Document:

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                                                                 EXHIBIT 10.CC.4
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                           SECOND AMENDED AND RESTATED

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                          GARNET POWER HOLDINGS, L.L.C.

                           Dated as of April 24, 2002

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                                Project Gemstone

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ARTICLE I             FORMATION AND CONTINUATION OF GARNET.......................................................1

         Section 1.1         Formation and Continuation of Garnet................................................1
         Section 1.2         Name................................................................................2
         Section 1.3         Business of Garnet..................................................................2
         Section 1.4         Location of Principal Place of Business; Registered Office..........................2
         Section 1.5         Filings; Registered Agent...........................................................2
         Section 1.6         Term................................................................................3
         Section 1.7         Title to Garnet Property............................................................4
         Section 1.8         Payments of Individual Obligations..................................................4

ARTICLE II            DEFINITIONS................................................................................4

         Section 2.1         Definitions.........................................................................4
         Section 2.2         Rules of Construction...............................................................4

ARTICLE III           INTERESTS; MEMBERS; CAPITAL CONTRIBUTIONS; ADDITIONAL AGREEMENTS...........................4

         Section 3.1         Interests...........................................................................4
         Section 3.2         Garnet Preferred Member and Garnet Common Member....................................5
         Section 3.3         Additional Capital Contributions....................................................5
         Section 3.4         Additional Agreements Among Members.................................................7

ARTICLE IV            ALLOCATION OF NET INCOME AND NET LOSS......................................................8

         Section 4.1         Allocation of Garnet Net Income and Garnet Net Losses...............................8
         Section 4.2         Allocations After the Extension Period or the Garnet Mark-to-Market
                             Measurement Date...................................................................10
         Section 4.3         [Reserved].........................................................................10
         Section 4.4         Special Tax Allocations............................................................10
         Section 4.5         Curative Allocations...............................................................14
         Section 4.6         [Reserved].........................................................................14
         Section 4.7         Other Allocation Rules.............................................................15
         Section 4.8         Tax Allocations; Code Section 704(c)...............................................15
         Section 4.9         Order of Allocations...............................................................16

ARTICLE V             DISTRIBUTIONS; WITHDRAWALS................................................................17

         Section 5.1         Distributions......................................................................17
         Section 5.2         More than One Garnet Preferred Member or Garnet Common Member......................18
         Section 5.3         Amounts Withheld...................................................................18
         Section 5.4         [Reserved].........................................................................18
         Section 5.5         [Reserved].........................................................................18
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ARTICLE VI            MANAGEMENT................................................................................19

         Section 6.1         Management of Garnet...............................................................19
         Section 6.2         Right to Rely on the Managing Member...............................................22
         Section 6.3         Decisions Requiring Unanimous Member Consent.......................................22
         Section 6.4         Consents of the Garnet Preferred Member............................................28
         Section 6.5         Duties and Obligations of the Managing Member......................................28
         Section 6.6         Compensation and Expenses..........................................................30
         Section 6.7         Demand on EPED B Demand Loans and Garnet Demand Loans Held by Garnet,
                             Amethyst and their Subsidiaries....................................................30
         Section 6.8         Execution of other Transaction Documents; Matters Relating to Amethyst.............31
         Section 6.9         Determination of Interest Rate on EPED B Demand Loans..............................31
         Section 6.10        Certain Assets.....................................................................32
         Section 6.11        Covenant of the Managing Member....................................................32
         Section 6.12        Certain Covenants Relating to the Separateness of Garnet...........................32

ARTICLE VII           ROLE OF NON-MANAGING MEMBERS..............................................................35

         Section 7.1         Rights or Powers...................................................................35
         Section 7.2         Voting Rights......................................................................35
         Section 7.3         Procedure for Consent..............................................................35
         Section 7.4         Special Rights of the Garnet Preferred Member......................................35

ARTICLE VIII          ACCOUNTING; BOOKS AND RECORDS.............................................................35

         Section 8.1         Accounting; Books and Records......................................................35
         Section 8.2         Reports............................................................................37
         Section 8.3         Tax Matters........................................................................38
         Section 8.4         Proprietary Information............................................................39

ARTICLE IX            AMENDMENTS; MEETINGS......................................................................40

         Section 9.1         Amendments.........................................................................40
         Section 9.2         Meetings of the Members............................................................40
         Section 9.3         Unanimous Consent..................................................................41

ARTICLE X             TRANSFERS OF INTERESTS....................................................................41

         Section 10.1        Restriction on Dispositions of Interests...........................................41
         Section 10.2        Prohibited Dispositions............................................................42

ARTICLE XI            GARNET ASSET REMEDY; EXTENSION PERIOD.....................................................42

         Section 11.1        [Reserved].........................................................................42
         Section 11.2        [Reserved].........................................................................42
         Section 11.3        Garnet Asset Remedy................................................................42
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         Section 11.4        Asset Sales........................................................................43
         Section 11.5        Extension Period...................................................................44

ARTICLE XII           DISSOLUTION AND WINDING UP................................................................45

         Section 12.1        Liquidating Events.................................................................45
         Section 12.2        Winding Up.........................................................................45
         Section 12.3        Restoration of Deficit Capital Accounts; Compliance With Timing
                             Requirements of Regulations........................................................46
         Section 12.4        Deemed Distribution and Recontribution.............................................47
         Section 12.5        Rights of Members..................................................................47
         Section 12.6        Notice of Dissolution..............................................................47
         Section 12.7        Character of Liquidating Distributions.............................................47
         Section 12.8        The Liquidator.....................................................................47
         Section 12.9        Form of Liquidating Distributions..................................................48
         Section 12.10       Liquidation Notice.................................................................48

ARTICLE XIII          MISCELLANEOUS.............................................................................49

         Section 13.1        Amendments.........................................................................49
         Section 13.2        Notices............................................................................49
         Section 13.3        No Waiver; Cumulative Remedies.....................................................50
         Section 13.4        Waiver of Jury Trial...............................................................50
         Section 13.5        Counterparts.......................................................................50
         Section 13.6        Survival of Representations, Warranties and Indemnities; Entire Agreement..........50
         Section 13.7        Severability.......................................................................51
         Section 13.8        Construction.......................................................................51
         Section 13.9        [Reserved].........................................................................51
         Section 13.10       Governing Law......................................................................51
         Section 13.11       Waiver of Action for Partition.....................................................51
         Section 13.12       Consent to Jurisdiction............................................................51
         Section 13.13       Specific Performance...............................................................52
         Section 13.14       [Reserved].........................................................................52
         Section 13.15       Acknowledgement and Consent to Collateral Agreement................................52
         Section 13.16       Effectiveness......................................................................52
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                                TABLE OF CONTENTS

                                    SCHEDULES

         Schedule 3.2(a)        Members and Capital Accounts
         Schedule 3.2(b)        Specified Garnet Assets
         Schedule 6.3(w)(i)     Budget Parameters
         Schedule 13.2          Notice Information

                                    EXHIBITS

         Exhibit A:             Form of Membership Interest

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                           SECOND AMENDED AND RESTATED

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                          GARNET POWER HOLDINGS, L.L.C.

                  SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT (this "GARNET LLC AGREEMENT") of GARNET POWER HOLDINGS, L.L.C.
("GARNET"), dated as of April 24, 2002, among GARNET, EPED B Company, an
exempted company incorporated in the Cayman Islands ("EPED B"), and Citrine FC
Company, an exempted company incorporated in the Cayman Islands ("CITRINE").

                             PRELIMINARY STATEMENTS

         Garnet was formed as a limited liability company under and pursuant to
the provisions of the LLC Act, with EPED B as the initial member of Garnet,
pursuant to the filing of the Garnet Certificate of Formation on September 6,
2001 and the execution of the Limited Liability Company Agreement of Garnet
Power Holdings, L.L.C. dated as of September 6, 2001 (the "ORIGINAL GARNET LLC
AGREEMENT"), as amended and restated by that certain Amended and Restated
Limited Liability Company Agreement, dated as of November 1, 2001 (the "EXISTING
GARNET LLC AGREEMENT").

         On the Closing Date, (i) Citrine was admitted to Garnet as the sole
Garnet Preferred Member, (ii) Citrine made a Cash Capital Contribution in the
amount of $295,000,000 to Garnet, (iii) EPED B was converted to and admitted as
the sole Garnet Common Member and the Managing Member of Garnet, (iv) EPED B
made a Capital Contribution to Garnet of certain Brazilian power projects, (v)
Garnet made a Capital Contribution to Diamond Power Ventures, L.L.C. ("DIAMOND")
of Cash in the amount of $280,782,709.63 and of certain Brazilian power projects
and (vi) Garnet made a Capital Contribution of certain Brazilian power projects
to Amethyst Power Holdings, L.L.C. ("AMETHYST"), thereby increasing the value of
its investment represented by the Amethyst Interest.

         The parties hereto have agreed to enter into this Garnet LLC Agreement
to further amend and restate the Existing Garnet LLC Agreement effective on and
as of the Effective Date in accordance with Section 13.16.

                                    ARTICLE I

                      FORMATION AND CONTINUATION OF GARNET

         Section 1.1 Formation and Continuation of Garnet. Garnet was formed as
a limited liability company under the LLC Act by the filing of the Garnet
Certificate of Formation on September 6, 2001, with the Secretary of State. The
parties hereto agree to continue Garnet as a limited liability company. The
Members agree that the Existing Garnet LLC Agreement is hereby amended and
restated in its entirety as set forth in, and is hereby superseded in its
entirety by, this Garnet LLC Agreement effective as of the Effective Date.

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                                                            Garnet LLC Agreement

         Section 1.2 Name. The name of Garnet shall continue to be "Garnet Power
Holdings, L.L.C.", and all business of Garnet shall continue to be conducted in
such name or, in the discretion of the Managing Member, under any other name;
provided, however, that (a) in no event shall the name of Garnet include (i) the
name of the Garnet Preferred Member, (ii) to the extent that the Managing Member
shall have actual knowledge thereof, the name of any Affiliate of the Garnet
Preferred Member, (iii) the name of the Class A Shareholder or (iv) any
abbreviation of any name described in clause (i), (ii) or (iii), and (b) the
Managing Member may change the name of Garnet only upon executing and filing an
amendment to the Garnet Certificate of Formation.

         Section 1.3 Business of Garnet. The purposes of Garnet are limited to
(i) engaging in the business of owning investments in Garnet Permitted Assets,
managing, protecting and conserving such investments in Garnet Permitted Assets,
and making additional investments in Garnet Permitted Assets, (ii) entering
into, and performing its obligations under and consummating the transactions
contemplated by, the Transaction Documents and Amethyst Financing Documents to
which Garnet is a party, (iii) engaging in such additional business endeavors as
are permitted under this Garnet LLC Agreement and (iv) engaging in activities
related or incidental to the foregoing. Garnet, and the Managing Member on
behalf of Garnet, may enter into and perform Garnet's obligations under the
Transaction Documents which Garnet is a party and, subject to Sections 6.3 and
7.4, all documents, agreements, certificates and financing statements required
to be entered into in order to consummate the transactions contemplated thereby,
all without further act, vote or approval of any Person. The authorization set
forth in the preceding sentence shall not be deemed a restriction on the power
and authority of the Managing Member to enter into other agreements or documents
on behalf of Garnet in accordance with the terms of this Garnet LLC Agreement
and the other Transaction Documents to which Garnet is a party, and the Managing
Member is hereby directed by the Members to enter into on behalf of Garnet, the
Transaction Documents and Amethyst Financing Documents to which Garnet is or is
to be a party and which have not previously been entered into by or on behalf of
Garnet. The Managing Member shall have the power to do any and all acts
necessary, appropriate, proper, advisable, incidental or convenient to or in
furtherance of the purposes of Garnet set forth in this Section 1.3 and shall
have, without limitation, any and all powers that may be exercised on behalf of
Garnet by the Managing Member pursuant to Article VI.

         Section 1.4 Location of Principal Place of Business; Registered Office.
The principal place of business of Garnet shall be at c/o El Paso, Av. Pasteur,
154, Botafogo, Rio de Janeiro, Brazil. The registered office of Garnet in the
State of Delaware is located at c/o Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, New Castle County, Delaware
19890-0001, Attention: Corporate Trust Administration.

         Section 1.5 Filings; Registered Agent.

         (a) Filings. The Managing Member shall take any and all other actions
necessary to perfect and maintain the status of Garnet as a limited liability
company under the laws of the State of Delaware, including the preparation,
execution and filing of amendments to the Garnet Certificate of Formation and
such other certificates, documents and instruments as may be required by law. In
addition, the Managing Member in its sole discretion may register or qualify
Garnet as a limited liability company in any jurisdiction outside the United
States, including each

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                                                            Garnet LLC Agreement

other jurisdiction in which registration or qualification is necessary or
appropriate because the properties or activities of Garnet are located in that
jurisdiction; provided, however, that (i) Garnet shall not maintain a place of
business in any jurisdiction in the United States, (ii) the Managing Member
shall not cause any of the properties or activities of Garnet (whether directly
or indirectly through Project Companies or otherwise) to be located in any
jurisdiction in the United States, (iii) the Managing Member shall notify the
Garnet Preferred Member if, following reasonable investigation (which the
Managing Member shall be obligated to undertake), the Managing Member knows or
reasonably should know that, solely as a result of Garnet doing business in any
other such jurisdiction, the Garnet Preferred Member would be required under the
laws of such jurisdiction to qualify to do business in such jurisdiction and
(iv) Garnet shall not conduct business in any jurisdiction other than Brazil
wherein the conduct by Garnet of business in such jurisdiction would reasonably
be expected to subject the Garnet Preferred Member to any tax, penalty,
liability or cost except to the extent that (x) such tax, penalty, liability or
cost results from the activities of the Garnet Preferred Member in such
jurisdiction (other than those activities in connection with the transactions
contemplated hereby) or (y) the Garnet Preferred Member is indemnified (or would
have been indemnified if it had complied with the provisions of the Transaction
Documents applicable to it) for such tax, penalty, liability or cost under
Section 5.5 or 6.1(a) of the Participation Agreement or under any other
provision of this Garnet LLC Agreement or any other Transaction Document and
such tax, penalty, liability or cost is not a criminal penalty or liability.

         (b) Delivery of Certificates, etc. in Connection With Qualification of
Garnet. At the request of the Managing Member, each Member shall execute,
acknowledge, swear to and deliver all certificates and other instruments
conforming with this Garnet LLC Agreement that are necessary or appropriate to
form, qualify, continue and terminate Garnet as a limited liability company
under the laws of the State of Delaware and to qualify, continue and terminate
Garnet as a foreign limited liability company in all other jurisdictions in
which Garnet may so qualify, all to the extent contemplated and required by this
Garnet LLC Agreement.

         (c) Registered Agent. The registered agent for service of process on
Garnet in the State of Delaware shall be Wilmington Trust Company, 1100 North
Market Street, Wilmington, New Castle County, Delaware 19890-0001, Attention:
Corporate Trust Administration or any successor as appointed by the Managing
Member in accordance with the LLC Act.

         (d) Dissolution. Upon the dissolution and completion of the winding up
and liquidation of Garnet, the Liquidator, as an authorized person within the
meaning of the LLC Act, shall promptly execute and cause to be filed statements
of intent to dissolve and certificates of cancellation in accordance with the
LLC Act and the laws of any other states or jurisdictions in which the
Liquidator deems such filing necessary or advisable.

         Section 1.6 Term. The term of Garnet commenced on the date the
certificate of formation described in Section 18-201 of the LLC Act (as amended
from time to time, the "GARNET CERTIFICATE OF FORMATION") was filed in the
office of the Secretary of State in accordance with the LLC Act and shall
continue until the winding up and liquidation of Garnet and the completion of
its business following a Liquidating Event as provided in Article XII.

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         Section 1.7 Title to Garnet Property. All Garnet Property shall be
owned by Garnet as an entity, and no Member shall have any ownership interest in
such property in individual name or right. Each Member's interest in Garnet
shall be personal property for all purposes. Garnet shall hold all of its
property in the name of Garnet and not in the name of any Member.

         Section 1.8 Payments of Individual Obligations. Garnet's credit and
assets shall be used solely for the benefit of Garnet, and no asset of Garnet
shall be transferred or encumbered for or in payment of any individual
obligation of any Member.

                                   ARTICLE II

                                   DEFINITIONS

         Section 2.1 Definitions. Unless otherwise defined herein or the context
otherwise requires, capitalized terms used in this Garnet LLC Agreement
(including the Preliminary Statements and the Schedules and Exhibits hereto)
shall have the meanings set forth in Section 1.01 of Annex A to the Amended and
Restated Participation Agreement dated as of the Signing Date (as amended,
restated, supplemented or otherwise modified from time to time pursuant to the
provisions thereof and any other Transaction Document applicable thereto, the
"PARTICIPATION AGREEMENT"), among El Paso, EPED Holding, EPED B, Investor, the
Co-Issuer, Jewel, Topaz, Emerald, Citrine, Garnet, Diamond, Diamond Holdings,
Amethyst, Aquamarine, Peridot, the Share Trust, the Management Company (each, as
defined therein), Wilmington Trust Company and The Bank of New York.

         Section 2.2 Rules of Construction. This Garnet LLC Agreement and the
definitions referred to in Section 2.1 shall be governed by, and construed in
accordance with, the rules of construction set forth in Section 1.02 of Annex A
to the Participation Agreement.

                                   ARTICLE III

                           INTERESTS; MEMBERS; CAPITAL
                      CONTRIBUTIONS; ADDITIONAL AGREEMENTS

         Section 3.1 Interests. There shall be two classes of Garnet Interests:
a Garnet Preferred Member Interest and a Garnet Common Member Interest.
Certificates in the form attached as Exhibit A hereto (each, a "GARNET
CERTIFICATE OF INTEREST") shall be issued to each of the Garnet Preferred Member
and the Garnet Common Member to evidence their respective Garnet Interests
herein. Each of the parties hereto hereby acknowledges and agrees that the
Garnet Interests shall constitute "securities" governed by Article 8 of the
Uniform Commercial Code as in effect in any applicable jurisdiction. The holder
of the Garnet Preferred Member Interest shall have all of the rights and
obligations provided to the Garnet Preferred Member under this Garnet LLC
Agreement and the LLC Act and the holder of the Garnet Common Member Interest
shall have all of the rights and obligations provided to the Garnet Common
Member under this Garnet LLC Agreement and the LLC Act.

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         Section 3.2 Garnet Preferred Member and Garnet Common Member.

         (a) Garnet Preferred Member. On and as of the Closing Date, Citrine, as
Garnet Preferred Member, made a Capital Contribution to Garnet in Cash in the
amount of $295,000,000, and after giving effect to such Capital Contribution and
the other transactions effected on and as of the Closing Date, (i) the name and
address of the Garnet Preferred Member and the Capital Account balance of the
Garnet Preferred Member was reflected in the books and records of Garnet as set
forth in Schedule 3.2(a) hereto, and (ii) the Managing Member executed on behalf
of Garnet a Garnet Certificate of Interest in the name of the Garnet Preferred
Member representing its Garnet Preferred Member Interest.

         (b) Garnet Common Member. On and as of the Closing Date, EPED B's
interest in Garnet under the Original Garnet LLC Agreement was converted into a
Garnet Common Member Interest, and EPED B, as the Garnet Common Member, made
Capital Contributions to Garnet of (x) the Specified Garnet Assets identified on
Schedule 3.2(b) hereto and (y) the Specified Diamond Assets indicated on
Schedule 3.2(b) to the Diamond LLC Agreement as being contributed on the Closing
Date. After giving effect to such Capital Contributions and the other
transactions effected on and as of the Closing Date, (i) the name and address of
the Garnet Common Member and the Capital Account balance of the Garnet Common
Member on and as of the Closing Date was reflected in the books and records of
Garnet as set forth in Schedule 3.2(a) hereto, and (ii) the Managing Member
executed on behalf of Garnet a Garnet Certificate of Interest in the name of the
Garnet Common Member representing its Garnet Common Member Interest.

         Section 3.3 Additional Capital Contributions.

         (a) Capital Contributions by Garnet Common Member. The Garnet Common
Member shall be permitted (and, in the case of clauses (ii) and (iii), deemed)
to make the following additional Capital Contributions to Garnet:

                  (i) Capital Contributions of Garnet Permitted Assets. The
         Garnet Common Member may at any time (x) contribute to Garnet Cash,
         Financial Investments (other than Financial Investments of the type
         described in clause (g) of the definition thereof), EPED B Demand Loans
         and the Specified Diamond Assets indicated on Schedule 3.2(b) to the
         Diamond LLC Agreement as not being contributed on the Closing Date and
         (y) subject to Section 6.3(b), contribute to Garnet additional Garnet
         Permitted Assets.

                  (ii) Deemed Capital Contributions of External Proceeds. The
         Garnet Common Member shall be deemed to have made on any date that
         External Proceeds (without duplication) are distributed under Section
         5.05 of the Indenture and/or Section 5.05 of the New Indenture, a
         Capital Contribution to Garnet in an amount equal to the Diamond
         External Amount, the Garnet Common Member's Capital Account shall be
         increased by the amount of such deemed Capital Contribution and such
         deemed Capital Contribution shall be deemed to be contributed by Garnet
         to Diamond in respect of its Diamond Class B Member Interest pursuant
         to Section 3.3(a)(ii) of the Diamond LLC Agreement.

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                  (iii) Deemed Capital Contributions of Contingent Remarketing
         Proceeds. Any Contingent Remarketing Proceeds that are paid to Diamond
         under the Indenture shall be deemed to have been paid to Garnet as a
         Capital Contribution by the Garnet Common Member, the Garnet Common
         Member's Capital Account shall be increased by the amount of such
         deemed Capital Contribution and such deemed Capital Contribution of
         Contingent Remarketing Proceeds shall be deemed to be contributed by
         Garnet to Diamond in respect of its Diamond Class B Member Interest
         pursuant to Section 3.3(a)(iii) of the Diamond LLC Agreement.

                  (iv) [Reserved].

                  (v) Required Capital Contribution by the Garnet Common Member.
         (1) On the Extension Period Commencement Date, the Garnet Common Member
         shall make a Capital Contribution to Garnet of an amount equal to the
         excess (if any) of (A) the sum of (i) the aggregate Fair Market Value
         (as set forth on Schedule 3.2(b) to the Diamond LLC Agreement) of the
         Specified Diamond Assets indicated on Schedule 3.2(b) to the Diamond
         LLC Agreement as not being contributed on the Closing Date and (ii) the
         excess (if any) of (x) the aggregate amount of Distributions that have
         been made to the Garnet Common Member pursuant to Section 5.1(e) on or
         prior to the Extension Period Commencement Date over (y) the excess (if
         any) of (I) cumulative Garnet Net Income, Net Garnet Capital Gain and
         items of income and gain allocated to the Garnet Common Member for the
         current and all prior Allocation Periods pursuant to Sections 4.1 and
         4.4 over (II) cumulative Garnet Net Losses, Net Garnet Capital Loss and
         items of deduction and loss allocated to the Garnet Common Member for
         the current and all prior Allocation Periods pursuant to Sections 4.1
         and 4.4 over (B) the aggregate amount of Capital Contributions to
         Garnet made after the Closing Date but prior to the Extension Period
         Commencement Date by the Garnet Common Member pursuant to (x) Section
         3.3(a)(i) to the extent that the Garnet Common Member was not required
         to make such Capital Contribution pursuant to the terms hereof and (y)
         clause (2) of this Section 3.3(a)(v).

                  (2) If a Note Trigger Event or a Shareholder Trigger Event
         occurs prior to the Extension Period Commencement Date then, on the
         applicable Asset Remedy Standstill Expiration Date, the Garnet Common
         Member shall make a Capital Contribution to Garnet of an amount equal
         to the excess (if any) of (A) the aggregate Fair Market Value (as set
         forth on Schedule 3.2(b) to the Diamond LLC Agreement) of the Specified
         Diamond Assets indicated on Schedule 3.2(b) to the Diamond LLC
         Agreement as not being contributed on the Closing Date over (B) the
         aggregate amount of all Capital Contributions to Garnet made by the
         Garnet Common Member after the Closing Date but prior to the Asset
         Remedy Standstill Expiration Date pursuant to Section 3.3(a)(i) to the
         extent that the Garnet Common Member was not required to make such
         Capital Contributions pursuant to the terms hereof.

                  (3) If proceeds of (x) an Asset Remedy, (y) asset sales or
         asset realizations in connection with an acceleration of the New Notes
         as a result of a New Indenture Event of Default and the enforcement of,
         or levy on, any judgment obtained in connection therewith or (z) an
         Asset Disposition are distributed to the New Noteholders pursuant to
         Section 5.05 of the New Indenture, then the Garnet Common Member shall
         make a

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                                                            Garnet LLC Agreement

         Capital Contribution to Garnet no later than the earlier of (A) 12:00
         noon New York City time on the tenth Business Day following the
         repayment in full of the New Notes and (B) the occurrence of an "Event
         of Default" described in Section 7.1(e) of the El Paso Credit Facility
         Agreement with respect to El Paso (and regardless of whether notice is
         given to the Class B Member), in an amount equal to the aggregate
         amount of such proceeds distributed to the New Noteholders from time to
         time pursuant to the New Indenture.

         (b) [Reserved].

         (c) Capital Contributions by Garnet Preferred Member. The Garnet
Preferred Member may at any time (x) contribute to Garnet Cash, Financial
Investments (other than Financial Investments of the type described in clause
(g) of the definition thereof) and EPED B Demand Loans and (y) subject to
Section 6.3(b), contribute to Garnet additional Garnet Permitted Assets.

         (d) Manner of Payment; Interest on Overdue Payments. Payments under
this Section 3.3 will be made on the due date for value on that date, in Dollars
and immediately available funds. If the Garnet Common Member defaults in the
performance of any payment obligation under Section 3.3(a)(v), it will be
required to pay interest (before as well as after judgment) on the overdue
amount to Garnet on demand in the same currency and funds as the overdue amount,
for the period from (and including) the original due date for payment to (but
excluding) the date of actual payment, at a rate per annum equal to the
Alternate Base Rate plus 2% per annum. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.

         Section 3.4 Additional Agreements Among Members.

         (a) Return of Capital Contributions. Except as otherwise provided in
Article V or Article XII or in the LLC Act, no Member shall be entitled to
demand or receive a return of its Capital Contributions or withdraw its capital
from Garnet without the consent of all Members. Under circumstances requiring a
return of any Capital Contributions, no Member shall have the right to receive
property other than Cash except as specifically provided in this Garnet LLC
Agreement.

         (b) Return on Capital. No Member shall receive any interest or return
with respect to its Capital Contributions or its Capital Account, except as
otherwise provided in this Garnet LLC Agreement.

         (c) Obligations of Garnet. No Member (including the Managing Member)
shall be liable for the debts, liabilities, contracts or any other Obligations
of Garnet. Except as otherwise required by mandatory provisions of Applicable
Law or the provisions of this Article III and Section 12.3, a Member shall not
be required to lend any funds to Garnet or to make any additional Capital
Contributions to Garnet. No Member shall have personal liability for the
repayment of any Capital Contributions of the other Members.

         (d) Other Investments. Subject, in the case of the Managing Member, to
Sections 6.5(d) and 6.5(e), each Member acknowledges that the other Members and
their Affiliates are free to engage or invest in an unlimited number of
activities or businesses, any one

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                                                            Garnet LLC Agreement

or more of which may be related to the activities or businesses of Garnet,
without having or incurring any obligation to offer any interest in such
activities or businesses to Garnet or any Member, and neither this Garnet LLC
Agreement nor any activity undertaken pursuant to this Garnet LLC Agreement
shall prevent any Member or its Affiliates from engaging in such activities, or
require any Member to permit Garnet or any Member or its Affiliates to
participate in any such activities, and as a material part of the consideration
for the execution of this Garnet LLC Agreement by each Member, each Member
hereby waives, relinquishes, and renounces any such right or claim of
participation. Each Member acknowledges that certain conflicts of interest may
thus arise and hereby agrees that the specific rights with respect to the
Members' and their Affiliates' freedom of action provided in this Section
3.4(d), together with the other provisions of this Garnet LLC Agreement, are
sufficient to protect their respective interests in relation to such possible
conflicts and are to be in lieu of all other possible limitations which might
otherwise be implied in fact, in law or in equity.

                                   ARTICLE IV

                      ALLOCATION OF NET INCOME AND NET LOSS

         Section 4.1 Allocation of Garnet Net Income and Garnet Net Losses. The
Members agree to treat Garnet as a partnership and the Garnet Members as
partners thereof for U.S. federal income tax purposes and shall file all tax
returns accordingly. Except as otherwise provided in this Article IV, Garnet Net
Income or Garnet Net Losses, as the case may be, and each item of income, gain,
loss and deduction entering into the computation thereof, for each Allocation
Period ending prior to the earlier of (x) the day immediately following a Garnet
Mark-to-Market Measurement Date and (y) the Extension Period Termination Date,
shall be allocated to the Garnet Members as follows:

         (a) Garnet Net Income. Garnet Net Income shall be allocated in the
following order and priority:

                  (i) First, 100% to the Garnet Common Member in an amount equal
         to the excess, if any, of (x) the cumulative Garnet Net Losses and
         items of deduction and loss allocated to the Garnet Common Member
         pursuant to Section 4.1(b)(v) for all prior Allocation Periods, over
         (y) the sum of (I) the cumulative Garnet Net Income and items of income
         and gain allocated to the Garnet Common Member pursuant to this Section
         4.1(a)(i) for all prior Allocation Periods and (II) the cumulative Net
         Garnet Capital Gain allocated to the Garnet Common Member pursuant to
         Section 4.4(c)(iv) for the current and all prior Allocation Periods;

                  (ii) Second, 100% to the Garnet Preferred Member in an amount
         equal to the excess, if any, of (x) the cumulative Garnet Net Losses
         and items of deduction and loss allocated to the Garnet Preferred
         Member pursuant to Section 4.1(b)(iv) for all prior Allocation Periods,
         over (y) the sum of (I) the cumulative Garnet Net Income and items of
         income and gain allocated to the Garnet Preferred Member pursuant to
         this Section 4.1(a)(ii) for all prior Allocation Periods and (II) the
         cumulative Net Garnet Capital Gain allocated to the Garnet Preferred
         Member pursuant to Section 4.4(c)(v) for the current and all prior
         Allocation Periods;

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                                                            Garnet LLC Agreement

                  (iii) Third, 100% to the Garnet Common Member in an amount
         equal to the excess, if any, of (x) the cumulative Garnet Net Losses
         and items of deduction and loss allocated to the Garnet Common Member
         pursuant to Section 4.1(b)(iii) for all prior Allocation Periods, over
         (y) the sum of (I) the cumulative Garnet Net Income and items of income
         and gain allocated to the Garnet Common Member pursuant to this Section
         4.1(a)(iii) for all prior Allocation Periods and (II) the cumulative
         Net Garnet Capital Gain allocated to the Garnet Common Member pursuant
         to Section 4.4(c)(vi) for the current and all prior Allocation Periods;

                  (iv) Fourth, 100% to the Garnet Common Member in an amount
         equal to the excess, if any, of (x) the cumulative amount of Net Garnet
         Capital Loss allocated to the Garnet Common Member pursuant to Section
         4.4(b)(v) for the current and all prior Allocation Periods, over (y)
         the sum of (I) the cumulative Garnet Net Income and items of income and
         gain allocated to the Garnet Common Member pursuant to this Section
         4.1(a)(iv) for all prior Allocation Periods and (II) the cumulative Net
         Garnet Capital Gain allocated to the Garnet Common Member pursuant to
         Section 4.4(c)(i) for the current and all prior Allocation Periods;

                  (v) Fifth, 100% to the Garnet Preferred Member in an amount
         equal to the excess, if any, of (x) the cumulative amount of Net Garnet
         Capital Loss allocated to the Garnet Preferred Member pursuant to
         Section 4.4(b)(iv) for the current and all prior Allocation Periods,
         over (y) the sum of (I) the cumulative Garnet Net Income and items of
         income and gain allocated to the Garnet Preferred Member pursuant to
         this Section 4.1(a)(v) for all prior Allocation Periods and (II) the
         cumulative Net Garnet Capital Gain allocated to the Garnet Preferred
         Member pursuant to Section 4.4(c)(ii) for the current and all prior
         Allocation Periods;

                  (vi) Sixth, 100% to the Garnet Common Member in an amount
         equal to the excess, if any, of (x) the cumulative amount of Net Garnet
         Capital Loss allocated to the Garnet Common Member pursuant to Section
         4.4(b)(iii) for the current and all prior Allocation Periods, over (y)
         the sum of (I) the cumulative Garnet Net Income and items of income and
         gain allocated to the Garnet Common Member pursuant to this Section
         4.1(a)(vi) for all prior Allocation Periods and (II) the cumulative Net
         Garnet Capital Gain allocated to the Garnet Common Member pursuant to
         Section 4.4(c)(iii) for the current and all prior Allocation Periods;
         and

                  (vii) Seventh, 5% to the Garnet Preferred Member and 95% to
         the Garnet Common Member of the remainder, if any.

         (b) Garnet Net Losses. Garnet Net Losses shall be allocated in the
following order and priority:

                  (i) First, 5% to the Garnet Preferred Member and 95% to the
         Garnet Common Member in an amount equal to the excess, if any, of (x)
         the cumulative Garnet Net Income and items of income and gain allocated
         to the Garnet Members pursuant to Section 4.1(a)(vii) for all prior
         Allocation Periods, over (y) the sum of (I) the cumulative Garnet Net
         Losses and items of deduction and loss allocated to the Garnet Members

                                       9
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                                                            Garnet LLC Agreement

         pursuant to this Section 4.1(b)(i) for all prior Allocation Periods and
         (II) the cumulative Net Garnet Capital Loss allocated to the Garnet
         Members pursuant to Section 4.4(b)(ii) for the current and all prior
         Allocation Periods;

                  (ii) Second, 90% to the Garnet Preferred Member and 10% to the
         Garnet Common Member in an amount equal to the excess, if any, of (x)
         the cumulative Net Garnet Capital Gain allocated to the Garnet Members
         pursuant to Section 4.4(c)(vii) for the current and prior Allocation
         Periods, over (y) the sum of (I) the cumulative Garnet Net Losses and
         items of deduction and loss allocated to the Garnet Members pursuant to
         this Section 4.1(b)(ii) for all prior Allocation Periods and (II) the
         cumulative Net Garnet Capital Loss allocated to the Garnet Members
         pursuant to Section 4.4(b)(i) for the current and all prior Allocation
         Periods;

                  (iii) Third, 100% to the Garnet Common Member until its
         positive Capital Account balance equals zero;

                  (iv) Fourth, 100% to the Garnet Preferred Member until (x) the
         sum of (I) the cumulative amount of Garnet Net Losses and items of
         deduction and loss allocated pursuant to this Section 4.1(b)(iv) in the
         current and all prior Allocation Periods and (II) the cumulative amount
         of Net Garnet Capital Loss allocated pursuant to Section 4.4(b)(iv) in
         the current and all prior Allocation Periods exceeds (y) the sum of (I)
         the cumulative Garnet Net Income and items of income and gain allocated
         to the Garnet Preferred Member pursuant to Section 4.1(a)(vii) for all
         prior Allocation Periods and (II) the cumulative Net Garnet Capital
         Gain allocated to the Garnet Preferred Member pursuant to Section
         4.4(c)(vii) for the current and all prior Allocation Periods, by $15
         million; and

                  (v) Fifth, 100% of the remainder, if any, to the Garnet Common
         Member.

         Section 4.2 Allocations After the Extension Period or the Garnet
Mark-to-Market Measurement Date. If no Garnet Liquidating Event shall have
occurred, then for each Allocation Period ending on or after the earlier of (a)
the day immediately following a Garnet Mark-to-Market Measurement Date and (b)
the Extension Period Termination Date, Garnet Net Income or Garnet Net Loss, as
the case may be, and each item of income, gain, loss or deduction shall be
allocated 100% to the Garnet Common Member, except as provided in the Garnet
Regulatory Allocations.

         Section 4.3 [Reserved].

         Section 4.4 Special Tax Allocations.

         (a) Items Relating to Garnet Extraordinary Liabilities.

                  (i) Items of deduction in an amount equal to Extraordinary
         Liabilities incurred by Garnet in any Allocation Period (including
         Garnet's allocable share of any Extraordinary Liabilities incurred by
         Diamond) shall be allocated 100% to the Garnet Common Member.

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                                                            Garnet LLC Agreement

                  (ii) Items of Gross Income in an amount equal to the Expense
         Recoveries realized by Garnet (including Garnet's allocable share of
         any Expense Recoveries realized by Diamond) or any Garnet Project
         Company in any Allocation Period shall be allocated 100% to the Garnet
         Common Member in such Allocation Period.

         (b) Net Garnet Capital Loss. All items of Net Garnet Capital Loss that
are recognized by Garnet or allocated to Garnet in any Allocation Period shall
be specially allocated in the following order and priority:

                  (i) First, 90% to the Garnet Preferred Member and 10% to the
         Garnet Common Member to the extent of the excess, if any, of (x) the
         cumulative Net Garnet Capital Gain allocated to the Garnet Members
         pursuant to Section 4.4(c)(vii) for all prior Allocation Periods, over
         (y) the sum of (I) the cumulative Net Garnet Capital Loss allocated
         pursuant to this Section 4.4(b)(i) for all prior Allocation Periods and
         (II) the cumulative Garnet Net Losses allocated pursuant to Section
         4.1(b)(ii) for all prior Allocations Periods;

                  (ii) Second, 5% to the Garnet Preferred Member and 95% to the
         Garnet Common Member to the extent of the excess, if any, of (x) the
         cumulative Garnet Net Income allocated to the Garnet Members pursuant
         to Section 4.1(a)(vii) for all prior Allocation Periods, over (y) the
         sum of (I) the cumulative Net Garnet Capital Loss allocated to the
         Garnet Members pursuant to this Section 4.4(b)(ii) for all prior
         Allocation Periods and (II) the cumulative Garnet Net Losses allocated
         to the Garnet Members pursuant to Section 4.1(b)(i) for all prior
         Allocation Periods;

                  (iii) Third, 100% to the Garnet Common Member until its
         positive Capital Account balance equals zero;

                  (iv) Fourth, 100% to the Garnet Preferred Member until (x) the
         sum of (I) the cumulative amount of Net Garnet Capital Loss allocated
         pursuant to this Section 4.4(b)(iv) for the current and all prior
         Allocation Periods and (II) the cumulative amount of Garnet Net Losses
         and items of deduction and loss allocated pursuant to Section
         4.1(b)(iv) in all prior Allocation Periods exceeds (y) the sum of (I)
         the cumulative Garnet Net Income and items of income and gain allocated
         to the Garnet Preferred Member pursuant to Section 4.1(a)(vii) for all
         prior Allocation Periods and (II) the cumulative Net Garnet Capital
         Gain allocated to the Garnet Preferred Member pursuant to Section
         4.4(c)(vii) for all prior Allocation Periods, by $15 million; and

                  (v) Fifth, 100% of the remainder, if any, to the Garnet Common
         Member.

         (c) Net Garnet Capital Gain. All items of Net Garnet Capital Gain that
are recognized by Garnet or allocated to Garnet in any Allocation Period shall
be specially allocated in the following order and priority:

                  (i) First, 100% to the Garnet Common Member in an amount equal
         to the excess, if any, of (x) the cumulative Net Garnet Capital Loss
         allocated to the Garnet Common Member pursuant to Section 4.4(b)(v) for
         all prior Allocation Periods, over (y) the sum of (I) the cumulative
         Net Garnet Capital Gain allocated to the Garnet

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                                                            Garnet LLC Agreement

         Common Member pursuant to this Section 4.4(c)(i) for all prior
         Allocation Periods and (II) the cumulative Garnet Net Income and items
         of income and gain allocated to the Garnet Common Member pursuant to
         Section 4.1(a)(iv) for all prior Allocation Periods;

                  (ii) Second, 100% to the Garnet Preferred Member in an amount
         equal to the excess, if any, of (x) the cumulative Net Garnet Capital
         Loss allocated to the Garnet Preferred Member pursuant to Section
         4.4(b)(iv) for all prior Allocation Periods, over (y) the sum of (I)
         the cumulative Net Garnet Capital Gain allocated to the Garnet
         Preferred Member pursuant to this Section 4.4(c)(ii) for all prior
         Allocation Periods and (II) the cumulative Garnet Net Income and items
         of income and gain allocated to the Garnet Preferred Member pursuant to
         Section 4.1(a)(v) for all prior Allocation Periods;

                  (iii) Third, 100% to the Garnet Common Member in an amount
         equal to the excess, if any, of (x) the cumulative Net Garnet Capital
         Loss allocated to the Garnet Common Member pursuant to Section
         4.4(b)(iii) for all prior Allocation Periods, over (y) the sum of (I)
         the cumulative Net Garnet Capital Gain allocated to the Garnet Common
         Member pursuant to this Section 4.4(c)(iii) for all prior Allocation
         Periods and (II) the cumulative Garnet Net Income and items of income
         and gain allocated to the Garnet Common Member pursuant to Section
         4.1(a)(vi) for all prior Allocation Periods;

                  (iv) Fourth, 100% to the Garnet Common Member in an amount
         equal to the excess, if any, of (x) the cumulative Garnet Net Losses
         and items of deduction and loss allocated to the Garnet Common Member
         pursuant to Section 4.1(b)(v) for all prior Allocation Periods, over
         (y) the sum of (I) the cumulative Net Garnet Capital Gain allocated to
         the Garnet Common Member pursuant to this Section 4.4(c)(iv) for all
         prior Allocation Periods and (II) the cumulative Garnet Net Income and
         items of income and gain allocated to the Garnet Common Member pursuant
         to Section 4.1(a)(i) for all prior Allocation Periods;

                  (v) Fifth, 100% to the Garnet Preferred Member in an amount
         equal to the excess, if any, of (x) the cumulative Garnet Net Losses
         and items of deduction and loss allocated to the Garnet Preferred
         Member pursuant to Section 4.1(b)(iv) for all prior Allocation Periods,
         over (y) the sum of (I) the cumulative Net Garnet Capital Gain
         allocated to the Garnet Preferred Member pursuant to this Section
         4.4(c)(v) for all prior Allocation Periods and (II) the cumulative
         Garnet Net Income and items of income and gain allocated to the Garnet
         Preferred Member pursuant to Section 4.1(a)(ii) for all prior
         Allocation Periods;

                  (vi) Sixth, 100% to the Garnet Common Member in an amount
         equal to the excess, if any, of (x) the cumulative Garnet Net Losses
         and items of deduction and loss allocated to the Garnet Common Member
         pursuant to Section 4.1(b)(iii) for all prior Allocation Periods, over
         (y) the sum of (I) the cumulative Net Garnet Capital Gain allocated to
         the Garnet Common Member pursuant to this Section 4.4(c)(vi) for all
         prior Allocation Periods and (II) the cumulative Garnet Net Income and
         items of income and gain allocated to the Garnet Common Member pursuant
         to Section 4.1(a)(iii) for all prior Allocation Periods; and

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                                                            Garnet LLC Agreement

                  (vii) Seventh, the remainder, if any, 90% to the Garnet
         Preferred Member and 10% to the Garnet Common Member.

         (d) Minimum Gain Chargeback/Member Minimum Gain Chargeback. If there is
a net decrease in "partnership minimum gain" (within the meaning of Regulation
Section 1.704-2(d)) for an Allocation Period with respect to Garnet, then there
shall be allocated to each Garnet Member items of income and gain of Garnet for
that Allocation Period (and if necessary subsequent Allocation Periods) equal to
that Garnet Member's share of the net decrease in partnership minimum gain
(within the meaning of Regulation Section 1.704-2(g)(2)), subject to the
exceptions set forth in Regulation Section 1.704-2(f)(2) and (3), and to any
exceptions provided by the Commissioner of the Internal Revenue Service pursuant
to Regulation Section 1.704-2(f)(5), provided, that if Garnet has any discretion
as to an exception provided pursuant to Regulation Section 1.704-2(f)(5), the
Tax Matters Member may exercise reasonable discretion on behalf of Garnet, which
discretion shall be exercised in good faith so as not to prejudice the interests
of any Garnet Member. The foregoing is intended to be a "minimum gain
chargeback" provision as described in Regulation Section 1.704-2(f) and shall be
interpreted and applied in all respects in accordance with that Regulation.

         If during an Allocation Period there is a net decrease in "partner
nonrecourse debt minimum gain" (as determined in accordance with Regulation
Section 1.704-2(i)(3)) with respect to Garnet, then, in addition to the amounts,
if any, allocated pursuant to the preceding paragraph, any Garnet Member with a
share of that partner nonrecourse debt minimum gain (determined in accordance
with Regulation Section 1.704-2(i)(5)) as of the beginning of the Allocation
Period shall, subject to the exceptions set forth in Regulation Section
1.704-2(i)(4), be allocated items of income and gain of such Allocation Period
for the Allocation Period (and, if necessary, for subsequent Allocation Periods)
equal to that Garnet Member's share of the net decrease in the partner
nonrecourse minimum gain. The foregoing is intended to be the "chargeback of
partner nonrecourse debt minimum gain" required by Regulation Section
1.704-2(i)(4) and shall be interpreted and applied in all respects in accordance
with that Regulation.

         (e) Qualified Income Offset. If during any Allocation Period a Garnet
Member unexpectedly receives any adjustment, allocation or distribution
described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), which
causes or increases a deficit balance in such Garnet Member's Adjusted Garnet
Capital Account, then there shall be allocated to such Member items of income
and gain (consisting of a pro rata portion of each item of income, including
gross income, and gain of Garnet for such Allocation Period) in an amount and
manner sufficient to eliminate such deficit as quickly as possible; provided,
that an allocation pursuant to this Section 4.4(e) shall be made only if and to
the extent that the Garnet Preferred Member would have a deficit balance in its
Adjusted Garnet Capital Account after all other allocations provided for in this
Article IV have been tentatively made as if this Section 4.4(e) were not in this
Garnet LLC Agreement. The foregoing is intended to be a "qualified income
offset" provision as described in Regulation Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted and applied in all respects in accordance with that
Regulation.

         (f) Member Nonrecourse Deductions. Notwithstanding anything to the
contrary in this Article IV, losses, deductions, or expenditures subject to Code
Section 705(a)(2)(B) that are attributable to a particular partner nonrecourse
liability shall be allocated to the Garnet Member

                                       13
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                                                            Garnet LLC Agreement

that bears the economic risk of loss for the liability in accordance with the
rules of Regulation Section 1.704-2(i).

         (g) Nonrecourse Deductions. Nonrecourse deductions, within the meaning
of Regulation Sections 1.704-2(b)(1) and 1.704-2(c) shall be allocated 100% to
the Garnet Common Member.

         (h) Section 754 Adjustments. To the extent Garnet Capital Accounts are
required under Code Section 734(b), including by reason of Regulation Section
1.704-1(b)(2)(iv)(m)(2) or (4), to reflect the adjustment to the adjusted tax
basis of an asset as a result of the distribution to the Garnet Preferred Member
in complete liquidation of the Garnet Preferred Member Interest, the amount of
such adjustment shall be treated as an item of gain (if the adjustment is an
increase) or loss (if the adjustment is a decrease) that is allocated to the
Garnet Members in accordance with their interests pursuant to Regulation Section
1.704-1(b)(2)(iv)(m)(2) or to the Member to whom such distribution was made
pursuant to Regulation Section 1.704-1(b)(2)(iv)(m)(4) as applicable.

         (i) Allocations Relating to Taxable Issuance of Membership Interests.
Any income, gain, loss or deduction realized as a direct or indirect result of
the issuance of an interest by Garnet to a Member, other than pursuant to Code
Section 707(a)(2) ("ISSUANCE ITEMS") shall be allocated among the Garnet Members
and other such allocations to be made under this Garnet LLC Agreement shall be
adjusted so that, to the extent possible, the net amount of such Issuance Items,
together with all other allocations under this Garnet LLC Agreement to the
Garnet Preferred Member, shall be equal to the net amount that would have been
allocated to such Member if the Issuance Items had not been realized.

         (j) Additional Financing Costs and Reimbursable Costs. Any Additional
Financing Costs and any Reimbursable Costs paid by Garnet for any Allocation
Period shall be allocated 100% to the Garnet Common Member.

         Section 4.5 Curative Allocations. The allocations set forth in Sections
4.4(d), 4.4(e), 4.4(f), 4.4(g), and 4.4(h) (the "GARNET REGULATORY ALLOCATIONS")
are intended to comply with certain requirements of the Regulations. It is the
intent of the Members that, to the extent possible, all Garnet Regulatory
Allocations shall be offset either with other Garnet Regulatory Allocations or
with allocations of other items of income, gain, loss or deduction of Garnet
pursuant to this Section 4.5. Therefore, notwithstanding any other provision of
this Article IV (other than the Garnet Regulatory Allocations), the Managing
Member shall make such offsetting allocations of income, gain, loss or deduction
of Garnet in whatever manner it determines to be appropriate so that, after such
offsetting allocations are made, each Member's Capital Account balance is, to
the extent possible, equal to the Capital Account balance such Member would have
had if the Garnet Regulatory Allocations were not part of this Garnet LLC
Agreement and all items of Garnet were allocated pursuant to this Article IV
without regard to the Garnet Regulatory Allocations. In exercising its
discretion under this Section 4.5, the Managing Member shall take into account
future Garnet Regulatory Allocations under Section 4.4(e) that, although not yet
made, are likely to offset other Garnet Regulatory Allocations previously made
under Sections 4.4(f) and 4.4(g).

         Section 4.6 [Reserved].

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                                                            Garnet LLC Agreement

         Section 4.7 Other Allocation Rules.

         (a) Garnet Net Income, Garnet Net Losses, Net Garnet Capital Gain, Net
Garnet Capital Loss and any other items of income, gain, loss or deduction shall
be allocated to the Garnet Members pursuant to this Article IV as of the last
day of each Allocation Period; provided that Garnet Net Income, Garnet Net
Losses, Net Garnet Capital Gain, Net Garnet Capital Loss and such other items
shall also be allocated at such other times as the Garnet Gross Asset Values of
Garnet Property are adjusted pursuant to clause (b) of the definition of Garnet
Gross Asset Value.

         (b) The Garnet Members hereby agree to be bound by the provisions of
this Article IV in reporting their shares of Garnet income and loss for income
tax purposes, except to the extent otherwise required by law. The Garnet Members
agree, for purposes of maintaining their Garnet Capital Accounts, to be bound by
the allocations contained in this Article IV, notwithstanding any allocations
for income tax purposes.

         (c) Solely for purposes of determining the Garnet Members'
proportionate share of the "excess non recourse liabilities" of Garnet within
the meaning of Regulation Section 1.752-3(a)(3), the Garnet Members' interests
in profits of Garnet are as follows: 0% to the Garnet Preferred Member and 100%
to the Garnet Common Member.

         (d) To the extent permitted by Regulation Section 1.704-2(h)(3), the
Managing Member shall endeavor to treat distributions of Cash as having been
made from the proceeds of a nonrecourse liability (within the meaning of
Regulation Section 1.704-2(b)(3)) only to the extent that such distributions
would cause or increase any deficit balance of the Garnet Preferred Member's
Adjusted Garnet Capital Account.

         Section 4.8 Tax Allocations; Code Section 704(c). In accordance with
Code Section 704(c) and the applicable Regulations thereunder, income, gain,
loss, and deduction with respect to any property contributed to Garnet shall,
solely for tax purposes, be allocated among the Garnet Members so as to take
account of any variation between the adjusted basis of such property to Garnet
for federal income tax purposes and its Initial Gross Asset Value.

         In the event the Garnet Gross Asset Value of any asset of Garnet is
adjusted pursuant to clause (b) or (d) of the definition of Garnet Gross Asset
Value, subsequent allocations of income, gain, loss, and deduction with respect
to such asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Garnet Gross Asset Value in
the same manner as under Code Section 704(c) and the applicable Regulations
thereunder.

         Any elections or other decisions relating to such allocations shall be
made by the Managing Member in any manner that reasonably reflects the purpose
and intention of this Garnet LLC Agreement; provided, that Garnet shall elect to
apply any allocation method permitted by the Regulations under Code Section
704(c). In furtherance of the foregoing, Garnet shall use any reasonable method,
in the discretion of the Managing Member, such that the amount of such tax items
allocable to the Garnet Preferred Member hereunder for any Allocation Period
shall be equal in the aggregate to the amount of book deductions allocable to
the Garnet Preferred Member hereunder for such Allocation Period. Allocations
pursuant to this Section 4.8

                                       15
<PAGE>
                                                            Garnet LLC Agreement

are solely for purposes of federal, state, and local taxes and shall not affect,
or in any way be taken into account in computing, any Garnet Member's Garnet
Capital Account or share of Net Income, Net Losses, other items or distributions
pursuant to any provision of this Garnet LLC Agreement.

         Except as otherwise provided in this Garnet LLC Agreement, for federal,
state and local income tax purposes, all items of income, gain, loss, deduction,
and any other allocations not otherwise provided for shall be allocated to the
Garnet Members in the same manner as its correlative item of "book" income,
gain, loss or deduction is allocated pursuant to Sections 4.1, 4.2 and 4.4.

         To the extent that allocations made pursuant to this Article IV for any
Allocation Period ending prior to the commencement of the Extension Period, if
any, include the allocation of an item of income or gain that is recaptured as
ordinary income under Code Sections 1245, 1250 and 1254 and that is attributable
to deductions taken prior to the Closing Date, such ordinary income shall be
allocated to the Member to whom the deduction was allocated.

         Section 4.9 Order of Allocations. All allocations made pursuant to this
Article IV shall be made in the following order:

                  (i)    Section 4.4(a);

                  (ii)   Section 4.4(j);

                  (iii)  Section 4.2;

                  (iv)   Section 4.4(b);

                  (v)    Section 4.4(c);

                  (vi)   Section 4.4(d);

                  (vii)  Section 4.4(e);

                  (viii) Section 4.4(f);

                  (ix)   Section 4.4(g);

                  (x)    Section 4.4(i); and

                  (xi)   Section 4.1.

         Such provisions shall be applied as if all distributions and
allocations were made at the end of the applicable Allocation Period. Where any
provision depends on the balance of a Capital Account of any Member, that
Capital Account shall be determined after the operation of all preceding
provisions for the applicable Allocation Period. These allocations shall be made
consistently with the requirements of Regulation Section 1.704-2(j).

                                       16
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                                                            Garnet LLC Agreement

                                    ARTICLE V

                           DISTRIBUTIONS; WITHDRAWALS

         Section 5.1 Distributions.

         (a) Required Payments in Respect of Emerald Loan. On each date on which
all or any portion of the principal amount of the Emerald Loan is due and
payable by Emerald pursuant to Article VII of the Emerald Loan Agreement, and
provided that Emerald does not have available funds with which to pay such
principal amount of the Emerald Loan, Garnet shall Distribute to the Garnet
Preferred Member on such date all Available Cash of Garnet in an amount not to
exceed the lesser of (i) the amount then due and payable by Emerald to Topaz in
respect of the principal of and interest on the Emerald Loan and (ii) the
positive balance of the Garnet Preferred Member's Capital Account (after taking
into account all allocations required to be made pursuant to Article IV as of
such date).

         (b) Extension Period. On or before 10:00 a.m. (New York City time) on
each Extension Period Payment Date (or, if such date is not a Business Day, on
the next succeeding Business Day), and provided that the Topaz Unrecovered
Capital of the Topaz Minority Member is greater than zero, Garnet shall
Distribute to the Garnet Preferred Member all Available Cash of Garnet, until
the Garnet Preferred Member's Capital Account equals zero or, if earlier, until
the Topaz Unrecovered Capital of the Topaz Minority Member is zero (after taking
into account all allocations required to be made pursuant to Article IV and any
Distributions required to be made pursuant to Section 5.1(a) as of such
Extension Period Payment Date).

         (c) Distributions in Connection with Asset Dispositions. In connection
with (A) the sale of or realization upon one or more assets pursuant to an
exercise of the Garnet Asset Remedy in connection with a Specified Equity Event
or (B) the consummation of an Asset Disposition, in each case prior to the
Extension Period Commencement Date, Garnet shall pay to the Garnet Preferred
Member, not later than 12:00 noon (New York City time) on the date of any such
sale of assets(s) or realizations(s), as applicable, (or, if such sale or
realization occurs after 11:00 a.m. (New York City time), not later than 12:00
noon on the next succeeding Business Day), Cash in an aggregate amount equal to
the lesser of (1) the aggregate proceeds of such sale, realization or
disposition, as applicable, and (2) the positive balance in the Garnet Preferred
Member's Capital Account, in each case, as of such date after taking into
account all allocations required to be made to the Garnet Preferred Member
pursuant to Article IV as of such date; provided, that the payment by Garnet
under this Section 5.1(c) of the proceeds of (A) any sale of or realization upon
assets pursuant to an exercise of the Garnet Asset Remedy in connection with a
Specified Equity Event after the repayment in full of all Outstanding Notes or
(B) the consummation of an Asset Disposition shall be subject to the right of
the Garnet Preferred Member to elect not to receive all or a portion of such
proceeds pursuant to Section 6.3(i).

         (d) Distributions in Cash. Except as permitted under Section 12.9, no
Distribution shall be made to the Garnet Preferred Member other than in the form
of Cash.

         (e) Distributions to Garnet Common Member. Prior to the Extension
Period Commencement Date and except to the extent such Available Cash is
required to be Distributed

                                       17
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                                                            Garnet LLC Agreement

as provided in Section 5.1(a), all Available Cash of Garnet (net of any such
Available Cash representing proceeds of Permitted Financial Obligations of
Project Companies) shall be Distributed to the Garnet Common Member on such
dates as the Garnet Common Member shall direct.

         (f) No Other Distributions. Except as provided in this Section 5.1,
Section 5.3, and Section 12.2, no other Distributions shall be permitted other
than any Distribution made with the consent of all the Members pursuant to
Section 6.3(i).

         Section 5.2 More than One Garnet Preferred Member or Garnet Common
Member.

         (a) More than One Garnet Preferred Member. In the event that there is
more than one Garnet Preferred Member, allocations to the Garnet Preferred
Member pursuant to Article IV, Distributions to the Garnet Preferred Member and
all other references in this Garnet LLC Agreement and the Transaction Documents
referring to amounts shall be divided among the Garnet Preferred Members in
proportion to their respective Garnet Preferred Percentages. All references in
this Garnet LLC Agreement and the other Transaction Documents to the Garnet
Preferred Member (or words of similar import) shall be deemed to refer to all of
such Garnet Preferred Members, collectively.

         (b) More than One Garnet Common Member. In the event that there is more
than one Garnet Common Member, allocations to the Garnet Common Member pursuant
to Article IV, Distributions to the Garnet Common Member and all other
references in this Garnet LLC Agreement and the other Transaction Documents
referring to amounts shall be divided among the Garnet Common Members in
proportion to their respective Garnet Common Percentages; provided, that all
other references to the Garnet Common Member (or words of similar import)
(including any provisions with respect to notices to or by the Garnet Common
Member or management rights of the Garnet Common Member) shall be deemed to
refer solely to the original Garnet Common Member.

         Section 5.3 Amounts Withheld. All amounts withheld or required to be
withheld pursuant to the Code or any provision of any state, local or foreign
Tax law, with respect to any payment, distribution or allocation to or by Garnet
or to or by the Members and treated by the Code (whether or not withheld
pursuant to the Code) or any other applicable Tax law as amounts payable by or
in respect of the Members or any Person owning an interest, directly or
indirectly, in such Member shall be treated as a Distribution to the Members
with respect to which such amount was withheld pursuant to this Article V for
all purposes under this Garnet LLC Agreement (including an appropriate debit to
such Member's Capital Account).

         Section 5.4 [Reserved].

         Section 5.5 [Reserved].

                                       18
<PAGE>
                                                            Garnet LLC Agreement

                                   ARTICLE VI

                                   MANAGEMENT

         Section 6.1 Management of Garnet.

         (a) Managing Member. The management of Garnet shall be vested in the
Managing Member, which shall be a "manager" within the meaning of the LLC Act,
and except as otherwise provided in this Garnet LLC Agreement, the Managing
Member shall have full power and authority to manage the business and affairs of
Garnet to the extent provided in the LLC Act, and no other Member shall have any
such management power or authority.

         The Garnet Common Member shall be the Managing Member at all times
prior to the appointment of a replacement Managing Member in accordance with
this Section 6.1(a). The Garnet Preferred Member shall have the right to remove
the Garnet Common Member as Managing Member upon the occurrence of any of the
following events: (i) the Bankruptcy of El Paso, EPED B, the Garnet Common
Member or the Share Trust; (ii) a material breach by (x) the Garnet Common
Member, in its capacity as Managing Member, of its obligations as Managing
Member under this Garnet LLC Agreement or its obligations under Section 5.04(f)
of the Collateral Agreement or (y) the Management Company of any covenant set
forth in the Management Agreement, which breach, in either case, continues and
is uncured in all material respects on the date occurring 30 days after the
Garnet Common Member, the Management Company, El Paso or any Affiliate of El
Paso receives written notice or has actual knowledge thereof; (iii) the gross
negligence or willful misconduct of (x) the Garnet Common Member, in its
capacity as Managing Member, in the performance of its obligations as Managing
Member under this Garnet LLC Agreement or (y) the Management Company in the
performance of its obligations under the Management Agreement; (iv) the removal
of (x) Garnet as the Diamond Managing Member pursuant to Section 6.1(a) of the
Diamond LLC Agreement or (y) EPED Holding as the Topaz Managing Member pursuant
to Section 6.1(a) of the Topaz LLC Agreement; (v) any representation or warranty
made by El Paso under Section 4.3 of the Participation Agreement shall prove to
have been incorrect in any material respect when made (or deemed made) and such
misrepresentation continues to remain materially incorrect for 30 days after the
earlier of (x) El Paso having actual knowledge of such misrepresentation and (y)
the giving of written notice of such misrepresentation to El Paso by the Class A
Shareholder; (vi) the 60th day following the occurrence of a Note Trigger Event;
(vii) a Specified Equity Event; (viii) the occurrence of an El Paso Debt
Obligation Repayment Event of the type described in clause (b) of the definition
thereof; (ix) the rendering of any final money judgment, enforceable in any
competent court, against any of Amethyst, Aquamarine or Peridot for payment in
an amount in excess of $100,000,000, and such judgment shall not be discharged
or dismissed or execution thereon stayed within 60 days after entry; (x) the
occurrence of any "event of default" pursuant to the terms of any indebtedness
or other obligation exceeding in the aggregate $10,000,000 in principal amount
of any of Amethyst, Aquamarine or Peridot, and such indebtedness or obligation
becomes due prior to its stated maturity as a result thereof; or (xi) the
occurrence of any "event of default" pursuant to the terms of any indebtedness
or other obligation (other than, so long as (A) the applicable "event of
default" is waived by El Paso or such Affiliate, as the case may be, and (B)
such "event of default" does not result in any "event of default" under the
terms of any other indebtedness or other obligation of any of Amethyst,

                                       19
<PAGE>
                                                            Garnet LLC Agreement

Aquamarine or Peridot owing to any Person other than El Paso or an Affiliate of
El Paso, any indebtedness or other obligation owing to El Paso or any Affiliate
of El Paso) exceeding in the aggregate $100,000,000 in principal amount of any
of Amethyst, Aquamarine or Peridot, which "event of default" causes, or permits
the holder or holders of such indebtedness or other obligation to cause, such
indebtedness or other obligation to become due prior to its stated maturity. The
Garnet Preferred Member shall exercise such right of removal by providing
written notice of such exercise to the Garnet Common Member after the occurrence
of any of the foregoing events and such notice shall become effective (x) in the
case of any notice under clause (i) or (vii) above, immediately and (y) in the
case of any notice under clause (ii), (iii), (iv), (v), (vi), (viii), (ix), (x)
or (xi) above, upon the expiration of the applicable grace and cure periods, if
any, referred to in any such clause; provided, however, that, in each case, if
the Share Purchase Option is exercised and consummated in accordance with
Section 7.1 of the Investor Shareholder Agreement, such notice shall be deemed
to have been revoked, the Garnet Preferred Member or its designee shall (unless
the Garnet Common Member shall be actively contesting such removal in good faith
by appropriate proceedings) without further act become the Managing Member of
Garnet for all purposes of this Garnet LLC Agreement and the Garnet Common
Member shall no longer be the Managing Member.

         The Garnet Preferred Member shall also have the right to remove the
Garnet Common Member as Managing Member by delivering written notice of its
exercise of such right of removal to the Garnet Common Member no earlier than
five days prior to the end of any Fiscal Quarter and no later than the tenth day
of the next succeeding Fiscal Quarter (each a "Quarterly Management Replacement
Window"); provided, that if such QMR Notice is not given by the Garnet Preferred
Member during any such Quarterly Management Replacement Window, then the Garnet
Common Member shall continue as Managing Member. If a QMR Notice is delivered
during a Quarterly Management Replacement Window and El Paso has not exercised
its Share Purchase Option in accordance with Section 7.1 of the Investor
Shareholders Agreement on or prior to the tenth day following such delivery,
then such QMR Notice shall become effective on such tenth day following delivery
of any such QMR Notice, and the Garnet Preferred Member or its designee shall,
on such tenth day, without further act become the Managing Member of Garnet for
all purposes of this Garnet LLC Agreement and the Garnet Common Member shall no
longer be the Managing Member; provided, however, that if El Paso exercises its
Share Purchase Option in accordance with Section 7.1 of the Investor Shareholder
Agreement on or prior to such tenth day after delivery of such QMR Notice, then
such QMR Notice shall not become effective until the sixtieth day following the
date of such exercise by El Paso of its Share Purchase Option and then if, and
only if, the Share Purchase Option shall not have been consummated prior to such
sixtieth day.

         (b) Authority of Managing Member. The Managing Member shall have the
authority on behalf and in the name of Garnet to perform all acts necessary and
desirable to the objects and purposes of Garnet, subject only to the
restrictions expressly set forth in this Garnet LLC Agreement (including
Sections 6.3 and 6.5) and subject to the rights of the Liquidator to liquidate
Garnet and take all actions incidental thereto in accordance with Article XII.
Subject to such restrictions, the authority of the Managing Member shall include
the authority to:

                  (i) engage in transactions and dealings on behalf of Garnet,
         including transactions and dealings with any Member or any Affiliate of
         any Member;

                                       20
<PAGE>

                                                            Garnet LLC Agreement

                  (ii) call meetings of Members or any class thereof;

                  (iii) vote any Equity Interests or Garnet Permitted Assets;

                  (iv) purchase or otherwise acquire, or dispose of, Garnet
         Permitted Assets and cause Amethyst to purchase or otherwise acquire,
         or dispose of, Amethyst Permitted Assets;

                  (v) determine and make Distributions, in Cash or otherwise, on
         the Garnet Interests in accordance with the provisions of this Garnet
         LLC Agreement and the LLC Act;

                  (vi) appoint (and dismiss from appointment) officers,
         attorneys and agents on behalf of Garnet, and engage (and dismiss from
         engagement) any and all Persons providing legal, accounting or
         financial services to Garnet, or such other Persons as the Managing
         Member reasonably deems necessary or desirable for the management and
         operation of Garnet;

                  (vii) incur and pay all expenses and obligations incidental to
         the operation and management of Garnet, including all Company Expenses
         of Garnet and all fees, expenses and other amounts payable pursuant to
         the Management Agreement;

                  (viii) open accounts (including, without limitation, the
         Garnet Investor's Account);

                  (ix) subject to Article XII, effect a dissolution of Garnet
         after the occurrence of a Liquidating Event;

                  (x) bring and defend (or settle) on behalf of Garnet actions
         and proceedings at law or equity before any court or governmental,
         administrative or other regulatory agency, body or commission or any
         arbitrator or otherwise;

                  (xi) prepare or cause to be prepared reports, statements and
         other relevant information for distribution to the Members as may be
         required by this Garnet LLC Agreement or the LLC Act and any additional
         information determined to be appropriate by the Managing Member from
         time to time;

                  (xii) subject to Section 7.4, execute, deliver and perform on
         behalf of Garnet, Garnet's obligations under and exercise on behalf of
         Garnet, Garnet's rights under, any Transaction Documents and Amethyst
         Financing Documents to which Garnet is a party, including any
         certificates and other documents and instruments related thereto;

                  (xiii) prepare and file all necessary returns and statements
         and pay all taxes, assessments and other impositions applicable to
         Garnet Property pursuant to Section 8.3; and

                                       21
<PAGE>

                                                            Garnet LLC Agreement

                  (xiv) execute all other documents or instruments, perform all
         duties, exercise all powers, and do all things for and on behalf of
         Garnet necessary or desirable to accomplish any of, or incidental to,
         the foregoing.

         The Managing Member is hereby authorized and directed to enter into the
Management Agreement, pursuant to which it will delegate to the Management
Company certain of its duties as Managing Member hereunder and on behalf of
Garnet, as sole member of Amethyst, as more specifically provided in the
Management Agreement, any or all of which duties may be subcontracted to third
Persons by the Management Company.

         Section 6.2 Right to Rely on the Managing Member.

         (a) Any Person dealing with Garnet may rely (without duty of further
inquiry) upon a certificate signed by the Managing Member as to:

                  (i) The identity of the Managing Member, the Garnet Preferred
         Member or the Garnet Common Member;

                  (ii) The existence or nonexistence of any fact or facts that
         constitute a condition precedent to acts by the Managing Member or that
         are in any other manner germane to the affairs of Garnet;

                  (iii) The Persons who are authorized to execute and deliver
         any instrument or document of Garnet; and

                  (iv) Any act or failure to act by Garnet or any other matter
         whatsoever involving Garnet or any Member.

         (b) The signature of the Managing Member shall be sufficient to convey
title to any property owned by Garnet, and all of the Members agree that a copy
of this Garnet LLC Agreement may be shown to the appropriate parties in order to
confirm the same, and further agree that the signature of the Managing Member
shall be sufficient to execute any documents necessary to effectuate this or any
other provision of this Garnet LLC Agreement.

         Section 6.3 Decisions Requiring Unanimous Member Consent.
Notwithstanding any power or authority granted the Managing Member under the LLC
Act, the Garnet Certificate of Formation or this Garnet LLC Agreement (including
Sections 6.1 and 6.5), the Managing Member may not make any decision or take any
action for which the consent of all the Members is expressly required by the
Garnet Certificate of Formation or this Garnet LLC Agreement, without first
obtaining such consent. Notwithstanding any power or authority granted to the
Managing Member under the LLC Act, the Garnet Certificate of Formation or this
Garnet LLC Agreement (including Sections 6.1 and 6.5), the Managing Member shall
not have the authority to, and covenants and agrees that it shall not, take any
of the following actions without the consent of all of the Members (provided
that no approval of the Garnet Common Member shall be required for any action of
the Garnet Preferred Member pursuant to Section 7.4, 11.3 or 11.4(a)):

                                       22
<PAGE>

                                                            Garnet LLC Agreement

         (a) Contravention. Act in contravention of this Garnet LLC Agreement or
any other Transaction Document applicable to Garnet or Amethyst or, when acting
on behalf of Garnet on its own account, or on behalf of Garnet as the sole
member of Amethyst, engage in activities inconsistent with the purposes of this
Garnet LLC Agreement, the purposes of the Amethyst LLC Agreement or the terms of
the Management Agreement, respectively;

         (b) Acquisitions. Cause or permit Garnet, or cause or permit Garnet to
cause or permit Amethyst, to acquire by purchase, contribution or exchange
(including by way of merger, liquidation or consolidation with or into any other
Person) in any single transaction or series of related transactions, Qualified
Energy Assets using equity of any of Amethyst, Diamond Holdings, Aquamarine
and/or Peridot in an amount in excess of $100,000,000 as consideration therefor
(excluding from such calculation Permitted Capital Expenditures and funds of
Amethyst, Diamond Holdings, Aquamarine and/or Peridot used in such acquisition
transaction that are derived from Permitted Financial Obligations of Amethyst,
Diamond Holdings, Aquamarine and/or Peridot, as the case may be, recourse for
the payment of which does not extend to assets of Amethyst, Diamond Holdings,
Aquamarine and/or Peridot, as applicable, other than Qualified Energy Assets of
such Person);

         (c) Character of Permitted Investments. (i) Cause or permit Garnet to
acquire, by purchase, contribution or exchange (including by way of merger,
liquidation or consolidation with or into any other Person), any assets other
than Garnet Permitted Assets or (ii) cause or permit Garnet to cause or permit
Amethyst to acquire by purchase, contribution or exchange (including by way of
merger, liquidation or consolidation with or into any other Person) any assets
other than Amethyst Permitted Assets, in each case, regardless of amount;

         (d) Dispositions by Garnet and Amethyst. (i) Cause or permit Garnet to
Dispose of any Garnet Property or (ii) cause or permit Garnet to cause or permit
Amethyst to Dispose of any Amethyst Property, other than (A) a Disposition that
constitutes (x) the granting of a Garnet Permitted Lien or (y) the realization
on any Garnet Permitted Lien other than such realization by El Paso or any of
its Affiliates; and (B) any Disposition of EPED B Demand Loans or Financial
Investments held by Garnet if the proceeds thereof are used by Garnet to acquire
additional Garnet Permitted Assets; provided, however, that the unanimous
consent of all the Members shall not be required to, and the Managing Member
shall have the authority and be permitted to, cause or permit any Disposition
described in this clause (d) if the consideration therefor is not less than the
Fair Market Value of the asset being Disposed of; provided, further, that this
clause (d) shall not apply to any Disposition of assets in connection with, or
to produce funds to successfully effect (x) Garnet's exercise of the Diamond
Purchase Option or the Diamond Retirement Option or the exercise of an Asset
Remedy or an Investor Asset Sale, (y) any enforcement of, or levy on, a judgment
obtained in accordance with Section 2.05(f) of the New Indenture by the New
Indenture Trustee or the New Noteholders in connection with the occurrence of a
New Indenture Event of Default or (z) an Asset Disposition;

         (e) Dispositions by Garnet Project Companies. With respect to Amethyst
and any other Garnet Project Company the disposition of assets of which is
subject to the unilateral control of Amethyst or as to which Amethyst has shared
control or consent, veto or other rights, cause or permit Garnet: (i) to cause
or permit Amethyst to Dispose of, (ii) to cause or permit Amethyst to cause or
permit any such Garnet Project Company to Dispose of, (iii) to cause or

                                       23
<PAGE>
                                                            Garnet LLC Agreement

permit Amethyst to exercise its shared control, consent, veto or other right to
cause or permit any such Garnet Project Company to Dispose of or (iv) to fail to
prevent any such Garnet Project Company from Disposing of, any Qualified Energy
Assets, other than (A) any Disposition of interests in Project Companies (other
than Amethyst) pursuant to any of the Project Documents and outside of the
control of El Paso or its Affiliates (including as required by applicable law,
applicable regulations or contractual obligations entered into in good faith and
in the ordinary course of business), (B) any Disposition in connection with
Ordinary Project Activities, (C) any Disposition or Dispositions of assets that
are worn out or obsolete, (D) the Disposition of assets that, in the aggregate
with all other assets Disposed of pursuant to this clause (D) during the
applicable calendar year, have an aggregate value of less than $40,000,000, (E)
any Disposition that constitutes the granting of a Lien in connection with
Amethyst Permitted Financial Obligations, (F) any Disposition that constitutes
the realization by any Person other than EPED B or any of its Affiliates on any
Lien granted in connection with Amethyst Permitted Financial Obligations, and
(G) any Disposition of EPED B Demand Loans, Garnet Demand Loans or Financial
Investments held by Amethyst or any other Garnet Project Company if the proceeds
thereof, as the case may be, are used by Amethyst or such other Garnet Project
Company, as the case may be, to acquire additional Amethyst Permitted Assets or,
in the case of any other Garnet Project Company, other assets (provided that any
such assets that are Energy Assets shall be located in the Americas (other than
the United States or Canada) but outside an Excluded Country); provided,
however, that in addition to the exceptions set forth above, the unanimous
consent of all the Members shall not be required to, and the Managing Member
shall have the authority and be permitted to, cause or permit any such
Disposition if the consideration therefor is not less than the Fair Market Value
of the asset being Disposed of; provided, further, that this clause (e) shall
not apply to any Disposition of assets in connection with, or to produce funds
used to successfully effect, (x) Garnet's exercise of the Diamond Purchase
Option or Diamond Retirement Option or the exercise of an Asset Remedy or an
Investor Asset Sale, (y) any enforcement of, or levy on, a judgment obtained in
accordance with Section 2.05(f) of the New Indenture by the New Indenture
Trustee or the New Noteholders in connection with the occurrence of a New
Indenture Event of Default or (z) an Asset Disposition;

         (f) [Reserved].

         (g) Indebtedness, Etc. (i) Cause or permit Garnet to incur, assume or
obligate itself by contract for any Permitted Financial Obligations owing by
Garnet (except that Garnet may enter into and incur obligations under any Garnet
Demand Loans and the Transaction Documents, including costs, expenses,
indemnities, fees including reasonable attorneys' and accountants' fees,
Additional Financing Costs and Taxes, and may incur obligations under the
Amethyst Pledge Agreement and any other pledge and/or security agreements
securing Amethyst Permitted Financial Obligations and limited in recourse as
required by such definition) or (ii) cause or permit Garnet to cause or permit
Amethyst to incur, assume or obligate itself by contract for any Permitted
Financial Obligations owing by Amethyst other than Amethyst Permitted Financial
Obligations and Company Expenses of Amethyst;

         (h) Issuance of Additional Garnet Interests; Admission of Additional
Members. (i) Cause or permit Garnet to issue Garnet Interests other than the
Garnet Preferred Member Interest and the Garnet Common Member Interest, or to
admit any Garnet Preferred Member or any Garnet Common Member to Garnet or (ii)
cause or permit Garnet to cause or permit

                                       24
<PAGE>
                                                            Garnet LLC Agreement

Amethyst to issue interests other than the Amethyst Interest or to admit any
members to Amethyst other than Garnet, in each of clause (i) and (ii), other
than pursuant to Article X or Article XI; provided, that Capital Contributions
permitted hereby and made by any existing Member of Garnet or by Garnet as the
sole member of Amethyst shall not constitute the admission of a member or the
issuance of Garnet Interests or ownership interests in Amethyst, as the case
may be;

         (i) Distributions or Redemptions of Member Interests. Cause or permit
(i) any Distribution in respect of Garnet Interests or member interests in
Amethyst or (ii) any redemption of Garnet Interests or member interests in
Amethyst, other than, in each case in clause (i) or (ii) above, as permitted or
contemplated by the Transaction Documents; provided, that the Garnet Preferred
Member may, by written notice to Garnet, elect not to receive all or any portion
of any payment by Garnet under Section 5.1(c) of the proceeds of (A) any sale of
or realization upon assets pursuant to an exercise of the Garnet Asset Remedy in
connection with a Specified Equity Event after the repayment in full of all
Outstanding Notes, or (B) the consummation of an Asset Disposition, and the
consent of the Garnet Common Member to such election shall be deemed to have
been given upon delivery of the written notice by the Garnet Preferred Member to
Garnet. Any amount not paid by Garnet pursuant to such election shall be treated
as amounts required to be Distributed pursuant to Section 5.1, and the Garnet
Preferred Member shall have the right to receive such amounts by consenting to a
payment by Garnet, to which the consent of the Garnet Common Member shall be
deemed to have been given, at any time to pay to the Garnet Preferred Member
Cash in an aggregate amount equal to the lesser of (1) the aggregate amount of
all such proceeds retained by Garnet pursuant to this Section 6.3(i), and (2)
the sum of the positive balance in the Garnet Preferred Member's Capital
Account, in each case, as of the date of such payment to the Garnet Preferred
Member after taking into account all allocations required to be made to the
Garnet Preferred Member pursuant to Article IV as of such date, and such
payments shall be treated, for GAAP accounting, tax and all other purposes of
the Transaction Documents, as set forth in Section 5.1(c).

         (j) Transactions with Affiliates. Cause or permit any violation of the
second sentence of Section 6.5(a)(ii);

         (k) Changes to Certain Transaction Documents. (i) Cause or consent to
any amendment, waiver or other modification of Garnet's rights or obligations
under any Transaction Document to which Garnet is a party, (ii) give or withhold
any consent or authorization required under any Transaction Document to which
Garnet is a party to the extent that Garnet is expressly entitled to give or
withhold such consent or authorization pursuant to the terms of such Transaction
Document to which Garnet is a party, or (iii) consent to any termination or
assignment by any other Person (other than the Garnet Preferred Member) party to
any Transaction Document to which Garnet is a party of such other Person's
rights or obligations thereunder to the extent that such termination or
assignment is expressly prohibited pursuant to the terms of such Transaction
Document to which Garnet is a party without the consent of Garnet (except, in
each case described in this clause (k), (x) to cure any ambiguity, omission,
defect or inconsistency (so long as such amendment, waiver or other modification
shall have no adverse effect on the Garnet Preferred Member) or (y) to comply
with Section 5.1(a) of the Participation Agreement), unless the Managing Member
shall have delivered to each Member a legal opinion of nationally recognized
outside counsel experienced in structured finance (including Jones, Day,

                                       25
<PAGE>

                                                            Garnet LLC Agreement

Reavis & Pogue) to the effect that such consent, authorization, amendment,
waiver or other modification (1) does not materially adversely affect the rights
or obligations of the Noteholders (if any Notes are then Outstanding) and/or the
rights or obligations of the New Noteholders (if any New Notes are then
Outstanding) and (2) does not modify Garnet's rights or obligations under any
Transaction Document to which it is a party (provided, that the opinion
described in this clause (2) shall not be required if El Paso shall have
consummated its Share Purchase Option);

         (l) Amendments to EPED B Demand Loans. Cause or consent to any
amendment, waiver or modification of any rights or obligations of Garnet or
Amethyst under, or cause or give any consent, approval or make any election
under, any EPED B Demand Loans, any Garnet Demand Loans or any EPED B/Garnet
Note; provided, however, that this clause (l) shall not apply to any demand for
payment under any EPED B Demand Loans, any Garnet Demand Loans or any EPED
B/Garnet Note in accordance with the terms thereof;

         (m) Mergers. Cause or permit Garnet, or cause or permit Garnet to cause
or permit Amethyst, to legally merge or consolidate with or into any Person or
to liquidate or to sell any or substantially all of its assets (other than
pursuant to Article XII);

         (n) Bankruptcy. Cause or permit Garnet, or cause or permit Garnet to
cause or permit Amethyst, to commence any Voluntary Bankruptcy, or commence, or
solicit others to commence, an Involuntary Bankruptcy against Amethyst;

         (o) [Reserved].

         (p) [Reserved].

         (q) Successor Manager Under Management Agreement. Cause or permit
Garnet (i) to cause the appointment of a successor manager to the Management
Company under the Management Agreement, except in accordance with Section 5 of
the Management Agreement and Section 7.4 hereof, or (ii) to fail to exercise its
rights to cause such an appointment if so requested by the Garnet Preferred
Member;

         (r) Pledge of Amethyst Interest. Enter into any contract, option,
arrangement or other undertaking with respect to the direct or indirect pledge
of the Amethyst Interest except pursuant to agreements or instruments securing
Amethyst Permitted Financial Obligations;

         (s) ERISA. Cause or permit Garnet or Amethyst to create or contribute
to any multiple employer plan, multi-employer plan or single-employer plan as
defined in Section 4001 of ERISA;

         (t) Possession of Property. Under any circumstances (i) possess Garnet
Property for other than a purpose of Garnet or (ii) cause or permit Garnet to
cause or permit Amethyst to possess Amethyst Property for other than an Amethyst
purpose;

         (u) [Reserved].

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                                                            Garnet LLC Agreement

         (v) Tax Treatment, etc. Take any of the following actions:

                  (i) Cause Garnet to be treated as a corporation or other
         association taxable as a corporation for federal income tax purposes or
         to take a position inconsistent with Garnet not being treated as a
         corporation or other association taxable as a corporation except as
         required by Applicable Law; or

                  (ii) Cause Amethyst to fail to be a disregarded entity for
         federal income tax purposes or to take a position inconsistent with
         such treatment except as required by Applicable Law.

         (w) Liens. Cause or permit Garnet or Amethyst to create, assume or
permit to exist any Lien whatsoever other than Permitted Liens;

         (x) Confessing Judgment. Cause Garnet or Amethyst to confess a judgment
against Garnet or Amethyst or settle or cause or permit a settlement of actions
in proceedings at law or in equity in relation to Garnet or Amethyst before any
court or other Governmental Authority, unless such confession of judgment or
settlement (i) is for an amount less than or equal to $1,000,000 or (ii) would
not have an Issuer Material Adverse Effect;

         (y) Limitation on Certain New Investments After Trigger Event. (i)
Cause or permit Garnet, (ii) cause or permit Garnet to cause or permit Amethyst,
or (iii) unless the applicable acquisition is outside of the control of El Paso
and its Affiliates, cause or permit Garnet to cause or permit Amethyst to cause
or permit any other Garnet Project Company, to acquire, by purchase,
contribution or exchange, any EPED B Demand Loans or Garnet Demand Loans after
the occurrence of a Note Trigger Event, Specified Equity Event, Shareholder
Trigger Event or El Paso Debt Obligation Repayment Event; or

         (z) Special Voting Rights After Note Trigger Event or During Extension
Period. At any time (1) during the period commencing upon the occurrence of a
Note Trigger Event or a Shareholder Trigger Event and ending on the Note Final
Payment Date or (2) during the Extension Period:

                  (i) Budgets. Approve or amend, or cause or permit Garnet to
         permit Amethyst to approve or amend, any annual aggregate operating or
         capital budget of Garnet or Amethyst, that El Paso has not certified
         (an "UNCERTIFIED BUDGET") as falling within Budget Parameters agreed to
         by the Members as of the Closing Date, as adjusted to account for
         additional acquisitions and/or dispositions; provided, that if the
         Members do not unanimously approve any such Uncertified Budget, the
         prior year's operating and capital budget (as adjusted to account for
         acquisitions, dispositions and inflation, the "TEMPORARY BUDGET") shall
         continue until a new operating and capital budget can be determined by
         a professional retained by the Members to prepare such new budget (a
         "REPLACEMENT BUDGET"), which Temporary Budget (pending preparation of a
         definitive Replacement Budget) and Replacement Budget (when it becomes
         definitive) shall be final and shall not require the approval of the
         Members;

                  (ii) Extension of Term. Cause or permit the extension of the
         term of Garnet or Amethyst;

                                       27
<PAGE>

                                                            Garnet LLC Agreement

                  (iii) Resignation as Managing Member. (i) Undertake to resign
         as the Managing Member of Garnet except in connection with any event
         referred to in Section 6.1(a) or (ii) cause or permit Garnet to
         undertake to resign or withdraw as the sole member of Amethyst; or

                  (iv) Fiscal Year. Cause or permit Garnet or Amethyst to change
         its Fiscal Year.

         Section 6.4 Consents of the Garnet Preferred Member. The Garnet
Preferred Member consents to the following actions by the Managing Member to the
extent that such actions require the consent of the Garnet Preferred Member
pursuant to Section 6.3 (but such consent shall not constitute a waiver of any
other provision hereof):

                  (a) The execution and delivery by the Managing Member, on
         behalf of Garnet or Amethyst, as applicable, of each Transaction
         Document and Amethyst Specified Credit Document to which Garnet or
         Amethyst is a party; and

                  (b) Any Restructuring entered into by any Garnet Project
         Company.

         Section 6.5 Duties and Obligations of the Managing Member.

         (a) Actions of Garnet. Anything in this Garnet LLC Agreement to the
contrary notwithstanding, for so long as any Obligation of Garnet is
outstanding, the Managing Member covenants to conduct the affairs of Garnet such
that:

                  (i) [Reserved].

                  (ii) Except as otherwise expressly provided in the Management
         Agreement, all transactions between El Paso (or any of its Affiliates),
         on the one hand, and any of Garnet or Garnet on behalf of Amethyst, on
         the other, shall be duly authorized and documented and recorded
         accurately in the appropriate books and records of such entities,
         except where normal industry practice does not normally require
         authorization or documentation. Except as otherwise expressly provided
         in the Management Agreement, the Managing Member shall not (x) cause or
         permit Garnet, (y) cause or permit Garnet to cause or permit Amethyst
         or (z) cause or permit Garnet to cause or permit Amethyst to cause or
         permit any other Garnet Project Company, to enter into any transaction
         with El Paso or any Affiliate of El Paso (other than transactions among
         Garnet and any of its Subsidiaries or among Subsidiaries of Garnet),
         other than transactions in any calendar quarter which, taken as a
         whole, are fair and reasonable to Garnet, Amethyst and the Garnet
         Project Companies and provide, in the aggregate, for receipt by Garnet,
         Amethyst and the Project Companies, taken as a whole, of fair
         consideration and reasonably equivalent value; provided, however, that
         nothing herein shall be deemed to prohibit or restrict any sales or
         transfers of assets to El Paso or its designee(s) pursuant to Section
         6.1(c)(v) of the Participation Agreement. The Members hereby agree that
         each of the Transaction Documents, the Amethyst Specified Credit
         Documents, the Aquamarine Specified Credit Documents and the Peridot
         Specified Credit Documents satisfies the standards set forth in the
         preceding sentence.

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<PAGE>

                                                            Garnet LLC Agreement

         (b) Trigger Events, Specified Equity Event and Liquidating Events. The
Managing Member shall notify the Members of the occurrence of any acceleration
of the New Notes as a result of a New Indenture Event of Default, Note Trigger
Event, Specified Equity Event, Shareholder Trigger Event or Liquidating Event or
any event that with notice or lapse of time or both would constitute such an
event and the action that the Managing Member has taken or proposes to take with
respect thereto, promptly, but no later than five Business Days, after any
Responsible Officer of El Paso has actual knowledge of such occurrence;
provided, that in the case of a Specified Equity Event, the Managing Member
shall provide the Members, within three Business Days after a Responsible
Officer of El Paso obtains knowledge of the occurrence of any Underlying Default
which is continuing or of any event not theretofore remedied which with notice
or lapse of time, or both, would constitute an Underlying Default, notice of
such occurrence together with a detailed statement by a Responsible Officer of
El Paso of the steps being taken by El Paso or the appropriate subsidiary of El
Paso to cure the effect of such Underlying Default.

         (c) Maintenance of Garnet's Existence, etc. At Garnet's expense, the
Managing Member shall take all actions that may be necessary or appropriate (i)
for the continuation of Garnet's valid existence as a limited liability company
under the laws of the State of Delaware and its qualification to do business
under the laws of each other jurisdiction in which such existence or
qualification is necessary to protect the limited liability of the Members or to
enable Garnet to conduct the business in which it is engaged or to perform its
obligations under any agreement to which it is a party, (ii) for the
accomplishment of Garnet's purposes, including the acquisition, management,
maintenance, preservation, and operation of Garnet Permitted Assets in
accordance with the provisions of this Garnet LLC Agreement and applicable laws
and regulations and (iii) to enforce Garnet's rights under each of the
Transaction Documents and the Amethyst Financing Documents to which Garnet is a
party and each EPED B/Garnet Note held by Garnet. Without limitation of the
foregoing, the Managing Member shall cause Garnet to maintain all licenses,
permits, registrations, authorizations, use agreements, consents, orders or
approvals of governmental or quasi-governmental agencies and authorities
(whether Federal, state, local, municipal or foreign) necessary to own its
properties and to conduct its activities in accordance with all applicable laws,
rules, regulations and orders, except where any failure to do so would not have
an Aggregate JV Material Adverse Effect or an Issuer Material Adverse Effect.

         (d) Devotion of Time; Other Activities. Without limitation of the
Management Company's obligations under the Management Agreement, the Managing
Member and any of its Affiliates shall be required to devote only such time to
the affairs of Garnet as is necessary to manage and operate Garnet, giving due
consideration to the provisions of the Management Agreement, and each such
Person shall be free to serve any other Person or enterprise in any capacity
that it may deem appropriate in its discretion.

         (e) Fiduciary Duty. Except as otherwise provided in the proviso to the
second sentence of Section 6.5(a)(ii), the Managing Member shall be under a
fiduciary duty to conduct the affairs of Garnet in the best interests of Garnet,
including the safekeeping and use of all Garnet Property and the use thereof for
the exclusive benefit of Garnet and will not conduct the affairs of Garnet so as
to benefit any other business now owned or hereafter acquired by any Member if
such conduct also produces a detriment to Garnet. Without limiting the foregoing

                                       29
<PAGE>

                                                            Garnet LLC Agreement

duty, the Managing Member shall perform its obligations hereunder using a degree
of skill and attention no less than that which El Paso exercises with respect to
its own business.

         (f) Making of Payments. Unless otherwise expressly provided herein, all
distributions or payments to the Members pursuant to any provision of this
Garnet LLC Agreement shall be made no later than 3:30 p.m., New York City time,
on the day of distribution or payment, and, at the time of any such distribution
or payment, the Managing Member shall provide to the Members a notice
identifying the nature of the distribution or payment, the Section or Sections
of this Garnet LLC Agreement pursuant to which it is being made and the amount
being distributed or paid pursuant to each such Section.

         (g) Compliance with Garnet LLC Agreement. The Managing Member shall
cause Garnet to comply with all of the obligations of Garnet set forth in this
Garnet LLC Agreement; provided, however, that the Managing Member shall have no
obligation to make any Cash distributions or other payments in respect of the
Garnet Preferred Member Interest under this Garnet LLC Agreement except to the
extent that there are funds on deposit in the Garnet Investor's Account that are
freely available to be applied to such payment at the time such payment is due,
and then only from such funds; and provided, further, that in no event shall the
Managing Member have any personal obligation or liability with respect to any
obligations of Garnet.

         (h) Notice Regarding Qualification to Do Business. The Managing Member
shall provide notice to the Members of any state or jurisdiction in which Garnet
is qualified to do business (other than its jurisdiction of organization and any
jurisdiction in which Garnet was qualified to do business on the Closing Date).

         (i) [Reserved].

         Section 6.6 Compensation and Expenses. Except as provided in Section
5.5 of the Participation Agreement, and except pursuant to, or as contemplated
by, the Management Agreement, no Member or Affiliate of any Member shall receive
any salary, fee, or draw for services rendered to or on behalf of Garnet or
otherwise in its capacity as a Member, nor shall any Member or Affiliate of any
Member be reimbursed for any expenses incurred by such Member or Affiliate on
behalf of Garnet or otherwise in its capacity as a Member; provided, however,
that the Managing Member shall be promptly reimbursed by Garnet for all
reasonable out-of-pocket costs and expenses incurred by the Managing Member or
its Affiliates in connection with the management and operation of Garnet.

         Section 6.7 Demand on EPED B Demand Loans and Garnet Demand Loans Held
by Garnet, Amethyst and their Subsidiaries. The Managing Member shall cause
Garnet, and shall cause Garnet to cause Amethyst to (x) make demand on the EPED
B Demand Loans and/or Garnet Demand Loans held by such Person and (y) cause any
Subsidiary of such Person to make demand on the EPED B Demand Loans and/or
Garnet Demand Loans held by such Subsidiary, in each case, (i) on the occurrence
of a Liquidating Event, (ii) if requested by the Garnet Common Member, on any
Purchase Date or Retirement Date, (iii) to acquire additional Garnet Permitted
Assets, (iv) upon the occurrence of an El Paso Debt Obligation Repayment Event,
(v) upon expiration of the Asset Sale Standstill Period, if requested by the
Garnet Preferred

                                       30
<PAGE>

                                                            Garnet LLC Agreement

Member in an Asset Sale Notice delivered pursuant to this Garnet LLC Agreement
and (vi) to otherwise satisfy the obligations of Garnet; provided, however,
that, upon the delivery by the Garnet Preferred Member of a written request to
the Managing Member at any time during the period from the Extension Period
Commencement Date to the Extension Period Termination Date, the Managing Member
shall cause Garnet to cause Amethyst to (x) make demand on the EPED B Demand
Loans and Garnet Demand Loans held by such Person and (y) cause any Subsidiary
of such Person to make demand on the EPED B Demand Loans and Garnet Demand Loans
held by such Subsidiary, in each case, in the amount specified by the Garnet
Preferred Member in its notice.

         Section 6.8 Execution of other Transaction Documents; Matters Relating
to Amethyst.

         (a) Execution of Transaction Documents. On the Signing Date,
simultaneously with the execution and delivery of this Garnet LLC Agreement, the
Managing Member on behalf of Garnet shall execute and deliver, or cause to be
executed and delivered, all Transaction Documents to be entered into by Garnet
on or prior to the Signing Date (to the extent not previously executed), and any
amendments, restatements or supplements thereto, and take such further actions
in each case as are contemplated in the Closing Agreement and otherwise in
connection with consummation of the Exchange Offer and the transactions
contemplated thereby.

         (b) Sole Member. The Managing Member shall cause Garnet to be the sole
member of Amethyst unless all of the Members consent in accordance with Section
6.3(h) to the issuance of additional interests in Amethyst.

         (c) Governmental Permits, etc. of Amethyst. The Managing Member, on
behalf of Garnet as sole member of Amethyst, shall cause Amethyst to obtain or
effect all Governmental Approvals necessary under, and otherwise comply with,
the laws of the jurisdictions in which it is conducting business and to comply
with all of its Contractual Obligations, except in any case above where any
failure to do so would not have an Aggregate JV Material Adverse Effect.

         (d) Amethyst Subsidiary Financial Statements, Etc. The Managing Member,
on behalf of Garnet as sole member of Amethyst, shall cause Amethyst to provide
to any Member (or, in the case of a request by the Garnet Preferred Member, to
provide to Investor) promptly following a request therefor by such Member any
financial statements, material operational data, other material reports and
material notices delivered to Amethyst or Subsidiaries of Amethyst pursuant to
the Project Documents in respect of the Garnet Project Companies, subject to the
restrictions set forth in Section 8.4.

         Section 6.9 Determination of Interest Rate on EPED B Demand Loans.
Subject to Section 6.3(l), the Managing Member shall administer all EPED B
Demand Loans held by Garnet. Each Member agrees that in order for the Managing
Member to manage effectively such EPED B Demand Loans, the following provisions
shall apply:

                  (a) The Managing Member shall: (i) determine the El Paso
         Applicable Rate for each Eurodollar Period for each EPED B Demand Loan
         made by Garnet, and shall notify EPED B and El Paso of each such
         determination and (ii) at the request of

                                       31
<PAGE>

                                                            Garnet LLC Agreement

         Amethyst or any Subsidiary of Amethyst, determine the El Paso
         Applicable Rate for each Eurodollar Period for each EPED B Demand Loan
         or Garnet Demand Loan made by Amethyst or any such Subsidiary, as the
         case may be, and shall notify EPED B or Garnet (as applicable), El Paso
         and Amethyst or such Subsidiary (as applicable) of each such
         determination.

                  (b) Each Member shall promptly notify the Managing Member in
         the event any Member receives a notice from any financial institution
         to the effect that the Eurodollar Rate does not reflect the cost of
         funds for such financial institution in connection with any proposed or
         current borrowings by such Member from such financial institution. In
         the event any Member has given the notice described in the first
         sentence of this clause (b), such Member agrees that in the event
         subsequent thereto, it receives a notice from such financial
         institution to the effect that the Eurodollar Rate would again reflect
         the cost of funds for such financial institution in connection with any
         proposed or current borrowings by such Member from such financial
         institution, such Member shall promptly notify the Managing Member that
         it has received such a notice.

                  (c) Upon its receipt of any notice described in clause (b) of
         this Section, the Managing Member shall promptly notify EPED B or
         Garnet (as applicable) and El Paso of the change in the El Paso
         Applicable Rate required pursuant to the applicable EPED B Demand Loan
         or Garnet Demand Loan.

         Section 6.10 Certain Assets. The Managing Member hereby represents and
warrants to the Garnet Preferred Member, as of the Closing Date, that the amount
shown on Schedule 3.2(b) below the heading "Fair Market Value" for each
Specified Garnet Asset is El Paso's book value of such Specified Garnet Asset at
the Closing Date as reflected on El Paso's books and records in accordance with
GAAP.

         Section 6.11 Covenant of the Managing Member. Except as otherwise
permitted by this Garnet LLC Agreement, the Managing Member hereby covenants and
agrees not to (i) take any action to file a certificate of cancellation or its
equivalent with respect to itself, (ii) withdraw or attempt to withdraw from
Garnet, (iii) exercise any power under the LLC Act to dissolve Garnet, (iv)
except incident to a Permitted Transfer, Dispose of all or any portion of its
Garnet Interest or (v) petition for judicial dissolution of Garnet. Further,
except incident to a Permitted Transfer, the Managing Member hereby covenants
and agrees to continue to carry out the duties of the Managing Member under this
Garnet LLC Agreement until Garnet is dissolved and liquidated pursuant to
Article XII.

         Section 6.12 Certain Covenants Relating to the Separateness of Garnet.
Garnet shall maintain its separate existence and, specifically, shall conduct
its affairs in accordance with, and the Managing Member and each Member agrees
that it will not take any actions in its dealings with Garnet or with other
Persons (including their creditors) that are inconsistent with, the following:

                  (a) Garnet shall: (i) maintain and prepare separate financial
         reports (if any) and financial statements (if any) in accordance with
         GAAP, showing its assets and liabilities separate and apart from those
         of any other Person, and will not have its assets

                                       32
<PAGE>

                                                            Garnet LLC Agreement

         listed on the financial statement of any other Person (provided,
         however, that Garnet's assets may be included in a consolidated
         financial statement of a Member if inclusion on such consolidated
         financial statement is required to comply with the requirements of
         GAAP, but only if (a) such consolidated financial statement shall be
         appropriately footnoted to the effect that Garnet's assets are owned by
         Garnet and that they are being included on the consolidated financial
         statement of such Member solely to comply with the requirements of
         GAAP, and (b) such assets shall be listed on Garnet's own separate
         balance sheet); (ii) maintain its books, records and bank accounts
         separate from those of its Affiliates, any constituent party and any
         other Person; and (iii) not permit any Affiliate or constituent party
         (other than the Managing Member, the Members and the Management
         Company) independent access to its bank accounts.

                  (b) Garnet shall not commingle or pool any of its funds or
         other assets with those of any Affiliate or constituent party or any
         other Person, and it shall hold all of its assets in its own name.

                  (c) Garnet shall conduct its own business in its own name and
         shall not operate, or purport to operate, collectively as a single or
         consolidated business entity with respect to any Person.

                  (d) Garnet shall, insofar as is consistent with commercial and
         business circumstances affecting its business and financial condition,
         remain solvent and pay its own debts, liabilities and expenses
         (including overhead expenses, if any) only out of its own assets as the
         same shall become due (except for certain legal fees, accounting fees
         and other out-of-pocket costs and expenses incurred by Garnet in
         connection with the formation, administration and activities of Garnet,
         which items may be paid by the Garnet Common Member or any Affiliate of
         Garnet or the Garnet Common Member) (provided, that this covenant shall
         not constitute a guaranty or "keep well" obligation by any of the
         Managing Member, any Member, the Management Company, any administrator
         of or with respect to Garnet or any other Person in respect of Garnet
         or its debt, liabilities or expenses, or any financial or balance sheet
         condition or ratio of or relating to Garnet).

                  (e) Garnet has done, or caused to be done, and shall do, all
         things necessary to observe all Delaware limited liability company
         formalities and other organizational formalities, and preserve its
         existence (subject to Article XII and the other express provisions
         hereof), and it shall not, nor will it permit any Affiliate or
         constituent party to, amend, modify or otherwise change this Garnet LLC
         Agreement in a manner which would adversely affect the existence of
         Garnet as a special purpose entity.

                  (f) Garnet shall not have any employees.

                  (g) Garnet does not, and shall not, (i) guarantee, become
         obligated for, or hold itself or its credit out to be responsible for
         or available to satisfy, the debts or obligations of any other Person
         or (ii) control the decisions or actions respecting the daily business
         or affairs of any other Person other than pursuant to the Transaction
         Documents and the Amethyst Financing Documents.

                                       33
<PAGE>

                                                            Garnet LLC Agreement

                  (h) Garnet shall, to the extent it utilizes stationery,
         invoices and checks, maintain and utilize separate stationery, invoices
         and checks bearing its own name.

                  (i) Garnet shall, at all times, hold itself out to the public
         as a legal entity separate and distinct from any other Person and shall
         correct any known misunderstanding regarding its separate identity.

                  (j) Garnet shall not identify itself as a division of any
         other Person.

                  (k) Garnet shall maintain its assets in such a manner that it
         will not be costly or difficult to segregate, ascertain or identify its
         individual assets from those of any Affiliate, constituent party or any
         other Person.

                  (l) Garnet shall not use its separate existence to abuse
         creditors or to perpetrate a fraud, injury, or injustice on creditors
         in violation of Applicable Law.

                  (m) Garnet shall not, in connection with the Transaction
         Documents and the Amethyst Financing Documents, act with an intent to
         hinder, delay, or defraud any of its creditors in violation of
         Applicable Law.

                  (n) Garnet shall not be consensually merged or legally
         consolidated with any other Person (other than being consolidated with
         certain Affiliates for financial reporting and federal tax purposes),
         but without prejudice to the right to dissolve, liquidate or wind up in
         accordance with this Garnet LLC Agreement or Applicable Law.

                  (o) Garnet shall not incur any Relevant Indebtedness except to
         the extent not prohibited by the Transaction Documents and the Amethyst
         Financing Documents.

                  (p) Garnet shall not make loans or advances to any Person,
         except as permitted by the Transaction Documents and the Amethyst
         Financing Documents.

                  (q) Garnet shall not pledge its assets for the benefit of any
         Person, except pursuant to the Transaction Documents and the Amethyst
         Financing Documents.

                  (r) The issuances of the Garnet Preferred Member Interest to
         Citrine and the Garnet Common Member Interest to EPED B were and are
         intended to be, and shall be accounted for on the books, records and
         financial statements of Garnet, Citrine and EPED B as, the issuance of
         equity capital and not as a loan by Citrine or EPED B, as the case may
         be, to Garnet.

                  (s) Garnet shall make no transfer of its assets except in
         accordance with the Transaction Documents and the Amethyst Financing
         Documents.

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<PAGE>

                                                            Garnet LLC Agreement

                                   ARTICLE VII

                          ROLE OF NON-MANAGING MEMBERS

         Section 7.1 Rights or Powers. No Member (other than the Managing
Member) shall have any right or power to take part in the management or control
of Garnet or its business and affairs or to act for or bind Garnet in any way.
Notwithstanding the foregoing, the Members shall have all the rights and powers
specifically set forth in this Garnet LLC Agreement, including those rights set
forth in Section 7.4. Any Member, any Affiliate thereof or an employee,
stockholder, agent, member, manager, director or officer of a Member or any
Affiliate thereof, may also be an employee or agent of Garnet or a member,
manager or officer of the Managing Member. The existence of these relationships
and acting in such capacities will not result in such Member being deemed to be
participating in the control of the business of Garnet or otherwise affect the
limited liability of such Member.

         Section 7.2 Voting Rights. Except for the Managing Member acting in its
capacity as such, each Member shall have the right to vote only on those matters
expressly reserved for its vote (i) as provided in this Garnet LLC Agreement or
(ii) as required by mandatory provisions of the LLC Act.

         Section 7.3 Procedure for Consent. In any circumstances requiring the
approval or consent of any Member specified in this Garnet LLC Agreement, such
approval or consent may, except as expressly provided to the contrary in this
Garnet LLC Agreement, be given or withheld in the sole and absolute discretion
of such Member. Each Member agrees to use its best efforts to respond promptly
to any request for any such approval or consent. If the Managing Member receives
the necessary approval or consent of the Members to such action, the Managing
Member shall be authorized and empowered to implement such action without
further authorization by the Members.

         Section 7.4 Special Rights of the Garnet Preferred Member.
Notwithstanding any other provision hereof, the Garnet Preferred Member shall
have (a) the right and power to control the liquidation of Garnet as Liquidator
as set forth in Article XII, (b) the sole right to exercise the rights of Garnet
(for itself and as the sole member of Amethyst) set forth in Section 5.2 of the
Management Agreement, (c) the right to become the Managing Member or to appoint
a replacement Managing Member pursuant to Section 6.1(a); and (d) the sole right
(i) to cause a Garnet Asset Remedy pursuant to Section 11.3 and (ii) to cause
one or more Investor Asset Sales pursuant to Section 11.4.

                                  ARTICLE VIII

                          ACCOUNTING; BOOKS AND RECORDS

         Section 8.1 Accounting; Books and Records.

         (a) Maintenance of Books and Records. Garnet shall maintain at its
principal place of business or, upon notice to the Members, at such other place
as the Managing Member shall determine, separate books of account for Garnet,
which shall include a record of all costs and

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<PAGE>

                                                            Garnet LLC Agreement

expenses incurred, all charges made, all credits made and received, and all
income derived in connection with the conduct of Garnet and the operation of its
business in accordance with this Garnet LLC Agreement.

         (b) Accounting Methods.

                  (i) Garnet shall maintain appropriate books and records in a
         manner as necessary to comply with GAAP and with the Code and the
         Regulations.

                  (ii) All amounts payable under any agreement between Garnet on
         the one hand and the Members or their Affiliates (excluding Garnet) on
         the other hand, other than Distributions, shall be treated as occurring
         between Garnet and a Person who is not a Member within the meaning of
         Section 707(a)(1) of the Code and such amounts payable by Garnet to any
         Member or such Member's Affiliates shall be considered an expense or
         capital cost, as the case may be, of Garnet for income tax and
         financial reporting purposes, and, except as specifically contemplated
         by Article V shall not be considered a Distribution to such Member,
         including in maintaining such Member's Capital Account, and any such
         amounts payable by any Member or its Affiliates to Garnet shall not,
         except as specifically contemplated by Article III, be considered a
         contribution to Garnet, including in maintaining such Member's Capital
         Account.

         (c) Access to Books, Records, etc. Subject to Section 8.4, each Member
or any agents or representatives of any Member (including the Class A
Shareholder), upon reasonable notice and with reasonable frequency, may (i)
visit and inspect any of the properties of Garnet or any Subsidiary of Garnet,
(ii) examine any information with respect to Garnet or its assets that it may
reasonably request and make copies of and abstracts from the financial and
operating records and books of account of Garnet or such Subsidiary, and (iii)
discuss the affairs, finances and accounts of Garnet with the Managing Member
and its officers, directors and independent accountants, all at such reasonable
times and as often as such Member or any agents or representatives of such
Member may reasonably request, and Garnet shall pay or reimburse the Garnet
Preferred Member for its reasonable costs and expenses incurred in connection
with such visits, inspections and examinations; provided, however, that Garnet
shall have no obligation to pay the expense of such visits, inspections and
examinations in any calendar year to the extent that the aggregate amount of all
such expenses of the Garnet Preferred Member, together with all expenses of the
Diamond Class A Member incurred in connection with visits, inspections and
examinations pursuant to Section 8.1(c) of the Diamond LLC Agreement and all
such expenses of the holder of the Topaz Minority Member Interest incurred in
connection with examinations pursuant to Section 8.1(c) of the Topaz LLC
Agreement, in each case incurred during such calendar year, exceeds $50,000 or,
following delivery of a QMR Notice, $2,000,000 (provided, that such amount
following delivery of a QMR Notice shall be calculated from the date of such QMR
Notice without regard to calendar year) unless a Note Trigger Event, Specified
Equity Event or Shareholder Trigger Event has occurred and is continuing in
which case there shall be no limit; provided, further, that all visits and
inspections shall be subject to reasonable safety requirements and shall be made
at the sole risk of the applicable Garnet Preferred Member, agent,
representative or Class A Shareholder. Notwithstanding the foregoing, to the
extent the properties or information referred to herein relate to any Subsidiary
of Garnet that is not, directly or indirectly, wholly owned by Garnet, the
rights granted to each Member pursuant to this

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                                                            Garnet LLC Agreement

Section 8.1(c) are expressly subject to compliance by such Member with the
confidentiality procedures and guidelines of such Subsidiary, as in effect from
time to time; provided, that the Managing Member will cause Garnet to use
reasonable efforts to cause its Subsidiaries to avoid imposing confidentiality
restrictions that prohibit disclosure of information to Persons that agree to be
bound by the applicable confidentiality restrictions.

         Section 8.2 Reports.

         (a) In General. The Managing Member shall be responsible for the
preparation of financial reports of Garnet and the coordination of financial
matters of Garnet with Garnet's accountants. Each report delivered by Garnet to
the Members pursuant to this Section 8.2 shall be accompanied by a
representation of an Authorized Officer of El Paso that such report presents
fairly in all material respects the information contained therein, subject, in
the case of the reports to be delivered pursuant to Section 8.2(c), to year-end
audit adjustments.

         (b) Annual Reports. Within 120 days after the end of each Fiscal Year
commencing with the Fiscal Year ending December 31, 2001, the Managing Member
shall cause to be prepared and to be delivered to each other Member the
following:

                  (i) Financial Reports. A balance sheet as of the last day of
         such Fiscal Year and an income statement and statement of cash flows
         for Garnet for (x) in the case of the Fiscal Year ending December 31,
         2001, the period from formation of Garnet to December 31, 2001, and (y)
         in the case of any other Fiscal Year, such Fiscal Year, and notes
         associated with each, in each case prepared in accordance with GAAP and
         audited by the JV Accountants; and

                  (ii) Officer's Certificate. Written certification by an
         Authorized Officer of the Managing Member that Garnet is in compliance
         with Section 6.5(a)(ii).

The financial statements described in clause (i) of this Section 8.2(b) shall be
accompanied by a representation of the Managing Member stating that (x) the
financial statements described in clause (i) of this Section 8.2(b) present
fairly, in all material respects, the financial position of Garnet at the end of
the most recently completed Fiscal Year and the results of its operations and
its cash flows for such applicable period, in conformity with GAAP and (y) after
reasonable inquiry, the Managing Member has no actual knowledge of the
occurrence of any acceleration of the New Notes as a result of a New Indenture
Event of Default, Note Trigger Event, Specified Equity Event, Shareholder
Trigger Event or Liquidating Event, in any such case, that is then continuing
or, if the Managing Member has such actual knowledge, specifying the then
continuing event and the action that the Managing Member has taken or proposes
to take with respect thereto.

         (c) Quarterly Reports. Within 60 days after the close of each of the
first three Fiscal Quarters during any Fiscal Year beginning with the Fiscal
Quarter ending March 31, 2002, the Managing Member shall cause to be prepared
and to be delivered to each other Member the following:

                  (i) Financial Reports. Unaudited financial statements
         consisting of a balance sheet as of the last day of such Fiscal Quarter
         and an income statement and a statement of

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                                                            Garnet LLC Agreement

         cash flows for Garnet for such Fiscal Quarter, in each case prepared in
         accordance with GAAP except that such quarterly financial statements
         need not include footnote disclosure and may be subject to ordinary
         year-end adjustment; and

                  (ii) Officer's Certificate. Written certification by an
         Authorized Officer of the Managing Member that Garnet is in compliance
         with Section 6.5(a)(ii).

The financial statements described in clause (i) of this Section 8.2(c) shall be
accompanied by a representation of the Managing Member stating that (x) the
financial statements described in clause (i) of this Section 8.2(c) present
fairly, in all material respects, the financial position of Garnet at the end of
the most recently completed Fiscal Quarter and the results of its operations and
its cash flows for such Fiscal Quarter, in conformity with GAAP, subject to year
end audit requirements, and (y) after reasonable inquiry, the Managing Member
has no actual knowledge of the occurrence of any acceleration of the New Notes
as a result of a New Indenture Event of Default, Note Trigger Event, Specified
Equity Event, Shareholder Trigger Event or Liquidating Event that, in any such
case, is then continuing or, if the Managing Member has such actual knowledge,
specifying the then continuing event and the action that the Managing Member has
taken or proposes to take with respect thereto.

         (d) Liquidation Date Reports. The Managing Member shall cause to be
prepared and to be delivered to each Member on the date on which final
distributions are made to the Members pursuant to Section 12.2, a balance sheet
as of the Mark-to-Market Measurement Date setting forth the aggregate
Mark-to-Market Value for each of the Garnet Permitted Assets (a "MARK-TO-MARKET
BALANCE SHEET"), together with a certification by the JV Accountants that such
statements have been prepared in accordance with this Garnet LLC Agreement.

         (e) Valuation Reports. The Managing Member shall cause to be prepared
contemporaneously with any adjustment to the Garnet Gross Asset Values of Garnet
assets in accordance with clause (b) of the definition of Garnet Gross Asset
Value, reports required to determine the Mark-to-Market Value of such assets and
(x) in the event any Garnet Permitted Asset is acquired (whether by contribution
or purchase), sold or distributed by Garnet, with respect to such Garnet
Permitted Asset only and (y) upon the occurrence of any adjustment to the Garnet
Gross Asset Value of all Garnet Permitted Assets, with respect to all Garnet
Permitted Assets, and the Managing Member shall furnish such reports to each
Member.

         (f) [Reserved].

         Section 8.3 Tax Matters.

         (a) Actions by Managing Member. The Managing Member is authorized to
make any and all elections for federal, state, and local tax purposes including
any election, if permitted by applicable law: (i) to adjust the basis of Garnet
Property pursuant to Code Sections 754, 734(b) and 743(b), or comparable
provisions of state or local law, in connection with Dispositions of Garnet
Interests and in connection with Garnet Distributions; (ii) with the consent of
the Members, to extend the statute of limitations for assessment of tax
deficiencies against the Members with respect to adjustments to Garnet's
federal, state, or local tax returns; and (iii) to the extent provided in Code
Sections 6221 through 6231, to represent Garnet and the

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                                                            Garnet LLC Agreement

Members before taxing authorities or courts of competent jurisdiction in tax
matters affecting Garnet or the Members in their capacities as Members, and to
file or cause to be filed any tax returns and execute any agreements or other
documents relating to or affecting such tax matters, including agreements or
other documents that bind the Members with respect to such tax matters or
otherwise affect the rights of Garnet and the Members. The Managing Member is
specifically authorized to act as the "TAX MATTERS MEMBER" under the Code and in
any similar capacity under state or local law.

         (b) Tax Information and Filings. The Managing Member shall deliver or
cause to be delivered to each Member necessary tax information for each Member's
estimated quarterly tax filings as soon as practicable after the end of each
quarter of each Fiscal Year of Garnet. The Managing Member shall deliver or
cause to be delivered to each Member: (i) on or prior to March 30 of each Fiscal
Year, the Managing Member's good faith estimate of the amount of such Member's
allocable share of taxable income or loss of Garnet for the preceding Fiscal
Year, (ii) on or prior to July 30 of each Fiscal Year, an update of the estimate
for the preceding Fiscal Year delivered pursuant to clause (i) and (iii) as soon
as practicable after the end of each Fiscal Year of Garnet but not later than
September 15 of the next succeeding Fiscal Year, necessary tax information for
each Member's annual tax filings. The Managing Member shall file or cause to be
filed tax or information returns and all other filings for Garnet prepared in
accordance with the Code, the Regulations and applicable state and local tax
laws. The Managing Member shall use reasonable efforts to provide the Garnet
Preferred Member with details concerning the foregoing information upon the
Garnet Preferred Member's reasonable inquiries.

         (c) Tax Classification.

                  (i) The Managing Member shall take such action as may be
         required under the Code and Regulations to cause Garnet to be treated
         as a partnership and Amethyst to be treated as a disregarded entity for
         United States federal income tax purposes.

                  (ii) To the extent Section 8.3(c)(i) does not govern the state
         and local tax classification of Garnet and Amethyst, the Managing
         Member shall take such action as may be required under applicable state
         and/or local law to cause Garnet to be treated as, and in a manner
         consistent with a partnership (or the functional equivalent thereof)
         and to cause Amethyst to be treated as, and in a manner consistent
         with, a disregarded entity (or the functional equivalent thereof) for
         state and local income and franchise tax purposes; provided, that the
         Managing Member shall not take any action under this clause (c)(ii)
         which would be inconsistent with its obligations under Section
         8.3(c)(i).

         Section 8.4 Proprietary Information. Notwithstanding any provision of
this Garnet LLC Agreement or any other Transaction Document to the contrary, the
Garnet Preferred Member shall not have access to (i) information that the
Managing Member reasonably believes to be in the nature of trade secrets or
proprietary information, (ii) any information subject to the attorney-client
privilege unless disclosure to the Garnet Preferred Member would not result in a
waiver of such privilege, (iii) any information that is required to be kept
confidential by Applicable Law or (iv) any information that is required to be
kept confidential by any Contractual Obligation entered into by Garnet, the
Garnet Common Member or any Garnet

                                       39
<PAGE>

                                                            Garnet LLC Agreement

Project Company with any third person in good faith in the ordinary course of
business and in any context that is not unreasonable in light of the
contemplated transaction.

                                   ARTICLE IX

                              AMENDMENTS; MEETINGS

         Section 9.1 Amendments. Amendments to this Garnet LLC Agreement may be
proposed by the Members. Following such proposal, the Managing Member shall
submit to the Members a verbatim statement of any proposed amendment if counsel
for Garnet shall have approved of the same in writing as to form, and the
Managing Member shall include in any such submission a recommendation as to the
proposed amendment. The Managing Member shall seek the written vote of the
Members on the proposed amendment or shall call a meeting to vote thereon and to
transact any other business that it may deem appropriate. A proposed amendment
shall be adopted and be effective as an amendment to this Garnet LLC Agreement
only if it receives the affirmative vote of all of the Members.

         Section 9.2 Meetings of the Members. (a) (a) Meetings of the Members
may be called by the Managing Member and shall be called upon the written
request of any Member. The notice shall state the nature of the business to be
transacted. Subject to other requirements specified herein regarding notice
periods, notice of any such meeting shall be given to all Members not less than
five Business Days nor more than thirty days prior to the date of such meeting.
Members may vote in person, by proxy or by telephone at such meeting. Whenever
the vote or consent of Members is permitted or required under this Garnet LLC
Agreement, such vote or consent may be given at a meeting of Members or may be
given in accordance with the procedure prescribed in Section 9.3. Except as
otherwise expressly provided in this Garnet LLC Agreement, the unanimous vote of
the Members shall be required to constitute the act of the Members.

         (b) For the purpose of determining the Members entitled to vote on, or
to vote at, any meeting of the Members or any adjournment thereof, the Managing
Member or the Member requesting such meeting may fix, in advance, a date as the
record date for any such determination. Such date shall not be more than thirty
days nor less than one Business Day before any such meeting.

         (c) Each Member may authorize any Person or Persons to act for it by
proxy on all matters in which the Member is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Member or its attorney-in-fact. No proxy shall be
valid after the expiration of eleven months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the Member executing it or as provided under the terms of such proxy.

         (d) Each meeting of Members shall be conducted by the Managing Member
or such other Person as the Managing Member may appoint pursuant to such rules
for the conduct of the meeting as the Managing Member or such other Person deems
appropriate.

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<PAGE>

                                                            Garnet LLC Agreement

         Section 9.3 Unanimous Consent. In the event the consent of the Members
is required for any action to be taken by Garnet, such consent may be given at a
meeting, which may be conducted by conference telephone call, or provided in a
writing executed by all the Members.

                                    ARTICLE X

                             TRANSFERS OF INTERESTS

         Section 10.1 Restriction on Dispositions of Interests.

         (a) Dispositions of Garnet Preferred Member Interest. Except as
provided in Article XI or Section 13.15, the Garnet Preferred Member shall not
Dispose of (other than by a retirement or redemption) all or any portion of its
Garnet Preferred Member Interest or withdraw from Garnet without the prior
written consent of the Garnet Common Member in its sole discretion; provided,
however, that (1) following the occurrence of a Note Trigger Event, Specified
Equity Event, Shareholder Trigger Event or, after the repayment in full of the
Outstanding Notes, an acceleration of the New Notes as a result of a New
Indenture Event of Default, or (2) during the Extension Period, no such consent
shall be required in connection with the Disposition by the Garnet Preferred
Member of its Garnet Preferred Member Interest to a Qualified Holder at any time
after (x) if the Outstanding Notes and New Notes have not been paid in full, the
occurrence of the applicable Asset Remedy Standstill Expiration Date or, in the
case of a Specified Equity Event, the earliest of the Special Management
Replacement Date, the date on which an Asset Remedy Notice becomes effective in
accordance with Section 11.3(a) or the date on which a Liquidation Notice
becomes effective under Section 12.10, or (y) if the Outstanding Notes and New
Notes have been paid in full, the earlier of a Specified Equity Event and the
expiration of the Asset Sale Standstill Period, as applicable, for such
Disposition. Following any such Disposition by the Garnet Preferred Member of
its entire Garnet Preferred Member Interest in Garnet, the Garnet Preferred
Member shall be deemed withdrawn from Garnet as a Garnet Preferred Member. Upon
any Disposition, in whole or in part, made in accordance with this Section
10.1(a), the transferee of such Garnet Interest will be admitted as a Garnet
Preferred Member without further action or consent by any other Member.

         (b) Dispositions of Garnet Common Member Interest. The Garnet Common
Member shall not Dispose of its Garnet Common Member Interest to any Person or
withdraw from Garnet without the prior written consent of the Garnet Preferred
Member in its sole discretion; provided, however, that the Garnet Common Member
may Dispose of all or any portion of its Garnet Common Member Interest to any El
Paso Affiliate that is a Qualified Holder. Following any Disposition of the
Garnet Common Member Interest in whole, the Garnet Common Member shall be deemed
withdrawn from Garnet as a Garnet Common Member. Upon any Disposition made in
accordance with this Section 10.1(b), the transferee of such Garnet Interest
will be admitted as a Garnet Common Member without further action or consent by
any other Member.

         (c) Permitted Transfers. Any Disposition permitted by this Section 10.1
shall be referred to in this Garnet LLC Agreement as a "PERMITTED TRANSFER," the
Person to which the applicable Garnet Interest is transferred shall be a
"PERMITTED TRANSFEREE" and the Garnet Interest transferred shall be a
"TRANSFERRED INTEREST." A Permitted Transferee shall be entitled to become a
substituted Member in Garnet in respect of the applicable Transferred Interest
without

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                                                            Garnet LLC Agreement

any further act on the part of any other Member or the Managing Member being
required. Any Permitted Transferee of 100% of the Garnet Common Member Interest
shall become the successor Managing Member hereunder without any further act on
the part of any other Member being required; provided, that such successor
Managing Member shall be subject to replacement as set forth in Section 6.1(a).

         Section 10.2 Prohibited Dispositions.

         (a) Any purported Disposition of a Garnet Interest that is not a
Permitted Transfer shall be null and void and of no effect whatever; provided,
however, that, if Garnet is required to recognize a Disposition of a Garnet
Interest that is not a Permitted Transfer, the Transferred Interest shall be
strictly limited to the transferor's rights to allocations and distributions as
provided by this Garnet LLC Agreement with respect to the Transferred Interest,
which allocations and distributions may be applied (without limiting any other
legal or equitable rights of Garnet) to satisfy any debts or obligations, or
liabilities for damages that the transferor or transferee of such Garnet
Interest may have to Garnet.

         (b) To the fullest extent permitted by law, in the case of a
Disposition or attempted Disposition of a Garnet Interest that is not a
Permitted Transfer, the parties engaging or attempting to engage in such
Disposition shall be liable to indemnify and hold harmless Garnet and the other
Members from all losses, costs, liability, and damages that any of such
indemnified Persons may incur (including incremental tax liability and
reasonable lawyers' fees and expenses) as a result of such Disposition or
attempted Disposition and efforts to enforce the indemnity granted hereby.

                                   ARTICLE XI

                      GARNET ASSET REMEDY; EXTENSION PERIOD

         Section 11.1 [Reserved].

         Section 11.2 [Reserved].

         Section 11.3 Garnet Asset Remedy.

         (a) Exercise of Garnet Asset Remedy. So long as any Notes or New Notes
are Outstanding, the Garnet Preferred Member may, at any time following a Note
Trigger Event, or after repayment in full of all Outstanding Notes, a Specified
Equity Event, elect (i) to cause the sale of or realization upon one or more
assets of Garnet, Amethyst and/or any Garnet Project Company in accordance with
clause (b) below and/or (ii) to cause the Distribution of Cash and/or proceeds
of such asset sales pursuant to Section 5.1(a), in each case, by delivering an
Asset Remedy Notice to the Managing Member (and, if the Garnet Common Member is
not the Managing Member, the Garnet Common Member), and such Asset Remedy Notice
shall, unless each of the Diamond Class A Member Interest and Topaz Minority
Member Interest are either retired pursuant to Section 11.1 of the Diamond LLC
Agreement or the Topaz LLC Agreement, as the case may be, or purchased pursuant
to Section 11.2 of the Diamond LLC Agreement or the Topaz LLC Agreement, as the
case may be, on or prior to (A) the applicable Asset Remedy Standstill
Expiration Date or (B) in the case of a Specified Equity Event, the delivery of
such

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<PAGE>

                                                            Garnet LLC Agreement

Asset Remedy Notice, become effective on, and permit a Garnet Asset Remedy on
and after, (x) such applicable Asset Remedy Standstill Expiration Date or (y) in
the case of a Specified Equity Event, the delivery of such Asset Remedy Notice;
provided, however, that the Garnet Preferred Member may rescind such Asset
Remedy Notice by delivering to the Managing Member (and, if the Garnet Common
Member is not the Managing Member, the Garnet Common Member) written notice of
such rescission; provided, further, that in the case of a Specified Equity
Event, if the Share Purchase Option is consummated on or prior to the tenth
Business Day following delivery of such Asset Remedy Notice, then such notice
shall be deemed to have been revoked and shall be of no further force and
effect. Any such rescission shall not affect the Garnet Preferred Member's right
to deliver any subsequent Asset Remedy Notice.

         (b) Dispositions. After delivery of an Asset Remedy Notice and after
the occurrence of the applicable Asset Remedy Standstill Expiration Date or,
after repayment in full of the Outstanding Notes, a Specified Equity Event, the
Garnet Preferred Member shall have the right and authority to (i) cause Garnet
to Dispose of any Garnet Property, (ii) cause Garnet to cause Amethyst to
Dispose of or realize upon any Amethyst Property and/or (iii) cause Garnet to
cause Amethyst to cause one or more Garnet Project Companies to Dispose of or
realize upon Property of such Garnet Project Companies; provided, however, that
no such Disposition shall be made to any Person that is the Garnet Preferred
Member or a Restricted Person.

         Section 11.4 Asset Sales.

         (a) Exercise of Asset Sale Rights. So long as no Notes or New Notes are
Outstanding the Garnet Preferred Member may, at any time (x) following the
occurrence of a Shareholder Trigger Event or a Specified Equity Event or (y)
during an Extension Period, elect to cause (i) the sale of or realization upon
one or more assets of Garnet, Amethyst and/or the Garnet Project Companies
and/or (ii) the Distribution of Cash and/or proceeds of such asset sales
pursuant to Section 5.1(a) or 5.1(b) (as applicable) by delivering to the
Managing Member (and, if the Garnet Common Member is not the Managing Member,
the Garnet Common Member) an Asset Sale Notice and such Asset Sale Notice shall
become effective to permit the sale of the assets specified therein on the 10th
Business Day following delivery of such Asset Sale Notice; provided, however,
that the Garnet Preferred Member may rescind such Asset Sale Notice by
delivering to the Managing Member (and, if the Garnet Common Member is not the
Managing Member, the Garnet Common Member) written notice of such rescission;
and provided, further, that if an Irrevocable Election has been made by the
Garnet Common Member and a Purchase Option Notice or a Retirement Notice has
been delivered pursuant to the Diamond LLC Agreement or the Topaz LLC Agreement
on or prior to such 10th Business Day, no Asset Sale Notice shall become
effective to permit the sale of the assets specified therein until the day after
the Purchase Date or Retirement Date, as the case may be, specified in such
notice (and then if, but only if, such purchase or retirement is not
consummated). Any such rescission shall not affect the Garnet Preferred Member's
right to deliver any subsequent Asset Sale Notice.

         (b) Standstill; Dispositions. Notwithstanding any delivery of an Asset
Sale Notice by the Garnet Preferred Member in accordance with Section 11.4(a),
(i) (a) neither the Garnet Preferred Member nor any of Garnet or Amethyst (at
the direction of the Garnet Preferred Member) may enter into any binding
agreement to Dispose of or realize upon any assets of Garnet or Amethyst until
the expiration of the applicable Asset Sale Standstill Period and

                                       43
<PAGE>

                                                            Garnet LLC Agreement

(b) such agreements may be entered into only with respect to the assets
specified in the applicable Asset Sale Notice that has become effective and (ii)
no sale or other Disposition of any asset of Garnet or Amethyst shall be made to
any Person that is a Garnet Preferred Member or a Restricted Person.

         Section 11.5 Extension Period.

         (a) [Reserved].

         (b) Allocations; Distributions. Without limitation of the Garnet
Preferred Member's rights pursuant to Section 7.4, during the Extension Period
(i) Garnet Net Income, Garnet Net Losses, Net Garnet Capital Gain, and Net
Garnet Capital Loss shall be allocated as set forth in Article IV and (ii)
Distributions shall be made to the Garnet Preferred Member as set forth in
Section 5.1(a) (if applicable) and Section 5.1(b).

         (c) Restrictions on Authority of Managing Member. Notwithstanding any
power or authority granted the Managing Member under the LLC Act, the Garnet
Certificate of Formation or this Garnet LLC Agreement, during the Extension
Period, (i) the Managing Member shall not have the authority to, and covenants
and agrees that it shall not, take any of the following actions without the
consent of all of the Members: (x) cause or permit Garnet or Amethyst to acquire
(by purchase, contribution, exchange or otherwise) any additional assets, (y)
cause or permit Garnet or Amethyst to incur any additional Permitted Financial
Obligations, or (z) cause or permit Garnet or Amethyst to make any Dispositions
other than (1) Dispositions to provide Cash to be Distributed to Garnet for the
purpose of enabling Garnet to make Distributions under Sections 5.1(a) and
5.1(b) and (2) Dispositions of the type described in clause (A), (B), (E) or (F)
of Section 6.3(e) and (ii) the Managing Member, on behalf of Garnet as sole
member of Amethyst, shall cause Amethyst to distribute to Garnet all Available
Cash of Amethyst to the extent permitted to be distributed in accordance with
the Amethyst Financing Documents (other than Amethyst Specified Credit
Documents) and the Transaction Documents.

         (d) Expiration of Extension Period. If no Liquidating Event shall have
occurred, then on and after the Extension Period Termination Date and
notwithstanding any other provision of this Garnet LLC Agreement: (i) the Garnet
Preferred Member shall have no right or authority to cause Garnet to take any
action and, without limitation of the foregoing, all of the Garnet Preferred
Member's rights under Sections 7.4, 11.3 and 11.4 shall be terminated and the
Garnet Common Member shall, without further action, have all of the rights given
to the Garnet Preferred Member under such Sections, (ii) the Garnet Common
Member shall have the right and authority to cause Garnet to admit one or more
additional Members and/or issue additional membership interests, and (iii) the
Garnet Common Member shall have the right to cause Garnet to retire the Garnet
Preferred Member Interest for an amount equal to the Garnet Preferred Member's
then current Capital Account balance.

         (e) [Reserved].

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<PAGE>

                                                            Garnet LLC Agreement

                                   ARTICLE XII

                           DISSOLUTION AND WINDING UP

         Section 12.1 Liquidating Events. Garnet shall dissolve and commence
winding up and liquidating upon the first to occur of any of the following
(collectively, "LIQUIDATING EVENTS"):

                  (a) [Reserved].

                  (b) Liquidation Notice. The date on which, pursuant to Section
         12.10, a Liquidation Notice becomes effective to cause a Liquidating
         Event.

                  (c) Unanimous Vote. The unanimous vote of the Members to
         dissolve, wind up, and liquidate Garnet or Amethyst.

                  (d) [Reserved].

                  (e) Illegality, etc. The happening of any event that makes it
         unlawful, impossible, or impractical to carry on the business of Garnet
         or the Delaware Court of Chancery has entered a decree pursuant to
         Section 18-802 of the LLC Act, and such decree has become final.

                  (f) Fourth Anniversary of Extension Period Commencement Date.
         The fourth anniversary of the Extension Period Commencement Date shall
         have occurred and there has been no prior Extension Period Termination
         Date.

The Members hereby agree that, notwithstanding any provision of the LLC Act,
Garnet shall not dissolve prior to the occurrence of a Liquidating Event.

         Section 12.2 Winding Up. Upon the occurrence of a Liquidating Event,
Garnet shall continue solely for the purposes of winding up its affairs in an
orderly manner, liquidating its assets, and satisfying the claims of its
creditors and Members, and no Member shall take any action with respect to
Garnet that is inconsistent with the winding up of Garnet's business and
affairs; provided that all covenants contained in this Garnet LLC Agreement and
obligations provided for in this Garnet LLC Agreement shall continue to be fully
binding upon the Members until such time as Garnet Property has been distributed
pursuant to this Section 12.2 and the Garnet Certificate of Formation has been
canceled pursuant to the LLC Act. The Liquidator shall be responsible for
overseeing the winding up and dissolution of Garnet. On the occurrence of a
Liquidating Event, the Garnet Gross Asset Values of all of Garnet's assets shall
be adjusted to equal their respective Mark-to-Market Values as of the
Mark-to-Market Measurement Date and any Garnet Net Income, Gross Income, Garnet
Net Losses, Net Garnet Capital Gain, Net Garnet Capital Loss and other items of
income, loss, deduction, gain and credit of Garnet shall be allocated among the
Members as of such Mark-to-Market Measurement Date in accordance with Article
IV. The Liquidator shall take full account of Garnet's liabilities and the
Garnet Property and, except as otherwise provided in Section 12.3, shall, within
75 days of the occurrence of a Liquidating Event or, in the event that the
certification by the JV Accountants required by Section 8.2(d) has not been
delivered by such 75th day as soon as practicable after delivery of such
accountant's certification but in any event within 90 days of such Liquidating

                                       45
<PAGE>

                                                            Garnet LLC Agreement

Event, cause the Garnet Property or the proceeds from the sale or disposition
thereof (as determined pursuant to Section 12.9), to the extent sufficient
therefor, to be applied and distributed, to the maximum extent permitted by
Applicable Law and notwithstanding anything in this Garnet LLC Agreement to the
contrary, in the following order (without duplication):

                  (a) First, to creditors (including to the Garnet Preferred
         Member to the extent such Member is a creditor, to the extent otherwise
         permitted by Applicable Law), other than the Garnet Common Member and
         its Affiliates, in satisfaction of all of Garnet's debts and
         liabilities other than liabilities for which reasonable provision for
         payment has been made;

                  (b) Second, to the payment and discharge of all of Garnet's
         debts and liabilities incurred in accordance herewith to the Garnet
         Common Member and its Affiliates to the extent adequate provision
         therefor has not been made; and

                  (c) Third, the balance to the Members in accordance with their
         respective Capital Accounts, as provided under Article IV, immediately
         after giving effect to the adjustments and allocations required by the
         third sentence of this Section 12.2.

The Managing Member shall not receive any additional compensation for any
services performed pursuant to this Article XII.

         The Garnet Common Member understands and agrees that by accepting the
provisions of this Section 12.2 setting forth the priority of the distribution
of the assets of Garnet to be made upon its liquidation, it expressly waives any
right that it, as a creditor of Garnet, might otherwise have under the LLC Act
to receive distributions of assets pari passu with the other creditors of Garnet
in connection with a distribution of assets of Garnet in satisfaction of any
liability of Garnet, and hereby subordinates to said creditors any such right.

         Section 12.3 Restoration of Deficit Capital Accounts; Compliance With
Timing Requirements of Regulations. In the event Garnet is "liquidated" within
the meaning of Regulation Section 1.704-1(b)(2)(ii)(g), (x) Distributions shall
be made pursuant to this Article XII to the Members who have positive Capital
Accounts in compliance with Regulation Section 1.704-1(b)(2)(ii)(b)(2), and (y)
if the Garnet Common Member's Capital Account has a deficit balance (after
giving effect to all contributions, Distributions, and allocations for all
Allocation Periods, including the Allocation Period during which such
liquidation occurs), the Garnet Common Member shall make a Capital Contribution
to Garnet in the amount necessary to restore such deficit balance to zero in
compliance with Regulation Section 1.704-1(b)(2)(ii)(b)(3).

         In the discretion of the Liquidator, with the consent of the Members, a
portion (determined in the manner provided below) of the distributions that
would otherwise be made to the Members pursuant to this Article XII may be:

                  (a) Distributed to a trust established for the benefit of the
         Members solely for the purposes of liquidating Garnet Property,
         collecting amounts owed to Garnet, and paying any contingent or
         unforeseen liabilities or obligations of Garnet or of the Managing
         Member arising out of or in connection with Garnet. The assets of any
         such trust shall be distributed to the Members from time to time, in
         the reasonable discretion of

                                       46
<PAGE>

                                                            Garnet LLC Agreement

         the Liquidator, in the same proportions as the amount distributed to
         such trust by Garnet would otherwise have been distributed to the
         Members pursuant to Section 12.2; or

                  (b) Withheld to provide a reasonable reserve for liabilities
         (contingent or otherwise) of Garnet and to allow for the collection of
         the unrealized portion of any installment obligations owed to Garnet;
         provided, however, that such withheld amounts shall be distributed to
         the Members as soon as practicable.

The portion of the distributions that would otherwise have been made to each of
the Members that is instead distributed to a trust pursuant to Section 12.3(a)
or withheld to provide a reserve pursuant to Section 12.3(b) shall be determined
in the same manner as the expense or deduction would have been allocated if
Garnet had realized an expense equal to such amounts immediately prior to
distributions being made pursuant to Section 12.2.

         Section 12.4 Deemed Distribution and Recontribution. Notwithstanding
any other provision of this Article XII, in the event Garnet is liquidated
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no
Liquidating Event has occurred, the Garnet Property shall not be liquidated,
Garnet's debts and other liabilities shall not be paid or discharged, and
Garnet's affairs shall not be wound up. Instead, solely for federal income tax
purposes, Garnet shall be deemed to have contributed all of the Garnet Property
and liabilities to a new limited liability company in exchange for an interest
in such new company and, immediately thereafter, Garnet will be deemed to
liquidate by Distributing interests in the new company to the Members.

         Section 12.5 Rights of Members. Each Member shall look solely to the
Garnet Property for the return of its Capital Contribution and, except as
otherwise provided in Section 12.9, shall have no right or power to demand or
receive property other than Cash from Garnet.

         Section 12.6 Notice of Dissolution. The Managing Member shall promptly
provide written notice to each of the Members of the occurrence of any
acceleration of the New Notes as a result of a New Indenture Event of Default,
Note Trigger Event, Shareholder Trigger Event, Specified Equity Event or
Liquidating Event in accordance with Section 6.5(b).

         Section 12.7 Character of Liquidating Distributions. All payments made
in liquidation of the Garnet Interest of a withdrawing Member (whether pursuant
to Article XI or Article XII, but excluding payments pursuant to Section
12.2(a)) shall be made in exchange for the interest of such Member in Garnet
Property pursuant to Code Section 736(b)(1), including the interest of such
Member in goodwill of Garnet.

         Section 12.8 The Liquidator.

         (a) Definition. The "LIQUIDATOR" means (i) in the case of any
Liquidating Event described in clause (a), (c) or (e) of Section 12.1, the
Garnet Common Member or any other Affiliate of El Paso appointed as Liquidator
by the Garnet Common Member and (ii) in the case of any other Liquidating Event,
the Garnet Preferred Member or any other Person appointed as Liquidator by the
Garnet Preferred Member.

                                       47
<PAGE>

                                                            Garnet LLC Agreement

         The Garnet Common Member (or the Garnet Preferred Member if it may then
appoint the Liquidator) may appoint an appointee to be Liquidator on or prior to
the date on which a Liquidating Event occurs by delivering written notice of
such appointment to the other Members. Any such appointment may be subsequently
withdrawn by similar written notice.

         The Liquidator shall have the rights set forth in Section 18-803(b) of
the LLC Act and exclusively shall have the rights, power and authority of the
Managing Member necessary or appropriate in its discretion to effect the
dissolution, winding up and liquidation of Garnet. The actions of the Liquidator
shall for all purposes be the actions of Garnet.

         (b) Fees. Garnet is authorized to pay a reasonable fee to the
Liquidator for its services performed pursuant to this Article XII and to
reimburse the Liquidator for its reasonable costs and expenses incurred in
performing those services.

         (c) Resignation of Liquidator. At any time any Liquidator may, in its
discretion, resign as Liquidator and the Garnet Common Member (or the Garnet
Preferred Member if it may then appoint the Liquidator) shall appoint a
replacement Liquidator pursuant to Section 12.8(a).

         Section 12.9 Form of Liquidating Distributions.

         (a) In General. Except as provided in this Section 12.9, for purposes
of making distributions required by Section 12.2, the Liquidator may determine
whether to distribute all or any portion of Garnet Property in-kind or to sell
all or any portion of Garnet Property and distribute the proceeds therefrom,
provided that the Liquidator shall not distribute Garnet Property other than
Cash to the Garnet Preferred Member without its consent, and the Liquidator
shall be required to reduce Garnet Property to Cash to the extent necessary to
make distributions to the Garnet Preferred Member pursuant to Section 12.2 in
Cash.

         (b) Garnet Preferred Member In-Kind Election. At the election of the
Garnet Preferred Member, the Liquidator may be required to distribute all of the
Garnet Property in-kind. In such event, Garnet Property to be distributed to
each Member shall be determined by the Liquidator; provided that, subject to the
next sentence, distributions of any Garnet Property to the Garnet Preferred
Member other than any EPED B/Garnet Notes or Financial Investments held by
Garnet shall require the consent of all of the Members. If the liquidation of
Garnet is caused by the Bankruptcy of El Paso, the Garnet Common Member, the
Managing Member or Garnet then, upon the request of the Garnet Preferred Member
and to the extent so requested, the Liquidator shall distribute to the Garnet
Preferred Member, to the extent practicable, the EPED B/Garnet Notes or
Financial Investments held by Garnet.

         Section 12.10 Liquidation Notice.

         (a) Liquidating Events Prior to Extension Period. Prior to the
Extension Period Commencement Date, the Garnet Preferred Member may, at any time
on or after the occurrence of a Note Trigger Event or a Specified Equity Event,
deliver to the Managing Member (and, if the Garnet Common Member is not the
Managing Member, the Garnet Common Member) a written notice (a "LIQUIDATION
NOTICE") stating that such Note Trigger Event or such Specified Equity Event
constitutes a Liquidating Event; provided, however, that: (i) the delivery of a
Liquidation Notice shall not become effective to cause a Liquidating Event until
(A) the

                                       48
<PAGE>

                                                            Garnet LLC Agreement

applicable Asset Remedy Standstill Expiration Date or (B) in the case of a
Specified Equity Event, the delivery of such Liquidation Notice; (ii) except in
the case of a Specified Equity Event, the Garnet Preferred Member may rescind
such Liquidation Notice by delivering to the Managing Member (and, if the Garnet
Common Member is not the Managing Member, the Garnet Common Member) a rescission
notice prior to the applicable Asset Remedy Standstill Expiration Date; and
(iii) except in the case of a Specified Equity Event, if both (x) an Irrevocable
Election has been made by the Diamond Class B Member and a Purchase Option
Notice or Retirement Notice has been delivered pursuant to the Diamond LLC
Agreement on or prior to the applicable Asset Remedy Standstill Expiration Date
and (y) an Irrevocable Election has been made by the Topaz Majority Member and a
Purchase Option Notice or Retirement Notice has been delivered pursuant to the
Topaz LLC Agreement on or prior to the applicable Asset Remedy Standstill
Expiration Date, then no Liquidation Notice shall become effective to cause a
Liquidating Event until the day after the Purchase Date or Retirement Date, as
the case may be, specified in such notices (and then if, but only if, each of
the Diamond Class A Member Interest and the Topaz Minority Member Interest shall
not have been either purchased or retired).

         (b) Liquidating Events During Extension Period. The Garnet Preferred
Member may, on any date during the Extension Period, elect to cause a
Liquidating Event by delivering to the Managing Member (and, if the Garnet
Common Member is not the Managing Member, the Garnet Common Member) a
Liquidation Notice; provided, however, that: (i) the delivery of such
Liquidation Notice shall not become effective to cause a Liquidating Event until
the 10th Business Day following delivery of such Liquidation Notice; (ii) the
Garnet Preferred Member may rescind such Liquidation Notice by delivering to the
Managing Member (and, if the Garnet Common Member is not the Managing Member,
the Garnet Common Member) a rescission notice prior to such 10th Business Day;
and (iii) if both (x) an Irrevocable Election has been made by the Diamond Class
B Member and a Purchase Option Notice or Retirement Notice has been delivered
pursuant to the Diamond LLC Agreement on or prior to such 10th Business Day and
(y) an Irrevocable Election has been made by the Topaz Majority Member and a
Purchase Option Notice or Retirement Notice has been delivered pursuant to the
Topaz LLC Agreement on or prior to such 10th Business Day, no Liquidation Notice
shall become effective to cause a Liquidating Event until the day after the
Purchase Date or Retirement Date, as the case may be, specified in such notices
(and then if, but only if, each of the Topaz Minority Member Interest and the
Diamond Class A Member Interest shall not have been either purchased or
retired).

                                  ARTICLE XIII

                                  MISCELLANEOUS

         Section 13.1 Amendments. No amendment or waiver of any provision of
this Garnet LLC Agreement, and no consent to any departure by any party
herefrom, shall in any event be effective unless the same shall be in writing
and signed by all Members in accordance with Section 9.1. No such waiver of a
provision or consent to a departure in any one instance shall be construed as a
further or continuing waiver of or consent to subsequent occurrences, or a
waiver of any other provision or consent to any other departure.

         Section 13.2 Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this Garnet LLC Agreement
shall be in writing or by

                                       49
<PAGE>

                                                            Garnet LLC Agreement

facsimile and shall be deemed to have been delivered, given, and received for
all purposes (a) if delivered personally to the Person or to an officer of the
Person to whom the same is directed or (b) when the same is actually received
(if during the recipient's normal business hours if during a Business Day, or,
if not, on the next succeeding Business Day), if sent by facsimile (followed by
a hard copy of the facsimiled communication sent by regular mail, postage and
charges prepaid), or by courier or delivery service or by mail, addressed, if to
any Member or the Managing Member, to such person at its address or facsimile
number set forth on Schedule 13.2 hereto or to such other address as such Person
may from time to time specify by notice, and if to any other Person, at its
address specified in the Transaction Document pursuant to which such Person is
to receive notice or by notice given in the manner provided herein to each other
Person entitled to receive notice hereunder, or, in each case, to such other
address (and with copies to such other Persons) as the Person entitled to
receive notice hereunder shall specify by notice given in the manner provided
herein to the other Persons entitled to receive notice under the relevant
Transaction Document. A copy of each notice, request, report, consent or demand
to be delivered hereunder shall also be delivered to Investor, the Indenture
Trustee and the Collateral Agent, unless such notice was delivered by or has
been delivered to such Persons.

         Section 13.3 No Waiver; Cumulative Remedies. No failure on the part of
any Person to exercise, and no delay in exercising, any right under this Garnet
LLC Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Garnet LLC Agreement preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided in this Garnet LLC Agreement are cumulative and not exclusive of any
remedies provided by Applicable Law.

         Section 13.4 Waiver of Jury Trial. EACH PARTY TO THIS GARNET LLC
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS GARNET LLC AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.

         Section 13.5 Counterparts. This Garnet LLC 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.
This Garnet LLC Agreement may be delivered by facsimile transmission of the
relevant signature pages thereof.

         Section 13.6 Survival of Representations, Warranties and Indemnities;
Entire Agreement. All representations, warranties and indemnities and
undertakings to pay costs and expenses contained in this Garnet LLC Agreement or
made by or on behalf of the parties hereto, as the case may be, in connection
with this Garnet LLC Agreement shall survive (a) the execution and delivery of
this Garnet LLC Agreement and the other Transaction Documents, (b) performance
by each party of its Obligations under this Garnet LLC Agreement and each other
Transaction Document to which it is a party and (c) the Disposition (whether or
not such Disposition was a Permitted Transfer) by (i) EPED B of all or a portion
of its Garnet Common Member Interest in Garnet or any termination of its status
as a Garnet Common Member pursuant to this Garnet LLC Agreement or (ii) any
other Member of all or a portion of its Garnet

                                       50
<PAGE>

                                                            Garnet LLC Agreement

Interest or any termination of such Person's status as a Member of Garnet, and
may be relied upon by the Persons permitted thereunder, regardless of any
investigation made at any time by or on behalf of such Persons or any such
assignee.

         Section 13.7 Severability. If any term, provision, covenant or
condition of this Garnet LLC Agreement, or the application thereof to any party
hereto or any circumstance, is held to be unenforceable, invalid or illegal (in
whole or in part) for any reason (in any relevant jurisdiction), the remaining
terms, provisions, covenants and conditions of this Garnet LLC Agreement,
modified by the deletion of the unenforceable, invalid or illegal portion (in
any relevant jurisdiction), will continue in full force and effect, and such
unenforceability, invalidity or illegality will not otherwise affect the
enforceability, validity or legality of the remaining terms. provisions,
covenants or conditions of this Garnet LLC Agreement so long as this Garnet LLC
Agreement as so modified continues to express, without material change, the
original intentions of the parties hereto as to the subject matter hereof and
the deletion of such portion of this Garnet LLC Agreement will not substantially
impair the respective expectations or reciprocal obligations of the parties
hereto or the practical realization of the benefits that would otherwise be
conferred upon such parties. If any provision hereof is held to be
unenforceable, invalid or illegal as stated above, the parties hereto will
endeavor in good faith negotiations to replace such provision with a valid
provision, the economic effect of which comes as close as possible to that of
the prohibited unenforceable provision.

         Section 13.8 Construction. Every covenant, term, and provision of each
Transaction Document shall be construed simply according to its fair meaning and
not strictly for or against any party thereto.

         Section 13.9 [Reserved].

         Section 13.10 Governing Law. THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES) SHALL GOVERN THE VALIDITY OF THIS GARNET
LLC AGREEMENT, THE CONSTRUCTION OF ITS TERMS, AND THE INTERPRETATION OF THE
RIGHTS AND DUTIES OF THE MEMBERS.

         Section 13.11 Waiver of Action for Partition. Each of the Members
irrevocably waives any right that it may have to maintain any action for
partition with respect to any of the Garnet Property.

         Section 13.12 Consent to Jurisdiction. Each Member (i) irrevocably
submits to the jurisdiction of any Delaware State court or federal court sitting
in Wilmington, Delaware and of any New York State court or Federal court sitting
in the Borough of Manhattan in any action arising out of this Garnet LLC
Agreement, (ii) agrees that all claims in such action may be decided in such
court, (iii) waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum and (iv) consents to the service of process by mail. A
final judgment in any such action shall be conclusive and may be enforced in
other jurisdictions. Nothing herein shall affect the right of any party to serve
legal process in any manner permitted by law or affect its right to bring any
action in any other court.

                                       51
<PAGE>

                                                            Garnet LLC Agreement

         Section 13.13 Specific Performance. Each Member agrees with the other
Members that the other Members would be irreparably damaged if any of the
provisions of this Garnet LLC Agreement are not performed in accordance with
their specific terms and that monetary damages would not provide an adequate
remedy in such event. Accordingly, it is agreed that, in addition to any other
remedy to which the nonbreaching Members may be entitled, at law or in equity,
the nonbreaching Members shall be entitled to injunctive relief to prevent
breaches of the provisions of this Garnet LLC Agreement and specifically to
enforce the terms and provisions of this Garnet LLC Agreement in any action
instituted in any court of the United States or any state thereof having subject
matter jurisdiction thereof.

         Section 13.14 [Reserved].

         Section 13.15 Acknowledgement and Consent to Collateral Agreement.
Pursuant to the terms of the Collateral Agreement, Emerald has pledged,
hypothecated, assigned and transferred to the Collateral Agent for the benefit
of the Secured Party (as defined therein), and granted to the Collateral Agent
for the benefit of the Secured Party, a security interest in, certain of its
property, including the Pledged Citrine Interest. Each of Garnet and the Garnet
Common Member hereby acknowledges and consents, for the benefit of Topaz, the
Collateral Agent, Investor and the Indenture Trustee, to the granting of such
security interest by Emerald (or to any subsequent transfer of the Pledged
Citrine Interest following foreclosure on such security interest) and agrees
that the Collateral Agent, on behalf of the Secured Party (or any subsequent
transferee of the Pledged Citrine Interest following foreclosure on such
security interest), shall be entitled to exercise the rights of the Garnet
Preferred Member to the extent set forth in the Collateral Agreement. Each of
Garnet and the Garnet Common Member hereby agrees that Topaz, the Collateral
Agent, Investor and the Indenture Trustee shall each expressly have all of the
rights of an intended third-party beneficiary in respect of the rights of the
Garnet Preferred Member under this Garnet LLC Agreement.

         Section 13.16 Effectiveness. This Garnet LLC Agreement shall take
effect as of the Effective Date.

                                       52
<PAGE>
                                                            Garnet LLC Agreement

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

                               GARNET PREFERRED MEMBER:

                               CITRINE FC COMPANY

                               By:     /s/ Antonio Carlos C. Balthazar
                                    ------------------------------------------
                                     Name:  Antonio Carlos C. Balthazar
                                     Title: Authorized Signatory

                               GARNET COMMON MEMBER:

                               EPED B COMPANY

                               By:     /s/ Antonio Carlos C. Balthazar
                                    ------------------------------------------
                                      Name:  Antonio Carlos C. Balthazar
                                      Title: Authorized Signatory

                       Garnet LLC Agreement Signature Page

<PAGE>
                                                            Garnet LLC Agreement

ACKNOWLEDGED AND AGREED:

EPED B COMPANY, as Managing Member

         By:     /s/ Antonio Carlos C. Balthazar
              --------------------------------------------
                Name:  Antonio Carlos C. Balthazar
                Title: Authorized Signatory

ACKNOWLEDGED AND AGREED:

GARNET POWER HOLDINGS, L.L.C.

         By:   EPED B COMPANY, its Managing Member

         By:     /s/ Antonio Carlos C. Balthazar
              --------------------------------------------
                Name:  Antonio Carlos C. Balthazar
                Title: Authorized Signatory

                       Garnet LLC Agreement Signature Page<PAGE>
                                                                 EXHIBIT 10.CC 5

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

                                    INDENTURE

                             dated as of May 9, 2002

                                      among

                           GEMSTONE INVESTOR LIMITED,

                                     Issuer,

                            GEMSTONE INVESTOR, INC.,

                                   Co-Issuer,

                              THE BANK OF NEW YORK,

                              New Indenture Trustee

                                       and

                              EL PASO CORPORATION,

                                    Guarantor

                7.71% Guaranteed Senior Unsecured Notes due 2004

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

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               PAGE
<S>                                                                                                            <C>
ARTICLE I  DEFINITIONS............................................................................................1
         SECTION 1.01.         Definitions........................................................................1
         SECTION 1.02.         Rules of Construction..............................................................8
         SECTION 1.03.         Legal Holidays.....................................................................8
         SECTION 1.04.         Compliance Certificates and Opinions...............................................8
         SECTION 1.05.         Form of Documents Delivered to Trustee.............................................9

ARTICLE II  THE NOTES.............................................................................................9
         SECTION 2.01.         Forms Generally....................................................................9
         SECTION 2.02.         Authorized Amount; Interest Rate; Maturity Date; Denominations....................11
         SECTION 2.03.         Execution, Authentication, Delivery and Dating....................................11
         SECTION 2.04.         Registrar and Paying Agent; Registration..........................................12
         SECTION 2.05.         Payments of Principal and Interest; Rights Preserved..............................13
         SECTION 2.06.         Transfer and Exchange of New Notes................................................16
         SECTION 2.07.         Replacement of Lost, Mutilated or Stolen New Notes................................21
         SECTION 2.08.         Taxes.............................................................................22
         SECTION 2.09.         Cancellation......................................................................22

ARTICLE III  GUARANTEE OF NEW NOTES..............................................................................23
         SECTION 3.01.         El Paso Guarantee.................................................................23
         SECTION 3.02.         Obligations Unconditional.........................................................24
         SECTION 3.03.         Limitation of Guarantor's Liability...............................................24
         SECTION 3.04.         Subordination of Subrogation and Other Rights.....................................24
         SECTION 3.05.         Execution and Delivery of El Paso Guarantee.......................................25
         SECTION 3.06.         Notice to New Indenture Trustee...................................................25
         SECTION 3.07.         This Article Not to Prevent Events of Default.....................................25

ARTICLE IV  ISSUANCE.............................................................................................25
         SECTION 4.01.         Conditions to Issuance............................................................25
         SECTION 4.02.         Waiver of Conditions to Issuance..................................................26

ARTICLE V  THE ACCOUNT...........................................................................................26
         SECTION 5.01.         Establishment of New Notes Account................................................26
         SECTION 5.02.         New Notes Account.................................................................27
         SECTION 5.03.         [Reserved]........................................................................27
         SECTION 5.04.         [Reserved]........................................................................27
         SECTION 5.05.         Payments..........................................................................27
         SECTION 5.06.         Report to New Noteholders.........................................................31
         SECTION 5.07.         Termination.......................................................................32

ARTICLE VI  REPRESENTATIONS AND WARRANTIES OF THE ISSUERS........................................................32
         SECTION 6.01.         Representations and Warranties....................................................32
         SECTION 6.02.         Survival of Representations and Warranties........................................34

ARTICLE VII  COVENANTS OF THE ISSUERS AND THE GUARANTOR..........................................................34
         SECTION 7.01.         Covenants of the Issuers and the Guarantor........................................34
</Table>

<PAGE>

<Table>
<S>                                                                                                            <C>
ARTICLE VIII  LIMITATION ON LIABILITY OF THE ISSUERS.............................................................42
         SECTION 8.01.         Liabilities of the Issuers........................................................42

ARTICLE IX  EVENTS OF DEFAULT....................................................................................42
         SECTION 9.01.         Events of Default.................................................................42
         SECTION 9.02.         Application of Proceeds...........................................................44
         SECTION 9.03.         Waiver of Past Events of Default..................................................44
         SECTION 9.04.         Provisions Relating to Recourse for the New Notes.................................44

ARTICLE X  SATISFACTION AND DISCHARGE OF NEW INDENTURE; NOTICE OF CERTAIN EVENTS; UNCLAIMED MONEYS...............47
         SECTION 10.01.        Satisfaction and Discharge of New Indenture.......................................47
         SECTION 10.02.        [Reserved]........................................................................47
         SECTION 10.03.        Repayment of Moneys and Transfer of Eligible Investments Held by
                               New Indenture Trustee.............................................................47
         SECTION 10.04.        Return of Moneys Held by New Indenture Trustee....................................47
         SECTION 10.05.        [Reserved]........................................................................48

ARTICLE XI  CONCERNING THE NEW INDENTURE TRUSTEE.................................................................48
         SECTION 11.01.        Duties of the New Indenture Trustee; Certain Rights of the New
                               Indenture Trustee.................................................................48
         SECTION 11.02.        Performance of New Indenture Trustee's Duties.....................................50
         SECTION 11.03.        Resignation and Removal; Appointment of Successor New Indenture
                               Trustee...........................................................................50
         SECTION 11.04.        Acceptance of Appointment by Successor New Indenture Trustee......................51
         SECTION 11.05.        Merger or Consolidation of New Indenture Trustee..................................51
         SECTION 11.06.        Certain Procedural Matters........................................................51
         SECTION 11.07.        New Indenture Trustee Fees and Indemnification....................................51
         SECTION 11.08.        Information.......................................................................52
         SECTION 11.09.        Eligibility Requirements for New Indenture Trustee................................52
         SECTION 11.10.        New Indenture Trustee Not Liable for New Notes....................................53
         SECTION 11.11.        New Indenture Trustee May Own New Notes...........................................53
         SECTION 11.12.        Maintenance of Office or Agency...................................................53
         SECTION 11.13.        Appointment of Co-Indenture Trustee...............................................53
         SECTION 11.14.        [Reserved]........................................................................53
         SECTION 11.15.        [Reserved]........................................................................53
         SECTION 11.16.        [Reserved]........................................................................53

ARTICLE XII  SUPPLEMENTAL NEW INDENTURES.........................................................................53
         SECTION 12.01.        Supplemental New Indentures Without Consent of New Noteholders....................53
         SECTION 12.02.        Supplemental New Indentures With Consent of New Noteholders.......................54
         SECTION 12.03.        Effect of Supplemental New Indenture..............................................55
         SECTION 12.04.        Documents to Be Given to New Indenture Trustee....................................55
         SECTION 12.05.        Notation on New Notes in Respect of Supplemental New Indentures...................55

ARTICLE XIII  CONCERNING THE NEW HOLDERS.........................................................................55
         SECTION 13.01.        Control by Majority New Holders...................................................55
         SECTION 13.02.        Evidence of Action Taken by New Holders...........................................56
</Table>

                                       ii
<PAGE>

<Table>
<S>                                                                                                            <C>
         SECTION 13.03.        Proof of Execution of Instruments.................................................56
         SECTION 13.04.        New Notes Owned by the Issuers....................................................56
         SECTION 13.05.        Right of Revocation of Action Taken...............................................56

ARTICLE XIV  OPTIONAL REDEMPTION.................................................................................57
         SECTION 14.01.        Optional Redemption...............................................................57
         SECTION 14.02.        Notice of Optional Redemption.....................................................58
         SECTION 14.03.        Selection of New Notes to be Redeemed.............................................59
         SECTION 14.04.        Deposit of Optional Redemption Price..............................................59
         SECTION 14.05.        Payment of New Notes Called for Optional Redemption...............................59
         SECTION 14.06.        New Notes Redeemed in Part........................................................60

ARTICLE XV  MANDATORY REDEMPTION AND SPECIAL REDEMPTION..........................................................60
         SECTION 15.01.        Mandatory Redemption..............................................................60
         SECTION 15.02.        Notice of Mandatory Redemption....................................................60
         SECTION 15.03.        Selection of New Notes to be Redeemed.............................................61
         SECTION 15.04         Special Redemption................................................................61
         SECTION 15.05.        Notice of Special Redemption......................................................61
         SECTION 15.06.        Selection of New Notes to be Redeemed.............................................62

ARTICLE XVI  MISCELLANEOUS.......................................................................................62
         SECTION 16.01.        Survival..........................................................................62
         SECTION 16.02.        Notices...........................................................................62
         SECTION 16.03.        Severability of Provisions........................................................65
         SECTION 16.04         Effect of Headings................................................................65
         SECTION 16.05.        Counterparts......................................................................65
         SECTION 16.06.        Further Assurance.................................................................65
         SECTION 16.07         Governing Law; Waiver of Jury Trial...............................................65
         SECTION 16.08.        Entire Agreement..................................................................67
         SECTION 16.09.        Benefit of Agreement..............................................................67
         SECTION 16.10.        Limitation on Rights of New Noteholders...........................................67
         SECTION 16.11.        [Reserved]........................................................................68
         SECTION 16.12.        Notes Non-Assessable and Fully Paid...............................................68

         Exhibit A         Form of Rule 144A Global Note
         Exhibit B         Form of Regulation S Temporary Global Note/Regulation S Global Note
         Exhibit C         Form of Certificate of Transfer
         Exhibit D         Form of Important Notice
         Exhibit E         Form of Section 3(c)(7) Reminder Notice
         Exhibit F         Form of Default Notice
         Exhibit G         Form of El Paso Guarantee
</Table>

                                      iii
<PAGE>

                                    INDENTURE

                  This INDENTURE (hereinafter, this "New Indenture"), dated as
of May 9, 2002, is among GEMSTONE INVESTOR LIMITED, an exempted limited
liability company incorporated under the laws of the Cayman Islands
("Investor"), GEMSTONE INVESTOR, INC., a Delaware corporation (the "Co-Issuer"
and, together with Investor, the "Issuers"), THE BANK OF NEW YORK, a New York
banking corporation (in its capacity as indenture trustee, the "New Indenture
Trustee") and EL PASO CORPORATION, a Delaware corporation (in its capacity as
guarantor, the "Guarantor").

                                   WITNESSETH:

                  WHEREAS, pursuant to a Participation Agreement dated as of
October 25, 2001 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Participation Agreement") among El Paso, EPED
Holding, EPED B, Investor, the Co-Issuer, Topaz, Emerald, Citrine, Garnet,
Diamond, Amethyst, Diamond Holdings, Aquamarine, Peridot, the Management
Company, the Share Trust, the Class A Shareholder (each as defined therein),
Wilmington Trust Company and The Bank of New York, the Issuers have issued,
offered and sold the Notes;

                  WHEREAS, the Issuers have authorized the issuance of up to
$950,000,000 aggregate principal amount of their 7.71% Guaranteed Senior
Unsecured Notes due 2004 (together with the El Paso Guarantee endorsed thereon,
the "New Notes"), the payments of which will be guaranteed by the El Paso
Guarantee, to be exchanged for up to $950,000,000 aggregate principal amount of
the Notes;

                  WHEREAS, the execution and delivery of this New Indenture has
been duly authorized by the Issuers and the Guarantor;

                  WHEREAS, the New Indenture Trustee has accepted the trusts
created by this New Indenture and in evidence thereof has joined in the
execution hereof;

                  WHEREAS, all things necessary to make the New Notes, when
issued and authenticated by the New Indenture Trustee as contemplated in this
New Indenture, the legal, valid and binding obligations of the Issuers have been
done and performed; and

                  WHEREAS, all things necessary to make the El Paso Guarantee
the legal, valid and binding obligation of the Guarantor have been done and
performed.

                  NOW, THEREFORE, THIS NEW INDENTURE WITNESSETH, that for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and for the purpose of fixing and declaring the terms and
conditions upon which the New Notes are to be issued, authenticated, delivered,
guaranteed and accepted by all Persons who shall from time to time be or become
holders thereof, the Issuers, the Guarantor and the New Indenture Trustee, for
the benefit of the holders of the New Notes, agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01. Definitions. References to "Sections" and
"Articles" herein refer to Sections and Articles of this New Indenture unless
otherwise stated. Unless otherwise defined herein or unless the context shall
otherwise require, capitalized terms used in this New Indenture shall have the
meanings assigned to such terms in Annex A to the Participation Agreement.
Whenever used in this New

<PAGE>

Indenture, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:

                  "Acceleration Date" means any date on which the maturity of
the New Notes is accelerated in accordance with Section 9.01.

                  "Account Statement" has the meaning assigned to such term in
Section 5.06.

                  "Amount Available" means, with respect to the New Notes
Account at any time, the amount in Cash credited to the New Notes Account at
such time.

                  "Applicable Procedures" means, with respect to any transfer or
exchange of, or for beneficial interests in, any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.

                  "Authentication Order" means an order executed by the Issuers
and addressed to the New Indenture Trustee for the authentication and delivery
of any of the New Notes.

                  "Certificate of Authentication" has the meaning assigned to
such term in Section 2.03(f).

                  "Clearstream" means Clearstream Banking, societe anonyme.

                  "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the applicable securities that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the applicable securities.

                  "Comparable Treasury Price" means, with respect to any
Optional Redemption Date, any Special Redemption Date which is attributable to
an Event of Default described in Section 9.01(a) or (n) of the Indenture or any
Acceleration Date which is attributable to an Event of Default described in
Section 9.01(a), as applicable, (i) the average of the applicable Reference
Treasury Dealer Quotations requested by the New Indenture Trustee from at least
four Reference Treasury Dealers for such Optional Redemption Date, Special
Redemption Date or Acceleration Date, as the case may be, after excluding the
highest and lowest such applicable Reference Treasury Dealer Quotations, or (ii)
if fewer than four such Reference Treasury Dealer Quotations are obtained, the
average of all such Reference Treasury Dealer Quotations.

                  "Consolidated Net Tangible Assets" means, at any date of
determination, the total amount of assets after deducting therefrom (i) all
current liabilities (excluding (A) any current liabilities that by their terms
are extendable or renewable at the option of the obligor thereon to a time more
than 12 months after the time as of which the amount thereof is being computed,
and (B) current maturities of long-term debt) and (ii) the value (net of any
applicable reserves) of all goodwill, trade names, trademarks, patents and other
like intangible assets, all as set forth on the consolidated balance sheet of
the Guarantor and its consolidated subsidiaries for the Guarantor's most
recently completed fiscal quarter, prepared in accordance with GAAP.

                  "Corporate Trust Office" means the principal office of the New
Indenture Trustee at which at any particular time its corporate trust business
shall be administered, which office, at the date of the execution of this New
Indenture, is located at The Bank of New York, 5 Penn Plaza, New York, New York
10001, Attn: Louis Young, or any other office specified in writing by the New
Indenture Trustee.

                  "Custodian" has the meaning assigned to such term in Section
2.01(b).

                                       2
<PAGE>

                  "Debt" means any obligation created or assumed by any Person
for the repayment of money borrowed and any purchase money obligation created or
assumed by such Person.

                  "Default Amount" means, for any period, the product of (a) the
Default Interest Rate, (b) the amount overdue on the New Notes and (c) the
quotient of (i) the number of days actually elapsed (calculated on the basis of
a 360-day year consisting of twelve 30-day months) since the date on which
payment was due and (ii) 360.

                  "Default Notice" has the meaning assigned to such term in
Section 9.01.

                  "Definitive Notes" means one or more definitive New Notes
registered in the name of the New Holder thereof and issued in accordance with
Section 2.06, substantially in the form of Exhibit A or B hereto except that
such New Notes shall not bear the Global Note Legend and shall not have the
"Schedule of Exchanges of Interests in the Global Note" attached thereto.

                  "Depositary" means DTC, its nominees and their respective
successors and assigns or such other depositary institution hereinafter
appointed by Investor.

                  "Distribution Compliance Period" has the meaning assigned to
such term in Regulation S.

                  "DTC" means The Depository Trust Company.

                  "El Paso Guarantee" means the guarantee by the Guarantor of
the Issuers' payment obligations under this New Indenture and the New Notes
pursuant to Article III, as evidenced by an endorsement on the New Notes.

                  "El Paso Permitted Liens" means (i) Liens upon rights-of-way
for pipeline purposes; (ii) any governmental Lien, mechanics', materialmen's,
carriers' or similar Lien incurred in the ordinary course of business which is
not yet due or which is being contested in good faith by appropriate proceedings
and any undetermined Lien which is incidental to construction; (iii) the right
reserved to, or vested in, any municipality or public authority by the terms of
any right, power, franchise, grant, license, permit or by any provision of law,
to purchase or recapture or to designate a purchaser of, any property; (iv)
Liens of taxes and assessments which are (A) for the then current year, (B) not
at the time delinquent or (C) delinquent but the validity of which is being
contested at the time by the Guarantor or any Subsidiary in good faith; (v)
Liens of, or to secure performance of, leases; (vi) any Lien upon, or deposits
of, any assets in favor of any surety company or clerk of court for the purpose
of obtaining indemnity or stay of judicial proceedings; (vii) any Lien upon
property or assets acquired or sold by the Guarantor or any Restricted
Subsidiary resulting from the exercise of any rights arising out of defaults on
receivables; (viii) any Lien incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance, temporary
disability, social security, retiree health or similar laws or regulations or to
secure obligations imposed by statute or governmental regulations; (ix) any Lien
upon any property or assets in accordance with customary banking practice to
secure any Debt incurred by the Guarantor or any Restricted Subsidiary in
connection with the exporting of goods to, or between, or the marketing of goods
in, or the importing of goods from, foreign countries; or (x) any Lien in favor
of the United States or any state thereof, or any other country, or any
political subdivision of any of the foregoing, to secure partial, progress,
advance or other payments pursuant to any contract or statute, or any Lien
securing industrial development, pollution control or similar revenue bonds.

                  "Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system, or any successor to Morgan
Guaranty Trust Company of New York, Brussels office, as operator thereof.

                  "Events of Default" has the meaning assigned to such term in
Section 9.01.

                                       3
<PAGE>

                  "Excepted Rights" has the meaning assigned to such term in
Section 1.01 of the Indenture; provided that upon the satisfaction and discharge
of the Indenture, the definition of "Excepted Rights" shall continue to have
such meaning as if the Indenture had not been satisfied and discharged (but
without giving effect to any supplement or other modification made in
contemplation of such satisfaction and discharge); provided, further, that any
provisions included in the definition of "Excepted Rights" that are required for
the interpretation thereof and would otherwise terminate upon the satisfaction
and discharge of the Indenture shall also be considered to continue for the
purposes of such interpretation.

                  "Exchange Offer" means the issuance by the Issuers of a
principal amount of New Notes equal to the outstanding principal amount of Notes
that are tendered by the Noteholders in exchange for such New Notes, pursuant to
the Offering Circular and Consent Solicitation Statement.

                  "Funded Debt" means all Debt maturing one year or more from
the date of the creation thereof, all Debt directly or indirectly renewable or
extendible, at the option of the debtor, by its terms or by the terms of any
instrument or agreement relating thereto, to a date one year or more from the
date of the creation thereof, and all Debt under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more.

                  "Global Note Legend" has the meaning assigned to such term in
Section 2.06(d)(ii).

                  "Global Notes" means, individually and collectively, one or
more Rule 144A Global Notes, Regulation S Global Notes and/or Regulation S
Temporary Global Notes.

                  "Guaranteed Obligations" has the meaning assigned to such term
in Section 3.01.

                  "Guarantor" has the meaning assigned to such term in the
introductory paragraph of this New Indenture.

                  "Indebtedness" means (a) indebtedness for borrowed money, (b)
obligations (other than any trade payable obligation which shall not have
remained unpaid for 91 days or more from the original due date thereof) to pay
the deferred purchase price of property or services or (c) obligations as lessee
under leases which shall have been or should be, in accordance with GAAP,
recorded as capital leases.

                  "Indenture Default" means any event or occurrence that with
the giving of notice or lapse of time or both would become an Event of Default.

                  "Independent Investment Banker" means CSFB or such other
independent investment banking institution of national or international standing
selected by the New Indenture Trustee.

                  "Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.

                  "Interest Amount" means, for any Note Payment Date, the
product of (a) the Note Rate, (b) the aggregate Outstanding principal amount of
New Notes and (c) the quotient of (i) the number of days actually elapsed
(calculated on the basis of a 360-day year consisting of twelve 30-day months)
since the later of the Closing Date or the last Semi-Annual Payment Date and
(ii) 360.

                  "Issuers' Certificate" means a certificate of Investor
executed on behalf of itself and the Co-Issuer.

                  "Letter of Transmittal" means the letter of transmittal to be
prepared by the Issuers and sent to the Noteholders for use by such Noteholders
in connection with the Exchange Offer.

                                       4
<PAGE>

                  "Majority New Holders" or "Majority New Noteholders" means, at
any time, New Noteholders holding, collectively, New Notes evidencing at least a
majority in aggregate Outstanding principal amount of the New Notes.

                  "Mandatory Redemption" has the meaning assigned to such term
in Section 15.01(d).

                  "Mandatory Redemption Date" has the meaning assigned to such
term in Section 15.01(d).

                  "Mandatory Redemption Price" has the meaning assigned to such
term in Section 15.01(d).

                  "Maturity Date" has the meaning assigned to such term in
Section 2.02(c).

                  "New Administrative Expenses" means, without duplication: (a)
the New Indenture Trustee Fee, (b) any New Indenture Trustee Expenses, (c) the
out-of-pocket expenses and fees of the Paying Agents due or payable pursuant to
the Transaction Documents as of any Note Payment Date, (d) any indemnity
payments payable by the Issuers and/or the Guarantor to the New Indenture
Trustee pursuant to Section 11.07, (e) any fees and expenses due or payable to
each Rating Agency in connection with any rating or rating estimate of the New
Notes as contemplated by the Transaction Documents and (f) any costs or expenses
payable pursuant to Section 7.01(k).

                  "New Holders" and "New Noteholders" means the registered
holders from time to time of any of the New Notes.

                  "New Indenture Trustee Expenses" has the meaning assigned to
such term in Section 11.07(a).

                  "New Indenture Trustee Fee" means the initial and annual fee
to be paid to the New Indenture Trustee pursuant to Section 11.07 and in
accordance with a separate fee agreement between Investor and the New Indenture
Trustee.

                  "New Notes" has the meaning assigned in the second recital to
this New Indenture.

                  "New Notes Account" has the meaning assigned to such term in
Section 5.01(a).

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

                  "Note Payment Date" means: (a) each Semi-Annual Payment Date,
(b) with respect to an Acceleration Date, any date following such Acceleration
Date on which funds are received for distribution pursuant to Section 5.05, (c)
an Optional Redemption Date, (d) a Mandatory Redemption Date, (e) a Special
Redemption Date and (f) the Maturity Date.

                  "Note Rate" means the fixed per annum rate equal to 7.71%.

                  "Note Register" has the meaning assigned to such term in
Section 2.04(a).

                  "Notice of Mandatory Redemption" has the meaning assigned to
such term in Section 15.02.

                  "Notice of Optional Redemption" has the meaning assigned to
such term in Section 14.02.

                                       5
<PAGE>

                  "Notice of Special Redemption" has the meaning assigned to
such term in Section 15.05.

                  "Officer's Certificate" means a certificate of any Person
signed by any Authorized Officer of such Person.

                  "Opinion of Counsel" means an opinion in writing signed by
legal counsel and delivered to the New Indenture Trustee which counsel may be an
employee of El Paso or other counsel reasonably satisfactory to the New
Indenture Trustee.

                  "Optional Redemption" has the meaning assigned to such term in
Section 14.01(b).

                  "Optional Redemption Date" has the meaning assigned to such
term in Section 14.01(b).

                  "Optional Redemption Price" has the meaning assigned to such
term in Section 14.01(e).

                  "Outstanding" means at any time all New Notes authenticated
and delivered by the New Indenture Trustee under this New Indenture except:

                  (a) New Notes theretofore canceled by the New Indenture
Trustee or delivered to the New Indenture Trustee for cancellation;

                  (b) New Notes or portions thereof with respect to which moneys
in the amount necessary to pay such New Notes or portions thereof shall have
been deposited in trust with the New Indenture Trustee; provided that, if such
New Notes or portions thereof are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as herein provided or provision
satisfactory to the New Indenture Trustee shall have been made for the giving of
such notice; and

                  (c) New Notes in substitution or exchange for which other New
Notes shall have been authenticated and delivered.

                  "Participant" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).

                  "Paying Agent" means any Person authorized by the Issuers to
pay the principal of or interest or premium on any New Notes on behalf of the
Issuers as specified in Section 2.04(b).

                  "Principal Property" means (a) any pipeline assets of the
Guarantor or any Subsidiary, including any related facilities employed in the
transportation, distribution or marketing of natural gas, that is located in the
United States or Canada and (b) any processing or manufacturing plant owned or
leased by the Guarantor or any Subsidiary and located within the United States
or Canada, except, in the case of either clause (a) or (b), any such assets or
plant which, in the opinion of the board of directors of the Guarantor (or any
committee thereof), is not material in relation to the activities of the
Guarantor and its Subsidiaries as a whole.

                  "QIB" means a "qualified institutional buyer" within the
meaning of Rule 144A.

                  "QP Legend" has the meaning assigned to such term in Section
2.06(d)(iv).

                  "Record Date" has the meaning assigned to such term in Section
5.05(g).

                  "Recourse for the Notes" has the meaning assigned to such term
in Section 2.05(f).

                                       6
<PAGE>

                  "Reference Treasury Dealer" means a primary U.S. Government
securities dealer in New York City as an Independent Investment Banker shall
select at the request of the New Indenture Trustee.

                  "Reference Treasury Dealer Quotations" means, with respect to
any Reference Treasury Dealer and any Optional Redemption Date, any Special
Redemption Date which is attributable to an Event of Default described in
Section 9.01(a) or (n) of the Indenture or any Acceleration Date which is
attributable to an Event of Default described in Section 9.01(a), as applicable,
the average, as determined by an Independent Investment Banker, of the bid and
asked prices for the Comparable Treasury Issue for the New Notes (expressed in
each case as a percentage of its principal amount or stated amount, as the case
may be), quoted in writing by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such Optional Redemption Date, Special Redemption
Date or Acceleration Date, as applicable.

                  "Registrar" has the meaning assigned to such term in Section
2.04(a).

                  "Regulation S" means Regulation S under the Securities Act.

                  "Regulation S Global Note" means one or more permanent global
notes representing New Notes substantially in the form of Exhibit B hereto
bearing the Global Note Legend, the Transfer Restriction Legend and the QP
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary, issued in an aggregate denomination equal to the Outstanding
principal amount of the Regulation S Temporary Global Note upon expiration of
the Distribution Compliance Period.

                  "Regulation S Temporary Global Note" means one or more
temporary global notes representing New Notes substantially in the form of
Exhibit B hereto bearing the Global Note Legend, the Transfer Restriction
Legend, the Regulation S Temporary Global Note Legend and the QP Legend and
deposited with or on behalf of, and registered in the name of, the Depositary,
issued in an aggregate denomination equal to the Outstanding principal amount of
the New Notes issued in exchange for Notes held pursuant to Regulation S under
the Indenture (in accordance with the Exchange Offer).

                  "Regulation S Temporary Global Note Legend" has the meaning
assigned to such term in Section 2.06(d)(iii).

                  "Restricted Subsidiary" means any Subsidiary of the Guarantor
owning or leasing any Principal Property.

                  "Rule 144A" means Rule 144A under the Securities Act.

                  "Rule 144A Global Note" means one or more permanent global
notes substantially in the form of Exhibit A hereto representing New Notes
bearing the Global Note Legend, the Transfer Restriction Legend and the QP
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary, issued in an aggregate denomination equal to the Outstanding
principal amount of the New Notes issued in exchange for Notes acquired pursuant
to Rule 144A under the Indenture (in accordance with the Exchange Offer).

                  "Rule 144A Note" means any New Note issued pursuant to Rule
144A, including any Rule 144A Global Note.

                  "Sale-Leaseback Transaction" means the sale or transfer by the
Guarantor or any Restricted Subsidiary of any Principal Property to a Person
(other than the Guarantor or a Subsidiary) and the taking back by the Guarantor
or any Restricted Subsidiary, as the case may be, of a lease of such Principal
Property.

                                       7
<PAGE>

                  "Semi-Annual Payment Date" means each April 30 and October 31,
commencing October 31, 2002 and ending on the date the New Notes are redeemed in
full, whether upon maturity or otherwise.

                  "Shortfall Notice" has the meaning assigned to such term in
Section 5.05(a).

                  "Special Redemption" has the meaning assigned to such term in
Section 15.04(b).

                  "Special Redemption Date" has the meaning assigned to such
term in Section 15.04(b).

                  "Take-Out Deposit" has the meaning assigned to such term in
Section 15.01(c).

                  "Transfer Restriction Legend" has the meaning assigned to such
term in Section 2.06(d)(i).

                  "Treasury Yield" means, with respect to any Optional
Redemption Date, any Special Redemption Date which is attributable to an Event
of Default described in Section 9.01(a) or (n) of the Indenture or any
Acceleration Date which is attributable to an Event of Default described in
Section 9.01(a), as applicable, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the applicable Comparable Treasury Price for such redemption
date.

                  "U.S. Person" means a "U.S. person" within the meaning of
Regulation S.

                  "U.S. Treasuries" means direct general obligations of, or
obligations fully and unconditionally guaranteed as to the timely payment of
principal and interest by, the United States, but excluding any of such
securities whose terms do not provide for payment of a fixed dollar amount upon
maturity or call for redemption.

                  SECTION 1.02. Rules of Construction. This New Indenture and
the definitions referred to in Section 1.01 shall be governed by, and construed
in accordance with, the rules of construction set forth in Section 1.02 of Annex
A to the Participation Agreement.

                  SECTION 1.03. Legal Holidays. In any case where any Note
Payment Date or any date for the making of a deposit or payment hereunder shall
fall on a day which is not a Business Day, such deposit or payment need not be
made on such date but may be made on the next succeeding day that is a Business
Day with the same force and effect as if made on such Note Payment Date;
provided that no interest shall accrue on the amount so payable for such period.

                  SECTION 1.04. Compliance Certificates and Opinions. Except as
otherwise expressly provided in this New Indenture, upon any application or
request by the Issuers to the New Indenture Trustee that the New Indenture
Trustee take any action under any provision of this New Indenture, the Issuers
shall furnish to the New Indenture Trustee an Issuers' Certificate stating that
all conditions precedent, if any, provided for in this New Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that, in the case of any particular application or
request as to which the furnishing of documents is specifically required by any
provision of this New Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.

                                       8
<PAGE>

                  Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this New Indenture shall include:

                  (a) a statement that each party providing such certificate or
         opinion has read such covenant or condition;

                  (b) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                  (c) a statement that, in the opinion of each such party, such
         examination or investigation has been made as is necessary to enable
         such individual to express an informed opinion as to whether or not
         such covenant or condition has been complied with;

                  (d) a statement as to whether, in the opinion of each such
         individual, such condition or covenant has been complied with; and

                  (e) in the case of an Issuers' Certificate, a statement that
         no Indenture Default or Event of Default under this New Indenture has
         occurred and is continuing (unless such Issuers' Certificate relates to
         an Indenture Default or Event of Default).

                  SECTION 1.05. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person or that they be
so certified by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

                  Any Issuers' Certificate or Opinion of Counsel of the Issuers
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless the person signing such
Issuers' Certificate or Opinion of Counsel has actual knowledge that the
certificate or opinion or representations with respect to the matters upon which
such Issuers' Certificate or Opinion of Counsel is based are erroneous. Any such
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an Authorized Officer of the
Issuers, El Paso or any other party to the Transaction Documents, as applicable,
stating that the information with respect to such factual matters is in the
possession of such Person, unless such counsel knows that the certificate or
opinion or representations with respect to such matters are erroneous.

                  Any Opinion of Counsel stated to be based on the opinion of
other counsel shall be accompanied by a copy of such other opinion.

                  Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this New Indenture, they may, but need not, be
consolidated and form one instrument.

                                   ARTICLE II

                                    THE NOTES

                  SECTION 2.01. Forms Generally.

                  (a) The New Notes and the New Indenture Trustee's Certificate
of Authentication shall be in substantially the forms set forth in Exhibits A
and B hereto (i) in the case of Global Notes, including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached

                                       9
<PAGE>

thereto and (ii) in the case of Definitive Notes, without the Global Note Legend
thereon and without the "Schedule of Exchanges and Interests in the Global Note"
attached, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this New Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with applicable laws or
the rules or requirements of any securities exchange or the Depositary or as
may, consistently herewith, be determined by the Authorized Officers executing
such New Notes, as evidenced by their execution of the New Notes. Any portion of
the text of any New Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the New Note.

                  The terms and provisions contained in the New Notes shall
constitute and are hereby expressly made a part of this New Indenture, and the
Issuers, the Guarantor and the New Indenture Trustee, by their execution and
delivery of this New Indenture, expressly agree to such terms and provisions and
to be bound thereby. To the extent any provision of any New Note conflicts with
the express provisions of this New Indenture, however, the provisions of this
New Indenture shall govern and be controlling.

                  (b) New Notes offered in exchange for Notes (in accordance
with the Exchange Offer) in the United States to QIBs who are also Qualified
Purchasers shall be issued on the Effective Date in the form of the applicable
Rule 144A Global Note in fully registered form without interest coupons and
shall represent the beneficial interests of Persons purchasing such New Notes.
The Rule 144A Global Note shall be deposited with the New Indenture Trustee, as
custodian (the "Custodian") for the Depositary, duly executed by the Issuers,
endorsed by the Guarantor and authenticated by the New Indenture Trustee as
hereinafter provided. The Rule 144A Global Note may be represented by more than
one certificate, if so required by the Depositary's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Rule 144A Global Note may from time to time be increased
or decreased by adjustments made on the records of the Custodian as hereinafter
provided. Interests in a Rule 144A Global Note shall be transferred on the
Depositary's, Euroclear's or Clearstream's book-entry settlement system, as
applicable, in accordance with the Applicable Procedures.

                  (c) New Notes offered in exchange for Notes (in accordance
with the Exchange Offer) in offshore transactions to non-U.S. Persons (as
defined in Regulation S) in reliance on Regulation S shall be issued on the
Effective Date in the form of the applicable Regulation S Temporary Global Note
in fully registered form without interest coupons and shall represent the
beneficial interests of Persons purchasing such New Notes. At any time on or
after the termination of the Distribution Compliance Period and upon the receipt
by the New Indenture Trustee of (i) a written certificate from the Depositary,
together with copies of certificates from Euroclear and Clearstream, certifying
in accordance with Rule 903(b)(3)(ii)(B) under the Securities Act that they have
received certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the applicable Regulation S Temporary Global Note
(except to the extent of any beneficial owners thereof who acquired an interest
therein during the applicable Distribution Compliance Period pursuant to another
exemption from registration under the Securities Act or who will take delivery
of a beneficial ownership interest in a Rule 144A Global Note, all as
contemplated by Section 2.06(b)(iii) hereof), and (ii) an Authentication Order
from the Issuers, beneficial interests in the applicable Regulation S Temporary
Global Note shall be exchanged for beneficial interests in the applicable
Regulation S Global Note pursuant to the Applicable Procedures. Upon any
exchange of a portion of the applicable Regulation S Temporary Global Note for a
comparable portion of the applicable Regulation S Global Note, the Custodian
shall endorse on the schedules affixed to each such Regulation S Temporary
Global Note (or on continuations of such schedules affixed to each such
Regulation S Temporary Global Note and made parts thereof) appropriate notations
evidencing the date of exchange and (A) with respect to the applicable
Regulation S Temporary Global Note, a decrease in the principal amount thereof
equal to the principal amount covered by the applicable certification and (B)
with respect to the applicable Regulation S Global Note, an increase in the
principal amount thereof equal to the principal amount of the decrease in the
applicable Regulation S Temporary Global Note pursuant to

                                       10
<PAGE>

clause (A) above. The Regulation S Temporary Global Note and the Regulation S
Global Note shall be deposited with the Custodian, in each case duly executed by
the Issuers, endorsed by the Guarantor and authenticated by the New Indenture
Trustee as hereinafter provided; provided that upon such deposit, all such New
Notes shall be credited to or through accounts maintained by DTC by or on behalf
of Euroclear or Clearstream. Each Regulation S Temporary Global Note and each
Regulation S Global Note, as applicable, may be represented by more than one
certificate, if so required by the Depositary's rules or requirements, as
applicable, regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of each Regulation S Temporary
Global Note and each Regulation S Global Note may from time to time be increased
or decreased by adjustments made on the records of the Custodian as hereinafter
provided.

                  (d) The provisions of the "Operating Procedures of the
Euroclear System" and the "Terms and Conditions Governing Use of Euroclear" and
the "General Terms and Conditions of Clearstream Banking" and the "Customer
Handbook" of Clearstream, in each case, as in effect from time to time, shall be
applicable to transfers of beneficial interests in the Regulation S Global Note
and the Regulation S Temporary Global Note that are held by Participants
through, or directly by, Euroclear or Clearstream.

                  (e) The Issuers, in issuing the New Notes, may use "CUSIP,"
"CINS" and "ISIN" numbers, and, if so, the New Indenture Trustee will indicate
the CUSIP, CINS and ISIN numbers of the New Notes in notices of redemption and
related materials as a convenience to New Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the New Notes or as contained in any notice of redemption
and related materials.

                  SECTION 2.02. Authorized Amount; Interest Rate; Maturity Date;
Denominations.

                  (a) The aggregate principal amount of New Notes which may be
issued and Outstanding at any one time under this New Indenture may not exceed
$950,000,000 (excluding New Notes issued upon registration of transfer of, or in
exchange for, or in lieu of, other New Notes pursuant to Section 2.06 or Section
2.07).

                  (b) The New Notes shall bear interest at the Note Rate.
Interest shall accrue on the unpaid principal amount of the New Notes from the
last interest payment date on which interest was paid on the Notes surrendered
in exchange therefor or, if no such interest has been paid on such Notes, from
the date of original issuance of such Notes, and accrued and unpaid interest
shall be payable (i) semi-annually in arrears on each Semi-Annual Payment Date
and (ii) on each other Note Payment Date. To the extent permitted by Applicable
Law, any payments due and not punctually paid shall bear interest until paid at
the Note Rate plus the Default Interest Rate.

                  (c) The maturity date for the New Notes will be October 31,
2004 (the "Maturity Date").

                  (d) The New Notes shall be issuable in minimum denominations
of $100,000 and integral multiples of $1,000 in excess thereof.

                  (e) The New Notes shall be redeemable as provided in Section
2.06(f)(x), Article XIV and Article XV.

                  SECTION 2.03. Execution, Authentication, Delivery and Dating.

                  (a) The New Notes shall be executed on behalf of the Issuers
by an Authorized Officer of each of Investor and the Co-Issuer. The signatures
of such Authorized Officers on the New Notes may be manual or facsimile
(including in counterparts). Each execution of a New Note by the Issuers shall
be

                                       11
<PAGE>

accompanied by the execution of an El Paso Guarantee endorsed thereon as
hereinafter provided in Section 3.05.

                  (b) New Notes bearing the manual or facsimile signatures of
individuals who were at any time the Authorized Officers of the Issuers shall
bind such Persons, notwithstanding the fact that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such New Notes or did not hold such offices at the date of issuance of such New
Notes. With the delivery of this New Indenture, the Issuers are furnishing, and
from time to time thereafter may furnish, an Officer's Certificate identifying
and certifying the incumbency and specimen signatures of the Authorized
Officers. Until the New Indenture Trustee receives a subsequent Officer's
Certificate, the New Indenture Trustee shall be entitled to rely on the last
such Officer's Certificate delivered to it for purposes of determining the
Authorized Officers. Typographical and other minor errors or defects in any
signature shall not affect the validity or enforceability of any New Note which
has been duly authenticated and delivered by the New Indenture Trustee.

                  (c) At any time and from time to time after the execution and
delivery of this New Indenture, the Issuers may deliver the New Notes executed
by the Issuers and endorsed by the Guarantor to the New Indenture Trustee for
authentication, and the New Indenture Trustee, upon receiving an Authentication
Order, shall authenticate and deliver such New Notes as provided in this New
Indenture and not otherwise.

                  The New Indenture Trustee may appoint an authenticating agent
acceptable to the Issuers to authenticate the New Notes. Unless limited by the
terms of such appointment, an authenticating agent may authenticate New Notes
whenever the New Indenture Trustee may do so. Each reference in this New
Indenture to authentication by the New Indenture Trustee includes authentication
by such agent. An authenticating agent shall have the same rights as the
Registrar and the Paying Agent to deal with New Holders or any Affiliate of the
Issuers.

                  (d) Each New Note authenticated and delivered by the New
Indenture Trustee upon an Authentication Order on the Effective Date shall be
dated as of the Effective Date. All other New Notes that are authenticated after
the Effective Date for any other purpose under this New Indenture shall be dated
the date of their authentication. The New Notes issued as of the Effective Date
and any other New Notes subsequently issued under this New Indenture shall be
treated as a single class for all purposes under this New Indenture, including,
without limitation, payments, waivers, amendments, redemptions and offers to
purchase.

                  (e) New Notes issued upon transfer, exchange or replacement of
other New Notes shall be issued in authorized denominations reflecting the
original aggregate principal amount of the New Notes so transferred, exchanged
or replaced.

                  (f) No New Note shall be entitled to any benefit under this
New Indenture or be valid or obligatory for any purpose, unless there appears on
such New Note a certificate of authentication (the "Certificate of
Authentication") substantially in the form provided for herein, executed by the
New Indenture Trustee by the manual signature of one of its Authorized Officers,
and such certificate upon any New Note shall be conclusive evidence, and the
only evidence, that such New Note has been duly authenticated and delivered
hereunder.

                  SECTION 2.04. Registrar and Paying Agent; Registration.

                  (a) The Issuers shall cause to be kept at the Corporate Trust
Office one or more books (the "Note Register") for the registration of the New
Notes and the registration of transfer or exchange of any of the New Notes. The
Note Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. At all reasonable times,
the Note Register shall be

                                       12
<PAGE>

open to inspection by the New Indenture Trustee. The New Indenture Trustee is
hereby initially appointed as security registrar (the "Registrar") for the
purpose of registering New Notes and transfers or exchanges of New Notes as
hereinafter provided.

                  (b) The Issuers shall maintain an office or agency with a
Person in the Borough of Manhattan in The City of New York where New Notes may
be presented for payment. The Issuers hereby initially appoint The Bank of New
York as Paying Agent with respect to the New Notes. The Issuers shall give
prompt written notice to the New Indenture Trustee, and the New Indenture
Trustee shall notify the Rating Agencies and the New Noteholders, of the
appointment or termination of any Paying Agent or agent for notices and of the
location and any change in the location of any such office or agency.

                  (c) The Issuers shall require each Paying Agent other than The
Bank of New York to agree in writing, and The Bank of New York, in its capacity
as the initial Paying Agent, hereby agrees, that such Paying Agent will hold in
trust for the benefit of New Holders and the New Indenture Trustee all money
held by such Paying Agent for the payment of principal, premium, if any, or
interest on the New Notes and will notify the New Indenture Trustee in writing
of any default by the Issuers in making any such payment. While any such default
continues, the New Indenture Trustee may require each Paying Agent to pay all
money held by it to the New Indenture Trustee. The Issuers, at any time, may
require each Paying Agent to pay all money held by it to the New Indenture
Trustee. Upon payment over to the New Indenture Trustee, the Paying Agent (if
other than the Issuers) shall have no further liability for the money. If the
Issuers act as Paying Agents, they shall segregate and hold in a separate trust
fund for the benefit of the New Holders all money held by them as Paying Agents.
Upon any bankruptcy or reorganization proceedings relating to the Issuers, if
the Issuers are then acting as Paying Agents, the New Indenture Trustee shall
thereafter serve as Paying Agent for the New Notes, and the Issuers shall
immediately pay or cause to be paid to the New Indenture Trustee all money held
by them in their respective capacities as Paying Agents.

                  SECTION 2.05. Payments of Principal and Interest; Rights
Preserved.

                  (a) Notwithstanding any provision of this New Indenture or the
New Notes to the contrary other than Sections 14.02(f), 15.02(e) and 15.05(f),
payments of all amounts which become due and payable in respect of any New Note
other than payment in full shall be made by the Paying Agent directly to the New
Holder of such New Note, without surrender or presentation thereof to the Paying
Agent.

                  (b) The Issuers hereby covenant with the Paying Agent to pay
or cause to be paid to the Paying Agent, prior to 1:00 p.m., New York City time,
on each Note Payment Date, all amounts from time to time due and payable by them
hereunder and under the New Notes to any New Noteholder as herein and therein
provided (including the manner of payment thereof).

                  (c) The unpaid principal balance of each New Note shall be
payable on the Maturity Date thereof, unless the principal of such New Note
becomes due and payable at an earlier date by declaration of acceleration, call
for redemption or otherwise. Except as provided in Section 14.03 or Section
15.06, any repayment of principal shall be applied ratably to repay the
Outstanding New Notes. The final installment of principal on any New Note,
whether at maturity or upon redemption, will be payable only upon surrender of
such New Note at the Corporate Trust Office or at the specified offices of any
Paying Agent and will be made to the Person surrendering such New Note.

                  If the due date for payment of the final installment of
principal in respect of any New Note is not a Business Day at the place in which
it is presented for payment, the New Noteholder thereof will not be entitled to
payment of the amount due until the next succeeding Business Day at such place
and will not be entitled to any further interest or other payment in respect of
any such delay.

                                       13
<PAGE>

                  (d) Interest on any New Note which is payable and is
punctually paid or duly provided for by the Issuers on any Note Payment Date
shall be paid to the Person in whose name that New Note is registered at the
close of business on the Record Date for such interest payment.

                  (e) All reductions in the principal amount of a New Note (or
one or more predecessor New Notes) effected by payments of principal made on any
Optional Redemption Date or Special Redemption Date, as applicable, shall be
binding upon all future New Holders of such New Notes and of any New Note issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof, whether or not such payment is noted on such New Note.

                  (f) (i) Notwithstanding any other term of this New Indenture,
the New Notes, any other Transaction Document or otherwise, the obligations of
the Issuers under the New Notes and this New Indenture are senior unsecured
limited recourse obligations of the Issuers, payable solely from the following
(the "Recourse for the Notes"):

                  (A) all of the rights of Investor, excluding Excepted Rights,
         under the Participation Agreement, the Collateral Agreement, the Topaz
         LLC Agreement, the Diamond LLC Agreement and the other Transaction
         Documents (other than the Note Purchase Agreement, the Dealer Manager
         Agreement, the Indenture, this New Indenture, the Notes, the New Notes,
         the Investor Shares, the Remarketing Agreement and the Share Trust
         Agreement) to which it is a party;

                  (B) all of the rights of Investor as holder of the Topaz
         Minority Member Interest and the Diamond Class A Member Interest;

                  (C) all of the rights of Investor in the Excess Securities
         Proceeds and the El Paso Debt Security Notes and/or other Financial
         Investments in which the Excess Securities Proceeds are invested
         (subject to release of such security interest pursuant to Section 3.04
         of the Indenture, if necessary, to permit Investor to comply with its
         obligations to make additional capital contributions to Diamond in
         accordance with Section 3.3(b) of the Diamond LLC Agreement);

                  (D) the Overfund Amount and the El Paso Overfund Notes and any
         other notes or instruments evidencing Financial Investments in which
         the Overfund Amount is invested;

                  (E) each of the Accounts and the New Notes Account, all
         amounts credited to the Accounts and the New Notes Account pursuant to
         the applicable provisions of the Indenture and this New Indenture and
         all investments of such amounts, pursuant to the applicable provisions
         of the Indenture and this New Indenture, including all securities,
         financial assets (as defined in Section 8-102(a)(9) of the New York
         UCC) and securities entitlements (within the meaning of Section
         8-102(a)(17) of the New York UCC) carried in or credited to the
         Accounts and the New Notes Account; and

                  (F) all proceeds of the conversion, voluntary or involuntary,
         of any of the foregoing into cash, instruments, securities or other
         property, including without limitation all amounts from time to time
         held in or credited to the Accounts and the New Notes Account, whether
         in the form of cash or invested in instruments, securities or other
         property, including all property hereafter required to be subject to
         the Lien of the Indenture by any instrument supplemental thereto.

Following realization of the Recourse for the Notes and application of the
proceeds thereof in accordance with the terms of the Indenture and this New
Indenture, none of the New Noteholders or the New Indenture Trustee shall be
entitled to take any further action against the Issuers to recover any sums due
but remaining unpaid hereunder or thereunder, all claims in respect of which
shall be extinguished. In particular, neither the New Indenture Trustee nor any
New Noteholder shall be entitled to petition or take any other action for the
winding up or bankruptcy of either Investor or the Co-Issuer or shall have any

                                       14
<PAGE>

claim in respect of any assets of the Issuers other than the Recourse for the
Notes. No recourse shall be had for the payment of any amount owing in respect
of the New Notes against any trustee, officer, director, employee, shareholder
or incorporator of the Issuers, the New Holders of the New Notes, the New
Indenture Trustee, the Holders of the Notes, the Indenture Trustee, the Dealer
Manager, their respective Affiliates or any of their successors or assigns for
any amounts payable under the New Notes or this New Indenture. It is understood
that the foregoing provisions of this paragraph (f) shall not (i) prevent
recourse to the Recourse for the Notes for the sums due or to become due under
any security, instrument or agreement which is part of the Recourse for the
Notes, (ii) except as specifically provided therein, constitute a waiver,
release or discharge of any indebtedness or obligation evidenced by the New
Notes or guaranteed by this New Indenture or (iii) prevent any action to recover
any sums due but remaining unpaid hereunder or under the New Notes from the
Guarantor in respect of its payment obligations under the El Paso Guarantee. It
is further understood that the foregoing provisions of this paragraph (f) shall
not limit the right of any Person to name the Issuers as party defendants in any
Proceeding or in the exercise of any other remedy under the New Notes or this
New Indenture, so long as no judgment in the nature of a deficiency judgment or
seeking personal liability shall be asked for or (if obtained) enforced against
any such Person.

                  (ii) Notwithstanding the foregoing clause (i), upon (A) the
occurrence of an Event of Default and (B) the acceleration of the New Notes as a
result thereof, the New Indenture Trustee may not take action against the
Recourse for the Notes until the expiration of 120 days following the
acceleration of the New Notes; provided that the New Indenture Trustee may take
action against the Recourse for the Notes only after a judgment has been
rendered against the Issuers in connection with an enforcement proceeding
brought to remedy a failure by the Issuers to perform their obligations under
this New Indenture.

                  (iii) For the avoidance of doubt, in pursuing any remedy
against the Recourse for the Notes in connection with an enforcement proceeding
brought to remedy a failure by the Issuers to perform their obligations under
this New Indenture, the New Indenture Trustee may not cause the sale of the
Diamond Class A Member Interest. In addition, each of the New Indenture Trustee
and, by its acceptance of a New Note, each New Noteholder, acknowledges and
agrees that any sale of the Topaz Minority Member Interest, the Diamond Holdings
Interest, the Amethyst Interest, the Aquamarine Interest, the Peridot Interest,
the Pledged Citrine Interest, the Garnet Interest or any interest in or asset of
any other Diamond Project Company or Garnet Project Company made by the New
Indenture Trustee within 300 days following the acceleration of the New Notes
may be made only to the extent the sales price therefor, in the aggregate with
the sales proceeds of any of the foregoing assets, is at least equal to an
amount sufficient to repay the Outstanding Notes and the New Notes in full and
pay the Capital Price to the Class A Shareholder; provided that to the extent
the sales price therefor, in the aggregate with the sales proceeds of any of the
foregoing assets, is at least equal to an amount sufficient to repay the
Outstanding Notes in full, the Class A Shareholder shall have the right to waive
the limitation set forth in this Section 2.05(f)(iii) by written notice to the
New Indenture Trustee.

                  (iv) [Reserved].

                  (v) Notwithstanding any other provision of this New Indenture
or any action by the New Indenture Trustee against the rights of Investor under
the Topaz LLC Agreement or the Diamond LLC Agreement, the El Paso Overfund Notes
purchased with the Overfund Amount or the Financial Investments purchased with
the proceeds thereof, each of the New Indenture Trustee and, by its acceptance
of a New Note, each New Noteholder, acknowledges and agrees that the Class A
Shareholder will be entitled to receive payments of accrued and unpaid
Shareholder Yield and accrued and unpaid Default Yield pursuant to Section
5.05(b) of the Indenture from the proceeds of the El Paso Overfund Notes or the
proceeds of the Financial Investments purchased with the proceeds of the El Paso
Overfund Loans if the El Paso Overfund Notes are repaid by El Paso pursuant to
their terms and are reinvested in Financial Investments, until such time as both
(x) the Topaz Minority Member Interest, the Emerald

                                       15
<PAGE>

Loan, the Pledged Citrine Interest, the Garnet Preferred Member Interest or the
Amethyst Interest is sold and (y) the Diamond Holdings Interest or the
Aquamarine Interest is sold.

                  (g) Notwithstanding any other term of this New Indenture, the
New Notes or any other Transaction Document, or otherwise, neither Investor nor
the Co-Issuer shall have any liability whatsoever to each other under this New
Indenture, the New Notes or any other Transaction Document, or otherwise, and,
without prejudice to the generality of the foregoing, neither Investor nor the
Co-Issuer shall be entitled to take any action to enforce, or bring any
Proceeding in respect of, this New Indenture, the New Notes or any other
Transaction Document, or otherwise, against each other. In particular, neither
Investor nor the Co-Issuer shall be entitled to petition or take any other steps
for the winding up or bankruptcy of the other or shall have any claim in respect
of any assets of the other (other than a claim by Investor as a shareholder of
the Co-Issuer).

                  (h) Subject to the foregoing provisions of this Section 2.05,
each New Note delivered under this New Indenture upon registration of transfer
of or in exchange for or in lieu of any other New Note shall carry the rights of
unpaid interest and principal that were carried by such other New Note.

                  (i) Notwithstanding any of the foregoing provisions with
respect to payments of principal of and interest on the New Notes, if the New
Notes have become or been declared due and payable or subject to redemption
following an Event of Default or a Specified Equity Event and such acceleration
of maturity or redemption and its consequences have not been rescinded and
annulled, then payments of principal of and interest on such New Notes shall be
made in accordance with Section 5.05.

                  SECTION 2.06. Transfer and Exchange of New Notes.

                  (a) Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Interests in the
Global Notes will be exchanged by the Issuers for Definitive Notes if (i) the
Issuers deliver to the New Indenture Trustee notice from the Depositary that it
is unwilling or unable to continue to act as Depositary or that it is no longer
a clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Issuers within 120 days after the
date of such notice from the Depositary or (ii) following receipt by the
Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under
the Securities Act in accordance with Section 2.01(c), the Issuers in their sole
discretion determine that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and deliver a written notice to such effect to
the New Indenture Trustee; provided that in no event shall any Regulation S
Temporary Global Note be exchanged by the Issuers for Definitive Notes prior to
(A) the expiration of the Distribution Compliance Period and (B) the receipt by
the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B)
under the Securities Act. Upon the occurrence of either of the preceding events
in clause (i) or clause (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the New Indenture Trustee. Global Notes
also may be exchanged or replaced, in whole or in part, as provided in Section
2.07. A Global Note may not be exchanged for another New Note other than as
provided in this Section 2.06(a); however, beneficial interests in a Global Note
may be transferred and exchanged as provided in Section 2.06(b).

                  (b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary in accordance with the provisions
of this New Indenture and the Applicable Procedures. Beneficial interests in the
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act and the Investment
Company Act. Transfers of beneficial interests in the Global Notes also shall
require compliance with either subparagraph (i) or (ii) below, as applicable, as
well as one or more of the other following subparagraphs, as applicable:

                                       16
<PAGE>

                           (i) Transfer of Beneficial Interests in the Same
         Global Note. Beneficial interests in any Global Note may be transferred
         to Persons who take delivery thereof in the form of a beneficial
         interest in the same Global Note in accordance with the transfer
         restrictions set forth in the Transfer Restriction Legend. Prior to the
         expiration of the Distribution Compliance Period, transfers of
         beneficial interests in the Regulation S Temporary Global Note may not
         be made to a U.S. Person or for the account or benefit of a U.S. Person
         other than as contemplated by Rule 903(b)(3)(ii)(B) under the
         Securities Act. No written orders or instructions shall be required to
         be delivered to the Registrar to effect the transfers described in this
         Section 2.06(b)(i).

                           (ii) All Other Transfers and Exchanges of Beneficial
         Interests in Global Notes. In connection with all transfers and
         exchanges of beneficial interests in Global Notes that are not
         transfers of beneficial interests in the same Global Note subject to
         Section 2.06(b)(i) above, the transferor of such beneficial interest
         must deliver to the Registrar (1) a written order from a Participant or
         an Indirect Participant given to the Depositary in accordance with the
         Applicable Procedures directing the Depositary to credit or cause to be
         credited a beneficial interest in another Global Note in an amount
         equal to the beneficial interest to be transferred or exchanged and (2)
         instructions given in accordance with the Applicable Procedures
         containing information regarding the Participant account to be credited
         with such increase. Upon satisfaction of all of the requirements for
         transfer or exchange of beneficial interests in Global Notes contained
         in this New Indenture and the New Notes or otherwise applicable under
         the Securities Act, the New Indenture Trustee shall adjust or cause the
         adjustment of the principal amount of the relevant Global Note(s)
         pursuant to Section 2.06(e).

                           (iii) Transfer of Beneficial Interests to Another
         Global Note. A beneficial interest in any Global Note may be
         transferred to a Person who takes delivery thereof in the form of a
         beneficial interest in another Global Note if the transfer complies
         with the requirements of Section 2.06(b)(ii) above and the Registrar
         receives the following:

                                    (A) if the transferee will take delivery in
                  the form of a beneficial interest in a Rule 144A Global Note,
                  then the transferor must deliver a certificate in the form of
                  Exhibit C hereto, including the certifications in item (1)
                  thereof; or

                                    (B) if the transferee will take delivery in
                  the form of a beneficial interest in the Regulation S
                  Temporary Global Note, then the transferor must deliver a
                  certificate in the form of Exhibit C hereto, including the
                  certifications in item (2) thereof; or

                                    (C) if the transferee will take delivery in
                  the form of a beneficial interest in the Regulation S Global
                  Note, then the transferor must deliver a certificate in the
                  form of Exhibit C hereto, including the certifications in item
                  (3) thereof.

                  (c) Transfer and Exchange of Definitive Notes for Definitive
Notes.

                           (i) Following the issuance of Definitive Notes in
       exchange for the Global Notes pursuant to Section 2.06(a), upon request
       by a New Holder of Definitive Notes and such New Holder's compliance with
       the provisions of this Section 2.06(c), the Registrar shall register the
       transfer or exchange of Definitive Notes. Prior to such registration of
       transfer or exchange, the requesting New Holder shall present or
       surrender to the Registrar the Definitive Notes duly endorsed or
       accompanied by a written instruction of transfer in form satisfactory to
       the Registrar duly executed by such New Holder or by his attorney, duly
       authorized in writing. In addition, the requesting New Holder shall
       provide any additional certifications, documents and information, as
       applicable, required pursuant to the following provisions of this Section
       2.06(c).

                                       17
<PAGE>

                           (ii) Any Definitive Note may be transferred to and
         registered in the name of Persons who take delivery thereof in the form
         of a Definitive Note if the Registrar receives the following:

                                    (A) if the transfer will be made pursuant to
                  Rule 144A under the Securities Act, then the transferor must
                  deliver a certificate in the form of Exhibit C hereto,
                  including the certifications in item (1) thereof;

                                    (B) if the transfer will be made pursuant to
                  Rule 903 or Rule 904 under the Securities Act, then the
                  transferor must deliver a certificate in the form of Exhibit C
                  hereto, including the certifications in item (2) thereof; or

                                    (C) if the transfer will be made pursuant to
                  any other exemption from the registration requirements of the
                  Securities Act, then the transferor must deliver a certificate
                  in the form of Exhibit C hereto, including the certifications,
                  certificates and Opinion of Counsel required by item (3)
                  thereof, if applicable.

                  (d) Legends. The following legends shall appear on the face of
all New Notes issued under this New Indenture unless specifically stated
otherwise in the applicable provisions of this New Indenture.

                           (i) Transfer Restriction Legend. Each New Note (and
         all New Notes issued in exchange therefor or substitution thereof)
         shall bear the legend (the "Transfer Restriction Legend") in
         substantially the following form:

         "THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
         TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
         ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND NEITHER GEMSTONE
         INVESTOR LIMITED NOR GEMSTONE INVESTOR, INC. HAS BEEN REGISTERED UNDER
         THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY
         ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
         TRANSFERRED (A) IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
         EXEMPTION THEREFROM AND (B) EXCEPT IN COMPLIANCE WITH THE INVESTMENT
         COMPANY ACT. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT
         THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
         PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
         THEREUNDER.

         BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE NEW
         HOLDER: (1) REPRESENTS THAT (A) WITH RESPECT TO THE RULE 144A NEW
         NOTES, IT IS (I) A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
         144A UNDER THE SECURITIES ACT) (A "QIB") AND A "QUALIFIED PURCHASER"
         (AS DEFINED IN SECTION 2(a) OF THE INVESTMENT COMPANY ACT) (A "QP") AND
         (II) NOT (A) A DEALER DESCRIBED IN RULE 144A(a)(1)(ii) THAT OWNS AND
         INVESTS ON A DISCRETIONARY BASIS LESS THAN $25,000,000 IN SECURITIES OF
         ISSUERS THAT ARE NOT AFFILIATED WITH THE DEALER, (B) A PARTNERSHIP,
         COMMON TRUST FUND, SPECIAL TRUST, PENSION FUND, RETIREMENT PLAN OR
         OTHER ENTITY IN WHICH THE PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR
         PARTICIPANTS, AS THE CASE MAY BE, MAY DESIGNATE THE PARTICULAR
         INVESTMENTS TO BE MADE OR THE ALLOCATION THEREOF, (C) AN INVESTMENT
         COMPANY EXCEPTED FROM THE INVESTMENT COMPANY ACT PURSUANT TO SECTION
         3(c)(1) OR SECTION 3(c)(7) THEREOF (OR A FOREIGN INVESTMENT COMPANY
         UNDER SECTION 7(d) THEREOF RELYING ON SECTION 3(c)(1) OR

                                       18
<PAGE>

         SECTION 3(c)(7) THEREOF WITH RESPECT TO ITS U.S. HOLDERS) AND FORMED ON
         OR PRIOR TO APRIL 30, 1996 THAT HAS NOT RECEIVED THE CONSENT OF EACH OF
         ITS BENEFICIAL OWNERS WITH RESPECT TO ITS TREATMENT AS A QP IN THE
         MANNER REQUIRED BY SECTION 2(a)(51)(C) OF THE INVESTMENT COMPANY ACT
         AND THE RULES THEREUNDER OR (D) AN ENTITY THAT WILL HAVE INVESTED MORE
         THAN FORTY PERCENT (40%) OF ITS ASSETS IN THE SECURITIES OF THE ISSUERS
         SUBSEQUENT TO THE PURCHASE OF THE NEW NOTES EVIDENCED HEREBY, (B) WITH
         RESPECT TO THE REGULATION S NEW NOTES, IT IS NOT A "U.S. PERSON" (AS
         DEFINED IN REGULATION S UNDER THE SECURITIES ACT) AND HAS ACQUIRED THIS
         NEW NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
         UNDER THE SECURITIES ACT OR (C) IN THE CASE OF REGULATION S NEW NOTES
         ONLY, SUCH PERSON IS A "U.S. PERSON" WHICH HAS ACQUIRED THIS NEW NOTE
         PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT IN
         A SECONDARY MARKET TRANSACTION NOT INVOLVING THE PARTICIPATION OF
         GEMSTONE INVESTOR LIMITED OR ITS AGENT; (2) REPRESENTS THAT IT WAS NOT
         FORMED FOR THE PURPOSE OF INVESTING IN THE ISSUERS; (3) AGREES THAT IT
         WILL PROVIDE NOTICE OF APPLICABLE TRANSFER RESTRICTIONS TO ANY
         SUBSEQUENT TRANSFEREE; (4) AGREES THAT EACH ACCOUNT FOR WHICH IT IS
         PURCHASING WILL HOLD AND TRANSFER AT LEAST THE MINIMUM DENOMINATIONS OF
         $100,000 AND $1,000 IN EXCESS THEREOF OF NEW NOTES EVIDENCED HEREBY;
         (5) REPRESENTS THAT IT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
         ACCOUNTS OF ONE OR MORE OTHER PERSONS EACH OF WHOM MEETS ALL OF THE
         REQUIREMENTS OF CLAUSES (1) THROUGH (4); AND (6) AGREES THAT IT WILL
         NOT OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT TO A PERSON
         THAT MEETS ALL OF THE REQUIREMENTS OF CLAUSES (1) THROUGH (5) AND THAT
         AGREES NOT TO SUBSEQUENTLY TRANSFER THIS NEW NOTE OR ANY INTEREST
         HEREIN EXCEPT IN ACCORDANCE WITH THIS CLAUSE (6)."

                           (ii) Global Note Legend. Each Global Note shall bear
         a legend (the "Global Note Legend") in substantially the following
         form:

         "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
         OF THE DEPOSITORY TRUST COMPANY TO THE ISSUERS OR THEIR AGENT FOR
         REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE
         ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
         IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
         COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
         ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
         DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
         VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
         OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
         BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
         SUCH SUCCESSOR'S NOMINEE, AND TRANSFERS OF BENEFICIAL INTERESTS IN THIS
         GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
         RESTRICTIONS SET FORTH IN SECTION 2.06 OF THE NEW INDENTURE."

                                       19
<PAGE>

                           (iii) Regulation S Temporary Global Note Legend. The
         Regulation S Temporary Global Note shall bear a legend (the "Regulation
         S Temporary Global Note Legend") in substantially the following form:

         "THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE AND
         THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR PERMANENT OR
         CERTIFICATED NEW NOTES ARE AS SPECIFIED IN THE NEW INDENTURE (AS
         DEFINED HEREIN). NEITHER THE NEW HOLDER NOR THE BENEFICIAL OWNERS OF
         THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE
         PAYMENT OF INTEREST HEREON."

                           (iv) QP Legend. Each New Note shall bear a legend
         (the "QP Legend") in substantially the following form:

         "EACH NEW HOLDER OF THIS SECURITY OR ANY INTEREST HEREIN SHALL BE
         DEEMED TO HAVE REPRESENTED WITH RESPECT TO ITSELF AND EACH ACCOUNT FOR
         WHICH IT IS PURCHASING THAT IT AND EACH ACCOUNT SATISFY THE
         REQUIREMENTS SET FORTH IN THE LEGENDS ON THE FACE OF THIS SECURITY, AND
         ANY RESALE OR OTHER TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN
         MAY ONLY BE MADE TO A PERSON SATISFYING THE REQUIREMENTS HEREIN AND IN
         THE NEW INDENTURE. IF AT ANY TIME THE ISSUERS DETERMINE THAT A NEW
         HOLDER OF THIS SECURITY OR ANY INTEREST HEREIN WAS IN BREACH, AT THE
         TIME GIVEN, OF ANY OF THE REPRESENTATIONS OR AGREEMENTS SET FORTH
         HEREIN OR IN THE NEW INDENTURE, THE ISSUERS MAY CONSIDER THE
         ACQUISITION OF THIS SECURITY OR SUCH INTEREST HEREIN NULL AND VOID, AND
         THE ISSUERS MAY REQUIRE THAT THE NEW NOTES BE TRANSFERRED TO A PERSON
         THAT MEETS THE REQUIREMENTS THEREOF OR REDEEMED AT PAR BY THE ISSUERS."

                  (e) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased
or canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the New Indenture Trustee in accordance with Section
2.09. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note or
Definitive Notes, the principal amount of New Notes represented by such Global
Note shall be reduced accordingly, and an endorsement shall be made on such
Global Note by the New Indenture Trustee or by the Depositary at the direction
of the New Indenture Trustee to reflect such reduction; and, if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly, and an endorsement shall
be made on such Global Note by the New Indenture Trustee or by the Depositary at
the direction of the New Indenture Trustee to reflect such increase.

                  (f) General Provisions Relating to Transfers and Exchanges.

                           (i) To permit registrations of transfers and
         exchanges, the Issuers shall execute, the Guarantor shall endorse and
         the New Indenture Trustee shall authenticate Global Notes and
         Definitive Notes upon the Issuers' order or at the Registrar's request.

                           (ii) No service charge shall be made to an owner of a
         beneficial interest in a Global Note or to a New Holder of a Definitive
         Note for any registration of transfer or exchange, but the Issuers may
         require payment of a sum sufficient to cover any transfer tax or
         similar governmental charge payable in connection therewith.

                                       20
<PAGE>

                           (iii) The Registrar shall not be required to register
         the transfer or exchange of any New Note selected for redemption in
         whole or in part except the unredeemed portion of any New Note being
         redeemed in part.

                           (iv) All Global Notes and Definitive Notes issued
         upon any registration of transfer or exchange of Global Notes or
         Definitive Notes shall be the valid obligations of the Issuers and the
         Guarantor, evidencing the same debt and entitled to the same benefits
         under this New Indenture as the Global Notes or Definitive Notes
         surrendered upon such registration of transfer or exchange.

                           (v) The Issuers shall not be required (A) to issue,
         to register the transfer of or to exchange any New Notes during a
         period beginning at the opening of business 15 days before the day of
         any selection of New Notes for redemption under Section 14.03 or
         Section 15.06 and ending at the close of business on the day of
         selection, (B) to register the transfer of or to exchange any New Note
         so selected for redemption in whole or in part except the unredeemed
         portion of any New Note being redeemed in part or (C) to register the
         transfer of or to exchange a New Note between a Record Date and the
         next succeeding Note Payment Date.

                           (vi) Prior to due presentment for the registration of
         a transfer of any New Note, the New Indenture Trustee, the Paying
         Agent, the Registrar, the Guarantor and the Issuers may deem and treat
         the Person in whose name any New Note is registered as the absolute
         owner of such New Note for the purpose of receiving payment of
         principal of and interest on such New Notes and for all other purposes,
         and none of the New Indenture Trustee, the Paying Agent, the Registrar,
         the Guarantor or the Issuers shall be affected by notice to the
         contrary.

                           (vii) The New Indenture Trustee shall authenticate
         Global Notes and Definitive Notes in accordance with the provisions of
         Section 2.03.

                           (viii)All certifications, certificates and Opinions
         of Counsel required to be submitted to the Registrar pursuant to this
         Section 2.06 to effect a registration of transfer or exchange may be
         submitted by facsimile.

                           (ix) The Issuers shall not be required to honor any
         transfer or exchange of any New Notes to transferees who are U.S.
         Persons but not Qualified Purchasers.

                           (x) Investor shall have the right, at its option, to
         (i) require any owner of a beneficial interest in a Rule 144A Global
         Note who is not a Qualified Purchaser to sell such beneficial interest
         to a Qualified Purchaser, (ii) require any holder of a Definitive Note
         who (a) either (x) is a U.S. Person or (y) has not purchased such
         Definitive Note in an offshore transaction and (b) is not a Qualified
         Purchaser to sell such Definitive Note to a Qualified Purchaser or a
         non-U.S. Person in an offshore transaction, (iii) redeem the beneficial
         interest of a holder of a Rule 144A Global Note who is not a Qualified
         Purchaser at a price equal to the sum of the accrued and unpaid
         interest to the date of redemption and 100% of the Outstanding
         principal amount of such New Note and (iv) redeem the Definitive Note
         of a holder who (a) either (x) is a U.S. Person or (y) has not
         purchased such Definitive Note in an offshore transaction and (b) is
         not a Qualified Purchaser at a price equal to the sum of the accrued
         and unpaid interest to the date of redemption and 100% of the
         Outstanding principal amount of such New Note.

                  SECTION 2.07. Replacement of Lost, Mutilated or Stolen New
Notes. In case any New Note shall become mutilated or defaced or be lost,
destroyed or stolen, then on the terms herein set forth, and not otherwise, the
Issuers shall execute, the Guarantor shall endorse and the New Indenture Trustee
shall authenticate and deliver to the registered New Holder a new New Note of
like tenor and date and bearing such identifying number or designation as the
New Indenture Trustee may determine, in

                                       21
<PAGE>

exchange and substitution for, and upon cancellation of, the mutilated or
defaced New Note or in lieu of and in substitution for the same if lost,
destroyed or stolen. The applicant for a new New Note pursuant to this Section
2.07 shall, in the case of any mutilated or defaced New Note, surrender such New
Note to the New Indenture Trustee and furnish to the New Indenture Trustee, in
the case of any lost, destroyed or stolen New Note, evidence satisfactory to the
New Indenture Trustee of such loss, destruction or theft and, in each case,
evidence satisfactory to the New Indenture Trustee of the ownership and
authenticity of such New Note and shall pay all expenses and charges of such
substitution and furnish such security or indemnity as may be reasonably
required by the New Indenture Trustee, the Issuers and the Guarantor to
indemnify and defend and save them harmless. Any defaced or mutilated New Note
shall be destroyed by the New Indenture Trustee, or retained in accordance with
its standard retention policy, upon delivery by it of a new New Note to the New
Holder.

                  SECTION 2.08. Taxes.

                  (a) Any and all payments by or on behalf of the Issuers to or
for the account of any New Noteholder or the New Indenture Trustee hereunder,
under any New Note or under any other Transaction Document shall be made without
set-off or counterclaim and, except as otherwise required by law, free and clear
of and without deduction for any and all Taxes. If any Taxes shall be required
by law to be deducted from or in respect of any sum payable hereunder, under any
New Note or under any other Transaction Document to any New Noteholder or the
New Indenture Trustee, the New Indenture Trustee shall make such deduction and
shall pay such Taxes directly to the relevant taxing authority or other
authority in accordance with applicable law. Within 30 days after the payment of
any Taxes by the New Indenture Trustee, the New Indenture Trustee shall promptly
deliver to the relevant New Noteholder or New Noteholders such receipts together
with the original or a certified copy of any receipts evidencing payment of any
Taxes paid directly by the New Indenture Trustee. No additional amounts,
including any indemnification or gross-up, shall be payable by the Issuers or
the Guarantor to any New Noteholder in respect of Taxes required to be deducted
or withheld.

                  (b) The New Indenture Trustee shall collect such duly
completed forms or other certifications from each New Noteholder as shall permit
such New Noteholder to receive payments under the New Notes without withholding
or deduction on account of Taxes and shall promptly forward copies of such forms
to El Paso. In addition, the New Indenture Trustee shall, to the extent it is
legally able to do so, execute and file such forms and take such other actions
as are (i) reasonably necessary to permit payments under the New Notes to be
made without withholding or deduction on account of Taxes and (ii) otherwise
required by applicable tax law in connection with payments under the New Notes,
including, but not limited to, the filing of Forms 1099-INT, 1042-S and 1042 or
such equivalent forms, if necessary.

                  (c) The New Notes have been issued with the intention that
such New Notes will qualify under applicable Federal, state and local income tax
law as indebtedness. Each of Investor and the Co-Issuer and each New Noteholder,
by its acceptance of a New Note, agrees to treat the New Notes as indebtedness
of Investor for purposes of Federal, state and local income or franchise taxes
or for any other tax imposed on or measured by income and agrees that, to the
extent it is required to report any item of income, gain, loss, deduction or
credit relating to the New Notes for United States Federal, state or local
income tax purposes, it shall report such item in a manner consistent with the
characterization intended by this Section 2.08(c) and shall not take any
contrary position on any tax return or report relating to the United States
Federal, state or local income taxes or take any other action which is
inconsistent with such characterization.

                  SECTION 2.09. Cancellation. All New Notes surrendered for
payment, registration of transfer, exchange or redemption or deemed lost or
stolen pursuant to Section 2.07 shall, if surrendered to any Person other than
the New Indenture Trustee, be delivered to the New Indenture Trustee and shall
be promptly canceled by it. All canceled New Notes held by the New Indenture
Trustee shall be destroyed or held by the New Indenture Trustee in accordance
with its standard retention policy.

                                       22
<PAGE>

                                   ARTICLE III

                             GUARANTEE OF NEW NOTES

                  SECTION 3.01. El Paso Guarantee.

                  Subject to the provisions of this Article III, the Guarantor
hereby, fully, unconditionally and irrevocably guarantees to each New Noteholder
and to the New Indenture Trustee on behalf of the New Noteholders the due and
punctual payment of the principal of, and premium, if any, and interest on, each
New Note, when and as the same shall become due and payable, whether at
maturity, by acceleration or otherwise, and the due and punctual payment of the
Default Amount, if any, on the New Notes, all in accordance with the terms of
such New Note and this New Indenture (such obligations being herein collectively
referred to as the "Guaranteed Obligations"). The Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger or bankruptcy of the Issuers, any right to require a proceeding
first against the Issuers, the benefit of protest or notice with respect to any
such New Note or the debt evidenced thereby and all demands whatsoever (except
as specified herein), and covenants that the El Paso Guarantee will not be
discharged as to any such New Note except by payment in full of the principal
thereof and interest (including any accrued and unpaid Default Amount) and
premium (if any) thereon as provided in Section 5.05. In the event of any
declaration of acceleration of the principal of and interest on the New Notes as
provided in Section 9.01, such obligations shall forthwith become due and
payable by the Guarantor for the purpose of this Article III. In addition,
without limiting the foregoing provisions, upon (a) the effectiveness of an
acceleration of the New Notes under Section 9.01 or (b) the occurrence of any
other claim by the New Noteholders or the New Indenture Trustee under the El
Paso Guarantee, the New Indenture Trustee shall immediately make written demand
for payment (which demand shall set forth the amount then due and payable) under
the El Paso Guarantee; provided, that the failure of the New Indenture Trustee
to make such demand for payment will not relieve the Guarantor from its
obligation to make any such payment under the El Paso Guarantee.

                  If the New Indenture Trustee or the New Holder of any New Note
is required by any court or otherwise to return to the Issuers or the Guarantor,
or any custodian, receiver, liquidator, trustee, sequestrator or other similar
official acting in relation to the Issuers or the Guarantor, any amount paid to
the New Indenture Trustee or such New Noteholder in respect of a New Note, the
El Paso Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect. The Guarantor further agrees, to the fullest extent that
it may lawfully do so, that, as between it, on the one hand, and the New
Noteholders and the New Indenture Trustee, on the other hand, the maturity of
the Guaranteed Obligations may be accelerated as provided in Section 9.01 for
the purposes of the El Paso Guarantee, notwithstanding any stay, injunction or
other prohibition extant under any applicable bankruptcy law preventing such
acceleration in respect of the Guaranteed Obligations.

                  The Guarantor hereby agrees that until (x) the payment or
satisfaction in full of the Guaranteed Obligations (whether by payment,
redemption or otherwise) and (y)(i) the Redemption Date (as defined in the
Investor Shareholders Agreement) or (ii) the receipt by the Class A Shareholder
of the Share Purchase Option Price in accordance with Section 7.l of the
Investor Shareholders Agreement, it shall not exercise any right or remedy
against the Issuers by reason of the existence, payment, performance or
enforcement of its obligations under the El Paso Guarantee and this New
Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, any right to
participate in any claim or remedy of the New Noteholders against the Issuers or
any collateral which any such New Noteholder or the New Indenture Trustee on
behalf of such New Noteholder hereafter acquires, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from the Issuers,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to the Guarantor in

                                       23
<PAGE>

violation of the preceding sentence and the principal of, and premium, if any,
and accrued interest (including any accrued and unpaid Default Amount) on, the
New Notes shall not have been paid in full, such amount shall be deemed to have
been paid to the Guarantor for the benefit of, and held in trust for the benefit
of, the New Noteholders, and shall forthwith be paid to the New Indenture
Trustee for the benefit of the New Noteholders to be credited and applied upon
the principal of, and premium, if any, and accrued interest (including any
accrued and unpaid Default Amount) on, the New Notes. The Guarantor acknowledges
that it will receive direct and indirect benefits from the issuance of the New
Notes pursuant to this New Indenture and that the agreements set forth in this
Section 3.01 are knowingly made in contemplation of such benefits.

                  The El Paso Guarantee set forth in this Section 3.01 shall not
be valid or become obligatory for any purpose with respect to a New Note until
such New Note shall have been authenticated by the New Indenture Trustee. Each
New Noteholder, by its acceptance of a New Note, agrees that it will not waive
its remedies with respect to this Article III or the El Paso Guarantee,
including, without limitation, releasing the Guarantor from any of its
obligations under the El Paso Guarantee or reducing the amount of such
Guaranteed Obligations, without the consent of Investor.

                  SECTION 3.02. Obligations Unconditional.

                  Nothing contained in this Article III or elsewhere in this New
Indenture or in the New Notes is intended to or shall impair, as among the
Guarantor and the New Noteholders, the obligations of the Guarantor, which are
absolute and unconditional, upon failure by the Issuers to pay to the New
Noteholders the principal of, and premium, if any, and interest (including any
accrued and unpaid Default Amount) on, the New Notes as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the New Notes and creditors
of the Guarantor, nor shall anything herein or therein prevent the New Holder of
any New Note or the New Indenture Trustee on their behalf from exercising all
remedies otherwise permitted by applicable law upon default under this New
Indenture.

                  Without limiting the foregoing, nothing contained in this
Article III will restrict the right of the New Indenture Trustee or the New
Noteholders from taking any action to declare the El Paso Guarantee to be due
and payable prior to the Maturity Date after an acceleration of the New Notes
pursuant to Section 9.01 or to pursue any rights or remedies hereunder.

                  SECTION 3.03. Limitation of Guarantor's Liability. Each of the
Guarantor and the New Indenture Trustee hereby confirms and, by its acceptance
of a New Note issued hereunder, each New Noteholder acknowledges and agrees that
it is the intention of such Person that the El Paso Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any bankruptcy law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar U.S. Federal or state or other applicable law. To effectuate the
foregoing intention, the New Noteholders and the Guarantor hereby irrevocably
agree that the obligations of the Guarantor under the El Paso Guarantee shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of the Guarantor, result in the obligations of
the Guarantor under the El Paso Guarantee not constituting such fraudulent
transfer or conveyance.

                  SECTION 3.04. Subordination of Subrogation and Other Rights.
The Guarantor hereby agrees that any claim against the Issuers that arises from
the payment, performance or enforcement of the Guarantor's obligations under the
El Paso Guarantee or this New Indenture, including, without limitation, any
right of subrogation, shall be subject and subordinate to the payment or
satisfaction in full of the New Notes (whether by payment, redemption or
otherwise), and the Guarantor shall not institute any proceeding to enforce any
such claim of the Guarantor until (x) the payment or satisfaction in full of the
New Notes (whether by payment, redemption or otherwise) and (y)(i) the
Redemption Date (as

                                       24
<PAGE>

defined in the Investor Shareholders Agreement) or (ii) the receipt by the Class
A Shareholder of the Share Purchase Option Price in accordance with Section 7.l
of the Investor Shareholders Agreement.

                  SECTION 3.05. Execution and Delivery of El Paso Guarantee. To
evidence its El Paso Guarantee set forth in this Article III, the Guarantor
hereby agrees to execute the El Paso Guarantee in substantially the form
included in Exhibits A and B, which shall be endorsed on each New Note ordered
to be authenticated and delivered by the New Indenture Trustee. The Guarantor
hereby agrees that its El Paso Guarantee shall remain in full force and effect
notwithstanding any failure to endorse on each New Note a notation of the El
Paso Guarantee. Any such endorsement bearing the manual or facsimile signature
of any individual who was at any time an Authorized Officer of the Guarantor
shall bind the Guarantor, notwithstanding the fact that such individual has
ceased to hold such office prior to the authentication and delivery of the New
Notes or did not hold such office at the date of issuance of such New Notes.
With the delivery of this New Indenture, the Guarantor is furnishing, and from
time to time thereafter may furnish, an Officer's Certificate identifying and
certifying the incumbency and specimen signatures of the Authorized Officers of
the Guarantor. Until the New Indenture Trustee receives a subsequent Officer's
Certificate of the Guarantor, the New Indenture Trustee shall be entitled to
rely on the last such Officer's Certificate delivered to it for purposes of
determining such Authorized Officers. Typographical and other minor errors or
defects in any signature shall not affect the validity or enforceability of any
El Paso Guarantee endorsed on any New Note which has been duly authenticated and
delivered by the New Indenture Trustee.

                  SECTION 3.06. Notice to New Indenture Trustee. The Guarantor
shall give prompt written notice to the New Indenture Trustee of any fact known
to the Guarantor which prohibits the making of any payment to the New Indenture
Trustee in respect of the El Paso Guarantee pursuant to the provisions of this
Article III other than any agreement in effect on the date hereof.

                  SECTION 3.07. This Article Not to Prevent Events of Default.
The failure by the Guarantor to make a payment on account of principal of, and
premium, if any, or interest (including any accrued and unpaid Default Amount)
on, the New Notes by reason of any provision of this Article will not be
construed as preventing the occurrence of an Event of Default.

                                   ARTICLE IV

                                    ISSUANCE

                  SECTION 4.01. Conditions to Issuance. The issuance by the
Issuers and the authentication by the New Indenture Trustee of the New Notes on
initial issuance shall be subject to the satisfaction of the following
conditions on or prior to the Effective Date:

                  (a) the New Indenture Trustee shall have received fully
executed copies of each of the Transaction Documents to which Investor, the
Co-Issuer and the Guarantor is a party (other than this New Indenture, the New
Notes and the Notes);

                  (b) the New Indenture Trustee shall have received certificates
from the Issuers and the Guarantor in form and substance reasonably satisfactory
to it and counsel for the Dealer Manager to the effect that the representations
and warranties of the Issuers and the Guarantor, as applicable, in the
Transaction Documents shall be true on and as of the Effective Date as if made
on and as of such date (except to the extent (i) specifically limited to an
earlier date, (ii) modified to give effect to the transactions contemplated by
the Transaction Documents or (iii) waived) and that the conditions precedent to
the issuance of the New Notes contained in any other Transaction Document have
been fulfilled (or waived);

                                       25
<PAGE>

                  (c) the New Indenture Trustee shall have received a
certificate of an Authorized Officer of El Paso in form and substance reasonably
satisfactory to it and counsel for the Dealer Manager to the effect that
immediately before and immediately after the issuance of the New Notes on the
Effective Date no Indenture Default or Event of Default shall have occurred and
be continuing;

                  (d) the New Indenture Trustee shall have received Opinions of
Counsel from Jones, Day, Reavis & Pogue, Walkers, special Cayman Islands counsel
for Investor, and Potter Anderson & Corroon LLP, special Delaware counsel for
the Co-Issuer, in form and substance reasonably satisfactory to counsel for the
Dealer Manager;

                  (e) the exchange by the Issuers of the New Notes for Notes (in
accordance with the Exchange Offer) will not violate any Applicable Law;

                  (f) there shall have occurred no invalidation of Section 4(2),
Rule 144A or Regulation S under the Securities Act by any court or any
withdrawal or proposed withdrawal of any rule or regulation under the Securities
Act or the Exchange Act by the SEC or any amendment or proposed amendment
thereof by the SEC which in the judgment of the Dealer Manager would materially
impair the ability of the New Holders of any beneficial interest in a Global
Note to acquire, hold or effect resales of the New Notes as contemplated herein;

                  (g) the New Indenture Trustee shall have received letters from
Moody's rating the New Notes "Baa2" or better and S&P rating the New Notes "BBB"
or better, in form and substance reasonably satisfactory to the New Indenture
Trustee and the Dealer Manager;

                  (h) the New Indenture Trustee shall have received a fully
executed Administrative Services Agreement signed by Investor, the Co-Issuer and
the servicer named therein; and

                  (i) the New Indenture Trustee shall have received from each of
Investor, the Co-Issuer and the Guarantor an Officer's Certificate attaching
Organizational Documents and resolutions, if applicable, relating to the
existence of the Issuers and the Guarantor, the corporate authority, as
applicable, for and the validity of this New Indenture, the New Notes and the
other Transaction Documents and any other matters relevant hereto, all in form
and substance reasonably satisfactory to the New Indenture Trustee and counsel
for the Dealer Manager.

                  SECTION 4.02. Waiver of Conditions to Issuance. If any of the
foregoing conditions shall not be satisfied upon the issuance of the New Notes,
such conditions shall be deemed to have been waived by the New Indenture
Trustee, the Dealer Manager and each New Noteholder by its acceptance of its New
Note.

                                    ARTICLE V

                                   THE ACCOUNT

                  SECTION 5.01. Establishment of New Notes Account.

                  (a) The New Indenture Trustee hereby acknowledges and agrees
that it has established a single, segregated trust account, which shall be
maintained at its Corporate Trust Office and which has been designated as the
"New Notes Account", for the benefit of the New Noteholders and over which the
New Indenture Trustee shall have exclusive control and the sole right of
withdrawal. The Issuers shall not have any rights to withdraw cash or other
property held in the New Notes Account. Payments shall be made from the New
Notes Account only in accordance with the provisions set forth below.

                                       26
<PAGE>

                  (b) The New Indenture Trustee will give notice to the Issuers,
the Guarantor and the New Noteholders of the location of the New Notes Account
and of any change thereof (provided that, subject to Section 11.03, no such
change shall be made without the prior approval of the Majority New
Noteholders), prior to the use thereof. Any income received by the New Indenture
Trustee with respect to the balance from time to time on deposit in the New
Notes Account, including any interest or capital gains on investments in
overnight securities made with amounts on deposit in the New Notes Account,
shall be credited to the New Notes Account.

                  (c) In the event of any conflict between this Section 5.01 (or
any portion thereof), any other provision of this New Indenture or any other
agreement now existing or hereafter entered into, the terms of this Section 5.01
shall prevail.

                  (d) The New Indenture Trustee shall make, to the extent
required or authorized hereunder, withdrawals from the New Notes Account: (i) to
withdraw any amount deposited in the New Notes Account and not required to be
deposited therein; and (ii) to make required payments to the parties entitled
thereto pursuant to Section 5.05.

                  (e) The New Indenture Trustee shall be accountable for all
funds deposited into the New Notes Account and shall pay and apply such funds,
or cause such funds to be paid and applied, in accordance with the provisions of
this Article V. Any amounts withdrawn under Section 5.01(d)(i) shall be paid to
the party entitled to such funds.

                  (f) Any and all amounts on deposit in the New Notes Account
shall, if not withdrawn on the day of deposit in accordance with this Article V,
be invested by the New Indenture Trustee in Financial Investments as directed in
writing by El Paso from time to time; provided that, if an El Paso Debt
Obligation Repayment Event has occurred, such amounts shall be invested in
Financial Investments other than El Paso Debt Obligations or any other
obligations of or debt securities issued by El Paso or any of its Affiliates;
provided, further, that, upon the occurrence of an El Paso Debt Obligation
Repayment Event or during any Replacement Period, El Paso shall no longer have
the right to direct the investment of the amounts on deposit in the New Notes
Account, and such amounts shall be invested by the New Indenture Trustee in
Financial Investments other than El Paso Debt Obligations or any other
obligations of or debt securities issued by El Paso or any of its Affiliates.

                  SECTION 5.02. New Notes Account.

                  The New Indenture Trustee shall deposit or cause to be
deposited into the New Notes Account, not later than 1:00 p.m. (New York City
time) on each Note Payment Date or as otherwise contemplated in Section 5.05 (i)
all amounts received by the New Indenture Trustee from the Indenture Trustee
pursuant to Section 5.05 of the Indenture, (ii) all New Notes Liquidity Payments
made by El Paso, as Class B Shareholder, (iii) all amounts received by the New
Indenture Trustee from the Class B Shareholder pursuant to Section
14.01(a)(ii)(A) or Section 15.01(c)(i), (iv) all funds received by the New
Indenture Trustee pursuant to Section 14.01(a)(ii)(B) or Section 15.01(c)(ii)
and (v) all amounts received from El Paso pursuant to the El Paso Guarantee, as
set forth in Article III.

                  SECTION 5.03.[Reserved].

                  SECTION 5.04.[Reserved].

                  SECTION 5.05. Payments.

                  (a) General. By 9:00 a.m. New York City time on the Business
Day prior to any Semi-Annual Payment Date, the New Indenture Trustee shall give
written notice to El Paso and the Issuers if the Amount Available in the New
Notes Account is not sufficient to pay the Interest Amount

                                       27
<PAGE>

and any New Administrative Expenses due and owing as of such Semi-Annual Payment
Date (a "Shortfall Notice"), which notice shall specify the amount of the
shortfall.

                  (b) Payments on Each Semi-Annual Payment Date.

                  (i) If no Shortfall Notice has been given pursuant to Section
5.05(a)(i) or if a Shortfall Notice shall have been given but the amount
specified in the Shortfall Notice shall have been received by 1:00 p.m. New York
City time on the applicable Semi-Annual Payment Date, by 1:00 p.m. New York City
time on each Semi-Annual Payment Date, the New Indenture Trustee shall withdraw
the Amount Available from the New Notes Account and pay such amount in the
manner and in the order of priority as follows:

                           first, from amounts credited to the New Notes
         Account, to the Paying Agent for the payment of any New Administrative
         Expenses;

                           second, from amounts credited to the New Notes
         Account, to the Paying Agent to be applied pro rata to the New
         Noteholders in the amount of any and all accrued and unpaid Interest
         Amount plus any accrued and unpaid Default Amount; and

                           third, any amounts remaining in the New Notes Account
         to be invested in accordance with Section 5.01(f).

                  (ii) If a Shortfall Notice has been given pursuant to Section
5.05(a)(i) above and either (a) the Class B Shareholder has made a New Notes
Liquidity Payment in an amount equal to the entire amount specified in the
Shortfall Notice or the amount specified in the Shortfall Notice has otherwise
been received on the first, second, third, fourth or fifth Business Day after
the relevant Semi-Annual Payment Date, then by 1:00 p.m. New York City time on
the date such amount is received, or (b) the Class B Shareholder has not made a
New Notes Liquidity Payment in an amount equal to the entire amount specified in
the Shortfall Notice and the amount specified in the Shortfall Notice has not
otherwise been received by 1:00 p.m. on the fifth Business Day after the
relevant Semi-Annual Payment Date, then by 1:00 p.m. New York City time on such
fifth Business Day after the relevant Semi-Annual Payment Date, the New
Indenture Trustee shall withdraw the Amount Available from the New Notes Account
and pay such amount in the manner and in the order of priority as follows:

                           first, from amounts credited to the New Notes
         Account, to the Paying Agent for the payment of any New Administrative
         Expenses;

                           second, from amounts credited to the New Notes
         Account, to the Paying Agent to be applied pro rata to the New
         Noteholders in the amount of any and all accrued and unpaid Interest
         Amount plus any accrued and unpaid Default Amount; and

                           third, any amounts remaining in the New Notes Account
         to be invested in accordance with Section 5.01(f).

                  (iii) Each New Noteholder shall be deemed, by its acceptance
of a New Note, to agree that, in case of any excess payment to it, it shall
promptly remit to the New Indenture Trustee for payment in accordance with the
terms of this Section 5.05 any such excess payment it has received. The New
Indenture Trustee shall promptly pay such amounts, when received, to any party
then not paid in full pursuant to this Section 5.05(b), and any remainder shall
be applied in accordance with priority third of Section 5.05(b)(ii).

                  (c) Payments on the Maturity Date. By 1:00 p.m. New York City
time on the Maturity Date, so long as (i) the New Notes have not been
accelerated as a result of the occurrence of an Event of Default and (ii) the
New Notes have not been redeemed in full, the New Indenture Trustee shall

                                       28
<PAGE>

withdraw the Amount Available from the New Notes Account and pay such amounts in
the manner and in the order of priority as follows:

                           first, from amounts credited to the New Notes
         Account, to the Paying Agent for the payment of New Administrative
         Expenses;

                           second, from amounts credited to the New Notes
         Account, to the Paying Agent to be applied pro rata to the New
         Noteholders in the amount of any and all accrued and unpaid Interest
         Amount;

                           third, from amounts credited to the New Notes
         Account, to the Paying Agent to be applied pro rata to the New
         Noteholders as a payment of principal, until such principal is reduced
         to zero; and

                           fourth, any amounts remaining in the New Notes
         Account, to the Indenture Trustee or the Fiscal Agent, as applicable,
         for deposit into the Collection Account pursuant to the Supplemental
         Indenture.

                  Each New Noteholder shall be deemed by its acceptance of a New
Note to agree that, in case of any excess payment to it, it shall promptly remit
to the New Indenture Trustee for payment in accordance with the terms of this
Section 5.05 any such excess payment it has received. The New Indenture Trustee
shall promptly pay such amounts, when received, to any party then not paid in
full pursuant to this Section 5.05(c), and any remainder in the New Notes
Account shall be paid in accordance with priority fourth of this Section
5.05(c).

                  (d) Payments on certain Acceleration Dates, a Mandatory
Redemption Date or certain Special Redemption Dates. Upon (i) the occurrence of
an Event of Default and the acceleration of the New Notes as a result thereof
(other than an acceleration attributable to an Event of Default described in
Section 9.01(a)), (ii) a Mandatory Redemption pursuant to Article XV or (iii) a
Special Redemption pursuant to Article XV (other than a Special Redemption which
is attributable to an Event of Default described in Section 9.01(a) or (n) of
the Indenture), by 1:00 p.m. New York City time on such Note Payment Date, the
New Indenture Trustee shall withdraw the Amount Available from the New Notes
Account and pay such amounts on the applicable Note Payment Date in the manner
and in the order of priority as follows:

                           first, from amounts credited to the New Notes
         Account, to the Paying Agent for the payment of New Administrative
         Expenses;

                           second, from amounts credited to the New Notes
         Account, to the Paying Agent to be applied pro rata to the New
         Noteholders in the amount of any and all accrued and unpaid Interest
         Amount plus any accrued and unpaid Default Amount;

                           third, from amounts credited to the New Notes
         Account, to the Paying Agent to be applied pro rata to the New
         Noteholders as a payment of principal, until such principal is reduced
         to zero; and

                           fourth, any amounts remaining in the New Notes
         Account, to the Indenture Trustee or the Fiscal Agent, as applicable,
         for deposit into the Collection Account pursuant to the Supplemental
         Indenture.

                  Each New Noteholder shall be deemed by its acceptance of a New
Note to agree that, in case of any excess payment to it, it shall promptly remit
to the New Indenture Trustee for payment in accordance with the terms of this
Section 5.05 any such excess payment it has received. The New Indenture Trustee
shall promptly pay the such amounts, when received, to any party then not paid
in full

                                       29
<PAGE>

pursuant to this Section 5.04(d), and any remainder shall be paid in accordance
with priority fourth of this Section 5.04(d).

                  (e) Payments on certain Acceleration Dates, an Optional
Redemption Date or certain Special Redemption Dates. (i) On any Optional
Redemption Date or any Special Redemption Date which is attributable to an Event
of Default described in Section 9.01(a) or (n) of the Indenture, if the New
Notes are to be redeemed in part by the Issuers in accordance with Article XIV
or Article XV, as applicable, the New Indenture Trustee shall withdraw the
Amount Available from the New Notes Account and pay such amounts in the manner
and in the order of priority as follows:

                           first, from amounts credited to the New Notes
         Account, to the Paying Agent for the payment of New Administrative
         Expenses; and

                           second, from amounts credited to the New Notes
         Account, to the Paying Agent to be applied to the New Noteholders in
         accordance with Section 14.04(a) as a payment of the Optional
         Redemption Price with respect to the New Notes.

                           (ii) Upon (a) an acceleration of the New Notes
         attributable to an Event of Default described in Section 9.01(a), (b)
         any Optional Redemption Date (if the New Notes are to be redeemed in
         full by the Issuers in accordance with Article XIV) or (c) any Special
         Redemption Date which is attributable to an Event of Default described
         in Section 9.01(a) or (n) of the Indenture (if the New Notes are to be
         redeemed in full by the Issuers in accordance with Article XV), by 1:00
         p.m. New York City time on any such Note Payment Date, the New
         Indenture Trustee shall withdraw the Amount Available from the New
         Notes Account and pay such amounts in the manner and in the order of
         priority as follows:

                           first, from amounts credited to the New Notes
         Account, to the Paying Agent for the payment of New Administrative
         Expenses;

                           second, from amounts credited to the New Notes
         Account, to the Paying Agent to be applied to the New Noteholders in
         accordance with Section 14.04(a) as a payment of the Optional
         Redemption Price with respect to the New Notes; and

                           third, any amounts remaining in the New Notes
         Account, to the Indenture Trustee or the Fiscal Agent, as applicable,
         for deposit into the Collection Account pursuant to the Supplemental
         Indenture.

                  Each New Noteholder shall be deemed by its acceptance of a New
Note to agree that, in case of any excess payment to it, it shall promptly remit
to the New Indenture Trustee for payment in accordance with the terms of this
Section 5.05 any such excess payment it has received. The New Indenture Trustee
shall promptly pay such amounts, when received, to any party then not paid in
full pursuant to this Section 5.05(e), and the remainder shall be paid in
accordance with priority third of this Section 5.05(e).

                  (f) [Reserved].

                  (g) All payments made to New Noteholders on any Semi-Annual
Payment Date will be made to the New Noteholders of record at the close of
business on the April 15 or October 15, as applicable, next preceding such Note
Payment Date (the "Record Date").

                  (h) The New Noteholders shall be entitled to receive payments
hereunder on any Note Payment Date by wire transfer to the account specified in
writing by the applicable New Noteholder to the New Indenture Trustee. In each
case, the account must be specified in writing no later than the Record Date for
the applicable Note Payment Date on which wire transfers will commence. Unless
such

                                       30
<PAGE>

instruction is revoked, any such instruction made by such New Holder with
respect to such New Note shall remain in effect with respect to any future
payments with respect to such New Note payable to such New Holder.

                  (i) If the New Indenture Trustee shall not have received a
distribution or payment with respect to the El Paso Guarantee by 5:00 p.m. New
York City time on the Business Day on which demand for payment was made pursuant
to Section 3.01, the New Indenture Trustee shall promptly and in no event later
than 10:00 a.m. on the following Business Day give written notice thereof to the
Guarantor and the New Noteholders.

                  (j) If, on any day on which a distribution under this Section
5.05 is required to be made, the New Indenture Trustee ascertains that the
Amount Available in the New Notes Account is then insufficient to pay in full
the amount required to be paid from the New Notes Account, then, if any
investments are held in the New Notes Account, the New Indenture Trustee shall
sell or otherwise liquidate all or such portion of such investments as is
necessary to pay in full the required amount.

                  SECTION 5.06. Report to New Noteholders.

                  (a) Within five Business Days following every Note Payment
Date commencing October 31, 2002, the New Indenture Trustee shall deliver to the
Issuers, El Paso, each New Noteholder and, subject to Section 5.06(b), each
owner of a beneficial interest in a Global Note who so requests a statement (an
"Account Statement") setting forth the status of the New Notes Account showing,
for the period covered by such statement, deposits in or withdrawals from the
New Notes Account and proceeds of investments of funds in the New Notes Account.
The Account Statement shall also set forth the following information:

                           (i) the amounts in the New Notes Account as of such
         Note Payment Date prior to giving effect to payments made on such Note
         Payment Date; and

                           (ii) the amounts of such funds in the New Notes
Account pursuant to Section 5.05.

                  Within a reasonable period of time after the end of each
calendar year, the New Indenture Trustee will furnish to the Issuers, the Rating
Agencies, each New Noteholder of record at any time during such calendar year
and, subject to Section 5.06(b), each owner of a beneficial interest in a Global
Note who so requests a report setting forth the aggregate amounts reported
pursuant to (i) and (ii) above for such calendar year.

                  (b) With respect to the information and documents required to
be delivered pursuant to clause (a) above, the New Indenture Trustee may require
each owner of a beneficial interest in a Global Note requesting such information
to provide evidence satisfactory to the New Indenture Trustee of such Person's
interest in a Global Note before delivering the requested information to such
Person.

                  (c) The New Indenture Trustee shall, subject to Article XI,
use its reasonable efforts to obtain any information it is required under this
New Indenture to obtain in the manner provided by this New Indenture.

                  (d) Consistent with the provisions of Section 2.08(c), the New
Indenture Trustee shall (i) furnish to the New Noteholders and any taxing
authority, within the time periods required by applicable law, such forms of
information as is required by applicable Federal or state tax law, including,
but not limited to, appropriate Forms 1099, or such equivalent forms, if
necessary, and (ii) provide such other information as may be reasonably
requested by any New Noteholder, at such New Noteholder's expense, to enable the
New Noteholder to prepare its tax returns.

                                       31
<PAGE>

                  SECTION 5.07. Termination.

                  Upon repayment in full of the New Notes and all other amounts
due and owing under this New Indenture, this New Indenture will terminate and be
discharged in accordance with Article X.

                                   ARTICLE VI

                  REPRESENTATIONS AND WARRANTIES OF THE ISSUERS

                  SECTION 6.01. Representations and Warranties Each of Investor
and the Co-Issuer, as applicable, represents and warrants to the New Indenture
Trustee and the New Noteholders, as of the Effective Date, that:

                  (a) Existence and Power. Investor is an exempted limited
liability company incorporated in the Cayman Islands, validly existing and in
good standing under the laws of the Cayman Islands and has all requisite
corporate powers and all material Permits required to carry on its business as
now conducted and as contemplated by the Transaction Documents. The Co-Issuer is
a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate powers and all
material Permits required to carry on its business as now conducted and as
contemplated by the Transaction Documents.

                  (b) Special Purpose Status. Investor has not engaged in any
activities since its incorporation (other than those incidental to its
incorporation and ongoing administration and other appropriate steps in
connection with the transactions contemplated by the Transaction Documents
including the issuance of Investor Shares in Investor and arrangements for the
payment of fees to its directors, the authorization, sale and issuance of the
Notes, the New Notes and the Investor Shares, the formation and ownership of the
Co-Issuer, the execution of the Transaction Documents to which it is a party
executed on or prior to the date hereof, activities in connection with the
Exchange Offer and consent solicitation and the activities referred to in or
contemplated by the Offering Circular and Consent Solicitation Statement or such
Transaction Documents) and has not paid any dividends or distributed any amounts
in respect of the Investor Shares since its incorporation (other than any
distributions made pursuant to Section 5.05(b) of the Indenture on any
Semi-Annual Payment Date). The Co-Issuer has not engaged in any activities since
its incorporation (other than those incidental to its incorporation and other
appropriate corporate steps in connection with the transactions contemplated by
the Transaction Documents including the issuance of stock to Investor and
arrangements for the payment of fees to its directors, the authorization, sale
and issuance of the Notes and the New Notes, the execution of the Transaction
Documents to which it is a party executed on or prior to the date hereof,
activities in connection with the Exchange Offer and consent solicitation and
the activities referred to in or contemplated by the Offering Circular and
Consent Solicitation Statement or such Transaction Documents) and has not paid
any dividends or made any distributions since its incorporation (other than any
distributions made pursuant to Section 5.05(b) of the Indenture on any
Semi-Annual Payment Date).

                  (c) Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by Investor of each of
the Transaction Documents to which it is a party are within Investor's corporate
powers, have been duly authorized by all necessary corporate action, require in
respect of Investor no action by or in respect of, or filing (except Uniform
Commercial Code continuation statements to be filed in the future) with, any
Governmental Authority that has not been taken or made and do not contravene, or
constitute a default under, any provision of Applicable Law in effect on the
Effective Date or of the Investor Constitutional Documents or the Investor
Shareholders Agreement or of any agreement or other instrument binding upon
Investor or result in the creation or imposition of any Lien on any asset of
Investor, except for Permitted Liens of the type described in clause (iii) of
the definition thereof. The execution, delivery and performance by the Co-Issuer
of each of the

                                       32
<PAGE>

Transaction Documents to which it is a party are within the Co-Issuer's
corporate powers, have been duly authorized by all necessary action, require no
corporate action by or in respect of, or filing (except Uniform Commercial Code
continuation statements to be filed in the future) with, any Governmental
Authority that has not been taken or made and do not contravene, or constitute a
default under, any provision of Applicable Law in effect on the Effective Date
or of the Co-Issuer's Certificate of Incorporation or Bylaws or of any agreement
or other instrument binding upon the Co-Issuer or result in the creation or
imposition of any Lien on any asset of the Co-Issuer, except for Permitted Liens
of the type described in clause (iii) of the definition thereof.

                  (d) Binding Effect. Each of the Transaction Documents (other
than the Note Purchase Agreement and the Dealer Manager Agreement) to which
Investor or the Co-Issuer is a party has been duly executed and delivered by
Investor or the Co-Issuer, as the case may be, and, subject to the due execution
and delivery by the other parties thereto, each such Transaction Document
constitutes (or, in the case of the New Notes, when duly authenticated, issued
and delivered in accordance with this New Indenture and the Dealer Manager
Agreement, will constitute) a legal, valid and binding obligation of Investor or
the Co-Issuer, as the case may be, enforceable against Investor or the
Co-Issuer, as applicable, in accordance with its terms except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

                  (e) [Reserved].

                  (f) No Consents. The execution, delivery and performance by
each of Investor and the Co-Issuer of each Transaction Document (other than the
Note Purchase Agreement and the Dealer Manager Agreement) to which Investor or
the Co-Issuer, as the case may be, is a party and the offering of the New Notes
by the Issuers in exchange for Notes (in accordance with the Exchange Offer) do
not require the consent or the approval or authorization of, or any filing,
registration or qualification with, any Person or any Governmental Authority on
the part of either Investor or the Co-Issuer, as applicable, as a condition to
such execution, delivery and performance by it as and when required that has not
been obtained, given or taken except where the failure to obtain such consent,
approval or authorization or make such filing, registration or qualification
would not have an Issuer Material Adverse Effect.

                  (g) Litigation. There is no Proceeding pending against or,
after reasonable inquiry, to the actual knowledge of any Authorized Officer of
either Investor or the Co-Issuer, threatened against the Issuers before any
Governmental Authority.

                  (h) Tax Claims. There is no Tax claim pending against or,
after reasonable inquiry, to the actual knowledge of any Authorized Officer of
either Investor or the Co-Issuer, threatened against the Issuers.

                  (i) Payment of Taxes. The Issuers have each paid all Taxes
which they are required to have paid prior to the Effective Date.

                  (j) Not an Investment Company. Neither Investor nor the
Co-Issuer will be required to register as an "investment company" within the
meaning of the Investment Company Act, and neither will become such as a result
of the issuance and sale of the New Notes or the other transactions contemplated
by the Transaction Documents.

                  (k) [Reserved].

                  (l) No Conflict. Neither the issuance and delivery of the New
Notes nor the consummation of any other of the transactions contemplated herein
nor compliance with the provisions of

                                       33
<PAGE>

this New Indenture will conflict with or result in the breach of any material
term or provision of any agreements to which Investor or the Co-Issuer is a
party or constitute a violation of any Applicable Law.

                  (m) [Reserved].

                  (n) Compliance. The Issuers are not in breach or violation of
or in default (nor, after reasonable inquiry, to the actual knowledge of an
Authorized Officer of either Investor or the Co-Issuer, has an event occurred
that with notice or lapse of time or both would constitute a default) under the
terms of (i) their Organizational Documents, (ii) any of the Transaction
Documents (other than the Note Purchase Agreement and the Dealer Manager
Agreement), (iii) any other agreements to which they are a party or (iv) any
Applicable Law, the default in or the breach or violation of which in the case
of clause (ii), clause (iii) and clause (iv) would have an Issuer Material
Adverse Effect.

                  (o) No Defaults. To the best of the Issuers' knowledge, no
Event of Default has occurred and is continuing and no condition, event or act
has occurred and is continuing that with the giving of notice and/or the lapse
of time and/or any determination or certification would constitute an Event of
Default.

                  (p) Indebtedness. Neither Investor nor the Co-Issuer has
created, assumed or incurred any Indebtedness other than the Notes and the New
Notes.

                  (q) Employees, Subsidiaries. Investor has no employees and,
other than the Co-Issuer, no subsidiaries and no place of business outside of
the Cayman Islands. The Co-Issuer has no employees, no subsidiaries and no place
of business outside of the State of Delaware.

                  (r) PUHCA. Neither Investor nor the Co-Issuer is subject to
regulation as a "holding company" or a "subsidiary company" or an "affiliate" of
a "holding company," in each case as such terms are defined in the PUHCA.

                  (s) Federal Power Act. Neither Investor nor the Co-Issuer is
in the business of producing, transmitting or selling electrical power, and the
principal business of each of Investor and the Co-Issuer is other than that of a
"public utility" as such term is defined in Section 201 of the FPA and the
orders of the FERC interpreting such section.

                  (t) Securities Act. Assuming that the representations of the
initial New Noteholders relating to matters of securities law set forth in the
Offering Circular and Consent Solicitation and/or Letter of Transmittal are true
and correct, the exchange of the New Notes for the Notes by the Issuers in the
manner contemplated by the Offering Circular and Consent Solicitation and the
Dealer Manager Agreement will be exempt from the registration requirements of
the Securities Act by reason of Section 4(2) thereof.

                  SECTION 6.02.Survival of Representations and Warranties. It is
understood and agreed that the representations and warranties set forth in
Section 6.01 shall survive the issuance of the New Notes. Upon actual knowledge
by the Issuers or an Authorized Officer of the New Indenture Trustee of a breach
of any of such representations and warranties, the party discovering such breach
shall give prompt written notice to the other parties and to the New
Noteholders.

                                   ARTICLE VII

                   COVENANTS OF THE ISSUERS AND THE GUARANTOR

                  SECTION 7.01. Covenants of the Issuers and the Guarantor. The
Issuers agree with respect to themselves and, to the extent applicable, any
other party to a Transaction Document (other than

                                       34
<PAGE>

the Guarantor) and the Guarantor agrees with respect to itself only, as
applicable, that so long as any amount payable hereunder or under any New Note
remains unpaid:

                  (a) Information. The Issuers will at all times furnish to the
New Indenture Trustee such information as the New Indenture Trustee may
reasonably request for the purpose of the discharge of the trusts, powers,
rights, duties, authorities and discretions vested in it hereunder or under any
other Transaction Document (other than the Note Purchase Agreement and the
Dealer Manager Agreement) or by operation of law.

                  (b) Reporting Requirements. The Issuers and the Guarantor
shall furnish or cause to be furnished to the New Indenture Trustee, which shall
furnish to El Paso, the Rating Agencies, the New Noteholders and, if so
requested, to each owner of a beneficial interest in a Global Note, the
following; provided that, so long as the Guarantor is subject to Section 13 or
15(d) of the Exchange Act, the Guarantor shall not be required to comply with
clauses (i) and (ii) below; provided, further, that the Guarantor shall not be
required to comply with clause (iv) below:

                           (i) as soon as available and in any event within 60
         days after the end of the first, second and third fiscal quarters of
         each of Investor, the Guarantor, Topaz, Garnet and Diamond, an
         unaudited consolidated balance sheet of each of Investor, the
         Guarantor, Topaz, Garnet and Diamond as of the end of such quarter and
         the related consolidated statements of income and cash flows for such
         quarter and for the portion of the fiscal year ending with the last day
         of such quarter and beginning with the first fiscal quarter ending in
         2003, setting forth in each case in comparative form corresponding
         unaudited figures for the corresponding fiscal period of the preceding
         year, if any; provided that such financial statements need not include
         footnote disclosure and may be subject to ordinary year-end adjustment;

                           (ii) as soon as available and in any event within 120
         days after the end of each fiscal year of each of Investor, the
         Guarantor, Topaz, Garnet and Diamond, audited consolidated financial
         statements of each of Investor, the Guarantor, Topaz, Garnet and
         Diamond, prepared in accordance with GAAP, together with an unqualified
         audit opinion of PricewaterhouseCoopers LLP or another firm of
         independent certified public accountants of recognized national
         standing and an Issuers' Certificate stating, to its actual knowledge,
         (a) that no Indenture Default or Event of Default has occurred or is
         continuing, (b) if an Indenture Default or Event of Default has
         occurred and is continuing, a statement as to the nature thereof and
         what action the Issuers are taking or propose to take in respect
         thereof and (c) that no event has occurred or remains by reason of
         which payments on account of the principal of or interest, if any, on
         any of the New Notes are prohibited or, if such event has occurred, a
         statement as to the nature thereof and what action the Issuers are
         taking or propose to take with respect thereto;

                           (iii) promptly and in any event within 10 Business
         Days after either Investor, the Co-Issuer or the Guarantor has actual
         knowledge thereof, written notice of the occurrence of any event or
         condition which constitutes an Indenture Default, an Event of Default
         or a Specified Equity Event, specifically stating that such event or
         condition has occurred and describing it and any action being or
         proposed to be taken with respect thereto; and

                           (iv) promptly and in any event within 10 Business
         Days after either Investor or the Co-Issuer has actual knowledge
         thereof, written notice of the occurrence of any material default under
         any Transaction Document (other than the Note Purchase Agreement and
         the Dealer Manager Agreement), the commencement of any material
         actions, suits and other proceedings instituted against any of Investor
         or the Co-Issuer, or the occurrence of any event or condition that is
         reasonably likely to have an Issuer Material Adverse Effect.

                                       35
<PAGE>

                  With respect to the information and documents required to be
delivered pursuant to this Section 7.01(b), the New Indenture Trustee may
require each owner of a beneficial interest in a Global Note requesting such
information to provide evidence satisfactory to the New Indenture Trustee of
such Person's interest in a Global Note before delivering the requested
information to such Person. Delivery of such information, documents or notices
to the New Indenture Trustee shall be for informational purposes only, and the
New Indenture Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Issuers' compliance with any of their covenants hereunder
(as to which the New Indenture Trustee is entitled to rely exclusively on
Issuers' Certificates).

                  (c) Maintenance of Books and Records. The Issuers will
maintain their books and records in accordance with GAAP.

                  (d) [Reserved].

                  (e) Payment of Obligations. The Issuers and the Guarantor will
pay and discharge in full their respective obligations hereunder, under the New
Notes and under the other Transaction Documents (other than the Note Purchase
Agreement and the Dealer Manager Agreement).

                  (f) Limitation on Business Activities of Investor. Investor
shall not hold any material assets (other than its interest in the Co-Issuer,
its interest in Topaz, its interest in Diamond, its interests under the
Transaction Documents and Financial Investments as contemplated by the
Transaction Documents), become liable for any material obligations (other than
the Notes and the New Notes), engage in any trade or business or conduct any
business activity other than the issuance of the Investor Shares, the incurrence
of indebtedness as a co-obligor of the Notes and the New Notes, the activities
contemplated in this New Indenture, the Participation Agreement and any other
Transaction Document and the activities incidental thereto.

                  (g) Limitation on Business Activities of the Co-Issuer. The
Co-Issuer shall not hold any material assets, become liable for any material
obligations (other than the Notes and the New Notes), engage in any trade or
business, or conduct any business activity, other than the issuance of equity
interests to Investor, the incurrence of indebtedness as a co-obligor of the
Notes and the New Notes, the activities contemplated in this New Indenture and
any other Transaction Document and activities incidental thereto. Investor shall
not engage in any transactions with the Co-Issuer in violation of the
immediately preceding sentence.

                  (h) [Reserved].

                  (i) [Reserved].

                  (j) [Reserved].

                  (k) Direction. The Issuers shall take all steps as the New
Indenture Trustee may reasonably require at any time or times to give effect to
the Transaction Documents; provided that any costs and expenses of taking such
steps shall be included in the New Administrative Expenses due and payable on
the next succeeding Note Payment Date. The Guarantor shall take all steps as the
New Indenture Trustee may reasonably require at any time or times to give effect
to any of its obligations under this New Indenture and the New Notes; provided
that any costs and expenses of taking such steps (other than costs and expenses
of the Guarantor) shall be included in the New Administrative Expenses due and
payable on the next succeeding Note Payment Date.

                  (l) Conduct of Business and Maintenance of Existence. The
Issuers will carry on their business in a proper and efficient manner, to the
extent permitted under this New Indenture. Subject to the terms of Section
7.01(p), the Issuers will keep in full effect their legal existence, material
rights

                                       36
<PAGE>

(charter, if applicable, and statutory) and material franchises as an exempted
limited liability company incorporated in the Cayman Islands or corporation
under the laws of the State of Delaware, as applicable, and, at the request of
the New Indenture Trustee, will obtain and preserve their qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this New Indenture and to perform their respective duties
under this New Indenture.

                  (m) Compliance with Laws. Each of Investor and the Co-Issuer
will comply in all material respects with all Applicable Laws in the
jurisdiction of its organization or incorporation except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings or
where the failure to so comply would not reasonably be expected to have an
Issuer Material Adverse Effect.

                  (n) Investments; No Subsidiaries. Other than as contemplated
by the Transaction Documents, the Issuers will not make or acquire any
Investment in any Person other than, in the case of Investor, the Co-Issuer,
Topaz, Diamond and Financial Investments. Without limitation of the foregoing,
the Co-Issuer shall have no subsidiaries.

                  (o) Indebtedness. The Issuers will not create, assume or incur
any Indebtedness other than the Notes and the New Notes.

                  (p) Consolidation or Merger. Any Person into which any of
Investor or the Co-Issuer may be merged or consolidated or any Person resulting
from any merger or consolidation to which any of Investor or the Co-Issuer shall
be a party or any Person succeeding to the business of any of Investor or the
Co-Issuer shall be the successor of Investor or the Co-Issuer, as applicable,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto; provided that each Rating Agency confirms
that its then current rating on each of the New Notes shall not be withdrawn or
downgraded.

                  (q) [Reserved].

                  (r) Amendment of Transaction Documents. Except for amendments,
modifications and supplements to this New Indenture contemplated in Article XII,
the Issuers will not agree or consent to any amendment, modification or waiver
of any provision of any Transaction Document (other than the Note Purchase
Agreement, the Dealer Manager Agreement, the Share Trust Agreement, the
Remarketing Agreement, the El Paso Preferred Stock Certificate of Designation
and the Participation Agreement) without the consent of the New Indenture
Trustee acting at the written direction of the Majority New Holders unless the
New Indenture Trustee receives a legal opinion of nationally recognized outside
counsel experienced in structured finance (including Jones Day, Reavis & Pogue)
to the effect that such amendment, modification or waiver does not materially
adversely affect the rights or obligations of the New Noteholders. The Co-Issuer
shall not amend or modify, or consent to amend or modify the Certificate of
Incorporation of the Co-Issuer without the written consent of the Majority New
Holders (except as required by law or with respect to its registered agent or
office in the State of Delaware).

                  (s) Assignment of Transaction Documents. Except for
assignments contemplated by this New Indenture (which shall include any
assignments made in connection with any consolidation or merger permitted by
Section 7.01(p)), the Issuers will not assign their rights under any of the
Transaction Documents (other than the Note Purchase Agreement and the Dealer
Manager Agreement) to which they are a party without the prior written consent
of the Majority New Holders.

                  (t) Rule 144A. The Issuers and the Guarantor will furnish or
cause to be furnished promptly upon the request of a New Noteholder or a
prospective transferee, at any time when the Issuers or the Guarantor, as the
case may be, are not subject to Section 13 or 15(d) of the Exchange Act,

                                       37
<PAGE>

information specified in Rule 144A(d)(4)(i) and (ii) under the Securities Act to
such New Noteholder or to a prospective transferee of a New Note or interests in
such New Note designated by such New Noteholder, as the case may be, in
connection with the resale pursuant to Rule 144A of such New Note or such
interests by such New Noteholder; provided, however, that the Issuers and the
Guarantor shall not be required to furnish such information in connection with
any request made after the date which is two years after the later to occur of
(i) the Effective Date and (ii) the date such New Note was last acquired from an
"affiliate" of any of Investor, the Co-Issuer or the Guarantor within the
meaning of Rule 144.

                  (u) Restrictions on Certain Actions. The Issuers and the
Guarantor will not take, or knowingly permit to be taken, any action that would
terminate or discharge or prejudice the validity or effectiveness of any of the
Transaction Documents (other than the Note Purchase Agreement, the Dealer
Manager Agreement, the Share Trust Agreement, the Remarketing Agreement, the El
Paso Preferred Stock Certificate of Designation and the Participation Agreement)
except as permitted or contemplated by this New Indenture or the other
Transaction Documents.

                  (v) Transaction Documents. Each of Investor, the Co-Issuer and
the Guarantor will enter into and perform all of its material obligations under
each Transaction Document (other than the Note Purchase Agreement and the Dealer
Manager Agreement) to which it is a party.

                  (w) Dealings with Ownership Interests and Stock. Investor
shall not issue, deliver or sell any additional shares other than the Class A
Shares and the Class B Shares issued as of the Closing Date. The Co-Issuer shall
not issue, deliver or sell any additional shares, except to Investor.

                  (x) Section 3(c)(7) Reminder Notice. Investor shall furnish or
cause to be furnished to the New Indenture Trustee who shall furnish to the New
Noteholders, simultaneously with each report required to be furnished pursuant
to Section 7.01(b)(i) and (ii), a Section 3(c)(7) Reminder Notice substantially
in the form attached as Exhibit E hereto.

                  (y) Transfer Restrictions. The Issuers shall not remove the
Transfer Restriction Legend or the QP Legend from the New Notes at any time.

                  (z) DTC Actions. Investor shall direct DTC to take the
following steps in connection with the Global Notes:

                           (i) Investor shall direct DTC to include the "3c7"
         marker in the DTC 20-character security descriptor and the 48-character
         additional descriptor for the Rule 144A Global Notes in order to
         indicate that sales are limited to Qualified Purchasers.

                           (ii) Investor shall direct DTC to cause each physical
         DTC delivery order ticket delivered by DTC to purchasers to contain the
         20-character security descriptor and shall direct DTC to cause each DTC
         delivery order ticket delivered by DTC to purchasers in electronic form
         to contain the "3c7" indicator and the related user manual for
         participants.

                           (iii) On or prior to the Effective Date, Investor
         will instruct DTC to send an "Important Notice" to all DTC Participants
         in connection with the offering of the Global Notes. The "Important
         Notice" will be in substantially the form of Exhibit D hereto and will
         notify DTC's Participants that the Rule 144A Global Notes are Section
         3(c)(7) securities.

                           (iv) Investor will request DTC to include the Global
         Notes in DTC's "Reference Directory" of Section 3(c)(7) offerings.

                                       38
<PAGE>

                           (v) Investor will from time to time (upon the request
         of the New Indenture Trustee or the Note Registrar) request DTC to
         deliver to Investor a list of all DTC Participants holding an interest
         in the Rule 144A Global Notes.

                  (aa) Bloomberg Screens, Etc. Investor will from time to time
request all third-party vendors to include on screens maintained by such vendors
appropriate legends regarding Rule 144A and Section 3(c)(7) restrictions on the
Rule 144A Notes. Without limiting the foregoing, Investor will request that
Bloomberg, L.P. include the following on each Bloomberg screen containing
information about the Rule 144A Notes:

                           (i) The bottom of the "Security Display" page
         describing the Rule 144A Notes should state: "Iss'd Under 144A/3c7".

                           (ii) The "Security Display" page should have a
         flashing red indicator stating "See Other Available Information."

                           (iii) Such indicator for the Rule 144A Notes should
         link to an "Additional Security Information" page, which should state
         that the Rule 144A Notes "are being offered in reliance on the
         exemption from registration under Rule 144A of the Securities Act of
         1933 to persons that are both (1) qualified institutional buyers (as
         defined in Rule 144A under the Securities Act) and (2) qualified
         purchasers (as defined under Section 3(c)(7) of the Investment Company
         Act of 1940)."

                           (iv) The "Disclaimer" page for the New Notes should
         state that the New Notes "will not be and have not been registered
         under the Securities Act of 1933, as amended, and the Issuers have not
         been registered under the Investment Company Act of 1940, as amended,
         and these securities may not be offered or sold in the United States
         absent registration or an applicable exemption from registration
         requirements, and any such offer or sale of these securities must be in
         accordance with Section 3(c)(7) of the Investment Company Act of 1940,
         to the extent applicable."

                  (bb) CUSIP. Investor will cause each "CUSIP" number obtained
for a Rule 144A Global Note to have an attached "fixed field" that contains
"3c7" and "144A" indicators.

                  (cc) Existence. Subject to Sections 7.01(dd) and (ee), the
Guarantor shall do or cause to be done all things necessary to preserve and keep
in full force and effect its existence, rights (charter and statutory) and
franchises; provided, however, that the Guarantor shall not be required to
preserve any such right or franchise if it shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Guarantor.

                  (dd) Consolidation, Merger, Conveyance, Transfer or Lease. The
Guarantor shall not consolidate with or merge into any other Person or sell,
lease or transfer its properties and assets as, or substantially as, an entirety
to any Person, unless:

                           (i)(A) in the case of a merger, the Guarantor is the
         surviving entity or (B) the Person formed by such consolidation or into
         which the Guarantor is merged or the Person which acquires by sale or
         transfer, or which leases, the properties and assets of the Guarantor
         as, or substantially as, an entirety shall expressly assume, by an
         indenture supplemental hereto, executed and delivered to the New
         Indenture Trustee, in form reasonably satisfactory to the New Indenture
         Trustee, the performance or observance of every covenant, condition or
         other obligation of this New Indenture, the New Notes and the El Paso
         Guarantee on the part of the Guarantor to be performed or observed;

                                       39
<PAGE>

                           (ii) immediately after giving effect to such
         transaction, no Event of Default or Indenture Default exists with
         respect to the Guarantor's obligations under this New Indenture or the
         El Paso Guarantee; and

                           (iii) the Guarantor has delivered to the New
         Indenture Trustee an Officer's Certificate and an Opinion of Counsel,
         each stating that such consolidation, merger, sale, transfer or lease
         and the supplemental indenture required in connection with such
         transaction comply with this Section 7.01(dd) and Section 7.01(ee) and
         that all conditions precedent herein provided for relating to such
         transaction have been complied with.

                  (ee) Successor Substituted. Upon any consolidation of the
Guarantor with, or merger of the Guarantor into, any other Person or any sale,
transfer or lease of the properties and assets of the Guarantor as, or
substantially as, an entirety in accordance with Section 7.01(dd), the successor
Person formed by such consolidation or into which the Guarantor is merged or to
which such sale, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Guarantor under this New
Indenture, the New Notes and the El Paso Guarantee with the same effect as if
such successor Person had been named originally herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this New Indenture, the New Notes and the El
Paso Guarantee.

                  (ff) Limitations on Liens. The Guarantor shall not, nor shall
it permit any Restricted Subsidiary to, create, assume, incur or suffer to exist
any Lien upon any Principal Property, whether owned or leased on the date hereof
or thereafter acquired, to secure any Debt of the Guarantor or any other Person
(other than the El Paso Guarantee), without in any such case making effective
provision whereby the El Paso Guarantee shall be secured equally and ratably
with, or prior to, such Debt, so long as such Debt shall be so secured. This
restriction shall not apply to:

                           (i) any Lien upon any property or assets of the
         Guarantor or any Restricted Subsidiary in existence on the Effective
         Date or created pursuant to an "after-acquired property" clause or
         similar term in existence on the Effective Date or any mortgage, pledge
         agreement, security agreement or other similar instrument in existence
         on the Effective Date;

                           (ii) any Lien upon any property or assets created at
         the time of acquisition of such property or assets by the Guarantor or
         any Restricted Subsidiary or within one year after such time to secure
         all or a portion of the purchase price for such property or assets or
         Debt incurred to finance such purchase price, whether such Debt was
         incurred prior to, at the time of or within one year of such
         acquisition;

                           (iii) any Lien upon any property or assets existing
         thereon at the time of the acquisition thereof by the Guarantor or any
         Restricted Subsidiary (whether or not the obligations secured thereby
         are assumed by the Guarantor or any Restricted Subsidiary);

                           (iv) any Lien upon any property or assets of a Person
         existing thereon at the time such Person becomes a Restricted
         Subsidiary by acquisition, merger or otherwise;

                           (v) the assumption by the Guarantor or any Restricted
         Subsidiary of obligations secured by any Lien existing at the time of
         the acquisition by the Guarantor or any Restricted Subsidiary of the
         property or assets subject to such Lien or at the time of the
         acquisition of the Person which owns such property or assets;

                           (vi) any Lien on property to secure all or part of
         the costs of construction or improvements thereon or to secure Debt
         incurred prior to, at the time of or within one year after

                                       40
<PAGE>

         the completion of such construction or making of such improvements, to
         provide funds for any such purpose;

                           (vii) any Lien on any oil, gas, mineral and
         processing and other plant properties to secure the payment of costs,
         expenses or liabilities incurred under any lease or grant or operating
         or other similar agreement in connection with or incident to the
         exploration, development, maintenance or operation of such properties;

                           (viii) any Lien arising from or in connection with a
         conveyance by the Guarantor or any Restricted Subsidiary of any
         production payment with respect to oil, gas, natural gas, carbon
         dioxide, sulphur, helium, coal, metals, minerals, steam, timber or
         other natural resources;

                           (ix) any Lien in favor of the Guarantor or any
         Restricted Subsidiary;

                           (x) any Lien created or assumed by the Guarantor or
         any Restricted Subsidiary in connection with the issuance of Debt the
         interest on which is excludable from gross income of the holder of such
         Debt pursuant to the Code or any successor statute, for the purpose of
         financing, in whole or in part, the acquisition or construction of
         property or assets to be used by the Guarantor or any Subsidiary;

                           (xi) any Lien upon property or assets of any foreign
         Restricted Subsidiary to secure Debt of that foreign Restricted
         Subsidiary;

                           (xii) El Paso Permitted Liens;

                           (xiii) any Lien upon any additions, improvements,
         replacements, repairs, fixtures, appurtenances or component parts
         thereof attaching to or required to be attached to property or assets
         pursuant to the terms of any mortgage, pledge agreement, security
         agreement or other similar instrument, creating a Lien upon such
         property or assets permitted by clauses (i) through (xii), inclusive,
         of this Section 7.01(ff); or

                           (xiv) any extension, renewal, refinancing, refunding
         or replacement (or successive extensions, renewals, refinancings,
         refundings or replacements) of any Lien, in whole or in part, that is
         referred to in clauses (i) through (xiii), inclusive, of this Section
         7.01(ff) or of any Debt secured thereby; provided, however, that the
         principal amount of Debt secured thereby shall not exceed the greater
         of the principal amount of Debt so secured at the time of such
         extension, renewal, refinancing, refunding or replacement and the
         original principal amount of Debt so secured (plus in each case the
         aggregate amount of premiums, other payments, costs and expenses
         required to be paid or incurred in connection with such extension,
         renewal, refinancing, refunding or replacement); provided, further,
         however, that such extension, renewal, refinancing, refunding or
         replacement shall be limited to all or a part of the property
         (including improvements, alterations and repairs on such property)
         subject to the encumbrance so extended, renewed, refinanced, refunded
         or replaced (plus improvements, alterations and repairs on such
         property).

                  Notwithstanding the foregoing provisions of this Section
7.01(ff), the Guarantor may, and may permit any Restricted Subsidiary to,
create, assume, incur or suffer to exist any Lien upon any Principal Property to
secure any Debt of the Guarantor or any other Person (other than the El Paso
Guarantee) that is not excepted by clauses (i) through (xiv), inclusive, of this
Section 7.01(ff) without securing the El Paso Guarantee, provided that the
aggregate principal amount of all Debt then outstanding secured by such Lien and
all similar Liens, together with all net sale proceeds from Sale-Leaseback
Transactions (excluding Sale-Leaseback Transactions permitted by clauses (i)
through (iv), inclusive, of Section 7.01(gg) below) does not exceed 15% of
Consolidated Net Tangible Assets.

                                       41
<PAGE>

                  (gg) Restriction on Sale-Leaseback Transaction. The Guarantor
shall not, nor shall it permit any Restricted Subsidiary to, engage in a
Sale-Leaseback Transaction, unless:

                           (i) such Sale-Leaseback Transaction occurs within one
         year from the date of acquisition of the Principal Property subject
         thereto or the date of the completion of construction or commencement
         of full operations on such Principal Property, whichever is later;

                           (ii) the Sale-Leaseback Transaction involves a lease
         for a period, including renewals, of not more than three years;

                           (iii) the Guarantor or such Restricted Subsidiary
         would be entitled to incur Debt secured by a Lien on the Principal
         Property subject thereto in a principal amount equal to or exceeding
         the net sale proceeds from such Sale-Leaseback Transaction without
         securing the El Paso Guarantee; or

                           (iv) the Guarantor or such Restricted Subsidiary,
         within a one-year period after such Sale-Leaseback Transaction, applies
         or causes to be applied an amount not less than the net sale proceeds
         from such Sale-Leaseback Transaction to (A) the repayment, redemption
         or retirement of Funded Debt of the Guarantor or any Subsidiary or (B)
         investment in another Principal Property.

                  Notwithstanding the foregoing provisions of this Section
7.01(gg), the Guarantor may, and may permit any Restricted Subsidiary to, effect
any Sale-Leaseback Transaction that is not excepted by clauses (i) through (iv),
inclusive, of this Section 7.01(gg), provided that the net sale proceeds from
such Sale-Leaseback Transaction, together with the aggregate principal amount of
then outstanding Debt (other than the El Paso Guarantee) secured by Liens upon
Principal Properties not excepted by clauses (i) through (xiv), inclusive, of
Section 7.01(ff), do not exceed 15% of the Consolidated Net Tangible Assets.

                                  ARTICLE VIII

                     LIMITATION ON LIABILITY OF THE ISSUERS

                  SECTION 8.01. Liabilities of the Issuers. The Issuers shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by each of them herein.

                                   ARTICLE IX

                                EVENTS OF DEFAULT

                  SECTION 9.01. Events of Default. If one or more of the
following events (herein referred to as "Events of Default") (whatever the
reason for such Events of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:

                  (a) failure by the Issuers to make (or cause to be made on
their behalf) on any Note Payment Date a payment of the Interest Amount for such
Note Payment Date and such failure continues for five Business Days;

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                  (b) failure by the Issuers to make (or cause to be made on
their behalf) principal payments on any of the New Notes when due, whether on
the Maturity Date or any date set for redemption;

                  (c) failure by any of Investor, the Co-Issuer or El Paso duly
to observe or to perform any other covenant of the Issuers or El Paso, as
applicable, under the Closing Agreement, this New Indenture, the New Notes or
the El Paso Guarantee which failure (i) materially adversely affects the rights
of the New Noteholders and (ii) continues unremedied for a period of 30 days
after the earlier of (A) El Paso or any of its Affiliates having actual
knowledge of such default and (B) the giving of written notice of such failure
to the Issuers and El Paso by the New Indenture Trustee or by any New
Noteholder;

                  (d) any representation or warranty made by any of Investor,
the Co-Issuer or El Paso, as applicable, in the Closing Agreement or this New
Indenture or any other document delivered to the New Indenture Trustee pursuant
to this New Indenture shall prove to have been incorrect in any material respect
when made (or deemed made) and such misrepresentation continues to remain
materially incorrect for 30 days after the earlier of (x) El Paso or any of its
Affiliates having actual knowledge of such default and (y) the giving of written
notice of such failure to the Issuers and El Paso by the New Indenture Trustee
or by any New Noteholder;

                  (e) this New Indenture, the New Notes or the Closing Agreement
cease to be the legally valid and enforceable obligation of any of Investor, the
Co-Issuer or El Paso, as the case may be, which cessation (x) materially
adversely affects the rights of the New Noteholders and (y) continues for 30
days after the earlier of (A) El Paso or any of its Affiliates having actual
knowledge thereof and (B) the giving of written notice of such cessation to the
Issuers and El Paso by the New Indenture Trustee or by any New Noteholder;

                  (f) the El Paso Guarantee shall for any reason cease to be, or
shall be asserted in writing by the Guarantor not to be, in full force and
effect and enforceable in accordance with its terms; provided that if, within
one Business Day after the earlier of (A) El Paso or any of its Affiliates
having actual knowledge of such cessation and (B) the giving of written notice
of such cessation to the Issuers and El Paso by the New Indenture Trustee or by
any New Noteholder, the Guarantor delivers written notice to the New Indenture
Trustee that the Guarantor intends to deliver a valid and effective guarantee
having the same economic effect as the El Paso Guarantee set forth in Article
III, or to reinstate the El Paso Guarantee, as soon as possible, then an Event
of Default shall not exist pursuant to this Section 9.01(f) unless the Guarantor
shall fail to deliver such guarantee or reinstate the El Paso Guarantee within
four Business Days after the delivery of such written notice of the Guarantor's
intent;

                  (g) the rendering of any final money judgment, enforceable in
any competent court, against any of Investor or the Co-Issuer, and such judgment
shall not be discharged or dismissed or execution thereon stayed within 60 days
after entry;

                  (h) the occurrence of any default in the payment when due of
interest on or principal of any El Paso Debt Obligation, and such default
continues unremedied for five Business Days after the earlier of (x) El Paso or
any of its affiliates having actual knowledge of such default and (y) the giving
of written notice of such default to the Issuers and El Paso by the New
Indenture Trustee or by any New Noteholder;

                  (i) any of Investor, the Co-Issuer or El Paso becomes an
investment company required to be registered under the Investment Company Act,
provided that, if any such person becomes a transient investment company exempt
from registration pursuant to Rule 3a-2 of the Investment Company Act, it shall
not be an Event of Default;

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<PAGE>

                  (j) the commencement of any voluntary or involuntary
proceeding seeking liquidation, reorganization or other relief with respect to
any of Investor, the Co-Issuer or El Paso and, in the case of any such
involuntary proceeding with respect to El Paso, such proceeding has not been
terminated within 60 days after commencement; and

                  (k) the failure by El Paso to make any payment on any (i)
indebtedness for money borrowed by El Paso, (ii) obligation of El Paso (other
than any trade payable obligation which shall not have remained unpaid for 91
days or more from the original due date thereof) to pay the deferred purchase
price of property or services or (iii) obligation of El Paso as lessee under
leases which shall have been or should be, in accordance with GAAP, recorded as
capital leases (it being agreed that for all purposes hereof, where any such
indebtedness or obligation is made jointly, or jointly and severally, with any
third party or parties other than any consolidated subsidiary, the amount
thereof shall be the pro rata portion thereof payable by El Paso, so long as
such third party or parties have not defaulted on its or their joint and several
portions thereof), in each case, when the same becomes due and payable (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise)
which failure continues after any applicable grace period, which defaulted
payment amount in the aggregate exceeds $200,000,000 in principal amount;

then (x) the New Indenture Trustee, at the written direction of the holders of
at least 25% of the aggregate principal amount of the Outstanding New Notes in
their sole and absolute discretion, shall deliver a written notice substantially
in the form of Exhibit F hereto (a "Default Notice") to the Issuers and El Paso,
which shall specifically state that it is a Default Notice, (y) the New
Indenture Trustee, by notice in writing to the Issuers and El Paso, shall
declare the principal of all the New Notes and the unpaid interest accrued
thereon to be due and payable immediately, without presentment, demand, protest
or other requirements of any kind, all of which are hereby expressly waived by
the Issuers and the Guarantor, upon (i) in the case of an Event of Default
described in clause (a), (b), (h) or (k), the written direction of the holders
of at least 25% of the aggregate principal amount of the Outstanding New Notes
and (ii) in the case of any Event of Default other than an Event of Default
described in clause (j) or of the type described in the immediately preceding
clause (i), the written direction of the holders of at least 50% of the
aggregate principal amount of the Outstanding New Notes and (z) in the case of
an Event of Default described in clause (j), the principal of all the New Notes
and the unpaid interest accrued thereon shall automatically become due and
payable immediately; provided that following the occurrence of an Event of
Default described in clause (a), such payment will be at the Optional Redemption
Price.

                  SECTION 9.02. Application of Proceeds. Any moneys collected by
the New Indenture Trustee pursuant to this Article, from and after an
Acceleration Date, together with all moneys at the time on deposit in the New
Notes Account, shall be applied in accordance with the provisions of Section
5.05(d) or 5.05(e), as applicable, at the date or dates fixed by the New
Indenture Trustee.

                  SECTION 9.03. Waiver of Past Events of Default. Prior to the
declaration of the acceleration of the New Notes as provided in Section 9.01,
the Majority New Holders may on behalf of the holders of all the New Notes waive
any past Indenture Default or Event of Default hereunder and its consequences,
except a default (a) in the payment of principal of or interest on any of the
New Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the New Holder of each New Note
affected. In the case of any such waiver, the Issuers, the Guarantor, the New
Indenture Trustee and the New Holders of the New Notes shall be restored to
their former positions and rights hereunder, respectively, and the relevant
Indenture Default or Event of Default shall cease to exist and be deemed to have
been cured and not to have occurred for every purpose of this New Indenture; but
no such waiver shall extend to any subsequent or other Indenture Default or
Event of Default or impair any right consequent thereon.

                  SECTION 9.04. Provisions Relating to Recourse for the New
Notes. The New Indenture Trustee shall not take any of the actions described in
this Section 9.04 until the occurrence of an

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<PAGE>

Event of Default and the acceleration of the New Notes as a result thereof. Upon
the occurrence of an Event of Default and the acceleration of the New Notes as a
result thereof, the New Indenture Trustee shall deliver a written notice to the
Issuers, El Paso and the New Noteholders, and the New Notes will be subject to
payment or redemption in accordance with Section 5.05 and Article XV.

                  (a) [Reserved].

                  (b) [Reserved].

                  (c) New Indenture Trustee's Actions in Event of Proceedings.
Any time the New Indenture Trustee is entitled under this New Indenture to
institute Proceedings to enforce this New Indenture, the New Notes or its rights
under the other Transaction Documents (other than the Note Purchase Agreement
and the Dealer Manager Agreement) the following shall be applicable:

                           (i) subject to Section 2.05(f), the New Indenture
         Trustee in its own name, and as trustee of an express trust, shall be
         entitled and empowered to institute any Proceedings to recover judgment
         against the Issuers or the Guarantor on this New Indenture, the New
         Notes or the El Paso Guarantee for the whole amount due and unpaid
         hereunder or thereunder and may prosecute any such claims or
         Proceedings to judgment or final decree against the Issuers, the
         Guarantor or such other party and collect the moneys adjudged or
         decreed to be payable in any manner provided by law, whether before or
         after or during the pendency of any Proceedings for the enforcement of
         any of the New Indenture Trustee's rights or the rights of the New
         Holders under this New Indenture, and such power of the New Indenture
         Trustee shall not be affected by the exercise of any other right, power
         or remedy for the enforcement of the provisions of this New Indenture;

                           (ii) subject to Section 2.05(f) and except as
         required by applicable law or the terms of such judgment or final
         decree, no recovery of any judgment or final decree by the New
         Indenture Trustee and no levy of any execution under any such judgment
         upon any of the Recourse for the Notes shall in any manner or to any
         extent affect the El Paso Guarantee or any rights, powers or remedies
         of the New Indenture Trustee, but the El Paso Guarantee and all such
         rights, powers and remedies shall continue unimpaired as before;

                           (iii) the New Indenture Trustee in its own name, or
         as trustee of an express trust, as the case may be, or in any one or
         more of such capacities, shall be entitled and empowered to file such
         proofs of claim and other papers or documents as may be necessary or
         advisable in order to have the claims of the New Indenture Trustee and
         of the New Noteholders (whether such claims be based upon the
         provisions of such New Notes or of this New Indenture) allowed in any
         receivership, insolvency, bankruptcy, moratorium, liquidation,
         readjustment, reorganization or any other Proceedings relative to the
         Issuers, the Guarantor or the creditors of the Issuers or the
         Guarantor, as the case may be, and any receiver, assignee, trustee,
         liquidator, sequestrator (or other similar official) in any such
         judicial or other proceeding is hereby authorized to make such payments
         to the New Indenture Trustee and, in the event that the New Indenture
         Trustee shall consent to the making of such payments directly to the
         New Noteholders, to pay to the New Indenture Trustee any amount due to
         it for the reasonable compensation, expenses and disbursements of the
         New Indenture Trustee, its agents and counsel;

                           (iv) subject to Section 11.01(b), all rights of
         action and of asserting claims under this New Indenture or under any of
         the New Notes enforceable by the New Indenture Trustee may be
         enforceable by the New Indenture Trustee to the extent permitted by law
         without possession of any of such New Notes or the production thereof
         at the trial or other Proceedings relative thereto; and

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<PAGE>

                           (v) in case the New Indenture Trustee shall have
         proceeded to enforce any right under this New Indenture by suit,
         foreclosure after judgment or otherwise and such Proceedings shall have
         been discontinued or abandoned for any reason or shall have been
         determined adversely to the New Indenture Trustee, then in every such
         case the Issuers, the Guarantor and the New Indenture Trustee shall, to
         the extent permitted by law, be restored without further act to their
         respective former positions and rights hereunder, and all rights,
         remedies and powers of the New Indenture Trustee shall continue as
         though no such proceedings had been taken, except to the extent
         determined in litigation adversely to the New Indenture Trustee.

                  (d) Waiver of Appraisement, Valuation and Stay. To the extent
they may lawfully do so, the Issuers and the Guarantor for themselves and for
any Person who may claim through or under any of them hereby:

                           (i) agree that neither they nor any such Person will
         plead, claim or in any manner whatsoever take advantage of any
         appraisement, valuation, stay, extension or redemption laws now or
         hereafter in force in any jurisdiction, which may delay, prevent or
         otherwise hinder any remedy available with respect to the Recourse for
         the Notes as provided herein or therein; and

                           (ii) waive all benefit or advantage of any such laws.

                  (e) Bankruptcy. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other Proceeding relative to the Issuers, the Guarantor or the
property of the Issuers, the Guarantor or their respective creditors, the New
Indenture Trustee (irrespective of whether the principal of the New Notes shall
then be due and payable as herein or therein expressed or by declaration or
otherwise and irrespective of whether the New Indenture Trustee shall have made
any demand on the Issuers or the Guarantor or for the payment of overdue
principal, premium, if any, or interest) shall be entitled and empowered, by
intervention in such Proceeding or otherwise:

                           (i) to file and prove a claim for the whole amount of
         principal, premium, if any, and interest owing and unpaid in respect of
         the New Notes or in respect of the El Paso Guarantee, as applicable,
         and to file such other papers or documents as may be necessary or
         advisable in order to have the claims of the New Indenture Trustee
         (including any claims for the reasonable compensation, expenses,
         disbursements and advances of the New Indenture Trustee, its agents and
         counsel) and of the New Holders allowed in such Proceeding; and

                           (ii) to collect and receive any moneys or other
         property payable or deliverable on any such claims and to distribute
         the same; and any custodian, receiver, assignee, trustee, liquidator,
         sequestrator or similar official in any such Proceeding is hereby
         authorized by each New Holder to make such payments to the New
         Indenture Trustee and, in the event that the New Indenture Trustee
         shall consent to the making of such payments directly to the New
         Holders, to pay the New Indenture Trustee any amount due it for the
         reasonable compensation, expenses, disbursements and advances of the
         New Indenture Trustee, its agents and counsels and any other amounts
         due the New Indenture Trustee.

                  Nothing herein contained shall be deemed to authorize the New
Indenture Trustee to authorize or consent to or accept or adopt on behalf of any
New Holder any proposal, plan of reorganization, arrangement, adjustment or
composition or other similar arrangement affecting any of the New Notes or the
rights of any New Holder thereof or to authorize the New Indenture Trustee to
vote in respect of the claim of any New Holders in any such proceeding.

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<PAGE>

                  (f) Remedies Cumulative; Delay or Omission Not a Waiver. To
the extent permitted by law, every remedy given hereunder to the New Indenture
Trustee or to any of the New Noteholders shall not be exclusive of any other
remedy or remedies, and every such remedy shall be cumulative and in addition to
every other remedy given hereunder or now or hereafter given by statute, law,
equity or otherwise. The New Indenture Trustee may exercise all or any of the
powers, rights or remedies given to it hereunder or which may be now or
hereafter given by statute, law, equity or otherwise, in its absolute
discretion. No course of dealing between or among the Issuers, the Guarantor
and/or the New Indenture Trustee or the New Noteholders or any delay or omission
of the New Indenture Trustee or of the New Holders to exercise any right, remedy
or power accruing upon any Event of Default shall impair any right, remedy or
power or shall be construed to be a waiver of any such Event of Default or of
any right of the New Indenture Trustee or of any New Holder or acquiescence
therein, and every right, remedy and power given hereunder to the New Indenture
Trustee or to the New Holders may, to the extent permitted by law, be exercised
from time to time and as often as may be deemed expedient by the New Indenture
Trustee or by the New Holders.

                                    ARTICLE X

     SATISFACTION AND DISCHARGE OF NEW INDENTURE; NOTICE OF CERTAIN EVENTS;
                                UNCLAIMED MONEYS

                  SECTION 10.01. Satisfaction and Discharge of New Indenture. If
at any time (a) the Issuers or the Guarantor shall have paid or caused to be
paid in full the principal of, and premium, if any, and interest on, all the
Outstanding New Notes hereunder or (b) the Issuers shall have delivered to the
New Indenture Trustee for cancellation all Outstanding New Notes theretofore
authenticated, the New Indenture Trustee, at the reasonable cost and expense of
the Issuers, shall execute proper instruments acknowledging the satisfaction of
and discharging this New Indenture and shall deliver such instruments to El Paso
and Investor. The Issuers and the Guarantor, jointly and severally, agree to
reimburse or cause the reimbursement of the New Indenture Trustee for any
documented costs or expenses thereafter reasonably and properly incurred and to
compensate the New Indenture Trustee for any services thereafter reasonably and
properly rendered by the New Indenture Trustee in connection with this New
Indenture or the New Notes.

                  SECTION 10.02. [Reserved].

                  SECTION 10.03. Repayment of Moneys and Transfer of Eligible
Investments Held by New Indenture Trustee. Following the satisfaction and
discharge of this New Indenture, all moneys and Financial Investments then held
by the New Indenture Trustee under the provisions of this New Indenture
(including all moneys and Financial Investments then held in the New Notes
Account) shall be promptly repaid or, as the case may be, assigned or
transferred (i) to the Indenture Trustee or the Fiscal Agent, as applicable,
prior to the Indenture Termination Date or (ii) to the Class B Shareholder on or
after the Indenture Termination Date, and thereupon the New Indenture Trustee
shall be released from all further liability with respect to such moneys and
such Financial Investments.

                  SECTION 10.04. Return of Moneys Held by New Indenture Trustee.
Any moneys deposited with or paid to the New Indenture Trustee or any Paying
Agent in trust for the payment of the principal of, and premium, if any, or
interest on, any New Note and not applied but remaining unclaimed for two years
after the date upon which such principal, premium, if any or interest shall have
become due and payable shall be repaid to or for the account of (i) the
Indenture Trustee or the Fiscal Agent, as applicable, prior to the Indenture
Termination Date or (ii) the Class B Shareholder, on or after the Indenture
Termination Date, in each case, by the New Indenture Trustee, the receipt of
such repayment to be confirmed promptly in writing by or on behalf of (i) the
Indenture Trustee or the Fiscal Agent, as applicable, or (ii) the Class B
Shareholder, as applicable, and, to the extent permitted by law, the New

                                       47
<PAGE>

Holder of such New Note shall thereafter look only to the Issuers and the
Guarantor for any payment which such New Holder may be entitled to collect, and
all liability of the New Indenture Trustee or such Paying Agent with respect to
such moneys shall thereupon cease.

                  SECTION 10.05. [Reserved].

                                   ARTICLE XI

                      CONCERNING THE NEW INDENTURE TRUSTEE

                  SECTION 11.01. Duties of the New Indenture Trustee; Certain
Rights of the New Indenture Trustee.

                  (a) The Bank of New York agrees to act, and is hereby
appointed by the Issuers to act, as the New Indenture Trustee under this New
Indenture. The New Indenture Trustee is hereby authorized and empowered after
the acceleration of the New Notes in accordance with this New Indenture, to the
extent permitted under and in compliance with the Transaction Documents and
applicable law and regulations, to commence enforcement proceedings with respect
to the Recourse for the Notes.

                  (b) The New Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this New Indenture
and the other Transaction Documents to which it is a party, and no implied
duties shall be read into this New Indenture or the other Transactions
Documents. Neither the New Indenture Trustee, its agents nor its Affiliates
shall be liable for any act or omission made in connection with this New
Indenture or the other Transaction Documents except in the case of its gross
negligence, bad faith or willful misconduct. In furtherance, and not in
limitation, of the New Indenture Trustee's rights, duties and protections
hereunder and unless otherwise specifically provided in this New Indenture, the
New Indenture Trustee shall (subject to the terms hereof and of the other
Transaction Documents) grant such consents, make such requests and
determinations and take or refrain from taking such actions (including, without
limitation, actions with respect to an Event of Default, of which the New
Indenture Trustee has written notice or actual knowledge) as are permitted (but
not expressly required) to be granted, made or taken by the New Indenture
Trustee under the Transaction Documents, as the Majority New Holders shall
direct in writing. No provision of this New Indenture shall be construed to
relieve the New Indenture Trustee from liability for its own grossly negligent
action, its own grossly negligent failure to act or its own misconduct, its
grossly negligent failure to perform its obligations in compliance with this New
Indenture or any liability which would be imposed by reason of its willful
misfeasance or bad faith; provided, however, that:

                           (i) the duties and obligations of the New Indenture
         Trustee shall be determined solely by the express provisions of this
         New Indenture, the New Indenture Trustee shall not be personally liable
         except for the performance of such duties and obligations as are
         specifically set forth in this New Indenture, no implied covenants,
         duties or obligations shall be read into this New Indenture against the
         New Indenture Trustee and the New Indenture Trustee may conclusively
         rely, as to the truth of the statements and the correctness of the
         opinions expressed therein, upon any certificates or opinions furnished
         to the New Indenture Trustee and conforming to the requirements of this
         New Indenture which it reasonably believes in good faith to be genuine
         and to have been duly executed by the proper authorities respecting any
         matters arising hereunder;

                           (ii) the New Indenture Trustee shall not be
         personally liable for an error of judgment made in good faith by an
         Authorized Officer or Authorized Officers of the New Indenture Trustee,
         unless the New Indenture Trustee was grossly negligent or acted in bad
         faith or with willful misfeasance;

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<PAGE>

                           (iii) the New Indenture Trustee shall not be
         personally liable with respect to any action taken, suffered or omitted
         to be taken by it in good faith in accordance with the direction of the
         Majority New Noteholders or the Issuers, relating to the time, method
         and place of conducting any proceeding for any remedy available to the
         New Indenture Trustee, or exercising any trust or power conferred upon
         the New Indenture Trustee, under this New Indenture; and

                           (iv) no provision of this New Indenture or the other
         Transaction Documents shall require the New Indenture Trustee to expend
         or risk its own funds or otherwise incur any financial liability in the
         performance of any of its duties hereunder or in the exercise of any of
         its rights or powers if it shall have reasonable grounds for believing
         that repayment of such funds or adequate indemnity reasonably
         satisfactory to it against such risk or liability is not reasonably
         assured to it.

                  (c) If an Event of Default shall have occurred and be
         continuing, the New Indenture Trustee shall exercise the same degree of
         care in exercising the rights and powers vested in it hereunder as a
         prudent person would exercise or use under the same circumstances in
         the conduct of such person's own affairs.

                  (d) Certain Rights of New Indenture Trustee.

                           (i) The New Indenture Trustee may request and rely
         upon, and shall be protected in acting or refraining from acting upon,
         and shall not be bound to make any investigation into the facts or
         matters stated in, any resolution, certificate, statement, instrument,
         opinion, report, notice, request, consent, order, note, guaranty or
         other paper or document believed by it to be genuine and to have been
         signed or presented by the proper party or parties, but the New
         Indenture Trustee in its sole discretion may make such further inquiry
         or investigation into such facts or matters as it may see fit;

                           (ii) The New Indenture Trustee shall be under no
         obligation to exercise any of the rights or powers vested in it by this
         New Indenture or any of the other Transaction Documents at the request,
         order or direction of any of the New Holders, including the Majority
         New Holders, pursuant to the provisions of this New Indenture or any of
         the other Transaction Documents, unless (A) such request, order or
         direction shall not be in conflict with any Applicable Law or this New
         Indenture or expose the New Indenture Trustee to any personal liability
         for which it is not, in its sole discretion, adequately indemnified and
         (B) such New Holders or other entities shall have furnished to the New
         Indenture Trustee reasonable security or indemnity reasonably
         satisfactory to the New Indenture Trustee (including reasonable
         advances) against the costs, expenses and liabilities (including,
         without limitation, attorneys' fees and expenses) which might be
         incurred therein or thereby;

                           (iii) As a condition to the taking or omitting of any
         action by it hereunder, the New Indenture Trustee may consult with
         counsel, accountants or other experts and the advice of such counsel,
         accountants or other experts or any Opinion of Counsel or Officer's
         Certificate shall be full and complete authorization and protection in
         respect of any action taken or omitted by it hereunder in good faith
         and in reliance thereon;

                           (iv) For all purposes under this New Indenture, the
         New Indenture Trustee shall not be deemed to have notice or knowledge
         of any Indenture Default, Event of Default or Specified Equity Event
         (other than the Events of Default specified in Section 9.01(a) and (b))
         unless an Authorized Officer of the New Indenture Trustee assigned to
         and working in the Corporate Trust Office has actual knowledge thereof
         or unless written notice of such an Indenture Default, Event of Default
         or Specified Equity Event is received by the New Indenture Trustee at

                                       49
<PAGE>

         the Corporate Trust Office and such notice references the New Notes
         generally, the Issuers, the El Paso Guarantee or this New Indenture;
         and

                           (v) In no event shall the New Indenture Trustee be
         liable for the selection of investments or investment losses incurred
         thereon. The New Indenture Trustee shall have no liability in respect
         of losses incurred as a result of the liquidation of any investment
         prior to its stated maturity other than as a result of its negligence,
         bad faith or willful misconduct.

                  (e) In the event that the New Indenture Trustee is also acting
         as a Paying Agent and/or Registrar hereunder, the rights and protection
         afforded to the New Indenture Trustee pursuant to this Article XI shall
         also be afforded to such Paying Agent and/or Registrar.

                  SECTION 11.02. Performance of New Indenture Trustee's Duties.

                  (a) Neither the New Indenture Trustee nor its agents shall be
liable to any Person for any delay in or failure of payment or for any
nonperformance or default on the part of any party (other than the New Indenture
Trustee) under the Transaction Documents other than as a result of its
negligence, bad faith or willful misconduct.

                  (b) Subject to Section 2.05(f), the New Indenture Trustee may,
in the execution and exercise of all or any of the trusts, powers, authorities
and discretions vested in it by the Transaction Documents, act by Authorized
Officers or an Authorized Officer of the New Indenture Trustee or its
Affiliates, and the New Indenture Trustee may also whenever it deems it
expedient in the interests of the New Noteholders, whether by power of attorney
or otherwise, delegate to any Person or fluctuating body of Persons all or any
of the trusts, powers, authorities and discretions vested in it by the
Transaction Documents, and any such delegation may be made upon such terms and
conditions and subject to such regulations (including power to subdelegate) as
the New Indenture Trustee may deem fit, and it shall not in any way or to any
extent be responsible for any loss incurred by any misconduct or default on the
part of such delegate or subdelegate; provided that the New Indenture Trustee
shall exercise reasonable care in the selection of such delegate and, subject to
Section 11.03, shall continue to be responsible for the execution and exercise
of all or any of the trusts, powers, authorities and discretions vested in it by
the Transaction Documents. The New Indenture Trustee shall give prompt notice to
the Issuers and El Paso of the appointment (and termination thereof) of any
delegate as aforesaid and shall procure that any delegate shall also give prompt
notice to the Issuers and El Paso of any subdelegate.

                  (c) Neither the New Indenture Trustee nor any director or
officer of the New Indenture Trustee shall be precluded from underwriting,
guaranteeing the subscription of or subscribing for some or all of the New Notes
with or without a commission or other remuneration or from purchasing or
otherwise acquiring, holding, dealing in or disposing of the New Notes or any of
them or any notes, bonds, debentures, debenture stock, shares or securities
whatsoever of, or from acting as banker (including, without limitation, engaging
in normal banking, trust and investment banking business), paying agent or
process agent for or with, the Issuers and any Affiliate thereof or from
otherwise at any time contracting or entering into any financial or other
transactions with the Issuers or any Affiliate thereof or from accepting and
holding the office of indenture trustee for the holders of any securities of the
Issuers or any Affiliate thereof.

                  SECTION 11.03. Resignation and Removal; Appointment of
Successor New Indenture Trustee.

                  (a) The New Indenture Trustee (i) may resign and be discharged
of the trust created by this New Indenture by giving 30 days' written notice to
the Issuers, the New Holders and the Guarantor and (ii) shall resign if it fails
to meet the requirements of Section 11.09, and such resignation shall take
effect upon receipt by the New Indenture Trustee of an instrument of acceptance
of appointment executed by a successor New Indenture Trustee as herein provided
in Section 11.04.

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<PAGE>

                  (b) The New Indenture Trustee may be removed for cause upon
written notice by the Majority New Holders delivered to the New Indenture
Trustee, the Issuers and El Paso.

                  (c) If at any time the New Indenture Trustee shall resign or
be removed or otherwise become incapable of acting or if at any time a vacancy
shall occur in the office of the New Indenture Trustee for any other cause,
Investor shall use its best efforts to locate and recommend a qualified
successor New Indenture Trustee or New Indenture Trustees, and a successor New
Indenture Trustee or New Indenture Trustees may be appointed by Investor
(whether or not such successor or successors shall have been located or
recommended by Investor) upon written notice to the New Noteholders and the New
Indenture Trustee. In the event that no such successor New Indenture Trustee (or
New Indenture Trustees) is appointed by Investor within 30 days after the giving
of a notice of resignation, the New Indenture Trustee may request a court to
make such appointment. Every successor New Indenture Trustee appointed pursuant
to this Section 11.03 shall be a corporation or association organized under the
law of the United States or any State thereof having a corporate trust
department and a combined capital and surplus of at least $150,000,000 and a
long-term debt rating of at least "A3" by Moody's and at least "A-" by S&P and
Fitch and otherwise satisfying the criteria set forth in Section 11.09, if there
be such an institution willing and able to accept the trust upon reasonable or
customary terms.

                  SECTION 11.04. Acceptance of Appointment by Successor New
Indenture Trustee. Any successor New Indenture Trustee appointed as provided in
Section 11.03 shall execute, acknowledge and deliver to the Issuers and to its
predecessor New Indenture Trustee an instrument accepting such appointment
hereunder, and, subject to the provisions of Section 11.03, thereupon the
resignation or removal of the predecessor New Indenture Trustee shall become
effective and such successor New Indenture Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as New Indenture Trustee herein; but, nevertheless, at the written
direction of the Majority New Holders or written request of the successor New
Indenture Trustee, the New Indenture Trustee ceasing to act shall execute and
deliver an instrument transferring to such successor New Indenture Trustee all
the rights and powers of the New Indenture Trustee so ceasing to act.

                  SECTION 11.05. Merger or Consolidation of New Indenture
Trustee. Any corporation into which the New Indenture Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the New Indenture Trustee shall
be a party shall be the successor of the New Indenture Trustee hereunder;
provided that such corporation shall be qualified under the provisions of
Section 11.03(c), without the execution or filing of any paper or any further
act on the part of any of the parties hereto or the holders, notwithstanding
anything contained herein to the contrary.

                  SECTION 11.06. Certain Procedural Matters. Subject to Sections
2.05(f) and 13.01, the New Indenture Trustee, in its own name and as New
Indenture Trustee of an express trust, at the written direction of the Majority
New Holders, shall be entitled and empowered to institute any Proceeding for the
collection of any amounts due and unpaid or the enforcement of any other rights
of the holders and prosecute any such action or proceeding to judgment or final
decree.

                  SECTION 11.07. New Indenture Trustee Fees and Indemnification.

                  (a) The Issuers and the Guarantor, jointly and severally,
covenant and agree to pay or reimburse the New Indenture Trustee upon its
request for the New Indenture Trustee Fee and the documented expenses,
disbursements and advances reasonably and properly incurred or made by the New
Indenture Trustee in accordance with any of the provisions of this New Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all Persons not regularly in its employ, whether or not such
expenses are incurred in connection with any Opinion of Counsel required or
permitted to be obtained by the Indenture Trustee) ("New Indenture Trustee

                                       51
<PAGE>

Expenses"), except that the Issuers and the Guarantor shall not pay or reimburse
the New Indenture Trustee for any expense, disbursement or advance as may arise
from the gross negligence, willful misfeasance or bad faith of the New Indenture
Trustee or the Person to be indemnified. The New Indenture Trustee agrees that
all New Indenture Trustee Fees and New Indenture Trustee Expenses are for the
account of the Issuers and the Guarantor, and it shall have no Lien or claim on
the Recourse for the Notes in respect thereof. The New Indenture Trustee and any
director, officer, employee or agent of the New Indenture Trustee shall be
indemnified by the Issuers and the Guarantor, jointly and severally, and held
harmless against any loss, liability, claim or expense incurred in connection
with any legal action or claim, including any pending or threatened legal action
or claim, relating to this New Indenture or the New Notes or the performance of
any of the New Indenture Trustee's duties hereunder, other than any loss,
liability, claim or expense incurred by reason of willful misfeasance, bad faith
or gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder; provided that (i) with
respect to any such legal action the New Indenture Trustee shall have given the
Issuers and the Guarantor written notice thereof promptly after the New
Indenture Trustee shall have written notice or actual knowledge thereof and (ii)
the Issuers and the Guarantor shall defend such legal action and the New
Indenture Trustee shall cooperate and consult fully with the Issuers and the
Guarantor in preparing such defense; provided, however, that any failure to
notify the Issuers and the Guarantor of such legal action shall not diminish the
obligations of the Issuers and the Guarantor hereunder. Such indemnity shall
survive the termination or discharge of this New Indenture and the resignation
or removal of the New Indenture Trustee. Any payment in respect of the New
Indenture Trustee Fee, New Indenture Trustee Expenses or the foregoing indemnity
made by the Issuers and/or the Guarantor to the New Indenture Trustee shall be
from the Issuers' and/or the Guarantor's own funds, without reimbursement from
the Recourse for the Notes therefor.

                  (b) The New Indenture Trustee shall be required to pay all
expenses, except as expressly provided herein, incurred by it or its agents in
connection with its activities hereunder and shall be entitled to reimbursement
therefor as provided in this Section 11.07. The New Indenture Trustee shall in
no event acquire any claim against the New Noteholders, the Issuers or the
Guarantor by reason of non-receipt of any fees and expenses, and the New
Indenture Trustee shall, unless and until the effective date of any resignation
of the New Indenture Trustee under Section 11.03, continue to perform its
obligations hereunder notwithstanding such non-receipt. When the New Indenture
Trustee incurs expenses or renders services in connection with an Event of
Default described in Section 9.01(j), such expenses (including the reasonable
fees and expenses of its counsel and agents) and the compensation for such
services are intended to constitute expenses of administration under any
bankruptcy law or law relating to creditors' rights generally.

                  SECTION 11.08. Information. The New Indenture Trustee will
promptly deliver to the New Noteholders, the Rating Agencies and El Paso any
notices, including notices of Events of Default, financial statements, officer's
certificates or other forms of communication that it receives pursuant to the
terms of this New Indenture.

                  SECTION 11.09. Eligibility Requirements for New Indenture
Trustee. The New Indenture Trustee hereunder shall at all times be a corporation
or association having a corporate trust office in the State of Delaware or New
York and organized and doing business under the laws of such state or the United
States of America, authorized under such laws to exercise corporate trust powers
(i) having a combined capital and surplus of at least $150,000,000, (ii) having
a long-term debt rating of at least "A3" by Moody's and at least "A-" by S&P and
Fitch and (iii) subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 11.09
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the New Indenture Trustee
shall cease to be eligible in accordance with the

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<PAGE>

provisions of this Section 11.09, the New Indenture Trustee shall resign
immediately in the manner and with the effect specified in Section 11.03.

                  SECTION 11.10. New Indenture Trustee Not Liable for New Notes.
The recitals contained herein shall be taken as the statements of the Issuers,
and the New Indenture Trustee assumes no responsibility for their correctness.
Except for the Certificate of Authentication on the New Notes, the New Indenture
Trustee makes no representations as to the validity or sufficiency of the New
Notes or any related Transaction Documents. The New Indenture Trustee shall be
responsible for any funds that may be deposited with it pursuant to Section 5.02
and for payment of amounts deposited therein in accordance with Section 5.05.
The New Indenture Trustee shall have no duty to monitor the performance of the
Issuers nor shall it have any liability in connection with the malfeasance or
nonfeasance by the Issuers. The New Indenture Trustee shall have no liability in
connection with compliance by the Issuers with statutory or regulatory
requirements related to the Transaction Documents or any related instrument or
agreement.

                  SECTION 11.11. New Indenture Trustee May Own New Notes. The
Bank of New York, in its capacity as the New Indenture Trustee, in its
individual or in any other capacity, and any of its Affiliates may become the
owner or pledgee of New Notes with the same rights as it would have if it were
not the New Indenture Trustee.

                  SECTION 11.12. Maintenance of Office or Agency. The New
Indenture Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where New Notes may be surrendered for
payment, registration of transfer or exchange and where notices and demands to
or upon the New Indenture Trustee in respect of the New Notes and this New
Indenture may be served. The New Indenture Trustee will give prompt written
notice to the New Noteholders of any change in the location of the Note Register
or any such office or agency.

                  SECTION 11.13. Appointment of Co-Indenture Trustee. The New
Indenture Trustee, with the consent of the Issuers and only for the purpose of
meeting the legal requirements, if any, of certain jurisdictions, shall have the
power to appoint co-indenture trustees. In the event of such appointment, all
rights, powers and duties and obligations conferred or imposed upon the New
Indenture Trustee by this New Indenture will be conferred or imposed upon the
co-indenture trustee and such co-indenture trustee jointly or, in any
jurisdiction where the New Indenture Trustee is incompetent or unqualified to
perform certain acts, singly shall exercise and perform such rights, powers,
duties and obligations solely at the discretion of the New Indenture Trustee.

                  SECTION 11.14. [Reserved].

                  SECTION 11.15. [Reserved].

                  SECTION 11.16. [Reserved].

                                   ARTICLE XII

                           SUPPLEMENTAL NEW INDENTURES

                  SECTION 12.01. Supplemental New Indentures Without Consent of
New Noteholders. The Issuers, the Guarantor and the New Indenture Trustee may
from time to time and at any time enter into an indenture or indentures
supplemental hereto for one or more of the following purposes:

                  (a) to cure any ambiguity or to correct or supplement any
provision contained herein, in the New Notes or the El Paso Guarantee or in any
supplemental indenture which may be defective or

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<PAGE>

inconsistent with any other provision contained herein or in the New Notes or in
any supplemental indenture;

                  (b) to make such other provisions in regard to matters or
questions arising under this New Indenture, the New Notes or the El Paso
Guarantee or any supplemental indenture as the Issuers, the Guarantor and the
New Indenture Trustee may deem necessary or desirable and which shall not
adversely affect the rights or obligations of the New Noteholders;

                  (c) to secure the El Paso Guarantee pursuant to the
requirements of Section 7.01(ff) or otherwise;

                  (d) in accordance with Section 7.01(dd) only, to evidence the
succession of another Person to the Guarantor and the assumption by any such
successor of the covenants of the Guarantor herein, in the New Notes and in the
El Paso Guarantee; or

                  (e) to add to the covenants of the Guarantor or the Events of
Default relating to the Guarantor for the benefit of the New Holders of the New
Notes or to surrender any right or power herein conferred upon the Guarantor.

                  The New Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further appropriate
agreements and stipulations which may be therein contained, but the New
Indenture Trustee shall not be obligated to enter into any such supplemental
indenture which affects the New Indenture Trustee's own rights, duties or
immunities under this New Indenture, the other Transaction Documents or
otherwise.

                  Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the holders of any of the
New Notes at the time Outstanding, notwithstanding any of the provisions of
Section 12.02.

                  SECTION 12.02. Supplemental New Indentures With Consent of New
Noteholders. With the consent (evidenced as provided in Article XIII) of the
Majority New Holders, the Issuers, the Guarantor and the New Indenture Trustee
may, from time to time and at any time, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this New Indenture, the New
Notes or the El Paso Guarantee endorsed thereon or any supplemental indenture or
of modifying in any manner the rights of the holders of the New Notes; provided
that no such supplemental indenture shall (a) extend the final maturity of any
New Note or the time of payment of any principal thereof or reduce the principal
amount thereof or any premium thereon or extend the time of payment of any
interest thereon or reduce any amount payable on redemption thereof or reduce
the amount of principal that would be due and payable upon the occurrence of an
Event of Default or impair or affect the rights of any New Noteholder to
institute suit for the payment thereof, (b) increase or decrease the Note Rate,
(c) reduce any amount required to be collected or retained in the New Notes
Account, (d) reduce the aforesaid percentage of New Notes the consent of the New
Holders of which is required for any supplemental indenture or (e) release the
Guarantor from its obligations under the El Paso Guarantee, other than in
accordance with this New Indenture, in each case without the consent of the
holders of each New Note so affected.

                  Upon the request of the Issuers, accompanied by a copy of the
supplemental indenture, and upon the filing with the New Indenture Trustee of
evidence of the consent of the Majority New Holders or any greater percentage of
New Holders as required by this Section 12.02 and other documents, if any,
required by this Section 12.02, the New Indenture Trustee shall join with the
Issuers and the Guarantor in the execution of such supplemental indenture unless
such supplemental indenture affects the New Indenture Trustee's own rights,
duties or immunities under this New Indenture or otherwise, in

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<PAGE>

which case the New Indenture Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.

                  It shall not be necessary for the consent of the New
Noteholders under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.

                  SECTION 12.03. Effect of Supplemental New Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
New Indenture and the New Notes (including the El Paso Guarantee endorsed
thereon) shall be and be deemed to be modified and amended in accordance
therewith, and the respective rights, limitations of rights, obligations, duties
and immunities under this New Indenture of the New Indenture Trustee, the
Issuers, the Guarantor and the New Noteholders shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
New Indenture for any and all purposes.

                  SECTION 12.04. Documents to Be Given to New Indenture Trustee.
The New Indenture Trustee, subject to the provisions of Sections 12.01 and
12.02, shall be entitled to receive one or more Officer's Certificate or
Certificates and Opinion or Opinions of Counsel as conclusive evidence that any
such supplemental indenture complies with the applicable provisions of this New
Indenture.

                  SECTION 12.05. Notation on New Notes in Respect of
Supplemental New Indentures. New Notes (including the El Paso Guarantee endorsed
thereon) authenticated and delivered after the execution of any supplemental
indenture pursuant to the provisions of this Article may bear a notation in form
and manner approved by the New Indenture Trustee as to any matter provided for
by such supplemental indenture. If the Issuers shall so determine, new New Notes
(including the El Paso Guarantee endorsed thereon) so modified as to conform to
any modification of this New Indenture contained in any such supplemental
indenture may be prepared by the Issuers at their expense, authenticated by the
New Indenture Trustee and delivered in exchange for the New Notes then
Outstanding.

                                  ARTICLE XIII

                           CONCERNING THE NEW HOLDERS

                  SECTION 13.01. Control by Majority New Holders. Subject to the
provisions of Section 2.05(f), the Majority New Noteholders shall have the right
to direct the New Indenture Trustee, in writing, to direct the time, method and
place of conducting any proceeding for any remedy available to the New Indenture
Trustee or exercising any trust or power conferred on the New Indenture Trustee;
provided that to the extent that both (i) the Noteholders and/or the Class A
Shareholder and (ii) the New Noteholders have given directions with respect to
the Asset Remedy or in the case of the New Noteholders, asset sales in
accordance with Section 2.05(f) of this New Indenture, the directions given by
the Noteholders or the Class A Shareholder (as determined pursuant to the
Indenture) shall govern; provided further that:

                  (a) the New Indenture Trustee shall not be required to act if
the New Indenture Trustee shall have received an Opinion of Counsel that the
action so directed may not lawfully be taken or would be in conflict with this
New Indenture;

                  (b) if the payment within a reasonable time to the New
Indenture Trustee of the reasonable costs, expenses or liabilities likely to be
incurred by it in the taking, suffering or omission of

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<PAGE>

such action, in the reasonable opinion of the New Indenture Trustee, is not
assured to the New Indenture Trustee by the terms of this New Indenture, the New
Indenture Trustee may require reasonable security or indemnity (including
reasonable advances) against any such expense or liability as a condition to the
taking, suffering or omission of any such action; and

                  (c) the New Indenture Trustee may take any other reasonable
action deemed proper by the New Indenture Trustee that is consistent with such
direction; provided, however, that, subject to Section 11.01, the New Indenture
Trustee need not take any action that is discretionary or that it determines
might impose liability on the New Indenture Trustee for which it is not, in its
sole discretion, adequately indemnified.

                  SECTION 13.02. Evidence of Action Taken by New Holders.
Whenever in this New Indenture or in any other Transaction Document it is
provided that the Majority New Holders may take any action (including the making
of any demand or request, the giving of any notice, direction, instruction,
consent or waiver or the taking of any other action), the fact that at the time
of taking any such action the Majority New Holders have joined therein shall be
evidenced in writing by one or more instruments of similar tenor executed by
such New Holders in person or by agent or proxy appointed in writing. Such
action by the Majority New Holders shall become effective when such instrument
or instruments are delivered to and received by the New Indenture Trustee. The
New Indenture Trustee shall thereafter notify the Issuers and El Paso of the
effectiveness of such action.

                  SECTION 13.03. Proof of Execution of Instruments. The fact and
date of the execution of any instrument by a New Holder or his agent or proxy
may be proved by (i) the certificate of any notary public or other officer of
any jurisdiction within or without the United States authorized to take
acknowledgments of deeds to be recorded in such jurisdiction certifying that the
person executing such instrument acknowledged to him the execution thereof or
(ii) an affidavit of a witness to such execution sworn to before any such notary
or other such officer. Where such execution is by or on behalf of any legal
entity other than an individual, such certificate or affidavit shall also
constitute proof of the authority of the individual executing the same.

                  SECTION 13.04. New Notes Owned by the Issuers. In determining
whether the holders have concurred in any direction, request, demand,
authorization, notice, consent or waiver under this New Indenture, New Notes
which are owned by the Issuers, El Paso, any other obligor upon the New Notes or
any of their respective Affiliates shall be disregarded in both the numerator
and denominator of the fraction used to determine the requisite percentage,
except that, in determining whether the New Indenture Trustee shall be protected
in relying upon such direction, request, demand, authorization, notice, consent
or waiver, only New Notes which the New Indenture Trustee actually knows to be
so owned shall be so disregarded. New Notes so owned which have been pledged in
good faith shall not be so disregarded if the pledgee establishes to the
satisfaction of the New Indenture Trustee the pledgee's right so to act with
respect to such New Notes and the pledgee is not Investor, the Co-Issuer, El
Paso, any other obligor upon the New Notes or any of their respective
Affiliates.

                  SECTION 13.05. Right of Revocation of Action Taken. At any
time prior to (but not later than) the evidencing to the New Indenture Trustee,
as provided in Section 13.02, of the taking of any action by the holders, any
New Holder of a New Note, the serial number of which is shown by the evidence to
be included in those New Notes the holders of which have consented to such
action, may revoke such action insofar as it concerns such New Note by filing
written notice with the New Indenture Trustee at the Corporate Trust Office and
upon proof of holding as provided in Section 2.05. Unless revoked pursuant to
the foregoing provisions, any such action taken by a New Holder shall be
conclusive and binding upon such New Holder and upon all future holders and
owners of such New Note and of any New Note issued in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such New Note. Except as otherwise provided herein, any action taken by

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<PAGE>

the Majority New Holders shall be conclusive and binding upon the Issuers, the
Guarantor, the New Indenture Trustee and the holders of all New Notes.

                                   ARTICLE XIV

                               OPTIONAL REDEMPTION

                  SECTION 14.01. Optional Redemption.

                  (a) So long as the maturity of the New Notes has not been
accelerated as a result of an Event of Default, the New Notes:

                           (i) may be redeemed in whole or in part at the option
                  of the Issuers at any time, and

                           (ii) may be redeemed by the Issuers in whole or in
                  part at the option of the Issuers to the extent of funds
                  available therefor (provided that, if Garnet elects to
                  exercise the Diamond Purchase Option or Diamond Retirement
                  Option and EPED Holding elects to exercise the Topaz Purchase
                  Option or Topaz Retirement Option, the New Notes may be
                  redeemed by the Issuers pursuant to clause (C) below in whole
                  and not in part), if any one or more of the following occurs:

                                    (A) the Class B Shareholder causes funds to
                  be irrevocably deposited with the New Indenture Trustee to be
                  used to cause an Optional Redemption,

                                    (B) the Class A Shareholder causes funds to
                  be irrevocably deposited with the New Indenture Trustee to be
                  used to cause an Optional Redemption, or

                                    (C) the Indenture Trustee distributes funds
                  to be irrevocably deposited with the New Indenture Trustee to
                  be used to cause an Optional Redemption.

         In each case described in clause (ii), the Issuers shall exercise their
         option and redeem the New Notes to the extent of the amounts deposited
         with the New Indenture Trustee (subject to Section 14.01(c)), unless
         the Class A Shareholder shall have elected to cause the funds so
         deposited to be invested in eligible Financial Investments having
         maturities that coincide with required payments on the New Notes;
         provided that, if the funds so deposited are not sufficient to purchase
         Financial Investments the payments on which are sufficient to cover the
         required payments on the New Notes, the Class A Shareholder shall be
         entitled to make the election described in this Section 14.01(a) only
         if it deposits or causes to be deposited with the New Indenture Trustee
         the amounts necessary such that the total amount deposited with the New
         Indenture Trustee and invested in such eligible Financial Investments
         are sufficient to purchase Financial Investments the payments on which
         are sufficient to cover the required payments on the New Notes;
         provided, further, that, if the Class A Shareholder makes such
         election, none of the Class B Shareholder, the Issuers, the New
         Indenture Trustee or the Indenture Trustee shall have any further
         obligations under this Section 14.01(a).

                  (b) Any such redemption of the New Notes (an "Optional
Redemption") may be made in whole or in part (or in whole but not in part if
Garnet elects to exercise the Diamond Purchase Option or Diamond Retirement
Option and EPED Holding elects to exercise the Topaz Purchase Option or Topaz
Retirement Option) in minimum denominations of $100,000 and integral multiples
of $1,000 in excess thereof on any Business Day specified in the applicable
Notice of Optional Redemption; provided that, in the case of an Optional
Redemption pursuant to Section 14.01(a)(ii)(C) arising from Garnet electing to
exercise the Diamond Purchase Option or Diamond Retirement Option and EPED
Holding electing to

                                       57
<PAGE>

exercise the Topaz Purchase Option or Topaz Retirement Option, such date shall
be the Retirement Date or Purchase Date, as applicable, set forth in each
Retirement Notice or Purchase Option Notice, as applicable, delivered to the
Indenture Trustee pursuant to the Topaz LLC Agreement and the Diamond LLC
Agreement (any such date, the "Optional Redemption Date") at the Optional
Redemption Price.

                  (c) Any Optional Redemption pursuant to Section 14.01(a) shall
occur at such time as (i) the New Indenture Trustee shall have received written
notice from Investor specifying that the amounts deposited into the New Notes
Account are to be used to cause an Optional Redemption, (ii) the aggregate
amount of funds irrevocably deposited with the New Indenture Trustee is
sufficient to effect such redemption and (iii) appropriate notice is given in
accordance with Section 14.02.

                  (d) [Reserved].

                  (e) The "Optional Redemption Price" for each New Note redeemed
on any Optional Redemption Date will be equal to the sum of: (i) accrued and
unpaid interest (including the Default Amount, if any) on the principal amount
to be prepaid to the Optional Redemption Date and (ii) the greater of: (a) 100%
of the Outstanding principal amount of such New Note (or the portion thereof
being prepaid) and (b) the sum of the present values of the remaining scheduled
payments of principal (or the portion thereof being prepaid) and interest
thereon (without duplication of interest paid in clause (i)) discounted to the
Optional Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the applicable Treasury Yield plus 50
basis points.

                  SECTION 14.02. Notice of Optional Redemption. Notice of an
Optional Redemption (a "Notice of Optional Redemption") of the New Notes
pursuant to Section 14.01 shall be given by the Issuers or, at the Issuers'
request, by the New Indenture Trustee, if the Issuers shall have delivered to
the New Indenture Trustee, at least 45 days prior to the Optional Redemption
Date (or such lesser number of days as shall be acceptable to the New Indenture
Trustee), an Issuers' Certificate requesting that the New Indenture Trustee give
a Notice of Optional Redemption. In the case of an Optional Redemption pursuant
to Section 14.01(a)(ii)(A), the New Indenture Trustee shall give the Notice of
Optional Redemption upon receipt of notice from the Class B Shareholder that an
Optional Redemption is to be effected pursuant to the foregoing clause. In the
case of an Optional Redemption pursuant to Section 14.01(a)(ii)(C), the New
Indenture Trustee shall give the Notice of Optional Redemption upon receipt of
notice from the Indenture Trustee that an Optional Redemption is to be effected
pursuant to the foregoing clause. Any Notice of Optional Redemption shall be
given to each New Noteholder by first class mail or airmail, postage prepaid, at
their last addresses as they shall appear upon the Note Register. Any notice
which is mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the New Holder receives the notice. Once
Notice of Optional Redemption is mailed in accordance with this Section 14.02,
New Notes called for redemption become irrevocably due and payable on the
Optional Redemption Date at the Optional Redemption Price. A Notice of Optional
Redemption may not be conditional. Failure to give such notice by mail or any
defect in the notice to any New Noteholder shall not affect the validity of the
proceedings for the redemption with respect to the New Notes held by other New
Noteholders. Each Notice of Optional Redemption shall be given at least 30 days
but not more than 60 days before the applicable Optional Redemption Date and
shall specify (a) the Optional Redemption Date; (b) the formula by which the
Optional Redemption Price will be calculated on the Optional Redemption Date and
the amount of accrued and unpaid interest, if any, to be due as of the Optional
Redemption Date as a part of the Optional Redemption Price; (c) that, on the
Optional Redemption Date, the Optional Redemption Price will become due and
payable upon each such New Note to be redeemed and that interest shall cease to
accrue on such New Note on and after such date; (d) if any New Note is being
redeemed in part, the portion of the principal amount of such New Note to be
redeemed and that, after the Optional Redemption Date, upon surrender of such
New Note, a new New Note or new New Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original New Note;
(e) the name and address of the Paying Agent; (f) that New Notes called for
redemption must be surrendered to the Paying Agent to collect the Optional
Redemption Price; (g) the

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paragraph of the New Notes and/or the Section of this New Indenture pursuant to
which the New Notes called for redemption are being redeemed; and (h) that no
representation is made as to the correctness or accuracy of the CUSIP, CINS or
ISIN number, if any, listed in such notice or printed on the New Notes.

                  SECTION 14.03. Selection of New Notes to be Redeemed. If less
than all of the New Notes are to be optionally redeemed, the New Indenture
Trustee shall select the New Notes to be redeemed or purchased among the New
Holders of the New Notes on a pro rata basis; provided that no New Notes of
$100,000 or less shall be redeemed in part.

                  The New Indenture Trustee shall promptly notify the Issuers in
writing of the New Notes selected for redemption and, in the case of any New
Note selected for partial redemption, the principal amount thereof to be
redeemed. New Notes and portions of New Notes selected shall be in amounts of
$100,000 or whole multiples of $1,000 in excess thereof; except that, if all of
the New Notes of a New Noteholder are to be redeemed, the entire Outstanding
amount of New Notes held by such New Noteholder, even if not such a multiple of
$1,000, shall be redeemed. Except as provided in the preceding two sentences,
provisions of this New Indenture that apply to the New Notes called for
redemption also apply to portions of New Notes called for redemption.

                  SECTION 14.04. Deposit of Optional Redemption Price.

                  (a) On or prior to 1:00 p.m., New York City time, on any
Optional Redemption Date, the Issuers shall deposit or cause to be deposited
into the New Notes Account an amount equal to the Optional Redemption Price, for
each New Note (or portion thereof) being redeemed, together with any other
amount necessary to be deposited with the New Indenture Trustee so that each New
Holder of such New Note is able to receive the applicable Optional Redemption
Price in full.

                  (b) If the Issuers comply with the provisions of paragraph (a)
above, on and after the Optional Redemption Date, interest shall cease to accrue
on the New Notes or the portions of the New Notes called for Optional
Redemption. If a New Note is redeemed in whole or in part on or after a Record
Date but on or prior to the related Note Payment Date, then any accrued and
unpaid interest shall be paid to the Person in whose name such New Note was
registered at the close of business on such Record Date. If any New Note called
for Optional Redemption shall not be so paid upon surrender for redemption
because of the failure of the Issuers to comply with the provisions of paragraph
(a) above, interest shall be paid on the unpaid principal, from the Optional
Redemption Date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the applicable Note
Rate.

                  SECTION 14.05. Payment of New Notes Called for Optional
Redemption. If a Notice of Optional Redemption has been given with respect to
any New Notes as provided in Section 14.02, such New Notes (or portions thereof)
to be redeemed shall become due and payable on the date and at the place stated
in such Notice of Optional Redemption at the Optional Redemption Price payable
pursuant to Section 14.01(e) and on and after said date (unless the Issuers
shall default in the payment of the Optional Redemption Price) interest on such
New Notes (or portions thereof) to be redeemed shall cease to accrue and such
New Notes shall cease from and after the Optional Redemption Date to be entitled
to any benefit or other support under this New Indenture, and the New
Noteholders shall have no right in respect of such New Notes (or portion
thereof) to be redeemed except the right to receive the Optional Redemption
Price with respect to each such New Note. Such New Notes (or portions thereof)
to be redeemed shall be paid and redeemed by the New Indenture Trustee in
accordance with Section 5.05(e) at the applicable Optional Redemption Price;
provided that any payment of interest becoming due on the Optional Redemption
Date shall be payable to the registered holders of such New Notes subject to the
applicable terms and provisions of Section 2.05.

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                  SECTION 14.06. New Notes Redeemed in Part. Upon surrender of a
New Note that is redeemed in part, the Issuers shall issue and execute, the
Guarantor shall endorse and, upon the Issuers' written request, the New
Indenture Trustee shall authenticate for the New Holder, at the expense of the
Issuers, a new New Note equal in principal amount to the unredeemed portion of
the New Note surrendered.

                                   ARTICLE XV

                   MANDATORY REDEMPTION AND SPECIAL REDEMPTION

                  SECTION 15.01. Mandatory Redemption.

                  (a) [Reserved].

                  (b) [Reserved].

                  (c) Following the acceleration of the New Notes as a result of
an Event of Default but prior to the expiration of the 120-day standstill
referred to in Section 2.05(f)(ii), the New Notes shall be redeemed if any one
or more of the following events (each, a "Take-Out Deposit") occurs:

                        (i) the Class B Shareholder causes funds to be
         irrevocably deposited with the New Indenture Trustee to be used to
         cause a Mandatory Redemption;

                        (ii) the Class A Shareholder causes funds to be
         irrevocably deposited with the New Indenture Trustee to be used to
         cause a Mandatory Redemption; or

                        (iii) the Indenture Trustee distributes funds to be
         irrevocably deposited with the New Indenture Trustee to be used to
         cause a Mandatory Redemption.

                  (d) When the New Notes have become subject to a redemption
pursuant to clause (c) above, the Outstanding New Notes shall be redeemed (a
"Mandatory Redemption") at the Mandatory Redemption Price on the date or dates
established by the New Indenture Trustee following the date of the Take-Out
Deposit (which date or dates shall be agreed upon by the New Indenture Trustee
and the Person(s) making such Take-Out Deposit and shall occur as promptly as
practicable following such Take-Out Deposit); provided that, in the case of a
Mandatory Redemption pursuant to Section 15.01(c)(iii) arising from Garnet
electing to exercise the Diamond Purchase Option or Diamond Retirement Option
and EPED Holding electing to exercise the Topaz Purchase Option or Topaz
Retirement Option, such date shall be the Retirement Date or Purchase Date, as
applicable, set forth in each Retirement Notice or Purchase Option Notice, as
applicable, delivered to the Indenture Trustee pursuant to the Topaz LLC
Agreement and the Diamond LLC Agreement (any such date, the "Mandatory
Redemption Date").

                   The "Mandatory Redemption Price" for each New Note in any
Mandatory Redemption will be equal to the accrued and unpaid interest (including
the Default Amount, if any) to the Mandatory Redemption Date plus 100% of the
Outstanding principal amount of such New Note plus all other amounts due and
owing to such New Noteholder under this New Indenture; provided, however, that
if the New Notes have been accelerated as a result of an Event of Default
described in Section 9.01(a), the Mandatory Redemption Price shall be equal to
the Optional Redemption Price.

                  SECTION 15.02. Notice of Mandatory Redemption. Notice of a
Mandatory Redemption ("Notice of Mandatory Redemption") of the New Notes
pursuant to Section 15.01 shall be given by the New Indenture Trustee at such
time or times when the New Indenture Trustee has any Amount Available in the New
Notes Account (including amounts received as a result of a Take-Out Deposit) to
apply to the payment of the New Notes in accordance with Section 5.05(d). Any
Notice of

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Mandatory Redemption shall be given to each New Noteholder by first class mail
or airmail, postage prepaid, at their last addresses as they shall appear upon
the Note Register. Any such Notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the New
Holder receives the notice. Each Notice of Mandatory Redemption shall be given
the number of days prior to each Mandatory Redemption Date as the New Indenture
Trustee may fix and shall specify, among other things, (a) the Mandatory
Redemption Date; (b) the Mandatory Redemption Price, specifying the applicable
Interest Amount and any Default Amount; (c) that, on the Mandatory Redemption
Date, the Mandatory Redemption Price will become due and payable upon each such
New Note to be redeemed and that interest shall cease to accrue on such New Note
on and after such date; (d) the name and address of the Paying Agent; (e) that
New Notes must be surrendered to the Paying Agent to collect the Mandatory
Redemption Price; (f) the paragraph of the New Notes and/or the Section of this
New Indenture pursuant to which the New Notes are being redeemed; and (g) that
no representation is made as to the correctness or accuracy of the CUSIP, CINS
or ISIN number, if any, listed in such notice or printed on the New Notes.

                  SECTION 15.03. Selection of New Notes to be Redeemed. If less
than all of the New Notes are to be redeemed on any particular Mandatory
Redemption Date, the New Notes shall be redeemed on a pro rata basis in
accordance with the respective unpaid principal balances of the Outstanding New
Notes.

                  The New Indenture Trustee shall promptly notify the Issuers in
writing of the amount of New Notes to be redeemed on any particular Mandatory
Redemption Date. Provisions of this New Indenture that apply to the New Notes
called for redemption also apply to portions of New Notes called for redemption.

                  SECTION 15.04 Special Redemption.

                  (a) Following (i) the exercise of an Asset Remedy at the
direction of the Noteholders or the Class A Shareholder in accordance with the
Indenture or, after the Note Final Payment Date, the Class A Shareholder in
accordance with the Diamond LLC Agreement, the Topaz LLC Agreement and/or the
Collateral Agreement or (ii) the occurrence of an Asset Disposition in
accordance with the Diamond LLC Agreement, the Topaz LLC Agreement and/or the
Garnet LLC Agreement in connection with the occurrence of a Specified Equity
Event, all or a portion of the New Notes shall be redeemed (without limiting the
mandatory redemption provisions in Sections 15.01, 15.02 and 15.03) upon the
distribution to the New Indenture Trustee of proceeds from the exercise of such
Asset Remedy or such Asset Disposition pursuant to Section 5.05(d) or Section
5.05(e) of the Indenture; provided that the aggregate amount to be applied to
such Special Redemption shall be no greater than the amount of such proceeds.

                  (b) When the New Notes have become subject to a redemption
pursuant to clause (a) above, all or a portion of the New Notes Outstanding
shall be redeemed (a "Special Redemption") on a pro rata basis at (i) the
Mandatory Redemption Price (if the New Notes have become subject to redemption
(x) pursuant to clause (a)(i) above as a result of an Event of Default other
than an Event of Default described in Section 9.01(a) or 9.01(n) of the
Indenture or (y) pursuant to clause (a)(ii) above) or (ii) the Optional
Redemption Price (if the New Notes have become subject to redemption pursuant to
clause (a)(i) above as a result of an Event of Default described in Section
9.01(a) or 9.01(n) of the Indenture), in each case on the date or dates
established by the New Indenture Trustee following the date of the New Indenture
Trustee's receipt of any proceeds pursuant to Section 5.05(d) of the Indenture
(the "Special Redemption Date").

                  SECTION 15.05. Notice of Special Redemption. Notice of a
Special Redemption ("Notice of Special Redemption") of the New Notes pursuant to
Section 15.04 shall be given by the New Indenture Trustee promptly at such time
or times when the New Indenture Trustee has received any proceeds pursuant to
Section 5.05(d) of the Indenture to apply to the payment of the New Notes in

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accordance with Section 5.05(d) or 5.05(e), as applicable. Any Notice of Special
Redemption shall be given to each New Noteholder by first class mail or airmail,
postage prepaid, at its last address as it shall appear upon the Note Register.
Any such Notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the New Holder
receives the notice. Each Notice of Special Redemption shall be given the number
of days prior to each Special Redemption Date as the New Indenture Trustee may
fix and shall specify, among other things, (a) the Special Redemption Date;
(b)(i) in the case of a Special Redemption which is not attributable to an Event
of Default described in Section 9.01(a) or (n) of the Indenture, the Mandatory
Redemption Price, specifying the Interest Amount and any Default Amount or (ii)
in the case of a Special Redemption which is attributable to an Event of Default
described in Section 9.01(a) or (n) of the Indenture, the formula by which the
Optional Redemption Price will be calculated on the Special Redemption Date and
the amount of accrued and unpaid interest, if any, to be due as of the Special
Redemption Date as a part of the Optional Redemption Price; (c) that on the
Special Redemption Date, the Mandatory Redemption Price or Optional Redemption
Price, as applicable, will become due and payable upon each such New Note to be
redeemed and that interest shall cease to accrue on such New Note on and after
such date; (d) if any New Note is being redeemed in part, the portion of the
principal amount of such New Note to be redeemed and that, after the Special
Redemption Date, upon surrender of such New Note, a new New Note or new New
Notes in principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original New Note; (e) the name and address of the Paying
Agent; (f) that New Notes must be surrendered to the Paying Agent to collect the
Special Redemption Price; (g) that such New Notes are being redeemed pursuant to
Section 15.04 of this New Indenture; and (h) that no representation is made as
to the correctness or accuracy of the CUSIP, CINS or ISIN number, if any, listed
in such notice or printed on the New Notes.

                  SECTION 15.06. Selection of New Notes to be Redeemed. If less
than all of the New Notes are to be redeemed on any particular Special
Redemption Date, the New Indenture Trustee shall select the New Notes to be
redeemed among the New Holders of the New Notes on a pro rata basis; provided
that no New Notes of $100,000 or less shall be redeemed in part.

                  The New Indenture Trustee shall promptly notify the Issuers in
writing of the New Notes selected for redemption and, in the case of any New
Note selected for partial redemption, the principal amount thereof to be
redeemed. New Notes and portions of New Notes selected shall be in amounts of
$100,000 or whole multiples of $1,000 in excess thereof; except that, if all of
the New Notes of a New Noteholder are to be redeemed, the entire Outstanding
amount of New Notes held by such New Noteholder, even if not such a multiple of
$1,000, shall be redeemed. Except as provided in the preceding two sentences,
provisions of this New Indenture that apply to the New Notes called for
redemption also apply to portions of New Notes called for redemption.

                                   ARTICLE XVI

                                  MISCELLANEOUS

                  SECTION 16.01. Survival. All agreements, representations,
warranties and indemnities contained in this New Indenture and in any agreement,
document or certificate delivered pursuant hereto, or in connection herewith,
shall survive and continue in effect following the execution and delivery of
this New Indenture and the Effective Date. Upon the repayment in full of the New
Notes, this New Indenture shall terminate.

                  SECTION 16.02. Notices. Except as otherwise expressly provided
herein in any particular case, all notices, approvals, consents, requests and
other communications hereunder shall be in writing and shall, if addressed as
provided in the following sentence, be deemed to have been given

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(i) when delivered by hand, (ii) one Business Day after being sent by a private
nationally or internationally recognized overnight courier service, (iii) five
days after being sent by first class mail or airmail, postage prepaid, or (iv)
when sent by telecopy, if immediately after transmission the sender's facsimile
machine records in writing the correct answer back. Actual receipt at the
address of an addressee, regardless of whether in compliance with the foregoing,
is effective notice hereunder. Until otherwise so notified by the respective
parties, all notices, approvals, consents, requests and other communications
shall be addressed to the following addressees:

         If to Investor:

         Gemstone Investor Limited
         c/o Walkers
         Walker House
         Mary Street, P.O. Box 265GT
         George Town, Grand Cayman, Cayman Islands
         Attention:  Andrew Hersant
         Telecopier No.: 345-949-7886
         Telephone No.:  345-949-0100

         If to the Co-Issuer:

         Gemstone Investor, Inc.
         c/o The Corporation Trust Company
         Corporation Trust Center
         1209 Orange Street, Room 123
         Wilmington, New Castle County, Delaware 19801
         Attention:  Mark Ferrucci
         Telecopier No.: 302-658-5459
         Telephone No.:  302-777-0250

         If to the New Indenture Trustee:

         The Bank of New York
         5 Penn Plaza
         New York, New York 10001
         Attn: Louis Young
         Telecopier No.: 212-896-7299
         Telephone No.:  212-896-7249

         with a copy to:

         Seward & Kissel
         One Battery Park Plaza
         New York, New York  10004
         Attention:  Kalyan Das, Esq.
         Telecopier No.: 212-480-8421
         Telephone No.:  212-574-1391

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<PAGE>

         If to El Paso:

         El Paso Corporation
         1001 Louisiana Street
         P.O. Box 2511
         Houston, Texas  77002
         Attention:  Tom Kilgore
         Telecopier No.: 713-420-7249
         Telephone No.:  713-420-5574

         with a copy to:

         El Paso Corporation
         1001 Louisiana Street
         P.O. Box 2511
         Houston, Texas  77002
         Attention:  Kelly Jameson
         Telecopier No.: 713-420-2529
         Telephone No.:  713-420-2017

         If to the Investor Shareholder:

         c/o Rabobank International
         245 Park Avenue
         New York, New York  10167
         Attention:  Chris Kortlandt
         Telecopier No.: 212-208-2586
         Telephone No.:  212-916-7810

         with copies to:

         Freshfields Bruckhaus Deringer LLP
         520 Madison Avenue
         New York, New York  10022
         Attention:  Brian Rance
         Telecopier No.: 212-277-4001
         Telephone No.:  212-277-4080

         Credit Suisse First Boston Corporation
         1000 Louisiana, Suite 4900
         Houston, Texas  77002
         Attention:  Paul A. Davis
         Telecopier No.: 713-652-6050
         Telephone No.:  713-652-6007

         If to the Rating Agencies:

         Moody's Investors Service, Inc.
         99 Church Street
         New York, New York  10007-2701
         Attention:  Mihoko Manabe
         Telecopier No.: 212-553-0519
         Telephone No.:  212-553-1942

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<PAGE>

         Standard & Poor's Ratings Services
         55 Water Street
         38th Floor
         New York, New York  10041
         Attention:  John W. Whitlock
         Telecopier No.: 212-438-2154
         Telephone No.:  212-438-7678

                  A duplicate copy of each notice, approval, consent, request,
Account Statement or other communication given hereunder by each of the parties
to any one of the others or to any Investor Shareholder shall also be given to
all of the others (including, for the avoidance of doubt, each Investor
Shareholder); provided, that if any such duplicate copy is provided to any such
Person pursuant to the requirements of any other Transaction Document, no
duplicate copy need be provided hereunder. However, failure to give notice to
any party shall not affect the effectiveness of notice to parties as to whom
notice has been given in accordance with this Section 16.02. Each of the parties
may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, approvals, consents, requests or other communications
shall be sent or persons to whose attention the same shall be directed.

                  SECTION 16.03. Severability of Provisions. If any provision
hereof shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof. To the extent permitted by Applicable Law, the Issuers,
the Guarantor and the New Indenture Trustee hereby agree that any provision
hereof that renders any other term or provision hereof invalid or unenforceable
in any respect shall be modified but only to the extent necessary to avoid
rendering such other term or provision invalid or unenforceable, and such
modification shall be accomplished in the manner that most nearly preserves the
benefit of the Issuers', the Guarantor's and the New Indenture Trustee's bargain
hereunder.

                  SECTION 16.04 Effect of Headings. The Table of Contents and
the headings of the Articles, Sections, subsections, clauses and paragraphs
hereof, and of Exhibits hereto, are for convenience of reference only and shall
not affect the construction or interpretation of this New Indenture.

                  SECTION 16.05. Counterparts. This New Indenture may be
executed in any number of counterparts, each of which shall be an original; but
all such counterparts shall together constitute but one and the same instrument.

                  SECTION 16.06. Further Assurance. The Issuers and, solely with
respect to its obligations hereunder, the Guarantor shall, from time to time on
being required to do so by the New Indenture Trustee, now or at any time in the
future, do or procure the doing of all such acts and/or execute or procure the
execution of all such documents in a form reasonably satisfactory to the New
Indenture Trustee as the New Indenture Trustee may reasonably consider necessary
for giving full effect to this New Indenture and securing to the New Indenture
Trustee the full benefit of the rights, powers and remedies conferred upon the
New Indenture Trustee in this New Indenture.

                  SECTION 16.07 Governing Law; Waiver of Jury Trial.

                  (a) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER
THIS NEW INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

                  (b) EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING
ARISING OUT OF OR RELATING DIRECTLY OR INDIRECTLY TO ANY OF THIS

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<PAGE>

NEW INDENTURE OR ANY OTHER TRANSACTION DOCUMENT (OTHER THAN THE NOTE PURCHASE
AGREEMENT AND THE DEALER MANAGER AGREEMENT) OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS NEW INDENTURE BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

                  (c) ANY PROCEEDING WITH RESPECT TO THIS NEW INDENTURE OR ANY
OTHER TRANSACTION DOCUMENT (OTHER THAN THE NOTE PURCHASE AGREEMENT AND THE
DEALER MANAGER AGREEMENT) MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
IN THE COUNTY OF NEW YORK IN THE COMMERCIAL DIVISION OF THE SUPREME COURT, CIVIL
BRANCH OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK OR THE
EASTERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS NEW
INDENTURE, EACH OF THE PARTIES HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS IN RESPECT OF, BUT ONLY IN RESPECT OF,
PROCEEDINGS WITH RESPECT TO THIS NEW INDENTURE OR ANY OTHER TRANSACTION
DOCUMENT.

                  (d) EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID PROCEEDINGS ARISING OUT OF
OR IN CONNECTION WITH THIS NEW INDENTURE OR ANY OTHER TRANSACTION DOCUMENT
BROUGHT IN THE COURTS REFERRED TO IN SECTION 16.07(c) AND HEREBY FURTHER
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

                  (e) EACH OF INVESTOR AND THE CO-ISSUER HEREBY IRREVOCABLY
DESIGNATES, APPOINTS AND EMPOWERS AND HEREBY CONFERS AN IRREVOCABLE SPECIAL
POWER, AMPLE AND SUFFICIENT, TO CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE
HEREOF AT 111 EIGHT AVENUE, NEW YORK, NY 10011, AS ITS DESIGNEE, APPOINTEE AND
AGENT WITH RESPECT TO ANY SUCH PROCEEDING IN NEW YORK TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY SUCH PROCEEDING AND AGREES THAT THE FAILURE OF SUCH AGENT TO GIVE ANY ADVICE
OF ANY SUCH SERVICE OF PROCESS TO INVESTOR OR THE CO-ISSUER, AS THE CASE MAY BE,
SHALL NOT IMPAIR OR AFFECT THE VALIDITY OF SUCH SERVICE OR OF ANY CLAIM BASED
THEREON. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE
AVAILABLE TO ACT AS SUCH, EACH OF INVESTOR AND THE CO-ISSUER AGREES TO DESIGNATE
A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY REASONABLY SATISFACTORY TO
THE NEW INDENTURE TRUSTEE ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF INVESTOR AND THE CO-ISSUER
HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS WITH RESPECT TO ANY
PROCEEDING (WHETHER OR NOT IN NEW YORK) BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL,

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POSTAGE PREPAID, TO SUCH PERSON AT ITS RESPECTIVE ADDRESS SET FORTH IN SECTION
16.02, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.

                  SECTION 16.08. Entire Agreement. This New Indenture
(including, without limitation, the Exhibits hereto) and the New Notes supersede
all prior agreements, written or oral, between or among any of Investor, the
Co-Issuer, the Guarantor and the New Indenture Trustee relating to the
transactions contemplated hereby and thereby, and each of Investor, the
Co-Issuer, the Guarantor and the New Indenture Trustee represents and warrants
to the others that this New Indenture, the New Notes and the other Transaction
Documents constitute the entire agreement among the Issuers, the Guarantor and
the New Indenture Trustee relating to the transactions contemplated hereby and
thereby.

                  SECTION 16.09. Benefit of Agreement. All agreements,
representations, warranties and indemnities in this New Indenture and in any
agreement, document or certificate delivered pursuant hereto shall be binding
upon the Person making the same and its successors and assigns and shall inure
to the benefit of and be enforceable by the Person for whom made and its
successors and assigns. None of Investor, the Co-Issuer or the Guarantor may
assign or transfer any of its rights or obligations hereunder without the prior
written consent of each other and the Majority New Noteholders; provided that no
such consent shall be required in connection with an assignment or transfer of
rights and obligations in connection with any merger, consolidation or other
transaction not in violation of Section 7.01(p) or Section 7.01(dd). The New
Indenture Trustee may transfer, assign or grant its rights and obligations
hereunder in connection with an assignment or transfer of all or any part of its
interest in accordance with the provisions of Sections 11.02, 11.03, 11.05 and
11.13, provided that any such assignee has agreed to be bound by the terms of
this New Indenture and the other Transaction Documents (other than the Note
Purchase Agreement and the Dealer Manager Agreement). This New Indenture is for
the sole benefit of Investor, the Co-Issuer, the Guarantor, the New Indenture
Trustee and the New Noteholders and their respective successors and assigns and
is not for the benefit of any other Person; provided that the Class A
Shareholder shall be an express third party beneficiary for the purposes of
Sections 2.05(f)(v) and 3.01 of this New Indenture.

                  SECTION 16.10. Limitation on Rights of New Noteholders. No New
Noteholder shall have any right to vote (except as provided in this New
Indenture) or in any manner otherwise control the operation and management of
the Recourse for the Notes (except as provided in this New Indenture) or the
obligations of the parties hereto (except as provided in this New Indenture) nor
shall anything herein set forth or contained in the terms of the New Notes be
construed so as to constitute the New Noteholders from time to time as partners
or members of an association nor shall any New Noteholder be under any liability
to any third party by reason of any action taken by the parties to this New
Indenture pursuant to any provision hereof, except as expressly provided for
herein.

                  No New Noteholder shall have any right by virtue or by
availing itself of any provisions of this New Indenture to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
New Indenture, unless such New Holder previously shall have given to the New
Indenture Trustee a written notice of an Event of Default and of the continuance
thereof, as hereinbefore provided, and unless the Majority New Noteholders shall
also have made written request upon the New Indenture Trustee to institute such
action, suit or proceeding in its own name as New Indenture Trustee hereunder
and shall have offered to the New Indenture Trustee such reasonable security or
indemnity (including reasonable advances) as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the New
Indenture Trustee, for 10 Business Days after its receipt of such notice,
request and offer of security or indemnity, shall have neglected or refused to
institute any such action, suit or proceeding, it being understood and intended,
and being expressly covenanted by each New Noteholder with the other New
Noteholders and the New Indenture Trustee, that no one or more New Holders of
New Notes shall have any right in any manner whatever by virtue or by availing
itself or themselves of any provisions of this New Indenture to affect, disturb
or prejudice the rights of the New Holders of any other of the New Notes or to
obtain or seek to obtain priority over or preference to any other such New

                                       67
<PAGE>

Holder or to enforce any right under this New Indenture, except in the manner
herein provided and for the common benefit of all New Noteholders. For the
protection and enforcement of the provisions of this Section 16.10, each and
every New Noteholder and the New Indenture Trustee shall be entitled to such
relief as can be given either at law or in equity.

                  SECTION 16.11. [Reserved].

                  SECTION 16.12. Notes Non-Assessable and Fully Paid. It is the
intention of the Issuers that the New Noteholders shall not be personally liable
for obligations of the Issuers and that the New Notes, upon due authentication
thereof by the New Indenture Trustee pursuant to this New Indenture, are and
shall be deemed fully paid.

                            [signature pages follow]

                                       68
<PAGE>

                  IN WITNESS WHEREOF, the undersigned have caused this New
Indenture to be duly executed as a deed as of this 9th day of May, 2002 by their
respective representatives hereunto duly authorized.

                                           EXECUTED AS A DEED FOR THE PURPOSES
                                           OF CAYMAN LAW:

                                           GEMSTONE INVESTOR LIMITED, as Issuer

                                           By:    /s/ Jaap Klep
                                                  ------------------------------
                                           Name:  Jaap Klep
                                           Title: Director

                                  New Indenture

<PAGE>

                                     GEMSTONE INVESTOR, INC., as Co-Issuer

                                     By:   /s/ John Hopper
                                           -------------------------------------
                                           Name:  John Hopper
                                           Title: Vice President

                                  New Indenture

<PAGE>

                                          EL PASO CORPORATION, as Guarantor

                                          By: /s/ John Hopper
                                              ----------------------------------
                                              Name:  John Hopper
                                              Title: Vice President

                                  New Indenture

<PAGE>

                                   THE BANK OF NEW YORK,
                                      as New Indenture Trustee

                                    By:  /s/ Louis P. Young
                                         ---------------------------------------
                                         Name:  Louis P. Young
                                         Title: Authorized Signatory

                                   THE BANK OF NEW YORK, as Paying Agent for
                                   purposes of Section 2.04(c) only

                                    By:  /s/ Louis P. Young
                                         ---------------------------------------
                                         Name:  Louis P. Young
                                         Title: Authorized Signatory

                                  New Indenture

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