Exhibit 10.28

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

COPANO ENERGY, L.L.C.

AND

KAYNE ANDERSON MLP INVESTMENT COMPANY

RCH ENERGY MLP FUND LP
RCH ENERGY MLP FUND-A LP
TORTOISE ENERGY INFRASTRUCTURE CORPORATION
TORTOISE ENERGY CAPITAL CORPORATION
GOLDMAN, SACHS & CO.
ENERGY INCOME AND GROWTH FUND
FIDUCIARY/CLAYMORE MLP OPPORTUNITY FUND
ALERIAN OPPORTUNITY PARTNERS LP
ALERIAN CAPITAL PARTNERS LP
STROME MLP FUND, L.P.
STROME ALPHA, LP
AND
STROME FAMILY FOUNDATION

 

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Table of Contents

 

 

 

ARTICLE I
DEFINITIONS

Section 1.01

Definitions

 

Section 1.02

Registrable Securities

 

ARTICLE II
REGISTRATION RIGHTS

Section 2.01

Shelf Registration.

 

Section 2.02

Piggyback Rights.

 

Section 2.03

Underwritten Offering.

 

Section 2.04

Sale Procedures

 

Section 2.05

Cooperation by Holders

 

Section 2.06

Restrictions on Public Sale by Holders of Registrable Securities

 

Section 2.07

Expenses.

 

Section 2.08

Indemnification.

 

Section 2.09

Rule 144 Reporting

 

Section 2.10

Transfer or Assignment of Registration Rights

 

Section 2.11

Limitation on Subsequent Registration Rights

 

Section 2.12

Lock-Up

 

ARTICLE III
MISCELLANEOUS

Section 3.01

Communications

 

Section 3.02

Successor and Assigns

 

Section 3.03

Assignment of Rights

 

Section 3.04

Aggregation of Purchased Units

 

Section 3.05

Recapitalization, Exchanges, Etc. Affecting the Common Units

 

Section 3.06

Specific Performance

 

Section 3.07

Counterparts

 

Section 3.08

Headings

 

Section 3.09

Governing Law

 

Section 3.10

Severability of Provisions

 

Section 3.11

Entire Agreement

 

Section 3.12

Amendment

 

Section 3.13

No Presumption

 

 

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REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of August 1, 2005, by and among Copano Energy, L.L.C., a Delaware limited
liability company (“Copano”), and KAYNE ANDERSON MLP INVESTMENT COMPANY
(“KAMIC”), RCH ENERGY MLP FUND LP (“RCH”), RCH ENERGY MLP FUND-A LP (“RCH-A”),
GOLDMAN, SACHS & CO., on behalf of Principal Strategies Group (“Goldman”),
TORTOISE ENERGY INFRASTRUCTURE CORPORATION (“TEIFC”), TORTOISE ENERGY CAPITAL
CORPORATION (“TECC”), ENERGY INCOME AND GROWTH FUND (“EIGF”), FIDUCIARY/CLAYMORE
MLP OPPORTUNITY FUND (“FCMOF”), ALERIAN OPPORTUNITY PARTNERS LP (“AOP”), ALERIAN
CAPITAL PARTNERS LP (“ACP”), STROME MLP FUND, L.P. (“SMF”), STROME ALPHA, LP
(“SA”) AND STROME FAMILY FOUNDATION (“SFF”) (each of KAMIC, RCH, RCH-A, TEIFC,
TECC, EIGF, FCMOF, AOP, ACP, SMF, SA and SFF a “Purchaser” and collectively, the
“Purchasers”).

WHEREAS, this Agreement is made in connection with the Closing of the issuance
and sale of the Purchased Units pursuant to the Class B Unit and Common Unit
Purchase Agreement, dated as of June 17, 2005, by and among Copano and the
Purchasers (the “Purchase Agreement”);

WHEREAS, Copano has agreed to provide the registration and other rights set
forth in this Agreement for the benefit of the Purchasers pursuant to the
Purchase Agreement; and

WHEREAS, it is a condition to the obligations of each Purchaser and Copano under
the Purchase Agreement that this Agreement be executed and delivered.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by each party hereto, the parties hereby agree as
follows:

ARTICLE I
DEFINITIONS

Section 1.01          Definitions.  Capitalized terms used herein without
definition shall have the meanings given to them in the Purchase Agreement.  The
terms set forth below are used herein as so defined:

“Effectiveness Period” has the meaning specified therefor in Section 2.01 of
this Agreement.

“Holder” means the record holder of any Registrable Securities.

“Included Registrable Securities” has the meaning specified therefor in
Section 2.02(a) of this Agreement.

“Liquidated Damages” has the meaning specified therefor in Section 2.01(a) of
this Agreement.

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“Liquidated Damages Multiplier” means the product of $28.05 times the number of
Class B Units purchased by such Purchaser plus the product of $28.78 times the
number of Common Units held by such Purchaser.

“Losses” has the meaning specified therefor in Section 2.08(a) of this
Agreement.

“Managing Underwriter” means, with respect to any Underwritten Offering, the
book-running lead manager of such Underwritten Offering.

“Other Holder” has the meaning specified in Section 2.02(b).

“Piggyback Registration” has the meaning specified therefor in Section 2.02(a)
of this Agreement.

“Purchase Agreement” has the meaning specified therefor in the Recitals of this
Agreement.

“Purchaser” and “Purchasers” have the meanings specified therefor in the
introductory paragraph of this Agreement.

“Registrable Securities” means: (i) the Purchased Units, (ii) the Common Units
underlying the Class B Units, and (iii) any Common Units or Class B Units issued
as Liquidated Damages pursuant to Section 2.01(a) this Agreement, all of which
Registrable Securities are subject to the rights provided herein until such
rights terminate pursuant to the provisions hereof.

“Registration Expenses” has the meaning specified therefor in Section 2.07(a) of
this Agreement.

“Selling Expenses” has the meaning specified therefor in Section 2.07(a) of this
Agreement.

“Selling Holder” means a Holder who is selling Registrable Securities pursuant
to a registration statement.

“Shelf Registration Statement” means a registration statement under the
Securities Act to permit the resale of the Registrable Securities from time to
time, including as permitted by Rule 415 of the Securities Act (or any similar
provision then in force under the Securities Act).

“Underwritten Offering” means an offering (including an offering pursuant to a
Shelf Registration Statement) in which Common Units are sold to an underwriter
on a firm commitment basis for reoffering to the public or an offering that is a
“bought deal” with one or more investment banks.

Section 1.02          Registrable Securities.  Any Registrable Security will
cease to be a Registrable Security when (a) a registration statement covering
such Registrable Security has been declared effective by the Commission and such
Registrable Security has been sold or disposed of pursuant to such effective
registration statement; (b) such Registrable Security has been disposed of
pursuant to any section of Rule 144 (or any similar provision then in force

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under the Securities Act); (c) such Registrable Security is held by Copano or
one of its subsidiaries; or (d) such Registrable Security has been sold in a
private transaction in which the transferor’s rights under this Agreement are
not assigned to the transferee of such securities.

ARTICLE II
REGISTRATION RIGHTS

Section 2.01          Shelf Registration.

(a)           Deadline To Go Effective.  As soon as practicable following the
Closing, but in any event within 135 days of the Closing, Copano shall prepare
and file a Shelf Registration Statement under the Act with respect to all of the
Registrable Securities.  Copano shall use its commercially reasonable efforts to
cause the Shelf Registration Statement to become effective no later than 195
days after the date of the Closing.  A Shelf Registration Statement filed
pursuant to this Section 2.01 shall be on such appropriate registration form of
the Commission as shall be selected by Copano; provided, however, that if a
prospectus supplement will be used in connection with the marketing of an
Underwritten Offering from the Shelf Registration Statement and the Managing
Underwriter at any time shall notify Copano in writing that, in the sole
judgment of such Managing Underwriter, inclusion of detailed information to be
used in such prospectus supplement is of material importance to the success of
the Underwritten Offering of such Registrable Securities, Copano shall use its
commercially reasonable efforts to include such information in the prospectus. 
Copano will use its commercially reasonable efforts to cause the Shelf
Registration Statement filed pursuant to this Section 2.01 to be continuously
effective under the Securities Act until the earlier of (i) when all such
Registrable Securities are sold by the Purchaser or (ii) two years from the date
the Shelf Registration Statement is declared effective by the Commission (the
“Effectiveness Period”).  The Shelf Registration Statement when declared
effective (including the documents incorporated therein by reference) will
comply as to form with all applicable requirements of the Securities Act and the
Exchange Act and will not 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.

(b)           Failure To Go Effective.  If the Shelf Registration Statement
required by Section 2.01 is not declared effective within 225 days after
Closing, then each Purchaser shall be entitled to a payment (with respect to
each of such Purchaser’s Purchased Units), as liquidated damages and not as a
penalty, of .25% of the Liquidated Damages Multiplier per 30-day period for the
first 60 days following the 225th day, increasing by an additional .25% of the
Liquidated Damages Multiplier per 30-day period for each subsequent 60 days, up
to a maximum of 1.00% of the Liquidated Damages Multiplier per 30-day period
(the “Liquidated Damages”), which shall be payable within 10 Business Days of
the end of such 30-day period.  The Liquidated Damages shall be paid to each
Purchaser in cash; provided, however, if Copano certifies that it is unable to
pay the Liquidated Damages in cash because such payment would result in a breach
under any of Copano’s or Copano’s Subsidiaries’ credit facilities filed as
exhibits to Copano’s SEC Documents, then Copano may pay the Liquidated Damages
in kind in the form of the issuance of additional (A) Common Units or (B) Common
Units and Class B Units.  Class B Units may only be issued as Liquidated Damages
if and to the extent required by The Nasdaq National Market or similar
regulation.  If Common Units and Class B Units are issued as Liquidated Damages
as a result of a requirement by The Nasdaq National Market or similar

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regulation, then such units will be issued to each Purchaser in such a manner as
to maximize the number of Common Units issued to each Purchaser and in no event
shall the percentage of Class B Units issued to a Purchaser relative to the
percentage of Common Units issued to such Purchaser exceed the percentage that
is determined by dividing the number of Class B Units originally purchased by
such Purchaser by the number of Common Units plus the number of Class B Units
originally purchased by such Purchaser. Upon any issuance of Common Units and/or
Class B Units as Liquidated Damages, Copano shall promptly prepare and file an
amendment to the Shelf Registration Statement prior to its effectiveness adding
such Common Units and/or Class B Units to such Shelf Registration Statement as
additional Registrable Securities. The determination of the number of Common
Units and/or Class B Units to be issued as Liquidated Damages shall be equal to
the Liquidated Damages divided by the average closing price of Copano’s Common
Units on The Nasdaq National Market for the ten trading days immediately
preceding the date on which the Liquidated Damages payment is due.  The payment
of the Liquidated Damages to a Purchaser shall cease at such time as the
Purchased Units of such Purchaser become eligible for resale under Rule 144(k).

(c)           Waiver of Liquidated Damages.  If Copano is unable to cause a
Shelf Registration Statement to go effective within the 225 days as a result of
an acquisition, merger, reorganization, disposition or other similar
transaction, then Copano may request a waiver of the Liquidated Damages, which
may be granted or withheld by the consent of the holders of a majority of the
Purchased Units, in their sole discretion.  Purchaser’s rights (and any
transferee’s rights pursuant to Section 2.10) under this Section 2.01 shall
terminate when such Registrable Securities become eligible for resale under
Rule 144(k) (or any similar provision then in force under the Securities Act).

(d)           Delay Rights.  Notwithstanding anything to the contrary contained
herein, Copano may, upon written notice to any Selling Holder whose Registrable
Securities are included in the Shelf Registration Statement, suspend such
Selling Holder’s use of any prospectus which is a part of the Shelf Registration
Statement (in which event the Selling Holder shall discontinue sales of the
Registrable Securities pursuant to the Shelf Registration Statement) if
(i) Copano is pursuing an acquisition, merger, reorganization, disposition or
other similar transaction and Copano determines in good faith that Copano’s
ability to pursue or consummate such a transaction would be materially adversely
affected by any required disclosure of such transaction in the Shelf
Registration Statement or (ii) Copano has experienced some other material
non-public event the disclosure of which at such time, in the good faith
judgment of Copano, would materially adversely affect Copano; provided, however,
in no event shall the Purchasers be suspended for a period exceeding an
aggregate of ninety (90) days (exclusive of days covered by any lock-up
agreement executed by a Purchaser in connection with any Underwritten Offering
by Copano or a Purchaser) in any 365-day period.  Upon disclosure of such
information or the termination of the condition described above, Copano shall
provide prompt notice to the Selling Holders whose Registrable Securities are
included in the Shelf Registration Statement, and shall promptly terminate any
suspension of sales it has put into effect and shall take such other actions to
permit registered sales of Registrable Securities as contemplated in this
Agreement.

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Section 2.02          Piggyback Rights.

(a)           Participation.  If at any time Copano proposes to file (i) a
prospectus supplement to an effective shelf registration statement, including
the Shelf Registration Statement contemplated by Section 2.01, or (ii) a
registration statement, other than a shelf registration statement, in either
case, for the sale of Common Units in an Underwritten Offering for its own
account and/or another Person, then as soon as practicable but not less than
three (3) Business Days prior to the filing of (x) any preliminary prospectus
supplement relating to such Underwritten Offering pursuant to Rule 424(b),
(y) the prospectus supplement relating to such Underwritten Offering pursuant to
Rule 424(b) (if no preliminary prospectus supplement is used) or (z) such
registration statement as the case may be, then, Copano shall give notice of
such proposed Underwritten Offering to the Holders and such notice shall offer
the Holders the opportunity to include in such Underwritten Offering such number
of Registrable Securities (the “Included Registrable Securities”) as each such
Holder may request in writing; provided, however, that if Copano has been
advised by the Managing Underwriter that the inclusion of Registrable Securities
for sale for the benefit of the Holders will have an adverse effect on the
price, timing or distribution of the Common Units, then the amount of
Registrable Securities to be offered for the accounts of Holders shall be
determined based on the provisions of Section 2.02(b).  The notice required to
be provided in this Section 2.02(a) to Holders shall be provided on a Business
Day pursuant to Section 3.01 hereof and receipt of such notice shall be
confirmed by Holder.  Holder shall then have one Business Day after such Holder
confirms receipt of the notice to request inclusion of Registrable Securities in
the Underwritten Offering.  If no request for inclusion from a Holder is
received within the specified time, such Holder shall have no further right to
participate in such Underwritten Offering.  If, at any time after giving written
notice of its intention to undertake an Underwritten Offering and prior to the
closing of such Underwritten Offering, Copano shall determine for any reason not
to undertake or to delay such Underwritten Offering, Copano may, at its
election, give written notice of such determination to the Selling Holders and,
(x) in the case of a determination not to undertake such Underwritten Offering,
shall be relieved of its obligation to sell any Included Registrable Securities
in connection with such terminated Underwritten Offering, and (y) in the case of
a determination to delay such Underwritten Offering, shall be permitted to delay
offering any Included Registrable Securities for the same period as the delay in
the Underwritten Offering. Any Selling Holder shall have the right to withdraw
such Selling Holder’s request for inclusion of such Selling Holder’s Registrable
Securities in such offering by giving written notice to Copano of such
withdrawal up to and including the time of pricing of such offering.  Each
Holder’s rights under this Section 2.02(a) shall terminate when such Holder
holds less than five million ($5,000,000) of Purchased Units.

(b)           Priority of Piggyback Rights.  If the Managing Underwriter or
Underwriters of any proposed Underwritten Offering of Common Units included in
an Underwritten Offering involving Included Registrable Securities advises
Copano that the total amount of Common Units that the Selling Holders and any
other Persons intend to include in such offering exceeds the number that can be
sold in such offering without being likely to have an adverse effect on the
price, timing or distribution of the Common Units offered or the market for the
Common Units, then the Common Units to be included in such Underwritten Offering
shall include the number of Registrable Securities that such Managing
Underwriter or Underwriters advises Copano can be sold without having such
adverse effect, with such number to be allocated (i) first, to Copano;

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(ii) second, to Copano’s pre-IPO investors as provided in (A) the Stakeholders’
Agreement dated July 30, 2004, and (B) Article XIV of the Company’s Second
Amended and Restated Limited Liability Company Agreement dated November 15,
2004; and (iii) third, pro rata among the Selling Holders who have requested
participation in such Underwritten Offering based, for each Selling Holder, on
the fraction derived by dividing (x) the number of Common Units proposed to be
sold by such Selling Holder in such Underwritten Offering by (y) the aggregate
number of Common Units proposed to be sold be all Selling Holders in such
Underwritten Offering.  As of the date of execution of this Agreement, there are
no other Persons with Registration Rights other than as described in this
Section 2.02(b).

Section 2.03          Underwritten Offering.

(a)           S-3 Registration.  If a Selling Holder elects to dispose of
Registrable Securities under the Shelf Registration Statement pursuant to an
Underwritten Offering and reasonably anticipates gross proceeds of greater than
$20 million from such Underwritten Offering, Copano shall, at the request of
such Selling Holder, enter into an underwriting agreement in customary form with
the Managing Underwriter or Underwriters, which shall include, among other
provisions, indemnities to the effect and to the extent provided in
Section 2.08, and shall take all such other reasonable actions as are requested
by the Managing Underwriter to expedite or facilitate the disposition of the
Registrable Securities; provided, however, Copano management will not be
required to participate in any roadshow or similar marketing effort on behalf of
any Selling Holder.

(b)           General Procedures.  In connection with any Underwritten Offering
under this Agreement, Copano shall be entitled to select the Managing
Underwriter or Underwriters.  In connection with an Underwritten Offering under
Section 2.01 or Section 2.03 hereof, each Selling Holder and Copano shall be
obligated to enter into an underwriting agreement that contains such
representations, covenants, indemnities and other rights and obligations as are
customary in underwriting agreements for firm commitment offerings of
securities.  No Selling Holder may participate in such Underwritten Offering
unless such Selling Holder agrees to sell its Registrable Securities on the
basis provided in such underwriting agreement and completes and executes all
questionnaires, powers of attorney, indemnities and other documents reasonably
required under the terms of such underwriting agreement.  Each Selling Holder
may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, Copano to and for the
benefit of such underwriters also be made to and for such Selling Holder’s
benefit and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement also be conditions precedent
to its obligations. No Selling Holder shall be required to make any
representations or warranties to or agreements with Copano or the underwriters
other than representations, warranties or agreements regarding such Selling
Holder and its ownership of the securities being registered on its behalf and
its intended method of distribution and any other representation required by
law.  If any Selling Holder disapproves of the terms of an underwriting, such
Selling Holder may elect to withdraw therefrom by notice to Copano and the
Managing Underwriter; provided, however, that such withdrawal must be made prior
to the time in the penultimate sentence of Section 2.02(a) hereof to be
effective.  No such withdrawal or abandonment shall affect Copano’s obligation
to pay Registration Expenses.

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Section 2.04          Sale Procedures.  In connection with its obligations
contained in Section 2.01 and Section 2.03, Copano will, as expeditiously as
possible:

(a)           prepare and file with the Commission such amendments and
supplements to the Shelf Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Shelf Registration
Statement effective for the Effectiveness Period and as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by the Shelf Registration Statement;

(b)           furnish to each Selling Holder (i) as far in advance as reasonably
practicable before filing the Shelf Registration Statement or any other
registration statement contemplated by this Agreement or any supplement or
amendment thereto, upon request, copies of reasonably complete drafts of all
such documents proposed to be filed (including exhibits and each document
incorporated by reference therein to the extent then required by the rules and
regulations of the Commission), and provide each such Selling Holder the
opportunity to object to any information pertaining to such Selling Holder and
its plan of distribution that is contained therein and make the corrections
reasonably requested by such Selling Holder with respect to such information
prior to filing the Shelf Registration Statement or such other registration
statement or supplement or amendment thereto, and (ii) such number of copies of
the Shelf Registration Statement or such other registration statement and the
prospectus included therein and any supplements and amendments thereto as such
Persons may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities covered by such Shelf Registration
Statement or other registration statement;

(c)           if applicable, use its commercially reasonable efforts to register
or qualify the Registrable Securities covered by the Shelf Registration
Statement or any other registration statement contemplated by this Agreement
under the securities or blue sky laws of such jurisdictions as the Selling
Holders or, in the case of an Underwritten Offering, the Managing Underwriter,
shall reasonably request; provided, however, that Copano will not be required to
qualify generally to transact business in any jurisdiction where it is not then
required to so qualify or to take any action which would subject it to general
service of process in any such jurisdiction where it is not then so subject;

(d)           promptly notify each Selling Holder and each underwriter, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of (i) the filing of the Shelf Registration Statement or any
other registration statement contemplated by this Agreement or any prospectus or
prospectus supplement to be used in connection therewith, or any amendment or
supplement thereto, and, with respect to such Shelf Registration Statement or
any other registration statement or any post-effective amendment thereto, when
the same has become effective; and (ii) any written comments from the Commission
with respect to any filing referred to in clause (i) and any written request by
the Commission for amendments or supplements to the Shelf Registration Statement
or any other registration statement or any prospectus or prospectus supplement
thereto;

(e)           immediately notify each Selling Holder and each underwriter, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, of (i) the happening of any event as a result of which the
prospectus or prospectus supplement contained

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in the Shelf Registration Statement or any other registration statement
contemplated by this Agreement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing; (ii) the issuance or threat of issuance by
the Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement or any other registration statement contemplated by this
Agreement, or the initiation of any proceedings for that purpose; or (iii) the
receipt by Copano of any notification with respect to the suspension of the
qualification of any Registrable Securities for sale under the applicable
securities or blue sky laws of any jurisdiction.  Following the provision of
such notice, Copano agrees to as promptly as practicable amend or supplement the
prospectus or prospectus supplement or take other appropriate action so that the
prospectus or prospectus supplement does not include 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 in the light of the
circumstances then existing and to take such other action as is necessary to
remove a stop order, suspension, threat thereof or proceedings related thereto;

(f)            upon request and subject to appropriate confidentiality
obligations, furnish to each Selling Holder copies of any and all transmittal
letters or other correspondence with the Commission or any other governmental
agency or self-regulatory body or other body having jurisdiction (including any
domestic or foreign securities exchange) relating to such offering of
Registrable Securities;

(g)           in the case of an Underwritten Offering, furnish upon request,
(i) an opinion of counsel for Copano, dated the effective date of the applicable
registration statement or the date of any amendment or supplement thereto, and a
letter of like kind dated the date of the closing under the underwriting
agreement, and (ii) a “cold comfort” letter, dated the effective date of the
applicable registration statement or the date of any amendment or supplement
thereto and a letter of like kind dated the date of the closing under the
underwriting agreement, in each case, signed by the independent public
accountants who have certified Copano’s financial statements included or
incorporated by reference into the applicable registration statement, and each
of the opinion and the “cold comfort” letter shall be in customary form and
covering substantially the same matters with respect to such registration
statement (and the prospectus and any prospectus supplement included therein) as
are customarily covered in opinions of issuer’s counsel and in accountants’
letters delivered to the underwriters in Underwritten Offerings of securities
and such other matters as such underwriters may reasonably request;

(h)           otherwise use its commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder;

(i)            make available to the appropriate representatives of the Managing
Underwriter and Selling Holders access to such information and Copano personnel
as is reasonable and customary to enable such parties to establish a due
diligence defense under the Securities Act; provided, however, that Copano need
not disclose any information to any such representative unless and until such
representative has entered into a confidentiality agreement with Copano;

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(j)            cause all such Registrable Securities registered pursuant to this
Agreement to be listed on each securities exchange or nationally recognized
quotation system on which similar securities issued by Copano are then listed;

(k)           use its commercially reasonable efforts to cause the Registrable
Securities to be registered with or approved by such other governmental agencies
or authorities as may be necessary by virtue of the business and operations of
Copano to enable the Selling Holders to consummate the disposition of such
Registrable Securities;

(l)            provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement; and

(m)          enter into customary agreements and take such other actions as are
reasonably requested by the Selling Holders or the underwriters, if any, in
order to expedite or facilitate the disposition of such Registrable Securities.

Each Selling Holder, upon receipt of notice from Copano of the happening of any
event of the kind described in subsection (e) of this Section 2.04, shall
forthwith discontinue disposition of the Registrable Securities until such
Selling Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by subsection (e) of this Section 2.04 or until it is advised in
writing by Copano that the use of the prospectus may be resumed, and has
received copies of any additional or supplemental filings incorporated by
reference in the prospectus, and, if so directed by Copano, such Selling Holder
will, or will request the managing underwriter or underwriters, if any, to
deliver to Copano (at Copano’s expense) all copies in their possession or
control, other than permanent file copies then in such Selling Holder’s
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.

Section 2.05          Cooperation by Holders.  Copano shall have no obligation
to include in the Shelf Registration Statement units of a Holder or in a
Underwritten Offering pursuant to Section 2.02 units of a Selling Holder who has
failed to timely furnish such information that, in the opinion of counsel to
Copano, is reasonably required in order for the registration statement or
prospectus supplement, as applicable, to comply with the Securities Act.

Section 2.06          Restrictions on Public Sale by Holders of Registrable
Securities.  Each Holder of Registrable Securities who is included in the Shelf
Registration Statement agrees not to effect any public sale or distribution of
the Registrable Securities during the 30 calendar day period following
completion of a public offering of equity securities by Copano; provided,
however, that the duration of the foregoing restrictions shall be no longer than
the duration of the shortest restriction generally imposed by the underwriters
on the officers or directors or any other unitholder of Copano on whom a
restriction is imposed and provided further that such Selling Holder owns more
than five million dollars ($5,000,000) of the Purchased Units.

Section 2.07          Expenses.

(a)           Certain Definitions.  “Registration Expenses” means all expenses
incident to Copano’s performance under or compliance with this Agreement to
effect the registration of Registrable Securities the Shelf Registration
Statement pursuant to Section 2.01, an Underwritten

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Offering pursuant to Section 2.02 or Section 2.03, and the disposition of such
securities, including, without limitation, all registration, filing, securities
exchange listing and The Nasdaq National Market fees, all registration, filing,
qualification and other fees and expenses of complying with securities or blue
sky laws, fees of the National Association of Securities Dealers, Inc., transfer
taxes and fees of transfer agents and registrars, all word processing,
duplicating and printing expenses, the fees and disbursements of counsel and
independent public accountants for Copano, including the expenses of any special
audits or “cold comfort” letters required by or incident to such performance and
compliance.  Except as otherwise provided in Section 2.08 hereof, Copano shall
not be responsible for legal fees incurred by Holders in connection with the
exercise of such Holders’ rights hereunder.  In addition, Copano shall not be
responsible for any “Selling Expenses,” which means all underwriting fees,
discounts and selling commissions allocable to the sale of the Registrable
Securities.

(b)           Expenses.  Copano will pay all reasonable Registration Expenses as
determined in good faith, including, in the case of an Underwritten Offering,
whether or not any sale is made pursuant to such Underwritten Offering. Each
Selling Holder shall pay all Selling Expenses in connection with any sale of its
Registrable Securities hereunder.

Section 2.08          Indemnification.

(a)           By Copano.  In the event of a registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, Copano will
indemnify and hold harmless each Selling Holder thereunder, its directors and
officers, and each underwriter, pursuant to the applicable underwriting
agreement with such underwriter, of Registrable Securities thereunder and each
Person, if any, who controls such Selling Holder or underwriter within the
meaning of the Securities Act and the Exchange Act, against any losses, claims,
damages, expenses or liabilities (including reasonable attorneys’ fees and
expenses) (collectively, “Losses”), joint or several, to which such Selling
Holder or underwriter or controlling Person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Losses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Shelf Registration Statement or any other
registration statement contemplated by this Agreement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, 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 (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, and will reimburse
each such Selling Holder, its directors and officers, each such underwriter and
each such controlling Person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such Loss or actions
or proceedings; provided, however, that Copano will not be liable in any such
case if and to the extent that any such Loss arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such Selling Holder, such
underwriter or such controlling Person in writing specifically for use in the
Shelf Registration Statement or such other registration statement, or prospectus
supplement, as applicable. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Selling Holder or
any such director, officer or controlling Person, and shall survive the transfer
of such securities by such Selling Holder.

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(b)           By Each Selling Holder.  Each Selling Holder agrees severally and
not jointly to indemnify and hold harmless Copano, its directors and officers,
and each Person, if any, who controls Copano within the meaning of the
Securities Act or of the Exchange Act to the same extent as the foregoing
indemnity from Copano to the Selling Holders, but only with respect to
information regarding such Selling Holder furnished in writing by or on behalf
of such Selling Holder expressly for inclusion in the Shelf Registration
Statement or prospectus supplement relating to the Registrable Securities, or
any amendment or supplement thereto; provided, however, that the liability of
each Selling Holder shall not be greater in amount than the dollar amount of the
proceeds (net of any Selling Expenses) received by such Selling Holder from the
sale of the Registrable Securities giving rise to such indemnification.

(c)           Notice.  Promptly after receipt by an indemnified party hereunder
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to any indemnified party other than under this Section 2.08.  In any action
brought against any indemnified party, it shall notify the indemnifying party of
the commencement thereof.  The indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party
and, after notice from the indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this Section 2.08 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, (i) if the
indemnifying party has failed to assume the defense and employ counsel or (ii)
if the defendants in any such action include both the indemnified party and the
indemnifying party and counsel to the indemnified party shall have concluded
that there may be reasonable defenses available to the indemnified party that
are different from or additional to those available to the indemnifying party,
or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, then the indemnified
party shall have the right to select a separate counsel and to assume such legal
defense and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other reasonable
expenses related to such participation to be reimbursed by the indemnifying
party as incurred.  Notwithstanding any other provision of this Agreement, no
indemnified party shall settle any action brought against it with respect to
which it is entitled to indemnification hereunder without the consent of the
indemnifying party, unless the settlement thereof imposes no liability or
obligation on, and includes a complete and unconditional release from all
liability of, the indemnifying party.

(d)           Contribution.  If the indemnification provided for in this
Section 2.08 is held by a court or government agency of competent jurisdiction
to be unavailable to any indemnified party or is insufficient to hold them
harmless in respect of any Losses, then each such indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Loss in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of such indemnified party on the other in connection with the
statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations; provided, however, that in no event shall

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such Selling Holder be required to contribute an aggregate amount in excess of
the dollar amount of proceeds (net of Selling Expenses) received by such Selling
Holder from the sale of Registrable Securities giving rise to such
indemnification.  The relative fault of the indemnifying party on the one hand
and the indemnified party on the other 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 has been made
by, or relates to, information supplied by such party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.  The parties hereto agree that it would not be just
and equitable if contributions pursuant to this paragraph were to be determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to herein.  The amount paid by
an indemnified party as a result of the Losses referred to in the first sentence
of this paragraph shall be deemed to include any legal and other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any Loss which is the subject of this paragraph. 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 is not
guilty of such fraudulent misrepresentation.

(e)           Other Indemnification.  The provisions of this Section 2.08 shall
be in addition to any other rights to indemnification or contribution which an
indemnified party may have pursuant to law, equity, contract or otherwise.

Section 2.09          Rule 144 Reporting.  With a view to making available the
benefits of certain rules and regulations of the Commission that may permit the
sale of the Registrable Securities to the public without registration, Copano
agrees to use its commercially reasonable efforts to:

(a)           Make and keep public information regarding Copano available, as
those terms are understood and defined in Rule 144 of the Securities Act, at all
times from and after the date hereof;

(b)           File with the Commission in a timely manner all reports and other
documents required of Copano under the Securities Act and the Exchange Act at
all times from and after the date hereof; and

(c)           So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request a copy of the most recent annual or quarterly
report of Copano, and such other reports and documents so filed as such Holder
may reasonably request in availing itself of any rule or regulation of the
Commission allowing such Holder to sell any such securities without
registration.

Section 2.10          Transfer or Assignment of Registration Rights.  The rights
to cause Copano to register Registrable Securities granted to the Purchasers by
Copano under this Article II may be transferred or assigned by any Purchaser to
one or more transferee(s) or assignee(s) of such Registrable Securities;
provided, however, that (a) unless such transferee is an Affiliate of such
Purchaser, each such transferee or assignee holds Registrable Securities
representing at least $5 million of the Purchased Units sold pursuant to the
terms of the Purchase Agreement, (b) Copano is given written notice prior to any
said transfer or assignment, stating

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the name and address of each such transferee and identifying the securities with
respect to which such registration rights are being transferred or assigned, and
(c) each such transferee assumes in writing responsibility for its portion of
the obligations of such Purchaser under this Agreement.

Section 2.11          Limitation on Subsequent Registration Rights.  From and
after the date hereof, Copano shall not, without the prior written consent of
the Holders of a majority of the outstanding Registrable Securities, enter into
any agreement with any current or future holder of any securities of Copano that
would allow such current or future holder to require Copano to include
securities in any registration statement filed by Copano on a basis that is
superior in any way to the piggyback rights granted to Purchaser hereunder.

Section 2.12          Lock-Up.  Notwithstanding anything to the contrary in this
Agreement, Purchaser agrees not to sell any of the Purchased Units prior to the
date that is 90 days after the Closing Date.

ARTICLE III
MISCELLANEOUS

Section 3.01          Communications.  All notices and other communications
provided for or permitted hereunder shall be made in writing by facsimile,
courier service or personal delivery:

(a)           if to Purchaser, to the address set forth under that Purchaser’s
signature block in accordance with the provisions of this Section 3.01,

(b)           if to a transferee of Purchaser, to such Holder at the address
provided pursuant to Section 2.10 above, and

(c)           if to Copano, at 2727 Allen Parkway, Suite 1200, Houston, Texas
77019, notice of which is given in accordance with the provisions of this
Section 3.01.

All such notices and communications shall be deemed to have been received at the
time delivered by hand, if personally delivered; when receipt acknowledged, if
sent via facsimile or sent via Internet electronic mail; and when actually
received, if sent by any other means.

Section 3.02          Successor and Assigns.  This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including subsequent Holders of Registrable Securities to the extent
permitted herein.

Section 3.03          Assignment of Rights.  All or any portion of the rights
and obligations of any Purchaser under this Agreement may be transferred or
assigned by such Purchaser in accordance with Section 2.10 hereof.

Section 3.04          Aggregation of Purchased Units.  All Purchased Units held
or acquired by Persons who are Affiliates of one another shall be aggregated
together for the purpose of determining the availability of any rights under
this Agreement.

Section 3.05          Recapitalization, Exchanges, Etc. Affecting the Common
Units.  The provisions of this Agreement shall apply to the full extent set
forth herein with respect to any and

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all units of Copano or any successor or assign of Copano (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for or in substitution of, the Registrable Securities, and shall be
appropriately adjusted for combinations, recapitalizations and the like
occurring after the date of this Agreement.

Section 3.06          Specific Performance.  Damages in the event of breach of
this Agreement by a party hereto may be difficult, if not impossible, to
ascertain, and it is therefore agreed that each such Person, in addition to and
without limiting any other remedy or right it may have, will have the right to
an injunction or other equitable relief in any court of competent jurisdiction,
enjoining any such breach, and enforcing specifically the terms and provisions
hereof, and each of the parties hereto hereby waives any and all defenses it may
have on the ground of lack of jurisdiction or competence of the court to grant
such an injunction or other equitable relief.  The existence of this right will
not preclude any such Person from pursuing any other rights and remedies at law
or in equity which such Person may have.

Section 3.07          Counterparts.  This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.

Section 3.08          Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

Section 3.09          Governing Law.  The laws of the State of Delaware shall
govern this Agreement without regard to principles of conflict of laws.

Section 3.10          Severability of Provisions.  Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting or impairing the validity or enforceability of such provision in any
other jurisdiction.

Section 3.11          Entire Agreement.  This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein.  There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the rights granted by Copano set forth herein.  This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

Section 3.12          Amendment.  This Agreement may be amended only by means of
a written amendment signed by Copano and the Holders of a majority of the then
outstanding Registrable Securities; provided, however, that no such amendment
shall materially and adversely affect the rights of any Holder hereunder without
the consent of such Holder.

Section 3.13          No Presumption.  If any claim is made by a party relating
to any conflict, omission, or ambiguity in this Agreement, no presumption or
burden of proof or persuasion shall

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be implied by virtue of the fact that this Agreement was prepared by or at the
request of a particular party or its counsel.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

COPANO ENERGY, L.L.C.

 

 

 

 

 

By:

 

 

 

Name:

John R. Eckel, Jr.

 

 

Title:

Chairman of the Board and Chief Executive Officer

 

 

 

 

 

KAYNE ANDERSON MLP
INVESTMENT COMPANY

 

 

 

 

 

By:

 

 

 

Name:

Kevin McCarthy

 

 

Title:

Chief Executive Officer and President

 

 

Address:

1800 Avenue of the Stars,

 

 

 

2nd Floor

 

 

 

Los Angeles, California 90067

 

 

Attention:

David Shladovsky, Esq.

 

 

Facsimile:

(310) 284-6490

 

 

 

 

 

RCH ENERGY MLP FUND LP

 

 

 

By:

RCH Energy MLP Fund GP, LP,
its general partner

 

 

 

 

By:

RR Advisors, LLC, its general partner

 

 

 

 

 

 

 

By:

 

 

 

Robert Raymond, its sole member

 

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RCH ENERGY MLP FUND-A LP

 

 

 

By:

RCH Energy MLP Fund GP, LP,
its general partner

 

 

 

 

By:

RR Advisors, LLC,
its general partner

 

 

 

 

 

 

 

By:

 

 

 

Robert Raymond, its sole member

 

 

 

 

 

TORTOISE ENERGY
INFRASTRUCTURE CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

David J. Schulte

 

 

Title:

President

 

 

 

 

 

TORTOISE ENERGY CAPITAL
CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

David J. Schulte

 

 

Title:

President

 

 

 

 

 

ENERGY INCOME AND GROWTH
FUND

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

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FIDUCIARY/CLAYMORE MLP
OPPORTUNITY FUND

 

 

 

 

 

By:

 

 

 

 

 

 

GOLDMAN, SACHS & CO.
On behalf of Principal Strategies Group

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

ALERIAN OPPORTUNITY PARTNERS
LP

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

ALERIAN CAPITAL PARTNERS LP

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

STROME MLP FUND, L.P.

 

 

 

By:

Strome Investment Management, L.P.,
its general partner

 

 

 

 

 

 

 

By:

 

 

 

Name:

Jeffrey Lambert

 

 

Title:

Chief Operating Officer

 

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STROME ALPHA, LP

 

 

 

By:

Strome Investment Management, L.P.,
its general partner

 

 

 

 

 

 

 

By:

 

 

 

Name:

Jeffrey Lambert

 

 

Title:

Chief Operating Officer

 

 

 

 

 

STROME FAMILY FOUNDATION

 

 

 

 

 

By:

 

 

 

Name:

Jeffrey Lambert

 

 

Title:

Treasurer and Secretary

 

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