Document:

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                                                                 CONFORMED COPY

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                               EL PASO CORPORATION

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

                             $3,000,000,000 364-DAY
                        REVOLVING CREDIT AND COMPETITIVE
                           ADVANCE FACILITY AGREEMENT

                            Dated as of June 11, 2001

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

                            THE CHASE MANHATTAN BANK,
                             as Administrative Agent
                              and CAF Advance Agent

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

                     ABN AMRO BANK, N.V. and CITIBANK, N.A.,
                           as Co-Documentation Agents

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                                                                 CONFORMED COPY

              BANK OF AMERICA, N.A. and CREDIT SUISSE FIRST BOSTON,
                            as Co-Syndication Agents

                           JP MORGAN SECURITIES, INC.,
                     as Sole Lead Arranger and Book Manager

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<PAGE>   3

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                           PAGE
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<S>                                                                        <C>
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS....................................1

          SECTION 1.1.   Certain Defined Terms................................1

          SECTION 1.2.   Computation of Time Periods.........................15

          SECTION 1.3.   Accounting Terms....................................16

          SECTION 1.4.   References..........................................16

ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES.................................16

          SECTION 2.1.   The Revolving Credit Advances.......................16

          SECTION 2.2.   Making the Revolving Credit Advances................16

          SECTION 2.3.   Evidence of Debt....................................17

          SECTION 2.4.   CAF Advances........................................18

          SECTION 2.5.   Procedure for CAF Advance Borrowings................18

          SECTION 2.6.   CAF Advance Payments................................21

          SECTION 2.7.   Evidence of Debt....................................22

          SECTION 2.8.   Fees................................................22

          SECTION 2.9.   Reduction of the Commitments........................23

          SECTION 2.10.   Repayment of Advances..............................23

          SECTION 2.11.   Interest on Revolving Credit Advances..............23

          SECTION 2.12.   Additional Interest on Eurodollar Rate Advances....24

          SECTION 2.13.   Interest Rate Determination........................24

          SECTION 2.14.   Voluntary Conversion of Advances...................25

          SECTION 2.15.   Optional and Mandatory Prepayments.................26

          SECTION 2.16.   Increased Costs....................................26

          SECTION 2.17.   Increased Capital..................................27
</Table>

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<Table>
<Caption>
                                                                           PAGE
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<S>                                                                        <C>
          SECTION 2.18.   Illegality.........................................28

          SECTION 2.19.   Pro Rata Treatment, Payments and Computations......28

          SECTION 2.20.   Taxes..............................................29

          SECTION 2.21.   Sharing of Payments, Etc...........................31

          SECTION 2.22.   Use of Proceeds....................................32

          SECTION 2.23.   Extension of Stated Termination Date...............32

          SECTION 2.24.   [Intentionally Left Blank].........................33

          SECTION 2.25.   Replacement of Lenders.............................33

ARTICLE III CONDITIONS OF EFFECTIVENESS AND LENDING..........................33

          SECTION 3.1.   Conditions Precedent to Effectiveness of this
                           Agreement.........................................33

          SECTION 3.2.   Conditions Precedent to Initial Advances............34

          SECTION 3.3.   Conditions Precedent to Initial Advances to Any
                           Borrowing Subsidiary..............................35

          SECTION 3.4.   Conditions Precedent to Each Borrowing..............35

ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................36

          SECTION 4.1.   Representations and Warranties of the Borrowers.....36

ARTICLE V COVENANTS OF THE BORROWERS.........................................38

          SECTION 5.1.   Affirmative Covenants...............................38

          SECTION 5.2.   Negative Covenants..................................39

          SECTION 5.3.   Reporting Requirements..............................43

          SECTION 5.4.   Restrictions on Material Subsidiaries...............45

ARTICLE VI GUARANTEES........................................................45

          SECTION 6.1.   Guarantees..........................................45

          SECTION 6.2.   No Subrogation......................................46

          SECTION 6.3.   Amendments, etc. with respect to the Obligations;
                           Waiver of Rights..................................46

          SECTION 6.4.   Guarantee Absolute and Unconditional................47
</Table>

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<Table>
<Caption>
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<S>                                                                        <C>
          SECTION 6.5.   Reinstatement.......................................48

ARTICLE VII EVENTS OF DEFAULT................................................48

          SECTION 7.1.   Event of Default....................................48

ARTICLE VIII THE ADMINISTRATIVE AGENT AND THE CAF ADVANCE AGENT..............51

          SECTION 8.1.   Authorization and Action............................51

          SECTION 8.2.   Administrative Agent's and CAF Advance Agent's
                           Reliance, Etc.....................................51

          SECTION 8.3.   Chase and Affiliates................................52

          SECTION 8.4.   Lender Credit Decision..............................52

          SECTION 8.5.   Indemnification.....................................52

          SECTION 8.6.   Successor Administrative Agent and CAF Advance
                           Agent.............................................53

          SECTION 8.7.   Syndication Agent; Co-Documentation Agents..........53

ARTICLE IX MISCELLANEOUS.....................................................53

          SECTION 9.1.   Amendments, Etc.....................................53

          SECTION 9.2.   Notices, Etc........................................54

          SECTION 9.3.   No Waiver; Remedies.................................54

          SECTION 9.4.   Costs and Expenses; Indemnity.......................54

          SECTION 9.5.   Right of Set-Off....................................55

          SECTION 9.6.   Binding Effect......................................56

          SECTION 9.7.   Assignments and Participations......................56

          SECTION 9.8.   Confidentiality.....................................58

          SECTION 9.9.   Consent to Jurisdiction.............................59

          SECTION 9.10.   GOVERNING LAW......................................59

          SECTION 9.11.   Rate of Interest...................................59

          SECTION 9.12.   Execution in Counterparts..........................60

          SECTION 9.13.   Existing Credit Facility...........................60
</Table>

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                                    SCHEDULE

Schedule I             Commitments, Addresses, Etc.

                                    EXHIBITS

Exhibit A              Form of Note
Exhibit B              Form of Notice of Borrowing
Exhibit C              Form of CAF Advance Request
Exhibit D              Form of CAF Advance Offer
Exhibit E              Form of CAF Advance Confirmation
Exhibit F              Form of Assignment and Acceptance
Exhibit G              Form of Opinion of [Associate General][Senior] Counsel
                         of the Company
Exhibit H              Form of Opinion of New York Counsel to the Company
Exhibit I              Form of Process Agent Letter
Exhibit J              Form of Joinder Agreement
Exhibit K              Form of Opinion of [Associate General][Senior] Counsel
                         of the Company
Exhibit L              Form of Opinion of New York Counsel to the Company
Exhibit M              Form of Extension Request

                                       iv
<PAGE>   7

         $3,000,000,000 364-DAY REVOLVING CREDIT AND COMPETITIVE ADVANCE
FACILITY AGREEMENT, dated as of June 11, 2001, among EL PASO CORPORATION, a
Delaware corporation (the "Company"), EL PASO NATURAL GAS COMPANY, a Delaware
corporation ("EPNGC"), TENNESSEE GAS PIPELINE COMPANY, a Delaware corporation
("Tennessee"), the several banks and other financial institutions from time to
time parties to this Agreement (the "Lenders"), THE CHASE MANHATTAN BANK, a New
York banking corporation, as administrative agent (in such capacity, the
"Administrative Agent") and as CAF Advance Agent (in such capacity, the "CAF
Advance Agent") for the Lenders hereunder, ABN AMRO BANK, N.V. and CITIBANK,
N.A., as co-documentation agents (in such capacity, the "Co-Documentation
Agents") for the Lenders, and BANK OF AMERICA, N.A. and CREDIT SUISSE FIRST
BOSTON, as co-syndication agents (in such capacity, the "Co-Syndication Agents")
for the Lenders.

         The parties hereto hereby agree as follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

         SECTION 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

                  "3-Year Facility" means the 3-Year Revolving Credit and
         Competitive Advance Facility Agreement, dated as of August 4, 2000,
         among the Company, EPNGC, Tennessee, the banks and other lenders
         parties thereto, Chase, as Administrative Agent and CAF Advance Agent,
         Citibank, N.A. and ABN Amro Bank, N.V., as Co-Documentation Agent and
         Bank of America, N.A., as Syndication Agent, as the same has been and
         may be amended, supplemented and modified from time to time.

                  "Administrative Agent" has the meaning assigned to such term
         in the preamble hereof.

                  "Advance" means an advance by a Lender to any Borrower
         pursuant to Article II, and refers to a Base Rate Advance, a Eurodollar
         Rate Advance or a CAF Advance.

                  "Affiliate" means as to any Person, any other Person that,
         directly or indirectly, controls, is controlled by or is under common
         control with such Person or is a director or officer of such Person.
         The term "control" (including the terms "controlled by" or "under
         common control with") means, with respect to any Person, the
         possession, direct or indirect, of the power to vote 20% or more of the
         securities having ordinary voting power for the election of directors
         of such Person or to direct or cause the direction of the management
         and policies of such Person, whether through ownership of voting
         securities or by contract or otherwise. Neither a director nor any
         officer of a Person, in such capacity, shall be deemed an "Affiliate"
         of such Person for purposes of this Agreement.

                  "Agreement" means this 364-Day Revolving Credit and
         Competitive Advance Facility, as amended, supplemented or otherwise
         modified from time to time.

<PAGE>   8

                                                                              2

                  "Alternate Program" means any program providing for the sale
         or other disposition of trade or other receivables entered into by the
         Company or a Subsidiary which is in addition to or in replacement of
         the program evidenced by either Receivables Purchase and Sale Agreement
         (whether or not either Receivables Purchase and Sale Agreement shall
         then be in effect), provided that such program is on terms (a)
         substantially similar to either Receivables Purchase and Sale Agreement
         (as modified to comply with FASB 125 or similar policies or guidelines
         from time to time in effect) or (b) customary for similar transactions
         as reasonably determined by the Administrative Agent.

                  "Applicable Eurodollar Rate Margin" with respect to any
         Eurodollar Rate Advance to any Borrower means for any day the rate per
         annum set forth below opposite the applicable S&P Bond Rating and
         Moody's Bond Rating in effect on such day for such Borrower:

<TABLE>
<CAPTION>
                    Bond Rating                     Applicable Eurodollar
                   (S&P/Moody's)      Level              Rate Margin
                   -------------      -----         ---------------------
<S>                                   <C>           <C>
             A/A2 or higher              I                 .180%
             A-/A3                      II                 .270%
             BBB+/Baa1                 III                 .310%
             BBB/Baa2                   IV                 .400%
             BBB-/Baa3                   V                 .550%
             BB+/Ba1 or lower           VI                 .800%;

</TABLE>

         provided that (i) if the Bond Ratings for any Borrower do not fall
         within the same Level, the Applicable Eurodollar Rate Margin applicable
         to such day will be the percentage opposite the Bond Rating that is at
         the higher level (Level I being the highest and Level VI being the
         lowest Level), (ii) in the event a Bond Rating for a Borrower is not
         available from one of the Rating Agencies, the Applicable Eurodollar
         Rate Margin will be based on the Bond Rating of the other Rating
         Agency, (iii) in the event a Bond Rating for the Company is available
         from none of the Rating Agencies, the Applicable Eurodollar Rate Margin
         for the Company will be the percentage opposite Level VI, and (iv) in
         the event a Bond Rating for a Borrowing Subsidiary is available from
         none of the Rating Agencies, the Applicable Eurodollar Rate Margin for
         such Borrower will be determined using the Bond Ratings of the Company
         (unless there is another Borrower (the "Intermediate Parent") that
         directly or indirectly owns 100% of the common stock of such Borrower
         and the Intermediate Parent has a Bond Rating in effect, in which case,
         the Applicable Eurodollar Rate Margin for such Borrower will be
         determined using the Bond Ratings of the Intermediate Parent of such
         Borrower); provided, that for each day on which the aggregate principal
         amount of the Advances outstanding hereunder is equal to or greater
         than 25% of the aggregate amount of the total Commitments hereunder,
         the Applicable Eurodollar Rate Margin for each Borrower will be
         increased by .125% for such day.

                  "Applicable LIBO Rate" means in respect of any CAF Advance
         requested pursuant to a LIBO Rate CAF Advance Request, an interest rate
         per annum equal to the rate which appears on Page 3750 of the Telerate
         Service (or any successor or substitute page of such Service, or any
         successor to or substitute for such service providing rate

<PAGE>   9

                                                                              3

         quotations comparable to those currently provided on such page of such
         service, as determined by the Administrative Agent from time to time
         for purposes of providing quotations of interest rates applicable to
         Dollar deposits in the London interbank market) as at approximately
         11:00 A.M., London time, two Business Days prior to the beginning of
         the period for which such CAF Advance is to be outstanding as the rate
         for Dollar deposits with a maturity comparable to such period.

                  "Assignment and Acceptance" means an assignment and acceptance
         entered into by a Lender and an Eligible Assignee, and accepted by the
         Administrative Agent, in substantially the form of Exhibit F.

                  "Base Rate" means for any day, a rate per annum (adjusted to
         the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, rounded
         upwards to the next highest 1/16 of 1%) equal to the greater of (a) the
         Prime Rate in effect on such day and (b) the Effective Federal Funds
         Rate in effect on such day plus 1/2 of 1%. Any change in the Base Rate
         due to a change in the Prime Rate or the Effective Federal Funds Rate
         shall be effective as of the opening of business on the effective day
         of such change in the Prime Rate or the Effective Federal Funds Rate,
         respectively.

                  "Base Rate Advance" means an Advance which bears interest as
         provided in Section 2.11(a)(i).

                  "Bond Rating" means a rating assigned to a Borrower's senior
         long-term unsecured debt by any of the Rating Agencies.

                  "Borrowers" means the collective reference to the Company and
         each Borrowing Subsidiary; each a "Borrower".

                  "Borrowing" means a borrowing consisting of Advances of the
         same Type made on the same day by the Lenders and, in the case of
         Eurodollar Rate Advances, having Interest Periods of the same duration,
         it being understood that there may be more than one Borrowing on a
         particular day.

                  "Borrowing Subsidiary" means EPNGC, Tennessee and each other
         domestic Subsidiary of the Company which has been designated by the
         Company as a "Borrowing Subsidiary" by written notice to the
         Administrative Agent, which designation shall not have been revoked by
         written notice by the Company to the Administrative Agent (provided,
         that no such designation shall be revoked if either (a) any Default or
         Event of Default shall have occurred and be continuing or (b) any
         Advance to such Borrowing Subsidiary, or any interest accrued thereon,
         shall be outstanding); collectively, the "Borrowing Subsidiaries". For
         avoidance of doubt, (i) Tennessee may be undesignated as a Borrowing
         Subsidiary by written notice to the Administrative Agent by the Company
         and (ii) EPNGC shall always be a Borrower hereunder.

                  "Business Day" means a day of the year on which banks are not
         required or authorized to close in New York, New York and, if the
         applicable Business Day relates to any Eurodollar Rate Advances or LIBO
         Rate CAF Advances, on which dealings are carried on in the London
         interbank market.

<PAGE>   10

                                                                              4

                  "Business Entity" means a partnership, limited partnership,
         limited liability partnership, corporation (including a business
         trust), limited liability company, unlimited liability company, joint
         stock company, trust, unincorporated association, joint venture or
         other entity.

                  "CAF Advance" means an Advance made pursuant to Sections 2.4
         and 2.5.

                  "CAF Advance Agent" has the meaning assigned to such term in
         the preamble hereof.

                  "CAF Advance Availability Period" means the period from and
         including the Closing Date until the earlier of (a) the date which is 7
         days prior to the Stated Termination Date and (b) the Termination Date.

                  "CAF Advance Confirmation" means each confirmation by the
         applicable Borrower of its acceptance of CAF Advance Offers, which CAF
         Advance Confirmation shall be substantially in the form of Exhibit E
         and shall be delivered to the CAF Advance Agent by telecopy.

                  "CAF Advance Interest Payment Date" means as to each CAF
         Advance, each interest payment date specified by the applicable
         Borrower for such CAF Advance in the related CAF Advance Request.

                  "CAF Advance Lenders" means Lenders from time to time
         designated by the Company, in consultation with the CAF Advance Agent,
         as CAF Advance Lenders as provided in Section 2.4.

                  "CAF Advance Maturity Date" means as to any CAF Advance, the
         date specified by the applicable Borrower pursuant to Section
         2.5(d)(ii) in its acceptance of the related CAF Advance Offer.

                  "CAF Advance Offer" means each offer by a CAF Advance Lender
         to make CAF Advances pursuant to a CAF Advance Request, which CAF
         Advance Offer shall contain the information specified in Exhibit D and
         shall be delivered to the CAF Advance Agent by telephone, immediately
         confirmed by telecopy.

                  "CAF Advance Request" means each request by the applicable
         Borrower for CAF Advance Lenders to submit bids to make CAF Advances,
         which request shall contain the information in respect of such
         requested CAF Advances specified in Exhibit C and shall be delivered to
         the CAF Advance Agent in writing, by telecopy, or by telephone,
         immediately confirmed by telecopy.

                  "Capitalization" of any Person means the sum (without
         duplication) of (a) consolidated Debt of such Person and its
         consolidated Subsidiaries, plus (b) the aggregate amount of Guaranties
         by such Person and its consolidated Subsidiaries, plus (c) the
         consolidated common and preferred stockholders' equity of such Person
         and its consolidated Subsidiaries, plus (d) the cumulative amount by
         which stockholders' equity of such Person shall have been reduced by
         reason of non-cash write downs of long-term assets from and after the
         Effective Date.

                  "Chase" means The Chase Manhattan Bank, a New York banking
         corporation.

<PAGE>   11

                                                                              5

                  "Closing Date" has the meaning assigned to such term in
         Section 3.2.

                  "Co-Documentation Agents" has the meaning assigned to such
         term in the preamble hereof.

                  "Commitment" means as to any Lender, the obligation of such
         Lender to make Revolving Credit Advances to the Borrowers hereunder in
         an aggregate principal amount at any one time outstanding not to exceed
         the amount set forth opposite such Lender's name on Schedule I (as such
         Schedule I is amended from time to time pursuant to Section 9.7(c)), as
         such amount may be reduced from time to time in accordance with the
         provisions of this Agreement.

                  "Commitment Expiration Date" has the meaning assigned to such
         term in Section 2.23(a).

                  "Commitment Percentage" means as to any Lender at any time,
         the percentage which such Lender's Commitment then constitutes of the
         aggregate Commitments (or, at any time after the Commitments shall have
         expired or terminated, the percentage which the aggregate principal
         amount of such Lender's Advances then outstanding constitutes of the
         aggregate principal amount of the Advances then outstanding).

                  "Company" has the meaning assigned to such term in the
         preamble hereof.

                  "Contingent Guaranty" has the meaning assigned to such term in
         the definition of the term "Guaranty" contained in this Section 1.1.

                  "Convert", "Conversion" and "Converted" each refers to a
         conversion of Advances of one Type into Advances of another Type
         pursuant to Section 2.13, 2.14 or 2.18.

                  "Co-Syndication Agents" has the meaning assigned to such term
         in the preamble hereof.

                  "Current Reimbursement Obligations" means, with respect to any
         Person, non-contingent obligations of such Person to reimburse a bank
         or other Person in respect of amounts paid under a letter of credit or
         similar instrument that are paid on or prior to the fifth Business Day
         after the due date therefor.

                  "Debt" means, as to any Person, all Indebtedness of such
         Person other than (a) any Project Financing of such Person, (b) in the
         case of the Company or a Subsidiary, any liabilities of the Company or
         such Subsidiary, as the case may be, under any Alternate Program, or
         any document executed by the Company or such Subsidiary, as the case
         may be, in connection therewith, (c) any obligations of the Company or
         a Subsidiary with respect to lease payments for the headquarters
         building of the Company located in Houston, Texas and (d) Current
         Reimbursement Obligations of such Person; provided, however, that for
         purposes of Article V, "Debt" shall not include up to an aggregate
         amount (determined without duplication of amount) of $200,000,000 of
         (i) the amount of optional payments in lieu of asset repurchase or
         other payments to similar effect, including extension or renewal
         payments, on off balance sheet leases and (ii) the amount

<PAGE>   12

                                                                              6

         of the purchase price for optional acquisition of such asset (in either
         case, calculated at the lower amount payable in respect of such asset
         under clause (i) or (ii) above).

                  "Default" means any event that would constitute an Event of
         Default but for the requirement that notice be given or time elapse or
         both.

                  "Dollars" and "$" means dollars in lawful currency of the
         United States of America.

                  "Effective Date" has the meaning assigned to such term in
         Section 3.1.

                  "Effective Federal Funds Rate" means, for any day, 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, 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 Administrative Agent from three Federal
         funds brokers of recognized standing selected by it.

                  "Eligible Assignee" means, with respect to any particular
         assignment under Section 9.7, any bank or other financial institution
         approved in writing by the Company expressly with respect to such
         assignment and, except as to such an assignment by Chase so long as
         Chase is the Administrative Agent hereunder, the Administrative Agent
         as an Eligible Assignee for purposes of this Agreement, provided that
         (i) neither the Administrative Agent's nor the Company's approval shall
         be unreasonably withheld and (ii) neither the Administrative Agent's
         nor the Company's approval shall be required if the assignee is another
         Lender or an Affiliate of the assigning Lender.

                  "EPNGC" has the meaning assigned to such term in the preamble
         hereof.

                  "EPTPC" means El Paso Tennessee Pipeline Co., a Delaware
         corporation.

                  "EPTPC Facility" means the $3,000,000,000 Revolving Credit and
         Competitive Advance Facility Agreement, dated as of November 4, 1996,
         among EPTPC, the several financial institutions from time to time
         parties thereto, and The Chase Manhattan Bank, as administrative agent
         and CAF advance agent thereunder, as the same may be amended, modified
         or supplemented from time to time.

                  "Equity Interests" means any capital stock, partnership, joint
         venture, member or limited liability or unlimited liability company
         interest, beneficial interest in a trust or similar entity or other
         equity interest or investment of whatever nature.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time, and the regulations promulgated and
         rulings issued from time to time thereunder.

                  "ERISA Affiliate" means any Person who is a member of the
         Company's controlled group within the meaning of Section 4001(a)(14)(A)
         of ERISA.

<PAGE>   13

                                                                              7

                  "Eurocurrency Liabilities" has the meaning assigned to that
         term in Regulation D of the Board of Governors of the Federal Reserve
         System, as in effect from time to time.

                  "Eurodollar Rate" means, for any Interest Period for each
         Eurodollar Rate Advance comprising part of the same Borrowing, an
         interest rate per annum equal to the rate which appears on Page 3750 of
         the Telerate Service (or on any successor or substitute page of such
         service, or any successor to or substitute for such service providing
         rate quotations comparable to those currently provided on such page of
         such service, as determined by the Administrative Agent from time to
         time for purposes of providing quotations of interest rates applicable
         to Dollar deposits in the London interbank market) as at approximately
         11:00 A.M. (London, England time) two Business Days before the first
         day of such Interest Period as the rate for Dollar deposits with a
         maturity comparable to such Interest Period; provided that if such rate
         is not available at such time for any reason, the Eurodollar Rate for
         such Borrowing for such Interest Period shall be the interest rate per
         annum equal to the average (rounded upward to the nearest whole
         multiple of 1/16 of 1% per annum, if such average is not such a
         multiple) of the rate per annum at which deposits in Dollars are
         offered by the principal office of each of the Reference Lenders in
         London, England, to prime banks in the London interbank market as at
         approximately 11:00 A.M. (London, England time) two Business Days
         before the first day of such Interest Period, in an approximate amount
         of each such Reference Lender's share of the relevant Borrowing for the
         applicable Interest Period. The Eurodollar Rate for the Interest Period
         for each Eurodollar Rate Advance comprising part of the same Borrowing,
         when being determined pursuant to the foregoing proviso clause, shall
         be determined by the Administrative Agent on the basis of applicable
         rates furnished to and received by the Administrative Agent from the
         Reference Lenders two Business Days before the first day of such
         Interest Period, subject, however, to the provisions of Section 2.13.

                  "Eurodollar Rate Advance" means an Advance which bears
         interest determined by reference to the Eurodollar Rate, as provided in
         Section 2.11(a)(ii).

                  "Eurodollar Reserve Percentage" for any Lender for any
         Interest Period for any Eurodollar Rate Advance means the reserve
         percentage applicable during such Interest Period under regulations
         issued from time to time by the Board of Governors of the Federal
         Reserve System (or if more than one such percentage shall be so
         applicable, the daily average of such percentages for those days in
         such Interest Period during which any such percentage shall be so
         applicable) for determining the maximum reserve requirement (including,
         but not limited to, any emergency, supplemental or other marginal
         reserve requirement) for such Lender with respect to liabilities or
         assets consisting of or including Eurocurrency Liabilities having a
         term equal to such Interest Period.

                  "Events of Default" has the meaning assigned to such term in
         Section 7.1.

                  "Excluded Acquisition Debt" means (a) Debt, Guaranties or
         reimbursement obligations of any Business Entity acquired by the
         Company or any of its Subsidiaries and which Debt, Guaranties or
         reimbursement obligations exist immediately prior to such acquisition
         (provided that (i) such Debt, Guaranties or reimbursement obligations
         are not incurred solely in anticipation of such acquisition and (ii)
         immediately prior to such acquisition such Business Entity is not a
         Subsidiary of the Company), (b) Debt,

<PAGE>   14

                                                                              8

         Guaranties or reimbursement obligations of EPTPC and its Subsidiaries
         in existence on the date of the merger of El Paso Tennessee Pipeline
         Company with El Paso Merger Company or (c) Debt, Guaranties or
         reimbursement obligations in respect of any asset acquired by the
         Company or any of its Subsidiaries and which Debt, Guaranties or
         reimbursement obligations existed immediately prior to such acquisition
         (provided that (i) such Debt, Guaranties or reimbursement obligations
         were not incurred solely in anticipation of such acquisition and (ii)
         immediately prior to such acquisition such asset was not an asset of
         the Company or any of its Subsidiaries).

                  "Existing 364-Day Facility" means the $2,000,000,000 364-Day
         Revolving Credit and Competitive Advance Facility Agreement dated as of
         August 4, 2000, as the same has been or may be amended, supplemented or
         otherwise modified prior to the Closing Date, among the Company, EPNGC,
         Tennessee the several financial institutions from time to time parties
         thereto, Chase, as Administrative Agent and CAF Advance Agent,
         Citibank, N.A. and ABN Amro Bank, N.V., as Co-Documentation Agents and
         Bank of America, N.A., as Syndication Agent.

                  "Exposure" means (a) with respect to an Objecting Lender at
         any time, the aggregate outstanding principal amount of its Revolving
         Credit Advances and (b) with respect to any other Lender at any time,
         the maximum amount of the Commitment of such Lender.

                  "Extension Request" means each request by the Borrowers made
         pursuant to Section 2.23 for the Lenders to extend the Stated
         Termination Date, which shall contain the information in respect of
         such extension specified in Exhibit M and shall be delivered to the
         Administrative Agent in writing.

                  "Facility Fee Commencement Date" means the date hereof.

                  "FERC" means the Federal Energy Regulatory Commission, or any
         agency or authority of the United States from time to time succeeding
         to its function.

                  "Fixed Rate CAF Advance" means any CAF Advance made pursuant
         to a Fixed Rate CAF Advance Request.

                  "Fixed Rate CAF Advance Request" means any CAF Advance Request
         requesting the CAF Advance Lenders to offer to make CAF Advances at a
         fixed rate (as opposed to a rate composed of the Applicable LIBO Rate
         plus (or minus) a margin).

                  "GAAP" means generally accepted accounting principles in the
         United States of America, as in effect from time to time.

                  "Guaranty", "Guaranteed" and "Guaranteeing" each means any act
         by which any Person assumes, guarantees, endorses or otherwise incurs
         direct or contingent liability in connection with, or agrees to
         purchase or otherwise acquire or otherwise assures a creditor against
         loss in respect of, any Debt or Project Financing of any Person other
         than the Company or any of its consolidated Subsidiaries (excluding (a)
         any liability by endorsement of negotiable instruments for deposit or
         collection or similar transactions in the ordinary course of business,
         (b) any liability in connection with obligations of the Company, any of
         its consolidated Subsidiaries, including obligations under any

<PAGE>   15

                                                                              9

         conditional sales agreement, equipment trust financing or equipment
         lease, and (c) any such act in connection with a Project Financing that
         either (i) guarantees to the provider of such Project Financing or any
         other Person performance of the acquisition, improvement, installation,
         design, engineering, construction, development, completion, maintenance
         or operation of, or otherwise affects any such act in respect of, all
         or any portion of the project that is financed by such Project
         Financing or performance by a Project Financing Subsidiary of certain
         obligations to Persons other than the provider of such Project
         Financing, except during any period, and then only to the extent, that
         such guaranty is a guaranty of payment of such Project Financing (other
         than a guaranty of payment of the type referred to in subclause (ii)
         below) or (ii) is contingent upon, or the obligation to pay or perform
         under which is contingent upon, the occurrence of any event other than
         or in addition to the passage of time or any Project Financing becoming
         due (any such act referred to in this clause (c) being a "Contingent
         Guaranty"); provided, however, that for purposes of this definition the
         liability of the Company or any of its Subsidiaries with respect to any
         obligation as to which a third party or parties are jointly, or jointly
         and severally, liable as a guarantor or otherwise as contemplated
         hereby and have not defaulted on its or their portions thereof, shall
         be only its pro rata portion of such obligation.

                  "Indebtedness" of any Person means, without duplication (a)
         indebtedness of such Person for borrowed money, (b) obligations of such
         Person (other than any portion of any trade payable obligation of such
         Person which shall not have remained unpaid for 91 days or more from
         the original due date of such portion) to pay the deferred purchase
         price of property or services, and (c) obligations of such Person as
         lessee under leases which shall have been or should be, in accordance
         with GAAP recorded as capital leases, except that where such
         indebtedness or obligation of such Person is made jointly, or jointly
         and severally, with any third party or parties other than any
         consolidated Subsidiary of such Person, the amount thereof for the
         purposes of this definition only shall be the pro rata portion thereof
         payable by such Person, so long as such third party or parties have not
         defaulted on its or their joint and several portions thereof.

                  "Indemnified Party" means any or all of the Lenders, the
         Administrative Agent and the CAF Advance Agent.

                  "Interest Period" means, for each Eurodollar Rate Advance
         comprising part of the same Borrowing, the period beginning on the date
         of such Advance or the date of the Conversion of any Advance into such
         an Advance and ending on the last day of the period selected by the
         applicable Borrower pursuant to the provisions below and, thereafter,
         each subsequent period commencing on the last day of the immediately
         preceding Interest Period and ending on the last day of the period
         selected by the applicable Borrower pursuant to the provisions below.
         The duration of each such Interest Period shall be one, two, three or
         six months, or, subject to availability to each Lender, nine or twelve
         months, in each case as the applicable Borrower may, upon notice
         received by the Administrative Agent not later than 12:00 noon (New
         York City time) on the third Business Day prior to the first day of
         such Interest Period with respect to Eurodollar Rate Advances, select;
         provided, however, that:

                           (a) the duration of any Interest Period which
                  commences before the second anniversary of the Termination
                  Date and would otherwise end

<PAGE>   16

                                                                              10

                  after the second anniversary of the Termination Date shall end
                  on the second anniversary of the Termination Date;

                           (b) if the last day of such Interest Period would
                  otherwise occur on a day which is not a Business Day, such
                  last day shall be extended to the next succeeding Business
                  Day, except if such extension would cause such last day to
                  occur in a new calendar month, then such last day shall occur
                  on the next preceding Business Day;

                           (c) Interest Periods commencing on the same date for
                  Advances comprising the same Borrowing shall be of the same
                  duration;

                           (d) with respect to Advances made by an Objecting
                  Lender, no Interest Period with respect to such Advances shall
                  end after the second anniversary of such Objecting Lender's
                  Commitment Expiration Date; and

                           (e) any Interest Period which begins on the last
                  Business Day of a calendar month (or on a day for which there
                  is no numerically corresponding day in the calendar month at
                  the end of such Interest Period) shall, subject to clause (a)
                  above, end on the last Business Day of a calendar month.

                  "Joinder Agreement" means a Joinder Agreement, substantially
         in the form of Exhibit J hereto, duly executed and delivered by the
         Company and the Borrowing Subsidiary party thereto.

                  "Lenders" has the meaning assigned to such term in the
         preamble hereof.

                  "LIBO Rate CAF Advance" means any CAF Advance made pursuant to
         a LIBO Rate CAF Advance Request.

                  "LIBO Rate CAF Advance Request" means any CAF Advance Request
         requesting the CAF Advance Lenders to offer to make CAF Advances at an
         interest rate equal to the Applicable LIBO Rate plus (or minus) a
         margin.

                  "Lien" means any lien, security interest or other charge or
         encumbrance, or any assignment of the right to receive income, or any
         other type of preferential arrangement, in each case to secure any
         Indebtedness or any Guaranty of any Person.

                  "Majority Lenders" means Lenders the Commitment Percentages of
         which aggregate at least 51%, provided, that at any time after the
         Commitment Expiration Date with respect to any Objecting Lender (but
         prior to the termination of all the Commitments), "Majority Lenders"
         shall mean Lenders whose Exposure aggregates at least 51% of the
         aggregate Exposure of all the Lenders.

                  "Margin Stock" means "margin stock" as defined in Regulation U
         of the Board of Governors of the Federal Reserve System, as in effect
         from time to time.

                  "Material Adverse Effect" means a material adverse effect on
         the financial condition or operations of the Company and its
         consolidated Subsidiaries on a consolidated basis.

<PAGE>   17

                                                                              11

                  "Material Subsidiary" means any Subsidiary of the Company
         (other than a Project Financing Subsidiary) that itself (on an
         unconsolidated, stand-alone basis) owns in excess of 10% of the book
         value of the consolidated assets of the Company and its consolidated
         Subsidiaries.

                  "Mojave" means Mojave Pipeline Company.

                  "Moody's Bond Rating", with respect to any Borrower, means for
         any day the Bond Rating of such Borrower, if any, established by
         Moody's Investors Service, Inc. as in effect at 11:00 A.M., New York
         City time, on such day.

                  "Multiemployer Plan" means a "multiemployer plan" as defined
         in Section 4001(a)(3) of ERISA to which the Company or any ERISA
         Affiliate is making or accruing an obligation to make contributions, or
         has within any of the preceding five plan years made or accrued an
         obligation to make contributions and in respect of which the Company or
         an ERISA Affiliate has any liability (contingent or otherwise), such
         plan being maintained pursuant to one or more collective bargaining
         agreements.

                  "Multiple Employer Plan" means a single employer plan, as
         defined in Section 4001(a)(15) of ERISA, which (a) is maintained for
         employees of the Company or an ERISA Affiliate and at least one Person
         other than the Company and its ERISA Affiliates or (b) was so
         maintained and in respect of which the Company or an ERISA Affiliate
         could have liability under Section 4064 or 4069 of ERISA in the event
         such plan has been or were to be terminated.

                  "Net Worth" means, as of any date of determination, the sum of
         the preferred stock and stockholders' equity of the Company as shown on
         the most recent consolidated balance sheet of the Company delivered
         pursuant to Section 5.3 plus the cumulative amount by which
         stockholders' equity of the Company shall have been reduced by reason
         of non-cash write-downs of long term assets from and after the
         Effective Date.

                  "Note" has the meaning assigned to such term in Section
         2.3(d).

                  "Notice of Borrowing" has the meaning specified in Section
         2.2(a).

                  "Obligations" means the collective reference to the unpaid
         principal of and interest on the Advances and the Notes and all other
         financial liabilities of the Borrowers to the Administrative Agent, the
         CAF Advance Agent and the Lenders (including interest accruing at the
         then applicable rate provided in this Agreement after the maturity of
         the Advances and interest accruing at the then applicable rate provided
         in this Agreement after the filing of any petition in bankruptcy, or
         the commencement of any insolvency, reorganization or like proceeding,
         relating to any Borrower whether or not a claim for post-filing or
         post-petition interest is allowed in such proceeding), whether direct
         or indirect, absolute or contingent, due or to become due, or now
         existing or hereafter incurred, which may arise under, out of, or in
         connection with, this Agreement or the Notes, in each case whether on
         account of principal, interest, reimbursement obligations, fees,
         indemnities, costs, expenses or otherwise (including all fees and
         disbursements of counsel to the Administrative Agent, the CAF Advance
         Agent or to the Lenders that are required to be paid by any Borrower
         pursuant to this Agreement).

<PAGE>   18

                                                                              12

                  "Objecting Lenders" has the meaning assigned to such term in
         Section 2.23(a).

                  "Other Taxes" has the meaning assigned to such term in Section
         2.20(b).

                  "Party" has the meaning assigned to such term in Section 9.8.

                  "PBGC" means the Pension Benefit Guaranty Corporation (or any
         successor).

                  "Permitted Claims" has the meaning assigned to such term in
         Section 9.9(a).

                  "Permitted Liens" means:

                  (i) inchoate Liens and charges imposed by law and incidental
         to construction, maintenance, development or operation of properties,
         or the operation of business, in the ordinary course of business if
         payment of the obligation secured thereby is not yet overdue or if the
         validity or amount of which is being contested in good faith by the
         Company or any of its Subsidiaries;

                  (ii) Liens for taxes, assessments, obligations under workers'
         compensation or other social security legislation or other governmental
         requirements, charges or levies, in each case not yet overdue;

                  (iii) Liens reserved in any oil, gas or other mineral lease
         entered into in the ordinary course of business for rent, royalty or
         delay rental under such lease and for compliance with the terms of such
         lease;

                  (iv) easements, servitudes, rights-of-way and other rights,
         exceptions, reservations, conditions, limitations, covenants and other
         restrictions that do not materially interfere with the operation, value
         or use of the properties affected thereby;

                  (v) conventional provisions contained in any contracts or
         agreements affecting properties under which the Company or any of its
         Subsidiaries is required immediately before the expiration, termination
         or abandonment of a particular property to reassign to such Person's
         predecessor in title all or a portion of such Person's rights, titles
         and interests in and to all or portion of the such property;

                  (vi) any Lien reserved in a grant or conveyance in the nature
         of a farm-out or conditional assignment to the Company or any of its
         Subsidiaries entered into in the ordinary course of business on
         reasonable terms to secure undertakings of the Company or any such
         Subsidiary in such grant or conveyance;

                  (vii) any Lien consisting of (A) statutory landlord's liens
         under leases to which the Company or any of its Subsidiaries is a party
         or other Liens on leased property reserved in leases thereof for rent
         or for compliance with the terms of such leases, (B) rights reserved to
         or vested in any municipality or governmental, statutory or public
         authority to control or regulate any property of the Company or any of
         its Subsidiaries, or to use such property in any manner which does not
         materially impair the use of such property for the purposes for which
         it is held by the Company or any such Subsidiary, (C) obligations or
         duties to any municipality or public authority with respect to any
         franchise, grant, license,

<PAGE>   19

                                                                              13

         lease or permit and the rights reserved or vested in any governmental
         authority or public utility to terminate any such franchise, grant,
         license, lease or permit or to condemn or expropriate any property, and
         (D) zoning laws and ordinances and municipal regulations;

                  (viii) any Lien on any assets (including Equity Interests and
         other obligations) securing Indebtedness or other obligations incurred
         or assumed for the purpose of financing all or any part of the cost of
         acquiring, improving, installing, designing, engineering, developing
         (including drilling), or constructing such assets, provided that such
         Lien attaches to such assets concurrently with or within 365 days after
         the acquisition or completion of development, construction or
         installation thereof or improvement thereto; and

                  (ix) the creation of interests in property of the character
         commonly referred to as a "royalty interest" or "overriding royalty
         interest", production payments, farmouts, leases, subleases, rights of
         way and other easements, participations, joint venture, joint
         operating, unitization, pooling and communitization agreements, or
         other similar transactions in the ordinary course of business.

                  "Person" means an individual, a Business Entity, or a country
         or any political subdivision thereof or any agency or instrumentality
         of such country or subdivision.

                  "Plan" means a Single Employer Plan or a Multiple Employer
         Plan.

                  "Prime Rate" means the rate of interest per annum publicly
         announced from time to time by Chase as its prime rate in effect at its
         principal office in New York City. The Prime Rate is not intended to be
         the lowest rate of interest charged by Chase in connection with
         extensions of credit to debtors.

                  "Principal Subsidiary" means, at any time, any Subsidiary of
         the Company (other than a Project Financing Subsidiary) either (a)
         having assets that are, or owning Subsidiaries with assets that
         together with its assets are, at such time greater than or equal to 5%
         of the consolidated assets of the Company and its consolidated
         Subsidiaries at such time or (b) constituting a Borrowing Subsidiary.

                  "Process Agent" has the meaning specified in Section 9.9(a).

                  "Project Financing" means any Indebtedness incurred to finance
         or refinance the acquisition, improvement, installation, design,
         engineering, construction, development, completion, maintenance or
         operation of, or otherwise in respect of, all or any portion of any
         project, or any asset related thereto, and any Guaranty with respect
         thereto, other than any portion of such Indebtedness or Guaranty
         permitting or providing for recourse against the Company or any of its
         Subsidiaries other than (a) recourse to the Equity Interests in,
         Indebtedness or other obligations of, or assets of, one or more Project
         Financing Subsidiaries, and (b) such recourse as exists under any
         Contingent Guaranty.

                  "Project Financing Subsidiary" means any Subsidiary of the
         Company whose principal purpose is to incur Project Financing, or to
         become a direct or indirect partner, member or other equity participant
         or owner in a Business Entity so created, and substantially all the
         assets of which Subsidiary or Business Entity are limited to those
         assets being financed (or to be financed), or the operation of which is
         being financed (or to be financed), in whole or in part by a Project
         Financing or to Equity Interests in, or

<PAGE>   20

                                                                              14

         Indebtedness or other obligations of, one or more other such
         Subsidiaries or Business Entities or to Indebtedness or other
         obligations of the Company or its Subsidiaries or other Persons.

                  "Rating Agency" means any of Moody's Investors Service, Inc.
         and Standard & Poor's Ratings Group; collectively the "Rating
         Agencies".

                  "Receivables Purchase and Sale Agreement" means the collective
         reference to (a) the Receivables Purchase and Sale Agreement dated as
         of January 14, 1992 among EPNGC, CIESCO L.P., a New York limited
         partnership, Corporate Asset Funding Company, a Delaware corporation
         and Citicorp North America, Inc., as agent, as amended as of the date
         hereof, and (b) the Amended and Restated Receivables Sale Agreement
         dated as of December 31, 1996 among El Paso Energy Credit Corporation,
         Asset Securitization Cooperative Corporation and Canadian Imperial Bank
         of Commerce, as administrative agent, as such Agreement may be amended,
         supplemented, restated or otherwise modified from time to time,
         provided that no such amendment, supplement, restatement or
         modification shall change the scope of such Agreement from that of a
         receivables securitization transaction.

                  "Reference Lenders" means Chase, Bank of America, N.A.,
         Citibank, N.A. and ABN Amro Bank, N.V.

                  "Register" has the meaning specified in Section 9.7(c).

                  "Required Lenders" means Lenders (a) that are not Objecting
         Lenders with respect to any previous Extension Request and (b) that
         have Commitment Percentages aggregating at least 66-2/3% of the
         aggregate Commitment Percentages of such non-Objecting Lenders.

                  "Revolving Credit Advances" has the meaning assigned to such
         term in Section 2.1.

                  "S&P Bond Rating", with respect to any Borrower, means for any
         day the Bond Rating of such Borrower, if any, established by Standard &
         Poor's Ratings Group as in effect at 11:00 A.M., New York City time, on
         such day.

                  "Single Employer Plan" means a single employer plan, as
         defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
         employees of the Company or an ERISA Affiliate and no Person other than
         the Company and its ERISA Affiliates or (b) was so maintained and in
         respect of which the Company or an ERISA Affiliate could have liability
         under Section 4069 of ERISA in the event such plan has been or were to
         be terminated.

                  "Sonat Agreement" means the Credit Agreement dated as of April
         15, 1999 among Sonat Inc., the banks party thereto, Chase, as
         Administrative Agent thereunder, Bank of America National Trust and
         Savings Association, as Syndication Agent thereunder and Suntrust Bank,
         Atlanta, as Documentation Agent thereunder, as amended, supplemented or
         otherwise modified from time to time.

<PAGE>   21

                                                                              15

                  "Stated Termination Date" means June 10, 2002 or such later
         date as shall be determined pursuant to the provisions of Section 2.23
         with respect to non-Objecting Lenders.

                  "Subsidiary" means, as to any Person, any Business Entity of
         which shares of stock or other Equity Interests having ordinary voting
         power (other than stock or such other Equity Interests having such
         power only by reason of the happening of a contingency) to elect a
         majority of the board of directors or other managers of such Business
         Entity are at the time owned, directly or indirectly through one or
         more Subsidiaries, or both, by such Person. Unless otherwise qualified,
         all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
         shall refer to a Subsidiary or Subsidiaries of the Company.

                  "Taxes" has the meaning assigned to such term in Section
         2.20(a).

                  "Tennessee" has the meaning assigned to such term in the
         preamble hereof, and its successors.

                  "Termination Date" means the earlier of (a) the Stated
         Termination Date and (b) the date of termination in whole of the
         Commitments pursuant to Section 2.9 or 7.1.

                  "Termination Event" means (a) a "reportable event," as such
         term is described in Section 4043 of ERISA (other than a "reportable
         event" not subject to the provision for 30-day notice to the PBGC under
         subsection .11, .12, .13, .14, .16, .18, .19 or .20 of PBGC Reg.
         Section 2615), or an event described in Section 4062(e) of ERISA, or
         (b) the withdrawal of the Company or any ERISA Affiliate from a
         Multiple Employer Plan during a plan year in which it was a
         "substantial employer," as such term is defined in Section 4001(a)(2)
         of ERISA or the incurrence of liability by the Company or any ERISA
         Affiliate under Section 4064 of ERISA upon the termination of a
         Multiple Employer Plan, or (c) the filing of a notice of intent to
         terminate a Plan or the treatment of a Plan amendment as a termination
         under Section 4041 of ERISA, or (d) the institution of proceedings to
         terminate a Plan by the PBGC under Section 4042 of ERISA, or (e) the
         conditions set forth in Section 302(f)(1)(A) and (B) of ERISA to the
         creation of a lien upon property or rights to property of the Company
         or any ERISA Affiliate for failure to make a required payment to a Plan
         are satisfied, or (f) the adoption of an amendment to a Plan requiring
         the provision of security to such Plan, pursuant to Section 307 of
         ERISA, or (g) the occurrence of any other event or the existence of any
         other condition which would reasonably be expected to result in the
         termination of, or the appointment of a trustee to administer, any Plan
         under Section 4042 of ERISA.

                  "Type" means (a) as to any Revolving Credit Advance, its
         nature as a Base Rate Advance or a Eurodollar Rate Advance and (b) as
         to any CAF Advance, its nature as a Fixed Rate CAF Advance or a LIBO
         Rate CAF Advance.

                  "Withdrawal Liability" has the meaning given such term under
         Part 1 of Subtitle E of Title IV of ERISA.

         SECTION 1.2. Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date,

<PAGE>   22

                                                                              16

the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding."

         SECTION 1.3. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP either (a) consistent
with those principles applied in the preparation of the financial statements
referred to in Section 4.1(e) or (b) not so materially inconsistent with such
principles that a covenant contained in Section 5.1 or 5.2 would be calculated
or construed in a materially different manner or with materially different
results than if such covenant were calculated or construed in accordance with
clause (a) of this Section 1.3. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import. References to any agreement or
contract are to such agreement or contract as amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof.

         SECTION 1.4. References. The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Article, Section, Schedule and Exhibit references are to this Agreement unless
otherwise specified.

                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES

         SECTION 2.1. The Revolving Credit Advances. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make revolving
credit advances ("Revolving Credit Advances") to the Borrowers or any one or
more of them from time to time on any Business Day during the period from the
date hereof to and including the Termination Date in an aggregate amount not to
exceed at any time outstanding the amount of such Lender's Commitment; provided
that the aggregate amount of the Advances (other than Advances of Objecting
Lenders) outstanding shall not at any time exceed the aggregate amount of the
Commitments. Each Borrowing shall be in an aggregate amount of $5,000,000 in the
case of a Borrowing comprised of Base Rate Advances and $20,000,000 in the case
of a Borrowing comprised of Eurodollar Rate Advances, or, in each case, an
integral multiple of $1,000,000 in excess thereof (or, in the case of a
Borrowing of Base Rate Advances, the aggregate unused Commitments, if less) and
shall consist of Revolving Credit Advances of the same Type made on the same day
by the Lenders ratably according to their respective Commitments. Within the
limits of each Lender's Commitment, any Borrower may make more than one
Borrowing on any Business Day and may borrow, repay pursuant to Section 2.10 or
prepay pursuant to Section 2.15, and reborrow under this Section 2.1.

         SECTION 2.2. Making the Revolving Credit Advances. (a) Each Borrowing
of Revolving Credit Advances shall be made on notice by the Company on its own
behalf or the Company on behalf of another Borrower, to the Administrative Agent
(a "Notice of Borrowing") received by the Administrative Agent, (i) in the case
of a proposed Borrowing comprised of Base Rate Advances, not later than 10:00
A.M. (New York City time) on the Business Day of such proposed Borrowing and
(ii) in the case of a proposed Borrowing comprised of Eurodollar Rate Advances,
not later than 12:00 noon (New York City time) on the third Business Day prior
to the date of such proposed Borrowing. Each Notice of Borrowing shall be by
telecopy or telephone (and if by telephone, confirmed promptly by telecopier),
in substantially the form of Exhibit B,

<PAGE>   23

                                                                              17

specifying therein the requested (A) Borrower, (B) date of such Borrowing, (C)
Type of Revolving Credit Advances comprising such Borrowing, (D) aggregate
amount of such Borrowing, and (E) in the case of a Borrowing comprised of
Eurodollar Rate Advances, the initial Interest Period for each such Advance.
Each Lender shall, before 1:00 P.M. (New York City time) on the date of such
Borrowing, make available to the Administrative Agent at its address at 270 Park
Avenue, New York, New York, 10017, Reference: El Paso Corporation, or at such
other address designated by notice from the Administrative Agent to the Lenders
pursuant to Section 9.2, in same day funds, such Lender's ratable portion of
such Borrowing. Immediately after the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available to the applicable
Borrower at Chase, 270 Park Avenue, New York, New York, 10017, Account No.
323291503, Reference: El Paso Corporation, or at such other account of the
applicable Borrower maintained by the Administrative Agent (or any successor
Administrative Agent) designated by the applicable Borrower and agreed to by the
Administrative Agent (or such successor Administrative Agent), in same day
funds.

         (a) Each Notice of Borrowing shall be irrevocable and binding on the
applicable Borrower. In the case of any Borrowing which the related Notice of
Borrowing specified is to be comprised of Eurodollar Rate Advances, if such
Advances are not made as a result of any failure to fulfill on or before the
date specified for such Borrowing the applicable conditions set forth in Article
III, the applicable Borrower shall indemnify each Lender against any loss, cost
or expense incurred by such Lender as a result of such failure, including, any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing.

         (b) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.2 and the Administrative Agent
may, in reliance upon such assumption, make available to the applicable Borrower
on such date a corresponding amount. If and to the extent such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender and the applicable Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the applicable Borrower until the date such amount is repaid to the
Administrative Agent, at the Effective Federal Funds Rate for such day. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Advance to the applicable
Borrower as part of such Borrowing for purposes of this Agreement.

         (c) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.

         SECTION 2.3. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of each Borrower to such Lender resulting from each Revolving
Credit Advance of such Lender to such Borrower from

<PAGE>   24

                                                                              18

time to time, including the amounts of principal and interest payable and paid
to such Lender from time to time in respect of such Revolving Credit Advance.

         (b) The Administrative Agent shall maintain the Register pursuant to
Section 9.7(c), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Advance made hereunder, the
Type thereof and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower on account of such Revolving Credit Advance to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from each Borrower and each Lender's share thereof.

         (c) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.3(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of each Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of each Borrower to repay (with applicable interest) the Revolving
Credit Advances made to each such Borrower by such Lender in accordance with the
terms of this Agreement.

         (d) Each Borrower agrees that, upon the request to the Administrative
Agent by any Lender, such Borrower will execute and deliver to such Lender a
promissory note of such Borrower evidencing the Revolving Credit Advances of
such Lender to such Borrower, substantially in the form of Exhibit A with
appropriate insertions as to date and principal amount (a "Note").

         SECTION 2.4. CAF Advances. Subject to the terms and conditions of this
Agreement, the Borrowers or any one or more of them may borrow CAF Advances from
time to time during the CAF Advance Availability Period on any Business Day. The
Company shall, in consultation with the CAF Advance Agent, designate Lenders
from time to time as CAF Advance Lenders by written notice to the CAF Advance
Agent. The CAF Advance Agent shall transmit each such notice of designation
promptly to each designated CAF Advance Lender. CAF Advances shall be borrowed
in amounts such that the aggregate amount of Advances outstanding at any time
shall not exceed the aggregate amount of the Commitments at such time. Any CAF
Advance Lender may make CAF Advances in amounts which, individually and together
with the aggregate amount of other Advances of such CAF Advance Lender, exceed
such CAF Advance Lender's Commitment, and such CAF Advance Lender's CAF Advances
shall not be deemed to utilize such CAF Advance Lender's Commitment. Within the
limits and on the conditions hereinafter set forth with respect to CAF Advances,
the Borrowers from time to time may borrow, repay and reborrow CAF Advances.

         SECTION 2.5. Procedure for CAF Advance Borrowings. (a) A Borrower, or
the Company on behalf of a Borrower, shall request CAF Advances by delivering a
CAF Advance Request to the CAF Advance Agent, not later than 12:00 Noon (New
York City time) four Business Days prior to the date of the proposed Borrowing
(in the case of a LIBO Rate CAF Advance Request), and not later than 10:00 A.M.
(New York City time) one Business Day prior to the date of the proposed
Borrowing (in the case of a Fixed Rate CAF Advance Request). Each CAF Advance
Request may solicit bids for CAF Advances in an aggregate principal amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and having
not more than five alternative maturity dates. The maturity date for each CAF
Advance shall be not less than 7 days nor more than 360 days after the date of
the Borrowing therefor (and in any event shall be

<PAGE>   25

                                                                              19

not later than the Stated Termination Date); provided that each LIBO Rate CAF
Advance shall mature one, two, three or six months or, if available, nine or
twelve months after the date of the Borrowing therefor. The CAF Advance Agent
shall notify each CAF Advance Lender promptly by telecopy of the contents of
each CAF Advance Request received by the CAF Advance Agent.

         (b) In the case of a LIBO Rate CAF Advance Request, upon receipt of
notice from the CAF Advance Agent of the contents of such CAF Advance Request,
each CAF Advance Lender may elect, in its sole discretion, to offer irrevocably
to make one or more CAF Advances at the Applicable LIBO Rate plus (or minus) a
margin determined by such CAF Advance Lender in its sole discretion for each
such CAF Advance. Any such irrevocable offer shall be made by delivering a CAF
Advance Offer to the CAF Advance Agent, before 10:30 A.M. (New York City time)
on the day that is three Business Days before the date of the proposed
Borrowing, setting forth:

                  (i) the maximum amount of CAF Advances for each maturity date
         and the aggregate maximum amount of CAF Advances for all maturity dates
         which such CAF Advance Lender would be willing to make (which amounts
         may, subject to Section 2.4, exceed such CAF Advance Lender's
         Commitment); and

                  (ii) the margin above or below the Applicable LIBO Rate at
         which such CAF Advance Lender is willing to make each such CAF Advance.

The CAF Advance Agent shall advise the Company and the applicable Borrower
before 11:00 A.M. (New York City time) on the date which is three Business Days
before the proposed date of the Borrowing of the contents of each such CAF
Advance Offer received by it. If the CAF Advance Agent, in its capacity as a CAF
Advance Lender, shall elect, in its sole discretion, to make any such CAF
Advance Offer, it shall advise the Company and the applicable Borrower of the
contents of its CAF Advance Offer before 10:15 A.M. (New York City time) on the
date which is three Business Days before the proposed date of the Borrowing.

         (c) In the case of a Fixed Rate CAF Advance Request, upon receipt of
notice from the CAF Advance Agent of the contents of such CAF Advance Request,
each CAF Advance Lender may elect, in its sole discretion, to offer irrevocably
to make one or more CAF Advances at a rate of interest determined by such CAF
Advance Lender in its sole discretion for each such CAF Advance. Any such
irrevocable offer shall be made by delivering a CAF Advance Offer to the CAF
Advance Agent before 9:30 A.M. (New York City time) on the proposed date of the
Borrowing, setting forth:

                  (i) the maximum amount of CAF Advances for each maturity date,
         and the aggregate maximum amount for all maturity dates, which such CAF
         Advance Lender would be willing to make (which amounts may, subject to
         Section 2.4, exceed such CAF Advance Lender's Commitment); and

                  (ii) the rate of interest at which such CAF Advance Lender is
         willing to make each such CAF Advance.

The CAF Advance Agent shall advise the Company and the applicable Borrower
before 10:00 A.M. (New York City time) on the proposed date of the Borrowing of
the contents of each such CAF Advance Offer received by it. If the CAF Advance
Agent, in its capacity as a CAF Advance Lender, shall elect, in its sole
discretion, to make any such CAF Advance Offer, it shall

<PAGE>   26

                                                                              20

advise the Company and the applicable Borrower of the contents of its CAF
Advance Offer before 9:15 A.M. (New York City time) on the proposed date of the
Borrowing.

         (d) Before 11:30 A.M. (New York City time) three Business Days before
the proposed date of the Borrowing (in the case of CAF Advances requested by a
LIBO Rate CAF Advance Request) and before 10:30 A.M. (New York City time) on the
proposed date of the Borrowing (in the case of CAF Advances requested by a Fixed
Rate CAF Advance Request), the Company, in its absolute discretion, shall:

                  (i) cancel such CAF Advance Request by giving the CAF Advance
         Agent telephone notice to that effect, or

                  (ii) by giving telephone notice to the CAF Advance Agent
         (immediately confirmed by delivery to the CAF Advance Agent of a CAF
         Advance Confirmation in writing or by telecopy) (A) subject to the
         provisions of Section 2.5(e), accept one or more of the offers made by
         any CAF Advance Lender or CAF Advance Lenders pursuant to Section
         2.5(b) or Section 2.5(c), as the case may be, of the amount of CAF
         Advances for each relevant maturity date and (B) reject any remaining
         offers made by CAF Advance Lenders pursuant to Section 2.5(b) or
         Section 2.5(c), as the case may be.

         (e) The Company's acceptance of CAF Advances in response to any CAF
Advance Request shall be subject to the following limitations:

                  (i) the amount of CAF Advances accepted for each maturity date
         specified by any CAF Advance Lender in its CAF Advance Offer shall not
         exceed the maximum amount for such maturity date specified in such CAF
         Advance Offer;

                  (ii) the aggregate amount of CAF Advances accepted for all
         maturity dates specified by any CAF Advance Lender in its CAF Advance
         Offer shall not exceed the aggregate maximum amount specified in such
         CAF Advance Offer for all such maturity dates;

                  (iii) the Company may not accept offers for CAF Advances for
         any maturity date in an aggregate principal amount in excess of the
         maximum principal amount requested in the related CAF Advance Request;
         and

                  (iv) if the Company accepts any of such offers, it must accept
         offers based solely upon pricing for such relevant maturity date and
         upon no other criteria whatsoever and if two or more CAF Advance
         Lenders submit offers for any maturity date at identical pricing and
         the Company accepts any of such offers but does not wish to (or by
         reason of the limitations set forth in Section 2.4 or in Section
         2.5(e)(iii), cannot) borrow the total amount offered by such CAF
         Advance Lenders with such identical pricing, the Company shall accept
         offers from all of such CAF Advance Lenders in amounts allocated among
         them pro rata according to the amounts offered by such CAF Advance
         Lenders (or as nearly pro rata as shall be practicable after giving
         effect to the requirement that CAF Advances made by a CAF Advance
         Lender on a date of the Borrowing for each relevant maturity date shall
         be in a principal amount of $5,000,000 or an integral multiple of
         $1,000,000 in excess thereof; provided that if the number of CAF
         Advance Lenders that submit offers for any maturity date at identical
         pricing is such that,

<PAGE>   27

                                                                              21

         after the Company accepts such offers pro rata in accordance with the
         foregoing, the CAF Advance to be made by such CAF Advance Lenders would
         be less than $5,000,000 principal amount, the number of such CAF
         Advance Lenders shall be reduced by the CAF Advance Agent by lot until
         the CAF Advances to be made by such remaining CAF Advance Lenders would
         be in a principal amount of $5,000,000 or an integral multiple of
         $1,000,000 in excess thereof).

         (f) If the Company notifies the CAF Advance Agent that a CAF Advance
Request is cancelled pursuant to Section 2.5(d)(i), the CAF Advance Agent shall
give prompt telephone notice thereof to the CAF Advance Lenders.

         (g) If the Company accepts pursuant to Section 2.5(d)(ii) one or more
of the offers made by any CAF Advance Lender or CAF Advance Lenders, the CAF
Advance Agent promptly shall notify each CAF Advance Lender which has made such
a CAF Advance Offer of (i) the aggregate amount of such CAF Advances to be made
on such Borrowing Date for each maturity date and (ii) the acceptance or
rejection of any offers to make such CAF Advances made by such CAF Advance
Lender. Before 1:00 P.M. (New York City time) on the date of the Borrowing
specified in the applicable CAF Advance Request, each CAF Advance Lender whose
CAF Advance Offer has been accepted shall make available to the Administrative
Agent at its office set forth in Section 9.2 the amount of CAF Advances to be
made by such CAF Advance Lender, in same day funds. The Administrative Agent
will make such funds available to the applicable Borrower as soon as practicable
on such date at the Administrative Agent's aforesaid address. As soon as
practicable after each Borrowing Date, the CAF Advance Agent shall notify each
Lender of the aggregate amount of CAF Advances advanced on such Borrowing Date
and the respective maturity dates thereof.

         (h) The failure of any CAF Advance Lender to make the CAF Advance to be
made by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its CAF Advance on the date of such
Borrowing, but no CAF Lender shall be responsible for the failure of any other
CAF Advance Lender to make the CAF Advance to be made by such CAF Advance Lender
on the date of any Borrowing.

         (i) A CAF Advance Request may request offers for CAF Advances to be
made on not more than one Borrowing Date and to mature on not more than five CAF
Advance Maturity Dates. No CAF Advance Request may be submitted earlier than
five Business Days after submission of any other CAF Advance Request.

         SECTION 2.6. CAF Advance Payments. (a) The applicable Borrower shall
repay to the Administrative Agent, for the account of each CAF Advance Lender
which has made a CAF Advance to it, on the applicable CAF Advance Maturity Date
the then unpaid principal amount of such CAF Advance. The Borrowers shall not
have the right to prepay any principal amount of any CAF Advance.

         (b) The applicable Borrower shall pay interest on the unpaid principal
amount of each CAF Advance to it from the date of the Borrowing to the
applicable CAF Advance Maturity Date at the rate of interest specified in the
CAF Advance Offer accepted by the applicable Borrower in connection with such
CAF Advance (calculated on the basis of a 360-day year for actual days elapsed),
payable on each applicable CAF Advance Interest Payment Date.

<PAGE>   28

                                                                              22

         (c) If all or a portion of the principal amount of any CAF Advance
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue principal amount shall, without limiting any rights of
any Lender under this Agreement, bear interest from the date on which such
payment was due at a rate per annum which is 1% above the rate which would
otherwise be applicable pursuant to such CAF Advance until the stated maturity
date of such CAF Advance, and for each day thereafter at a rate per annum which
is 2% above the Base Rate, in each case until paid in full (as well after as
before judgment). Interest accruing pursuant to this paragraph (c) shall be
payable from time to time on demand.

         SECTION 2.7. Evidence of Debt. Each Lender shall maintain in accordance
with its usual practice appropriate records evidencing indebtedness of each
Borrower to such Lender resulting from each CAF Advance of such Lender to such
Borrower from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time in respect of such CAF
Advance. The Administrative Agent shall maintain the Register pursuant to
Section 9.7(c) and a record therein for each Lender, in which shall be recorded
(i) the amount of each CAF Advance made by such Lender to each Borrower, the CAF
Advance Maturity Date thereof, the interest rate applicable thereto and each CAF
Advance Interest Payment Date applicable thereto, and (ii) the amount of any sum
received by the Administrative Agent hereunder from a Borrower on account of
such CAF Advance. The entries made in the Register and the records of each
Lender maintained pursuant to this Section 2.7 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of each Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such record, or any error therein, shall not in any manner affect the
obligation of each Borrower to repay (with applicable interest) the CAF Advances
made by such Lender in accordance with the terms of this Agreement.

         SECTION 2.8. Fees. (a) The Company agrees to pay to the Administrative
Agent for the account of each Lender a facility fee for the period from and
including the Facility Fee Commencement Date until all Advances have been paid
in full and all Commitments have been terminated, computed at a variable rate
per annum on the average daily amount of the greater of (i) the Commitment of
such Lender and (ii) the outstanding principal amount of Revolving Credit
Advances of such Lender during the period for which payment is made, which rate
will vary according to the S&P Bond Rating for the Company and the Moody's Bond
Rating for the Company as follows:

<TABLE>
<CAPTION>
               Bond Rating                              Facility
              (S&P/Moody's)           Level             Fee Rate
              -------------           -----             --------
<S>                                   <C>               <C>
            A/A2 or higher               I              .070%
            A-/A3                       II              .080%
            BBB+/Baa1                  III              .090%
            BBB/Baa2                    IV              .100%
            BBB-/Baa3                    V              .150%
            BB+/Ba1 or lower            VI              .200%;

</TABLE>

provided that (i) if the Bond Ratings of the Company do not fall within the same
Level, the rate applicable to such day will be the percentage opposite the Bond
Rating that is at the higher Level (Level I being the highest and Level VI being
the lowest), (ii) in the event a Bond Rating for the

<PAGE>   29

                                                                              23

Company is not available from one of the Rating Agencies, the rate shall be
based on the Bond Rating of the other Rating Agency, and (iii) in the event a
Bond Rating for the Company is available from none of the Rating Agencies, the
rate will be the percentage opposite Level VI. Such facility fees shall be
payable quarterly in arrears on the last day of each March, June, September and
December and on the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein, and, if the Lender is an
Objecting Lender, on the Commitment Expiration Date applicable to such Lender
and on the second anniversary of the Termination Date (or if the Lender is an
Objecting Lender, the second anniversary of the Commitment Expiration Date
applicable to such Lender) or such earlier date on which the Advances are repaid
in full, commencing on the first of such dates to occur after the date hereof.

         (b) The Company agrees to pay to JP Morgan Securities, Inc., the
Administrative Agent and the CAF Advance Agent the fees set forth in the letter,
dated as of May 7, 2001 from JP Morgan Securities, Inc. and Chase to the
Company.

         SECTION 2.9. Reduction of the Commitments. The Company shall have the
right, upon at least three Business Days' notice to the Administrative Agent, to
terminate in whole or reduce ratably in part the unused portions of the
respective Commitments of the Lenders, provided that each partial reduction
shall be in the aggregate amount of $10,000,000 or any whole multiple of
$1,000,000 in excess thereof.

         SECTION 2.10. Repayment of Advances. The Borrowers shall repay to each
Lender on the second anniversary of the Termination Date the aggregate principal
amount of the Advances then owing to such Lender; provided that the Revolving
Credit Advances made by Objecting Lenders shall be repaid as provided in Section
2.23.

         SECTION 2.11. Interest on Revolving Credit Advances. (a) Ordinary
Interest. Each Borrower shall pay interest on the unpaid principal amount of
each Revolving Credit Advance of such Borrower owing to each Lender from the
date of such Advance until such principal amount is due (whether at stated
maturity, by acceleration or otherwise), at the following rates:

                  (i) Base Rate Advances. During such periods as such Advance is
         a Base Rate Advance, a rate per annum equal at all times to the Base
         Rate in effect from time to time, payable quarterly in arrears on the
         last day of each March, June, September and December during such
         periods and on the date such Base Rate Advance shall be Converted or
         due (whether at stated maturity, by acceleration or otherwise).

                  (ii) Eurodollar Rate Advances. During such periods as such
         Advance is a Eurodollar Rate Advance, at a rate per annum equal at all
         times during each Interest Period for such Advance to the sum of the
         Eurodollar Rate for such Interest Period plus the Applicable Eurodollar
         Rate Margin in effect from time to time, payable on the last day of
         each such Interest Period and, if any such Interest Period has a
         duration of more than three months, on each day which occurs during
         such Interest Period every three months from the first day of such
         Interest Period, and on the date such Advance shall be Converted or due
         (whether at stated maturity, by acceleration or otherwise).

         (b) Default Interest. The applicable Borrower shall pay interest on the
unpaid principal amount of each Revolving Credit Advance to it that is not paid
when due (whether at stated maturity, by acceleration or otherwise) from the
date on which such amount is due until

<PAGE>   30

                                                                              24

such amount is paid in full, payable on demand, at a rate per annum equal at all
times (i) from such due date to the last day of the then existing Interest
Period in the case of each Eurodollar Rate Advance, to 1% per annum above the
interest rate per annum required to be paid on such Advance immediately prior to
the date on which such amount became due, and (ii) from and after the last day
of the then existing Interest Period, and at all times in the case of any Base
Rate Advance, to 1% per annum above the Base Rate in effect from time to time.

         SECTION 2.12. Additional Interest on Eurodollar Rate Advances. If any
Lender shall determine in good faith that reserves under regulations of the
Board of Governors of the Federal Reserve System are required to be maintained
by it in respect of, or a portion of its costs of maintaining reserves under
such regulations is properly attributable to, one or more of its Eurodollar Rate
Advances, the applicable Borrower shall pay to such Lender additional interest
on the unpaid principal amount of each such Eurodollar Rate Advance to it (other
than any such additional interest accruing to a particular Lender in respect of
periods prior to the 30th day preceding the date notice of such interest is
given by such Lender as provided in this Section 2.12), payable on the same day
or days on which interest is payable on such Advance, at an interest rate per
annum equal at all times during each Interest Period for such Advance to the
excess of (i) the rate obtained by dividing the Eurodollar Rate for such
Interest Period by a percentage equal to 100% minus the Eurodollar Reserve
Percentage, if any, for such Lender for such Interest Period over (ii) the
Eurodollar Rate for such Interest Period. The amount of such additional interest
(if any) shall be determined by each Lender, and such Lender shall furnish
written notice of the amount of such additional interest to the Company and the
Administrative Agent, which notice shall be conclusive and binding for all
purposes, absent manifest error.

         SECTION 2.13. Interest Rate Determination. (a) Each Reference Lender
agrees to furnish to the Administrative Agent timely information for the purpose
of determining the Eurodollar Rate. If any one or more of the Reference Lenders
shall not furnish such timely information to the Administrative Agent for the
purpose of determining any such interest rate, the Administrative Agent shall
determine such interest rate on the basis of timely information furnished by the
remaining Reference Lenders.

         (b) The Administrative Agent shall give prompt notice to the Company
and the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of Section 2.11(a)(i) or (ii), and the applicable rate, if
any, furnished by each Reference Lender for the purpose of determining the
applicable interest rate under Section 2.11(a)(ii).

         (c) If fewer than two Reference Lenders furnish timely information to
the Administrative Agent for determining the Eurodollar Rate for any Eurodollar
Rate Advances,

                  (i) the Administrative Agent shall give the Company and each
         Lender prompt notice thereof by telephone (confirmed in writing) that
         the interest rate cannot be determined for such Eurodollar Rate
         Advances,

                  (ii) each such Advance will automatically, on the last day of
         the then existing Interest Period therefor, Convert into a Base Rate
         Advance (or if such Advance is then a Base Rate Advance, will continue
         as a Base Rate Advance), and

                  (iii) the obligations of the Lenders to make, or to Convert
         Advances into, Eurodollar Rate Advances shall be suspended until the
         Administrative Agent shall

<PAGE>   31

                                                                              25

         notify the Company and the Lenders that the circumstances causing such
         suspension no longer exist.

         (d) If, with respect to any Eurodollar Rate Advances, the Majority
Lenders determine and give notice to the Administrative Agent that, as a result
of conditions in or generally affecting the London interbank eurodollar market,
the rates of interest determined on the basis of the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Majority Lenders of making, funding or maintaining their respective Eurodollar
Rate Advances for such Interest Period, the Administrative Agent shall forthwith
so notify the Company and the Lenders, whereupon,

                  (i) each such Advance will automatically, on the last day of
         the then existing Interest Period therefor, Convert into a Base Rate
         Advance, and

                  (ii) the obligation of the Lenders to make, or to Convert
         Advances into, Eurodollar Rate Advances shall be suspended until the
         Administrative Agent shall notify the Company and the Lenders that the
         circumstances causing such suspension no longer exist.

         (e) If the applicable Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.1, the
Administrative Agent will forthwith so notify the applicable Borrower and the
Lenders and such Advances will automatically, on the last day of the then
existing Interest Period therefor, Convert into Base Rate Advances.

         (f) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $10,000,000, such Eurodollar Rate
Advances shall automatically Convert into Base Rate Advances, and on and after
such date the right of the applicable Borrower to Convert such Advances into
Eurodollar Rate Advances shall terminate; provided, however, that if and so long
as each such Eurodollar Rate Advance shall have the same Interest Period as
Eurodollar Rate Advances comprising another Borrowing or other Borrowings, and
the aggregate unpaid principal amount of all such Eurodollar Rate Advances shall
equal or exceed $20,000,000, the applicable Borrower shall have the right to
continue all such Advances as, or to Convert all such Advances into Eurodollar
Rate Advances having the same Interest Period.

         (g) If any Reference Lender shall for any reason no longer have a
Commitment or any Revolving Credit Advances, such Reference Lender shall
thereupon cease to be a Reference Lender, and if, as a result, there shall only
be one Reference Lender remaining, the Administrative Agent (after consultation
with the Company and the Lenders) shall, by notice to the Company and the
Lenders, designate another Lender as a Reference Lender so that there shall at
all times be at least two Reference Lenders.

         SECTION 2.14. Voluntary Conversion of Advances. Any Borrower may on any
Business Day, upon notice given to the Administrative Agent, not later than
10:00 A.M. (New York City time) on the Business Day of the proposed Conversion
of Eurodollar Rate Advances to Base Rate Advances and not later than 12:00 noon
(New York City time) on the third Business Day prior to the date of the proposed
Conversion in the case of a Conversion of Base Rate Advances to Eurodollar Rate
Advances, and subject to the provisions of Sections 2.13, 2.16 and 2.18, Convert
all Advances of one Type comprising the same Borrowing into Advances of

<PAGE>   32

                                                                              26

another Type; provided, however, that any Conversion of any Eurodollar Rate
Advances into Base Rate Advances made on any day other than the last day of an
Interest Period for such Eurodollar Rate Advances shall be subject to the
provisions of Section 9.4(b); and provided, further, that no Revolving Credit
Advance may be converted into a Eurodollar Rate Advance after the date that is
one month prior to (a) in the case of a Revolving Credit Advance made by an
Objecting Lender, the second anniversary of such Objecting Lender's Commitment
Expiration Date, and (b) in the case of all Revolving Credit Advances, the
second anniversary of the Termination Date and provided, still further, that no
Revolving Credit Advance may be converted into a Eurodollar Rate Advance if an
Event of Default has occurred and is continuing. Each such notice of a
Conversion shall, within the restrictions specified above, specify (a) the date
of such Conversion, (b) the Advances to be Converted, and (c) if such Conversion
is into Eurodollar Rate Advances, the duration of the Interest Period for each
such Advance.

         SECTION 2.15. Optional and Mandatory Prepayments. (a) Optional
Prepayments. Any Borrower may upon (i) in the case of Eurodollar Rate Advances,
at least two Business Days' notice and (ii) in the case of Base Rate Advances,
telephonic notice not later than 12:00 noon (New York City time) on the date of
prepayment, to the Administrative Agent which specifies the proposed date and
aggregate principal amount of the prepayment and the Type of Advances to be
prepaid, and if such notice is given such Borrower shall, prepay the outstanding
principal amounts of the Revolving Credit Advances comprising the same Borrowing
in whole or ratably in part, together with accrued interest to the date of such
prepayment on the amount prepaid; provided, however, that (A) each partial
prepayment shall be in an aggregate principal amount not less than $10,000,000
or an integral multiple of $1,000,000 in excess thereof and (B) in the event of
any such prepayment of Eurodollar Rate Advances on any day other than the last
day of an Interest Period for such Eurodollar Rate Advances, such Borrower shall
be obligated to reimburse the Lenders in respect thereof pursuant to, and to the
extent required by, Section 9.4(b); provided, further, however, that such
Borrower will use its best efforts to give notice to the Administrative Agent of
the proposed prepayment of Base Rate Advances on the Business Day prior to the
date of such proposed prepayment.

         (b) Mandatory Prepayments. If, at any time and from time to time, the
aggregate principal amount of Advances (other than Advances of Objecting
Lenders) then outstanding exceeds the Commitments of all the Lenders after
giving effect to any reduction of the Commitments pursuant to Section 2.9, the
Borrowers shall immediately prepay the Revolving Credit Advances of Lenders
(other than Objecting Lenders) (to the extent there are such outstanding
Revolving Credit Advances) by an amount equal to such excess.

         SECTION 2.16. Increased Costs. (a) If, due to either (i) the
introduction after the date of this Agreement of or any change after the date of
this Agreement (including any change by way of imposition or increase of reserve
requirements or assessments other than those referred to in the definition of
"Eurodollar Reserve Percentage" contained in Section 1.1) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request issued or made after the date of this Agreement from or by
any central bank or other governmental authority (whether or not having the
force of law), in each case above other than those referred to in Section 2.17,
there shall be any increase in the cost to any Lender of agreeing to make, fund
or maintain, or of making, funding or maintaining, Eurodollar Rate Advances
funded in the interbank Eurodollar market, then the Borrowers shall from time to
time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to reimburse

<PAGE>   33

                                                                              27

such Lender for all such increased costs (except those costs incurred more than
60 days prior to the date of such demand; for the purposes hereof any cost or
expense allocable to a period prior to the publication or effective date of such
an introduction, change, guideline or request shall be deemed to be incurred on
the later of such publication or effective date). Each Lender agrees to use its
best efforts promptly to notify the Company of any event referred to in clause
(i) or (ii) above, provided that the failure to give such notice shall not
affect the rights of any Lender under this Section 2.16(a) (except as otherwise
expressly provided above in this Section 2.16(a)). A certificate as to the
amount of such increased cost, submitted to the Company and the Administrative
Agent by such Lender, shall be conclusive and binding for all purposes, absent
manifest error. After one or more Lenders have notified the Company of any
increased costs pursuant to this Section 2.16, the Company may specify by notice
to the Administrative Agent and the affected Lenders that, after the date of
such notice whenever the election of Eurodollar Rate Advances by the applicable
Borrower for an Interest Period or portion thereof would give rise to such
increased costs, such election shall not apply to the Revolving Credit Advances
of such Lenders during such Interest Period or portion thereof, and, in lieu
thereof, such Revolving Credit Advances shall during such Interest Period or
portion thereof be Base Rate Advances. Each Lender agrees to use its best
efforts (including a reasonable effort to change its lending office or to
transfer its affected Advances to an affiliate of such Lender) to avoid, or
minimize the amount of, any demand for payment from the Borrowers under this
Section 2.16.

         (b) In the event that any Lender shall change its lending office and
such change results (at the time of such change) in increased costs to such
Lender, the Borrowers shall not be liable to such Lender for such increased
costs incurred by such Lender to the extent, but only to the extent, that such
increased costs shall exceed the increased costs which such Lender would have
incurred if the lending office of such Lender had not been so changed, but,
subject to subsection (a) above and to Section 2.18, nothing herein shall
require any Lender to change its lending office for any reason.

         SECTION 2.17. Increased Capital. If either (a) the introduction of or
any change in or in the interpretation of any law or regulation or (b)
compliance by any Lender with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and such Lender determines
that the amount of such capital is increased by or based upon the existence of
such Lender's commitment to lend hereunder and other commitments of this type,
then, within ten days after demand, and delivery to the Company of the
certificate referred to in the last sentence of this Section 2.17 by such Lender
(with a copy of such demand to the Administrative Agent), the applicable
Borrowers shall pay to the Administrative Agent for the account of such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation in the light of such circumstances,
to the extent that such Lender reasonably determines such increase in capital to
be allocable to the existence of such Lender's commitment to lend hereunder
(except any such increase in capital incurred more than, or compensation
attributable to the period before, 90 days prior to the date of such demand; for
the purposes hereof any increase in capital allocable to, or compensation
attributable to, a period prior to the publication or effective date of such an
introduction, change, guideline or request shall be deemed to be incurred on the
later of such publication or effective date). Each Lender agrees to use its best
efforts promptly to notify the Company of any event referred to in clause (a) or
(b) above, provided that the failure to give such notice shall not affect the
rights of any Lender under this Section 2.17 (except as otherwise expressly
provided above in this Section

<PAGE>   34

                                                                              28

2.17). A certificate in reasonable detail as to the basis for, and the amount
of, such compensation submitted to the Company by such Lender shall, in the
absence of manifest error, be conclusive and binding for all purposes.

         SECTION 2.18. Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for any Lender or its
lending office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain such Advances hereunder, such Lender
may, by notice to the Company and the Administrative Agent, suspend the right of
the Borrowers to elect Eurodollar Rate Advances from such Lender and, if
necessary in the reasonable opinion of such Lender to comply with such law or
regulation, Convert all such Eurodollar Rate Advances of such Lender to Base
Rate Advances at the latest time permitted by the applicable law or regulation,
and such suspension and, if applicable, such Conversion shall continue until
such Lender notifies the Company and the Administrative Agent that the
circumstances making it unlawful for such Lender to perform such obligations no
longer exist (which such Lender shall promptly do when such circumstances no
longer exist). So long as the obligation of any Lender to make Eurodollar Rate
Advances has been suspended under this Section 2.18, all Notices of Borrowing
specifying Advances of such Type shall be deemed, as to such Lender, to be
requests for Base Rate Advances. Each Lender agrees to use its best efforts
(including a reasonable effort to change its lending office or to transfer its
affected Advances to an affiliate) to avoid any such illegality.

         SECTION 2.19. Pro Rata Treatment, Payments and Computations. (a) Each
Borrowing by any Borrower in respect of Revolving Credit Advances (subject to
the provisions of Section 2.24(e)) shall be made pro rata according to the
respective Commitment Percentages of the Lenders. The Borrowers shall make each
payment hereunder (including under Section 2.6, 2.8, 2.10 or 2.11) and under the
Notes, whether the amount so paid is owing to any or all of the Lenders or to
the Administrative Agent, not later than 12:00 noon (New York City time) without
setoff, counterclaim, or any other deduction whatsoever, on the day when due in
Dollars to the Administrative Agent at its address at 270 Park Avenue, New York,
New York 10017, Reference: El Paso Corporation, or at such other location
designated by notice to the Company from the Administrative Agent and agreed to
by the Company, in same day funds. The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or facility fees ratably (other than amounts payable
pursuant to Section 2.12, 2.16, 2.17, 2.18 or 2.20) according to the respective
amounts of such principal, interest or facility fees then due and owing to the
Lenders, and like funds relating to the payment of any other amount payable to
any Lender to such Lender, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 9.7(d), from and after the effective date specified in such Assignment
and Acceptance, the Administrative Agent shall make all payments hereunder and
under the Notes in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.

         (b) All computations of interest based on the Prime Rate and of
facility fees shall be made by the Administrative Agent on the basis of a year
of 365 or 366 days, as the case may be, and all computations of interest based
on the Eurodollar Rate or the Effective Federal

<PAGE>   35

                                                                              29

Funds Rate shall be made by the Administrative Agent, and all computations of
interest pursuant to Section 2.12 shall be made by each Lender with respect to
its own Advances, on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent (or, in the case of Section 2.12,
2.16, 2.17, 2.18 or 2.20, by each Lender with respect to its own Advances) of an
interest rate or an increased cost or increased capital or of illegality
hereunder shall be conclusive and binding for all purposes if made reasonably
and in good faith.

         (c) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest; provided, however, if such
extension would cause payment of interest on or principal of Eurodollar Rate
Advances to be made in the next following calendar month, such payment shall be
made on the next preceding Business Day.

         (d) Unless the Administrative Agent shall have received notice from the
Company or any other applicable Borrower prior to the date on which any payment
is due to the Lenders hereunder that the applicable Borrower will not make such
payment in full, the Administrative Agent may assume that the applicable
Borrower has made such payment in full to the Administrative Agent on such date
and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the applicable Borrower shall not have so
made such payment in full to the Administrative Agent, each Lender shall repay
to the Administrative Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Administrative Agent, at a rate equal to the Effective Federal Funds Rate for
such day.

         SECTION 2.20. Taxes. (a) Any and all payments by the Borrowers
hereunder or under the Notes to each Indemnified Party shall be made, in
accordance with Section 2.19, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding all taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, imposed by the jurisdiction under the laws of which such
Indemnified Party is organized, domiciled, resident or doing business, or any
political subdivision thereof or by any jurisdiction in which such Indemnified
Party holds any interest in connection with this Agreement or any Note
(including in the case of each Lender, the jurisdiction of such Lender's lending
office) or any political subdivision thereof, other than by any jurisdiction
with which the Indemnified Party's connection arises solely from having
executed, delivered or performed obligations or received a payment under, or
enforced, this Agreement or any Note (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If any Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any Note to any
Indemnified Party, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.20) such Indemnified Party receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) such Borrower shall make or cause to be made such deductions and
(iii) such Borrower shall pay or cause to be paid the full amount deducted to
the relevant taxation authority

<PAGE>   36

                                                                              30

or other authority in accordance with applicable law, provided that the
Borrowers shall not be required to pay any additional amount (and shall be
relieved of any liability with respect thereto) pursuant to this subsection (a)
to any Indemnified Party that either (A) on the date such Lender became an
Indemnified Party hereunder, (I) was not entitled to submit a U.S. Internal
Revenue Service form W8-ECI (relating to such Indemnified Party, and entitling
it to a complete exemption from United States withholding taxes on all amounts
to be received by such Indemnified Party pursuant to this Agreement) and a U.S.
Internal Revenue Service form W8-BEN (relating to all amounts to be received by
such Indemnified Party pursuant to this Agreement) and (II) was not a United
States person (as such term is defined in Section 7701(a)(30) of the Internal
Revenue Code) or (B) has failed to submit any form or certificate that it was
required to file or provide pursuant to subsection (d) of this Section 2.20 and
is entitled to file or give, as applicable, under applicable law, provided,
further, that should an Indemnified Party become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrowers shall take such
steps as such Indemnified Party shall reasonably request to assist such
Indemnified Party to recover such Taxes, and provided, further, that each
Indemnified Party, with respect to itself, agrees to indemnify and hold harmless
the Borrowers from any taxes, penalties, interest and other expenses, costs and
losses incurred or payable by the Borrowers as a result of the failure of any of
the Borrowers to comply with its obligations under clause (ii) or (iii) above in
reliance on any form or certificate provided to it by such Indemnified Party
pursuant to this Section 2.20. If any Indemnified Party receives a net credit or
refund in respect of such Taxes or amounts so paid by the Borrowers, it shall
promptly notify the Company of such net credit or refund and shall promptly pay
such net credit or refund to the applicable Borrower, provided that the
applicable Borrower agrees to return such net credit or refund if the
Indemnified Party to which such net credit or refund is applicable is required
to repay it.

         (b) In addition, each Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made by such Borrower hereunder or
under the Notes or from the execution, delivery or performance of, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to as "Other
Taxes").

         (c) Each Borrower will indemnify each Indemnified Party and the
Administrative Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.20) paid by such Indemnified Party and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto
except as a result of the gross negligence (which shall in any event include the
failure of such Indemnified Party to provide to the Borrowers any form or
certificate that it was required to provide pursuant to subsection (d) below) or
willful misconduct of such Indemnified Party, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be made
within 30 days from the date such Indemnified Party makes written demand
therefor.

         (d) On or prior to the date on which each Indemnified Party organized
under the laws of a jurisdiction outside the United States becomes an
Indemnified Party hereunder, such Indemnified Party shall provide the Company
with U.S. Internal Revenue Service form W8-ECI or W8-BEN, as appropriate, or any
successor form prescribed by the U.S. Internal Revenue Service, certifying that
such Indemnified Party is fully exempt from United States withholding taxes with
respect to all payments to be made to such Indemnified Party hereunder, or other
documents satisfactory to the Company indicating that all payments to be made to
such

<PAGE>   37

                                                                              31

Indemnified Party hereunder are fully exempt from such taxes. Thereafter and
from time to time (but only so long as such Indemnified Party remains lawfully
able to do so), each such Indemnified Party shall submit to the Company such
additional duly completed and signed copies of one or the other of such Forms
(or such successor Forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may be (i) notified by any Borrower to such
Indemnified Party and (ii) required under then-current United States law or
regulations to avoid United States withholding taxes on payments in respect of
all amounts to be received by such Indemnified Party pursuant to this Agreement
or the Notes. Upon the request of any Borrower from time to time, each
Indemnified Party that is a United States person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) shall submit to the Company a
certificate to the effect that it is such a United States person. If any
Indemnified Party determines, as a result of any change in applicable law,
regulation or treaty, or in any official application or interpretation thereof,
that it is unable to submit to the Company any form or certificate that such
Indemnified Party is obligated to submit pursuant to this subsection (d), or
that such Indemnified Party is required to withdraw or cancel any such form or
certificate previously submitted, such Indemnified Party shall promptly notify
the Company of such fact.

         (e) Any Indemnified Party claiming any additional amounts payable
pursuant to this Section 2.20 shall use its best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its lending office if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the reasonable judgment of such Indemnified
Party, be otherwise disadvantageous to such Indemnified Party.

         (f) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers and each
Indemnified Party contained in this Section 2.20 shall survive the payment in
full of principal and interest hereunder and under the Notes.

         (g) Any other provision of this Agreement to the contrary
notwithstanding, any amounts which are payable by any Borrower under this
Section 2.20 shall not be payable under Section 2.16.

         SECTION 2.21. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances made by it (other than
pursuant to Section 2.12, 2.16, 2.17, 2.18 or 2.20) in excess of its ratable
share of payments on account of the Advances obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
the Advances made by them as shall be necessary to cause such purchasing Lender
to share the excess payment ratably with each of them, provided, however, that
if all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and each
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (a) the amount of such Lender's required
repayment to (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. Each 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 the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of such Borrower in the amount of such
participation.

<PAGE>   38

                                                                              32

         SECTION 2.22. Use of Proceeds. Proceeds of the Advances may be used for
general business purposes of the Borrowers and their respective Subsidiaries,
including for acquisitions and for payment of commercial paper issued by the
Borrowers, and to refinance any Indebtedness of the Borrowers and their
respective Subsidiaries (whether in connection with any acquisition or
otherwise).

         SECTION 2.23. Extension of Stated Termination Date. (a) Not less than
45 days and not more than 60 days prior to the Stated Termination Date then in
effect, provided that no Event of Default shall have occurred and be continuing,
the Company may request an extension of such Stated Termination Date by
submitting to the Administrative Agent an Extension Request containing the
information in respect of such extension specified in Exhibit M, which the
Administrative Agent shall promptly furnish to each Lender. Each Lender shall,
not less than 30 days and not more than 60 days prior to the Stated Termination
Date then in effect, notify the Company and the Administrative Agent of its
election to extend or not extend the Stated Termination Date as requested in
such Extension Request. Notwithstanding any provision of this Agreement to the
contrary, any notice by any Lender of its willingness to extend the Stated
Termination Date shall be revocable by such Lender in its sole and absolute
discretion at any time prior to the date which is 30 days prior to the Stated
Termination Date then in effect. If the Required Lenders shall approve in
writing the extension of the Stated Termination Date requested in such Extension
Request, the Stated Termination Date shall automatically and without any further
action by any Person be extended for the period specified in such Extension
Request; provided that (i) each extension pursuant to this Section 2.23 shall be
for a maximum of 364 days and (ii) the Commitment of any Lender that does not
consent in writing, or which revokes, in accordance with the provisions of this
Section 2.23, its consent to such extension not less than 30 days and not more
than 60 days prior to the Stated Termination Date then in effect and has not
thereafter reinstated its consent (an "Objecting Lender") shall, unless earlier
terminated in accordance with this Agreement, expire on the Stated Termination
Date in effect on the date of such Extension Request (such Stated Termination
Date, if any, being referred to as the "Commitment Expiration Date" with respect
to such Objecting Lender). If, not less than 30 days and not more than 60 days
prior to the Stated Termination Date then in effect, the Required Lenders shall
not approve in writing the extension of the Stated Termination Date requested in
an Extension Request, the Stated Termination Date shall not be extended pursuant
to such Extension Request. The Administrative Agent shall promptly notify (y)
the Lenders and the Company of any extension of the Stated Termination Date
pursuant to this Section 2.23 and (z) the Company and the Lenders of any Lender
which becomes an Objecting Lender.

         (b) Revolving Credit Advances owing to any Objecting Lender on the
Commitment Expiration Date with respect to such Lender shall be repaid in full
on or before the date that is two years after such Commitment Expiration Date.

         (c) The Borrowers shall have the right, so long as no Event of Default
has occurred and is then continuing, upon giving notice to the Administrative
Agent and the Objecting Lenders in accordance with Section 2.15, to prepay in
full the Revolving Credit Advances of the Objecting Lenders, together with
accrued interest thereon, any amounts payable pursuant to Sections 2.11, 2.12,
2.16, 2.17, 2.18, 2.20 and 9.4(b) and any accrued and unpaid facility fee or
other amounts payable to the Objecting Lenders hereunder and/or, upon giving not
less than three Business Days' notice to the Objecting Lenders and the
Administrative Agent, to cancel the whole or part of the Commitments of the
Objecting Lenders.

<PAGE>   39

                                                                              33

         (d) Notwithstanding the foregoing, if any Lender becomes an Objecting
Lender, the Borrower may, at its own expense and in its sole discretion and
prior to the then Stated Termination Date, require such Lender to transfer or
assign, in whole or in part, without recourse (in accordance with Section 9.7),
all or part of its interests, rights and obligations under this Agreement to an
Eligible Assignee (provided that the Borrower, with the full cooperation of such
Lender, can identify an Eligible Assignee that is ready, willing and able to be
an assignee with respect thereto) which shall assume such assigned obligations
(which assignee may be another Lender, if such assignee Lender accepts such
assignment); provided that (A) the assignee or the Borrower, as the case may be,
shall have paid to such Lender in immediately available funds the principal of
and interest accrued to the date of such payment on the Advances made by it
hereunder and all other amounts owed to it hereunder, including any amounts
owing pursuant to Section 9.4(b) and any amounts that would be owing under said
Section if such Advances were prepaid on the date of such assignment, and (B)
such assignment does not conflict with any law, rule or regulation or order of
any governmental authority. Any assignee which becomes a Lender as a result of
such an assignment made pursuant to this paragraph (d) shall be deemed to have
consented to the applicable Extension Request and, therefore, shall not be an
Objecting Lender.

         SECTION 2.24. [Intentionally Left Blank]

         SECTION 2.25. Replacement of Lenders. If any Lender requests
compensation under Sections 2.12, 2.16 or 2.17 or if any Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.20, or if any Lender suspends the
right of any Borrower to elect Eurodollar Rate Advances from such Lender
pursuant to Section 2.18, or if any Lender defaults in its obligation to fund
Advances hereunder, then the Company may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.7), all its interests, rights and
obligations under this Agreement (other than any outstanding CAF Advances held
by it) to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (i) the
Company shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Advances (other than CAF Advances), accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Sections 2.12 , 2.16 or 2.17 or
payments required to be made pursuant to Section 2.20, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.

                                  ARTICLE III

                     CONDITIONS OF EFFECTIVENESS AND LENDING

         SECTION 3.1. Conditions Precedent to Effectiveness of this Agreement.
This Agreement shall become effective (the "Effective Date") when (i) it shall
have been executed by

<PAGE>   40

                                                                              34

the Company, EPNGC Tennessee, the Administrative Agent, the CAF Advance Agent,
the Co-Documentation Agents and the Co-Syndication Agents and (ii) the
Administrative Agent and the Company either shall have been notified by each
Lender that such Lender has executed it or shall have received a counterpart of
this Agreement executed by such Lender (or compliance with the forgoing shall
have been waived by the Lenders). Anything in this Agreement to the contrary
notwithstanding, if all of the conditions to effectiveness of this Agreement
specified in this Section 3.1 shall not have been fulfilled on or before June
11, 2001, (i) the Company shall on such date pay all accrued and unpaid facility
fees pursuant to Section 2.8 and (ii) this Agreement, and all of the obligations
of the Company, the Lenders, the Administrative Agent and the CAF Advance Agent
hereunder, shall be terminated on and as of 5:00 P.M. (New York City time) on
June 11, 2001; provided, however, that as soon as the Administrative Agent
determines that all of the conditions to effectiveness of this Agreement
specified in this Section 3.1 shall have been fulfilled on or before June 11,
2001, the Administrative Agent shall furnish written notice to the Company and
the Lenders to the effect that it has so determined, and such notice by the
Administrative Agent shall constitute conclusive evidence that this Agreement
shall have become effective for all purposes. Notwithstanding the foregoing, the
obligations of the Company to pay fees pursuant to Section 2.8 as well as all
obligations of the Borrowers pursuant to Section 9.4 shall survive the
termination of this Agreement.

         SECTION 3.2. Conditions Precedent to Initial Advances. The agreement of
each Lender to make the initial Advances to be made by it to the Borrowers
hereunder is subject to (the date upon which all conditions listed in Section
3.2(a) and 3.2(b) are satisfied, the "Closing Date") (a) the occurrence of the
Effective Date hereunder and (b) the receipt by the Administrative Agent of the
following in form and substance satisfactory to the Administrative Agent and in
sufficient copies for each Lender:

                  (i) Certified copies of the resolutions of the Board of
         Directors of each of the Company, EPNGC and Tennessee approving the
         borrowings contemplated hereby and authorizing the execution of this
         Agreement and the Notes, and of all documents evidencing other
         necessary Business Entity action of each of the Company, EPNGC and
         Tennessee and governmental approvals to each of the Company, EPNGC and
         Tennessee, if any, with respect to this Agreement and the Notes.

                  (ii) A certificate of the Secretary or an Assistant Secretary
         of each of the Company, EPNGC and Tennessee certifying the names and
         true signatures of the officers of each of the Company, EPNGC and
         Tennessee authorized to sign this Agreement and the other documents to
         be delivered by it hereunder.

                  (iii) A favorable opinion of the Senior Counsel of the
         Company, or the Associate General Counsel of the Company, in
         substantially the form of Exhibit G.

                  (iv) A favorable opinion of Jones, Day, Reavis & Pogue, New
         York counsel to the Company, EPNGC and Tennessee, in substantially the
         form of Exhibit H.

                  (v) A letter from the Process Agent, in substantially the form
         of Exhibit I, agreeing to act as Process Agent for each of the Company,
         EPNGC and Tennessee and to forward forthwith all process received by it
         to the Company, EPNGC and Tennessee, as applicable.

<PAGE>   41

                                                                              35

                  (vi) Evidence satisfactory to the Administrative Agent that
         all advances, accrued interest and other fees and any other amounts
         owing to the lenders and the agents under the Existing 364-Day Facility
         shall have been, or simultaneously with the initial Advances are being,
         paid in full, and the commitments to make advances thereunder shall
         have been cancelled.

         SECTION 3.3. Conditions Precedent to Initial Advances to Any Borrowing
Subsidiary. The agreement of each Lender to make the initial Advances to be made
by it to any Borrowing Subsidiary (other than EPNGC and Tennessee) is further
subject to the Administrative Agent receiving the following, in form and
substance satisfactory to the Administrative Agent and (except for the Notes) in
sufficient copies for each Lender:

                  (a) A Joinder Agreement executed and delivered by such
         Borrowing Subsidiary conforming to the requirements hereof.

                  (b) Notes, dated the date such Borrowing Subsidiary executes
         and delivers its Joinder Agreement, made by such Borrowing Subsidiary
         to the order of each Lender requesting a Note, respectively.

                  (c) A certificate of the Secretary or an Assistant Secretary
         of such Borrowing Subsidiary certifying the names and true signature of
         the officers of such Borrowing Subsidiary authorized to sign the
         Joinder Agreement and the other documents to be delivered by it
         hereunder.

                  (d) A favorable opinion of the Senior Counsel or Associate
         General Counsel of the Company, given upon the express instructions of
         the Company, in substantially the form of Exhibit K, and as to such
         other matters as any Lender through the Administrative Agent may
         reasonably request, with such assumptions, qualifications and
         exceptions as the Administrative Agent may approve.

                  (e) A favorable opinion of Jones, Day, Reavis & Pogue or other
         New York counsel to the Company reasonably satisfactory to the
         Administrative Agent, in substantially the form of Exhibit L, and as to
         such other matters as any Lender through the Administrative Agent may
         reasonably request, with such assumptions, qualifications and
         exceptions as the Administrative Agent may approve.

                  (f) A letter from the Process Agent, in substantially the form
         of Exhibit I, agreeing to act as Process Agent for such Borrowing
         Subsidiary, as the case may be, and to forward forthwith all process
         received by it to such Borrowing Subsidiary.

         SECTION 3.4. Conditions Precedent to Each Borrowing. The obligation of
each Lender to make an Advance (including the initial Advance, but excluding any
continuation or Conversion of an Advance) on the occasion of any Borrowing shall
be subject to the conditions precedent that on or before the date of such
Borrowing this Agreement shall have become effective pursuant to Section 3.1
and, before and immediately after giving effect to such Borrowing and to the
application of the proceeds therefrom, the following statements shall be true
and correct, and the giving by the applicable Borrower or the Company on such
Borrower's behalf of the applicable Notice of Borrowing and the acceptance by
the applicable Borrower of the proceeds of such Borrowing shall constitute its
representation and warranty that on and as of

<PAGE>   42

                                                                              36

the date of such Borrowing, before and immediately after giving effect thereto
and to the application of the proceeds therefrom, the following statements are
true and correct:

                  (i) each representation and warranty contained in Section 4.1
         is correct in all material respects as though made on and as of such
         date; and

                  (ii) no event has occurred and is continuing, or would result
         from such Borrowing, which constitutes an Event of Default or a
         Default.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         SECTION 4.1. Representations and Warranties of the Borrowers. Each
Borrower represents and warrants as follows:

                  (a) The Company is a Business Entity duly formed, validly
         existing and, if applicable, in good standing under the laws of the
         State of Delaware. Each Principal Subsidiary is duly organized or
         formed, validly existing and, if applicable, in good standing in the
         jurisdiction of its organization or formation. The Company and each
         Principal Subsidiary possess all applicable Business Entity powers and
         all other authorizations and licenses necessary to engage in its
         business and operations as now conducted, the failure to obtain or
         maintain which would have a Material Adverse Effect.

                  (b) The execution, delivery and performance by each Borrower
         of this Agreement, each Joinder Agreement, if any, to which it is a
         party and its Notes (as applicable) are within such Borrower's
         applicable Business Entity powers, have been duly authorized by all
         necessary applicable Business Entity action, and do not contravene (A)
         such Borrower's organizational documents or (B) any law or any material
         contractual restriction binding on or affecting such Borrower.

                  (c) No authorization or approval or other action by, and no
         notice to or filing with, any governmental authority or regulatory body
         is required for the due execution, delivery and performance by such
         Borrower of this Agreement, each Joinder Agreement, if any, to which it
         is a party or its Notes (as applicable), except those necessary to
         comply with laws, rules, regulations and orders required in the
         ordinary course to comply with ongoing obligations of such Borrower
         under Section 5.1(a) and (b).

                  (d) This Agreement constitutes, its Notes and each Joinder
         Agreement, if any, to which it is a party (as applicable) when
         delivered hereunder shall constitute the legal, valid and binding
         obligations of each Borrower, enforceable against such Borrower in
         accordance with their respective terms, except as may be limited by any
         applicable bankruptcy, insolvency, reorganization, moratorium or
         similar laws affecting creditors' rights generally or by general
         principles of equity.

                  (e) The consolidated balance sheet of the Company and its
         consolidated Subsidiaries as at December 31, 2000, and the related
         consolidated statements of income and cash flows of the Company and its
         consolidated Subsidiaries for the fiscal year then ended, reported on
         by PricewaterhouseCoopers LLP, independent public accountants,

<PAGE>   43

                                                                              37

         copies of which have been furnished to the Administrative Agent and the
         Lenders prior to the date hereof, fairly present the consolidated
         financial condition of the Company and its consolidated Subsidiaries as
         at such date and the consolidated results of the operations of the
         Company and its consolidated Subsidiaries for the period ended on such
         date, all in accordance with GAAP consistently applied, and since
         December 31, 2000, there has been no material adverse change in such
         condition or operations. The unaudited consolidated balance sheet of
         the Company and its consolidated Subsidiaries as of March 31, 2001, and
         the related consolidated statements of income and cash flows of the
         Company and its consolidated Subsidiaries for the three months then
         ended, certified by the chief financial officer of the Company, copies
         of which have been furnished to the Administrative Agent and the
         Lenders prior to the date hereof, fairly present the consolidated
         results of operations of the Company and its consolidated Subsidiaries
         for the three months then ended, all in accordance with GAAP
         consistently applied (except as approved by the chief financial officer
         of the Company and as disclosed therein) and subject to normal year-end
         audit adjustments.

                  (f) Each of the Company and its Subsidiaries is in compliance
         with all laws, rules, regulations and orders of any governmental
         authority applicable to it or its property except where the failure to
         comply, individually or in the aggregate, would not in the reasonable
         judgment of the Company be expected to result in a Material Adverse
         Effect.

                  (g) There is no action, suit or proceeding pending, or to the
         knowledge of any Borrower threatened, against or involving the Company
         or any Principal Subsidiary in any court, or before any arbitrator of
         any kind, or before or by any governmental body, existing as at the
         Effective Date which in the reasonable judgment of the Company (taking
         into account the exhaustion of all appeals) would have a Material
         Adverse Effect, or which purports to affect the legality, validity,
         binding effect or enforceability of this Agreement or the Notes.

                  (h) The Company and each Principal Subsidiary have duly filed
         all tax returns required to be filed, and have duly paid and discharged
         all taxes, assessments and governmental charges upon it or against its
         properties now due and payable, the failure to file or pay which, as
         applicable, would have a Material Adverse Effect, unless and to the
         extent only that the same are being contested in good faith and by
         appropriate proceedings by the Company or the appropriate Subsidiary.

                  (i) The Company and each Principal Subsidiary have good title
         to their respective properties and assets, free and clear of all
         mortgages, liens and encumbrances, except for mortgages, liens and
         encumbrances (including covenants, restrictions, rights, easements and
         minor irregularities in title) which do not materially interfere with
         the business or operations of the Company or such Subsidiary as
         presently conducted or which are permitted by Section 5.2(a), and
         except that no representation or warranty is being made with respect to
         Margin Stock.

                  (j) No Termination Event has occurred or is reasonably
         expected to occur with respect to any Plan which, with the giving of
         notice or lapse of time, or both, would constitute an Event of Default
         under Section 7.1(g).

<PAGE>   44

                                                                              38

                  (k) Each Plan has complied with the applicable provisions of
         ERISA and the Code where the failure to so comply would reasonably be
         expected to result in an aggregate liability that would exceed 10% of
         the Net Worth of the Company.

                  (l) The statement of assets and liabilities of each Plan and
         the statements of changes in fund balance and in financial position, or
         the statement of changes in net assets available for plan benefits, for
         the most recent plan year for which an accountant's report with respect
         to such Plan has been prepared, copies of which report have been
         furnished to the Administrative Agent, fairly present the financial
         condition of such Plan as at such date and the results of operations of
         such Plan for the plan year ended on such date.

                  (m) Neither the Company nor any ERISA Affiliate has incurred,
         or is reasonably expected to incur, any Withdrawal Liability to any
         Multiemployer Plan which, when aggregated with all other amounts
         required to be paid to Multiemployer Plans in connection with
         Withdrawal Liability (as of the date of determination), would exceed
         10% of the Net Worth of the Company.

                  (n) Neither the Company nor any ERISA Affiliate has received
         any notification that any Multiemployer Plan is in reorganization,
         insolvent or has been terminated, within the meaning of Title IV of
         ERISA, and no Multiemployer Plan is reasonably expected to be in
         reorganization, insolvent or to be terminated within the meaning of
         Title IV of ERISA the effect of which reorganization, insolvency or
         termination would be the occurrence of an Event of Default under
         Section 7.1(i).

                  (o) No Borrower is an "investment company" or a "company"
         controlled by an "investment company" within the meaning of the
         Investment Company Act of 1940, as amended.

                  (p) No Borrower is a "holding company" or a "subsidiary
         company" of a "holding company" within the meaning of the Public
         Utility Holding Company Act of 1935, as amended.

                  (q) The borrowings by the Borrowers under this Agreement and
         the Notes and the applications of the proceeds thereof as provided
         herein will not violate Regulation T, U or X of the Board of Governors
         of the Federal Reserve System.

All representations and warranties made by the Borrowers herein or made in any
certificate delivered pursuant hereto shall survive the making of the Advances
and the execution and delivery to the Lenders of this Agreement and the Notes.

                                   ARTICLE V

                           COVENANTS OF THE BORROWERS

         SECTION 5.1. Affirmative Covenants. So long as any amount payable by
any Borrower hereunder or under any Note shall remain unpaid or any Lender shall
have any Commitment hereunder, each Borrower will, unless the Majority Lenders
shall otherwise consent in writing:

<PAGE>   45

                                                                              39

                  (a) Preservation of Existence, Etc. Preserve and maintain,
         and, in the case of the Company, cause each Principal Subsidiary to
         preserve and maintain, its existence, rights (organizational and
         statutory) and material franchises, except as otherwise permitted by
         Section 5.2(d) or 5.2(e) and except that nothing herein shall prevent
         any change in Business Entity form of the Company or any Principal
         Subsidiary.

                  (b) Compliance with Laws, Etc. Comply, and, in the case of the
         Company, cause each Principal Subsidiary to comply, in all material
         respects with all applicable laws, rules, regulations and orders
         (including all environmental laws and laws requiring payment of all
         taxes, assessments and governmental charges imposed upon it or upon its
         property except to the extent contested in good faith by appropriate
         proceedings) the failure to comply with which would have a Material
         Adverse Effect.

                  (c) Visitation Rights. At any reasonable time and from time to
         time, permit the Administrative Agent or any of the Lenders or any
         agents or representatives thereof, to examine and make copies of and
         abstracts from the records and books of account of, and visit the
         properties of, the Company and any of its Subsidiaries, and to discuss
         the affairs, finances and accounts of the Company and any of its
         Subsidiaries with any of their officers and with their independent
         certified public accountants.

                  (d) Books and Records. Keep, and, in the case of the Company,
         cause each of its Subsidiaries to keep, proper books of record and
         account, in which full and correct entries shall be made of all its
         respective financial transactions and the assets and business of the
         Company and each of its Subsidiaries, as applicable, in accordance with
         GAAP either (i) consistently applied or (ii) applied in a changed
         manner provided such change shall have been disclosed to the
         Administrative Agent and shall have been consented to by the
         accountants which (as required by Section 5.3(b)) report on the
         financial statements of the Company and its consolidated Subsidiaries
         for the fiscal year in which such change shall have occurred.

                  (e) Maintenance of Properties, Etc. Maintain and preserve,
         and, in the case of the Company, cause each Principal Subsidiary to
         maintain and preserve, all of its properties which are used in the
         conduct of its business in good working order and condition, ordinary
         wear and tear excepted, to the extent that any failure to do so would
         have a Material Adverse Effect.

                  (f) Maintenance of Insurance. Maintain, and, in the case of
         the Company, cause each Principal Subsidiary to maintain, insurance
         with responsible and reputable insurance companies or associations in
         such amounts and covering such risks as is usually carried by companies
         engaged in similar businesses and owning similar properties in the same
         general areas in which the Company or such Subsidiary operates.

         SECTION 5.2. Negative Covenants. So long as any amount payable by any
Borrower hereunder or under any Note shall remain unpaid or any Lender shall
have any Commitment hereunder, each Borrower will not, unless the Majority
Lenders shall otherwise consent in writing:

                  (a) Liens, Etc. (i) Create, assume or suffer to exist, or, in
         the case of the Company, permit any Principal Subsidiary to create,
         assume or suffer to exist, any Liens upon or with respect to any of its
         Equity Interests in any Principal Subsidiary, whether

<PAGE>   46

                                                                              40

         now owned or hereafter acquired, or (ii) create or assume, or, in the
         case of the Company, permit any Principal Subsidiary to create or
         assume, any Liens upon or with respect to any other assets material to
         the consolidated operations of the Company and its consolidated
         Subsidiaries taken as a whole securing the payment of Indebtedness and
         Guaranties in an aggregate amount (determined without duplication of
         amount (so that the amount of a Guaranty will be excluded to the extent
         the Indebtedness Guaranteed thereby is included in computing such
         aggregate amount)) exceeding the greater of (x) $300,000,000 and (y)
         10% of Net Worth as at the date of such creation or assumption;
         provided, however, that this subsection (a) shall not apply to:

                           (A) Liens on the Equity Interests in, or Indebtedness
                  or other obligations of, or assets of, any Project Financing
                  Subsidiary (or any Equity Interests in, or Indebtedness or
                  other obligations of, any Business Entity which are directly
                  or indirectly owned by any Project Financing Subsidiary)
                  securing the payment of a Project Financing and related
                  obligations;

                           (B) Liens on (1) assets acquired by the Company or
                  any of its Subsidiaries after February 11, 1992 to the extent
                  that such Liens existed at the time of such acquisition and
                  were not placed thereon by or with the consent of the Company
                  in contemplation of such acquisition and (2) Equity Interests
                  acquired after February 11, 1992 in a Business Entity that has
                  become or becomes a Subsidiary of the Company, or on assets of
                  any such Business Entity, to the extent that such Liens
                  existed at the time of such acquisition and were not placed
                  thereon by or with the consent of the Company in contemplation
                  of such acquisition;

                           (C) Liens created by any Alternate Program or any
                  document executed by any Borrower or any Subsidiary in
                  connection therewith;

                           (D) Liens on Margin Stock;

                           (E) Permitted Liens;

                           (F) Liens arising out of the refinancing, extension,
                  renewal or refunding of any Indebtedness or Guaranty or other
                  obligation secured by any Lien permitted by any of the
                  foregoing clauses of this Section, provided that the principal
                  amount of such Indebtedness or Guaranty or other obligation is
                  not increased (except by the amount of costs reasonably
                  incurred in connection with the issuance thereof) beyond the
                  highest previous amount thereof and such Indebtedness or
                  Guaranty or other obligation is outstanding immediately prior
                  to the refinancing, extension, renewal or refunding and is not
                  secured by any additional assets that would not have been
                  permitted by this Section to secure the Indebtedness or
                  Guaranty or other obligation refinanced, extended, renewed or
                  refunded; and

                           (G) Liens on products and proceeds (including
                  dividend, interest and like payments on, and insurance and
                  condemnation proceeds and rental, lease, licensing and similar
                  proceeds) of, and property evidencing or embodying, or
                  constituting rights or other general intangibles directly
                  relating to or arising out of, and accessions and improvements
                  to, collateral subject to Liens permitted by this Section
                  5.2(a).

<PAGE>   47

                                                                              41

                  (b) Consolidated Debt and Guarantees to Capitalization. Permit
         the ratio of (A) the sum of (1) the aggregate amount of consolidated
         Debt of the Company and its consolidated Subsidiaries (without
         duplication of amount under this clause (A) and determined as to all of
         the foregoing entities on a consolidated basis) plus (2) the aggregate
         amount of consolidated Guaranties of the Company and its consolidated
         Subsidiaries (without duplication of amount under this clause (A) and
         determined as to all of the foregoing entities on a consolidated basis)
         to (B) Capitalization of the Company (without duplication and
         determined as to all of the foregoing entities on a consolidated basis)
         to exceed .7 to 1.

                  (c) Debt, Etc. In the case of the Company, permit any of its
         consolidated Subsidiaries to incur or become liable for any Debt, any
         Guaranty or any reimbursement obligation with respect to any letter of
         credit (other than any Project Financing), if, immediately after giving
         effect to such Debt, Guaranty or reimbursement obligation and the
         receipt and application of any proceeds thereof or value received in
         connection therewith, the aggregate amount (determined without
         duplication of amount) of Debt, Guaranties and letter of credit
         reimbursement obligations of the Company's consolidated Subsidiaries
         owing to Persons other than the Company and its consolidated
         Subsidiaries (other than any Project Financing) would exceed the
         greater of (x) $600,000,000 and (y) 10% of Net Worth determined as at
         the date of incurrence or assumption thereof; provided, however, that
         the following Debt, Guaranties or reimbursement obligations shall be
         excluded from the application of, and calculation set forth in, this
         paragraph (c): (A) Debt, Guaranties or reimbursement obligations
         incurred by (x) Mojave or (y) EPNGC, (B) Debt, Guaranties or
         reimbursement obligations arising under (x) the EPTPC Facility or (y)
         this Agreement or the 3-Year Facility, (C) Debt, Guaranties or
         reimbursement obligations incurred by El Paso Field Services Company up
         to an amount not to exceed at any time outstanding the tangible net
         worth of El Paso Field Services Company, provided that such Debt may be
         guaranteed by the Company, (D) Excluded Acquisition Debt, (E)
         successive extensions, refinancings or replacements (at the same
         Subsidiary or at any other consolidated Subsidiary of the Company) of
         Debt, Guaranties or reimbursement obligations (or commitments in
         respect thereof) referred to in clauses (A), (B) and (D) above and in
         an amount not in excess of the amounts so extended, refinanced or
         replaced (or the amount of commitments in respect thereof) and (F)
         Debt, Guarantees or reimbursement obligations incurred by Tennessee
         pursuant to one or more commercial paper programs allowing for the
         issuance by Tennessee of items of commercial paper having maturity
         dates not later than one year from the dates of their respective
         issuance provided that such Debt, Guarantees or reimbursement
         obligations of Tennessee shall be in an aggregate amount not to exceed
         at any time the excess of (x) the sum of (1) the aggregate amount of
         Commitments and (2) the aggregate amount of Commitments as defined in
         the 3-Year Facility, over (y) the sum of (1) the aggregate amount of
         Advances, (2) the aggregate amount of Advances, as defined in and
         outstanding pursuant to, the 3-Year Facility, and (3) the aggregate
         principal amount of commercial paper outstanding from time to time that
         (I) is issued by the Company and its Subsidiaries (other than
         Tennessee) and (II) relies upon credit availability under either this
         Agreement or the 3-Year Facility for commercial paper liquidity
         purposes.

                  (d) Sale, Etc. of Assets. Sell, lease or otherwise transfer,
         or, in the case of the Company, permit any Principal Subsidiary to
         sell, lease or otherwise transfer, (in either case, whether in one
         transaction or in a series of transactions) assets constituting all or

<PAGE>   48

                                                                              42

         substantially all of the consolidated assets of the Company and its
         Principal Subsidiaries taken as a whole, provided that provisions of
         this subsection (d) shall not apply to:

                           (i) any sale of receivables and related rights
                  pursuant to any Alternate Program;

                           (ii) any Project Financing Subsidiary and the assets
                  thereof;

                           (iii) sales, leases or other transfers of assets or
                  capital stock of any Subsidiary of the Company other than any
                  Principal Subsidiary;

                           (iv) any sale of Margin Stock;

                           (v) any sale of up to 20% of the equity of El Paso
                  Field Services Company in an initial public offering of such
                  Person's Equity Interests;

                           (vi) any sale, lease or other transfer to the Company
                  or any Principal Subsidiary, or to any Business Entity that
                  after giving effect to such transfer will become and be either
                  (A) a Principal Subsidiary in which the Company's direct or
                  indirect equity interest will be at least as great as its
                  direct or indirect equity interest in the transferor
                  immediately prior thereto or (B) a directly or indirectly
                  wholly-owned Principal Subsidiary; and

                           (vii) any transfer permitted by Section 5.2(e); and

                           (viii) any transfer to the Company or any of its
                  Subsidiaries of any stock or assets other than FERC regulated
                  assets (or stock or any other equity interest in an entity
                  owning FERC regulated assets) used in the mainline gas
                  transmission business; provided that no Event of Default or
                  Default shall have occurred and be continuing before and
                  immediately after giving effect to such transfer.

                  (e) Mergers, Etc. Merge or consolidate with any Person, or in
         the case of the Company permit any of its Principal Subsidiaries to
         merge or consolidate with any Person, except that (i) any Principal
         Subsidiary may merge or consolidate with (or liquidate into) any other
         Subsidiary (other than a Project Financing Subsidiary, unless the
         successor Business Entity is not treated as a Project Financing
         Subsidiary under this Agreement) or may merge or consolidate with (or
         liquidate into) the Company, provided that (A) if such Principal
         Subsidiary merges or consolidates with (or liquidates into) the
         Company, either (x) the Company shall be the continuing or surviving
         Business Entity or (y) the continuing or surviving Business Entity is
         organized under the laws of the United States or a State thereof and
         unconditionally assumes by agreement all of the performance obligations
         and payment Obligations of the Company under this Agreement and the
         Notes and (B) if any such Principal Subsidiary merges or consolidates
         with (or liquidates into) any other Subsidiary, one or more Business
         Entities that are Subsidiaries are the continuing or surviving Business
         Entity(ies) and, if either such Subsidiary is not directly or
         indirectly wholly-owned by the Company, such merger or consolidation is
         on an arm's length basis, and (ii) the Company or any Principal
         Subsidiary may merge or consolidate with any other Business Entity
         (that is, in addition to the Company or any Subsidiary), provided that
         (A) if the Company merges or consolidates with any such

<PAGE>   49

                                                                              43

         other Business Entity, either (x) the Company is the continuing or
         surviving Business Entity or (y) the continuing or surviving Business
         Entity is organized under the laws of the United States or a State
         thereof and unconditionally assumes by agreement all of the performance
         obligations and payment Obligations of the Company under this Agreement
         and the Notes, (B) if any Principal Subsidiary merges or consolidates
         with any such other Business Entity, the surviving Business Entity is
         directly or indirectly a wholly-owned Principal Subsidiary of the
         Company, (C) if either the Company or any Principal Subsidiary merges
         or consolidates with any such other Business Entity, after giving
         effect to such merger or consolidation no Event of Default or Default
         shall have occurred and be continuing and (D) if any Principal
         Subsidiary which is a party to any merger, consolidation or liquidation
         permitted by this paragraph (e) is a Borrowing Subsidiary, either (x)
         such Principal Subsidiary shall be the continuing or surviving Business
         Entity or (y) the continuing or surviving Business Entity is organized
         under the laws of the United States or a State thereof and
         unconditionally assumes by agreement all of the performance obligations
         and payment Obligations of such Borrowing Subsidiary under this
         Agreement and the Notes (the Borrowers and the Lenders agreeing that it
         is their intention that each Business Entity that is a Borrower be
         organized under the laws of the United States or a State thereof).

         SECTION 5.3. Reporting Requirements. So long as any amount payable by
any Borrower hereunder or under any Note shall remain unpaid or any Lender shall
have any Commitment hereunder, the Company will furnish to each Lender in such
reasonable quantities as shall from time to time be requested by such Lender:

                  (a) as soon as publicly available and in any event within 60
         days after the end of each of the first three fiscal quarters of each
         fiscal year of each of the Company and EPNGC, a consolidated balance
         sheet of each of the Company and EPNGC and its respective consolidated
         subsidiaries as of the end of such quarter, and consolidated statements
         of income and cash flows of each of the Company and EPNGC and its
         respective consolidated subsidiaries each for the period commencing at
         the end of the previous fiscal year and ending with the end of such
         quarter, certified (subject to normal year-end adjustments) as being
         fairly stated in all material respects by the chief financial officer,
         controller or treasurer of the Company and accompanied by a certificate
         of such officer stating (i) whether or not such officer has knowledge
         of the occurrence of any Event of Default which is continuing hereunder
         or of any event not theretofore remedied which with notice or lapse of
         time or both would constitute such an Event of Default and, if so,
         stating in reasonable detail the facts with respect thereto, (ii) all
         relevant facts in reasonable detail to evidence, and the computations
         as to, whether or not the Company is in compliance with the
         requirements set forth in subsections (b) and (c) of Section 5.2, and
         (iii) a listing of all Principal Subsidiaries and consolidated
         Subsidiaries of the Company showing the extent of its direct and
         indirect holdings of their stocks;

                  (b) as soon as publicly available and in any event within 120
         days after the end of each fiscal year of each of the Company and
         EPNGC, a copy of the annual report for such year for each of the
         Company and EPNGC and its respective consolidated Subsidiaries
         containing financial statements for such year reported by nationally
         recognized independent public accountants acceptable to the Lenders,
         accompanied by (i) a report signed by said accountants stating that
         such financial statements have been prepared in accordance with GAAP
         and (ii) a letter from such accountants stating that in

<PAGE>   50

                                                                              44

         making the investigations necessary for such report they obtained no
         knowledge, except as specifically stated therein, of any Event of
         Default which is continuing hereunder or of any event not theretofore
         remedied which with notice or lapse of time or both would constitute
         such an Event of Default;

                  (c) within 120 days after the close of each of the Company's
         fiscal years, a certificate of the chief financial officer, controller
         or treasurer of the Company stating (i) whether or not he has knowledge
         of the occurrence of any Event of Default which is continuing hereunder
         or of any event not theretofore remedied which with notice or lapse of
         time or both would constitute such an Event of Default and, if so,
         stating in reasonable detail the facts with respect thereto, (ii) all
         relevant facts in reasonable detail to evidence, and the computations
         as to, whether or not the Company is in compliance with the
         requirements set forth in subsections (b) and (c) of Section 5.2 and
         (iii) a listing of all Principal Subsidiaries and consolidated
         Subsidiaries of the Company showing the extent of its direct and
         indirect holdings of their stocks;

                  (d) promptly after the sending or filing thereof, copies of
         all publicly available reports which the Company or any Principal
         Subsidiary sends to any of its security holders and copies of all
         publicly available reports and registration statements which the
         Company or any Principal Subsidiary files with the Securities and
         Exchange Commission or any national securities exchange other than
         registration statements relating to employee benefit plans and to
         registrations of securities for selling security holders;

                  (e) within 10 days after sending or filing thereof, a copy of
         FERC Form No. 2: Annual Report of Major Natural Gas Companies, sent or
         filed by the Company to or with the FERC with respect to each fiscal
         year of the Company;

                  (f) promptly in writing, notice of all litigation and of all
         proceedings before any governmental or regulatory agencies against or
         involving the Company or any Principal Subsidiary, except any
         litigation or proceeding which in the reasonable judgment of the
         Company (taking into account the exhaustion of all appeals) is not
         likely to have a material adverse effect on the consolidated financial
         condition of the Company and its consolidated Subsidiaries taken as a
         whole;

                  (g) within three Business Days after an executive officer of
         the Company obtains knowledge of the occurrence of any Event of Default
         which is continuing or of any event not theretofore remedied which with
         notice or lapse of time, or both, would constitute an Event of Default,
         notice of such occurrence together with a detailed statement by a
         responsible officer of the Company of the steps being taken by the
         Company or the appropriate Subsidiary to cure the effect of such event;

                  (h) as soon as practicable and in any event (i) within 30 days
         after the Company or any ERISA Affiliate knows or has reason to know
         that any Termination Event described in clause (a) of the definition of
         Termination Event with respect to any Plan has occurred and (ii) within
         10 days after the Company or any ERISA Affiliate knows or has reason to
         know that any other Termination Event with respect to any Plan has
         occurred, a statement of the chief financial officer or treasurer of
         the Company describing such Termination Event and the action, if any,
         which the Company or such ERISA Affiliate proposes to take with respect
         thereto;

<PAGE>   51

                                                                              45

                  (i) promptly and in any event within two Business Days after
         receipt thereof by the Company or any ERISA Affiliate, copies of each
         notice received by the Company or any ERISA Affiliate from the PBGC
         stating its intention to terminate any Plan or to have a trustee
         appointed to administer any Plan;

                  (j) promptly and in any event within 30 days after the filing
         thereof with the Internal Revenue Service, copies of each Schedule B
         (Actuarial Information) to the annual report (Form 5500 Series) with
         respect to each Single Employer Plan;

                  (k) promptly and in any event within five Business Days after
         receipt thereof by the Company or any ERISA Affiliate from the sponsor
         of a Multiemployer Plan, a copy of each notice received by the Company
         or any ERISA Affiliate concerning (i) the imposition of Withdrawal
         Liability by a Multiemployer Plan, (ii) the determination that a
         Multiemployer Plan is, or is expected to be, in reorganization or
         insolvent within the meaning of Title IV of ERISA, (iii) the
         termination of a Multiemployer Plan within the meaning of Title IV of
         ERISA, or (iv) the amount of liability incurred, or expected to be
         incurred, by the Company or any ERISA Affiliate in connection with any
         event described in clause (i), (ii) or (iii) above; and

                  (l) as soon as practicable but in any event within 60 days of
         any notice of request therefor, such other information respecting the
         financial condition and results of operations of the Company or any
         Subsidiary of the Company as any Lender through the Administrative
         Agent may from time to time reasonably request.

         Each balance sheet and other financial statement furnished pursuant to
subsections (a) and (b) of this Section 5.3 shall contain comparative financial
information which conforms to the presentation required in Form 10-Q and 10-K,
as appropriate, under the Securities Exchange Act of 1934, as amended.

         SECTION 5.4. Restrictions on Material Subsidiaries. The Company will
not, and will not permit any Material Subsidiary, to enter into any agreement or
understanding pursuant to which (a) any non-equity interest claim the Company
may have against any Material Subsidiary would be subordinate in any manner to
the payment of any other obligation of such Material Subsidiary (other than
waivers or subordination of subrogation, contribution or similar rights under
Guaranties and similar agreements) or (b) by its terms limits or restricts the
ability of such Material Subsidiary to make funds available to the Company
(whether by dividend or other distribution, by replacement of any inter-company
advance or otherwise) if, in any such case referred to in this Section 5.4,
there is, at the time any such agreement is entered into, a reasonable
likelihood that all such agreements and understandings, considered together,
would materially and adversely affect the ability of the Company to meet its
obligations as they become due.

                                   ARTICLE VI

                                   GUARANTEES

         SECTION 6.1. Guarantees. (a) Subject to the provisions of Section
6.1(b), each Borrower hereby unconditionally and irrevocably guarantees to the
Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns,

<PAGE>   52

                                                                              46

the prompt and complete payment by each other Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations owing by such
other Borrower.

         (b) Anything in this Article VI to the contrary notwithstanding, the
maximum liability of each Borrower (other than a Borrower which is guaranteeing
the Obligations of its Subsidiaries) under this Article VI shall in no event
exceed the amount which can be guaranteed by such Borrowing Subsidiary under
applicable federal and state laws relating to the insolvency of debtors.

         (c) Each Borrower agrees that the Obligations owing by any other
Borrower may at any time and from time to time exceed the amount of the
liability of such other Borrower under this Article VI without impairing the
guarantee of such Borrower under this Article VI or affecting the rights and
remedies of the Administrative Agent or any Lender under this Article VI.

         (d) No payment or payments made by any Borrower or any other Person or
received or collected by the Administrative Agent or any Lender from any
Borrower or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Borrowers under this Article VI
which shall, notwithstanding any such payment or payments, continue until the
Obligations are paid in full and the Commitments are terminated.

         (e) Each Borrower agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability under this Article VI, it will notify the
Administrative Agent in writing that such payment is made under this Article VI
for such purpose.

         SECTION 6.2. No Subrogation. Notwithstanding any payment or payments
made by any Borrower under this Article VI or any set-off or application of
funds of such Borrower by the Administrative Agent or any Lender, such Borrower
shall not be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against any other Borrower or against any
collateral security or guarantee or right of offset held by the Administrative
Agent or any Lender for the payment of the Obligations, nor shall such Borrower
seek or be entitled to seek any contribution or reimbursement from any other
Borrower in respect of payments made by such Borrower hereunder, until all
amounts owing to the Administrative Agent and the Lenders by the other Borrowers
on account of the Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to any Borrower on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Borrower in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Borrower, and shall, forthwith upon receipt by such Borrower, be turned over to
the Administrative Agent in the exact form received by such Borrower (duly
indorsed by such Borrower to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.

         SECTION 6.3. Amendments, etc. with respect to the Obligations; Waiver
of Rights. Each Borrower shall remain obligated under this Article VI
notwithstanding that, without any reservation of rights against such Borrower,
and without notice to or further assent by such Borrower, any demand for payment
of any of the Obligations made by the

<PAGE>   53

                                                                              47

Administrative Agent or any Lender may be rescinded by the Administrative Agent
or such Lender, and any of the Obligations continued, and the Obligations, or
the liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and this Agreement, any Notes and any other documents
executed and delivered in connection herewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Majority Lenders, as the case may be) may deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
the Administrative Agent or any Lender for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Obligations or for
this Agreement or any property subject thereto. When making any demand hereunder
against any Borrower, the Administrative Agent or any Lender may, but shall be
under no obligation to, make a similar demand on the applicable Borrowing
Subsidiaries or any other guarantor, and any failure by the Administrative Agent
or any Lender to make any such demand or to collect any payments from the other
Borrowers or any such other guarantor or any release of the other Borrowers or
such other guarantor shall not relieve such Borrower of its obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Administrative Agent or any
Lender against such Borrower for the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.

         SECTION 6.4. Guarantee Absolute and Unconditional. Each Borrower waives
any and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon this Agreement or acceptance of this Agreement; the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon this
Agreement; and all dealings between any Borrower, on the one hand, and the
Administrative Agent and the Lenders, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Agreement. Each Borrower waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the other Borrowers with
respect to the Obligations. The guarantee contained in this Article VI shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of this
Agreement, any Note, any of the Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by any
Borrower against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of any Borrower)
which constitutes, or might be construed to constitute, an equitable or legal
discharge of any Borrower for the Obligations, or of the Borrowers under this
Agreement, in bankruptcy or in any other instance. When pursuing its rights and
remedies hereunder against any Borrower, the Administrative Agent and any Lender
may, but shall be under no obligation to, pursue such rights and remedies as it
may have against any other Borrower or any other Person or against any
collateral security or guarantee for the Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Lender to
pursue such other rights or remedies or to collect any payments from other
Borrowers or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right

<PAGE>   54
                                                                             48

of offset, or any release of any other Borrower or any such other Person or of
any such collateral security, guarantee or right of offset, shall not relieve
any Borrower of any liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Administrative Agent or any Lender against such Borrower. The guarantees
contained in this Article VI shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon each Borrower and
its successors and assigns thereof, and shall inure to the benefit of the
Administrative Agent and the Lenders, and their respective successors,
indorsees, transferees and assigns, until all the Obligations and the
obligations of the Borrowers under this Agreement shall have been satisfied by
payment in full and the Commitments shall be terminated, notwithstanding that
from time to time during the term of this Agreement the Borrowers may be free
from any Obligations.

         SECTION 6.5. Reinstatement. The provisions of this Article VI shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Borrower or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, any Borrower or any
substantial part of its property, or otherwise, all as though such payments had
not been made.

                                  ARTICLE VII

                                EVENTS OF DEFAULT

         SECTION 7.1. Event of Default. If any of the following events ("Events
of Default") shall occur and be continuing:

                  (a) Any Borrower shall fail to pay any installment of
         principal of any of its Advances or Notes when due, or any interest on
         any of its Advances or Notes or any other amount payable by it
         hereunder within five Business Days after the same shall be due; or

                  (b) Any representation or warranty made or deemed made by any
         Borrower herein or by any Borrower (or any of its officers) in
         connection with this Agreement shall prove to have been incorrect in
         any material respect when made or deemed made; or

                  (c) Any Borrower shall fail to perform or observe any other
         term, covenant or agreement contained in this Agreement on its part to
         be performed or observed and any such failure shall remain unremedied
         for 30 days after written notice thereof shall have been given to such
         Borrower by the Administrative Agent or by any Lender with a copy to
         the Administrative Agent; or

                  (d) The Company or any Principal Subsidiary shall fail to pay
         any Debt or Guaranty (excluding Debt incurred pursuant hereto) of the
         Company or such Principal Subsidiary in an aggregate principal amount
         of $200,000,000 or more, at such time, or any installment of principal
         thereof or interest or premium thereon, when due (whether by scheduled
         maturity, required prepayment, acceleration, demand or otherwise) and
         such failure shall continue after the applicable grace period, if any,
         specified in the agreement or instrument relating to such Debt or
         Guaranty; or any other default under any

<PAGE>   55

                                                                              49

         agreement or instrument relating to any such Debt, or any other event,
         shall occur and shall continue after the applicable grace period, if
         any, specified in such agreement or instrument, if the effect of such
         default or event is to accelerate the maturity of such Debt; or any
         such Debt shall be required to be prepaid (other than by a regularly
         scheduled required prepayment), prior to the stated maturity thereof,
         as a result of either (i) any default under any agreement or instrument
         relating to any such Debt or (ii) the occurrence of any other event
         (other than an issuance, sale or other disposition of stock or other
         assets, or an incurrence or issuance of Indebtedness or other
         obligations, giving rise to a repayment or prepayment obligation in
         respect of such Debt) the effect of which would otherwise be to
         accelerate the maturity of such Debt; provided that, notwithstanding
         any provision contained in this subsection (d) to the contrary, to the
         extent that pursuant to the terms of any agreement or instrument
         relating to any Debt or Guaranty referred to in this subsection (d) (or
         in the case of any such Guaranty, relating to any obligations
         Guaranteed thereby), any sale, pledge or disposal of Margin Stock, or
         utilization of the proceeds of such sale, pledge or disposal, would
         result in a breach of any covenant contained therein or otherwise give
         rise to a default or event of default thereunder and/or acceleration of
         the maturity of the Debt or obligations extended pursuant thereto, or
         payment pursuant to any Guaranty, and as a result of such terms or of
         such sale, pledge, disposal, utilization, breach, default, event of
         default or acceleration or nonpayment under such Guaranty, or the
         provisions thereof relating thereto, this Agreement or any Advance
         hereunder would otherwise be subject to the margin requirements or any
         other restriction under Regulation U issued by the Board of Governors
         of the Federal Reserve System, then such breach, default, event of
         default or acceleration, or nonpayment under any Guaranty, shall not
         constitute a default or Event of Default under this subsection (d); or

                  (e) (i) The Company or any Principal Subsidiary shall (A)
         generally not pay its debts as such debts become due; or (B) admit in
         writing its inability to pay its debts generally; or (C) make a general
         assignment for the benefit of creditors; or (ii) any proceeding shall
         be instituted or consented to by the Company or any Principal
         Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking
         liquidation, winding up, reorganization, arrangement, adjustment,
         protection, relief, or composition of it or its debts under any law
         relating to bankruptcy, insolvency or reorganization or relief of
         debtors, or seeking the entry of an order for relief or the appointment
         of a receiver, trustee, or other similar official for it or for any
         substantial part of its property; or (iii) any such proceeding shall
         have been instituted against the Company or any Principal Subsidiary
         and either such proceeding shall not be stayed or dismissed for 60
         consecutive days or any of the actions referred to above sought in such
         proceeding (including the entry of an order for relief against it or
         the appointment of a receiver, trustee, custodian or other similar
         official for it or any substantial part of its property) shall occur;
         or (iv) the Company or any Principal Subsidiary shall take any
         corporate action to authorize any of the actions set forth above in
         this subsection (e); or

                  (f) Any judgment or order of any court for the payment of
         money in excess of $100,000,000 shall be rendered against the Company
         or any Principal Subsidiary and either (i) enforcement proceedings
         shall have been commenced and are continuing or have been completed by
         any creditor upon such judgment or order (other than any enforcement
         proceedings consisting of the mere obtaining and filing of a judgment
         lien or obtaining of a garnishment or similar order so long as no
         foreclosure, levy or similar

<PAGE>   56

                                                                              50

         process in respect of such lien, or payment over in respect of such
         garnishment or similar order, has commenced and is continuing or has
         been completed) or (ii) there shall be any period of 30 consecutive
         days during which a stay of execution or of enforcement proceedings
         (other than those referred to in the parenthesis in clause (i) above)
         in respect of such judgment or order, by reason of a pending appeal,
         bonding or otherwise, shall not be in effect; or

                  (g) (i) Any Termination Event with respect to a Plan shall
         have occurred and, 30 days after notice thereof shall have been given
         to the Company by the Administrative Agent, such Termination Event
         shall still exist; or (ii) the Company or any ERISA Affiliate shall
         have been notified by the sponsor of a Multiemployer Plan that it has
         incurred Withdrawal Liability to such Multiemployer Plan; or (iii) the
         Company or any ERISA Affiliate shall have been notified by the sponsor
         of a Multiemployer Plan that such Multiemployer Plan is in
         reorganization, or is insolvent or is being terminated, within the
         meaning of Title IV of ERISA; or (iv) any Person shall engage in a
         "prohibited transaction" (as defined in Section 406 of ERISA or Section
         4975 of the Code) involving any Plan; and in each case in clauses (i)
         through (iv) above, such event or condition, together with all other
         such events or conditions, if any, would result in an aggregate
         liability of the Company or any ERISA Affiliate that would exceed 10%
         of Net Worth; or

                  (h) Upon completion of, and pursuant to, a transaction, or a
         series of transactions (which may include prior acquisitions of capital
         stock of the Company in the open market or otherwise), involving a
         tender offer (i) a "person" (within the meaning of Section 13(d) of the
         Securities Exchange Act of 1934) other than the Company or a Subsidiary
         of the Company or any employee benefit plan maintained for employees of
         the Company and/or any of its Subsidiaries or the trustee therefor,
         shall have acquired direct or indirect ownership of and paid for in
         excess of 50% of the outstanding capital stock of the Company entitled
         to vote in elections for directors of the Company and (ii) at any time
         before the later of (A) six months after the completion of such tender
         offer and (B) the next annual meeting of the shareholders of the
         Company following the completion of such tender offer more than half of
         the directors of the Company consists of individuals who (1) were not
         directors before the completion of such tender offer and (2) were not
         appointed, elected or nominated by the Board of Directors in office
         prior to the completion of such tender offer (other than any such
         appointment, election or nomination required or agreed to in connection
         with, or as a result of, the completion of such tender offer); or

                  (i) Any event of default shall occur under any agreement or
         instrument relating to or evidencing any Debt now or hereafter existing
         of the Company or any Principal Subsidiary as the result of any change
         of control of the Company; or

                  (j) Any of the Guarantees contained in Article VI shall cease,
         for any reason, to be in full force and effect or any Borrower shall so
         assert; provided that if, within one Business Day after any Borrower
         receives notice from the Administrative Agent or otherwise becomes
         aware that such Guarantee is not in full force and effect, the Company
         delivers written notice to the Administrative Agent that the applicable
         Borrower intends to deliver a valid and effective Guarantee, or to
         reinstate such Guarantee, as soon as possible, then an Event of Default
         shall not exist pursuant this Section 7.1(j) unless the Company shall
         fail to deliver or reinstate or cause to be delivered or reinstated a
         Guarantee of the applicable Borrower having the same economic effect as
         the Guarantee

<PAGE>   57

                                                                              51

         set forth in Article VI within four Business Days after the delivery of
         such written notice of intent;

then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Lenders, by notice to the Company, (i)
declare the obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) declare the Advances and
the Notes, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances and the Notes,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrowers; provided, however, that
if an Event of Default under subsection (e) of this Section 7.1 (except under
clause (i)(A) thereof) shall occur, (A) the obligation of each Lender to make
Advances shall automatically be terminated and (B) the Advances and the Notes,
all interest thereon and all other amounts payable under this Agreement shall
automatically become and be forthwith due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrowers.

                                  ARTICLE VIII

               THE ADMINISTRATIVE AGENT AND THE CAF ADVANCE AGENT

         SECTION 8.1. Authorization and Action. Each Lender hereby appoints and
authorizes the Administrative Agent and the CAF Advance Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the CAF Advance Agent by the
terms hereof, together with such powers as are reasonably incidental thereto. As
to any matters not expressly provided for by this Agreement (including
enforcement of this Agreement or collection of the Notes), the Administrative
Agent and the CAF Advance Agent shall not be required to exercise any discretion
or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Lenders, and such instructions shall be binding
upon all Lenders and all holders of Notes; provided, however, that the
Administrative Agent and the CAF Advance Agent shall not be required to take any
action which exposes the Administrative Agent or the CAF Advance Agent to
personal liability or which is contrary to this Agreement or applicable law. The
Administrative Agent and the CAF Advance Agent agree to give to each Lender
prompt notice of each notice given to it by any Borrower pursuant to the terms
of this Agreement.

         SECTION 8.2. Administrative Agent's and CAF Advance Agent's Reliance,
Etc. None of the Administrative Agent, the CAF Advance Agent or any of its
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent and the CAF Advance Agent: (i) may treat the payee of any
Note as the holder thereof until the Administrative Agent receives and accepts
an Assignment and Acceptance entered into by the Lender which is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.7; (ii) may consult with legal counsel (including counsel for the
Company), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or

<PAGE>   58

                                                                              52

representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrowers or to inspect the
property (including the books and records) of the Borrowers; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopier, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties.

         SECTION 8.3. Chase and Affiliates. With respect to its Commitment, the
Advances made by it and the Note issued to it, Chase 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 Administrative Agent or the CAF Advance Agent; and the
term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include
Chase in its individual capacity. Chase and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage in
any kind of business with, the Company, any of its Subsidiaries and any Person
who may do business with or own securities of the Company or any of its
Subsidiaries, all as if Chase were not the Administrative Agent or the CAF
Advance Agent and without any duty to account therefor to the other Lenders.

         SECTION 8.4. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent, the CAF
Advance Agent or any other Lender and based on the financial statements referred
to in Section 4.1 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the CAF Advance Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.

         SECTION 8.5. Indemnification. The Lenders agree to indemnify the
Administrative Agent and the CAF Advance Agent (to the extent not reimbursed by
the Borrowers), ratably according to the respective principal amounts of the
Advances then outstanding by each of them (or if no Advances are at the time
outstanding or if any Notes are held by Persons which are not Lenders, ratably
according to the respective amounts of their aggregate Commitments), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent or the CAF Advance Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by the Administrative Agent
or the CAF Advance Agent under this Agreement, provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's or the CAF Advance Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Administrative Agent and the CAF Advance Agent promptly upon
demand for its ratable share of any out-of-pocket expenses (including reasonable
counsel fees) incurred by the Administrative Agent or the CAF Advance Agent in
connection with the preparation, execution, delivery, administration,

<PAGE>   59

                                                                              53

modification, amendment or enforcement (whether through negotiations, legal
proceedings, in bankruptcy or insolvency proceedings, or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, to the
extent that the Administrative Agent or the CAF Advance Agent is not reimbursed
for such expenses by the Borrowers.

         SECTION 8.6. Successor Administrative Agent and CAF Advance Agent. The
Administrative Agent and the CAF Advance Agent may resign at any time by giving
written notice thereof to the Lenders and the Company and may be removed at any
time with or without cause by the Majority Lenders. Upon any such resignation or
removal, the Majority Lenders shall have the right to appoint a successor
Administrative Agent or the CAF Advance Agent. If no successor Administrative
Agent or CAF Advance Agent shall have been so appointed by the Majority Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's or the CAF Advance Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Administrative
Agent or CAF Advance Agent, then such retiring Administrative Agent or CAF
Advance Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent or CAF Advance Agent, which shall be a Lender and a commercial bank
organized, or authorized to conduct a banking business, under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent or CAF Advance Agent hereunder by a successor
Administrative Agent or CAF Advance Agent, such successor Administrative Agent
or CAF Advance Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent or
CAF Advance Agent, and the retiring Administrative Agent or CAF Advance Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent's or CAF Advance Agent's resignation or
removal hereunder as Administrative Agent or CAF Advance Agent, the provisions
of this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent or CAF Advance Agent
under this Agreement.

         SECTION 8.7. Co-Syndication Agents; Co-Documentation Agents. None of
the Lenders identified on the cover page or signature pages or in the preamble
of this Agreement as a "co-syndication agent" or "co-documentation agent" shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without limiting
the foregoing, none of the Lenders so identified as a "co-syndication agent" or
"co-documentation agent" shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of the Lenders so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.

                                   ARTICLE IX

                                  MISCELLANEOUS

         SECTION 9.1. Amendments, Etc. An amendment or waiver of any provision
of this Agreement or the Notes, or a consent to any departure by any Borrower
therefrom, shall be effective against the Lenders and all holders of the Notes
if, but only if, it shall be in writing and signed or consented to in writing by
the Majority Lenders, and then such a waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall, unless in writing and

<PAGE>   60

                                                                              54

signed by all the Lenders, be effective to: (a) waive any of the conditions
specified in Article III, (b) except as contemplated by Sections 2.4, 2.5, 2.23
and 2.25, increase or extend the Commitments of the Lenders or subject the
Lenders to any additional obligations, (c) reduce the principal of, or interest
on, any Advance or the Notes or any facility fees hereunder, (d) postpone any
date fixed for any payment of principal of, or interest on, any Advance or the
Notes or any facility fees hereunder, (e) change the percentage of the
Commitments or of the aggregate unpaid principal amount of any Advance or the
Notes, or the number of Lenders, which shall be required for the Lenders or any
of them to take any action under this Agreement, (f) amend this Section 9.1, (g)
amend, waive or consent to any departure of any provision in Article VI or (h)
except as provided below, release any Borrower from its guarantee in Article VI;
provided, further, that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent and the CAF Advance Agent in addition to
the Lenders required hereinabove to take such action, affect the rights or
duties of the Administrative Agent or the CAF Advance Agent under this Agreement
or any Note; provided, still further, that the guarantee of a Borrower under
Article VI shall be released automatically upon (i) the sale by the Company of
such Borrower, provided that such sale is permitted under this Agreement, or
(ii) such Borrower ceasing to be a Borrower (it being understood that the
Company and EPNGC shall never cease to be a Borrower hereunder).

         SECTION 9.2. Notices, Etc. Except as otherwise provided in Section
2.2(a), 2.5(d) or 2.15(b), all notices and other communications provided for
hereunder shall be in writing (including telecopier and other readable
communication) and mailed by certified mail, return receipt requested,
telecopied or otherwise transmitted or delivered, if to any Borrower, c/o the
Company at El Paso Energy Building, 1001 Louisiana Street, Houston, Texas 77002,
Attention: Executive Vice President and Chief Financial Officer, Telecopier:
(713) 420-4975; if to any Lender, at its address set forth under its name on
Schedule I; if to the Administrative Agent, at 270 Park Avenue, 21st floor, New
York, New York 10017, Attention: Steve Wood, Telecopier: (212) 270-2519,
Telephone: (212) 270-7056; and if to the CAF Advance Agent, at One Chase
Manhattan Plaza, 8th Floor, New York, New York 10081, Attention: Jackie Reid,
Telecopier: (212) 552-5777, Telephone: (212) 552-7683; or, as to each party and
each Borrowing Subsidiary, at such other address as shall be designated by such
party in a written notice to the other parties. All such notices and
communications shall, if so mailed, telecopied or otherwise transmitted, be
effective when received, if mailed, or when the appropriate answerback or other
evidence of receipt is given, if telecopied or otherwise transmitted,
respectively. A notice received by the Administrative Agent, the CAF Advance
Agent or a Lender by telephone pursuant to Section 2.2(a), 2.5(d) or 2.15(a)
shall be effective if the Administrative Agent or Lender believes in good faith
that it was given by an authorized representative of the applicable Borrower and
acts pursuant thereto, notwithstanding the absence of written confirmation or
any contradictory provision thereof.

         SECTION 9.3. No Waiver; Remedies. No failure on the part of any Lender,
the Administrative Agent or the CAF Advance Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder or
under any Note preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.

         SECTION 9.4. Costs and Expenses; Indemnity. (a) Each Borrower agrees to
pay on demand (to the extent not reimbursed by any other Borrower) (i) all
reasonable fees and

<PAGE>   61

                                                                              55

out-of-pocket expenses of counsel for the Administrative Agent in connection
with the preparation, execution and delivery of this Agreement, the Notes and
the other documents to be delivered hereunder and the fulfillment or attempted
fulfillment of conditions precedent hereunder, (ii) all reasonable costs and
expenses incurred by the Administrative Agent and its Affiliates in initially
syndicating all or any portion of the Commitments hereunder, including the
related reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent or its Affiliates, travel expenses, duplication and
printing costs and courier and postage fees, and excluding any syndication fees
paid to other parties joining the syndicate and (iii) all out-of-pocket costs
and expenses, if any, incurred by the Administrative Agent, the CAF Advance
Agent and the Lenders in connection with the enforcement (whether through
negotiations, legal proceedings in bankruptcy or insolvency proceedings, or
otherwise) of this Agreement, the Notes and the other documents to be delivered
hereunder and thereunder, including the reasonable fees and out-of-pocket
expenses of counsel.

         (b) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance or CAF Advance is made by any Borrower to or for the account of a
Lender on any day other than the last day of the Interest Period for such
Advance, as a result of a prepayment pursuant to Section 2.15 or a Conversion
pursuant to Section 2.13(f) or Section 2.14 or due to acceleration of the
maturity of the Advances and the Notes pursuant to Section 7.1 or due to any
other reason attributable to such Borrower, or if any Borrower shall fail to
make a borrowing of Eurodollar Rate Advances or CAF Advances after such Borrower
has given a notice requesting the same in accordance with the provisions of this
Agreement, such Borrower shall, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably incur as a result
of such payment, Conversion or failure to borrow, including any loss (excluding
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender to
fund or maintain such Advance.

         (c) Each Borrower agrees to indemnify and hold harmless the
Administrative Agent, the CAF Advance Agent and each Lender (to the extent not
reimbursed by any other Borrower) from and against any and all claims, damages,
liabilities and expenses (including fees and disbursements of counsel) which may
be incurred by or asserted against the Administrative Agent, the CAF Advance
Agent or such Lender in connection with or arising out of any investigation,
litigation, or proceeding (whether or not the Administrative Agent, the CAF
Advance Agent or such Lender is party thereto) related to any acquisition or
proposed acquisition by the Company, or by any Subsidiary of the Company, of all
or any portion of the stock or substantially all the assets of any Person or any
use or proposed use of the Advances by any Borrower (excluding any claims,
damages, liabilities or expenses incurred by reason of the gross negligence or
willful misconduct of the party to be indemnified or its employees or agents, or
by reason of any use or disclosure of information relating to any such
acquisition or use or proposed use of the proceeds by the party to be
indemnified or its employees or agents).

         SECTION 9.5. Right of Set-Off. Upon the declaration of the Advances and
the Notes as due and payable pursuant to the provisions of Section 7.1, each
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the applicable Borrower against any and all of the obligations of
such Borrower now or

<PAGE>   62

                                                                              56

hereafter existing under this Agreement and the Notes of such Borrower held by
such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or such Notes and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Company after any such
set-off and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 9.5 are in addition to other rights and
remedies (including other rights of set-off) which such Lender may have.

         SECTION 9.6. Binding Effect. This Agreement shall become effective in
accordance with the provisions of Section 3.1, and thereafter shall be binding
upon and inure to the benefit of the Borrowers, the Administrative Agent, the
CAF Advance Agent and each Lender and their respective successors and assigns,
except that no Borrower shall have the right to assign its rights or obligations
hereunder or any interest herein in a transaction not permitted by Section
5.2(e) without the prior written consent of all of the Lenders.

         SECTION 9.7. Assignments and Participations. (a) Each Lender may assign
to one or more banks or other financial institutions all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment, the Advances owing to it and the Notes held by it); provided,
however, that (i) each such assignment shall be of a constant, and not a
varying, percentage of all such Lender's rights and obligations under this
Agreement, (ii) the amount of the Commitment of the assigning Lender being
assigned to an assignee pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $15,000,000 (or, if less, the entire Commitment of the
assigning Lender) and shall be an integral multiple of $1,000,000, (iii) each
such assignment shall be to an Eligible Assignee, and (iv) the parties to each
such assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Notes subject to such assignment and a processing and recordation fee
of $2,500, and shall send to the Company an executed counterpart of such
Assignment and Acceptance. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (A) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (B) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).

         (b) By executing and delivering an Assignment and Acceptance, each
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of each
Borrower or the performance or observance by each Borrower of any of its
obligations under this Agreement or any other instrument or document

<PAGE>   63

                                                                              57

furnished pursuant hereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.1 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, the CAF Advance Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
confirms that it is (subject to approval in writing by the Company and, if
applicable, the Administrative Agent to the extent required by the definition of
"Eligible Assignee") an Eligible Assignee; (vi) such assignee appoints and
authorizes the Administrative Agent and the CAF Advance Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the CAF Advance Agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.

         (c) The Administrative Agent shall maintain at its address referred to
in Section 9.2 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register (which register may be in electronic form) for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Advances owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and each Borrower, the Administrative Agent,
the CAF Advance Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by any Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice. Upon the acceptance of any Assignment and Acceptance for recordation in
the Register, Schedule I hereto shall be deemed to be amended to reflect the
revised Commitments of the Lenders parties to such Assignment and Acceptance as
well as administrative information with respect to any new Lender as such
information is recorded in the Register.

         (d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and as assignee representing that it is an Eligible Assignee,
together with any Notes subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit G hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company. Within five Business Days after
its receipt of such notice and its receipt of an executed counterpart of such
Assignment and Acceptance, the Borrowers, at their own expense, shall execute
and deliver to the Administrative Agent in exchange for the surrendered Notes,
if any, new Notes to the order of such Eligible Assignee, if requested, in an
amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment hereunder, new
Notes, if requested, to the order of the assigning Lender in an amount equal to
the Commitment retained by it hereunder. Such new Notes, if any, shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Notes, if any, shall be dated (A) in the case of Notes made by the
Company, EPNGC and Tennessee the Closing Date and (B) in the case of Notes made
by any other Borrower, the date such other Borrower executes and delivers its
Joinder Agreement, and shall otherwise be in substantially the form of Exhibit
A.

<PAGE>   64

                                                                              58

         (e) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment, and the Advances owing
to it and the Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including its Commitment to the Borrowers
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Notes for all purposes of
this Agreement, (iv) the Borrowers, the Administrative Agent, the CAF Advance
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, (v) such Lender shall continue to be able to agree to any
modification or amendment of this Agreement or any waiver hereunder without the
consent, approval or vote of any such participant or group of participants,
other than modifications, amendments and waivers which (A) postpone any date
fixed for any payment of, or reduce any payment of, principal of or interest on
such Lender's Advances or Notes or any facility fees payable under this
Agreement, or (B) increase the amount of such Lender's Commitment in a manner
which would have the effect of increasing the amount of a participant's
participation, or (C) reduce the interest rate payable under this Agreement and
such Lender's Notes, or (D) consent to the assignment or the transfer by any
Borrower of any of its rights and obligations under the Agreement, and (vi)
except as contemplated by the immediately preceding clause (v), no participant
shall be deemed to be or to have any of the rights or obligations of a "Lender"
hereunder.

         (f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.7, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrowers furnished to such Lender by or on behalf
of the Borrowers; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree in writing for the
benefit of the Borrowers to preserve the confidentiality of any confidential
information relating to the Borrowers received by it from such Lender in a
manner consistent with Section 9.8.

         (g) Anything in this Agreement to the contrary notwithstanding, any
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including the Advances owing to it) and the Notes
issued to it hereunder in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System (or any
successor regulation) and the applicable operating circular of such Federal
Reserve Bank.

         SECTION 9.8. Confidentiality. Each Lender, the Administrative Agent and
the CAF Advance Agent (each, a "Party") agrees that it will use its best efforts
not to disclose, without the prior consent of the Company (other than to its, or
its Affiliate's, employees, auditors, accountants, counsel or other
representatives, whether existing at the date of this Agreement or any
subsequent time), any information with respect to the Borrowers which is
furnished pursuant to this Agreement, provided that any Party may disclose any
such information (i) as has become generally available to the public, (ii) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such party or to the Board of Governors of the Federal Reserve
System or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (iii) as may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation or

<PAGE>   65

                                                                              59

regulatory proceeding, (iv) in order to comply with any law, order, regulation
or ruling applicable to such party, or (v) to any prospective assignee or
participant in connection with any contemplated assignment of any rights or
obligations hereunder, or any sale of any participation therein, by such Party
pursuant to Section 9.7, if such prospective assignee or participant, as the
case may be, executes an agreement with the Company containing provisions
substantially similar to those contained in this Section 9.8; provided, however,
that the Company acknowledges that the Administrative Agent has disclosed and
may continue to disclose such information as the Administrative Agent in its
sole discretion determines is appropriate to the Lenders from time to time.

         SECTION 9.9. Consent to Jurisdiction. (a) Each Borrower hereby
irrevocably submits to the jurisdiction of any New York State or Federal court
sitting in New York City and any appellate court from any thereof in any action
or proceeding by the Administrative Agent, the CAF Advance Agent, any Lender or
the holder of any Note in respect of, but only in respect of, any claims or
causes of action arising out of or relating to this Agreement or the Notes (such
claims and causes of action, collectively, being "Permitted Claims"), and each
Borrower hereby irrevocably agrees that all Permitted Claims may be heard and
determined in such New York State court or in such Federal court. Each Borrower
hereby irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any aforementioned court in respect of Permitted Claims. Each Borrower hereby
irrevocably appoints CT Corporation System (the "Process Agent"), with an office
on the date hereof at 1633 Broadway, New York, New York 10019, as its agent to
receive on behalf of such Borrower and its property service of copies of the
summons and complaint and any other process which may be served by the
Administrative Agent, any Lender or the holder of any Note in any such action or
proceeding in any aforementioned court in respect of Permitted Claims. Such
service may be made by delivering a copy of such process to the Company by
courier and by certified mail (return receipt requested), fees and postage
prepaid, both (i) in care of the Process Agent at the Process Agent's above
address and (ii) at the Company's address specified pursuant to Section 9.2, and
each Borrower hereby irrevocably authorizes and directs the Process Agent to
accept such service on its behalf. Each Borrower agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

         (b) Nothing in this Section 9.9 (i) shall affect the right of any
Lender, the holder of any Note or the Administrative Agent or the CAF Advance
Agent to serve legal process in any other manner permitted by law or affect any
right otherwise existing of any Lender, the holder of any Note or the
Administrative Agent or the CAF Advance Agent to bring any action or proceeding
against any Borrower or its property in the courts of other jurisdictions or
(ii) shall be deemed to be a general consent to jurisdiction in any particular
court or a general waiver of any defense or a consent to jurisdiction of the
courts expressly referred to in subsection (a) above in any action or proceeding
in respect of any claim or cause of action other than Permitted Claims.

         SECTION 9.10. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

         SECTION 9.11. Rate of Interest. It is the intention of the parties
hereto that each Lender shall each conform strictly to usury laws applicable to
it. Accordingly, if the transactions contemplated hereby would be usurious as to
any Lender under laws applicable to it, then, in that

<PAGE>   66

                                                                              60

event, notwithstanding anything to the contrary in this Agreement or in the
Notes to the order of such Lender, it is agreed as follows: (a) the aggregate of
all consideration which constitutes interest under law applicable to such Lender
that is contracted for, taken, reserved, charged or received by such Lender
hereunder, or under such Notes or otherwise, shall under no circumstances exceed
the maximum amount allowed by such applicable law, and any excess shall be
credited by such Lender on the principal amount of the sums owed to such Lender
(or, if all amounts owing to such Lender shall have been paid in full, refunded
by such Lender to the applicable Borrower); or (b) in the event that a
prepayment of any Advances owed to any Lender is required, then such
consideration that constitutes interest under law applicable to such Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for shall be cancelled automatically by such
Lender as of the date of such prepayment and, if theretofore paid, shall be
credited by such Lender on the principal amount of such prepayment obligation
(or, if the principal amount of such prepayment obligation shall have been paid
in full, refunded by such Lender to the applicable Borrower). To the extent that
Article 5069-1.0001 of the Texas Revised Civil Statutes is relevant to any
Lender for the purpose of determining the maximum amount of interest allowed by
applicable law, such Lender hereby elects to determine the applicable rate
ceiling under such Article by the indicated (weekly) rate ceiling from time to
time in effect, subject to such Lender's right subsequently to change such
method in accordance with applicable law. In no event, however, shall Chapter
346 of the Texas Finance Code apply to this Agreement or the Notes or the
transactions contemplated hereby.

         SECTION 9.12. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different 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.
Delivery to the Administrative Agent of a counterpart executed by a Lender shall
constitute delivery of such counterpart to all of the Lenders. This Agreement
may be delivered by facsimile transmission of the relevant signature pages
hereof.

         SECTION 9.13. Existing 364-Day Facility. The undersigned agree and
acknowledge that, except for provisions that expressly provide for their
survival of termination, the Existing 364-Day Facility is terminated and all
Commitments thereunder (as defined in the Existing 364-Day Facility) are
terminated, and the undersigned waive any right to receive any notice of such
termination. Each Lender that was a party to the Existing 364-Day Facility
agrees to return to the Borrower, with reasonable promptness, all Notes (as
defined in the Existing 364-Day Facility) delivered by the Borrower to such
Lender under the Existing 364-Day Facility.

<PAGE>   67

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective duly authorized officers as of the
date first above written.

                                             EL PASO CORPORATION

                                             By: /s/ JOHN HOPPER
                                                -------------------------------
                                                 John Hopper, Vice President

                                Signature Page-1
<PAGE>   68

                                             EL PASO NATURAL GAS COMPANY

                                             By: /s/ JOHN HOPPER
                                                -------------------------------
                                                 John Hopper, Vice President

                                Signature Page-2
<PAGE>   69

                                             TENNESSEE GAS PIPELINE COMPANY

                                             By: /s/ JOHN HOPPER
                                                -------------------------------
                                                 John Hopper, Vice President

                                Signature Page-3
<PAGE>   70

                                             THE CHASE MANHATTAN BANK, as
                                             Administrative Agent, CAF Advance
                                             Agent and a Lender

                                             By: /s/ STEVEN WOOD
                                                -------------------------------
                                                Steven Wood, Vice President

                                Signature Page-4
<PAGE>   71

                                       BANK OF AMERICA, N.A.,
                                       as Co-Syndication Agent and a Lender

                                       By: /s/ MICHAEL J. DILLON
                                          ------------------------------------
                                          Michael J. Dillon, Managing Director

                                Signature Page-5
<PAGE>   72

                                       CREDIT SUISSE FIRST BOSTON,
                                       as Co-Syndication Agent and a Lender

                                       By:  /s/ DAVID L. SAWYER
                                          ------------------------------------
                                          David L. Sawyer, Vice President

                                       By:  /s/ BILL O'DALY
                                          ------------------------------------
                                          Bill O'Daly, Vice President

                                Signature Page-6
<PAGE>   73

                                       ABN AMRO BANK, N.V.,
                                       as Co-Documentation Agent and a Lender

                                       By:  /s/ RODNEY D. KUBICEK
                                          ------------------------------------
                                          Rodney D. Kubicek,
                                          Group Vice President

                                       By:  /s/ DANA L. MONTGOMERY
                                          ------------------------------------
                                          Dana L. Montgomery, Vice President

                                Signature Page-7
<PAGE>   74

                                      CITIBANK, N.A., as Co-Documentation Agent
                                      and a Lender

                                      By:  /s/ J. CHRISTOPHER LYONS
                                         -------------------------------------
                                         J. Christopher Lyons, Attorney-in-Fact

                                Signature Page-8
<PAGE>   75

                                      THE BANK OF TOKYO-MITSUBISHI,
                                      LTD HOUSTON AGENCY, as a Lender

                                      By:  /s/ JOHN W. MCGHEE
                                         -------------------------------------
                                         John W. McGhee, Vice President
                                         & Manager

                                Signature Page-9
<PAGE>   76

                                      BNP PARIBAS, as a Lender

                                      By:  /s/ BRIAN M. MALONE
                                         -------------------------------------
                                         Brian M. Malone, Managing Director

                                      By:  /s/ BETSY JOCHER
                                         -------------------------------------
                                         Betsy Jocher, Vice President

                                Signature Page-10
<PAGE>   77

                                      COMMERZBANK AG, NEW YORK AND
                                      GRAND CAYMAN BRANCHES, as a Lender

                                      By:  /s/ HARRY P. YERGEY
                                         -------------------------------------
                                         Harry P. Yergey, Senior Vice President
                                         & Manager

                                      By:  /s/ W. DAVID SUTTLES
                                         -------------------------------------
                                         W. David Suttles, Vice President

                                Signature Page-11
<PAGE>   78

                                      BANCA DI ROMA-CHICAGO BRANCH, as a Lender

                                      By:  /s/ AURORA PENSA
                                         -------------------------------------
                                         Aurora Pensa (97974), Vice President

                                      By:  /s/ ENRICO VERDOSCIA
                                         -------------------------------------
                                         Enrico Verdoscia

                                Signature Page-12
<PAGE>   79

                                      DEUTSCHE BANK AG NEW YORK AND/OR CAYMAN
                                      ISLANDS BRANCHES, as a Lender

                                      By:  /s/ HANS C. NARBERHAUS
                                         -------------------------------------
                                         Hans C. Narberhaus, Vice President

                                      By:  /s/ JOEL MAKOWSKY
                                         -------------------------------------
                                         Joel Makowsky, Vice President

                                Signature Page-13
<PAGE>   80

                                      BAYERISCHE HYPO-UND VEREINSBANK AG,
                                      NEW YORK BRANCH, as a Lender

                                      By:  /s/ STEVEN ATWELL
                                         -------------------------------------
                                         Steven Atwell, Director

                                      By:  /s/ SHANNON BATCHMAN
                                         -------------------------------------
                                         Shannon Batchman, Director

                               Signature Page-14
<PAGE>   81

                                      KBC BANK N.V., as a Lender

                                      By:  /s/ ROBERT SNAUFFER
                                         -------------------------------------
                                         Robert Snauffer, First Vice President

                                      By:  /s/ ERIC RASKIN
                                         -------------------------------------
                                         Eric Raskin, Assistant Vice President

                                Signature Page-15
<PAGE>   82

                                      NATIONAL WESTMINSTER BANK Plc,
                                      NEW YORK BRANCH, as a Lender

                                      By:  /s/ KEITH JOHNSON
                                         -------------------------------------
                                         Keith Johnson, Senior Vice President

                                Signature Page-16
<PAGE>   83

                                      SOCIETE GENERALE, as a Lender

                                      By:  /s/ ANTHONY C. QUAGLIETTA
                                         -------------------------------------
                                         Anthony C. Quaglietta, Vice President

                                Signature Page-17
<PAGE>   84

                                      THE FUJI BANK, LIMITED, as a Lender

                                      By:  /s/ MASATOSHI ABE
                                         -------------------------------------
                                         Masatoshi Abe, Vice President
                                         & Manager

                                Signature Page-18
<PAGE>   85

                                      AUSTRALIA AND NEW ZEALAND BANKING GROUP
                                      LIMITED, as a Lender

                                      By:  /s/ SCOTT MCINNIS
                                         -------------------------------------
                                         Scott McInnis, Head of Structured
                                         Finance & Relationship Management -
                                         Americas

                                Signature Page-19
<PAGE>   86

                                      THE BANK OF NEW YORK, as a Lender

                                      By:  /s/ PETER W. KELLER
                                         -------------------------------------
                                         Peter W. Keller
                                         Vice President

                                Signature Page-20
<PAGE>   87

                                      THE BANK OF NOVA SCOTIA, as a Lender

                                      By:  /s/ F.C.H. ASHBY
                                         -------------------------------------
                                         F.C.H. Ashby,
                                         Senior Manager Loan Operations

                                Signature Page-21
<PAGE>   88

                                      BANK ONE, NA (MAIN OFFICE CHICAGO),
                                      as a Lender

                                      By:  /s/ DIANNE L. RUSSELL
                                         -------------------------------------
                                         Dianne L. Russell, Vice President

                                Signature Page-22
<PAGE>   89

                                      BARCLAYS BANK, as a Lender

                                      By:  /s/ DOUGLAS BERNEGGER
                                         -------------------------------------
                                         Douglas Bernegger, Director

                                Signature Page-23
<PAGE>   90

                                      CREDIT AGRICOLE INDOSUEZ, as a Lender

                                      By:  /s/ PATRICK COCQUEREL
                                         -------------------------------------
                                         Patrick Cocquerel, FVP,
                                         Managing Director

                                      By:  /s/ SCOTT A. SCHROEDER
                                         -------------------------------------
                                         Scott A. Schroeder, AVP,
                                         Credit Analysis

                                Signature Page-24
<PAGE>   91

                                      CREDIT LYONNAIS NEW YORK BRANCH,
                                      as a Lender

                                      By:  /s/ PHILIPPE SOUSTRA
                                         -------------------------------------
                                         Philippe Soustra,
                                         Executive Vice President

                                Signature Page-25
<PAGE>   92

                                      ROYAL BANK OF CANADA, as a Lender

                                      By:  /s/ TOM J. OBERAIGNER
                                         -------------------------------------
                                         Tom J. Oberaigner, Senior Manager

                                Signature Page-26
<PAGE>   93

                                      FLEET NATIONAL BANK, as a Lender

                                      By:  /s/ JILL A. CALABRESE BAIN
                                         -------------------------------------
                                         Jill A. Calabrese Bain, Vice President

                                Signature Page-27
<PAGE>   94

                                      MELLON BANK, N.A., as a Lender

                                      By:  /s/ ROGER E. HOWARD
                                         -------------------------------------
                                         Roger E. Howard, Vice President

                                Signature Page-28
<PAGE>   95

                                      SUMITOMO MITSUI BANKING CORPORATION,
                                      as a Lender

                                      By:  /s/ C. MICHAEL GARRIDO
                                         -------------------------------------
                                         C. Michael Garrido,
                                         Senior Vice President

                                Signature Page-29
<PAGE>   96

                                      SUNTRUST BANKS, INC., as a Lender

                                      By:  /s/ JOSEPH M. MCCREERY
                                         -------------------------------------
                                         Joseph M. McCreery,
                                         Assistant Vice President

                               Signature Page-30
<PAGE>   97

                                      TORONTO DOMINION (TEXAS), INC.,
                                      as a Lender

                                      By:  /s/ CAROLYN R. FAETH
                                         -------------------------------------
                                         Carolyn R. Faeth, Vice President

                                Signature Page-31
<PAGE>   98

                                      WESTDEUTSCHE LANDESBANK GIROZENTRALE,
                                      as a Lender

                                      By:  /s/ DUNCAN M. ROBERTSON
                                         -------------------------------------
                                         Duncan M. Robertson, Director

                                      By:  /s/ SALVATORE BATTINELLI
                                         -------------------------------------
                                         Salvatore Battinelli,
                                         Managing Director, Credit Department

                                Signature Page-32
<PAGE>   99

                                      DRESDNER BANK AG, NEW YORK AND GRAND
                                      CAYMAN BRANCHES, as a Lender

                                      By:  /s/ WENDY C.H. ASTELL
                                         -------------------------------------
                                         Wendy C.H. Astell, Vice President

                                      By:  /s/ GILL SCHOR
                                         -------------------------------------
                                         Gill Schor, Assistant Treasurer

                                Signature Page-33
<PAGE>   100

                                      BANCO BILBAO VIZCAYA ARGENTARIA,
                                      as a Lender

                                      By:  /s/ ALBERTO CONDE
                                         -------------------------------------
                                         Alberto Conde, Vice President,
                                         Corporate Banking

                                      By:  /s/ JOHN MARTINI
                                         -------------------------------------
                                         John Martini, Vice President,
                                         Corporate Banking

                                Signature Page-34
<PAGE>   101

                                      INTESABCI-LOS ANGELES FOREIGN BRANCH,
                                      as a Lender

                                      By:  /s/ CHARLES DOUGHERTY
                                         -------------------------------------
                                         Charles Dougherty, Vice President

                                      By:  /s/ FRANK MAFFEI
                                         -------------------------------------
                                         Frank Maffei, Vice President

                                Signature Page-35
<PAGE>   102

                                      CIBC INC., as a Lender

                                      By:  /s/ LINDSAY GORDON
                                         -------------------------------------
                                         Lindsay Gordon, Executive Director
                                         CIBC World Markets Corp. as Agent

                                Signature Page-36
<PAGE>   103

                                      LEHMAN COMMERCIAL PAPER INC., as a Lender

                                      By:  /s/ MICHELE SWANSON
                                         -------------------------------------
                                         Michele Swanson, Authorized Signatory

                                Signature Page-37
<PAGE>   104

                                      STANDARD CHARTERED BANK NEW YORK,
                                      as a Lender

                                      By:  /s/ ANDREW Y. NG
                                         -------------------------------------
                                         Andrew Y. Ng, Vice President

                                      By:  /s/ E. RUSHKEVICH
                                         -------------------------------------
                                         E. Rushkevich, Senior Vice President

                               Signature Page-38
<PAGE>   105

                                                                     SCHEDULE I

                          COMMITMENTS, ADDRESSES, ETC.

<Table>
<Caption>
Name and Address of Lender                                                  Amount of Commitment
--------------------------                                                  --------------------
<S>                                                                         <C>
The Chase Manhattan Bank                                                        $160,000,000
270 Park Avenue
New York, NY 10017
Attention:  Steve Wood
Telephone:  212-270-7056
Telecopier:  212-270-2519

Citibank, N.A.                                                                  $160,000,000
1200 Smith Street, Suite 2000
Houston, TX 77002
Attention:  Carol Rooney
Telephone:  713-654-3590
Telecopier:  713-654-2899

ABN AMRO Bank, N.V.                                                             $160,000,000
208 South LaSalle, Suite 1500
Chicago, IL 60604-1003
Attention:  Credit Administration
Telephone:  312-992-5110
Telecopier:  312-992-5111

Bank of America, N.A.                                                           $160,000,000
333 Clay Street, Suite 4550
Houston, TX 77002
Attention:  Michael J. Dillon
Telephone:  713-651-4903
Telecopier:  713-651-4904

Credit Suisse First Boston                                                      $160,000,000
11 Madison Avenue
New York, NY 10010
Attention:  James Moran
Telephone:  212-325-9176
Telecopier:  212-325-8615
</Table>

<PAGE>   106

<Table>
<Caption>
Name and Address of Lender                                                  Amount of Commitment
--------------------------                                                  --------------------
<S>                                                                         <C>
The Bank of Tokyo-Mitsubishi, Ltd Houston Agency                                 $84,000,000
1100 Louisiana Street, Suite 2800
Houston, TX 77002-5216
Attention:  John M. McIntyre
Telephone:  713-655-3845
Telecopier:  713-655-3855

BNP Paribas                                                                     $108,000,000
1200 Smith Street, Suite 3100
Houston, TX 77002
Attention:  John Roberts
Telephone:  713-659-4811
Telecopier:  713-659-6915

Commerzbank AG, New York and Grand Cayman Branches                               $84,000,000
1230 Peachtree Street, N.E., Suite 3500
Atlanta, GA 30309
Attention:  David Suttles/Lee Ward
Telephone:  404-888-6524/6526
Telecopier:  404-888-6539

Banca di Roma- Chicago Branch                                                    $45,000,000
225 West Washington, Suite 1200
Chicago, IL 60606
Attention:  Aurora Pensa
Telephone:  312-704-2630
Telecopier:  312-726-3058

Deutsche Bank AG New York and/or Cayman Islands Branches                        $108,000,000
31 West 52nd Street
New York, NY 10019
Attention:  Joel Makowsky
Telephone:  212-469-7896
Telecopier:  212-469-5711

Bayerische Hypo- und Vereinsbank AG, New York Branch                            $108,000,000
150 East 42nd Street
New York, NY 10017
Attention:  Yoram Danker/Steve Atwell
Telephone:  212-672-5446/5458
Telecopier:  212-672-5530
</Table>

<PAGE>   107

<Table>
<Caption>
Name and Address of Lender                                                  Amount of Commitment
--------------------------                                                  --------------------
<S>                                                                         <C>
KBC Bank N.V.                                                                   $ 45,000,000
125 West 55th Street
New York, NY 10019
Attention:  Christine Park
Telephone:  212-541-0731
Telecopier:  212-541-0784

National Westminster Bank plc                                                   $108,000,000
600 Travis Street, Suite 6070
Houston, TX 77002
Attention:  Patty Dundee/Matt Main
Telephone:  713-221-2423/2441
Telecopier:  713-221-2430

Societe Generale                                                                $108,000,000
1111 Bagby Street, Suite 2020
Houston, TX 77002
Attention:  Paul Cornell
Telephone:  713-759-6301
Telecopier:  713-650-0824

The Fuji Bank, Limited                                                          $108,000,000
1221 McKinney Street, Suite 4100
One Houston Center
Houston, TX 77010
Attention:  Lucy Walker
Telephone:  713-759-1800
Telecopier:  713-759-0717

Australia & New Zealand Banking Group Limited                                   $ 45,000,000
1177 Avenue of the Americas
New York, NY 10036
Attention:  Anna Arxer/David Giacalone
Telephone:  212-801-9795/9814
Telecopier:  212-801-9131/4814

The Bank of New York                                                            $108,000,000
One Wall Street, 19th Floor
New York, NY 10286
Attention:  Peter Keller
Telephone:  212-635-7861
Telecopier:  212-635-7923
</Table>

<PAGE>   108

<Table>
<Caption>
Name and Address of Lender                                                  Amount of Commitment
--------------------------                                                  --------------------
<S>                                                                         <C>
Bank of Nova Scotia                                                             $108,000,000
1100 Louisiana, Suite 3000
Houston, TX 77002
Attention:  Todd Mogil
Telephone:  713-759-3445
Telecopier:  713-752-2425

Bank One, NA (Chicago)                                                           $84,000,000
910 Travis, 6th Floor
Houston, TX 77002
Attention:  Susan Stiernberg/Karen Patterson/Helen Carr
Telephone:  713-751-3751/3863/3731
Telecopier:  713-751-3760/3982/3760

Barclays Bank                                                                    $84,000,000
222 Broadway, 12th Floor
New York, NY 10038
Attention:  Richard Williams/John
Sullivan/                       Nicholas Bell/Virginia
Corpus
Telephone:  212-412-7570/7605/4029/7512
Telecopier:  212-412-7585/2441/7585

Credit Agricole Indosuez                                                         $45,000,000
600 Travis, Suite 2340
Houston, TX 77002
Attention:  Brian Knezeak/Doug Whiddon
Telephone:  713-223-7001/7003
Telecopier:  713-223-7029

Credit Lyonnais New York Branch                                                 $108,000,000
1301 Avenue of the Americas
New York, NY 10019
Attention: Bindu Menon
Telephone: 212-261-7633
Telecopier: 917-849-5440

Royal Bank of Canada                                                             $45,000,000
2800 Post Oak Blvd.
Houston, TX 77056
Attention:  Tom Oberainger
Telephone:  713-403-5678
Telecopier:  713-403-5624
</Table>

<PAGE>   109

<Table>
<Caption>
Name and Address of Lender                                                  Amount of Commitment
--------------------------                                                  --------------------
<S>                                                                         <C>
IntesaBci-Los Angeles Foreign Branch                                             $45,000,000
One William Street
New York, NY 10004
Attention:  Charlie Dougherty
Telephone:  212-607-3656
Telecopier:  212-809-2124

CIBC Inc.                                                                        $45,000,000
1600 Smith Street, Suite 3100
Houston, TX 77002
Attention:  Mark Wolf
Telephone:  713-650-2588
Telecopier:  713-650-7670

Fleet National Bank                                                              $45,000,000
100 Federal Street, 01-08-02
Boston, MA 02110
Attention:  Jill Calabrese
Telephone:  617-434-9579
Telecopier:  617-434-3652

Lehman Commercial Paper Inc.                                                     $45,000,000
3 World Financial Center, 8th Floor
New York, NY 10285
Attention:  Nancy Wong
Telephone:  212-526-6535
Telecopier:  212-526-7365

Mellon Bank, N.A.                                                                $70,000,000
One Mellon Bank Center, Room 4530
Pittsburgh, PA 15258
Attention:  Roger Howard
Telephone:  412-234-5606
Telecopier:  412-236-1840

Standard Chartered Bank New York                                                 $45,000,000
7 World Trade Center
New York, NY 10048
Attention:  Jack Insinga
Telephone:  212-667-0264
Telecopier:  212-667-0780
</Table>

<PAGE>   110

<Table>
<Caption>
Name and Address of Lender                                                  Amount of Commitment
--------------------------                                                  --------------------
<S>                                                                         <C>
Sumitomo Mitsui Banking Corporation                                              $45,000,000
277 Park Avenue, 6th Floor
New York, NY 10172
Attention:  Bruce Meredith
Telephone:  212-224-4194
Telecopier:  212-224-4384

SunTrust Banks, Inc.                                                             $45,000,000
303 Peachtree Street, N.E., 3rd Floor
Atlanta, GA 30308
Attention:  John Fields, Jr./Joe McCreary
Telephone:  404-724-3667/404-532-0274
Telecopier:  404-827-6270

Toronto Dominion (Texas), Inc.                                                   $84,000,000
909 Fannin Street, Suite 1700
Houston, TX 77010
Attention:  Carolyn Faeth
Telephone:  713-427-8520
Telecopier:  713-951-9921

Westdeutsche Landesbank Girozentrale                                            $108,000,000
1990 Post Oak Blvd., Suite 1100
Houston, TX 77056
Attention:  Richard Newman
Telephone:  713-963-5203
Telecopier:  713-963-5308

Dresdner Bank AG New York and Grand Cayman Branches                              $45,000,000
75 Wall Street
New York, NY 10005
Attention:  Mike Mangan
Telephone:  212-429-2112
Telecopier:  212-429-2081

Banco Bilbao Vizcaya Argentaria                                                  $45,000,000
1345 Avenue of the Americas
New York, NY 10105
Attention:  Manuel Sanchez
Telephone:  212-728-1511
Telecopier:  212-333-2904
</Table>

<PAGE>   111
                                                                       EXHIBIT A

                                     FORM OF
                                      NOTE

                                                     $_______ New York, New York
                                                                   June 11, 2001

         FOR VALUE RECEIVED, the undersigned, ___________________, a ________
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of ________(the "Lender") at the office of The Chase Manhattan Bank,
located at 270 Park Avenue, New York, New York 10017, in lawful money of the
United States of America and in same day funds, on the second anniversary of the
Termination Date (or if the Lender is an Objecting Lender, the second
anniversary of the Commitment Expiration Date applicable to the Lender) the
principal amount of (a) ________DOLLARS ($_____), or, if less, (b) the aggregate
unpaid principal amount of all Revolving Credit Advances made by the Lender to
the Borrower pursuant to subsection 2.1 of the Credit Agreement, as hereinafter
defined. The Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time outstanding at
the rates and on the dates specified in the Credit Agreement.

         The holder of this Note is authorized to, and prior to any transfer
hereof shall, endorse on the schedules attached hereto and made a part hereof or
on a continuation thereof which shall be attached hereto and made a part hereof
the date, Type and amount of each Revolving Credit Advance made pursuant to
subsection 2.1 of the Credit Agreement and the date and amount of each payment
or prepayment of principal thereof, each continuation thereof, each conversion
of all or a portion thereof to another Type and, in the case of Eurodollar Rate
Advances, the length of each Interest Period with respect thereto. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement shall not affect
the obligations of the Borrower in respect of such Revolving Credit Advance.

         This Note (a) is one of the Notes referred to in the $3,000,000,000
364-Day Revolving Credit and Competitive Advance Facility Agreement, dated as of
June 11, 2001 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among El Paso Corporation, El Paso Natural Gas Company,
Tennessee Gas Pipeline Company, the Lender, the other banks and financial
institutions from time to time parties thereto, The Chase Manhattan Bank, as
Administrative Agent and CAF Advance Agent, ABN Amro, N.V. and Citibank, N.A.,
as Co-Documentation Agents, and Bank of America, N.A. and Credit Suisse First
Boston, as Co-Syndication Agents (b) is subject to the provisions of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement.

         Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.

                                      A-1
<PAGE>   112

         All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind except those
expressly required under the Credit Agreement.

         Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

         THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

                                   [BORROWER]

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

                                      A-2
<PAGE>   113

                                                              Schedule A to Note

           ADVANCES, CONVERSIONS AND REPAYMENTS OF BASE RATE ADVANCES

<Table>
<Caption>
                                                               Amount of Base Rate
                                                               Advances Converted
           Amount of       Amount         Amount of Principal         to             Unpaid Principal
           Base Rate    Converted to     of Base Rate Advances   Eurodollar Rate      Balance of Base       Notation
 Date      Advances   Base Rate Advances        Repaid             Advances            Rate Advances        Made By
--------  ----------  ------------------  ------------------  ------------------    ------------------  ------------------
<S>      <C>          <C>                 <C>                 <C>                   <C>                 <C>
</Table>

<PAGE>   114

                                                              Schedule B to Note

ADVANCES, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR RATE ADVANCES

<Table>
<Caption>
                                                                                         Amount of
                                                                                       Eurodollar Rate   Unpaid Principal
         Amount of      Amount Converted   Interest Period and   Amount of Principal  Advances Converted    Balance of
       Eurodollar Rate to Eurodollar Rate  Eurodollar Rate with  of Eurodollar Rate      to Base Rate     Eurodollar Rate  Notation
Date    Advances           Advances         Respect Thereto       Advances Repaid         Advances          Advances        Made By
---- ---------------    ----------------   --------------------  ------------------   ------------------  ---------------- ---------
<S>  <C>                <C>                <C>                   <C>                  <C>                 <C>              <C>

</Table>

<PAGE>   115

                                                                       EXHIBIT B

                                     FORM OF
                               NOTICE OF BORROWING

The Chase Manhattan Bank, as Administrative Agent
  for the Lenders parties
  to the Credit Agreement
  referred to below
270 Park Avenue
New York, New York  10017                                                 [Date]

Attention: El Paso Corporation

Ladies and Gentlemen:

                  The undersigned, EL PASO CORPORATION, refers to the
$3,000,000,000 364-Day Revolving Credit and Competitive Advance Facility
Agreement, dated as of June 11, 2001 (the "Credit Agreement", the terms defined
therein being used herein as therein defined), among the undersigned, El Paso
Natural Gas Company, Tennessee Gas Pipeline Company, certain Lenders parties
thereto, The Chase Manhattan Bank, as Administrative Agent and CAF Advance Agent
for said Lenders, ABN Amro, N.V. and Citibank, N.A., as Co-Documentation Agents,
and Bank of America, N.A. and Credit Suisse First Boston, as Co-Syndication
Agents, and hereby gives you notice, irrevocably, pursuant to Section 2.2 of the
Credit Agreement that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section
2.2(a) of the Credit Agreement:

                           (i) The Borrower for the Proposed Borrowing is
         ______________.

                           (ii) The Business Day of the Proposed Borrowing is
         ___________, 200_.

                           (iii) The Type of Advances comprising the Proposed
         Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].

                           (iv) The aggregate amount of the Proposed Borrowing
         is $__________.

                           (v) The Interest Period for each Eurodollar Rate
         Advance made as part of the Proposed Borrowing is [______ month[s]].

                           The undersigned hereby certifies that the following
         statements are true on the date hereof, and will be true on the date of
         the Proposed Borrowing, before and immediately after giving effect
         thereto and to the application of the proceed therefrom:

                                      B-1
<PAGE>   116

                  (A) each representation and warranty contained in Section 4.1
         is correct in all material respects as though made on and as of such
         date; and

                  (B) no event has occurred and is continuing, or would result
         from such Proposed Borrowing, which constitutes an Event of Default or
         Default.

                                              Very truly yours,

                                              EL PASO CORPORATION

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

                                      B-2
<PAGE>   117

                                                                       EXHIBIT C

                                     FORM OF
                               CAF ADVANCE REQUEST

                                                                          [Date]

The Chase Manhattan Bank, as CAF Advance Agent
270 Park Avenue
New York, New York  10017

                  Reference is made to the $3,000,000,000 364-Day Revolving
Credit and Competitive Advance Facility Agreement, dated as of June 11, 2001,
among El Paso Corporation, El Paso Natural Gas Company, Tennessee Gas Pipeline
Company, certain Lenders parties thereto, The Chase Manhattan Bank, as
Administrative Agent and CAF Advance Agent, ABN Amro, N.V. and Citibank, N.A.,
as Co-Documentation Agents, and Bank of America, N.A. and Credit Suisse First
Boston, as Co-Syndication Agents (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.

                  This is a [Fixed Rate] [LIBO Rate] CAF Advance Request*
pursuant to Section 2.5 of the Credit Agreement requesting quotes for the
following CAF Advances:

<Table>
<Caption>
                                                       Loan 1                  Loan 2                Loan 3
                                               ----------------------- ---------------------- ----------------------
<S>                                            <C>                     <C>                    <C>
 Aggregate Principal Amount                    $                        $                      $
                                                 ----------              ----------             ---------

 CAF Advance Date

 Maturity Date

 Interest Payment Dates
</Table>

                                    Very truly yours,

                                    [Borrower]

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

--------
*        Pursuant to the Credit Agreement, a CAF Advance Request may be
         transmitted in writing, by telecopy, or by telephone, immediately
         confirmed by telecopy. In any case, a CAF Advance Request shall contain
         the information specified in the second paragraph of this form.

                                      C-1
<PAGE>   118

                                                                       EXHIBIT D

                                     FORM OF
                                CAF ADVANCE OFFER

                                                                          [Date]

The Chase Manhattan Bank, as CAF Advance Agent
270 Park Avenue
New York, New York  10017

                  Reference is made to the $3,000,000,000 364-Day Revolving
Credit and Competitive Advance Facility Agreement, dated as of June 11, 2001,
among El Paso Corporation, El Paso Natural Gas Company, Tennessee Gas Pipeline
Company, certain Lenders parties thereto, The Chase Manhattan Bank, as
Administrative Agent and CAF Advance Agent, ABN Amro, N.V. and Citibank, N.A.,
as Co-Documentation Agents, and Bank of America, N.A. and Credit Suisse First
Boston, as Co-Syndication Agents (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.

                  In accordance with Section 2.5 of the Credit Agreement, the
undersigned Lender offers to make CAF Advances thereunder in the following
amounts with the following maturity dates:

<Table>
<S>                           <C>                        <C>
   CAF Advance Date:          __________, 200__          Aggregate Maximum Amount: $_________

   Maturity Date 1:                                      Maximum Amount: $__________
        __________, 200__                                $________ offered at _______*
                                                         $________ offered at _______*

   Maturity Date 2:                                      Maximum Amount: $__________
        __________, 200__                                $________ offered at _______*
                                                         $________ offered at _______*

   Maturity Date 3:                                      Maximum Amount: $__________
        __________, 200__                                $________ offered at _______*
                                                         $________ offered at _______*
</Table>

----------
*        Insert the interest rate offered for the specified CAF Advance. In the
         case of LIBO Rate CAF Advances, insert a margin bid. In the case of
         Fixed Rate CAF Advances, insert a fixed rate bid.

                                      D-1
<PAGE>   119

                                        Very truly yours,

                                        [NAME OF CAF ADVANCE LENDER]

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:
                                           Telephone No.:
                                           Telecopy No.:

                                      D-2
<PAGE>   120

                                                                       EXHIBIT E

                                     FORM OF
                            CAF ADVANCE CONFIRMATION

                                                                          [Date]

The Chase Manhattan Bank, as CAF Advance Agent
270 Park Avenue
New York, New York  10017

                  Reference is made to the $3,000,000,000 364-Day Revolving
Credit and Competitive Advance Facility Agreement, dated as of June 11, 2001,
among El Paso Corporation, El Paso Natural Gas Company, Tennessee Gas Pipeline
Company, certain Lenders parties thereto, The Chase Manhattan Bank, as
Administrative Agent and CAF Advance Agent, ABN Amro, N.V. and Citibank, N.A.,
as Co-Documentation Agents, and Bank of America, N.A. and Credit Suisse First
Boston, as Co-Syndication Agents (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.

                  In accordance with Section 2.5(d) of the Credit Agreement, the
undersigned accepts and confirms the offers by the CAF Advance Lender(s) to make
CAF Advances to the undersigned on _____, ___[date of CAF Advance Borrowing]
under Section 2.5(d) in the (respective) amount(s) set forth on the attached
list of CAF Advances offered.

                                   Very truly yours,

                                   [Borrower]

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

[The Borrower must attach CAF Advance offer list prepared by the CAF Advance
Agent with accepted amount entered by the Borrower to the right of each CAF
Advance offer].

                                      E-1
<PAGE>   121

                                                                       EXHIBIT F

                                     FORM OF
                            ASSIGNMENT AND ACCEPTANCE

                            Dated _____________, ____

                  Reference is made to the $3,000,000,000 364-Day Revolving
Credit and Competitive Advance Facility Agreement, dated as of June 11, 2001 (as
the same may be amended or otherwise modified from time to time, the "Credit
Agreement") among EL PASO CORPORATION, a Delaware corporation (the "Company"),
EL PASO NATURAL GAS COMPANY, a Delaware corporation, TENNESSEE GAS PIPELINE
COMPANY, a Delaware corporation, the Lenders (as defined in the Credit
Agreement), The Chase Manhattan Bank, as administrative agent (the
"Administrative Agent") and as CAF Advance Agent (the "CAF Advance Agent") for
the Lenders, ABN Amro, N.V. and Citibank, N.A., as Co-Documentation Agents (in
such capacity, the "Co-Documentation Agents"), and Bank of America, N.A. and
Credit Suisse First Boston, as Co-Syndication Agents (in such capacity, the
"Co-Syndication Agents"). Terms defined in the Credit Agreement are used herein
with the same meaning.

                  _____________ (the "Assignor") and ____________ (the
"Assignee") agree as follows:

                  1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, that interest in
and to all of the Assignor's rights and obligations under the Credit Agreement
as of the date hereof which represents the percentage interest specified on
Schedule 1 of all outstanding rights and obligations under the Credit Agreement,
including, without limitation, such interest in the Assignor's Commitment, the
Advances owing to the Assignor, and the Notes held by the Assignor. After giving
effect to such sale and assignment, the Assignee's Commitment and the amount of
the Advances owing to the Assignee will be as set forth in Section 2 of Schedule
1.

                  2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of each Borrower or the performance or observance by each Borrower of
any of its obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto; and (iv) attaches the Notes referred to in
paragraph 1 above and requests that the Administrative Agent exchange such Notes
for new Notes payable to the order of the Assignee in an amount equal to the
Commitment assumed by the Assignee pursuant hereto or new Notes payable to the
order of the Assignee in an amount equal to the Commitment assumed

                                      F-1
<PAGE>   122

by the Assignee pursuant hereto and the Assignor in an amount equal to the
Commitment retained by the Assignor under the Credit Agreement, respectively, as
specified on Schedule 1 hereto.

                  3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.1 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent and CAF Advance Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Administrative Agent and CAF Advance Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; (v) agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; [and] (vi) specifies as its address for notices the
address set forth beneath its name on the signature pages hereof [and (vii)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement and the Notes or such other
documents as are necessary to indicate that all such payments are subject to
such rates at a rate reduced by an applicable tax treaty]*.

                  4. Following the execution of this Assignment and Acceptance
by the Assignor and the Assignee, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent. The effective
date of this Assignment and Acceptance shall be the date of acceptance thereof
by the Administrative Agent, unless otherwise specified on Schedule 1 hereto
(the "Effective Date").

                  5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of Lender thereunder and (ii) the Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Credit Agreement.

                  6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall make
all payments under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to the Assignee. The Assignor
and Assignee shall make all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective Date directly between
themselves.

                  7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.

----------
* If the Assignee is organized under the laws of a jurisdiction outside the
United States.

                                      F-2
<PAGE>   123

                  IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective officers thereunto
duly authorized, as of the date first above written, such execution being made
on Schedule 1 hereto.

                                      F-3
<PAGE>   124

                                   Schedule 1
                                       to
                            Assignment and Acceptance

                                 June ___, 2001

Re:      $3,000,000,000 364-Day Revolving Credit and Competitive Advance
         Facility Agreement dated as of June 11, 2001 among The Chase Manhattan
         Bank, as Administrative Agent and CAF Advance Agent, ABN Amro Bank,
         N.V. and Citibank, N.A., as Co-Documentation Agents and Bank of
         America, N.A. and Credit Suisse First Boston, as Co-Syndication Agents.

Name of Assignor:

Name of Assignee:

Transfer Effective
Date of Assignment:  June ___, 2001

Assignor's Commitment Prior to Assignment: $

<Table>
<Caption>
      Percentage of Assignor's Interest         Assignee's Commitment
      ---------------------------------         ---------------------
<S>                                             <C>
                           %                                  $
</Table>

[Name of Assignor]                                        [Name of Assignee]

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

Consented to:

EL PASO CORPORATION                          THE CHASE MANHATTAN BANK, as
                                             Administrative Agent

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

<PAGE>   125

                                                                       EXHIBIT G

      FORM OF OPINION OF [ASSOCIATE GENERAL][SENIOR] COUNSEL OF THE COMPANY

                                                                   June 11, 2001

To Each of the Lenders, the Administrative Agent
  and the CAF Advance Agent
  Referred to Below
c/o The Chase Manhattan Bank
270 Park Avenue
New York, New York  10017

                             Re: El Paso Corporation

Ladies and Gentlemen:

                  This opinion is furnished to you pursuant to Section
3.2(b)(iii) of the $3,000,000,000 364-Day Revolving Credit and Competitive
Advance Facility Agreement, dated as of June 11, 2001 (the "Credit Agreement"),
among El Paso Corporation (the "Company"), El Paso Natural Gas Company
("EPNGC"), Tennessee Gas Pipeline Company ("Tennessee") (Tennessee, together
with the Company and EPNGC, the "Borrowers"), the banks and other financial
institutions from time to time party thereto (each a "Lender", and together the
"Lenders"), The Chase Manhattan Bank, as Administrative Agent (in such capacity,
the "Administrative Agent") and as CAF Advance Agent (in such capacity, the "CAF
Advance Agent") for the Lenders, ABN Amro, N.V. and Citibank, N.A., as
Co-Documentation Agents (in such capacity, the "Co-Documentation Agents"), and
Bank of America, N.A. and Credit Suisse First Boston, as Co-Syndication Agents
(in such capacity, the "Co-Syndication Agents"). Unless the context otherwise
requires, all capitalized terms used herein without definition shall have the
meanings ascribed to them in the Credit Agreement.

                  I am [Associate General] [Senior] Counsel of the Company, and
I, or attorneys over whom I exercise supervision, have acted as counsel for the
Borrowers in connection with the preparation, execution and delivery of the
Credit Agreement. In that connection, I or such attorneys have examined:

                  (1) the Credit Agreement, executed by the parties thereto;

                  (2) the Notes, executed by the Borrowers; and

                  (3) the other documents furnished by the Borrowers pursuant to
Sections 3.1 and 3.2 of the Credit Agreement.

                                      G-1
<PAGE>   126

                  I, or attorneys over whom I exercise supervision, have also
examined the originals, or copies certified to our satisfaction, of the
agreements, instruments and other documents, and all of the orders, writs,
judgments, awards, injunctions and decrees, which affect or purport to affect
the Borrowers' ability to perform their respective obligations under the Credit
Agreement or the Notes (collectively referred to herein as the "Documents"). In
addition, I, or attorneys over whom I exercise supervision, have examined the
originals, or copies certified to our satisfaction, of such other corporate
records of the Borrowers, certificates of public officials and of officers of
the Borrowers, and agreements, instruments and other documents, as I have deemed
necessary as a basis for the opinions hereinafter expressed. In all such
examinations, I, or attorneys over whom I exercise supervision, have assumed the
legal capacity of all natural persons executing documents, the genuineness of
all signatures on original or certified, conformed or reproduction copies of
documents of all parties (other than, with respect to the Documents, the
Borrowers), the authenticity of original and certified documents and the
conformity to original or certified copies of all copies submitted to such
attorneys or me as conformed or reproduction copies. As to various questions of
fact relevant to the opinions expressed herein, I have relied upon, and assume
the accuracy of, representations and warranties contained in the Credit
Agreement and certificates and oral or written statements and other information
of or from public officials, officers and/or representatives of the Borrowers
and others.

                  I have assumed that the parties to the Documents other than
the Borrowers have the power to enter into and perform such documents and that
such documents have been duly authorized, executed and delivered by, and
constitute legal, valid and binding obligations of, such parties.

                  The opinions expressed below are limited to the federal laws
of the United States and, to the extent relevant hereto, the General Corporation
Law of the State of Delaware, as currently in effect. I assume no obligation to
supplement this opinion if any applicable laws change after the date hereof or
if I become aware of any facts that might change the opinions expressed herein
after the date hereof.

                  Based on the foregoing and upon such investigation as we have
deemed necessary, and subject to the limitations, qualifications and assumptions
set forth herein, I am of the following opinion:

                  1. Each Borrower (i) is a corporation duly incorporated and
         existing in good standing under the laws of the State of Delaware, and
         (ii) possesses all the corporate powers and all other authorizations
         and licenses necessary to engage in its business and operations as now
         conducted, the failure to obtain or maintain which would have a
         Material Adverse Effect.

                  2. The execution, delivery and performance by each Borrower of
         the Documents to which it is a party are within such Borrower's
         corporate powers and have been duly authorized by all necessary
         corporate action in respect of or by such Borrower, and do not
         contravene (i) such Borrower's charter or by-laws, each as amended to
         date, (ii) any federal law, rule or regulation applicable to such
         Borrower (excluding provisions of federal law expressly referred to in
         and covered by the opinion of Jones, Day, Reavis & Pogue delivered to
         you in connection with the transactions contemplated hereby) or any
         provision of the General Corporation Law of the State of Delaware
         applicable to such

                                      G-2
<PAGE>   127

         Borrower, or (iii) any contractual restriction binding on or affecting
         such Borrower. The Documents to which it is a party have been duly
         executed and delivered on behalf of each Borrower.

                  3. No authorization or approval or other action by, and no
         notice to or filing with, any federal governmental authority or
         regulatory body (including, without limitation, the FERC) is required
         for the due execution, delivery and performance by any Borrower of the
         Documents to which it is a party, except those required in the ordinary
         course of business in connection with the performance by each Borrower
         of its obligations under certain covenants and warranties contained in
         the Documents to which it is a party.

                  4. To the best of my knowledge, there is no action, suit or
         proceeding pending or overtly threatened against or involving the
         Company or any of the Principal Subsidiaries which, in my reasonable
         judgment (taking into account the exhaustion of all appeals), would
         have a material adverse effect upon the consolidated financial
         condition of the Company and its consolidated Subsidiaries taken as a
         whole, or which purports to affect the legality, validity, binding
         effect or enforceability of any Document.

                  These opinions are given as of the date hereof and are solely
for your benefit in connection with the transactions contemplated by the Credit
Agreement. These opinions may not be relied upon by you for any other purpose or
relied upon by any other person for any purpose without my prior written
consent.

                                             Very truly yours,

                                      G-3
<PAGE>   128

                                                                       EXHIBIT H

               FORM OF OPINION OF NEW YORK COUNSEL TO THE COMPANY

                                  June 11, 2001

To Each of the Lenders, the Administrative Agent, the CAF Advance Agent, the
Co-Documentation Agents and the Co-Syndication Agents Referred to Below
c/o The Chase Manhattan Bank
270 Park Avenue, 10th Floor
New York, New York 10017

         Re: $3,000,000,000 364-Day Revolving Credit
             and Competitive Advance Facility Agreement
             dated as of August 4, 2000

Dear Ladies and Gentlemen:

                  We have acted as special New York counsel for El Paso
Corporation, a Delaware corporation (the "Company"), El Paso Natural Gas
Company, a Delaware corporation ("EPNGC") and Tennessee Gas Pipeline Company, a
Delaware corporation ("Tennessee") (Tennessee together with the Company and
EPNGC, the "Borrowers"), in connection with the $3,000,000,000 364-Day Revolving
Credit and Competitive Advance Facility Agreement, dated as of June 11, 2001
(the "Financing Agreement"), among the Company, EPNGC, Tennessee, the banks and
other financial institutions from time to time party thereto (each a "Lender",
and together the "Lenders"), The Chase Manhattan Bank, as administrative agent
(in such capacity, the "Administrative Agent") and as CAF Advance Agent (in such
capacity, the "CAF Advance Agent") for the Lenders, ABN Amro, N.V. and Citibank,
N.A., as Co-Documentation Agents (in such capacity, the "Co-Documentation
Agents"), and Bank of America, N.A. and Credit Suisse First Boston, as
Co-Syndication Agents (in such capacity, the "Co-Syndication Agents"). This
opinion is delivered to you pursuant to Section 3.2(b)(iv) of the Financing
Agreement. Capitalized terms used herein and not otherwise defined have the
meanings assigned such terms in the Financing Agreement. With your permission,
all assumptions and statements of reliance herein have been made without any
independent investigation or verification on our part except to the extent
otherwise expressly stated, and we express no opinion with respect to the
subject matter or accuracy of the assumptions or items upon which we have
relied.

                  In connection with the opinions expressed herein, we have
examined such documents, records and matters of law as we have deemed necessary
for the purposes of this opinion. We have examined, among other documents, the
following:

                  (a)      An executed copy of the Financing Agreement; and

                                      H-1
<PAGE>   129

                  (b)      An executed copy of each of the Notes.

The documents referred to in items (a) and (b) above are referred to herein
collectively as the "Documents."

                  In all such examinations, we have assumed the legal capacity
of all natural persons executing documents, the genuineness of all signatures,
the authenticity of original and certified documents and the conformity to
original or certified copies of all copies submitted to us as conformed or
reproduction copies. As to various questions of fact relevant to the opinions
expressed herein, we have relied upon, and assume the accuracy of,
representations and warranties contained in the Documents and certificates and
oral or written statements and other information of or from representatives of
the Borrowers and others and assume compliance on the part of all parties to the
Documents with their covenants and agreements contained therein. With respect to
the opinions expressed in paragraph (a) below, our opinions are limited (x) to
our actual knowledge, if any, of the Borrowers' specially regulated business
activities and properties based solely upon an officer's certificate in respect
of such matters and without any independent investigation or verification on our
part and (y) to our review of only those laws and regulations that, in our
experience, are normally applicable to transactions of the type contemplated by
the Documents.

                  To the extent it may be relevant to the opinions expressed
herein, we have assumed that the parties to the Documents have the power to
enter into and perform such documents and to consummate the transactions
contemplated thereby and that such documents have been duly authorized, executed
and delivered by, and, except as set forth in paragraph (b) with respect to the
Borrowers, constitute legal, valid and binding obligations of, such parties.

                  Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, we are of the opinion that:

                  (a) The execution and delivery to the Administrative Agent,
the CAF Advance Agent, the Co-Documentation Agents, the Co-Syndication Agents
and the Lenders by each Borrower of the Documents to which it is a party and the
performance by each Borrower of its obligations thereunder (i) do not require
under present law any filing or registration by such Borrower with, or approval
or consent to such Borrower of, any governmental agency or authority of the
State of New York that has not been made or obtained except those required in
the ordinary course of business in connection with the performance by such
Borrower of its obligations under certain covenants and warranties contained in
the Documents to which it is a party and (ii) do not violate any present law, or
present regulation of any governmental agency or authority, of the State of New
York applicable to such Borrower or its property.

                  (b) The Documents to which it is a party constitute legal,
valid and binding obligations of each Borrower enforceable against such Borrower
in accordance with their respective terms.

                  (c) The borrowings by each Borrower under the Financing
Agreement and the applications of the proceeds thereof as provided in the
Financing Agreement will not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.

                  The opinions set forth above are subject to the following
qualifications:

                                      H-2
<PAGE>   130

         (A)      We express no opinion as to:

                  (i) the validity, binding effect or enforceability (a) of any
         provision of the Documents relating to indemnification, contribution or
         exculpation in connection with violations of any securities laws or
         statutory duties or public policy, or in connection with willful,
         reckless or criminal acts or gross negligence of the indemnified or
         exculpated party or the party receiving contribution; or (b) of any
         provision of any of the Documents relating to exculpation of any party
         in connection with its own negligence that a court would determine in
         the circumstances under applicable law to be unfair or insufficiently
         explicit;

                  (ii) the validity, binding effect or enforceability of (a) any
         purported waiver, release, variation, disclaimer, consent or other
         agreement to similar effect (all of the foregoing, collectively, a
         "Waiver") by the Borrowers under the Documents to the extent limited by
         provisions of applicable law (including judicial decisions), or to the
         extent that such a Waiver applies to a right, claim, duty, defense or
         ground for discharge otherwise existing or occurring as a matter of law
         (including judicial decisions), except to the extent that such a Waiver
         is effective under and is not prohibited by or void or invalid under
         provisions of applicable law (including judicial decisions), (b) any
         provision of any Document relating to choice of governing law to the
         extent that the validity, binding effect or enforceability of any such
         provision is to be determined by any court other than a court of the
         State of New York or (c) any provision of any Document relating to
         forum selection to the extent the forum is a federal court;

                  (iii) the enforceability of any provision in the Documents
         specifying that provisions thereof may be waived only in writing, to
         the extent that an oral agreement or an implied agreement by trade
         practice or course of conduct has been created that modifies any
         provision of the Documents;

                  (iv) the effect of any law of any jurisdiction other than the
         State of New York wherein the Administrative Agent, the CAF Advance
         Agent, the Co-Documentation Agents, the Co-Syndication Agents or any
         Lender may be located or wherein enforcement of any document referred
         to above may be sought that limits the rates of interest legally
         chargeable or collectible; and

                  (v) any approval, consent or authorization of the Federal
         Energy Regulatory Commission or any other United States federal agency
         or authority needed in connection with the execution, delivery and
         performance by any Borrower of the Documents to which it is a party,
         the consummation of the transactions contemplated thereby and
         compliance with the terms and conditions thereof.

         (B) Our opinions above are subject to (i) applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, voidable preference, moratorium
or similar laws, and related judicial doctrines, from time to time in effect
affecting creditors' rights and remedies generally, (ii) general principles of
equity (including, without limitation, standards of materiality, good faith,
fair dealing and reasonableness, equitable defenses and limits on the
availability of equitable remedies), whether such principles are considered in a
proceeding at law or in equity and (iii) the qualification that certain other
provisions of the Documents may be unenforceable in whole or in part under the
laws (including judicial decisions) of the State of New York or the

                                      H-3
<PAGE>   131

United States of America, but the inclusion of such provisions does not affect
the validity as against any Borrower of the Documents to which it is a party,
taken as a whole, and the Documents contain adequate provisions for enforcing
payment of the obligations governed thereby, subject to the other qualifications
contained in this letter.

         (C) Our opinions as to enforceability are subject to the effect of
generally applicable rules of law that:

                  (i) limit the availability of a remedy under certain
         circumstances when another remedy has been elected; and

                  (ii) may, where less than all of a contract may be
         unenforceable, limit the enforceability of the balance of the contract
         to circumstances in which the unenforceable portion is not an essential
         part of the agreed exchange; and

                  (iii) govern and afford judicial discretion regarding the
         determination of damages and entitlement to attorneys' fees and other
         costs.

         (D) For the purposes of the opinion set forth in paragraph (c) above,
we have assumed that (i) none of the Administrative Agent, the CAF Advance
Agent, the Co-Documentation Agents, the Co-Syndication Agents or any of the
Lenders has or will have the benefit of any agreement or arrangement (excluding
the Documents) pursuant to which any Advances are directly or indirectly secured
by Margin Stock, (ii) none of the Administrative Agent, the CAF Advance Agent,
the Co-Documentation Agents, the Co-Syndication Agents, any of the Lenders or
any of their respective affiliates has extended or will extend any other credit
to any of the Borrowers directly or indirectly secured by Margin Stock and (iii)
none of the Administrative Agent, the CAF Advance Agent, the Co-Documentation
Agents and the Co-Syndication Agents or any of the Lenders has relied or will
rely upon any Margin Stock as collateral in extending or maintaining any
Advances pursuant to the Financing Agreement.

         (E) For purposes of our opinions above insofar as they relate to the
Borrowers, we have assumed that (i) each Borrower is a corporation validly
existing in good standing in its jurisdiction of incorporation, has all
requisite power and authority, and has obtained all requisite corporate,
shareholder, third party and governmental authorizations, consents and
approvals, and made all requisite filings and registrations, necessary to
execute, deliver and perform the Documents to which it is a party (except to the
extent noted in paragraph (a) above), and that such execution, delivery and
performance will not violate or conflict with any law, rule, regulation, order,
decree, judgment, instrument or agreement binding upon or applicable to such
Borrower or its properties (except to the extent noted in paragraph (a) above),
and (ii) the Documents to which each Borrower is a party have been duly executed
and delivered by such Borrower.

                  The opinions expressed herein are limited to the federal laws
of the United States of America (in the case of the matters covered in paragraph
(c) above) and the laws of the State of New York, as currently in effect, except
that we express no opinion with respect to laws, rules or regulations of the
State of New York, or of any governmental agency or authority thereof,
applicable to companies engaged in the gathering, processing, transmission,
distribution or marketing of natural gas or other hydrocarbon derivatives or
power generation or the generation,

                                      H-4
<PAGE>   132

transmission, distribution or marketing of electricity, or as to filings,
registrations, approvals or consents under or by such laws, rules or
regulations.

                  We express no opinion as to the compliance or noncompliance,
or the effect of the compliance or noncompliance, of each of the addressees with
any state or federal laws or regulations applicable to each of them by reason of
their status as or affiliation with a federally insured depository institution.

                  The opinions expressed herein are solely for the benefit of
the Administrative Agent, CAF Advance Agent, the Co-Documentation Agents, the
Co-Syndication Agents and the Lenders and may not be relied on in any manner or
for any purpose by any other person or entity.

                                           Very truly yours,

                                           JONES, DAY, REAVIS & POGUE

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

                                       H-5
<PAGE>   133

                                                                       EXHIBIT I

                          [LETTERHEAD OF PROCESS AGENT]

                                                                          [DATE]

To each of the Lenders parties
  to the Credit Agreement (as
  defined and referred to
  below) and to The Chase Manhattan Bank
  as Administrative Agent and
  CAF Advance Agent for said Lenders
c/o The Chase Manhattan Bank
270 Park Avenue
New York, New York  10017

To El Paso Corporation
1001 Louisiana Street
Houston, Texas  77002

 El Paso Corporation/El Paso Natural Gas Company/Tennessee Gas Pipeline Company

Gentlemen:

                  Reference is made to that certain $3,000,000,000 364-Day
Revolving Credit and Competitive Advance Facility Agreement, dated as of June
11, 2001 (said Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit Agreement", the terms
defined therein being used herein with the same meaning) among El Paso
Corporation (the "Company"), El Paso Natural Gas Company ("EPNGC"), Tennessee
Gas Pipeline Company ("Tennessee") (Tennessee, together with the Company and
EPNGC, the "Borrowers") , certain banks and other financial institutions from
time to time party thereto as Lenders thereunder (the "Lenders"), The Chase
Manhattan Bank, as Administrative Agent and CAF Advance Agent (in such
capacities, the "Administrative Agent" and the "CAF Advance Agent") for the
Lenders, ABN Amro, N.V. and Citibank, N.A., as Co-Documentation Agents, and Bank
of America, N.A. and Credit Suisse First Boston, as Co-Syndication Agents.

                  Pursuant to Section 9.9(a) of the Credit Agreement each of the
Borrowers has appointed the undersigned (with an office on the date hereof at
1633 Broadway, New York, New York 10019) as Process Agent to receive on behalf
of such Borrower and its property service of copies of the summons and complaint
and any other process which may be served by the Administrative Agent, the CAF
Advance Agent, any Lender or the holder of any Note in any action or proceeding
by the Administrative Agent, the CAF Advance Agent, any Lender or the holder of
any Note in any New York State or Federal court sitting in New York City in
respect of, but only in respect of, any claims or causes of action arising out
of or relating to the Credit Agreement and the Notes issued pursuant thereto.

                                      I-1
<PAGE>   134

                  The undersigned hereby accepts such appointment as Process
Agent and agrees with each of you that (i) the undersigned will not terminate
the undersigned's agency as such Process Agent prior to ______ , 200_ (and
hereby acknowledges that the undersigned has been paid in full by the Borrower
for its services as Process Agent through such date), (ii) the undersigned will
maintain an office in New York City through such date and will give the
Administrative Agent prompt notice of any change of address of the undersigned,
(iii) the undersigned will perform its duties as Process Agent in accordance
with Section 9.9(a) of the Credit Agreement and (iv) the undersigned will
forward forthwith to the Borrower at its address specified below copies of any
summons, complaint and other process which the undersigned receives in
connection with its appointment as Process Agent.

                  This acceptance and agreement shall be binding upon the
undersigned and all successors of the undersigned.

                                             Very truly yours,

                                             CT CORPORATION SYSTEM

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

Address of the Borrower:

[Address]

                                       I-2
<PAGE>   135

                                                                       EXHIBIT J

                                     FORM OF
                                JOINDER AGREEMENT

                  Reference is made to the $3,000,000,000 364-Day Revolving
Credit and CAF Advance Facility Agreement, dated as of June 11, 2001 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein being used herein as therein defined), among
El Paso Corporation, El Paso Natural Gas Company, Tennessee Gas Pipeline
Company, certain banks and other financial institutions from time to time party
thereto, The Chase Manhattan Bank, as Administrative Agent and CAF Advance
Agent, ABN Amro, N.V. and Citibank, N.A., as Co-Documentation Agents, and Bank
of America, N.A. and Credit Suisse First Boston, as Co-Syndication Agents.

                  The undersigned hereby acknowledges that it has received and
reviewed a copy (in execution form) of the Credit Agreement, and agrees to:

                  (a)      join the Credit Agreement as a Borrower party
                           thereto;

                  (b)      be bound by all covenants, agreements and
                           acknowledgments attributable to a Borrower in the
                           Credit Agreement and any Note to which it is a party;
                           and

                  (a)      perform all obligations required of it by the Credit
                           Agreement and any Note to which it is a party.

                  The undersigned hereby represents and warrants that the
representations and warranties with respect to it contained in, or made or
deemed made by it in, Article IV of the Credit Agreement are true and correct on
the date hereof.

                  THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  IN WITNESS WHEREOF, the undersigned has caused this Joinder
Agreement to be duly executed and delivered in New York, New York by its proper
and duly authorized officer as of this day of ______, __.

                                   [Borrower]

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

                                       J-1
<PAGE>   136

ACKNOWLEDGED AND AGREED TO:

[EL PASO CORPORATION]

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

                                       J-2
<PAGE>   137

                                                                       EXHIBIT K

                     FORM OF OPINION OF [ASSOCIATE GENERAL]
                         [SENIOR] COUNSEL OF THE COMPANY

                  (a) Each of the Company and the Borrowing Subsidiaries (i) is
         a corporation duly incorporated and existing in good standing under the
         laws of the jurisdiction of its organization, and (ii) possesses all
         the corporate powers and all other authorizations and licenses
         necessary to engage in its business and operations as now conducted,
         the failure to obtain or maintain which would have a Material Adverse
         Effect.

                  (a) The execution and delivery by the Company and the
         Borrowing Subsidiary of the Joinder Agreement and by the Borrowing
         Subsidiary of the Notes made by it and the performance by the Borrowing
         Subsidiary of its obligations as a "Borrower" under the Credit
         Agreement and the Notes made by it are within such corporation's
         corporate powers and have been duly authorized by all necessary
         corporate action in respect of or by each of the Company and the
         Borrowing Subsidiary (as applicable), and do not contravene (i) the
         Company's or the Borrowing Subsidiary's charter or by-laws, each as
         amended to date, (ii) any federal law, rule or regulation applicable to
         the Company or the Borrowing Subsidiary (excluding provisions of
         federal law expressly referred to in and covered by the opinion of [New
         York Counsel] delivered to you in connection with the transactions
         contemplated hereby) or any provision of the General Corporation Law of
         the State of Delaware applicable to such corporation, or (iii) any
         contractual restriction binding on or affecting the Company or the
         Borrowing Subsidiary. The Joinder Agreement has been duly executed and
         delivered on behalf of the Company and the Borrowing Subsidiary and the
         Notes made by the Borrowing Subsidiary have been duly executed and
         delivered on behalf of the Borrowing Subsidiary.

                  (b) No authorization or approval or other action by, and no
         notice to or filing with, any federal governmental authority or
         regulatory body (including, without limitation, the FERC) is required
         for (i) the due execution and delivery by the Company or the Borrowing
         Subsidiary of the Joinder Agreement, (ii) the performance by the
         Borrowing Subsidiary of its obligations as a "Borrower" under the
         Credit Agreement or (iii) the execution, delivery and performance by
         the Borrowing Subsidiary of the Notes made by it, except those required
         in the ordinary course of business in connection with the performance
         by the Company or the Borrowing Subsidiary of its obligations under
         certain covenants and warranties contained in the Joinder Agreement,
         the Credit Agreement and the Notes and those which have been obtained
         and are in full force and effect.

                  (c) To the best of my knowledge, there is no action, suit or
         proceeding pending or overtly threatened against or involving the
         Company or any of the Principal Subsidiaries which, in my reasonable
         judgment (taking into account the exhaustion of all appeals), would
         have a material adverse effect upon the consolidated financial
         condition of the Company and its consolidated Subsidiaries taken as a
         whole, or which purports to

                                      K-1
<PAGE>   138

         affect the legality, validity, binding effect or enforceability of the
         Joinder Agreement, the Credit Agreement or the Notes.

                                      K-2
<PAGE>   139

                                                                       EXHIBIT L

                           FORM OF OPINION OF NEW YORK
                             COUNSEL TO THE COMPANY

                  (a) The execution and delivery to the Administrative Agent,
         the CAF Advance Agent, the Co-Documentation Agents, the Co-Syndication
         Agents and the Lenders by the Company and the Borrowing Subsidiary of
         the Joinder Agreement and by the Borrowing Subsidiary of the Notes made
         by it and the performance by the Borrowing Subsidiary of its
         obligations as a "Borrower" under the Credit Agreement and the Notes
         made by it (i) do not require under present law any filing or
         registration by the Company or the Borrowing Subsidiary with, or
         approval or consent to the Company or the Borrowing Subsidiary of, any
         governmental agency or authority of the State of New York that has not
         been made or obtained, except those, if any, required in the ordinary
         course of business in connection with the performance by the Company or
         the Borrowing Subsidiary of their respective obligations under certain
         covenants and warranties contained in the Joinder Agreement, the Credit
         Agreement and the Notes and (ii) do not violate any present law, or
         present regulation of any governmental agency or authority, of the
         State of New York applicable to the Company or the Borrowing Subsidiary
         or its respective property.

                  (b) The Joinder Agreement, the Credit Agreement and the Notes
         (as applicable) constitute the legal, valid and binding obligations of
         each of the Company and the Borrowing Subsidiary enforceable against
         each of the Company and the Borrowing Subsidiary in accordance with
         their respective terms.

                  (c) The borrowings by the Borrowing Subsidiary under the
         Credit Agreement and the applications of the proceeds thereof as
         provided in the Credit Agreement will not violate Regulation T, U or X
         of the Board of Governors of the Federal Reserve System.

                                      L-1
<PAGE>   140

                                                                       EXHIBIT M

                                     FORM OF
                                EXTENSION REQUEST

                                                                          [Date]

The Chase Manhattan Bank, as Administrative Agent
270 Park Avenue
New York, New York  10017
Attention:  Jackie Reid

Gentlemen:

                  Reference is made to the $3,000,000,000 364-Day Revolving
Credit and Competitive Advance Facility Agreement, dated as of June 11, 2001,
among the undersigned, El Paso Natural Gas Company, Tennessee Gas Pipeline
Company, certain Lenders parties thereto, The Chase Manhattan Bank, as
Administrative Agent and CAF Advance Agent, ABN Amro, N.V. and Citibank, N.A.,
as Co-Documentation Agents, and Bank of America, N.A. and Credit Suisse First
Boston, as Co-Syndication Agents (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.

                  The undersigned hereby represents and warrants that no Event
of Default has occurred or is continuing.

                  This is an Extension Request pursuant to Section 2.23 of the
Credit Agreement requesting an extension of the Stated Termination Date to
[INSERT REQUESTED TERMINATION DATE]. Please transmit a copy of this Extension
Request to each of the Lenders.

                                      EL PASO CORPORATION

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

                                      M-1<PAGE>   1
                                                                    EXHIBIT 10.1
                           LOAN AND SECURITY AGREEMENT

         This Loan and Security Agreement (this "Agreement") is made and entered
into as of this 2nd day of April, 2001 (hereinafter, the "Closing Date"), by and
among CIERA NETWORK SYSTEMS, INC., a Texas corporation located at 2630
Fountainview, Suite 300, Houston, Texas 77057 (as such, together with its
successors and permitted assigns, "Borrower"), CCC GLOBALCOM CORPORATION, a
Nevada corporation located at 16350 Park Ten Place, Suite 241, Houston, Texas
77084 (as such, together with its successor and permitted assigns, "Guarantor"),
and RFC CAPITAL CORPORATION, a Delaware corporation, located at 130 East
Chestnut Street, Suite 400, Columbus, Ohio 43215 (as such, together with its
successors and assigns, "Lender").

                                   WITNESSETH

         WHEREAS, Lender desires to make one or more loans to Borrowers to be
used for working capital and for such other purposes as Borrowers and Lender
mutually agree in writing, pursuant to the terms and provisions specified herein
and as evidenced by that certain Promissory Note dated as of even date herewith
(the "Promissory Note").

         WHEREAS, Borrowers acknowledge that each derives material benefit and
valuable consideration from the Promissory Note.

         WHEREAS, as security for the performance of Borrowers' obligations
hereunder and under the Promissory Note, each Borrower shall grant to Lender a
security interest in certain of such Borrower's assets as more fully described
herein.

         NOW, THEREFORE, in order to secure performance of Borrower's
obligations hereunder and under the Promissory Note, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, agree as follows:

         1. Recitals; Definitions. The recitals set forth above are hereby
incorporated as terms and provisions hereof. As used in this Agreement:

         "Affiliate" means any individual, partnership, corporation, or other
Person which, directly or indirectly, is in control of, is controlled by, or is
under common control with either Borrower, or is a family member related by
birth or marriage.

         "Attrition Rate" means the combined monthly decrease in the number of
customers of Ciera Post-Paid and the Equalnet Business, expressed as a
percentage, and shall be computed according to the following formula:

               C(MB1) - C(ME1) + C(MB2) - C(ME2) + C(MB3) - C(ME3)
               ---------------   ---------------   ---------------
                   C(MB1)            C(MB2)            C(MB3)
--------------------------------------------------------------------------------
                                        3

         where C(MB1) means the number of Ciera Post-Paid's and Equalnet
Business' customers as of the first business day of the calendar month in which
the Attrition Rate is determined (the "Determination Month"), C(ME1) means the
number of Ciera Post-Paid's and Equalnet Business' customers as of the last
business day of the Determination Month who were also Ciera Post-Paid's and
Equalnet Business' customers as of the first business day of the Determination
Month, C(MB2) means the number of Ciera Post-Paid's and Equalnet Business'
customers as of the first business day of the first calendar month immediately
preceding the

<PAGE>   2
Determination Month, C(ME2) means the number of Ciera Post-Paid's and Equalnet
Business' customers as of the last business day of the first calendar month
immediately preceding the Determination Month who were also Ciera Post-Paid's
and Equalnet Business' customers as of the first business day of the first
calendar month immediately preceding the Determination Month, C(MB3) means the
number of Ciera Post-Paid's and Equalnet Business' customers as of the first
business day of the second calendar month immediately preceding the
Determination Month, and C(ME3) means the number of Ciera Post-Paid's and
Equalnet Business' customers as of the last business day of the second calendar
month immediately preceding the Determination Month who were also Ciera
Post-Paid's and Equalnet Business' customers as of the first business day of the
second calendar month immediately preceding the Determination Month.

         "Availability Formula" means, unless otherwise modified by Lender, an
amount equal to the sum of:

                           (i) the product of (x) the Equalnet Revenue Multiple
times (y) the lesser of (1) the average combined revenues of the Equalnet
Business for the rolling three month period immediately preceding the date of
determination, or (2) the combined revenues of the Equalnet Business for the
month immediately preceding the date of determination; plus

                           (ii) the product of (x) the Ciera Post-Paid Revenue
Multiple times (y) the lesser of (1) the average Cash Collections of Ciera
Post-Paid for the rolling three month period immediately preceding the date of
determination, or (2) the Cash Collections of Ciera Post-Paid for the month
immediately preceding the date of determination; plus

                           (iii) the product of (x) the Ciera Pre-Paid Revenue
Multiple times (y) the lesser of (1) the average Cash Collections of Ciera
Pre-Paid for the rolling three month period immediately preceding the date of
determination, or (2) the Cash Collections of Ciera Pre-Paid for the month
immediately preceding the date of determination;

provided, however, if the Ciera Pre-Paid Net Growth Rate is less than 1.00%, the
amount calculated in (iii) above shall be excluded from the Availability
Formula.

         "Cash Collections" means all cash, monies, receipts, proceeds and the
like received in the Lockbox Account that represent the collection of Borrower's
accounts receivable received within 90 days of the invoice date.

         "Ciera Post-Paid" shall mean Ciera Post-Paid Local Services.

         "Ciera Post-Paid Revenue Multiple", for the purpose of determining the
Availability Formula, shall be determined as follows:

                           (i) to the extent Ciera Post-Paid's average Cash
Collections for the rolling three month period immediately preceding the date of
determination is greater than or equal to eighty-five percent (85%), the Ciera
Post-Paid Revenue Multiple shall be 3.0;

                           (ii) to the extent Ciera Post-Paid's average Cash
Collections for the rolling three month period immediately preceding the date of
determination is greater than or equal to seventy-five percent (75%), but less
than eighty-five percent (85%), the Ciera Post-Paid Revenue Multiple shall be
2.5;

                           (iii) to the extent Ciera Post-Paid's average Cash
Collections for the rolling three month period immediately preceding the date of
determination is less than seventy-five percent (75%), the Ciera Post-Paid
Revenue Multiple shall be 2.0.

                                       2

<PAGE>   3

         "Ciera Pre-Paid" shall mean Ciera Pre-Paid Local Services.

         "Ciera Pre-Paid Net Growth Rate" means the monthly increase in the
number of customers of Ciera Pre-Paid, expressed as a percentage, and shall be
computed according to the following formula:

               C(ME1) - C(MB1) + C(ME2) - C(MB2) + C(ME3) - C(MB3)
               ---------------   ---------------   ---------------
                   C(MB1)            C(MB2)            C(MB3)
--------------------------------------------------------------------------------
                                        3

         where C(MB1) means the number of Ciera Pre-Paid's customers as of the
first business day of the calendar month in which the Ciera Pre-Paid Net Growth
Rate is determined (the "Ciera Pre-Paid Net Growth Rate Determination Month"),
C(ME1) means the number of Ciera Pre-Paid's customers as of the last business
day of the Ciera Pre-Paid Net Growth Rate Determination Month, C(MB2) means the
number of Ciera Pre-Paid's customers as of the first business day of the first
calendar month immediately preceding the Ciera Pre-Paid Net Growth Rate
Determination Month, C(ME2) means the number of Ciera Pre-Paid's customers as of
the last business day of the first calendar month immediately preceding the
Ciera Pre-Paid Net Growth Rate Determination Month, C(MB3) means the number of
Ciera Pre-Paid's customers as of the first business day of the second calendar
month immediately preceding the Ciera Pre-Paid Net Growth Rate Determination
Month, and C(ME3) means the number of Ciera Pre-Paid's customers as of the last
business day of the second calendar month immediately preceding the Ciera
Pre-Paid Net Growth Rate Determination Month.

         "Ciera Pre-Paid Revenue Multiple", for the purpose of determining the
Availability Formula, shall be determined as follows:

                           (i) to the extent the Ciera Pre-Paid Net Growth Rate
is greater than or equal to three percent (3%), the Ciera Pre-Paid Revenue
Multiple shall be 3.0;

                           (ii) to the extent the Ciera Pre-Paid Net Growth Rate
is greater than or equal to two percent (2%), but less than three percent (3%),
the Ciera Pre-Paid Revenue Multiple shall be 2.0;

                           (iii) to the extent the Ciera Pre-Paid Net Growth
Rate is less than two percent (2%), the Ciera Pre-Paid Revenue Multiple shall be
1.0;

         "ECC" means Equalnet Communications Corp.

         "ENC" means Equalnet Corporation.

         "Equalnet Companies" means ECC, ENC and USC.

         "Equalnet Business" means the business of Borrower relating to the
assets of the Equalnet Companies which are being purchased out of Chapter 11
bankruptcy.

         "Equalnet Revenue Multiple", for the purpose of determining the
Availability Formula, shall be calculated as follows: on the Closing Date and
for a period of 179 days, the Equalnet Revenue Multiple shall be equal to the
quotient of (x) the sum of all obligations owed to RFC by the Equalnet Companies
as of the Closing Date, divided by (y) the Equalnet Companies gross monthly
billings for March 2001; thereafter, beginning 180 days after the Closing Date,
the Equalnet Revenue Multiple shall decrease .05 every two months for the first
six months, .10 every month for the next 12 months, and .14 every month for the
next 12 months; provided, however, that in no event shall the Equalnet Revenue
Multiple be less than 3.0.

                                       3
<PAGE>   4

         "GAAP" means generally accepted accounting principles.

         "Lockbox Account" means that certain account as defined at Section
13(e) hereof.

         "Net Growth Rate" means the combined monthly increase in the number of
customers of Ciera Post-Paid and the Equalnet Business, expressed as a
percentage, and shall be computed according to the following formula:

               C(ME1) - C(MB1) + C(ME2) - C(MB2) + C(ME3) - C(MB3)
               ---------------   ---------------   ---------------
                   C(MB1)            C(MB2)            C(MB3)
--------------------------------------------------------------------------------
                                        3

         where C(MB1) means the number of Ciera Post-Paid's and Equalnet
Business' customers as of the first business day of the calendar month in which
the Net Growth Rate is determined (the "Net Growth Rate Determination Month"),
C(ME1) means the number of Ciera Post-Paid's and Equalnet Business' customers as
of the last business day of the Net Growth Rate Determination Month, C(MB2)
means the number of Ciera Post-Paid's and Equalnet Business' customers as of the
first business day of the first calendar month immediately preceding the Net
Growth Rate Determination Month, C(ME2) means the number of Ciera Post-Paid's
and Equalnet Business' customers as of the last business day of the first
calendar month immediately preceding the Net Growth Rate Determination Month,
C(MB3) means the number of Ciera Post-Paid's and Equalnet Business' customers as
of the first business day of the second calendar month immediately preceding the
Net Growth Rate Determination Month, and C(ME3) means the number of Ciera
Post-Paid's and Equalnet Business' customers as of the last business day of the
second calendar month immediately preceding the Net Growth Rate Determination
Month.

         "Obligations" is defined in Section 10.

         "Permitted Liens" means (a) liens in favor of the Lender; (b) liens for
taxes, assessments or other governmental charges not delinquent or being
contested in good faith and by appropriate proceedings and with respect to which
proper reserves have been taken by the Borrower provided, that, the lien shall
have no effect on the priority of the liens in favor of the Lender or the value
of the Collateral and a stay of enforcement of any such lien shall be in effect;
(c) liens disclosed in the financial statements referred to in Section 14, the
existence of which the Lender has consented to in writing; (d) deposits or
pledges to secure obligations under worker's compensation, social security or
similar laws, or under unemployment insurance; and (e) liens disclosed on
Schedule 11(g); and (f) liens placed upon fixed assets hereafter acquired to
secure a portion of the purchase price thereof, provided that any such lien
shall not encumber any other property of the Borrower.

         "Person" means any individual, corporation, firm, enterprise,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company or any other entity of any kind
or any government or political subdivision or any agency, department or
instrumentality thereof.

         "USC" means USC Telecom, Inc.

         2. Capitalized Terms. Capitalized terms shall have the respective
meanings ascribed thereto in this Agreement.

         3. Maximum Loan Amount; Term of Loan; Determination of Availability.

                  (a) Lender hereby agrees to loan to Borrower a principal
amount of up to Ten Million

                                       4
<PAGE>   5

Dollars ($10,000,000.00) ("Maximum Loan Amount") on the terms and conditions set
forth herein.

                  (b) From the Closing Date through the period ending on January
2, 2004 ("Draw Period"), Borrower may from time to time request in writing that
Lender make one or more loans to it pursuant to the terms and provisions of this
Agreement (each such advance made hereunder, a "Loan" and the aggregate
principal amount outstanding of all Loans made hereunder, the "Principal Sum").
The Principal Sum, plus any and all accrued and unpaid interest shall not exceed
the Maximum Loan Amount. Lender shall have no obligation to make any Loan at any
time when a set of facts or circumstances exists, which, by itself, upon the
giving of notice, the lapse of time, or any one or more of the foregoing would
constitute an Event of Default (as defined in Section 23) under this Agreement
(a "Pending Default").

                  (c) Notwithstanding anything to the contrary in this
Agreement, the Principal Sum shall not exceed (i) the sum of (x) the
Availability Formula plus (y) the product of the Availability Formula multiplied
by .10 for the period beginning on April 2, 2001 and ending on July 2, 2001, and
(ii) the Availability Formula at any time after July 2, 2001.

                  (d) Subject to Section 29 hereof and unless otherwise agreed
by Lender and Borrower in writing and provided there has not otherwise been an
Event of Default, the term of this Agreement shall commence as of the Closing
Date and continue until April 2, 2005 (the "Stated Maturity").

                  (e) Lender reserves the right, after providing notice to
Borrower in accordance with Section 26 of this Agreement and the expiration of
any applicable cure period, to deduct from any Loan made hereunder, such amounts
as Lender may deem proper and necessary, in its sole discretion, for the payment
of interest, fees, and expenses under this Agreement or any other agreement in
favor of Lender, and such other purposes as Lender may deem appropriate.

         4. Interest. From the date of the Promissory Note, the Principal Sum
shall bear interest, until the Stated Maturity and payment in full of the
Promissory Note, at a rate equal to the prime lending rate as listed at all
times during which this Agreement is in effect in The Wall Street Journal,
Midwest Edition, plus one and three-quarters percent (1.75%) per annum
("Interest Rate). Interest payments shall be calculated on a 360-day year basis
and shall be based on the actual number of days that elapse during the interest
calculation period.

         5. Expenses. Borrower shall be responsible for all out-of-pocket
expenses of Lender associated with the negotiation, preparation and execution of
this Agreement including but not limited to Lender's reasonable legal fees,
audit fees, appraisal fees and banking fees related hereto. All such expenses
shall be netted on the Closing Date against the Loan proceeds or added to the
Principal Sum, as the case may be.

         6. Payment of Principal and Interest. The Principal Sum, or so much
thereof as shall have been advanced by Lender at any time and not thereafter
repaid, plus any and all accrued and unpaid interest shall be immediately due
and payable upon the Stated Maturity, whether by demand, acceleration or
otherwise. In addition, accrued interest shall be payable by Borrower to Lender
on a monthly basis in arrears; provided, however, that one and three-quarters
percent of the Interest Rate shall be deferred during the period beginning on
the Closing Date and ending on April 2, 2002, and repaid in equal monthly
installments during the period beginning on April 3, 2002 and ending on April 2,
2003. Lender shall apply all collections, as of the date they are received and
collected in the Lockbox, first against any fees or other charges, then second
against accrued interest, and then third against the Principal Sum, until all
amounts due under the Loan are paid in full.

Upon the occurrence of an Event of Default, including, but not limited to, an
event where an installment of interest or the unpaid principal balance is not
received by Lender on or before the date such payment is due, Borrower shall be
deemed to be delinquent and in default of the terms and provisions hereof and,
at Lender's

                                       5
<PAGE>   6

sole discretion and in addition to Lender's other rights hereunder, Lender shall
have the right, without any further notice or demand for payment, to increase
the Interest Rate to a rate equal to the prime lending rate as listed at all
times during which this Agreement is in effect in The Wall Street Journal,
Midwest Edition, plus six and three-quarters percent (6.75%) per annum, or the
highest rate legally permitted, on the outstanding Principal Sum and accrued and
unpaid interest amount. In addition, in such event Borrower agrees to
immediately suspend the payment of any and all cash bonuses to any director,
officer and/or management personnel until such time as Borrower is in compliance
with the terms and conditions of this Agreement.

         7. Payment.

                  (a) Borrower shall expressly instruct all of its end users and
other payors, including master payors on credit card receipts, to remit payment
to the Lockbox Account. Pursuant to this Agreement and/or the execution of any
other documentation in connection herewith or with respect to the Lockbox
Account, Borrower hereby authorizes Lender to withdraw funds from the Lockbox
Account in order to satisfy any Obligations then due and owing Lender by
Borrower, and, to the extent such available funds are not sufficient to satisfy
the Obligations then due and owing Lender, Borrower shall immediately remit such
payment to Lender, by wire transfer, in lawful money of the United States of
America, to an account designated by Lender, or in the event no such account has
been identified, by certified check payable to RFC Capital Corporation and
delivered at 130 East Chestnut Street, Suite 400, Columbus, Ohio 43215,
Attention: President or at such other place as Lender may designate in writing.

                  (b) If Borrower fails to maintain, as minimum security for the
Loans, sufficient collections such that availability as determined in accordance
with Section 3 hereof equals or exceeds the Principal Sum, Borrower shall
immediately pay to Lender such difference.

         8. Prepayment; Termination.

                  (a) Borrower may prepay the Principal Sum outstanding plus
accrued but unpaid interest on the Promissory Note in whole or in part at any
time. The amount of any prepayment shall be applied first to satisfy the payment
of any fees, costs, charges or expenses incurred by Lender in connection with
this Agreement, including but not limited to attorneys' fees, then second in
reduction of accrued and unpaid interest, if any, and third, in reduction of the
Principal Sum.

                  (b) Notwithstanding the foregoing, Borrower may terminate this
Agreement in connection with Borrower's prepayment of the entire Principal Sum
and upon Lender's receipt of ninety (90) days prior written notice thereof. In
the event of any termination of this Agreement, Borrower shall be required to
discharge, no later than the effective date of termination, the Principal Sum,
all accrued and unpaid interest, all Obligations and all other amounts owing
from Borrower to Lender pursuant to this Agreement and any agreement or document
executed or delivered hereunder. The security interest created by Borrower in
favor of Lender pursuant to this Agreement, and all other rights and remedies of
Lender pursuant to this Agreement, shall continue in full force and effect
notwithstanding any termination of this Agreement, until the Principal Sum, all
accrued and unpaid interest, all Obligations and all other obligations owing
from Borrower to Lender are discharged in full.

         9. Use of Proceeds. Borrower hereby agrees, represents, covenants and
warrants that all Loan proceeds received hereunder shall be used, unless
otherwise agreed in writing by Lender, to (a) refinance the current obligations
owed to Lender on two ENC and one USC Receivables Sale Agreements, (b) refinance
outstanding balances owed to Lender relating to one USC term loan, one ENC term
loan, and one ECC term loan up to a maximum of the permitted claim, (c) pay any
transaction costs incurred by Guarantor or Lender in excess of $500,000, and (d)
provide working capital. Any other use thereof is expressly subject to the prior
written approval of Lender.

                                       6
<PAGE>   7

         10. Grant of Security Interest.

                  (a) To secure the prompt payment and performance to Lender of
the Obligations, Borrower hereby grants, pledges, conveys and assigns to Lender
continuing security interests in and lien upon the following property and
interests in property, whether Borrower's interest therein be as owner,
co-owner, lessee, consignee, secured party or otherwise, and whether the same be
now owned or existing or hereafter arising or acquired, and wherever located,
together with all substitutions, replacements, additions and accessions therefor
or thereto, all documents, contracts, negotiable documents, documents of title,
warehouse receipts, storage receipts, dock receipts, dock warrants, express
bills, freight bills, airbills, bills of lading, and other documents relating
thereto, all products thereof and all cash and non-cash proceeds thereof
including, but not limited to, notes, drafts, checks, instruments, insurance
proceeds, indemnity proceeds, warranty and guaranty proceeds (herein the
"Proceeds"): (i) all inventory including, but not limited to, all goods,
merchandise and other personal property furnished under any contract of service
or intended for sale or lease, all parts, supplies, raw materials, work in
process, finished goods, materials used or consumed, and repossessed and
returned goods (herein the "Inventory"); (ii) all accounts, accounts receivable,
contract rights, chattel paper, general intangibles, income or other tax
refunds, proceeds of letters of credit, preference recoveries and all claims in
respect of any transfers of any kind, instruments, negotiable documents, notes,
drafts, acceptances and other forms of obligations, all contracts, books,
records, ledger cards, computer programs, and other documents or property,
including without limitation such items which are evidencing or relating to the
accounts and inventory and including, but not limited to, any of the foregoing
arising from or in connection with the sale, lease or other disposition of
Inventory (herein the "Accounts"); (iii) all machinery, equipment, tools, dies,
molds, rolling stock, furniture, furnishings and fixtures including, but not
limited to, all manufacturing, fabricating, processing, transporting and
packaging equipment, power systems, heating, cooling and ventilating systems,
lighting and communications systems, electric, gas and water distribution
systems, food service systems, fire prevention, alarm and security systems,
laundry systems and computing and data processing systems (herein the
"Equipment"); (iv) all trade names, trademarks, trademark applications, trade
secrets, domain names, service marks, data bases, software and software systems,
including the source and object codes, information systems, discs, tapes,
customer lists, telephone numbers, credit memoranda, goodwill, patents, patent
applications, patents pending, copyrights, royalties, literary rights, licenses
and franchises (herein the "Intellectual Property"); (v) all investment
property, including without limitation, securities, whether certificated or
uncertificated, securities entitlements, securities accounts, commodities
contracts and commodities accounts (herein the "Investment Property"); (vi) all
of Borrower's customer base, which shall include but not be limited to all of
Borrower's past, present and future customer contracts, agreements, lists,
documents, computer tapes, letters of agency or other arrangements, any customer
list relating thereto and any information regarding prospective customers and
contracts, agreements, goodwill and other intangible assets associated with any
of the foregoing (herein the "Customer Base"); (vii) all deposit accounts,
whether general, special, time, demand, provisional, or final, all cash or
monies wherever located, any and all deposits or other sums at any time due to
Borrower, any and all policies or certificates of insurance, goods, choses in
action, cash and property, which now or hereafter are at any time in the
possession or control of Lender or in transit by mail or carrier to or from
Lender, or in the possession of any third party acting in Lender's behalf,
without regard to whether Lender received the same in pledge for safekeeping, as
agent for collection or transmission or otherwise, or whether Lender has
conditionally released the same (herein the "Deposits"); and (viii) all
insurance proceeds of whatever nature (herein the "Insurance Proceeds") (all of
the Accounts, the Inventory, the Equipment, the Intellectual Property, the
Investment Property, the Customer Base, the Deposits, the Insurance Proceeds,
and the Proceeds herein are collectively termed the "Collateral").

                  (b) The security interests granted in the Collateral by this
Agreement are to secure the prompt and full payment and complete performance of
all obligations of Borrower to Lender under this Agreement, the Promissory Note
and all other indebtedness, liabilities and obligations whatsoever and

                                       7
<PAGE>   8

whatever nature owed by Borrower to Lender whether direct or indirect, obsolete
or contingent, primary or secondary, due or to become due and whether now
existing or hereafter arising and howsoever evidenced or acquired, whether joint
or several, or joint and several (collectively, the "Obligations"). The word
"Obligations" is used in its most comprehensive sense and includes, without
limitation, all forbearances, all indebtedness, debts and liabilities (including
principal, interest, late charges, collection costs, attorneys' fees and the
like) of Borrower to Lender, whether evidenced by note, warrant, pledge or
otherwise, and any and all renewals of or substitutions therefor. The absence of
any reference to this Agreement in any documents, instruments, or agreements
evidencing or relating to any Obligations secured hereby shall not limit or be
construed to limit the scope or applicability of this Agreement.

                  (c) It is Borrower's express intention that this Agreement and
the continuing security interest granted hereby, in addition to covering all
present obligations of Borrower to Lender and its Affiliates pursuant to the
Obligations, shall extend to all future obligations of Borrower to Lender
intended as replacements or substitutions for said Obligations, whether or not
such Obligations are reduced or entirely extinguished and thereafter increased
or reincurred.

                  (d) It is the intention of the parties hereto that this
Agreement shall constitute a security agreement under the Uniform Commercial
Code and any other applicable law and Lender and its affiliates, successors and
assigns shall have the rights and remedies of a Lender thereunder. Borrower
further agrees to deliver any financing statements or additional documents
Lender may reasonably request to perfect or evidence Lender's security interest
granted herein.

                  (e) At its option, Lender may discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on the Collateral
and may pay for the maintenance and preservation of the Collateral. Borrower
agrees to reimburse Lender upon demand for any payment made or any expense
incurred (including reasonable attorneys' fees) by Lender pursuant to the
foregoing authorization. Should said sum not be paid to Lender upon demand,
interest shall accrue thereon from the date of demand until paid in full, at the
highest rate set forth in any document or instrument evidencing any of the
Obligations.

                  (f) Lender shall have no duty as to the collection or
protection of the Collateral or any income therefrom, nor as to the preservation
of rights against prior parties, nor as to the preservation of any right
pertaining thereto, beyond the safe custody of any Collateral in the possession
of Lender.

         11. Representations, Warranties and Covenants of Borrower and
Guarantor. Borrower and Guarantor, jointly and severally, represent, warrant,
covenant and agree that:

                  (a) each of Borrower and Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite corporate power and authority to execute, deliver
and perform this Agreement; and, within 90 days of the Closing Date, each of
Borrower and Guarantor (i) shall have all necessary licenses, permits and
authorizations to carry out all of the terms, covenants and provisions contained
herein, and to carry on its business as now conducted and as presently proposed
to be conducted, (ii) will not be doing business or conducting any activity in
any jurisdiction in which it has not duly qualified and become authorized to do
business, and (iii) will not be in violation of any laws, ordinances, orders,
governmental rules or regulations to which it is subject;

                  (b) the Board of Directors of each of Borrower and Guarantor,
as appropriate, has duly authorized the execution and delivery of this Agreement
and of the Promissory Note and other documents contemplated herein, and this
Agreement, the Promissory Note and other documents executed in connection with
this Agreement will constitute valid and binding obligations enforceable in
accordance with their respective terms;

                                       8
<PAGE>   9

                  (c) the execution and delivery of this Agreement, and the
performance of the transactions contemplated hereby, do not violate, conflict
with, result in the breach of, or constitute a default under any applicable law,
the organizational documents of Borrower or Guarantor or any agreement or
instrument to which Borrower or Guarantor is a party, or result in the creation
or imposition of any lien, charge or encumbrance upon any assets of Borrower or
Guarantor, other than the liens granted to Lender pursuant to this Agreement,
pursuant to the terms of any agreement or instrument to which Borrower or
Guarantor is a party or by which Borrower or Guarantor or any of their assets
are bound;

                  (d) there are no actions, proceedings or investigations
pending or, to the knowledge of Borrower or Gurantor, threatened against
Borrower or Gurantor, whether or not covered by insurance, which may result,
either individually or in the aggregate, in any material adverse change in the
assets, financial condition or business prospects of Borrower or Guarantor;

                  (e) each of Borrower and Guarantor has timely filed all tax
returns which Borrower and Guarantor are required by law to file or has obtained
valid extensions and all taxes and other sums owing by Borrower or Guarantor to
any governmental authority have been fully paid and Borrower and Guarantor each
maintain adequate reserves to pay such tax liabilities as they accrue;

                  (f) except for Permitted Liens, no Person has any rights in or
to the Collateral other than Lender as created by this Agreement other than an
affiliate of Lender;

                  (g) except for Permitted Liens, Borrower has good title to all
the Collateral, free from any liens and encumbrances, and has not agreed or
consented to cause or permit in the future (upon the happening of a contingency
or otherwise) any of its property whether now owned or hereafter acquired to be
subject to a lien or encumbrance and will warrant and defend the title thereto,
and the security interest therein, conveyed to Lender by this Agreement, against
the claims of all persons whomsoever and wheresoever situated;

                  (h) neither Borrower nor Guarantor has materially breached any
agreement, representation, warranty or covenant provided in any other agreement,
other than this Agreement, executed by and between Borrower and/or Guarantor
and/or any Affiliate and Lender and/or any affiliate of Lender;

                  (i) neither Borrower nor Guarantor is in default under any
indenture, mortgage, deed of trust, agreement or other instrument to which
Borrower or Guarantor is a party or by which Borrower or Guarantor or their
property is bound, and no event has occurred and no condition exists which would
constitute a Pending Default or an Event of Default pursuant to this Agreement,
and neither the nature of Borrower or Guarantor or their respective business or
properties, nor any relationship between Borrower or Guarantor and any other
Person, nor any circumstance in connection with the execution of this Agreement,
is such as to require a consent, approval or authorization of, or filing,
registration or qualification with, any Person;

                  (j) the financial statements of Borrower for the month ending
February 28, 2001, and the financial statements for Guarantor for the fiscal
year ending December 31, 2000, which have been supplied to Lender, have been
prepared in accordance with GAAP and fairly represent Borrower's and Guarantor's
financial conditions, respectively, as of such date; no material adverse change
in Borrower's or Guarantor's financial condition has occurred since such date;

                  (k) after giving effect to all indebtedness of Borrower on the
date of the initial advance hereunder (including, without limitation, the Loans)
and such other dates as advances are requested hereunder, Borrower (a) is able
to pay its obligations as they become due and payable, and (b) has sufficient

                                       9
<PAGE>   10

capital to engage in its business; in addition, Borrower's grant of the
Collateral for the Loans constitutes fair consideration and reasonably
equivalent value because Borrower has received the proceeds of the Loans;

                  (l) subject to any limitation stated therein or in connection
therewith, all information furnished by Borrower concerning the Collateral or
otherwise in connection with the Obligations, is or shall be at the time the
same is furnished, accurate, correct and complete in all material respects;

                  (m) the Collateral is and shall be used primarily for business
purposes and Borrower shall keep the Collateral in good condition (normal wear
and tear excepted) and shall not misuse, abuse, waste or destroy any of the same
nor use the Collateral in violation of any statute, ordinance, regulation, rule,
decree or order;

                  (n) Borrower shall perform, in a timely manner, all of its
obligations pursuant to leases, mortgages, deeds of trust or other agreements to
which Borrower is a party, and shall pay when due all debt owed by Borrower and
all claims of mechanics, materialmen, carriers, landlords, warehousemen and
other like persons, unless such claims are being contested in good faith and by
appropriate proceedings and with respect to which Borrower has established
adequate reserves;

                  (o) Borrower shall maintain its existence as a corporation in
good standing and shall maintain its principal place of business and chief
executive office at the address set forth in Section 26 of this Agreement, and
the records concerning the Collateral shall be kept at that address unless
Lender gives its prior written consent otherwise;

                  (p) Borrower shall keep the Collateral at the locations set
forth in Schedule 11(p) attached hereto and maintain no other place of business
or place where Collateral is located except as shown on Schedule 11(p) and shall
deliver to Lender written notice, at least sixty (60) days in advance, of any
proposed change in Borrower's name, a change in the use of any trade name or new
trade names, Borrower's business locations, the location of Borrower's principal
place of business or chief executive office, the location of any of Borrower's
Equipment, or the location of Borrower's books and records and shall execute any
and all financing statements and other documents that Lender requests in
connection therewith;

                  (q) Borrower shall comply with all applicable laws and
regulations, shall pay all real and personal property taxes, assessments and
charges, and all franchise, income, unemployment, social security, withholding,
sales and all other taxes assessed against Borrower or the Collateral, at such
times and in such manner so as to avoid any penalty from accruing against
Borrower or any lien or charge from attaching to the Collateral, and shall
promptly deliver to Lender, upon reasonable request, receipted bills evidencing
payment of such taxes and assessments, unless such claims are being contested in
good faith and by appropriate proceedings and with respect to which Borrower has
established adequate reserves;

                  (r) Borrower and Guarantor shall notify Lender immediately
upon the occurrence of any circumstance which: (i) makes any representation or
warranty of Borrower or Guarantor contained in this Agreement or any other
agreement or document delivered hereunder incorrect or materially misleading;
(ii) puts Borrower or Guarantor other than in full compliance with all of
Borrower's and Guarantor's covenants and agreements contained in this Agreement
or any other agreement or document; or (iii) constitutes an Event of Default
under this Agreement;

                  (s) with respect to accounts, to the best of Borrower's
knowledge, (i) each account is based on an actual bona fide and genuine
rendering or performance of services in the ordinary course of business, the
account obligors have accepted such goods or services and unconditionally owe
and are obligated to pay the full amounts reflected in the invoices according to
the terms thereof without any defense, offset or counterclaim; (ii) all of the
documents provided or to be given to Lender with respect to the

                                       10
<PAGE>   11

accounts are genuine; and (iii) pursuant to its customary credit investigation
in the ordinary course of business as of the date each account is created, each
of the account obligors is solvent and able to pay such account when due, or
with respect to any account obligors who are not solvent, Borrower has
established on its books and in its financial records bad debt reserves adequate
to cover such accounts;

                  (t) Borrower shall provide or cause to be provided to Lender
reasonable access to its facilities, books and records;

                  (u) Schedule 11(u) attached hereto accurately represents to
Lender the following: (i) the classes of capital stock of Borrower and par value
of each such class, all as authorized by Borrower's Articles of Incorporation,
(ii) the number of shares of each such class of stock issued and outstanding,
(iii) the registered owner or holder (legally or beneficially) thereof, (iv) the
certificate numbers evidencing the foregoing and (v) Borrower's employer tax
identification number. The outstanding capital stock of Borrower is duly
authorized, validly issued, fully paid and non-assessable. Borrower does not
have outstanding any other stock or other equity security or other instrument
convertible to an equity security or any commitment, understanding or agreement
or arrangement to issue, sell or have outstanding any of the foregoing;

                  (v) Borrower shall at all times keep accurate and complete
records of the Collateral in accordance with GAAP; and

                  (w) upon the execution of a definitive agreement for the
purchase of the assets of ENC, Borrower shall provide Lender with a $15,000
deposit for the payment of fees and expenses incurred by Lender in connection
with this Agreement, which, along with the $10,000 deposit already received by
Lender, shall be forfeited if Borrower fails to use its reasonable best efforts
to pursue the purchase of ENC.

         12. Negative Covenants. Borrower and Guarantor, jointly and severally,
represent, warrant, covenant and agree that, except with the prior written
consent of Lender, neither Borrower nor Guarantor, as applicable, shall:

                  (a) in the event Borrower has failed to timely pay any amounts
due and owing Lender hereunder, pay to or compensate any director, officer
and/or management personnel of Borrower, any additional compensation in the form
of a bonus, stock options or other similar incentive compensation, and shall
suspend any then existing bonus and incentive compensation payment structure,
until such time as all amounts then due and owing Lender have been satisfied;

                  (b) as to Borrower, create, incur, assume or suffer to exist
any debt except (i) debt represented by the Promissory Note, (ii) other
indebtedness to Lender, (iii) any other debt which, in the sole opinion of
counsel to Lender, is satisfactorily subordinated to all indebtedness owing
Lender by Borrower, (iv) unsecured indebtedness to trade creditors arising in
the ordinary course of Borrower's business, or (v) any debt related to a
Permitted Lien;

                  (c) as to Borrower, assume, guarantee, endorse, contingently
agree to purchase or otherwise become liable upon the obligation of any Person;

                  (d) as to Borrower, further sell, assign, transfer, pledge,
hypothecate, mortgage or otherwise encumber any right or rights with respect to
the Collateral or any rights or interests thereunder absent the express written
consent of Lender, except for (i) sales of Inventory in the ordinary course of
business and (ii) sales of surplus or obsolete Equipment, provided that the
aggregate fair market value of such Equipment does not exceed $25,000 in any
fiscal year;

                  (e) as to Borrower, convey, transfer, lease or otherwise
dispose of all or any portion of its assets (whether now owned or hereafter
acquired), be the subject of a merger or merge with or into or

                                       11
<PAGE>   12

consolidate with or into another entity, enter into limited liability companies,
partnerships or joint ventures with another entity, or engage in any business
other than the businesses engaged in by Borrower on the date hereof and any
business or activities which are substantially similar or related thereto;
provided however, Lender shall not withhold its written consent in the event
that such transaction(s) provides for the full payment of any and all amounts
owed by Borrower to Lender;

                  (f) as to Borrower, acquire all or substantially all of the
assets or capital stock or other ownership interest of any entity;

                  (g) as to Borrower, redeem or acquire any of its own capital
stock, or any options, warrants or any securities in respect of its capital
stock, except through the use of the net proceeds from the simultaneous sale of
an equivalent amount of stock for the same purchase or redemption price;

                  (g) as to Borrower, declare or pay any cash or property
dividend;

                  (h) make any capital expenditures that in any one fiscal year
cause Guarantor's capital expenditures in that fiscal year to exceed an
aggregate amount of $500,000;

                  (i) at any time permit Guarantor's Adjusted Tangible Net Worth
(defined as the net worth of Guarantor minus any intangible assets plus any
subordinated debt) to be less than $2,500,000;

                  (j) at any time permit the ratio of Guarantor's current assets
to current liabilities to be less than 1.5 to 1.0;

                  (k) permit the Principal Sum to exceed (i) the sum of (x) the
Availability Formula plus (y) the product of the Availability Formula multiplied
by .10 for the period beginning on April 2, 2001 and ending on July 2, 2001, and
(ii) the Availability Formula at any time after June 2, 2001.

                  (l) beginning April 2, 2002, permit the ratio of the sum of
Borrower's net before tax income plus depreciation plus amortization plus
interest expense less shareholder dividends over the sum of current maturities
of long term debt plus interest expense to be less than 1.0 to 1.0;

                  (m) as to Borrower, except in accordance with Section 11(p)
make any change to (i) the location of its chief executive office or the
location of the office where records are kept or (ii) its corporate name,
tradenames, fictitious names, assumed names or "doing business as" names;

                  (n) change either Borrower's or Guarantor's fiscal year for
accounting or tax purposes from a period consisting of the twelve month period
ending on December 31 of each calendar year;

                  (o) make any material (as defined in GAAP) change in
accounting treatment and reporting practices or tax reporting treatment of
Borrower or Guarantor, except as required by GAAP or law and disclosed in
writing to Lender; and

                  (p) beginning July 2, 2001, permit (i) the Attrition Rate to
be greater than 5% and (ii) the Net Growth Rate to be less than 0%.

         13. Conditions Precedent to Making Loan. Unless otherwise specified
herein, prior to Lender making any Loan hereunder, unless otherwise waived in
writing by Lender, Borrower and Guarantor, as applicable, shall fulfill to
Lender's good faith satisfaction, each of the following conditions precedent:

                  (a) each of Borrower and Guarantor is in compliance with any
representation, warranty or covenant provided under this Agreement or any other
agreement or certificate relating to the transactions contemplated hereby;

                                       12
<PAGE>   13

                  (b) each of Borrower and Guarantor has delivered to Lender a
fully executed and complete copy of its respective Corporate Certificate and a
Certified Copy of Resolutions;

                  (c) each of Borrower and Guarantor has delivered to Lender
satisfactory evidence that each is in good standing and material compliance with
any and all relevant taxing authorities;

                  (d) each of Borrower and Guarantor shall have taken such other
action or delivered such other documents to Lender as Lender may reasonably
request, including but not limited to, (i) documents in connection with a full
follow-up due diligence review of all issues, including without limitation,
Borrower's and Guarantor's ownership and management, operations, financial
condition and strategic plan, (ii) background checks on certain of Borrower's
and Guarantor's shareholders, directors, officers or managers, and (iii)
satisfactory release or subordination of any existing debt from Borrower to any
shareholder, director, officer, manager or employee, or any affiliates thereof,
or any member of such person's family, (iv) execution by Guarantor of a certain
Stock Pledge Agreement dated as of even date herewith for the pledge of not less
than 100% of Borrower's fully diluted issued and outstanding shares of common
stock ("Stock Pledge Agreement") (the form of which is attached hereto as
Exhibit A), to further collateralize payment of the Promissory Note and
performance of Borrower's Obligations in connection therewith;

                  (e) execution of one or more account assignment agreements, or
the like, in a form satisfactory to Lender, whereby Lender obtains absolute
dominion, authority and control over the primary depository accounts and/or
lockbox accounts, to which all current and future obligors, payors, including
master payors on credit card receipts, or Account obligors of Borrower are
directed to remit their respective payment, by ACH or otherwise (the "Lockbox
Account");

                  (f) execution of an agreement by Guarantor to (i) purchase the
assets of the Equalnet Companies out of Chapter 11 bankruptcy subject to the
existing liens of Lender, (ii) assume the lesser of (x) the Equalnet Companies'
allowed secured obligations to Lender, as approved by the bankruptcy court, or
(y) $7,500,000, and (iii) pay $500,000, subject to any prorations and
adjustments as provided in the definitive agreement to purchase the assets of
the Equalnet Companies, to the estate of the Equalnet Companies; and

                  (g) approval by the bankruptcy court and consummation of the
purchase of the assets of the Equalnet Companies.

                  Each request for a Loan or conversion or continuation of a
Loan hereunder shall constitute a warranty and representation by Borrower and
Guarantor that (i) the warranties and representations of Borrower and Guarantor
set forth herein and each of the representations and warranties contained in any
certificate, document, or financial or other statement furnished at any time
pursuant to this Agreement or any related document are true and correct on and
as of such date, except to the extent that such representation or warranty is
stated to expressly relate solely to an earlier date, and (ii) Borrower and
Guarantor have complied and are in compliance with all the terms, covenants and
conditions of this Agreement which are binding on each of them, and no Event of
Default or Pending Default has occurred and is continuing on such date or after
giving effect to the Loan requested to be made.

         14. Reporting.

                  (a) Borrower shall furnish, or cause to be furnished, to
Lender:

                           (i) as soon as available, and in any event within 30
days after the end of each month of its fiscal year, a financial statement,
including a balance sheet and income statement, of Borrower as of the end of
such month, commencing with the February 28, 2001 financial statements,
certified by the

                                       13
<PAGE>   14

President, Chief Executive Officer or Controller of Borrower, and accompanied by
a management narrative summarizing circumstances and issues underlying such
results and those facing Borrower on a going forward basis; and

                           (ii) any and all other reasonably necessary and
material documentation that Lender may request in writing to Borrower,
including, but not limited to, the monthly delivery by Borrower to Lender of a
Borrowing Base Certificate in the form that Lender shall provide to Borrower and
the monthly delivery of a Compliance Certificate, the form of which is attached
hereto as Exhibit B.

                  (b) Guarantor shall furnish, our cause to be furnished, to
Lender:

                           (i) as soon as available, and in any event within 45
days of the end of each quarter of its fiscal year, unaudited consolidating and
consolidated financial statements, certified by the President, Chief Executive
Officer or Controller of Guarantor, and accompanied by a management narrative
summarizing circumstances and issues underlying such results and those facing
Gurantor on a going forward basis;

                           (ii) as soon as available, and in any event within
120 days after the end of each fiscal year (including the most recent fiscal
year then ended), audited consolidating and consolidated financial statements,
prepared by and accounting firm acceptable to Lender, accompanied by a
management narrative summarizing circumstances and issues underlying such
results and those facing Guarantor on a going forward basis; and

                           (iii) any and all other reasonably necessary and
material documentation that Lender may request in writing to Guarantor,
including, but not limited to, the monthly delivery of a Compliance Certificate,
the form of which is attached hereto as Exhibit B.

         15. Indemnification Obligations. Borrower shall indemnify and hold
Lender harmless from and against, and shall pay to Lender within ten business
days after Borrower's receipt of written demand from Lender, any and all
liabilities, obligations, losses, damages, penalties, costs, and expenses of any
kind or nature that may be imposed on Lender in any litigation, proceeding or
investigation instituted by any governmental authority or Person with respect to
any aspect of, or any transaction contemplated by, or referred to in, or any
matter related to, this Agreement; provided, however, Borrower shall not be
required to indemnify and hold Lender harmless from any such liabilities,
obligations, losses, damages, penalties, costs, and expenses arising from
Lender's gross negligence or willful misconduct. The failure of Borrower to pay
to Lender any such amounts as required under this Section shall trigger, in
addition to other rights and remedies available to it, Lender's right to
exercise any of its rights and remedies as more fully set forth in Section 24 of
this Agreement. The rights and remedies of Lender shall be cumulative, and any
exercise of any right or remedy under this Agreement or the underlying
documentation to guarantee the Obligations, shall not be deemed to be an
election of that right or remedy to the exclusion of any other right or remedy.

         16. Further Assurances. Borrower covenants to execute such other
assignments, security agreements, financing statements, and other documents that
Lender may reasonably deem necessary to further evidence the Obligations, or to
perfect, extend, or clarify Lender's rights in the Collateral.

         17. Insurance. Borrower shall keep the Inventory and Equipment insured
against all risks of loss or damage from every cause whatsoever for not less
than the full replacement value thereof, and shall carry public liability and
property damage insurance covering the Inventory and Equipment and their use in
amounts customary for such Inventory and Equipment. All such insurance shall be
in form and amount acceptable to Lender and name Lender and its assignee as Loss
Payee, as their interest may appear with respect to property damage coverage and
as Additional Insured with respect to public liability coverage. Borrower shall
pay the premiums therefor and deliver said policies, or duplicates thereof or
certificates of

                                       14
<PAGE>   15

coverage therefor to Lender, with long form Lender's Loss Payable endorsement
upon the policy or policies or by independent instrument, that provides that no
act, default or breach of warranty or condition of the insured or any other
person shall affect the right of Lender to recover under such policy or policies
of insurance or to pay any premium in whole or in part relating thereto, and
that provides Lender a right to thirty (30) days prior written notice before the
policy can be altered or canceled without obligation of payment of premiums. In
the event Borrower fails to provide such insurance coverage, Lender may obtain
such coverage for its benefit or for the benefit of Borrower and charge Borrower
therefor. Borrower hereby appoints Lender as Borrower's attorney-in-fact to make
claim for, receive payment of, and execute and endorse all documents, checks, or
drafts for loss of damage under any said insurance policies and to apply the
proceeds in furtherance of the exercise of Lender's options as provided herein.

         18. Guaranty. Borrower acknowledges that a certain amount of the
Obligations are guaranteed by Guarantor pursuant to a certain guaranty agreement
dated as of even date herewith, the form of which is attached hereto as Exhibit
C.

         19. Audits. Lender shall have the right, in its sole discretion, to
conduct audits of Borrower up to four times annually, and Borrower will provide
access to all of its books and records and such other information which Lender
deems necessary to evaluate the status of the Loans or of the Collateral;
provided, however, that if an Event of Default occurs, Lender shall have the
right, in its sole discretion, to conduct audits of Borrower without limitation.
In connection therewith, Borrower will pay to Lender all reasonable costs and
expenses incurred in conjunction therewith.

         20. Confidentiality. Lender, Borrower and Guarantor shall hold
confidential all non-public information obtained pursuant to the requirements
hereof and identified as such by Lender, Borrower or Guarantor in accordance
with Lender's, Borrower's or Guarantor's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
business practices, provided that Lender, Borrower or Guarantor may make
disclosures as required or requested by any governmental authority or any
representative thereof, or pursuant to any legal process, or to its accountants,
lawyers and other advisors.

         21. Legal and Binding Agreement. Borrower and Guarantor warrant that
the execution and performance of this Agreement will not violate any judicial or
administrative order or governmental law or regulation to which either of
Borrower or Guarantor is subject, and that this Agreement is valid, binding and
enforceable against Borrower and Guarantor in every respect according to its
terms subject to all applicable laws.

         22. No Consent Required. Borrower and Guarantor warrant that Borrower's
and Guarantor's execution, delivery and performance of this Agreement does not
require the consent of or the giving of notice to any third party, including,
but not limited to, any third party payor of accounts, any lender, governmental
body or regulatory authority.

         23. Default Defined. The occurrence of any one or more of the following
events shall constitute a default under this Agreement ("Event of Default"):

                  (a) Monetary Default. The failure of Borrower to pay to Lender
any amount due hereunder or under the Promissory Note within one day following
the date such amount is due and owing by Borrower to Lender.

                  (b) Default Under Any Other Agreement. A default under (i) any
other agreement, document or instrument to which Borrower or Guarantor and
Lender are a party, (ii) any other agreement which one or more of Borrower's
Affiliates and Lender or one or more of Lender's affiliates are a party or (iii)
any other agreement to which Borrower is a party, and with respect to (i), (ii)
and (iii) which is not

                                       15
<PAGE>   16

otherwise cured by Borrower or Guarantor, as applicable, within ten days
following the date upon which Borrower or Guarantor knew or in good faith should
have known of the occurrence of such Event of Default.

                  (c) Breach of Warranty/Covenant. The failure of Borrower or
Guarantor to perform or observe any obligation, covenant, agreement,
representation or warranty contained herein or in any document or agreement
executed or delivered in connection herewith within ten days following the date
upon which Borrower or Guarantor knew or in good faith should have known of the
occurrence of the breach at issue.

                  (d) Dissolution/Cessation of Business. The cessation of
Borrower's or Guarantor's business, Borrower's or Guarantor's liquidation, the
filing of a certificate of dissolution by Borrower or Guarantor, or the taking
of any action by Borrower or Guarantor to further a liquidation or dissolution.

                  (e) Creation of Lien. The garnishment or creation of a lien
against or security interest in any of the Collateral (other than existing
security interests as of the date hereof or liens otherwise permitted herein) in
which Borrower has granted a security interest to Lender pursuant to the terms
hereof which is otherwise not released or cured by Borrower in some other manner
acceptable to Lender within ten days following the date upon which Borrower knew
or in good faith should have known of the existence of the interest at issue.

                  (f) Loss of Licenses. The loss of license as a final act of
any applicable administrative or governmental authority required of Borrower to
conduct its business as presently conducted and as proposed to be conducted,
unless such loss of license would not have a Material Adverse Effect (as defined
below).

                  (g) Material Change of Personnel. Any additions or
replacements to the senior management teams of Borrower or Guarantor are made
without Lender's prior written approval, which consent shall not be unreasonably
withheld or delayed.

                  (h) Compromise of Security. A Material Adverse Effect or a
material adverse change, in Lender's reasonable discretion, has occurred in the
financial condition, operations or business of Borrower or Guarantor, or the
value of the Collateral or Lender's interest in such Collateral, which has not
been cured by Borrower or Guarantor, as applicable, within ten days following
the date upon which Borrower or Guarantor, as applicable, knew or in good faith
should have known of the existence of the Material Adverse Effect or material
adverse change. "Material Adverse Effect" means a material adverse effect upon
(a) the business, condition (financial or otherwise), operations, performance,
properties or prospects of Borrower or Guarantor, (b) the ability of Borrower or
Guarantor to perform its or his obligations under this Agreement or any
document, agreement, guaranty, or instrument executed in connection herewith, or
(c) the ability of Lender to enforce the terms of this Agreement, or any
document, agreement, guaranty, or instrument executed in connection herewith.

         24. Remedies Upon Default. Upon the occurrence of an Event of Default,
after notice has been provided to Borrower by Lender in accordance with Section
26 of this Agreement and after the expiration of any applicable cure period,
Lender may pursue any or all of the following remedies, without any further
notice to Borrower, except as required below, to allow Lender to proceed against
the Collateral.

                  (a) Acceleration. Lender may declare the entire amount due
under the Promissory Note due and payable at once. The entire unpaid balance
shall continue to accrue interest at the rate specified in Section 6 above until
all amounts due hereunder have been paid in full.

                  (b) Collection of Collateral. Upon written notice by Lender,
Borrower shall not make any further attempt to collect or receive payment with
respect to any of the Collateral. Any such attempt after the giving of such
notice shall constitute a wrongful conversion of the Collateral. Lender may
obtain a

                                       16
<PAGE>   17

temporary restraining order or other equitable relief to enforce Borrower's
obligation to refrain from so impairing Lender's interest in the Collateral. To
the extent Borrower receives any collections or payments with respect to the
Collateral, Borrower shall hold such collections or payments in trust on behalf
of Lender and immediately turn the same over to Lender in the form so received.

                  (c) Repossession. Lender may take possession of any or all of
the Collateral and proceeds thereof.

                  (d) Disposition. Lender may dispose of the Collateral at
private or public sale. Any required notice of sale shall be deemed commercially
reasonable if given at least five (5) days prior to sale. Lender may adjourn any
public or private sale to a different time or place without notice or
publication of such adjournment, and may adjourn any sale either before or after
offers are received.

                  (e) Recovery of Proceeds of Collateral. Lender may recover any
or all proceeds of the Collateral from any bank, court or other custodian who
may have possession thereof. Borrower hereby authorizes and directs all
custodians of Borrower's assets to comply with any demand for payment made by
Lender pursuant to this Agreement, without the need of prior approval or
confirmation from Borrower and without making any inquiry as to the existence of
an Event of Default hereunder or any other matter. Lender may engage a
collection agent to collect the Collateral for a reasonable percentage
commission or under any other reasonable compensation arrangement.

                  (f) Enforcement of Rights of Collection. Lender may, but shall
not be obligated to, take such measures as Lender may deem necessary in order to
collect or otherwise liquidate the Collateral. Without limiting the foregoing,
Lender may institute or continue any administrative or judicial action that it
may deem necessary in the course of collecting and enforcing any or all of
Lender's rights in or under the Collateral. Any administrative or judicial
action or other action taken by Lender in the course of collecting the
Collateral may be taken by Lender in its own name or in Borrower's name. Lender
may compromise or settle any disputed claims, which compromises or settlements
shall be binding upon Borrower. Lender shall have no duty to pursue collection
of the Collateral, and may abandon efforts to collect the Collateral after such
efforts are initiated. All costs and expenses related to collection shall be the
responsibility of Borrower. Any deficiency balance owed Lender by Borrower shall
be a general claim against Borrower.

                  (g) Other Remedies. Lender may exercise any right that it may
have under any other document evidencing or securing the Loans or otherwise
available to Lender at law or equity.

                  (h) Application of Proceeds. All amounts received by Lender
for Borrower's account by exercise of its remedies hereunder shall be applied as
follows: first, to the payment of all expenses incurred by Lender in exercising
its rights hereunder, including reasonable attorneys' fees, and any other
expenses due Lender from Borrower; second, to the payment of all interest, if
any, outstanding under the Promissory Note in such order as Lender may elect;
third, to the payment of the Principal Sum outstanding under the Promissory
Note, in such order as Lender may elect; and, fourth, any excess to Borrower or
other party entitled thereto.

         25. Not Partners; No Third Party Beneficiaries. Nothing contained
herein or in any related document shall be deemed to render Lender a partner of
Borrower or Guarantor for any purpose. This Agreement has been executed for the
sole benefit of Lender and its assignees and affiliates, and no other third
party is authorized to rely upon Lender's rights hereunder or to rely upon an
assumption that Lender has or will exercise its rights under this Agreement or
under any document referred to herein.

                                       17
<PAGE>   18

         26. Notices. (a) All communications regarding this Agreement shall be
in writing and shall be deemed to have been duly given if (i) delivered
personally, (ii) mailed by certified mail, return receipt requested, (iii) sent
by facsimile and confirmed by first-class mail, or (iv) sent by commercial
overnight courier, addressed as follows:

         As to Borrower:

         Ciera Network Systems, Inc.
         2630 Fountainview, Suite 300
         Houston, Texas 77057
         Phone: (713) 914-3850
         Fax: (713) 914-3851
         Attention: Paul Licata

         with a copy to:

         Boyar & Miller
         Attn: Tim Heinrich, Esq.
         4265 San Felipe, Suite 1200
         Houston, Texas 77027
         (713) 850-7766
         (713) 552-1758

         As to Guarantor:

         CCC GlobalCom Corporation
         16350 Park Ten Place, Suite 241
         Houston, Texas 77084
         Phone: (281) 599-7877
         Fax: (281) 599-7878
         Attention: Paul Licata

         with a copy to:

         Boyar & Miller
         Attn: Tim Heinrich, Esq.
         4265 San Felipe, Suite 1200
         Houston, Texas 77027
         (713) 850-7766
         (713) 552-1758

                                       18
<PAGE>   19

         As to Lender:

         RFC Capital Corporation
         130 East Chestnut Street, Suite 400
         Columbus, Ohio 43215
         Phone: (614) 229-7979
         Fax: (614) 229-7980
         Attention: Patrick O. Quinton

         with a copy to:

         Porter, Wright, Morris & Arthur LLP
         Attn: Laura P. Kleinschmidt, Esq.
         41 South High Street, Suite 2800
         Columbus, Ohio 43215-6194
         Phone: (614) 227-2000
         Fax: (614) 227-2100

         (b) All communications regarding this Agreement shall be deemed to have
been duly given (i) when received by the intended recipient, if delivered in
accordance with items (i) or (ii) of paragraph (a) above, (b) when sent by
facsimile, if sent in accordance with item (iii) of paragraph (a) above, and (c)
the day after being delivered to a commercial overnight courier for overnight
delivery, if sent in accordance with item (iv) of paragraph (a) above.

         27. Indulgence Not Waiver. Lender's indulgence in the existence of an
Event of Default hereunder or any other departure from the terms of this
Agreement shall not prejudice Lender's rights to declare an Event of Default or
otherwise demand strict compliance with this Agreement.

         28. Cumulative Remedies. The remedies provided Lender in this Agreement
are not exclusive of any other remedies that may be available to Lender under
any other document or at law or equity.

         29. Term; Reinstatement. The security interest granted herein shall
continue until all amounts due and owing hereunder and all amounts included in
the secured indebtedness and secured hereby have been irrevocably paid in full.
If, after receipt of payment of all or any part of the Loans, Lender is for any
reason required to surrender such payment to any Person because such payment is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference or diversion of trust funds, or for any other reason, then the
Loans or part thereof intended to be satisfied shall be revived and this
Agreement and the security interests granted herein or in connection herewith
shall continue in full force as if such payment had not been made, and Borrower
shall be liable to Lender, and hereby indemnifies Lender against and holds
Lender harmless from, the amount of such surrendered payment. These provisions
shall remain effective notwithstanding any contrary action taken by Lender in
reliance on such payment which such action shall be deemed to have been
conditioned on such payment having become final and irrevocable. The provisions
of this Agreement are irrevocable. Upon final and irrevocable payment of the
Loans and all amounts included in the secured indebtedness and performance of
all of Borrower's obligations hereunder, all filings under the Uniform
Commercial Code will be terminated within a reasonable time and the provisions
of this Agreement shall terminate.

         30. Power of Attorney. Borrower hereby irrevocably constitutes and
appoints Lender and any officer or agent thereof, with full power of
substitution, as Borrower's true and lawful attorney-in-fact with full
irrevocable power and authority in its place and stead and in its name or in
Lender's own name, from time to time in Lender's discretion, for the purpose of
carrying out the terms of this Agreement, to take any

                                       19
<PAGE>   20

and all appropriate action and to execute any and all documents and instruments
that may be necessary or desirable to accomplish the purposes of this Agreement
and, without limiting the generality of the foregoing, hereby grants to Lender
the power and right, on behalf of Borrower, without notice to or assent: (a) to
execute, file and record all such financing statements, certificates of title
and other certificates of registration and operation and similar documents and
instruments as Lender may deem necessary or desirable to protect, perfect and
validate Lender's security interest in the Collateral; (b) to receive, collect,
take, indorse, sign, and deliver in Borrower's or Lender's name, any and all
checks, notes, drafts, or other documents or instruments relating to the
Collateral; and (c) upon the occurrence of an Event of Default, (i) to notify
postal authorities to change the address for delivery of Borrower's mail to an
address designated by Lender, (ii) to open such mail delivered to the designated
address, (iii) to sign and indorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and other documents
relating to the Collateral; (iv) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any part thereof and to enforce any other right in
respect of any Collateral; (v) to defend any suit, action or proceeding brought
with respect to any Collateral; (vi) to negotiate, settle, compromise or adjust
any account, suit, action or proceeding described above and, in connection
therewith, to give such discharges or releases as Lender may deem appropriate;
and (vii) generally, to sell, transfer, pledge, make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely as
though Lender were the absolute owner thereof for all purposes, and to do, at
Lender's option, at any time or from time to time, all acts and things which
Lender deems necessary to protect, preserve or realize upon the Collateral and
the Lender's security interest therein, in order to effect the intent of this
Agreement.

         Borrower hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable. The powers conferred upon Lender
hereunder are solely to protect its interests in the Collateral and shall not
impose any duty upon Lender to exercise any such powers. Lender shall be
accountable only for amounts that Lender actually receives as a result of the
exercise of such powers and neither Lender nor any of its officers, directors,
employees or agents shall be responsible to Borrower for any act or failure to
act, except for Lender's own gross negligence or willful misconduct, as
determined by a final non-appealable judgment by a court of competent
jurisdiction.

         31. Outstanding Loans. The outstanding principal amount of, and accrued
interest on, the Loans and the Interest Rate applicable to the Loans from time
to time, shall be, at all times, ascertained from the records of Lender and
shall be conclusive absent manifest error.

         32. Modifications and Course of Dealing. This Agreement constitutes the
entire agreement of Borrower, Lender and Guarantor relative to the subject
matter hereof. No modification of, or supplement to, this Agreement shall bind
Lender unless in writing and signed by an authorized officer of Lender. The
enumeration in this Agreement of Lender's rights and remedies is not intended to
be exclusive, and such rights and remedies are in addition to and not by way of
limitation of any other rights or remedies that Lender may have under the
Uniform Commercial Code or other applicable law. No course of dealing and no
delay or failure of Lender to exercise any right, power or privilege under this
Agreement, any other loan document or any other agreement will affect any other
or future exercise of such right, power or privilege. The exercise of any one
right, power or privilege shall not preclude the exercise of any others, all of
which shall be cumulative.

         33. Assignment and Participation. Neither Borrower nor Guarantor may
assign or transfer any of its rights or delegate any of its obligations under
this Agreement. Lender shall have the right, from time to time, without notice
to Borrower or Guarantor, to sell, assign or otherwise transfer its interest in
this Agreement and the Loans, either in whole or in part, to any other party or
enter into participation arrangements with any other party. Borrower and
Guarantor authorize Lender to deliver to potential assignees or participants

                                       20
<PAGE>   21

Borrower's and Guarantor's financial information and all other information
delivered to Lender pursuant to the terms of this Agreement.

         34. Expenses. Borrower agrees to pay, and to hold Lender harmless from
and against, all expenses associated with any amendments, waivers or consents
relating to this Agreement or any agreement or document executed or delivered
hereunder or arising in connection with Lender's enforcement or preservation of
its rights under this Agreement, including expenses incurred by Lender in the
collection of any of the Loans.

         35. Maximum Charges. In no event shall the interest rate and other
charges hereunder exceed the highest rate permissible under law which a court of
competent jurisdiction shall, in a final determination, deem applicable thereto.
In the event such a court determines that Lender has received interest and other
charges hereunder in excess of the highest rate applicable thereto, Lender shall
promptly refund such excess amount to Borrower, and the provisions hereof shall
be deemed amended to provide for such permissible rate.

         36. No Consequential Damages. No claim may be made by Borrower or
Guarantor, or any of their officers, directors, or agents against Lender or its
affiliates, directors, officers, employees, attorneys or agents for agents for
any special, indirect, punitive, or consequential damages in respect of any
breach or wrongful conduct (whether the claim therefor is based in contract,
tort or duty imposed by law) in connection with, arising out of or in any way
related to the transactions contemplated and the relationship established by
this Agreement, or any act, omission, or event occurring in connection
therewith, and Borrower and Guarantor, hereby waive, release, and agree not to
sue upon any such claim for any such damages, whether or not accrued and whether
or not know or suspected to exist in its favor.

         37. Binding Effect, Severability and Governing Law. This Agreement
shall not be deemed to create any right in any party except as provided herein
and shall inure to the benefit of, and be binding upon, the successors and
assigns of Borrower, Lender and Guarantor. All of Borrower's and Guarantor's
obligations under this Agreement are absolute and unconditional, shall not be
subject to any offset or deduction whatsoever. The provisions of this Agreement
are intended to be severable. If any provision of this Agreement is held invalid
or unenforceable in whole or in part, such provision will be ineffective to the
extent of such invalidity or unenforceability without in any manner effecting
the validity or enforceability of the remaining provisions of this Agreement.
THE PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO, WITHOUT REFERENCE TO APPLICABLE
CONFLICT OF LAW PRINCIPLES. BORROWER CONSENTS TO THE NON-EXCLUSIVE JURISDICTION
OF OHIO COURTS IN CONNECTION WITH THE RESOLUTION OF ANY DISPUTES RELATING TO
THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT EXECUTED OR DELIVERED
HEREUNDER. BORROWER AND GUARANTOR IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH EITHER PARTY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT.

BORROWER AND GUARANTOR HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS UPON
THEM AND CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
(RETURN RECEIPT REQUESTED) DIRECTED TO BORROWER AND/OR GUARANTOR AT THE ADDRESS
SET FORTH IN SECTION 26 OF THIS AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO
BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE
U.S. MAILS. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE
LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.

                                       21
<PAGE>   22

         38. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY
IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT,
AT LAW OR IN EQUITY WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS
AGREEMENT, THE OTHER FINANCING AGREEMENTS, THE OBLIGATIONS OF BORROWER AND
GUARANTOR, THE COLLATERAL, OR ANY INSTRUMENT, DOCUMENT OR GUARANTY DELIVERED
PURSUANT HERETO OR TO ANY OF THE FOREGOING, OR THE VALIDITY, PROTECTION,
INTERPRETATION, ADMINISTRATION, COLLECTION OR ENFORCEMENT HEREOF OR THEREOF, OR
ANY OTHER CLAIM OR DISPUTE HEREUNDER OR THEREUNDER. BORROWER AND GUARANTOR AGREE
THAT NEITHER WILL ASSERT AGAINST LENDER ANY CLAIM FOR CONSEQUENTIAL, INCIDENTAL,
SPECIAL, OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. NO OFFICER OF LENDER HAS AUTHORITY
TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.

         39. Survival. All warranties, representations, and covenants made by
Borrower and Guarantor herein or in any certificate or other instrument
delivered by it or on its behalf under this Agreement shall be considered to
have been relied upon by Lender and shall survive the closing of any and all
Loans regardless of any investigation made by Lender on its behalf. All
statements in any such certificate or other instrument shall constitute
representations and warranties by Borrower and Guarantor.

         40. Final Agreement. This Agreement is intended by Borrower, Lender and
Guarantor to be the final, complete, and exclusive expression of the agreement
between them. This Agreement supersedes any and all prior oral or written
agreements relating to the subject matter hereof. No modification, rescission,
waiver, release, or amendment of any provision of this Agreement or any other
loan document shall be made, except by a written agreement signed by Borrower,
Guarantor and a duly authorized officer of Lender.

         41. Counterparts. This Agreement may be executed in any number of
counterparts, and by Lender, Borrower and Guarantor in separate counterparts,
each of which shall be an original, but all of which shall taken together
constitute one and the same agreement.

         42. Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.

         43. Third Party Consultation. Borrower and Guarantor hereby agree and
acknowledge that each of them has had the opportunity to seek out and consult
with legal counsel and/or independent business advisors of its own choosing in
connection with the negotiation, execution and delivery of this Agreement. This
Agreement shall be construed without regard to any presumption or rule requiring
that it be construed against the party causing this Agreement, or any part
hereof, to be drafted.

                                       22
<PAGE>   23

         IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first above written.

BORROWER:                                    LENDER:

CIERA NETWORK SYSTEMS, INC.                  RFC CAPITAL CORPORATION

------------------------------------         -----------------------------------
By:      Robert Livingston                   By:      Patrick O. Quinton
Its:     Executive Vice President            Its:     Vice President

GUARANTOR:

CCC GLOBALCOM CORPORATION

------------------------------------
By:      Robert Livingston
Its:     Executive Vice President

                                       23
<PAGE>   24

Schedule 11(g): Permitted Liens and Encumbrances

Schedule 11(p): Schedule of Business Locations

Schedule 11(u): Schedule of Capital Structure

Exhibit A: Form of Stock Pledge Agreement

Exhibit B: Form of Compliance Certificate

Exhibit C: Form of Guaranty

                                       24

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