EL PASO TENNESSEE PIPELINE CO, 10-K, 1997-03-14

EL PASO TENNESSEE PIPELINE CO
10-K, 1997-03-14
FARM MACHINERY & EQUIPMENT

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-K
(MARK ONE)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO .

COMMISSION FILE NUMBER 1-9864

EL PASO TENNESSEE PIPELINE CO.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 76-0233548
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

EL PASO ENERGY BUILDING
1001 LOUISIANA
HOUSTON, TEXAS 77002
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 757-2131

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
<S> <C>
8 1/4% Cumulative Junior Preferred Stock, Series A.......... New York Stock Exchange
</TABLE>

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] NO [ ]

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. [ ]

STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES
OF THE REGISTRANT. THE AGGREGATE MARKET VALUE SHALL BE COMPUTED BY REFERENCE TO
THE PRICE AT WHICH THE STOCK WAS SOLD, OR THE AVERAGE BID AND ASKED PRICES OF
SUCH STOCK, AS OF THE SPECIFIED DATE WITHIN 60 DAYS PRIOR TO THE DATE OF FILING.

<TABLE>
<CAPTION>
MARKET VALUE
CLASS OF VOTING STOCK AND NUMBER OF SHARES HELD
HELD BY NON-AFFILIATES AT MARCH 7, 1997 BY NON-AFFILIATES
--------------------------------------- -----------------
<S> <C>
8 1/4% Cumulative Junior Preferred Stock, Series A,
6,000,000 shares $319,500,000*
</TABLE>

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* Based upon the closing price on the Composite Tape for the 8 1/4% Cumulative
Junior Preferred Stock, Series A, on March 7, 1997.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the
part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: El Paso Tennessee Pipeline Co.'s definitive Proxy Statement for
the 1997 Annual Meeting of Stockholders, to be filed not later than 120 days
after the end of the fiscal year covered by this report, is incorporated by
reference into Part III.

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EL PASO TENNESSEE PIPELINE CO.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
CAPTION PAGE
------- ----
<S> <C> <C>
Glossary.............................................................. ii

PART I
Item 1. Business.................................................... 1
Item 2. Properties.................................................. 6
Item 3. Legal Proceedings........................................... 7
Item 4. Submission of Matters to a Vote of Security Holders......... 8

PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters....................................... 9
Item 6. Selected Financial Data..................................... 10
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 11
Item 8. Financial Statements and Supplementary Data................. 22
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................. 51

PART III
Item 10. Directors and Executive Officers of the Registrant.......... 51
Item 11. Executive Compensation...................................... 51
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................ 51
Item 13. Certain Relationships and Related Transactions.............. 51

PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K....................................................... 51
Signatures.................................................. 55
</TABLE>

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GLOSSARY

The following abbreviations, acronyms, or defined terms used in this Form
10-K are defined below:

<TABLE>
<CAPTION>
DEFINITION
----------
<S> <C>
ALJ............................... Administrative Law Judge
Bcf(/d)........................... Billion cubic feet (per day)
Company........................... EPTPC and those subsidiaries owned directly or indirectly by EPTPC
subsequent to the Distributions and Merger
Court of Appeals.................. United States Court of Appeals for the District of Columbia Circuit
Dakota............................ Dakota Gasification Company
East Tennessee.................... East Tennessee Natural Gas Company, a wholly owned subsidiary of
TGP
EPA............................... United States Environmental Protection Agency
EPG............................... El Paso Natural Gas Company, unless the context otherwise requires
EPTPC............................. El Paso Tennessee Pipeline Co. (formerly Tenneco Inc.), an indirect
subsidiary of EPG
FERC.............................. the Federal Energy Regulatory Commission
GSR............................... Gas supply realignment
ICA............................... ICA Energy, Inc.
Iroquois.......................... Iroquois Gas Transmission System, L.P.
IRS............................... Internal Revenue Service
Kern River........................ Kern River Gas Transmission Company
Midwestern........................ Midwestern Gas Transmission Company, a wholly owned indirect
subsidiary of TGP
MMcf(/d).......................... Million cubic feet (per day)
MMdth(/d)......................... Million decatherms (per day)
MW(s)............................. Megawatt(s)
Old Tenneco....................... Tenneco Inc. (renamed El Paso Tennessee Pipeline Co.), prior to the
Distributions and Merger
PASA.............................. Pipeline Authority of South Australia
PCB(s)............................ Polychlorinated biphenyl(s)
PRP(s)............................ Potentially Responsible Party(ies)
SEC............................... Securities and Exchange Commission
Series A Preferred Stock.......... 8 1/4% Cumulative Junior Preferred Stock, Series A of EPTPC
SFAS.............................. Statement of Financial Accounting Standards
Tenneco Ventures.................. Tenneco Ventures Corporation and Tenneco Gas Production
Corporation, collectively
TGP............................... Tennessee Gas Pipeline Company, a wholly owned subsidiary of EPTPC
TransTexas........................ TransTexas Gas Corporation
</TABLE>

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PART I

ITEM 1. BUSINESS

GENERAL

In 1987, Tenneco Inc. was incorporated in Delaware and acquired all of the
outstanding shares of TGP. In the Merger discussed below (i) the name Tenneco
Inc. was changed to EPTPC and (ii) EPTPC became an indirect subsidiary of EPG.
EPTPC is a holding company. The major businesses of the Company consist of the
interstate transportation of natural gas, which generally is subject to
regulation by the FERC, as well as certain other non-regulated business
operations, such as gas marketing, intrastate pipeline operations, international
pipelines and power generation operations and domestic power generation
operations. Prior to the Distributions and Merger described below, the Company
also was engaged in the manufacture and sale of automotive exhaust system parts
and ride control products; the manufacture and sale of packaging materials,
cartons, containers and specialty packaging products for consumer and commercial
markets; and the construction and repair of ships.

ACQUISITION BY EPG

On December 12, 1996, an indirect subsidiary of EPG merged into Old Tenneco
(the "Merger"), resulting in Old Tenneco becoming an indirect subsidiary of EPG.
The Merger was effected in accordance with the Amended and Restated Agreement
and Plan of Merger dated as of June 19, 1996
(the "Merger Agreement"). In the Merger, Old Tenneco changed its name to EPTPC.
Prior to the Merger, Old Tenneco and its subsidiaries effected various
intercompany transfers and distributions which restructured, divided and
separated their businesses, assets and liabilities so that all the assets,
liabilities and operations related to their automotive parts, packaging and
administrative services businesses (collectively, the "Industrial Business") and
their shipbuilding business (the "Shipbuilding Business") were spun-off to Old
Tenneco's then existing common stockholders (the "Distributions"). The entity
consisting of the Industrial Business was subsequently renamed Tenneco Inc.
("New Tenneco") and the entity consisting of the Shipbuilding Business was
subsequently renamed Newport News Shipbuilding Inc. ("Newport News"). Following
the Distributions, the remaining operations of the Company consisted primarily
of those operations related to the transmission and marketing of natural gas and
the discontinued operations of Old Tenneco. In preparation for the Merger and
Distributions, Old Tenneco initiated a realignment of the Company's indebtedness
(the "Debt Realignment"). As part of the Debt Realignment, Old Tenneco initiated
tender offers for certain issues of debt of Old Tenneco and certain of its
subsidiaries and certain other debt issues which were exchanged into New Tenneco
debt, defeased, or otherwise retired. Upon completion of the Debt Realignment
transactions, the Company is only responsible for its remaining debt which was
not tendered, exchanged, defeased or otherwise retired. As a result of the
Merger, EPG owns 100 percent of the common stock of EPTPC, representing at the
effective time of the Merger approximately 75 percent of the equity value of
EPTPC; the balance of the equity value of EPTPC is held by the holders of its
Series A Preferred Stock which was issued in a registered public offering in
November 1996 and remains outstanding. For a further discussion, see Note 1 of
Item 8, Financial Statements and Supplementary Data.

REGULATED OPERATIONS

The regulated operations of the Company include the interstate pipeline
systems of TGP, Midwestern and East Tennessee, as well as certain joint
ventures, which are primarily engaged in the transportation and storage of
natural gas for producers, marketers, end-users and other gas transmission and
distribution companies. TGP's multiple-line system begins in the gas-producing
regions of Texas and Louisiana, including the continental shelf of the Gulf of
Mexico, and extends into the northeastern section of the U.S., including the New
York City and Boston metropolitan areas. Midwestern's pipeline system extends
from Portland, Tennessee, to Chicago, and principally serves the Chicago
metropolitan area. East Tennessee's pipeline system serves the states of
Tennessee, Virginia and Georgia and connects with TGP's pipeline system in
Springfield and Lobelville, Tennessee. Net revenues from the interstate gas
sales and transportation operations of the

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Company accounted for approximately 32 percent, 40 percent, and 39 percent of
total revenues of the Company for 1996, 1995, and 1994, respectively.

The interstate gas transmission systems of the Company include
approximately 16,300 miles of pipeline, gathering lines and sales laterals (with
14,800 miles operated by TGP, 400 miles operated by Midwestern and 1,100 miles
operated by East Tennessee), together with related facilities that include 90
compressor stations with an aggregate of approximately 1.5 million horsepower.
The Company also has interests in or contractual rights to six underground and
above-ground gas storage facilities to permit increased deliveries of gas during
peak demand periods. The total design delivery capacity of the Company's
interstate systems as of December 31, 1996, was approximately 4,900 MMcf/d,
giving effect for deliveries into Midwestern and East Tennessee, and
approximately 5,800 MMcf/d at peak demand, giving effect for gas withdrawn from
storage.

The following table sets forth the volumes of gas sold and transported by
the interstate pipeline systems of EPTPC for the periods shown.

<TABLE>
<CAPTION>
MMDTH
-----------------------
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Sales*.............................................. 77 95 131
Transportation*..................................... 2,348 2,139 2,184
----- ----- -----
Total..................................... 2,425 2,234 2,315
===== ===== =====
</TABLE>

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* Sales and transportation volumes include all natural gas sold or transported
by the Company's interstate pipeline systems (including the proportionate
share of transportation volumes of the joint ventures in which the Company had
interests) and have not been adjusted to reflect the sale of (i) a 50 percent
interest in Kern River in December 1995, and (ii) a 13.2 percent general
partnership interest in Iroquois in June 1996. Kern River owns a 904-mile
pipeline system extending from Wyoming to California. Iroquois owns a 370-mile
pipeline extending from the Canadian border at Waddington, New York, to Long
Island, New York. Of the total transportation volumes shown, Kern River
transported approximately 136 MMdth and 130 MMdth during 1995 and 1994,
respectively. Iroquois transported approximately 20 MMdth, 45 MMdth and 32
MMdth during 1996, 1995 and 1994, respectively.

Regulatory Environment

The Company's interstate system is subject to the jurisdiction of FERC in
accordance with the Natural Gas Act of 1938 and the Natural Gas Policy Act of
1978.

In the mid-1980s, FERC began a series of actions which ultimately had the
effect of substantially removing interstate pipelines from the gas purchase and
resale business and confining their role to transportation of gas owned by
others. In Order No. 436, issued in 1985, FERC began this transition by
requiring interstate pipelines to provide non-discriminatory access to their
facilities for all transporters of natural gas. This requirement enabled
consumers to purchase their own gas and have it transported on the interstate
pipeline system, rather than purchase gas from the pipelines. The transition was
completed with Order No. 636, issued in 1992, in which FERC required all
interstate pipelines to "unbundle" their sales and transportation services so
that the transportation services they provided to third parties would be
"comparable" to the transportation services accorded to gas owned by the
pipelines. FERC's stated purpose was to ensure that the pipelines' monopoly over
the transportation of natural gas did not distort the gas producer sales market,
which had by then been essentially deregulated.

One of the obstacles to this transition was the existence of long-term gas
purchase contracts between pipelines and producers which required the pipelines
to take or pay for a significant percentage of the gas which the producer was
capable of delivering. While FERC did not deal with this issue initially, it
eventually adopted rate recovery procedures which facilitated negotiations
between pipelines and producers to address take-or-pay issues. In Order No. 636,
FERC provided that pipelines could recover 100 percent of the costs prudently
incurred to terminate their gas purchase obligations. In July 1996, the Court of
Appeals issued its decision upholding, in large part, Order No. 636, and
remanded to FERC several issues for further

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explanation, including further explanation of FERC's decision to allow pipelines
to recover 100 percent of GSR costs and FERC's requirement that pipelines
allocate 10 percent of GSR costs to interruptible transportation customers. In
February 1997, FERC reaffirmed its decision to allow pipelines to recover 100
percent of GSR costs. In addition, FERC modified the requirement that pipelines
allocate 10 percent of GSR costs to interruptible customers to permit pipelines
to propose an allocation of any percentage of such costs to their interruptible
customers. For a further discussion of GSR issues related to TGP, see Item 3,
Legal Proceedings, Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations, and Note 5 of Item 8, Financial Statements
and Supplementary Data.

In December 1994, TGP filed for a general rate increase (the "1995 Rate
Case"). In January 1995, FERC accepted the filing, suspended its effectiveness
for the maximum period of five months pursuant to normal regulatory process, and
set the matter for hearing. On July 1, 1995, TGP began collecting rates, subject
to refund, reflecting an $87 million increase in TGP's annual revenue
requirement. A Stipulation and Agreement (the "Stipulation") was filed with an
ALJ in this proceeding in April 1996. The Stipulation resolves the rates that
are the subject of the 1995 Rate Case, including a structural rate design change
that results in a larger proportion of TGP's transportation revenues being
dependent upon throughput. Under the Stipulation, TGP is required to refund,
upon final approval of the Stipulation, the difference between the revenues
collected under the July 1, 1995 motion rates and the revenues that would have
been collected pursuant to the rates underlying the Stipulation. In October
1996, FERC approved the Stipulation with certain modifications and
clarifications which are not material. In January 1997, FERC issued an order
denying requests for rehearing of the October 1996 order. One party to the rate
proceeding, a competitor of TGP, filed with the Court of Appeals in February
1997, a Petition for Review of the FERC orders approving the Stipulation.

For a discussion of recent FERC proceedings relating to the recovery by TGP
of certain environmental costs as a component of the rates charged by its
interstate pipeline operations, see Note 5 of Item 8, Financial Statements and
Supplementary Data.

Markets and Competition

The Company's interstate pipeline operations face varying degrees of
competition from alternative energy sources, such as electricity, coal, and oil.
The potential consequences of the proposed restructuring of the electric power
industry are currently unclear. It may benefit the natural gas industry by
creating more demand for gas turbine generated electric power, or it may hamper
demand by allowing more effective use of surplus electric capacity through
increased wheeling as a result of open access. At this time, the Company is not
projecting a significant increase in gas demand as a result of such
restructuring.

Customers of the interstate pipeline operations of the Company include
natural gas producers, marketers and end-users, as well as other gas
transmission and distribution companies. Substantially all of the revenues of
these operations are generated under long-term gas transmission contracts.
Contracts representing approximately 70 percent of the Company's firm
transportation capacity will be expiring over the next four years, principally
in the year 2000. Although the Company cannot predict how much capacity will be
resubscribed, a majority of the expiring contracts cover service to Northeastern
U.S. markets, where there is currently little excess capacity. Several projects,
however, have been proposed to deliver incremental volumes to this area. While
the Company intends to pursue the renegotiation, extension and/or replacement of
these contracts, there can be no assurance as to whether the Company will be
able to extend or replace these contracts (or a substantial portion thereof) or
that the terms of any renegotiated contracts will be as favorable to the Company
as the existing contracts. Accordingly, the Company presently is unable to
ascertain whether or not the expiration and renegotiation, extension and/or
replacement of these transportation contracts will have a materially adverse
effect on the Company's financial position or results of operations.

In a number of key markets, the Company faces competitive pressure from
other major pipeline systems, enabling local distribution companies and
end-users to choose a supplier or switch suppliers based on the short-term price
of gas and the cost of transportation. Competition between pipelines is
particularly intense in the Company's supply area, Louisiana and Texas. In some
instances, the Company has had to discount its

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transportation rates in order to maintain market share. The renegotiation of the
Company's expiring contracts may be impacted by the foregoing competitive
factors.

NON-REGULATED OPERATIONS

Field and Merchant Services

Certain subsidiaries of EPTPC are engaged in the businesses of marketing
natural gas and owning and operating approximately 1,300 miles of gathering and
intrastate pipelines that serve the Texas Gulf Coast and West Texas markets.

The interstate marketing operations buy, sell and contract for the
transportation of up to 1.2 Bcf/d of natural gas from approximately 300
suppliers, through 40 pipelines to about 500 customers, marketers and end-users.
The Company offers a portfolio of products and services that are intended to
help distributors, end-users and producers manage their gas sales and purchasing
processes. The Company also owns and manages gas gathering systems and natural
gas processing plants in Pennsylvania, Texas, Louisiana and Tennessee.
Additionally, the Company owns and operates, either directly or through joint
ventures, approximately 1,300 miles of intrastate pipelines and gathering lines
in the Texas Gulf Coast and West Texas markets. In addition to offering
transportation capacity, these intrastate pipeline and gathering operations
manage buying, selling and transportation services of up to 1.4 Bcf/d of natural
gas for approximately 135 suppliers and 140 customers and shippers. The
intrastate pipeline operations also provide swing storage services and access to
major intrastate and interstate pipelines in Texas.

The following table sets forth the volumes of gas sold and transported by
the Company's marketing and intrastate pipeline subsidiaries for the periods
indicated:

<TABLE>
<CAPTION>
MMDTH
-------------------
1996 1995 1994
---- ---- -----
<S> <C> <C> <C>
Sales.................................................... 680 642 739
Transportation........................................... 281 230 274
--- --- -----
Total.......................................... 961 872 1,013
=== === =====
</TABLE>

In February 1994, the Company sold a 20 percent interest in its marketing
and intrastate pipeline subsidiary to Ruhrgas Aktiengesellschaft, Germany's
largest natural gas company. In anticipation of the Merger, the Company
repurchased this 20 percent interest in September 1996.

International and Other Energy-Related Business

The Company has recently undertaken various activities to extend its
traditional activities in North American pipelines to international pipeline,
power and energy-related projects, with a current focus on activities in Latin
America, Southeast Asia, Australia and Europe. Set forth below are brief
descriptions of the projects that are operational or are in various stages of
development.

Australia Project. In 1995, a subsidiary of the Company was selected to
construct, own and operate a 470-mile natural gas pipeline in Queensland,
Australia. Construction of the pipeline was completed in December 1996 at a
total cost of $170 million. Additionally, in June 1995 the Company acquired the
natural gas pipeline assets of PASA, which includes a 488-mile pipeline, for
$225 million. In December 1996, the Company received approximately $400 million
through debt financing and the subsequent sale of 70 percent of its ownership
interest in these projects.

Indonesia Project. The Company has a 50 percent ownership interest in a
producing gas field (having reserves of approximately 500 Bcf) and a 47.5
percent ownership interest in a 135 MW power generating plant under construction
in South Sulawesi, Indonesia. The $225 million project has been financed with
approximately $179 million in debt. The electricity from the power generating
plant will be sold to the national electric utility pursuant to a long-term
contract. The Company has obtained political risk insurance for its equity
investment.

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Hungary Project. In September 1996, a subsidiary of the Company was
selected to acquire a 50 percent controlling interest in an operating 70 MW
power plant located in Dunaujvaros, Hungary. The electricity generated at this
plant is consumed by Dunaferr, the largest steel mill in Hungary. Excess power
is sold pursuant to long-term contracts to the Hungarian national electric
utility. Subject to satisfaction of certain conditions, the acquisition is
scheduled to be finalized in the first quarter of 1997. The assets will be
acquired for approximately $25 million and no financing will be involved. The
Company is seeking political risk insurance from the Overseas Private Investment
Corporation for its equity investment. The acquisition agreement requires the
Company to study and, if deemed economically feasible, to expand the electric
generating plant. The feasibility study is underway.

Other Projects. The Company has a 17.5 percent interest in a 240 MW power
plant in Springfield, Massachusetts, and a 50 percent interest in two additional
cogeneration projects in Florida which have a combined capacity of 220 MWs.

Other

As a result of the Merger, the Company holds certain limited assets and is
responsible for certain liabilities, which the Company estimates to be
approximately $600 million, of existing and discontinued operations and
businesses.

Tenneco Credit Corporation (now renamed El Paso Energy Credit Corporation),
an indirect subsidiary of the Company, purchases interest-bearing and
noninterest-bearing trade receivables from the Company's operating subsidiaries.
Through June 1994, it also purchased retail receivables generated primarily by
retail sales of products by Case Corporation. As part of the intercompany
transfers preceding the Merger and Distributions, these Case Corporation retail
receivables and all of the interest and obligations associated with receivables
relating to the Industrial Business were transferred to New Tenneco.

ENVIRONMENTAL

The Company is subject to extensive federal, state, and local laws and
regulations governing environmental quality and pollution control. These laws
and regulations require the Company to remove or remedy the effect on the
environment of the disposal or release of specified substances at ongoing and
former operating sites. As of December 31, 1996, the Company had a reserve of
approximately $187 million for the following environmental contingencies which
the Company anticipates incurring through 2002: (i) expected remediation costs
and associated onsite, offsite and groundwater technical studies of
approximately $134 million; and (ii) other costs of approximately $53 million.
For a further discussion of specific environmental matters, see Item 3, Legal
Proceedings, Item 7, Management's Discussion and Analysis of Financial Condition
and Results of Operations, and Note 5 of Item 8, Financial Statements and
Supplementary Data.

In addition, the Company estimates that it will make capital expenditures
for environmental matters of approximately $5 million in 1997 and that capital
expenditures for environmental matters will range from approximately $40 million
to $80 million in the aggregate for the years 1998 through 2007. These
expenditures primarily relate to compliance with air regulations and control of
water discharges.

EMPLOYEES

The Company had approximately 2,800 full-time employees on December 31,
1996. Subsequent to the Merger, the Company implemented a program to streamline
operations and reduce operating costs. Since December 31, 1996, the Company has
reduced its workforce by 340 employees. The Company has no collective bargaining
arrangements.

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EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers of EPTPC at March 7, 1997 were as follows:

<TABLE>
<CAPTION>
NAME OFFICE AGE
---- ------ ---
<S> <C> <C>
William A. Wise........................ Chairman of the Board, President and Chief Executive 51
Officer
H. Brent Austin........................ Senior Vice President and Chief Financial Officer 42
Joel Richards III...................... Senior Vice President 50
Britton White, Jr...................... Senior Vice President and General Counsel 53
</TABLE>

Mr. Wise became the Chairman of the Board, President and Chief Executive
Officer of EPTPC upon consummation of the Merger. Mr. Wise has been Chairman of
the Board of EPG since January 1994 and Chief Executive Officer since January
1990. He was President of EPG from April 1989 to April 1996. From March 1987
until April 1989, Mr. Wise was an Executive Vice President of EPG. From January
1984 to February 1987, he was a Senior Vice President of EPG. Mr. Wise is a
member of the Board of Directors of Battle Mountain Gold Company.

Mr. Austin became Senior Vice President and Chief Financial Officer of
EPTPC upon consummation of the Merger. Mr. Austin has been Executive Vice
President of EPG since May 1995. He has been Chief Financial Officer of EPG
since April 1992. He was Senior Vice President of EPG from April 1992 to April
1995. He was Vice President, Planning and Treasurer of Burlington Resources,
Inc. from November 1990 to March 1992 and Assistant Vice President, Planning of
Burlington Resources, Inc. from January 1989 to October 1990.

Mr. Richards became Senior Vice President of EPTPC upon consummation of the
Merger. Mr. Richards has been Executive Vice President of EPG since December
1996. From January 1991 until December 1996, he was Senior Vice President of
EPG. He was Vice President from June 1990 to December 1990. He was Senior Vice
President, Finance and Human Resources of Meridian Minerals Company, a wholly
owned subsidiary of Burlington Resources, Inc., from October 1988 to June 1990.

Mr. White became Senior Vice President and General Counsel of EPTPC upon
consummation of the Merger. Mr. White has been Executive Vice President of EPG
since December 1996 and General Counsel of EPG from March 1991. He was Senior
Vice President and General Counsel of EPG from March 1991 until December 1996.
From March 1991 to April 1992, he was also Corporate Secretary of EPG. For more
than five years prior to that time, Mr. White was a partner in the law firm of
Holland & Hart.

On the date of the Merger, all the previous executive officers of Old
Tenneco resigned.

Executive officers hold offices until their successors are elected and
qualified, subject to their earlier removal.

ITEM 2. PROPERTIES

A description of the Company's properties is included in Item 1, Business,
and is incorporated by reference herein.

The Company is of the opinion that it has generally satisfactory title to
the properties owned and used in its businesses, subject to the liens for
current taxes, liens incident to minor encumbrances, and easements and
restrictions that do not materially detract from the value of such property or
the interests therein or the use of such properties in its businesses. In
addition, the Company's physical properties are adequate and suitable for the
conduct of its business in the future.

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ITEM 3. LEGAL PROCEEDINGS

In July 1996, TGP was served with a complaint in the matter of Jack J.
Grynberg v. Alaska Pipeline Co., et al., filed in the U.S. District Court for
the District of Columbia. The plaintiff filed this action under the False Claims
Act against most interstate pipelines and others alleging that the defendants
mismeasured natural gas produced from federal and Indian lands, which deprived
the United States of royalties otherwise due it. Among other things, the
plaintiff seeks to recover unspecified treble damages on behalf of the United
States. The plaintiff is also seeking to recover his finder's fee and attorneys'
fees. All defendants, most of whom are pursuing a combined defense, have filed
responsive motions. The plaintiff responded to those motions in January 1997.
Oral arguments are set for March 1997. TGP believes that there are valid
jurisdictional and procedural defenses to the plaintiff's complaint; however,
even if the plaintiff is ultimately entitled to pursue his claims, TGP believes
that it has substantive defenses, including that TGP's
measurement practices are consistent with industry practice and all applicable
standards, regulations, contracts, and tariffs and that TGP should not be liable
in any event. Based on information available at this time, TGP does not believe
that the ultimate resolution of this matter will have a materially adverse
effect on the Company's financial position or results of operations.

On August 1, 1995, the Texas Supreme Court affirmed a ruling of the Texas
Court of Appeals favorable to TGP involving a gas purchase contract and
indicated that it would remand the case to the trial court. On April 18, 1996,
however, the Texas Supreme Court withdrew its initial opinion and issued an
opinion reversing the Court of Appeals opinion. In June 1996, TGP filed a motion
for rehearing with the Texas Supreme Court which was denied in August 1996. In
December 1996, TGP entered into settlement agreements with each of the parties
to this gas purchase contract. As a result of these settlements, the gas
purchase contract is now terminated. TGP paid a total of $74 million to
terminate this contract. In addition, all related litigation was terminated.
During the course of this action, TGP either paid, or provided for the payment
of, amounts it believes were appropriate to cover the resolution of its contract
reformation litigation, including providing a bond in the amount of $206
million. On September 30, 1996, TGP paid approximately $193 million to the
producers and the producers agreed to release all but approximately $2 million
of the bonded amount. On November 1, 1996, a final order was issued which
assessed only $456,000 of the $2 million to TGP and TGP was released from the
remaining bond amount. TGP has filed with FERC to recover these payments from
its customers.

On October 14, 1993, TGP was sued in the State District Court of Ector
County, Texas, by ICA and TransTexas. In that suit, ICA and TransTexas contended
that TGP had an obligation to purchase gas production which TransTexas
unilaterally attempted to add to the reserves originally dedicated to a 1979 gas
contract. An amendment to the pleading sought $1.5 billion from TGP for alleged
damages caused by TGP's refusal to purchase gas produced from the TransTexas
leases covering the new production and lands. In June 1996, TGP reached a
settlement with ICA and TransTexas for $125 million wherein ICA and TransTexas
agreed to terminate their contract rights, released TGP from liability under the
contract, and indemnified TGP against future claims, including royalty owner
claims. TGP has filed with FERC to recover from its customers amounts previously
paid to TransTexas above the market price as well as the $125 million settlement
payment. In connection with that litigation, certain royalty interest owners
filed a claim against TGP alleging that they are sellers entitled to tender gas
to TGP under the settled contract. This claim fell under the indemnification
provisions of TGP's settlement with ICA and TransTexas, requiring ICA and
TransTexas to defend and indemnify TGP. This royalty owner litigation was
settled in December 1996 at no cost to TGP. The royalty owners' claims against
TGP have been dismissed.

TGP is a party in proceedings involving federal and state authorities
regarding the past use by TGP of a lubricant containing PCBs in its starting air
systems. TGP has executed a consent order with the EPA governing the remediation
of certain of its compressor stations and is working with the Pennsylvania and
New York environmental agencies to specify the remediation requirements at the
Pennsylvania and New York stations. Remediation activities in Pennsylvania are
essentially complete; in addition, pursuant to the Consent Order dated August 1,
1995, between TGP and the Pennsylvania Department of Environmental Protection,
TGP funded an environmentally beneficial project for $450,000 in April 1996 and
paid a $500,000 civil penalty in September 1996. Remediation and
characterization work at the compressor stations under its consent order

7
<PAGE> 11

with the EPA and the jurisdiction of the New York Department of Environmental
Conservation is ongoing. Management believes that the ultimate resolution of
these matters will not have a materially adverse effect on the Company's
financial position or results of operations.

In Commonwealth of Kentucky, Natural Resources and Environmental Protection
Cabinet v. Tennessee Gas Pipeline Company (Franklin County Circuit Court, Docket
No. 88-C1-1531, November 16, 1988), the Kentucky environmental agency alleged
that TGP discharged pollutants into the waters of the state without a permit and
disposed of PCBs without a permit. The agency sought an injunction against
future discharges, sought an order to remediate or remove PCBs, and sought a
civil penalty. TGP has entered into agreed orders with the agency to resolve
many of the issues raised in the original allegations, has received water
discharge permits for its Kentucky stations from the agency, and continues to
work to resolve the remaining issues. Management believes that the resolution of
this issue will not have a materially adverse effect on the Company's financial
position or results of operations.

The Company is a named defendant in numerous lawsuits and a named party in
numerous governmental proceedings arising in the ordinary course of business.
While the outcome of such lawsuits or other proceedings against the Company
cannot be predicted with certainty, management currently does not expect these
matters to have a materially adverse effect on the Company's financial position
or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Old Tenneco held a special meeting of stockholders on December 10, 1996.
The single proposal presented for a vote (the "Proposal") was (i) to approve and
adopt the Distribution Agreement dated as of
November 1, 1996, among Old Tenneco, New Tenneco and Newport News pursuant to
which the Distributions were effected; (ii) to approve and adopt the Merger
Agreement and the transactions contemplated thereby; (iii) to approve and adopt
the transactions contemplated by the Distribution Agreement; and (iv) to approve
an amendment to EPTPC's Certificate of Incorporation to eliminate the rights,
powers and preferences of EPTPC's junior preferred stock specified therein. The
results of the vote taken at this meeting were as follows:

<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
----------- --------- --------
<S> <C> <C> <C>
Approval:
Common Stock................................. 135,487,107 2,610,725 621,045
$7.40 Preferred.............................. 214,306 1,632 1,584
$4.50 Preferred.............................. 803,723 -- --
</TABLE>

There were no broker non-votes with respect to the Proposal.

8
<PAGE> 12

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

Following the consummation of the Merger, a subsidiary of EPG became the
sole holder of EPTPC's common stock, par value $.01 per share (the "Common
Stock"). The Common Stock was delisted from the New York Stock Exchange, and
there is no longer a trading market for such securities.

The declaration of dividends on EPTPC capital stock is at the discretion of
its Board of Directors. The Board of Directors has not adopted a dividend policy
as such; subject to legal and contractual restrictions, its decisions regarding
dividends are based on all considerations that in its business judgment are
relevant at the time, including past and projected earnings, cash flows,
economic, business and securities market conditions and anticipated developments
concerning EPTPC's business and operations. For additional information
concerning the payment of dividends by EPTPC, see Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations.

EPTPC's cash flow and the consequent ability of EPTPC to pay any dividends
on its Common Stock is substantially dependent upon EPTPC's earnings and cash
flow available after its debt service and the availability of such earnings to
EPTPC by way of dividends, distributions, loans and other advances. The
instruments setting forth the rights of the holders of the Series A Preferred
Stock contain provisions restricting EPTPC's right to pay dividends and make
other distributions on the Common Stock.

Under applicable corporate law, dividends may be paid by EPTPC out of
"surplus" (as defined under the law), or, if there is not a surplus, out of net
profits for the year in which the dividends are declared or the preceding fiscal
year. At December 31, 1996, EPTPC had surplus of approximately $1.2 billion for
the payment of dividends, and EPTPC will also be able to pay dividends out of
any net profits for the current and prior fiscal year.

9
<PAGE> 13

ITEM 6. SELECTED FINANCIAL DATA

The consolidated and combined selected financial data as of December 31,
1996, 1995, and 1994 and for the years ended December 31, 1996, 1995, 1994, and
1993 were derived from the audited consolidated and combined financial
statements of the Company. The combined selected financial data as of
December 31, 1993 and 1992 and for the year ended December 31, 1992 are
unaudited and were derived from the accounting records of Old Tenneco. In the
opinion of EPTPC's management, the combined selected financial data of the
Company as of December 31, 1993 and 1992 and for the year ended December 31,
1992 include all adjusting entries (consisting only of normal recurring
adjustments) necessary to present fairly the information set forth therein. The
balance sheet of EPTPC and consolidated subsidiaries as of December 31, 1996,
contained herein reflects the purchase price recorded by EPG effective as of
December 31, 1996 and is referred to herein as "Post-Acquisition Consolidated".
The combined statements of income, cash flows and changes in consolidated
stockholders' equity and combined equity for periods prior to December 31, 1996
are referred to as "Pre-Acquisition Combined". As a result of the change in the
basis of accounting from historical cost to reflect EPG's purchase cost, the
combined financial statements for Pre-Acquisition periods are not comparable to
the consolidated balance sheet for the Post-Acquisition period. This information
should be read in conjunction with Item 7, Management's Discussion and Analysis
of Financial Condition and Results of Operations, and Item 8, Financial
Statements and Supplementary Data.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1996 1995 1994 1993 1992
------------ ------ ------ ------ -------
(IN MILLIONS) PRE-ACQUISITION COMBINED
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating Results Data(a):
Operating revenues........................ $2,735 $1,975 $2,421 $2,862 $ 2,225
Extraordinary loss, net of income
tax(b)................................. (234) -- -- (25) (9)
Cumulative effect of changes in accounting
principles, net of income tax.......... -- -- -- -- (332)(c)
Net income (loss)......................... (105) 157 153 163 (161)
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------
1996 1995 1994 1993 1992
------------ ------ ------ ------ -------
POST-
ACQUISITION
CONSOLIDATED PRE-ACQUISITION COMBINED
(IN MILLIONS) ------------ ----------------------------------
<S> <C> <C> <C> <C> <C>
Financial Position Data(a):
Total assets.............................. $5,755 $5,792 $5,730 $4,290 $ 4,054
Long-term debt(d)......................... 1,150 1,811 2,242 2,019 2,282
Stockholders' or combined equity(d)....... 1,234 687 382 (652) (1,503)
</TABLE>

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

(a) During 1996, subsequent to the Merger, EPTPC sold 70 percent of its interest
in the Company's two Australian pipelines and completed the sale of its oil
and gas exploration, production and financing unit, Tenneco Ventures. During
1995, 1994 and 1993, EPTPC completed several acquisitions and dispositions,
the most significant of which was the acquisition of the natural gas
pipeline assets of PASA in 1995 and the disposition of its 50 percent
interest in Kern River in 1995.

(b) Reflects extraordinary losses as a result of the retirement of long-term
debt in the debt realignment preceding the Merger during 1996, an
extraordinary loss as a result of the prepayment of long-term debt during
1993 and an extraordinary loss as a result of the defeasance of high
interest bearing long-term debt during 1992.

(c) In 1992, the Company adopted SFAS No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions, and SFAS No. 109, Accounting
for Income Taxes.

(d) Amounts for the pre-acquisition periods are net of allocations from Old
Tenneco to the Industrial Business and Shipbuilding Business. The allocation
is based on the portion of Old Tenneco's investment in the Industrial
Business and Shipbuilding Business that is deemed to be debt, generally
based on the ratio of the Industrial Business' and Shipbuilding Business'
net assets to Old Tenneco's consolidated net assets plus debt. Old Tenneco's
historical practice has been to incur indebtedness for its consolidated
group at the parent company level or at a limited number of subsidiaries,
rather than at the operating company level, and to centrally manage various
cash functions. Management believes that the historical allocation of
corporate debt and interest expense is reasonable; however, it is not
necessarily indicative of EPTPC's debt and interest expense which may be
incurred in the future. See Note 15 of Item 8, Financial Statements and
Supplementary Data.

10
<PAGE> 14

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

MERGER TRANSACTION

On December 12, 1996, Old Tenneco and an indirect subsidiary of EPG
completed the Merger and Old Tenneco became an indirect subsidiary of EPG. The
Merger was effected in accordance with the Merger Agreement. In the Merger, Old
Tenneco changed its name to EPTPC. Prior to the Merger, Old Tenneco and its
subsidiaries effected various intercompany transfers and distributions which
restructured, divided and separated their businesses, assets and liabilities so
that all the assets, liabilities and operations related to the Industrial
Business and the Shipbuilding Business were spun-off to Old Tenneco's then
existing common stockholders in the Distributions. The entity consisting of the
Industrial Business was subsequently renamed Tenneco Inc. (referred to herein as
"New Tenneco") and the entity consisting of the Shipbuilding Business was
subsequently renamed Newport News. Following the Distributions, the remaining
operations of the Company consisted primarily of those operations related to the
transmission and marketing of natural gas and the discontinued operations of Old
Tenneco. In preparation for the Merger and Distributions, Old Tenneco initiated
the Debt Realignment. As part of the Debt Realignment, Old Tenneco initiated
tender offers for certain issues of debt of Old Tenneco and certain of its
subsidiaries and certain other debt issues which were exchanged into New Tenneco
debt, defeased, or otherwise retired. Upon completion of the Debt Realignment
transactions, the Company is only responsible for its remaining debt which was
not tendered, exchanged, defeased or otherwise retired. As a result of the
Merger, EPG owns 100 percent of the common stock of EPTPC, representing at the
effective time of the Merger approximately 75 percent of the equity value of
EPTPC; the balance of the equity value of EPTPC is held by the holders of its
Series A Preferred Stock that was issued in a registered public offering in
November 1996 and remains outstanding. For a further discussion, see Note 1 of
Item 8, Financial Statements and Supplementary Data.

RESULTS OF OPERATIONS

Results of operations comparisons have been conformed to the
reclassification of the Combined Statements of Income.

YEAR ENDED DECEMBER 31, 1996, COMPARED TO YEAR ENDED DECEMBER 31, 1995

Operating Revenues

The Company's operating revenues in 1996 increased by 38 percent over the
operating revenues in 1995. Revenues from the energy-related operations of the
Company that are subject to regulation by FERC (generally referred to herein as
its "regulated" operations) increased to $861 million, or 13 percent. Of the
increase, $55 million was primarily due to benefits derived from a new rate
structure implemented on July 1, 1995 and $34 million was due to regulatory
adjustments that had no operating income impact. Revenues from the
energy-related operations of the Company that are not generally subject to
regulation by FERC (generally referred to herein as its "non-regulated"
operations) increased 60 percent to $1.8 billion, primarily due to higher
natural gas prices and volumes. Additionally, the acquisition of the assets of
PASA in June 1995 and new processing and gathering projects increased revenues
by $44 million. Revenues in 1996 from other operations were $29 million compared
with $59 million in the prior year due to lower interest revenue from the
continuing liquidation of Case Corporation receivables.

Operating Income

Operating income from regulated operations increased to $250 million or 40
percent in 1996 due to benefits derived from the new rate structure and
increased transportation volumes. Additionally, approximately $42 million of
environmental costs were reflected in 1995 and offset by insurance recoveries as
a result of the environmental settlement. These insurance recoveries were
included in other income as discussed

11
<PAGE> 15

below. Offsetting this increase were transition costs recognized in 1996 related
to the Merger and higher operating costs.

Non-regulated operating losses were $6 million in 1996 compared with income
of $3 million in 1995. 1996 increases included higher volumes and prices from
Tenneco Ventures' oil and gas production of $11 million and the acquisition of
PASA in June 1995 which contributed $10 million. Tenneco Ventures and 70 percent
of the Company's interest in the Australian pipelines were sold in December 1996
subsequent to the Merger. These increases were offset primarily by lower margins
from marketing activities.

Operating losses from other operations of the Company increased to $62
million or 26 percent in 1996 primarily due to lower interest revenue from the
continuing liquidation of Case Corporation receivables. In anticipation of the
Merger, Old Tenneco sold all of the Case Corporation retail receivables to New
Tenneco for an amount equal to their book value. Accordingly, income from these
receivables will not be recognized in future periods.

Other (Income) and Expense

Other expense increased to $19 million in 1996. The increase resulted from
a $30 million gain recognized in 1995 from the sale of Kern River, the absence
of earnings due to the sale of Kern River which contributed $33 million in 1995,
higher interest expense in 1996 of $20 million due to higher levels of debt, and
insurance recoveries in 1995 related to environmental costs, as discussed above.
Offsetting these items were $15 million in legal settlements and the recognition
of a $32 million deferred gain on the sale of certain investments. Additionally,
1995 included a $30 million reserve for estimated regulatory and legal
settlement costs and a $25 million reserve for the liquidation of surplus real
estate holdings.

Prior to the Merger, Old Tenneco's historical practice has been to incur
indebtedness for its consolidated group at the parent company level or at a
limited number of subsidiaries, rather than at an operating company level, and
to centrally manage various cash functions. Consequently, the corporate debt of
Old Tenneco and its related interest expense have been allocated to Old
Tenneco's automotive, packaging and shipbuilding businesses ("Old Tenneco's
former non-energy operations") based upon the portion of Old Tenneco's
investment in Old Tenneco's former non-energy operations which was deemed to be
debt, generally based upon the ratio of Old Tenneco's former non-energy
operations' net assets to Old Tenneco's consolidated net assets plus debt.
Interest expense was allocated at a rate equivalent to the weighted average cost
of all corporate debt, which was 8.2 percent, 7.7 percent and 8.3 percent for
1996, 1995 and 1994, respectively. Total pre-tax interest expense allocated to
Old Tenneco's former non-energy operations in 1996, 1995 and 1994 was $211
million, $180 million and $120 million, respectively. Old Tenneco's former
non-energy operations have also been allocated tax benefits approximating 35
percent of the allocated pre-tax interest expense. Although interest expense and
the related tax effects have been allocated to Old Tenneco's former non-energy
operations for financial reporting on a historical basis, Old Tenneco's former
non-energy operations have not been billed for these amounts. The changes in
allocated corporate debt and the after-tax allocated interest expense have been
included as a component of the combined equity of the Company. Although
management believes that the historical allocation of corporate debt and
interest is reasonable, it is not necessarily indicative of the debt and
interest expense of the Company subsequent to the Merger or the debt that it may
incur in the future.

Income Tax Expense (Benefit)

Income tax expense for 1996 was $34 million compared to an $11 million
income tax benefit for 1995. The effective tax rate was 20.9 percent and (7.5)
percent for 1996 and 1995, respectively. The increase in tax expense resulted
primarily from the realization of tax benefits totaling $38 million in 1996
compared to $72 million in 1995. For an additional discussion of income taxes,
see Note 7 of Item 8, Financial Statements and Supplementary Data.

12
<PAGE> 16

Extraordinary Loss

In preparation for the Merger and Distributions, Old Tenneco initiated a
realignment of its indebtedness. Upon completion of the debt realignment
transactions, the Company is only responsible for its remaining debt which was
not tendered, exchanged, defeased or otherwise retired (approximately $265
million of such debt remained outstanding immediately after the Merger). The
Company recognized an after-tax extraordinary charge of $234 million related to
the debt realignment immediately prior to the Merger.

YEAR ENDED DECEMBER 31, 1995, COMPARED TO YEAR ENDED DECEMBER 31, 1994

Operating Revenues

Operating revenues for 1995 decreased by 18 percent compared with 1994. The
regulated operations experienced a decline in revenues from $920 million in 1994
to $761 million in 1995. Lower regulated merchant gas sales caused a decline of
approximately $222 million. Under FERC Order No. 636, customers assume the
responsibility for acquiring their gas supplies, reducing sales by the pipeline.
Other non-recurring regulatory adjustments, that had no operating income impact,
partially offset the decrease in revenues by $63 million. Revenues in the
nonregulated operations in 1995 were $1,155 million, down $299 million compared
with 1994. Average natural gas prices were lower in 1995 compared with 1994,
contributing approximately $175 million to the revenue decrease. Furthermore,
natural gas volumes declined, contributing $148 million to the revenue decrease.
Warmer weather in early 1995 resulted in lower levels of storage activity during
the year, decreasing demand for natural gas and forcing prices lower. These
effects were offset somewhat by approximately $18 million in revenues earned by
the PASA assets which were acquired by the Company in June 1995. Revenues from
the other operations of the Company were $59 million in 1995 compared with $47
million in 1994.

Operating Income

Operating income from regulated operations was down by $99 million in 1995
as compared with 1994 primarily due to the termination or expiration of
transportation contracts and an $11 million benefit recognized in 1994 from the
Columbia Gas contract settlement. Additionally, approximately $42 million of
environmental costs were reflected in 1995 and offset by insurance recoveries as
a result of the environmental settlement. These insurance recoveries are
included in other income as discussed below. The 1995 operating income for the
nonregulated business decreased by $11 million compared with 1994. The operating
income decline was due to increased startup and development costs on
international programs of approximately $12 million, lower margins and volumes
due to lower demand in gas marketing which resulted in a $9 million decrease,
and an increase in administrative costs of approximately $5 million. These
decreases were partially offset by approximately $9 million in operating income
from the PASA assets during the last half of 1995. The Company's other
operations reported an operating loss of $49 million in 1995 compared to $41
million in 1994.

Other (Income) and Expense

Other income increased to $14 million in 1995. The increase resulted from a
$30 million gain recognized in 1995 from the sale of Kern River, lower interest
expense of $20 million, and insurance recoveries related to environmental costs,
as discussed above. These increases were partially offset by a $23 million gain
from the 1994 sale of a 20 percent interest in the Company's marketing and
intrastate pipeline subsidiary to Ruhrgas Aktiengesellschaft, a $7 million loss
on the 1995 sale of TGP's interest in Ozark, a $30 million reserve for estimated
regulatory and legal settlement costs, and a $25 million charge to establish a
reserve for liquidation of surplus real estate holdings and notes. The Company
reacquired Ruhrgas Aktiengesellschaft's interest in the marketing and intrastate
pipeline subsidiary in September 1996.

Income Tax Expense (Benefit)

Income tax benefit for 1995 was $11 million compared with income tax
expense of $72 million in 1994. The effective tax rate for 1995 was (7.5)
percent compared with 32 percent in 1994.

13
<PAGE> 17

LIQUIDITY AND CAPITAL RESOURCES

CASH FROM OPERATING ACTIVITIES

Net cash used in operating activities was $27 million for 1996, compared
with $765 million of net cash provided by operating activities for 1995. This
decrease was due primarily to a reduction in the level of trade receivables
sold, which was $370 million lower in 1996 compared with 1995. Operating cash
flow in 1996 also declined $374 million as a result of higher tax payments
compared with 1995 due to the settlement of 1987 through 1989 federal tax
liabilities and TGP's gas contract settlements of $392 million.

Net cash provided by operating activities was $765 million for 1995
compared with $278 million of net cash used in operating activities for 1994.
The Company generated $783 million from the collection and sale of customer
receivables in 1995 compared with $245 million in 1994. This was due to the sale
of $470 million of receivables and the collection of Case Corporation retail
receivables in 1995.

CASH FROM INVESTING ACTIVITIES

The sale of businesses and assets generated $465 million during 1996
compared with $17 million in 1995 and $68 million in 1994, respectively. These
sales included a 50 percent interest in Kern River, 70 percent of the Company's
interests in two natural gas pipeline systems in Australia and the sale of the
Company's oil and gas exploration, production and financing unit, formerly known
as Tenneco Ventures.

In 1996, the Company reacquired for $41 million the 20 percent interest in
the Company's marketing and intrastate pipeline subsidiary. PASA was acquired
for approximately $225 million in 1995.

The Company invested $323 million in capital expenditures in its existing
businesses during 1996, $337 million during 1995 and $345 million during 1994.
The Company's planned capital and investment expenditures for 1997 of $254
million are primarily for the maintenance of pipeline systems and other
facilities, expansion of international operations and non-regulated operations,
and system enhancements.

During 1996, subsequent to the Merger, the Company made advances to EPG of
approximately $170 million.

Future funding for capital expenditures, acquisitions, and other investing
expenditures will be provided by internally generated funds, debt issuances,
available credit facilities and/or contributions from EPG.

CASH FROM FINANCING ACTIVITIES

Net cash used in financing activities was $177 million during 1996, $150
million more than the same period in 1995. Dividends paid on Old Tenneco common
and preferred stock during 1996 were $321 million. The Company repurchased $172
million of common stock in 1996, down $483 million from the previous year.
During 1996, the Company had net borrowings under credit facilities and
short-term debt of approximately $1.2 billion, including amounts borrowed under
EPTPC's Revolving Credit and Competitive Advance Facility (the "Credit
Facility"). The proceeds from the 1996 short-term borrowings were generally
utilized to pay distributions to affiliates, dividends, capital expenditures and
to fund other operating cash flow uses discussed above. Old Tenneco also retired
$2.3 billion of long-term debt in 1996 compared to $497 million retired in 1995.
In November 1996, $296 million of Series A Preferred Stock was issued in a
registered public offering and remains outstanding. Finally, the Company
received contributions of $476 million in cash from affiliates, as compared to
contributions from affiliates of $320 million received in 1995. Cash
contributions from and distributions to affiliates vary based on cash generated
by affiliates from operations net of cash required for operating and investing
activities.

Net cash used in financing activities was $27 million during 1995. In
addition to business expansion, the Company used its cash flow during 1995 for
the scheduled retirement of $497 million in long-term debt, to reacquire Old
Tenneco Common Stock for $655 million and to pay $286 million in dividends on
Old Tenneco stock. In addition, the Company issued approximately $1 billion of
total short-term and long-term debt in

14
<PAGE> 18

1995. During 1994, the Company had a net reduction of $605 million in debt and
paid dividends on Old Tenneco stock of $318 million. Other cash sources included
net contributions from affiliates of $1.4 billion.

Future funding for long-term debt retirements, dividends, and other
financing expenditures will be provided by internally generated funds, debt
issuances, available credit facilities and/or contributions from EPG.

LIQUIDITY

Historically, excess net cash flows from operating and investing activities
have been used to meet consolidated debt and other obligations. Conversely, when
cash requirements have been in excess of cash flows from operations, the Company
has utilized its consolidated credit facilities to fund the EPTPC obligations.
Also, depending on market and other conditions, EPTPC has utilized external
sources of capital to meet specific funding requirements.

Prior to the Merger, Old Tenneco restructured its consolidated indebtedness
for money borrowed pursuant to the Debt Realignment through a series of tender
offers, exchange offers, payments, defeasances, and prepayments. At December 31,
1996, the Company's outstanding debt consisted of $265 million of long-term debt
which remained outstanding after the Debt Realignment and $1.6 billion of
borrowings under the $3 billion Credit Facility.

In February 1997, EPG issued 3 million shares of its common stock resulting
in net proceeds of $152 million. This amount was used to reduce the $1.6 billion
outstanding under the Credit Facility at December 31, 1996. The availability of
borrowings under the Company's agreements and facilities is subject to its
ability at the time to meet certain specified conditions, which management
believes it currently meets. These conditions include compliance with the
financial covenants and ratios required by such agreements, absence of default
under such agreements, and continued accuracy of the representations and
warranties contained in such agreements (including the absence of any material
adverse changes since the specified dates).

In February 1997, TGP's shelf registration statement on Form S-3 filed with
the SEC covering an aggregate of $1 billion unsecured debt securities was
declared effective. In March 1997, TGP issued $900 million of long-term debt,
the proceeds of which were used to pay down the Credit Facility.

At December 31, 1996, the Company's balance sheet reflected a negative
working capital balance of $519 million. This included $700 million of
borrowings under the Credit Facility and a $167 million rate refund payable
which will be refunded to customers in March 1997.

The Company believes its internally generated funds from operations,
available credit facilities and contributions from EPG will provide adequate
sources of working capital and funds to finance its future capital requirements.

COMMITMENTS AND CONTINGENCIES

Capital Commitments

At December 31, 1996, the Company had capital or investment commitments of
$36 million which are expected to be funded through cash provided by operations
and/or incremental borrowings. The Company's other planned capital and
investment projects are discretionary in nature, with no substantial capital
commitments made in advance of the actual expenditures.

Purchase Obligations

15
<PAGE> 19

under such obligations, including additional purchases in excess of contractual
obligations, were $25 million, $26 million and $34 million for the years 1996,
1995 and 1994, respectively. In addition, in connection with the Great Plains
coal gasification project, TGP continues to have an obligation to purchase 30
percent of a capped volume of the plant output through July 2009. TGP has
executed a settlement of this contract as a part of its GSR negotiations
discussed in "Rates and Regulatory Matters," below.

Guarantees

The Company has guaranteed various obligations of its subsidiaries, which
obligations are not expected to exceed $3 million. For further information, see
Note 4 of Item 8, Financial Statements and Supplementary Data.

Rates and Regulatory Matters

A phased proceeding was scheduled at FERC with respect to the recovery of
TGP's GSR costs. Testimony has been completed in connection with Phase I of that
proceeding relating to the eligibility of GSR cost recovery. Phase II of the
proceeding on the prudency of the costs to be recovered and on certain contract
specific eligibility issues has not yet been scheduled. Although the Order No.
636 transition cost recovery mechanism provides for complete recovery by
pipelines of eligible and prudently incurred transition costs, certain customers
have challenged the prudence and eligibility of TGP's GSR costs and settlement
discussions have been entered into with TGP's customers concerning the amount of
such costs in response to FERC's public statements encouraging such settlements.

On February 28, 1997, TGP filed with FERC a proposed settlement of all
issues related to the recovery by TGP of its GSR and other transition costs and
related proceedings (the "GSR Stipulation and Agreement"). Upon final approval
by FERC, this settlement will become effective retroactive to
January 1, 1997. The settlement is based upon a preliminary GSR understanding,
which called for sharing of transition costs, that EPG reached with TGP's
customers in October 1996 in anticipation of the Merger. The GSR Stipulation and
Agreement allows for TGP to recover up to $770 million in GSR and other
transition costs, including interest, of which approximately $531 million has
previously been recovered, subject to refund, pending resolution of the
transition cost issues. Assuming FERC approves the GSR Stipulation and
Agreement, TGP will be entitled to recover additional transition costs, up to
the remaining $239 million, through a two-year demand transportation surcharge
and an interruptible transportation surcharge. The terms of the GSR Stipulation
and Agreement provide for a rate case moratorium through November 2000
(subject to certain limited exceptions) and provide a rate cap, indexed to
inflation, through October 31, 2005, for certain of TGP's customers. The
purchase accounting adjustments reflected in the Company's consolidated
financial statements assume approval of the settlement with respect to TGP's GSR
and other transition costs in accordance with the terms of the GSR Stipulation
and Agreement.

Although parties to TGP's transition cost proceedings do not have to
declare their support or opposition to the GSR Stipulation and Agreement until
mid-March, management believes that all of TGP's customers will support or not
oppose the GSR Stipulation and Agreement.

In order to resolve litigation concerning purchases made by TGP of
synthetic gas produced from the Great Plains coal gasification plant, TGP, along
with three other pipelines, executed four separate settlement agreements with
Dakota and the U.S. Department of Energy and initiated four separate proceedings
at FERC seeking approval to implement the settlement agreements. Among other
things, the settlement required TGP to pay Dakota over a limited period a
premium over the spot price for Dakota's production and resolves the litigation
with Dakota. As of December 31, 1996, TGP had paid $87 million of this premium
obligation and has accrued its estimated remaining premium obligation through
December 2003 of $55 million. FERC previously ruled that the costs related to
the Great Plains project are eligible for recovery through GSR and other special
recovery mechanisms and that the costs are eligible for recovery for the
duration of the term of the original gas purchase agreements. In October 1994,
FERC consolidated the four proceedings and set them for hearing before an ALJ.
The hearing, which concluded in July 1995, was limited to the issue of whether
the settlement agreements are prudent. The ALJ concluded, in his initial
decision issued in December 1995, that

16
<PAGE> 20

the settlement was not prudent. In December 1996, FERC unanimously reversed that
decision and upheld the settlements among the pipelines, the U.S. Department of
Energy and Dakota. No parties filed for rehearing of the FERC decision. TGP
notified Dakota in December 1996 that it accepted the settlement.

In December 1994, TGP filed for a general rate increase (the "1995 Rate
Case"). In January 1995, FERC accepted the filing, suspended its effectiveness
for the maximum period of five months pursuant to normal regulatory process, and
set the matter for hearing. On July 1, 1995, TGP began collecting rates, subject
to refund, reflecting an $87 million increase in TGP's annual revenue
requirement. A Stipulation was filed with an ALJ in this proceeding in April
1996. This Stipulation resolves the rates that are the subject of the 1995 Rate
Case, including a structural rate design change that results in a larger
proportion of TGP's transportation revenues being dependent upon throughput.
Under the Stipulation, TGP is required to refund, upon final approval of the
Stipulation, the difference between the revenues collected under the July 1,
1995 motion rates and the revenues that would have been collected pursuant to
rates underlying the Stipulation. In October 1996, FERC approved the Stipulation
with certain modifications and clarifications which are not material. In January
1997, FERC issued an order denying requests for rehearing of the October 1996
order. Refunds will be made in March 1997. The Company has established a
provision for these refunds, and the balance of this provision at December 31,
1996 was $167 million. One party to the rate proceeding, a competitor of TGP,
filed with the Court of Appeals a Petition for Review of the FERC orders
approving the Stipulation.

Management believes the ultimate resolution of the aforementioned rate and
regulatory matters, which are in various stages of finalization, will not have a
materially adverse effect on the Company's financial position. For a further
discussion of regulatory matters, see Note 5 of Item 8, Financial Statements and
Supplementary Data.

Future Projects

In September 1996, a subsidiary of the Company was selected to acquire a 50
percent controlling interest in an operating 70 MW power plant located in
Dunaujvaros, Hungary. The electricity generated at this plant is consumed by
Dunaferr, the largest steel mill in Hungary. Excess power is sold pursuant to
long-term contracts to the Hungarian national electric utility. Subject to
satisfaction of certain conditions, the acquisition is scheduled to be finalized
in the first quarter of 1997. The assets will be acquired for approximately $25
million and no financing will be involved. The Company is seeking political risk
insurance from the Overseas Private Investment Corporation for its equity
investment. The acquisition agreement requires the Company to study and, if
deemed economically feasible, to expand the electric generating plant. The
feasibility study is underway.

Legal Proceedings

See Item 3, Legal Proceedings which is incorporated herein by reference.

ENVIRONMENTAL

The Company is subject to extensive federal, state, and local laws and
regulations governing environmental quality and pollution control. These laws
and regulations require the Company to remove or remedy the effect on the
environment of the disposal or release of specified substances at ongoing and
former operating sites. As of December 31, 1996, the Company had a reserve of
approximately $187 million for the following environmental contingencies which
the Company anticipates incurring through 2002: (i) expected remediation costs
and associated onsite, offsite and groundwater technical studies of
approximately $134 million; and (ii) other costs of approximately $53 million.
For a further discussion of specific environmental matters, see Item 3, Legal
Proceedings and Note 5 of Item 8, Financial Statements and Supplementary Data.

17
<PAGE> 21

(CERCLA or Superfund) or state equivalents. The Company has sought to resolve
its liability as a PRP with respect to these Superfund sites through
indemnification by third parties and/or settlements which provide for payment of
the Company's allocable share of remediation costs. As of December 31, 1996, the
Company has estimated its share of the remediation costs at these sites to be
between $7 million and $41 million and has provided reserves that it believes
are adequate for such costs. Because the clean-up costs are estimates and are
subject to revision as more information becomes available about the extent of
remediation required, the Company's estimate of its share of remediation costs
could change. Moreover, liability under the federal Superfund statute is joint
and several, meaning that the Company could be required to pay in excess of its
pro rata share of remediation costs. The Company's understanding of the
financial strength of other PRPs has been considered, where appropriate, in its
determination of its estimated liability as described herein. The Company
presently believes that the costs associated with the current status of such
entities as PRPs at the Superfund sites referenced above will not have a
materially adverse effect on the financial position or results of operations of
the Company.

The Company estimates that its subsidiaries will make capital expenditures
for environmental matters of approximately $5 million in 1997 and that capital
expenditures for environmental matters will range from approximately $40 million
to $80 million in the aggregate for the years 1998 through 2007. These
expenditures primarily relate to compliance with air regulations and control of
water discharges.

OTHER

SFAS No. 71, Accounting for the Effects of Certain Types of Regulation

The Company's businesses that are subject to the regulations and accounting
requirements of FERC continue to meet the accounting requirements of SFAS No.
71. The Consolidated and Combined Balance Sheets of the Company contain assets
and liabilities related to operations which have been recorded pursuant to SFAS
No. 71. If these accounting principles should no longer be applied, an amount
would be charged to earnings as an extraordinary item. At December 31, 1996,
this amount was estimated to be approximately $59 million, net of income taxes.
Changes in the regulatory and economic environment may, at some point in the
future, create circumstances in which the application of regulatory accounting
principles is no longer appropriate. Any potential charge would be non-cash and
would have no direct effect on the ability to seek recovery of the underlying
deferred costs in future rate proceedings or on the ability to collect the rates
set thereby. For a further discussion of SFAS No. 71 issues, see Note 2 of Item
8, Financial Statements and Supplementary Data.

FERC Compliance Audits

TGP, as with all interstate pipelines, is subject to a FERC audit review of
its books and records. TGP currently has an open audit covering the years 1991
through 1994. FERC audit staff is expected to issue its audit report in early
1997.

RECENT PRONOUNCEMENTS

The Company adopted SFAS No. 125, SFAS No. 127 and Statement of Position
No. 96-1 effective January 1, 1997. The Company believes that these
pronouncements will not have a material impact on the Company's financial
position or results of operations. In addition, SFAS No. 128 and SFAS No. 129
were issued in early March 1997 and the Company is currently evaluating the
effect of these pronouncements. For a further discussion of these
pronouncements, see Note 2 of Item 8, Financial Statements and Supplementary
Data.

18
<PAGE> 22

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains or incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Where any such forward-looking statement includes a statement of the
assumptions or bases underlying such forward-looking statement, the Company
cautions that, while such assumptions or bases are believed to be reasonable and
are made in good faith, assumed facts or bases almost always vary from actual
results, and the differences between assumed facts or bases and actual results
can be material, depending upon the circumstances. Where, in any forward-looking
statement, the Company or its management expresses an expectation or belief as
to future results, such expectation or belief is expressed in good faith and is
believed to have a reasonable basis, but there can be no assurance that the
statement of expectation or belief will result or be achieved or accomplished.
The words "believe," "expect," "estimate," "anticipate" and similar expressions
identify forward-looking statements.

Taking into account the foregoing, the following are identified as
important factors that could cause actual results to differ materially from
those expressed in any forward-looking statement made by, or on behalf of, the
Company:

HIGHLY COMPETITIVE INDUSTRY

The ability to maintain or increase current transmission, gathering,
processing, and sales volumes, or to remarket unsubscribed capacity, can be
subject to the impact of future weather conditions, including those that
favor other alternative energy sources; price competition; drilling
activity and supply availability; and service competition. Future
profitability also may be affected by the Company's ability to compete with
the services offered by other energy enterprises which may be larger, offer
more services, and possess greater resources. The ability of TGP to
negotiate new contracts and to renegotiate existing contracts (70 percent
of which are expiring over the next five years, principally in the year
2000) could be adversely affected by the proposed construction of
additional pipeline capacity in the Northeast U.S., reduced demand due to
higher gas prices, the availability of alternative energy sources, and
other factors that are not within its control. For a further discussion see
Item 1, Business -- Regulated Operations -- Markets and Competition.

IMPACT OF NATURAL GAS AND NATURAL GAS LIQUIDS PRICES

The value of natural gas transmission services is based on an all-in
cost, including the cost of the natural gas. Therefore, the Company's
ability to compete with other transporters is impacted by natural gas
prices in the supply basins connected to its pipeline systems compared to
prices in other gas producing regions, especially Canada. Additionally,
revenues generated by the Company from its gathering and processing
contracts are dependent upon volumes and rates, both of which can be
affected by the prices of natural gas and natural gas liquids. Fluctuations
in energy prices are caused by a number of factors, including regional,
domestic and international demand, availability and adequacy of
transportation facilities, energy legislation, federal or state taxes, if
any, on the sale or transportation of natural gas and natural gas liquids
and the price and abundance of supplies of alternative energy sources.

USE OF DERIVATIVE FINANCIAL INSTRUMENTS

In the ordinary course and conduct of its business, some of the
Company's non-regulated subsidiaries are engaged in the gathering,
processing and marketing of natural gas and other energy commodities and
utilize futures and option contracts traded on the New York Mercantile
Exchange and Over-The-Counter options and price and basis swaps with other
gas merchants and financial institutions. The Company could incur financial
losses in future periods as a result of volatility in the market values of
the underlying commodities.

19
<PAGE> 23

ACQUISITIONS AND INVESTMENTS

Opportunities for growth through acquisitions and investments in joint
ventures, and future operating results and the success of acquisitions and
joint ventures within and outside the U.S. may be subject to the effects
of, and changes in, U.S. and foreign trade and monetary policies, laws and
regulations, political and economic developments, inflation rates, and the
effects of taxes and operating conditions. Activities in areas outside the
U.S. also are subject to the risks inherent in foreign operations,
including loss of revenue, property and equipment as a result of hazards
such as expropriation, nationalization, war, insurrection and other
political risks, and the effects of currency fluctuations and exchange
controls. Such legal and regulatory delays and other unforeseeable
obstacles may be beyond the Company's control or ability to manage.

PENDING REGULATORY PROCEEDINGS

TGP has entered into comprehensive settlements with its customers
that, if approved by FERC, would resolve many of the transportation rate,
gas supply realignment and other transition issues in which it is involved.
Whether FERC will approve such settlements in the form filed or whether
these regulatory proceedings will be otherwise resolved in a manner
satisfactory to the Company cannot be predicted with certainty, and the
business of the Company could be adversely affected thereby. For a
description of certain regulatory proceedings involving the Company, see
Item 1, Business -- Regulated Operations -- Regulatory Environment.

POTENTIAL ENVIRONMENTAL LIABILITIES

The Company may incur significant costs and liabilities in order to
comply with existing environmental laws and regulations. It is also
possible that other developments, such as increasingly strict environmental
laws, regulations and enforcement policies thereunder, and claims for
damages to property, employees, other persons and the environment resulting
from current or discontinued operations, could result in substantial costs
and liabilities in the future. For additional information concerning the
Company's environmental matters, see Note 5 of Item 8, Financial Statements
and Supplementary Data.

OPERATING HAZARDS AND UNINSURED RISKS

While the Company maintains insurance against certain of the risks
normally associated with the transportation, gathering and processing of
natural gas, including explosions, pollution and fires, the occurrence of a
significant event that is not fully insured against could have a material
adverse effect on the Company.

POTENTIAL LIABILITIES RELATED TO THE MERGER

The amount of the actual and contingent liabilities of Old Tenneco,
which remained the liabilities of the Company after the Merger, could vary
materially from the amount estimated by the Company, which was based upon
assumptions which may prove to be inaccurate. If New Tenneco or Newport
News were unable or unwilling to pay their respective liabilities, a court
could require the Company, under certain legal theories which may or may
not be applicable to the situation, to assume responsibility for such
obligations, which could have a material adverse effect on the Company.

UNCERTAINTY SURROUNDING INTEGRATION OF OPERATIONS

EPG is engaged in a comprehensive review of the business and
operations of EPTPC and its subsidiaries and has begun to integrate such
operations to increase operating and administrative efficiency through
consolidation and reengineering of facilities, workforce reductions and
coordination of purchasing, sales and marketing activities. Management
anticipates that the complementary interstate and intrastate pipeline
operations and energy marketing activities of the combined company should
provide increased operating flexibility and access to additional customers
and markets, although the amount and timing of the realization of such
benefits will depend upon the Company's ability to integrate

20
<PAGE> 24

successfully the businesses and operations of the companies, and the time
period over which such integration is effected.

POTENTIAL FEDERAL INCOME TAX LIABILITIES

In connection with the Merger and Distributions, the IRS issued a
private letter ruling to Old Tenneco, in which the IRS ruled that for U.S.
federal income tax purposes: (i) the Distributions would be tax-free to Old
Tenneco and, except to the extent cash was received in lieu of fractional
shares, to its then existing stockholders; (ii) the Merger would constitute
a tax-free reorganization; and (iii) that certain other transactions
effected in connection with the Merger and Distributions would be tax-free.
If the Distributions were not to qualify as tax-free distributions, then a
corporate level federal income tax would be assessed to the consolidated
group of which Old Tenneco was the common parent. This corporate level
federal income tax would be payable by EPTPC. Under certain limited
circumstances, however, New Tenneco and Newport News have agreed to
indemnify EPTPC for a defined portion of such tax liabilities.

REFINANCING AND INTEREST RATE EXPOSURE RISKS

The business and operating results of the Company can be adversely
affected by factors such as the availability or cost of capital, changes in
interest rates, changes in the tax rates due to new tax laws, market
perceptions of the natural gas industry or the Company, or security
ratings.

POTENTIAL FOR CHANGES IN ACCOUNTING STANDARDS

Authoritative generally accepted accounting principle or policy
changes from such standard setting bodies as the Financial Accounting
Standards Board, FERC, and the SEC may affect the Company's results of
operations or financial position.

21
<PAGE> 25

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

EL PASO TENNESSEE PIPELINE CO.

COMBINED STATEMENTS OF INCOME
(IN MILLIONS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
------- ------- -------
-- PRE-ACQUISITION COMBINED --
<S> <C> <C> <C>
Operating revenues:
Gas sales................................................. $1,788 $1,122 $1,695
Gas transportation........................................ 767 690 611
Other..................................................... 180 163 115
------ ------ ------
2,735 1,975 2,421
------ ------ ------
Operating expenses:
Cost of gas sold.......................................... 1,579 954 1,472
Operating expenses........................................ 455 414 379
General and administrative................................ 240 200 143
Finance charges........................................... 62 79 75
Depreciation, depletion and amortization.................. 217 196 102
------ ------ ------
2,553 1,843 2,171
------ ------ ------
Operating income............................................ 182 132 250
------ ------ ------
Other (income) and expense:
Interest income........................................... (32) (31) (21)
Interest expense, net of interest allocated to
affiliates............................................. 142 122 142
Equity in net income of affiliated companies.............. (30) (65) (51)
Gain on sale of assets, net............................... (35) (11) (1)
Gain on the sale by a subsidiary of its stock............. -- -- (23)
Other income, net......................................... (26) (29) (21)
------ ------ ------
19 (14) 25
------ ------ ------
Income before income taxes.................................. 163 146 225
Income tax expense (benefit)................................ 34 (11) 72
------ ------ ------
Income before extraordinary loss............................ 129 157 153
Extraordinary loss, net of income tax....................... (234) -- --
------ ------ ------
Net income (loss)........................................... $ (105) $ 157 $ 153
====== ====== ======
</TABLE>

The accompanying Notes are an integral part of these
Consolidated and Combined Financial Statements.

22
<PAGE> 26

EL PASO TENNESSEE PIPELINE CO.

CONSOLIDATED AND COMBINED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------
1996 1995
---------------- ----------------
POST-ACQUISITION PRE-ACQUISITION
CONSOLIDATED COMBINED
<S> <C> <C>
ASSETS
Current assets:
Cash and temporary cash investments....................... $ 14 $ 249
Notes receivable, net..................................... 9 180
Accounts receivable --
Customer accounts, net.................................. 233 328
Affiliated companies.................................... 170 199
Gas transportation and exchange......................... 218 64
Income taxes............................................ 213 133
Other................................................... 285 436
Inventories............................................... 42 36
Deferred income tax benefit............................... 67 --
Prepayments and other..................................... 46 71
------- -------
Total current assets............................... 1,297 1,696
------- -------
Plant, property and equipment, net.......................... 3,952 2,841
Investment in affiliated companies.......................... 322 280
Long-term notes and other receivables, net.................. 45 352
Other....................................................... 139 623
------- -------
4,458 4,096
------- -------
Total assets....................................... $5,755 $5,792
======= =======

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings (including current maturities on
long-term debt)......................................... $ 715 $ 456
Accounts payable --
Trade................................................... 422 365
Affiliated companies.................................... -- 88
Gas transportation and exchange......................... 156 28
Taxes accrued............................................. 38 525
Deferred income taxes..................................... -- 65
Interest accrued.......................................... 22 102
Rate refund payable....................................... 167 48
Other..................................................... 296 407
------- -------
Total current liabilities.......................... 1,816 2,084
------- -------
Note payable to affiliate................................... 170 --
------- -------
Long-term debt, less current maturities..................... 1,150 1,811
------- -------
Deferred income taxes, less current portion................. 769 323
------- -------
Postretirement benefits, less current portion............... 309 260
------- -------
Deferred credits and other liabilities...................... 307 478
------- -------
Total liabilities.................................. 4,521 4,956
------- -------
Minority interest........................................... -- 19
------- -------
Commitments and contingencies (See Note 5.)
Preferred stock with mandatory redemption provisions........ -- 130
------- -------
Equity:
Combined equity........................................... -- 687
Stockholders' equity:
Series A Preferred Stock................................ 296 --
Common stock, par value $.01 per share; authorized
100,000 shares; issued 1,000 shares................... -- --
Additional paid-in capital.............................. 938 --
Retained earnings....................................... -- --
------- -------
Total equity....................................... 1,234 687
------- -------
Total liabilities and equity....................... $5,755 $5,792
======= =======
</TABLE>

The accompanying Notes are an integral part of these
Consolidated and Combined Financial Statements.

23
<PAGE> 27

EL PASO TENNESSEE PIPELINE CO.

COMBINED STATEMENTS OF CASH FLOWS
(IN MILLIONS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1996 1995 1994
------- -------- --------
-- PRE-ACQUISITION COMBINED --
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................... $ (105) $ 157 $ 153
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities --
Extraordinary loss, net of tax............................ 234 -- --
Depreciation, depletion and amortization.................. 217 196 102
Equity in net income of affiliated companies, net of
dividends.............................................. 13 (12) (3)
Deferred income taxes..................................... (47) 88 51
Net gain on sale of assets................................ (35) (11) (24)
Cash paid for interest allocated to affiliates, net of
tax.................................................... (139) (117) (78)
Changes in components of working capital --
(Increase) decrease in receivables..................... 39 451 17
(Increase) decrease in inventories..................... (11) -- 5
(Increase) decrease in prepayments and other current
assets............................................... 15 8 30
Increase (decrease) in payables........................ 32 (25) (262)
Increase (decrease) in taxes accrued................... (163) 40 (252)
Increase (decrease) in interest accrued................ (83) (52) (39)
Increase (decrease) in rate refund payable............. 32 (156) (91)
Increase (decrease) in other current liabilities....... (34) (102) (60)
(Increase) decrease in long-term notes and other
receivables (net)...................................... 455 332 228
Take-or-pay recoupments, net.............................. 3 36 26
Other..................................................... (396) (68) (81)
------- ----- -----
Net cash provided by (used in) operating activities.... 27 765 (278)
------- ----- -----
Cash flows from investing activities:
Net proceeds from sale of businesses and assets........... 465 17 68
Expenditures for plant, property and equipment............ (323) (337) (345)
Acquisitions of businesses................................ (41) (241) --
Net change in affiliated advances......................... (170) -- --
Investments and other..................................... (16) 24 48
------- ----- -----
Net cash used in investing activities.................. (85) (537) (229)
------- ----- -----
Cash flows from financing activities:
Issuance of Old Tenneco common and treasury shares........ 164 102 188
Issuance of Series A Preferred Stock...................... 296 -- --
Purchase of Old Tenneco common stock...................... (172) (655) (26)
Redemption of Old Tenneco preferred stock................. (20) (20) (20)
Dividends (Old Tenneco common and preferred stock)........ (321) (286) (318)
Redemption of equity securities by a subsidiary........... -- -- (160)
Net increase (decrease) in short-term debt excluding
current maturities on long-term debt................... (410) 415 (97)
Net increase in borrowings under the Credit Facility...... 1,600 -- --
Increase in note payable to affiliate..................... 170 -- --
Issuance of other long-term debt.......................... 310 594 --
Retirement of long-term debt.............................. (2,270) (497) (508)
Net cash contributions from affiliates.................... 476 320 1,367
------- ----- -----
Net cash provided by (used in) financing activities.... (177) (27) 426
------- ----- -----
Increase (decrease) in cash and temporary cash
investments............................................... (235) 201 (81)
Cash and temporary cash investments, at beginning of
period.................................................... 249 48 129
------- ----- -----
Cash and temporary cash investments, at end of period....... $ 14 $ 249 $ 48
======= ===== =====
</TABLE>

The accompanying Notes are an integral part of these
Consolidated and Combined Financial Statements.

24
<PAGE> 28

EL PASO TENNESSEE PIPELINE CO.

STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY
AND COMBINED EQUITY
(IN MILLIONS EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON STOCK SERIES A ADDITIONAL
---------------- PREFERRED PAID-IN RETAINED COMBINED TOTAL
SHARES AMOUNT STOCK CAPITAL EARNINGS EQUITY EQUITY
------ ------- --------- ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
January 1, 1994 Pre-Acquisition Combined......... -- $ -- $ -- $ -- $ -- $ (652) $ (652)
Net income..................................... 153 153
Cash paid for interest allocated to affiliates,
net of tax.................................. (78) (78)
Change in corporate debt allocated to
affiliates.................................. (135) (135)
Cash contributions from (distributions to)
affiliates, net............................. 1,367 1,367
Noncash contributions from (distributions to)
affiliates, net............................. (98) (98)
Contributions from (distributions to) Old
Tenneco stockholders, net................... (175) (175)
----- ------- ---- ---- ------- ------- -------
December 31, 1994 Pre-Acquisition Combined....... -- -- -- -- -- 382 382
Net income..................................... 157 157
Cash paid for interest allocated to affiliates,
net of tax.................................. (117) (117)
Change in corporate debt allocated to
affiliates.................................. 930 930
Cash contributions from (distributions to)
affiliates, net............................. 320 320
Noncash contributions from (distributions to)
affiliates, net............................. (235) (235)
Contributions from (distributions to) Old
Tenneco stockholders, net................... (750) (750)
----- ------- ---- ---- ------- ------- -------
December 31, 1995 Pre-Acquisition Combined....... -- -- -- -- -- 687 687
Net loss....................................... (105) (105)
Cash paid for interest allocated to affiliates,
net of tax.................................. (139) (139)
Change in corporate debt allocated to
affiliates.................................. (2,292) (2,292)
Cash contributions from (distributions to)
affiliates, net............................. 476 476
Noncash contributions from (distributions to)
affiliates, net............................. 2,126 2,126
Contributions from (distributions to) Old
Tenneco stockholders, net................... (267) (267)
Issuance of Series A Preferred Stock........... 296 296
----- ------- ---- ---- ------- ------- -------
December 11, 1996 Pre-Acquisition Combined....... -- -- 296 -- -- 486 782
Merger transaction............................. 1,000 -- 486 -- (486) --
Acquisition adjustment to record assets and
liabilities at fair value................... 452 452
----- ------- ---- ---- ------- ------- -------
December 31, 1996 Post-Acquisition
Consolidated................................... 1,000 $ -- $296 $938 $ -- $ -- $ 1,234
===== ======= ==== ==== ======= ======= =======
</TABLE>

The accompanying Notes are an integral part of these
Consolidated and Combined Financial Statements.

25
<PAGE> 29

EL PASO TENNESSEE PIPELINE CO.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

1. MERGER AND DISTRIBUTIONS

On December 12, 1996, EPTPC (formerly Tenneco Inc.) became an indirect
subsidiary of EPG as a result of the Merger between Old Tenneco and an indirect
subsidiary of EPG. Prior to the Merger, Old Tenneco and its subsidiaries
effected various intercompany transfers and distributions which restructured,
divided and separated their businesses, assets and liabilities so that all the
assets, liabilities and operations related to the Industrial Business and the
Shipbuilding Business were spun-off to Old Tenneco's then existing common
stockholders in the Distributions. The entity consisting of the Industrial
Business was subsequently renamed Tenneco Inc. (referred to herein as "New
Tenneco") and the entity consisting of the Shipbuilding Business was renamed
Newport News. Following the Distributions, the remaining operations consisted
primarily of those operations related to the transmission and marketing of
natural gas and the discontinued operations of Old Tenneco. Pursuant to the
Merger, Old Tenneco was renamed EPTPC. As a result of the Merger, EPG indirectly
owns 100 percent of the common stock of EPTPC, representing at the effective
time of the Merger approximately 75 percent of the equity value of EPTPC; the
balance of the equity value of EPTPC is held by the holders of its Series A
Preferred Stock, which was issued in a registered public offering in November
1996 and remains outstanding.

As used in these financial statements, unless the context otherwise
requires, the "Company" refers to: (i) for periods as of and subsequent to the
Merger, EPTPC and consolidated subsidiaries; and (ii) for periods prior to the
Merger, the combined historical businesses and operations of Old Tenneco owned
directly or indirectly by EPTPC (the "Energy Businesses of EPTPC"), principally
the energy businesses and certain discontinued operations of Old Tenneco. See
also "Basis of Presentation" discussion below.

In preparation for the Merger and Distributions, Old Tenneco initiated the
Debt Realignment. As part of the Debt Realignment, Old Tenneco initiated tender
offers for certain issues of the Company's debt and certain other debt issues
were exchanged into New Tenneco debt, defeased or otherwise retired. Upon
completion of the debt realignment transactions, the Company is only responsible
for the remaining debt which was not tendered, exchanged, defeased or otherwise
retired. The Company recognized an after-tax extraordinary charge of $234
million related to the Debt Realignment immediately prior to the Merger.

At December 31, 1996, EPTPC had approximately $1.6 billion of borrowings
under the Credit Facility dated as of November 4, 1996. In addition, the Company
had $300 million ($296 million net book value) of Series A Preferred Stock
outstanding and $134 million aggregate principal amount of debt which was not
redeemed or retired as a part of the Debt Realignment. Borrowings under the
Credit Facility are guaranteed by EPG. The primary assets of EPTPC consist of
its investment in TGP, which holds the majority of the Company's operations, and
management anticipates that the funds necessary to service the debt and other
securities of EPTPC will be provided by EPG or the operations and asset sale or
financing transactions of TGP.

On October 30, 1996, the IRS issued a private letter ruling to Old Tenneco,
in which the IRS ruled that for U.S. federal income tax purposes: (i) the
Distributions would be tax-free to Old Tenneco and, except to the extent cash
was received in lieu of fractional shares, to its then existing stockholders;
(ii) the Merger would constitute a tax-free reorganization; and (iii) that
certain other transactions effected in connection with the Merger and
Distributions would be tax-free. If the Distributions were not to qualify as
tax-free distributions, then a corporate level federal income tax would be
assessed to the consolidated group of which Old Tenneco was previously the
common parent. This corporate level federal income tax would be payable by
EPTPC. Under certain limited circumstances, however, New Tenneco and Newport
News. have agreed to indemnify EPTPC for a defined portion of such tax
liabilities.

The consideration provided in the Merger was approximately $4 billion,
including retained debt and EPG equity consideration valued at $913 million.

26
<PAGE> 30

Accounting for Acquisition by EPG

The acquisition of the Company by EPG pursuant to the Merger has been
accounted for using the purchase method of accounting and included the
application of "pushdown" accounting to the Company's financial statements
effective as of December 31, 1996. Accordingly, an allocation of the purchase
price has been assigned to the assets and liabilities acquired based upon the
estimated fair value of those assets and liabilities as of the acquisition date.
A substantial portion of the excess purchase price, approximately $1.6 billion,
has been allocated to the property, plant and equipment of the Company's
interstate pipeline systems. Such allocation is based on the Company's internal
evaluation of such assets. An independent appraisal of the fair value of the
property acquired is in process and is expected to be completed by mid-1997.
Should the independent appraisal not support such allocation, the excess of
total purchase price over fair value of net assets acquired will be reflected as
goodwill. In addition, the Company may make adjustments during 1997 to other
components of the preliminary purchase price allocation relating to regulatory,
tax, environmental or other issues based upon any changes in the Company's
preliminary assumptions or analysis. The final results of the independent
appraisal and the ultimate disposition of the purchase price allocation should
not materially impact future operating results. Current FERC policy does not
permit the Company to recover through its rates amounts allocated in purchase
accounting to its regulated operations in excess of original cost.

The consolidated balance sheet of EPTPC and subsidiaries as of December 31,
1996, contained herein reflects the purchase price recorded by EPG and is
referred to herein as "Post-Acquisition". The combined financial statements of
the Company for periods prior to December 31, 1996, are referred to as
"Pre-Acquisition". As a result of the change in the basis of accounting from
historical cost to reflect EPG's purchase cost, the financial statements for
Pre-Acquisition periods are not comparable to those of Post-Acquisition periods.
See also "Basis of Presentation" discussion below.

Pro Forma Information

The following unaudited pro forma information illustrates the effect of the
Merger and related transactions as if they had occurred at the beginning of
1995, after giving effect to certain pro forma adjustments including the
realignment of the Company's indebtedness, the issuance of the Series A
Preferred Stock, the removal of the results of the Company's exploration and
production business, and other adjustments based on the purchase price
allocation related to the acquisition, together with estimates of the related
income tax effects.

PRO FORMA INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------
(IN MILLIONS) 1996 1995
------------- ------ ------
<S> <C> <C>
Operating revenues.......................................... $2,620 $1,874
Income before extraordinary loss............................ 113 99
</TABLE>

The summarized pro forma information has been prepared for comparative
purposes only. It is not necessarily indicative of the actual operating results
that would have occurred had the Merger and related transactions been
consummated at the beginning of 1995, or the results that may be attained in the
future.

Basis of Presentation

Although the separation of the Industrial Business and Shipbuilding
Business from Old Tenneco prior to the Merger was structured as a "spin-off" of
New Tenneco and Newport News for legal, tax and other reasons, New Tenneco
succeeded to certain important aspects of the Old Tenneco business, organization
and affairs, namely: (i) New Tenneco was renamed "Tenneco Inc." subsequent to
the consummation of the Merger; (ii) New Tenneco is headquartered at Old
Tenneco's former headquarters in Greenwich, Connecticut; (iii) New Tenneco's
Board of Directors consists of those persons previously constituting the Old
Tenneco Board of Directors prior to the Merger; (iv) New Tenneco's executive
management consists substantially of

27
<PAGE> 31

the Old Tenneco executive management prior to the Merger; and (v) the businesses
conducted by New Tenneco consist largely of the Industrial Business, which
represented over half of the assets, revenues and operating income of the
businesses, operations and companies constituting Old Tenneco and its
subsidiaries prior to the Merger and Distributions. In New Tenneco's Annual
Report on Form 10-K for the year ended December 31, 1996, New Tenneco has
reflected in its financial statements the historical results of operations and
financial position of the Company and the Shipbuilding Business as discontinued
operations.

Consequently, the Company has restated its historical financial statements
for periods prior to
December 31, 1996 to reflect the combined financial position, results of
operations and cash flows of the Energy Businesses of EPTPC. Additionally,
certain reclassifications have been made to the prior year financial statements
to conform to current year presentation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Control and Consolidation

As a result of the Merger, EPG owns 100 percent of the common equity of
EPTPC, representing at the effective time of the Merger approximately 75 percent
of the equity value of EPTPC; the balance of the equity value of EPTPC is held
by the holders of the Series A Preferred Stock that was issued in a registered
public offering in November 1996 and remains outstanding.

Investments in 20 percent to 50 percent owned companies where the Company
has the ability to exert significant influence over operating and financial
policies are accounted for by the equity method. Reference is made to Note 12,
"Investment in Affiliated Companies," for information concerning significant
equity method investments.

All significant transactions and balances among combined and consolidated
businesses have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses and disclosure of contingent assets and liabilities at the date of
the financial statements. Actual results could differ from those estimates.

Accounting for Regulated Operations

The Company's businesses that are subject to the regulations and accounting
requirements of FERC continue to meet the accounting requirements of SFAS No.
71, Accounting for the Effects of Certain Types of Regulation, which accounting
methods may differ from those used by non-regulated entities. Transactions that
have been recorded differently as a result of regulatory accounting requirements
include: transition costs to be recovered under volumetric surcharges; certain
benefits and other costs and taxes included in or expected to be included in
future rates, including costs to refinance debt. When the accounting method
followed is prescribed by or allowed by the regulatory authority for rate-making
purposes, such accounting conforms to the generally accepted accounting
principle of matching costs against the revenues to which they apply.

Changes in the regulatory and economic environment may, at some point in
the future, create circumstances in which the application of regulatory
accounting principles will no longer be appropriate. If these accounting
principles should no longer be applied, an amount would be charged to earnings
as an extraordinary item. At December 31, 1996, this amount, after consideration
of purchase accounting adjustments, was estimated to be approximately $59
million, net of income taxes. Any potential charge would be non-cash and would
have no direct effect on the regulated companies' ability to seek recovery of
the underlying deferred costs in their future rate proceedings or on their
ability to include such costs in the rates set thereby.

28
<PAGE> 32

Cash and Temporary Cash Investments

Short-term investments purchased with an original maturity of three months
or less are considered cash equivalents.

Allowance for Doubtful Accounts and Notes

The Company has established a provision for losses on accounts and notes
receivable, as well as gas imbalances due from shippers and operators, which may
become uncollectible. Collectibility is reviewed regularly, and the allowance
for bad debts is adjusted as necessary primarily under the specific
identification method. The balances of this provision at December 31, 1996 and
1995 were $45 million and $49 million, respectively.

Gas Imbalances

The Company values gas imbalances due to or due from shippers and operators
at the appropriate index price. The gas imbalances are either settled in cash or
made up in-kind.

Inventory

Inventories, consisting of materials and supplies and gas in storage, are
valued at the lower of cost, determined using the average cost method, or
market, as adjusted at December 31, 1996 for purchase accounting considerations
as discussed in Note 1, "Merger and Distributions."

Property, Plant and Equipment

Property, plant and equipment is recorded at cost, adjusted at December 31,
1996 to reflect the allocation of the excess purchase price as discussed in Note
1, "Merger and Distributions." Included in the Company's property, plant, and
equipment is construction work in progress of approximately $110 million and
$223 million at December 31, 1996, and 1995, respectively. An allowance for both
debt and equity funds used during construction is included in the cost of the
Company's property, plant, and equipment.

Depreciation of the Company's regulated transmission facilities are
provided primarily using the composite method over the estimated useful lives of
the depreciable facilities. The rates for depreciation range from approximately
2 percent to 5 percent.

Depreciation of the Company's nonregulated properties is provided using the
straight line or composite method which, in the opinion of management, is
adequate to allocate the cost of properties over their estimated useful lives.

Costs of regulated properties that are not operating units, as defined by
FERC, which are retired, sold, or abandoned are charged or credited, net of
salvage, to accumulated depreciation and amortization. Gains or losses on sales
of operating units are credited or charged to income.

The Company evaluates impairment of its property, plant, and equipment in
accordance with SFAS No. 121.

Goodwill

Goodwill resulting from acquisitions was being amortized over 20 to 40
years using the straight-line method. Such amortization amounted to $1.6 million
in 1996 and $1.8 million for 1995 and 1994, respectively. Accumulated
amortization of goodwill was $5.4 million at December 31, 1995. The pre-Merger
balance of unamortized goodwill was eliminated as part of the purchase
accounting adjustments discussed in Note 1, "Merger and Distributions."

29
<PAGE> 33

Environmental Costs

Expenditures for ongoing compliance with environmental regulations that
relate to current operations are expensed or capitalized as appropriate.
Expenditures that relate to an existing condition caused by past operations, and
which do not contribute to current or future revenue generation, are expensed.
Liabilities are recorded when environmental assessments indicate that remedial
efforts are probable and the costs can be reasonably estimated. Estimates of the
liability are based upon currently available facts, existing technology and
presently enacted laws and regulations taking into consideration the likely
effects of inflation and other societal and economic factors. All available
evidence is considered including prior experience in remediation of contaminated
sites, other companies' clean-up experience and data released by the EPA or
other organizations. These estimated liabilities are subject to revision in
future periods based on actual costs or new circumstances. These liabilities are
included in the accompanying balance sheets at their undiscounted amounts, as
adjusted through purchase accounting at December 31, 1996. Reference is made to
Note 1, "Merger and Distributions." Recoveries are evaluated separately from the
liability and, when recovery is assured, are recorded and reported separately
from the associated liability in the consolidated and combined financial
statements as a regulatory asset.

Other Income

Gains or losses on the sale by a subsidiary of its stock are included in
the accompanying combined statements of income when recognized.

Financial Instruments With Off-Balance-Sheet Risk

The Company is a party to financial instruments with off-balance-sheet risk
in the normal course of business to reduce its exposure to fluctuations in
interest rates and the price of certain energy and power commodities. These
financial instruments include interest rate swaps, price swap agreements,
futures, and options.

Price risks management activities consist of transactions entered into by
the Company to hedge the impact of market fluctuations on assets, liabilities,
production or other contractual commitments. Changes in the market value of
these transactions are deferred until the gains or losses on the hedged item are
recognized. See Note 4 for further discussion of the Company's price risk
management activities.

Income Taxes

The Company accounts for income taxes whereby it recognizes deferred tax
assets and liabilities for the future tax consequences of temporary differences
between the tax basis of assets and liabilities and their reported amounts in
the consolidated and combined financial statements. Deferred tax assets are
reduced by a valuation allowance when, based upon management's estimates, it is
more likely than not that a portion of the deferred tax assets will not be
realized in a future period. The estimates utilized in the recognition of
deferred tax assets are subject to revision in future periods based on new facts
or circumstances.

Old Tenneco, together with certain of its subsidiaries which were owned 80
percent or more, including subsidiaries in the Industrial Business (now held by
New Tenneco) and the Shipbuilding Business (now held by Newport News), had
entered into an agreement to file a consolidated U.S. federal income tax return.
Such agreement provided, among other things, that (i) each company in a taxable
income position would be currently charged with an amount equivalent to its
federal income tax computed on a separate return basis, and (ii) each company in
a tax loss position would be reimbursed currently to the extent its deductions,
including general business credits, were utilized in the consolidated return.
Management believes that income tax amounts reflected in the combined financial
statements of the Company prior to the Merger under the provisions of the tax
sharing arrangement would not be materially different from the income taxes
which would have been provided had the Company filed a separate consolidated tax
return. Under the tax sharing agreement, Old Tenneco paid all federal taxes
directly and billed or refunded, as applicable, its subsidiaries for the
applicable portion of the total tax payments. This tax sharing agreement remains
in effect among EPTPC

30
<PAGE> 34

and certain of its subsidiaries which are owned 80 percent or more. EPTPC will
continue to file a separate consolidated U.S. federal income tax return
subsequent to the Merger.

As a result of the Merger, the Company entered into a new tax sharing
agreement with Newport News, New Tenneco and EPG. This new tax sharing agreement
provides, among other things, for the allocation among the parties of tax assets
and liabilities arising prior to, as a result of, and subsequent to the
Distributions. Generally, EPTPC will be liable for taxes imposed on the Company.
In the case of federal income taxes imposed with respect to periods prior to the
consummation of the Distributions on the combined activities of Old Tenneco and
other members of its consolidated group prior to giving effect to the
Distributions, New Tenneco and Newport News will be liable to the Company for
federal income taxes attributable to their activities, and each will be
allocated an agreed-upon share of estimated tax payments made by Old Tenneco.
Pursuant to the new tax sharing agreement, the Company will pay New Tenneco for
the tax benefits realized from the deduction of taxable losses generated by a
debt realignment completed prior to the Merger and such amount has been accrued
in the accompanying consolidated balance sheet.

Recent Pronouncements

In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of, which establishes new accounting standards for the
impairment of long-lived assets and for long-lived assets to be disposed of. The
Company adopted the new standard in the first quarter of 1996 with no material
effect on the Company's financial position or results of operations.

In June 1996, the Financial Accounting Standards Board issued SFAS No. 125,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities, which establishes new accounting and reporting standards for
transfers and servicing of financial assets and extinguishment of liabilities.
The statement is effective for transactions occurring after December 31, 1996,
but in December 1996, the Financial Accounting Standards Board issued SFAS No.
127, Deferral of the Effective Date of Certain Provisions of FASB Statement No.
125, which defers the implementation of certain provisions of SFAS No. 125 until
January 1998. The new pronouncements are not expected to have a material impact
on the Company's financial position or results of operations.

In October 1996, the American Institute of Certified Public Accountants
issued Statement of Position No. 96-1, "Environmental Remediation Liabilities,"
which establishes new accounting and reporting standards for the recognition and
disclosure of environmental remediation liabilities. The provisions of the
statement are effective for fiscal years beginning after December 15, 1996. This
pronouncement is not expected to have a material impact on the Company's
financial position or results of operations.

In March 1997, SFAS No. 128, Earnings Per Share, and SFAS No. 129,
Disclosures of Information about Capital Structure, were issued. The Company is
currently evaluating the impact of these pronouncements.

3. LONG-TERM DEBT AND OTHER FINANCING

In contemplation of the Merger and Distributions, Old Tenneco initiated a
Debt Realignment to restructure, realign, and divide the Company's indebtedness.
As part of this Debt Realignment, Old Tenneco completed certain cash tender
offers for approximately $1.5 billion aggregate principal amount of the
Company's outstanding notes and debentures. In addition, approximately $1.9
billion aggregate principal amount of Old Tenneco notes and debentures were
exchanged into notes and debentures of New Tenneco. Certain other components of
the Company's historical short-term and long-term debt were defeased, redeemed
or otherwise retired in the Debt Realignment. The cash funding requirements of
the Debt Realignment were financed with internally generated cash, new
borrowings under the Credit Facility, cash contributions from New Tenneco and
Newport News, and proceeds from the issuance of the Series A Preferred Stock.
All obligations relating to the Series A Preferred Stock, all borrowings under
the Credit Facility, and the other remaining debt of the Company, including debt
which was not tendered or exchanged in the Debt Realignment, has been retained
by the Company subsequent to the Merger. Restrictive covenants

31
<PAGE> 35

on the Company's remaining debt which was subject to the Debt Realignment were
eliminated as a part of the Debt Realignment transactions. The Company
recognized an after-tax extraordinary charge of $234 million (net of $126
million income tax benefit) related to the Company's debt realignment
immediately prior to the Merger.

Subsequent to the Merger, the majority of the Company's debt consists of
borrowings under the Credit Facility and the notes and debentures that were not
tendered or exchanged pursuant to the Debt Realignment. The long-term and
short-term debt amounts at December 31, 1995, presented in the accompanying
balance sheet represent the historical indebtedness of the Company, the majority
of which was subject to the debt realignment, and includes a reduction for the
amount of corporate debt allocated to the Industrial Business and the
Shipbuilding Business. See Note 15 for information concerning debt allocated to
the Industrial Business and the Shipbuilding Business. The long-term debt
amounts at December 31, 1996 have been adjusted to fair market value in the
application of purchase accounting, as discussed in Note 1, "Merger and
Distributions."

Long-term debt outstanding at December 31, 1996 and 1995, consisted of the
following:

<TABLE>
<CAPTION>
1996 1995
----------------- ----------------
POST-ACQUISITION PRE-ACQUISITION
(IN MILLIONS) CONSOLIDATED COMBINED
<S> <C> <C>
EPTPC --
Credit Facility borrowings, effective
interest rate 6.78% in 1996......... $1,600 $ --
Debentures due 2008 through 2025,
average effective interest rate 8.9%
in 1996 and 8.7% in 1995 (including
$4 million in 1996 of unamortized
premium and $2 million in 1995 of
unamortized discount)............... 55 698
Notes due 1998 through 2005, average
effective interest rate 9.6% in 1996
and 8.8% in 1995 (including $7
million in 1996 of unamortized
premium and $5 million in 1995 of
unamortized discount)............... 90 1,962
TGP --
Debentures due 2011, effective
interest rate 15.1% in 1996 and 1995
(net of $11 million in 1996 and $216
million in 1995 of unamortized
discount)........................... 73 184
Notes average effective interest rate
9.7% in 1995 (including $5 million
in 1995 of unamortized discount).... -- 570
El Paso Energy Credit Corporation --
Senior notes due 1997 through 2001,
average effective interest rate 9.9%
in 1996 and 9.7% in 1995 (including
$3 million in 1996 of unamortized
premium and $1 million in 1995 of
unamortized discount)............... 30 549
Medium-term notes average effective
interest rate 9.0% in 1995.......... -- 38
Subordinated notes due 1998, average
effective interest rate 9.9% in 1996
and in 1995......................... 7 92
Other Subsidiaries --
Notes due 1997 through 2014, average
effective interest rate 7.6% in 1996
and 8.6% in 1995 (including $14
million in 1995 of unamortized
discount)........................... 10 11
------- -------
1,865 4,104
Less -- current maturities.......... 715 414
------- -------
Total long-term debt....... $1,150 $3,690
======= =======
</TABLE>

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

Note: The average effective interest rates disclosed above could change in the
future based on changes in market rates on variable-rate debt and the
application of purchase accounting adjustments.

32
<PAGE> 36

The following are aggregate maturities of long-term debt for the next five
years and in total thereafter:

<TABLE>
<S> <C>
1997.................................... $ 715
1998.................................... 47
1999.................................... 3
2000.................................... 7
2001.................................... 46
Thereafter.............................. 1,047
------
Total long-term debt,
including current
maturities.................. $1,865
======
</TABLE>

In November 1996, Old Tenneco established with a group of banks a 364-day
revolving credit and competitive advance facility (previously defined as the
"Credit Facility") with an initial termination date in November 1997.
Outstanding borrowings under the Credit Facility which are unpaid at the initial
termination date become due by the second anniversary following that date. Under
the Credit Facility, the banks initially agreed to make up to $3 billion of
credit available to EPTPC, which amount had been reduced by EPTPC to $2 billion
at December 31, 1996. At such date approximately $1.6 billion in borrowings and
$400 million in unused loan commitments remained outstanding under the Credit
Facility. Borrowings under the Credit Facility are guaranteed by EPG, and EPTPC
is required to pay commitment fees on the unused loan commitments under the
Credit Facility. In March 1997, TGP issued $900 million of long-term debt, with
interest rates ranging from 7 percent to 7 5/8 percent and maturities ranging
from 20 to 40 years. The proceeds of this borrowing were be used to pay down
borrowings under the Credit Facility. Due to the refinancing of the Credit
Facility borrowings with long-term debt of TGP, the Company has classified $900
million of borrowings at December 31, 1996 under that facility as long-term
debt.

Long-Term Corporate Debt Allocation

<TABLE>
<CAPTION>
1995
(IN MILLIONS) ---------------
PRE-ACQUISITION
COMBINED
<S> <C>
Total Long-term debt........................................ $ 3,690
Less: Long-term debt allocated to the Industrial Business
and the Shipbuilding Business......................... (1,879)
-------
Total long-term debt, net of allocation to the
Industrial Business and the Shipbuilding
Business........................................ $ 1,811
=======
</TABLE>

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

Note: Reference is made to Note 15 for information concerning corporate debt
allocated to the Industrial Business and the Shipbuilding Business.

Short-Term Corporate Debt

The Company has historically used commercial paper, lines of credit and
overnight borrowings to finance its short-term capital requirements. Information
regarding short-term debt for the year ended December 31, 1995 follows:

<TABLE>
<CAPTION>
1995
------------------------
COMMERCIAL CREDIT
PAPER AGREEMENTS*
---------- -----------
(IN MILLIONS) PRE-ACQUISITION COMBINED
<S> <C> <C>
Outstanding borrowings at end of year....................... $346 $ 85
Weighted average interest rate on outstanding borrowings at
end of year............................................... 6.2% 7.2%
</TABLE>

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

* Includes borrowings under both committed credit facilities and uncommitted
lines of credit and similar arrangements.

33
<PAGE> 37

The Company had no other short-term borrowings outstanding at December 31,
1996, and had short-term borrowings of $24 million outstanding at December 31,
1995.

Short-Term Corporate Debt Allocation

<TABLE>
<CAPTION>
1995
---------------
PRE-ACQUISITION
(IN MILLIONS) COMBINED
<S> <C>
Current maturities on long-term debt........................ $ 414
Commercial paper............................................ 346
Credit agreements........................................... 85
Other....................................................... 24
-----
Total short-term debt (including current
maturities on long-term corporate debt)......... 869
Less: Short-term debt allocated to the Industrial
Business and the Shipbuilding Business.......... (413)
-----
Total short-term debt, net of allocation to
the Industrial Business and the Shipbuilding
Business..................................... $ 456
=====
</TABLE>

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

Note: Reference is made to Note 15 for information concerning corporate debt
allocated to the Industrial Business and the Shipbuilding Business.

4. FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

The following disclosure of the estimated fair value of financial
instruments is presented in accordance with the requirements of SFAS No. 107.
The estimated fair value amounts have been determined by the Company using
available market information and valuation methodologies.

As of December 31, 1996, and 1995, the carrying amounts of certain
financial instruments employed by the Company, including cash, temporary cash
investments, short-term borrowings and investments, and trade receivables and
payables are representative of fair value because of the short-term maturity of
these instruments. The fair value of the long-term debt has been estimated based
on quoted market prices for the same or similar issues. The fair value of all
derivative financial instruments is the estimated amount at which management
believes they could be liquidated over a reasonable period of time, based on
quoted market prices, current market conditions, or other estimates obtained
from third-party dealers.

At December 31, 1996, the Company's aggregate customer and long-term
receivables balance was concentrated within the energy industry. Consequently,
the Company's credit risk could be effected by changes in the condition of the
energy industry. At December 31, 1995, the Company's aggregate customer and
long-term receivable balance was concentrated by industry as follows: energy
industry 22 percent; automotive parts industry 9 percent; packaging industry 8
percent; and farm and construction equipment industries 52 percent; all other
amounts were not significant. Receivables in the automotive parts, packaging and
farm and construction equipment industries resulted from Tenneco Credit
Corporation's (renamed El Paso Energy Credit Corporation) financing of
receivables of current and former operating divisions of Old Tenneco. See Note
15 for a further discussion.

34
<PAGE> 38

The carrying and estimated fair values of the Company's financial
instruments by class at December 31, 1996 and 1995, were as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------
1996 1995
------------------ ------------------
CARRYING FAIR CARRYING FAIR
ASSETS (LIABILITIES) AMOUNT VALUE AMOUNT VALUE
-------------------- -------- ------- -------- -------
POST-ACQUISITION PRE-ACQUISITION
(IN MILLIONS) CONSOLIDATED COMBINED
<S> <C> <C> <C> <C>
Balance Sheet Financial Instruments:
Long-term debt (including current maturities)......... $(1,865) $(1,865) $(4,104) $(4,692)
Instruments With Off-Balance-Sheet Risk:
Derivative
Interest rate swaps:
In a net receivable position..................... -- -- -- 10
In a net payable position........................ -- -- -- (22)
Natural gas swaps, futures and options............. -- (3) -- 3
Non-derivative
Financial guarantees............................... -- (3) -- (14)
</TABLE>

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

Note: The carrying amount and estimated fair value of long-term debt for 1995 is
before allocation of corporate debt to the Industrial Business and
Shipbuilding Business. Reference is made to Note 15 for information
concerning corporate debt allocated to the Industrial Business and
Shipbuilding Business.

Instruments With Off-Balance-Sheet Risk

Derivative

Interest Rate Swaps -- The fair value of interest rate swaps was based on
the cost that would have been incurred to buy out those swaps in a loss position
and the consideration that would have been received to terminate those swaps in
a gain position. At December 31, 1996 all outstanding interest rate swaps had
fully matured. At December 31, 1995, the Company was a party to swaps with a
notional value of $1.5 billion, $750 million of which were in a net receivable
position and $795 million of which were in a net payable position. Notional
amounts associated with these swaps do not represent future cash payment
requirements. These contractual amounts are only used as a base to measure
amounts to be exchanged at specified settlement dates. The counterparties to
these interest rate swaps were major international financial institutions. The
risk associated with counterparty default on interest rate swaps were measured
as the cost of replacing, at the prevailing market rates, those contracts in a
gain position.

Price Risk Management -- The Company uses exchange-traded futures and
option contracts and over-the-counter option and swap contracts to reduce its
exposure to fluctuations in the prices of natural gas. The fair value of these
contracts is based upon the estimated consideration that would be received to
terminate those contracts in a gain position and the estimated cost that would
be incurred to terminate those contracts in a loss position. As of December 31,
1996 and 1995, these contracts, maturing through 2000 and 1997, respectively,
had an absolute notional contract quantity of 237 Bcf and 321 Bcf, respectively.
Since the contracts described above are designated as hedges whose fair values
correlate to price movements of natural gas, any gains or losses on the
contracts resulting from market changes will be offset by losses or gains on the
hedged transactions. The Company has off-balance sheet risk of credit loss in
the event of non-performance by counterparties to all over-the-counter
contracts. However, the Company does not anticipate non-performance by the
counterparties.

35
<PAGE> 39

Non-derivative

Guarantees -- At December 31, 1996 and 1995, the Company had guaranteed
payment and performance of approximately $3 million and $14 million,
respectively, primarily with respect to letters of credit and other guarantees
supporting various financing and operating activities.

5. COMMITMENTS AND CONTINGENCIES

Rates and Regulatory Matters

In 1992, FERC issued Order No. 636 which restructured the natural gas
industry by requiring mandatory "unbundling" of pipeline sales and
transportation services. Numerous parties appealed to the Court of Appeals,
challenging the legality of Order No. 636 generally, as well as the legality of
specific provisions of Order No. 636. In July 1996, the Court of Appeals issued
its decision upholding, in large part, Order No. 636, and remanded to FERC
several issues for further explanation, including further explanation of FERC's
decision to allow pipelines to recover 100 percent of their GSR costs and FERC's
requirement that pipelines allocate 10 percent of GSR costs to interruptible
transportation customers. In February 1997, FERC reaffirmed its decision to
allow pipelines to recover 100 percent of GSR costs. In addition, FERC modified
the requirement that pipelines allocate 10 percent of GSR costs to interruptible
customers to permit pipelines to propose an allocation of any percentage of such
costs to their interruptible customers.

TGP implemented revisions to its tariff, which restructured its
transportation, storage and sales services to convert TGP from primarily a
merchant to primarily a transporter of gas as required by Order No. 636. As a
result of this restructuring, TGP's gas sales declined while certain obligations
to producers under long-term gas supply contracts continued, causing TGP to
incur significant restructuring transition costs. Pursuant to the provisions of
Order No. 636 allowing for the recovery of transition costs related to the
restructuring, TGP has made filings to recover the following transition costs:
(i) costs related to its Bastian Bay facilities; (ii) the "stranded" costs of
TGP's continuing contractual obligations to pay for capacity on other pipeline
systems ("TBO costs"); (iii) GSR costs resulting from TGP's remaining gas
purchase obligations (collectively referred to as "Transition Costs"); and (iv)
the remaining unrecovered balance of purchased gas ("PGA") costs. The filings
implementing TGP's recovery mechanisms for these transition costs were accepted
by FERC effective September 1, 1993, subject to refund and pending FERC review
and approval for eligibility and prudence.

TGP's filings to recover costs related to its Bastian Bay facilities have
been rejected by FERC based on the continued use of the gas production from the
field; however, FERC recognized the ability of TGP to file for the recovery of
any losses upon disposition of these assets. TGP has filed for appellate review
of FERC actions and is confident that the Bastian Bay costs will ultimately be
recovered; FERC has not contested the ultimate recoverability of these costs.

TGP is recovering through a surcharge, subject to refund, TBO costs
formerly incurred to perform its sales function. FERC issued an order requiring
TGP to refund certain of these costs and refunds were made in May 1996. TGP is
appealing this decision and believes such appeal will likely be successful.

On February 28, 1997, TGP filed with FERC a proposed settlement of all
issues related to the recovery by TGP of its Transition Costs and related
proceedings, as discussed above. Upon final approval by FERC, this settlement
will become effective retroactive to January 1, 1997. The settlement is based
upon the preliminary GSR understanding, which called for sharing of transition
costs, that EPG reached with TGP's

36
<PAGE> 40

customers in October 1996 in anticipation of the Merger. The GSR Stipulation and
Agreement allows for TGP to recover up to $770 million in Transition Costs,
including interest, of which approximately $531 million has previously been
recovered, subject to refund, pending resolution of the Transition Costs issues.
Assuming FERC approves the GSR Stipulation and Agreement, TGP will be entitled
to recover additional Transition Costs, up to the remaining $239 million,
through a two-year demand transportation surcharge and an interruptible
transportation surcharge. The terms of the GSR Stipulation and Agreement provide
for a rate case moratorium through November 2000 (subject to certain limited
exceptions) and provide a rate cap, indexed to inflation, through October 31,
2005, for certain of TGP's customers. The purchase accounting adjustments
reflected in the Company's consolidated financial statements assume approval of
the settlement with respect to TGP's Transition Costs in accordance with the
terms of the GSR Stipulation and Agreement.

Although parties to TGP's Transition Cost proceedings do not have to
declare their support or opposition to the GSR Stipulation and Agreement until
mid-March, management believes that all of TGP's customers will support or not
oppose the GSR Stipulation and Agreement.

Following negotiations with its customers, TGP filed in July 1994 with FERC
a Stipulation and Agreement (the "PGA Stipulation"), which provides for the
recovery of PGA costs of approximately $100 million and the recovery of costs
associated with the transfer of storage gas inventory to new storage customers
in TGP's restructuring proceeding. The PGA Stipulation eliminates all challenges
to the PGA costs, but establishes a cap on the charges that may be imposed upon
former sales customers. In April 1995, FERC orders approving the PGA Stipulation
and resolving all outstanding issues became final. TGP implemented the terms of
the PGA Stipulation and made refunds in May 1995. The refunds had no material
effect on the Company's reported net income. The orders approving the PGA
Stipulation have been appealed to the Court of Appeals by certain customers. TGP
believes the FERC orders approving the PGA Stipulation will be upheld on appeal.

In December 1994, TGP filed the 1995 Rate Case. In January 1995, FERC
accepted the filing, suspended its effectiveness for the maximum period of five
months pursuant to normal regulatory process, and set the matter for hearing. On
July 1, 1995, TGP began collecting rates, subject to refund, reflecting an $87
million increase in TGP's annual revenue requirement. A Stipulation was filed
with an ALJ in this proceeding in April 1996. This Stipulation resolves the
rates that are the subject of the 1995 Rate Case, including a structural rate
design change that results in a larger proportion of TGP's transportation
revenues being dependent upon throughput. Under the Stipulation, TGP is required
to refund, upon final approval of the Stipulation, the difference between the
revenues collected under the July 1, 1995 motion rates and the revenues that
would have been collected pursuant to the rates underlying the Stipulation. In
October 1996, FERC approved the Stipulation with certain modifications and
clarifications which are not material. In January 1997, FERC issued an order
denying request for rehearing of the October 1996 order. Refunds will be made in
March 1997. The Company has established a provision for these refunds, and the
balance of this

37
<PAGE> 41

provision at December 31, 1996 was $167 million. One party to the rate
proceeding, a competitor of TGP, filed with the Court of Appeals a Petition for
Review of the FERC orders approving the Stipulation.

Environmental Matters

As of December 31, 1996, the Company had a reserve of approximately $187
million to cover environmental assessments and remediation activities as
discussed below. The reserve for such issues at December 31, 1996 has been
adjusted to reflect the purchase price allocation discussed in Note 1,
"Merger and Distributions."

Since 1988, TGP has been engaged in an internal project to identify and
deal with the presence of PCBs and other substances of concern, including
substances on the EPA List of Hazardous Substances at compressor stations and
other facilities operated by both its interstate and intrastate natural gas
pipeline systems. While conducting this project, TGP has been in frequent
contact with federal and state regulatory agencies, both through informal
negotiation and formal entry of consent orders, in order to assure that its
efforts meet regulatory requirements.

Due to the current uncertainty regarding the further activity necessary for
TGP to address the presence of PCBs, substances on the EPA List of Hazardous
Substances and other substances of concern on its sites, including the
requirements for additional site characterization, the actual amount of such
substances at the sites, and the final, site-specific cleanup decisions to be
made with respect to cleanup levels and remediation technologies, the Company
cannot at this time accurately project what additional costs, if any, may arise
from future characterization and remediation activities. While there are still
many uncertainties relating to the ultimate costs which may be incurred, based
upon the Company's evaluation and experience to date, the Company believes that
the recorded estimate for the reserve is adequate.

Following negotiations with its customers, TGP in May 1995 filed with FERC
a separate Stipulation and Agreement (the "Environmental Stipulation") that
establishes a mechanism for recovering a substantial portion of the
environmental costs. In November 1995, FERC issued an order approving the
Environmental Stipulation. Although one shipper filed for rehearing, FERC denied
rehearing of its order in February 1996. This shipper filed a Petition for
Review in April 1996 in the Court of Appeals; TGP believes the FERC order
approving the Environmental Stipulation will be upheld on appeal. The
Environmental Stipulation, which was effective July 1, 1995, had no material
effect on the Company's financial position or results of operations. As of
December 31, 1996, the balance of the regulatory asset was $49 million.

TGP has completed settlements with and has received payments from the
majority of its liability insurance policy carriers for remediation costs and
related claims. TGP believes that additional recoveries from the remaining
carriers in the pending litigation against such carriers are reasonably
possible. In addition, TGP has settled its pending litigation against and
received payment from the manufacturer of the
PCB-containing lubricant previously used in the starting air systems in a
portion of TGP's pipeline. TGP has reduced the amount it is seeking to recover
under the Environmental Stipulation by the amount it has received in these
proceedings.

The Company and certain of its subsidiaries have been designated, have
received notice that they could be designated, or have been asked for
information to determine whether they could be designated as a PRP with respect
to 25 sites under the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA or Superfund) or state equivalents. The Company has sought
to resolve its liability as a PRP with respect to these Superfund sites through
indemnification by third parties and/or settlements which provide for payment of
the Company's allocable share of remediation costs. Because the clean-up costs
are estimates and are subject to revision as more information becomes available
about the extent of remediation required, the

38
<PAGE> 42

Company's estimate of its share of remediation costs could change. Moreover,
liability under the federal Superfund statute is joint and several, meaning that
the Company could be required to pay in excess of its pro rata share of
remediation costs. The Company's understanding of the financial strength of
other PRPs has been considered, where appropriate, in its determination of its
estimated liability as described herein. The Company presently believes that the
costs associated with the current status of such entities as PRPs at the
Superfund sites referenced above will not have a materially adverse effect on
the financial position or results of operations of the Company.

In addition, the Company has identified a number of formerly owned or
leased sites, and certain other sites associated with its discontinued
operations, where environmental remediation may be required. The Company
presently believes that the costs to remediate these sites will not have a
materially adverse effect on its financial position or results of operations.

The Company has identified other sites where environmental remediation may
be required should there be a change in ownership, operations or applicable
regulations. These possibilities cannot be predicted or quantified at this time
and, accordingly, no provision has been recorded. However, provisions have been
made for all instances where it has been determined that the incurrence of any
material remedial expense is probable. The Company believes that the provisions
recorded for environmental exposures are adequate based on current estimates.

Capital Commitments

Purchase Obligations

In connection with the financing commitments of certain joint ventures, the
Company has entered into unconditional purchase obligations for products and
services of $121 million ($94 million on a present value basis) at December 31,
1996. The Company's annual obligations under these agreements are $22 million
for the years 1997 and 1998, $21 million for the years 1999 and 2000, and $11
million for the year 2001. Payments under such obligations, including additional
purchases in excess of contractual obligations, were $25 million, $26 million
and $34 million for the years 1996, 1995 and 1994, respectively. In addition, in
connection with the Great Plains coal gasification project, TGP continues to
have an obligation to purchase 30 percent of a capped volume of the plant output
through July 2009. TGP has executed a settlement of this contract as a part of
its GSR negotiations discussed in "Rates and Regulatory Matters" above and has
established a provision for the estimated costs in excess of market prices which
management believes is adequate.

Legal Proceedings

See Item 3, Legal Proceedings, which is incorporated herein by reference.

6. ACQUISITIONS AND DISPOSITIONS

Acquisitions

During 1995, the Company acquired the natural gas pipeline assets of PASA
which includes a 488-mile pipeline, for approximately $225 million. Also during
1995, the Company acquired a 50 percent interest in two gas-fired cogeneration
plants from ARK Energy, a privately owned power generation company, for
approximately $65 million.

39
<PAGE> 43

In May 1996, the Company acquired a 50 percent ownership interest in a
producing gas field (approximately 500 Bcf) and a 47.5 percent ownership
interest in a 135 MW power generating plant under construction in South
Sulawesi, Indonesia.

In September 1996, the Company reacquired for $41 million the 20 percent
interest in the Company's marketing and intrastate pipeline subsidiary.

Each of the acquisitions discussed above was accounted for as a purchase.
Net income would not have been significantly different from amounts reported if
the acquisitions had occurred at the beginning of each respective year.

Disposition of Assets

In 1994, the Company's marketing and intrastate pipeline subsidiary issued
50 shares of its common stock, diluting Old Tenneco's ownership in this
subsidiary to 80 percent and resulting in a gain of $23 million. No taxes were
provided on the gain because management expected that the recorded investment
would be recovered in a tax-free manner.

In December 1995, the Company sold its 50 percent interest in Kern River
for a pre-tax gain of $30 million. Kern River owns a 904-mile pipeline extending
from Wyoming to California. Also in 1995, the Company sold certain other
facilities and assets for a combined pre-tax loss of $19 million.

During 1996, TGP sold its 13.2 percent interest in Iroquois, its 50 percent
interest in Dauphin Island Gathering System and certain other assets, resulting
in a net pre-tax gain of $35 million.

In December 1996, subsequent to the Merger, the Company sold 70 percent of
its interests in two natural gas pipeline systems in Australia to CNGI Australia
Pty. Limited, a wholly-owned indirect subsidiary of Consolidated Natural Gas
Company, and four Australian investors for approximately $400 million, inclusive
of related debt financing involving these projects, and completed the sale of
its oil and gas exploration, production and financing unit, formerly known as
Tenneco Ventures, in a $105 million transaction. There was no gain or loss
recognized on these transactions due to the Merger and the application of
pushdown accounting to the Company. The net proceeds from these transactions
were utilized to retire outstanding borrowings under the Credit Facility
subsequent to year end.

7. INCOME TAXES

Following is a comparative analysis of the components of pre-acquisition
combined income tax expense (benefit) for the years 1996, 1995 and 1994.

<TABLE>
<CAPTION>
(IN MILLIONS) 1996 1995 1994
------------- ----- ----- -----
-- PRE-ACQUISITION --
COMBINED
<S> <C> <C> <C>
Current --
Federal .................................................. $ 27 $(96) $25
State and local........................................... 54 (3) (4)
---- ---- ---
81 (99) 21
---- ---- ---
Deferred --
Federal .................................................. (25) 76 39
State and local........................................... (22) 12 12
---- ---- ---
(47) 88 51
---- ---- ---
Income tax expense (benefit)................................ $ 34 $(11) $72
==== ==== ===
</TABLE>

40
<PAGE> 44

Following is a reconciliation of income taxes computed at the statutory
U.S. federal income tax rate
(35 percent for all years presented) to the income tax expense (benefit)
reflected in the pre-acquisition combined statements of income for the years
1996, 1995 and 1994:

<TABLE>
<CAPTION>
(IN MILLIONS) 1996 1995 1994
------------- ----- ----- -----
-- PRE-ACQUISITION --
COMBINED
<S> <C> <C> <C>
Tax expense computed at the statutory U.S. federal income
tax rate.................................................. $ 57 $ 51 $ 79
Increases (reductions) in income tax expense resulting from:
State and local taxes on income, net of U.S. federal
income tax benefit..................................... 21 6 5
Permanent differences on sales of assets.................. 8 12 --
Realization of unrecognized deferred tax assets........... (38) (72) --
Net reversal of tax reserves.............................. (4) -- --
Other..................................................... (10) (8) (12)
---- ---- ----
Income tax expense (benefit)................................ $ 34 $(11) $ 72
==== ==== ====
</TABLE>

Current U.S. income tax expense (benefit) for the years ended December 31,
1996, 1995 and 1994, includes a reduction in current tax amounts of $74 million,
$63 million and $42 million, respectively, related to the allocation of
corporate interest expense to the Industrial Business and the Shipbuilding
Business. Reference is made to Note 15 for information concerning corporate debt
and interest allocated to the Industrial Business and the Shipbuilding Business
from the Company.

The components of the Company's net deferred tax liability at December 31,
1996 and 1995, were as follows:

<TABLE>
<CAPTION>
(IN MILLIONS) 1996 1995
------------- ---------------- ---------------
POST-ACQUISITION PRE-ACQUISITION
CONSOLIDATED COMBINED
<S> <C> <C>
Deferred tax assets --
U.S. capital loss carryforwards....................... $ -- $ 163
Postretirement benefits other than pensions........... 124 104
Regulatory Issues..................................... 235 141
Environmental reserve................................. 71 75
Other................................................. 202 76
Valuation allowance................................... -- (117)
------- -----
Net deferred tax asset................................ 632 442
------- -----
Deferred tax liabilities --
Tax over book depreciation............................ 1,001 440
Regulatory Issues..................................... 158 208
Debt related items.................................... 2 43
Book versus tax gains and losses on asset disposals... 39 23
Other................................................. 134 116
------- -----
Total deferred tax liability.......................... 1,334 830
------- -----
Net deferred tax liability.............................. $ 702 $ 388
======= =====
</TABLE>

As reflected by the valuation allowance in the table above, the Company had
potential tax benefits of $117 million at December 31, 1995, which were not
recognized in the combined statements of income when generated. These benefits
resulted primarily from U.S. capital loss carryforwards which were available to
offset future capital gains. During 1996, these capital loss carryforwards were
utilized to offset taxes on capital gain transactions of the Company and certain
Old Tenneco affiliates. The table above reflects the deferred tax effects of the
purchase price allocation at December 31, 1996, as discussed in Note 1, "Merger
and Distributions."

41
<PAGE> 45

8. EMPLOYEE BENEFITS

Postretirement Benefits

As part of the Distributions and Merger, the Company assumed responsibility
for certain benefits for former employees of Old Tenneco and the postretirement
health care plans for the Company's employees were significantly changed. The
Company will be responsible for benefits for both the Company's former employees
and former employees of operations previously disposed of by Old Tenneco.
Employees who retire before July 1, 1997 will receive the same benefits as
former employees. While employees who retire on or after July 1, 1997 will
continue to receive $10,000 of postretirement life insurance, they will not
receive any employer subsidized postretirement health care benefits. All of
these benefits may be subject to deductibles, co-payment provisions and other
limitations. The Company has reserved the right to change these benefits.

The majority of the Company's postretirement benefit plans are not funded.
In June 1994, two trusts were established to fund postretirement benefits for
certain plan participants of TGP. The contributions are collected from customers
in FERC approved rates. As of December 31, 1996, cumulative contributions were
$16 million. Plan assets consist principally of fixed income securities.

The funded status of the postretirement benefit plans reconciles with
amounts recognized on the consolidated and combined balance sheets at December
31, 1996 and 1995, as follows:

<TABLE>
<CAPTION>
1996 1995
POST-ACQUISITION PRE-ACQUISITION
(IN MILLIONS) CONSOLIDATED COMBINED
------------- ---------------- ---------------
<S> <C> <C>
Actuarial present value of accumulated postretirement
benefit obligation:
Retirees............................................... $ 339 $ 320
Fully eligible active plan participants................ 13 5
Other active plan participants......................... 1 2
------- -----
Total accumulated postretirement benefit obligation...... 353 327
Plan assets at fair value................................ 4 3
------- -----
Accumulated postretirement benefit obligation in excess
of plan assets......................................... (349) (324)
Claims paid during the fourth quarter.................... -- 14
Unrecognized reduction of prior service obligations
resulting from plan amendments......................... -- (68)
Unrecognized net loss resulting from plan experience and
changes in actuarial assumptions....................... (1) 74
------- -----
Accrued postretirement benefit cost at December 31....... $(350) $(304)
======= =====
</TABLE>

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

Note: The accrued postretirement benefit cost has been recorded based upon
certain actuarial estimates, which are subject to revision in future
periods given new facts or circumstances, as described below, and reflects
adjustments recorded in purchase accounting at December 31, 1996. For the
1996 period the plan liabilities were estimated as of December 31, 1996
and for the 1995 period the plan liabilities were estimated at September
30, 1995 and rolled forward to December 31, 1995.

In December 1992, FERC issued a statement of policy which allows
jurisdictional pipelines to recognize allowances for prudently incurred costs of
postretirement benefits other than pensions on an accrual basis consistent with
the accounting principles set forth in SFAS No. 106. The Company believes that
all costs of providing postretirement benefits to its employees are necessary
and prudent operating expenses and that such costs are recoverable in rates.
Accordingly, postretirement benefit costs related to FERC regulated operations
have been deferred as a regulatory asset. At December 31, 1996 the balance of
this regulatory asset was $28 million and is being recovered through rates.

42
<PAGE> 46

The net periodic postretirement benefit cost for the years 1996, 1995 and
1994 consists of the following components:

<TABLE>
<CAPTION>
(IN MILLIONS) 1996 1995 1994
------------- -------- -------- --------
-- PRE-ACQUISITION COMBINED --
<S> <C> <C> <C>
Service cost for benefits earned during the year.......... $ 1 $ 1 $ 1
Interest cost on accumulated postretirement benefit
obligation.............................................. 25 26 17
Net amortization of unrecognized amounts.................. (12) (13) (6)
---- ---- ----
Net periodic postretirement benefit cost.................. $ 14 $ 14 $ 12
==== ==== ====
</TABLE>

The initial weighted average assumed health care cost trend rate used in
determining the 1996, 1995 and 1994 accumulated postretirement benefit
obligation was 6 percent, 7 percent and 8 percent, respectively, declining to 5
percent in 1997 and remaining at that level thereafter.

Increasing the assumed health care cost trend rate by one percentage-point
in each year would increase the 1996, 1995 and 1994 accumulated postretirement
benefit obligations by approximately $5 million, $14 million and $14 million,
respectively, and would increase the aggregate of the service cost and interest
cost components of the net postretirement benefit cost for 1996, 1995 and 1994
by approximately $1 million, $1 million and $3 million, respectively.

The discount rates (which are based on long-term market rates) used in
determining the 1996, 1995 and 1994 accumulated postretirement benefit
obligations were 7.75 percent, 7.75 percent and 8.25 percent, respectively.

Pension Plans

In conjunction with the Distributions in December 1996, benefit accruals
for Company employees in the Old Tenneco Retirement Plan (the "TRP") were frozen
as of the last day of December 1996 and all benefits were fully vested. New
Tenneco became the sole sponsor of the TRP such that the Company is not
responsible for any benefits accrued before the last day of December 1996. The
Company employees became participants in the new EPG Cash Balance Pension Plan
("CBP Select") as of January 1, 1997 with no account balances credited for prior
service.

The Company's employees who were age 55 with at least 10 years of service
as of December 31, 1996 are eligible for special benefits under the 1997 Early
Retirement Incentive Program (the "ERIP") under the CBP Select. As a result of
the Merger, certain eligible employees who elected to retire under the ERIP will
receive an enhanced credit under the CBP Select which will be one year of pay
for most employees. The Company has accrued for these enhanced benefits as of
December 31, 1996.

9. PREFERRED STOCK

At December 31, 1996, EPTPC had authorized 20,000,000 shares of preferred
stock. In November 1996, the Company issued 6,000,000 shares of Series A
Preferred Stock. The Series A Preferred Stock is not convertible into shares of
any other class or series of stock of the Company and it has no maturity date.
Holders of shares of Series A Preferred Stock are entitled to receive cash
dividends payable quarterly at the rate of 8 1/4% of the stated value of $50 per
share. It is not redeemable at the option of EPTPC prior to December 31, 2001,
unless one or more amendments to the Internal Revenue Code are enacted that
reduce the percentage of the dividends received deduction as specified in
Section 243(a)(1) of the Internal Revenue Code. On or after December 31, 2001,
the Series A Preferred Stock is redeemable at the option of the Company, in
whole or in part, upon not less than 30 days' notice at a redemption price of
$50 per share, plus unpaid dividends.

In December 1996, the remaining outstanding shares of the $7.40 and $4.50
preferred stock issues of Old Tenneco were exchanged for EPG equity and
cancelled in accordance with the terms of the Merger. The $7.40 and $4.50
preferred stock issues had a mandatory redemption value of $100 per share and
were recorded

43
<PAGE> 47

at their fair value at the date of original issue (an aggregate of $250 million)
with periodic accretions of the excess of the redemption value over the fair
value at the date of issue.

In March 1997, the Company issued 3,036,600 shares of a new series of
preferred stock (the "Series B Preferred Stock"), which is subordinated to the
Series A Preferred Stock, to EPG in exchange for cancellation of indebtedness
owed to EPG of approximately $152 million. EPG is entitled to receive
cash dividends payable annually at the rate of 8 1/2% of the stated value of $50
per share. On or after
December 31, 2001, the Series B Preferred Stock is redeemable at the option of
the Company, in whole or in part, upon not less than 30 days' notice at a
redemption price of $50 per share, plus unpaid dividends.

Changes in Preferred Stock with Mandatory Redemption Provisions

<TABLE>
<CAPTION>
1996 1995 1994
------------------- ------------------ ------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------ --------- ------ --------- ------
(IN MILLIONS EXCEPT SHARE
AMOUNTS) PRE-ACQUISITION COMBINED
<S> <C> <C> <C> <C> <C> <C>
Balance January 1................ 1,390,993 $ 130 1,586,764 $147 1,782,508 $163
Shares redeemed................ (195,751) (20) (195,771) (20) (195,744) (20)
Shares cancelled in the
Merger...................... (1,195,242) (113) -- -- -- --
Accretion of excess of
redemption value over fair
value at date of issue...... -- 3 -- 3 -- 4
---------- ----- --------- ---- --------- ----
Balance December 31.............. -- -- 1,390,993 $130 1,586,764 $147
========== ===== ========= ==== ========= ====
</TABLE>

10. INVENTORIES

Inventories consisted of the following at December 31:

<TABLE>
<CAPTION>
1996 1995
---------------- ----------------
POST-ACQUISITION PRE-ACQUISITION
(IN MILLIONS) CONSOLIDATED COMBINED
<S> <C> <C>
Materials and supplies.............................. $19 $24
Gas in storage...................................... 23 12
--- ---
Total..................................... $42 $36
=== ===
</TABLE>

11. PROPERTY, PLANT, AND EQUIPMENT

Property, plant and equipment consisted of the following at December 31:

<TABLE>
<CAPTION>
1996 1995
---------------- -----------------
POST-ACQUISITION PRE-ACQUISITION
(IN MILLIONS) CONSOLIDATED COMBINED
<S> <C> <C>
Property, plant, and equipment, at cost............... $2,371 $6,272
Less -- accumulated depreciation and depletion........ -- 3,431
------- -------
2,371 2,841
Additional acquisition cost assigned to utility plant,
net of accumulated amortization..................... 1,581 --
------- -------
Total property, plant and equipment, net.... $3,952 $2,841
======= =======
</TABLE>

Current FERC policy does not permit the Company to recover amounts in
excess of original cost allocated in purchase accounting to its regulated
operations through rates.

12. INVESTMENT IN AFFILIATED COMPANIES

The Company holds investments in various affiliates which are accounted for
on the equity method of accounting. The principal equity method investments were
the Company's investments in international

44
<PAGE> 48

pipelines, interstate pipelines, power generation plants, gathering systems and
natural gas storage facilities. These investments were subject to certain
purchase accounting adjustments at December 31, 1996, as discussed in Note 1,
"Merger and Distributions."

At December 31, 1996 and 1995, the Company's consolidated stockholders'
equity and combined equity, respectively, included equity in undistributed
earnings from equity method investments of $12 million and $25 million,
respectively. Dividends and distributions received from affiliates accounted for
on the equity method were $43 million, $53 million and $48 million during 1996,
1995 and 1994, respectively.

At December 31, 1996, the Company's investment in affiliates balance
exceeded the underlying net assets of its investments by $69 million. The excess
is being amortized into income by decreasing equity in net income of affiliated
companies using the straight-line method over the estimated economic useful
life.

Summarized financial information of the Company's proportionate share of 50
percent or less owned companies accounted for by the equity method of accounting
as of December 31, 1996, 1995 and 1994, and for the years then ended is as
follows:

<TABLE>
<CAPTION>
1996 1995 1994
---------------- ---------------- -----
POST-ACQUISITION PRE-ACQUISITION COMBINED
(IN MILLIONS) CONSOLIDATED
<S> <C> <C> <C>
Current assets.................................. $ 46 $ 60 $ 47
Non-current assets.............................. 545 543 901
Short-term debt................................. 18 122 19
Other current liabilities....................... 37 24 61
Long-term debt.................................. 244 152 494
Other non-current liabilities................... 39 25 16
Equity in net assets............................ 253 280 358
Revenues and other income....................... 98 184 183
Costs and expenses.............................. 68 119 132
Net income...................................... 30 65 51
</TABLE>

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

NOTE: Balance sheet amounts related to Kern River are not included in the table
above as of December 31, 1996 and 1995, due to the Company's sale of its
investment in Kern River in December 1995. Reference is made to Note 6 for
information concerning the sale of Kern River.

13. NATURE OF OPERATIONS AND SIGNIFICANT CUSTOMERS

The Company is engaged in the transportation, gathering, processing and
marketing of natural gas. For the year ended December 31, 1996, the Company's
operating revenues were predominately derived from the transportation and
marketing of natural gas. The Company's principal end markets for the
transportation of natural gas are the Northeast and Midwest United States. Prior
to the Merger, Tenneco Credit Corporation (now renamed El Paso Energy Credit
Corporation), a Company subsidiary, was engaged in financing, on a nonrecourse
basis, receivables of other operating divisions of Old Tenneco. El Paso Energy
Credit Corporation continues to sell certain energy receivables in the ordinary
course of its business subsequent to the Merger.

The Company did not have gross revenues from any customer equal to, or in
excess of, 10 percent of the combined operating revenues for the years ended
December 31, 1996, 1995, and 1994.

14. SUPPLEMENTAL CASH FLOW INFORMATION

The following table contains supplemental cash flow information for the
years ended December 31:

<TABLE>
<CAPTION>
1996 1995 1994
----- ------ ------
(IN MILLIONS) PRE-ACQUISITION COMBINED
<S> <C> <C> <C>
Interest.................................................... $491 $ 420 $ 349
Income taxes................................................ 251 (123) (129)
</TABLE>

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

NOTE: Amounts presented represent tax payments made by the Company net of
refunds and tax payments received from Old Tenneco affiliates under the
tax sharing agreement in effect prior to the Merger.

45
<PAGE> 49

15. TRANSACTIONS WITH AFFILIATES

Combined Equity

The "Combined Equity" caption in the accompanying combined financial
statements represents Old Tenneco's cumulative investment in the combined
businesses of the Company prior to the Merger. Changes in the "Combined Equity"
caption represent the net income (loss) of the Company, cash paid for interest
allocated to affiliates, net of tax, changes in corporate debt allocated to
affiliates, contributions from (distributions to) Old Tenneco stockholders, and
net cash and noncash contributions from (distributions to) affiliates. Reference
is made to the statements of changes in consolidated stockholders' equity and
combined equity for an analysis of activity in the "Pre-Acquisition Combined
Equity" caption for each of the three years in the period ended December 31,
1996.

General and Administrative Expenses

Included in the total general and administrative expenses for 1996, 1995
and 1994, is $17 million, $16 million, and $13 million, respectively, which
represents the Company's share of Old Tenneco's corporate general and
administrative costs for legal, financial, communication and other
administrative services. Old Tenneco's corporate general and administrative
expenses have been allocated based on the estimated level of effort devoted to
Old Tenneco's various operations and relative size based on revenues, gross
property and payroll. The Company's management believes the method for
allocating corporate general and administrative expenses is reasonable and that
total general and administrative expenses reflected in the accompanying
pre-acquisition combined statements of income are reasonable when compared with
the total general and administrative costs the Company would have incurred on a
stand-alone basis.

Corporate Debt and Interest Allocations

The Company's historical practice has been to incur indebtedness for its
consolidated group at the parent company level or at a limited number of
subsidiaries rather than at the operating company level, and to centrally manage
various cash functions. Consequently, corporate debt of the Company and its
related interest expense have been allocated to Old Tenneco's automotive,
packaging, and shipbuilding businesses ("Old Tenneco's non-energy operations")
based upon the portion of Old Tenneco's investment in Old Tenneco's non-energy
operations that is deemed to be debt, generally based upon the ratio of Old
Tenneco's non-energy operations' net assets to Old Tenneco's consolidated net
assets plus debt. Interest expense was allocated at a rate equivalent to the
weighted-average cost of all corporate debt, which was 8.2 percent, 7.7 percent
and 8.3 percent for 1996, 1995 and 1994, respectively. Total pre-tax interest
expense allocated to Old Tenneco's non-energy operations in 1996, 1995 and 1994
was $211 million, $180 million and $120 million, respectively. Old Tenneco's
non-energy operations have also been allocated tax benefits totaling
approximately 35 percent of the allocated pre-tax interest expense. Although
interest expense, and the related tax effects, have been allocated to Old
Tenneco's non-energy operations for financial reporting on a historical basis,
Old Tenneco's non-energy operations have not been billed for these amounts. The
changes in allocated corporate debt and the after-tax allocated interest expense
have been included as a component of the Company's combined equity. Although
management believes that the historical allocation of corporate debt and
interest expense is reasonable, it is not necessarily indicative of the debt
currently borrowed by the Company or the debt which the Company may incur in the
future.

Notes and Advances Receivable or Payable with Affiliates

"Cash contributions from (distributions to) affiliates" in the statements
of changes in consolidated stockholders' equity and combined equity consist of
net cash changes in notes and advances receivable or payable between the Company
and the Industrial Business and Shipbuilding Business which have been included
in combined equity. Historically, Old Tenneco has utilized notes and advances to
centrally manage cash funding requirements for its consolidated group.

At December 31, 1995, the Company had an interest-bearing note payable to
the Industrial Business totaling $494 million, which was due on demand and
included as a component of the Company's combined

46
<PAGE> 50

equity. At December 31, 1995, the Company had a non-interest bearing note
payable to the Shipbuilding Business totaling $965 million, which is included as
a component of the Company's combined equity. The unpaid balances of all notes
and advances between the Company, the Industrial Business and the Shipbuilding
Business were capitalized and forgiven immediately prior to the Distributions.

The "Note payable to affiliates" balance at December 31, 1996 relates to an
interest-bearing demand loan made to TGP from EPG in December 1996 subsequent to
the Merger.

Accounts Receivable and Accounts Payable -- Affiliated Companies

The December 31, 1995 "Accounts payable -- Affiliated companies" balance
primarily includes billings for general and administrative costs incurred by the
Industrial Business and charged to the Company. The December 31, 1995 "Accounts
receivable -- Affiliated companies" balance primarily relates to billings for
U.S. income taxes incurred by Old Tenneco and charged to the Industrial Business
and Shipbuilding Business. Affiliated accounts receivable and accounts payable
between the Company and the Industrial Business and Shipbuilding Business were
settled, capitalized or converted into ordinary trade accounts, as applicable,
as part of the Distributions.

The December 31, 1996 "Accounts receivable -- Affiliated companies" balance
relates to
interest-bearing advances of cash flows from TGP operations to EPG.

Employee Benefits

Certain employees of the Company participated in Old Tenneco's employee
stock ownership and employee stock purchase plans. The Old Tenneco employee
stock ownership plan provided for the grant of Old Tenneco common stock options
and other stock awards at a price not greater than market value at the date of
grant. The Old Tenneco employee stock purchase plan allowed employees to
purchase Old Tenneco common stock at a 15 percent discount subject to certain
thresholds. Certain employees of the Industrial Business and Shipbuilding
Business also participated in Old Tenneco's employee stock ownership and
employee stock purchase plans. The cost of stock issued to these employees was
billed to the Industrial Business and Shipbuilding Business. In connection with
the Distributions, outstanding options on Old Tenneco common stock held by the
Company's employees were vested so that they became fully exercisable prior to
the Merger. If not exercised prior to the Merger, such options were cancelled
upon consummation of the Merger. Outstanding options on Old Tenneco common stock
held by the Industrial Business and Shipbuilding Business employees were
converted into new options of New Tenneco and Newport News, as applicable, so as
to preserve the aggregate value of the options held prior to the Distributions.

Employees of the Company also participated in certain Old Tenneco
postretirement and pension plans. Reference is made to Note 8, "Employee
Benefits," for a further discussion of the plans.

Sales of Receivables

At December 31, 1995, Tenneco Credit Corporation (now renamed El Paso
Energy Credit Corporation) had purchased $513 million of trade receivables from
Old Tenneco's Industrial Business. Tenneco Credit Corporation sold a portion of
these trade receivables to a third party in the ordinary course of business. In
addition, at December 31, 1995, Tenneco Credit Corporation had certain notes
receivable primarily related to retail sales of farm and construction equipment
by Case Corporation which it received in a prior transaction. As a part of the
intercompany transfers preceding the Merger and Distributions, Tenneco Credit
Corporation transferred these Case Corporation retail receivables and all of its
interest and obligations associated with receivables relating to the Industrial
Business held or factored at that time to New Tenneco.

47
<PAGE> 51

16. QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
-- PRE-ACQUISITION --
COMBINED
---------------------------------------------
QUARTER OPERATING OPERATING NET
(IN MILLIONS) REVENUES INCOME INCOME (LOSS)
------------- --------- --------- -------------
<S> <C> <C> <C>
1996 1st.............................................. $ 754 $ 63 $ 49
2nd............................................. 629 42 24
3rd............................................. 636 49 22
4th............................................. 716 28 (200)
------ ---- -----
$2,735 $182 $(105)
====== ==== =====
1995 1st.............................................. $ 529 $ 54 $ 32
2nd............................................. 447 30 15
3rd............................................. 439 46 5
4th............................................. 560 2 105
------ ---- -----
$1,975 $132 $ 157
====== ==== =====
</TABLE>

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

NOTE: See Item 7, Management's Discussion and Analysis of Financial Condition
and Results of Operations and Notes 1, 3, 6, and 7 of the notes to
consolidated and combined financial statements for significant issues
affecting comparability of quarterly results.

48
<PAGE> 52

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To El Paso Tennessee Pipeline Co.:

We have audited the accompanying post-acquisition balance sheet of El Paso
Tennessee Pipeline Co. ("EPTPC") and consolidated subsidiaries as of December
31, 1996 and the pre-acquisition combined balance sheet of the Energy Businesses
of EPTPC, as predecessor operations to EPTPC and consolidated subsidiaries (see
Note 1), as of December 31, 1995, and the related pre-acquisition combined
statements of income, cash flows and changes in consolidated stockholders'
equity and combined equity for each of the three years in the period ended
December 31, 1996. These consolidated and combined financial statements, and the
schedule referred to below, are the responsibility of EPTPC's management. Our
responsibility is to express an opinion on these consolidated and combined
financial statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated and combined financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
and combined financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated and combined financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated and combined financial statements referred
to above present fairly, in all material respects, the post-acquisition
financial position of EPTPC and consolidated subsidiaries as of December 31,
1996 and the pre-acquisition combined financial position of the Energy
Businesses of EPTPC as of December 31, 1995, and the results of their
pre-acquisition combined operations and cash flows for each of the three years
in the period ended December 31, 1996, in conformity with generally accepted
accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
consolidated and combined financial statements taken as a whole. The
supplemental schedule listed in the index to Part IV, Item 14 is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic consolidated and combined financial statements. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic consolidated and combined financial statements and, in
our opinion, fairly states in all material respects the financial data required
to be set forth therein in relation to the basic consolidated and combined
financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Houston, Texas
March 4, 1997

49
<PAGE> 53

SCHEDULE II

EL PASO TENNESSEE PIPELINE CO.

VALUATION AND QUALIFYING ACCOUNTS
(IN MILLIONS)

<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- ----------------------- -------- --------
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS OF YEAR
----------- ---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Allowance for Doubtful Accounts Deducted
from Assets to Which it Applies:
Year Ended December 31, 1996.......... $49 $15 $ 8 $27 $45
=== === === === ===
Year Ended December 31, 1995.......... $21 $26 $ 9 $ 7 $49
=== === === === ===
Year Ended December 31, 1994.......... $37 $ 2 $ 2 $20 $21
=== === === === ===
</TABLE>

50
<PAGE> 54

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information appearing under the caption "Proposal No. 1 -- Election of
Directors" in EPTPC's proxy statement for the 1997 Annual Meeting of
Stockholders is incorporated herein by reference. Information regarding
executive officers of EPTPC is presented in Item 1 of this Form 10-K under the
caption "Executive Officers of the Registrant" and is incorporated herein by
reference.

ITEM 11. EXECUTIVE COMPENSATION

Information appearing under the caption "Executive Compensation" in EPTPC's
proxy statement for the 1997 Annual Meeting of Stockholders is incorporated
herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

Information appearing under the caption "Security Ownership of a Certain
Beneficial Owner" in EPTPC's proxy statement for the 1997 Annual Meeting of
Stockholders is incorporated herein by reference. Information appearing under
the caption "Security Ownership of Directors and Executive Officers" in EPTPC's
proxy statement for the 1997 Annual Meeting of Stockholders is incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information appearing under the caption "Relationships with El Paso Energy
Corporation and El Paso Natural Gas Company" in EPTPC's proxy statement for the
1997 Annual Meeting of Stockholders is incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as a part of this report:

1. Financial statements.

The following consolidated and combined financial statements of the Company
are included in Part II, Item 8 of this report:

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Combined statements of income.......................... 22
Consolidated and combined balance sheets............... 23
Combined statements of cash flows...................... 24
Statements of changes in consolidated stockholders'
equity and combined equity............................ 25
Notes to consolidated and combined financial
statements............................................ 26
Report of independent public accountants............... 49
</TABLE>

2. Financial statement schedules and supplementary information required to
be submitted.

<TABLE>
<S> <C>
Schedule II -- Valuation and qualifying accounts....... 50
Schedules other than that listed above are omitted
because they are not applicable

3. Exhibit list............................................ 53
</TABLE>

51
<PAGE> 55

(b) Reports on Form 8-K:

On November 6, 1996, Tenneco Inc. (now renamed El Paso Tennessee Pipeline
Co.) filed a report under Item 5 on Form 8-K, dated November 6, 1996, with
respect to the resignation of the President and Chief Executive Officer of
Tenneco Automotive.

On November 13, 1996, Tenneco Inc. (now renamed El Paso Tennessee Pipeline
Co.) filed a report under Items 5 and 7 on Form 8-K, dated November 13, 1996.
Financial statements for the energy businesses and operations owned directly or
indirectly by Tenneco Inc. and its subsidiaries, and other existing and
discontinued operations of Tenneco Inc. were filed.

On November 18, 1996, Tenneco Inc. (now renamed El Paso Tennessee Pipeline
Co.) filed a report under Items 5 and 7 on Form 8-K, dated November 18, 1996,
with respect to the issuance of 6,000,000 shares of 8 1/4% Cumulative Junior
Preferred Stock, Series A, to a syndicate of underwriters managed by Morgan
Stanley & Co. Incorporated.

On December 26, 1996, EPTPC filed a report under Item 1, 2, 5 and 7 on Form
8-K, dated December 26, 1996, as amended pursuant to an amendment on Form 8-K/A
filed January 21, 1997 respectively, with respect to the Merger.

52
<PAGE> 56

EL PASO TENNESSEE PIPELINE CO.

EXHIBIT LIST
DECEMBER 31, 1996

The following exhibits are filed with this Annual Report on Form 10-K for
the fiscal year ended December 31, 1996, or are incorporated herein by reference
(exhibits designated by an asterisk are filed with this Report; all other
exhibits are incorporated herein by reference to a prior filing):

<TABLE>
<C> <S>
2.1 -- Amended and Restated Merger Agreement dated as of June
19, 1996, among EPG, El Paso Merger Company and Old
Tenneco (Exhibit 2.A to Registration No. 333-10911).
2.2 -- Distribution Agreement, dated as of November 1, 1996,
among Old Tenneco, New Tenneco Inc. and Newport News
Shipbuilding Inc. (Exhibit 2.2 to the Form 8-K of EPG
dated December 26, 1996, File No. 1-2700).
2.3 -- Amendment No. 1 to Distribution Agreement entered into as
of December 11, 1996, by and among Old Tenneco, New
Tenneco Inc. and Newport News Shipbuilding Inc. (Exhibit
2.3 to the Form 8-K/A of EPG dated January 21, 1997, File
No. 1-2700).
3.1 -- Certificate of Incorporation as amended and supplemented
as of March 1, 1995 (Exhibit 3(a)(1) to Form 10-K of
Tenneco Inc. for the fiscal year ended December 31, 1994,
File No. 1-9864).
*3.2 -- Certificate of Retirement of Preferred Stock Redeemed or
Purchased, dated February 16, 1996; Certificate of
Elimination of the Series A Cumulative Preferred Stock of
Tenneco Inc. dated February 27, 1996; Certificate of
Elimination of the Variable Rate Preferred Stock of
Tenneco Inc. dated February 27, 1996; Certificate of
Elimination of the Participating Preferred Stock of
Tenneco Inc. dated February 27, 1996; Certificate of
Designation, Preferences and Rights of 8 1/4% Cumulative
Junior Preferred Stock, Series A, dated November 18,
1996; Certificate of Amendment of Certificate of
Incorporation, dated December 11, 1996; Certificate of
Merger dated December 11, 1996; and Certificate of
Designation, Preferences and Rights of 8 1/2% Cumulative
Junior Preferred Stock, Series B, dated March 5, 1997.
*3.2 -- By-laws of EPTPC effective December 12, 1996.
*4.1 -- Indenture dated as of March 4, 1997, between TGP and The
Chase Manhattan Bank.
*4.2 -- First Supplemental Indenture dated as of March 13, 1997,
between TGP and The Chase Manhattan Bank to the Indenture
dated as of March 4, 1997, between TGP and The Chase
Manhattan Bank.
*4.3 -- Second Supplemental Indenture dated as of March 13, 1997,
between TGP and The Chase Manhattan Bank to the Indenture
dated as of March 4, 1997, between TGP and The Chase
Manhattan Bank.
*4.4 -- Third Supplemental Indenture dated as of March 13, 1997,
between TGP and The Chase Manhattan Bank to the Indenture
dated as of March 4, 1997, between TGP and The Chase
Manhattan Bank.
10.1 -- $3 billion Revolving Credit and Competitive Advance
Facility Agreement dated as of November 4, 1996 between
Tenneco Inc. (renamed El Paso Tennessee Pipeline Co.),
The Chase Manhattan Bank and certain other banks (Exhibit
10.F to Form 10-K of El Paso Natural Gas Company, File
No. 1-2700, filed March 6, 1997).
*21 -- List of Subsidiaries and Affiliates of El Paso Tennessee
Pipeline Co.
</TABLE>

53
<PAGE> 57
*27 -- Financial Data Schedule.

UNDERTAKING

The undersigned, EPTPC, hereby undertakes, pursuant to Regulation S-K, Item
601(b), paragraph (4)(iii), to furnish to the Securities and Exchange Commission
upon request all constituent instruments defining the rights of holders of
long-term debt of EPTPC and its consolidated subsidiaries not filed herewith for
the reason that the total amount of securities authorized under any of such
instruments does not exceed 10 percent of the total consolidated assets of EPTPC
and its consolidated subsidiaries.

54
<PAGE> 58

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, El Paso Tennessee Pipeline Co. has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized on the
14th day of March 1997.

EL PASO TENNESSEE PIPELINE CO.

By: /s/ WILLIAM A. WISE
------------------------------------
William A. Wise
Chairman of the Board, President
and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1933, as
amended, this report has been signed below by the following persons on behalf of
El Paso Tennessee Pipeline Co. and in the capacities and on the dates as
indicated.

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

/s/ WILLIAM A. WISE Chairman of the Board, President, March 14, 1997
- -------------------------------------------- Chief Executive Officer and
William A. Wise Director

/s/ H. BRENT AUSTIN Senior Vice President, Chief March 14, 1997
- -------------------------------------------- Financial Officer and Director
H. Brent Austin

/s/ JOEL RICHARDS III Senior Vice President and Director March 14, 1997
- --------------------------------------------
Joel Richards III

/s/ BRITTON WHITE, JR. Senior Vice President, General March 14, 1997
- -------------------------------------------- Counsel and Director
Britton White, Jr.

/s/ JEFFREY I. BEASON Vice President, Controller and March 14, 1997
- -------------------------------------------- Director
Jeffrey I. Beason
</TABLE>

55
<PAGE> 59

INDEX TO EXHIBITS

<TABLE>
<C> <S>
2.1 -- Amended and Restated Merger Agreement dated as of June
19, 1996, among EPG, El Paso Merger Company and Old
Tenneco (Exhibit 2.A to Registration No. 333-10911).
2.2 -- Distribution Agreement, dated as of November 1, 1996,
among Old Tenneco, New Tenneco Inc. and Newport News
Shipbuilding Inc. (Exhibit 2.2 to the Form 8-K of EPG
dated December 26, 1996, File No. 1-2700).
2.3 -- Amendment No. 1 to Distribution Agreement entered into as
of December 11, 1996, by and among Old Tenneco, New
Tenneco Inc. and Newport News Shipbuilding Inc. (Exhibit
2.3 to the Form 8-K/A of EPG dated January 21, 1997, File
No. 1-2700).
3.1 -- Certificate of Incorporation as amended and supplemented
as of March 1, 1995 (Exhibit 3(a)(1) to Form 10-K of
Tenneco Inc. for the fiscal year ended December 31, 1994,
File No. 1-9864).
*3.2 -- Certificate of Retirement of Preferred Stock Redeemed or
Purchased, dated February 16, 1996; Certificate of
Elimination of the Series A Cumulative Preferred Stock of
Tenneco Inc. dated February 27, 1996; Certificate of
Elimination of the Variable Rate Preferred Stock of
Tenneco Inc. dated February 27, 1996; Certificate of
Elimination of the Participating Preferred Stock of
Tenneco Inc. dated February 27, 1996; Certificate of
Designation, Preferences and Rights of 8 1/4% Cumulative
Junior Preferred Stock, Series A, dated November 18,
1996; Certificate of Amendment of Certificate of
Incorporation, dated December 11, 1996; Certificate of
Merger dated December 11, 1996; and Certificate of
Designation, Preferences and Rights of 8 1/2% Cumulative
Junior Preferred Stock, Series B, dated March 6, 1997.
*3.3 -- By-laws of EPTPC effective December 12, 1996.
*4.1 -- Indenture dated as of March 4, 1997, between TGP and The
Chase Manhattan Bank.
*4.2 -- First Supplemental Indenture dated as of March 13, 1997,
between TGP and The Chase Manhattan Bank to the Indenture
dated as of March 4, 1997, between TGP and The Chase
Manhattan Bank.
*4.3 -- Second Supplemental Indenture dated as of March 13, 1997,
between TGP and The Chase Manhattan Bank to the Indenture
dated as of March 4, 1997, between TGP and The Chase
Manhattan Bank.
*4.4 -- Third Supplemental Indenture dated as of March 13, 1997,
between TGP and The Chase Manhattan Bank to the Indenture
dated as of March 4, 1997, between TGP and The Chase
Manhattan Bank.
10.1 -- $3 billion Revolving Credit and Competitive Advance
Facility Agreement dated as of November 4, 1996 between
Tenneco Inc. (renamed El Paso Tennessee Pipeline Co.),
The Chase Manhattan Bank and certain other banks (Exhibit
10.F to Form 10-K of El Paso Natural Gas Company, File
No. 1-2700, filed March 6, 1997).
*21 -- List of Subsidiaries and Affiliates of El Paso Tennessee
Pipeline Co.
</TABLE>

*27 -- Financial Data Schedule.

<PAGE> 1
EXHIBIT 3.2

TENNECO INC.
CERTIFICATE OF RETIREMENT OF PREFERRED STOCK
REDEEMED OR PURCHASED
--------------------------------------------

Tenneco Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware, DOES HEREBY CERTIFY as follows:

FIRST: That pursuant to the provisions of Section 160 of the General
Corporation Law of the State of Delaware, and subject to the provisions of its
Certificate of Incorporation, as amended, One Hundred Ninety-Five Thousand
Seven Hundred Sixty-One (195,761) shares of its issued and outstanding $7.40
Cumulative Preferred Stock were purchased and/or redeemed by the corporation
and pursuant to the provisions of Section 243 of the General Corporation Law of
the State of Delaware, such shares of sock have the status of retired shares.

SECOND. That the Certificate of Incorporation of the corporation
prohibits the reissuance of such retired shares of Cumulative Preferred Stock.

THIRD: That pursuant to the-provisions of Section 243 of the General
Corporation Law of the State of Delaware, upon this Certificate becoming
effective, the Certificate of Incorporation of the corporation shall be amended
so that the authorized Cumulative Preferred Stock of the corporation shall be
reduced by the aggregate of the shares so retired, to-wit: One Hundred
Ninety-Five Thousand Seven Hundred Sixty One (195,761) shares.

FOURTH: This Certificate shall become effective on March 1, 1996.

IN WITNESS WHEREOF, said Tenneco Inc. has caused this Certificate to
be signed by Mark A. McCollum, Vice President and Controller, and attested by
James D. Gaughan, Assistant Secretary, this 16th day of February, 1996.

TENNECO INC.

By: /s/ MARK A. MCCOLLUM
--------------------------------
Mark A. McCollum, Vice President
ATTEST: and Controller

/S/JAMES D. GAUGHAN
- -------------------
James D. Gaughan
Assistant Secretary
<PAGE> 2
CERTIFICATE OF ELIMINATION OF THE
SERIES A CUMULATIVE PREFERRED STOCK OF TENNECO INC.

Pursuant to Section 151(g)
of the General Corporation Law
of the State of Delaware

Tenneco Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), in accordance with the
provisions of Section 151(g) of the General Corporation Law of the State of
Delaware, hereby certifies as follows:

1. That, pursuant to Section 151 of the General
Corporation Law of the State of Delaware and authority granted in the
Certificate of Incorporation of the Corporation, as theretofore amended, the
Board of Directors of the Corporation, by resolution duly adopted, authorized
the issuance of a series of 10,062,500 shares of Series A Cumulative Preferred
Stock, without par value (the "Series A Cumulative Preferred Stock"), and
established the voting powers, designations, preferences and relative,
participating and other rights, and the qualifications, limitations or
restrictions thereof, and, on December 19, 1991, filed a Certificate of
Designation with respect to such Series A Cumulative Preferred Stock in the
office of the Secretary of State of the State of Delaware.

2. That no shares of said Series A Cumulative Preferred
Stock are outstanding and no shares thereof will be issued subject to said
Certificate of Designation.

3. That the Board of Directors of the Corporation
has adopted the following resolutions:

WHEREAS, by resolution of the Board of Directors of
the Corporation and by a Certificate of Designation filed in
the office of the Secretary of State of the State of Delaware
on December 19,1991, this Corporation authorized the issuance
of a series of 10,062,500 shares of Series A Cumulative
Preferred Stock, without par value, of the Corporation (the
"Series A Cumulative Preferred Stock") and established the
voting powers, designations, preferences and relative,
participating and other rights, and the qualifications,
limitations or restrictions thereof; and

WHEREAS, as of the date hereof no shares of such
Series A Cumulative Preferred Stock are outstanding and no
shares of such Series A Cumulative Preferred
<PAGE> 3
Stock will be issued subject to said Certificate of
Designation; and

WHEREAS, it is desirable that all matters set forth
in the Certificate of Designation with respect to such Series
A Cumulative Preferred Stock be eliminated from the
Certificate of Incorporation, as heretofore amended, of the
Corporation;

NOW, THEREFORE, BE IT AND IT HEREBY IS

RESOLVED, that all matters set forth in the
Certificate of Designation with respect to such
Series A Cumulative Preferred Stock be eliminated from the
Certificate of Incorporation, as heretofore amended, of the
Corporation; and it is further

RESOLVED, that the officers of the Corporation be,
and hereby are, authorized and directed to file a Certificate
with the office of the Secretary of State of the State of
Delaware setting forth a copy of these resolutions whereupon
all matters set forth in the Certificate of Designation with
respect to such Series A Cumulative Preferred Stock shall be
eliminated from the Certificate of Incorporation, as
heretofore amended, of the Corporation.

4. That, accordingly, all matters set forth in the
Certificate of Designation with respect to such Series A Cumulative Preferred
Stock be, and hereby are, eliminated from the Certificate of Incorporation, as
heretofore amended, of the Corporation.

IN WITNESS WHEREOF, Tenneco Inc. has caused this Certificate
to be signed by Robert T. Blakely, its Senior Vice President, as of this 27th
day of February, 1996.

TENNECO INC.

By:/s/ ROBERT T. BLAKELY
---------------------
Robert T. Blakely
Senior Vice President
ATTEST:

/s/ JAMES D. GAUGHAN
- --------------------
James D. Gaughan
Assistant Secretary

-2-
<PAGE> 4
CERTIFICATE OF ELIMINATION OF THE
VARIABLE RATE PREFERRED STOCK OF TENNECO INC.

Pursuant to Section 151(g)
of the General Corporation Law
of the State of Delaware

1. That, pursuant to Section 151 of the General
Corporation Law of the State of Delaware and authority granted in the
Certificate of Incorporation of the Corporation, as theretofore amended, the
Board of Directors of the Corporation, by resolution duly adopted, authorized
the issuance of a series of 200,396 shares of Variable Rate Preferred Stock,
without par value (the "Variable Rate Preferred Stock"), and established the
voting powers, designations, preferences and relative, participating and other
rights, and the qualifications, limitations or restrictions thereof, and, on
October 9, 1987, filed a Certificate of Designation with respect to such
Variable Rate Preferred Stock in the office of the Secretary of State of the
State of Delaware.

2. That no shares of said Variable Rate Preferred Stock
are outstanding and no shares thereof will be issued subject to said
Certificate of Designation.

3. That the Board of Directors of the Corporation has
adopted the following resolutions:

WHEREAS, by resolution of the Board of Directors of
the Corporation and by a Certificate of Designation filed in
the office of the Secretary of State of the State of Delaware
on October 9, 1987, this Corporation authorized the issuance of
a series of 200,396 shares of Variable Rate Preferred Stock,
without par value, of the Corporation (the "Variable Rate
Preferred Stock") and established the voting powers,
designations, preferences and relative, participating and other
rights, and the qualifications, limitations or restrictions
thereof; and

WHEREAS, as of the date hereof no shares of such
Variable Rate Preferred Stock are outstanding and no shares
of such Variable Rate Preferred Stock will be issued subject
to said Certificate of Designation; and

<PAGE> 5
WHEREAS, it is desirable that all matters set forth
in the Certificate of Designation with respect to such
Variable Rate Preferred Stock be eliminated from the
Certificate of Incorporation, as heretofore amended, of
the Corporation;

NOW, THEREFORE, BE IT AND IT HEREBY IS

RESOLVED, that all matters set forth in the
Certificate of Designation with respect to such Variable
Rate Preferred Stock be eliminated from the Certificate
of Incorporation, as heretofore amended, of the
Corporation; and it is further

RESOLVED, that the officers of the Corporation be,
and hereby are, authorized and directed to file a Certificate
with the office of the Secretary of State of the State of
Delaware setting forth a copy of these resolutions whereupon
all matters set forth in the Certificate of Designation
with respect to such Variable Rate Preferred Stock shall
be eliminated from the Certificate of Incorporation, as
heretofore amended, of the Corporation.

4. That, accordingly, all matters set forth in the
Certificate of Designation with respect to such Variable Rate Preferred Stock
be, and hereby are, eliminated from the Certificate of Incorporation, as
heretofore amended, of the Corporation.

IN WITNESS WHEREOF, Tenneco Inc. has caused this Certificate
to be signed by Robert T. Blakely, its Senior Vice President, as of this 27th
day of February, 1996.

TENNECO INC.

BY:/s/ ROBERT T. BLAKELY
---------------------
Robert T. Blakely
Senior Vice President
ATTEST:

/s/ JAMES D. GAUGHAN
- --------------------
James D. Gaughan
Assistant Secretary

-2-
<PAGE> 6
CERTIFICATE OF ELIMINATION OF THE
PARTICIPATING PREFERRED STOCK OF TENNECO INC.

Pursuant to Section 151(g)
of the General Corporation Law
of the State of Delaware

1. That, pursuant to Section 151 of the General
Corporation Law of the State of Delaware and authority granted in the
Certificate of Incorporation of the Corporation, as theretofore amended, the
Board of Directors of the Corporation, by resolution duly adopted, authorized
the issuance of a series of 1,859,000 shares of Participating Preferred Stock,
without par value (the "Participating Preferred Stock"), and established the
voting powers, designations, preferences and relative, participating and other
rights, and the qualifications, limitations or restrictions thereof, and, on
October 9, 1987, filed a Certificate of Designation with respect to such
Participating Preferred Stock in the office of the Secretary of State of the
State of Delaware.

2. That no shares of said Participating Preferred Stock
are outstanding and no shares thereof will be issued subject to said
Certificate of Designation.

3. That the Board of Directors of the Corporation has
adopted the following resolutions:

WHEREAS, by resolution of the Board of Directors of
the Corporation and by a Certificate of Designation filed in
the office of the Secretary of State of the State of Delaware
on October 9, 1987, this Corporation authorized the issuance
of a series of 1,859,000 shares of Participating Preferred
Stock, without par value, of the Corporation (the
"Participating Preferred Stock") and established the
voting powers, designations, preferences and relative,
participating and other rights, and the qualifications,
limitations or restrictions thereof; and

WHEREAS, as of the date hereof no shares of such
Participating Preferred Stock are outstanding and no
shares of such Participating Preferred Stock will be issued
subject to said Certificate of Designation; and

<PAGE> 7
WHEREAS, it is desirable that all matters set forth
in the Certificate of Designation with respect to such
Participating Preferred Stock be eliminated from the
Certificate of Incorporation, as heretofore amended, of
the Corporation;

NOW, THEREFORE, BE IT AND IT HEREBY IS

RESOLVED, that all matters set forth in the
Certificate of Designation with respect to such Participating
Preferred Stock be eliminated from the Certificate of
Incorporation, as heretofore amended, of the Corporation; and
it is further

RESOLVED, that the officers of the Corporation be,
and hereby are, authorized and directed to file a Certificate
with the office of the Secretary of State of the State of
Delaware setting forth a copy of these resolutions whereupon
all matters set forth in the Certificate of Designation with
respect to such Participating Preferred Stock shall be
eliminated from the Certificate of Incorporation, as heretofore
amended, of the Corporation.

4. That, accordingly, all matters set forth in the Certificate of
Designation with respect to such Participating Preferred Stock be, and hereby
are, eliminated from the Certificate of Incorporation, as heretofore amended,
of the Corporation.

IN WITNESS WHEREOF, Tenneco Inc. has caused this Certificate
to be signed by Robert T. Blakely, its Senior Vice President, as of this 27th
day of February, 1996.

TENNECO INC.

By:/s/ ROBERT T. BLAKELY
---------------------
Robert T. Blakely
Senior Vice President
ATTEST:

/s/ JAMES D. GAUGHAN
- --------------------
James D. Gaughan
Assistant Secretary
<PAGE> 8

TENNECO INC.

Certificate of Designation, Preference and Rights of Junior Preferred Stock
by Resolution of the Board of Directors
Providing for an Issue of 6,000,000
Shares of Junior Preferred Stock Designated
"8 1/4% Cumulative Junior Preferred Stock, Series A"

I, Karl A. Stewart, Vice President and Secretary of Tenneco Inc.
(thereinafter referred to as the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 151 thereof. DO HEREBY CERTIFY:

That pursuant to authority conferred upon the Board of Directors by
the Certificate of Incorporation of said Corporation, as amended, the Board of
Directors is authorized to issue Junior Preferred Stock, without par value, of
the Corporation ("Junior Preferred Stock") in one or more series, and the Board
of Directors (i) has authorized the issuance of the series of Junior Preferred
Stock hereinafter provided for, and (ii) has authorized a special committee of
the Board of Directors (the "Junior Preferred Stock Issuance Committee") to
adopt the resolution set forth below creating a series of 6,000,000 shares of
Junior Preferred Stock, without par value, designated as 8 1/4% Cumulative
Junior Preferred Stock, Series A.

That the Junior Preferred Stock Issuance Committee has adopted the
following resolution:

RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Corporation by the Certificate of Incorporation of
the Corporation, as amended (as such may be further amended from time
to time, the "Certificate of Incorporation") and the authority vested
by such Board in a Junior Preferred Stock Issuance Committee, all of
the members of which are members of such Board, a series of Junior
Preferred Stock, without par value, of the Corporation (the "Junior
Preferred Stock") be, and hereby is, created to be designated "8 1/4%
Cumulative Junior Preferred Stock, Series A" (hereinafter referred to
as the "Series A Preferred Stock"), consisting of 6,000,000 shares,
and the designations, powers, preferences and relative and other
special rights and the qualifications, limitations and restrictions of
the Series A Preferred Stock are hereby fixed and stated to be as
follows (all terms used herein which are defined in the Certificate of
Incorporation shall be deemed to have the meanings provided therein):

Section 1. Dividends. (a) The dividend rate on the Series A
Preferred Stock shall be 8 1/4% of $50 per share of Series A Preferred
Stock per annum (2.0625% per quarter annum). Dividends (including
Additional DRD Dividends (as defined in Section 2) on shares of the
Series A Preferred Stock shall accrue, whether or not declared, on a
daily basis from the date of issuance of such shares. Accrued but
unpaid dividends shall not bear interest.

(b) Dividends on the Series A Preferred Stock shall be
payable, when, as and if declared by the Board of Directors of the
Corporation out of assets legally available therefor, quarter-yearly
on the last days of March, June, September and December in each year
(each, a "Dividend Payment Date"), with the first dividend payment
date being the next Dividend Payment Date following the date of
issuance. Dividends on each Dividend Payment Date will be payable to
holders of record of the Series A Preferred Stock as they appear on
the stock books of the Corporation on a record date, not more than 60
days preceding such Dividend Payment Date, fixed for such purpose by
the Board of Directors in advance of such Dividend Payment Date.
Dividends payable on the Series A Preferred Stock for any period
shorter than a quarter-yearly dividend period shall be computed on the
basis of a 360-day year of twelve 30-day months. The Series A
Preferred Stock shall rank on a parity with each other series of
Junior Preferred Stock as to the payment of dividends, except to the
extent otherwise provided in Section 7 hereof or in the resolution or
resolutions providing for the issuance of such other series.

(c) If (x) the Stock Issuance (as defined in the Amended and
Restated Agreement and Plan of Merger, dated as of June 19, 1996, as
such may be amended or supplemental from time to time (the "Merger
Agreement") among the Corporation, El Paso Natural Gas Company, a
Delaware corporation ("El Paso")

<PAGE> 9
and El Paso Merger Company, a Delaware corporation) is not approved
the stockholders of El Paso at a special meeting of El Paso
stockholders (including any adjournments or postponements thereof, the
"El Paso Special Meeting") called to approve such issuance, (y) the
Merger (as defined in the Merger Agreement) is effected, and (z) on or
before the 90th day after the date of the El Paso Special Meeting,
either Standard and Poor's Corp. ("S&P") or Moody's Investors
Service, Inc. ("Moody's") downgrades the rating previously given by it
to the Series A Preferred Stock, the annual dividend rate set forth in
(a) above will be automatically subjected to a one-time upward
adjustment to the rate set forth in the table below opposite the
applicable ratings which are given to the Series A Preferred Stock by
each of Moody's and S&P as of the 90th day after the El Paso Special
Meeting, effective as of the date of original issuance of the Series A
Preferred Stock.

<TABLE>
<CAPTION>
Annual
Dividend
Revised Ratings (Moody's/S&P) Rate
----------------------------- --------
<S> <C>
Ba1/BB+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.000%
Ba2/BB+ or Ba1/BB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.125%
Ba2/BB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.250%
Ba3/BB or Ba2/BB- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.500%
Ba3/BB- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.000%
</TABLE>

If any such adjustment to the annual dividend rate occurs
after a Dividend Payment Date as to which the Corporation previously
paid dividends on the Series A Preferred Stock, additional dividends
will be payable, out of funds legally available therefor, on each
share of Series A Preferred Stock on the next succeeding Dividend
Payment Date (or if such adjustment occurs after the dividend payable
on the next succeeding Dividend Payment Date has been declared, on the
second succeeding Dividend Payment Date following the date of such
adjustment) to the holder of record of such share of Series A
Preferred Stock as of the record date established for such succeeding
Dividend Payment Date (or second succeeding Dividend Payment Date, as
the case may be) in an amount equal to the excess of (x) the aggregate
amount of dividends that would have been payable on such share on all
Dividend Payments as to which the Corporation previously paid
dividends on the Series A Preferred Stock if dividends had accrued
from the date of issuance of the Series A Preferred Stock at the
adjusted annual dividend rate, over (y) the aggregate amount of
dividends actually paid with respect to such share of Series A
Preferred Stock. If the annual dividend rate is adjusted as provided
above, the Corporation will cause notice of such adjustment to be sent
to the holders of record of the Series A Preferred Stock as they
appear in the stock register of the Corporation.

Section 2. Changes in the Dividends Received Percentage. (a)
Notwithstanding Section 1 hereof, if one or more amendments to the
Internal Revenue Code of 1986, as amended (the "Code"), are enacted
that reduce the percentage of the dividends received deduction as
specified in Section 243(a)(1) of the Code or any successor provision
(the "Dividends Received Percentage") to below 70%, the amount of each
dividend payable per share of the Series A Preferred Stock for
dividend payments made on or after the effective date of such change
(or the second succeeding dividend payment after such effective date,
as herein described) will be adjusted by multiplying the amount of the
dividend payable pursuant to Section 1 (before adjustment pursuant to
this Section 2) by a factor, which will be the number determined in
accordance with the following formula (the "DRD Formula"), and
rounding the result to the nearest cent:

1 - (.35(1 - .70))
------------------------
1 - (.35(1 - DRP))

For the purposes of the DRD Formula, "DRP" means the Dividends
Received Percentage applicable to the dividend in question. No
amendments to the Code, other than a change in the percentage of the
dividends received deduction set forth in Section 243 (a)(1) of the
Code or any successor provision, will give rise to an adjustment.
Notwithstanding the foregoing provisions of this Section 2, in the
event that, with respect to any such amendment, the Corporation
receives either an unqualified opinion of nationally

2
<PAGE> 10
recognized independent tax counsel selected by the Corporation or a
private letter ruling or similar form of authorization from the
Internal Revenue Service to the effect that such an amendment would
not apply to dividends payable on the Series A Preferred Stock, then
any such amendment will not result in the adjustment provided for
pursuant to the DRD Formula. The opinion referenced in the previous
sentence must be based upon a specific exception in the legislation
amending the DRP or upon a published pronouncement of the Internal
Revenue Service addressing such legislation. The Corporation's
calculation of the dividends payable, as so adjusted and as certified
accurate as to calculation and reasonable as to method by the
independent public accountants then regularly engaged by the
Corporation, will be final and not subject to review absent manifest
error.

(b) If any amendment to the Code which reduces the Dividends
Received Percentage to below 70% is enacted after a dividend payable
on Dividend Payment Date has been declared but prior to the applicable
Dividend Payment Date, the amount of dividend payable on such Dividend
Payment Date will not be increased. Instead, an amount, equal to the
excess of (x) the product of the dividends paid by the Corporation on
such Dividend Payment Date and the factor derived from the DRD Formula
(where the DRP used in the DRD Formula would be equal to the reduced
Dividends Received Percentage for such dividends), over (y) the
dividends paid by the Corporation on such Dividend Payment Date, will
be payable, out of funds legally available therefor, to holders of
record as of the record date established for the next succeeding
Dividend Payment Date in addition to any other amounts payable on such
date. Notwithstanding the foregoing, no such additional dividend will
be payable pursuant to this Section 2 if the such amendment to the
Code would not result in an adjustment to the DRD Formula due to the
Corporation having received either an opinion of counsel or tax ruling
referred to in paragraph (a) of this Section 2.

(c) If, prior to March 31, 1997, an amendment to the Code is
enacted that reduces the Dividends Received Percentage to below 70%
and such reduction retroactively applies to a Dividend Payment Date as
to which the Corporation previously paid dividends on the Series A
Preferred Stock (each an "Affected Dividend Payment Date"), additional
dividends (the "Additional DRD Dividends") will be payable out of
funds legally available therefor on the succeeding Dividend Payment
Date (or if such amendment is enacted after the dividend payable on
such Dividend Payment Date has been declared, on the second succeeding
Dividend Payment Date following the date of enactment) to holders of
record as of the record date established for such succeeding Dividend
Payment Date (or second succeeding Dividend Payment Date, as the case
my be) in an amount equal to the excess of (x) the product of the
dividends paid by the Corporation on each Affected Dividend Payment
Date and the factor derived from the DRD Formula (where the DRP used
in the DRD Formula would be equal to the reduced Dividends Received
Percentage applied to each Affected Dividend Payment Date), over (y)
the dividends paid by the Corporation on all Affected Dividend Payment
Dates.

(d) Additional DRD Dividends will not be payable in respect to
the enactment of any amendment to the Code on or after March 31, 1997
which retroactively reduces the Dividends Received Percentage to below
70%, or if enacted prior to March 31, 1997, which would not result in
an adjustment due to the Corporation having received either an opinion
of counsel or tax ruling referred to in paragraph (a) of this Section
2. The Corporation shall only be required to make one payment of
Additional DRD Dividends.

(e) In the event that the amount of dividends payable per
share of the Series A Preferred Stock are adjusted pursuant to the DRD
Formula and/or Additional DRD Dividends are to be paid, the
Corporation shall cause notice of each such adjustment and, if
applicable, any Additional DRD Dividends to be sent to the holders of
record of the Series A Preferred Stock as they appear in the stock
register of the Corporation.

Section 3. Optional Redemption. (a) At any time or from time
to time, on or after December 31, 2001, the Series A Preferred Stock
may be redeemed at the option of the Corporation, in whole or in part,
out of funds legally available therefor, at a redemption price equal
to $50.00 per share plus an amount equal to accrued and unpaid
dividends (whether or not declared) to but excluding the date fixed
for redemption including any changes in dividends payable due to
changes in the annual dividend rate or Dividends Received Percentage,
and Additional DRD dividends, if any. In addition to any restrictions
or limitations

3
<PAGE> 11
contained in the Certificate of Incorporation, if any, if full
cumulative dividends on the Series A Preferred Stock for all past
dividend periods have not been paid or declared and set apart for
payment, the Series A Preferred Stock may be redeemed only in full
(but not in party) by the Corporation pursuant to this paragraph (a)
and the Corporation shall not purchase or acquire any shares of Series
A Preferred Stock other than pursuant to Section 4 hereof or pursuant
to a purchase or exchange offer made on the same terms to all holders
of the Series A Preferred Stock. If fewer than all the outstanding
shares of Series A Preferred Stock are to be redeemed, the Corporation
will select those to be redeemed pro rata, by lot or by a
substantially equivalent method.

(b) If the Dividends Received Percentage is equal to or less
than 40% and, as a result, the amount of dividends on the Series A
Preferred Stock payable on any Dividend Payment Date will be or is
adjusted upwards as provided in Section 2, the Corporation, at its
option, may redeem all, but not less than all, of the outstanding
shares of the Series A Preferred Stock, out of funds legally available
therefor, provided that within 60 days of the date on which an
amendment to the Code is enacted which reduces the Dividends Received
Percentage to 40% or less, the Corporation gives notice of redemption
as provided in paragraph (d) of this Section 3 to all holders of
record of the Series A Preferred Stock. A redemption of the Series A
Preferred Stock in accordance with this paragraph (b) shall be at the
applicable redemption price set forth in the following table, in each
case plus an amount equal to accrued and unpaid dividends (whether or
not declared) thereon to but excluding the date fixed for redemption,
including any changes in dividends payable due to changes in the
annual dividend rate or Dividends Received Percentage, and Additional
DRD Dividends, if any:

<TABLE>
<CAPTION>
Redemption
Price Per
Redemption Period Share
----------------- ----------
<S> <C>
November 18, 1996 to December 30, 1997 . . . . . . . . $52.50
December 31, 1997 to December 30, 1998 . . . . . . . . 52.00
December 31, 1998 to December 30, 1999 . . . . . . . . 51.50
December 31, 1999 to December 30, 2000 . . . . . . . . 51.00
December 31, 2000 to December 30, 2001 . . . . . . . . 50.50
December 31, 2001 and thereafter . . . . . . . . . . . 50.00
</TABLE>

(c) If at any time fewer than 600,000 shares of Series A
Preferred Stock remain outstanding, the Corporation, at its option,
may redeem all, but not less than all, of the outstanding Series A
Preferred Stock. A redemption of the Series A Preferred Stock in
accordance with this paragraph (c) shall be at the applicable
redemption price set forth in the following table, in each case plus
an amount equal to accrued but unpaid dividends (whether or not
declared) thereon to but excluding the date fixed for redemption,
including any changes in dividends payable due to changes in the
annual dividend rate or the Dividends Received Percentage, and
Additional DRD Dividends, if any:

<TABLE>
<CAPTION>
Redemption
Price Per
Redemption Period Share
----------------- ----------
<S> <C>
November 18, 1996 to December 30, 1997 . . . . . . . $52.50
December 31, 1997 to December 30, 1998 . . . . . . . $52.00
December 31, 1998 to December 30, 1999 . . . . . . . $51.50
December 31, 1999 to December 30, 2000 . . . . . . . $51.00
December 31, 2000 to December 30, 2001 . . . . . . . $50.50
December 31, 2001 and thereafter . . . . . . . . . . $50.00
</TABLE>

(d) Notice of redemption pursuant to paragraph (a), (b) or (c)
of this Section 3 will be given by mail, (i) not less than 30 days
prior to the date fixed for redemption thereof in the case of
paragraph (a) and (ii) not less than 30 nor more than 60 days prior to
the date fixed for redemption thereof, in the case of paragraphs (b)
and (c), in each case to each record holder of the shares of Series A
Preferred Stock to be redeemed at the address of such holder in the
stock register of the Corporation. If a notice of redemption has been
given, from and after the specified redemption date (unless the
Corporation defaults in making

4
<PAGE> 12
payment of the redemption price), dividends on the Series A Preferred
Stock so called for redemption will cease to accrue, such shares will
no longer be deemed to be outstanding, and all rights of the holders
thereof as stockholders of the Corporation (except the right to
receive the redemption price will cease. Subject to applicable escheat
and similar abandoned property laws, any moneys set aside by the
Corporation for such redemption and unclaimed at the end of six months
from the redemption date shall revert to the general funds of the
Corporation, after which reversion the holders of such shares so
called for redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such
redemption. Any interest accrued on funds so deposited shall be paid
to the Corporation from time to time.

Section 4. Mandatory Redemption. Subject to the rights of the
holders of any class or series of stock ranking prior to the Series A
Preferred Stock, upon the occurrence of a Mandatory Redemption Event,
the Corporation shall redeem out of funds legally available therefor
all of the outstanding shares of Series A Preferred Stock on a date
(the "Mandatory Redemption Date") not more than 60 days after the date
of such Mandatory Redemption Event a redemption price of $50.50 per
share plus an amount equal to accrued and unpaid dividends (whether or
not declared) thereon to but excluding the Mandatory Redemption Date,
including any changes and dividends payable due to changes in the
annual dividend rate or Dividends Received Percentage, and Additional
DRD Dividends, if any.

A "Mandatory Redemption Event" shall mean the earliest to
occur of the following events:

(i) the Transaction (as defined below) shall have
been voted upon by the stockholders of the Corporation and
shall not have been approved at the special meeting of Tenneco
stockholders presently scheduled to be held on December 10,
1996 for the purpose of considering and voting upon the
Transaction such meeting have been finally adjourned): (ii) the
Transaction shall not have been approved by the requisite vote
of the stockholders of the Corporation entitled to vote thereon
on or prior to March 31, 1997; or (iii) the Corporation shall
not have accepted on or prior to March 31, 1997 any
indebtedness of the Corporation and its subsidiaries tendered
to it pursuant to the cash tender offers made by it pursuant to
the Transaction.

"Transaction" means the reorganization of the Corporation
pursuant to which (i) the Corporation and its subsidiaries will,
pursuant to a Distribution Agreement dated as of November 1, 1996 (as
such may be amended, supplemented or modified from time to time) among
the Corporation, New Tenneco Inc., a newly formed wholly-owned
subsidiary of the Corporation ("New Tenneco"), and Newport News
Shipbuilding Inc., a wholly-owned subsidiary of the Corporation
("Newport News"), undertake various intercompany transfers and
distributions designed to restructure, divide and separate their
various businesses and assets so that all of the assets, liabilities
and operations of (A) their automotive parts, packaging and
administrative services businesses ("Industrial Business") are owned
and operated by New Tenneco, and (B) their shipbuilding business
("Shipbuilding Business") are owned and operated by Newport News; (ii)
the Corporation will then distribute pro rata to holders of the common
stock of the Corporation all of the outstanding common stock of New
Tenneco and Newport News; and (iii) thereafter a subsidiary of El Paso
will merge with and into the Corporation, which will then consists of
the remaining existing and discontinued operations of the Corporation
and its subsidiaries other than those relating to the Industrial
Business or the Shipbuilding Business, including the transmission and
marketing of natural gas, pursuant to the Merger Agreement.

Notice of redemption pursuant to this Section 4 will be given
by mail, not less than 30 nor more than 60 days prior to the Mandatory
Redemption Date to each record holder of shares of Series A Preferred
Stock at the address of such holder in the stock register of the
Corporation. If a notice of redemption has been given, from and after
the Mandatory Redemption Date (unless the Corporation defaults in
making payment of the redemption price), dividends on the Series A
Preferred Stock will cease to accrue, such shares will no longer be
deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive the
redemption price) will cease. Subject to applicable escheat and
similar abandoned property laws, and moneys set aside by the
Corporation for such redemption and unclaimed at the end six months
from the Mandatory Redemption Date shall revert to the general funds

5
<PAGE> 13
of the Corporation, after which reversion the holders of such shares
so called for redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such
redemption. Any interest accrued on funds so deposited shall be paid
to the Corporation from time to time.

Section 5. Voting. The Series A Preferred Stock shall not have
any voting rights except as required by law or the Certificate of
Incorporation, or as hereinafter set forth:

(a) Each share of Series A Preferred Stock shall
entitle the holder thereof to one vote on all matters
submitted to a vote of the holders of Series A Preferred
Stock.

(b) The holders of Series A Preferred Stock, voting
as separate series from all other series of Junior Preferred
Stock and classes of capital stock, shall be entitled, at each
annual meeting of stockholders of the Corporation, to elect a
number of directors of the Corporation equivalent to the
smallest number representing at least one-sixth of the number
of members of the Board of Directors as if there were no
vacancies or unfilled newly created directorships on such
Board, without giving effect to any directorships created or
directors elected pursuant to paragraph (c) below. Any
director so elected shall hold office until the next annual
meeting and until his or her successor shall be elected and
qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. So long
as any shares of Series A Preferred Stock are outstanding, the
number of members of the Board of Directors of the Corporation
(as if there were no vacancies or unfilled newly created
directorships on such Board, without giving effect to any
directorships created or directors elected pursuant to
paragraph (c) below) shall be set at an integral multiple of
six.

A director elected pursuant to the terms of this
paragraph (b) may be removed without cause only by the holders
of a majority in voting power of the outstanding Series A
Preferred Stock.

At such time as all shares of the Series A Preferred
Stock shall cease to be outstanding, the term of office of any
director elected pursuant to this paragraph (b), or his or her
successor, shall automatically terminate.

(c) Whenever, at any time or times, dividends payable
on the Series A Preferred Stock shall be in arrears for
dividend periods, whether or not consecutive, containing in
the aggregate a number days equivalent to six calendar
quarters, the holders of outstanding Series A Preferred Stock
shall have the exclusive right, in addition to the rights
under (b) above, voting as a separate series from all other
series of Junior Preferred Stock and classes of capital stock
of the Corporation, at each meeting of the stockholders held
for the purpose of electing directors, to elect two directors
of the Corporation, until such time as all dividends
accumulated on the Series A Preferred Stock and in arrears
shall have been paid in full or declared and set apart for
payment, at which time the right of the holders of the Series
A Preferred Stock to vote pursuant to the provisions of this
paragraph (c) shall terminate, subject to revesting in the
event of each and every subsequent default of the character
and for the time above mentioned.

At any time when voting rights shall, pursuant to the
provisions of this paragraph (c), be vested in the Series A
Preferred Stock, the number of directors of the Corporation
shall be automatically increased, to the extent necessary, so
that two directors may be elected by the holders of the Series
A Preferred Stock and a proper officer of the Corporation
shall, upon the written request of the holders of record of at
least ten percent in aggregate liquidation value of the Series
A Preferred Stock then outstanding, addressed to the Secretary
of the Corporation, call a special meeting of holders of the
Series A preferred Stock. Such meeting shall be held at the
earliest practicable date but in no event shall a special
meeting be held if the annual meeting of the stock holders of
the Corporation is to be held within 90 days of the receipt by
the Secretary of the Corporation of such request. If such
meeting shall not be called by the proper officer of the
Corporation as required within 20 days after personal service
of the said written request upon the Secretary of the
Corporation, or within 20 days after mailing the same within
the United States of America by certified or registered mail,
return receipt requested,

6
<PAGE> 14
addressed to the Secretary of the Corporation at its principal
office (such mailing to be evidenced by the registry receipt
issued by the postal authorities), then the holders of record
of at least ten percent of the aggregate liquidation value of
the Series A preferred Stock then outstanding may designate in
writing one of their number to call such meeting, and such
meeting may be called by such person designated upon the
notice required for annual meetings of stockholders but in no
event shall a special meeting be held if the annual meeting of
stockholders of the Corporation is to be held within 90 days
of the receipt by the Secretary of the Corporation of such
request. Any holder of the Series A Preferred Stock so
designated shall have access to the stock books of the
Corporation for the purpose of causing a meeting of
stockholders to be called pursuant to these provisions.

Upon any termination of the right of the holder of
the Series A Preferred Stock to vote for directors as a class
as described in this paragraph (c), the term of office of the
directors so elected as described in this paragraph (c) shall
automatically terminate and the number of directors shall be
reduced accordingly.

(d) At any meeting so called pursuant to paragraph (c)
above, and at any other meeting of stockholders held for the
purpose of electing directors at which the holders of the
Series A Preferred Stock shall have the right to elect
directors as provided in paragraph (b) or paragraph (c) above,
the presence in person or by proxy of a majority in voting
power of the outstanding shares of the Series A Preferred
Stock, shall be required to constitute a quorum thereof for the
election of any director by the holders of the Series A
Preferred Stock.

At any such meeting or adjournment thereof, (x) the
absence of the required quorum of the Series A Preferred Stock
shall not prevent the election of directors other than those to
be elected by the Series A Preferred Stock and the absence of a
quorum for the election of such other directors shall not
prevent the election of the directors to be elected by the
Series A Preferred Stock, and (y) in the absence of either or
both such quorums, a majority in voting power of the holders
present in person or by proxy of the stock or stocks which lack
a quorum shall have power to adjourn the meeting, subject to
applicable law, for the election of directors which they are
entitled to elect from time to time without notice other than
announcement at the meeting until a quorum shall be present.

(e) If by reason of any resignation, retirement,
disqualification, death or removal there are not in office all
such directors that the holders of the Series A Preferred
Stock are entitled to elect pursuant to paragraph (c), then
any such vacancy shall be filled only by the remaining
director or directors elected by such holders or, only in the
event there is no such remaining director, by the holders of
the Series A Preferred Stock entitled to vote thereon. If by
reason of any resignation, retirement, disqualification, death
or removal there are not in office all such directors that the
holders of the Series A Preferred Stock are entitled to elect
pursuant to paragraph (b), then any such vacancy shall be
filled only by a majority of the remaining directors elected
by such holders or, in the event there are no such remaining
directors, by the majority vote of the remaining directors
then constituting the Board of Directors.

Promptly after the right of the holders of the Series
A Preferred Stock to fill any vacancy as set forth in the
first sentence of the immediately preceding paragraph arises,
the Board of Directors may cause a special meeting of the
holders of Series A Preferred Stock entitled to vote thereon,
to be held for the purpose of filling such vacancy and such
vacancy shall be filled at any such special meeting. Such
meeting shall be held at the earliest practicable date, but in
no event shall a special meeting be held if the annual meeting
of stockholders of the Corporation is to be held within 90
days of the occurrence of such vacancy.

Notwithstanding the immediately preceding paragraph,
at any time after the right of the holders of the Series A
Preferred Stock to fill any vacancy as set forth above in the
first sentence of the first paragraph of this paragraph (e)
arises, a proper officer of the Corporation shall, upon the
written request of the holders of record of at least ten
percent in aggregate liquidation value of the Series A
Preferred Stock then outstanding, addressed to the Secretary
of the Corporation, call a special meeting of holders

7
<PAGE> 15
of the Series A Preferred Stock. Such meeting shall be held at
the earliest practicable date but in no event shall a special
meeting be held if the annual meeting stockholders of the
Corporation is to be held within 90 days of the occurrence of
such vacancy. If such meeting shall not be called by the proper
officer of the Corporation as required within 20 days after
personal service of the said written request upon the Secretary
of the Corporation, or within 20 days after mailing the same
within the United States of America by registered mail
addressed to the Secretary of the Corporation as its principal
office (such mailing to be evidenced by the registry receipt
issued by the postal authorities), then the holders of record
of at least ten percent of the aggregate liquidation value of
the Series A Preferred Stock then outstanding may designate in
writing one of their number to call such meeting, and such
meeting may be called by such person designated upon the notice
required for annual meetings of stockholders and shall be held
at the place at which the last preceding annual meeting of the
stockholders of the Corporation was held. Any holder of the
Series A Preferred Stock so designated shall have access to the
stock books of the Corporation for the purpose of causing a
meeting of stockholders to be called pursuant to these
provisions.

(f) In addition to any other vote or consent of
stockholders required by law or the Certificate of
Incorporation, if any, so long as any shares of Series A
Preferred Stock are outstanding, the Corporation shall not,
without the consent of the holders of at least a majority in
voting power of the outstanding shares of Series A Preferred
Stock, given in person or by proxy, either in writing or by
vote at annual meeting or a special meeting called for that
purpose:

(A) issue any additional shares of Series A
Preferred Stock (other than the 6,000,000 shares of
Series A Preferred Stock authorized hereby), or issue
any shares of any class or series of stock ranking
prior to or on parity with the Series A Preferred
Stock as to the payment of dividends or as to the
distribution of assets on liquidation, dissolution or
winding up:

(B) issue any obligations or security
convertible into share of stock ranking prior to or
on parity with the Series A Preferred Stock as to the
payment of dividends or as the distribution of assets
on liquidation, dissolution or winding up; or

(C) amend the Certificate of Incorporation or
the Certificate of Designation if the amendment would
alter or change the powers, preferences or special
rights of the shares of Series A Preferred Stock so
as to affect such shares adversely.

Section 6. Restrictions or Dividends and Stock Repurchase.
Subject to any additional restrictions or limitations contained in the
Certificate of Incorporation, if any, so long as any shares of Series
A Preferred Stock remain outstanding, unless full cumulative dividends
on the outstanding shares of Series A Preferred Stock for all past
dividend periods have been paid, or declared and set apart for
payment, and the Corporation shall not be in default with respect to
its obligations under Section 4 hereof, dividends may not be paid or
declared and other distributions may not be made upon any class or
series of stock of the Corporation ranking junior to or on a parity
with the Series A Preferred Stock as to dividends or rights upon
dissolution, liquidation or winding up the Corporation nor may any
such class or series of stock of the Corporation be purchased,
retired or otherwise acquired by the Corporation, in either case
without consent, given in person or by proxy, either in writing or by
vote at any annual meeting or as a special meeting called for that
purpose, of the holders of at least a majority in voting power of the
outstanding shares of Series A Preferred Stock present in person or by
proxy at such meeting, provided that quorum, consisting of at least a
majority in voting power of the then outstanding shares of Series A
Preferred Stock is present; provided, however, that, notwithstanding
the foregoing provisions of this Section 6 (but subject to any
restrictions or limitations to the contrary contained in the
Certificate of Incorporation), the Corporation may any time redeem,
purchase or acquire, out of funds legally available therefor, shares
of stock ranking junior to or on a parity with the Series A Preferred
Stock as to dividends and rights upon liquidation, dissolution and
winding up of the Corporation in exchange for, or out of net cash
proceeds from a substantially concurrent sale of, other shares of any
stock of the Corporation ranking junior to the Series A Preferred
Stock as to dividends and rights upon liquidation, dissolution and
winding up.

8
<PAGE> 16
Section 7. Ranking. (a) Any class or series of stock of the Corporation
shall be deemed to rank:

(i) prior to the Series A Preferred Stock as to the payment of
dividends or as to distributions of assets upon liquidation, dissolution or
winding up, as the case may be, if the holders of such class or series
shall be entitled to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of Series A Preferred Stock:

(ii) on a parity with the Series A Preferred Stock as to the payment of
dividends, whether or not the dividend rates or dividend payment dates
thereof be different from those of the Series A Preferred Stock, if the
holders of such class or series of stock and the holders of the Series A
Preferred Stock shall be entitled to the receipt of dividends in
proportion to their respective amounts of accrued and unpaid dividends
per share, without preference or priority one over the other, and on a
parity with the Series A Preferred Stock as to the distribution of assets
upon liquidation, dissolution or winding up, whether or not the
liquidation prices per share thereof be different from those of the Series
A Preferred Stock, if the holders of such class or series of stock and the
holders of the Series A Preferred Stock shall be entitled to the receipt
of amounts distributable upon liquidation, dissolution or winding up
in proportion to their respective liquidation preferences, without
preference or priority one over the other: and

(iii) junior to the Series A Preferred Stock as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, as the case may be, if the holders of Series A Preferred
Stock shall be entitled to receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of shares of such class or series.

(b) Except for the Common Stock, par value $5.00 per share, of the
Corporation (as such may be constituted from time to time, the "Common Stock")
and the Series A Participating Junior Preferred Stock, without par value, of
the Corporation (the "Participating Junior Preferred Stock"), each other class
and series of stock of the Corporation existing on the date of the adoption of
this Certificate shall be deemed to rank prior to the Series A Preferred Stock
both as to the payment of dividends and as to the distribution of assets upon
liquidation, dissolution or winding up. The Common Stock and the Participating
Junior Preferred Stock shall be deemed to rank junior to the Series A Preferred
Stock both as to the payment of dividends and as to the distribution of assets
upon liquidation, dissolution or winding up.

Section 8. Liquidation Rights. (a) The amount that the holders of
Series A Preferred Stock shall be entitled to receive in the event of any
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary (collectively, a "Liquidation"), shall be
$50.00 per share, plus an amount equal to all accrued and unpaid dividends to
the date of Liquidation including any changes in dividends payable due to
changes in the annual dividend rate of Dividends Received Percentage, and
Additional DRD Dividends, if any, and no more. After such amount is paid in
full, no further distributions or payments shall be made in respect of shares
of Series A Preferred Stock, such shares of Series A Preferred Stock shall no
longer be deemed to be outstanding or be entitled to any powers, preferences,
rights or privileges, including voting rights, and such shares of Series A
Preferred Stock shall be surrendered for cancellation to the Corporation.

(b) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, then before any distribution or payment shall be
made to the holders of any class or series of stock of the Corporation ranking
junior to the Series A Preferred Stock, the holders of the Series A Preferred
Stock (subject to the rights of the holders of any stock ranking prior to the
Series A Preferred Stock as to the rights on liquidation, dissolution and
winding up) shall be entitled to be paid in full the amounts set forth in
paragraph (a) of this Section 8. After such payment shall have been made in
full to the holders of the Series A Preferred Stock, the remaining assets and
funds of the Corporation shall be distributed among the holders of the stock of
the Corporation ranking junior in respect thereof to the Series A Preferred
Stock according to their respective rights. In the event that the assets of
the Corporation available for distribution to holders

9
<PAGE> 17
of Series A Preferred Stock shall not be sufficient to make the
payment herein required to be made in full and to pay in full the
liquidation preference on all other shares of stock of the Corporation
ranking on a parity with the Series A Preferred Stock as to amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, such assets shall be distributed to the holders of the
respective shares of Series A Preferred Stock and any such other
parity stock pro rata in proportion to the full amounts payable upon
the shares of Series A Preferred Stock and any such other parity stock
if all amounts payable thereon were paid in full.

Section 9. Maturity. Unless otherwise redeemed as provided herein,
the term of the Series A Preferred Stock shall be perpetual.

IN WITNESS WHEREOF, said Tenneco Inc. has caused this Certificate to
be signed by Karl A. Stewart, as Vice President and Secretary, this 18th day of
November 1996.

TENNECO INC.

By:/s/ Karl A. Stewart
------------------
Name: Karl A. Stewart
Title: Vice President and
Secretary

<PAGE> 18

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
TENNECO INC.

TENNECO INC., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the "Company"), DOES
HEREBY CERTIFY:

FIRST: That at a meeting of the Board of Directors of the Company
resolutions were adopted setting forth proposed amendments to the Certificate
of Incorporation of said Company, as amended as of such date (the "Certificate
of Incorporation"), declaring said amendments to be advisable and directing
that the amendments be considered at a spcial meeting of the stockholders of
the Company. The resolution setting forth the proposed amendments is as
follows:

RESOLVED, that the Board of Directors of the Company
hereby approves and declares it advisable that the Certificate of
Incorporation of the Company be amended (the "Amendment") by (i)
deleting Subsection 1 of Part II of Article FOURTH thereof in it
entirety and inserting the paragraph set forth below in lieu therof,
(ii) deleting Subsections 2, 3 and 4 of Part II of Article FOURTH
thereof in their entirety, and (iii) renumbering Subsection 5 of Part
II of Article FOURTH thereof as Subsection 2:

"1. The Board of Directors of the corporation is hereby
expressly authorized, by resolution or resolutions thereof, to
provide, out of the unissued shares of Junior Preferred Stock, for
series of Junior Preferred Stock and, with respect to each such
series, to fix the number of shares constituting such series and the
designation of such series, the voting powers (if any) of the shares
of such series,and preferences and relative, participating, optional
or other special rights, if any, and any qualifications, limitations
or restrictions, thereof, of the shares of such series. The powers,
preferences and relative, participating, optional and other special
rights of each series of Junior Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding."

SECOND: That thereafter, pursuant to the resolution of its Board of
Directors, (i) a special meeting of the stockholders of the Company was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware (the "DGCL"), at which meeting holders
of a majority of the outstanding stock entitled to vote thereon (except for the
holders of the Company's outstanding Junior Preferred Stock), as required by
the DGCL and the Certificate of Incorporation, voted in favor of the amendment
and (ii) the holders of the shares of the Company's outstanding Junior Preferred
Stock unanimously consented, in accordance with Section 228 of the DGCL, to the
adoption of the amendments.

-1-

<PAGE> 19

THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the DGCL.

IN WITNESS WHEREOF, said Tenneco Inc. has caused this Certificate to be
signed by Dana G. Mead, as Chairman and Chief Executive Officer, this 11th day
of December, 1996.

TENNECO INC.

By: /s/ DANA G. MEAD
---------------------
Name: Dana G. Mead
Office: Chairman and Chief Executive Officer

<PAGE> 20
CERTIFICATE OF MERGER

EL PASO MERGER COMPANY

WITH AND INTO

TENNECO INC.

(Under Section 251 of the General
Corporation Law of the State of Delaware)

Tenneco Inc., a Delaware corporation, hereby certifies that:

1. The name and state of incorporation of each of the constituent
corporations is as follows:

(a) El Paso Merger Company, a Delaware corporation ("El
Paso Merger"); and

(b) Tenneco Inc., a Delaware corporation ("Tenneco").

2. The Amended and Restated Agreement and Plan of Merger (the
"Agreement and Plan of Merger"), dated as of June 19, 1996, among Tenneco, El
Paso Natural Gas Company, a Delaware corporation, and El Paso Merger has been
approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with Section 251 (and, with respect to
El Paso Merger, by the written consent of its sole stockholder in accordance
with Section 228) of the General Corporation Law of the State of Delaware.

3. The name of the surviving corporation is Tenneco Inc. (the
"Surviving Corporation"). The name of the Surviving Corporation shall be
amended in the merger to be "El Paso Tennessee Pipeline Co."

4. The Certificate of Incorporation of Tenneco as in effect
immediately prior to the merger shall be amended as set forth in Annex 1 hereto
and, as so amended, shall be the Certificate of Incorporation of the Surviving
Corporation.

5. The executed Agreement and Plan of Merger is on file at the
principal place of business of the Surviving Corporation at 1010 Milam Street,
Houston, Texas 77002.

6. A copy of the Agreement and Plan of Merger will be furnished by
the Surviving Corporation, on request and without cost, to any stockholder of
any constituent corporation.

<PAGE> 21

7. The merger provided for herein shall be effective at 8:00 a.m.
Eastern Standard Time on December 12, 1996.

<PAGE> 22

IN WITNESS WHEREOF, said Tenneco Inc. has caused this Certificate to be
signed as of the 11th day of December, 1996.

TENNECO INC.

By: /s/ KARL A. STEWART
---------------------------------
Name: Karl A. Stewart
Office: Vice President and Secretary

<PAGE> 23
ANNEX 1

Article FIRST is hereby deleted in its entirety and replaced
with the following paragraph:

"FIRST: The name of the corporation is El Paso Tennessee
Pipeline Co."

The first two paragraphs of Article FOURTH are hereby deleted in their
entirety and replaced with the following paragraph:

"The total number of shares of all classes of stock which the
corporation shall be authorized to issue is 20,000,000 shares of Preferred
Stock, par value $.01 per share (herein called "Preferred Stock"), and 100,000
shares of Common Stock, of the par value of $.01 per share (herein called
"Common Stock")."

Part I of Article FOURTH is hereby deleted in its entirety.

Part II of Article FOURTH is hereby amended to read in its entirety as
set forth in the following paragraph:

"I.

1. The Board of Directors of the corporation is hereby
expressly authorized, by resolution or resolutions thereof, to provide, out of
the unissued shares of Preferred Stock, for series of Preferred Stock and, with
respect to each such series, to fix the number of shares constituting such
series and the designation of such series, the voting powers (if any) of the
shares of such series, and the preferences and relative, participating,
optional or other special rights, if any, and any qualifications, limitations or
restrictions thereof, of the shares of such series. The powers, preferences and
relative, participating, optional and other special rights of each series of
Preferred Stock, and the qualifications, limitations, or restrictions thereof,
if any, may differ from those of any and all other series at any time
outstanding.

2. Except as otherwise provided in any resolution of the Board
of Directors providing for the issuance of any particular series of Preferred
Stock, shares of Preferred Stock redeemed or otherwise acquired by the
corporation shall, upon the filing of any required certificates with the
Secretary of State of Delaware, assume the status of authorized but unissued
Preferred Stock and may thereafter, subject to the provisions of this Part I of
Article FOURTH and of any restrictions contained in any resolution of the Board
of Directors providing for the issue of any particular series of Preferred
Stock, be reissued in the same manner as other authorized but unissued
Preferred Stock."

Parts III and IV of Article FOURTH are hereby deleted in their entirety.

<PAGE> 24

Subsection (A) of Article FIFTH is hereby deleted in its entirety and
replace with the following paragraph:

"The number of directors which shall constitute the whole Board
of Directors shall be as determined from time to time by resolution adopted by
the affirmative vote of a majority of the Board of Directors; provided that
until otherwise determined by the Board of Directors in accordance herewith,
the number of directors shall be six (6)."

Subsection (B)(g) of Article FIFTH is hereby amended by deleting the
words "each committee to consist of two or more directors of the corporation"
and the comma immediately following such text.

Articles SEVENTH and NINTH are hereby deleted in their entirety and the
remaining provisions renumbered accordingly.

The Certificates of Designation, Preferences and Rights for the $7.40
Cumulative Preferred Stock, the $4.50 Cumulative Preferred Stock and Series A
Participating Junior Preferred Stock of the corporation filed with the
Secretary of State of Delaware on October 9, 1987, October 9, 1987 and May 25,
1988, respectively, are hereby deleted in their entirety.

The Certificate of Designation, Preferences and Rights for the 8 1/4%
Cumulative Junior Preferred Stock, Series A, filed on November 18, 1996 with
the Secretary of State of Delaware, shall be hereby amended by deleting all
references therein to Junior Preferred Stock and substituting therefor
references to Preferred Stock and renaming the 8 1/4% Cumulative Junior
Preferred Stock, Series A as the "8 1/4% Cumulative Preferred Stock, Series A."

<PAGE> 25

EL PASO TENNESSEE PIPELINE CO.

CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF PREFERRED STOCK
BY RESOLUTION OF THE BOARD OF DIRECTORS
PROVIDING FOR AN ISSUE OF 3,036,600
SHARES OF PREFERRED STOCK DESIGNATED
"8 1/2% CUMULATIVE JUNIOR PREFERRED STOCK, SERIES B"
------------------------

I, Stacy J. James, Secretary of El Paso Tennessee Pipeline Co. (hereinafter
referred to as the "Corporation"), a corporation organized and existing under
the General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 151 thereof, DO HEREBY CERTIFY:

That pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation of said Corporation, as amended, the Board of
Directors, by unanimous written consent, pursuant to Section 141(f) of the
General Corporation Law of the State of Delaware, dated as of March 5, 1997,
adopted a resolution providing for the issuance of a series of Preferred Stock,
to be designated "8 1/2% Cumulative Junior Preferred Stock, Series B", which
resolution is as follows:

RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation by the Certificate of Incorporation of the Corporation, as
amended (as such may be further amended from time to time, the "Certificate of
Incorporation"), a series of Preferred Stock, par value $0.01 per share, of the
Corporation (the "Preferred Stock") be, and hereby is, created to be designated
"8 1/2% Cumulative Junior Preferred Stock, Series B" (hereinafter referred to as
the "Series B Preferred Stock"), consisting of 3,036,600 shares, and the
designations, powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions of the Series B Preferred Stock are
hereby fixed and stated to be as follows (all terms used herein that are defined
in the Certificate of Incorporation shall be deemed to have the meanings
provided therein):

SECTION 1. Dividends. (a) The dividend rate on the Series B Preferred Stock
shall be 8 1/2% of $50 per share of Series B Preferred Stock per annum.
Dividends on shares of the Series B Preferred Stock shall accrue, whether or not
declared, on a daily basis from the date of issuance of such shares. Accrued but
unpaid dividends shall not bear interest.

(b) Dividends on the Series B Preferred Stock shall be payable, when, as
and if declared by the Board of Directors of the Corporation out of assets
legally available therefor, annually on the last day of December in each year
(each, a "Dividend Payment Date"), with the first dividend payment date being
the next Dividend Payment Date following the date of issuance. Dividends on each
Dividend Payment Date will be payable to holders of record of the Series B
Preferred Stock as they appear on the stock books of the Corporation on a record
date, not more than 60 days preceding such Dividend Payment Date, fixed for such
purpose by the Board of Directors in advance of such Dividend Payment Date.
Dividends payable on the Series B Preferred Stock for any period shorter than a
year shall be computed on the basis of a 360-day year of twelve 30-day months.
The Series B Preferred Stock shall rank on a parity with each other series of
Preferred Stock as to the payment of dividends, except to the extent otherwise
provided in Section 5 hereof or in the resolution or resolutions providing for
the issuance of such other series.

SECTION 2. Optional Redemption. (a) At any time or from time to time, on or
after December 31, 2001, the Series B Preferred Stock may be redeemed at the
option of the Corporation, in whole or in part, out of funds legally available
therefor, at a redemption price equal to $50.00 per share plus an amount equal
to accrued and unpaid dividends (whether or not declared) to but excluding the
date fixed for redemption. In addition to any restrictions or limitations
contained in the Certificate of Incorporation, if any, if full cumulative
dividends on the Series B Preferred Stock for all past dividend periods have not
been paid or declared and set apart for payment, the Series B Preferred Stock
may be redeemed only in full (but not in part) by the Corporation pursuant to
this paragraph (a) and the Corporation shall not purchase or acquire any shares
of Series B Preferred Stock other than pursuant to a purchase or exchange offer
made on the same terms to all holders of the Series B Preferred Stock. If fewer
than all the outstanding shares of Series B Preferred Stock
<PAGE> 26

are to be redeemed, the Corporation will select those to be redeemed pro rata,
by lot or by a substantially equivalent method.

(b) Notice of redemption pursuant to paragraph (a) of this Section 2 will
be given by mail, not less than 30 days prior to the date fixed for redemption
thereof, to each record holder of the shares of Series B Preferred Stock to be
redeemed at the address of such holder in the stock register of the Corporation.
If a notice of redemption has been given, from and after the specified
redemption date (unless the Corporation defaults in making payment of the
redemption price), dividends on the Series B Preferred Stock so called for
redemption will cease to accrue, such shares will no longer be deemed to be
outstanding, and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive the redemption price) will cease.
Subject to applicable escheat and similar abandoned property laws, any moneys
set aside by the Corporation for such redemption and unclaimed at the end of six
months from the redemption date shall revert to the general funds of the
Corporation, after which reversion the holders of such shares so called for
redemption shall look only to the general funds of the Corporation for the
payment of the amounts payable upon such redemption. Any interest accrued on
funds so deposited shall be paid to the Corporation from time to time.

SECTION 3. Voting. The Series B Preferred Stock shall not have any voting
rights except as required by law or the Certificate of Incorporation, or as
hereinafter set forth:

(a) Whenever, at any time or times, dividends payable on the Series B
Preferred Stock shall be in arrears for dividend periods, whether or not
consecutive, containing in the aggregate a number of days equivalent to six
calendar quarters, the holders of outstanding Series B Preferred Stock
shall have the exclusive right, voting as a separate series from all other
series of Preferred Stock and classes of capital stock of the Corporation,
at each meeting of the stockholders held for the purpose of electing
directors, to elect two directors of the Corporation, until such time as
all dividends accumulated on the Series B Preferred Stock and in arrears
shall have been paid in full or declared and set apart for payment, at
which time the right of the holders of the Series B Preferred Stock to vote
pursuant to the provisions of this paragraph (a) shall terminate, subject
to revesting in the event of each and every subsequent default of the
character and for the time above mentioned.

At any time when voting rights shall, pursuant to the provisions of
this paragraph (a), be vested in the Series B Preferred Stock, the number
of directors of the Corporation shall be automatically increased, to the
extent necessary, so that two directors may be elected by the holders of
the Series B Preferred Stock and a proper officer of the Corporation shall,
upon the written request of the holders of record of at least ten percent
in aggregate liquidation value of the Series B Preferred Stock then
outstanding, addressed to the Secretary of the Corporation, call a special
meeting of holders of the Series B Preferred Stock. Such meeting shall be
held at the earliest practicable date but in no event shall a special
meeting be held if the annual meeting of stockholders of the Corporation is
to be held within 90 days of the receipt by the Secretary of the
Corporation of such request. If such meeting shall not be called by the
proper officer of the Corporation as required within 20 days after personal
service of the said written request upon the Secretary of the Corporation,
or within 20 days after mailing the same within the United States of
America by certified or registered mail, return receipt requested,
addressed to the Secretary of the Corporation at its principal office (such
mailing to be evidenced by the registry receipt issued by the postal
authorities), then the holders of record of at least ten percent in
aggregate liquidation value of the Series B Preferred Stock then
outstanding may designate in writing one of their number to call such
meeting, and such meeting may be called by such person designated upon the
notice required for annual meetings of stockholders but in no event shall a
special meeting be held if the annual meeting of stockholders of the
Corporation is to be held within 90 days of the receipt by the Secretary of
the Corporation of such request. Any holder of the Series B Preferred Stock
so designated shall have access to the stock books of the Corporation for
the purpose of causing a meeting of stockholders to be called pursuant to
these provisions.

Upon any termination of the right of the holders of the Series B
Preferred Stock to vote for directors as a class as described in this
paragraph (a), the term of office of the directors so elected as described
in

2
<PAGE> 27

this paragraph (a) shall automatically terminate and the number of
directors shall be reduced accordingly.

(b) At any meeting so called pursuant to paragraph (a) above, and at
any other meeting of stockholders held for the purpose of electing
directors at which the holders of the Series B Preferred Stock shall have
the right to elect directors as provided in paragraph (a) above, the
presence in person or by proxy of a majority in voting power of the
outstanding shares of the Series B Preferred Stock shall be required to
constitute a quorum thereof for the election of any director by the holders
of the Series B Preferred Stock.

At any such meeting or adjournment thereof, (x) the absence of the
required quorum of the Series B Preferred Stock shall not prevent the
election of directors other than those to be elected by the Series B
Preferred Stock and the absence of a quorum for the election of such other
directors shall not prevent the election of the directors to be elected by
the Series B Preferred Stock, and (y) in the absence of the required quorum
of the Series B Preferred Stock, a majority in voting power of the holders
of Series B Preferred Stock present in person or by proxy shall have power
to adjourn the meeting, subject to applicable law, but only with respect to
the election of directors which they are entitled to elect from time to
time without notice other than announcement at the meeting until a quorum
shall be present.

(c) If by reason of any resignation, retirement, disqualification,
death or removal there are not in office all such directors that the
holders of the Series B Preferred Stock are entitled to elect pursuant to
paragraph (a) above, then any such vacancy shall be filled only by the
remaining director elected by such holders or, only in the event there is
no such remaining director, by the holders of the Series B Preferred Stock
entitled to vote thereon.

Promptly after the right of the holders of the Series B Preferred
Stock to fill any vacancy as set forth in the immediately preceding
paragraph arises, the Board of Directors may cause a special meeting of the
holders of Series B Preferred Stock entitled to vote thereon to be held for
the purpose of filling such vacancy, and such vacancy shall be filled at
any such special meeting. Such meeting shall be held at the earliest
practicable date, but in no event shall a special meeting be held if the
annual meeting of stockholders of the Corporation is to be held within 90
days of the occurrence of such vacancy.

Notwithstanding the immediately preceding paragraph, at any time after
the right of the holders of the Series B Preferred Stock to fill any
vacancy as set forth above in the first paragraph of this paragraph (c)
arises, a proper officer of the Corporation shall, upon the written request
of the holders of record of at least ten percent in aggregate liquidation
value of the Series B Preferred Stock then outstanding, addressed to the
Secretary of the Corporation, call a special meeting of holders of the
Series B Preferred Stock. Such meeting shall be held at the earliest
practicable date but in no event shall a special meeting be held if the
annual meeting of stockholders of the Corporation is to be held within 90
days of the occurrence of such vacancy. If such meeting shall not be called
by the proper officer of the Corporation as required within 20 days after
personal service of the said written request upon the Secretary of the
Corporation, or within 20 days after mailing the same within the United
States of America by registered mail addressed to the Secretary of the
Corporation at its principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the holders of
record of at least ten percent in aggregate liquidation value of the Series
B Preferred Stock then outstanding may designate in writing one of their
number to call such meeting, and such meeting may be called by such person
designated upon the notice required for annual meetings of stockholders and
shall be held at the place at which the last preceding annual meeting of
the stockholders of the Corporation was held. Any holder of the Series B
Preferred Stock so designated shall have access to the stock books of the
Corporation for the purpose of causing a meeting of stockholders to be
called pursuant to these provisions.

SECTION 4. Restrictions on Dividends and Stock Repurchases. Subject to any
additional restrictions or limitations contained in the Certificate of
Incorporation, if any, so long as any shares of Series B Preferred Stock remain
outstanding, unless full cumulative dividends on the outstanding shares of
Series B Preferred Stock for all past dividend periods have been paid, or
declared and set apart for payment, dividends may not be

3
<PAGE> 28

paid or declared and other distributions may not be made upon any class or
series of stock of the Corporation ranking junior to or on a parity with the
Series B Preferred Stock as to dividends or rights upon dissolution, liquidation
or winding up of the Corporation nor may any such class or series of stock of
the Corporation be redeemed, purchased, retired or otherwise acquired by the
Corporation, in either case without the consent, given in person or by proxy,
either in writing or by vote at any annual meeting or at a special meeting
called for that purpose, of the holders of at least a majority in voting power
of the outstanding shares of Series B Preferred Stock present in person or by
proxy at such meeting, provided that a quorum, consisting of at least a majority
in voting power of the then outstanding shares of Series B Preferred Stock is
present; provided, however, that, notwithstanding the foregoing provisions of
this Section 4 (but subject to any restrictions or limitations to the contrary
contained in the Certificate of Incorporation), the Corporation may at any time
redeem, purchase or acquire, out of funds legally available therefor, shares of
stock ranking junior to or on a parity with the Series B Preferred Stock as to
dividends and rights upon liquidation, dissolution and winding up of the
Corporation in exchange for, or out of net cash proceeds from a substantially
concurrent sale of, other shares of any stock of the Corporation ranking junior
to the Series B Preferred Stock as to dividends and rights upon liquidation,
dissolution and winding up.

SECTION 5. Ranking. (a) Any class or series of stock of the Corporation
shall be deemed to rank:

(i) prior to the Series B Preferred Stock as to the payment of
dividends or as to distributions of assets upon liquidation, dissolution or
winding up, as the case may be, if the holders of such class or series
shall be entitled to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of Series B Preferred Stock;

(ii) on a parity with the Series B Preferred Stock as to the payment
of dividends, whether or not the dividend rates or dividend payment dates
thereof be different from those of the Series B Preferred Stock, if the
holders of such class or series of stock and the holders of the Series B
Preferred Stock shall be entitled to the receipt of dividends in proportion
to their respective amounts of accrued and unpaid dividends per share,
without preference or priority one over the other, and on a parity with the
Series B Preferred Stock as to the distribution of assets upon liquidation,
dissolution or winding up, whether or not the liquidation prices per share
thereof be different from those of the Series B Preferred Stock, if the
holders of such class or series of stock and the holders of the Series B
Preferred Stock shall be entitled to the receipt of amounts distributable
upon liquidation, dissolution or winding up in proportion to their
respective liquidation preferences, without preference or priority one over
the other; and

(iii) junior to the Series B Preferred Stock as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, as the case may be, if the holders of Series B Preferred
Stock shall be entitled to receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of shares of such class or series.

(b) Except for the Common Stock, par value $0.01 per share, of the
Corporation (as such may be constituted from time to time, the "Common Stock"),
each other class and series of stock of the Corporation existing on the date of
the adoption of this Certificate shall be deemed to rank prior to the Series B
Preferred Stock both as to the payment of dividends and as to the distribution
of assets upon liquidation, dissolution or winding up. The Common Stock shall be
deemed to rank junior to the Series B Preferred Stock both as to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution or
winding up.

SECTION 6. Liquidation Rights. (a) The amount that the holders of Series B
Preferred Stock shall be entitled to receive in the event of any dissolution,
liquidation or winding up of the affairs of the Corporation, whether voluntary
or involuntary (collectively, a "Liquidation"), shall be $50.00 per share, plus
an amount equal to all accrued and unpaid dividends to the date of Liquidation,
and no more. After such amount is paid in full, no further distributions or
payments shall be made in respect of shares of Series B Preferred Stock, such
shares of Series B Preferred Stock shall no longer be deemed to be outstanding
or be entitled to any powers, preferences, rights or privileges, including any
voting rights, and certificates representing such shares of Series B Preferred
Stock shall be surrendered for cancellation to the Corporation.

4
<PAGE> 29

(b) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, then, before any distribution or payment shall be
made to the holders of any class or series of stock of the Corporation ranking
junior to the Series B Preferred Stock, the holders of the Series B Preferred
Stock (subject to the rights of the holders of any stock ranking prior to the
Series B Preferred Stock as to rights on liquidation, dissolution and winding
up) shall be entitled to be paid in full the amounts set forth in paragraph (a)
of this Section 6. After such payment shall have been made in full to the
holders of the Series B Preferred Stock, the remaining assets and funds of the
Corporation shall be distributed among the holders of the stock of the
Corporation ranking junior in respect thereof to the Series B Preferred Stock
according to their respective rights. In the event that the assets of the
Corporation available for distribution to holders of Series B Preferred Stock
shall not be sufficient to make the payment herein required to be made in full
and to pay in full the liquidation preference on all other shares of stock of
the Corporation ranking on a parity with the Series B Preferred Stock as to
amounts distributable upon dissolution, liquidation or winding up of the
Corporation, such assets shall be distributed to the holders of the respective
shares of Series B Preferred Stock and any such other parity stock pro rata in
proportion to the full amounts payable upon the shares of Series B Preferred
Stock and any such other parity stock if all amounts payable thereon were paid
in full.

SECTION 7. Maturity. Unless otherwise redeemed as provided herein, the term
of the Series B Preferred Stock shall be perpetual.

IN WITNESS WHEREOF, said El Paso Tennessee Pipeline Co. has caused this
Certificate to be signed by Stacy J. James, as Secretary, this 6th day of March,
1997.

EL PASO TENNESSEE PIPELINE CO.

By: /s/ Stacey J. James
----------------------------------
Stacy J. James
Secretary

<PAGE> 1

EXHIBIT 3.3

BY-LAWS

EL PASO TENNESSEE PIPELINE CO.
(FORMERLY TENNECO INC.)
(A DELAWARE CORPORATION)

Effective December 12, 1996
Name Change Effective December 12, 1996
<PAGE> 2
BY-LAWS

EL PASO TENNESSEE PIPELINE CO.
(FORMERLY TENNECO INC.)

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I. OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1 - Registered Office and Agent . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2 - Other Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II. STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1 - Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2 - Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3 - Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4 - Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 5 - Fixing of Record Date for Determining Stockholders . . . . . . . . . . . . . . 2
Section 6 - Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 7 - Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 8 - Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 9 - Inspectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 10 - List of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 11 - Stockholder Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE III. BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1 - Number, Qualification and Term of Office . . . . . . . . . . . . . . . . . . . 5
Section 2 - Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3 - Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4 - Removals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5 - Place of Meetings; Books and Records . . . . . . . . . . . . . . . . . . . . . 6
Section 6 - Annual Meeting of the Board . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 7 - Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 8 - Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 9 - Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 10 - Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 11 - Consent of Directors in Lieu of Meeting . . . . . . . . . . . . . . . . . . . 8
Section 12 - Telephonic Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 13 - Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 14 - Interested Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>

i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV. COMMITTEES OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1 - Executive Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2 - Finance Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3 - Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4 - Compensation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5 - Committee Chairman, Books and Records . . . . . . . . . . . . . . . . . . . . 10
Section 6 - Alternates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7 - Other Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 8 - Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE V. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1 - Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2 - Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3 - Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4 - Removals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5 - Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6 - Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7 - Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 8 - President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9 - Vice Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 10 - Chief Operating Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 11 - Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 12 - Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 13 - General Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 14 - Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 15 - Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 16 - Controller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 17 - Absence or Disability of Officers . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE VI. STOCK CERTIFICATES AND TRANSFER THEREOF . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1 - Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2 - Transfer of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3 - Transfer Agents and Registrars . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4 - Additional Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5 - Lost, Stolen or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . 18

ARTICLE VII. DIVIDENDS, SURPLUS, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

ARTICLE VIII. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

ARTICLE IX. FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

ARTICLE X. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1 - General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2 - Actions by or in the Right of the Corporation . . . . . . . . . . . . . . . . 19
</TABLE>

ii
<PAGE> 4
<TABLE>
<S> <C>
Section 3 - Indemnification in Certain Cases . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4 - Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5 - Advances for Expenses and Costs . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6 - Remedies in Cases of Determination
not to Indemnify or to Advance Expenses . . . . . . . . . . . . . . . . . . . 22
Section 7 - Rights Non-Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8 - Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9 - Surviving of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 10 - Indemnification of Employees and Agents of the Corporation . . . . . . . . . . 23
Section 11 - Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

ARTICLE XI. CHECKS, DRAFTS, BANK ACCOUNTS, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 1 - Checks, Drafts, Etc.; Loans . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2 - Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE XII. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

ARTICLE XIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>

iii
<PAGE> 5
EXHIBIT 3(ii)

BY-LAWS

EL PASO TENNESSEE PIPELINE CO.
(FORMERLY TENNECO INC.)

ARTICLE I

OFFICES

SECTION 1. REGISTERED OFFICE AND AGENT

The registered office of the corporation is located at Corporation Trust
Center, 1209 Orange Street in the City of Wilmington, County of New Castle,
State of Delaware, and the name of its registered agent at such address is The
Corporation Trust Company.

SECTION 2. OTHER OFFICES

The corporation may have offices at such other places both within and
without the State of Delaware as the Board of Directors (the "Board") may from
time to time determine or the business of the corporation may require.

ARTICLE II

STOCKHOLDERS

SECTION 1. ANNUAL MEETINGS

A meeting of the stockholders for the purpose of electing Directors and
for the transaction of such other business as may properly be brought before
the meeting shall be held annually at 5:00 o'clock P.M. on the second Tuesday
in June, or at such other time on such other date as shall be fixed by
resolution of the Board. If the day fixed for the annual meeting shall be a
legal holiday such meeting shall be held on the next succeeding business day.

SECTION 2. SPECIAL MEETINGS

Special meetings of the stockholders for any purpose or purposes may be
called only by a majority of the Board, the Chairman of the Board, the Chief
Executive Officer, the President or the Vice Chairman of the Board.
<PAGE> 6
SECTION 3. PLACE OF MEETINGS

The annual meeting of the stockholders of the corporation shall be held at
the general offices of the corporation in the City of El Paso, State of Texas,
or at such other place in the United States as may be stated in the notice of
the meeting. All other meetings of the stockholders shall be held at such
places within or without the State of Delaware as shall be stated in the notice
of the meeting.

SECTION 4. NOTICE OF MEETINGS

4.1 GIVING OF NOTICE. Except as otherwise provided by statute, written
notice of each meeting of the stockholders, whether annual or special, shall be
given not less than ten nor more than sixty days before the date of the meeting
to each stockholder entitled to vote at such meeting. If mailed, notice shall
be given when deposited in the United States mails, postage prepaid, directed
to such stockholder at his address as it appears in the stock ledger of the
corporation. Each such notice shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called.

4.2 NOTICE OF ADJOURNED MEETINGS. When a meeting is adjourned to another
time and place, notice of the adjourned meeting need not be given if the time
and place thereof are announced at the meeting at which the adjournment is
given. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.

4.3 WAIVER OF NOTICE

4.3.1 Whenever any notice is required to be given to any stockholder
under the provisions of these By-laws, the Certificate of Incorporation or the
general Corporation Law of the State of Delaware, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent to the giving of such
notice.

4.3.2 The attendance of a stockholder at a meeting shall constitute a
waiver of notice of such meeting, except when a stockholder attends a meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.

SECTION 5. FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS

5.1 MEETINGS. For the purpose of determining stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board, and
which record date shall not be more than sixty nor less than ten days before
the date of such meeting. If no record date is fixed by the Board, the record
date for determining stockholders shall be at the close of business on the day
next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on

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which the meeting is held. A determination of stockholders of record entitled
to notice of or to vote at the meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.

5.2 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS. For the purpose of
determining stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted, and which record date shall be not more than sixty
days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board adopts the resolution relating thereto.

SECTION 6. QUORUM

A majority of the outstanding shares of stock of the corporation entitled
to vote, present in person or represented by proxy, shall constitute a quorum
at a meeting of the stockholders; provided that where a separate vote by a
class or classes or by a series of a class is required, a majority of the
outstanding shares of such class or classes or of such series of a class,
present in person or represented by proxy at the meeting, shall constitute a
quorum entitled to take action with respect to the vote on that matter. Shares
of stock will be counted toward a quorum if they are either (i) present in
person at the meeting or (ii) represented at the meeting by a valid proxy,
whether the instrument granting such proxy is marked as casting a vote or
abstaining, is left blank or does not empower such proxy to vote with respect
to some or all matters to be voted upon at the meeting. If less than a
majority of the outstanding shares entitled to vote are represented at a
meeting, a majority of the shares so represented may adjourn the meeting from
time to time without further notice. If a quorum is present or represented at
a reconvened meeting following such an adjournment, any business may be
transacted that might have been transacted at the meeting as originally called.
The stockholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.

SECTION 7. ORGANIZATION

At each meeting of the stockholders, the Chairman of the Board, or in his
absence the Chief Executive Officer, the President or the Vice Chairman of the
Board, or if all of the said officers are absent, a person designated by the
Board, the Chairman of the Board, the Chief Executive Officer, the President or
the Vice Chairman of the Board, or in the absence of such designated person, a
person elected by the holders of a majority in number of shares of stock
present in person or represented by proxy and entitled to vote, shall act as
chairman of the meeting.

The Secretary, or in his absence or in the event he shall be presiding
over the meeting in accordance with the provisions of this Section, an
Assistant Secretary or, in the absence of the

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Secretary and all of the Assistant Secretaries, any person appointed by the
chairman of the meeting, shall act as secretary of the meeting.

SECTION 8. VOTING

8.1 GENERAL PROVISIONS. Unless otherwise provided in the Certificate of
Incorporation or a resolution of the Board creating a series of stock, at each
meeting of the stockholders, each holder of any share of any series or class of
stock entitled to vote at such meeting shall be entitled to one vote for each
share of stock having voting power in respect of each matter upon which a vote
is to be taken, standing in his name on the stock ledger of the corporation on
the record date fixed as provided in these By-laws for determining the
stockholders entitled to vote at such meeting. In all matters other than the
election of Directors, if a quorum is present, the affirmative vote of the
majority of the shares present in person or represented by proxy at the meeting
and entitled to vote on the subject matter shall be the act of the
stockholders, unless the vote of a greater number is required by these By-laws,
the Certificate of Incorporation or the General Corporation Law of the State of
Delaware. In determining the number of votes cast for or against a proposal,
shares abstaining from voting on a matter (including elections) will not be
treated as a vote for or against the proposal. A non-vote by a broker will be
treated as if the broker never voted, but a non-vote by a stockholder will be
counted as a vote "for" the management's position. Where a separate vote by a
class or classes or by a series of a class is required, if a quorum is present,
the affirmative vote of the majority of shares of such class or classes or
series of a class present in person or represented by proxy at the meeting
shall be the act of such class or classes or series of a class. The provisions
of this Section will govern with respect to all votes of stockholders except as
otherwise provided for in these By-laws, the Certificate of Incorporation or
the General Corporation Law of the State of Delaware.

8.2 VOTING FOR DIRECTORS. At each election of Directors the voting shall
be by written ballot. Directors shall be elected by a plurality of the votes
of the shares present in person or represented by proxy at the meeting and
entitled to vote on the election of Directors.

8.3 SHARES HELD OR CONTROLLED BY THE CORPORATION. Shares of its own
capital stock belonging to the corporation, or to another corporation if a
majority of the shares entitled to vote in the election of Directors of such
other corporation is held by the corporation, shall neither be entitled to vote
nor counted for quorum purposes.

8.4 PROXIES. A stockholder may vote by proxy executed in writing by the
stockholder or by his attorney-in-fact. Such proxy shall be filed with the
Secretary of the corporation before or at the time of the meeting. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking the
proxy or another duly executed proxy bearing a later date with the Secretary of
the corporation. A proxy shall become invalid three years after the date of
its execution, unless otherwise provided in the proxy. A proxy with respect to
a specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.

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SECTION 9. INSPECTORS

Prior to each meeting of stockholders, the Board shall appoint two
Inspectors who are not Directors, candidates for Directors or officers of the
corporation, who shall receive and determine the validity of proxies and the
qualifications of voters, and receive, inspect, count and report to the meeting
in writing the votes cast on all matters submitted to a vote at such meeting.
In case of failure of the Board to make such appointments or in case of failure
of any Inspector so appointed to act, the Chairman of the Board shall make such
appointment or fill such vacancies. Each Inspector, immediately before
entering upon his duties, shall subscribe to an oath or affirmation faithfully
to execute the duties of Inspector at such meeting with strict impartiality and
according to the best of his ability.

SECTION 10. LIST OF STOCKHOLDERS

The Secretary or other officer or agent having charge of the stock ledger
of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote
at said meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares of each class and series registered in the
name of each such stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall
be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. Such list shall also be produced and
kept at the time and place of the meeting during the whole time thereof, and
may be inspected by any stockholder who is present. The stock ledger shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by this section, or the books of the corporation, or
to vote in person or by proxy at any such meeting.

SECTION 11. STOCKHOLDER PROPOSALS

Stockholder proposals for inclusion in any proxy statement to be issued in
connection with the annual meeting of stockholders must be mailed to the
Corporate Secretary, El Paso Tennessee Pipeline Co., P. O. Box 1492, El Paso,
Texas 79978, and must be received by the Corporate Secretary at least by the
150th day preceding the annual meeting of stockholders unless the specific
deadline for stockholder proposals is set forth in the corporation's proxy
statement.

ARTICLE III

BOARD OF DIRECTORS

SECTION 1. NUMBER, QUALIFICATION AND TERM OF OFFICE

The business, property and affairs of the corporation shall be managed by
a Board consisting of not less than one Director. The Board shall from time to
time by a vote of a majority of the

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Directors then in office fix the specific number of Directors to constitute the
Board. At each annual meeting of stockholders a Board shall be elected by the
stockholders for a term of one year. Each Director shall serve until his
successor is duly elected and shall qualify.

SECTION 2. VACANCIES

Vacancies in the Board and newly created directorships resulting from any
increase in the authorized number of Directors may be filled by a vote of the
majority of the Directors then in office, although less than a quorum, or by a
sole remaining Director, at any regular or special meeting of the Board.

SECTION 3. RESIGNATIONS

Any Director may resign at any time upon written notice to the Board, the
Chairman of the Board, the Chief Executive Officer, the President, the Vice
Chairman of the Board or the Secretary of the corporation. Such resignation
shall take effect on the date of receipt of such notice or at any later time
specified therein; and the acceptance of such resignation, unless otherwise
required by the terms thereof, shall not be necessary to make it effective.
When one or more Directors shall resign effective at a future date, a majority
of the Directors then in office, including those who have resigned, shall have
power to fill such vacancy or vacancies to take effect when such resignation or
resignations shall become effective.

SECTION 4. REMOVALS

Any Director may be removed, with or without cause, at any special meeting
of the stockholders called for that purpose, by the affirmative vote of the
holders of a majority in number of shares of the corporation entitled to vote
for the election of such Director, and the vacancy in the Board caused by any
such removal may be filled by the stockholders at such a meeting.

SECTION 5. PLACE OF MEETINGS; BOOKS AND RECORDS

The Board may hold its meetings, and have an office or offices, at such
place or places within or without the State of Delaware as the Board from time
to time may determine.

The Board, subject to the provisions of applicable statutes, may authorize
the books and records of the corporation, and offices or agencies for the
issue, transfer and registration of the capital stock of the corporation, to be
kept at such place or places outside of the State of Delaware as, from time to
time, may be designated by the Board.

SECTION 6. ANNUAL MEETING OF THE BOARD

The first meeting of each newly elected Board, to be known as the Annual
Meeting of the Board, for the purpose of electing officers, designating
committees and the transaction of such other business as may come before the
Board, shall be held as soon as practicable after the adjournment of the annual
meeting of stockholders, and no notice of such meeting shall be

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necessary to the newly elected Directors, provided a quorum shall be present.
In the event such meeting is not held due to the absence of a quorum, the
meeting may be held at such time and place as shall be specified in a notice
given as hereinafter provided for special meetings of the Board, or as shall be
specified in a written waiver signed by all of the newly elected Directors.

SECTION 7. REGULAR MEETINGS

The Board shall provide for regular meetings of the Board at such times
and at such places as it deems desirable. Notice of regular meetings need not
be given.

SECTION 8. SPECIAL MEETINGS

Special meetings of the Board may be called by the Chairman of the Board,
the Chief Executive Officer, the President or the Vice Chairman of the Board
and shall be called by the Secretary on the written request of three Directors
on such notice as the person or persons calling the meeting shall deem
appropriate in the circumstances. Notice of each such special meeting shall be
mailed to each Director or delivered to him by telephone, telegraph or any
other means of electronic communication, in each case addressed to his
residence or usual place of business, or delivered to him in person or given to
him orally. The notice of meeting shall state the time and place of the
meeting but need not state the purpose thereof. Whenever any notice is
required to be given to any Director under the provisions of these By-laws, the
Certificate of Incorporation or the General Corporation Law of the State of
Delaware, a waiver thereof in writing, signed by the person or persons entitled
to such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
or any committee appointed by the Board need be specified in the waiver of
notice of such meeting. Attendance of a Director at any meeting shall
constitute a waiver of notice of such meeting except when a Director attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting was not lawfully called or convened.

SECTION 9. QUORUM AND MANNER OF ACTING

Except as otherwise provided by statute, the Certificate of Incorporation,
or these By-laws, the presence of a majority of the total number of Directors
shall constitute a quorum for the transaction of business at any regular or
special meeting of the Board, and the act of a majority of the Directors
present at any such meeting at which a quorum is present shall be the act of
the Board. In the absence of a quorum, a majority of the Directors present may
adjourn the meeting, from time to time, until a quorum is present. Notice of
any such adjourned meeting need not be given.

SECTION 10. ORGANIZATION

At every meeting of the Board, the Chairman of the Board or in his absence
the Chief Executive Officer, the President or the Vice Chairman of the Board,
or if all of the said officers are absent, a chairman chosen by a majority of
the Directors present shall act as chairman of the

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meeting. The Secretary, or in his absence, an Assistant Secretary, or in the
absence of the Secretary and all the Assistant Secretaries, any person
appointed by the chairman of the meeting, shall act as secretary of the
meeting.

SECTION 11. CONSENT OF DIRECTORS IN LIEU OF MEETING

Unless otherwise restricted by the Certificate of Incorporation or by
these By-laws, any action required or permitted to be taken at any meeting of
the Board, or any committee designated by the Board, may be taken without a
meeting if all members of the Board or committee consent thereto in writing,
and such written consent is filed with the minutes of the proceedings of the
Board or committee.

SECTION 12. TELEPHONIC MEETINGS

Members of the Board, or any committee designated by the Board, may
participate in any meeting of the Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in such a
meeting shall constitute presence in person at such meeting.

SECTION 13. COMPENSATION

Each Director, who is not a full-time salaried officer of the corporation
or any of its wholly owned subsidiaries, when authorized by resolution of the
Board, may receive as a Director a stated salary or an annual retainer, and any
other benefits as the Board may determine, and in addition may be allowed a
fixed fee or reimbursement of his reasonable expenses for attendance at each
regular or special meeting of the Board or any committee thereof.

SECTION 14. INTERESTED DIRECTORS

No contract or transaction between the corporation and one or more of its
Directors or officers, or between the corporation and any other corporation,
partnership, association or other organization in which one or more of its
Directors or officers are Directors or officers of this corporation, or have a
financial interest in such contract or transaction, shall be void or voidable
solely for this reason, or solely because the Director or officer is present at
or participates in the meeting of the Board or committee thereof which
authorizes the contract or transaction, or solely because his or their votes
are counted for such purpose, if: (1) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board or the committee, and the Board or committee in good
faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested Directors, even though the disinterested
Directors be less than a quorum; or (2) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (3) the contract or transaction is fair as to the corporation as of the time
it is authorized, approved or ratified by the Board, a committee thereof or the
stockholders.

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Common or interested Directors may be counted in determining the presence of a
quorum at a meeting of the Board or of a committee which authorizes the
contract or transaction.

ARTICLE IV

COMMITTEES OF THE BOARD OF DIRECTORS

SECTION 1. EXECUTIVE COMMITTEE

The Board may, in its discretion, designate an Executive Committee,
consisting of such number of Directors as the Board may from time to time
determine. The committee shall have and may exercise all the powers and
authority of the Board in the management of the business and affairs of the
corporation and may authorize the seal of the corporation to be affixed to all
papers which may require it, but the committee shall have no power or authority
to amend the Certificate of Incorporation (except that the committee may, to
the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the Board, fix the designations and any
of the preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
corporation or fix the number of shares of any series of stock or authorize the
increase or decrease of the shares of any series). The committee shall have
such other powers as the Board may from time to time prescribe.

SECTION 2. FINANCE COMMITTEE

The Board may, in its discretion, designate a Finance Committee,
consisting of such number of Directors as the Board may from time to time
determine. The committee shall monitor, review, appraise and recommend to the
Board appropriate action with respect to the corporation's capital structure,
its source of funds and its financial position; review and recommend
appropriate delegations of authority to management on expenditures and other
financial commitments; review terms and conditions of financing plans; develop
and recommend dividend policies and recommend to the Board specific dividend
payments; and review the performance of the trustee of the corporation's
pension trust fund, and any proposed change in the investment policy of the
trustee with respect to such fund. The committee shall have such other duties,
functions and powers as the Board may from time to time prescribe.

SECTION 3. AUDIT COMMITTEE

The Board may designate annually an Audit Committee consisting of not less
than two Directors as it may from time to time determine, none of whom shall be
officers or employees of the corporation. The committee shall review with the
independent accountants the corporation's financial statements, basic
accounting and financial policies and practices, adequacy of controls, standard
and special tests used in verifying the corporation's statements of account and
in determining the soundness of the corporation's financial condition, and the
committee shall report

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to the Board the results of such reviews; review the policies and practices
pertaining to publication of quarterly and annual statements to assure
consistency with audited results and the implementation of policies and
practices recommended by the independent accountants; ensure that suitable
independent audits are made of the operations and results of subsidiary
corporations and affiliates; and monitor compliance with the corporation's code
of business conduct. The committee shall have such other duties, functions and
powers as the Board may from time to time prescribe.

SECTION 4. COMPENSATION COMMITTEE

The Board may designate annually a Compensation Committee consisting of
not less than two Directors as it may from time to time determine, none of whom
shall be officers or employees of the corporation. The committee shall
administer the corporation's executive compensation plans and programs. In
addition, the committee shall consider proposals with respect to the creation
of and changes to executive compensation plans and will review appropriate
criteria for establishing certain performance measures and determining annual
corporate and executive performance ratings under applicable corporation plans
and programs. The committee shall have such other duties, functions and powers
as the Board may from time to time prescribe.

SECTION 5. COMMITTEE CHAIRMAN, BOOKS AND RECORDS

Each committee shall elect a chairman to serve for such term as it may
determine, shall fix its own rules of procedure and shall meet at such times
and places and upon such call or notice as shall be provided by such rules. It
shall keep a record of its acts and proceedings, and all action of the
committee shall be reported to the Board at the next meeting of the Board.

SECTION 6. ALTERNATES

Alternate members of the committees prescribed by this Article IV may be
designated by the Board from among the Directors to serve as occasion may
require. Whenever a quorum cannot be secured for any meeting of any such
committee from among the regular members thereof and designated alternates, the
member or members of such committee present at such meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in the
place of such absent or disqualified member.

Alternative members of such committees shall receive a reimbursement for
expenses and compensation at the same rate as regular members of such
committees.

SECTION 7. OTHER COMMITTEES

The Board may designate such other committees, consisting of such number
of Directors as the Board may from time to time determine, and each such
committee shall serve for such term and shall have and may exercise, during
intervals between meetings of the Board, such duties, functions and powers as
the Board may from time to time prescribe.

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SECTION 8. QUORUM AND MANNER OF ACTING

At each meeting of any committee the presence of a majority of the members
of such committee, whether regular or alternate, shall be necessary to
constitute a quorum for the transaction of business, and if a quorum is present
the concurrence of a majority of those present shall be necessary for the
taking of any action; provided, however, that no action may be taken by the
Executive Committee or the Finance Committee when one or more officers of the
corporation are present as members at a meeting of either such committee unless
such action shall be concurred in by the vote of at least one member of such
committee who is not an officer of the corporation.

ARTICLE V

OFFICERS

SECTION 1. NUMBER

The officers of the corporation shall consist of such of the following as
the Board may from time to time elect or appoint, or as the Chairman of the
Board may from time to time appoint pursuant to Section 6 of this Article V: a
Chairman of the Board, a Chief Executive Officer, a President, a Vice Chairman
of the Board, a Chief Operating Officer, a Chief Financial Officer, a General
Counsel, a Secretary, a Treasurer, a Controller and one or more of the
following: Executive Vice President, Senior Vice President, Vice President,
Assistant Vice President, Associate or Assistant General Counsel, Assistant
Secretary, Assistant Treasurer, Assistant Controller and such other officers
with such titles and powers and/or duties as the Board or the Chairman of the
Board, as the case may be, shall from time to time determine. Officers of the
corporation may simultaneously serve as officers of subsidiaries or divisions
thereof. Any number of offices may be held by the same person.

SECTION 2. ELECTION

The officers of the corporation, except those who may be appointed by the
Chairman of the Board as provided in Section 6 of this Article V, shall be
elected or appointed as soon as practicable after the annual meeting of
stockholders in each year to hold office until the first meeting of the Board
after the annual meeting of stockholders next succeeding his election, or until
his successor is elected and qualified or until his earlier death, resignation
or removal.

SECTION 3. RESIGNATIONS

Any elected or appointed officer may resign at any time upon written
notice to the Chairman of the Board or the Secretary of the corporation. Such
resignation shall take effect upon the date of its receipt or at such later
time as may be specified therein, and unless otherwise required by the terms
thereof, no acceptance of such resignation shall be necessary to make it
effective.

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SECTION 4. REMOVALS

Any elected or appointed officer may be removed, with or without cause, by
the Board at any regular or special meeting of the Board, and in the case of an
officer appointed pursuant to Section 6 of this Article V, may be so removed by
the Chairman of the Board. Any such removal shall be without prejudice to the
contractual rights of such officer, if any, with the corporation, but the
election or appointment of any officer shall not of itself create contractual
rights.

SECTION 5. VACANCIES

Any vacancy occurring in any office by death, resignation, removal or
otherwise may be filled for the unexpired portion of the term by the Board at
any regular or special meeting or as otherwise provided in these By-laws.

SECTION 6. CHAIRMAN OF THE BOARD

The Chairman of the Board shall, when present, preside at all meetings of
the stockholders and the Board; have authority to call special meetings of the
stockholders and of the Board; have authority to sign and acknowledge in the
name and on behalf of the corporation all stock certificates, contracts or
other documents and instruments except where the signing thereof shall be
expressly delegated to some other officer or agent by the Board or required by
law to be otherwise signed or executed and, unless otherwise provided by law or
by the Board may authorize any officer, employee or agent of the corporation to
sign, execute and acknowledge in his place and stead all such documents and
instruments; he shall fix the compensation of officers of the corporation,
other than his own compensation, and the compensation of officers of its
principal operating subsidiaries reporting directly to him unless such
authority is otherwise reserved to the Board or a committee thereof; and he
shall approve proposed employee compensation and benefit plans of subsidiary
companies not involving the issuance or purchase of capital stock of the
corporation. He shall have the power to appoint and remove any Vice President,
Controller, General Counsel, Secretary or Treasurer of the corporation. He
shall also have the power to appoint and remove such associate or assistant
officers of the corporation with such titles and duties as he may from time to
time deem necessary or appropriate. He shall have such other powers and
perform such other duties as from time to time may be assigned to him by the
Board or the Executive Committee.

The Chairman of the Board is hereby authorized, without further approval
of the Finance Committee or the Board:

(a) To approve individual expenditures by the corporation of up to $10
million each for those expenditure categories presented to the Board
in the annual budget or plan and up to $5 million each for
individual expenditures in categories not presented to the Board,
including but not limited to individual expenditures pertaining to
operating expenses, purchases, leases, options to purchase or lease
assets, investments, business acquisitions,

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land purchases, products or services acquisitions, litigation
settlements, charitable donations and political contributions.

(b) To approve individual cost overruns of up to 10% of any amounts
approved by or presented to the Board.

(c) To enter into leases or extensions thereof and other agreements with
respect to the assets of the corporation, including interests in
minerals and real estate, for a term of not more than 10 years or
for an unlimited term if the aggregate initial rentals, over the
term of the lease, including renewal options, do not exceed $3
million.

(d) To approve capital contributions to the corporation's wholly owned
subsidiaries.

(e) To approve disposition of assets and interests in securities of
subsidiaries or related commitments, provided that the aggregate
market value of the assets being disposed of in any one such
transaction does not exceed $10 million.

(f) To approve increases in the capital budgets of the corporation's
operating subsidiaries provided such increases in the aggregate do
not exceed 10% of the corporation's capital budget for the fiscal
year.

(g) To approve in emergency situations commitments in excess of the
above-described limits provided they are in the interests of the
corporation.

The above delegation of authority does not authorize the corporation or its
subsidiaries to make a significant change in its business or to issue the
corporation's capital stock without the specific approval of the Board.
Notwithstanding these limitations, the Chairman of the Board shall have such
power and authority as is usual, customary and desirable to perform all the
duties of the office.

SECTION 7. CHIEF EXECUTIVE OFFICER

The Chief Executive Officer shall assist the Chairman of the Board in the
performance of his duties and shall perform those duties assigned to him in
other provisions of the By-laws and such other duties as may from time to time
be assigned to him by the Board or the Chairman of the Board. In the absence
or disability of the Chairman of the Board, or at his request, the Chief
Executive Officer may preside at any meeting of the stockholders or of the
Board and, in such circumstances, may exercise any of the other powers or
perform any of the other duties of the Chairman of the Board. Subject to
delegations by the Chairman of the Board pursuant to Section 6 of this Article
V, the Chief Executive Officer may sign or execute, in the name of the
corporation, all stock certificates, deeds, mortgages, bonds, contracts or
other documents and instruments, except in cases where the signing or execution
thereof shall be required by law or shall have been expressly delegated by the
Board or these By-laws to some other officer or agent of the corporation.

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SECTION 8. PRESIDENT

The President shall have general authority over the property, business and
affairs of the corporation, and over all subordinate officers, agents and
employees of the corporation, subject to the control and direction of the
Board, the Executive Committee, the Chairman of the Board and the Chief
Executive Officer, including the power to sign and acknowledge in the name and
on behalf of the corporation all stock certificates, deeds, mortgages, bonds,
contracts or other documents and instruments except when the signing thereof
shall be expressly delegated to some other officer or agent by the Board or
required by law to be otherwise signed or executed and, unless otherwise
provided by law or by the Board, may delegate to any officer, employee or agent
of the corporation authority to sign, execute and acknowledge in his place and
stead all such documents and instruments.

SECTION 9. VICE CHAIRMAN OF THE BOARD

The Vice Chairman of the Board shall assist the Chairman of the Board, the
Chief Executive Officer and the President, in the performance of their duties
and shall perform those duties assigned to him in other provisions of the
By-laws and such other duties as may from time to time be assigned to him by
the Board, the Chairman of the Board, the Chief Executive Officer or the
President. In the absence or disability of the Chairman of the Board, the
Chief Executive Officer or the President, or at the request of any of them, the
Vice Chairman of the Board may preside at any meeting of the stockholders or of
the Board and, in such circumstances, may exercise any of the other powers or
perform any of the other duties of the Chairman of the Board, the Chief
Executive Officer or the President. Subject to delegations by the Chairman of
the Board pursuant to Section 6 of this Article V, the Vice Chairman of the
Board may sign or execute, in the name of the corporation, all stock
certificates, deeds, mortgages, bonds, contracts or other documents and
instruments, except in cases where the signing or execution thereof shall be
required by law or shall have been expressly delegated by the Board or these
By-laws to some other officer or agent of the corporation.

SECTION 10. CHIEF OPERATING OFFICER

The Chief Operating Officer shall have direct management responsibility
for the general business operations of the corporation, and he shall have such
powers and perform such duties as may be incident to the office of chief
operating officer of a corporation, those duties assigned to him by other
provisions of the By-laws, and such other duties as may from time to time be
assigned to him either directly or indirectly by the Board, the Chairman of the
Board, the Chief Executive Officer, the President or the Vice Chairman of the
Board. Subject to delegations by the Chairman of the Board pursuant to Section
6 of this Article V, the Chief Operating Officer may sign or execute, in the
name of the corporation, all stock certificates, deeds, mortgages, bonds,
contracts or other documents and instruments, except in cases where the signing
or execution thereof shall be required by law or shall have been expressly
delegated by the Board or these By-laws to some other officer or agent of the
corporation.

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SECTION 11. CHIEF FINANCIAL OFFICER

The Chief Financial Officer shall have responsibility for development and
administration of the corporation's financial plans and all financial
arrangements, its cash deposits and short term investments, its accounting
policies and its federal and state tax returns. The Chief Financial Officer
shall also be responsible for the corporation's internal control procedures and
for its relationship with the financial community. The Chief Financial Officer
shall perform all the duties incident to the office of chief financial officer
of a corporation, those duties assigned to him by other provisions of these
By-laws and such other duties as may be assigned to him either directly or
indirectly by the Board, the Chairman of the Board, the Chief Executive
Officer, the President, the Vice Chairman of the Board or the Chief Operating
Officer, or as may be provided by law.

SECTION 12. VICE PRESIDENTS

Each Executive Vice President, Senior Vice President and Vice President
shall have such powers and perform such duties as may from time to time be
assigned to him, directly or indirectly, either generally or in specific
instances, by the Board, the Chairman of the Board, the Chief Executive
Officer, the President, the Vice Chairman of the Board or the Chief Operating
Officer.

Subject to delegations by the Chairman of the Board pursuant to Section 6
of this Article V, each Executive Vice President, Senior Vice President and
Vice President shall perform all duties incident to the office of vice
president of a corporation and shall have authority to sign or execute, in the
name of the corporation, all stock certificates, deeds, mortgages, bonds,
contracts or other documents or instruments, except in cases where the signing
or execution thereof shall have been expressly delegated by the Board or these
By-laws to some other officer or agent of the corporation.

SECTION 13. GENERAL COUNSEL

The General Counsel shall be the chief legal advisor of the corporation
and shall have responsibility for the management of the legal affairs and
litigation of the corporation and, in general, he shall perform the duties
incident to the office of general counsel of a corporation and such other
duties as may be assigned to him either directly or indirectly by the Board,
the Chairman of the Board, the Chief Executive Officer, the President or the
Vice Chairman of the Board, or as may be provided by law.

SECTION 14. SECRETARY

The Secretary shall keep the minutes of meetings of the stockholders and
of the Board in books provided for the purpose; he shall see that all notices
are duly given in accordance with the provisions of these By-laws or as
required by law; he shall be custodian of the records and of the corporate seal
or seals of the corporation; he shall see that the corporate seal is affixed to
all documents requiring same, the execution of which, on behalf of the
corporation, under its seal, is duly authorized, and when said seal is so
affixed he may attest same; and, in general, he shall

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perform all duties incident to the office of the secretary of a corporation,
and such other duties as from time to time may be assigned to him directly or
indirectly by the Board, the Chairman of the Board, the Chief Executive
Officer, the President, the Vice Chairman of the Board or the General Counsel,
or as may be provided by law. Any Assistant Secretary may perform any of the
duties or exercise any of the powers of the Secretary at the request of, or in
the absence or disability of, the Secretary or otherwise as occasion may
require in the administration of the business and affairs of the corporation.

SECTION 15. TREASURER

The Treasurer shall have charge of and be responsible for all funds,
securities, receipts and disbursements of the corporation, and shall deposit,
or cause to be deposited, in the name of the corporation, all moneys or other
valuable effects in such banks, trust companies or other depositaries as shall,
from time to time, be selected by or under authority of the Board; if required
by the Board, he shall give a bond for the faithful discharge of his duties,
with such surety or sureties as the Board may determine; he shall keep or cause
to be kept full and accurate records of all receipts and disbursements in books
of the corporation; and, in general, he shall perform the duties incident to
the office of treasurer of a corporation and such other duties as may be
assigned to him directly or indirectly by the Board, the Chairman of the Board,
the Chief Executive Officer, the President, the Vice Chairman of the Board, the
Chief Operating Officer or the Chief Financial Officer, or as may be provided
by law. Any Assistant Treasurer may perform any of the duties or exercise any
of the powers of the Treasurer at the request of, or in the absence or
disability of, the Treasurer or otherwise as occasion may require in the
administration of the business and affairs of the corporation.

SECTION 16. CONTROLLER

The Controller shall be the chief accounting officer of the corporation.
He shall keep full and accurate accounts of the assets, liabilities,
commitments, receipts, disbursements and other financial transactions of the
corporation; shall cause regular audits of the books and records of account of
the corporation and shall supervise the preparation of the corporation's
financial statements; and, in general, he shall perform the duties incident to
the office of controller of a corporation and such other duties as may be
assigned to him directly or indirectly by the Board, the Audit Committee, the
Chairman of the Board, the Chief Executive Officer, the President, the Vice
Chairman of the Board, the Chief Operating Officer or the Chief Financial
Officer, or as may be provided by law.

SECTION 17. ABSENCE OR DISABILITY OF OFFICERS

In the absence or disability of the Chairman of the Board, the Chief
Executive Officer, the President or the Vice Chairman of the Board, the Board
or a committee thereof may designate individuals to perform the duties of those
absent or disabled.

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ARTICLE VI

STOCK CERTIFICATES AND TRANSFER THEREOF

SECTION 1. STOCK CERTIFICATES

Except as otherwise permitted by statute, the Certificate of Incorporation
or resolution or resolutions of the Board, every holder of stock in the
corporation shall be entitled to have a certificate, signed by or in the name
of the corporation by the Chairman of the Board, the Chief Executive Officer,
the President, the Vice Chairman of the Board, the Chief Operating Officer, the
Chief Financial Officer or any Vice President and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares, and the class and series thereof,
owned by him in the corporation. Any and all of the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.

SECTION 2. TRANSFER OF STOCK

Transfer of shares of the capital stock of the corporation shall be made
only on the books of the corporation by the holder thereof, or by his attorney
duly authorized, and on surrender of the certificate or certificates for such
shares. A person in whose name shares of stock stand on the books of the
corporation shall be deemed the owner thereof as regards the corporation, and
the corporation shall not, except as expressly required by statute, be bound to
recognize any equitable or other claim to, or interest in, such shares on the
part of any other person whether or not it shall have express or other notice
thereof.

SECTION 3. TRANSFER AGENTS AND REGISTRARS

The Board may in its discretion appoint responsible banks or trust
companies from time to time to act as transfer agents and registrars of the
stock of the corporation, as may be required by and in accordance with
applicable laws, rules and regulations. Except as otherwise provided by
resolution of the Board in respect of temporary certificates, no certificates
for shares of capital stock of the corporation shall be valid unless
countersigned by a transfer agent and registered by one of such registrars.

SECTION 4. ADDITIONAL REGULATIONS

The Board may make such additional rules and regulations as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the capital stock of the corporation.

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SECTION 5. LOST, STOLEN OR DESTROYED CERTIFICATES

The Board may provide for the issuance of new certificates of stock to
replace certificates of stock lost, stolen or destroyed, or alleged to be lost,
stolen or destroyed, upon such terms and in accordance with such procedures as
the Board shall deem proper and prescribe.

ARTICLE VII

DIVIDENDS, SURPLUS, ETC.

Except as otherwise provided by statute or the Certificate of
Incorporation, the Board may declare dividends upon the shares of its capital
stock either (1) out of its surplus, or (2) in case there shall be no surplus,
out of its net profits for the fiscal year, whenever, and in such amounts as,
in its opinion, the condition of the affairs of the corporation shall render it
advisable. Dividends may be paid in cash, in property, or in shares of the
capital stock of the corporation.

ARTICLE VIII

SEAL

The corporation may have a corporate seal which shall have inscribed
thereon the name of the corporation, the year of its organization and the words
"Corporate Seal, Delaware." The corporate seal may be used by causing it or a
facsimile thereof to be impressed or affixed or in any other manner reproduced.

ARTICLE IX

FISCAL YEAR

The fiscal year of the corporation shall begin on the first day of January
of each year, or on such other day as may be fixed from time to time by the
Board.

ARTICLE X

INDEMNIFICATION

SECTION 1. GENERAL

The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any contemplated, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding, whether

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civil, criminal, administrative or investigative ("Proceeding") (other than a
Proceeding by or in the right of the corporation to procure a judgment in its
favor) in whole or in part attributable to (i) the fact that he is or was a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise ("Indemnitee"), or (ii) anything done or not done by such Indemnitee
in any such capacity, against expenses (including attorneys' fees) and losses,
claims, liabilities, judgments, fines and amounts paid in settlement incurred
by him or on his behalf in connection with such Proceeding ("Losses") if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal Proceeding, had no reasonable cause to believe his conduct was
unlawful; provided, however, that except as provided in Section 6 of this
Article X, the corporation shall indemnify any such Indemnitee in connection
with a Proceeding initiated by such Indemnitee only if such Proceeding was
authorized by the Board of Directors.

SECTION 2. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION

The corporation shall indemnify any person who was or is made a party
or is threatened to be made a party to any pending, completed or threatened
Proceeding brought by or in the right of the corporation to procure a judgment
in its favor in whole or in part attributable to (i) the fact that he is or was
a director or officer of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (also an
"Indemnitee") or (ii) anything done or not done by such Indemnitee in any such
capacity, against expenses (including attorneys' fees) actually incurred by him
or on his behalf in connection with such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, provided that no such indemnification shall
be made in respect of any claim, issue or matter as to which Delaware law
expressly prohibits such indemnification by reason of an adjudication of
liability of such person to the corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such
action or suit was brought shall determine such indemnification to be equitable
under the circumstances.

SECTION 3. INDEMNIFICATION IN CERTAIN CASES

Notwithstanding any other provision of this Article X, to the extent
that an Indemnitee has been wholly successful on the merits or otherwise in
defense of any Proceeding referred to in Sections 1 or 2 of this Article X or
in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) incurred by him or on his behalf
in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the corporation
shall indemnify Indemnitee, to the maximum extent permitted by law, against
expenses (including attorneys' fees) actually incurred by Indemnitee in
connection with each successfully resolved claim, issue or matter. For
purposes of this Section 3 and without limitation, the termination of any such
claim, issue or matter by dismissal with or without prejudice shall be deemed
to be a successful resolution as to such claim, issue or matter.

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SECTION 4. PROCEDURE

4.1 Any indemnification under Sections 1 and 2 of this Article X
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the
Indemnitee is proper (except that the right of Indemnitee to receive payments
pursuant to Section 5 of this Article X shall not be subject to this Section 4)
in the circumstances because he has met the applicable standard of conduct set
forth in such Sections 1 and 2, as applicable. When seeking indemnification,
Indemnitee shall submit a written request for indemnification to the
corporation. Such requests shall include documentation or information which is
necessary for the corporation to make a determination of Indemnitee's
entitlement to indemnification and what is reasonably available to Indemnitee.
Such determination shall be made promptly, but in no event later than 30 days
after receipt by the corporation of Indemnitee's written request for
indemnification. The Secretary of the corporation shall, promptly upon receipt
of Indemnitee's request for indemnification, advise the Board of Directors that
Indemnitee has made such request for indemnification.

4.2 The entitlement of Indemnitee to indemnification shall be
determined in the specific case by a majority vote of the directors who are
Disinterested Directors, even though less than a quorum, except that such
determination shall be made by Independent Legal Counsel, if either there are
no Disinterested Directors or a majority of such Disinterested Directors so
directs.

4.3 In the event the determination of entitlement is to be made by
Independent Legal Counsel, such Independent Legal Counsel shall be selected by
the Board of Directors and approved by Indemnitee. Upon failure of the Board
of Directors to so select such Independent Legal Counsel or upon failure of
Indemnitee to so approve, such Independent Legal Counsel shall be selected by
the Chancellor of the State of Delaware or such other person as such Chancellor
shall designate to make such selection.

4.4 If the Board of Directors or Independent Legal Counsel shall
have determined that Indemnitee is not entitled to indemnification to the full
extent of Indemnitee's request, Indemnitee shall have the right to seek
entitlement to indemnification in accordance with the procedures set forth in
Section 6 of this Article X.

4.5 If the person or persons empowered pursuant to Section 4.2 of
this Article X to make a determination with respect to entitlement to
indemnification shall have failed to make the requested determination within 90
days after receipt by the corporation of such request, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be absolutely entitled to such indemnification,
absent (A) misrepresentation by Indemnitee of a material fact in the request
for indemnification or (B) a final judicial determination that all or any part
of such indemnification is expressly prohibited by law.

4.6 The termination of any Proceeding by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, adversely affect the rights of Indemnitee to
indemnification hereunder except as may be specifically provided herein, or
create a presumption that Indemnitee did not act in good faith and in a manner
which Indemnitee

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reasonably believed to be in or not opposed to the best interests of the
corporation or create a presumption that (with respect to any criminal action
or proceeding) Indemnitee had reasonable cause to believe that Indemnitee's
conduct was unlawful.

4.7 For purposes of any determination of good faith hereunder,
Indemnitee shall be deemed to have acted in good faith if Indemnitee's action
is based on the records or books of account of the corporation or an Affiliate,
including financial statements, or on information supplied to Indemnitee by the
officers of the corporation or an Affiliate in the course of their duties, or
on the advice of legal counsel for the corporation or an Affiliate or by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the corporation or an Affiliate. The
provisions of this Section 4.7 of this Article X shall not be deemed to be
exclusive or to limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set
forth in these By-laws.

4.8 The knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of the corporation or an Affiliate shall
not be imputed to Indemnitee for purposes of determining the right to
indemnification under these By-laws.

4.9 Without limiting the generality of the foregoing, in the event
any Indemnitee is made a party or is threatened to be made a party to any
Proceeding:

(A) the Indemnitee may retain counsel satisfactory to him with the
consent of the corporation, which may not be unreasonably withheld or
delayed;

(B) the corporation shall pay all fees and expenses of such
counsel for the Indemnitee promptly as statements therefor are received;
and

(C) the corporation will use all reasonable efforts to assist in
the vigorous defense of any such matter, provided that the corporation
shall not be liable for any settlement effected without its written
consent, which consent, however, shall not be unreasonably withheld.

Any Indemnitee wishing to claim indemnification under this Article X, upon
notice that such person has been made or is threatened to be made a party to
any such Proceeding, shall notify the corporation (but any failure so to notify
shall not relieve the corporation from any liability which it may have under
this Article X, except to the extent such failure materially prejudices the
corporation) and shall deliver to the corporation any undertaking required by
Section 145(e) of the Delaware General Corporation Law. The Indemnitees as a
group may retain only one law firm to represent them with respect to each such
Proceeding unless there is, under applicable standards of professional conduct,
a conflict on any significant issue between the positions of any two or more
Indemnitees.

SECTION 5. ADVANCES FOR EXPENSES AND COSTS

All expenses (including attorneys' fees) incurred by or on behalf of
Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee
within three months) in

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connection with any Proceeding shall be paid by the corporation in advance of
the final disposition of such Proceeding within 20 days after the receipt by
the corporation of a statement or statements from Indemnitee requesting from
time to time such advance or advances whether or not a determination to
indemnify has been made under Section 4 of this Article X (and even if the
Disinterested Directors or Independent Legal Counsel has determined, pursuant
to Section 4, that Indemnitee is not entitled to indemnification by reason of
their conclusions that Indemnitee (i) did not act in good faith or in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the corporation or (ii) had reasonable cause to believe his conduct was
unlawful, but not after the conclusion of judicial proceedings under Section
6). Indemnitee's entitlement to such advancement of expenses shall include
those incurred in connection with any Proceeding by Indemnitee seeking an
adjudication or award in arbitration pursuant to these By-laws. Such statement
or statements shall evidence such expenses incurred (or reasonably expected to
be incurred) by Indemnitee in connection therewith and shall include or be
accompanied by a written undertaking by or on behalf of Indemnitee to repay
such amount if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified therefor pursuant to the terms of this Section 5 of
Article X. The financial ability of an Indemnitee to repay an advance shall
not be a prerequisite to the making of such an advance.

SECTION 6. REMEDIES IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE
EXPENSES

6.1 In the event that (A) a determination is made that Indemnitee
is not entitled to indemnification hereunder, (B) advances are not made
pursuant to Section 5 of this Article X or (C) payment has not been timely made
following a determination of entitlement to indemnification pursuant to Section
4 of this Article X, Indemnitee shall be entitled to seek a final adjudication
in an appropriate court of the State of Delaware or any other court of
competent jurisdiction of Indemnitee's entitlement to such indemnification or
advance.

6.2 In the event a determination has been made in accordance with
the procedures set forth in Section 4 of this Article X, in whole or in part,
that Indemnitee is not entitled to indemnification, any judicial proceeding
referred to in Section 6.1 of this Article X shall be de novo and Indemnitee
shall not be prejudiced by reason of any such prior determination that
Indemnitee is not entitled to indemnification.

6.3 If a determination is made or deemed to have been made
pursuant to the terms of Sections 4 or 6 of this Article X that Indemnitee is
entitled to indemnification, the corporation shall be bound by such
determination in any judicial proceeding in the absence of (A) a
misrepresentation of a material fact by Indemnitee or (B) a final judicial
determination that all or any part of such indemnification is expressly
prohibited by law.

6.4 To the extent deemed appropriate by the court, interest shall
be paid by the corporation to Indemnitee at a reasonable interest rate for
amounts which the corporation indemnifies or is obliged to indemnify Indemnitee
for the period commencing with the date on which Indemnitee requested
indemnification (or reimbursement or advance of expenses) and ending with the
date on which such payment is made to Indemnitee by the corporation.

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SECTION 7. RIGHTS NON-EXCLUSIVE

The rights of indemnification and advancement of expenses provided by,
or granted pursuant to, this Article X shall not be deemed exclusive of any
rights to which any person seeking indemnification or advancement of expenses
may be entitled under any law, certificate of incorporation, by-law, agreement,
vote of stockholders or resolution of directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office. No amendment, alteration, rescission or replacement of these
By-laws or any provision hereof shall be effective as to Indemnitee with
respect to any action taken or omitted by such Indemnitee in Indemnitee's
position with the corporation or an Affiliate or any other entity which
Indemnitee is or was serving at the request of the corporation prior to such
amendment, alteration, rescission or replacement.

SECTION 8. INSURANCE

The corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this Article X.

SECTION 9. SURVIVING OF RIGHTS

The indemnification and advancement of expenses provided by, or
granted pursuant to this Article X shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.

SECTION 10. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION

The corporation may, by action of the Board of Directors from time to
time, grant rights to indemnification and advancement of expenses to employees
and agents of the corporation, with the same scope and effect as the provisions
of this Article X with respect to the indemnification of directors and officers
of the corporation.

SECTION 11. DEFINITIONS

For purposes of this Article X:

(a) "Affiliate" includes any corporation, partnership, joint
venture, employee benefit plan, trust or other enterprise directly or
indirectly owned by the corporation.

(b) "Corporation" includes all constituent corporations absorbed
in a consolidation or merger as well as the resulting or surviving
corporation so that any person who is or was a

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director, officer, employee or agent of such a constituent corporation or is
or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same position under
the provisions of this Article X with respect to the resulting or surviving
corporation as he would if he had served the resulting or surviving
corporation in the same capacity.

(c) "Disinterested Director" shall mean a director of the
corporation who is not or was not a party to the Proceeding in respect of
which indemnification is being sought by Indemnitee.

(d) "Independent Legal Counsel" shall mean a law firm or lawyer
that neither is presently nor in the past five years has been retained to
represent: (i) the corporation or Indemnitee in any matter material to
either such party or (ii) any other party to the Proceeding giving rise to
a claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" shall not include any firm or person who, under
the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the corporation or
Indemnitee in an action to determine Indemnitee's right to indemnification
under these By- laws. All fees and expenses of the Independent Counsel
incurred in connection with acting pursuant to these By-laws shall be borne
by the corporation.

ARTICLE XI

CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

SECTION 1. CHECKS, DRAFTS, ETC.; LOANS

All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation shall be
signed by such officer or officers, agent or agents of the corporation and in
such manner as shall, from time to time, be determined by resolution of the
Board. No loans shall be contracted on behalf of the corporation unless
authorized by the Board. Such authority may be general or confined to specific
circumstances.

SECTION 2. DEPOSITS

All funds of the corporation shall be deposited, from time to time, to the
credit of the corporation in such banks, trust companies or other depositories
as the Board may select, or as may be selected by any officer or officers,
agent or agents of the corporation to whom such power may, from time to time,
be delegated by the Board; and for the purpose of such deposit, the Chairman of
the Board, the Chief Executive Officer, the President, the Vice Chairman of the
Board, any Executive Vice President, any Senior Vice President, any Vice
President, the Treasurer or any Assistant Treasurer, or any other officer or
agent to whom such power may be

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<PAGE> 29
delegated by the Board, may endorse, assign and deliver checks, drafts and
other order for the payment of money which are payable to the order of the
corporation.

ARTICLE XII

AMENDMENTS

These By-laws may be altered or repealed and new By-laws may be made by
the affirmative vote, at any meeting of the Board, of a majority of the entire
Board, subject to the rights of the stockholders of the corporation to amend or
repeal By-laws made or amended by the Board by the affirmative vote of the
holders of record of a majority in number of shares of the outstanding stock of
the corporation present or represented at any meeting of the stockholders and
entitled to vote thereon, provided that notice of the proposed action be
included in the notice of such meeting.

ARTICLE XIII

MISCELLANEOUS

All references and uses herein of the masculine pronouns "he" or "his"
shall have equal applicability to and shall also mean their feminine
counterpart pronouns, such as "she" or "her."

<PAGE> 1
EXHIBIT 4.1
================================================================================

TENNESSEE GAS PIPELINE COMPANY

THE CHASE MANHATTAN BANK

TRUSTEE

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

INDENTURE

DATED AS OF MARCH 4, 1997

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

================================================================================
<PAGE> 2

TENNESSEE GAS PIPELINE COMPANY

CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318, INCLUSIVE, OF THE
TRUST INDENTURE ACT OF 1939:

<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
--------------- -----------------
<S> <C>
Section 310(a)(1)........................................ 609
(a)(2).............................................. 609
(a)(3).............................................. Not Applicable
(a)(4).............................................. Not Applicable
(b)................................................. 608
610
Section 311(a)........................................... 613
(b)................................................. 613
Section 312(a)........................................... 701
702
(b)................................................. 702
(c)................................................. 702
Section 313(a)........................................... 703
(b)................................................. 703
(c)................................................. 703
(d)................................................. 703
Section 314(a)........................................... 704
(a)(4).............................................. 101
1004
(b)................................................. Not Applicable
(c)(1).............................................. 101
102
(c)(2).............................................. 101
102
(c)(3).............................................. Not Applicable
(d)................................................. Not Applicable
(e)................................................. 102
Section 315(a)........................................... 601
(b)................................................. 602
(c)................................................. 601
(d)................................................. 601
(e)................................................. 514
Section 316(a)........................................... 101
(a)(1)(A)........................................... 502
512
(a)(1)(B)........................................... 513
(a)(2).............................................. Not Applicable
(b)................................................. 508
(c)................................................. 104
Section 317(a)(1)........................................ 503
(a)(2).............................................. 504
(b)................................................. 1003
Section 318(a)........................................... 107
</TABLE>

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
PARTIES........................................................... 1
RECITALS OF THE COMPANY........................................... 1

ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions........................................ 1
Act................................................ 2
Affiliate.......................................... 2
Alternate Program.................................. 2
Authenticating Agent............................... 2
Authorized Newspaper............................... 2
Bankruptcy Law..................................... 2
Board of Directors................................. 3
Board Resolution................................... 3
Business Day....................................... 3
Commission......................................... 3
Company............................................ 3
Company Request or Company Order................... 3
Consolidated Net Tangible Assets................... 3
Corporate Trust Office............................. 4
corporation........................................ 4
covenant defeasance................................ 4
Custodian.......................................... 4
Debt............................................... 4
Default............................................ 4
Defaulted Interest................................. 4
defeasance......................................... 4
Definitive Security................................ 4
Depositary......................................... 4
Dollar or $........................................ 4
Event of Default................................... 5
Exchange Act....................................... 5
Funded Debt........................................ 5
Global Security.................................... 5
Holder............................................. 5
Indenture.......................................... 5
interest........................................... 5
Interest Payment Date.............................. 5
Lien............................................... 5
Margin Stock....................................... 6
Maturity........................................... 6
</TABLE>
<PAGE> 4

ii
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Notice of Default.................................. 6
Officer's Certificate.............................. 6
Opinion of Counsel................................. 6
Original Issue Discount Security................... 6
Outstanding........................................ 6
Paying Agent....................................... 7
Periodic Offering.................................. 7
Permitted Liens.................................... 8
Person............................................. 8
Place of Payment................................... 9
Predecessor Security............................... 9
Principal Property................................. 9
Redemption Date.................................... 9
Redemption Price................................... 9
Regular Record Date................................ 9
Restricted Affiliate............................... 9
Restricted Subsidiary.............................. 10
Sale-Leaseback Transaction......................... 10
Securities......................................... 10
Security Register and Security Registrar........... 10
Special Record Date................................ 10
Stated Maturity.................................... 10
Subsidiary......................................... 10
Trust Indenture Act................................ 10
Trustee............................................ 11
U.S. Government Obligations........................ 11
Vice President..................................... 11
SECTION 102. Compliance Certificates and Opinions............... 11
SECTION 103. Form of Documents Delivered to Trustee............. 12
SECTION 104. Acts of Holders; Record Dates...................... 12
SECTION 105. Notices, Etc., to Trustee and Company.............. 14
SECTION 106. Notice to Holders; Waiver.......................... 14
SECTION 107. Conflict with Trust Indenture Act.................. 15
SECTION 108. Effect of Headings and Table of Contents........... 15
SECTION 109. Successors and Assigns............................. 15
SECTION 110. Separability Clause................................ 15
SECTION 111. Benefits of Indenture.............................. 15
SECTION 112. Governing Law...................................... 16
SECTION 113. Legal Holidays..................................... 16
SECTION 114. Language of Notices, Etc........................... 16
SECTION 115. Incorporators, Stockholders, Officers and Directors
of the Company Exempt from Individual
Liability........................................ 16
</TABLE>
<PAGE> 5

iii
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE TWO
SECURITY FORMS

SECTION 201. Forms Generally.................................... 17
SECTION 202. Form of Face of Security........................... 17
SECTION 203. Form of Reverse of Security........................ 21
SECTION 204. Global Securities.................................. 27
SECTION 205. Form of Trustee's Certificate of Authentication
................................................. 28

ARTICLE THREE
THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series............... 29
SECTION 302. Denominations...................................... 32
SECTION 303. Execution, Authentication, Delivery and Dating..... 32
SECTION 304. Temporary Securities............................... 34
SECTION 305. Registration, Registration of Transfer and
Exchange......................................... 35
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities... 37
SECTION 307. Payment of Interest; Interest Rights Preserved..... 38
SECTION 308. Persons Deemed Owners.............................. 39
SECTION 309. Cancellation....................................... 40
SECTION 310. Computation of Interest............................ 40
SECTION 311. CUSIP Numbers...................................... 40

ARTICLE FOUR
SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture............ 41
SECTION 402. Application of Trust Money......................... 42

ARTICLE FIVE
REMEDIES

SECTION 501. Events of Default.................................. 42
SECTION 502. Acceleration of Maturity; Rescission and
Annulment........................................ 43
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee........................... 45
SECTION 504. Trustee May File Proofs of Claim................... 46
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities....................................... 46
SECTION 506. Application of Money Collected..................... 47
SECTION 507. Limitation on Suits................................ 47
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.................. 48
</TABLE>
<PAGE> 6

iv
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 509. Restoration of Rights and Remedies................. 48
SECTION 510. Rights and Remedies Cumulative..................... 48
SECTION 511. Delay or Omission Not Waiver....................... 49
SECTION 512. Control by Holders................................. 49
SECTION 513. Waiver of Past Defaults............................ 49
SECTION 514. Undertaking for Costs.............................. 50
SECTION 515. Waiver of Usury, Stay or Extension Laws............ 50

ARTICLE SIX
THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities................ 50
SECTION 602. Notice of Defaults................................. 51
SECTION 603. Certain Rights of Trustee.......................... 51
SECTION 604. Not Responsible for Recitals or Issuance of
Securities....................................... 52
SECTION 605. May Hold Securities................................ 52
SECTION 606. Money Held in Trust................................ 53
SECTION 607. Compensation and Reimbursement..................... 53
SECTION 608. Disqualification; Conflicting Interests............ 54
SECTION 609. Corporate Trustee Required; Eligibility............ 54
SECTION 610. Resignation and Removal; Appointment of
Successor........................................ 54
SECTION 611. Acceptance of Appointment by Successor............. 56
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business......................................... 57
SECTION 613. Preferential Collection of Claims Against
Company.......................................... 58
SECTION 614. Appointment of Authenticating Agent................ 58

ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.......................................... 60
SECTION 702. Preservation of Information; Communications to
Holders.......................................... 60
SECTION 703. Reports by Trustee................................. 61
SECTION 704. Reports by Company................................. 61

ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms............................................ 62
SECTION 802. Successor Substituted.............................. 63
</TABLE>
<PAGE> 7

v
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE NINE
SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of
Holders.......................................... 63
SECTION 902. Supplemental Indentures with Consent of Holders.... 64
SECTION 903. Execution of Supplemental Indentures............... 65
SECTION 904. Effect of Supplemental Indentures.................. 65
SECTION 905. Conformity with Trust Indenture Act................ 66
SECTION 906. Reference in Securities to Supplemental
Indentures....................................... 66

ARTICLE TEN
COVENANTS

SECTION 1001. Payment of Principal, Premium and Interest......... 66
SECTION 1002. Maintenance of Office or Agency.................... 66
SECTION 1003. Money for Securities Payments to Be Held in
Trust............................................ 67
SECTION 1004. Statement by Officers as to Default................ 68
SECTION 1005. Existence.......................................... 69
SECTION 1006. Limitations on Liens............................... 69
SECTION 1007. Restriction of Sale-Leaseback Transaction.......... 71
SECTION 1008. Waiver of Certain Covenants........................ 72

ARTICLE ELEVEN
REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article........................... 73
SECTION 1102. Election to Redeem; Notice to Trustee.............. 73
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed......................................... 73
SECTION 1104. Notice of Redemption............................... 74
SECTION 1105. Deposit of Redemption Price........................ 74
SECTION 1106. Securities Payable on Redemption Date.............. 75
SECTION 1107. Securities Redeemed in Part........................ 75

ARTICLE TWELVE
SINKING FUNDS

SECTION 1201. Applicability of Article........................... 76
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities....................................... 76
SECTION 1203. Redemption of Securities for Sinking Fund.......... 76
</TABLE>
<PAGE> 8

vi
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE THIRTEEN

DEFEASANCE

SECTION 1301. Applicability of Article........................... 77
SECTION 1302. Legal Defeasance................................... 77
SECTION 1303. Covenant Defeasance................................ 79
SECTION 1304. Application by Trustee of Funds Deposited for
Payment of Securities............................ 80
SECTION 1305. Repayment to Company............................... 81
</TABLE>

Note: This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE> 9

INDENTURE dated as of March 4, 1997, between TENNESSEE GAS PIPELINE COMPANY, a
corporation duly organized and existing under the laws of Delaware (the
"Company"), having its principal office at 1001 Louisiana, Houston, Texas, and
THE CHASE MANHATTAN BANK, a New York banking corporation, as Trustee (the
"Trustee").

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured debentures, notes
or other evidences of indebtedness (the "Securities"), to be issued in one or
more series as in this Indenture provided.

All things necessary to make this Indenture a valid agreement of the Company,
in accordance with its terms, have been done.

This Indenture is subject to the provisions of the Trust Indenture Act that
are required to be a part of this Indenture and, to the extent applicable, shall
be governed by such provisions.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Securities by
the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of any series thereof, as follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions.

For all purposes of this Indenture, except as otherwise expressly provided or
unless the context otherwise requires:

(1) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;

(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;

(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally
<PAGE> 10

accepted accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted in the United States at the date of such computation;

(4) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and

(5) the words "Article" and "Section" refer to an Article and Section,
respectively, of this Indenture.

"Act", when used with respect to any Holder, has the meaning specified in
Section 104.

"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 the purposes of this definition,
"control" when used with respect to any specified 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" have meanings correlative to the
foregoing.

"Alternate Program" means any program providing for the financing, sale or
other disposition of trade or other receivables classified as current assets in
accordance with United States generally accepted accounting principles entered
into by the Company or a Subsidiary (or for purposes of Section 1006 only, any
Restricted Affiliate), provided that such program is on terms customary for
similar transactions.

"Authenticating Agent" means any Person authorized by the Trustee pursuant to
Section 614 to act on behalf of the Trustee to authenticate Securities of one or
more series.

"Authorized Newspaper" means a newspaper, in the English language or in an
official language of the country of publication, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place.

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

"Board of Directors" means the board of directors of the Company, or the
executive or any other committee of that board duly authorized to act in respect
thereof.

"Board Resolution" means a copy of a resolution certified by the Secretary or
an Assistant Secretary of the Company, the principal financial officer of the
Company or any other authorized officer of the Company or a person duly
authorized by any of them, to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.

"Business Day", when used with respect to any Place of Payment or other
location, means, except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in that
Place of Payment or other location are authorized or obligated by law, executive
order or regulation to close.

"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

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

"Company Request" or "Company Order" means a written request or order signed
in the name of the Company by its Chairman of the Board, its Chief Executive
Officer, its President, any of its Vice Presidents or any other authorized
officer of the Company or a person duly authorized by any of them, and delivered
to the Trustee.

"Consolidated Net Tangible Assets" means, at any date of determination, the
total amount of assets after deducting therefrom (i) all current liabilities
(excluding (A) any current liabilities that by their terms are extendable or
renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed, and (B) current
maturities of long-term debt), and (ii) the value (net of any applicable
reserves) of all goodwill, trade names, trademarks, patents and other
<PAGE> 12

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 generally accepted
accounting principles.

"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which at the date hereof is 450 West 33rd Street, New York, NY 10001.

"corporation" includes corporations, associations, partnerships, limited
liability companies, joint-stock companies and business trusts.

"covenant defeasance" has the meaning specified in Section 1303.

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

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

"Default" means, with respect to a series of Securities, any event which is,
or after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.

"Defaulted Interest" has the meaning specified in Section 307.

"defeasance" has the meaning specified in Section 1302.

"Definitive Security" means a Security other than a Global Security or a
temporary Security.

"Depositary" means, with respect to Securities of any series issuable in whole
or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301, until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter shall mean or include each Person which is then a Depositary
hereunder, and if at any time there is more than one such Person, shall be a
collective reference to such Persons.

"Dollar" or "$" means the coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts.
<PAGE> 13

"Event of Default" has the meaning specified in Section 501.

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

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

"Global Security" means a Security in global form that evidences all or part
of the Securities of any series and is authenticated and delivered to, and
registered in the name of, the Depositary for such Securities or a nominee
thereof.

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

"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument, and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" also shall include the terms of particular series of Securities
established as contemplated by Section 301.

"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.

"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.

"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.
<PAGE> 14

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

"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.

"Notice of Default" means a written notice of the kind specified in Section
501(3).

"Officer's Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President or any
other authorized officer of the Company or a person duly authorized by any of
them, and delivered to the Trustee. The officer signing an Officer's Certificate
given pursuant to Section 1004 shall be the principal executive, financial or
accounting officer of the Company.

"Opinion of Counsel" means a written opinion of legal counsel, who may be an
employee of or counsel for the Company and who shall be reasonably acceptable to
the Trustee.

"Original Issue Discount Security" means any Security which provides for an
amount less than the stated principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.

"Outstanding", when used with respect to Securities, means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:

(1) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;

(2) Securities for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent (other
than the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities; provided, however, that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;

(3) Securities which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Securities have been authenticated
<PAGE> 15

and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company; and

(4) Securities, except to the extent provided in Sections 1302 and 1303,
with respect to which the Company has effected defeasance or covenant
defeasance as provided in Article Thirteen;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (A) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof on such date pursuant to Section 502, (B) the principal amount of a
Security denominated in one or more currencies or currency units other than U.S.
dollars shall be the U.S. dollar equivalent of such currencies or currency
units, determined in the manner provided as contemplated by Section 301 on the
date of original issuance of such Security, of the principal amount (or, in the
case of an Original Issue Discount Security, the U.S. dollar equivalent (as so
determined) on the date of original issuance of such Security of the amount
determined as provided in Clause (A) above) of such Security, and (C) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned as described in Clause (C)
above which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.

"Paying Agent" means any Person authorized by the Company to pay the principal
of or any premium or interest on any Securities on behalf of the Company.

"Periodic Offering" means an offering of Securities of a series from time to
time, the specific terms of which Securities, including, without limitation, the
<PAGE> 16

rate or rates of interest or formula for determining the rate or rates of
interest thereon, if any, the Stated Maturity or Stated Maturities thereof, the
original issue date or dates thereof, the redemption provisions, if any, with
respect thereto, and any other terms specified as contemplated by Section 301
with respect thereto, are to be determined by the Company upon the issuance of
such Securities.

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

"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, other
entity,
<PAGE> 17

unincorporated organization or government or any agency or political
subdivision thereof.

"Place of Payment", when used with respect to the Securities of any series,
means, unless otherwise specifically provided for with respect to such series as
contemplated by Section 301, the office or agency of the Company in The City of
New York and such other place or places where, subject to the provisions of
Section 1002, the principal of and any premium and interest on the Securities of
that series are payable as specified as contemplated by Section 301.

"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

"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.

"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", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.

"Regular Record Date" for the interest payable on any Interest Payment Date on
the Securities of any series means the date specified for that purpose as
contemplated by Section 301.

"Restricted Affiliate" means any Affiliate of the Company (other than a
Subsidiary) designated by the Company as a "Restricted Affiliate" by written
notice to the Trustee; provided that such Affiliate shall not become a
Restricted Affiliate until such time that (a) such Affiliate executes a guaranty
(in form and substance reasonably satisfactory to the Trustee) in favor of the
<PAGE> 18

Trustee, for the ratable benefit of the Holders, guaranteeing the prompt and
complete payment by TGP when due (whether at the stated maturity, by
acceleration or otherwise) of the Securities; and (b) the Trustee receives an
Opinion of Counsel reasonably acceptable to the Trustee, which shall be in form
and substance satisfactory to the Trustee; provided further, however, that after
such time as such Affiliate becomes a Restricted Affiliate, the Company may
terminate the designation of such Affiliate as a Restricted Affiliate by written
notice to the Trustee at which time the aforementioned guaranty of such
Affiliate shall also terminate.

"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" has the meaning stated in the first recital of this Indenture and
more particularly means any Securities authenticated and delivered under this
Indenture.

"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.

"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 307.

"Stated Maturity", when used with respect to any Security or any installment
of principal thereof or interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.

"Subsidiary" means a corporation more than 50% of the outstanding voting stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries, or by the Company and one or more other Subsidiaries. For
the purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.

"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the
date as of which this instrument was executed, except as otherwise
<PAGE> 19

provided in Section 905; provided, however, that if the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.

"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean each Trustee with respect to Securities of that series.

"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged, or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, each of which are not callable or redeemable at the option of the
issuer thereof.

"Vice President", when used with respect to the Company or Trustee, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president".

SECTION 102. Compliance Certificates and Opinions.

Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates or opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officer's Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 1004) shall include:

(1) a statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating thereto;
<PAGE> 20

(2) 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;

(3) a statement that, in the opinion of each such individual, 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

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

SECTION 103. Form of Documents Delivered to Trustee.

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

Any certificate or opinion of an officer of the Company may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

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

SECTION 104. Acts of Holders; Record Dates.

Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
<PAGE> 21

substantially similar tenor signed (either physically or by means of a facsimile
or an electronic transmission, provided that such electronic transmission is
transmitted through the facilities of a Depositary) by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered (either physically or by means of a facsimile or an electronic
transmission, provided that such electronic transmission is transmitted through
the facilities of a Depositary) to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 315 of the
Trust Indenture Act) conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section.

The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.

The ownership, principal amount and serial numbers of Securities held by any
Person, and the date of commencement of such Person's holding the same, shall be
proved by the Security Register.

Any request, demand, authorization, direction, notice, consent, waiver or
other action of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.

Without limiting the foregoing, a Holder entitled hereunder to give or take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
<PAGE> 22

more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any different part of such principal amount.

The Company may set any day as the record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Securities of such series, but the Company shall have no obligation to do so.
With regard to any record date set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to give or take the
relevant action, whether or not such Holders remain Holders after such record
date.

SECTION 105. Notices, Etc., to Trustee and Company.

Any request, demand, authorization, direction, notice, consent, waiver or Act
of Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,

(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trustee
Administration Department, or

(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to
it at 1001 Louisiana, Houston, Texas 77002, to the attention of the Secretary,
or at any other address previously furnished in writing to the Trustee by the
Company.

SECTION 106. Notice to Holders; Waiver.

Where this Indenture provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid (if international mail, by air
mail), to each Holder affected by such event, at his address as it appears in
the Security Register, not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders. Any
notice
<PAGE> 23

mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.

Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.

SECTION 107. Conflict with Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts with a provision of the
Trust Indenture Act that is required under such Act to be a part of and govern
this Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or excluded, as the case may be.

SECTION 108. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

SECTION 109. Successors and Assigns.

All covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not.

SECTION 110. Separability Clause.

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 111. Benefits of Indenture.

Nothing in this Indenture or in the Securities, express or implied, shall give
to any Person, other than the parties hereto and their successors hereunder and
<PAGE> 24

the Holders, any benefit or any legal or equitable right, remedy or claim under
this Indenture.

SECTION 112. Governing Law.

THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

SECTION 113. Legal Holidays.

In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.

SECTION 114. Language of Notices, Etc.

Any request, demand, authorization, direction, notice, consent, waiver or Act
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.

SECTION 115. Incorporators, Stockholders, Officers and Directors of the
Company Exempt from Individual Liability.

No recourse under or upon any obligation, covenant or agreement of or
contained in this Indenture or of or contained in any Security, or for any claim
based thereon or otherwise in respect thereof, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or any successor Person, either directly or through the
Company or any successor Person, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that all such liability is hereby expressly waived
and released as a condition of, and as a part of the consideration for, the
execution of this Indenture and the issue of the Securities.
<PAGE> 25

ARTICLE TWO

SECURITY FORMS

SECTION 201. Forms Generally.

The Securities of each series shall be in substantially the form set forth in
this Article, or in such other form as shall be established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.

The definitive Securities shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by an authorized officer or other authorized person on
behalf of the Company and delivered to the Trustee at or prior to the delivery
of the Company Order contemplated by Section 303 for the authentication and
delivery of such Securities.

SECTION 202. Form of Face of Security.

[Insert any legend required by the United States Internal Revenue Code and the
regulations thereunder.]
<PAGE> 26

[If a Global Security, -- insert legend required by Section 204 of the
Indenture] [If applicable, insert -- UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
<PAGE> 27

TENNESSEE GAS PIPELINE COMPANY

[TITLE OF SECURITY]

NO.
- ------------------------ U.S.$
[CUSIP NO.
- --------------------]

TENNESSEE GAS PIPELINE COMPANY, a corporation duly incorporated and existing
under the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [ ], or registered assigns, the
principal sum of [ ] United States Dollars on [ ] [if the
Security is to bear interest prior to Maturity, insert -- , and to pay interest
thereon from [ ], or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on
[ ] and [ ] in each year, commencing [ ], at
the rate of [ ]% per annum, until the principal hereof is paid or made
available for payment] [if applicable, insert -- , and at the rate of [ ]%
per annum on any overdue principal and premium and on any overdue installment of
interest]. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the [ ] or [ ] (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice of
which shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in such Indenture].

[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
<PAGE> 28

Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of [ ]% per annum, which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of [ ]% per annum, which shall accrue from the
date of such demand for payment to the date payment of such interest has been
made or duly provided for, and such interest shall also be payable on demand.]

[If a Global Security, insert -- Payment of the principal of [(and premium, if
any)] and [if applicable, insert -- any such] interest on this Security will be
made by transfer of immediately available funds to a bank account in [
] designated by the Holder in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts [state other currency].]

[If a Definitive Security insert -- Payment of the principal of [(and premium,
if any)] and [if applicable, insert -- any such] interest on this Security will
be made at the office or agency of the Company maintained for that purpose in ,
[in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts] [state other
currency] [or subject to any laws or regulations applicable thereto and to the
right of the Company (as provided in the Indenture) to rescind the designation
of any such Paying Agent, at the [main] offices of [ ] in
[ ] and in [ ], or at such other offices or agencies as the
Company may designate, by [United States Dollar] [state other currency] check
drawn on, or transfer to a [United States Dollar] account maintained by the
payee with, a bank in The City of New York [ ] (so long as the applicable
Paying Agent has received proper transfer instructions in writing at least [ ]
days prior to the payment date)] [if applicable, insert -- ; provided, however,
that payment of interest may be made at the option of the Company by [United
States Dollar] [state other currency] check mailed to the addresses of the
Persons entitled thereto as such addresses shall appear in the Security
Register] [or by transfer to a [United States Dollar] [state other currency]
account maintained by the payee with a bank in The City of New York [state other
Place of Payment] (so long as the applicable Paying Agent has received proper
transfer instructions in writing by the Record Date prior to the applicable
Interest Payment Date)].]
<PAGE> 29

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.

Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:

TENNESSEE GAS PIPELINE COMPANY

BY:
----------------------------------
[TITLE]

SECTION 203. Form of Reverse of Security.

This Security is one of a duly authorized issue of securities of the Company
(the "Securities"), issued and to be issued in one or more series under an
Indenture dated as of March 4, 1997 (the "Indenture"), between the Company and
The Chase Manhattan Bank, as Trustee (the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. As
provided in the Indenture, the Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking, purchase or analogous funds, if any, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided or permitted. This Security is one of the series designated on the face
hereof [if applicable, insert -- , limited in aggregate principal amount to
U.S.$ ].
<PAGE> 30

[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, [if
applicable, insert -- (1) on [ ] in any year commencing with the year
[ ] and ending with the year [ ] through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [if applicable, insert -- on or after [ ], ], as
a whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): If redeemed [if
applicable, insert -- on or before [ ], [ ]%, and if redeemed]
during the 12-month period beginning [ ] of the years indicated,

<TABLE>
<CAPTION>
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
---- ---------- ---- ----------
<S> <C> <C> <C>

</TABLE>

and thereafter at a Redemption Price equal to [ ]% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]

[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, (1) on
[ ] in any year commencing with the year [ ] and ending with
the year [ ] through operation of the sinking fund for this series at
the Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [if applicable, insert -- on or after [ ], ],
as a whole or in part, at the election of the Company, at the Redemption Prices
for redemption otherwise than through operation of the sinking fund (expressed
as percentages of the principal amount) set forth in the table below: If
<PAGE> 31

redeemed during the 12-month period beginning [ ] of the years
indicated,

<TABLE>
<CAPTION>
REDEMPTION PRICE REDEMPTION PRICE FOR
FOR REDEMPTION REDEMPTION OTHERWISE THAN
THROUGH OPERATION THROUGH OPERATION
YEAR OF THE SINKING FUND OF THE SINKING FUND PRICE
---- ------------------- -------------------------
<S> <C> <C>

</TABLE>

and thereafter at a Redemption Price equal to [ ]% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

[If applicable, insert -- The sinking fund for this series provides for the
redemption on [ ] in each year beginning with the year [ ]
and ending with the year [ ] of [if applicable, -- not less than
$ ("mandatory sinking fund") and not more than] $ aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [if
applicable, -- mandatory] sinking fund payments may be credited against
subsequent [if applicable, -- mandatory] sinking fund payments otherwise
required to be made [if applicable, -- in the inverse order in which they become
due].]

[If the Security is subject to redemption in part of any kind, insert -- In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]

[If applicable, insert -- The Securities of this series are not redeemable
prior to Stated Maturity.]
<PAGE> 32

[If the Security is not an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]

[If the Security is an Original Issue Discount Security, insert -- If an Event
of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable,
and (ii) of interest on any overdue principal and overdue interest, all of the
Company's obligations in respect of the payment of the principal of and
interest, if any, on the Securities of this series shall terminate.]

The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series to be affected (voting as one class). The
Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Outstanding Securities of all affected series
(voting as one class), on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture. The Indenture permits, with certain exceptions as therein provided,
the Holders of a majority in principal amount of Securities of all affected
series then Outstanding (voting as a single class) to waive past defaults under
the Indenture with respect to such Securities and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

this series, the Holders of not less than 25% in principal amount of the
Securities of all affected series at the time Outstanding (treated as a single
class) shall have made written request to the Trustee to institute proceedings
in respect of such Event of Default as Trustee and offered the Trustee
reasonable indemnity and the Trustee shall not have received from the Holders of
a majority in principal amount of Securities of this series at the time
Outstanding a direction inconsistent with such request, and shall have failed to
institute any such proceeding, for 60 days after receipt of such notice, request
and offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof or [any premium or] interest hereon on or after the respective due dates
expressed herein.

No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and [any premium and]
interest on this Security at the times, place(s) and rate, and in the coin or
currency, herein prescribed.

[If a Global Security, insert -- This Global Security or portion hereof may
not be exchanged for Definitive Securities of this series except in the limited
circumstances provided in the Indenture.

The holders of beneficial interests in this Global Security will not be
entitled to receive physical delivery of Definitive Securities except as
described in the Indenture and will not be considered the Holders thereof for
any purpose under the Indenture.]

[If a Definitive Security, insert -- As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is
registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company in [if
applicable, insert -- any place where the principal of and any premium and
interest on this Security are payable] [if applicable, insert -- The City of New
York[, or, subject to any laws or regulations applicable thereto and to the
right of the Company (limited as provided in the Indenture) to rescind the
designation of any such transfer agent, at the [main] offices of
in and in or at
such other offices or agencies as the Company may designate]], duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized
<PAGE> 34

in writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.]

The Securities of this series are issuable only in registered form without
coupons in denominations of U.S. $ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

No recourse under or upon any obligation, covenant or agreement of or
contained in the Indenture or of or contained in any Security, or for any claim
based thereon or otherwise in respect thereof, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor Person, either directly or through
the Company or any successor Person, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment, penalty or
otherwise; it being expressly understood that all such liability is hereby
expressly waived and released by the acceptance hereof and as a condition of,
and as part of the consideration for, the Securities and the execution of the
Indenture.

The Indenture provides that the Company (a) will be discharged from any and
all obligations in respect of the Securities (except for certain obligations
described in the Indenture), or (b) need not comply with certain restrictive
covenants of the Indenture, in each case if the Company deposits, in trust, with
the Trustee money or U.S. Government Obligations (or a combination thereof)
which through the payment of interest thereon and principal thereof in
accordance with their terms will provide money, in an amount sufficient to
<PAGE> 35

pay all the principal of and interest on the Securities, but such money need not
be segregated from other funds except to the extent required by law.

This Security shall be governed by and construed in accordance with the laws
of the State of New York.

All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.

[If a Definitive Security, insert as a separate page --

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

------------------------------------------------------------
(Please Print or Typewrite Name and Address of Assignee)

the within instrument of TENNESSEE GAS PIPELINE COMPANY and does hereby
irrevocably constitute and appoint
- -------------------------------Attorney to transfer said instrument on the books
of the within-named Company, with full power of substitution in the premises.

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE:
Dated: -------------------------------------
Signature

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.]

SECTION 204. Global Securities.

Every Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:

ITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED
AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU
OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT
IN SUCH LIMITED CIRCUMSTANCES.

If Securities of a series are issuable in whole or in part in the form of one
or more Global Securities, as specified in or as contemplated by Section 301,
then, notwithstanding Clause (9) of Section 301 and the provisions of Section
302, any Global Security shall represent such of the Outstanding Securities of
such series as shall be specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced or increased, as the case
may be, to reflect exchanges. Any endorsement of a Global Security to reflect
the amount, or any reduction or increase in the amount, of Outstanding
Securities represented thereby shall be made in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in
a Company Order. Subject to the provisions of Sections 303, 304 and 305, the
Trustee shall deliver and redeliver any Global Security in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. Any instructions by the Company with respect to
endorsement or delivery or redelivery of a Global Security shall be in a Company
Order (which need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel).

The provisions of the last sentence of Section 303 shall apply to any Security
represented by a Global Security if such Security was never issued and sold by
the Company and the Company delivers to the Trustee the Global Security together
with a Company Order (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) with regard to the reduction or increase,
as the case may be, in the principal amount of Securities represented thereby,
together with the written statement contemplated by the last sentence of Section
303.

SECTION 205. Form of Trustee's Certificate of Authentication.

The Trustee's certificates of authentication shall be in substantially the
following form:
<PAGE> 37

This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.

THE CHASE MANHATTAN BANK,
AS TRUSTEE

By:

----------------------------------
Authorized Officer

ARTICLE THREE

THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. There shall be established
in or pursuant to a Board Resolution and, subject to Section 303, set forth, or
determined in the manner provided, in an Officer's Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series,

(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from Securities of any other series);

(2) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906 or 1107 and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder);

(3) the Person to whom any interest on a Security of the series shall be
payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;

(4) the date or dates on which the principal of the Securities of the series
is payable or the method of determination thereof;

(5) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method of determination thereof, the date or dates
<PAGE> 38

from which such interest shall accrue, or the method of determination thereof,
the Interest Payment Dates on which any such interest shall be payable and the
Regular Record Date for any interest payable on any Interest Payment Date;

(6) the place or places where, subject to the provisions of Section 1002,
the principal of and any premium and interest on Securities of the series
shall be payable, Securities of the series may be surrendered for registration
of transfer, Securities of the series may be surrendered for exchange and
notices, and demands to or upon the Company in respect of the Securities of
the series and this Indenture may be served;

(7) the period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series may be redeemed, in
whole or in part, at the option of the Company;

(8) the obligation, if any, of the Company to redeem or purchase Securities
of the series pursuant to any sinking fund or analogous provisions or upon the
happening of a specified event or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;

(9) if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which Securities of the series shall be issuable;

(10) the currency, currencies or currency units in which payment of the
principal of and any premium and interest on any Securities of the series
shall be payable if other than the currency of the United States of America
and the manner of determining the equivalent thereof in the currency of the
United States of America for purposes of the definition of "Outstanding" in
Section 101;

(11) if the amount of payments of principal of or any premium or interest on
any Securities of the series may be determined with reference to an index, the
manner in which such amounts shall be determined;

(12) if the principal of or any premium or interest on any Securities of the
series is to be payable, at the election of the Company or a Holder thereof,
in one or more currencies or currency units other than that or those in which
the Securities are stated to be payable, the currency, currencies or currency
units in which payment of the principal of and any premium and interest on
Securities of such series as to which such election is made shall be payable,
and the periods within which and the terms and conditions upon which such
election is to be made;

(13) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
<PAGE> 39

declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the method of determination thereof;

(14) if and as applicable, that the Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities and,
in such case, the Depositary or Depositaries for such Global Security or
Global Securities and any circumstances other than those set forth in Section
305 in which any such Global Security may be transferred to, and registered
and exchanged for Securities registered in the name of, a Person other than
the Depositary for such Global Security or a nominee thereof and in which any
such transfer may be registered;

(15) any deletions from, modifications of or additions to the Events of
Default set forth in Section 501 or the covenants of the Company set forth in
Article Ten pertaining to the Securities of the series;

(16) if other than as provided in Sections 1302 and 1303, the means of
defeasance or covenant defeasance as may be specified for the Securities of
the series;

(17) if other than the Trustee, the identity of the Security Registrar and
any Paying Agent; and

(18) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by Section 901(4)).

All Securities of any one series shall be substantially identical except as to
denomination and except as may otherwise be provided in or pursuant to the Board
Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officer's Certificate referred to
above or in any such indenture supplemental hereto.

All Securities of any one series need not be issued at the same time and,
unless otherwise provided, a series may be reopened, without the consent of the
Holders, for increases in the aggregate principal amount of such series of
Securities and issuances of additional Securities of such series or for the
establishment of additional terms with respect to the Securities of such series.

If any of the terms of the series are established by action taken by or
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by an authorized officer or other authorized person on behalf
of the Company and delivered to the Trustee at or prior to the delivery of the
Officer's Certificate setting forth, or providing the manner for determining,
the terms of the series.
<PAGE> 40

With respect to Securities of a series subject to a Periodic Offering, such
Board Resolution or Officer's Certificate may provide general terms for
Securities of such series and provide either that the specific terms of
particular Securities of such series shall be specified in a Company Order or
that such terms shall be determined by the Company, or one or more of the
Company's agents designated in an Officer's Certificate, in accordance with a
Company Order.

SECTION 302. Denominations.

The Securities of each series shall be issuable only in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such specified denomination with respect to
the Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.

SECTION 303. Execution, Authentication, Delivery and Dating.

The Securities shall be executed on behalf of the Company by its Chairman of
the Board, its Chief Executive Officer, its Chief Financial Officer, its
President or any Vice President and need not be attested. The signature of any
of these officers on the Securities may be manual or facsimile.

Securities bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities; provided,
however, that in the case of Securities offered in a Periodic Offering, the
Trustee shall authenticate and deliver such Securities from time to time in
accordance with such other procedures (including, without limitation, the
receipt by the Trustee of oral or electronic instructions from the Company or
its duly authorized agents, thereafter promptly confirmed in writing) acceptable
to the Trustee as may be specified by or pursuant to a Company Order delivered
to the Trustee prior to the time of the first authentication of Securities of
such series. If the form or terms of the
<PAGE> 41

Securities of the series have been established in or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,

(1) if the form or forms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 201, that such form or
forms have been established in conformity with the provisions of this
Indenture;

(2) if the terms of such Securities have been, or in the case of Securities
of a series offered in a Periodic Offering, will be, established by or
pursuant to a Board Resolution as permitted by Section 301, that such terms
have been, or in the case of Securities of a series offered in a Periodic
Offering, will be, established in conformity with the provisions of this
Indenture, subject, in the case of Securities of a series offered in a
Periodic Offering, to any conditions specified in such Opinion of Counsel; and

(3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.

If such form or forms or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

Notwithstanding the provisions of Section 301 and of the preceding paragraph,
if all Securities of a series are not to be originally issued at one time, it
shall not be necessary to deliver the Officer's Certificate otherwise required
pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the time of
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
<PAGE> 42

With respect to Securities of a series offered in a Periodic Offering, the
Trustee may rely, as to the authorization by the Company of any of such
Securities, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and the
other documents delivered pursuant to Sections 201 and 301 and this Section, as
applicable, in connection with the first authentication of Securities of such
series.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309 for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.

SECTION 304. Temporary Securities.

Pending the preparation of Definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the Definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.

If temporary Securities of any series are issued, the Company will cause
Definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of Definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for Definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company maintained pursuant to Section 1002 for the
purpose of exchanges of Securities of such series, without charge to the Holder.
Upon
<PAGE> 43

surrender for cancellation of any one or more temporary Securities of any series
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more Definitive Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor.
Until so exchanged the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as Definitive Securities
of such series and tenor.

SECTION 305. Registration, Registration of Transfer and Exchange.

The Company shall cause to be kept at an office or agency of the Company in
The City of New York a register (the register maintained in such office or in
any other office or agency of the Company in a Place of Payment being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Company will,
prior to the issuance of any Securities hereunder, appoint the Trustee as the
initial "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided and its corporate trust office which,
at the date hereof, is located at 450 West 33rd Street, New York, New York 10001
as the initial office or agency in The City of New York where the Security
Register will be maintained. The Company may at any time replace such Security
Registrar, change such office or agency or act as its own Security Registrar.
The Company will give prompt written notice to the Trustee of any change of the
Security Registrar or of the location of such office or agency.

Upon surrender for registration of transfer of any Security of any series at
the office or agency of the Company maintained pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and tenor.

At the option of the Holder, Securities of any series (except a Global
Security) may be exchanged for other Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
<PAGE> 44

All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.

The Company shall not be required (1) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (2) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.

Notwithstanding any other provision in this Indenture and except as otherwise
specified as contemplated by Section 301, no Global Security may be transferred
to, or registered or exchanged for Securities registered in the name of, any
Person other than the Depositary for such Global Security or any nominee
thereof, and no such transfer may be registered, except as provided in this
paragraph. Every Security authenticated and delivered upon registration or
transfer of, or in exchange for or in lieu of, a Global Security shall be a
Global Security, except as provided in this paragraph. If (1) (A) the Depositary
for a Global Security notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or ceases to be a clearing
agency registered under the Exchange Act, and (B) a successor Depositary is not
appointed by the Company within 90 days, or (2) the Company determines in its
sole discretion that Securities of a series issued in global form shall no
longer be represented by a Global Security, then such Global Security may be
exchanged by such Depositary for Definitive Securities of the same series, of
any authorized denomination and of a like aggregate principal amount and
<PAGE> 45

tenor, registered in the names of, and the transfer of such Global Security or
portion thereof may be registered to, such Persons as such Depositary shall
direct.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

If any mutilated Security is surrendered to the Trustee, together with, in
proper cases, such security or indemnity as may be required by the Company or
the Trustee to save each of them and any agent of either of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

Every new Security of any series issued pursuant to this Section in exchange
for any mutilated Security or in lieu of any destroyed, lost or stolen Security
shall constitute an original additional contractual obligation of the Company,
whether or not the mutilated, destroyed, lost or stolen Security shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series duly issued hereunder.
<PAGE> 46

The provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities.

SECTION 307. Payment of Interest; Interest Rights Preserved.

Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed
in the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security of such
series and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Securities of such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so
<PAGE> 47

mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).

(2) The Company may make payment of any Defaulted Interest on the Securities
of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed practicable by the
Trustee.

Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.

SECTION 308. Persons Deemed Owners.

Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, prior to due presentment of a Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Security is registered as
the owner of such Security for the purpose of receiving payment of principal of
and any premium and (subject to Sections 305 and 307) any interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.

No holder of any beneficial interest in any Global Security held on its behalf
by a Depositary shall have any rights under this Indenture with respect to such
Global Security, and such Depositary may be treated by the Company, the Trustee,
and any agent of the Company or the Trustee as the owner of such Global Security
for all purposes whatsoever. None of the Company, the Trustee nor any agent of
the Company or the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
<PAGE> 48

SECTION 309. Cancellation.

All Securities surrendered for payment, redemption, registration of transfer
or exchange or for credit against any sinking fund payment shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of in accordance with its customary procedures, and
the Trustee shall thereafter deliver to the Company a certificate with respect
to such disposition.

SECTION 310. Computation of Interest.

Except as otherwise specified in or as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

SECTION 311. CUSIP Numbers.

The Company in issuing the Securities may use "CUSIP" numbers (in addition to
the other identification numbers printed on the Securities), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such "CUSIP" 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 "CUSIP" numbers.
<PAGE> 49

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

This Indenture shall upon Company Request cease to be of further effect with
respect to Securities of any series (except as to any surviving rights of
registration of transfer or exchange of such Securities herein expressly
provided for), and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to such Securities, when

(1) either

(A) all such Securities theretofore authenticated and delivered (other
than (i) such Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306, and (ii) such
Securities for whose payment money or U.S. Government Obligations has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust,
as provided in Section 1003) have been delivered to the Trustee for
cancellation; or

(B) all such Securities not theretofore delivered to the Trustee for
cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated Maturity within one
year, or

(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,

and the Company in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount of money in the currency or currency units in which such
Securities are payable or, if such Securities are payable in United States
Dollars, U.S. Government Obligations sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal and any premium and interest to the
date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;

(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to such Securities; and
<PAGE> 50

(3) the Company has delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture with respect
to such Securities have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture with respect
to Securities of any series, (x) the obligations of the Company to the Trustee
under Section 607, the obligations of the Trustee to any Authenticating Agent
under Section 614 and the right of the Trustee to resign under Section 610 shall
survive, and (y) if money or U.S. Government Obligations shall have been
deposited with the Trustee pursuant to subclause (B) of clause (1) of this
Section, the obligations of the Company and/or the Trustee under Sections 402,
606, 701 and 1002 and the last paragraph of Section 1003 shall survive.

SECTION 402. Application of Trust Money.

Subject to the provisions of the last paragraph of Section 1003, all money and
U.S. Government Obligations deposited with the Trustee pursuant to Section 401
shall be held in trust and applied by it, in accordance with the provisions of
the Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money or U.S. Government Obligations
has been deposited with the Trustee.

ARTICLE FIVE

REMEDIES

SECTION 501. 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):

(1) default in the payment of any interest upon any Security of that series
when it becomes due and payable, and continuance of such default for a period
of 30 days; or
<PAGE> 51

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

(3) default in the performance, or breach, of any 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 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 all series outstanding (or, if any
such term, covenant or warranty is not applicable to all series of Securities,
by the Holders of at least 25% in principal amount of the Outstanding
Securities of all series to which it is applicable) (in each case treated as a
single class) 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

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

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

(6) any other Event of Default provided as contemplated by Section 301 with
respect to Securities of that series.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

If an Event of Default of the type described in clauses (1), (2), (3) or (6)
of Section 501 occurs and is continuing, then, and in each and every such case,
except for any series of Securities the principal of which shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities of all affected series then
Outstanding hereunder (voting as a single class) by notice in writing to the
Company (and to the Trustee if given by Holders), may declare the entire
principal (or, if the Securities of any such affected series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
<PAGE> 52

in the terms of such series) of all Securities of all such affected series, and
the interest accrued thereon, if any, to be due and payable immediately, and
upon any such declaration the same shall become immediately due and payable.

If an Event of Default of the type described in clause (4) or (5) of Section
501 occurs and is continuing, then and in each and every such case, except for
any series of Securities the principal of which shall have already become due
and payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of all the Securities then Outstanding hereunder (voting as a
single class), by notice in writing to the Company (and to the Trustee if given
by Holders), may declare the entire principal (or, if Securities of any series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of such series) of all the Securities then
Outstanding, and interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.

At any time after such a declaration of acceleration with respect to
Securities of all affected series has been made and before a judgment or decree
for payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of all such affected series (voting as a single class) by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if

(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay

(A) all overdue interest on all such affected Securities,

(B) the principal of (and premium, if any, on) any such affected
Securities which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed
therefor in such Securities,

(C) to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate or rates prescribed therefor in such
Securities, and

(D) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel;
<PAGE> 53

and

(2) all Events of Default with respect to such affected Securities, other
than the non-payment of the principal of Securities of that series which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.

No such rescission shall affect any subsequent Default or impair any right
consequent thereon.

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

The Company covenants that if

(1) default is made in the payment of any interest on any Security when such
interest becomes due and payable and such default continues for a period of 30
days, or

(2) default is made in the payment of the principal of (or premium, if any,
on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, 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.

If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.

If an Event of Default with respect to Securities of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities of such series by such
<PAGE> 54

appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.

SECTION 504. Trustee May File Proofs of Claim.

In case of any judicial proceeding relative to the Company or any other
obligor upon the Securities, their property or their creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official 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 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 607.

No provision of this Indenture 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; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.

SECTION 505. Trustee May Enforce Claims Without Possession of Securities.

All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the
<PAGE> 55

Holders of the Securities in respect of which such judgment has been recovered.

SECTION 506. Application of Money Collected.

Any money collected by the Trustee pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal or any premium or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under Section 607;

SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and any premium and interest, respectively; and

THIRD: The balance, if any, to the Company.

SECTION 507. Limitation on Suits.

No Holder of any Security of any series shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless

(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;

(2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of all affected series (treated as a single class) shall have made
written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;

(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and

(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
<PAGE> 56

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.

SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.

Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Sections 305 and
307) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.

SECTION 509. Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

SECTION 510. Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
<PAGE> 57

SECTION 511. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.

SECTION 512. Control by Holders.

The Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series shall have the right to 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 the Trustee, with respect to the
Securities of such series; provided, however, that

(1) such direction shall not be in conflict with any rule of law or with
this Indenture;

(2) the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction; and

(3) subject to the provisions of Section 601, the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith
shall determine that the proceeding so directed would involve the Trustee in
personal liability.

SECTION 513. Waiver of Past Defaults.

The Holders of a majority in aggregate principal amount of the Outstanding
Securities of all series with respect to which an Event of Default shall have
occurred and be continuing (voting as a single class) may on behalf of the
Holders of all such Securities waive any past default hereunder with respect to
such Securities and its consequences, except

(1) a continuing default in the payment of the principal of or any premium
or interest on any such Security, or

(2) a default in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series 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
<PAGE> 58

purpose of this Indenture, but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

SECTION 514. 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, suffered or omitted by
it as Trustee, a court may require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess costs against any such
party litigant, in the manner and to the extent provided in the Trust Indenture
Act; provided, however, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.

SECTION 515. Waiver of Usury, Stay or Extension Laws.

The Company covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any usury, stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

ARTICLE SIX

THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities.

The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.
<PAGE> 59

SECTION 602. Notice of Defaults.

If a Default occurs and is continuing with respect to the Securities of any
series, the Trustee shall, within 90 days after it occurs, transmit, in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
notice of all uncured or unwaived Defaults known to it; provided, however, that,
except in the case of a Default in payment on the Securities of any series, the
Trustee may withhold the notice if and so long as the board of directors, the
executive committee or a trust committee of its directors and/or its duly
authorized officers in good faith determines that withholding such notice is in
the interests of Holders of Securities of such series; provided further,
however, that, in the case of any default or breach of the character specified
in Section 501(3) with respect to the Securities of such series, no such notice
to Holders shall be given until at least 60 days after the occurrence thereof.

SECTION 603. Certain Rights of Trustee.

Subject to the provisions of Section 601:

(1) the Trustee may rely on and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document reasonably believed
by it to be genuine and to have been signed or presented by the proper party
or parties;

(2) any request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order (other
than delivery of any Security to the Trustee for authentication and delivery
pursuant to Section 303, which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors shall be sufficiently
evidenced by a Board Resolution;

(3) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely
upon an Officer's Certificate;

(4) the Trustee may consult with counsel and the written 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;

(5) 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
<PAGE> 60

the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such request
or direction;

(6) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document but the
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;

(7) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder; and

(8) the Trustee may request that the Company deliver an Officer's
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 Officer's Certificate may be signed by any person authorized to sign an
Officer's Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

SECTION 604. Not Responsible for Recitals or Issuance of Securities.

The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness Neither the Trustee nor any Authenticating Agent makes any
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee or any Authenticating Agent shall not be accountable for
the use or application by the Company of Securities or the proceeds thereof.

SECTION 605. May Hold Securities.

The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
<PAGE> 61

SECTION 606. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.

SECTION 607. Compensation and Reimbursement.

The Company agrees

(1) to pay to the Trustee from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);

(2) except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and

(3) to indemnify the Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except those
attributable to its negligence or bad faith.

The obligations of the Company under this Section to compensate the Trustee
and to pay or reimburse the Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Securities upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the Holders of particular Securities.

Without limiting any rights available to the Trustee under applicable law,
when the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 501(4) or Section 501(5), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for such services are intended to constitute expenses of
administration under any applicable Bankruptcy Law.
<PAGE> 62

The provisions of this Section shall survive the satisfaction and discharge of
this Indenture and the defeasance of the Securities.

SECTION 608. Disqualification; Conflicting Interests.

If the Trustee has or shall acquire a conflicting interest within the meaning
of the Trust Indenture Act, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.

SECTION 609. Corporate Trustee Required; Eligibility.

There shall at all times be one or more Trustees hereunder with respect to the
Securities of each series, at least one of which shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus required by the Trust Indenture Act. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of a supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.

SECTION 610. Resignation and Removal; Appointment of Successor.

No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.

The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

The Trustee may be removed at any time with respect to the Securities of any
series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of all series for which such Trustee is acting as
Trustee, delivered to the Trustee and to the Company.
<PAGE> 63

If at any time:

(1) the Trustee shall fail to comply with Section 608 after written request
therefor by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or

(2) the Trustee shall cease to be eligible under Section 609 and shall fail
to resign after written request therefor by the Company or by any such Holder,
or

(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,

then, in any such case, (A) the Company may remove the Trustee with respect to
all Securities, or (B) subject to Section 514, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee with respect to all Securities and the appointment of
a successor Trustee or Trustees.

If the Trustee shall resign, be removed or become incapable of acting, or if a
vacancy shall occur in the office of Trustee for any cause, with respect to the
Securities of one or more series, the Company shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 611. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by
<PAGE> 64

Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.

The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

SECTION 611. Acceptance of Appointment by Successor.

(a) In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.

(b) In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or
<PAGE> 65

change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees as co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.

(c) Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.

(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.

SECTION 612. Merger, Conversion, Consolidation or Succession to Business

Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. 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 authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
<PAGE> 66

SECTION 613. Preferential Collection of Claims Against Company.

If and when the Trustee shall be or become a creditor of the Company (or any
other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

SECTION 614. Appointment of Authenticating Agent.

The Trustee (upon notice to the Company) may appoint an Authenticating Agent
or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon original issue (in accordance with procedures acceptable to
the Trustee) and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any corporation succeeding to all or substantially all
<PAGE> 67

of the corporate agency or corporate trust business of such Authenticating
Agent, shall continue to be an Authenticating Agent, provided such corporation
shall be otherwise eligible under this Section, without the execution or filing
of any paper or any further act on the part of the Trustee or such
Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

Except with respect to an Authenticating Agent appointed at the request of the
Company, the Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed by the Company for such payments,
subject to the provisions of Section 607.

If an appointment with respect to one or more series is made pursuant to this
Section, the Securities of such series may have endorsed thereon, in addition to
the Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:
<PAGE> 68

This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.

THE CHASE MANHATTAN BANK,
AS TRUSTEE

By:

----------------------------------
As Authenticating Agent

By:

----------------------------------
Authorized Officer

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.

The Company will furnish or cause to be furnished to the Trustee

(1) semi-annually, not later than May 15 and November 15 in each year, a
list for each series of Securities, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Securities of such
series as of the preceding April 30 or October 31, as the case may be, and

(2) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such
list is furnished;

provided, however, that if and so long as the Trustee shall be the Security
Registrar for Securities of a series, no such list need be furnished with
respect to such series of Securities.

SECTION 702. Preservation of Information; Communications to Holders.

The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
<PAGE> 69

The rights of the Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.

Every Holder of Securities, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to the names and addresses of Holders made pursuant to the Trust
Indenture Act.

SECTION 703. Reports by Trustee.

The Trustee shall transmit to Holders such reports concerning the Trustee and
its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.

Reports so required to be transmitted at stated intervals of not more than 12
months shall be transmitted no later than July 15 in each calendar year with
respect to the 12-month period ending on the previous May 15, commencing May 15,
1997.

A copy of each such report shall, at the time of such transmission to Holders,
be filed by the Trustee with each stock exchange upon which any Securities are
listed, with the Commission and with the Company. The Company will notify the
Trustee when any Securities are listed on any stock exchange.

SECTION 704. Reports by Company.

The Company shall:

(1) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the
Company is not required to file information, documents or reports pursuant to
either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered
<PAGE> 70

on a national securities exchange as may be prescribed from time to time in
such rules and regulations;

(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations; and

(3) transmit by mail to all Holders, as their names and addresses appear in
the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to
be filed by the Company pursuant to paragraphs (1) and (2) of this Section as
may be required by rules and regulations prescribed from time to time by the
Commission.

ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

The Company shall not consolidate with or merge into any other Person or sell,
lease or transfer its properties and assets as, or substantially as, an entirety
to, any Person, unless:

(1) (A) in the case of a merger, the Company is the surviving entity, or (B)
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, the properties
and assets of the Company as, or substantially as, an entirety 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;

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

(3) where the Company is not the surviving entity, the Company has delivered
to the Trustee an Officer's Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, sale, transfer or lease and the
supplemental indenture required in connection with such transaction comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
<PAGE> 71

SECTION 802. Successor Substituted.

Upon any consolidation of the Company with, or merger of the Company into, any
other Person or any sale, transfer or lease of the properties and assets of the
Company as, or substantially as, an entirety in accordance with Section 801, 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 NINE

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.

Without the consent of any Holders, the Company and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:

(1) to secure the Securities pursuant to the requirements of Section 1006 or
otherwise; or

(2) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and in
the Securities; or

(3) to add to the covenants of the Company or the Events of Default for the
benefit of the Holders of all or any series of Securities (and if such
covenants or Events of Default are to be for the benefit of less than all
series of Securities, stating that such covenants or Events of Default, as the
case may be, are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the Company;
or

(4) to add to, change or eliminate any of the provisions of this Indenture
in respect of one or more series of Securities; provided, however, that any
such addition, change or elimination shall become effective only when there is
no Security Outstanding of any series created prior to the execution of such
supplemental indenture which is entitled to the benefit of such provision; or

(5) to establish the form or terms of Securities of any series as permitted
by Sections 201 and 301; or
<PAGE> 72

(6) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, to comply with any
applicable mandatory provisions of law or to make any other provisions with
respect to matters or questions arising under this Indenture, provided that
such action pursuant to this clause (6) shall not adversely affect the
interests of the Holders of Securities of any series in any material respect;
or

(7) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by
more than one Trustee, pursuant to the requirements of Section 611; or

(8) to modify, eliminate or add to the provisions of this Indenture to such
extent as shall be necessary to effect the qualification of this Indenture
under the Trust Indenture Act or under any similar federal statute
subsequently enacted, and to add to this Indenture such other provisions as
may be expressly required under the Trust Indenture Act.

SECTION 902. Supplemental Indentures with Consent of Holders.

With the consent of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series affected by such supplemental indenture
(voting as one class), by Act of said Holders delivered to the Company and the
Trustee, the Company and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,

(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest, if any, on, any Security, or reduce the principal
amount thereof or premium, if any, on or the rate of interest thereon, or

(2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
<PAGE> 73

(3) change any obligation of the Company, with respect to Outstanding
Securities of a series, to maintain an office or agency in the places and for
the purposes specified in Section 1002 for such series, or

(4) modify any of the provisions of this Section, Section 513 or Section
1008, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Sections 611 and 901(7).

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.

SECTION 903. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.

SECTION 904. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
<PAGE> 74

SECTION 905. Conformity with Trust Indenture Act.

Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act as then in effect.

SECTION 906. Reference in Securities to Supplemental Indentures.

Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium and Interest.

The Company covenants and agrees for the benefit of each series of Securities
that it will duly and punctually pay the principal of and any premium and
interest on the Securities of that series in accordance with the terms of the
Securities and this Indenture.

SECTION 1002. Maintenance of Office or Agency.

The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will 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, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
<PAGE> 75

The Company may also from time to time designate one or more other offices or
agencies where the Securities of one or more series 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 each Place of Payment for Securities of any series for such purposes. The
Company will 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.

Except as otherwise specified with respect to a series of Securities as
contemplated by Section 301, the Company hereby initially designates as the
Place of Payment for each series of Securities The City and State of New York,
and initially appoints the Trustee at its Corporate Trust Office as the
Company's office or agency for each such purpose in such city.

SECTION 1003. Money for Securities Payments to Be Held in Trust.

If the Company shall at any time act as its own Paying Agent with respect to
any series of Securities, it will, on or before each due date of the principal
of or any premium or interest on any of the Securities of that series, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (1) hold all sums held by it for the
payment of the principal of (and premium, if any) or interest, if any, on
Securities of that series in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided; (2) give the Trustee notice of any default by the Company
(or any
<PAGE> 76

other obligor upon the Securities of that series) in the making of any payment
of principal (and premium, if any) or interest, if any, on the Securities of
that series; and (3) during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in
trust by such Paying Agent for payment in respect of the Securities of that
series.

The Company may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of or any premium or interest
on any Security of any series and remaining unclaimed for two years after such
principal, premium or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper in each Place of Payment with
respect to such series, 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 publication, any unclaimed balance of such money then remaining will be
repaid to the Company.

SECTION 1004. Statement by Officers as to Default.

The Company will deliver to the Trustee, within 150 days after the end of each
fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signer thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the
<PAGE> 77

Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.

SECTION 1005. Existence.

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

SECTION 1006. Limitations 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 Debt 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 Debt so long as such Debt shall be so secured. This
restriction shall not apply to:

(i) any Lien upon any property or assets of the 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;

(ii) 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 Debt incurred to finance such purchase
price, whether such Debt was incurred prior to, at the time of or within one
year of such acquisition;

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

(iv) any Lien upon any property or assets of a Person existing thereon at
the time such Person becomes a Restricted Subsidiary by acquisition, merger or
otherwise;
<PAGE> 78

(v) 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;

(vi) any Lien on property to secure all or part of the cost of construction
or improvements thereon or to secure Debt 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;

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

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

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

(x) any Lien created or assumed by the Company or any Restricted Subsidiary
in connection with the issuance of Debt the interest on which is excludable
from gross income of the holder of such Debt pursuant to the 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 Subsidiary;

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

(xii) Permitted Liens;

(xiii) any Lien created by any Alternate Program or any document executed by
any Subsidiary or Restricted Affiliate in connection therewith, provided that
such Lien is limited to the trade or other receivables in respect of which
such Alternate Program is created or exists, and the proceeds thereof;

(xiv) any Lien on Margin Stock;

(xv) any Lien upon any additions, improvements, replacements, repairs,
fixtures, appurtenances or component parts thereof attaching to or required to
be attached to property or assets pursuant to the terms of any mortgage,
pledge agreement, security agreement or other similar instrument, creating a
Lien upon such property or assets permitted by clauses (i) through (xiv),
inclusive, of this Section; or
<PAGE> 79

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

Notwithstanding the foregoing provisions of this Section, the Company may, and
may permit any Restricted Subsidiary to, create, assume, incur or suffer to
exist any Lien upon any Principal Property to secure any Debt of the Company or
any other Person (other than the Securities) that is not excepted by clauses (i)
through (xvi), inclusive, of this Section without securing the Securities issued
hereunder, provided that the aggregate principal amount of all Debt then
outstanding secured by such Lien and all similar Liens, together with all net
sale proceeds from Sale-Leaseback Transactions (excluding Sale-Leaseback
Transactions permitted by clauses (i) through (iv), inclusive, of Section 1007),
does not exceed 15% of Consolidated Net Tangible Assets.

SECTION 1007. Restriction of Sale-Leaseback Transaction.

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

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

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

(iii) the Company or such Restricted Subsidiary would be entitled to incur
Debt secured by a Lien on the Principal Property subject thereto in a
principal amount equal to or exceeding the net sale proceeds from such Sale-
Leaseback Transaction without securing the Securities; or
<PAGE> 80

(iv) 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 (A) the repayment, redemption or retirement of Funded Debt of
the Company or any Subsidiary, or (B) investment in another Principal
Property.

Notwithstanding the foregoing provisions of this Section, the Company may, and
may permit any Restricted Subsidiary to, effect any Sale-Leaseback Transaction
that is not excepted by clauses (i) through (iv), inclusive, of this Section,
provided that the net sale proceeds from such Sale-Leaseback Transaction,
together with the aggregate principal amount of then outstanding Debt (other
than the Securities) secured by Liens upon Principal Properties not excepted by
clauses (i) through (xvi), inclusive, of Section 1006, do not exceed 15% of the
Consolidated Net Tangible Assets.

SECTION 1008. Waiver of Certain Covenants.

The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 1005, 1006 or 1007 with respect to
the Securities of any series if before the time for such compliance the Holders
of at least a majority in aggregate principal amount of the Outstanding
Securities of all affected series (voting as one class) shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.

A waiver which changes or eliminates any term, provision or condition of this
Indenture which has expressly been included solely for the benefit of one or
more particular series of Securities, or which modifies the rights of the
Holders of Securities of such series with respect to such term, provision or
condition, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series.
<PAGE> 81

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article.

Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.

SECTION 1102. Election to Redeem; Notice to Trustee.

In case of any redemption at the election of the Company of less than all the
Securities of any series, the Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities (1) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, or (2)
pursuant to an election of the Company which is subject to a condition specified
in the terms of such Securities, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with such restriction or condition.

SECTION 1103. Selection by Trustee of Securities to Be Redeemed.

If less than all the Securities of any series are to be redeemed (unless all
the Securities of such series and of a specified tenor are to be redeemed), the
particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.

The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
<PAGE> 82

For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part, to the portion of the
principal amount of such Securities which has been or is to be redeemed.

SECTION 1104. Notice of Redemption.

Notice of redemption shall be given by first-class mail (if international
mail, by air mail), postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at his address appearing in the Security Register.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price,

(3) if less than all the Outstanding Securities of any series and of a
specified tenor are to be redeemed, the identification (and, in the case of
partial redemption of any Securities, the principal amounts) of the particular
Securities to be redeemed,

(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,

(5) the place or places where such Securities are to be surrendered for
payment of the Redemption Price, and

(6) that the redemption is for a sinking fund, if such is the case.

Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.

SECTION 1105. Deposit of Redemption Price.

On or prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
<PAGE> 83

SECTION 1106. Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.

If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.

SECTION 1107. Securities Redeemed in Part.

Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
<PAGE> 84

ARTICLE TWELVE

SINKING FUNDS

SECTION 1201. Applicability of Article.

The provisions of this Article shall be applicable to any sinking fund for the
retirement of Securities of a series except as otherwise specified in or as
contemplated by Section 301 for Securities of such series.

The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.

SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.

The Company (1) may deliver Outstanding Securities of a series (other than any
previously called for redemption), and (2) may apply as a credit Securities of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series; provided that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.

SECTION 1203. Redemption of Securities for Sinking Fund.

Not less than 45 days prior to each sinking fund payment date for any series
of Securities (unless a shorter period shall be satisfactory to the Trustee),
the Company will deliver to the Trustee an Officer's Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, which is to be satisfied by
<PAGE> 85

payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 1202 and
stating the basis for such credit and that such Securities have not been
previously so credited, and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.

ARTICLE THIRTEEN

DEFEASANCE

SECTION 1301. Applicability of Article.

The provisions of this Article shall be applicable to each series of
Securities except as otherwise specified as contemplated by Section 301 for
Securities of such series.

SECTION 1302. Legal Defeasance.

In addition to discharge of the Indenture pursuant to Section 401, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
Securities of such a series on the 91st day after the date of the deposit
referred to in clause (1) below, and the provisions of this Indenture with
respect to the Securities of such series shall no longer be in effect (except as
to (i) rights of registration of transfer and exchange of Securities of such
series and the Company's right of optional redemption, if any, (ii) substitution
of mutilated, destroyed, lost or stolen Securities, (iii) rights of Holders of
Securities to receive payments of principal thereof and interest thereon, upon
the Stated Maturities therefor or on the Redemption Dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) the rights, obligations, duties and immunities of
the Trustee hereunder, (v) the rights of the Holders of Securities of such
series as beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them, and (vi) the obligations of the
Company under Section 1002), and the Trustee, at the expense of the Company,
shall, upon a Company Request, execute proper instruments ac-
<PAGE> 86

knowledging the same, if the conditions set forth below are satisfied
(hereinafter, "defeasance"):

(1) The Company has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust, for the purposes of making the following
payments, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of such series (i) cash in an amount,
or (ii) in the case of any series of Securities the payments on which may only
be made in legal coin or currency of the United States, U.S. Government
Obligations, maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash, or (iii) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (A) the principal and interest and premium,
if any, on all Securities of such series on each date that such principal,
interest or premium, if any, is due and payable or on any Redemption Date
established pursuant to clause (3) below, and (B) any mandatory sinking fund
payments on the dates on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such series;

(2) The Company has delivered to the Trustee an Opinion of Counsel based on
the fact that (x) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling, or (y) since the date hereof, there
has been a change in the applicable federal income tax law, in either case to
the effect that, and such opinion shall confirm that, the holders of the
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance and will be
subject to federal income tax on the same amount and in the same manner and at
the same times, as would have been the case if such deposit and defeasance had
not occurred;

(3) If the Securities are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of
such redemption shall have been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee shall have been made;

(4) No Default or Event of Default shall have occurred and be continuing on
the date of such deposit; and

(5) The Company has delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for
relating to the defeasance contemplated by this provision have been complied
with.

For this purpose, such defeasance means that the Company and any other obligor
upon the Securities of such series shall be deemed to have paid and
<PAGE> 87

discharged the entire debt represented by the Securities of such series, which
shall thereafter be deemed to be "Outstanding" only for the purposes of Section
1304 and the rights and obligations referred to in clauses (i) through (vi),
inclusive, of the first paragraph of this Section, and to have satisfied all its
other obligations under the Securities of such series and this Indenture insofar
as the Securities of such series are concerned.

SECTION 1303. Covenant Defeasance.

The Company and any other obligor, if any, shall be released on the 91st day
after the date of the deposit referred to in clause (1) below from its
obligations under Sections 704, 801, 1005, 1006 and 1007 with respect to the
Securities of any series on and after the date the conditions set forth below
are satisfied (hereinafter, "covenant defeasance"), and the Securities of such
series shall thereafter be deemed to be not "Outstanding" for the purposes of
any request, demand, authorization, direction, notice, waiver, consent or
declaration or other action or Act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
Outstanding for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Securities of such series, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such Section, whether directly or
indirectly by reason of any reference elsewhere herein to such Section or by
reason of any reference in such Section 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 501, but, except as specified above, the
remainder of this Indenture and the Securities of such series shall be
unaffected thereby. The following shall be the conditions to application of this
Section 1303:

(1) The Company has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of such series, (i) cash in an
amount, or (ii) in the case of any series of Securities the payments on which
may only be made in legal coin or currency of the United States, U.S.
Government Obligations, maturing as to principal and interest at such times
and in such amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal and interest and
premium, if any, on all Securities of such series on each date that such
principal,
<PAGE> 88

interest or premium, if any, is due and payable or on any Redemption Date
established pursuant to clause (2) below, and (B) any mandatory sinking fund
payments on the day on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such series;

(2) If the Securities are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of
such redemption shall have been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee shall have been made;

(3) No Default or Event of Default shall have occurred and be continuing on
the date of such deposit;

(4) The Company shall have delivered to the Trustee an Opinion of Counsel
which shall confirm that the holders of the Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and covenant defeasance and will be subject to federal income tax
on the same amount and in the same manner and at the same times, as would have
been the case if such deposit and covenant defeasance had not occurred; and

(5) The Company shall have delivered to the Trustee an Officer's Certificate
stating that all conditions precedent provided for relating to the covenant
defeasance contemplated by this provision have been complied with.

SECTION 1304. Application by Trustee of Funds Deposited for Payment of
Securities.

Subject to the provisions of the last paragraph of Section 1003, all moneys or
U.S. Government Obligations deposited with the Trustee pursuant to Section 1302
or 1303 (and all funds earned on such moneys or U.S. Government Obligations)
shall be held in trust and applied by it to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent),
to the Holders of the particular Securities of such series for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.
Subject to Sections 1302 and 1303, the Trustee promptly shall pay to the Company
upon request any excess moneys held by them at any time.
<PAGE> 89

SECTION 1305. Repayment to Company.

The Trustee and any Paying Agent promptly shall pay or return to the Company
upon Company Request any money and U.S. Government Obligations held by them at
any time that are not required for the payment of the principal of and any
interest on the Securities of any series for which money or U.S. Government
Obligations have been deposited pursuant to Section 1302 or 1303.

The provisions of the last paragraph of Section 1003 shall apply to any money
held by the Trustee or any Paying Agent under this Article that remains
unclaimed for two years after the Maturity of any series of Securities for which
money or U.S. Government Obligations have been deposited pursuant to Section
1302 or 1303.

This instrument may be executed with counterpart signature pages or in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

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

TENNESSEE GAS PIPELINE COMPANY

By: /s/ H. BRENT AUSTIN
----------------------------------
Name: H. Brent Austin
Title: Senior Vice President

THE CHASE MANHATTAN BANK

By: /s/ RONALD J. HALLERAN
----------------------------------
Name: Ronald J. Halleran
Title: Second Vice President

<PAGE> 1

EXHIBIT 4.2
================================================================================

TENNESSEE GAS PIPELINE COMPANY

AND

THE CHASE MANHATTAN BANK,

AS TRUSTEE

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

FIRST SUPPLEMENTAL INDENTURE

DATED AS OF MARCH 13, 1997

INDENTURE

DATED AS OF MARCH 4, 1997

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

PROVIDING FOR THE ISSUANCE OF
7 1/2% DEBENTURES DUE 2017

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

<PAGE> 2

FIRST SUPPLEMENTAL INDENTURE dated as of March 13, 1997, between TENNESSEE GAS
PIPELINE COMPANY, a corporation duly organized and existing under the laws of
the State of Delaware (hereinafter called the "Company"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, as trustee (hereinafter called
the "Trustee").

WHEREAS, the Company has heretofore executed and delivered to the Trustee an
indenture dated as of March 4, 1997 (hereinafter called the "Original
Indenture"), to provide for the issue of an unlimited amount of debentures,
notes and/or other debt obligations of the Company (hereinafter referred to as
the "Securities"), the terms of which are to be determined as set forth in
Section 301 of the Original Indenture; and

WHEREAS, Section 901 of the Original Indenture provides, among other things,
that the Company and the Trustee may enter into indentures supplemental to the
Original Indenture for, among other things, the purpose of setting forth the
terms of Securities of any series; and

WHEREAS, the Company desires to create a series of the Securities in an
aggregate principal amount of $300,000,000 to be designated the "7 1/2%
Debentures Due 2017" (the "Debentures"), and all action on the part of the
Company necessary to authorize the issuance of the Debentures under the Original
Indenture and this First Supplemental Indenture has been duly taken; and

WHEREAS, all acts and things necessary to make the Debentures, when executed
by the Company and authenticated and delivered by the Trustee as in the Original
Indenture provided, the valid and binding obligations of the Company, and to
constitute these presents a valid and binding supplemental indenture and
agreement according to its terms, have been done and performed;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, and of the acceptance of this trust by the Trustee, and of the
sum of one dollar to the Company duly paid by the Trustee at the execution and
delivery of these presents, and of other valuable consideration the receipt and
sufficiency whereof are hereby acknowledged and in order to authorize the
authentication and delivery of and to set forth the terms of the Debentures,
<PAGE> 3

IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the parties
hereto, for the benefit of holders of the Debentures issued under the Indenture,
as follows:

ARTICLE 1.

TERMS AND ISSUANCE OF 7 1/2% DEBENTURES DUE 2017

SECTION 1.01 Issue of Debentures. A series of Securities which shall be
designated the "7 1/2% Debentures Due 2017" shall be executed, authenticated and
delivered in accordance with the provisions of, and shall in all respects be
subject to, the terms, conditions and covenants of the Original Indenture,
including without limitation the terms set forth in this First Supplemental
Indenture (including the form of Debentures referred to in SECTION 1.02 hereof).
The aggregate principal amount of Debentures which may be authenticated and
delivered under the Indenture shall not, except as permitted by the provisions
of the Original Indenture, exceed $300,000,000. The entire amount of Debentures
may forthwith be executed by the Company and delivered to the Trustee and shall
be authenticated by the Trustee and delivered to or upon the order of the
Company pursuant to Section 303 of the Indenture.

SECTION 1.02. Forms of Debentures and Authentication Certificate. The
Debentures initially shall be issuable in the form of one or more Global
Securities. The forms of the Debentures and the Trustee's certificate of
authentication shall be substantially as set forth on Exhibit A hereto.

ARTICLE 2.

MISCELLANEOUS

SECTION 2.01. Execution as Supplemental Indenture. This First Supplemental
Indenture is executed and shall be construed as an indenture supplemental to the
Original Indenture and, as provided in the Original Indenture, this First
Supplemental Indenture forms a part thereof. Except as herein expressly
otherwise defined, the use of the terms and expressions herein is in accordance
with the definitions, uses and constructions contained in the Original
Indenture.

SECTION 2.02. Responsibility for Recitals, Etc. The recitals herein and in the
Debentures (except in the Trustee's certificate of authentication) shall be
taken as the statements of the Company, and the Trustee assumes no
<PAGE> 4

responsibility for the correctness thereof. The Trustee makes no representations
as to the validity or sufficiency of this First Supplemental Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of the Debentures or of the proceeds thereof.

SECTION 2.03. Provisions Binding on Company's Successors. All the covenants,
stipulations, promises and agreements in this First Supplemental Indenture
contained by the Company shall bind its successors and assigns whether so
expressed or not.

SECTION 2.04. New York Contract. THIS FIRST SUPPLEMENTAL INDENTURE AND EACH
DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

SECTION 2.05. Execution and Counterparts. This First Supplemental Indenture
may be executed with counterpart signature pages or in any number of
counterparts, each of which shall be an original but such counterparts shall
together constitute but one and the same instrument.

SECTION 2.06. Capitalized Terms. Capitalized terms not otherwise defined in
this First Supplemental Indenture shall have the respective meanings assigned to
them in the Original Indenture.
<PAGE> 5

IN WITNESS WHEREOF, said TENNESSEE GAS PIPELINE COMPANY has caused this First
Supplemental Indenture to be executed in its corporate name by its Chairman of
the Board or its President or one of its Vice Presidents, and said THE CHASE
MANHATTAN BANK has caused this First Supplemental Indenture to be executed in
its corporate name by one of its Vice Presidents as of March 13, 1997.

TENNESSEE GAS PIPELINE COMPANY

By /s/ H. BRENT AUSTIN
-----------------------------------
H. Brent Austin
Senior Vice President

THE CHASE MANHATTAN BANK

By /s/ RONALD J. HALLERAN
-----------------------------------
RONALD J. Halleran
Second Vice President
<PAGE> 6

EXHIBIT A

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY
AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR
OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE
FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE> 7

TENNESSEE GAS PIPELINE COMPANY

7 1/2% DEBENTURE DUE 2017

NO. U.S.$
- ------------------------ -------------
CUSIP NO. 880451 AT6

Dollars on April 1, 2017, and to pay interest thereon from March 13, 1997, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on April 1 and October 1 in each year,
commencing October 1, 1997, at the rate of 7 1/2% per annum, until the principal
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the March 15 or
September 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice of which shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in such Indenture.

Payment of the principal of and interest on this Security will be made by
transfer of immediately available funds to a bank account in New York, New York
designated by the Holder in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
<PAGE> 8

IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:

TENNESSEE GAS PIPELINE COMPANY

By:
----------------------------------
H. Brent Austin
Senior Vice President

This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.

THE CHASE MANHATTAN BANK,
AS TRUSTEE

By:
----------------------------------
Authorized Officer
<PAGE> 9

TENNESSEE GAS PIPELINE COMPANY

7 1/2% DEBENTURE DUE 2017

This Security is one of a duly authorized issue of securities of the Company
(the "Securities"), issued and to be issued in one or more series under an
Indenture dated as of March 4, 1997 (the "Indenture"), between the Company and
The Chase Manhattan Bank, as Trustee (the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. As
provided in the Indenture, the Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking, purchase or analogous funds, if any, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided or permitted. This Security is one of the series designated on the face
hereof, limited in aggregate principal amount to U.S.$300,000,000.

The Securities of this series are not redeemable prior to Stated Maturity.

If an Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

Indenture with respect to such Securities and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of all affected series at the time Outstanding (treated as a
single class) shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in principal amount of Securities of this series at the
time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or interest hereon on or after the respective due
dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place(s) and rate, and in the coin or currency, herein
prescribed.

This Global Security or portion hereof may not be exchanged for Definitive
Securities of this series except in the limited circumstances provided in the
Indenture.

Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.

<PAGE> 1

EXHIBIT 4.3
================================================================================

TENNESSEE GAS PIPELINE COMPANY

AND

THE CHASE MANHATTAN BANK,

AS TRUSTEE

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

SECOND SUPPLEMENTAL INDENTURE

DATED AS OF MARCH 13, 1997

INDENTURE

DATED AS OF MARCH 4, 1997

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

PROVIDING FOR THE ISSUANCE OF
7% DEBENTURES DUE 2027

================================================================================
<PAGE> 2

SECOND SUPPLEMENTAL INDENTURE dated as of March 13, 1997, between TENNESSEE
GAS PIPELINE COMPANY, a corporation duly organized and existing under the laws
of the State of Delaware (hereinafter called the "Company"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, as trustee (hereinafter called
the "Trustee").

WHEREAS, the Company desires to create a series of the Securities in an
aggregate principal amount of $300,000,000 to be designated the "7% Debentures
Due 2027" (the "Debentures"), and all action on the part of the Company
necessary to authorize the issuance of the Debentures under the Original
Indenture and this Second Supplemental Indenture has been duly taken; and

IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the parties
hereto, for the benefit of holders of the Debentures issued under the Indenture,
as follows:

ARTICLE 1.

TERMS AND ISSUANCE OF 7% DEBENTURES DUE 2027

SECTION 1.01 Issue of Debentures. A series of Securities which shall be
designated the "7% Debentures Due 2027" shall be executed, authenticated and
delivered in accordance with the provisions of, and shall in all respects be
subject to, the terms, conditions and covenants of the Original Indenture,
including without limitation the terms set forth in this Second Supplemental
Indenture (including the form of Debentures referred to in SECTION 1.02 hereof).
The aggregate principal amount of Debentures which may be authenticated and
delivered under the Indenture shall not, except as permitted by the provisions
of the Original Indenture, exceed $300,000,000. The entire amount of Debentures
may forthwith be executed by the Company and delivered to the Trustee and shall
be authenticated by the Trustee and delivered to or upon the order of the
Company pursuant to Section 303 of the Indenture.

ARTICLE 2.

MISCELLANEOUS

SECTION 2.01. Execution as Supplemental Indenture. This Second Supplemental
Indenture is executed and shall be construed as an indenture supplemental to the
Original Indenture and, as provided in the Original Indenture, this Second
Supplemental Indenture forms a part thereof. Except as herein expressly
otherwise defined, the use of the terms and expressions herein is in accordance
with the definitions, uses and constructions contained in the Original
Indenture.

responsibility for the correctness thereof. The Trustee makes no representations
as to the validity or sufficiency of this Second Supplemental Indenture or of
the Debentures. The Trustee shall not be accountable for the use or application
by the Company of the Debentures or of the proceeds thereof.

SECTION 2.03. Provisions Binding on Company's Successors. All the covenants,
stipulations, promises and agreements in this Second Supplemental Indenture
contained by the Company shall bind its successors and assigns whether so
expressed or not.

SECTION 2.04. New York Contract. THIS SECOND SUPPLEMENTAL INDENTURE AND EACH
DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

SECTION 2.05. Execution and Counterparts. This Second Supplemental Indenture
may be executed with counterpart signature pages or in any number of
counterparts, each of which shall be an original but such counterparts shall
together constitute but one and the same instrument.

SECTION 2.06. Capitalized Terms. Capitalized terms not otherwise defined in
this Second Supplemental Indenture shall have the respective meanings assigned
to them in the Original Indenture.
<PAGE> 5

IN WITNESS WHEREOF, said TENNESSEE GAS PIPELINE COMPANY has caused this Second
Supplemental Indenture to be executed in its corporate name by its Chairman of
the Board or its President or one of its Vice Presidents, and said THE CHASE
MANHATTAN BANK has caused this Second Supplemental Indenture to be executed in
its corporate name by one of its Vice Presidents as of March 13, 1997.

TENNESSEE GAS PIPELINE COMPANY

By /s/ H. BRENT AUSTIN
-----------------------------------
H. Brent Austin
Senior Vice President

THE CHASE MANHATTAN BANK

By /s/ RONALD J. HALLERAN
-----------------------------------
Ronald J. Halleran
Second Vice President
<PAGE> 6

EXHIBIT A

TENNESSEE GAS PIPELINE COMPANY

7% DEBENTURE DUE 2027

NO. U.S.$
- ------------------------ -----------------------
CUSIP NO. 880451 AS8

received, hereby promises to pay to------------------, or registered assigns,
the principal sum of ------------------------ United States Dollars on March 15,
2027, and to pay interest thereon from March 13, 1997, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on March 15 and September 15 in each year, commencing September
15, 1997, at the rate of 7% per annum, until the principal hereof is paid or
made available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the March 1 or September 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice of
which shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in such Indenture.

Payment of the principal of (and premium, if any) and interest on this
Security will be made by transfer of immediately available funds to a bank
account in New York, New York, designated by the Holder in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts.
<PAGE> 8

IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:

TENNESSEE GAS PIPELINE COMPANY

By:
----------------------------------
H. Brent Austin
Senior Vice President

This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.

THE CHASE MANHATTAN BANK,
AS TRUSTEE

By:
---------------------------------
Authorized Officer
<PAGE> 9

TENNESSEE GAS PIPELINE COMPANY

7% DEBENTURE DUE 2027

This Security is one of a duly authorized issue of securities of the Company
(the "Securities"), issued and to be issued in one or more series under an
Indenture dated as of March 4, 1997 (the "Indenture"), between the Company and
The Chase Manhattan Bank, as Trustee (the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. As
provided in the Indenture, the Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking, purchase or analogous funds, if any, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided or permitted. This Security is one of the series designated on the face
hereof, limited in aggregate principal amount to U.S.$300,000,000.

The Holder of this Security may elect to have this Security (or any portion
hereof that is an integral multiple of $1,000) repaid on March 15, 2007 (or, if
such day is not a Business Day, the next succeeding Business Day), at a
repayment price equal to the principal amount of this Security (or such portion
hereof), together with accrued and unpaid interest thereon to the date of
repayment. In order for the Holder of this Security to make this election, the
Company must receive at its office or agency in New York, New York, during the
period beginning on January 15, 2007 and ending at 5:00 p.m. (New York City
time) on February 15, 2007 (or, if such day is not a Business Day, the next
succeeding Business Day) this Security with the form entitled "Option to Elect
Repayment on March 15, 2007" below duly completed. Any such election received
during the period beginning on January 15, 2007 and ending at 5:00 p.m. (New
York City time) on February 15, 2007 shall be irrevocable. All questions as to
the validity, form, eligibility (including time of receipt) and acceptance of
this Security for repayment will be determined by the Company whose
determination shall be final and binding. Failure of the Company to repay this
Security (or such portion hereof) when required shall constitute an
<PAGE> 10

Event of Default with respect to the 7% Debentures Due 2027 only and not with
respect to any other series of Securities. If applicable, the Company will
comply with the requirements of Rule 14e-1 under the Securities Exchange Act of
1934, as amended, in connection with any election by Holders to have the
Securities repaid on March 15, 2007 (or, if such day is not a Business Day, the
next succeeding Business Day).

The Securities of this series are redeemable, upon not less than 30 nor more
than 60 days' notice by mail, as a whole or in part, at the option of the
Company at any time and from time to time after March 15, 2007 at a redemption
price equal to greater of (i) 100% of the principal amount of such Securities
and (ii) as determined by an Independent Investment Banker, the sum of the
present values of the remaining scheduled payments of principal and interest
hereon discounted to the date of redemption on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate,
together, in each case, with accrued and unpaid interest to such Redemption
Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.

"Adjusted Treasury Rate" means, with respect to any Redemption Date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such date of redemption, plus .15%.

"Comparable Treasury Issue" means the United States Treasury security selected
by an Independent Investment Banker as having a maturity comparable to the
remaining term of the Securities of this series 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 such securities.

"Comparable Treasury Price" means, with respect to any Redemption Date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
<PAGE> 11

Government Securities", or (ii) if such release (or any successor release) is
not published or does not contain such prices on such Business Day, (A) the
average of the Reference Treasury Dealer Quotations for such date of redemption,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations.

"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with the Company.

"Reference Treasury Dealer" means each of Donaldson, Lufkin & Jenrette
Securities Corporation, Morgan Stanley & Co. Incorporated, Chase Securities Inc.
and Citicorp Securities, Inc. and their respective successors; provided,
however, that if any of the foregoing shall not be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute therefor 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. on the
third Business Day preceding such Redemption Date.

In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.

to waive compliance by the Company with certain provisions of the Indenture. The
Indenture permits, with certain exceptions as therein provided, the Holders of a
majority in principal amount of Securities of all affected series then
Outstanding (voting as a single class) to waive past defaults under the
Indenture with respect to such Securities and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place(s) and rate, and in the coin or currency, herein
prescribed.

This Global Security or portion hereof may not be exchanged for Definitive
Securities of this series except in the limited circumstances provided in the
Indenture.

The Securities of this series are issuable only in registered form without
coupons in denominations of U.S. $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
<PAGE> 15

OPTION TO ELECT REPAYMENT ON MARCH 15, 2007

The undersigned hereby irrevocably requests and instructs the Company to repay
the within Security (or portion thereof specified below) pursuant to its terms
at a price equal to the principal amount thereof, together with interest to the
repayment date, to the undersigned, at

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

Tax I.D. No.
- --------------------------------------------------------------------------------
(Please Print or Typewrite Name, Address and Tax Identification Number of the
Undersigned)

For this Security to be repaid the Company must receive at the corporate trust
office of the Trustee in the Borough of Manhattan, The City of New York or at
such additional place or places of which the Company shall from time to time
notify the holder of the within Security during the period from and including
January 15, 2007 to and including February 15, 2007 or, if February 15, 2007 is
not a Business Day, the next succeeding Business Day, this Security with this
"Option to Elect Repayment" on March 15, 2007 form duly completed.

If less than the entire principal amount of the within Security is to be
repaid, specify the portion thereof (which shall be $1,000 or an integral
multiple of $1,000 in excess of $1,000) which the Holder elects to have repaid:
$.............; and specify the denomination or denominations (which shall be
$1,000 or an integral multiple of $1,000 in excess of $1,000) of the Security or
Securities to be issued to the Holder for the amount of the portion of the
within Security not being repaid (in the absence of any such specification, one
such Security will be issued for the portion not being repaid: $.............).

<TABLE>
<S> <C>
Dated: ---------------------------------------------
NOTICE: The signature on this Option to Elect
Repayment on March 15, 2007 must correspond
with the name as written upon the face of
this instrument in every particular without
alteration or enlargement or any other change
whatsoever.
</TABLE>

<PAGE> 1

EXHIBIT 4.4
================================================================================

TENNESSEE GAS PIPELINE COMPANY

AND

THE CHASE MANHATTAN BANK,

AS TRUSTEE

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

THIRD SUPPLEMENTAL INDENTURE

DATED AS OF MARCH 13, 1997

INDENTURE

DATED AS OF MARCH 4, 1997

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

PROVIDING FOR THE ISSUANCE OF
7 5/8% DEBENTURES DUE 2037

================================================================================
<PAGE> 2

THIRD SUPPLEMENTAL INDENTURE dated as of March 13, 1997, between TENNESSEE GAS
PIPELINE COMPANY, a corporation duly organized and existing under the laws of
the State of Delaware (hereinafter called the "Company"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, as trustee (hereinafter called
the "Trustee").

WHEREAS, the Company desires to create a series of the Securities in an
aggregate principal amount of $300,000,000 to be designated the "7 5/8%
Debentures Due 2037" (the "Debentures"), and all action on the part of the
Company necessary to authorize the issuance of the Debentures under the Original
Indenture and this Third Supplemental Indenture has been duly taken; and

IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the parties
hereto, for the benefit of holders of the Debentures issued under the Indenture,
as follows:

ARTICLE 1.

TERMS AND ISSUANCE OF 7 5/8% DEBENTURES DUE 2037

SECTION 1.01 Issue of Debentures. A series of Securities which shall be
designated the "7 5/8% Debentures Due 2037" shall be executed, authenticated and
delivered in accordance with the provisions of, and shall in all respects be
subject to, the terms, conditions and covenants of the Original Indenture,
including without limitation the terms set forth in this Third Supplemental
Indenture (including the form of Debentures referred to in SECTION 1.02 hereof).
The aggregate principal amount of Debentures which may be authenticated and
delivered under the Indenture shall not, except as permitted by the provisions
of the Original Indenture, exceed $300,000,000. The entire amount of Debentures
may forthwith be executed by the Company and delivered to the Trustee and shall
be authenticated by the Trustee and delivered to or upon the order of the
Company pursuant to Section 303 of the Indenture.

ARTICLE 2.

MISCELLANEOUS

SECTION 2.01. Execution as Supplemental Indenture. This Third Supplemental
Indenture is executed and shall be construed as an indenture supplemental to the
Original Indenture and, as provided in the Original Indenture, this Third
Supplemental Indenture forms a part thereof. Except as herein expressly
otherwise defined, the use of the terms and expressions herein is in accordance
with the definitions, uses and constructions contained in the Original
Indenture.

responsibility for the correctness thereof. The Trustee makes no representations
as to the validity or sufficiency of this Third Supplemental Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of the Debentures or of the proceeds thereof.

SECTION 2.03. Provisions Binding on Company's Successors. All the covenants,
stipulations, promises and agreements in this Third Supplemental Indenture
contained by the Company shall bind its successors and assigns whether so
expressed or not.

SECTION 2.04. New York Contract. THIS THIRD SUPPLEMENTAL INDENTURE AND EACH
DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

SECTION 2.05. Execution and Counterparts. This Third Supplemental Indenture
may be executed with counterpart signature pages or in any number of
counterparts, each of which shall be an original but such counterparts shall
together constitute but one and the same instrument.

SECTION 2.06. Capitalized Terms. Capitalized terms not otherwise defined in
this Third Supplemental Indenture shall have the respective meanings assigned to
them in the Original Indenture.
<PAGE> 5

IN WITNESS WHEREOF, said TENNESSEE GAS PIPELINE COMPANY has caused this Third
Supplemental Indenture to be executed in its corporate name by its Chairman of
the Board or its President or one of its Vice Presidents, and said THE CHASE
MANHATTAN BANK has caused this Third Supplemental Indenture to be executed in
its corporate name by one of its Vice Presidents as of March 13, 1997.

TENNESSEE GAS PIPELINE COMPANY

By /s/ H. BRENT AUSTIN
-----------------------------------
H. Brent Austin
Senior Vice President

THE CHASE MANHATTAN BANK

By /s/ RONALD J. HALLERAN
-----------------------------------
Ronald J. Halleran
Second Vice President
<PAGE> 6

EXHIBIT A

TENNESSEE GAS PIPELINE COMPANY

7 5/8% DEBENTURES DUE 2037

NO. U.S.$
- ------------------------ -------------
CUSIP NO. 880451 AU3

received, hereby promises to pay to ------------------, or registered assigns,
the principal sum of ------------------------------------ United States Dollars
on April 1, 2037, and to pay interest thereon from March 13, 1997, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on April 1 and October 1 in each year, commencing
October 1, 1997, at the rate of 7 5/8% per annum, until the principal hereof is
paid or made available for payment. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the March 15 or September 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice of which shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in such Indenture.

Payment of the principal of and interest on this Security will be made by
transfer of immediately available funds to a bank account in New York, New York,
designated by the Holder in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
<PAGE> 8

IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:

TENNESSEE GAS PIPELINE COMPANY

By:
----------------------------------
H. Brent Austin
Senior Vice President

This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.

THE CHASE MANHATTAN BANK,
AS TRUSTEE

By:
----------------------------------
Authorized Officer
<PAGE> 9

TENNESSEE GAS PIPELINE COMPANY

7 5/8% DEBENTURES DUE 2037

This Security is one of a duly authorized issue of securities of the Company
(the "Securities"), issued and to be issued in one or more series under an
Indenture dated as of March 4, 1997 (the "Indenture"), between the Company and
The Chase Manhattan Bank, as Trustee (the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. As
provided in the Indenture, the Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking, purchase or analogous funds, if any, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided or permitted. This Security is one of the series designated on the face
hereof, limited in aggregate principal amount to U.S.$300,000,000.

The Securities of this series are not redeemable prior to Stated Maturity.

then Outstanding (voting as a single class) to waive past defaults under the
Indenture with respect to such Securities and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place(s) and rate, and in the coin or currency, herein
prescribed.

This Global Security or portion hereof may not be exchanged for Definitive
Securities of this series except in the limited circumstances provided in the
Indenture.

The Securities of this series are issuable only in registered form without
coupons in denominations of U.S. $1,000 and any integral multiple thereof. As
<PAGE> 11

provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.

<PAGE> 1
EXHIBIT 21
EL PASO TENNESSEE PIPELINE CO.
SUBSIDIARIES AND AFFILIATES

AS OF FEBRUARY 1, 1997

<TABLE>

<S> <C>
EL PASO TENNESSEE PIPELINE CO. (Delaware)
Tennessee Gas Pipeline Company (Delaware) .................................. 100 %
Altamont Service Corporation (Delaware) ................................. 100
Altamont Gas Transmission Canada Limited (Canada) ................... 100
Border Gas Inc. (Delaware) .............................................. 37.5
East Tennessee Natural Gas Company (Tennessee) .......................... 100
EPEC East Natural Gas L.P. (Delaware L.P.) .......................... 1
Eastern Insurance Company Limited (Bermuda) ............................. 100
El Paso Energy Credit Corporation (Delaware) ............................ 100
EPEC Fac Corporation (Delaware) ..................................... 100
El Paso Energy Holdings Inc. (Delaware) ................................. 100
EPEC EIS Company (Delaware) ......................................... 100
EPEC EIS Canada Ltd. (Alberta) ................................. 100
EPEC Gas Transportation Company (Delaware) .......................... 100
Energy TRACS, Inc. (Delaware) ........................................... 100
EPEC Alaska, Inc. (Alaska) .............................................. 100
EPEC-Altamont Corporation (Delaware) .................................... 100
Altamont Gas Transmission Company (Delaware Joint Venture) .......... 53.34
EPEC Argentina Corporation (Delaware) ................................... 100
EPEC Baja California Corporation (Delaware) ............................. 100
EPEC Canada Ltd. (Canada) ............................................... 100
EPEC Communications Corporation (Delaware) .............................. 100
EPEC Chase Inc. (Texas) ................................................. 100
EPEC Corporation (Delaware) ............................................. 100
Channel Industries Gas Company (Delaware) ........................... 100
Channel Gas Marketing Company (Delaware) ....................... 100
The Oasis Company (Delaware) ............................... 30
Deepsea Ventures, Inc. (Delaware) .............................. 25
EPEC Cogeneration Company (Delaware) ........................... 100
EPEC Ethanol Company (Delaware) ............................ 100
EPEC Ethanol Services Company (Delaware) ................... 100
EPEC Hungary Inc. (Delaware) ............................... 100
EPIC Energy Hungary B.V. (Netherlands) ..................... 100
Orange Acquisition, Inc. (Delaware) ........................ 100
Orange Cogeneration Limited Partnership (Delaware L.P.) 49.5
Orange Cogeneration GP II, Inc. (Delaware) ................. 50
Orange Cogeneration G.P., Inc. (Delaware) ............. 100
Polk Power GP II, Inc. (Delaware) .......................... 50
Polk Power GP, Inc. (Delaware) ........................ 100
Polk Power Partners, L.P. (Delaware L.P.) ......... 1
West Campus Cogeneration Company (Delaware) ................ 100
</TABLE>

1
<PAGE> 2

El PASO TENNESSEE PIPELINE CO.
SUBSIDIARIES AND AFFILIATES

AS OF FEBRUARY 1, 1997

<TABLE>
<S> <C>
El Paso Tennessee Pipeline Co. (continued)
Tennessee Gas Pipeline Company (continued)
EPEC Corporation (continued)
Channel Industries Gas Company (continued)

EPEC Gas Processing Company (Delaware) ................. 100 %
EPEC Independent Power I Company (Delaware) ............ 100
MASSPOWER (Massachusetts General Partnership) ...... 17
EPEC Independent Power II Company (Delaware) ........... 100
EPEC Insurance Ventures Inc. (Delaware) ................ 100
EPEC Offshore Gathering Company (Delaware) ............. 100
EPEM Marketing Company (Kentucky) ...................... 100
Creole Gas Pipeline Corporation (Louisiana) ........ 100
Entrade Pipeline Company (Kentucky) ................ 100
Tennessee Gas Marketing Company (Delaware) ............. 100
Midwestern Gas Transmission Company (Delaware) .............. 100
Entrade Engine Company (Kentucky) ...................... 100
EPEC Midwest Natural Gas L.P. (Delaware L.P.) .......... 99
EPEC Minerals Company - California (Delaware) .......... 100
EPEC Minerals Company - Nevada (Delaware) .............. 100
EPEC OCS Company, Inc. (Delaware) ...................... 100
EPEC Oil Company (Delaware) ............................ 100
EPEC Polymers, Inc. (Delaware) ......................... 100
EPEC Eastern Realty, Inc. (New Jersey) ............. 100
New Midwestern Inc. (Delaware) ......................... 100
SWL Security Corp. (Texas) ............................. 100
Tennessee Overthrust Gas Company (Delaware) ............ 100
Overthrust Pipeline Company (Delaware Partnership) . 18
TGP Corporation (Delaware) ............................. 100
EPEC Deepwater Gathering Company (Delaware) ..................... 100
EPEC Delta XII Gas Co., Inc. (Delaware) ......................... 100
EPEC East Corporation (Delaware) ................................ 100
EPEC East Natural Gas L.P. (Delaware L.P.) .................. 99
EPEC Econ Services, Inc. (Delaware) ............................. 100
EPEC Technology Consulting Services Inc. (Delaware) ......... 100
EPEC Europe Inc. (Delaware) ..................................... 100
EPEC Gas Australia Inc. (Delaware) .............................. 100
Epic Energy Pty. Ltd. (Australia) ........................... 30
Epic Energy Australia Pty. Limited (Australia) ......... 99.9
Epic Energy Queensland Pty. Limited (Australia) .... 99.8
Epic Energy South Australia Pty. Limited (Australia) 99.98

</TABLE>

2
<PAGE> 3

El PASO TENNESSEE PIPELINE CO
SUBSIDIARIES AND AFFILIATES

AS OF FEBRUARY 1, 1997

<TABLE>
<S> <C>
El Paso Tennessee Pipeline Co. (continued)
Tennessee Gas Pipeline Company (continued)
EPEC Gas Australia Inc.(continued)
Epic Energy Pty. Ltd. (continued)

Epic Energy Northern Territory Pty. Limited (Australia) .... 100 %
Epic Energy Operations and Maintenance Pty. Ltd. (Australia) 99.9
Epic Energy Western Australia Pty. Limited (Australia) ..... 100
Galtee Limited (Cayman Islands) ................................. 100
Ventures Holdings Pty. Ltd. (Australia) .................... 100
EPIC Sulawesi Gas Pty. Ltd. (Australia) ................ 100
Energy Equity EPIC (Sengkang) Pty. Ltd. (Australia) 50
Sulawesi Energy Pty Ltd. (Australia) ................... 50
PT Energi Sengkang (Indonesia) .................... 95
EPEC Gas Canada, Ltd. (Ontario) ..................................... 100
EPEC Gas International Inc. (Delaware) .............................. 100
El Paso Energia Mexico S.A. de C.V. (Mexico) .................... 0.1
EPEC China Inc. (Delaware) ...................................... 100
EPEC Gas Brazil Corporation (Delaware) .......................... 100
EPIC Gas International Servicos do Brasil Ltda (Brazil) .... 100
EPEC Gas Chile Corporation (Delaware) ........................... 100
Gas de Chile S.A. (Chile) .................................. 45
Gasoduco Transandino S.A. (Chile) .......................... 50
EPEC Gas Latin America Inc. (Delaware) .......................... 100
El Paso Energia Mexico, S.A. de C.V. (Mexico) .............. 99.9
Pasotronica, S.A. de C.V. (Mexico) ..................... 50
EPEC Gas Services (Chile) Corporation (Delaware) ................ 100
EPIC Gas Transportes S.A. (Chile) .......................... 99.9
EPEC International (East Asia/Pacific) Inc. (Delaware) .......... 100
EPEC Gas Louisiana Inc. (Delaware) .................................. 100
Martin Exploration Company (Delaware) ........................... 100
EPEC Gas Properties Inc. (Delaware) ................................. 100
EPEC Gas Services, Inc. (Delaware) .................................. 100
EPEC Gas Supply Corporation (Delaware) .............................. 100
EPEC International Inc. (Delaware) .................................. 100
EPEC Nederland B.V. (Netherlands) ............................... 100
EPEC Offshore Netherlands Company (Delaware) .................... 100
EPEC Liquids Corporation (Delaware) ................................. 100
EPEC Midwest Corporation (Delaware) ................................. 100
EPEC Midwest Natural Gas L.P. (Delaware L.P.) ................... 99
EPEC MLP Inc. (Delaware) ............................................ 100
Polk Power Partners, L.P. (Delaware L.P.) ....................... 45.75
</TABLE>

3
<PAGE> 4

El PASO TENNESSEE PIPELINE CO.
SUBSIDIARIES AND AFFILIATES

AS OF FEBRUARY 1, 1997

<TABLE>
<S> <C>
El Paso Tennessee Pipeline Co. (continued)
Tennessee Gas Pipeline Company (continued)

EPEC MTBE, Inc. (Delaware) ........................................... 100 %
EPEC Pittsfield Corporation (Delaware) ............................... 100
EPEC Portland Corporation (Delaware) ................................. 100
EPEC Realty, Inc. (Delaware) ......................................... 100
EPEC Services Company (Delaware) ..................................... 100
EPEC AIRCO Inc. (Delaware) ....................................... 100
EPEC OGS Inc. (Delaware) ......................................... 100
EPEC TEPSCO Inc. (Delaware) ...................................... 100
Tellepsen Pipeline Services Company (Texas Partnership) ..... 49
GreyStar Corporation (Texas) ..................................... 50
EPEC SNG Inc. (Delaware) ............................................. 100
EPEC Texas Acquisition Inc. (Delaware) ............................... 100
EPEC Trinidad LNG, Inc. (Delaware) ................................... 100
EPEC Ventures Bolivia Corporation (Delaware) ......................... 100
EPEC Ventures Poland Corporation (Delaware) .......................... 100
Wielkopulska Energia S.A. (Poland) ............................... 50
EPEC Western Market Center Corporation (Delaware) .................... 100
The Western Market Center Joint Venture (Wyoming Joint Venture) .. 50
EPEC Western Market Center Service Corporation (Delaware) ............ 100
EPEM Marketing Services Company (Delaware) ........................... 100
Green Canyon Gathering Company (Delaware) ............................ 100
Kern County Land Company (Delaware) .................................. 100
EPEC Equipment Corporation (Delaware) ............................ 100
EPEC Equipment Holding I Company (Delaware) ................. 100
EPEC Equipment Holding II Company (Delaware) ................ 100
EPEC Equipment Holding III Company (Delaware) ............... 100
EPEC Equipment Holding V Company (North Dakota) ......... 100
EPEC Equipment Holding IV Company (Wisconsin) ............... 100
EPEC Equipment Holding VI Company (Illinois) ................ 100
Marlin Drilling Co., Inc. (Delaware) ........................ 100
Marlin do Brasil Perfuacoes Maritimas Ltda. (Brazil) .... 99.84
Bluefin Supply Company (Delaware) ....................... 100
Marlin do Brasil Perfuacoes Maritimas Ltda. (Brazil) 0.16
EPEC West, Inc. (Delaware) ....................................... 100
Kern River Corporation (Delaware) .................................... 100
Land Ventures, Inc. (Delaware) ....................................... 100
Midwestern Gas Marketing Company (Delaware) .......................... 100
Mont Belvieu Land Company (Delaware) ................................. 100
</TABLE>

4
<PAGE> 5

El PASO TENNESSEE PIPELINE CO.
SUBSIDIARIES AND AFFILIATES

AS OF FEBRUARY 1, 1997

<TABLE>
<S> <C>
El Paso Tennessee Pipeline Co. (continued)
Tennessee Gas Pipeline Company (continued)

Sandbar Petroleum Company (Delaware) ..................... 100 %
S.K. Petroleum Company (Delaware) ........................ 100
Tennessee Gas Transmission Company (Delaware) ............ 100
Tennessee Storage Company (Delaware) ..................... 100
Tennessee Trailblazer Gas Company (Delaware) ............. 100
The Fontanelle Corporation (Louisiana) ................... 100
The F and E Oyster Partnership (Louisiana Partnership) 64
The LaChute Corporation (Louisiana) ...................... 100
Travis Place Parking Garage Inc. (Delaware) .............. 100
</TABLE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXRACTED FROM (A)
CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED BALANCE SHEETS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) 1996 10k.
</LEGEND>
<MULTIPLIER> 1,000,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 14
<SECURITIES> 0
<RECEIVABLES> 1,128
<ALLOWANCES> 0<F1>
<INVENTORY> 42
<CURRENT-ASSETS> 1,297
<PP&E> 3,952
<DEPRECIATION> 0<F1>
<TOTAL-ASSETS> 5,755
<CURRENT-LIABILITIES> 1,816
<BONDS> 1,150
0
296
<COMMON> 0
<OTHER-SE> 938
<TOTAL-LIABILITY-AND-EQUITY> 5,755
<SALES> 2,735
<TOTAL-REVENUES> 2,735
<CGS> 0<F1>
<TOTAL-COSTS> 2,553
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 142
<INCOME-PRETAX> 163
<INCOME-TAX> 34
<INCOME-CONTINUING> 129
<DISCONTINUED> 0
<EXTRAORDINARY> (234)
<CHANGES> 0
<NET-INCOME> (105)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>NOT SEPARATELY IDENTIFIED IN THE CONSOLIDATED FINANCIAL STATEMENTS OR
ACCOMPANYING NOTES THERETO.
</FN>

</TABLE>