Document:

<PAGE>
                                                                     EXHIBIT 4.1

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                          EL PASO NATURAL GAS COMPANY,

                                   as Company

                                       and

                            WILMINGTON TRUST COMPANY,

                                   as Trustee

                                   ----------

                                    INDENTURE

                            Dated as of July 21, 2003

                              Series A and Series B

                              7 5/8% Notes due 2010

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

<PAGE>

                                TABLE OF CONTENTS

                                    ARTICLE I
                   DEFINITIONS AND INCORPORATION BY REFERENCE

<Table>
<Caption>
                                                                           PAGE
<S>                                                                        <C>
Section 1.01  Definitions..................................................  1
Section 1.02  Other Definitions............................................ 14
Section 1.03  Incorporation by Reference of Trust Indenture Act............ 14
Section 1.04  Rules of Construction........................................ 14

                                   ARTICLE II
                                 THE SECURITIES

Section 2.01  Form and Dating.............................................. 15
Section 2.02  Execution and Authentication................................. 16
Section 2.03  Registrar and Paying Agent................................... 17
Section 2.04  Paying Agent to Hold Money in Trust.......................... 18
Section 2.05  Holder Lists................................................. 18
Section 2.06  Transfer and Exchange........................................ 18
Section 2.07  Certificated Securities...................................... 23
Section 2.08  Replacement Securities....................................... 24
Section 2.09  Outstanding Securities....................................... 24
Section 2.10  Treasury Securities.......................................... 25
Section 2.11  Temporary Securities......................................... 25
Section 2.12  Cancellation................................................. 25
Section 2.13  Defaulted Interest........................................... 26
Section 2.14  Persons Deemed Owners........................................ 26
Section 2.15  CUSIP Numbers................................................ 26

                                   ARTICLE III
                                    COVENANTS

Section 3.01  Payment of Securities........................................ 26
Section 3.02  Maintenance of Office or Agency.............................. 27
Section 3.03  SEC Reports; Financial Statements............................ 27
Section 3.04  Compliance Certificate....................................... 28
Section 3.05  Limitation on Liens.......................................... 28
Section 3.06  Limitation on Sale-Leaseback Transactions.................... 30
Section 3.07  Limitation on Restricted Payments............................ 31
Section 3.08  Limitation on Incurrence of Debt............................. 34
Section 3.09  Limitation on Participation in El Paso's Cash
               Management Program.......................................... 36
Section 3.10  Limitation on Transactions with Affiliates................... 36
Section 3.11  Waiver of Stay, Extension or Usury Laws...................... 38
</Table>

                                      -i-
<PAGE>

<Table>
<Caption>
                                   ARTICLE IV
                         CONSOLIDATION, MERGER AND SALE
                                                                           PAGE
<S>                                                                        <C>
Section 4.01  Limitation on Mergers and Consolidations..................... 38
Section 4.02  Successors Substituted....................................... 39

                                    ARTICLE V
                              DEFAULTS AND REMEDIES

Section 5.01  Events of Default............................................ 39
Section 5.02  Acceleration................................................. 40
Section 5.03  Other Remedies............................................... 41
Section 5.04  Waiver of Existing Defaults.................................. 41
Section 5.05  Control by Majority.......................................... 42
Section 5.06  Limitations on Suits......................................... 42
Section 5.07  Rights of Holders to Receive Payment......................... 43
Section 5.08  Collection Suit by Trustee................................... 43
Section 5.09  Trustee May File Proofs of Claim............................. 43
Section 5.10  Priorities................................................... 44
Section 5.11  Undertaking for Costs........................................ 44

                                   ARTICLE VI
                                     TRUSTEE

Section 6.01  Duties of Trustee............................................ 44
Section 6.02  Rights of Trustee............................................ 45
Section 6.03  Individual Rights of Trustee................................. 47
Section 6.04  Trustee's Disclaimer......................................... 47
Section 6.05  Notice of Defaults........................................... 47
Section 6.06  Reports by Trustee to Holders................................ 47
Section 6.07  Compensation and Indemnity................................... 48
Section 6.08  Replacement of Trustee....................................... 48
Section 6.09  Successor Trustee by Merger, etc............................. 49
Section 6.10  Eligibility; Disqualification................................ 50
Section 6.11  Preferential Collection of Claims Against Company............ 50

                                   ARTICLE VII
                       DISCHARGE OF INDENTURE; DEFEASANCE

Section 7.01  Discharge of Indenture....................................... 50
Section 7.02  Legal Defeasance............................................. 51
Section 7.03  Covenant Defeasance.......................................... 52
</Table>

                                       ii
<PAGE>

<Table>
<Caption>
                                                                           PAGE
<S>                                                                        <C>
Section 7.04  Conditions to Legal Defeasance or Covenant Defeasance........ 52
Section 7.05  Deposited Money and U.S. Government Obligations To Be
                Held in Trust; Other Miscellaneous Provisions.............. 54
Section 7.06  Reinstatement................................................ 54
Section 7.07  Moneys Held by Paying Agent.................................. 54
Section 7.08  Moneys Held by Trustee....................................... 55

                                  ARTICLE VIII
                                   AMENDMENTS

Section 8.01  Without Consent of Holders................................... 55
Section 8.02  With Consent of Holders...................................... 56
Section 8.03  Compliance with Trust Indenture Act.......................... 57
Section 8.04  Revocation and Effect of Consents............................ 57
Section 8.05  Notation on or Exchange of Securities........................ 58
Section 8.06  Trustee to Sign Amendments, etc.............................. 58

                                   ARTICLE IX
                                   REDEMPTION

Section 9.01  Notices to Trustee........................................... 59
Section 9.02  Selection of Securities to be Redeemed....................... 59
Section 9.03  Notices to Holders........................................... 59
Section 9.04  Effect of Notices of Redemption.............................. 60
Section 9.05  Deposit of Redemption Price.................................. 60
Section 9.06  Securities Redeemed in Part.................................. 61

                                    ARTICLE X
                                  MISCELLANEOUS

Section 10.01 Trust Indenture Act Controls................................. 61
Section 10.02 Notices...................................................... 61
Section 10.03 Communication by Holders with Other Holders.................. 62
Section 10.04 Certificate and Opinion as to Conditions Precedent........... 62
Section 10.05 Statements Required in Certificate or Opinion................ 63
Section 10.06 Rules by Trustee and Agents.................................. 63
Section 10.07 Legal Holidays............................................... 63
Section 10.08 No Recourse Against Others................................... 63
Section 10.09 Governing Law................................................ 63
Section 10.10 No Adverse Interpretation of Other Agreements................ 64
Section 10.11 Successors................................................... 64
Section 10.12 Severability................................................. 64
Section 10.13 Counterpart Originals........................................ 64
Section 10.14 Table of Contents, Headings, etc............................. 65
</Table>

                                      iii
<PAGE>

<Table>
<Caption>
EXHIBITS
                                                                            Page
<S>                                                                         <C>
EXHIBIT A  -  Form of Security............................................. A-1
</Table>

                                       iv
<PAGE>

                             CROSS-REFERENCE TABLE*
                             ----------------------

<Table>
<Caption>
                                                                 Indenture
     TIA Section                                                  Section
------------------------                                       ---------------
<S>                                                            <C>
310  (a)(1)..................................................  Section 6.10
     (a)(2)..................................................  Section 6.10
     (a)(3)..................................................  N.A.
     (a)(4)..................................................  N.A.
     (a)(5)..................................................  Section 6.10
     (b).....................................................  Section 6.10,
                                                               Section 7.01(b)
     (c).....................................................  N.A.
311  (a).....................................................  Section 6.11
     (b).....................................................  Section 6.11
     (c).....................................................  N.A.
312  (a).....................................................  Section 2.05
     (b).....................................................  Section 10.03
     (c).....................................................  Section 10.03
313  (a).....................................................  Section 6.06
     (b).....................................................  Section 6.06
     (c).....................................................  Section 6.06
     (d).....................................................  Section 6.06
314  (a).....................................................  Section 3.03
     (b).....................................................  N.A.
     (c)(1)..................................................  Section 10.04
     (c)(2)..................................................  Section 10.04
     (c)(3)..................................................  N.A.
     (d).....................................................  N.A.
     (e).....................................................  Section 10.05
     (f).....................................................  N.A.
315  (a).....................................................  Section 6.01(b)
     (b).....................................................  Section 6.05
     (c).....................................................  Section 6.01(a)
     (d).....................................................  Section 6.01(3)
     (e).....................................................  Section 5.11
316  (a) (last sentence).....................................  Section 2.09
     (a)(1)(A)...............................................  Section 5.05
     (a)(1)(B)...............................................  Section 5.04
     (a)(2)..................................................  N.A.
     (b).....................................................  Section 5.07
     (c).....................................................  Section 8.04
317  (a)(1)..................................................  Section 5.08
     (a)(2)..................................................  Section 5.09
318  (a).....................................................  Section 9.01
318  (c).....................................................  Section 9.01
</Table>

----------
N.A. means not applicable
* This Cross-Reference Table is not part of this Indenture

                                       v
<PAGE>

         INDENTURE dated as of July 21, 2003 between El Paso Natural Gas
Company, a Delaware corporation (the "Company"), and Wilmington Trust Company, a
New York banking corporation, as trustee (the "Trustee").

         Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's 7 5/8% Series
A Notes due 2010 (the "Series A Securities") and 7 5/8% Series B Notes due 2010
(the "Series B Securities", and together with the Series A Securities and any
Additional Securities that may be issued in the future in accordance with
Article II, the "Securities").

                                   ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

         Section 1.01 Definitions.

         "Acquired Debt" means, with respect to any specified Person, (a) Debt
of any other Person existing at the time such other Person is merged with or
into or became a Restricted Subsidiary of such specified Person, including,
without limitation, Debt incurred in connection with, or in contemplation of,
such other Person merging with or into or becoming a Restricted Subsidiary of
such specified Person, and (b) Debt secured by a Lien encumbering any asset
acquired by such specified Person.

         "Additional Securities" means Securities issued pursuant to Article II
and in compliance with Section 3.08 after the Initial Issue Date.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such specified Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" shall have meanings correlative to the preceding.
The Trustee may request and may conclusively rely upon an Officers' Certificate
to determine whether any Person is an Affiliate of any specified Person.

         "Agent" means any Registrar, co-Registrar, Paying Agent or
Authenticating Agent.

         "Bankruptcy Law" means Title 11, U.S. Code or any similar federal,
state or foreign law for the relief of debtors.

         "Board of Directors" of any Person means the board of directors of such
Person or any committee thereof duly authorized, with respect to any particular
matter, to act by or on behalf of the board of directors of such Person.

         "Business Day" means any day that is not a Legal Holiday.

<PAGE>

         "Capital Stock" means:

                  (a) with respect to any Person that is a corporation, any and
         all shares of corporate stock of that Person;

                  (b) with respect to any Person that is an association or
         business entity, any and all shares, interests, participations, rights
         or other equivalents, however designated, of capital stock of that
         Person;

                  (c) with respect to any Person that is a partnership or
         limited liability company, any and all partnership or membership
         interests, whether general or limited, of that Person; and

                  (d) with respect to any other Person, any other interest or
         participation that confers on a Person the right to receive a share of
         the profits and losses of or distributions of assets of, the issuing
         Person.

         "Capitalized Lease Obligation" means Debt represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP and the amount of such Debt shall be the
capitalized amount of such obligations determined in accordance with GAAP.

         "Clearstream" means Clearstream Banking, societe anonyme, Luxembourg.

         "Commodity Agreement" means, in respect to any Person, any forward
contract, commodity swap agreement, commodity option agreement or other similar
agreement or arrangement designed to protect such Person against fluctuation in
commodity prices.

         "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.

         "Consolidated Debt" means, as of any date of determination, the total,
without duplication, of all of the Company's Debt and all Debt of its Restricted
Subsidiaries outstanding on such date, after eliminating all offsetting debits
and credits between the Company and any Restricted Subsidiary and all other
items required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Restricted Subsidiaries in
accordance with GAAP.

         "Consolidated Debt to EBITDA Ratio" means, with respect to any
incurrence of Debt on any date, the ratio of (a) Consolidated Debt as of such
date to (b) the Consolidated EBITDA of the Company and its Restricted
Subsidiaries for its most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date of
such incurrence of Debt. Notwithstanding any other provision, for purposes of
making the computation referred to above, acquisitions that have been made by
the Company or any Restricted Subsidiary, including all mergers and
consolidations, subsequent to the commencement of such period shall be
calculated on a pro

                                      -2-
<PAGE>

forma basis, assuming that all such acquisitions, mergers and consolidations had
occurred on the first day of such period.

         "Consolidated EBITDA" means, with respect to any Person (the referent
Person) for any period, Consolidated Net Income of such Person for such period,
determined in accordance with GAAP, plus (to the extent such amounts are
deducted in calculating such Consolidated Net Income of such Person for such
period, and without duplication) (a) Consolidated Interest Expense of such
Person for such period, (b) any provision for taxes based on income or profits
of such Person and its Restricted Subsidiaries to the extent such income or
profits were included in calculating such Consolidated Net Income of such Person
for such period, and (c) amortization, depreciation and other non-cash charges
(including, without limitation, amortization of goodwill, deferred financing
fees and other intangibles but excluding (i) cash payments against such non-cash
charges during such period, (ii) cash payments against non-cash charges from a
prior period but subsequent to the date of this Indenture and (iii) normally
recurring accruals such as reserves against accounts receivable); provided,
however, if there is an event of default (as therein defined) under any Debt of
El Paso or one or more Subsidiaries of El Paso (other than the Company or any of
its Restricted Subsidiaries) guaranteed by one or more of the Company's
Restricted Subsidiaries, or a default, and, if applicable, after the passage of
time or the giving of notice or both, which in either event could cause such
Debt to become due prior to its stated maturity, then the Company's Consolidated
EBITDA shall not include the Consolidated EBITDA of such Restricted Subsidiary
until such default is cured or waived.

          "Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP.

         "Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP; provided that (a) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (b) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar distributions
by that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (c) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded and (d) the cumulative effect of a change in accounting principles
shall be excluded; provided, further, if there is an event of default (as
therein defined) under any Debt of El Paso or one or more Subsidiaries of El
Paso (other than the Company or any of its Restricted Subsidiaries) guaranteed
by one or more of the Company's Restricted Subsidiaries, or a default, and, if
applicable, after the passage of time or the giving of notice or

                                      -3-
<PAGE>

both, which in either event could cause such Debt to become due prior to its
stated maturity, then the Company's Consolidated Net Income shall not include
the Net Income of such Restricted Subsidiary until such default is cured or
waived.

         "Consolidated Net Tangible Assets" means, at any date of determination,
the total amount of assets after deducting therefrom (a) all current liabilities
(excluding (i) 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 (ii)
current maturities of long-term debt), and (b) 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
Company and its consolidated subsidiaries for the Company's most recently
completed fiscal quarter, prepared in accordance with GAAP.

         "Corporate Trust Office of the Trustee" means the office of the Trustee
at which the corporate trust business of the Trustee shall be principally
administered, which office shall initially be located at the address of the
Trustee specified in Section 10.02 hereof and may be located at such other
address as the Trustee may give notice to the Company and the Holders or such
other address as a successor Trustee may designate from time to time by notice
to the Holders and the Company.

         "Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.

         "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

         "Debt" means (a) any liability of any Person (i) for borrowed money,
(ii) evidenced by a note, debenture or similar instrument (including a purchase
money obligation) given in connection with the acquisition of any property or
assets (other than inventory or similar property acquired in the ordinary course
of business), including securities, or (iii) for the payment of money relating
to a Capitalized Lease Obligation; (b) any guarantee by any Person of any
liability of others described in the preceding clause (a); and (c) any
amendment, renewal, extension or refunding of any liability of the types
referred to in clauses (a) and (b) above. Notwithstanding anything to the
contrary in the foregoing, Debt shall not include: (x) any liability of or any
guarantee or similar arrangement by the Company or any of its Subsidiaries of El
Paso's or El Paso Merchant Energy's obligations in connection with, related to
or arising out of the Western Energy Settlement, (y) any of the Company's or any
of its Subsidiaries' Debt incurred pursuant to a cash management program of El
Paso and its Subsidiaries or (z) in order to avoid double counting, a guarantee
described in clause (b) above of any liability described in clause (a) above if
such liability has been included in the determination of Debt.

         "Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, an Event of Default.

                                      -4-
<PAGE>

         "Depositary" means The Depository Trust Company, its nominees and their
respective successors.

         "Disqualified Capital Stock" means any Capital Stock that, by its terms
or by the terms of any security into which it is convertible or for which it is
exchangeable, or upon the happening of any event,

                  (a) matures (excluding any maturity as the result of an
         optional redemption by the issuer of that Capital Stock);

                  (b) is mandatorily redeemable, pursuant to a sinking fund
         obligation or otherwise; or

                  (c) is redeemable at the sole option of its holder,

in whole or in part, on or prior to the final maturity date of the Securities;
provided, however, that only the portion of Capital Stock that so matures or is
mandatorily redeemable or is so redeemable at the sole option of its holder
prior to the final maturity date of the Securities will be deemed Disqualified
Capital Stock.

         "El Paso" means El Paso Corporation, a Delaware corporation.

         "El Paso's $3 Billion Facility" means the $3 billion Revolving Credit
Agreement dated as of April 16, 2003, among El Paso, the Company, Tennessee Gas
Pipeline Company, ANR Pipeline Company, the several banks and other financial
institutions from time to time parties thereto, JPMorgan Chase Bank, as
administrative agent for the Lenders thereunder, ABN AMRO Bank N.V. and Citicorp
North America, Inc., as co-document agents for the Lenders, and Bank of America,
N.A. and Credit Suisse First Boston, as co-syndication agents for the Lenders.

         "El Paso Merchant Energy" means El Paso Merchant Energy, L.P., a
Delaware limited partnership.

          "El Paso's Other Financings" means the $1 billion of other financing
arrangements existing on the date hereof, including leases, letters of credit
and other facilities, secured by Sabine River Investors V, L.L.C.'s equity
interests in EPNG Mojave, Inc. and El Paso Mojave Pipeline Co.

         "Equity Interests" means Qualified Capital Stock and all warrants,
options or other rights to acquire Qualified Capital Stock, but excluding any
debt security that is convertible into, or exchangeable for, Qualified Capital
Stock.

         "Euroclear" means Euroclear Bank S.A./NV, as operator of the Euroclear
System.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor statute.

                                      -5-
<PAGE>

         "Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange the Series B
Securities for the Series A Securities.

          "Funded Debt" means all Indebtedness maturing one year or more from
the date of the creation thereof, all Indebtedness 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 Indebtedness under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.

         "guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Debt of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for purposes of assuring in any
other manner the obligee of such Debt of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided,
however, that the term "guarantee" shall not include endorsements for collection
of deposit in the ordinary course of business or any guarantee, direct or
indirect, contingent or otherwise, in connection with the Western Energy
Settlement.

         "Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement, Commodity Agreement or Currency
Agreement.

         "Holder" means a Person in whose name a Security is registered.

          "Indebtedness" 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. Notwithstanding the foregoing, Indebtedness shall not
include any of the Company's or any of its Subsidiaries' Indebtedness incurred
pursuant to a cash management program of El Paso and its Subsidiaries.

         "Indenture" means this Indenture as amended or supplemented from time
to time.

         "Independent Financial Advisor" means an investment banking firm of
national standing or any third party appraiser that is determined by the
Company's Board of Directors to be reasonably competent to issue an opinion or
valuation with respect to the

                                      -6-
<PAGE>

matter for which it has been engaged; provided that such firm or appraiser is
not an Affiliate of the Company.

         "Initial Issue Date" means the first date on which the Series A
Securities are issued under this Indenture.

         "Initial Purchasers" means any initial purchasers of Series A
Securities issued in connection with an offering under Rule 144A and/or
Regulation S, including without limitation, the Original Initial Purchasers, as
such in the Original Offering.

         "Interest Payment Date" shall have the meaning assigned to such term in
the Securities.

         "Interest Rate Agreement" means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is a party or a beneficiary.

         "Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business) or other
extension of credit (including by way of guarantee or similar arrangement, but
excluding any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any transfer of
cash or other property to other Persons or any payment for property or services
for the account or use of other Persons), or any purchase or acquisition of
Capital Stock, Debt or other similar instruments issued by such Person.

         "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in any of New York, New York, Houston, Texas or a place of payment
are authorized or obligated by law, regulation or executive order to remain
closed.

         "Lien" means any mortgage, pledge, security interest, charge, lien, or
other encumbrance of any kind, whether or not filed, recorded or perfected under
applicable law.

          "Liquidated Damages" has the meaning given to such term in any
Registration Rights Agreement.

         "Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

         "Moody's" means Moody's Investors Service, Inc. or any successor to the
rating agency business of Moody's Investors Service, Inc.

         "Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of dividends on Preferred Stock, excluding, however, (a) any gain (but
not loss), together

                                      -7-
<PAGE>

with any related provision for taxes on such gain (but not loss), realized in
connection with (i) any asset sale (except in the ordinary course of business)
(including, without limitation, dispositions pursuant to Sale-Leaseback
Transactions) or (ii) the disposition of any securities by such Person or any of
its Subsidiaries, (b) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss) and (c) the settlement expense related to the
Western Energy Settlement, together with any related provision for taxes.

         "Officer" means the chairman of the board, the chief executive officer,
the president, any vice chairman of the board, any vice president, the principal
financial officer, the principal accounting officer, the treasurer, any
assistant treasurer, the controller, the secretary or any assistant secretary of
a Person.

         "Officers' Certificate" means a certificate signed by two Officers of a
Person, one of whom must be the Person's chief executive officer, principal
financial officer or principal accounting officer.

         "Operating Cash Flow" means, with respect to any Person for any period,
the Consolidated EBITDA of such Person for such period, less aggregate
maintenance capital expenditures of such Person, and its Restricted Subsidiaries
for such period determined in accordance with GAAP, less any taxes paid in cash
by such Person based on income or profits of such Person and its Restricted
Subsidiaries to the extent such income or profits were included in calculating
Consolidated Net Income for purposes of calculating Consolidated EBITDA of such
Person for such period, less Consolidated Interest Expense of such Person for
such period; provided, however, if there is an event of default (as therein
defined) under any Debt of El Paso or one or more subsidiaries of El Paso (other
than the Company or any of its Restricted Subsidiaries) guaranteed by one or
more of the Company's Restricted Subsidiaries, or a default, and, if applicable,
after the passage of time or the giving of notice or both, which in either event
could cause such Debt to become due prior to its stated maturity, then the
Company's Operating Cash Flow shall not include the Operating Cash Flow of such
Restricted Subsidiary until such default is cured or waived.

         "Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. Such counsel may be an employee of or counsel to the
Company, its parent corporation or the Trustee.

         "Original Initial Purchasers" means Citigroup Global Markets Inc. and
Credit Suisse First Boston LLC, as initial purchasers of the Series A Securities
in the Original Offering.

         "Original Offering" means the offering of the Series A Securities
pursuant to the Original Offering Memorandum.

         "Original Offering Memorandum" means the Offering Memorandum of the
Company, dated July 16 2003, relating to the offering of the Series A
Securities.

                                      -8-
<PAGE>

         "Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:

                  (a) cash or cash equivalents;

                  (b) an Investment existing on the Initial Issue Date,
         including any Investment in connection with, related to or arising out
         of the Western Energy Settlement;

                  (c) receivables owing to the Company or any Restricted
         Subsidiary, if created or acquired in the ordinary course of business
         and payable or dischargeable in accordance with customary trade terms;

                  (d) payroll, travel and similar advances to cover matters that
         are expected at the time of such advances ultimately to be treated as
         expenses for accounting purposes and that are made in the ordinary
         course of business;

                  (e) stock, obligations or securities received in settlement of
         debts created in the ordinary course of business and owing to the
         Company or any Restricted Subsidiary or in satisfaction of judgments or
         claims or pursuant to any plan of reorganization or similar arrangement
         upon the bankruptcy or insolvency of a debtor;

                  (f) Hedging Obligations;

                  (g) prepayments and other credits made in the ordinary course
         of business;

                  (h) Investments in connection with pledges, deposits, payments
         or performance bonds made or given in the ordinary course of business
         in connection with or to secure statutory, regulatory or similar
         obligations, including obligations under health, safety or
         environmental obligations;

                  (i) the Company or a Subsidiary of the Company, including
         guarantees of Debt of a Subsidiary of the Company;

                  (j) another Person if as a result of such Investment such
         other Person becomes a Subsidiary of the Company or is merged or
         consolidated with or into, or transfers or conveys all or substantially
         all its assets to, the Company or one of its subsidiaries; and

                  (k) any Person engaged in the business of transportation,
         storage, gathering, marketing or sale of natural gas and/or petroleum
         products and/or any businesses reasonably related thereto.

         "Permitted Liens" means (a) Liens upon rights-of-way for pipeline
purposes; (b) 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

                                      -9-
<PAGE>

faith by appropriate proceedings and any undetermined Lien which is incidental
to construction; (c) 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; (d) Liens of taxes and assessments which are (i) for
the then current year, (ii) not at the time delinquent, or (iii) delinquent but
the validity of which is being contested at the time by the Company or any
Subsidiary in good faith; (e) Liens of, or to secure performance of, leases; (f)
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; (g) any Lien upon property or assets acquired or sold by the
Company or any Restricted Subsidiary resulting from the exercise of any rights
arising out of defaults on receivables; (h) 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; (i) any Lien upon any property or assets in accordance with
customary banking practice to secure any Indebtedness incurred by the Company 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; (j) any Lien in favor of the United States of America 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; (k) any Lien in connection with, related to
or arising out of the Western Energy Settlement; or (l) any Lien in connection
with, related to or arising out of El Paso's $3 Billion Facility and any
Refinancing thereof.

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

         "Preferred Stock" means any capital stock or other equity interests of
a Person, however designated, which entitles the holder thereof to a preference
with respect to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of any other class of capital stock or other equity interests issued
by such Person.

         "Principal Property" means (a) any pipeline assets of the Company 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
Company 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, is not material in relation to the
activities of the Company and its Subsidiaries as a whole.

         "Private Exchange" means the offer by the Company to any of the Initial
Purchasers to issue and deliver to such Initial Purchaser, in exchange for the
Series A Securities held by such Initial Purchaser as part of its initial
distribution, a like aggregate principal amount of Private Exchange Securities.

                                      -10-
<PAGE>
         "Private Exchange Securities" means the Series B Securities to be
issued pursuant to this Indenture to an Initial Purchaser in a Private Exchange.

         "Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.

         "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

         "Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

         "Redemption Price" shall have the meaning assigned to such term in the
Securities.

         "Refinance" means, with respect to any Debt or Indebtedness, to extend,
refinance, renew, replace, or refund such Debt or Indebtedness.

         "Refinancing" means, with respect to any Debt or Indebtedness, any
extension, refinancing, renewal, replacement or refunding of such Debt or
Indebtedness (or successive extensions, refinancings, renewals, replacements or
refundings of such Debt or Indebtedness).

         "Registration Rights Agreement" means any registration rights agreement
entered into by the Company relating to any Securities issued hereunder,
including without limitation, the Registration Rights Agreement, dated as of
July 21, 2003, among the Company and the Original Initial Purchasers.

         "Responsible Officer" when used with respect to the Trustee means any
vice president, (whether or not designated by numbers or words added before or
after the title "vice president") , any assistant vice president, or any other
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of his knowledge of
and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.

         "Restricted Payment" means:

                  (a) the declaration or payment of any dividend or the making
         of any other distribution (other than dividends or distributions
         payable solely in Qualified Capital Stock or in options, rights or
         warrants to acquire Qualified Capital Stock) on shares of Capital Stock
         of the Company;

                  (b) the declaration or payment of any dividend or the making
         of any other distribution on shares of the Capital Stock of a
         Restricted Subsidiary to any Person (other than (i) to the Company or
         any of its Subsidiaries, (ii) dividends or distributions made by a
         Restricted Subsidiary on a pro rata basis to all stockholders of such
         Restricted Subsidiary (or owners of an equivalent interest in the case
         of a Restricted Subsidiary that is not a corporation) or (iii)
         dividends or distributions

                                      -11-
<PAGE>

         payable solely in its Qualified Capital Stock or in options, rights or
         warrants to acquire Qualified Capital Stock);

                  (c) the purchase, redemption, retirement or other acquisition
         for value of any Capital Stock of the Company held by Persons other
         than the Company or one of its Subsidiaries (other than in exchange for
         Qualified Capital Stock of the Company or options, rights or warrants
         to acquire Qualified Capital Stock of the Company); or

                  (d) the making of any Investment (other than a Permitted
         Investment) in any Person.

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

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

         "Securities" means the Series A Securities, Series B Securities and any
Additional Securities.

         "SEC" means the Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended, and any
successor statute.

         "Securities Custodian" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.

         "Series A Securities" means the Company's 7 5/8% Series A Notes due
2010, to be issued pursuant to this Indenture.

         "Series B Securities" means the Company's 7 5/8% Series B Notes due
2010, to be issued pursuant to this Indenture in the Exchange Offer.

         "Shelf Registration Statement" means the registration statement to be
filed by the Company, in connection with the offer and sale of Series A
Securities or Private Exchange Securities, pursuant to the Registration Rights
Agreement.

         "Standard & Poor's" means Standard & Poor's, a division of The
McGraw-Hill Companies, Inc. and its successors.

         "Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision

                                      -12-
<PAGE>

providing for the repurchase of such security at the option of the holder
thereof upon the happening of any contingency unless such contingency has
occurred).

         "Subsidiary" of any Person means (a) a corporation a majority of whose
capital stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by such referent Person,
by such referent Person and a Subsidiary (or Subsidiaries) of such referent
Person or by a Subsidiary (or Subsidiaries) of such referent Person or (b) any
Person (other than a corporation) in which such referent Person, a Subsidiary
(or Subsidiaries) of such referent Person, or such referent Person and a
Subsidiary (or Subsidiaries) of such referent Person, directly or indirectly, at
the date of determination thereof has at least a majority ownership interest;
provided that no corporation shall be deemed a Subsidiary until such referent
Person, a Subsidiary (or Subsidiaries) of such referent Person or such referent
Person and a Subsidiary (or Subsidiaries) of such referent Person acquires more
than 50% of the outstanding voting stock thereof and has elected a majority of
its Board of Directors.

         "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb), as in effect on the Initial Issue Date, except as
provided in Section 8.03 hereof.

         "Transfer Restricted Securities" with respect to any Securities, means
Registrable Securities (as defined in the Registration Rights Agreement
applicable to such Securities).

         "Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.

         "U.S. Government Obligations" means direct obligations of the United
States for the payment of which the full faith and credit of the United States
is pledged.

         "Weighted Average Life to Maturity" means, when applied to any Debt at
any date, the number of years obtained by dividing (a) the sum of the products
obtained by multiplying (1) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (2) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (b) the then outstanding principal amount of such
Debt.

         "Western Energy Settlement" means the agreement in principle, dated
March 20, 2003, by and among El Paso, its Affiliates and various public and
private claimants, including the states of California, Washington, Oregon and
Nevada, and the definitive settlement agreements entered into on June 23, 2003
in connection therewith, to resolve the principal litigation, claims and
regulatory proceedings against El Paso and its Affiliates relating to the sale
or delivery of natural gas and electricity from September 1996 to the date of
such settlement, (a) as in effect on the Initial Issue Date and (b) any
amendment, supplement or modification thereof.

                                      -13-
<PAGE>

         Section 1.02 Other Definitions.

<Table>
<Caption>
                    Term                            Defined in Section
-----------------------------------------------     ------------------
<S>                                                 <C>
"Affiliate Transaction"........................     Section 3.10(a)
"Agent Members"................................     Section 2.01(c)
"Authenticating Agent".........................     Section 2.02
"Covenant Defeasance"..........................     Section 7.03
"DTC"..........................................     Section 2.03
"Event of Default".............................     Section 5.01
"Global Security"..............................     Section 2.01(b)
"incur"........................................     Section 3.08(a)
"Legal Defeasance".............................     Section 7.02
"Paying Agent".................................     Section 2.03
"Payment Default"..............................     Section 3.09(a)(1)
"Refinancing Debt".............................     Section 3.08(b)(5)
"Registrar"....................................     Section 2.03
"Regulation S".................................     Section 2.01(b)
"Rule 144A"....................................     Section 2.01(b)
"Security Register"............................     Section 2.03
</Table>

         Section 1.03 Incorporation by Reference of Trust Indenture Act.

         Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:

         "commission" means the SEC;

         "indenture securities" means the Securities;

         "indenture security holder" means a Holder;

         "indenture to be qualified" means this Indenture;

         "indenture trustee" or "institutional trustee" means the Trustee; and

         "obligor" on the indenture securities means the Company.

         All terms used in this Indenture that are defined by the TIA, defined
by a TIA reference to another statute or defined by an SEC rule under the TIA
have the meanings so assigned to them.

         Section 1.04 Rules of Construction.

         Unless the context otherwise requires:

                  (a) a term has the meaning assigned to it;

                                      -14-
<PAGE>

                  (b) an accounting term not otherwise defined has the meaning
         assigned to it in accordance with GAAP;

                  (c) "or" is not exclusive;

                  (d) words in the singular include the plural, and in the
         plural include the singular; and

                  (e) provisions apply to successive events and transactions.

                                   ARTICLE II

                                 THE SECURITIES

         Section 2.01 Form and Dating.

                  (a) General. The Securities and the Trustee's certificate of
         authentication shall be substantially in the form of Exhibit A to this
         Indenture, the terms of which are hereby incorporated into this
         Indenture. The Securities may have notations, legends or endorsements
         required by law, securities exchange rule, the Company's certificate of
         incorporation, memorandum of association, articles of association,
         other organizational documents, agreements to which the Company is
         subject, if any, or usage; provided that any such notation, legend or
         endorsement is in a form acceptable to the Company. Each Security shall
         be dated the date of its authentication. The Securities shall be in
         registered form without coupons and only in denominations of $1,000 and
         any integral multiples thereof. The terms and provisions contained in
         the Securities shall constitute, and are hereby expressly made, a part
         of this Indenture and to the extent applicable, the Company and the
         Trustee, by their execution and delivery of this Indenture, expressly
         agree to such terms and provisions and to be bound thereby.

                  (b) Global Securities. Series A Securities offered and sold to
         a QIB in reliance on Rule 144A under the Securities Act ("Rule 144A")
         or in reliance on Regulation S under the Securities Act ("Regulation
         S") shall be issued initially in the form of one or more permanent
         global Securities in definitive, fully registered form without interest
         coupons with the global securities legend and restricted securities
         legend set forth in Section 2.06 (each, a "Global Security"), which
         shall be deposited on behalf of the purchasers of the Series A
         Securities represented thereby with the Trustee, at its New York
         office, as custodian for the Depositary (or with such other custodian
         as the Depositary may direct), and registered in the name of the
         Depositary or a nominee of the Depositary, duly executed by the Company
         and authenticated by the Trustee as hereinafter provided. The aggregate
         principal amount of the Global Securities may from time to time be
         increased or decreased by adjustments made on the records of the
         Trustee and the Depositary or its nominee as hereinafter provided.

                  (c) Book-entry Provisions. This Section 2.01(c) shall apply
         only to a Global Security deposited with or on behalf of the
         Depositary.

                                      -15-
<PAGE>

                  The Company shall execute and the Trustee shall, in accordance
         with this Section 2.01(c), authenticate and deliver initially one or
         more Global Securities that (i) shall initially be registered in the
         name of the Depositary for such Global Security or Global Securities or
         the nominee of such Depositary and (ii) shall be delivered by the
         Trustee to such Depositary or pursuant to such Depositary's
         instructions or held by the Trustee as custodian for the Depositary.

                  Members of, or participants in ("Agent Members"), the
         Depositary (including Euroclear and Clearstream) shall have no rights
         under this Indenture with respect to any Global Security held on their
         behalf by the Depositary or by the Trustee as the custodian of the
         Depositary or under such Global Security, and the Depositary may be
         treated by the Company, the Trustee and any agent of the Company or the
         Trustee as the absolute owner of such Global Security for all purposes
         whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
         the Company, the Trustee or any agent of the Company or the Trustee
         from giving effect to any written certification, proxy or other
         authorization furnished by the Depositary or impair, as between the
         Depositary and its Agent Members, the operation of customary practices
         of such Depositary governing the exercise of the rights of a holder of
         a beneficial interest in any Global Security.

                  (d) Certificated Securities. Except as provided in this
         Section 2.01 or Section 2.06, owners of beneficial interests in Global
         Securities will not be entitled to receive physical delivery of
         certificated Securities.

                  (e) Euroclear and Clearstream Procedures Applicable. The
         provisions of the "Operating Procedures of the Euroclear System" and
         "Terms and Conditions Governing Use of Euroclear" and the equivalent
         procedures of Clearstream shall be applicable to transfers of
         beneficial interests in Global Securities that are held by Agent
         Members (as defined below) through Euroclear or Clearstream.

                  (f) Additional Securities. Subject to compliance with the
         provisions of Section 3.08, the Company may issue Additional Securities
         under this Indenture after the Initial Issue Date in an unlimited
         aggregate principal amount.

         Section 2.02 Execution and Authentication.

         One Officer of the Company shall sign the Securities on behalf of the
Company by manual or facsimile signature. The Company's seal may be (but shall
not be required to be) impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.

         If an Officer of the Company whose signature is on a Security no longer
holds that office at the time the Security is authenticated, the Security shall
be valid nevertheless.

         A Security shall not be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose until authenticated by the manual
signature of an authorized

                                      -16-
<PAGE>

signatory of the Trustee, which signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.

         The Trustee shall authenticate (a) for original issue on the Initial
Issue Date, Series A Securities in the aggregate principal amount of
$355,000,000, (b) Series B Securities for original issue, pursuant to any
Exchange Offer or Private Exchange, for a like principal amount of Series A
Securities and (c) subject to Section 3.08 hereof, any amount of Additional
Securities specified by the Company, in each case, upon a written order of the
Company signed by one Officer of the Company. Such order shall specify (i) the
amount of the Securities to be authenticated and the date of original issue
thereof, and (ii) whether the Securities are Series A Securities or Series B
Securities. The aggregate principal amount of Securities of any series
outstanding at any time may not exceed the aggregate principal amount of
Securities of such series authorized for issuance by the Company pursuant to one
or more written orders of the Company, except as provided in Section 2.08
hereof.

         The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Securities. Unless
limited by the terms of such appointment, an Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
Authenticating Agent. An Authenticating Agent has the same rights as an Agent to
deal with the Company, or an Affiliate of the Company.

         The Series A Securities and the Series B Securities shall be considered
collectively to be a single class for all purposes of this Indenture, including,
without limitation, waivers, amendments, redemptions and offers to purchase.

         Section 2.03 Registrar and Paying Agent.

         The Company shall maintain or cause to be maintained an office or
agency where Securities may be presented for registration of transfer or
exchange ("Registrar") and an office or agency located in the Borough of
Manhattan, The City of New York, State of New York where Securities may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Securities and of their transfer and exchange (the "Security Register"). The
Company may appoint one or more co-Registrars and one or more additional Paying
Agents. The term "Registrar" includes any co-Registrar and the term "Paying
Agent" includes any additional Paying Agents.

         The Company may enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent.
The Company may change any Paying Agent, Registrar or co-Registrar without
notice to any Holder. If the Company fails to appoint or maintain another entity
as Registrar or Paying Agent, the Trustee shall act as such. The Company or any
of its Subsidiaries may act as Paying Agent or Registrar.

                                      -17-
<PAGE>

         The Company initially appoints the Trustee as Registrar and Paying
Agent.

         The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to each Global Security.

         Section 2.04 Paying Agent to Hold Money in Trust.

         The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, or premium, if any, or interest on the Securities, whether such
money shall have been paid to it by the Company and will notify the Trustee of
any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed. Upon payment over to the Trustee and upon accounting
for any funds disbursed, the Paying Agent (if other than the Company or a
Subsidiary of the Company) shall have no further liability for the money. If the
Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent.

         Section 2.05 Holder Lists.

         The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date, and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, and the
Company shall otherwise comply with TIA Section 312(a).

         Section 2.06 Transfer and Exchange.

                  (a) Transfer and Exchange of Global Securities.

                  (i) The transfer and exchange of Global Securities or
         beneficial interests therein shall be effected through the Depositary,
         in accordance with this Indenture (including applicable restrictions on
         transfer set forth herein, if any) and the procedures of the Depositary
         therefor. A transferor of a beneficial interest in a Global Security
         shall deliver to the Registrar a written order given in accordance with
         the Depositary's procedures containing information regarding the
         participant account of the Depositary to be credited with a beneficial
         interest in the Global Security. The Registrar shall, in accordance
         with such instructions, instruct the Depositary to credit to the
         account of the Person specified in such instructions a beneficial
         interest in the Global Security and to debit the account of the Person
         making the transfer the beneficial interest in the Global Security
         being transferred.

                                      -18-
<PAGE>

                  (ii) Notwithstanding any other provisions of this Indenture
         (other than the provisions set forth in Section 2.07), a Global
         Security may not be transferred as a whole except by the Depositary to
         a nominee of the Depositary or by a nominee of the Depositary to the
         Depositary or another nominee of the Depositary or by the Depositary or
         any such nominee to a successor Depositary or a nominee of such
         successor Depositary.

                  Each Holder of a Security agrees to indemnify the Company and
         the Trustee against any liability that may result from the transfer,
         exchange or assignment of such Holder's Security in violation of any
         provision of this Indenture and/or applicable United States federal or
         state securities law.

                  (iii) If a Global Security is exchanged for Securities in
         definitive registered form pursuant to this Section 2.06 or Section
         2.07, prior to the consummation of an Exchange Offer or prior to or in
         a transfer made pursuant to an effective Shelf Registration Statement
         with respect to such Securities, such Securities may be exchanged only
         in accordance with such procedures as are substantially consistent with
         the provisions of this Section 2.06 (including the certification and
         other requirements set forth on the reverse of the Series A Securities
         intended to ensure that such transfers comply with Rule 144A or
         Regulation S, as the case may be, or are otherwise in compliance with
         the requirements of the Securities Act) and such other procedures as
         may from time to time be adopted by the Company.

                  (b) Legend.

                  (i) Except as permitted by the following paragraphs (ii),
         (iii) and (iv), each Security certificate evidencing the Global
         Securities (and all Securities issued in exchange therefor or in
         substitution thereof) shall bear a legend in substantially the
         following form:

                  [(1) THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED
         IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
         SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY
         NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
         REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. 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.

                  (2) THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
         COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR
         OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM
         THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
         DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A

                                      -19-
<PAGE>
         TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE
         UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904
         UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
         REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
         (IF AVAILABLE), (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
         UNDER THE SECURITIES ACT, OR (V) TO AN INSTITUTIONAL "ACCREDITED
         INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION
         D UNDER THE SECURITIES ACT) THAT IS ACQUIRING THE SECURITY FOR ITS OWN
         ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
         INVESTOR" FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER
         OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
         SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
         APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B)
         THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
         PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED
         TO IN CLAUSE (A) ABOVE.

                  (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
         SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
         THE EFFECT OF THIS LEGEND; AND

                  (4) AGREES THAT, BEFORE THE HOLDER OFFERS, SELLS OR OTHERWISE
         TRANSFERS THIS SECURITY, EL PASO NATURAL GAS COMPANY MAY REQUIRE THE
         HOLDER OF THIS SECURITY TO DELIVER A WRITTEN OPINION, CERTIFICATIONS
         AND/OR OTHER INFORMATION THAT IT REASONABLY REQUIRES TO CONFIRM THAT
         SUCH PROPOSED TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM THE
         REGISTRATION REQUIREMENTS OF THE UNITED STATES.

                  AS USED IN THIS SECURITY, THE TERMS "OFFSHORE TRANSACTION,"
         "U.S. PERSON" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY
         RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.](1)

                  (ii) Upon any sale or transfer of a Transfer Restricted
         Security (including any Transfer Restricted Security represented by a
         Global Security) pursuant to Rule 144 under the Securities Act, in the
         case of any Transfer Restricted Security that is represented by a
         Global Security, the Registrar shall permit the Holder thereof to
         exchange such Transfer Restricted Security for a certificated Security

----------
(1)   These paragraphs should be included only if the Security is a Transfer
      Restricted Security

                                      -20-
<PAGE>

         that does not bear the legend set forth above and rescind any
         restriction on the transfer of such Transfer Restricted Security, if
         the Holder certifies in writing to the Registrar that its request for
         such exchange was made in reliance on Rule 144 (such certification to
         be in the form set forth on the reverse of the Security).

                  (iii) After a transfer of any Series A Securities or Private
         Exchange Securities during the period of the effectiveness of and
         pursuant to a Shelf Registration Statement with respect to such Series
         A Securities or Private Exchange Securities, as the case may be, but
         nevertheless subject to Section 2.07(a), all requirements pertaining to
         legends on such Series A Security or such Private Exchange Security
         will cease to apply, the requirements requiring any such Series A
         Security or such Private Exchange Security issued to certain Holders be
         issued in global form will cease to apply, and a certificated Series A
         Security or Private Exchange Security without legends will be available
         to the transferee of the Holder of such Series A Securities or Private
         Exchange Securities upon exchange of such transferring Holder's
         certificated Series A Security or Private Exchange Security or
         directions to transfer such Holder's interest in the Global Security,
         as applicable.

                  (iv) Upon the consummation of an Exchange Offer with respect
         to the Series A Securities pursuant to which Holders of such Series A
         Securities are offered Series B Securities in exchange for their Series
         A Securities, but nevertheless subject to Section 2.07(a), all
         requirements pertaining to such Series A Securities that Series A
         Securities issued to certain Holders be issued in global form will
         cease to apply and certificated Series A Securities with the restricted
         securities legend set forth in Section 2.06(b)(i) will be available to
         Holders of such Series A Securities that do not exchange their Series A
         Securities, and Series B Securities in certificated or global form will
         be available to Holders that exchange such Series A Securities in such
         Exchange Offer.

                  (v) Upon the consummation of a Private Exchange with respect
         to the Series A Securities pursuant to which Holders of such Series A
         Securities are offered Private Exchange Securities in exchange for
         their Series A Securities, all requirements pertaining to such Series A
         Securities that Series A Securities issued to certain Holders be issued
         in global form will still apply, and Private Exchange Securities in
         global form with the restricted securities legend set forth in Section
         2.06(b)(i) will be available to Holders that exchange such Series A
         Securities in such Private Exchange.

                  (c) Cancellation or Adjustment of Global Security. At such
         time as all beneficial interests in a Global Security have either been
         exchanged for certificated Securities, redeemed, repurchased or
         canceled, such Global Security shall be returned to the Depositary for
         cancellation or retained and canceled by the Trustee. At any time prior
         to such cancellation, if any beneficial interest in a Global Security
         is exchanged for certificated Securities, redeemed, repurchased or
         canceled, the principal amount of Securities represented by such Global
         Security shall be reduced and an adjustment shall be made on the books
         and records of the

                                      -21-
<PAGE>

         Trustee (if it is then the Securities Custodian for such Global
         Security) with respect to such Global Security, by the Trustee or the
         Securities Custodian, to reflect such reduction.

                  (d) Obligations with Respect to Transfers and Exchanges of
         Securities.

                  (i) To permit registrations of transfers and exchanges, the
         Company shall execute and the Trustee shall authenticate certificated
         Securities and Global Securities at the Registrar's or co-Registrar's
         request. No service charge shall be made for any registration of
         transfer or exchange, but the Company may require payment of a sum
         sufficient to cover any transfer tax, assessments, or similar
         governmental charge payable in connection therewith (other than any
         such transfer taxes, assessments or similar governmental charge payable
         upon exchange or transfer pursuant to Section 8.05 and Section 9.06).

                  (ii) The Registrar or co-Registrar shall not be required to
         register the transfer of or exchange of (1) any certificated Security
         selected for redemption in whole or in part pursuant to Article IX,
         except the unredeemed portion of any certificated Security being
         redeemed in part, or (2) any Security for a period beginning 15
         Business Days before the mailing of a notice of an offer to repurchase
         or redeem Securities or 15 Business Days before an interest payment
         date.

                  (iii) Prior to the due presentation for registration of
         transfer of any Security, the Company, the Trustee, the Paying Agent,
         the Registrar or any co-Registrar may deem and treat the Person in
         whose name a Security is registered as the absolute owner of such
         Security for the purpose of receiving payment of principal of, premium,
         if any, and interest and Liquidated Damages, if any, on such Security
         and for all other purposes whatsoever, whether or not such Security is
         overdue, and none of the Company, the Trustee, the Paying Agent, the
         Registrar or any co-Registrar shall be affected by notice to the
         contrary.

                  (iv) All Securities issued upon any transfer or exchange
         pursuant to the terms of this Indenture shall evidence the same debt
         and shall be entitled to the same benefits under this Indenture as the
         Securities surrendered upon such transfer or exchange.

                  (e) No Obligation of the Trustee.

                  (i) The Trustee shall have no responsibility or obligation to
         any beneficial owner of a Global Security, any Agent Member or other
         Person with respect to the accuracy of the records of the Depositary or
         its nominee or of any participant or member thereof, with respect to
         any ownership interest in the Securities or with respect to the
         delivery to any participant, member, beneficial owner or other Person
         (other than the Depositary) of any notice (including any notice of
         redemption) or the payment of any amount, under or with respect to such
         Securities. All notices and communications to be given to the Holders
         and all payments to be made to Holders under the Securities shall be
         given or made only to or upon the

                                      -22-
<PAGE>

         order of the registered Holders (which shall be the Depositary or its
         nominee in the case of a Global Security). The rights of beneficial
         owners in any Global Security shall be exercised only through the
         Depositary subject to the applicable rules and procedures of the
         Depositary. The Trustee may rely conclusively and shall be fully
         protected in relying upon information furnished by the Depositary with
         respect to its members, participants and any beneficial owners.

                  (ii) The Trustee shall have no obligation or duty to monitor,
         determine or inquire as to compliance with any restrictions on transfer
         imposed under this Indenture or under applicable law with respect to
         any transfer of any interest in any Security (including any transfers
         between or among Agent Members or beneficial owners in any Global
         Security) other than to require delivery of such certificates and other
         documentation or evidence as are expressly required by, and to do so if
         and when expressly required by, the terms of this Indenture, and to
         examine the same to determine substantial compliance as to form with
         the express requirements hereof.

         Section 2.07 Certificated Securities.

                  (a) A Global Security deposited with the Depositary or with
         the Trustee as custodian for the Depositary pursuant to Section 2.01
         shall be transferred to the beneficial owners thereof in the form of
         certificated Securities in an aggregate principal amount equal to the
         principal amount of such Global Security, in exchange for such Global
         Security, only if such transfer complies with Section 2.06 and (i) the
         Depositary notifies the Company that it is unwilling or unable to
         continue as Depositary for such Global Security or if at any time such
         Depositary ceases to be a "clearing agency" registered under the
         Exchange Act and a successor depositary is not appointed by the Company
         within 90 days of such notice, or (ii) the Company, in its sole
         discretion, notifies the Trustee in writing that it elects to cause the
         issuance of certificated Securities under this Indenture.

                  (b) Any Global Security that is transferred to the beneficial
         owners thereof pursuant to this Section 2.07 shall be surrendered by
         the Depositary to the Trustee at its office located in the Borough of
         Manhattan, The City of New York, to be so transferred, in whole or from
         time to time in part, without charge, and the Trustee shall
         authenticate and deliver, upon such transfer of each portion of such
         Global Security, an equal aggregate principal amount of certificated
         Securities of authorized denominations. Any portion of a Global
         Security transferred pursuant to this Section shall be executed,
         authenticated and delivered only in denominations of $1,000 and any
         integral multiple thereof and registered in such names as the
         Depositary shall direct. Any certificated Series A Security delivered
         in exchange for an interest in the Global Security shall, except as
         otherwise provided by Section 2.06(d), bear the restricted securities
         legend set forth in Section 2.06(b).

                  (c) Subject to the provisions of Section 2.06(b), the
         registered Holder of a Global Security may grant proxies and otherwise
         authorize any Person,

                                      -23-
<PAGE>

         including Agent Members and Persons that may hold interests through
         Agent Members, to take any action which a Holder is entitled to take
         under this Indenture or the Securities.

                  (d) If either of the events specified in Section 2.07(a)
         occurs, the Company shall promptly make available to the Trustee a
         reasonable supply of certificated Securities in definitive, fully
         registered form without interest coupons.

                  (e) If a certificated Security issued pursuant to this Section
         2.07 is exchanged for another certificated Security prior to the
         consummation of an Exchange Offer or prior to or in a transfer made
         pursuant to an effective Shelf Registration Statement with respect to
         such Securities, such Securities may be exchanged only in accordance
         with such procedures as are substantially consistent with the
         provisions of (i) Section 2.06(a)(iii) (including the certification and
         other requirements set forth on the reverse of the Series A Securities
         intended to ensure that such transfers comply with Rule 144A or
         Regulation S, as the case may be, or are otherwise in compliance with
         the requirements of the Securities Act) and such other procedures as
         may from time to time be adopted by the Company and (ii) Section
         2.06(b).

         Section 2.08 Replacement Securities.

         If any mutilated Security is surrendered to the Trustee, or the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Security, the Company shall issue and the Trustee shall
authenticate a replacement Security, but only if the Trustee's requirements are
met. Such Holder must furnish an indemnity bond that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee, any
Agent or any authenticating agent from any loss which any of them may suffer if
a Security is replaced. The Company and the Trustee may charge for their
expenses in replacing a Security. If, after the delivery of such replacement
Security, a bona fide purchaser of the original Security in lieu of which such
replacement Security was issued presents for payment or registration such
original Security, the Trustee shall be entitled to recover such replacement
Security from the Person to whom it was delivered or any Person taking
therefrom, except a bona fide purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expense incurred by the Trustee or the Company in connection therewith.

         Every replacement Security is an additional obligation of the Company.

         Section 2.09 Outstanding Securities.

         The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee hereunder and those described in this Section 2.09 as
not outstanding; provided, however, that in determining whether the holders of
the requisite principal amount of outstanding Securities are present at a
meeting of holders of Securities for quorum purposes or have consented to or
voted

                                      -24-
<PAGE>

in favor of any request, demand, authorization, direction, notice, consent,
waiver, amendment or modification hereunder, Securities held for the account of
the Company, any of its Subsidiaries or any of their respective Affiliates shall
be disregarded and deemed not to be outstanding, except that in determining
whether the Trustee shall be protected in making such a determination or relying
upon any such quorum, consent or vote, only Securities which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.

         If a Security is replaced pursuant to Section 2.08 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

         A Security with respect to which the Company has effected defeasance or
covenant defeasance ceases to be outstanding except to the extent provided in
Sections 7.02 and 7.03.

         If the principal amount of any Security is considered paid under
Section 3.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.

         Except as set forth in Section 2.10 hereof, a Security does not cease
to be outstanding because the Company or any of its Affiliates holds the
Security.

         Section 2.10 Treasury Securities.

         In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or any of its Affiliates shall be disregarded, except that for
the purpose of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Securities which a Responsible
Officer of the Trustee actually knows are so owned shall be so disregarded.

         Section 2.11 Temporary Securities.

         Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities, but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities. Until
so exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.

         Section 2.12 Cancellation.

         The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment, replacement or cancellation. All canceled
Securities held by the Trustee shall be disposed of in accordance

                                      -25-
<PAGE>

with the usual disposal procedures of the Trustee. The Company may not issue new
Securities to replace Securities that have been paid or that have been delivered
to the Trustee for cancellation.

         Section 2.13 Defaulted Interest.

         If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest on the defaulted interest, in each case at the rate provided in
the Securities and in Section 3.01 hereof. The Company may pay the defaulted
interest to the Persons who are Holders on a subsequent special record date. At
least 15 days before any special record date, the Company (or the Trustee, in
the name of and at the expense of the Company) shall mail to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.

         Section 2.14 Persons Deemed Owners.

         The Company, the Trustee, any Agent and any authenticating agent may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payments of principal of, or premium, if
any, or interest on such Security and for all other purposes. None of the
Company, the Trustee, any Agent or any authenticating agent shall be affected by
any notice to the contrary.

         Section 2.15 CUSIP Numbers.

         The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to 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 Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company shall promptly notify
the Trustee of any change in the "CUSIP" numbers.

                                  ARTICLE III

                                    COVENANTS

         Section 3.01 Payment of Securities.

         The Company shall pay the principal of and premium, if any, Liquidated
Damages, if any, and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal, premium, if any,
Liquidated Damages, if any, and interest shall be considered paid on the date
due if the Paying Agent, other than the Company or a Subsidiary of the Company,
holds by 11:00 a.m., New York City time, on that date money deposited by the
Company designated for and sufficient to pay all principal, premium, if any,
Liquidated Damages, if any, and interest then due.

                                      -26-
<PAGE>

         To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal, premium, if any, Liquidated Damages, if any, and interest payments
(without regard to any applicable grace period) at a rate equal to the then
applicable interest rate on the Securities.

         Section 3.02 Maintenance of Office or Agency.

         The Company shall maintain, in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee, the
Registrar or the Paying Agent) where Securities may be presented for
registration of transfer or exchange, where Securities may be presented for
payment and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. Unless otherwise designated by the
Company by written notice to the Trustee, such office or agency shall be the
principal office of the Trustee in the Borough of Manhattan, The City of New
York, which, on the date hereof, is located at the address set forth in Section
10.02 hereof. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.

         The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby designates the Corporate Trust Office of the Trustee as one such
office or agency of the Company in accordance with Section 2.03 hereof.

         Section 3.03 SEC Reports; Financial Statements.

                  (a) Notwithstanding that the Company may not be required to
         remain subject to the reporting requirements of Section 13 or 15(d) of
         the Exchange Act, the Company shall file with the SEC and provide the
         Trustee with, and the Trustee shall mail to any Holder requesting
         copies of, such annual and quarterly reports and such information,
         documents and other reports specified in Sections 13 and 15(d) of the
         Exchange Act within 15 days after the date it is required (or would
         otherwise have been required) to file such reports, information and
         documents.

                  (b) In addition, whether or not required by the rules and
         regulations of the SEC, the Company shall file a copy of all such
         information and reports with the SEC for public availability (unless
         the SEC will not accept such filing). In addition, the Company shall
         furnish to the Holders and to prospective investors, upon the requests
         of Holders, any information required to be delivered pursuant to

                                      -27-
<PAGE>

         Rule 144A(d)(4) under the Securities Act so long as the Securities are
         not freely transferable under the Securities Act.

                  (c) The Company shall provide the Trustee with a sufficient
         number of copies of all reports and other documents and information
         that the Trustee may be required to deliver to Holders under clause (a)
         of this Section 3.03.

                  (d) Delivery of such reports, information and documents to the
         Trustee is for informational purposes only and the Trustee's receipt of
         such shall not constitute constructive notice of any information
         contained therein or determinable from information contained therein,
         including the Company's compliance with any of its covenants hereunder
         (as to which the Trustee is entitled to rely exclusively on Officers'
         Certificates).

         Section 3.04 Compliance Certificate.

                  (a) The Company shall deliver to the Trustee, within 90 days
         after the end of each fiscal year of the Company, a statement signed by
         two Officers of the Company (one of whom shall be the principal
         financial, principal accounting or principal executive officer of the
         Company), which statement need not constitute an Officers' Certificate,
         complying with TIA Section 314(a)(4) and stating that in the course of
         performance by the signing Officers of the Company of their duties as
         such Officers, they would normally obtain knowledge of the keeping,
         observing, performing and fulfilling by the Company, of its obligations
         under this Indenture, and further stating, as to each such Officer
         signing such statement, that to the best of his or her knowledge, the
         Company has kept, observed, performed and fulfilled each and every
         covenant contained in this Indenture and is not in default in the
         performance or observance of any of the terms, provisions and
         conditions hereof (or, if a Default or Event of Default shall have
         occurred, describing all such Defaults or Events of Default of which
         such Officer may have knowledge and what action the Company is taking
         or proposes to take with respect thereto).

                  (b) The Company shall, so long as any of the Securities are
         outstanding, deliver to the Trustee, forthwith upon any Officer of the
         Company becoming aware of any Default or Event of Default under this
         Indenture, an Officers' Certificate specifying such Default or Event of
         Default and what action the Company is taking or proposes to take with
         respect thereto.

         Section 3.05 Limitation on Liens.

         The Company will not, nor will 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 of this Indenture or thereafter acquired, to
secure any Indebtedness of the Company or any other Person (other than the
Securities issued hereunder), without in any such case making effective
provision whereby all of the Securities outstanding hereunder shall be secured
equally and ratably with, or prior to, such Indebtedness so long as such
Indebtedness shall be so secured. This restriction shall not apply to:

                                      -28-
<PAGE>

                  (a) any Lien upon any property or assets of the Company or any
         Restricted Subsidiary in existence on the date of this Indenture or
         created pursuant to an "after-acquired property" clause or similar term
         in existence on the date of this Indenture or any mortgage, pledge
         agreement, security agreement or other similar instrument in existence
         on the date of this Indenture;

                  (b) any Lien upon any property or assets created at the time
         of acquisition of such property or assets by the Company 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
         Indebtedness incurred to finance such purchase price, whether such
         Indebtedness was incurred prior to, at the time of or within one year
         of such acquisition;

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

                  (d) 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;

                  (e) the assumption by the Company or any Restricted Subsidiary
         of obligations secured by any Lien existing at the time of the
         acquisition by the Company 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;

                  (f) any Lien on property to secure all or part of the cost of
         construction or improvements thereon or to secure Indebtedness incurred
         prior to, at the time of, or within one year after completion of such
         construction or making of such improvements, to provide funds for any
         such purpose;

                  (g) 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;

                  (h) any Lien arising from or in connection with a conveyance
         by the Company 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;

                  (i) any Lien in favor of the Company or any Restricted
         Subsidiary;

                  (j) any Lien created or assumed by the Company or any
         Restricted Subsidiary in connection with the issuance of Indebtedness
         the interest on which

                                      -29-
<PAGE>

         is excludable from gross income of the holder of such Indebtedness
         pursuant to the Internal Revenue Code of 1986, as amended, 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
         Company or any Restricted Subsidiary;

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

                  (l) Permitted Liens;

                  (m) 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 (a) through (l), inclusive, of this Section; or

                  (n) any Refinancing of any Lien, in whole or in part, that is
         referred to in clauses (a) through (m), inclusive, of this Section, or
         of any Indebtedness secured thereby; provided, however, that the
         principal amount of Indebtedness secured thereby shall not exceed the
         greater of the principal amount of Indebtedness so secured at the time
         of such Refinancing and the original principal amount of Indebtedness
         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 Refinancing); provided, further, however, that
         such Refinancing shall be limited to all or a part of the property
         (including improvements, alterations and repairs on such property)
         subject to the encumbrance so Refinanced (plus improvements,
         alterations and repairs on such property).

         Notwithstanding the foregoing provisions of this Section, the Company
may, and may permit any Restricted Subsidiary to, create, assume, incur or
suffer to exist any other Lien upon any Principal Property to secure any
Indebtedness of the Company or any other Person (other than the Securities) that
is not excepted by clauses (a) through (n), inclusive, of this Section without
securing the Securities issued hereunder; provided that the aggregate principal
amount of all Indebtedness then outstanding secured by such other Lien and all
other similar Liens, together with all net sale proceeds from Sale-Leaseback
Transactions (excluding Sale-Leaseback Transactions permitted by clauses (a)
through (d), inclusive, of Section 3.06), does not exceed 15% of Consolidated
Net Tangible Assets.

         Section 3.06 Limitation on Sale-Leaseback Transactions.

         The Company will not, nor will it permit any Restricted Subsidiary to,
engage in a Sale-Leaseback Transaction unless:

                  (a) such Sale-Leaseback Transaction occurs within one year
         from the date of acquisition of the Principal Property subject thereto
         or the date of the

                                      -30-
<PAGE>

         completion of construction or commencement of full operations on such
         Principal Property, whichever is later;

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

                  (c) the Company or such Restricted Subsidiary would be
         entitled to incur Indebtedness 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 Securities; or

                  (d) the Company 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 (i) the repayment, redemption or
         retirement of Funded Debt of the Company or any such Restricted
         Subsidiary, or (ii) investment in another Principal Property.

         Notwithstanding the foregoing provisions of this Section, the Company
may, and may permit any Restricted Subsidiary to, effect any other
Sale-Leaseback Transaction that is not excepted by clauses (a) through (d),
inclusive, of this Section; provided that the net sale proceeds from such other
Sale-Leaseback Transaction, together with the aggregate principal amount of then
outstanding Indebtedness (other than the Securities) secured by Liens upon
Principal Properties not excepted by clauses (a) through (n), inclusive, of
Section 3.05, do not exceed 15% of Consolidated Net Tangible Assets.

         Section 3.07 Limitation on Restricted Payments.

                  (a) The Company shall not, and shall not cause or permit any
         of its Restricted Subsidiaries to, directly or indirectly, make any
         Restricted Payment if at the time of that Restricted Payment and
         immediately after giving effect to that Restricted Payment:

                  (i) a Default or Event of Default will have occurred and be
         continuing or would result from that Restricted Payment;

                  (ii) the Company is not able to incur an additional $1.00 of
         Debt pursuant to the Consolidated Debt to EBITDA Ratio under Section
         3.08; or

                  (iii) the aggregate amount of the Restricted Payment and all
         other Restricted Payments declared or made subsequent to the date the
         Securities are first issued would exceed the sum of:

                           (1) 100% of the Company's Operating Cash Flow accrued
                  subsequent to January 1, 2003 to the most recent date for
                  which financial information is available to the Company, taken
                  as one accounting period (or if the aggregate amount of
                  Operating Cash Flow for such period shall be a deficit, minus
                  100% of such deficit); plus

                                      -31-
<PAGE>

                           (2) 100% of the aggregate net proceeds, including the
                  net fair market value of property or securities other than
                  cash as determined by the Company's Board of Directors in good
                  faith, received subsequent to the date the Securities are
                  first issued from any Person, other than one of the Company's
                  Subsidiaries, from (x) the issue or sale of the Company's
                  Equity Interests (other than Disqualified Capital Stock)
                  (including, without limitation, in a merger, consolidation,
                  acquisition of property or any other form of transaction to
                  the extent the consideration involved consists of Capital
                  Stock (other than Disqualified Capital Stock)) or (y) the
                  issue or sale of the Company's Disqualified Capital Stock or
                  debt securities of the Company or those of any of its
                  Restricted Subsidiaries that have been converted into or
                  exchanged for the Company's Equity Interests (other than
                  Disqualified Capital Stock) (including, without limitation, in
                  a merger, consolidation, acquisition of property or any other
                  form of transaction to the extent the consideration involved
                  consists of Capital Stock (other than Disqualified Capital
                  Stock)) subsequent to the date the Securities are first
                  issued; plus

                           (3) an amount equal to the sum, without duplication,
                  of:

                                    a. the net reduction in Investments (other
                           than Permitted Investments) made by the Company or
                           any of its Restricted Subsidiaries in any Person
                           resulting from repurchases, repayments or redemptions
                           of that Investment by that Person;

                                    b. proceeds realized on the sale of that
                           Investment to an unaffiliated purchaser; and

                                    c. proceeds representing the return of
                           capital (excluding dividends and distributions),

                                    in each case received by the Company or any
                           of the Company's Subsidiaries; plus

                           (4) an amount equal to the sum without limitation, of
                  any amounts, including the net fair market value of property
                  other than cash as determined by the Company's Board of
                  Directors in good faith, received by the Company or any of the
                  Company's Subsidiaries as a capital contribution (including,
                  without limitation, in a merger, consolidation, acquisition of
                  property or any other form of transaction to the extent the
                  consideration involved consists of Capital Stock (other than
                  Disqualified Capital Stock)) subsequent to the date the
                  Securities are first issued; plus

                           (5) $150 million.

                  (b) The provisions of Section 3.07(a) shall not prohibit:

                                      -32-
<PAGE>

                  (i) the payment of any dividend or the making of any
         distribution within 60 days after the date of its declaration if the
         dividend or distribution would have been permitted on the date it is
         declared;

                  (ii) the purchase, redemption or other acquisition or
         retirement of any of the Company's Capital Stock or any warrants,
         options or other rights to acquire shares of any of that Capital Stock
         either:

                           (1) solely in exchange for shares of Qualified
                  Capital Stock or other warrants, options or rights to acquire
                  Qualified Capital Stock,

                           (2) through the application of the net proceeds of a
                  substantially concurrent sale for cash, other than to one of
                  the Company's Subsidiaries, of shares of Qualified Capital
                  Stock or warrants, options or other rights to acquire
                  Qualified Capital Stock, or

                           (3) in the case of Disqualified Capital Stock, solely
                  in exchange for, or through the application of the net
                  proceeds of a substantially concurrent sale for cash, other
                  than to one of the Company's Subsidiaries, of Disqualified
                  Capital Stock;

                  (iii) repurchases of Capital Stock, warrants, options or
         rights to acquire Capital Stock deemed to occur upon exercise of
         warrants, options or rights to acquire Capital Stock if such Capital
         Stock, warrants, options or rights represent a portion of the exercise
         price of such warrants, options or rights;

                  (iv) payments or distributions, directly or indirectly through
         any direct or indirect parent of the Company, to dissenting
         stockholders pursuant to applicable law or in connection with the
         settlement or other satisfaction of legal claims made pursuant to or in
         connection with a consolidation, merger or transfer of assets;

                  (v) cash payments in lieu of the issuance of fractional
         shares;

                  (vi) payments of dividends, distributions or other amounts by
         the Company to fund the payment by any of the Company's direct or
         indirect parent companies or other Affiliates of administrative, legal,
         financial, accounting or other similar expenses relating to such
         parent's direct or indirect ownership of the Company and to pay other
         corporate overhead expenses relating to such ownership interest,
         including directors' fees, indemnifications and similar arrangements,
         so long as such payments are fair and reasonable and are paid as and
         when needed by any such direct or indirect parent company;

                  (vii) any transfers by the Company or any of its Restricted
         Subsidiaries pursuant to the cash management program of El Paso and its
         Subsidiaries consistent with past practices;

                                      -33-
<PAGE>

                  (viii) any payment, guarantee or other similar arrangement by
         the Company or any of its Subsidiaries in connection with, related to
         or arising from the Western Energy Settlement; and

                  (ix) any payment, guarantee or other similar arrangement by
         the Company or any of its Subsidiaries in connection with, related to
         or arising from El Paso's $3 Billion Facility and any Refinancing
         thereof and/or El Paso's Other Financings and any Refinancing thereof;
         provided, however, that the Company shall not make any payment,
         guarantee or other similar arrangement jointly and severally with El
         Paso in connection with a Refinancing of El Paso's $3 Billion Facility
         subsequent to the date that is the later of (1) August 19, 2003 and (2)
         the date on which the Company is no longer jointly and severally liable
         for any amounts outstanding under El Paso's $3 Billion Facility.

         In determining the aggregate amount of Restricted Payments made
subsequent to the date the Securities are first issued, amounts expended
pursuant to clauses (i) and (v) of Section 3.07(b) shall be included in such
calculation.

                  (c) The amount of all Restricted Payments (other than cash)
         shall be the fair market value on the date of such Restricted Payment
         of the asset(s) or securities proposed to be paid, transferred or
         issued by the Company or any of its Restricted Subsidiaries, as the
         case may be, pursuant to such Restricted Payment. The fair market value
         of any non-cash Restricted Payment shall be determined conclusively by
         the Company's Board of Directors acting in good faith.

                  (d) This Section 3.07 shall be of no force or effect from and
         after the time the Securities are first rated at least Baa3 by Moody's
         and at least BBB- by Standard & Poor's.

         Section 3.08 Limitation on Incurrence of Debt.

                  (a) The Company shall not, and shall not permit any of its
         Restricted Subsidiaries to, directly or indirectly, create, incur,
         issue, assume, guaranty or otherwise become directly or indirectly
         liable with respect to, contingently or otherwise (collectively,
         "incur"), any Debt (including Acquired Debt), unless (x) no Default or
         Event of Default would occur after giving effect on a pro forma basis
         to such incurrence, and (y) the Consolidated Debt to EBITDA Ratio on
         the date on which such additional Debt is incurred would have been less
         than 6.0 to 1, determined on a pro forma basis giving effect to such
         incurrence (including a pro forma application of the net proceeds
         therefrom).

                  (b) The limitation in Section 3.08(a) shall not prohibit the
         incurrence of:

                  (i) performance bonds, appeal bonds, surety bonds, insurance
         obligations or bonds and other similar bonds or obligations incurred in
         the ordinary course of business;

                                      -34-
<PAGE>

                  (ii) Hedging Obligations;

                  (iii) Debt owed by (1) any Restricted Subsidiaries to the
         Company or to any of the Company's other Subsidiaries or (2) the
         Company to any of the Company's Subsidiaries;

                  (iv) Debt outstanding on the date of this Indenture, including
         the Securities issued on the Initial Issue Date and Debt in connection
         with, related to or arising from El Paso's $3 Billion Facility and any
         Refinancing thereof and/or El Paso's Other Financings and any
         Refinancing thereof; provided, however, that the Company shall not
         incur any Debt jointly and severally with El Paso in connection with a
         Refinancing of El Paso's $3 Billion Facility subsequent to the date
         that is the later of (1) August 19, 2003 and (2) the date on which the
         Company is no longer jointly and severally liable for any amounts
         outstanding under El Paso's $3 Billion Facility;

                  (v) Debt issued in exchange for, or the proceeds of which are
         used to Refinance Debt including, without limitation, Acquired Debt,
         incurred pursuant to the Consolidated Debt to EBITDA Ratio set forth
         above or under clause (iv) above or this clause (v) (collectively,
         "Refinancing Debt"); provided that (1) the principal amount of such
         Refinancing Debt does not exceed the principal amount of Debt so
         Refinanced (plus the premiums and other amounts to be paid, and the
         out-of-pocket expenses reasonably incurred, in connection therewith)
         and (2) the Refinancing Debt has a Weighted Average Life to Maturity
         that is equal to or greater than the Weighted Average Life to Maturity
         of the Debt being Refinanced;

                  (vi) the guarantee by the Company or one or more of its
         Restricted Subsidiaries of Debt of the Company or one or more of its
         Restricted Subsidiaries that is not prohibited by another provision of
         this Indenture; or

                  (vii) other Debt in an aggregate principal amount at any one
         time outstanding not to exceed $150 million.

                  (c) (i) The Company shall not, directly or indirectly, incur
         any guarantee with respect to any Debt of any of its Affiliates (other
         than Debt of the Company, one or more Subsidiaries of the Company or of
         the Company and one or more of its Subsidiaries) and (ii) the Company
         shall not permit any of its Restricted Subsidiaries to, directly or
         indirectly, incur any guarantee with respect to any Debt of any of the
         Company's Affiliates (other than Debt of the Company, one or more
         Subsidiaries of the Company, of the Company and one or more of its
         Subsidiaries, Debt in connection with, related to or arising from El
         Paso's $3 Billion Facility and any Refinancing thereof, or Debt
         outstanding on the date hereof in connection with El Paso's Other
         Financings and any Refinancing thereof).

                  (d) This Section 3.08 shall be of no force or effect from and
         after the time the Securities are first rated at least Baa3 by Moody's
         and at least BBB- by Standard & Poor's.

                                      -35-
<PAGE>
         Section 3.09 Limitation on Participation in El Paso's Cash Management
Program.

                  (a) The Company shall not, and shall not permit any of its
         Restricted Subsidiaries to, directly or indirectly, participate in El
         Paso's and its Subsidiaries' cash management program if any default
         occurs or exists under any bond, debenture, note or other evidence of
         Debt for money borrowed or under any mortgage, indenture or instrument
         under which there may be issued or by which there may be secured or
         evidenced any Debt for money borrowed, in each case, by El Paso or any
         of its Subsidiaries (or the payment of which is guaranteed by El Paso
         or any of its Subsidiaries) whether such Debt or guarantee now exists,
         or is created after the date of this Indenture, if such default:

                  (i) is caused by a failure to pay principal of, or interest or
         premium, if any, on such Debt of El Paso prior to the expiration of the
         grace period provided in such Debt of El Paso on the date of such
         default (a "Payment Default"); or

                  (ii) results in the acceleration (without cure or revocation
         within five Business Days) of Debt of El Paso prior to its express
         maturity

                  and, in each case, the principal amount of any such Debt of
                  El Paso, together with the principal amount of any other such
                  Debt of El Paso under which there has been a Payment Default
                  or the maturity of which has been so accelerated, aggregates
                  $50 million or more, until such acceleration has been cured or
                  revoked or such payment of such Debt of El Paso has been made
                  in full.

                  (b) This Section 3.09 shall be of no force or effect from and
         after the time the Securities are first rated at least Baa3 by Moody's
         and at least BBB- by Standard & Poor's.

         Section 3.10 Limitation on Transactions with Affiliates.

                  (a) The Company shall not, and shall not permit any Restricted
         Subsidiary to, directly or indirectly, enter into or suffer to exist
         any transaction or series of related transactions (including the
         purchase, sale, transfer, assignment, lease, conveyance or exchange of
         any property or the rendering of any service) with, or for the benefit
         of, any of the Company's Affiliates (an "Affiliate Transaction"),
         unless:

                  (i) the terms of such Affiliate Transaction are:

                           (1) set forth in writing and

                           (2) no less favorable to the Company or such
                  Restricted Subsidiary, as the case may be, than those that
                  could be obtained in a comparable arm's-length transaction
                  with a Person that is not one of the

                                      -36-
<PAGE>

                  Company's Affiliates or, if there is no such comparable
                  transaction, on terms that are fair and reasonable to the
                  Company or such Restricted Subsidiary,

                  (ii) if such Affiliate Transaction involves aggregate payments
         or value in excess of $25 million, the Company's Board of Directors
         approves such Affiliate Transaction and, in its good faith judgment,
         believes that such Affiliate Transaction complies with clause (i)(2) of
         this Section 3.10(a), and

                  (iii) if such Affiliate Transaction involves aggregate
         payments or value in excess of $100 million, the Company shall obtain a
         written opinion from an Independent Financial Advisor to the effect
         that the consideration to be paid or received in connection with such
         Affiliate Transaction is fair, from a financial point of view, to the
         Company or the applicable Restricted Subsidiary, as the case may be.

                  (b) Notwithstanding the preceding limitation, the following
         shall not be Affiliate Transactions:

                  (i) any transaction or series of related transactions between
         the Company and one or more of its Subsidiaries or between two or more
         of its Subsidiaries;

                  (ii) any Restricted Payment permitted to be made pursuant to
         Section 3.07 or any Permitted Investment;

                  (iii) any employment agreement or other employee compensation
         plan or arrangement entered into by the Company or any of its
         Restricted Subsidiaries in the ordinary course of business;

                  (iv) indemnities of the Company's or any of its Restricted
         Subsidiaries' officers, directors and employees permitted by bylaw or
         statutory provisions;

                  (v) the payment of reasonable and customary regular fees to
         the Company's or any of its Restricted Subsidiaries' directors;

                  (vi) Affiliate Transactions and arrangements in effect on the
         Initial Issue Date of the Securities, including any modifications,
         extensions or renewals thereof that do not adversely affect the Company
         or any of its Restricted Subsidiaries;

                  (vii) Affiliate Transactions in connection with, related to or
         arising from the Western Energy Settlement, provided, that the
         Company's Board of Directors shall approve any amendment, supplement or
         modification of the Western Energy Settlement on terms that are fair
         and reasonable to the Company; and

                  (viii) Affiliate Transactions in connection with, related to
         or arising from El Paso's $3 Billion Facility and any Refinancing
         thereof and/or El Paso's Other Financings and any Refinancing thereof.

                                      -37-
<PAGE>

                  (c) This Section 3.10 shall be of no force or effect from and
         after the time the Securities are first rated at least Baa3 by Moody's
         and at least BBB- by Standard & Poor's.

         Section 3.11 Waiver of Stay, Extension or Usury Laws.

         The Company covenants hereby (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, (as a defense or otherwise) or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Company from paying all or any portion of the principal of, premium, if any,
Liquidated Damages, if any, and interest on or with respect to the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.

                                   ARTICLE IV

                         CONSOLIDATION, MERGER AND SALE

         Section 4.01 Limitation on Mergers and Consolidations.

                  (a) The Company shall not consolidate with or merge into any
         other Person or sell, lease or transfer all or substantially all of its
         properties and assets to any Person, unless:

                  (i) in the case of a merger, the Company is the surviving
         entity, or the Person formed by such consolidation or into which the
         Company is merged or the Person which acquires by sale or transfer, or
         which leases, all or substantially all of the properties and assets of
         the Company shall expressly assume, by an indenture supplemental
         hereto, executed and delivered to the Trustee, in form reasonably
         satisfactory to the Trustee, the due and punctual payment of the
         principal of and any premium and interest on all the Securities and the
         performance or observance of every covenant and condition of this
         Indenture on the part of the Company to be performed or observed;

                  (ii) immediately after giving effect to such transaction, no
         Default or Event of Default exists; and

                  (iii) the Company has delivered to the Trustee an Officers'
         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
         Article and that all conditions precedent herein provided for relating
         to such transaction have been complied with.

                                      -38-
<PAGE>

                  (b) Notwithstanding the foregoing, any Restricted Subsidiary
         may consolidate with, merge into or transfer all or part of its
         properties and assets to the Company or any other Restricted
         Subsidiary.

         Section 4.02 Successors Substituted.

         Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any sale, transfer or lease of all or substantially
all of the properties and assets of the Company in accordance with Section 4.01,
the successor Person formed by such consolidation or into which the Company 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 Company under
this Indenture with the same effect as if such successor Person had been named
originally as the Company herein, and thereafter, except in the case of a lease,
the predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.

                                   ARTICLE V

                              DEFAULTS AND REMEDIES

         Section 5.01 Events of Default.

         "Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event 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):

                  (a) default in the payment of any interest or Liquidated
         Damages, if any, upon any Security of that series when it becomes due
         and payable, and continuance of such default for a period of 30 days;
         or

                  (b) default in the payment of the principal of (or premium, if
         any, on) any Security of that series at its Maturity; or

                  (c) default in the performance, or breach, of any other term,
         covenant or warranty of the Company in this Indenture (other than a
         term, covenant or warranty a default in whose performance or whose
         breach is elsewhere in this Section specifically dealt with or which
         has expressly been included in this Indenture solely for the benefit of
         a series of Securities other than that series), and continuance of such
         default or breach for a period of 60 days after there has been given,
         by registered or certified mail, to the Company by the Trustee or to
         the Company and the Trustee by the Holders of at least 25% in principal
         amount of the outstanding Securities of that series a written notice
         specifying such default or breach and requiring it to be remedied and
         stating that such notice is a "Notice of Default" hereunder; or

                                      -39-
<PAGE>

                  (d) the Company pursuant to or within the meaning of any
         Bankruptcy Law (i) commences a voluntary case, (ii) consents to the
         entry of any order for relief against it in an involuntary case, (iii)
         consents to the appointment of a Custodian of it or for all or
         substantially all of its property, or (iv) makes a general assignment
         for the benefit of its creditors;

                  (e) a court of competent jurisdiction enters an order or
         decree under any Bankruptcy Law that (i) is for relief against the
         Company in an involuntary case, (ii) appoints a Custodian of the
         Company or for all or substantially all of its property, or (iii)
         orders the liquidation of the Company; and the order or decree remains
         unstayed and in effect for 90 days; or

                  (f) there shall be a default under any bond, debenture, note
         or other evidence of debt for money borrowed or under any mortgage,
         indenture or other instrument under which there may be issued or by
         which there may be secured or evidenced any debt for money borrowed by
         the Company or any of its Restricted Subsidiaries or under any
         guarantee of payment by the Company or any of its Restricted
         Subsidiaries of debt for money borrowed (other than a default under any
         debt of El Paso or one or more Subsidiaries of El Paso (other than the
         Company or any of its Restricted Subsidiaries) guaranteed by one or
         more of the Company's Restricted Subsidiaries), whether such debt or
         guarantee now exists or shall hereafter be created, and the effect of
         such default is to result in such debt becoming due prior to its stated
         maturity; provided, however, that no Event of Default under this clause
         (f) shall exist if all such defaults do not relate to such debt or such
         guarantees with an aggregate principal amount in excess of $25 million
         at the time outstanding; and provided further, that if such default
         under such bond, debenture, note or other evidence of debt for borrowed
         money or any mortgage, indenture or other instrument shall be cured by
         the Company or its Restricted Subsidiary, or be waived by the holders
         of such debt, in each case as may be permitted by such bond, debenture,
         note or other evidence of debt for borrowed money or any mortgage,
         indenture or other instrument, then the Event of Default under this
         clause (f) by reason of such default shall be deemed likewise to have
         been thereupon cured or waived.

         Subject to the provisions of Section 6.01 and Section 6.02, the Trustee
shall not be charged with knowledge of an Event of Default unless written notice
thereof shall have been given to a Responsible Officer at the Corporate Trust
Office of the Trustee by the Company, the Paying Agent, any Holder or an agent
of any Holder.

         Section 5.02 Acceleration.

         If an Event of Default with respect to the Securities of a series
(other than an Event of Default specified in clause (d) or (e) of Section 5.01
hereof with respect to the Company) occurs and is continuing, the Trustee may by
notice to the Company, or the Holders of at least 25% in principal amount of the
then outstanding Securities of that series may, by notice to the Company and the
Trustee, and the Trustee shall, upon the request of such Holders, declare the
principal of, premium, if any, on, accrued and unpaid

                                      -40-
<PAGE>

interest on, and Liquidated Damages, if any, on all then outstanding Securities
of that series (if not then due and payable) to be due and payable, and upon any
such declaration the same shall become and be immediately due and payable. If an
Event of Default specified in clause (d) or (e) of Section 5.01 hereof with
respect to the Company occurs, the principal of, premium, if any, on, accrued
and unpaid interest on, and Liquidated Damages, if any, on all Securities then
outstanding shall ipso facto become and be immediately due and payable without
any declaration, notice or other act on the part of the Trustee or any Holder.

         At any time after such a declaration of acceleration with respect to
the Securities of a series has been made and before a judgment for payment of
the money due has been obtained by the Trustee as hereinafter in this Article V,
the Holders of a majority in principal amount of the outstanding Securities of
that series, by written notice to the Company and the Trustee, may rescind and
annul such acceleration and its consequences if:

                  (a) all existing Events of Default, other than the non-payment
         of the principal of the Securities of a series which has become due
         solely by such declaration of acceleration, have been cured or waived;

                  (b) to the extent the payment of such interest is lawful,
         interest on overdue installments of interest and overdue principal,
         which has become due otherwise than by such declaration of
         acceleration, has been paid; and

                  (c) the rescission would not conflict with any judgment or
         decree of a court of competent jurisdiction.

         Section 5.03 Other Remedies.

         If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal of, or premium, if any,
Liquidated Damages, if any, or interest on the Securities of the affected series
or to enforce the performance of any provision of such Securities, this
Indenture or any Registration Rights Agreement.

         The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.

         Section 5.04 Waiver of Existing Defaults.

         Subject to Section 5.07 and Section 8.02, the Holders of a majority in
principal amount of the outstanding Securities of the affected series by notice
to the Trustee may waive an existing Default or Event of Default and its
consequences (including waivers obtained in connection with a tender offer or
exchange offer for such Securities or a solicitation of consents in respect of
such Securities, provided that in each case such offer or solicitation is made
to all Holders of such Securities then outstanding on equal terms),

                                      -41-
<PAGE>

except (a) a continuing Default or Event of Default in the payment of the
principal of, or premium, if any, or Liquidated Damages, if any, or interest on
such Securities or (b) a continuing Default in respect of a provision that under
Section 8.02 hereof cannot be amended without the consent of each Holder
affected. Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

         Section 5.05 Control by Majority.

         The Holders of a majority in principal amount of the Securities of the
affected series then outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it hereunder. However, the Trustee may refuse to
follow any direction that conflicts with applicable law or this Indenture, that
the Trustee determines may be unduly prejudicial to the rights of other Holders,
or that may involve the Trustee in personal liability; provided, however, that
the Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction. Prior to taking any action hereunder, the
Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action.

         Section 5.06 Limitations on Suits.

         Subject to Section 5.07 hereof, a Holder may pursue a remedy with
respect to this Indenture or the Securities only if:

                  (a) such Holder gives to the Trustee written notice of a
         continuing Event of Default;

                  (b) the Holders of at least 25% in principal amount of the
         Securities of the affected series then outstanding make a written
         request to the Trustee to pursue the remedy;

                  (c) such Holder or Holders offer to the Trustee indemnity
         satisfactory to the Trustee against any loss, liability or expense;

                  (d) the Trustee does not comply with the request within 60
         days after receipt of the request and the offer of indemnity; and

                  (e) during such 60-day period the Holders of a majority in
         principal amount of such Securities do not give the Trustee a direction
         inconsistent with the request.

         A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.

                                      -42-
<PAGE>

         Section 5.07 Rights of Holders to Receive Payment.

         Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal of, and premium, if any,
and interest on the Security, on or after the respective due dates expressed in
the Security, or to bring suit for the enforcement of any such payment on or
after such respective dates, is absolute and unconditional and shall not be
impaired or affected without the consent of such Holder.

         Section 5.08 Collection Suit by Trustee.

         If an Event of Default specified in clause (a) or (b) of Section 5.01
hereof occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Company for the
amount of principal and premium, if any, and interest (and Liquidated Damages,
if any) remaining unpaid on the Securities of the affected series, and interest
on overdue principal, premium, if any, and Liquidated Damages, if any and, to
the extent lawful, interest on overdue interest (and Liquidated Damages, if
any), and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

         Section 5.09 Trustee May File Proofs of Claim.

         The Trustee is authorized to file such proofs of claim and other papers
or documents and to take such actions, including participating as a member,
voting or otherwise, of any committee of creditors, as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company or its creditors or properties and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 6.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

                                      -43-
<PAGE>

         Section 5.10 Priorities.

         If the Trustee collects any money pursuant to this Article V, it shall
pay out the money in the following order:

                  First: to the Trustee for amounts due under Section 6.07
         hereof;

                  Second: to Holders for amounts due and unpaid on the
         Securities of the affected series for principal, premium, if any,
         Liquidated Damages, if any, and interest ratably, without preference or
         priority of any kind, according to the amounts due and payable on such
         Securities for principal, premium, if any, Liquidated Damages, if any,
         and interest, respectively; and

                  Third:  to the Company.

         The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Article V.

         Section 5.11 Undertaking for Costs.

         In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 5.07 hereof, or a suit by a Holder or Holders of more
than 10% in principal amount of the Securities of the affected series then
outstanding.

                                   ARTICLE VI

                                     TRUSTEE

         Section 6.01 Duties of Trustee.

                  (a) If an Event of Default has occurred and is continuing, the
         Trustee shall exercise such of the rights and powers vested in it by
         this Indenture, and use the same degree of care and skill in such
         exercise, as a prudent Person would exercise or use under the
         circumstances in the conduct of his own affairs.

                  (b) Except during the continuance of an Event of Default:

                  (i) the Trustee need perform only those duties that are
         specifically set forth in this Indenture and no others, and no implied
         covenants or obligations shall be read into this Indenture against the
         Trustee; and

                                      -44-
<PAGE>

                  (ii) in the absence of bad faith on its part, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture. However, with respect to certificates or opinions
         specifically required by any provision hereof to be furnished to it,
         the Trustee shall examine such certificates and opinions to determine
         whether or not, on their face, they appear to conform substantially to
         the requirements of this Indenture.

                  (c) The Trustee may not be relieved from liabilities for its
         own negligent action, its own negligent failure to act, or its own
         willful misconduct, except that:

                  (i) this paragraph does not limit the effect of paragraph (b)
         of this Section;

                  (ii) the Trustee shall not be liable for any error of judgment
         made in good faith by a Responsible Officer, unless it is proved that
         the Trustee was negligent in ascertaining the pertinent facts; and

                  (iii) the Trustee shall not be liable with respect to any
         action it takes or omits to take in good faith in accordance with a
         direction received by it pursuant to Section 5.05 hereof.

                  (d) Whether or not therein expressly so provided, every
         provision of this Indenture that in any way relates to the Trustee is
         subject to paragraphs (a), (b) and (c) of this Section.

                  (e) No provision of this Indenture shall require the Trustee
         to expend or risk its own funds or incur any liability.

                  (f) The Trustee shall not be liable for interest on any money
         received by it except as the Trustee may agree in writing with the
         Company. Money held in trust by the Trustee need not be segregated from
         other funds except to the extent required by law. All money received by
         the Trustee shall, until applied as herein provided, be held in trust
         for the payment of the principal of, and premium if any, and Liquidated
         Damages, if any, and interest on the Securities.

         Section 6.02 Rights of Trustee.

                  (a) The Trustee may rely conclusively on any document (whether
         in its original or facsimile form) believed by it to be genuine and to
         have been signed or presented by the proper Person. The Trustee need
         not investigate any fact or matter stated in the document.

                  (b) Before the Trustee acts or refrains from acting, it may
         require an Officers' Certificate or an Opinion of Counsel or both. The
         Trustee shall not be liable for any action it takes or omits to take in
         good faith in reliance on such

                                      -45-
<PAGE>

         Officers' Certificate or Opinion of Counsel. The Trustee may consult
         with counsel of its own selection and the advice of such counsel or any
         Opinion of Counsel shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted by it
         hereunder in good faith and in reliance thereon.

                  (c) The Trustee may act through agents or attorneys and shall
         not be responsible for the misconduct or negligence of any agent or
         attorney appointed with due care.

                  (d) The Trustee shall not be liable for any action it takes or
         omits to take in good faith which it believes to be authorized or
         within its rights or powers conferred upon it by this Indenture.

                  (e) Unless otherwise specifically provided in this Indenture,
         any demand, request, direction or notice from the Company shall be
         sufficient if signed by an Officer of the Company.

                  (f) The Trustee is not required to give any bond or surety
         with respect to the performance of its duties or the exercise of its
         powers under this Indenture.

                  (g) The Trustee's immunities and protections from liability
         and its right to indemnification in connection with the performance of
         its duties under this Indenture shall extend and be enforceable by the
         Trustee in each of its capacities hereunder and shall extend to the
         Trustee's officers, directors, agents and employees. Such immunities
         and protections and right to indemnity, together with the Trustee's
         right to compensation, shall survive the Trustee's resignation or
         removal, the discharge of this Indenture and final payment of the
         Securities.

                  (h) The permissive right of the Trustee to take the actions
         permitted by this Indenture shall not be construed as an obligation or
         duty to do so.

                  (i) Except for information provided by the Trustee concerning
         the Trustee, the Trustee shall have no responsibility for any
         information in any offering memorandum or other disclosure material
         distributed with respect to the Securities, and the Trustee shall have
         no responsibility for compliance with any state or federal securities
         laws in connection with the Securities.

                  (j) The Trustee may request that the Company deliver an
         Officers' Certificate setting forth the names of individuals and/or
         titles of officers authorized at such time to take specified actions
         pursuant to this Indenture, which Officers' Certificate may be signed
         by any person authorized to sign an Officers' Certificate, including
         any person specified as so authorized in any such certificate
         previously delivered and not superseded.

                  (k) The Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Indenture at the request
         or direction of any of the Holders pursuant to this Indenture, unless
         such Holders shall have offered to the Trustee security or indemnity
         satisfactory to the Trustee against the costs,

                                      -46-
<PAGE>

         expenses and liabilities which might be incurred by it in compliance
         with such request or direction.

         Section 6.03 Individual Rights of Trustee.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any of
its Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. However, the Trustee is subject to
Section 6.10 and Section 6.11 hereof.

         Section 6.04 Trustee's Disclaimer.

         The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities or any money paid to the Company or upon
the Company's direction under any provision hereof, it shall not be responsible
for the use or application of any money received by any Paying Agent other than
the Trustee and it shall not be responsible for any statement or recital herein
or any statement in the Securities other than its certificate of authentication.

         Section 6.05 Notice of Defaults.

         If a Default or Event of Default occurs and is continuing and it is
actually known to a Responsible Officer of the Trustee, the Trustee shall mail
to Holders a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of, or premium, if any, Liquidated Damages, if any, or interest on any
Security, the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice is
in the interests of Holders.

         Section 6.06 Reports by Trustee to Holders.

         On or before July 15 of each year, beginning with July 15, 2004, the
Trustee shall mail to Holders a brief report dated as of a date convenient to
the Trustee no more than 60 nor less than 45 days prior thereto, that complies
with TIA Section 313(a); provided, however, that if no event described in TIA
Section 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted. The Trustee also shall comply with TIA
Section 313(b). The Trustee shall also transmit by mail all reports as required
by TIA Sections 313(c) and 313(d).

         A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each securities exchange, if any, on which the Securities
are listed. The Company shall promptly notify the Trustee if and when the
Securities are listed on any stock exchange or delisted therefrom.

                                      -47-
<PAGE>

         Section 6.07 Compensation and Indemnity.

         The Company agrees to pay to the Trustee from time to time such
compensation as agreed to by the Company and the Trustee, for its acceptance of
this Indenture and its services hereunder. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. Subject
to the further provisions of this Section 6.07, the Company agrees to reimburse
the Trustee upon request for all reasonable disbursements, advances and expenses
incurred by it. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.

         The Company agrees to fully indemnify the Trustee or any predecessor
Trustee and their agents for and to hold them harmless against any and all loss,
liability, damage, claims, or expense (including taxes, other than taxes based
upon, measured by or determined by the income of the Trustee) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the reasonable costs and expenses of
defending itself against any claim (whether asserted by the Company, any Holder
or any other Person), except as set forth in the next paragraph. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
The Company shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel, and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.

         The Company shall not be obligated to reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through its own
negligence, willful misconduct or bad faith.

         To secure the payment obligations of the Company in this Section 6.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay principal of,
and premium, if any, and interest and Liquidated Damages, if any, on the
Securities. Such lien shall survive the satisfaction and discharge of this
Indenture.

         When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.01(d) or Section 5.01(e) hereof occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.

         The provisions of this Section 6.07 shall survive the termination of
this Indenture.

         Section 6.08 Replacement of Trustee.

         A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 6.08.

         The Trustee may resign and be discharged from the trust hereby created
by so notifying the Company. The Holders of a majority in principal amount of
the then outstanding

                                      -48-
<PAGE>

Securities may remove the Trustee by so notifying the Trustee and the Company.
The Company may remove the Trustee if:

                  (a) the Trustee fails to comply with Section 6.10 hereof;

                  (b) the Trustee is adjudged a bankrupt or an insolvent or an
         order for relief is entered with respect to the Trustee under any
         Bankruptcy Law;

                  (c) a Custodian or public officer takes charge of the Trustee
         or its property; or

                  (d) the Trustee otherwise becomes incapable of acting.

         If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities then outstanding may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.

         If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the Securities then outstanding
may petition (at the expense of the Company) any court of competent jurisdiction
at the expense of the Company for the appointment of a successor Trustee.

         If the Trustee fails to comply with Section 6.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

         A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 6.07 hereof. Notwithstanding replacement of the Trustee pursuant to
this Section 6.08 hereof, the obligations of the Company under Section 6.07
hereof shall continue for the benefit of the retiring Trustee.

         Section 6.09 Successor Trustee by Merger, etc.

         Subject to Section 6.10 hereof, if the Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Trustee.

         In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so

                                      -49-
<PAGE>

authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.

         Section 6.10 Eligibility; Disqualification.

         There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States,
any state thereof or the District of Columbia and authorized under such laws to
exercise corporate trust power, shall be subject to supervision or examination
by federal or state (or the District of Columbia) authority and shall have, or
be a Subsidiary of a bank or bank holding company having, a combined capital and
surplus of at least $50 million as set forth in its most recent published annual
report of condition.

         This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is
subject to and shall comply with the provisions of TIA Section 310(b) during the
period of time required by this Indenture. Nothing in this Indenture shall
prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b).

         Section 6.11 Preferential Collection of Claims Against Company.

         The Trustee is subject to and shall comply with the provisions of TIA
Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.

                                  ARTICLE VII

                       DISCHARGE OF INDENTURE; DEFEASANCE

         Section 7.01 Discharge of Indenture.

         Upon the request of the Company, this Indenture will cease to be of
further effect and the Trustee, at the expense of the Company, will execute
proper instruments acknowledging satisfaction and discharge of the Securities
and this Indenture when:

                  (a) either:

                  (i) all the Securities theretofore authenticated and delivered
         (other than destroyed, lost or stolen Securities that have been
         replaced or paid and Securities that have been subject to defeasance
         pursuant to Section 7.02 or 7.03) have been delivered to the Trustee
         for cancellation; or

                  (ii) all Securities not theretofore delivered to the Trustee
         for cancellation:

                                      -50-
<PAGE>

                           (1) have become due and payable by the mailing of a
                  notice of redemption or otherwise;

                           (2) will become due and payable within one year; or

                           (3) are to be called for redemption within 12 months
                  under arrangements reasonably satisfactory to the Trustee for
                  the giving of notice of redemption by the Trustee in the name,
                  and at the reasonable expense, of the Company;

                  and the Company has irrevocably deposited or caused to be
                  deposited with the Trustee funds in trust for the purpose in
                  an amount sufficient to pay and discharge, the entire Debt on
                  the Securities, including, if any, Liquidated Damages with
                  respect to the Securities, not theretofore delivered to the
                  Trustee for cancellation, for principal (and premium, if any)
                  and interest on the Securities to the date of such deposit (in
                  case of Securities that have become due and payable) or to the
                  Stated Maturity or redemption date, as the case may be;

                  (iii) the Company has paid or caused to be paid all sums
         payable under this Indenture by the Company; and

                  (iv) the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent provided in this Indenture relating to the satisfaction and
         discharge of the Securities and this Indenture have been complied with.

         After such delivery, the Trustee upon request of the Company shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
below.

         Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company in Sections 6.07, 7.05 and 7.06 shall survive such
satisfaction and discharge.

         Section 7.02 Legal Defeasance.

         The Company may, at its option and at any time, elect to have its
obligations discharged with respect to the outstanding Securities on a date the
conditions set forth in Section 7.04 are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means that the Company
will be deemed to have paid and discharged the entire Debt represented by the
outstanding Securities and to have satisfied all its other obligations under
such Securities and this Indenture insofar as such Securities are concerned (and
the Trustee, at the expense of the Company, shall, subject to Section 7.06,
execute instruments in form and substance reasonably satisfactory to the Trustee
and Company acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Securities to receive solely from the trust funds
described in Section 7.04 and as more fully set forth in

                                      -51-
<PAGE>

such Section, payments in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due, (b) the Company's
obligations with respect to such Securities under Sections 2.02, 2.03, 2.04,
2.05, 2.06, 2,07, 2.08, 2.11 and 3.02, (c) the rights, powers, trusts, duties,
and immunities of the Trustee hereunder (including claims of, or payments to,
the Trustee under or pursuant to Section 6.07) and the Company's obligations in
connection therewith and (d) this Article VII.

         Subject to compliance with this Article VII, the Company may exercise
its option under this Section 7.02 with respect to the Securities
notwithstanding the prior exercise of its option under Section 7.03 below with
respect to the Securities.

         Section 7.03 Covenant Defeasance.

         The Company may, at its option and at any time, elect to have its
obligations under Sections 3.05, 3.06, 3.07, 3.08, 3.09 and 3.10 released with
respect to the outstanding Securities on a date the conditions set forth in
Section 7.04 are satisfied (hereinafter, "Covenant Defeasance"). For this
purpose, Covenant Defeasance means that, with respect to the outstanding
Securities, the Company may fail to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 5.01, but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby. In addition, upon the Company's exercise of the
option in this Section 7.03, subject to the satisfaction of the conditions set
forth in Section 7.04, Sections 5.01(c), (d) and (e) shall not constitute Events
of Default.

         Notwithstanding any discharge or release of any obligations under this
Indenture pursuant to Section 7.02 or this Section 7.03, the Company's
obligations in Sections 2.03, 2.05, 2.06, 2.07, 2.08, 6.07, 7.05, 7.06 and 7.08
shall survive until such time as the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 6.07, 7.05 and 7.08 shall
survive.

         Section 7.04 Conditions to Legal Defeasance or Covenant Defeasance.

         The following shall be the conditions to application of Section 7.02 or
Section 7.03 to the outstanding Securities:

                  (a) (i) the Company has irrevocably deposited or caused to be
         deposited in trust for the benefit of the Holders with the Trustee or a
         Paying Agent or a trustee satisfactory to the Trustee and the Company,
         under the terms of an irrevocable trust agreement in form and substance
         satisfactory to the Trustee and any such Paying Agent, (x) money in an
         amount sufficient, or (y) U.S. Government Obligations that shall be
         payable as to principal and interest in such amounts and at such times
         as are sufficient, in the opinion of a nationally recognized firm of
         independent public accountants or Independent Financial Advisors
         expressed

                                      -52-
<PAGE>

         in a written certification thereof delivered to the Trustee (without
         consideration of any reinvestment of such interest), or (z) a
         combination thereof in an amount, sufficient to pay the principal of
         (and premium, if any, on) and interest, if any, to Stated Maturity (or
         redemption) on such Securities, on the scheduled due dates therefor,
         (ii) the trustee of the irrevocable trust has been irrevocably
         instructed to pay such money or the proceeds of such U.S. Government
         Obligations to the Trustee and (iii) the Trustee or Paying Agent shall
         have been irrevocably instructed in writing to apply the deposited
         money and the proceeds from U.S. Government Obligations in accordance
         with the terms of this Indenture and the terms of the Securities to the
         payment of principal of and interest on the Securities;

                  (b) the deposit described in clause (a) above will not result
         in a breach or violation of, or constitute a Default under, any other
         material agreement or instrument to which the Company is a party or by
         which it is bound;

                  (c) no Default has occurred and is continuing (i) as of the
         date of such deposit (other than a Default resulting from the borrowing
         of funds to be applied to such deposit and the grant of any Lien
         securing such borrowing) or (ii) insofar as clause (d) or (e) of
         Section 5.01 is concerned at any time during the period ending on the
         91st day after the date of such deposit or, if longer, ending on the
         day following the expiration of the longest preference period
         applicable to the Company in respect of such deposit (it being
         understood that the condition in this clause (c) is a condition
         subsequent and will not be deemed satisfied until the expiration of
         such period);

                  (d) the Company has paid or caused to be paid all sums
         currently due and payable by the Company under this Indenture and under
         the Securities;

                  (e) the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent provided for in this Indenture relating to the termination by
         the Company of its obligations have been complied with;

                  (f) in the case of an election under Section 7.02 or 7.03, the
         Company has delivered to the Trustee an Opinion of Counsel to the
         effect that the Holders of such Securities will not recognize income,
         gain or loss for United States federal income tax purposes as a result
         of such Legal Defeasance or Covenant Defeasance and will be subject to
         United States federal income tax on the same amounts, in the same
         manner and at the same times as would have been the case if such Legal
         Defeasance or Covenant Defeasance had not occurred, and such opinion,
         in the case of Legal Defeasance under Section 7.02, must refer to and
         be based upon a ruling of the Internal Revenue Service or a change in
         applicable United States federal income tax law occurring after the
         date of this Indenture. The defeasance would in each case be effective
         when 91 days have passed since the date of the deposit in trust.

                                      -53-
<PAGE>

         Section 7.05 Deposited Money and U.S. Government Obligations To Be Held
                      in Trust; Other Miscellaneous Provisions.

         All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 7.04 in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal,
premium, if any, and accrued interest, but such money need not be segregated
from other funds except to the extent required by law.

         The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 7.04 or the principal, premium, if any, and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities.

         Anything in this Article VII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon a request of
the Company any money or U.S. Government Obligations held by it as provided in
Section 7.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.

         Section 7.06 Reinstatement.

         If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 7.01, 7.02 or 7.03 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article VII until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with Section
7.01; provided that if the Company has made any payment of principal of,
premium, if any, or accrued interest on any Securities because of the
reinstatement of their obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or U.S. Government Obligations held by the Trustee or Paying Agent.

         Section 7.07 Moneys Held by Paying Agent.

         In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon written demand of the Company, be paid to the Trustee, or if
sufficient moneys have been deposited pursuant to Section 7.04, to the Company
upon a written request of the Company,

                                      -54-
<PAGE>

and thereupon such Paying Agent shall be released from all further liability
with respect to such moneys.

         Section 7.08 Moneys Held by Trustee.

         Any moneys deposited with the Trustee or any Paying Agent or then held
by the Company in trust for the payment of the principal of, or premium, if any,
or interest on any Securities that are not applied but remain unclaimed by the
Holder of such Securities for two years after the date upon which the principal
of, or premium, if any, or interest on such Securities shall have respectively
become due and payable shall be repaid to the Company upon a written request of
the Company, or if such moneys are then held by the Company in trust, such
moneys shall be released from such trust; and the Holder of such Securities
entitled to receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company for the payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided that the Trustee or any such Paying Agent, before
being required to make any such repayment, shall, at the expense of the Company,
either mail to each Holder affected, at the address shown in the register of the
Securities maintained by the Registrar pursuant to Section 2.03, or cause to be
published once a week for two successive weeks, in a newspaper published in the
English language, customarily published each Business Day and of general
circulation in the City of New York, New York, a notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such mailing or publication, any unclaimed balance of
such moneys then remaining will be repaid to the Company. After payment to the
Company or the release of any money held in trust by the Company, Holders
entitled to the money must look only to the Company for payment as general
creditors unless applicable abandoned property law designates another Person.

                                  ARTICLE VIII

                                   AMENDMENTS

         Section 8.01 Without Consent of Holders.

         The Company and the Trustee may amend or supplement this Indenture or
any of the Securities or waive any provision hereof or thereof without the
consent of any Holder:

                  (a) to cure any ambiguity, omission, defect or inconsistency;

                  (b) to comply with Section 4.01 and Section 4.02 hereof;

                  (c) to provide for uncertificated Securities in addition to or
         in place of certificated Securities;

                  (d) to add any additional Events of Default;

                  (e) to provide for the acceptance of appointment hereunder of
         a successor trustee in compliance with the provisions hereof;

                                      -55-
<PAGE>

                  (f) to secure the Securities pursuant to the requirements
         under this Indenture;

                  (g) to comply with any requirement in order to effect or
         maintain the qualification of this Indenture under the TIA;

                  (h) to comply with any requirements of the SEC in connection
         with qualifying this Indenture under the TIA;

                  (i) to add to the covenants of the Company for the benefit of
         the Holders or to surrender any right or power herein conferred upon
         the Company; or

                  (j) to make any change that does not adversely affect the
         rights hereunder of any Holder in any material respect.

         Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company authorizing the execution of any such
supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 8.06 hereof, the Trustee shall join with the Company in the
execution of any supplemental indenture authorized or permitted by the terms of
this Section 8.01 becomes effective, the Company shall mail to the Holders of
each Security affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

         Section 8.02 With Consent of Holders.

         Except as provided below in this Section 8.02, the Company and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent (including consents obtained in connection with a tender offer
or exchange offer for the Securities or a solicitation of consents in respect of
the Securities; provided that in each case such offer or solicitation is made to
all Holders of the Securities then outstanding on equal terms) of the Holders of
at least a majority in principal amount of the Securities then outstanding.

         Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 8.06 hereof, the Trustee shall join with the
Company in the execution of such supplemental indenture.

         It shall not be necessary for the consent of the Holders under this
Section 8.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.

         The Holders of a majority in principal amount of the Securities then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Securities (including waivers obtained in
connection with a tender offer

                                      -56-
<PAGE>

or exchange offer for the Securities or a solicitation of consents in respect of
the Securities, provided that in each case such offer or solicitation is made to
all Holders of the Securities then outstanding on equal terms).

         Without the consent of each Holder affected, an amendment, supplement
or waiver under this Section may not:

                  (a) reduce the percentage of principal amount of the
         Securities whose Holders must consent to an amendment, supplement or
         waiver;

                  (b) reduce the rate of or change the time for payment of
         interest, including default interest, on any Security;

                  (c) reduce the principal of or change the fixed maturity of
         any Security or alter the premium or other provisions with respect to
         redemption specified in the Securities;

                  (d) change the place of payment or make any Security payable
         in money other than that stated in the Security;

                  (e) impair the right to institute suit for the enforcement of
         any payment of principal of, or premium, if any, or interest on any
         Security pursuant to Section 5.07 and Section 5.08 hereof, except as
         limited by Section 5.06 hereof;

                  (f) make any change in the percentage of principal amount of
         the Securities necessary to waive compliance with certain provisions of
         this Indenture pursuant to Section 5.04 or Section 5.07 hereof or this
         clause of this Section 8.02; or

                  (g) waive a continuing Default or Event of Default in the
         payment of principal of, or premium, if any, or interest on the
         Securities.

         The right of any Holder to participate in any consent required or
sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of the Securities with respect to which such consent is required or sought as of
a date identified by the Trustee in a notice furnished to Holders in accordance
with the terms of this Indenture.

         Section 8.03 Compliance with Trust Indenture Act.

         Every amendment to this Indenture or the Securities shall comply in
form and substance with the TIA as then in effect.

         Section 8.04 Revocation and Effect of Consents.

         A consent to an amendment (which includes a supplement) or waiver by a
Holder is a continuing consent by the Holder and every subsequent Holder of a
Security or portion

                                      -57-
<PAGE>

of a Security that evidences the same debt as the consenting Holder's Security,
even if notation of the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to his or her Security or
portion of a Security if the Trustee receives written notice of revocation at
any time prior to (but not after) the date the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Securities have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.

         The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver or to take any other action under this Indenture. If a record date is
fixed, then notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date. No
consent shall be valid or effective for more than 90 days after such record date
unless consents from Holders of the principal amount of the Securities required
hereunder for such amendment or waiver to be effective shall have also been
given and not revoked within such 90-day period.

         After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it is of the type described in any of clauses (a)
through (g) of Section 8.02 hereof. In such case, the amendment or waiver shall
bind each Holder who has consented to it and every subsequent Holder that
evidences the same debt as the consenting Holder's Security.

         Section 8.05 Notation on or Exchange of Securities.

         If an amendment changes the terms of a Security, the Trustee may
require the Holder of the Security to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Security regarding the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.

         Section 8.06 Trustee to Sign Amendments, etc.

         The Trustee shall sign any amendment, waiver or supplemental indenture
authorized pursuant to this Article VIII if the amendment, waiver or
supplemental indenture does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may, but need not, sign
it. In signing or refusing to sign such amendment, waiver or supplemental
indenture, the Trustee shall receive, and subject to Section 6.01 hereof, shall
be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate, as conclusive evidence that such amendment, waiver or supplemental

                                      -58-
<PAGE>

indenture is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms.

                                   ARTICLE IX

                                   REDEMPTION

         Section 9.01 Notices to Trustee.

         If the Company elects to redeem Securities pursuant to the redemption
provisions specified in the Securities, it shall furnish to the Trustee, at
least 45 days but not more than 60 days before a Redemption Date (unless the
Trustee consents in writing to a shorter period of at least 30 days prior to the
Redemption Date), an Officers' Certificate setting forth the Redemption Date,
the principal amount of such Securities to be redeemed and the Redemption Price.

         Section 9.02 Selection of Securities to be Redeemed.

         If less than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed on a pro rata basis, by lot or by any
other method that the Trustee in its sole discretion shall deem fair and
appropriate. The particular Securities to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 days nor more than 60 days prior to
the Redemption Date by the Trustee from the outstanding Securities not
previously called for redemption.

         The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, the principal amount thereof to be redeemed. Securities and
portions of them selected shall be in amounts of $1,000 or whole multiples of
$1,000. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.

         Section 9.03 Notices to Holders.

                  (a) At least 30 days but not more than 60 days before a
         Redemption Date, the Company shall mail in conformity with Section
         10.02 a notice of redemption to each Holder whose Securities are to be
         redeemed.

         The Notice shall identify the Securities to be redeemed (including
CUSIP numbers, if any) and shall state:

                  (i) the Redemption Date;

                  (ii) the Redemption Price;

                  (iii) if any Security is being redeemed in part, the portion
         of the principal amount of such Security to be redeemed and that, after
         the Redemption Date,

                                      -59-
<PAGE>

         upon surrender of such Security, a new Security or Securities in
         principal amount equal to the unredeemed portion will be issued;

                  (iv) the name and address of the Paying Agent;

                  (v) that Securities called for redemption must be surrendered
         to the Paying Agent at the address specified in such notice to collect
         the Redemption Price;

                  (vi) that unless the Company defaults in making the redemption
         payment, interest on Securities called for redemption ceases to accrue
         on and after the Redemption Date and the only remaining right of the
         Holders is to receive payment of the Redemption Price upon surrender to
         the Paying Agent of the Securities; and

                  (vii) the aggregate principal amount of Securities being
         redeemed.

         If any of the Securities to be redeemed is in the form of a Global
Security, then the Company shall modify such notice to the extent necessary to
accord with the procedures of the Depositary applicable to redemptions.

                  (b) At the Company's request, the Trustee shall give the
         notice required in Section 9.03(a) in the Company's name; provided,
         however, that the Company shall deliver to the Trustee, at least 45
         days prior to the Redemption Date (unless the Trustee consents in
         writing to a shorter period at least 30 days prior to the Redemption
         Date), an Officers' Certificate requesting that the Trustee give such
         notice and setting forth the information to be stated in such notice as
         provided in Section 9.03(a).

         Section 9.04 Effect of Notices of Redemption.

         Once notice of redemption is mailed pursuant to Section 9.03,
Securities called for redemption become due and payable on the Redemption Date
at the Redemption Price. Upon surrender to the Paying Agent, such Securities
shall be paid out at the Redemption Price.

         Section 9.05 Deposit of Redemption Price.

         At or prior to 11:00 a.m. New York City time on the Redemption Date,
the Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the Redemption Price of all Securities to be redeemed on that
date. The Trustee or the Paying Agent shall return to the Company any money not
required for that purpose less the expenses of the Trustee as provided herein.

         If the Company complies with the preceding paragraph, interest on the
Securities or portions thereof to be redeemed (whether or not such Securities
are presented for payment) will cease to accrue on the applicable Redemption
Date. If any Security called for redemption shall not be so paid upon surrender
because of the failure of the Company to

                                      -60-
<PAGE>

comply with the preceding paragraph, then interest will be paid on the unpaid
principal and premium, if any, from the Redemption Date until such principal and
premium are paid and, to the extent lawful, on any interest not paid on such
unpaid principal, in each case at the rate provided in the Securities and in
Section 3.01.

         Section 9.06 Securities Redeemed in Part.

         Upon surrender of a Security that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder, at the expense of
the Company, a new Security equal in principal amount to the unredeemed portion
of the Security surrendered.

                                   ARTICLE X

                                  MISCELLANEOUS

         Section 10.01 Trust Indenture Act Controls.

         If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control. If this Indenture excludes any provision
of the TIA that is required to be included, such provision shall be deemed
included herein.

         Section 10.02 Notices.

         Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next day delivery, to the other's address:

         If to the Company:

                  El Paso Natural Gas Company
                  El Paso Building
                  1001 Louisiana Street
                  Houston, Texas  77002
                  Telecopier No.:  (713) 420-4099
                  Attention:  Corporate Secretary

         If to the Trustee:

                  Wilmington Trust Company
                  Rodney Square North
                  1100 North Market Street
                  Wilmington, Delaware 19890-0001
                  Attention:  Corporate Trust Administration

         Each of the Company and the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.

                                      -61-
<PAGE>

         All notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Notwithstanding the foregoing, notices to the Trustee shall be effective only
upon receipt.

         Any notice or communication to a Holder shall be mailed by first-class
mail, postage prepaid, to the Holder's address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.

         If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.

         If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.

         All notices or communications, including without limitation notices to
the Trustee or the Company by Holders, shall be in writing, except as set forth
below, and in the English language.

         In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice required by
this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.

         Section 10.03 Communication by Holders with Other Holders.

         Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).

         Section 10.04 Certificate and Opinion as to Conditions Precedent.

         Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall, if requested by the Trustee,
furnish to the Trustee:

                  (a) an Officers' Certificate (which shall include the
         statements set forth in Section 10.05 hereof) stating that, in the
         opinion of the signers, all conditions precedent and covenants, if any,
         provided for in this Indenture relating to the proposed action have
         been complied with; and

                  (b) an Opinion of Counsel (which shall include the statements
         set forth in Section 10.05 hereof) stating that, in the opinion of such
         counsel, all such conditions precedent and covenants have been complied
         with.

                                      -62-
<PAGE>

         Section 10.05 Statements Required in Certificate or Opinion.

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

                  (a) a statement that the Person making 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 such Person, he has
         made such examination or investigation as is necessary to enable him to
         express an informed opinion as to whether or not such covenant or
         condition has been complied with; and

                  (d) a statement as to whether or not, in the opinion of such
         Person, such condition or covenant has been complied with.

         Section 10.06 Rules by Trustee and Agents.

         The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or the Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

         Section 10.07 Legal Holidays.

         If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.

         Section 10.08 No Recourse Against Others.

         A director, officer, employee or stockholder of the Company or of any
Affiliate as such, shall not have any liability for any obligations of the
Company under the Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation by reason of his,
her or its status as such. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.

         Section 10.09 Governing Law.

         THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUCTED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. TO THE FULLEST EXTENT IT
MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE COMPANY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE

                                      -63-
<PAGE>

BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE COMPANY IRREVOCABLY CONSENTS, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE COMPANY AT ITS ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTWITHSTANDING THE FOREGOING, NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER OF SECURITIES TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.

         Section 10.10 No Adverse Interpretation of Other Agreements.

         This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company, or any other Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

         Section 10.11 Successors.

         All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.

         Section 10.12 Severability.

         In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

         Section 10.13 Counterpart Originals.

         The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.

                                      -64-
<PAGE>

         Section 10.14 Table of Contents, Headings, etc.

         The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.

                                      -65-
<PAGE>

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

                                    Company:

                                    EL PASO NATURAL GAS COMPANY

                                    By:  /s/ GREG G. GRUBER
                                       ---------------------------------------
                                       Name:  Greg G. Gruber
                                       Title: Senior Vice President, Chief
                                              Financial Officer and Treasurer

                                    Trustee:

                                    WILMINGTON TRUST COMPANY

                                    By:  /s/ STEVEN CIMALORE
                                       ---------------------------------------
                                       Name:  Steven Cimalore
                                       Title: Vice President

                                      -66-
<PAGE>

                                                                       EXHIBIT A

                               [FACE OF SECURITY]

                           [Global Securities Legend]

         [UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. THE DEPOSITORY TRUST COMPANY SHALL ACT AS THE DEPOSITARY UNTIL A
SUCCESSOR SHALL BE APPOINTED BY THE COMPANY AND THE REGISTRAR. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](1)

         [Transfer Restricted Securities Legend]

         [(1) THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. 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.

         (2) THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED

----------
(1)      This paragraph should be included only if the Security is a Global
         Security.

                                      A-1
<PAGE>

INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (V) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
INVESTOR" FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN EACH
OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A) ABOVE.

         (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR
AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND; AND

         (4) AGREES THAT, BEFORE THE HOLDER OFFERS, SELLS OR OTHERWISE TRANSFERS
THIS SECURITY, EL PASO NATURAL GAS COMPANY MAY REQUIRE THE HOLDER OF THIS
SECURITY TO DELIVER A WRITTEN OPINION, CERTIFICATIONS AND/OR OTHER INFORMATION
THAT IT REASONABLY REQUIRES TO CONFIRM THAT SUCH PROPOSED TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE UNITED
STATES.

         AS USED IN THIS SECURITY, THE TERMS "OFFSHORE TRANSACTION," "U.S.
PERSON" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT.(2)

----------
(2)      These paragraphs should be included only if the Security is a Transfer
         Restricted Security.

                                      A-2
<PAGE>

                           EL PASO NATURAL GAS COMPANY

                        7 5/8% Series [A/B] Note due 2010

                                                           CUSIP [             ]

No. [        ]                                                     $[          ]

         El Paso Natural Gas Company, a Delaware corporation (the "Company"),
for value received promises to pay to [                     ] or registered
assigns, the principal sum of [             ] United States Dollars [or such
greater or lesser amount as is indicated on the Schedule of Exchanges of
Securities on the other side of this Security*] on August 1, 2010.

         Interest Payment Dates:            February 1 and August 1

         Record Dates:                      January 15 and July 15

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

----------
*        This phrase should be included only if the Security is a Global
         Security.

                                      A-3
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.

                                              EL PASO NATURAL GAS COMPANY

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

Certificate of Authentication:

         Dated:

WILMINGTON TRUST COMPANY, as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.

By:
   --------------------------------
   Authorized Signatory

                                      A-4
<PAGE>

                              [REVERSE OF SECURITY]

                           EL PASO NATURAL GAS COMPANY

                        7 5/8% Series [A/B] Note due 2010

         This Security is one of a duly authorized issue of 7 5/8% Series [A/B]
Notes due August 1, 2010 (the "Securities") of El Paso Natural Gas Company, a
Delaware corporation (the "Company").

         1. Interest. The Company promises to pay interest on the principal
amount of this Security at 7 5/8% per annum from [ ] until maturity. The Company
will pay interest semiannually on February 1 and August 1 of each year (each an
"Interest Payment Date"), or if any such day is not a Business Day, on the next
succeeding Business Day. Interest on the Securities will accrue from the most
recent Interest Payment Date on which interest has been paid or, if no interest
has been paid, from [ ]; provided that if there is no existing Default in the
payment of interest, and if this Security is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be [ ] and interest accrued
from [ ] shall be payable on such date. Further, the Company shall pay interest
on overdue principal and premium, if any, from time to time on demand at a rate
equal to the interest rate then in effect; it shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

         2. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest) to the Persons who are registered Holders of
Securities at the close of business on the record date next preceding the
Interest Payment Date, even if such Securities are canceled after such record
date and on or before such Interest Payment Date. The Holder must surrender this
Security to a Paying Agent to collect payments of principal and premium, if any.
The Company will pay the principal of, and premium, if any, and interest on the
Securities in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium, if
any, Liquidated Damages, if any, and interest) will be made by wire transfer of
immediately available funds to the accounts specified by The Depository Trust
Company. The Company will make all payments in respect of a certificated
Security (including principal, premium, if any, Liquidated Damages, if any, and
interest) by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on a certificated Security will be made by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 30 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).

                                      A-5
<PAGE>

         3. Ranking. The Securities are senior unsecured obligations of the
Company.

         4. Optional Redemption. The Securities may be redeemed, in whole or
part, at the Company's option at any time in whole, or from time to time in
part, prior to August 1, 2007, at the Make-Whole Price (as defined below) in
accordance with the provisions of the Indenture.

         "Make-Whole Price" means an amount equal to the greater of

         (i) 100% of the principal amount of the Securities then outstanding to
be redeemed, and

         (ii) as determined by an Independent Investment Banker, the sum of the
present values of (A) the redemption price of the Securities at August 1, 2007
(as set forth below) and (B) the remaining scheduled payments of interest from
the Redemption Date to August 1, 2007 (not including any portion of such
payments of interest accrued as of the Redemption Date) discounted back to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 75 basis points,

plus, in the case of both (i) and (ii), accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date. Unless the Company defaults
in the payment of the Make-Whole Price, on and after the applicable Redemption
Date, interest shall cease to accrue on the Securities to be redeemed.

         "Comparable Treasury Issue" means the U.S. Treasury security selected
by an Independent Investment Banker as having a maturity comparable to the
remaining term of the Securities to be redeemed 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 Securities.

         "Comparable Treasury Price" means, with respect to any Redemption Date,
(i) the average of four Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations.

         "Independent Investment Banker" means Citigroup Global Markets Inc. or
Credit Suisse First Boston LLC and their respective successors at the Company's
option, or, if such firms or the successors, if any, to such firms, as the case
may be, are unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by the
Company.

         "Reference Treasury Dealer" means Citigroup Global Markets Inc. or
Credit Suisse First Boston LLC, at the Company's option, and three additional
primary U.S. government securities dealers in New York City (each a "Primary
Treasury Dealer") selected by the Company, and their respective successors;
provided, however, that if any such firm or any such successor, as the case may
be, shall cease to be a primary U.S.

                                      A-6
<PAGE>
government securities dealer in New York City, the Company shall substitute
therefore another Primary Treasury Dealer.

         "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.

         "Treasury Rate" means, with respect to any Redemption Date, (i) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication that is published weekly by
the Board of Governors of the Federal Reserve System and that establishes yields
on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the Stated Maturity, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined, and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding to the nearest month) or (ii) if
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date. The Treasury Rate shall be calculated
on the third Business Day preceding the Redemption Date.

         The notice of redemption with respect to the foregoing redemption need
not set forth the Make-Whole Price but only the manner of calculation thereof.
The Company shall notify the Trustee of the Make-Whole Price with respect to any
redemption promptly after the calculation thereof, and the Trustee shall not be
responsible for such calculation.

         Beginning on August 1, 2007, the Company may redeem the Securities, in
whole or in part, at the Company's option at any time or from time to time, at
the following redemption prices (expressed as percentages of principal amount),
plus accrued and unpaid interest and Liquidated Damages, if any, to the
applicable Redemption Date, if redeemed during the 12-month period beginning on
each August 1 of the years indicated below:

<Table>
<Caption>
Year                                    Percentage
----                                    ----------
<S>                                     <C>
2007                                     103.813%
2008                                     101.906%
2009 and thereafter                      100.000%
</Table>

                                      A-7
<PAGE>

         5. Paying Agent and Registrar. Initially, Wilmington Trust Company (the
"Trustee"), the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar, co-registrar or
additional paying agent without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.

         6. Indenture. The Company issued the Securities under an Indenture
dated as of July 21, 2003 (as amended, supplemented or otherwise modified form
time to time, the "Indenture") between the Company and the Trustee. The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code Sections 77aaa-77bbbb), as in effect on the date of execution of the
Indenture (the "TIA"). The Securities are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of such terms. The
Securities are unsecured general obligations of the Company. Capitalized terms
used but not defined in this Security have the respective meanings given to such
terms in the Indenture. The Company may issue Additional Securities under the
Indenture subject to compliance with Section 3.08 thereof, unlimited in
aggregate principal amount.

         7. Denominations, Transfer, Exchange. The Securities are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not exchange or register the transfer of any
Securities during the period between a record date and the corresponding
Interest Payment Date.

         8. Persons Deemed Owners. The registered Holder of a Security shall be
treated as its owner for all purposes.

         9. Amendments and Waivers. Subject to certain exceptions and
limitations, the Indenture or the Securities may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
then outstanding Securities, and compliance in a particular instance by the
Company with any provision of the Indenture may be waived (other than certain
provisions, including any continuing Default or Event of Default in the payment
of the principal of, or premium, if any, or interest on the Securities) by the
Holders of at least a majority in principal amount of the Securities then
outstanding in accordance with the terms of the Indenture. Without the consent
of any Holder, the Company and the Trustee may amend or supplement the Indenture
or the Securities to cure any ambiguity, omission, defect or inconsistency; to
comply with the Indenture in the case of the merger, consolidation or sale or
other disposition of all or substantially all of the assets of the Company; to
provide for uncertificated Securities in addition to or in place of certificated
Securities; to add any additional Events of Default; to provide for the
acceptance under the Indenture of a successor trustee in compliance with the
provisions thereof; to secure the Securities pursuant to the requirements under
the Indenture; to comply with any requirements in order to effect or maintain
the qualification of the Indenture under the TIA; to comply with any
requirements of the SEC

                                      A-8
<PAGE>
of the Indenture under the TIA; to comply with any requirements of the SEC in
connection with qualifying the Indenture under the TIA; to add to the covenants
of the Company for the benefit of the Holders or to surrender any power
conferred upon the Company; or to make any change that does not adversely affect
the rights of any Holder in any material respect.

         The right of any Holder to participate in any consent required or
sought pursuant to any provision of the Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date identified by the Trustee in a notice furnished to Holders in accordance
with the terms of the Indenture.

         Without the consent of each Holder affected, the Company may not (i)
reduce the percentage of principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver, (ii) reduce the rate of or change
the time for payment of interest, including default interest, on any Security,
(iii) reduce the principal of or change the fixed maturity of any Security or
alter the premium or other provisions with respect to redemption, (iv) change
the place of payment or make any Security payable in money other than that
stated in the Security, (v) impair the right to institute suit for the
enforcement of any payment of principal of, or premium, if any, or interest on
any Security, (vi) make any change in the percentage of principal amount of
Securities necessary to waive compliance with certain provisions of the
Indenture or (vii) waive a continuing Default or Event of Default in the payment
of principal of, or premium, if any, or interest on the Securities.

         10. Defaults and Remedies. Generally, an Event of Default occurs if:
(i) the Company defaults in the payment of any interest or Liquidated Damages,
if any, on any Security when it becomes due and payable, and the default
continues for 30 days; (ii) the Company defaults in the payment of the principal
of, or premium, if any, on, any Security at its Maturity; (iii) the Company
defaults in the performance, or breach, of any other term, covenant or warranty
of the Company in the Indenture, and the default or breach continues for a
period of 60 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in principal amount of the outstanding Securities of that series
a written notice specifying the default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; (iv)
certain events of bankruptcy or liquidation with respect to the Company occur;
or (v) the Company defaults under any debt or under any instrument under which
there may be issued or by which there may be secured or evidenced any debt for
money borrowed by the Company or any of its Restricted Subsidiaries or under any
guarantee of payment by the Company or any of its Restricted Subsidiaries of
debt for money borrowed (other than a default under any debt of El Paso or one
or more Subsidiaries of El Paso (other than the Company or any of its Restricted
Subsidiaries) guaranteed by one or more of the Company's Restricted
Subsidiaries), whether such debt or guarantee now exists or shall hereafter be
created, and the effect of such default is

                                      A-9
<PAGE>
to result in such debt becoming due prior to its stated maturity; provided,
however, that no Event of Default under this clause (v) shall exist if all such
defaults do not relate to such debt or such guarantees with an aggregate
principal amount in excess of $25 million at the time outstanding; and provided
further, that if such default under such bond, debenture, note or other evidence
of debt for borrowed money or mortgage, indenture or other instrument shall be
cured by the Company or its Restricted Subsidiary, or be waived by the holders
of such debt, in each case as may be permitted by such bond, debenture, note or
other evidence of debt for borrowed money or any mortgage, indenture or other
instrument, then the Event of Default under this clause (v) by reason of such
default shall be deemed likewise to have been thereupon cured or waived.

         If an Event of Default (other than an Event of Default specified in
clause (iv) above) occurs and is continuing, the Trustee may, by notice to the
Company, or the Holders of at least 25% in principal amount of the then
outstanding Securities may declare by notice to the Company and the Trustee, and
the Trustee shall, upon the request of such Holders the principal of, premium,
if any, and accrued and unpaid interest and Liquidated Damages, if any, on all
then outstanding Securities (if not then due and payable) to be immediately due
and payable, and upon any such declaration the same shall become and be
immediately due and payable. The amount due and payable upon the acceleration of
any Security is equal to 100% of the principal amount thereof plus premium, if
any, and accrued and unpaid interest and Liquidated Damages, if any, to the date
of payment. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. If an Event of Default specified in clause (iv) above
with respect to the Company occurs, the principal of, premium, if any, on,
accrued and unpaid interest on, and Liquidated Damages, if any, on all
Securities then outstanding shall ipso facto become and be immediately due and
payable without any declaration, notice or other act on the part of the Trustee
or any Holder.

         11. Discharge Prior to Maturity. The Indenture shall be discharged and
canceled upon the payment of all of the Securities and shall be discharged
except for certain obligations upon the irrevocable deposit with the Trustee of
funds or U.S. Government Obligations sufficient for such payment.

         12. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.

         13. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company or of any Affiliate shall not have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation by reason of his, her or its status as such. Each
Holder by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Securities.

                                      A-10
<PAGE>

         14. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.

         15. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed thereon.

         16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

         17. Governing Law. THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED
BY AND CONSTRUCTED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE COMPANY IRREVOCABLY CONSENTS, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE COMPANY AT ITS ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTWITHSTANDING THE FOREGOING, NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER OF SECURITIES TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.

                                      A-11
<PAGE>

         18. [Additional Rights and Obligations of Holders of Transfer
Restricted Securities. In addition to the rights provided to Holders of
Securities under the Indenture, Holders of Transfer Restricted Securities shall
have all the rights set forth in the Registration Rights Agreement applicable to
such Securities. Each Holder of a Transfer Restricted Security , by his
acceptance thereof, acknowledges and agrees to the provisions of such
Registration Rights Agreement, including without limitation the obligations of
the Holders with respect to a registration and the indemnification of the
Company to the extent provided therein.].**

         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:

                  El Paso Natural Gas Company
                  El Paso Building
                  1001 Louisiana Street
                  Houston, Texas  77002
                  Telecopier No.:  (713) 420-4099
                  Attention:  Corporate Secretary

----------
**       This paragraph should be included only if the Security is a Transfer
         Restricted Security.

                                      A-12
<PAGE>

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below: (I) or (we) assign and transfer
this Security to
                 --------------------------------------

--------------------------------------------------------------------------------
             (Insert assignee's social security or tax I.D. number)

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

--------------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint ___________________________________________________ as
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.

Date:
     ----------------------------

Your Signature:
               -----------------------------------------------------------------
               (Sign exactly as your name appears on the face of this Security)

Signature Guarantee:
                    ------------------------------------------------------------
              (Participant in a Recognized Signature Guaranty Medallion Program)

In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred as specified below:

                                    CHECK ONE

(1) [ ]             to the Company or a Subsidiary thereof; or

(2) [ ]             to a "qualified institutional buyer" (as defined in Rule
                    144A under the Securities Act of 1933) that purchases for
                    its own account or for the account of a qualified
                    institutional buyer to whom notice is given that such
                    transfer is being made in reliance on Rule 144A, in each
                    case pursuant to and in compliance with Rule 144A under the
                    Securities Act of 1933; or

(3) [ ]             outside the United States to a "foreign person" in
                    compliance with Rule 904 of Regulation S under the
                    Securities Act of 1933; or

(4) [ ]             to an institutional "accredited investor" (within the
                    meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
                    under the Securities Act of 1933); or

                                      A-13
<PAGE>

(5) [ ]             pursuant to an effective registration statement under the
                    Securities Act of 1933; or

(6) [ ]             pursuant to an exemption from the registration requirements
                    of the Securities Act of 1933, provided by Rule 144
                    thereunder.

and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933 (an "Affiliate"):

         [ ] The transferee is an Affiliate of the Company.

         Unless one of items (1) through (6) above is checked, the Trustee will
refuse to register any of the Securities evidenced by this certificate in the
name of any person other than the registered Holder thereof; provided, however,
that if item (3), (4) or (5) is checked, the Company or the Trustee may require,
prior to registering any such transfer of the Securities, in their sole
discretion, such written legal opinions, certifications (including an investment
letter, and in the case of a transfer pursuant to item (3) or (4), a Regulation
S Letter or Transferee Letter, in each case, in substantially the form set forth
below) and other information as the Trustee or the Company have reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933.

         If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.06 of the Indenture shall have
been satisfied.

                                        Signed:
                                               ---------------------------------
                                               (Sign exactly as your name
                                               appears on the other side of
                                               this Security)

Signature Guarantee:
                    ------------------------------------------------------------

                                      A-14
<PAGE>

              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

         The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933 and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.

Dated:
      -------------------      -------------------------------------------------
                               Notice: to be executed by an executive officer***

----------
***      These paragraphs should be included only if the Security is a Transfer
         Restricted Security.

                                      A-15
<PAGE>

                   FORM OF REGULATION S LETTER TO BE DELIVERED
              IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S

                                                           [             ], [  ]

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention:  Corporate Trust Administration

         Re:  7 5/8% Series A Notes due 2010 of El Paso Natural Gas Company

Ladies and Gentlemen:

         In connection with our proposed sale of $[        ] principal
amount of the above referenced Securities (the "Securities"), we confirm that
such sale has been effected pursuant to and in accordance with Regulation S
under the Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, we represent that:

                  (i) the offer of the Securities was not made to a person in
         the United States;

                  (ii) at the time the buy order was originated, the transferee
         was outside the United States or we and any person acting on our behalf
         reasonably believed that the transferee was outside the United States;

                  (iii) no directed selling efforts have been made by us in the
         United States in contravention of the requirements of Rule 903(b) or
         Rule 904(b) of Regulation S, as applicable; and

                  (iv) the transaction is not part of a plan or scheme to evade
         the registration requirements of the Securities Act.

                                      A-16
<PAGE>

         You and El Paso Natural Gas Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used but not defined
in this letter have the meanings set forth in Regulation S under the Securities
Act.

                                                  Very truly yours,

                                                  [Name of Transferor]

                                                  By:
                                                     ---------------------------
                                                     Authorized Signature

                                      A-17
<PAGE>

                            FORM OF TRANSFEREE LETTER
                       TO BE DELIVERED IN CONNECTION WITH
                    TRANSFERS TO NON-QIB ACCREDITED INVESTORS

                                                           [             ], [  ]

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention:  Corporate Trust Administration

         Re:   7 5/8% Series A Notes due 2010 of El Paso Natural Gas Company

         In connection with our proposed purchase of $[ ] principal amount of
the above referenced Securities (the "Securities"), we confirm that:

                  (i) We have received such information as we deem necessary in
         order to make our investment decision.

                  (ii) We understand that any subsequent transfer of the
         Securities or any interest therein is subject to certain restrictions
         and conditions set forth in the Indenture and the undersigned agrees to
         be bound by, and not to resell, pledge or otherwise transfer the
         Securities or any interest therein except in compliance with, such
         restrictions and conditions and the United States Securities Act of
         1933, as amended (the "Securities Act").

                  (iii) We understand that the offer and sale of the Securities
         have not been registered under the Securities Act, and that the
         Securities and any interest therein may not be offered or sold except
         as permitted in the following sentence. We agree, on our own behalf and
         on behalf of any accounts for which we are acting as hereinafter
         stated, that if we should sell the Securities or any interest therein,
         we will do so only (A) to the Company or any subsidiary thereof, (B) in
         accordance with Rule 144A under the Securities Act to a "qualified
         institutional buyer" (as defined therein), (C) to an institutional
         "accredited investor" (as defined below) that, prior to such transfer,
         furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
         you and to the Company a signed letter substantially in the form of
         this letter, (D) outside the United States in accordance with Rule 904
         of Regulation S under the Securities Act, (E) pursuant to the
         provisions of Rule 144(k) under the Securities Act or (F) pursuant to
         an effective registration statement under the Securities Act, and we
         further agree to provide to any person purchasing the certificated
         Security or beneficial interest in a Global Security from the Company
         in a transaction meeting the requirements of clauses (A) through (E) of
         this paragraph a notice advising such purchaser that resales thereof
         are restricted as stated herein.

                                      A-18
<PAGE>

                  (iv) We understand that, on any proposed resale of the
         Security or beneficial interest therein, we will be required to furnish
         to you and the Company such certifications, legal opinions and other
         information as you and the Company may reasonably require to confirm
         that the proposed sale complies with the foregoing restrictions. We
         further understand that the Security purchased by the Company will bear
         a legend to the foregoing effect.

                  (v) We are an institutional "accredited investor" (as defined
         in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
         Act) and have such knowledge and experience in financial and business
         matters as to be capable of evaluating the merits and risks of our
         investment in the Security, and we and any accounts for which we are
         acting are each able to bear the economic risk of our or its
         investment.

                  (vi) We are acquiring the Security or beneficial interest
         therein purchased by the Company for our own account or for one or more
         accounts (each of which is an institutional "accredited investor") as
         to each of which we exercise sole investment discretion.

         You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.

                                            ------------------------------------
                                            [Insert Name of Accredited Investor]

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

                                      A-19
<PAGE>

                    SCHEDULE OF EXCHANGES OF SECURITIES***

The following exchanges, redemptions or repurchases of a part of this Global
Security have been made:

<Table>
<Caption>
                                                                            PRINCIPAL AMOUNT OF          SIGNATURE OF
                                                                              GLOBAL SECURITY        AUTHORIZED SIGNATORY
                          AMOUNT OF DECREASE      AMOUNT OF INCREASE IN       FOLLOWING SUCH            OF TRUSTEE OR
        DATE OF           IN PRINCIPAL AMOUNT      PRINCIPAL AMOUNT OF           DECREASE                 SECURITIES
      TRANSACTION         OF GLOBAL SECURITY         GLOBAL SECURITY           (OR INCREASE)              CUSTODIAN
      -----------         -------------------     ---------------------     -------------------      --------------------
<S>                       <C>                     <C>                       <C>                      <C>

</Table>

----------
*** This Schedule should be included only if the Security is a Global Security.

                                      A-20<PAGE>
                                                                    EXHIBIT 10.1

                          REGISTRATION RIGHTS AGREEMENT

                                   DATED AS OF

                                  JULY 21, 2003

                                      AMONG

                           EL PASO NATURAL GAS COMPANY

                                       AND

                          CITIGROUP GLOBAL MARKETS INC.
                         CREDIT SUISSE FIRST BOSTON LLC
                         BANC OF AMERICA SECURITIES LLC
                       TOKYO-MITSUBISHI INTERNATIONAL PLC
                                       AND
                         SG COWEN SECURITIES CORPORATION

<PAGE>
                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of July 21, 2003, by and among El Paso Natural Gas Company (the
"COMPANY"), a corporation duly organized and existing under the laws of the
State of Delaware, and the several initial purchasers listed on Schedule I
hereto (the "INITIAL PURCHASERS").

         This Agreement is made pursuant to the Purchase Agreement dated July
16, 2003, by and among the Company and the Initial Purchasers (the "PURCHASE
AGREEMENT"), which provides for the sale by the Company to the Initial
Purchasers of $355,000,000 principal amount of its 7 5/8% Senior Notes due 2010
(the "SECURITIES"). The Securities are to be issued pursuant to the provisions
of an Indenture dated as of July 21, 2003 (as amended, supplemented or otherwise
modified from time to time, the "INDENTURE") by and among the Company and
Wilmington Trust Company, as trustee (the "TRUSTEE").

         In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide to each Initial Purchaser and its
direct and indirect transferees the registration rights with respect to the
Securities set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreement.

         In consideration of the foregoing, the parties hereto agree as follows:

         1.       Definitions.

         As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

         "1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.

         "1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.

         "AGREEMENT" shall have the meaning set forth in the preamble.

         "BUSINESS DAY" shall have the meaning set forth in Rule 13e-4(a)(3)
under the 1934 Act.

         "CLOSING DATE" shall mean the Closing Date as defined in the Purchase
Agreement.

         "COMPANY" shall have the meaning set forth in the preamble and shall
also include the Company's successors.

         "EXCHANGE DATES" shall have the meaning set forth in Section 2(a)(ii).

         "EXCHANGE OFFER" shall mean the exchange offer by the Company of
Exchange Securities for all Securities that are Registrable Securities pursuant
to Section 2(a) hereof.

<PAGE>

         "EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.

         "EXCHANGE OFFER REGISTRATION STATEMENT" shall mean a registration
statement on Form S-4 (or, if applicable, on another appropriate form) relating
to an offering of Exchange Securities pursuant to an Exchange Offer and all
amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

         "EXCHANGE SECURITIES" shall mean any securities issued by the Company
to be offered to Holders in exchange for Securities (pursuant to the Exchange
Offer or otherwise) pursuant to an Exchange Offer Registration Statement
containing terms identical in all material respects to the Securities for which
they are exchanged (except that (i) interest thereon shall accrue from the last
date on which interest was paid on the Securities or, if no such interest has
been paid, from the date of issuance of the Securities, (ii) the Exchange
Securities will not contain the legend appearing on the face of the Securities
in the form recited in the Indenture and will not contain terms with respect to
transfer restrictions and (iii) the Exchange Securities will not contain terms
with respect to the payment of liquidated damages).

         "HOLDER" shall mean each Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture; provided that for purposes of Sections 4 and 5 of this
Agreement, the term "Holder" shall include Participating Broker-Dealers (as
defined in Section 4(a)).

         "INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(c).

         "INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(c).

         "INDENTURE" shall have the meaning set forth in the preamble.

         "INITIAL PURCHASERS" shall have the meaning set forth in the preamble.

         "LIQUIDATED DAMAGES" shall have the meaning set forth in Section 2(e).

         "MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities; provided that,
for purposes of Section 6(b), whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or any of its affiliates (as such
term is defined in Rule 405 under the 1933 Act) (other than the Initial
Purchasers or subsequent Holders of Registrable Securities if such subsequent
Holders are deemed to be such affiliates solely by reason of their holding of
such Registrable Securities) shall not be considered outstanding and shall not
be counted in determining whether such consent or approval was given by the
Holders of such required percentage or amount.

         "PARTICIPANT" shall have the meaning set forth in Section 5(a).

         "PARTICIPATING BROKER-DEALER" shall have the meaning set forth in
Section 4(a) hereof.

                                      -2-
<PAGE>

         "PERSON" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.

         "PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
all material incorporated by reference therein.

         "PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.

         "REGISTRABLE SECURITIES" shall mean the Securities; provided, however,
that the Securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Securities shall have been declared
effective under the 1933 Act and such Securities shall have been exchanged for
Exchange Securities pursuant to an Exchange Offer Registration Statement or
disposed of pursuant to a Shelf Registration Statement, as applicable, (ii) such
Securities have been sold to the public pursuant to Rule 144 under the 1933 Act
or are saleable pursuant to Rule 144(k) (or any similar provision then in force,
but not Rule 144A) under the 1933 Act or (iii) such Securities shall have ceased
to be outstanding.

         "REGISTRATION DEFAULT" shall have the meaning set forth in Section
2(e).

         "REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities), (iii) all expenses of any Person
in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating
to the qualification of the Indenture under applicable securities laws, (vi) the
fees and disbursements of the Trustee and its counsel, (vii) the fees and
disbursements of counsel for the Company and, in the case of a Shelf
Registration Statement, the reasonable fees and disbursements of one counsel for
the Holders (which counsel shall be selected by the Majority Holders and which
counsel may also be counsel for the Initial Purchasers) and (viii) the fees and
disbursements of the independent public accountants of the Company, including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, but excluding fees of counsel to
the Underwriters (other than the fees and expenses set forth in clause (ii)
above) and the Holders and underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of Registrable Securities by
a Holder.

         "REGISTRATION STATEMENT" shall mean any registration statement of the
Company that covers any of the Exchange Securities or the Registrable Securities
pursuant to the provisions of

                                      -3-
<PAGE>

this Agreement and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.

         "SEC" shall mean the Securities and Exchange Commission.

         "SECURITIES" shall have the meaning set forth in the preamble.

         "SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.

         "SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) of this
Agreement which covers all of the Registrable Securities (but no other
securities unless approved by the Holders of a majority of the aggregate
principal amount of outstanding Registrable Securities that are covered by such
Shelf Registration Statement) on an appropriate form under Rule 415 under the
1933 Act, or any similar rule that may be adopted by the SEC, and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.

         "TIA" shall have the meaning set forth in Section 3(1) hereof.

         "TRUSTEE" shall have the meaning set forth in the preamble.

         "UNDERWRITER" shall have the meaning set forth in Section 3 hereof.

         "UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING" shall mean a
registration in which Registrable Securities are sold to an Underwriter for
reoffering to the public.

         2.       Registration under the 1933 Act.

         (a) To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the SEC, the Company shall (1) cause to be filed
an Exchange Offer Registration Statement within 90 days following the Closing
Date covering the offer by the Company to the Holders to exchange all of the
Registrable Securities for an equal aggregate principal amount of Exchange
Securities and (2) use its reasonable best efforts to cause such Exchange Offer
Registration Statement to become effective within 210 days following the Closing
Date. The Company shall use its reasonable best efforts to have the Exchange
Offer Registration Statement remain effective until the closing of the Exchange
Offer. The Company shall commence the Exchange Offer promptly after the Exchange
Offer Registration Statement has been declared effective by the SEC and use its
reasonable best efforts to have the Exchange Offer consummated not later than 30
Business Days after such effective date. The Company shall commence the Exchange
Offer by mailing the related exchange offer Prospectus and accompanying
documents to each Holder stating, in addition to such other disclosures as are
required by applicable law:

                  (i) that the Exchange Offer is being made pursuant to this
         Agreement and that all Registrable Securities validly tendered will be
         accepted for exchange;

                                      -4-
<PAGE>

                  (ii) the dates of acceptance for exchange (which shall be a
         period of at least 20 Business Days from the date such notice is
         mailed) (the "EXCHANGE DATES");

                  (iii) that any Registrable Security not tendered will remain
         outstanding and continue to accrue interest, but will not retain any
         rights under this Agreement;

                  (iv) that Holders electing to have a Registrable Security
         exchanged pursuant to the Exchange Offer will be required to surrender
         such Registrable Security, together with the enclosed letters of
         transmittal, to the institution and at the address specified in the
         notice prior to the close of business on the last Exchange Date; and

                  (v) that Holders will be entitled to withdraw their election,
         not later than the close of business on the last Exchange Date, by
         sending to the institution and at the address (located in the Borough
         of Manhattan, The City of New York) specified in the notice, a
         telegram, telex, facsimile transmission or letter setting forth the
         name of such Holder, the principal amount of Registrable Securities
         delivered for exchange and a statement that such Holder is withdrawing
         his election to have such Registrable Securities exchanged.

         As soon as practicable after the last Exchange Date, the Company shall:

                           (A) accept for exchange Registrable Securities or
                  portions thereof tendered and not validly withdrawn pursuant
                  to the Exchange Offer; and

                           (B) deliver, or cause to be delivered, to the Trustee
                  for cancellation all Registrable Securities or portions
                  thereof so accepted for exchange by the Company and issue, and
                  cause the Trustee to promptly authenticate and mail to each
                  Holder, an Exchange Security equal in aggregate principal
                  amount to the aggregate principal amount of the Registrable
                  Securities surrendered by such Holder.

         The Company shall use its reasonable best efforts to complete the
Exchange Offer as provided above and shall comply with the applicable
requirements of the 1933 Act, the 1934 Act and other applicable laws and
regulations in connection with the Exchange Offer. The Exchange Offer shall not
be subject to any conditions, other than that the Exchange Offer does not
violate applicable law or any applicable interpretation of the staff of the SEC.
The Company shall inform the Initial Purchasers of the names and addresses of
the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall
have the right, subject to applicable law, to contact such Holders and otherwise
facilitate the tender of Registrable Securities in the Exchange Offer.

         If, during the period the Exchange Offer Registration Statement is
effective, an event occurs which makes any statement made in such Exchange Offer
Registration Statement or the related Prospectus untrue in any material respect
or which requires the making of any changes in such Exchange Offer Registration
Statement in order to make the statements therein not misleading or in such
Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, the Company shall use
its reasonable best efforts to prepare and file with the SEC a supplement or
post-effective amendment to the Exchange Offer Registration Statement or the
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the

                                      -5-
<PAGE>

purchasers of the Registrable Securities, such Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The Company agrees to notify the Holders to suspend
the exchange of the Registrable Securities as promptly as practicable after the
occurrence of such an event, and the Holders hereby agree to suspend such
exchange until the Company has amended or supplemented the Prospectus to correct
such misstatement or omission.

         (b) If (i) the Company determines that the Exchange Offer Registration
provided for in Section 2(a) above is not available or may not be consummated as
soon as practicable after the last Exchange Date because it would violate
applicable law or the applicable interpretations of the staff of the SEC, (ii)
the Exchange Offer is not for any other reason consummated within 260 days
following the Closing Date or (iii) in the written opinion of counsel for the
Holders a Shelf Registration Statement must be filed and a Prospectus must be
delivered by any Holder in connection with any reoffering or resale of
Registrable Securities, the Company shall (x) file with the SEC within 75 days
following such determination, date or notice of such opinion of counsel is given
to the Company a Shelf Registration Statement providing for the resale by the
Holders (other than those who fail to comply with the paragraph immediately
following clause (p) of Section 3) of all of their Registrable Securities and
(y) use its reasonable best efforts to cause such Shelf Registration Statement
to become effective within 60 days of the filing of such Shelf Registration
Statement. If the Company is required to file a Shelf Registration Statement
solely as a result of the matters referred to in clause (iii) of the preceding
sentence, the Company shall use its reasonable best efforts to file and have
declared effective by the SEC both an Exchange Offer Registration Statement
pursuant to Section 2(a) with respect to all Registrable Securities and a Shelf
Registration Statement (which may be a combined Registration Statement with the
Exchange Offer Registration Statement) with respect to reoffers and resales of
Registrable Securities held by the Holders who must deliver the related
Prospectus. The Company agrees to use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective until the expiration of the
period referred to in Rule 144(k) of the 1933 Act with respect to the
Registrable Securities or such shorter period that will terminate when all of
the Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or cease to be Registrable
Securities within the meaning of this Agreement. The Company further agrees to
supplement or amend the Shelf Registration Statement if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the 1933 Act or by any other
rules and regulations thereunder for shelf registration or if reasonably
requested by a Holder with respect to information relating to such Holder, and
to use its reasonable best efforts to cause any such amendment to become
effective and such Shelf Registration Statement to become usable as soon as
thereafter practicable. The Company agrees to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly after
its being used or filed with the SEC.

         (c) The Company shall pay all Registration Expenses in connection with
the registration pursuant to Section 2(a) or Section 2(b). Each Holder shall pay
all underwriting discounts, if any, and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to a Shelf Registration Statement.

                                      -6-
<PAGE>
         (d) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC; provided, however, that, if, after it has been declared effective, the
offering of Registrable Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Registration Statement
will be deemed not to have become effective during the period of such
interference until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume.

         (e) The Company and the Initial Purchasers agree that the Holders will
suffer damages if the Company fails to fulfill its obligations under Section
2(a) or Section 2(b) hereof and that it would not be feasible to ascertain the
extent of such damages with precision. Accordingly, the Company agrees that if

                  (i) the Exchange Offer Registration Statement is not filed
         with the SEC on or prior to the 90th day following the Closing Date,

                  (ii) the Exchange Offer Registration Statement is not declared
         effective on or prior to the 210th day following the Closing Date,

                  (iii) the Exchange Offer is not completed on or prior to the
         260th day following the Closing Date, or

                  (iv) the Shelf Registration Statement is required to be filed
         but is not filed or declared effective within the time period set forth
         herein or is declared effective but thereafter ceases to be effective
         or usable prior to the expiration of the period referred to in Rule
         144(k) with respect to the Registrable Securities other than after the
         Registrable Securities have been disposed of under the Shelf
         Registration Statement or cease to be Registrable Securities, without
         being succeeded within two Business Days by a post-effective amendment
         which cures the failure and that is itself immediately declared
         effective (each such event referred to in clauses (i) through (iv) a
         "REGISTRATION DEFAULT"), liquidated damages ("LIQUIDATED DAMAGES") will
         accrue on the affected Registrable Securities and the affected Exchange
         Securities, as applicable. The rate of Liquidated Damages will be 0.25%
         per annum of the principal amount of Registrable Securities held by
         such Holder for the first 90-day period immediately following the
         occurrence of a Registration Default, increasing by 0.25% per annum
         with respect to each subsequent 90-day period, up to a maximum of 1.00%
         per annum, from and including the date on which any such Registration
         Default shall occur to, but excluding, the earlier of (1) the date on
         which all Registration Defaults have been cured or (2) the date on
         which all the Registrable Securities and Exchange Securities otherwise
         become freely transferable by Holders other than affiliates of the
         Securities without further registration under the 1933 Act.

                  Notwithstanding the foregoing, (1) the amount of Liquidated
         Damages payable shall not increase because more than one Registration
         Default has occurred and is pending and (2) a Holder of Registrable
         Securities or Exchange Securities who is not entitled to the benefits
         of the Shelf Registration Statement (i.e., such Holder has not elected
         to

                                      -7-
<PAGE>
         including information) shall not be entitled to Liquidated Damages with
         respect to a Registration Default that pertains to the Shelf
         Registration Statement.

         (f) The Company shall notify the Trustee within one Business Day after
each date on which an event occurs in respect of which Liquidated Damages are
required to be paid. Any amounts of Liquidated Damages due pursuant to this
Section 2 will be payable in addition to any other interest payable from time to
time with respect to the Registrable Securities in cash semi-annually on the
interest payment dates specified in the Indenture (to the holders of record as
specified in the Indenture), commencing with the first such interest payment
date occurring after any such Liquidated Damages commence to accrue. The amount
of Liquidated Damages will be determined in a manner consistent with the
calculation of interest under the Indenture.

         (g) Without limiting the remedies available to the Holders, the Company
acknowledges that any failure by the Company to comply with its obligations
under Section 2(a) and Section 2(b) hereof may result in material irreparable
injury to the Holders for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in the
event of any such failure, the Initial Purchasers or any Holder may obtain such
relief as may be required to specifically enforce the Company's obligations
under Section 2(a) and Section 2(b) hereof.

         3.       Registration Procedures.

         In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the
Company shall as expeditiously as possible (provided, however, that the Company
shall not be required to take actions more promptly than required by Sections
2(a) and 2(b)):

                  (a) prepare and file with the SEC a Registration Statement on
         the appropriate form under the 1933 Act, which form shall (x) be
         selected by the Company, (y) in the case of a Shelf Registration, be
         available for the sale of the Registrable Securities by the selling
         Holders thereof and (z) comply as to form in all material respects with
         the applicable requirements of the 1933 Act and rules and regulations
         promulgated thereunder and include all financial statements required by
         the SEC to be filed therewith, and use reasonable best efforts to cause
         such Registration Statement to become effective and remain effective in
         accordance with Section 2 hereof;

                  (b) prepare and file with the SEC such amendments and
         post-effective amendments to each Registration Statement as may be
         necessary to keep such Registration Statement effective for the
         applicable period and cause each Prospectus to be supplemented by any
         required prospectus supplement and, as so supplemented, to be filed
         pursuant to Rule 424 under the 1933 Act; and keep each Prospectus
         current during the period described under Section 4(3) and Rule 174
         under the 1933 Act that is applicable to transactions by brokers or
         dealers with respect to the Registrable Securities or Exchange
         Securities;

                  (c) in the case of a Shelf Registration, furnish to each
         Holder of Registrable Securities, to counsel for the Initial Purchasers
         and to counsel for the Holders and to each

                                      -8-
<PAGE>

         Underwriter of an Underwritten Offering of Registrable Securities, if
         any, without charge, as many copies of each Prospectus, including each
         preliminary Prospectus and any amendment or supplement thereto and such
         other documents as such Holder or Underwriter may reasonably request,
         in order to facilitate the public sale or other disposition of the
         Registrable Securities; and, subject to Section 3(i), the Company
         consents to the use of such Prospectus and any amendment or supplement
         thereto in accordance with applicable law by each of the selling
         Holders of Registrable Securities and any such Underwriters in
         connection with the offering and sale of the Registrable Securities
         covered by and in the manner described in such Prospectus or any
         amendment or supplement thereto in accordance with applicable law;

                  (d) use its reasonable best efforts to register or qualify the
         Registrable Securities under all applicable state securities or blue
         sky laws of such jurisdictions as any Holder of Registrable Securities
         covered by a Registration Statement shall reasonably request in writing
         by the time the applicable Registration Statement is declared effective
         by the SEC, and to cooperate with such Holders in connection with any
         filings required to be made with the National Association of Securities
         Dealers, Inc. and do any and all other acts and things which may be
         reasonably necessary or advisable to enable such Holder to consummate
         the disposition in each such jurisdiction of such Registrable
         Securities owned by such Holder; provided, however, that the Company
         shall not be required to (i) qualify as a foreign corporation or as a
         dealer in securities in any jurisdiction where it would not otherwise
         be required to qualify but for this Section 3(d), (ii) file any general
         consent to service of process or (iii) subject itself to taxation in
         any such jurisdiction if it is not so subject;

                  (e) in the case of a Shelf Registration, notify each Holder of
         Registrable Securities, counsel for the Holders and counsel for the
         Initial Purchasers (or, if applicable, separate counsel for the
         Holders) promptly and, if requested by any such Holder or counsel,
         confirm such advice in writing, (i) when a Registration Statement has
         become effective and when any post-effective amendment thereto has been
         filed and becomes effective, (ii) of any request by the SEC or any
         state securities authority for amendments and supplements to a
         Registration Statement and Prospectus or for additional information
         after the Registration Statement has become effective, (iii) of the
         issuance by the SEC or any state securities authority of any stop order
         suspending the effectiveness of a Registration Statement or the
         initiation of any proceedings for that purpose, (iv) if, between the
         effective date of a Registration Statement and the closing of any sale
         of Registrable Securities covered thereby, the representations and
         warranties of the Company contained in any underwriting agreement,
         securities sales agreement or other similar agreement, if any, relating
         to the offering cease to be true and correct in all material respects
         or if the Company receives any notification with respect to the
         suspension of the qualification of the Registrable Securities for sale
         in any jurisdiction or the initiation of any proceeding for such
         purpose, (v) of the happening of any event during the period a Shelf
         Registration Statement is effective which makes any statement made in
         such Shelf Registration Statement or the related Prospectus untrue in
         any material respect or which requires the making of any changes in
         such Registration Statement in order to make the statements therein not
         misleading or in such Prospectus in order to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading and (vi) of any

                                      -9-
<PAGE>

         determination by the Company that a post-effective amendment to a
         Registration Statement would be appropriate;

                  (f) use its reasonable best efforts to obtain the withdrawal
         of any order suspending the effectiveness of a Registration Statement
         at the earliest possible moment and provide immediate notice to each
         Holder of the withdrawal of any such order;

                  (g) in the case of a Shelf Registration, furnish to each
         Holder of Registrable Securities, without charge, at least one
         conformed copy of each Registration Statement and any post-effective
         amendment thereto (without documents incorporated therein by reference
         or exhibits thereto, unless requested in writing);

                  (h) in the case of a Shelf Registration, cooperate with the
         selling Holders of Registrable Securities to facilitate the timely
         preparation and delivery of certificates representing Registrable
         Securities to be sold and not bearing any restrictive legends (unless
         required by applicable securities laws) and enable such Registrable
         Securities to be in such denominations (consistent with the provisions
         of the Indenture) and registered in such names as the selling Holders
         may reasonably request at least two Business Days prior to the closing
         of any sale of Registrable Securities;

                  (i) in the case of a Shelf Registration, upon the occurrence
         of any event contemplated by Section 3(e)(v) hereof, use its reasonable
         best efforts to prepare and file with the SEC a supplement or
         post-effective amendment to a Registration Statement or the related
         Prospectus or any document incorporated therein by reference or file
         any other required document so that, as thereafter delivered to the
         purchasers of the Registrable Securities, such Prospectus will not
         contain any untrue statement of a material fact or omit to state a
         material fact necessary to make the statements therein, in the light of
         the circumstances under which they were made, not misleading. The
         Company agrees to notify the Holders to suspend use of the Prospectus
         as promptly as practicable after the occurrence of such an event, and
         the Holders hereby agree to suspend use of the Prospectus until the
         Company has amended or supplemented the Prospectus to correct such
         misstatement or omission and has furnished copies of the amended or
         supplemented Prospectus to the Holders or until the Company notifies
         the Holders that the sale of the Registrable Securities may be resumed;

                  (j) a reasonable time prior to the filing of any Registration
         Statement, any Prospectus, any amendment to a Registration Statement or
         amendment or supplement to a Prospectus, or any document which is to be
         incorporated by reference into a Registration Statement or Prospectus
         after the initial filing of a Registration Statement, provide copies of
         such document to the Initial Purchasers and their counsel (and, in the
         case of a Shelf Registration Statement, the Holders and their counsel)
         and make such of the representatives of the Company as shall be
         reasonably requested by the Initial Purchasers or their counsel (and,
         in the case of a Shelf Registration Statement, the Holders or their
         counsel) available for discussion of such document, and shall not at
         any time file or make any amendment to the Shelf Registration
         Statement, any Prospectus or any amendment of or supplement to a Shelf
         Registration Statement or a Prospectus or any document which is to be
         incorporated by reference into a Registration Statement or a
         Prospectus, of which

                                      -10-
<PAGE>
         the Initial Purchasers and their counsel (and, in the case of a Shelf
         Registration Statement, the Holders or their counsel) shall not have
         previously been advised and furnished a copy or to which the Initial
         Purchasers or their counsel (and, in the case of a Shelf Registration
         Statement, the Holders or their counsel) shall reasonably object;

                  (k) obtain a CUSIP number for all Exchange Securities or
         Registrable Securities, as the case may be, not later than the
         effective date of the applicable Registration Statement;

                  (l) cause the Indenture to be qualified under the Trust
         Indenture Act of 1939, as amended (the "TIA"), in connection with the
         registration of the Exchange Securities or Registrable Securities, as
         the case may be, and cooperate with the Trustee and the Holders to
         effect such changes to the Indenture as may be required for the
         Indenture to be so qualified in accordance with the terms of the TIA
         and execute, and use commercially reasonable best efforts to cause the
         Trustee to execute, all documents as may be required to effect such
         changes and all other forms and documents required to be filed with the
         SEC to enable the Indenture to be so qualified in a timely manner;

                  (m) in the case of a Shelf Registration, make available for
         inspection by a representative of the Holders of the Registrable
         Securities, any Underwriter participating in any disposition pursuant
         to such Shelf Registration Statement, and attorneys and accountants
         designated by the Holders, at reasonable times and in a reasonable
         manner, all relevant financial and other records, pertinent documents
         and properties of the Company, and cause the respective officers,
         directors and employees of the Company to supply all information
         reasonably requested by any such representative, Underwriter, attorney
         or accountant in connection with a Shelf Registration Statement, in
         each case that would customarily be reviewed or examined in connection
         with "due diligence" review of the Company;

                  (n) use its reasonable best efforts to cause the Exchange
         Securities to continue to be rated by two nationally recognized
         statistical rating organizations (as such term is defined in Rule
         436(g)(2) under the 1933 Act), if the Registrable Securities have been
         rated prior to the initial sale of such Registrable Securities;

                  (o) if reasonably requested by any Holder of Registrable
         Securities covered by a Registration Statement, (i) promptly
         incorporate in a Prospectus supplement or post-effective amendment such
         information with respect to such Holder as such Holder reasonably
         requests to be included therein and (ii) make all required filings of
         such Prospectus supplement or such post-effective amendment as soon as
         reasonably practicable after the Company has received notification of
         the matters to be incorporated in such filing; and

                  (p) in the case of a Shelf Registration, enter into such
         customary agreements and take all such other actions in connection
         therewith (including those reasonably requested by the Holders of a
         majority of the Registrable Securities being sold thereunder) in order
         to expedite or facilitate the disposition of such Registrable
         Securities thereunder including, but not limited to, pursuant to an
         Underwritten Offering and in such

                                      -11-
<PAGE>
         connection, (i) to the extent possible, make such representations and
         warranties to the Holders and any Underwriters of such Registrable
         Securities with respect to the business of the Company and its
         subsidiaries, the Registration Statement, Prospectus and documents
         incorporated by reference or deemed incorporated by reference, if any,
         in each case, in form, substance and scope as are customarily made by
         issuers to underwriters in underwritten offerings and confirm the same
         if and when requested, (ii) obtain opinions of counsel to the Company
         (which counsel and opinions, in form, scope and substance, shall be
         reasonably satisfactory to the Holders of a majority in principal
         amount of the Registrable Securities being sold under such Shelf
         Registration Statement, such Underwriters and their respective counsel)
         addressed to each selling Holder and Underwriter of Registrable
         Securities, covering the matters customarily covered in opinions
         requested in underwritten offerings, (iii) obtain "cold comfort"
         letters from the independent certified public accountants of the
         Company (and, if necessary, any other certified public accountant of
         any subsidiary of the Company, or of any business acquired by the
         Company for which financial statements and financial data are or are
         required to be included in the Registration Statement) addressed to
         each selling Holder and Underwriter of Registrable Securities, such
         letters to be in customary form and covering matters of the type
         customarily covered in "cold comfort" letters in connection with
         underwritten offerings, and (iv) deliver such documents and
         certificates as may be reasonably requested by the Holders of a
         majority in principal amount of the Registrable Securities being sold
         under such Shelf Registration Statement or by the Underwriters, and
         which are customarily delivered in underwritten offerings, to evidence
         the continued validity of the representations and warranties of the
         Company made pursuant to clause (i) above and to evidence compliance
         with any customary conditions contained in an underwriting agreement.

                  In the case of a Shelf Registration Statement, the Company may
         require each Holder of Registrable Securities to furnish to the Company
         such information regarding the Holder and the proposed distribution by
         such Holder of such Registrable Securities as the Company may from time
         to time reasonably request in writing. No Holder of Registrable
         Securities may include its Registrable Securities in such Shelf
         Registration Statement unless and until such Holder furnishes such
         information to the Company. Each Holder including Registrable
         Securities in a Shelf Registration Statement shall agree to furnish
         promptly to the Company all information regarding such Holder and the
         proposed distribution by such Holder of such Registrable Securities
         required to make the information previously furnished to the Company by
         such Holder not materially misleading.

                  In connection with an Exchange Offer Registration, each Holder
         exchanging Securities for Exchange Securities shall be required to
         represent that (i) the Exchange Securities are being obtained in the
         ordinary course of business of the Person receiving such Exchange
         Securities, whether or not such Person is a Holder, (ii) neither such
         Holder nor any such other Person has an arrangement or understanding
         with any Person to participate in the distribution of Securities or
         Exchange Securities, (iii) other than as set forth in Section 4, if the
         Holder is not a broker-dealer, or is a broker-dealer but will not
         receive Exchange Securities for its own account in exchange for
         Securities, neither the Holder nor any such other Person is engaged in
         or intends to participate in a distribution of the Exchange Securities
         and (iv) neither the Holder nor any such other Person is an "affiliate"
         of the Company within the meaning of Rule 405 under the 1933 Act or, if
         such Per-

                                      -12-
<PAGE>

         son is an "affiliate," that such Holder will comply with the
         registration and prospectus delivery requirements of the 1933 Act to
         the extent applicable.

                  In the case of a Shelf Registration Statement, each Holder
         agrees that, upon receipt of any notice from the Company of the
         happening of any event of the kind described in Section 3(e)(v) hereof,
         such Holder will forthwith discontinue disposition of Registrable
         Securities pursuant to a Registration Statement until such Holder's
         receipt of the copies of the supplemented or amended Prospectus
         contemplated by Section 3(i) hereof, and, if so directed by the
         Company, such Holder will destroy or deliver to the Company (at its
         expense) all copies in its possession, other than permanent file copies
         then in such Holder's possession, of the Prospectus covering such
         Registrable Securities current at the time of receipt of such notice.

                  If the Company shall give any such notice to suspend the
         disposition of Registrable Securities pursuant to a Registration
         Statement, the Company shall extend the period during which the
         Registration Statement shall be maintained effective pursuant to this
         Agreement by the number of days during the period from and including
         the date of the giving of such notice to and including the date when
         the Holders shall have received copies of the supplemented or amended
         Prospectus necessary to resume such dispositions. The Company may give
         such notice so long as there are no more than 90 days during any 365
         day period in which such suspensions are in effect.

                  The Holders of Registrable Securities covered by a Shelf
         Registration Statement who desire to do so may sell such Registrable
         Securities in an Underwritten Offering. In any such Underwritten
         Offering, the investment banker or investment bankers and manager or
         managers (the "UNDERWRITERS") that will administer the offering will be
         selected by the Majority Holders of the Registrable Securities included
         in such offering, provided that such Underwriters shall be reasonably
         acceptable to the Company.

         4.       Participation of Broker-Dealers in Exchange Offer.

         (a) The parties hereto understand that the staff of the SEC has taken
the position that any broker-dealer that receives Exchange Securities for its
own account in the Exchange Offer in exchange for Securities that were acquired
by such broker-dealer as a result of market-making or other trading activities
(a "PARTICIPATING BROKER-DEALER"), may be deemed to be an "underwriter" within
the meaning of the 1933 Act and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such Exchange
Securities.

         The Company understands that it is currently the staff's position that
if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution containing a statement to the above effect and
the means by which Participating Broker-Dealers may resell the Exchange
Securities, without naming the Participating Broker-Dealers or specifying the
amount of Exchange Securities owned by them, such Prospectus may be delivered by
Participating Broker-Dealers to satisfy their prospectus delivery obligation
under the 1933 Act in connection with resales of Exchange Securities for their
own accounts, so long as the Prospectus otherwise meets the requirements of the
1933 Act.

                                      -13-
<PAGE>
         (b) In light of the above, notwithstanding the other provisions of this
Agreement, the Company agrees that the provisions of this Agreement as they
relate to a Shelf Registration shall also apply to an Exchange Offer
Registration to the extent, and with such reasonable modifications thereto as
may be, reasonably requested by the Initial Purchasers or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 4(a) above; provided that:

                  (i) the Company shall not be required to amend or supplement
         the Prospectus contained in the Exchange Offer Registration Statement,
         as would otherwise be contemplated by Section 3(i), for a period
         exceeding 180 days after the last Exchange Date (as such period may be
         extended pursuant to the penultimate paragraph of Section 3 of this
         Agreement) and Participating Broker-Dealers shall not be authorized by
         the Company to deliver and shall not deliver such Prospectus after such
         period in connection with the resales contemplated by this Section 4;
         and

                  (ii) the application of the Shelf Registration procedures set
         forth in Section 3 of this Agreement to an Exchange Offer Registration,
         to the extent not required by the positions of the staff of the SEC or
         the 1933 Act and the rules and regulations thereunder, will be in
         conformity with the reasonable request in writing to the Company by the
         Initial Purchasers or with the reasonable request in writing to the
         Company by one or more broker-dealers who certify to the Initial
         Purchasers and the Company in writing that they anticipate that they
         will be Participating Broker-Dealers; and provided further that, in
         connection with such application of the Shelf Registration procedures
         set forth in Section 3 to an Exchange Offer Registration, the Company
         shall be obligated (x) to deal only with one entity representing the
         Participating Broker-Dealers, which shall be Salomon Smith Barney Inc.
         unless it elects not to act as such representative, (y) to pay the fees
         and expenses of only one counsel representing the Participating
         Broker-Dealers, which shall be counsel to the Initial Purchasers unless
         such counsel elects not to so act and (z) to cause to be delivered only
         one, if any, "cold comfort" letter with respect to the Prospectus in
         the form existing on the last Exchange Date and with respect to each
         subsequent amendment or supplement, if any, effected during the period
         specified in clause (i) above.

         (c) The Initial Purchasers shall have no liability to the Company,
other than as Holders in accordance with the terms hereof, or to any other
Holder with respect to any request that they may make pursuant to Section 4(b)
above.

         5.       Indemnification and Contribution.

         (a) The Company agrees to indemnify and hold harmless the Initial
Purchasers, each Holder and each Person, if any, who controls the Initial
Purchasers or any Holder within the meaning of either Section 15 of the 1933 Act
or Section 20 of the 1934 Act, or is under common control with, or is controlled
by, the Initial Purchasers or any Holder (each, a "PARTICIPANT"), from and
against all losses, claims, damages and liabilities (including, without
limitation, any legal fees or other expenses reasonably incurred by a
Participant in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment thereto)

                                      -14-
<PAGE>
pursuant to which Exchange Securities or Registrable Securities were registered
under the 1933 Act, including all documents incorporated therein by reference,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or caused by any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) forming a
part of such Registration Statement, or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon and in conformity with information relating to the Initial Purchasers or
any Holder furnished to the Company in writing by the Initial Purchasers or any
selling Holder expressly for use therein; provided that the foregoing indemnity
with respect to any Prospectus shall not inure to the benefit of any Holder from
whom the Person asserting any such losses, claims, damages or liabilities
purchased Securities, or any Person controlling such Holder, if a copy of the
final Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent by, or delivered
on behalf of, such Holder to such Person at or prior to the written confirmation
of the sale of the Securities to such Person, if the final Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability. In connection with any Underwritten Offering
permitted by Section 3, the Company will also enter into an underwriting
agreement pursuant to which the Company will agree to indemnify the
Underwriters, if any, selling brokers, dealers and similar securities industry
professionals participating in such Underwritten Offering, their officers and
directors and each Person who controls such Persons (within the meaning of
either Section 15 of the 1933 Act or Section 20 of the 1934 Act) to the same
extent as provided above with respect to the indemnification of the Holders, if
requested in connection with any Registration Statement for such Underwritten
Offering.

         (b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Initial Purchasers and the other selling Holders,
and each of their respective directors and officers who sign the Registration
Statement and each Person, if any, who controls the Company, the Initial
Purchasers and any other selling Holder within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act to the same extent as the
foregoing indemnity from the Company to the Initial Purchasers and the Holders
pursuant to Section 5(a), but only with reference to information relating to
such Holder furnished to the Company in writing by such Holder expressly for use
in any Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto).

         (c) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may be
sought pursuant to either paragraph (a) or paragraph (b) above, such Person (the
"INDEMNIFIED PARTY") shall promptly notify the Person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing, but the failure
to so promptly notify the Indemnifying Party shall not negate the obligation to
so indemnify such Indemnified Party unless the Indemnifying Party is materially
prejudiced by such delay, and the Indemnifying Party, upon request of the
Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
expenses

                                      -15-
<PAGE>

of such counsel related to such proceeding. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnifying Party
and the Indemnified Party and, in the opinion of counsel to the Indemnifying
Party, representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for (a) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Initial Purchasers and all Persons, if any, who control the Initial
Purchasers within the meaning of either Section 15 of the 1933 Act or Section 20
of the 1934 Act, (b) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each Person, if any, who controls the
Company within the meaning of either such Section and (c) the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
Holders and all Persons, if any, who control any Holders within the meaning of
either such Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In such case involving the Initial Purchasers and Persons who
control the Initial Purchasers, such firm shall be designated in writing by the
Initial Purchasers. In such case involving the Holders and such Persons who
control Holders, such firm shall be designated in writing by the Majority
Holders. In all other cases, such firm shall be designated by the Company. The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent but, if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any loss or liability by reason
of such settlement or judgment. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
or threatened proceeding in respect of which such Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such proceeding.

         (d) If the indemnification provided for in paragraph (a) or paragraph
(b) of this Section 5 is unavailable to an Indemnified Party or insufficient in
respect of any losses, claims, damages or liabilities, then each Indemnifying
Party under such paragraph, in lieu of indemnifying such Indemnified Party
thereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party or parties on the one hand and of the Indemnified Party or parties on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and the Holders shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section 5(d) are several
in proportion to the respective principal amount of Registrable Securities of
the applicable Holder that were registered pursuant to a Registration Statement.

                                      -16-
<PAGE>

         (e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in Section 5(d) above. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,
damages and liabilities referred to in Section 5(d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5, no Holder shall be required to indemnify or contribute any amount in
excess of the amount by which the total price at which Registrable Securities
were sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 5 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any Indemnified Party at law or in equity.

         The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchasers, any Holder or any Person controlling the Initial
Purchasers or any Holder, or by or on behalf of the Company, its officers or
directors or any Person controlling the Company, (iii) acceptance of any of the
Exchange Securities and (iv) any sale of Registrable Securities pursuant to a
Shelf Registration Statement.

         6.       Miscellaneous.

         (a) No Inconsistent Agreements. The Company has not entered into, and
on or after the date of this Agreement will not enter into, any agreement which
is inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.

         (b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders of at least
a majority in aggregate principal amount of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or
consent; provided, however, that no amendment, modification, supplement, waiver
or consent to any departure from the provisions of Section 5 hereof or this
paragraph (b) shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder.

         (c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery (i)
if to a Holder, at the most current address given by such Holder to the Company
by means of a notice given in accordance with the provisions of this

                                      -17-
<PAGE>

Section 6(c), which address initially is, with respect to the Initial
Purchasers, the address set forth in the Purchase Agreement; and (ii) if to the
Company, initially at the Company's address set forth in the Purchase Agreement
and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 6(c).

         All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; five Business Days
after being deposited in the mail, postage pre-paid, if mailed; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and on the next
Business Day if timely delivered to an air courier guaranteeing overnight
delivery.

         Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.

         (d) Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon, the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders of Registrable Securities; provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Registrable Securities in violation of the terms of the Securities and the
Purchase Agreement. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof. The Initial Purchasers shall have no liability or
obligation to the Company with respect to any failure by a Holder to comply
with, or any breach by any other Holder of, any of the obligations of such
Holder under this Agreement.

         (e) Purchases and Sales of Securities. The Company shall not, and shall
use its reasonable best efforts to cause its affiliates (as defined in Rule 405
under the 1933 Act) not to, purchase and then resell or otherwise transfer any
Securities.

         (f) Third Party Beneficiary. Each Holder shall be a third party
beneficiary to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, shall be bound by all of
the terms and provisions of this Agreement and shall have the right to enforce
such agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder.

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

         (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         (i) Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.

                                      -18-
<PAGE>

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

                                      -19-
<PAGE>
         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                          EL PASO NATURAL GAS COMPANY

                                          By:   /s/ GREG G. GRUBER
                                              ---------------------------------
                                               Greg G. Gruber
                                               Senior Vice President, Chief
                                               Financial Officer and Treasurer

Confirmed and accepted as of the date first above written:

CITIGROUP GLOBAL MARKETS INC.
CREDIT SUISSE FIRST BOSTON LLC
BANC OF AMERICA SECURITIES LLC
TOKYO-MITSUBISHI INTERNATIONAL PLC
SG COWEN SECURITIES CORPORATION

By:  CITIGROUP GLOBAL MARKETS INC.,
on behalf of itself and the other several Initial Purchasers

By:    /s/ SEAN DOLAN
      -----------------------------------
      Name:  Sean Dolan
      Title: Vice President

                                      -20-
<PAGE>

                                   SCHEDULE I

Initial Purchasers

Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
Banc of America Securities LLC
Tokyo-Mitsubishi International plc
SG Cowen Securities Corporation

                                      -21-

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