Document:

EMPLOYMENT AGREEMENT

      This Agreement ("Agreement") is entered into this 20th day of April, 2000
(the "Effective Date") by and among Kinder Morgan, Inc., a Kansas corporation
("KMI"), Kinder Morgan G.P., Inc., a Delaware corporation ("KMGP"), and Michael
C. Morgan ("Employee").

      WHEREAS, the parties acknowledge wherever KMI is used in this Agreement it
is intended to refer to both KMI and KMGP;

      WHEREAS, the parties acknowledge Employee is an officer of
KMI and KMGP;

      WHEREAS, the parties wish to provide for certain conditions
of employment as negotiated relating to continued employment;

      WHEREAS, the parties negotiated certain terms to extend past employment,
including, without limitation, terms relating to a non-compete obligation;

      WHEREAS, Employee agrees that ample consideration was provided to ensure
enforcement of certain provisions and the waiver of certain rights;

      NOW THEREFORE, in consideration of the foregoing premises and the
following promises, the parties agree as follows:

     1.   Intent of the Parties. It is the intent of the parties that Employee's
rights under the Kinder Morgan Energy Partners, L.P. Executive Compensation Plan
shall be waived and forfeited upon execution of this Agreement.

     2.    Definitions.

          (a)   Termination for Cause.  "Termination for Cause" shall mean
      termination of Employee's employment by KMI because of
      (i)Employee's  conviction of a felony which in the
      reasonable, good faith opinion of the Compensation Committee
      of the Board of Directors of Kinder Morgan, Inc. would have
      an adverse impact on the reputation or business of KMI or
      any of its affiliates; (ii) subject to the notice
      provision's set forth below in this Section 2(a), Employee's
      willful refusal without proper legal cause to perform his
      duties and responsibilities; (iii) Employee's willfully
      engaging in conduct which Employee has reason to know is
      materially injurious to KMI or any of its affiliates; or
      (iv) subject to the notice and counseling provisions set
      forth below in this Section 2(a), failure to meet clearly
      established and reasonable performance objectives or
      standards established by KMI for Employee's job position.
      Such termination shall be effected by notice thereof
      delivered by KMI to Employee and shall be effective as of
      the date of such notice; provided, however, that if such
      termination is pursuant to clause (ii) above and within
      seven (7) days following the date of such notice Employee
      shall cease such refusal and shall use his or her best
      efforts to perform such duties and responsibilities, the
      termination shall not be effective; provided further, that
      termination pursuant to clause (iv) above shall not become
      effective unless Employee has been counseled about such
      unacceptable performance and coached to improve performance
      for at least forty-five (45) days; and, provided further,
      that KMI shall consult with Employee

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and provide an opportunity for Employee to be heard prior to effecting any
termination under this section, and KMI's failure to do so shall constitute
Involuntary Termination and not Termination for Cause.

          (b)   Change of Duties. A "Change of Duties" means;

               (i) A significant reduction in the nature, scope of authority or
          duties of Employee (without the written consent of Employee) from
          those applicable to him on the Effective Date of this Agreement;

               (ii) Any reduction in Employee's annual base salary, without the
          consent of Employee, unless it is part of a program to reduce salaries
          for all similarly situated employees;

               (iii) Receipt of employee benefits (including but not limited to
          medical, dental, life insurance, accidental death and dismemberment;
          and long term disability plans) that are materially inconsistent with
          and inferior to the employee benefits provided by KMI to employees
          with comparable duties; or

               (iv)  A change in the location of Employee's principal place
          of employment by KMI by more than 50 miles from the location where he
          was principally employed on the Effective Date of this Agreement,
          without Employee's consent.

          (c)   Pro-Rata Portion. "Pro-Rata Portion" is the amount
      determined by the formula: the compensation payment
      received by Employee pursuant to section 4(b) hereof,
      multiplied by the Pro-Rata Percentage.  The Pro-Rata
      Percentage is defined as: 1460 minus the number of calendar
      days from Effective Date of this Agreement up to the date of
      a Non-Competition Violation, as defined in Section 5(d)
      below, not to exceed 1460 days, divided by 1460.

          (d)   Confidential Information.  "Confidential Information" shall
      include all information, the use of which by persons or
      entities other than KMI or its employees, agents or
      representatives would be detrimental to KMI's business
      interests, relating to (i) KMI's Customers, providers,
      suppliers, and other business affiliates; (ii) KMI's
      policies, practices, operating information, financial
      information, business plans, and market approaches; and
      (iii) other information, techniques or approaches used by
      KMI and not generally known or applied in KMI's industry.
      KMI believes that some or all of this information
      constitutes trade secrets; however, the Confidential
      Information covered in this Agreement need not satisfy the
      legal definition or requirements of a "trade secret" to be
      protected from disclosure hereunder.  Confidential
      Information shall exclude any information that is generally
      known in KMI's industry and information known to any future
      employer of Employee and any information disclosed by KMI in
      public filings, including, without limitation, filings with
      the Securities and Exchange Commission and the Federal
      Energy Regulatory Commission.

          (e)   Customer. "Customer" shall include any person or entity to whom
      during the Term of this Agreement, services are being sold by KMI, and any
      person or

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      entity with whom, during the Term of this Agreement, KMI has established a
      strategic marketing alliance.

          (f)   He, him, himself, his. "He," "him," "himself" and "his" when
      used herein shall be synonymous with "she," "her," "herself," and "her,"
      as applicable.

          (g)   Involuntary Termination.  "Involuntary Termination" means
      (i) termination of Employee's employment at the behest of
      KMI other than a Termination for Cause; (ii) Employee's
      resignation on or before thirty (30) days following receipt
      by Employee of a notice of a Change of Duties; or (iii) a
      termination which under the terms of the last clause of
      Section 2(a) is not a Termination for Cause.  "Involuntary
      Termination" does not include (i) Termination for Cause;
      (ii) termination of Employee's employment due to the death
      of Employee; (iii) termination of Employee's employment due
      to Employee's disability under circumstances entitling him
      to benefits under KMI's long term disability plan; (iv) or
      any change of employer due to transfer of Employee's
      employment to a successor company that is a wholly owned KMI
      subsidiary or affiliate and/or any change of employer due to
      transfer of Employee's employment to a purchaser of or
      successor to KMI.

          (h)   KMI. "KMI" means collectively Kinder Morgan, Inc., a Kansas
      corporation, Kinder Morgan G.P., Inc., their successors and assigns, and
      their divisions and affiliates. For purposes of this Agreement, the term
      "affiliates" shall have the same definition as the term "affiliated group"
      in Section 1504(a) of the Internal Revenue Code of 1986, as amended from
      time to time.

          (i)   Welfare Benefit Coverages. "Welfare Benefit Coverages" shall
      mean the medical, dental, life insurance, long term disability and
      accidental death and dismemberment coverages provided by KMI to its active
      employees.

       3. Term of This Agreement. The term of this Agreement shall be four (4)
years from the Effective Date of this Agreement. It is expressly understood and
agreed that this Agreement shall terminate and be of no further force or effect
at the end of the initial four (4) year term.

       4. KMI's Promises. In consideration of Employee's promises, KMI hereby
agrees as follows:

          (a)   Salary. Employee shall receive a base salary of two hundred
      thousand dollars ($200,000) annually. Increases may occur at the behest of
      the senior management of the Company if approved by the Compensation
      Committee of the Board. Salary shall be continued only if Employee's
      employment continues.

          (b)   Compensation Payment. In consideration of the obligations of
      Employee set forth in Section 5(d) hereof and for waiving all rights under
      the Kinder Morgan Energy Partners, L.P. Executive Compensation Plan,
      Kinder Morgan, Inc. shall cause Kinder Morgan G.P., Inc., on behalf of
      Kinder Morgan Energy Partners, L.P., to

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     pay Employee a lump sum payment of seven million, ten thousand
     dollars ($7,010,000.00) within three (3) days of execution of
     this Agreement.   The parties acknowledge that Employee and
     Kinder Morgan Energy Partners, L.P. have executed a termination
     and settlement of the grant agreement evidencing Employee's grant
     under the Kinder Morgan Energy Partners, L.P. Executive
     Compensation Plan.

          (c)  Stock Options. Kinder Morgan, Inc. will provide Employee a
      grant of 150,000 stock options priced at $33.125, the closing price of
      Kinder Morgan, Inc.'s common stock on the New York Stock Exchange on April
      20, 2000. The terms and conditions are specified in the Option Agreement
      (Exhibit B).

          (d)  Bonus. Employee will be eligible for any applicable incentive
      compensation plan of KMI or its predecessors, at the same level as other
      senior officers.

          (e)   Directors and Officers Insurance. As long as Employee is an
      officer or director of either Kinder Morgan, Inc. or any of its
      affiliates, KMI will provide director and officer liability coverage to
      Employee on the same terms as it provides to other officers and directors.

          (f)   Bridging. KMI will provide for bridging of service for eligible
      employees in accordance with approved plan documents in effect on the
      Effective Date of Employee's Involuntary Termination.

          (g)   Condition to Receipt of Benefits Listed in This Paragraph 4. As
      a condition of receipt of any benefit listed in this Paragraph 4, Employee
      shall execute Exhibit A, Exhibit B and be subject to all promises provided
      in Section 5(d) of this Agreement. Exhibit A and Exhibit B shall be
      executed upon execution of this Agreement.

      5. Employee's Promises.

          (a)   Confidential Information. Employee shall not, while employed by
      KMI or at any time thereafter, directly or indirectly, (i) use or apply
      any Confidential Information for unauthorized purposes, alone or with any
      other person or entity; or (ii) disclose or provide any Confidential
      Information to any person or entity not authorized by KMI to receive such
      Confidential Information.

          (b)   Non-Disparagement Agreement. Employee specifically agrees that
      he will not in any way disparage KMI, its officers, directors, employees,
      consultants, agents, or business operations or decisions; provided,
      however, that Employee shall not be held in breach of this provision
      should Employee testify pursuant to subpoena under oath and give testimony
      that KMI considers to be disparaging.

          (c)   Non-Solicitation of KMI Employees.  Employee agrees that,
      for the term of the Agreement from the date of termination
      of employment hereunder, he will not encourage, entice, or
      otherwise solicit any employee of KMI or any of its
      affiliates or subsidiaries, or aid any third party to
      encourage, entice or solicit any employee of KMI, to leave
      employment with KMI in order to accept employment
      elsewhere.  For purposes

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      of this paragraph, "employment elsewhere" shall include any relationship
      of employer/employee and any relationship of principal/independent
      contractor.

          (d)   Non-Competition.  Employee acknowledges that; 1) KMI and its
      affiliates are engaged in the business (the "Business")of
      owning and/or operating integrated natural gas assets,
      products and bulk terminals, refined products, natural gas,
      natural gas liquids and carbon dioxide pipelines,
      electricity generating assets and other midstream energy
      assets; 2) the Business is conducted throughout the United
      States; 3) his work for KMI gives or gave him access to
      proprietary information and trade secrets of and
      confidential information concerning KMI, and 4) the
      agreements and covenants contained in this provision are
      essential to protect the Business and the trade secrets,
      confidential and proprietary information and other
      legitimate interests of KMI.  Accordingly, Employee
      covenants and agrees as follows:

               (i)   Employee agrees that for a period of four (4) years
           following the Effective Date of this Agreement
           regardless of whether Employee remains employed by KMI,
           Employee, other than on behalf of KMI, will not engage
           in any conduct, line of business or activity which is
           the same as or substantially similar to any conduct,
           activity or line of business conducted by KMI or their
           affiliates in which Employee was or is engaged in
           during his employment by KMI (each such line of
           business or activity being an "Exclusive Activity"), in
           any geographic area in which Company conducts such
           Exclusive Activities.

               (ii)  The parties stipulate and agree that the terms and
           covenants contained in this provision are fair and reasonable in
           all respects, including the time period and
           geographical coverage and that these restrictions are
           designed for the reasonable protection of the business
           of KMI. If, at the time of enforcement of any of these
           provisions, a court holds that the restrictions stated
           herein are unreasonable under the circumstances then
           existing, the parties hereto agree that the maximum
           period, scope or geographical area reasonable under
           such circumstances will be substituted for the stated
           period, scope or area.  In such event KMI and Employee
           hereby specifically request a trial court presented
           with this Agreement for enforcement to reform it as to
           time, geographic area or scope of activities prohibited
           and to enforce this Agreement as reformed.

               (iii)  In the event KMI determines that Employee has violated the
           provisions of this Section 5(d), KMI agrees to provide Employee
           written notice of such violation. If Employee does not cease the
           conduct prohibited by this Section 5(d) and cure the impact of such
           conduct on KMI within 30 days after receipt of written notice from
           KMI, a "Non-Competition Violation" shall be deemed to have occurred
           at the end of such 30 day period, and the provisions of Section 7
           shall apply.

               (iv) KMI hereby waives any rights under, and Employee shall
           not be deemed to have violated, the provisions of this Section 5(d)
           with respect to any conduct or activity of Employee if Employee gives
           KMI 30 days written

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           notice prior to engaging in such conduct or activity, and
           KMI does not object to such conduct or activity in writing within the
           30 day period following notice from Employee.

          (e)   Section 5 shall be enforceable only to the extent either Richard
      D. Kinder or William V. Morgan serves as Chief Executive Officer of Kinder
      Morgan, Inc. or its successor.

     6. Effects of Termination. During the term of this Agreement, a termination
of Employee's employment for any of the following reasons shall have the effects
set forth below:

          (a)   Termination is for Cause. If the Employee's employment is
      terminated by a Termination for Cause:

                     (i)  subject to Section 7 below, Employee shall be entitled
                to retain the all payments and benefits made under Sections 4(b)
                hereof;

                     (ii) Employee shall retain the stock options granted in
                accordance with Section 4(c) hereof;

                     (iii) Employee shall not be eligible for severance payments
                under KMI's severance policy; and

                      (iv) all benefits otherwise payable under Sections 4(a)
                and 4(d) hereof shall cease.

          (b)   Termination for Change of Duties or Involuntary Termination. If
      the Employee's employment is terminated by a Termination for Change of
      Duties or an Involuntary Termination:

                     (i)  subject to Section 7 below, Employee shall be entitled
                to retain all payments and benefits made under Sections 4(b)
                hereof;

                     (ii) Employee shall retain the stock options granted in
                accordance with Section 4(c) hereof;

                     (iii)Employee shall be eligible for severance consistent
                with KMI's severance policy; and

                     (iv) all benefits otherwise payable under Sections 4(a) and
                4(d) hereof shall cease.

          (c)   Termination for Death, Disability ,Retirement or Resignation. If
      the Employee's employment is terminated due to the death, disability,
      retirement or resignation of Employee:

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                     (i)  subject to Section 7 below, Employee shall be entitled
                to retain all payments and benefits made under Sections 4(b)
                hereof;

                     (ii) Employee shall retain the stock options granted in
                accordance with Section 4(c) hereof; and

                     (iii) All other payments and benefits relating to
                Employee's employment shall cease upon last day of employment
                other than benefits which generally continue for all KMI
                employees after termination of employment under the terms of
                KMI's benefit plans.

     7. Violation of Non-Competition; Payment of Pro-Rata Portion. Within
three business days following a Non-Competition Violation which occurs during
the term of this Agreement,, Employee shall pay to KMI an amount in U.S. dollars
equal to the Pro-Rata Portion, calculated in accordance with Section 2(c)
hereof.

     8. Adequacy of Consideration. By executing this Agreement, KMI and Employee
acknowledges the receipt and sufficiency of the consideration provided by the
other in conjunction with executing this Agreement. Each acknowledges and
confirms to the other that the consideration provided by the other is good and
valuable consideration legally supportive of each party's respective rights,
duties and obligations hereunder. By executing this Agreement, KMI and Employee
shall be estopped from raising and hereby expressly waive any defense regarding
the receipt and/or legal sufficiency of the consideration provided by one to the
other with respect to this Agreement.

     9. Nonassignability. This Agreement shall inure to the benefit of, and be
binding upon, Employee and Employee's personal or legal representatives,
employees, administrators, successors, heirs, distributees, devisees and
legatees, and KMI, its successors and assignees, provided, however, that neither
KMI nor Employee may assign any of Employee's or its rights or benefits
hereunder without the prior written consent of the other.

     10. No Attachment. Except as required by law, the right to receive payments
under this Agreement shall not be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void ab initio and of no effect.

     11. Arbitration. The parties agree that any dispute regarding the
interpretation or breach of any term of this Agreement shall be resolved through
arbitration pursuant to the guidelines set forth by the American Arbitration
Association and that any attempt by either party to bring a court action
concerning this Agreement shall be subject to dismissal for lack of jurisdiction
at the request of the other party. The arbitration and all related activities
shall occur in Houston, Texas. To the extent that either party should initiate
action to enforce this

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Agreement, the party prevailing in the action for breach shall be entitled to
recover its attorney fees and costs incurred in the prosecution or defense of
said action.

     12. Headings. The headings of sections and paragraphs herein are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.

     13. Controlling Law. This Agreement shall be governed and construed in
accordance with the laws of Texas.

     14. Entire Agreement. This document constitutes the entire agreement of the
parties on the subject matters addressed herein and may not be expanded or
except by express written agreement executed by both.

     15. Counterparts. This Agreement may be executed in as many counterparts as
may be deemed necessary and convenient, and by the different parties on separate
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.

     16. Effective Date. The Effective Date of this Agreement shall be the date
provided at the top of this Agreement.

KINDER MORGAN, INC. and KINDER MORGAN G.P., INC.

By /s/ Joseph Listengart
   ---------------------------------------------
   Title: Vice President

Witness:  /s/ Andre Massey
          ---------------------------------------

EMPLOYEE

     /s/ Michael C. Morgan
------------------------------------------------
Name:  Michael C. Morgan

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<PAGE>

      In connection with the Employment Agreement (the "Agreement") dated April
20, 2000, by and among Michael C. Morgan, Kinder Morgan, Inc. and Kinder Morgan
G.P., Inc. (collectively ("KMI"), Employee for himself and his representatives,
heirs, and assigns, hereby releases and discharges KMI, any parent, sister or
subsidiary company, and any present or former shareholders, officers, directors,
employees, agents, representatives, legal representatives, accountants,
successors, and assigns, , Richard Kinder, and William Morgan, from all claims,
demands, and actions of any nature, known or unknown, in any manner arising out
of or involving any aspect of his rights under the Kinder Morgan Energy
Partners, L.P. Executive Compensation Plan and any agreement executed in
connection therewith. This release includes any and all claims concerning
attorney fees, costs, and any and all other expenses related to the claims
released herein. This release does not include claims for breach of the
Agreement, indemnification, coverage or defense under any applicable directors
and officers' insurance policy or vested employee benefits.

EMPLOYEE:

    /s/ Michael C. Morgan
----------------------------------------
Employee Signature

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                               KINDER MORGAN, INC.

                       NONQUALIFIED STOCK OPTION AGREEMENT
                                     For the
                   1994 KINDER MORGAN LONG TERM INCENTIVE PLAN

      This   Nonqualified    Stock   Option   Agreement    ("Option
Agreement")  is between Kinder Morgan,  Inc. (the  "Company"),  and
Michael C. Morgan ("Optionee"), who agree as follows:

      Section 1. Introduction. The Company has heretofore adopted the Kinder
Morgan, Inc. (f/k/a KN Energy, Inc.) 1994 Kinder Morgan Long Term Incentive Plan
(the "Plan") for the purpose of providing eligible employees of the Company and
its Affiliates (as defined in the Plan) with incentive and reward opportunities
designed to enhance the profitable growth of the Company. The Company, acting
through the Committee (as defined in the Plan), has determined that its
interests will be advanced by the issuance to Optionee of a nonqualified stock
option under the Plan.

      Section 2. Option. Subject to the terms and conditions contained herein,
the Company hereby irrevocably grants to Optionee the right and option
("Option") to purchase from the Company 150,000 shares of the Company's common
stock, $5.00 par value ("Stock"), at a price of $33.125 per share.

      Section 3. Option Period. The Option, herein granted, may be exercised by
Optionee in whole or in part at any time during a ten year period (the "Option
Period") beginning on April 20, 2000 (the "Date of Grant").

      Section 4.  Procedure  for  Exercise.  The  Committee  or its
designee shall establish procedures for Exercise of the Option.

      Section 5. Termination of Employment. If, for any reason other than Death,
Optionee ceases to be employed by the Company or its Affiliates, the Option may
be exercised to the extent Optionee would have been entitled to do so, but in no
event may the Option be exercised after the expiration of the Option Period.

      Section 6. Death. In the event that Optionee's employment is terminated
because of Optionee's death, this Option may be exercised, at any time and from
time to time, within the Option Period after such Death, by (i) the guardian of
Optionee's estate, (ii) the executor or administrator of Optionee's estate, or
(iii) the person or persons to whom Optionee's rights under this Option
Agreement shall pass by will or the laws of descent and distribution, but in no
event may the Option be exercised after the expiration of the Option Period.

      Section  7.   Transferability.   This  Option  shall  not  be
transferable  by Optionee  otherwise than by Optionee's  will or by
the laws of  descent  and  distribution.  During  the  lifetime  of
Optionee,  the Option shall be exercisable  only by Optionee or his
guardian or authorized legal

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representative. Any heir or legatee of Optionee shall take rights herein
granted subject to the terms and conditions hereof. No such transfer of this
Option Agreement to heirs or legatees of Optionee shall be effective to bind the
Company unless the Company shall have been furnished with written notice thereof
and a copy of such evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions hereof.

      Section 8. No Rights as Shareholder. Optionee shall have no rights as a
shareholder with respect to any shares of Stock covered by this Option Agreement
until the Option is exercised by written notice and accompanied by payment as
provided in Section 4 of this Option Agreement.

      Section 9. Extraordinary Corporate Transactions. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, exchanges or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issuance of Stock or other securities or subscription rights
thereto, or any issuance of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Stock or the rights thereof, or the dissolution
or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceedings, whether of a
similar character or otherwise.

      Section 10. Changes in Capital Structure. If the outstanding shares of
Stock or other securities of the Company, or both, for which the Option is then
exercisable shall at any time be changed or exchanged by declaration of a stock
dividend, stock split or combination of shares, the number and kind of shares of
Stock or other securities subject to the Plan or subject to the Option, and the
exercise price, shall be appropriately and equitably adjusted so as to maintain
the proportionate number of shares or other securities without changing the
aggregate exercise price.

      Section 11. Compliance With Securities Laws. Upon the acquisition of any
shares pursuant to the exercise of the Option herein granted, Optionee (or any
person acting under Section 7) will enter into such written representations,
warranties and agreements as the Company may reasonably request in order to
comply with applicable securities laws or with this Option Agreement.

      Section 12. Compliance With Laws. Notwithstanding any of the other
provisions hereof, Optionee agrees that he or she will not exercise the Option
granted hereby, and that the Company will not be obligated to issue any shares
pursuant to this Option Agreement, if the exercise of the Option or the issuance
of such shares of Stock would constitute a violation by Optionee or by the
Company of any provision of any law or regulation of any governmental authority.

      Section 13. Withholding of Tax. To the extent that the exercise of this
Option or the disposition of shares of Stock acquired by exercise of this Option
results in compensation income to Optionee for federal or state income tax
purposes, Optionee shall pay to the Company at the time of such exercise or
disposition such amount of money as the Company may require to meet its
obligation under applicable tax laws or regulations and, if Optionee fails to do
so, the Company is authorized to withhold from any cash remuneration then or
thereafter payable to

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<PAGE>

Optionee, any tax required to be withheld by reason of such resulting
compensation income or Company may otherwise refuse to issue or transfer any
shares otherwise required to be issued or transferred pursuant to the terms
hereof.

      Section 14. No Right to Employment or Directorship. Optionee shall be
considered to be in the employment of the Company or its Affiliates or in
service on the Board so long as he or she remains an employee or director of the
Company or its Affiliates. Any questions as to whether and when there has been a
termination of such employment or service on the Board and the cause of such
termination shall be determined by the Committee, and its determination shall be
final. Nothing contained herein shall be construed as conferring upon Optionee
the right to continue in the employ of the Company or its Affiliates or to
continue service on the Board, nor shall anything contained herein be construed
or interpreted to limit the "employment at will" relationship between Optionee
and the Company or its Affiliates.

      Section 15. Resolution of Disputes. As a condition of the granting of the
Option hereby, Optionee and Optionee's heirs, personal representatives and
successors agree that any dispute or disagreement which may arise hereunder
shall be determined by the Committee in its sole discretion and judgment, and
that any such determination and any interpretation by the Committee of the terms
of this Option Agreement shall be final and shall be binding and conclusive, for
all purposes, upon the Company, Optionee, and Optionee's heirs, personal
representatives and successors.

      Section 16. Legends on Certificate. The certificates representing the
shares of Stock purchased by exercise of the Option will be stamped or otherwise
imprinted with legends in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer and the stock
transfer records of the Company will reflect stop-transfer instructions with
respect to such shares.

      Section 17. Notices. Every notice hereunder shall be in writing and shall
be given by registered or certified mail or by any other method accepted by the
Company or the Company's designee. All notices of the exercise of any Option
hereunder shall be directed to Kinder Morgan, Inc., 1301 McKinney, Suite 3450,
Houston, Texas 77010, Attention: Secretary, or to the Company's designee. Any
notice given by the Company to Optionee directed to Optionee at the address on
file with the Company shall be effective to bind Optionee and any other person
who shall acquire rights hereunder. The Company shall be under no obligation
whatsoever to advise Optionee of the existence, maturity or termination of any
of Optionee's rights hereunder and Optionee shall be deemed to have familiarized
himself or herself with all matters contained herein and in the Plan which may
affect any of Optionee's rights or privileges hereunder.

      Section 18. Construction and Interpretation. Whenever the term "Optionee"
is used herein under circumstances applicable to any other person or persons to
whom this award, in accordance with the provisions of Section 7 hereof, may be
transferred, the word "Optionee" shall be deemed to include such person or
persons.

      Section   19.   Agreement   Subject  to  Plan.   This  Option
Agreement  is  subject  to the Plan.  The terms and  provisions  of
the Plan (including any subsequent amendments thereto) are hereby

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incorporated herein by reference thereto. In the event of a conflict
between any term or provision contained herein and a term or provision of the
Plan, the applicable terms and provisions of the Plan will govern and prevail.
All definitions of words and terms contained in the Plan shall be applicable to
this Option Agreement.

      Section 20. Entire Agreement; Amendment. This Option Agreement and any
other agreements and instruments contemplated by this Option Agreement contain
the entire agreement of the parties, and this Option Agreement may be amended
only in writing signed by both parties.

      Section 21. Modification and Severability. If a court of competent
jurisdiction declares that any provision of this Option Agreement is illegal,
invalid or unenforceable, then such provision shall be modified automatically to
the extent necessary to make such provision fully enforceable. If such court
does not modify any such provision as contemplated herein, but instead declares
it to be wholly illegal, invalid or unenforceable, then such provision shall be
severed from this Option Agreement, and such declaration shall in no way affect
the legality, validity and enforceability of the other provisions of this Option
Agreement to which such declaration does not relate. In this event, this Option
Agreement shall be construed as if it did not contain the particular provision
held to be illegal, invalid or unenforceable, the rights and obligations of the
parties hereto shall be construed and enforced accordingly, and this Option
Agreement otherwise shall remain in full force and effect. If any provision of
this Option Agreement is capable of two constructions, one of which would render
the provision void and the other of which would render the provision valid, then
the provision shall have the construction which renders it valid.

      Section 22. Binding  Effect.  This Option  Agreement shall be
binding  upon and inure to the  benefit  of any  successors  to the
Company  and  all  persons  lawfully  claiming  under  Optionee  as
provided herein.

      Section 23.  Governing  Law. This Option  Agreement  shall be
interpreted  and  construed  in  accordance  with  the  laws of the
State of Colorado and applicable federal law.

                                       4
<PAGE>

IN WITNESS WHEREOF, this Nonqualified Stock Option Agreement has been executed
as of the 20th day of April, 2000.

                               KINDER MORGAN, INC.

                                  /s/ Joseph Listengart
                          By:  _________________________________
                               Joseph Listengart
                               Vice President

                          OPTIONEE

                               /s/ Michael C. Morgan
                          ---------------------------------------
                                Michael C. Morgan

                                       5
<PAGE>EXHIBIT 10.1
                      DISTRIBUTION AND MARKETING AGREEMENT

US  WEST  Interprise  America, Inc., a Colorado Corporation ("USW") with offices
located  at  1801  California  Street #3400, Denver, Co  80202 and Vsource, Inc.
("Vsource") with offices located at 5740 Ralston, Suite 110, Ventura, CA  93003,
("Party" or "Parties"), hereby execute this Distribution and Marketing Agreement
("Agreement")  and  agree  as  follows:

     1.     SCOPE:  Vsource  will  provide  the  services  and  any  resulting
deliverables (the "Services") according to the specifications ("Specifications")
which are described herein or attached hereto.  USW's Affiliates and Assigns may
acquire  Services  under  the  terms  and  conditions  of  this  Agreement.

     2.     DEFINITIONS:  The  terms  defined  in  this Agreement shall have the
meanings  set  forth  below  whenever  they  appear in the Agreement, unless the
context  in  which  they  are  used  clearly  requires  a different meaning or a
different  definition  is  described  for  a  particular  provision:

          2.1  "AFFILIATES"  means any  entity,  which  directly  or  indirectly
     controls,  or is  controlled  by, or is under  common  control  with,  USW.
     "Control" means (i) for corporate entities, direct or indirect ownership of
     fifty percent (50%) or more of the stock or shares entitled to vote for the
     election of the board of directors or other  governing  body of the entity;
     and (ii) for non-corporate entities,  direct or indirect ownership of fifty
     percent (50%) or greater of the equity interest.

          2.2 "CUSTOMER(S)" means USW's Customers, either potential or existing.

          2.3 "SUPPORT  MATERIALS"  means all,  applications,  methods and other
     documents (in any medium) customized by or for USW that Vsource's personnel
     use in  conjunction  with the  performance of Services under the Agreement.
     Vsource shall not use Support Materials in conjunction with the performance
     of Services  hereunder unless USW first approves such Support  Materials in
     writing.

          2.4  "DECISION  MAKER(S)"  means those  persons that are eighteen (18)
     years of age or older and authorized to purchase  products  and/or Services
     for Customers.

          2.5  "SALES  ORDER(S)"  means  the  information  describing  all  Work
     Products and/or Services that Customers have purchased  during each contact
     with Vsource.

          2.6  "SERVICE  SCHEDULE" an  attachment  to the  Agreement  specifying
     details of projects to be performed under the terms of the Agreement.

     3.     [Redacted.]

     4.     WARRANTY:  Services  shall  be  performed  in a professional manner,
consistent  with industry standards and the requirements of this Agreement.  USW
may  inspect  Services  at  any  time  with  reasonable  notice  to  Vsource.

     5.  CONFIDENTIAL  INFORMATION  AND PROPERTY:  Confidential  Information and
Property ("Confidential Information") shall mean any and all business, technical
or  third-Party  information  (including  but not  limited to  marketing  plans,
financial data,  specifications,  drawings sketches,  models, samples,  computer
programs,  logos,  or  documentation)  marked as confidential or proprietary and
provided,  disclosed or made available under this  Agreement.  The Parties shall
restrict access to the Confidential  Information to employees or agents who have
a "need to know".  The  Parties',  employees  or agents,  shall not disclose the
Confidential  Information  to any third Party and shall  treat the  Confidential
Information in the same way it treats its own  Confidential  Information of like
kind.  This  provision  will not  apply to  information  which is in the  public
domain,  is  previously  known to the  receiving  Party  without  obligation  of
confidentiality,  is  independently  developed  by  the  receiving  Party  or is
obtained  by the  receiving  Party  from a third  party  that  does  not have an
obligation to keep the information  confidential.  The Parties will not make any
copies of the  Confidential  Information,  except to facilitate  the purpose for
which  the  information  is  provided.

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                            WHO HAVE A NEED TO KNOW.
<PAGE>
     6.  OWNERSHIP;   INTELLECTUAL  PROPERTY:   Intellectual  Property  includes
inventions,  discoveries,  improvements,  concepts,  methods,  processes, ideas,
information,  software,  and other  intellectual  property  which is originated,
developed or prepared in connection with Service(s) under this Agreement. Unless
otherwise   expressly  provided  in  applicable  Service  Schedule(s)  or  other
attachments, "Intellectual Property" which is originated, developed or prepared:
(1) by employees, agents or independent contractors of one Party shall belong to
that Party; and/or (2) jointly by employees of both Parties shall belong jointly
to both, and each Party hereby grants the other an unrestricted,  non-exclusive,
royalty-free,   perpetual,  irrevocable  license  to  copy,  use,  disclose  and
sublicense such jointly developed  Intellectual  Property in connection with its
business.  At the request and expense of USW,  Vsource  will assist USW and sign
all  appropriate  documents,  during  and after the term of this  Agreement,  to
enable USW to obtain intellectual property protection for Intellectual Property.
USW will, at the request and expense of Vsource,  provide the same assistance to
Vsource with respect to  Intellectual  Property.  The  assisting  Party will not
charge any fees or other charges of any kind in connection with such activities.

     7.  PRIVACY:  Vsource  shall treat all Customer  information  gathered as a
result of this Agreement as  Confidential  Information,  in accordance  with the
provisions  of  Section  5  (confidential  Information  and  Property)  of  this
Agreement.

     8. INDEPENDENT CONTRACTOR: Each of the Parties certifies that it is engaged
in an independent business and will perform its obligations under this Agreement
as an independent contractor and not as the agent or employee of the other; that
it has no authority  to act for or bind the other;  that such Party may and does
work for other  customers;  that any  persons  provided  by such Party  shall be
solely  the  employees  or agents  of that  Party  under its sole and  exclusive
direction and control.  Each Party hereto is solely responsible for the hours of
work, methods of performance and payment of its employees and agents. Each Party
hereto is solely responsible for providing worker's compensation,  unemployment,
disability  insurance  and social  security  withholding  for its  employees and
agents,  and shall  comply with all other  federal,  state and local,  rules and
regulations.  Each Party is responsible for and shall pay all assessable federal
and state income tax on amounts paid to it under this Agreement.

     9. INDEMNIFICATION: Vsource warrants and represents that the Services shall
not infringe any third party patent, copyright, trademark, trade secret or other
proprietary rights. Vsource shall indemnify,  hold harmless and defend, USW, its
officers,  directors,  Affiliates, agents and employees from any and all claims,
demands,  litigation,  expenses and liabilities  (including costs and attorneys'
fees)  ("Liabilities")  arising  from or  incident  to breach of this  warranty.
Vsource  shall  indemnify  and  hold  harmless  USW,  its  parents,  Affiliates,
subsidiaries,  owners,  agents,  directors  and  employees  from and against all
Liabilities  arising from personal  injury or property damage caused by Vsource,
its agents and employees  and others under its  direction or control.  USW shall
indemnify  and  hold  harmless  Vsource,   its  owners,   parents,   affiliates,
subsidiaries,  agents,  directors and employees from and against all Liabilities
arising from  personal  injury or property  damage caused by USW, its agents and
employees and others under its direction or control.

     10.  LIMITATION  OF  LIABILITY:  Neither  Party is  liable to the other for
consequential,  incidental,  indirect,  punitive or special  damages,  including
commercial loss and lost profits,  however caused and regardless of legal theory
or foreseeability, directly or indirectly arising under this Agreement.

                                                                    Page 2 of 11
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<PAGE>
     11. INSURANCE:  Vsource and any subcontractors  shall maintain insurance as
follows:  (a) Commercial  General  Liability  covering claims for bodily injury,
death,  personal injury or property damage with minimum limits of  $1,000,000.00
each  occurrence  with  a  General   Aggregate  limit  of   $2,000,000.00;   (b)
Comprehensive Automobile Liability covering ownership, operation and maintenance
of all  owned,  non-owned  and hired  automobiles  used in  connection  with the
performance  of this  Agreement,  with  minimum  limits  of  $1,000,000.00  each
occurrence;  (c) Worker's  Compensation with statutory limits as required in the
state where the Services are being provided. USW shall be given thirty (30) days
advance  written  notification  of any  cancellation  or material  change of the
policy.  Vsource  shall  forward  certificate(s)  of  insurance  to USW prior to
commencement  of Services and upon renewal of insurance  during the term of this
Agreement.

     12.  SAFETY,  HEALTH  AND  ACCIDENT  REPORTS:  The safety and health of the
employees  and agents of a Party  brought on premises  the premises of the other
Party shall be the sole  responsibility of the Party employing such employees or
agents.  While the  employees  and agents of a Party are on the  premises of the
other Party, the employing Party shall comply with all local,  state and federal
environmental,  health and safety requirements,  including those relating to the
use and handling of hazardous  materials.  The employing  Party shall report all
accidents,  injury-inducing  occurrences  or property  damage  arising  from the
performance of Services. The other Party may request copies of any reports filed
with the employing  Party's insurer or others.  The employing  Party's employees
and agents shall comply with all plant rules and regulations  while on the other
Party's premises.

     13. COMPLIANCE WITH LAWS: Vsource shall, at its expense, obtain all permits
and licenses,  pay all fees, and comply with all federal,  state and local laws,
ordinances,  rules,  regulations and orders applicable to Vsource's  performance
under this Agreement.

     14. PERFORMANCE STANDARDS: Vsource agrees that the Services performed under
this  Agreement  shall be free from defects in  performance  or material,  shall
conform to the requirements and  specifications of the Agreement and attachments
hereto,  and  shall be fit and  sufficient  for the  purposes  expressed  in, or
reasonably to be inferred from the Agreement  and  attachments  hereto.  Vsource
agrees to perform the Services with care, skill and diligence in accordance with
the  applicable  professional  and industry  standards  currently  recognized by
Vsource's  profession  and  industry and shall be  responsible  for the quality,
technical accuracy,  completeness and coordination of all reports,  information,
specifications  and other items and  Services  furnished  under this  Agreement.
Vsource shall comply with all applicable  governmental laws,  ordinances,  codes
and regulations in performing the Services.

If  Vsource  fails  to  meet  applicable  performance  standards set out in this
Agreement  and  attachments and Service Schedules, Vsource shall, at not cost to
USW  or  Vsource's  customer, correct or revise any error or deficiencies in the
Services.

     15. YEAR 2000 COMPLIANCE: Vsource represents and warrants that the Services
provided  under  this  Agreement  are  Year  2000  Compliant  and  will  lose no
functionality on or after January 1, 2000 or with respect to the introduction of
records  containing  dates  falling  on or after  January  1,  2000.  "Year 2000
Compliant"  means that the  Services  will  function  or be usable  properly  in
accordance  with the  requirements  of this  Agreement  and will record,  store,
process,  calculate and present  calendar  dates falling on and after January 1,
2000, and will calculate any information  dependent on or relating to such dates
in the same manner and functionality as on or before December 31, 1999.  Vsource
shall  modify or  replace  any  Services  that are not Year 2000  Compliant.  If
Vsource is unable to or fails to modify or replace Services,  USW shall have the
right to make such  modification or replacement and charge Vsource for any costs
incurred.

     16. [Redacted.]

                                                                    Page 3 of 11
  CONFIDENTIAL & PROPRIETARY.  DISCLOSE & DISTRIBUTE SOLELY TO THOSE INDIVIDUALS
                            WHO HAVE A NEED TO KNOW.
<PAGE>
     17.     DISPUTE  RESOLUTION:  If  any claim, controversy or dispute between
the  Parties,  their  agents,  employees,  officers,  directors,  or  affiliates
("Dispute")  cannot  be  settled  through  negotiation or mediation, it shall be
resolved by arbitration conducted by a single arbitrator engaged in the practice
of  law,  under  the  then current rules of the American Arbitration Association
("AAA").  The  Federal  Arbitration  Act,  9  U.S.C.  Sec. 1-16 shall govern the
arbitrability of all Disputes.  The arbitrator shall not have authority to award
punitive  damages.  All  expedited  procedures prescribed by the AAA rules shall
apply.  The  arbitrator's  decision  and  award  shall  be final and binding and
judgment  may  be  entered in any court having jurisdiction thereof.  Each Party
shall  bear  its  own  costs and attorneys' fees, and shall share equally in the
fees and expenses of the arbitrator. Notwithstanding the foregoing, either Party
may  seek  injunctive  relief  in an appropriate court of law until such time an
arbitrator  is  assigned.  The  laws of the State of California shall apply, and
any  arbitration  shall  occur  in  San  Francisco,  California.

     18.  FORCE  MAJEURE:  Neither  Party is liable  to the other  Party for any
delay,  error,  failure in performance or interruption of performance  resulting
from causes beyond their control.  The injured Party may elect to terminate this
Agreement and/or any Service Schedule upon written notice.

     19.  REMEDIES:  Subject to the Article on Dispute  Resolution  contained in
this Agreement and as limited by Section 10  "Limitation  of Liability"  herein,
the remedies  stated in this Agreement are cumulative and are in addition to any
other rights available in law or in equity.

     20.  RECORDS AND AUDITS:  Vsource  shall  maintain  complete  and  accurate
records  as  appropriate  in  accordance  with  generally  accepted   accounting
principles,   for  a  period  of  twenty-four  (24)  months  from  the  date  of
termination,  cancellation or expiration of this Agreement.  USW may inspect and
keep copies of  Vsource's  records  related to this  Agreement  upon  reasonable
notice.

     21.  ASSIGNMENT  AND  DELEGATION:  Neither  Party  shall  not  assign  this
Agreement,  in whole or in part, without the prior written consent of the other,
which shall not be unreasonably  withheld;  and any attempted assignment without
such consent shall be void.  Either Party may assign this Agreement  through its
merger  or as  part  of the  sale  of  substantially  all of its  assets  to the
counterparty of any such merger or acquisition.

     22. [Redacted.]

     23. NOTICES: Any notices required under this Agreement shall be sent to the
addresses of the Parties stated in the first paragraph of this Agreement. Notice
will be deemed  given  (1) as of the day they are  deposited  with an  overnight
courier,  charges prepaid, return receipt requested,  with a confirming telefax;
or (2) as of the day of receipt if they are  deposited in certified  U.S.  Mail,
charges prepaid,  return receipt  requested;  or (3) as of the day of receipt if
they are hand delivered. Copies of any such notices shall be sent to:

          U  S WEST, Inc.                Sheppard, Mullin, Richter & Hampton LLP
          Law  Department                650  Town  Center  Drive,  4th  Floor
          1801 California Street #5100   Costa  Mesa,  CA  92626
          Denver,  CO  80202             Fax:  714-513-5130
          Fax:  303-308-9455             Attn.:  John  J.  Giovannone,  Esq

                                                                    Page 4 of 11
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                            WHO HAVE A NEED TO KNOW.
<PAGE>
     24. ADVERTISING,  PUBLICITY:  Neither  Party  shall  use  the other Party's
names,  marks, codes, drawings or Specifications in any advertising, promotional
efforts  or publicity of any kind without the expressed prior written permission
of  the  other  Party.

     25. WAIVERS:  No  waiver of  any  provision of  this Agreement or any right
or  obligation  of  a  Party shall be effective unless in writing, signed by the
Parties.  The  failure of either Party to enforce a right shall not constitute a
waiver.

     26. MODIFICATIONS  OR  AMENDMENTS:  Modifications  and  amendments  to this
Agreement shall be in writing and signed by the Parties.

     27. NONEXCLUSIVE AGREEMENT: This Agreement is nonexclusive and USW does not
make any  commitment or guarantee for any minimum or maximum  amount of business
that it will engage in with Vsource.

     28. SEVERABILITY:  Any term of this Agreement which is held to be  invalid,
illegal, unenforceable or void will in no way affect any other provision.

     29. SEVERAL  LIABILITY:  If more than one party is referred to as USW, then
their obligations and liabilities shall be several, not joint.

     30. ENTIRE AGREEMENT:  This Agreement and any Service Schedule  constitutes
the entire  Agreement  between the Parties for the Services to be provided.  Any
prior oral or written communications or agreement of the Parties with respect to
the Services not  expressly  set forth in this  Agreement or any  attachment  or
Service Schedule or the like, are of no force or effect.

The  Parties,  intending  to  be legally bound, have caused this Agreement to be
executed  by  their  authorized  representatives  on  the dates set forth below.

U  S  WEST  INTERPRISE  AMERICA,  INC.          VSOURCE,  INC.

                                                                    Page 5 of 11
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                            WHO HAVE A NEED TO KNOW.
<PAGE>
                          SERVICE SCHEDULE #1 ("SS#1")
                     TO DISTRIBUTION AND MARKETING AGREEMENT

This  SS#1  is  issued  pursuant  to  the  terms  and conditions of that certain
Marketing  and  Distribution  Agreement  ("Agreement"), effective April 15, 1999
("Agreement"),  by  and  between  U S WEST Interprise America, Inc. with offices
located  at  1801 California Street #3400, Denver, CO 80202 ("USW") and Vsource,
Inc.  ("Vsource")  with  offices located at 5740 Ralston, Suite 110, Ventura, CA
93003.

[Redacted.]

7.     GENERAL:

     This SS#1 and the Agreement  shall be read so as to complement  each other.
     However,  in the event of an irreconcilable  conflict in the terms thereof,
     the  provisions of the Agreement  shall have  precedence  over the terms of
     this SS#1.

                                                                   Page 10 of 11
  CONFIDENTIAL & PROPRIETARY.  DISCLOSE & DISTRIBUTE SOLELY TO THOSE INDIVIDUALS
                            WHO HAVE A NEED TO KNOW.
<PAGE>

The Parties  intending to be legally bound have caused this SS#1 to Agreement to
be executed by their duly authorized representatives.

U  S  WEST  INTERPRISE  AMERICA,  INC.            VSOURCE,  INC.

                                                                   Page 11 of 11
  CONFIDENTIAL & PROPRIETARY.  DISCLOSE & DISTRIBUTE SOLELY TO THOSE INDIVIDUALS
                            WHO HAVE A NEED TO KNOW.
<PAGE>

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