UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE PARTNERSHIP OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
KINDER MORGAN ENERGY PARTNERS, L. P.
5.125% SENIOR NOTE DUE 2014
NO. 1 U.S.$500,000,000
CUSIP No. 494550 AS 5
KINDER MORGAN ENERGY PARTNERS, L.P., a Delaware limited partnership (herein
called the "Partnership," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to CEDE & CO., or registered assigns, the principal sum of Five Hundred Million
United States Dollars (U.S.$500,000,000) on November 15, 2014, and to pay
interest thereon from November 12, 2004, or from the most recent Interest
Payment Date to which interest has been paid, semi-annually on May 15 and
November 15 in each year, commencing May 15, 2005, at the rate of 5.125% per
annum, until the principal hereof is paid. The amount of interest payable for
any period shall be computed on the basis of twelve 30-day months and a 360-day
year. The amount of interest payable for any partial period shall be computed on
the basis of a 360-day year of twelve 30-day months and the days elapsed in any
partial month. In the event that any date on which interest is payable on this
Security is not a Business Day, then a payment of the interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay) with the
same force and effect as if made on the date the payment was originally payable.
A "Business Day" shall mean, when used with respect to any Place of Payment,
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by
law, executive order or regulation to close. The interest so payable, and
punctually paid, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the May 1 or November 1 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid shall forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice of which shall be
given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange or automated quotation system on
which the Securities of this series may be listed or traded, and upon such
notice as may be required by such exchange or automated quotation system, all as
more fully provided in such Indenture.
Payment of the principal of (and premium, if any) and any such interest on
this Security will be made by transfer of immediately available funds to a bank
account designated by the Holder in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly
executed.
Dated: November ___, 2004
KINDER MORGAN ENERGY PARTNERS, L.P.,
By: Kinder Morgan G.P., Inc.,
its general partner
By: Kinder Morgan Management, LLC,
its delegate
By:
--------------------------------
C. Park Shaper
Executive Vice President and
Chief Executive Officer
This is one of the Securities designated therein referred to in the
within-mentioned Indenture.
WACHOVIA BANK, NATIONAL ASSOCIATION,
As Trustee
By:
--------------------------------
Authorized Signatory
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This Security is one of a duly authorized issue of securities of the
Partnership (the "Securities"), issued and to be issued in one or more series
under an Indenture dated as of January 31, 2003 relating to senior debt
Securities (the "Indenture"), between the Partnership and Wachovia Bank,
National Association, as Trustee (the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Partnership, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. As
provided in the Indenture, the Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking, purchase or analogous funds, if any, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided or permitted. This Security is one of the series designated on the face
hereof.
The Securities will be redeemable, at the option of the Partnership, at any
time in whole, or from time to time in part, upon not less than 30 and not more
than 60 days notice mailed to each Holder of the Securities to be redeemed at
the Holder's address appearing in the Security Register, at a price equal to
100% of the principal amount of the Securities to be redeemed plus accrued
interest to the Redemption Date, subject to the right of Holders of record on
the relevant Regular Record Date to receive interest due on an Interest Payment
Date that is on or prior to the Redemption Date, plus a make-whole premium, if
any. In no event will the Redemption Price ever be less than 100% of the
principal amount of the Securities being redeemed plus accrued interest to the
Redemption Date.
The amount of the make-whole premium on any Security, or portion of a
Security, to be redeemed will be equal to the excess, if any, of:
(1) the sum of the present values, calculated as of the Redemption Date,
of:
o each interest payment that, but for the redemption, would have
been payable on the Security, or portion of a Security, being
redeemed on each Interest Payment Date occurring after the
Redemption Date, excluding any accrued interest for the period
prior to the Redemption Date; and
o the principal amount that, but for the redemption, would have
been payable at the Stated Maturity of the Security, or portion
of a Security, being redeemed;
over
(2) the principal amount of the Security, or portion of a Security, being
redeemed.
The present value of interest and principal payments referred to in clause
(1) above will be determined in accordance with generally accepted principles of
financial analysis. The present values will be calculated by discounting the
amount of each payment of interest or principal from
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the date that each such payment would have been payable, but for the redemption,
to the Redemption Date at a discount rate equal to the Treasury Yield, as
defined below, plus 0.15%.
The make-whole premium will be calculated by an independent investment
banking institution of national standing appointed by the Partnership. If the
Partnership fails to make that appointment at least 30 business days prior to
the Redemption Date, or if the institution so appointed is unwilling or unable
to make the calculation, Goldman, Sachs & Co. will make the calculation. If
Goldman, Sachs & Co. is unwilling or unable to make the calculation, an
independent investment banking institution of national standing appointed by the
Trustee will make the calculation.
For purposes of determining the make-whole premium, Treasury Yield refers
to an annual rate of interest equal to the weekly average yield to maturity of
United States Treasury Securities that have a constant maturity that corresponds
to the remaining term to maturity of the Securities to be redeemed, calculated
to the nearer 1/12 of a year (the "Remaining Term"). The Treasury Yield will be
determined as of the third business day immediately preceding the applicable
Redemption Date.
The weekly average yields of United States Treasury Notes will be
determined by reference to the most recent statistical release published by the
Federal Reserve Bank of New York and designated "H.15(519) Selected interest
Rates" or any successor release (the "H.15 Statistical Release"). If the H.15
Statistical Release sets forth a weekly average yield for United States Treasury
Notes having a constant maturity that is the same as the Remaining Term of the
Securities to be redeemed, then the Treasury Yield will be equal to that weekly
average yield. In all other cases, the Treasury Yield will be calculated by
interpolation, on a straight-line basis, between the weekly average yields on
the United States Treasury Notes that have a constant maturity closest to and
greater than the Remaining Term of the Securities to be redeemed and the United
States Treasury Notes that have a constant maturity closest to and less than the
Remaining Term, in each case as set forth in the H.15 Statistical Release. Any
weekly average yields so calculated by interpolation will be rounded to the
nearer 0.01%, with any figure of 0.0050% or more being rounded upward. If weekly
average yields for United States Treasury Notes are not available in the H.15
Statistical Release or otherwise, then the Treasury Yield will be calculated by
interpolation of comparable rates selected by the independent investment banking
institution.
If less than all of the Securities are to be redeemed, the Trustee will
select the Securities to be redeemed by a method that the Trustee deems fair and
appropriate. The Trustee may select for redemption Securities and portions of
Securities in amounts of U.S.$1,000 or whole multiples of U.S.$1,000.
In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of, and any premium and accrued but
unpaid interest on, the Securities
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of this series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Partnership and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Partnership and the Trustee with
the consent of not less than the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series to be affected (voting as one
class). The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Outstanding Securities of all
affected series (voting as one class), on behalf of the Holders of all
Securities of such series, to waive compliance by the Partnership with certain
provisions of the Indenture. The Indenture permits, with certain exceptions as
therein provided, the Holders of a majority in principal amount of Securities of
any series then Outstanding to waive past defaults under the Indenture with
respect to such series and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 90
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall, without the consent of the Holder, alter or impair the
obligation of the Partnership, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Security at the times,
place(s) and rate, and in the coin or currency, herein prescribed.
The Notes shall be entitled to the benefits of the Indenture, including the
covenants and agreements of the Partnership set forth therein, except to the
extent expressly otherwise set forth herein.
This Global Security or portion hereof may not be exchanged for Definitive
Securities of this series except in the limited circumstances provided in the
Indenture.
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The Holders of beneficial interests in this Global Security will not be
entitled to receive physical delivery of Definitive Securities except as
described in the Indenture and will not be considered the Holders thereof for
any purpose under the Indenture.
The Securities of this series are issuable only in registered form without
coupons in denominations of U.S.$1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Partnership may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Partnership, the Trustee and any agent of the Partnership or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue, and neither the
Partnership, the Trustee nor any such agent shall be affected by notice to the
contrary.
Obligations of the Partnership under the Indenture and the Securities
thereunder, including this Security, are non-recourse to Kinder Morgan
Management, LLC ("Management") and its Affiliates (other than the Partnership
and Kinder Morgan G.P., Inc. (the "General Partner")), and payable only out of
cash flow and assets of the Partnership and the General Partner. The Trustee,
and each Holder of a Security by its acceptance hereof, will be deemed to have
agreed in the Indenture that (1) neither Management nor its assets (nor any of
its Affiliates other than the Partnership and the General Partner, nor their
respective assets) shall be liable for any of the obligations of the Partnership
under the Indenture or such Securities, including this Security, and (2) neither
Management nor any director, officer, employee, stockholder or unitholder, as
such, of the Partnership, the Trustee, the General Partner, Management or any
Affiliate of any of the foregoing entities shall have any personal liability in
respect of the obligations of the Partnership under the Indenture or such
Securities by reason of his, her or its status.
The Indenture contains provisions that relieve the Partnership from the
obligation to comply with certain restrictive covenants in the Indenture and for
satisfaction and discharge at any time of the entire indebtedness upon
compliance by the Partnership with certain conditions set forth in the
Indenture.
This Security shall be governed by and construed in accordance with the
laws of the State of New York.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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