BETWEEN TENNECO INC.

EXHIBIT 2

DISTRIBUTION AGREEMENT

BETWEEN

TENNECO INC.

(TO BE RENAMED TENNECO AUTOMOTIVE INC.)

AND

TENNECO PACKAGING INC.

, 1999
2

TABLE OF CONTENTS

PAGE
------

ARTICLE I
DEFINITIONS................................................................. -1-
SECTION GENERAL.....................................................
1.01. -1-
SECTION REFERENCES..................................................
1.02. -12-
ARTICLE II
PRE-DISTRIBUTION TRANSACTIONS; CERTAIN COVENANTS............................ -12-
SECTION CORPORATE RESTRUCTURING TRANSACTIONS........................
2.01. -12-
SECTION PRE-DISTRIBUTION STOCK DIVIDEND TO TENNECO..................
2.02. -12-
SECTION CERTIFICATE OF INCORPORATION AND BYLAWS OF PACKAGING........
2.03. -12-
SECTION ELECTION OF DIRECTORS OF PACKAGING..........................
2.04. -12-
SECTION TRANSFER AND ASSIGNMENT OF CERTAIN LICENSES AND PERMITS.....
2.05. -12-
SECTION TRANSFER AND ASSIGNMENT OF CERTAIN AGREEMENTS...............
2.06. -13-
SECTION OTHER TRANSACTIONS..........................................
2.07. -14-
SECTION ELECTION OF OFFICERS........................................
2.08. -14-
SECTION PACKAGING REGISTRATION STATEMENT............................
2.09. -00-
XXXXXXX XXXXX SECURITIES LAWS.......................................
2.10. -14-
SECTION LISTING APPLICATION.........................................
2.11. -15-
SECTION CERTAIN FINANCIAL AND OTHER ARRANGEMENTS....................
2.12. -15-
SECTION DIRECTOR, OFFICER AND EMPLOYEE RESIGNATIONS.................
2.13. -15-
SECTION TRANSFERS NOT EFFECTED PRIOR TO THE DISTRIBUTION; TRANSFERS
2.14. DEEMED EFFECTIVE AS OF THE DISTRIBUTION DATE.............. -15-
SECTION ANCILLARY AGREEMENTS........................................
2.15. -00-
XXXXXXX XXXX REALIGNMENT............................................
2.16. -16-
ARTICLE III
THE DISTRIBUTION............................................................ -16-
SECTION TENNECO ACTION PRIOR TO THE DISTRIBUTION....................
3.01. -16-
SECTION THE DISTRIBUTION............................................
3.02. -17-
ARTICLE IV
CONDITIONS TO THE DISTRIBUTION.............................................. -17-
SECTION CONDITIONS PRECEDENT TO THE DISTRIBUTION....................
4.01. -17-
SECTION NO CONSTRAINT...............................................
4.02. -18-
SECTION DEFERRAL OF DISTRIBUTION DATE...............................
4.03. -18-
SECTION PUBLIC NOTICE OF DEFERRED DISTRIBUTION DATE.................
4.04. -18-
ARTICLE V
COVENANTS................................................................... -19-
SECTION FURTHER ASSURANCES..........................................
5.01. -00-
XXXXXXX XXXXXXX NAME................................................
5.02. -19-
SECTION SUPPLIES AND DOCUMENTS......................................
5.03. -19-
SECTION ASSUMPTION AND SATISFACTION OF LIABILITIES..................
5.04. -19-
SECTION NO REPRESENTATIONS OR WARRANTIES; CONSENTS..................
5.05. -20-
SECTION REMOVAL OF CERTAIN GUARANTEES...............................
5.06. -21-
SECTION PUBLIC ANNOUNCEMENTS........................................
5.07. -21-
SECTION INTERCOMPANY AGREEMENTS.....................................
5.08. -21-
SECTION TAX MATTERS.................................................
5.09. -21-
SECTION 1996 AGREEMENTS.............................................
5.10. -22-

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PAGE
------

ARTICLE VI
ACCESS TO INFORMATION....................................................... -22-
SECTION PROVISION, TRANSFER AND DELIVERY OF APPLICABLE CORPORATE
6.01. RECORDS................................................... -00-
XXXXXXX XXXXXX TO INFORMATION.......................................
6.02. -23-
SECTION REIMBURSEMENTS, OTHER MATTERS...............................
6.03. -23-
SECTION CONFIDENTIALITY.............................................
6.04. -23-
SECTION WITNESS SERVICES............................................
6.05. -24-
SECTION RETENTION OF RECORDS........................................
6.06. -24-
SECTION PRIVILEGED MATTERS..........................................
6.07. -24-
ARTICLE VII
INDEMNIFICATION............................................................. -25-
SECTION INDEMNIFICATION BY TENNECO..................................
7.01. -25-
SECTION INDEMNIFICATION BY PACKAGING................................
7.02. -25-
SECTION NO INDEMNIFICATION IN RESPECT OF INDEMNITEE'S INVESTMENT....
7.03. -00-
XXXXXXX XXXXXXXXXXX XX INDEMNIFICATION OBLIGATIONS..................
7.04. -26-
SECTION PROCEDURES FOR INDEMNIFICATION..............................
7.05. -00-
XXXXXXX XXXXXXXXXXXXXXX PAYMENTS....................................
7.06. -29-
SECTION OTHER ADJUSTMENTS...........................................
7.07. -29-
SECTION OBLIGATIONS ABSOLUTE........................................
7.08. -30-
SECTION SURVIVAL OF INDEMNITIES.....................................
7.09. -30-
SECTION REMEDIES CUMULATIVE.........................................
7.10. -30-
SECTION COOPERATION OF THE PARTIES WITH RESPECT TO ACTIONS AND THIRD
7.11. PARTY CLAIMS.............................................. -30-
SECTION CONTRIBUTION................................................
7.12. -31-
SECTION PROCEDURES WITH RESPECT TO TRANSACTION
7.13. LIABILITIES............................................... -31-
ARTICLE VIII
INDEMNIFICATION OF OFFICERS AND DIRECTORS................................... -32-
SECTION INDEMNIFICATION OF OFFICERS AND DIRECTORS...................
8.01. -32-
ARTICLE IX
MISCELLANEOUS............................................................... -32-
SECTION COMPLETE AGREEMENT, CONSTRUCTION............................
9.01. -32-
SECTION ANCILLARY AGREEMENTS........................................
9.02. -32-
SECTION COUNTERPARTS................................................
9.03. -32-
SECTION SURVIVAL OF AGREEMENTS......................................
9.04. -33-
SECTION RESPONSIBILITY FOR EXPENSES.................................
9.05. -33-
SECTION NOTICES.....................................................
9.06. -33-
SECTION WAIVERS.....................................................
9.07. -33-
SECTION AMENDMENTS..................................................
9.08. -33-
SECTION ASSIGNMENT..................................................
9.09. -33-
SECTION SUCCESSORS AND ASSIGNS......................................
9.10. -34-
SECTION TERMINATION.................................................
9.11. -34-
SECTION THIRD PARTY BENEFICIARIES...................................
9.12. -34-
SECTION ATTORNEY FEES...............................................
9.13. -34-
SECTION TITLE AND HEADINGS..........................................
9.14. -34-
SECTION EXHIBITS AND SCHEDULES......................................
9.15. -34-
SECTION SPECIFIC PERFORMANCE........................................
9.16. -34-
SECTION GOVERNING LAW...............................................
9.17. -34-
SECTION SEVERABILITY................................................
9.18. -34-
SECTION SUBSIDIARIES................................................
9.19. -35-

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LIST OF EXHIBITS

EXHIBIT
------- DESCRIPTION

A -- AUTOMOTIVE BUSINESS PRO FORMA BALANCE SHEET
B -- AUTOMOTIVE SUBSIDIARIES
C -- CORPORATE RESTRUCTURING TRANSACTIONS
D -- DEBT REALIGNMENT PLAN
E -- FORM OF HUMAN RESOURCES AGREEMENT
F -- PACKAGING BUSINESS PRO FORMA BALANCE SHEET
G -- PACKAGING SUBSIDIARIES
H -- FORM OF TAX SHARING AGREEMENT
I -- SHARED AGREEMENTS
J -- EXCEPTIONS TO RESIGNATIONS OF COMMON DIRECTORS, OFFICERS
AND EMPLOYEES
K -- FORM OF TRANSITION TRADEMARK LICENSE

DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT is made and entered into as of ,
1999 by and between Tenneco Inc., a Delaware corporation to be renamed Tenneco
Automotive Inc. ("TENNECO"), and Tenneco Packaging Inc., a Delaware corporation
("PACKAGING").

RECITALS

WHEREAS, the Board of Directors of Tenneco has deemed it appropriate and
advisable to:

(a) separate and divide the existing businesses of Tenneco so that (i)
Packaging and its subsidiaries shall own, directly or indirectly, the
Packaging Business (as defined below), and (ii) Tenneco and its remaining
subsidiaries shall own, directly or indirectly, the Automotive Business (as
defined below);

(b) distribute, following consummation of such separation and division
as a dividend to the holders of shares of common stock, par value $.01 per
share, of Tenneco (the "TENNECO COMMON STOCK") all of the outstanding
shares of common stock, $.01 par value, of Packaging (the "PACKAGING COMMON
STOCK"); and

WHEREAS, each of Tenneco and Packaging has determined that it is necessary
and desirable to set forth the principal corporate transactions required to
effect such separation, division and distribution and to set forth other
agreements that will govern certain other matters prior to and following such
separation, division and distribution.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. GENERAL. Unless otherwise defined herein or unless the
context otherwise requires, the following terms will have the meanings set forth
or referenced below (such meanings to be equally applicable to both the singular
and plural forms of the terms defined).

"ACTION" means any action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority or any arbitration
tribunal.

"AFFILIATE" means, when used with respect to a specified Person,
another Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control
with the Person specified. For the purpose of this definition, "control"
means (i) the ownership or control of more than 50% of the equity interest
in any Person, or (ii) the ability to direct or cause the direction of the
management or affairs of a Person, whether through the direct or indirect
ownership of voting interests, by contract or otherwise.

"AGENT" means First Chicago Trust Company of New York, or such other
trust company or bank designated by Tenneco and Packaging, who shall act as
agent for the holders of Tenneco Common Stock in connection with the
Distribution.

"AGREEMENT" means this Distribution Agreement by and between Tenneco
and Packaging, including any amendments hereto and each Schedule and
Exhibit attached hereto.

TENNECO DISTRIBUTION AGREEMENT

"ANCILLARY AGREEMENTS" means all of the written agreements,
instruments, understandings, assignments or other arrangements (other than
this Agreement) entered into by either of the parties hereto or any other
member of its respective Group in connection with the Corporate
Restructuring Transactions, the Distribution and the other transactions
contemplated hereby or thereby, including, without limitation, the
following:

(i) the Conveyancing and Assumption Instruments;

(ii) the Human Resources Agreement;

(iii) the Tax Sharing Agreement;

(iv) the Insurance Agreement;

(v) the Transition Services Agreement; and

(vi) the Transition Trademark License.

"AUTOMOTIVE ASSETS" means, collectively, all of the rights and assets
owned by Tenneco or any of its Subsidiaries as of the close of business on
the Distribution Date, including:

(i) the capital stock of the Automotive Subsidiaries;

(ii) all of the assets included on the Automotive Business Pro
Forma Balance Sheet which are owned by Tenneco or any of its
Subsidiaries as of the close of business on the Distribution Date;

(iii) all of the assets and rights expressly allocated to Tenneco
or any of the Automotive Subsidiaries under this Agreement or any of the
Ancillary Agreements;

(iv) any other asset acquired by Tenneco or any of its Subsidiaries
from the date of the Automotive Business Pro Forma Balance Sheet to the
close of business on the Distribution Date that is owned by Tenneco or
one of its Subsidiaries as of the close of business on the Distribution
Date and that is of a type or nature that would have resulted in such
asset being included as an asset on the Automotive Business Pro Forma
Balance Sheet had it been acquired on or prior to the date of the
Automotive Business Pro Forma Balance Sheet, determined on a basis
consistent with the determination of assets included on the Automotive
Business Pro Forma Balance Sheet; and

(v) Tenneco Trademarks and Trade Names;

provided, however, that notwithstanding the foregoing, the Automotive
Assets shall not include the Packaging Assets or the capital stock of
Packaging.

"AUTOMOTIVE BUSINESS" means the businesses (other than the Packaging
Business or Prior Packaging Business) that, after giving effect to the
Corporate Restructuring Transactions, are or were conducted by:

(i) Tenneco, the Automotive Subsidiaries or any of the other
members of the Automotive Group;

(ii) any other division, Subsidiary or investment of Tenneco, or
any Automotive Subsidiary or any of the other members of the Automotive
Group managed or operated or in existence as of the date of this
Agreement or any prior time, unless such other division, Subsidiary or
investment is expressly included in the Packaging Group immediately
after giving effect to the Corporate Restructuring Transactions; or

TENNECO DISTRIBUTION AGREEMENT

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7

(iii) any business entity acquired or established by or for Tenneco
or any of the Automotive Subsidiaries between the date of the Automotive
Pro Forma Balance Sheet and the close of business on the Distribution
Date that is engaged in, or intends to engage in, any business that is
of a type or nature that would have resulted in such business being
included either as a Subsidiary or an asset of Tenneco on the Automotive
Business Pro Forma Balance Sheet had it been acquired or established on
or prior to the date of the Automotive Business Pro Forma Balance Sheet,
determined on a basis consistent with the determination of the
Subsidiaries and assets included on the Automotive Business Pro Forma
Balance Sheet.

"AUTOMOTIVE BUSINESS PRO FORMA BALANCE SHEET" means the column
entitled "Consolidated Tenneco Pro Forma" on the Tenneco Unaudited Pro
Forma Consolidated Balance Sheet (prepared in accordance with GAAP) as of
June 30, 1999 attached hereto as Exhibit A, other than any amounts
reflected in that column for the line items titled "Short-term debt
(including current maturities on long-term debt)" and "Long-term debt." The
parties agree that the liabilities of each party and its respective
Subsidiaries for indebtedness for borrowed money shall be determined
pursuant to the Debt Realignment.

"AUTOMOTIVE GROUP" means Tenneco, the Automotive Subsidiaries and,
after giving effect to the Corporate Restructuring Transactions and the
Distribution, the corporations, partnerships, joint ventures, investments
and other entities that represent equity investments of Tenneco or any of
the Automotive Subsidiaries.

"AUTOMOTIVE INDEMNITEE" means:

(i) Tenneco, the Automotive Subsidiaries and each Affiliate thereof
after giving effect to the Corporate Restructuring Transactions and the
Distribution; and

(ii) each of the respective past, present and future directors,
officers, employees and agents of any of the entities described in the
immediately preceding clause (i) and each of the heirs, executors,
successors and assigns of such directors, officers, employees and
agents.

"AUTOMOTIVE LIABILITIES" means, collectively, all of the following
Liabilities other than Transaction Liabilities:

(i) all of the Liabilities included on the Automotive Business Pro
Forma Balance Sheet which remain outstanding as of the close of business
on the Distribution Date;

(ii) all of the Liabilities which are incurred or which otherwise
accrue or are accrued at any time on, prior to, or after the date of the
Automotive Business Pro Forma Balance Sheet and which arise or arose out
of, or in connection with, the Automotive Assets, Automotive Business or
Prior Automotive Business, determined on a basis consistent with the
determination of the Liabilities of Tenneco which are included on the
Automotive Business Pro Forma Balance Sheet;

(iii) all of the Liabilities of Tenneco, each Automotive Subsidiary
and each member of the Automotive Group under, or to be retained or
assumed by Tenneco, any Automotive Subsidiary or any other member of the
Automotive Group pursuant to, the Corporate Restructuring Transactions,
the Debt Realignment, this Agreement (including, without limitation, the
liabilities arising from the matters allocated to it in the Litigation
Letter) or any of the Ancillary Agreements;

(iv) all of the Liabilities of the parties hereto or their
respective Subsidiaries (whenever arising whether prior to, on or
following the Distribution Date) arising out of or in connection with or
otherwise relating to the management or conduct before or after the
Distribution Date of the Automotive Business or any Prior Automotive
Business;

TENNECO DISTRIBUTION AGREEMENT

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8

(v) all Automotive Securities Liabilities and Tenneco Securities
Liabilities; and

(vi) all other Liabilities of Tenneco, of each Automotive
Subsidiary and of each of member of the Automotive Group which do not
constitute Packaging Liabilities.

"AUTOMOTIVE RECORDS" has the meaning ascribed to such term in Section
6.01(c) hereof.

"AUTOMOTIVE SECURITIES LIABILITIES" means any and all Securities
Liabilities, other than Transaction Securities Liabilities, of Tenneco or
any entity that was or is a Subsidiary of Tenneco on or before the
Distribution Date arising out of, or in connection with, or relating to any
information, data (financial or otherwise, and including pro forma
financial data) or disclosures (or any omissions of information, data or
disclosures) provided, made or omitted (or alleged to have been provided,
made or omitted) on or prior to the Distribution Date to the extent
relating to or concerning the business, operations, financial or other
results, prospects, plans, potential risks, financing or management of the
Prior Automotive Business, Automotive Business, Automotive Assets or
Automotive Group before or after the Distribution irrespective of (A) who
authored, prepared or provided such information, data or disclosures (or,
as the case may be, the section or discussion in which certain information,
data or disclosure is alleged to have been omitted), or (B) the form in
which, or medium through which (e.g., in writing, orally, electronically,
etc.), such information, data, disclosure, section or discussion was
provided.

"AUTOMOTIVE SUBSIDIARIES" means the Subsidiaries of Tenneco set forth
on Exhibit B hereto and all other Subsidiaries of Tenneco other than
Packaging and the Packaging Subsidiaries.

"BOOKS AND RECORDS" means all books, records, manuals, agreements and
other materials (in any form or medium), including without limitation, all
mortgages, licenses, indentures, contracts, financial data, customer lists,
marketing materials and studies, advertising materials, price lists,
correspondence, distribution lists, supplier lists, production data, sales
and promotional materials and records, purchasing materials and records,
personnel records, manufacturing and quality control records and
procedures, blue prints, research and development files, records, data and
laboratory books, accounts records, sales order files, litigation files,
computer files, computer disks and tapes, microfiche, tape recordings and
photographs.

"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor law.

"COMMISSION" means the United States Securities and Exchange
Commission.

"CONSENTS" has the meaning ascribed to such term in Section 5.05(d)
hereof.

"CONVEYANCING AND ASSUMPTION INSTRUMENTS" means collectively, the
various written agreements, instruments and other documents to be entered
into to effect the Corporate Restructuring Transactions or to otherwise
effect the transfer of assets and the assumption of Liabilities in the
manner contemplated by this Agreement, the Ancillary Agreements and the
Corporate Restructuring Transactions.

"CORPORATE RESTRUCTURING TRANSACTIONS" means, collectively, (i) each
of the distributions, transfers, conveyances, contributions, assignments
and other transactions described and set forth on Exhibit C hereto, and
(ii) such other distributions, transfers, conveyances, contributions,
assignments and other transactions that may be required to be accomplished,
effected or consummated by any of Tenneco, Packaging or any of their
respective divisions, investments, Subsidiaries or Affiliates in order to
separate and divide, in a series of transactions that, to the extent
intended to qualify for tax-free transactions under the Code, shall qualify
for tax-free treatment under

TENNECO DISTRIBUTION AGREEMENT

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9

the Code, the existing businesses of Tenneco so that, except as otherwise
expressly set forth on Exhibit C hereto:

(i) the Packaging Assets shall be owned, directly and indirectly,
by Packaging; and

(ii) the businesses and assets of Tenneco that remain after the
separations and divisions described in clause (i) above, including,
without limitation, the Automotive Assets are, after giving effect to
the Distribution, owned, directly and indirectly, by Tenneco.

"DEBT REALIGNMENT" means the repayment, realignment, refinancing,
exchange and/or modification of the consolidated indebtedness of Tenneco,
as described in Exhibit D attached hereto.

"DGCL" means the General Corporation Law of the State of Delaware.

"DISTRIBUTION" means the distribution on the Distribution Date as a
dividend to holders of record of shares of Tenneco Common Stock as of the
Distribution Record Date of all of the outstanding Packaging Common Stock
owned by Tenneco on the basis provided in Section 3.02 hereof.

"DISTRIBUTION DATE" means such date as may hereafter be determined by
Tenneco's Board of Directors as the date on which the Distribution shall be
effected.

"DISTRIBUTION RECORD DATE" means the close of business on the date
determined by the Board of Directors of Tenneco for the purpose of
determining the holders of record of Tenneco Common Stock entitled to
participate in the Distribution.

"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other Governmental restrictions (including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. 9601, et seq.), whether now or hereafter in existence, relating to
the environment, natural resources or human health and safety or endangered
or threatened species of fish, wildlife and plants or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambient air, surface
water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, petroleum or petroleum products,
chemicals, or industrial, toxic or hazardous substances or wastes or the
cleanup or other remediation thereof.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

"GAAP" means United States generally accepted accounting principles
and practices, as in effect on the date of this Agreement, as promulgated
by the Financial Accounting Standards Board and its predecessors.

"GOVERNMENTAL AUTHORITY" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state
or local, domestic or foreign.

"GROUP" means (i) with respect to Tenneco, the Automotive Group, and
(ii) with respect to Packaging, the Packaging Group.

"HUMAN RESOURCES AGREEMENT" means the Human Resources Agreement by and
between Tenneco and Packaging, which agreement shall be entered into on or
prior to the Distribution Date in substantially the form attached hereto as
Exhibit E.

TENNECO DISTRIBUTION AGREEMENT

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"INDEMNIFIABLE LOSSES" means, with respect to any Person, any and all
losses, liabilities, penalties, claims, damages, demands, costs and
expenses (including, without limitation, reasonable attorneys' fees,
investigation expenses and any and all other out-of-pocket expenses, but
excluding any punitive or consequential damages) or other Liabilities
whatsoever that are assessed, imposed, awarded against, incurred or accrued
by such Person (a) in investigating, preparing for, defending against or
otherwise arising out of or in connection with any Actions, any potential
or threatened Actions or any Third Party Claims for which such Person would
be entitled to indemnification under Article VII hereof, (b) as a result of
the failure to remove as a guarantor or obligor any Person that is
contemplated being removed as a guarantor or obligor pursuant to Section
5.06 hereof, or (c) in respect of any other event, occurrence or matter for
which such Person would be entitled to indemnification under Article VII
hereof, in each case whether accrued or incurred on, before or after the
date of this Agreement.

"INDEMNIFYING PARTY" has the meaning ascribed to such term in Section
7.04(a) hereof.

"INDEMNITEE" has the meaning ascribed to such term in Section 7.04(a)
hereof.

"INSURANCE AGREEMENT" means the Insurance Agreement by and between
Tenneco and Packaging, which agreement shall be entered into on or prior to
the Distribution Date and which shall provide for the separation and
administration of existing insurance programs and the purchase of "run-off"
policies for fiduciaries and directors and officers.

"INSURANCE PROCEEDS" means, with respect to any insured party, those
monies, net of any applicable premium adjustment retrospectively-rated
premium, deductible, retention or cost of reserve paid or held by or for
the benefit of such insured, which are either:

(i) received by an insured from an insurance carrier; or

(ii) paid by an insurance carrier on behalf of an insured.

"LAW" means any constitutional provision, statute, law, ordinance,
rule, regulation, permit, decree, injunction, order, ruling, determination,
finding or writ of any Governmental Authority.

"LIABILITIES" means any and all debts, liabilities, obligations,
responsibilities, response actions, losses, damages (whether compensatory,
punitive or statutory), fines, penalties and sanctions, absolute or
contingent, matured or unmatured, liquidated or unliquidated, foreseen or
unforeseen, joint, several or individual, asserted or unasserted, accrued
or unaccrued, known or unknown, whenever arising, including, without
limitation, those arising under or in connection with any Law (including
any Environmental Law), Action, threatened Action, order or consent decree
of any Governmental Authority or any award of any arbitration tribunal, and
those arising under any contract, guarantee, commitment or undertaking,
whether sought to be imposed by a Governmental Authority, private party or
party to this Agreement, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute, or
otherwise, and including any costs, expenses, interest, attorneys' fees,
disbursements and expense of counsel, expert and consulting fees and costs
related thereto or to the investigation or defense thereof.

"LITIGATION LETTER" means the letter agreement between Tenneco and
Packaging relating to the notice and defense of existing Third Party
Claims.

"NYSE" means the New York Stock Exchange.

TENNECO DISTRIBUTION AGREEMENT

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"PACKAGING ASSETS" means, collectively, all of the following rights
and assets that are owned by Tenneco or any of its Subsidiaries as of the
close of business on the Distribution Date:

(i) the capital stock of the Packaging Subsidiaries;

(ii) all of the assets included on the Packaging Business Pro Forma
Balance Sheet that are owned by Tenneco or any of its Subsidiaries as of
the close of business on the Distribution Date;

(iii) all of the assets and rights expressly allocated to Packaging
or any Packaging Subsidiary under this Agreement, the Contribution
Agreement or any of the Ancillary Agreements; and

(iv) any other asset acquired by Tenneco or any of its Subsidiaries
from the date of the Packaging Business Pro Forma Balance Sheet or to
the close of business on the Distribution Date that is owned by Tenneco
or any of its Subsidiaries as of the close of business on the
Distribution Date and that is of a type or nature that would have
resulted in such asset being included as an asset on the Packaging
Business Pro Forma Balance Sheet had it been acquired on or prior to the
date thereof, determined on a basis consistent with the determination of
the assets included on the Packaging Business Pro Forma Balance Sheet.

"PACKAGING BUSINESS" means the businesses that, after giving effect to
the Corporate Restructuring Transactions, are or were conducted by:

(i) Packaging, the Packaging Subsidiaries or any of the other
members of the Packaging Group; or

(ii) any business entity acquired or established by or for Tenneco,
Packaging or any of the Packaging Subsidiaries between the date of this
Agreement and the close of business on the Distribution Date that is
engaged in, or intends to engage in, any business that is of a type or
nature that would have resulted in such business being included either
as a Subsidiary or an asset on the Packaging Business Pro Forma Balance
Sheet, had it been acquired or established on or prior to the date
thereof, determined on a basis consistent with the determination of the
Subsidiaries and assets included on the Packaging Business Pro Forma
Balance Sheet.

"PACKAGING BUSINESS PRO FORMA BALANCE SHEET" means the column entitled
"Packaging Pro Forma Combined" on the Packaging Unaudited Pro Forma
Combined Balance Sheet (prepared in accordance with GAAP) as of June 30,
1999 attached hereto as Exhibit F other than any amounts reflected in that
column for the line items titled "Short-term debt" and "Long-term debt".
The parties agree that the liabilities of each party and its respective
Subsidiaries for indebtedness for borrowed money shall be determined
pursuant to the Debt Realignment.

"PACKAGING COMMON STOCK" has the meaning ascribed to such term in the
Recitals to this Agreement.

"PACKAGING" has the meaning ascribed to such term in the Recitals to
this Agreement.

"PACKAGING GROUP" means Packaging, the Packaging Subsidiaries and,
after giving effect to the Corporate Restructuring Transactions and the
Distribution, the corporations, partnerships, joint ventures, investments
and other entities that represent equity investments of any of Packaging or
any of the Packaging Subsidiaries.

"PACKAGING INDEMNITEES" means:

(i) Packaging, the Packaging Subsidiaries and each Affiliate
thereof after giving effect to the Corporate Restructuring Transactions
and the Distribution; and

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"PACKAGING INFORMATION STATEMENT" means the information statement or
registration statement relating to Packaging and the transactions
contemplated hereby to be distributed to holders of Tenneco Common Stock
pursuant to the terms of this Agreement.

"PACKAGING LIABILITIES" means, collectively, all of the following
Liabilities other than Transaction Liabilities:

(i) all of the Liabilities included on the Packaging Business Pro
Forma Balance Sheet which remain outstanding as of the close of business
on the Distribution Date;

(ii) all of the Liabilities which are incurred or which otherwise
accrue or are accrued at any time on, prior to or after the date of the
Packaging Business Pro Forma Balance Sheet, and which arise or arose out
of, or in connection with the Packaging Assets, Packaging Business or
Prior Packaging Business, determined on a basis consistent with the
determination of Liabilities of Packaging on the Packaging Business Pro
Forma Balance Sheet;

(iii) all of the Liabilities of Packaging, each Packaging
Subsidiary or any other member of the Packaging Group under, or to be
retained or assumed by Packaging, any Packaging Subsidiary or any of the
other members of the Packaging Group pursuant to the Corporate
Restructuring Transactions, the Debt Realignment, this Agreement
(including, without limitation, the liabilities arising from the matters
allocated to it in the Litigation Letter) or any of the Ancillary
Agreements;

(iv) all of the Liabilities of the parties hereto or their
respective Subsidiaries (whenever arising whether prior to, at or
following the Distribution Date) arising out of or in connection with or
otherwise relating to the management or conduct before or after the
Distribution Date of the Packaging Business or Prior Packaging Business;

(v) the Packaging Securities Liabilities; and

(vi) all other Liabilities of Packaging, of each Packaging
subsidiary and of each member of the Packaging Group that are not
expressly included in clauses (i) through (v) of the definition of
Automotive Liabilities.

"PACKAGING RECORDS" has the meaning ascribed to such term in Section
6.01(a) hereof.

"PACKAGING REGISTRATION STATEMENT" means the Registration Statement on
Form 10 to be filed with the Commission pursuant to the requirements of
Section 12 of the Exchange Act and the rules and regulations thereunder in
order to register the Packaging Common Stock under Section 12(b) of the
Exchange Act.

"PACKAGING SECURITIES LIABILITIES" means any and all Securities
Liabilities, other than Transaction Securities Liabilities, of Tenneco or
any entity that was or is a Subsidiary of Tenneco on or prior to the
Distribution Date arising out of, or in connection with, or relating to any
information, data (financial or otherwise, and including pro forma
financial data) or disclosures (or any omissions of information, data or
disclosures) provided, made or omitted (or alleged to have been provided,
made or omitted) on or prior to the Distribution Date to the extent
relating to or concerning the business, operations, financial or other
results, prospects, plans, potential risks, financing or management of the
Prior Packaging Business, Packaging Business, Packaging Assets or Packaging
Group before or after the Distribution irrespective of (A) who authored,
prepared or provided such information, data or disclosures (or, as the case
may be, the section or discussion in which certain

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information, data or disclosure is alleged to have been omitted), or (B)
the form in which, or medium through which (e.g., in writing, orally,
electronically, etc.), such information, data, disclosure, section or
discussion was provided.

"PACKAGING SUBSIDIARIES" means the Subsidiaries listed on Exhibit G
hereto.

"PERSON" means any natural person, corporation, business trust, join
venture, association, company, partnership, limited liability company or
other entity, or any government, or any agency or political subdivision
thereof.

"PRIOR AUTOMOTIVE BUSINESS" means, collectively, the businesses that
were conducted by any division, Subsidiary, other business entity or
investment of Tenneco (or one of its former Subsidiaries or former
Affiliates) that (i) at any time prior to the Distribution Date, were
included in the "automotive parts" segment for purposes of segment
reporting in any Annual Report on Form 10-K of Tenneco or the entity that,
from December 8, 1987 to December 12, 1996, was known as "Tenneco Inc.",
and (ii) were sold, transferred or otherwise discontinued or disposed of
prior to the Distribution Date.

"PRIOR PACKAGING BUSINESS" means, collectively, the businesses that
were conducted by any division, Subsidiary, other business entity or
investment of Tenneco (or one of its former Subsidiaries or former
Affiliates) that (i) at any time prior to the Distribution Date were
included in the "packaging," "specialty packaging," or "paperboard
packaging" segments for purposes of segment reporting in any Annual Report
on Form 10-K of Tenneco or the entity that, from December 8, 1987 to
December 12, 1996, was known as "Tenneco Inc.", and (ii) were sold,
transferred or otherwise discontinued or disposed of prior to the
Distribution Date.

"PRIOR RULINGS" means, collectively, the private letter ruling issued
by the Internal Revenue Service on October 30, 1996 with control number
PLR-240198-96, and the three private letter rulings supplementing that
ruling, issued by the Internal Revenue Service on December 4, 1996 (control
number PLR-252639-96), December 5, 1996 (control number PLR-253203-96) and
May 27, 1997 (control number PLR-104206-97).

"PRIVILEGE" has the meaning ascribed to such term in Section 6.07(a)
hereof.

"PRIVILEGED INFORMATION" has the meaning ascribed to such term in
Section 6.07(a) hereof.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SECURITIES LIABILITIES" means any and all losses, liabilities,
penalties, claims, damages, demands, costs or expenses or other Liabilities
whatsoever that are assessed, imposed, awarded against, incurred or accrued
by a Person arising out of or relating in whole or in part to any Action,
any potential or threatened Action or any Third Party Claim (or potential
or threatened Third Party Claim) by any Governmental Authority or any other
Person that is based on any violations or alleged violations of the
Securities Act, Exchange Act, any of the rules or regulations of the
Commission promulgated under the Securities Act or Exchange Act, or any
other securities or other similar Law.

"SUBSIDIARY" means, with respect to any Person:

(i) any corporation of which at least a majority in interest of the
outstanding voting stock (having by the terms thereof voting power under
ordinary circumstances to elect a majority of the directors of such
corporation, irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or might have
voting power by reason of the happening of a contingency) is at the
time, directly or indirectly, owned or controlled by such Person or by
such Person and one or more of its Subsidiaries; or

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(ii) any non-corporate entity in which such Person or such Person
and one or more Subsidiaries of such Person either (a) directly or
indirectly, at the date of determination thereof, has at least majority
ownership interest, or (b) at the date of determination is a general
partner or an entity performing similar functions (e.g., manager of a
limited liability company or a trustee of a trust).

"TAX" or "TAXES" means any income, gross income, gross receipts,
profits, capital stock, franchise, withholding, payroll, social security,
workers compensation, unemployment, disability, property, ad valorem,
stamp, excise, occupation, services, sales, use, license, lease, transfer,
import, export, value added, alternative minimum, estimated or other
similar tax (including any fee, assessment or other charge in the nature of
or in lieu of any tax) imposed by any governmental entity or political
subdivision thereof, and any interest, penalties, additions to tax or
additional amounts in respect of the foregoing.

"TAX SHARING AGREEMENT" means the Tax Sharing Agreement by and among
Tenneco and Packaging, which agreement shall be entered into on or prior to
the Distribution Date in substantially the form attached hereto as Exhibit
I.

"TENNECO" means Tenneco Inc., a Delaware corporation.

"TENNECO COMMON STOCK" has the meaning ascribed to such term in the
Recitals to this Agreement.

"TENNECO CORPORATE RECORDS" has the meaning ascribed to such term in
Section 6.01(a) hereof.

"TENNECO HOLDERS" means the holders of record of Tenneco Common Stock
as of the Distribution Record Date.

"TENNECO SECURITIES LIABILITIES" means any and all Securities
Liabilities of Tenneco or any of its Subsidiaries including, without
limitation, Tenneco Automotive Inc., other than Packaging Securities
Liabilities or Transaction Securities Liabilities.

"TENNECO TRADEMARKS AND TRADE NAMES" means trademarks, service marks,
and trade names containing "TENNECO", "TEN", or "TENN" or variations
thereof, along with their respective applications and registrations
wherever used or registered.

"TERMINATION DATE" means the date on which this Agreement is
terminated pursuant to and in accordance with the provisions of Section
8.11 of this Agreement.

"THIRD PARTY CLAIM" has the meaning as defined in Section 7.05(a)
hereof.

"TRADEMARK TRANSITION LICENSE" has the meaning ascribed to such term
in Section 5.02 hereof.

"TRANSACTION LIABILITIES" means any and all Transaction Securities
Liabilities and any and all Liabilities imposed on Tenneco, Packaging, or
any member of their respective Group, jointly or severally, arising as a
result of the actions taken in connection with or pursuant to this
Agreement, any Ancillary Agreement, the Debt Realignment or any of the
Corporate Restructuring Transactions that are based on:

(i) any violation or alleged violation of the DGCL or any other
corporate or other similar Law, to the extent such violation occurred or
is alleged to have occurred on or prior to the Distribution Date; or

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(ii) any violation or alleged violation by any officer or director
of any member of the Packaging Group or the Automotive Group of such
officer's or director's fiduciary duty as an officer or director.

"TRANSACTION SECURITIES LIABILITIES" means any and all Securities
Liabilities imposed on Tenneco, Packaging, or any member of their
respective Group, jointly or severally, arising as a result of the actions
taken in connection with or pursuant to this Agreement, any Ancillary
Agreement, the Debt Realignment or any of the Corporate Restructuring
Transactions that are not Automotive Securities Liabilities or Packaging
Securities Liabilities.

"TRANSITION SERVICES AGREEMENT" means the Transition Services
Agreement by and between Tenneco and Packaging, which agreement shall be
entered into on or prior to the Distribution Date pursuant to which
Packaging shall provide certain administrative services to Tenneco after
the Distribution Date.

"1996 AGREEMENTS" means the following agreements, and any amendments
thereto:

(i) Distribution Agreement, dated November 1, 1996, by and among
El Paso Tennessee Pipeline Co. (formerly Tenneco Inc.),
Tenneco Inc. (formerly New Tenneco Inc.) and Newport News
Shipbuilding Inc., as amended (the "1996 DISTRIBUTION
AGREEMENT");

(ii) Debt and Cash Allocation Agreement, dated December 11, 1996,
by and among El Paso Tennessee Pipeline Co. (formerly
Tenneco Inc.), Tenneco Inc. (formerly New Tenneco Inc.) and
Newport News Shipbuilding Inc. (the "1996 DEBT AND CASH
ALLOCATION AGREEMENT");

(iii) Benefits Agreement, dated December 11, 1996, by and among El
Paso Tennessee Pipeline Co. (formerly Tenneco Inc.), Tenneco
Inc. (formerly New Tenneco Inc.) and Newport News
Shipbuilding Inc.;

(iv) Insurance Agreement, dated December 11, 1996, by and among El
Paso Tennessee Pipeline Co. (formerly Tenneco Inc.), Tenneco
Inc. (formerly New Tenneco Inc.) and Newport News
Shipbuilding Inc.;

(v) Tax Sharing Agreement, dated December 11, 1996, by and among
El Paso Tennessee Pipeline Co. (formerly Tenneco Inc.),
Newport News Shipbuilding Inc., Tenneco Inc. (formerly New
Tenneco Inc.) and El Paso Natural Gas Company;

(vi) First Amendment to Tax Sharing Agreement, dated as of
December 11, 1996, among El Paso Tennessee Pipeline Co.
(formerly Tenneco Inc.), Tenneco Inc. (formerly New Tenneco
Inc.) and Newport News Shipbuilding Inc.;

(vii) Transition Services Agreement, dated June 19, 1996, by and
among Tenneco Business Services Inc., El Paso Tennessee
Pipeline Co. (formerly Tenneco Inc.) and El Paso Natural Gas
Company;

(viii) Trademark Transition License Agreement, dated December 11,
1996, by and between Newport News Shipbuilding Inc. and
Tenneco Inc. (formerly New Tenneco Inc.) (the "Newport News
License"); and

(ix) Trademark Transition License Agreement, dated December 11,
1996, by and between Tenneco Inc. (formerly New Tenneco Inc.)
and El Paso Tennessee Pipeline Co. (formerly Tenneco Inc.)
(the "El Paso License").

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SECTION 1.02. REFERENCES. References to an "Exhibit" or to a "Schedule"
are, unless otherwise specified, to one of the Exhibits or Schedules attached to
this Agreement, and references to a "Section" are, unless otherwise specified to
one of the Sections of this Agreement. References to "including" shall be deemed
to mean "including, without limitation."

ARTICLE II

PRE-DISTRIBUTION TRANSACTIONS;
CERTAIN COVENANTS

SECTION 2.01. CORPORATE RESTRUCTURING TRANSACTIONS. On or prior to the
Distribution Date (but in all events prior to the Distribution) and subject to
Section 2.06 below, each of Tenneco and Packaging shall, and shall cause each of
their respective divisions, investments, Subsidiaries and Affiliates to, as
applicable, take such action or actions as is necessary to cause, effect and
consummate the Corporate Restructuring Transactions. Each of Tenneco and
Packaging hereby agrees that any one or more of the Corporate Restructuring
Transactions may be modified, supplemented or eliminated on or prior to the
Distribution Date; provided such modification, supplement or elimination is
determined to be necessary or appropriate (i) to divide the existing businesses
of Tenneco so that Tenneco's packaging businesses and administrative services
operations shall be owned, directly and indirectly, by Packaging, or so that
Tenneco's automotive businesses shall be owned, directly and indirectly by
Tenneco after giving effect to the Distribution, in each case so long as the
ruling referred to in the following clause (ii) will not be adversely affected
by such modification, supplement, or elimination, or (ii) to obtain a ruling
from the Internal Revenue Service as described in Section 4.01(d).

SECTION 2.02. PRE-DISTRIBUTION STOCK DIVIDEND TO TENNECO. On or prior to
the Distribution Date (but in all events prior to the Distribution), Packaging
shall issue to Tenneco, as a stock dividend, the number of shares of Packaging
Common Stock as is required to effect the Distribution, as certified by the
Agent. In connection therewith, Tenneco shall deliver to Packaging for
cancellation the share certificate (or certificates) then held by it
representing all Packaging Common Stock, and Packaging shall issue a new
certificate (or certificates) to Tenneco representing the total number of shares
of Packaging Common Stock to be owned by Tenneco after giving effect to such
stock dividend.

SECTION 2.03. CERTIFICATE OF INCORPORATION AND BYLAWS OF PACKAGING. On or
prior to the Distribution Date (but in all events prior to the Distribution),
Tenneco and Packaging shall each take all necessary actions so that, as of the
Distribution Date, the certificate of incorporation and bylaws of Packaging are
amended and/or restated in such manner as is determined appropriate by Tenneco.

SECTION 2.04. ELECTION OF DIRECTORS OF PACKAGING. On or prior to the
Distribution Date, Tenneco, as the sole stockholder of Packaging, shall take all
necessary action so that as of the Distribution Date the directors of Packaging
will be as set forth in the Packaging Information Statement.

SECTION 2.05. TRANSFER AND ASSIGNMENT OF CERTAIN LICENSES AND PERMITS.

(a) LICENSES AND PERMITS RELATING TO THE PACKAGING BUSINESS. On or
prior to the Distribution Date, or as soon as reasonably practicable
thereafter, Tenneco shall (and, if applicable, shall cause any other Person
over which it has legal or effective direct or indirect control to) duly
and validly transfer or cause to be duly and validly transferred to the
appropriate member of the Packaging Group (as directed by Packaging) all
transferrable licenses, permits and authorizations issued by any
Governmental Authority that relate exclusively to the Packaging Business
but which are held in the name of Tenneco, any member of the Automotive
Group, or any of their respective employees, officers, directors,
stockholders or agents.

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(b) LICENSES AND PERMITS RELATING TO THE AUTOMOTIVE BUSINESS. On or
prior to the Distribution Date, or as soon as reasonably practicable
thereafter, Packaging shall (and if applicable, shall cause any other
Person over which it has legal or effective direct or indirect control to)
duly and validly transfer or cause to be duly and validly transferred to
the appropriate member of the Automotive Group (as directed by Tenneco) all
transferrable licenses, permits and authorizations issued by any
Governmental Authority that relate exclusively to the Automotive Business
but which are held in the name of any member of the Packaging Group or any
of their respective employees, officers, directors, stockholders or agents.

SECTION 2.06. TRANSFER AND ASSIGNMENT OF CERTAIN AGREEMENTS.

(a) TRANSFER AND ASSIGNMENT OF AUTOMOTIVE BUSINESS AGREEMENTS. On or
prior to the Distribution Date, or as soon as reasonably practicable
thereafter, and subject to the limitations set forth in this Section 2.06,
Packaging shall (and, if applicable, shall cause any of the other members
of its Group over which it has legal or effective direct or indirect
control to) assign, transfer and convey to Tenneco (or such other member of
the Automotive Group as Tenneco shall direct) all of its (or such other
member of its Group's) right, title and interest in and to any and all
agreements that relate exclusively to the Automotive Business or any member
of the Automotive Group.

(b) TRANSFER AND ASSIGNMENT OF PACKAGING BUSINESS AGREEMENTS. On or
prior to the Distribution Date, or as soon as reasonably practicable
thereafter, and subject to the limitations set forth in this Section 2.06,
Tenneco shall (and, if applicable, shall cause any other Person over which
it has legal or effective direct or indirect control to) assign, transfer
and convey to Packaging (or such other member of the Packaging Group as
Packaging shall direct) all of its (or such other Person's) right, title
and interest in and to any and all agreements that relate exclusively to
the Packaging Business or any member of the Packaging Group.

(i) Exhibit I attached hereto contains a list of certain third
party agreements with Tenneco Business Services, Inc. under or through
which both the Automotive Group and Packaging Group has obtained or does
obtain goods or services. Of these third party agreements, those listed
in Section 1 of Exhibit I have been modified to provide that Tenneco and
Packaging may each order, receive and pay for the goods and services to
which such agreements apply for its respective Group as if each company
had a separate contract. The third-party agreements listed in Section 2
of Exhibit I will be administered by Packaging or one of its
Subsidiaries after the Distribution and the allocated costs for such
goods or services will be billed to and paid by Tenneco on a recurring
basis.

(ii) Except with respect to the 1996 Agreements and the agreements
listed on Exhibit I hereto, and subject to the provisions of Section
5.08 below, any agreement to which any party hereto (or any other member
of such party's Group) is a party that inures to the benefit of or
relates to the Automotive Business and the Packaging Business, but that
is not a Packaging Asset or otherwise the subject of this Agreement or
any Ancillary Agreement, shall be assigned in part, at the expense and
risk of the Assignee (as defined herein), on or prior to the
Distribution Date or as soon as reasonably practicable thereafter, so
that each party (or such other member of such party's Group) shall be
entitled to the rights and benefits inuring to its business under such
agreement.

(d) OBLIGATIONS OF ASSIGNEES. The assignee of any agreement assigned,
in whole or in part, hereunder (an "ASSIGNEE") shall, as a condition to
such assignment, assume and agree to pay, perform and fully discharge all
obligations of the assignor under such agreement (whether such obligations
arose or were incurred prior to, on or subsequent to the Distribution Date
and irrespective

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of whether such obligations have been asserted as of the Distribution Date)
or, in the case of a partial assignment under Section 2.06(c)(ii) above,
such Assignee's related portion of such obligations as determined in
accordance with the terms of the relevant agreement, where determinable on
the face thereof, or otherwise as determined in accordance with the
practice of the parties prior to the Distribution. Furthermore, the
Assignee shall use its reasonable efforts to cause the assignor of such
agreement to be released from the Assignee's obligations under the assigned
agreements.

(e) NO ASSIGNMENT OF CERTAIN AGREEMENTS. Notwithstanding anything in
this Agreement to the contrary, this Agreement shall not constitute an
agreement to assign any agreement, in whole or in part, or any rights
thereunder if the agreement to assign or attempt to assign, without the
consent of a third party, would constitute a breach thereof or in any way
adversely affect the rights of the Assignee thereto until such consent is
obtained. If an attempted assignment thereof would be ineffective or would
adversely affect the rights of any party hereto (or a member of its Group)
so that the Assignee would not, in fact, receive all such rights, the
parties hereof will make efforts consistent with Section 5.05(d) hereof to
effect any arrangement designed reasonably to provide for the Assignee the
benefits of, and to permit the Assignee to assume liabilities under, any
such agreement subject to the remaining sentences of this Section 2.06(e).
There are certain software license agreements held in the name of a member
of the Packaging Group that presently inure to the benefit of the
Automotive Business and the Packaging Business. Notwithstanding any other
provision of this Agreement and subject to the terms of the Transition
Service Agreement, each such license agreement shall continue to be held by
that member of the Packaging Group without any obligation of any party to
cause the assignment or inurement to the benefit of such license agreement,
or to effect any arrangement to provide such benefit, to the Automotive
Business, except where the license agreement expressly permits the benefits
and obligations to be divided among the Businesses or as may be negotiated
with the licensor by that member of the Packaging Group and such other
parties.

SECTION 2.07. OTHER TRANSACTIONS. On or prior to the Distribution Date (but
in all events prior to the Distribution), each of Tenneco and Packaging shall
have consummated those other transactions in connection with the Corporate
Restructuring Transactions and the Distribution that are contemplated by the
Packaging Information Statement and the ruling request submitted by Tenneco to
the Internal Revenue Service dated April 29, 1999 (as subsequently
supplemented), and not specifically referred to in Sections 2.01 through 2.06
above, as long as such other transactions will not adversely affect the ruling
from the Internal Revenue Service.

SECTION 2.08. ELECTION OF OFFICERS. On or prior to the Distribution Date,
each of Tenneco and Packaging shall, as applicable, take all actions necessary
and desirable so that as of the Distribution Date the officers of Packaging will
be as set forth in the Packaging Information Statement.

SECTION 2.09. PACKAGING REGISTRATION STATEMENT. Tenneco and Packaging shall
prepare or cause to be prepared, and Packaging shall file or cause to be filed
with the Commission, the Packaging Registration Statement. The Packaging
Registration Statement shall include or incorporate by reference the Packaging
Information Statement setting forth appropriate disclosure concerning Tenneco,
Packaging, the Distribution and such other matters as may be required to be
disclosed therein by the provisions of the Exchange Act and the rules and
regulations promulgated thereunder. Tenneco and Packaging shall take all such
actions as may be reasonably necessary or appropriate in order to cause the
Packaging Registration Statement to become effective by order of the Commission
pursuant to the Exchange Act.

SECTION 2.10. STATE SECURITIES LAWS. Prior to the Distribution Date,
Tenneco and Packaging shall take all such action as may be necessary or
appropriate under the securities or blue sky laws of states or other political
subdivisions of the United States in order to effect the Distribution.

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SECTION 2.11. LISTING APPLICATION. Prior to the Distribution Date, Tenneco
and Packaging shall prepare and file with the NYSE a listing application and
related documents and shall take all such other actions with respect thereto as
shall be necessary or desirable in order to cause the NYSE to list on or prior
to the Distribution Date, subject to official notice of issuance, the Packaging
Common Stock.

SECTION 2.12. CERTAIN FINANCIAL AND OTHER ARRANGEMENTS.

(a) SETTLEMENT OF INTERCOMPANY ACCOUNTS BETWEEN PACKAGING GROUP AND
AUTOMOTIVE GROUP. All intercompany receivables, payables and loans (other
than receivables, payables and loans otherwise specifically provided for in
any of the Ancillary Agreements or hereunder), including, without
limitation, in respect of any cash balances, any cash balances representing
deposited checks or drafts for which only a provisional credit has been
allowed or any cash held in any centralized cash management system, between
any member of the Packaging Group, on the one hand, and any member of the
Automotive Group, on the other hand, shall, as of the close of business on
the Distribution Date, be settled, capitalized or converted into ordinary
trade accounts, in each case as may be agreed in writing prior to the
Distribution Date by duly authorized representatives of Tenneco and
Packaging.

(b) OPERATIONS IN ORDINARY COURSE. Except as otherwise provided in
this Agreement or any Ancillary Agreement during the period from the date
of this Agreement through the Distribution Date, each of Tenneco and
Packaging shall, and shall cause any entity that is a Subsidiary of such
party at any time during such period to, conduct its business in a manner
substantially consistent with current and past operating practices and in
the ordinary course.

SECTION 2.13. DIRECTOR, OFFICER AND EMPLOYEE RESIGNATIONS. Subject to the
provisions of Section 2.04 and Section 2.08 above:

(a) RESIGNATIONS BY DIRECTORS AND EMPLOYEES OF THE AUTOMOTIVE
GROUP. Tenneco shall cause all of its directors and all employees of the
Automotive Group to resign, effective as of (or immediately prior to) the
close of business on the Distribution Date, from all boards of directors or
similar governing bodies (including committees and trusts responsible for
benefit plans and compensation structures) of each member of the Packaging
Group on which they serve, and from all positions as officers or employees
of any member of the Packaging Group, except as otherwise set forth on
Exhibit J hereto or in the Packaging Information Statement or as otherwise
mutually agreed to in writing on or prior to the Distribution Date by
Tenneco and Packaging.

(b) RESIGNATIONS BY DIRECTORS AND EMPLOYEES OF THE PACKAGING
GROUP. Packaging shall cause all of its directors and all employees of the
Packaging Group to resign, effective as of the close of business on the
Distribution Date, from all boards of directors or similar governing bodies
(including committees and trusts responsible for benefit plans and
compensation structures) of each member of the Automotive Group on which
they serve, and from all positions as officers or employees of any member
of the Automotive Group, except as otherwise set forth on Exhibit J hereto
or in the Packaging Information Statement or as otherwise mutually agreed
to in writing on or prior to the Distribution Date by Packaging and
Tenneco.

SECTION 2.14. TRANSFERS NOT EFFECTED PRIOR TO THE DISTRIBUTION; TRANSFERS
DEEMED EFFECTIVE AS OF THE DISTRIBUTION DATE. To the extent that any transfers
or transactions contemplated by this Article II shall not have been consummated
on or prior to the Distribution Date, the parties hereto shall cooperate and
make efforts consistent with Section 5.05(d) hereof (and shall cause each of
their respective Affiliates and each member of their respective Groups over
which they have legal or effective direct or indirect control to cooperate and
make such efforts) to effect such transfers or transactions as promptly
following the Distribution Date as shall be practicable. Nothing herein shall be
deemed to require the transfer of any assets or the assumption of any
Liabilities which by

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their terms or operation of Law cannot be transferred or assumed, provided,
however, that the parties hereto shall cooperate (and shall cause each of their
respective Affiliates and each member of their respective Groups over which they
have legal or effective direct or indirect control to cooperate) to seek to
obtain any necessary consents or approvals for the transfer of all assets and
Liabilities contemplated to be transferred or assumed pursuant to this Article
II and Section 5.04, in a manner consistent with Section 5.05(d) hereof. In the
event that any such transfer of assets or assumption of Liabilities has not been
consummated, from and after the Distribution Date the party retaining such asset
or Liability (or, as applicable, such other member or members of such party's
Group) shall hold such asset in trust for the use and benefit of the party
entitled thereto (at the expense of the party entitled thereto) or retain such
Liability for the account of the party by whom such Liability is to be assumed
pursuant hereto, as the case may be, and take such other action pursuant to
Section 5.05(d) hereof as may be reasonably requested by the party to whom such
asset is to be transferred, or by whom such Liability is to be assumed, as the
case may be, in order to place such party, insofar as is reasonably possible, in
the same position as would have existed had such asset or Liability been
transferred or assumed as contemplated hereby. As and when any such asset or
Liability becomes transferable or assumable, such transfer shall be effected
forthwith. As of the Distribution Date, each party hereto (or, if applicable,
such other members of such party's Group) shall be deemed to have acquired (or,
as applicable, retained) complete and sole beneficial ownership over all of the
assets, together with all rights, powers and privileges incident thereto, and
shall be deemed to have assumed in accordance with the terms of this Agreement
all of the Liabilities, and all duties, obligations and responsibilities
incident thereto, which such party (or any other member of such party's Group)
is entitled to acquire or required to assume pursuant to the terms of this
Agreement.

SECTION 2.15. ANCILLARY AGREEMENTS. Prior to the Distribution Date, each
of Tenneco and Packaging shall enter into, or where applicable shall cause such
other members of their respective Group to enter into, (a) the Ancillary
Agreements and (b) any other agreements in respect of the Corporate
Restructuring Transactions and the Distribution as are reasonably necessary or
appropriate in connection with the transactions contemplated hereby and thereby.

SECTION 2.16. DEBT REALIGNMENT. Tenneco and Packaging shall each use
commercially reasonable efforts so that, immediately prior to the Distribution,
the Debt Realignment plan set forth on Exhibit D attached hereto has been
effected in accordance with the goal set forth in clause 1 of Exhibit D.
Notwithstanding the foregoing, neither Tenneco nor Packaging, nor any member of
its respective Group, shall have any recourse, claim, or cause of action to or
against any other member of either Group if the ultimate result of the Debt
Realignment, the manner of the Debt Realignment or any element or component
thereof varies from that set forth in Exhibit D.

ARTICLE III

THE DISTRIBUTION

SECTION 3.01. TENNECO ACTION PRIOR TO THE DISTRIBUTION. Subject to the
terms and conditions set forth herein, Tenneco shall take, or cause to be taken,
the following acts or actions in connection with, and to otherwise effect in
accordance with the terms of this Agreement, the Distribution.

(a) DECLARATION OF DISTRIBUTION AND ESTABLISHMENT OF DISTRIBUTION
DATE. The Board of Directors of Tenneco shall, in its sole discretion and
subject to and in accordance with this Agreement, the applicable rules of
the NYSE and provisions of the DGCL, declare the Distribution and establish
the Distribution Record Date, the Distribution Date, the date on which
Packaging Common Stock shall be mailed to the Tenneco Holders and all
appropriate procedures in connection with the Distribution to the extent
not provided for herein; provided, however, that no such action shall
create any obligation on the part of Tenneco to effect the Distribution or
in any way limit Tenneco's power of termination as set forth in Section
8.11 hereof or alter the consequences of any such termination from those
specified in such Section.

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(b) NOTICE TO NYSE. Tenneco shall, to the extent possible, give the
NYSE not less than ten days advance notice of the Distribution Record Date
in compliance with Rule 10b-17 under the Exchange Act.

(c) MAILING OF PACKAGING INFORMATION STATEMENT. Tenneco shall, as soon
as practicable after the Packaging Registration Statement shall have been
declared effective under the Exchange Act, cause the Packaging Information
Statement to be mailed to the holders of Tenneco Common Stock.

SECTION 3.02. THE DISTRIBUTION.

(a) DUTIES AND OBLIGATIONS OF TENNECO. Subject to the conditions
contained herein, on the Distribution Date but effective immediately
following the close of business on the Distribution Date Tenneco shall:

(i) deliver to the Agent the share certificates representing the
Packaging Common Stock issued to Tenneco by Packaging, pursuant to
Section 2.02 hereof, endorsed by Tenneco in blank, for the benefit of
the Tenneco Holders; and

(ii) instruct the Agent to distribute, as soon as practicable
following consummation of the Distribution, to the Tenneco Holders one
share of Packaging Common Stock for every one share of Tenneco Common
Stock held by such Tenneco Holders as of the Distribution Record Date.

(b) DUTIES AND RESPONSIBILITIES OF PACKAGING. Packaging shall provide,
or cause to be provided, to the Agent sufficient certificates representing
Packaging Common Stock, in such denominations as the Agent may request in
order to effect the Distribution. All shares of Packaging Common Stock
issued in connection with the Distribution will be validly issued, fully
paid and nonassessable and free of any preemptive (or similar) rights.

ARTICLE IV

CONDITIONS TO THE DISTRIBUTION

SECTION 4.01. CONDITIONS PRECEDENT TO THE DISTRIBUTION. The obligation of
Tenneco to cause the Distribution to be consummated shall be subject, at the
option of Tenneco, to the fulfillment or waiver, on or prior to the Termination
Date, of each of the following conditions.

(a) ANCILLARY AGREEMENTS. Each of the parties to each Ancillary
Agreement shall have executed and delivered such Ancillary Agreement and
all Ancillary Agreements shall be in full force and effect.

(b) REGISTRATION STATEMENT. The Packaging Registration Statement shall
have been declared effective by order of the Commission and no stop order
shall have been entered, and no proceeding for that purpose shall have been
initiated or threatened by the Commission with respect thereto.

(c) NYSE LISTING. The Packaging Common Stock shall have been approved
for listing on the NYSE, subject to official notice of issuance.

(d) TAX RULING. Tenneco shall have received rulings from the Internal
Revenue Service reasonably acceptable to Tenneco and Packaging, which
rulings shall be in full force and effect as of the Distribution Date, to
the effect that:

(i) the Distribution as contemplated hereunder will be tax-free for
federal income tax purposes to Tenneco under Section 355(c)(1) of the
Code and to the stockholders of Tenneco under Section 355(a) of the
Code;

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(ii) the merger, pursuant to a plan of complete liquidation, of
Tenneco Packaging Specialty and Consumer Products Inc. with and into
Packaging will be tax-free for federal income tax purposes to Packaging
and Tenneco Packaging Specialty and Consumer Products Inc. under
Sections 332 and 337 of the Code, respectively;

(iii) the transfers of property by Tenneco to Packaging and the
entity now known as Tenneco Automotive Inc. will be tax-free for federal
income tax purposes under Sections 361(a) and 351(a), respectively; and

(iv) the foregoing transactions will have no adverse effect on the
Prior Rulings.

(e) PRE-DISTRIBUTION TRANSACTIONS. Each of the transactions and other
matters contemplated by Article II and Section 3.01 hereof (including,
without limitation, each of the distributions, transfers, conveyances,
contributions, assignments or other transactions included in, or otherwise
necessary to consummate, the Corporate Restructuring Transactions) and the
Debt Realignment shall have been fully effected, consummated and
accomplished.

(f) COVENANTS. The covenants contained in Article V of this Agreement
that are required to be performed on or before the Distribution Date shall
have been fully performed.

(g) NO PROHIBITIONS. Consummation of the transactions contemplated
hereby shall not be prohibited by Law and no Governmental Authority of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction
or other order (whether temporary, preliminary or permanent) which is in
effect and which materially restricts, prevents or prohibits consummation
of the Distribution, or any transaction contemplated by this Agreement, it
being understood that the parties hereto hereby agree to use their
reasonable best efforts to cause any such decree, judgment, injunction or
other order to be vacated or lifted as promptly as possible.

(h) CONSENTS. Tenneco and Packaging and the other members of their
respective Groups shall have obtained all Consents the failure of which to
obtain would, in the determination of the Board of Directors of Tenneco,
have a material adverse effect on the Automotive Group or the Packaging
Group, each taken as a whole, and such Consents shall be in full force and
effect.

SECTION 4.02. NO CONSTRAINT. Notwithstanding the provisions of Section 4.01
above, the fulfillment or waiver of any or all of the conditions precedent to
the Distribution set forth therein shall not:

(i) create any obligation on the part of Tenneco or any other party
hereto to effect the Distribution;

(ii) in any way limit Tenneco's right and power under Section 8.11
to terminate this Agreement and the process leading to the Distribution
and to abandon the Distribution; or

(iii) alter the consequences of any such termination under Section
8.11 from those specified in such Section.

SECTION 4.03. DEFERRAL OF DISTRIBUTION DATE. If the Distribution Date shall
have been established by the Board of Directors of Tenneco but all the
conditions precedent to the Distribution set forth in this Agreement have not
theretofore been fulfilled or waived, or Tenneco does not reasonably anticipate
that they will be fulfilled or waived, on or prior to the date established as
the Distribution Date, Tenneco may, by resolution of its Board of Directors (or
a committee thereof, so authorized), defer the Distribution Date to a later date
or terminate this Agreement under Section 8.11.

SECTION 4.04. PUBLIC NOTICE OF DEFERRED DISTRIBUTION DATE. If the Board of
Directors (or a committee thereof, so authorized) of Tenneco shall defer the
Distribution Date in accordance with Section 4.03 above and public announcement
of the prior Distribution Date has

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theretofore been made, Tenneco shall promptly thereafter issue, in accordance
with the advice of legal counsel, a public announcement with respect to such
deferment and shall, with the advice of legal counsel, take such other actions
as may be deemed necessary or desirable with respect to the dissemination of
such information.

ARTICLE V

COVENANTS

SECTION 5.01. FURTHER ASSURANCES. Each of Tenneco and Packaging shall use
all reasonable efforts to:

(a) take or cause to be taken all actions, and to do or cause to be
done all things reasonably necessary, proper or advisable under applicable
Law and agreements or otherwise to consummate and make effective the
transactions contemplated hereby, including without limitation using
commercially reasonable efforts to obtain any, consents and approvals from,
enter into any amendatory agreements with and make any applications,
registrations or filings with, any third Person or any Governmental
Authority necessary or desirable in order to consummate the transactions
contemplated hereby or to carry out the purposes of this Agreement; and

(b) execute and deliver such further instruments and documents and
take such other actions as the other party may reasonably request in order
to consummate the transactions contemplated hereby and effectuate the
purposes of this Agreement.

SECTION 5.02. TENNECO NAME. As part of the Corporate Restructuring
Transactions the Tenneco Trademarks and Trade Names will be assigned to a member
of the Automotive Group designated by Tenneco. Tenneco shall grant to Packaging
and to each of the members of the Packaging Group a transition license,
substantially in the form of Exhibit K hereto (the "TRADEMARK TRANSITION
LICENSE"), to use certain Tenneco Trademarks and Trade Names.

SECTION 5.03. SUPPLIES AND DOCUMENTS. Tenneco shall, pursuant to the terms
of the Trademark Transition License, grant a license (on a nonexclusive basis)
to Packaging and to each of the members of the Packaging Group to use existing
supplies and documents which have imprinted thereon any of the Tenneco
Trademarks and Trade Names to the extent that such supplies and documents were
existing in the inventory of such member of the Packaging Group as of the
Distribution Date.

SECTION 5.04. ASSUMPTION AND SATISFACTION OF LIABILITIES. Except as
otherwise specifically set forth in any Ancillary Agreement, from and after the
Distribution Date:

(a) Tenneco shall, and shall cause each of the other members of the
Automotive Group over which it has legal or effective direct or indirect
control to, assume, pay, perform and discharge all Automotive Liabilities
in accordance with their terms, when determinable, and otherwise as
determined in accordance with the practice of the parties prior to the
Distribution;

(b) Packaging shall, and shall cause each of the other members of the
Packaging Group over which it has legal or effective direct or indirect
control to, assume, pay, perform and discharge all Packaging Liabilities in
accordance with their terms, when determinable, and otherwise as determined
in accordance with the practice of the parties prior to the Distribution;
and

(c) Tenneco and Packaging each severally and not jointly covenant and
agree to assume, pay, and discharge one half of the amount of any and all
Transaction Liabilities.

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SECTION 5.05. NO REPRESENTATIONS OR WARRANTIES; CONSENTS.

(a) GENERAL. Each of the parties hereto understands and agrees that no
party hereto is, in this Agreement or in any other agreement or document
contemplated by this Agreement (including the Ancillary Agreements) or
otherwise, making to any other party hereto any representation or warranty
whatsoever, including without limitation, any representation or warranty:

(i) as to the value or freedom from encumbrance of, or any other
matter concerning, any assets of such party; or

(ii) as to the legal sufficiency to convey title to any asset as of
the execution, delivery and filing of this Agreement or any Ancillary
Agreement, including, without limitation, any Conveyancing and
Assumption Instrument.

(b) DISCLAIMER OF MERCHANTABILITY OR FITNESS OF ASSETS. Each party
hereto further understands and agrees that there are no warranties, express
or implied, as to the merchantability or fitness of any of the assets
either transferred to or retained by the Automotive Group or the Packaging
Group, as the case may be, pursuant to the Corporate Restructuring
Transactions and the other terms and provisions of this Agreement, any
Conveyancing and Assumption Agreement or any Ancillary Agreement, and all
such assets which are so transferred will be transferred on an "AS IS,
WHERE IS" basis, and the party to which any such assets are transferred
hereunder, or which retains assets hereunder, shall bear the economic and
legal risk that any conveyances of such assets shall prove to be
insufficient or that the title of such party or any other member of its
respective Group to any such assets shall be other than good and marketable
and free from encumbrances.

(c) NO REPRESENTATIONS OR WARRANTIES REGARDING CONSENTS. Each of the
parties hereto understands and agrees that no party hereto is, in this
Agreement or any Ancillary Agreement or in any other agreement or document
contemplated by this Agreement or any Ancillary Agreement or otherwise,
representing or warranting in any way to any other party hereto that the
obtaining of any consents or approvals, the execution and delivery of any
amendatory agreements and the making of any filings or applications
contemplated by this Agreement will satisfy the provisions of any or all
applicable agreements or the requirements of any or all applicable Law.
Each of the parties hereto further agrees and understands that the party to
which any assets to be or are transferred as contemplated by the Corporate
Restructuring Transactions or the other provisions of this Agreement shall
bear the economic and legal risk that any necessary consents or approvals
are not obtained, that any necessary amendatory agreements are not executed
and delivered or that any requirements of Laws are not complied with.

(d) COVENANT TO USE REASONABLE EFFORTS TO OBTAIN
CONSENTS. Notwithstanding the provisions of Section 5.05(c) above, each of
the parties hereto shall (and shall cause each of their respective
Affiliates and each member of its respective Group over which it has direct
or indirect legal or effective control to) use commercially reasonable
efforts to obtain all consents and approvals (the "CONSENTS"), to enter
into all amendatory agreements and to make all filings and applications
which may be reasonably required for the consummation of the Corporate
Restructuring Transactions, the Distribution and all other transactions
contemplated by this Agreement and shall take all such further reasonable
actions as shall be reasonably necessary to preserve for each of the
Automotive Group and the Packaging Group, to the greatest extent feasible,
the economic and operational benefits of the allocation of assets and
Liabilities contemplated by this Agreement. In case at any time after the
Distribution Date any further action is necessary or desirable to carry out
the purposes of this Agreement, the proper officers and directors of each
party to this Agreement, or their successors in interest, shall take all
such necessary or desirable action.

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SECTION 5.06. REMOVAL OF CERTAIN GUARANTEES.

(a) REMOVAL OF TENNECO AS GUARANTOR OF PACKAGING LIABILITIES. Except
as otherwise contemplated in the Corporate Restructuring Transactions or
otherwise specified in any Ancillary Agreement, each of Tenneco and
Packaging shall use its commercially reasonable efforts to have, on or
prior to the Distribution Date, or as soon as practicable thereafter,
Tenneco and any other member of the Automotive Group removed as a guarantor
of, or obligor under or for, any Packaging Liability.

(b) REMOVAL OF PACKAGING AS GUARANTOR OF AUTOMOTIVE LIABILITIES.
Except as otherwise contemplated in the Corporate Restructuring
Transactions or otherwise specified in any Ancillary Agreement, each of
Tenneco and Packaging shall use its commercially reasonable efforts to
have, on or prior to the Distribution Date, or as soon as practicable
thereafter, Packaging and any other member of the Packaging Group removed
as a guarantor of, or obligor under or for, any Automotive Liability.

SECTION 5.07. PUBLIC ANNOUNCEMENTS. Each party hereto shall consult with
each other before issuing any press release or otherwise issuing any other
similar written public statement with respect to this Agreement or the
Distribution and shall not issue any such press release or make any such public
statement without the prior consent of each other party, which shall not be
unreasonably withheld or delayed; provided, however, that a party may, without
the prior consent of any other party, issue such press release or other similar
written public statement as may be required by law or any listing agreement with
a national securities exchange to which any party hereto (or any member of such
party's Group) is a party if it has used all reasonable efforts to consult with
such other party and to obtain such party's consent but has been unable to do so
in a timely manner.

SECTION 5.08. INTERCOMPANY AGREEMENTS. Effective as of the consummation of
the Distribution, each of Packaging and Tenneco shall (and shall cause each
other member of its respective Group over which it has legal or effective direct
or indirect control to) terminate each and every agreement between it and any
member of the other Group other than this Agreement, any of the Ancillary
Agreements, and any agreements between third Persons who are not members of
either Group, on the one hand, and members of both Groups, on the other hand;
provided, however, that such termination shall not have any effect whatsoever on
any of its rights or obligations that accrued or were incurred prior to the
Distribution Date (subject to the terms of Section 2.12 above).

SECTION 5.09. TAX MATTERS. Each of Tenneco and Packaging intend the
Distribution to be treated as a tax-free distribution under Code Sections 355(a)
and 361(c)(1) and each such party shall use its reasonable best efforts to cause
the Distribution to so qualify. Neither Tenneco, on the one hand, nor Packaging,
on the other hand, shall take, or permit any member of its Group over which it
has legal or effective direct or indirect control to take, any action which
might cause:

(i) the Distribution to fail to qualify as a tax-free distribution
under Code Section 355(a) or Code Section 361(c)(1);

(ii) the merger, pursuant to a plan of complete liquidation, of
Tenneco Packaging Specialty and Consumer Products Inc. with and into
Packaging to not be tax-free for federal income tax purposes to Packaging
and Tenneco Packaging Specialty and Consumer Products Inc. under Sections
332 and 337 of the Code, respectively;

(iii) the transfers of property by Tenneco to Packaging and the entity
now known as Tenneco Automotive Inc. to not be tax-free for federal income
tax purposes under Sections 361(a) and 351(a), respectively;

(iv) the foregoing transactions to have an adverse effect on the Prior
Rulings; or

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(v) any other transfer described in the Corporate Restructuring
Transactions that is intended (as described in Tenneco's request for
rulings from the Internal Revenue Service) to qualify as a tax-free
transfer under Code Sections 332, 351, 355 or 368 to fail to so qualify.

SECTION 5.10. 1996 AGREEMENTS.

(a) ALLOCATION OF BENEFITS AND LIABILITIES. Except as expressly
provided otherwise in an Ancillary Agreement, Tenneco and Packaging each
shall use its commercially reasonable efforts to allocate and provide to
the other party to the greatest extent feasible the economic and
operational benefits and liabilities of the 1996 Distribution Agreement and
the 1996 Debt and Cash Allocation Agreement, which allocation shall be
based on the nature of the underlying asset or liability giving rise to the
allocated benefit or liability. To the extent such benefit or liability is
derived from or relates to an Automotive Asset, an Automotive Liability,
the Automotive Business, or the Prior Automotive Business, it shall be
allocated to Tenneco. To the extent such benefit or liability is derived or
related to a Packaging Asset, a Packaging Liability, the Packaging
Business, or the Prior Packaging Business, it shall be allocated to
Packaging.

(b) ASSIGNMENT OF CERTAIN AGREEMENTS. Tenneco and Packaging each shall
use its commercially reasonable efforts to cause the Newport News License
and the El Paso License to be assigned to Tenneco.

ARTICLE VI

ACCESS TO INFORMATION

SECTION 6.01. PROVISION, TRANSFER AND DELIVERY OF APPLICABLE CORPORATE
RECORDS.

(a) PROVISION, TRANSFER AND DELIVERY OF PACKAGING RECORDS. Tenneco
shall (and shall cause each other member of its Group over which it has
legal or effective direct or indirect control to) arrange as soon as
practicable following the Distribution Date for the transportation (at
Packaging's cost) to Packaging of the Books and Records in its possession,
if any, that relate primarily to the Packaging Business or are necessary to
operate the Packaging Business (collectively, the "Packaging Records"),
except to the extent such items are already in the possession of any member
of the Packaging Group. The Packaging Records shall be available to Tenneco
for review and duplication, at its cost, pursuant to the terms of this
Agreement.

(b) PROVISION, TRANSFER AND DELIVERY OF AUTOMOTIVE RECORDS. Packaging
shall (and shall cause each other member of its Group over which it has
legal or effective direct or indirect control to) arrange as soon as
practicable following the Distribution Date for the transportation (at
Tenneco's cost) to Tenneco of the Books and Records in its possession, if
any, (i) that relate primarily to the Automotive Business or are necessary
to operate the Automotive Business (collectively, the "AUTOMOTIVE
RECORDS"), (ii) that relate to any Tenneco business other than the
Packaging Business, or (iii) that consist of the corporate minutes of the
Board of Directors (or committees thereof) of Tenneco or otherwise relate
to the business, administrative and management operations of Tenneco as the
parent holding company of the Automotive Business, Packaging Business and
all other Tenneco businesses or operations (collectively, the "TENNECO
CORPORATE RECORDS") except to the extent such items are already in the
possession of any member of the Automotive Group. The Automotive Records
and the Tenneco Corporate Records shall be the property of Tenneco, but
shall be available to Packaging for review and duplication, at its cost,
pursuant to the terms of this Agreement.

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SECTION 6.02. ACCESS TO INFORMATION. Unless otherwise contemplated by
Section 6.06, from and after the Distribution Date, each of Tenneco and
Packaging shall (and shall cause each of the other members of its respective
Group over which it has legal or effective direct or indirect control to) afford
to each other party and its authorized accountants, counsel and other designated
representatives reasonable access and duplicating rights (all such duplicating
costs to be borne by the requesting party) during normal business hours, subject
to appropriate restrictions for classified, privileged or confidential
information, to the personnel, properties, Books and Records and other data and
information of such party and each other member of such party's Group relating
to operations prior to the Distribution insofar as such access is reasonably
required by the other requesting party for the conduct of the requesting party's
business (but not for competitive purposes).

SECTION 6.03. REIMBURSEMENTS, OTHER MATTERS. Except to the extent otherwise
contemplated hereby or by any Ancillary Agreement, a party providing Books and
Records or access to information to any other party (or such party's
representatives) under this Article VI shall be entitled to receive from such
other party, upon the presentation of invoices therefor, payments for such
amounts, relating to supplies, disbursements and other out-of-pocket expenses,
as may be reasonably incurred in providing such Books and Records or access to
information.

SECTION 6.04. CONFIDENTIALITY.

(a) GENERAL RESTRICTION ON DISCLOSURE. Each of Tenneco and Packaging
shall not (and shall not permit any other member of its respective Group
over which it has legal or effective direct or indirect control to) use or
permit the use of (without the prior written consent of the other) and
shall hold, and shall cause its consultants, advisors and other
representatives and any other member of its respective Group (over which it
has legal or effective direct or indirect control) to hold, in strict
confidence, all information concerning each other party hereto and the
other members of such other party's Group in its possession, custody or
control to the extent such information either

(i) relates to the period up to the Distribution Date,

(ii) relates to any Ancillary Agreement, or

(iii) is obtained in the course of performing services for the
other party pursuant to any Ancillary Agreement, and each party hereto
shall not (and shall cause each other member of its respective Group
over which it has legal or effective direct or indirect control not to)
otherwise release or disclose such information to any other Person,
except its auditors, attorneys, financial advisors, bankers and other
consultants and advisors, without the prior written consent of the other
affected party or parties, unless compelled to disclose such information
by judicial or administrative process or unless such disclosure is
required by Law and such party has used commercially reasonable efforts
to consult with the other affected party or parties prior to such
disclosure.

(b) COMPELLED DISCLOSURE. To the extent that a party hereto or a
member of its Group over which it has legal or effective direct or indirect
control is compelled by judicial or administrative process to disclose such
information under circumstances in which any evidentiary privilege would be
available, such party agrees to assert or cause to be asserted such
privilege in good faith prior to making such disclosure. Each of the
parties shall consult with each relevant other party in connection with any
such judicial or administrative process, including without limitation, in
determining whether any privilege is available, and shall not object to
each such relevant party and its counsel participating in any hearing or
other proceeding (including, without limitation, any appeal of an initial
order to disclose) in respect of such disclosure and assertion of
privilege.

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(c) EXCEPTIONS TO CONFIDENTIAL TREATMENT. Anything herein to the
contrary notwithstanding, no party hereto shall be prohibited from using or
permitting the use of, or required to hold in confidence, any information
to the extent that (i) such information has been or is in the public domain
through no fault of such party, (ii) such information is, after the
Distribution Date, lawfully acquired from other sources by such party, or
(iii) this Agreement, any Ancillary Agreement or any other agreement
entered into pursuant hereto permits the use or disclosure of such
information by such party.

SECTION 6.05. WITNESS SERVICES. At all times from and after the
Distribution Date, each of Tenneco and Packaging shall use its reasonable
efforts to make available to each other party hereto, upon reasonable written
request, the officers, directors, employees and agents of each member of its
respective Group for fact finding, consultation or interviews and as witnesses
to the extent that:

(a) such persons may reasonably be required in connection with the
prosecution or defense of any Action in which the requesting party or any
member of its respective Group may from time to time be involved; and

(b) there is no conflict in the Action between the requesting party or
any member of its respective Group and the party to which a request is made
pursuant to this Section 6.05 or any member of such party's Group.

Except as otherwise agreed by the parties, a party providing witness
services to any other party under this Section shall be entitled to receive
from the recipient of such services, upon the presentation of invoices
therefor, payments for such amounts relating to supplies, disbursements and
other out-of-pocket expenses (but not salary expenses) of employees who
participate in fact finding, consultation or interviews or are witnesses,
as are actually and reasonably incurred in providing such fact finding,
consulting, interviews or witness services by the party providing such
services.

SECTION 6.06. RETENTION OF RECORDS. Except when a longer period is required
by Law or is specifically provided for herein or in any Ancillary Agreement,
each party hereto shall cause the members of its Group over which it has legal
or effective direct or indirect control, to retain, for a period of at least
seven years following the Distribution Date, all material information (including
without limitation all material Books and Records) relating to such Group and
its operations prior to the Distribution Date. Notwithstanding the foregoing,
any party hereto may offer in writing to deliver to the other parties all or a
portion of such information as it relates to members of the offering party's
Group and, if such offer is accepted in writing within 90 days after receipt
thereof, the offering party shall promptly arrange for the delivery of such
information (or copies thereof) to each accepting party (at the expense of such
accepting party). If such offer is not so accepted, except as required by Law
the offered information may be destroyed or otherwise disposed of by the
offering party at any time thereafter.

SECTION 6.07. PRIVILEGED MATTERS.

(a) PRIVILEGED INFORMATION. Each of the parties hereto shall, and
shall cause the members of its Group over which it has legal or effective
direct or indirect control to, use its reasonable efforts to maintain,
preserve, protect and assert all privileges including, without limitation,
all privileges arising under or relating to the attorney-client
relationship (including without limitation the attorney-client and attorney
work product privileges) that relate directly or indirectly to any member
of any other Group for any period prior to the Distribution Date
("PRIVILEGE" or "PRIVILEGES"). Each of the parties hereto shall use its
reasonable efforts not to waive, or permit any member of its Group over
which it has legal or effective direct or indirect control to waive, any
such Privilege that could be asserted under applicable Law without the
prior written consent of the other parties. With respect to each party, the
rights and obligations created by this Section 6.07 shall apply to all
information as to which a member of any Group did assert or, but for the
Distribution,

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would have been entitled to assert the protection of a Privilege
("PRIVILEGED INFORMATION") including, but not limited to, any and all
information that either:

(i) was generated or received prior to the Distribution Date but
which, after the Distribution, is in the possession of a member of
another Group; or

(ii) is generated or received after the Distribution Date but
refers to or relates to Privileged Information that was generated or
received prior to the Distribution Date.

(b) PRODUCTION OF PRIVILEGED INFORMATION. Upon receipt by a party or
any member of its Group of any subpoena, discovery or other request that
arguably calls for the production or disclosure of Privileged Information,
or if a party or any member of its Group obtains knowledge that any current
or former employee of such party or any member of its Group has received
any subpoena, discovery or other request which arguably calls for the
production or disclosure of Privileged Information, such party shall
promptly notify the other parties of the existence of the request and shall
provide the other parties a reasonable opportunity to review the
information and to assert any rights it may have under this Section 6.07 or
otherwise to prevent the production or disclosure of Privileged
Information. No party will, or will permit any member of its Group over
which it has direct or indirect legal or effective control to, produce or
disclose any information arguably covered by a Privilege under this Section
6.07 unless:

(i) each other party has provided its express written consent to
such production or disclosure; or

(ii) a court of competent jurisdiction has entered an order which
is not then appealable or a final, nonappealable order finding that the
information is not entitled to protection under any applicable
privilege.

(c) NO WAIVER. The parties hereto understand and agree that the
transfer of any Books and Records or other information between any members
of the Automotive Group or the Packaging Group shall be made in reliance on
the agreements of Tenneco and Packaging, as set forth in Section 6.04 and
Section 6.07 hereof, to maintain the confidentiality of Privileged
Information and to assert and maintain all applicable Privileges. The Books
and Records being transferred pursuant to Section 6.01 hereof, the access
to information being granted pursuant to Section 6.02 hereof, the agreement
to provide witnesses and individuals pursuant to Section 6.05 hereof and
the transfer of Privileged Information to either party pursuant to this
Agreement shall not be deemed a waiver of any Privilege that has been or
may be asserted under this Section or otherwise.

ARTICLE VII

INDEMNIFICATION

SECTION 7.01. INDEMNIFICATION BY TENNECO. Except as otherwise specifically
set forth in any provision of this Agreement or of any Ancillary Agreement,
Tenneco shall, to the fullest extent permitted by law, indemnify, defend and
hold harmless the Packaging Indemnitees from and against any and all
Indemnifiable Losses of the Packaging Indemnitees arising out of, by reason of
or otherwise in connection with (i) the Automotive Liabilities, (ii) to the
extent Tenneco has not discharged its obligations under Section 5.04(c) above,
Tenneco's share of any Transaction Liability, or (iii) the breach by Tenneco or
any Automotive Subsidiary of any provision of this Agreement or any Ancillary
Agreement.

SECTION 7.02. INDEMNIFICATION BY PACKAGING. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, Packaging shall, to the fullest extent permitted by law, indemnify,
defend and hold harmless the Automotive Indemnitees from and against any and all
Indemnifiable Losses of the Automotive Indemnitees arising out of, by reason of
or otherwise in

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connection with either (i) the Packaging Liabilities, (ii) to the extent
Packaging has not discharged its obligations under Section 5.04(c) above,
Packaging's share of any Transaction Liability, or (iii) the breach by Packaging
or any Packaging Subsidiary of any provision of this Agreement or any Ancillary
Agreement.

SECTION 7.03. NO INDEMNIFICATION IN RESPECT OF INDEMNITEE'S INVESTMENT.
Notwithstanding anything to the contrary contained herein, Tenneco shall not be
obligated to indemnify, defend and hold harmless the Packaging Indemnitees from
and against, and Packaging shall not be obligated to indemnify, defend and hold
harmless the Automotive Indemnitees from and against, any Indemnifiable Losses
to the extent such Indemnifiable Losses arise out of, by reason of or otherwise
in connection with (i) the direct or indirect ownership, from and after the
Distribution Date, of any equity or other investment interest by such Indemnitee
in a member of the Indemnifying Party's Group or (ii) any direct or indirect
contractual or similar arrangement arising in the ordinary course of business
between a member of the Automotive Group and a member of the Packaging Group,
except as otherwise contemplated by the terms of such arrangement.

SECTION 7.04. LIMITATIONS ON INDEMNIFICATION OBLIGATIONS.

(a) REDUCTIONS FOR INSURANCE PROCEEDS AND OTHER RECOVERIES. The amount
that any party (an "INDEMNIFYING PARTY") is or may be required to pay to
any other Person (an "INDEMNITEE") pursuant to Section 7.01 or Section 7.02
above, as applicable, shall be reduced (retroactively or prospectively) by
any Insurance Proceeds or other amounts actually recovered from third
parties by or on behalf of such Indemnitee in respect of the related
Indemnifiable Losses. The existence of a claim by an Indemnitee for
insurance or against a third party in respect of any Indemnifiable Loss
shall not, however, delay any payment pursuant to the indemnification
provisions contained herein and otherwise determined to be due and owing by
an Indemnifying Party. Rather, the Indemnifying Party shall make payment in
full of such amount so determined to be due and owing by it against an
assignment by the Indemnitee to the Indemnifying Party of the entire claim
of the Indemnitee for such insurance or against such third party.
Notwithstanding any other provisions of this Agreement, it is the intention
of the parties hereto that no insurer or any other third party shall be (i)
entitled to a benefit it would not be entitled to receive in the absence of
the foregoing indemnification provisions, (ii) relieved of the
responsibility to pay any claims for which it is obligated or (iii)
entitled to any subrogation rights with respect to any obligation
hereunder. If an Indemnitee shall have received the payment required by
this Agreement from an Indemnifying Party in respect of any Indemnifiable
Losses and shall subsequently actually receive Insurance Proceeds or other
amounts in respect of such Indemnifiable Losses, then such Indemnitee shall
hold such Insurance Proceeds in trust for the benefit of such Indemnifying
Party and shall pay to such Indemnifying Party a sum equal to the amount of
such Insurance Proceeds or other amounts actually received, up to the
aggregate amount of any payments received from such Indemnifying Party
pursuant to this Agreement in respect of such Indemnifiable Losses.

(b) FOREIGN CURRENCY ADJUSTMENTS. In the event that any
indemnification payment required to be made hereunder or under any
Ancillary Agreement shall be denominated in a currency other than U.S.
Dollars, the amount of such payment shall be translated into U.S. Dollars
using the foreign exchange rate for such currency determined in accordance
with the following rules:

(i) with respect to any Indemnifiable Losses arising from the
payment by a financial institution under a guarantee, comfort letter,
letter of credit, foreign exchange contract or similar instrument, the
foreign exchange rate for such currency shall be determined as of the
date on which such financial institution shall have been reimbursed;

(ii) with respect to any Indemnifiable Losses covered by insurance,
the foreign exchange rate for such currency shall be the foreign
exchange rate employed by the insurance company providing such insurance
in settling such Indemnifiable Losses with the Indemnifying Party; and

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(iii) with respect to any Indemnifiable Losses not covered by
either clause (i) or (ii) above, the foreign exchange rate for such
currency shall be determined as of the date that notice of the claim
with respect to such Indemnifiable Losses shall be given to the
Indemnitee.

SECTION 7.05. PROCEDURES FOR INDEMNIFICATION. Except as otherwise
specifically provided in any Ancillary Agreement, including, without limitation,
the Tax Sharing Agreement and the Human Resources Agreement:

(a) NOTICE OF THIRD PARTY CLAIMS. If a claim or demand is made against
an Indemnitee by any Person who is not a member of the Automotive Group or
the Packaging Group (a "THIRD PARTY CLAIM") as to which such Indemnitee is
entitled to indemnification pursuant to this Agreement, such Indemnitee
shall notify the Indemnifying Party in writing, and in reasonable detail,
of the Third Party Claim promptly (and in any event within 30 business
days) after receipt by such Indemnitee of written notice of the Third Party
Claim, provided, however, that failure to give such notification shall not
affect the Indemnitee's right to indemnification hereunder except to the
extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure (except that the Indemnifying Party shall not be
liable for any expenses incurred during the period in which the Indemnitee
failed to give such notice). The Indemnifying Party shall have 30 days from
personal delivery or mailing of such written notice to notify the
Indemnitee (i) whether or not the Indemnifying Party disputes the liability
of the Indemnifying Party to the Indemnitee with respect to such claim or
demand and (ii) whether or not it assumes the defense of such claim or
demand. Thereafter, the Indemnitee shall deliver to the Indemnifying Party,
promptly (and in any event within 15 business days) after the Indemnitee's
receipt thereof, copies of all notices and documents (including court
papers) received by the Indemnitee relating to the Third Party Claim.

(b) LEGAL DEFENSE OF THIRD PARTY CLAIMS. If a Third Party Claim is
made against an Indemnitee, the Indemnifying Party shall be entitled to
participate in the defense thereof and, if it so chooses, to assume the
defense thereof with counsel selected by the Indemnifying Party, which
counsel shall be reasonably satisfactory to the Indemnitee. Should the
Indemnifying Party so elect to assume the defense of a Third Party Claim,
the Indemnifying Party shall not be liable to the Indemnitee for legal or
other expenses subsequently incurred by the Indemnitee in connection with
the defense thereof. If the Indemnifying Party assumes such defense the
Indemnitee shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed
by the Indemnifying Party, it being understood that the Indemnifying Party
shall control such defense. The Indemnifying Party shall be liable for the
reasonable fees and expenses of counsel employed by the Indemnitee for any
period during which the Indemnifying Party has failed to assume the defense
of the Third Party Claim (other than during the period prior to the time
the Indemnitee shall have given notice of the Third Party Claim as provided
above). If the Indemnifying Party so elects to assume the defense of any
Third Party Claim, all of the Indemnitees shall cooperate with the
Indemnifying Party in the defense or prosecution thereof. Notwithstanding
the foregoing:

(i) the Indemnifying Party shall not be entitled to assume the
defense of any Third Party Claim (and shall be liable to the Indemnitee
for the reasonable fees and expenses of counsel incurred by the
Indemnitee in defending such Third Party Claim) if the Third Party Claim
either seeks an order, injunction or other equitable relief or relief
for other than money damages against the Indemnitee which the Indemnitee
reasonably determines, after conferring with its counsel, cannot be
separated from any related claim for money damages; provided, however,
that if such equitable relief or other relief portion of the Third Party
Claim can be so separated from that for money damages, the Indemnifying
Party shall be entitled to assume the defense of the portion relating to
money damages;

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(ii) an Indemnifying Party shall not be entitled to assume the
defense of any Third Party Claim (and shall be liable for the reasonable
fees and expenses of counsel incurred by the Indemnitee in defending
such Third Party Claim) if, in the Indemnitee's reasonable judgment, a
conflict of interest between such Indemnitee and such Indemnifying Party
exists in respect of such Third Party Claim or if the claim for
indemnification relates to a matter that, if determined adversely, could
reasonably be expected to expose the Indemnitee to criminal prosecution
or penalties; and

(iii) if at any time after assuming the defense of a Third Party
Claim an Indemnifying Party shall fail to prosecute or withdraw from the
defense of such Third Party Claim, the Indemnitee shall be entitled to
resume the defense thereof and the Indemnifying Party shall be liable
for the reasonable fees and expenses of counsel incurred by the
Indemnitee in such defense.

(c) SETTLEMENT OF THIRD PARTY CLAIMS. Except as otherwise provided
below in this Section 7.05(c), or as otherwise specifically provided in any
Ancillary Agreement, if the Indemnifying Party has assumed the defense of
any Third Party Claim, then:

(i) in no event will the Indemnitee admit any liability with
respect to, or settle, compromise or discharge, any Third Party Claim
without the Indemnifying Party's prior written consent (which consent
shall not be unreasonably withheld or delayed); provided, however, that
the Indemnitee shall have the right to settle, compromise or discharge
such Third Party Claim without the consent of the Indemnifying Party if
the Indemnitee releases the Indemnifying Party from its indemnification
obligation hereunder with respect to such Third Party Claim and such
settlement, compromise or discharge would not otherwise adversely affect
the Indemnifying Party, and

(ii) the Indemnitee will agree to any settlement, compromise or
discharge of a Third Party Claim that the Indemnifying Party may
recommend and that by its terms obligates the Indemnifying Party to pay
the full amount of the liability in connection with such Third Party
Claim and releases the Indemnitee completely in connection with such
Third Party Claim and that would not otherwise adversely affect the
Indemnitee;

provided, however, that the Indemnitee may refuse to agree to any such
settlement, compromise or discharge if the Indemnitee agrees that the
Indemnifying Party's indemnification obligation with respect to such Third
Party Claim shall not exceed the amount that would be required to be paid
by or on behalf of the Indemnifying Party in connection with such
settlement, compromise or discharge. If the Indemnifying Party has not
assumed the defense of a Third Party Claim then in no event shall the
Indemnitee settle, compromise or discharge such Third Party Claim without
providing prior written notice to the Indemnifying Party, which shall have
the option within 15 business days following receipt of such notice to

(i) approve and agree to pay the settlement,

(ii) approve the amount of the settlement, reserving the right to
contest the Indemnitee's right to indemnity pursuant to this Agreement,

(iii) disapprove the settlement and assume in writing all past and
future responsibility for such Third Party Claim (including all of
Indemnitee's prior expenditures in connection therewith), or

(iv) disapprove the settlement and continue to refrain from
participation in the defense of such Third Party Claim, in which event
the Indemnifying Party shall have no further right to

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contest the amount or reasonableness of the settlement if the Indemnitee
elects to proceed therewith.

In the event the Indemnifying Party does not respond to such written notice
from the Indemnitee within such 15 business-day period, the Indemnifying
Party shall be deemed to have elected option (i) above.

(d) OTHER CLAIMS. Any claim on account of an Indemnifiable Loss which
does not result from a Third Party Claim shall be asserted by written
notice given by the Indemnitee to the applicable Indemnifying Party. Such
Indemnifying Party shall have a period of 30 business days after the
receipt of such notice within which to respond thereto. If such
Indemnifying Party does not respond within such 30 business-day period,
such Indemnifying Party shall be deemed to have refused to accept
responsibility to make payment. If such Indemnifying Party does not respond
within such 30 business-day period or rejects such claim in whole or in
part, such Indemnitee shall be free to pursue such remedies as may be
available to such party under applicable Law or under this Agreement.

(e) EXISTING THIRD PARTY CLAIMS. Effective as of the Distribution
Date, Tenneco and Packaging shall each be deemed to have (i) received
notification of a claim for indemnification from the other party with
respect to the Third Party Claims allocated to it under the Litigation
Letter, and (ii) elected to assume the defense of the Third Party Claims
allocated to it under the Litigation Letter pursuant to Section 7.05(b).
Thereafter, the relationships of the parties with respect to such Third
Party Claims shall be governed by the provisions of Section 7.05.

SECTION 7.06. INDEMNIFICATION PAYMENTS. Indemnification required by this
Article VII shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when invoices or bills are
received or loss, liability, claim, damage or expense is incurred.

SECTION 7.07. OTHER ADJUSTMENTS.

(a) ADJUSTMENTS FOR TAXES. The amount of any Indemnifiable Loss shall
be:

(i) increased to take into account any net Tax cost actually
incurred by the Indemnitee arising from any payments received from the
Indemnifying Party (grossed up for such increase); and

(ii) reduced to take account of any net Tax benefit actually
realized by the Indemnitee arising from the incurrence or payment of any
such Indemnifiable Loss.

In computing the amount of such Tax cost or Tax benefit, the Indemnitee
shall be deemed to recognize all other items of income, gain, loss,
deduction or credit before recognizing any item arising from the receipt of
any payment with respect to an Indemnifiable Loss or the incurrence or
payment of any Indemnifiable Loss, and such Tax cost or Tax benefit shall
be determined on a stand-alone basis (based upon the operations of such
Indemnitee) after eliminating any effect resulting from the consolidation
or inclusion for Tax purposes of the operations of any affiliates,
companies, partnerships, or any other Person with the Indemnitee.

(b) REDUCTIONS FOR SUBSEQUENT RECOVERIES OR OTHER EVENTS. In addition
to any adjustments required pursuant to Section 7.04 hereof or Section
7.07(a) above, if the amount of any Indemnifiable Losses shall, at any time
subsequent to any indemnification payment made by the Indemnifying Party
pursuant to this Article VII, be reduced by recovery, settlement or
otherwise, the amount of such reduction, less any expenses incurred in
connection therewith, shall promptly be repaid by the Indemnitee to the
Indemnifying Party, up to the aggregate amount of any payments received
from such Indemnifying Party pursuant to this Agreement in respect of such
Indemnifiable Losses.

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SECTION 7.08. OBLIGATIONS ABSOLUTE. The foregoing contractual obligations
of indemnification set forth in this Article VII shall:

(i) also apply to any and all Third Party Claims that allege that any
Indemnitee is independently, directly, vicariously or jointly and severally
liable to such third party;

(ii) to the extent permitted by applicable law, apply even if the
Indemnitee is partially negligent or otherwise partially culpable or at
fault, whether or not such liability arises under any doctrine of strict
liability; and

(iii) be in addition to any liability or obligation that an
Indemnifying Party may have other than pursuant to this Agreement.

SECTION 7.09. SURVIVAL OF INDEMNITIES. The obligations of Tenneco and
Packaging under this Article VII shall survive the sale or other transfer by any
of them of any assets or businesses or the assignment by any of them of any
Liabilities, with respect to any Indemnifiable Loss of any Indemnitee related to
such assets, businesses or Liabilities.

SECTION 7.10. REMEDIES CUMULATIVE. The remedies provided in this Article
VII shall be cumulative and shall not preclude assertion by any Indemnitee of
any other rights or the seeking of any and all other remedies against any
Indemnifying Party.

SECTION 7.11. COOPERATION OF THE PARTIES WITH RESPECT TO ACTIONS AND THIRD
PARTY CLAIMS.

(a) IDENTIFICATION OF PARTY IN INTEREST. Any party to this Agreement
that has responsibility for an Action or Third Party Claim shall identify
itself as the true party in interest with respect to such Action or Third
Party Claim and shall use its commercially reasonable efforts to obtain the
dismissal of any other party to this Agreement from such Action or Third
Party Claim.

(b) DISPUTES REGARDING RESPONSIBILITY FOR ACTIONS AND THIRD PARTY
CLAIMS. If there is uncertainty or disagreement concerning which party to
this Agreement has responsibility for any Action or Third Party Claim
(including any Action or Third Party Claim with respect to any 1996
Agreement not otherwise provided for), the following procedure shall be
followed in an effort to reach agreement concerning responsibility for such
Action or Third Party Claim:

(i) In general, each party shall control the portion of such
dispute or controversy that directly and exclusively relates to a
liability or benefit borne by such party. To the extent any issue
involved in, or aspect of, such dispute or controversy does not directly
and exclusively relate to the liability or benefit of one party, Tenneco
and Packaging shall jointly control and otherwise handle such issue or
matter upon such terms as they may agree. The parties in disagreement
over the responsibility for an Action or Third Party Claim shall
exchange brief written statements setting forth their position
concerning which party has responsibility for the Action or Third Party
Claim in accordance with the provisions of this Article VII. These
statements shall be exchanged within 10 days of a party putting another
party on written notice that the other party is or may be responsible
for the Action or Third Party Claim.

(ii) If within 10 days of the exchange of the written statement of
each party's position agreement is not reached on responsibility for the
Action or Third Party Claim, the General Counsel for each of the parties
in disagreement over responsibility for the Action or Third Party Claim
shall speak either by telephone or in person to attempt to reach
agreement on responsibility for the Action or Third Party Claim.

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(c) EFFECT OF FAILURE TO FOLLOW PROCEDURE. Failure to follow the
procedure set forth in clause (b) above shall not affect the rights and
responsibilities of the parties as established by the other provisions of
this Article VII.

(d) EXCHANGE OF INFORMATION. In connection with the handling of
current or future Actions or Third Party Claims, the parties may determine
that it is in their mutual interest to exchange privileged or confidential
information. If so, the parties agree to discuss whether it is in their
mutual interest to enter into a joint defense agreement or information
exchange agreement to maintain the confidentiality of their communications
and to permit them to maintain the confidentiality of proprietary
information or information that is otherwise confidential or subject to an
applicable privilege, including but not limited to the attorney-client,
work product, executive, deliberative process or self-evaluation
privileges.

SECTION 7.12. CONTRIBUTION. To the extent that any indemnification provided
for under Section 7.01 or Section 7.02 is unavailable to an Indemnitee or is
insufficient in respect of any of the Indemnifiable Losses of such Indemnitee
then the Indemnifying Party under such Section, in lieu of indemnifying such
Indemnitee thereunder, shall contribute to the amount paid or payable by such
Indemnitee as a result of such Indemnifiable Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Party
on the one hand and the Indemnitee on the other hand from the transaction or
other matter which resulted in the Indemnifiable Losses or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Indemnifying
Party on the one hand and of the Indemnitee on the other hand in connection with
the action, inaction, statements or omissions that resulted in such
Indemnifiable Losses as well as any other relevant equitable considerations.

SECTION 7.13. PROCEDURES WITH RESPECT TO TRANSACTION LIABILITIES.

(a) NOTICE. If a Third Party Claim is made against either party or
such party's Group which may give rise to a Transaction Liability, such
party shall notify the other party in writing, and in reasonable detail, of
the Third Party Claim promptly (and in any event within 15 business days)
after receipt by such party of written notice of the Third Party Claim,
provided, however, that failure to give such notification shall not affect
either party's right to indemnification hereunder except to the extent a
party shall have been actually prejudiced as a result of such failure. The
parties shall deliver to each other, promptly (and in any event within 15
business days) after the receipt thereof, copies of all notices and
documents (including court papers) received by a party relating to such
Third Party Claim.

(b) LEGAL DEFENSE. If the parties jointly determine that a Third Party
Claim may give rise to a Transaction Liability, the parties shall jointly
agree on the manner of the defense of such Third Party Claim, including the
selection of counsel and responsibility for strategic decisions, and share
equally all costs and expenses incurred in connection with defending such
Claim. If the parties disagree as to whether any Third Party Claim may or
may not give rise to a Transaction Liability, the parties shall proceed in
accordance with Section 7.11(b) above with respect to such Third Party
Claim.

(c) SETTLEMENT. In no event will either party admit any liability with
respect to, or settle, compromise or discharge, any Third Party Claim that
the parties have jointly determined may give rise to a Transaction
Liability without the other party's prior written consent (which consent
shall not be unreasonably withheld or delayed); provided, however, that
either party shall have the right to settle, compromise or discharge such
Third Party Claim without the consent of the other party if such party
releases the other party from its indemnification obligation hereunder with
respect to such Third Party Claim and such settlement, compromise or
discharge contains a full and unconditional release

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of the other party with no obligation to pay any amounts on account of such
Claim and would not otherwise adversely affect the other party.

ARTICLE VIII

INDEMNIFICATION OF OFFICERS AND DIRECTORS

SECTION 8.01. INDEMNIFICATION OF OFFICERS AND DIRECTORS. Packaging and
Tenneco shall, to the fullest extent permitted by law, indemnify, defend and
save harmless the persons who were officers and directors of Tenneco Inc.,
immediately prior to the Distribution Date, from and against any and all
liability (including any judgments, losses, damages, civil penalties, excise
taxes, interest and any other form of liability or expense of any kind) or claim
of liability (as defined above and including any investigatory action) to which
they may be subjected by reason of any act alleged to have been done or omitted
to be done in connection with their service as officers and directors of Tenneco
Inc. and any related or affiliated entity, including all expenses reasonably
incurred in their defense if Packaging and Tenneco fail to provide such defense
after having been requested to do so in writing. Regardless of whether Packaging
or Tenneco assumes such defense, counsel for such defense shall be selected by
the indemnified officer or director. Defense costs shall be indemnified as
incurred in the course of the defense or investigation. The remedies provided by
this Section 8.01 shall be cumulative and without prejudice to the assertion of
any other rights. To the extent that an officer or director receives payment
under any liability insurance or other indemnification arrangement with respect
to a matter covered by this Section 8.01, that officer or director shall
reimburse the party which has made payments to him or her hereunder, but no
reimbursement shall be required except to the extent that the total which he or
she has received from all sources is greater than the aggregate amount of his or
her liability and expense with respect to that matter. The liability of Tenneco
and Packaging with respect to the indemnification provided in this Section 8.01
shall be joint and several as to the officer or director in question, but as
between Tenneco and Packaging, such liability shall be allocated as provided
under this Agreement. Tenneco and Packaging each jointly and severally agrees to
purchase and keep in force, or cause one of their respective subsidiaries to
purchase and keep in force, director and officer "run-off" insurance policies
that remain in effect for a period of seven years and provide coverage for acts
prior to the distribution by directors and officers. Notwithstanding the
provisions of Section 9.12 hereof, the officers and directors covered by this
Section 8.01 shall be and shall be deemed to be beneficiaries of this Article
VIII and shall be entitled to enforce their rights hereunder through legal
action or otherwise.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. COMPLETE AGREEMENT, CONSTRUCTION. This Agreement, including
the Exhibits and Schedules hereto, and the Ancillary Agreements shall constitute
the entire agreement between the parties with respect to the subject matter
hereof and shall supersede all previous negotiations, commitments and writings
with respect to such subject matter. In the event of any inconsistency between
this Agreement and any Schedule or Exhibit hereto, the Schedule or Exhibit, as
the case may be, shall prevail. Notwithstanding any other provisions in this
Agreement to the contrary, in the event and to the extent that there shall be a
conflict between the provisions of this Agreement and the provisions of any
Ancillary Agreement, such Ancillary Agreement shall control.

SECTION 9.02. ANCILLARY AGREEMENTS. This Agreement is not intended to
address, and should not be interpreted to address, the matters specifically and
expressly covered by the Ancillary Agreements except as specifically and
expressly provided by the Ancillary Agreements.

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SECTION 9.03. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.

SECTION 9.04. SURVIVAL OF AGREEMENTS. Except as otherwise expressly
provided herein, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.

SECTION 9.05. RESPONSIBILITY FOR EXPENSES. Subject to the provisions of the
Debt Realignment, Tenneco and Packaging will each pay for all fees, costs and
expenses incurred by it or a member of its respective Group on or prior to the
Distribution Date. Except as otherwise set forth in this Agreement or any
Ancillary Agreement each party shall bear its own costs and expenses incurred
after the Distribution Date; provided, however, that all fees, costs and
expenses described on Schedule 1 of Exhibit D ("Transaction Costs") (i) that are
not paid out of assets of Fund B of the Tenneco Rabbi Trust, and (ii) that are
incurred by Tenneco or Packaging or any member of its respective Group after the
Distribution Date, shall be shared equally by Tenneco and Packaging. Transaction
Costs shall be paid to the vendor by the party receiving the invoice for such
Transaction Costs in accordance with the terms of the invoice. The party paying
such Transaction Costs may submit to the other party a request for reimbursement
of an amount equal to not more than one-half of the payment no later than 30
days after payment of such invoice. Such reimbursement request shall include a
copy of the vendor's invoice and a statement by the chief accounting or other
responsible officer attesting to the payment of such invoice. Not later than 30
days after receipt of a reimbursement request under this Section 9.05, the party
receiving the reimbursement request shall pay the amount requested or advise the
other party that it disputes the reimbursement request and the basis for such
dispute. The failure to submit a dispute notice within ten days of receipt of
the reimbursement request shall constitute a waiver of any right to dispute the
reimbursement request.

SECTION 9.06. NOTICES. All notices and other communications to a party
hereunder shall be in writing and hand delivered or mailed by registered or
certified mail (return receipt requested) or sent by any means of electronic
message transmission with delivery confirmed (by voice or otherwise) to such
party (and will be deemed given on the date on which the notice is received by
such party) at the address.

for such party set forth below (or at such other address for the party as
the party shall, from time to time, specify by like notice to the other
parties):

If to Tenneco, at: 000 Xxxxx Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Telecopier:
Attention: General Counsel

If to Packaging, at: 0000 Xxxx Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Telecopier:
Attention: General Counsel

SECTION 9.07. WAIVERS. The failure of any party hereto to require strict
performance by any other party of any provision in this Agreement will not waive
or diminish that party's right to demand strict performance thereafter of that
or any other provision hereof.

SECTION 9.08. AMENDMENTS. Subject to the terms of Section 8.11 hereof, this
Agreement may not be modified or amended except by an agreement in writing
signed by the parties hereto.

SECTION 9.09. ASSIGNMENT. This Agreement shall be assignable in whole in
connection with a merger or consolidation or the sale of all or substantially
all the assets of a party hereto so long as the resulting, surviving or
transferee entity assumes all the obligations of the relevant party hereto by
operation of law or pursuant to an agreement in form and substance reasonably
satisfactory to the parties to this

TENNECO DISTRIBUTION AGREEMENT

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38

Agreement. Otherwise this Agreement shall not be assignable, in whole or in
part, directly or indirectly, by any party hereto without the prior written
consent of the other, and any attempt to assign any rights or obligations
arising under this Agreement without such consent shall be void.

SECTION 9.10. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective permitted successors and permitted assigns.

SECTION 9.11. TERMINATION. This Agreement may be terminated and the
Distribution may be amended, modified or abandoned at any time prior to the
Distribution by and in the sole discretion of Tenneco without the approval of
Packaging or the stockholders of Tenneco. In the event of such termination, no
party shall have any liability of any kind to any other party or any other
person. After the Distribution, this Agreement may not be terminated except by
an agreement in writing signed by all of the parties hereto; provided, however,
that Article VII shall not be terminated or amended after the Distribution in
respect of the third party beneficiaries thereto without the consent of such
persons.

SECTION 9.12. THIRD PARTY BENEFICIARIES. Except as provided in Article VII
hereof (relating to Indemnitees), this Agreement is solely for the benefit of
the parties hereto and the members of their respective Groups and Affiliates,
and should not be deemed to confer upon third parties any remedy, claim,
liability, right of reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.

SECTION 9.13. ATTORNEY FEES. A party in breach of this Agreement shall, on
demand, indemnify and hold harmless the other parties hereto for and against all
out-of-pocket expenses, including, without limitation, reasonable legal fees,
incurred by such other party by reason of the enforcement and protection of its
rights under this Agreement. The payment of such expenses is in addition to any
other relief to which such other party may be entitled hereunder or otherwise.

SECTION 9.14. TITLE AND HEADINGS. Titles and headings to sections herein
are inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.

SECTION 9.15. EXHIBITS AND SCHEDULES. The Exhibits and Schedules attached
hereto shall be construed with and as an integral part of this Agreement to the
same extent as if the same had been set forth verbatim herein.

SECTION 9.16. SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges
that there is no adequate remedy at law for the failure by such parties to
comply with the provisions of this Agreement and that such failure would cause
immediate harm that would not be adequately compensable in damages. Accordingly,
each of the parties hereto agrees that their agreements contained herein may be
specifically enforced without the requirement of posting a bond or other
security, in addition to all other remedies available to the parties hereto
under this Agreement.

SECTION 9.17. GOVERNING LAW. ALL QUESTIONS OR DISPUTES CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE SCHEDULES
AND EXHIBITS HERETO SHALL BE GOVERNED BY THE INTERNAL LAWS, AND NOT THE LAW OF
CONFLICTS, OF THE STATE OF DELAWARE. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY (i) AGREES TO BE SUBJECT TO, AND HEREBY
CONSENTS AND SUBMITS TO, THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE
AND OF THE FEDERAL COURTS SITTING IN THE STATE OF DELAWARE, (ii) TO THE EXTENT
SUCH PARTY IS NOT OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF
DELAWARE, HEREBY APPOINTS THE CORPORATION TRUST COMPANY, AS SUCH PARTY'S AGENT
IN THE STATE OF DELAWARE FOR ACCEPTANCE OF LEGAL PROCESS AND (iii) AGREES THAT
SERVICE MADE ON ANY SUCH AGENT SET FORTH IN (ii) ABOVE SHALL HAVE THE SAME LEGAL
FORCE AND EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE STATE OF
DELAWARE.

TENNECO DISTRIBUTION AGREEMENT

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SECTION 9.18. SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

SECTION 9.19. SUBSIDIARIES. Each of the parties hereto shall cause to be
performed, and hereby guarantee the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such party
which is contemplated to be a Subsidiary of such party on and after the
Distribution Date.

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

TENNECO INC.

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

TENNECO PACKAGING INC.

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

TENNECO DISTRIBUTION AGREEMENT

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EXHIBIT A

TENNECO

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
(MILLIONS)

PRO FORMA ADJUSTMENTS
--------------------------
SPIN-OFF CONSOLIDATED
TENNECO DEBT AND RELATED TENNECO
AS REPORTED REALIGNMENT TRANSACTIONS PRO FORMA
----------- ----------- ------------ ------------

ASSETS
Current assets:
Cash and temporary cash investments.............. $ 40 $ -- $ -- $ 40
Receivables...................................... 606 -- 100(c) 785
79 (b)
Inventories...................................... 401 -- -- 401
Other current assets............................. 129 31(a) -- 160
------ ----- ------- ------
Total current assets........................... 1,176 31 179 1,386
Plant, property, and equipment, net................ 1,049 -- -- 1,049
Goodwill and intangibles, net...................... 510 -- -- 510
Other assets and deferred charges.................. 260 41(a) (54)(f) 247
Net assets of discontinued operations.............. 1,421 -- (1,421)(d) --
------ ----- ------- ------
Total assets................................... $4,416 $ 72 $(1,296) $3,192
====== ===== ======= ======
LIABILITIES AND
SHAREOWNERS' EQUITY
Current liabilities:
Short-term debt (including current maturities on
long-term debt)................................ $ 206 $(206)(a) $ -- $ --
Trade payables................................... 351 -- 20(c) 371
Other current liabilities........................ 287 -- -- 287
------ ----- ------- ------
Total current liabilities...................... 844 (206) 20 658
Long-term debt..................................... 832 841(a) -- 1,673
Deferred income taxes.............................. 39 -- (22)(f) 17(e)
Other liabilities and deferred credits............. 168 -- -- 168
Minority interest.................................. 411 (394)(a) -- 17
Shareowners' equity................................ 2,122 (169)(a) (1,421)(d) 659
80(c)
(32)(f)
79(b)
------ ----- ------- ------
Total liabilities and shareowners' equity...... $4,416 $ 72 $(1,296) $3,192
====== ===== ======= ======

See the accompanying Notes to Unaudited Pro Forma Combined Balance Sheet.

TENNECO DISTRIBUTION AGREEMENT

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TENNECO

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

(a) To reflect adjustments to Tenneco's debt for the debt realignment and the
assumed payment of interest on Tenneco consolidated debt tendered or
exchanged as part of the pre-spin-off debt realignment. The adjustment to
equity reflects the net impact of the debt realignment, the recording of
debt issue costs and deferred income taxes related to the debt realignment.
Tenneco will acquire certain subsidiary preferred stock as part of the debt
realignment. At this time, Tenneco cannot determine the ultimate amount of
its outstanding public debt securities which will be (1) purchased in the
cash tender offers that Tenneco plans to make as part of its debt
realignment, or (2) exchanged for new securities in the exchange offers, and
the amounts could vary significantly. These pro forma adjustments assume
that 100% of the securities subject to the cash tender offers are purchased
and 100% of the original securities are exchanged for new securities. These
pro forma adjustments also assume that the new securities will be recorded
at the net carrying amount of the original securities (in other words, the
new securities are assumed not to be "substantially different." See the
section titled "Accounting Treatment of the Exchange Offers" contained in
Tenneco Packaging Inc.'s Registration Statement on Form S-4, File No.
333-82923). The results of the exchange offers could vary based on a number
of factors, including the level of acceptance of the exchange offers, the
ultimate interest rate of the exchanged securities and whether the exchanges
will be considered extinguishments for accounting purposes. Based on current
interest rate markets, it is expected that the exchange offers will not be
extinguishments for accounting purposes. Tenneco expects to incur an
extraordinary charge as a result of the debt realignment related to the cash
tender offers. Tenneco estimates that this cost will be approximately $20 to
$25 million after-tax based on current market rates of interest. Other
costs, including transaction costs related to the acquisition of certain
subsidiary preferred stock and costs associated with foreign tax
restructuring initiatives, will be incurred by Tenneco in connection with
the corporate restructuring transactions and the spin-off which Tenneco
estimates will be approximately $50 million after-tax. The effect on
Tenneco's debt of these costs has been reflected in this pro forma
adjustment. However, these charges have not been included in the unaudited
pro forma consolidated statements of income. See the section titled
"Unaudited Pro Forma Consolidated Financial Statements of Tenneco" contained
in Tenneco Packaging Inc.'s Registration Statement on Form S-4, File No.
333-82923.

(b) To reflect the purchase of Automotive accounts receivable at fair value
which had previously been sold to a third party.

(c) To reflect affiliated receivables and payables with Packaging that were
eliminated in the Tenneco consolidated balance sheet.

(d) To reflect the spin-off of Packaging common stock to holders of Tenneco
common stock at an exchange ratio of one share of Packaging common stock for
each share of Tenneco common stock.

(e) Deferred income taxes at June 30, 1999 include $79 million of net operating
loss carryforwards which will be utilized by Packaging upon the planned sale
of Packaging's remaining interest in its containerboard joint venture.

(f) To reflect the increase in net periodic pension costs resulting from the
transfer to Packaging of prepaid pension costs attributable to Automotive
employees. Automotive employees will no longer participate in the Tenneco
Retirement Plan following the spin-off and Packaging will become the sponsor
of this plan. These prepaid pension costs will be transferred to Packaging
in connection with the corporate restructuring transactions.

TENNECO DISTRIBUTION AGREEMENT

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EXHIBIT B

AUTOMOTIVE SUBSIDIARIES

TENNECO INC. (DELAWARE) (to be renamed Tenneco Automotive
Inc.)
Tenneco Automotive Inc. (to be renamed)................... 100%
Beijing Monroe Automobile Shock Absorber Company Ltd.
(Peoples Republic of China)........................... 51
(Tenneco Automotive Inc. owns 51%; and Beijing
Automotive Industry Corporation, an unaffiliated
company, owns 49%)
Dalian Xxxxxx-Xxxxxx Muffler Co. Ltd. (Peoples Republic
of China)............................................. 55
(Tenneco Automotive Inc. owns 55%; and non-affiliates
own 45%)
XxXxxxxxx Strut Company Inc. (Delaware)................ 100
Precision Modular Assembly Corp. (Delaware)............ 100
Shanghai Xxxxxx Exhaust Company, Ltd. (Peoples Republic
of China)............................................. 55
(Tenneco Automotive Inc. owns 55%; and Shanghai
Tractor and Internal Combustion Engine Company,
Ltd., an unaffiliated company, owns 45%)
Tenneco Asheville Inc. (Delaware)...................... 100
Tenneco Asia Inc. (Delaware)........................... 100
Tenneco Automotive Foreign Sales Corporation Limited
(Jamaica)............................................. 100
Tenneco Automotive Japan Ltd. (Japan).................. 100
Tenneco Automotive Nederlands B.V. (Netherlands)....... 100
Tenneco Automotive RSA Company (Delaware).............. 100
Tenneco Automotive Trading Company (Delaware).......... 100
Tenneco Brake, Inc. (Delaware)......................... 100
Tenneco Europe Limited (Delaware)...................... 100
Wimetal S. A. (France)............................... ,1
(Tenneco Europe Limited owns 1 share; Xxxxxx
Limited owns 1 share; Xxxxxx France S.A. owns 99%;
and each of Xxxxx Xxxxxxxx, Xxxxxx xxx Xxxxxxx,
Xxxxxx Xxxxx, Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxx and
Xxxx Xxxxxx, affiliated persons, owns 1 share)
Tenneco Inc. (Nevada).................................. 100
Tenneco International Finance Limited (United
Kingdom)(1)........................................... 100
Tenneco International Holding Corp. (Delaware)......... 100
Monroe Australia Pty. Limited (Australia)............ 000
Xxxxxx Xxxxxxx (Australia) Pty. Ltd.
(Australia)....................................... 100
Monroe Superannuation Pty. Ltd. (Australia)....... 100
Xxxxxx Australia Pty. Limited (Australia)......... 100
Tenneco Automotive Europe N.V. (Belgium)............. 100
Monroe Amortisor Imalat Ve Ticaret A.S.
(Turkey).......................................... 99.85
(Tenneco Automotive Europe N.V. owns 99.85%; and
various unaffiliated individual stockholders own
0.15%)
Tenneco Automotive Italia S.r.l. (Italy)............. 85
(Tenneco International Holding Corp. owns 85%; and
Tenneco Automotive France, S.A. owns 15%)
Tenneco Automotive Polska Sp. z.O.O.................. 1
(Tenneco International Holding Corp. owns 1%; and
Tenneco Global Holdings Inc. owns 99%)

TENNECO DISTRIBUTION AGREEMENT

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SUBSIDIARIES OF TENNECO INC.
SUBSIDIARIES OF TENNECO AUTOMOTIVE INC.
SUBSIDIARIES OF TENNECO INTERNATIONAL HOLDING CORP.
Tenneco Romania Sr(1)(Romania)....................... 0.14%
(Tenneco International Holding Corp. owns 0.14%;
and Tenneco Global Holdings Inc. owns 99.86%)
Tenneco Automotive Sverige A.B.(Sweden).............. 000
Xxxxxxx Xxxxxx Inc.(Ontario)......................... 100
Tenneco Global Holdings Inc.(Delaware)............... 000
Xxxx-Xxx S.A.I.C. (Argentina)..................... 55
(Tenneco Global Holdings Inc. owns 55%; Maco
Inversiones S.A. owns 44.85%; and unaffiliated
parties own .15%)
Maco Inversiones S.A.(Argentina).................. 000
Xxxx-Xxx S.A.I.C. (Argentina)................... 44.85
(Maco Inversiones S.A. owns 44.85%; Tenneco
Global Holdings Inc. owns 55%; and
unaffiliated parties own .15%)
Monroe Springs (New Zealand) Pty. Ltd. (New
Zealand).......................................... 100
Monroe Czechia s.r.o. (Czech Republic)............ 100
Tenneco Automotive Iberica, S.A. (Spain).......... 100
Tenneco Automotive Polska Sp. z.O.O. (Poland)..... 99
(Tenneco Global Holdings Inc. owns 99%; and
Tenneco International Holding Corp. owns 1%)
Tenneco Romania Srl (Romania)..................... 99.86
(Tenneco Global Holdings Inc. owns 99.86%; and
Tenneco International Holding Corp. owns 0.14%)
Tenneco Mauritius Limited (Mauritius)............. 100
Hydraulics Limited (India)...................... 51
(Tenneco Mauritius Limited owns 51% and
Bangalore Union Services Limited, an
unaffiliated company, owns 49%) Renowned
Automotive Products Manufacturers Ltd.
(India)....................................... 83
(Hydraulics Limited owns 83%; and
non-affiliates own 17%)
Tenneco Automotive India Private Limited
(India)......................................... 100
Xxxxxx Exhaust India Private Limited
(India)....................................... 100
(Tenneco Automotive India Private Limited
owns less than 100%; and an unaffiliated
party owns the balance)
Tenneco Holdings Danmark A/S (Denmark)............... 100
Gillet Exhaust Technologie (Proprietary) Limited
(South Africa).................................... 100
Gillet Lazne Belohrad, s.r.o. (Czech Republic).... 100
Kinetic Ltd. (Australia).......................... 99
(Tenneco Holdings Danmark A/S owns 99%+; and
unaffiliated entities own less than 1%)
Tenneco Automotive Holdings South Africa Pty. Ltd.
(South Africa).................................... 51
(Tenneco Holdings Danmark A/S owns 51%; and an
unaffiliated party owns 49%)
Xxxxxxxxx Hydraulics South Africa (Pty.) Ltd.
(South Africa).................................. 100
Xxxxxxxxx Properties (Pty.) Ltd. (South
Africa)......................................... 100

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

(1) In dissolution.

TENNECO DISTRIBUTION AGREEMENT

B-2
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SUBSIDIARIES OF TENNECO INC.
SUBSIDIARIES OF TENNECO AUTOMOTIVE INC.
SUBSIDIARIES OF TENNECO GLOBAL HOLDINGS INC.
SUBSIDIARIES OF TENNECO AUTOMOTIVE HOLDINGS SOUTH
AFRICA PTY. LTD.
Monroe Manufacturing (Pty.) Ltd. (South
Africa)......................................... 100%
Smiths Industrial (SWA) (Pty.) Ltd. (South
Africa)......................................... 100
Tenneco Automotive Port Xxxxxxxxx (Proprietary)
Limited (South Africa)............................ 100
Tenneco Automotive Portugal -- Componentes para
Automovel, S.A. (Portugal)........................ 100
Xxxxxx Danmark A/S (Denmark)...................... 100
Tenneco Automotive France S.A. (France).............. 100
(Tenneco International Holding Corp. owns 470,371
shares; Xxxxxx Xxxxxxxxx owns 16 shares; Xxxxxx
Xxxxxxxxx owns 8 shares; and each of Xxxxxx
Europe, Inc., Xxxxx Xxxxxxxxx, Xxxxxxxx Xxxxxx,
Xxx Xxxxxxxx and Xxxxx Xxxxxxxx owns 1 share)
Gillet Tubes Technologies G.T.T. (France)......... 100
Monroe Packaging N.V. (Belgium)................... 99.9
(Tenneco Automotive Europe N.V. owns 99.9%; and
Tenneco Automotive France S.A. owns 0.1%)
Tenneco Automotive Europe Coordination Center N.V.
(Belgium)......................................... 99.9
(Tenneco Automotive Europe N.V. owns 99.9%; and
Tenneco Automotive France S.A. owns 0.1%)
Tenneco Automotive Italia S.r.l. (Italy).......... 15
(Tenneco International Holding Corp. owns 85%;
and Tenneco Automotive France S.A. owns 15%)
Xxxxxx France Constructeurs S.A.R.L. (France)..... 100
Wimetal S.A. (France)............................. 99
(Tenneco Automotive France S.A. owns 99%;
Tenneco Europe Limited owns 1 share, Xxxxxx
Limited owns 1 share; and each of Xxxxx
Xxxxxxxx, Xxxxxx xxx Xxxxxxx, Xxxxxx Xxxxx,
Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxx and Xxxx
Xxxxxx, affiliated persons, owns 1 share)
The Pullman Company (Delaware)......................... 100
Autopartes Xxxxxx X.X. de C.V. (Mexico).............. 100
Consorcio Xxxxxxxxx X.X. de C.V. (Mexico)......... 99.99
(Autopartes Xxxxxx X.X. de C.V. owns 99.99%; and
Josan Latinamericana S.A. de C.V., an
unaffiliated company, owns 0.01%)
Monroe-Mexico S.A. de C.V. (Mexico)............... 100
Tenneco Automotive Servicios de Mexico, S.A. de
C.V. (Mexico)................................... 0.01
(Monroe-Mexico, S.A. de C.V. owns 1 share;
and Proveedora Xxxxxx S. de X.X. de C.V. owns
49,999 shares)
Proveedora Xxxxxx S. de X.X. de C.V. (Mexico)..... 99.99
(Autopartes Xxxxxx X.X. de C.V.owns 99.99%; and
Pullmex S. de X.X. de C.V. owns .01%)

TENNECO DISTRIBUTION AGREEMENT

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SUBSIDIARIES OF TENNECO INC.
SUBSIDIARIES OF TENNECO AUTOMOTIVE INC.
SUBSIDIARIES OF THE PULLMAN COMPANY
SUBSIDIARIES OF PROVEEDORA XXXXXX S. DE X.X. DE CV
Pullmex S. de X.X. de C.V. (Mexico)............. 0.01%
(Proveedora Xxxxxx S. de X.X. de C.V. owns
0.01% and Autopartes Xxxxxx X.X. de C.V. owns
99.99%)
Tenneco Automotive Servicios de Mexico, S.A. de
C.V. (Mexico)................................... 99.99
(Proveedora Xxxxxx S. de X.X. de C.V. owns
49,999 shares, and Monroe-Mexico, S.A. de C.V.
owns 1 share)
Pullmex S. de X.X. de C.V......................... 99.99
(Autopartes Xxxxxx X.X. de C.V. owns 99.9%; and
Proveedora Xxxxxx S. de X.X. de C.V. owns 0.1%)
Proveedora Xxxxxx S. de X.X. de C.V. (Mexico)... 0.01
(Pullmex S. de X.X. de C.V. owns 0.01%; and
Autopartes Xxxxxx X.X. de C.V. owns 99.99%)
Clevite Industries Inc. (Delaware)................... 100
Peabody International Corporation (Delaware)......... 100
Barasset Corporation (Ohio)....................... 000
Xxxxxxx Xxxxxx Corporation (Delaware)............. 000
Xxxxxxx Xxxxxx-Xxxxx, Inc. (Delaware)............. 100
Peabody N.E., Inc. (Delaware)..................... 100
Peabody World Trade Corporation (Delaware)........ 100
Xxxxxxx-Xxxxx Corporation (Illinois).............. 000
Xxxxxxx Xxxxxx Ltd. (Canada)...................... 61
(Peabody International Corporation owns 61%; and
The Pullman Company owns 39%)
Pullman Canada Ltd. (Canada)......................... 39
(The Pullman Company owns 39%; and Peabody
International Corporation owns 61%)
Pullman Standard Inc. (Delaware)..................... 100
Tenneco Brazil Ltda. (Brazil)........................ 100
Tenneco Automotive Brasil Ltda. (Brazil).......... 100
Xxxxxxxx and Stammers Dunmow (Number 6) Limited (United
Kingdom).............................................. 100
Xxxxxxxx and Stammers Dunmow (Number 7) Limited (United
Kingdom).............................................. 000
XXX Xxxxx Inc. (Delaware).............................. 100
Xxxxxx Electronic Silencing Inc. (Delaware)............ 100
Xxxxxx Europe, Inc. (Delaware)......................... 100
Tenneco Automotive France S.A. (France).............. 1
(Tenneco International Holding Corp. owns 470,371
shares; Xxxxxx Xxxxxxxxx owns 16 shares; Xxxxxx
Xxxxxxxxx owns 8 shares; and each of Xxxxxx
Europe, Inc., Xxxxx Xxxxxxxxx, Xxxxxxxx Xxxxxx,
Xxx Xxxxxxxx and Xxxxx Xxxxxxxx owns 1 share)
Xxxxxx Limited (United Kingdom)........................ 100

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SUBSIDIARIES OF TENNECO INC.
SUBSIDIARIES OF TENNECO AUTOMOTIVE INC.
SUBSIDIARIES OF XXXXXX LIMITED (UNITED KINGDOM)
Gillet Torsmaskiner UK Limited (United Kingdom)...... 50
(Xxxxxx Limited owns 100 A Ordinary Shares, 50% of
total equity; and AB Torsmaskiner, an unaffiliated
company, owns 100 B Ordinary Shares, 50% of total
equity)
Exhaust Systems Technology Limited (United
Kingdom).......................................... 99.99%
(Gillet Torsmaskiner UK Limited owns 99.99%; and
Xxxxxxxx Xxxxxx GmbH & Co. owns .01%)
Tenneco Automotive UK Limited (United Kingdom)....... 100
Gillet Exhaust Manufacturing Limited (United
Kingdom).......................................... 100
Gillet Pressings Cardiff Limited (United
Kingdom).......................................... 100
Xxxxxx (UK) Limited (United Kingdom).............. 100
X.X. Xxxxxxx (Motor Trade) Limited (United
Kingdom)........................................ 100
Tenneco -- Xxxxxx (U.K.) Ltd. (United
Kingdom)........................................ 100
Tenneco Management (Europe) Limited (United
Kingdom)............................................ 100
Wimetal S. A. (France)............................... 1
(Xxxxxx Limited owns 1 share; Tenneco Europe
Limited owns 1 share; Tenneco Automotive France
S.A. owns 99%; and each of Xxxxx Xxxxxxxx, Xxxxxx
xxx Xxxxxxx, Xxxxxx Xxxxx, Xxxxxx Xxxxxxxxx,
Xxxxxx Xxxxxxx and Xxxx Xxxxxx, affiliated
persons, owns 1 share)
Xxxxxx Manufacturing Company (Delaware)................ 100
Ced's Inc. (Illinois)................................ 100
Xxxxxx Norge A/S (Norway).............................. 100
Tenneco Deutschland Holdinggesellschaft mbH (Germany)..... 99.97
(Tenneco Inc. owns 99.97%; and Atlas
Vermoegensverwaltung, an unaffiliated company, owns
0.03%)
GILLET Unternehmesverwaltungs GmbH (Germany)........... 100
Xxxxxxxx Xxxxxx GmbH & Co. KG (Germany).............. 0.1
(GILLET Unternehmesverwaltungs GmbH owns 0.1%; and
Tenneco Deutschland Holdinggesellschaft mbH owns
99.9%. The subsidiaries of Xxxxxxxx Xxxxxx GmbH &
Co. KG are listed below.)
Xxxxxxxx Xxxxxx GmbH & Co. KG (Germany)................ 99.9
(Tenneco Deutschland Holdinggesellschaft mbH owns
99.9%; and GILLET Unternehmesverwaltungs GmbH owns
0.1%)
ELGIRA Montagebetrieb fur Abgasanlagen Rastatt GmbH
(Germany)........................................... 50
(Xxxxxxxx Xxxxxx GmbH & Co. KG owns 50%; and an
unaffiliated party owns 50%)
Exhaust Systems Technology Limited (United
Kingdom)............................................ 0.01
(Xxxxxxxx Xxxxxx GmbH & Co. KG owns 0.01%; and
Gillet Torsmaskiner UK Limited owns 99.99%)
Gillet-Abgassysteme Zickau Gmbh (Germany)............ 100
Elagest AB (Sweden)............................... 50
(Gillet-Abgassysteme Zickau GmbH owns 50%; and
an unaffiliated party owns 50%)

TENNECO DISTRIBUTION AGREEMENT

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SUBSIDIARIES OF TENNECO INC.
SUBSIDIARIES OF TENNECO AUTOMOTIVE INC.
SUBSIDIARIES OF TENNECO DEUTSCHLAND HOLDINGGESELLSCHAFT
MBH
SUBSIDIARIES OF XXXXXXXX XXXXXX GMBH & CO. KG
Mastra-Gillet Industria e Comercio Ltda. (Brazil).... 50
(Xxxxxxxx Xxxxxx GmbH & Co. KG owns 50%; and
Mastra Industriae Comercio Ltda., an unaffiliated
company, owns 50%)
Montagewerk Abgastechnik Emden GmbH (Germany......... 50%
(Xxxxxxxx Xxxxxx GmbH & Co. KG owns 50%; and an
unaffiliated party owns 50%)
Tenneco Automotive Deutschland GmbH (Germany).......... 100
WALKER GILLET (Europe) GmbH (Germany).................. 100

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

(1) In dissolution.

TENNECO DISTRIBUTION AGREEMENT

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EXHIBIT C

CORPORATE RESTRUCTURING TRANSACTIONS

Set forth below are the transactions that, as applicable, the members of
each of the Packaging and Automotive Groups will consummate in connection with
the Distributions and Spin. A list of defined terms is included as Schedule 1 to
this Exhibit. Capitalized terms used but not otherwise defined in Schedule 1
have the meaning ascribed to them under the Distribution Agreement.

A. REALIGNMENT OF INTERCOMPANY OBLIGATIONS.

The following transactions will be effected to realign the intercompany
accounts of the Automotive and Packaging Groups. After the completion of these
transactions, TI will have a single net intercompany obligation from TPI and all
other intercompany obligations (other than trade accounts) will be exclusively
between entities which are members of the same Group. Following the completion
of these transactions, there will be no further transfers of funds between
members of different Groups other than pursuant to transactions occurring in the
ordinary course of business (trade accounts) and transfers required or otherwise
permitted pursuant to these Corporate Restructuring Transactions.

1. Realignment of AG Intercompany Obligations.

Realignment of AG Foreign Intercompany Accounts. Each foreign member of AG
having a net intercompany obligation owing from a member of PG (excluding trade
accounts receivable) will transfer such net intercompany obligation to TMEL in
exchange for an intercompany advance receivable from TMEL in an amount equal to
the aggregate amount of the net intercompany receivables and notes transferred.
TMEL will assume the net intercompany obligation owed by each foreign member of
AG having a net intercompany obligation to a member of PG (excluding trade
accounts payable) in exchange for the issuance by each such AG member of an
intercompany advance payable to TMEL in an amount equal to the aggregate amount
of the net intercompany obligations assumed.

Realignment of AG Domestic Intercompany Obligations. Each domestic member
of AG having a net intercompany obligation owing from a member of PG (excluding
trade accounts receivable) will transfer such net intercompany obligation to TI
in exchange for an intercompany advance receivable from TI in an amount equal to
the aggregate amount of the net intercompany receivables and notes transferred.
TI will assume the net intercompany obligations owed by each domestic member of
AG having a net intercompany obligation to a member of PG (excluding trade
accounts payable) in exchange for the issuance by each such AG member of an
intercompany advance payable to TI in an amount equal to the aggregate amount of
the net intercompany obligations assumed.

2. Realignment of PG Intercompany Obligations

Realignment of PG Foreign Intercompany Accounts. Each foreign member of PG
having a net intercompany obligation from a member of AG (excluding trade
accounts receivable) will transfer such net intercompany obligation to TPUKL in
exchange for an intercompany advance receivable from TPUKL in an amount equal to
the aggregate amount of the net intercompany receivables and notes transferred.
TPUKL will assume the net intercompany obligations owed by each foreign member
of PG having a net intercompany obligation to a member of the AG (excluding
trade accounts payable) in exchange for the issuance by each such PG member of
an intercompany advance payable to TPUKL in an amount equal to the aggregate
amount of the net intercompany obligations assumed.

Realignment of PG Domestic Intercompany Obligations. Each domestic member
of PG having a net intercompany obligation owing from a member of AG (excluding
trade accounts receivable) will transfer such net intercompany obligation to TPI
in exchange for an intercompany advance receivable from TPI in

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an amount equal to the aggregate amount of the net intercompany receivables and
notes transferred. TPI will assume the net intercompany obligations owed by each
domestic member of PG having a net intercompany obligation to a member of AG
(excluding trade accounts payable) in exchange for the issuance by each such PG
member of an intercompany advance payable to TPI in an amount equal to the
aggregate amount of the net intercompany obligations assumed.

B. DEBT REALIGNMENT

1. Each of TI and TPI shall participate in the Debt Realignment.

C. IMPLEMENTATION OF CORPORATE RESTRUCTURING TRANSACTIONS. The following
transactions will be effected pursuant to the requirement in Section 2.01 of the
Distribution Agreement that the parties and their affiliates "take such action
or actions as is necessary to cause, effect and consummate the Corporate
Restructuring Transactions." Transactions occurring on the same day shall be
deemed to have occurred in the order listed herein regardless of the order in
which the documentation is executed, filed, or accepted, and regardless of the
order in which the funds or other assets are transferred.

1. Separation of the German and U.K. Packaging and Automotive Parts Businesses

German Restructuring:

a. TDH will form six new German corporate subsidiaries (each, a"GP
GmbH") and PDH:

(1) Omni-Pac GP GmbH;
(2) OPE GP GmbH;
(3) Sengewald V GP GmbH;
(4) Xxxxxxx XX GmbH;
(5) Sengewald K GP GmbH;
(6) Nord-West GP GmbH; and
(7) PDH

b. The TDH corporate subsidiaries will be converted to German
partnerships or GmbH & Co KGs ("operating target KGs").

c. TDH will transfer (in trust) a nominal interest (.1%) in each of
OPE GmbH, Kobusch GmbH, Nord-West GmbH, Sengewald V GmbH, and Sengewald K
GmbH to the corresponding GP GmbHs.

d. TI will sell its 1% interest in Omni-Pac to Omni-Pac GP GmbH.

An entity classification election will be made for US tax purposes so that
each of the operating target KGs, as well as all other direct and indirect
subsidiaries of the operating target KGs will be treated as divisions/branches
of TDH effective as of the conversion date.

e. Packaging Deutschland will form six new German limited partnerships
("financing KGs" or "F KGs") corresponding to the six operating target KGs
created in b. above: Omni-Pac F KG; OPE F KG; Omni-Pac F KG; Nord-West F
KG; Sengewald V F KG; and Xxxxxxxxx X X KG.

An entity classification election will be made for US tax purposes so that
each of the financing KGs will be treated as divisions of Packaging Deutschland
GmbH effective as of the date of formation.

f. Each of the six general partner GmbHs formed in a. above will
become a general partner of one of the respective financing KGs formed in
e. above. Packaging Deutschland GmbH will receive 100% limited partnership
interest in each of the newly created financing KGs in exchange for nominal
equity contribution.

g. TDH will sell Halle real estate to Sengewald V F KG.

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h. Each of the financing KGs will acquire respective operating target
KG limited partnership interests from TDH.

i. TDH will sell the following entities to PDH:

(1) Omni-Pac GP GmbH;
(2) OPE GP GmbH;
(3) Xxxxxxx XX GmbH;
(4) Nord-West GP GmbH;
(5) Sengewald V GP GmbH; and
(6) Sengewald K GP GmbH.

j. TDH will sell its entire limited partnership interests in the
following entities:

(1) Omni-Pac KG to Omni-Pac F KG;
(2) OPE KG to OPE F KG;
(3) Kobusch KG to Kobusch F KG;
(4) Nord-West KG to Nord-West F KG; and
(5) Sengewald V KG to Sengewald V F KG.

k. Sengewald V KG will sell its entire limited partnership interests
in Sengewald K KG to Xxxxxxxxx X X KG.

l. TI will transfer 99.97% share in Sentinel GmbH Verpackungen to TPI
as equity contribution.

m. The following mergers will occur:

(1) Omni-Pac F KG (survivor) and Omni-Pac KG;
(2) OPE F KG (survivor) and OPE KG;
(3) Kobusch F KG (survivor) and Kobusch KG;
(4) Nord-West F KG (survivor) and Nord-West KG;
(5) Sengewald V F KG (survivor) and Sengewald V KG; and
(6) Xxxxxxxxx X X KG (survivor) and Sengewald K KG.

UK Restructuring.

a. TI will make an entity classification election for US tax purposes
so that each of the following entities will be treated as a division of its
parent:

(1) OPUKL;
(2) Packaging Scotland;
(3) Alpha;
(4) Caerphilly;
(5) Films;
(6) Livingston;
(7) Xxxxxxx;
(8) Brucefield; and
(9) Polbeth.

x. Xxxxxxx will purchase all of the stock of the following
subsidiaries from Xxxxxx: TPUKL; OPUKL; and Packaging Scotland.

c. TPUKL will become PG internal finance company.

x. Xxxxxx Ltd will transfer its shares in Omni-Pac UK and TPL to
Xxxxxxx.

2. Xxxxxxxx and Xxxxxx Note. TI will transfer the Xxxxxxxx and Xxxxxx note
to TMC.

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3. TPI Name Change. TPI will change its name to and will register
to do business in the following states (where Specialty is registered and TPI is
not): Arkansas, Louisiana, New Hampshire, and South Dakota

4. TI Contribution of Capital to TPI. TI will transfer all of its ownership
interests (100% unless otherwise indicated) in the following entities to TPI as
a contribution to capital:

x. Xxxxxxx

x. Xxxx Products Leasing Company (DE)

c. Tenneco Packaging Hungary Holdings Inc. (DE)

d. Tenneco Packaging International Holdings Inc. (DE)

e. Scriptoria N.V. (Belgium)(1)

f. Airpack Polska SP z.O.O. (Poland)

g. Airpack Japan K.K. (Japan)

h. Tenneco Packaging Europe B.V. (Netherlands)

i. Wellenfoam N.V. (Belgium)(2)

x. Xxxxxxx Packaging Egypt Ltd. (Egypt)(3)

k. Tenneco Packaging -- Chile Holdings Inc. (Delaware)

l. Airpack SPA (Italy)(4)

m. Aircal S.A. (France)(5)

n. Tenneco PPI Company (DE)

o. Omni-Pac S.A.R.L. (France)(6)

p. Tenneco Packaging Hexacomb S.A. (Spain)

q. Tenneco Romania Holdings Inc. (DE)

r. Tenneco Packaging Leasing Company (DE)

s. TBSHI

t. Tenneco NV Inc.

u. Tenneco International Finance B.V. (Netherlands)

v. Tenneco International Business Development Limited (DE)

w. Tenneco Management Company (DE)

x. Tenneco Retail Receivables Co. (DE)

y. Sentinel GmbH Verpackungen (Germany)(7)

z. Alupak

aa. Tenneco Packaging RSA Company (DE)

5. Tenneco Trademarks and Trade Names. The Tenneco Trademarks and
tradenames will be assigned to a member of the AG.

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

(1) TI owns 99.56%; Tenneco Packaging International Holdings Inc. holds 18
shares; the balance of shares outstanding are held by unaffiliated persons.

(2) TI owns all of the shares except for one, which is owned by Tenneco
Packaging International Holdings Inc. (Delaware).

(3) TI owns 99% and Kobusch Folien GmbH (Germany) owns 1%.

(4) TI owns 98%; Tenneco Packaging International Holdings Inc. (Delaware) owns
2%.

(5) TI owns all of the shares except seven which are held by the company's four
directors and TPI, Tenneco Protective Packaging Inc. (Delaware), and Tenneco
Packaging International Holdings Inc. (Delaware).

(6) TI owns 97% and Omni-Pac GmbH (Germany) owns 3%.

(7) A small percentage of shares is owned by Scriptoria N.V. (Belgium).

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6. TPI Recapitalization. Immediately before the Distribution, TPI will be
recapitalized as provided in Section 2.02 of the Distribution Agreement.

7. Specialty Merger. Pursuant to a plan of complete liquidation, Specialty
will be merged with and into TPI, with TPI as the surviving corporation.

8. TI Contribution of Capital to TAI. Following step C4, TI will transfer
all of its remaining assets (other than its ownership interests in TAI, TPI,
Tenneco Automotive Merger Sub Inc. and Tenneco Deutschland) to TAI as a
contribution to capital.

9. TAI Name Change. Prior to the Distribution Date, TAI will change its
name to .

D. DISTRIBUTIONS

1. Dividend of TPI Stock. On the Distribution Date following the
consummation of steps C1 through C7, TI will distribute all of the stock of TPI
to Tenneco shareholders as a distribution with respect to stock (i.e., return of
contributed surplus) pro rata on the basis of one share of TPI stock for one
share of Tenneco common stock outstanding. Cash will be paid in lieu of issuing
fractional shares of TPI stock. Each share of stock of TPI will have attached to
it stock purchase rights (the "Rights") which will entitle the holder to
purchase certain stock of TPI, as the case may be, upon the occurrence of
certain triggering events.

2. TI Stock Split. One day after the Distribution Date, TI will effect a
reverse stock split. Cash will be paid in lieu of issuing fractional shares of
TI stock.

3. TI Name Change. Prior to the Distribution Date, but after C9, a merger
subsidiary will be incorporated in Delaware as Tenneco Automotive Merger Sub
Inc. Effective as of 8:00 a.m. EST on the day following the Distribution Date,
TI will merge with the Merger Subsidiary with TI as survivor under the name
Tenneco Automotive Inc.

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SCHEDULE 1

CORPORATE RESTRUCTURING TRANSACTIONS
LIST OF DEFINED TERMS

"AG" = Automotive Group
"Alpha" = Alpha Products (Bristol) Limited (UK)
"Alupak" = Alupak A.G. (Switzerland)
"ASCC" = Asset Securitization Cooperative Corporation
"Xxxxxxx" = The Xxxxxxx Group, Ltd. (UK)
"Brucefield" = Brucefield Plastics Limited (Scotland)
"Caerphilly" = Tenneco Packaging (Caerphilly) Limited (UK)
"CIBC" = Canadian Imperial Bank of Commerce
"Films" = Tenneco Packaging (Films) Limited (UK)
"Hexacomb" = Tenneco Packaging Hexacomb S.S. (Spain)
"Iberica" = Tenneco Automotive Iberica S.A. (Spain)
"KG" = German limited partnership
"Klinik" = Klinik GmbH (Germany)
"Kobusch" = Kobusch Folien GmbH (Germany
"Livingston" = Tenneco Packaging (Livingston) Limited (Scotland)
"Nord-West" = Nord-West Verpackung GmbH (Germany)
"Omni-Pac = Omni-Pac GmbH (Germany)
"OPE" = Omni-Pac Ekco GmbH (Germany)
"OPUKL" = Omni-Pac U.K. Limited (UK)
"Packaging Deutschland" = Packaging Deutschland GmbH (Germany)
"Packaging Scotland" = Tenneco Packaging Limited (Scotland)
"PCA" = Packaging Corporation of America
"PDH" = Tenneco Packaging Deutschland Holdinggesellschaft mbH
(Germany)
"PG" = Packaging Group
"Polbeth" = Polbeth Packaging (Corby) Limited (Scotland)
"Sengewald V" = Sengewald Verpackungen GmbH (Germany)
"Sengewald K" = Sengewald Klinicprodukte GmbH (Germany)
"Specialty" = Tenneco Packaging Specialty and Consumer Products Inc.
(DE)
"Xxxxxxx" = Tenneco Packaging (Xxxxxxx) Limited (UK)
"TA France" = Tenneco Automotive France S.A. (France)
"TAI" = Tenneco Automotive Inc. (DE)
"TARSAC" = Tenneco Automotive RSA Company Inc. (DE)
"TAVIAI" = Tenneco AVI Acquisition Inc, (DE)
"TBSHI" = Tenneco Business Services Holdings Inc. (DE)
"TBSI" = Tenneco Business Services Inc. (DE)
"TCI" = Tenneco Canada Inc.
"TDH" = Tenneco Deutschland Holinggessellschaft mbH (Germany)
"TI" = Tenneco Inc. (DE)
"TIHC" = Tenneco International Holdings Corp. (DE)
"TMC" = Tenneco Management Company (DE)
"TMC Texas" = TMC Texas Inc. (DE)
"TMEL" = Tenneco Management (Europe) Limited (UK)
"TPI" = Tenneco Packaging Inc. (DE)
"TPRSAC" = Tenneco Packaging RSA Company Inc. (DE)
"TPUKL" = Tenneco Packaging (UK) Limited (UK)
"Xxxxxx" = Xxxxxx Limited (UK)
"WE" = W.E. Verwaltungsgesellschaft mbH

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EXHIBIT D

DEBT REALIGNMENT

(Capitalized terms used but not otherwise defined herein have the meanings
ascribed to them in the Distribution Agreement to which this is attached.)

1. The specific goal of the Debt Realignment is to reach the allocation
between Packaging and Tenneco of Tenneco's Consolidated Debt at the time of the
Distribution (after giving effect to the repurchase of subsidiary preferred
stock and payment of transaction fees and expenses) that is reflected in the
June 30, 1999 pro forma balance sheets of Tenneco and Packaging, and the related
notes thereto, that are included as Exhibits A and F, respectively, to the
Distribution Agreement. Such allocation may be adjusted by Tenneco in its sole
discretion at any time prior to the Distribution to ensure Tenneco and Packaging
are in compliance with their respective financing arrangements.

2. Tenneco shall in its discretion tender for, prepay or otherwise
refinance, or shall offer Packaging debt in exchange for or otherwise refinance,
one or more of the issues of Consolidated Debt (as defined below). Concurrently
with the Debt Realignment, Tenneco will, if in its discretion it deems such to
be advisable, solicit the consent of the holders of such Consolidated Debt to
certain aspects of the Debt Realignment. Tenneco reserves the right to determine
whether or not it tenders for, prepays, otherwise refinances or leaves
outstanding, or offers to exchange Packaging debt for or otherwise refinance,
any particular issue of Consolidated Debt. The term "CONSOLIDATED DEBT" means
the following obligations that are outstanding or have been accrued as of the
Distribution Date:

a. indebtedness for money borrowed, including accrued interest, of
Tenneco and its consolidated subsidiaries before the Distribution,
including public debt, short-term borrowings and bank debt, and borrowings
to fund a rabbi trust for actual and estimated transaction costs,
including, without limitation, the expenses listed on Schedule 1 to this
Exhibit;

b. to the extent not included in the computation of the cash funding
of a rabbi trust prior to the Distribution, the current and deferred
obligations under severance packages, SERP (other than the Tenneco Inc.
Pilots' Supplemental Retirement Plan) and deferred compensation for persons
who meet all of the following criteria:

(i) they are treated as active employees of TMC under the Human
Resources Agreement as of the Distribution Date;

(ii) liabilities with respect to them (other than the liabilities
under the Tenneco Retirement Plan) are allocated to the Packaging Group
under the Human Resources Agreement; and

(iii) they do not continue in the active employment of Packaging
Group (excluding TMC) or Automotive Group after the Distribution Date.

c. obligations in respect of the preferred stock issued by Tenneco
International Holding Corporation; and

d. the cost to purchase accounts receivable previously sold by Tenneco
or its consolidated subsidiaries.

3. Tenneco shall have the sole right and authority to have in place a
credit facility(ies) and/or other financing for itself (with such guarantees of
its obligations thereunder by the Automotive Subsidiaries as it deems necessary)
and for Packaging (with such guarantees of Packaging's obligations thereunder by
the

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Packaging Subsidiaries as it deems necessary in an aggregate principal amount
sufficient (together with other funds available to Tenneco) to fund such
tenders, prepayments and other refinancings and for other general corporate
purposes (including, without limitation, working capital). These facility(ies)
and/or other financings shall be in effect on or prior to the Distribution Date.

4. Accordingly, after giving effect to the Debt Realignment and the
Distribution, (i) Tenneco will be responsible for all of Tenneco Inc.'s public
debt that remains outstanding, any borrowings under its new credit facility(ies)
and/or other financing described above and any Consolidated Debt for which a
member of the Automotive Group is the primary obligor as of the Distribution
which remains outstanding and (ii) Packaging will be responsible for any public
debt of Packaging issued in exchange for Tenneco Inc.'s public debt, any
borrowings under its new credit facility(ies) and/or other financings described
above and any Consolidated Debt for which a member of the Packaging Group is the
primary obligor as of the Distribution which remains outstanding.

5. All aspects of (x) the Debt Realignment and any financing thereof and
(y) the terms of any consents solicited in respect of Consolidated Debt, shall
be controlled solely and exclusively by Tenneco. Tenneco shall select, in its
sole discretion, the dealer manager(s) for any and all consent solicitations,
debt tenders and debt exchanges in respect of Consolidated Debt.

6. Tenneco and Packaging shall comply with all applicable securities, blue
sky and other laws in connection with the Debt Realignment and the other
transactions contemplated hereunder.

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SCHEDULE 1

TRANSACTION COSTS

Transaction costs shall include the following fees, costs and expenses related
or attendant to the Corporate Restructuring Transactions, the Distribution and
the Debt Realignment incurred by Tenneco or Packaging or any member of its
respective Group, provided that such expenses either were or are incurred by or
with the approval of Tenneco Inc. headquarters personnel in Greenwich,
Connecticut or are for goods or services to be provided by entities that
provided goods or services in connection with or attendant to the Corporate
Restructuring Transactions, the Distribution or the Debt Realignment with the
approval of such personnel:

Accounting fees and expenses

Actuarial fees and expenses

Appraisal fees and expenses

Audit fees and expenses

Broker/dealer fees and expenses

Consulting fees and expenses

Costs to purchase "wrap-around" and run-off D&O and fiduciary insurance policies

Costs to transfer Tenneco Trade Names and Trademarks (but not expenses
associated with the Tenneco Packaging name change).

Exchange/paying agent fees and expenses

Exit consent fees

Fees and expenses incurred in connection with arranging revolving debt,
including commitment fees, drawdown fees, agent's fees, facility fees and
similar fees and expenses, and lender's costs and expenses payable by the
borrower

Filing fees, including SEC, NYSE, NASD, HSR and other similar fees

Information agent fees and expenses

Investment banking fees and expenses, dealer manager fees and expenses, and
similar fees and expenses

Fees and expenses with respect to legal matters and solvency opinions pertaining
to the transactions

Mailing expenses

Newspaper advertising costs

Printing fees and expenses

Proxy solicitation fees and expenses

Soliciting dealer fees and expenses

Rating Agency fees

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EXHIBIT E

FORM OF
HUMAN RESOURCES AGREEMENT

THIS HUMAN RESOURCES AGREEMENT is made and entered into as of this
day of , 19 , by, between and among TENNECO INC., a Delaware
corporation to be renamed Tenneco Automotive Inc. ("Tenneco" or "Automotive
Company"), and Tenneco Packaging Inc. (to be renamed), a Delaware corporation
("Packaging Company").

WHEREAS, pursuant to the terms of that certain Distribution Agreement by
and between Tenneco and Packaging Company and dated as of (the
"Distribution Agreement"), the parties have entered into this Agreement
regarding certain labor, employment, compensation and benefit matters occasioned
by the Distribution.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement and the Distribution Agreement, each of
the parties hereto, on behalf of itself and each other entity over which it has
direct or indirect legal or effective control, hereby agrees as follows:

SECTION 1. DEFINITIONS. The following terms, when capitalized herein, shall
have the meanings set forth below in this Section 1. All other capitalized terms
which are used but are not otherwise defined herein shall have the meanings
ascribed to them in the Distribution Agreement.

"Active Employees" means, with respect to each Group, all employees
regularly engaged in the performance of services to, for or on behalf of
any member of such Group as of the close of business on the Distribution
Date; provided, that all such employees of Tenneco Management Company
("TMC") who are employed by a member of the Automotive Group immediately
after the Distribution shall, for all purposes hereunder, be treated as
Active Employees of the Automotive Group and; provided further that for
purposes of allocation of liabilities, non-employee officers of Tenneco
Inc. shall be treated as Active Employees of TMC.

"Common Stock" means Tenneco Common Stock or Packaging Common Stock,
as applicable.

"Former Employees" means, with respect to each Group, all former
employees of Tenneco and/or its Subsidiaries (including, but not limited
to, such employees who, as of the close of business on the Distribution
Date, are on leave of absence, long-term disability or layoff with recall
rights) who, if they were regularly engaged in the performance of services
to, for or on behalf of Tenneco or any of its Subsidiaries at the close of
business on the Distribution Date, would be an Active Employee of such
Group, determined on a basis consistent with the determination of the
Active Employees of such Group.

"Tenneco Salaried Welfare Plans" means, collectively, the Tenneco Inc.
Health Care Plan, the Tenneco Inc. Group Life Insurance Plan, the Tenneco
Inc. Long Term Disability Plan, the Tenneco Inc. Travel Accident Insurance
Plan, the Tenneco Inc. Health Care Flexible Spending Account Program and
the Tenneco Inc. Dependent Day Care Flexible Spending Account Plan.

SECTION 2. GENERAL EMPLOYMENT MATTERS.

2.01 General Obligations. From and after the Distribution Date, each of
Automotive Company and Packaging Company shall (and shall, as applicable, cause
each of the other members of its respective Group over which it has direct or
indirect legal or effective control to) (a) continue the employment of all of
the Active Employees of its respective Group, subject, however to the terms of
Section 2.03 below and (b) except as otherwise specifically provided herein,
pay, perform and discharge any and all labor, employment, compensation and
benefit liabilities, whether arising prior to, on or after the Distribution
Date, with respect to all such Active Employees and all Former Employees of its
respective Group.

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Notwithstanding the foregoing, all payments to be made to Active Employees and
Former Employees of TMC who are not employed by the Automotive Group or the
Packaging Group (excluding TMC) immediately after the Distribution out of
general corporate assets shall be made, processed and administered by Tenneco
Business Services Inc. ("TBS") (rather than by Packaging Company or another
member of the Packaging Group). Packaging Group shall maintain one or more rabbi
trusts to facilitate such payments.

2.02 Initial Compensation of Active Employees. The initial compensation
(base salary or wage level) of each Active Employee of each such Group as of the
Distribution Date shall be the same as the compensation (base salary or wage
level) of such Active Employee immediately prior to the Distribution Date.

2.03 No Additional Employment Rights Created. Nothing in this Agreement
shall give any Active Employee of any Group any right to continued employment by
any member of that Group or the other Group beyond the Distribution Date, which
is in addition to or supplemental to any such right he or she may have arising
under contract or otherwise.

SECTION 3. COLLECTIVE BARGAINING.

3.01 Continuation of Existing Collective Bargaining Agreements. Each of
Automotive Company and Packaging Company shall (and shall cause, as applicable,
each other member of its Group over which it has direct or indirect legal or
effective control to) continue to honor all collective bargaining agreements
covering the Active Employees of its respective Group which are in effect as of
the close of business on the Distribution Date, in accordance with and subject
to the terms of each such collective bargaining agreement.

3.02 Recognition of Incumbent Labor Organizations. Each of Automotive
Company and Packaging Company shall (and shall cause, as applicable, each other
member of its Group over which it has direct or indirect legal or effective
control to) continue to recognize all incumbent labor organizations which, as of
the close of business on the Distribution Date, have established collective
bargaining relationships in respect of the Active Employees of its respective
Group.

3.03 Continued Sponsorship of Hourly Employee Benefit Plans. Except as
otherwise specifically provided herein, each of Automotive Company and Packaging
Company shall continue (and shall, as applicable, cause each other member of its
respective Group over which it has direct or indirect legal or effective control
to continue) to sponsor all employee benefit plans for hourly employees which,
as of the close of business on the Distribution Date, are in existence and
relate to the Active Employees and/or Former Employees of its respective Group,
subject to its rights under such plans to amend or terminate such plans.

3.04 Provisions of Wages, Rights and Other Employment Benefits Required
Under Existing Collective Bargaining Agreements. Without limiting the generality
of the foregoing, each of Automotive Company and Packaging Company shall (and
shall cause each other member of its respective Group over which it has direct
or indirect legal or effective control to) provide those of its Active Employees
whose employment is subject to collective bargaining agreements and/or
established collective bargaining relationships as of the close of business on
the Distribution Date with the wages, benefits, and terms and conditions of
employment required by such agreements or relationships, except that (i)
participation in the Tenneco Inc. Employee Stock Purchase Plan will be suspended
as provided in Section 4.06 hereof, and (ii) the provisions of any defined
contribution plan calling for contributions or investment in the common stock of
Tenneco Inc. shall be amended in accordance with Section 4.05 hereof.

3.05 Limitation on Obligations. Each of the parties hereto hereby agrees
and acknowledges that nothing contained in this Agreement, including its
obligation to continue its applicable collective bargaining agreements or
relationships, shall be construed to restrict any right it, or any other member
of

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its respective Group, may have to terminate, renegotiate, reopen or otherwise
seek changes in any of its collective bargaining agreements or relationships.

SECTION 4. UNITED STATES SALARIED PENSION AND THRIFT BENEFITS AND STOCK
PURCHASE PLAN.

4.01 Tenneco Retirement Plan. Effective as of the Impact Date (as defined
below), Automotive Company and all other members of that Group shall cease to be
sponsors of the Tenneco Retirement Plan (the "TRP"), and Packaging Company shall
become the sponsor of the TRP; provided that Packaging's sponsorship shall be
subject to the terms and conditions of the TRP. The TRP shall retain liability
for all pension benefits accrued by the Active Employees and Former Employees of
the Automotive Group who are or were formerly participants in the TRP through
the last day of the calendar month in which the Distribution Date occurs (the
"Impact Date"). Following the Distribution Date, Automotive Group will have no
liability, contingent or otherwise, with respect to the TRP, including without
limitation any liability for benefits accrued through the Impact Date (including
early retirement benefits and related subsidies, as to which all age, service
and participation requirements were satisfied on or before the Impact Date) for
Active Employees or Former Employees of the Automotive Group, and Packaging
Company shall assume or retain, as the case may be, all such liabilities.

Packaging Company shall succeed Tenneco Inc. under and with respect to the
Tenneco General Employee Benefit Trust (the "GEBT"). As soon as practicable
after the Distribution Date, Packaging Company shall cause the GEBT to transfer
to a trustee designated by Automotive Company the assets of the GEBT
attributable to the Automotive Group's hourly defined benefit pension plans.
Such transfer shall be in cash, except that Tenneco Common Stock may be
transferred, subject to the limitations of applicable law, and the assets
managed by one of more managers may be transferred.

Packaging Company shall create an investment committee (the "New
Committee") to manage the assets of the GEBT, equivalent to the committee which
performed those functions as of the Distribution Date (the "Old Committee"), and
the New Committee shall have as members, the members of the Old Committee as of
the Distribution Date until the earlier of March 31, 2000 or the date such
persons die, resign or are removed in accordance with rules equivalent to the
rules applicable to the Old Committee.

4.02 Amendment of TRP. The sponsor of the TRP shall amend the TRP to (a)
"freeze" the benefit accruals of the Active Employees of the Automotive Group as
of the Impact Date, and (b) provide that all benefits accrued as of the Impact
Date by the Active Employees of the Automotive Group shall be fully vested and
non-forfeitable (as will the benefits to Former Employees of the Automotive
Group to the extent required by applicable laws) and the sponsor shall inform,
in writing, as soon as practicable following the Impact Date, each such Employee
of his or her accrued benefits under the TRP as of the Impact Date.

4.03 No Credit for Post-Impact Date Service. Except as may be required by
law, the TRP shall not be required to count service with any entity other than a
member of the Packaging Group after the Impact Date for any purpose, nor shall
there be any requirement that Active Employees of the Automotive Group be
permitted to "grow into" normal or early retirement benefits under the TRP based
upon events occurring after the Impact Date.

4.04 Tenneco Thrift Plan. The active participation in the Tenneco Thrift
Plan and the Tenneco Thrift Plan for Hourly Employees (collectively the "Tenneco
DC Plan") by persons other than the Active Employees of the Packaging Group
shall cease effective as of January 31, 2000 (the "Transition Date"). In
addition, Automotive Company and all other members of that Group shall cease to
be sponsors of the Tenneco DC Plan as of the Transition Date, and Packaging
Company shall become the sponsor of the Tenneco DC Plan from and after the
Transition Date. Automotive Group shall bear the costs of employer matching
contributions attributable to the participation of its employees in the Tenneco
DC Plan for the period commencing with the Distribution Date.

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4.05 Establishment of DC Plans.

(a) Automotive Thrift Plan. Automotive Company shall (and/or cause its
respective Group members to) establish or make available on or with effect
from the Transition Date, one or more defined contribution plans for the
benefit of its Active Employees (collectively, the "Automotive Thrift
Plan") which may, subject to Section 4.05(d) hereof, be subject to
amendment or termination by Automotive Company or the applicable member of
the Automotive Group.

(b) Transfer of Account Balances to Automotive Thrift Plan. As soon as
practicable following the Transition Date, Packaging Company shall cause
the Tenneco DC Plan to transfer to the Automotive Thrift Plan, the account
balances of each Active Employee of the Automotive Group and each Former
Employee of the Automotive Group with respect to whom the Tenneco DC Plan
maintains an account as of the close of business on the Transition Date.
Such transfers shall be in cash, except that the Automotive Thrift Plan
will accept the following: (i) Tenneco Common Stock, Packaging Common Stock
received in the Distribution, stock of Newport News Shipbuilding Inc. (if
any remains in such account balances) and stock of El Paso Energy
Corporation (if any remains in such account balances) for the Tenneco
Common Stock fund portion of such account balances; (ii) amounts credited
to the Tenneco DC Plan which are held in mutual funds which are also
investment media in the Automotive Thrift Plan; and (iii) participant
loans.

(c) Investment Options. Tenneco Common Stock shall not be offered as
an investment option with respect to contributions made after the
Distribution Date by the Packaging Group employees to the thrift plans of
the Packaging Group. The sponsor of each of the Tenneco DC Plan and the
Automotive Thrift Plan shall cause the plan to afford each participant
therein, for a period of at least 90 days following the Distribution Date,
an election to sell the Common Stock of the entities held in the plan's
stock fund which does not directly or indirectly employ him or her
immediately following the Distribution Date. From and after the
Distribution Date employer stock contributions with respect to Packaging
Group employees shall be in Packaging Common Stock and employer stock
contributions with respect to the Automotive Group employees shall be in
Tenneco Common Stock.

(d) Certain Automotive Obligations. The Automotive Company shall (and
shall cause each member of its Group over which it has legal or effective
direct or indirect control to) sponsor, establish, administer, maintain,
amend and otherwise deal with one or more defined contribution pension
plans (including the Automotive Thrift Plan) in a manner consistent with
any and all representations which Tenneco or its affiliates at the time
makes or has made to the Internal Revenue Service, including without
limitation, any actions that may be required to increase and/or maintain
the amount of Tenneco Common Stock held by such plans.

4.06 Tenneco Stock Purchase Plan. Participation in the Tenneco Inc.
Employee Stock Purchase Plan will be suspended effective June 30, 1999 and will
not resume prior to the Distribution Date.

SECTION 5. PENSION MATTERS OUTSIDE THE UNITED STATES. With respect to the
business and operations of each Group in jurisdictions outside the United
States, each of the parties hereto shall (and, as applicable, shall cause each
other member of its Group over which it has direct or indirect legal or
effective control to) assume and retain any and all pension liabilities and
attendant plans and their assets related to its Active Employees and Former
Employees.

SECTION 6. EXECUTIVE AND DIRECTORS' COMPENSATION.

6.01 Tenneco Supplemental Executive Retirement Plan. Effective upon the
Distribution Date, Tenneco and Packaging Company shall cause the Tenneco Inc.
Supplemental Executive Retirement Plan and the Tenneco Inc. Pilots' Supplemental
Retirement Plan (collectively, the "SERP") to be amended to cause the separation
of participation in, and liabilities under, the SERP as follows: (1) Packaging
Company shall (a) become the sponsor of the SERP with respect to all Active
Employees and Former Employees of its respective Group and, subject to the terms
of the 1996 Benefits Agreement (as defined

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below), all active and former employees of the Shipbuilding Group and Energy
Group (each as defined below), and all other participants in the SERP not
specifically allocated to Automotive Company below and (b) assume and agree to
pay, perform and discharge all liabilities under the SERP with respect to such
employees, whether accrued before, on or after the Distribution Date; and (2)
Automotive Company shall continue sponsorship of the SERP with respect to all
Active Employees and Former Employees of its respective Group and shall assume
and agree to pay, perform and discharge all liabilities under the SERP with
respect to such employees, whether accrued before, on or after the Distribution
Date. All accrued benefits under the SERP as of the close of business on the
Distribution Date shall be fully vested and nonforfeitable; provided, that this
rule shall not be applied to grant an employee an amount equal to the benefit he
or she has accrued under the Tenneco Retirement Plan but only the amount
provided by the SERP, nor shall it be applied to alter or diminish any service
requirement contained in any special appendix or other document providing
benefits in addition to those called for by the SERP generally.

6.01A Pullman Supplemental Pension Benefits. Notwithstanding any other
provision hereof, the Automotive Company shall retain and succeed to any and all
liabilities for non-qualified defined benefit pension benefits for Active
Employees and Former Employees of its respective Group who were formerly
employed by The Pullman Company, Peabody International Corporation or any
predecessor of either, including without limitation, benefits under the Peabody
Special Benefits Plan, the Peabody Supplemental Plan and the Pullman
Supplemental Plan (the "Pullman Plans"). Automotive Company shall retain
sponsorship of the rabbi trust created in connection with the Pullman Plans.

6.02 Tenneco Inc. Deferred Compensation Plan. The participation of the
Active Employees and Former Employees of the Automotive Group in the Tenneco
Inc. Deferred Compensation Plan (the "DC Plan") shall cease as of the
Distribution Date. As of the Distribution Date, (i) Automotive Company shall
assume the liability for the accounts of its Active Employees and Former
Employees in the DC Plan, (ii) Packaging Company shall assume the liability for
the accounts of the Active Employees and Former Employees of the Packaging Group
in the DC Plan, and (iii) Packaging Company shall succeed to sponsorship of the
DC Plan. The Automotive Group Active Employee's or Former Employee's account in
the DC Plan as of the Distribution Date shall become the opening balance of such
Active Employee's or Former Employee's account in a nonqualified deferred
compensation plan created, as of the Distribution Date by the Automotive Group.
Such opening balances shall become fully vested as of the close of business on
the Distribution Date.

6.03 Tenneco Benefits Protection Program and Rabbi Trust. The Tenneco Inc.
Benefits Protection Trust (the "BPT") and the Tenneco Inc. Rabbi Trust
(collectively the "Trusts") shall be terminated prior to the Distribution, and
neither Packaging Company nor Automotive Company shall have any liability with
respect to either of the Trusts or any of the terms of either.

6.04 [RESERVED]

6.05 Stock Options. Effective as of the Distribution Date, Tenneco shall
cause all outstanding options to purchase Tenneco Common Stock held by employees
and officers other than (i) Active Employees and Former Employees of Automotive
Group, (ii) employees of Packaging Corporation of America and (iii) employees of
the folding carton division (or persons who have succeeded to the rights of any
persons described in (i), (ii) or (iii) with respect to options to purchase
Tenneco Common Stock) to be replaced by options to purchase Packaging Common
Stock. Subject to the requirements of applicable law and generally accepted
accounting principles, the number, exercise price and other terms of such
replacement options shall be determined in a manner consistent with that
described in Exhibit A attached hereto. Options held by persons described in
clause (ii) or (iii) above, not exercised prior to the Distribution Date shall
be canceled effective as of the Distribution Date.

Options held by Active Employees and Former Employees of Automotive Group
(or persons who have succeeded to the rights of such persons) shall, unless
exercised prior to the Distribution Date, remain outstanding as adjusted as
provided herein after the Distribution Date, subject to the requirements of

TENNECO DISTRIBUTION AGREEMENT

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applicable law and generally accepted accounting principles. The parties
recognize that in some jurisdictions, Automotive employees were granted rights
other than stock options in lieu of the Special Stock Option Award of 100
options per grantee, and in those jurisdictions, the outstanding rights will be
adjusted comparably. The Automotive Company options and rights shall have the
same terms and conditions as prior to the Distribution Date except that the
number of options and the option exercise price shall be adjusted as described
in Exhibit A attached hereto.

To the extent that the exercisability of options to purchase Tenneco Common
Stock currently is subject to the attainment of share price hurdles, those
hurdles will also be adjusted with respect to both options to purchase Packaging
Common Stock and Tenneco Common Stock.

Tenneco may grant special pre-Distribution Date exercisability with respect
to some or all options which are not otherwise exercisable.

6.06 Directors. Except for stock options which will expire at the
Distribution in accordance with their terms, stock options held by directors of
Tenneco and/or Packaging Company shall be treated as provided in Section 6.05
hereof as if the director in question were an employee. Notwithstanding the
foregoing, stock options held by directors who do not continue on the board of
Packaging Company or Automotive Company will be replaced by Packaging Company
options in accordance with Section 6.05 hereof. The 1997 Tenneco Inc. Board of
Directors Deferred Compensation Plan shall be treated as provided in Section
6.02 hereof, and the directors' accounts shall be treated as if the directors
were employees; however, the accounts of directors who do not continue on the
board of Packaging Company or Automotive Company shall be the obligation of
Packaging Company. If an individual becomes a director of both Packaging Company
and Automotive Company immediately after the Distribution Date, his or her
options, unless they expire at the Distribution, shall be split and maintained
one-half by Packaging Company and one-half by Automotive Company; and with
respect to individuals who were outside directors prior to the Distribution
Date, their deferred compensation accounts shall be split similarly.

Any continuing liabilities under the terminated Outside Directors'
Retirement Plan including the obligation to grant restricted stock in lieu of
such plan shall be retained and performed by Automotive Company.

SECTION 7. WELFARE PLANS.

7.01 Tenneco Salaried Welfare Plans. Effective on December 31, 1999, each
member of the Automotive Group shall cease to be a sponsor of the Tenneco
Salaried Welfare Plans, Active Employees and Former Employees of Automotive
Group shall cease to participate in the Tenneco Salaried Welfare Plans as of
that date, and Packaging Company shall serve as the sponsor of the Tenneco
Salaried Welfare Plans from and after that date. Automotive Company shall
reimburse Packaging Company for all claims paid with respect to the
participation of its employees in such plans.

SECTION 8. GENERAL.

8.01 Post-Distribution Administration of Plans. The parties hereto agree
to administer all plans consistently herewith, and to the extent necessary to
amend plans accordingly.

8.02 Cost and Expenses. Except as otherwise expressly provided herein,
each party shall bear all costs and expenses, including but not limited to
legal, administrative and actuarial fees, incurred in the design, drafting,
administration and implementation of any and all plans and compensation
structures which it enables or creates and the amendment of its existing plans
or compensation structures.

8.03 Reserved

8.04 Human Resources Support Services. Subject to the rules set forth
below, Packaging Company shall provide (or have provided by TBS or otherwise to)
Automotive Company or its Affiliates the

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following corporate-wide human resource support services that are currently
being provided to the Automotive Company and/or members of the Automotive Group:

a. Benefits administration by Xxxxxx & Associates LLC and other
outside administrators. Packaging Company will provide management of the
services that are outsourced and continue benefits administration services
currently being provided by TBS.

b. Assistance in executive compensation plans, including stock
options, restricted stock, performance shares, deferred compensation,
director's stock options, and director's restricted stock.

c. Generation of EEO reports.

d. Packaging Company will prepare, process and disburse invoices and
check requests for Prudential relocations or cause such services to be
provided.

Packaging Company shall provide the services described in this Section 8.04
for the period from the Distribution Date through the earlier of (i) December
31, 2000 and (ii) the date as of which Automotive Company no longer desires such
services, provided that Automotive Company shall have given Packaging Company at
least 60 days' advance written notice of such date.

In consideration for such services, other than third party fees as
described in the next sentence, Automotive Company shall pay Packaging Company
per . Any third party fees for such services for
outsourced providers utilized with respect to the Automotive Group as of the
date hereof, or for new outsourced providers selected with prior consent of
Automotive Company (which consent shall not be unreasonably withheld or
delayed), will be billed directly by the third party to Automotive Company;
provided, that if the third party refuses to xxxx Automotive Company directly,
Automotive Company shall reimburse Packaging Group for all amounts which it pays
such third party on behalf of Automotive Company. Reference is made to the
Transition Services Agreement between Tenneco and Packaging Company of even date
herewith (the "Transition Services Agreement"). The services described in this
Section 8.04 shall be considered Packaging Services (as such term is defined in
the Transition Services Agreement) for purposes of Sections 2.3, 3, 4, 5 and 7
of the Transition Services Agreement and shall be provided in accordance with
and subject to the terms and conditions thereof. The provisions of Sections 4.2,
4.3, 4.4 and 7 of the Transition Services Agreement shall survive termination of
the provision of services hereunder.

SECTION 9. MISCELLANEOUS.

9.01 1996 Benefits Agreement. Effective on the Distribution Date, Tenneco
shall assign to Packaging Company all of its rights under, and Packaging Company
shall assume and agree to pay, perform and discharge when due (and will
thereafter indemnify each member of the Automotive Group against) all
obligations, liabilities and responsibilities of Industrial Company under, the
certain Benefits Agreement (the "1996 Benefits Agreement"), dated as of December
11, 1996, by and among New Tenneco Inc., Newport News Shipbuilding Inc. and the
company then known as Tenneco Inc. The rights Tenneco shall assign to Packaging
Company under the 1996 Benefits Agreement shall include, without limitation, the
right to receive and retain all reimbursements for the payment of SERP benefits
to employees and former employees of the Shipbuilding Group and Energy Group
(capitalized terms used in this Section 9.01 and in Section 6.01 and not
otherwise defined in this Agreement shall have the meanings ascribed to such
terms in the 1996 Benefits Agreement).

9.02 Complete Agreement; Construction. This Agreement and the Distribution
Agreement shall constitute the entire agreement between the parties with respect
to the subject matter hereof and shall supersede all previous negotiations,
commitments and writings with respect to such subject matter. Notwithstanding
any other provisions in this Agreement or the Distribution Agreement to the
contrary, in the event and to the extent that there shall be a conflict between
the provisions of this Agreement and the provisions of the Distribution
Agreement or any other Ancillary Agreement, this Agreement shall control.

TENNECO DISTRIBUTION AGREEMENT

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9.03 Other Ancillary Agreements. This Agreement is not intended to
address, and should not be interpreted to address, the matters specifically and
expressly covered by any of the other Ancillary Agreements.

9.04 Counterparts. This Agreement may be executed in one or more counter
parts, all of which shall be considered one and the same agreement, and shall
become effective when one or more such counterparts have been signed by each of
the parties and delivered to the other parties.

9.05 Survival of Agreements. Except as otherwise expressly provided
herein, all covenants and agreements of the parties contained in this Agreement
shall survive the Distribution Date.

9.06 Notices. All notices and other communications to a party hereunder
shall be in writing and hand delivered or mailed by registered or certified mail
(return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to such party (and
will be deemed given on the date on which the notice is received by such party)
at the address for such party set forth in the Distribution Agreement (or at
such other address for the party as the party shall, from time to time, specify
by like notice to the other parties).

9.07 Waivers. The failure of any party hereto to require strict
performance by any other party of any provision in this Agreement will not waive
or diminish the party's right to demand strict performance thereafter of that or
any other provision hereof.

9.08 Amendments. This Agreement may not be modified or amended except by
an agreement in writing signed by the parties hereto.

9.09 Assignment. This Agreement shall be assignable in whole in connection
with a merger or consolidation or the sale of all or substantially all the
assets of a party hereto so long as the resulting, surviving or transferee
entity assumes all the obligations of the relevant party hereto by operation of
law or pursuant to an agreement in form and substance reasonably satisfactory to
the other parties to this Agreement. Otherwise this Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any party hereto
without the prior written consent of the other (which consent shall not be
unreasonably withheld or delayed), and any attempt to assign any rights or
obligations arising under this Agreement without such consent shall be void.

9.10 Successors and Assigns. The provisions of this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective permitted successors and permitted assigns.

9.11 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and the members of their respective Groups, after
giving effect to the Distribution, and should not be deemed to confer upon other
third parties any remedy, claim, liability, right of reimbursement, claim of
action or other right in excess of those existing without reference to this
Agreement.

9.12 Attorney Fees. A party determined to be in breach of this Agreement
shall, on demand, indemnify and hold harmless the other party hereto for and
against all out-of-pocket expenses, including, without limitation, reasonable
legal fees, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement; provided, that such determination
shall be effective only when made by the court having final jurisdiction of the
matter and the period for appeal from that court, if any, shall have expired.
The payment of such expenses is in addition to any other relief to which such
other party may be entitled hereunder or otherwise.

9.13 Title and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.

TENNECO DISTRIBUTION AGREEMENT

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9.14 Governing Law. All questions and/or disputes concerning the
construction, validity and interpretation of this agreement and the exhibits
hereto shall be governed by the internal laws, and not the law of conflicts, of
the State of Delaware. Each of the parties to this agreement hereby irrevocably
and unconditionally (i) AGREES TO BE SUBJECT TO, AND HEREBY CONSENTS AND SUBMITS
TO, THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND THE FEDERAL
COURTS SITTING IN THE STATE OF DELAWARE, (ii) TO THE EXTENT SUCH PARTY IS NOT
OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF DELAWARE, HEREBY
APPOINTS THE CORPORATION TRUST COMPANY, AS SUCH PARTY'S AGENT IN THE STATE OF
DELAWARE FOR ACCEPTANCE OF LEGAL PROCESS AND (iii) AGREES THAT SERVICE MADE ON
ANY SUCH AGENT SET FORTH IN (ii) ABOVE SHALL HAVE THE SAME LEGAL FORCE AND
EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE STATE OF DELAWARE.

9.15 Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

9.16 Subsidiaries. Each of the parties hereto shall cause to be performed,
and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such party
which is contemplated to be a Subsidiary of such party on and after the
Distribution Date.

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

TENNECO INC.

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

Name:

Title:

TENNECO PACKAGING INC. (to be
renamed)

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

Name:

Title:

TENNECO DISTRIBUTION AGREEMENT

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EXHIBIT A

OPTION CONVERSION FORMULA*/

FORMULA

Original option exercise price New market price of Tenneco
-------------------------------- X Common Stock or Packaging = New option exercise price
Original market price of Tenneco Common Stock, as applicable***/ ("New Option Price")
Common Stock**/

No. of shares underlying original option X original option
exercise price Number of shares
------------------------------------------------------------ = underlying new option
New Option Price

ASSUME

No. of shares Tenneco Common Stock underlying original
1,000 option
$45.31 Original option exercise price
$25.00 Original market price of Tenneco Common Stock
$ 7.00 New market price for Tenneco Common Stock
$18.00 New market price for Packaging Common Stock

ADJUSTED TENNECO OPTIONS (for Automotive Group employees)

$45.31
------ X $7.00 = $12.69 New Option Price
$25.00

1,000 X $45.31
-------------- = 3,571 shares Tenneco Common Stock
$12.69 underlying new option

NEW PACKAGING COMPANY OPTIONS (for Packaging Group employees)

$45.31
------ X $18.00 = $32.62 New Option Price
$25.00

1,000 X $45.31
-------------- = 1,389 shares Packaging Common Stock
$32.62 underlying new option

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

*/ May be adjusted, as necessary, to reflect a reverse stock split by Tenneco
which becomes effective after the Distribution.

**/ Based on the closing sale price of the "full value" Tenneco Common Stock
(i.e. not giving effect to the declaration of any dividend) on the New York
Stock Exchange ("NYSE") on the day immediately prior to the Distribution
Date.

***/ For the new market price of Tenneco Common Stock: Based on the closing sale
price of Tenneco Common Stock "without due bills" on the day immediately
prior to the Distribution Date, unless "when issued" trading for Tenneco
Automotive Inc. Common Stock exists on such date, in which case the new
market price of the Tenneco Common Stock would be based on the closing
"when issued" market sale price of Tenneco Automotive Inc. Common Stock on
such date. For the new market price of Packaging Common Stock: Based on the
closing "when issued" market sale price of Packaging Common Stock on the
day immediately prior to the Distribution Date, as applicable.

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NEW PACKAGING COMPANY OPTIONS (for Packaging Group employees)

$45.31
------ X $18.00 = $32.62 New Option Price
$25.00

1,000 X $45.31
-------------- = 1,389 shares Packaging Common Stock
$32.62 underlying new option

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EXHIBIT F

PACKAGING

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

JUNE 30, 1999

(IN MILLIONS)

ASSETS

PRO FORMA ADJUSTMENTS
---------------------------- PACKAGING
SPIN-OFF PRO
PACKAGING DEBT AND RELATED FORMA
HISTORICAL REALIGNMENT TRANSACTIONS COMBINED
---------- ----------- ------------ ---------

Current assets:
Cash and temporary cash investments...... $ 18 $ -- $ -- $ 18
Receivables.............................. 375 -- 119(b) 494
Inventories.............................. 447 -- -- 447
Prepayments and other.................... 72 -- -- 72
------ ----- ------- ------
Total current assets............. 912 -- 119 1,031
Plant, property, and equipment, net........ 1,495 -- -- 1,495
Goodwill and intangibles, net.............. 1,028 -- -- 1,028
Other assets and deferred charges.......... 918 59(a) 85(c) 1,062
Net assets of discontinued operations...... 133 -- -- 133
------ ----- ------- ------
Total assets..................... $4,486 $ 59 $ 204 $4,749
====== ===== ======= ======

LIABILITIES AND EQUITY

Current liabilities:
Short-term debt.......................... $ 367 $ 829(a) $ -- $1,196(e)
Trade payables........................... 357 -- -- 357
Other current liabilities................ 336 -- -- 336
------ ----- ------- ------
Total current liabilities........ 1,060 829 -- 1,889
Long-term debt............................. 1,494 (494)(a) -- 1,000(e)
Deferred income taxes...................... 380 (52)(a) 34(c) 362
Other liabilities and deferred credits..... 198 -- -- 198
Minority interest.......................... 14 -- -- 14
Equity:
Combined equity.......................... 1,340 (224)(a) 119(b) --
51(c)
(1,286)(d)
Common stock............................. -- -- 2(d) 2
Paid-in capital.......................... -- -- 1,284(d) 1,284
Retained earnings........................ -- -- --(d) --
------ ----- ------- ------
Total liabilities and equity..... $4,486 $ 59 $ 204 $4,749
====== ===== ======= ======

See the accompanying Notes to Unaudited Pro Forma Combined Balance Sheet.

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PACKAGING

NOTES TO UNAUDITED PRO FORMA

COMBINED BALANCE SHEET

(a) To reflect debt allocated to Packaging in the debt realignment. The
adjustment to equity reflects the net impact of the debt realignment, the
recording of debt issue costs and deferred income taxes related to the exchange
offers and other transaction costs. Pro forma long-term debt includes $980
million of new securities ($ million aggregate principal amount) assumed to be
exchanged in the exchange offers, and $20 million of long-term debt of Packaging
subsidiaries. Pro forma short-term debt includes $1,187 million borrowed under
Packaging's new credit facilities to be entered into as part of this debt
realignment and $9 million of short-term debt of Packaging subsidiaries. At this
time, Packaging and Tenneco cannot determine the ultimate amount of the original
securities which will be exchanged into new securities, and this amount could
vary significantly. These pro forma adjustments assume that 100% of the original
securities subject to the exchange offers will be tendered before the early
exchange time and exchanged for the new securities and the new securities will
be recorded at the net carrying amount of the original securities (in other
words, the new securities are assumed not to be "substantially different." See
the section titled "Accounting Treatment of the Exchange Offers" contained in
Tenneco Packaging Inc.'s Registration Statement on Form S-4, File No.
333-82923). The results of the exchange offers could vary based on a number of
factors, including the timing and level of acceptance of the exchange offers,
the interest rate of the exchanged securities and whether the exchanges will be
considered extinguishments for accounting purposes. Based on current interest
rate markets, Packaging expects that the exchange offers will not be
extinguishments for accounting purposes. Therefore, Packaging does not expect to
recognize an extraordinary loss attributable to the debt exchange. Other costs,
including transaction costs related to the spin-off and contractual employment
obligations, are expected to be incurred by Packaging in connection with the
corporate restructuring transactions and the spin-off which Packaging estimates
will be approximately $70 million after-tax. The effects on Packaging's debt of
these costs has been reflected in this pro forma adjustment. However, these
charges have not been included in the unaudited pro forma combined statement of
income. See the section titled "Unaudited Pro Forma Combined Financial
Statements of Packaging" contained in Tenneco Packaging Inc.'s Registration
Statement on Form S-4, File No. 333-82923.

(b) To reflect the purchase of Packaging accounts receivable at fair value
which had previously been sold to a third party.

(c) To reflect the transfer to Packaging of prepaid pension costs
attributable to Automotive employees and the corresponding reduction in net
periodic pension costs and the increase in prepaid pension cost attributable to
the curtailment of the pension benefits related to Automotive employees.
Automotive employees will no longer participate in the Tenneco Retirement Plan
following the spin-off and Packaging will become the sponsor of this plan. These
prepaid pension costs will be transferred to Packaging in connection with the
corporate restructuring transactions. Packaging estimates that a curtailment
gain of approximately $30 million will be recognized relating to the freezing of
Automotive employees' pension benefits in connection with the spin-off. This
gain has not been included in the unaudited pro forma combined statements of
income.

(d) To reflect the spin-off of Packaging common stock to holders of Tenneco
common stock at an exchange ratio of one share of Packaging common stock for
each share of Tenneco common stock.

(e) The Packaging pro forma debt balances do not give effect to the
application of any proceeds from the planned sale of Packaging's remaining
interest in Packaging's containerboard joint venture. Packaging expects the sale
to be completed before the spin-off, with the proceeds used to repay the Tenneco
debt that would otherwise be allocated to Packaging in the debt realignment. If
the sale occurs after the spin-off, the net proceeds will be used to retire
Packaging debt. In September 1999, the joint venture, Packaging Corporation of
America, filed a registration statement for Packaging to sell its interest in a

TENNECO DISTRIBUTION AGREEMENT

F-2
70

PACKAGING

NOTES TO UNAUDITED PRO FORMA

COMBINED BALANCE SHEET -- (CONTINUED)

registered public offering. Based on indications of value in that registration
statement, estimated net proceeds ranging from $525 million to $600 million are
anticipated to be received from the sale of Packaging's remaining interest in
its containerboard joint venture. For each $50 million of after-tax proceeds
received from the sale, pro forma interest expense would be reduced by
approximately $3 million on an annual basis and pro forma income from continuing
operations would be increased by approximately $2 million on an annual basis, or
$0.01 per diluted common share.

TENNECO DISTRIBUTION AGREEMENT

F-3
71

EXHIBIT G

PACKAGING SUBSIDIARIES

TENNECO PACKAGING INC. (DELAWARE)
A&E Plastics, Inc. (Delaware)............................. 100%
Aircal S.A. (France)...................................... 100
(Tenneco Packaging Inc. owns all shares except seven
which are held by its four directors and Tenneco
Protective Packaging Inc. and Tenneco Packaging
International Holdings Inc.)
Airpack Japan K.K. (Japan)................................ 100
Airpack Polska Sp.Z.O.O. (Poland)......................... 100
Airpack SPA (Italy)....................................... 98
(Tenneco Packaging Inc. owns 98%; Tenneco Packaging
International Holdings Inc. owns 2%)
Altapack SPA (Italy)................................... 100
Alupak, A.G. (Switzerland)................................ 100
Xxxxxx Finance Corporation (Delaware)..................... 000
Xxxxxxxx XXX Packaging Co., Ltd. (Peoples Republic of 50
China).................................................
(Tenneco Packaging Inc. owns 50%; and Dongguan Dong Ya
Color Printing & Packaging Factory, an unaffiliated
company, owns 50%)
EKCO Products, Inc. (Illinois)............................ 100
E-Z Por Corporation (Delaware)............................ 100
Glacier-Cor US Corporation (Delaware)..................... 100
Glacier-Cor US Holding Corporation (Delaware).......... 100
E. H. Carton Products -- Management Company Ltd. 50
(Israel)............................................
(Glacier-Cor US Holding Corporation owns 50%; and 2
non-affiliates owns 50%) Glacier-Cor 1995 L.P.
(Israel)............................................
(E.H. Carton Products -- Management Company Ltd.
owns 2%; Ha'Lakoach Ha'Xxxxxx Xx'Sheesheen
Ou'Xxxxx'xxx Ltd. owns 49%; and non-affiliates
own 49%)
Ha'Lakoach Ha'Xxxxxx Xx'Sheesheem Ou'Xxxxx'xxx Ltd. 99
(Israel)............................................
(Glacier-Cor US Holding Corporation owns 99%;
and Hexacomb Corporation owns 1%)
Glacier-Cor 1995 L.P. (Israel).................. 49
(Ha'Lakoach Ha'Xxxxxx Xx'Sheesheen Ou'Xxxxx'xxx
Ltd. owns 49%; non-affiliates own 49%; and E. H.
Carton Products -- Management Company Ltd. owns
2%)
Kinarot Pallet Ltd. (Israel)...................... 50
(Ha'Lakoach Ha'Xxxxxx owns 50%; and I.M.A.
Engineering, an Israeli company and a
non-affiliate, owns 50%
Yamaton Ltd. (Israel.............................. 33.3
(Ha'Lakoach Ha'Xxxxxx owns 33.3%; and
non-affiliates, Kibbutz Ein Hamifietz and
Kibbutz Ga'aton own 66.7%)
Hexacomb Corporation (Illinois)........................... 100
Ha'Lakoach Ha' Xxxxxx Xx' Sheesheem Ou' Xxxxx'xxx Ltd. 1
(Israel)..............................................
(Hexacomb Corporation owns 1%; and Glacier-Cor US
Holding Corporation owns 99%. Subsidiaries are
listed above.)

TENNECO DISTRIBUTION AGREEMENT

G-1
72

SUBSIDIARIES OF TENNECO PACKAGING INC.
SUBSIDIARIES OF HEXACOMB CORPORATION
Hexajapan Company, Ltd. (Japan)........................ 60%
(Hexacomb Corporation owns 60%; and non-affiliates
own 40%)
Kobusch Packaging Egypt Ltd. (Egypt)...................... 99.75
(Tenneco Packaging Inc. owns 99.75%; and Tenneco
Kobusch-Folien GmbH owns .25%)
Omni-Pac S.A.R.L. (France)................................ 97
(Tenneco Packaging Inc. owns 97%; and Tenneco Omni-Pac
GmbH & Co. KG Verpackungsmittel owns 3%)
Packaging Corporation of America (Delaware)............... 43.5
(Tenneco Packaging Inc. owns 43.5%; PCA Holdings LLC,
an unaffiliated limited liability company, owns 53.2%;
and PCA's management owns 3.3%)
American Cellulose Corporation (Delaware).............. 50
(Packaging Corporation of America owns 50%; and Xxxxx
X. Xxxxx, an unaffiliated individual, owns 50%)
Dahlonega Packaging Corporation (Delaware)............. 100
Xxxxx Container Corporation (Virginia)................. 000
XXX Xxxxx, Inc. (Delaware)............................. 000
XXX Xxxxxxxx Corporation (Delaware).................... 000
XXX Valdosta Corporation (Delaware).................... 000
XXX Box Company (Delaware)(1)............................. 100
PCA Romania Srl (Romania)................................. 50
(Tenneco Packaging Inc. owns 50%; and Kraftcorr Inc.,
an unaffiliated company, owns 50%)
PCA West Inc. (Delaware).................................. 100
Coast-Packaging Company (California General 50
Partnership)..........................................
(PCA West Inc. owns 50%, as General Partner; and X.
X. Xxxxx Sales Company, an unaffiliated company,
owns 50%, as General Partner)
Pressware International, Inc. (Delaware).................. 100
Revere Foil Containers, Inc. (Delaware)................... 100
Scriptoria N.V. (Belgium)................................. 99.6
(Tenneco Packaging Inc. owns approximately 99.6%;
Tenneco Packaging International Holdings Inc. owns 18
shares; and the remainder of the shares are held by
unknown third parties)
Sentinel GmbH Verpackungen (Germany)................... ,1
(Scriptoria N.V. owns ,1%; and Tenneco Packaging Inc.
owns .99%)
Sentinel GmbH Verpackungen (Germany)...................... 99
(Tenneco Packaging Inc. owns .99%; and Scriptoria N.V.
owns ,1%)

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

(1) In dissolution.

TENNECO DISTRIBUTION AGREEMENT

G-2
73

SUBSIDIARIES OF TENNECO PACKAGING INC
Sentinel Polyolefins, L.L.C............................... 50%
(Tenneco Packaging Inc. owns 50%; and Sentinel Products
Corp., an unaffiliated company and its principals, own
50%)
Suncor, Inc. (South Carolina)............................. 100
Tenneco AVI Acquisition Inc. (Delaware)................... 100
Tenneco Business Services Holdings Inc. (Delaware)........ 100
Tenneco Business Services Inc. (Delaware).............. 100
Tenneco CAP Acquisition Inc. (Delaware)(1)................ 100
Tenneco CPI Holding Company (Delaware).................... 100
Tenneco Forest Products GmbH (Germany).................... 000
XXX Xxxxxxxxx Xxxxxx S.L. (Spain)...................... 99
(Tenneco Forest Products GmbH owns 99%; and
Tenneco Omni-Pac Ekco Verpackungsmittel GmbH & Co.
KG owns 1%)
Tenneco International Business Development Limited 100
(Delaware).............................................
Ambassador Packaging (Ireland) Limited (Ireland)....... 100
Tenneco International Finance B.V. (Netherlands).......... 100
Tenneco Management Company (Delaware)..................... 100
Tenneco Management (Europe) Limited (United Kingdom)...... 100
Tenneco NHC Inc. (Nevada)................................. 100
Tenneco Packaging -- Chile Holdings Inc. (Delaware)....... 100
Tenneco Packaging -- Chile S.A. (Chile)................ 100
Tenneco Packaging de Mexico, S.A. de C.V. (Mexico)........ 0.01
(Tenneco Packaging Inc. owns 1 share; and Tenneco
Packaging International Holdings Inc. owns 499,999
shares)
Tenneco Packaging Deutschland Holdinggesellschaft mbH 100
(Germany)..............................................
Kobusch Folien Verwaltungsgesellschaft mbH (Germany)... 100
Tenneco Kobusch-Folien GmbH & Co. KG (Germany).... 100
(Tenneco Packaging Deutschland
Holdinggesellschaft mbH is the Limited Partner;
and Kobusch-Folien Verwaltungsgesellschaft mbH
is the General Partner)
Kobusch Packaging Egypt Ltd. (Egypt)............ 0.25
(Tenneco Kobusch-Folien GmbH & Co. KG owns
0.25%; and Tenneco Packaging Inc. owns 99.75%)
Nord-West Verpackung Verwaltungsgesellschaft mbH 100
(Germany).............................................
Tenneco Nord-West Verpackung GmbH & Co. KG 100
(Germany).........................................
(Tenneco Packaging Deutschland
Holdinggesellschaft mbH is the Limited Partner;
and Nord-West Verpackung
Verwaltungs-gesellschaft mbH is the General
Partner)
Nord-West Wohnungsbau GmbH (Germany)............ 100
Omni-Pac Ekco Verpackungsmittel Verwaltungsgesellschaft 100
mbH (Germany).........................................

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

(1) In dissolution.

TENNECO DISTRIBUTION AGREEMENT

G-3
74

SUBSIDIARIES OF TENNECO PACKAGING INC.
SUBSIDIARIES OF TENNECO PACKAGING DEUTSCHLAND
HOLDINGGESELLSCHAFT MBH
SUBSIDIARIES OF OMNI-PAC EKCO VERPACKUNGSMITTEL
VERWALTUNGSGESELLSCHAFT MBH
Tenneco Omni-Pac Ekco Verpackungsmittel GmbH & Co. KG 100%
(Germany)...........................................
(Tenneco Packaging Deutschland Holdinggesellschaft
mbH is the Limited Partner; and Omni-Pac Ekco
Verpackungsmittel Verwaltungsgesellschaft mbH is
the General Partner)
Omni-Pac Poland Sp. z.o.o. (Poland)............... 000
XXX Xxxxxxxxx Xxxxxx S.L. (Spain)................. 1
(Tenneco Omni-Pac Ekco Verpackungsmittel GmbH &
Co. KG owns 1%; and Tenneco Forest Products GmbH
owns 99%)
Omni-Pac Verpackungsmittel Verwaltungsgesellschaft 100
mbH.................................................
Tenneco Omni-Pac GmbH & Co. KG Verpackungsmittel 100
(Germany)...........................................
(Tenneco Packaging Deutschland Holdinggesellschaft
mbH is the Limited Partner; and Omni-Pac
Verpackungsmittel Verwaltungsgesellschaft mbH is
the General Partner)
Omni-Pac ApS (Denmark)............................ 100
Omni-Pac A.B. (Sweden)............................ 100
Omni-Pac S.A.R.L. (France)........................ 3
(Tenneco Omni-Pac GmbH & Co. KG
Verpackungsmittel owns 3%; and Tenneco Packaging
Inc. owns 97%)
Sengewald Verpackungen Verwaltungsgesellschaft mbH 100
(Germany)...........................................
Tenneco Sengewald Verpackungen GmbH & Co. KG 100
(Germany)...........................................
(Tenneco Packaging Deutschland Holdinggesellschaft
mbH is the Limited Partner; and Sengewald
Verpackung Verwaltungs-gesellschaft mbH is the
General Partner)
Sengewald Klinikprodukte Verpackungsmittel GmbH...... 100
Tenneco Sengewald Klinikprodukte GmbH & Co. KG 100
(Germany)...........................................
(Tenneco Packaging Deutschland Holdinggesellschaft
mbH is the Limited Partner; and Sengewald
Klinikprodukte Verwaltungs-gesellschaft mbH is the
General Partner)
Sengewald France S.A.R.L. (France)(1)............. 100
Tenneco Omni-Pac GmbH & Co. KG Verpackungsmittel 100
(Germany)...........................................
(Tenneco Packaging Deutschland Holdinggesellschaft
mbH is the Limited Partner; and Omni-Pac
Verpackungsmittel Verwaltungs-gesellschaft mbH is
the General Partner)
Tenneco Omni-Pac Ekco Verpackungsmittel GmbH & Co. KG 100
(Germany)...........................................
(Tenneco Packaging Deutschland Holdinggesellschaft
mbH is the Limited Partner; and Omni-Pac Ekco
Verpackungsmittel Verwaltungs-gesellschaft mbH is
the General Partner)

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

(1) In dissolution.

TENNECO DISTRIBUTION AGREEMENT

G-4
75

SUBSIDIARIES OF TENNECO PACKAGING INC.
SUBSIDIARIES OF TENNECO PACKAGING DEUTSCHLAND
HOLDINGGESELLSCHAFT MBH
Tenneco Sengewald Verpackungen GmbH & Co. KG 100%
(Germany).............................................
(Tenneco Packaging Deutschland Holdinggesellschaft
mbH is the Limited Partner; and Sengewald
Verpackung Verwaltungs-gesellschaft mbH is the
General Partner)
Tenneco Kobusch-Folien GmbH & Co. KG (Germany)......... 100
(Tenneco Packaging Deutschland Holdinggesellschaft
mbH is the Limited Partner; and Kobusch-Folien
Verwaltungsgesellschaft mbH is the General
Partner)
Tenneco Nord-West Verpackung GmbH & Co. KG (Germany)... 100
(Tenneco Packaging Deutschland Holdinggesellschaft
mbH is the Limited Partner; and Nord-West
Verpackung Verwaltungs-gesellschaft mbH is the
General Partner)
Tenneco Sengewald Klinikprodukte GmbH & Co. KG 100
(Germany).............................................
(Tenneco Packaging Deutschland Holdinggesellschaft
mbH is the Limited Partner; and Sengewald
Klinikprodukte Verwaltungs-gesellschaft mbH is the
General Partner)
Tenneco Packaging Europe B.V. (Netherlands)............... 100
Nederlandse Pillo-Pak Maatschappij B.V. 100
(Netherlands).........................................
Tenneco Packaging Hexacomb S.A. (Spain)................... 100
Tenneco Packaging Hungary Holdings Inc. (Delaware)........ 100
Tenneco Packaging Hungary Packaging Material Limited 100
(Hungary)(1)...........................................
Budafok Recycling Waste Paper Recovery Ltd. 63.8
(Hungary).............................................
(Tenneco Packaging Hungary Packaging Material
Limited owns 63.8%; and Asco Hungaria Kft., an
unaffiliated company, owns 36.2%)
Tenneco Packaging International Holdings Inc. 100
(Delaware).............................................
Airpack SPA (Italy).................................... 2
(Tenneco Packaging International Holdings Inc.
owns 2%; and Tenneco Packaging Inc. owns 98%)
Scriptoria N.V. (Belgium).............................. ,1
(Tenneco Packaging International Holdings Inc.
owns ,1% or 18 shares; Tenneco Packaging Inc. owns
approximately 99.6%; and the remainder of the shares
are held by unknown third parties)
Tenneco Packaging de Mexico, S.A. de C.V............... 99.99
(Tenneco Packaging International Holdings Inc.
owns 499,999 shares; and Tenneco Packaging Inc. owns
1 share)

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

(1) This company is commonly referred to as "Tenneco
Packaging Hungary Kft."

TENNECO DISTRIBUTION AGREEMENT

G-5
76

SUBSIDIARIES OF TENNECO PACKAGING INC.
SUBSIDIARIES OF TENNECO PACKAGING INTERNATIONAL HOLDINGS
INC
SUBSIDIARIES OF TENNECO PACKAGING DE MEXICO, S.A. DE
C.V.
Empaques Protectores Tenneco S.A. de C.V. (Mexico)... 40%
(Tenneco Packaging de Mexico, S.A. de C.V. owns
40%; non-affiliates own 60%)
Wellenfoam N.V. (Belgium).............................. ,1
(Tenneco Packaging International Holdings Inc. owns
,1% or 1 share; and Tenneco Packaging Inc. owns
99+%)
Tenneco Packaging Leasing Company (Delaware).............. 100
Tenneco Packaging RSA Company (Delaware).................. 100
Tenneco PPI Company (Delaware)............................ 100
Tenneco Protective Packaging Inc. (Delaware).............. 100
AVI Technologies, Inc. (Delaware)...................... 100
Tenneco Retail Receivables Company (Delaware)............. 100
Tenneco Rochester Acquisition Inc. (Delaware)(1).......... 100
Tenneco Romania Holdings Inc. (Delaware).................. 100
Tenneco Forest Products S.A. (Romania)................. 100
(Xxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Xxxxxx and
Xxxxx Xxxxxx, all of whom are affiliated, each hold
share(s) of this company)
Tenneco Windsor Box & Display, Inc. (Delaware)(2)......... 100
The Xxxxxxx Group, Ltd. (U.K.)............................ 100
Ambassador Packaging Ltd. (U.K.)....................... 100
Coastal Packaging Ltd. (U.K.)........................ 100
Prempack Limited (U.K.).............................. 100
R & H Xxxxxxxx (Sheffield) Ltd. (U.K.)............... 100
Xxxxxxx Packaging Limited (U.K.)....................... ,1
(The Xxxxxxx Group owns ,1% or 1 share; J&W Xxxxxxx
(Holdings) Ltd. owns 99.9%)
J&W Xxxxxxx (Holdings) Ltd. (U.K.)..................... 100
Xxxxxxx Packaging Limited (U.K.)..................... 99.9
(J&W Xxxxxxx (Holdings) Ltd. owns 99.9%; and The
Xxxxxxx Group owns ,1% or 1 share)
Jiffy Rugated Products Limited (U.K.)............. 99.9
(Xxxxxxx Packaging Limited owns 99.9%; and The
Xxxxxxx Group owns ,1% or 1 share)
J&W Xxxxxxx (Manchester) Limited (U.K.)........... 99.9
(Xxxxxxx Packaging Limited owns 99.9%; and The
Xxxxxxx Group owns ,1% or 1 share)

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

(1) In dissolution.

(2) In dissolution.

TENNECO DISTRIBUTION AGREEMENT

G-6
77

SUBSIDIARIES OF TENNECO PACKAGING INC.
SUBSIDIARIES OF THE XXXXXXX GROUP, LTD.
SUBSIDIARIES OF J&W XXXXXXX (HOLDINGS) LTD.
Jifcour (UK) Limited (U.K.).......................... 99.9%
(J&W Xxxxxxx (Holdings) Ltd. owns 99.9%; and The
Xxxxxxx Group, Ltd. owns ,1% or 1 share)
Jiffy Packaging Company Ltd. (U.K.).................. 99.9
(J&W Xxxxxxx (Holdings) Ltd. owns 99.9%; and The
Xxxxxxx Group, Ltd. owns ,1% or 1 share)
Pentland Packaging Limited (Scotland)................ 99.9
(J&W Xxxxxxx (Holdings) Ltd. owns 99.9%; and The
Xxxxxxx Group, Ltd. owns ,1% or 1 share)
J&W Xxxxxxx (Manchester) Limited (U.K.)................ ,1
(The Xxxxxxx Group, Ltd. owns ,1% or 1 share and
Xxxxxxx Packaging Limited owns 99.9%)
Jifcour (UK) Limited (U.K.)............................ ,1
(The Xxxxxxx Group, Ltd. owns ,1% or 1 share and J&W
Xxxxxxx (Holdings) Ltd. owns 99.9%)
Jiffy Packaging Company Ltd. (U.K.).................... ,1
(The Xxxxxxx Group, Ltd. owns ,1% or 1 share; and J&W
Xxxxxxx (Holdings) Ltd. owns 99.9%)
Jiffy Rugated Products Limited (U.K.).................. ,1
(The Xxxxxxx Group, Ltd. owns ,1% or 1 share; and
Xxxxxxx Packaging Limited owns 99.9%)
Omni-Pac U.K. Limited (United Kingdom)................. 100
Pentland Packaging Limited (Scotland).................. ,1
(The Xxxxxxx Group, Ltd. owns ,1% or 1 share; and J&W
Xxxxxxx (Holdings) Ltd. owns 99.9%)
Tenneco Packaging Limited (Scotland)................... 100
Alpha Products (Bristol) Limited (United Kingdom).... 100
Brucefield Plastics Limited (Scotland)............... 100
Polbeth Packaging (Corby) Limited (Scotland)......... 100
Tenneco Packaging (Caerphilly) Limited (United 100
Kingdom)............................................
Tenneco Packaging (Films) Limited (United Kingdom)... 100
Tenneco Packaging (Livingston) Limited (Scotland).... 100
Tenneco Packaging (Xxxxxxx) Limited (United 100
Kingdom)............................................
Tenneco Packaging (UK) Limited (United Kingdom)........ 100
The Corinth and Xxxxxx Railroad Company (Mississippi)..... 000
Xxxxxxxx Xxxxxxxx Xxxxxxxx Company (Florida)........... 100
798795 Ontario Limited (Ontario).......................... 100
Astro-Valcour, Ltd. (Ontario).......................... 100
Tenneco Packaging Canada Inc. (Ontario)................ 100
Tenneco Packaging -- Hexacomb Limited (Ontario)........ 100
Shearmat Structures Ltd. (Manitoba).................. 100

TENNECO DISTRIBUTION AGREEMENT

G-7
78

SUBSIDIARIES OF TENNECO PACKAGING INC.
Wellenfoam N.V. (Belgium)................................. 99.9%
(Tenneco Packaging Inc. owns 99.9%; and Tenneco
Packaging International Holdings Inc. owns ,1% or 1
share)
Wood Products Leasing Company (Delaware).................. 100
Zhejing Zhongbao Packaging (Peoples Republic of China).... 62.5
(Tenneco Packaging Inc. owns 62.5%; and non-affiliates
own 37.5%)

TENNECO DISTRIBUTION AGREEMENT

G-8
79

EXHIBIT H

FORM OF
TAX SHARING AGREEMENT

This Tax Sharing Agreement is entered into as of , 1999
by and between Tenneco Inc., a Delaware corporation, to be renamed Tenneco
Automotive Inc. ("Tenneco"), and , a Delaware corporation,
formerly known as Tenneco Packaging Inc. ("Packaging Company"). Tenneco and
Packaging Company are sometimes collectively referred to herein as the
"Companies." Capitalized terms used in this Agreement are defined in Section 1
below. Unless otherwise indicated, all "Section" references in this Agreement
are to sections of this Agreement.

RECITALS

WHEREAS, as of the date hereof, Tenneco is the common parent of an
affiliated group of corporations, including Packaging Company, which has elected
to file consolidated Federal income tax returns; and

WHEREAS, the Companies have entered into a Distribution Agreement setting
forth the corporate transactions pursuant to which Tenneco will distribute all
of the outstanding shares of common stock of Packaging Company to Tenneco
shareholders in a transaction intended to qualify as a tax-free distribution
under Section 355 of the Code; and

WHEREAS, as a result of the Distribution, Packaging Company and its
subsidiaries will cease to be members of the affiliated group of which Tenneco
is the common parent, effective as of the Distribution Date; and

WHEREAS, the Companies desire to provide for and agree upon the allocation
between the parties of liabilities for Taxes arising prior to, as a result of,
and subsequent to the transactions contemplated by the Distribution Agreement,
and to provide for and agree upon other matters relating to Taxes;

NOW THEREFORE, in consideration of the mutual agreements contained herein,
the Companies hereby agree as follows:

SECTION 1. DEFINITION OF TERMS. For purposes of this Agreement (including
the recitals hereof), the following terms have the following meanings:

"Accounting Cutoff Date" means, with respect to Packaging Company, any
date as of the end of which there is a closing of the financial accounting
records for such entity.

"Accounting Firm" shall have the meaning provided in Section 15.

"Adjustment Request" means any formal or informal claim or request
filed with any Tax Authority, or with any administrative agency or court,
for the adjustment, refund, or credit of Taxes, including (a) any amended
Tax Return claiming adjustment to the Taxes as reported on the Tax Return
or, if applicable, as previously adjusted, or (b) any claim for refund or
credit of Taxes previously paid.

"Affiliate" means any entity that directly or indirectly is
"controlled" by the person or entity in question. For purposes of this
Agreement, "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
person, whether through ownership of voting securities, by contract or
otherwise. Except as otherwise provided herein, the term Affiliate shall
refer to Affiliates of a person as determined immediately after the
Distribution.

"Agreement" shall mean this Tax Sharing Agreement.

TENNECO DISTRIBUTION AGREEMENT

H-1
80

"Available Other Group Carryback" shall have the meaning provided in
Section 4.07(c)(ii).

"Benchmark Income (Or Loss) Allocation" shall have the meaning
provided in Section 2.02(a)(ii).

"Benchmark 1997 Loss Carryforward Allocation" shall have the meaning
provided in Section 2.02(a)(iii).

"Benchmark 1998 Loss Carryforward Allocation" shall have the meaning
provided in Section 2.02(a)(iii).

"Benchmark Period" shall have the meaning provided in Section
2.02(a)(ii).

"Carryback" means any net operating loss, net capital loss, excess tax
credit, or other similar Tax item which may or must be carried from one Tax
Period to another Tax Period under the Code or other applicable Tax Law.

"Carryback Group" shall have the meaning provided in Section
4.07(c)(ii).

"Code" means the U.S. Internal Revenue Code of 1986, as amended, or
any successor law.

"Companies" means Tenneco and Packaging Company collectively, and
"Company" means any one of Tenneco or Packaging Company.

"Consolidated Or Combined Income Tax" means any Income Tax computed by
reference to the assets and activities of members of more than one Group.

"Consolidated Or Combined State Income Tax" means any State Income Tax
computed by reference to the assets and activities of members of more than
one Group.

"Consolidated Tax Liability" means, with respect to any Tenneco
Federal Consolidated Return, the "tax liability of the group" as that term
is used in Treasury Regulation Section 1.1552-1(a)(1) (including applicable
interest, additions to tax, additional amounts and penalties as provided in
the Code), provided, that such tax liability shall be treated as including
any alternative minimum tax liability under Code Section 55.

"Corporate Restructuring Transactions" shall have the meaning provided
in the Distribution Agreement.

"Debt Realignment" shall have the meaning provided in the Distribution
Agreement.

"Distribution Agreement" means the Distribution Agreement, dated as of
, 1999, between Tenneco and Packaging Company, as amended from
time to time, setting forth the corporate transactions required to effect
the distribution to Tenneco shareholders of all of the outstanding stock of
Packaging Company owned by Tenneco, and to which this Tax Sharing Agreement
is attached as an exhibit.

"Distribution Date" means the Distribution Date as that term is
defined in the Distribution Agreement.

"Distribution" shall have the meaning provided in the Distribution
Agreement.

"Estimated Tax Payments" shall have the meaning provided in Section
2.03(a)(ii)(B).

"Federal Income Tax" means any Tax imposed by Subtitle A (Income
Taxes) or F (Procedure and Administration) of the Code.

"Final Income Or Loss Allocation" shall have the meaning provided in
Section 2.02(a)(iv).

"Final 1997 Loss Carryforward Allocation" shall have the meaning
provided in Section 2.02(a)(v).

TENNECO DISTRIBUTION AGREEMENT

H-2
81

"Final 1998 Loss Carryforward Allocation" shall have the meaning
provided in Section 2.02(a)(v).

"Foreign Income Tax" means any Tax imposed by any foreign country or
any possession of the United States, or by any political subdivision of any
foreign country or United States possession, which is an income tax as
defined in Treasury Regulation Section 1.901-2.

"German Restructuring Transactions" shall have the meaning provided in
Section 2.04(b).

"Group" means the Tenneco Group and the Packaging Group, as the
context requires.

"Hypothetical State Tax Liability" shall have the meaning provided in
Section 2.03(a)(ii)(A).

"Income Tax" means any Federal Income Tax, State Income Tax, or
Foreign Income Tax.

"IRS Ruling Letter" shall have the meaning provided in the
Distribution Agreement.

"Joint Adjustment" means any proposed adjustment by a Tax Authority or
claim for refund asserted in a Tax Contest which is neither a Tenneco
Adjustment nor a Packaging Adjustment.

"Old Tenneco" shall have the meaning provided in Section 2.06(a)

"Other Group" shall have the meaning provided in Section 4.07(c)(ii).

"Packaging Adjustment" means any proposed adjustment by a Tax
Authority or claim for refund asserted in a Tax Contest to the extent
Packaging Company would be exclusively liable for any resulting Tax under
this Agreement and exclusively entitled to receive any resulting Tax
Benefit under this Agreement.

"Packaging Company" means , a Delaware corporation, formerly
known as Tenneco Packaging Inc., and any successor.

"Packaging Group" means Packaging Company and its Affiliates as
determined immediately after the Distribution, modified as provided in
Section 18.

"Packaging Group Prior State Tax Liability" shall have the meaning
provided in Section 2.03(b)(i)(B).

"Packaging Group Recomputed State Tax Liability" shall have the
meaning provided in Section 2.03(b)(i)(A).

"Payment Date" means (i) with respect to any Tenneco Federal
Consolidated Return, the due date for any required installment of estimated
taxes determined under Code Section 6655, the due date (determined without
regard to extensions) for filing the return determined under Code Section
6072, and the date the return is filed, and (ii) with respect to any Tax
Return for any Consolidated or Combined State Income Tax, the corresponding
dates determined under the applicable Tax Law.

"Post-Distribution Period" means any Tax Period beginning after the
Distribution Date, and, in the case of any Straddle Period, the portion of
such Straddle Period beginning the day after the Distribution Date.

"Post-Distribution State Income Tax Return" means any State Income Tax
Return for the Tax Period ended December 31, 1999.

"Pre-Distribution Period" means any Tax Period ending on or before the
Distribution Date, and, in the case of any Straddle Period, the portion of
such Straddle Period ending on the Distribution Date.

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"Prime Rate" means the base rate on corporate loans charged by
Citibank, N.A., New York, New York from time to time, compounded daily on
the basis of a year of 365 or 366 (as applicable) days and actual days
elapsed.

"Prior Intercompany Tax Allocation Agreements" means any written or
oral agreement or any other arrangements relating to allocation of Taxes
existing between or among the Tenneco Group and the Packaging Group as of
the Distribution Date (other than this Agreement and other than any such
agreement or arrangement between or among persons who are members of a
single Group).

"Prohibited Action" shall have the meaning provided in Section 11.

"Responsible Company" means, with respect to any Tax Return, the
Company having responsibility for preparing and filing such Tax Return
under this Agreement.

"Restructuring Tax" means the Taxes described in Sections 2.05(a)(i)
or 2.05(a)(ii) (relating to Tax resulting from any income or gain
recognized as a result of the Transactions but excluding any Transfer Taxes
described in Section 2.05).

"Ruling Request" means the letter filed by Tenneco with the Internal
Revenue Service dated April 30, 1999 requesting a ruling from the Internal
Revenue Service regarding certain Federal Income Tax consequences of the
Transactions (including all attachments, exhibits, and other materials
submitted with such ruling request letter) and any amendment or supplement
to such ruling request letter.

"Separate Company Tax" means any Tax computed by reference to the
assets and activities of a member or members of a single Group.

"Separate Company State Income Tax" means any State Income Tax that is
a Separate Company Tax.

"Straddle Period" means any Tax Period that begins on or before and
ends after the Distribution Date.

"State Income Tax" means any Tax imposed by any State of the United
States or by any political subdivision of any such State which is imposed
on or measured by net income, including state and local franchise or
similar Taxes measured by net income (including, without limitation, any
Tax which is measured by the higher of capital or net income (e.g., Ohio
Rev. Code Xxx. Title 57, Section 5733, Corporate Franchise Tax)).

"Tax" or "Taxes" means any income, gross income, gross receipts,
profits, capital stock, franchise, withholding, payroll, social security,
workers compensation, unemployment, disability, property, ad valorem,
stamp, excise, severance, occupation, service, sales, use, license, lease,
transfer, import, export, value added, alternative minimum, estimated or
other similar tax (including any fee, assessment, or other charge in the
nature of or in lieu of any tax) imposed by any governmental entity or
political subdivision thereof, and any interest, penalties, additions to
tax, or additional amounts in respect of the foregoing.

"Tax Authority" means, with respect to any Tax, the governmental
entity or political subdivision thereof that imposes such Tax, and the
agency (if any) charged with the collection of such Tax for such entity or
subdivision.

"Tax Benefit" means any refund, credit, or other reduction in
otherwise required Tax payments (including any reduction in estimated Tax
payments).

"Tax Contest" means an audit, review, examination, or any other
administrative or judicial proceeding with the purpose or effect of
redetermining Taxes of any of the Companies or their

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Affiliates (including any administrative or judicial review of any claim
for refund) for any Tax Period ending on or before the Distribution Date or
for any Straddle Period.

"Tax Contest Committee" shall have the meaning provided in Section
9.02(b).

"Tax Item" means, with respect to any Income Tax, any item of income,
gain, loss, deduction, and credit.

"Tax Law" means the law of any governmental entity or political
subdivision thereof relating to any Tax.

"Tax Period" means, with respect to any Tax, the period for which the
Tax is reported as provided under the Code or other applicable Tax Law.

"Tax Records" means Tax Returns, Tax Return work papers, documentation
relating to any Tax Contests, and any other books of account or records
required to be maintained under the Code or other applicable Tax Laws or
under any record retention agreement with any Tax Authority.

"Tax Return" means any report of Taxes due, any claims for refund of
Taxes paid, any information return with respect to Taxes, or any other
similar report, statement, declaration, or document required to be filed
under the Code or other Tax Law, including any attachments, exhibits, or
other materials submitted with any of the foregoing, and including any
amendments or supplements to any of the foregoing.

"Tenneco" means Tenneco Inc., a Delaware corporation, and any
successor.

"Tenneco Adjustment" means any proposed adjustment by a Tax Authority
or claim for refund asserted in a Tax Contest to the extent Tenneco would
be exclusively liable for any resulting Tax under this Agreement and
exclusively entitled to receive any resulting Tax Benefit under this
Agreement.

"Tenneco Affiliated Group" means the affiliated group (as that term is
defined in Code Section 1504) that includes Tenneco as the common parent
and includes any member of the Packaging Group.

"Tenneco Federal Consolidated Return" means any United States federal
Tax Return for the Tenneco Affiliated Group.

"Tenneco Group" means Tenneco and its Affiliates excluding any entity
that is a member of the Packaging Group.

"Transactions" means the transactions contemplated by the Distribution
Agreement (including the Corporate Restructuring Transactions, Debt
Realignment and Distribution, as defined in such agreement).

"Transfer Taxes" means all Taxes (other than Taxes imposed on income
or gains) incurred or imposed by reason of the sale, assignment or transfer
of title of the applicable property, regardless of upon whom such Taxes are
levied or imposed by the applicable Tax Law, including sales, use, value-
added, excise, stock transfer, real estate transfer, lease assignment,
transfer gains tax, stamp, documentary, filing, recording, permit, license,
authorization, intangible and similar Taxes.

"True-Up Amount" shall have the meaning provided in Section
2.02(a)(vi).

"Treasury Regulations" means the regulations promulgated from time to
time under the Code as in effect for the relevant Tax Period.

"UK Restructuring Transactions" shall have the meaning provided in
Section 2.04(c).

"1996 Spin-Off Tax Sharing Agreement" shall have the meaning provided
in Section 2.06(a).

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"1997 Loss Carryforward" shall have the meaning provided in Section
2.02(a)(i).

"1998 Loss Carryforward" shall have the meaning provided in Section
2.02(a)(i).

"1999 Tax Period" shall have the meaning provided in Section 2.02(a).

For purposes of this Agreement, any reference to "including" shall be
deemed to mean "including, without limitation."

SECTION 2. ALLOCATION OF TAX LIABILITIES. The provisions of this Section 2
are intended to determine each Company's liability for Taxes with respect to
Pre-Distribution Periods. Once the liability has been determined under this
Section 2, Section 5 determines the time when payment of the liability is to be
made, and whether the payment is to be made to the Tax Authority directly or to
another Company.

2.01 General Rule.

(a) Tenneco Liability. Tenneco shall be liable for all Taxes not
specifically allocated to Packaging Company under this Section 2. Tenneco
shall indemnify and hold harmless the Packaging Group from and against any
liability for Taxes for which Tenneco is liable under this Section 2.01(a).

(b) Packaging Company Liability. Packaging Company shall be liable
for, and shall indemnify and hold harmless the Tenneco Group from and
against any liability for, Taxes which are allocated to Packaging Company
under this Section 2.

2.02 Allocation of United States Federal Income Tax. Except as provided in
Sections 2.05 and 2.06:

(a) Allocation of Tax and Tax Attributes Relating to the 1999 Tax
Period. With respect to the Tenneco Federal Consolidated Return for the tax
period ending December 31, 1999 (the "1999 Tax Period"), the allocation and
use of net operating loss carryforwards and current year losses, and the
allocation of Consolidated Tax Liability, if any, shall be made as follows:

(i) Step One. The net operating losses attributable to the tax
period ended December 31, 1997 (the "1997 Loss Carryforward") and the
net operating losses attributable to the tax period ended December 31,
1998 (the "1998 Loss Carryforward") shall be allocated between the
Tenneco Group and Packaging Group based upon the legal entities that
incurred such losses (treating the income of any member of the Tenneco
Affiliated Group for the relevant tax period as reducing the losses of
each legal entity included in the Tenneco Affiliated Group on a pro rata
basis in accordance with Treasury Regulation Section 1.1502-21(b)(2).

(ii) Step Two. The taxable income (or loss) of each of the Tenneco
Group and Packaging Group for the portion of the 1999 Tax Period ending
on September 30, 1999 (the "Benchmark Period") shall be computed (the
"Benchmark Income (or Loss) Allocation ") subject to adjustment for
material divestments, the costs of the Debt Realignment, and similar
items.

(iii) Step Three. The taxable losses, if any, incurred by any
member of the Tenneco Affiliated Group for the Benchmark Period shall be
deemed to be utilized first to offset the taxable income, if any, of
each other member of the Tenneco Affiliated Group for such tax period
(which losses shall be deemed to be utilized by such members on a pro
rata basis). Next, the 1997 Loss Carryforward shall be deemed to be
utilized, on a pro rata basis, to offset the taxable income of each
member of the Tenneco Affiliated Group. Finally, to the extent the
taxable income for such period exceeds the losses for such period and
the 1997 Loss Carryforward, the 1998 Loss Carryforward shall be deemed
to be utilized, on a pro rata basis, to offset the remaining taxable
income of each member of the Tenneco Affiliated Group. Neither Tenneco
nor Packaging Company shall have any obligation to pay or reimburse the
other party for utilization of such party's net operating losses under
this Step Three. Each Group's allocable share of the 1997 Loss
Carryforward and 1998 Loss Carryforward following the utilization of

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losses described in this Step Three shall be referred to as such Group's
"Benchmark 1997 Loss Carryforward Allocation" and "Benchmark 1998 Loss
Carryforward Allocation," respectively. In the event the 1997 Loss
Carryforward and 1998 Loss Carryforward are fully utilized, the
Benchmark 1997 Loss Carryforward Allocation and the Benchmark 1998 Loss
Carryforward Allocation shall be deemed to equal zero.

In the event the Tax Return for the tax period ended December 31,
1998 has not been filed at the time the Benchmark 1997 and Benchmark
1998 Loss Carryforward Allocations are made pursuant to Step Three, the
parties shall use an agreed upon estimate of the net operating losses
for the tax period ended December 31, 1998, and within 30 days of the
filing the Tax Return for such tax period, the Benchmark 1997 Loss
Carryforward Allocation and Benchmark 1998 Loss Carryforward Allocation
shall be redetermined. In the case of such redetermination if Packaging
Company's Benchmark 1997 Loss Carryforward Allocation or Benchmark 1998
Loss Carryforward Allocation, as redetermined, exceeds the amount of
such allocation as initially determined under Step Three, Packaging
Company shall pay to Tenneco an amount equal to such excess multiplied
by 35%, and if Packaging Company's Benchmark 1997 Loss Carryforward
Allocation or Benchmark 1998 Loss Carryforward Allocation, as
redetermined, is less than Packaging Company's Benchmark 1997 Loss
Carryforward Allocation or Benchmark 1998 Loss Carryforward Allocation,
Tenneco shall pay to Packaging Company an amount equal to such
difference multiplied by 35%.

(iv) Step Four. The taxable income (or loss) of each of the Tenneco
Group and the Packaging Group for the 1999 Tax Period shall be computed
(in the same manner as described in Step Two) based on the Tax Return as
filed for such tax period (the "Final Income or Loss Allocation").

(v) Step Five. Based on the Tax Return as filed for the 1999 Tax
Period, the taxable losses, if any incurred by any member of the Tenneco
Group or Packaging Group for such period shall be deemed to be utilized
first to offset the taxable income, if any, of each other member of the
Tenneco Affiliated Group for such period (which losses shall be deemed
to be utilized by such members on a pro rata basis). Next, the 1997 Loss
Carryforward shall be deemed to be utilized, on a pro rata basis, to
offset the taxable income of each member of the Tenneco Affiliated
Group. Finally, to the extent the taxable income for such period exceeds
the losses for the current period and the 1997 Loss Carryforward, the
1998 Loss Carryforward shall be deemed to be utilized, on a pro rata
basis, to offset the remaining taxable income of each member of the
Tenneco Affiliated Group. Each Group's allocable share of the 1997 Loss
Carryforward and 1998 Loss Carryforward following the utilization of
losses described in this Step Five shall be referred to as the "Final
1997 Loss Carryforward Allocation" and "Final 1998 Loss Carryforward
Allocation," respectively.

(vi) Step Six. Within sixty (60) days of filing the Tenneco Federal
Consolidated Tax Return for the 1999 Tax Period, the Packaging Group
shall compute the "True-Up Amount," which amount shall equal (I) the sum
of (A) the Packaging Group's' Final Income (or Loss) Allocation less the
Packaging Group's Benchmark Income or (Loss) Allocation (any loss
allocation shall be treated as a negative number for purposes of this
computation) plus (B) the Packaging Group's Final 1997 Loss Carryforward
less the Packaging Group's Benchmark 1997 Loss Carryforward (as
redetermined under Step Three, if applicable), plus (C) the Packaging
Group's Final 1998 Loss Carryforward less the Packaging Group's
Benchmark 1998 Carryforward (as redetermined under Step Three, if
applicable), multiplied by (II) 35%.

(vii) Step Seven. In the event the Packaging Group's True-Up Amount
is positive, Packaging Company shall pay such amount to Tenneco, and in
the event the Packaging Group's True-Up Amount is negative, Tenneco
shall pay such amount to Packaging Company.

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Schedule A attached hereto sets forth the parties' agreement as to the
determinations required under Steps One, Two and Three of this Section
2.02(a). Schedule B attached hereto provides an example of the manner in
which Steps Four, Five and Six are to be computed. The actual determination
required to be made under Steps Four, Five and Six will be based on the
information contained on the Tax Return as filed for the 1999 Tax Period.

(b) Allocation of Tenneco Federal Consolidated Return Tax
Adjustments. If there is any adjustment to the reported Tax liability with
respect to any Tenneco Federal Consolidated Return, or to such Tax
liability as previously adjusted, Packaging Company shall be liable to
Tenneco for the excess (if any) of:

(i) the Consolidated Tax Liability of the Packaging Group computed
as if all members of the Packaging Group included in the Tax Return had
filed a consolidated Tax Return for such members based on the Tax Items
of such members as so adjusted (the "Packaging Group Recomputed Federal
Tax Liability"); over

(ii) the Consolidated Tax Liability of the Packaging Group computed
as if such members of the Packaging Group had filed a consolidated Tax
Return for such members based on the Tax Items of such members as
reported (or, if applicable, as previously adjusted) (the "Packaging
Group Prior Federal Tax Liability"). Solely with respect to the Tenneco
Federal Consolidated Return for the 1999 Tax Period, the Packaging Group
Prior Federal Tax Liability with respect to such Tax Return shall equal
the Consolidated Tax Liability allocable to the Packaging Group with
respect to such Tax Return under Section 2.02(a) hereof.

If the Packaging Group Prior Federal Tax Liability exceeds the Packaging
Group Recomputed Federal Tax Liability, Tenneco shall be liable to
Packaging Company for such excess. For purposes of this Section 2.02(b), if
the Packaging Group has a net operating loss after taking into account the
adjustments allocable to such Group, the Recomputed Federal Tax Liability
of the Group shall be less than zero to the extent such net operating loss
produces a Tax Benefit in consolidation for the applicable taxable year
(which shall be determined applying the principles of Section 4.07(c)(ii)).
For example, if the Packaging Group's Prior Federal Tax Liability for Year
X was $50 and taking into account all adjustments for Year X, Packaging
Group has a net operating loss of $40 resulting in a Tax Benefit of $14
(determined by computing the Consolidated Tax Liability for such Tax Period
with and without the net operating loss), then the Packaging Group's
Recomputed Federal Tax Liability for Year X would be negative $14, and
Tenneco would be liable to Packaging Company in the amount of $64, i.e.
($50 - (-$14)).

2.03 Allocation of State Income Taxes. Except as provided in Sections
2.04, 2.05 and 6.03, State Income Taxes shall be allocated as follows:

(a) Allocation of State Income Tax Liabilities for Post-Distribution
State Income Tax Returns.

(i) Separate Company Taxes. In the case of any Separate Company
State Income Tax with respect to a Post-Distribution State Income Tax
Return, Packaging Company shall be liable for such Tax imposed on any
members of the Packaging Group.

(ii) Consolidated or Combined State Income Taxes. In the case of
any Consolidated or Combined State Income Tax with respect to a
Post-Distribution State Income Tax Return, the Consolidated or Combined
State Income Tax liability shall be allocated between the Tenneco Group
and the Packaging Group as follows:

(A) Each Group shall compute its "Hypothetical State Tax
Liability," which shall equal the State Income Tax liability of such
Group (which number shall be deemed to be zero if such Group has net
operating losses for such Tax Period), computed as if all members of
such Group included in the computation of such Tax had filed a
consolidated or

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combined Tax Return for such Group's members based on the income,
apportionment factors, and other items of such members.

(B) In the event the Estimated Tax Payments (as defined below)
exceed, or are less than, the actual State Income Tax liability shown
on the Consolidated and Combined State Income Tax Return such excess
or deficit, as the case may be, shall be shared by the Tenneco Group
and the Packaging Group. Each Group's share shall be determined by
multiplying such excess or deficit by a fraction, (a) the numerator
of which is the Hypothetical State Tax Liability of such Group, and
(b) the denominator of which is the sum of the Hypothetical State Tax
Liability of the Tenneco Group and the Packaging Group, with
appropriate payments being made by Packaging Company to Tenneco, or
by Tenneco to Packaging Company, to achieve the appropriate sharing
of such excess or deficit. The term "Estimated Tax Payments" shall
mean any and all estimated payments made in connection with the
Combined or Consolidated State Income Tax Return filed for such Tax
Period; provided, however, such amount shall (i) exclude any
estimated Tax payments made after the Distribution Date and (ii)
include any overpayments of Combined or Consolidated State Income Tax
for any prior Tax Periods which are carried forward and applied as
payments on the Combined or Consolidated State Income Tax Returns for
the applicable Tax Period.

(iii) Post-Distribution Estimated Payments. Notwithstanding
anything to the contrary in the foregoing, in the case of both Separate
Company Taxes and Consolidated or Combined Income Taxes, Packaging
Company shall pay to the appropriate State Tax Authority any estimated
Taxes with respect to the Tax Period ended December 31, 1999 due after
the Distribution Date. Tenneco shall reimburse Packaging Company for (i)
any estimated Tax payments made by Packaging Company after the
Distribution Date with respect to Separate Company Taxes imposed on
members of the Tenneco Group and (ii) any and all estimated Tax payments
made by Packaging Company after the Distribution Date with respect to
any Consolidated or Combined State Income Tax.

(b) Allocation of State Income Tax Adjustments.

(i) Combined or Consolidated State Income Tax Adjustments. If there
is any adjustment to the amount of Consolidated or Combined State Income
Tax reported on any Tax Return (or as previously adjusted), the
liability of the Packaging Group shall be recomputed as provided in this
subparagraph. Packaging Company shall be liable to Tenneco for the
excess (if any) of:

(A) the State Income Tax liability computed as if all members of
the Packaging Group included in the Tax Return had filed a
consolidated or combined Tax Return for such members based on the
income, apportionment factors, and other items of such members as so
adjusted (the "Packaging Group Recomputed State Tax Liability"); over

(B) the State Income Tax liability computed as if such members
of the Packaging Group had filed a consolidated or combined Tax
Return for such members based on the income, apportionment factors,
and other items of such members as reported (or, if applicable, as
previously adjusted) (the "Packaging Group Prior State Tax
Liability").

If the Packaging Group Prior State Tax Liability exceeds the Packaging
Group Recomputed State Tax Liability, Tenneco shall be liable to Packaging
Company for such excess. For purposes of this paragraph, (i) if the
Packaging Group has a net operating loss after taking into account the
adjustments allowable to such Group, the Packaging Group Recomputed State
Tax Liability shall be less than zero to the extent such net operating loss
produces a Tax Benefit for purposes of the applicable Consolidated or
Combined State Income Tax and (ii) the determination and payment of
estimated Taxes (including the determination and payment of any Tax
required to be paid with a

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request for an extension of time to file a Tax Return) shall not be treated
as an adjustment to the related Consolidated or Combined State Income Tax.

(ii) Separate Company Taxes. In the case of any adjustment to the
amount of a Separate Company Tax Liability, Packaging Company shall be
liable for such Tax imposed on members of the Packaging Group, and Tenneco
shall be liable for such Tax imposed on members of the Tenneco Group.

2.04 Allocation of Other Taxes.

(a) General. Except as provided in Section 2.04 (b) and (c) and Section
2.05, all Taxes other than those specifically allocated pursuant to Sections
2.02 and 2.03 shall be allocated based on the legal entity on which the legal
incidence of the Tax is imposed (provided, however, that in the event the legal
entity on which the legal incidence of the tax is imposed is a member of a group
including members of both the Packaging Group and Tenneco Group, the tax shall
be allocated between the Tenneco Group and Packaging Group based on each Group's
respective share of the taxable income giving rise to such Tax. As between the
parties to this Agreement, Packaging Company shall be liable for all Taxes
imposed on any member of the Packaging Group. The Companies believe that there
is no Tax not specifically allocated pursuant to Sections 2.02 and 2.03 which is
legally imposed on more than one legal entity (e.g., joint and several
liability); however, if there is any such Tax, it shall be allocated in
accordance with past practices as reasonably determined by the affected
Companies, or in the absence of such practices, in accordance with any
allocation method agreed upon by the affected Companies.

(b) German Restructuring. Notwithstanding anything to the contrary in this
Agreement, with respect to the Corporate Restructuring Transactions involving
the restructuring of the German entities (i.e., the members of the Tenneco
Affiliated Group organized under the laws of Germany) (the "German Restructuring
Transactions"), the parties agree as follows:

(i) Packaging Company shall be liable for any and all Transfer Taxes
incurred as a result of the German Restructuring Transactions.

(ii) Tenneco Deutschland Holdinggesellschaft mBH's ("Tenneco
Deutschland") German Tax losses shall be utilized to the fullest extent
permitted under German Tax Law to offset income realized in connection with
the German Restructuring Transactions and Packaging Company shall have no
obligation to reimburse or otherwise compensate Tenneco for the use of such
Tax losses; provided, however, that (X) in the event the German Tax
Authority makes a final determination that the income realized in
connection with the German Restructuring Transactions is greater than the
amount reported on the Tax Return as originally filed, Packaging Company
shall pay to Tenneco Deutschland an amount equal to the additional German
Tax loss used to offset Tenneco Deutschland's in creased income multiplied
by the applicable German Tax rate, and (Y) in the event the German Tax
Authority makes a final determination that the income realized in
connection with the German Restructuring Transactions is less than the
amount reported on the Tax Return as originally filed, Tenneco Deutschland
shall pay to Packaging Company an amount equal to the German Tax loss
restored as a result of such determination multiplied by the applicable
German Tax rate.

(iii) In the event any member of the Packaging Group is required to
make profit and absorption payments to Tenneco Deutschland after the
Distribution Date, such payments shall be promptly repaid to Tenneco
Packaging Deutschland Holding Gesellschaft mBH as an adjustment to purchase
price with respect to Tenneco Deutschland's sale of such member to Tenneco
Packaging Deutschland Holding Gesellschaft mBH pursuant to the German
Restructuring Transactions.

(iv) In the event the German Tax Authority disallows Tenneco
Deutschland's Organschaft status for any reason whatsoever, Tenneco
Deutschland shall pay to Packaging Company the Tax Benefit

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realized by Tenneco Deutschland by reason of claiming input credits arising
out of deemed dividend payments made by members of the Packaging Group.

(c) United Kingdom Restructuring. Notwithstanding anything to the contrary
in this Agreement, with respect to the Corporate Restructuring Transactions
involving the restructuring of the United Kingdom entities (i.e., the members of
the Tenneco Affiliated Group organized under the laws of United Kingdom) (the
"UK Restructuring Transactions"), the Companies agree as follows:

(i) Packaging Company shall be liable for any and all Transfer Taxes
(including, without limitation, any stamp duty) incurred as a result of the
UK Restructuring Transactions.

(ii) Each Group shall be entitled to cause any of its members to
surrender such member's Tax losses for group relief or consortium relief
(or other amounts eligible for group or consortium relief) to another
member of such Group; provided, however, that if the Tax losses of a Group
cannot be utilized by the members of such Group, the Tax losses shall be
surrendered for group relief or consortium relief to the members of the
other Group, as designated in writing by the parent company of such other
Group (and such other Group shall have no obligation to reimburse or
otherwise compensate the surrendering Group for its losses).

2.05 Transaction and Other Taxes.

(a) General. Except as otherwise provided in this Section 2.05, any and all
liability for Taxes resulting from the Transactions shall be allocated as
follows:

(i) Any sales and use, gross receipts or other Transfer Taxes imposed
on the transfers occurring pursuant to the Transactions (together with any
Tax resulting from any income or gain recognized under Treasury Regulation
Sections 1.1502-13 or 1.1502-19 (or any other corresponding provisions of
other applicable Tax Laws) as a result of the Transactions) shall be
allocated to the legal entity on which the legal incidence of the Tax is
imposed. As between the parties to this Agreement, Packaging Company shall
be liable for all Taxes imposed on any member of the Packaging Group and
Tenneco shall be liable for all Taxes imposed on any member of the Tenneco
Group.

(ii) Any Tax liability resulting from any income or gain recognized as
a result of any of the transactions contemplated by the Distribution
Agreement failing to qualify for tax-free treatment under Code Sections
332, 351, 355, 361 or other provisions of the Code (as contemplated by the
Ruling Request) or corresponding provisions of other applicable Tax Laws,
shall be allocated fifty percent (50%) to Tenneco and fifty percent (50%)
to Packaging Company.

(b) Indemnity for Inconsistent Acts. Tenneco or Packaging Company, as the
case may be, shall be liable for, and shall indemnify and hold harmless the
members of the other Group from and against any liability for, any Restructuring
Tax to the extent arising from any breach by such party of its representations
or covenants under Section 11.

(c) Indemnity for Liability Under Code Section 355(e). Notwithstanding
anything to the contrary in this Section 2.05, any Tax liability incurred by
Tenneco under Code Section 355(e) (or any corresponding provision of other
applicable Tax Laws) by reason of the acquisition by one or more persons of a
"50-percent or greater interest" (as such term is defined in Code Section
355(d)(4)) in Tenneco or Packaging Company (a "50% Ownership Shift") shall be
allocated to that entity (i.e., Tenneco or Packaging Company) with respect to
which such Ownership Shift has occurred.

2.06 Liability Under 1996 Spin-Off Tax Sharing Agreement.

(a) With respect to any Tax liability imposed on or incurred by Tenneco (or
any Tax Benefit owing to Tenneco) under the Tax Sharing Agreement dated as of
December 11, 1996, as amended, by and among Tenneco, Newport News Shipbuilding
Inc., El Paso Natural Gas Company, and El Paso Tennessee

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Pipeline Co. ("Old Tenneco") (the "1996 Spin-Off Tax Sharing Agreement),
Packaging Company shall be liable for, and shall indemnify and hold the Tenneco
Group harmless from, any and all such Tax liabilities (and Packaging Company
shall be entitled to any and all such Tax Benefits) except to the extent such
Tax liability (or such Tax Benefit) would be treated as allocable to the Tenneco
Group under the terms of Sections 2.01 through 2.04 hereof, in which case the
Tenneco Group shall be liable for such Tax liability and shall be entitled to
such Tax Benefit. Any amount owed by Packaging Company under this Section 2.06
shall be paid by Packaging Company to Tenneco within 30 days from the date of
written notice and demand from Tenneco evidencing the payment of such amount by
Tenneco in accordance with the terms of the 1996 Spin-Off Tax Sharing Agreement.
Any amount due to Packaging Company under this Section 2.06 shall be paid to
Packaging Company by Tenneco within 30 days from the date of receipt of such
amount by Tenneco in accordance with the terms of the 1996 Spin-Off Tax Sharing
Agreement.

(b) The Companies agree that in the case of any dispute or controversy
under the 1996 Spin-Off Tax Sharing Agreement, (i) each Company shall control
the portion of such dispute or controversy that directly and exclusively relates
to a Tax liability or Tax Benefit borne by such Company under the terms hereof,
and (ii) to the extent any issue involved in, or aspect of, such dispute or
controversy does not directly and exclusively relate to the Tax liability or Tax
Benefits of one Company under the terms hereof, the Companies shall jointly
control and otherwise handle such issue or matter in accordance with the rules
for defense or prosecution of Joint Adjustments in Section 9.02(b) hereof. In
furtherance of the foregoing, Tenneco shall, upon Packaging Company's request,
execute such powers of attorney or other documentation as reasonably determined
by Packaging Company to be necessary or appropriate to permit Packaging Company
to fully exercise its rights under this Section 2.06(b). Each of Tenneco and
Packaging Company agree that, with respect to any issue which involves or could
involve the other Company's liability (or entitlement to payment) under the 1996
Spin-Off Tax Sharing Agreement pursuant to this Section 2.06, it shall not have
the right to settle such issue without the prior written consent of such other
Company.

SECTION 3. PRORATION OF TAXES FOR STRADDLE PERIODS.

3.01 General Method of Proration. In the case of any Straddle Period, Tax
Items shall be apportioned between Pre-Distribution Periods and
Post-Distribution Periods in accordance with the principles of Treasury
Regulation Section 1.1502-76(b) as reasonably interpreted and applied by the
Companies. No election shall be made under Treasury Regulation Section
1.1502-76(b)(2)(ii) (relating to ratable allocation of a year's items). If the
Distribution Date is not an Accounting Cutoff Date, the principles of Treasury
Regulation Section 1.1502-76(b)(2)(iii) will be applied to ratably allocate the
items (other than extraordinary items described in Treasury Regulation Section
1.1502-76(b)(2)(ii)(C)) for the month which includes the Distribution Date.

3.02 Transaction Treated as Extraordinary Item. In determining the
apportionment of Tax Items between Pre-Distribution Periods and
Post-Distribution Periods, any Tax Items relating to the Transactions shall be
treated as an extraordinary item described in Treasury Regulation Section
1.1502-76(b)(2)(ii)(C) and shall be allocated to Pre-Distribution Periods, and
any Taxes related to such items shall be treated under Treasury Regulation
Section 1.1502-76(b)(2)(iv) as relating to such extraordinary item and shall be
allocated to Pre-Distribution Periods.

SECTION 4. PREPARATION AND FILING OF TAX RETURNS.

4.01 General. Except as otherwise provided in this Section 4, Tax Returns
shall be prepared and filed when due (including extensions) by the person
obligated to file such Tax Returns under the Code or applicable Tax Law. The
Companies shall provide, and shall cause their Affiliates to provide, assistance
and cooperate with one another in accordance with Section 7 with respect to the
preparation and filing of Tax Returns, including providing information required
to be provided in Section 7.

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4.02 Packaging Company's Responsibility. Packaging Company has the
exclusive obligation and right to prepare and file, or to cause to be prepared
and filed:

(a) Tenneco Federal Consolidated Returns for Tax Periods ending on or
before December 31, 1999.

(b) The U.S. federal Income Tax return for the affiliated group (as
that term is defined in Code Section 1504) of which Tenneco International
Holding Corp. is the common parent for Tax Periods ending on or before
December 31, 1999.

(c) Tax Returns for Separate Company State Income Taxes or
Consolidated or Combined State Income Taxes which the Companies reasonably
determine, in accordance with Tenneco's past practices, are required to be
filed by the Companies or any of their Affiliates for

Tax Periods ending on or before December 31, 1999 (including without
limitation, the filing of amended Tax Returns to take into account Federal
Income Tax adjustments or Carryback Items).

(d) Tax Returns that are required to be filed by the members of the
Packaging Group.

Nothing in this Section 4.02 shall impose on Packaging Company any liability for
any failure to file any Tax Return, or for failure to file any Tax Return when
due, with respect to any Pre-Distribution Period if the due date for such return
(including extensions) was prior to the Distribution Date.

4.03 Tenneco Responsibility. Tenneco shall prepare and file, or shall
cause to be prepared and filed, Tax Returns required to be filed by or with
respect to members of the Tenneco Group other than those Tax Returns which
Packaging Company is required to prepare and file under Section 4.02. The Tax
Returns required to be prepared and filed by Tenneco under this Section 4.03
shall include (a) the Tenneco Federal Consolidated Return for Tax Periods ending
after December 31, 1999, (b) the U.S. Federal Income Tax return for the
affiliated group (as that term is defined in Code Section 1504) of which Tenneco
International Holding Corp. is the common parent for Tax Periods ending after
December 31, 1999, and (c) Tax Returns for Consolidated or Combined State Income
Taxes which the Companies reasonably determine, in accordance with Tenneco's
past practices, are required to be filed by the Companies or any of their
Affiliates for Tax Periods ending after December 31, 1999.

4.04 Tax Accounting Practices.

(a) General Rule. Except as otherwise provided in this Section 4.04,
any Tax Return for any Pre-Distribution Period or any Straddle Period, and
any Tax Return for any Post-Distribution Period to the extent items
reported on such Tax Return might reasonably affect items reported on any
Tax Return for any Pre-Distribution Period or any Straddle Period, shall be
prepared in accordance with past Tax accounting practices used with respect
to the Tax Returns in question (unless such past practices are no longer
permissible under the Code or other applicable Tax Law), and to the extent
any items are not covered by past practices (or in the event such past
practices are no longer permissible under the Code or other applicable Tax
Law), in accordance with reasonable Tax accounting practices selected by
the Responsible Company.

(b) Reporting of Transaction Tax Items. The tax treatment reported on
any Tax Return of Tax Items relating to the Transactions shall be
consistent with the treatment of such item in the IRS Ruling Letter. To the
extent there is a Tax Item relating to the Transactions which is not
covered by the IRS Ruling Letter, the Companies shall agree on the tax
treatment of any such Tax Item reported on any Tax Return. For this
purpose, the tax treatment of such Tax Items on a Tax Return by the
Responsible Company with respect to such Tax Return shall be agreed to by
the other Company unless either (i) there is no reasonable basis for such
tax treatment, or (ii) such tax treatment is inconsistent with the tax
treatment contemplated in the Ruling Request. Such Tax Return shall be
submitted for review pursuant to Section 4.06(a), and any dispute regarding
such

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proper tax treatment shall be referred for resolution pursuant to Section
15, sufficiently in advance of the filing date of such Tax Return
(including extensions) to permit timely filing of the return.

4.05 Consolidated or Combined Returns. The Companies will elect and join,
and will cause their respective Affiliates to elect and join, in filing
consolidated, unitary, combined, or other similar joint Tax Returns, to the
extent each entity is eligible to join in such Tax Returns, if the Companies
reasonably determine that the filing of such Tax Returns is consistent with past
reporting practices, or in the absence of applicable past practices, will result
in the minimization of the net present value of the aggregate Tax to the
entities eligible to join in such Tax Returns.

4.06 Right to Review Tax Returns.

(a) General. The Responsible Company with respect to any Tax Return shall
make such Tax Return and related workpapers available for review by the other
Company, if requested, to the extent (i) such Tax Return relates to Taxes for
which the requesting party may be liable, (ii) such Tax Return relates to Taxes
for which the requesting party may be liable in whole or in part for any
additional Taxes owing as a result of adjustments to the amount of Taxes
reported on such Tax Return, (iii) such Tax Return relates to Taxes for which
the requesting party may have a claim for Tax Benefits under this Agreement, or
(iv) the requesting party reasonably determines that it must inspect such Tax
Return to confirm compliance with the terms of this Agreement. The Responsible
Company shall use its reasonable best efforts to make such Tax Return available
for review as required under this paragraph sufficiently in advance of the due
date for filing such Tax Returns to provide the requesting party with a
meaningful opportunity to analyze and comment on such Tax Returns and have such
Tax Returns modified before filing, taking into account the party responsible
for payment of the tax (if any) reported on such Tax Return and the materiality
of the amount of Tax liability with respect to such Tax Return. The Companies
shall attempt in good faith to resolve any issues arising out of the review of
such Tax Returns.

(b) Execution of Returns Prepared by Other Party. In the case of any Tax
Return which is required to be prepared and filed by one Company under this
Agreement and which is required by law to be signed by the other Company (or by
its authorized representative), the Company which is legally required to sign
such Tax Return shall not be required to sign such Tax Return under this
Agreement if there is no reasonable basis for the tax treatment of any material
items reported on the Tax Return.

4.07 Claims for Refund, Carrybacks, and Self-Audit Adjustments
("Adjustment Requests").

(a) Consent Required for Adjustment Requests Related to Consolidated or
Combined Income Taxes. Neither Company shall be entitled to file an Adjustment
Request with respect to any Consolidated or Combined Income Tax for a
Pre-Distribution Period without the consent in writing of the other Company
(which consent shall not be unreasonably withheld or delayed). Any Adjustment
Request which the Companies consent to make under this Section 4.07 shall be
prepared and filed by the Responsible Company under Section 4.02 for the Tax
Return to be adjusted. The Company requesting the Adjustment Request (if not the
Responsible Company) shall provide to the Responsible Company all information
required for the preparation and filing of such Adjustment Request in such form
and detail as reasonably requested by the Responsible Filing Company.

(b) Other Adjustment Requests Permitted. Nothing in this Section 4.07 shall
prevent any Company or its Affiliates from filing any Adjustment Request with
respect to Income Taxes which are not Consolidated or Combined Income Taxes or
with respect to any Taxes other than Income Taxes. Any refund or credit obtained
as a result of any such Adjustment Request (or otherwise) shall be for the
account of the person liable for the Tax under this Agreement.

(i) In the event that a member of the Packaging Group, on the one
hand, and a member of the Tenneco Group, on the other hand, are each
entitled to carryback a Tax Item to a Pre-Distribution

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Period, the respective Tax Items shall be utilized under the rules of
applicable Tax Law (which shall be, in the case of Carrybacks to such Tax
Periods of the affiliated group of which Tenneco is the common parent, the
rules contained in Treasury Regulation Section 1.1502-21T).

(ii) Any Tax refund or other Tax Benefit resulting from the Carryback
of any member of one Group (the "Carryback Group") of any Tax Item arising
after the Distribution Date to a Pre-Distribution Period shall be for the
account of the Carryback Group (and in the event the Packaging Group is the
Carryback Group, Tenneco shall promptly pay to Packaging Company the amount
of such Tax refund or other Tax Benefit); provided, however, that if at the
time of the utilization of the Carryback Items of a member of the Carryback
Group, a member of the other Group (the "Other Group") possesses Carryback
Tax Items which, but for the ordering rule set forth in Section 4.07(c)(i),
would have been available to be utilized (the "Available Other Group
Carryback") in lieu of the Carryback Group's Tax Items, then (but only to
the extent of the Available Other Group Carryback) the Carryback Group
shall not be entitled to payment of the amount of such Tax refund or Tax
Benefit until the earlier of (X) the date on which a member of the Other
Group claims the Available Other Group Carryback on a Tax Return or (Y) the
date on which a member of the Carryback Group would have been able to
utilize the Carryback had it not been claimed with respect to the
Pre-Distribution Period Tax Return.

(iii) In the event the Carryback of Tax Items of a member of the
Packaging Group, or the Tenneco Group, as the case may be, does not result
in a Tax refund, due to an offsetting Tax adjustment to a member of the
Other Group, then the Other Group shall promptly pay the amount of any
decrease in Tax liability resulting from the Carryback claim, provided,
however, that in the event the Other Group possesses Carryback Items which,
but for the ordering rules of Section 4.07(c)(i) would have been available
to be utilized in lieu of the Carryback Group's Tax Items, then (but only
to the extent of the Available Other Group Carryback), the Other Group
shall not be required to pay the amount of such decrease in Tax liability
to the Carryback Group until the earlier of (X) the date on which a member
of the Other Group claims the Available Other Group Carryback on a Tax
Return or (Y) the date on which a member of the Carryback Group would have
been able to utilize the Carryback had it not been claimed with respect to
the Pre-Distribution Period Tax Return.

(d) Payment of Refunds. Except as otherwise provided in Section
4.07(c), any refunds or other Tax Benefits received by any Company (or any
of its Affiliates) as a result of any Adjustment Request which are for the
account of another Company (or member of such other Company's Group) shall
be paid by the Company receiving (or whose Affiliate received) such refund
or Tax Benefit to such other Company in accordance with Section 6.

SECTION 5. TAX PAYMENTS AND INTERCOMPANY XXXXXXXX.

5.01 Payment of Taxes With Respect to Post-Distribution Tenneco Federal
Consolidated Returns. In the case of the Tenneco Federal Consolidated Tax Return
for the 1999 Tax Period:

(a) Computation and Payment of Tax Due. At least three business days
prior to the Payment Date with respect to the Tenneco Federal Consolidated
Tax Return for the 1999 Tax Period, Packaging Company shall compute the
amount of Tax required to be paid to the Internal Revenue Service (taking
into account the requirements of Section 4.04 relating to consistent
accounting practices) with respect to such Tax Return, and Packaging
Company shall notify Tenneco in writing of the amount of Tax required to be
paid on such Payment Date. Tenneco will pay such amount to the Internal
Revenue Service on or before such Payment Date.

(b) Computation and Payment of Packaging Company Liability With
Respect to Tax Due.

(i) Within 30 days of the determination date under Section
2.01(a)(vi) with respect to the Tenneco Federal Consolidated Tax Return
for the 1999 Tax Period, Packaging Company shall pay to Tenneco an
amount equal to the True-Up Amount, if positive, as determined under

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Section 2.02(a)(vii). In the event the Packaging Group's True-Up Amount,
as determined under Section 2.02(a)(vii) is negative, Tenneco shall pay
such amount to Packaging Company within 30 days of the Payment Date with
respect to the Tenneco Federal Consolidated Return for the 1999 Tax
Period.

(ii) In the event of a redetermination of the Benchmark 1997 Loss
Allocation Carryforward or Benchmark 1998 Loss Allocation Carryforward
pursuant to Section 2.02(a)(iii), Packaging Company shall pay to
Tenneco, or Tenneco shall pay to Packaging Company, the amount, if any,
required to be paid pursuant to the last sentence of Section
2.02(a)(iii), which payment shall be due within 30 days of such
redetermination.

(b) Interest on Intergroup Tax Allocation Payments. In the case of any
payments to Tenneco required under paragraph (b) of this subsection 5.01,
Packaging Company shall also pay to Tenneco an amount of interest computed
at the Prime Rate on the amount of the payment required based on the number
of days from the applicable Payment Date to the date of payment. In the
case of any payments by Tenneco required under paragraph (b) of this
subsection 5.01, Tenneco shall also pay to Packaging Company an amount of
interest computed at the Prime Rate on the amount of the payment required
based on the number of days from the date of receipt of the Tax Benefit to
the date of payment of such amount to Packaging Company.

5.02 Payment of Federal Income Tax Related to Adjustments.

(a) Adjustments Resulting in Underpayments. Tenneco shall pay to the
Internal Revenue Service when due any additional Federal Income Tax required to
be paid as a result of any adjustment to the Tax liability with respect to any
Tenneco Federal Consolidated Return for any Pre-Distribution Period. The
Responsible Company shall compute the amount attributable to the Packaging Group
in accordance with Section 2.02(b) and Packaging Company shall pay to Tenneco
any amount due Tenneco under Section 2.02(b) within 30 days from the later of
(i) the date the additional Tax was paid by Tenneco or (ii) the date of receipt
by Packaging Company of a written notice and demand from Tenneco for payment of
the amount due, accompanied by evidence of payment and a statement detailing the
Taxes paid and describing in reasonable detail the particulars relating thereto.
Any amount due to Packaging Company under Section 2.02(b) shall be paid by
Tenneco to Packaging Company within 30 days from the date the additional Tax was
paid by Tenneco to the Internal Revenue Service. Any payments required under
this Section 5.02(a) shall include interest computed at the Prime Rate based on
the number of days from the date the additional Tax was paid by Tenneco to the
date of the payment under this Section 5.02(a).

(b) Adjustments Resulting in Overpayments. Within 30 days of receipt by
Tenneco of any Tax Benefit resulting from any adjustment to the Consolidated Tax
Liability with respect to any Tenneco Federal Consolidated Return for any
Pre-Distribution Period, Tenneco shall pay to Packaging Company or Packaging
Company shall pay to Tenneco (as the case may be), respective amounts due from
or to Tenneco as determined by the Responsible Company in accordance with
Section 2.02(b). Any payments required under this Section 5.02(b) shall include
interest computed at the Prime Rate based on the number of days from the date
the Tax Benefit was received by Tenneco to the date of payment to under this
Section 5.02(b).

5.03 Payment of State Income Tax With Respect to Post-Distribution State
Income Tax Returns.

(a) Computation and Payment of Tax Due. At least three business days prior
to any Payment Date for any Tax Return with respect to any State Income Tax
(except for post-Distribution estimated Tax payments which shall be governed by
Section 2.03(a)(iii)), the Responsible Company shall compute the amount of Tax
required to be paid to the applicable Tax Authority (taking into account the
requirements

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of Section 4.04 relating to consistent accounting practices) with respect to
such Tax Return on such Payment Date and:

(i) If such Tax Return is with respect to a Consolidated or Combined
State Income Tax, the Responsible Company shall, if Tenneco is not the
Responsible Company with respect to such Tax Return, notify Tenneco in
writing of the amount of Tax required to be paid on such Payment Date.
Tenneco will pay such amount to such Tax Authority on or before such
Payment Date.

(ii) If such Tax Return is with respect to a Separate Company Tax, the
Responsible Company shall, if it is not the Company liable for the Tax
reported on such Tax Return, notify the Company liable for such Tax in
writing of the amount of Tax required to be paid on such Payment Date. The
Company liable for such Tax will pay such amount to such Tax Authority on
or before such Payment Date.

(b) Computation and Payment of Packaging Company Liability. With respect to
the Consolidated or Combined State Income Tax Returns (excluding any Tax Return
with respect to payment of estimated Taxes or Taxes due with a request for
extension of time to file), within 120 days of the due date (including
extensions) for filing of the Consolidated or Combined Tax Return with the
latest due date for filing of all such Consolidated or Combined Tax Returns,
Packaging Company shall pay to Tenneco the Tax liability allocable to the
Packaging Group, or Tenneco shall pay to Packaging Company amounts owing to
Packaging Company, as the case may be, as determined by the Responsible Company
under the provisions of Section 2.03(a), plus interest computed at the Prime
Rate on the amount of the payment based on the number of days from such latest
due date (including extensions) to the date of payment.

5.04 Payment of State Income Taxes Related to Consolidated or Combined
State Income Tax Adjustments.

(a) Adjustments Resulting in Underpayments. Tenneco shall pay to the
applicable Tax Authority when due any additional State Income Tax required to be
paid as a result of any adjustment to the Tax liability with respect to any Tax
Return for any Consolidated or Combined State Income Tax for any Pre-
Distribution Period. Packaging Company shall pay to Tenneco its share of any
such additional Tax payment determined by the Responsible Company in accordance
with Section 2.03(b) within 120 days from the later of (i) the date the
additional Tax was paid by Tenneco or (ii) the date of receipt by Packaging
Company of a written notice and demand from Tenneco for payment of the amount
due, accompanied by evidence of payment and a statement detailing the Taxes paid
and describing in reasonable detail the particulars relating thereto. Packaging
Company shall also pay to Tenneco interest on its share of such additional Tax
computed at the Prime Rate based on the number of days from the date the
additional Tax was paid by Tenneco to the date of payment to Tenneco under this
Section 5.04(a). Any amount due to Packaging Company under Section 2.03(b) shall
be paid within 30 days from the date the additional Tax was paid by Tenneco to
the applicable Tax Authority (including interest computed at the Prime Rate
based on the number of days from the date the additional Tax was paid by Tenneco
to the date of payment to Packaging Company).

(b) Adjustments Resulting in Overpayments. In the case of any Tax Benefits
resulting from any adjustment to any Tax Return for any Consolidated or Combined
State Income Tax for any Pre-Distribution Period, Tenneco shall pay to Packaging
Company or Packaging Company shall pay to Tenneco (as the case may be)
respective amounts due from or to Tenneco as determined in accordance with
Section 2.03(b). Any payments owing to Packaging Company under this Section
5.04(b) shall be made within 60 days of the earlier of (i) the date of receipt
of the Tax Benefit by Tenneco or (ii) receipt by Tenneco of a written notice and
demand from Packaging Company evidencing the filing of the applicable
Consolidated or Combined Income Tax Return containing the relevant adjustments
and detailing the extent to which the resulting Tax Benefit is attributable to
Packaging Company. Any payments owing to Tenneco under this Section 5.04(b)
shall be made within 30 days of Tenneco's receipt

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of any Tax Benefit resulting from the adjustment to the applicable Consolidated
or Combined State Income Tax Return. Any payments required under this Section
5.04(b) shall include interest computed at the Prime Rate based on the number of
days from the date the Tax Benefit was received by Tenneco to the date of
payment to Packaging Company under this Section 5.04(b).

5.05 Payment of Separate Company Taxes. Each Company shall pay, or shall
cause to be paid, to the applicable Tax Authority when due all Separate Company
Taxes owed by such Company or a member of such Company's Group.

5.06 Indemnification Payments. If any Company (the "payor") is required to
pay to a Tax Authority a Tax that another Company (the "responsible party") is
liable for under this Agreement, the responsible party shall reimburse the payor
within 30 days of delivery by the payor to the responsible party of an invoice
for the amount due, accompanied by evidence of payment and a statement detailing
the Taxes paid and describing in reasonable detail the particulars relating
thereto. The reimbursement shall include interest on the Tax payment computed at
the Prime Rate based on the number of days from the date of the payment to the
Tax Authority to the date of reimbursement under this Section 5.06.

SECTION 6. TAX BENEFITS.

6.01 General Rule.

(a) If a member of one Group receives a Tax refund with respect to Taxes
for which a member of the other Group is liable hereunder, the Company receiving
such Tax refund shall make a payment to the Company who is liable for such Taxes
hereunder within 30 days following receipt of the Tax refund in an amount equal
to such Tax refund, plus interest on such amount computed at the Prime Rate
based on the number of days from the date of receipt of the Tax refund to the
date of payment under this Section 6.01.

(b) In the event one Group is reimbursed for its payment of a Tax liability
of the other Group, the amount of such reimbursement shall be computed net of
any Tax Benefit realized by the reimbursed Group as the result of payment of the
other Group's Tax liability.

6.02 Adjustment of Tax Attributes. In the event that the Carryback of Tax
Items of one Group, or a Tax adjustment attributable to such Group under the
terms of this Agreement, results in the disallowance or limitation of Tax
attributes (including Tax credits, deductions and similar items) claimed on the
Tax Return as filed, the Carryback Group shall be responsible for any increase
in Tax liability resulting from the disallowance or limitation of such Tax
attributes; provided, however, that in the event the disallowance or limitation
of Tax attributes results in a Tax Benefit resulting from the use of such Tax
attributes in another Tax Period, such Tax Benefit shall be deemed to be for the
account of the Carryback Group for purposes of this Agreement.

6.03 Correlative Adjustments. If, upon examination by any Tax Authority of
any Tax Return including a member of the Tenneco Group or Packaging Group for
any Tax Period, an item of deduction, credit or expense is disallowed for which
Tenneco is or may be liable for Taxes hereunder (or an item of income is
required to be recognized on a Tax Return which was not reported on such Tax
Return), in either such case resulting in a tax detriment suffered by the
Tenneco Group, and such disallowance (or recognition) results in a Tax Benefit
to the Packaging Group (with respect to that Tax Period or another Tax Period),
then Packaging shall pay to Tenneco the amount of such Tax Benefit (but in no
case to exceed the corresponding tax detriment). Any payment required to be made
hereunder shall be made when such Tax Benefit is realized in the form of an
actual reduction in Tax (which shall be computed by comparing the Tax which
would have been owed by Packaging but for the item giving rise to the Tax
Benefit with the Tax owed by Packaging taking such item into account). The
provisions of this Section 6.03 shall apply mutatis mutandis where an item of
deduction, credit or expense is disallowed for which Packaging is or may be
liable for Taxes hereunder (or an item of income is required to be recognized on
a Tax Return which was not reported on such Tax Return), as they apply where the
Tenneco Group suffers such a tax detriment. For avoidance of doubt, any payment
required to be made by

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Tenneco to the Packaging Group under this Section 6.03 shall, to the extent
applicable, be deemed as an offset to amounts owing by Packaging to Tenneco
under Section 2.02 hereof.

SECTION 7. ASSISTANCE AND COOPERATION.

7.01 General. After the Distribution Date, each of the Companies shall
cooperate (and cause their respective Affiliates to cooperate) with each other
and with each other's agents, including accounting firms and legal counsel, in
connection with Tax matters relating to the Companies and their Affiliates
including (i) preparation and filing of Tax Returns, (ii) determining the
liability for and amount of any Taxes due (including estimated Taxes) or the
right to and amount of any refund of Taxes, (iii) examinations of Tax Returns,
and (iv) any administrative or judicial proceeding in respect of Taxes assessed
or proposed to be assessed. Such cooperation shall include making all
information and documents in their possession relating to the other Companies
and their Affiliates available to such other Companies as provided in Section 8.
Each of the Companies shall also make available to each other, as reasonably
requested and available, personnel (including officers, directors, employees and
agents of the Companies or their respective Affiliates) responsible for
preparing, maintaining, and interpreting information and documents relevant to
Taxes, and personnel reasonably required as witnesses or for purposes of
providing information or documents in connection with any administrative or
judicial proceedings relating to Taxes. Any information or documents provided
under this Section 7 shall be kept confidential by the Company receiving the
information or documents, except as may otherwise be necessary in connection
with the filing of Tax Returns or in connection with any administrative or
judicial proceedings relating to Taxes.

7.02 Income Tax Return Information. Each Company will provide to the other
Company information and documents relating to their respective Groups required
by the other Company to prepare Tax Returns. The Responsible Company shall
determine a reasonable compliance schedule for such purpose in accordance with
Tenneco's past practices. Any additional information or documents the
Responsible Company requires to prepare such Tax Returns will be provided in
accordance with past practices, if any, or as the Responsible Company reasonably
requests and in sufficient time for the Responsible Company to file such Tax
Returns timely.

SECTION 8. TAX RECORDS.

8.01 Retention of Tax Records. Except as provided in Section 8.02, each
Company shall preserve and keep all Tax Records exclusively relating to the
assets and activities of its Group for Pre-Distribution Tax Periods, and Tenneco
shall preserve and keep all other Tax Records relating to Taxes of the Groups
for Pre-Distribution Tax Periods, for so long as the contents thereof may become
material in the administration of any matter under the Code or other applicable
Tax Law, but in any event until the later of (i) the expiration of any
applicable statutes of limitation, and (ii) seven years after the Distribution
Date. If, prior to the expiration of the applicable statute of limitation and
such seven-year period, a Company reasonably determines that any Tax Records
which it is required to preserve and keep under this Section 8 are no longer
material in the administration of any matter under the Code or other applicable
Tax Law, such Company may dispose of such records upon 90 days prior notice to
the other Company. Such notice shall include a list of the records to be
disposed of describing in reasonable detail each file, book, or other record
accumulation being disposed. The notified Company shall have the opportunity, at
its cost and expense, to copy or remove, within such 90-day period, all or any
part of such Tax Records.

8.02 State Income Tax Returns. Tax Returns with respect to State Income
Taxes and workpapers prepared in connection with preparing such Tax Returns
shall be preserved and kept, in accordance with the guidelines of Section 8.01,
by the Company responsible for preparing and filing the applicable Tax Return.

8.03 Access to Tax Records. The Companies and their respective Affiliates
shall make available to each other for inspection and copying during normal
business hours upon reasonable notice all Tax

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Records in their possession to the extent reasonably required by the other
Company in connection with the preparation of Tax Returns, audits, litigation,
or the resolution of items under this Agreement.

SECTION 9. TAX CONTESTS.

9.01 Notice. Each of the parties shall provide prompt notice to the other
party of any pending or threatened Tax audit, assessment or proceeding or other
Tax Contest of which it becomes aware related to Taxes for Tax Periods for which
it is indemnified by the other party hereunder. Such notice shall contain
factual information (to the extent known) describing any asserted Tax liability
in reasonable detail and shall be accompanied by copies of any notice and other
documents received from any Tax Authority in respect of any such matters. If an
indemnified party has knowledge of an asserted Tax liability with respect to a
matter for which it is to be indemnified hereunder and such party fails to give
the indemnifying party prompt notice of such asserted Tax liability, then (i) if
the indemnifying party is precluded from contesting the asserted Tax liability
in any forum as a result of the failure to give prompt notice, the indemnifying
party shall have no obligation to indemnify the indemnified party for any Taxes
arising out of such asserted Tax liability, and (ii) if the indemnifying party
is not precluded from contesting the asserted Tax liability in any forum, but
such failure to give prompt notice results in a monetary detriment to the
indemnifying party, then any amount which the indemnifying party is otherwise
required to pay the indemnified party pursuant to this Agreement shall be
reduced by the amount of such detriment.

9.02 Control of Tax Contests.

(a) Separate Company Taxes. In the case of any Tax Contest with respect to
any Separate Company Tax, the Company having liability for the Tax shall have
exclusive control over the Tax Contest, including exclusive authority with
respect to any settlement of such Tax liability.

(b) Consolidated or Combined Income Taxes. In the case of any Tax Contest
with respect to any Consolidated or Combined Income Tax, (i) Tenneco shall
control the defense or prosecution of the portion of the Tax Contest directly
and exclusively related to any Tenneco Adjustment, including settlement of any
such Tenneco Adjustment, and (ii) Packaging Company shall control the defense or
prosecution of the portion of the Tax Contest directly and exclusively related
to any Packaging Adjustment, including any settlement of any Packaging
Adjustment, and (iii) the two-person committee (the "Tax Contest Committee"),
comprised of one person selected by Packaging Company (as designated in writing
to Tenneco) and one person selected by Tenneco (as designated in writing to
Packaging Company) shall control the defense or prosecution of Joint Adjustments
and any and all administrative matters not directly and exclusively related to
any Tenneco Adjustment. Each person serving on the Tax Contest Committee shall
continue to serve unless and until he or she is replaced by the party
designating such person. Any and all matters to be decided by the Tax Contest
Committee shall require the unanimous approval of both persons serving on the
committee. In the event the Tax Contest Committee shall be deadlocked on any
matter, the provisions of Section 15 of this Agreement shall apply. A Company
shall not agree to any Tax liability for which another Company may be liable
under this Agreement, or compromise any claim for any Tax Benefit which another
Company may be entitled under this Agreement, without such other Company's
written consent (which consent may be given or withheld at the sole discretion
of the Company from which the consent would be required).

SECTION 10. EFFECTIVE DATE; TERMINATION OF PRIOR INTERCOMPANY TAX
ALLOCATION AGREEMENTS. This Agreement shall be effective on the Distribution
Date. Immediately prior to the close of business on the Distribution Date
Tenneco shall cause all Prior Intercompany Tax Allocation Agreements to be
terminated with respect to Packaging Company and its Affiliates. Upon such
termination, no further payments by or to Tenneco or by or to Packaging Company,
with respect to such agreements shall be made, and all other rights and
obligations resulting from such agreements between the Companies and their
Affiliates shall cease at such time.

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SECTION 11. NO INCONSISTENT ACTIONS. Each of the Companies covenants and
agrees that it will not take any action, and it will cause its Affiliates to
refrain from taking any action, which is inconsistent with the Tax treatment of
the Transactions as contemplated in the Ruling Request (any such action is
referred to in this Section 11 as a "Prohibited Action"), unless such Prohibited
Action is required by law, or the person acting has obtained the prior written
consent of each of the other parties (which consent shall not be unreasonably
withheld). With respect to any Prohibited Action proposed by a Company (the
"Requesting Party"), the other party (the "Requested Party") shall grant its
consent to such Prohibited Action if the Requesting Party obtains a ruling with
respect to the Prohibited Action from the Internal Revenue Service or other
applicable Tax Authority that is reasonably satisfactory to each of the
Requested Party (except that the Requesting Party shall not submit any such
ruling request if a Requested Party deter mines in good faith that filing such
request might have a materially adverse effect upon such Requested Party).
Without limiting the foregoing:

(a) No Inconsistent Plan or Intent. Packaging Company and Tenneco each
represent and warrant that neither it nor any of its Affiliates has any
plan or intent to take any action which is inconsistent with any factual
statements or representations in the Ruling Request. Regardless of any
change in circumstances, Packaging Company and Tenneco each covenant and
agree that it will not take, and it will cause its Affiliates to refrain
from taking, any such inconsistent action on or before the last day of the
calendar year ending after the second anniversary of the Distribution Date,
other than as permitted in this Section 11.

(b) 355(e) Covenant. Without in any manner limiting paragraph (a)
above, each of Packaging Company and Tenneco covenants and agrees that it
will not enter into any negotiations, agreement or arrangements with
respect to transactions or events (including stock issuances, option
grants, capital contributions or acquisitions, but not including the
Transactions), which may cause the Distribution to be treated as part of a
plan pursuant to which one or more persons acquire directly or indirectly
Packaging Company or Tenneco stock, as the case may be, representing a
"50-percent or greater interest" within the meaning of Section 355(d)(4) of
the Code.

(c) Amended or Supplemental Rulings. Each of the Companies covenants
and agrees that it will not file, and it will cause its Affiliates to
refrain from filing, any amendment or supplement to the Ruling Request
subsequent to the Distribution Date without the consent of the other
Company, which consent shall not be unreasonably withheld or delayed.

SECTION 12. SURVIVAL OF OBLIGATIONS. The representations, warranties,
covenants and agreements set forth in this Agreement shall be unconditional and
absolute and shall remain in effect without limitation as to time.

SECTION 13. EMPLOYEE MATTERS. Each of the Companies agrees to utilize, or
cause its Affiliates to utilize, the alternative procedure set forth in respect
to wage reporting set forth in Revenue Procedure 96-60, 1996-2 C.B. 399, with
respect to wage reporting.

SECTION 14. TREATMENT OF PAYMENTS; TAX GROSS UP.

14.01 Treatment of Tax Indemnity and Tax Benefit Payments. In the absence
of any change in tax treatment under the Code or other applicable Tax Law,

(a) any Tax indemnity payments made by a Company under Section 5 shall be
reported for Tax purposes by the payor and the recipient as distributions or
capital contributions, as appropriate, occurring immediately before the
distribution of all of the outstanding stock of Packaging Company to Tenneco
shareholders on the Distribution Date, and

(b) any Tax Benefit payments made by a Company under Section 6, shall be
reported for Tax purposes by the payor and the recipient as distributions or
capital contributions, as appropriate, occurring

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immediately before the distribution of all of the outstanding stock of Packaging
Company to Tenneco shareholders on the Distribution Date.

14.02 Tax Gross Up. If notwithstanding the manner in which Tax indemnity
payments and Tax Benefit payments were reported, there is an adjustment to the
Tax liability of a Company as a result of its receipt of a payment pursuant to
this Agreement, such payment shall be appropriately adjusted so that the amount
of such payment, reduced by the amount of all Income Taxes payable with respect
to the receipt thereof (but taking into account all correlative Tax Benefits
resulting from the payment of such Income Taxes), shall equal the amount of the
payment which the Company receiving such payment would otherwise be entitled to
receive pursuant to this Agreement.

14.03 Interest Under This Agreement. Anything herein to the contrary
notwithstanding, to the extent one Company ("indemnitor") makes a payment of
interest to another Company ("indemnitee") under this Agreement with respect to
the period from the date that the indemnitee made a payment of Tax to a Tax
Authority to the date that the indemnitor reimbursed the indemnitee for such Tax
payment, or with respect to the period from the date that the indemnitor
received a Tax Benefit to the date indemnitor paid the Tax Benefit to the
indemnitee, the interest payment shall be treated as interest expense to the
indemnitor (deductible to the extent provided by law) and as interest income by
the indemnitee (includible in income to the extent provided by law). The amount
of the payment shall not be adjusted under Section 14.02 to take into account
any associated Tax Benefit to the indemnitor or increase in Tax to the
indemnitee.

SECTION 15. DISAGREEMENTS. If after good faith negotiations the parties
cannot agree on the application of this Agreement to any matter, then the matter
will be referred to a nationally recognized accounting firm acceptable to each
of the parties (the "Accounting Firm"). The Accounting Firm shall furnish
written notice to the parties of its resolution of any such disagreement as soon
as practical, but in any event no later than 45 days after its acceptance of the
matter for resolution. Any such resolution by the Accounting Firm will be
conclusive and binding on all parties to this Agreement. In accordance with
Section 17, each party shall pay its own fees and expenses (including the fees
and expenses of its representatives) incurred in connection with the referral of
the matter to the Accounting Firm. All fees and expenses of the Accounting Firm
in connection with such referral shall be shared equally by the parties affected
by the matter.

SECTION 16. LATE PAYMENTS. Any amount owed by one party to another party
under this Agreement which is not paid when due shall bear interest at the Prime
Rate plus two percent, compounded semiannually, from the due date of the payment
to the date paid. To the extent interest required to be paid under this Section
16 duplicates interest required to be paid under any other provision of this
Agreement, interest shall be computed at the higher of the interest rate
provided under this Section 16 or the interest rate provided under such other
provision.

SECTION 17. EXPENSES. Except as provided in Section 15, each party and its
Affiliates shall bear their own expenses incurred in connection with preparation
of Tax Returns, Tax Contests, and other matters related to Taxes under the
provisions of this Agreement.

SECTION 18. SPECIAL RULES FOR DETERMINING MEMBERS OF GROUPS. For purposes
of this Agreement, the following special rules shall apply for determining the
members of the Packaging Group:

(a) Former Affiliates of Packaging Group. The Packaging Group shall be
deemed to include any corporation which (1) was a member of the affiliated
group (as defined in Code Section 1504(a), but treating all corporations as
"includable corporations" for purposes of such Code Section) of which
Tenneco is (or Old Tenneco was) the common parent, (2) was included in the
"packaging," "specialty packaging" or "paperboard packaging" segments for
purposes of segment reporting in Tenneco's (or Old Tenneco's) Annual
Reports on Form 10-K and (3) was sold, transferred, otherwise

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disposed of, or discontinued prior to the date hereof. Any entity
substantially all of the assets and liabilities of which have been
transferred to a member of the Packaging Group (e.g., by a statutory
merger) shall be treated as a member of the Packaging Group. For example,
Tenneco Packaging Specialty and Consumer Products Inc., a Delaware
corporation, shall, by virtue of its liquidation into Tenneco Packaging
Inc., be treated as a member of the Packaging Group. Similarly, Tenneco
United Kingdom Holdings Limited shall be treated as a member of the
Packaging Group.

SECTION 19. GENERAL PROVISIONS.

19.01 Addresses and Notices. Any notice, demand, request or report
required or permitted to be given or made to any party under this Agreement
shall be in writing and shall be deemed given or made when delivered in person
or when sent by first class mail or by other commercially reasonable means of
written communication (including delivery by an internationally recognized
courier service or by facsimile transmission) to the party at the party's
address as follows:

If to Tenneco:

With a copy to:

If to Packaging Company:

With a copy to:

A party may change the address for receiving notices under this Agreement
by providing written notice of the change of address to the other parties.

19.02 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their successors and assigns.

19.03 Waiver. No failure by any party to insist upon the strict
performance of any obligation under this Agreement or to exercise any right or
remedy under this Agreement shall constitute waiver of any such obligation,
right, or remedy or any other obligation, rights, or remedies under this
Agreement.

19.04 Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity,
legality, and enforceability of the remaining provisions contained herein shall
not be affected thereby.

19.05 Further Action. The parties shall execute and deliver all documents,
provide all information, and take or refrain from taking action as may be
necessary or appropriate to achieve the purposes of this Agreement, including
the execution and delivery to the other parties and their Affiliates and
representatives of such powers of attorney or other authorizing documentation as
is reasonably necessary or appropriate in connection with Tax Contests (or
portions thereof) under the control of such other parties in accordance with
Section 9.

19.06 Integration. This Agreement constitutes the entire agreement among
the parties pertaining to the subject matter of this Agreement and supersedes
all prior agreements and understandings pertaining thereto. In the event of any
inconsistency between this Agreement and the Distribution Agreement or any other
agreements relating to the transactions contemplated by the Distribution
Agreement, the provisions of this Agreement shall control.

19.07 Construction. The language in all parts of this Agreement shall in
all cases be construed according to its fair meaning and shall not be strictly
construed for or against any party.

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19.08 No Double Recovery; Subrogation. No provision of this Agreement
shall be construed to provide an indemnity or other recovery for any Taxes
costs, damages, or other amounts (including Tax Benefits) for which the damaged
party has been fully compensated under any other provision of this Agreement or
under any other agreement or action at law or equity. Unless expressly required
in this Agreement, a party shall not be required to exhaust all remedies
available under other agreements or at law or equity before recovering under the
remedies provided in this Agreement. Subject to any limitations provided in this
Agreement (for example, the limitation on filing claims for refund in Section
4.07), the indemnifying party shall be subrogated to all rights of the
indemnified party for recovery from any third party.

19.09 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.

19.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts
executed in and to be performed in that State.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by the respective officers as of the date set forth above.

TENNECO INC.

By:

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

Its:

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

By:

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

Its:

TENNECO DISTRIBUTION AGREEMENT

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EXHIBIT I

SHARED AGREEMENTS

SECTION 1.

1. Corporate Travel Agreement dated as of November 30, 1998 by and between
American Airlines, Inc. and Tenneco Business Services Inc. (travel incentive).

2. Corporate Supply Agreement dated as of July 1, 1996 by and between Boise
Cascade Office Products Corporation and Tenneco Business Services Inc. (office
supplies).

3. Corporate Supply Agreement dated as of February 1, 1999 by and between
Xxxxxx Distribution Division of Xxxxxx Group, Inc. and Tenneco Business Services
Inc. (fasteners).

4. Corporate Agreement dated as of October 30, 1998 by and between Delta
Air Lines, Inc. (on its own behalf and on behalf of Austrian Airlines, N.V.
Sabena S.A. and Swiss Air Transport Company) and Tenneco Business Services Inc.
(air travel incentive).

5. Global Pricing Agreement dated as of February 4, 1998 by and between
Federal Express Corporation and Tenneco Business Services Inc. (package
delivery).

6. Corporate Account Agreement dated as of October 17, 1998 by and between
The Hertz Corporation and Tenneco Business Services Inc. (vehicle rental).

7. Agreement for Services dated as of May 16, 1996 by and between Xxxxx
Services, Inc. and Tenneco Business Services Inc. (services/temporary workers).

8. Supply Agreement dated as of August 31, 1995 by and among Motion
Industries, Inc., Xxxxx Bearing Company, a division of Motion Industries, Inc.
and Tenneco Business Services Inc. (bearings, etc.).

9. Preferred Carrier Agreement dated as 1998 by and between Northwest
Airlines, Inc. and Tenneco Business Services Inc. (travel incentive).

10. Security Services Contract dated as of September 15, 1995 by and
between Per Mar Security and Research Corp. and Tenneco Business Services Inc.
(security services).

11. Travel Services Agreement dated as of September 3, 1996 by and between
Xxxxxxxxxx International, Inc. and Tenneco Business Services Inc. (travel
services).

12. Agreement by and between Equilon Enterprises LLC (formerly Texaco
Lubricants Company) and Tenneco Business Services Inc. (industrial lubricants).

13. UPS Ground, Air and International Incentive Program dated as of April
28, 1997 by and between United Parcel Service, Inc. and Tenneco Business
Services Inc. (carrier/package delivery).

14. Corporate Supply Agreement dated as of April 1996 by and between
Xxxxxxx Computer Services, Inc. and Tenneco Business Services Inc. (business
forms).

15. Corporate Supply Agreement dated as of June 1, 1997 by and between
WESCO Distribution Inc. and Tenneco Business Services Inc. (electrical
supplies).

16. Copier Outsourcing Agreement and Various Configuration Changes and
Amendments dated as of May 8, 1996 by and between Xerox Business Services, a
division of Xerox Corporation, and Tenneco Business Services Inc. (copiers).

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SECTION 2.

1. Services Agreement dated as of November 30, 1998 by and between Xxxxx
Security & Investigation, Inc. and Tenneco Business Services Inc. (security
services).

2. Purchasing Card Agreement dated as of March 18, 1996 by and between
Citibank (South Dakota) N.A. and Tenneco Business Services Inc., including its
parent Tenneco Inc. (purchasing card/credit card).

3. Purchasing Card Agreement dated as of April 2, 1998 by and between
Citibank Canada and Tenneco Business Services Inc. (Canadian purchasing card
program).

4. Consultancy Services Agreement dated as of April 1, 1997 by and between
Dames & Xxxxx and Tenneco Business Services Inc. (environmental
services/audits).

5. Central Travel System (CTS) Program Agreement dated as of July 11, 1996
by and between First Bank of South Dakota (National Association) and Tenneco
Business Services Inc. (credit card/travel and entertainment card).

6. Corporate Card Program Agreement dated as of July 11, 1996 by and
between First Bank of South Dakota (National Association) and Tenneco Business
Services Inc. (corporate card program).

7. Agreement by and between Xxxxx Lubricants Company and Tenneco Business
Services Inc. (lubricants).

8. National Account Service Agreement dated as of February 3, 1999 by and
between G&K Services and Tenneco Business Services Inc. (uniforms).

9. Amended and Restated Administrative Service Agreement dated as of April
9, 1999 by and between Xxxxxx Associates LLC and Tenneco Business Services Inc.
(administrative services).

10. Supplier Management Agreement dated as of April 26, 1996 by and between
Xxxxx Safety, Inc. and Tenneco Business Services Inc. (safety equipment).

11. Special Customer Arrangement dated as of March 5, 1999 by and between
MCI Telecommunications Corporation and Tenneco Business Services Inc.
(telecommunication services).

12. Performance Based Contract for Services dated as of March 17, 1997 by
and between Price Waterhouse LLP and Tenneco Business Services Inc.
(international assignment services).

13. Relocation Services Agreement dated as of March 15, 1996 by and between
Prudential Residential Services Limited Partnership d/b/a Prudential Resources
Management, Tennessee Gas Pipeline Company and Tenneco Business Services Inc.
(relocation services).

14. Corporate Visa Card Agreement undated by and between Royal Bank of
Canada and Tenneco Business Services Inc. (credit card/Canadian travel card).

15. Parts Washing and Waste Disposal Services Agreement dated as of 1997 by
and between Safety-Kleen Corp. and Tenneco Business Services Inc. (parts
washing/waste disposal services).

16. Corporate Volume Agreement dated as of September 22, 1998 by and
between United Air Lines, Inc. and Tenneco Business Services Inc. (travel
incentive).

17. Services Contract dated as of September 1, 1995 by and between The
Wackenhut Corporation and Tenneco Business Services Inc. (security services).

18. Lease dated as of November 19, 1992 by and between Wheels, Inc. and
Tenneco Business Services Inc. (original agreement with Tennessee Gas &
Pipeline, assigned to TBS) (vehicle lease).

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EXHIBIT J

EXCEPTIONS TO RESIGNATIONS OF COMMON DIRECTORS, OFFICERS AND EMPLOYEES

1. Investment Committee of the Tenneco Inc. General Employee Benefit Trust
(existing members may remain as members of the Committee until March 31, 2000).

2. Tenneco Packaging (UK) Limited (Xxxxx X. Xxxxxxxx and Xxxxxxx Kitchen to
remain as directors).

3. Tenneco Rabbi Trust created in 1999 in connection with the spin-off
(existing trustees may remain trustees after the Distribution).

4. Tenneco Inc. Project Committee appointed in connection with the spin-off
(existing members may remain after the Distribution).

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EXHIBIT K

FORM OF

TRADEMARK TRANSITION LICENSE AGREEMENT

THIS TRADEMARK TRANSITION LICENSE AGREEMENT (this "Trademark Transition
License Agreement") is made and entered into as of , 1999, (the
"Effective Date") by and between Tenneco Inc., a Delaware company to be renamed
Tenneco Automotive Inc., a corporation organized and existing under the laws of
the State of Delaware, whose principal place of business is located at 000 Xxxxx
Xxxxx Xxxxx, Xxxx Xxxxxx, XX 00000 ("Licensor"), and Tenneco Packaging Inc. (to
be renamed), a corporation organized under the laws of the State of Delaware,
whose principal place of business is located at 0000 Xxxx Xxxxx Xxxxx, Xxxx
Xxxxxx, XX 00000 ("Licensee").

WHEREAS, Pursuant to the terms of that certain Distribution Agreement dated
, 1999, (the "DISTRIBUTION AGREEMENT"), Licensee and
Licensor have agreed to cause this Trademark Transition License Agreement to be
entered into regarding the use of certain trademarks by Licensee.

WHEREAS, Licensor has adopted and is using the name and xxxx "Tenneco",
alone and in combination with other terms and/or symbols and variations thereof,
in the United States and elsewhere throughout the world and is the owner of the
U.S. Trademark Applications and the U.S. Trademark Registrations, listed on
Exhibit A of this Agreement, from the United States Patent and Trademark Office,
as well as their foreign counterparts, and other foreign trademarks listed on
Exhibit A (hereinafter individually and collectively referred to as the
"Trademark"); and

WHEREAS, Licensee previously has used the Trademark and is desirous of
continuing to use said Trademark with respect to the goods and services listed
on Exhibit B, to assist Licensee during its transition to a new identity and for
the limited purposes more fully described below;

NOW, THEREFORE, in consideration of the foregoing Recitals which are hereby
incorporated into the operative terms hereof, the mutual promises contained in
this Agreement and good and valuable consideration from the Licensee to the
Licensor, the receipt and sufficiency of which is hereby acknowledged by said
Licensor, the parties hereby agree as follows:

1. LICENSE. Licensor grants to Licensee and its Subsidiaries (as such
term is defined in the Distribution Agreement), the limited, non-exclusive
right to use the Trademark under the common law and under the auspices and
privileges provided by any of the registrations covering the same during
the term of this Agreement, and Licensee hereby undertakes to use the
Trademark as follows:

a. For a period of sixty (60) days following the Effective Date of
this Agreement, Licensee and its Subsidiaries may continue to use the
Trademark in their corporate names. After sixty (60) days following the
Effective Date of this Agreement, or as soon thereafter as reasonably
practical in non-U.S. jurisdictions, Licensee shall change or cause to
be changed, if necessary, such corporate names to delete the Trademark
or any other word that is confusingly similar to the Trademark.

b. For a period of nine (9) months following the Effective Date of
this Agreement, Licensee and its Subsidiaries shall be entitled to use
their supplies and documents which have imprinted thereon the Trademark
to the extent that such supplies and documents were existing inventory
prior to the Effective Date of this Agreement. Licensee shall not print
or permit to be printed any new supplies or documents bearing the
Trademark from and after the Effective Date of this Agreement.

c. For a period of eighteen (18) months from the Effective Date of
this Agreement, Licensee and its Subsidiaries may use the Trademark on
signs, displays or other identifications or

TENNECO DISTRIBUTION AGREEMENT

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advertising material (other than supplies or documents, which shall be
governed by paragraph b above), in each case to the extent existing as
of the date hereof. Licensee shall not, and shall not permit its
Subsidiaries to, prepare or install any new signs, displays or other
identifications or advertising material bearing the Trademark. Licensee
shall remove or cause to be removed any and all references to the
Trademark from any and all signs, displays or other identifications or
advertising material by the end of the eighteen (18) month period.

2. QUALITY OF SERVICES. Licensee agrees to maintain and cause its
Subsidiaries to maintain such quality standards as shall be prescribed by
Licensor in the conduct of the business operations with which the Trademark
is used. Licensee shall, and shall cause its Subsidiaries to, use the
Trademark only with goods and services listed in Exhibit B rendered by
Licensee and/or its Subsidiaries in accordance with the terms of this
Agreement and with the guidance and directions furnished to the Licensee by
the Licensor, or its authorized representatives or agents, from time to
time, if any; but always the quality of the goods and services shall be
satisfactory to the Licensor or as specified by it.

3. INSPECTION. Licensee will permit duly authorized representatives of
the Licensor to inspect the premises of Licensee and/or its Subsidiaries
using the Trademarks at all reasonable times, for the purpose of
ascertaining or determining compliance with Paragraphs 1 and 2 hereof.

4. USE OF TRADEMARK. When using the Trademark under this Agreement,
Licensee undertakes to, and shall cause its Subsidiaries to, comply with
all laws pertaining to the Trademark. This provision includes compliance
with marking requirements. Licensee represents and warrants that all goods
and services to be sold under the Trademark and the marketing, sales, and
distribution of them shall meet or exceed all federal, state, local and
foreign laws, ordinances, standards, regulations, and guidelines pertaining
to such products or activities, including, but not limited to those
pertaining to product safety, quality, labeling and propriety. Licensee
agrees that it will not package, market, sell, or distribute any goods or
services or cause or permit any goods or services to be packaged, marketed,
sold or distributed in violation of any such federal, state, local or
foreign law, ordinance, standard, regulation or guideline.

5. EXTENT OF LICENSE. The license granted herein is for the sole
purpose of assisting Licensee in its transition to a new identity and is
not assignable or transferable in any manner whatsoever. Licensee has no
right to grant any sublicenses or to use the Trademark for any other
purpose.

6. INDEMNITY. Licensee acknowledges that neither it nor its
Subsidiaries will have any claims against Licensor hereunder for any damage
to property or injury to persons arising out of the operation of their
business. Licensee agrees to indemnify, hold harmless, and defend Licensor
and its Subsidiaries, affiliates and authorized representatives with legal
counsel acceptable to Licensor from and against any and all demands,
claims, injuries, losses, damages, actions, suits, causes of action,
proceedings, judgments, liabilities and expenses, including attorneys'
fees, court costs and other legal expenses, arising out of or connected
with:

a. the use of the Trademark by Licensee or any of its Subsidiaries
or affiliates; or

b. any breach by Licensee or any of its Subsidiaries of any
provision of this Agreement or of any warranty made by Licensee in this
Agreement.

No approval by Licensor of any action by Licensee or any of its
Subsidiaries or affiliates shall affect any right of Licensor to
indemnification hereunder.

7. TERMINATION. Except as otherwise provided herein, this Agreement
shall remain in full force and effect for the periods stated in Paragraph 1
above. However, Licensor retains the right to

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immediately terminate this Agreement in the event of a material breach of
any term of this Agreement by Licensee or any of its Subsidiaries, upon
written notice to the Licensee.

8. OWNERSHIP OF TRADEMARK. The Licensee acknowledges Licensor's
exclusive right, title and interest in and to the Trademark and will not at
any time do or cause or permit to be done any act or thing contesting or in
any way impairing or tending to impair any part or all of such right, title
and interest. In connection with the use of the Trademark, Licensee and
each of its Subsidiaries shall not in any manner represent that it has any
ownership in the Trademark or registrations thereof, and acknowledges that
use of the Trademark shall inure to the benefit of the Licensor. On
termination of this Agreement or any portion hereof in any manner provided
herein, the Licensee will destroy or cause to be destroyed all signs,
displays or other identifications or advertising material, supplies and
documents, and any other materials bearing the Trademark and will certify
to Licensor in writing that it has done so. Furthermore, Licensee and each
of its Subsidiaries will not at any time adopt or use without the
Licensor's prior written consent, any word or xxxx which is likely to be
similar to or confusing with the Trademark.

9. INFRINGEMENT OF TRADEMARK. If Licensee or any of its Subsidiaries
learns of any actual or threatened infringement of the Trademark or of the
existence, use, or promotion of any xxxx or design similar to the
Trademark, Licensee shall promptly notify Licensor. Licensor has the right
to decide at its sole discretion what legal proceedings or other action, if
any, shall be taken, by who, how such proceedings or other action shall be
conducted, and in whose name such proceedings or other action shall be
performed. Any legal proceedings instituted pursuant to this Section shall
be for the sole benefit of Licensor and all sums recovered in such
proceedings whether by judgment, settlement, or otherwise, shall be
retained solely and exclusively by Licensor.

10. INJUNCTIVE RELIEF. Licensee acknowledges that any breach or
threatened breach of any of Licensee's covenants in this Agreement relating
to the Trademark, including, without limitation, Licensee's and/or any of
its Subsidiaries' failure to cease the manufacture, sale, marketing, or
distribution of the goods bearing the Trademark at the termination or
expiration of this Agreement will result in immediate and irreparable
damage to Licensor and to the rights of any subsequent licensee of them.
Licensee acknowledges and admits that there is no adequate remedy at law
for failure to cease such activities, and Licensee agrees that in the event
of such breach or threatened breach, Licensor shall be entitled to
temporary and permanent injunctive relief and such other relief as any
court with jurisdiction may deem just and proper.

11. SEVERABILITY. If any provision of this Agreement shall be
determined to be illegal and unenforceable by any court of law or any
competent government or other authority, the remaining provisions shall be
severable and enforceable in accordance with their terms so as this
Agreement without such terms or provisions does not fail of its essential
purpose or purposes. The parties will negotiate in good faith to replace
any such illegal or unenforceable provision or provisions with suitable
substitute provisions which maintain the economic purposes and intentions
of this Agreement.

12. NOTICE. Any notices required or permitted to be given under this
Agreement shall be deemed sufficiently given if mailed by registered mail,
postage prepaid, addressed to the party to be notified at its address shown
above (followed by facsimile) or at such other address as may be furnished
in writing to the notifying party.

13. MISCELLANEOUS.

a. CAPTIONS. The captions for each Section have been inserted for
the sake of convenience and shall not be deemed to be binding upon the
parties for the purpose of interpretation of this Agreement.

b. INTERPRETATION. The parties agree that each party and its
counsel has reviewed this Agreement and the normal rule of construction
that any ambiguities are to be resolved

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against the drafting party shall not be employed in the interpretation
of this Agreement. c. WAIVER. The failure of Licensor to insist in any
one or more instance upon the performance of any term, obligation, or
condition of this Agreement by Licensee or any of its Subsidiaries or to
exercise any right or privilege herein conferred upon Licensor shall not
be construed as thereafter waiving such term, obligation, or condition,
or relinquishing such right or privilege, and the acknowledged waiver or
relinquishment by Licensor of any default or right shall not constitute
waiver of any other default or right. No waiver shall be deemed to have
been made unless expressed in writing.

d. TIME OF ESSENCE. Time is of the essence with respect to the
obligations to be performed under this Agreement, and Licensee shall use
its best efforts to cause the transition of all existing materials,
including signs and displays, bearing the Trademark to a new name and
xxxx.

e. RIGHTS CUMULATIVE. Except as expressly provided in this
Agreement, and to the extent permitted by law, any remedies described in
this Agreement are cumulative and not alternative to any other remedies
available at law or in equity.

f. GOVERNING LAW. ALL QUESTIONS OR DISPUTES CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE
SCHEDULES AND EXHIBITS HERETO SHALL BE GOVERNED BY THE INTERNAL LAWS,
AND NOT THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE. EACH OF THE
PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY (i)
AGREES TO BE SUBJECT TO, AND HEREBY CONSENTS AND SUBMITS TO, THE
JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND OF THE FEDERAL
COURTS SITTING IN THE STATE OF DELAWARE, (ii) TO THE EXTENT SUCH PARTY
IS NOT OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF DELAWARE,
HEREBY APPOINTS THE CORPORATION TRUST COMPANY, AS SUCH PARTY'S AGENT IN
THE STATE OF DELAWARE FOR ACCEPTANCE OF LEGAL PROCESS AND (iii) AGREES
THAT SERVICE MADE ON ANY SUCH AGENT SET FORTH IN (ii) ABOVE SHALL HAVE
THE SAME LEGAL FORCE AND EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY
WITHIN THE STATE OF DELAWARE.

Attest: LICENSOR
-------------------------------------------- By:
--------------------------------------------

Attest: LICENSEE
-------------------------------------------- By:
--------------------------------------------

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EXHIBIT A

REGISTRATION EXPIRATION
TRADEMARK NO. DATE
--------- ------------ ----------

APPLICATION APPLICATION
TRADEMARK NO. NO.
--------- ----------- -----------

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EXHIBIT B

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