**Exhibit 4.7**

 

***EXECUTION VERSION***

 

**COMMON UNIT PURCHASE AGREEMENT**

 

**BY AND AMONG**

 

**COPANO ENERGY, L.L.C.**

 

**AND**

 

**ZLP FUND, L.P.**

 

**STRUCTURED FINANCE AMERICAS, LLC**

 

**AND**

 

**ROYAL BANK OF CANADA**

 

 

**Dated As of December 29, 2005**

 

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**COMMON****UNIT****PURCHASE****AGREEMENT**

 

COMMON UNITPURCHASE AGREEMENT, dated as of December 29, 2005 (this “Agreement”), byand among COPANO ENERGY, L.L.C., a Delaware limited liability company (“Copano”),and ZLP Fund, L.P., Structured Finance Americas, LLC and Royal Bank of Canada(each referred to herein as a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS,Copano desires to sell an aggregate of 1,418,440 of Common Units and thePurchasers desire to purchase an aggregate of 1,418,440 of Common Units fromCopano in accordance with the provisions of this Agreement; and

 

WHEREAS,Copano has agreed to provide the Purchasers with certain registration rightswith respect to the Purchased Common Units acquired pursuant to this Agreement.

 

NOW THEREFORE,in consideration of the mutual covenants and agreements set forth herein andfor good and valuable consideration, the receipt and sufficiency of which ishereby acknowledged, Copano and each Purchaser, severally and not jointly,hereby agree as follows:

 

**ARTICLE IDEFINITIONS**

 

Section 1.01           Definitions.  As used in this Agreement, and unless thecontext requires a different meaning, the following terms have the meaningsindicated:

 

“Action”against a Person means any lawsuit, action, proceeding, investigation orcomplaint before any Governmental Authority, mediator or arbitrator.

 

“Affiliate”means, with respect to a specified Person, any other Person, whether now inexistence or hereafter created, directly or indirectly controlling, controlledby or under direct or indirect common control with such specified Person.  For purposes of this definition, “control”(including, with correlative meanings, “controlling,” “controlled by,” and “undercommon control with”) means the power to direct or cause the direction of themanagement and policies of such Person, directly or indirectly, whether throughthe ownership of voting securities, by contract or otherwise.

 

“Agreement”has the meaning set forth in the introductory paragraph.

 

“BasicDocuments” means, collectively, this Agreement, the Registration RightsAgreement and any and all other agreements or instruments executed anddelivered by the Parties on even date herewith, or any amendments, supplements,continuations or modifications thereto.

 

“BusinessDay” means any day other than a Saturday, Sunday, or a legal holiday forcommercial banks in Houston, Texas.

 

“Closing”shall have the meaning specified in Section 2.02.

 

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“ClosingDate” shall have the meaning specified in Section 2.02.

 

“Commission”means the United States Securities and Exchange Commission.

 

“CommonUnit Purchase Price” means $35.25 per Purchased Common Unit.

 

“CommonUnits” means the Common Units of Copano representing limited liabilitycompany interests.

 

“Copano”has the meaning set forth in the introductory paragraph.

 

“CopanoMaterial Adverse Effect” means any material and adverse effect on (i) theassets, liabilities, financial condition, business, operations, or affairs ofCopano and its Subsidiaries, taken as a whole, measured against those assets,liabilities, financial condition, business, operations, or affairs reflected inthe Copano SEC Documents, (ii) the ability of Copano and its Subsidiaries,taken as a whole, to carry out their business as of the date of this Agreementor to meet their obligations under the Basic Documents on a timely basis, or(iii) the ability of Copano to consummate the transactions under any BasicDocument.  Notwithstanding the foregoing,a “Copano Material Adverse Effect” shall not include any effect resulting orarising from: (a) any change in general economic conditions in the industriesor markets in which Copano or its Subsidiaries operate;  (b) seasonal reductions in revenues and/orearnings of Copano and its Subsidiaries in the ordinary course of their respectivebusinesses; (c) national or international political, diplomatic or militaryconditions, including any engagement in hostilities, whether or not pursuant toa declaration of war, or the occurrence of any military or terrorist attack; or(d) changes in GAAP or other accounting principles.

 

“CopanoRelated Parties” shall have the meaning specified in Section 6.02.

 

“Copano SECDocuments” shall have the meaning specified in Section 3.03.

 

“Copano SECReports” means Copano’s Annual Report on Form 10-K for the year endedDecember 31, 2004 and Copano’s Quarterly Reports on Form 10-Q for the quarterlyperiods ended March 31, 2005, June 30, 2005 and September 30, 2005.

 

“DelawareLLC Act” shall have the meaning specified in Section 3.02(a).

 

“ExchangeAct” means the Securities Exchange Act of 1934, as amended from time totime, and the rules and regulations of the Commission promulgated thereunder.

 

“GAAP”means generally accepted accounting principles in the United States of Americain effect from time to time.

 

“GovernmentalAuthority” shall include the country, state, county, city and politicalsubdivisions in which any Person or such Person’s Property is located or whichexercises valid jurisdiction over any such Person or such Person’s Property,and any court, agency, department, commission, board, bureau or instrumentalityof any of them and any monetary authorities that exercise valid jurisdictionover any such Person or such Person’s Property. Unless otherwise specified, allreferences to Governmental Authority herein shall mean a Governmental Authority

 

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having jurisdiction over, whereapplicable, Copano, its Subsidiaries or any of their Property or any of thePurchasers.

 

“IndemnifiedParty” shall have the meaning specified in Section 6.03.

 

“IndemnifyingParty” shall have the meaning specified in Section 6.03.

 

“Law”means any federal, state, local or foreign order, writ, injunction, judgment,settlement, award, decree, statute, law, rule or regulation.

 

“Lien”means any interest in Property securing an obligation owed to, or a claim by, aPerson other than the owner of the Property, whether such interest is based onthe common law, statute or contract, and whether such obligation or claim isfixed or contingent, and including but not limited to the lien or securityinterest arising from a mortgage, encumbrance, pledge, security agreement,conditional sale or trust receipt or a lease, consignment or bailment forsecurity purposes.  For the purpose ofthis Agreement, a Person shall be deemed to be the owner of any Property thatit has acquired or holds subject to a conditional sale agreement, or leasesunder a financing lease or other arrangement pursuant to which title to theProperty has been retained by or vested in some other Person in a transactionintended to create a financing.

 

“LimitedLiability Company Agreement” shall have the meaning specified inSection 2.01.

 

“Lock-UpDate” means 90 days from the Closing Date.

 

“LTIP”shall have the meaning specified in Section 3.02(b).

 

“Parties”means Copano and the Purchasers party to this Agreement, collectively.

 

“Person”means any individual, corporation, company, voluntary association, partnership,joint venture, trust, limited liability company, unincorporated organization orgovernment or any agency, instrumentality or political subdivision thereof, orany other form of entity.

 

“Property”means any interest in any kind of property or asset, whether real, personal ormixed, or tangible or intangible.

 

“PurchasedCommon Units” means the Common Units to be issued and sold to thePurchasers pursuant to this Agreement.

 

“Purchaser”and “Purchasers” each has the meaning set forth in the introductoryparagraph.

 

“PurchaserMaterial Adverse Effect” means any material and adverse effect on (i) theability of a Purchaser to meet its obligations under the Basic Documents on atimely basis or (ii) the ability of a Purchaser to consummate thetransactions under any Basic Document.

 

“PurchaserRelated Parties” shall have the meaning specified in Section 6.01.

 

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“RegistrationRights Agreement” means the Registration Rights Agreement, in the formattached to this Agreement as Exhibit B, to be entered into at theClosing, between Copano and the Purchasers.

 

“Representatives”of any Person means the affiliates, control persons, officers, directors,employees, agents and other representatives of such Person.

 

“SecuritiesAct” means the Securities Act of 1933, as amended from time to time, andthe rules and regulations of the Commission promulgated thereunder.

 

“Subsidiary”means, as to any Person, any corporation or other entity of which at least amajority of the outstanding equity interest having by the terms thereofordinary voting power to elect a majority of the board of directors of suchcorporation or other entity (irrespective of whether or not at the time anyequity interest of any other class or classes of such corporation or otherentity shall have or might have voting power by reason of the happening of anycontingency) is at the time directly or indirectly owned or controlled by suchPerson or one or more of its Subsidiaries.

 

Section 1.02           Accounting Procedures andInterpretation.  Unless otherwisespecified in this Agreement, all accounting terms used herein shall beinterpreted, all determinations with respect to accounting matters under thisAgreement shall be made, and all financial statements and certificates andreports as to financial matters required to be furnished to the Purchasersunder this Agreement shall be prepared, in accordance with GAAP applied on aconsistent basis during the periods involved (except, in the case of unauditedstatements, as permitted by Form 10-Q promulgated by the Commission) andin compliance as to form in all material respects with applicable accountingrequirements and with the published rules and regulations of the Commissionwith respect thereto.

 

**ARTICLE IISALE AND PURCHASE**

 

Section 2.01           Sale and Purchase of Common Units.  Subject to the terms and conditions of this Agreement,at the Closing (as defined in Section 2.02 below) Copano hereby agrees to sellto each Purchaser, and each Purchaser hereby agrees, severally and not jointly,to purchase from Copano, the number of Common Units set forth opposite suchPurchaser’s name on Schedule 2.01, and each Purchaser agrees to pay Copano theCommon Unit Purchase Price for each such Purchased Common Unit; *provided*, *however*,that, if the number of Purchased Common Units to be purchased by StructuredFinance Americas, LLC, at Closing would represent more than 9.3% of the issuedand outstanding number of Common Units as of immediately after the Closingthen, and only upon Structured Finance Americas, LLC’s request, the number ofCommon Units to be purchased by Structured Finance Americas, LLC and itsrespective aggregate Common Unit Purchase Price in respect thereof, shall bereduced pro rata (based on the number of Common Units Structured FinanceAmericas, LLC would otherwise be required to purchase) by the minimum amountnecessary such that Structured Finance Americas, LLC’s Purchased Common Unitswould not represent more than 9.3% of the issued and outstanding number ofCommon Units as of immediately after the Closing.  The Purchased Common Units shall have thoserights, preferences, privileges and restrictions governing the

 

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Common Units as set forth inthe Second Amended and Restated Limited Liability Company Agreement of Copano,dated as of November 15, 2004, as amended (the “Limited Liability CompanyAgreement”).  A true and correct copyof the Limited Liability Company Agreement together with Amendment No. 1 andAmendment No. 2 thereto have been filed by Copano with the Commission asExhibits 3.3, 3.4 and 3.5 to Copano’s registration statement on Form S-3 (FileNo. 333-130315) filed on December 14, 2005.

 

Section 2.02           Closing.  The execution and delivery of the BasicDocuments and execution and delivery of all other instruments, agreements, andother documents required by this Agreement (the “Closing”) shall takeplace on December 29, 2005 (the “Closing Date”.  Delivery of certificates representing thePurchased Common Units and payment by each Purchaser of the Common UnitPurchase Price therefor shall take place on (i) December 30, 2005 with respectto the Common Units to be purchased by Royal Bank of Canada and StructuredFinance Americas, LLC and (ii) January 3, 2006 with respect to the Common Unitsto be purchased by ZLP Fund, L.P., in each case at the offices of Vinson &Elkins L.L.P., 1001 Fannin Street, Suite 2300, Houston, Texas 77002.  Each of the closing deliveries required bySection 2.03 and Section 2.04 below other than the delivery of certificatesrepresenting the Purchased Common Units and the payment by each Purchaser ofthe Common Unit Purchase Price therefor shall be deemed satisfied by deliveryof such items on December 29, 2005.

 

Section 2.03           Copano Closing Deliveries. Atthe Closing, subject to the terms and conditions of this Agreement, Copano willdeliver, or cause to be delivered, to each Purchaser:

 

(a)           The Purchased CommonUnits by delivering certificates (bearing the legend set forth in Section 4.08)evidencing such Purchased Common Units at the Closing, all free and clear ofany Liens, encumbrances or interests of any other party;

 

(b)           An opinion addressedto the Purchasers from legal counsel to Copano, dated the Closing Date, in theform similar in substance to the form of opinion attached to this Agreement as Exhibit A;and

 

(c)           The RegistrationRights Agreement in the form attached to this Agreement as Exhibit B,which shall have been executed by Copano.

 

Section 2.04           Purchaser Closing Deliveries.  At the Closing, subject to the terms andconditions of this Agreement, each Purchaser will deliver, or cause to bedelivered, to Copano:

 

(a)           Payment to Copano ofthe aggregate Common Unit Purchase Price for each Purchased Common Unitpurchased by such Purchaser by wire transfer(s) of immediately available fundsto an account designated by Copano; and

 

(b)           The RegistrationRights Agreement in substantially the form attached to this Agreement as ExhibitB, which shall have been duly executed by such Purchaser.

 

Section 2.05           Independent Nature of Purchasers’Obligations and Rights.

 

Theobligations of each Purchaser under any Basic Document are several and notjoint with the obligations of any other Purchaser, and no Purchaser shall beresponsible in any way for

 

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the performance of theobligations of any other Purchaser under any Basic Document.  The failure or waiver of performance underany Basic Document by any Purchaser does not excuse performance by any otherPurchaser.  Nothing contained herein orin any other Basic Document, and no action taken by any Purchaser pursuantthereto, shall be deemed to constitute the Purchasers as a partnership, anassociation, a joint venture or any other kind of entity, or create apresumption that the Purchasers are in any way acting in concert or as a groupwith respect to such obligations or the transactions contemplated by the BasicDocument.  Each Purchaser shall beentitled to independently protect and enforce its rights, including withoutlimitation, the rights arising out of this Agreement or out of the other BasicDocuments, and it shall not be necessary for any other Purchaser to be joinedas an additional party in any proceeding for such purpose.

 

**ARTICLE IIIREPRESENTATIONS AND WARRANTIES OF COPANO**

 

Copanorepresents and warrants to the Purchasers as follows:

 

Section 3.01           Corporate Existence.  Copano: (i) is a limited liabilitycompany duly organized, legally existing and in good standing under the laws ofthe State of Delaware; (ii) has all requisite limited liability companypower, and has all material governmental licenses, authorizations, consents andapprovals, necessary to own its assets and carry on its business as itsbusiness is now being conducted as described in the Copano SEC Reports, exceptwhere the failure to obtain such licenses, authorizations, consents andapprovals would not reasonably be expected to have a Copano Material AdverseEffect; and (iii) is qualified to do business in all jurisdictions inwhich the nature of the business conducted by it makes such qualificationsnecessary, except where failure so to qualify would not reasonably be expectedto have a Copano Material Adverse Effect.

 

Section 3.02           Capitalization and Valid Issuanceof Purchased Common Units.

 

(a)           As of the date ofthis Agreement, the issued and outstanding membership interests of Copanoconsist of 13,391,288 Common Units and 3,519,126 Subordinated Units.  All of the outstanding Common Units andSubordinated Units have been duly authorized and validly issued in accordancewith applicable Law and the Limited Liability Company Agreement and are fullypaid (to the extent required under the Limited Liability Company Agreement) andnonassessable (except as such nonassessability may be affected by Section18-607 of the Delaware Limited Liability Company Act (the “Delaware LLC Act”).

 

(b)           Other than Copano’sLong-Term Incentive Plan (the “LTIP”), Copano has no equity compensationplans that contemplate the issuance of Common Units (or securities convertibleinto or exchangeable for Common Units). No indebtedness having the right to vote (or convertible into orexchangeable for securities having the right to vote) on any matters on whichCopano’s unitholders may vote is issued or outstanding.  Except as set forth in the first sentence ofthis Section 3.02(b), as contemplated by this Agreement, or as arecontained in the Limited Liability Company Agreement, there are no outstandingor authorized (i) options, warrants, preemptive rights, subscriptions, calls,or other rights, convertible securities, agreements, claims or commitments ofany

 

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characterobligating Copano or any of its Subsidiaries to issue, transfer or sell anylimited liability company interests or other equity interest in, Copano or anyof its Subsidiaries or securities convertible into or exchangeable for suchlimited liability company interests or equity interests, (ii) obligations ofCopano or any of its Subsidiaries to repurchase, redeem or otherwise acquireany limited liability company interests or equity interests of Copano or any ofits Subsidiaries or any such securities or agreements listed in clause (i) ofthis sentence or (iii) voting trusts or similar agreements to which Copano orany of its Subsidiaries is a party with respect to the voting of the equityinterests of Copano or any of its Subsidiaries.

 

(c)           (i) All of theissued and outstanding equity interests of each of Copano’s Subsidiaries (otherthan Webb/Duval Gatherers and Southern Dome, LLC) are owned, directly orindirectly, by Copano free and clear of any Liens (except for such restrictionsas may exist under applicable Law and except for such Liens as may be imposedunder Copano’s or Copano’s Subsidiaries’ credit facilities filed as exhibits tothe Copano SEC Documents), and all such ownership interests have been dulyauthorized, validly issued and are fully paid (to the extent required in theorganizational documents of Copano’s Subsidiaries, as applicable) andnon-assessable (except as nonassessability may be affected by Section 6.07 ofthe Texas Revised Uniform Limited Partnership Act, Section 18-607 of theDelaware Limited Liability Company Act, Section 17-607 of the Delaware RevisedUniform Limited Partnership Act or the organizational documents of Copano’sSubsidiaries, as applicable) and free of preemptive rights, with no personalliability attaching to the ownership thereof, and (ii) except as disclosed inthe Copano SEC Documents and pursuant to the Amended and Restated OperatingAgreement of Southern Dome, LLC dated August 1, 2005, neither Copano nor any ofits Subsidiaries own any shares of capital stock or other securities of, orinterest in, any other Person, or are obligated to make any capitalcontribution to or other investment in any other Person.

 

(d)           The Purchased CommonUnits and the membership interests represented thereby, have been dulyauthorized by Copano pursuant to the Limited Liability Company Agreement and,when issued and delivered to the Purchasers against payment therefor inaccordance with the terms of this Agreement, will be validly issued, fully paid(to the extent required by applicable Law and the Limited Liability CompanyAgreement) and nonassessable (except as such nonassessability may be affectedby Section 18-607 of the Delaware LLC Act) with no personal liability attachingto the ownership thereof, and will be free of any and all Liens andrestrictions on transfer, other than restrictions on transfer under the LimitedLiability Company Agreement and under applicable state and federal securitieslaws and other than such Liens as are created by the Purchasers.

 

(e)           Copano’s currentlyoutstanding Common Units are quoted on The Nasdaq National Market.  The Purchased Common Units will be issued incompliance with all applicable rules of The Nasdaq National Market.  Copano has filed a supplemental listingapplication with The Nasdaq National Market to list the Purchased Common Units.

 

Section 3.03           Copano SEC Documents.  Copano has timely filed with the Commissionall forms, registration statements, reports, schedules and statements requiredto be filed by it under the Exchange Act or the Securities Act (all suchdocuments filed on or prior to the date of

 

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this Agreement, collectively,the “Copano SEC Documents”).  TheCopano SEC Documents, including, without limitation, any audited or unauditedfinancial statements and any notes thereto or schedules included therein, atthe time filed (in the case of registration statements, solely on the dates ofeffectiveness) (except to the extent corrected by a subsequently filed CopanoSEC Document filed prior to the date of this Agreement) (i) did notcontain any untrue statement of a material fact or omit to state a materialfact required to be stated therein or necessary in order to make the statementstherein, in light of the circumstances under which they were made, notmisleading, (ii) complied in all material respects with the applicablerequirements of the Exchange Act and the Securities Act, as the case may be,(iii) complied as to form in all material respects with applicableaccounting requirements and with the published rules and regulations of theCommission with respect thereto, (iv) were prepared in accordance withGAAP applied on a consistent basis during the periods involved (except as maybe indicated in the notes thereto or, in the case of unaudited statements, aspermitted by Form 10-Q of the Commission), and (v) fairly present(subject in the case of unaudited statements to normal, recurring and year-endaudit adjustments) in all material respects the consolidated financial positionand status of the business of Copano as of the dates thereof and theconsolidated results of its operations and cash flows for the periods thenended.  Deloitte & Touche LLP is anindependent registered public accounting firm with respect to Copano and hasnot resigned or been dismissed as independent registered public accountants ofCopano as a result of or in connection with any disagreement with Copano on anymatter of accounting principles or practices, financial statement disclosure orauditing scope or procedures.

 

Section 3.04           No Material Adverse Change.  Except as set forth in or contemplated by theCopano SEC Documents, since December 31, 2004, Copano and its Subsidiaries haveconducted their business in the ordinary course, consistent with past practice,and there has been no (i) change that has had or would reasonably beexpected to have a Copano Material Adverse Effect, other than those occurringas a result of general economic or financial conditions or other developmentsthat are not unique to Copano and its Subsidiaries but also affect otherPersons who participate or are engaged in the lines of business of which Copanoand its Subsidiaries participate or are engaged, (ii) acquisition or dispositionof any material asset by Copano or any of its Subsidiaries or any contract orarrangement therefor, otherwise than for fair value in the ordinary course ofbusiness, (iii) material change in Copano’s accounting principles,practices or methods, or (iv) incurrence of material indebtedness.

 

Section 3.05           Litigation.  Except as set forth in the Copano SECDocuments, there is no Action pending or, to the knowledge of Copano,contemplated or threatened against Copano or any of its Subsidiaries or any oftheir respective officers, directors, properties or assets, which (individuallyor in the aggregate) reasonably would be expected to have a Copano MaterialAdverse Effect or which challenges the validity of this Agreement or whichwould reasonably be expected to adversely affect or restrict Copano’s abilityto consummate the transactions contemplated by the Basic Documents.

 

Section 3.06           No Breach.  The execution, delivery and performance byCopano of the Basic Documents to which it is a party, and all other agreementsand instruments to be executed and delivered by Copano pursuant thereto or inconnection with the transactions contemplated by the Basic Documents, andcompliance by Copano with the terms and provisions under such agreements, donot and will not (a) violate any provision of any law, statute, rule orregulation,

 

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order, writ, judgment,injunction, decree, governmental permit, determination or award havingapplicability to Copano or any of its Subsidiaries or any of their respectiveproperties or assets, (b) conflict with or result in a violation of anyprovision of the Certificate of Formation or the Limited Liability CompanyAgreement, or any organizational documents of any of Copano’s Subsidiaries,(c) require any consent, approval or notice under or result in a violationor breach of or constitute (with or without due notice or lapse of time orboth) a default (or give rise to any right of termination, cancellation oracceleration) under (i) any note, bond, mortgage, license, or loan orcredit agreement to which Copano or any of its Subsidiaries is a party or bywhich Copano or any of its Subsidiaries or any of their respective propertiesmay be bound or (ii) any other agreement, instrument or obligation, or(d) result in or require the creation or imposition of any Lien upon orwith respect to any of the properties now owned or hereafter acquired by Copanoor any of its Subsidiaries; with the exception of the conflicts stated inclause (b) of this Section 3.06, except where such conflict,violation, default, breach, termination, cancellation, failure to receiveconsent or approval, or acceleration with respect to the foregoing provisionsof this Section 3.06 would not, individually or in the aggregate,reasonably be expected to have a Copano Material Adverse Effect.

 

Section 3.07           Authority.  Copano has all necessary limited liabilitycompany power and authority to execute, deliver and perform its obligationsunder the Basic Documents to which it is a party, and to consummate thetransactions contemplated thereby; the execution, delivery and performance byCopano of the Basic Documents to which it is a party, and the consummation ofthe transactions contemplated thereby, have been duly authorized by allnecessary action on its part; and the Basic Documents constitute the legal,valid and binding obligations of Copano, enforceable in accordance with theirterms, except as such enforceability may be limited by bankruptcy, insolvency,fraudulent transfer and similar laws affecting creditors’ rights generally orby general principles of equity.  Noapproval from the holders of the Common Units or Subordinated Units is requiredas a result of Copano’s issuance and sale of the Purchased Common Units.

 

Section 3.08           Approvals.  Except for the approvals required by theCommission in connection with Copano’s obligations under the RegistrationRights Agreement and the registration statement, no authorization, consent,approval, waiver, license, qualification or written exemption from, nor anyfiling, declaration, qualification or registration with, any GovernmentalAuthority or any other Person is required in connection with the execution,delivery or performance by Copano of any of the Basic Documents to which it isa party, except where the failure to receive such authorization, consent,approval, waiver, license, qualification or written exemption from, or to makesuch filing, declaration, qualification or registration would not, individuallyor in the aggregate, reasonably be expected to have a Copano Material AdverseEffect.

 

Section 3.09           MLP Status.  Copano has, for each taxable year beginningafter December 31, 2003, during which Copano was in existence, met thegross income requirements of Section 7704(c)(2) of the Internal Revenue Code of1986, as amended.

 

Section 3.10           Investment Company Status.  Copano is not an “investment company” withinthe meaning of the Investment Company Act of 1940, as amended.

 

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Section 3.11           Offering.  Assuming the accuracy of the representationsand warranties of the Purchasers contained in this Agreement, the sale andissuance of the Purchased Common Units pursuant to this Agreement is exemptfrom the registration requirements of the Securities Act, and neither Copanonor any authorized agent acting on its behalf has taken or will take any actionhereafter that would cause the loss of such exemption.

 

Section 3.12           Certain Fees.  Other than fees payable to Banc of AmericaSecurities LLC for its services as placement agent, no fees or commissions willbe payable by Copano to brokers, finders, or investment bankers with respect tothe sale of any of the Purchased Common Units or the consummation of thetransaction contemplated by this Agreement. The Purchasers shall not be liable for any such fees orcommissions.  Copano agrees that it willindemnify and hold harmless each of the Purchasers from and against any and allclaims, demands, or liabilities for broker’s, finder’s, placement, or othersimilar fees or commissions incurred by Copano or alleged to have been incurredby Copano in connection with the sale of Purchased Common Units or theconsummation of the transactions contemplated by this Agreement.

 

Section 3.13           No Side Agreements.  There are no other agreements by, among orbetween Copano or its Affiliates, on the one hand, and any of the Purchasers ortheir Affiliates, on the other hand, with respect to the transactionscontemplated hereby nor promises or inducements for future transactions betweenor among any of such parties.

 

Section 3.14           Hedging Arrangements.  Copano has entered into the hedgingarrangements reflected on Schedule 3.14 of this Agreement.

 

**ARTICLE IVREPRESENTATIONS AND WARRANTIES OF EACH PURCHASER**

 

Each Purchaser,severally and not jointly, represents and warrants to Copano with respect toitself as follows:

 

Section 4.01           Corporate Existence.  Such Purchaser (i) is duly organized,validly existing and in good standing under the laws of its respectivejurisdiction of organization and (ii) has all requisite power, and has allmaterial governmental licenses, authorizations, consents and approvalsnecessary to own its assets and carry on its business as its business is nowbeing conducted, except where the failure to obtain such licenses,authorizations, consents and approvals would not have or would not reasonablybe expected to have a Purchaser Material Adverse Effect.

 

Section 4.02           No Conflicts.  The execution, delivery and performance bysuch Purchaser of this Agreement, the Basic Documents and all other agreementsand instruments to be executed and delivered by such Purchaser pursuant heretoor thereto or in connection herewith or therewith, compliance by such Purchaserwith the terms and provisions hereof and thereof, and the purchase of thePurchased Common Units by such Purchaser do not and will not (a) violateany provision of any law, statute, rule or regulation, order, writ, judgment,injunction, decree, governmental permit, determination or award having applicabilityto such Purchaser or any of its properties or assets, (b) conflict with orresult in a violation of any provision of the

 

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organizational documents ofsuch Purchaser, or (c) require any consent (other than standard internalconsents), approval or notice under or result in a violation or breach of orconstitute (with or without due notice or lapse of time or both) a default (orgive rise to any right of termination, cancellation or acceleration) under(i) any note, bond, mortgage, license, or loan or credit agreement towhich such Purchaser is a party or by which such Purchaser or any of itsproperties may be bound or (ii) any other such agreement, instrument orobligation; with the exception of the conflicts stated inclause (b) of this Section 4.02, except where such conflict,violation, default, breach, termination, cancellation, failure to receiveconsent or approval, or acceleration with respect to the foregoing provisionsof this Section 4.02 would not, individually or in the aggregate,reasonably be likely to have a Purchaser Material Adverse Effect.

 

Section 4.03           Investment.  The Purchased Common Units are being acquiredfor its own account, not as a nominee or agent, and with no present intentionof distributing the Purchased Common Units or any part thereof, and that suchPurchaser has no present intention of selling or granting any participation inor otherwise distributing the same in any transaction in violation of thesecurities laws of the United States of America or any State, withoutprejudice, however, to such Purchaser’s right at all times to sell or otherwisedispose of all or any part of the Purchased Common Units under a registrationstatement under the Securities Act and applicable state securities laws orunder an exemption from such registration available thereunder (including,without limitation, if available, Rule 144 promulgated thereunder). Ifsuch Purchaser should in the future decide to dispose of any of the PurchasedCommon Units, such Purchaser understands and agrees (a) that it may do soonly (i) in compliance with the Securities Act and applicable statesecurities law, as then in effect, or (ii) in the manner contemplated byany registration statement pursuant to which such securities are being offered,and (b) that stop-transfer instructions to that effect will be in effectwith respect to such securities. Notwithstanding the foregoing, a Purchaser may enter into a total returnswap with respect to such Purchaser’s Purchased Common Units with a third partyprovided that such transaction is exempt from registration under the SecuritiesAct.

 

Section 4.04           Nature of Purchaser.  Such Purchaser represents and warrants to,and covenants and agrees with, Copano that, (a) it is an “accreditedinvestor” within the meaning of Rule 501 of Regulation D promulgatedby the Commission pursuant to the Securities Act and (b) by reason of itsbusiness and financial experience it has such knowledge, sophistication andexperience in business and financial matters so as to be capable of evaluatingthe merits and risks of the prospective investment in the Purchased CommonUnits, is able to bear the economic risk of such investment and, at the presenttime, would be able to afford a complete loss of such investment.

 

Section 4.05           Receipt of Information;Authorization.  Such Purchaseracknowledges that it has (a) had access to the Copano SEC Documents and (b) hasbeen provided a reasonable opportunity to ask questions of and receive answersfrom Representatives of Copano regarding the matters disclosed therein.

 

Section 4.06           Restricted Securities.  Such Purchaser understands that the PurchasedCommon Units it is purchasing are characterized as “restricted securities”under the federal securities laws inasmuch as they are being acquired fromCopano in a transaction not involving a public offering and that under suchlaws and applicable regulations such securities may be resold

 

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without registration under theSecurities Act only in certain limited circumstances. In this connection,Purchaser represents that it is knowledgeable with respect to Rule 144 ofthe Commission promulgated under the Securities Act.

 

Section 4.07           Certain Fees.  No fees or commissions will be payable bysuch Purchaser to brokers, finders, or investment bankers with respect to thesale of any of the Purchased Common Units or the consummation of thetransaction contemplated by this Agreement. Such Purchaser agrees that it will indemnify and hold harmless Copanofrom and against any and all claims, demands, or liabilities for broker’s,finder’s, placement, or other similar fees or commissions incurred by suchPurchaser or alleged to have been incurred by such Purchaser in connection withthe sale of Purchased Common Units or the consummation of the transactionscontemplated by this Agreement.

 

Section 4.08           Legend.  It is understood that the certificatesevidencing the Purchased Common Units will bear the following legend:  “These securities have not been registeredunder the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in theabsence of a registration statement in effect with respect to the securitiesunder such Act or documentation reasonably satisfactory to the Company thatsuch registration is not required or unless sold pursuant to Rule 144 of suchAct.”

 

**ARTICLE VCOVENANTS**

 

Section 5.01           Purchaser Lock-Up.  Each Purchaser agrees that from and after theClosing it will not sell any of the Purchased Common Units prior to the Lock-UpDate; *provided, however*, that anyPurchaser may enter into a total return swap or similar transaction withrespect to the Purchased Common Units purchased by such Purchaser.

 

Section 5.02           Taking of Necessary Action.  Each of the parties hereto shall use itscommercially reasonable efforts promptly to take or cause to be taken allaction and promptly to do or cause to be done all things necessary, proper oradvisable under applicable Law and regulations to consummate and make effectivethe transactions contemplated by this Agreement.  Without limiting the foregoing, Copano andeach Purchaser will, and Copano shall cause each of its Subsidiaries to, useits commercially reasonable efforts to make all filings and obtain all consentsof Governmental Authorities which may be necessary or, in the reasonableopinion of the Purchasers or Copano, as the case may be, advisable for theconsummation of the transactions contemplated by this Agreement and the Basic Documents.

 

Section 5.03           Non-Disclosure; Interim PublicFilings.  Copano shall not disclosethe name or identity of any of the Purchasers as a Purchaser without the priorwritten consent of such Purchaser, except in connection with Copano’s filing ofa Form 8-K under the Exchange Act, as a result of this Agreement or the otherBasic Documents or the transactions contemplated hereby and thereby, or othersimilarly required Exchange Act reports, or as required by applicable Law orthe rules or regulations of The Nasdaq National Market or other exchange onwhich securities of Copano are listed or traded;*provided, however*, that, in the event that any suchrequired disclosure contains specific information about a Purchaser other thanits identity and ownership interest and the type of Copano’s securities ownedby it, Copano shall, prior to making such

 

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disclosure, provide suchPurchaser with a draft of such disclosure and permit such Purchaser reasonableopportunity (in light of the circumstances) to review and comment on suchdisclosure and consider in good faith (but not be required to accept) anycomments proposed by such Purchaser.

 

Section 5.04           Use of Proceeds.  Copano will use all of the proceeds from thesale of the Purchased Common Units to repay outstanding indebtedness and forgeneral limited liability company purposes, including organic growth projectsand commodity derivatives programs.

 

**ARTICLE VIINDEMNIFICATION, COSTS AND EXPENSES**

 

Section 6.01           Indemnification by Copano.  Copano agrees to indemnify each Purchaser andits affiliates, control persons, officers, directors, employees, advisors, andagents (collectively, “Purchaser Related Parties”) from, and hold eachof them harmless against any and all actions, suits, proceedings (including anyinvestigations, litigation or inquiries), demands, causes of action, costs,losses, liabilities, diminution in value, damages, or expenses of any kind ornature whatsoever, including, without limitation, the reasonable fees anddisbursements of counsel and all other reasonable expenses incurred inconnection with investigating, defending or preparing to defend any such matterthat may be incurred by them or asserted against or involve any of them as aresult of, arising out of, or in any way related to (i) any actual or proposeduse by Copano of the proceeds of any sale of the Purchased Common Units or (ii)the breach of any of the representations, warranties or covenants of Copanocontained herein, *provided* suchclaim for indemnification relating to a breach of a representation or warrantyis made prior to the expiration of such representation or warranty.

 

Section 6.02           Indemnification by Purchasers.  Each Purchaser agrees, severally and notjointly, to indemnify Copano and its Representatives (collectively, “CopanoRelated Parties”) from, and hold each of them harmless against, any and allactions, suits, proceedings (including any investigations, litigation, orinquiries), demands, causes of action, costs, losses, liabilities, diminutionin value, damages, or expenses of any kind or nature whatsoever, including,without limitation, the reasonable fees and disbursements of counsel and allother reasonable expenses incurred in connection with investigating, defendingor preparing to defend any such matter that may be incurred by them or assertedagainst or involve any of them as a result of, arising out of, or in any wayrelated to the breach of any of the representations, warranties or covenants ofsuch Purchaser contained herein, *provided*such claim for indemnification relating to a breach of the representations andwarranties is made prior to the expiration of such representations andwarranties.

 

Section 6.03           Indemnification Procedure.  Promptly after any Copano Related Party orPurchaser Related Party (hereinafter, the “Indemnified Party”) hasreceived notice of any indemnifiable claim hereunder, or the commencement ofany action or proceeding by a third person, which the Indemnified Partybelieves in good faith is an indemnifiable claim under this Agreement, theIndemnified Party shall give the indemnitor hereunder (the “IndemnifyingParty”) written notice of such claim or the commencement of such action orproceeding, but

 

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failure to so notify theIndemnifying Party will not relieve the Indemnifying Party from any liabilityit may have to such Indemnified Party hereunder except to the extent that theIndemnifying Party is materially prejudiced by such failure.  Such notice shall state the nature and thebasis of such claim to the extent then known. The Indemnifying Party shall have the right to defend and settle, at itsown expense and by its own counsel who shall be reasonably acceptable to theIndemnified Party, any such matter as long as the Indemnifying Party pursuesthe same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it shallpromptly notify the Indemnified Party of its intention to do so, and theIndemnified Party shall cooperate with the Indemnifying Party and its counselin all commercially reasonable respects in the defense thereof and thesettlement thereof. Such cooperation shall include, but shall not be limitedto, furnishing the Indemnifying Party with any books, records and otherinformation reasonably requested by the Indemnifying Party and in theIndemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at the cost of theIndemnifying Party.  After theIndemnifying Party has notified the Indemnified Party of its intention toundertake to defend or settle any such asserted liability, and for so long asthe Indemnifying Party diligently pursues such defense, the Indemnifying Partyshall not be liable for any additional legal expenses incurred by theIndemnified Party in connection with any defense or settlement of such assertedliability; *provided, however*,that the Indemnified Party shall be entitled (i) at its expense, to participatein the defense of such asserted liability and the negotiations of thesettlement thereof and (ii) if (A) the Indemnifying Party has failed to assumethe defense or employ counsel reasonably acceptable to the Indemnified Party or(B) if the defendants in any such action include both the Indemnified Party andthe Indemnifying Party and counsel to the Indemnified Party shall haveconcluded that there may be reasonable defenses available to the IndemnifiedParty that are different from or in addition to those available to theIndemnifying Party or if the interests of the Indemnified Party reasonably maybe deemed to conflict with the interests of the Indemnifying Party, then theIndemnified Party shall have the right to select a separate counsel and toassume such legal defense and otherwise to participate in the defense of suchaction, with the expenses and fees of such separate counsel and other expensesrelated to such participation to be reimbursed by the Indemnifying Party asincurred.  Notwithstanding any otherprovision of this Agreement, the Indemnifying Party shall not settle anyindemnified claim without the consent of the Indemnified Party, unless thesettlement thereof imposes no liability or obligation on, involves no admissionof wrongdoing or malfeasance by, and includes a complete release from liabilityof, the Indemnified Party.

 

**ARTICLE VIIMISCELLANEOUS**

 

Section 7.01           Interpretation. Article,Section, Schedule, and Exhibit references are to this Agreement, unlessotherwise specified. All references to instruments, documents, contracts, andagreements are references to such instruments, documents, contracts, andagreements as the same may be amended, supplemented, and otherwise modifiedfrom time to time, unless otherwise specified. The word “including” shall mean “includingbut not limited to.” Whenever Copano has an obligation under the BasicDocuments, the expense of complying with that obligation shall be an expense ofCopano unless otherwise specified. Whenever any determination, consent, orapproval is to be made or given by a Purchaser, such action shall be in suchPurchaser’s sole discretion unless otherwise specified in this Agreement. Ifany provision in the Basic Documents is held to be illegal, invalid, notbinding, or unenforceable, such provision

 

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shall be fully severable andthe Basic Documents shall be construed and enforced as if such illegal,invalid, not binding, or unenforceable provision had never comprised a part ofthe Basic Documents, and the remaining provisions shall remain in full forceand effect. The Basic Documents have been reviewed and negotiated bysophisticated parties with access to legal counsel and shall not be construedagainst the drafter.

 

Section 7.02           Survival of Provisions.  The representations and warranties set forthin Sections 3.01, 3.02, 3.04, 3.12, 3.13, 4.03, 4.04, 4.05, 4.06, 4.07 and 4.08of this Agreement shall survive the execution and delivery of this Agreementindefinitely, and the other representations and warranties set forth in this Agreementshall survive for a period of twelve (12) months following the Closing Dateregardless of any investigation made by or on behalf of Copano or anyPurchaser.  The covenants made in thisAgreement or any other Basic Document shall survive the closing of thetransactions described herein and remain operative and in full force and effectregardless of acceptance of any of the Purchased Common Units and paymenttherefor and repayment, conversion or repurchase thereof. All indemnificationobligations of Copano and the Purchasers the provisions of Article VI shallremain operative and in full force and effect unless such obligations areexpressly terminated in a writing by the Parties referencing that individualSection, regardless of any purported general termination of this Agreement.

 

Section 7.03           No Waiver; Modifications inWriting.

 

(a)           Delay. Nofailure or delay on the part of any party in exercising any right, power, orremedy hereunder shall operate as a waiver thereof, nor shall any single orpartial exercise of any such right, power, or remedy preclude any other orfurther exercise thereof or the exercise of any right, power, or remedy. Theremedies provided for herein are cumulative and are not exclusive of anyremedies that may be available to a party at law or in equity or otherwise.

 

(b)           Specific Waiver.Except as otherwise provided herein, no amendment, waiver, consent,modification, or termination of any provision of this Agreement or any otherBasic Document shall be effective unless signed by each of the originalsignatories hereto or thereto affected by such amendment, waiver, consent,modification, or termination. Any amendment, supplement or modification of orto any provision of this Agreement or any other Basic Document, any waiver of anyprovision of this Agreement or any other Basic Document, and any consent to anydeparture by Copano from the terms of any provision of this Agreement or anyother Basic Document shall be effective only in the specific instance and forthe specific purpose for which made or given. Except where notice isspecifically required by this Agreement, no notice to or demand on Copano inany case shall entitle Copano to any other or further notice or demand insimilar or other circumstances.

 

Section 7.04           Binding Effect; Assignment.

 

(a)           Binding Effect.This Agreement shall be binding upon Copano, each Purchaser, and theirrespective successors and permitted assigns. Except as expressly provided inthis Agreement, this Agreement shall not be construed so as to confer any

 

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right orbenefit upon any Person other than the parties to this Agreement and asprovided in Article VI, and their respective successors and permitted assigns.

 

(b)           Assignment ofPurchased Common Units. All or any portion of a Purchaser’s PurchasedCommon Units purchased pursuant to this Agreement may be sold, assigned orpledged by such Purchaser, subject to compliance with applicable securitieslaws, this Agreement and the Registration Rights Agreement.

 

(c)           Assignment ofRights. Each Purchaser under this Agreement may assign all or any portionof its rights hereunder: (i) to any Affiliate of such Purchaser; or (ii) inconnection with a total return swap or similar transaction with respect to thePurchased Common Units purchased by such Purchaser, and in each case theassignee shall be deemed to be a Purchaser hereunder with respect to suchassigned rights and shall agree to be bound by the provisions of thisAgreement.   Except as expressly permittedby this Section 7.04(c), such rights may not otherwise be transferred exceptwith the prior written consent of Copano (which consent shall not beunreasonably withheld), in which case the assignee shall be deemed to be aPurchaser hereunder with respect to such assigned rights and shall agree to bebound by the provisions of this Agreement.

 

Section 7.05           Aggregation of Purchased CommonUnits.  All Purchased Common Unitsheld or acquired by Persons who are Affiliates of one another shall beaggregated together for the purpose of determining the availability of anyrights under this Agreement.

 

Section 7.06           Communications.  All notices and demands provided forhereunder shall be in writing and shall be given by registered or certifiedmail, return receipt requested, regular mail, telecopy, air courierguaranteeing overnight delivery, electronic mail or personal delivery to theaddresses listed in Schedule 7.06 of this Agreement or to such otheraddress as Copano or such Purchaser may designate in writing. All notices andcommunications shall be deemed to have been duly given: at the time deliveredby hand, if personally delivered; upon actual receipt if sent by registered orcertified mail, return receipt requested, or regular mail, if mailed; whenreceipt acknowledged, if sent via facsimile; and upon actual receipt whendelivered by an air courier guaranteeing overnight delivery or via electronicmail.

 

Section 7.07           Removal of Legend.  Copano shall remove the legend described inSection 4.08 of this Agreement from the certificates evidencing the PurchasedCommon Units at the request of a Purchaser submitting to Copano suchcertificates, together with such other documentation as may be reasonablyrequested by Copano or required by the transfer agent, unless Copano, with theadvice of counsel, determines that such removal is inappropriate.

 

Section 7.08           Entire Agreement.  This Agreement is intended by the parties asa final expression of their agreement and intended to be a complete andexclusive statement of the agreement and understanding of the parties hereto inrespect of the subject matter contained herein. There are no restrictions,promises, warranties or undertakings, other than those set forth or referred toherein with respect to the rights granted by Copano or a Purchaser set forthherein. This Agreement supersedes all prior agreements and understandingsbetween the parties with respect to such subject matter.

 

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Section 7.09           Governing Law.  This Agreement will be construed inaccordance with and governed by the laws of the State of Delaware withoutregard to principles of conflicts of laws.

 

Section 7.10           Execution in Counterparts.  This Agreement may be executed in any numberof counterparts and by different parties hereto in separate counterparts, eachof which counterparts, when so executed and delivered, shall be deemed to be anoriginal and all of which counterparts, taken together, shall constitute butone and the same Agreement. 

 

Section 7.11           Expenses.  Copano hereby covenants and agrees toreimburse Baker Botts L.L.P., for reasonable and documented legal fees not toexceed $50,000.  If any action at law orequity is necessary to enforce or interpret the terms of the Basic Documents,the prevailing party shall be entitled to reasonable attorney’s fees,out-of-pocket costs and necessary disbursements in addition to any other reliefto which such party may be entitled.

 

Section 7.12           Recapitalization, Exchanges, Etc.Affecting the Purchased Common Units. The provisions of this Agreement shall apply to the full extent setforth herein with respect to any and all units of Copano or any successor orassign of Copano (whether by merger, consolidation, sale of assets orotherwise) which may be issued in respect of, in exchange for or insubstitution of, the Purchased Common Units, and shall be appropriatelyadjusted for combinations, recapitalizations and the like occurring after thedate of this Agreement.

 

[The remainder of this page is intentionally left blank.]

 

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IN WITNESSWHEREOF, the parties hereto execute this Agreement, effective as of the datefirst above written.

 
|   | **COPANO ENERGY, L.L.C.** |
|--------|---------------------------|
|   |                      |   |
|   |                      |   |
|   | By:                       | /s/ John R.  Eckel, Jr. |
|   |                      | John R.  Eckel, Jr. |
|   |                      | Chairman of  the Board and Chief Executive Officer |

 

 

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Common Unit Purchase Agreement

 

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|   | **ZLP FUND, L.P.** |
|--------|--------------------|
|   |               |   |   |
|   | By:                | Zimmer Lucas  Partners, LLC, |
|   |               | its general  partner |
|   |               |   |   |
|   |               |   |   |
|   |               | By: |   /s/  Stuart Zimmer |
|   |               |   |   Stuart  Zimmer, Managing Member |

 

 

Signature Page to

Common Unit Purchase Agreement

 

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|   | **STRUCTURED FINANCE AMERICAS, LLC** |
|--------|--------------------------------------|
|   |                                 |   |
|   |                                 |   |
|   | By:                                  | /s/ K. Bell |
|   |                                 | Name:  K. Bell |
|   |                                 | Title:   Managing Director |
|   |                                 |   |
|   |                                 |   |
|   | By:                                  | /s/ Richard C. Kennedy |
|   |                                 | Name:  Richard C. Kennedy |
|   |                                 | Title:   |

 

 

Signature Page to

Common Unit Purchase Agreement

 

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|   | **ROYAL BANK OF CANADA**            |
|--------|-------------------------------------|
|   | ** by its agent**              |   |
|   |                                |   |
|   | **RBC CAPITAL MARKETS CORPORATION** |
|   |                                |   |
|   |                                |   |
|   | By:                                 | /s/ Patrick  Clarke |
|   |                                | Name:   Patrick Clarke |
|   |                                | Title:    Managing Director |
|   |                                |   |
|   |                                |   |
|   | By:                                 | /s/ Josef  Muskatel |
|   |                                | Name:   Josef Muskatel |
|   |                                | Title:    Director and Senior Counsel |
|        |                                     |  |  |

 

Signature Page to

Common Unit Purchase Agreement

 

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**Schedule 2.01**

 
| **Entity**                        | ** ** | **Number of  Common Units** | ** ** | **Aggregate Purchase  Price** | ** ** |
|-----------------------------------|------------|-----------------------------|------------|-------------------------------|------------|
| ZLP Fund,  L.P.                   |       | 709,220                     |       | $                             | 25,000,005 |   |
|                              |       |                        |       |                          |       |
| Structured  Finance Americas, LLC |       | 567,376                     |       | $                             | 20,000,004 |   |
|                              |       |                        |       |                          |       |
| Royal Bank  of Canada             |       | 141,844                     |       | $                             | 5,000,001  |   |
|                              |       |                        |       |                          |       |
| Total                             |       | 1,418,440                   |       | $                             | 50,000,010 |   |

 

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