Kinder Morgan, Inc. Form 8-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Hb/CKd78kjLJwqu2FArzEDmLDGeFwDipecqSE6Mk96yvTaYjonCm2vVDJS85r3go CkMDbBPeHhPmOdAJmN0pQg== 0000054502-05-000105.txt : 20051215 0000054502-05-000105.hdr.sgml : 20051215 20051215150029 ACCESSION NUMBER: 0000054502-05-000105 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20051215 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051215 DATE AS OF CHANGE: 20051215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KINDER MORGAN INC CENTRAL INDEX KEY: 0000054502 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 480290000 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06446 FILM NUMBER: 051266344 BUSINESS ADDRESS: STREET 1: 500 DALLAS STREET 2: SUITE 1000 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 713-369-9000 MAIL ADDRESS: STREET 1: 500 DALLAS STREET 2: SUITE 1000 CITY: HOUSTON STATE: TX ZIP: 77002 FORMER COMPANY: FORMER CONFORMED NAME: K N ENERGY INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: KN ENERGY INC DATE OF NAME CHANGE: 19920430 FORMER COMPANY: FORMER CONFORMED NAME: KANSAS NEBRASKA NATURAL GAS CO INC DATE OF NAME CHANGE: 19830403 8-K 1 kmi8k121505.htm KINDER MORGAN, INC. FORM 8-K, 12-15-05 Kinder Morgan, Inc. Form 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 9, 2005

KINDER MORGAN, INC.
(Exact name of registrant as specified in its charter)


Kansas (State or other jurisdiction of incorporation)	1-06446 (Commission File Number)	48-0290000 (I.R.S. Employer Identification No.)

500 Dallas Street, Suite 1000
Houston, Texas 77002
(Address of principal executive offices, including zip code)

713-369-9000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

The descriptions of the Indenture and Registration Rights Agreement in Item 2.03 of this Form 8-K are incorporated into this Item 1.01 by reference.

Item 2.03 Creation of a Direct Financial Obligation.

On December 9, 2005, Kinder Morgan Finance Company, ULC (“Finance Company”), an Alberta unlimited liability corporation and an indirect wholly owned subsidiary of Kinder Morgan, Inc. (“KMI”), issued $750,000,000 aggregate principal amount of 5.35% notes due 2011, $850,000,000 aggregate principal amount of 5.70% notes due 2016 and $550,000,000 aggregate principal amount of 6.40% notes due 2036. The notes of each series are fully and unconditionally guaranteed by KMI. The net proceeds from the notes were distributed to another subsidiary of KMI to repay in full the short-term bank loan incurred to finance the cash portion of the consideration for KMI’s acquisition of Terasen Inc. on November 30, 2005. The notes were sold in a private placement pursuant to a Purchase Agreement, dated December 6, 2005, among Finance Company, KMI and Merrill Lynch, Pierce, Fenner & Smith Inc orporated and Citigroup Global Markets Inc., as representatives of the several initial purchasers named in the Purchase Agreement, and resold by the initial purchasers to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933. The notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

The notes are governed by an Indenture, dated December 9, 2005, among Finance Company, KMI and Wachovia Bank, National Association, as trustee. The 2011 notes will mature on January 5, 2011, the 2016 notes will mature on January 5, 2016 and the 2036 notes will mature on January 5, 2036, unless sooner redeemed. Interest on the 2011 notes will accrue at the rate of 5.35% per year. Interest on the 2016 notes will accrue at the rate of 5.70% per year. Interest on the 2036 notes will accrue at the rate of 6.40% per year. Interest on the notes of each series will be payable semiannually in arrears on January 5 and July 5 of each year, commencing on July 5, 2006. Each series of notes is the senior unsecured indebtedness of Finance Company, ranks equally and ratably in right of payment with each other series and all of Finance Company’s other senior unsecured and unsubordinated indebtedness from time to time outstanding and is senior in right of payment to all of Finance Company’s subordinated indebtedness. Each series of notes is guaranteed on a senior unsecured basis by KMI, which guarantees rank equally and ratably with each other and all other unsecured and unsubordinated indebtedness of KMI from time to time outstanding, and are effectively junior in right of payment to any future secured indebtedness of KMI and to all indebtedness and other liabilities of KMI’s subsidiaries, other than Finance Company.

All payments made by Finance Company in respect of the notes of any series or by KMI under its guarantee will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments, or other governmental charges of any nature imposed or levied by or on behalf of Canada or any political subdivision or authority thereof or therein having power to tax (“Taxes”), unless Finance Company is, or KMI under its guarantee is, required by law or by the interpretation or administration thereof by the relevant government authority or agency to withhold or deduct such Taxes. If Finance Company is, or KMI under its

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guarantee is, so required to withhold or deduct any amount for or on account of Taxes (or if a holder properly pays such Taxes directly as a result of (1) such holder being exempt from withholding as a result of its status for Canadian federal income tax purposes, or (2) Finance Company’s failure, or KMI’s failure under its guarantee, to properly withhold or deduct such Taxes), Finance Company or KMI under its guarantee, as the case may be, will make the required withholding or deduction, make payment of the amount so withheld or deducted to the appropriate government authority and pay such additional amounts (“Additional Amounts”) as may be necessary to ensure that the net amounts received by the holders after the withholding or deduction (including any withholding or deduction from such Additional Amounts) (or after the proper payment of such Taxes directly by the hold er (including such Taxes on Additional Amounts)) will not be less than the amounts of principal, interest and premium which would have been received in respect of the notes in the absence of the withholding or deduction (or proper payment of Taxes).

In the Indenture, any of the following is an Event of Default with respect to the notes of any series:

Finance Company’s failure to pay the principal of or premium, if any, on any notes of that series when due;

Finance Company’s failure to pay interest or Additional Amounts, if any, on any notes of that series for 30 days;

failure to perform, or breach of, any term, covenant or warranty of Finance Company’s or KMI’s, as applicable, in the Indenture, other than a term, covenant or warranty a default in the performance of which has expressly been included in the Indenture solely for the benefit of series of notes other than that series, that continues for 90 days after being given written notice;

Finance Company’s or KMI’s bankruptcy, insolvency or reorganization; or

failure to keep KMI’s full and unconditional guarantee with respect to that series in place.

If an Event of Default with respect to a series of notes occurs and is continuing, the trustee or the holders of at least 25% in principal amount of all of the outstanding notes of that series may declare the principal of all the notes of that series to be due and payable. When such declaration is made, such amount will be immediately due and payable. The holders of a majority in principal amount of the outstanding notes of such series may rescind such declaration and its consequences if all existing Events of Default have been cured or waived, other than nonpayment of principal or interest or Additional Amounts, if any, that has become due solely as a result of acceleration.

Finance Company, KMI and the initial purchasers also entered into a Registration Rights Agreement, dated December 9, 2005. Pursuant to the Registration Rights Agreement, Finance Company and KMI will agree to use their reasonable efforts to:

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file with the Securities and Exchange Commission, no later than 120 days after the closing date of the notes offering, an exchange offer registration statement under the Securities Act for registered notes of each series, called exchange notes, to be exchanged for the notes of that series; and

cause the registration statement for these exchange notes to become effective no later than 210 days after the closing date.

The Registration Rights Agreement provides that Finance Company and KMI, in specified circumstances, will use their reasonable efforts to file a shelf registration statement for resales of the notes and will pay liquidated damages on the notes of each series upon the occurrence of specified events.

The foregoing descriptions of the Purchase Agreement, the Indenture and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the respective agreements which are filed as Exhibits 99.1, 4.1 and 4.3, respectively, to this Form 8-K and incorporated into this Item 2.03 by reference.

Item 9.01. Financial Statements and Exhibits.

(c)

Exhibits.

4.1

Indenture, dated December 9, 2005, among Kinder Morgan Finance Company, ULC, Kinder Morgan, Inc. and Wachovia Bank, National Association, as Trustee.

4.2

Form of note (contained in the Indenture filed as Exhibit 4.1).

4.3

Registration Rights Agreement, dated December 9, 2005, among Kinder Morgan Finance Company, ULC, Kinder Morgan, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several initial purchasers.

99.1

Purchase Agreement, dated December 9, 2005, among Kinder Morgan Finance Company, ULC, Kinder Morgan, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., as representatives of the several initial purchasers.

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S I G N A T U R E

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

KINDER MORGAN, INC.

Dated: December 15, 2005

By: /s/ Joseph Listengart

Joseph Listengart

Vice President and General Counsel

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EXHIBIT INDEX


Exhibit Number	Description

4.1	Indenture, dated December 9, 2005, among Kinder Morgan Finance Company, ULC, Kinder Morgan, Inc. and Wachovia Bank, National Association, as Trustee.
4.2	Form of note (contained in the Indenture filed as Exhibit 4.1).
4.3	Registration Rights Agreement, dated December 9, 2005, among Kinder Morgan Finance Company, ULC, Kinder Morgan, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several initial purchasers.
99.1	Purchase Agreement, dated December 9, 2005, among Kinder Morgan Finance Company, ULC, Kinder Morgan, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., as representatives of the several initial purchasers.

EX-4.1 2 kmiex41indenture.htm KMI EXHIBIT 4.1 INDENTURE Kinder Morgan, Inc. Indenture

Exhibit 4.1

KINDER MORGAN FINANCE COMPANY, ULC

as Issuer

KINDER MORGAN, INC.

as Guarantor

and

WACHOVIA BANK, NATIONAL ASSOCIATION

as Trustee

__________________________

INDENTURE

Dated as of December 9, 2005

__________________________

$750,000,000 of 5.35% Senior Notes due 2011

$850,000,000 of 5.70% Senior Notes due 2016

$550,000,000 of 6.40% Senior Notes due 2036

KINDER MORGAN FINANCE COMPANY, ULC

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

Trust Indenture Act Section

Indenture Section

§310

(a)(1)

609

(a)(2)

609

(a)(3)

Not Applicable

(a)(4)

Not Applicable

(b)

608; 610

§311(a)

613

(b)

613

§312(a)

701; 702

(b)

702

(c)

702

§313

(a)

703

(b)

703

(c)

703

(d)

703

§314

(a)

704

(a)(4)

1004

(b)

Not Applicable

(c)(1)

102

(c)(2)

102

(c)(3)

Not Applicable

(d)

Not Applicable

(e)

102

§315

(a)

601, 603

(b)

602

(c)

601

(d)

601

(e)

514

§316

(a)

101

(a)(1)(A)

502; 512

(a)(1)(B)

513

(a)(2)

Not Applicable

(b)

508

(c)

104

§317

(a)(1)

503

(a)(2)

504

(b)

1003

§318

(a)

107

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

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL

APPLICATION

Section 101.

Definitions

Section 102.

Compliance Certificates and Opinions

Section 103.

Form of Documents Delivered to Trustee

Section 104.

Acts of Holders; Record Dates

Section 105.

Notices, Etc., to Trustee, the Company and the Guarantor

Section 106.

Notice to Holders; Waiver

Section 107.

Conflict with Trust Indenture Act

Section 108.

Effect of Headings and Table of Contents

Section 109.

Successors and Assigns

Section 110.

Separability Clause

Section 111.

Benefits of Indenture

Section 112.

Governing Law

Section 113.

Legal Holidays

Section 114.

Language of Notices, Etc

Section 115.

Interest Limitation

Section 116.

No Adverse Interpretation of Other Agreements and

Instruments

ARTICLE II

SECURITY FORMS

Section 201.

Forms Generally

Section 202.

Forms of Face of Securities

Section 203.

Forms of Reverse of Securities

Section 204.

Form of Trustee's Certificate and Authorization

ARTICLE III

THE SECURITIES

Section 301.

Title and Terms

Section 302.

Denominations

Section 303.

Execution, Authentication, Delivery and Dating

Section 304.

Temporary Securities

Section 305.

Transfer and Exchange

Section 306.

Mutilated, Destroyed, Lost and Stolen Securities

Section 307.

Payment of Interest; Interest Rights Preserved

Section 308.

Persons Deemed Owners

Section 309.

Cancellation

Section 310.

Computation of Interest

Section 311.

CUSIP Numbers

ARTICLE IV

SATISFACTION AND DISCHARGE

Section 401.

Satisfaction and Discharge of Indenture

Section 402.

Application of Trust Money

ARTICLE V

REMEDIES

Section 501.

Events of Default

Section 502.

Acceleration of Maturity; Rescission and Annulment

Section 503.

Collection of Indebtedness and Suits for Enforcement by

Trustee

Section 504.

Trustee May File Proofs of Claim

Section 505.

Trustee May Enforce Claims Without Possession of Securities

Section 506.

Application of Money Collected

Section 507.

Limitation on Suits

Section 508.

Unconditional Right of Holders to Receive Principal, Premium

and Interest

Section 509.

Restoration of Rights and Remedies

Section 510.

Rights and Remedies Cumulative

Section 511.

Delay or Omission Not Waiver

Section 512.

Control by Holders

Section 513.

Waiver of Past Defaults

Section 514.

Undertaking for Costs

ARTICLE VI

THE TRUSTEE

Section 601.

Certain Duties and Responsibilities

Section 602.

Notice of Defaults

Section 603.

Certain Rights of Trustee

Section 604.

Not Responsible for Recitals or Issuance of Securities

Section 605.

May Hold Securities

Section 606.

Money Held in Trust

Section 607.

Compensation and Reimbursement

Section 608.

Disqualification; Conflicting Interests

Section 609.

Corporate Trustee Required; Eligibility

Section 610.

Resignation and Removal; Appointment of Successor

Section 611.

Acceptance of Appointment by Successor

Section 612.

Merger, Conversion, Consolidation or Succession to Business

Section 613.

Preferential Collection of Claims Against the Company or the

Guarantor

Section 614.

Appointment of Authenticating Agent

ARTICLE VII

HOLDERS' LISTS AND REPORTS BY THE TRUSTEE, THE

COMPANY AND THE GUARANTOR

Section 701.

Company to Furnish Trustee Names and Addresses of Holders

Section 702.

Preservation of Information; Communications to Holders

Section 703.

Reports by Trustee

Section 704.

Reports by the Company and the Guarantor

ARTICLE VIII

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR

LEASE

Section 801.

The Company May Consolidate, Etc., Only on Certain Terms

Section 802.

The Guarantor May Consolidate, Etc., Only on Certain Terms

Section 803.

Successor Substituted

ARTICLE IX

SUPPLEMENTAL INDENTURES

Section 901.

Supplemental Indentures Without Consent of Holders

Section 902.

Supplemental Indentures with Consent of Holders

Section 903.

Execution of Supplemental Indentures

Section 904.

Effect of Supplemental Indentures

Section 905.

Conformity with Trust Indenture Act

Section 906.

Reference in Securities to Supplemental Indentures

ARTICLE X

COVENANTS

Section 1001.

Payment of Principal, Premium and Interest

Section 1002.

Maintenance of Office or Agency

Section 1003.

Money for Securities Payments to Be Held in Trust

Section 1004.

Statement by Officers as to Default

Section 1005.

Limitations on Liens

Section 1006.

Waiver of Certain Covenants

Section 1007.

Officers' Certificate as to Liquidated Damages

iii

ARTICLE XI

REDEMPTION OF SECURITIES

Section 1101.

Optional Redemption

Section 1102.

Election to Redeem; Notice to Trustee

Section 1103.

Selection by Trustee of Securities to be Redeemed

Section 1104.

Notice of Redemption

Section 1105.

Deposit of Redemption Price

Section 1106.

Securities Payable on Redemption Date

Section 1107.

Securities Redeemed in Part

Section 1108.

Redemption for Changes in Withholding Taxes and Payment of

Additional Amounts

ARTICLE XII

NON-RECOURSE

Section 1201.

No Personal Liability of Officers, Directors, Employees or

Shareholders

ARTICLE XIII

DEFEASANCE

Section 1301.

Applicability of Article

Section 1302.

Legal Defeasance

Section 1303.

Covenant Defeasance

Section 1304.

Application by Trustee of Funds Deposited for Payment of

Securities

Section 1305.

Repayment to the Company or the Guarantor

Section 1306.

Reinstatement

ARTICLE XIV

GUARANTEE

Section 1401.

Unconditional Guarantee

Section 1402.

Subrogation

Section 1403.

Execution of Guarantee

Annex A

FORM OF CERTIFICATE OF TRANSFER

Annex B

FORM OF CERTIFICATE OF EXCHANGE

INDENTURE dated as of December 9, 2005 among KINDER MORGAN FINANCE COMPANY, ULC, an Alberta unlimited liability corporation (the "Company"), having its principal office at 500 Dallas Street, Suite 1000, Houston, Texas 77002, KINDER MORGAN, INC., a Kansas corporation (the "Guarantor"), having its principal office at 500 Dallas Street, Suite 1000, Houston, Texas 77002, and WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee (the "Trustee").

RECITALS OF THE COMPANY
AND THE GUARANTOR

The Company has duly authorized the creation of three series of the Securities (as hereinafter defined), substantially of the tenor and amount hereinafter set forth, the Securities of each series to be guaranteed by the Guarantor, and to provide therefor the Company and the Guarantor have duly authorized the execution and delivery of this Indenture.

All things necessary to make the Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, to make the Guarantee a valid agreement of the Guarantor, and to make this Indenture a valid agreement of the Company and the Guarantor, in accordance with the terms of the Securities and this Indenture, respectively, have been done.

Upon the issuance of the Exchange Securities (as hereinafter defined) or the effectiveness of a registration statement filed in connection with the Exchange Offers (as hereinafter defined), this Indenture will be subject to the provisions of the Trust Indenture Act (as hereinafter defined) that are required to be a part of this Indenture and shall, to the extent applicable, be governed by such provisions. Prior thereto, the provisions of said Trust Indenture Act will apply to this Indenture only to the extent expressly provided herein.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101.

Definitions

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

(1)

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

(2)

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

(3)

all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States, in respect of the Guarantor and its Subsidiaries, or in Canada in respect of the Company or the Guarantor's Canadian Subsidiaries, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States at the date of such computation;

(4)

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

(5)

the words "Article" and "Section" refer to an Article and Section, respectively, of this Indenture, and the word "Annex" refers to an Annex to this Indenture.

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

"Additional Amounts" has the meaning specified in Section 1108.

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

"Agent" means any Registrar, Paying Agent, co-registrar or co-paying agent.

"Agent Member" means any member of, or participant in, the Depositary.

"Applicable Procedures" means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of the Depositary for such Security, or Euroclear and Clearstream, in each case to the extent applicable to such transaction and as in effect from time to time.

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

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

"Bankruptcy Law" means Title 11, U.S. Code, the Bankruptcy and Insolvency Act (Canada), the Companies' Creditors Arrangements Act (Canada), or any similar federal, state, provincial or foreign law for the relief of debtors or the protection of creditors or relating to bankruptcy, insolvency, winding up, liquidation or reorganization.

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

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

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

"Clearstream" means Clearstream Banking (or any successor securities clearing agency).

"Closing Date" has the meaning specified in the Registration Rights Agreement.

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

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

"Company Request" or "Company Order" means a written request or order signed in the name of the Company by the Chairman of the Board, the Vice Chairman, the President or a Vice President of the Company, and by the Treasurer or Secretary of the Company, and delivered to the Trustee.

"Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which at the date hereof is 12 East 49th Street, 37th Floor, New York, New York 10017.

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

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

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

"Debt" has the meaning specified in Section 1005.

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

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

"defeasance" has the meaning specified in Section 1302.

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

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

"Documentary Taxes" has the meaning specified in Section 1108.

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

"DTC" means The Depository Trust Company.

"Euroclear" means the Euroclear Clearance System (or any successor securities clearing agency).

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

"Exchange Act" means the Securities Exchange Act of 1934 or any statute successor thereto, in each case as amended from time to time.

"Exchange Offer" has the meaning specified in the Registration Rights Agreement, with respect to any series of Securities.

"Exchange Security" means any Security issued in exchange for an Original Security or Original Securities pursuant to the applicable Exchange Offer or otherwise registered under the Securities Act (which shall be substantially identical to, and shall represent the same continuing indebtedness as, the Original Securities except that the Exchange Securities will have been registered pursuant to an effective registration statement under the Securities Act, will not be subject to transfer restrictions or registration rights and will not be entitled to the benefit of provisions for Liquidated Damages) and any Security with respect to which the next preceding Predecessor Security of such Security was an Exchange Security.

"Global Securities" means the Restricted Global Securities and the Unrestricted Global Securities, with respect to any series of Securities.

"Global Security Legend" means a legend substantially in the form specified in Section 305(g)(2).

"Guarantee" means the guarantee by the Guarantor of the Company's obligations under the Securities as provided in Article XIV.

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

"Guarantor Request" or "Guarantor Order" means a written request or order signed in the name of the Guarantor by the Chairman of the Board, the Vice Chairman, the President or a Vice President of the Guarantor, and by the Treasurer or Secretary of the Guarantor, and delivered to the Trustee.

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

"Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument, and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.

"Independent Investment Banker" has the meaning specified in Section 1101.

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

"Institutional Accredited Investor" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) of the Securities Act.

"interest" includes Liquidated Damages, if any, and for the purposes of the Interest Act (Canada) the interest rate as computed under Section 310.

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

"Letter of Transmittal" means the letter of transmittal to be prepared by the Company and sent to all Holders of any series of the Securities for use by such Holders in connection with the applicable Exchange Offer.

"Liquidated Damages", which do not accrue on the Exchange Securities, has the meaning specified in the Forms of Reverse of Security in Section 203. Liquidated Damages, if any, accrued and unpaid on the Restricted Securities shall be payable, as and to the extent provided in the Registration Rights Agreement, in the manner provided for the payment of interest in this Indenture and the Restricted Securities, on each applicable Interest Payment Date.

"Liquidated Damages Event", which does not apply to the Exchange Securities, has the meaning specified in the Forms of Reverse of Security in Section 203.

"Make-Whole Premium" with respect to any Security (or portion thereof) to be redeemed will be equal to the excess, if any, of (i) the sum of the present values, calculated as of the Redemption Date, of (a) each interest payment that, but for such redemption, would have been payable on any such Security (or portion thereof) being redeemed on each Interest Payment Date occurring after the Redemption Date (excluding any accrued interest for the period prior to the

Redemption Date) and (b) the principal amount that, but for such redemption, would have been payable at the Stated Maturity of the principal of such Security (or portion thereof) being redeemed, over (ii) the principal amount of such Security (or portion thereof) being redeemed. The present value of interest and principal payments referred to in clause (i) will be determined in accordance with generally accepted principles of financial analysis. Such present values will be calculated by discounting the amount of each payment of interest or principal from the date that each such payment would have been payable, but for the redemption, to the Redemption Date at a discount rate equal to the Treasury Yield plus: (A) in the case of the 2011 Securities, 15 basis points (0.15%), (B) in the case of the 2016 Securities, 20 basis points (0.20%) an d (C) in the case of the 2036 Securities, 25 basis points (0.25%).

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

"Net Tangible Assets" means the total amount of assets appearing on the Guarantor's consolidated balance sheet less, without duplication (i) all current liabilities (excluding any thereof which are extendible or renewable by their terms or replaceable or refundable pursuant to enforceable commitments at the option of the obligor thereon without requiring the consent of the obligee to a time more than 12 months after the time as of which the amount thereof is being computed and excluding current maturities of long-term debt and preferred stock); (ii) all reserves for depreciation and other asset valuation reserves but excluding reserves for deferred federal income taxes arising from accelerated depreciation or otherwise; (iii) all goodwill, trademarks, trade names, patents, unamortized debt discount and expense and other like intangible assets carried as an asset ; and (iv) all appropriate adjustments on account of minority interests of other Persons holding common stock in any Subsidiary.

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

"Officers' Certificate" of a Person means a certificate signed by the Chairman of the Board, the Vice Chairman, the President or a Vice President, and by the Treasurer or the Secretary, of the Person, or if such Person is a partnership, of its general partner or the general partner's delegate and delivered to the Trustee. One of the officers or such other Persons (as applicable) signing an Officers' Certificate given pursuant to Section 1004 or 1007 shall be the principal executive, financial or accounting officer of the Person, or if such Person is a partnership, of its general partner or the general partner's delegate.

"Opinion of Counsel" means a written opinion of legal counsel, who may be an employee of or counsel for the Company or the Guarantor, which opinion shall comply with the provisions of Sections 102 and 103. Such counsel shall be acceptable to the Trustee, whose acceptance shall not be unreasonably withheld.

"Original Securities" means all Securities other than Exchange Securities.

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

(i)

Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

(ii)

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

(iii)

Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; and

(iv)

Securities, except to the extent provided in Sections 401, 1302 and 1303, with respect to which the Company or the Guarantor has satisfied and discharged the Indenture as provided in Article IV or has effected defeasance or covenant defeasance as provided in Article XIII;

provided, however, that in determining whether Holders of the requisite principal amount of the Outstanding Securities of a series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company, the Guarantor or any other obligor upon the Securities or any Affiliate of the Company, the Guarantor or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is no t the Company, the Guarantor or any other obligor upon the Securities or any Affiliate of the Company, the Guarantor or of such other obligor.

"Participant" means, with respect to DTC, a Person who has an account with DTC.

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

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

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

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

"Principal Property" means any natural gas or petroleum products pipeline, natural gas or petroleum products distribution system, natural gas gathering system, or natural gas or petroleum products storage facility located in the United States or Canada, except any such property that in the opinion of the Board of Directors of the Guarantor is not of material importance to the business conducted by the Guarantor and its consolidated Subsidiaries taken as a whole.

"Principal Subsidiary" means any Subsidiary of the Guarantor which owns Principal Property.

"Purchasers" means Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Barclays Capital Inc., Greenwich Capital Markets, Inc., J.P. Morgan Securities Inc., Banc of America Securities LLC, Calyon Securities (USA) Inc., Harris Nesbitt Corp., Mitsubishi UFJ Securities International plc, SunTrust Capital Markets, Inc., and Wachovia Capital Markets, LLC.

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

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

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

"Registered Securities" means the Exchange Securities and all other Securities sold or otherwise disposed of pursuant to an effective registration statement under the Securities Act, together with their respective Successor Securities.

"Registrable Securities" has the meaning specified in the Registration Rights Agreement.

"Registration Rights Agreement" means the Registration Rights Agreement, dated as of December 9, 2005, among the Company, the Guarantor, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., on behalf of the Purchasers, as the same shall be amended from time to time.

"Regular Record Date" for the interest payable on any Interest Payment Date means December 15 or June 15 of each year (whether or not a Business Day) as the case may be, next preceding such Interest Payment Date.

"Regulation S" means Regulation S under the Securities Act (or any successor provision), as it may be amended from time to time.

"Regulation S Global Securities" means any Regulation S Securities, with respect to any series of Securities, issued in the form of one or more Global Securities registered in the name of the Depositary, or its nominee and deposited with the Trustee, as custodian for the Depositary.

"Regulation S Permanent Global Security" means a permanent global security, with respect to any series of Securities, in the form of Security described in Sections 202 and 203 hereto bearing the Global Security Legend and the Restricted Securities Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Security upon expiration of the Restricted Period.

"Regulation S Temporary Global Security" means a temporary global security, with respect to any series of Securities, in the form of Security described in Sections 202 and 203 hereto bearing the Global Security Legend, Restricted Securities Legend and Regulation S Temporary Global Security Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Securities initially sold in reliance on Rule 903 of Regulation S.

"Regulation S Temporary Global Security Legend" means a legend substantially in the form of the legend specified in Section 305(g)(3).

"Regulation S Securities" means any Securities, with respect to any series of Securities, sold by the Purchasers in reliance on Regulation S and any Successor Securities thereto as long as such Securities are required pursuant to Section 305(g)(1) to bear the Restricted Securities Legend.

"Restricted Definitive Security" means a Definitive Security, with respect to any series of Securities, bearing the Restricted Securities Legend.

"Restricted Global Securities" has the meaning specified in Section 201.

"Restricted Period" means the period of 41 consecutive days beginning on and including the later of (i) the day on which Securities are first offered to Persons other than distributors (as defined in Regulation S) in reliance on Regulation S and (ii) the original issuance date of the Securities.

"Restricted Securities" means any Regulation S Securities and any Securities sold by the Purchasers in reliance on Rule 144A, in both cases with respect to any series of Securities, and any Successor Securities thereto as long as such Securities are required pursuant to Section 305(g)(1) to bear any Restricted Securities Legend.

"Restricted Securities Legend" means a legend substantially in the form of the legend specified in Section 305(g)(1).

"Rule 144" means Rule 144 under the Securities Act (or any successor provision), as it may be amended from time to time.

"Rule 144A" means Rule 144A under the Securities Act (or any successor provision), as it may be amended from time to time.

"Rule 144(k) Holding Period" has the meaning specified in the Forms of Reverse of Security in Section 203.

"Securities" means, collectively, the 2011 Securities, the 2016 and the 2036 Securities, including the Original Securities and the Exchange Securities of each such series. For all purposes of this Indenture, the term "Securities" shall include, with respect to any series of Securities, any Exchange Securities issued in exchange for Original Securities of the same series pursuant to this Indenture and, for purposes of this Indenture, all Outstanding Original Securities and Exchange Securities of the same series shall vote together as one series of Securities under this Indenture, and, except where otherwise provided herein, all Outstanding Original Securities and Exchange Securities of all series shall vote together as one class of Securities under this Indenture.

"Securities Act" means the Securities Act of 1933 or any statute successor thereto, in each case as amended from time to time.

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

"Security Register" means a register kept at an office or agency of the Security Registrar in The City of New York in which, subject to reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities.

"Security Registrar" means such Person that shall be appointed by the Company to maintain the Security Register. The Company hereby appoints the Trustee as the initial Security Registrar for purposes of registering Securities and transfers of Securities as herein provided and its corporate trust office which, at the date hereof, is located at 12 East 49th Street, 37th Floor, New York, New York 10017, as the initial office or agency in The City of New York where the Security Register will be maintained. The Company may at any time replace such Security Registrar, change such office or agency or act as its own Security Registrar. The Company will give prompt written notice to the Trustee of any change of the Security Registrar or of the location of such office or agency. At all r easonable times the Security Register shall be available for inspection by the Trustee.

"Shelf Registration Statement" has the meaning specified in the Registration Rights Agreement.

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

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

"Subsidiary" means, with respect to any Person, any entity of which more than 50% of the total voting power of the equity interests entitled, without regard to the occurrence of any contingency, to vote in the election of directors, managers or trustees thereof; or any partnership of which more than 50% of the partners' equity interests, considering all partners' equity interests

as a single class, is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or combination thereof.

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

"Taxes" has the meaning specified in Section 1108.

"Treasury Yield" means a rate of interest per annum equal to the weekly average yield to maturity of United States Treasury Notes that have a constant maturity that corresponds to the remaining term to maturity of the Securities of the applicable series, calculated to the nearer 1/12 of a year (the "Remaining Term"). The Treasury Yield will be determined as of the third Business Day immediately preceding the applicable Redemption Date. The weekly average yields of United States Treasury Notes will be determined by reference to the most recent statistical release published by the Federal Reserve Bank of New York and designated "H.15(519) Selected Interest Rates" or any successor release (the "H.15 Statistical Release"). If the H.15 Statistical Release se ts forth a weekly average yield for United States Treasury Notes having a constant maturity that is the same as the Remaining Term, then the Treasury Yield will be equal to such weekly average yield. In all other cases, the Treasury Yield will be calculated by interpolation, on a straight-line basis, between the weekly average yields on the United States Treasury Notes that have a constant maturity closest to and greater than the Remaining Term and the United States Treasury Notes that have a constant maturity closest to and less than the Remaining Term, in each case as set forth in the H.15 Statistical Release. Any weekly average yields so calculated by interpolation will be rounded to the nearer 0.01%, with any figure of 0.0050% or above being rounded upward. If weekly average yields for United States Treasury Notes are not available in the H.15 Statistical Release or otherwise, then the Treasury Yield will be calculated by inter polation of comparable rates selected by the Independent Investment Banker.

"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as otherwise provided in Section 905; provided, however, that if the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

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

"2011 Securities" means the Company's 5.35% Senior Notes due 2011.

"2016 Securities" means the Company's 5.70% Senior Notes due 2016.

"2036 Securities" means the Company's 6.40% Senior Notes due 2036.

"Unrestricted Definitive Securities" means Definitive Securities that do not and are not required to bear the Restricted Securities Legend.

"Unrestricted Global Securities" means Global Securities which do not and are not required to bear the Restricted Securities Legend.

"U.S." and "United States" each means the United States of America.

"U.S. Government Obligations" means securities which are (i) direct obligations of the United States for the payment of which its full faith and credit is pledged, or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, each of which are not callable or redeemable at the option of the issuer thereof.

"U.S. Person" means a U.S. person as defined in Rule 902 under the Securities Act.

"Vice President", when used with respect to the Company or the Guarantor, means any vice president of the Company or the Guarantor, or when used with respect to the Trustee, means any vice president of the Trustee.

Section 102.

Compliance Certificates and Opinions

Upon any application or request by the Company or the Guarantor to the Trustee to take or refrain from taking any action under any provision of this Indenture, the Company or the Guarantor shall furnish to the Trustee an Officers' Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with, and an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by officers of the Company or the Guarantor, or an Opinion of Counsel, if to be given by counsel, and shal l comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.

Every Officers' Certificate or Opinion of Counsel (except for certificates provided for in Sections 1004 and 1007) shall include:

(1)

a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(2)

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

(3)

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

(4)

a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

Section 103.

Form of Documents Delivered to Trustee

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

Any certificate or opinion of an officer of the Company or the Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or the Guarantor stating that the information with respect to such factual matters is in the possession of the Company or the Guarantor, as applicable, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

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

Section 104.

Acts of Holders; Record Dates

Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed (either physically or by means of a facsimile or an electronic transmission, provided that such electronic transmission is transmitted through the facilities of a Depositary) by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered (either physically or by means of a facsimile or an electronic transmission, provided that such electronic transmission is transmitted through the facilities of a Depositary) to the Trustee and, where it is hereby expressly required, to the Company or the Gu arantor. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee, the Company and the Guarantor, if made in the manner provided in this Section.

Without limiting the generality of the foregoing, a Holder, including a Depositary that is a Holder of a Global Security, may make, give or take, by a proxy or proxies, duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and a Depositary that is a Holder of a Global Security may provide its proxy or proxies to the beneficial owners of interests in any such Global Security.

The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

The ownership, principal amount and serial numbers of Securities held by any Person, and the date of commencement of such Person's holding the same, shall be proved by the Security Register.

Any request, demand, authorization, direction, notice, consent, waiver or other action of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

Without limiting the foregoing, a Holder entitled hereunder to give or take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any different part of such principal amount.

The Company may set any day as the record date for the purpose of determining Holders of Outstanding Securities of any series entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders of Securities of such series, but the Company shall have no obligation to do so. Such record date shall be not earlier than the 30th day prior to the first solicitation of any Holder to give or take any such action and not later than the date of such first solicitation. With regard to any record date set pursuant to this paragraph, Holders of Outstanding Securities of the applicable series on such record date (or their duly appointed agents), and only such Persons, shall be entitled to give or take the relevant action, whether or not such Ho lders remain Holders after such record date.

Section 105.

Notices, Etc., to Trustee, the Company and the Guarantor

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(1)

the Trustee by any Holder or by the Company or the Guarantor shall be sufficient for every purpose hereunder if made in writing and actually received by the Trustee at its office at 5847 San Felipe, Suite 1050, Houston, Texas 77057, or at any other address previously furnished in writing by the Trustee,

(2)

the Company by the Trustee, by the Guarantor or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company, addressed to it at 500 Dallas Street, Suite 1000, Houston, Texas 77002, to the attention of the Corporate Secretary, or at any other address previously furnished in writing to the Trustee by the Company, or

(3)

the Guarantor by the Trustee, by the Company or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Guarantor, addressed to it at 500 Dallas Street, Suite 1000, Houston, Texas 77002, to the attention of the Corporate Secretary, or at any other address previously furnished in writing to the Trustee by the Guarantor.

Section 106.

Notice to Holders; Waiver

Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid (if international mail, by air mail), to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Any notice mailed to a Holder in the manner herein prescribed shall be conclusively deemed to have been received by such Holder, whether or not such Holder actually receives such notice.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Section 107.

Conflict with Trust Indenture Act

If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or excluded, as the case may be.

Section 108.

Effect of Headings and Table of Contents

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 109.

Successors and Assigns

All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

Section 110.

Separability Clause

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

Section 111.

Benefits of Indenture

Nothing in this Indenture or in the Securities or the Guarantee, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 112.

Governing Law

This Indenture and the Securities shall be governed by and construed in accordance with the law of the State of New York.

Section 113.

Legal Holidays

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.

Section 114.

Language of Notices, Etc.

Any request, demand, authorization, direction, notice, consent, waiver or Act required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.

Section 115.

Interest Limitation

It is the intention of the Company to conform strictly to all applicable usury laws and any subsequent revisions, repeals or judicial interpretations thereof. Accordingly, if the transactions contemplated hereby would be usurious under any applicable law then, in that event, notwithstanding anything to the contrary in the Securities or this Indenture, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under applicable law with respect to a Security shall under no circumstances exceed the maximum amount allowed by applicable law, and any excess shall be credited to the principal amount of such Security (or, if the principal amount of such Security shall have been paid in full, refunded to the Company), to

the extent permitted by applicable law; and (ii) in the event that the maturity of any Security is accelerated or in the event of any redemption of such Security, then such consideration that constitutes interest under applicable law may never include more than the maximum amount allowed by applicable law, and any excess shall be credited to the principal amount of such Security (or, if the principal amount of such Security shall be paid in full, refunded to the Company), to the extent permitted by applicable law. All calculations made to compute the rate of interest with respect to a Security for the purpose of determining whether such rate exceeds the maximum amount allowed by applicable law shall be made, to the extent permitted by such applicable law, by allocating and spreading during the period of the full stated term of such Security all interest any time contracted for, taken, reserved, charged or received by such Holder or by the Trustee on behalf of any such Holder in connection therewith so that the amount or rate of interest charged for any and all periods of time during the term of the Security does not exceed the maximum amount or rate of interest allowed to be charged by law during the relevant period of time. Notwithstanding any of the foregoing, if at any time applicable laws shall be changed so as to permit a higher rate or amount of interest to be charged than that permitted prior to such change, then unless prohibited by law, references in this Indenture or any Security to "applicable law" when used in the context of determining the maximum interest or rate of interest that can be charged shall be deemed to refer to such applicable law as so amended to allow the greater amount or rate of interest.

The right to accelerate maturity of any Security does not include the right to accelerate any interest which has not otherwise accrued to the date of such acceleration, provided, however, that the foregoing shall not prohibit the continuing accrual after acceleration of interest in accordance with the terms of this Indenture and such Security. The agreements set forth in this Section are part of the consideration for the issuance of the Securities.

Section 116.

No Adverse Interpretation of Other Agreements and Instruments

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

ARTICLE II

SECURITY FORMS

Section 201.

Forms Generally

The Securities of each series and the Trustee's certificate of authentication shall be in substantially the forms set forth in this Article, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with applicable securities laws, tax laws or the rules of any securities exchange or automated quotation system on which the Securities may be listed or traded or of the Depositary therefor.

The Definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.

Upon their original issuance, the Restricted Securities shall be issued in the form of one or more Global Securities registered in the name of DTC, as Depositary, or its nominee and deposited with the Trustee, as custodian for DTC, for credit by DTC to the respective accounts of beneficial owners of the Securities represented thereby (or such other accounts as they may direct), provided that upon such deposit all such Regulation S Global Securities shall be credited to or through accounts maintained at DTC by or on behalf of Euroclear or Clearstream. Such Global Securities, with respect to any series of Securities, together with their Successor Securities which are Global Securities that are required pursuant to Section 305(g)(1) to bear any Restricted Securities Legend, are collectively herein called the "Restricted Global Securities".

Section 202.

Forms of Face of Securities

KINDER MORGAN FINANCE COMPANY, ULC

[5.35% Senior Note due 2011] [5.70% Senior Note due 2016] [6.40% Senior Note due 2036]

No.

U.S.$

CUSIP No. 49455WAA4¹

US49455WAA45²

49455WAAO³

US49455WAA601⁴

49455WAE6⁵

US49455WAAE66⁶

Kinder Morgan Finance Company, ULC, an Alberta unlimited liability corporation (herein called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the principal sum of U.S. Dollars on January 5, [2011 (in the case of the 2011 Securities)] [2016 (in the case of the 2016 Securities)] [2036 (in the case of the 2036 Securities)], and to pay interest thereon from December 9, 2005 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on January 5 and July 5 in each year (or if any such date is not a Business Day, the next succeeding Business Day), commencing July 5, 2006, at the rate of [5.35]% per annum (in the case of the 2011 Securities)] [5.70]% per annum (in the case of the 2016 Securities)] [6.40]% per annum (in the case of the 2036 Securities)], until the principal hereof is paid or made available for payment.

_____________________________

For 2011 Securities sold in reliance on Rule 144A.

For 2011 Securities sold in reliance on Regulation S.

For 2016 Securities sold in reliance on Rule 144A.

⁴

For 2016 Securities sold in reliance on Regulation S.

⁵

For 2036 Securities sold in reliance on Rule 144A.

⁶

For 2036 Securities sold in reliance on Regulation S.

The interest so payable [(and Liquidated Damages, if any, provided for on the reverse hereof)],⁷ and punctually paid or duly provided for, on any Interest Payment Date will, as provided in said Indenture, be paid to the Person in whose name this [2011] [2016] [2036] Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be December 15 or June 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest [(and Liquidated Damages, if any)]⁷not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this [2011] [2016] [2036] Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest [(and Liquidated Damages, if any)]⁷to be fixed by the Trustee, notice whereof shall be given to Holders of [2011] [2016] [2036] Securities not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the [2011] [2016] [2036] Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of and interest [(and Liquidated Damages, if any)]⁷ on this [2011] [2016] [2036] Security will be made at the office or agency of the Company maintained for that purpose in The City of New York, New York, in such coin or currency of the United States as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest [(and Liquidated Damages, if any)]⁷ may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register; and provided, further, however, that in case this [2011] [2016] [2036] Security is held by a Depositary or its nominee, payments of principal, interest [(and Liquidated Damages, if any)]¹ and premium, if any, shall be made by wire transfer of immediately available funds to an account designated by such Depositary.

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

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

_____________________________

⁷

Omitted from Exchange Securities.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

Dated:

KINDER MORGAN FINANCE COMPANY, ULC

By:

Name:
Title:

GUARANTEE

For value received, the Guarantor (which term includes any successor Person in such capacity under the Indenture) hereby unconditionally guarantees to the Holder of this Security the cash payments in United States dollars of principal of, premium, if any, and interest (including Additional Amounts, if any) on this Security in the amounts and at the times when due, subject to any applicable grace period, and interest on the overdue principal, premium, if any, and interest, if any, of this Security, if lawful, all in accordance with and subject to the terms and limitations of this Security and Article XIV of the Indenture.

KINDER MORGAN, INC.,

as Guarantor

By:

Name:
Title:

Section 203.

Forms of Reverse of Securities

This Security is one of a duly authorized issue of securities of the Company, limited in initial aggregate principal amount to [$750,000,000 (in the case of the 2011 Securities)] [$850,000,000 (in the case of the 2016 Securities)] [$550,000,000 (in the case of the 2036 Securities)], issued and to be issued under an Indenture, dated as of December 9, 2005 (herein called the "Indenture"), among the Company, the Guarantor and Wachovia Bank, National Association, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which the Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. The Securities issued and to be issued under the Indenture consist of $750,000,000 initial aggregate original principal amount of 5.35% Senior Notes due 2011, $850,000,000 initial aggregate original principal amount of 5.70% Senior Notes due 2016 and $550,000,000 initial aggregate original principal amount of 6.40% Senior Notes due 2036 and are hereinafter collectively called the "Securities"; provided,

however, that the Company may reopen any series of Securities to issue additional Securities of such series, which shall form a single series with the other Securities of such series and shall have the same terms, without the consent of the Holders.

[The Holder of this [2011] [2016] [2036] Security is entitled to the benefits of the Registration Rights Agreement. The Company agrees to pay liquidated damages (the "Liquidated Damages"), as specified below, upon the occurrence of any of the following events (each such event a "Liquidated Damages Event"): (i) if the Exchange Registration Statement or Shelf Registration Statement with respect to the [2011] [2016] [2036] Securities is not filed within 120 days following the Closing Date, then commencing on the 121st day after the Closing Date, Liquidated Damages shall accrue on the [2011] [2016] [2036] Securities over and above the otherwise applicable interest rate at a rate of 0.25% per annum, (ii) if the Exchange Registration Statement or the Shelf Registration Statement with respect to the [2011] [2016] [2036] Securities is filed and is not declared effective wi thin 210 days following the Closing Date, then commencing on the 211th day after the Closing Date, Liquidated Damages shall accrue on the [2011] [2016] [2036] Securities over and above the otherwise applicable interest rate at a rate of 0.25% per annum, or (iii) if either (A) the Company has not exchanged Exchange Securities for all [2011] [2016] [2036] Securities validly tendered in accordance with the terms of the Exchange Offer on or prior to 45 Business Days after the date on which the Exchange Registration Statement with respect to the [2011] [2016] [2036] Securities was declared effective, or (B) the Shelf Registration Statement with respect to the [2011] [2016] [2036] Securities has been declared effective but such Shelf Registration Statement ceases to be effective at any time (I) prior to the second anniversary of the Closing Date or, if Rule 144(k) is amended to provide a shorter restrictive period, such shorter period (the "Rule 144(k) Holding Period") and (II) while Registrable [ 2011] [2016] [2036] Securities are Outstanding, then Liquidated Damages shall accrue on the [2011] [2016] [2036] Securities over and above the otherwise applicable interest rate at a rate of 0.25% per annum commencing on the (x) 46th Business Day after such effective date, in the case of (A) above, or (y) the day the Shelf Registration Statement with respect to the [2011] [2016] [2036] Securities ceases to be effective, in the case of (B) above; provided, however, that the rate at which Liquidated Damages accrue on the Securities shall never exceed 0.25% per annum; and provided, further, that Liquidated Damages shall cease to accrue upon the earlier of (X) when all Liquidated Damages Events with respect to the [2011] [2016] [2036] Securities have been cured or (Y) upon the expiration of the Rule 144(k) Holding Period. For purposes of clarifying the foregoing provisions (i) the circumstances under which Liquidated Damages are owed are not cumulative, (ii) in no event will the rate of Liquidated Damages exceed 0.25% per annum, and (iii) Liquidated Damages shall not accrue at any time when there are no Registrable [2011] [2016] [2036] Securities Outstanding.]⁸

If an Event of Default with respect to the [2011] [2016] [2036] Securities shall occur and be continuing, the principal of all the [2011] [2016] [2036] Securities may be declared due and payable in the manner and with the effect provided in the Indenture.

The [2011] [2016] [2036] Securities are redeemable, at the option of the Company, at any time in whole or from time to time in part, upon not less than 30 and not more than 60 days' notice mailed to each Holder of the [2011] [2016] [2036] Securities to be redeemed at the
_____________________________

⁸

Omitted from Exchange Securities.

Holder's address appearing in the Security Register, on any date prior to Maturity at a price equal to (a) 100% of the principal amount thereof plus accrued interest to the Redemption Date (subject to the right of holders of record on the relevant Record Date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date) and (b) a Make-Whole Premium, if any (the "Redemption Price"). In no event will the Redemption Price ever be less than 100% of the principal amount of the Securities being redeemed plus accrued interest to the Redemption Date. The Make-Whole Premium will be calculated by an independent investment banking institution of national standing appointed by the Company; provided, that if the Company fails to make such appointment at least 30 Business Days prior to the Redemption Date, or if the institution so appointed is unwilling or unable to make s uch calculation, such calculation will be made by Merrill Lynch, Pierce, Fenner & Smith Incorporated or, if such firm is unwilling or unable to make such calculation, by an independent investment banking institution of national standing appointed by the Trustee (in any such case, an "Independent Investment Banker") on the terms and conditions specified in the Indenture.

The Company has no obligation to redeem or purchase any Securities pursuant to any sinking fund or analogous requirement, or upon the happening of a specified event, or at the option of a Holder thereof.

The Company may at any time redeem in whole but not in part this Security at a redemption price of 100% of the principal amount thereof plus accrued interest to the date of redemption if the Company has become or would become obligated to pay any Additional Amounts (as defined in Section 1108 of the Indenture, the provisions of which are incorporated by reference) in respect of this Security or the Guarantee as a result of (a) any change in or amendment to the laws (or regulations promulgated thereunder) of Canada (or any political subdivision or taxing authority thereof or therein), or (b) any change in or amendment to any published administrative position regarding the application or interpretation of such laws or regulations, which change or amendment is announced or is effective on or after the date of the Indenture on the terms and conditions specified in the Indenture.

The Indenture contains provision for defeasance at any time of (1) the entire indebtedness of this Security or (2) certain covenants contained therein, in each case upon compliance with certain conditions set forth in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of Holders of the [2011] [2016] [2036] Securities under the Indenture at any time by the Company and the Trustee with the consent of a majority in aggregate principal amount of the [2011] [2016] [2036] Securities at the time Outstanding. The Indenture also contains provisions permitting Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture. The Indenture also contains provisions permitting Holders of specified percentages in aggregate principal amount of the [2011] [2016] [2036] Securities at the time Outstanding, on behalf of Holders of all the [2011] [2016] [2 036] Securities, to waive certain past defaults under the Indenture with respect to the [2011] [2016] [2036] Securities and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange

herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of any series will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of such series, Holders of not less than 25% in principal amount of the Outstanding Securities of such series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from Holders of a majority in principal amount of the Outstanding Securities of such series a direction inconsistent with such request and shall have failed to institute such proceedings within 60 days; provided, however, that such limitations do not apply to a suit institute d by the Holder hereof for the enforcement of payment of the principal of or any interest on this Security on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall, without the consent of the Holder hereof, alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed, except for Section 115 of the Indenture (which limits interest to the maximum amount permissible by law), the provisions of which are incorporated herein by reference. The Company will pay to the Holders such Additional Amounts as may become payable under Section 1108 of the Indenture subject to the right of redemption.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon one or more new Securities of the same series, of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof, unless otherwise required by law. As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Securities of the same series and of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or

not this Security be overdue, and neither the Company, the Guarantor the Trustee nor any such agent shall be affected by notice to the contrary.

Obligations of the Company under the Indenture and the Securities thereunder, including this Security, and of the Guarantor under the Guarantee, are payable only out of the respective cash flow and assets of the Company or the Guarantor, as applicable. The Trustee, and each Holder of a Security by its acceptance hereof, will be deemed to have agreed in the Indenture that no director, officer, employee, or shareholder, as such, of the Company, the Guarantor, the Trustee, or any Affiliate of any of the foregoing entities shall have any personal liability in respect of the obligations of the Company under the Indenture, the Company under the Securities, or of the Guarantor under any Guarantee, by reason of his, her or its status. The Company's shareholder, however, is liable.

This Security shall be governed by and construed in accordance with the laws of the State of New York.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned sells, assigns and transfers this Security to

(Print or type transferee's name, address, zip code and

social security or taxpayer identification number above)

and irrevocably appoints __________________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for the agent.

Date: _________________


	Your signature:	NOTICE: The signature(s) on this assignment must correspond in every particular with the name(s) of the registered owner(s) appearing on the face of the Security.
		Signature
	Signature Guaranteed by:
	NOTICE: Signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Trustee, which requirements will include membership or participation in STAMP or such other signature guaranty program as may be determined by the Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY⁹

The initial principal amount of this Global Security is $[750,000,000] [850,000,000] [550,000,000]. The following increases or decreases in this Global Security as a result of exchanges of a part of this Global Security for an interest in another Global Security or Definitive Security, or exchanges of a part of another Global Security or a Definitive Security for an interest in this Global Security have been made:

Date of
Exchange

Amount of
decrease in
Principal Amount
of this Global
Security

Amount of increase in
Principal Amount of
this Global Security

Principal amount of this
Global Security following
such decrease or increase

Signature of authorized
signatory of Trustee or
Securities Custodian

Section 204.

Form of Trustee's Certificate and Authorization

The Trustee's certificates of authentication shall be in substantially the following form:

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

WACHOVIA BANK, NATIONAL ASSOCIATION,

As Trustee

By:

Authorized Signatory

ARTICLE III

THE SECURITIES

Section 301.

Title and Terms

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is initially limited to $750,000,000, in the case of the 2011 Securities, $850,000,000, in the case of the 2016 Securities, and $550,000,000, in the case of the 2036 Securities, in each case except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 304, 305, 306 or 906; provided, however, that the Company may reopen the series of Securities represented by the 2011 Securities, the 2016 Securities or by the 2036 Securities to issue additional Securities of such series, which shall form a single series with the other Securities of such series and shall have the same terms, without the consent of the Holders.

The Securities shall be known and designated as the "5.35% Senior Notes due 2011", in the case of the 2011 Securities, the "5.70% Senior Notes due 2016", in the case of the 2016
_____________________________

⁹

To be included only on Global Securities.

Securities, and the "6.40% Senior Notes due 2036", in the case of the 2036 Securities, in each case of the Company. The Stated Maturity of the 2011 Securities in respect of principal shall be January 5, 2011, and they shall bear interest at the rate of 5.35% per annum, from December 9, 2005 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, payable semi-annually in arrears on each January 5 and July 5, commencing July 5, 2006, until the principal thereof is paid or made available for payment. The Stated Maturity of the 2016 Securities in respect of principal shall be January 5, 2016, and they shall bear interest at the rate of 5.70% per annum, from December 9, 2005 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, payable semi-a nnually in arrears on each January 5 and July 5, commencing July 5, 2006, until the principal thereof is paid or made available for payment. The Stated Maturity of the 2036 Securities in respect of principal shall be January 5, 2036, and they shall bear interest at the rate of 6.40% per annum, from December 9, 2005 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, payable semi-annually in arrears on each January 5 and July 5, commencing July 5, 2006, until the principal thereof is paid or made available for payment.

The principal of and interest on the Securities shall be payable at the office or agency of the Company in The City of New York maintained for such purpose and any other office or agency maintained by the Company for such purpose; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

The Company initially designates DTC as Depositary with respect to each series of Securities.

Section 302.

Denominations

The Securities of each series shall be issuable only in registered form without coupons and only denominations of $1,000 and any integral multiple thereof, unless otherwise required by law.

Section 303.

Execution, Authentication, Delivery and Dating

The Securities shall be executed on behalf of the Company by the Chairman of the Board, Vice Chairman, Chief Executive Officer, Chief Financial Officer, President or any Vice President of the Company and need not be attested. The signature of any of these officers on the Securities may be manual or facsimile.

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of each series executed by the Company with the Guarantee endorsed thereon to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company

Order shall authenticate and deliver such Securities; provided, however, that Exchange Securities shall be issuable only upon the valid surrender for cancellation of Original Securities of the same series and of a like aggregate principal amount, in accordance with the applicable Exchange Offer.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or the Guarantee or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature of an authorized signatory, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309 for all purposes of this Indenture, such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

Section 304.

Temporary Securities

Pending the preparation of Definitive Securities, the Company may execute, and upon receipt of the documents required by Section 303, together with a Company Order, the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the Definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.

If temporary Securities are issued, the Company will cause Definitive Securities to be prepared without unreasonable delay. After the preparation of Definitive Securities, the temporary Securities of such series shall be exchangeable for Definitive Securities of the same series with the Guarantee endorsed thereon upon surrender of the temporary Securities with the Guarantee endorsed thereon at the office or agency of the Company maintained pursuant to Section 1002 for the purpose of exchanges of Securities, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more Definitive Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor, each with a Guarantee endorsed thereon. Until so e xchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as Definitive Securities of such series and tenor.

Section 305.

Transfer and Exchange.

(a)

Transfer and Exchange of Global Securities. A Global Security may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Securities will be exchanged by the Company for Definitive Securities if (i) the Company

delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary for the Global Securities or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 90 days after the date of such notice from the Depositary or (ii) the Company in its sole discretion notifies the Trustee in writing that it elects to cause issuance of the Securities in certificated form; provided, that in no event shall the Regulation S Temporary Global Security be exchanged by the Company for Definitive Securities prior to (x) the expiration of the Restricted Period and (y) the receipt by the Security Registrar of any certificates required pursuant to Rule 903 under the Securities Act or an Opinion of Counsel to the effect that such certificates are not required pursuant to Rule 903. Upon the occurrenc e of either of the preceding events described in clause (i) or (ii) of the immediately preceding sentence, Definitive Securities shall be issued in such names as the Depositary shall instruct the Trustee. If an Event of Default occurs and is continuing, the Company shall, at the request of the Holder thereof, exchange all or part of a Global Security for one or more Definitive Securities in denominations of $1,000 or integral multiples thereof. Global Securities also may be exchanged or replaced, in whole or in part, as provided in Section 306 hereof. Every Security authenticated and delivered in exchange for, or in lieu of, a Global Security or any portion thereof, pursuant to this Section 305(a) or Section 306 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Security. A Global Security may not be exchanged for another Security other than as provided in this Section 305(a); however, beneficial interests in a Global Security may be transferred and exchanged as provided in Section 305(b), (c) or (f) hereof.

(b)

Transfer and Exchange of Beneficial Interests in the Global Securities. The transfer and exchange of beneficial interests in the Global Securities shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Securities shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Securities also shall require compliance with all the following subparagraphs as are applicable:

(1)

Transfer of Beneficial Interests in the Same Global Security. Beneficial interests in any Restricted Global Security may be transferred to Persons who take delivery in the form of a beneficial interest in the same Restricted Global Security in accordance with the transfer restrictions set forth in the Restricted Securities Legend; provided, however, that prior to the expiration of the Restricted Period transfers of beneficial interests in the Regulation S Temporary Global Security may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than a Purchaser). Beneficial interests in any Unrestricted Global Security may be transferred only to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security. No written orders or instructions shall be required to be delivered to the Security Registrar to effect the transfers des cribed in this Section 305(b)(1).

(2)

All Other Transfers and Exchanges of Beneficial Interests in Global Securities. In connection with all transfers and exchanges of beneficial interests in Global Securities not provided for in Section 305(b)(1), the transferor of such beneficial interest must deliver to the Security Registrar:

(i)

(1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the

Depositary to credit or cause to be credited a beneficial interest in another Global Security in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or

(ii)

(1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Security in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Security Registrar containing information regarding the Person in whose name such Definitive Security shall be registered to effect the transfer or exchange referred to in clause (1) of this clause (B), provided, that in no event shall Definitive Securities be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Security prior to (x) the expiration of the Restricted Period and (y) the receipt by the Security Registrar of any certificates required pursuant to Rule 903 under the Securities Act or an Opinion of Counsel to the effect that such certificates are not required pursuant to Rule 903(b)(3)(ii)(B). In addition, beneficial interests in a Global Security may not be exchanged for Definitive Securities except upon at least 20 days' prior written notice given to the Trustee and the Security Registrar by or on behalf of the Depositary in accordance with Applicable Procedures. Upon an Exchange Offer by the Company in accordance with Section 305(f) hereof, the requirements of this Section 305(b)(2) shall be deemed to have been satisfied with respect to the exchange of Securities of a series in such Exchange Offer upon receipt by the Security Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Securities. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Securities contained in this Indenture, the Securities of such series and otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Security(s) pursuant to Section 305(h) hereof.

(3)

Transfer of Beneficial Interests in a Restricted Global Security. A beneficial interest in any Restricted Global Security may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in the same or a different Restricted Global Security if the transfer complies with the requirements of clause (2) above, if applicable, and the transferor delivers to the Security Registrar a certificate in the form of Annex A hereto.

(4)

Transfer and Exchange of Beneficial Interests in a Restricted Global Security for Beneficial Interests in an Unrestricted Global Security. A beneficial interest in any Restricted Global Security may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Security or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security if the exchange or transfer complies with the requirements of clause (2) above and:

(i)

such exchange or transfer is effected pursuant to the applicable Exchange Offer in accordance with the Registration Rights Agreement;

(ii)

any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; or

(iii)

the Security Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Security, a certificate from such holder in the form of Annex B hereto, including the certifications in Item (1) thereof; (2) if the holder of such beneficial interest in a Restricted Global Security proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security, a certificate from such holder in the form of Annex A hereto, including the certifications in Item (4) thereof; and (3) in each such case set forth in this subparagraph (iii), an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act.

If any such transfer is effected pursuant to subparagraph (ii) above or this subparagraph (iii) at a time when an Unrestricted Global Security has not yet been issued, the Company shall issue and, upon receipt of an authentication order in accordance with Section 303 hereof, the Trustee shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount equal to the principal amount of beneficial interests transferred pursuant to subparagraph (ii) above or this subparagraph (iii). Beneficial interests in an Unrestricted Global Security cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Security.

(c)

Transfer or Exchange of Beneficial Interests for Definitive Securities.

(1)

If any holder of a beneficial interest in a Restricted Global Security of a series proposes to exchange such beneficial interest for a Restricted Definitive Security of such series or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Security, then, upon receipt by the Security Registrar of the following documentation:

(i)

if the holder of such beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for a Restricted Definitive Security, a certificate from such holder in the form of Annex B hereto, including the certifications in Item (5) thereof;

(ii)

if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (1) thereof;

(iii)

if such beneficial interest is being transferred to a non-U.S. Person in an offshore transaction pursuant to Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (2) thereof;

(iv)

if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with

Rule 144 under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (3)(a) thereof;

(v)

if such beneficial interest is being transferred pursuant to any other exemption (including a beneficial interest being transferred to an Institutional Accredited Investor) from the registration requirements of the Securities Act, in either case other than those listed in subparagraphs (ii), (iii) and (iv) above, then the transferor must deliver a certificate in the form of Annex A hereto, including the certifications, certificates and any Opinion of Counsel required by Item (3)(d) thereof;

(vi)

if such beneficial interest is being transferred to the Company or any of its Affiliates, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (3)(b) thereof; or

(vii)

if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (3)(c) thereof,

the Trustee, upon notice of receipt of such documentation by the Security Registrar, shall cause the aggregate principal amount of the applicable Global Security to be reduced accordingly pursuant to Section 305(h) hereof, and the Company shall execute and the Trustee shall authenticate and make available for delivery to the Person designated in the instructions a Definitive Security in the appropriate principal amount. Any Definitive Security issued in exchange for a beneficial interest in a Restricted Global Security pursuant to this Section 305(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Security Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall make available for delivery such Definitive Securities t o the Persons in whose names such Securities are so registered. Any Definitive Security issued in exchange for a beneficial interest in a Restricted Global Security pursuant to this Section 305(c)(1) shall bear the Restricted Securities Legend and shall be subject to all restrictions on transfer contained therein.

(2)

Notwithstanding Sections 305(c)(1)(i) and (iii) hereof, a beneficial interest in the Regulation S Temporary Global Security may not be (A) exchanged for a Definitive Security prior to (x) the expiration of the Restricted Period and (y) the receipt by the Security Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act or (B) transferred to a Person who takes delivery thereof in the form of a Definitive Security prior to the conditions set forth in clause (A) above or unless the transfer is pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.

(3)

Notwithstanding Section 305(c)(1) hereof, a holder of a beneficial interest in a Restricted Global Security may exchange such beneficial interest for an Unrestricted Definitive Security or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Security only if:

(i)

such exchange or transfer is effected pursuant to the applicable Exchange Offer in accordance with the Registration Rights Agreement;

(ii)

any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; or

(iii)

the Security Registrar receives the following:

(A)

if the holder of such beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for an Unrestricted Definitive Security, a certificate from such holder in the form of Annex B hereto, including the certifications in Item (2) thereof;

(B)

if the holder of such beneficial interest in a Restricted Global Security proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Security, a certificate from such holder in the form of Annex A hereto, including the certifications in Item (4) thereof; and

(C)

in each such case set forth in this subparagraph (iii), an Opinion of Counsel in form reasonably acceptable to the Company, to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act, and such beneficial interest in a Restricted Global Security is being exchanged or transferred in compliance with applicable blue sky securities laws of any State of the United States.

(4)

If any holder of a beneficial interest in an Unrestricted Global Security proposes to exchange such beneficial interest for a Definitive Security or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Security, then, upon satisfaction of the conditions set forth in Section 305(b)(2) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Security to be reduced accordingly pursuant to Section 305(h) hereof, and the Company shall execute and the Trustee shall authenticate and make available for delivery to the Person designated in the instructions a Definitive Security in the appropriate principal amount. Any Definitive Security issued in exchange for a beneficial interest pursuant to this Section 305(c)(4) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Security Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall make available for delivery such Definitive Securities to the Persons in whose names such Securities are so registered. Any Definitive Security issued in exchange for a beneficial interest pursuant to this Section 305(c)(4) shall not bear the Restricted Securities Legend. A beneficial interest in an Unrestricted Global Security cannot be exchanged for a Restricted Definitive Security or transferred to a Person who takes delivery thereof in the form of a Restricted Definitive Security.

(d)

Transfer and Exchange of Definitive Securities for Beneficial Interests.

(1)

If any Holder of a Restricted Definitive Security of a series proposes to exchange such Security for a beneficial interest in a Restricted Global Security of a series or to transfer such Definitive Securities to a Person who takes delivery thereof in the form of a

beneficial interest in a Restricted Global Security of such series, then, upon receipt by the Security Registrar of the following documentation:

(i)

if the Holder of such Restricted Definitive Security proposes to exchange such Security for a beneficial interest in a Restricted Global Security, a certificate from such Holder in the form of Annex B hereto, including the certifications in Item (6) thereof;

(ii)

if such Definitive Security is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (1) thereof;

(iii)

if such Definitive Security is being transferred pursuant to Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (2) thereof;

(iv)

if such Definitive Security is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (3)(a) thereof;

(v)

if such Definitive Security is being transferred to an Institutional Accredited Investor or in reliance on any other exemption from the registration requirements of the Securities Act, in either case, other than those listed in subparagraphs (ii), (iii) and (iv) above, a certificate in the form of Annex A hereto, including certifications, certificates, and any Opinion of Counsel required by Item (3)(d) thereof;

(vi)

if such Definitive Security is being transferred to the Company or any of its Affiliates, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (3)(b) thereof; or

(vii)

if such Definitive Security is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (3)(c) thereof,

the Trustee, upon notice of receipt of such documentation by the Security Registrar, shall cancel the Definitive Security, and increase or cause to be increased the aggregate principal amount of the appropriate Restricted Global Security.

(2)

A Holder of a Restricted Definitive Security may exchange such Security for a beneficial interest in an Unrestricted Global Security or transfer such Restricted Definitive Security to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security only if:

(i)

such exchange or transfer is effected pursuant to the applicable Exchange Offer in accordance with the Registration Rights Agreement;

(ii)

any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; or

(iii)

the Security Registrar receives the following:

(A)

if the Holder of such Restricted Definitive Security proposes to exchange such Security for a beneficial interest in an Unrestricted Global Security, a certificate from such Holder in the form of Annex B hereto, including the certifications in Item (3) thereof;

(B)

if the Holder of such Restricted Definitive Security proposes to transfer such Security to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security, a certificate from such Holder in the form of Annex A hereto, including the certifications in Item (4) thereof; and

(C)

in each such case set forth in this subparagraph (iii), an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act, and such Restricted Definitive Security is being exchanged or transferred in compliance with applicable blue sky securities laws of any State of the United States.

Upon satisfaction of the conditions of any of the subparagraphs in this Section 305(d)(2), the Trustee shall cancel the Restricted Definitive Security and increase or cause to be increased the aggregate principal amount of the appropriate Unrestricted Global Security.

(3)

A Holder of an Unrestricted Definitive Security may exchange such Security for a beneficial interest in an Unrestricted Global Security or transfer such Unrestricted Definitive Security to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Security and increase or cause to be increased the aggregate principal amount of the appropriate Unrestricted Global Security.

(4)

If any such exchange or transfer from a Definitive Security to a beneficial interest is effected pursuant to subparagraphs (2)(ii), (2)(iii) or (3) if this Section 305(d) at a time when an Unrestricted Global Security has not yet been issued, the Company shall issue and, upon receipt of an authentication order in accordance with Section 303 hereof, the Trustee shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount equal to the principal amount of beneficial interests transferred pursuant to subparagraphs (2)(ii), (2)(iii) or (3) of this Section 305(d).

(e)

Transfer and Exchange of Definitive Securities for Definitive Securities. Upon request by a Holder of Definitive Securities of a series and such Holder's compliance with the provisions of this Section 305(e), the Security Registrar shall register the transfer or exchange of Definitive Securities. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Security Registrar the Definitive Securities duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Security Registrar duly executed by

such Holder or by his attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, pursuant to the provisions of this Section 305(e).

(1)

Restricted Definitive Securities may be transferred to and registered in the name of Persons who take delivery thereof if the Security Registrar receives the following:

(i)

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

(ii)

if the transfer will be made pursuant to Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (2) thereof;

(iii)

if the transfer will be made pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (3)(a) thereof;

(iv)

if the transfer will be made to an Institutional Accredited Investor or in reliance on any other exemption from the registration requirements of the Securities Act, in either case, other than those listed in subparagraphs (1)(i), (1)(ii) and (1)(iii) of this Section 305(e), a certificate in the form of Annex A hereto, including the certifications, certificates any Opinion of Counsel required by Item (3)(d) thereof;

(v)

if the transfer will be made to the Company or any of its Affiliates, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (3)(b) thereof; or

(vi)

if the transfer will be made pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in Item (3)(c) thereof.

(2)

Any Restricted Definitive Security may be exchanged by the Holder thereof for an Unrestricted Definitive Security or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Security if:

(i)

such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement;

(ii)

any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; or

(iii)

the Security Registrar receives the following:

(A)

if the Holder of such Restricted Definitive Security proposes to exchange such Security for an Unrestricted Definitive Security, a certificate from

such Holder in the form of Annex B hereto, including the certifications in Item (4) thereof;

(B)

if the Holder of such Restricted Definitive Security proposes to transfer such Security to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Security, a certificate from such Holder in the form of Annex A hereto, including the certifications in Item (4) thereof; and

(C)

in each such case set forth in this subparagraph (iii), an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act, and such Restricted Definitive Security is being exchanged or transferred in compliance with any applicable blue sky securities laws of any State of the United States.

(3)

A Holder of Unrestricted Definitive Securities may transfer such Securities to a Person who takes delivery thereof in the form of an Unrestricted Definitive Security. Upon receipt of a request for such a transfer, the Security Registrar shall register the Unrestricted Definitive Securities pursuant to the instructions from the Holder thereof. Unrestricted Definitive Securities cannot be exchanged for or transferred to Persons who take delivery thereof in the form of a Restricted Definitive Security.

(f)

Exchange Offers. Upon the occurrence of the Exchange Offers in accordance with the Registration Rights Agreement, the Company shall issue, with respect to any series of Securities, and, upon receipt of (A) an authentication order in accordance with Section 303 hereof and (B) an Opinion of Counsel opining as to the enforceability of the Exchange Securities of the applicable series, the Trustee shall authenticate, with respect to the applicable series of Securities, (i) one or more Unrestricted Global Securities in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Securities tendered in compliance with the Registration Rights Agreement and accepted for exchange in the applicable Exchange Offer and (ii) Unrestricted Definitive Securities in an aggregate principal amount equal to the principal amount of the Restricted Definitive Secu rities accepted for exchange in the applicable Exchange Offer. Concurrent with the issuance of such Securities of the applicable series, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Securities to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and make available for delivery to the Persons designated by the Holders of Definitive Securities of such series so accepted Definitive Securities in the appropriate principal amount.

(g)

Legends. The following legends shall appear on the face of all Global Securities and Definitive Securities issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.

(1)

Restricted Securities Legend.

(i)

Except as permitted by subparagraph (ii) below, each Global Security and each Definitive Security (and all Securities issued in exchange therefor or substitution thereof) shall bear the legends in substantially the following forms:

"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. ACCORDINGLY, THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED UNDER THE INDENTURE PURSUANT TO WHICH THIS SECURITY IS ISSUED) AND IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")), (2) AGREES THAT PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH KINDER MORGAN FINANCE COMPANY, ULC OR ANY AFFILIATE OF KINDER MORGAN FINANCE COMPANY, ULC WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE"), IT WILL NOT RESELL, OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO KINDER MORGAN FINANCE COMPANY, ULC OR ANY OF ITS AFFILIATES, (B) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUN T OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE

REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND ACCOMPANIED BY SUCH CERTIFICATIONS, OPINIONS OF COUNSEL AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "U.S. PERSONS" AND "UNITED STATES" HAVE THE MEANINGS ASSIGNED TO THEM IN RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY IN CANADA BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF (A) THE ORIGINAL ISSUANCE DATE OF THIS SECURITY AND (B) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA."

(ii)

Notwithstanding the foregoing, any Global Security or Definitive Security issued pursuant to subparagraph (b)(4), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section 305 (and all Securities issued in exchange therefor or substitution thereof) shall not bear the Restricted Securities Legend other than the last paragraph thereof.

(2)

Global Security Legend. Each Global Security shall bear a legend in substantially the following form:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE EXCHANGED OR TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS

THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

(3)

Regulation S Temporary Global Security Legend. The Regulation S Temporary Global Security shall bear a legend in substantially the following form:

"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED SECURITIES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).

(h)

Cancellation and/or Adjustment of Global Securities. At such time as all beneficial interests in a particular Global Security have been exchanged for Definitive Securities or a particular Global Security has been redeemed, repurchased or canceled in whole and not in part, each such Global Security shall be returned to or retained and canceled by the Trustee in accordance with Section 309 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security or for Definitive Securities, the principal amount of Securities represented by such Global Security shall be reduced accordingly and an endorsement shall be made on such Global Security, by the Trustee, the Security Custodian or the Depositary at the direction of the Trustee, to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security, such other Global Security shall be increased accordingly and an endorsement shall be made on such Global Security, by the Trustee, the Security Custodian or by the Depositary at the direction of the Trustee, to reflect such increase.

(i)

General Provisions Relating to Transfers and Exchanges.

(1)

To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Securities and Definitive Securities upon the Company's order or at the Security Registrar's request.

(2)

No service charge shall be made to a Holder of a beneficial interest in a Global Security or to a Holder of a Definitive Security for any registration of transfer or

exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 304, 906 and 1107 hereof).

(3)

The Security Registrar shall not be required to register the transfer or exchange of any Security selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

(4)

All Global Securities and Definitive Securities issued upon any registration of transfer or exchange of Global Securities or Definitive Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Securities or Definitive Securities surrendered upon such registration of transfer or exchange.

(5)

The Company shall not be required

(i)

to issue, to register the transfer of or to exchange Securities of any series during a period beginning at the opening of business 15 days before the day of any selection of Securities for redemption under Section 1103 hereof and ending at the close of business on the day of selection,

(ii)

to register the transfer of or to exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part or

(iii)

to register the transfer of or to exchange a Security between a record date and the next succeeding Interest Payment Date.

(6)

Prior to due presentment for the registration of a transfer of any Security, the Trustee, any Agent, the Guarantor and the Company may deem and treat the Person in whose name any Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Securities and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.

(7)

The Trustee shall authenticate Global Securities and Definitive Securities in accordance with the provisions of Section 303 hereof.

(8)

All certifications, certificates and Opinions of Counsel required to be submitted to the Security Registrar pursuant to this Section 305 to effect a transfer or exchange may be submitted by facsimile.

Section 306.

Mutilated, Destroyed, Lost and Stolen Securities

If any mutilated Security is surrendered to the Trustee, together with such security or indemnity as may be required by the Company or the Trustee to save each of them and any agent of either of them harmless, the Company shall execute and upon its request the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously Outstanding.

If there shall be delivered to the Company and the Trustee (1) evidence to their satisfaction of the destruction, loss or theft of any Security and (2) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously Outstanding. If, after the delivery of such new Security, a bona fide purchaser of the original Security in lieu of which such new Security was issued presents for payment or registration such original Security, the Trustee shall be entitled to recover su ch new Security from the party to whom it was delivered or any party taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Company and the Trustee in connection therewith.

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security issued pursuant to this Section in exchange for any mutilated Security or in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

Section 307.

Payment of Interest; Interest Rights Preserved

Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:

(1)

The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered

at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment a nd not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of each applicable series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) of each applicable series are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).

(2)

The Company may make payment of any Defaulted Interest on the Securities in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which such Securities may be listed or traded, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section and Section 305, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security, shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

The Company shall, prior to 10:30 a.m. (New York City time) on each payment date for principal and premium, if any, and interest, if any, deposit with the Trustee money in immediately available funds sufficient to make cash payments due on the applicable payment date.

Section 308.

Persons Deemed Owners

Prior to due presentment of a Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Sections 305 and 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and neither the Company, the Guarantor, the Trustee nor any agent of the Company, the Guarantor or the Trustee shall be affected by notice to the contrary.

No holder of any beneficial interest in any Global Security held on its behalf by a Depositary shall have any rights under this Indenture with respect to such Global Security, and such Depositary may be treated by the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee as the owner of such Global Security for all purposes whatsoever. None of the Company, the Guarantor, the Trustee nor any agent of the Company, the Guarantor or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

Section 309.

Cancellation

All Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company or the Guarantor may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company or the Guarantor may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities held b y the Trustee shall be disposed of in accordance with its customary procedures, and the Trustee shall thereafter deliver to the Company a certificate with respect to such disposition.

Section 310.

Computation of Interest

Interest per annum on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months and interest on the Securities of each series for any partial period shall be computed on the basis of a 360-day year of twelve 30-day months and the number of days elapsed in any partial month. For the purposes of the Interest Act (Canada), the yearly rate of interest which is equivalent to the rate payable hereunder is the rate payable multiplied by the actual number of days in the year and divided by 360.

Section 311.

CUSIP Numbers

The Company in issuing the Securities may use "CUSIP" numbers (in addition to the other identification numbers printed on the Securities), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such "CUSIP" numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such "CUSIP" numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers.

ARTICLE IV

SATISFACTION AND DISCHARGE

Section 401.

Satisfaction and Discharge of Indenture

This Indenture shall upon Company Request cease to be of further effect with respect to Securities of any series (except as to any surviving rights of registration of transfer or exchange of such Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to such Securities, when

(1)

either

(A)

all such Securities theretofore authenticated and delivered (other than (i) such Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306, and (ii) such Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Guarantor or any of its Subsidiaries and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or

(B)

all such Securities not theretofore delivered to the Trustee for cancellation

(i)

have become due and payable,

(ii)

will become due and payable at their Stated Maturity in respect of principal within one year, or

(iii)

are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

and the Company or the Guarantor in the case of (i), (ii) or (iii) above, has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for this purpose an amount in Dollars sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest (including, for greater certainty, Additional Amounts) to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity of the principal thereof, or the Redemption Date, as the case may be;

(2)

the Company or the Guarantor has paid or caused to be paid all other sums payable hereunder by the Company with respect to such Securities; and

(3)

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

Notwithstanding the satisfaction and discharge of this Indenture with respect to the Securities of any series (i) the obligations of the Company and the Guarantor to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and the right of the Trustee to resign under Section 610 shall survive, (ii) if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Company and/or the Trustee under Sections 402, 606, 701 and 1002 and the last paragraph of Section 1003 shall survive, and (iii) the obligations of the Company and the Guarantor under Section 1108 shall survive.

Section 402.

Application of Trust Money

Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company or the Guarantor acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee.

ARTICLE V

REMEDIES

Section 501.

Events of Default

"Event of Default", wherever used herein with respect to Securities of a series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1)

the Company's default in the payment of any interest or Additional Amounts, if any, upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or

(2)

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

(3)

default in the performance, or breach, of any term, covenant or warranty of the Company or the Guarantor, as applicable, in this Indenture (other than a term, covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company and the Guarantor by the Trustee or to the Company, the Guarantor and the Trustee by Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or

(4)

the Company or the Guarantor, as the case may be, pursuant to or within the meaning of any Bankruptcy Law (A) commences a voluntary case or proceeding, (B) consents to the entry of any order for relief against it in an involuntary case or proceeding, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors or files a proposal or other scheme of arrangement involving the rescheduling or composition of its indebtedness; or

(5)

a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company or the Guarantor, as the case may be, in an involuntary case, (B) appoints a Custodian of the Company or the Guarantor, as the case may be, or for all or substantially all of its property, or (C) orders the liquidation of the Company or the Guarantor, as the case may be, and the order or decree remains unstayed and in effect for 90 days; or

(6)

the Guarantee with respect to the Securities of that series ceases to be in full force and effect or such Guarantee is declared to be null and void and unenforceable or such Guarantee of the Guarantor is found to be invalid or the Guarantor denies its liability under such Guarantee (other than by reason of the discharge of this Indenture with respect to the Securities of that series.

Section 502.

Acceleration of Maturity; Rescission and Annulment

If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount of all of the Securities of that series to be due and payable immediately, by a notice in writing to the Company and the Guarantor (and to the Trustee if given by Holders), and upon any such declaration such principal amount shall become immediately due and payable.

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

(1)

the Company or the Guarantor has paid or deposited with the Trustee a sum sufficient to pay

(A)

all overdue interest on all Securities of that series,

(B)

the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,

(C)

to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities of such series, and

(D)

all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;

and

(2)

all Events of Default with respect to Securities of such series, other than the non-payment of the principal of Securities of such series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent Default or impair any right consequent thereon.

Section 503.

Collection of Indebtedness and Suits for Enforcement by Trustee

The Company covenants that if

(1)

default is made in the payment of any interest or of any Additional Amounts on any Security when such interest or Additional Amount becomes due and payable and such default continues for a period of 30 days, or

(2)

default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company, the Guarantor, or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company, the Guarantor, or any other obligor upon such Securities, wherever situated.

If an Event of Default with respect to Securities of a series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of Holders of the Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

Section 504.

Trustee May File Proofs of Claim

In case of any judicial proceeding relative to the Company, the Guarantor, or any other obligor upon the Securities, their property or their creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors' or other similar committee.

Section 505.

Trustee May Enforce Claims Without Possession of Securities

All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of Holders of the Securities in respect of which such judgment has been recovered.

Section 506.

Application of Money Collected

Any money or property collected or to be applied by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money or property on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under Section 607;

SECOND: To the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively; and

THIRD: The balance, if any, to the Company, or to the Guarantor if the Guarantor was the source of the money or property.

Section 507.

Limitation on Suits

No Holder of any Security of a series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

(1)

such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of such series;

(2)

Holders of not less than 25% in principal amount of the Outstanding Securities of such series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(3)

such Holder or Holders have offered and, if requested, provided to the Trustee reasonable security or indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;

(4)

the Trustee for 60 days after its receipt of such notice, request and offer and, if requested, provision of security or indemnity has failed to institute any such proceeding; and

(5)

no direction inconsistent with such written request has been given to the Trustee during such 60-day period by Holders of a majority in principal amount of the Outstanding Securities of such series;

it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.

Section 508.

Unconditional Right of Holders to Receive Principal, Premium and Interest

Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Sections 305 and 307) interest and any Additional Amount on such Security on the Stated Maturity expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

Section 509.

Restoration of Rights and Remedies

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then in every such case, subject to any determination in such proceeding, the Company, the Guarantor, the Trustee and Holders shall be restored severally and respectively to their former positions hereunder, and thereafter all

rights and remedies of the Trustee and Holders shall continue as though no such proceeding had been instituted.

Section 510.

Rights and Remedies Cumulative

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 511.

Delay or Omission Not Waiver

No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by such Holders, as the case may be.

Section 512.

Control by Holders

Subject to the provisions of Section 603, Holders of a majority in aggregate principal amount of the Outstanding Securities of a series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series; provided, however, that

(1)

such direction shall not be in conflict with any rule of law or with this Indenture;

(2)

the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; and

(3)

subject to the provisions of Section 601, the Trustee shall have the right to decline to follow any such directions if the Trustee in good faith shall determine that the proceeding so directed would involve the Trustee in personal liability or would otherwise be contrary to applicable law.

Section 513.

Waiver of Past Defaults

Holders of a majority in aggregate principal amount of the Outstanding Securities of any series may on behalf of Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except

(1)

a continuing default in the payment of the principal of or any premium or interest on any Security of such series, or

(2)

a default in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

Section 514.

Undertaking for Costs

In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided, however, that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Trustee, in any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities to which the suit relates, or in any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security on or after the Stated Maturity expressed by such Security (or, in the case of redemption or repayment, on or after the Redemption Date).

ARTICLE VI

THE TRUSTEE

Section 601.

Certain Duties and Responsibilities

(a)

Except during the continuance of an Event of Default with respect to any series of the Securities,

(1)

the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture with respect to the Securities of such series, and no implied covenants or obligations shall read into this Indenture against the Trustee; and

(2)

in the absence of bad faith on its part, the Trustee may, with respect to the Securities of such series, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture.

(b)

In case an Event of Default with respect to the Securities of a series has occurred and is continuing, the Trustee shall exercise with respect to the Securities of such series such rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs.

(c)

No provisions of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that

(1)

this Subsection shall not be construed to limit the effect of Subsection (a) of this Section;

(2)

the Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

(3)

the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and

(4)

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

(d)

Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

Section 602.

Notice of Defaults

If a Default occurs and is continuing with respect to the Securities of any series, the Trustee shall, within 90 days after it occurs, transmit, in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act, notice of all uncured or unwaived Defaults known to it; provided, however, that, except in the case of a Default in payment on the Securities of any series, the Trustee shall be protected in withholding the notice if and so long as the board of directors, the executive committee or a trust committee of directors or responsible officers of the Trustee determine in good faith that withholding such notice is in the interests of Holders of Securities; provided, further, however, that, in the case of any Default of the character specified in Section 501(3) with respect to the Securities of such series, no such notice to Holders shall be given until at least 60 d ays after the occurrence of such Default.

Section 603.

Certain Rights of Trustee

Subject to the provisions of Section 601:

(1)

the Trustee may rely on and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(2)

any request, direction, order or demand of the Company or the Guarantor mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, or a Guarantor Request or Guarantor Order, as the case may be, and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution;

(3)

whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate;

(4)

the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(5)

the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(6)

the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company or the Guarantor, as applicable, personally or by agent or attorney;

(7)

the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

(8)

the Trustee is not a party to the Registration Rights Agreement and shall be entitled to rely on an Officers' Certificate as to whether Liquidated Damages are owed on the Securities; and

(9)

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

Section 604.

Not Responsible for Recitals or Issuance of Securities

The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company and the Guarantor, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness. Neither the Trustee nor any Authenticating Agent makes any representations as to the validity or sufficiency of this Indenture or of the Securities or the Guarantee. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of the Securities or the proceeds thereof.

Section 605.

May Hold Securities

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company or the Guarantor with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

Section 606.

Money Held in Trust

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

Section 607.

Compensation and Reimbursement

The Company agrees:

(1)

to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(2)

to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith;

(3)

to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder; and

(4)

the Trustee shall have a claim prior to the Securities as to all property and funds held by it hereunder for any amounts owing it or any predecessor Trustee pursuant to this Section 607, except to funds held in trust for the benefit of Holders of any Securities.

The obligations of the Company under this Section to compensate the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder.

Without limiting any rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 501(4) or Section 501(5), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under any applicable Bankruptcy Law.

The provisions of this Section 607 and the obligations of the Company thereunder, shall survive payment in full of the Securities, the satisfaction and discharge of this Indenture and any defeasance of the Securities.

Section 608

Disqualification; Conflicting Interests

If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.

Section 609

Corporate Trustee Required; Eligibility

There shall at all times be one or more Trustees hereunder with respect to the Securities of each series, at least one of which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus required by the Trust Indenture Act. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of a supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

Section 610

Resignation and Removal; Appointment of Successor

No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.

The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company and the Guarantor. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company and the Guarantor. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the removed Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If at any time:

(1)

the Trustee shall fail to comply with Section 608 after written request therefor by the Company, or by any Holder who has been a bona fide Holder of a Security for at least six months, or

(2)

the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company, or by any such Holder, or

(3)

the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case (A) the Company, by a Board Resolution, may remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect

to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

Section 611.

Acceptance of Appointment by Successor

(1)

In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and the Guarantor and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the Guarantor or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

(2)

In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the Guarantor, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (A) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (B) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties o f the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (C) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees as co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, but, on request of the Company, the Guarantor or any successor Trustee, such retiring Trustee shall, upon payment of its charges, duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

(3)

Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (1) or (2) of this Section, as the case may be.

(4)

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

Section 612.

Merger, Conversion, Consolidation or Succession to Business

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securi ties.

Section 613.

Preferential Collection of Claims Against the Company or the Guarantor

If and when the Trustee shall be or become a creditor of the Company, the Guarantor, or any other obligor upon the Securities, the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company, the Guarantor or any such other obligor.

Section 614.

Appointment of Authenticating Agent

The Trustee (upon notice to the Company and the Guarantor) may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue (in accordance with procedures acceptable to the Trustee) and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a cert ificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and the Guarantor and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this S ection, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate agency or corporate trust business of such Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or such Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company and the Guarantor. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company and the Guarantor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and the Guarantor. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appoin ted unless eligible under the provisions of this Section.

Except with respect to an Authenticating Agent appointed at the request of the Company, the Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.

If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form:

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

WACHOVIA BANK, NATIONAL ASSOCIATION,
As Trustee

Date:

By:

As Authenticating Agent

By:

Authorized Signatory

ARTICLE VII

HOLDERS' LISTS AND REPORTS BY THE TRUSTEE, THE COMPANY
AND THE GUARANTOR

Section 701.

Company to Furnish Trustee Names and Addresses of Holders

The Company will furnish or cause to be furnished to the Trustee

(1)

semi-annually, not later than each Interest Payment Date in each year, a list for each series of Securities, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of such series as of the preceding Regular Record Date, and

(2)

at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

provided, however, that if and so long as the Trustee shall be the Security Registrar for Securities of a series, no such list need be furnished with respect to such series of Securities.

Section 702.

Preservation of Information; Communications to Holders

The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.

The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company, the Guarantor nor the Trustee nor any agent of any of them shall be held accountable by reason of any disclosure of information as to the names and addresses of Holders made pursuant to the Trust Indenture Act.

Section 703.

Reports by Trustee

As promptly as practicable after each May 15 beginning with the May 15 following the date of this Indenture, and in any event prior to July 15 in each year, the Trustee shall mail to each Holder a brief report dated as of May 15 that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b). Prior to delivery to Holders, the Trustee shall deliver to the Company a copy of any report it delivers to Holders pursuant to this Section 703.

A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission

and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange.

Section 704.

Reports by the Company and the Guarantor

Each of the Company and the Guarantor shall:

(1)

file with the Trustee, within 15 days after it is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which it may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act;

(2)

file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by it with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

(3)

transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by it pursuant to paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.

ARTICLE VIII

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801.

The Company May Consolidate, Etc., Only on Certain Terms

The Company shall not consolidate with or merge into or amalgamate with any other Person or convey, transfer or lease its properties and assets substantially as an entirety to, any Person, unless:

(1)

the Person formed by such consolidation or amalgamation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a Person, shall be organized and validly existing under the Federal laws of Canada or the laws of any province thereof, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every other covenant of this Indenture on the part of the Company to be performed or observed;

(2)

immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or a Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing;

(3)

if, as a result of any such consolidation, amalgamation or merger or such conveyance, transfer or lease, properties or assets of the Company would become subject to a mortgage, pledge, lien, security interest or other encumbrance which would not be permitted by this Indenture, the Company or such successor Person, as the case may be, shall take such steps as shall be necessary effectively to secure the Securities equally and ratably with (or prior to) all indebtedness secured thereby; and

(4)

the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation, conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

Notwithstanding the foregoing, the Company may, at any time, without complying with the conditions set forth in this Section 801, consolidate with, merge into or amalgamate with any other Person organized and existing under the Federal laws of Canada or the laws of any province thereof or convey, transfer or lease its properties and assets substantially as an entirety to any Person organized and existing under the laws of Canada or any province thereof of which the Guarantor owns 100% of the equity interests.

Section 802.

The Guarantor May Consolidate, Etc., Only on Certain Terms

The Guarantor shall not consolidate with or merge into or amalgamate with any other Person or convey, transfer or lease its properties and assets substantially as an entirety to, any Person, unless:

(1)

the Person formed by such consolidation or amalgamation or into which the Guarantor is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Guarantor substantially as an entirely shall be a Person, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia, or under the laws of Canada or any province thereof, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the obligations of the Guarantor under this Indenture and the Guarantee;

(2)

immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Guarantor as a result of such transaction as having been incurred by the Guarantor at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing;

(3)

if, as a result of any such consolidation, amalgamation or merger or such conveyance, transfer or lease, properties or assets of the Guarantor would become subject to a mortgage, pledge, lien, security interest or other encumbrance which would not be permitted by this Indenture, the Guarantor or such successor Person, as the case may be, shall take such steps as shall be necessary effectively to secure the Guarantee equally and ratably with (or prior to) all indebtedness secured thereby; and

(4)

the Guarantor has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation, conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

Section 803.

Successor Substituted

Upon any consolidation, merger or amalgamation, or any conveyance, transfer or lease of properties and assets substantially as an entirety in accordance with Section 801 or Section 802, as applicable, the successor Person formed by such consolidation, merger or amalgamation or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or the Guarantor, as the case may be, under this Indenture with the same effect as if such successor Person had been named as the Company or the Guarantor, as the case may be, herein and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities and the Guarantee, as applicable, and may liquidate and dissolve.

ARTICLE IX

SUPPLEMENTAL INDENTURES

Section 901.

Supplemental Indentures Without Consent of Holders

Without the consent of any Holders of Securities, the Company, the Guarantor and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(1)

to secure any of such Securities or to allow any guarantor to guarantee Securities of any series;

(2)

to evidence the succession of another Person to the Company or the Guarantor under this Indenture and the Securities and the assumption by such successor Person of the obligations of the Company or the Guarantor, as applicable, hereunder;

(3)

to add covenants and Events of Default for the benefit of the Holders of all or any series of such Securities or to surrender any right or power conferred by this Indenture upon the Company or the Guarantor or to make any change that does not adversely affect the legal rights hereunder of any Holder in any material respect;

(4)

to add to, change or eliminate any of the provisions of this Indenture, provided that any such addition, change or elimination shall become effective only after there are no such Securities of any series entitled to the benefit of such provision outstanding;

(5)

to cure any ambiguity or correct any defect or inconsistency in this Indenture;

(6)

to evidence the acceptance of appointment by a successor Trustee with respect to one or more series of Securities or otherwise;

(7)

to qualify this Indenture under the Trust Indenture Act;

(8)

to provide for uncertificated securities in addition to certificated securities;

(9)

to supplement any provisions of this Indenture necessary to permit or facilitate the defeasance and discharge of any series of Securities, provided that such action does not adversely affect the interests of the Holders of Securities of such series or any other series; and

(10)

to comply with the rules or regulations of any securities exchange or automated quotation system on which any of the Securities may be listed or traded.

Section 902.

Supplemental Indentures with Consent of Holders

With the consent of Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of each series affected by such supplemental indenture, the Company, the Guarantor and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture, or modifying in any manner the rights of Holders of Securities of such series under this Indenture; provided that the Company, the Guarantor and the Trustee may not, without the consent of the Holder of each Outstanding Security of any series affected thereby,

(1)

change the Stated Maturity of the principal of, or of any installment of interest on, any Security of such series, or reduce the principal amount thereof or premium, if any, or the rate of interest thereon;

(2)

reduce the percentage in principal amount of the Securities of such series required for any such supplemental indenture or for any waiver provided for in this Indenture;

(3)

change the Company's obligation to maintain an office or agency for payment of Securities of such series and the other matters specified herein;

(4)

impair the right to institute suit for the enforcement of any payment of principal of, premium, if any, or interest on, any Security of such series; or

(5)

modify any of the provisions of this Indenture relating to the execution of supplemental indentures with the consent of Holders of Securities of such series which are discussed in this Section or modify any provisions relating to the waiver by Holders of Securities of such series of past defaults and covenants, except to increase any required percentage or to provide that other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security of such series affected thereby.

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Section 903.

Execution of Supplemental Indentures

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 501) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.

Section 904.

Effect of Supplemental Indentures

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

Section 905.

Conformity with Trust Indenture Act

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.

Section 906.

Reference in Securities to Supplemental Indentures

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company and the Guarantor shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee, the Company and the Guarantor, to any such supplemental indenture may be prepared with Guarantee endorsed thereon, and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. Failure to make a notation or issue a new Security shall not affect the validity and effect of any amendment, supplement or waiver.

ARTICLE X

COVENANTS

Section 1001.

Payment of Principal, Premium and Interest

The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium, interest and Additional Amounts on the Securities of that series in accordance with the terms of the Securities and this Indenture.

Section 1002.

Maintenance of Office or Agency

The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and

where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Company hereby initially designates as the Place of Payment for each series of Securities The City of New York, and initially appoints the Trustee as Paying Agent at its Corporate Trust Office as the Company's office or agency for each such purpose in such city.

Section 1003.

Money for Securities Payments to Be Held in Trust

If the Guarantor or any of its Subsidiaries shall at any time act as Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to 10:30 a.m. EST on each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest, if any, on Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment of principal (and premium, if any) or interest, if any, on the Securities of that series; and (3) during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trus tee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the state whose escheat laws control and the Trustee or any Paying Agent shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the state whose escheat laws control for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such payment, may at the expense of the Company cause to be published once, in an Authorized Newspaper, not ice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be paid to the state whose escheat laws control.

Section 1004.

Statement by Officers as to Default

The Company and the Guarantor will deliver to the Trustee, within 150 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signer or signers thereof the Company or the Guarantor is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company or the Guarantor shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.

Section 1005.

Limitations on Liens

The Guarantor shall not, nor shall the Guarantor permit any Subsidiary to, issue, assume or guarantee any debt for money borrowed (any such debt being referred to in this Section as "Debt"), if such Debt is secured by a mortgage, pledge, security interest or lien (any mortgage, pledge, security interest or lien being referred to in this Section as a "mortgage" or "mortgages") upon any Principal Property of the Guarantor or any Principal Subsidiary or upon any shares of stock or indebtedness of any Principal Subsidiary (whether such Principal Property, shares or indebtedness is now owned or hereafter acquired) without in any such case effectively providing, concurrently with the issuance assumption or guarantee of such Debt, that the Guarantee (together with, if the Guarantor shall so determine, any other indebtedness of or guaranteed by the Guarantor or such Principal Subsidiary ranking equally with the Guarantee) shall be secured equally and ratably with (or prior to) such Debt; provided, however, that the foregoing restrictions shall not apply to:

(1)

mortgages on any property acquired, constructed or improved by the Guarantor or any Principal Subsidiary after the date of this Indenture which are created or assumed contemporaneously with, or within 180 days after, such acquisition (or in the case of property constructed or improved, after the completion and commencement of commercial operation of such property, whichever is later) to secure or provide for the payment of any part of the purchase price or cost of such construction or improvement; it being understood that if a commitment for such a financing is obtained prior to or within such 180-day period, the applicable mortgage shall be deemed to be included in this clause (1) whether or not such mortgage is created within such 180-day period; provided that in the case of such construction or improvement the mortgage shall not apply to any property theretofore owned by the Guarantor or any Subsidiary other than theretofore unimproved real property on which the property so constructed, or the improvement is located;

(2)

mortgages on any property existing at the time of the acquisition thereof (including mortgages on any property acquired from a Person which is consolidated with or merged with or into the Guarantor or a Subsidiary) and mortgages outstanding at the time any corporation becomes a Subsidiary;

(3)

mortgages in favor of the Guarantor or any Principal Subsidiary;

(4)

mortgages in favor of the United States, any State thereof, any foreign country or any department, agency or instrumentality or political subdivision of any such jurisdiction, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the property subject to such mortgages, including, without limitation, mortgages to secure Debt of the pollution control or industrial revenue bond type; and

(5)

any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any mortgage referred to in any of the foregoing clauses (1) to (4), inclusive; provided, however, that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement shall be limited to all or part of the property that secured the mortgage so extended, renewed or replaced (plus improvements on such property).

Notwithstanding the foregoing provisions of this Section, the Guarantor and any Subsidiary may issue, assume or guarantee secured Debt, which would otherwise be subject to the foregoing restrictions, in an aggregate amount which, together with all other such Debt, does not exceed 10% of Net Tangible Assets, as shown on a consolidated balance sheet, as of a date not more than 90 days prior to the proposed transaction, prepared by the Guarantor in accordance with generally accepted accounting principles.

Section 1006.

Waiver of Certain Covenants

The Company or the Guarantor may omit in any particular instance to comply with any term, provision or condition set forth in Sections 1002 through 1005, as applicable, with respect to the Securities of any series or the Guarantee endorsed thereon if before the time for such

compliance Holders of at least a majority in aggregate principal amount of the Outstanding Securities of all affected series (voting as one class) shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company or the Guarantor, as applicable, and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.

A waiver which changes or eliminates any term, provision or condition of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such term, provision or condition, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

Section 1007.

Officers' Certificate as to Liquidated Damages

The Company shall deliver an Officers' Certificate to the Trustee within five Business Days after a Liquidated Damages Event occurs which identifies such Liquidated Damages Event and states the date as of which Liquidated Damages began accruing or will begin to accrue. Promptly upon (i) a Liquidated Damages Event having been cured or (ii) the expiration of the Rule 144(k) Holding Period, the Company shall deliver to the Trustee an Officers' Certificate which identifies such Liquidated Damages Event, states that it has been cured or that the Rule 144(k) Holding Period has expired, as the case may be, and states the date as of which Liquidated Damages ceased accruing or will cease to accrue.

ARTICLE XI

REDEMPTION OF SECURITIES

Section 1101.

Optional Redemption

The Securities of any series will be redeemable, at the option of the Company, at any time in whole or from time to time in part, upon not less than 30 and not more than 60 days' notice mailed to each Holder of the Securities of such series to be redeemed at the Holder's address appearing in the Security Register, on any date prior to Maturity at a price equal to (a) 100% of the principal amount thereof plus accrued interest to the Redemption Date (subject to the right of holders of record on the relevant Record Date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date) and (b) a Make-Whole Premium, if any (the "Redemption Price"). In no event will the Redemption Price ever be less than 100% of the principal amount of the Securities redeemed plus accrued interest to the Redemption Date. The Make-Whole Premium will be calculated by an indepe ndent investment banking institution of national standing appointed by the Company; provided, that if the Company fails to make such appointment at least 30 Business Days prior to the Redemption Date, or if the institution so appointed is unwilling or unable to make such calculation, such calculation will be made by Merrill Lynch, Pierce, Fenner & Smith Incorporated or, if such firm is unwilling or unable to make such calculation, by an independent investment banking institution of national standing appointed by the Trustee (in any such case, an "Independent Investment Banker").

The Company has no obligation to redeem or purchase any Securities pursuant to any sinking fund or analogous requirement, or (except as provided in Article V) upon the happening of a specified event, or at the option of a Holder thereof.

Section 1102.

Election to Redeem; Notice to Trustee

The election of the Company to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities of any series, the Company shall, not less than 35 nor more than 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of the Securities of such series to be redeemed.

Section 1103.

Selection by Trustee of Securities to be Redeemed

If less than all the Securities of any series are to be redeemed, the particular Securities of such series to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, on a pro rata basis or by any other method which the Trustee deems fair and appropriate and which complies with any securities exchange or other applicable requirements for redemption of portions (equal to the minimum authorized denomination for Securities or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series.

The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any such Securities selected for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of the Securities shall relate, in the case of any such Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

Section 1104.

Notice of Redemption

Notice of redemption shall be given by first-class mail (if international mail, by air mail), postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of the Securities to be redeemed, at his address appearing in the Security Register.

All notices of redemption shall state:

(1)

the Redemption Date,

(2)

the Redemption Price, or, if the Redemption Price has not been determined as of the mailing of the notice, the manner of calculating the Redemption Price,

(3)

if less than all the Outstanding Securities of such series are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities of such series to be redeemed,

(4)

that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and that interest thereon will cease to accrue on and after said date, and

(5)

the place or places where such Securities are to be surrendered for payment of the Redemption Price.

Notice of redemption of Securities to be redeemed shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company.

Section 1105.

Deposit of Redemption Price

Prior to 10:30 a.m. New York City Time on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Guarantor or a Subsidiary is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of all the Securities which are to be redeemed on that date.

Section 1106.

Securities Payable on Redemption Date

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price; provided, however, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in such Security.

Section 1107.

Securities Redeemed in Part

Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities, of the same series and of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

Section 1108.

Redemption for Changes in Withholding Taxes and Payment of Additional Amounts

The Securities of the affected series may be redeemed, in whole but not in part, prior to maturity at the Company's option, upon the giving of notice of redemption, at the principal amount thereof, together with accrued and unpaid interest thereon to the date fixed for redemption, if, in the opinion of independent Canadian counsel of recognized standing (which may be Blake, Cassels & Graydon LLP), the Company or the Guarantor is, or on the next date on which any amount would be payable in respect of the applicable Securities will be, obligated to pay Additional Amounts (as hereinafter defined) in respect of the Securities pursuant to the terms and conditions thereof as a result of (a) any change in, or amendment to, the laws or treaties (or any regulations or rulings promulgated thereunder) of Canada or of the United States affecting taxation which becomes effective on or after the date of this Indenture; or (b) any change in the official position regarding the application, administration, or interpretation of the laws, treaties, regulations or rulings of Canada or of the United States (including a holding, judgment, or order by a court of competent jurisdiction), on or after the date of this Indenture; and the Company or the Guarantor, as the case may be, cannot avoid payment of Additional Amounts by (i) filing a form, certificate, or other document with the appropriate taxing authority, the preparation or filing of which form, certificate, or other document, or any conditions or undertakings contained therein, does not cause any material detriment or material expense to the Company or the Guarantor or (ii) taking some other action which in their reasonable judgment is purely ministerial and does not cause any material detriment or material expense to the Company or the Guarantor. To exercise such right of redemption, the Company shall deliver to the Trustee a certification stating that it is ent itled to effect such redemption pursuant to the terms of the Securities and shall cause a notice specifying the date for redemption of the Securities to be given to the Holders of such Securities not less than 30 nor more than 60 calendar days before the date specified for redemption and not earlier than 90 calendar days prior to the earliest date on which the Company or the Guarantor would be obliged to make such payment of Additional Amounts or withholding nor later than 365 days after the Company or the Guarantor first become liable to make such payment or withholding.

All payments made by the Company in respect of the Securities of any series or by the Guarantor under its Guarantee will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments, or other governmental charges of any nature imposed or levied by or on behalf of Canada or any political subdivision or authority thereof or therein having power to tax ("Taxes"), unless the Company is, or the Guarantor under its Guarantee is, required by law or by the interpretation or administration thereof by the relevant government authority or agency to withhold or deduct such Taxes. If the Company is, or the Guarantor under its Guarantee is, so required to withhold or deduct any amount for or on account of Taxes (or if a beneficial owner of a Security properly pays such Taxes directly as a result of (1) such owner being exempt from withholding as a result of its status for Canadian federal income tax purposes, or (2) the failure of the Company, or KMI under its Guarantee, to properly withhold or deduct such Taxes), the Company or the Guarantor under its Guarantee, as the case may be, will make the required withholding or deduction, make payment of the amount so withheld or deducted to the appropriate government authority and pay such additional amounts ("Additional Amounts") as may be necessary to ensure that the net amounts received by the Holders after the withholding or deduction (including any withholding or deduction from such

Additional Amounts) (or after the proper payment of such Taxes directly by the beneficial owner (including payment of such Taxes on Additional Amounts)) will not be less than the amounts of principal, interest and premium which would have been received in respect of the Securities in the absence of the withholding or deduction (or proper payment of Taxes). No Additional Amounts shall, however, be payable:

(1)

to a Holder in respect of a beneficial owner of the Security who is subject to the Taxes by reason of any present or former connection between the beneficial owner and Canada other than solely by the acquisition, holding or disposition of the Securities or by the receipt of payments in respect of the Securities or the enforcement of the rights hereunder; or

(2)

to the extent that the Taxes would not have been imposed but for the failure of the Holder to comply with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection with Canada of the beneficial owner if:

(i)

such compliance is required or imposed by law as a precondition to exemption from all or a part of the Tax; and

(ii)

at least 60 days prior to the first interest payment date with respect to which this clause (2) will apply, the Company or the Guarantor have notified the Holders that they will be required to comply with this requirement; or

(3)

to a Holder in respect of a beneficial owner that does not deal at arm's length (as contemplated by the Income Tax Act (Canada)) with the Company or the Guarantor at the time the payment is made.

No Additional Amounts will be paid to a Holder that is a depositary or its nominee to the extent that a beneficial owner would not have been entitled to receive payment of the Additional Amounts had the beneficial owner been the Holder of the Security.

For avoidance of doubt, all references to principal of and interest or premium on the Securities in this Indenture shall include any Additional Amounts payable by the Company or the Guarantor under its Guarantee.

The Company will pay any present or future stamp, court, documentary or other similar taxes, charges or levies that arise from the execution, delivery or registration of, or enforcement of rights under, this Indenture or any related document ("Documentary Taxes").

The Company's and the Guarantor's obligation to pay Additional Amounts and Documentary Taxes will survive any termination, defeasance or discharge of this Indenture.

ARTICLE XII

NON-RECOURSE

Section 1201.

No Personal Liability of Officers, Directors, Employees or Shareholders

Obligations of the Company or the Guarantor, as such, under this Indenture, the Securities and any Guarantee, are payable only out of cash flow and assets of the Company or the Guarantor, as applicable. The Trustee, and each Holder of a Security by its acceptance thereof, will be deemed to have agreed in this Indenture that no director, officer, employee, stockholder or shareholder, as such, of the Company, the Guarantor, the Trustee or any Affiliate of any of the foregoing entities shall have any personal liability in respect of the obligations of the Company or the Guarantor under this Indenture, the Company under the Securities or of the Guarantor under any Guarantee by reason of his, her or its status. The Company's shareholder, however, is liable. The agreements set forth in this Section 1201 are part of the consideration for the issuance of the Securities and the Guarantee.

ARTICLE XIII

DEFEASANCE

Section 1301.

Applicability of Article

The provisions of this Article shall be applicable to each series of Securities.

Section 1302.

Legal Defeasance

In addition to discharge of the Indenture pursuant to Section 401 with respect to the Securities of any series, the Company shall be deemed to have paid and discharged the entire indebtedness on all the Securities of such a series, and the Guarantor relieved of its obligations under the Guarantee as it relates to such series, on the 91st day after the date of the deposit referred to in Clause (1) below, and the provisions of this Indenture with respect to the Securities of such series and the Guarantee as it relates to such series shall no longer be in effect (except as to (i) rights of registration of transfer and exchange of Securities of such series and the Company's right of optional redemption, if any, (ii) substitution of mutilated, destroyed, lost or stolen Securities, (iii) rights of Holders of Securities to receive payments of principal thereof and interest thereon, upon the original state d due dates therefor or on the specified redemption dates therefor (but not upon acceleration), and remaining rights of the holders to receive mandatory sinking fund payments, if any, in each case out of the trust funds deposited with the Trustee pursuant to Section 1303, (iv) the rights, obligations, duties and immunities of the Trustee hereunder, and the Company's obligations in connection therewith (including, but not limited to, Section 607), (v) the rights, if any, to exchange the Securities of such series, (vi) the rights of Holders of Securities of such series as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them, and (vii) the obligations of the Company under Section 1002 and the obligations of the Company and the Guarantor to pay Additional Amounts and Documentary Taxes under Section 1108), and the Trustee, at the expense of the Company, shall, upon a Company Request, execute proper instruments

acknowledging the same, if the conditions set forth below are satisfied (hereinafter, "defeasance"):

(1)

The Company or the Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust, for the purposes of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of Holders of the Securities of such series (A) cash in an amount, or (B) U.S. Government Obligations, maturing as to principal and interest at such times and in such amounts as will insure the availability of cash, or (C) a combination thereof, certified to be sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay the principal and interest and premium, if any, on all Securities of such series on each date that such principal, interest or premium, if any, is due and payable or on any Redemption Date established pursuant to Clause (3) below ;

(2)

The Company has delivered to the Trustee an Opinion of Counsel (i) based on the fact that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (B) since the date hereof, there has been a change in the applicable federal income tax law, in either case to the effect that, and such opinion shall confirm that, Holders of the Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred; and (ii) the Company shall have delivered to the Trustee an Opinion of Counsel in Canada to the effect that the Holders of the Outstanding Securities will not recognize income, gain or loss for Canadian federal or provincial income tax or other tax (including withholding tax) purposes as a result of such defeasance and will be subject to Canadian federal and provincial income tax and other tax (including withholding tax) on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred.

(3)

If the Securities are to be redeemed prior to Stated Maturity, notice of such redemption shall have been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee shall have been made;

(4)

No Event of Default or event which with notice or lapse of time or both would become an Event of Default shall have occurred and be continuing on the date of such deposit;

(5)

Such defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act);

(6)

Such defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company or the Guarantor is a party or by which it is bound;

(7)

Such defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act of 1940, as amended, unless such trust shall be registered under such Act or exempt from registration thereunder; and

(8)

The Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance contemplated by this provision have been complied with.

For this purpose, such defeasance means that the Company, the Guarantor and any other obligor upon the Securities of such series shall be deemed to have paid and discharged the entire debt represented by the Securities of such series, which shall thereafter be deemed to be "Outstanding" only for the purposes of Section 1304 and the rights and obligations referred to in Clauses (i) through (vii), inclusive, of the first paragraph of this Section, and to have satisfied all its other obligations under the Securities of such series and this Indenture insofar as the Securities of such series are concerned.

Section 1303.

Covenant Defeasance

The Company, the Guarantor and any other obligor shall be released on the 91st day after the date of the deposit referred to in Clause (1) below from their respective obligations under Sections 704, 801, 802 and 1005 with respect to the Securities of any series on and after the date the conditions set forth below are satisfied (hereinafter, "covenant defeasance"), and the Securities of such series shall thereafter be deemed to be not "Outstanding" for the purposes of any request, demand, authorization, direction, notice, waiver, consent or declaration or other action or Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed Outstanding for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to the Securities of such series, the Company or the Guarantor may omit to compl y with and shall have no liability in respect of any term, condition or limitation set forth in any such Section, whether directly or indirectly by reason of any reference elsewhere herein to such Section or by reason of any reference in such Section to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 501, but, except as specified above, the remainder of this Indenture and the Securities of such series shall be unaffected thereby. The following shall be the conditions to application of this Section 1303:

(1)

The Company or the Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of Holders of the Securities of such series, (A) cash in an amount, or (B) U.S. Government Obligations, maturing as to principal and interest at such times and in such amounts as will insure the availability of cash, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay the principal and interest and premium, if any, on all Securities of such series on each date that such principal, interest or premium, if any, is due and payable or on any Redemption Date established pursuant to Clause (2) below;

(2)

(3)

No Event of Default or event which with notice or lapse of time or both would become an Event of Default shall have occurred and be continuing on the date of such deposit;

(4)

The Company has delivered to the Trustee an Opinion of Counsel which shall confirm that Holders of the Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same time as would have been the case if such deposit and covenant defeasance had not occurred; and the Company shall have delivered to the Trustee an Opinion of Counsel in Canada to the effect that the Holders of the Outstanding Securities will not recognize income, gain or loss for Canadian federal or provincial income tax or other tax (including withholding tax) purposes as a result of such covenant defeasance and will be subject to Canadian federal and provincial income tax and other tax (including withholding tax) on the same amounts, in the same manne r and at the same times as would have been the case if such covenant defeasance had not occurred;

(5)

Such covenant defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act);

(6)

Such covenant defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company or the Guarantor is a party or by which it is bound;

(7)

Such covenant defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act of 1940, as amended, unless such trust shall be registered under such Act or exempt from registration thereunder; and

(8)

The Company has delivered to the Trustee an Officers' Certificate and Opinion of Counsel stating that all conditions precedent provided for relating to the covenant defeasance contemplated by this provision have been complied with.

Section 1304.

Application by Trustee of Funds Deposited for Payment of Securities

Subject to the provisions of the last paragraph of Section 1003, all moneys or U.S. Government Obligations deposited with the Trustee pursuant to Section 1302 or 1303 (and all funds earned on such moneys or U.S. Government Obligations) shall be held in trust and applied by it to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent), to Holders of the particular Securities of such series for the payment or redemption of which such moneys or U.S. Government Obligations have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such moneys or U.S. Government Obligations need not be segregated from other funds except to the extent required by law.

Section 1305.

Repayment to the Company or the Guarantor

The Trustee and any Paying Agent promptly shall pay or return to the Company or the Guarantor, as applicable, upon Company Request or Guarantor Request any money and U.S. Government Obligations held by them at any time that are not required for the payment of the principal of and any interest on the Securities of any series for which money or U.S. Government Obligations have been deposited pursuant to Section 1302 or 1303, which, in the opinion of a

nationally recognized firm of independent public accountants expressed in a written certification delivered to the Trustee, are in excess of the amounts required to effect the defeasance with respect to the Outstanding Securities in question.

The provisions of the last paragraph of Section 1003 shall apply to any money held by the Trustee or any Paying Agent under this Article that remains unclaimed for two years after the Maturity of any series of Securities for which money or U.S. Government Obligations have been deposited pursuant to Section 1302 or 1303.

Section 1306.

Reinstatement

If the Trustee or the Paying Agent is unable to apply any money or U. S. Government Obligations in accordance with this Article by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company under this Indenture and the Securities of the applicable series and the obligations of the Guarantor under this Indenture and the Guarantee with respect to such series shall be revived and reinstated as though no deposit had occurred pursuant to this Indenture until such time as the Trustee or the Paying Agent is permitted to apply all such money or U. S. Government Obligations in accordance with this Article; provided, however, that if the Company or the Guarantor has made any payment of principal of or interest on any Securities of such series because of the reinsta tement of its obligations, the Company or the Guarantor, as applicable, shall be subrogated to the rights of Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or the Paying Agent.

ARTICLE XIV

GUARANTEE

Section 1401.

Unconditional Guarantee

The Guarantor by executing a counterpart of this Indenture hereby absolutely and unconditionally guarantees (the "Guarantee"), on an unsecured senior basis to each Holder of a Security authenticated and delivered by the Trustee, that: (i) the principal of and interest on the Securities will be promptly paid in full when due, subject to any applicable grace period, whether at the Stated Maturity, by acceleration, upon redemption or otherwise, and interest on the overdue principal, if any, and interest on any overdue installment of interest, to the extent lawful, on the Securities and (ii) in case of any extension of time of payment or renewal of any Securities, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at the Stated Maturity, by acceleration, u pon redemption or otherwise. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Securities or this Indenture, the absence of any action to enforce the same and any other circumstance (other than performance) which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, protest, notice and all demands whatsoever, and covenants that in the event of a default in the payment of principal, premium (if any) or interest on a Security of any series, proceedings may be instituted by the Trustee on behalf of the Holders or, subject to

Section 507 of this Indenture, by the Holders, on the terms and conditions set forth in this Indenture, directly against the Guarantor to enforce the Guarantee without first proceeding against the Company. If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to the Company or the Guarantor, any amount paid by the Company or the Guarantor to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Section 1402.

Subrogation

The Guarantor shall be subrogated to all rights of the Holders of the Securities of a particular series against the Company in respect of any amount paid by the Guarantor on account of such Securities pursuant to the provisions of this Guarantee or this Indenture; provided, however, that the Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of, any premium and interest on all Securities of such series issued hereunder shall have been paid in full.

Section 1403.

Execution of Guarantee

To evidence its guarantee to the Holders set forth in this Article XIV, the Guarantor executing this Indenture agrees to execute the Guarantee in substantially the form set forth in Section 202, which shall be endorsed on each Security ordered to be authenticated and delivered by the Trustee. The Guarantor hereby agrees that its Guarantee shall remain in full force and effect notwithstanding any failure to endorse on each Security such Guarantee. Each such Guarantee shall be signed on behalf of the Guarantor by an officer of the Guarantor (whom shall have been duly authorized by all requisite corporate actions) prior to the authentication of the Security on which it is endorsed, and the delivery of such Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of such Guarantee of behalf of the Guarantor. Such signature upon the Guarantee may be by manual or facsimile signature of such officer and may be imprinted or otherwise reproduced on the Guarantee, and in case any such officer who shall have signed the Guarantee shall cease to be such officer before the Security on which such Guarantee is endorsed shall have been authenticated and delivered by the Trustee or disposed of by the Company, such Security nevertheless may be authenticated and delivered or disposed of as though the Person who signed the Guarantee had not ceased to be such officer of the Guarantor.

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed in multiple counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument all as of the day and year first above written.

KINDER MORGAN FINANCE COMPANY, ULC

By:

/s/ Joseph Listengart

Name: Joseph Listengart

Title: Vice President

KINDER MORGAN, INC.

By:

/s/ Joseph Listengart

Name: Joseph Listengart

Title: Vice President

WACHOVIA BANK, NATIONAL ASSOCIATION

By:

/s/ Ednora G. Linares

Name: Ednora G. Linares

Title: Vice President

ANNEX A

FORM OF CERTIFICATE OF TRANSFER

Kinder Morgan Finance Company, ULC

500 Dallas Street, Suite 1000

Houston, Texas 77002

Telecopier No.: (713) 369-9410

Attention: Secretary

Kinder Morgan, Inc.

500 Dallas Street, Suite 1000

Houston, Texas 77002

Telecopier No.: (713) 369-9410

Attention: Secretary

Wachovia Bank, National Association,

as Trustee and Security Registrar

12 East 49th Street, 37th Floor

New York, New York 10017

Attention: Corporate Trust Administration

Re:

[5.35% Senior Notes due 2011] [5.70% Senior Notes due 2016] [6.40% Senior Notes due 2036] of Kinder Morgan Finance Company, ULC (the "Securities")

Reference is made to the Indenture, dated as of December 9, 2005 (the "Indenture"), among Kinder Morgan Finance Company, ULC (the "Company"), Kinder Morgan, Inc. (the "Guarantor"), and Wachovia Bank, National Association, as Trustee. Terms used herein and defined in the Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933, as amended (the "Securities Act"), are used herein as therein so defined.

The undersigned (the "Transferor") owns and proposes to transfer the Security[ies] or beneficial interest in such Security[ies] specified in Exhibit One hereto, in the principal amount of $__________ (the "Transfer"), to _______________ (the "Transferee"), as further specified in Exhibit One hereto. In connection with the Transfer, the Transferor hereby certifies to the Company, the Guarantor and the Trustee that:

[CHECK ALL THAT APPLY]

(1)

[ ] CHECK IF THE TRANSFER IS PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Security[ies] is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Security[ies] for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified

A-1

institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Security[ies] will be subject to the restrictions on transfer enumerated in the Restricted Securities Legend printed on the appropriate Global Security and/or Definitive Security and in the Indenture and the Securities Act.

(2)

[ ] CHECK IF THE TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN A REGULATION S GLOBAL SECURITY OR A DEFINITIVE SECURITY PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed s elling efforts have been made in contravention of the requirements of Rule 903(a) or Rule 904(a) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act, and (iv) the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than a Purchaser). Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Security[ies] will be subject to the restrictions on transfer enumerated in the Restricted Securities Legend printed on the appropriate Global Security and/or the Definitive Security and in the Indenture and the Securities Act.

(3)

[ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN A RESTRICTED GLOBAL SECURITY OR OF A RESTRICTED DEFINITIVE SECURITY PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Securities and Restricted Definitive Securities and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a)

[ ] such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

(b)

[ ] such Transfer is being effected to the Company or an affiliate thereof;

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(c)

[ ] such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

(d)

[ ] such Transfer is being effected pursuant to an exemption under the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904 to a Person who is an Institutional Accredited Investor and the Transferor further certifies that the transfer complies with the transfer restrictions applicable to the Restricted Global Securities or the Restricted Definitive Securities bearing the legend set forth in Section 305(g)(1) of the Indenture and the requirements of the exemption claimed, which certification is supported by (i) if such Transfer is in respect of a principal amount of Securities at the time of transfer of $250,000 or more, a certificate executed by the Transferee containing certain representations and agreements relating to the Transfer (the form of which can be obtained from the Trustee), or (ii) if such Transfer is in respect of a principal amount of Securities at the time of Tr ansfer of less than $250,000, (A) the certificate referenced in clause (i) above and (B) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that (1) such Transfer is in compliance with the Securities Act and (2) such Transfer complies with any applicable blue sky securities laws of any state of the United States;

(4)

[ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL SECURITY OR OF AN UNRESTRICTED DEFINITIVE SECURITY.

(a)

[ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Security[ies] will no longer be subject to the restrictions on transfer enumerated in the Restricted Securities Legend printed on the Restricted Global Securities, on Restricted Definitive Securities and in the Indenture.

(b)

[ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States, and (ii) the restrictions on transfer contained in the Indenture and the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Security[ies] will no longer be subject to the restrictions on transfer enumerated in the Restricted Securities Legend printed on the Restricted Global Securities, on Restricted Definitive Securities and in the Indenture.

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(c)

[ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States, and (ii) the restrictions on transfer contained in the Indenture and the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Security[ies] will not be subject to the restrictions on transfer enumerated in the Restricted Securities Legend printed on the Restricted Global Securities or Restricted Definitive Securities and in the Inden ture.

This certificate and the statements contained herein are made for the benefit of the Company, the Guarantor and the Trustee.

[Insert Name of Transferor]

By:

Name:

Title:

Dated:

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EXHIBIT ONE TO CERTIFICATE OF TRANSFER

The Transferor owns and proposes to transfer the following: [CHECK ONE]

(a)

a beneficial interest in:

[ ] a Regulation S Global Security; or

[ ] another Restricted Global Security; or

(b)

[ ] a Restricted Definitive Security.

After the Transfer the Transferee will hold: [CHECK ONE]

(a)

a beneficial interest in:

[ ] a Regulation S Global Security; or

[ ] another Restricted Global Security; or

[ ] Unrestricted Global Security; or

(b)

[ ] a Restricted Definitive Security; or

(c)

[ ] an Unrestricted Definitive Security,

in accordance with the terms of the Indenture.

A-5

ANNEX A

FORM OF CERTIFICATE OF EXCHANGE

Kinder Morgan Finance Company, ULC

500 Dallas Street, Suite 1000

Houston, Texas 77002

Telecopier No.: (713) 369-9410

Attention: Secretary

Kinder Morgan, Inc.

500 Dallas Street, Suite 1000

Houston, Texas 77002

Telecopier No.: (713) 369-9410

Attention: Secretary

Wachovia Bank, National Association,

as Trustee and Security Registrar

12 East 49th Street, 37th Floor

New York, New York 10017

Attention: Corporate Trust Administration

Re:

[5.35% Senior Notes due 2011] [5.70% Senior Notes due 2016] [6.40% Senior Notes due 2036] of Kinder Morgan Finance Company, ULC (the "Securities")

The undersigned (the "Owner") owns and proposes to exchange the Security[ies] or beneficial interest in such Security[ies] specified herein, in the principal amount of $__________ (the "Exchange"). In connection with the Exchange, the Owner hereby certifies to the Company, the Guarantor and the Trustee that:

EXCHANGE OF RESTRICTED DEFINITIVE SECURITIES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL SECURITY FOR UNRESTRICTED DEFINITIVE SECURITIES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL SECURITY

(1)

[ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL SECURITY TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL SECURITY. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Security for a beneficial interest in an Unrestricted Global Security in an equal

B-1

principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Securities and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on transfer contained in the Indenture and the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act, and (iv) the beneficial interest in an Unrestricted Global Security is being acquired in compliance with any applicable foreign securities laws and applicable blue sky securities laws of any state of the United States.

(2)

[ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL SECURITY TO UNRESTRICTED DEFINITIVE SECURITY. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Security for an Unrestricted Definitive Security in an equal principal amount, the Owner hereby certifies (i) the Unrestricted Definitive Security is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Securities and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act, and (iv) the Unrestricted Definitive Security is being acquired in compliance with any applicable foreign securities la ws and applicable blue sky securities laws of any state of the United States.

(3)

[ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SECURITY TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL SECURITY. In connection with the Owner's Exchange of a Restricted Definitive Security for a beneficial interest in an Unrestricted Global Security in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Securities and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act, and (iv) the beneficial interest is being acquired in compliance with any applicable foreign securities laws and applicable blue sky securities laws of any state of the United States.

(4)

[ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SECURITY TO UNRESTRICTED DEFINITIVE SECURITY. In connection with the Owner's Exchange of a Restricted Definitive Security for an Unrestricted Definitive Security in an equal principal amount, the Owner hereby certifies (i) the Unrestricted Definitive Security is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Securities and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Restricted Securities Legend are not required in order to maintain compliance with the Securities Act, and (iv) the Unrestricted Definitive Security is being acquired in compliance with any applicable foreign securities laws and applicable blue sky securities laws o f any state of the United States.

B-2

EXCHANGE OF RESTRICTED DEFINITIVE SECURITIES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL SECURITIES FOR RESTRICTED DEFINITIVE SECURITIES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL SECURITIES

(5)

[ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL SECURITY TO RESTRICTED DEFINITIVE SECURITY. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Security for a Restricted Definitive Security with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Security is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Security issued will continue to be subject to the restrictions on transfer enumerated in the Restricted Securities Legend printed on the Restricted Definitive Security and in the Indenture and the Securities Act.

(6)

[ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SECURITY TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL SECURITY. In connection with the Exchange of the Owner's Restricted Definitive Security for a beneficial interest in a Restricted Global Security with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Definitive Securities and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Restricted Secur ities Legend printed on the relevant Restricted Global Security and in the Indenture and the Securities Act.

This certificate and the statements contained herein are made for the benefit of the Company, the Guarantor and the Trustee.

[Insert Name of Owner]

By:

Name:

Title:

Dated:

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EX-4.3 3 kmiex43regrights.htm KMI EXHIBIT 4.3 REGISTRATION RIGHTS AGREEMENT Kinder Morgan, Inc. Registration Rights Agreement

Exhibit 4.3

Kinder Morgan, Inc.

Kinder Morgan Finance Company, ULC

$750,000,000 5.35% Notes due 2011

$850,000,000 5.70% Notes due 2016

$550,000,000 6.40% Notes due 2036

__________________

Registration Rights Agreement

December 9, 2005

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Citigroup Global Markets, Inc.

Barclays Capital Inc.

Greenwich Capital Markets, Inc.

J.P. Morgan Securities Inc.

Banc of America Securities LLC

Calyon Securities (USA) Inc.

Harris Nesbitt Corp.

Mitsubishi UFJ Securities International plc

SunTrust Capital Markets, Inc.

Wachovia Capital Markets, LLC

c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated

4 World Financial Center

New York, NY 10080

Ladies and Gentlemen:

Kinder Morgan Finance Company, ULC, an Alberta, Canada unlimited liability corporation (“Finance Corp”), as issuer, and Kinder Morgan, Inc., a Kansas corporation (“KMI” and jointly and severally with Finance Corp, the “Company”), as guarantor, propose to issue and sell to you (the “Purchasers”) upon the terms and subject to the conditions set forth in the Purchase Agreement (as defined herein) an aggregate of $750,000,000 principal amount of Finance Corp’s 5.35% Notes due 2011, an aggregate of $850,000,000 principal amount of Finance Corp’s 5.70% Notes due 2016 and an aggregate of $550,000,000 principal amount of Finance Corp’s 6.40% Notes due 2036, each issued on the date hereof (individually and collectively referred to as the “Securities”). As an inducement to the Purchasers to enter into the Purc hase Agreement and in satisfaction of a condition to the obligations of the Purchasers thereunder, the Company agrees with the Purchasers for the benefit of holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows:

Section 1.

Certain Definitions

For purposes of this Registration Rights Agreement, the following terms shall have the following respective meanings, unless the context otherwise requires:

“broker-dealer” shall mean any broker or dealer registered with the Commission under the Exchange Act.

“Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York are authorized or obligated by law, executive order or regulation to close.

“Closing Date” shall mean the date on which the Securities (as defined herein) are initially issued.

“Commission” shall mean the United States Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.

“Company” shall mean, jointly and severally, Kinder Morgan Finance Company, ULC, an Alberta, Canada unlimited liability corporation, as issuer, and Kinder Morgan, Inc., a Kansas corporation, as guarantor.

“Effective Time”, in the case of (i) an Exchange Registration, shall mean the time and date as of which the Commission declares the Exchange Registration Statement effective or as of which the Exchange Registration Statement otherwise becomes effective and (ii) a Shelf Registration, shall mean the time and date as of which the Commission declares the Shelf Registration Statement effective or as of which the Shelf Registration Statement otherwise becomes effective.

“Electing Holder” shall mean any holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(c)(ii) or 3(c)(iii) hereof.

“Exchange Act” shall mean the Securities Exchange Act of 1934, or any successor statute thereto, in each case as amended from time to time.

“Exchange Offer” shall have the meaning assigned thereto in Section 2(a) hereof.

“Exchange Registration” shall have the meaning assigned thereto in Section 3(b) hereof.

“Exchange Registration Statement” shall have the meaning assigned thereto in Section 2(a) hereof.

“Exchange Securities” shall have the meaning assigned thereto in Section 2(a) hereof.

“holder” shall mean the Purchasers and each other person who acquires Registrable Securities from time to time (including any successors or assigns), in each case for so long as such person owns any Registrable Securities.

“Indenture” shall mean the Indenture, dated as of December 9, 2005, between the Company and Wachovia Bank, National Association, as Trustee, as the same may be amended from time to time.

“Liquidated Damages” shall have the meaning assigned thereto in Section 2(c) hereof.

“Liquidated Damages Event” shall have the meaning assigned thereto in Section 2(c) hereof.

“NASD” shall mean the National Association of Securities Dealers, Inc.

“Notice and Questionnaire” means a Notice of Registration Statement and Selling Securityholder Questionnaire substantially in the form of Exhibit A hereto.

“person” shall mean any individual, corporation, partnership (whether general or limited), joint venture, limited liability company, association, joint stock company, trust, other entity, unincorporated organization or government or any agency or political subdivision thereof or governmental agency.

“Purchase Agreement” shall mean the Purchase Agreement, dated as of December 6, 2005, between the Company and the Purchasers, as the same shall be amended from time to time.

“Purchasers” shall mean Merrill Lynch & Co., Citigroup Global Markets, Inc., Barclays Capital Inc., Greenwich Capital Markets, Inc., J.P. Morgan Securities Inc., Banc of America Securities LLC, Calyon Securities (USA) Inc., Harris Nesbitt Corp., Mitsubishi UFJ Securities International plc, SunTrust Capital Markets, Inc., Wachovia Capital Markets, LLC.

“Registrable Securities” shall mean each of the Securities; provided, however, that such Security shall cease to be a Registrable Security when (i) in the circumstances contemplated by Section 2(a) hereof, the Security has been exchanged for an Exchange Security in the Exchange Offer as contemplated in Section 2(a) hereof (provided, that any Exchange Security that, pursuant to the last two sentences of Section 2(a) hereof, is included in a prospectus for use in connection with resales by broker-dealers shall be deemed to be a Registrable Security until resale of such Registrable Security has been effected within the 120-day period referred to in Section 2(a) hereof); (ii) in the circumstances contemplated by Section 2(b) hereof, a Shelf Registration Statement registering such Security under the Securities Act has been declared o r becomes effective and such Security has been sold or otherwise transferred by the holder thereof pursuant to and in a manner contemplated by such effective Shelf Registration Statement; (iii) such Security is sold pursuant to Rule 144 under circumstances in which any legend borne by such Security relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Company or pursuant to the Indenture; (iv) such Security is eligible to be sold pursuant to paragraph (k) of Rule 144 (or any similar provision then in effect); or (v) such Security shall cease to be outstanding.

“Registration Expenses” shall have the meaning assigned thereto in Section 4 hereof.

“Resale Period” shall have the meaning assigned thereto in Section 2(a) hereof.

“Restricted Holder” shall mean (i) a holder that is an affiliate of the Company within the meaning of Rule 405 (as defined herein), (ii) a holder who acquires Exchange Securities outside the ordinary course of such holder’s business, (iii) a holder who has arrangements or understandings with any person to participate in the Exchange Offer for the purpose of distributing Exchange Securities and (iv) a holder that is a broker-dealer, but only with respect to Exchange Securities received by such broker-dealer pursuant to the Exchange Offer in exchange for Registrable Securities acquired by the broker-dealer directly from the Company.

“Rule 144(k) Holding Period” shall have the meaning assigned thereto in Section 2(b) hereof.

“Rule 144”, “Rule 405” and “Rule 415” shall mean, in each case, such rule promulgated under the Securities Act (or any successor provision), as the same shall be amended from time to time.

“Securities” shall have the meaning assigned thereto in the first paragraph of this Registration Rights Agreement.

“Securities Act” shall mean the Securities Act of 1933, or any successor statute thereto, as the same shall be amended from time to time.

“Shelf Registration” shall have the meaning assigned thereto in Section 2(b) hereof.

“Shelf Registration Statement” shall have the meaning assigned thereto in Section 2(b) hereof.

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, or any successor statute thereto, and the rules, regulations and forms promulgated thereunder, all as the same shall be amended from time to time.

Unless the context otherwise requires, any reference herein to a “Section” or “clause” refers to a Section or clause, as the case may be, of this Registration Rights Agreement, and the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Registration Rights Agreement as a whole and not to any particular Section or other subdivision.

Section 2.

Registration Under the Securities Act

(a)

Except as set forth in Section 2(b) below, the Company agrees to use its reasonable efforts to file under the Securities Act, as soon as practicable, but no later than 120 days after the Closing Date, a single registration statement relating to an offer to exchange (such registration statement, the “Exchange Registration Statement” and, such offer, an “Exchange Offer”) any and all of the Securities for a like aggregate principal amount of debt securities issued by the Company, which debt securities will be substantially identical to such Securities tendered by the holders (and will be entitled to the benefits of a trust indenture that will be substantially identical to the Indenture or is the Indenture and that will be qualified under the Trust Indenture Act), except that such new debt securities will have been registered pursuant to an effective registration statement under the Securities Act, will not be subject to transfer restrictions or registration rights and will not be entitled to the benefit of provisions for the

Liquidated Damages contemplated in Section 2(c) below (such new debt securities hereinafter called “Exchange Securities”). The Company agrees to use its reasonable efforts to cause the Exchange Registration Statement to become effective under the Securities Act as soon as practicable, but no later than 210 days after the Closing Date. The Exchange Offer will be registered under the Securities Act on the appropriate form and will comply with all applicable tender offer rules and regulations under the Exchange Act. The Company further agrees to use its reasonable efforts to commence and complete the Exchange Offer promptly, but no later than 45 Business Days after the date on which the Exchange Registration Statement has become effective, to hold the Exchange Offer open for at least 30 days and to exchange the Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn on or prior to the expiration of the Exchange Offer. The Exchange Offer shall be deemed to have been completed upon the earlier to occur of (i) the Company having exchanged Exchange Securities for all outstanding Registrable Securities that are properly tendered and not withdrawn pursuant to the Exchange Offer and (ii) the Company having exchanged, pursuant to the Exchange Offer, Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn before the expiration of the Exchange Offer, which shall be on a date that is at least 30 days following the commencement of the Exchange Offer. The Company agrees (x) to include in the Exchange Registration Statement a prospectus for use in any resales by any holder of Exchange Securities that is a broker-dealer and (y) to keep such Exchange Registration Statement effective for a period (the “Resale Period”) beginning when Exchange Securities are first issued in the Exchange Offer and ending upon the earlier of the expiration of the 120th day after the Exchange Offer has been completed or such time as such broker-dealers no longer own any Registrable Securities. With respect to such Exchange Registration Statement, such holders shall have the benefit of the rights of indemnification and contribution set forth in Sections 5(a), (c), (d) and (e) hereof.

(b)

If (i) the Company determines that the Exchange Registration Statement is not available or the Exchange Offer may not be consummated because it would violate applicable law or the applicable interpretations of the staff of the Commission, (ii) the Exchange Offer has not been completed within 210 days plus 45 Business Days following the Closing Date or (iii) in the opinion of counsel for the Purchasers, under applicable law or the applicable interpretations of the staff of the Commission, the Purchasers are not entitled to tender Securities in the Exchange Offer or must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any offering or sale of Registrable Securities, the Company shall, in lieu of conducting the Exchange Offer contemplated by Section 2(a) hereof, use its reasonable efforts to file under the Securities Act, as soon as practicable after the time such obligation to file arises, a “shelf” registration statement providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the Commission (such filing, the “Shelf Registration” and, such registration statement, the “Shelf Registration Statement”). The Company agrees to use its reasonable efforts to cause the Shelf Registration Statement to become or be declared effective and to keep such Shelf Registration Statement continuously effective for a period ending on the earlier of the second anniversary of the Closing Date or, if Rule 144(k) is amended to provide a shorter restrictive period, such shorter period (the “Rule 144(k) Holding Period”) or such time as there are no longer any Registrable Securities outstanding; provided, however, that no hol der shall be entitled to be named as a selling securityholder in the Shelf Registration Statement or to use the prospectus forming a part thereof for resales of Registrable

Securities unless such holder is an Electing Holder, and furnishes to the Company in writing, within 20 days after receipt of a request therefor, such information with respect to such Electing Holder required under Regulation S-K under the Securities Act as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary prospectus included therein. No Electing Holder shall be entitled to Liquidated Damages pursuant to Section 2(c) hereof unless and until such Electing Holder shall have used its reasonable efforts to provide all such reasonably requested information. Each Electing Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Electing Holder not materially misleading. The Company further agrees to supplement or make amendments to the Shelf Registration Statement, as and when required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or rules and regulations thereunder for shelf registration, and the Company agrees to furnish to each Electing Holder copies of any such supplement or amendment promptly after its being used following its filing with the Commission.

(c)

The Company agrees to pay liquidated damages (the “Liquidated Damages”) upon the occurrence of any of the following events (each such event, a “Liquidated Damages Event”):

(i)

if the Exchange Registration Statement or Shelf Registration Statement is not filed within 120 days following the Closing Date, then commencing on the 121st day after the Closing Date, Liquidated Damages shall accrue on the Securities over and above the otherwise applicable interest rate at a rate of 0.25% per year; or

(ii)

if an Exchange Registration Statement or Shelf Registration Statement is filed and is not declared effective within 210 days following the Closing Date, then commencing on the 211th day after the Closing Date, Liquidated Damages shall accrue on the Securities over and above the otherwise applicable interest rate at a rate of 0.25% per year; or

(iii)

if either (A) the Company has not exchanged Exchange Securities for all Securities validly tendered in accordance with the terms of the Exchange Offer on or prior to 45 Business Days after the date on which the Exchange Registration Statement was declared effective, or (B) the Shelf Registration Statement has been declared effective, but such Shelf Registration Statement ceases to be effective at any time (I) prior to the expiration of the Rule 144(k) Holding Period and (II) while Registrable Securities are outstanding, then Liquidated Damages shall accrue on the Securities over and above the otherwise applicable interest rate at a rate of 0.25% per year commencing on the (x) 46th Business Day after such effective date, in the case of (A) above, or (y) the day the Shelf Registration Statement ceases to be effective, in the case of (B) above;

provided, however, that the circumstances under which the Company may be required to pay Liquidated Damages are not cumulative and the rate at which Liquidated Damages accrues on the Securities shall never exceed 0.25% per year; and, provided further, that Liquidated Damages on the Securities shall cease to accrue upon the earlier of (i) when all Liquidated Damages Events have been cured or (ii) upon the expiration of the Rule 144(k) Holding Period. For

purposes of clarifying the foregoing provisions, Liquidated Damages shall not accrue at any time that there are no Registrable Securities outstanding.

All accrued Liquidated Damages shall be payable, in the manner provided for the payment of interest in the Indenture and the Securities, on each applicable Interest Payment Date (as defined in the Indenture).

(d)

The Company shall take all actions reasonably necessary to be taken by it to ensure that the transactions contemplated herein are effected as so contemplated.

(e)

Any reference herein to a registration statement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time and any reference herein to any post-effective amendment to a registration statement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time.

Section 3.

Registration Procedures

If the Company files a registration statement pursuant to Section 2(a) or Section 2(b) hereof, the following provisions shall apply:

(a)

At or before the Effective Time of the Exchange Registration or the Shelf Registration, as the case may be, the Company shall qualify or shall have qualified the Indenture under the Trust Indenture Act.

(b)

In connection with the Company’s obligations with respect to the registration of Exchange Securities as contemplated by Section 2(a) hereof (the “Exchange Registration”), if applicable, the Company shall, as soon as practicable (or as otherwise specified):

(i) use its reasonable efforts to prepare and file with the Commission, as soon as practicable, but no later than 120 days after the Closing Date, an Exchange Registration Statement on any form that may be utilized by the Company and that shall permit the Exchange Offer and resales of Exchange Securities by broker-dealers during the Resale Period to be effected as contemplated by Section 2(a) hereof, and use its reasonable efforts to cause such Exchange Registration Statement to become effective as soon as practicable thereafter, but no later than 210 days following the Closing Date;

(ii) as soon as practicable prepare and file with the Commission such amendments and supplements to such Exchange Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Exchange Registration Statement for the periods and purposes contemplated in Section 2(a) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Exchange Registration Statement, and promptly provide each broker-dealer holding Exchange Securities with such number of copies of the prospectus included therein (as then amended or supplemented), in conformity in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder, as such broker-d ealer reasonably may request prior to the

expiration of the Resale Period, for use in connection with resales of Exchange Securities;

(iii) promptly notify each broker-dealer that has requested or received copies of the prospectus included in such registration statement and, if requested by such broker-dealer, confirm such advice in writing, (A) when such Exchange Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Exchange Registration Statement or any post-effective amendment, when the same has become effective, (B) of any request by the Commission for amendments or supplements to such Exchange Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Exchange Registration Statement or the initiation or threatening of any proceedings for that purpo se, (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Exchange Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (E) if at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such Exchange Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(iv) in the event that the Company would be required, pursuant to Section 3(b)(iii)(E) above, to notify any broker-dealers holding Exchange Securities, it will use its reasonable efforts to prepare and furnish to each such holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of such Exchange Securities during the Resale Period, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each broker-dealer agrees that up on receipt of any notice from the Company pursuant to Section 3(b)(iii)(E) hereof, such broker-dealer shall forthwith discontinue the disposition of Exchange Securities pursuant to the Exchange Registration Statement until such broker-dealer shall have received copies of such amended or supplemented prospectus and, if so directed by the Company, such broker-dealer shall deliver to the Company (at the Company’s expense) all copies of the prospectus covering such Exchange Securities then in such broker-dealers’ possession for the purpose of making offers of Exchange Securities;

(v) use its reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such Exchange Registration Statement or any post-effective amendment thereto at the earliest practicable date;

(vi) use its reasonable efforts to (A) register or qualify the Exchange Securities under the securities laws or blue sky laws of such jurisdictions as any holder of Exchange Securities shall reasonably request in writing no later than the commencement of the Exchange Offer, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions until the expiration of the Resale Period and (C) take any and all other actions as may be reasonably necessary to enable each broker-dealer holding Exchange Securities to consummate the disposition thereof in such jurisdictions under the securities laws or blue sky laws of such jurisdictions; provided, however, that the Company shall not be required for any such purpose to (1) quali fy as a foreign corporation or as a dealer in securities in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Agreement, (2) consent to general service of process in any such jurisdiction or subject itself to taxation in any such jurisdiction if it is not already so subject or (3) make any changes to its articles of incorporation or its bylaws or any agreement between it and its stockholders;

(vii) use its reasonable efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, that may be required to effect the Exchange Registration, the Exchange Offer and the offering and sale of Exchange Securities by broker-dealers during the Resale Period;

(viii) provide a CUSIP number for the Exchange Securities, not later than the applicable Effective Time; and

(ix) comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders as soon as practicable, but no later than 18 months after the effective date of such Exchange Registration Statement, an earnings statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder).

As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each holder shall furnish, upon the request of the Company, prior to the consummation thereof, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Registration) to the effect that (A) it is not an affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Exchange Securities to be issued in the Exchange Offer and (C) it is acquiring the Exchange Securities in its ordinary course of business. In addition, although holders shall otherwise cooperate in the Company’s preparation for the Exchange Offer, each holder hereby acknowledges and agrees that any broker-dealer who purchases the Securities from the Company to resell pursuant to Rule 144A or any other available exemption under the Securities Act or any holder who is an affiliate of the Company or who intends to use the Exchange Offer to participate in a distribution of the Exchange Securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters, (2) will not be entitled to tender

Securities in the Exchange Offer, and (3) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the Securities unless such sale or transfer is made pursuant to any exemption from such requirements.

(c)

In connection with the Company’s obligations with respect to the Shelf Registration, if applicable, the Company shall, as soon as practicable (or as otherwise specified):

(i) use its reasonable efforts to prepare and file with the Commission a Shelf Registration Statement on any form that may be utilized by the Company and that shall register all of the Registrable Securities for resale by the holders thereof in accordance with such method or methods of disposition as may be specified by such of the holders as, from time to time, may be Electing Holders and use its reasonable efforts to cause such Shelf Registration Statement to become effective;

(ii) not less than 30 days prior to the Effective Time of the Shelf Registration Statement, mail the Notice and Questionnaire to the holders of Registrable Securities; no holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement as of the Effective Time, and no holder shall be entitled to use the prospectus forming a part thereof for resales of Registrable Securities at any time, unless such holder has returned a completed and signed Notice and Questionnaire to the Company by the deadline for response set forth therein; provided, however, holders of Registrable Securities shall have at least 20 days from the date on which the Notice and Questionnaire is first mailed to such holders to return a completed and signed Notice and Questionnaire to the Company;

(iii) after the Effective Time of the Shelf Registration Statement, upon the request of any holder of Registrable Securities that is not then an Electing Holder, promptly send a Notice and Questionnaire to such holder; provided, that the Company shall not be required to take any action to name such holder as a selling securityholder in the Shelf Registration Statement or to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities until such holder has returned a completed and signed Notice and Questionnaire to the Company; and, provided further, that the Company shall not be required to file an amendment to such Shelf Registration Statement for the sole reason of naming such holder as a selling securityholder in the Shelf Registration Statement;

(iv) as soon as practicable prepare and file with the Commission such amendments and supplements to such Shelf Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Shelf Registration Statement for the period specified in Section 2(b) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Shelf Registration Statement, and furnish to the Electing Holders copies of any such supplement or amendment simultaneously with or prior to its being used or filed with the Commission;

(v) comply with the provisions of the Securities Act with respect to the disposition of all of the Registrable Securities covered by such Shelf Registration Statement in accordance with the intended methods of disposition by the Electing Holders provided for in such Shelf Registration Statement;

(vi) provide (A) the Electing Holders, (B) the underwriters (which term, for purposes of this Registration Rights Agreement, shall include a person deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act), if any, thereof, (C) any sales or placement agent therefor, (D) counsel for any such underwriter or agent and (E) not more than one counsel for all the Electing Holders the opportunity to participate in the preparation of such Shelf Registration Statement, each prospectus included therein or filed with the Commission and each amendment or supplement thereto;

(vii) for a reasonable period prior to the filing of such Shelf Registration Statement, and throughout the period specified in Section 2(b) hereof, make available at reasonable times at the Company’s principal place of business or such other reasonable place for inspection by the persons referred to in Section 3(c)(vi) hereof who shall certify to the Company that they have a current intention to sell the Registrable Securities pursuant to the Shelf Registration such financial and other information and books and records of the Company, and reasonably cause the officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that each s uch party shall be required to maintain in confidence and not to disclose to any other person any information or records considered by the Company in good faith as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such Shelf Registration Statement or otherwise), or (B) such person shall be required so to disclose such information pursuant to a subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to the requirements of such order, and only after such person shall have given the Company prompt prior written notice of such requirement), or (C) such information is required, as determined by the Company in good faith and its counsel, to be set forth in such Shelf Registration Statement or the prospectus included therein or in an amendment to such Shelf Registration Statement or an amendment or supplement to such prospectus in order that such Shelf Registrati on Statement, prospectus, amendment or supplement, as the case may be, complies with applicable requirements of the federal securities laws and the rules and regulations of the Commission thereunder and does not contain an untrue statement of a material fact or omit to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(viii) promptly notify each of the Electing Holders, any sales or placement agent therefor and any underwriter thereof (which notification may be made through any managing underwriter that is a representative of such underwriter for such purpose) and, if requested by such Holders, agents or underwriters, confirm such advice in writing, (A) when such Shelf Registration Statement or the prospectus included therein or any

prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Shelf Registration Statement or any post-effective amendment, when the same has become effective, (B) of any request by the Commission for amendments or supplements to such Shelf Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Shelf Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (E) if at any time when a prospectus is required to be delivered under the Securities Act, that such Shelf Registration Statemen t, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(ix) use its reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such Shelf Registration Statement or any post-effective amendment thereto at the earliest practicable date;

(x) if requested by any managing underwriter or underwriters, any placement or sales agent or any Electing Holder, promptly incorporate in a prospectus supplement or post-effective amendment such information as is required by the applicable rules and regulations of the Commission and as such managing underwriter or underwriters, such agent or such Electing Holder may reasonably propose should be included therein relating to the terms of the sale of such Registrable Securities, including information with respect to the principal amount of Registrable Securities being sold by such Electing Holder or agent or to any underwriters, the name and description of such Electing Holder, agent or underwriter, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being p aid therefor by such underwriters and with respect to any other terms of the offering of the Registrable Securities to be sold by such Electing Holder or agent or to such underwriters; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post-effective amendment;

(xi) furnish to each Electing Holder, each placement or sales agent, if any, therefor, each underwriter, if any, thereof and the respective counsel referred to in Section 3(c)(vi), a copy of such Shelf Registration Statement, each such amendment and supplement thereto (in each case including all exhibits thereto (in the case of an Electing Holder of Registrable Securities, upon request) and documents incorporated by reference therein) and such number of copies of such Shelf Registration Statement (excluding exhibits thereto and documents incorporated by reference therein unless specifically so requested by such Electing Holder, agent or underwriter, as the case may be) and of the prospectus included in such Shelf Registration Statement (including each preliminary prospectus and any summary prospectus), in conformity in all material respects with the

applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder, and such other documents as such Electing Holder, agent, if any, and underwriter, if any, may reasonably request in order to facilitate the offering and disposition of the Registrable Securities owned by such Electing Holder, offered or sold by such agent or underwritten by such underwriter and to permit such Electing Holder, agent and underwriter to satisfy the prospectus delivery requirements of the Securities Act; and the Company hereby consents to the use of such prospectus (including such preliminary and summary prospectus) and any amendment or supplement thereto by each such Electing Holder and by any such agent and underwriter, in each case in the form most recently provided to such person by the Company, in connection with the offering and sale of the Registrable Securities co vered by the prospectus (including such preliminary and summary prospectus) or any supplement or amendment thereto;

(xii) use reasonable efforts to (A) register or qualify the Registrable Securities to be included in such Shelf Registration Statement under such securities laws or blue sky laws of such jurisdictions as any Electing Holder and each placement or sales agent, if any, therefor and underwriter, if any, thereof shall reasonably request in writing, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period the Shelf Registration is required to remain effective under Section 2(b) above, and (C) take any and all other actions as may be reasonably necessary to enable each such Electing Holder, agent, if any, and underwriter, if any, to consummate the disposition in such jurisdictions under the securities law s or blue sky laws of such jurisdictions; provided, however, that the Company shall not be required for any such purpose to (1) qualify as a foreign corporation or as a dealer in securities in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Agreement, (2) consent to general service of process in any such jurisdiction or subject itself to taxation in any such jurisdiction if it is not already so subject, or (3) make any changes to its articles of incorporation or its bylaws or any agreement between it and its stockholders;

(xiii) use its reasonable efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, that may be required to effect the Shelf Registration or the offering or sale in connection therewith or to enable the selling holder or holders to offer, or to consummate the disposition of, their Registrable Securities;

(xiv) unless any Registrable Securities shall be in book-entry only form, cooperate with the Electing Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates, if so required by any securities exchange upon which any Registrable Securities are listed, shall be penned, lithographed or engraved, or produced by any combination of such methods, on steel engraved borders, and which certificates shall not bear any restrictive legends; and, in the case of an underwritten offering, enable such Registrable Securities to be in such denominations and registered in such names as

the managing underwriters may reasonably request at least two Business Days prior to any sale of the Registrable Securities;

(xv) provide a CUSIP number for the Registrable Securities, not later than the applicable Effective Time;

(xvi) in connection with an underwritten offering of Registrable Securities, enter into one or more customary underwriting agreements, engagement letters, agency agreements, “best efforts” underwriting agreements or similar agreements, as appropriate, including customary provisions relating to indemnification and contribution, and take such other actions in connection therewith as any Electing Holders aggregating at least a majority in aggregate principal amount of the Registrable Securities at the time outstanding (it being understood for purposes of this Agreement that all holders of the Registrable Securities shall vote on this and any other matter as a single class) shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;

(xvii) in connection with any underwritten offering of Registrable Securities pursuant to a Shelf Registration, to the extent requested by the underwriters thereof, (A) make such representations and warranties to the Electing Holders and the underwriters thereof in form, substance and scope as are customarily made in primary underwritten offerings of debt securities and covering matters including, but not limited to those set forth in the Purchase Agreement; (B) obtain an opinion of counsel to the Company in customary form and covering such matters of the type customarily covered by such an opinion in primary offerings of debt securities as the underwriters thereof may reasonably request, addressed to such underwriters thereof and dated the effective date of such Shelf Registration Statement and the date of the closing under the underwritin g agreement relating thereto) covering the matters customarily covered in opinions requested in primary underwritten offerings of debt securities (it being agreed that the matters to be covered by such opinion may be subject to customary qualifications and exceptions and it being understood that opinions that are substantially the same as those called for by the Purchase Agreement will be satisfactory for these purposes); (C) obtain a “cold comfort” letter or “cold comfort” letters from the independent certified public accountants of the Company addressed to the underwriters thereof, dated (i) the effective date of such Shelf Registration Statement and (ii) the effective date of any prospectus supplement to the prospectus included in such Shelf Registration Statement or post-effective amendment to such Shelf Registration Statement that includes unaudited or audited financial statements as of a date or for a period subsequent to that of the latest such statemen ts included in such prospectus (and, if such Shelf Registration Statement contemplates an underwritten offering pursuant to any prospectus supplement to the prospectus included in such Shelf Registration Statement or post-effective amendment to such Shelf Registration Statement that includes unaudited or audited financial statements as of a date or for a period subsequent to that of the latest such statements included in such prospectus, dated the date of the closing under the underwriting agreement relating thereto), such letter or letters to be in customary form and covering such matters of the type customarily covered by letters of such type; (D) deliver such customary documents and certificates, including officers’ certificates, as may be reasonably requested by the

underwriters thereof to evidence the accuracy of the representations and warranties made pursuant to clause (A) above and the compliance with or satisfaction of any agreements or conditions contained in the underwriting agreement or other agreement entered into by the Company; and (E) undertake such obligations relating to expense reimbursement, indemnification and contribution as are provided in Section 5 hereof;

(xviii) notify in writing each holder of Registrable Securities of any proposal of any amendment or waiver effected pursuant to Section 8(h) hereof, each of which notices shall contain the text of the amendment or waiver proposed or effected, as the case may be; and

(xix) comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders as soon as practicable, but in any event not later than 18 months after the effective date of such Shelf Registration Statement, an earnings statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder).

(d)

In the event that the Company would be required, pursuant to Section 3(c)(viii)(E) above, to notify the Electing Holders, the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof, the Company shall without any unreasonable delay prepare and furnish to each of the Electing Holders, to each placement or sales agent, if any, and to each such underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of Registrable Securities, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each Electing Holder agrees that upon receipt of any notice from the Company pursuant to Section 3(c)(viii)(E) hereof, such Electing Holder shall forthwith discontinue the disposition of Registrable Securities pursuant to the Shelf Registration Statement applicable to such Registrable Securities until such Electing Holder shall have received copies of such amended or supplemented prospectus, and if so directed by the Company, such Electing Holder shall deliver to the Company (at the Company’s expense) all copies of the prospectus covering such Registrable Securities then in such Electing Holder’s possession for the purpose of making offers of the Registrable Securities.

(e)

In the event of a Shelf Registration, in addition to the information required to be provided by each Electing Holder in its Notice and Questionnaire, the Company may require such Electing Holder to furnish to the Company such additional information regarding such Electing Holder and such Electing Holder’s intended method of distribution of Registrable Securities as may be required in order to comply with the Securities Act. Each such Electing Holder agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such Electing Holder to the Company or of the occurrence of any event in either case as a result of which any prospectus relating to such Shelf Registration contains or would contain an untrue statement of a material fact regarding such Electing Holder or such Electing Holder’s intended method of disposition of such Regist rable Securities or omits to state any material fact regarding such Electing Holder or such Electing Holder’s intended

method of disposition of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly to furnish to the Company any additional information required to correct and update any previously furnished information or required so that such prospectus shall not contain, with respect to such Electing Holder or the disposition of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing.

(f)

Until the expiration of the Rule 144(k) Holding Period, the Company will not, and will use its reasonable efforts to cause its “affiliates” (as defined in Rule 144) not to, resell any of the Securities that have been reacquired by any of them except pursuant to an effective registration statement under the Securities Act.

Section 4.

Registration Expenses

The Company agrees to bear and to pay or cause to be paid promptly all reasonable expenses incident to the Company’s performance of or compliance with this Registration Rights Agreement, including (a) all Commission and any applicable National Association of Securities Dealers, Inc. (“NASD”) registration, filing and review fees and expenses, including fees and disbursements of one counsel for the placement or sales agent or underwriters as a group in connection with such NASD registration, filing and review, (b) all fees and expenses in connection with the qualification of the Securities for offering and sale under the state securities and blue sky laws referred to in Section 3(c)(xii) hereof and determination of their eligibility for investment under the laws of such jurisdictions as any managing underwriters or the Electing Holders may reasonably designate, but not the fees and disbursements of counsel for the Electing Holders or underwriters as a group in connection with such qualification and determination, (c) all expenses relating to the preparation, printing, production, distribution and reproduction of each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the expenses of preparing the Securities for delivery and the expenses of printing or producing any required underwriting agreements, agreements among underwriters, selling agreements and blue sky or legal investment memoranda and all other documents in connection with the offering, sale or delivery of Securities to be disposed of (including certificates representing the Securities), (d) messenger, telephone and delivery expenses incurred by the Company, its counsel and auditors relating to the offering, sale or delivery of Securit ies and the preparation of documents referred in clause (c) above, (e) fees and expenses of the Trustee under the Indenture, any agent of the Trustee and any counsel for the Trustee and of any collateral agent or custodian, (f) internal expenses (including all salaries and expenses of the Company’s officers and employees performing legal or accounting duties), (g) fees, disbursements and expenses of counsel and independent certified public accountants of the Company (including the expenses of any opinions or “cold comfort” letters required by or incident to such performance and compliance), (h) fees, disbursements and expenses of one counsel for the Electing Holders retained in connection with a Shelf Registration, as selected by the Electing Holders of at least a majority in aggregate principal amount of the Registrable Securities held by Electing Holders (which counsel shall be reasonably satisfactory to the Company), (i) any fees charged by securities ra ting services for rating the Securities, and (j) fees, expenses and disbursements of

any other persons, including special experts, retained by the Company in connection with such registration (collectively, the “Registration Expenses”). To the extent that any Registration Expenses are reasonably incurred, assumed or paid by any holder of Registrable Securities or any placement or sales agent therefor or underwriter thereof, the Company shall reimburse such person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a request therefor. Notwithstanding the foregoing, the holders of the Registrable Securities being registered shall pay all agency fees and commissions, transfer taxes, if any, and underwriting discounts and commissions attributable to the sale of such Registrable Securities and the fees and disbursements of any counsel or other advisors or experts retained by such holders (severally or jointly), other than the counsel an d experts specifically referred to above.

Section 5.

Indemnification

(a)

Indemnification by the Company. The Company will indemnify and hold harmless each of the holders of Registrable Securities included in an Exchange Registration Statement, each of the Electing Holders of Registrable Securities included in a Shelf Registration Statement and each person who participates as a placement or sales agent or as an underwriter in any offering or sale of such Registrable Securities against any losses, claims, damages or liabilities, joint or several, to which such holder, agent or underwriter may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Exchange Registration Statement or Shelf Registration Statement, as the case may be, under which such Registrable Sec urities were registered under the Securities Act, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such holder, Electing Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such holder, such Electing Holder, such agent and such underwriter for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable to any such person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement or amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by such person expressly for use therein; and, provided further, that the Company shall not be liable to any such person, to the extent that any such losses, claims, damages or liabilities arise out of or are based upon an untrue statement or alleged untrue statement of a material fact or omission or alleged omission if either (A)(i) such person was required by law to send or deliver, and failed to send or deliver, a copy of the prospectus with or prior to delivery of written confirmation of the sale by such person to the person asserting the claims from which such losses, claims, damages or liabilities arise and (ii) the prospectus previously delivered by the Company to such person would have corrected such untrue statement or alleged untrue statement or omission or alleged omission, (B)(i) such untrue statement or alleged untrue statement or omission or alleged omission is corrected in an amendment t o the prospectus and (ii) having been previously furnished by or on behalf of the Company with copies of the prospectus as so amended or supplemented, such person failed to send or deliver a copy of such amendment to the prospectus with or prior to the delivery of written confirmation of the

sale of a Registrable Security to the person asserting the claim from which such losses, claims, damages or liabilities arise or (C)(i) such person disposed of Registrable Securities to the person asserting the claim from which such losses, claims, damages or liabilities arise pursuant to an Exchange Registration Statement or Shelf Registration Statement and sent or delivered, or was required by law to send or deliver, a prospectus to such person in connection with such disposition, (ii) such person received a suspension notice as provided in Sections 3(b)(iii)(C) through (E) and 3(c)(viii)(C) through (E) hereof in writing at least one Business Day prior to the date of such disposition and (iii) such untrue statement or alleged untrue statement or omission or alleged omission was the reason for such suspension notice.

(b)

Indemnification by the Holders and any Agents and Underwriters. In the case of a Shelf Registration pursuant to Section 2(b) hereof, each Electing Holder and each underwriter who participates as an underwriter in any offering or sale of Registrable Securities, severally and not jointly, will (i) indemnify and hold harmless the Company, and all other holders of Registrable Securities, against any losses, claims, damages or liabilities to which the Company or such other holders of Registrable Securities may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in such registration statement, or any preliminary, final or summary prospectus contained therein or furnished by the Company t o any such Electing Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Electing Holder or underwriter expressly for use therein, and (ii) reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that no such Electing Holder shall be required to undertake liability to any person under this Section 5(b) for any amounts in excess of the dollar amount of the proceeds to be received by such Electing Holde r from the sale of such Electing Holder’s Registrable Securities pursuant to such registration.

(c)

Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection (a) or (b) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 5, notify such indemnifying party in writing of the commencement of such action; but the omission so to notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party otherwise than under the indemnification provisions of or contemplated by Section 5(a) or 5(b) hereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent tha t it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party

shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d)

Contribution. If for any reason the indemnification provisions contemplated by Section 5(a) or Section 5(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 5(d) were determined by pro rata allocation (even if the holders or any agents or underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 5(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5(d), no holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such holder from the sale of any Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages that such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraud ulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The holders’ and any underwriters’ obligations in this Section 5(d) to contribute shall be several in proportion to the principal amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint.

(e)

The obligations of the Company under this Section 5 shall be in addition to any liability that the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any such holder, Electing Holder, sales agent or underwriter participating in the sale of Registrable Securities within the meaning of the Securities Act; and the obligations of the Electing Holders and any agents or underwriters contemplated by this Section 5 shall be in addition to any liability that the respective Electing Holder, agent or underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his consent, is named in any registration statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the S ecurities Act.

Section 6.

Underwritten Offerings

(a)

Selection of Underwriters. If any of the Registrable Securities covered by the Shelf Registration are to be sold pursuant to an underwritten offering, the managing underwriter or underwriters thereof shall be designated by Electing Holders holding at least a majority in aggregate principal amount of the Registrable Securities to be included in such offering, provided, that such designated managing underwriter or underwriters is or are reasonably acceptable to the Company.

(b)

Participation by Holders. Each holder of Registrable Securities hereby agrees with each other such holder that no such holder may participate in any underwritten offering hereunder unless such holder (i) agrees to sell such holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

Section 7.

Rule 144

The Company covenants to the holders of Registrable Securities that to the extent it shall be required to do so under the Exchange Act, the Company shall timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities Act), all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities in connection with that holder’s sale pursuant to Rule 144, the Company shall advise such holder in writing as to whether the Company has complied with such requirements.

Section 8.

Miscellaneous

(a)

No Inconsistent Agreements. The Company represents, warrants, covenants and agrees that it has not granted, and shall not grant, registration rights with respect to Registrable Securities or any other securities that would be inconsistent with the terms contained in this

Registration Rights Agreement. The Indenture provides that the Company may reopen the Indenture and issue additional 5.35% Notes due 2011, 5.70% Notes due 2016 and 6.40% Notes due 2036, which would constitute part of the same series of notes as the Securities. In connection with any such reopening and issuance, the Company may enter into a registration rights agreement for the benefit of the purchasers and holders of such additional securities, which agreement may have terms substantially similar to the terms of this Registration Rights Agreement. If securities having the benefit of such agreement are included in a Shelf Registration Statement together with Registrable Securities, then, to the extent provided in such other registration rights agreement, decisions and directions described in this Registration Rights Agreement related to such Shelf Registration and Shelf Registration Statement to be made by Electing H olders holding a majority in principal amount of Registrable Securities or of subsets of Registrable Securities shall instead be made by Electing Holders and electing holders under such other registration rights agreement together owning a majority in principal amount of Registrable Securities and such additional securities or analogous subsets of Registrable Securities and such additional securities. No such registration rights agreement shall be deemed to be inconsistent with the terms contained in this Registration Rights Agreement.

(b)

Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if the Company fails to perform any of its obligations hereunder and that the Purchasers and the holders from time to time of the Registrable Securities may be irreparably harmed by any such failure, and accordingly agree that the Purchasers and such holders, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of the Company under this Registration Rights Agreement in accordance with the terms and conditions of this Registration Rights Agreement, in any court of the United States or any state thereof having jurisdiction; provided, that, in the case of any terms of this Registration Rights Agreement for which Liquidated Damages pursuant to Section 2(c) hereof is expressly provided as a remedy of a violation of such terms, such Liquidated Damages shall be the sole monetary damages for such violation.

(c)

Notices. All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested), or telecopied (when receipt is acknowledged) as follows: if to the Company, One Allen Center, Suite 1000, 500 Dallas Street, Houston, Texas 77002, Attention: Joseph Listengart, telecopier number (713) 369-9410, and, if to a holder, to the address of such holder set forth in the security register or other records of the Company, or to such other address as the Company or any such holder may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

(d)

Parties in Interest. All the terms and provisions of this Registration Rights Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and the holders from time to time of the Registrable Securities and the respective successors and assigns of the parties hereto and such holders; provided, however, that nothing herein shall be deemed to permit any transfer of Registrable Securities in violation of this Agreement, the Indenture or applicable law. In the event that any transferee of any holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift,

bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a beneficiary hereof for all purposes and such Registrable Securities shall be held subject to all of the terms of this Registration Rights Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of, and be conclusively deemed to have agreed to be bound by all of the applicable terms and provisions of this Registration Rights Agreement. If the Company shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the Registrable Securities subject to all of the applicable terms hereof.

(e)

Survival. The respective indemnities, agreements, representations, warranties and each other provision set forth in this Registration Rights Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer or partner of such holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable Securities by such holder and the consummation of an Exchange Offer.

(f)

Governing Law. This Registration Rights Agreement shall be governed by and construed in accordance with the laws of the State of New York.

(g)

Headings. The descriptive headings of the several Sections and paragraphs of this Registration Rights Agreement are inserted for convenience only, do not constitute a part of this Registration Rights Agreement and shall not affect in any way the meaning or interpretation of this Registration Rights Agreement.

(h)

Entire Agreement; Amendments. This Registration Rights Agreement and the other writings referred to herein (including the Indenture and the form of Securities, and, to the extent described in Section 8(a), any registration rights agreement related to additional 5.35% Notes due 2011, 5.70% Notes due 2016 and 6.40% Notes due 2036 issued under the Indenture) or delivered pursuant hereto that form a part hereof contain the entire understanding of the parties with respect to its subject matter. This Registration Rights Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter. This Registration Rights Agreement may be amended and the observance of any term of this Registration Rights Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly execu ted by the Company and the holders of at least a majority in aggregate principal amount of the Registrable Securities at the time outstanding (except with respect to Section 2(c) hereof, which may be amended only with the consent of each holder of Registrable Securities at the time outstanding). Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment or waiver effected pursuant to this Section 8(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder.

(i)

Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the

validity, legality and enforceability of any such provisions in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(j)

Counterparts. This agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.

If the foregoing is in accordance with your understanding, please sign and return to us four counterparts hereof, being one for the Company, one for the Purchasers and one for each counsel, and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement between the Purchasers and the Company.

Very truly yours,

KINDER MORGAN, INC.

By: /s/ Joseph Listengart

Name: Joseph Listengart

Title:

Vice President

KINDER MORGAN FINANCE COMPANY, ULC

By: /s/ Joseph Listengart

Name: Joseph Listengart

Title: Vice President

Accepted as of the date hereof:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

CITIGROUP GLOBAL MARKETS, INC.

BARCLAYS CAPITAL INC.

GREENWICH CAPITAL MARKETS, INC.

J.P. MORGAN SECURITIES INC.

BANC OF AMERICA SECURITIES LLC

CALYON SECURITIES (USA) INC.

HARRIS NESBITT CORP.

MITSUBISHI UFJ SECURITIES INTERNATIONAL PLC

SUNTRUST CAPITAL MARKETS, INC.

WACHOVIA CAPITAL MARKETS, LLC

By: Merrill Lynch, Pierce, Fenner & Smith Incorporated

By: /s/ Robert A. Pacha

Name: Robert A. Pacha

Title: Managing Director

Exhibit A

Kinder Morgan Finance Company, ULC

INSTRUCTION TO DTC PARTICIPANTS

[Date of Mailing]

URGENT — IMMEDIATE ATTENTION REQUESTED

DEADLINE FOR RESPONSE: [DATE]*

The Depository Trust Company (“DTC”) has identified you as a DTC Participant through which beneficial interests in the 5.35% Notes due 2011, 5.70% Notes due 2016 and 6.40% Notes due 2036 (individually and collectively, the “Securities”) of Kinder Morgan Finance Company, ULC (“Finance Corp”) are held.

The Company is in the process of registering the Securities under the Securities Act of 1933 for resale by the beneficial owners thereof. In order to have their Securities included in the registration statement, beneficial owners must complete and return the enclosed Notice of Registration Statement and Selling Securityholder Questionnaire.

It is important that beneficial owners of the Securities receive a copy of the enclosed materials as soon as possible as their rights to have the Securities included in the registration statement depend upon their returning the Notice and Questionnaire by [Deadline For Response]. Please forward a copy of the enclosed documents to each beneficial owner that holds interests in the Securities through you. If you require more copies of the enclosed materials or have any questions pertaining to this matter, please contact Kinder Morgan Finance Company, ULC. One Allen Center, Suite 1000, 500 Dallas Street, Houston, Texas 77002, Attention: General Counsel.

* Not less than 20 calendar days from date of mailing.

A-1

Kinder Morgan Finance Company, ULC

Notice of Registration Statement

and

Selling Securityholder Questionnaire

[Date]

Reference is hereby made to the Registration Rights Agreement (the “Registration Rights Agreement”) between Kinder Morgan Finance Company, ULC (“Finance Corp”), as issuer, Kinder Morgan, Inc. (“KMI” and jointly and severally with Finance Corp, the “Company”), as guarantor, and the Purchasers named therein. Pursuant to the Registration Rights Agreement, the Company has filed with the United States Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (the “Shelf Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Company’s 5.35% Notes due 2011, 5.70% Notes due 2016 and 6.40% Notes due 2036 (individually and collectively, the “Securities< /I>”). A copy of the Registration Rights Agreement is attached hereto. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

Each beneficial owner of Registrable Securities (as defined below) is entitled to have the Registrable Securities beneficially owned by it included in the Shelf Registration Statement. In order to have Registrable Securities included in the Shelf Registration Statement, this Notice of Registration Statement and Selling Securityholder Questionnaire (the “Notice and Questionnaire”) must be completed, executed and delivered to the Company’s counsel at the address set forth herein for receipt ON OR BEFORE [Deadline for Response]. Beneficial owners of Registrable Securities who do not complete, execute and return this Notice and Questionnaire by such date (i) will not be named as selling securityholders in the Shelf Registration Statement and (ii) may not use the prospectus forming a part thereof for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and related prospectus.

ELECTION

The undersigned holder (the “Selling Securityholder”) of Registrable Securities hereby elects to include in the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item (3). The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement, including, without limitation, Section 6 of the Registration Rights Agreement, as if the undersigned Selling Securityholder were an original party thereto.

Upon any sale of Registrable Securities pursuant to the Shelf Registration Statement, the Selling Securityholder will be required to deliver to the Company and Trustee the Notice of Transfer set forth in Appendix A to the prospectus and as Exhibit B to the Registration Rights Agreement. The Selling Securityholder hereby provides the following information to the Company and represents and warrants that such information is accurate and complete:

QUESTIONNAIRE

(1)

(a)

Full Legal Name of Selling Securityholder:

(b)

Full Legal Name of Registered Holder (if not the same as in (a) above) of Registrable Securities Listed in Item (3) below:

(c)

Full Legal Name of DTC Participant (if applicable and if not the same as (b) above) Through Which Registrable Securities Listed in Item (3) below are Held:

(2)

Address for Notices to Selling Securityholder:

Telephone:

Fax:

Contact Person:

(3)

Beneficial Ownership of Securities:

Except as set forth below in this Item (3), the undersigned does not beneficially own any Securities.

(a)

Principal amount of Registrable Securities beneficially owned:

Title and CUSIP No(s). of such Registrable Securities:

(b)

Principal amount of Securities other than Registrable Securities beneficially owned:

Title and CUSIP No(s). of such other Securities:

(c)

Principal amount of Registrable Securities that the undersigned wishes to be included in the Shelf Registration Statement:

(d)

Title and CUSIP No(s). of such Registrable Securities to be included in the Shelf Registration Statement:

(4)

Beneficial ownership of Other Securities of the Company:

Except as set forth below in this Item (4), the undersigned Selling Securityholder is not the beneficial or registered owner of any other securities of the Company, other than the Securities listed above in Item (3).

State any exceptions here:

(5)

Relationships with the Company:

Except as set forth below, neither the Selling Securityholder nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office

or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

State any exceptions here:

(6)

Plan of Distribution:

Except as set forth below, the undersigned Selling Securityholder intends to distribute the Registrable Securities listed above in Item (3) only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned Selling Securityholder or, alternatively, through underwriters, broker-dealers or agents. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registered Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the Selling Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities in the course of hedging the positions they assume. The Selling Securityholder may also sell Registrable Securities short and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities.

State any exceptions here:

By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations thereunder, particularly Regulation M. In the event that the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item (3) above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement.

By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items (1) through (6) above and the inclusion of such information in the Shelf Registration Statement and related prospectus. The Selling Securityholder understands that such information will be relied upon by the Company in connection with the preparation of the Shelf Registration Statement and related prospectus.

In accordance with the Selling Securityholder’s obligation under Section 3(e) of the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided

herein that may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains in effect. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing, by hand-delivery, first-class mail or air courier guaranteeing overnight delivery as follows:

(i)

To the Company:

Joseph Listengart, General Counsel

Kinder Morgan, Inc.

One Allen Center

500 Dallas Street, Suite 1000

Houston, Texas 77002

(ii)

With a copy to:

Gary Orloff

Bracewell & Giuliani LLP

711 Louisiana, Suite 2300

Houston, Texas 77002

Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company’s counsel, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives and assigns of the Company and the Selling Securityholder (with respect to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above). This Agreement shall be governed in all respects by the laws of the State of New York.

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

Dated:

Selling Securityholder

(Print/type full legal name of beneficial owner

of Registrable Securities)

By:

Name:

Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY’S COUNSEL AT:

Exhibit B

NOTICE OF TRANSFER PURSUANT TO
REGISTRATION STATEMENT

Kinder Morgan, Inc.

Kinder Morgan Finance Company, ULC

c/o Wachovia Bank, National Association

12 East 49th Street, 37th Floor

New York, NY 10017

Attention: Corporate Trust Department

Re:

Kinder Morgan, Inc. and Kinder Morgan Finance Company, ULC (together, the “Company”)

___% Notes due 2011

___% Notes due 2016

___% Notes due 2036

Dear Sirs:

Please be advised that ________________ has transferred an aggregate of $_________ principal amount of the above-referenced ___% Notes due 2011, an aggregate of $_________ principal amount of the above-referenced ___% Notes due 2016 and an aggregate of $_________ principal amount of the above-referenced ___% Notes due 2036 pursuant to an effective Registration Statement on Form S-3 (File No. 333-________) filed by the Company.

We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933, as amended, have been satisfied and that the above-named beneficial owner of the Securities is named as a “Selling Holder” in the prospectus dated [date] or in supplements thereto, and that the aggregate principal amount of the Securities transferred are the Securities listed in such prospectus opposite such owner’s name.

Dated:

Very truly yours,

(Name)

By:

(Authorized Signature)

B-1

EX-99.1 4 kmiex991purchaseagr.htm KMI EXHIBIT 99.1 PURCHASE AGREEMENT Kinder Morgan Finance Company, ULC Purchase Agreement

Exhibit 99.1

Kinder Morgan Finance Company, ULC

$750,000,000 5.35% Senior Notes due 2011

$850,000,000 5.70% Senior Notes due 2016

$550,000,000 6.40% Senior Notes due 2036

Fully and Unconditionally Guaranteed by Kinder Morgan, Inc.

Purchase Agreement

December 6, 2005

MERRILL LYNCH & CO.

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

Citigroup Global Markets Inc.

as Representatives of the several Purchasers

named in Schedule I hereto (the “Representatives”)

c/o Merrill Lynch & Co.

      Merrill Lynch, Pierce, Fenner & Smith

Incorporated

4 World Financial Center

New York, NY 10080

Ladies and Gentlemen:

Kinder Morgan Finance Company, ULC, an unlimited liability corporation organized under the laws of the province of Alberta, Canada (“Finance Company”), and an indirect wholly-owned subsidiary of Kinder Morgan, Inc., a Kansas corporation (“KMI”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Purchasers named in Schedule I hereto (the “Purchasers”) an aggregate of $750,000,000 principal amount of the 5.35% Senior Notes due 2011 (the “2011 Notes”), $850,000,000 principal amount of the 5.70% Senior Notes due 2016 (the “2016 Notes”) and $550,000,000 principal amount of the 6.40% Senior Notes due 2036 (the “2036 Notes”) (collectively, the “Notes”) of Finance Company, which Notes will be fully and unconditionally guaranteed by KMI on a senior unsecured basis as to principal, interest and any additional amounts required to be paid as a result of any withholding or deduction for Canadian taxes (the “Guarantees” and, collectively with the Notes, the “Securities”).

1.

Finance Company and KMI, jointly and severally, represent and warrant to, and agree with, the Purchasers that:

(a)

A preliminary offering memorandum of December 6, 2005 (the “Preliminary Offering Memorandum”) and an offering memorandum, dated December 6, 2005

(the “Offering Memorandum”) have been prepared in connection with the offering of the Securities. Any reference to the Preliminary Offering Memorandum or the Offering Memorandum shall be deemed to refer to and include KMI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (the “2004 Form 10-K”), KMI’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2005, June 30, 2005 and September 30, 2005 (the “Form 10-Qs”), KMI’s Current Reports on Form 8-K filed on May 6, 2005, May 16, 2005, August 1, 2005, August 11, 2005, September 16, 2005, September 23, 2005, October 25, 2005, and November 30, 2005 (as amended by Form 8-K/A filed on December 6, 2005) and all subsequent documents, including all Current Reports on Form 8-K, filed by KMI with the Securities and Exchange Commission (the “Commission”) pursuant to Section 13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or prior to the date of the Preliminary Offering Memorandum or the Offering Memorandum, as applicable; any reference to any amendment or supplement to the Preliminary Offering Memorandum or the Offering Memorandum shall be deemed to include (i) any documents filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the Preliminary Offering Memorandum or the Offering Memorandum, as applicable, and prior to the date of such amendment or supplement and (ii) any Additional Issuer Information (as defined in Section 5(f)) furnished by Finance Company or KMI prior to the completion of the placement of the Securities by the Purchasers; and all documents filed under the Exchange Act and deemed to be included in the Preliminary Offering Memorandum or Offering Memorandum, or any amendment or supplement thereto, are hereinafter called the “Exchange Act Reports;”

(b)

The Preliminary Offering Memorandum (except for information relating to the terms of the Notes or the distribution or pricing thereof and information based upon or derived therefrom, which information is contained in the Offering Memorandum) did not at 5:00 p.m. EST on December 6, 2005 (the “Pricing Time”) contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to Finance Company or KMI by the Purchasers expressly for use therein;

(c)

Each of the Offering Memorandum and any amendment or supplement thereto does not and will not, as of the date of such Offering Memorandum or such supplement or amendment, as the case may be, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to Finance Company or KMI by the Purchasers expressly for use therein;

(d)

The Exchange Act Reports, when they were or are filed with the Commission, conformed or will conform as of their respective dates in all material respects to the applicable requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder;

(e)

The consolidated financial statements of KMI included in each of the Preliminary Offering Memorandum and the Offering Memorandum present fairly the financial position of KMI and its consolidated subsidiaries as of the dates shown and their results of operations, stockholders’ equity and cash flows for the periods shown, and, except as otherwise disclosed in each of the Preliminary Offering Memorandum and the Offering Memorandum, such financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis; the consolidated financial statements of Terasen included in each of the Preliminary Offering Memorandum and the Offering Memorandum present fairly the financial position of Terasen and its consolidated subsidiaries as of the dates shown and their results of operations, stockholders’ equity and cash flows for the periods shown, and, except as otherwise disclosed in each of the Preliminary Offering Memorandum and the Offering Memorandum, such financial statements have been prepared in conformity with generally accepted accounting principles in Canada applied on a consistent basis; any related schedules included in each of the Preliminary Offering Memorandum and the Offering Memorandum present fairly the information required to be stated therein; the “Supplementary Information” entitled “Reconciliation With United States Generally Accepted Accounting Principles and Conversion to United States Dollars” included each of the Preliminary Offering Memorandum and the Offering Memorandum, when considered in relation to the basic consolidated financial statements, taken as a whole, presents fairly the information set forth therein and, except as otherwise disclosed in each of the Preliminary Offering Memorandum and the Offering Memorandum, such Supplementary Information has been prepared in conformity with generally accepted accounting principles in the United States (as applicable); any summary or selected financial data included in each of the Preliminary Offering Memorandum and the Offering Memorandum present fairly the information shown therein and, to the extent based upon or derived from the financial statements, have been compiled on a basis consistent with the financial statements presented therein except as otherwise stated therein or in the notes thereto; and as to any pro forma financial statements included in each of the Preliminary Offering Memorandum and the Offering Memorandum, the assumptions used in preparing the pro forma financial statements included in each of the Preliminary Offering Memorandum and the Offering Memorandum provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma columns therein reflect the prop er application of those adjustments to the corresponding historical financial statement amounts;

(f)

KMI is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Kansas; Finance Company is an unlimited liability corporation, validly existing and in good standing under the laws of the province of Alberta, Canada; each of KMI and Finance Company has all necessary corporate power and authority to own its properties and conduct its business as described in the Offering Memorandum and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where the failure to be so qualified would not individually or in the aggregate have a material adverse effect on the consolidated financial condition, results of operations or business of KMI and its subsidiaries, taken as a whole (a “Material Adverse Effect”);

(g)

All of the outstanding shares of capital stock, limited partner interests, general partner interests, or limited liability company interests, as applicable, of (i) each of KMI’s subsidiaries included in the consolidated financial statements of KMI as consolidated subsidiaries and (ii) each of Finance Company, 0731297 B.C. Ltd. (“Acquisition Co.”), Terasen Inc., a corporation existing under the laws of British Columbia (“Terasen”), and the direct and indirect wholly owned subsidiaries of Terasen listed on Schedule II hereto (collectively with the subsidiaries referred in clause (i), the “Significant Subsidiaries”), have been duly and validly authorized and issued and are fully paid and (except (A) as required to the contrary by the Delaware Limited Liability Company Act (the “Delaware LLC Act”) and the Delaware Revised Uniform Limited Partnership Act (th e “Delaware LP Act”), (B) with respect to any general partner interests, and (C) with respect to any interests in unlimited liability corporations) non-assessable, and are (unless otherwise stated on Schedule III to this Agreement) owned by KMI directly or indirectly through one or more wholly-owned subsidiaries. All of such shares or interests owned directly or indirectly by KMI are owned free and clear of any lien, encumbrance, security interest, equity or charge (except for such liens, encumbrances, security interests, equities or charges as are not, individually or in the aggregate, material to such interest ownership or as described in the Offering Memorandum);

(h)

Each of the Significant Subsidiaries has been duly formed or incorporated and is validly existing as a corporation, limited partnership, general partnership, limited liability company or unlimited liability corporation, as the case may be, in good standing under the laws of the jurisdiction in which it is chartered or organized, with full entity power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Offering Memorandum, and is duly qualified to do business as a corporation, limited partnership, general partnership, limited liability company or unlimited liability corporation, as the case may be, and is in good standing under the laws of each jurisdiction which requires such qualification, other than any jurisdiction where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse E ffect;

(i)

Kinder Morgan G.P. Inc., a Delaware corporation (the “General Partner”), is the sole general partner of Kinder Morgan Energy Partners, L.P., a Delaware limited partnership (the “Partnership”); the General Partner owns the general partner interest in the Partnership; such general partner interest is duly authorized by the Agreement of Limited Partnership of the Partnership, as amended and restated (“the Partnership Agreement”), and was validly issued to or acquired by the General Partner; the General Partner owns such general partner interest free and clear of all liens, encumbrances, security interests, equities or charges (except for such liens, encumbrances, security interests, equities or charges as are not, individually or in the aggregate, material to such ownership or as described in the Offering Memorandum); KMI owns, directly or indirectly, approximately 14.3 million common units of the Partnership, approximately 5.3 million Class B units of the Partnership, approximately 10.6 million listed shares of Kinder Morgan Management, LLC, a Delaware limited liability company (the “Delegate”), and all of the voting shares of the Delegate, all of which are duly authorized by the Partnership Agreement or the Second Amended and Restated Limited Liability Company Agreement of the Delegate, as applicable, and were validly issued to or acquired by KMI or its direct or indirect subsidiaries; and KMI or such subsidiaries owns such common units, Class B units and shares free and clear of any lien, encumbrance, security interest, equity or charge (except for such liens, encumbrances, security interests, equities or charges as are not,

individually or in the aggregate, material to such ownership or as described in the Offering Memorandum);

(j)

Finance Company has all necessary corporate power and authority to authorize, issue and sell the Notes as contemplated by this Agreement; KMI has all necessary corporate power and authority to authorize and issue the Guarantees; this Agreement has been duly authorized, executed and delivered by Finance Company and KMI;

(k)

Finance Company and KMI have all necessary corporate power and authority to enter into the registration rights agreement, to be dated as of the date of the Closing Time (as defined in Section 2(b) hereof) (the “Registration Rights Agreement”), between Finance Company, KMI and the Purchasers and to consummate the transactions contemplated thereby; the Registration Rights Agreement has been duly authorized and, when executed and delivered by Finance Company, KMI and the Purchasers, will constitute a valid and legally binding agreement of Finance Company and KMI, enforceable against Finance Company and KMI in accordance with its terms, subject, as to enforcement, (i) to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights, (ii) to general equity principles and (iii) as the rights to indemnification or contribution the reunder may be limited by federal or state securities laws; the Registration Rights Agreement will conform to the description thereof in the Offering Memorandum;

(l)

The Notes have been duly and validly authorized and, when issued and delivered against payment therefor as provided in this Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of Finance Company entitled to the benefits provided by the indenture, to be dated as of December 9, 2005 (the “Indenture”) between Finance Company, KMI and Wachovia Bank, National Association, as trustee (the “Trustee”), under which they are to be issued, enforceable against Finance Company in accordance with their terms; the Guarantees have been duly and validly authorized and, when executed by KMI and when the Notes have been authenticated by the Trustee, and issued and delivered, in the manner provided in the Indenture and this Agreement, will have been duly executed, issued and delivered and will constitute a valid and legally binding obligation of KMI; Finance Company and KMI have all necessary corporate power and authority to enter into the Indenture; the Indenture has been duly authorized, and when executed and delivered by Finance Company, KMI and the Trustee, will constitute a valid and legally binding agreement, enforceable against Finance Company and KMI in accordance with its terms, subject, as to enforcement, in the case of the Notes, the Guarantees and the Indenture, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and in the case of the Guarantees and the Indenture, as the rights to indemnification thereunder may be limited by federal or state securities laws; and the Securities, the Guarantees and the Indenture will conform in all material respects to the descriptions thereof contained in the Offering Memorandum;

(m)

Since September 30, 2005, none of Finance Company, KMI or any of the Significant Subsidiaries has taken any action that is or was designed to or that has constituted or that might have reasonably been expected to cause or result in illegal or improper stabilization or manipulation of the price of any security of KMI to facilitate the sale or resale of the Securities;

(n)

The execution, delivery and performance of the Indenture, this Agreement and the Registration Rights Agreement, the issuance and sale of the Securities, the issuance of the Guarantees, and the compliance with the terms and provisions of the Indenture, the Securities, the Guarantees and the Registration Rights Agreement will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which KMI or any of the Significant Subsidiaries is a party or by which KMI or any of the Significant Subsidiaries is bound or to which any of the property of KMI or the property of any of the Significant Subsidiaries is subject, except where any such foregoing occurrence will not prevent the consummation of the transactions contemplated herein or would not have a Material Adverse Eff ect, nor will such action result in any violation of the provisions of the partnership agreement, certificate of incorporation, bylaws or other formation or governing document, as the case may be, of KMI or any of the Significant Subsidiaries, or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over KMI or any of the Significant Subsidiaries or any of the properties of any such entities, and no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body having jurisdiction over KMI or any of the Significant Subsidiaries or any of the properties of such entities is required for the issuance and sale of the Securities by Finance Company, the issuance of the Guarantees by KMI or the consummation by Finance Company and KMI of the transactions contemplated by the Registration Rights Agreement, except (i) for the filing of a registration statement by Finance Company and KMI with the Commission under the Securities Act of 1933, as amended (the “Act”), and the qualification of an indenture under the Trust Indenture Act of 1939, as amended, pursuant to Section 5(j) hereof and (ii) such consents, approvals, authorizations, registrations or qualifications as may be required under the state or provincial securities or Blue Sky laws and in connection with the purchase and resale of the Securities by the Purchasers and in connection with the Registration Rights Agreement;

(o)

Other than as set forth in the Offering Memorandum, there are no legal or governmental proceedings pending to which KMI or any of its subsidiaries is a party or of which any property of KMI or any of its subsidiaries is the subject which would be reasonably likely to, individually or in the aggregate, have a Material Adverse Effect; and, to KMI’s knowledge, no such proceedings are threatened or contemplated;

(p)

Except as disclosed in the Offering Memorandum, none of KMI or any of its subsidiaries has violated any federal or state law or regulation relating to the protection of human health or the environment except for any violations and remedial actions as would not be reasonably likely to, individually or in the aggregate, have a Material Adverse Effect;

(q)

Except as disclosed in the Offering Memorandum, since the date of the latest audited financial statements included in the Offering Memorandum there has been no change, nor any development or event involving a prospective change that would have a Material Adverse Effect;

(r)

Each of KMI and the Significant Subsidiaries owns or leases all properties as are necessary to the conduct of its operations as described in the Offering Memorandum, except where the failure to own or lease any of such properties would not, individually or in the aggregate, have a Material Adverse Effect;

(s)

When the Securities are issued and delivered pursuant to this Agreement, the Securities will not be of the same class (within the meaning of Rule 144A under the Act) as securities of KMI or Finance Company that are listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system;

(t)

Each of KMI and Finance Company is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Offering Memorandum, will be, exempt from regulation as (i) a “holding company” or a “subsidiary company” of a “holding company” thereof within the meaning of the Public Utility Holding Company Act of 1935, as amended, or (ii) an “investment company,” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”);

(u)

Neither Finance Company or KMI nor any person acting on behalf of Finance Company or KMI has offered or sold the Securities by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Act; provided, that for the sake of clarity, Finance Company and KMI make no representation as to actions by the Purchasers;

(v)

Within the preceding six months, neither Finance Company or KMI nor any other person acting on behalf of Finance Company or KMI has offered or sold to any person any Securities or any securities of the same or a similar class as the Securities, other than Securities offered or sold to the Purchasers hereunder; Finance Company and KMI will take reasonable precautions designed to insure that any offer or sale, direct or indirect, in the United States or to any U.S. person (as defined in Rule 902 under the Act) of any Securities or any substantially similar security issued by Finance Company or KMI, within six months subsequent to the date on which the distribution of the Securities has been completed (as notified to Finance Company and KMI by the Purchasers), is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Securities in the United States and to U.S. persons contemplated by this Agreement as transactions exempt from the registration provisions of the Act; provided, that for the sake of clarity, Finance Company and KMI make no representation as to actions by the Purchasers;

(w)

With respect to those offered Securities sold in reliance on Regulation S, (A) none of Finance Company, KMI, its affiliates or any person acting on its or their behalf (other than the Purchasers, as to whom Finance Company and KMI make no representation) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (B) each of Finance Company, KMI, its affiliates and any person acting on its behalf (other than the Purchasers, as to whom Finance Company and KMI make no representation) has complied and will comply with the offering restrictions requirement of Regulation S;

(x)

None of KMI or any of the Significant Subsidiaries is involved in any labor dispute and, to the knowledge of KMI, no such dispute has been threatened, except for such disputes as would not, individually or in the aggregate, have a Material Adverse Effect;

(y)

KMI has an authorized debt capitalization as summarized in the Offering Memorandum;

(z)

The statements set forth in the Offering Memorandum under the caption “Description of Notes,” insofar as they purport to constitute a summary of the terms of the Securities are accurate, complete and fair in all material respects; the statements set forth in the Offering Memorandum under the caption “Income Tax Considerations” fairly and accurately summarize the matters discussed therein in all material respects;

(aa)

To KMI’s knowledge, after due inquiry, each of PricewaterhouseCoopers LLP and KPMG LLP, who has certified certain financial statements of KMI and its subsidiaries, is an independent registered public accounting firm as required by the Act and the rules and regulations of the Commission thereunder;

(bb)

KMI maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by KMI’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; KMI believes that its internal control over financial reporting is effective;

(cc)

Since the date of KMI’s latest unaudited financial statements incorporated by reference in the Offering Memorandum, there has been no change in KMI’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, KMI’s internal control over financial reporting;

(dd)

KMI maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to KMI and its consolidated subsidiaries is made known to the principal executive officer and principal financial officer of KMI by others within those entities; KMI believes that such disclosure controls and procedures are effective in all material respects to provide reasonable assurance that information required to be disclosed in the reports KMI files under the Exchange Act is recorded, processed, summarized and reported as and when required;

(ee)

KMI and Finance Company represent and agree that, unless they obtain the prior consent of the Purchasers, and the Purchasers represent and agree that, unless they obtain the prior consent of KMI and Finance Company, neither has made and will not make any offer relating to the Securities that, if the placement of the Securities contemplated by this Agreement were conducted as a public offering pursuant to a registration statement filed with the Commission, would constitute an “issuer free writing prospectus,” as defined in Rule 433, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission.

2.

(a)

On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, Finance Company agrees to sell to each Purchaser, severally and not jointly, and each Purchaser, severally and not jointly, agrees to purchase from Finance Company at the purchase price set forth below, the aggregate principal amount of Securities set forth in Schedule I opposite the name of such Purchaser, plus any additional

principal amount of Securities which such Purchaser may become obligated to purchase pursuant to the provisions of Section 10 hereof. The purchase price for the Securities shall be as follows: with respect to the 2011 Notes, 99.552% of the aggregate principal amount thereof; with respect to the 2016 Notes, 99.453% of the aggregate principal amount thereof; and with respect to the 2036 Notes, 99.176% of the aggregate principal amount thereof; plus, in each case, accrued interest from December 9, 2005 to the Closing Time (as defined in Section 2(b) hereunder).

(b)

Subject to Section 10 hereof, payment for and delivery of the Securities will be made at the Closing Location (as defined below) at 10:00 A.M., New York City time, on December 9, 2005, or at such other time on the same or such other date, not later than the fifth business day thereafter, as the Purchasers, Finance Company and KMI may agree upon in writing (such time and date of payment and delivery being herein called “Closing Time”).

3.

Upon the release of the Securities, the Purchasers propose to offer the Securities for sale upon the terms and conditions set forth in this Agreement and the Offering Memorandum and the Purchasers, severally and not jointly, hereby represent and warrant to, and agree with Finance Company and KMI that:

(a)

They will (i) offer and sell the Securities only (A) to persons who they reasonably believe are “qualified institutional buyers” (QIBs) within the meaning of Rule 144A under the Act in transactions meeting the requirements of Rule 144A or (B) (x) in “offshore transactions” to non-“U.S. persons” in each case as defined in Regulation S, (y) in compliance with Regulation S, and (z) during the distribution compliance period as defined in Regulation S in accordance with Rule 903 under the Act, and (ii) not enter into any contractual arrangement with respect to the sale or distribution of the Securities, except (I) with their affiliates, (II) with any person who has agreed in writing to comply with the applicable requirements of Regulation S or (III) with the prior written consent of Finance Company and KMI;

(b)

They are each an “accredited investor” within the meaning of Rule 501 under the Act; and

(c)

They will not offer or sell the Securities by any form of general solicitation or general advertising, including, but not limited to, the methods described in Rule 502(c) under the Act.

4.

(a)

Payment shall be made to Finance Company by wire transfer of immediately available funds to a bank account designated by Finance Company against delivery of the Securities to the Purchasers in the manner set forth below.

(b)

The Securities to be purchased by the Purchasers hereunder will be represented by one or more definitive global certificates in book-entry form representing the Securities, which will be deposited by or on behalf of Finance Company with The Depository Trust Company (“DTC”) or its designated custodian. Finance Company will deliver the global certificates representing the Securities to the Purchasers, for the respective accounts of the Purchasers, against payment by or on behalf of the Purchasers of the purchase price therefor, by causing DTC to credit the Securities to the account of the Purchasers at DTC. Finance Company will cause the global certificates representing the Securities to be made available to the

Purchasers for checking at least twenty-four hours prior to the Closing Time at the office of DTC or its designated custodian (the “Designated Office”).

(c)

The documents to be delivered by or on behalf of the parties hereto pursuant to Section 7 hereof, including the cross-receipt for the Securities and any additional documents requested by the Purchasers pursuant to Section 7(g) hereof, will be delivered at the offices of Bracewell & Giuliani LLP at 711 Louisiana Street, Suite 2300, Houston, Texas 77002-2781 (the “Closing Location”), and the Securities will be delivered at the Designated Office, all at the Closing Time. A meeting will be held at the Closing Location at 4:00 p.m., New York City time, on the New York Business Day next preceding the Closing Time, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close.

5.

Finance Company and KMI agree, jointly and severally, with each Purchaser as follows:

(a)

To prepare the Offering Memorandum in a form approved by the Purchasers; to make no amendment or any supplement to the Preliminary Offering Memorandum or the Offering Memorandum that shall be disapproved by the Purchasers promptly after reasonable notice thereof; and to furnish the Purchasers with copies thereof;

(b)

Promptly from time to time to take such action as the Purchasers may reasonably request to qualify the Securities for offering and sale under the securities laws of such jurisdictions as the Purchasers may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Securities, provided that in connection therewith Finance Company and KMI shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction;

(c)

Promptly, on the New York Business Day following the date of this Agreement, to furnish the Purchasers with electronic copies of the Offering Memorandum and each amendment or supplement thereto; and if, at any time prior to the earlier of the date on which the Purchasers have completed the placement of the Securities as evidenced by a notice in writing from the Purchasers to KMI and Finance Company or the date that is 6 months after the date of the Offering Memorandum, any event shall have occurred as a result of which the Offering Memorandum as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Offering Memorandum is delivered, not misleading, to notify the Purchasers and upon the Purchasers’ request to pre pare and furnish without charge to the Purchasers and to any dealer in securities as many copies as the Purchasers may from time to time reasonably request of an amended Offering Memorandum or a supplement to the Offering Memorandum that will correct such statement or omission; (for the purposes of this Section 5, “New York Business Day” shall mean each Monday, Tuesday,

Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close);

(d)

During the period beginning on the date of this Agreement and continuing to and including January 20, 2006, not to, directly or indirectly, sell, offer to sell, contract to sell, hedge, pledge, grant an option to purchase, issue any instrument convertible or exchangeable for or representing the right to receive, otherwise dispose of any securities of Finance Company or KMI substantially similar to the Securities (other than commercial paper issued in the ordinary course of business), or enter into any derivative transaction with similar effect as a sale of the Securities without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc.; provided, however, that the foregoing restriction shall not apply to the sale of Securities to the Purchasers pursuant to this Agreement or the transactions contemplated by the Registration Rights A greement;

(e)

Not to be or become, at any time prior to the expiration of three years after the Closing Time, an open-end investment company, unit investment trust, closed-end investment company or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act;

(f)

At any time when KMI is not subject to Section 13 or 15(d) of the Exchange Act, for the benefit of holders from time to time of Securities, to furnish at Finance Company’s and its expense, upon request, to holders of Securities and prospective purchasers of Securities information (the “Additional Information”) satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the Act;

(g)

To make available to the holders of the Securities as soon as reasonably practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, stockholders’ equity and cash flows of KMI and its consolidated subsidiaries certified by independent public accountants) and, as soon as reasonably practicable after the end of each of the first three quarters of each fiscal year (beginning with the first such fiscal quarter ending after the date of the Offering Memorandum), to make available to the holders of the Securities consolidated summary financial information of KMI and its subsidiaries for such quarter in reasonable detail;

(h)

During the period of five years from the date hereof, to supply to the Purchasers copies of such financial statements and other periodic and special reports as KMI may from time to time distribute generally to its lenders or to the holders of any class of its securities registered under Section 12 of the Exchange Act and to furnish to the Purchasers a copy of each annual or other report it shall be required to file with the Commission.

(i)

During the period of two years after the Closing Time, KMI and Finance Company will not, and will not permit any of its “affiliates” (as defined in Rule 144 under the Act) to, resell any of the Securities that constitute “restricted securities” under Rule 144 that have been reacquired by any of them; and

(j)

KMI and Finance Company shall enter into the Registration Rights Agreement as described in the Offering Memorandum pursuant to which they will file a

registration statement on Form S-4 providing for the registration of another series of debt securities of Finance Company guaranteed by KMI, with terms identical to the Securities (the “Exchange Securities”), offer to exchange the Securities for the Exchange Securities all in a manner that will permit persons who acquire the Exchange Securities to resell the Exchange Securities pursuant to Section 4(1) of the Act.

6.

Finance Company and KMI covenant and agree, jointly and severally, with each Purchaser that Finance Company or KMI will pay or cause to be paid the following: (i) the fees, disbursements and expenses of Finance Company’s and KMI’s counsel and accountants in connection with the issuance of the Securities and all of Finance Company’s and KMI’s other expenses in connection with the preparation and printing of the Preliminary Offering Memorandum and the Offering Memorandum and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Purchasers and dealers; (ii) the cost of any printing of this Agreement, the Registration Rights Agreement, the Indenture, the Blue Sky and legal investment memoranda; (iii) all reasonable expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provid ed in Section 5(b) hereof, but not including the fees and disbursements of counsel for the Purchasers in connection with such qualification and in connection with the Blue Sky and legal investment memoranda; (iv) any fees charged by securities rating services for rating the Securities; (v) the cost of preparing, issuing and delivering the Securities; (vi) the fees and expenses of the Trustee and any agent of the Trustee and the reasonable fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; and (vii) all other costs and expenses incident to the performance of its obligations hereunder that are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 8 and 12 hereof, the Purchasers will pay all of their own costs and expenses, including the fees of their counsel and transfer taxes on resale of any of the Securities by them.

7.

The obligations of the Purchasers hereunder shall be subject, in their discretion, to the condition that all representations and warranties and other statements of KMI herein are, at and as of the Closing Time, true and correct, the condition that KMI shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

(a)

Vinson & Elkins L.L.P., counsel for the Purchasers, shall have furnished to the Purchasers such written opinion or opinions, in form satisfactory to the Purchasers, dated the Closing Time, with respect to certain of the matters covered in paragraphs (1), (5), (7), (8), (9), (10) and (14) of the opinion attached hereto as Annex I and a letter, in form satisfactory to the Purchasers, substantially similar to the letter required to be delivered by Bracewell & Giuliani LLP pursuant to subsection (b) below as well as such other related matters as the Purchasers may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;

(b)

Each of Bracewell & Giuliani LLP and Blake, Cassels & Graydon LLP, counsel for Finance Company and KMI, shall have furnished to the Purchasers its written opinion, dated the Closing Time, in form and substance satisfactory to the Purchasers, to the effect set forth in Annex I and Annex II hereto respectively;

(c)

At the time of the execution of this Agreement by Finance Company and KMI (or such later date as shall be acceptable to the Purchasers), and also at the Closing Time, each of PricewaterhouseCoopers LLP and KPMG LLP shall have furnished to the Purchasers a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to the Purchasers;

(d)

(i) KMI and its subsidiaries shall not have sustained since the date of the latest audited financial statements included or incorporated by reference in each of the Preliminary Offering Memorandum and the Offering Memorandum any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree that could reasonably be expected to have a Material Adverse Effect, and (ii) since the respective dates as of which information is given in each of the Preliminary Offering Memorandum and the Offering Memorandum, there shall not have been any change, or any development involving a prospective change, in the capital stock, partnership interests or long term debt of KMI or any of its subsidiaries that would constitute a material adverse change to KMI and its subsidiaries taken as a whole, or any material adverse change in the general affairs, management, financial position, or results of operations of KMI and its subsidiaries taken as a whole, whether or not arising in the ordinary course of business, in the case of either clause (i) or this clause (ii) other than as set forth in or contemplated by each of the Preliminary Offering Memorandum and the Offering Memorandum, if in the judgment of a majority in interest of the Purchasers any such change makes it impracticable or inadvisable to consummate the sale and delivery of the Securities as contemplated in each of the Preliminary Offering Memorandum and the Offering Memorandum;

(e)

Subsequent to the date hereof (i) no downgrading shall have occurred in the rating accorded to KMI’s debt securities or preferred stock by any “nationally recognized statistical rating organization,” as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced, beyond what it had announced prior to the date hereof, that it has under surveillance or review, with possible negative implications, its rating of any of KMI’s debt securities or preferred stock;

(f)

Subsequent to the execution of this Agreement, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) a suspension in trading in KMI’s securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities declared by either Federal or New York or Texas State or Canadian authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States or Canada; (iv) the outbreak or escalation of hostilities involving the United States or Canada or the declaration by the United States or Canada of a national emergency or war; or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event speci fied in clause (iv) or (v) in the judgment of a majority in interest of the Purchasers makes it impracticable or inadvisable to proceed with the offering or the sale of and payment for the Securities on the terms and in the manner contemplated in this Agreement and each of the Preliminary Offering Memorandum and the Offering Memorandum; and

(g)

The Purchasers shall have received at the Closing Time a certificate, dated as of Closing Time, of the Chief Executive Officer, the President, Chief Financial Officer or any Vice President of each of Finance Company and KMI, as the case may be, which shall certify that (i) the representations and warranties of Finance Company and KMI, as the case may be, contained herein are true and correct on and as of the Closing Time, (ii) Finance Company and KMI, as the case may be, have performed all covenants and agreements herein contained to be performed on their parts at or prior to the Closing Time; and the certificate with respect to KMI shall also certify that (iii) KMI and its subsidiaries have not sustained, since the date of the latest audited financial statements included or incorporated by reference in each of the Preliminary Offering Memorandum and the Offering Memorandum, any loss or interferen ce with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree that would reasonably be expected to have a Material Adverse Effect, other than as set forth or contemplated by each of the Preliminary Offering Memorandum and the Offering Memorandum, and (iv) since the respective dates as of which information is given in each of the Preliminary Offering Memorandum and the Offering Memorandum, there has not been any change, or any development involving a prospective change, in the partnership interests, capital stock or long-term debt of KMI or any of its subsidiaries that would constitute a material adverse change to KMI and its subsidiaries taken as a whole, or any material adverse change in the general affairs, management, financial position or results of operations of KMI and its subsidiaries, taken as a whole, whether or not arising in the ordinary course of business, other than as set forth or contemplated by each of the Preliminary Offering Memorandum and the Offering Memorandum.

8.

(a)

Finance Company and KMI will, jointly and severally, indemnify and hold harmless each Purchaser and each person, if any, who controls any Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, as follows:

(i)   against any and all loss, liability, claim, damage and expense whatsoever, to which such Purchaser may become subject, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum or Offering Memorandum (or any amendment or supplement thereto) or the omission or alleged omission therefrom (except for, in the case of the Preliminary Offering Memorandum, offering price, Purchasers’ discount, principal amount, interest rate, redemption price, delivery date, allocation between Purchasers and other information that is customarily omitted from preliminary offering memoranda, and information based upon or derived from any of the foregoing, which information is contained in the Offering Memorandum) of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(ii)   against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 8(d) below) any such settlement is effected with the written consent of KMI and Finance Company; and

(iii)   against any and all expense whatsoever, as incurred (including, subject to Section 8(c) hereof, the fees and disbursements of counsel chosen by the Purchasers), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; provided, however, that the indemnity set forth in this Section 8(a) shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to KMI or Finance Company by or on behalf of any Purchaser expressly for use in the Preliminary Offering Memorandum or Offering Memorandum (or any amendment or supplement thereto).

(b)

Each Purchaser, severally in proportion to its respective purchase obligation and not jointly, agrees to indemnify and hold harmless KMI and Finance Company and each person, if any, who controls KMI or Finance Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Preliminary Offering Memorandum or Offering Memorandum (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to KMI or Finance Company by or on behalf of such Purchaser expressly for use in the Preliminary Offering Memorandum or Offering Memorandum (or any amendment or supplement ther eto).

(c)

Each indemnified party shall give written notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 8(a) above, counsel to the indemnified parties shall be selected by the Purchasers, and, in the case of parties indemnified pursuant to Section 8(b) above, counsel to the indemnified parties shall be selected by KMI and Finance Company, provided that if it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume the defense of such action with counsel chosen by it and approved by the indemnified parties defendant in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them which are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action, provided, however, that the indemnifying party shall pay the fees and expenses of separate counsel for the indemnified party if (i) the indemnifying party has agreed to pay such fees and expenses or (ii) counsel for the indemnifying party reasonably determines that representation of both the indemnifying party and the indemnified party by the same counsel would cre ate a conflict of interest. An indemnifying party may participate at its own expense in the defense of any such action; provided, however,

that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 8 or Section 9 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d)

If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 8(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. Notwithstanding the immediately preceding sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party f or fees and expenses of counsel, an indemnifying party shall not be liable for any settlement of the nature contemplated by Section 8(a)(ii) effected without its consent if such indemnifying party (i) reimburses such indemnified party in accordance with such request to the extent it considers such request to be reasonable and (ii) provides written notice to the indemnified party substantiating the unpaid balance as unreasonable, in each case prior to the date of such settlement.

9.

If the indemnification provided for in Section 8 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by Finance Company and KMI, on the one hand and the Purchasers on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) 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 Finance Company and KMI, on the one hand and of t he Purchasers on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by Finance Company and KMI, on the one hand and the Purchasers on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the

Securities pursuant to this Agreement (before deducting expenses but after deducting the total underwriting commission received by the Purchasers) received by Finance Company, and the total underwriting commission received by the Purchasers, bear to the aggregate price to investors of the Securities as set forth on the cover of the Offering Memorandum. The relative fault of Finance Company and KMI, on the one hand and the Purchasers on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by Finance Company or KMI or by the Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Finance Company, KMI and the Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 9. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 9 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 9, no Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities purcha sed by it and resold to investors were offered to investors exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9, each person, if any, who controls a Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Purchaser; and each person, if any, who controls KMI or Finance Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as KMI and Finance Company. The various Purchasers’ respective obligations to contribute pursuant to this Section 9 are se veral in proportion to their respective purchase obligations and not joint.

The obligations of Finance Company and KMI under this Section 9 shall be in addition to any liability which Finance Company and KMI may otherwise have.

10.

If one or more of the Purchasers shall fail (other than for a reason sufficient to justify the termination of this Agreement) to purchase at the Closing Time the principal amount of Securities agreed to be purchased by such Purchaser or Purchasers, the remaining Purchaser or Purchasers may find one or more substitute purchasers to purchase such Securities or make such other arrangements as they may deem advisable or one or more of the remaining Purchasers may agree to purchase such Securities in such proportions as may be approved by the remaining Purchaser or Purchasers, in each case upon the terms herein set forth. If no such arrangements have been made within 24 hours after the Closing Time, and

(a)

the aggregate principal amount of Securities to be purchased by the defaulting Purchaser or Purchasers shall not exceed 10% of the total principal amount of the

Securities, each of the non-defaulting Purchasers shall be obligated to purchase such Securities on the terms herein set forth in proportion to their respective obligations hereunder, or

(b)

the aggregate principal amount of Securities to be purchased by the defaulting Purchaser or Purchasers shall exceed 10% of the total principal amount of the Securities, Finance Company and KMI shall be entitled to an additional period of 24 hours within which to find one or more substitute purchasers satisfactory to the remaining Purchaser or Purchasers to purchase such Securities, upon the terms set forth herein.

In any such case, the Purchasers, Finance Company or KMI shall have the right to postpone the Closing Time for a period of not more than seven business days in order that necessary changes and arrangements may be effected. If the aggregate principal amount of the Securities to be purchased by such defaulting Purchasers shall exceed 10% of the total principal amount of the Securities, and neither the non-defaulting Purchasers, Finance Company nor KMI shall make arrangements pursuant to this Section 10 within the period stated for the purchase of the Securities which the defaulting Purchaser or Purchasers agreed to purchase, this Agreement shall terminate without liability on the part of any non-defaulting Purchaser and without liability on the part of Finance Company or KMI, except, in each case, as provided in Section 6, 8, 9 and 12 hereof. The provisions of this Section 10 shall not in any way aff ect the liability of any defaulting Purchaser to Finance Company or KMI or the non-defaulting Purchasers arising out of such default. A substitute purchaser hereunder shall become a Purchaser for all purposes of this Agreement.

11.

The reimbursement, indemnification and contribution agreements contained in Sections 6, 8 and 9 hereof and the representations, warranties, covenants and agreements of Finance Company, KMI and Purchasers in this Agreement shall remain in full force and effect regardless of (a) any termination of this Agreement, (b) any investigation (or any statement as to the results thereof) made by or on behalf of any Purchaser or any officer, director or controlling person of any Purchaser, or by or on behalf of KMI or Finance Company or any controlling person of KMI or Finance Company, and (c) delivery of and payment for the Securities under this Agreement.

12.

This Agreement may be terminated by a majority in interest of the Purchasers by notifying Finance Company and KMI at any time at or prior to the Closing Time, if any of the conditions specified in Section 7 hereof shall not have been fulfilled when and as required by this Agreement.

If this Agreement is terminated pursuant to any of the provisions hereof, except as otherwise provided herein, KMI and Finance Company shall not be under any liability to any Purchaser and no Purchaser shall be under any liability to KMI or Finance Company, except that (a) if this Agreement is terminated by the Purchasers because of any failure or refusal on the part of KMI or Finance Company to comply with the terms of this Agreement or because any of the conditions contained in Section 7 of this Agreement, other than Section 7(e) or Sections 7(f)(i), (iii), (iv) or (v), have not been met, KMI and Finance Company will reimburse the Purchasers for all reasonable out-of-pocket expenses (including the reasonable fees and disbursement of their counsel) reasonably incurred by them and (b) no Purchaser who shall have failed or refused to purchase the Securities agreed to be purchased by it hereun der, without some reason sufficient

hereunder to justify its cancellation or termination of its obligations hereunder, shall be relieved of liability to KMI, Finance Company or the other Purchasers for damages occasioned by its default.

13.

Each of Finance Company and KMI acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between Finance Company and KMI, on the one hand, and the Purchasers, on the other, (ii) in connection therewith and with the process leading to such transaction the Purchasers are acting solely as principals and not the agent or fiduciary of Finance Company or KMI, (iii) the Purchasers have not assumed an advisory or fiduciary responsibility in favor of Finance Company or KMI with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether the Purchasers have advised or are currently advising Finance Company or KMI on other matters) or any other obligation to Finance Company or KMI except the obligations expressly set forth in this Agreement, (iv) the Purch asers and their affiliates may have interests that differ from those of Finance Company and KMI and (v) Finance Company and KMI have consulted their own legal advisors to the extent they deemed appropriate. Finance Company and KMI agree that they will not claim that the Purchasers have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to Finance Company or KMI, in connection with such transaction or the process leading thereto.

This Agreement supersedes all prior agreements and understandings (whether written or oral) between Finance Company and KMI and the Purchasers with respect to the subject matter hereof.

Finance Company and KMI and the Purchasers hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

14.

In dealings hereunder, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc. shall act on behalf of each of the Purchasers, and the parties hereto shall be entitled to act and rely upon any written statement, request, notice or agreement on behalf of any Purchaser made or given by Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc.

All statements, requests, notices and agreements hereunder shall be in writing, and if to the Purchasers shall be delivered or sent by mail, telex or facsimile transmission to the Purchasers in care of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Attention: Robert Pacha, Managing Director, 4 World Financial Center, New York, NY 10080; and if to KMI or Finance Company shall be delivered or sent by mail to the address of KMI or Finance Company set forth in the Offering Memorandum, Attention: General Counsel. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

15.

This Agreement has been and is made solely for the benefit of the Purchasers, KMI, Finance Company and their respective permitted successors and assigns, and, to the extent expressed herein, for the benefit of persons controlling any of the Purchasers, Finance Company or KMI, and their respective successors and assigns, and no other person, partnership, association or corporation shall acquire or have any right under or by virtue of this Agreement.

The term “successors and assigns” shall not include any purchaser of Securities merely because of such purchase.

16.

Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

17.

This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

18.

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile copies of signatures shall constitute original signatures for all purposes of this Agreement and any enforcement hereof.

If the foregoing is in accordance with your understanding, please sign and return to us, one for Finance Company, one for KMI and one for the Purchasers plus one for each counsel, counterparts hereof, and, upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement between Finance Company, KMI and the Purchasers.

Very truly yours,

KINDER MORGAN FINANCE COMPANY, ULC

By:

/s/ Joseph Listengart

Name: Joseph Listengart

Title: Vice President

KINDER MORGAN, INC.

By:

/s/ Joseph Listengart

Name: Joseph Listengart

Title: Vice President

Accepted as of the date hereof:

MERRILL LYNCH, PIERCE, FENNER & SMITH

                               INCORPORATED

CITIGROUP, GLOBAL MARKETS INC.

By:

Merrill Lynch, Pierce, Fenner & Smith

                                 Incorporated

By:

/s/ Robert A. Pacha

Name: Robert A. Pacha

Title: Managing Director

By:

Citigroup Global Markets Inc.

By:

  /s/ Gerard L. Eastman, Jr.

Name: Gerard L. Eastman, Jr.

Title: Managing Director

For themselves and as Representatives of the other Purchasers named in Schedule I hereto.

SCHEDULE I

Purchaser

Principal Amount
of 2011 Notes

to be Purchased

Principal Amount
of 2016 Notes

to be Purchased

Principal Amount
of 2036 Notes

to be Purchased

Merrill Lynch, Pierce, Fenner & Smith

                     Incorporated

$225,000,000

$255,000,000

$165,000,000

Citigroup Global Markets Inc.

225,000,000

255,000,000

165,000,000

Barclays Capital Inc.

28,125,000

31,875,000

55,000,000

Greenwich Capital Markets, Inc.

75,000,000

31,875,000

20,625,000

J.P. Morgan Securities Inc.

28,125,000

85,000,000

20,625,000

Banc of America Securities LLC

28,125,000

31,875,000

20,625,000

Calyon Securities (USA) Inc.

28,125,000

31,875,000

20,625,000

Harris Nesbitt Corp.

28,125,000

31,875,000

20,625,000

Mitsubishi UFJ Securities International plc

28,125,000

31,875,000

20,625,000

SunTrust Capital Markets, Inc.

28,125,000

31,875,000

20,625,000

Wachovia Capital Markets, LLC

28,125,000

31,875,000

20,625,000

Total

$750,000,000

$850,000,000

$550,000,000

SCHEDULE II

SIGNIFICANT TERASEN SUBSIDIARIES

Terasen Inc.

Terasen Gas Inc.

Terasen Gas (Vancouver Island) Inc.

Terasen Pipelines (Trans Mountain) Inc.

Terasen Pipelines (Corridor) Inc.

II-1

SCHEDULE III

CONSOLIDATED SUBSIDIARIES OF KINDER MORGAN, INC.

THAT ARE NOT WHOLLY-OWNED

Name of Consolidated Subsidiary

Percent not Owned

Kinder Morgan Management

81.7

%

Canyon Creek Compression

30.0

%

KN Thermo LLC

1.0

%

Thermo Greeley LLC

1.0

%

KMC Thermo LLC

1.0

%

Cogeneration Holding LLC

1.0

%

Consolidated, no common ownership, but preferred:

Triton Power LLC

Triton Power Michigan LLC

II-2

ANNEX I

FORM OF BRACEWELL & GIULIANI, L.L.P. OPINION

TO BE DELIVERED PURSUANT TO SECTION 7(B)

1.

Each of KMI, the Partnership, the Delegate, and the General Partner is validly existing and in good standing as a corporation, limited partnership or limited liability company, as applicable, under the laws of its jurisdiction of incorporation or formation, as applicable, and each such entity has full corporate, partnership or limited liability company power and authority, as the case may be, to own its properties and to conduct its business as such business is described in the Offering Memorandum;

2.

No consent, approval, authorization, order, or filing with, any federal or Texas court or governmental agency or body is required under federal or Texas law, or the Kansas General Corporation Code, for the consummation by Finance Company and KMI of the transactions contemplated by the Agreement in connection with the issue and sale of the Notes by Finance Company, the issuance of the Guarantees by KMI and the Indenture, or contemplated by the Registration Rights Agreement except (a) with respect to the Registration Rights Agreement and the transactions contemplated thereunder, as may be required under or pursuant to the Act, the Exchange Act, the Trust Indenture Act, and any rules and regulations promulgated thereunder, (b) as may be required under state securities or Blue Sky laws in connection with the purchase and resale of the Securities by the Purchasers and with respe ct to the Registration Rights Agreement and the transactions contemplated thereunder, and (c) such as the failure to obtain or make would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect;

3.

To such counsel’s knowledge after due inquiry, and other than as set forth in the Offering Memorandum, there is no legal or governmental proceeding pending or threatened against KMI or any Significant Subsidiary (excluding Terasen Inc. and its subsidiaries, Finance Company and Acquisition Co.) or the Partnership which would individually or in the aggregate reasonably be expected to have a Material Adverse Effect;

4.

The Agreement has been duly authorized, executed and delivered by KMI;

5.

The Registration Rights Agreement has been duly authorized, executed and delivered by KMI and, assuming the due authorization, execution and delivery thereof by the Purchasers and Finance Company, constitutes a valid and legally binding agreement, enforceable against KMI in accordance with its terms;

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6.

The execution and delivery by KMI and Finance Company of the Agreement and the Registration Rights Agreement and the consummation of the transactions therein contemplated and the execution and delivery by KMI and Finance Company of the Indenture will not violate (a) any of the terms or provisions of any indenture, mortgage, deed of trust or loan agreement or other agreement or instrument filed or incorporated by reference as an exhibit to KMI’s Annual Report on Form 10-K most recently filed with the Commission or to any Form 10-Q or Form 8-K of KMI filed since the filing of such Annual Report on Form 10-K, (b) any provision of the certificate of incorporation or bylaws of KMI, (c) an existing obligation of KMI under any existing court or administrative order, judgment or decree of which such counsel has knowledge after due inquiry, or (d) any applicable provisions of t he federal laws of the United States (based on the limitations set forth below), the laws of the state of Texas, or the Kansas General Corporation Code;

7.

Assuming the Notes have been duly authorized by Finance Company, the Notes, when executed by Finance Company and authenticated by the Trustee, and issued and delivered in the manner provided in the Indenture against payment of the consideration therefor pursuant to the Agreement, will constitute valid and legally binding obligations of Finance Company entitled to the benefits of the Indenture and enforceable against Finance Company in accordance with their respective terms;

8.

The Guarantees have been duly authorized by KMI; the Guarantees, when executed by KMI, and when the Notes have been duly authorized, executed and delivered by Finance Company and authenticated by the Trustee, and issued and delivered in the manner provided in the Indenture against payment of the consideration therefor pursuant to the Agreement, will constitute valid and legally binding obligations of KMI enforceable against KMI in accordance with their respective terms;

9.

The Indenture, the Securities and the Guarantees conform as to legal matters in all material respects to the descriptions thereof under the caption “Description of Notes” and “Exchange Offers, Registration Rights” in the Offering Memorandum; and based on the accuracy of the representations made by KMI and Finance Company and subject to the qualifications set forth therein, the statements made in the Offering Memorandum under the caption “United States Federal Income Tax Considerations,” insofar as they purport to constitute summaries of United States federal income tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects;

10.

The Indenture has been duly authorized, executed and delivered by KMI and, assuming the due authorization, execution and delivery thereof by the

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Trustee and Finance Company, constitutes a valid and legally binding agreement of KMI, enforceable against KMI in accordance with its terms;

11.

KMI is not an “investment company” as such term is defined in the Investment Company Act of 1940, as amended;

12.

KMI is exempt from regulation as a “holding company” under the Public Utility Holding Company Act of 1935, as amended;

13.

The documents incorporated by reference in the Offering Memorandum (other than the financial statements and supporting schedules and other financial or accounting data included therein or omitted therefrom, as to which such counsel need express no opinion) when they were filed with the Commission, appeared on their face to comply as to form in all material respects with the requirements of the particular form under the Exchange Act and the rules and regulations thereunder; and

14.

Assuming the accuracy of the representations and warranties of Finance Company, KMI and the Purchasers in the Agreement and the due performance by Finance Company, KMI and the Purchasers therein, no registration of the Notes under the Securities Act, and no qualification of an indenture under the Trust Indenture Act with respect thereto, is required for (i) the offer and sale of the Notes by Finance Company to the Purchasers or the issuance of the Guarantees by KMI, and (ii) the initial resale of the Notes by the Purchasers in the manner contemplated by the Purchase Agreement.

In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the relevant federal law of the United States of America, Texas law, the Kansas General Corporation Code, the General Corporation Law of the State of Delaware, the Delaware LP Act, the Delaware LLC Act and, with respect to the opinion expressed in paragraph (10) and the last clauses of paragraph (7) and of paragraph (8), the relevant contract law of the state of New York, and that they render no opinion with respect to the state securities or blue sky laws of any jurisdiction or the law of any other jurisdiction. Such counsel may note that they are not admitted to the practice of law in the State of Delaware or the State of Kansas. With respect to paragraph (6), such counsel may also state that they render no opinion with respect to the anti-fraud provisions of th e federal securities laws.

Such counsel may state that whenever its opinion is based on factual matters that are “to its knowledge after due inquiry” or "of which such counsel has knowledge after due inquiry" such counsel has relied to the extent such counsel deemed appropriate on certificates of officers (after discussion of the contents thereof with such officers) of KMI or certificates of others as to the existence or nonexistence of the factual matters upon which such opinion is predicated. Such counsel shall state that it has no reason to believe, however, that any such certificate is untrue or inaccurate in any material respect.

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Such counsel may state that in addition to the limitations and qualifications set forth above, the enforceability of obligations of Finance Company and KMI under the Notes, the Guarantees, the Registration Rights Agreement or the Indenture, as the case may be, is subject to the effect of any applicable bankruptcy (including, without limitation, fraudulent conveyance and preference), insolvency, reorganization, rehabilitation, moratorium or similar laws and decisions relating to or affecting the enforcement of creditors’ rights generally, and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including, without limitation, concepts of good faith and fair dealing, and the possible unavailability of specific performance or injunctive relief. Such principles are of general application, and in applying such principles a cou rt, among other things, might decline to order Finance Company or KMI to perform covenants. Such counsel may express no opinion as to the enforceability of Section 8(b) of the Registration Rights Agreement. Further, such counsel need not express an opinion with respect to the enforceability of provisions in the Notes, the Guarantees, the Registration Rights Agreement or the Indenture with respect to waiver, delay, extension or omission of notice or enforcement of rights or remedies, waivers of defenses or waivers of benefits of stay, extension, moratorium, redemption, statutes of limitations or other benefits provided by operation of law. Further, such counsel may state that the enforceability of any exculpation, indemnification or contribution provisions contained in the Indenture or the Registration Rights Agreement may be limited by applicable law or public policy.

Such counsel may also state that because the primary purpose of such counsel’s engagement was not to establish or confirm factual matters or financial or accounting matters and because of the wholly or partially non-legal character of many of the statements contained in the Preliminary Offering Memorandum, the Offering Memorandum and any amendment or supplement thereto, such counsel is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Preliminary Offering Memorandum, the Offering Memorandum and any amendment or supplement thereto (except to the extent expressly set forth in paragraph (9) above) and they have not independently verified the accuracy, completeness or fairness of such statements (except as aforesaid); that, without limiting the foregoing, they assume no responsibility for, have not independently ve rified and have not been asked to comment on the accuracy, completeness or fairness of the financial statements and other financial or accounting data included in the Preliminary Offering Memorandum, the Offering Memorandum and any amendment or supplement thereto, and they have not examined the accounting, financial or other records from which such financial statements and other financial or accounting data contained therein were derived; and that they are not experts with respect to any portion of the Preliminary Offering Memorandum, the Offering Memorandum and any amendment thereto, including, without limitation, such financial statements and other financial or accounting data; such counsel did not participate in the preparation of the documents incorporated by reference in the Preliminary Offering Memorandum, the Offering Memorandum and any amendment or supplement thereto; however, they have participated in conferences with officers and other representatives of KMI and Finance Company, representatives of the independent accountants of KMI, and representatives of the Purchasers, including counsel for the Purchasers, at which the contents of the Preliminary Offering Memorandum, the Offering Memorandum and any amendment or supplement thereto and related matters were discussed; and, based upon such participation and review, and relying as to materiality in part upon the factual statements of officers and other representatives of KMI and Finance Company and representatives of the Purchasers, no facts have come to their

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attention that have caused them to believe that the Preliminary Offering Memorandum as of the Pricing Time (except in each case for the financial statements and related data and other financial or accounting data contained or incorporated by reference therein or omitted therefrom), or the Offering Memorandum or any amendment or supplement thereto as of the date of the Offering Memorandum, the date of such amendment or supplement or at the Closing Time (except in each case for the financial statements and related data and other financial or accounting data contained or incorporated by reference therein or omitted therefrom), included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, in connection with the Preliminary Offering Memo randum, they may state that they express no belief with respect to the offering price, Purchasers’ discount, principal amount, interest rate, redemption price, delivery date, allocation between Purchasers and other information that is customarily omitted from preliminary offering memoranda, and information based upon or derived from any of the foregoing.

Such counsel may state that its opinion is solely for the benefit of the Purchasers pursuant to Section 7(b) of the Agreement, and may not be used or relied upon by the Purchasers in any other capacity or for any other purpose and may not be used or relied upon by any other person or entity for any purpose without such counsel’s express prior written authorization. Such counsel may state that except for the use permitted therein, such opinion may not be quoted, circulated or published, in whole or in part, or otherwise referred to, filed with or furnished to any other person or entity, without such counsel’s prior written authorization; that the opinion expressed therein is not an opinion with respect to matters of fact or a guarantee and should not be construed or relied on as such; that the opinion expressed therein is as of the date thereof, and such counsel expressly disc laims any responsibility to update such opinion after the date thereof, and that such opinion is strictly limited to the matters stated therein, and no other or more extensive opinion is intended, implied or to be inferred beyond the matters expressly stated therein.

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ANNEX II

FORM OF BLAKE, CASSELS & GRAYDON OPINION

TO BE DELIVERED PURSUANT TO SECTION 7(B)

Capitalized terms used in this Annex II but not defined herein have the meanings given to such terms in the Purchase Agreement to which this Annex is attached.

1.

Finance Company has been duly incorporated and is validly subsisting under the laws of the Province of Alberta, and has all necessary corporate power and authority to own its properties and conduct its business as described in each of the Preliminary Offering Memorandum and Offering Memorandum and to execute and perform its obligations under each of the Purchase Agreement, the Indenture, the Notes and the Registration Rights Agreement.

2.

All of the issued shares of Finance Company: (a) have been duly and validly authorized and issued and are outstanding as fully paid and non-assessable, except that the holder thereof may be assessed without limit upon bankruptcy or winding up by virtue of the nature of an unlimited liability corporation, (b) are registered in the minute books of Finance Company in the name of 1197774 Alberta ULC, and (c) based upon our review of a search of the Alberta Personal Property Registry conducted on December 7, 2005, are held by 1197774 Alberta ULC free and clear of any lien, encumbrance or security interest registered against 1197774 Alberta ULC.

3.

1197774 Alberta ULC has been duly incorporated and is validly subsisting under the laws of the Province of Alberta.

4.

All the issued shares of 1197774 Alberta ULC: (a) have been duly and validly authorized and issued and are outstanding as fully paid and non-assessable, except that the holder thereof may be assessed without limit upon bankruptcy or winding-up by virtue of the nature of an unlimited liability corporation, and (b) are registered in the minute books of 1197774 Alberta ULC in the name of Kinder Morgan, Inc.

5.

Each of the Purchase Agreement, the Indenture, the Registration Rights Agreement and the Notes has been duly authorized, executed and delivered by Finance Company and the Exchange Securities have been duly authorized.

6.

No notarization of the Purchase Agreement, the Indenture, the Registration Rights Agreement, the Securities or any other document, and no authorization, consent, permit, licence or approval of, or other action by, or registration, or filing with or notice to, any governmental agency or authority, regulatory body (including any securities commission), court, tribunal or other similar entity having jurisdiction, is required under the laws of the Province of Alberta or the federal laws of Canada applicable therein (collectively, "Alberta Laws"):

(a)

solely by reason of the execution and delivery by Finance Company of the Purchase Agreement, the Registration Rights Agreement, the Indenture, the Notes or the Exchange Securities or the performance of its obligations thereunder;

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(b)

solely by reason of the exercise or enforcement by the Purchasers or the holders of Securities or Exchange Securities of any of their rights and remedies under the Purchase Agreement, the Registration Rights Agreement, the Indenture the Securities or the Exchange Securities, as applicable; or

(c)

in order to ensure the legality, validity, enforceability or admissibility in evidence in a court in the Province of Alberta of the Purchase Agreement, the Registration Rights Agreement, the Indenture, the Securities or the Exchange Securities,

provided that a corporation incorporated pursuant to the laws of a jurisdiction other than Alberta that is carrying on business in Alberta (as defined in the ABCA) will be required to register as an extraprovincial corporation prior to bringing an action in an Alberta Court.

7.

The (i) issue and sale of the Notes by Finance Company, (ii) issuance of the Guarantee by KMI, (iii) execution and delivery by Finance Company and KMI of the Purchase Agreement, the Indenture and the Registration Rights Agreement, and the consummation of the transactions therein contemplated and the performance by Finance Company and KMI of their respective obligations thereunder and under the Securities, and (iv) the exchange of the Securities for the Exchange Securities, do not and will not violate: (a) to our knowledge, any of the terms or provisions of any indenture, mortgage, deed of trust or loan agreement or other agreement or instrument to which Finance Company is a party or by which Finance Company is bound or to which any of the property or assets of Finance Company is subject; (b) any of the terms of the agreements listed in Schedule A to this opinion; (c) any provision of the constatin g documents of Finance Company; (d) any obligation of any of Terasen Inc., Terasen Gas Inc., Terasen Gas (Vancouver Island) Inc., Terasen Gas (Whistler) Inc., Terasen Pipelines (Trans Mountain) Inc., Terasen Pipelines (Corridor) Inc., Terasen Waterworks (Supply) Inc., Terasen Utility Services Inc., Inland Pacific Energy Services Inc. or Terasen International Inc. (collectively, the "Terasen Entities") or of Finance Company, 1197774 Alberta ULC or 0731297 B.C. Ltd. ("Acquisition Co.") under any existing court or administrative order, judgment or decree of which we have knowledge, or (d) any applicable provisions of Alberta Laws, provided that any exchange of the Securities for the Exchange Securities will require the Company to take additional steps in order to comply with the Securities Act (Alberta).

8.

Subject to the limitations, assumptions and qualifications set forth therein, the discussion set forth in each of the Preliminary Offering Memorandum and the Offering Memorandum under the caption "Canadian Material Federal Income Tax Considerations for Non-Residents of Canada" and in each of the Canadian Preliminary Private Placement Memorandum and the Canadian Private Placement Memorandum under the caption "Canadian Federal Income Tax Considerations" is a summary of the Canadian federal income tax matters described therein that is accurate in all material respects.

9.

To our knowledge, and other than as set forth in each of the Preliminary Offering Memorandum and the Offering Memorandum, there is no legal or governmental proceeding existing, pending or threatened against Finance Company, Acquisition Co.,

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1197774 Alberta ULC or any of the Terasen Entities which would individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

10.

Acquisition Co. has been duly incorporated and is validly subsisting under the laws of the Province of British Columbia. The authorized capital of Acquisition Co. consists of an unlimited number of common shares and an unlimited number of preferred shares, of which 138,738 common shares and no preferred shares are issued and outstanding as fully paid and non-assessable. All such common shares are registered in the minute books of Acquisition Co. in the name of Kinder Morgan, Inc.

11.

Terasen Inc. is validly subsisting under the laws of the Province of British Columbia. The authorized capital of Terasen Inc. consists of 100,000,000 First Preferred Shares, 100,000,000 Second Preferred Shares and 750,000,000 common shares, of which 115,658,601 common shares and no preferred shares are issued and outstanding as fully paid and non-assessable. 106,474,413 common shares are registered in the name of Acquisition Co. and the remaining common shares are registered in the name of Trans Mountain Holdings Ltd., and based solely upon our review of searches of the British Columbia Personal Property Registry on December 7, 2005, all the shares common shares of Terasen Inc. are held by Acquisition Co. and Trans Mountain Holdings Ltd. free and clear of any lien, encumbrance or security interest registered against Acquisition Co. or Trans Mountain Holdings Ltd. All of the share s of Trans Mountain Holdings Ltd. are registered in the minute books of Trans Mountain Holdings Ltd. in the name of Terasen Inc.

12.

No registration, filing or recording of the Indenture under Alberta Laws is necessary in order to preserve or protect the validity or enforceability of the Indenture or the Securities or Exchange Securities issued thereunder.

13.

The Indenture and the issuance, certification and delivery by Finance Company of the Securities and the Exchange Securities complies with the provisions of the Alberta Laws governing trust indentures and the issuance, certification and delivery of debt obligations.

14.

The offering, issue, sale and delivery of the Notes by Finance Company in accordance with the Purchase Agreement are exempt from the prospectus requirements of the securities laws of the provinces of Alberta and British Columbia (the "Securities Laws") and no prospectus is required nor are other documents required to be filed, proceedings taken or approvals, permits, consents or authorizations of regulatory authorities obtained under Securities Laws to permit the offering, issue, sale and delivery of the Notes by the Purchasers to subscribers in the provinces of Alberta or British Columbia; however, Finance Company will be required to file with the applicable securities regulatory authorities in Alberta or British Columbia with respect to certain purchasers of Notes in those provinces the report of exempt distribution on Form 45-106F1 contemplated in National Instrument 45-106 – Pro spectus and Registration Exemptions, together, in each case, with the payment of applicable fees where required by the Securities Laws in the applicable province.

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15.

All payments made by Finance Company under the Notes or the Exchange Securities or by KMI under the Guarantee of the Notes and the Exchange Securities or under the Indenture may be paid without deduction for or on account of any taxes, levies, deductions, charges or withholding imposed or assessed by Alberta Laws where paid to a holder who is a non-resident of Canada and who, at the time of payment, deals at arm's length, within the meaning of the Income Tax Act (Canada), with Finance Company or KMI, as the case may be.

16.

No goods and services tax imposed under the federal laws of Canada will be collectible by any Purchaser in respect of the payment or crediting of any commission or fee as contemplated by the Purchase Agreement to any Purchaser.

17.

No withholding tax will be payable under Alberta Laws in respect of the payment or crediting of any commission or fee to a Purchaser who, for purposes of the Income Tax Act (Canada), is a non-resident of Canada and deals at arm's length with Finance Company at the time of payment, provided that any such fee is payable in respect of services rendered by the Purchaser outside Canada that are performed by the Purchaser in the ordinary course of business carried on by it that includes the performance of such services for a fee.

18.

No stamp duty, registration or documentary taxes, duties or similar charges are payable under Alberta Laws in connection with the creation, issuance, sale or delivery to the Purchasers of the Notes and the Exchange Securities or the authorization, execution, delivery and performance or enforcement of the Purchase Agreement, the Registration Rights Agreement, the Indenture or the resale of Notes or the Exchange Securities by a Purchaser.

19.

If an action or proceeding were brought by a Purchaser or a holder of Securities or Exchange Securities in an Alberta court to enforce the Purchase Agreement, the Registration Rights Agreement, the Securities, the Exchange Securities or the Indenture, as applicable, against Finance Company and such court were to apply Alberta Laws to all matters in issue such action or proceeding (notwithstanding the express choice of New York Law in the Purchase Agreement, the Registration Rights Agreement and Indenture), the Purchase Agreement, the Registration Rights Agreement, the Securities, the Exchange Securities or the Indenture, as applicable, would constitute a legal, valid and binding obligation of Finance Company, enforceable against Finance Company by the Purchaser or a holder of Securities or Exchange Securities in accordance with its terms.

20.

A court of competent jurisdiction in the Province of Alberta (an "Alberta Court") would recognize the choice of the laws of the State of New York ("New York Law") as the governing law of the Purchase Agreement, the Indenture, the Registration Rights Agreement, the Securities and the Exchange Securities.

21.

In any proceeding brought before an Alberta Court for the enforcement of the Purchase Agreement, the Registration Rights Agreement, the Securities, the Exchange Securities or the Indenture, New York Law would be applied by such Alberta Court in accordance with the choice of New York Law as the governing law of the Purchase Agreement in

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Section ● thereof, of Registration Rights Agreement in Section ● thereof, the Indenture in Section ● thereof, and of the Notes in ● thereof, to all issues which under the conflict of laws rules of the Province of Alberta are to be determined in accordance with the proper law of a contract, provided that in any such proceeding such Alberta Court:

(a)

will not take judicial notice of the provisions of New York Law and will only apply such provisions to the extent that they are proven to its satisfaction by expert testimony;

(b)

will apply Alberta Laws that under Alberta Laws would be characterized as procedural and will not apply any New York Law that under Alberta Laws would be characterized as procedural;

(c)

will apply provisions of Alberta Laws that have overriding effect, as interpreted under Alberta Laws (however, assuming that the meaning that would be given to the terms used in the Purchase Agreement, the Registration Rights Agreement, the Indenture, the Securities and the Exchange Securities under New York Law would be the same as the meaning given to such terms under Alberta Laws, none of the provisions of the Purchase Agreement, the Indenture or the Notes violate any such provisions of Alberta Laws);

(d)

will not apply any New York Law that under Alberta Laws would be characterized as a revenue, expropriatory, penal or other public law;

(e)

will retain discretion to decline to hear such action if it is not the proper forum to hear such an action, or if concurrent proceedings are being brought elsewhere;

(f)

will not enforce the performance of any obligation provided for in the Purchase Agreement, the Indenture or the Securities if such performance is illegal under the laws of any jurisdiction in which such obligation is to be performed; and

(g)

will not apply New York Law to the extent that its application would be contrary to public policy, as such term is interpreted under Alberta Laws.

22.

Alberta Laws permit an action to be brought in an Alberta Court on a final and conclusive judgment in personam of a court in the state of New York (a "New York Court") that is subsisting and unsatisfied respecting the enforcement of the Purchase Agreement, the Registration Rights Agreement, the Securities, the Exchange Securities or the Indenture that is not impeachable as void or voidable under New York law and for a sum certain if:

(a)

the court rendering such judgment had jurisdiction over the judgment debtor as recognized by an Alberta Court;

(b)

such judgment was not obtained by fraud or in a manner contrary to natural justice and the enforcement thereof would not be inconsistent with public policy, as that term is interpreted under Alberta Laws, or contrary to any order made by the Attorney General of Canada under the Foreign Extraterritorial Measures Act (Canada) or the Competition Tribunal under the Competition Act (Canada) in

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respect of certain judgments, laws and directives having effects on competition in Canada;

(c)

the enforcement of such judgment does not constitute, directly or indirectly, the enforcement of foreign revenue, expropriatory or penal laws;

(d)

no new admissible evidence relevant to the action is discovered prior to the rendering of judgment by an Alberta Court; and

(e)

the action to enforce such judgment is commenced within two years of the date that the claimant knew or should have known it had a claim but in any event within ten years,

provided that (i) the enforceability of such judgment may be limited by applicable bankruptcy, insolvency, reorganization and other similar laws affecting creditors’ rights generally, and (ii) under the Currency Act (Canada), an Alberta Court may only give judgment in Canadian dollars.

23.

[Deleted]

24.

Assuming that the meaning that would be given to the terms used in the Purchase Agreement, the Indenture, the Registration Rights Agreement, the Securities or the Exchange Securities under New York Law would be the same as the meaning given to such terms under Alberta Laws, (i) none of the provisions of the Purchase Agreement, the Indenture, the Registration Rights Agreement, the Securities or the Exchange Securities violates public policy and (ii) public policy would not be contravened by reason only of enforcement by or on behalf of the Purchasers or the holders of the Securities or the Exchange Securities of any of the rights or remedies provided for in the Purchase Agreement, the Registration Rights Agreement, the Indenture, the Securities and the Exchange Securities, as applicable, in accordance with the terms thereof. No order would be made by the Attorney General of Canada under the < I>Foreign Extraterritorial Measures Act (Canada) or by the Competition Tribunal under the Competition Act (Canada) in respect of a New York judgment by reason only that such New York judgment gave effect to the rights and remedies provided for in the Purchase Agreement, the Registration Rights Agreement, the Indenture, the Securities and the Exchange Securities.

25.

Assuming that a Purchaser has all necessary capacity and authority under any relevant laws other than Alberta Laws, a Purchaser or a holder of Notes or Exchange Securities

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has the capacity to sue as plaintiff in an Alberta Court for the enforcement of its rights under the Purchase Agreement, the Indenture, the Registration Rights Agreement, the Notes or the Exchange Securities, as applicable, against Finance Company and such access to an Alberta Court is not subject to any conditions which are not applicable to residents of Canada or to a corporation incorporated or otherwise formed in Canada, except that a non-resident plaintiff may be required to post security for costs in the discretion of an Alberta Court and a corporation incorporated pursuant to the laws of a jurisdiction other than Alberta that is carrying on business in Alberta (as defined in ABCA) will be required to register as an extraprovincial corporation prior to bringing an action in an Alberta Court.

Our opinion may be subject to customary assumptions and qualifications and in rendering our opinion, we shall be entitled to rely upon certificates of representatives of Finance Company, 1197774 Alberta ULC, Acquisition Co., the Terasen Entities or public officials for factual information forming the basis of the opinions given herein. Our opinion may specify that we are under no obligation to advise on changes to our opinion resulting from a change in the law. Our opinion may also specify that it may only be relied upon by the persons to whom it is addressed.

The expressions "to our knowledge", "of which we are aware" or similar statements when used in this opinion: (a) refer to the actual knowledge of matters which have come or been brought to the attention of those lawyers presently with Blake, Cassels & Graydon LLP who have given substantive attention to the acquisition of Terasen Inc. by Kinder Morgan, Inc. and to the Purchase Agreement, the Indenture, the Registration Rights Agreement, the, Securities, the Preliminary Offering Memorandum and the Offering Memorandum; and (b) does not include constructive knowledge or knowledge imputed to us under common law principles of agency or otherwise.

Our opinions in paragraphs 6, 7, 11 and 13 as they relate to the Registration Rights Agreement or the issuance of the Exchange Securities may contain assumptions regarding the conduct of the exchange offer contemplated by the Registration Rights Agreement being in compliance with applicable securities laws.

With respect to the opinion in paragraph 14, we may assume that the Purchasers or their affiliates have complied with the provisions of the Purchase Agreement, including that all Notes that are sold to purchasers in British Columbia and Alberta are sold by investment dealers duly registered pursuant to the Securities Act (British Columbia) and the Securities Act (Alberta) and the regulations, rules, instruments and published policies thereunder, and are sold only to purchasers that are "accredited investors", as defined in National Instrument 45-106 – Prospectus and Registration Exemptions ("NI 45-106") in the Qualifying Provinces purchasing as principal.

The opinions expressed herein are subject to the following qualifications and limitations:

The enforceability of the obligations of KMI and Finance Company under any agreements referred to herein is subject to the following:

(a)

any applicable bankruptcy, insolvency, winding-up, arrangement, liquidation, reorganization, moratorium or other laws affecting creditors’ rights generally;

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(b)

equitable limitations on the availability of remedies;

(c)

statutory power of a court to grant relief from forfeiture;

(d)

applicable laws regarding limitations of actions;

(e)

general principles of equity which may apply to any proceeding in equity or at law;

(f)

the powers of a court to stay proceedings before it and to stay the execution of judgments;

(g)

limitations on the right of a creditor to receive immediate payment of amounts stated to be payable on demand or to accelerate the maturity of any indebtedness without reasonable notice to the debtor;

(h)

any provision of such agreements which:

(i)

states that amendments or waivers of or with respect to such agreements that are not in writing will not be effective;

(ii)

purports to sever any provision which is invalid or unenforceable under applicable law without affecting the validity or enforceability of the remainder of the document, which provisions may only be enforced in the discretion of a court; or

(iii)

purports to exculpate a party from liability in respect of acts or omissions which may be illegal, fraudulent or involve wilful misconduct; or

(i)

any provisions which purport to bind persons who are not parties to such agreements (other than by their agent, trustee or other representative.

Subject to the Alberta Court’s equitable discretion, the amount payable in U.S. dollars under an order of the New York Court which is enforceable in Alberta will be converted, for the purpose of payment under an order of the Alberta Court, into Canadian dollars on the basis of the rate of exchange prevailing at the date of entry of the judgment in the New York Court, as ascertained from any branch of any bank carrying on business in Alberta, and the clerk of Alberta Court shall certify on the order for registration the sum so determined expressed in Canadian dollars and, on its registration in the Alberta Court, the judgment shall be deemed to be a judgment for the sum so certified.

The provisions of the Interest Act (Canada) and the Judgment Interest Act (Alberta) may limit interest on a judgment debt to a rate less than the rate provided for by contract.

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SCHEDULE A

Terasen Inc. Material Contracts

Material Shipping Contracts

Amended and Restated Firm Service Agreement dated December 6, 1999 between Corridor Pipeline Limited, Trans Mountain Pipe Line Company Ltd., BC Gas Inc., Shell Canada Limited, Chevron Canada Resources Limited, and Western Oil Sands L.P., as amended September 14, 2000, March 29, 2001, and January 31, 2002.

Each of the Express Pipeline System Transportation Service Agreements – Existing Available Capacity between Express Pipeline Ltd., as General Partner of the Express Pipeline Limited Partnership ("Express") and the various shippers thereunder.

Material Terasen Debt Agreements

Credit Agreement between Terasen Inc. and the Toronto-Dominion Bank dated February 6, 2004

Credit Agreement between Terasen Inc. and Royal Bank of Canada dated February 6, 2004

Credit Agreement between Terasen Inc. and Canadian Imperial Bank of Commerce dated April 5, 2005

Credit Facility Letter Agreement between Terasen Gas Inc. and Bank of Montreal dated April 15, 2004, renewed April 25, 2005

Credit Facility Letter Agreement between Terasen Gas Inc. and Bank of Nova Scotia dated March 31, 1995, amended May 1, 1999, February 2, 2001 and April 19, 2005

Credit Facility Letter Agreement between Terasen Gas Inc. and Canadian Imperial Bank of Commerce dated July 26, 2004

Credit Facility Letter Agreement between Terasen Gas Inc. and National Bank of Canada dated February 8, 2001, renewed February 4, 2005

10.

Credit Facility Letter Agreement between Terasen Gas Inc. and TD Securities Inc. dated November 4, 2003, renewed July 15, 2004

11.

Centra Gas British Columbia Inc. Credit Agreement among Centra Gas British Columbia Inc., Canadian Imperial Bank of Commerce, Bank of Nova Scotia, Royal Bank of Canada and Toronto-Dominion Bank dated January 9, 1996

12.

Trust Deed between Centra Gas British Columbia Inc. and Montreal Trust Company of Canada dated January 9, 1996

II-16

13.

Westcoast Energy Funding Agreement among Westcoast Energy Inc., Canadian Imperial Bank of Commerce, Bank of Nova Scotia, Royal Bank of Canada and Toronto-Dominion Bank dated January 9, 1996

14.

Consent, Assignment, Release and Amendment Agreement, Centra BC Credit Agreement, Westcoast Energy Funding Agreement among Westcoast Energy Inc., BC Gas Inc., Centra Gas British Columbia Inc., Canadian Imperial Bank of Commerce, Royal Bank of Canada, The Bank of Nova Scotia, The Toronto-Dominion Bank and Caisse Central Desjardins, dated as of February 5, 2002

15.

Credit Agreement among Terasen Pipelines (Corridor) Inc., The Toronto-Dominion Bank, HSBC Bank Canada, Bank of Montreal, National Bank of Canada, and those other financial institutions which thereafter become lenders under such agreement, and TD Securities Inc. dated February 1, 2005

16.

US$16,000,000 Credit Agreement among Express US Holdings LP, Express Holdings (Canada) Limited Partnership and Royal Bank of Canada dated as of July 11, 2005

17.

Guarantee by Express Holdings (Canada) Limited Partnership of the obligations of Express Holdings USA Inc. in favour of Royal Bank of Canada dated July 11, 2005

18.

Uncommitted Credit Facility Letter Agreement between Express Holdings (USA) Inc. and Royal Bank of Canada dated July 11, 2005

19.

Trust Indenture between BC Gas Inc. and CIBC Mellon Trust Company dated as of November 21, 2001 providing for the issue of medium term notes, as supplemented by the First Series Supplement between BC Gas Inc. and CIBC Mellon Trust Company dated as of November 22, 2001

20.

Trust Indenture between BC Gas Inc. and CIBC Mellon Trust Company dated as of April 19, 2000

21.

Trust Indenture among BC Gas Inc, National Trust Company and Inland Energy Corp. dated as of December 3, 1990, and supplemented or amended by the following Supplemental Indentures:

(a)

First Supplemental Indenture among BC Gas Inc., National Trust Company of Canada and Inland Energy Corp. dated as of November 15, 1991

(b)

Second Supplemental Indenture among BC Gas Utility Ltd, National Trust Company and CIBC Mellon Trust Company dated February 3, 1999

(c)

Third Supplemental Indenture between BC Gas Utility Ltd. and CIBC Mellon Trust Company dated February 2, 1999

22.

Trust Indenture between Inland Natural Gas Co. Ltd. and National Trust Company, Limited dated as of November 1, 1977, as supplemented or amended by the following Supplemental Indentures:

II-17

(a)

First Supplemental Trust Indenture between Inland Natural Gas Co. Ltd. and National Trust Company, Limited dated as of November 17, 1981

(b)

Second Supplemental Trust Indenture between Inland Natural Gas Co. Ltd and National Trust Company, Limited dated as of July 11, 1984

(c)

Third Supplemental Trust Indenture between Inland Natural Gas Co. Ltd. and National Trust Company dated as of December 17, 1986

(d)

Fourth Supplemental Trust Indenture between Inland Natural Gas Co. Ltd. and National Trust Company dated as of June 1, 1989

(e)

Fifth Supplemental Indenture between BC Gas Inc. and National Trust Company dated as of July 1, 1989

(f)

Sixth Supplemental Indenture between BC Gas Inc. and National Trust Company dated as of June 14, 1990

(g)

Seventh Supplemental Indenture between BC Gas Inc. and National Trust Company dated as of October 26, 1990

(h)

Eighth Supplemental Indenture between BC Gas Inc. and National Trust Company dated as of August 1, 1992

(i)

Ninth Supplemental Indenture between BC Gas Utility Ltd. and National Trust Company dated as of July 28, 1993

(j)

Tenth Supplemental Indenture among BC Gas Utility Ltd., The R-M Trust Company and National Trust Company dated as of November 15, 1993

23.

Trust Indenture between Trans Mountain Pipe Line Company Ltd. and National Trust Company dated as of February 18, 1987, as supplemented or amended by the following Supplemental Indentures:

(a)

First Supplemental Indenture between Trans Mountain Pipe Line Company Ltd. and National Trust Company dated as of February 18, 1987

(b)

Second Supplemental Indenture between Trans Mountain Pipe Line Company Ltd. and National Trust Company dated as of November 22, 1989

(c)

Third Supplemental Indenture between Trans Mountain Pipe Line Company Ltd. and National Trust Company dated as of June 20, 1990

24.

Indenture between Terasen Pipelines (Corridor) Inc. and CIBC Mellon Trust Company dated as of February 1, 2005

II-18

25.

Trust Indenture among Express Pipeline Limited Partnership, Express Pipeline Partnership, Platte Pipe Line Company and The Chase Manhattan Bank dated as of February 6, 1998

26.

Deposit and Disbursement Agreement among Express Pipeline Limited Partnership, Express Pipeline Partnership, Platte Pipe Line Company and The Chase Manhattan Bank dated as of February 6, 1998

27.

Collateral Agency and Intercreditor Agreement among Express Pipeline Limited Partnership, Express Pipeline Partnership, Platte Pipe Line Company and The Chase Manhattan Bank dated as of February 6, 1998

28.

First Supplemental Indenture among Express Pipeline Limited Partnership, Express Pipeline LLC, Platte Pipe Line Company and JPMorgan Chase Bank, N.A. dated as of June 28, 2005

II-19

-----END PRIVACY-ENHANCED MESSAGE-----


Purchaser	Principal Amount of 2011 Notes to be Purchased	Principal Amount of 2016 Notes to be Purchased	Principal Amount of 2036 Notes to be Purchased
Merrill Lynch, Pierce, Fenner & Smith Incorporated	$225,000,000	$255,000,000	$165,000,000
Citigroup Global Markets Inc.	225,000,000	255,000,000	165,000,000
Barclays Capital Inc.	28,125,000	31,875,000	55,000,000
Greenwich Capital Markets, Inc.	75,000,000	31,875,000	20,625,000
J.P. Morgan Securities Inc.	28,125,000	85,000,000	20,625,000
Banc of America Securities LLC	28,125,000	31,875,000	20,625,000
Calyon Securities (USA) Inc.	28,125,000	31,875,000	20,625,000
Harris Nesbitt Corp.	28,125,000	31,875,000	20,625,000
Mitsubishi UFJ Securities International plc	28,125,000	31,875,000	20,625,000
SunTrust Capital Markets, Inc.	28,125,000	31,875,000	20,625,000
Wachovia Capital Markets, LLC	28,125,000	31,875,000	20,625,000

Total	$750,000,000	$850,000,000	$550,000,000