KINDER MORGAN MANAGEMENT, LLC
KINDER MORGAN G.P., INC.
OFFICERS' CERTIFICATE
ESTABLISHING SERIES OF SECURITIES UNDER
INDENTURE PURSUANT TO BOARD RESOLUTION
Each of the undersigned, C. Park Shaper and Kimberly J. Allen, the
Executive Vice President and Chief Financial Officer and the Vice President and
Treasurer, respectively, of (i) Kinder Morgan Management, LLC (the "Company"), a
Delaware limited liability company and the delegate of Kinder Morgan G.P., Inc.
and (ii) Kinder Morgan G.P., Inc., a Delaware corporation and the general
partner of Kinder Morgan Energy Partners, L.P., on behalf of Kinder Morgan
Energy Partners, L.P. (the "Partnership"), does hereby establish the terms of a
certain series of senior debt Securities of the Partnership under the Indenture
relating to senior debt Securities, dated as of January 31, 2003 (the
"Indenture"), between the Partnership and Wachovia Bank, National Association,
as Trustee, pursuant to resolutions adopted by the Board of Directors of the
Company by unanimous consent on November 26, 2002 and in accordance with Section
301 of the Indenture, as follows:
1. The title of the Securities shall be "5.125% Senior Notes due 2014"
(the "Notes");
2. The aggregate principal amount of the Notes which initially may be
authenticated and delivered under the Indenture shall be limited initially to a
maximum of $500,000,000, except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes
pursuant to the terms of the Indenture, and except that any additional principal
amount of the Notes may be issued in the future without the consent of Holders
of the Notes so long as such additional principal amount of Notes are
authenticated as required by the Indenture;
3. The Notes shall be issued on November 12, 2004, and the principal of
the Notes shall be payable on November 15, 2014; the Notes will not be entitled
to the benefit of a sinking fund;
4. The Notes shall bear interest at the rate of 5.125% per annum, which
interest shall accrue from November 12, 2004, or from the most recent Interest
Payment Date to which interest has been paid, which dates shall be May 15 and
November 15 of each year, and such interest shall be payable semi-annually in
arrears on May 15 and November 15 of each year, commencing May 15, 2005, to
holders of record at the close of business on the May 1 or November 1,
respectively, next preceding each such Interest Payment Date;
5. The principal of, premium, if any, and interest on, the Notes shall be
payable at the office or agency of the Partnership maintained for that purpose
in the Borough of Manhattan, New York, New York; provided, however, that at the
option of the Partnership, payment of interest may be made by check mailed to
the address of the person entitled thereto as such address shall appear in the
Security Register;
6. Wachovia Bank, National Association is appointed as the Trustee for the
Notes, and Wachovia Bank, National Association, and any other banking
institution hereafter selected by the officers of the Company, on behalf of the
Partnership, are appointed agents of the Partnership (a) where the Notes may be
presented for registration of transfer or exchange, (b) where notices and
demands to or upon the Partnership in respect of the Notes or the Indenture may
be made or served and (c) where the Notes may be presented for payment of
principal and interest;
7. The Notes will be redeemable, at the Partnership's option, 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 Notes 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 Notes to be redeemed plus accrued interest to the
Redemption Date, subject to the right of Holders of record on the relevant
Record Date to receive interest due on an Interest Payment Date that is on or
prior to the Redemption Date, 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
Notes being redeemed plus accrued interest to the Redemption Date.
The amount of the make-whole premium on any Note, or portion of a Note, 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 Note, or portion of a Note, 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 Note, or portion of a
Note, being redeemed;
over
(2) the principal amount of the Note, or portion of a Note, 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 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, the financial institution named in the Notes will make
the calculation. If the financial institution named in the Notes is unwilling or
unable to make the calculation, an independent investment banking institution of
national standing appointed by the Trustee will make the calculation.
-2-
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 Notes that have a constant maturity that corresponds to
the remaining term to maturity of the Notes 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
Notes 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 Notes 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 Notes are to be redeemed, the Trustee will select
the Notes to be redeemed by a method that the Trustee deems fair and
appropriate. The Trustee may select for redemption Notes and portions of Notes
in amounts of $1,000 or whole multiples of $1,000.
8. Payment of principal of, and interest on, the Notes shall be without
deduction for taxes, assessments or governmental charges paid by Holders of the
Notes;
9. The Notes are approved in the form attached hereto as Exhibit A, shall
be issued upon original issuance in whole in the form of a single book-entry
Global Security, and the Depositary shall be The Depository Trust Company; and
10. 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 provided herein or in the Notes.
Any initially capitalized terms not otherwise defined herein shall have
the meanings ascribed to such terms in the Indenture.
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IN WITNESS WHEREOF, each of the undersigned has hereunto signed his
or her name this 12th day of November, 2004.
/s/ C. Park Shaper
----------------------------
C. Park Shaper
Executive Vice President
and Chief Financial Officer
/s/ Kimberly J. Allen
----------------------------
Kimberly J. Allen
Vice President and Treasurer