Document:

<PAGE>
                                                                    EXHIBIT 10.V

                   INCENTIVE DISTRIBUTION REDUCTION AGREEMENT

         This INCENTIVE DISTRIBUTION REDUCTION AGREEMENT (this "AGREEMENT") is
entered into as of October 1, 2003 by and between GulfTerra Energy Company,
L.L.C., a Delaware limited liability company (the "COMPANY"), and GulfTerra
Energy Partners, L.P., a Delaware limited partnership (the "PARTNERSHIP").

                                    RECITALS

         WHEREAS, GulfTerra GP Holding Company, a Delaware corporation ("HOLDING
CO.") and Goldman Sachs & Co., a New York limited partnership (the "INVESTOR"),
are parties to that certain Purchase and Sale Agreement, dated October 1, 2003
(the "LLC PURCHASE AGREEMENT"), whereby the Investor will purchase from Holding
Co. the Class A Membership Interests of the Company (as issued and outstanding
on the date of determination, the "CLASS A MEMBERSHIP INTERESTS") from Holding
Co.;

         WHEREAS, the Partnership and the Investor are parties to that certain
Purchase and Sale Agreement, dated October 1, 2003 (the "UNIT PURCHASE
AGREEMENT," and with the LLC Purchase Agreement, the "PURCHASE AGREEMENTS"),
whereby the Investor will purchase from the Partnership 3,000,000 newly issued
Series A common units representing limited partner interests in the Partnership
("COMMON UNITS") from the Partnership;

         WHEREAS, the Company, the Partnership and the Investor are parties to
that certain Exchange and Registration Rights Agreement, dated October 1, 2003
(the "EXCHANGE AGREEMENT,") whereby, under certain circumstances described
therein, the Investor may contribute its Class A Membership to the Partnership
in exchange for Exchange Units;

         WHEREAS, the Partnership and the Company have agreed that upon each
such Exchange pursuant to the Exchange Agreement, the Partnership will deliver
the Class A Membership Interest received in such Exchange to the Company for
cancellation, and the Company will cause the Incentive Distribution Rights (as
defined therein) to be reduced as is provided in this Agreement;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows.

                                    ARTICLE I

         SECTION 1.1 DEFINITIONS. In addition to the terms defined elsewhere
herein, capitalized terms used herein but not defined herein shall have the
meanings assigned to such terms in the Exchange Agreement (which is attached as
Exhibit A hereto).

                                   ARTICLE II
                        INCENTIVE DISTRIBUTION REDUCTION

         SECTION 2.1 TRANSFER AND REDUCTION. The parties hereto agree and
acknowledge that, immediately following any Exchange pursuant to Article II of
the Exchange Agreement, (i) the

<PAGE>

Class A Membership Interest contributed by the Investor to the Partnership shall
be transferred to the Company, (ii) upon receipt thereof, such Class A
Membership Interest shall be cancelled by the Company and (iii) the Incentive
Distributions payable by the Partnership to the Company shall be reduced by an
aggregate dollar amount (the "REDUCTION AMOUNT") equal to the aggregate dollar
amount of the most recent Common Unit Quarterly Distribution prior to the
Initial Exchange that would have been paid on the number of Exchange Units
issued in such Exchange. The Reduction Amount shall be achieved by reducing the
percentage allocation to the Company at each target level of the Incentive
Distributions (the "HIGH SPLIT ALLOCATION PERCENTAGES") by the same percentage
(the "STANDARD REDUCTION FACTOR"); provided, however, that in determining the
Standard Reduction Factor, if any distribution is to be paid in respect of an
Incentive Distribution target level, the Company shall always receive no less
than 1% of such distribution (as required by the Partnership Agreement). The
calculation and application of the Standard Reduction Factor is illustrated in
the examples set forth in Exhibit B hereto. The new High-Split Allocation
Percentages determined pursuant to this Section 2.1 shall be used to determine
the Incentive Distributions payable by the Partnership to the Company for all
quarterly distributions by the Partnership subsequent to any reduction pursuant
to this Section 2.1. The actions described in the initial sentence of this
Section 2.1 shall be deemed to occur automatically and in immediate succession.
Any administrative actions required to memorialize such steps (such as transfer
and cancellation of physical certificates and amendment of the Partnership
Agreement) shall be completed within three business days.

         SECTION 2.2 AMENDMENTS TO PARTNERSHIP AGREEMENT. In order to give
effect to the reduction of the Highest-Split Percentage pursuant to Section 2.1,
concurrently therewith, the Company shall amend the Partnership Agreement, in
compliance with Section 15.1 thereof, (i) to reflect each reduction in the
Highest-Split Percentage and (ii) to make any other changes necessary to effect
such reduction in the Incentive Distributions payable by the Partnership to the
Company.

         SECTION 2.3 CERTIFICATE; DISPUTE RESOLUTION. Upon each reduction of the
Highest-Split Percentage pursuant to Section 2.1, the Partnership will within 10
business days of the Exchange by the Holder deliver to the Company (i) a
certificate signed by an appropriate officer on behalf of the Partnership that
sets forth in reasonable detail the calculation of the new Highest-Split
Percentage pursuant to the Reduction Formula and (ii) a copy of the amendment to
the Partnership Agreement effected pursuant to Section 2.2. If the Company does
not agree with the new Highest-Split Percentage, such party shall give written
notice (a "REDUCTION DISPUTE NOTICE") to the Partnership within five business
days of the receipt of such certificate. If the parties are unable to mutually
agree on the new Highest-Split Percentage within five business days of receipt
of such Adjustment Dispute Notice by the other parties, the Company and the
Partnership shall each select a firm of independent accountants of nationally
recognized standing within five business days, which firms shall then mutually
agree upon a third firm of independent accountants of nationally recognized
standing and refer the matter to such third firm for resolution within five
additional business days. Such third firm shall determine the new Highest-Split
Percentage pursuant to the Reduction Formula within 15 business days of such
referral The aggregate fees and expense of such firms shall be borne in the
following manner: one-half by the Company and one-half by the Partnership. The
determination by such third firm of the new Highest-Split Percentage shall be
final, binding and conclusive on the parties.

                                       2
<PAGE>

                                   ARTICLE III
                                  MISCELLANEOUS

         SECTION 3.1 NOTICES. All notices and other communications provided for
or permitted under this Agreement shall be made in writing by hand delivery,
first class mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:

                  if to the Company:

                  GulfTerra Energy Company, L.L.C.
                  c/o El Paso Corporation
                  1001 Louisiana Street
                  Houston, Texas 77002
                  Facsimile:  (713) 445 8546
                  Attention:  Tom Hart

                  with a copy to:

                  GulfTerra Energy Company, L.L.C.
                  c/o El Paso Corporation
                  1001 Louisiana Street
                  Houston, Texas 77002
                  Facsimile:  (713) 420 4601
                  Attention:  Mark Leland

                  and a copy to:

                  Andrews Kurth LLP
                  600 Travis
                  Suite 4200
                  Houston, Texas 77002
                  Facsimile:  (713) 220 4285
                  Attention:  G. Michael O'Leary

                  if to the Partnership:

                  GulfTerra Energy Partners, L.P.
                  Four Greenway Plaza
                  Suite 176
                  Houston, Texas 77046
                  Facsimile:  (832) 676 1665
                  Attention:  Mark Leland

                                       3
<PAGE>

                  with a copy to:

                  GulfTerra Energy Partners, L.P.
                  Four Greenway Plaza
                  Suite 176
                  Houston, Texas 77046
                  Facsimile:  (832) 675 8163
                  Attention:  Greg Jones

                  and a copy to:

                  Akin Gump Strauss Hauer & Feld LLP
                  1900 Pennzoil Place, South Tower
                  711 Louisiana Street
                  Houston, Texas 77002
                  Facsimile:  (713) 236 0822
                  Attention:  J. Vincent Kendrick

         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
says after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.

         SECTION 3.2 TERMINATION. This Agreement shall terminate upon the later
to occur of the conversion of all of the Class A Membership Interest to a Class
B Membership Interest or the retirement of all of such Class A Membership
Interest pursuant to the provisions of the Company LLC Agreement or upon the
termination of the Exchange Agreement.

         SECTION 3.3 AMENDMENT. This Agreement may be amended or modified from
time to time only by written agreement of all the parties hereto. Each such
instrument shall be reduced to writing and shall be designated on its face an
"amendment" to this Agreement.

         SECTION 3.4 SUCCESSORS AND ASSIGNS. All of the terms, agreements,
covenants, representations, warranties, and conditions of this Agreement are
binding upon, and inure to the benefit of and are enforceable by, the parties
hereto and their respective successors and assigns.

         SECTION 3.5 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         SECTION 3.6 ARTICLES AND SECTIONS; HEADINGS. Unless otherwise provided,
all reference to Articles, Sections and paragraphs herein refer to Articles,
Sections and paragraphs of this Agreement. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                                       4
<PAGE>

         SECTION 3.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
the conflict of law rules thereof.

         SECTION 3.8 SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

         SECTION 3.9 ENTIRE AGREEMENT. This Agreement, together with Transaction
Documents to which the parties hereto are party, constitutes the entire
agreement and understanding of the parties hereto in respect of its subject
matter and supersedes all prior understandings, agreements, or representations
by or among such parties, written or oral, to the extent they relate in any way
to the subject matter hereof.

                                    * * * * *

                                       5
<PAGE>

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

                                    COMPANY

                                    GulfTerra Energy Company, L.L.C.

                                    By: /s/ James H. Lytal
                                        ---------------------------------------
                                        James H. Lytal
                                        President

                                    PARTNERSHIP

                                    GulfTerra Energy Partners, L.P.

                                    By: GulfTerra Energy Company, L.L.C.,
                                        its general partner

                                    By: /s/ James H. Lytal
                                        ---------------------------------------
                                        James H. Lytal
                                        President

                                       6
<PAGE>

                                    Exhibit A

                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                                      A-1

<PAGE>
                                    Exhibit B

               EXAMPLE OF CALCULATION OF STANDARD REDUCTION FACTOR

EXHIBIT B TO EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

INCENTIVE DISTRIBUTION REDUCTION CALCULATION EXAMPLE

<Table>
<S>                                               <C>
INVESTOR GP OWNERSHIP                                 9.9%
CLASS A QUARTERLY DISTRIBUTION                    $  1.89 MM
COMMON UNIT QUARTERLY DISTRIBUTION                $  0.07 $/Unit
ANNUALIZED COMMON UNIT DISTRIBUTION               $  2.80 $/Unit
STATUS QUO COMMON UNITS OUTSTANDING
     Public Common Units                           38.757 MM
     El Paso Common Units                          11.674
     El Paso Series C Units                        10.938
     Pro Forma Investor Units                       3.000
     Other                                             --
     Other                                             --
                                                  -------
     Total                                         64.369 MM
     Exchange Units                                 2.703 MM
                                                  -------
PRO FORMA COMMON UNITS OUTSTANDING                 67.072 MM
REDUCTION AMOUNT                                  $   7.6 MM
STANDARD REDUCTION FACTOR                            7.81%
</Table>

STATUS QUO

<Table>
<Caption>
                            GTM INCENTIVE DISTRIBUTION TABLE ($/UNIT)
            -------------------------------------------------------------------------
                                               SPLITS          ANNUAL DISTRIBUTIONS                       ANNUAL DISTRIBUTIONS ($MM)
             QUARTERLY      ANNUALIZED     ---------------   ------------------------                     --------------------------
            DISTRIBUTION   DISTRIBUTION      LP       GP       LP       GP     TOTAL                         LP       GP     TOTAL
            ------------  --------------   ------   ------   ------   ------   ------                     --------  ------  --------
<S>         <C>           <C>     <C>      <C>      <C>      <C>      <C>      <C>                        <C>       <C>     <C>
MQD            $0.275     $   --  $1.100   99.00%    1.00%   $1.100   $0.011   $1.111                      $ 70.81  $ 0.72  $ 71.52
FIRST TIER     $0.325     $1.100  $1.300   99.00%    1.00%   $0.200   $0.002   $0.202                      $ 12.87  $ 0.13  $ 13.00
SECOND TIER    $0.375     $1.300  $1.500   85.87%   14.13%   $0.200   $0.033   $0.233                      $ 12.87  $ 2.12  $ 14.99
THIRD TIER     $0.425     $1.500  $1.700   75.77%   24.23%   $0.200   $0.064   $0.264                      $ 12.87  $ 4.12  $ 16.99
THEREAFTER     $0.425     $1.700  $2.800   50.51%   49.49%   $1.100   $1.078   $2.178                      $ 70.81  $69.38  $140.18
                                                             ------   ------   ------                      -------  ------  -------
                                                             $2.800   $1.188   $3.988                Total $180.23  $76.46  $256.69
                                                   Quarterly $0.700   $0.297   $0.997       Total Per Unit $ 2.800  $1.188  $ 3.988
</Table>

PRO FORMA FOR EXCHANGE UNITS

<Table>
<Caption>
                            GTM INCENTIVE DISTRIBUTION TABLE ($/UNIT)
            -------------------------------------------------------------------------
                                               SPLITS          ANNUAL DISTRIBUTIONS                       ANNUAL DISTRIBUTIONS ($MM)
             QUARTERLY      ANNUALIZED     ---------------   ------------------------                     --------------------------
            DISTRIBUTION   DISTRIBUTION      LP       GP       LP       GP     TOTAL                        LP       GP      TOTAL
            ------------  --------------   ------   ------   ------   ------   ------                     -------  -------  --------
<S>         <C>           <C>     <C>      <C>      <C>      <C>      <C>      <C>                        <C>      <C>      <C>
MQD            $0.275     $   --  $1.100   99.00%    1.00%   $1.100   $0.011   $1.111                     $ 73.78  $  0.75  $ 74.52
FIRST TIER     $0.325     $1.100  $1.300   99.00%    1.00%   $0.200   $0.002   $0.202                     $ 13.41  $  0.14  $ 13.55
SECOND TIER    $0.375     $1.300  $1.500   86.89%   13.11%   $0.200   $0.030   $0.230                     $ 13.41  $  2.02  $ 15.44
THIRD TIER     $0.425     $1.500  $1.700   77.58%   22.42%   $0.200   $0.058   $0.258                     $ 13.41  $  3.88  $ 17.29
THEREAFTER     $0.425     $1.700  $2.800   54.29%   45.71%   $1.100   $0.926   $2.026                     $ 73.78  $ 62.11  $135.89
                                                             ------   ------   ------                     -------  - -----  -------
                                                             $2.800   $1.027   $3.827               Total $187.80  $ 68.89  $256.69
                                                   Quarterly $0.700   $0.257   $0.957              Change $  7.57  $ (7.57) $ (0.00)

                                                                                           Total Per Unit $ 2.800  $ 1.027  $ 3.827
                                                                                          Change Per Unit $    --  $(0.161) $(0.161)
</Table><PAGE>
                                                                    EXHIBIT 10.W

                       REDEMPTION AND RESOLUTION AGREEMENT

         This Redemption and Resolution Agreement (this "Agreement") dated as of
October 2, 2003, is by and among El Paso Corporation, a Delaware corporation
("El Paso"), GulfTerra Energy Partners, L.P., a Delaware limited partnership
("GTM"), and El Paso New Chaco Holding, L.P., a Delaware limited partnership
("New Chaco"). El Paso, GTM and New Chaco are sometimes referred to collectively
herein as the "Parties" and individually as a "Party."

                                  INTRODUCTION

     1. El Paso, through its wholly-owned subsidiary DeepTech International Inc.
(the "Holder"), a Delaware corporation, currently owns all 123,865 outstanding
Series B Preference Units (defined herein) in GTM.

     2. El Paso, through its wholly-owned subsidiary GulfTerra GP Holding
Company ("Holding Co."), a Delaware corporation, currently owns 100% of the
membership interest in GulfTerra Energy Company, L.L.C. (the "General Partner"),
a Delaware limited liability company and sole general partner of GTM.

     3. Simultaneously with the execution of this Agreement, (a) Holding Co.
will sell to Goldman, Sachs & Co., a New York limited partnership (the
"Investor"), a 9.9% membership interest in the General Partner, represented by
100% of the Class A Membership Interest in the General Partner (the "GP Sale"),
(b) GTM will issue to the Investor 3,000,000 Series A Common Units (as defined
in the Partnership Agreement) in a private transaction exempt from registration
(the "Unit Sale"), and (c) in connection with the GP Sale and the Unit Sale,
Holding Co., the General Partner, GTM and the Investor will enter into several
Transaction Agreements (defined herein). All of the transactions described in
(a) through (c), collectively, are referred to herein as the "Transactions".

     4. In connection with the Transactions, El Paso and GTM believe it is
desirable and in their respective best interests (a) to modify certain prior
transactions between the Parties, (b) for El Paso to cause El Paso Energy
Service Co., a Delaware corporation ("Service"), to convey certain assets to GTM
(or its designee), (c) for GTM to redeem, and for El Paso to cause the Holder to
offer for redemption, the Series B Preference Units; all as further described
in, and pursuant to the terms of, this Agreement and (d) for EPEC Realty, Inc.,
a wholly owned indirect subsidiary of El Paso ("EPEC"), and GulfTerra Texas
Pipeline, L.P., a Delaware limited partnership and wholly-owned subsidiary of
GTM ("GTM Texas"), on the date hereof, to enter into a facility lease agreement
for the Gulfdale Building at 10647 Gulfdale Street in San Antonio, Bexar County,
Texas ("Facility Lease").

     NOW THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:

                                    AGREEMENT

     1. Definitions. Any capitalized term used, but not defined herein, will
have the meaning given such term in the respective agreement referenced herein,
or, if no agreement is

                                       1
<PAGE>

referenced, then such terms shall have the meanings given such terms in the
Purchase and Sale Agreement by and between Holding Co. and the Investor dated as
of even date herewith. As used herein, "Series B Preference Units" has the same
meaning given such term in the Second Amended and Restated Agreement of Limited
Partnership of GTM (as amended, the "Partnership Agreement").

     2. Termination of Repurchase Requirement. Pursuant to the Repurchase
Agreement dated as of November 27, 2002, by and between El Paso and GTM (the
"Repurchase Agreement"), (a) El Paso agreed to repurchase, and GTM agreed to
cause one of its subsidiaries to sell, the Facility (as defined in the
Repurchase Agreement) on October 1, 2021, for a repurchase price equal to $77
million (the "Repurchase Obligation") and (b) upon such repurchase, GTM (or its
successor or assignee) would have the right to lease the Facility from El Paso
(or any other designated purchaser of the Facility) for a period of at least ten
years on the terms and conditions stated in the Repurchase Agreement (the "Lease
Obligation"). El Paso and GTM agree that (i) the Repurchase Agreement and all
transactions and obligations thereunder, including the Repurchase Obligation and
the Lease Obligation, are hereby terminated, and (ii) each of the Parties (x) is
hereby released and forever discharged from its obligations under the Repurchase
Agreement and (y) hereby waives any and all claims under the Repurchase
Agreement.

     3. Termination of Tolling Agreement. Pursuant to the Tolling Agreement
dated as of October 1, 2001, as amended on November 27, 2002, by and between El
Paso (through its wholly-owned subsidiary New Chaco) and GTM (through its wholly
owned subsidiary, Delos Offshore Company, L.L.C.) (the "Tolling Agreement"), (a)
El Paso remains the owner of the Facility for tax purposes, and (b) GTM remains
the lessee. El Paso and GTM agree that (i) the Tolling Agreement and all
transactions and obligations thereunder, are hereby terminated, and (ii) each of
the Parties (x) is hereby released and forever discharged from its obligations
under the Tolling Agreement and (y) hereby waives any and all claims under the
Tolling Agreement.

     4. Conveyance of Certain Communications Assets. Pursuant to the General and
Administrative Services Agreement ("GSA") dated May 5, 2003, by and among the
Holder, the General Partner and El Paso Field Services, L.P. ("EPFS"), a
Delaware limited partnership, the Holder and EPFS agreed to provide certain
services, including Communications Services (as defined in the GSA), to the
General Partner. Simultaneous with the execution of this Agreement, El Paso will
cause Service to convey to GTM each of the communications assets described on
Exhibit A (the "Communications Assets"). To the extent El Paso or any of its
applicable subsidiaries (the "El Paso Subsidiaries") are required under the GSA
to make any of the Communications Assets available to GTM, El Paso and the El
Paso Subsidiaries are hereby relieved of any such further obligations.
Simultaneous with the execution of this Agreement, El Paso will cause Service to
(a) execute and deliver a Bill of Sale and Assignment to GTM (or its designee),
substantially in the form of Exhibit B, and (b) execute such other instruments
or certificates and documents as may be necessary or appropriate to convey the
Communications Assets to GTM (or its designee) free and clear of all
Encumbrances or other limitations or restrictions, except for Permitted
Encumbrances. As used herein, the term "El Paso Entity" means each of El Paso,
the Holder, and each El Paso Subsidiary.

                                       2
<PAGE>

     5. Series B Redemption. Pursuant to that certain Agreement and Plan of
Merger dated August 28, 2000, by and among GTM, El Paso Partners Acquisition,
L.L.C., Crystal Gas Storage, Inc. and Crystal Holding, Inc., GTM issued, as
merger consideration, 170,000 newly created Series B Preference Units to an
affiliate of El Paso. As a result of prior redemptions and conversions, the
Holder currently holds all 123,865 outstanding Series B Preference Units.
Pursuant to the terms of their issuance, the Series B Preference Units are
redeemable in cash at any time by GTM. Simultaneous with the execution of this
Agreement, (a) GTM will redeem, and the Holder will tender for redemption, all
of the Series B Preference Units, (b) the Holder will assign and transfer to GTM
all of the right, title and interest in and to the Series B Preference Units
free and clear of all Encumbrances or other limitations or restrictions and
deliver to GTM duly endorsed stock powers (in blank) covering the Series B
Preference Units, which are uncertificated.

     6. Payment. In full satisfaction of all payment obligations under this
Agreement, in consideration of (a) the termination of (i) the Repurchase
Agreement, including El Paso's Repurchase Obligation and GTM's Lease Obligation,
and (ii) the Tolling Agreement, (b) the conveyance by El Paso (and/or its
applicable subsidiaries) of the Communications Assets to GTM (or its designee),
(c) the redemption by GTM of all of the Series B Preference Units, and (d) the
other transactions described in this Agreement, upon the execution of this
Agreement and the consummation of the transactions contemplated herein, GTM
agrees to pay El Paso $155,961,000.

     7. Facility Lease. GTM desires GTM Texas to lease from EPEC, and El Paso
and EPEC desire to lease to GTM, the building commonly referred to as the
Gulfdale Building, located at 10647 Gulfdale Street, San Antonio, Bexar County,
Texas. On the date hereof, GTM and El Paso will cause GTM Texas and EPEC,
respectively, to execute and deliver the Facility Lease, in substantially the
form set forth in Exhibit C.

     8. Representations and Warranties of El Paso. El Paso hereby represents and
warrants to, and agrees with GTM, that:

          (a) Existence and Power. Each El Paso Entity is an entity duly
     organized, validly existing and in good standing under the laws of the
     State of Delaware and has all requisite entity power and authority to
     consummate the transactions and perform each of its obligations
     contemplated hereby, as applicable. El Paso has all requisite entity power
     and authority to execute and deliver this Agreement.

          (b) Authority; Approvals.

               (i) The execution and delivery of this Agreement by El Paso, the
          consummation of each of the transactions contemplated hereby and the
          performance of each of the obligations contemplated hereby by each El
          Paso Entity have been duly and properly authorized by all necessary
          entity action on the part of each El Paso Entity. This Agreement has
          been duly executed and delivered by El Paso, and, assuming the
          accuracy of the representations and warranties of GTM in Section 9,
          constitutes the valid and legally binding obligation of El Paso,
          enforceable against it in accordance with its terms, subject,

                                       3
<PAGE>

          as to enforceability, to bankruptcy, insolvency, reorganization,
          moratorium and other similar Laws relating to or affecting creditors'
          rights and to general principles of equity (regardless of whether such
          enforceability is considered in a proceeding in equity or at Law).

               (ii) The execution and delivery of this Agreement by El Paso and
          the consummation of each of the transactions and the performance of
          each of the obligations contemplated hereby by each El Paso Entity (x)
          do not conflict with or violate (whether with or without notice or a
          lapse of time or both), require the consent of any Person to or
          otherwise result in a material detriment to any El Paso Entity under
          any of their respective Organizational Documents or any agreement to
          which any El Paso Entity is a party or any Law applicable to any El
          Paso Entity, in each case in a manner that could reasonably be
          expected to materially hinder or impair the completion of any of the
          transactions contemplated hereby or have a material adverse effect on
          the business, properties, condition (financial or otherwise),
          liabilities or prospects of any El Paso Entity; and (y) do not impose
          any penalty or other onerous condition on any El Paso Entity that
          could reasonably be expected to materially hinder or impact the
          completion of any of the transactions contemplated hereby.

               (iii) No approval from any Governmental Authority is required by
          or with respect to any El Paso Entity in connection with the execution
          and delivery by El Paso of this Agreement, the performance by any El
          Paso Entity of its obligations hereunder or the consummation by any El
          Paso Entity of the transactions contemplated hereby, except for any
          such approval the failure of which to be made or obtained (x) has not
          impaired and could not reasonably be expected to impair the ability of
          any El Paso Entity to perform its obligations under this Agreement in
          any material respect and (y) could not reasonably be expected to delay
          in any material respect or prevent the consummation of any of the
          transactions contemplated by this Agreement.

          (c) Title to and Condition of Assets. The El Paso Subsidiaries have
     good and marketable title to the Communications Assets, free and clear of
     all Encumbrances, except for Permitted Encumbrances. The Communications
     Assets are in sufficient condition and repair (normal wear and tear
     excepted), are suitable for the purposes for which they are currently used
     and are not in need of maintenance or repairs except for ordinary routine
     maintenance and repairs. No El Paso Entity has assigned or conveyed any of
     its rights, title or interest in the Repurchase Agreement or the Tolling
     Agreement to any Person.

          (d) Ownership of the Series B Preference Units. The Holder is the
     record and beneficial owner of the Series B Preference Units, free and
     clear of any Encumbrance or other limitation or restriction with full right
     and authority to deliver the Series B Preference Units hereunder, and will
     transfer and deliver to GTM on the date hereof valid title to the Series B
     Preference Units, free and clear of any Encumbrance and any other
     limitation or restriction.

                                       4
<PAGE>

          (e) Independent Investigation. Each of El Paso and the Holder (a) has
     the requisite knowledge, sophistication and experience in order to fairly
     evaluate a disposition of the Series B Preference Units, including the
     risks associated therewith, and (b) has adequate information and has made
     its own independent investigation and evaluation to the extent each deems
     necessary or appropriate concerning the properties, business and financial
     condition of GTM to make an informed decision regarding the transfer of the
     Series B Preference Units pursuant to this Agreement.

     9. Representations and Warranties of GTM. GTM hereby represents and
warrants to, and agrees with El Paso, that:

          (a) Existence and Power. GTM is a limited partnership duly organized,
     validly existing and in good standing under the laws of the State of
     Delaware and has all requisite entity power and authority to execute and
     deliver this Agreement and consummate the transactions and perform each of
     its obligations contemplated hereby.

          (b) Authority; Approvals.

               (i) The execution and delivery of this Agreement by GTM, the
          consummation by GTM of each of the transactions contemplated hereby
          and the performance by GTM of each of its obligations contemplated
          hereby have been duly and properly authorized by all necessary
          partnership action on the part of GTM. This Agreement has been duly
          executed and delivered by GTM and, assuming the accuracy of the
          representations and warranties of El Paso in Section 8, constitutes
          the valid and legally binding obligation of GTM, enforceable against
          it in accordance with its terms, subject, as to enforceability, to
          bankruptcy, insolvency, reorganization, moratorium and other similar
          Laws relating to or affecting creditors' rights and to general
          principles of equity (regardless of whether such enforceability is
          considered in a proceeding in equity or at Law).

               (ii) The execution and delivery of this Agreement by GTM and the
          consummation of each of the transactions by GTM and the performance of
          each of the obligations of GTM contemplated hereby (x) do not conflict
          with or violate (whether with or without notice or a lapse of time or
          both), require the consent of any Person to or otherwise result in a
          material detriment to GTM under its Organizational Documents or any
          agreement to which it is a party or any Law applicable to it, in each
          case in a manner that could reasonably be expected to materially
          hinder or impair the completion of any of the transactions
          contemplated hereby or have a material adverse effect on the business,
          properties, condition (financial or otherwise), liabilities or
          prospects of GTM; and (y) do not impose any penalty or other onerous
          condition on GTM that could reasonably be expected to materially
          hinder or impact the completion of any of the transactions
          contemplated hereby.

               (iii) No approval from any Governmental Authority is required by
          or with respect to GTM in connection with the execution and delivery
          by GTM of

                                       5
<PAGE>

          this Agreement, the performance by GTM of its obligations hereunder or
          the consummation by GTM of the transactions contemplated hereby,
          except for any such approval the failure of which to be made or
          obtained (x) has not impaired and could not reasonably be expected to
          impair the ability of GTM to perform its obligations under this
          Agreement in any material respect and (y) could not reasonably be
          expected to delay in any material respect or prevent the consummation
          of any of the transactions contemplated by this Agreement.

     10. Indemnification.

          (a) Indemnification by El Paso. El Paso will indemnify and hold
     harmless GTM and its Subsidiaries and each of their officers (or Persons
     performing similar functions), directors (or Persons performing similar
     functions), employees, agents, and representatives (each, a "GTM
     Indemnitee") against all Adverse Consequences (including the legal fees and
     other expenses incurred in connection with any Adverse Consequence) arising
     out of or based on:

               (i) any inaccuracy or breach as of the date of this Agreement of
          any representation or warranty made by El Paso in this Agreement; and

               (ii) the breach or default in the performance by any El Paso
          Entity of any covenant, agreement or obligation to be performed
          pursuant to this Agreement.

          (b) Indemnification by GTM. GTM will indemnify and hold harmless El
     Paso and its Affiliates (other than any GTM Indemnitee) and each of their
     officers (or Persons performing similar functions), directors (or Persons
     performing similar functions), employees, agents, and representatives
     against all Adverse Consequences (including the legal fees and other
     expenses incurred in connection with any Adverse Consequence) arising out
     of or based on:

               (i) any inaccuracy or breach as of the date of this Agreement of
          any representation or warranty made by GTM in this Agreement; and

               (ii) the breach or default in the performance by GTM of any
          covenant, agreement or obligation to be performed by GTM pursuant to
          this Agreement.

     11. Miscellaneous.

          (a) Successors and Assigns. This Agreement will be binding upon and
     inure to the benefit of the Parties and their respective successors and
     permitted assigns.

          (b) Counterparts. This Agreement may be executed in counterparts, each
     of which will be deemed an original but which together will constitute one
     and the same instrument.

          (c) Notices. All notices, requests, demands, claims, and other
     communications hereunder will be in writing. Any notice, request, demand,
     claim, or other

                                        6
<PAGE>

     communication hereunder will be deemed duly given two business days after
     it is sent by registered or certified mail, return receipt requested,
     postage prepaid, and addressed to the intended recipient as set forth
     below:

             If to El Paso:      El Paso Corporation
                                 Attn: President
                                 El Paso Building
                                 1001 Louisiana
                                 Houston, Texas 77002

             If to GTM:          GulfTerra Energy Partners, L.P.
                                 Attn: President
                                 4 Greenway Plaza
                                 Houston, Texas 77046
                                 (713) 420-2131

             With a copy to:     Akin Gump Strauss Hauer & Feld LLP
                                 711 Louisiana Street - South Tower, Suite 1900
                                 Houston, Texas 77002
                                 (713) 220-5800
                                 Attn: J. Vincent Kendrick

     Any Party may send any notice, request, demand, claim, or other
     communication hereunder to the intended recipient at the addresses set
     forth above using any other means (including personal delivery, expedited
     courier, messenger service, telecopy, ordinary mail, or electronic mail),
     but no such notice, request, demand, claim, or other communication will be
     deemed to have been duly given unless and until it actually is received by
     the intended recipient. Any Party may change the address to which notices,
     requests, demands, claims, and other communications hereunder are to be
     delivered by giving the other Party notice in the manner herein set forth.

          (d) Construction. The Parties have participated jointly in the
     negotiation and drafting of this Agreement. In the event an ambiguity or
     question of intent or interpretation arises, this Agreement will be
     construed as if drafted jointly by the Parties and no presumption or burden
     of proof will arise favoring or disfavoring any Party by virtue of the
     authorship of any of the provisions of this Agreement. The Section headings
     contained in this Agreement are inserted for convenience only and will not
     affect in any way the meaning or interpretation of this Agreement. Any
     reference to any federal, state, local, or foreign statute or Law will be
     deemed also to refer to all rules and regulations promulgated thereunder,
     unless the context requires otherwise, and will include any amendment to
     such Law now or hereinafter in effect, unless otherwise expressly set forth
     herein. The word "including" will mean including without limitation. All
     personal pronouns used in this Agreement, whether used in the masculine,
     feminine or neuter gender, will include all other genders; the singular
     will include the plural, and vice versa. Unless otherwise provided, any
     reference to any Person in this Agreement will include such Person's
     successors and assigns. The terms "herein," "hereby," "hereunder,"

                                       7
<PAGE>

     "hereof," "hereinafter," and other equivalent words refer to this Agreement
     in its entirety and not solely to the particular portion of the Agreement
     in which such word is used.

          (e) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
     ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF TEXAS WITHOUT GIVING
     EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
     STATE OF TEXAS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION
     OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS. VENUE FOR
     ANY ACTION ARISING UNDER THIS AGREEMENT WILL LIE EXCLUSIVELY IN ANY STATE
     OR FEDERAL COURT IN HARRIS COUNTY, TEXAS.

          (f) Amendments and Waivers. No amendment of any provision of this
     Agreement will be valid unless the same will be in writing and signed by
     both Parties. No waiver by any Party of any default, misrepresentation, or
     breach of warranty or covenant hereunder, whether intentional or not, will
     be deemed to extend to any prior or subsequent default, misrepresentation,
     or breach of warranty or covenant hereunder or affect in any way any rights
     arising by virtue of any prior or subsequent such occurrence.

          (g) Severability. Any term or provision of this Agreement that is
     invalid or unenforceable in any situation in any jurisdiction will not
     affect the validity or enforceability of the remaining terms and provisions
     hereof or the validity or enforceability of the offending term or provision
     in any other situation or in any other jurisdiction.

          (h) ENTIRE AGREEMENT. THIS AGREEMENT (INCLUDING THE DOCUMENTS REFERRED
     TO HEREIN) CONSTITUTES THE ENTIRE AGREEMENT AMONG THE PARTIES AND
     SUPERSEDES ANY PRIOR UNDERSTANDINGS, AGREEMENTS, OR REPRESENTATIONS BY OR
     AMONG THE PARTIES, WRITTEN OR ORAL, TO THE EXTENT THEY HAVE RELATED IN ANY
     WAY TO THE SUBJECT MATTER HEREOF, INCLUDING THE CONFIDENTIALITY AGREEMENT.
     THE RIGHTS AND OBLIGATIONS CREATED BY THIS AGREEMENT ARE SEPARATE AND
     INDEPENDENT FROM ANY RIGHTS AND OBLIGATIONS CREATED BY ANY OTHER AGREEMENTS
     BETWEEN, INCLUDING OR RELATING TO ANY OF THE PARTIES HERETO (OR ANY OF
     THEIR AFFILIATES).

          (i) Damages. In no event will any party to this Agreement be liable to
     any other party to this Agreement, irrespective of whether alleged to be by
     way of indemnity or as a result of breach of contract, breach of warranty,
     tort (including negligence), strict liability, or any other legal theory,
     for damages that constitute punitive, exemplary, incidental, special,
     indirect, or consequential damages of any nature whatsoever.

                  [Remainder of Page Intentionally Left Blank]

                                       8
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth in the preamble.

                                           EL PASO CORPORATION

                                           By:      /s/ Thomas M. Hart III
                                                    ---------------------------

                                           Name:    Thomas M. Hart III
                                                    ---------------------------

                                           Title:   Vice President
                                                    ---------------------------

                                           GULFTERRA ENERGY PARTNERS, L.P.

                                           By:      /s/ James H. Lytal
                                                    ---------------------------

                                           Name:    James H. Lytal
                                                    ---------------------------

                                           Title:   President
                                                    ---------------------------

                                           EL PASO NEW CHACO HOLDING, L.P.

                                           By:      /s/ D. Mark Leland
                                                    ---------------------------

                                           Name:    D. Mark Leland
                                                    ---------------------------

                                           Title:   Senior Vice President
                                                    ---------------------------

               REDEMPTION AND RESOLUTION AGREEMENT SIGNATURE PAGE

                                       C-1

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