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EXHIBIT 4(c)
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K N ENERGY, INC.
AND
CONTINENTAL BANK, NATIONAL ASSOCIATION
TRUSTEE.
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SECOND SUPPLEMENTAL INDENTURE
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Dated as of December 15, 1992
Supplementing the Indenture
dated as of
September 1, 1988
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THIS SECOND SUPPLEMENTAL INDENTURE, dated as of December 15, 1992,
between K N Energy, Inc., a Kansas corporation (the "Company"), and Continental
Bank, National Association, a national banking association (the "Trustee"), as
Trustee under the Original Indenture referred to below,
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issuance from time to
time of its unsecured debentures, notes or other evidences of indebtedness (the
"Securities"), which are to be issued in one or more series; and the Company has
heretofore made, executed and delivered to the Trustee its Indenture dated as
of September 1, 1988 (such Indenture, as amended by the Trust Indenture Reform
Act of 1990 and the First Supplemental Indenture dated as of January 15, 1992,
being sometimes referred to herein as the "Original Indenture") pursuant to
which the Securities are issuable;
WHEREAS, Sections 2.01, 9.01(7) and 11.01 of the Original Indenture
provide that the form or terms of any series of Securities may be established
in an indenture supplemental thereto, and the Company desires to establish in
this Second Supplemental Indenture both the form and terms of a series of
Securities designated as its 7.27% Senior Notes due December 15, 2002 (the
"Notes");
WHEREAS, Section 9.01 of Article Nine of the Original Indenture
further provides that under certain conditions the Company and Trustee, may,
without the consent of any Holders, from time to time and at any time, enter
into an indenture or indentures supplemental thereto, for the purposes, inter
alia, of adding to the covenants of the Company for the benefit of the Holders
of all or any series of Securities, and adding any additional Events of
Default, and the Company desires by means of this Second Supplemental Indenture
to add to its covenants for the sole benefit of the Holders of the Notes and to
add certain additional Events of Default, also solely for the benefit of such
Holders;
WHEREAS, all things necessary to authorize the execution and delivery
of this Second Supplemental Indenture, to establish the Notes as provided for
in this Second Supplemental Indenture, and to make the Original Indenture, as
supplemented by this Second Supplemental Indenture (the Original Indenture, as
so supplemented by this Second Supplemental Indenture, being sometimes referred
to herein as the "Indenture"), a valid agreement of the Company, in accordance
with its terms, have been done;
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH that for
and in consideration of the premises and the purchase of the Notes by the
Holders, the Company and the Trustee mutually covenant and agree, solely
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for the equal and proportionate benefit of the respective Holders from time to
time of the Notes, as follows:
ARTICLE 1
SUPPLEMENT OF THE ORIGINAL INDENTURE
Section 1.1 SUPPLEMENT TO ARTICLE ONE OF THE ORIGINAL INDENTURE.
Section 1.01 of the Original Indenture is supplemented by inserting therein, in
alphabetical order, the following definitional paragraphs:
"Assets" means any property of the Company or a Subsidiary used in
businesses in which the Company and its Subsidiaries are engaged as of December
15, 1992.
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be redeemed at the option of the Company or is declared to
be immediately due and payable pursuant to the acceleration provisions of the
Indenture, as the context requires.
"Capitalization" means, with respect to any Material Subsidiary, the
sum of (A) the total of the amounts set forth on the consolidated balance sheet
of such Material Subsidiary and its Subsidiaries, prepared in accordance with
generally accepted accounting principles as of the date of the most recent
regularly prepared consolidated financial statements prior to the taking of any
action for the purpose of which the determination is being made, as (a) the par
or stated value of all outstanding capital stock of such Material Subsidiary,
(b) capital in excess of par value, (c) retained earnings and (d) deferred
income taxes and (B) the principal amount of Funded Indebtedness of such
Material Subsidiary and its Subsidiaries computed on a consolidated basis as of
the time of such determination.
"Consolidated Assets" means the total amount of assets appearing on
the consolidated balance sheet of the Company and its Subsidiaries, prepared in
accordance with generally accepted accounting principles as of the date of the
most recent regularly prepared consolidated financial statements prior to the
taking of any action for the purposes of which the determination is being made.
"Consolidated Capitalization" means the sum of (A) the total of the
amounts set forth on the consolidated balance sheet of the Company and its
Subsidiaries, prepared in accordance with generally accepted accounting
principles as of the date of the most recent regularly prepared consolidated
financial statements prior to the taking of any action for the purpose of which
the determination is being made, as (a) the par or stated value of all
outstanding capital stock of the Company, (b) capital in excess of par value,
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(c) retained earnings and (d) deferred income taxes and (B) the principal
amount of Funded Indebtedness of the Company and its Subsidiaries computed on a
consolidated basis as of the time of such determination.
"Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective Stated Maturities to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Executive Officer" means the Chairman, any Vice Chairman, the
President, the Chief Financial Officer and the General Counsel of the Company,
and, to the extent not included in the foregoing, the chief executive officer,
the chief operating officer and the chief accounting officer of the Company.
"Material Subsidiary" means (i) any Subsidiary the assets of which
constitute 15% or more of Consolidated Assets; (ii) Northern Gas Company, a
Wyoming corporation; and (iii) Rocky Mountain Natural Gas Company, a Colorado
corporation.
"Notes" means the series of the Securities denominated as the 7.27%
Senior Notes due December 15, 1992.
"Note Agreement" means the Note Agreement dated as of December 15,
1992 among the Company, The Prudential Insurance Company of America and
Prudential Reinsurance Company, as the same may be amended or supplemented from
time to time.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, the yield to maturity implied by (i) the yields reported, as of
10:00 a.m. (New York City time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page 678" on the Telerate Service (or such other display as may replace Page
678 on the Telerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average life of such Called Principal as of
such Settlement Date, or if such yields shall not be reported as of such time or
the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting
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U.S. Treasury xxxx quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly between yields
reported for various maturities.
"Remaining Average Life" means, with respect to the Called Principal
of any Note, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) each Remaining Scheduled Payment of such
Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the Stated Maturity
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
Stated Maturity.
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be redeemed at the option
of the Company or is declared to be immediately due and payable pursuant to the
acceleration provisions of the Indenture, as the context requires.
"Stock" means any capital stock of any corporation or any partnership
interest of any partnership (limited or general), any joint venture interest in
any joint venture, and any similar interests.
"Tangible Net Worth" means the total assets of the Company and its
Subsidiaries appearing on a consolidated balance sheet prepared in accordance
with generally accepted accounting principles (exclusive of goodwill, patents,
trademarks, trade names, organization expense, treasury stock, unamortized debt
discount and premium, deferred charges and other like intangibles) less all
liabilities (including deferred income taxes and subordinated liabilities).
"Yield-Maintenance Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Called Principal of
such Note over the sum of (i) such Called Principal plus (ii) interest accrued
thereon as of (including interest due on) the Settlement Date with respect to
such Called Principal. The Yield Maintenance Amount shall in no event be less
than zero.
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Section 1.2 SUPPLEMENT TO ARTICLE FOUR OF THE ORIGINAL INDENTURE.
Article Four of the Original Indenture is supplemented by inserting the
following Sections at the end thereof:
Section 4.13. Maintain Business.
The Company will, and will cause each of its Subsidiaries to, carry on
and conduct its respective business in substantially the same manner and in
substantially the same general lines of business as it is presently conducted,
including without limitation the transmission and retail distribution of
natural gas.
Section 4.14. Maintain Insurance.
The Company will maintain or cause to be maintained with, in the good
faith judgment of the Company, financially sound and reputable insurers, or
through self-insurance, insurance with respect to its properties and business
and the properties and businesses of its Subsidiaries against loss or damage of
the kinds customarily insured against by corporations of established reputation
engaged in the same or similar business and similarly situated, of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations. Such insurance may include self-insurance or be
subject to co-insurance, deductibility or similar clauses which, in effect,
result in self-insurance of certain losses, provided that such self-insurance
is in accord with the approved practices of corporations similarly situated and
adequate insurance reserves are maintained in connection with such
self-insurance, and, notwithstanding the foregoing provisions of this Section
4.14 the Company or any Subsidiary may effect workers' compensation or similar
insurance in respect of operations in any state or other jurisdiction either
through an insurance fund operated by such state or other jurisdiction or by
causing to be maintained a system or systems of self-insurance in accord with
applicable laws.
Section 4.15. Funded Indebtedness.
The Company will not incur, and will not permit any Subsidiary to
incur, any Funded Indebtedness unless the aggregate amount of Funded
Indebtedness of the Company and its Subsidiaries computed on a consolidated
basis immediately thereafter (after giving effect to the substantially
concurrent use of proceeds of such Funded Indebtedness) will not exceed an
amount equal to 65% of Consolidated Capitalization.
Section 4.16. Subsidiary Debt.
The Company will not permit any of its Material Subsidiaries to incur
any Funded Indebtedness unless the aggregate amount of Funded Indebtedness of
such Material Subsidiary and its Subsidiaries immediately thereafter (after
giving effect to the
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substantially concurrent use of proceeds of such Funded Indebtedness) will not
exceed an amount equal to 65% of such Material Subsidiary's Capitalization.
Further, the Company will not permit any of its Subsidiaries to incur any
Funded Indebtedness unless the aggregate amount of Funded Indebtedness of all
of the Company's Subsidiaries immediately thereafter (after giving effect to
the substantially concurrent use of proceeds of such Funded Indebtedness) will
not exceed an amount equal to 51% of the aggregate amount of Funded
Indebtedness of the Company and its Subsidiaries. For purposes of this Section
4.16, the term "Funded Indebtedness" excludes any Funded Indebtedness of the
Company to its Subsidiaries or any Funded Indebtedness of a Subsidiary to the
Company or another Subsidiary.
Section 4.17. Net Worth.
If at any time the rating of any of the long term senior debt of the
Company is reduced by either Xxxxx'x Investors Service or Standard & Poor's
Corporation to a rating below Baa2 or BBB+, as applicable (or in the absence of
such a rating by either Standard & Poor's Corporation or Xxxxx'x Investors
Service, a rating comparable to Baa2 by another nationally recognized
statistical rating organization) (any such event, a "Downgrade"), then the
Company will not permit its Tangible Net Worth to be less than the greater of
(i) $150,000,000 or (ii) an amount equal to 90% of the Company's Tangible Net
Worth as of the fiscal year end next preceding the date of the Downgrade.
Section 4.18. Sale of Assets.
The Company will not, and will not permit any Subsidiary to, sell,
transfer or otherwise dispose of, in a transaction or a series of substantially
related transactions, Stock of a Subsidiary, property or other assets
(including without limitation a disposition of the Stock of a Subsidiary,
property or other assets pursuant to an order, judgment or decree of a court or
governmental authority) with a fair market value of 20% or more of Consolidated
Assets (other than any such disposition by a Subsidiary to the Company or by
the Company or a Subsidiary to another Subsidiary), unless (i) said Stock,
property or other assets are sold, transferred or otherwise disposed of for a
consideration at least equal to the fair value thereof (as determined by the
Board of Directors of the Company) and (ii) the proceeds of such asset
disposition are applied to the defeasance or the payment of Funded Indebtedness
of the Company or any Subsidiary, or used within twelve months of such asset
disposition to purchase or invest in Assets.
Section 4.19. Sale of Subsidiary Stock.
Issuance of Stock by Subsidiaries. The Company will not, and will not
permit any Subsidiary to, issue, sell or otherwise dispose of any Stock (either
directly, or indirectly by
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the issuance of rights or options for, or securities convertible into, such
Stock) of any Material Subsidiary (other than directors' qualifying shares),
except to the Company or another Material Subsidiary, if, as a result of such
issuance, sale or disposition (giving full effect to the exercise of any such
rights, options or conversion rights) such Material Subsidiary would no longer
qualify as a Subsidiary.
Section 4.20. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 4.13 through 4.19,
inclusive, with respect to the Notes if before the time for such compliance the
holders of at least 66 2/3% in aggregate principal amount of the Outstanding
Notes shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
Section 4.21. Premium on Certain Defaults.
The Company will pay a premium on each of the Outstanding Notes equal
to the Yield-Maintenance Amount, if any, in the event the Notes are declared to
be due and payable immediately pursuant to Article Six as a result of any of
the Events of Default referred to either in clauses (1)-(5) of Section 6.01 or
in subclauses (a)-(e) of clause (8) thereof.
Section 1.3 SUPPLEMENT TO ARTICLE SIX OF THE ORIGINAL INDENTURE.
Section 6.01 of the Original Indenture is supplemented by inserting, as part of
clause (8) thereof, the following subclauses:
(a) default in the payment of any interest on any Note for
more than 10 days after the date due; or
(b) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any Indebtedness (other than the Notes)
beyond any period of grace provided with respect thereto, or the
Company or any Subsidiary fails to perform or observe any other
agreement, term or condition contained in any agreement under which
any such Indebtedness is created (or if any other event thereunder or
under any such agreement shall occur and be continuing) and the effect
of such failure or other event is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee on behalf of such holder or
holders) to cause, such Indebtedness to become
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due (or to be repurchased by the Company or any Subsidiary) prior to
any Stated Maturity, provided that the aggregate amount of all
Indebtedness as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur
and be continuing exceeds $10,000,000; provided, however, if any such
payment default, failure or other event is cured by the Company or
such Subsidiary or is waived by the specified percentage of holders of
such Indebtedness entitled to so waive, then this Event of Default
under this Indenture by reason of such default, failure or other event
shall be deemed to have been cured; or
(c) any representation or warranty made by the Company in or
pursuant to the Note Agreement shall be false in any material respect
on the date as of which made; or
(d) the Company fails to perform or observe (i) any covenant
contained in Section 4.15 through Section 4.19 or (ii) its covenant
contained in paragraph 5 of the Note Agreement to obtain the prior
approval of certain holders of the Notes to any instrument equally and
ratably securing the Notes and any other indebtedness of the Company
under the circumstances described in the initial paragraph of Section
4.07, but if any such failure under the Note Agreement is cured by the
Company or is waived by the specified percentage of Holders of the
Notes entitled to so waive thereunder, then this Event of Default
under this Indenture by reason of such failure shall be deemed to have
been cured; or
(e) the Company fails to perform or observe any other
covenant or agreement contained in Section 4.13 or 4.14 or in the Note
Agreement and such failure shall not be remedied within 30 days after
any Executive Officer obtains actual knowledge thereof, but if any
such failure under the Note Agreement is cured by the Company or is
waived by the specified percentage of Holders of the Notes entitled to
so waive thereunder, then this Event of Default under this Indenture
by reason of such failure shall be deemed to have been cured; or
(f) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of any Material
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging any Material Subsidiary
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or
in respect of any Material Subsidiary under any applicable Federal or
State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of any Material
Subsidiary or of any substantial part of its property, or ordering the
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winding up or liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 90 consecutive days; or
(g) the commencement by any Material Subsidiary of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of any Material Subsidiary in an involuntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State law, or the consent by
it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of any Material Subsidiary or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by any Material Subsidiary in furtherance of any
such action; or
(h) a final judgment in an amount in excess of $50,000,000 is
rendered against the Company or any Material Subsidiary and, within 30
days after entry thereof, such judgment is not discharged or execution
thereof stayed pending appeal, or within 30 days after the expiration
of any such stay, such judgment is not discharged.
ARTICLE 2
THE NOTES
Section 2.1 FORM AND TERMS. In lieu of any form set forth in Sections
11.02 and 11.03 of the Original Indenture, the Notes shall be in the form of
Exhibit A hereto. The terms of the Notes set forth in Exhibit A shall be part
of the terms and provisions of this Second Supplemental Indenture as fully as
if set forth herein.
Section 2.2 DENOMINATIONS. The Notes shall be issuable in registered
form without coupons in denominations of $100,000 and any integral multiple
thereof, except as such amounts may be adjusted following a partial redemption
and related selections of the Notes pursuant to Section 2.3 of this Second
Supplemental Indenture.
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Section 2.3 SELECTION OF SECURITIES FOR PARTIAL REDEMPTION. If less
than all the Notes are to be redeemed pursuant to either Article Three or
Twelve of the Indenture, then, in lieu of the selection procedures described in
the initial paragraph of Section 3.03 of the Indenture, the Trustee shall
select for redemption not more than 45 days prior to the Redemption Date an
equal proportion of the respective principal amounts of each of the Outstanding
Notes (including, for purposes of this provision only, any Notes owned by the
Company or any other obligor upon the Notes or any Affiliate of the Company or
of such other obligor that have been purchased or otherwise acquired by it
other than by redemption pursuant to such Article Three or Twelve).
ARTICLE 3
REPRESENTATIONS OF THE COMPANY
Section 3.1 AUTHORITY OF THE COMPANY. The Company is duly authorized
to execute and deliver this Second Supplemental Indenture, and all corporate
action on its part required for the execution and delivery of this Second
Supplemental Indenture has been duly and effectively taken.
Section 3.2 TRUTH OF RECITALS AND STATEMENTS. The Company warrants
that the recitals of fact and statements contained in this Second Supplemental
Indenture are true and correct, and that the recitals of fact and statements
contained in all certificates and other documents furnished thereunder will be
true and correct.
ARTICLE 4
CONCERNING THE TRUSTEE
Section 4.1 ACCEPTANCE OF TRUSTS. The Trustee accepts the trusts
hereunder and agrees to perform the same, but only upon the terms and
conditions set forth in the Original Indenture and in this Second Supplemental
Indenture, to all of which the Company and the respective Holders of the Notes
at any time hereafter outstanding agree by their acceptance thereof.
Section 4.2 NO RESPONSIBILITY OF TRUSTEE FOR RECITALS, ETC. The
recitals and statements contained in this Second Supplemental Indenture shall
be taken as the recitals and statements of the Company, and the Trustee assumes
no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Second Supplemental
Indenture, except that the Trustee is duly authorized to execute and deliver
this Second Supplemental Indenture.
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ARTICLE 5
MISCELLANEOUS PROVISIONS
Section 5.1 RELATION TO THE INDENTURE. The provisions of this Second
Supplemental Indenture shall become effective immediately upon the execution
and delivery hereof. This Second Supplemental Indenture and all the terms and
provisions herein contained shall form a part of the Indenture as fully and
with the same effect as if all such terms and provisions had been set forth in
the Original Indenture; provided, however, such terms and provisions shall be
so included in the Indenture solely for the benefit of the Holders of the
Notes. The Original Indenture is hereby ratified and confirmed and shall remain
and continue in full force and effect in accordance with the terms and
provisions thereof, as supplemented by this Second Supplemental Indenture, and
the Original Indenture and this Second Supplemental Indenture shall be read,
taken and construed together as one instrument.
Section 5.2 MEANING OF TERMS. Any term used in this Second
Supplemental Indenture which is defined in the Original Indenture shall have
the meaning specified in the Original Indenture, unless the context shall
otherwise require.
Section 5.3 COUNTERPARTS OF SECOND SUPPLEMENTAL INDENTURE. This Second
Supplemental Indenture may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instruments.
Section 5.4 GOVERNING LAW. This Second Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the laws of the
State of New York.
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IN WITNESS WHEREOF, K N Energy, Inc. has caused this Second
Supplemental Indenture to be executed in its corporate name by one of its Vice
Presidents and Continental Bank, National Association, has caused this Second
Supplemental Indenture to be executed in its corporate name by one of its Vice
Presidents or Trust Officers, all as of the date first above written.
K N ENERGY, INC.
By: /s/ E. Xxxxx Xxxxxxxxx
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E. Xxxxx Xxxxxxxxx
Vice President -- Finance & Accounting
CONTINENTAL BANK, NATIONAL
ASSOCIATION, Trustee
By: /s/ X. X. Xxxxxxx
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X. X. Xxxxxxx
Vice President
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