SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report June 8, 1998
KINDER MORGAN ENERGY PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 1-11234 76-0380342
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification)
1301 McKinney Street, Ste. 3450, Houston, Texas 77010
(Address of principal executive offices)(zip code)
Registrant's telephone number, including area code: 713-844-9500
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Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
Exhibits:
Exhibit No. Description
1.1 Underwriting Agreement dated as of June 8, 1998 by and among
Kinder Morgan Energy Partners, L.P., Kinder Morgan Operating
L.P. "A", Kinder Morgan Operating L.P. "B", Kinder Morgan
Operating L.P. "C", Kinder Morgan Operating L.P. "D", SFPP,
L.P., Kinder Morgan Natural Gas Liquids Corporation, Kinder
Morgan CO2, L.L.C., Kinder Morgan G.P., Inc., the
Underwriters named in Schedule I thereto, and the
Attorney-in-Fact acting on behalf of each of the Selling
Unitholders named in Schedule II .
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SIGNATURES
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 ENERGY PARTNERS, L.P.
By: Kinder Morgan G.P., Inc.,
Its general partner
By: /s/Clare H. Doyle
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Name: Clare H. Doyle
Title: Secretary
Date: June 12, 1998
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Kinder Morgan Energy Partners, L.P.
7,000,000 Common Units
Representing Limited Partner Interests
Underwriting Agreement
June 8, 1998
GOLDMAN, SACHS & CO.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DAIN RAUSCHER WESSELS
HOWARD WEIL LABOUISSE & FRIEDRICHS INCORPORATED
WHEAT FIRST UNION
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Kinder Morgan Energy Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 6,070,578 common units ("Common Units")
representing limited partner interests in the Partnership and, at the election
of the Underwriters, up to 1,050,000 additional Common Units and the unitholders
of the Partnership named in Schedule II hereto (the "Selling Unitholders")
propose, subject to the terms and conditions stated herein, to sell to the
Underwriters an aggregate of 929,422 Common Units. The aggregate of 7,000,000
Common Units to be sold by the Partnership and the Selling Unitholders is herein
called the "Firm Units" and the aggregate of 1,050,000 additional Common Units
to be sold by the Partnership is herein called the "Optional Units". The Firm
Units and the Optional Units that the Underwriters elect to purchase pursuant to
Section 2 hereof are herein collectively called the "Units".
The Partnership, Kinder Morgan Operating L.P. "A", a Delaware limited
partnership ("OLP-A"), Kinder Morgan Operating L.P. "B", a Delaware limited
partnership ("OLP-B"), Kinder Morgan Operating L.P. "C", a Delaware limited
partnership ("OLP-C"), Kinder Morgan Operating L.P. "D", a Delaware limited
partnership ("OLP-D" and, together with OLP-A, OLP-B and OLP-C, the "Operating
Partnerships"), SFPP, L.P., a Delaware limited partnership ("SFPP"), Kinder
Morgan Natural Gas Liquids Corporation, a Delaware corporation ("KMNGL Corp."),
Kinder Morgan CO2, L.L.C., a Delaware limited liability company ("KM-LLC"), and
Kinder Morgan G.P., Inc., a Delaware corporation (the "General Partner"), in its
individual capacity and in its capacity as the general partner of the
Partnership and each of the Operating Partnerships, are collectively referred to
herein as the "Kinder Morgan Entities".
1. (a) Each of the Kinder Morgan Entities represents and warrants to, and
agrees with, each of the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-50431),
including any pre-effective amendments thereto, (the "Initial Registration
Statement") in respect of the Units has
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been filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto but including all documents incorporated by reference in
the prospectus contained therein, to you for each of the other
Underwriters, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, no other document with respect to the
Initial Registration Statement or any document incorporated by reference
therein has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary
Prospectus"); the various parts of the Initial Registration Statement and
the Rule 462(b) Registration Statement, if any, including all exhibits
thereto and including (i) the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act
in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the time
it was declared effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective and (ii) the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective, each as amended at the time such
part of the Initial Registration Statement became effective, are
hereinafter collectively called the "Registration Statement"; such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Act,
is hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Partnership filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement;
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did 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, 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 the Partnership by an Underwriter
through Goldman, Sachs & Co. expressly for use therein or by a Selling
Unitholder expressly for use in the preparation of the answers therein to
Item 7 of Form S-3;
(iii)The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in
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the Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and will 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, 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 the Partnership by an Underwriter
through Goldman, Sachs & Co. expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
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 the case of the Prospectus and any supplement
or amendment thereto, in the light of the circumstances under which they
were made); 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 the Partnership by an
Underwriter through Goldman, Sachs & Co. expressly for use therein or by a
Selling Unitholder expressly for use in the preparation of the answers
therein to Item 7 of Form S-3;
(v) None of the Kinder Morgan Entities has sustained since the
date of the latest audited financial statements included or incorporated
by reference in the Prospectus any material 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, otherwise than as set forth or contemplated in
the Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any material change in the capitalization or long-term debt of any of the
Kinder Morgan Entities or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, partners' capital,
stockholders' equity or results of operations of the Kinder Morgan
Entities, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus;
(vi) Each of the Kinder Morgan Entities has good and marketable
title (or indefeasible title in the State of Texas) in fee simple to all
real property and good and marketable title to all personal property owned
by them, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by
the Kinder Morgan Entities; and any real property and buildings held under
lease by a Kinder Morgan Entity is held under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such
property and buildings by the Kinder Morgan Entities;
(vii)The Partnership is, and at the Closing Date will be, a
limited partnership duly formed, validly existing and in good standing
under the laws of the State of Delaware. The Partnership has, and at the
Closing Date will have, all necessary partnership power and authority to
conduct the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. The Partnership is, and at the
Closing Date will be, duly licensed or qualified to do business and in
good standing as a foreign limited partnership in all jurisdictions in
which the nature of the activities conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification
necessary (except where the failure to be so licensed or qualified will
not
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have a material adverse effect on the financial condition, results of
operations or business of the Kinder Morgan Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability). Complete and correct copies of the
Certificate of Limited Partnership of the Partnership, and all amendments
thereto, and of the Agreement of Limited Partnership of the Partnership,
as amended and restated (the "Partnership Agreement"), have been delivered
to the Underwriters, and no changes therein will be made subsequent to the
date hereof and prior to the Closing Date;
(viii) Each of the Operating Partnerships is, and at the Closing
Date will be, a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Delaware. Each of the
Operating Partnerships has, and at the Closing Date will have, all
necessary partnership power and authority to conduct the activities
conducted by it, to own or lease all the assets owned or leased by it and
to conduct its business as described in the Registration Statement and the
Prospectus. Each of the Operating Partnerships is, and at the Closing Date
will be, duly licensed or qualified to do business and in good standing as
a foreign limited partnership in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or
leased by it makes such licensing or qualification necessary (except where
the failure to be so licensed or qualified will not have a material
adverse effect on the financial condition, results of operations or
business of the Kinder Morgan Entities, taken as a whole, or subject the
Partnership or the limited partners of the Partnership to any material
liability or disability). Complete and correct copies of the Certificate
of Limited Partnership of each of the Operating Partnerships, and all
amendments thereto, and of the Agreement of Limited Partnership of OLP-A,
as amended and restated (the "OLP-A Agreement"), the Agreement of Limited
Partnership of OLP-B, as amended and restated (the "OLP-B Agreement"), the
Agreement of Limited Partnership of OLP-C, as amended and restated (the
"OLP-C Agreement"), and the Agreement of Limited Partnership of OLP-D, as
amended and restated (the "OLP-D Agreement" and, together with the OLP-A
Agreement, the OLP-B Agreement and the OLP-C Agreement, the "Operating
Partnership Agreements"), have been delivered to the Underwriters, and no
changes therein will be made subsequent to the date hereof and prior to
the Closing Date;
(ix) SFPP is, and at the Closing Date will be, a limited
partnership duly formed, validly existing and in good standing under the
laws of the State of Delaware. SFPP has, and at the Closing Date will
have, all necessary partnership power and authority to conduct the
activities conducted by it, to own or lease all the assets owned or leased
by it and to conduct its business as described in the Registration
Statement and the Prospectus. SFPP is, and at the Closing Date will be,
duly licensed or qualified to do business and in good standing as a
foreign limited partnership in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or
leased by it makes such licensing or qualification necessary (except where
the failure to be so licensed or qualified will not have a material
adverse effect on the financial condition, results of operations or
business of the Kinder Morgan Entities, taken as a whole, or subject the
Partnership or the limited partners of the Partnership to any material
liability or disability). Complete and correct copies of the Certificate
of Limited Partnership of SFPP and of the Agreement of Limited Partnership
of SFPP, as amended and restated (the "SFPP Agreement"), and all
amendments thereto have been delivered to the Underwriters, and no changes
therein will be made subsequent to the date hereof and prior to the
Closing Date;
(x) Each of the General Partner and KMNGL Corp., is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware. KM-LLC is a limited liability company
duly formed, validly existing and in good standing under the laws of the
State of Delaware. Each of the General Partner, KMNGL Corp. and KM-LLC
has, and at the Closing Date will have, all necessary corporate or limited
liability company power and authority, as the case may be, to conduct all
the activities conducted by it, to own or lease all the assets owned or
leased by it and to conduct its business as described in the Registration
Statement and the Prospectus. Each of the General Partner, KMNGL Corp. and
KM-LLC is, and at the Closing Date will be, duly licensed or qualified to
do business and in good standing as a
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foreign corporation or foreign limited liability company, as the case may
be, in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such
licensing or qualification necessary (except where the failure to be so
licensed or qualified will not have a material adverse effect on the
financial condition, results of operations or business of the Kinder
Morgan Entities, taken as a whole, or subject the Partnership or the
limited partners of the Partnership to any material liability or
disability). Complete and correct copies of the certificate of
incorporation and of the by-laws of the General Partner and KMNGL Corp.
and the limited liability agreement of KM-LLC and all amendments to such
documents have been delivered to the Underwriter, and no changes therein
will be made subsequent to the date hereof and prior to the Closing Date;
(xi) To the knowledge of the Kinder Morgan Entities, each of
Heartland Partnership ("Heartland") and Mont Belvieu Associates ("Mont
Belvieu") is, and at the Closing Date will be, a general partnership duly
formed and validly existing under the laws of the State of Texas and Shell
CO2 Company Ltd. ("Shell CO2") is, and at the Closing Date will be, a
limited partnership duly formed, validly existing and in good standing
under the laws of the State of Delaware. To the knowledge of the Kinder
Morgan Entities, each of Heartland, Mont Belvieu and Shell CO2 has, and at
the Closing Date will have, all necessary partnership power and authority,
to conduct the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus, except as would not have a
material adverse effect on the financial condition, results of operations
or business of such entities. To the knowledge of the Kinder Morgan
Entities, each of Heartland, Mont Belvieu and Shell CO2 is, and at the
Closing Date will be, duly licensed or qualified to do business and in
good standing as a foreign partnership in all jurisdictions in which the
nature of the activities conducted by it or the character of the assets
owned or leased by it makes such licensing or qualification necessary
(except where the failure to be so licensed or qualified will not have a
material adverse effect on the financial condition, results of operations
or business of the Kinder Morgan Entities, taken as a whole, or subject
the Partnership or the limited partners of the Partnership to any material
liability or disability);
(xii)The only subsidiaries (as such term is defined in the rules
and regulations of the Commission under the Act and the Exchange Act) of
the Partnership or other entities in which the Partnership, any of the
Operating Partnerships or SFPP has an equity ownership interest of 50% or
more are those listed on Schedule III hereto;
(xiii) Kinder Morgan, Inc., a Delaware corporation ("KMI"),
owns, and at the Closing Date will own, all of the issued and outstanding
shares of capital stock of the General Partner; such shares of capital
stock are duly authorized, validly issued, fully paid and nonassessable.
(xiv)Richard D. Kinder, Morgan Associates, Inc. ("MAI") and
First Union Corporation ("First Union") are the sole stockholders of KMI.
Richard D. Kinder owns 71.04% of the Class A voting stock of KMI. MAI owns
27.65% of the Class A voting stock of KMI. First Union owns 1.30% of the
Class A voting stock and 100.0% of the Class B nonvoting stock of KMI. All
of such shares of Class A voting and Class B nonvoting stock are duly
authorized, validly issued, fully paid and nonassessable;
(xv) The General Partner is the sole general partner of the
Partnership with a 1% general partner interest in the Partnership; such
general partner interest is duly authorized by the Partnership Agreement
and was validly issued to the General Partner; and, the General Partner
owns such general partner interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims (except for
such liens, encumbrances, security interests, equities, charges or claims
as are not, individually or in the aggregate, material or as described in
the Registration Statement or the Prospectus);
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(xvi)The General Partner is the sole general partner of each of
the Operating Partnerships with a 1.0101% general partner interest in each
of the Operating Partnerships; such general partner interests are duly
authorized by the respective Operating Partnership Agreement, and were
validly issued to the General Partner; and the General Partner owns such
general partner interests free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus);
(xvii) The Partnership is the sole limited partner of each of
the Operating Partnerships with a 98.9899% limited partner interest in
each of the Operating Partnerships; such limited partner interests, in
each of such Partnerships, are duly authorized by the respective Operating
Partnership Agreement, and were validly issued to the Partnership and are
fully paid and nonassessable (except as nonassessability may be affected
by certain provisions of the Delaware Revised Limited Partnership Act (the
"Delaware Act")); and the Partnership owns such limited partner interests
free and clear of all liens, encumbrances, security interests, equities,
charges or claims (except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or as described in the Registration Statement or the
Prospectus, including the security interest securing certain debt of the
Partnership and OLP-B);
(xviii) OLP-A owns, and at the Closing Date will own, all of the
issued and outstanding capital stock of KMNGL Corp. and all of the issued
and outstanding member interests of KM-LLC; all of such capital stock and
such member interests are duly authorized, validly issued, fully paid and
nonassessable; and OLP-A owns such capital stock and such member interests
free and clear of all liens, encumbrances, security interests, equities,
charges or claims (except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or as described in the Registration Statement or the
Prospectus);
(xix)OLP-D is the sole general partner of SFPP with a 99.5%
general partner interest; such general partner interest is duly authorized
by the SFPP Agreement, and was validly issued to OLP-D; and OLP-D owns
such general partner interest free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus, including the security interest
securing the guarantee of certain debt of OLP-D to the Partnership); Santa
Fe Pacific Pipelines, Inc. (the "SF Limited Partner") is the sole limited
partner of SFPP with a 0.5% non-voting, limited partner interest; such
limited partner interest is duly authorized by the SFPP Agreement, and
validly issued to the SF Limited Partner and fully paid and nonassessable
(except as nonassessability may be affected by certain provisions of the
Delaware Act);
(xx) OLP-A is a general partner of Heartland with a 50% general
partner interest in Heartland, KMNGL Corp. is a general partner of Mont
Belvieu with a 50% general partner interest in Mont Belvieu, and KM-LLC is
a limited partner of Shell CO2, with a 20% limited partner interest in
Shell CO2; such general partner interests and such limited partner
interests are duly authorized by the respective partnership agreement of
Heartland, Mont Belvieu and Shell CO2, and were validly issued by each of
Heartland, Mont Belvieu and Shell CO2, respectively, and in the case of
such limited partner interests is fully paid and nonassessable (except as
such nonassessability may be affected by certain provisions of the
Delaware Act); and, OLP-A and KMNGL Corp. own such general partner
interests in Heartland and Mont Belvieu, respectively, and KM-LLC owns
such limited partner interest, free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus);
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(xxi)At the Closing Date after giving effect to the issuance of
the Firm Units, the capitalization of the Partnership will consist of
46,731,275 Common Units (47,781,275 Common Units if all of the Optional
Units are issued); such Common Units will be the only limited partner
interests of the Partnership that are issued and outstanding at the
Closing Date; all of the issued Common Units have been duly and validly
authorized and issued, and are fully paid and nonassessable (except as
nonassessability may be affected by certain provisions of the Delaware
Act) and substantially conform to the description of the Common Units
incorporated by reference into the Prospectus; and the unissued Units to
be issued and sold by the Partnership to the Underwriters hereunder have
been duly and validly authorized, and when issued against payment therefor
as provided herein, will be duly and validly authorized and, fully paid
and nonassessable (except as nonassessability may be affected by certain
provisions of the Delaware Act) and will substantially conform to the
description of the Common Units incorporated by reference into the
Prospectus;
(xxii) Each of the Kinder Morgan Entities has all necessary
partnership, corporate or limited liability company power and authority,
as the case may be, to enter into this Agreement. This Agreement has been
duly authorized, executed and delivered by each of the Kinder Morgan
Entities and constitutes a valid and binding agreement with respect to
each of such entities and is enforceable against each of them in
accordance with the terms hereof;
(xxiii) The issue and sale of the Units to be sold by the
Partnership hereunder, the compliance by the Kinder Morgan Entities with
all of the provisions of this Agreement, the consummation of the
transactions contemplated herein and the application by the Partnership of
the net proceeds from the offering and sale of the Units in the manner set
forth in the Prospectus under "Use of Proceeds" will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any of the Kinder
Morgan Entities is a party or by which any of the Kinder Morgan Entities
is bound or to which any of the property or assets of the Kinder Morgan
Entities are subject, nor will such action result in any violation of the
provisions of the certificate of incorporation, by-laws, partnership
agreement or other organizational documents, as the case may be, of any of
the Kinder Morgan Entities or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over any
of the Kinder Morgan Entities or any of the properties of any such
entities, except where such occurrence will not prevent the consummation
of the transactions contemplated herein and will not have a material
adverse effect on the financial condition, results of operations or
business of the Kinder Morgan Entities, taken as a whole, or subject the
Partnership or the limited partners of the Partnership to any material
liability or disability; and no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body having jurisdiction over any of the Kinder Morgan Entities or any
of the properties of such entities is required for the issuance and sale
of the Units or the consummation by the Kinder Morgan Entities of the
transactions contemplated by this Agreement, except the registration under
the Act of the Units and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Units by the Underwriters;
(xxiv) None of the Kinder Morgan Entities is (a) in violation of
its Certificate of Incorporation, By-laws, Partnership Agreement or other
organizational documents, as the case may be, or (b) in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound, except for such
violations and defaults as (i) would not have a material adverse effect on
the financial condition, results of operations or business of the Kinder
Morgan Entities, taken as a whole, or subject the Partnership or the
limited partners of the Partnership to any material liability or
disability and (ii) in the case of such violations, have been disclosed in
writing to Goldman, Sachs & Co. prior to the execution of this Agreement;
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(xxv)The statements set forth in the Prospectus under the
captions "Material Federal Income Tax Considerations" and "Underwriting",
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair; 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 the Partnership by an Underwriter
through Goldman, Sachs & Co. expressly for use therein;
(xxvi) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which any of the Kinder
Morgan Entities is a party or of which any property of any Kinder Morgan
Entity is the subject which, if determined adversely to the respective
Kinder Morgan Entity, would individually or in the aggregate have a
material adverse effect on the financial condition, results of operations
or business of the Kinder Morgan Entities, taken as a whole, or subject
the Partnership or the limited partners of the Partnership to any material
liability or disability; and, to the knowledge of the Kinder Morgan
Entities, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xxvii) None of the Kinder Morgan Entities is, nor at the
Closing Date will be, (i) a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" thereof, within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (ii) an
"investment company", a person "controlled by" an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended;
(xxviii) None of the Kinder Morgan Entities or any of their
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(xxix) Arthur Andersen LLP and Price Waterhouse LLP, who have
certified certain financial statements of the Kinder Morgan Entities, and
in the case of Price Waterhouse LLP, who has also certified certain
financial statements of Santa Fe Pacific Pipeline Partners, L.P. ("Santa
Fe"), are each independent public accountants as required by the Act and
the rules and regulations of the Commission thereunder;
(xxx)There are no preemptive rights or other rights to subscribe
for or to purchase, nor any restrictions upon the voting or transfer of,
any partnership interests or shares of stock of any of the Kinder Morgan
Entities pursuant to any partnership agreement, any articles or
certificates of incorporation or other governing documents or any
agreement or other instrument to which any of the Kinder Morgan Entities
is a party or by which any of such entities may be bound (other than (a)
the General Partner's preemptive right contained in the Partnership
Agreement, (b) the restrictions on transfer arising from the pledge of the
Common Units owned by the General Partner, (c) the restrictions on
transfer under the Partnership's credit facility, and (d) as set forth in
or incorporated by reference into the Prospectus). The offering and sale
of Units as contemplated by this Agreement does not give rise to any
rights, other than those which have been waived or satisfied, for or
relating to the registration of any Partnership interests or other
securities of the Partnership. Except for certain grants made under the
Partnership's Executive Compensation Plan and the Common Unit Option Plan,
there are no outstanding options or warrants to purchase any Common Units
or other securities of any of the Kinder Morgan Entities;
(xxxi) The financial statements and schedules included or
incorporated by reference in the Registration Statement or the Prospectus
present fairly the consolidated financial condition of the Partnership,
the General Partner and Santa Fe as of the respective dates thereof and
the consolidated results of operations and cash flows of the Partnership
and Santa Fe for the respective periods covered thereby, all in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise disclosed
in the Prospectus. No other financial statements or schedules of the
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Partnership, the General Partner and Santa Fe are required by the Act, the
Exchange Act or the rules and regulations of the Commission under such
acts to be included in the Registration Statement or the Prospectus. The
statements included in the Registration Statement with respect to the
Accountants pursuant to Rule 509 of Regulation S-K of the Rules and
Regulations are true and correct in all material respects;
(xxxii) Each of the Kinder Morgan Entities maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(xxxiii) The pro forma financial statements included in or
incorporated by reference in the Registration Statement and the
Prospectus, including the presentation of the acquisition of SFPP
contained in such pro forma financial statements, comply as to form in all
material respects with the applicable accounting requirements of the Act,
the Exchange Act and the rules and regulations of the Commission under
such acts, have been prepared on a basis consistent with the historical
consolidated financial statements of the Partnership and Santa Fe and give
effect to the assumptions used in the preparation thereof on a reasonable
basis and in good faith;
(xxxiv) Each of the Kinder Morgan Entities (i) is in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or imposing liability or standards of conduct concerning any
Hazardous Material (as hereinafter defined) ("Environmental Laws"), (ii)
has received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses
and (iii) is in compliance with all terms and conditions of any such
permit, license or approval, except as disclosed in the Prospectus or
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not
result in a material adverse effect on the financial condition, results of
operations or business of the Kinder Morgan Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability. The term "Hazardous Material" means (A)
any "hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (B) any
"hazardous waste" as defined by the Resource Conservation and Recovery
Act, as amended, (C) any petroleum or petroleum product, (D) any
polychlorinated biphenyl and (E) any pollutant or contaminant or
hazardous, dangerous, or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law;
(xxxv) In the ordinary course of its business, each of the
Kinder Morgan Entities conducts a periodic review of the effect of
Environmental Laws on the business, operations and properties of such
entity, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties). Except as set forth in the Registration Statement and
the Prospectus, there are no costs and liabilities associated with or
arising in connection with Environmental Laws as currently in effect
(including, without limitation, costs of compliance therewith) which would
have a material adverse effect on the financial condition, results of
operations or business of the Kinder Morgan Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability;
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(xxxvi) On the Closing Date, the Units will be approved for
listing, subject to official notice of issuance, on the New York Stock
Exchange.
(xxxvii) Each of the Kinder Morgan Entities is in compliance
with all federal, state and local employment and labor laws, including,
but not limited to, laws relating to non-discrimination in hiring,
promotion and pay of employees (except where such noncompliance will not
have a material adverse effect on the financial condition, results of
operations or business of the Kinder Morgan Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability); no labor dispute with the employees of
any of the Kinder Morgan Entities exists or, to the knowledge of any of
the Kinder Morgan Entities, is imminent or threatened, except as would not
have a material adverse effect on the financial condition, results of
operation or business of the Kinder Morgan Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability; and none of the Kinder Morgan Entities
is aware of any existing, imminent or threatened labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors
that could result in a material adverse effect on the financial condition,
results of operations or business of the Kinder Morgan Entities, taken as
a whole, or subject the Partnership or the limited partners of the
Partnership to any material liability or disability.
(xxxviii) None of the Kinder Morgan Entities has nor, to their
knowledge, has any employee or agent thereof made any payment of funds to
any of the Kinder Morgan Entities or received or retained any funds
therefrom in violation of any law, rule or regulation of a character
required to be disclosed in the Prospectus;
(xxxix) The Partnership maintains insurance with respect to its
properties and business of the types and in amounts generally deemed
adequate for its business and consistent with insurance coverage
maintained by similar companies and businesses, all of which insurance is
in full force and effect;
(xi) Each of the Kinder Morgan Entities has filed all material
federal, state and foreign income and franchise tax returns and has paid
all taxes shown as due thereon, other than taxes which are being contested
in good faith and for which adequate reserves have been established in
accordance with generally accepted accounting principles ("GAAP"). There
are no tax returns of any of the Kinder Morgan Entities that are currently
being audited by state, local or federal taxing authorities or agencies
(and with respect to which any of the Kinder Morgan Entities has received
notice), where the findings of such audit, if adversely determined, would
result in a material adverse effect on the financial condition, results of
operations or business of the Kinder Morgan Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability;
(xii)With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) maintained or contributed to by the
Partnership, or with respect to which the Partnership could incur any
liability under ERISA (collectively, the "Benefit Plans"), no event has
occurred, in connection with which the Partnership could be subject to any
liability under the terms of such Benefit Plan, applicable law (including,
without limitation, ERISA and the Internal Revenue Code of 1986, as
amended) or any applicable agreement that could materially adversely
affect the financial condition, results of operations or business of the
Kinder Morgan Entities, taken as a whole, or subject the Partnership or
the limited partners of the Partnership to any material liability or
disability;
(b) Each of the Selling Unitholders severally represents and warrants
to, and agrees with, each of the Underwriters and the Partnership that:
(i) All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Unitholder of this
Agreement, the Power of Attorney and
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Custody Agreement hereinafter referred to and the questionnaire
accompanying such Power of Attorney and Custody Agreement, and for the
sale and delivery of the Units to be sold by such Selling Unitholder
hereunder, have been obtained; and such Selling Unitholder has full right,
power and authority to enter into this Agreement and the Power of Attorney
and Custody Agreement and to sell, assign, transfer and deliver the Units
to be sold by such Selling Unitholder hereunder;
(ii) The sale of the Units to be sold by such Selling Unitholder
hereunder and the compliance by such Selling Unitholder with all of the
provisions of this Agreement and the Power of Attorney and Custody
Agreement (the "Power of Attorney and Custody Agreement"), and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which such Selling Unitholder is a party or by which such Selling
Unitholder is bound, or to which any of the property or assets of such
Selling Unitholder is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation or by-laws
of such Selling Unitholder if such Selling Unitholder is a corporation,
the partnership agreement of such Selling Unitholder if such Selling
Unitholder is a partnership or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over such Selling Unitholder or the property of such Selling Unitholder,
except where such occurrence will not prevent the consummation of the
transactions contemplated herein and in the Power of Attorney and Custody
Agreement;
(iii)Such Selling Unitholder has, and immediately prior to the
First Time of Delivery (as defined in Section 4 hereof) such Selling
Unitholder will have, good and valid title to the Units to be sold by such
Selling Unitholder hereunder, free and clear of all liens, encumbrances,
equities or claims; and, upon delivery of such Units and payment therefor
pursuant hereto and thereto, good and valid title to such Units, free and
clear of all liens, encumbrances, equities or claims, will pass to the
several Underwriters;
(iv) Such Selling Unitholder (other than Goldman, Sachs & Co. in
its capacity as lead underwriter of the offering) has not taken and will
not take, directly or indirectly, any action which is designed to or which
has constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Partnership to facilitate the sale or resale of the Units;
(v) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Partnership by such
Selling Unitholder expressly for use therein, such Preliminary Prospectus
and the Registration Statement did, and the Prospectus and any further
amendments or supplements to the Registration Statement and the
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading (in the case of the
Prospectus or any supplement or amendment thereto, in the light of the
circumstances under which they were made);
(vi) Certificates in negotiable form representing all of the
Units to be sold by such Selling Unitholder hereunder have been placed in
custody under the Power of Attorney and Custody Agreement, in the form
heretofore furnished to you, appointing First Chicago Trust Company of New
York, as custodian (the "Custodian"), and such Selling Unitholder has duly
executed and delivered the Power of Attorney and Custody Agreement,
appointing Richard D. Kinder, William V. Morgan and Thomas B. King, and
each of them individually, as such Selling Unitholder's attorneys-in-fact
(the "Attorneys-in-Fact") with authority to execute and deliver this
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Agreement on behalf of such Selling Unitholder, to determine the purchase
price to be paid by the Underwriters to the Selling Unitholders as
provided in Section 2 hereof, to authorize the delivery of the Units to be
sold by such Selling Unitholder hereunder and otherwise to act on behalf
of such Selling Unitholder in connection with the transactions
contemplated by this Agreement and the Power of Attorney and Custody
Agreement; and
(vii)The Units represented by the certificates held in custody
for such Selling Unitholder under the Power of Attorney and Custody
Agreement are subject to the interests of the Underwriters hereunder; the
arrangements made by such Selling Unitholder for such custody, and the
appointment by such Selling Unitholder of the Attorneys-in-Fact by the
Power of Attorney and Custody Agreement, are to that extent irrevocable;
the obligations of the Selling Unitholders hereunder shall not be
terminated by operation of law, whether by the death or incapacity of any
individual Selling Unitholder or, in the case of an estate or trust, by
the death or incapacity of any executor or trustee or the termination of
such estate or trust, or in the case of a partnership or corporation, by
the dissolution of such partnership or corporation, or by the occurrence
of any other event; if any individual Selling Unitholder or any such
executor or trustee should die or become incapacitated, or, if any such
estate or trust should be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should occur,
before the delivery of the Units hereunder, certificates representing the
Units shall be delivered by or on behalf of the Selling Unitholders in
accordance with the terms and conditions of this Agreement and of the
Power of Attorney and Custody Agreement; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney and Custody Agreement
shall be as valid as if such death, incapacity, termination, dissolution
or other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received
notice of such death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the
Partnership and each of the Selling Unitholders agree, severally and not
jointly, to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Partnership and each of
the Selling Unitholders, at a purchase price per Unit of $36 13/16, the number
of Firm Units (to be adjusted by you so as to eliminate fractional Units)
determined by multiplying the aggregate number of Firm Units to be sold by the
Partnership and each of the Selling Unitholders as set forth opposite their
respective names in Schedule II hereto by a fraction, the numerator of which is
the aggregate number of Firm Units to be purchased by such Underwriter as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Firm Units to be purchased by
all of the Underwriters from the Partnership and all of the Selling Unitholders
hereunder and (b) in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Units as provided below, the
Partnership agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Partnership, at the purchase price per Unit set forth in clause (a) of this
Section 2, that portion of the number of Optional Units as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional Units) determined by multiplying such number of Optional Units by a
fraction the numerator of which is the maximum number of Optional Units which
such Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Units that all of the Underwriters are entitled to purchase
hereunder.
The Partnership hereby grants to the Underwriters the right to purchase at
their election up to 1,050,000 Optional Units, at the purchase price per Unit
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Units. Any such election to purchase
Optional Units may be exercised only by written notice from you to the
Partnership, given within a period of 30 calendar days after the date of this
Agreement and setting forth the aggregate number of Optional Units to be
purchased and the date on which such Optional Units are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Partnership otherwise agree
in writing, earlier than two or later than ten business days after the date of
such notice.
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3. Upon the authorization by you of the release of the Firm Units, and if
applicable, the Option Units, the several Underwriters propose to offer the Firm
Units, and if applicable, the Option Units, for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Units to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Partnership and the Selling Unitholders shall be delivered by or
on behalf of the Partnership and the Selling Unitholders to Goldman, Sachs &
Co., through the facilities of The Depository Trust Company ("DTC") or otherwise
as requested by the Goldman, Sachs & Co., for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified
by the Partnership and the Custodian, as their interests may appear, to Goldman,
Sachs & Co. at least forty-eight hours in advance. The Partnership will cause
the certificates representing the Units to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Units, 9:30 a.m., New York City time, on June 12,
1998 or such other time and date as Goldman, Sachs & Co., the Partnership and
the Selling Unitholders may agree upon in writing, and, with respect to the
Optional Units, 9:30 a.m., New York City time, on the date specified by Goldman,
Sachs & Co. in the written notice given by Goldman, Sachs & Co. of the
Underwriters' election to purchase such Optional Units, or such other time and
date as Goldman, Sachs & Co., the Partnership and the Selling Unitholders may
agree upon in writing. Such time and date for delivery of the Firm Units is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Units, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Units and any additional documents requested by the
Underwriters pursuant to Section 7(k) hereof will be delivered at the offices of
Andrews & Kurth L.L.P., 600 Travis, Suite 4200, Houston, Texas 77002 (the
"Closing Location"), and the Units will be delivered at the Designated Office,
all at each Time of Delivery. A meeting will be held at the Closing Location at
12:00 p.m., New York City time, on the New York Business Day next preceding each
Time of Delivery, 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 which is not a
day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. Each of the Kinder Morgan Entities agrees with each of the
Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior to
the last Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you copies thereof; to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Partnership with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Units; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or prospectus, of
the suspension of the qualification of the Units for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or
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Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Units for offering and sale under the
securities laws of such jurisdictions as you 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 Units, provided that in connection therewith the Partnership shall not be
required to qualify as a foreign partnership or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a prospectus
is required at any time prior to the expiration of nine months after the time of
issue of the Prospectus in connection with the offering or sale of the Units and
if at such time any events shall have occurred as a result of which the
Prospectus 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 Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act or the Exchange Act,
to notify you and upon your request to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in securities as
many copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance, and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Units at any time
nine months or more after the time of issue of the Prospectus, upon your request
but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Partnership and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Partnership, Rule
158);
(e) During the period (the "Lock-Up Period") beginning from the date
hereof and continuing to and including the date 90 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose of, except
as provided hereunder, any Common Units or securities of the Partnership (or any
other Kinder Morgan Entity) that are substantially similar to the Common Units,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Common Units or any
such substantially similar securities (other than (i) in connection with the
acquisition of assets, businesses or the capital stock or other ownership
interests of businesses by any of the Kinder Morgan Entities in exchange for
Common Units, if the recipient(s) of such Common Units agree(s) not to offer,
sell, contract to sell, or otherwise dispose of during the Lock-Up Period any
Common Units received in connection with such acquisition(s) and (ii) pursuant
to employee unit option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of this
Agreement), without your prior written consent;
(f) To furnish to its Unitholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, partners' capital and cash flows of the Partnership and
its consolidated subsidiaries certified by independent public accountants);
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to Unitholders, and, upon request,
to deliver to you as soon as they are available, copies of any reports and
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financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Partnership is
listed.
(h) To use the net proceeds received by it from the sale of the Units
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance,
the Units on the New York Stock Exchange; and
(j) If the Partnership elects to rely upon Rule 462(b), the
Partnership shall file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date
of this Agreement, and the Partnership shall at the time of filing either pay to
the Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
6. The Kinder Morgan Entities and each of the Selling Unitholders covenant
and agree with one another and with the several Underwriters that (a) the Kinder
Morgan Entities and such Selling Unitholders will pay or cause to be paid a pro
rata share (based on the number of Units to be sold by the Partnership and such
Selling Unitholder) the following: (i) the fees, disbursements and expenses of
the Kinder Morgan Entities' counsel and accountants in connection with the
registration of the Units under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing this Agreement, the Selling
Agreements, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Units; (iii) any filing fees and expenses in connection with the qualification
of the Units for offering and sale under state securities laws as provided in
Section 5(b) hereof, but not including the fees and disbursements of counsel for
the Underwriters in connection with such qualification; (iv) all fees and
expenses in connection with listing the Units on the New York Stock Exchange;
(v) the filing fees incident to, securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Units;
(vi) the cost and charges of any transfer agent or registrar and (vii) the costs
and expenses of the Partnership relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering of the Units,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Partnership, travel and lodging expense of the representatives and officers of
the Partnership and any such consultants (not including any employees of the
Underwriters), and the pro rata cost of any aircraft chartered in connection
with the road show; and (b) the Kinder Morgan Entities will pay or cause to be
paid (i) the cost of preparing certificates representing Units; and (ii) all
other costs and expenses incident to the performance of the Kinder Morgan
Entities' obligations hereunder which are not otherwise specifically provided
for in this Section 6; and (c) each Selling Unitholder will pay or cause to be
paid all costs and expenses incident to the performance of such Selling
Unitholder's obligations hereunder which are not otherwise specifically provided
for in this Section 6, including (i) any fees and expenses of counsel for such
Selling Unitholder, (ii) such Selling Unitholder's pro rata share of the fees
and expenses of the Attorneys-in-Fact and the Custodian and (iii) all expenses
and taxes incident to the sale and delivery of the Units to be sold by such
Selling Unitholder to the Underwriters hereunder. In connection with Clause
(c)(iii) of the preceding sentence, Goldman, Sachs & Co. agrees to pay New York
State stock transfer tax, and the Selling Unitholder agrees to reimburse
Goldman, Sachs & Co. for associated carrying costs if such tax payment is not
rebated on the day of payment and for any portion of such tax payment not
rebated. It is understood, however, that the Kinder Morgan Entities shall bear,
and the Selling Unitholders shall not be required to pay or to reimburse the
Kinder Morgan Entities for, the cost of any other matters not directly relating
to the sale and purchase of the Units pursuant to this Agreement, and that
except as provided in this Section 6, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Units by them, and
any advertising expenses connected with any offers they may make.
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7. The obligations of the Underwriters hereunder, as to the Units to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
each of the Kinder Morgan Entities and of the Selling Unitholders herein are, at
and as of such Time of Delivery, true and correct, the condition that each of
the Kinder Morgan Entities and the Selling Unitholders shall have performed all
of its and their obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Partnership has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Andrews & Kurth L.L.P., counsel for the Underwriters, shall have
furnished to you such written opinion or opinions (a draft of each such opinion
is attached as Annex II(a) hereto), dated such Time of Delivery, with respect to
the matters covered in paragraphs (i) (insofar as it relates to the due
formation and good standing of the Partnership in Delaware and the Partnership's
power and authority to conduct its business as described in the Registration
Statement and the Prospectus, as amended or supplemented), (v), (xv), (xvii)
(insofar as it relates to the statements set forth in the Prospectus under the
caption "Underwriting") and (xxi) (insofar as it relates to the Registration
Statement and the Prospectus) of subsection (c) below and a letter substantially
similar to the letter required to be delivered by Morrison & Hecker L.L.P.
pursuant to subsection (c) below as well as such other related matters as you
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;
(c) Morrison & Hecker L.L.P., counsel for the Kinder Morgan Entities,
shall have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) Each of the Kinder Morgan Entities has been duly formed and
is validly existing and in good standing under the laws of the State of
Delaware and each Kinder Morgan Entity has the partnership or corporate
power and authority, as the case may be, to conduct its business as
described in the Registration Statement and the Prospectus, as amended or
supplemented. To the knowledge of such counsel, each of the Kinder Morgan
Entities is duly qualified to do business and is in good standing as a
foreign corporation or foreign limited partnership, as the case may be, in
all jurisdictions in which the nature of the activities conducted by it or
the character of the assets owned or leased by it makes such licensing or
qualification necessary, except in the case where the failure to be so
qualified cannot reasonably be expected to have a material adverse effect
on the financial condition, results of operations or business of the
Kinder Morgan Entities, taken as a whole, or subject the Partnership or
the limited partners of the Partnership to any material liability or
disability;
(ii) The General Partner is the sole general partner of the
Partnership with a 1% general partner interest in the Partnership; such
general partner interest is duly authorized by the Partnership Agreement
and was validly issued to the General Partner; and, to the knowledge of
such counsel, the General Partner owns such general partner interest free
and clear of all liens, encumbrances, security interests, equities,
charges or claims (except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or as described in the Registration Statement or the
Prospectus, as amended or supplemented);
(iii)The General Partner is the sole general partner of each of
the Operating Partnerships with a 1.0101% general partner interest in each
of the Operating Partnerships; such
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general partner interests are duly authorized by the respective Operating
Partnership Agreements and were validly issued to the General Partner; and
to the knowledge of such counsel, the General Partner owns such general
partner interests free and clear of all liens, encumbrances, security
interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus, as amended or supplemented, and
except as provided in the Operating Partnership Agreements);
(iv) OLP-D is the sole general partner of SFPP with a 99.5%
general partner interest in SFPP; such general partner interest is duly
authorized by the SFPP Agreement and was validly issued to OLP-D; and to
the knowledge of such counsel, OLP-D owns such general partner interest
free and clear of all liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material
or as described in the Registration Statement or the Prospectus, as
amended or supplemented, or the SFPP Agreement); the SF Limited Partner
is the sole limited partner of SFPP with a 0.5% non-voting, limited
partner interest in SFPP; and such limited partner interest is duly
authorized by the SFPP Agreement and was validly issued to the SF Limited
Partner;
(v) At the Closing Date after giving effect to the issuance of
the Firm Units, to the knowledge of such counsel, the capitalization of
the Partnership will consist of 46,730,657 Common Units (47,780,657 Common
Units if all of the Optional Units are issued); to the knowledge of such
counsel, such Common Units will be the only limited partner interests of
the Partnership that are issued and outstanding at the Closing Date; all
of such Common Units of the Partnership (including the Units being
delivered at such Time of Delivery) have been duly and validly authorized
and issued and are fully paid and non-assessable (except as such
nonassessability may be affected by certain provisions of the Delaware
Act); and the Units conform in all material respects to the description
thereof incorporated by reference in the Prospectus as amended or
supplemented;
(vi) The Partnership is the sole limited partner of each of the
Operating Partnerships with a 98.9899% limited partner interest in each of
the Operating Partnerships; such limited partner interests, in the
case of each of the Operating Partnerships, are duly authorized by the
respective Operating Partnership Agreements, were validly issued to the
Partnership and are fully paid and non-assessable (except as
nonassessability may be affected by certain provisions of the Delaware
Act); and, to the knowledge of such counsel, the Partnership owns such
limited partner interests free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims (i) as are
not, individually or in the aggregate, material, (ii) as described in the
Registration Statement or the Prospectus, as amended or supplemented or
(iii) arising out of the pledge by the Partnership of the limited partner
interests of the Operating Partnerships to secure certain indebtedness of
the Partnership and OLP-B);
(vii)Based solely on such counsel's review of the stock transfer
records of KMNGL, OLP-A is the record owner of all of the issued and
outstanding capital stock of KMNGL Corp.; OLP-A is the sole member of
KM-LLC; all of such capital stock and such member interest are duly
authorized, validly issued, fully paid and nonassessable; and, to the
knowledge of such counsel, OLP-A owns all of such capital stock and such
member interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus);
(viii) OLP-A is a general partner of Heartland with a 50%
general partner interest in Heartland, KMNGL Corp. is a general partner of
Mont Belvieu with a 50% general partner interest in Mont Belvieu, and
KM-LLC is a limited partner of Shell CO2, with a 20% limited partner
interest in Shell CO2; such general partner interests and such limited
partner interest are duly authorized by the respective partnership
agreements of Heartland, Mont Belvieu and Shell
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CO2, and were validly issued by each of Heartland, Mont Belvieu and Shell
CO2, respectively, and in the case of such limited partner interest, is
fully paid and nonassessable (except as such nonassessability may be
affected by certain provisions of the Delaware Act); and, to the knowledge
of such counsel, OLP-A and KMNGL Corp. own such general partner interests
in Heartland and Mont Belvieu, respectively, and KM-LLC owns such limited
partner interest in Shell CO2, free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus);
(ix) None of the Units, when paid for by the Underwriters in
accordance with the terms of this Agreement, will be subject to any
preemptive or similar right under (i) the Delaware Act, (ii) the
Partnership Agreement (except for the General Partner's preemptive right
contained in Section 4.5 of the Partnership Agreement, which has been
waived with respect to the issuance and sale of the Units to the
Underwriters) or (iii) any instrument, document, contract or agreement
filed as an exhibit to or incorporated by reference in the Registration
Statement. Except as (i) described in the Registration Statement or the
Prospectus, (ii) the Partnership's Executive Compensation Plan, and (iii)
the Common Unit Option Plan, to the knowledge of such counsel, there is no
commitment or arrangement to issue, and there are no outstanding options,
warrants or other rights calling for the issuance of, any Common Units
or any partnership interest or share of capital stock of any of the Kinder
Morgan Entities to any person or any security or other instrument that
by its terms is convertible into, exercisable for and exchangeable into
Common Units.
(x) No consent, approval, authorization, order, registration or
qualification of or with any federal, Delaware or New York court or
governmental agency or body is required under Federal or New York law or
the Delaware Act for the issue and sale of the Units being delivered at
such Time of Delivery or the consummation by the Partnership of the
transactions contemplated by this Agreement, except such as have been
obtained under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws or by the Bylaws and rules of the National Association of
Securities Dealers, Inc. in connection with the purchase and distribution
of the Units by the Underwriters;
(xi) To the knowledge of such counsel, any instrument, document,
lease, license or other agreement required to be described or referred to
in the Registration Statement or the Prospectus, as amended or
supplemented, has been described or referred to therein and any such
instrument, document, lease, license or other agreement required to be
filed as an exhibit to the Registration Statement has been filed as an
exhibit thereto or has been incorporated as an exhibit by reference in the
Registration Statement;
(xii)To the knowledge of such counsel, except as disclosed in
the Registration Statement or the Prospectus, as amended or supplemented,
no person or entity has the right to require the registration under the
Act of Common Units or other securities of the Partnership by reason of
the filing or effectiveness of the Registration Statement, which has not
been waived;
(xiii) Upon delivery of the certificates evidencing the Units
against payment therefor as provided in this Agreement, the Underwriters
will acquire the Units free of all adverse claims (as such term is defined
in Section 8-302 of the Uniform Commercial Code as in effect in the State
of Delaware (the "UCC"), assuming (i) the Underwriters are acting in good
faith, (ii) the Underwriters have no notice of any adverse claim (as such
term is used in Section 8-302 of the UCC) and (iii) the certificates
evidencing the Units are registered in the names of the Underwriters or
endorsed to the Underwriters or nominees of the Underwriters;
(xiv)To the knowledge of such counsel and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Kinder Morgan
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Entities or any of their subsidiaries is a party or of which any property
of the Kinder Morgan Entities or any of their subsidiaries is the subject
which, if determined adversely to the such Kinder Morgan Entity or
subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial position,
partners' capital or results of operations of any of the Kinder Morgan
Entities and their subsidiaries; and to the knowledge of such counsel, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(xv) This Agreement has been duly authorized, executed and
delivered by each of the Kinder Morgan Entities;
(xvi)The issue and sale of the Units being delivered at such
Time of Delivery and the compliance by the Kinder Morgan Entities with all
of the provisions of this Agreement and the consummation of the
transactions herein and therein contemplated will not (a) result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument filed as an exhibit to the Registration
Statement or filed as an exhibit to any document incorporated by reference
in the Registration Statement, (b) result in any violation of the
provisions of the Certificate of Incorporation, by-laws or other formation
document, as applicable, of any of the Kinder Morgan Entities, Mont
Belvieu, Heartland or Shell CO2, (c) breach or otherwise violate an
existing obligation of any of the Kinder Morgan Entities under any court
or administrative order, judgment or decree of which such counsel has
knowledge, or (d) violate any applicable provisions of the federal laws of
the United States, the laws of the State of New York, or the Delaware Act;
(xvii) (a) The statements set forth in the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1997 under the caption
"Item 1: Business-Regulation" and (b) the statements set forth in the
Prospectus under the captions "Material Federal Income Tax
Considerations", and under the caption "Underwriting", insofar as they
purport to describe the provisions of federal law, New York law and the
Delaware Act and documents referred to therein, in each case, are accurate
summaries and fairly and correctly present in all material respects the
information called for with respect to such matters; provided, however,
that such counsel's opinion need not cover any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Partnership by an Underwriter through Goldman, Sachs & Co.
expressly for use therein;
(xviii) The Units have been approved for listing on the New York
Stock Exchange, subject only to official notice of issuance;
(xix)None of the Kinder Morgan Entities is (a) a "holding
company" or a "subsidiary company" of a "holding company" or an
"affiliate" thereof, within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (b) an "Investment Company" or an
entity "controlled" by an "Investment Company", as such terms are defined
in the Investment Company Act;
(xx) The Registration Statement was declared effective under the
Act by the Commission as of the date of this Agreement and to the
knowledge of such counsel no order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or is pending, threatened or contemplated. Any
required filing of the Prospectus relating to the sale of the Units
pursuant to Rule 424(b) under the Act has been made in the manner and
within the time period required by such rule; and
(xxi)The Registration Statement and the Prospectus (including
any documents incorporated by reference in the Prospectus, when such
documents became effective or were filed with the Commission), as amended
or supplemented, comply in all material respects as to form with the
requirements of the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder (other than the financial
statements and related
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schedules and other financial data contained therein, as to which such
counsel need express no opinion).
Such counsel shall also deliver a letter to the effect that they have
participated in conferences with officers and other representatives of the
Partnership, representatives of the Partnership's accountants, representatives
of the Underwriters and counsel for the Underwriters, at which conferences the
contents of the Registration Statement and Prospectus and related matters were
discussed and, although such counsel is not passing on and does not assume any
responsibility for and shall not be deemed to have independently verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to in the
opinion in subsection (xvii) of this Section 7(c), and relying as to facts
necessary to the determination as to materiality, to the extent we may do so in
the exercise of our professional responsibility, upon statements of the officers
and other representatives of the Partnership, on the basis of the foregoing, no
facts have come to such counsel's attention that lead it to believe that, as of
its effective date, the Registration Statement or any further amendment thereto
made by the Partnership prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data contained therein, as
to which such counsel need not comment) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; or that, as of its
date, the Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Partnership prior to such Time of Delivery (other
than the financial statements and related schedules and other financial data
contained therein, as to which such counsel need not comment) contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; or that, as of such Time of
Delivery, either the Registration Statement or the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by the
Partnership to such Time of Delivery (other than the financial statements and
related schedules and other financial data contained therein, as to which such
counsel need express no opinion) contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
such counsel have no reason to believe that any documents incorporated by
reference in the Prospectus, when such documents became effective or were so
filed, as the case may be, contained, in the case of a registration statement
which became effective under the Act, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or, in the case of other documents
which were filed under the Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed, not
misleading; and they do not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a character required
to be filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or supplemented or
required to be described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by reference or
described as required.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than federal law, New York law
and the Delaware Act.
(d) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Price Waterhouse
L.L.P. shall have furnished to you a letter or letters, dated the respective
dates of delivery thereof, in form and substance reasonably satisfactory to you,
to the effect set forth in Annex I hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex I(a)
hereto and a draft of the form of letter to be delivered on the effective date
of any post-effective amendment to the Registration Statement and as of each
Time of Delivery is attached as Annex I(b) hereto);
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(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m. New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Arthur Andersen L.L.P.
shall have furnished to you a letter or letters dated the respective dates of
delivery thereof, in form and substance reasonably satisfactory to you, to the
effect set forth in to Annex I hereto (the executed copy of the letter delivered
prior to the execution of this Agreement is attached as Annex I(c) hereto and a
draft of the form of letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of each Time of
Delivery is attached as Annex I(d) hereto);
(f) (i) None of the Kinder Morgan Entities shall have sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus 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,
otherwise than as set forth or contemplated in the Prospectus, and (ii) since
the respective dates as of which information is given in the Prospectus there
shall not have been any material change in the capitalization or long-term debt
of the Partnership (or any of the other Kinder Morgan Entities) or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial position, unitholders' equity or results of
operations of the Partnership (or any of the other Kinder Morgan Entities)
otherwise than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is in the judgment of
the Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Units
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded to any of the Kinder Morgan Entities' debt
securities 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 that it has
under surveillance or review, with possible negative implications, its rating of
any of the Kinder Morgan Entities' debt securities;
(h) On or after the date hereof 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 or material
limitation in trading in the Partnership'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 authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this Clause (iv) in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Units being delivered at such Time of Delivery on the terms and
in the manner contemplated in the Prospectus;
(i) The Units to be sold by the Partnership and the Selling
Unitholders at such Time of Delivery shall have been approved for listing,
subject to official notice of issuance, on the New York Stock Exchange;
(j) The Kinder Morgan Entities and the Selling Unitholders shall have
complied with the provisions of Section 5(c) hereof with respect to the
furnishing of prospectuses on the New York Business Day next succeeding the date
of this Agreement; and
(k) The Kinder Morgan Entities shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of officers of the
General Partner, satisfactory to you as to the accuracy of the representations
and warranties of the Kinder Morgan Entities and as to the performance by the
Kinder Morgan Entities of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery, and as to such other matters as
you may reasonably request, and the Kinder Morgan Entities shall have furnished
or caused to be furnished certificates as to the matters set forth in
subsections (a) and (f) of this Section, and as to such other matters as you may
reasonably request.
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8. (a) Each of the Kinder Morgan Entities, jointly and severally,
will indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the 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
Preliminary Prospectus, the Registration Statement or the Prospectus, 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 each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Kinder Morgan Entities shall not be liable 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 any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Partnership by any Underwriter through
Goldman, Sachs & Co.
expressly for use therein.
(b) Each Selling Unitholder, severally and not jointly, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the 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
Preliminary Prospectus, the Registration Statement or the Prospectus, 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 any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Partnership by such Selling Unitholder expressly for use
therein; and will reimburse each Underwriter and the Partnership for any legal
or other expenses reasonably incurred in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that such Selling Unitholder shall not be liable 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 any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Partnership by any
Underwriter through Goldman, Sachs & Co. expressly for use therein.
(c) Each Underwriter will indemnify and hold harmless the Kinder
Morgan Entities and each Selling Unitholder against any losses, claims, damages
or liabilities to which the Kinder Morgan Entities or such Selling Unitholder
may become subject, under the 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 Preliminary Prospectus, the Registration Statement or the
Prospectus, 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 any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Partnership by such Underwriter through Goldman,
Sachs & Co. expressly for use therein; and will reimburse the Kinder Morgan
Entities and each Selling Unitholder for any legal or other expenses reasonably
incurred by the Kinder Morgan Entities or such Selling Unitholder in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of 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 under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not
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relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (which 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, the indemnifying party shall
not be liable to such indemnified party under such subsection 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.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above 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 benefits received by the Kinder Morgan Entities and the Selling
Unitholders on the one hand and the Underwriters on the other from the offering
of the Units. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (d) above, then each such
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Kinder Morgan Entities and
the Selling Unitholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Kinder Morgan Entities and the Selling Unitholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Units purchased under this Agreement
(before deducting expenses) received by the Kinder Morgan Entities and the
Selling Unitholders bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Units purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Kinder Morgan Entities or the Selling Unitholders on the one
hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Kinder Morgan Entities, each of the Selling
Unitholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (e) were determined by pro rata
allocation (even if the Underwriters 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 subsection (e). 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 in this
subsection (e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (e),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Units underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which 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 fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
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not guilty of such fraudulent misrepresentation. The Underwriters' obligations
in this subsection (e) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(f) The obligations of the Kinder Morgan Entities and the Selling
Unitholders under this Section 8 shall be in addition to any liability which the
Kinder Morgan Entities and the respective Selling Unitholders may otherwise have
and shall extend, upon the same terms and conditions, to each person, if any,
who controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the General Partner
and to each person, if any, who controls any of the Kinder Morgan Entities or
any Selling Unitholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Units which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Units on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Units,
then the Partnership and the Selling Unitholders shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Units on such terms. In the event
that, within the respective prescribed periods, you notify the Partnership and
the Selling Unitholders that you have so arranged for the purchase of such
Units, or the Partnership and the Selling Unitholders notify you that they have
so arranged for the purchase of such Units, you or the Partnership and the
Selling Unitholders shall have the right to postpone such Time of Delivery for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Partnership agrees to file promptly
any amendments to the Registration Statement or the Prospectus which in your
opinion may thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Units.
(b) If, after giving effect to any arrangements for the purchase of
the Units of a defaulting Underwriter or Underwriters by you and the Partnership
and the Selling Unitholders as provided in subsection (a) above, the aggregate
number of such Units which remains unpurchased does not exceed one-eleventh of
the aggregate number of all of the Units to be purchased at such Time of
Delivery, then the Partnership and the Selling Unitholders shall have the right
to require each non-defaulting Underwriter to purchase the number of Units which
such Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Units which such Underwriter agreed to purchase
hereunder) of the Units of such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Units of a defaulting Underwriter or Underwriters by you and the Partnership
and the Selling Unitholders as provided in subsection (a) above, the aggregate
number of such Units which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Units to be purchased at such Time of Delivery,
or if the Partnership and the Selling Unitholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Units of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Partnership and the Selling Unitholders to
sell the Optional Units) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Partnership or the Selling
Unitholders, except for the expenses to be borne by the Partnership and the
Selling Unitholders and the Underwriters as provided in Section 6 hereof and
\the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements,
representations, warranties and other statements of each of the
Kinder Morgan Entities, the Selling Unitholders and the several
Underwriters,
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as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or any
of the Kinder Morgan Entities, or any of the Selling Unitholders, or any officer
or director or controlling person of any of the Kinder Morgan Entities, or any
controlling person of any Selling Unitholder, and shall survive delivery of and
payment for the Units.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, or
if the Underwriters elect not to purchase the Units hereunder solely because one
or more of the conditions in Section 7(b), 7(h)(i), 7(h)(iii) or 7(h)(iv) have
not been satisfied, none of the Kinder Morgan Entities nor the Selling
Unitholders shall then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason any Units are
not delivered by or on behalf of the Partnership and the Selling Unitholders as
provided herein, the Kinder Morgan Entities will reimburse the Underwriters
through you for all out-of-pocket expenses approved in writing by you, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Units not so
delivered, but the Kinder Morgan Entities shall then be under no further
liability to any Underwriter in respect of the Units not so delivered except as
provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives; and in all dealings with any Selling Unitholder hereunder, you
and each of the Kinder Morgan Entities shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of such Selling Unitholder
made or given by any or all of the Attorneys-in-Fact for such Selling
Unitholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives at Goldman, Sachs & Co. at
85 Broad Street, New York, New York 10004; if to any Selling Unitholder shall be
delivered or sent by mail, telex or facsimile transmission to such Selling
Unitholder c/o the Attorneys-in-Fact at the address set forth in the Power of
Attorney and Custody Agreement; and if to any of the Kinder Morgan Entities
shall be delivered or sent by mail, telex or facsimile transmission to the
address of the Partnership set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(d) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire or telex constituting such Questionnaire, which address will be
supplied to the Partnership or the Selling Unitholders by you upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, each of the Kinder Morgan Entities and the Selling
Unitholders and, to the extent provided in Sections 8 and 10 hereof, the
officers and directors of the General Partner and each person who controls any
of the Kinder Morgan Entities, any Selling Unitholder or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Units from any Underwriter shall be deemed
a successor or assign by reason merely of such purchase.
14. 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.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
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If the foregoing is in accordance with your understanding, please sign and
return to us one for the Kinder Morgan Entities and for each of the
Representatives plus one for each counsel and the Custodian, counterparts
hereof, and upon the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall constitute a binding
agreement among each of the Underwriters, each of the Kinder Morgan Entities and
each of the Selling Unitholders. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Partnership and the Selling Unitholders for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Unitholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Unitholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
KINDER MORGAN ENERGY PARTNERS, L.P.
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
---------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
KINDER MORGAN OPERATING L.P. "A"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
---------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
KINDER MORGAN OPERATING L.P. "B"
By: Kinder Morgan G.P., Inc.
By:/s/ Richard D. Kinder
---------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
26
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KINDER MORGAN OPERATING L.P. "C"
By: Kinder Morgan G.P., Inc.
By:/s/ Richard D. Kinder
---------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
KINDER MORGAN OPERATING L.P. "D"
By: Kinder Morgan G.P., Inc.
By:/s/ Richard D. Kinder
---------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
KINDER MORGAN G.P., INC.
By: Kinder Morgan G.P., Inc.
By:/s/ Richard D. Kinder
---------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
SFPP, L.P.
By: Kinder Morgan Operating L.P., "D"
By:/s/ Richard D. Kinder
---------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
27
<PAGE>
KINDER MORGAN CO2, L.L.C.
By: Kinder Morgan Operating L.P.,
"A"
By: Kinder Morgan Inc.
By:/s/ Richard D. Kinder
---------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
KINDER MORGAN NATURAL GAS LIQUIDS
CORPORATION
By:/s/ Richard D. Kinder
---------------------------
Name: Richard D.Kinder
Title:President
CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
BANK CALUMET, N.A.
ANTHONY HANES (C/O CAPITAL RESEARCH CO.)
MORGAN STANLEY TRUST COMPANY
By:/s/ William V. Morgan
---------------------------
Name:William V. Morgan
As Attorney-in-Fact acting on behalf of each of
the Selling Unitholders named in Schedule II
to this Agreement.
Goldman Sachs & Co.
Paine Webber Incorporated
Prudential Securities Incorporated
28
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Dain Rauscher Wessels
Hoard Weil Labouisse
Friedrichs Incorporated
Wheat First Union
By:/s/ Goldman, Sachs & Co.
-------------------------
(Goldman, Sachs & Co.)
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SCHEDULE I
Underwriter Total Number of Firm Number of Optional
Units to be Purchased Units to be Purchased
if Maximum Option
Exercised
Goldman, Sachs & Co 2,100,000 315,000
PaineWebber Incorporated 2,100,000 315,000
Prudential Securities Incorporated 700,000 105,000
Dain Rauscher Wessels 700,000 105,000
Howard Weil Labouisse Friedrichs 700,000 105,000
Incorporated
Wheat First Union 700,000 105,000
__________ _________
Total 7,000,000 1,050,000
SCHEDULE II
Issuer and Selling Unitholders Total Number of Firm Number of Optional
Units to be Sold Units to be Sold if
Maximum Option
Exercised
The Partnership 6,070,578 1,050,000
The Selling Unitholders:
California Public Employees'
Retirement System 594,790 ____
Bank Calumet, N.A. 51,720 ____
Anthony Hanes (c/o Capital 155,162 ____
Research Co.)
Morgan Stanley Trust Company 127,750 ____
Total 7,000,000 1,050,000
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SCHEDULE III
List of subsidiaries (as such term is defined in the rules and regulations
of the Commission under the Act and the Exchange Act) of the Partnership or
other entities in which the Partnership, any of the Operating Partnerships or
SFPP has an equity ownership interest of at least 50%:
Heartland Partnership
Kinder Morgan CO2, L.L.C.
Kinder Morgan Natural Gas Liquids Corporation
Kinder Morgan Operating L.P. "A"
Kinder Morgan Operating L.P. "B"
Kinder Morgan Operating L.P. "C"
Kinder Morgan Operating L.P. "D"
Mont Belvieu Associates
SFPP, L.P.
31
