drawings honored by such
Issuer under such Letter of Credit when such payments are received.

SECTION 4.5 DISBURSEMENTS. Each Issuer will notify the Borrower and the
Agent promptly of the presentment for payment of any Letter of Credit, together
with notice of the date (a "DISBURSEMENT DATE") such payment shall be made.
Subject to the terms and provisions of such Letter of Credit, the applicable
Issuer shall make such payment to the beneficiary (or its designee) of such
Letter of Credit. Prior to 12:00 noon, Chicago time, on the Disbursement Date,
the Borrower will reimburse the applicable Issuer for all amounts which it has
disbursed under the Letter of Credit. To the extent the applicable Issuer is
not reimbursed in full in accordance with the THIRD SENTENCE of this Section,
the Borrower's Reimbursement Obligation shall accrue interest at a fluctuating
rate determined by reference to the Alternate Base Rate, plus the Applicable
Base Rate Margin plus 2% per annum, payable on demand. In the event the
applicable Issuer is not reimbursed by the Borrower on the Disbursement Date, or
if such Issuer must for any reason return or disgorge such reimbursement, the
Lenders (including such Issuer) shall, on the terms and subject to the
conditions of this Agreement, fund the Reimbursement Obligation therefor by
making, on the next Business Day, Working Capital Loans which are Base Rate
Loans as provided in SECTION 3.2.1 (the Borrower being deemed to have given a
timely Borrowing Request therefor for such amount); PROVIDED, HOWEVER, for the
purpose of determining the availability of the Commitments to make Working
Capital Loans immediately prior to giving effect to the application of the
proceeds of such Working Capital Loans, such Reimbursement Obligation shall be
deemed not to be outstanding at such time.

SECTION 4.6 REIMBURSEMENT. The Borrower's obligation (a "REIMBURSEMENT
OBLIGATION") under SECTION 4.5 to reimburse an Issuer with respect to each
disbursement (including interest thereon), and each Lender's obligation to make
participation payments in each drawing which has not been reimbursed by the
Borrower, shall be absolute and unconditional under any and all

<PAGE>

circumstances and irrespective of any setoff, counterclaim, or defense to
payment which the Borrower may have or have had against any Lender or any
beneficiary of a Letter of Credit, including any defense based upon the
occurrence of any Default, any draft, demand or certificate or other document
presented under a Letter of Credit proving to be forged, fraudulent, invalid
or insufficient, the failure of any disbursement to conform to the terms of
the applicable Letter of Credit (if, in the applicable Issuer's good faith
opinion, such disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the proceeds of such
disbursement, or the legality, validity, form, regularity, or enforceability
of such Letter of Credit; PROVIDED, HOWEVER, that nothing herein shall
adversely affect the right of the Borrower to commence any proceeding against
the applicable Issuer for any wrongful disbursement made by such Issuer under
a Letter of Credit as a result of acts or omissions constituting gross
negligence or wilful misconduct on the part of such Issuer.

SECTION 4.7 DEEMED DISBURSEMENTS. Upon the occurrence and during the
continuation of any Event of Default or the occurrence of the Working Capital
Loan Commitment Termination Date, an amount equal to that portion of Letter of
Credit Outstandings attributable to outstanding and undrawn Letters of Credit
(or in the event of a mandatory prepayment of a Letter of Credit pursuant to
SECTION 3.1, an amount equal to such mandatory prepayment) shall, at the
election of the applicable Issuer acting on instructions from the Required
Lenders, and without demand upon or notice to the Borrower, be deemed to have
been paid or disbursed by such Issuer under such Letters of Credit
(notwithstanding that such amount may not in fact have been so paid or
disbursed), and, upon notification by such Issuer to the Agent and the Borrower
of its obligations under this Section, the Borrower shall be immediately
obligated to reimburse such Issuer the amount deemed to have been so paid or
disbursed by such Issuer. Any amounts so received by such Issuer from the
Borrower pursuant to this Section shall be held as collateral security for the
repayment of the Borrower's obligations in connection with the Letters of Credit
issued by such Issuer. At any time when such Letters of Credit shall terminate
and all Obligations of each Issuer are either terminated or paid or reimbursed
to such Issuer in full, the Obligations of the Borrower under this

<PAGE>

Section shall be reduced accordingly (subject, however, to reinstatement in
the event any payment in respect of such Letters of Credit is recovered in
any manner from such Issuer), and such Issuer will return to the Borrower the
excess, if any, of

(a) the aggregate amount deposited by the Borrower with such Issuer
and not theretofore applied by such Issuer to any Reimbursement Obligation

OVER

(b) the aggregate amount of all Reimbursement Obligations to such
Issuer pursuant to this Section, as so adjusted.

At such time when all Events of Default shall have been cured or waived, each
Issuer shall return to the Borrower all amounts then on deposit (other than
amounts attributable to a mandatory prepayment) with such Issuer pursuant to
this Section. All amounts on deposit pursuant to this Section shall, until
their application to any Reimbursement Obligation or their return to the
Borrower, as the case may be, bear interest at the daily average Federal Funds
Rate from time to time in effect (net of the costs of any reserve requirements,
in respect of amounts on deposit pursuant to this Section, pursuant to F.R.S.
Board Regulation D), which interest shall be held by the applicable Issuer as
additional collateral security for the repayment of the Borrower's Obligations
in connection with the Letters of Credit issued by such Issuer.

SECTION 4.8 NATURE OF REIMBURSEMENT OBLIGATIONS. The Borrower shall
assume all risks of the acts, omissions, or misuse of any Letter of Credit by
the beneficiary thereof. Neither any Issuer nor any Lender (except to the
extent of its own gross negligence or wilful misconduct) shall be responsible
for:

(a) the form, validity, sufficiency, accuracy, genuineness, or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged;

<PAGE>

(b) the form, validity, sufficiency, accuracy, genuineness, or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or proceeds thereof in whole or in part, which may prove to be invalid or
ineffective for any reason;

(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;

(d) errors, omissions, interruptions, or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, or otherwise;
or

(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a disbursement under a Letter
of Credit or of the proceeds thereof.

None of the foregoing shall affect, impair, or prevent the vesting of any of the
rights or powers granted any Issuer or any Lender hereunder. In furtherance and
extension, and not in limitation or derogation, of any of the foregoing, any
action taken or omitted to be taken by any Issuer in good faith shall be binding
upon the Borrower and shall not put such Issuer under any resulting liability to
the Borrower.

SECTION 4.9 INCREASED COSTS; INDEMNITY. If by reason of

(a) any change in applicable law, regulation, rule, decree or
regulatory requirement or any change in the interpretation or application
by any judicial or regulatory authority of any law, regulation, rule,
decree or regulatory requirement occurring after the Effective Date, or

(b) compliance by any Issuer or any Lender with any direction,
request or requirement made after the Effective Date (whether or not having
the force of law) of any governmental or monetary authority, including
Regulation D of the F.R.S. Board:

<PAGE>

(i) any Issuer or any Lender shall be subject to any tax (other
than taxes on net income and franchises), levy, charge or withholding
of any nature or to any variation thereof or to any penalty with
respect to the maintenance or fulfillment of its obligations under
this ARTICLE IV, whether directly or by such being imposed on or
suffered by such Issuer or any Lender;

(ii) any reserve, deposit or similar requirement is or shall be
applicable, imposed or modified in respect of any Letters of Credit
issued by any Issuer or participations therein purchased by any
Lender; or

(iii) there shall be imposed on any Issuer or any Lender any
other condition regarding this ARTICLE IV, any Letter of Credit or any
participation therein;

and the result of the foregoing is directly or indirectly to increase the cost
to such Issuer or such Lender of issuing, making or maintaining any Letter of
Credit or of purchasing or maintaining any participation therein, or to reduce
any amount receivable in respect thereof by such Issuer or such Lender, then and
in any such case such Issuer or such Lender may, at any time after the
additional cost is incurred or the amount received is reduced, notify the
Borrower thereof, and the Borrower shall within three days of receipt of such
notification pay on demand such amounts as such Issuer or Lender may specify to
be necessary to compensate such Issuer or Lender for such additional cost or
reduced receipt, together with interest on such amount from the date demanded
until payment in full thereof at a rate equal at all times to the Alternate Base
Rate plus the Applicable Base Margin plus 2% per annum; PROVIDED, HOWEVER,
neither the Issuer nor any Lender may make any demand for any amounts accrued
for any period commencing more than ninety days prior to the date of demand or,
should such cost have accrued retroactively, within ninety days of the
determination of such cost. The determination by such Issuer or Lender, as the
case may be, of any amount due pursuant to this Section, as set forth in a
statement setting forth the calculation thereof in reasonable detail, shall, in
the absence of manifest error, be final and conclusive and binding on all of the
parties hereto. In addition to amounts payable as

<PAGE>

elsewhere provided in this ARTICLE IV, the Borrower hereby agrees to protect,
indemnify, pay and save each Issuer harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and allocated costs of internal
counsel) which such Issuer may incur or be subject to as a consequence,
direct or indirect, of

(c) the issuance of the Letters of Credit, other than as a result of
the gross negligence or wilful misconduct of such Issuer as determined by a
court of competent jurisdiction, or

(d) the failure of such Issuer to honor a drawing under any Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or government
authority.

ARTICLE V

CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS

SECTION 5.1 EURODOLLAR RATE LENDING UNLAWFUL. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower and
the Lenders, be conclusive and binding on the Borrower) that after the Effective
Date the introduction of or any change in or in the interpretation of any law
makes it unlawful, or any central bank or other government authority asserts
that it is unlawful, for such Lender to make, continue or maintain any Loan as,
or to convert any Loan into, a Eurodollar Rate Loan of a certain type, the
obligations of all Lenders to make, continue, maintain or convert any such Loans
shall, upon such determination, forthwith be suspended until such Lender shall
notify the Agent that the circumstances causing such suspension no longer exist,
and all Eurodollar Rate Loans of such type shall automatically convert into Base
Rate Loans at the end of the then current Interest Periods with respect thereto
or sooner, if required by such law or assertion.

<PAGE>
SECTION 5.2 DEPOSITS UNAVAILABLE. If the Agent shall have determined
that

(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to the Reference Lender in the interbank
eurodollar market; or

(b) by reason of circumstances affecting the Reference Lender's
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to Eurodollar Rate Loans of such type,

then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under SECTION 2.3 and SECTION 2.4 to make or continue
any Loans as, or to convert any Loans into, Eurodollar Rate Loans of such type
shall forthwith be suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.

SECTION 5.3 INCREASED EURODOLLAR RATE LOAN COSTS, ETC. The Borrower
agrees to reimburse each Lender for any increase in the cost to such Lender of,
or any reduction in the amount of any sum receivable by such Lender in respect
of, making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, Eurodollar Rate Loans, in any case from time to time by reason of:

(a) to the extent not included in the calculation of the Eurodollar
Rate (Reserve (a)djusted), any reserve, special deposit, or similar
requirement against assets of, deposits with or for the account of, or
credit extended by such Lender, under or pursuant to any change in any law,
treaty, rule, regulation (including any F.R.S. Board regulation), or
requirement from that in effect on the Effective Date, or as the result of
any Regulatory Change; or

(b) any Regulatory Change which shall subject such Lender to any tax
(other than taxes on net income [including franchise taxes based on income,
and franchises]), levy, impost, charge, fee, duty, deduction, or
withholding or any kind whatsoever or change the taxation of any Loan made
or

<PAGE>

maintained as a Eurodollar Rate Loan and the interest thereon (other
than any change which affects, and to the extent that it affects, the
taxation of net income [including franchise taxes based on income and
franchises]).

Such Lender shall promptly and in no event later than 90 days after its
knowledge of the occurrence of any such event notify the Agent and the Borrower
in writing of the occurrence of any such event, such notice to state, in
reasonable detail, the reasons therefor and the additional amount required fully
to compensate such Lender for such increased cost or reduced amount; PROVIDED,
HOWEVER, no Lender may make any demand for any such amounts accrued under this
SECTION 5.3 for any period commencing more than ninety days prior to the receipt
by the Borrower of such notice or, should such cost have accrued retroactively,
within ninety days of the determination by such Lender of such cost. Such
additional amounts shall be payable by the Borrower directly to such Lender
within five days of its receipt of such notice, and such notice shall, in the
absence of manifest error, be conclusive and binding on the Borrower.

SECTION 5.4 FUNDING LOSSES. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a
Eurodollar Rate Loan) as a result of

(a) any conversion or repayment or prepayment of the principal amount
of any Eurodollar Rate Loans on a date other than the scheduled last day of
the Interest Period applicable thereto, whether pursuant to SECTION 3.1 or
otherwise;

(b) any Loans not being made as Eurodollar Rate Loans in accordance
with the Borrowing Request therefor; or

(c) any Loans not being continued as, or converted into, Eurodollar
Rate Loans in accordance with the Continuation/Conversion Notice therefor,

<PAGE>

then, upon the written notice of such Lender to the Borrower (with a copy to the
Agent), the Borrower shall, within five days of its receipt thereof, pay
directly to such Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the Borrower.

SECTION 5.5 INCREASED CAPITAL COSTS. If after the Effective Date any
change in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any court,
central bank, regulator or other government authority affects or would affect
the amount of capital required or expected to be maintained by any Lender or any
Person controlling such Lender, and such Lender determines (in its sole and
absolute discretion) that the rate of return on its or such controlling Person's
capital as a consequence of its Commitments or the Loans made by such Lender is
reduced to a level below that which such Lender or such controlling Person could
have achieved but for the occurrence of any such circumstance, then, in any such
case upon notice from time to time by such Lender to the Borrower, the Borrower
shall within five days of its receipt thereof pay directly to such Lender
additional amounts sufficient to compensate such Lender or such controlling
Person for such reduction in rate of return. Such Lender shall promptly and in
no event later than ninety days after its knowledge of any such event notify the
Agent and the Borrower of the occurrence of any such event; PROVIDED, HOWEVER,
no Lenders may make any demand for any such amounts accrued under this SECTION
5.5 for any period commencing more than ninety days prior to the receipt by the
Borrower of any such notice or, should such cost have accrued retroactively,
within ninety days of the determination by such Lender of such cost. A
statement of such Lender as to any such additional amount or amounts (including
calculations thereof in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on the Borrower. In determining such amount,
such Lender may use any reasonable method of averaging and attribution that it
(in its sole and absolute discretion) shall deem applicable.

<PAGE>

SECTION 5.6 TAXES. Without duplication of any payments made under any
other provisions of this Article V, all payments by the Borrower of principal
of, and interest on, the Loans and all other amounts payable hereunder shall be
made free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income (including franchise taxes based upon income) or receipts (such non-
excluded items being called "TAXES"). In the event that any withholding or
deduction from any payment to be made by the Borrower hereunder is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
the Borrower will

(a) pay directly to the relevant authority the full amount required
to be so withheld or deducted;

(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and

(c) pay to the Agent for the account of the Lenders such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required; PROVIDED that
each Lender shall promptly and in no event later than 90 days after its
knowledge that any amount is payable under this CLAUSE (c) notify the Agent
and the Borrower of the same;

PROVIDED, HOWEVER, no Lender may make any demand for any such amounts accrued
under this SECTION 5.6 for any period commencing more than ninety days prior to
the receipt by the Borrower of any such notice or, should such cost have accrued
retroactively, within ninety days of the determination by such Lender of such
cost.

Moreover, if any Taxes are directly asserted against the Agent or any
Lender with respect to any payment received by the Agent or such Lender
hereunder, the Agent or such Lender may pay

<PAGE>

such Taxes and the Borrower will promptly pay such additional amounts
(including any penalties, interest or expenses) as is necessary in order that
the net amount received by such person after the payment of such Taxes
(including any Taxes on such additional amount) shall equal the amount such
person would have received had not such Taxes been asserted.

If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Lenders, the required receipts or other required documentary evidence, the
Borrower shall indemnify the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of any such failure.
For purposes of this SECTION 5.6, a distribution hereunder by the Agent or any
Lender to or for the account of any Lender shall be deemed a payment by the
Borrower.

Each Lender that is organized under the laws of a jurisdiction other than
the United States shall, prior to the due date of any payments under the Notes,
(i) execute and deliver to the Borrower and the Agent, on or about the first
scheduled payment date in each Fiscal Year, one or more (as the Borrower or the
Agent may reasonably request) United States Internal Revenue Service Forms 4224
or Forms 1001 or such other forms or documents (or successor forms or
documents), appropriately completed, as may be applicable to establish the
extent, if any, to which a payment to such Lender is exempt from withholding or
deduction of Taxes, and (ii) comply with the requirements of SECTION 10.10, as
applicable.

SECTION 5.7 PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes or
any other Loan Document shall be made by the Borrower to the Agent for the PRO
RATA account of the Lenders entitled to receive such payment. All such payments
required to be made to the Agent shall be made, without setoff, deduction or
counterclaim, not later than 1:00 p.m., Chicago time, on the date due, in
immediately available funds, to such account as the Agent shall specify from
time to time by notice to the Borrower. Funds received after that time shall be
deemed to have been received by the Agent on the next succeeding Business Day.
The Agent shall promptly remit in same

<PAGE>

day funds to each Lender its share, if any, of such payments received by the
Agent for the account of such Lender. All interest (other than interest
computed at the Alternate Base Rate) and fees shall be computed on the basis
of the actual number of days (including the first day but excluding the last
day) occurring during the period for which such interest or fee is payable
over a year comprised of 360 days. Interest computed at the Alternate Base
Rate shall be computed on the basis of its actual number of days (including
the first day but excluding the last day) occurring during the period for
which such interest is payable over a year comprised of 365 or 366 days, as
the case may be. Whenever any payment to be made shall otherwise be due on a
day which is not a Business Day, such payment shall (except as otherwise
required by CLAUSE (c) of the definition of the term "INTEREST PERIOD" with
respect to Eurodollar Rate Loans) be made on the next succeeding Business Day
and such extension of time shall be included in computing interest and fees,
if any, in connection with such payment.

SECTION 5.8 SHARING OF PAYMENTS. If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of SECTION
5.3, 5.4 or 5.5) or Letter of Credit in excess of its PRO RATA share of payments
then or therewith obtained by all Lenders, such Lender shall purchase from the
other Lenders such participations in Loans made by them and/or Letters of Credit
as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; PROVIDED, HOWEVER, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of

(a) the amount of such selling Lender's required repayment to the
purchasing Lender

<PAGE>

(b) the total amount so recovered from the purchasing Lender)

of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to SECTION 5.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.

SECTION 5.9 SETOFF. Each Lender shall, upon the occurrence of any
Default described in CLAUSES (a), (b) and, with respect to the Borrower and
Managing General Partner, (E) of SECTION 9.1.8 or any other Event of Default,
have the right to appropriate and apply to the payment of the Obligations owing
to it (whether or not then due), and (as security for such Obligations) the
Borrower hereby grants to each Lender a continuing security interest in, any and
all balances, credits, deposits, accounts or moneys of the Borrower then or
thereafter maintained with such Lender; PROVIDED, HOWEVER, that any such
appropriation and application shall be subject to the provisions of SECTION 5.8.
Each Lender agrees promptly to notify the Borrower and the Agent after any such
setoff and application made by such Lender; PROVIDED, HOWEVER, that the failure
to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff under applicable law
or otherwise) which such Lender may have.

SECTION 5.10 USE OF PROCEEDS. The Borrower shall apply the proceeds of
(i) the Working Capital Loans to working capital, including letters of credit,
and other general partnership

<PAGE>

purposes and (ii) the Acquisition Loans solely for purposes of financing
acquisitions by the Borrower and to finance capital expenditures related to
existing properties or future acquired businesses of the Borrower; without
limiting the foregoing, no proceeds of any Loan will be used to acquire any
equity security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or any "margin stock", as defined in F.R.S.
Board Regulation U.

SECTION 5.11 RECOURSE. The Obligations of the Borrower to the Agent and
the Lenders will be secured and rank pari passu with the Private Placement Debt
and Parity Debt. All of the accounts receivable, inventory, customer storage
tanks of the Borrower and the Restricted Subsidiaries (except tanks financed
pursuant to clause (e), (f) and (g) in SECTION 8.2.2. and all stock of all
Restricted Subsidiaries now or hereafter acquired by the Borrower (all such
accounts receivables, inventory, customer tanks and stock being called the
("General Collateral")) will be pledged to secure the Obligations, the Private
Placement Debt and the Parity Debt. In the event that the Borrower obtains or
creates any Restricted Subsidiaries, each such Restricted Subsidiary must issue
a guarantee of the Obligations, the Private Placement Debt and the Parity Debt
and each such guarantee will be in favor of the Collateral Agent and secured by
a pledge of substantially all of the assets of a similar nature to the General
Collateral of such guaranteeing Restricted Subsidiary (which together with the
General Collateral may be referred to as the "Collateral").

SECTION 5.12 REPLACEMENT OF LENDERS. In the event any Lender shall
provide notice to the Agent pursuant to SECTION 5.3, 5.5 or 5.6 hereunder, the
Borrower shall be permitted to replace such Lender, PROVIDED, HOWEVER, that such
Lender's replacement shall agree to all the obligations and conditions relating
to an Assignee Lender contained in SECTION 11.11.1 hereto. Any such replacement
shall be subject to the Agent's consent which shall not be unreasonably
withheld.

<PAGE>

ARTICLE VI

CONDITIONS TO BORROWING

SECTION 6.1 INITIAL BORROWING. The obligations of the Lenders to fund
the initial Borrowing shall be subject to the prior or concurrent satisfaction
of each of the conditions precedent set forth in this SECTION 6.1.

SECTION 6.1.1 PARTNERSHIP ACTION. The Agent shall have received from the
Borrower a certificate, dated the date of the initial Borrowing, of a
Responsible Officer of the Borrower as to

(a) the form of the Partnership Agreement;

(b) any partnership action necessary for the execution, delivery and
performance of this Agreement, the Notes, the Security Agreement and each
other Loan Document to be executed on behalf of the Borrower; and

(c) the incumbency and signatures of those of the officers authorized
to act with respect to this Agreement, the Notes, the Security Agreement
and each other Loan Document executed on behalf of the Borrower,

upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of a Responsible Officer canceling or amending
such prior certificate.

SECTION 6.1.2 DELIVERY OF NOTES. The Agent shall have received, for the
account of each Lender, the Notes duly executed and delivered by the Managing
General Partner on behalf of the Borrower.

SECTION 6.1.3 PRIVATE PLACEMENT DEBT AND PUBLIC PARTNERSHIP COMMON UNITS.
The Borrower shall have issued the Private Placement Debt on terms acceptable to
the Agent and the Public Partnership shall have completed the Common Units
Issuance. The Private Placement Debt shall have received an investment grade
rating from Fitch Investors Service, Inc.

<PAGE>

SECTION 6.1.4 PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC. All Indebtedness
identified in ITEM 8.2.2(a) ("Indebtedness to be Paid on Effective Date") of the
Disclosure Schedule under the heading "Payments on the Effective Date", together
with all interest, all prepayment premiums and other amounts due and payable
with respect thereto, shall have been paid in full (including, to the extent
necessary, from proceeds of the initial Borrowing); and all Liens securing
payment of any such Indebtedness have been released and the Agent shall have
received all Uniform Commercial Code Form UCC-3 termination statements or other
instruments as may be suitable or appropriate in connection therewith.

SECTION 6.1.5 TRANSFER. The Transfer shall concurrently be consummated
substantially as described in the Registration Statement.

SECTION 6.1.6 WORKING CAPITAL DEBT. Upon consummation of all the
conditions set forth in SECTION 6.1, no more than $15,000,000 of Working Capital
Loans shall be outstanding.

SECTION 6.1.7 INTERCREDITOR AGREEMENT. The Agent shall have received
executed counterparts of the Intercreditor Agreement, dated as of the date
hereof, duly executed by [Private Placement Trustee].

SECTION 6.1.8 SECURITY AGREEMENT. The Agent shall have received executed
counterparts of the Security Agreement, dated as of the date hereof, duly
executed by the Borrower and the Restricted Subsidiaries, together with

(a) copies of properly executed Uniform Commercial Code financing
statements (Form UCC-1), naming the Borrower as the debtor and the
Collateral Agent as the secured party, or other similar instruments or
documents, to be filed under the Uniform Commercial Code of all
jurisdictions as may be necessary or, in the opinion of the Agent,
desirable to perfect the security interest of the Collateral Agent pursuant
to the Security Agreement;

<PAGE>

(b) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens and other
rights of any Person

(i) in any collateral described in the Security Agreement
previously granted by any Person, and

(ii) securing any of the Indebtedness identified in ITEM 8.2.2(a)
("Indebtedness to be Paid on Effective Date") of the Disclosure
Schedule under the heading "Payments on the Effective Date",

together with such other Uniform Commercial Code Form UCC-3 termination
statements as the Agent may reasonably request from such Obligors; and

(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified
by a party acceptable to the Agent, dated a date reasonably near to the
date of the initial Borrowing, listing all effective financing statements
which name the Borrower (under its present name and any previous names) as
the debtor and which are filed in the jurisdictions in which filings were
made pursuant to CLAUSE (a) above, together with copies of such financing
statements (none of which shall cover any collateral described in the
Security Agreement).

SECTION 6.1.9 PERMITS. All permits, licenses and regulatory approvals
required to continue operations shall have been obtained except those the
failure of which to obtain would not have a material adverse effect on the
business or operations of the Borrower.

SECTION 6.1.10 OPINION OF COUNSEL. The Agent shall have received opinions,
dated the date of the initial Borrowing and addressed to the Agent and all
Lenders, from [_________________________________________], counsel to the
Borrower substantially in the form of EXHIBIT[S] K hereto.

SECTION 6.1.11 CLOSING FEES, EXPENSES, ETC. The Agent shall have received
for its own account, or for the account of each

<PAGE>

Lender, as the case may be, all fees, costs and expenses due and payable
pursuant to SECTIONS 3.3 and 11.3, if then invoiced.

SECTION 6.1.12 COMPLIANCE CERTIFICATE. A certificate of the chief
financial Authorized Officer of the Borrower demonstrating compliance with the
covenants contained in SECTION 8.2.4.

SECTION 6.1.13 INSURANCE CERTIFICATE. The Agent shall have received a
certificate of the Managing General Partner stating that all required insurance
policies are in full force and effect.

[SECTION 6.1.14 ENVIRONMENTAL DISCLOSURE. The Agent shall have received a
copy of __________.]

SECTION 6.1.15 SOLVENCY CERTIFICATE. The chief financial officer of
either the Borrower or the Managing General Partner shall have delivered to the
Agent a solvency certificate dated the Closing Date, substantially in the form
of EXHIBIT .

SECTION 6.1.16 GUARANTY. The Agent shall have received executed
counterparts of the Guaranty, dated as of the date hereof, duly executed by the
Restricted Subsidiaries.

SECTION 6.2 ALL BORROWINGS. The obligation of each Lender to fund any
Loan on the occasion of any Borrowing (including the initial Borrowing) shall be
subject to the satisfaction of each of the conditions precedent set forth in
this SECTION 6.2.

SECTION 6.2.1 COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before
and after giving effect to any Borrowing and the Letter of Credit (but, if any
Default of the nature referred to in SECTION 9.1.4 shall have occurred with
respect to any other Indebtedness, without giving effect to the application,
directly or indirectly, of the proceeds thereof) the following statements shall
be true and correct

(a) the representations and warranties set forth in ARTICLE VII
(excluding, however, those contained in SECTION 7.7 and SECTION 7.8) and
the Security Agreement shall be true and correct with the same effect as if
then made

<PAGE>

(unless stated to relate solely to an early date, in which case such
representations and warranties shall be true and correct as of such
earlier date);

(b) except as disclosed by the Borrower to the Agent and the Lenders
pursuant to SECTION 7.8

(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or, to the
knowledge of the Borrower, threatened against the Borrower or any
Subsidiary which is reasonably likely to materially adversely affect
the Borrower's and Subsidiaries' consolidated business, operations,
assets, revenues, properties or prospects or which purports to affect
the legality, validity or enforceability of this Agreement, the Notes,
the Security Agreement or any other Loan Document;

(ii) no development shall have occurred in any labor controversy,
litigation, arbitration or governmental investigation or proceeding
disclosed pursuant to SECTION 7.8 which is reasonably likely to
materially adversely affect the consolidated businesses, operations,
assets, revenues, properties or prospects of the Borrower and their
Subsidiaries; and

(iii) since the date of the financial statements described in
SECTION 7.6 and after giving effect to the Transfer the initial
Borrowings hereunder and the issuance of the Private Placement Debt
and the Common Units Issuance, and for any determination after the
delivery of the first financial statements pursuant to SECTION
8.1.1(b), since the date of such financial statements (if such
financial statements shall be satisfactory to the Required Lenders),
there has been no material adverse change in the condition (financial
or otherwise), operations, assets or business properties of the
Borrower and Subsidiaries taken as a whole; and

<PAGE>

SECTION 6.2.2 BORROWING REQUEST. The Agent shall have received a
Borrowing Request, Issuance Request or request for a Swing Line pursuant to
SECTION 2.7, as the case may be, for such Borrowing. Each of the delivery of a
Borrowing Request, Issuance Request or request for a Swing Line pursuant to
SECTION 2.7 and the acceptance by the Borrower of the proceeds of such Borrowing
or the Issuance of the Letter of Credit, as applicable, shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof) or the Issuance of the Letter of Credit, as
applicable, the statements made in SECTION 6.2.1 are true and correct.

SECTION 6.2.3 SATISFACTORY LEGAL FORM. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower, any other Obligor or
any Subsidiary shall be satisfactory in form and substance to the Agent and its
counsel; the Agent and its counsel shall have received all information,
approvals, opinions, documents or instruments as the Agent or its counsel may
reasonably request.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders and the Agent to enter into this Agreement
and to make Loans hereunder, the Borrower represents and warrants unto the Agent
and each Lender as set forth in this ARTICLE VII.

SECTION 7.1 ORGANIZATION, ETC. (a) The Borrower is a limited
partnership duly organized, validly existing and in good standing under the
Delaware Revised Uniform Limited Partnership Act and has all requisite
partnership power and authority to own and operate its properties (including,
without limitation, the Assets), to conduct its business as described in the
Registration Statement after giving effect to the Transfer, to enter into this
Agreement, the Notes, the other Loan Documents and the Private Placement Debt to
which it is a party, and to carry out the terms of this Agreement, the Notes,
such other Loan Documents and the Private Placement Debt.

<PAGE>

(b) The Managing General Partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and has
all requisite corporate power and authority to own and operate its properties,
to conduct its business as described in the Registration Statement, and to
execute and deliver as a general partner of the Borrower this Agreement, the
Notes and the other Loan Documents to which the Borrower is a party.

(c) Each Restricted Subsidiary is duly organized, validly existing and in
good standing under the laws of the state of its organization and has all
requisite power and authority to own and operate its properties, to conduct its
business as described in the Registration Statement after giving effect to the
Transfer, and to execute, deliver and perform the Loan Documents to which it is
a party.

(d) The Public Partnership is a limited partnership duly organized,
validly existing and in good standing under the [Delaware] Revised Uniform
Limited Partnership Act and has all requisite partnership power and authority to
own and operate its properties, to conduct its business as described in the
Registration Statement, and to execute, deliver and carry out the terms of the
Loan Documents to which it is a party.

SECTION 7.2 PARTNERSHIP INTERESTS. The only general partners of the
Borrower are the General Partners, which at the Closing Date will own between a
[____]% and a [_________]% general partner interest in the Borrower. As of the
Effective Date the only limited partner of the Borrower will be the Public
Partnership, which will own between a [____]% and a [ ]% limited partner
interest in the Borrower acquired as provided in the Registration Statement.
The Borrower will not have any other partners at the Closing. Except as
disclosed in ITEM 7.2 ("Subsidiaries") of the Disclosure Schedule, the Borrower
does not have, and immediately after giving effect to the transactions
contemplated by the [Conveyance Agreements] will not have, any Subsidiaries or
any Investments in any Person (other than Investments of the types permitted in
SECTION 8.2.5)).

SECTION 7.3 QUALIFICATION. The Borrower is duly qualified or registered
and is in good standing as a foreign

<PAGE>

limited partnership for the transaction of business, and each General Partner
and each Restricted Subsidiary is qualified or registered and is in good
standing as a foreign corporation for the transaction of business, in the
jurisdictions set forth in Item 7.3 ("Jurisdictions") of the Disclosure
Schedule which are the only jurisdictions, on the date hereof, in which,
after giving effect to the Transfer, the nature of their respective
activities or the character of the properties they own, lease or use makes
such qualification or registration necessary and in which the failure so to
qualify or to be so registered would not be reasonably expected to have a
materially adverse effect on the condition (financial or otherwise),
operations, assets, business, properties of the Borrower and its Restricted
Subsidiaries taken as a whole. Each of the General Partners, [NPS], [NGC]
the Restricted Subsidiaries and the Borrower has taken all necessary
partnership or corporate action to authorize the execution, delivery and
performance by it of this Agreement, the Notes, and each other Loan Document
to which it is a party. Each of the General Partners, and the Restricted
Subsidiaries has duly executed and delivered each of this Agreement, the
Notes and the other Loan Documents to which it is a party, and each of them
constitutes its legal, valid, binding and enforceable obligation in
accordance with its terms, except that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws of general application relating to or affecting the rights and remedies
of creditors and by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.

SECTION 7.4 DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by the Borrower and each Subsidiary of this Agreement,
the Notes and each other Loan Document executed or to be executed by it are
within the Borrower's and each Subsidiary's powers, have been duly authorized by
all necessary action, and do not

(a) contravene the Borrower's or any Subsidiary's Organic Documents;

(b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting the Borrower or
any Subsidiary; or

<PAGE>

(c) result in, or require the creation or imposition of, any Lien on
any of the Borrower's or any Subsidiary's properties, except as
contemplated hereby.

SECTION 7.5 GOVERNMENT APPROVAL, REGULATION, ETC. Except as set forth
in ITEM 7.5 of the Disclosure Schedule, no authorization or approval or other
action, by, and no notice to or filing with, any government authority or
regulatory body or other Person is required for the due execution, delivery or
performance by the Borrower or any Subsidiary of this Agreement, the Notes or
any other Loan Document to which it is a party, or the issuance of the Private
Placement Debt other than filings to perfect Liens and the Common Units
Issuance. All such required authorizations and approvals have been obtained and
such required notices and filings have been made. Neither the Borrower nor any
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

SECTION 7.6 BUSINESS; FINANCIAL STATEMENTS. (a) The Borrower has not
engaged in any business or activities prior to the date of this Agreement,
except for activities related to its formation, organization and prospective
operations, and will not have any significant assets or liabilities prior to the
Transfer, as contemplated by this Agreement and the Registration Statement.
[(b) The Borrower has delivered to the Agent complete and correct copies
of (i) the Registration Statement, and (ii) a memorandum dated __________
prepared by Morgan Stanley & Co. Incorporated and Dean Witter Reynolds, Inc. for
use in connection with the Borrower's private placement of the Private Placement
Debt (the "Memorandum"). The PRO FORMA consolidated financial statements of the
Public Partnership set forth in the Registration Statement comply in all
respects with the applicable accounting requirements of the Securities Act of
1933, as amended, and the published rules and regulations thereunder and, in the
opinion of the Borrower, the assumptions on which the pro forma adjustments to
such pro forma consolidated financial statements of the Public Partnership are
based provided a reasonable basis for presenting the significant effects of the

<PAGE>

transactions contemplated by such pro forma consolidated financial statements
and such pro forma adjustments give appropriate effect to such assumptions and
are properly applied in such pro forma consolidated financial statements. The
financial statements and schedules included in the Registration Statement (other
than with respect to pro forma matters) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods specified and present
fairly the financial position of the corporation or partnership to which they
relate as of the respective dates specified and the results of their operations
and cash flows for the respective periods specified. Since _______________, __,
199_ the Closing Date, there has been no material adverse change in the
business, financial condition, or results of operations of [Northwestern], the
General Partners and their consolidated subsidiaries taken as a whole. The
financial data included under the caption "Selected Historical and Pro Forma
consolidated Financial and Operating Date" for the Managing General Partner and
for the Public Partnership in the Registration Statement present fairly, on the
basis stated in the Registration Statement, the information set forth therein
and have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The historical aspects of
the financial data included under the caption "Capitalization" in the
Registration Statement present fairly, on the basis stated in the Registration
Statement, the information set forth therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement; the pro forma aspects of such financial data included
under the caption "Capitalization" in the Registration Statement have been
prepared in all material respects in accordance with all applicable rules and
guidelines of the Securities and Exchange Commission with respect to pro forma
financial information; and the assumptions on which the pro forma adjustments to
the pro forma aspects of the financial data included under the caption
"Capitalization" in the Registration Statement are based provide a reasonable
basis for presenting all of the significant effects of the transactions
contemplated by such pro forma financial data and such pro forma adjustments
give appropriate effect to such assumptions and are properly applied in such pro
forma financial data.

<PAGE>

(c) The unaudited pro forma balance sheets of the General Partner as of
____________ __, 1996 present fairly the financial condition of the General
Partner as of that date. Except as disclosed on [SCHEDULE 5.4(c)], since
____________ __, 1996 to the Closing Date, there has been no change or event
which could reasonably be expected to have a material adverse effect in the
condition (financial or otherwise), operations, assets, business, properties or
prospects of the General Partner. The financial data for the General Partner in
the Memorandum present fairly, on the basis stated in the Memorandum, the
information set forth therein and have been compiled based on the audited
financial statements included in the Registration Statement. The financial data
identified as historical included in the Memorandum present fairly, on the basis
stated in the Memorandum, the information set forth therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Memorandum represent, in all material respects and on the basis
stated in the Memorandum, the General Partner's best estimate at such time with
respect to pro forma financial information; and the assumptions on which the pro
forma adjustments to the pro forma aspects of the financial data included in the
Memorandum are based provide a reasonable basis for presenting all of the
significant effects of the transactions contemplated by such pro forma financial
data and such pro forma adjustments give appropriate effect to such assumptions
and are properly applied in such pro forma financial data.]

(d) The financial projections provided on or prior to the Closing Date
were prepared in a manner consistent with the financial statements provided in
the Registration Statement and have been prepared on a consistent basis
throughout the periods specified. Such financial projections are based on
management's best estimates of future performance in accordance with reasonable
assumptions based on historical performance. Such projections are not a
guarantee of future performance.

SECTION 7.7 NO MATERIAL ADVERSE CHANGE. Since the date of the financial
statements described in SECTION 7.6 and after giving effect to the Transfer, the
initial Borrowings hereunder and the issuance of the Private Placement Debt and
the Common Units Issuance and for any determination after the delivery of the
first financial statements pursuant to SECTION 8.1.1(b),

<PAGE>

since the date of such financial statements (if such financial statements
shall be satisfactory to the Required Lenders), there has been no material
adverse change in the condition (financial or otherwise), operations, assets
or business properties of the Borrower and Restricted Subsidiaries taken as a
whole.

SECTION 7.8 LITIGATION, LABOR CONTROVERSIES, ETC. There is no pending
or, to the knowledge of the Borrower or any Subsidiary, threatened litigation,
action, proceeding, or labor controversy affecting the Borrower or any
Subsidiary, or any of their respective properties, businesses, assets or
revenues, which has, or is reasonably likely to have, a material adverse effect
on the condition (financial or otherwise), operations, assets, business or
properties of the Borrower or any Subsidiaries taken as a whole or which
purports to affect the legality, validity or enforceability of this Agreement,
the Notes or any other Loan Document, except as disclosed in ITEM 7.8
("Litigation") of the Disclosure Schedule.

SECTION 7.9 OWNERSHIP OF PROPERTIES. The Borrower and each Subsidiary
owns good (and marketable with respect to realty) title to (or, in the case of
leased property, has a valid leasehold interest in) all of its properties and
assets, real and personal, tangible and intangible, of any nature whatsoever
(including patents, trademarks, trade names, service marks, copyrights and other
intellectual property rights as are necessary to conduct the business of the
Borrower and Subsidiaries as heretofore operated and as proposed to be operated
from the date hereof), free and clear of all Liens, charges or claims (including
infringement claims with respect to patents, trademarks, copyrights and the
like) except (a) as permitted pursuant to SECTION 8.2.3 and (b) in the case of
realty, other title exceptions which do not materially adversely affect such
Borrower's or such Subsidiary's use of its properties and assets. The Borrower
does not own any real property except as set forth in ITEM 7.9 ("Real Property")
of the Disclosure Schedule and except for real property acquired after the
Effective Date.

SECTION 7.10 TAXES. The Borrower and each Subsidiary, and any
predecessor entity thereto, has filed all tax returns and reports required by
law to have been filed by it and has paid all

<PAGE>

taxes and governmental charges thereby shown to be owing, except (a) any such
taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books, and (b) where the failure to do
so would not reasonably be expected to have a material adverse effect on the
condition (financial or otherwise) operations, assets, business or properties
of the Borrower and its Subsidiaries taken as a whole.

SECTION 7.11 PENSION AND WELFARE PLANS. During the twelve-consecutive-
month period prior to the date of the execution and delivery of this Agreement
and prior to the date of any Borrowing hereunder, no steps have been taken to
terminate any Pension Plan, and no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien under section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which might result in the incurrence by the Borrower
or any member of the Controlled Group of any material liability, fine or
penalty. Except as disclosed in ITEM 7.11 ("Employee Benefit Plans") of the
Disclosure Schedule, no Borrower nor any member of the Controlled Group has any
contingent liability with respect to any post-retirement benefit under a Welfare
Plan, other than liability for continuation coverage described in Part 6 of
Title I of ERISA.

SECTION 7.12 ENVIRONMENTAL WARRANTIES. Except as set forth in ITEM 7.12
("Environmental Matters") of the Disclosure Schedule:

(a) all facilities and property (including underlying groundwater)
owned, leased, used, occupied or controlled (in whole or in part) by the
Borrower or any Subsidiary have been, and continue to be, owned, leased,
used, occupied or controlled by the Borrower or such Subsidiary in material
compliance with all Environmental Laws;

(b) to the Borrower's and each Subsidiary's knowledge, there have
been no past, and there are no pending or threatened

<PAGE>

(i) material claims, complaints, notices or requests for
information received by the Borrower or any Subsidiary with respect to
any alleged violation of any Environmental Law, or

(ii) material complaints, notices or inquiries to the Borrower or
any Subsidiary regarding potential liability under any Environmental
Law;

(c) to the Borrower's and each Subsidiary's knowledge there have been
no Releases of Hazardous Materials at, on or under any property now or
previously owned or leased by the Borrower or any Subsidiary that, singly
or in the aggregate, have, or are reasonably likely to have, a material
adverse effect on the condition (financial or otherwise), operations,
assets, business, properties or prospects of the Borrower and the
Subsidiaries;

(d) the Borrower and each Subsidiary have been issued and are in
material compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and necessary or
desirable for their businesses the absence of or non compliance with which
would be materially adverse, and no order has been issued, no Environmental
Claim has been made, no penalty has been assessed and, to the knowledge of
the Borrower or any Subsidiary, no investigation or review has occurred or
is pending or threatened by any Person with respect to any alleged failure
by the Borrower or any Subsidiary to have any permit, certificate,
approval, license or other governmental authorization required under
applicable Environmental Laws in connection with the conduct of the
business or operations of any of them or to comply with any Environmental
Laws or with respect to any presence, generation, treatment, storage,
recycling, transportation, discharge, disposal or release of any hazardous
material generated by any Borrower, or any Subsidiary, and there are no
facts or circumstances in existence which could reasonably be expected to
form the basis for any such order, Environmental Claim, penalty or
investigation;

<PAGE>

(e) to the Borrower's and each Subsidiary's knowledge no property now
or previously owned or leased by the Borrower or any Subsidiary is listed
or proposed for listing (with respect to owned property only) on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-up where the
circumstances giving rise to such listing or proposed listing or the effect
of such listing or proposed listing has, or is reasonably likely to have, a
material adverse effect on the condition (financial or otherwise),
operations, assets, business, properties or prospects of the Borrower and
the Subsidiaries;

(f) to the Borrower's and each Subsidiary's knowledge there are no
underground storage tanks, active or abandoned, including petroleum storage
tanks, on or under any property now or previously owned, leased, used,
occupied or controlled (in whole or in part) by the Borrower or any
Subsidiary that, singly or in the aggregate, have, or are reasonably likely
to have, a material adverse effect on the condition (financial or
otherwise), operations, assets, business, properties or prospects of the
Borrower and the Subsidiaries;

(g) to the Borrower's and each Subsidiary's knowledge, no Borrower
nor any Subsidiary has directly transported or directly arranged for the
transportation of any Hazardous Material to any location, including
locations which are listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state
list or which is the subject of federal, state or local enforcement actions
or other investigations which, or otherwise which, is reasonably likely
lead to material claims against the Borrower or any Subsidiary for any
remedial work, damage to natural resources or personal injury, including
claims under CERCLA;

(h) to the Borrower's and each Subsidiary's knowledge there are no
polychlorinated biphenyls or friable asbestos present at any property now
or previously owned, leased, used, occupied or controlled (in whole or in
part) by the Borrower or any Subsidiary that, singly or in the aggregate,

<PAGE>

have, or may reasonably be expected to have, a material adverse effect on
the condition (financial or otherwise), operations, assets, business,
properties or prospects of the Borrower and the Subsidiaries; and

(i) to the Borrower's and each Subsidiary's knowledge, there have
been no environmental investigations, studies, audits, tests, reviews or
other analyses or related correspondence or documentation conducted by, or
that are or have been in the possession, custody or control of, the
Borrower or any Subsidiary in relation to any site or facility now or
previously owned, operated, leased, used, occupied or controlled by any of
them which have not been delivered to the Agent; and

(j) to the Borrower's and each Subsidiary's knowledge, no conditions
exist at, on or under any property now or previously owned, leased, used,
occupied or controlled (in whole or in part) by the Borrower or any
Subsidiary which, with the passage of time, or the giving of notice or
both, would give rise to material liability under any Environmental Law.

SECTION 7.13 REGULATIONS G, U AND X. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Loans will be used for a purpose which violates,
or would be inconsistent with, F.R.S. Board Regulation G, U or X. Terms for
which meanings are provided in F.R.S. Board Regulation G, U or X or any
regulations substituted therefor, as from time to time in effect, are used in
this Section with such meanings.

SECTION 7.14 ACCURACY OF INFORMATION. All factual information heretofore
or contemporaneously furnished by or on behalf of the Borrower in writing to the
Agent or any Lender for purposes of or in connection with this Agreement or any
transaction contemplated hereby which were furnished to the Agent and all other
such factual information hereafter furnished by or on behalf of the Borrower or
any Subsidiary to the Agent or any Lender will be true and accurate in every
material respect on the date as of which such information is dated or certified
and as of the date of execution and delivery of this Agreement by the Agent

<PAGE>
and such Lender, and such information, when all such information is considered
as a whole, is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.

SECTION 7.15 CAPITALIZATION. ITEM 7.15 ("Capitalization") of the
Disclosure Schedule is a pro forma balance sheet of the Borrower on the
Effective Date after giving effect to the initial Borrowings hereunder, the
issuance of the Private Placement Debt, the repayment of the Indebtedness set
forth in ITEM 8.2.2(a) ("Indebtedness to be Paid on Effective Date") of the
Disclosure Schedule and the Transfer.

SECTION 7.16 SOLVENCY. The Borrower, both prior to and after giving
effect to any Borrowing hereunder (including the initial Borrowings), (i) is not
"insolvent" (as such term is defined in Section 101(31)(a) of the Bankruptcy
Code); (ii) is able to pay its debts and other liabilities, contingent
obligations and commitments as they mature; and (iii) does not have unreasonably
small capital for the business in which it is engaged or for any business or
transaction in which it is about to engage.

SECTION 7.17 PRIVATE PLACEMENT DEBT REPRESENTATIONS. Each representation
and warranty made by the Borrower pursuant to the Note Agreement was true and
correct in all material respects when made.

SECTION 7.18 COMPLIANCE WITH LAWS. Neither the Borrower nor any
Restricted Subsidiary is in violation of any statute, law or governmental rule
or regulation or court or arbitrator's judgment, decree or order, in any such
case, which either individually or in the aggregate, assuming disclosure of all
known facts, would reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), operations, assets, business or
properties of the Borrower and the Restricted Subsidiaries, taken as a whole.

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ARTICLE VIII

COVENANTS

SECTION 8.1 AFFIRMATIVE COVENANTS. The Borrower agrees with the Agent
and each Lender that, until all Commitments have terminated and all Obligations
have been paid and performed in full, the Borrower will perform the obligations
set forth in this SECTION 8.1.

SECTION 8.1.1 FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. The Borrower
will furnish, or will cause to be furnished, to each Lender and the Agent copies
of the following financial statements, reports, notices and information:

[(a) as soon as practicable, but in any event within 60 days [45
days?] after the end of each of the first three Fiscal Quarters in each
Fiscal Year of the Borrower, consolidated (and (i) if the Restricted
Subsidiaries or a Restricted Subsidiary constitutes a Substantial Portion,
then as to the Restricted Subsidiaries or (ii) if the Restricted
Subsidiaries do not or a Restricted Subsidiary does not constitute a
Substantial Portion, but one or more Restricted Subsidiaries have
outstanding Indebtedness owing to Persons other than the Borrower or any
Restricted Subsidiary and other than pursuant to any Security Document,
then as to the Restricted Subsidiaries, consolidating) balance sheets of
the Borrower and the Restricted Subsidiaries as at the end of such period
and the related consolidated (and, as to statements of income and cash
flow, if applicable and as appropriate, consolidating) statements of
income, surplus or partners' capital, cash flows and stockholders' equity
of the Borrower and the Restricted Subsidiaries (i) for such period and
(ii) (in the case of the second and third Fiscal Quarters) for the period
from the beginning of the current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case (except in the case of financial
statements with respect to the fiscal year of the Borrower beginning
________________, 1996 or if consolidating balance sheets of the Restricted
Subsidiaries were not required to be delivered pursuant to this subdivision
(a) for the previous corresponding period) in

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<PAGE>

comparative form the consolidated and, where applicable and as
appropriate, consolidating figures for the corresponding periods of the
previous fiscal year, all in reasonable detail and certified by the
chief financial Authorized Officer of the General Partner as presenting
fairly, in all material respects, the information contained therein
(subject to changes resulting from normal year-end adjustments), in
accordance with GAAP applied on a basis consistent with prior fiscal
periods PROVIDED that delivery within the time period specified above of
copies of the Borrower's Quarterly Report on Form 10-Q prepared in
compliance with the requirements therefor and filed with the Securities
and Exchange Commission shall be deemed to satisfy the requirements
hereof to the extent that such reports otherwise satisfy such
requirements (for purposes of this Section 8.1.1(a), "Substantial
Portion" shall mean that either (x) either (A) the book value of the
assets of the Restricted Subsidiaries exceeds 10% of the book value of
the consolidated assets of the Borrower and the Restricted Subsidiaries,
or (B) the Restricted Subsidiaries account for more than 10% of the
consolidated Net Income of the Borrower and the Restricted Subsidiaries,
in each case in respect of the four Fiscal Quarters ended as of the date
of the applicable financial statement) or (y) either (A) the book value
of the assets of any Restricted Subsidiary exceeds 5% of the book value
of the consolidated assets of the Borrower and the Restricted
Subsidiaries, or (B) any Restricted Subsidiary accounts for more than 5%
of the consolidated Net Income of the Borrower and its Restricted
Subsidiaries, in each case in respect of the four Fiscal Quarters ended
as of the date of the applicable financial statement);

(b) as soon as practicable, but in any event within 120 days [90
days?] after the end of each Fiscal Year beginning June 30, 1997,
consolidated (and (i) if the Restricted Subsidiaries or a Restricted
Subsidiary constitutes a Substantial Portion, then as to the Restricted
Subsidiaries or (ii) if the Restricted Subsidiaries do not or a Restricted
Subsidiary does not constitute a Substantial Portion, but one or more
Restricted Subsidiaries have outstanding Indebtedness owing to Persons
other than the Borrower or any Restricted Subsidiary and other than

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<PAGE>

pursuant to any Security Document, then as to the Restricted
Subsidiaries, consolidating) balance sheets of the Borrower and any
Restricted Subsidiaries and the consolidated balance sheets of each
General Partner as at the end of such year and the related consolidated
(and, as to statements of income and cash flows, if applicable and as
appropriate, consolidating) statements of income, partners' capital,
cash flows and stockholders' equity of the Borrower and the Restricted
Subsidiaries and the consolidated statements of income, surplus, cash
flow and stockholders' equity of each General Partner for such Fiscal
Year, setting forth in each case (except in the case of the financial
statements with respect to the Fiscal Year of the Borrower beginning
__________________, 1996 or if consolidating balance sheets of the
Restricted Subsidiaries were not required to be delivered pursuant to
this subdivision (b) for the preceding corresponding period) in
comparative form the consolidated and, where applicable and as
appropriate, consolidating figures for the previous Fiscal Year, all in
reasonable detail, PROVIDED that delivery within the time periods
specified above of copies of the Borrower's Annual Report on Form 10-K
prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements hereof to the extent such reports otherwise satisfy such
requirements, and (i) in the case of such consolidated financial
statements of the Borrower, accompanied by a report thereon of
____________________ or other independent public accountants of
recognized national standing selected by the Borrower, which report
shall state that such consolidated financial statements present fairly
in all material respects the financial position of the Borrower and the
Restricted Subsidiaries as at the dates indicated and the results of
their operations and cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years and that the
audit by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards in effect in the United States from time to time, and (ii) in
the case of such consolidated financial statements of each General
Partner and such consolidating financial statements of the Borrower,

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<PAGE>

certified by the principal financial officer of the general partner of
the Borrower, as presenting fairly in all material respects the
information contained therein, in accordance with GAAP applied on a
basis consistent with prior fiscal periods;

(c) as soon as available and in any event within 60 days after the
end of each of the first three Fiscal Quarters and within 120 days after
the end of each Fiscal Year, a certificate, executed by the chief financial
Authorized Officer of the Borrower or Managing General Partner, showing (in
reasonable detail and with appropriate calculations and computations in all
respects satisfactory to the Agent) compliance with the financial covenants
set forth in SECTION 8.2.4 and such other information as may reasonably be
requested by the Agent and stating that no Event of Default exists, or, if
any Event of Default exists, stating the nature and status thereof;

(d) promptly upon receipt thereof, copies of all reports, management
letters and other detailed information (if any) prepared with respect to
the Borrower or any Subsidiary by any independent public accountant in
connection with each annual or interim audit of such Person;

(e) as soon as possible and in any event within three Business Days
after knowledge of the occurrence of each Default, a statement of the chief
financial Authorized Officer of the Borrower setting forth details of such
Default and the action which the Borrower has taken and propose to take
with respect thereto;

(f) as soon as possible and in any event within three Business Days
after (x) the occurrence of any material adverse development with respect
to any litigation, action, proceeding, or labor controversy described in
SECTION 7.7 or (y) the commencement of any labor controversy, litigation,
action, proceeding of the type described in SECTION 7.7, notice thereof and
copies of all documentation relating thereto;

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<PAGE>

(g) within five Business Days after the sending or filing thereof,
all reports, registration statements and prospectuses which either the
Borrower, the Managing General Partner or the Public Partnership files with
the Securities and Exchange Commission or any national securities exchange;

(h) immediately upon becoming aware of the institution of any steps
by the Borrower or any other Person to terminate any Pension Plan, or the
failure to make a required contribution to any Pension Plan if such failure
is sufficient to give rise to a Lien under section 302(f) of ERISA, or the
taking of any action with respect to a Pension Plan which could result in
the requirement that the Borrower furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any event with respect to
any Pension Plan which could result in the incurrence by the Borrower of
any material liability, fine or penalty, or any material increase in the
contingent liability of the Borrower with respect to any post-retirement
Welfare Plan benefit, notice thereof and copies of all documentation
relating thereto or any assertion against the Borrower or any Subsidiary or
any member of the Controlled Group of withdrawal liability of any
Multiemployer Plan; and

(i) within ___ Business Days after each Fiscal Quarter end, a
certificate setting forth the net proceeds from Asset Dispositions, the
application of such proceeds as permitted under SECTION 8.2.8, and the
mandatory prepayments made as required by SECTION 3.1(c); and

(j) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any Subsidiary as any Lender
through the Agent may from time to time reasonably request.

SECTION 8.1.2 COMPLIANCE WITH LAWS, ETC. The Borrower will, and will
cause each of its Restricted Subsidiaries to, comply in all material respects
with all applicable laws, rules, regulations and orders, such compliance to
include (without limitation):

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(a) the maintenance and preservation of its existence and
qualification as a foreign corporation or partnership; PROVIDED, HOWEVER,
that nothing in this Section 8.1.2 shall prevent the loss of the existence
of any such Subsidiary or any such right or franchise if such loss is, in
the judgment of the Borrower, both desirable in the conduct of business of
the Borrower and its Subsidiaries, taken as a whole, and not
disadvantageous in any material respect to the Lenders individually or in
the aggregate through a series of related transactions; and

(b) the payment, before the same become delinquent, of all material
taxes, assessments and governmental charges imposed upon it or upon its
property except in each case (1) to the extent being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books or (2) where
the failure to do so would not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise) operations,
assets, business, properties of the Borrower and its Subsidiaries taken as
a whole.

SECTION 8.1.3 MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition, and make necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times unless the Borrower
determines in good faith that the continued maintenance of any of its properties
is no longer economically desirable.

SECTION 8.1.4 INSURANCE. The Borrower will, and will cause each of its
Restricted Subsidiaries to, maintain or cause to be maintained with responsible
insurance companies, insurance, including self insurance, with respect to its
properties and business against such casualties and contingencies and of such
types and in such amounts as is financially reasonable and customarily obtained
by corporations or partnerships similarly situated.

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SECTION 8.1.5 BOOKS AND RECORDS. The Borrower will, and will cause each
of its Subsidiaries to, keep books and records which accurately reflect all of
its business affairs and transactions.

SECTION 8.1.6 INSPECTION. The Borrower shall permit the representatives
of each Lender, at the expense of the Borrower at any time when a Default or
Event of Default has occurred and is in existence and otherwise representatives
of any Lender with a Commitment of not less than $10,000,000 with prior written
notice at the expense of such Lender, to visit and inspect during normal
business hours any of the properties of the Borrower or any Restricted
Subsidiary, to examine all their respective books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants all at such reasonable times and
intervals and as often as may be reasonably requested. The Borrower hereby
authorizes the Borrower's and Restricted Subsidiaries' independent accountants,
and shall upon such request deliver a letter to the Borrower's and Restricted
Subsidiaries' independent public accountants authorizing them, to reply to and
comply with the provisions of this SECTION 8.1.6.

SECTION 8.1.7 ENVIRONMENTAL COVENANT. The Borrower will, and will cause
each of its Subsidiaries to,

(a) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all material necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;

(b) immediately notify the Agent and provide copies upon receipt of
all material written claims, complaints, notices or inquiries relating to
the condition of its facilities and properties or compliance with
Environmental Laws, and shall promptly cure and have dismissed with
prejudice to the satisfaction of the Agent any actions and proceedings
relating to compliance with Environmental Laws

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except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books; and

(c) provide such information and certifications which the Agent may
reasonably request from time to time to evidence compliance with this
SECTION 8.1.7.

SECTION 8.1.8 RANKING/SECURITY. The Borrower will cause the Obligations
to be secured and rank pari passu with the Private Placement Debt and the Parity
Debt. All of the accounts receivable, inventory, customer storage tanks of the
Borrower and the Restricted Subsidiaries (except tanks financed pursuant to
clause (e), (f) and (g) in SECTION 8.2.2) and the General Collateral will be
pledged to secure the Private Placement Debt and the Obligations. In the event
that the Borrower obtains or creates any Restricted Subsidiaries, the Borrower
shall cause each such Restricted Subsidiary to issue a guarantee of the
Obligations, Private Placement Debt and Parity Debt and each such guarantee will
be in favor of the Collateral Agent and secured by all the Collateral of such
Restricted Subsidiary.

SECTION 8.1.9 CLEAN DOWN PERIOD. The Borrower, for a period of thirty
consecutive days during each Fiscal Year, will make a repayment of the aggregate
outstanding principal amount of all Working Capital Loans, if any, in an amount
sufficient so as to cause such aggregate outstanding principal amount not to
exceed $10,000,000.

SECTION 8.2 NEGATIVE COVENANTS. The Borrower agrees with the Agent and
each Lender that, until all Commitments have terminated and all Obligations have
been paid and performed in full, the Borrower will perform the obligations set
forth in this SECTION 8.2.

SECTION 8.2.1 BUSINESS ACTIVITIES. The Borrower will not, nor will it
permit any of its Restricted Subsidiaries to, engage in any material line of
business, except those described in the FIRST RECITAL and such activities as may
be incidental or related thereto.

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SECTION 8.2.2 INDEBTEDNESS. The Borrower will not, nor will it permit any
of its Restricted Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:

(a) Indebtedness existing on the date hereof not to exceed
$15,000,000;

(b) Indebtedness evidenced by the Obligations;

(d) additional Indebtedness of the Borrower and its Restricted
Subsidiaries which is incurred in connection with additions, improvements
or repairs (which may be capitalized on the Borrower's books in accordance
with GAAP) of or additions to the assets of the Borrower (which may be
secured equally and ratably with the Obligations), and which does not, at
any time, in the aggregate exceed an amount equal to the net proceeds of
any partnership interests sold by the Borrower or capital contributions
received by the Borrower designated to finance such additions, repairs or
improvements;

(e) additional secured Indebtedness incurred in connection with
capital lease obligations provided that (1) security shall extend only to
such property or asset, (2) the obligation incurred does not exceed the
fair market value of such property or asset (each as determined in good
faith by the Board of Directors of the Managing General Partner), and (3)
after giving effect to such debt the Borrower could incur at least $1 of
additional Indebtedness pursuant to the incurrence test in clause (h)
below;

(f) additional secured Indebtedness incurred in connection with
purchase money obligations provided that (1) security shall extend only to
such property or asset, (2) the obligation incurred does not exceed 85% of
the fair market value of such property or asset (as determined in good
faith by the Board of Directors of the Managing General

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Partner), and (3) after giving effect to such debt, the Borrower could
incur at least $1 of additional Indebtedness pursuant to the incurrence
test in clause (h);

(g) additional secured Indebtedness incurred to pay all or a portion
of the purchase price of property acquired by the Borrower or to secure
obligations incurred in consideration of non-compete agreements, provided
that (1) security shall extend only to the property or assets acquired, (2)
such obligation does not exceed 85% of the fair market value of such
property or asset, or 35% in the case of non-compete obligations (each as
determined in good faith by the Board of Directors of the Managing General
Partner), and (3) after giving effect to such Indebtedness the Borrower
could incur at least $1 of additional Indebtedness pursuant to the
incurrence test in clause (h) below;

(h) additional Indebtedness of the Borrower and its Restricted
Subsidiaries in excess of Indebtedness permitted by clause (a)-(g) above,
if (a) the pro forma Consolidated Cash Flow Coverage of Debt Service
(including the Indebtedness to be incurred and the repayment of any debt
being refinanced and repaid) is greater than 2.50 (as at the end of the
last Fiscal Quarter but giving effect to such additional Indebtedness as
set forth in the definition of "Consolidated Cash Flow Coverage of Debt
Service"), (b) the pro forma Consolidated Cash Flow Coverage of Maximum
Debt Service (including the Indebtedness to be incurred and the repayment
of any debt being refinanced and repaid) is greater than 1.25 (as at the
end of the last Fiscal Quarter but giving effect to such additional
Indebtedness as set forth in the definition of "Consolidated Cash Flow
Coverage of Maximum Debt Service"), and (c) the total funded Indebtedness
(including the Indebtedness to be incurred) to pro forma Consolidated Cash
Flow (as at the end of the last Fiscal Quarter but giving effect to such
additional Indebtedness as set forth in the definition below) is less than
4.75:1.00 if prior to December 31, 1997, 4.50:1.00 if thereafter but prior
to December 31, 1998, and 4.25:1.00 thereafter. Such additional
Indebtedness under this clause (h) may be secured equally and ratably with
the Obligations.

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(i) additional unsecured Indebtedness of the Borrower or its
Restricted Subsidiaries owing to either General Partner or an Affiliate of
either General Partner, provided that such Indebtedness (a) does not exceed
$20,000,000 in the aggregate at any time outstanding, and (b) is created
under an agreement pursuant to which such Indebtedness is subordinated to
the Obligations pursuant to subordination provisions in the form set forth
as EXHIBIT ;

(j) any Restricted Subsidiary may become liable with respect to
Indebtedness owing to the Borrower or to another Restricted Subsidiary;
provided that such Indebtedness is created under an agreement pursuant to
which such Indebtedness is subordinated to the Obligations pursuant to
subordination provisions in the form set forth as EXHIBIT ;

(k) the Borrower and any Restricted Subsidiary may become liable with
respect to certain pre-existing Indebtedness relating to any Person
(including any Restricted Subsidiary), business or assets acquired by the
Borrower and its Restricted Subsidiaries, provided that: (a) no Default or
Event of Default shall have occurred and be continuing, (b) such
Indebtedness was not incurred in anticipation of the acquisition of such
Person, business or assets, and (c) either (i) the sum of (y) such
Indebtedness and (z) the then outstanding Acquisition Loans shall not
exceed the greater of $75,000,000 or 40% of Consolidated Net Worth as of
the date of incurrence, or (ii) after giving effect to such Person becoming
a Restricted Subsidiary or the acquisition of such business or assets, the
Borrower and its Restricted Subsidiaries could incur at least $1 of
additional Indebtedness subject to the incurrence test in (h) above (it
being understood for purposes of the SECTION 8.2.2(k) [and Section ]
that any Indebtedness which, on the date of acquisition of any Person,
Business or Assets, could be incurred under either the foregoing clause (i)
or (ii) of this SECTION 8.2.2(k), shall be deemed to have been incurred
under clause (ii) of this SECTION 8.2.2(k);

(l) Indebtedness pursuant to Interest Rate Agreements; and

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(m) Indebtedness pursuant to Commodity Hedging Agreements.

Notwithstanding the foregoing, the aggregate outstanding principal amount
of all Indebtedness (other than obligations under guarantees in favor of
holders of Parity Debt, the Private Placement Debt and the Obligations) of
Restricted Subsidiaries shall not exceed $10,000,000.

Furthermore, if no Default or Event of Default shall have occurred and be
continuing, the provisions of this Section will not prevent the Borrower
and its Restricted Subsidiaries from:

(i) becoming liable for Indebtedness secured equally and ratably
with the Obligations incurred for the purpose of extending, renewing,
refunding or refinancing the Private Placement Debt or the Parity
Debt, provided that (1) the principal amount of such Indebtedness
shall not exceed the principal amount of the Private Placement Debt or
the Parity Debt being extended, renewed, refunded or refinanced
together with any accrued interest and premium with respect thereto
and any costs and expenses related to such renewal, refunding or
refinancing and (2) such Indebtedness (x) shall not mature prior to
the stated maturity of the Parity Debt so exchanged or refinanced and
(y) shall have an average life equal to or greater than the remaining
average life of the Parity Debt so exchanged or refinanced;

(ii) becoming liable for unsecured Indebtedness incurred for the
purpose of extending, renewing, refunding or refinancing, the Private
Placement Debt or Parity Debt or other Indebtedness provided that (1)
the principal amount of such unsecured Indebtedness to be incurred
shall not exceed the principal amount of the Parity Debt or other
Indebtedness being extended, renewed, refunded or refinanced together
with any accrued interest and premium with respect thereto and any
costs and expenses related to such extension, renewal, refunding or
refinancing and (2) such

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Indebtedness (x) shall not mature prior to the stated maturity of
the Parity Debt or other Indebtedness so exchanged or refinanced
and (y) shall have an average life equal to or greater than the
remaining average life of the Parity Debt or other Indebtedness so
exchanged or refinanced; and

(iii) becoming liable for secured Indebtedness other than the
Private Placement Debt or Parity Debt incurred for the purpose of
extending, renewing, refunding or refinancing permitted secured
Indebtedness other than the Private Placement Debt or Parity Debt
provided that (1) the principal amount of such secured Indebtedness to
be incurred shall not exceed the principal amount of the secured
Indebtedness being extended, renewed, refunded or refinanced together
with any accrued interest and premium with respect thereto and any
costs and expenses related to such extension, renewal, refunding or
refinancing, (2) such Indebtedness (x) shall not mature prior to the
stated maturity of the Indebtedness so exchanged or refinanced and (y)
shall have an average life equal to or greater than the remaining
average life of the Indebtedness so exchanged or refinanced, and (3)
the security therefor shall not be increased.

SECTION 8.2.3 LIENS. The Borrower will not, nor will it permit any of its
Restricted Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its property, revenues or assets, whether now owned or hereafter
acquired, except:

(a) Liens in the Collateral created in favor of the Collateral Agent
for the benefit of the Lenders, the Private Placement Debt holders, the
holders of other Parity Debt and the counterparties to Interest Rate
Agreements;

(b) Liens in favor of holders of certain specified permitted secured
Indebtedness pursuant to clauses (a), (e), (f), (g), (k) and (m) of SECTION
8.2.2 and extensions, renewals, refundings or refinancings thereof
permitted pursuant to (i) of the last section of SECTION 8.2.2;

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provided that Liens with respect to Indebtedness permitted pursuant to
clause (a) shall be in existence on the date hereof and Liens with
respect to Indebtedness; [pursuant to clause (m) may not attach to any
property other than commodities subject to the applicable Commodity
Hedging Agreement]; and

(c) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books;

(d) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set
aside on its books;

(e) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;

(f) judgment Liens (1) in existence less than 15 days after the entry
thereof or (2) with respect to which execution has been stayed or (3) the
payment of which is covered in full (subject to a customary deductible or
co-insurance amount) by insurance maintained with responsible insurance
companies not exceeding $100,000 at any time in existence.

(g) Liens or rights of any Restricted Subsidiary securing
indebtedness of such Restricted Subsidiary or to the Borrower or any other
Restricted Subsidiary;

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(h) Liens incurred in connection with self insurance arrangements;

(i) Liens incidental to the conduct of its business or ownership of
its assets which were not incurred in connection with the borrowing of
money and which do not materially impair the use thereof by the Borrower or
any Restricted Subsidiary;

(j) leases or subleases granted to others, zoning restrictions,
easements, licenses, reservations, rights-of-way, restrictions on the use
of property or irregularities of title and other similar changes,
encumbrances and Liens which do not materially impair the use thereof by
the Borrower as any Restricted Subsidiaries;

(k) Liens described on ITEM 8.2.3 ("Liens") to the Disclosure
Schedule;

(l) Liens continued on renewals or extension of Indebtedness
previously secured so long as the principal amounts of the Indebtedness
secured thereby are not increased;

provided, however, that Liens on real estate shall be limited to real estate
acquired after the date hereof securing Indebtedness not in excess of $5,000,000
per year.

SECTION 8.2.4 FINANCIAL CONDITION. The Borrower shall not permit

(a) the Total Funded Indebtedness (less the amount of cash in hand
with the Borrower and its Restricted Subsidiaries in excess of $1,000,000
but not in excess of $10,000,000) to Consolidated Cash Flow Ratio as at the
end of any Fiscal Quarter to be greater than 4.75:1 at any time on or
before December 31, 1997, 4.50:1 at any time thereafter on or before
December 31, 1998 and 4.25:1 at any time thereafter [, PROVIDED the
Borrower may take into consideration actual cash on hand in the amount of
no less than $1,000,000 nor more than $10,000,000 for purposes of
calculations pursuant to this paragraph.].

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(b) the ratio of Consolidated Cash Flow to consolidated Interest
Expense as at the end of any Fiscal Quarter to be less than 2.00:1 at any
time prior to December 31, 1997, 2.25:1 any time thereafter on or before
December 31, 1998 and 2.50:1 at any time thereafter.

Notwithstanding any provision in the definition of "Consolidated Cash Flow", for
the purpose clause (a) and (b)of this SECTION 8.2.4 only, Consolidated Cash Flow
shall be calculated on a rolling eight quarter basis divided by two or on a
rolling four quarter basis, whichever is greater.

SECTION 8.2.5 INVESTMENTS. Neither the Borrower nor any of its Restricted
Subsidiaries will purchase or own any stock or other securities of any other
person, make any acquisitions or make loans or capital contributions to or
guarantee the obligations of any other person (other than guarantees that would
be permitted as Indebtedness under SECTION 8.2.2) or make any other Investments,
except:

(a) investments, advances and loans by the Borrower to any Restricted
Subsidiary and investments, advances or loans to the Borrower by any
Restricted Subsidiary;

(b) extensions of trade credit and advances to third parties in the
ordinary course of business;

(c) loans and advances to officers and employees in the ordinary
course of business in amounts not in excess of $2,500,000 at any time
outstanding;

(d) investments received in connection with the exercise of customary
creditors' rights upon default;

(e) guarantees (excluding guarantees of Indebtedness) undertaken in
the ordinary course of business;

[(f) certain investments in Interest Rate Agreements and Commodity
Hedging Agreements;]

(g) investments in short-term, high quality marketable securities;

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(h) investments in capital stock or other equity interests, but only
if, upon completion of such transactions, the issuer of such equity
interests becomes a Restricted Subsidiary;

(i) investments (other than those included in (h) above) in the
capital stock of, or joint venture, partnership or other equity interests
in, or the contributions to capital in the ordinary course of business of,
its Unrestricted Subsidiaries up to a maximum of $20,000,000 annually and
on a cumulative basis, no more than 20% of Consolidated Net Worth, in each
case, to be increased by the net proceeds of any partnership interests sold
by the Borrower or capital contributions received by the Borrower from the
Managing General Partner designated to finance such investments in each
case, without duplication, net of any cash distributions received from all
Unrestricted Subsidiaries for such period; and

(j) acquisitions so long as after any acquisition the Borrower shall
be in pro forma compliance with the covenants and after any acquisition in
excess of $15,000,000 the Borrower shall deliver a certificate
demonstrating such compliance and so long as the Required Lenders shall
consent (which consent shall not be unreasonably withheld) to any
acquisition in excess of $25,000,000 if the outstanding Acquisition Loans
exceed $40,000,000.

SECTION 8.2.6 RESTRICTED PAYMENTS, ETC.

(a) The Borrower will not make any Restricted Payment, other than
dividend payments needed to pay the tax liability and legal, accounting and
other professional fees and expenses of the Managing General Partner if (i)
there exists a Default or an Event of Default or if after giving effect to
such Restricted Payment a Default or an Event of Default would exist, or
(ii) the pro forma ratio of the Coverage Test is less than 2.00 if prior to
December 31, 1997, 2.25 if thereafter but prior to December 31, 1998, or
2.50 thereafter, for the period of four Fiscal Quarters immediately
preceding the date of such Restricted Payment. Other than this
restriction, the Borrower may make quarterly Restricted

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Payments in an amount not to exceed Available Cash in the preceding
Fiscal Quarter. Upon satisfaction of the Coverage Test and subsequent
declaration by the Borrower, Restricted Payments must be made within 60
days and if the payment would have been permitted as of the date such
declaration, such payment shall be remitted if made during such 60 day
period. Available Cash shall exclude without duplication (x) in each
Fiscal Quarter a reserve equal to at least 50% of the aggregate amount
of all interest payments to be made in respect of the Working Capital
Loans in respect of all Indebtedness of the Borrower and the Restricted
Subsidiaries upon which interest is due semiannually or less frequently
to be made in the next Fiscal Quarter (assuming, in the case of
Indebtedness bearing interest at fluctuating interest rates which cannot
be determined in advance, that the interest rate in effect on the last
Business Day of the immediately preceding Fiscal Quarter will remain in
effect until such Indebtedness in due to be paid), (y) with respect to
Acquisition Loans (as of the Acquisition Loan Conversion Date) and any
Indebtedness secured equally and ratably with the Notes of which
principal is payable annually, in the third Fiscal Quarter immediately
preceding each Fiscal Quarter in which any scheduled principal payment
is due with respect to such Acquisition Loans and other Indebtedness (a
"principal payment quarter"), a reserve equal to at least 25% of the
aggregate amount of all principal to be paid in respect of such
Acquisition Loans and other such Indebtedness secured equally and
ratably with the Notes in such principal payment quarter; in the second
Fiscal Quarter immediately preceding a principal payment quarter, a
reserve equal to at least 50% of the aggregate

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amount of all principal to be paid in respect of such Acquisition Loans
and other such Indebtedness in such principal payment quarter; and in
the Fiscal Quarter immediately preceding a principal payment quarter, a
reserve equal to at least 75% of the aggregate amount of all principal
to be paid in respect of such Acquisition Loans and other such
Indebtedness in such principal payment quarter, and (z) with respect to
any other Indebtedness secured equally and ratably with the Notes of
which principal is payable semiannually, in each Fiscal Quarter which
immediately precedes a Fiscal Quarter in which principal is payable in
respect of such Indebtedness a reserve equal to at least 50% of the
aggregate amount of all principal to be paid in respect of such
Indebtedness in the next Fiscal Quarter. Such reserve for principal
amounts to be paid shall be reduced by the aggregate principal amount of
all binding, irrevocable letters of credit established to refinance such
principal.

(b) The Borrower will not, and will not cause or permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of such Restricted Subsidiary to (a) pay
dividends or make any other distributions on or in respect of its capital
stock, or pay any indebtedness owed to the Borrower or any Restricted
Subsidiary, (b) make loans or advances to the Borrower or any Restricted
Subsidiary or (c) transfer any of its properties or assets to the Borrower
or any Restricted Subsidiary, except for such encumbrances or restrictions
existing under or by reason of customary non-assignment provisions in any
lease governing a leasehold interest or other contract entered into in the
ordinary course of business consistent with past practices.

SECTION 8.2.7 CONSOLIDATION, MERGER, ETC. The Borrower will not, and will
not permit any of its Subsidiaries to, merge or consolidate with any Person and
the Borrower will not, and will not permit, any Restricted Subsidiary to,
transfer all or substantially all its assets to any Person, except

(a) any Restricted Subsidiary may consolidate with or merge into or
transfer all or substantially all of its assets to the Borrower or any
other Restricted Subsidiary;

(b) any entity may consolidate with or merge into the Borrower or a
Restricted Subsidiary if the Borrower or a Restricted Subsidiary is the
surviving entity and after giving effect to such transaction (a) the
Borrower's Consolidated Net Worth shall not be less than its Consolidated
Net Worth immediately prior to such transaction (without regard to purchase
accounting adjustments), (b) neither the Borrower nor any of its
Subsidiaries shall be liable with respect to Indebtedness or allow its
property to be subject to any Lien which is not permitted hereby, (c) the
Borrower can incur at

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least $1 of additional Indebtedness pursuant to clause (h) under SECTION
8.2.2.; PROVIDED, HOWEVER, this provision (b)(c) shall not apply if the
consolidating or merging Person has no outstanding Indebtedness, (d)
substantially all of the assets and business of the Borrower and its
Restricted Subsidiaries are located in the U.S., and (e) at the time of
such merger or consolidation, and after giving effect thereto, no
Default or Event of Default shall exist; and

(c) the Borrower may consolidate or merge with another Person or
transfer all or substantially all its assets to another entity if (a) the
surviving or transferee entity is a corporation or limited partnership
organized under U.S. law and such entity assumes all of the obligations
under the Agreement and the Security Documents and delivers a legal opinion
reasonably acceptable to Required Lenders to the effect that the assumption
agreement has been duly authorized, executed and delivered by and is
enforceable against the successor; and (b) after giving effect to such
transaction: (i) such entity shall not have a consolidated net worth of
less than the Consolidated Net Worth of the Borrower immediately prior to
such transaction (without regard to purchase accounting adjustments); (ii)
such entity shall not be liable with respect to Indebtedness or allow its
property to be subject to any Lien which is not permitted hereby; (iii)
such entity can incur at least $1 of additional Indebtedness pursuant to
clause (h) under SECTION 8.2.2; PROVIDED, HOWEVER, this provision (c)(iii)
shall not apply if the consolidating or merging entity has no outstanding
Indebtedness; (iv) substantially all the assets and business of such entity
are located in the U.S.; and (v) at the time of such merger, consolidation,
sale or other transaction no Default or Event of Default shall exist.

SECTION 8.2.8 ASSET DISPOSITIONS, ETC. Except in connection with a
transaction permitted under SECTION 8.2.7, and investments in Restricted
Subsidiaries or Unrestricted Subsidiaries permitted under SECTION 8.2.5 neither
the Borrower nor any of its Restricted Subsidiaries may sell or dispose of any
portion of its property (excepting abandonment, sale of inventory or other
dispositions in the ordinary course of business), or sell equity interests in
any

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Restricted Subsidiary to any third party (all of the foregoing are herein
called "ASSET DISPOSITIONS"), unless:

(a) immediately before and after giving effect to such transaction,
no Default or Event of Default shall exist or be continuing;

(b) an amount equal to the net after-tax proceeds from such Asset
Dispositions in excess of $7,500,000 per fiscal year and $30,000,000 over
the life of the Agreement have been spent within 90 days before the sale of
such assets or are committed to be expended within 365 days after the sale
of such assets for assets in the United States in a line of business as
described in SECTION 8.2.1 and which assets, to the extent the assets so
sold constituted a portion of the General Collateral, shall be added to the
Collateral, or for the making of (or offering to make) pro rata principal
payments on the Parity Debt, the Private Placement Debt (including any
premium which may be due thereon in connection with any such prepayment)
and the Obligations (to the extent prepayment is as a result of such Asset
Disposition as required by the terms hereof) and a certificate has been
received by the Agent attesting to the receipt of fair value for the
assets, as determined by the Board of Directors of the Managing General
Partner, and to the proper application of the proceeds, and

(c) 70% or more of the consideration received is in the form of cash
or marketable securities; PROVIDED HOWEVER, that the amount of (1) any
liabilities (as shown on the Borrower's or such Restricted Subsidiary's
most recent balance sheet or in the notes thereto) of the Borrower or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated in right of payment to the Obligations) that are assumed by
the transferee of any such assets and (2) any notes or other obligations
received by the Borrower or any such Restricted Subsidiary from such
transferee that are promptly converted into cash (to the extent of the cash
received), shall be deemed to be cash for the purposes of this clause (c)
and provided further that any sale of assets not in excess of $1,000,000
may be made for a cash consideration (subject to

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the same assumptions) not less than 25% of the consideration therefor.

Dispositions of Collateral made in accordance with this section shall be
made free and clear of the liens securing the Parity Debt.

Notwithstanding the foregoing, the Borrower and its Restricted Subsidiaries
may sell or dispose of (i) real property assets sold or disposed of within
12 months of the acquisition of such assets, and (ii) all other assets sold
or disposed of within 6 months of the acquisition of such assets, in each
case constituting a portion of an acquired business, if (y) such assets are
specifically designated to the Agent in writing at the time of acquisition
or within 30 business days thereafter as assets designated to be disposed
of, and (z) a certificate of the Managing General Partner has been received
by the Collateral Agent attesting to the receipt of fair value for the
assets. Such sales under this paragraph will NOT be applied towards the
annual or cumulative limitations in the preceding paragraph.

Notwithstanding the foregoing, the Borrower may at any time exchange assets
for other like assets in a line of business in which the partnership or its
Restricted Subsidiaries are engaged provided the fair market values of the
assets included in such exchange are substantially equivalent and the total
book value of assets exchanged in (i) any such transaction shall not exceed
7.5% of then consolidated total assets of the Borrower, (ii) all such
transactions in any one year shall not exceed 15% of then consolidated
total assets of the Borrower or (iii) all such transactions after the date
of the Agreement shall not exceed 30% of then consolidated total assets of
the Borrower. With respect to the exchange of assets in any one
transaction in excess of $10,000,000, a fairness opinion satisfactory to
the Required Lenders shall be obtained.

SECTION 8.2.9 MODIFICATION OF CERTAIN AGREEMENTS. The Borrower will not
consent to any amendment, supplement or other modification of any of the terms
or provisions contained in, or applicable to, any document or instrument
evidencing or applicable to any the Private Placement Debt, other than any
amendment,

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supplement or other modification which extends the date, reduces the amount of
any required repayment or redemption or is immaterial and does not have a
material adverse effect upon the rights or interest of the Lenders.

SECTION 8.2.10 TRANSACTIONS WITH AFFILIATES. Except for the transactions
or conduct effected pursuant to the Operative Agreements as in effect on the
Closing Date or any other transactions or conduct described in or contemplated
by the Registration Statement or listed in ITEM 8.2.10 ("TRANSACTIONS WITH
AFFILIATES"), the Borrower will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, engage in any transaction with any
Affiliate, including, without limitation, the purchase, sale or exchange of
assets or the rendering of any service, to the Borrower's or such Restricted
Subsidiary's business except upon fair and reasonable terms that are no less
favorable to the Borrower or such Restricted Subsidiary, as the case may be,
than those which might be obtained in an arm's-length transaction at the time
such transaction is agreed upon from Persons which are not such an Affiliate,
provided that the foregoing limitations and restrictions shall not apply to any
transaction between the Borrower and any Restricted Subsidiary or between
Restricted Subsidiaries, or to loans and advances to officers and employees made
in the ordinary course of business up to $2,500,000 at any time outstanding.

SECTION 8.2.11 NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC. The
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement, any other Loan Document and any
agreement governing any Indebtedness permitted either by CLAUSE (b) of
SECTION 8.2.2 as in effect on the Effective Date or by CLAUSES (d) or (f) of
SECTION 8.2.2 as to the assets financed with the proceeds of such Indebtedness)
prohibiting the creation or assumption of any Lien upon its properties, revenues
or assets, whether now owned or hereafter acquired, or the ability of the
Borrower or any other Obligor to amend or otherwise modify this Agreement or any
other Loan Document.

SECTION 8.2.12 LIMITATION ON ISSUANCE OF SUBSIDIARY STOCK. Except as
otherwise permitted herein, the Borrower shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, issue, contingently or otherwise, any
shares of such Subsidiary's

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Capital Stock, warrants, rights or options to purchase or acquire shares of such
Subsidiary's Capital Stock except to the Borrower or any of its Subsidiaries.

SECTION 8.2.13 OPERATING LEASES. The Borrower will not enter into, or
permit any Restricted Subsidiaries to enter into operating leases requiring
aggregate payments in excess of $15,000,000 in any Fiscal Year.

SECTION 8.2.14 RESTRICTED SUBSIDIARIES. The Borrower may designate any
Restricted Subsidiary or newly acquired or formed subsidiary as an Unrestricted
Subsidiary or any Unrestricted Subsidiary or newly acquired or formed subsidiary
as a Restricted Subsidiary, in each case subject to satisfaction of the
following conditions:

(i) immediately before and after giving effect to such
designation, no Default or Event of Default shall exist and be
continuing;

(ii) the Borrower would have been in compliance as at the end of
the last Fiscal Quarter as if such designation had taken place as at
the commencement of the four Fiscal Quarter period ending at such
Fiscal Quarter end;

(iii) the designation of Unrestricted Subsidiaries after the date
of the Agreement shall not exceed at any time 5% of the Borrower's
consolidated assets;

(iv) after giving effect to such designation, (y) the Borrower
would be permitted to incur at least $1 of additional Indebtedness in
accordance with the provisions of clause (h) of SECTION 8.2.2. other
than in the case of a designation of an Unrestricted Subsidiary that
does not have any Indebtedness as a Restricted Subsidiary, and (z) the
Borrower and its Restricted Subsidiaries would not be liable with
respect to any Indebtedness or guarantee, would not own any
Investments and their property would not be subject to any Lien not
permitted by the terms of SECTION 8.2.2, SECTION 8.2.3 and
SECTION 8.2.5,

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(v) in the case of a designation as an Unrestricted Subsidiary,
(x) if such designation (and all other prior designations of
Restricted Subsidiaries or newly acquired or formed Subsidiaries as
Unrestricted Subsidiaries during the then current Fiscal Year) were
deemed to constitute a sale by the Borrower of all the assets (other
than cash in the case of newly acquired or newly formed businesses) of
the Subsidiary so designated, such sale would be in compliance with
section (a) of SECTION 8.2.8 and (y) if such designation (and all
other prior designations of Restricted Subsidiaries or newly acquired
or formed Subsidiaries as Unrestricted Subsidiaries during the current
fiscal year) were deemed to constitute an Investment by the Borrower
in respect of all the assets of the Borrower so designated, such
Investment would be in compliance with section (h) of SECTION 8.2.5 in
each case with the net proceeds of such sale or the amount of such
Investment being deemed to equal the net book value of such assets in
the case of a Restricted Subsidiary or the cost of acquisition or
formation in the case of a newly acquired or formed Subsidiary,
PROVIDED, that this subdivision (v) shall not apply to an acquisition
or formation by the Borrower or a Restricted Subsidiary of a newly
acquired or formed Unrestricted Subsidiary to the extent such
acquisition or formation (1) is funded solely by the net cash proceeds
received by the Borrower from either General Partner or the Public
Partnership as a capital contribution or as consideration for the
issuance by the Borrower of additional partnership interests or (2)
the assets involved in such acquisition are acquired in exchange for
additional partnership interests of the Borrower or the Public
Partnership;

(vi) in the case of a designation of a Restricted Subsidiary as
an Unrestricted Subsidiary, such Restricted Subsidiary shall not have
been an Unrestricted Subsidiary prior to being designated a Restricted
Subsidiary;

(vii) the Borrower shall deliver to each Lender, within 20
Business Days after any such designation, an Officer's Certificate
stating the effective date of such

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designation and stating that the foregoing conditions have been
satisfied. Such certificate shall be accompanied by a schedule
setting forth in reasonable detail the calculations demonstrating
compliance with such conditions, where appropriate; and

(viii) in the case of the designation of any Unrestricted
Subsidiary as a Restricted Subsidiary, such new Restricted Subsidiary
shall be deemed to have (a) made or acquired all Investments owned by
it and (b) incurred all Indebtedness owing by it and all Liens to
which it or any of its properties are subject, on the date of such
designation.

SECTION 8.2.15 ORGANIC DOCUMENTS. The Borrower will not, and will not
permit any Subsidiary, to alter any Organic Document of such entity in any
manner which would have a material adverse effect on the condition (financial or
otherwise), operations, assets, business, or properties of the Borrower and its
Subsidiaries taken as a whole.

ARTICLE IX

EVENTS OF DEFAULT

SECTION 9.1 LISTING OF EVENTS OF DEFAULT. Each of the following events
or occurrences described in this SECTION 9.1 shall constitute an "EVENT OF
DEFAULT".

SECTION 9.1.1 NON-PAYMENT OF OBLIGATIONS. The Borrower shall default in
the payment or prepayment when due of any principal of any Loan, or the Borrower
shall default (and such default shall continue unremedied for a period of five
Business Days) in the payment when due of any interest, fee or other Obligation.

SECTION 9.1.2 BREACH OF WARRANTY. Any material representation or warranty
of the Borrower or any other Obligor made or deemed to be made hereunder or in
any other Loan Document executed by it or any other writing or certificate
furnished by or on behalf of the Borrower or any other Obligor to the Agent or
any Lender for the purposes of or in connection with this Agreement or

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any such other Loan Document (including any certificates delivered pursuant
to ARTICLE VI) is or shall be incorrect when made in any material respect.

SECTION 9.1.3 NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. Any
Obligor shall default in the due performance and observance of any Obligation or
agreement contained herein or in any other Loan Document, and such default shall
continue unremedied for a period of 30 days after actual knowledge thereof by a
Responsible Officer.

SECTION 9.1.4 DEFAULT ON OTHER INDEBTEDNESS. The Borrower or any
Restricted Subsidiary shall default (after notice and the expiration of any
applicable grace period) in the payment of any amount of principal, premium or
interest on any Indebtedness (other than the Notes), or any event shall occur or
condition shall exist in respect of any Indebtedness of the Borrower or any of
its Restricted Subsidiaries (other than the Notes) and the effect of such event
or condition is to cause (or permit the holders of such Indebtedness to cause)
such Indebtedness to become due before its stated maturity, in each case, if the
outstanding principal balance of such Indebtedness is in excess of $10,000,000
in the aggregate.

SECTION 9.1.5 JUDGMENTS. Any judgment or order for the payment of money
in excess of $10,000,000, net of insurance coverage, shall be rendered against
the Borrower or any Restricted Subsidiary and

(i) such judgment or order is non appealable, has not been
stayed pending appeal, or all rights to appeal such judgment have
expired or been exhausted; and

(ii) such judgment or order shall remain undischarged for a
period of sixty consecutive days after the date due.

SECTION 9.1.6 PENSION PLANS. Any of the following events shall occur with
respect to any Pension Plan

(a) the institution of any steps by the Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination,

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the Borrower or any such member could be required to make a contribution
to such Pension Plan, or could reasonably expect to incur a liability or
obligation to such Pension Plan, in excess of $500,000; or

(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA.

SECTION 9.1.7 CHANGE IN CONTROL. Any Change in Control shall occur.

SECTION 9.1.8 BANKRUPTCY, INSOLVENCY, ETC. Any of the following events
shall occur:

(a) filing by or on the behalf of the Borrower or the Managing
General Partner of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any other
relief under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar act
or law, state or federal, now or hereafter existing ("Bankruptcy Law"), or
any action by the Borrower or the Managing General Partner for, or consent
or acquiescence to, the appointment of a receiver, trustee or other
custodian of the Borrower or the Managing General Partner, or of all or a
substantial part of its property; or the making by the Borrower or the
Managing General Partner of any assignment for the benefit of creditors; or
the admission by the Borrower or the Managing General Partner in writing of
its inability to pay its debts as they become due; or

(b) filing of any involuntary petition against the Borrower or the
Managing General Partner in bankruptcy or seeking reorganization,
arrangement, readjustment or its debts or for any other relief under any
Bankruptcy Law and an order for relief by a court having jurisdiction in
the premises shall have been issued or entered therein; or any other
similar relief shall be granted under any applicable Federal or state law;
or a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee or other
officer

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having similar powers over the Borrower or the Managing General
Partner or over all or a part of its property shall have been entered; or
the involuntary appointment of an interim receiver, trustee or other
custodian of the Borrower or the Managing General Partner or of all or a
substantial part of its property; or the issuance of a warrant of
attachment, execution or similar process against any substantial part of
the property of the Borrower or the Managing General Partner and
continuance of any such event for 60 consecutive days unless dismissed,
bonded to the satisfaction of the court having jurisdiction in the premises
or discharged; or

(c) filing by or on the behalf of any Restricted Subsidiary of a
voluntary petition or an answer seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any Bankruptcy Law,
or any action by any Restricted Subsidiary for, or consent or acquiescence
to, the appointment of a receiver, trustee or other custodian of such
Restricted Subsidiary or of all or a substantial part of its property; or
the making by any Restricted Subsidiary of any assignment for the benefit
of creditors; or the admission by any Restricted Subsidiary in writing of
its inability to pay its debts as they become due; or

(d) filing of any involuntary petition against any Restricted
Subsidiary in bankruptcy or seeking reorganization, arrangement,
readjustment or its debts or for any other relief under any Bankruptcy Law
and an order for relief by a court having jurisdiction in the premises
shall have been issued or entered therein; or any other similar relief
shall be granted under any applicable Federal of state law; or a decree or
order of a court having jurisdiction in the premises for the appointment of
a receiver, liquidator, sequestrator, trustee or other officer having
similar powers over any Restricted Subsidiary or over all or a part of its
property shall have been entered; or the involuntary appointment of an
interim receiver, trustee or other custodian of any Restricted Subsidiary
or of all or a substantial part of its property; or the issuance of a
warrant of attachment, execution or similar process against any substantial
part of the property of any Restricted Subsidiary; and continuance of any
such event for

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60 consecutive days unless dismissed, bonded to the satisfaction of the
court having jurisdiction in the premises or discharged; or

(e) taking any action authorizing, or in furtherance of, any of the
foregoing by the Borrower, the Managing General Partner or any Restricted
Subsidiary.

SECTION 9.1.9 IMPAIRMENT OF SECURITY, ETC. Any of the Security Documents
or documents guarantying the Notes shall cease in any material respect to be in
full force and effect or shall be declared to be null and void in whole or in a
material part by the final judgment (which is non-appealable or has not been
stayed pending appeal or as to which all rights to appeal have expired or have
been exhausted) of a court or other governmental or regulatory authority having
jurisdiction or the validity or enforceability thereof shall be contested by or
on behalf of the Borrower or any Restricted Subsidiary or the Borrower or any
Restricted Subsidiary shall renounce any of the same or deny that it has any or
further liability thereunder.

SECTION 9.1.10 SPLIT-UP. Any order, judgment or decree is entered in any
proceeding against the Borrower decreeing a split-up of the Borrower which
requires the divestiture of assets representing a substantial part, or the
divestiture of the stock of a Restricted Subsidiary whose assets represent a
substantial part, of the consolidated assets of the Borrower and its
Subsidiaries (determined in accordance with GAAP) or which requires the
divestiture of assets, or stock of a Restricted Subsidiary, which shall have
contributed a substantial part of the consolidated Net Income of the Borrower
and its Restricted Subsidiaries for any of the three fiscal years then most
recently ended, and such order, judgment or decree shall not be dismissed or
execution thereon stayed pending appeal or review within 60 days after entry
thereof, or in the event of such a stay, such order, judgment or decree or
decree shall not be dismissed within 60 days after such stay expires;

SECTION 9.1.11 PARTNERS. Any change to any Organic Document of any
Partner which would have a material adverse effect on the condition (financial
or otherwise), operations, assets, business, properties or prospects of the
Borrower and Subsidiaries.

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SECTION 9.2 ACTION IF BANKRUPTCY. If any Event of Default described in
CLAUSES (a) (b) or with respect to the Borrower and Managing General Partner,
(e) of SECTION 9.1.8) shall occur, the Commitments (if not theretofore
terminated) shall automatically terminate and the outstanding principal amount
of all outstanding Loans and all other Obligations shall automatically be and
become immediately due and payable, without notice or demand.

SECTION 9.3 ACTION IF OTHER EVENT OF DEFAULT.

(a) If any Event of Default (other than any Event of Default
described in CLAUSES (a) (b) or with respect to the Borrower and Managing
General Partner, (e) of SECTION 9.1.8) shall occur for any reason, whether
voluntary or involuntary, and be continuing, the Agent, upon the direction
of the Required Lenders, shall by notice to the Borrower declare all or any
portion of the outstanding principal amount of the Loans and other
Obligations to be due and payable and/or the Commitments (if not
theretofore terminated) to be terminated, whereupon the full unpaid amount
of such Loans and other Obligations which shall be so declared due and
payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the Commitments
shall terminate.

(b) The right of the Lenders to make any declaration or acceleration
by virtue of an Event of Default described in SECTION 9.1.1.-9.1.11
(excluding, however, proceedings under SECTION 9.1.8. relating directly to
the Borrower), however is subject to the condition that if, at, any time
before such declaration, such Event of Default is cured by or for the
account of the Borrower, then in every such case any such default and its
consequences shall be deemed to be annulled, but no such annulment shall
extend to or affect any subsequent default or impair or exhaust any right
or power consequent thereon.

(c) The affirmative vote of Lenders holding at least 66-2/3% of the
outstanding principal amount of the Obligations may rescind or annul the
acceleration at any time, provided that any Event of Default has been
cured.

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ARTICLE X

THE AGENT

SECTION 10.1 APPOINTMENT AND AUTHORIZATION. (a) Each Lender hereby
irrevocably (subject to SECTION 10.9) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.

(b) The Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith until such
time and except for so long as the Agent may agree at the request of the
Required Lenders to act for such Issuer with respect thereto; PROVIDED, HOWEVER,
that the Issuer shall have all of the benefits and immunities (i) provided to
the Agent in this ARTICLE X with respect to any acts taken or omissions suffered
by the Issuing Lender in connection with Letters of Credit issued by it or
proposed to be issued by it and the application and agreements for letters of
credit pertaining to the Letters of Credit as fully as if the term "Agent", as
used in this ARTICLE X, included the Issuer with respect to such acts or
omissions, and (ii) as additionally provided in this Agreement with respect to
the Issuer.

SECTION 10.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.

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SECTION 10.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by the Borrower or any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
for the value or title to any Collateral or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower or any of the Borrower's
Subsidiaries or Affiliates.

SECTION 10.4 RELIANCE BY AGENT. (a) The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Lenders and such request and any

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action taken or failure to act pursuant thereto shall be binding upon all of
the Lenders.

(b) For purposes of determining compliance with the conditions
specified in SECTION 6.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Lender.

SECTION 10.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders in
accordance with ARTICLE IX; PROVIDED, HOWEVER, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Lenders.

SECTION 10.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents
to the Agent that it has, independently and without reliance upon any Agent-
Related Person and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this

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Agreement and to extend credit to the Borrower and its Subsidiaries
hereunder. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Agent, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Borrower which may come into the possession of any of
the Agent-Related Persons.

SECTION 10.7 INDEMNIFICATION OF AGENT. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities; PROVIDED, HOWEVER,
that no Lender shall be liable for the payment to the Agent-Related Persons of
any portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including attorney costs) incurred by the Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.

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SECTION 10.8 AGENT IN INDIVIDUAL CAPACITY. BofA and each other Lender
that may become the Agent and their respective Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with the Borrower and its Subsidiaries
and Affiliates as though BofA (or such other Lender) were not the Agent or the
Issuing Lender hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that, pursuant to such activities, BofA (or such other
Lender) or their respective Affiliates may receive information regarding the
Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA (or other Lender) shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent or the Issuing Lender.

SECTION 10.9 SUCCESSOR AGENT. The Agent may, and at the request of the
Required Lenders shall, resign as Agent upon 30 days' notice to the Lenders. If
the Agent resigns under this Agreement, the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Lenders and the Borrower, a successor
agent from among the Lenders. Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers and duties as Agent
shall be terminated. After any retiring Agent's resignation hereunder as Agent,
the provisions of this ARTICLE X and SECTIONS 11.4 and 11.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent
by the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided
for above. Notwithstanding the foregoing, however, BofA

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may not be removed as the Agent at the request of the Required Lenders unless
BofA shall also simultaneously be replaced as "Issuing Lender" hereunder
pursuant to documentation in form and substance reasonably satisfactory to
BofA.

SECTION 10.10 WITHHOLDING TAX. (a) If any Lender is a "foreign
corporation, partnership or trust" within the meaning of the Code and such
Lender claims exemption from, or a reduction of, U.S. withholding tax under
Sections 1441 or 1442 of the Code, such Lender agrees with and in favor of the
Agent and the Borrower, to deliver to the Agent (with a copy to the Borrower):

(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS
Forms 1001 and W-8 before the payment of any interest in the first calendar
year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;

(ii) if such Lender claims that interest paid under this Agreement is
exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Lender, two
properly completed and executed copies of IRS Form 4224 before the payment
of any interest is due in the first taxable year of such Lender and in each
succeeding taxable year of such Lender during which interest may be paid
under this Agreement, and IRS Form W-9; and

(iii) such other form or forms as may be required under the Code or
other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.

Such Lender agrees to promptly notify the Agent and the Borrower of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.

(b) If any Lender claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Borrower to such Lender, such Lender agrees to

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notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Borrower to such Lender. To the
extent of such percentage amount, the Agent will treat such Lender's IRS Form
1001 as no longer valid.

(c) If any Lender claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Borrower to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.

(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by SUBSECTION (A)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.

(e) If the IRS or any other Government Authority of the United States
or other jurisdiction asserts a claim that the Agent did not properly withhold
tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, together with all costs and expenses
(including attorney costs). The obligation of the Lenders under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Agent.

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SECTION 10.11 COLLATERAL MATTERS.

(a) The Agent is authorized on behalf of all the Lenders, without the
necessity of any notice to or further consent from the Lenders, from time to
time to take any action with respect to any Collateral or the Security Documents
which may be necessary to perfect and maintain perfected the security interest
in and Liens upon the Collateral granted pursuant to the Security Documents.

(b) The Lenders irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment in full of all
Loans and all other Obligations known to the Agent and payable under this
Agreement or any other Loan Document; (ii) constituting property sold or to be
sold or disposed of as part of or in connection with any disposition permitted
hereunder; (iii) constituting property in which the Borrower or any Subsidiary
owned no interest at the time the Lien was granted or at any time thereafter;
(iv) constituting property leased to the Borrower or any Subsidiary under a
lease which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
the Borrower or such Subsidiary to be, renewed or extended; (v) consisting of an
instrument evidencing Indebtedness or other debt instrument, if the indebtedness
evidenced thereby has been paid in full; or (vi) if approved, authorized or
ratified in writing by the Required Lenders or all the Lenders, as the case may
be, as provided in SECTION 11.1. Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this SECTION 10.11(b).

(c) Each Lender agrees with and in favor of each other (which agreement
shall not be for the benefit of the Borrower or any Subsidiary) that the
Borrower's obligation to such Lender under this Agreement and the other Loan
Documents is not and shall not be secured by any real property collateral now or
hereafter acquired by such Lender.

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ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.1 WAIVERS, AMENDMENTS, ETC. The provisions of this Agreement
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrower and the Required Lenders; PROVIDED, HOWEVER, that no such
amendment, modification or waiver which would:

(a) modify any requirement hereunder that any particular action be
taken by all the Lenders or by the Required Lenders shall be effective
unless consented to by each Lender;

(b) modify this SECTION 11.1, change the definition of "REQUIRED
LENDERS", increase any Commitment Amount or the Percentage of any Lender,
reduce any fees described in ARTICLE III, release any substantial portion
of collateral security, except as otherwise specifically provided in any
Loan Document, extend the Loan Commitment Termination Date or state
Maturity Dates or change the interest provisions contained in SECTION 3.2
shall be made without the consent of each Lender and each holder of a Note;

(c) extend the due date for, or reduce the amount of, any scheduled
repayment or prepayment of principal of or interest on any Loan (or reduce
the principal amount of or rate of interest on any Loan) shall be made
without the consent of the holder of that Note evidencing such Loan; or

(d) affect adversely the interests, rights or obligations of the
Agent shall be made without consent of the Agent.

No failure or delay on the part of the Agent, any Lender or the holder of any
Note in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Borrower in any case shall entitle it to any notice or demand

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in similar or other circumstances. No waiver or approval by the Agent, any
Lender or the holder of any Note under this Agreement or any other Loan
Document shall, except as may be otherwise stated in such waiver or approval,
be applicable to subsequent transactions. No waiver or approval hereunder
shall require any similar or dissimilar waiver or approval thereafter to be
granted hereunder.

SECTION 11.2 NOTICES. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by Telex or by facsimile and addressed, delivered or transmitted to
such party at its address, Telex or facsimile number set forth below its
signature hereto or set forth in the Lender Assignment Agreement or at such
other address, Telex or facsimile number as may be designated by such party in a
notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted by Telex or
facsimile, shall be deemed given when transmitted (answerback confirmed in the
case of Telexes).

SECTION 11.3 PAYMENT OF COSTS AND EXPENSES. The Borrower agrees to pay
on demand reasonable all expenses of the Agent (including the reasonable fees
and out-of-pocket expenses of counsel to the Agent and of local counsel, if any,
who may be retained by counsel to the Agent) in connection with

(a) the negotiation, preparation, execution, delivery and syndication
of this Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from time
to time hereafter be required, whether or not the transactions contemplated
hereby are consummated,

(b) the filing, recording, refiling or rerecording of the Security
Agreement and/or any Uniform Commercial Code financing statements relating
thereto and all amendments, supplements and modifications to any thereof
and any and all other documents or instruments of further assurance
required to be filed or recorded or refiled or rerecorded by the terms
hereof or of the Security Agreement, and

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(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.

The Borrower further agrees to pay, and to save the Agent and the Lenders
harmless from all liability for, any stamp or other taxes which may be payable
in connection with the execution or delivery of this Agreement, the borrowings
hereunder, or the issuance of the Notes or any other Loan Documents. The
Borrower also agrees to reimburse the Agent and each Lender upon demand for all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
legal expenses) incurred by the Agent or such Lender in connection with (x) the
negotiation of any restructuring or "work-out", whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.

SECTION 11.4 INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds the Agent and each Lender
and each of their respective officers, directors, employees and agents
(collectively, the "INDEMNIFIED PARTIES") free and harmless from and against any
and all actions, causes of action, suits, losses, costs, liabilities and
damages, and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including reasonable attorneys' fees and disbursements
(collectively, the "INDEMNIFIED LIABILITIES"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to

(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan or the use of any
Letter of Credit;

(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties;

(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any Subsidiaries of
all or any portion of the stock or assets

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of any Person, whether or not the Agent or such Lender is party thereto;

(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any
Subsidiary of any Hazardous Material; or

(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Borrower or
such Subsidiary,

except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.

SECTION 11.5 SURVIVAL. The obligations of the Borrower under
SECTIONS 5.3, 5.4, 5.5, 5.6, 11.3 and 11.4, and the obligations of the Lenders
under SECTION 10.1, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Commitments. The representations and warranties made by each Obligor in this
Agreement and in each other Loan Document shall survive the execution and
delivery of this Agreement and each such other Loan Document.

SECTION 11.6 SEVERABILITY. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of

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this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.

SECTION 11.7 HEADINGS. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.

SECTION 11.8 EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This
Agreement may be executed by the parties hereto in several counterparts, all of
which shall constitute together but one and the same agreement. This Agreement
shall become effective when counterparts hereof executed on behalf of the
Borrower, the Agent and each Lender (or notice thereof satisfactory to the
Agent) shall have been received by the Agent and notice thereof shall have been
given by the Agent to the Borrower and each Lender.

SECTION 11.9 GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES
AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. This Agreement, the
Notes, the Security Agreement and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersede any prior agreements, written or oral, with respect thereto.

SECTION 11.10 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that:

(a) the Borrower may not assign or transfer its rights or obligations
hereunder without the prior written consent of the Agent and all Lenders;
and

(b) the rights of sale, assignment and transfer of the Lenders are
subject to SECTION 11.11.

SECTION 11.11 SALE AND TRANSFER OF LOANS AND NOTES; PARTICIPATIONS IN
LOANS AND NOTES. Each Lender may assign, or sell

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participations in, its Loans and Commitments to one or more other Persons in
accordance with this SECTION 11.11.

SECTION 11.11.1 ASSIGNMENTS. Any Lender,

(a) with the written consents of the Borrower and the Agent (which
consents shall not be unreasonably delayed or withheld and which consent,
in the case of the Borrower, shall be deemed to have been given in the
absence of a written notice delivered by the Borrower to the Agent, on or
before the fifth Business Day after receipt by the Borrower of such
Lender's request for consent, stating, in reasonable detail, the reasons
why the Borrower propose to withhold such consent) may at any time assign
and delegate to one or more commercial banks or other financial
institutions; PROVIDED that such consent of the Borrower shall not be
required at any time a Default has occurred and is continuing, and

(b) with notice to the Borrower and the Agent, but without the
consent of the Borrower or the Agent, may assign and delegate to any of its
Affiliates or to any other Lender

(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "ASSIGNEE LENDER"), all or any fraction of such Lender's total Loans and
Commitments (which assignment and delegation shall be of a constant, and not a
varying, percentage of all the assigning Lender's Loans and Commitments) in a
minimum aggregate amount of $5,000,000; PROVIDED, HOWEVER, that any such
Assignee Lender will comply, if applicable, with the provisions contained in the
penultimate sentence of SECTION 5.6 and SECTION 10.10 and FURTHER, PROVIDED,
HOWEVER, that the Borrower, each other Obligor and the Agent shall be entitled
to continue to deal solely and directly with such Lender in connection with the
interests so assigned and delegated to an Assignee Lender until

(c) written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect to
such Assignee Lender, shall have been given to the Borrower and the Agent
by such Lender and such Assignee Lender,

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(d) such Assignee Lender shall have executed and delivered to the
Borrower and the Agent a Lender Assignment Agreement, accepted by the
Agent, and

(e) the processing fees described below shall have been paid.

From and after the date that the Agent accepts such Lender Assignment Agreement,
(x) the Assignee Lender thereunder shall be deemed automatically to have become
a party hereto and to the extent that rights and obligations hereunder have been
assigned and delegated to such Assignee Lender in connection with such Lender
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (y) the assignor Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan Documents.
Such assignor Lender or such Assignee Lender must also pay a processing fee to
the Agent upon delivery of any Lender Assignment Agreement in the amount of
$2,500. Any attempted assignment and delegation not made in accordance with
this SECTION 11.11.1 shall be null and void.

SECTION 11.11.2 PARTICIPATIONS. Any Lender may at any time sell to one
or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "PARTICIPANT") participating interests (or a
subparticipating interest, in the case of a Lender's participating interest in a
Letter of Credit) in any of the Loans, Commitments, or other interests of such
Lender hereunder; PROVIDED, HOWEVER, that

(a) no participation contemplated in this SECTION 11.11 shall relieve
such Lender from its Commitments or its other obligations hereunder or
under any other Loan Document,

(b) such Lender shall remain solely responsible for the performance
of its Commitments and such other obligations,

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connection with such Lender's rights and obligations under this Agreement
and each of the other Loan Documents,

(d) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, take any actions of
the type described in CLAUSE (b) or (c) of SECTION 11.1, and

(e) the Borrower shall not be required to pay any amount under
SECTIONS 5.3, 5.4, 5.5 OR 5.6 that is greater than the amount which it
would have been required to pay had no participating interest been sold.

The Borrower acknowledges and agrees that each subject to the preceding sentence
Participant, for purposes of SECTIONS 5.3, 5.4, 5.5, 5.6, 5.8, 5.9, 11.3
and 11.4, shall be considered a Lender.

SECTION 11.12 OTHER TRANSACTIONS. Nothing contained herein shall preclude
the Agent or any other Lender from engaging in any transaction, in addition to
those contemplated by this Agreement or any other Loan document, with the
Borrower or any of the Borrower's Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other person.

SECTION 11.13 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF
ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY

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SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
ILLINOIS. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

SECTION 11.14 WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER. THE BORROWER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN
DOCUMENT.

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

CORNERSTONE PROPANE, L.P.

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

Address:
---------------------------------------

Facsimile No.:
---------------------------------

Attention:
-------------------------------------

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BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent

By:
--------------------------------------------
Title: Vice President

Address: 231 South LaSalle Street
Chicago, Illinois 60697

Facsimile No.:
---------------------------------

Attention:
-------------------------------------

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BANK OF AMERICA ILLINOIS, as lender

By:
--------------------------------------------
Title: Vice President

Address: 231 South LaSalle Street
Chicago, Illinois 60697

Facsimile No.:
---------------------------------

Attention:
-------------------------------------

<PAGE>

Draft -- December 5, 1996

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

FORM OF

CORNERSTONE PROPANE GP, INC.,
SYN INC.
AND
CORNERSTONE PROPANE, L.P.

$220,000,000
7.53% Senior Secured Notes due December __, 2010

(Private Placement Number: ___________)

_________________________

NOTE AGREEMENT
_________________________

Dated as of December __, 1996

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

<PAGE>

TABLE OF CONTENTS

Section Page

1. AUTHORIZATION OF NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. SALE AND PURCHASE OF NOTES. . . . . . . . . . . . . . . . . . . . . . . . 1

3. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

4. CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.1. Representations and Warranties. . . . . . . . . . . . . . . . . 3
4.2. Performance; No Default . . . . . . . . . . . . . . . . . . . . 3
4.3. Compliance Certificates . . . . . . . . . . . . . . . . . . . . 3
4.4. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . 4
4.5. Legal Investment. . . . . . . . . . . . . . . . . . . . . . . . 4
4.6. Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . 5
4.7. Security Documents. . . . . . . . . . . . . . . . . . . . . . . 5
4.8. Conveyance; Recordation; Taxes, etc.. . . . . . . . . . . . . . 5
4.9. Operative Agreements. . . . . . . . . . . . . . . . . . . . . . 6
4.10. Sale and Issuance of Other Notes. . . . . . . . . . . . . . . . 6
4.11. Sale of Units . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.12. Proceedings and Documents . . . . . . . . . . . . . . . . . . . 7
4.13. Rating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.14. Insurance Broker's Certificate. . . . . . . . . . . . . . . . . 7
4.15. Payment of Closing Fees . . . . . . . . . . . . . . . . . . . . 7
4.16. Private Placement Number. . . . . . . . . . . . . . . . . . . . 7
4.17. Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . 7

5. REPRESENTATIONS AND WARRANTIES, ETC. OF THE GENERAL PARTNERS AND THE
COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.1. Organization, Standing, etc.. . . . . . . . . . . . . . . . . . 8
5.2. Partnership Interests . . . . . . . . . . . . . . . . . . . . . 9
5.3. Qualification . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.4. Business; Financial Statements. . . . . . . . . . . . . . . . . 9

<PAGE>

5.5. Changes, etc. . . . . . . . . . . . . . . . . . . . . . . . . .11
5.6. Tax Returns and Payments. . . . . . . . . . . . . . . . . . . .12
5.7. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . .12
5.8. Transfer of Assets and Business . . . . . . . . . . . . . . . .12
5.9. Litigation, etc.. . . . . . . . . . . . . . . . . . . . . . . .14
5.10. Compliance with Other Instruments, etc. . . . . . . . . . . . .14
5.11. Governmental Consent. . . . . . . . . . . . . . . . . . . . . .15
5.12. Offer of Notes. . . . . . . . . . . . . . . . . . . . . . . . .15
5.13. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . .15
5.14. Federal Reserve Regulations . . . . . . . . . . . . . . . . . .16
5.15. Investment Company Act. . . . . . . . . . . . . . . . . . . . .16
5.16. Public Utility Holding Company Act; Federal Power Act . . . . .16
5.17. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
5.18. Environmental Matters . . . . . . . . . . . . . . . . . . . . .18
5.19. Foreign Assets Control Regulations, etc.. . . . . . . . . . . .20
5.20. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . .20
5.21. Chief Executive Office. . . . . . . . . . . . . . . . . . . . .21
5.22. Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . .21

6. PURCHASER'S REPRESENTATIONS; SOURCE OF FUNDS. . . . . . . . . . . . . . .21

7. ACCOUNTING; FINANCIAL STATEMENTS AND OTHER
INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

8. INSPECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

9. PREPAYMENT OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . .32
9.1. Required Prepayments of the Notes . . . . . . . . . . . . . . .32
9.2. Optional Prepayments of the Notes with Make Whole Amount. . . .33
9.3. Prepayment on Change of Control . . . . . . . . . . . . . . . .33
9.4. Contingent Prepayments on Disposition of Property, Taking
or Destruction. . . . . . . . . . . . . . . . . . . . . . . . .34
9.5. Notice of Prepayments; Officers' Certificate. . . . . . . . . .35
9.6. Allocation of Partial Prepayments . . . . . . . . . . . . . . .35
9.7. Maturity; Surrender, etc. . . . . . . . . . . . . . . . . . . .36
9.8. Acquisition of Notes. . . . . . . . . . . . . . . . . . . . . .36

<PAGE>

10. BUSINESS AND FINANCIAL COVENANTS OF THE COMPANY . . . . . . . . . . . . .37
10.1. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . .37
10.2. Liens, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . .44
10.3. Investments, Guaranties, etc. . . . . . . . . . . . . . . . . . .48
10.4. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . .51
10.5. Transactions with Affiliates. . . . . . . . . . . . . . . . . . .51
10.6. Subsidiary Stock and Indebtedness . . . . . . . . . . . . . . . .52
10.7. Consolidation, Merger, Sale of Assets, etc. . . . . . . . . . . .53
10.8. Partnership or Corporate Existence, etc.; Business. . . . . . . .58
10.9. Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . .59
10.10. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . .59
10.11. Maintenance of Properties; Insurance. . . . . . . . . . . . . . .60
10.12. Operative Agreements; Security Documents. . . . . . . . . . . . .61
10.13. Chief Executive Office. . . . . . . . . . . . . . . . . . . . . .62
10.14. Recordation; Opinions . . . . . . . . . . . . . . . . . . . . . .62
10.15. Information Required by Rule 144A . . . . . . . . . . . . . . . .63
10.16. Covenant to Secure Notes Equally. . . . . . . . . . . . . . . . .63
10.17. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . .63
10.18. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . .64
10.19. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . .64
10.20. Damage, Destruction, Taking, etc. . . . . . . . . . . . . . . . .66
10.21. Accounting Changes. . . . . . . . . . . . . . . . . . . . . . . .66
10.22. Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . .67
10.23. Impairment of Security Interests. . . . . . . . . . . . . . . . .67
10.24. Limitation on Restrictions on Subsidiary Dividends, etc.. . . . .67
10.25. No Other Negative Pledges . . . . . . . . . . . . . . . . . . . .68
10.26. Sales of Receivables. . . . . . . . . . . . . . . . . . . . . . .68
10.27. Fixed Price Supply Contracts; Certain Policies. . . . . . . . . .68
10.28. Independent Corporate Existence . . . . . . . . . . . . . . . . .69
10.29. Other Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . .70
10.30. Restriction on General Partner. . . . . . . . . . . . . . . . . .71
10.31. Recordation of Conveyance Documents . . . . . . . . . . . . . . .71

11. EVENTS OF DEFAULT; ACCELERATION . . . . . . . . . . . . . . . . . . . . .72

iii

<PAGE>

12. REMEDIES ON DEFAULT; RECOURSE, ETC. . . . . . . . . . . . . . . . . . . .77

13. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77

14. REGISTRATION, TRANSFER AND SUBSTITUTION OF NOTES. . . . . . . . . . . . 101
14.1. Note Register; Ownership of Notes . . . . . . . . . . . . . . . 101
14.2. Transfer and Exchange of Notes. . . . . . . . . . . . . . . . . 101
14.3. Replacement of Notes. . . . . . . . . . . . . . . . . . . . . . 102
14.4. Notes Held by Company, etc., Deemed Not Outstanding . . . . . . 102

15. PAYMENTS ON NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
15.1. Place of Payment. . . . . . . . . . . . . . . . . . . . . . . . 102
15.2. Home Office Payment . . . . . . . . . . . . . . . . . . . . . . 103

16. EXPENSES, INDEMNIFICATION, ETC. . . . . . . . . . . . . . . . . . . . . 103

17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . 107

18. AMENDMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . 107

19. NOTICES, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

20. REPRODUCTION OF DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . 108

21. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

22. SUBMISSION TO JURISDICTION. . . . . . . . . . . . . . . . . . . . . . . 109

23. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . . 110

24. GOVERNING LAW.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

25. CONFIDENTIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 110

<PAGE>

Schedule A -- Schedule of Purchasers

Schedule 5.2 -- Subsidiaries and Investments

Schedule 5.3 -- Jurisdiction of Qualification

Schedule 5.4(c) -- Certain Changes

Schedule 5.7 -- Indebtedness

Schedule 5.8(a) -- List of Assets

[Schedule 5.8(b) -- ]

Schedule 5.8(b)(i) -- List of Required Consents

Schedule 5.9 -- Litigation

Schedule 5.18 -- Environmental Notices

Schedule 10.2 -- Liens

Exhibit A -- Form of Note

Exhibit B1 -- Form of Opinion of Company Counsel

Exhibit B2 -- Form of Opinion of Local Counsel for the Company

Exhibit B3 -- Form of Opinion of Trustee's Counsel

Exhibit B4 -- Form of Opinion of Debevoise & Plimpton

Exhibit C -- Form of Trust Agreement

Exhibit D -- Form of Subordination Provisions

Exhibit E -- Form of Cash Collateral Agreement

<PAGE>

Exhibit F -- Form of Company Security Agreement

Exhibit G -- Form of General Partner's Guarantee Agreement

Exhibit H -- Form of Intercompany Note

Exhibit I -- Form of Agency Account Agreement

Exhibit J -- Form of Partnership Agreement

Exhibit K -- Form of Partnership Note

Exhibit L -- Form of Partners Security Agreement

Exhibit M -- Form of Perfection Certificate

Exhibit N -- Restricted Subsidiaries

Exhibit O -- Form of Subsidiary Guarantee Agreement

Exhibit P -- Form of Supplemental Agreement

<PAGE>

CORNERSTONE PROPANE GP, INC.

CORNERSTONE PROPANE, L.P.

SYN INC.

7.53% Senior Secured Notes due December __, 2010

Dated as of December __, 1996

TO EACH OF THE PURCHASERS LISTED
IN THE ATTACHED SCHEDULE A

Dear Purchaser:

Cornerstone Propane GP, Inc., a California corporation ("Cornerstone
Propane GP,") SYN Inc., a Delaware corporation (the "Special General Partner"),
and together with Cornerstone Propane GP, each a "General Partner" and together,
the "General Partners," and Cornerstone Propane, L.P., a Delaware limited
partnership (the "Company"), having been formed to acquire and to operate the
Assets, hereby agree with you as follows:

SECTION 1. AUTHORIZATION OF NOTES.

The Company will authorize the issue and sale of $220,000,000
aggregate principal amount of its 7.53% Senior Secured Notes due December __,
2010 (the "Notes", such term to include any Notes issued in substitution
therefor or replacement thereof pursuant to Section 14). The Notes shall be
substantially in the form of Exhibit A, with such changes therefrom, if any, as
may be approved by you and the Company. Certain capitalized terms used in this
Note Agreement (the "Agreement") are defined in Section 13; references to a
"Section" or a "Schedule" or an "Exhibit" are, unless otherwise specified, to a
Section of this Agreement or to a Schedule or an Exhibit attached to this
Agreement.

SECTION 2. SALE AND PURCHASE OF NOTES.

Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you and you will purchase from the Company, at the
Closing provided for

<PAGE>

in Section 3, Notes in the principal amount specified opposite your name in
Schedule A for purchase by you at the Closing, at the purchase price of 100% of
the principal amount thereof. At the Closing provided for in Section 3, the
General Partners and Empire Energy SC Corporation, a Delaware corporation, will
convey all of their assets to the Company pursuant to the Conveyance Agreements
in exchange for general and limited partner interests in the Company and the
assumption by the Company of substantially all the liabilities of the General
Partners.

Contemporaneously with entering into this Agreement, the General
Partners and the Company are entering into identical Note Agreements (the "Other
Agreements") with each of the other purchasers named in Schedule A (the "Other
Purchasers"), providing for the sale to each of the Other Purchasers, at the
Closing, of Notes in the principal amount specified opposite its name in
Schedule A. The sale of Notes to you and the Other Purchasers are to be
separate sales, and this Agreement and the Other Agreements constitute separate
agreements.

SECTION 3. CLOSING.

The sales of the Notes to you and the Other Purchasers shall take
place at the offices of ________________________________, at 10:00 a.m., New
York City time, at a closing (the "Closing") on December __, 1996, or such later
date as may be agreed upon by Cornerstone Propane GP, the Company, you and the
Other Purchasers. At the Closing, the Company will deliver to you Notes in the
principal amount to be purchased by you, in the form of a single Note (or such
greater number of Notes as you may request, provided that each such Note shall
be in a denomination of at least $500,000), each dated the date of the Closing
and registered in your name (or in the name of your nominee as indicated in
Schedule A), against payment of the purchase price therefor on the date of
Closing by transfer of immediately available funds to the Company, or as
otherwise directed by the Company in writing (at least two days prior to the
date of the Closing). If at the Closing the Company shall fail to tender such
Notes to you as provided above in this Section 3 or if any of the conditions
specified in Section 4 shall not have been fulfilled to your satisfaction, you
shall, at your election, be relieved of all further obligations under this
Agreement, without thereby waiving any other rights you may have by reason of
such failure or such nonfulfillment. If the Closing shall not have occurred on
or prior to December 31, 1996, you will promptly thereafter instruct the Trustee
to release its lien on, and its security interest in, all of the Collateral.

<PAGE>

SECTION 4. CONDITIONS TO CLOSING.

Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:

4.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company and its Affiliates contained in this Agreement, the
other Operative Agreements, and those otherwise made in writing by or on behalf
of the Company or any Affiliate of the Company in connection with the
transactions contemplated by this Agreement, shall be true and correct when made
and at the time of the Closing, except as affected by the consummation of such
transactions and except for any representation and warranty that is expressly
stated to relate to a specific date, in which case such representation and
warranty shall be true and correct as of such earlier date.

4.2. PERFORMANCE; NO DEFAULT. Each of the Company and its
Affiliates shall have performed and complied with all agreements and conditions
contained in this Agreement or any other Operative Agreement required to be
performed or complied with by it prior to or at the Closing, and at the time of
the Closing no Event of Default or Potential Event of Default under this
Agreement or default by any party under any other Operative Agreement shall have
occurred and be continuing.

4.3. COMPLIANCE CERTIFICATES. You shall have received Officers'
Certificates of the Company, Northwestern, each General Partner and the Public
Partnership, each dated the date of the Closing and satisfactory in substance
and form to you, certifying that the conditions specified in Sections 4.1 and
4.2 have been fulfilled in all material respects insofar as the relevant
representation or warranty is made by, or the relevant agreement or condition is
required to be performed or complied with by, or the relevant Event of Default,
Potential Event of Default or default has been caused by or relates to, each of
such entities and, with respect to the Officers' Certificate of the Company, its
Subsidiaries, and, in the case of the Officers' Certificate of Cornerstone
Propane GP and the Company, certifying that no material adverse change has
occurred in the financial condition of the Business subsequent to the date of
the financial statements delivered pursuant to Section 5.4(c) and, in the case
of the Officers' Certificate of Northwestern, certifying that neither the
Memorandum (as of the date thereof) nor the Registration Statement contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the

<PAGE>

statements contained therein, in light of the circumstances under which they
were made, not misleading.

4.4. OPINIONS OF COUNSEL. You shall have received favorable
opinions from (a) __________________, special counsel for the Company and its
Affiliates, substantially in the form of Exhibit B1, (b) (i) Balch & Bingham,
special Alabama counsel for the Company and its Affiliates, (ii) Rose Law Firm,
special Arkansas counsel for the Company and its Affiliates, (iii) McCutchen,
Doyle, Brown & Enerson, L.L.P., special California counsel for the Company and
its Affiliates, (iv) Cobb, Cole & Bell, special Florida counsel for the Company
and its Affiliates, (v) Greenebaum, Dole & McDonald, special Kentucky counsel
for the Company and its Affiliates, (vi) Mitchell, McNutt, Threadgill, Smith &
Sams, special Mississippi counsel for the Company and its Affiliates,
(vii) Thompson Coburn, special Missouri counsel for the Company and its
Affiliates, (viii) Winthrop, Stimson, Putnam & Roberts, special New York counsel
for the Company and its Affiliates, and (ix) Bass, Berry & Sims, special
Tennessee counsel for the Company and its Affiliates, each substantially in the
form of Exhibit B2, (c) __________________, counsel for the Trustee,
substantially in the form of Exhibit B3 and (d) Debevoise & Plimpton, your
special counsel in connection with the transactions contemplated by this
Agreement, substantially in the form of Exhibit B4, and in each case covering
such other matters incident to such transactions as you may reasonably request,
each addressed to you, dated the date of the Closing and otherwise reasonably
satisfactory in substance and form to you. You shall have received copies of
each of the opinions delivered pursuant to the Underwriting Agreement (other
than the opinion of counsel to the underwriters), accompanied by letters, dated
the date of the Closing and addressed to you, from the counsel rendering such
opinions, stating that you are entitled to rely on such opinions as if they were
addressed to you. The Company and the General Partners hereby direct each of
their counsel referred to in clauses (a) and (b) of this Section 4.4, and each
of its counsel who deliver opinions pursuant to the Underwriting Agreement, to
deliver to you such opinions and letters to be delivered by it and authorize you
to rely thereon.

4.5. LEGAL INVESTMENT. On the date of the Closing your purchase
of Notes shall be permitted by the laws and regulations of each jurisdiction to
which your investments are subject, but without recourse to provisions (such as
section 1404(b) or 1405(a)(8) of the New York Insurance Law) permitting limited
investments by insurance companies in securities not otherwise legally eligible
for investment. If requested by you by prior written request to the Company or
the General Partners, you

<PAGE>

shall have received, at least five Business Days prior to the Closing, an
Officers' Certificate of the Company or the General Partners, as the case may
be, certifying as to such matters of fact as you may reasonably specify to
enable you to determine whether such purchase is so permitted.

4.6. TRUST AGREEMENT. The Company, [the General Partners], the
Qualifying Restricted Subsidiaries, if any, and the Trustee shall have duly
authorized, executed and delivered the Trust Agreement. The Trust Agreement
shall be in full force and effect and shall constitute the valid, binding and
enforceable obligation of the Company, [the General Partners], the Qualifying
Restricted Subsidiaries, if any, and the Trustee, except that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors, and no default on the part of
the Company, [the General Partners], or the Qualifying Restricted Subsidiaries
shall exist thereunder.

4.7. SECURITY DOCUMENTS. Each of the Security Documents shall
have been duly authorized, executed and delivered by each of the Company and/or
its Affiliates party thereto, shall be in full force and effect and shall (i)
constitute the valid, binding and enforceable obligation of each such party,
except that such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws of general application
relating to or affecting the rights and remedies of creditors and by general
equitable principles, regardless of whether such enforceability is considered in
a proceeding in equity or at law, and (ii) to the extent duly recorded pursuant
to Section 4.8, constitute a valid assignment of, and create a valid, presently
effective security interest of record in, property covered by such Security
Document and all other interests described therein, subject to no prior security
interest in any such property other than as specifically permitted therein, and
no default on the part of any such party shall exist thereunder.

4.8. CONVEYANCE; RECORDATION; TAXES, ETC. Prior to the Closing,
the Conveyance Agreements referred to in clause (b) of the definition of such
term and the Company Security Agreement, or proper notices, statements or other
instruments in respect thereof, covering all of the Assets covered by such
Conveyance Agreements and the Security Documents, shall have been duly
delivered, and all other actions deemed necessary by your special counsel shall
have been duly performed or taken, in such manner and in such places as is
required by applicable law (a) to convey to the

<PAGE>

Company ownership of the Assets referred to in Section 5.8(c)(ii) purported to
be conveyed by such Conveyance Agreements and (B) to establish, perfect,
preserve and protect the rights and first priority Liens purported to be granted
by each such Security Document to the Trustee with respect to the Assets
referred to in Section 5.8(c)(ii) for the benefit of the holders of the Notes
and their respective successors and assigns and all taxes, fees and other
charges then due in connection with the execution, delivery, recording,
publishing, registration and to the extent filed prior, to filing of such
documents or instruments shall have been paid in full.

4.9. OPERATIVE AGREEMENTS. Each of the Operative Agreements to
be executed on or before the Closing Date shall have been duly authorized,
executed and delivered by the respective parties thereto, in form and substance
satisfactory to you, shall be in full force and effect, and shall constitute the
legal, valid and binding obligations of the respective parties thereto, except
that such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors and by general equitable
principles, regardless of whether such enforceability is considered in a
proceeding in equity or law, and all actions required to be performed or taken
thereunder on or prior to the date of the Closing shall have been duly taken and
no default or accrued right of termination on the part of any of the parties
thereto shall exist thereunder as of the date of the Closing, and you and the
Trustee shall have received a fully executed original, or a true and complete
copy, of each such document.

4.10. SALE AND ISSUANCE OF OTHER NOTES. Contemporaneously with
the Closing, the Company shall sell to the Other Purchasers the Notes to be
purchased by them at the Closing under the Other Agreements as specified in
Schedule A.

4.11. SALE OF UNITS. At the time of the Closing, (a) the
Underwriting Agreement shall be in full force and effect, (b) all conditions to
closing contained in the Underwriting Agreement shall have been fulfilled or, in
a manner acceptable to you, waived, (c) your special counsel shall have received
a copy of each agreement, document, opinion (as specified in Section 4.4) and
certificate delivered in connection with the closing under the Underwriting
Agreement, and (d) substantially simultaneously with the receipt of the proceeds
of the sale of the Notes to you and the Other Purchasers at the Closing and in
the order contemplated by the Registration Statement, (i) the Public Partnership
shall sell to the Underwriters the Units provided to be sold under the
Underwriting Agreement for an aggregate gross purchase price of not less

<PAGE>

than $170,800,000, (ii) [the General Partner shall transfer approximately its
_______% limited partner interest in the Company to the Public Partnership in
exchange for a ____% subordinated general partner interest in the Public
Partnership and the Company on a combined basis (____%, if the Overallotment
Option is exercised in full) and a __% unsubordinated general partner interest
in the Public Partnership], and (iii) all transactions contemplated by the
Registration Statement and the Memorandum to be completed by the General
Partners, the Company and their Affiliates prior to or substantially
simultaneously with the issuance of the Notes shall have been completed
substantially as contemplated therein and in a manner acceptable to you.

4.12. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory to you and your
special counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.

4.13. RATING. Prior to the Closing, the Notes shall have received
a rating of at least BBB from Fitch Investors Service, Inc., which rating
remains in effect as of the Closing.

4.14. INSURANCE BROKER'S CERTIFICATE. Insurance complying with
the provisions of Section 10.11 hereof shall be in full force and effect and
you, the Other Purchasers and the Trustee shall have received a certificate from
Andreini Parker Insurance Brokers or such other independent insurance brokers or
consultants as shall be reasonably satisfactory to you, dated the date of the
Closing.

4.15. PAYMENT OF CLOSING FEES. The Company shall have paid the
fees and disbursements required by Section 16 to be paid by the Company on the
date of the Closing.

4.16. PRIVATE PLACEMENT NUMBER. The Company shall have obtained
for the Notes a Private Placement Number issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners).

4.17. OTHER AGREEMENTS. The Company shall have delivered to you a
true and complete copy the Registration Statement.

<PAGE>

SECTION 5. REPRESENTATIONS AND WARRANTIES, ETC. OF THE GENERAL PARTNERS AND
THE COMPANY.

Each of the General Partners and the Company represents and warrants
that:

5.1. ORGANIZATION, STANDING, ETC. (a) The Company is a limited
partnership duly organized, validly existing and in good standing under the
Delaware Revised Uniform Limited Partnership Act and has all requisite
partnership power and authority to own and operate its properties (including,
without limitation, the Assets), to conduct its business as described in the
Registration Statement after giving effect to the transfer of the Assets, to
enter into this Agreement and the other Operative Agreements to which it is a
party, to issue and deliver the Notes and to carry out the terms of this
Agreement, such other Operative Agreements and the Notes.

(b) Each General Partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of California (in the
case of Cornerstone Propane GP) or the State of Delaware (in the case of the
Special General Partner) and has all requisite corporate power and authority to
own and operate its properties, to conduct its business as described in the
Registration Statement, to enter into and carry out the terms of this Agreement
and the other Operative Agreements to which it is a party, and [in the case of
Cornerstone Propane GP,] to execute and deliver as Managing General Partner of
the Company this Agreement, the Notes and the other Operative Agreements to
which the Company is a party.

(c) The Restricted Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own and operate its
properties, to conduct its business as described in the Registration Statement
after giving effect to the transfer of the Assets.

(d) The Public Partnership is a limited partnership duly organized,
validly existing and in good standing under the Delaware Revised Uniform Limited
Partnership Act and has all requisite partnership power and authority to own and
operate its properties, to conduct its business as described in the Registration
Statement, and to execute, deliver and carry out the terms of the Operative
Agreements to which it is a party.

<PAGE>

5.2. PARTNERSHIP INTERESTS. The only general partners of the
Company are the General Partners, which upon the consummation of the Closing
will own an aggregate [______]% general partner interest in the Company. Upon
the consummation of the Closing the only limited partner of the Company will be
the Public Partnership, which will own a [_______]% limited partner interest in
the Company acquired as provided in the Registration Statement. The Company
will not have any other partners upon the consummation of the Closing. Except
for Cornerstone Services, Inc., a Delaware corporation, the Company does not
have, and immediately after giving effect to the transactions contemplated by
the Conveyance Agreements will not have, any Subsidiaries or any Investments in
any Person (other than Investments of the types described in Section 10.3(a)).

5.3. QUALIFICATION. The Company is duly qualified or registered
and is in good standing as a foreign limited partnership for the transaction of
business, and each General Partner and the Restricted Subsidiary is qualified or
registered and is in good standing as a foreign corporation for the transaction
of business, in the jurisdictions set forth in Schedule 5.3 which are the only
jurisdictions in which, after giving effect to the conveyance to the Company of
the Assets, the nature of their respective activities or the character of the
properties they own, lease or use makes such qualification or registration
necessary and in which the failure so to qualify or to be so registered would
have a Material Adverse Effect. Each of the General Partners, Northwestern, the
Restricted Subsidiaries and the Company has taken all necessary partnership or
corporate action to authorize the execution, delivery and performance by it of
this Agreement, the Notes, as the case may be, and each other Operative
Agreement to which it is a party. Each of the General Partners, the Restricted
Subsidiaries and the Company has duly executed and delivered each of this
Agreement, the Notes and the other Operative Agreements to which it is a party,
and each of them constitutes its legal, valid, binding and enforceable
obligation in accordance with its terms, except that such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws of general application relating to or affecting the rights and
remedies of creditors and by general equitable principles, regardless of whether
such enforceability is considered in a proceeding in equity or at law.

5.4. BUSINESS; FINANCIAL STATEMENTS. (a) The Company has not
engaged in any business or activities prior to the date of this Agreement,
except for activities related to its formation, organization and prospective
operations, and will not have any

<PAGE>

significant assets or liabilities prior to its acquisition of the Assets and
assumption of liabilities, as contemplated by this Agreement and the
Registration Statement.

(b) The Company has delivered to you complete and correct copies of
(i) the Registration Statement, and (ii) the memorandum prepared by Morgan
Stanley & Co. Incorporated and Dean Witter Reynolds, Inc. for use in connection
with the Company's private placement of the Notes (the "Memorandum"). The
[unaudited] PRO FORMA consolidated financial statements of the Public
Partnership set forth in the Registration Statement comply in all respects with
the applicable accounting requirements of the Securities Act of 1933, as
amended, and the published rules and regulations thereunder and, in the opinion
of the Managing General Partner, the assumptions on which the pro forma
adjustments to such pro forma consolidated financial statements of the Public
Partnership are based provide a reasonable basis for presenting the significant
effects of the transactions contemplated by such pro forma consolidated
financial statements and such pro forma adjustments give appropriate effect to
such assumptions and are properly applied in such pro forma consolidated
financial statements. The financial statements and schedules included in the
Registration Statement (other than with respect to pro forma matters) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods specified and present fairly the financial position of the corporation
to which they relate as of the respective dates specified and the results of
their operations and cash flows for the respective periods specified. Since
________, 199_, there has been no material adverse change in the business,
financial condition, or results of operations of [Northwestern], the General
Partners and their consolidated subsidiaries taken as a whole. [The financial
data included under the caption "Selected Historical and Pro Forma Consolidated
Financial and Operating Data" for Cornerstone Propane GP and for the Public
Partnership in the Registration Statement present fairly, on the basis stated in
the Registration Statement, the information set forth therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement. The historical aspects of the financial
data included under the caption "Capitalization" in the Registration Statement
present fairly, on the basis stated in the Registration Statement, the
information set forth therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration Statement;
the pro forma aspects of such financial data included under the caption
"Capitalization" have been prepared in all material respects in accordance with
all applicable rules and guidelines of the Securities and Exchange Commission
with respect to pro forma financial information; and the assumptions on which
the pro forma adjustments to the pro forma

<PAGE>

aspects of the financial data included under the caption "Capitalization" are
based provide a reasonable basis for presenting all of the significant effects
of the transactions contemplated by such pro forma financial data and such pro
forma adjustments give appropriate effect to such assumptions and are properly
applied in such pro forma financial data.]

(c) The unaudited pro forma balance sheets of Cornerstone Propane GP
as of ________ __, 1996 present fairly the financial condition of Cornerstone
Propane GP as of that date. Except as disclosed on Schedule 5.4(c), since
September 30, 1996, there has been no change or event which could reasonably be
expected to have a Material Adverse Effect. The financial data for Cornerstone
Propane GP in the Memorandum present fairly, on the basis stated in the
Memorandum, the information set forth therein and have been compiled based on
the audited financial statements included in the Registration Statement.
Schedule 5.4(c) specifies information in the Registration Statement that
modifies and updates information previously contained in the Memorandum.
Modifications of a non-material nature are not reflected in Schedule 5.4(c).
Except as otherwise provided on SCHEDULE 5.4(c), the financial data identified
as historical included in the Memorandum present fairly, on the basis stated in
the Memorandum, the information set forth therein and have been compiled on a
basis consistent with that of the audited financial statements included in the
Registration Statement; the pro forma financial data included in the Memorandum
represent, in all material respects and on the basis stated in the Memorandum,
Cornerstone Propane GP's best estimate at such time with respect to pro forma
financial information; and the assumptions on which the pro forma adjustments to
the pro forma aspects of the financial data included in the Memorandum are based
provide a reasonable basis for presenting all of the significant effects of the
transactions contemplated by such pro forma financial data and such pro forma
adjustments give appropriate effect to such assumptions and are properly applied
in such pro forma financial data.

5.5. CHANGES, ETC. Except as contemplated by this Agreement, the
other Operative Agreements, the Registration Statement or the Memorandum,
subsequent to the respective dates as of which information is given in the
Registration Statement or the Memorandum, the Company and its Affiliates have
not incurred any material liabilities or obligations, direct or contingent, or
entered into any material transaction not in the ordinary course of business, no
events have occurred, which individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, and there has not been (a) any
Restricted Payment of any kind declared, paid or made by

<PAGE>

the Company or either General Partner (other than those referred to in Section
5.13) or (b) any incurrence of Indebtedness under the Bank Credit Facilities.

5.6. TAX RETURNS AND PAYMENTS. On the Closing Date and after
giving effect to the transactions then to be consummated under the Operative
Agreements, each of the Company and its Affiliates has filed all federal, state
and other tax returns required by law to be filed by it or has properly filed
for an extension of time for the filing thereof and has paid all, taxes,
assessments and other governmental charges levied upon it or any of its
properties, assets, income or franchises which are due and payable, except those
(a) which are not past due or are presently being contested in good faith by
appropriate proceedings diligently conducted for which such reserves or other
appropriate provisions, if any, as shall be required by GAAP have been made.
The Company is a limited partnership that is treated as a pass-through entity
for federal income tax purposes, or (b) for which the failure to file or extend
would not reasonably be expected to have a Material Adverse Effect.

5.7. INDEBTEDNESS. At the time of the Closing, other than the
Indebtedness represented by the Notes and the Indebtedness listed in Schedule
5.7, none of Company, either General Partner or the Restricted Subsidiary will
have any secured or unsecured Indebtedness outstanding. At the time of the
Closing, no instrument or agreement to which the Company or, other than [Section
7.6(a) of the MLP Agreement] either General Partner is a party or by which the
Company or either General Partner is bound or which is applicable to the Company
or either General Partner (other than this Agreement and the Bank Credit
Facilities) contains any restrictions on the incurrence by the Company or either
General Partner of additional Indebtedness.

5.8. TRANSFER OF ASSETS AND BUSINESS. (a) The Company and the
Restricted Subsidiary, will at the Closing, after giving effect to the transfer
of the Assets on or prior to the date of the Closing as described in the
Registration Statement, be in possession of and operating in compliance in all
respects with all franchises, grants, authorizations, approvals, licenses,
permits, easements, rights-of-way, consents, certificates and orders required to
own, lease or use its properties (including, without limitation, to own, lease
or use the Assets and to assume certain liabilities relating to the Assets as
described in the Registration Statement and the Operative Agreements) and
(considering all such Permits (as below defined) in the possession of, and being
complied with by, the Company and the Restricted Subsidiary taken together) to
permit the conduct of the Business as now conducted and proposed to be conducted

<PAGE>

("Permits"). Permits (collectively, "Permitted Exceptions") (i) which are not
required at such time and are routine or administrative in nature and are
expected in the reasonable judgment of Cornerstone Propane GP to be obtained or
given in the ordinary course of business after the date of the Closing, or
(ii) which, if not obtained or given, would not, individually or in the
aggregate, have a Material Adverse Effect.

(b) Except as set forth in Schedule 5.8(b), the General Partners
have, and upon the consummation of the Closing the Company will have, (i) title
to the portion of the Assets constituting real property owned in fee simple,
(ii) good and valid leasehold interests in the portion of the Assets
constituting real property and leased, pursuant to which the Company shall enjoy
undisturbed possession thereof, except for defects in, or lack of recorded title
and exceptions to, leasehold interests as would not, in the aggregate, be
reasonably expected to have a Material Adverse Effect, and (iii) sufficient
title to the portion of the Assets constituting personal property reasonably
necessary for the use and operation of such personal property as it has been
used in the past and as it is proposed to be used in the Business in each case
subject to no Liens except Permitted Encumbrances and Liens that will be
discharged prior to the Closing. The Assets are all of the assets and
properties reasonably necessary to enable the Company to conduct the Business
and include all options to purchase or rights of first refusal granted to or for
the General Partners with respect to any of the Assets leased by either General
Partner. Subject to exceptions as would not, individually or in the aggregate,
be reasonably expected to have a Material Adverse Effect, the General Partners
enjoy, and, upon execution and delivery of the Operative Agreements and the
consummation of the Conveyance Agreements, the Company will enjoy, peaceful and
undisturbed possession under all leases necessary for the operation of the
Business, other than certain immaterial leased property of which the Company
shall enjoy undisturbed possession, and all such leases are valid and subsisting
and are in full force and effect. Except to perfect and to protect security
interests permitted by Section 10.2, (x) at the time of the Closing, no
effective financing statement under the Uniform Commercial Code which names the
Company, Northwestern, any Restricted Subsidiary or either General Partner as
debtor, which individually or in the aggregate relates to any part of the Assets
or other assets pledged pursuant to any Security Document, will be on file in
any jurisdiction and (y) at the time of the Closing, none of the Company,
Northwestern, any Restricted Subsidiary or either General Partner will have
signed any effective financing statement or any effective security agreement,
which relates to any part of the Assets or other assets pledged pursuant to any
Security Document, authorizing any secured party thereunder to file any such
financing state-

<PAGE>

ment, except for financing statements to be executed and filed in connection
with the Closing.

(c) Upon the consummation of the Closing, (i) the General Partners
will have transferred to the Company (except in the case of motor vehicles
covered by certificates of title where the certificates of title will have been
duly executed in favor of the Company, and such certificates of title will have
been delivered to the Company, but will not have yet been submitted to the
appropriate governmental agency for re-issuance) ownership of properties,
easements and licenses comprising the Assets, (ii) the Conveyance Agreements
referred to in clause (b) of the definition of such term (except in the case of
motor vehicles covered by certificates of title) will have been duly delivered
as required by Section 4.8 with respect to the Assets covered by the Company
Security Agreement, and (iii) the Company Security Agreement or proper notices,
statements or other instruments in respect thereof, will have been duly
recorded, published, registered and filed as required by Section 4.8 with
respect to Assets.

5.9. LITIGATION, ETC. Except as set forth on Schedule 5.9, there
is no action, proceeding or investigation pending or, to the knowledge of the
Company and the General Partners upon reasonable inquiry, threatened (or any
basis therefor known to the Company or either General Partner) which questions
the validity of this Agreement, any other Operative Agreement or the Notes or
any action taken or to be taken pursuant to this Agreement, any other Operative
Agreement or the Notes, or which could reasonably be expected to have, either in
any case or in the aggregate, a Material Adverse Effect.

5.10. COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the
Company, the Restricted Subsidiary nor either General Partner (i) is in
violation of any term of the Partnership Agreement or, in the case of the
Restricted Subsidiary and the General Partners, of their respective articles or
certificates of incorporation or by-laws, or (ii) is in violation of any term of
any other agreement or instrument to which the Company, the Restricted
Subsidiary or either General Partner is a party or by which any of them or any
of their properties is bound or any term of any applicable law, ordinance, rule
or regulation of any governmental authority or any term of any applicable order,
judgment or decree of any court, arbitrator or governmental authority, in the
case of clause (ii), the consequences of which would have a Material Adverse
Effect; the execution, delivery and performance by each of the General Partners
and the Company

<PAGE>

of this Agreement and the other Operative Agreements to which it is a party and
the Notes, as the case may be, will not result in any violation of or be in
conflict with or constitute a default under any such term or result in the
creation of (or impose any obligation on the Company, the Restricted Subsidiary
or either General Partner to create) any Lien upon any of the properties or
assets of the Company or either General Partner prohibited by any such term,
except for Permitted Encumbrances and for any such term relating to Indebtedness
to be repaid in full at the time of the Closing; and there is no such term the
compliance with which would have, or in the future may in the reasonable
judgment of either General Partner or the Company be likely to have, a Material
Adverse Effect.

5.11. GOVERNMENTAL CONSENT. No consent, approval or authorization
of, or declaration or filing with, any governmental authority (which has not
been obtained) is required for the valid execution, delivery and performance of
this Agreement or the other Operative Agreements (other than Permitted
Exceptions), and no such consent, approval, authorization, declaration or filing
is required for the valid offer, issue, sale and delivery of the Notes pursuant
to this Agreement and the Other Agreements.

5.12. OFFER OF NOTES. Neither the Company nor any of its
Affiliates nor anyone acting on its or their behalf has directly or indirectly
offered the Notes or any part thereof or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, anyone other than you, the Other Purchasers
and not more than 85 other institutional investors. Neither the General
Partners nor the Company nor anyone authorized to act on their behalf has taken
or will take any action which would subject the issuance and sale of the Notes
to the registration and prospectus delivery provisions of the Securities Act of
1933, as amended, or to the registration or qualification provisions of any
securities or Blue Sky law of any applicable jurisdiction or require
qualification of any Security Document under the Trust Indenture Act of 1939, as
amended; PROVIDED, HOWEVER, that it is understood that any action taken by you
or any Other Purchaser shall not have been taken on behalf of the Company or the
General Partners.

5.13. USE OF PROCEEDS. The proceeds of the sale of the Units by
the Public Partnership will be used by the Public Partnership and the Company as
contemplated by the Registration Statement. The proceeds of the sale of the
Notes to you and the Other Purchasers will be used to repay existing debt, to
make a distribution to the Special General Partner who will use $44,220,000 to
redeem a portion of its preferred

<PAGE>

stock and the remaining $15,000,000 will provide net worth for the Special
General Partners and for general partnership purposes and to pay fees and
expenses associated with the offering.

5.14. FEDERAL RESERVE REGULATIONS. Neither the General Partners
nor the Company will, directly or indirectly, use any of the proceeds of the
sale of the Notes for the purpose, whether immediate, incidental or ultimate, of
buying a "margin stock" or of maintaining, reducing or retiring any indebtedness
originally incurred to purchase a stock that is currently a "margin stock", or
for any other purpose which might constitute this transaction a "purpose
credit", in each case within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 C.F.R. 207, as amended), or
otherwise take or permit to be taken any action which would involve a violation
of such Regulation G or of Regulation X (12 C.F.R. 224, as amended) or any other
applicable regulation of such Board. No indebtedness being reduced or retired,
directly or indirectly, out of the proceeds of the sale of the Notes was
incurred for the purpose of purchasing or carrying any stock which is currently
a "margin stock", and neither General Partner nor the Company owns or has any
present intention of acquiring with the proceeds thereof any amount of such
"margin stock".

5.15. INVESTMENT COMPANY ACT. None of the General Partners or the
Company is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.

5.16. PUBLIC UTILITY HOLDING COMPANY ACT; FEDERAL POWER ACT. None
of the General Partners or the Company is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended; each of the General
Partners, the Company, and the issue and sale of the Notes by the Company is not
subject to regulation under such Act; and none of the General Partners or the
Company is a "public utility" as such term is defined in the Federal Power Act,
as amended.

5.17. ERISA. (a) None of the General Partners, the Company, any
Subsidiary of the Company or any Related Person of the General Partners or the
Company (other than Northwestern and any Subsidiaries of Northwestern (except
for the General Partners and any Subsidiary of the General Partners that is a
Related Person of the Company)) is obligated to contribute to, and none of the
General Partners, the

<PAGE>

Company or any Related Person of the Company has any liability or obligation
with respect to, any Plan that is subject to Section 302 or Title IV of ERISA or
Section 412 of the Code (other than a Multiemployer Plan). None of the Company,
any Subsidiary of the Company or any Related Person of the Company has any
liability or obligation to provide any amount or type of compensation or benefit
in respect of any employee or former employee of the Business which relates to
periods, services performed or benefits or amounts accrued prior to the transfer
of the Business or the Assets pursuant to the Operative Agreements and the
transactions contemplated thereby (other than pursuant to a Multiemployer Plan),
continuation coverage provided pursuant to Section 4980B of the Code or Section
601, et seq., of ERISA, or any liability or obligation for contributions
pursuant to a Plan not yet required to be paid. None of the General Partners,
the Company, any Subsidiary of the Company or any Related Person of the Company
has incurred any material liability under Title IV of ERISA with respect to any
such Plan and no event or condition exists or has occurred as a result of which
such a liability would reasonably be expected to be incurred. None of the
General Partners, the Company, any Subsidiary of the Company or any Related
Person of the Company has engaged in any transaction, including the transactions
contemplated hereunder which could subject the Company or any Related Person of
the Company to a material liability pursuant to Section 4069(a) or 4212(c) of
ERISA. There has been no reportable event (within the meaning of Section
4043(b) of ERISA other than one for which the applicable notice requirements
have been waived by PBGC regulation) or any other event or condition with
respect to any Plan which presents a risk of the termination of, or the
appointment of a trustee to administer, any such Plan (other than a
Multiemployer Plan) by the PBGC. No prohibited transaction (within the meaning
of Section 406(a) of ERISA or Section 4975 of the Code) exists or has occurred
with respect to any Plan which has subjected or could reasonably be expected to
subject either General Partner, the Company or any Subsidiary of the Company to
a material liability under Section 502(i) or 502(l) of ERISA or Section 4975 of
the Code. No material liability to the PBGC (other than liability for premiums
not yet due) has been or is expected to be incurred with regard to any Plan by
the General Partners, the Company, any Subsidiary of the Company or any Related
Person of the Company. None of the General Partners, the Company, any
Subsidiary of the Company or any Related Person of the Company contributes or is
obligated to contribute or has ever contributed or been obligated to contribute
to any single employer plan that has at least two contributing sponsors not
under common control [(other than the General Partners' 401(k) Plan)]. Timely
payment has been made of all amounts which the General Partners, the Company,
any Subsidiary of the Company or any Related Person of the

<PAGE>

Company is required under applicable law, the terms of each Plan or any
collective bargaining agreement to have paid as contributions to each such Plan
except to the extent that failure to do so would not have a Material Adverse
Effect. To the knowledge of the General Partners and the Company, no
Multiemployer Plan has been terminated or presents a material risk of
termination, is insolvent or is in reorganization within the meaning of Section
4241 or 4245 of ERISA and the transactions contemplated hereby will not result
in a withdrawal from any Multiemployer Plan that would have a Material Adverse
Effect. None of the General Partners, the Company or any Subsidiary of the
Company has any obligation to provide any material amount of post-employment
welfare benefits or coverage (other than continuation coverage provided pursuant
to Section 4980B of the Code or Section 601, et seq., of ERISA).

(b) The execution and delivery of this Agreement and the Other
Agreements and the issue and sale of the Notes, and delivery of the Notes
hereunder and thereunder will not involve any non-exempt "prohibited
transaction" within the meaning of Section 406 of ERISA or Section 4975 of the
Code. The representations by the Company and the General Partners in the
immediately preceding sentence are made in reliance upon and subject to the
accuracy of your representation in Section 6.2 of this Agreement and the
representations of the Other Purchasers in Section 6.2 of the Other Agreements
as to the source of the funds to be used to pay the purchase price of the Notes
to be purchased by you and the Other Purchasers, respectively. With respect to
each employee benefit plan identified to the Company in accordance with
clause (c) of Section 6.2 of this Agreement or of any of the Other Agreements,
none of the General Partners, the Company or any "affiliate" (as defined in
Section V(c) of the QPAM Exemption) of either General Partner or the Company has
at this time, and has not exercised at any time within the one year period
preceding the date of the Closing, the authority to appoint or terminate you or
any Other Purchaser as manager of any of the assets of any such plan or to
negotiate the terms of any management agreement with you or any Other Purchaser
on behalf of any such plan.

5.18. ENVIRONMENTAL MATTERS. (a) Except as disclosed in Schedule
5.18 each of the Company, each Restricted Subsidiary and either General Partner
is, and after giving effect to the transfer to the Company of the Assets will
be, in compliance with all Environmental Laws applicable to it or to the
Business or Assets except where such noncompliance would not have a Material
Adverse Effect. Each of the Company and the Restricted Subsidiary has timely
and properly applied for renewal of all environmental permits or licenses that
have expired or are about to expire and are necessary

<PAGE>

for the conduct of the Business as now conducted and as proposed to be
conducted, except where the failure to timely and properly reapply would not
have a Material Adverse Effect. Schedule 5.18 lists (i) all notices from
Federal, state or local environmental agencies to the Company, the Restricted
Subsidiary or the General Partners citing environmental violations that have not
been finally resolved and disposed of, and no such violation, whether or not
notice regarding such violation is listed on Schedule 5.18, if ultimately
resolved against the Company, the Restricted Subsidiary or either General
Partner, as the case may be, individually or in the aggregate, would have a
Material Adverse Effect, and (ii) all current reports filed by the Company, the
Restricted Subsidiary or either General Partner with any Federal, state or local
environmental agency having jurisdiction over the Assets, true and complete
copies of which reports have been made available to you, your special counsel
and your environmental advisor. Notwithstanding any such notice, the Company,
the Restricted Subsidiary and either General Partner are currently operating in
all material respects within the limits set forth in such environmental permits
or licenses and any current noncompliance with such permits or licenses will not
result in any material liability or penalty to the Company, the Restricted
Subsidiary or either General Partner or in the revocation, loss or termination
of any such environmental permits or licenses, the revocation, loss or
termination of which would have a Material Adverse Effect.

(b) Except as disclosed in Schedule 5.18, all facilities located on
the real property included in the Assets which are subject to regulation by RCRA
are and have been operated in compliance with RCRA, except where such
noncompliance would not have a Material Adverse Effect and none of the Company,
the Restricted Subsidiary or either General Partner has received, or, to the
knowledge of the Company and either General Partner been threatened with, a
notice of violation of RCRA regarding such facilities.

(c) Except as disclosed in Schedule 5.18, no hazardous substance (as
defined in CERCLA) or hazardous waste (as defined in RCRA) is located or present
at any of the real property included in the Assets in violation of any
Environmental Law, which violation will have a Material Adverse Effect, and with
respect to such real property there has not occurred (i) any release or
threatened release of any such hazardous substance, (ii) any discharge or
threatened discharge of any substance into ground, surface, or navigable waters
which violates any Federal, state, local or foreign laws, rules or regulations
concerning water pollution, or (iii) any assertion of any Lien pursuant to
Environmental Laws resulting from any use, spill, discharge or clean-up of any
haz-

<PAGE>

ardous or toxic substance or waste, which occurrence will have a Material
Adverse Effect.

5.19. FOREIGN ASSETS CONTROL REGULATIONS, ETC. The issue and sale
of the Notes by the Company and its use of the proceeds thereof as contemplated
by this Agreement, will not violate any of the regulations (other than those
regulations, if any, that are implicated solely as a result of the actions of
the purchasers of the Notes) administered by the Office of Foreign Assets
Control, the United States Department of the Treasury, including, without
limitation, the Foreign Assets Control Regulations, the Transaction Control
Regulations, the Cuban Assets Control Regulations, the Foreign Funds Control
Regulations, the Iranian Assets Control Regulations, the Iranian Transactions
Regulations, the Iraqi Sanctions Regulations, the Libyan Sanctions Regulations,
the Federal Republic of Yugoslavia (Serbia and Montenegro) and Bosnian Serb-
Controlled Areas of the Republic of Bosnia and Herzegovina Sanctions
Regulations, the Unita (Angola) Sanctions Regulations, the Terrorism Sanctions
Regulations, and the Soviet Gold Coin Regulations of the United States Treasury
Department (31 C.F.R., Subtitle B, Chapter V, as amended) or the restrictions
set forth in Executive Orders No. 8389, 9193, 12543 (Libya), 12544 (Libya),
12801 (Libya), 12722 (Iraq), 12724 (Iraq), 12775 (Haiti), 12779 (Haiti), 12808
(Yugoslavia), 12810 (Yugoslavia) or 12831 (Yugoslavia), as amended, of the
President of the United States of America or of any rules or regulations issued
thereunder.

5.20. DISCLOSURE. This Agreement, the other Operative Agreements,
the Memorandum, the Registration Statement, and each other historical financial
statement, document, certificate or instrument delivered to you by or on behalf
of the Company, the Restricted Subsidiary, or either General Partner or any of
their Affiliates (as amended, updated or revised by any subsequent delivery) in
connection with the transactions contemplated by this Agreement, taken together
do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading (other
than the statements made regarding general economic conditions relating to
national or local economies and except for projections made and delivered in
good faith and on the basis of reasonable assumptions). There is no fact
actually known to the Company or either General Partner which has or in the
future would (so far as the Company or either General Partner can now reasonably
foresee) have a Material Adverse Effect which has not been set forth or referred
to in this Agreement, the Memorandum or the Registration Statement or another
document,

<PAGE>

certificate or instrument delivered to you. You and the Other Purchasers shall
be entitled to rely on the statements and disclosures set forth in the
Registration Statement.

5.21. CHIEF EXECUTIVE OFFICE. The chief executive office of the
Company and the Managing General Partner and the office where each maintains its
records relating to the transactions contemplated by the Operative Agreements is
located at 432 Westridge Drive, Watsonville, California 95076.

5.22. SOLVENCY. Upon the sale of the Notes and the concurrent or
prior consummation of the transactions contemplated hereby, the Company and the
Restricted Subsidiary will be Solvent. "SOLVENT" means, with respect to any
Person, that (a) the sum of the assets of such Person, both at a fair valuation
and at present fair saleable value, will exceed the liabilities of such Person,
(b) such Person will have sufficient capital with which to conduct its business
as presently conducted and as proposed to be conducted and (c) such Person has
not incurred debts, and does not intend to incur debts, beyond its ability to
pay such debts as they mature. For purposes of the foregoing definition,
"DEBTS" means any liabilities or claims, and "CLAIM" means (i) a right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (ii) a right to an equitable remedy
for breach of performance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured. With respect to any contingent
liabilities, such liabilities shall be computed at the amount which, in light of
all the facts and circumstances existing at the time, represents the amount
which can reasonably be expected to become an actual or matured liability.

SECTION 6. PURCHASER'S REPRESENTATIONS; SOURCE OF FUNDS.

6.1. You represent that you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or for the
account of one or more pension or trust funds, in each case not with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act of 1933, as amended, or with any present intention of selling
any of the Notes in connection with any distribution, PROVIDED that the
disposition of your property shall at all times be within your control. If you
are purchasing for the account of one or more pension or trust funds (other than
pension or trust funds included in the general account of an

<PAGE>

insurance company), you represent that (except to the extent that you have
otherwise advised Debevoise & Plimpton and the Company in writing) you have sole
investment discretion with respect to the acquisition of the Notes to be issued
to you pursuant to this Agreement and the authority to make the representations
herein contained on behalf of such pension or trust funds [and on your own
behalf] and that the determination and decision on your behalf to purchase such
Notes for such pension or trust funds is being made by the same individual or
group of individuals who customarily pass on such investments.

6.2. You represent that at least one of the following statements
is an accurate representation as to the source of funds to be used by you to pay
the purchase price of the Notes purchased by you hereunder:

(a) if you are an insurance company, no part of such funds
constitutes assets allocated to any separate account maintained by you in
which an employee benefit plan (or its related trust) has any interest; or

(b) if you are an insurance company, to the extent that any of such
funds constitutes assets allocated to any separate account maintained by
you, (i) such separate account is a "pooled separate account" within the
meaning of Prohibited Transaction Class Exemption 90-1, in which case you
have disclosed to the Company the names of each employee benefit plan whose
assets in such separate account exceed 10% of the total assets or are
expected to exceed 10% of the total assets of such account as of the date
of such purchase (and for the purposes of this subdivision (b), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan), or (ii) such separate account
contains only the assets of a specific employee benefit plan, complete and
accurate information as to the identity of which you have delivered to the
Company in writing; or

(c) if you are a "qualified professional asset manager" or "QPAM" (as
defined in Part V of Prohibited Transaction Class Exemption 84-14, issued
March 13, 1984 (the "QPAM Exemption")), all of such funds constitute assets
of an "investment fund" (as defined in Part V of the QPAM Exemption)
managed by you, no employee benefit plan assets which are included in such
investment fund, when combined with the assets of all other employee
benefit plans (i) established or maintained by the same employer or an
affiliate (as defined in Part V of the

<PAGE>

QPAM Exemption) of such employer or by the same employee organization and
(ii) managed by you, exceed 20% of the total client assets managed by you,
the conditions of the QPAM Exemption (other than Section I(a) thereof) are
satisfied and you have disclosed to the Company the names of all employee
benefit plans whose assets are included in such investment fund; or

(d) if you are other than an insurance company, all or a portion of
such funds consists of funds which do not constitute assets of any employee
benefit plan (other than a governmental plan exempt from the coverage of
ERISA) and the remaining portion, if any, of such funds consists of funds
which may be deemed to constitute assets of one or more specific employee
benefit plans, complete and accurate information as to the identity of each
of which you have delivered to the Company in writing; or

(e) if you are an insurance company, the source of the funds is an
insurance company general account in respect of which the reserves and
liabilities for the general account contract(s) held by or on behalf of any
benefit plan (as defined by the annual statement for life insurance
companies approved by the National Association of Insurance Commissioners
(the "NAIC Annual Statement"), determined before reduction for credits on
account of any reinsurance ceded on a coinsurance basis) together with the
amount of the reserves and liabilities for the general account contract(s)
held by or on behalf of any other benefit plans (as defined by the NAIC
Annual Statement) maintained by the same employer (or affiliate thereof as
defined in Prohibited Transaction Class Exemption 95-60) or by the same
employee organization (as defined by the NAIC Annual Statement) in the
general account do not exceed 10% of the total reserves and liabilities of
the general account (exclusive of separate account liabilities) plus
surplus as set forth in the NAIC Annual Statement filed with the state of
domicile of the insurance company.

As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.

<PAGE>

SECTION 7. ACCOUNTING; FINANCIAL STATEMENTS AND OTHER INFORMATION.

The Company will maintain, and will cause each Restricted Subsidiary
to maintain, a system of accounting established and administered in accordance
with GAAP, and will accrue, and will cause each Restricted Subsidiary to accrue,
all such liabilities as shall be required by GAAP. The Company will deliver (in
duplicate, unless you have advised us otherwise) to you, so long as you shall be
entitled to purchase Notes under this Agreement or you or your nominee shall be
the holder of any Notes, and to each other Institutional Investor holding any
Notes (other than a Competitor of the Company):

(a) as soon as practicable, but in any event within 60 days after the
end of each of the first three quarterly fiscal periods in each fiscal year
of the Company beginning with the fiscal period ending March 31, 1997,
consolidated (and to the extent that such are being prepared,
consolidating) balance sheets of the Company and the Restricted
Subsidiaries as at the end of such period and the related consolidated
(and, as to statements of income and cash flows, if applicable and as
appropriate, consolidating) statements of income, surplus or partners'
capital, cash flows and stockholders' equity of the Company and the
Restricted Subsidiaries (i) for such period and (ii) (in the case of the
second and third quarterly periods) for the period from the beginning of
the current fiscal year to the end of such quarterly period, setting forth
in each case (except in the case of financial statements with respect to
the fiscal year of the Company beginning ________, 1998 or if consolidating
balance sheets of the Restricted Subsidiaries were not required to be
delivered pursuant to this subdivision (a) for the previous corresponding
period) in comparative form the consolidated and, where applicable and as
appropriate, consolidating figures for the corresponding periods of the
previous fiscal year, all in reasonable detail and certified by an
authorized financial officer of the Managing General Partner as presenting
fairly, in all material respects, the information contained therein
(subject to changes resulting from normal year-end adjustments), in
accordance with GAAP applied on a basis consistent with prior fiscal
periods, PROVIDED that delivery within the time period specified above of
copies of the Company's Quarterly Report on Form 10-Q prepared in
compliance with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements hereof to
the extent such reports otherwise satisfy such requirements;

<PAGE>

(b) as soon as practicable, but in any event within 120 days after
the end of each fiscal year of the Company beginning with the fiscal year
ending June 30, 1998, consolidated (and to the extent that such are being
prepared, consolidating) balance sheets of the Company and the Restricted
Subsidiaries and the consolidated balance sheets of each General Partner as
at the end of such year and the related consolidated (and, as to statements
of income and cash flows, if applicable and as appropriate, consolidating)
statements of income, partners' capital, cash flows and stockholders'
equity of the Company and the Restricted Subsidiaries and the consolidated
statements of income, surplus, cash flow and stockholders' equity of each
General Partner for such fiscal year, setting forth in each case (except in
the case of the financial statements with respect to the fiscal year of the
Company ending June 30, 1998 or if consolidating balance sheets of the
Restricted Subsidiaries were not required to be delivered pursuant to this
subdivision (b) for the preceding corresponding period) in comparative form
the consolidated and, where applicable and as appropriate, consolidating
figures for the previous fiscal year, all in reasonable detail, PROVIDED
that delivery within the time periods specified above of copies of the
Company's Annual Report on Form 10-K prepared in compliance with the
requirements therefor and filed with the Securities and Exchange Commission
shall be deemed to satisfy the requirements hereof to the extent such
reports otherwise satisfy such requirements, and (i) in the case of such
consolidated financial statements of the Company, accompanied by a report
thereon of Arthur Andersen LLP or other independent public accountants of
recognized national standing selected by the Company, which report shall
state that such consolidated financial statements present fairly in all
material respects the financial position of the Company and the Restricted
Subsidiaries as at the dates indicated and the results of their operations
and cash flows for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years and that the audit by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards in effect in the
United States from time to time, and (ii) in the case of such consolidated
financial statements of each General Partner and such consolidating
financial statements of the Company, certified by the principal financial
officer of the Managing General Partner of the Company, as presenting
fairly in all material respects the information contained therein, in
accordance with GAAP applied on a basis consistent with prior fiscal
periods;

<PAGE>

(c) together with each delivery of financial statements pursuant to
subdivisions (a) and (b) of this Section 7, a certificate by an authorized
financial officer of the Managing General Partner of the Company
(i) stating that the signer has reviewed the terms of this Agreement and
the other Operative Agreements and has made, or caused to be made under his
or her supervision, a review in reasonable detail of the transactions and
condition of the Company and the Restricted Subsidiaries during the
accounting period covered by such financial statements and that the signer
does not have knowledge of the existence and continuance as at the date of
such certificate of any condition or event which constitutes an Event of
Default or Potential Event of Default, or, if any such condition or event
exists, specifying the nature and period of existence thereof and what
action the Company has taken or is taking or proposes to take with respect
thereto, (ii) specifying the amount available at the end of such accounting
period for Restricted Payments in compliance with Section 10.4 and showing
in reasonable detail all calculations required in arriving at such amount,
(iii) demonstrating in reasonable detail, if applicable, compliance during
and at the end of such accounting period with the restrictions contained in
Sections 10.1(b), (d), (e), (f), (g), (h), (i) and (n), 10.3(c),
10.7(a)(ii), 10.7(a)(iii), 10.7(c)(ii), 10.19 and 10.30, (iv) if not
specified in the related financial statements being delivered pursuant to
subdivisions (a) and (b) above, specifying the aggregate amount of interest
paid or accrued by the Company and the Restricted Subsidiaries, and the
aggregate amount of depreciation, depletion and amortization charged on the
books of the Company and the Restricted Subsidiaries, during the fiscal
period covered by such financial statements;

(d) together with each delivery of consolidated financial statements
pursuant to subdivision (b) of this Section 7, a written statement by the
independent public accountants giving the report thereon (i) stating that
in connection with their audit examination, the terms of this Agreement and
the other Operative Agreements were reviewed to the extent considered
necessary for the purpose of expressing an opinion on the consolidated
financial statements and for making the statement contained in clause (ii)
hereof (it being understood that no special audit procedures in addition to
those required by generally accepted auditing standards then in effect in
the United States shall be required) and (ii) stating whether, in the
course of their audit examination, they obtained knowledge (and whether, as
of the date of such written statement, they have knowledge) of the
existence and continuance of any condition or event which constitutes an
Event of Default or Potential Event of

<PAGE>

Default insofar as such Event of Default or Potential Event of Default
relates to accounting or financial matters, and, if so, specifying the
nature and period of existence thereof;

(e) promptly upon their becoming publicly available, copies of
(i) all financial statements, reports, notices and proxy statements sent or
made available by the Company, the Managing General Partner or the Public
Partnership to all of its security holders in compliance with the
Securities Exchange Act of 1934, as amended from time to time, or any
comparable Federal or state laws relating to the disclosure by any Person
of information to its security holders, (ii) all regular and periodic
reports and all registration statements and prospectuses filed by the
Company, the Managing General Partner or the Public Partnership with any
securities exchange or with the Securities and Exchange Commission or any
governmental authority succeeding to any of its functions (other than
Registration Statements on Form S-8), and (iii) all press releases and
other statements made available by the Company, the Managing General
Partner or the Public Partnership to the public concerning material
developments in the business of the Company, either General Partner of the
Company or the Public Partnership, as the case may be;

(f) promptly, but in any event within five days after any Responsible
Officer of the Company knows, that (x) any condition or event which
constitutes an Event of Default or Potential Event of Default has occurred
or exists, or is expected to occur or exist, (y) the holder of any Note has
given any notice or taken any other action with respect to a claimed Event
of Default or Potential Event of Default under this Agreement or default
under any other Operative Agreement or (z) any Person has given any notice
to the Company, either General Partner or any Restricted Subsidiary or
taken any other action with respect to a claimed default or event or
condition of the type referred to in Section 11(f), an Officers'
Certificate of the Company describing the same and the period of existence
thereof and what action the Company has taken, is taking and proposes to
take with respect thereto;

(g) promptly, and in any event within five Business Days after a
Responsible Officer of the Company obtains knowledge of (i) the occurrence
of an adverse development with respect to any litigation or proceeding
involving the Company, any of its Subsidiaries or either General Partner
which in the reasonable judgment of the Company presents a reasonable
likelihood of having a Material Adverse Effect or (ii) the commencement of
any litigation or proceeding involving the

<PAGE>

Company, any of the Subsidiaries or either General Partner which in the
reasonable judgment of the Company presents a reasonable likelihood of
having a Material Adverse Effect, a written notice of a Responsible
Officer describing in reasonable detail such commencement of, or adverse
development with respect to, such litigation or proceeding;

(h) promptly, but in any event within five days after any Responsible
Officer of the Company knows, that any of the events or conditions
specified below with respect to any Plan has occurred or exists, or is
expected to occur or exist, a statement setting forth details respecting
such event or condition and the action, if any, that the Company or any
Related Person of the Company has taken, is taking and proposes to take or
cause to be taken with respect thereto (and a copy of any notice or report
filed with or given to or communication received from the PBGC, the
Internal Revenue Service or the Department of Labor with respect to such
event or condition):

(A) any reportable event, as defined in Section 4043(b) of ERISA
and the regulations issued thereunder;

(B) the filing under Section 4041 of ERISA of a notice of intent
to terminate any Plan or the termination of any Plan;

(C) a substantial cessation of operations within the meaning of
Section 4062(e) of ERISA under circumstances which could result in the
treatment of the Company or any Related Person of the Company as a
substantial employer under a "multiple employer plan" or the
application of the provisions of Section 4062, 4063 or 4064 of ERISA
to the Company or any Related Person of the Company;

(D) the taking of any steps by the PBGC or the institution by
the PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Company or any Related Person of the
Company of a notice from a Multiemployer Plan that such action has
been taken by the PBGC with respect to such Multiemployer Plan;

<PAGE>

(E) the complete or partial withdrawal by the Company or any
Related Person of the Company under Section 4063, 4203 or 4205 of
ERISA from a Plan which is a "multiple employer plan" or a
Multiemployer Plan, or the receipt by the Company or any Related
Person of the Company of notice from a Multiemployer Plan regarding
any alleged withdrawal or that it intends to impose withdrawal
liability on the Company or any Related Person of the Company or that
it is in reorganization or is insolvent within the meaning of
Section 4241 or 4245 of ERISA or that it intends to terminate under
Section 4041A of ERISA or from a "multiple employer plan" that it
intends to terminate;

(F) the taking of any steps concerning the threat or the
institution of a proceeding against the Company or any Related Person
of the Company to enforce Section 515 of ERISA;

(G) the occurrence or existence of any event or series of events
which could result in a liability to the Company or any Related Person
of the Company pursuant to Section 4069(a) or 4212(c) of ERISA;

(H) the failure to make a contribution to any Plan, which
failure, either alone or when taken together with any other such
failure, is sufficient to result in the imposition of a lien on any
property of the Company or any Related Person of the Company pursuant
to Section 302(f) of ERISA or Section 412(n) of the Code or could
result in the imposition of a material tax or material penalty
pursuant to Section 4971 of the Code on the Company or any Related
Person of the Company;

(I) the amendment of any Plan in a manner which would be treated
as a termination of such Plan under Section 4041(e) of ERISA or
require the Company or any Related Person of the Company to provide
security to such Plan pursuant to Section 307 of ERISA or
Section 401(a)(29) of the Code; or

(J) the incurrence of liability in connection with the
occurrence of a "prohibited transaction" (within the meaning of
Section 406 of ERISA or Section 4975 of the Code);

<PAGE>

(i) promptly, but in any event within five days, after an officer of
any of the Company, any Subsidiary or either General Partner receives any
notice or request from any Person (other than any Affiliate or any agent,
attorney or similar party employed by the Company or either General
Partner) for information, or if the Company, any Subsidiary or either
General Partner provides any notice or information to any such Person
(other than any Affiliate or any agent, attorney or similar party employed
by the Company or either General Partner), concerning the presence or
release of any hazardous substance (as defined in CERCLA) or hazardous
waste (as defined in RCRA) or other contaminants (as defined by any
applicable federal, state, local or foreign laws) within, on, from,
relating to or affecting any property owned, leased, or subleased by the
Company, any Subsidiary or either General Partner (each such notice,
request or information, an "Environmental Notice"), copies of such
Environmental Notice, except (i) any Environmental Notice which the Company
reasonably determines will not result in any claim or liability in excess
of $250,000 (it being understood that to the extent that all such
Environmental Notices could reasonably be expected to result in aggregate
claims or liabilities in excess of $250,000, the Company shall provide a
summary of such Environmental Notices) and (ii) any Environmental Notice
made in the normal course of business which do not pertain to the violation
by the Company, any Subsidiary or either General Partner of an
Environmental Law;

(j) with reasonable promptness, such other financial reports and
information and data (including, without limitation, any management letter
issued or provided by independent public accountants of the Company or any
Restricted Subsidiary) with respect to the Company, any Restricted
Subsidiary, any other Subsidiary (to the extent such reports, information
and data relate to environmental matters or any material litigation or
proceeding) or either General Partner as from time to time may be requested
by you (so long as you hold a Note), or by any Institutional Investor
holder of any Note other than a Competitor of the Company;

(k) promptly, after a Responsible Officer of the Company or any
Restricted Subsidiary becomes aware of (i) any material violation of or
notice of potential liability under any Environmental Law or (ii) any
release or threatened release of any Hazardous Material at, on, into, under
or from any real property of any facility or equipment thereat in excess of
reportable or allowable standards or levels under any Environmental Law, or
in a manner and/or amount which could reasonably be expected to result in
liability under any Environmental Law, which

<PAGE>

liability would result in a Material Adverse Effect a statement setting
forth details respecting such event or condition and the action, if any,
that the Company or any Related Person of the Company has taken, is taking
and proposes to take or cause to be taken with respect thereto; and

(l) promptly, and, in any event, within 30 days after such material
is provided to the governmental authority or third party, copies of any
notice, submission or documentation provided by the Company or any
Restricted Subsidiary to any governmental authority or third party under
any Environmental Law if the matter which is the subject of the notice,
submission or other documentation could reasonably be expected to have a
Material Adverse Effect.

SECTION 8. INSPECTION.

The Company will permit or cause the Managing General Partner to
permit (a) at any time when an Event of Default or Potential Event of Default
shall have occurred and be continuing, any authorized representatives designated
by you, so long as you shall be entitled to purchase the Notes under this
Agreement or you or your nominee shall be the holder of any Notes, or by any
other institutional holder of any Notes (other than a Competitor of the
Company), and (b) at any other time, any authorized representative designated by
any Purchaser or Purchasers holding at least $10,000,000 of the principal
amount of the Notes, or by any other holder or holders of at least $10,000,000
of the principal amount of the Notes (other than a Competitor of the Company)
then outstanding and an authorized representative of all of the holders of the
Notes, in each case, upon prior written notice and as may be reasonably
requested, to visit during normal business hours and inspect any of the
properties of the Company, any Restricted Subsidiary and any other Subsidiary
(to the extent relating to environmental or litigation matters) and, to the
extent relating to the Business, any properties of either General Partner or of
either General Partner's Subsidiaries, including the books of account of the
Company, the Restricted Subsidiaries, such other Subsidiaries, either General
Partner and either General Partner's Subsidiaries, and to make copies and take
extracts therefrom, and to discuss its and their affairs, finances and accounts
with its and their senior officers and (with reasonable prior written notice)
independent public accountants (and by this provision each of the Company and
either General Partner authorizes such accountants to discuss with such
representatives the affairs, finances and accounts of the Company, any
Restricted Subsidiary, such other Subsidiaries, [either General Partner or any
of either General Partner's Subsidiaries], as the

<PAGE>

case may be) all at such times and as often as may be requested, PROVIDED that
you shall bear the expenses of your authorized representative, except the
Company will bear the expenses of such authorized representatives if an Event of
Default or Potential Event of Default has occurred and is continuing; and the
Company shall at all times bear the expenses of its and its Affiliates' officers
and independent public accountants.

SECTION 9. PREPAYMENT OF NOTES.

9.1. REQUIRED PREPAYMENTS OF THE NOTES. On each of the dates set
forth in the following table, the Company will prepay the principal amount of
the Notes set forth opposite such date in such table (or such lesser principal
amount of the Notes as shall at the time be outstanding), at the principal
amount of the Notes so prepaid, without premium, together with interest accrued
thereon:

Principal Amount
Date of Prepayment of Prepayment
--------------------------------- ----------------------------
December __, 2003 $27,500,000
December __, 2004 27,500,000
December __, 2005 27,500,000
December __, 2006 27,500,000
December __, 2007 27,500,000
December __, 2008 27,500,000
December __, 2009 27,500,000

Any partial prepayment of the Notes pursuant to Section 9.2, 9.3 or
(to the extent not applied to satisfy a prepayment required under this Section
9.1) 9.4 shall be applied to reduce each prepayment thereafter required to be
made pro rata, but otherwise no acquisition of the Notes by the Company or any
of its Affiliates, shall relieve the Company from its obligation to make the
required prepayments provided for in this Section 9.1. The Company shall notify
the holders of the Notes of any application provided for in the immediately
preceding sentence five days prior to such application. On the maturity date,
the Company will pay the then outstanding principal amount of the Notes together
with interest accrued thereon.

<PAGE>

9.2. OPTIONAL PREPAYMENTS OF THE NOTES WITH MAKE WHOLE AMOUNT. The
Notes shall be subject to prepayment, in whole at any time or from time to time
in part (in an amount of not less than $5,000,000), at the option of the
Company, upon notice as provided in Section 9.5 at 100% of the principal amount
of the Notes so prepaid plus interest thereon to the prepayment date and the
Make Whole Amount.

9.3. PREPAYMENT ON CHANGE OF CONTROL. (a) The Company will, within
90 days after any Change of Control give written notice of such Change of
Control to each holder of Notes. Such notice shall contain and constitute an
offer to prepay the Notes as described in subdivision (b) of this Section 9.3
and shall be accompanied by the certificate described in subdivision (e) of this
Section 9.3.

(b) The offer to prepay Notes contemplated by subdivision (a) of
this Section 9.3 shall be an offer to prepay, in accordance with and subject to
this Section 9.3, all, but not less than all, the Notes held by each holder (in
this case only, "holder" in respect of any Note registered in the name of a
nominee for a disclosed beneficial owner shall mean such beneficial owner) on a
date specified in such offer (the "Proposed Prepayment Date") that is not less
than 20 days and not more than 30 days after the date of such offer (if the
Proposed Prepayment Date shall not be specified in such offer, the Proposed
Prepayment Date shall be the 20th day after the date of such offer).

(c) A holder of Notes may accept the offer to prepay made pursuant
to this Section 9.3 by causing a notice of such acceptance to be delivered to
the Company at least 5 days prior to the Proposed Prepayment Date. A failure by
a holder of Notes to respond to an offer to prepay made pursuant to this
Section 9.3 shall be deemed to constitute a rejection of such offer by such
holder.

(d) Prepayment of the Notes to be prepaid pursuant to this
Section 9.3 shall be at 100% of the principal amount of such Notes, plus a
premium equal to 1% of such principal amount (the "Premium Amount"), together
with interest on such Notes accrued to the date of prepayment. The principal
amount and accrued interest and the Premium Amount shall, with respect to all
Notes the holders of which accepted the offer to prepay pursuant to subdivision
(c), become due and payable on the Proposed Prepayment Date.

(e) Each offer to prepay the Notes pursuant to this Section 9.3
shall be accompanied by an Officers' Certificate, executed by a senior financial
officer of the

<PAGE>

Company and dated the date of such offer, specifying: (i) the Proposed
Prepayment Date; (ii) that such offer is made pursuant to this Section 9.3;
(iii) the principal amount of each Note offered to be prepaid; (iv) the Premium
Amount due on each Note in connection with such prepayment; (v) the interest
that would be due on each Note offered to be prepaid, accrued to the Proposed
Prepayment Date; (vi) that the conditions of this Section 9.3 have been
fulfilled; (vii) in reasonable detail, the nature and date of the Change of
Control; and (viii) that a failure to respond to such notice shall be deemed a
rejection of such offer to prepay the Notes.

9.4. CONTINGENT PREPAYMENTS ON DISPOSITION OF PROPERTY, TAKING OR
DESTRUCTION. (a) If at any time the Company or any of the Restricted
Subsidiaries disposes of property or such property shall be damaged, destroyed
or taken in eminent domain or there shall be title insurance proceeds with
respect to such property, in any such case, with the result that there are
Excess Proceeds, and the Company does not apply such Excess Proceeds in the
manner described in Section 10.7(c)(ii)(B)(x), and if the next scheduled date of
prepayment of the Notes pursuant to Section 9.1 occurs within 365 days after
receipt of such Excess Proceeds, such Excess Proceeds may be applied to such
prepayment required under Section 9.1 (unless such scheduled prepayment has been
paid by the Company). To the extent that there are such Excess Proceeds
remaining after application in accordance with the first sentence of this
Section 9.4(a), the Company shall prepay, upon notice as provided in Section 9.5
(which notice shall be given not later than 365 days after the date of such sale
of property), a principal amount of the outstanding Notes equal to the amount of
such remaining Excess Proceeds allocable to the Notes, determined by allocating
such remaining Excess Proceeds pro rata among the holders of all Notes and
Parity Debt, if any, outstanding on the date such prepayment is to be made,
according to the aggregate then unpaid principal amounts of the Notes (and the
Make Whole Amount on the principal amount of the Notes to be prepaid) and Parity
Debt, respectively. Each prepayment of Notes pursuant to this Section 9.4(a)
shall be made at 100% of the principal amount of the Notes to be prepaid, plus
interest thereon to the prepayment date plus, to the extent the prepayment is
not made in satisfaction of a required prepayment in accordance with Section
9.1, the Make Whole Amount thereon.

(b) In the event that damage, destruction or a taking shall occur
in respect of all or a portion of the properties subject to any of the Security
Documents, all net insurance proceeds, self-insurance amounts or net awards
which, as of any date, shall not theretofore have been applied to the cost of
repairing or replacing any damaged or

<PAGE>

destroyed assets shall be deemed to be proceeds of property disposed of
voluntarily, shall be subject to the provisions of Section 10.7(c) and, if
subdivision (ii)(B)(y) of Section 10.7(c) is applicable thereto, shall be
subject to the prepayment provisions of Section 9.4(a). Any amounts prepaid
pursuant to this Section 9.4(b) on the date on which a prepayment is required
under Section 9.1 may be applied to satisfy such prepayment required under
Section 9.1.

9.5. NOTICE OF PREPAYMENTS; OFFICERS' CERTIFICATE. The Company will
give each holder of any Notes irrevocable written notice of each prepayment
under Section 9.2 or 9.4 not less than 10 days and not more than 30 days prior
to the date fixed for such prepayment, in each case specifying such prepayment
date, the aggregate principal amount of the Notes and the principal amount of
each Note held by such holder to be prepaid and the Section under which such
prepayment is to be made. Notice of prepayment having been given as aforesaid,
the principal amount of the Notes specified in such notice, together with
interest thereon to the prepayment date and together with the Make Whole Amount,
if any, with respect thereto, shall become due and payable on such prepayment
date. The Company shall, on or before the Business Day next succeeding the date
which the Company sends such written notice, give telephonic notice of the
principal amount of the Notes to be prepaid and the prepayment date to each
holder of any Notes which shall have designated a recipient of such notices in
the Schedule of Purchasers attached hereto or by notice in writing to the
Company. Each holder of a Note shall receive, on the Business Day immediately
preceding the date scheduled for any such prepayment, an Officers' Certificate
certifying that the conditions of the Section under which such prepayment is to
be made have been fulfilled and specifying the particulars of such fulfillment.
In the event that there shall have been a partial prepayment of the Notes under
Section 9.2, 9.3 or 9.4, the Company shall promptly give notice to the holders
of the Notes, accompanied by an Officers' Certificate setting forth the
principal amount of each of the Notes that was prepaid and specifying how each
such amount was determined, setting forth the reduced amount of each required
prepayment thereafter becoming due with respect to the Notes under Section 9.1,
and certifying that such reduction has been computed in accordance with such
Section.

9.6. ALLOCATION OF PARTIAL PREPAYMENTS. Upon any partial prepayment
of the Notes pursuant to Section 9.1, 9.2 or 9.4 the principal amount so prepaid
shall be allocated (in integral multiples of $1,000 as nearly as practicable) to
all Notes at the time outstanding in proportion to the respective outstanding
principal amounts thereof not

<PAGE>

theretofore called for prepayment, with adjustments, to the extent practicable,
to compensate for any prior prepayments not made exactly in such proportion.

9.7. MATURITY; SURRENDER, ETC. In the case of each prepayment, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make Whole Amount or
other premium, if any. From and after such date, unless the Company shall fail
to pay such principal amount when so due and payable, together with the interest
and Make Whole Amount or other premium, if any, as aforesaid, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall,
after such payment or prepayment in full, be surrendered to the Company and
canceled and shall not be reissued, and no Note shall be issued in lieu of any
such paid or prepaid principal amount of any Note.

9.8. ACQUISITION OF NOTES. None of the General Partners or the
Company shall, nor shall any permit any of their respective Subsidiaries or any
Restricted Affiliate to, prepay or otherwise retire in whole or in part prior to
their stated final maturity (other than by prepayment pursuant to Section 9.1,
9.2, 9.3 or 9.4 or upon acceleration of such final maturity pursuant to
Section 11), or purchase or otherwise acquire, directly or indirectly, Notes
held by any holder, except, in the case of such purchase or acquisition,
pursuant to an offer to purchase made pro rata to the holders of all of the
Notes on the same terms and conditions. Any Notes prepaid or otherwise retired
or purchased or otherwise acquired by the Company or any of its Subsidiaries or
either General Partner shall not be deemed to be outstanding for any purpose
under this Agreement or any other Operative Agreement. Any Notes prepaid or
otherwise purchased or otherwise acquired by any Affiliate of the Company (other
than any of its Subsidiaries or either General Partner) shall not be deemed
outstanding for the purpose of any vote of the holders of the Notes (including,
without limitation, the calculation of any percentage of principal amount of the
Notes outstanding with respect to any such vote) pursuant to this Agreement or
any other Operative Agreement but shall be deemed outstanding with respect to
the calculation of any future payment of principal, premium and interest on the
Notes.

<PAGE>

SECTION 10. BUSINESS AND FINANCIAL COVENANTS OF THE COMPANY.

The Company covenants that from the date of this Agreement through the
Closing and thereafter so long as any of the Notes are outstanding:

10.1. INDEBTEDNESS. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except that:

(a) the Company may become and remain liable with respect to the
Indebtedness evidenced by the Notes;

(b) the Company and the Restricted Subsidiaries may become and
remain liable with respect to Indebtedness, which may be secured equally
and ratably with the Notes, incurred by the Company and the Restricted
Subsidiaries to finance the making of expenditures for the improvement or
repair of or additions to the Assets, PROVIDED that (i) the aggregate
principal amount of Indebtedness incurred under this Section 10.1(b) and
outstanding at any time shall not exceed an amount equal to the sum of (x)
the net cash proceeds received by the Company from the Managing General
Partner or from the Public Partnership as a capital contribution or as
consideration for the issuance by the Company of additional partnership
interests, in each case for the sole purpose of financing such
expenditures, and (y) the fair market value of the Units contributed to the
Company by the Public Partnership or issued directly to the Person selling
such asset or making such repair or improvement by the Public Partnership
for the sole purpose of financing such expenditures, only to the extent,
however, that such Units are used to pay, substantially concurrently with
the date of contribution, at least 50% of the purchase price or cost of
such improvements, repairs or additions, and (ii) if such Indebtedness is
to be secured under the Security Documents as provided in Section 10.2(i),
the agreement or instrument pursuant to which such Indebtedness is incurred
(A) contains no financial or business covenants that are more restrictive
on the Company or its Subsidiaries than or that are in addition to those
contained in this Section 10 (unless prior to or simultaneously with the
incurrence of such Indebtedness this Agreement and the Other Agreements are
amended to provide the benefits of such more restrictive covenants to the
holders of the Notes) and (B) specifies no events of default (other than
with respect to the payment of

<PAGE>

principal and interest on such Indebtedness or the accuracy of representations
and warranties made in connection with such agreement or instrument) which are
capable of occurring prior to the occurrence of the Events of Default specified
in Section 11 (unless prior to or simultaneously with the incurrence of such
Indebtedness this Agreement and the Other Agreements are amended to provide the
benefit of such events of default to the holders of the Notes);

(c) any Restricted Subsidiary may become and remain liable with
respect to Indebtedness of such Restricted Subsidiary owing to the Company
or to another Restricted Subsidiary, PROVIDED that such Indebtedness is
created and is outstanding under an agreement or instrument pursuant to
which such Indebtedness is subordinated to the Notes and to Indebtedness
secured under the Security Documents at least to the extent provided in the
subordination provisions set forth in Exhibit E and PROVIDED FURTHER that
such Indebtedness is evidenced by an Intercompany Note pledged to the
Trustee;

(d) the Company and the Restricted Subsidiaries may become and
remain liable with respect to unsecured Indebtedness owing to either
General Partner or an Affiliate of either General Partner, PROVIDED that
(i) the aggregate principal amount of such Indebtedness of the Company and
the Restricted Subsidiaries outstanding at any time shall not be in excess
of $20,000,000 and (ii) such Indebtedness is created and is outstanding
under an agreement or instrument pursuant to which such Indebtedness is
subordinated to the Notes and to Indebtedness secured under the Security
Documents at least to the extent provided in the subordination provisions
set forth in Exhibit E;

(e) the Company may become and remain liable with respect to
Indebtedness incurred under the Bank Credit Facilities, PROVIDED that

(i) the aggregate principal amount outstanding under the
Initial Acquisition Facility, together with amounts outstanding
pursuant to Indebtedness permitted by subdivisions (h)(3)(i) and (j)
of this Section 10.1, will be in an aggregate principal amount not in
excess of the greater of (i) $75,000,000, and (ii) 40% of the
Consolidated Net Worth of the Company as of the date of incurrence of
the Indebtedness outstanding at any time, and

<PAGE>

(ii) in respect of the Working Capital Facility:

(1) there shall be a period of at least 30 consecutive
days during each fiscal year of the Company on each day of
which there shall be no such Indebtedness outstanding under the
Working Capital Facility (the "Requisite Period"), PROVIDED
that, in the event that there shall not have been any Requisite
Period in any fiscal year, the lowest average balance for a
period of 30 consecutive days outstanding during such fiscal
year shall be treated as outstanding funded Indebtedness for
purposes of future incurrences of Indebtedness pursuant to
Section 10.1(f)(iii), and

(2) the aggregate principal amount of loans, exposure
under letters of credit in respect of the Working Capital
Facility and the unfunded commitments thereunder at any time
outstanding thereunder shall not be in excess of $50,000,000;

(f) the Company and the Restricted Subsidiaries may become and
remain liable with respect to Indebtedness, in addition to that otherwise
permitted by the foregoing subdivisions of this Section 10.1, which may be
secured equally and ratably with the Notes, if on the date the Company or
any Restricted Subsidiary becomes liable with respect to any such
additional Indebtedness and immediately after giving effect thereto and to
the substantially concurrent repayment of any other Indebtedness (i) the
ratio of Consolidated Cash Flow to Consolidated Pro Forma Debt Service is
greater than 2.50 to 1.0, (ii) the ratio of Consolidated Cash Flow to
Maximum Consolidated Pro Forma Debt Service is greater than 1.25 to 1.0,
and (iii) the ratio of total funded Indebtedness (including the
Indebtedness to be incurred) to Consolidated Cash Flow is less than 5.0 to
1.0, PROVIDED that, in addition to the foregoing, if such Indebtedness is
to be secured under the Security Documents as provided in Section 10.2(i),
such Indebtedness shall be incurred pursuant to an agreement or instrument
which complies with the requirements set forth in clause (ii) of the
proviso to Section 10.1(b);

(g) the Company and the Restricted Subsidiaries may become and
remain liable with respect to the Indebtedness referred to in Schedule 5.7,
PROVIDED that the aggregate principal amount of all such Indebtedness at
any time outstanding shall not exceed $15,000,000;

<PAGE>

(h) the Company and any Restricted Subsidiary may become and remain
liable with respect to pre-existing Indebtedness relating to any Person,
business or assets acquired by the Company or such Restricted Subsidiary,
or both, as the case may be, PROVIDED that (1) no condition or event shall
exist which constitutes an Event of Default or Potential Event of Default,
(2) such Indebtedness was not incurred in anticipation of the acquisition
of such Person, business or assets and (3) after giving effect to such
Person becoming a Restricted Subsidiary, or the acquisition of such
business or assets, either (i) the sum of (A) such Indebtedness, and (B)
the then outstanding aggregate principal amount of Indebtedness under the
Initial Acquisition Facility, and under subdivision (j)(i) of this
Section 10.1, does not exceed the greater of (A) $75,000,000 and (B) 40% of
the Consolidated Net Worth of the Company as of the date of the incurrence
of the Indebtedness, or (ii) the Company or such Restricted Subsidiary
could incur at least $1 of additional Indebtedness in compliance with the
requirements set forth in clauses (i), (ii) and (iii) of Section 10.1(f)
(it being understood for purposes of this Section 10(h) and
Section 10.1(e)(i) that any Indebtedness which on the date of acquisition
of any Person, business or assets could be incurred under the foregoing
clause (i) or (ii) of this Section 10.1(h) shall be deemed to have been
incurred under clause (ii) of this Section 10.1(h));

(i) so long as no Event of Default or Potential Event of Default
has occurred and is continuing, the Company and the Restricted Subsidiaries
may become and remain liable with respect to Indebtedness secured equally
and ratably with the Notes, incurred for any extension, renewal, refunding
or refinancing of Indebtedness permitted pursuant to subdivisions (a), (b)
and (f) of this Section 10.1, PROVIDED that (i) the principal amount
(including any exposure under letters of credit and any unfunded
commitments) of such Indebtedness shall not exceed the principal amount
(including any exposure under letters of credit and any unfunded
commitments) of such Indebtedness being extended, renewed, refunded or
refinanced together with any accrued interest and Make Whole Amount,
Premium Amount or other premium with respect thereto and any costs and
expenses related to such extension, renewal, refunding or refinancing, (ii)
the maturity date of such Indebtedness shall not be sooner than the
maturity date of such Indebtedness being extended, renewed, refunded or
refinanced, (iii) the average life to maturity of such Indebtedness shall
be equal to or greater than the remaining average life to maturity of such
Indebtedness being extended, renewed, refunded or refinanced and (iv) if
such Indebtedness is incurred for any extension, renewal, refunding or

<PAGE>

refinancing of Indebtedness permitted pursuant to subdivision (b) or (f),
such Indebtedness satisfies the conditions specified in clause (ii) of the
proviso to subdivision (b) and such Indebtedness specifies no events of
default (other than with respect to the payment of principal and interest
on such Indebtedness or the accuracy of representations and warranties made
in connection with such agreement or instrument) which are capable of
occurring prior to the occurrence of the events of default specified in the
Bank Credit Facilities as of the date of this Agreement (unless prior to or
simultaneously with the incurrence of such Indebtedness this Agreement and
the Other Agreements are amended to provide the benefit of such more
restrictive covenants and events of default to the holders of the Notes);

(j) so long as no Event of Default or Potential Event of Default
has occurred and is continuing, the Company and the Restricted Subsidiaries
may become and remain liable with respect to Indebtedness secured equally
and ratably with the Notes, incurred for any extension, renewal, refunding
or refinancing of Indebtedness permitted pursuant to subdivision (e) of
this Section 10.1, PROVIDED that (x) after giving effect thereto (i) the
aggregate principal amount of (A) such Indebtedness incurred to extend,
refund, renew or refinance Indebtedness incurred pursuant to
subdivision (e)(i) in connection with the Initial Acquisition Facility,
(B) any such Indebtedness incurred pursuant to subdivision (e)(i) and
remaining outstanding, and (C) any outstanding Indebtedness incurred
pursuant to subdivision (h)(3)(i), shall not exceed the greater of
$75,000,000 and 40% of Consolidated Net Worth of the Company determined as
of the last day of the month immediately preceding the date of such
extension, renewal, refunding or refinancing, and (ii) the aggregate
principal amount of (A) such Indebtedness incurred to extend, refund, renew
or refinance Indebtedness incurred pursuant to subdivision (e)(ii) in
connection with the Working Capital Facility, (B) any such Indebtedness
incurred pursuant to subdivision (e)(ii) and remaining outstanding
(including any exposure in respect of issued but undrawn letters of
credit), and (C) any remaining unfunded commitment under the Working
Capital Facility, shall not exceed $50,000,000, and (y) such Indebtedness,
any such letters of credit and commitments shall be incurred pursuant to
the Initial Acquisition Facility or a working capital facility (A) which
complies with the requirements set forth in clause (ii)(1) of
Section 10.1(e) and (B) the financial and business covenants of such
Indebtedness are no more restrictive on the Company and its Subsidiaries
and there are no additional covenants than those contained in the Bank
Credit Facilities

<PAGE>

as of the date of this Agreement and such Indebtedness specifies no events
of default (other than with respect to the payment of principal and
interest on such Indebtedness or the accuracy of representations and
warranties made in connection with such agreement or instrument) which are
capable of occurring prior to the occurrence of the events of default
specified in the Bank Credit Facilities as of the date of this Agreement
(unless prior to or simultaneously with the incurrence of such Indebtedness
this Agreement and the Other Agreements are amended to provide the benefit
of such more restrictive covenants and events of default to the holders of
the Notes);

(k) so long as no Event of Default or Potential Event of Default
has occurred and is continuing, the Company and the Restricted Subsidiaries
may become and remain liable with respect to unsecured Indebtedness
incurred for any extension, renewal, refunding or refinancing of
Indebtedness otherwise permitted by this Section 10.1, PROVIDED that (i)
the principal amount of such unsecured Indebtedness to be incurred shall
not exceed the principal amount of such Indebtedness being extended,
renewed, refunded or refinanced together with any accrued interest and Make
Whole Amount, Premium Amount or other premium with respect thereto and any
costs and expenses related to such extension, renewal, refunding or
refinancing, (ii) the maturity date of such unsecured Indebtedness shall
not be sooner than the maturity date of such Indebtedness being extended,
renewed, refunded or refinanced and (iii) the average life to maturity of
such unsecured Indebtedness shall be equal to or greater than the remaining
average life to maturity of such Indebtedness being extended, renewed,
refunded or refinanced;

(l) so long as no Event of Default or Potential Event of Default
has occurred and is continuing, the Company and the Restricted Subsidiaries
may become and remain liable with respect to secured Indebtedness incurred
for any extension, renewal, refunding or refinancing of secured
Indebtedness (other than Indebtedness permitted by subdivisions [(a), (b),
(e) or (f)]) otherwise permitted pursuant to this Section 10.1, PROVIDED
that (i) the principal amount of such Indebtedness to be incurred shall not
exceed the principal amount of such Indebtedness being extended, renewed,
refunded or refinanced together with any accrued interest and premium with
respect thereto and any and all costs and expenses related to such
extension, renewal, refunding or refinancing, (ii) the maturity date of
such Indebtedness shall not be sooner than the maturity date of such
Indebtedness being extended, renewed, refunded or refinanced, and (iii) the
average life to maturity of

<PAGE>

such Indebtedness to be incurred shall be equal to or greater than the
remaining average life to maturity of such Indebtedness being extended,
renewed, refunded or refinanced;

(m) the Company and any Restricted Subsidiaries may become and
remain liable with respect to any Interest Rate Agreement;

(n) the Company and any Restricted Subsidiaries may become and
remain liable with respect to any Commodity Hedging Agreements;

(o) any Qualified Restricted Subsidiary may become and remain
liable with respect to Indebtedness evidenced by the Subsidiary Guarantee
Agreements or Guarantees of Parity Debt;

(p) the Company may become and remain liable with respect to
secured Indebtedness incurred in connection with Capital Lease obligations,
PROVIDED that (1) the security for such Indebtedness shall extend only to
such property or asset, (2) the obligation incurred does not exceed the
fair market value of such property or asset (as determined in good faith by
the board of directors of the Managing General Partner) and (3) after
incurring such Indebtedness, and giving effect to the substantially
concurrent retirement of any other Indebtedness, the Company could incur at
least $1 of additional Indebtedness in compliance with the requirements set
forth in clauses (i), (ii) and (iii) of Section 10.1(f);

(q) the Company may become and remain liable with respect to
secured Indebtedness incurred in connection with purchase money
obligations, PROVIDED that (1) the security for such Indebtedness shall
extend only to such property or asset, (2) the obligation incurred does not
exceed 85% of the fair market value of such property or asset (as
determined in good faith by the Board of Directors of the Managing General
Partner) and (3) after incurring such Indebtedness and giving effect to the
substantially concurrent retirement of any other Indebtedness the Company
could incur at least $1 of additional Indebtedness in compliance with the
requirements set forth in clauses (i), (ii) and (iii) of Section 10.1(f);
and

(r) the Company may become and remain liable with respect to
secured Indebtedness incurred to pay all or a portion of the purchase price
of property acquired by the Company or to secure obligations incurred in
consideration of non-

<PAGE>

compete agreements, PROVIDED that (1) the security for such Indebtedness
shall extend only to the property or assets so acquired, (2) such
obligation does not exceed 85% of the fair market value of such property or
asset or 35% in the case of non-compete obligations (each as determined in
good faith by the board of directors of the Managing General Partner of the
Company) and (3) either (A) after incurring such Indebtedness, and giving
effect to the substantially concurrent retirement of any other
Indebtedness, the Company could incur at least $1 of additional
Indebtedness in compliance with the requirements set forth in clauses (i),
(ii) and (iii) of Section 10.1(f) or (B) the amount of Indebtedness
permitted under subdivision (e)(i) of this Section 10.1 is permanently
reduced by the amount of such Indebtedness.

Notwithstanding the foregoing, the aggregate principal amount of all
Indebtedness of all Restricted Subsidiaries at any time outstanding (other than
Indebtedness permitted by Section 10.1(o) (but only to the extent such
Guarantees are in favor of the holders of Parity Debt) shall not exceed $10
million. For the purpose of this Section 10.1, any Person becoming a Restricted
Subsidiary after the date of this Agreement shall be deemed to have become
liable with respect to all of its then outstanding Indebtedness at the time it
becomes a Restricted Subsidiary, and any Person extending, renewing or refunding
any Indebtedness shall be deemed to have become liable with respect to such
Indebtedness at the time of such extension, renewal or refunding. The Company
or any Restricted Subsidiary shall be deemed to have become liable with respect
to any Indebtedness secured by any real property acquired by the Company or such
Restricted Subsidiary, as the case may be, at the time of such acquisition. Any
amendment of the terms of this Agreement required by clause (ii) of the proviso
to Section 10.1(b) shall provide that such amendment shall only be effective
until the date the Indebtedness (the incurrence of which required the amendment
of this Agreement) is paid in full and all commitments to lend and letters of
credit outstanding under such facility are canceled or terminated. The Company
shall provide written notice to each holder of the repayment in full in cash of
such Indebtedness and the cancellation of all commitments and letters of credit
pursuant to any such facility, which notice shall provide that the amendments to
this Agreement required by clause (ii) of the proviso to Section 10.1(b) with
respect to such facility, are no longer effective.

10.2. LIENS, ETC. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly create, incur, assume or permit
to exist any Lien on or with respect to any property or asset (including any
document or instrument in re-

<PAGE>

spect of goods or accounts receivable) of the Company or any Restricted
Subsidiary, whether now owned or held or hereafter acquired, or any income or
profits therefrom (whether or not provision is made for the equal and ratable
securing of the Notes in accordance with the provisions of Section 10.16),
except:

(a) Liens for taxes, assessments or other governmental charges the
payment of which is not at the time required by Section 10.9;

(b) Liens of landlords and carriers, vendors, warehousemen,
mechanics, materialmen, repairmen and other like Liens incurred in the
ordinary course of business for sums not yet due or the payment of which is
not at the time required by Section 10.9, in each case not incurred or made
in connection with the borrowing of money, the obtaining of advances or
credit or the payment of the deferred purchase price of property;

(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (i) in connection with
workers' compensation, unemployment insurance, old age pension, retiree
health benefits and other types of social security, or (ii) to secure (or
to obtain letters of credit that secure) the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, performance
bonds, purchase, construction or sales contracts and other similar
obligations, in each case not incurred or made in connection with the
borrowing of money, the obtaining of advances or credit or the payment of
the deferred purchase price of property;

(d) any attachment or judgment Lien, unless the judgment it secures
shall not, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within 60 days after expiration of any such stay;

(e) leases or subleases granted to others, zoning restrictions,
easements, licenses, reservations, rights-of-way, restrictions on the use
of property or irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under a
landlord or owner of the leased property with or without the consent of the
lessee) and other similar charges or

<PAGE>

encumbrances, which do not materially interfere with the ordinary conduct
of the business of the Company or any Restricted Subsidiary;

(f) Liens on property or assets of any Restricted Subsidiary
securing Indebtedness of such Restricted Subsidiary owing to the Company or
any other Restricted Subsidiary;

(g) Liens existing on the Assets at the time of the acquisition
thereof by the Company and described in Schedule 10.2;

(h) Liens created by any of the Security Documents securing
Indebtedness incurred in accordance with Section 10.1(a) or
Section 10.1(e);

(i) Liens created by any of the Security Documents securing
Indebtedness incurred in accordance with Section 10.1(b), 10.1(f) or
10.1(m), PROVIDED that (1) such Liens are effected through an amendment to
the Security Documents to the extent necessary to provide the holders of
such Indebtedness equal and ratable security in the property and assets
subject to the Security Documents with the holders of the Notes and of
other Indebtedness secured under the Security Documents as provided in
Section 10.1(b), 10.1(f) or 10.1(m), (2) the Security Documents are amended
to the extent necessary to extend the Lien thereof to any property or
assets acquired or otherwise financed with the proceeds of such
Indebtedness, (3) the Company has delivered to the Trustee an Officers'
Certificate demonstrating that the principal amount of such Indebtedness
does not exceed the lesser of the cost to the Company of such property or
assets and the fair market value of such property or assets (as determined
in good faith by the Managing General Partner of the Company), that such
incurrence of Indebtedness pursuant to Section 10.1(b), 10.1(f) or 10.1(m),
as the case may be, complies in all respects with the requirements of such
Section and that the amendments to the Security Documents required by this
Section 10.2(i) and the filing and recordation of such amendments and
related supplements will not have a Material Adverse Effect, and (4) the
Company has delivered to the Trustee an opinion of counsel reasonably
satisfactory to the Trustee to the effect that the Lien of the Security
Documents has attached and is perfected with respect to such additional
property and assets;

(j) Liens existing on any property of any Person at the time it
becomes a Restricted Subsidiary, or existing prior to the time of
acquisition (and not created

<PAGE>

in anticipation of such acquisition) upon any property acquired by the
Company or any Restricted Subsidiary through purchase, merger or
consolidation or otherwise, whether or not assumed by the Company or such
Restricted Subsidiary, or created to secure Indebtedness incurred under
Section 10.1(f) to pay all or any part of the purchase price ("Purchase
Money Lien") of property acquired by the Company or a Restricted Subsidiary
or to pay the cost of an improvement (other than improvements to property
subject to the Lien of the Security Documents), PROVIDED that (i) any such
Lien shall be confined solely to the item or items of property so acquired
and, if required by the terms of the instrument originally creating such
Lien, other property which is an improvement to or is acquired for specific
use in connection with such acquired property, (ii) such item or items of
property so acquired (other than property (which may include stock or other
equity interests) subject to Liens existing prior to the time of
acquisition and not created in anticipation of such acquisition) are not
required to become part of the Collateral under the terms of the Security
Documents, (iii) the principal amount of the Indebtedness secured by any
such Lien shall at no time exceed an amount equal to the lesser of (A) the
cost of such property to the Company or such Restricted Subsidiary, as the
case may be, and (B) the fair market value of such property (as determined
in good faith by the Managing General Partner) at the time such Person
owning such property becomes a Restricted Subsidiary or at the time of such
acquisition by the Company or such Restricted Subsidiary, as the case may
be, (iv) any such Purchase Money Lien shall be created not later than 90
days after, in the case of property, its acquisition, or, in the case of
improvements, their completion and (v) any such Lien (other than a Purchase
Money Lien) shall not have been created or assumed in contemplation of such
Person's becoming a Restricted Subsidiary or such acquisition of property
by the Company or any Subsidiary;

(k) Liens in amounts not exceeding $500,000 incurred, required or
provided for under state law in connection with self-insurance
arrangements;

(l) Liens arising from or constituting Permitted Encumbrances;

(m) any Lien securing Indebtedness referred to in Section 10.1(i),
(j) or (l) renewing or extending any Lien permitted by the foregoing
subdivisions of this Section 10.2, PROVIDED that (i) the Indebtedness
secured by any such Lien shall not exceed the principal amount of such
Indebtedness outstanding (including any exposure under letters of credit
and any unfunded commitments) immediately prior to

<PAGE>

the renewal or extension of such Lien, (ii) no assets encumbered by any such
Lien other than the assets encumbered immediately prior to such renewal or
extension shall be encumbered thereby or with respect to any Indebtedness
extending, renewing, refunding or refinancing any Indebtedness secured pursuant
to the Security Documents, the assets specified therein and (iii) the maturity
date of the Indebtedness secured by any such Lien shall not be sooner than the
maturity date of such Indebtedness outstanding immediately prior to the renewal
or extension of such Lien;

(n) any Lien securing Indebtedness incurred in accordance with
Section 10.1(n), Section 10.1 (p), Section 10.1(q) or Section 10.1(r);

(o) any Lien arising from the action of collecting banks; and

(p) those Liens described on Schedule 10.2.

10.3. INVESTMENTS, GUARANTIES, ETC. The Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly (i) make or own
any Investment in any Person, or (ii) create or become liable with respect to
any Guaranty, except:

(a) the Company or any Restricted Subsidiary may make and own
Investments in

(1) marketable obligations issued or unconditionally
guaranteed by the United States of America, or issued by any agency
thereof and backed by the full faith and credit of the United States
of America in each case maturing within one year from the date of
acquisition thereof,

(2) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year
from the date of acquisition thereof and having as at any date of
determination the highest rating obtainable from either Standard &
Poor's Ratings Group or Moody's Investors Service, Inc.,

(3) commercial paper maturing no more than 270 days from
the date of creation thereof and having as at any date of
determination one of the two

<PAGE>

highest ratings obtainable from either Standard & Poor's Ratings
Group or Moody's Investors Service, Inc.,

(4) certificates of deposit maturing one year or less from
the date of acquisition thereof issued by commercial banks
incorporated under the laws of the United States of America or any
state thereof or the District of Columbia or Canada, (A) the
commercial paper or other short-term unsecured debt obligations of
which are rated either A-1 or better (or comparably if the rating
system is changed) by Standard & Poor's Ratings Group or Prime-1 or
better (or comparably if the rating system is changed) by Moody's
Investors Service, Inc. or (B) the long-term debt obligations of which
are rated either AA- or better (or comparably if the rating system is
changed) by Standard & Poor's Ratings Group or Aa3 or better (or
comparably if the rating system is changed) by Moody's Investors
Service, Inc. ("Permitted Banks"), or by any bank party to the Bank
Credit Facilities,

(5) Eurodollar time deposits having a maturity of less than
270 days from the date of acquisition thereof purchased directly from
any Permitted Bank,

(6) bankers' acceptances eligible for rediscount under
requirements of The Board of Governors of the Federal Reserve System
and accepted by Permitted Banks, and

(7) obligations of the type described in clause (1), (2),
(3) or (4) above purchased from a securities dealer designated as a
"primary dealer" by the Federal Reserve Bank of New York or from a
Permitted Bank as counterparty to a written repurchase agreement
obligating such counterparty to repurchase such obligations not later
than 14 days after the purchase thereof and which provides that the
obligations which are the subject thereof are held for the benefit of
the Company or a Restricted Subsidiary by a custodian which is a
Permitted Bank;

(b) the Company and any Restricted Subsidiary may make and own
Investments in any Restricted Subsidiary or Investments in capital stock
of, or other equity interests in, any Person which as a result of such
Investment becomes a Restricted Subsidiary, and any Qualified Restricted
Subsidiary may make and permit to be outstanding Investments in the Company
and may create or become

<PAGE>

liable with respect to the Subsidiary Guarantee Agreement in respect of the
Company's obligations under the Notes or under Parity Debt;

(c) the Company or any Restricted Subsidiary may make and own
Investments (other than those included in subdivision (b) above) in the
capital stock of, or joint venture, partnership or other equity interests
in, or the contributions to capital in the ordinary course of business of,
any Unrestricted Subsidiary if immediately after giving effect to the
making of any such Investment, (A) the aggregate amount of all such
Investments made and outstanding pursuant to this subdivision (c) during
the period from the date of this Agreement to and including the date of
determination shall not at any time exceed 20% of the Consolidated Net
Worth of the Company and (B) the aggregate amount of all Investments made
and outstanding pursuant to this subdivision (c) as at the end of any
fiscal quarter of the Company shall not exceed by more than $15,000,000 the
amount of such Investments outstanding as at the end of the corresponding
fiscal quarter of the immediately preceding fiscal year of the Company, and
in the case of both clauses (A) and (B) of this subdivision (c), (i) the
amounts specified therein may be increased by an amount equal to the net
cash proceeds received by the Company from the Managing General Partner or
from the Public Partnership as a capital contribution or as consideration
for the issuance by the Company of additional partnership interests for the
sole purpose of making an Investment in an Unrestricted Subsidiary, and
(ii) net of cash distributions received from all Unrestricted Subsidiaries
for such period;

(d) the Company or any Restricted Subsidiary may make and own
Investments (x) constituting trade credits or advances to any Person
incurred in the ordinary course of business, (y) arising out of loans and
advances to officers, directors and employees for travel, entertainment and
relocation expenses, in each case incurred in the ordinary course of
business or (z) acquired by reason of the exercise of customary creditors'
rights upon default or pursuant to the bankruptcy, insolvency or
reorganization of a debtor;

(e) the Company or any Restricted Subsidiary may create or become
liable with respect to any Guaranty constituting an obligation, warranty or
indemnity, not guaranteeing Indebtedness of any Person, which is undertaken
or made in the ordinary course of business;

<PAGE>

(f) the Company or any Restricted Subsidiary may create and become
liable with respect to any Interest Rate Agreements; and

(g) the Company may create and become liable with respect to
Commodity Hedging Agreements.

10.4. RESTRICTED PAYMENTS. The Company will not, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted
Payment (other than payments needed to pay pass through taxes), except that
(a) the Company may declare, order, pay, make or set apart once during each
calendar quarter a Restricted Payment in cash if (i) such Restricted Payment is
in an amount not exceeding Available Cash for the immediately preceding calendar
quarter, (ii) prior to any such proposed action no condition or event shall
exist which constitutes a Potential Event of Default under Section 11(b) or an
Event of Default and immediately after giving effect to any such proposed
Restricted Payment no condition or event shall exist which constitutes a
Potential Event of Default or an Event of Default, (iii) the ratio of
Consolidated Cash Flow to Consolidated Interest Expense, as of the date of such
action, is greater than 1.75 to 1.00 (the "Coverage Test") and (iv) the Company
shall have given to each holder of a Note written notice thereof on the date
such Restricted Payment is declared, which date shall be within 50 days of the
date on which the Coverage Test was satisfied and at least 10 days prior to the
date such Restricted Payment is made and (b) any Subsidiary may make, pay or set
apart dividends and distributions so long as such dividends or distributions are
made, paid or set apart for each holder of such Person's capital stock or other
equity on a pro-rata basis. Upon satisfaction of the Coverage Test at the time
of declaration, the Company may make such Restricted Payment within 60 days
thereafter, and, notwithstanding any other provision of this Section 10.4, the
Coverage Test shall not be applied to any Restricted Payment so made which
satisfied the Coverage Test on the date of declaration thereof. The Company
will not, in any event, directly or indirectly declare, order, pay or make any
Restricted Payment except in cash.

10.5. TRANSACTIONS WITH AFFILIATES. Except for the transactions or
conduct effected pursuant to the Operative Agreements as in effect on the date
of the Closing or any other transactions or conduct described in or contemplated
by the Registration Statement or listed on Schedule 10.5, the Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly, engage
in any transaction with any Affiliate of the Company, including, without
limitation, the purchase, sale or exchange

<PAGE>

of assets or the rendering of any service, to the Company's or such Restricted
Subsidiary's business except upon fair and reasonable terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
those which might be obtained in an arm's-length transaction at the time such
transaction is agreed upon from Persons which are not such an Affiliate,
PROVIDED that the foregoing limitations and restrictions shall not apply to any
transaction between the Company and any Restricted Subsidiary or between
Restricted Subsidiaries or to loans and advances to officers, or directors and
employees made in the ordinary course of business.

10.6. SUBSIDIARY STOCK AND INDEBTEDNESS. The Company will not:

(a) directly or indirectly sell, assign, pledge or otherwise
dispose of any Indebtedness of or any shares of stock or similar interests
of (or warrants, rights or options to acquire stock or similar interests
of) any Subsidiary, except to a Restricted Subsidiary;

(b) permit any Restricted Subsidiary directly or indirectly to
sell, assign, pledge or otherwise dispose of any Indebtedness of (i) the
Company or (ii) any other Restricted Subsidiary, or any shares of stock or
similar interests of (or warrants, rights or options to acquire stock or
similar interests of) any other Subsidiary, except to, in the case of
clause (i), the Company or, in all other cases, [the Company or] a
Restricted Subsidiary;

(c) permit any Restricted Subsidiary to have outstanding any shares
of stock or similar interests which are preferred over any other shares of
stock or similar interests owned by the Company unless such shares of
preferred stock or similar interests are owned by the Company; or

(d) permit any Restricted Subsidiary directly or indirectly to
issue or sell (including, without limitation, in connection with a merger
or consolidation of a Restricted Subsidiary otherwise permitted by
Section 10.7(a)) any shares of its stock or similar interests (or warrants,
rights or options to acquire its stock or similar interests) except to the
Company or a Restricted Subsidiary;

PROVIDED that, (i) any Restricted Subsidiary may sell, assign or otherwise
dispose of Indebtedness of the Company or a Restricted Subsidiary if, assuming
such Indebtedness were incurred immediately after such sale, assignment or
disposition, such Indebtedness

<PAGE>

would be permitted under Section 10.1 (and if such Indebtedness is secured, such
Lien would be permitted pursuant to Section 10.2) or (ii) subject to compliance
with Section 10.7(c), all Indebtedness and shares of stock or partnership
interests of any Restricted Subsidiary owned by the Company or by another
Restricted Subsidiary may be simultaneously sold as an entirety for
consideration at least equal to the fair value thereof (as determined in good
faith by the Managing General Partner) at the time of such sale if such
Restricted Subsidiary does not at the time own (A) any Indebtedness of the
Company (other than Indebtedness which, if incurred immediately after such
transaction, would be permitted under Section 10.1) or (B) any Indebtedness,
stock or other interest in any other Restricted Subsidiary which is not also
being simultaneously sold as an entirety in compliance with this proviso or
Section 10.7(b)(ii).

10.7. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. The Company will
not, and will not permit any Restricted Subsidiary to, directly or indirectly,

(a) consolidate with or merge into any other Person or permit any
other Person to consolidate with or merge into it, except that:

(i) any Restricted Subsidiary may consolidate with or merge
into the Company or a Restricted Subsidiary if, in the case of a
consolidation with or merger into the Company, the Company shall be
the surviving Person and if, immediately after giving effect to such
transaction, no condition or event shall exist which constitutes an
Event of Default or Potential Event of Default; and

(ii) any entity (other than a Restricted Subsidiary) may
consolidate with or merge into the Company or a Restricted Subsidiary
if the Company or a Restricted Subsidiary, as the case may be, shall
be the surviving Person and if, immediately after giving effect to
such transaction, (w) the Company (1) shall not have a Consolidated
Net Worth (but without giving effect to any write-up in assets or
amounts attributable to goodwill pursuant to purchase accounting
methods) of less than the Consolidated Net Worth of the Company
immediately prior to the effectiveness of such transaction, (2) shall
not be liable with respect to any Indebtedness or allow its property
to be subject to any Lien which it could not become liable with
respect to or allow its property to become subject to under this
Agreement on the date of such transaction, and (3) could incur, if the
consolidating or merging entity has outstanding Indebtedness, at least
$1 of additional Indebtedness in compliance with Sec-

<PAGE>

tion 10.1(f) after giving effect to such transaction, (x) substantially all
of the assets of such entity shall be located and substantially all of its
business shall be conducted within the United States of America, and (y) no
condition or event shall exist which constitutes an Event of Default or
Potential Event of Default; and

(iii) the Company may consolidate with or merge into any
other entity if (v) the surviving entity is a corporation, limited
partnership, limited liability company or business trust organized and
existing under the laws of the United States of America or a state
thereof or the District of Columbia, with substantially all of its
properties located and its business conducted within the United States
of America, (w) such corporation, limited partnership, limited
liability company or business trust expressly and unconditionally
assumes the obligations of the Company under this Agreement and each
of the other Operative Agreements and delivers to each holder of a
Note at the time outstanding in connection with such assumption an
opinion of counsel reasonably satisfactory to the Required Holders
with respect to such matters incident to such assumption as may be
reasonably requested by such holders, including, without limitation,
as to the due authorization and execution of the related agreement of
assumption and the enforceability of such agreement against such
corporation, limited partnership, limited liability company or
business trust, (x) immediately after giving effect to such
transaction, such corporation, limited partnership, limited liability
company or business trust (1) shall not have a Consolidated Net Worth
(but without giving effect to any write-up in assets or amounts
attributable to goodwill pursuant to purchase accounting methods) of
less than the Consolidated Net Worth of the Company immediately prior
to the effectiveness of such transaction, (2) shall not be liable with
respect to any Indebtedness or allow its property to be subject to any
Lien which it could not become liable with respect to or allow its
property to become subject to under this Agreement on the date of such
transaction and (3) could incur, if the consolidating or merging
entity had outstanding Indebtedness, at least $1 of additional
Indebtedness in compliance with Section 10.1(f) after giving effect to
such transaction, and (y) immediately after giving effect to such
transaction no condition or event shall exist which constitutes an
Event of Default or a Potential Event of Default; or

<PAGE>

(b) sell, lease, abandon or otherwise dispose of all or
substantially all its assets, except that:

(i) any Restricted Subsidiary may sell, lease or otherwise
dispose of all or substantially all its assets to the Company or to a
Restricted Subsidiary; and

(ii) the Company may sell, lease or otherwise dispose of all
or substantially all its assets to any corporation, limited
partnership, limited liability company or business trust into which
the Company could be consolidated or merged in compliance with
clause (a)(iii) of this Section 10.7, PROVIDED that each of the
conditions set forth in such subdivision (a)(iii) shall have been
fulfilled; or

(c) sell, lease, abandon or otherwise dispose of any property to
any Person other than the Company or any Restricted Subsidiary unless
(except for (x) sales, leases or other dispositions of property in
transactions permitted by the foregoing clauses (a) or (b) of this
Section 10.7, and (y) sales of inventory in the ordinary course of
business) immediately before and after giving effect to such transaction,
no Event of Default or Potential Event of Default shall exist or be
continuing and:

(i) at least 70% or more of the consideration (or 25% or
more in the event such consideration is less than $1,000,000) therefor
shall be in the form of cash consideration or marketable securities,
PROVIDED, that the amount of (A) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet or
in the notes thereto) of the Company or any Restricted Subsidiary
(other than liabilities that are by their terms subordinated in right
of payment to the Notes) that are assumed by the transferee of any
such assets and (B) any notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are promptly converted into cash (to the extent of the cash received),
shall be deemed to be cash for the purposes of this
Section 10.7(c)(i), and

(ii) either

(A) the aggregate net after-tax proceeds of all such
dispositions by the Company and all Restricted Subsidiaries
during the current fiscal year (including all proceeds under
title insurance policies with respect to real

<PAGE>

property and all net insurance proceeds, self-insurance amounts
and net awards with respect to property lost as a result of
damage, destruction or a taking which have not been applied to
the cost of repairing or replacing any damaged or destroyed
assets ), less the amount of all such net after-tax proceeds
previously applied in accordance with subdivision (ii)(B) of
this Section 10.7(c) and the amount of such net after-tax
proceeds equal to the purchase price of any assets acquired to
the extent that (1) such assets were acquired within 90 days
prior to the date of such disposal of property, (2) the
purchase price of such assets was not previously applied to
reduce the amount of net after-tax proceeds of property
disposed of under this Section 10.7(c), (3) such assets were
acquired for subsequent replacement of the property so disposed
of or may be productively used in the United States of America
in the conduct of the Business, (4) if the assets so disposed
were or should have been, then such newly acquired assets shall
be subject to the Lien of the Security Documents, and (5) to
the extent such assets were acquired (in whole or in part) with
borrowed money, such borrowing has been repaid in full, (x)
shall not exceed $7,500,000 during such fiscal year and
(y) when aggregated with such net after-tax proceeds of all
prior transactions under this Section 10.7(c), shall not exceed
$30,000,000; or

(B) in the event that such net after-tax proceeds (less the
amount thereof previously applied in accordance with this
subdivision (ii)(B) and the amount thereof equal to the
purchase price of any assets acquired to the extent that
(1) such assets were acquired within 90 days prior to the date
of such disposal of property, (2) the purchase price of such
assets was not previously applied to reduce the amount of net
after-tax proceeds of property disposed of under this Section
10.7(c), (3) such assets were acquired for subsequent
replacement of the property so disposed of or may be
productively used in the United States of America in the
conduct of the Business, (4) if the assets so disposed were or
should have been, then such newly acquired assets shall be
subject to the Lien of the Security Documents, and (5) to the
extent such assets were acquired (in whole or in part) with
borrowed money, such borrowing has been repaid in full) during
the current fiscal year exceed $7,500,000 or, when aggregated
with such net after-tax proceeds of all prior transactions
under this Section 10.7(c), exceed $30,000,000 (the larger
amount of such

<PAGE>

excess net after-tax proceeds actually realized being herein
called "Excess Proceeds"), the Company shall promptly pay over
to the Trustee under the Trust Agreement such Excess Proceeds
not at the time held by the Trustee for application by the
Trustee (x) within 365 days of the date of the disposal or loss
of property to the acquisition of assets in replacement of the
property so disposed of or lost or of assets which may be used
in the United States of America in the conduct of the Business
(and if the assets so disposed were or should have been, then
such newly acquired assets shall be subjected to the Lien of
the Security Documents) or to the cost of repairing or
replacing any damaged or destroyed assets, or (y) to the extent
of Excess Proceeds not applied pursuant to the immediately
preceding clause (x), to the payment and/or prepayment of the
Notes and Parity Debt, if any, pursuant to Section 9.1 and/or
9.4(a), all as provided in Section 4(d) of the Trust Agreement
and such Section 9.1 and/or 9.4(a), and the Trustee shall have
received an Officers' Certificate from the Managing General
Partner of the Company certifying that the consideration
received for such property is at least equal to its fair value
(as determined in good faith by the Managing General Partner of
the Company) and that such consideration has been applied in
accordance with the terms of this Agreement.

Notwithstanding the foregoing, the Company and any Restricted Subsidiary
may sell or dispose of (i) real property assets sold or disposed of within 12
months of the acquisition of such assets, and (ii) all other assets sold or
disposed of within 6 months of the acquisition of such assets, in each case
constituting a portion of an acquired business, if (y) such assets are
specifically designated to the holders of any Notes in writing at the time of
such acquisition or within 30 Business Days thereafter as assets to be disposed
of, and (z) the Trustee shall have received an Officers' Certificate from the
Managing General Partner of the Company certifying that the consideration
received for such property is at least equal to its fair value (as determined in
good faith by the Managing General Partner of the Company). Such sales under
this paragraph will not be applied towards the annual or cumulative limitations
in subdivision (c) of this Section 10.7. In addition, notwithstanding the
foregoing, the Company may, at any time, exchange assets for other like assets
which may be used in the conduct of the Business, PROVIDED (1) the fair value of
the assets so acquired is substantially equivalent to the fair value of the
assets so exchanged (as determined in good faith by the Managing General Partner
of the Company), (2) if the assets exchanged were or should

<PAGE>

have been, then such newly acquired assets shall be subject to the Lien of the
Security Documents and (3) the total value of the assets so exchanged in any
twelve month period shall not in the aggregate exceed 15% of the total assets of
the Company. The holders of Notes agree to take all actions reasonably
requested by the Company (and at the expense of the Company) to cause
dispositions of any Collateral made in compliance with this Section 10.7 to be
made free and clear of the Liens created by the Security Documents.

10.8. PARTNERSHIP OR CORPORATE EXISTENCE, ETC.; BUSINESS. (a) (i)
The Company will at all times preserve and keep in full force and effect its
partnership existence and (subject to the provisions of subdivision (b) of this
Section 10.8) its status as a partnership not taxable as a corporation for
federal income tax purposes; (ii) the Company will cause each Restricted
Subsidiary to keep in full force and effect its partnership or corporate
existence; and (iii) the Company will, and will cause each Restricted Subsidiary
to, at all times preserve and keep in full force and effect all of its material
rights and franchises (in each case except as otherwise specifically permitted
in Sections 10.6 and 10.7; PROVIDED, HOWEVER, that notwithstanding the preceding
provisions of this Section 10.8 the partnership or corporate existence of any
Restricted Subsidiary, and any right or franchise of the Company or any
Restricted Subsidiary, may be terminated if, in the good faith judgment of the
Managing General Partner, such termination is in the best interest of the
Company, is not disadvantageous to the holders of the Notes in any material
respect and would not have a Material Adverse Effect).

(b) The Company shall not be obligated to preserve its status as a
partnership not taxable as a corporation for federal income tax purposes if
(i) the Company's failure to preserve such status shall be the result of an
amendment to the tax laws enacted by the Congress of the United States and
(ii) after giving effect to the loss of such status the ratio of Consolidated
Cash Flow to Maximum Consolidated Pro Forma Debt Service, determined as of the
date of the loss of such status, would be greater than 1.1 to 1.0, assuming, for
the purposes of the computation of Consolidated Cash Flow, that Consolidated
Cash Flow would be reduced by taxes at the applicable tax rate of the Company
for such period had the Company been taxable as a corporation.

(c) The Company will not, and will not permit any Restricted
Subsidiary to, engage in any material lines of business other than the Business
as described in the

<PAGE>

Registration Statement and other activities incidental or related to the
Business; PROVIDED that, the Company will not permit Cornerstone Services
Corporation to exist for any purpose, or to carry on any business, other than
the ownership and operation of the Service Assets (as defined in the Conveyance
Agreements) and other assets of that type.

10.9. PAYMENT OF TAXES AND CLAIMS. The Company will, and will cause
each Subsidiary to, pay all taxes, assessments and other governmental charges or
levies imposed upon it or any of its properties or assets or in respect of any
of its franchises, business, income or profits when the same become due and
payable, but in any event before any penalty or interest accrues thereon, and
all claims (including, without limitation, claims for labor, services, materials
and supplies) for sums which have become due and payable and which by law have
or might become a Lien upon any of its properties or assets, and promptly
reimburse the holders of the Notes for any such taxes, assessments, charges or
claims paid by them, PROVIDED that no such tax, assessment, charge or claim need
be paid or reimbursed if it is being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted and if such reserves or
other appropriate provision, if any, as shall be required by GAAP shall have
been made therefor and be adequate in the good faith judgment of the Managing
General Partner.

10.10. COMPLIANCE WITH ERISA. The Company will not, and will not
permit any Subsidiary or Related Person of the Company to:

(a) (i) engage in any transaction in connection with which the
Company or any Subsidiary could be subject to either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Code, (ii) terminate (within the meaning of Title IV of
ERISA) or withdraw from any Plan in a manner, or take, or fail to take, any
other action with respect to any Plan (including, without limitation, a
substantial cessation of operations within the meaning of Section 4062(e)
of ERISA), (iii) establish, maintain, contribute to or become obligated to
contribute to any welfare benefit plan (as defined in Section 3(1) of
ERISA) or other welfare benefit arrangement which provides post-employment
benefits, which cannot be unilaterally terminated by the Company, (iv) fail
to make full payment when due of all amounts which, under the provisions of
any Plan or applicable law, the Company or any Subsidiary or Related Person
of the Company is required to pay as contributions or permit to exist any
material accumulated funding de-

<PAGE>

ficiency, whether or not waived, with respect to any Plan or (v) engage in
any transaction in connection with which the Company, any Subsidiary or any
Related Person of the Company could be subject to liability pursuant to
Section 4069(a) or 4212(c) of ERISA, if any such event, condition or
transaction described in clauses (i) through (v) above, either individually
or together with any other such event, condition or transaction, could
reasonably be expected to result in (x) the imposition of a Lien in a
material amount on any assets or property of the Company or any Subsidiary
of the Company pursuant to Section 302(f) of ERISA or Section 412(n) of the
Code or (y) any liability to the Company, any Subsidiary of the Company or
any Related Person of the Company, which liability could have a Material
Adverse Effect; or

(b) as of any date of determination (i) permit the amount of
unfunded benefit liabilities under any Plan (other than a Multiemployer
Plan) maintained at such time by the Company or any Subsidiary or Related
Persons of the Company to exceed the current value of the assets of any
such Plan by more than $1,000,000 or (ii) permit the aggregate liability
incurred by the Company and any Subsidiary of the Company and Related
Persons of the Company pursuant to Title IV of ERISA with respect to one or
more terminations of, or one or more complete or partial withdrawals from,
any Plan to exceed $1,000,000.

As used in this Section 10.10, the term "accumulated funding deficiency" has the
meaning specified in Section 302 of ERISA and Section 412 of the Code, the term
"current value" has the meaning specified in Section 3 of ERISA and the terms
"benefit liabilities" and "amount of unfunded benefit liabilities" have the
meanings specified in Section 4001 of ERISA.

10.11. MAINTENANCE OF PROPERTIES; INSURANCE. (a) The Company will
maintain or cause to be maintained in working order and condition, in accordance
with normal industry standards and as otherwise required by the Security
Documents, all material properties used or useful in the business of the Company
and the Restricted Subsidiaries and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof.

(b) The Company will, and will cause each of the Restricted
Subsidiaries to, keep its insurable properties adequately insured at all times
by Permitted Insurers; maintain such other insurance, to such extent and against
such risks, including fire and

<PAGE>

other risks insured against by extended coverage, as is customary with companies
in the same or similar businesses, including public liability insurance against
claims for personal injury or death or property damage occurring upon, in, about
or in connection with the use of any properties owned, occupied or controlled by
it; maintain such other insurance policy as may be required by law or any
Security Document; and cause each such insurance policy to name the Trustee, as
an additional insured or loss payee thereunder. The Company may maintain a
system of self-insurance in an amount customary for companies with established
reputations engaged in the same or similar business and owning similar
properties as the Company. The Company will permit the holders of the Notes and
an insurance consultant retained by the Required Holders, at the expense of the
Company, to review the insurance policies maintained by the Company on an annual
basis and will implement any changes to such policies reasonably recommended by
such consultant if available on a commercially reasonable basis.

10.12. OPERATIVE AGREEMENTS; SECURITY DOCUMENTS. The Company will,
and will cause each Restricted Subsidiary to, perform and comply with all of its
obligations under each of the Operative Agreements to which it is a party, will
enforce each such Operative Agreement against each other party thereto and will
not accept the termination of any such Operative Agreement, unless the taking of
or omitting to take any such action would not have a Material Adverse Effect and
will not amend, modify or supplement any Operative Agreement without the prior
written consent of the Required Holders (or with respect to this Agreement as
specified in Section 18), PROVIDED that (i) the MLP Agreement and the
Partnership Agreement (other than [Sections 4.5, 6.3, and 7.5(a)] of the
Partnership Agreement the amendment of which requires the consent of the
Required Holders) may be amended, modified or supplemented without the prior
written consent of the Required Holders if such amendment, modification or
supplement would not have a Material Adverse Effect and the Company shall have
delivered to each holder of any Notes a copy of such proposed amendment,
modification or supplement together with an Officers' Certificate describing
such proposed amendment, modification or supplement and stating that to the best
of the Company's knowledge (after due inquiry) that such proposed amendment,
modification or supplement would not have a Material Adverse Effect, (ii) the
Bank Credit Facilities may be amended, modified or supplemented without the
prior written consent of the Required Holders if such amendment, modification or
supplement may be made without the written consent of any holders of the Notes
under the Trust Agreement, and (iii) the conveyance, assignments and bills of
sale referred to in clause (b) of the definition of Conveyances

<PAGE>

Agreements may be amended, modified or supplemented so long as such amendments,
modifications or supplements do not, in the aggregate, have a Material Adverse
Effect.

10.13. CHIEF EXECUTIVE OFFICE. The Company will not move its chief
executive office and the office at which it maintains its records relating to
the transactions contemplated by this Agreement and the Security Documents
unless (a) not less than 45 days' prior written notice of its intention to do
so, clearly describing the new location, shall have been given to the Trustee
and each holder of a Note and (b) such action, reasonably satisfactory to the
Trustee and each holder of a Note, to maintain any security interest in the
property subject to the Security Documents at all times fully perfected and in
full force and effect shall have been taken.

10.14. RECORDATION; OPINIONS. (a) The Company will promptly, but in
any event within 30 days from the date of the Closing, cause to be duly
recorded, published, registered and filed all Conveyance Agreements (as set
forth in paragraph (b) of the definition of such term) and the Security
Documents (in each case, not previously recorded, published, registered or filed
in accordance with Section 4.8), in such manner and in such places as is
required by law to establish, perfect, preserve and protect the rights and first
priority security interests of the parties thereto and their respective
successors and assigns in all of the Collateral and shall deliver to the Trustee
and your special counsel within six calendar months of the date of the Closing
copies (originals with respect to certificates of title for motor vehicles and
other rolling stock) of such duly recorded, published, registered and filed
Security Documents. The Company will pay all taxes, fees and other charges then
due in connection with the execution, delivery, recording, publishing,
registration and filing of such documents or instruments in such places.

(b) The Company, at its expense, will furnish to the Trustee and
each holder of a Note during the period commencing April 1 to May 1 of the years
2001 and 2006 and at such other times as the Trustee may reasonably request in
connection with the perfection of Liens granted pursuant to the Security
Documents an opinion of counsel satisfactory to the Trustee stating that in the
opinion of such counsel such action has been taken with respect to the
recording, filing, re-recording and re-filing of the Security Documents and any
financing statements necessary to maintain the Lien or security interest created
thereby and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien or security
interest; PROVIDED, HOWEVER, that such opinion may be from counsel not located
in such

<PAGE>

jurisdiction and PROVIDED, FURTHER, that such opinion is not required to address
filings with respect to the perfection of any lien or security interest in
fixtures.

10.15. INFORMATION REQUIRED BY RULE 144A. The Company covenants that
it will, upon the prior written request of the holder of any Note, provide such
holder, and any qualified institutional buyer designated by such holder, such
financial and other information as such holder may reasonably determine to be
necessary in order to permit compliance with the information requirements of
Rule 144A under the Securities Act of 1933, as amended, in connection with the
resale of Notes, except at such times as the Company is subject to the reporting
requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended. For the purpose of this Section 10.15, the term "qualified
institutional buyer" shall have the meaning specified in Rule 144A under the
Securities Act of 1933, as amended.

10.16. COVENANT TO SECURE NOTES EQUALLY. The Company covenants that,
if it or any Restricted Subsidiary shall create or assume any Lien upon any of
its property or assets, whether now owned or hereafter acquired, other than
Liens permitted by the provisions of Section 10.2 (unless prior written consent
to the creation or assumption thereof shall have been obtained pursuant to
Section 18 and except any such Lien arising by operation of law), it will make
or cause to be made effective provision whereby the Notes will be secured by
such Lien equally and ratably with any and all other Indebtedness thereby
secured so long as any such other Indebtedness shall be so secured, it being
understood that the provision of such equal and ratable security shall not
constitute a cure or waiver of any related Event of Default.

10.17. COMPLIANCE WITH LAWS. (a) The Company will, and will cause
each Subsidiary to, comply with all applicable statutes, rules, regulations, and
orders of, and all applicable restrictions imposed by, the United States of
America, foreign countries, states, provinces and municipalities, and of or by
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, and of or by any court, arbitrator
or grand jury, in respect of the conduct of their respective businesses and the
ownership of their respective properties or business (including, without
limitation, Environmental Laws), except (I) such as are being contested in good
faith by appropriate proceedings promptly initiated and diligently conducted and
if such reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor or (ii) for any failure to so comply which,

<PAGE>

individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

(b) The Company will, and will cause each Restricted Subsidiary to,
comply with all Environmental Laws, other than noncompliance which could not
reasonably be expected to result in a Material Adverse Effect, individually or
in the aggregate, with any other liability under any Environmental Laws.

10.18. FURTHER ASSURANCES. At any time and from to time promptly, the
Company shall, at its expense, execute and deliver to each holder of a Note and
to the Trustee such further instruments and documents, and take such further
action, as the holders of the Notes may from time to time reasonably request, in
order to further carry out the intent and purpose of this Agreement and to
establish and protect the rights, interests and remedies created, or intended to
be created, in favor of the holders of the Notes, including, without limitation,
the execution, delivery and recordation and filing of security agreements and
financing statements and continuation statements under the Uniform Commercial
Code of any applicable jurisdiction.

10.19. SUBSIDIARIES. (a) The Company may designate any Restricted
Subsidiary or newly acquired or formed Subsidiary as an Unrestricted Subsidiary
or any Unrestricted Subsidiary or newly acquired or formed Subsidiary as a
Restricted Subsidiary, in each case subject to satisfaction of the following
conditions:

(i) immediately before and after giving effect to such designation
no condition or event shall exist which constitutes an Event of Default or
Potential Event of Default;

(ii) immediately after giving effect to such designation, (1) (other
than in the case of a designation of an Unrestricted Subsidiary that does
not have any Indebtedness as a Restricted Subsidiary), the Company would be
permitted to incur at least $1 of additional Indebtedness in compliance
with subdivisions (i), (ii) and (iii) of Section 10.1(f), (2) the Company
and the Restricted Subsidiaries would not be liable with respect to
Indebtedness or any Guaranty, would not own any Investments and their
property would not be subject to any Lien which is not permitted by this
Agreement and (3) substantially all of the Company's and the Restricted
Subsidiaries' assets will be located, and sub-

<PAGE>

stantially all of the Company's and the Restricted Subsidiaries' business
will be conducted, in the United States of America;

(iii) in the case of a designation as an Unrestricted Subsidiary, if
such designation (and all other prior designations of Restricted
Subsidiaries or newly acquired or formed Subsidiaries as Unrestricted
Subsidiaries during the current fiscal year) were deemed to constitute an
Investment by the Company in respect of all the assets of the Subsidiary so
designated, such Investment would be in compliance with Section 10.3(c),
with the amount of such Investment being deemed to equal the net book value
of such assets (as determined in good faith by the Managing General
Partner) in the case of a Restricted Subsidiary or the cost of acquisition
or formation in the case of a newly acquired or formed Subsidiary,
PROVIDED, that this subdivision (iii) of this Section 10.19(a) shall not
apply to an acquisition or formation by the Company or a Restricted
Subsidiary of a newly acquired or formed Unrestricted Subsidiary to the
extent such acquisition or formation (1) is funded solely by the net cash
proceeds received by the Company from the Managing General Partner or from
the Public Partnership as a capital contribution or as consideration for
the issuance by the Company of additional partnership interests or (2) the
assets involved in such acquisition are acquired in exchange for additional
partnership interests of the Company or the Public Partnership PROVIDED,
FURTHER, the net book value of the Restricted Subsidiary designated an
Unrestricted Subsidiary and the cost (other than the amount paid in cash)
of the acquisition or formation of a newly acquired or formed Subsidiary
shall be deemed proceeds from the sale of assets of the Company for
purposes of Section 10.7 and Section 9.4;

(iv) in the case of a designation of a Restricted Subsidiary as an
Unrestricted Subsidiary, such Restricted Subsidiary shall not have been an
Unrestricted Subsidiary prior to being designated a Restricted Subsidiary;
and

(v) the Company shall deliver to each holder of Notes, within 20
Business Days after any such designation, an Officers' Certificate stating
the effective date of such designation and confirming compliance with the
provisions of this Section 10.19.

<PAGE>

In the case of the designation of any Unrestricted Subsidiary as a
Restricted Subsidiary, such new Restricted Subsidiary shall be deemed to have
(a) made or acquired all Investments owned by it, and (b) incurred all
Indebtedness owing by it and all Liens to which any of its properties are
subject, on the date of such designation.

(b) The Company will cause each Qualifying Restricted Subsidiary,
at the time it is or is deemed to be designated as a Restricted Subsidiary, to
(i) become a party to the Company Security Agreement, the Trust Agreement and
the Subsidiary Guarantee Agreement by execution of a Supplemental Agreement and
(ii) enter into such documents as may be necessary or as you may request in form
and substance satisfactory to the Required Holders in order to secure such
Restricted Subsidiary's obligations under the Subsidiary Guarantee Agreement
with all or substantially all of the assets of such Restricted Subsidiary.
Prior to the designation of a Subsidiary as a Restricted Subsidiary, the Company
shall deliver to the holders of the Notes an opinion of counsel with respect to
the due execution and delivery of the Supplemental Agreement by such Subsidiary
and as to the enforceability of the Company Security Agreement, the Trust
Agreement, the Supplemental Agreement and the Subsidiary Guarantee Agreement
with respect to such Subsidiary, such opinion to be in form and substance
satisfactory to the Required Holders.

(c) The Company will not own any Unrestricted Subsidiaries other
than Wholly Owned Subsidiaries satisfying the requirements in clauses (a), (b)
and (c) of the definition of Restricted Subsidiary.

10.20. DAMAGE, DESTRUCTION, TAKING, ETC. In the event of any damage,
destruction or a taking in respect of all or a portion of the properties subject
to any of the Security Documents or in the event there shall be proceeds under
title insurance policies with respect to any real property, the Company will not
apply any net insurance proceeds or self-insurance amounts, net awards, if such
proceeds (whether resulting from one or a series of events or circumstances)
exceed $25,000,000 in the aggregate, to the cost of repairing or replacing any
damaged or destroyed assets without the prior written consent of the Required
Holders.

10.21. ACCOUNTING CHANGES. The Company will not, and will not suffer
or permit any Restricted Subsidiary to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP or
consented to by the

<PAGE>

Company's independent public accountant. The Company will, and will cause each
Restricted Subsidiary to, cause its fiscal year to end on June 30 in each year.

10.22. ACQUISITIONS. Except as otherwise permitted by Section 10.7,
the Company will not, and will not cause or permit any of the Restricted
Subsidiaries to, purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
Person, except that (a) the Company and any of the Restricted Subsidiaries may
purchase Inventory in the ordinary course of business and (b) the Company or any
Restricted Subsidiary may engage in any such acquisition if no Event of Default
or Potential Event of Default has occurred and is continuing at the time of any
such acquisition or would occur immediately after giving effect thereto.

10.23. IMPAIRMENT OF SECURITY INTERESTS. Other than with respect to
Permitted Encumbrances, the Company will not, and will not permit any of the
Restricted Subsidiaries to, take or omit to take any action, which action or
omission might or would have the result of materially impairing the security
interests in favor of the Trustee with respect to the Collateral, and the
Company will not, and will not permit any of the Restricted Subsidiaries to,
grant to any Person (other than the Trustee) any interest whatsoever in the
Collateral.

10.24. LIMITATION ON RESTRICTIONS ON SUBSIDIARY DIVIDENDS, ETC. The
Company will not, and will not cause or permit any of the Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on or in respect of its capital stock, or pay any Indebtedness
owed to the Company or any Restricted Subsidiary, (b) make loans or advances to
the Company or any Restricted Subsidiary or (c) transfer any of its properties
or assets to the Company or any Restricted Subsidiary, except for such
encumbrances or restrictions existing under or by reason of (i) customary non-
assignment provisions in any lease governing a leasehold interest or other
contract entered into in the ordinary course of business consistent with past
practices, (ii) restrictions on the payment of dividends and distributions
pursuant to the terms of Indebtedness incurred by such Restricted Subsidiary in
accordance with Section 10.1 or (iii) this Agreement or any other Operative
Agreement.

<PAGE>

10.25. NO OTHER NEGATIVE PLEDGES. The Company will not, and will not
cause or permit any of the Restricted Subsidiaries to, directly or indirectly,
enter into any agreement prohibiting the creation or assumption of any Lien upon
the properties or assets of the Company or any Restricted Subsidiary, whether
now owned or hereafter acquired, or requiring an obligation to be secured if
some other obligation is secured, except for this Agreement, the Other
Agreements, the Bank Credit Facilities and the terms of any other Indebtedness
incurred in accordance with Section 10.1 (PROVIDED that the terms of such
agreement for such other Indebtedness are no more onerous to the Company and its
Subsidiaries than those agreements relating to the Indebtedness in respect of
which Liens are permitted in accordance with Section 10.2); PROVIDED that no
such agreement shall prohibit the granting of Liens on assets of the Company and
its Restricted Subsidiaries as contemplated by the terms of this Agreement, the
Security Documents and any documents evidencing or creating any other Parity
Debt.

10.26. SALES OF RECEIVABLES. The Company will not, and will not cause
or permit any of the Restricted Subsidiaries to, sell with recourse, discount or
otherwise sell or dispose of its notes or accounts receivable, except for
(a) accounts receivable consisting of assets of an operating unit sold as a
going concern in accordance with all other provisions of this Agreement and (b)
sales of account receivables which are seriously past due and which have been
substantially written off as uncollectable or collectable only after extended
delays.

10.27. FIXED PRICE SUPPLY CONTRACTS; CERTAIN POLICIES. (a) The
Company will not, and will not permit any of the Restricted Subsidiaries to, at
any time be a party or subject to any contract for the purchase or supply by
such parties of propane or other product except where (i) the purchase price is
set with reference to a spot index or indices substantially contemporaneously
with the delivery of such product or (ii) delivery of such propane or other
product is to be made no more than one year after the purchase price is agreed
to.

(b) The Company will not amend, modify or waive the trading policy
or supply inventory position policy existing as of the date of Closing, except
that the Company may amend its supply inventory position policy such that such
policy provides that neither it nor any of the Restricted Subsidiaries will hold
on hand more than 90 days' of commodities inventory. The Company will provide
each holder of a Note with prompt written notice of any such new commodity
hedging agreement or

<PAGE>

any such change in such policy. Subject to the foregoing exception, the Company
and the Restricted Subsidiaries will comply in all material respects with such
policies at all times.

10.28. INDEPENDENT CORPORATE EXISTENCE. (a) The Company shall
maintain, and shall cause each of its Subsidiaries to maintain, books, records
and accounts that are separate from the books, records and accounts of
Northwestern, the General Partners or any of their respective Subsidiaries
(other than the Company and its Subsidiaries) such that: (i) the revenues of the
Company and its Subsidiaries will be credited to the accounts of the Company and
its Subsidiaries only; (ii) all expenses incurred by the Company and its
Subsidiaries shall be paid only from the accounts of the Company and its
Subsidiaries (other than those paid by Northwestern or the Managing General
Partner and allocated to the Company or its Subsidiaries in the manner set forth
in subdivision (c) of this Section); (iii) only officers and employees of the
Managing General Partner, the Company and its Subsidiaries in their capacity as
such shall have the authority to make disbursements with respect to the accounts
of the Company and its Subsidiaries as the case may be; (iv) there shall occur
no sharing of accounts or funds between the Company and its Subsidiaries, on the
one hand, and Northwestern, either General Partner or any of their respective
Subsidiaries (other than the Company and its Subsidiaries), on the other hand;
and (v) all cash and funds of the Company and its Subsidiaries shall be managed
separately from the cash and funds of Northwestern, either General Partner or
any of their respective Subsidiaries (other than the Company and its
Subsidiaries), and there shall not occur any commingling, including for
investment purposes, of funds or assets of the Company and its Subsidiaries with
the funds or assets of Northwestern, either General Partner or any of their
respective Subsidiaries (other than the Company and its Subsidiaries).

(b) All full-time employees, consultants and agents of the Company
and its Subsidiaries shall be compensated directly from the bank accounts of the
Managing General Partner, the Company and such Subsidiaries for services
provided by such employees, consultants and agents and, to the extent any
employee, consultant or agent is also an employee, consultant or agent of
Northwestern, either General Partner or any of their respective Subsidiaries
(other than the Company and its Subsidiaries), the compensation of such
employee, consultant or agent shall be allocated in accordance with
subdivision (c) of this Section among the Company and its Subsidiaries, on the
one hand, and Northwestern, either General Partner and any of their respective
Sub-

<PAGE>

sidiaries (other than the Company and its Subsidiaries), on the other hand, on a
basis which reasonably reflects the services rendered to the Company and its
Subsidiaries.

(c) All overhead expenses (including telephone and other utility
charges) for items shared by the Company and its Subsidiaries, on the one
hand, and Northwestern, either General Partner or any of their respective
Subsidiaries (other than the Company and its Subsidiaries), on the other hand,
shall be allocated on the basis of actual use to the extent practicable and, to
the extent such allocation is not practicable, on a basis reasonably related to
actual use.

(d) The Company shall not permit Northwestern, either General
Partner or any of their respective Subsidiaries (other than the Company and its
Subsidiaries) to be named as a loss payee or additional insured on the insurance
policy covering the property of the Company or any of its Subsidiaries, or enter
into an agreement with the holder of such policy whereby in the event of a loss
in connection with such property, proceeds are paid to Northwestern, either
General Partner and their respective Subsidiaries (other than the Company and
its Subsidiaries).

10.29. OTHER DEBT. (a) The Company shall ensure that the lenders from
time to time in respect of any Parity Debt or any other Indebtedness in the
aggregate principal amount of at least $3,750,000 outstanding as permitted by
paragraphs (b) through (f), (i) through (l) and (r) of Section 10.1, in the
documents governing the terms of such Indebtedness, (i) recognize the existence
and validity of the obligations represented by the Notes and (ii) agree to
refrain from making or asserting any claim that this Agreement or the
obligations represented by the Notes are invalid or not enforceable in
accordance with its and their terms as a result of the circumstances surrounding
the incurrence of such obligations.

(b) Each holder of Notes from time to time, as evidenced by its
acceptance of such Notes, (i) acknowledges the existence and validity of the
obligations of the Company under the Bank Credit Facilities (and any extension,
renewal, refunding or refinancing thereof permitted by Section 10.1) and (ii)
agrees to refrain from making or asserting any claim that such obligations or
the instruments governing the terms thereof are invalid or not enforceable in
accordance with its and their terms as a result of the circumstances surrounding
the incurrence of such obligations.

<PAGE>

10.30. RESTRICTION ON GENERAL PARTNER. The Managing General Partner
shall not (i) exist for any purpose or engage in any business or business
activity except (a) to serve as the Managing General Partner of the Company and
the Public Partnership, in the circumstances provided in the Partnership
Agreement and Public Partnership Agreement, and (b) to own other wholly-owned
corporate Subsidiaries, PROVIDED that, each General Partner shall have agreed
(x) that it will not guaranty or otherwise agree to be liable with respect to
any Indebtedness incurred by such Subsidiary and at the time of formation or
acquisition thereof and in connection therewith, the assets of either General
Partner are not and will not be subject to any Liens relating to and
Indebtedness or other obligations of such Subsidiaries and (y) to be bound by
the provisions of Section 10.28 (all references therein to the Company to be
deemed references to the General Partners and all references therein to
Subsidiaries to be deemed references to Subsidiaries of the General Partners)
and (z) the General Partners shall confirm with an Approved Rating Agency (as
defined below) that its rating on the Notes in effect at such time will not be
downgraded solely as a result thereof, or (ii) incur any Indebtedness or other
liabilities (other than tax liabilities). "Approved Rating Agency" shall mean
any of Fitch Investors Services, Inc., Standard & Poor's Ratings Group, Moody's
Investor Service, Inc. or Duff and Phelps Credit Rating Co.

10.31. RECORDATION OF CONVEYANCE DOCUMENTS. The Company will cause,
within 60 days subsequent to the date of Closing, the Conveyance Agreements
referred to in clause (b) of the definition of such term, and all proper
notices, statements or other instruments in respect thereof, covering all of the
Assets covered by such Conveyance Agreements to have been duly recorded,
published, registered and filed and all other actions deemed necessary by your
special counsel shall have been duly performed or taken, in such manner and in
such places as is required by applicable law (a) to convey to the Company record
and beneficial ownership of the Assets referred to in Section 5.8(c)(ii)
purported to be conveyed by such Conveyance Agreements and (b) to establish,
perfect, preserve and protect the rights and first priority Liens purported to
be granted by each such Security Document to the Trustee with respect to the
Assets referred to in Section 5.8(c)(ii) for the benefit of the holders of the
Notes and their respective successors and assigns, and the Company will cause
all taxes, fees and other charges then due in connection with the execution,
delivery, recording, publishing, registration and filing of such documents or
instruments to have been paid in full.

<PAGE>

SECTION 11. EVENTS OF DEFAULT; ACCELERATION.

If any of the following conditions or events ("Events of Default")
shall occur and be continuing:

(a) the Company shall default in the payment of any principal of or
Make Whole Amount, Premium Amount, if any, on any Note when the same
becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise; or

(b) the Company shall default in the payment of any interest on any
Note or any amount due and payable under any Operative Agreement for more
than 5 Business Days after the same becomes due and payable; or

(c) the Company or any Restricted Subsidiary shall default in the
performance of or compliance with any term contained in Section 7(f), any
of Sections 10.1 through 10.8 (other than Section 10.8(c)), inclusive, or
the Dedicated Funds are not used to repay Indebtedness as specified in the
pro forma calculations set forth in the definition of Consolidated Pro
Forma Debt Service or the definition of Maximum Consolidated Pro Forma Debt
Service, as the case may be; or

(d) the Company, either General Partner, Northwestern, the Public
Partnership or any Restricted Subsidiary shall default in the performance
of or compliance with any other term contained in this Agreement or any
other Operative Agreement and such default shall not have been remedied
within 30 Business Days after the earlier of the date such default shall
first have become actually known to any Responsible Officer of such Person
or the date written notice thereof shall have been received by the Company
from the Trustee; or

(e) any material representation or warranty made in writing by or
on behalf of the Company or any of its Affiliates in this Agreement, any
other Operative Agreement or in any instrument furnished in connection with
the transactions contemplated by this Agreement shall prove to have been
false or incorrect in any material respect on the date as of which made or
deemed made; or

[(f) (i) the Company or any Restricted Subsidiary (as principal or
guarantor or other surety) shall default (after receiving notice, if any,
and/or the expiration of

<PAGE>

any applicable grace period) in the payment of any amount of principal of
or premium or interest on the Bank Credit Facilities or any facility
extending, renewing or refinancing the Bank Credit Facilities (including
any prior extension, renewal or refinancing thereof); or any event shall
occur or condition shall exist in respect of the Bank Credit Facilities or
any facility extending, renewing or refinancing the Bank Credit Facilities,
or of any mortgage, indenture or other agreement relating to the Bank
Credit Facilities or any facility extending, renewing or refinancing the
Bank Credit Facilities the effect of which is to cause such Bank Credit
Facilities or any facility extending, renewing or refinancing the Bank
Credit Facilities (including any prior extension, renewal or refinancing
thereof), to become due before its stated maturity or before its regularly
scheduled dates of payment or to permit the holders thereof to cause the
Company or any Restricted Subsidiary to repurchase or repay such Bank
Credit Facilities or any facility extending, renewing or refinancing the
Bank Credit Facilities (including any prior extension, renewal or
refinancing thereof), and such default, event or condition shall continue
for more than the period of grace, if any, specified therein and shall not
have been waived pursuant thereto;]

(ii) the Company or any Restricted Subsidiary (as principal or
guarantor or other surety) shall default (after receiving notice, if any,
and/or the expiration of any applicable grace period) in the payment of any
amount of principal of or premium or interest on any Indebtedness in an
amount at least equal to $10,000,000 [(other than the Bank Credit
Facilities or any facility extending, renewing or refinancing the Bank
Credit Facilities and the Notes)]; or any event shall occur or condition
shall exist in respect of such other Indebtedness which is outstanding in a
principal amount of at least $10,000,000 or under any evidence of any such
Indebtedness or of any mortgage, indenture or other agreement relating to
such other Indebtedness, the effect of which is to cause such other
Indebtedness to become due before its stated maturity or before its
regularly scheduled dates of payment; or

(g) filing by or on the behalf of the Company or the Managing
General Partner of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any other
relief under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar act
or law, state or federal, now or hereafter existing ("Bankruptcy Law"), or
any action by the Company or the Managing

<PAGE>

General Partner, or consent or acquiescence to, the appointment of a
receiver, trustee or other custodian of the Company or the Managing General
Partner, or of all or a substantial part of its property; or the making by
the Company or the Managing General Partner of any assignment for the
benefit of creditors; or the admission by the Company or the Managing
General Partner of the Company in writing of its inability to pay its debts
as they become due; or

(h) filing of any involuntary petition against the Company or the
Managing General Partner in bankruptcy or seeking reorganization,
arrangement, readjustment of its debts or for any other relief under any
Bankruptcy Law and an order for relief by a court having jurisdiction in
the premises shall have been issued or entered therein; or any other
similar relief shall be granted under any applicable Federal or state law;
or a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee or other
officer having similar powers over the Company or the Managing General
Partner or over all or a part of its property shall have been entered; or
the involuntary appointment of an interim receiver, trustee or other
custodian of the Company or the Managing General Partner or of all or a
substantial part of its property; or the issuance of a warrant of
attachment, execution or similar process against any substantial part of
the property of the Company or the Managing General Partner; and
continuance of any such event for 60 consecutive days unless dismissed,
bonded to the satisfaction of the court having jurisdiction in the premises
or discharged; or

(i) filing by or on the behalf of any Restricted Subsidiary of a
voluntary petition or an answer seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any Bankruptcy Law,
or any action by any Restricted Subsidiary for, or consent or acquiescence
to, the appointment of a receiver, trustee or other custodian of such
Restricted Subsidiary or of all or a substantial part of its property; or
the making by any Restricted Subsidiary of any assignment for the benefit
of creditors; or the admission by any Restricted Subsidiary in writing of
its inability to pay its debts as they become due; or

(j) filing of any involuntary petition against any Restricted
Subsidiary in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any Bankruptcy Law
and an order for relief by a court having jurisdiction in the premises
shall have been issued or entered therein; or any

<PAGE>

other similar relief shall be granted under any applicable Federal or state
law; or a decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee or
other officer having similar powers over any Restricted Subsidiary or over
all or a part of its property shall have been entered; or the involuntary
appointment of an interim receiver, trustee or other custodian of any
Restricted Subsidiary or of all or a substantial part of its property; or
the issuance of a warrant of attachment, execution or similar process
against any substantial part of the property of any Restricted Subsidiary;
and continuance of any such event for 60 consecutive days unless dismissed,
bonded to the satisfaction of the court having jurisdiction in the premises
or discharged; or

(k) a final judgment or judgments (which is or are non-appealable
or which has or have not been stayed pending appeal or as to which all
rights to appeal have expired or been exhausted) shall be rendered against
the Company or any Restricted Subsidiary for the payment of money in excess
of $10,000,000 in the aggregate (net of any insurance coverage) and any one
of such judgments shall not be discharged or execution thereon stayed
pending appeal within 60 days after the date due, or, in the event of such
a stay, such judgment shall not be discharged within 60 days after such
stay expires or any action shall be legally taken by a judgment creditor to
levy upon the assets or properties of the Company or any Restricted
Subsidiary to enforce any such judgment; or

(l) any of the Security Documents shall at any time, for any
reason, cease in any material respect to be in full force and effect or
shall be declared to be null and void in whole or in any material part by
the final judgment (which is non-appealable or has not been stayed pending
appeal or as to which all rights to appeal have expired or been exhausted)
of any court or other governmental or regulatory authority having
jurisdiction in respect thereof, or if the validity or the enforceability
of any of the Security Documents shall be contested by or on behalf of the
Company, either General Partner, the Managing General Partner, the Public
Partnership, Northwestern or any Restricted Subsidiary, or the Company,
either General Partner, the Managing General Partner, the Public
Partnership, Northwestern or any Restricted Subsidiary shall renounce any
of the Security Documents or deny that it is bound by the terms of any of
the Security Documents; or

<PAGE>

(m) any order, judgment or decree is entered in any proceedings
against the Company decreeing a split-up of the Company, and such order,
judgment or decree shall not be dismissed or execution thereon stayed
pending appeal or review within 60 days after entry thereof, or in the
event of such a stay, such order, judgment or decree shall not be dismissed
within 60 days after such stay expires;

then, (x) upon the occurrence of any Event of Default described in subdivision
(g) or (h) of this Section 11, the unpaid principal amount of and accrued
interest on the Notes shall automatically become due and payable (without Make
Whole Amount), or, (y) upon the occurrence and continuance of any other Event of
Default, any holder or holders of more than 50% in principal amount of the Notes
at the time outstanding, may at any time (unless all defaults shall theretofore
have been remedied in accordance with the terms hereof) at its or their option,
by written notice or notices to the Company, declare all the Notes to be due and
payable, whereupon the same shall forthwith mature and become due and payable,
together with interest accrued thereon and, to the extent permitted by
applicable law, the applicable Make Whole Amount, if any, with respect to such
Notes, all without presentment, demand, protest or further notice, which are
hereby waived, PROVIDED that during the existence of an Event of Default
described in subdivision (a) or (b) (insofar as subdivision (b) relates to
interest on any Note) of this Section 11, any holder of the Notes at the time
outstanding may, at its option, by notice in writing to the Company, declare the
Notes then held by such holder to be due and payable, whereupon the Notes then
held by such holder shall forthwith mature and become due and payable, together
with interest accrued thereon and, to the extent permitted by applicable law,
the applicable Make Whole Amount with respect to such Notes.

At any time after the principal of, and interest accrued on, all the
Notes are declared due and payable, the Required Holders, by written notice to
the Company, may rescind and annul any such declaration and its consequences
(other than in respect of any Note which has been individually accelerated
pursuant to the proviso contained in the immediately preceding paragraph) if
(x) the Company has paid all overdue interest on the Notes, the principal of and
Make Whole Amount, if any, on any such Notes which have become due otherwise
than by reason of such declaration, and interest on such overdue principal and
the applicable Make Whole Amount and (to the extent permitted by applicable law)
overdue interest, at a rate per annum equal to the rate of interest stated on
the face of the Notes plus 2.0%, (y) all Events of Default, other than
nonpayment of amounts which have become due solely by reason of such

<PAGE>

declaration, and all conditions and events which constitute Events of Default or
Potential Events of Default have been cured or waived, and (z) no judgment or
decree has been entered for the payment of any monies due pursuant to the Notes
or this Agreement; but no such rescission and annulment shall extend to or
affect any subsequent Event of Default or Potential Event of Default or impair
any right consequent thereon.

SECTION 12. REMEDIES ON DEFAULT; RECOURSE, ETC.

In case any one or more Events of Default or Potential Events of
Default shall occur and be continuing, (i) the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in such Note, or for
an injunction against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by law or
otherwise, and (ii) the Trustee and the holders of the Notes may exercise any
rights or remedies in their respective capacities under the Security Documents
in accordance with the provisions thereof. In case of a default in the payment
or performance of any provision hereof or of the Notes or of the Security
Documents, the Company will pay to the holder of each Note such further amount
as shall be sufficient to cover the costs and expenses of collection, including,
without limitation, reasonable attorneys' fees, expenses and disbursements, and
any out-of-pocket costs and expenses of any such holder incurred in connection
with analyzing, evaluating, protecting, ascertaining, defending or enforcing any
of its rights as set forth herein or in any of the Security Documents. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall, to the extent permitted by law,
operate as a waiver thereof or otherwise prejudice such holder's rights, powers
or remedies. No right, power or remedy conferred by this Agreement or by any
Note upon any holder thereof shall be exclusive of any other right, power or
remedy referred to herein or therein or now or hereafter available at law, in
equity, by statute or otherwise.

SECTION 13. DEFINITIONS.

As used herein the following terms have the following respective
meanings:

<PAGE>

ADMINISTRATIVE AGENT: Bank of America National Trust and Savings
Association in its capacity as administrative agent for the Banks under the Bank
Credit Facilities, and its successors in such capacity.

AFFILIATE: as applied to any Person, any other Person directly or
indirectly controlling or controlled by or under common control with such
Person, PROVIDED that (i) for purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") as used with respect to any Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether as a general partner or through the ownership
of voting securities or by contract or otherwise, (ii) as applied to the
Company, the term "Affiliate" shall include each General Partner and the Public
Partnership, and (iii) neither you nor any other Person which is an institution
shall be deemed to be an Affiliate of the Company solely by reason of ownership
of the Notes or other securities issued in exchange for the Notes or by reason
of having the benefits of any agreements or covenants contained in this
Agreement or the other Operative Agreements.

AGREEMENT: the meaning specified in Section 1.

ASSETS: the assets conveyed to the Company pursuant to the Conveyance
Agreements.

AVAILABLE CASH: with respect to any calendar quarter, (a) the sum of
(i) all cash and cash equivalents of the Company and the Restricted Subsidiaries
on hand at the end of such quarter and (ii) all additional cash and cash
equivalents of the Company and the Restricted Subsidiaries on hand on the date
of determination of Available Cash with respect to such quarter obtained through
available borrowings under the Working Capital Facility made after the end of
such quarter (provided that such borrowings under the Working Capital Facility
shall in no event exceed available borrowings under the Working Capital
Facility as of the end of such quarter), less (b) (i) any cash reserves in such
amounts as the Managing General Partner shall determine to be necessary or
appropriate in its reasonable discretion to (A) provide for the proper conduct
of the business of the Company and the Restricted Subsidiaries (including,
without limitation, cash reserves for future capital expenditures) or
(B) provide funds for distributions under Sections [6.4(a)(i), (ii), and (iii)
or 6.4(b)(i)] of the MLP Agreement in respect of any one or more of next four
quarters or (C) comply with

<PAGE>

applicable law or any loan agreement (including this Agreement), mortgage,
security agreement, debt instrument or other agreement or obligation to which
the Company or any Restricted Subsidiary is a party or its assets are subject,
(including the payment of principal, Make Whole Amount, Premium Amount or
premium, if applicable, and interest) in respect of the Notes, (ii) all
Dedicated Funds and (iii) all amounts which a Restricted Subsidiary is
prohibited from dividending or distributing to the Company; PROVIDED that
Available Cash shall exclude without duplication (x) in each calendar quarter a
reserve equal to at least 50% of the aggregate amount of all interest payments,
except for interest payments to be made in respect of the Working Capital
Facility, in respect of all Indebtedness of the Company and the Restricted
Subsidiaries upon which interest is due semiannually or less frequently to be
made in the next quarter (assuming, in the case of Indebtedness incurred under
the Bank Credit Facilities and other Indebtedness bearing interest at
fluctuating interest rates which cannot be determined in advance, that the
interest rate in effect on the last Business Day of the immediately preceding
calendar quarter will remain in effect until such Indebtedness is due to be
paid), (y) with respect to any Indebtedness secured equally and ratably with the
Notes of which principal is payable annually, in the third calendar quarter
immediately preceding each calendar quarter in which any scheduled principal
payment is due with respect to such Notes and other Indebtedness (a "principal
payment quarter"), a reserve equal to at least 25% of the aggregate amount of
all principal to be paid in respect of such Notes and other such Indebtedness
secured equally and ratably with the Notes in such principal payment quarter; in
the second calendar quarter immediately preceding a principal payment quarter, a
reserve equal to at least 50% of the aggregate amount of all principal to be
paid in respect of such Notes and other such Indebtedness in such principal
payment quarter; and in the calendar quarter immediately preceding a principal
payment quarter, a reserve equal to at least 75% of the aggregate amount of all
principal to be paid in respect of such Notes and other such Indebtedness in
such principal payment quarter, and (z) with respect to the Notes and any other
Indebtedness secured equally and ratably with the Notes of which principal is
payable semiannually, in each calendar quarter which immediately precedes a
quarter in which principal is payable in respect of such Notes and such
Indebtedness a reserve equal to at least 50% of the aggregate amount of all
principal to be paid in respect of such Notes and other such Indebtedness in the
next quarter; PROVIDED FURTHER that the amount of such reserve specified in
clauses (y) and (z) of this definition for principal amounts to be paid shall be
reduced by the aggregate principal amount of all binding, irrevocable letters of
credit established to refinance such principal amounts.

<PAGE>

BANK CREDIT FACILITIES: that Credit Agreement, dated as of December
__, 1996, among the Company, Bank of America National Trust and Savings
Association, as administrative agent, _____________________, as syndication
agent, and the Banks, pursuant to which the Initial Acquisition Facility and the
Working Capital Facility will be made available to the Company, and any
extension, renewal, refunding or replacement thereof otherwise permitted to be
incurred and outstanding under Section 10.1.

BANKRUPTCY LAW: the meaning specified in Section 11(g).

BANKS: the financial institutions listed in the signature pages of
the Bank Credit Facilities, each assignee which becomes a lender under the Bank
Credit Facilities pursuant to the terms thereof and their respective successors.

BUSINESS: the operation by the Company and its Subsidiaries (and
prior to the consummation of the Conveyance Agreements by the General Partners
and their Affiliates) of the wholesale and retail sale, distribution and storage
of propane gas and related petroleum derivative products, the leasing of propane
storage tanks and the related retail sale of supplies and equipment, including
home appliances, and such other businesses in which the Company and its
Restricted Subsidiaries were engaged on the date of Closing as described in the
Registration Statement.

BUSINESS DAY: any day other than a Saturday, a Sunday or a day on
which commercial banks in New York City are required or authorized by law to be
closed.

CALLED PRINCIPAL: with respect to any Note, the principal of such
Note that is to be prepaid pursuant to Section 9.2, 9.3 or 9.4 or becomes or is
declared to be immediately due and payable pursuant to Section 11, as the
context requires.

CAPITAL LEASE: as applied to any Person, any lease of any property
(whether real, personal or mixed) by such Person (as lessee or guarantor or
other surety) which would, in accordance with GAAP, be required to be classified
and accounted for as a capital lease on a balance sheet of such Person.

CERCLA: the Federal Comprehensive Environmental Response,
Compensation and Liability Act, as amended.

CHANGE OF CONTROL: any of the following:

<PAGE>

(a) the liquidation or dissolution of the Managing General Partner
of the Company;

(b) any merger or consolidation of the Managing General Partner
with or into any Person if the Managing General Partner is not the surviving
entity thereof, or any sale, whether direct or indirect, of all or substantially
all of the assets of the Managing General Partner to any Person or "group" (as
used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended), other than to a Permitted Holder;

(c) any Person or "group" is or becomes, directly or indirectly,
the beneficial owner of more than 50% of the then outstanding total voting power
of all classes of stock (or other securities) of the Managing General Partner,
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the directors (or Persons performing similar functions)
of the Managing General Partner; or

(d) during any period of twelve consecutive months after the date
of Closing, individuals who at the beginning of such twelve month period (or
Persons nominated by such members of the Board of Directors of the general
partner of the Company to succeed them) constitute the Board of Directors of the
general partner of the Company cease, for any reason, to constitute a majority
of the Board of Directors of the general partner of the Company then in office;
PROVIDED it shall not be a Change of Control pursuant to paragraphs (b), (c) or
(d), if the Chief Executive Officer or Chief Financial Officer of the Company,
immediately prior to the events specified therein, serves as Chief Executive
Officer or Chief Financial Officer, after the occurrence of such an event.

(e) if Northwestern shall cease to own, directly or indirectly, in
the aggregate, an amount of the general partnership interest in the Company
equal to at least fifty percent of the amount of the general partnership
interest in the Company owned, collectively, by the General Partners on the date
of Closing.

CLOSING: the meaning specified in Section 3.

CODE: the Internal Revenue Code of 1986, as amended from time to
time.

<PAGE>

COLLATERAL: collectively, the properties referred to as the
"Collateral" under the Company Security Agreement and as the "Security" in the
Trust Agreement.

COMMODITY HEDGING AGREEMENT(S): any agreement or arrangement designed
solely to protect the Company against fluctuations in the price of propane or
natural gas with respect to quantities of propane that the Company reasonably
expects to purchase from suppliers, sell to its customers or need for its
inventory during the period covered by such agreement or arrangement.

COMPANY: the meaning specified in the Introduction and, for the
purposes of calculating any financial test or financial covenant under this
Agreement with respect to the period prior to the date of the Closing, "Company"
shall mean the General Partners and their Affiliates (but only to the extent
that any such General Partner or Affiliate operated a portion of the Business),
and any such calculations with respect to any such prior period shall be made on
a pro forma basis substantially consistent with the pro forma calculations of
prior periods set forth in the Registration Statement.

COMPANY SECURITY AGREEMENT: the Pledge and Security Agreement among
the Company, [the General Partners], the Qualifying Restricted Subsidiaries and
the Trustee substantially in the form attached hereto as Exhibit G, as amended
from time to time.

COMPETITOR: any Person engaged primarily in the wholesale and retail
sale, distribution and storage of propane gas and related petroleum derivative
products.

CONSOLIDATED CASH FLOW: at any date of determination, for the period
of four consecutive fiscal quarters most recently completed at least 45 days
(except that, in connection with any calculation required pursuant to Section
10.4, for the period of four consecutive fiscal quarters most recently
completed) prior to such date of determination,

(a) the sum of, without duplication, the amounts for such period,
taken as a single accounting period, (i) Consolidated Net Income and (ii)
all amounts deducted in the determination of such Consolidated Net Income
for such period in respect of (v) interest charges (including amortization
of debt discount and expense and imputed interest on Capital Lease
obligations), (x) provisions for all income taxes and reserves (including
reserves for deferred income taxes), (y) all other non-

<PAGE>

cash items, and (z) all fees, cost and expenses with respect to the
retirement or repayment of Indebtedness of the Managing General Partner
existing immediately prior to the Closing, LESS

(b) without duplication, all amounts added in the determination of
such Consolidated Net Income for such period in respect of non-cash items.

Consolidated Cash Flow shall be calculated after giving effect (without
duplication) on a pro forma basis for the four consecutive fiscal quarters most
recently completed prior to such date of determination to any asset sales or
asset acquisitions (including, without limitation, any asset acquisition giving
rise to the need to make such calculation as a result of the Company or any
Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary
as a result of such asset acquisition) incurring, assuming or otherwise being
liable for acquired Indebtedness) occurring during the period commencing on the
first day of such four fiscal quarter period to and including the date of
determination (the "REFERENCE PERIOD"), as if such asset sale or asset
acquisition occurred on the first day of the Reference Period; PROVIDED, that
Consolidated Cash Flow generated by an acquired business or asset shall be
determined on the basis of, without duplication, (a) the actual gross profit
(revenues minus cost of goods sold) of the acquired business or asset during the
immediately preceding four full fiscal quarters), minus (b) the pro forma
expenses that would have been incurred by the Company in the operation of such
acquired business or asset during such period computed on the basis of personnel
expenses for employees retained or to be retained by the Company in the
operation of such acquired business or asset and non-personnel costs and
expenses incurred by the Company or the Managing General Partner in the
operation of the Company's business at similarly situated Company facilities or
Restricted Subsidiary facilities. If the applicable Reference Period for any
calculation of Consolidated Cash Flow shall include a partial period occurring
prior to the Closing, then such Consolidated Cash Flow shall be calculated based
upon the Consolidated Cash Flow on a PRO FORMA basis for such portion of the
Reference Period prior to the Closing (giving effect to the transactions
occurring on the date of Closing) and the Consolidated Cash Flow for the
remaining portion of the Reference Period occurring on and after the Closing,
giving PRO FORMA effect, as described in the preceding sentences, to all
applicable transactions occurring on the date of Closing or otherwise.

CONSOLIDATED INTEREST EXPENSE: as of any date of determination, the
total amount payable by the Company and the Restricted Subsidiaries on a
consolidated

<PAGE>

basis, during the period of twelve consecutive months immediately following such
date of determination in respect of all interest charges (including amortization
of debt discount and expense and imputed interest on payments under Capital
Lease obligations) with respect to Indebtedness of the Company and the
Restricted Subsidiaries outstanding on the date of determination, assuming for
such purpose (a) the amount of such Indebtedness is not reduced or increased
during such twelve month period, and (b) that interest expense for such twelve
month period with respect to Indebtedness of a revolving nature shall equal the
actual interest expense for Indebtedness of a revolving nature during the most
recently completed twelve month period .

CONSOLIDATED NET INCOME: with reference to any period, the net income
(or deficit) of the Company and the Restricted Subsidiaries for such period
(taken as a cumulative whole), after deducting all operating expenses,
provisions for all taxes and reserves (including reserves for deferred income
taxes) and all other proper deductions, all determined in accordance with GAAP
on a consolidated basis, after eliminating all intercompany transactions,
PROVIDED that there shall be excluded (a) the income (or deficit) of any Person
accrued prior to the date it becomes a Restricted Subsidiary or is merged into
or consolidated with the Company or a Restricted Subsidiary, (b) the income (or
deficit) of any Person (other than a Restricted Subsidiary) in which the Company
or any Restricted Subsidiary has an ownership interest, except to the extent
that any such income has been actually received by the Company or such
Restricted Subsidiary in the form of dividends or similar distributions, (c) the
undistributed earnings of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary is not at the time permitted by the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary, (d) any restoration to
income of any contingency reserve, except to the extent that provision for such
reserve was made out of income accrued during such period, (e) any aggregate net
gain or net loss during such period arising from the sale, exchange or other
disposition of capital assets (such term to include all fixed assets, whether
tangible or intangible, all Inventory sold in conjunction with the disposition
of fixed assets, and all securities), (f) any write-up of any asset, (g) any net
gain from the collection of the proceeds of life insurance policies, (h) any
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of the Company or any Restricted Subsidiary,
(i) any after tax gain or loss during such period from any change in accounting,
from any discontinued operations or the disposition thereof, from any
extraordinary events or from any prior period

<PAGE>

adjustments, (j) any deferred credit representing the excess of equity in any
Restricted Subsidiary at the date of acquisition over the cost of the investment
in such Restricted Subsidiary, and (k) in the case of a successor to the Company
by consolidation or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer of assets.

CONSOLIDATED NET WORTH: as to the Company, the amount by which

(i) the total assets of the Company and the Restricted Subsidiaries
appearing on a consolidated balance sheet of the Company and the Restricted
Subsidiaries prepared in accordance with GAAP as of the date of
determination exceeds

(ii) total liabilities of the Company and the Restricted
Subsidiaries appearing on a consolidated balance sheet of the Company and
the Restricted Subsidiaries prepared in accordance with GAAP as of the date
of determination on a consolidated basis,

in each case after eliminating all intercompany transactions; and as to any
other Person, the amount by which

(i) the total assets of such Person and its Subsidiaries appearing
on a consolidated balance sheet of such Person and its Subsidiaries
prepared in accordance with GAAP as of the date of determination (after
eliminating all amounts properly attributable to minority interests in the
stock and surplus, if any, of its Subsidiaries) exceeds

(ii) total liabilities of such Person and its Subsidiaries appearing
on a consolidated balance sheet of such Person and its Subsidiaries
prepared in accordance with GAAP as of the date of determination on a
consolidated basis,

in each case after eliminating all intercompany transactions.

CONSOLIDATED PRO FORMA DEBT SERVICE: as of any date of determination,
the total amount payable by the Company and the Restricted Subsidiaries
on a consolidated basis, during the four consecutive calendar quarters next
succeeding the date of determination, in respect of scheduled principal payments
and all cash interest charges with respect to Indebtedness of the Company and
the Restricted Subsidiaries outstand-

<PAGE>

ing on such date of determination, after giving effect to any Indebtedness
proposed to be incurred on such date (the "Incurrence Date") and to any
Indebtedness proposed to be repaid from funds of such newly incurred
Indebtedness (x) within 30 days of the Incurrence Date, or (y) within the twelve
months following such Incurrence Date as to which funds for such payments have
been within 30 days of the Incurrence Date irrevocably placed in escrow with the
Trustee with irrevocable instructions to the Trustee to make such repayments
(such funds pursuant to clauses (x) and (y) collectively, the "Dedicated Funds")
and (a) including actual payments under Capital Lease obligations, (b) assuming,
in the case of Indebtedness (other than Indebtedness incurred under the Bank
Credit Facilities) bearing interest at fluctuating interest rates which cannot
be determined in advance, that the rate in effect on such date will remain in
effect throughout such period, (c) assuming in the case of Indebtedness incurred
under the Bank Credit Facilities, that (1) the interest payments payable during
such four consecutive calendar quarters next succeeding the date of
determination will equal the actual interest payments associated with the Bank
Credit Facilities during the most recent four fiscal quarters, (2) except for
the twelve-month period immediately prior to the termination or final maturity
thereof (unless extended, renewed or refinanced), no principal payments will be
made under the Working Capital Facility and (3) principal payments relating to
the Initial Acquisition Facility will (unless already converted to a fixed
amortization schedule) become due based on the assumption that the conversion to
the fixed amortization schedule pursuant to Section [2.11(c)] of the Bank Credit
Facilities is effected on the dates set forth therein, (d) treating the
principal amount of all Indebtedness outstanding as of such date of
determination under a revolving credit or similar agreement (other than the Bank
Credit Facilities) as maturing and becoming due and payable on the scheduled
maturity date or dates thereof (including the maturity of any payment required
by any commitment reduction or similar amortization provision), without regard
to any provision permitting such maturity date to be extended and (e) including
any other designated repayments of Indebtedness due within twelve months from
such date of determination.

CONVEYANCE AGREEMENTS: (a) (i) the Contribution, Conveyance and
Assumption Agreement, dated as of the date of the Closing, among the Company,
the Public Partnership, the General Partners and Empire Energy SC Corporation, a
Delaware corporation, and (ii) the Conveyance, Contribution and Assumption
Agreement, dated as of the date of the Closing, among the Public Partnership,
the Company and the General Partner, and (b) each of the individual conveyances,
deeds

<PAGE>

assignments and bills of sale delivered to the Company pursuant to the
agreements referred to in the foregoing clause (a).

DEDICATED FUNDS: the meaning specified in the definition of
"Consolidated Pro Forma Debt Service."

DISCOUNTED VALUE: with respect to the Called Principal of any Note,
the amount obtained by discounting all Remaining Scheduled Payments with respect
to such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on a semi-annual
basis) equal to the Reinvestment Yield plus 50 basis points with respect to such
Called Principal.

DOLLAR AND SIGN "$": lawful money of the United States of America.

ENVIRONMENTAL LAWS: applicable federal, state, local and foreign
laws, rules or regulations relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or industrial, toxic
or hazardous substances or wastes into the environment (including, without
limitation, air, surface water, ground water or land), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes.

ENVIRONMENTAL NOTICE: the meaning specified in Section 7(i).

ERISA: the Employee Retirement Income Security Act of 1974, as
amended from time to time.

EVENT OF DEFAULT: the meaning specified in Section 11.

EXCESS PROCEEDS: the meaning specified in Section 10.7(c).

GAAP: generally accepted accounting principles in effect in the
United States from time to time.

GENERAL PARTNER(S): the meaning specified in the Introduction.

<PAGE>

GUARANTY: as applied to any Person, any direct or indirect liability,
contingent or otherwise, of such Person with respect to any indebtedness, lease
(other than operating leases under which the Company or a Restricted Subsidiary
is the lessee), dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable or any other obligation under
any contract which, in economic effect, is substantially equivalent to a
guaranty, including, without limitation, any such obligation of a partnership in
which such Person is a general partner or of a joint venture in which such
Person is a joint venturer, and any such obligation in effect guaranteed by such
Person through any agreement (contingent or otherwise) to purchase, repurchase
or otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain the solvency or any balance sheet or other financial condition of the
obligor of such obligation, or to make payment for any products, materials or
supplies or for any transportation or services regardless of the non-delivery or
nonfurnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof.

HAZARDOUS MATERIALS: any gasoline or petroleum (including crude oil
or any fraction thereof) or petroleum products, polychlorinated biphenyls, urea-
formaldehyde insulation, asbestos or asbestos-containing materials, pollutants,
contaminants, radioactivity, and any other materials or substances of any kind,
whether or not any such substance is defined as hazardous under any
Environmental Law, that is regulated pursuant to any Environmental Law or that
could give rise to liability under any Environmental Law.

INCURRENCE DATE: the meaning specified in the definition of
"Consolidated Pro Forma Debt Service."

INDEBTEDNESS: as applied to any Person (without duplication):

(a) any indebtedness for borrowed money which such Person has
directly or indirectly created, incurred or assumed;

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(b) any indebtedness, whether or not for borrowed money, with respect
to which such Person has become directly or indirectly liable and which
represents the deferred purchase price (or a portion thereof) or has been
incurred to finance the purchase price (or a portion thereof) of any
property or service or business acquired by such Person, whether by
purchase, consolidation, merger or otherwise;

(c) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with
the acquisition or property, assets or businesses;

(e) any obligations under Capital Leases to the extent such
obligations would, in accordance with GAAP, appear on a balance sheet of
such Person;

(f) any indebtedness, whether or not for borrowed money, secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien in respect of property
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such indebtedness, PROVIDED that the amount of
such Indebtedness if not so assumed shall in no event be deemed to be
greater than the fair market value from time to time (as determined in good
faith by such Person) of the property subject to such Lien;

(g) all capital stock of such Person redeemable at the option of the
holder prior to the final maturity of the Notes, valued at the greater of
its voluntary or involuntary maximum fixed repurchase price or any
mandatory redemption payment obligations in respect thereon plus, in
either case, accrued dividends thereon;

(h) any preferred stock of any Restricted Subsidiary of such Person
redeemable at the option of the holder prior to the final maturity of the
Notes, valued

<PAGE>

at the sum of the liquidation preference thereof or any mandatory
redemption payment obligations in respect thereof PLUS, in either case,
accrued dividends thereon;

(i) all liabilities of such Person in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money);

(j) any indebtedness of the character referred to in clause (a)
through (i) of this definition deemed to be extinguished under GAAP but for
which such Person remains legally liable; and

(k) any indebtedness of any other Person of the character referred to
in clause (a) through (j) of this definition with respect to which the
Person whose Indebtedness is being determined has become liable by way of a
Guaranty.

Notwithstanding the foregoing, in determining the Indebtedness of the Company
and the Restricted Subsidiaries, there shall be excluded all undrawn letters of
credit (not yet due and payable), trade accounts payable, accrued interest and
other accrued expenses and customer credit balances arising in the ordinary
course of business on ordinary terms.

INITIAL ACQUISITION FACILITY: that Initial Acquisition Facility under
the Bank Credit Facilities which shall permit borrowings thereunder in an
aggregate amount at any time no greater than as permitted by Section 10.1(e) and
which shall be secured by the Collateral pursuant to the Security Documents, and
any extension, renewal, refunding or replacement thereof otherwise permitted to
be incurred and outstanding under Section 10.1.

INSTITUTIONAL INVESTOR: means (a) any original purchaser of a Note,
(b) any holder of a Note holding $1,000,000 or more of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.

<PAGE>

INTERCOMPANY NOTES: any and all promissory notes of a Restricted
Subsidiary issued to the Company or to another Restricted Subsidiary, in the
form attached hereto as Exhibit I or such other form as may be satisfactory to
the Required Holders, representing all Indebtedness of such Restricted
Subsidiary to the Company or such other Restricted Subsidiary, as the case may
be.

INTEREST RATE AGREEMENT: any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement designed solely to protect the Company against fluctuations in
interest rates on Indebtedness outstanding under the Bank Credit Facilities
entered into with one or more of the banks party to the Bank Credit Facilities.

INVENTORY: goods held by a Person for sale or lease and accounted for
as inventory under GAAP.

INVESTMENT: as applied to any Person, any direct or indirect purchase
or other acquisition by such Person of stock or other securities of any other
Person, or any direct or indirect loan, advance or capital contribution by such
Person to any other Person, and any other item which would be classified as an
"investment" on a balance sheet of such Person prepared in accordance with GAAP,
including, without limitation, any direct or indirect contribution by such
Person of property or assets to a joint venture, partnership or other business
entity in which such Person retains an interest. For the purposes of
Section 10.3(b), the amount involved in Investments made during any period shall
be the aggregate cost to the Company of all such Investments made during such
period, determined in accordance with GAAP, but without regard to unrealized
increases or decreases in value, or write-ups, write-downs or write-offs, of
such investments and without regard to the existence of any undistributed
earnings or accrued interest with respect thereto accrued after the respective
dates on which such Investments were made, less any net return of capital
realized during such period upon the sale, repayment or other liquidation of
such Investment (determined in accordance with GAAP, but without regard to any
amounts received during such period as earnings (in the form of dividends not
constituting a return of capital, interest or otherwise) on such Investment or
as loans from any Person in whom such Investments have been made).

<PAGE>

LEGAL REQUIREMENT: any law, statute, ordinance, decree, requirement,
order, judgment, rule or regulation (or published official interpretation by any
governmental authority of any of the foregoing) of any governmental authority.

LIEN: as to any Person, any mortgage, lien (statutory or otherwise),
pledge, reservation, right of entry, encroachment, easement, right of way,
restrictive covenant, license, charge, security interest or other encumbrance in
or on, or any interest or title of any vendor, lessor under any lease not
intended to be an Operating Lease, lender or other secured party to or of such
Person under any conditional sale or other title retention agreement or Capital
Lease with respect to, any property or asset owned or held by such Person, or
the signing or filing of a financing statement with respect to any of the
foregoing which names such Person as debtor, or the signing of any security
agreement with respect to any of the foregoing authorizing any other party as
the secured party thereunder to file any financing statement or any other
agreement to give or grant any of the foregoing. Negative pledge agreements,
however, shall not constitute Liens for purposes of this Agreement or any other
Operative Agreement. For the purposes of this Agreement, a Person shall be
deemed to be the owner of any asset which it has placed in trust for the benefit
of the holders of Indebtedness of such Person and such trust shall be deemed to
be a Lien if such Person remains legally liable therefor, notwithstanding that
such Indebtedness is or may be deemed to be extinguished under GAAP.

MAKE WHOLE AMOUNT: with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Remaining Scheduled Payments of
the Called Principal of such Note over such Called Principal. The Make Whole
Amount shall in no event be less than zero.

MANAGING GENERAL PARTNER: Cornerstone Propane G.P., Inc., so long as
it holds a general partner interest in the Company and shall be the managing
general partner as provided in the Partnership Agreement, and any successor to
such interest or any part thereof, so long as such successor shall hold such
interest or part thereof.

MATERIAL ADVERSE EFFECT: a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or prospects
(financial or otherwise) of the Company and the Restricted Subsidiaries, taken a
whole (after giving effect to the transactions contemplated by the Operative
Documents) or the Business, (b) the ability of the Company, either General
Partner or any Restricted Subsidiary to perform

<PAGE>

its obligations under this Agreement or any other Operative Agreement to which
it is a party, or (c) the validity, enforceability, perfection or priority of
this Agreement or any other Operative Agreement or of the rights or remedies of
the holder of any Notes or the Trustee.

MAXIMUM CONSOLIDATED PRO FORMA DEBT SERVICE: as of any date of
determination, the highest total amount payable by the Company and the
Restricted Subsidiaries on a consolidated basis, during any period of four
consecutive fiscal quarters, commencing with the fiscal quarter in which such
date of determination occurs and ending on the maturity date of the Notes, in
respect of scheduled principal payments and all cash interest charges with
respect to all Indebtedness of the Company and the Restricted Subsidiaries
outstanding or to be outstanding as a result of the transaction occurring on
such date of determination, after giving effect to any Indebtedness to be
incurred on the Incurrence Date and to any Indebtedness proposed to be repaid
from Dedicated Funds and (a) including actual payments under Capital Lease
obligations, (b) assuming, in the case of Indebtedness (other than Indebtedness
incurred under the Bank Credit Facilities) bearing interest at fluctuating
interest rates which cannot be determined in advance, that the rate in effect on
such date will remain in effect throughout such period, (c) assuming in the case
of Indebtedness incurred under the Bank Credit Facilities, that (1) the interest
payments payable during such four consecutive calendar quarters will equal the
actual interest payments associated with the Bank Credit Facilities during the
most recent four fiscal quarters, (2) except for the twelve-month period
immediately prior to the termination or final maturity thereof (unless extended,
renewed or refinanced) no principal payments will be made under the Working
Capital Facility and (3) principal payments relating to the Initial Acquisition
Facility will (unless already converted to a fixed amortization schedule) become
due based on the assumption that the conversion to the fixed amortization
schedule pursuant to Section [2.11(c)] of the Bank Credit Facilities is effected
on the dates set forth therein, (d) treating the principal amount of all
Indebtedness outstanding as of such date of determination under a revolving
credit or similar agreement (other than the Bank Credit Facilities) as maturing
and becoming due and payable on the scheduled maturity date or dates thereof
(including the maturity of any payment required by any commitment reduction or
similar amortization provision), without regard to any provision permitting such
maturity date to be extended and (e) including any other designated repayments
of Indebtedness.

MEMORANDUM: the meaning specified in Section 5.4(b).

<PAGE>

MLP AGREEMENT: the [Amended and Restated Agreement of Limited
Partnership of the Public Partnership].

MULTIEMPLOYER PLAN: a Plan which is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA.

NON-RELATED SUBSIDIARIES: Subsidiaries of Northwestern other than (i)
the General Partner and (ii) any such Subsidiary which is a Related Person.

NORTHWESTERN: Northwestern Growth Corporation, a Delaware
corporation.

NOTES: the meaning specified in Section 1.

OBSOLETE ASSETS: means assets, property or equipment that have been
determined by the Company, in good faith, to no longer be useful in the
operations or the business of the Company or a Restricted Subsidiary.

OFFICERS' CERTIFICATE: as to any corporation, a certificate executed
on its behalf by the Chairman of the Board of Directors (if an officer) or its
President or one of its Vice Presidents and its Treasurer, or Controller, or one
of its Assistant Treasurers or Assistant Controllers, and, as to any
partnership, a certificate executed on behalf of such partnership by its
Managing General Partner in a manner which would qualify such certificate as an
Officers' Certificate of such Managing General Partner hereunder.

OPERATIVE AGREEMENTS: this Agreement, the Other Agreements, the
Notes, the Bank Credit Facilities, the Security Documents, the Underwriting
Agreement, the Conveyance Agreements, the MLP Agreement and the Partnership
Agreement.

OTHER AGREEMENTS: the meaning specified in Section 2.

OTHER PURCHASERS: the meaning specified in Section 2.

OVERALLOTMENT OPTION: the overallotment option granted to the
Underwriters by the Public Partnership pursuant to the Underwriting Agreement.

<PAGE>

PARITY DEBT: Indebtedness of the Company incurred in accordance with
Section 10.1(b), 10.1(e), 10.1(f), 10.1(i), 10.1(j) or 10.1(m) and secured by
the lien of the Security Documents in accordance with Section 10.2(h), 10.2(i)
or 10.2(m).

PARTNERSHIP AGREEMENT: the [Amended and Restated] Agreement of
Limited Partnership of the Company, as in effect on the date of the Closing, and
as the same may from time to time be amended, modified or supplemented in
accordance with the terms thereof and Section 10.12 hereof, in the form of
Exhibit K.

PBGC: the Pension Benefit Guaranty Corporation or any governmental
authority succeeding to any of its functions.

PERFECTION CERTIFICATE: a certificate from the Company in
substantially the form attached hereto as Exhibit N.

PERMITTED BANKS: the meaning specified in Section 10.3(a).

PERMITTED ENCUMBRANCES: the encumbrances and exceptions to title to
the Assets (a) described in the Security Documents or (b) existing on the date
of Closing as permitted by the applicable provisions hereof with respect to real
property owned or leased by the Company or otherwise permitted hereunder
pursuant to Section 10.2(l).

PERMITTED EXCEPTIONS: the meaning specified in Section 5.8(a).

PERMITTED INSURERS: insurers with ratings of A- or better according
to Best's Insurance Reports or a comparable rating agency for insurance
companies located outside of the United States of America and Canada and with
assets of no less than $500 million.

PERSON: a corporation, a limited liability company, a firm, a joint
venture, an association, a partnership, an organization, a business, a trust or
other entity or enterprise, an individual, a government or political subdivision
thereof or a governmental agency, department or instrumentality.

PLAN: an "employee pension benefit plan" (as defined in Section 3(2)
of ERISA) which is or has been established or maintained, or to which
contributions are or have been made, by either General Partner, the Company or
any Related Person of

<PAGE>

the Company or either General Partner or to which either General Partner, the
Company or any Related Person of the Company or either General Partner is or has
been obligated to contribute, or an employee benefit plan as to which either
General Partner, the Company or any Related Person of the Company or either
General Partner could be treated as a contributory sponsor under Section 4069 or
Section 4212 of ERISA if such plan were terminated.

POTENTIAL EVENT OF DEFAULT: any condition or event which, with notice
or lapse of time or both, would become an Event of Default.

PREMIUM AMOUNT: the meaning specified in Section 9.3(d).

PUBLIC PARTNERSHIP: Cornerstone Propane Partners, L.P., a Delaware
limited partnership.

PURCHASE MONEY LIEN: the meaning specified in Section 10.2(j).

QPAM EXEMPTION: the meaning specified in Section 6.2(c).

QUALIFYING RESTRICTED SUBSIDIARIES: the Restricted Subsidiaries other
than Cornerstone Services Corporation.

RCRA: the Federal Resource Conservation and Recovery Act, as amended.

REGISTRATION STATEMENT: the Registration Statement on Form S-1 under
the Securities Act of 1933, as amended, of the Public Partnership (Registration
Number 33-2768), as initially filed with the Securities and Exchange Commission
on October 12, 1996, and as may be amended from time to time through the date of
closing by subsequent filings with the Securities and Exchange Commission.

REINVESTMENT YIELD: with respect to the Called Principal of any Note,
the yield to maturity implied by (i) the yields reported, as of 10:00 a.m. (New
York City time) on the Business Day next preceding the Settlement Date with
respect to such Called Principal, on the display designated as "USD" on the
Bloomberg Financial Markets (or such other display as may replace USD on the
Bloomberg Financial Markets) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or if such

<PAGE>

yields shall not be reported as of such time or the yields reported as of such
time shall not be ascertainable, (ii) the Treasury constant maturity series
yields reported, for the latest day for which such yields shall have been so
reported as of the Business Date next preceding the Settlement Date with respect
to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or
any comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date. Such implied yield shall be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and
(b) interpolating linearly between (1) the actively traded U.S. Treasury
security with the maturity closest to and equal to or greater than the Remaining
Average Life and (2) the actively traded U.S. Treasury security with the
maturity closest to and equal to or less than the Remaining Average Life.

RELATED PERSON: with respect to a Person, any trade or business,
whether or not incorporated, which, as of any date of determination, would be
treated as a single employer together with such Person under Section 414 of the
Code.

REMAINING AVERAGE LIFE: with respect to the Called Principal of any
Note, the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (i) such Called Principal into (ii) the sum of the products obtained
by multiplying (a) each Remaining Scheduled Payment of such Called Principal
(but not of interest thereon) by (b) the number of years (calculated to the
nearest one-twelfth year) which will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.

REMAINING SCHEDULED PAYMENTS: with respect to the Called Principal of
any Note, all payments of such Called Principal and interest thereon that would
be due on or after the Settlement Date with respect to such Called Principal if
no payment of such Called Principal were made prior to its scheduled due date,
PROVIDED that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Sections 9 or 11.

REQUIRED HOLDERS: the holders of at least 66-2/3% in principal amount
of the Notes at the time outstanding.

<PAGE>

REQUISITE PERIOD: the meaning specified in Section 10.1(e)(ii)(l).

RESPONSIBLE OFFICER: with respect to any Person, the President, any
Senior Vice President, the Chief Financial Officer, the Treasurer and the
Secretary of such Person and any other officer of such Person who is responsible
for compliance with or performance of any obligation under this Agreement or the
other Operative Agreements, with respect to the Company, any such officer of the
Managing General Partner and, in any case, any employee of the Company
performing any of the above functions.

RESTRICTED AFFILIATE: Northwestern or any of its Subsidiaries as long
as any such Person would otherwise be an Affiliate of the Company.

RESTRICTED PAYMENT: as to any Person, (a) any payment, dividend or
other distribution, direct or indirect, in respect of any partnership interest
(general or limited) in, or on account of any shares of any class of stock of,
such Person, except a distribution payable solely in additional partnership
interests in, or shares of stock of, such Person, and (b) any payment, direct or
indirect, on account of the redemption, retirement, purchase or other
acquisition of any partnership interest in, or any shares of any class of stock
of, such Person now or hereafter outstanding or of any warrants, rights or
options to acquire any such shares, except to the extent that the consideration
therefor consists of shares of stock [or partnership interests in] of such
Person, PROVIDED payments by the Company or a Restricted Subsidiary of the
Company to either General Partner or any of its Affiliates for services rendered
to or on behalf of the Company or any Restricted Subsidiary of the Company or
expenses incurred in connection with the operation of the business of the
Company or any Restricted Subsidiary of the Company (including, without
limitation, reimbursement of expenses incurred under any employee benefit plan,
including plans providing for the issuance of Units or options to acquire Units
in the Public Partnership shall not be deemed to be Restricted Payments.

RESTRICTED SUBSIDIARY: any Wholly Owned Subsidiary of the Company
(a) organized under the laws of the United States of America or any state
thereof or the District of Columbia, (b) none of the capital stock or ownership
interests of which is owned by Unrestricted Subsidiaries, (c) substantially all
of the operating assets of which are located in, and substantially all of the
business of which is conducted within the United States of America and the
business of which consists principally of the

<PAGE>

wholesale and retail sale, distribution and storage of propane gas and related
petroleum derivative products and/or the related retail sale of supplies and
equipment, including home appliances, and for the provision of related services
and (d) designated by the Company as a Restricted Subsidiary in Exhibit O or at
a subsequent date, PROVIDED that (i) to the extent a newly formed or acquired
Wholly Owned Subsidiary satisfying the requirements of the foregoing clauses
(a), (b) and (c) is not declared either a Restricted Subsidiary or an
Unrestricted Subsidiary within 90 days of its formation or acquisition, such
Wholly Owned Subsidiary shall be deemed a Restricted Subsidiary and (ii) a
Restricted Subsidiary may be designated as an Unrestricted Subsidiary in
accordance with the provisions of Section 10.19(a).

SECURITY DOCUMENTS: the Trust Agreement, the Company Security
Agreement, the Subsidiary Guarantee Agreement, the Perfection Certificate, and
all other security agreements and documents and instruments executed and
delivered in order to secure the Indebtedness and/or perfect the Liens referred
to in the Trust Agreement or to guarantee the Company's [and the General
Partners'] obligations hereunder and under the Notes.

SETTLEMENT DATE: shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
Section 9.2, 9.3 or 9.4 or is declared to be or becomes immediately due and
payable pursuant to Section 11, as the context requires.

SUBSIDIARY: of any Person, means any corporation, limited liability
company, business trust, association, partnership, joint venture or other
business entity at least a majority (by number of votes) of the stock of any
class or classes (or equivalent interests) of which is at the time owned by such
Person or by one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person, if the holders of the stock of such class
or classes (or equivalent interests) (a) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of the directors
(or Persons performing similar functions) of such business entity, even though
the right so to vote has been suspended by the happening of such a contingency,
or (b) are at the time entitled, as such holders, to vote for the election of
the majority of the directors (or Persons performing similar functions) of such
business entity, whether or not the right so to vote exists by reason of the
happening of a contingency. Unless the context otherwise requires, any
reference to a Subsidiary shall mean a Subsidiary of the Company.

<PAGE>

SUBSIDIARY GUARANTEE AGREEMENT: the Guarantee Agreement among the
Qualifying Restricted Subsidiaries and the Trustee substantially in the form
attached hereto as Exhibit P, as amended from time to time.

SUBSTANTIAL PORTION: the meaning specified in Section 7(a).

SUPPLEMENTAL AGREEMENT: an agreement between a Restricted Subsidiary
and the Trustee substantially in the form attached hereto as Exhibit Q, as
amended from time to time.

TRUST AGREEMENT: the Intercreditor and Trust Agreement, dated as of
________, 1996, among the Company, [the General Partners], the Qualifying
Restricted Subsidiaries, the Trustee, the holders of the Notes, the
Administrative Agent and the Banks, substantially in the form attached hereto as
Exhibit C, as amended from time to time.

TRUSTEE: U.S. Trust Company of Texas, N.A. as Trustee under the Trust
Agreement and its successors and assigns thereunder.

UNDERWRITERS: the underwriters named in the Underwriting Agreement.

UNDERWRITING AGREEMENT: the Purchase Agreement, dated ________, 1996,
among the Public Partnership, the General Partners, the Company, Northwestern
and the Underwriters, relating to securities of the Public Partnership
registered under the Registration Statement.

UNIFORM COMMERCIAL CODE: the Uniform Commercial Code or similar
statute in effect from time to time in any jurisdiction.

UNITS: the units to be issued and sold by the Public Partnership
pursuant to the Underwriting Agreement, representing preference limited
partnership interests in the Public Partnership.

UNRESTRICTED SUBSIDIARY: any Subsidiary other than a Restricted
Subsidiary which is organized under the laws of the United States of America or
any state thereof or the District of Columbia and substantially all of the
operating assets of which are located in, and substantially all of the business
of which is conducted within the United

100

<PAGE>

States of America and which business consists principally of the distribution of
propane gas or related supplies and equipment.

WHOLLY OWNED: as applied to any Subsidiary, a Subsidiary all of the
outstanding shares (other than directors' qualifying shares, if required by law)
of every class of stock or other equity interests of which are at the time owned
by the Company or by one or more Wholly Owned Restricted Subsidiaries or by the
Company and one or more Wholly Owned Restricted Subsidiaries.

WORKING CAPITAL FACILITY: that Working Capital Facility under the
Bank Credit Facilities which shall permit borrowings and the extensions of
letters of credit for the Company thereunder in an aggregate amount outstanding
at any time no greater than as permitted by Section 10.1(e) and which shall be
secured by the Collateral pursuant to the Security Documents and any extension,
renewal, refunding or replacement thereof otherwise permitted to be incurred and
outstanding under Section 10.1.

SECTION 14. REGISTRATION, TRANSFER AND SUBSTITUTION OF
NOTES.

14.1. NOTE REGISTER; OWNERSHIP OF NOTES. Any Notes issued in
substantially the form of Exhibit A are in "registered form". The Company will
keep at its principal office a register in which the Company will provide for
the registration of Notes in registered form and the registration of transfers
of Notes in registered form. The Company and the Trustee may treat the Person
in whose name any Note is registered on such register as the owner thereof for
the purpose of receiving payment of the principal of and the Make Whole Amount
or premium, if any, and interest on such Note and for all other purposes,
whether or not such Note shall be overdue, and the Company shall not be affected
by any notice to the contrary. All references in this Agreement or in a Note to
a "holder" of any Note shall mean the Person in whose name such Note is at the
time registered on such register.

14.2. TRANSFER AND EXCHANGE OF NOTES. Upon surrender of any Note
for registration of transfer or for exchange to the Company at its principal
office, the Company at its expense will execute and deliver in exchange therefor
a new Note or Notes in denominations of at least $500,000 (except one Note may
be issued in a lesser principal amount if the unpaid principal amount of the
surrendered Note is not evenly divisible by, or is less than, $500,000), as
requested by the holder or transferee, which

101

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aggregate the unpaid principal amount of such surrendered Note. Each such new
Note shall be in registered form. Each such Note shall be dated so that there
will be no loss of interest on such surrendered Note and otherwise of like
tenor, and shall be registered in the name or names of such Person as such
holder or transferee may request. Any Note in lieu of which any such new Note
has been executed and delivered shall not be deemed to be an outstanding Note
for any purpose of this Agreement.

14.3. REPLACEMENT OF NOTES. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Note and, in the case of any such loss, theft or destruction of any Note, upon
delivery of an indemnity bond in such reasonable amount as the Company may
determine (or, in the case of any Note held by you or another Institutional
Investor holder or your or its nominee, of an unsecured indemnity agreement from
you or such other holder), or, in the case of any such mutilation, upon the
surrender of such Note for cancellation to the Company at its principal office,
the Company at its expense will execute and deliver, in lieu thereof, a new Note
in the unpaid principal amount of such lost, stolen, destroyed or mutilated
Note, dated so that there will be no loss of interest on such Note and otherwise
of like tenor. Any Note in lieu of which any such new Note has been so executed
and delivered by the Company shall not be deemed to be an outstanding Note for
any purpose of this Agreement.

14.4. NOTES HELD BY COMPANY, ETC., DEEMED NOT OUTSTANDING. For
the purposes of determining whether the holders of the Notes of the requisite
principal amount at the time outstanding have taken any action authorized by
this Agreement or any other Operative Agreement with respect to the giving of
consents or approvals or with respect to the acceleration upon an Event of
Default, any Notes directly or indirectly owned by the Company, either General
Partner, the Managing General Partner or any of their respective Affiliates
shall be disregarded and deemed not to be outstanding.

SECTION 15. PAYMENTS ON NOTES.

15.1. PLACE OF PAYMENT. Payments of principal, Make Whole Amount,
Premium Amount or premium, if any, and interest becoming due and payable on the
Notes shall be made at the principal office of the Trustee, in the Borough of
Manhattan, the City and State of New York by 12:00 noon, unless the Company, by
written notice to each holder of any Notes, shall designate the principal office
of another bank

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or trust company in such Borough as such place of payment, in which case the
principal office of such other bank or trust company shall thereafter be such
place of payment.

15.2. HOME OFFICE PAYMENT. So long as you or your nominee shall
be the holder of any Note, and notwithstanding anything contained in
Section 15.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make Whole Amount and Premium Amount,
if any, and interest no later than 12:00 noon (New York City time) and by the
method and at the address specified for such purpose in Schedule A, or by such
other reasonable method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that any Note paid or prepaid in full shall, after such payment or
prepayment in full, be surrendered to the Company at its principal office or at
the place of payment maintained by the Company pursuant to Section 15.1 for
cancellation. Prior to any sale or other disposition of any Note held by you or
your nominee you will, at your election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon
or surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 14.2. The Company will afford the benefits of this
Section 15.2 to any Institutional Investor which is the direct or indirect
transferee of any Note purchased by you under this Agreement and which has made
the same agreement relating to such Note as you have made in this Section 15.2.

SECTION 16. EXPENSES, INDEMNIFICATION, ETC.

(a) Whether or not the transactions contemplated hereby shall be
consummated, the Company will pay all reasonable expenses in connection with
such transactions and in connection with any amendments or waivers (whether or
not the same become effective) under or in respect of this Agreement, the other
Operative Agreements or the Notes, including, without limitation: (i) the cost
and expenses of preparing and reproducing this Agreement, the other Operative
Agreements and the Notes, of furnishing all opinions by counsel for the Company,
the Restricted Subsidiaries, Northwestern or the General Partners (including any
opinions requested by your special counsel, Debevoise & Plimpton, as to any
legal matter arising hereunder) and all certificates on behalf of the Company,
either General Partner, Northwestern or any Restricted Subsidiary, and of the
Company's, either General Partner's, Northwestern's or any Restricted
Subsidiary's performance of and

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compliance with all agreements and conditions contained herein on its part to be
performed or complied with; (ii) the cost of delivering to your principal
office, insured to your satisfaction, the Notes issued in exchange for the Notes
sold to you hereunder and any Notes delivered to you upon any substitution
thereof pursuant to Section 14 and of your delivering any Notes, insured to your
satisfaction, upon any such substitution; (iii) the reasonable fees, expenses
and disbursements of your special counsel, Debevoise & Plimpton and your local
counsel in connection with such transactions and any such amendments or waivers;
(iv) the costs and expenses, including attorneys' fees, incurred by you or any
subsequent holder of a Note in enforcing (or determining whether or how to
enforce) any rights under this Agreement, any other Operative Agreement or the
Notes or in responding to any subpoena or other legal process in connection with
this Agreement, any other Operative Agreement or the Notes or the transactions
contemplated hereby or by reason of you or any subsequent holder of Notes having
acquired any Note, including without limitation costs and expenses incurred in
any bankruptcy case; (v) the cost and expenses of obtaining a Private Placement
Number for the Notes; and (vi) the reasonable out-of-pocket expenses incurred by
you in connection with such transactions and any such amendments or waivers,
PROVIDED that the Company shall be required to pay the cost and expenses of only
one firm (and any local counsel) retained by the Noteholders in connection with
any waivers or amendments. The Company also will pay, and will save you and
each holder of any Notes harmless from, all claims in respect of the fees, if
any, of brokers and finders (unless engaged by you) and any and all liabilities
with respect to any taxes (including interest and penalties) (other than income
taxes) which may be payable in respect of the execution and delivery hereof, the
issue of the Notes hereunder and any amendment or waiver under or in respect
hereof or of the Notes. In furtherance of the foregoing, on the date of the
Closing the Company will pay the reasonable fees and disbursements of your
special counsel which are reflected as unpaid in the statement of Debevoise &
Plimpton, your special counsel, delivered to the Company prior to the date of
the Closing; and thereafter the Company will pay, promptly upon receipt of
supplemental statements therefor from time to time, additional fees, if any, and
disbursements of your special counsel in connection with the transactions hereby
contemplated (including unposted disbursements as of the date of the Closing).

(b) The Company will protect, indemnify and save harmless the Trustee
and each present, future and former holder of any Note and their respective
officers, directors, trustees, employees, agents and representatives
(individually, an "Indemnified Party" and collectively, the "Indemnified
Parties") from and against all losses, liabil-

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ities, obligations, claims, damages, penalties, causes of action, costs and
expenses (including, without limitation, attorneys' fees and expenses)
imposed upon or incurred by or asserted against any Indemnified Party by
reason of (a) ownership of the Collateral, or any interest therein, or
receipt of any rent or other sum therefrom, (b) any accident or injury to or
death of persons or loss of or damage to property occurring on or about the
Collateral or any part thereof, (c) any use, non-use or condition of the
Collateral or any part thereof, (d) any failure on the part of the Company,
either General Partner or any of their respective Subsidiaries or Affiliates
to perform or comply with any of the terms of this Agreement or any other
Operative Agreement, (e) the performance of any labor or services or the
furnishing of any materials or other property in respect of the Collateral or
any part thereof, (f) any negligence or tortious act on the part of the
Company, either General Partner, any of their respective Subsidiaries or
Affiliates or any of their respective agents, contractors, sublessees,
licensees or invitees, (g) any work in connection with any alterations,
changes or construction of the Collateral, (h) any other relationship that
has arisen or may arise between the Company, either General Partner or any of
their respective Subsidiaries or Affiliates and the Indemnified Parties or
the Collateral as a result of the delivery or performance of this Agreement,
any other Operative Agreement or any action contemplated hereby or thereby
or by any other document executed in connection herewith or therewith, (i)
the presence or removal, or the discharge, spillage, leakage, emission,
release, threat of release or disposal, of any Hazardous Substances on,
under, about or from the Collateral or the noncompliance with any Legal
Requirement relating thereto, whether arising prior to the issuance of the
Notes or at any time thereafter and whether or not the Company, either
General Partner or any of their respective Subsidiaries or Affiliates is
responsible therefor or (j) the holding of, or any interest in, any sum
deposited or paid under this Agreement, the Notes or any other Operative
Agreement, PROVIDED that nothing contained herein shall be deemed to require
the Company to indemnify the Indemnified Parties for conditions (other than
matters covered by clause (f) above) first occurring subsequent to the
earlier of (x) the taking of exclusive possession and control of the
Collateral for operational purposes pursuant to Section 6.03 of the Company
Security Agreement, (y) the foreclosure of the Lien under any Security
Document and the transfer of title to the Trustee, or (z) for their
respective gross negligence or willful misconduct, or for their breach of
their respective obligations under this Agreement or the other Operative
Agreements.

In case any action, claim, suit or proceeding is brought against an
Indemnified Party by reason of any such occurrence, the Company may, and upon
the request of

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such Indemnified Party will, at the Company's expense resist and defend such
action, suit or proceeding or cause the same to be resisted and defended by
counsel for the insurer of the liability or by counsel designated by the Company
and reasonably satisfactory to the Indemnified Party, as the case may be,
PROVIDED that any Indemnified Party shall be entitled to participate in any such
action, suit or proceeding with counsel of its own choice but at its own
expense, and PROVIDED FURTHER that if any Indemnified Party reasonably
determines that a conflict of interest exists with respect to the representation
by such counsel of such Indemnified Party, the Company shall pay the fees and
expenses of counsel selected by such Indemnified Party. In any event, if the
Company fails to assume the defense within a reasonable time after any such
request, the Indemnified Party may assume such defense or other indemnification
obligation and the fees and expenses of its attorney will be paid by the
Company. The obligations of the Company under this Section 16 shall survive any
termination or satisfaction of this Agreement. Any amounts payable to any
Indemnified Party under this Section 16 which are not paid within 15 days after
written demand therefor by any Indemnified Party shall bear interest at the rate
of _____% per annum from the date of such demand. In the event that the Company
shall be required to pay any indemnity under this Section 16, the Company shall
pay the Indemnified Party an amount which, after deduction of all taxes required
to be paid by such Indemnified Party in respect of the receipt or accrual
thereof (but not for any taxes payable with respect to amounts received for the
payment of income taxes), shall be equal to the amount of such indemnity.

(c) In connection with the Closing, the Managing General Partner and
the Company are requesting that you make available for funding an amount equal
to the principal amount specified opposite your name in Schedule A. If, for any
reason, on the date scheduled by the General Partners and the Company as the
date for the Closing, you shall at their request have made such amount
available, and (i) the closing conditions are not satisfied by 11:00 a.m. on
such scheduled date, (ii) the General Partners and the Company do not, by 11:00
a.m. on such scheduled date reschedule such Closing for a subsequent date, and
(iii) the Closing in fact does not occur on such scheduled date, the General
Partners and the Company will protect, indemnify and hold you harmless from and
against any and all losses resulting from your failure or inability to invest on
the scheduled date for the Closing the purchase price of the Notes to be
purchased by you, for the period ending on the next following Business Day at a
rate of interest equal to or greater than the rate of interest on the Notes.

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SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

All representations and warranties contained in this Agreement or the
other Operative Agreements, or made in writing by or on behalf of either General
Partner, the Company, any Restricted Subsidiary or any of their Affiliates in
connection with the transactions contemplated by this Agreement or the other
Operative Agreements, shall survive the execution and delivery of this Agreement
and the other Operative Agreements, any investigation at any time made by you or
on your behalf, the purchase of the Notes by you under this Agreement and any
disposition or payment of the Notes. All statements contained in any
certificate or other instrument delivered by or on behalf of the General
Partners, the Company, any Restricted Subsidiary or the Managing General Partner
pursuant to this Agreement and/or the other Operative Agreements or in
connection with any amendment, waiver or modification of this Agreement or any
of the other Operative Agreements shall be deemed representations and warranties
of the Company under this Agreement.

SECTION 18. AMENDMENTS AND WAIVERS.

Any term of this Agreement or of the Notes may be amended and the
observance of any term of this Agreement or of the Notes may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the Company and the Required Holders, PROVIDED
that, without the prior written consent of the holders of all the Notes at the
time outstanding, no such amendment or waiver shall (a) change the maturity or
the principal amount of, or change the rate of interest or the time of payment
of interest on, or change the amount or the time of payment of any principal or
Make Whole Amount, Premium Amount on any prepayment of, any Note, (b), subject
to other requirements set forth in the Trust Agreement, release any Lien against
the Collateral for the benefit of the holders of the Notes, (c) reduce the
aforesaid percentage of the principal amount of the Notes the holders of which
are required to consent to any such amendment or waiver or change the rights of
the holders of a Note with respect thereto, (d) change the percentage of the
principal amount of the Notes the holders of which may declare the Notes to be
due and payable as provided in Section 11 or change the rights of the holders of
a Note with respect thereto, (e) change the percentage of the principal amount
of the Notes the holders of which may rescind and annul any such declaration as
provided in Section 11 or (f) modify the provisions of Section 9.8 or this
Section 18. Any amendment or waiver effected in accordance with this Section 18
shall be binding upon each holder of

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any Note at the time outstanding, each future holder of any Note, either General
Partner and the Company.

SECTION 19. NOTICES, ETC.

Except as otherwise provided in this Agreement, notices and other
communications under this Agreement shall be in writing and shall be delivered
by hand, by express courier service or by registered or certified mail, return
receipt requested, postage prepaid, addressed, (a) if to you, at the address set
forth in Schedule A or at such other address as you shall have furnished to the
Company in writing, except as otherwise provided in Section 15.2 with respect to
payments on Notes held by you or your nominee, or (b) if to any other holder of
any Note, at such address as such other holder shall have furnished to the
Company in writing, or, until any such other holder so furnishes to the Company
an address, then to and at the address of the last holder of such Note who has
furnished an address to the Company, or (c) if to the Company or either General
Partner, at the address set forth at the beginning of this Agreement to the
attention of Senior Vice President and Chief Financial Officer, or at such other
address, or to the attention of such other officer, as the Company shall have
furnished to you and each such other holder in writing.

SECTION 20. REPRODUCTION OF DOCUMENTS.

This Agreement, each Operative Agreement and all documents relating
thereto, including, without limitation, (a) consents, waivers and notifications
which may hereafter be executed, (b) documents received by you at the Closing
(except the Notes themselves), and (c) financial statements, certificates and
other information previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and you may destroy any original document
so reproduced. Each General Partner and the Company agrees and stipulates that,
to the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and (but only to the
extent permitted by law) whether or not such reproduction was made by you in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

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SECTION 21. MISCELLANEOUS.

This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the respective successors and assigns of the parties hereto,
whether so expressed or not, and, in particular, shall inure to the benefit of
and be enforceable by any holder or holders at the time of the Notes or any part
thereof, PROVIDED that the benefits of Sections 7, 14.3 and 15.2 shall be
limited as therein provided. Except as stated in Section 17, this Agreement
embodies the entire agreement and understanding among you, the General Partners
and the Company and supersedes all prior agreements and understandings relating
to the subject matter hereof. The headings in this Agreement are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.

SECTION 22. SUBMISSION TO JURISDICTION.

For the purpose of assuring that any holder of Notes may enforce its
rights under this Agreement, the Notes and the other Operative Agreements, each
General Partner and the Company, for itself and its successors and assigns,
hereby, to the fullest extent permitted by applicable law, irrevocably (a)
agrees that any legal or equitable action, suit or proceeding brought against it
arising out of or relating to this Agreement, any other Operative Agreement and
the Notes, or any transaction contemplated hereby or the subject matter of any
of the foregoing or for recognition or enforcement of any judgment rendered in
any such action, suit or proceeding may be instituted in any state or federal
court sitting in the Borough of Manhattan in the State of New York, (b) waives
any objection which it may now or hereafter have to the laying of venue of any
such action, suit or proceeding brought in any such court, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum, or any right to require the proceeding to be conducted in
any other jurisdiction by reason of its present or future domicile, (c)
irrevocably submits itself to the non-exclusive jurisdiction of any state or
federal court of competent jurisdiction sitting in the Borough of Manhattan in
the State of New York for purposes of any such action, suit or proceeding, and
(d) irrevocably waives any immunity from jurisdiction to which it might
otherwise be entitled in any such action, suit or proceeding which may be
instituted in any state or federal court sitting in the Borough of Manhattan in
the State of New York, and irrevocably waives any immunity from, or

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objection to, the maintaining of an action against it to enforce any judgment
for money obtained in any such action, suit or proceeding and any immunity from
execution.

SECTION 23. WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER OPERATIVE
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR THE SUBJECT
MATTER OF ANY OF THE FOREGOING.

SECTION 24. GOVERNING LAW.

THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN THE CITY OF NEW
YORK, STATE OF NEW YORK, UNITED STATES OF AMERICA. THIS AGREEMENT AND (UNLESS
OTHERWISE EXPRESSLY PROVIDED) ALL AMENDMENTS AND SUPPLEMENTS TO, AND ALL
CONSENTS AND WAIVERS PURSUANT TO, THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.

SECTION 25. CONFIDENTIAL INFORMATION.

For the purposes of this Section 25, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Restricted
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of the Company or such Restricted Subsidiary,
PROVIDED that such term does not include information that (a) was publicly known
or otherwise known to you prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by you or any person acting on
your behalf, (c) otherwise becomes known to you other than through disclosure by
the Company or any Restricted Subsidiary or (d) constitutes financial statements
delivered to you under Section 7 that are otherwise

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publicly available. You will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good faith to
protect confidential information of third parties delivered to you, PROVIDED
that you may deliver or disclose Confidential Information to (i) your directors,
trustees, officers, employees, agents, attorneys and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by your Notes), (ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 25, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you sell or offer
to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 25), (v) any Person
from which you offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 25), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing, to
the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 25 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 25.

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If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this Agreement and return the same to
the undersigned, whereupon this Agreement shall become a binding agreement
between you and the undersigned.

Very truly yours,

CORNERSTONE PROPANE, L.P.

By: CORNERSTONE PROPANE G.P., INC.
as General Partner

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

By: CORNERSTONE PROPANE G.P., INC.

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

By: SYN, INC.

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

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The foregoing Agreement is
hereby accepted and agreed
to as of the date first
above written.

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

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FORM OF
CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

This Contribution, Conveyance and Assumption Agreement, dated as of
December ____, 1996 is entered into by and among CORNERSTONE PROPANE PARTNERS,
L.P., a Delaware limited partnership (the "MLP"), CORNERSTONE PROPANE, L.P., a
Delaware limited partnership (the "OLP"), CORNERSTONE PROPANE GP, INC., a
California corporation formerly known as Coast Gas, Inc. (the "MANAGING GP"),
EMPIRE ENERGY SC CORPORATION, a Delaware corporation ("SC"), and SYN INC., a
Delaware corporation ("SYN"; the Managing GP, SC and SYN are sometimes referred
to herein individually as a "TRANSFEROR" and collectively as the "TRANSFERORS").

RECITALS

WHEREAS, Cornerstone Propane GP, Inc., a Delaware corporation (the
"OGP"), as general partner, and Northwestern Growth Corporation, a South Dakota
corporation ("NGC"), as organizational limited partner, formed the MLP pursuant
to the Delaware Revised Uniform Limited Partnership Act (the "DELAWARE ACT");

WHEREAS, the OGP, as general partner, and the MLP, as organizational
limited partner, formed the OLP pursuant to the Delaware Act;

WHEREAS, as part of the actions taken prior to the execution of this
Agreement, (i) certain of the Operating Subsidiaries (as defined below) of
Empire Energy Corporation, a Tennessee corporation ("EEC"), contributed to SC,
then an indirect, wholly-owned subsidiary of EEC, certain assets as a capital
contribution and in exchange SC assumed certain indebtedness to EEC which
originally was incurred by such subsidiaries in connection with their
acquisition of such assets;

<PAGE>

and, after the aforesaid capital contributions to SC and assumption of
indebtedness by SC, the Operating Subsidiaries of EEC (other than SC) merged
with and into EEC; (ii) the Operating Subsidiaries of SYN merged with and into
SYN; (iii) NGC, the owner of all of the outstanding capital stock of EEC, Myers
Propane Gas Company, a Delaware corporation ("MYERS"), and the OGP and certain
common stock of SYN, contributed to CGI Holdings, Inc., a Delaware corporation
("CGI HOLDINGS"), then a wholly owned subsidiary of NGC, that stock and certain
property as a capital contribution and in exchange CGI Holdings assumed certain
indebtedness incurred by NGC in connection with the acquisition of such stock
and property; and (iv) after the aforesaid capital contributions to CGI Holdings
and assumption of indebtedness by CGI Holdings, CGI Holdings contributed the
stock and property contributed to it, together with the outstanding capital
stock of Paugh Enterprises, Inc., a Nevada corporation ("PEI"), its
wholly-owned subsidiary, and the Acquired Businesses (as defined below) to the
Managing GP and in exchange the Managing GP assumed certain indebtedness
incurred in connection with the acquisition of said stock and property and the
Acquired Businesses;

WHEREAS, after the aforesaid contributions to capital and assumptions
of indebtedness, Coast Energy Group, Inc., a Delaware corporation ("CEG"), PEI,
EEC, Myers and the OGP, all then wholly owned subsidiaries of the Managing GP,
merged with and into the Managing GP and the Managing GP changed its name to
Cornerstone Propane GP, Inc., and as a result of all of the aforesaid
contributions to capital, mergers and assumptions of indebtedness, the Managing
GP became the successor to the business, assets and liabilities of CEG, PEI,
EEC, Myers and the OGP, including the general partner interests in the MLP and
the OLP formerly held by the OGP, and the Acquired Businesses;

-2-

<PAGE>

WHEREAS, SYN became a special general partner of the OLP and the MLP;

WHEREAS, immediately prior to the execution of this Agreement, the
Managing GP, as managing general partner, SYN, as special general partner, and
the MLP, as organizational limited partner, entered into that certain Amended
and Restated Agreement of Limited Partnership of the OLP (the "OLP PARTNERSHIP
AGREEMENT"), and the Managing GP, as managing general partner, SYN, as special
general partner, and NGC, as organizational limited partner, entered into that
certain Amended and Restated Agreement of Limited Partnership of the MLP (the
"MLP PARTNERSHIP AGREEMENT");

WHEREAS, the Managing GP, SC and SYN desire, as contemplated in the
OLP Partnership Agreement, to contribute certain of their respective assets as
capital contributions to the OLP, and, as contemplated in the MLP Partnership
Agreement, to contribute the limited partner interests each acquired in the OLP
as a result of the aforesaid contributions as capital contributions to the MLP,
in each case subject to the terms and conditions set forth below; and

WHEREAS, in connection with the transactions contemplated below, the
MLP is closing the Public Offering (as defined below) and the OLP is closing the
Note Offering (as defined below) and obtaining certain loans and other financial
accommodations under the Credit Agreement (as defined below) to provide the
funds and other financial accommodations needed to consummate the transactions
on the terms and conditions set forth below;

NOW, THEREFORE, in consideration of their mutual undertakings and
agreements hereunder, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
undertake and agree as follows:

1. DEFINITIONS.

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<PAGE>

1.1 GENERAL TERMS. When used herein, the following terms shall have
the following meanings:

"ACQUIRED BUSINESSES" shall mean the business conducted by CGI
Acquisition with the assets acquired pursuant to (i) that certain Agreement of
Purchase and Sale of Assets dated October ___, 1996 between Antelope Valley Gas
Company, Inc., a California corporation, and CGI Acquisition and (ii) that
certain Agreement of Purchase and Sale of Assets dated ________, 1996 between
Garvin Plumbing Inc., a California corporation, and CGI Acquisition; and which
business and assets were acquired by CGI Holdings as a result of the merger of
CGI Acquisition with and into CGI Holdings.

"ADDITIONAL ACQUISITION DOCUMENTS" means, collectively, that certain
Asset Purchase Agreement dated as of July 25, 1995 between SYN and EEC and all
agreements and documents entered into in connection with the acquisition
contemplated therein, in each case as amended from time to time.

"AFFILIATE" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the Person in question. As used
herein, the term "CONTROL" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise. Notwithstanding anything contained in this definition to the
contrary, the term Affiliate, (i) with respect to the OLP shall mean only the
MLP and the OLP Subsidiary and any Person directly or indirectly controlled by
the MLP, the OLP or the OLP Subsidiary, (ii) with respect to the MLP shall mean
only the OLP and the OLP Subsidiary and any Person directly or indirectly
controlled by the MLP, the OLP or the OLP

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Subsidiary, and (iii) with respect to each Transferor shall exclude the OLP, the
MLP and all other Affiliates of the OLP and the MLP.

"AGREEMENT" means this Contribution, Conveyance and Assumption
Agreement, as amended, modified or supplemented from time to time.

"ASG" means All Star Gas Corporation, a Missouri corporation formerly
known as Empire Gas Corporation.

"ASSETS" has the meaning assigned to such term in SCHEDULE 1.1 as
applied to any individual Transferor and as applied to the Transferors,
collectively, means the Managing GP Assets, the SC Assets and the SYN Assets.

"ASSUMED ADDITIONAL MANAGING GP DEBT" means the indebtedness of
____________, in the amount of ____________, under capitalized leases relating
to LPG tanks, bobtail trucks, office equipment and certain other vehicles and
equipment.

"ASSUMED ADDITIONAL SYN DEBT" means .

"ASSUMED CGI ACQUISITION DEBT" means the indebtedness evidenced by
that certain Amended and Restated Promissory Note dated December __, 1996 made
by CGI Acquisition to the order of ____________ in the principal amount of
$____________, representing certain indebtedness incurred by CGI Acquisition in
connection with its acquisition of PEI and the Acquired Businesses, which
indebtedness was assumed by the Managing GP as a result of the Related
Transactions.

"ASSUMED EEC DEBT" means the indebtedness of EEC (other than the
Excluded EEC Debt) under or in connection with that certain Credit Agreement
dated as of August 1, 1996 among EEC, certain subsidiaries of EEC, the lenders
from time to time parties thereto and The First

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National Bank of Boston, as agent for such lenders, as amended to date, and the
"Credit Documents" referred to therein, including any accrued interest and any
premium, fees and other amounts which may become payable in connection
therewith, and which indebtedness was assumed by the Managing GP as a result of
the Related Transactions.

"ASSUMED L/C FACILITY" shall mean the Continuing Letter of Credit
Agreement dated August 28, 1992 between CEG and Banque Paribas, as amended to
date, the "Credits" referred to therein, the Continuing Guaranty of the
Corporation dated August 28, 1992 made by the Managing GP in favor of Banque
Paribas and the agreements and documents entered into with respect to the
facilities provided to CEG referred to therein.

"ASSUMED LIABILITIES" means as to any individual Transferor, all of
the liabilities or obligations of such Transferor, including those to which the
Transferor has succeeded, whether by contract, merger or liquidation of its
subsidiaries or otherwise, arising from or relating to the Assets of such
Transferor or the operation of the Business of such Transferor, whether by such
Transferor or its predecessors (whether or not in the ordinary course), of every
kind, character and description, and (i) whether matured or unmatured, known or
unknown, fixed or contingent, or liquidated or unliquidated, (ii) whether or not
reflected on the books and records of such Transferor as of the Effective Time,
and (iii) regardless of whether asserted or determined prior to, at or
subsequent to the Effective Time; PROVIDED, HOWEVER, notwithstanding the
foregoing, the Assumed Liabilities of any Transferor shall not include any
liabilities or obligations to the extent that they constitute Excluded
Liabilities of such Transferor; and means as to the Transferors, collectively,
all of the foregoing as to all of the Transferors.

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"ASSUMED MANAGING GP DEBT" means, collectively, the indebtedness of
the Managing GP under or in connection with (i) that certain Credit Agreement
dated as of September 14, 1994 among the Managing GP, CEG, the lenders from time
to time parties thereto and Bank of America, Illinois, as agent to the lenders,
as amended to date, and the "Loan Documents" referred to therein, including any
accrued interest and any premium, fees and other amounts which may become
payable in connection therewith, (ii) the Securities Purchase Agreement dated as
of September 14, 1994 among the Managing GP, CEG, CGI Holdings and the several
buyers referred to therein, as amended to date, with respect to the 12.05%
Senior Secured Notes due December 15, 2004 issued by the Managing GP and the
"Transaction Documents" referred to therein, including any accrued interest and
any premium, fees and other amounts which may become payable in connection
therewith, and (iii) the Assumed L/C Facility, including any accrued interest
and any premium, fees and other amounts which may become payable in connection
therewith.

"ASSUMED NGC ACQUISITION DEBT" means, collectively, the indebtedness
of NGC under or in connection with (i) that certain Promissory Note dated
December ____, 1996 made by NGC to the order of ASG in the principal amount of
$18,000,000 and that certain Promissory Note dated December ____, 1996 made by
NGC to the order of Paul S. Lindsey, Jr. in the principal amount of $2,000,000,
representing indebtedness incurred in the connection with NGC's acquisition of,
among other things, the common stock of SYN and Myers then owned by ASG and
certain additional rights and (ii) that certain Promissory Note dated December
____, 1996 made by NGC to the order of NPS in the principal amount of
$22,000,000, representing the aggregate amount of indebtedness incurred by NGC
in connection with NGC's acquisition of EEC, certain indebtedness of EEC owed to
a former stockholder of EEC and certain rights of such stockholder against SYN

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under the Additional Acquisition Documents; and which indebtedness was assumed
by the Managing GP as a result of the Related Transactions.

"ASSUMED NGC ADDITIONAL ACQUISITION DEBT" means the indebtedness
evidenced by that certain Short Term Note dated December ___, 1996 made by NGC
to the order of Keith G. Baxter, Gerald Parky and Richard K. Roader in the
principal amount of $____________, representing indebtedness incurred in
connection with NGC's acquisition of CGI Holdings, and which indebtedness was
assumed by the Managing Partner as a result of the Related Transactions.

"ASSUMED NGC DEBT" means, collectively, the Assumed NGC Acquisition
Debt and the Assumed NGC Additional Acquisition Debt.

"ASSUMED SC DEBT" means the indebtedness of SC under or in connection
with the SC Note.

"ASSUMED SYN DEBT" means, collectively, the indebtedness of SYN under
or in connection with (i) that certain Term Loan Agreement dated as of July 31,
1996 between SYN and NPS, as amended to date, and the "Credit Documents"
referred to therein, including any accrued interest and any premium, fees and
other amounts which may become payable in connection therewith, and (ii) that
certain Credit Agreement dated as of December 28, 1995 among SYN, certain
subsidiaries of SYN named therein, the lenders from time to time parties thereto
and The First National Bank of Boston, as agent for such lenders, as amended to
date, and the "Credit Documents" referred to therein, including any accrued
interest and any premium, fees and other amounts which may become payable in
connection therewith.

"BUSINESS" means, with respect to any Transferor, the businesses
currently conducted by such Transferor and any that were previously conducted by
such Transferor or any of the

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subsidiaries of such Transferor which were merged or liquidated into such
Transferor, in each case that are included among the following, namely, the sale
and distribution of natural gas, crude oil, natural gas liquids, LPG, and other
petroleum derived products, LPG storage and transportation equipment,
appliances, parts and fittings relating to the foregoing and transportation,
storage, repair, labor and other services relating to any of the foregoing.

"CASE HANDLER" has the meaning assigned to such term in Section 6.5.

"CEG" has the meaning assigned to such term in the Recitals to this
Agreement.

"CGI ACQUISITION" means CGI Acquisition Corporation, a Delaware
corporation which merged with and into CGI Holdings when NGC acquired CGI
Holdings.

"CGI HOLDINGS" has the meaning assigned to such term in the Recitals
to this Agreement.

"CLOSING DATE" means December ___, 1996 or such other date as the
parties may mutually agree.

"COAST ACQUISITION DOCUMENTS" means, collectively, the Stock Purchase
and Merger Agreement dated September 4, 1996 among NGC, CGI Acquisition, CGI
Holdings and the holders of all of the preferred stock of CGI Holdings and all
agreements and documents entered into in connection with the acquisitions and
transactions contemplated therein, in each case as amended from time to time.

"COMMITMENTS" has the meaning assigned to such term in Section 3.2.

"COMMON UNITS" has the meaning assigned to such term in the MLP
Partnership Agreement.

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"CREDIT AGREEMENT" means the Credit Agreement dated as of December
___, 1996 among the OLP, Bank of America National Trust and Savings Association,
as agent, and the financial institutions listed therein, providing for
borrowing and letters of credit under a working capital facility in an aggregate
principal amount of up to $50,000,000 and borrowing under an acquisition and
expansion facility in an aggregate principal amount of up to $75,000,000.

"DELAWARE ACT" has the meaning assigned to such term in the Recitals
to this Agreement.

"DISPUTE" has the meaning assigned to such term in Section 9.

"EEC" has the meaning assigned to such term in the Recitals to this
Agreement.

"EEC ACQUISITION DOCUMENTS" means, collectively, that certain
Agreement and Plan of Merger dated as of September 6, 1996 among NGC, EEC Co., a
Tennessee corporation, EEC and certain stockholders of EEC and all agreements
and documents entered into in connection with the acquisition and transactions
contemplated therein, in each case as amended from time to time.

"EFFECTIVE TIME" means ______ a.m., Eastern Standard Time, on the
Closing Date.

"ENVIRONMENTAL LAWs" means any and all Laws relating to the protection
of the environment, pollution or the release of materials into the environment
or occupational health and safety matters.

"EXCLUDED ASSETS" means, collectively, the Excluded Managing GP
Assets, the Excluded SC Assets and the Excluded SYN Assets.

"EXCLUDED EEC DEBT" means the indebtedness of EEC in the aggregate
amount equal to the Assumed SC Debt under or in connection with that certain
Credit Agreement dated as of August 1, 1996 among EEC, certain subsidiaries of
EEC, the lenders from time to time parties

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thereto and The First National Bank of Boston, as agent for such lenders, as
amended to date, and the "Credit Documents" referred to therein, and which
indebtedness was assumed by the Managing GP as a result of the Related
Transactions.

"EXCLUDED LIABILITIES" means, collectively, the Excluded Managing GP
Liabilities, the Excluded SC Liabilities and the Excluded SYN Liabilities.

"EXCLUDED MANAGING GP ASSETS" has the meaning assigned to such term in
SCHEDULE 1.2(A).

"EXCLUDED MANAGING GP LIABILITIES" has the meaning assigned to such
term in SCHEDULE 1.3(A).

"EXCLUDED SC ASSETS" has the meaning assigned to such term in SCHEDULE
1.2(B).

"EXCLUDED SC LIABILITIES" has the meaning assigned to such term in
SCHEDULE 1.3(B).

"EXCLUDED SYN ASSETS" has the meaning assigned to such term in
SCHEDULE 1.2(C).

"EXCLUDED SYN LIABILITIES" has the meaning assigned to such term in
SCHEDULE 1.3(C).

"FEES AND EXPENSES" means the Financing Expenses and the Public
Offering Expenses.

"FINANCING EXPENSES" means all commissions, fees and other
out-of-pocket expenses (including fees and expenses of accountants, attorneys,
consultants or other agents) incurred, paid or payable by or on behalf of the
OLP to the administrative agent, the co-agent, the lenders, the placement agent,
the note purchasers or other Persons in connection with the Credit Agreement or
the Note Offering.

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"GP INTEREST" means with respect to the OLP or the MLP, an interest in
the profits, losses and capital of the OLP or the MLP, as the case may be, that
provides the holder thereof with the rights and obligations of a general partner
in accordance with the OLP Partnership Agreement or the MLP Partnership
Agreement, as the case may be.

"INCENTIVE DISTRIBUTION RIGHTS" has the meaning assigned to such term
in the MLP Partnership Agreement.

"INDEMNIFIED PARTY" has the meaning assigned to such term in Section
6.4.

"INDEMNIFYING PARTY" has the meaning assigned to such term in Section
6.4

"INFORMATION" has the meaning assigned to such term in Section 10.2.

"INTERESTS" has the meaning assigned to such term in Section 3.2.

"LAWS" means any and all laws, statutes, ordinances, rules or
regulations promulgated by a governmental authority, orders, decrees or
decisions of a court or other adjudicative, regulatory or other governmental
authority, decisions or determinations of any arbitrator in an arbitration
proceeding or other binding determinations of any court or adjudicative,
regulatory or other governmental authority.

"LITIGATION AND CLAIMS" means litigation and actions pending or
threatened or claims alleged against any of the Transferor Parties or any of the
OLP Parties, including civil and criminal actions, workers' compensation
proceedings, administrative and regulatory proceedings, investigations, audits,
inquiries, demands, claims (including any title claims relating to real
properties), whether pending, threatened or alleged before, at or after the
Effective Time.

"LITIGATION RECORDS" has the meaning assigned to such term in Section
6.6.

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"LP INTEREST" means, with respect to the OLP or the MLP, an interest
in the profits, losses and capital of the OLP or the MLP, as the case may be,
that provides the holder thereof with the rights and obligations of a limited
partner in accordance with the OLP Partnership Agreement or the MLP Partnership
Agreement, as the case may be.

"LPG" means liquefied petroleum gas.

"MANAGERS" means the managers for the several Underwriters listed in
Schedule I to the Underwriting Agreement.

"MANAGING GP" has the meaning assigned to such term in the opening
paragraph of this Agreement.

"MANAGING GP ASSETS" means the Managing GP's Assets.

"MLP" has the meaning assigned to such term in the opening paragraph
of this Agreement.

"MLP PARTNERSHIP AGREEMENT" has the meaning assigned to such term in
the Recitals to this Agreement.

"MYERS" has the meaning assigned to such term in the Recitals to this
Agreement.

"NET OVER-ALLOTMENT PROCEEDS" means the gross proceeds received by the
MLP from the Underwriters in connection with the exercise by the Underwriters'
of the Over-Allotment Option, net of the Over-Allotment UW Discount.

"NGC" has the meaning assigned to such term in the Recitals to this
Agreement.

"NOTE AGREEMENT" means the Note Agreement dated as of December ___,
1996 among the OLP, the Managing GP, SYN and the several purchasers named
therein, relating to the Note Offering.

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"NOTE OFFERING" means the issuance and sale of an aggregate
$220,000,000 of senior secured notes due December __, 2010 of the OLP pursuant
to the Note Agreement.

"NPS" means Northwestern Public Service Corporation, a Delaware
corporation.

"OGP" has the meaning assigned to such term in the Recitals to this
Agreement.

"OLP" has the meaning assigned to such term in the opening paragraph
of this Agreement.

"OLP DAMAGES" has the meaning assigned to such term in Section 6.1.

"OLP PARTIES" means the OLP and any Affiliate of the OLP, and any of
their respective general partners, directors, officers or employees, in their
capacities as such, or successors or assigns.

"OLP PARTNERSHIP AGREEMENT" has the meaning assigned to such term in
the Recitals to this Agreement.

"OLP SUBSIDIARY" means Cornerstone Sales and Service Corporation, a
Delaware corporation, a wholly-owned subsidiary of the OLP.

"OPERATING SUBSIDIARIES" means (i) with respect to the EEC, the direct
or indirect wholly-owned subsidiaries of EEC which were merged with and into
the EEC on or about December ___, 1996; and (ii) with respect to SYN, the
direct or indirect wholly-owned subsidiaries of SYN which were merged with and
into SYN on or about December ___, 1996.

"OVER-ALLOTMENT OPTION" shall mean the over-allotment option granted
to the Underwriters under the Underwriting Agreement.

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"OVER-ALLOTMENT UW DISCOUNT" means the amount of underwriting
discounts and commissions on the securities sold to the Underwriters in
connection with the exercise of the Over-Allotment Option.

"PEI" has the meaning assigned to such term in the Recitals to this
Agreement.

"PERCENTAGE INTERESTS" has, with respect to the OLP, the meaning
assigned to such term in the OLP Partnership Agreement and, with respect to the
MLP, the meaning assigned to such term in the MLP Partnership Agreement.

"PERSON" means an individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.

"PROMISSORY NOTE" means that certain Promissory Note dated December
__, 1996 made by the OLP and the MLP to the order of NPS in the principal amount
of $____________ and representing advances made by NPS to the OLP and the MLP
for purposes of paying certain Transaction Expenses.

"PUBLIC OFFERING" means the initial public offering and sale of up to
9,821,000 Common Units (assuming the Over-Allotment Option is exercised in
full).

"PUBLIC OFFERING EXPENSES" means all underwriting discounts and
commissions (other than the Over-Allotment UW Discount) and fees and other
out-of-pocket expenses (including fees and expenses of accountants, attorneys,
printers, consultants or other agents) incurred, paid or payable by or on behalf
of the MLP to the Underwriters or other Persons in connection with the Public
Offering.

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"RELATED TRANSACTIONS" means the transactions referred to in the third
and fourth paragraphs in the Recitals to this Agreement.

"REMAINING ASSUMED DEBT" means the Assumed SYN Debt, the Assumed
Additional SYN Debt, the Assumed Managing GP Debt, the Assumed Additional
Managing GP Debt and the Assumed SC Debt.

"SC" has the meaning assigned to such term in the opening paragraph of
this Agreement.

"SC ASSETS" means SC's Assets.

"SC NOTE" means that certain Amended and Restated Promissory Note
dated December ____, 1996 made by SC to the order of EEC in the principal amount
of $__________, representing the remaining portion of the indebtedness
originally incurred by certain subsidiaries of EEC in connection with the
acquisition of certain assets from SYN pursuant to the Additional Acquisition
Documents, and which indebtedness was assumed by SC as a part of the Related
Transactions.

"SELLING STOCKHOLDERS" means Sherman C. Vogel, Stephen A. Vogel,
Jeffrey K. Vogel, Jon M. Vogel and Jeanette Vogel.

"SERVICE ASSETS" means, with respect to any Transferor, that portion
of such Transferor's Assets described in SCHEDULE 1.4.

"SERVICE BUSINESS" has the meaning assigned to such term in SCHEDULE
1.4.

"SPECIFIC CONVEYANCES" has the meaning assigned to such term in
Section 3.1.

"SUBORDINATED UNITS" has the meaning assigned to such term in the MLP
Partnership Agreement.

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"SYN" has the meaning assigned to such term in the opening paragraph
of this Agreement.

"SYN ACQUISITION DOCUMENTS" means, collectively, the Purchase and Sale
Agreement dated as of May 17, 1995 among the Selling Stockholders, Synergy Group
Incorporated, a Delaware corporation, S & J Investments, SYN and NGC and all
agreements and documents entered into in connection with the acquisition
contemplated therein, in each case as amended from time to time.

"SYN ASSETS" means SYN's Assets.

"TRANSACTION DOCUMENTS" means this Agreement, the Underwriting
Agreement, the MLP Partnership Agreement, the OLP Partnership Agreement, the
Note Agreement and the Credit Agreement.

"TRANSACTION EXPENSES" means the Financing Expenses, the Public
Offering Expenses and the Transfer Expenses.

"TRANSFER EXPENSES" means all out-of-pocket expenses, fees and costs,
including all sales, use and similar taxes and documentary, filing, recording,
transfer, deed or conveyance fees or taxes, in each case, that were or are
incurred or paid or proposed to be incurred or paid in connection with the
contributions, conveyances and deliveries to be made hereunder or in connection
with any of the Related Transactions; PROVIDED, HOWEVER, that Transfer Expenses
do not include any such items that are included in Financing Expenses, Public
Offering Expenses or the Over-Allotment UW Discount.

"TRANSFEROR" and "TRANSFERORS" have the meanings assigned to such
terms in the opening paragraph of this Agreement.

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"TRANSFEROR DAMAGES" has the meaning assigned to such term in Section
6.2.

"TRANSFEROR PARTIES" means each Transferor and any Affiliate of any
Transferor, and any of their respective general partners, directors, officers,
employees, in their capacities as such, and, except to the extent such Persons
are OLP Parties, their successors or assigns.

"UNDERWRITERS" means each Person named as an underwriter in Schedule I
to the Underwriting Agreement.

"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated
December __, 1996 among the MLP, the OLP, the Managing GP, SYN and each of the
Managers relating to the Public Offering.

1.2 HEADINGS; REFERENCES; INTERPRETATION. All Article and Section
headings in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any of the provisions hereof.
The words "hereof," "herein" and "hereunder" and words of similar import, when
used in this Agreement, shall refer to this Agreement as a whole, including all
Schedules attached hereto, and not to any particular provision of this
Agreement. All references herein to Sections and Schedules shall, unless the
context requires a different construction, be deemed to be references to the
Sections of this Agreement and the Schedules attached hereto, and all such
Schedules attached hereto are hereby incorporated herein and made a part hereof
for all purposes. All personal pronouns used in this Agreement, whether used in
the masculine, feminine or neuter gender, shall include all other genders, and
the singular shall include the plural and vice versa. The use herein of the
word "including" following any general statement, term or matter shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not

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non-limiting language (such as "without limitation," "but not limited to," or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that could reasonably fall within
the broadest possible scope of such general statement, term or matter.

2. TRANSACTIONS. The transactions described in this Section 2 are
occurring on the Closing Date in the order set forth below.

2.1 CONTRIBUTIONS TO THE OLP.

(a) Effective as of the Effective Time, (i) the Managing GP hereby
grants, conveys, assigns, transfers, sets over, contributes and delivers to the
OLP all right, title and interest of the Managing GP in and to the Managing GP
Assets, together with all rights and appurtenances thereto in any wise
belonging; (ii) SYN hereby grants, conveys, assigns, transfers, sets over,
contributes and delivers to the OLP all right, title and interest of SYN in and
to the SYN Assets, together with all rights and appurtenances thereto in any
wise belonging; and (iii) SC hereby grants, conveys, assigns, transfers, sets
over, contributes and delivers to the OLP all right, title and interest of SC in
and to the SC Assets, together with all rights and appurtenances thereto in any
wise belonging; in each case in exchange for the consideration stated in Section
2.1(b) and Section 2.2, and other good and valuable consideration, the
sufficiency of which is hereby acknowledged by each of the Transferors, and TO
HAVE AND TO HOLD such Assets unto the OLP, its successors and assigns, for its
and their own use forever, subject, however, to the terms and conditions stated
in this Agreement.

(b) Effective as of the Effective Time, and simultaneously in
exchange for the transfer of the Assets pursuant to Section 2.1(a), and other
good and valuable consideration, the sufficiency of which is hereby acknowledged
by the OLP, the OLP hereby (i) accepts the Managing

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GP Assets as a contribution to the capital of the OLP, continues the Managing
GP's ___% GP Interest in the OLP, issues to the Managing GP an LP Interest in
the OLP and assumes the Managing GP's Assumed Liabilities as provided in Section
4; (ii) accepts the SYN Assets as a contribution to the capital of the OLP,
continues SYN's ____% GP Interest in the OLP, issues to SYN an LP Interest in
the OLP and assumes SYN's Assumed Liabilities as provided in Section 4; and
(iii) accepts the SC Assets as a contribution to the capital of the OLP, issues
to SC an LP Interest in the OLP and assumes SC's Assumed Liabilities as provided
in Section 4.

2.2 FINANCING AND REPAYMENT OF CERTAIN DEBT. On the Closing Date,
immediately following the transactions described in Section 2.1 becoming
effective, the OLP, using the proceeds of the Note Offering, advances made under
the Credit Agreement and letters of credit issued under the Credit Agreement (i)
is repaying in full the Assumed NGC Debt, the Assumed CGI Acquisition Debt and
the Assumed EEC Debt and is issuing letters of credit necessary to provide
substitute collateral for any outstanding letters of credit which are part of
the Assumed Liabilities, (ii) is paying $___________ of Transaction Expenses and
(iii) is distributing $___________ to SYN.

2.3 CONTRIBUTIONS TO MLP.

(a) On the Closing Date, effective immediately following the
consummation of the transactions described in Section 2.2, (i) the Managing GP
hereby grants, conveys, assigns, transfers, sets over, contributes and delivers
to the MLP all right, title and interest of the Managing GP in and to its LP
Interest in the OLP, together with all rights and appurtenances thereto in any
wise belonging; (ii) SYN hereby grants, conveys,

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assigns, transfers, sets over, contributes and delivers to the MLP all right,
title and interest of SYN in and to its LP Interest in the OLP, together with
all rights and appurtenances thereto in any wise belonging; and (iii) SC hereby
grants, conveys, assigns, transfers, sets over, contributes and delivers to the
MLP all right, title and interest of SC in and to its LP Interest in the OLP,
together with all rights and appurtenances thereto in any wise belonging; in
each case in exchange for the consideration stated in Section 2.3(b) and other
good and valuable consideration, the sufficiency of which is hereby acknowledged
by each of the Transferors, and TO HAVE AND TO HOLD such LP Interests unto the
MLP, its successors and assigns, for its and their own use forever, subject,
however, to the terms and conditions stated in this Agreement.

(b) On the Closing Date, effective simultaneously with and in
exchange for the transfer of the LP Interests pursuant to Section 2.3(a), and
other good and valuable consideration, the sufficiency of which is hereby
acknowledged by the MLP, the MLP hereby (i) accepts the LP Interest of the
Managing GP in the OLP as an additional contribution to the capital of the MLP,
continues the Managing GP's ___% GP Interest in the MLP and issues to the
Managing GP _____ Subordinated Units and _____ Incentive Distribution Rights;
(ii) accepts the LP Interest of SYN in the OLP as an additional contribution to
the capital of the MLP, continues SYN's ____% GP Interest in the MLP and issues
to SYN _____ Subordinated Units and _____ Incentive Distribution Rights; and
(iii) accepts the LP Interest of SYN in the OLP as a contribution to the capital
of the MLP and issues to SC _____ Subordinated Units.

2.4 MLP TRANSFERS TO THE OLP. On the Closing Date, effective
immediately following the consummation of the transactions described in Section
2.3, (a) the MLP is redeeming the LP Interest of NGC as organizational limited
partner in the MLP using a portion the gross proceeds of the Public Offering for
such purpose and is contributing in immediately available funds

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the remaining gross proceeds of the Public Offering to the OLP, and (b)
effective upon the receipt of such funds the OLP hereby accepts such funds as a
contribution to capital of the OLP.

2.5 REPAYMENT OF REMAINING DEBT. On the Closing Date, effective
immediately following the consummation of the transactions described in Section
2.4, (a) the OLP (i) is repaying in full the Remaining Assumed Debt using the
funds contributed to the OLP by the MLP pursuant to Section 2.4 and (ii) is
paying in full the remaining Fees and Expenses and any other Transaction
Expenses then due and payable using any monies remaining from the funds
contributed to the OLP by the MLP pursuant to Section 2.4 and the proceeds of
the Promissory Note, and (b) with the monies received from the OLP in payment of
the Assumed SC Debt, the Managing GP is repaying in full the Excluded EEC Debt.

2.6 OVER-ALLOTMENT OPTION. If the Over-Allotment Option has been
exercised prior to the Effective Time so as to close on the Closing Date, then
immediately following the consummation of the transactions described in Section
2.5 and the MLP's receipt of the Net Over-Allotment Proceeds, the MLP will pay
the Promissory Note using the Net Over-Allotment Proceeds and, if any such
proceeds remain after the payment of the Promissory Note in full, the MLP will
use any such remaining proceeds to redeem a portion of the Subordinated Units
held by each of the holders thereof in accordance with Section 5.3(b) of the MLP
Partnership Agreement. If the Over-Allotment Option is exercised prior to the
Effective Time so as to close on the Closing Date, but after application of the
Net Over-Allotment Proceeds as provided above, any balance on the Promissory
Note remains outstanding, then the Managing GP and SYN will contribute cash to
the MLP as required by Section 5.2(e) of the MLP Partnership Agreement in
exchange for additional Subordinated Units, and the MLP will use such cash to
repay the Promissory Note in full.

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2.7 CERTIFICATES. After giving effect to the transactions
contemplated by this Section 2 and any additional contributions of cash required
to be made by the Managing GP and SYN in connection with their GP Interests in
the OLP and the MLP pursuant to the OLP Partnership Agreement and the MLP
Partnership Agreement, (a) the Managing GP shall have a GP Interest in the OLP
with a Percentage Interest of ____%, SYN shall have a GP Interest in the OLP
with a Percentage Interest of ____%, and the MLP shall have an LP Interest in
the OLP with a Percentage Interest of ____%, and (b) (i) the Managing GP shall
have a GP Interest in the MLP with a Percentage Interest of ____%, ____
Subordinated Units (minus such number of Subordinated Units redeemed in
connection with the exercise of the Over-Allotment Option pursuant to Section
5.3(b) of the MLP Partnership Agreement or plus such number of Subordinated
Units required to be acquired pursuant to Section 5.2(e) of the MLP Partnership
Agreement, as the case may be) and ____ Incentive Distribution Rights, (ii) SYN
shall have a GP Interest in the MLP with a Percentage Interest of ___%, ___
Subordinated Units (minus such number of Subordinated Units redeemed in
connection with the exercise of the Over-Allotment Option pursuant to Section
5.3(b) of the MLP Partnership Agreement or plus such number of Subordinated
Units required to be acquired pursuant to Section 5.2(e) of the MLP Partnership
Agreement, as the case may be) and ______ Incentive Distribution Rights, and
(iii) SC shall have ____ Subordinated Units. Upon the request of any
Transferor, the MLP shall deliver to such Transferor or a Person designated by
such Transferor, one or more certificates representing the GP Interests in the
MLP held by such Transferor and any Subordinated Units and any Incentive
Distribution Rights issued to such Transferor, which certificates shall be
issued in the name and denominations as requested by such Transferor.

3. PROVISIONS RELATING TO TRANSFER OF ASSETS.

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3.1 SPECIFIC CONVEYANCES. To further evidence the conveyances,
assignments, transfers and contributions herein and more fully and effectively
convey record title with respect to the real property and certain other property
included in the Assets transferred by the Transferors, each Transferor has
executed and delivered to the OLP certain additional conveyance instruments (the
"SPECIFIC CONVEYANCES") with respect to certain of the Assets being transferred
by it. The Specific Conveyances shall evidence and perfect the conveyances,
assignments, transfers and contributions made by this Agreement and shall not
constitute an additional conveyance, assignment, transfer or contribution of
such Assets, and each Specific Conveyance shall be subject to the terms of this
Agreement. The Specific Conveyances are not intended to modify, and shall not
modify, any of the terms, covenants and conditions herein set forth and are not
intended to create, and shall not create, any additional covenants or warranties
of or by the Transferor.

3.2 NONASSIGNABILITY OF ASSETS. To the extent that any license,
permit, agreement, lease, sales or purchase order, commitment or other contract,
property interest, qualification or asset described in this Agreement as being
sold, assigned, transferred or conveyed to the OLP by any Transferor
(collectively the "COMMITMENTS") or any claim, right or benefit arising
thereunder or resulting therefrom (collectively, together with the Commitments,
the "INTERESTS"), is not capable of being sold, assigned, transferred or
conveyed without the approval, consent or waiver of the issuer thereof or the
other party thereto, or any third Person, including a government or governmental
or regulatory authority, or if such sale, assignment, transfer or conveyance or
attempted sale, assignment, transfer or conveyance would be invalid, or would
destroy, terminate or eliminate (or permit any other Person to destroy,
terminate or eliminate) the Interests related thereto, or would constitute a
breach of a Commitment or a violation of any Law, then any provision in this

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Agreement or any Specific Conveyance to the contrary notwithstanding, this
Agreement shall not constitute a sale, assignment, transfer or conveyance
thereof or an attempted sale, assignment, transfer or conveyance thereof, but
the applicable Transferor and the OLP shall do such acts and things as may be
reasonably necessary give the OLP the full benefit in respect of the Interests
and the applicable Transferor the full benefit of the assumption of the Assumed
Liabilities with respect thereto, including using reasonable efforts in order
that any necessary third party shall execute such documents and do such acts and
things as may be reasonably required for such purpose (including any consent,
approval or amendment required to novate, reissue or assign the affected
Commitments); PROVIDED, HOWEVER, that neither such Transferor nor the OLP shall
be obligated to pay any consideration therefor (except for filing fees and other
similar charges which shall be paid by the OLP) to, or commence litigation
against, the third party or Person from whom such consents, approvals or
waivers are requested. If the applicable Transferor or the OLP is unable to
obtain any such required consent, approval or waiver, then until such required
consent, approval or waiver is obtained, and in the absence of any alternative
arrangement established by agreement between such Transferor and the OLP, the
applicable Transferor shall continue to be bound by such Commitments and the OLP
shall, as agent for the applicable Transferor or as subcontractor, pay, perform
and discharge fully all the obligations of such Transferor thereunder from and
after the Effective Time and indemnify and hold harmless such Transferor and its
Affiliates and their respective general partners, directors, officers and
employees, in their capacities as such, from and against, all losses, claims,
damages, taxes, liabilities and expenses whatsoever arising out of or in
connection with the OLP's performance of or omission to perform such
Transferor's obligations thereunder and hereunder, and the applicable Transferor
shall, without further consideration, pay and remit to the

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OLP (or its designee) promptly all money, rights and other consideration
received in respect of such performance after payment of any taxes, costs or
expenses due from the applicable Transferor (or its Affiliates) with respect to
such receipt. The applicable Transferor shall conduct itself in the exercise of
its rights under all such Commitments only as reasonably directed by the OLP and
at the OLP's expense. If and when any such approval, consent or waiver shall be
obtained or such Commitment shall otherwise become assignable or able to be
novated or such restriction shall have been satisfied or waived or no longer
apply, the assignment of the Assets and the assumption of the Assumed
Liabilities related to such approval, consent or waiver or restriction on
assignment and/or assumption shall become effective automatically as of the
Effective Time, without further action on the part of the Transferor, the OLP or
any other Person, and without payment of further consideration.

3.3 DIRECT TRANSFER TO THE OLP SUBSIDIARY. The OLP may, in its sole
discretion, direct one or more of Transferors to transfer the Service Assets
included in such respective Transferor's Assets directly to the OLP Subsidiary;
PROVIDED, HOWEVER, that any such transfer shall not relieve the OLP of any of
its obligations under this Agreement (including its obligations under Section 4
to assume the Assumed Liabilities and its obligations under Section 6 to
indemnify the Transferor Parties).

4. ASSUMPTION OF ASSUMED LIABILITIES. Effective the Effective Time,
in connection with the transfer and contribution of the Assets to the OLP by the
Transferors, the OLP hereby absolutely and irrevocably assumes and agrees to be
solely liable and responsible for and to duly and timely pay, perform and
discharge all of the Assumed Liabilities; PROVIDED, HOWEVER, that said
assumption and agreement to duly and timely pay, perform and discharge the
Assumed

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Liabilities shall not (a) increase the obligation of the OLP with respect to the
Assumed Liabilities beyond the obligation that the Transferors would have had if
this Agreement and the aforesaid assumption were not in effect, (b) waive any
valid defense that was available to any Transferor with respect to the Assumed
Liabilities or (c) enlarge any rights or remedies of any third party with
respect to any of the Assumed Liabilities.

5. TITLE MATTERS.

5.1 ENCUMBRANCES. The contribution of the Assets and assumption of
the Assumed Liabilities pursuant to this Agreement are made expressly subject to
(a) all recorded and unrecorded liens, encumbrances, agreements, defects,
restrictions, adverse claims and all Laws, in each case to the extent the same
are valid, enforceable and affect the Assets, including all matters that a
current survey or visual inspection of the Assets would reflect, (b) the Assumed
Liabilities and (c) all matters contained in the Specific Conveyances. It is
further agreed that the Specific Conveyances are subject to the provisions of
this Agreement, including this Section 5.1 and Section 3.2 and Section 5.2.

5.2 DISCLAIMER OF WARRANTIES; SUBROGATION; WAIVER OF BULK SALES LAWS.

(a) EACH TRANSFEROR IS CONVEYING THE ASSETS "AS IS WHERE IS" WITHOUT
REPRESENTATION OR WARRANTY, WHETHER EXPRESS, IMPLIED OR STATUTORY (ALL OF WHICH
EACH TRANSFEROR HEREBY DISCLAIMS), AS TO (i) TITLE, (ii) FITNESS FOR ANY
PARTICULAR PURPOSE, MERCHANTABILITY, DESIGN OR QUALITY, OR (iii) ANY OTHER
MATTER WHATSOEVER. THE PROVISIONS OF THIS SECTION 5.2 HAVE BEEN AGREED TO BY
EACH TRANSFEROR AND THE OLP AFTER DUE CONSIDERATION OF THE EFFECT THEREOF AND
THE AMOUNT OF

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CONSIDERATION BEING EXCHANGED FOR THE CONTRIBUTIONS BEING MADE AND ARE INTENDED
TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES OF
EACH TRANSFEROR, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE
ASSETS THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR
OTHERWISE, EXCEPT AS EXPRESSLY SET FORTH HEREIN.

(b) The transfer of the Assets made pursuant to this Agreement is
made with full rights of substitution and subrogation of the OLP, and all
persons claiming by, through and under the OLP, to the extent assignable, in and
to all covenants and warranties by the predecessors-in-title of each Transferor
(other than by any Transferor Parties), and with full subrogation of all rights
accruing under applicable statutes of limitation and all rights of action of
warranty against all former owners of the Assets (other than the Transferor
Parties and rights constituting Excluded Assets); and excluding in each case all
rights constituting Excluded Assets.

(c) The Transferors and the OLP agree that the disclaimers contained
in this Section 5.2 are "conspicuous" disclaimers. Any covenants implied by
statute or law by the use of the words "grant," "convey," "bargain," "sell,"
"assign," "transfer," "deliver," or "set over" or any of them or any other words
used in this Agreement are hereby expressly disclaimed, waived and negated.

(d) Each of the parties hereto hereby waives compliance with any
applicable bulk sales law or any similar law in any applicable jurisdiction in
respect of the transactions contemplated by this Agreement.

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(e) Except for the Excluded Liabilities as to such Person, the OLP
hereby forever waives any claim or right of action which it now or in the future
may ever have against any Transferor or any of the other Transferor Parties
arising out of or in connection with any Environmental Law with respect to the
Assets or the Business, and unconditionally releases the Transferors and the
other Transferor Parties from any and all liabilities, penalties, losses or
other damages for which any Transferor or any of the Transferor Parties may be
otherwise responsible pursuant to any Environmental Laws.

6. INDEMNIFICATION.

6.1 INDEMNIFICATION BY THE TRANSFEROR. Subject to Section 6.3,
without any further responsibility or liability of, or recourse to, any of the
OLP Parties, the Managing GP shall absolutely and irrevocably be liable and
responsible for the Excluded Managing GP Liabilities, SYN shall absolutely and
irrevocably be liable and responsible for the Excluded SYN Liabilities and SC
shall absolutely and irrevocably be liable and responsible for the Excluded SC
Liabilities. Nothing in this Agreement is intended or shall be construed to
make the OLP or any of the other OLP Parties liable for any of any of the
Excluded Liabilities.

Each Transferor shall indemnify, defend, save and hold harmless each
of the OLP Parties from and against all claims, liabilities, obligations,
losses, expenses, costs and costs of defense (as and when incurred), including
fines, charges, penalties, allegations, demands, damages (including actual,
punitive or consequential, foreseen or unforeseen, known or unknown),
settlements, awards, judgments, court costs and reasonable attorneys' and
consultants' fees, in each case of any kind, character or nature whatsoever, to
the extent arising out of (a) the Excluded Managing GP Liabilities if such
Transferor is the Managing GP, the Excluded SYN Liabilities if

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such Transferor is SYN or the Excluded SC Liabilities if such Transferor is SC,
(b) any failure of such Transferor to comply with any applicable bulk sales law
of any jurisdiction in connection with the transfers of such Transferor's Assets
to the OLP (other than in respect of such Transferor's Assumed Liabilities which
the OLP has assumed under this Agreement) or (c) the breach by such Transferor
of any of its obligations under this Agreement, all of which are hereinafter
collectively referred to as the "OLP DAMAGES".

OLP Damages with respect to which, but only to the extent that, any
proceeds are received by, or on behalf of, the OLP, the MLP or the OLP
Subsidiary or their respective successors or assigns from any insurance policy
(which are non-reimbursable by the OLP, the MLP, the OLP Subsidiary or such
successor or assign under any self insurance coverage), shall not be the subject
of indemnification under this Agreement.

6.2 INDEMNIFICATION BY THE OLP. Subject to Section 6.3, effective as
of the Effective Time, the OLP hereby without any further responsibility or
liability of, or recourse to, any of the Transferor Parties, absolutely and
irrevocably assumes and becomes liable and responsible for the Assumed
Liabilities. Nothing in this Agreement is intended or shall be construed to
cause any Transferor or any of the other Transferor Parties to become liable for
any of any of the Assumed Liabilities after the Effective Time.

The OLP shall indemnify, defend, save and hold harmless each of the
Transferor Parties from and against all claims, liabilities, obligations,
losses, expenses, costs and costs of defense (as and when incurred), including
fines, charges, penalties, allegations, demands, damages (including actual,
punitive or consequential, foreseen or unforeseen, known or unknown),
settlements, awards, judgments, court costs and reasonable attorneys' and
consultants' fees, in each

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case of any kind, character or nature whatsoever, to the extent arising out of
(a) the Assumed Liabilities or (b) the breach by any of the OLP Parties of any
of their obligations under this Agreement, all of which are hereinafter
collectively referred to as the "TRANSFEROR DAMAGES".

Transferor Damages incurred by any Transferor or its subsidiaries or
their respective successors or assigns (which are Transferor Parties) with
respect to which, but only to the extent that, any proceeds are received by, or
on behalf of, such Transferor, subsidiary, successor or assign from any
insurance policy (which are non-reimbursable by such Transferor, subsidiary,
successor or assign under any self insurance coverage), shall not be the subject
of indemnification under this Agreement.

6.3 SPECIFIC INDEMNIFICATION ISSUES. (a) In the event a claim,
demand, action or proceeding is brought by a third party in which the liability
as between any Transferor and the OLP is determined in any judgment, award or
decree of a court or other governmental authority having jurisdiction to be
joint or concurrent or in which the entitlement to indemnification hereunder is
not readily determinable, the parties may negotiate in good faith in an effort
to agree, as between such Transferor and the OLP, on the proper allocation of
liability or entitlement to indemnification, as well as the proper allocation of
the costs of any joint defense or settlement pursuant to Section 6.5(d), all in
accordance with the provisions of, and the principles set forth in, this
Agreement. In the absence of any such agreement or if the Transferor or the OLP
elects, such allocation of liability, entitlement to indemnification and
allocation of costs shall be subject to resolution between such Transferor and
the OLP pursuant to Section 9 of this Agreement.

(b) It is acknowledged that after the Effective Time, the parties
hereto may have negotiated business relationships, which relationships will be
described in contracts, agreements and

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other documents entered into in the normal course of business. Such contracts,
agreements and other documents may include agreements by the parties hereto or
their Affiliates to supply, after the Effective Time, materials, products or
other goods, services or leases of personal or real property. Such business
relationships and such contracts, agreements and other documents shall not be
subject to the indemnity provisions hereof, unless the parties expressly agree
to the contrary in the agreements governing such relationships.

6.4 NOTICE AND PAYMENT OF CLAIMS. (a) If any Person entitled to a
defense and/or indemnification under this Agreement (the "INDEMNIFIED PARTY")
determines that it is or may be entitled to a defense or indemnification by the
OLP or any Transferor, as the case may be (the "INDEMNIFYING PARTY"), under this
Agreement:

(i) The Indemnified Party shall deliver promptly to the Indemnifying
Party a written notice and demand for a defense or indemnification,
specifying the basis for the claim for defense and/or indemnification, the
nature of the claim, and if known, the amount for which the Indemnified
Party reasonably believes it is entitled to be indemnified. Nothing in
this subparagraph shall be interpreted to invalidate any claim for
indemnification by the Indemnified Party, unless, and then only to the
extent that, the failure of the Indemnified Party to deliver such notice
results in actual prejudice to the Indemnifying Party's ability to defend
such claim.

(ii) The Indemnifying Party shall have ten (10) days from receipt of
the notice requesting indemnification within which to either: (A) assume
the defense of such litigation or claim; (B) pay the claim in immediately
available funds; (C) reserve its rights pending resolution under Section
6.5(d); or (D) object in accordance with Section 6.4(b). This ten

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(10) day period may be extended by agreement of the Indemnifying Party and
the Indemnified Party. Nothing in this subparagraph shall be interpreted
to abrogate or delay a party's obligation to provide the other with a
defense under this Agreement.

(b) The Indemnifying Party may object to the claim for defense and/or
indemnification set forth in any notice; PROVIDED, HOWEVER, that if the
Indemnifying Party does not give the Indemnified Party written notice setting
forth its objection to such claim (or the amount thereof) and the grounds
therefor within the same ten (10) day period (or any extended period), the
Indemnifying Party shall be deemed to have acknowledged its liability to provide
a defense or to pay the amount of such claim and, subject to Section 9, the
Indemnified Party may exercise any and all of its rights under applicable law to
collect such amount or obtain such defense. Any objection to a claim for a
defense or indemnification shall be resolved in accordance with Section 9.

(c) To the extent provided in the last sentence of Section 6.1 or the
last sentence of Section 6.2, the right to a defense or indemnification under
this Agreement applies only insofar as defense and indemnification are not
provided for by insurance (whether through a third party or a captive insurance
company). Nevertheless, the potential availability of insurance coverage to the
applicable Transferor or the OLP shall not relieve the other party of its
obligations for defense or indemnification hereunder, or delay either party's
obligation to the other to assume a defense or pay any sums due hereunder.

(d) Payments due to be made to any Indemnified Party under this
Section 6 shall bear interest from the date on which the Indemnified Party pays
any amount or actually suffers a loss in respect of OLP Damages or Transferor
Damages, as the case may be, to but excluding the date of actual payment
(whether before or after judgment) at the rate per annum equal to (i) the rate
per

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annum announced from time to time by Bank of America National Trust and Savings
Association as its reference rate plus (ii) two (2) percent.

(e) Payments due to be made under this Agreement shall be free and
clear of all deductions, withholdings, set-off or counterclaims whatsoever,
except as may be required by law. If any deductions or withholdings are
required by law, the Indemnifying Party shall be obliged to pay such sum as
will, after such deduction, withholding, set-off or counterclaim has been made,
leave the Indemnified Party with the same amount as it would have been entitled
to receive in the absence of any such requirement to make a deduction or
withholding. The parties to this Agreement may enter into agreements or other
arrangements providing for the set-off of payments due to be made by way of
indemnification to both the applicable Transferor and the OLP.

(f) Payments due to be made under this Agreement shall be reduced by
the amount by which any taxes for which the Indemnified Party would have been
accountable or liable to be assessed are either (i) actually reduced prior to
payment falling due hereunder or (ii) likely to be reduced subsequent to payment
falling due hereunder in the reasonable opinion of the Indemnified Party acting
in good faith in the light of the circumstances prevailing at the time of
delivery of written notice in accordance with Section 6.4(a). The determination
of the amount by which taxes are actually or likely to be reduced shall take
into account the time value of money.

6.5 DEFENSE OF THIRD PARTY CLAIMS. (a) If the Indemnified Party's
claim for indemnification is based, under this Agreement, on a claim, demand,
investigation, action or proceeding, judicial or otherwise, brought by a third
party, and the Indemnifying Party does not object under Section 6.4(b), the
Indemnifying Party shall, within the ten 10 day period (or any extended period)
referred to in Section 6.4(a), assume the defense of such third-party claim at
its

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sole cost and expense and shall thereafter be designated as the "CASE HANDLER."
Any such defense shall be conducted by attorneys employed by the Indemnifying
Party. The Indemnified Party may retain attorneys of its own choosing to
participate in such defense at the Indemnified Party's sole cost and expense.

(b) If the Indemnifying Party assumes the defense of any such
third-party claim, the Indemnifying Party may settle or compromise any such
claim which requires only the payment of money by the Indemnifying Party without
the prior consent of the Indemnified Party so long as all present and future
claims relating to the compromised claim against the Indemnified Party are
irrevocably and unconditionally released in full and may settle or compromise
other such claims only with the prior written consent of the Indemnified Party.

(c) The Indemnifying Party shall pay to the Indemnified Party (or to
such party as is identified by the Indemnified Party) in immediately available
funds the amount for which the Indemnified Party is entitled to be indemnified
within thirty (30) days after the settlement or compromise of such third-party
claim or the judgment of a court of competent jurisdiction (or within such
earlier period as is required by such settlement, compromise or judgment or such
longer period as agreed to by Indemnifying Party and the Indemnified Party). If
the Indemnifying Party does not assume the defense of any such third-party
claim, the Indemnifying Party shall be bound by the result obtained with respect
thereto by the Indemnified Party, except that the Indemnifying Party shall have
the right to contest that it is obligated to the Indemnified Party under the
terms of this Agreement, provided the Indemnifying Party shall have raised its
objection in a timely manner under Section 6.4.

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(d) In the event a claim, demand, action or proceeding is brought by
a third party in which the liability as between the OLP and any Transferor is
alleged to be joint or in which the entitlement to indemnification hereunder is
not readily determinable, such parties shall cooperate in a joint defense. Such
joint defense shall be under the general management and supervision of the party
which is expected to bear the greater share of the liability, and which will be
considered the Case Handler, unless otherwise agreed; PROVIDED, HOWEVER, that
neither party shall settle or compromise any such joint defense matter without
the consent of the other. The costs of such joint defense, any settlement and
any award or judgment (unless the award or judgment specifies otherwise) shall
be borne as the parties may agree; or in the absence of such agreement, such
costs shall be borne by the party incurring such costs, subject to ultimate
resolution between the OLP and the applicable Transferor pursuant to Section 9.

6.6 COOPERATION AND PRESERVATION OF RECORDS. (a) The OLP Parties and
the Transferor Parties shall cooperate with one another fully and in a timely
manner as requested by the others in connection with the defense of any
Litigation and Claims.

(b) Such cooperation shall include, without limitation, making
available to the other party, during normal business hours and upon reasonable
notice, all books, records and information ("LITIGATION RECORDS"), officers and
employees (without substantial interruption of employment) necessary or useful
in connection with any actual or threatened Litigation and Claims and any
investigation, audit, action or proceeding relating thereto.

(c) Each party shall continue in force, or, at the request of any
other party, shall issue, notices exempting from destruction any Litigation
Records which the requesting party represents may be necessary to the defense
of, or required to be produced in discovery in connection

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with, any such claim, investigation, audit, action or proceeding and shall
refrain from destroying any such Litigation Records until authorized by the
requesting party. The requesting party shall notify the other parties promptly
when the Litigation Records are no longer required to be maintained.

(d) The party requesting access to Litigation Records or officers and
employees pursuant to Section 6.6(b) or preservation of Litigation Records
pursuant to Section 6.6(c) shall bear all reasonable out-of-pocket expenses
(except reimbursement of salaries, employee benefits and general overhead)
incurred by the other parties in connection with providing such Litigation
Records or officers and employees.

(e) Any party providing Litigation Records hereunder may elect, upon
a reasonable basis and within a reasonable time, to designate all or a portion
of the Litigation Records as confidential or proprietary. If Litigation Records
are so designated, each of the parties receiving them will treat them as it
would its own confidential or proprietary information and will take all
reasonable steps to protect and safeguard the Litigation Records while in its
own custody and will attempt to shield such information from disclosure by
motions to quash, motions for a protective order, redaction or other appropriate
actions.

7. TAX MATTERS.

7.1 REFUNDS OF TAXES. Upon the request of any Transferor, the OLP
shall assist such Transferor in connection with (or to the extent necessary
shall file, or cause to be filed in such form as such Transferor may reasonably
request), claims for refunds of federal, state, local or foreign income taxes
attributable to the operation of the Business of such Transferor prior to the
Effective Time. Each Transferor shall have the sole right to prosecute any
claims for such refunds (by suit

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or otherwise) at such Transferor's expense and with counsel of such Transferor's
choice, and the OLP and its Affiliates shall cooperate fully with such
Transferor in connection therewith.

7.2 NOTICE OF TAX AUDITS. The OLP shall promptly notify each
Transferor in writing upon the receipt by the OLP or any of its Affiliates of a
notice of any pending or threatened audit or assessment against the OLP or any
of its Affiliates with respect to any taxes for which the OLP or any of its
Affiliates is or may be entitled to indemnification under this Agreement. The
affected Transferor shall have the sole right, at its election, (a) to represent
the interests of the OLP and its Affiliates with respect to any such audits or
assessments, including in any administrative or court proceeding relating
thereto, and (b) employ counsel of its choice at its expense and to control the
conduct of such audit, assessment, or proceeding, including the settlement or
disposition thereof. The OLP and its Affiliates shall cooperate fully with each
such Transferor and its counsel in the defense against or compromise of any
claim in any such audit, assessment, or proceeding.

8. FURTHER ASSURANCES AND POWER OF ATTORNEY.

8.1 FURTHER ASSURANCES. From time to time after the date hereof, and
without any further consideration, each party hereto shall execute, acknowledge
and deliver all such additional documents, and will do all such other acts and
things, all in accordance with applicable Law, as may be necessary or
appropriate to more fully and effectively carry out the purposes and intent of
this Agreement.

8.2 POWER OF ATTORNEY. Each Transferor hereby constitutes and
appoints the OLP, its successors and assigns, its true and lawful
attorney-in-fact with full power of substitution for it and in its name, place
and stead or otherwise on behalf of such Transferor, its successors and assigns,
and for the benefit of the OLP, its successors and assigns, to demand and
receive from time

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to time the Assets of such Transferor and to execute in the name of such
Transferor and its successors and assigns instruments of conveyance, instruments
of further assurance and to give receipts and releases in respect of the same,
and from time to time to institute and prosecute in the name of the OLP or such
Transferor for the benefit of the OLP, as may be appropriate, any and all
proceedings at law, in equity or otherwise which the OLP, its successors and
assigns may deem proper in order to collect, assert or enforce any claims,
rights or titles of any kind in and to the Assets of such Transferor, and to
defend and compromise any and all actions, suits or proceedings in respect of
any of such Assets and to do any and all such acts and things in furtherance of
this Agreement as the OLP, its successors or assigns shall reasonably deem
advisable. Each Transferor hereby declares that the appointment hereby made and
the powers hereby granted are coupled with an interest and are and shall be
irrevocable and perpetual and shall not be terminated by any act of such
Transferor, its successors or assigns or by operation of law.

9. ARBITRATION.

(a) Any dispute, controversy or claim arising out of or relating to
this Agreement or its breach, interpretation, termination or validity, including
any question whether a matter is subject to arbitration hereunder, is referred
to herein as a "DISPUTE."

(b) If the parties fail to settle any Dispute within thirty (30) days
after any party has given notice to the other parties hereto of the claimed
existence of a Dispute, the Dispute shall be resolved by a confidential, binding
arbitration. All such Disputes shall be arbitrated in _________, _________
pursuant to the arbitration rules and procedures of J.A.M.S./Endispute with the
arbitrator or arbitrators selected in the manner provided in such rules, except
that the "Final

-39-

<PAGE>

Offer (or Baseball)" Arbitration Option shall not be used unless agreed to in
writing by the parties to the Dispute.

(c) Judgment upon any award rendered by the arbitrators may be
entered in any court having jurisdiction, and each party hereto consents and
submits to the jurisdiction of such court for purposes of such action. The
statute of limitations, estoppel, waiver, laches and similar doctrines, which
would otherwise be applicable in any action brought by a party, shall be
applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for those purposes.
The Federal Arbitration Act shall apply to the construction, interpretation and
enforcement of this arbitration provision. Each party shall bear its own
expenses (including the fees and expenses of legal counsel and accountants) in
connection with such arbitration and bear one-half of the arbitrators' fees and
expenses, provided that the arbitral award shall allocate such fees and expenses
of counsel, accountants, other advisors and the arbitrators according to the
relative success of the parties in the arbitration, as determined by the
arbitrators. The arbitrators shall award an amount equal to the actual monetary
damages suffered by each party, which may include interest costs incurred by
such party but the arbitrators shall not have the authority to award punitive
damages.

10. MISCELLANEOUS.

10.1 COSTS. The OLP shall be responsible for and shall pay all
Financing Expenses and Transfer Expenses and the MLP shall be responsible for
and shall pay all Public Offering Expenses and the Over-Allotment UW Discount,
in each case whether incurred prior to, as of or after the Effective Time. In
addition, the OLP shall be responsible for all costs, liabilities and expenses
(including court costs and reasonable attorneys' fees) incurred in connection
with the

-40-

<PAGE>

satisfaction of the parties obligations pursuant to Section 3.2.
Notwithstanding the foregoing, the Transferors and their respective Affiliates
shall be entitled to pay any such expenses which are required to be paid by the
OLP or the MLP and be reimbursed by the OLP or the MLP, as appropriate. If any
Transferor or any of its Affiliates have paid or advanced any Transfer Expenses,
Financing Expenses or Public Offering Expenses (other advances pursuant to the
Promissory Note, which shall be repaid as provided in this Agreement or as
provided in the MLP Partnership Agreement), then the OLP or the MLP, as
appropriate, shall reimburse such Transferor or such Affiliate promptly upon
request therefor and the MLP hereby guarantees the payment of all amounts
required to be so paid by the OLP.

10.2 ACCESS TO RECORDS. After the Effective Time, the OLP and its
Affiliates shall permit each of the Transferors and their respective Affiliates
and agents to have full access, at any reasonable time and from time to time, to
such books, records, and other data relating to the Assets or the Business (the
"INFORMATION") as any such Transferor or Affiliate may request. If the OLP
intends at any time to discard any Information relating to the Assets or to the
operation of the Business prior to the Effective Time, the OLP shall (i) give
the Transferors written notice of such intention at least thirty (30) days prior
to discarding such Information, and (ii) allow the Transferors to take
possession of such Information if they so request within such thirty (30) day
period.

10.3 SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon and
inure to the benefit of the parties signatory hereto and their respective
successors and assigns.

10.4 NO THIRD PARTY RIGHTS. The provisions of this Agreement are
intended to bind the parties signatory hereto and their respective successors
and assigns and are not intended to and do not create rights in any other Person
or confer upon any other Person any benefits, rights or

-41-

<PAGE>

remedies and no other Person is or is intended to be a third party beneficiary
of any of the provisions of this Agreement.

10.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.

10.6 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware without
regard to conflict of law principles thereof, except, if it is mandatory in any
other jurisdiction to have the law of such other jurisdiction govern this
Agreement in order for this Agreement to be effective with respect to a
particular Asset, then the laws of such other jurisdiction shall govern this
Agreement with respect to such Asset.

10.7 SEVERABILITY. If any of the provisions of this Agreement are
held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over the subject
matter hereto, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as if it did not contain
the particular provision or provisions held to be invalid, and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Agreement at the time of
execution of this Agreement.

10.8 DEED; BILL OF SALE; ASSIGNMENT. To the extent required by
applicable law, this Agreement shall also constitute a "deed," "bill of sale" or
"assignment" of the Assets.

10.9 AMENDMENT OR MODIFICATION. This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto and the provisions of this

-42-

<PAGE>

Agreement may be waived only if such waiver is set forth in a writing signed by
the party sought to be bound by such waiver.

10.10 INTEGRATION. This Agreement supersedes all previous
understandings or agreements between the parties, whether oral or written, with
respect to its subject matter and this document is an integrated agreement which
contains the entire understanding of the parties. No understanding,
representation, promise or agreement, whether oral or written, is intended to be
or shall be included in or form part of this Agreement unless it is contained in
a written amendment hereto executed by the parties hereto after the date of this
Agreement.

10.11 NONRECOURSE. Notwithstanding any provision to the contrary
contained in this Agreement, no recourse shall be had for the payment or
performance of the obligations of the OLP or the MLP hereunder against any
partner of the MLP or the OLP, as the case may be, except to the extent of such
partner's interests in the MLP and the MLP's property, in the case of the MLP's
obligations, and the OLP and the OLP's property, in the case of the OLP's
obligations, it being expressly understood that liability for the payment and
performance of the obligation of the MLP and the OLP hereunder is non-recourse
to any partner thereof and any and all assets of each such partner, save and
except as hereinabove provided.

IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.

-43-

<PAGE>

CORNERSTONE PROPANE PARTNERS, L.P.

By: Cornerstone Propane GP, Inc.,
a California corporation,
as managing general partner

Witnesses:
By:
---------------------------
- ------------------------------------- [Name]
- ------------------------------------- [Title]

CORNERSTONE PROPANE, L.P.

By: Cornerstone Propane GP, Inc.,
a California corporation,
as managing general partner

Witnesses:
By:
---------------------------
- ------------------------------------- [Name]
- ------------------------------------- [Title]

CORNERSTONE PROPANE GP, INC.

By:
------------------------------
[Name]
Witnesses: [Title]
- -------------------------------------
- -------------------------------------

EMPIRE ENERGY SC CORPORATION

BY:-------------------------------
[Name]
[Title]

Witnesses:
- -------------------------------------
- -------------------------------------

SYN INC.

BY:
-------------------------------
[Name]
[Title]

Witnesses:
- -------------------------------------
- -------------------------------------

-44-
<PAGE>

STATE OF ____________ )
) SS.
COUNTY OF ____________ )

On this ___ day of December, 1996, before me, a Notary Public in and
for said state, personally appeared _______________________, who being by me
duly sworn did say that he is the _________________ of CORNERSTONE PROPANE GP,
INC., a California corporation and the general partner of CORNERSTONE PROPANE
PARTNERS, L.P., a Delaware limited partnership, and that the foregoing
instrument was signed on behalf of said corporation and limited partnership and
acknowledged said instrument to be the free act and deed of said corporation and
limited partnership for the purposes therein stated.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal, the day and year last above written.

-------------------------------------------
Printed Name:
-----------------------------
Notary Public in and for said State

[SEAL]
My commission expires:

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

<PAGE>

STATE OF ____________ )
) SS.
COUNTY OF ____________)

On this ___ day of December, 1996, before me, a Notary Public in and
for said state, personally appeared _______________________, who being by me
duly sworn did say that he is the _________________ of CORNERSTONE PROPANE GP,
INC., a California corporation and the general partner of CORNERSTONE PROPANE,
L.P., a Delaware limited partnership, and that the foregoing instrument was
signed on behalf of said corporation and limited partnership and acknowledged
said instrument to be the free act and deed of said corporation and limited
partnership for the purposes therein stated.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal, the day and year last above written.

Printed Name:

Notary Public in and for said State

[SEAL]
My commission expires:

<PAGE>

STATE OF ____________ )
) SS.
COUNTY OF ____________)

On this ___ day of December, 1996, before me, a Notary Public in and
for said state, personally appeared _______________________, who being by me
duly sworn did say that he is the _________________ of CORNERSTONE PROPANE GP,
INC., a California corporation, and that the foregoing instrument was signed on
behalf of said corporation and acknowledged said instrument to be the free act
and deed of said corporation for the purposes therein stated.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal, the day and year last above written.

Printed Name:

Notary Public in and for said State

[SEAL]
My commission expires:

<PAGE>

STATE OF ____________ )
) SS.
COUNTY OF ____________)

On this ___ day of December, 1996, before me, a Notary Public in and
for said state, personally appeared _______________________, who being by me
duly sworn did say that he is the _________________ of EMPIRE ENERGY SC
CORPORATION, a Delaware corporation, and that the foregoing instrument was
signed on behalf of said corporation and acknowledged said instrument to be the
free act and deed of said corporation for the purposes therein stated.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal, the day and year last above written.

Printed Name:

Notary Public in and for said State

[SEAL]
My commission expires:

<PAGE>

STATE OF ____________ )
) SS.
COUNTY OF ____________)

On this ___ day of December, 1996, before me, a Notary Public in and
for said state, personally appeared _______________________, who being by me
duly sworn did say that he is the _________________ of SYN INC., a Delaware
corporation, and that the foregoing instrument was signed on behalf of said
corporation and acknowledged said instrument to be the free act and deed of said
corporation for the purposes therein stated.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal, the day and year last above written.

Printed Name:
Notary Public in and for said State

[SEAL]
My commission expires:

<PAGE>

FORM OF

CORNERSTONE PROPANE PARTNERS, L.P.

1996 RESTRICTED UNIT PLAN

(As Adopted _____________, 1996)

<PAGE>

CORNERSTONE PROPANE PARTNERS, L.P.
1996 RESTRICTED UNIT PLAN

TABLE OF CONTENTS

PAGE

1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-

2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-

3. Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . .-13-

4. Initial Executive Rights. . . . . . . . . . . . . . . . . . . . . . . .-16-

5. Time Vesting Rights . . . . . . . . . . . . . . . . . . . . . . . . . .-17-

6. Performance Vesting Rights. . . . . . . . . . . . . . . . . . . . . . .-18-

7. Reserved Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . .-19-

8. Other Provisions Applicable to Vesting. . . . . . . . . . . . . . . . .-20-

9. Director Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . .-22-

10. Delivery of Units, etc. . . . . . . . . . . . . . . . . . . . . . . . .-25-

11. Adjustment Upon Changes in Capitalization . . . . . . . . . . . . . . .-27-

12. Termination and Amendment of the Plan . . . . . . . . . . . . . . . . .-27-

13. Death of Grantee. . . . . . . . . . . . . . . . . . . . . . . . . . . .-28-

14. Non-Exclusivity of the Plan . . . . . . . . . . . . . . . . . . . . . .-29-

15. Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . .-29-

16. Regulations and Other Approvals; Governing Law. . . . . . . . . . . . .-30-

17. Withholding of Taxes. . . . . . . . . . . . . . . . . . . . . . . . . .-33-

18. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . .-34-

<PAGE>

19. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-34-

20. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-34-

21. Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . .-35-

<PAGE>

CORNERSTONE PROPANE PARTNERS, L.P.
RESTRICTED UNIT PLAN

1. PURPOSE. The purpose of the Plan is to strengthen Cornerstone
Propane Partners, L.P., a Delaware limited partnership (the "PARTNERSHIP"), by
providing an incentive to certain Senior Executives and Directors (as
hereinafter defined) of Cornerstone GP, Inc.; a Delaware corporation, the
Managing General Partner of the Partnership, and thereby encouraging them to
devote their abilities and industry to the success of the Partnership's business
enterprise in such a manner as to maximize the Partnership's value. It is
intended that this purpose be achieved by extending to certain Senior Executives
and Directors an added long-term incentive for continued service to the
Partnership and the Managing General Partner, and for high levels of performance
and unusual efforts which enhance the Partnership's value through the grant of
rights to receive Common Units (as hereinafter defined) of the Partnership.

2. Definitions.

For purposes of this Plan, unless otherwise specified in an agreement,
capitalized terms shall have the following meanings:

<PAGE>

2.1 "ACT" means the Securities Act of 1933, as amended.

2.2 "AGREEMENT" means the written agreement between the Partnership
and a Grantee evidencing the grant of an Award and setting forth the terms and
conditions thereof.

2.3 "AWARD" means a grant of Time Vesting Rights and/or Performance
Vesting Rights.

2.4 "BOARD" means the Board of Directors of the Managing General
Partner.

2.5 "CAUSE" means, unless otherwise provided in an Agreement, (i) in
the case of a Senior Executive, (a) the Grantee's gross negligence or willful
misconduct in the performance of his or her duties, (b) the Grantee's willful or
grossly negligent failure to perform his or her duties, (c) the breach by the
Grantee of any written covenants to the Partnership or the Managing General
Partner, (d) dishonest, fraudulent or unlawful behavior by the Grantee (whether
or not in conjunction with employment) or the Grantee being subject to a
judgment, order or decree (by consent or otherwise) by any governmental or
regulatory authority that

-2-

<PAGE>

restricts his or her ability to engage in the business conducted by the
Partnership or the Managing General Partner or any of their affiliates or (e)
willful or reckless breach by the Grantee of any policy adopted by the
Partnership or the Managing General Partner concerning conflicts of interest,
standards of business conduct or fair employment practices or procedures with
respect to compliance with applicable laws, and (ii) in the case of a Director,
the commission of an act of fraud or intentional misrepresentation or an act of
embezzlement, misappropriation or conversion of assets of the Partnership, the
Managing General Partner or any of their affiliates.

2.6 "CHANGE IN CAPITALIZATION" means any increase or reduction in the
number of Common Units, or any change (including, but not limited to, a change
in value) in the Common Units, or exchange of Common Units for a different
number or kind of units or other securities of the Partnership, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization, spin-
off, split-up, issuance of warrants or rights or other convertible securities,
unit distribution, unit split or reverse unit split, cash dividend, property
dividend, combination

-3-

<PAGE>

or exchange of units, repurchase of units, change in corporate structure or
otherwise.

2.7 "CHANGE OF CONTROL" means the occurrence during the term of the
Plan of:

(i) an acquisition (other than directly from the Partnership)
of Common Units, Subordinated Units or voting equity interests of the
Partnership ("VOTING SECURITIES") by any "PERSON" (as the term person is
used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT")), other than the Partnership, the
Managing General Partner or any of their affiliates, immediately after
which such Person has "BENEFICIAL OWNERSHIP" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of more than [twenty five percent
(25%)] of the combined voting power of the Partnership's then outstanding
Units; PROVIDED, HOWEVER, that in determining whether a Change of Control
has occurred, Units which are acquired in a Non-Control Acquisition' (as
hereinafter defined) shall not constitute an acquisition that would cause a
Change of Control. A "NON-CONTROL ACQUISITION" shall mean an

-4-

<PAGE>

acquisition by (i) an employee benefit plan (or a trust forming a part
thereof) maintained by (A) the Managing General Partner or the Partnership
or (B) any corporation, partnership or other Person of which a majority of
its voting power or its voting equity securities or equity interest is
owned, directly or indirectly, by the Partnership, or Northwestern Public
Service Company (for purposes of this definition, a "SUBSIDIARY"), (ii) the
Partnership or Subsidiaries, or (iii) any Person in connection with a "NON-
CONTROL TRANSACTION" (as hereinafter defined);

(ii) approval by the partners of the Partnership of (A) a
merger, consolidation or reorganization involving the Partnership, unless
(x) the holders of Common and Subordinated Units immediately before such
merger, consolidation or reorganization own, directly or indirectly
immediately following such merger, consolidation or reorganization, at
least [sixty percent (60%)] of the combined voting power of the outstanding
Common and Subordinated Units of the entity resulting from such merger,
consolidation or reorganization (the "SURVIVING ENTITY") in substantially
the same proportion as their ownership of the Common and Subordinated
Units

-5-

<PAGE>

immediately before such merger, consolidation or reorganization, and (y)
no person or entity (other than the Partnership, any Subsidiary, any
employee benefit plan (or any trust forming a part thereof) maintained by
the Partnership, the Managing General Partner, the Surviving Entity, or
any Person who, immediately prior to such merger, consolidation or
reorganization had Beneficial Ownership of more than twenty five percent
(25%) of the then outstanding Common and Subordinated Units), has
Beneficial Ownership of more than twenty five percent (25%) of the
combined voting power of the Surviving Entity's then outstanding voting
securities; (B) a complete liquidation or dissolution of the Partnership;
or (c) the sale or other disposition of 50% or more of the net assets of
the Partnership to any Person (other than a transfer to a Subsidiary). A
transaction described in clauses (x) or (y) of subsection (A) hereof shall
be referred to as a "NON-CONTROL TRANSACTION;" or

(iii) A Qualified Owner or Qualified Owners (as defined below)
not having, in the aggregate, Beneficial Ownership of at least 50.1% of the
capital stock of the General Partner (by vote and value). For purposes of
this

-6-

<PAGE>

Section 2.7, "QUALIFIED OWNER" shall mean Northwestern Public Service
Company, or any corporation of which Northwestern Public Service Company
owns (directly or indirectly) a majority of the combined voting power of
its outstanding voting securities.

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because any Person (the "SUBJECT PERSON") acquired Beneficial Ownership
of more than the permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Partnership which, by
reducing the number of Voting Securities outstanding, increases the proportional
number of Common or Subordinated Units Beneficially Owned by the Subject Person,
provided that if a Change of Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the
Partnership, and after such acquisition by the Partnership, the Subject Person
becomes the Beneficial Owner of any additional Voting Securities that increases
the percentage of the then outstanding Voting Securities Beneficially Owned by
the Subject Person, then a Change of Control shall occur.

-7-

<PAGE>

2.8 "CODE" means the Internal Revenue Code of 1986, as amended.

2.9 "COMMITTEE" means a compensation committee consisting of at least
two (2) members of the Board appointed by the Board to administer the Plan and
to perform the functions set forth herein.

2.10 "COMMON UNITS" means the common units representing limited
partnership interests of the Partnership.

2.11 "DIRECTOR" means any member of the Board who at no time prior to
or during his or her service on the Board was or is an employee or officer of
the Partnership or the Managing General Partner.

2.12 "DISABILITY" shall have the same meaning that such term (or
similar term) has under the long-term disability plan in which the Senior
Executive or Director is covered.

2.13 "EFFECTIVE DATE" shall mean the date upon which the Public
Offering is consummated.

-8-

<PAGE>

2.14 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

2.15 "FAIR MARKET VALUE" per Common Unit on any date means the average
of the high and low sale prices of the Common Units on such date on the
principal national securities exchange on which such Common Units are listed or
admitted to trading, or if such Common Units are not so listed or admitted to
trading, the arithmetic mean of the per Common Unit closing bid price and per
Common Unit closing asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System or such other
market on which such prices are regularly quoted, or, if there have been no
published bid or asked quotations with respect to Common Units on such date, the
Fair Market Value shall be the value established by the Board in good faith.

2.16 "GOOD REASON" means, unless otherwise provided in an Agreement,
in the case of a Senior Executive, (a) any failure by the Partnership or the
Managing General Partner to comply in any material respect with the compensation
provisions of a written employment agreement between the Senior Executive and
the

-9-

<PAGE>

Partnership or the Managing General Partner, or (b) the assignment to the Senior
Executive, without his or her consent, of duties and responsibilities materially
inconsistent with his or her level of responsibility as an executive officer.

2.17 "GRANTEE" means a person to whom an Award has been granted under
the Plan.

2.18 "INITIAL RIGHTS" means the Initial Executive Rights granted to
Senior Executives pursuant to Section 4.1 on or effective as of the Effective
Date, to receive a number of Common Units with an aggregate value of $7.0
million, and the Initial Director Rights granted to Directors pursuant to
Section 9.1.1, on or effective as of the Effective Date, to receive a number of
Common Units with an aggregate value of $.9 million (based on the initial public
offering price of the Common Units in the Public Offering, regardless of the
Fair Market Value of a Common Unit at any other time).

2.19 "MANAGING GENERAL PARTNER" means Cornerstone Propane GP, Inc., a
Delaware Corporation, and its successors.

-10-

<PAGE>

2.20 "PARTNERSHIP" means Cornerstone Propane Partners, L.P., a
Delaware limited partnership, and its successors.

2.21 "PARTNERSHIP AGREEMENT" means the Partnership Agreement of the
Partnership.

2.22 "PERFORMANCE VESTING RIGHTS" means Rights which vest in
accordance with the provisions of Sections 6-9.

2.23 "PLAN" means the Cornerstone Propane Partners, L.P. 1996
Restricted Unit Plan.

2.24 "PUBLIC OFFERING" means the initial public offering of the Common
Units pursuant to an effective registration statement under the Act.

2.25 "RESERVED RIGHTS" means the rights granted subsequent to the
Effective Date to receive a number of Common Units with an aggregate value of
$4.6 million (based on the initial public offering price of the Common Units in
the Public Offering, regardless of the Fair Market Value of a Common Unit at any
other

-11-

<PAGE>

time) plus such number of Common Units as are subject to previously granted but
forfeited Initial Rights or Reserved Rights.

2.26 "RIGHTS" means either the Initial Rights or the Reserved Rights.

2.27 "SENIOR EXECUTIVES" means the President and Chief Executive
Officer, the Executive Vice President and Chief Operating Officer, the Executive
Vice President and Chief Financial Officer and the Senior Vice President of the
Managing General Partner, and such other officers or managers of the Managing
General Partner or the Partnership as the Committee may designate.

2.28 "SUBORDINATED UNITS" means the subordinated units representing
limited partnership interests of the Partnership.

2.29 "TIME VESTING RIGHTS" means Rights which vest in accordance with
the provisions of Section 5 and Sections 7-9.

-12-

<PAGE>

3. ADMINISTRATION.

3.1 The Plan shall be administered by the Committee, which shall hold
meetings at such times as may be necessary for the proper administration of the
Plan. The Committee shall keep minutes of its meetings. A quorum shall consist
of not less than two members of the Committee and a majority of a quorum may
authorize any action. Any decision or determination reduced to writing and
signed by a majority of all of the members of the Committee shall be as fully
effective as if made by a majority vote at a meeting duly called and held. No
member of the Committee shall be liable for any action, failure to act,
determination or interpretation made in good faith with respect to the Plan or
any transaction hereunder, except for liability arising from his or her own
willful misfeasance, gross negligence or reckless disregard of his or her
duties. The Partnership hereby agrees to indemnify each member of the Committee
for all costs and expenses and, to the extent permitted by applicable law, any
liability incurred in connection with defending against, responding to,
negotiating for the settlement of or otherwise dealing with, any claim, cause of
action or dispute of any kind arising in connection with any

-13-

<PAGE>

actions in administering the Plan or in authorizing or denying authorization for
any transaction hereunder.

3.2 Subject to the express terms and conditions set forth herein, the
Committee shall have the power, consistent with Rule 16b-3 under the Exchange
Act, from time to time to:

(i) select those Senior Executives to whom Awards shall be
granted and to determine the terms and conditions (which need not be
identical) of each such Award;

(ii) make any amendment or modification to any Agreement
consistent with the terms of the Plan;

(iii) construe and interpret the Plan and the Awards and
establish, amend and revoke rules and regulations for the administration of
the Plan, including, but not limited to, correcting any defect or supplying
any omission, or reconciling any inconsistency in the Plan or in any
Agreement or between the Plan and any Agreement, in the manner and to the
extent it shall deem necessary or advisable so that the Plan complies with
applicable law, including Rule 16b-3 under

-14-

<PAGE>

the Exchange Act to the extent applicable, and otherwise to make the Plan
fully effective. All decisions and determinations by the Committee in the
exercise of this power shall be final, binding and conclusive upon the
Partnership, the Managing General Partner, their affiliates, the Grantees
and all other persons having any interest therein;

(iv) exercise its discretion with respect to the powers and
rights granted to it as set forth in the Plan; and

(v) generally, exercise such powers and perform such acts as
it deems necessary or advisable to promote the best interests of the
Partnership and the Managing General Partner with respect to the Plan.

3.3 The maximum number of Common Units that may be made the subject
of Awards granted under the Plan is such number of Common Units as shall have an
aggregate value of $12.5 million (based on the initial public offering price of
the Common Units in the Public Offering, regardless of the Fair Market Value of
a Common Unit at any other time). The Partnership shall reserve for

-15-

<PAGE>

purposes of the Plan, out of its authorized but unissued units, such number of
Common Units.

4. INITIAL EXECUTIVE RIGHTS.

4.1 INITIAL EXECUTIVE RIGHTS. As of the Effective Date, the
Committee shall grant Initial Executive Rights to receive a number of Common
Units with a value (based on the initial public offering price of the Common
Units in the Public Offering) as follows:

(i) $2.8 million to the President and Chief Executive Officer
of the Managing General Partner;

(ii) $1.6 million to the Executive Vice President and Chief
Operating Officer of the Managing General Partner;

(iii) $1.6 million to the Executive Vice President and Chief
Financial Officer of the Managing General Partner; and

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<PAGE>

(iv) $1.0 million to the Senior Vice President of the Managing
General Partner.

Such Rights shall be granted, and the Common Units underlying such Rights shall
be issued, in consideration of the performance of services and for no other
consideration. Twenty-five (25%) percent of such Initial Executive Rights shall
be Time Vesting Rights and shall vest in accordance with Section 5.2 and Section
8. Seventy-five (75%) percent of such Initial Executive Rights shall be
Performance Vesting Rights and shall vest in accordance with Section 6.2 and
Section 8.

5. TIME VESTING RIGHTS.

5.1 FORFEITURE. A Grantee's rights with respect to the Time Vesting
Rights granted as of the Effective Date shall remain forfeitable at all times
prior to the date on which the restrictions thereon shall have lapsed in
accordance with Section 5.2 or Section 8.

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<PAGE>

5.2 VESTING SCHEDULE. Subject to Section 8, the Time Vesting Rights
granted as of the Effective Date shall vest and become non-forfeitable, and the
restrictions thereon shall lapse:

(i) on the third anniversary of the Effective Date with
respect to one-third of the Common Units subject thereto;

(ii) on the fifth anniversary of the Effective Date with
respect to an additional one-third of the Common Units subject thereto; and

(iii) on the seventh anniversary of the Effective Date with
respect to the balance of the Common Units subject thereto.

6. PERFORMANCE VESTING RIGHTS

6.1 FORFEITURE. A Grantee's rights with respect to the Performance
Vesting Rights granted as of the Effective Date shall remain forfeitable at all
times prior to the date on which the restrictions thereon shall have lapsed in
accordance with Section 6.2 or Section 8.

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<PAGE>

6.2 VESTING SCHEDULE. Subject to Section 8, the Performance Vesting
Rights granted as of the Effective Date shall vest automatically upon the
conversion of the Subordinated Units to Common Units in accordance with Section
5.8 of the Partnership Agreement as in effect on the Effective Date. The
percentage of Performance Vesting Rights granted as of the Effective Date that
vest upon any such a conversion shall equal a fraction the numerator of which is
the number of Subordinated Units converted pursuant to such conversion and the
denominator of which is the number of Subordinated Units issued and outstanding
immediately after the underwriters' overallotment option in the Public Offering
is exercised or expires.

7. RESERVED RIGHTS.

7.1 RESERVED RIGHTS. At any time after the Effective Date, the
Committee may, in its sole discretion, grant Reserved Rights to Senior
Executives on such terms and conditions consistent with the Plan as the
Committee shall determine.

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<PAGE>

8. OTHER PROVISIONS APPLICABLE TO VESTING,

8.1 CHANGE OF CONTROL. Notwithstanding anything in the Plan to the
contrary, upon a Change of Control, all restrictions on all granted Time Vesting
Rights and Performance Vesting Rights shall lapse immediately and all such
Rights shall become fully vested and non-forfeitable.

8.2 FORFEITURE. Subject to Sections 8.1, 8.3 and 8.5, unless
otherwise provided in an Agreement, any and all Initial Rights and Reserved
Rights in respect of which the restrictions have not previously lapsed shall be
forfeited (and automatically transferred to and reacquired by the Partnership at
no cost to the Partnership, and neither the Grantee nor any successors, heirs,
assigns, or personal representatives of such Grantee, shall thereafter have any
further right or interest therein) upon the occurrence of any of the following
events: (a) termination of the Grantee's employment with the Managing General
Partner (in the case of a Senior Executive), or service on the Board (in the
case of a Director) for any reason; PROVIDED; HOWEVER, that in the event that a
Grantee's employment by the Managing General Partner or service on the Board was
terminated by the Managing General Partner without

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<PAGE>

Cause or, in the case of a Senior Executive, by the Grantee for Good Reason, in
either case, within six months prior to a Change of Control, no forfeiture of
Rights shall be treated as occurring by reason of such termination and the
Rights shall vest in accordance with Section 8.1, or (b) any attempted or
completed transfer, sale, pledge, hypothecation, or assignment (a "TRANSFER") by
the Grantee of his Initial Rights or Reserved Rights without the prior written
approval of the Committee. Except with respect to Awards granted pursuant to
Section 9 and except as provided by Section 7.1, the Committee may provide in an
Agreement or otherwise for such terms and conditions relating to the vesting of
Awards as it shall determine in its sole discretion (which may be, except as
provided by Section 7.1, more or less restrictive than those described in
Sections 5.2, 6.2 or 8.2 and which need not be the same for each Award). The
Committee may accelerate the vesting of Initial Rights or Reserved Rights (other
than those granted pursuant to Section 9) at any time for any reason with the
consent of the Board.

8.3 DEATH OR DISABILITY. Notwithstanding the provisions of Section
8.2, unless otherwise provided in an Agreement, if a Grantee's employment with
the Managing General Partner (in the case of a Senior Executive), or a Grantee's
service on the Board (in the

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<PAGE>

case of
a Director) terminates as a result of death or Disability, all restrictions on
Time Vesting Rights and Performance Vesting Rights held by such Grantee shall
lapse immediately and all such Rights shall become fully vested and
nonforfeitable.

8.4 RECYCLING OF FORFEITED SHARES. Any Common Units subject to the
Initial Rights or Reserved Rights (including Rights granted pursuant to Section
9) forfeited hereunder may be the subject of an Award pursuant to the Plan.

8.5 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. In the event a
Grantee's employment by the Managing General Partner or service on the Board is
terminated by the Managing General Partner without Cause or, in the case of a
Senior Executive by the Senior Executive for Good Reason, the restrictions on
the Time Vesting Rights awarded to the Grantee shall lapse.

9. DIRECTOR RIGHTS.

9.1 GRANTS. Pursuant to an Agreement, each Director shall be granted
Director Rights in accordance with the provisions of this Section 9 and subject
to the other provisions of the Plan.

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<PAGE>

Such Director Rights shall be granted, and the Common Units underlying such
Rights shall be issued, in consideration of the performance of services and for
no other consideration.

(i) INITIAL DIRECTOR RIGHTS. As of the Effective Date, the
Committee shall grant to each Director who is serving on the Board on such
Date Initial Director Rights to receive a number of Common Units with a
value (based on the initial public offering price of the Common Units in
the Public Offering) equal to $.4 million to the Chairman of the Board, $.3
million to the Vice Chairman of the Board and $.2 million to the remaining
Director. Twenty-five (25%) percent of such Initial Director Rights shall
be Time Vesting Rights and shall vest in accordance with Section 5.2 and
Section 8. Seventy-five (75%) percent of such Initial Director Rights
shall be Performance Vesting Rights and shall vest in accordance with
Section 6.2 and Section 8.

(ii) RESERVED DIRECTOR RIGHTS. Each Director appointed or
elected to the Board after the Effective Date shall be granted Director
Rights on the effective date of his or her appointment or election as
follows:

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<PAGE>

(a) TIME VESTING RIGHTS. Each such Director shall be
granted Time Vesting Rights to receive a number of Common Units with a
Fair Market Value (determined on the grant date) equal to $50,000.
Such Time Vesting Rights shall contain the same terms and conditions
as those Time Vesting Rights granted pursuant to Section (i), except
that such Rights shall vest three, five and seven years from their
grant date.

(b) PERFORMANCE VESTING RIGHTS. Each such Director
shall be granted Performance Vesting Rights to receive a number of
Common Units with a Fair Market Value (determined on the grant date)
equal to $150,000. Such Performance Vesting Rights shall contain the
same terms and conditions as those Performance Vesting Rights granted
pursuant to Section (i), except that the percentage of such
Performance Vesting Rights that vest upon any conversion of
Subordinated Units shall equal a fraction the numerator of which is
the number of Subordinated Units converted pursuant to such conversion

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<PAGE>

and the denominator of which is the total number of Subordinated Units
outstanding on the grant date.

10. DELIVERY OF UNITS, ETC.

10.1 DELIVERY OF COMMON UNITS. Subject to Section 17, upon the
vesting of Initial Rights or Reserved Rights, the Partnership shall deliver to
the Grantee a certificate representing such number of Common Units as are
subject to such Rights, to the extent of such vesting, free of all restrictions
hereunder.

10.2 TRANSFERABILITY.

(i) Subject to Section 16, the Common Units acquired upon
vesting of Initial Rights or Reserved Rights shall not be Transferred by a
Grantee except under the following circumstances:

(a) with the express written consent of the Board;

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<PAGE>

(b) by will or pursuant to the laws of descent and
distribution; or

(c) the Common Units are actively traded on a national
securities exchange or qualify for trading on NASDAQ-NMS or NASDAQ.

(ii) Any attempted Transfer not in accordance with this Section
10.2 shall be null and void and of no force and effect.

10.3 RIGHTS OF GRANTEES. Until such time as Initial Rights or
Reserved Rights have vested and become non-forfeitable, and certificates
representing Common Units in respect thereof have been issued pursuant to
Section 10.1, a Grantee shall not be entitled to exercise any rights of a
unitholder with respect thereto, including the right to vote such units and the
right to receive allocations or distributions thereon.

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<PAGE>

11. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.

(i) In the event of a Change in Capitalization, the Committee
shall conclusively determine the appropriate adjustments, if any, to (i)
the maximum number and class of Common Units or other units or securities
with respect to which Awards may be granted under the Plan, (ii) the number
of Common Units or other units or securities that are subject to
outstanding Awards granted under the Plan, and the purchase price therefor,
if applicable.

(ii) If, by reason of Change in Capitalization, a Grantee of an
Award shall be entitled to new, additional or different rights to acquire
units or other securities, such new, additional or different rights or
securities shall thereupon be subject to all of the conditions,
restrictions and performance criteria that were applicable to the units
subject to the Award prior to such Change in Capitalization.

12. TERMINATION AND AMENDMENT OF THE PLAN. The Plan shall terminate
on the day preceding the twentieth anniversary of the Effective Date and no
Award may be granted thereafter. The

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<PAGE>

Board may sooner terminate the Plan and the Board may at any time and from time
to time amend, terminate, modify or suspend the Plan or any Agreement; PROVIDED,
HOWEVER, that no such amendment, modification, suspension or termination shall
impair or adversely affect any Awards theretofore granted under the Plan, except
with the consent of the Grantee, nor shall any amendment, modification,
suspension or termination deprive any Grantee of any Common Units which he or
she may have acquired through or as a result of the Plan.

13. DEATH OF GRANTEE. In the event of the death of a Grantee, a
certificate representing such number of Common Units, applicable to Initial
Rights or Reserved Rights held by the Grantee, for which certificates have not
previously been delivered to the Grantee pursuant to Section 10.1, shall,
subject to Section 17, be delivered by the Partnership, free of all restrictions
hereunder, to the beneficiary or beneficiaries last designated by the Grantee by
written instrument delivered to the Committee prior to his or her death. If no
such designated beneficiaries survive the Grantee, then such certificate shall
be delivered by the Partnership to the Grantee's spouse, or if none is living,
to his or her then living lawful descendants, PER STIRPES, or if none are

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<PAGE>

living, to the duly appointed personal representative of the estate of the
Grantee, or if no such personal representative is validly appointed within 6
months of the date of death of the Grantee, to the Grantee's heirs under the
laws of the state in which the Grantee is domiciled at the date of his or her
death.

14. NON-EXCLUSIVITY OF THE PLAN. The adoption of the Plan by the
Board shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangement, or as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of options to acquire the Common
Units, and such arrangements may be either applicable generally or only in
specific cases.

15. LIMITATION OF LIABILITY. As illustrative of the limitations of
liability of the Partnership and the Manging General Partner, but not intended
to be exhaustive thereof, nothing in the Plan shall be construed to:

(i) give any person any right to be granted an Award other
than at the sole discretion of the Committee;

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<PAGE>

(ii) give any person any rights whatsoever with respect to the
Common Units except as specifically provided in the Plan or an Agreement;

(iii) limit in any way the right of the Partnership or the
Managing General Partner to terminate the employment of any person at any
time; or

(iv) be evidence of any agreement or understanding, express or
implied, that the Partnership or the Managing General Partner will employ
any person at any particular rate of compensation or for any particular
period of time.

16. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.

16.1 Except as to matters of federal law, the Plan and the rights of
all persons claiming hereunder shall be construed and determined in accordance
with the laws of the State of Delaware without giving effect to conflicts of law
principles.

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<PAGE>

16.2 Notwithstanding any other provision of the Plan, the obligation
of the Partnership to deliver the Initial Rights, the Reserved Rights or the
Common Units in respect thereof under the Plan shall, in each case, be subject
to all applicable laws, rules and regulations, including all applicable federal
and state securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the
Committee.

16.3 (a) Except as provided in Section 14 hereof, the Board may make
such changes to the Plan or an Agreement as may be necessary or appropriate to
comply with the rules and regulations of any government authority.

(b) Each Award is subject to the requirement that, if at any
time the Committee determines, in its sole and absolute discretion, that
the listing, registration or qualification of the Common Units issuable
pursuant to the Plan is required by any securities exchange or under any
state or federal law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in
connection with, the grant of an Award or the issuance

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<PAGE>

of the Common Units, no Awards shall be granted and no Common Units shall
be issued, in whole or in part, unless such listing, registration,
qualification, consent or approval has been effected or obtained free of
any conditions not acceptable to the Committee.

(c) Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event that the disposition of the Common
Units or any other securities acquired pursuant to the Plan is not covered
by a then current registration statement under the Act, or is not otherwise
exempt from such registration, such Common Units shall be restricted
against transfer to the extent required by the Act and Rule 144 or other
regulations thereunder. The Committee may require any person or entity
receiving Common Units pursuant to an Award granted under the Plan, as a
condition precedent to receipt of such Common Units, to represent and
warrant to the Partnership in writing that the Common Units acquired by
such person or entity are acquired without a view to any distribution
thereof and will not be sold or transferred other than pursuant to an
effective registration thereof under the Act, or pursuant to an exemption
applicable

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<PAGE>

under the Act or the rules and regulations promulgated thereunder. The
certificates evidencing any of such Common Units shall be appropriately
legended to reflect their status as restricted securities as aforesaid.

17. WITHHOLDING OF TAXES. At such times as a Grantee or his or her
beneficiary recognizes taxable income in connection with the Rights to acquire
Common Units granted hereunder (a "TAXABLE EVENT"), the Grantee or his or her
beneficiary shall pay to the Partnership an amount equal to the federal, state
and local income taxes and other amounts as may be required by law to be
withheld by the Partnership in connection with the Taxable Event (the
"WITHHOLDING TAXES") prior to the issuance of such units. The Partnership shall
have the right to deduct from any payment of cash to a Grantee or his or her
beneficiary an amount equal to the Withholding Taxes in satisfaction of the
obligation to pay Withholding Taxes. In satisfaction of the obligation to pay
Withholding Taxes to the Partnership, the Grantee or his or her beneficiary may
make a written election (the "TAX ELECTION"), which may be accepted or rejected
in the discretion of the Committee, to have withheld a portion of the Common
Units then issuable to him or

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<PAGE>

her having an aggregate Fair Market Value, on the date preceding the date of
such issuance, equal to the Withholding Taxes.

18. INTERPRETATION. The Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act, and the Committee shall interpret and
administer the provisions of the Plan or any Agreement in a manner consistent
therewith. Any provisions inconsistent with such Rule shall be amended to be
consistent with such Rule, and shall not affect the validity of the Plan.

19. SUCCESSORS. In the event of a sale of substantially all of the
assets of the Partnership or the Managing General Partner, or a merger,
consolidation or share or unit exchange involving the Partnership or the
Managing General Partner, all obligations of the Partnership and/or the Managing
General Partner shall be binding on the successor to the transaction.

20. NOTICES. Notices given pursuant to the Plan shall be in writing
and shall be deemed received when personally delivered, or five days after
mailed by United States registered or certified mail, return return requested
only, postage prepaid.

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Notice to the Partnership shall be directed to________________________

________________________________________________________________________________

Notices with respect to the Managing General Partner shall be directed
to______________________________________________________________________________

________________________________________________________________________________

_____________________________________________________________________________.

Notices to or with respect to a Grantee shall be directed to the
Grantee, or to his or her beneficiary, at the Grantee's home address on the
records of the Managing General Partner.

21. EFFECTIVE DATE. The effective date of the Plan shall be the
Effective Date. The effectiveness of the Plan is subject to approval of the
Plan prior to the Effective Date by the partners of the Partnership.

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<PAGE>

FORM OF

EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is entered into by and between
____________________________, an individual ("Executive"), and Cornerstone
Propane GP, Inc., a California corporation ("Cornerstone").

RECITALS:

A. The business purpose of Cornerstone is to serve as the managing
general partner of Cornerstone Propane Partners, L.P., a Delaware limited
partnership, and Cornerstone Propane, L.P., a Delaware limited partnership
(collectively the "Partnerships").

B. Executive will provide management services to Cornerstone and the
Partnerships.

AGREEMENT:

1. EMPLOYMENT BY CORNERSTONE AND DURATION.

a. FULL TIME AND BEST EFFORTS. Subject to the terms set forth herein,
Cornerstone agrees to employ Executive to provide management services for
Cornerstone and the Partnerships as _______________,and Executive hereby accepts
such employment. During the duration of his employment with Cornerstone,
Executive will devote his best efforts and substantially all of his business
time and attention to the performance of his duties hereunder, except for
vacation periods as set forth herein and reasonable

<PAGE>

absences due to injury or illness as permitted by Cornerstone's general
policies.

b. DUTIES. Executive shall serve as _________________________ for
Cornerstone and the Partnerships and shall perform such duties as are
customarily associated with his current title, consistent with the Bylaws of
Cornerstone and as required by Cornerstone's Board of Directors (the "Board").

c. DURATION. This Agreement shall be effective on
_______________________, 1996, and end on the third anniversary of such date,
subject to the provisions for termination set forth herein.

d. LOCATIONS OF PERFORMANCE. Executive shall be domiciled in the
vicinity of Watsonville, California. The parties acknowledge, however, that the
Executive will be required to undertake reasonable travel to Lebanon, Missouri
and Cornerstone's market areas in connection with the performance of his duties
hereunder.

2. COMPENSATION AND BENEFITS.
a. SALARY. Executive shall receive for services to be rendered hereunder
an annual base salary of $______, payable on a twice-monthly basis, subject to
increase at the sole discretion of the Board.

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<PAGE>

b. BONUS. Executive shall receive such discretionary bonuses, if any, as
the Board, in its sole discretion and from time to time, may deem appropriate.

c. ANNUAL OPERATING PERFORMANCE INCENTIVE PLAN. Executive shall be
eligible to participate in Cornerstone's Annual Operating Performance Incentive
Plan.
d. NEW ACQUISITIONS INCENTIVE PLAN. Executive shall be eligible to
participate in Cornerstone's New Acquisitions Incentive Plan.

e. PARTICIPATION IN BENEFIT PLANS. During the duration of employment
hereunder, Executive shall be entitled to participate in the plans and programs
established by Cornerstone to the extent that he is eligible under the general
provisions thereof. Cornerstone may, in its sole discretion and from time to
time, establish additional senior management benefit programs as it deems
appropriate.

f. LIFE INSURANCE. Cornerstone shall maintain term life insurance in the
amount of $____________ on the life of Executive payable to such beneficiary or
beneficiaries as Executive may designate from time to time.

g. VACATION. Executive shall be entitled to _____ weeks of vacation per
year, but in no event to exceed four (4) weeks per

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year. The days selected for Executive's vacation must be mutually agreeable to
Cornerstone and Executive.

h. WITHHOLDING. All payments and benefits under this Section 2 for which
withholding is required under applicable law will be made subject to the
required withholding.

3. REASONABLE BUSINESS EXPENSES AND SUPPORT.

Executive shall be reimbursed for documented and reasonable business
expenses in connection with the performance of his duties hereunder. Executive
shall be furnished reasonable office space at 432 Westridge Drive, Watsonville,
California or successor location in Watsonville, California, or other location
as mutually agreed by Executive and Cornerstone ("Primary Office"), as well as
support assistance and facilities.

4. TERMINATION OF EMPLOYMENT.

The date on which Executive's employment by Cornerstone ceases, under any
of the following circumstances, shall be defined herein as the "Termination
Date".

a. TERMINATION WITHOUT CAUSE.

i. TERMINATION PAYMENT. Upon notice to Executive, the Board
may terminate Executive's employment with Cornerstone at will at any time for
any reason and without "cause", as defined below. In the event Executive's
employment is terminated by Cornerstone without cause, Executive shall receive
payment for all

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<PAGE>

accrued salary and vacation time through the termination date, and Cornerstone
shall pay Executive as severance an amount that is equal to the compensation of
Executive under this Agreement for the remaining balance of the duration of
employment under this Agreement.

ii. FUNDAMENTAL CHANGES. In the event that Cornerstone makes a
fundamental change as defined herein below, Executive may at any time
thereafter terminate his employment; provided, however that Executive shall
provide Cornerstone ten (10) days notice prior to any such termination, and
Cornerstone shall have a reasonable period of time not to exceed thirty (30)
days to cure such fundamental change. "Fundamental change" shall be defined
as any of the following:

(a) Diminution in the Executive's duties, authority,
responsibility and/or compensation without performance or market justification;

(b) Cornerstone moves Executive's primary office more than fifty
(50) miles from Watsonville, California;

(c) NGC or an affiliate sells the Partnerships or the
Partnerships' assets or a portion of any of the foregoing after the effective
date of this Agreement such that the total EBITDA of the Partnerships falls
below 70% of the EBITDA of the Partnerships on the effective date of this
Agreement.

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<PAGE>

(d) any one or more of the following:

(i) any person (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other than
as a trustee or other fiduciary holding securities under an employee
benefit plan of Northwestern Public Service Company (the "Parent"), is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Parent representing
10% or more of the total voting power represented by the Parent's then
outstanding voting securities, or

(ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors
of the Parent and any new directors whose election by the Board of
Directors or nomination for election by the Parent's stockholders was
approved by a vote of at least two-thirds (2/3)of the directors still
in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board of
Directors of the Parent, or

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<PAGE>

(iii) the stockholders of the Parent approve a merger or
consolidation of the Parent with any other corporation, other than a
merger or consolidation which would result in the voting securities of
the Parent outstanding immediately prior to such a merger or
consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
at least 90% of the total voting power represented by the voting
securities of the Parent or such surviving entity outstanding
immediately after such merger or consolidation, or

(iv) the stockholders of the Parent approve a plan of
complete liquidation of the Parent, an agreement for the sale or
disposition of the Parent (in one transaction or a series of
transactions) of all or substantially all of the Parent's assets, or a
plan of reorganization pursuant to which (in one transaction or a
series of transactions) all or substantially all of the Parent's
assets shall be transferred to a person (as that term is used in
Sections 13(d) and 14(d)

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<PAGE>

of the Securities Exchange Act of 1934, as amended) not wholly owned
by the Parent, or

(v) the Parent shall no longer be the beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of at least 80% of the outstanding shares of each class of
equity securities of Cornerstone, PROVIDED that a public offering of
securities after which the Parent, directly or through one or more
subsidiaries, is the controlling entity shall not trigger this
Section 4(a)(ii)(d)(v), or

(vi) the Parent shall, by issuing a proxy, power or
attorney, or similar authorization or entering into a contract or
other arrangement of any kind, shall no longer effectively control
Cornerstone.

* * *

A termination by Executive in the event of a fundamental change
shall be treated as a Cornerstone termination without cause, and Executive shall
be entitled to the same severance payments as provided in paragraph 4(a)(i),
PROVIDED Executive terminates his employment within 120 days after he receives
notice of such fundamental change.

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<PAGE>

b. TERMINATION FOR CAUSE.

i. TERMINATION PAYMENT OF ACCRUED SALARY AND VACATION. The
Board may terminate Executive's employment with Cornerstone at any time for
"cause" as defined below, immediately upon notice to Executive of the
circumstances leading to such termination for cause. In the event that
Executive's employment is terminated for cause, Executive shall receive payment
for all accrued salary and vacation time through the Termination Date, which in
this event shall be the date upon which notice of termination is given.
Executive shall also receive any compensation as provided in paragraphs 2(c),
(d), (e) and (f). Cornerstone shall have no further obligation to pay
severance of any kind nor to make any payment in lieu of notice.

ii. DEFINITION OF CAUSE. "Cause" means the occurrence or
existence of any of the following with respect to Executive, as determined by a
majority of the Directors of the Board: (a) any act of dishonesty,
misappropriation, embezzlement, intentional fraud or similar conduct involving
Cornerstone or the Partnerships; (b) the conviction or the plea of nolo
contendere or the equivalent in respect to a felony involving moral turpitude;
(c) any intentional damage of a material nature to any property of Cornerstone
or the Partnerships; or (d) conduct by Executive which

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<PAGE>

demonstrates gross unfitness to serve in his capacity as employee of
Cornerstone.

c. TERMINATION UPON DISABILITY. Cornerstone may terminate
Executive's employment in the event Executive suffers a disability that renders
Executive unable to perform the essential functions of his position, even with
reasonable accommodation, for nine (9) months within any twelve (12) month
period. Commencing on the Termination Date, which in this event shall be the
date upon which notice of termination is given, Cornerstone shall pay Executive
an amount equivalent to 100% of Executive's then annual base salary, subject to
standard withholdings for tax and social security purposes, payable over twelve
(12) months in monthly pro rata payments commencing as of the Termination Date.
Executive shall also receive any compensation as provided in paragraphs 2(c),
(d), (e) and (f).

d. BENEFITS UPON TERMINATION. All benefits provided under paragraph
2(g) hereof shall be extended, to the extent permitted by Cornerstone's
insurance policies and benefit plans, for one (1) year after Executive's
Termination Date, except (a) as required by law (e.g., COBRA health insurance
continuation election), or (b) in the event of a termination described in
paragraph 4(b) if Cornerstone does not decide to require the noncompetition
agreement as described in section 6.

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<PAGE>

e. TERMINATION UPON DEATH. If Executive dies prior to the
expiration of the duration of employment under this Agreement, Cornerstone
shall continue coverage of Executive's dependents (if any) under all benefit
plans or programs of the type listed above in paragraph 2(g) herein for a period
of twelve (12) months.

5. PROPRIETARY INFORMATION OBLIGATIONS. During the duration of employment
under this Agreement, Executive will have access to and become acquainted with
Cornerstone's and the Partnerships' confidential and proprietary information,
including but not limited to information or plans regarding customer
relationships, personnel, sales, marketing, and financial operations and
methods, trade secrets, formulas, devices, secret inventions, processes, and
other compilations of information, records, and specifications (collectively,
except to the extent it was already known from other sources, or is or becomes
general knowledge, in each case without known violation of any confidentiality
obligation, "Proprietary Information"). Executive shall not disclose any of the
Proprietary Information directly or indirectly, or use it in any way, either
during the duration of this Agreement or at any time thereafter, except as
required in the course of his employment with Cornerstone or as authorized in
writing by Cornerstone. All files, records, documents, computer-

-11-

<PAGE>

recorded information, drawings specifications, equipment and similar items
relating to the business of Cornerstone and/or the Partnerships, whether
prepared by Executive or otherwise coming into his possession, shall remain the
exclusive property of Cornerstone and/or of the Partnerships, respectively, and
shall not be removed under any circumstances whatsoever without the prior
written consent of Cornerstone, except when (and only for the period) necessary
to carry out Executive's duties hereunder, and if removed shall be immediately
returned to Cornerstone upon any termination of his employment and no copies
thereof shall be kept by Executive; provided, however, that Executive shall be
entitled to retain documents that were personally owned or acquired.

6. COVENANT NOT TO COMPETE.

Cornerstone and the Partnerships are presently engaged in the retail
business of selling and distributing propane to end-user customers in bobtail
delivery vehicles with capacities below 5,000 gallons (the "Business"). The
term "Business" does not include the sale, distribution, or transport of natural
gas liquids, including without limitation propane(collectively "NGL's") in
transport loads of 5,000 gallons or more, whether for end use or resale, or the
rendition of any services to persons or entities engaged in the business of
selling or distributing NGL's, or the trading, selling, hedging, processing or
otherwise dealing with

-12-

<PAGE>

NGL's or other petroleum products (or contracts for any of the foregoing) for
any purpose.

The Executive agrees that for a twelve (12) month period from the end of
his employment with Cornerstone, he will not carry on the "Business" with fifty
(50) miles of any of the foregoing existing locations of Cornerstone or the
Partnerships. For purposes of this Agreement, Executive will be deemed to be
"carrying on" the Business if he does so directly or if he is the owner or an
officer or an employee of, a consultant to or a stockholder or holder of another
equity interest in, any person or entity engaged in the business, PROVIDED
HOWEVER, that Executive may own, directly or indirectly, solely as an
investment, securities of any person traded on a national exchange or listed on
the NASDAQ National Market so long as he does not, directly or indirectly, own
5% or more of the fully diluted interest in such person.

7. NONINTERFERENCE. While employed by Cornerstone, and during the time any
noncompetition covenant as described under Section 6 is in effect, Executive
agrees not to interfere with the business of Cornerstone by directly or
indirectly soliciting, attempting to solicit, inducing, or otherwise causing any
employee of Cornerstone to terminate his or her employment in order to

-13-

<PAGE>

become an employee, consultant or independent contractor to or for any other
employer.

8. ARBITRATION OF DISPUTES.

a. SCOPE. Any disputes of any kind regarding this Agreement, including,
but not limited to, its termination or any events occurring during the
employment relationship, shall be subject to final and binding arbitration, to
the extent permitted by law, pursuant to the Employment Dispute Resolution Rules
and Regulations of the American Arbitration Association. Such disputes shall
include, but are not limited to, claims for breach of contract (express or
implied), tort claims, claims for discrimination, and claims for violation of
any federal or state law or regulation.

b. REQUEST. Any request for arbitration must be made in writing within
365 calendar days of the occurrence giving rise to the dispute.

c. APPLICABLE LAW. The arbitrator shall apply the substantive law (and
the law of remedies, if applicable) of Delaware, or federal law, or both, as
applicable to the claim or claims asserted.

d. FINAL AND BINDING. The arbitration shall be final and binding upon
all of the parties and shall be enforceable to the extent permitted by law.

-14-

<PAGE>

9. MISCELLANEOUS.

a. NOTICES. Any notices provided hereunder must be in writing and shall
be deemed effective upon the earlier of personal delivery (including personal
delivery by fax) or the third day after mailing by first-class mail to the
recipient at the address indicated below:

To Cornerstone:

Cornerstone Propane GP, Inc.
432 Westridge Drive
Watsonville, California 95076
Attention: Ronald J. Goedde

To Executive:

or to such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the sending
party.

b. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will

-15-

<PAGE>

be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.

c. ENTIRE AGREEMENT. This document constitutes the final, complete, and
exclusive embodiment of the entire agreement and understanding between the
parties related to the subject matter hereof and supersedes and preempts any
prior or contemporaneous understandings, agreements, or representations by or
between the parties, written or oral.

d. COUNTERPARTS. This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
agreement.

e. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive and Cornerstone, and their
respective successors and assigns, except that Executive may not assign any of
his duties hereunder and he may not assign any of his rights under without the
written consent of Cornerstone, which shall not be withheld unreasonably.

f. ATTORNEYS' FEES. If any legal proceeding is necessary to enforce or
interpret the terms of this Agreement, or to recover damages for breach hereof,
the prevailing party shall be entitled

-16-

<PAGE>

to reasonable attorneys' fees, as well as costs and disbursements, in addition
to any other relief to which he or it may be entitled.

g. AMENDMENTS. No amendments or other modifications to this Agreement
may be made except by a writing signed by both parties. Nothing in this
Agreement, express or implied, is intended to confer upon any third person any
rights or remedies under or by reason of this Agreement. No amendment or waiver
of this Agreement requires the consent of any individual, partnership,
corporation or other entity not a party to this Agreement.

h. CHOICE OF LAW. All questions concerning the construction, validity
and interpretation of this Agreement will be governed by the internal law, and
not the law of conflicts, of the State of Delaware.

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

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

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<PAGE>

EXHIBIT 10.6
FORM OF
INDEMNIFICATION AGREEMENT

WHEREAS, Cornerstone Propane Partners, L.P. ("Cornerstone"), a
Delaware limited partnership, proposes to make a public offering of common units
representing limited partner interests in Cornerstone ("the Public Offering");

WHEREAS, Cornerstone Propane, L.P. ("the OLP"), a Delaware limited
partnership, is an operating partnership in which Cornerstone owns a 98.9899%
limited partner interest;

WHEREAS, Northwestern Growth Corporation ("Growth"), a South Dakota
corporation, owns 100% of Cornerstone Propane GP, Inc. ("the Managing General
Partner"), a California corporation formerly named Coast Gas, Inc., which in
turn has a limited partner interest and a managing general partner interest in
Cornerstone;

WHEREAS, SYN Inc. ("SYN"), a Delaware corporation, has or will have a
limited partner interest and a special general partner interest in Cornerstone
and a special general partner interest in the OLP;

WHEREAS, Cornerstone, the OLP and the Managing General Partner have
been organized to conduct what principally will be a retail and wholesale
propane business, as more particularly set forth in the Registration Statement
of Cornerstone on Form S-1, filed with the Securities and Exchange Commission on
October 10, 1996, as amended to date, Registration No. 333-13879 (such
Registration Statement, as it may be amended from time to time referred to
herein as "the Registration Statement");

WHEREAS, there are certain disputes between the former owners of
Synergy Group Incorporated, a Delaware corporation, and such former owners may
challenge one or more of the past or contemplated transactions by which the
business and assets of the OLP were or are to be acquired by Growth or
affiliates of Growth and contributed to the OLP and related transactions,
described in the Registration Statement (any such challenge referred to herein
as "a Vogel Claim"); and

WHEREAS, Growth desires to protect each Indemnified Party (as
hereinafter defined) with respect to the possible assertion of all Vogel Claims
and thereby assure that such claims will not adversely affect Cornerstone, the
OLP or the consummation of any of the contemplated transactions described in the
Registration Statement, including, without limitation, the Public Offering.

NOW, THEREFORE, in consideration of ten dollars ($10), the receipt and
sufficiency of which by Growth from each of the other parties hereto is hereby
acknowledged, and in consideration of the mutual promises set forth herein, the
parties hereto agree as follows:

<PAGE>

1. Growth will indemnify and hold each of Cornerstone, the OLP, the
Managing General Partner and SYN (solely in its capacity as Special General
Partner) (each of which is referred to herein as an "Indemnified Party")
harmless to the fullest extent lawful from and against any and all losses,
claims, liabilities, damages, amounts paid in settlement (subject to paragraph 4
hereof), amounts paid in judgment, costs of bonds and expenses (including,
without limitation, expenses of defense and investigation, including attorneys'
fees) that may arise and be incurred by an Indemnified Party in connection with,
resulting from or relating to a Vogel Claim.

2. Each of Cornerstone, the OLP, the Managing General Partner and
SYN will provide Growth written notice of a Vogel Claim promptly after
receipt of each and every such claim, whether the Vogel Claim is made in the
form of a demand letter, oral communication, commencement of formal legal
proceeding (including, but not limited to, receipt of summons and complaint)
or otherwise. Such notice shall be given by facsimile, confirmed by United
States Mail, return receipt requested, to Richard R. Hylland, Northwestern
Growth Corporation, 33 Third Street, S.E. Huron, South Dakota 57350,
Facsimile Number (605) 353-8586, with copies by facsimile to Richard R.
Hylland, Facsimile Number (605) 336-1671, and James E. Brown, Schiff Hardin &
Waite, 7200 Sears Tower, Chicago, Illinois 60606, Facsimile Number (312)
258-5600.

3. In accordance with paragraph 1 hereof, Growth will reimburse an
Indemnified Party for all reasonable expenses, including reasonable fees and
disbursements of attorneys, promptly upon presentation to Growth of itemized
statements for such expenses, fees and disbursements and evidence that such
amounts have been paid by the Indemnified Party. Any attorney retained by an
Indemnified Party shall be approved in advance by Growth, which approval shall
not be unreasonably withheld. If more than one Indemnified Party is a defendant
or respondent to a Vogel Claim, those Indemnified Parties shall retain a single
counsel (in addition to any local counsel which may be required by rule or to
which retention Growth consents), unless such joint representation is determined
by the counsel retained by the Indemnified Parties or by a court to be in
violation of applicable ethical standards. Nothing herein is intended to
preclude joint representation by single counsel of Growth and one or more
Indemnified Parties in connection with a Vogel Claim.

4. No Indemnified Party may, without the prior written consent of
Growth, commence negotiations to settle, effect any settlement or compromise, or
consent to the entry of any judgment in connection with any Vogel Claim. Any
Indemnified Party shall communicate to Growth, as provided in paragraph 2
hereof, any offer from, or on behalf of, any person making a Vogel Claim to
settle any such claim.

5. In the event that a judgment is entered against an Indemnified
Party as a result of a Vogel Claim, the Indemnified Party shall prosecute such
appeal or appeals therefrom as Growth may determine in its sole discretion, so
long as Growth continues to comply with its obligations provided in paragraph 1
hereof.

<PAGE>

6. Any Indemnified Party against whom a Vogel Claim is asserted
shall, at the expense of Growth, assert against a person who asserted a Vogel
Claim such counterclaim or other claim for relief (including, but not limited
to, proceedings under Rule 11 of the Federal Rules of Civil Procedure and a
claim for malicious prosecution) as Growth reasonably requests and shall
cooperation in the prosecution of such counterclaim or other claim for relief.

7. The foregoing obligations of Growth are those solely of Growth
and not of any of its officers, directors or stockholders. The rights of any
Indemnified Party hereunder are not assignable without the written consent of
Growth. The obligations of Growth hereunder are not assignable without the
written consent of each of Cornerstone, the OLP, the Managing General Partner
and SYN.

8. This agreement may be amended, modified or supplemented at any
time by written agreement executed by all parties hereto, except that no such
amendment, modification or supplementation shall result in diminishing the
rights of Cornerstone, the OLP, the Managing General Partner or SYN with respect
to indemnification arising out of a Vogel Claim as described in the
Registration Statement.

9. This agreement constitutes the entire agreement among the parties
hereto with respect to indemnification arising out of any Vogel Claim, except to
the extent that the Certificate of Incorporation or by-laws of SYN or the laws
of the State of Delaware otherwise provide rights of indemnification with
respect to any claim made against an officer or director of SYN.

10. Should any provision of this agreement for any reason be declared
invalid or unenforceable, then such provision shall be severed from this
agreement without affecting the validity or enforceability of any of the other
provisions of this agreement, and the parties shall negotiate in good faith to
replace such unenforceable or void provisions with a similar clause to achieve,
to the extent permitted under law, the purpose and intent of the provisions
declared void and unenforceable.

11. This agreement is solely for the benefit of the parties hereto.
The parties hereto acknowledge that this agreement has been entered into to
induce the underwriters of the Public Offering to proceed with the Public
Offering in the event that a Vogel Claim is asserted prior to the closing of the
Public Offering, but this agreement shall not be deemed to confer upon or give
to any person not a party hereto any indemnity, remedy, claim or other right.

12. This agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which collectively shall constitute one
and the same instrument.

13. (a) Any dispute, controversy or claim arising out of or relating
to this agreement or its breach, interpretation, termination or validity,
including any question whether a matter is subject to arbitration hereunder, is
referred to herein as a "Dispute."

3
<PAGE>

(b) If the parties fail to settle any Dispute within thirty (30)
days after any party has given notice to the other parties hereto of the claimed
existence of a Dispute, the Dispute shall be resolved by a confidential, binding
arbitration. All such Disputes shall be arbitrated in ___________ pursuant to
the arbitration rules and procedures of J.A.M.S. Endispute before a panel of
three arbitrators chosen in accordance with the procedures of J.A.M.S.
Endispute.

(c) Judgment upon any award rendered by the arbitrators may be
entered in any court having jurisdiction, and each party hereto consents and
submits to the jurisdiction of such court for purposes of such action. The
statute of limitations, estoppel, waiver, laches and similar doctrines, which
would otherwise be applicable in any action brought by a party, shall be
applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for those purposes.
The Federal Arbitration Act shall apply to the construction, interpretation and
enforcement of this arbitration provision. Each party shall bear its own
expenses (including without limitation the fees and expenses of legal counsel)
in connection with such arbitration and the fees of the arbitrators shall be
borne in accordance with the award made by the arbitrators, provided that the
arbitral award shall allocate such fees and expenses of counsel and experts and
the arbitrators according to the relative success of the contesting parties in
the arbitration, as determined by the arbitrators. The arbitrators shall award
an amount equal to the actual monetary damages suffered by each contesting
party, but the arbitrators shall not have the authority to award punitive
damages.

14. This agreement shall be governed by the laws of the State of
Delaware (regardless of the laws that might otherwise govern under applicable
principles of conflicts of law) as to all matters, including but not limited to
matters of validity, construction, effect, performance and remedies.

IN WITNESS WHEREFORE, the parties hereto have duly executed and
delivered this agreement as of the ____ day of _______, 1996.

<PAGE>

SUBSIDIARIES

NAME OF SUBSIDIARY

Cornerstone Sales & Services Corporation, a Delaware corporation

Cornerstone Propane, L.P., a Delaware limited partnership

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE PRO
FORMA CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996 AND PRO FORMA
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1996, AND FOR
THE THREE MONTHS ENDED SEPTEMBER 30, 1996 OF CORNERSTONE PROPANE PARTNERS, L.P.
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> JUN-30-1996 JUN-30-1997
<PERIOD-START> JUL-01-1995 JUL-01-1996
<PERIOD-END> JUN-30-1996 SEP-30-1996
<CASH> 0 6,307
<SECURITIES> 0 0
<RECEIVABLES> 0 37,380
<ALLOWANCES> 0 0
<INVENTORY> 0 25,964
<CURRENT-ASSETS> 0 73,398
<PP&E> 0 232,462
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 467,784
<CURRENT-LIABILITIES> 0 64,617
<BONDS> 0 220,000
0 0
0 0
<COMMON> 0<F1> 0<F1>
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 0 467,784
<SALES> 595,790 141,756
<TOTAL-REVENUES> 595,790 141,756
<CGS> 455,984 117,519
<TOTAL-COSTS> 455,984 117,519
<OTHER-EXPENSES> 107,271 24,596
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 17,865 4,467
<INCOME-PRETAX> 14,670 (4,826)
<INCOME-TAX> 100 25
<INCOME-CONTINUING> 32,535<F2> (359)<F2>
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 14,570<F2> (4,851)<F2>
<EPS-PRIMARY> 0<F2><F3> 0<F4><F2>
<EPS-DILUTED> 0 0
<FN>
<F1>CORNERSTONE PROPANE PARTNERS, L.P. IS A MASTER LIMITED PARTNERSHIP AND THEREFOR
HAS NO COMMON STOCK.
<F2>THE PRO FORMA AMOUNTS OF OPERATING INCOME, NET INCOME AND NET INCOME
PER UNIT FOR THE YEAR ENDED JUNE 30, 1996 AND FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1996 DO NOT REFLECT CERTAIN NON-RECURRING EXPENSES INCURRED BY
EMPIRE ENERGY, ACQUISITION AND LOGISTIC COST SAVINGS AND INSURANCE SAVINGS THAT
THE PARTNERSHIP BELIEVES ARE ACHIEVABLE UPON CONSUMMATION OF THE TRANSACTIONS.
SEE NOTE 3 TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF CORNERSTONE
PROPANE PARTNERS L.P. AND "RISK FACTORS--RISKS INHERENT IN AN INVESTMENT IN THE
PARTNERSHIP--PARTNERSHIP PROFITABILITY WILL DEPEND ON SUCCESSFUL INTEGRATION OF
THE COMBINED OPERATIONS."
<F3>PRO FORMA NET INCOME PER COMMON UNIT IS $.87.
<F4>PRO FORMA NET INCOME PER COMMON UNIT IS $(.29).
</FN>

</TABLE>