Document:

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                                                                     EXHIBIT 4.3

                                                                  Execution Copy

                                  $300,000,000

                           EL PASO NATURAL GAS COMPANY

                           8 3/8% NOTES DUE JUNE 15, 2032

                          REGISTRATION RIGHTS AGREEMENT

                                                                   June 10, 2002

Credit Suisse First Boston Corporation
      Eleven Madison Avenue
      New York, New York 10010-3629

Dear Sirs:

         El Paso Natural Gas Company, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to Credit Suisse First Boston Corporation (the
"INITIAL PURCHASER"), upon the terms set forth in a purchase agreement dated
June 4, 2002 (the "PURCHASE AGREEMENT"), $300,000,000 aggregate principal amount
of its 8 3/8% Notes due June 15, 2032 (the "INITIAL SECURITIES"). The Initial
Securities will be issued pursuant to an Indenture, dated as of November 13,
1996, among the Company and JPMorgan Chase Bank (formerly The Chase Manhattan
Bank), as trustee (the "TRUSTEE") through the date hereof (as supplemented
through the date hereof, the "INDENTURE"). As an inducement to the Initial
Purchaser to enter into the Purchase Agreement, the Company agrees with the
Initial Purchaser, for the benefit of the Initial Purchaser and the holders of
the Securities (as defined below) (collectively the "HOLDERS"), as follows:

         1. Registered Exchange Offer. Unless not permitted by applicable law
(after the Company has complied with the ultimate paragraph of this Section 1),
the Company shall prepare and, not later than 90 days (such 90th day being a
"FILING DEADLINE") after the date on which the Initial Purchaser purchases the
Initial Securities pursuant to the Purchase Agreement (the "CLOSING DATE"), file
with the Securities and Exchange Commission (the "COMMISSION") a registration
statement (the "EXCHANGE OFFER REGISTRATION STATEMENT") on an appropriate form
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), with
respect to a proposed offer (the "REGISTERED EXCHANGE OFFER") to the Holders of
Transfer Restricted Securities (as defined in Section 6 hereof), who are not
prohibited by any law or policy of the Commission from participating in the
Registered Exchange Offer, to issue and deliver to such Holders, in exchange for
the Initial Securities, a like aggregate principal amount of debt securities of
the Company issued under the Indenture, identical in all material respects to
the Initial Securities and registered under the Securities Act (the "EXCHANGE
SECURITIES"). The Company shall use its reasonable commercial efforts to (i)
cause such Exchange Offer Registration Statement to become effective under the
Securities Act within 220 days after the Closing Date (such 220th day being an
"EFFECTIVENESS DEADLINE") and (ii) keep the Exchange Offer Registration
Statement effective for not less than 20 days (or longer, if required by
applicable law) after the date notice of the Registered Exchange Offer is mailed
to the Holders (such period being called the "EXCHANGE OFFER REGISTRATION
PERIOD").

         If the Company commences the Registered Exchange Offer, the Company (i)
will be entitled to consummate the Registered Exchange Offer 20 days after such
commencement (provided that the Company has accepted all the Initial Securities
theretofore validly tendered in accordance with the terms of the

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Registered Exchange Offer) and (ii) will be required to consummate the
Registered Exchange Offer no later than 30 business days after the date on which
the Exchange Offer Registration Statement is declared effective (such 30th
business day being the "CONSUMMATION DEADLINE").

         Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of Transfer Restricted Securities electing to exchange the
Initial Securities for Exchange Securities (assuming that such Holder is not an
affiliate of the Company within the meaning of the Securities Act, acquires the
Exchange Securities in the ordinary course of such Holder's business and has no
arrangements with any person to participate in the distribution of the Exchange
Securities and is not prohibited by any law or policy of the Commission from
participating in the Registered Exchange Offer) to trade such Exchange
Securities from and after their receipt without any limitations or restrictions
under the Securities Act and without material restrictions under the securities
laws of the several states of the United States.

         The Company acknowledges that, pursuant to current interpretations by
the Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (i) each Holder which is a broker-dealer
electing to exchange Initial Securities, acquired for its own account as a
result of market making activities or other trading activities, for Exchange
Securities (an "EXCHANGING DEALER"), is required to deliver a prospectus
containing the information set forth in (a) Annex A hereto on the cover, (b)
Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of
the Exchange Offer" section, and (c) Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell
Securities (as defined below) acquired in exchange for Initial Securities
constituting any portion of an unsold allotment, is required to deliver a
prospectus containing the information required by Items 507 or 508 of Regulation
S-K under the Securities Act, as applicable, in connection with such sale.

         The Company shall use its reasonable commercial efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
prospectus contained therein, in order to permit such prospectus to be lawfully
delivered by all persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as such persons must comply with such
requirements in order to resell the Exchange Securities; provided, however, that
(i) in the case where such prospectus and any amendment or supplement thereto
must be delivered by an Exchanging Dealer or an Initial Purchaser, such period
shall be the lesser of 180 days and the date on which all Exchanging Dealers and
the Initial Purchaser have sold all Exchange Securities held by them (unless
such period is extended pursuant to Section 3(j) below) and (ii) the Company
shall make such prospectus and any amendment or supplement thereto available to
any broker-dealer for use in connection with any resale of any Exchange
Securities for a period of not less than 180 days after the consummation of the
Registered Exchange Offer.

         If, upon consummation of the Registered Exchange Offer, any Initial
Purchaser holds Initial Securities acquired by it as part of its initial
distribution, the Company, simultaneously with the delivery of the Exchange
Securities pursuant to the Registered Exchange Offer, shall issue and deliver to
such Initial Purchaser upon the written request of such Initial Purchaser, in
exchange (the "PRIVATE EXCHANGE") for the Initial Securities held by such
Initial Purchaser, a like principal amount of debt securities of the Company
issued under the Indenture and identical in all material respects to the Initial
Securities (the "PRIVATE EXCHANGE SECURITIES"). The Initial Securities, the
Exchange Securities and the Private Exchange Securities are herein collectively
called the "SECURITIES".

         In connection with the Registered Exchange Offer, the Company shall:

                  (a) mail to each Holder a copy of the prospectus forming part
         of the Exchange Offer Registration Statement, together with an
         appropriate letter of transmittal and related documents;

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                  (b) keep the Registered Exchange Offer open for not less than
         20 days (or longer, if required by applicable law) after the date
         notice thereof is mailed to the Holders;

                  (c) utilize the services of a depositary for the Registered
         Exchange Offer with an address in the Borough of Manhattan, The City of
         New York, which may be the Trustee or an affiliate of the Trustee;

                  (d) permit Holders to withdraw tendered Securities at any time
         prior to the close of business, New York time, on the last business day
         on which the Registered Exchange Offer shall remain open; and

                  (e) otherwise comply with all applicable laws.

         As soon as practicable after the close of the Registered Exchange Offer
or the Private Exchange, as the case may be, the Company shall:

                  (x) accept for exchange all the Securities validly tendered
         and not withdrawn pursuant to the Registered Exchange Offer and the
         Private Exchange;

                  (y) deliver to the Trustee for cancellation all the Initial
         Securities so accepted for exchange; and

                  (z) cause the Trustee to authenticate and deliver promptly to
         each Holder of the Initial Securities, Exchange Securities or Private
         Exchange Securities, as the case may be, equal in principal amount to
         the Initial Securities of such Holder so accepted for exchange.

         The Indenture will provide that the Exchange Securities will not be
subject to the transfer restrictions set forth in the Indenture and that all the
Securities will vote and consent together on all matters as one class and that
none of the Securities will have the right to vote or consent as a class
separate from one another on any matter.

         Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the
Initial Securities surrendered in exchange therefor or, if no interest has been
paid on the Initial Securities, from the date of original issue of the Initial
Securities.

         Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act, (iii) such Holder is not an "affiliate," as defined in Rule
405 of the Securities Act, of the Company or if it is an affiliate, such Holder
will comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, (iv) if such Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Securities and (v) if such Holder is a
broker-dealer, that it will receive Exchange Securities for its own account in
exchange for Initial Securities that were acquired as a result of market-making
activities or other trading activities and that it will be required to
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Securities.

         Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations

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thereunder, (ii) any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, 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 and (iii) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
such prospectus, does not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

         If following the date hereof there has been announced a change in
Commission policy with respect to exchange offers that in the reasonable opinion
of counsel to the Company raises a substantial question as to whether the
Registered Exchange Offer is permitted by applicable federal law, the Company
will seek a no-action letter or other favorable decision from the Commission
allowing the Company to consummate the Registered Exchange Offer. The Company
will pursue the issuance of such a decision to the Commission staff level. In
connection with the foregoing, the Company will take all such other actions as
may be requested by the Commission or otherwise required in connection with the
issuance of such decision, including without limitation (i) participating in
telephonic conferences with the Commission, (ii) delivering to the Commission
staff an analysis prepared by counsel to the Company setting forth the legal
bases, if any, upon which such counsel has concluded that the Registered
Exchange Offer should be permitted and (iii) diligently pursuing a resolution
(which need not be favorable) by the Commission staff.

         2. Shelf Registration. If, (i) because of any change in law or in
applicable interpretations thereof by the staff of the Commission, the Company
is not permitted to effect a Registered Exchange Offer, as contemplated by
Section 1 hereof, (ii) the Registered Exchange Offer is not consummated by the
260th day after the Closing Date, (iii) the Initial Purchaser so requests with
respect to the Initial Securities (or the Private Exchange Securities) not
eligible to be exchanged for Exchange Securities in the Registered Exchange
Offer and held by it following consummation of the Registered Exchange Offer or
(iv) any Holder (other than an Exchanging Dealer) is not eligible to participate
in the Registered Exchange Offer or, in the case of any Holder (other than an
Exchanging Dealer) that participates in the Registered Exchange Offer, such
Holder does not receive freely tradeable Exchange Securities on the date of the
exchange and any such Holder so requests, the Company shall take the following
actions (the date on which any of the conditions described in the foregoing
clauses (i) through (iv) occur, including in the case of clauses (iii) or (iv)
the receipt of the required notice, being a "TRIGGER DATE"):

                  (a) The Company shall file, as promptly as practicable (but in
         no event more than 30 business days after the Trigger Date (such 30th
         business day being a "FILING DEADLINE")) file with the Commission and
         thereafter use its best efforts to cause to be declared effective as
         promptly as practicable thereafter, a registration statement (the
         "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer
         Registration Statement, a "REGISTRATION STATEMENT") on an appropriate
         form under the Securities Act relating to the offer and sale of the
         Transfer Restricted Securities by the Holders thereof from time to time
         in accordance with the methods of distribution set forth in the Shelf
         Registration Statement and Rule 415 under the Securities Act
         (hereinafter, the "SHELF REGISTRATION"); provided, however, that no
         Holder (other than the Initial Purchaser) shall be entitled to have the
         Securities held by it covered by such Shelf Registration Statement
         unless such Holder agrees in writing to be bound by all the provisions
         of this Agreement applicable to such Holder.

                  (b) The Company shall use its reasonable commercial efforts to
         keep the Shelf Registration Statement continuously effective in order
         to permit the prospectus included therein to be lawfully delivered by
         the Holders of the relevant Securities, for a period of two years (or
         for such longer period if extended pursuant to Section 3(j) below) from
         the date of its effectiveness or such shorter period that will
         terminate when all the Securities covered by the Shelf Registration
         Statement (i) have been sold pursuant thereto or (ii) are no longer
         restricted securities (as defined in Rule 144 under the Securities Act,
         or any successor rule thereof). The Company shall be

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         deemed not to have used its reasonable commercial efforts to keep the
         Shelf Registration Statement effective during the requisite period if
         it voluntarily takes any action that would result in Holders of
         Securities covered thereby not being able to offer and sell such
         Securities during that period, unless such action is required by
         applicable law.

                  (c) Notwithstanding any other provisions of this Agreement to
         the contrary, the Company shall cause the Shelf Registration Statement
         and the related prospectus and any amendment or supplement thereto, as
         of the effective date of the Shelf Registration Statement, amendment or
         supplement, (i) to comply in all material respects with the applicable
         requirements of the Securities Act and the rules and regulations of the
         Commission and (ii) not to contain any untrue statement of a material
         fact or omit to state a material fact required to be stated therein or
         necessary in order to make the statements therein, in light of the
         circumstances under which they were made, not misleading.

         3. Registration Procedures. In connection with any Shelf Registration
contemplated by Section 2 hereof and, to the extent applicable, any Registered
Exchange Offer contemplated by Section 1 hereof, the following provisions shall
apply:

                  (a) The Company shall (i) furnish to the Initial Purchaser,
         prior to the filing thereof with the Commission, a copy of the
         Registration Statement and each amendment thereof and each supplement,
         if any, to the prospectus included therein and, in the event that an
         Initial Purchaser (with respect to any portion of an unsold allotment
         from the original offering) is participating in the Registered Exchange
         Offer or the Shelf Registration Statement, the Company shall use its
         reasonable commercial efforts to reflect in each such document, when so
         filed with the Commission, such comments as the Initial Purchaser
         reasonably may propose; (ii) include the information set forth in Annex
         A hereto on the cover, in Annex B hereto in the "Exchange Offer
         Procedures" section and the "Purpose of the Exchange Offer" section and
         in Annex C hereto in the "Plan of Distribution" section of the
         prospectus forming a part of the Exchange Offer Registration Statement
         and include the information set forth in Annex D hereto in the Letter
         of Transmittal delivered pursuant to the Registered Exchange Offer;
         (iii) if requested by an Initial Purchaser, include the information
         required by Items 507 or 508 of Regulation S-K under the Securities
         Act, as applicable, in the prospectus forming a part of the Exchange
         Offer Registration Statement; (iv) include within the prospectus
         contained in the Exchange Offer Registration Statement a section
         entitled "Plan of Distribution," reasonably acceptable to the Initial
         Purchaser, which shall contain a summary statement of the positions
         taken or policies made by the staff of the Commission with respect to
         the potential "underwriter" status of any broker-dealer that is the
         beneficial owner (as defined in Rule 13d-3 under the Securities
         Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange
         Securities received by such broker-dealer in the Registered Exchange
         Offer (a "PARTICIPATING BROKER-DEALER"), whether such positions or
         policies have been publicly disseminated by the staff of the Commission
         or such positions or policies, in the reasonable judgment of the
         Initial Purchaser based upon advice of counsel (which may be in-house
         counsel), represent the prevailing views of the staff of the
         Commission; and (v) in the case of a Shelf Registration Statement,
         include the names of the Holders who propose to sell Securities
         pursuant to the Shelf Registration Statement as selling
         securityholders.

                  (b) The Company shall give written notice to the Initial
         Purchaser, the Holders of the Securities and any Participating
         Broker-Dealer from whom the Company has received prior written notice
         that it will be a Participating Broker-Dealer in the Registered
         Exchange Offer (which notice pursuant to clauses (ii)-(v) hereof shall
         be accompanied by an instruction to suspend the use of the prospectus
         until the requisite changes have been made):

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                           (i) when the Registration Statement or any amendment
                  thereto has been filed with the Commission and when the
                  Registration Statement or any post-effective amendment thereto
                  has become effective;

                           (ii) of any request by the Commission for amendments
                  or supplements to the Registration Statement or the prospectus
                  included therein or for additional information;

                           (iii) of the issuance by the Commission of any stop
                  order suspending the effectiveness of the Registration
                  Statement or the initiation of any proceedings for that
                  purpose;

                           (iv) of the receipt by the Company or its legal
                  counsel of any notification with respect to the suspension of
                  the qualification of the Securities for sale in any
                  jurisdiction or the initiation or threatening of any
                  proceeding for such purpose; and

                           (v) of the happening of any event that requires the
                  Company to make changes in the Registration Statement or the
                  prospectus in order that the Registration Statement or the
                  prospectus do not contain an untrue statement of a material
                  fact nor omit to state a material fact required to be stated
                  therein or necessary to make the statements therein (in the
                  case of the prospectus, in light of the circumstances under
                  which they were made) not misleading.

                  (c) The Company shall make every reasonable effort to obtain
         the withdrawal at the earliest possible time, of any order suspending
         the effectiveness of the Registration Statement.

                  (d) The Company shall furnish to each Holder of Securities
         included within the coverage of the Shelf Registration, without charge,
         at least one copy of the Shelf Registration Statement and any
         post-effective amendment thereto, including financial statements and
         schedules, and, if the Holder so requests in writing, all exhibits
         thereto (including those, if any, incorporated by reference).

                  (e) The Company shall deliver to each Exchanging Dealer and
         the Initial Purchaser, and to any other Holder who so requests, without
         charge, at least one copy of the Exchange Offer Registration Statement
         and any post-effective amendment thereto, including financial
         statements and schedules, and, if any Initial Purchaser or any such
         Holder requests, all exhibits thereto (including those incorporated by
         reference).

                  (f) The Company shall, during the Shelf Registration Period,
         deliver to each Holder of Securities included within the coverage of
         the Shelf Registration, without charge, as many copies of the
         prospectus (including each preliminary prospectus) included in the
         Shelf Registration Statement and any amendment or supplement thereto as
         such person may reasonably request. The Company consents, subject to
         the provisions of this Agreement, to the use of the prospectus or any
         amendment or supplement thereto by each of the selling Holders of the
         Securities in connection with the offering and sale of the Securities
         covered by the prospectus, or any amendment or supplement thereto,
         included in the Shelf Registration Statement.

                  (g) The Company shall deliver to the Initial Purchaser, any
         Exchanging Dealer, any Participating Broker-Dealer and such other
         persons required to deliver a prospectus following the Registered
         Exchange Offer, without charge, as many copies of the final prospectus
         included in the Exchange Offer Registration Statement and any amendment
         or supplement thereto as such persons may reasonably request. The
         Company consents, subject to the provisions of this Agreement, to the
         use of the prospectus or any amendment or supplement thereto by the
         Initial Purchaser, if necessary, any Participating Broker-Dealer and
         such other persons required to deliver a prospectus

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         following the Registered Exchange Offer in connection with the offering
         and sale of the Exchange Securities covered by the prospectus, or any
         amendment or supplement thereto, included in such Exchange Offer
         Registration Statement.

                  (h) Prior to any public offering of the Securities pursuant to
         any Registration Statement the Company shall register or qualify or
         cooperate with the Holders of the Securities included therein and their
         respective counsel in connection with the registration or qualification
         of the Securities for offer and sale under the securities or "blue sky"
         laws of such states of the United States as any Holder of the
         Securities reasonably requests in writing and do any and all other acts
         or things necessary or advisable to enable the offer and sale in such
         jurisdictions of the Securities covered by such Registration Statement;
         provided, however, that the Company shall not be required to (i)
         qualify generally to do business in any jurisdiction where it is not
         then so qualified or (ii) take any action which would subject it to
         general service of process or to taxation in any jurisdiction where it
         is not then so subject.

                  (i) The Company shall cooperate with the Holders of the
         Securities to facilitate the timely preparation and delivery of
         certificates representing the Securities to be sold pursuant to any
         Registration Statement free of any restrictive legends and in such
         denominations and registered in such names as the Holders may request a
         reasonable period of time prior to sales of the Securities pursuant to
         such Registration Statement.

                  (j) Upon the occurrence of any event contemplated by
         paragraphs (ii) through (v) of Section 3(b) above during the period for
         which the Company is required to maintain an effective Registration
         Statement, the Company shall promptly prepare and file a post-effective
         amendment to the Registration Statement or a supplement to the related
         prospectus and any other required document so that, as thereafter
         delivered to Holders of the Securities or purchasers of Securities, the
         prospectus will not contain an 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, in light of the circumstances
         under which they were made, not misleading. If the Company notifies the
         Initial Purchaser, the Holders of the Securities and any known
         Participating Broker-Dealer in accordance with paragraphs (ii) through
         (v) of Section 3(b) above to suspend the use of the prospectus until
         the requisite changes to the prospectus have been made, then the
         Initial Purchaser, the Holders of the Securities and any such
         Participating Broker-Dealers shall suspend use of such prospectus, and
         the period of effectiveness of the Shelf Registration Statement
         provided for in Section 2(b) above and the Exchange Offer Registration
         Statement provided for in Section 1 above shall each be extended by the
         number of days from and including the date of the giving of such notice
         to and including the date when the Initial Purchaser, the Holders of
         the Securities and any known Participating Broker-Dealer shall have
         received such amended or supplemented prospectus pursuant to this
         Section 3(j).

                  (k) Not later than the effective date of the applicable
         Registration Statement, the Company will provide a CUSIP number for the
         Initial Securities, the Exchange Securities or the Private Exchange
         Securities, as the case may be, and provide the applicable trustee with
         printed certificates for the Initial Securities, the Exchange
         Securities or the Private Exchange Securities, as the case may be, in a
         form eligible for deposit with The Depository Trust Company.

                  (l) The Company will comply with all rules and regulations of
         the Commission to the extent and so long as they are applicable to the
         Registered Exchange Offer or the Shelf Registration and will make
         generally available to its security holders (or otherwise provide in
         accordance with Section 11(a) of the Securities Act) an earnings
         statement satisfying the provisions of Section 11(a) of the Securities
         Act, no later than 45 days after the end of a 12-month period (or 90
         days, if such period is a fiscal year) beginning with the first month
         of the Company's

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         first fiscal quarter commencing after the effective date of the
         Registration Statement, which statement shall cover such 12-month
         period.

                  (m) The Company shall cause the Indenture to be qualified
         under the Trust Indenture Act of 1939, as amended, in a timely manner
         and containing such changes, if any, as shall be necessary for such
         qualification. In the event that such qualification would require the
         appointment of a new trustee under the Indenture, the Company shall
         appoint a new trustee thereunder pursuant to the applicable provisions
         of the Indenture.

                  (n) The Company may require each Holder of Securities to be
         sold pursuant to the Shelf Registration Statement to furnish to the
         Company such information regarding the Holder and the distribution of
         the Securities as the Company may from time to time reasonably require
         for inclusion in the Shelf Registration Statement, and the Company may
         exclude from such registration the Securities of any Holder that
         unreasonably fails to furnish such information within a reasonable time
         after receiving such request.

                  (o) The Company shall enter into such customary agreements
         (including, if requested, an underwriting agreement in customary form)
         and take all such other action, if any, as any Holder of the Securities
         shall reasonably request in order to facilitate the disposition of the
         Securities pursuant to any Shelf Registration.

                  (p) In the case of any Shelf Registration, the Company shall
         (i) make reasonably available for inspection by the Holders of the
         Securities, any underwriter participating in any disposition pursuant
         to the Shelf Registration Statement and any attorney, accountant or
         other agent retained by the Holders of the Securities or any such
         underwriter all relevant financial and other records, pertinent
         corporate documents and properties of the Company and (ii) cause the
         Company's officers, directors, employees, accountants and auditors to
         supply all relevant information reasonably requested by the Holders of
         the Securities or any such underwriter, attorney, accountant or agent
         in connection with the Shelf Registration Statement, in each case, as
         shall be reasonably necessary to enable such persons, to conduct a
         reasonable investigation within the meaning of Section 11 of the
         Securities Act; provided, however, that the foregoing inspection and
         information gathering shall be coordinated on behalf of the Initial
         Purchaser by you and on behalf of the other parties, by one counsel
         designated by and on behalf of such other parties as described in
         Section 4 hereof.

                  (q) In the case of any Shelf Registration, the Company, if
         requested by any Holder of Securities covered thereby, shall cause (i)
         its counsel to deliver an opinion and updates thereof relating to the
         Securities in customary form addressed to such Holders and the managing
         underwriters, if any, thereof and dated, in the case of the initial
         opinion, the effective date of such Shelf Registration Statement (it
         being agreed that the matters to be covered by such opinion shall
         include, without limitation, the due incorporation and good standing of
         the Company and its subsidiaries; the qualification of the Company and
         its subsidiaries to transact business as foreign corporations; the due
         authorization, execution and delivery of the relevant agreement of the
         type referred to in Section 3(o) hereof; the due authorization,
         execution, authentication and issuance, and the validity and
         enforceability, of the applicable Securities; the absence of material
         legal or governmental proceedings involving the Company and its
         subsidiaries; the absence of governmental approvals required to be
         obtained in connection with the Shelf Registration Statement, the
         offering and sale of the applicable Securities, or any agreement of the
         type referred to in Section 3(o) hereof; the compliance as to form of
         such Shelf Registration Statement and any documents incorporated by
         reference therein and of the Indenture with the requirements of the
         Securities Act and the Trust Indenture Act, respectively; and, as of
         the date of the opinion and as of the effective date of the Shelf
         Registration Statement or most recent post-effective amendment thereto,
         as the case may be, the absence from such Shelf Registration Statement
         and the prospectus

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         included therein, as then amended or supplemented, and from any
         documents incorporated by reference therein of an untrue statement of a
         material fact or the omission to state therein a material fact required
         to be stated therein or necessary to make the statements therein not
         misleading (in the case of any such documents, in the light of the
         circumstances existing at the time that such documents were filed with
         the Commission under the Exchange Act); (ii) its officers to execute
         and deliver all customary documents and certificates and updates
         thereof requested by any underwriters of the applicable Securities and
         (iii) its independent public accountants and the independent public
         accountants with respect to any other entity for which financial
         information is provided in the Shelf Registration Statement to provide
         to the selling Holders of the applicable Securities and any underwriter
         therefor a comfort letter in customary form and covering matters of the
         type customarily covered in comfort letters in connection with primary
         underwritten offerings, subject to receipt of appropriate documentation
         as contemplated, and only if permitted, by Statement of Auditing
         Standards No. 72.

                  (r) In the case of the Registered Exchange Offer, if requested
         by the Initial Purchaser or any known Participating Broker-Dealer, the
         Company shall cause (i) its counsel to deliver to the Initial Purchaser
         or such Participating Broker-Dealer signed opinions in the forms set
         forth in Section 6(b) and (c) of the Purchase Agreement with such
         changes as are customary in connection with the preparation of a
         Registration Statement and (ii) its independent public accountants and
         the independent public accountants with respect to any other entity for
         which financial information is provided in the Registration Statement
         to deliver to the Initial Purchaser or such Participating Broker-Dealer
         a comfort letter, in customary form, meeting the requirements as to the
         substance thereof as set forth in Section 6(a) of the Purchase
         Agreement, with appropriate date changes.

                  (s) If a Registered Exchange Offer or a Private Exchange is to
         be consummated, upon delivery of the Initial Securities by Holders to
         the Company (or to such other Person as directed by the Company) in
         exchange for the Exchange Securities or the Private Exchange
         Securities, as the case may be, the Company shall mark, or caused to be
         marked, on the Initial Securities so exchanged that such Initial
         Securities are being canceled in exchange for the Exchange Securities
         or the Private Exchange Securities, as the case may be; in no event
         shall the Initial Securities be marked as paid or otherwise satisfied.

                  (t) The Company will use its reasonable commercial efforts to
         (a) if the Initial Securities have been rated prior to the initial sale
         of such Initial Securities, confirm such ratings will apply to the
         Securities covered by a Registration Statement, or (b) if the Initial
         Securities were not previously rated, cause the Securities covered by a
         Registration Statement to be rated with the appropriate rating
         agencies, if so requested by Holders of a majority in aggregate
         principal amount of Securities covered by such Registration Statement,
         or by the managing underwriters, if any.

                  (u) In the event that any broker-dealer registered under the
         Exchange Act shall underwrite any Securities or participate as a member
         of an underwriting syndicate or selling group or "assist in the
         distribution" (within the meaning of the Conduct Rules (the "RULES") of
         the National Association of Securities Dealers, Inc. ("NASD")) thereof,
         whether as a Holder of such Securities or as an underwriter, a
         placement or sales agent or a broker or dealer in respect thereof, or
         otherwise, the Company will assist such broker-dealer in complying with
         the requirements of such Rules, including, without limitation, by (i)
         if such Rules, including Rule 2720, shall so require, engaging a
         "qualified independent underwriter" (as defined in Rule 2720) to
         participate in the preparation of the Registration Statement relating
         to such Securities, to exercise usual standards of due diligence in
         respect thereto and, if any portion of the offering contemplated by
         such Registration Statement is an underwritten offering or is made
         through a placement or sales agent, to recommend the yield of such
         Securities, (ii) indemnifying any such qualified independent
         underwriter to the extent of the indemnification of underwriters
         provided in Section 5 hereof and

                                       9
<PAGE>

         (iii) providing such information to such broker-dealer as may be
         required in order for such broker-dealer to comply with the
         requirements of the Rules.

                  (v) The Company shall use its reasonable commercial efforts to
         take all other steps necessary to effect the registration of the
         Securities covered by a Registration Statement contemplated hereby.

         4.  Registration Expenses.

                   (a) All expenses incident to the Company's performance of and
         compliance with this Agreement will be borne by the Company, regardless
         of whether a Registration Statement is ever filed or becomes effective,
         including without limitation;

                           (i)  all registration and filing fees and expenses;

                           (ii) all fees and expenses of compliance with federal
                  securities and state "blue sky" or securities laws;

                           (iii) all expenses of printing (including printing
                  certificates for the Securities to be issued in the Registered
                  Exchange Offer and the Private Exchange and printing of
                  Prospectuses), messenger and delivery services and telephone;

                           (iv) all fees and disbursements of counsel for the
                  Company;

                            (v) all application and filing fees in connection
                  with listing the Exchange Securities on a national securities
                  exchange or automated quotation system pursuant to the
                  requirements hereof; and

                           (vi) all fees and disbursements of independent
                  certified public accountants of the Company (including the
                  expenses of any special audit and comfort letters required by
                  or incident to such performance).

         The Company will bear its internal expenses (including, without
         limitation, all salaries and expenses of its officers and employees
         performing legal or accounting duties), the expenses of any annual
         audit and the fees and expenses of any person, including special
         experts, retained by the Company.

                  (b) In connection with any Registration Statement required by
         this Agreement, the Company will reimburse the Initial Purchaser and
         the Holders of Transfer Restricted Securities who are tendering Initial
         Securities in the Registered Exchange Offer and/or selling or reselling
         Securities pursuant to the "Plan of Distribution" contained in the
         Exchange Offer Registration Statement or the Shelf Registration
         Statement, as applicable, for the reasonable fees and disbursements of
         not more than one counsel, who shall be Andrews & Kurth L.L.P. unless
         another firm shall be chosen by the Holders of a majority in principal
         amount of the Transfer Restricted Securities for whose benefit such
         Registration Statement is being prepared.

         5.  Indemnification.

                  (a) The Company agrees to indemnify and hold harmless each
         Holder of the Securities, any Participating Broker-Dealer and each
         person, if any, who controls such Holder or such Participating
         Broker-Dealer within the meaning of the Securities Act or the Exchange
         Act (each Holder, any Participating Broker-Dealer and such controlling
         persons are referred to collectively as the "INDEMNIFIED PARTIES") from
         and against any losses, claims, damages or liabilities, joint or

                                       10
<PAGE>

         several, or any actions in respect thereof (including, but not limited
         to, any losses, claims, damages, liabilities or actions relating to
         purchases and sales of the Securities) to which each Indemnified Party
         may become subject under the Securities Act, the Exchange Act or
         otherwise, insofar as such losses, claims, damages, liabilities or
         actions arise out of or are based upon any untrue statement or alleged
         untrue statement of a material fact contained in a Registration
         Statement or prospectus or in any amendment or supplement thereto or in
         any preliminary prospectus relating to a Shelf Registration, 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 shall reimburse, as
         incurred, the Indemnified Parties for any legal or other expenses
         reasonably incurred by them in connection with investigating or
         defending any such loss, claim, damage, liability or action in respect
         thereof; provided, however, that (i) the Company shall not be liable in
         any such case to the extent that such loss, claim, damage or liability
         arises out of or is based upon any untrue statement or alleged untrue
         statement or omission or alleged omission made in a Registration
         Statement or prospectus or in any amendment or supplement thereto or in
         any preliminary prospectus relating to a Shelf Registration in reliance
         upon and in conformity with written information pertaining to such
         Holder and furnished to the Company by or on behalf of such Holder
         specifically for inclusion therein and (ii) with respect to any untrue
         statement or omission or alleged untrue statement or omission made in
         any preliminary prospectus relating to a Shelf Registration Statement,
         the indemnity agreement contained in this subsection (a) shall not
         inure to the benefit of any Holder or Participating Broker-Dealer from
         whom the person asserting any such losses, claims, damages or
         liabilities purchased the Securities concerned, to the extent that a
         prospectus relating to such Securities was required to be delivered by
         such Holder or Participating Broker-Dealer under the Securities Act in
         connection with such purchase and any such loss, claim, damage or
         liability of such Holder or Participating Broker-Dealer results from
         the fact that there was not sent or given to such person, at or prior
         to the written confirmation of the sale of such Securities to such
         person, a copy of the final prospectus if the Company had previously
         furnished copies thereof to such Holder or Participating Broker-Dealer;
         provided further, however, that this indemnity agreement will be in
         addition to any liability which the Company may otherwise have to such
         Indemnified Party. In connection with any underwritten registration as
         contemplated in Section 8 below, the Company shall also indemnify
         underwriters, their officers and directors and each person who controls
         such underwriters within the meaning of the Securities Act or the
         Exchange Act to the same extent as provided above with respect to the
         indemnification of the Holders of the Securities if requested by such
         Holders.

                  (b) Each Holder of the Securities, severally and not jointly,
         will indemnify and hold harmless the Company and each person, if any,
         who controls the Company within the meaning of the Securities Act or
         the Exchange Act from and against any losses, claims, damages or
         liabilities or any actions in respect thereof, to which the Company or
         any such controlling person may become subject under the Securities
         Act, the Exchange Act or otherwise, insofar as such losses, claims,
         damages, liabilities or actions arise out of or are based upon any
         untrue statement or alleged untrue statement of a material fact
         contained in a Registration Statement or prospectus or in any amendment
         or supplement thereto or in any preliminary prospectus relating to a
         Shelf Registration, or arise out of or are based upon the omission or
         alleged omission to state therein a material fact necessary to make the
         statements therein not misleading, but in each case only to the extent
         that the untrue statement or omission or alleged untrue statement or
         omission was made in reliance upon and in conformity with written
         information pertaining to such Holder and furnished to the Company by
         or on behalf of such Holder specifically for inclusion therein; and,
         subject to the limitation set forth immediately preceding this clause,
         shall reimburse, as incurred, the Company for any legal or other
         expenses reasonably incurred by the Company or any such controlling
         person in connection with investigating or defending any loss, claim,
         damage, liability or action in respect thereof. This indemnity
         agreement will be in addition to any liability which such Holder may
         otherwise have to the Company or any of its controlling persons.

                                       11
<PAGE>

                  (c) Promptly after receipt by an indemnified party under this
         Section 5 of notice of the commencement of any action or proceeding
         (including a governmental investigation), such indemnified party will,
         if a claim in respect thereof is to be made against the indemnifying
         party under this Section 5, notify the indemnifying party of the
         commencement thereof; but the omission so to notify the indemnifying
         party will not, in any event, relieve the indemnifying party from any
         obligations to any indemnified party other than the indemnification
         obligation provided in paragraph (a) or (b) above. In case any such
         action is brought against any indemnified party, and it notifies the
         indemnifying party of the commencement thereof, the indemnifying party
         will be entitled to participate therein and, to the extent that it may
         wish, jointly with any other indemnifying party similarly notified, to
         assume the defense thereof, with counsel reasonably satisfactory to
         such indemnified party (who shall not, except with the consent of the
         indemnified party, be counsel to the indemnifying party), and after
         notice from the indemnifying party to such indemnified party of its
         election so to assume the defense thereof the indemnifying party will
         not be liable to such indemnified party under this Section 5 for any
         legal or other expenses, other than reasonable costs of investigation,
         subsequently incurred by such indemnified party in connection with the
         defense thereof. No indemnifying party shall, without the prior written
         consent of the indemnified party, effect any settlement of any pending
         or threatened action in respect of which any indemnified party is or
         could have been a party and indemnity could have been sought hereunder
         by such indemnified party unless such settlement (i) includes an
         unconditional release of such indemnified party from all liability on
         any claims that are the subject matter of such action, and (ii) does
         not include a statement as to or an admission of fault, culpability or
         a failure to act by or on behalf of any indemnified party.

                  (d) If the indemnification provided for in this Section 5 is
         unavailable or insufficient to hold harmless an indemnified party under
         subsections (a) or (b) above, then each indemnifying party shall
         contribute to the amount paid or payable by such indemnified party as a
         result of the losses, claims, damages or liabilities (or actions in
         respect thereof) referred to in subsection (a) or (b) above in such
         proportion as is appropriate to reflect the relative fault of the
         indemnifying party or parties on the one hand and the indemnified party
         on the other in connection with the statements or omissions that
         resulted in such losses, claims, damages or liabilities (or actions in
         respect thereof) as well as any other relevant equitable
         considerations. The relative fault of the parties 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 Company
         on the one hand or such Holder or such other indemnified party, as the
         case may be, on the other, and the parties' relative intent, knowledge,
         access to information and opportunity to correct or prevent such
         statement or omission. The amount paid by an indemnified party as a
         result of the losses, claims, damages or liabilities referred to in the
         first sentence of this subsection (d) shall be deemed to include any
         legal or other expenses reasonably incurred by such indemnified party
         in connection with investigating or defending any action or claim which
         is the subject of this subsection (d). Notwithstanding any other
         provision of this Section 5(d), the Holders of the Securities shall not
         be required to contribute any amount in excess of the amount by which
         the net proceeds received by such Holders from the sale of the
         Securities pursuant to a Registration Statement exceeds the amount of
         damages which such Holders have 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 Securities Act) shall be
         entitled to contribution from any person who was not guilty of such
         fraudulent misrepresentation. For purposes of this paragraph (d), each
         person, if any, who controls such indemnified party within the meaning
         of the Securities Act or the Exchange Act shall have the same rights to
         contribution as such indemnified party and each person, if any, who
         controls the Company within the meaning of the Securities Act or the
         Exchange Act shall have the same rights to contribution as the Company.

                                       12
<PAGE>

                  (e) The agreements contained in this Section 5 shall survive
         the sale of the Securities pursuant to a Registration Statement and
         shall remain in full force and effect, regardless of any termination or
         cancellation of this Agreement or any investigation made by or on
         behalf of any indemnified party.

         6.  Additional Interest Under Certain Circumstances.

                  (a) Additional interest (the "ADDITIONAL INTEREST") with
         respect to the Securities shall be assessed as follows if any of the
         following events occur (each such event in clauses (i) through (iv)
         below being herein called a "REGISTRATION DEFAULT"):

                           (i) any Registration Statement required by this
                  Agreement is not filed with the Commission on or prior to the
                  applicable Filing Deadline;

                           (ii) the Exchange Offer Registration Statement
                  required by this Agreement is not declared effective by the
                  Commission on or prior to the Effectiveness Deadline;

                           (iii) the Registered Exchange Offer has not been
                  consummated on or prior to the Consummation Deadline; or

                           (iv) any Registration Statement required by this
                  Agreement has been declared effective by the Commission but
                  (A) such Registration Statement thereafter ceases to be
                  effective or (B) such Registration Statement or the related
                  prospectus ceases to be usable in connection with resales of
                  Transfer Restricted Securities during the periods specified
                  herein because either (1) any event occurs as a result of
                  which the related prospectus forming part of such Registration
                  Statement would include any untrue statement of a material
                  fact or omit to state any material fact necessary to make the
                  statements therein in the light of the circumstances under
                  which they were made not misleading, or (2) it shall be
                  necessary to amend such Registration Statement or supplement
                  the related prospectus, to comply with the Securities Act or
                  the Exchange Act or the respective rules thereunder.

         Each of the foregoing will constitute a Registration Default whatever
         the reason for any such event and whether it is voluntary or
         involuntary or is beyond the control of the Company or pursuant to
         operation of law or as a result of any action or inaction by the
         Commission .

         Additional Interest shall accrue on the Securities over and above the
         interest set forth in the title of the Securities from and including
         the date on which any such Registration Default shall occur to but
         excluding the date on which all such Registration Defaults have been
         cured, at a rate of 0.25% per annum (the "ADDITIONAL INTEREST RATE")
         for the first 90-day period immediately following the occurrence of
         such Registration Default. The Additional Interest Rate shall increase
         by an additional 0.25% per annum with respect to each subsequent 90-day
         period until all Registration Defaults have been cured, up to a maximum
         Additional Interest Rate of 0.75% per annum.

                  (b) A Registration Default referred to in Section 6(a)(iv)
         hereof shall be deemed not to have occurred and be continuing in
         relation to a Shelf Registration Statement or the related prospectus if
         (i) such Registration Default has occurred solely as a result of (x)
         the filing of a post-effective amendment to such Shelf Registration
         Statement to incorporate annual audited financial information with
         respect to the Company where such post-effective amendment is not yet
         effective and needs to be declared effective to permit Holders to use
         the related prospectus or (y) other material events, with respect to
         the Company that would need to be described in such Shelf Registration
         Statement or the related prospectus and (ii) in the case of clause (y),
         the Company is proceeding promptly and in good faith to amend or
         supplement such Shelf Registration Statement and related prospectus to
         describe such events; provided, however, that in any case if such

                                       13
<PAGE>

         Registration Default occurs for a continuous period in excess of 30
         days, Additional Interest shall be payable in accordance with the above
         paragraph from the day such Registration Default occurs until such
         Registration Default is cured.

                  (c) Any amounts of Additional Interest due pursuant to Section
         6(a) will be payable in cash on the regular interest payment dates with
         respect to the Securities. The amount of Additional Interest will be
         determined by multiplying the applicable Additional Interest Rate by
         the principal amount of the Securities and further multiplied by a
         fraction, the numerator of which is the number of days such Additional
         Interest Rate was applicable during such period (determined on the
         basis of a 360-day year comprised of twelve 30-day months), and the
         denominator of which is 360.

                  (d) "TRANSFER RESTRICTED SECURITIES" means each Security until
         (i) the date on which such Security has been exchanged by a person
         other than a broker-dealer for a freely transferable Exchange Security
         in the Registered Exchange Offer, (ii) following the exchange by a
         broker-dealer in the Registered Exchange Offer of an Initial Security
         for an Exchange Note, the date on which such Exchange Note is sold to a
         purchaser who receives from such broker-dealer on or prior to the date
         of such sale a copy of the prospectus contained in the Exchange Offer
         Registration Statement, (iii) the date on which such Security has been
         effectively registered under the Securities Act and disposed of in
         accordance with the Shelf Registration Statement or (iv) the date on
         which such Security is distributed to the public pursuant to Rule 144
         under the Securities Act or is saleable pursuant to Rule 144(k) under
         the Securities Act.

         7. Rules 144 and 144A. The Company shall use its best efforts to file
the reports required to be filed by it under the Securities Act and the Exchange
Act in a timely manner and, if at any time the Company is not required to file
such reports, it will, upon the request of any Holder of Securities, make
publicly available other information so long as necessary to permit sales of
their securities pursuant to Rules 144 and 144A. The Company covenants that it
will take such further action as any Holder of Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)). The Company will provide a copy of this
Agreement to prospective purchasers of Initial Securities identified to the
Company by the Initial Purchaser upon request. Upon the request of any Holder of
Initial Securities, the Company shall deliver to such Holder a written statement
as to whether it has complied with such requirements. Notwithstanding the
foregoing, nothing in this Section 7 shall be deemed to require the Company to
register any of its securities pursuant to the Exchange Act.

         8. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering ("MANAGING UNDERWRITERS") will be selected by
the Holders of a majority in aggregate principal amount of such Transfer
Restricted Securities to be included in such offering, provided that such
Managing Underwriters shall be reasonable acceptable to the Company.

         No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

                                       14
<PAGE>

         9.  Miscellaneous.

                  (a) Remedies. The Company acknowledges and agrees that any
         failure by the Company to comply with its obligations under Section 1
         and 2 hereof may result in material irreparable injury to the Initial
         Purchaser or the Holders for which there is no adequate remedy at law,
         that it will not be possible to measure damages for such injuries
         precisely and that, in the event of any such failure, the Initial
         Purchaser or any Holder may obtain such relief as may be required to
         specifically enforce the Company's obligations under Sections 1 and 2
         hereof. The Company further agrees to waive the defense in any action
         for specific performance that a remedy at law would be adequate.

                  (b) No Inconsistent Agreements. The Company will not on or
         after the date of this Agreement enter into any agreement with respect
         to its securities that is inconsistent with the rights granted to the
         Holders in this Agreement or otherwise conflicts with the provisions
         hereof. The rights granted to the Holders hereunder do not in any way
         conflict with and are not inconsistent with the rights granted to the
         holders of the Company's securities under any agreement in effect on
         the date hereof.

                  (c) Amendments and Waivers. The provisions of this Agreement
         may not be amended, modified or supplemented, and waivers or consents
         to departures from the provisions hereof may not be given, except by
         the Company and the written consent of the Holders of a majority in
         principal amount of the Securities affected by such amendment,
         modification, supplement, waiver or consents. Without the consent of
         the Holder of each Security, however, no modification may change the
         provisions relating to the payment of Additional Interest.

                  (d) Notices. All notices and other communications provided for
         or permitted hereunder shall be made in writing by hand delivery,
         first-class mail, facsimile transmission, or air courier which
         guarantees overnight delivery:

                           (1) if to a Holder of the Securities, at the most
                  current address given by such Holder to the Company.

                           (2)  if to the Initial Purchaser;

                           Credit Suisse First Boston Corporation
                           Eleven Madison Avenue
                           New York, NY 10010-3629
                           Fax No.:  (212) 325-8278
                           Attention:  Transactions Advisory Group

                  with a copy to:

                           Andrews & Kurth
                           Mayor, Day, Caldwell & Keeton L.L.P.
                           600 Travis, Suite 4200
                           Houston, Texas 77002
                           Fax No.:  (713) 220-4285

                                       15
<PAGE>

                           (3) if to the Company, at its address as follows:

                           El Paso Corporation
                           El Paso Building
                           1001 Louisiana Street
                           Houston, Texas 77002

                  with a copy to:

                           Locke Liddell & Sapp LLP
                           600 Travis, Suite 3400
                           Houston, Texas 77002
                           Fax No.:  (713) 223-3717

                  All such notices and communications shall be deemed to have
         been duly given: at the time delivered by hand, if personally
         delivered; three business days after being deposited in the mail,
         postage prepaid, if mailed; when receipt is acknowledged by recipient's
         facsimile machine operator, if sent by facsimile transmission; and on
         the day delivered, if sent by overnight air courier guaranteeing next
         day delivery.

                  (e) Third Party Beneficiaries. The Holders shall be third
         party beneficiaries to the agreements made hereunder between the
         Company, on the one hand, and the Initial Purchaser, on the other hand,
         and shall have the right to enforce such agreements directly to the
         extent they may deem such enforcement necessary or advisable to protect
         their rights or the rights of Holders hereunder.

                  (f) Successors and Assigns. This Agreement shall be binding
         upon the parties and their respective successors and assigns.

                  (g) Counterparts. This Agreement may be executed in any number
         of counterparts and by the parties hereto in separate counterparts,
         each of which when so executed shall be deemed to be an original and
         all of which taken together shall constitute one and the same
         agreement.

                  (h) Headings. The headings in this Agreement are for
         convenience of reference only and shall not limit or otherwise affect
         the meaning hereof.

                  (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
         CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
         REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

                  (j) Severability. If any one or more of the provisions
         contained herein, or the application thereof in any circumstance, is
         held invalid, illegal or unenforceable, the validity, legality and
         enforceability of any such provision in every other respect and of the
         remaining provisions contained herein shall not be affected or impaired
         thereby.

                  (k) Securities Held by the Company. Whenever the consent or
         approval of Holders of a specified percentage of principal amount of
         Securities is required hereunder, Securities held by the Company or its
         affiliates (other than subsequent Holders of Securities if such
         subsequent Holders are deemed to be affiliates solely by reason of
         their holdings of such Securities) shall not be counted in determining
         whether such consent or approval was given by the Holders of such
         required percentage.

                                       16
<PAGE>

         If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Initial Purchaser and the Company in accordance with its terms.

                                       Very truly yours,

                                       El Paso Natural Gas Company

                                       By: /s/ Greg G. Gruber
                                         ---------------------------------------
                                         Name:  Greg G. Gruber
                                         Title: Senior Vice President and
                                                Chief Financial Officer

The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first above
written.

CREDIT SUISSE FIRST BOSTON CORPORATION

By: /s/ Paul A. Davis
    -----------------------------------
    Name:  Paul A. Davis
    Title: Director

                                       17
<PAGE>

                                                                         ANNEX A

       Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Securities received in exchange for Initial Securities
where such Initial Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."

                                       18
<PAGE>

                                                                         ANNEX B

       Each broker-dealer that receives Exchange Securities for its own account
in exchange for Initial Securities, where such Initial Securities were acquired
by such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."

                                       19
<PAGE>

                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

       Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Initial Securities where such Initial Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until         , 200 , all
dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.(1)

       The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Securities. Any broker-dealer that resells Exchange Securities that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Securities and any commission or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

       For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
Holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.

---------------------
(1) In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the inside front cover page of the Exchange Offer prospectus below the
Table of Contents.

                                       20
<PAGE>

                                                                         ANNEX D

[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

           Name:
                     --------------------------------------------------
           Address:
                     --------------------------------------------------

If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Initial Securities that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

                                       21<PAGE>
                                                                     Exhibit 4.2

                           SECOND AMENDED AND RESTATED

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                          KINDER MORGAN MANAGEMENT, LLC

                            Dated as of July 23, 2002

<PAGE>

                           SECOND AMENDED AND RESTATED
                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                          KINDER MORGAN MANAGEMENT, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>     <C>       <C>                                                                         <C>
ARTICLE 1             DEFINITIONS..............................................................1

         1.1      Definitions..................................................................1

         1.2      Construction.................................................................7

ARTICLE 2             ORGANIZATION.............................................................7

         2.1      Continuation.................................................................7

         2.2      Name.........................................................................7

         2.3      Registered Office; Registered Agent; Principal Office; Other Offices.........7

         2.4      Purpose; Powers..............................................................8

         2.5      Foreign Qualification........................................................8

         2.6      Power of Attorney............................................................8

         2.7      Term.........................................................................9

         2.8      Taxation as Corporation; No State-Law Partnership............................9

         2.9      Title to Company Assets......................................................9

ARTICLE 3             SHAREHOLDERS; CERTIFICATES; TRANSFER OF COMPANY SECURITIES...............9

         3.1      Shareholders.................................................................9

         3.2      No Liability to Third Parties...............................................10

         3.3      No Expulsion................................................................10

         3.4      Certificates................................................................10

         3.5      Register, Registration of Transfer and Exchange.............................11

         3.6      Mutilated, Destroyed, Lost or Stolen Certificates...........................12

ARTICLE 4             AUTHORIZATION AND ISSUANCE OF COMPANY SECURITIES........................13

         4.1      Company Securities..........................................................13

         4.2      Voting Shares...............................................................13

         4.3      Listed Shares...............................................................15

         4.4      Splits and Combinations.....................................................18

         4.5      Withholding.................................................................19
</Table>
<PAGE>
                                TABLE OF CONTENTS
                                  (Continued)
<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>     <C>       <C>                                                                         <C>
ARTICLE 5             MANAGEMENT..............................................................19

         5.1      Management of the Company's Affairs.........................................19

         5.2      Board of Directors..........................................................20

         5.3      Restrictions on the Board of Directors' Authority...........................21

         5.4      Officers....................................................................22

         5.5      Compensation................................................................23

         5.6      Business Opportunities......................................................24

         5.7      Interested Officers or Directors............................................24

         5.8      Duties of Record Holders of Voting Shares and Directors.....................25

         5.9      Indemnification.............................................................25

         5.10     Liability of Indemnitees....................................................27

         5.11     Facsimile Signatures........................................................27

ARTICLE 6             BOOKS AND RECORDS; INFORMATION AND ACCOUNTS.............................28

         6.1      Maintenance of Books and Records............................................28

         6.2      Information.................................................................28

         6.3      Accounts....................................................................28

ARTICLE 7             DISSOLUTION, WINDING-UP AND TERMINATION.................................28

         7.1      Dissolution.................................................................28

         7.2      Winding-Up and Termination..................................................29

ARTICLE 8             AMENDMENT OF AGREEMENT; SHAREHOLDER MEETINGS; RECORD DATE...............29

         8.1      Amendment Procedures........................................................29

         8.2      Meetings....................................................................29

         8.3      Notice of a Meeting.........................................................30

         8.4      Record Date.................................................................30

         8.5      Adjournment.................................................................30

         8.6      Waiver of Notice; Approval of Meeting; Approval of Minutes..................30

         8.7      Quorum; Voting..............................................................30

         8.8      Special Voting Requirements.................................................31

         8.9      Conduct of Meeting..........................................................31

         8.10     Action Without a Meeting....................................................31
</Table>

                                      -ii-
<PAGE>
                                TABLE OF CONTENTS
                                  (Continued)
<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>     <C>       <C>                                                                         <C>
         8.11     Voting and Other Rights.....................................................32

ARTICLE 9             COVENANTS...............................................................32

ARTICLE 10            GENERAL PROVISIONS......................................................32

         10.1     Fiscal Year.................................................................32

         10.2     Offset......................................................................33

         10.3     Notices.....................................................................33

         10.4     Entire Agreement............................................................33

         10.5     Waiver......................................................................33

         10.6     Binding Effect..............................................................33

         10.7     Governing Law; Severability.................................................33

         10.8     Further Action..............................................................33

         10.9     No Right to Action for Dissolution or Partition.............................33

         10.10    Third-Party Beneficiaries...................................................34

         10.11    Creditors...................................................................34

         10.12    Counterparts................................................................34

Annex A - Exchange Provisions (Eliminated on July 23, 2002)..................................A-1

Annex B - Purchase Provisions................................................................B-1

Annex C - Delegation of Control Agreement....................................................C-1

</Table>

                                     -iii-
<PAGE>
                           SECOND AMENDED AND RESTATED
                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                          KINDER MORGAN MANAGEMENT, LLC

         This Second Amended and Restated Limited Liability Company Agreement of
Kinder Morgan Management, LLC, a Delaware limited liability company (the
"Company"), dated as of July 23, 2002, is adopted, executed and agreed to, for
good and valuable consideration, by and among Kinder Morgan G.P., Inc., a
Delaware corporation (the "Organizational Shareholder"), and any other Persons
(as defined below) who are or become Shareholders (as defined below) of the
Company or parties hereto as provided herein, and amends and restates in its
entirety the Amended and Restated Limited Liability Company Agreement of Kinder
Morgan Management, LLC dated as of May 14, 2001.

                                   ARTICLE 1
                                  Definitions

         1.1   Definitions. As used in this Agreement, except as defined
otherwise in the Purchase Provisions (within which the definitions in which
shall control), the following terms shall have the following respective
meanings:

         "Act" means the Delaware Limited Liability Company Act, as amended from
time to time, and any successor to such statute.

         "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with, the Person in question. As used in this definition of "Affiliate," the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.

         "Agreement" means this Second Amended and Restated Limited Liability
Company Agreement, including the Purchase Provisions, as amended, supplemented
or restated from time to time.

         "Assignee" means a Person to whom one or more Company Securities have
been transferred in a manner permitted under this Agreement.

         "Average Market Price" means, except as otherwise provided in the
Purchase Provisions, the average Closing Price of a Listed Share during the ten
consecutive Trading Days prior to the applicable ex-dividend date, but not
including that date. For the purpose of this definition, the term "ex-dividend
date" means the date on which "ex-dividend" trading commences for a Share
Distribution on the principal National Securities Exchange on which the Listed
Shares are then listed.

         "Bankruptcy" or "Bankrupt" means, with respect to any Person, that (a)
such Person (i) makes a general assignment for the benefit of creditors; (ii)
files a voluntary petition in

<PAGE>
bankruptcy; (iii) is insolvent or has entered against such Person an order for
relief in any bankruptcy or insolvency proceeding; (iv) files a petition or
answer seeking for such Person any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any Law; (v)
files an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against such Person in a proceeding of the type
described in subclauses (i) through (iv) of this clause (a); or (vi) seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of such Person or of all or any substantial part of such Person's
properties; or (b) 120 days have passed after the commencement of any proceeding
seeking reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any Law, if the proceeding has not been
dismissed, or 90 days have passed after the appointment without such Person's
consent or the acquiescence of a trustee, receiver or liquidator of such Person
or of all or any substantial part of such Person's properties, if the
appointment is not vacated or stayed, or 90 days have passed after the date of
expiration of any such stay, if the appointment has not been vacated.

         "Beneficial Owner" has the meaning set forth in Rules 13d-3 and 13d-5
under the Exchange Act, as in effect on the date of this Agreement, and the
terms "Beneficial Ownership," "Beneficially Own," "Beneficially Owned" and
similar terms have correlative meanings.

         "Board of Directors" has the meaning assigned to it in Subsection
5.1(a).

         "Business Day" means any day other than a Saturday, a Sunday or a day
on which national banking associations in the State of New York or the State of
Texas are closed.

         "Certificate" has the meaning assigned to it in Subsection 3.4(a).

         "Chairman of the Board" has the meaning assigned to it in Subsection
5.2(g).

         "Class B Unit" has the meaning assigned to it in the Partnership
Agreement.

         "Closing Date" means the date of the sale by the Company of Listed
Shares to the Underwriters pursuant to the Underwriting Agreement.

         "Closing Price" means (a) for securities that are listed on a National
Securities Exchange, the last sale price for that day, regular way, or, if there
are no sales on that day, the average of the closing bid and asked prices for
that day, regular way, in either case as reported in the principal composite
transactions reporting system for the principal National Securities Exchange on
which the securities are listed; or (b) for securities that are not listed on a
National Securities Exchange, (i) the last quoted price on that day, or if no
price is quoted, the average of the high bid and low asked prices on that day,
each as reported by the NASDAQ; (ii) if on that day the securities are not so
quoted, the average of the closing bid and asked prices on that day furnished by
a professional market maker in the securities selected by the Board of Directors
in its sole discretion; or (iii) if on that day no market maker is making a
market in the securities, the fair value of the securities as determined by the
Board of Directors in its sole discretion.

         "Code" means the United States Internal Revenue Code of 1986, as
amended from time to time and as interpreted by the applicable regulations
thereunder. All references herein to a

                                      -2-

<PAGE>
specific section or sections of the Code shall be deemed to include a reference
to any corresponding provision or provisions of future Law.

         "Common Unit" has the meaning assigned to it in the Partnership
Agreement.

         "Company" means Kinder Morgan Management, LLC, a Delaware limited
liability company.

         "Company Securities" means the shares into which the interest in the
Company is divided and includes Voting Shares, Listed Shares and any other
shares that may be approved in accordance with Subsection 4.1(a), as the context
requires.

         "Delegation of Control Agreement" means the Delegation of Control
Agreement to be dated as of May 18, 2001 among the Organizational Shareholder,
KMEP, the Operating Partnerships and the Company, attached hereto as Annex C, as
amended, supplemented or restated from time to time.

         "Director" means a member of the Board of Directors elected as provided
in Section 5.2, but such term does not include any Person who has ceased to be a
member of the Board of Directors. Directors are "managers" (as such term is
defined in the Act) of the Company.

         "Dissolution Event" has the meaning assigned to it in Subsection
7.1(a).

         "Entity" means a corporation, limited liability company, venture,
partnership, trust, unincorporated organization, association or other entity.

         "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended from time to time, and any successor to such statute and all rules
and regulations promulgated thereunder.

         "Group" means a "group" of Persons as defined in Section 13(d)(3) of
the Exchange Act.

         "Indemnitees" means (a) the Record Holders of Voting Shares; (b) any
Person who is or was an Affiliate of the Record Holders of Voting Shares; (c)
any Person who is or was an officer, director, employee, partner, agent or
trustee of the Record Holders of Voting Shares, the Company or any of their
respective Affiliates; or (d) any Person who is or was serving at the request of
the Record Holders of Voting Shares, the Company or any of their respective
Affiliates as a director, officer, employee, partner, agent or trustee of
another Person.

         "Initial Public Offering" means the consummation of the first
underwritten public offering of Listed Shares pursuant to an effective
registration statement filed under the Securities Act, as underwritten by the
Underwriters pursuant to the Underwriting Agreement.

         "I-Unit" has the meaning assigned to it in the Partnership Agreement.

         "KMEP" means Kinder Morgan Energy Partners, L.P., a Delaware limited
partnership.

                                      -3-
<PAGE>

         "KMI" means Kinder Morgan, Inc., a Kansas corporation, and its
successor by merger, consolidation or acquisition of all or substantially all of
its assets.

         "Law" means any applicable constitutional provision, statute, act, code
(including the Code), law, regulation, rule, ordinance, order, decree, ruling,
proclamation, resolution, judgment, decision, declaration or interpretative or
advisory opinion or letter of a governmental authority, and includes any
applicable rule of any National Securities Exchange on which Company Securities
are traded or listed.

         "Listed Share" has the meaning assigned to it in Subsection 4.1(a).

         "NASDAQ" means the National Association of Securities Dealers Automatic
Quotation System.

         "National Securities Exchange" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Exchange Act.

         "Officer" means any Person elected as an officer of the Company as
provided in Section 5.4, but such term does not include any Person who has
ceased to be an officer of the Company. Officers are "managers" (as such term is
defined in the Act) of the Company.

         "Operating Partnerships" has the meaning assigned to it in the
Partnership Agreement.

         "Opinion of Counsel" means a written opinion of counsel (who may be
regular counsel to the Company or any Affiliate thereof) acceptable to the Board
of Directors, any committee thereof or any Officer.

         "Organizational Certificate" has the meaning assigned to it in Section
2.1.

         "Organizational Shareholder" means Kinder Morgan G.P., Inc., a Delaware
corporation.

         "Outstanding" means, with respect to any Company Securities and any
Units, all Company Securities or Units that are issued by the Company or KMEP,
respectively, and reflected as outstanding on the books and records of the
Company (including the Transfer Agent) or KMEP (including any transfer agent),
respectively, as of the date of determination, excluding Company Securities and
Units held in the treasury; provided, however, that if any Listed Shares are
Beneficially Owned:

                 (a) by any Person or Group, excluding the Record Holders of
         Voting Shares and their Affiliates, if the sum of the number of Listed
         Shares Beneficially Owned by such Person or Group plus the number of
         Common Units Beneficially Owned by such Person or Group equals 20% or
         more of the sum of the aggregate number of Listed Shares that are
         issued by the Company and reflected as outstanding on the books and
         records of the Company (including the Transfer Agent) as of the date of
         determination, but not including Listed Shares held in the treasury,
         plus the aggregate number of Common Units that are issued by KMEP and
         reflected as outstanding on the books and records of KMEP (including
         any transfer agent) as of the date of determination, but not including
         Common Units held in the treasury; or

                                      -4-
<PAGE>
                 (b) by the Record Holders of Voting Shares or their Affiliates
         with respect to (i) a matter that is presented to the Record Holders of
         Listed Shares pursuant to Subsection 4.3(c) in order to determine the
         manner in which I-Units shall be voted with respect to (A) the proposed
         removal of the general partner of KMEP, (B) any vote required to be
         taken under Subsection 11.2(a) of the Partnership Agreement with
         respect to the transfer of all, but not less than all, of the
         Partnership Interest (as defined in the Partnership Agreement) of the
         general partner of KMEP and the admission of any such transferee as a
         general partner of KMEP, (C) a proposed amendment to the terms of the
         I-Units pursuant to Subsection 15.2 of the Partnership Agreement that
         would have a material adverse effect on the rights and preferences of
         the I-Units in relation to other classes of Units, as determined in the
         sole discretion of the Board of Directors, or (D) the proposed
         withdrawal of the general partner of KMEP pursuant to Section 13.1(b)
         of the Partnership Agreement, or (ii) a matter that the Record Holders
         of Listed Shares vote upon pursuant to Subsection 4.3(d),

then such Listed Shares so Beneficially Owned pursuant to clauses (a) and (b)
above shall not be considered to be Outstanding for the purposes of Subsections
7.1(a)(ii) and 7.1(a)(iii) and Articles 8 and 9.

         "Partnership Agreement" means the Third Amended and Restated Agreement
of Limited Partnership of KMEP to be dated as of May 18, 2001, as amended,
supplemented or restated from time to time.

         "Partnerships" means KMEP and the Operating Partnerships.

         "Person" means a natural person or an Entity.

         "Purchase Provisions" means the Purchase Provisions executed and
adopted by KMI and attached hereto as Annex B, as amended, supplemented or
restated from time to time, which are an integral part of this Agreement.

         "Record Date" means the date established by the Board of Directors for
determining (a) the identity of the Record Holders entitled to notice of, or to
vote at, any meeting of the Shareholders or entitled to vote by ballot or give
approval of a Company action in writing without a meeting or entitled to
exercise rights in respect of any lawful action of the Shareholders, (b) the
identity of the Record Holders entitled to notice with respect to any other
matter, or (c) the identity of the Record Holders entitled to receive any
distribution, including a Share Distribution.

         "Record Holder" means the Person in whose name a Company Security is
registered on the books and records of the Company or the Transfer Agent as
contemplated in Section 3.5.

         "Registration Rights Agreement" means the Registration Rights Agreement
to be dated as of May 18, 2001 among KMEP, KMI and the Company, as amended,
supplemented or restated from time to time.

         "Securities Act" means the United States Securities Act of 1933, as
amended from time to time, and any successor to such statute and all rules and
regulations promulgated thereunder.

                                      -5-
<PAGE>

         "Securities and Exchange Commission" means the Securities and Exchange
Commission of the United States and any successor thereto.

         "Share Distribution" means a distribution in respect of a Company
Security made or required to be made in an additional Company Security or a
fraction thereof to any Shareholder pursuant to the terms of the Company
Securities held by such Shareholder.

         "Shareholder" means any Person admitted as a shareholder in accordance
with Subsection 3.1(a), but such term does not include any Person who has ceased
to be a Record Holder of any Company Security. Shareholders are "members" (as
such term is defined in the Act) of the Company.

         "Shareholder Interest" means a limited liability company interest (as
such term is defined in the Act) of a Shareholder, including the right to
receive Share Distributions and other distributions from the Company, together
with all other rights, benefits and privileges enjoyed by the Shareholder (under
the Act, the Organizational Certificate, this Agreement or otherwise) in its
capacity as a Shareholder, including the right to vote, consent and approve, and
all obligations, duties and liabilities imposed on the Shareholder (under the
Act, the Organizational Certificate, this Agreement or otherwise) in its
capacity as a Shareholder.

         "Tax Indemnification Agreement" means the Tax Indemnification Agreement
to be dated as of May 18, 2001 between KMI and the Company, as amended,
supplemented or restated from time to time.

         "Trading Day" means, with respect to Listed Shares or Common Units, a
day on which the principal National Securities Exchange on which the Listed
Shares or Common Units, as the case may be, are listed is open for business or,
if the Listed Shares or Common Units, as the case may be, are not listed on any
National Securities Exchange, a day on which banking institutions in New York,
New York generally are open.

         "Transfer Agent" means any bank, trust company or other Person
(including the Company or any Affiliate) appointed from time to time by the
Board of Directors to act as registrar and transfer agent for the Company
Securities. Initially, EquiServe Trust Company, N.A. shall be the Transfer Agent
for the Listed Shares.

         "Treasury Regulations" means the regulations promulgated by the United
States Department of the Treasury pursuant to and in respect of provisions of
the Code. All references herein to sections of the Treasury Regulations shall
include any corresponding provisions of succeeding, similar, substitute,
proposed or final Treasury Regulations.

         "Underwriters" means Goldman, Sachs & Co., Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Dain Rauscher Incorporated, and First Union
Securities, Inc., as representatives of the several underwriters named in
Schedule I to the Underwriting Agreement.

         "Underwriting Agreement" means the Underwriting Agreement dated as of
May 14, 2001 among the Underwriters, the Company, the Organizational
Shareholder, KMI and KMEP, providing for the purchase of Listed Shares by the
Underwriters, as amended, supplemented or restated from time to time.

                                      -6-
<PAGE>
         "Unit" has the meaning assigned to it in the Partnership Agreement.

         "Voting Share" has the meaning assigned to it in Subsection 4.1(a).

         1.2   Construction. Unless the context requires otherwise:

               (a) terms defined in Section 1.1 have the meanings assigned to
         them in that Section for purposes of this Agreement; terms defined in
         the Purchase Provisions and also in this Agreement shall in the
         Purchase Provisions have the meanings ascribed to them therein;

               (b) the gender (or lack of gender) of all words used in this
         Agreement includes the masculine, feminine and neuter;

               (c) references to Articles, Sections and Subsections (other than
         in connection with the Code, the Treasury Regulations or the Act) refer
         to Articles, Sections and Subsections, respectively, of this Agreement;

               (d) the words "herein," "hereof," "hereunder" and other words of
         similar import refer to this Agreement as a whole and not to any
         particular Article, Section or Subsection, except as otherwise provided
         in the Purchase Provisions;

               (e) "include," "includes" and "including" mean "include, without
         limitation," "includes, without limitation" and "including, without
         limitation," respectively;

               (f) terms defined herein include the plural as well as the
         singular; and

               (g) "or" is not exclusive.

                                   ARTICLE 2
                                  Organization

         2.1   Continuation. The Company was organized as a Delaware limited
liability company by the filing of a Certificate of Formation on February 14,
2001, as amended by a Certificate of Amendment filed on February 16, 2001 (as
amended, supplemented or restated from time to time, the "Organizational
Certificate"), pursuant to the Act. The Organizational Shareholder, as the
initial Shareholder, hereby continues the existence of the Company as a limited
liability company pursuant to the provisions of the Act.

         2.2   Name. The name of the Company is "Kinder Morgan Management, LLC"
and all Company business must be conducted in that name or such other names that
comply with Law and as the Board of Directors may select.

         2.3   Registered Office; Registered Agent; Principal Office; Other
Offices. The registered office of the required by the Act to be maintained in
the State of Delaware shall be the office of the initial registered agent for
service of process named in the Organizational Certificate or such other office
(which need not be a place of business of the Company) as the Board of Directors
may designate in the manner provided by Law. The

                                      -7-
<PAGE>
registered agent for service of process of the Company in the State of Delaware
shall be the initial registered agent for service of process named in the
Organizational Certificate or such other Person or Persons as the Board of
Directors may designate in the manner provided by Law. The principal office of
the Company in the United States shall be located at One Allen Center, Suite
1000, 500 Dallas Street, Houston, Texas 77002, or such other place as the Board
of Directors may from time to time designate, which need not be in the State of
Delaware, and the Company shall maintain records there and shall keep the street
address of such principal office at the registered office of the Company in the
State of Delaware. The Company may have such other offices as the Board of
Directors may designate.

         2.4   Purpose; Powers. The purposes of the Company are to be a limited
partner in KMEP, to manage and control, directly or through one or more
Affiliates, the business and affairs of KMEP and the Operating Partnerships
pursuant to the Delegation of Control Agreement and to engage in any lawful
business, purpose or activity related thereto. The Company shall possess and may
exercise all the powers and privileges granted by the Act, by any other Law or
by this Agreement, together with any powers incidental thereto, including such
powers and privileges as are necessary or convenient to the conduct, promotion
or attainment of the business, purposes or activities of the Company.

         2.5   Foreign Qualification. Prior to the Company's conducting business
in any jurisdiction other than Delaware, the Board of Directors shall cause the
Company to comply, to the extent procedures are available and those matters are
reasonably within the control of the Board of Directors, with all requirements
necessary to qualify the Company as a foreign limited liability company in that
jurisdiction.

         2.6   Power of Attorney.

               (a) Each Shareholder does hereby constitute and appoint each
         Person specifically authorized by the Board of Directors to act as its
         true and lawful representative and attorney-in-fact, in its name, place
         and stead, to make, execute, sign, deliver and file (i) any amendment
         of the Organizational Certificate; (ii) this Agreement and any
         amendment to this Agreement, including any amendment to the Purchase
         Provisions, made in accordance with the terms of this Agreement; and
         (iii) all such other instruments, documents and certificates that may
         from time to time be required by Law to effectuate, implement and
         continue the valid and subsisting existence of the Company or to
         dissolve the Company or for any other purpose consistent with this
         Agreement and the transactions contemplated hereby.

               (b) The foregoing power of attorney is hereby declared to be
         irrevocable and a power coupled with an interest, and it shall survive
         and not be affected by the subsequent death, incompetency, disability,
         incapacity, dissolution, bankruptcy or termination of any Shareholder
         and the transfer of all or any portion of such Shareholder's
         Shareholder Interest, and shall extend to all Assignees. Each
         Shareholder hereby agrees to be bound by any representation made by the
         Board of Directors or any Person authorized by the Board of Directors
         acting in good faith pursuant to such power of attorney, and each
         Shareholder hereby waives any and all defenses that may be available to
         contest, negate or disaffirm the action of the Board of Directors or
         such authorized Person taken in good

                                      -8-
<PAGE>
         faith under such power of attorney. Each Shareholder shall execute and
         deliver to the Board of Directors or such authorized Person, within 15
         days after receipt of a request therefor from the Board of Directors or
         such authorized Person, such further designation, powers of attorney
         and other instruments as the Board of Directors or such authorized
         Person deems necessary to effectuate this Agreement and the purposes of
         the Company.

         2.7   Term. The term of the Company commenced on February 14, 2001,
which was the date of the filing of the Organizational Certificate in the office
of the Secretary of State of the State of Delaware, and the Company's existence
shall be perpetual, unless and until the Company is dissolved in accordance with
Article 7.

         2.8   Taxation as Corporation; No State-Law Partnership. The Company
shall elect pursuant to Sections 301.7701-2 and 301.7701-3 of the Treasury
Regulations to be treated as a corporation for all purposes under the Code. The
Shareholders intend that the Company not be a partnership (including a limited
partnership) or joint venture, that no Shareholder be a partner or joint
venturer of any other Shareholder, and that this Agreement may not be construed
to suggest otherwise.

         2.9   Title to Company Assets. Title to Company assets, whether real,
personal or mixed and whether tangible or intangible, shall be deemed to be
owned by the Company as an entity, and no Shareholder, Director or Officer,
individually or collectively, shall have any ownership interest in such Company
assets or any portion thereof. Title to any or all of the Company assets may be
held in the name of the Company or one or more of its Affiliates or one or more
nominees, as the Board of Directors may determine. All Company assets shall be
recorded as the property of the Company in its books and records, irrespective
of the name in which record title to such Company assets is held.

                                   ARTICLE 3
                           Shareholders; Certificates;
                         Transfer of Company Securities

         3.1   Shareholders.

               (a) A Person shall be admitted as a Shareholder, and shall become
         bound by this Agreement, if such Person executes this Agreement or,
         without such execution, if such Person purchases or otherwise acquires
         a Company Security and becomes the Record Holder of such Company
         Security in accordance with the provisions of Section 3.5. Unless
         otherwise provided in this Agreement, a Person may become a Record
         Holder without the consent or approval of any of the Shareholders. All
         rights of Shareholders under this Agreement are owned, and may be
         exercised, only by Record Holders.

               (b) The name and mailing address of each Record Holder shall be
         listed on the books and records of the Company or the Transfer Agent.
         The Secretary of the Company shall be required to update the books and
         records from time to time as necessary to reflect accurately the
         information therein or to cause the Transfer Agent to

                                      -9-
<PAGE>
         do so, as applicable. Company Securities shall be represented by the
         Certificates held by the Shareholders, except as provided in Subsection
         3.4(b).

         3.2   No Liability to Third Parties. No Record Holder, Shareholder or
Beneficial Owner of any Company Security shall be liable for the debts,
obligations or liabilities of the Company, whether arising in contract, tort or
otherwise, by reason of being a Record Holder, Shareholder or Beneficial Owner.

         3.3   No Expulsion. A Shareholder may not be expelled or removed as a
Shareholder.

         3.4   Certificates.

               (a) Certificates evidencing any of the Company Securities
         ("Certificates") shall be in such form, not inconsistent with that
         required by the Act or any other Law and this Agreement, as shall be
         approved by the Board of Directors. Each Certificate shall certify the
         number of Company Securities and the class of such Company Securities
         which the Certificate represents and shall be signed by (i) the
         Chairman of the Board, the President or any Vice President and (ii) the
         Secretary, any Assistant Secretary, the Treasurer or any Assistant
         Treasurer of the Company and countersigned by the Transfer Agent (in
         the event that the Company is not the Transfer Agent); provided,
         however, that any or all of the signatures, including the
         countersignature, on the Certificate may be facsimile. In the event
         that any Officer or Transfer Agent who shall have signed, or whose
         facsimile signature or signatures shall have been placed upon, any such
         Certificate shall have ceased to be such Officer or Transfer Agent
         before such Certificate is issued by the Company, such Certificate may
         nevertheless be issued by the Company with the same effect as if such
         person were such Officer or Transfer Agent on the date of issue.
         Certificates for each class of Company Securities shall be
         consecutively numbered and shall be entered in the books and records of
         the Company as they are issued and shall exhibit the holder's name and
         number of Company Securities, except as provided in Subsection 3.4(b).
         No Certificate shall be valid for any purpose until it has been
         countersigned by the Transfer Agent (in the event that the Company is
         not the Transfer Agent).

               (b) The Company Securities may be represented by global
         certificates issued in the name of Cede & Co. (or such other name as
         the depositary may direct), as nominee for the Depositary Trust
         Company, as depositary for the Company Securities, and Certificates
         shall not be issued to owners of beneficial interests in global
         certificates held by the depositary. Any provision herein calling for
         delivery of Certificates for Company Securities may be satisfied by
         delivering such Company Securities by book-entry transfer to such
         owners of beneficial interests at an account maintained for that
         purpose by the Transfer Agent with the depositary, in accordance with
         arrangements among the depositary and its participants and subject to
         the various policies and procedures that may be adopted by the
         depositary from time to time.

                                      -10-
<PAGE>

         3.5   Register, Registration of Transfer and Exchange.

               (a) The Company shall keep or cause to be kept on behalf of the
         Company a register that, subject to any requirement of the Board of
         Directors and subject to the provisions of Subsection 3.5(b), shall
         provide for the registration and transfer of Company Securities. The
         Transfer Agent is hereby appointed registrar and transfer agent for the
         purpose of registering Company Securities and transfers of Company
         Securities as herein provided. At any time the Transfer Agent may
         resign, by notice to the Board of Directors, or may be removed, with or
         without cause, by the Board of Directors. Such resignation or removal
         shall be effective upon the earlier of (i) the appointment by the Board
         of Directors of a successor Transfer Agent and the acceptance by such
         successor of such appointment, or (ii) the 30th day after notice of
         such resignation or removal was given, whereupon the Company shall act
         as the Transfer Agent until a successor is appointed. The Company shall
         not recognize transfers of Company Securities unless the same are
         effected in the manner described in this Section 3.5. Upon surrender
         for registration of transfer of any Certificate, and subject to the
         provisions of Subsection 3.5(b), the appropriate Officers of the
         Company shall execute, and the Transfer Agent shall countersign and
         deliver, in the name of the holder or the designated transferee or
         transferees, as required pursuant to the Record Holder's instructions,
         one or more new Certificates evidencing the same aggregate number and
         type of Company Securities as were evidenced by the Certificate so
         surrendered.

               (b) The Company shall not recognize any transfer of Company
         Securities until (i) the Certificates evidencing such Company
         Securities are surrendered to the Transfer Agent for registration of
         transfer or (ii) such Company Securities are delivered by book-entry
         transfer to the Shareholder in accordance with Section 3.4(b). No
         charge shall be imposed by the Company for such transfer; provided,
         however, that, as a condition to the issuance of any new Certificate
         under this Section 3.5, the Company may require the payment of a sum
         sufficient to cover any tax or other governmental charge, surety bond
         premium, special charges for services requested by the transferor or
         transferee, or similar fees or charges that may be imposed with respect
         thereto.

               (c) By transfer of Company Securities in accordance with this
         Section 3.5, the transferor shall be deemed to have given the
         transferee the right to be admitted to the Company as a Shareholder,
         and each transferee of Company Securities (including any nominee holder
         or an agent acquiring such Company Securities for the account of
         another Person) shall become a Shareholder with respect to the Company
         Securities so transferred to such Person when any such transfer and
         admission is reflected in the books and records of the Transfer Agent,
         and such Person thereby becomes a Record Holder of such Company
         Securities.

               (d) The Company shall be entitled to recognize the Record Holder
         as the owner of Company Securities and, accordingly, shall not be bound
         to recognize any equitable or other claim to or interest in such
         Company Securities on the part of any other Person, whether or not the
         Company shall have actual or other notice thereof, except as otherwise
         provided by Law. Except as otherwise provided in this Agreement or by
         Law, including the Securities Act, Company Securities shall be freely
         transferable to any

                                      -11-
<PAGE>

         Person. The transfer of any Company Securities and the admission of any
         new Shareholder shall not constitute an amendment to this Agreement.

               (e) Any Share Distribution or other distribution in respect of
         Company Securities shall be made by the Company, directly or through
         the Transfer Agent or through any other Person or agent, only to the
         Record Holders thereof as of the Record Date set by the Board of
         Directors for the Share Distribution or other distribution. The making
         of such Share Distribution or other distribution shall constitute full
         payment and satisfaction of the Company's liability in respect of such
         Share Distribution or other distribution regardless of any claim of any
         Person who may have an interest in such Share Distribution or other
         distribution by reason of an assignment or otherwise.

         3.6   Mutilated, Destroyed, Lost or Stolen Certificates.

               (a) If any mutilated Certificate is surrendered to the Transfer
         Agent, then the appropriate Officers on behalf of the Company shall
         execute, and upon the Company's request the Transfer Agent shall
         countersign and deliver in exchange for, a new Certificate evidencing
         the same aggregate number and type of Company Securities as the
         Certificate so surrendered.

               (b) The appropriate Officers on behalf of the Company shall
         execute, and upon the Company's request the Transfer Agent shall
         countersign and deliver, a new Certificate in place of any Certificate
         previously issued if the Record Holder of the Certificate:

                   (i) makes proof by affidavit in form and substance
               satisfactory to an Officer that a previously issued Certificate
               has been lost, destroyed or stolen;

                   (ii) requests the issuance of a new Certificate before the
               Company has notice that the Certificate has been acquired by a
               purchaser for value in good faith and without notice of an
               adverse claim;

                   (iii) if requested, delivers to the Company a bond, in form
               and substance satisfactory to the Company, with surety or
               sureties and with fixed or open penalty as the Company may
               reasonably direct, in its sole discretion, to indemnify the
               Company and the Transfer Agent against any claim that may be made
               on account of the alleged loss, destruction or theft of the
               Certificate; and

                   (iv) satisfies any other reasonable requirements imposed by
               the Company, including the requirement to make a payment pursuant
               to Subsection 3.6(c).

         If a Shareholder fails to notify the Company within a reasonable time
after such Shareholder has notice of the loss, destruction or theft of a
Certificate, and a transfer of the Company Securities represented by the
Certificate is registered before the Company or the Transfer Agent receives such
notification, the Shareholder shall be precluded from making any claim against
the Company or the Transfer Agent for such transfer or for a new Certificate.

                                      -12-

<PAGE>

               (c) As a condition to the issuance of any new Certificate under
         this Section 3.6, the Company may require the payment of a sum
         sufficient to cover any tax or other governmental charge that may be
         imposed in relation thereto and any other expenses (including the fees
         and expenses of the Transfer Agent) reasonably connected therewith.

                                   ARTICLE 4
                Authorization and Issuance of Company Securities

         4.1   Company Securities.

               (a) The Company shall have authority to issue an unlimited number
         of Company Securities, including Company Securities with the rights set
         forth in Section 4.2 (the "Voting Shares") and Company Securities with
         the rights set forth in Section 4.3 and the Purchase Provisions (the
         "Listed Shares"). Subject to the requirements of the Act and other
         applicable Law, the Board of Directors shall have the power to cause
         the Company to issue additional Listed Shares and Voting Shares. The
         Board of Directors shall also have the power to cause the Company to
         issue shares into which the interest in the Company may be further
         divided other than the Voting Shares and the Listed Shares, subject to
         the requisite approval by the Record Holders of Listed Shares pursuant
         to Subsection 4.3(d)(ii).

               (b) The total number of Company Securities that are issued by the
         Company and reflected as outstanding on the books and records of the
         Company (including the Transfer Agent) as of the date of determination,
         excluding Company Securities held in the treasury, shall at all times
         equal the number of I-Units held by the Company. If the number of
         I-Units held by the Company increases or decreases, the Company shall
         by the same number increase or decrease, as the case may be, the number
         of Company Securities that are issued by the Company and reflected as
         outstanding on the books and records of the Company (including the
         Transfer Agent) as of the date of determination, excluding Company
         Securities held in the treasury, (i) in the event of an increase in the
         number of I-Units, by making to each Record Holder of Company
         Securities a pro rata Share Distribution or by effecting a split of
         Company Securities pursuant to Section 4.5, or (ii) in the event of a
         decrease in the number of I-Units, by effecting a combination of
         Company Securities pursuant to Section 4.5.

               (c) Company Securities issued as Share Distributions or issued
         for such consideration as the Board of Directors determines to be
         appropriate shall be deemed to be fully paid, and except to the extent
         specified in Section 18-607(b) of the Act, non-assessable if the entire
         amount of such consideration has been received by the Company for such
         Company Securities.

         4.2   Voting Shares.

               (a) Prior to the execution of this Agreement, one (1) Voting
         Share was issued to the Organizational Shareholder. The Organizational
         Shareholder and its Affiliates shall be the sole Record Holders of
         Voting Shares. The designations, preferences and relative,

                                      -13-
<PAGE>

         participating, optional or other special rights, powers and duties
         relating to the Voting Shares are as set forth in this Section 4.2.
         Each Voting Share shall be identical in every respect with each other
         Voting Share.

               (b) The Record Holders of Voting Shares shall be entitled to one
         vote per Voting Share on matters submitted to a vote or consent of the
         Record Holders of Voting Shares, as provided in Subsection 4.2(d) and
         elsewhere in this Agreement; provided, however, that neither any Record
         Holder of Voting Shares nor any of its Affiliates may vote any Voting
         Shares with respect to a matter that is presented to the Record Holders
         of Voting Shares pursuant to Subsection 4.2(d) in order to determine
         the manner in which I-Units shall be voted with respect to (i) the
         proposed removal of the general partner of KMEP under Section 13.2 of
         the Partnership Agreement, (ii) any vote required to be taken under
         Section 11.2(a) of the Partnership Agreement with respect to the
         transfer of all, but not less than all, of the Partnership Interest (as
         defined in the Partnership Agreement) of the general partner of KMEP
         and the admission of any such transferee as a general partner of KMEP,
         (iii) a proposed amendment to the terms of the I-Units pursuant to
         Subsection 15.2 of the Partnership Agreement that would have a material
         adverse effect on the rights and preferences of the I-Units in relation
         to other classes of Units, as determined in the sole discretion of the
         Board of Directors, or (iv) the proposed withdrawal of the general
         partner of KMEP pursuant to Section 13.1(b)(i) of the Partnership
         Agreement.

               (c) Except as otherwise provided in Subsection 4.1(b) and Section
         4.5, a Share Distribution in respect of each Voting Share shall be made
         only in the event that (i) KMEP makes a cash distribution in respect of
         each Common Unit and makes a corresponding distribution of an
         additional I-Unit, or fraction thereof, in respect of each I-Unit, or
         (ii) in a merger, consolidation, exchange, reorganization,
         recapitalization or similar transaction the record holders of Common
         Units and Class B Units receive a cash distribution and the record
         holder of I-Units receives a corresponding distribution of additional
         I-Units, or fractions thereof; and no other Share Distribution shall be
         made in respect of Voting Shares. Such Share Distribution in respect of
         each Voting Share shall be made on the date on which KMEP makes a cash
         distribution in respect of each Common Unit. Each such Share
         Distribution per Voting Share shall be an additional Voting Share, or a
         fraction thereof, equal to the amount of the cash distribution made by
         KMEP in respect of each Common Unit divided by the Average Market Price
         per Listed Share. Except as otherwise provided in Section 7.2, no
         distribution in respect of Voting Shares shall be made in cash. Each
         fractional Voting Share that is created as a result of any Share
         Distribution in respect of Voting Shares pursuant to this Subsection
         4.2(c) shall be equal to and represented by a fraction that is
         calculated to six decimal places (without rounding), and any
         calculation that would result in a fractional interest in excess of
         one-millionth (1/1,000,000) of a Voting Share shall be disregarded
         without payment or other consideration and shall not be accumulated.
         Each Voting Share or fraction thereof issued as a Share Distribution
         shall bear a date of original issuance which is the same as the date on
         which such Share Distribution was made and shall be duly authorized,
         fully paid and nonassessable. The Company shall identify the Record
         Holders entitled to receive any Share Distributions pursuant to this
         Subsection 4.2(c) in accordance with Section 3.5.

                                      -14-

<PAGE>
               (d) The Partnership Agreement provides that, except with respect
         to certain matters, including certain amendments to the Partnership
         Agreement, the transfer of all, but not less than all, of the
         Partnership Interest (as defined in the Partnership Agreement) of the
         general partner of KMEP, the withdrawal of the general partner of KMEP
         and the treatment of KMEP as an association taxable as a corporation or
         other entity for federal income tax purposes, I-Units, Class B Units
         and Common Units are entitled to vote together as a single class, and
         each I-Unit is entitled to one vote. The Company or the Board of
         Directors shall submit to the vote of the Record Holders of Voting
         Shares any matter on which the Company is entitled to vote as a record
         holder of I-Units in order to ascertain the manner in which such
         I-Units shall be voted. For each Voting Share or fraction thereof that
         has been voted "for" the matter presented to the Record Holders of
         Voting Shares, the Company shall vote one I-Unit or an equivalent
         fraction "for" such corresponding matter when presented to the record
         holder of I-Units, such that the number of Voting Shares voted "for"
         such matter presented to the Record Holders of Voting Shares, in
         addition to the number of Listed Shares voted "for" such matter
         presented to the Record Holders of Listed Shares pursuant to Subsection
         4.3(c), shall equal the number of I-Units voting "for" such
         corresponding matter when presented to the record holder of I-Units.
         For each Voting Share or fraction thereof that has been voted "against"
         the matter presented to the Record Holders of Voting Shares, the
         Company shall vote one I-Unit or an equivalent fraction "against" such
         matter when presented to the record holder of I-Units, such that the
         number of Voting Shares voted "against" such matter presented to the
         Record Holders of Voting Shares, in addition to the number of Listed
         Shares voted "against" such matter presented to the Record Holders of
         Listed Shares pursuant to Subsection 4.3(c), shall equal the number of
         I-Units voting "against" such corresponding matter when presented to
         the record holder of I-Units. For each Voting Share or fraction thereof
         that has abstained from the vote or has not been voted, whether by
         broker non-vote or otherwise, on the matter presented to the Record
         Holders of Voting Shares, the Company shall abstain from voting one
         I-Unit or an equivalent fraction on such matter when presented to the
         record holder of I-Units, such that the number of Voting Shares that
         have abstained from voting or have not been voted on such matter
         presented to the Record Holders of Voting Shares, in addition to the
         number of Listed Shares that have abstained from voting or have not
         been voted on such matter presented to the Record Holders of Listed
         Shares pursuant to Subsection 4.3(c), shall equal the number of I-Units
         abstaining from voting on such corresponding matter when presented to
         the record holder of I-Units.

         4.3   Listed Shares.

               (a) As of the Closing Date, there shall be Outstanding 14,875,000
         Listed Shares, and, in the event that the Underwriters exercise their
         option to purchase additional Listed Shares pursuant to the
         Underwriting Agreement, there shall be Outstanding up to 17,106,250
         Listed Shares. The Listed Shares shall initially be listed on a
         National Securities Exchange. The designations, preferences and
         relative, participating, optional or other special rights, powers and
         duties relating to the Listed Shares are as set forth in this Section
         4.3. Each Listed Share shall be identical in every respect with each
         other Listed Share.

                                      -15-
<PAGE>
               (b) The Record Holders of Listed Shares, in their capacity as
         such, shall not be entitled to vote except that each Record Holder of
         Listed Shares shall be entitled to one vote per Listed Share on any
         matter submitted by the Company to the Record Holders of Listed Shares
         pursuant to Subsections 4.3(c) or (d) or Article 9 of this Agreement or
         Section 8 of the Purchase Provisions, subject to Subsection 4.3(e).

               (c) The Partnership Agreement provides that, except with respect
         to certain matters, including certain amendments to the Partnership
         Agreement, the transfer of all, but not less than all, of the
         Partnership Interest (as defined in the Partnership Agreement) of the
         general partner of KMEP, the withdrawal of the general partner of KMEP
         and the treatment of KMEP as an association taxable as a corporation or
         other entity for federal income tax purposes, the I-Units, Class B
         Units and Common Units are entitled to vote together as a single class,
         and each I-Unit is entitled to one vote. The Company or the Board of
         Directors shall submit to the vote of the Record Holders of Listed
         Shares entitled to vote any matter on which the Company is entitled to
         vote as a record holder of I-Units in order to ascertain the manner in
         which such I-Units shall be voted. For each Listed Share or fraction
         thereof that has been voted "for" the matter presented to Record
         Holders of Listed Shares entitled to vote thereon, the Company shall
         vote one I-Unit or an equivalent fraction "for" such corresponding
         matter when presented to the record holder of I-Units, such that the
         number of Listed Shares voted "for" such matter presented to the Record
         Holders of Listed Shares, in addition to the number of Voting Shares
         voted "for" such matter presented to the Record Holders of Voting
         Shares pursuant to Subsection 4.2(d), shall equal the number of I-Units
         voting "for" such corresponding matter when presented to the record
         holder of I-Units. For each Listed Share or fraction thereof that has
         been voted "against" the matter presented to Record Holders of Listed
         Shares entitled to vote thereon, the Company shall vote one I-Unit or
         an equivalent fraction "against" such matter when presented to the
         record holder of I-Units, such that the number of Listed Shares voted
         "against" such matter presented to the Record Holders of Listed Shares,
         in addition to the number of Voting Shares voted "against" such matter
         presented to the Record Holders of Voting Shares pursuant to Subsection
         4.2(d), shall equal the number of I-Units voting "against" such
         corresponding matter when presented to the record holder of I-Units.
         For each Listed Share or fraction thereof that has abstained from the
         vote or has not been voted, whether by broker non-vote or otherwise, on
         the matter presented to Record Holders of Listed Shares entitled to
         vote thereon, the Company shall abstain from voting one I-Unit or an
         equivalent fraction on such matter when presented to the record holder
         of I-Units, such that the number of Listed Shares that have abstained
         from voting or have not been voted on such matter presented to the
         Record Holders of Listed Shares, in addition to the number of Voting
         Shares that have abstained from voting or have not been voted on such
         matter presented to the Record Holders of Voting Shares pursuant to
         Subsection 4.2(d), shall equal the number of I-Units abstaining from
         voting on such corresponding matter when presented to the record holder
         of I-Units.

               (d) The Company or the Board of Directors shall submit to the
         vote of Record Holders of Listed Shares entitled to vote thereon, in
         addition to the matters referred to in Subsection 4.3(c), (i) any
         matter for which the approval of the Record Holders of Listed Shares is
         required pursuant to Article 9, (ii) any proposed issuance of any new
         shares into

                                      -16-

<PAGE>
         which the interest in the Company may be divided other than the Voting
         Shares and the Listed Shares, and (iii) any proposed amendment to, or
         alteration or repeal of, this Agreement, including the Purchase
         Provisions, the Registration Rights Agreement, the Delegation of
         Control Agreement, or the Tax Indemnification Agreement if such
         proposed amendment, alteration or repeal would (A) reduce the time for
         any notice to which Record Holders of Listed Shares would be entitled,
         or (B) have a material adverse effect on the rights or preferences of
         Listed Shares, as determined in the sole discretion of the Board of
         Directors; provided, however, that any of the following amendments
         shall not be deemed to have a material adverse effect on the rights and
         preferences of Listed Shares: (1) any amendment that is necessary or
         desirable to comply with applicable Law, compliance with which the
         Board of Directors determines in its sole discretion to be in the best
         interests of the Company and the Shareholders, and (2) any amendment
         that is required to effect the intent of the provisions of this
         Agreement or is otherwise contemplated by this Agreement.

               (e) The following Persons or Groups, as the case may be, shall
         not be entitled to vote in their capacities as Record Holders of Listed
         Shares: (i) any Person or Group, excluding the Record Holders of Voting
         Shares and their Affiliates, if the sum of the number of Listed Shares
         Beneficially Owned by such Person or Group plus the number of Common
         Units Beneficially Owned by such Person or Group equals 20% or more of
         the sum of the aggregate number of Listed Shares that are Outstanding
         plus the aggregate number of Common Units that are Outstanding, and
         (ii) the Record Holders of Voting Shares and their Affiliates with
         respect to (A) a matter that is presented to the Record Holders of
         Listed Shares pursuant to Subsection 4.3(c) in order to determine the
         manner in which I-Units shall be voted with respect to (1) the proposed
         removal of the general partner of KMEP under Section 13.2 of the
         Partnership Agreement, (2) any vote required to be taken under Section
         11.2(a) of the Partnership Agreement with respect to the transfer of
         all, but not less than all, of the Partnership Interest (as defined in
         the Partnership Agreement) of the general partner of KMEP and the
         admission of any such transferee as a general partner of KMEP, (3) a
         proposed amendment to the terms of the I-Units pursuant to Subsection
         15.2 of the Partnership Agreement that would have a material adverse
         effect on the rights and preferences of the I-Units in relation to
         other classes of Units, as determined in the sole discretion of the
         Board of Directors, or (4) the proposed withdrawal of the general
         partner of KMEP pursuant to Section 13.1(b)(i) of the Partnership
         Agreement, and (B) a matter that is presented to the Record Holders of
         Listed Shares pursuant to Subsection 4.3(d).

               (f) Except as otherwise provided in Subsection 4.1(b) and Section
         4.5, a Share Distribution in respect of each Listed Share shall be made
         only in the event that (i) KMEP pays a cash distribution in respect of
         each Common Unit and pays a corresponding distribution of additional
         I-Units, or fractions thereof, in respect of the I-Units, or (ii) in a
         merger, consolidation, exchange, reorganization, recapitalization or
         similar transaction, the record holders of Common Units and Class B
         Units receive a cash distribution and the record holder of I-Units
         receives a corresponding distribution of additional I-Units, or
         fractions thereof; and no other Share Distribution shall be made in
         respect of each Listed Share. Except as provided in the Purchase
         Provisions, such Share Distribution in respect of each Listed Share
         shall be made on the date on which KMEP

                                      -17-
<PAGE>
         makes a cash distribution in respect of each Common Unit. Each such
         Share Distribution per Listed Share shall be an additional Listed
         Share, or a fraction thereof, equal to the amount of the cash
         distribution made by KMEP in respect of each Common Unit divided by the
         Average Market Price per Listed Share. Except as otherwise provided in
         Subsection 7.2(b), no distribution in respect of Listed Shares shall be
         made in cash. Each fractional Listed Share that is created as a result
         of any Share Distribution in respect of Listed Shares pursuant to this
         Subsection 4.3(f) shall be equal to and represented by a fraction that
         is calculated to six decimal places (without rounding), and any
         calculation that would result in a fractional interest in excess of
         one-millionth (1/1,000,000) of a Listed Share shall be disregarded
         without payment or other consideration and shall not be accumulated.
         Each Listed Share or fraction thereof issued as a Share Distribution
         shall bear a date of original issuance which is the same as the date on
         which such Share Distribution was made and shall be duly authorized,
         fully paid and nonassessable. The Company shall identify the Record
         Holders entitled to receive any Share Distribution in accordance with
         Section 3.5.

               (g) Under certain circumstances set forth in the Purchase
         Provisions, Shareholders may be required to sell their Listed Shares to
         the Purchaser (as defined in the Purchase Provisions). The Purchase
         Provisions also set forth the rights of the Record Holders of Listed
         Shares to any distributions, including Share Distributions, on Listed
         Shares that have been declared (or a record date for which has been
         set) but that have not been paid or made. The Purchase Provisions are
         attached as Annex B and are an integral part of this Agreement.

               (h) Fractions of Listed Shares shall not be sold on a National
         Securities Exchange until they equal, in the aggregate, whole Listed
         Shares.

         4.4   Splits and Combinations. The Board of Directors may make a pro
rata distribution of Company Securities to all Record Holders or may effect a
subdivision or combination of Company Securities; provided, however, that after
such distribution, subdivision or combination, each Shareholder shall have the
same relative Shareholder Interest as before such distribution, subdivision or
combination. In the event that (a) KMEP makes a pro rata distribution of KMEP
securities to the record holder of all I-Units, (b) KMEP effects a subdivision
or combination of the I-Units, or (c) KMEP is involved in a merger or similar
transaction which has the effect of converting, subdividing or combining the
I-Units, then the Board of Directors shall be required to make a corresponding
distribution, adjustment, conversion, subdivision or combination of the Company
Securities so that the number of outstanding I-Units and the aggregate number of
Company Securities that are issued by the Company and reflected as outstanding
on the books and records of the Company (including the Transfer Agent) as of the
date of determination, excluding Company Securities held in the treasury, shall
always be equal. Each fractional Company Security that is created as a result of
any distribution, subdivision or combination pursuant to this Section 4.5 shall
be equal to and represented by a fraction that is calculated to six decimal
places (without rounding), and any calculation that would result in a fractional
interest in excess of one-millionth (1/1,000,000) of a Company Security shall be
disregarded without payment or other consideration and shall not be accumulated.

                                      -18-

<PAGE>
         4.5 Withholding. Notwithstanding any other provision of this Agreement,
the Company shall comply with any withholding requirements under any Law in
connection with the payment of Share Distributions and other distributions in
respect of Company Securities and shall remit amounts withheld to and file
required forms with applicable taxing authorities. In the event of any claimed
over-withholding, Shareholders shall be limited to an action against the
applicable taxing authority. If an amount required to be withheld was not
withheld from an actual Share Distribution or other distribution, the Company
may reduce subsequent Share Distributions or other distributions by the amount
of such required withholding. Each Shareholder agrees to furnish the Company
such forms or other documentation as are necessary to assist the Company in
determining the extent of, and in fulfilling, its withholding obligations.

                                   ARTICLE 5
                                   Management

         5.1   Management of the Company's Affairs.

               (a) As provided in this Agreement, all management powers over the
         business and affairs of the Company shall be vested exclusively in a
         board of directors (the "Board of Directors") and, subject to the
         direction of the Board of Directors, the Officers. Officers and
         Directors constitute "managers" of the Company within the meaning of
         the Act.

               (b) No Shareholder, in its capacity as a Shareholder, shall have
         any management power over the business and affairs of the Company or
         actual or apparent authority to enter into contracts on behalf of, or
         to otherwise bind, the Company.

               (c) The Board of Directors (subject to Section 5.3 and Article 9)
         and the Officers (subject to Section 5.4 and the direction of the Board
         of Directors) shall have full power and authority, in addition to the
         powers that now or hereafter can be granted to managers under the Act
         and to all other powers granted under any other provision of this
         Agreement or the Partnership Agreement to do all things on such terms
         as they, in their individual sole discretion, may deem necessary or
         appropriate, to conduct, or cause to be conducted, the business and
         affairs of the Company, except as set forth in the Delegation of
         Control Agreement.

               (d) It is expected that KMEP shall pay, or shall reimburse the
         Company for the payment of, all expenses incurred by the Company,
         including expenses in connection with (i) audits; (ii) filings with the
         Securities and Exchange Commission and any state securities agency;
         (iii) meetings of the Record Holders of Company Securities; (iv) the
         preparation, filing and distribution of proxy materials; (v)
         compensation to, and reimbursement of expenses incurred by, Officers
         and Directors, as provided under Section 5.5; (vi) winding up, as
         provided under Section 7.2; and (vii) foreign, state and local taxes
         not paid or reimbursed pursuant to the Tax Indemnification Agreement.
         However, to the extent that KMEP does not pay, or reimburse the Company
         for the payment of, the aforementioned expenses, Organizational
         Shareholder shall pay, or shall reimburse the Company for the payment
         of, all such expenses.

                                      -19-
<PAGE>
         5.2   Board of Directors.

               (a) Number. The number of Directors of the Company shall be
         established from time to time by the Record Holders of Voting Shares.
         Each Director shall be elected as provided in Subsection 5.2(b) and
         shall serve in such capacity until his successor has been elected and
         qualified or until such Director dies, resigns or is removed. The
         initial Board of Directors shall consist of six Directors.

               (b) Election of Directors; Term. The Record Holders of Voting
         Shares shall elect annually, whether at a meeting of the Record Holders
         of Voting Shares or by consent in accordance with Section 8.10, new
         Directors or shall re-elect existing Directors, each to serve a
         one-year term.

               (c) Vacancies and Removal. Subject to applicable Law, vacancies
         existing on the Board of Directors (including a vacancy created by
         virtue of an increase in the size of the Board of Directors) shall be
         filled by the Record Holders of Voting Shares or by the affirmative
         vote of a majority of the Directors then serving, even if less than a
         quorum. Each Director elected to fill any vacancy shall serve in such
         capacity until his successor has been elected and qualified or until
         such Director dies, resigns or is removed. Any Director, or the entire
         Board of Directors, may be removed from office at any time, with or
         without cause, but only by the approval of the Record Holders of Voting
         Shares.

               (d) Voting; Quorum; Required Vote for Action. Unless otherwise
         required by the Act, other Law, or the provisions hereof:

                   (i) each member of the Board of Directors shall have one
               vote;

                   (ii) the presence at a meeting of a majority of the members
               of the Board of Directors shall constitute a quorum at any such
               meeting for the transaction of business; and

                   (iii) the act of a majority of the members of the Board of
               Directors present at a meeting at which a quorum is present shall
               be deemed to constitute the act of the Board of Directors.

               (e) Meetings. Regular meetings of the Board of Directors shall be
         held at such times and places as shall be designated from time to time
         by resolution of the Board of Directors. Notice of such regular
         meetings shall not be required. Special meetings of the Board of
         Directors or meetings of any committee thereof may be called by the
         Chairman of the Board, the President (should the President be a
         Director) or on the written request of any two Directors or committee
         members, as applicable, by the Secretary, in each case on at least 24
         hours personal, written, telegraphic, cable or wireless notice to each
         Director or committee member, as applicable. Any such notice, or waiver
         thereof, need not state the purpose of such meeting except as may
         otherwise be required by Law. Attendance of a Director at a meeting
         (including pursuant to the last sentence of this Subsection 5.2(e))
         shall constitute a waiver of notice of such meeting, except where such
         Director attends the meeting for the express purpose of objecting to
         the transaction of any business on the ground that the meeting is not
         lawfully called or

                                      -20-
<PAGE>
         convened. Any action required or permitted to be taken at a meeting of
         the Board of Directors or any committee thereof may be taken without a
         meeting, without prior notice and without a vote if a consent or
         consents in writing, setting forth the action so taken, are signed by a
         majority of the members of the Board of Directors or committee. Members
         of the Board of Directors or any committee thereof may participate in
         and hold a meeting by means of conference telephone, video conference
         or similar communications equipment by means of which all Persons
         participating in the meeting can hear each other, and participation in
         such meetings shall constitute presence in person at the meeting.

               (f) Committees. The Board of Directors, by a majority of the
         whole Board of Directors, may appoint one or more other committees of
         the Board of Directors to consist of two or more Directors, which
         committee(s) shall have and may exercise such of the powers and
         authority of the Board of Directors with respect to the management of
         the business and affairs of the Company as may be provided in a
         resolution of the Board of Directors. Any committee designated pursuant
         to this Subsection 5.2(f) shall choose its own chairman, shall keep
         regular minutes of its proceedings and report the same to the Board of
         Directors when requested, shall fix its own rules or procedures and
         shall meet at such times and at such place or places as may be provided
         by such rules or by resolution of such committee or resolution of the
         Board of Directors. At every meeting of any such committee, the
         presence of a majority of all the members thereof shall constitute a
         quorum and the act of a majority of such members present shall be
         deemed to constitute the act of such committee. The Board of Directors
         may designate one or more Directors as alternate members of any
         committee who may replace any absent or disqualified member at any
         meeting of such committee. In the absence or disqualification of a
         member of a committee, the member or members present at any meeting and
         not disqualified from voting, whether or not constituting a quorum, may
         unanimously appoint another member of the Board of Directors to act at
         the meeting in the place of the absent or disqualified member.

               (g) Chairman. The Board of Directors shall elect a chairman of
         the Board of Directors (the "Chairman of the Board"). The Chairman of
         the Board, if present and acting, shall preside at all meetings of the
         Board of Directors and of the Shareholders. Otherwise, the President,
         if present, and a Director, or any other Director chosen by the Board
         of Directors, shall preside. Unless the Board of Directors provides
         otherwise, the Chairman of the Board shall be an Officer of the Company
         and shall have the same power and authority as the President.

         5.3   Restrictions on the Board of Directors' Authority. Except as
otherwise specifically provided in this Agreement or by resolution of the Board
of Directors, (1) no Director or group of Directors shall have any actual or
apparent authority to enter into contracts on behalf of, or to otherwise bind,
the Company, nor to take any action in the name of or on behalf of the Company
or conduct any business of the Company other than by action of the Board of
Directors taken in accordance with the provisions of this Agreement, and (2) no
Director shall have the power or authority to delegate to any Person such
Director's rights and powers as a Director to manage the business and affairs of
the Company.

                                      -21-
<PAGE>

         5.4   Officers.

               (a) Generally. The Board of Directors shall appoint agents of the
         Company, referred to as "Officers" of the Company, to serve in the
         offices set forth in this Section 5.4. Unless provided otherwise by
         resolution of the Board of Directors, the Officers shall have the
         titles, power, authority and duties described below in this Section
         5.4.

               (b) Titles and Number. The Officers of the Company shall be the
         Chairman of the Board, the President, any and all Vice Presidents, the
         Secretary, the Treasurer, any and all Assistant Secretaries, and any
         and all Assistant Treasurers and any other officer position or title as
         the Board of Directors may desire. Any person may hold two or more
         offices simultaneously.

               (c) Appointment and Term of Office. The Officers shall be
         appointed by the Board of Directors at such time and for such term as
         the Board of Directors shall determine. Any Officer may be removed,
         with or without cause, only by the Board of Directors. Vacancies in any
         office may be filled only by the Board of Directors.

               (d) Chairman of the Board. Subject to the limitations imposed by
         this Agreement, any employment agreement, any employee plan or any
         determination of the Board of Directors, the Chairman of the Board,
         subject to the direction of the Board of Directors, shall preside at
         all meetings of the Shareholders and the Board of Directors, shall
         supervise generally the President and shall have full authority to
         execute all documents and take all actions that the Company may legally
         take. The Chairman of the Board shall exercise such other powers and
         perform such other duties as may be assigned to him by this Agreement
         or the Board of Directors, including any duties and powers stated in
         any employment agreement approved by the Board of Directors.

               (e) President. The President shall be the Chief Executive Officer
         of the Company unless the Chairman of the Board is so designated, in
         which event the President shall be the Chief Operating Officer of the
         Company. In the absence of the Chairman of the Board, or if there be no
         Chairman of the Board, he shall preside at all meetings of the
         Shareholders and Directors. The Chief Executive Officer, whether the
         Chairman of the Board or the President, shall be ex officio a member of
         all standing committees, shall have general and active management and
         control of the business and affairs of the Company subject to the
         control of the Board of Directors, and shall see that all orders and
         resolutions of the Board of Directors are carried into effect.

               (f) Vice Presidents. In the absence of the President and the
         Chairman of the Board, each Vice President appointed by the Board of
         Directors shall have all of the powers and duties conferred upon the
         President, including the same power as the President to execute
         documents on behalf of the Company. Each such Vice President shall
         perform such other duties and may exercise such other powers as may
         from time to time be assigned to him by the Board of Directors, the
         Chairman of the Board or the President.

                                      -22-
<PAGE>
               (g) Secretary and Assistant Secretaries. The Secretary shall
         record or cause to be recorded in books provided for that purpose the
         minutes of the meetings or actions of the Board of Directors and
         Shareholders, shall see that all notices are duly given in accordance
         with the provisions of this Agreement and as required by Law, shall be
         custodian of all records (other than financial), shall see that the
         books, reports, statements, certificates and all other documents and
         records required by Law are properly kept and filed, and, in general,
         shall perform all duties incident to the office of Secretary and such
         other duties as may, from time to time, be assigned to him by this
         Agreement, the Board of Directors, the Chairman of the Board or the
         President. The Assistant Secretaries shall exercise the powers of the
         Secretary during that Officer's absence or inability or refusal to act.

               (h) Treasurer and Assistant Treasurers. The Treasurer shall keep
         or cause to be kept the books of account of the Company and shall
         render statements of the financial affairs of the Company in such form
         and as often as required by this Agreement, the Board of Directors, the
         Chairman of the Board or the President. The Treasurer, subject to the
         order of the Board of Directors, shall have the custody of all funds
         and securities of the Company. The Treasurer shall perform all other
         duties commonly incident to his office and shall perform such other
         duties and have such other powers as this Agreement, the Board of
         Directors, the Chairman of the Board or the President shall designate
         from time to time. The Assistant Treasurers shall exercise the power of
         the Treasurer during that Officer's absence or inability or refusal to
         act. Each of the Assistant Treasurers shall possess the same power as
         the Treasurer to sign all certificates, contracts, obligations and
         other instruments of the Company. If no Treasurer or Assistant
         Treasurer is appointed and serving or in the absence of the appointed
         Treasurer and Assistant Treasurer, such other Officer as the Board of
         Directors shall select shall have the powers and duties conferred upon
         the Treasurer.

               (i) Powers of Attorney. The Company may grant powers of attorney
         or other authority as appropriate to establish and evidence the
         authority of the Officers and other Persons.

               (j) Delegation of Authority. Unless otherwise provided by
         resolution of the Board of Directors, no Officer shall have the power
         or authority to delegate to any Person such Officer's rights and powers
         as an Officer to manage the business and affairs of the Company.

         5.5   Compensation. The Officers shall receive such compensation for
their services as may be designated by the Board of Directors. In addition, the
Officers shall be entitled to be reimbursed for out-of-pocket costs and expenses
incurred in the course of their service hereunder. The members of the Board of
Directors who are not employees of the Company or any Affiliate thereof shall
receive such compensation for their services as Directors or committee members
as the Board of Directors shall determine. The members of the Board of Directors
who are employees of the Company or any Affiliate thereof shall receive no
compensation for their services as Directors or committee members. All the
members of the Board of Directors shall be entitled to be reimbursed for
out-of-pocket costs and expenses incurred in the course of their service
hereunder.

                                      -23-
<PAGE>
         5.6   Business Opportunities.

               (a) No Indemnitee shall be expressly or implicitly restricted or
         proscribed pursuant to this Agreement, by Law or otherwise from
         engaging in other activities for profit, whether in the businesses
         engaged in by the Company or any Shareholder or anticipated to be
         engaged in by the Company or any Shareholder. Without limitation of and
         subject to the foregoing, each Indemnitee shall have the right to
         engage in businesses of every type and description and to engage in and
         possess an interest in other business ventures of any and every type or
         description, independently or with others, including, without
         limitation, business interests and activities in direct competition
         with the Company or any Shareholder, and none of the same shall breach
         any duty to the Company or any Shareholder. Neither the Company, the
         Shareholder nor any other Person shall have any rights by virtue of
         this Agreement, by Law or otherwise in any business ventures of any
         Indemnitee and such Indemnitees shall have no obligation to offer any
         interest in any such business ventures to the Company, any Shareholder
         or any other Person.

               (b) Without limitation of Subsection 5.6(a), and notwithstanding
         anything to the contrary in this Agreement, the competitive activities
         of Indemnitees and the restrictions on the Company's activities
         described in Section 2.4 are hereby approved by the Company and all
         Shareholders, and it shall not be deemed to be a breach of the
         fiduciary duty (if any such duty is owed) of the Board of Directors or
         the Record Holders of Voting Shares for the Board of Directors or the
         Record Holders of Voting Shares to permit an Indemnitee to engage in a
         business opportunity in preference to or to the exclusion of the
         Company or any other Shareholder, if such activities are permitted by
         this Agreement.

         5.7   Interested Officers or Directors. No contract or transaction
between the Company, on one hand, and the Record Holders of Voting Shares, any
Affiliate thereof or any other Entity, on the other, in which an Officer or
Director Beneficially Owns an interest or of which such Officer or Director is
an Affiliate, or between the Company, on one hand, and any of its Officers or
Directors, on the other, shall be void or voidable for this reason or because
the Officer or Director is present at or participates in the meeting of the
Board of Directors or committee thereof that authorizes the contract or
transaction, or because his vote is counted for such purpose, if such contract
or transaction is:

               (a) approved by a committee of the Board composed solely of
         members who have no interest in the contract or transaction;

               (b) on terms no less favorable than those generally being
         provided to or available from unrelated third parties, as determined in
         the sole discretion of the Board of Directors; or

               (c) fair, taking into account the totality of the relationships
         between the parties involved, including other transactions between the
         parties, as determined in the sole discretion of the Board of
         Directors.

                                      -24-
<PAGE>
         5.8   Duties of Record Holders of Voting Shares and Directors.

               (a) Except as otherwise provided in this Agreement, the Record
         Holders of Voting Shares, the Directors and any of their Affiliates
         shall have no obligations whatsoever, by virtue of the relationships
         established pursuant to this Agreement, to take or refrain from taking
         any action that may impact the Company, the Shareholders or any
         Affiliate of the Company or a Shareholder.

               (b) The provisions of this Agreement, including Sections 5.6, 5.7
         and 5.8, constitute an agreement to restrict or eliminate fiduciary and
         other duties pursuant to the provisions of Section 18-1101 of the Act.

         5.9   Indemnification.

               (a) The Indemnitees shall be entitled to mandatory
         indemnification and shall be entitled to be held harmless by KMEP and
         the Operating Partnerships to the extent and subject to the conditions
         provided in Section 6 of the Delegation of Control Agreement with the
         Organizational Shareholder, in its capacity as general partner of KMEP
         and the Operating Partnerships, hereby deeming it advisable that such
         indemnification and holding harmless shall (rather than may) be done
         and provided by KMEP and the Operating Partnerships to the fullest
         extent and subject to the conditions provided therein.

               (b) To the extent that the indemnification provisions of Section
         6 of the Delegation of Control Agreement do not fully hold harmless any
         of the Indemnitees, then to the fullest extent permitted by Law but
         subject to the limitations expressly provided in this Agreement, such
         Indemnitees shall be indemnified and held harmless by the Company, to
         the extent deemed advisable by the Board of Directors, from and against
         any and all losses, claims, damages, liabilities, joint or several,
         expenses (including legal fees and expenses), judgments, fines,
         penalties, interest, settlements and other amounts arising from any and
         all claims, demands, actions, suits or proceedings, whether civil,
         criminal, administrative or investigative, in which any Indemnitee may
         be involved, or is threatened to be involved, as a party or otherwise,
         by reason of its status as (i) a Record Holder of Voting Shares or any
         Affiliate thereof; (ii) an officer, director, employee, partner, agent
         or trustee of a Record Holder of Voting Shares, the Company or any of
         their Affiliates; or (iii) a Person serving at the request of the
         Company in another Entity in a similar capacity, provided, that in each
         case the Indemnitee acted or failed to act in good faith and in the
         manner which such Indemnitee reasonably believed to be in, or not
         opposed to, the best interests of the Company, and, with respect to any
         criminal proceeding, had no reasonable cause to believe such conduct
         was unlawful. The termination of any action, suit or proceeding by
         judgment, order, settlement, conviction or upon a plea of nolo
         contendere, or its equivalent, shall not create a presumption that the
         Indemnitee acted in a manner contrary to that specified above. Any
         indemnification pursuant to this Subsection 5.9(b) shall be made only
         out of the assets of the Company, it being agreed that no Shareholder,
         in its capacity as such, shall be personally liable for such
         indemnification nor shall it have any obligation to contribute or loan
         any monies or property to the Company to enable the Company to
         effectuate such indemnification. The indemnification provided by this
         Subsection 5.9(b) shall be secondary to any other rights

                                      -25-
<PAGE>
         to which an Indemnitee may be entitled as contemplated under the
         Delegation of Control Agreement or any other agreement, pursuant to any
         vote of the Record Holders of Voting Shares, as a matter of Law or
         otherwise, both as to actions in the Indemnitee's capacity as (A) a
         Record Holder of Voting Shares or an Affiliate thereof; (B) an officer,
         director, employee, partner, agent or trustee of a Record Holder of
         Voting Shares, the Company or any of their Affiliates; or (C) a Person
         serving at the request of the Company in another Entity in a similar
         capacity, and as to actions in any other capacity (including any
         capacity under the Underwriting Agreement), and shall continue as to an
         Indemnitee who has ceased to serve in such capacity and shall inure to
         the benefit of the heirs, successors, assigns and administrators of the
         Indemnitee.

               (c) To the fullest extent permitted by Law, expenses (including
         legal fees and expenses) incurred by an Indemnitee who is indemnified
         pursuant to Subsections 5.9(a) or 5.9(b) in defending any claim,
         demand, action, suit or proceeding shall, from time to time, be
         advanced by the Company prior to the final disposition of such claim,
         demand, action, suit or proceeding upon receipt by the Company of a
         written undertaking by or on behalf of the Indemnitee to repay such
         amount if it shall be determined that the Indemnitee is not entitled to
         be indemnified as authorized in this Section 5.9.

               (d) The Organizational Shareholder may purchase and maintain
         insurance, on behalf of the Persons as the Board of Directors shall
         determine, against any liability that may be asserted against, or
         expense that may be incurred by, such Person in connection with the
         Company's activities, regardless of whether the Company would have the
         power to indemnify such Person against such liability under the
         provisions of this Agreement.

               (e) For purposes of this Section 5.9, the Company shall be deemed
         to have requested an Indemnitee to serve as fiduciary of an employee
         benefit plan whenever the performance by it of its duties to the
         Company also imposes duties on, or otherwise involves services by, it
         to the plan or participants or beneficiaries of the plan; excise taxes
         assessed on an Indemnitee with respect to an employee benefit plan
         pursuant to applicable law shall constitute "fines" for purposes of
         indemnities contemplated by Subsections 5.9(a) and 5.9(b); and action
         taken or omitted by it with respect to an employee benefit plan in the
         performance of its duties for a purpose reasonably believed by it to be
         in the interest of the participants and beneficiaries of the plan shall
         be deemed to be for a purpose which is in, or not opposed to, the best
         interests of the Company.

               (f) In no event may an Indemnitee subject the Shareholders to
         personal liability by reason of the indemnification provisions set
         forth in this Agreement.

               (g) An Indemnitee shall not be denied indemnification in whole or
         in part contemplated under this Section 5.9 because the Indemnitee had
         an interest in the transaction with respect to which the
         indemnification applies if the transaction was otherwise permitted by
         the terms of this Agreement.

               (h) The provisions of this Section 5.9 are for the benefit of the
         Indemnitees, their heirs, successors, assigns and administrators and
         shall not be deemed to create any rights for the benefit of any other
         Persons.

                                      -26
<PAGE>
               (i) No amendment, modification or repeal of this Section 5.9 or
         any provision hereof shall in any manner terminate, reduce or impair
         the right of any past, present or future Indemnitee to be indemnified
         by the Company, nor the obligation of the Company to indemnify any such
         Indemnitee under and in accordance with the provisions of this Section
         5.9 as in effect immediately prior to such amendment, modification or
         repeal with respect to claims arising from or relating to matters
         occurring, in whole or in part, prior to such amendment, modification
         or repeal, regardless of when such claims may arise or be asserted.
         Notwithstanding the foregoing, nothing herein shall limit the power or
         authority of the Partnership or any Operating Partnership to amend any
         provisions of the Partnership Agreement regarding indemnification and
         reimbursement or similar provisions.

         5.10   Liability of Indemnitees.

               (a) Notwithstanding anything to the contrary set forth in this
         Agreement, no Indemnitee shall be liable for monetary damages to the
         Company, the Shareholders or any other Person for losses sustained or
         liabilities incurred as a result of any act or omission constituting a
         breach of such Indemnitee's fiduciary duty, in the event that such a
         duty is found to exist, if such Indemnitee acted in good faith and in
         the manner which such Indemnitee reasonably believed to be in, or not
         opposed to, the best interests of the Company, and, with respect to any
         criminal proceeding, had no reasonable cause to believe such conduct
         was unlawful.

               (b) Subject to its obligations and duties as set forth in this
         Article 5, the Board of Directors and any committee thereof may
         exercise any of the powers granted to it by this Agreement and perform
         any of the duties imposed upon it hereunder either directly or by or
         through the Company's agents, and neither the Board of Directors nor
         any committee thereof shall be responsible for any misconduct or
         negligence on the part of any such agent appointed by the Board of
         Directors or any committee thereof in good faith.

               (c) Any amendment, modification or repeal of this Section 5.10
         or any provision hereof shall be prospective only and shall not in any
         way affect the limitations on liability under this Section 5.10 as in
         effect immediately prior to such amendment, modification or repeal with
         respect to claims arising from or relating to matters occurring, in
         whole or in part, prior to such amendment, modification or repeal,
         regardless of when such claims may arise or be asserted.

         5.11   Facsimile Signatures.  In addition to the provisions for the use
of facsimile signatures elsewhere specifically authorized in this Agreement,
facsimile signatures of any Officer of the Company may be used whenever and as
authorized by the Board of Directors.

                                      -27-
<PAGE>
                                   ARTICLE 6
                               Books and Records;
                            Information and Accounts

         6.1   Maintenance of Books and Records. The Company shall keep at its
principal office complete and accurate books and records of the Company,
supporting documentation of the transactions with respect to the conduct of the
Company's business and affairs and minutes of the proceedings of the Board of
Directors, the Shareholders and each committee of the Board of Directors. The
records shall include: (a) complete and accurate information regarding the state
of the business and financial condition of the Company; (b) a copy of this
Agreement and the Organizational Certificate; (c) a current list of the names
and last known business, residence, or mailing addresses of all Directors and
Officers; and (d) the Company's federal, state and local tax returns for the
Company's six most recent tax years.

         6.2   Information. In addition to the other rights specifically set
forth in this Agreement and subject to such reasonable standards (including
standards governing what information and documents are to be furnished and at
what time and location and at whose expense) as may be established by the Board
of Directors or any Officer, each Shareholder is entitled to all information to
which a member of a Delaware limited liability company is entitled to have
access pursuant to the Act under the circumstances and subject to the conditions
therein stated.

         6.3   Accounts. The Board of Directors may establish, or direct or
authorize any Officer to establish, one or more separate bank and investment
accounts and arrangements for the Company, which shall be maintained in the
Company's name with financial institutions and firms that the Board of
Directors, or any Officer so directed or authorized, determines.

                                   ARTICLE 7
                     Dissolution, Winding-Up and Termination

         7.1   Dissolution.

               (a) The Company shall dissolve and its affairs shall be wound up
         on the first to occur of the following events (each a "Dissolution
         Event"):

                   (i) entry of a decree of judicial dissolution of the Company
               under Section 18-802 of the Act;

                   (ii) the approval of the Record Holders of Voting Shares and
               the Record Holders of a majority of the Listed Shares then
               Outstanding; or

                   (iii) the approval of Record Holders of Listed Shares owning
               at least 66 2/3% of the Listed Shares then Outstanding.

               (b) Neither the death, dissolution or Bankruptcy of any
         Shareholder nor the occurrence of any other event that causes a
         Shareholder to cease to be a member of the Company shall constitute a
         Dissolution Event, and the business of the Company shall be continued
         after such event.

                                      -28-
<PAGE>
         7.2   Winding-Up and Termination.

               (a) On the occurrence of a Dissolution Event, the Board of
         Directors shall select one or more Persons to act as liquidator. The
         liquidator shall proceed diligently to wind up the affairs of the
         Company and make final distributions as provided herein and in the Act.
         The costs of winding up shall be borne as a Company expense. Until
         final distribution, the liquidator shall continue to operate the
         Company's properties with all of the power and authority of the Board
         of Directors.

               (b) Any assets of the Company remaining after satisfaction of the
         liabilities of the Company (whether by payment or by reasonable
         provisions for payment) shall be distributed on a share-for-share basis
         on all Outstanding Company Securities.

               (c) On completion of such final distribution, the liquidator
         shall file a Certificate of Cancellation with the Secretary of State of
         the State of Delaware, cancel any other filings made pursuant to
         Section 2.5, and take such other actions as may be necessary to
         terminate the existence of the Company.

                                   ARTICLE 8
                             Amendment of Agreement;
                        Shareholder Meetings; Record Date

         8.1   Amendment Procedures.

               (a) Any provision of this Agreement, including the Purchase
         Provisions, may be amended by the Record Holders of Voting Shares
         without the approval of any other Shareholder; provided, however, that
         with respect to any matter for which the approval of the Record Holders
         of Listed Shares entitled to vote thereon is required pursuant to
         Subsection 4.3(d), then such amendment shall be not be effective until
         such Record Holders of Listed Shares have so approved.

               (b) Any proposed amendment that requires the approval of the
         Record Holders of any Company Securities shall be explained in a
         writing that contains the text of the proposed amendment. If such an
         amendment is proposed, the Board of Directors shall seek the written
         approval of the Record Holders of the requisite percentage of Company
         Securities or call a meeting of the Shareholders entitled to vote
         thereon to consider and vote on such proposed amendment.

               (c) The Board of Directors shall notify all Record Holders of
         Company Securities upon final adoption of any such proposed amendment.

         8.2   Meetings. Except as otherwise provided in this Agreement, all
acts of the Shareholders to be taken hereunder shall be taken in the manner
provided in this Article 8. A meeting of the Record Holders of Company
Securities for the transaction of such business as may properly come before the
meeting shall be held at such time and place as the Board of Directors, the
Chairman of the Board or a Record Holder of Voting Shares shall specify in the
notice of the meeting; provided, however, that a meeting of the Record Holders
of Voting Shares and Listed Shares at which such Record Holders shall vote
pursuant to Subsections 4.2(d) and

                                      -29-

<PAGE>
4.3(c), respectively, shall be held at the same time and place as a meeting of
the record holder of I-Units at which the Company shall be entitled to vote as
the record holder of I-Units.

         8.3   Notice of a Meeting. Notice of a meeting called pursuant to
Section 8.2 shall be given in writing by mail or other means of written
communication in accordance with Section 10.3 to the Record Holders of Company
Securities for whom the meeting is called. The notice shall be deemed to have
been given at the time when deposited in the mail or sent by other means of
written communication.

         8.4   Record Date. For purposes of determining the Shareholders
entitled to notice of, or to vote at, any meeting of the Shareholders or
entitled to vote by ballot or give approval of Company action in writing without
a meeting or entitled to exercise rights in respect of any lawful action of the
Shareholders, the Record Date shall not be less than 10 nor more than 60 days
before (a) the date of the meeting (unless such requirement conflicts with any
Law, in which case the Law shall govern), or (b) in the event that approvals are
sought without a meeting, the date by which the Shareholders are requested in
writing by the Board of Directors to give such approvals.

         8.5   Adjournment. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting and a new Record Date
need not be fixed if the time and place thereof are announced at the meeting at
which the adjournment is taken, unless such adjournment shall be for more than
45 days. At the adjourned meeting, the Company may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than 45 days or if a new Record Date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given in accordance with this
Article 8.

         8.6   Waiver of Notice; Approval of Meeting; Approval of Minutes. The
transactions of any meeting of the Shareholders, however called and noticed, and
whenever held, shall be as valid as if they had been authorized at a meeting
duly held after regular call and notice, if a quorum is present either in person
or by proxy, and if, either before or after the meeting, Shareholders
representing such quorum who were present in person or by proxy and entitled to
vote, sign a written waiver of notice or an approval of the holding of the
meeting or an approval of the minutes thereof. All waivers and approvals shall
be filed with the Company records or made a part of the minutes of the meeting.
Attendance of a Shareholder at a meeting shall constitute a waiver of notice of
the meeting, except (a) when the Shareholder does not approve, at the beginning
of the meeting, of the transaction of any business because the meeting is not
lawfully called or convened; and (b) that attendance at a meeting is not a
waiver of any right to disapprove the consideration of matters required to be
included in the notice of the meeting, but not so included, if the disapproval
is expressly made at the meeting.

         8.7   Quorum; Voting. The Record Holders of a majority of those
Outstanding Company Securities for which a meeting has been called who are
entitled to vote and be present in person or by proxy shall constitute a quorum
at a meeting of the Shareholders of such class or classes. At any meeting of the
Shareholders duly called and held in accordance with this Agreement at which a
quorum is present, the act of the Record Holders of a majority of all
Outstanding Company Securities present and entitled to vote thereon shall be
deemed to constitute the act of the Record Holders of such Company Securities,
except as approval by

                                      -30-

<PAGE>
holders of a different amount of Company Securities is required by any other
provision of this Agreement, including Section 8.8, or by the Act, in which case
the act of the Shareholders holding a number of Outstanding Company Securities
representing at least such different amount shall be required. The Shareholders
present at a duly called or held meeting at which a quorum is present may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough Shareholders to leave less than a quorum, if any action taken (other
than adjournment) is approved by the required percentage of Company Securities
specified in this Agreement. In the absence of a quorum, any meeting of the
Shareholders may be adjourned from time to time by the affirmative vote of the
Record Holders of a majority of the Company Securities represented either in
person or by proxy.

         8.8   Special Voting Requirements. Without regard to any provision to
the contrary in Section 8.7, with respect to any matter that shall be submitted
to the Record Holders of Listed Shares entitled to vote thereon pursuant to
Subsection 4.3(d), the act of the Record Holders of a majority of the Listed
Shares then Outstanding shall be deemed to constitute the act of the Record
Holders of Listed Shares.

         8.9   Conduct of Meeting. The Board of Directors shall have full power
and authority concerning the manner of conducting any meeting of the
Shareholders or the solicitation of approvals in writing, including the
determination of Persons entitled to vote, the existence of a quorum, the
satisfaction of the requirements of this Article 8, the conduct of voting, the
validity and effect of any proxies and the determination of any controversies,
votes or challenges arising in connection with or during the meeting or voting.
The Board of Directors shall designate a Person to serve as chairman of any
meeting and shall further designate a Person to take the minutes of any meeting.
All minutes shall be kept with the records of the Company. The Board of
Directors may make such other regulations consistent with applicable Law and
this Agreement as it may deem advisable concerning the conduct of any meeting of
the Shareholders or the solicitation of approvals in writing, including
regulations in regard to the appointment of proxies, the appointment and duties
of inspectors of votes and approvals, the submission and examination of proxies
and other evidence of the right to vote and the revocation of approvals in
writing.

         8.10   Action Without a Meeting. Any action that may be taken at a
meeting of Shareholders may be taken without a meeting if consents in writing
setting forth such action are signed by the Record Holders holding not less than
the minimum percentage of the Company Securities that would be necessary to
authorize or take such action at a meeting at which all the Company Securities
entitled to vote on such matter were present and voted. Prompt notice of the
taking of action without a meeting shall be given to the Record Holders who were
entitled to, but did not, authorize the action taken. The Board of Directors may
specify that any written consent submitted to Record Holders for the purpose of
taking any action without a meeting shall be returned to the Company within the
time period, which shall be not less than 20 days, specified by the Board of
Directors. If a ballot returned to the Company does not vote all of the Company
Securities held by the Shareholder, the Company shall be deemed to have failed
to receive a ballot for the Company Securities that were not voted. If approval
of the taking of any action by the Shareholders is solicited by any Person other
than by or on behalf of the Board of Directors, the written approvals shall have
no force and effect unless and until (a) they are deposited with the Company in
care of the Board of Directors, (b) approvals sufficient to take the action

                                      -31-

<PAGE>
proposed are dated as of a date not more than 90 days prior to the date
sufficient approvals are deposited with the Company and (c) an Opinion of
Counsel is delivered to the Board of Directors to the effect that the exercise
of such right and the action proposed to be taken with respect to any particular
matter is otherwise permissible under applicable Law, including any statutes
then governing the rights, duties and liabilities of the Company and the
Shareholders.

         8.11   Voting and Other Rights.

               (a) Only those Record Holders of Company Securities on the Record
         Date set pursuant to Section 8.4 (and also subject to Subsection
         4.3(e)) shall be entitled to notice of, and to vote at, a meeting of
         the Shareholders or to act with respect to matters as to which the
         holders of the Company Securities have the right to vote or to act. All
         references in this Agreement to votes of, or other acts that may be
         taken by, the Company Securities shall be deemed to be references to
         the votes or acts of the Record Holders of such Company Securities.

               (b) With respect to Company Securities that are held for a
         Person's account by another Person (such as a broker, dealer, bank,
         trust company or clearing corporation, or an agent of any of the
         foregoing), in whose name such Company Securities are registered, such
         broker, dealer or other agent shall, in exercising the voting rights in
         respect of such Company Securities on any matter, and unless the
         arrangement between such Persons provides otherwise, vote such Company
         Securities on the behalf, and at the direction, of the Person who is
         the Beneficial Owner, and the Company shall be entitled to assume it is
         so acting without further inquiry.

               (c) With respect to any Shareholder action, broker non-votes and
         other non-votes shall not be counted as votes "for" or "against" any
         matter unless otherwise required by Law.

                                   ARTICLE 9
                                   Covenants

         The Company (a) shall use the net proceeds from the Initial Public
Offering for the purchase of I-Units and other rights as contemplated by this
Agreement; (b) shall not sell, pledge or otherwise transfer any I-Units or such
other rights except as contemplated by this Agreement; (c) shall not issue
options, warrants or other securities entitling the holder thereof to subscribe
for or purchase Company Securities; (d) shall not borrow money or issue debt;
(e) shall not effect a liquidation, merger, recapitalization or similar
transaction involving the Company; and (f) shall not purchase Company
Securities; provided, however, that the Company may take or abstain from taking
any of the actions prohibited or required, as applicable, in this Article 9 upon
obtaining the approval of the Record Holders who (i) are entitled to vote
thereon and (ii) are the Record Holders of a majority of the Listed Shares then
Outstanding.

                                   ARTICLE 10
                               General Provisions

         10.1   Fiscal Year. The fiscal year of the Company shall be the
calendar year.

                                      -32-
<PAGE>

         10.2   Offset. Whenever the Company is to pay any sum to any
Shareholder, any amounts that Shareholder owes the Company may be deducted from
that sum before payment.

         10.3   Notices. Except as expressly set forth to the contrary in this
Agreement, all notices, requests or consents provided for or permitted to be
given under this Agreement must be in writing and must be delivered to the
recipient in person, by courier or mail or by facsimile, telegram, telex,
cablegram or similar transmission, and a notice, request or consent given under
this Agreement is effective on receipt by the Person to receive it. Whenever any
notice is required to be given by Law, the Organizational Certificate or this
Agreement, a written waiver thereof, signed by the Person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.

         10.4   Entire Agreement. This Agreement, including the Purchase
Provisions, constitutes the entire agreement of the Shareholders pertaining to
the subject matter hereof and supersedes all prior agreements and understandings
pertaining thereto.

         10.5   Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.

         10.6   Binding Effect. This Agreement is binding upon and shall inure
to the benefit of the Shareholders, the Assignees and their respective
executors, administrators, successors and legal representatives.

         10.7   Governing Law; Severability. This Agreement shall be construed
in accordance with, and governed by, the laws of the State of Delaware without
regard to the principles of conflicts of law. In the event of a direct conflict
between the provisions of this Agreement and (a) any provision of the
Organizational Certificate, or (b) any mandatory, non-waivable provision of the
Act, such provision of the Organizational Certificate or the Act shall control.
If any provision of the Act provides that it may be varied or superseded in the
limited liability company agreement (or otherwise by agreement of the members or
managers of a limited liability company), such provision shall be deemed
superseded and waived in its entirety if this Agreement contains a provision
addressing the same issue or subject matter. If any provision of this Agreement
or the application thereof to any Person or circumstance is held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of that provision to other Persons or circumstances is not affected thereby and
that provision shall be enforced to the greatest extent permitted by Law.

         10.8   Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.

         10.9   No Right to Action for Dissolution or Partition. No Shareholder
has any right to maintain any action for dissolution of the Company or for
partition of the property of the Company.

                                      -33-
<PAGE>
         10.10   Third-Party Beneficiaries. The Shareholders, the Assignees, the
Indemnitees and their respective executors, administrators, successors and legal
representatives shall be considered to be third-party beneficiaries of this
Agreement, including the Purchase Provisions.

         10.11   Creditors. None of the provisions of this Agreement shall be
for the benefit of, or shall be enforceable by, any creditor of the Company in
its capacity as such.

         10.12   Counterparts. This Agreement may be executed in counterparts,
all of which together shall constitute an agreement binding on all parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto or, in the case of a
Person acquiring a Company Security, upon (a) the acquisition by such Person of
the Certificate evidencing such Company Security, or (b) the transfer of such
Company Security to such Person by book-entry transfer in accordance with
Subsection 3.4(b).

                                      *****

                                      -34-

<PAGE>
         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.

                                         Organizational Shareholder:

                                         KINDER MORGAN G.P., INC.

                                         By: /s/ C. PARK SHAPER
                                            ------------------------------------
                                             C. Park Shaper
                                             Vice President, Treasurer and Chief
                                             Financial Officer

                                         ALL HOLDERS OF LISTED SHARES

                                         By: /s/ JOSEPH LISTENGART
                                            ------------------------------------
                                             Attorney-in-fact authorized by the
                                             Board of Directors

                                      -35-
<PAGE>
                               EXCHANGE PROVISIONS

                                 ANNEX A TO THE
                           SECOND AMENDED AND RESTATED
                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                          KINDER MORGAN MANAGEMENT, LLC

The Exchange Provisions previously contained in this Annex A were eliminated on
July 23, 2002 pursuant to the requisite approval of shareholders at a special
meeting.

                                      A-1
<PAGE>
                                     ANNEX B

                               PURCHASE PROVISIONS

                                       B-1

<PAGE>

                               PURCHASE PROVISIONS

                                 ANNEX B TO THE
                           SECOND AMENDED AND RESTATED
                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                          KINDER MORGAN MANAGEMENT, LLC

         These Purchase Provisions, dated as of May 14, 2001 and amended as of
July 23, 2002, are an integral part of the Second Amended and Restated Limited
Liability Company Agreement of Kinder Morgan Management, LLC, dated as of July
23, 2002.

                                    SECTION 1
                                   Definitions

         1.1 Definitions. In these Purchase Provisions, the following terms
shall have the following respective meanings:

         "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with, the Person in question. As used herein, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

         "Average Market Price" for any security means the average of the
Closing Prices for such security for the consecutive Trading Days in the period
specified in the relevant Section of these Purchase Provisions ending on the
Trading Day specified in the relevant Section of these Purchase Provisions.

         "Beneficial Owner" has the meaning set forth in Rules 13d-3 and 13d-5
under the Securities Exchange Act, as in effect on the date of these Purchase
Provisions, and the terms "Beneficial Ownership," "Beneficially Own,"
"Beneficially Owned" and similar terms have correlative meanings.

         "Board of Directors of the Company" means the board of directors of the
Company established pursuant to the LLC Agreement, and any committee of such
board duly authorized to act in respect thereof.

         "Board of Directors of the Purchaser" means (a) if the Purchaser is
KMI, the board of directors of KMI; (b) if the Purchaser is a limited
partnership with a corporate general partner or any other corporation, the board
of directors of such corporate general partner or corporation; (c) if the
Purchaser is any other form of entity, the board of directors or other
comparable governing body of such entity; and (d) in each case, any committee of
such board or body duly authorized to act in respect thereof.

<PAGE>

         "Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in the State of New York or the State of Texas are
authorized or required by law to close.

         "Closing Price" for a security on any day means:

         (a) for securities listed on a National Securities Exchange, the last
sale price for that day, regular way, or if there are no sales on that day, the
average of the closing bid and asked prices for that day, regular way, in either
case as reported in the principal composite transactions reporting system for
the principal National Securities Exchange on which such securities are listed;
or

         (b) if such securities are not listed on a National Securities Exchange
on that day, the last quoted price on that day, or if no price is quoted, the
average of the high bid and low asked prices on that day, each as reported by
the National Association of Securities Dealers Automated Quotation system; or

         (c) if such securities are not so quoted on that day, the average of
the closing bid and asked prices on that day furnished by a professional market
maker in such securities selected by the Board of Directors of the Purchaser; or

         (d) if on that day no market maker is making a market in such
securities, the fair value of such securities on such day as determined by the
Board of Directors of the Purchaser.

         "Common Units" has the meaning assigned to it in the Partnership
Agreement.

         "Company" means Kinder Morgan Management, LLC, a Delaware limited
liability company.

         "Controlling Entity" has the meaning set forth in clause (b)(i) of the
definition of Mandatory Purchase Event in this Section 1.1.

         "Entity" means a corporation, limited liability company, venture,
partnership, trust, unincorporated organization, association or other entity.

         "Exchange Provisions" means the exchange provisions formerly attached
to the LLC Agreement as Annex A, and thereby made a part of the LLC Agreement.

         "General Partner" means the general partner of the Partnership. On the
date of these Purchase Provisions, the General Partner is Kinder Morgan G.P.,
Inc.

         "I-Units" has the meaning assigned to it in the Partnership Agreement.

         "KMI" means Kinder Morgan, Inc., a Kansas corporation, its successors
by merger and any Person who succeeds to its obligations under these Purchase
Provisions, the Registration

                                      -2-
<PAGE>

Rights Agreement and the Tax Indemnification Agreement in connection with an
acquisition of all or substantially all of its assets by such Person.

         "LLC Agreement" means the Second Amended and Restated Limited Liability
Company Agreement of the Company dated as of July 23, 2002, including these
Purchase Provisions.

         "Listed Shares" means the limited liability company interests in the
Company designated in the LLC Agreement as "Listed Shares."

         "Mandatory Purchase" means the purchase of Listed Shares pursuant to
Section 2.

         "Mandatory Purchase Date" has the meaning set forth in Section 2.3(d).

         "Mandatory Purchase Event" means any one of the following:

         (a) the occurrence of the first day on which the aggregate amount of
distributions or other payments by the Partnership on the Common Units (other
than distributions or payments made in Common Units or Similar Common Unit
Securities, but including distributions and other payments pursuant to an issuer
tender offer by the Partnership) during the immediately preceding 360-day period
exceeds 50% of the Average Market Price of a Common Unit during the ten
consecutive Trading Day period ending on the last Trading Day prior to the first
day of such 360-day period;

         (b) the occurrence of an event resulting in KMI and its Affiliates
ceasing to be the Beneficial Owners of more than 50% of the total voting power
of all shares of capital stock of the General Partner, unless:

                  (i) the event results in another Person becoming the
Beneficial Owner of more than 50% of the total voting power of all shares of
capital stock of the General Partner (such other Person being referred to herein
as the "Controlling Entity");

                  (ii) the Controlling Entity is organized under the laws of a
state in the United States;

                  (iii) the Controlling Entity has long term unsecured debt with
an investment grade credit rating, as determined by Moody's Investor Services,
Inc. and Standard & Poor's Rating Service, immediately prior to the event that
results in the Controlling Entity becoming the Beneficial Owner of more than 50%
of the total voting power of all shares of capital stock of the General Partner;
and

                  (iv) the Controlling Entity assumes all obligations of KMI and
the Purchaser to the Company and to the holders of the Listed Shares under these
Purchase Provisions, the Registration Rights Agreement and the Tax
Indemnification Agreement.

                                      -3-
<PAGE>

         (c) the merger of the Partnership with or into another Person in any
case where the Partnership is not the surviving entity, or the sale of all or
substantially all of the assets of the Partnership and its subsidiaries, taken
as a whole, to another Person, unless:

                  (i) in the transaction the holders of Common Units receive in
exchange for their Common Units a Similar Common Unit Security of the Person
that is the surviving Entity or that purchased the assets;

                  (ii) in the transaction the Company receives in exchange for
all of its I-Units a Similar I-Unit Security of the Person that is the surviving
Entity or that purchased the assets;

                  (iii) no consideration is received in the transaction in
respect of Common Units other than Similar Common Unit Securities and/or cash
and the amount of cash received per Common Unit does not exceed 33-1/3% of the
Average Market Price of a Common Unit for the ten consecutive Trading Day period
ending on the Trading Day immediately preceding the date of the execution of the
definitive agreement for the transaction; and

                  (iv) no consideration is received in the transaction in
respect of I-Units other than Similar I-Unit Securities of the Person that is
the surviving Entity or that purchased the assets.

         "Mandatory Purchase Notice" has the meaning set forth in Section 2.3.

         "Mandatory Purchase Price" means the higher of the Average Market Price
for the Listed Shares and the Average Market Price for the Common Units, in each
case for the ten consecutive Trading Day period ending on the Trading Day
immediately prior to the date of the Mandatory Purchase Event.

         "National Securities Exchange" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Securities Exchange
Act.

         "Notice Date" means the date on which the Purchaser either mails the
relevant Purchase Notice to the holders of Listed Shares or delivers copies of
the relevant Purchase Notice to the Transfer Agent for mailing to the holders of
Listed Shares.

         "Optional Purchase" means the purchase of Listed Shares at the election
of the Purchaser pursuant to Section 3 or Section 4.

         "Optional Purchase Condition for Common Units and Listed Shares" means
any time at which the sum of the number of Common Units held by the Purchaser
and its Affiliates plus the number of Listed Shares held by the Purchaser and
its Affiliates equals 80% or more of the sum of the aggregate number of Common
Units then outstanding plus the aggregate number of Listed Shares then
outstanding.

         "Optional Purchase Condition for Listed Shares" means any time at which
the Purchaser and its Affiliates hold 80% or more of the then outstanding Listed
Shares.

                                      -4-
<PAGE>

         "Optional Purchase Date" means the date selected by the Purchaser for
the Optional Purchase of Listed Shares pursuant to Section 3.2 or Section 4.2.

         "Optional Purchase Notice" has the meaning set forth in Section 3.2.

         "Optional Purchase Notice for Common Units and Listed Shares" has the
meaning set forth in Section 4.2.

         "Optional Purchase Price for Common Units and Listed Shares" means a
price which is equal to the greatest of: (a) the Average Market Price for the
Common Units for the 20 consecutive Trading Day period ending on the fifth
Trading Day prior to the Notice Date, (b) the highest price the Purchaser or its
Affiliates paid for Common Units during the 90 calendar day period ending on the
day prior to the Notice Date, (c) the Average Market Price for the Listed Shares
for the 20 consecutive Trading Day period ending on the fifth Trading Day prior
to the Notice Date, and (d) the highest price the Purchaser or its Affiliates
paid for Listed Shares (other than pursuant to the Exchange Provisions) during
the 90 calendar day period ending on the day prior to the Notice Date. To the
extent that the price paid for Listed Shares or Common Units in clauses (b) or
(d) is paid in securities, the value of such securities shall be the Closing
Price for such securities on the day the purchase of the Listed Shares or Common
Units is effected. To the extent that the price paid for Listed Shares or Common
Units in clauses (b) or (d) is paid other than in cash or securities, the value
of such the other consideration (and therefore the price paid for such Listed
Shares or Common Units) shall be as determined by the Board of Directors of the
Purchaser.

         "Optional Purchase Price for Listed Shares" means a price which is
equal to 110% of the greater of: (a) the Average Market Price for the Listed
Shares for the ten consecutive Trading Day period ending on the fifth Trading
Day prior to the Notice Date, and (b) the highest price Purchaser or its
Affiliates paid for Listed Shares (other than pursuant to the Exchange
Provisions) during the 90 calendar day period ending on the day prior to the
Notice Date. To the extent that the price paid for Listed Shares in clause (b)
is paid in securities, the value of such securities shall be the Closing Price
for such securities on the day the purchase of the Listed Shares is effected. To
the extent that the price paid for Listed Shares in clause (b) is paid other
than in cash or securities, the value of such the other consideration (and
therefore the price paid for such Listed Shares) shall be as determined by the
Board of Directors of the Purchaser.

         "Partnership" means Kinder Morgan Energy Partners, L.P., a Delaware
limited partnership.

         "Partnership Agreement" means the Third Amended and Restated Agreement
of Limited Partnership of the Partnership, dated as of May 18, 2001.

         "Partnership Notice" has the meaning set forth in Section 4.2.

         "Person" means a natural person or an Entity.

         "Purchase Date" means either a Mandatory Purchase Date or an Optional
Purchase Date.

                                      -5-
<PAGE>

         "Purchase Notice" means a Mandatory Purchase Notice, an Optional
Purchase Notice, or an Optional Purchase Notice for Common Units and Listed
Shares.

         "Purchase Price" means the Mandatory Purchase Price, the Optional
Purchase Price for Listed Shares or the Optional Purchase Price for Common Units
and Listed Shares.

         "Purchase Provisions" means these Purchase Provisions, which are
attached to the LLC Agreement as Annex B and hereby made a part of the LLC
Agreement.

         "Purchaser" means the Person with the obligation to make the Mandatory
Purchase and the right to make an Optional Purchase pursuant to these Purchase
Provisions. The Purchaser initially is KMI.

         "Registration Rights Agreement" means the Registration Rights Agreement
between KMI and the Partnership, dated as of May 18, 2001.

         "Section" means a section of these Purchase Provisions.

         "Securities Act" means the United States Securities Act of 1933, as
amended from time to time and any successor to such statute and all rules and
regulations promulgated thereunder.

         "Securities Exchange Act" means the United States Securities Exchange
Act of 1934, as amended from time to time and any successor to such statute and
all rules and regulations promulgated thereunder.

         "Similar Common Unit Security" means a security that has in all
material respects the same rights and privileges as the Common Units.

         "Similar I-Unit Security" means a security that has in all material
respects the same rights and privileges as the I-Units.

         "Subsidiary," when used in connection with the Partnership, means any
Affiliate of the Partnership which the Partnership controls, and of which the
Partnership owns, directly or indirectly, a majority of the aggregate shares,
partnership interests or other equity interests.

         "Tax Indemnification Agreement" means the Tax Indemnification Agreement
dated as of May 18, 2001, between KMI and the Company.

         "Trading Day" for any security means a day on which:

         (a) the principal National Securities Exchange on which such security
is listed is open for business, or

         (b) if such security is not listed on any National Securities Exchange,
a day on which banking institutions in The City of New York generally are open.

                                      -6-
<PAGE>

         "Transfer Agent" means any bank, trust company or other Person
(including the Company or any Affiliate of the Company) appointed from time to
time by the Board of Directors of the Company to act as registrar and transfer
agent for the Listed Shares. On the date of these Purchase Provisions, EquiServe
Trust Company, N.A. is the Transfer Agent.

         1.2 Rules of Construction. Unless the context otherwise clearly
requires:

                  (a) the terms defined in Section 1.1 have the meanings
assigned to them in that Section for purposes of these Purchase Provisions;
terms defined elsewhere in the LLC Agreement and also in these Purchase
Provisions shall in such other portions of the LLC Agreement have the meanings
ascribed to them therein;

                  (b) terms defined include the plural as well as the singular
and vice versa;

                  (c) references to any document, agreement, instrument or
provision thereof mean such document, agreement, instrument or provisions
thereof as the same may be duly amended, supplemented or restated from time to
time;

                  (d) "including" means including without limitation;

                  (e) "or" is not exclusive; and

                  (f) the words "herein," "hereof," "hereunder" and other words
of similar import refer to these Purchase Provisions as a whole and not to any
particular Section or other subdivision.

                                    SECTION 2
                               Mandatory Purchase

         2.1 Mandatory Purchase Event. Upon the occurrence of a Mandatory
Purchase Event, the Purchaser shall purchase all, but not less than all, of the
outstanding Listed Shares that are not held by the Purchaser or its Affiliates
at the Mandatory Purchase Price, pursuant to the provisions of this Section 2.
The Mandatory Purchase Price for any fractional Listed Share shall be the
Mandatory Purchase Price for a whole Listed Share times the fraction of the
Listed Share to be purchased. In determining whether any fractional Listed
Shares are outstanding, all certificates registered in the name of the same
holder of Listed Shares shall be aggregated.

         2.2 Notice to Transfer Agent. Promptly, but in no case later than three
Business Days, following the occurrence of a Mandatory Purchase Event, the
Purchaser shall give notice to the Transfer Agent that a Mandatory Purchase
Event has occurred, and request that the Transfer Agent mail the Mandatory
Purchase Notice to the record holders of the Listed Shares as of earlier of the
date of the Mandatory Purchase Event or the most recent practicable date. If the
Purchaser so requests, the Transfer Agent shall, and the Company shall use its
reasonable efforts to cause the Transfer Agent to, mail the Mandatory Purchase
Notice to such record holders of Listed Shares.

                                      -7-
<PAGE>

         2.3 Purchase Notice. Within three Business Days following the
occurrence of a Mandatory Purchase Event, the Purchaser shall mail, or deliver
to the Transfer Agent for mailing and cause the Transfer Agent to mail, to the
record holders of the Listed Shares described in Section 2.2(a), a notice (the
"Mandatory Purchase Notice") which shall state:

                  (a) That a Mandatory Purchase Event has occurred and that
pursuant to the provisions of the LLC Agreement and these Purchase Provisions
the Purchaser will purchase all of the outstanding Listed Shares that are not
held by the Purchaser or its Affiliates at the Mandatory Purchase Price;

                  (b) A brief description of the circumstances and relevant
facts regarding the Mandatory Purchase Event;

                  (c) The dollar amount per Listed Share of the Mandatory
Purchase Price;

                  (d) The date on which the Listed Shares will be purchased (the
"Purchase Date"), which shall be no later than five Business Days from the date
the Mandatory Purchase Notice is mailed by the Purchaser or the Transfer Agent;
and

                  (e) The instructions a holder of Listed Shares must follow,
including any other documents such holder must deliver, in order to receive the
Mandatory Purchase Price.

         Any such Mandatory Purchase Notice mailed to a record holder of Listed
Shares at such holder's address as reflected in the records of the Transfer
Agent as of the time set forth in Section 2.2, or delivered by the Purchaser to
the Transfer Agent for mailing to such holders, shall be conclusively presumed
to have been given, whether or not such holder receives such notice. Failure to
give any such notice to any particular holder or holders shall not affect the
validity of the Mandatory Purchase pursuant to these Purchase Provisions.

         2.4 Deposit of Funds; Effect of Purchase. On or prior to the Mandatory
Purchase Date, the Purchaser shall irrevocably deposit with the Transfer Agent
funds sufficient to pay the Mandatory Purchase Price for all outstanding Listed
Shares that on the date of such deposit are not held by the Purchaser or its
Affiliates. After the date of such deposit and prior to the Mandatory Purchase
Date, neither the Purchaser nor any of its Affiliates shall dispose of any
Listed Shares held by them, other than to the Purchaser or any of its
Affiliates. The Transfer Agent shall return to the Purchaser any funds not so
required for the purchase of Listed Shares that on the Mandatory Purchase Date
are not held by the Purchaser or its Affiliates. If the Purchaser so deposits
such funds with the Transfer Agent, and if the Purchaser has delivered the
Mandatory Purchase Notice to the Transfer Agent for mailing to the record
holders of the Listed Shares, then from and after the Mandatory Purchase Date,
notwithstanding that any certificate representing Listed Shares shall not have
been surrendered for purchase, all rights of the holders of such Listed Shares
as such, including any other rights under the LLC Agreement and the rights to
receive any distributions on Listed Shares that have been declared (or a record
date for which has been set) but that have not been paid or made, shall
thereupon cease, except the right to receive the Mandatory Purchase Price,
without interest, upon surrender to the Transfer Agent

                                      -8-
<PAGE>

of the certificates representing such Listed Shares, with such other documents
as may be required by the Mandatory Purchase Notice, in compliance with the
instructions in the Mandatory Purchase Notice, and such Listed Shares shall from
and after the Mandatory Purchase Date be deemed to be purchased by the Purchaser
and shall be transferred to the Purchaser on the record books of the Transfer
Agent, and the Purchaser shall be deemed to be the owner of such Listed Shares
from and after the Mandatory Purchase Date and shall have all rights as the
owner and record holder of such Listed Shares.

                                    SECTION 3
                                Optional Purchase

         3.1 Optional Purchase Condition for Listed Shares. At any time when the
Optional Purchase Condition for Listed Shares exists, the Purchaser may elect,
but shall not be obligated, to purchase all, but not less than all, of the
outstanding Listed Shares that are not held by the Purchaser or its Affiliates
at the Optional Purchase Price for Listed Shares pursuant to the provisions of
this Section 3. The Purchase Price for any fractional Listed Share purchased
pursuant to this Section 3 shall be the Optional Purchase Price for Listed
Shares times the fraction of the Listed Share to be purchased. In determining
whether any fractional Listed Shares are outstanding, all certificates
registered in the name of the same holder of Listed Shares shall be aggregated.

         3.2 Optional Purchase Notice. The Purchaser may exercise its election
to make an Optional Purchase by delivering copies of a notice (the "Optional
Purchase Notice") to the Transfer Agent not less than ten days and not more than
60 days prior to the date the Purchaser selects for the Optional Purchase (the
"Optional Purchase Date"). The Transfer Agent shall, and the Company will use
its reasonable efforts to cause the Transfer Agent to, mail the Optional
Purchase Notice to the record holders of Listed Shares as of the most recent
practicable date. Any such Optional Purchase Notice mailed to a record holder of
Listed Shares at his address as reflected in the records of the Transfer Agent,
or delivered by the Purchaser to the Transfer Agent for mailing to such holders,
shall be conclusively presumed to have been given, whether or not such holder
receives such notice. Failure to give such notice to any particular holder or
holders shall not affect the validity of the Optional Purchase pursuant to these
Purchase Provisions. So long as the Optional Purchase Condition for Listed
Shares exists on the date of the Optional Purchase Notice, the Purchaser may
purchase such Listed Shares pursuant to these Optional Purchase provisions,
whether or not the Optional Purchase Condition for Listed Shares continues to
exist on the Optional Purchase Date. The Optional Purchase Notice shall state:

                  (a) that as of the date of such Optional Purchase Notice, the
Optional Purchase Condition for Listed Shares exists, and that the Purchaser has
elected to make the Optional Purchase pursuant to the terms of the LLC Agreement
and these Purchase Provisions;

                  (b) the Optional Purchase Price;

                  (c) the Optional Purchase Date; and

                                      -9-
<PAGE>

                  (d) the instructions a holder of Listed Shares must follow,
including any other documents a holder of Listed Shares must deliver, in order
to receive the Optional Purchase Price.

         3.3 Deposit of Funds; Effect of Purchase. On or prior to the Optional
Purchase Date, the Purchaser shall irrevocably deposit with the Transfer Agent
funds sufficient to pay the Optional Purchase Price for Listed Shares for all
outstanding Listed Shares that on the date of such deposit are not held by the
Purchaser or its Affiliates. After the date of such deposit and prior to the
Optional Purchase Date, neither the Purchaser nor any of its Affiliates shall
dispose of any Listed Shares held by them, other than to the Purchaser or any of
its Affiliates. The Transfer Agent shall return to the Purchaser any funds not
so required for the purchase of Listed Shares that on the Optional Purchase Date
are not held by the Purchaser or its Affiliates. If the Purchaser so deposits
such funds with the Transfer Agent, and if the Purchaser has delivered the
Optional Purchase Notice to the Transfer Agent for mailing to the record holders
of the Listed Shares, then from and after the Optional Purchase Date,
notwithstanding that any certificate representing Listed Shares shall not have
been surrendered for purchase, all rights of the holders of such Listed Shares
as such, including any other rights under the LLC Agreement and the rights to
receive any distributions on Listed Shares that have been declared (or a record
date for which has been set) but that have not been paid or made, shall
thereupon cease, except the right to receive the Optional Purchase Price for
Listed Shares, without interest, upon surrender to the Transfer Agent of the
certificates representing such Listed Shares, with such other documents as may
be required by the Optional Purchase Notice, in compliance with the instructions
in the Optional Purchase Notice, and such Listed Shares shall from and after the
Optional Purchase Date be deemed to be purchased by the Purchaser and shall be
transferred to the Purchaser on the record books of the Transfer Agent, and the
Purchaser shall be deemed to be the owner of such Listed Shares from and after
the Optional Purchase Date and shall have all rights as the owner of such Listed
Shares.
                                    SECTION 4
               Optional Purchase of Common Units and Listed Shares

         4.1 Optional Purchase Condition for Common Units and Listed Shares. If
at any time when the Optional Purchase Condition for Common Units and Listed
Shares exists, the Purchaser may elect, but shall not be obligated, to purchase
all, but not less than all, of the outstanding Listed Shares that are not held
by the Purchaser or its Affiliates at the Optional Purchase Price for Common
Units and Listed Shares pursuant to the provisions of this Section 4, but only
if the General Partner or its assignee elects to purchase all, but not less than
all, of the outstanding Common Units that are not held by the Purchaser or its
Affiliates pursuant to the provisions of the Partnership Agreement. The Purchase
Price for any fractional Listed Share purchased pursuant to this Section 4 shall
be the Optional Purchase Price for Common Units and Listed Shares times the
fraction of the Listed Share to be purchased. In determining whether any
fractional Listed Shares are outstanding, all certificates registered in the
name of the same holder of Listed Shares shall be aggregated.

         4.2 Optional Purchase Notice for Common Units and Listed Shares. The
Purchaser may exercise its election to make an Optional Purchase of Common Units
and Listed Shares by delivering copies of a notice (the "Optional Purchase
Notice for Common Units and Listed

                                      -10-
<PAGE>

Shares") to the Transfer Agent not less than ten days and not more than 60 days
prior to the date the Purchaser selects for the Optional Purchase (the "Optional
Purchase Date"). The Optional Purchase Notice for Common Units and Listed Shares
shall not be effective, however, unless and until the later to occur of (i)
delivery of the Optional Purchase Notice for Common Units and Listed Shares to
the Transfer Agent and (ii) delivery to the transfer agent for the Common Units
of a similar notice with respect to the purchase of all outstanding Common Units
not owned by the Purchaser and its Affiliates (the "Partnership Notice")
pursuant to the provisions of the Partnership Agreement. After both the
Partnership Notice has been given to the transfer agent for the Common Units and
the Optional Purchase Notice for Common Units and Listed Shares has been given
to the Transfer Agent, the Transfer Agent shall, and the Company will use its
reasonable efforts to cause the Transfer Agent to, mail the Optional Purchase
Notice for Common Units and Listed Shares to the record holders of Listed Shares
as of the most recent practicable date. Any such Optional Purchase Notice for
Common Units and Listed Shares mailed to a record holder of Listed Shares at his
address as reflected in the records of the Transfer Agent, or delivered by the
Purchaser to the Transfer Agent for mailing to such holders, shall be
conclusively presumed to have been given, whether or not such holder receives
such notice. Failure to give such notice to any particular holder or holders
shall not affect the validity of the purchase pursuant to these Purchase
Provisions. So long as the Optional Purchase Condition for Common Units and
Listed Shares exists on the date of the Optional Purchase Notice for Common
Units and Listed Shares, the Purchaser may purchase such Listed Shares pursuant
to these Optional Purchase provisions, whether or not the Optional Purchase
Condition for Common Units and Listed Shares continues to exist on the Optional
Purchase Date. The Optional Purchase Notice for Common Units and Listed Shares
shall state:

                  (a) that with respect to Listed Shares that on the Optional
Purchase Date are not held by the Purchaser or its Affiliates, the Purchaser has
elected to make the Optional Purchase for Common Units and Listed Shares
pursuant to the terms of the LLC Agreement and these Purchase Provisions and
that the General Partner or its assignee has elected to make the purchase of
Common Units pursuant to the similar provisions of the Partnership Agreement;

                  (b) the Optional Purchase Price for Common Units and Listed
Shares;

                  (c) the Optional Purchase Date; and

                  (d) the instructions a holder of Listed Shares must follow,
including any other documents such holder must deliver, in order to receive the
Optional Purchase Price for Common Units and Listed Shares.

         4.3 Deposit of Funds; Effect of Purchase. On or prior to the Optional
Purchase Date, the Purchaser shall irrevocably deposit with the Transfer Agent
funds sufficient to pay the Optional Purchase Price for Common Units and Listed
Shares for all outstanding Listed Shares that on the date of such deposit are
not held by the Purchaser or its Affiliates. After the date of such deposit and
prior to the Optional Purchase Date, neither the Purchaser nor any of its
Affiliates shall dispose of any Listed Shares held by them, other than to the
Purchaser or any of its Affiliates. The Transfer Agent shall return to the
Purchaser any funds not so required for such purchase. If the Purchaser so
deposits funds with the Transfer Agent, and if the Purchaser has

                                      -11-
<PAGE>

delivered the Optional Purchase Notice for Common Units and Listed Shares to the
Transfer Agent for mailing to the record holders of the Listed Shares, then from
and after the Optional Purchase Date, notwithstanding that any certificate
representing Listed Shares shall not have been surrendered for purchase, all
rights of the holders of such Listed Shares as such, including any other rights
under the LLC Agreement and the right to receive any distributions on Listed
Shares that have been declared (or a record date for which has been set) but
that have not been paid or made, shall thereupon cease, except the right to
receive the Optional Purchase Price for Common Units and Listed Shares, without
interest, upon surrender to the Transfer Agent of the certificates representing
such Listed Shares, with such other documents as may be required by the Optional
Purchase Notice for Common Units and Listed Shares, in compliance with the
instructions in the Optional Purchase Notice for Common Units and Listed Shares,
and such Listed Shares shall from and after the Optional Purchase Date be deemed
to be purchased by the Purchaser and shall be transferred to the Purchaser on
the record books of the Transfer Agent, and the Purchaser shall be deemed to be
the owner of such Listed Shares from and after the Optional Purchase Date and
shall have all rights as the owner of such Listed Shares.

                                    SECTION 5
                        Responsibility of Transfer Agent

         5.1 Responsibility of Transfer Agent for Purchase Provisions. The
Transfer Agent, in such capacity, shall not at any time be under any duty or
responsibility to any holder of Listed Shares to determine whether any Mandatory
Purchase Event has occurred, or with respect to the amount of the Purchase Price
to be paid, or with respect to the method employed, or herein provided to be
employed, in calculating the same. The Transfer Agent, in such capacity, shall
not be responsible for any failure of the Purchaser to make or calculate any
cash payment or for any failure of the Purchaser to comply with any of the
Purchase Provisions.

         5.2 Deliveries to Holders and Former Holders. Whenever the Purchaser or
the Company may deliver to the Transfer Agent for mailing or delivery to the
record holders or former record holders of Listed Shares any notice,
communication, Purchase Price or other payment or other matter deliverable to
record holders or former record holders of Listed Shares under these Purchase
Provisions, the Transfer Agent shall promptly mail or deliver such notice,
communication or payment or matter to the relevant record holder or former
record holder, and the Company shall use its reasonable efforts to cause the
Transfer Agent to do so.

                                    SECTION 6
                         Binding Effect on the Purchaser

         6.1 Adoption of Purchase Provisions by Purchaser. KMI, as the initial
Purchaser pursuant to these Purchase Provisions, has executed in the place
provided below and delivered to the Company a copy of these Purchase Provisions,
pursuant to which KMI has, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, adopted and agreed to be subject
to and bound by these Purchase Provisions as the Purchaser hereunder. KMI
further acknowledges and agrees that these Purchase Provisions and its
obligations hereunder are for the benefit of and shall be enforceable by any
record holder of Listed Shares.

                                      -12-
<PAGE>

                                    SECTION 7
                                Certain Covenants

         7.1 Filings and Consents. The Purchaser and the Company will use their
reasonable best efforts to make or cause to be made any registrations and
filings with governmental authorities required of such party or any of its
subsidiaries or Affiliates, and to obtain any consents, authorizations,
approvals or failures to object of governmental authorities required with
respect to such party or any of its subsidiaries or Affiliates, that are
necessary for the consummation of a Mandatory Purchase or an Optional Purchase
hereunder, (i) in the case of a Mandatory Purchase, prior to the occurrence of a
Mandatory Purchase Event, and (ii) in the case of an Optional Purchase, prior to
the Optional Purchase Date.

         7.2 Rule 13e-3. KMI agrees that it will comply with Rule 13e-3 under
the Securities Exchange Act in connection with a Mandatory Purchase Event or if
it makes an Optional Purchase.

                                    SECTION 8
                                   Amendments

         8.1 Amendment. These Purchase Provisions may be amended by an agreement
in writing signed by the Company and the Purchaser without the vote, approval or
consent of the holders of any of the Listed Shares, unless such amendment would
(a) reduce the time for any notice to which the holders of the Listed Shares
would be entitled under these Purchase Provisions, or (b) have a material
adverse effect on the powers, preferences or rights of the Listed Shares, as
determined in the sole discretion of the Board of Directors of the Company, in
which case such amendment must be approved by such vote or consent of the
holders of Listed Shares, if any, as may be required by the LLC Agreement.

         8.2 Certain Amendments Without Vote. Notwithstanding the foregoing
provisions and the other provisions of the LLC Agreement with respect to
amendments, the Board of Directors of the Company has reserved the right to
make, with the written consent of the Purchaser, and may make, with the written
consent of the Purchaser, changes in the Listed Shares and these Purchase
Provisions to meet the requirements of applicable securities and other laws and
regulations and stock exchange rules and to effect the intent of the LLC
Agreement, and also may make other changes which the Board of Directors of the
Company determines in its sole discretion will not have a material adverse
effect on the rights and privileges of the Listed Shares, in each case without
the vote, consent or approval of the holders of any Listed Shares. In addition,
notwithstanding the foregoing provisions with respect to amendments, (a) in the
case of (i) any merger of the Partnership, whether or not the Partnership is the
survivor, that is the subject of a unitholder vote and does not constitute a
Mandatory Purchase Event, and (ii) any recapitalization, reorganization or
similar transaction of the Partnership, in each case that is the subject of a
unitholder vote and does not constitute a Mandatory Purchase Event, or (b) if
any Person becomes a Controlling Entity in a transaction complying with the
requirements of clauses (b)(i) through (b)(iv) of the definition of "Mandatory
Purchase Event" in these Purchase Provisions, such amendments as the Board of
Directors of the Company deems appropriate in its good faith discretion and are
agreed to by the Purchaser may be made in these Purchase

                                      -13-
<PAGE>

Provisions to accommodate, in the case of clause (a), such merger,
recapitalization, reorganization, or similar transaction, or, in the case of
clause (b), the assumption by such Person of the obligations of the Purchaser
under these Purchase Provisions, and any such amendment shall be deemed not to
have such a material adverse effect or reduce the time for any notice, and
therefore may be made without the vote, consent or approval of the Holders of
any of the Listed Shares.

                                      -14-
<PAGE>

                         ADOPTION BY KINDER MORGAN, INC.

         KMI, as the Purchaser pursuant to these Purchase Provisions, has
executed in the place provided below and delivered to the Company a copy of
these Purchase Provisions, pursuant to which KMI has, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
adopted and agreed to be subject to and bound by these Purchase Provisions as
the Purchaser hereunder. KMI further acknowledges and agrees that these Purchase
Provisions and its obligations hereunder are for the benefit of and shall be
enforceable by any record holder of Listed Shares.

Dated as of July 23, 2002

                                       KINDER MORGAN, INC.

                                       By: /s/ JOSEPH LISTENGART
                                           -------------------------------------
                                           Joseph Listengart
                                           Vice President and General Counsel

<PAGE>
                                     ANNEX C

                         DELEGATION OF CONTROL AGREEMENT

                                      C-1
<PAGE>
                         DELEGATION OF CONTROL AGREEMENT
                                      AMONG
                            KINDER MORGAN G.P., INC.
                          KINDER MORGAN MANAGEMENT, LLC
                       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"
                                       AND
                       KINDER MORGAN CO(2) COMPANY, L.P.

     This Delegation of Control Agreement (the "Agreement") dated May 18, 2001
(the "Effective Date"), is among Kinder Morgan G.P., Inc., a Delaware
corporation (the "General Partner"), Kinder Morgan Management, LLC, a Delaware
limited liability company ("Management"), Kinder Morgan Energy Partners, L.P., a
Delaware limited partnership (the "Master 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 Kinder Morgan CO2
Company, L.P., a Texas limited partnership ("CO2" and together with OLP "A," OLP
"B," OLP "C," and OLP "D," the "Operating Partnerships," and, together with the
Master Partnership, the "Partnerships"). The General Partner is the sole general
partner of the Partnerships.

     Capitalized terms used but not defined in this Agreement shall have the
meanings given to them in the Master Partnership's Third Amended and Restated
Agreement of Limited Partnership (the "Master Partnership Agreement").
References herein to the Master Partnership Agreement or any limited partnership
agreement of an Operating Partnership (an "Operating Partnership Agreement") in
a context that contemplates a future time shall mean the Master Partnership
Agreement or an Operating Partnership Agreement (collectively, the "Partnership
Agreements") as amended or restated at the applicable time. Management is an
"Indemnitee" and an "Affiliate" of the Partnerships and the General Partner, as
each of those terms is defined in Article II of the Master Partnership Agreement
and in each of the Operating Partnership Agreements.

                                    RECITALS:

     The Partnerships and the General Partner wish to delegate to Management all
the General Partner's power and authority to manage and control the business and
affairs of the Partnerships to the fullest extent permitted under the
Partnership Agreements and Delaware law, subject to the terms and conditions of
this Agreement, and Management wishes to accept such delegation.

     Section 6.6(c) of the Master Partnership Agreement and Section 6.6(b) of
each of the Operating Partnership Agreements permit the General Partner to enter
into an agreement with Management to render services to the Partnerships and the
General Partner in the discharge of the General Partner's duties as general
partner to the Partnerships.
<PAGE>

     Concurrently with the execution of this Agreement, Management is issuing
and selling in an initial public offering (the "Offering") its shares
representing limited liability company interests in Management (the "Listed
Shares"), and the Master Partnership is issuing to Management its i-units
representing limited partner interests in the Master Partnership.

     Each of the Partnerships wishes to confirm hereby its agreement with the
terms of this Agreement relating to the management and control of the
Partnership's and the Operating Partnerships' business and affairs and certain
other agreements for the benefit of the General Partner, Management, their
Affiliates and certain Indemnitees and Indemnified Parties.

     NOW, THEREFORE, the parties hereto agree as follows:

1.   Delegation and Related Matters.

     1.1.   Delegation by General Partner to Management. The General Partner
hereby irrevocably delegates to Management, to the fullest extent permitted
under the Partnership Agreements and Delaware law, all of the General Partner's
power and authority to manage and control the business and affairs of the
Partnerships (the "Maximum Permitted Delegation"), subject to termination only
in accordance with Section 9 hereof; and all provisions in this Agreement are
qualified to the extent required in order for all such provisions to be
consistent, now and in the future, with the Maximum Permitted Delegation. The
power and authority of the General Partner are set forth in the Partnership
Agreements (in particular, in Section 6.1 of each of the Partnership Agreements)
and are provided by Delaware law. If the General Partner's power and authority
as general partner of any Partnership(s) are modified pursuant to a subsequent
amendment or restatement of any of the Partnership Agreements or changes in
Delaware law, then the power and authority delegated to Management with respect
to such Partnership(s) shall be modified on the same basis.

     Notwithstanding the foregoing, the General Partner is not hereby
withdrawing from the Partnerships as a general partner or otherwise; and the
General Partner is retaining all of its Partnership Interests, its Percentage
Interests and its rights to profits, losses and distributions from the
Partnerships, and none of these are hereby being assigned or transferred by the
General Partner to Management.

     1.2.   Continued Responsibility of General Partner. Notwithstanding the
General Partner's making the Maximum Permitted Delegation to Management, the
General Partner shall remain responsible to the Partnerships for actions taken
or omitted by Management within the scope of such delegation as if the General
Partner had itself taken or omitted to take any such actions. The General
Partner's responsibility to each of the Partnerships is not expanded or limited
by this Agreement and shall be in effect to the same extent and on the same
terms and conditions as specified in the applicable Partnership Agreement or
under Delaware law. Pursuant to Section 6.8(b) of each of the Partnership
Agreements, in each case as amended as of the Effective Date, the General
Partner is responsible for the misconduct or negligence of Management in
performing the Maximum Permitted Delegation but is not responsible for any
misconduct or negligence of other agents appointed by the General Partner in
good faith. The General Partner shall be entitled to monitor Management's
performance under this Agreement. The General Partner shall have the right and
power to direct Management to take, or to cease from taking, any action that
would constitute a breach of any Partnership Agreement. The General Partner
shall have access to the books, records and documents of the Partnerships and
Management and to their officers, directors and employees to monitor
Management's performance under this Agreement.

                                      -2-
<PAGE>

The General Partner shall have the right and power to direct Management to take,
or to cease from taking, any action that would constitute a breach of any
Partnership Agreement. The General Partner shall have access to the books,
records and documents of the Partnerships and Management and to their
officers, directors and employees to monitor Management's performance under
this Agreement.

     1.3.   Acceptance of Delegation by Management. Management hereby accepts
the Maximum Permitted Delegation and agrees to perform the Maximum Permitted
Delegation according to the standards specified in Section 2 hereto.

     1.4.   Approval by General Partner. Without expanding or limiting the
definition of Maximum Permitted Delegation, the taking by Management of the
actions specified in Schedule 1.4 hereto shall be subject to the approval of the
General Partner.

     1.5.   Use of Affiliates by Management. The Partnerships and the General
Partner agree that Management may perform the Maximum Permitted Delegation
either directly or through one or more Affiliates. If Management performs
through any Affiliate, (i) Management shall remain fully responsible for actions
taken or omitted by the Affiliate and (ii) for purposes of Sections 1, 2, 3, 4,
5, 6, 7 and 8 hereof, Management and all such Affiliates shall be taken together
and treated as Management.

2.   Standards of Performance. In performing the Maximum Permitted Delegation,
Management shall be responsible to the Partnerships and the General Partner to
the same extent and according to the same standards as would have been
applicable to the General Partner in favor of the Partnerships had the General
Partner continued to exercise the delegated power and authority directly. Among
other provisions of the Partnership Agreements that are applicable to the duties
and standards of performance assumed by Management, but without limiting the
generality of other provisions in this Agreement, the following Sections of each
of the Partnership Agreements, in each case as amended, shall be applicable to
Management's performance of the Maximum Permitted Delegation: Sections 6.8, 6.9
and 6.10.

3.   Conflicts of Interest. All potential and actual conflicts of interest that
exist or arise between the General Partner, Management and each of their
Affiliates, on the one hand, and the Partnerships, any subsidiary of the
Partnerships, any Partner or any Assignee, on the other hand, shall be subject
to Section 6.9 of each of the Partnership Agreements, in each case as amended as
of the Effective Date. Among other possible courses of action under these
Sections that are available to resolve conflicts of interest, the General
Partner and Management have reserved the right granted under these Sections to
seek Special Approval of the General Partner's Conflicts and Audit Committee
with respect to any such conflict.

4.   Reliance on Counsel, etc. Pursuant to Section 6.10 of each of the
Partnership Agreements, in each case as amended, Management shall have the
benefit of all of the provisions of these Sections to the same extent as the
General Partner.

5.   Reliance by Third Parties. Pursuant to Section 6.14 of the Master
Partnership Agreement and Section 6.12 of each of the Operating Partnership
Agreements, in each case as amended, third parties dealing with the Partnerships
shall be entitled to assume that Management has the

                                      -3-
<PAGE>
full power and authority of the General Partner in acting for the Partnerships.

6.   Indemnity. Management and its officers and directors and all other persons
covered within the definition of Indemnitee shall be entitled to mandatory
indemnity and shall be entitled to be held harmless by the Partnerships to the
extent and subject to the conditions provided in Section 6.7 of each of the
Partnership Agreements, in each case as amended, with the General Partner hereby
deeming it advisable that such indemnification and holding harmless shall
(rather than may) be done and provided by the Partnerships to the fullest extent
and subject to the conditions provided therein.

     The General Partner and the other parties specified in Section 6.7 of each
of the Partnership Agreements, in each case as amended, shall continue to be
entitled to the benefits of said Sections.

7.   Damage Limitations. Since each of Management and certain other parties
specified in the Partnership Agreements who are associated with Management are
Indemnitees, the provisions of Section 6.8 in the Master Partnership Agreement
and Section 6.4(b) of each of the Operating Partnership Agreements, in each case
as amended, regarding the limitation on an Indemnitee's liability for monetary
damages shall be applicable to all such Indemnitees.

     The General Partner and other Indemnitees shall continue to be entitled to
the limitation on liability for monetary damages set forth in Section 6.8 of
each of the Partnership Agreements, in each case as amended as of the Effective
Date.

8.   Reimbursement. Management shall be entitled to be reimbursed by the
Partnerships for direct, indirect, necessary or appropriate expenses it incurs
or payments it makes on behalf of the Partnerships, or which are allocable to or
otherwise reasonably incurred by the General Partner or Management, to the
fullest extent contemplated in both Section 6.4(b) and Section 6.6(c) of the
Master Partnership Agreement and in both Section 6.4(b) and Section 6.6(b) of
each of the Operating Partnership Agreements, in each case as amended. It is
understood and agreed that Management shall be entitled to reimbursement under
such Sections for all fees and expenses incurred in connection with the
performance of its obligations under the Securities Act of 1933, as amended, the
Securities Act of 1934, as amended, and any other federal and state laws
applicable to Management, including, without limitation, fees and expenses of
legal counsel, accountants and financial advisors.

     The General Partner shall continue to be entitled to be reimbursed as
provided in these Sections of the Partnership Agreements.

9.   Termination of Delegation. The Maximum Permitted Delegation under this
Agreement commences on the Effective Date and shall continue in effect until the
occurrence of the earliest of any of the following, at which time the delegation
of power and authority by the General Partner to Management shall cease and
terminate as provided below:

     9.1.   All outstanding Listed Shares shall become owned by the General
Partner or its Affiliates (including, without limitation, Kinder Morgan, Inc.
("KMI") or its Affiliates) and such

                                      -4-
<PAGE>
termination of delegated power and authority shall have been approved by the
General Partner and Management at which time the delegation shall cease as to
all Partnerships; or

     9.2.   The General Partner shall withdraw or shall be removed as general
partner of any of the Partnerships, at which time the delegation shall cease as
to those Partnerships from which the General Partner shall have withdrawn or
shall have been removed; or

     9.3.   Such termination of delegated power and authority shall have been
approved by (i) the General Partner, (ii) Management and (iii) holders (other
than the General Partner and its Affiliates, including KMI and its Affiliates)
of a majority of the outstanding Listed Shares (excluding any Listed Shares
owned by the General Partner and its Affiliates, including KMI).

     The General Partner hereby covenants and agrees that it shall not withdraw
as general partner of any of the Partnerships so long as any of the Listed
Shares are owned by any persons other than KMI or its Affiliates.

10.  Miscellaneous.

     10.1.   References. Except as specifically provided otherwise, references
to "Articles" and "Sections" are to Articles and Sections of this Agreement.

     10.2.   Pronouns and Plurals. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.

     10.3.   Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking actions as
may be necessary or appropriate to achieve the purposes of this Agreement.

     10.4.   Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their successors and
permitted assigns. This Agreement may not be assigned, in whole or in part, by
any party to this Agreement without the written consent of the other parties to
this Agreement.

     10.5.   Integration. This Agreement and the other instruments and
agreements specifically referenced herein constitute the entire agreement among
parties hereto.

     10.6.   Creditors. None of the provisions of this Agreement shall be for
the benefit of, or shall be enforceable by, any creditor of the Partnerships,
the General Partner or Management.

     10.7.   Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.

                                      -5-
<PAGE>

     10.8.   Counterparts. This Agreement may be executed in counterparts, all
of which together shall constitute an agreement binding on all parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.

     10.9.   Applicable Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.

     10.10.   Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.

     10.11.   Amendments. This Agreement may be amended by an agreement in
writing signed by Management, the General Partner and the Partnerships without
the vote, approval or consent of the holders of Listed Shares (as such term is
defined in the Amended and Restated Limited Liability Company Agreement of
Management, as amended, restated or supplemented (the "LLC Agreement")), unless
such amendment would, as determined in the sole discretion of the board of
directors of Management, materially adversely affect the rights or preferences
of such holders of Listed Shares or would reduce the time for any notice to
which such holders of Listed Shares may be entitled, in which case such
amendment shall require the affirmative vote or consent of the holders of at
least a majority of the Listed Shares then Outstanding (as that term is defined
under the LLC Agreement).

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the Effective Date.

                                         "General Partner"
                                         KINDER MORGAN G.P., INC.

                                         By: /s/ C. PARK SHAPER
                                            ------------------------------------
                                             C. Park Shaper
                                             Vice President, Treasurer and Chief
                                             Financial Officer

                                         "Management"
                                         KINDER MORGAN MANAGEMENT, LLC

                                         By: /s/ JOSEPH LISTENGART
                                            ------------------------------------
                                             Joseph Listengart
                                             Vice President, General Counsel and
                                             Secretary

                                      -6-
<PAGE>
                                         "Master Partnership"
                                         KINDER MORGAN ENERGY PARTNERS, L.P.
                                         By:  Kinder Morgan G.P., Inc.

                                         By: /s/ C. PARK SHAPER
                                            ------------------------------------
                                             C. Park Shaper
                                             Vice President, Treasurer and Chief
                                             Financial Officer

                                         OLP "A"

                                         KINDER MORGAN OPERATING L.P. "A"
                                         By:  Kinder Morgan G.P., Inc.

                                         By: /s/ C. PARK SHAPER
                                            ------------------------------------
                                             C. Park Shaper
                                             Vice President, Treasurer and Chief
                                             Financial Officer

                                         OLP "B"

                                         KINDER MORGAN OPERATING L.P. "B"
                                         By:  Kinder Morgan G.P., Inc.

                                         By: /s/ C. PARK SHAPER
                                            ------------------------------------
                                             C. Park Shaper
                                             Vice President, Treasurer and Chief
                                             Financial Officer

                                         OLP "C"

                                         KINDER MORGAN OPERATING L.P. "C"
                                         By:  Kinder Morgan G.P., Inc.

                                         By: /s/ C. PARK SHAPER
                                            ------------------------------------
                                             C. Park Shaper
                                             Vice President, Treasurer and Chief
                                             Financial Officer

                                      -7-
<PAGE>
                                         OLP "D"

                                         KINDER MORGAN OPERATING L.P. "D"
                                         By:  Kinder Morgan G.P., Inc.

                                         By: /s/ C. PARK SHAPER
                                            ------------------------------------
                                             C. Park Shaper
                                             Vice President, Treasurer and Chief
                                             Financial Officer

                                         CO2

                                         KINDER MORGAN CO2 COMPANY, L.P.
                                         By: Kinder Morgan G.P., Inc.

                                         By: /s/ C. PARK SHAPER
                                            ------------------------------------
                                             C. Park Shaper
                                             Vice President, Treasurer and Chief
                                             Financial Officer

                                      -8-

<PAGE>
                                  SCHEDULE 1.4
                 Actions Subject to Approval by General Partner

o    amend or propose an amendment to the Master Partnership Agreement, or

o    change the amount of the distribution made on the Master Partnership common
     units, or

o    allow a merger or consolidation involving the Master Partnership, or

o    allow a sale or exchange of all or substantially all of the assets of the
     Master Partnership, or

o    dissolve or liquidate the Master Partnership, or

o    take any action requiring approval of any class of units of the Master
     Partnership, or

o    call any meetings of the common unitholders of the Master Partnership, or

o    take any action that, under the terms of the Master Partnership Agreement,
     must or should receive a special approval of the Conflicts and Audit
     Committee of the General Partner, or

o    take any action that, under the terms of the Master Partnership Agreement,
     cannot be taken by the General Partner without the approval of all
     outstanding units of the Master Partnership, or

o    settle or compromise any claim, dispute or litigation directly against or
     otherwise relating to indemnification of Management, the General Partner,
     Affiliates of the General Partner or Management, or any of their officers,
     directors, managers or members, or

o    settle or compromise any claim, dispute or litigation relating to the
     i-units, the Listed Shares or the Offering, or

o    settle or compromise any claim, dispute or litigation involving tax
     matters, or

o    allow the Master Partnership to incur indebtedness exceeding 50% of the
     market value of all of the then outstanding units of the Master
     Partnership, or

o    allow the Master Partnership to issue units in one transaction, or in a
     series of related transactions, having a market value in excess of 20% of
     the market value of then outstanding units of the Master Partnership.

                                      -9-

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