Exhibit 10.31


 


BRIDGE LOAN AGREEMENT


 


Dated as of
August 1, 2005


 


among


 


COPANO
ENERGY, L.L.C.,
as the Borrower,


 


BANC OF
AMERICA BRIDGE LLC,

as Administrative Agent


 


and


 


The Other
Lenders Party Hereto


 


BANC OF
AMERICA SECURITIES LLC,
as

Sole Lead Arranger and Sole Book Manager


 





















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
  1.01

  	
   

  	
  Defined Terms

  	
   

  
	
  1.02

  	
   

  	
  Other Interpretive Provisions

  	
   

  
	
  1.03

  	
   

  	
  Accounting Terms

  	
   

  
	
  1.04

  	
   

  	
  Rounding

  	
   

  
	
  1.05

  	
   

  	
  Times of Day

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II. THE BRIDGE FACILITY

  	
   

  
	
  2.01

  	
   

  	
  The Bridge Loans

  	
   

  
	
  2.02

  	
   

  	
  Conversion to Rollover Loans

  	
   

  
	
  2.03

  	
   

  	
  Option to Exchange Rollover
  Loans for Exchange Notes; Exchange Notes Provisions

  	
   

  
	
  2.04

  	
   

  	
  Prepayments

  	
   

  
	
  2.05

  	
   

  	
  Reduction of
  Commitments

  	
   

  
	
  2.06

  	
   

  	
  Repayment of
  Bridge Loans

  	
   

  
	
  2.07

  	
   

  	
  Interest

  	
   

  
	
  2.08

  	
   

  	
  Fees

  	
   

  
	
  2.09

  	
   

  	
  Computation
  of Interest and Fees

  	
   

  
	
  2.10

  	
   

  	
  Evidence of Debt

  	
   

  
	
  2.11

  	
   

  	
  Payments
  Generally; Administrative Agent’s Clawback

  	
   

  
	
  2.12

  	
   

  	
  Sharing of
  Payments by Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III. TAXES, YIELD PROTECTION AND
  ILLEGALITY

  	
   

  
	
  3.01

  	
   

  	
  Taxes

  	
   

  
	
  3.02

  	
   

  	
  Illegality

  	
   

  
	
  3.03

  	
   

  	
  Inability to
  Determine Rates

  	
   

  
	
  3.04

  	
   

  	
  Increased
  Costs; Reserves on Eurodollar Rate Loans

  	
   

  
	
  3.05

  	
   

  	
  Compensation for
  Losses

  	
   

  
	
  3.06

  	
   

  	
  Mitigation
  Obligations; Replacement of Lenders

  	
   

  
	
  3.07

  	
   

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV. CONDITIONS PRECEDENT TO BRIDGE
  LOANS

  	
   

  
	
  4.01

  	
   

  	
  Conditions
  Precedent to Bridge Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V. REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  5.01

  	
   

  	
  Existence, Qualification and Power;
  Compliance with Laws

  	
   

  
	
  5.02

  	
   

  	
  Authorization;
  No Contravention

  	
   

  
	
  5.03

  	
   

  	
  Governmental
  Authorization; Other Consents

  	
   

  
	
  5.04

  	
   

  	
  Binding
  Effect

  	
   

  
	
  5.05

  	
   

  	
  Financial
  Statements; No Material Adverse Effect; No Internal Control Event

  	
   

  
	
  5.06

  	
   

  	
  Litigation

  	
   

  
	
  5.07

  	
   

  	
  No Default

  	
   

  
	
  5.08

  	
   

  	
  Ownership
  of Property; Liens

  	
   

  
	
  5.09

  	
   

  	
  Environmental
  Compliance

  	
   

  
	
  5.10

  	
   

  	
  Insurance

  	
   

  
	
  5.11

  	
   

  	
  Taxes

  	
   

  
	
  5.12

  	
   

  	
  ERISA Compliance

  	
   

  
					



 





















 


	
  5.13

  	
   

  	
  Subsidiaries;
  Equity Interests

  	
   

  
	
  5.14

  	
   

  	
  Margin
  Regulations; Investment Company Act; Public Utility Holding Company Act

  	
   

  
	
  5.15

  	
   

  	
  Disclosure

  	
   

  
	
  5.16

  	
   

  	
  Compliance
  with Laws

  	
   

  
	
  5.17

  	
   

  	
  Intellectual
  Property; Licenses, Etc

  	
   

  
	
  5.18

  	
   

  	
  Labor
  Disputes and Acts of God

  	
   

  
	
  5.19

  	
   

  	
  Solvency

  	
   

  
	
  5.20

  	
   

  	
  Acquisition Closing

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI. AFFIRMATIVE COVENANTS

  	
   

  
	
  6.01

  	
   

  	
  Financial
  Statements

  	
   

  
	
  6.02

  	
   

  	
  Certificates;
  Other Information

  	
   

  
	
  6.03

  	
   

  	
  Notices

  	
   

  
	
  6.04

  	
   

  	
  Payment of
  Obligations

  	
   

  
	
  6.05

  	
   

  	
  Preservation
  of Existence, Etc.

  	
   

  
	
  6.06

  	
   

  	
  Maintenance
  of Properties

  	
   

  
	
  6.07

  	
   

  	
  Maintenance
  of Insurance

  	
   

  
	
  6.08

  	
   

  	
  Compliance
  with Laws

  	
   

  
	
  6.09

  	
   

  	
  Books and
  Records

  	
   

  
	
  6.10

  	
   

  	
  Inspection
  Rights

  	
   

  
	
  6.11

  	
   

  	
  Use of
  Proceeds

  	
   

  
	
  6.12

  	
   

  	
  Additional
  Guarantors

  	
   

  
	
  6.13

  	
   

  	
  Environmental
  Matters; Environmental Reviews

  	
   

  
	
  6.14

  	
   

  	
  Compliance
  with Agreements

  	
   

  
	
  6.15

  	
   

  	
  Unrestricted
  Subsidiaries

  	
   

  
	
  6.16

  	
   

  	
  Permanent
  Financing

  	
   

  
	
  6.17

  	
   

  	
  Exchange
  Note Indenture

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII. NEGATIVE COVENANTS

  	
   

  
	
  7.01

  	
   

  	
  Liens

  	
   

  
	
  7.02

  	
   

  	
  Investments

  	
   

  
	
  7.03

  	
   

  	
  Indebtedness

  	
   

  
	
  7.04

  	
   

  	
  Fundamental
  Changes

  	
   

  
	
  7.05

  	
   

  	
  Dispositions

  	
   

  
	
  7.06

  	
   

  	
  Restricted
  Payments

  	
   

  
	
  7.07

  	
   

  	
  Change in
  Nature of Business

  	
   

  
	
  7.08

  	
   

  	
  Transactions
  with Affiliates

  	
   

  
	
  7.09

  	
   

  	
  Burdensome
  Agreements

  	
   

  
	
  7.10

  	
   

  	
  Use of
  Proceeds

  	
   

  
	
  7.11

  	
   

  	
  Prohibited
  Contracts

  	
   

  
	
  7.12

  	
   

  	
  Hedging
  Contracts

  	
   

  
	
  7.13

  	
   

  	
  Subsidiaries

  	
   

  
	
  7.14

  	
   

  	
  Limitation
  on Credit Extensions

  	
   

  
	
  7.15

  	
   

  	
  Risk
  Management Compliance

  	
   

  
	
  7.16

  	
   

  	
  Subordinated
  Debt

  	
   

  
	
  7.17

  	
   

  	
  Material
  Contracts

  	
   

  
	
  7.18

  	
   

  	
  Designation
  and Conversion of Restricted and Unrestricted Subsidiaries; Debt of Unrestricted
  Subsidiaries

  	
   

  
	
  7.19

  	
   

  	
  Capital
  Expenditures

  	
   

  
	
  7.20

  	
   

  	
  Amendments
  to Organizational Documents

  	
   

  
	
  7.21

  	
   

  	
  Financial Covenants

  	
   

  



 


ii





















 


	
  ARTICLE
  VIII. EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
  8.01

  	
   

  	
  Events of
  Default

  	
   

  
	
  8.02

  	
   

  	
  Remedies
  Upon Event of Default

  	
   

  
	
  8.03

  	
   

  	
  Application
  of Funds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX. ADMINISTRATIVE AGENT

  	
   

  
	
  9.01

  	
   

  	
  Appointment
  and Authority

  	
   

  
	
  9.02

  	
   

  	
  Rights as a
  Lender

  	
   

  
	
  9.03

  	
   

  	
  Exculpatory
  Provisions

  	
   

  
	
  9.04

  	
   

  	
  Reliance by
  Administrative Agent

  	
   

  
	
  9.05

  	
   

  	
  Delegation
  of Duties

  	
   

  
	
  9.06

  	
   

  	
  Resignation
  of Administrative Agent

  	
   

  
	
  9.07

  	
   

  	
  Non-Reliance
  on Administrative Agent and Other Lenders

  	
   

  
	
  9.08

  	
   

  	
  No Other
  Duties, Etc

  	
   

  
	
  9.09

  	
   

  	
  Administrative
  Agent May File Proofs of Claim

  	
   

  
	
  9.10

  	
   

  	
  Guaranty
  Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X. MISCELLANEOUS

  	
   

  
	
  10.01

  	
   

  	
  Amendments,
  Etc.

  	
   

  
	
  10.02

  	
   

  	
  Notices;
  Effectiveness; Electronic Communication

  	
   

  
	
  10.03

  	
   

  	
  No Waiver;
  Cumulative Remedies

  	
   

  
	
  10.04

  	
   

  	
  Expenses;
  Indemnity; Damage Waiver

  	
   

  
	
  10.05

  	
   

  	
  Payments
  Set Aside

  	
   

  
	
  10.06

  	
   

  	
  Successors and
  Assigns

  	
   

  
	
  10.07

  	
   

  	
  Treatment
  of Certain Information; Confidentiality

  	
   

  
	
  10.08

  	
   

  	
  Right of
  Setoff

  	
   

  
	
  10.09

  	
   

  	
  Interest
  Rate Limitation

  	
   

  
	
  10.10

  	
   

  	
  Counterparts;
  Integration; Effectiveness

  	
   

  
	
  10.11

  	
   

  	
  Survival of
  Representations and Warranties

  	
   

  
	
  10.12

  	
   

  	
  Severability

  	
   

  
	
  10.13

  	
   

  	
  Replacement
  of Lenders

  	
   

  
	
  10.14

  	
   

  	
  Governing
  Law; Jurisdiction; Etc

  	
   

  
	
  10.15

  	
   

  	
  Waiver of
  Jury Trial

  	
   

  
	
  10.16

  	
   

  	
  USA Patriot
  Act Notice

  	
   

  
	
  10.17

  	
   

  	
  ENTIRE
  AGREEMENT

  	
   

  



 


iii





















 


	
  SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.01

  	
   

  	
  Commitments and Applicable
  Percentages

  	
   

  
	
  5.05

  	
   

  	
  Supplement to Interim Financial
  Statements

  	
   

  
	
  5.09

  	
   

  	
  Environmental Matters

  	
   

  
	
  5.13

  	
   

  	
  Subsidiaries; Other Equity
  Investments

  	
   

  
	
  7.01

  	
   

  	
  Existing Liens

  	
   

  
	
  7.03

  	
   

  	
  Existing Indebtedness

  	
   

  
	
  7.11

  	
   

  	
  Prohibited Contracts

  	
   

  
	
  10.02

  	
   

  	
  Administrative Agent’s Office;
  Certain Addresses for Notices

  	
   

  
	
  10.06

  	
   

  	
  Processing and Recordation Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  [Reserved]

  	
   

  
	
  B

  	
   

  	
  Bridge Note

  	
   

  
	
  C

  	
   

  	
  Rollover Note

  	
   

  
	
  D

  	
   

  	
  Compliance Certificate

  	
   

  
	
  E

  	
   

  	
  Assignment and Assumption

  	
   

  
	
  F

  	
   

  	
  Guaranty

  	
   

  
	
  G

  	
   

  	
  Opinion Matters

  	
   

  
	
  H

  	
   

  	
  Solvency Certificate

  	
   

  
	
  I

  	
   

  	
  Risk Management Policy

  	
   

  



 


iv





















 


BRIDGE LOAN AGREEMENT


 


This BRIDGE
LOAN AGREEMENT (“Agreement”) is entered into as of August 1, 2005, among COPANO ENERGY, L.L.C., a Delaware limited liability
company (the “Borrower”), each lender from time to time party hereto
(collectively, the “Lenders” and individually, a “Lender”), and
BANC OF AMERICA BRIDGE LLC, as
Administrative Agent.


 


The Borrower
has requested that the Lenders lend to the Borrower $170,000,000 hereunder, and
the Lenders are willing to do so on the terms and conditions set forth herein.


 


In
consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:


 


ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS


 


1.01        Defined
Terms.  As used
in this Agreement, the following terms shall have the meanings set forth below:


 


“Acquisition”
means the purchase by the Acquisition Subsidiary of all the Equity Interests of
ScissorTail pursuant to the Acquisition Agreement.


 


“Acquisition
Agreement” means that certain Membership Interest Purchase Agreement dated
as of June 20, 2005, by and among the Borrower, the Acquisition Subsidiary,
ScissorTail, Hamilton ScissorTail, LLC, ScissorTail Holdings, LLC, Jay A.
Precourt and Frederic C. Hamilton.


 


“Acquisition
Documents” means (a) the Acquisition Agreement, and (b) all other
agreements, assignments, deeds, conveyances, certificates and other documents
and instruments now or hereafter executed and delivered in connection with the
Acquisition.


 


“Acquisition
Subsidiary” means Copano Energy/Rocky Mountains and Mid-Continent, L.L.C.,
a Delaware limited liability company, a wholly-owned Subsidiary of the
Borrower.


 


“Additional
Debt” means Indebtedness for borrowed money other than Indebtedness
described in Section 7.03 hereof.


 


“Additional
Equity” means any contribution to the equity capital of any Person whether
or not occurring in connection with the issuance or sale of Equity Interests by
such Person.


 


“Administrative
Agent” means Banc of America Bridge in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.


 


“Administrative
Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.


 





















 


“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by
the Administrative Agent.


 


“Affiliate”
means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.


 


“Aggregate
Commitments” means the Commitments of all the Lenders.


 


“Agreement”
means this Bridge Loan Agreement.


 


“Applicable
Percentage” means, with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of the Aggregate Commitments
represented by (i) on or prior to the Closing Date, such Lender’s Commitment at
such time and (ii) thereafter, the principal amount of such Lender’s Loans at
such time.  The initial Applicable
Percentage of each Lender in respect of the Bridge Facility is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment
and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.


 


“Applicable
Rate” means, with respect to Eurodollar Rate Loans, a percentage per annum
initially equal to 5.00% per annum, which shall increase by 0.50% per annum at
the end of the first Interest Period after the Closing Date, and the applicable
percentage per annum will continue to increase by 0.50% per annum at the end of
each Interest Period thereafter.


 


“Approved
Fund” means any Fund that is administered or managed by (a) a Lender, (b)
an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.


 


“Arranger”
means Banc of America Securities
LLC, in its capacity as sole lead arranger and sole book manager.


 


“Assignee
Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.


 


“Assignment
and Assumption” means an assignment and assumption entered into by a Lender
and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit E or any other form approved
by the Administrative Agent.


 


“Attributable
Indebtedness” means, on any date, (a) in respect of any capital lease of
any Person, the capitalized amount thereof that would appear on a balance sheet
of such Person prepared as of such date in accordance with GAAP, and (b) in
respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP
if such lease were accounted for as a capital lease.


 


“Audited
Financial Statements” means the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the fiscal year ended December 31, 2004, and the related


 


2





















 


consolidated
statements of income or operations, members’ capital and cash flows for such
fiscal year of the Borrower and its Subsidiaries, including the notes thereto.


 


“Available
Cash” for any fiscal quarter has the meaning set forth in the Borrower LLC
Agreement.


 


“Banc of
America Bridge” means Banc of America Bridge LLC and its successors.


 


“Bank of
America” means Bank of America, N.A. and its successors.


 


“BBA LIBOR” has the meaning specified in Section 1.01 under
the definition of “Eurodollar Rate”.


 


“Borrower”
has the meaning specified in the introductory paragraph hereto.


 


“Borrower
LLC Agreement” means the Second Amended and Restated Limited Liability
Company Agreement of the Borrower dated as of November 15, 2004.


 


“Borrower
Materials” has the meaning specified in Section 6.02.


 


“Bridge
Borrowing” means a borrowing consisting of simultaneous Bridge Loans made
by each of the Lenders pursuant to Section 2.01(a).


 


“Bridge
Facility” means, at any time, (a) prior to the Bridge Borrowing, the
Aggregate Commitments, and (b) after the Bridge Borrowing, the aggregate amount
of Bridge Loans and Rollover Loans of all Lenders at such time.


 


“Bridge
Loan” has the meaning specified in Section 2.01.


 


“Bridge
Maturity Date” means the first anniversary of the Closing Date.


 


“Bridge
Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Bridge Loans made by such Lender, in substantially the form of Exhibit
B.


 


“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.


 


“Capital
Expenditures” means, for any period, for the Borrower and its Restricted
Subsidiaries on a consolidated basis, an amount equal to the sum of (i) the
aggregate amount of all expenditures of the Borrower and its Restricted
Subsidiaries for fixed or capital assets made during such period which, in
accordance with GAAP, would be classified as capital expenditures plus (ii) the
aggregate amount of all capitalized lease liabilities incurred during such
period.


 


“Change in
Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change


 


3





















 


in any law,
rule, regulation or treaty or in the administration, interpretation or
application thereof by any Governmental Authority or (c) the making or
issuance of any request, guideline or directive (whether or not having the
force of law) by any Governmental Authority.


 


“Change of
Control” means an event or series of events by which:


 


(a)           any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act
of 1934), except that a person or group shall be deemed to have “beneficial
ownership” of all securities that such person or group has the right to acquire
(such right, an “option right”), whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 30%
or more of the equity securities of the Borrower entitled to vote for members
of the board of directors or equivalent governing body of the Borrower on a fully-diluted
basis (and taking into account all such securities that such person or group
has the right to acquire pursuant to any option right);


 


(b)           during any period of 12 consecutive
months, a majority of the members of the board of directors or other equivalent
governing body of the Borrower cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of such
period, (ii) whose election or nomination to that board or equivalent governing
body was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body or (iii) whose election or nomination
to that board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such
election or nomination at least a majority of that board or equivalent
governing body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member
of that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors);
or


 


(c)           any Person or two or more Persons
acting in concert shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation thereof, will
result in its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies of the
Borrower, or control over the equity securities of the Borrower entitled to
vote for members of the board of directors or equivalent governing body of the
Borrower on a fully-diluted basis (and taking into account all such securities
that such Person or group has the right to acquire pursuant to any option
right) representing 30% or more of the combined voting power of such
securities.


 


“Change of Control Notice” has the meaning specified in Section
2.04(c).


 


4





















 


“Change of Control Offer” has the meaning specified in Section
2.04(c).


 


“Change of Control Payment” has the meaning specified in Section
2.04(c).


 


“Change of Control Payment Date” has the meaning specified in Section
2.04(c).


 


“Closing
Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01 and the
Bridge Loans are made pursuant to Section 2.01.


 


“Code”
means the Internal Revenue Code of 1986.


 


“Comerica
Credit Facility” means that certain Credit Agreement among Copano Houston
Central, L.L.C., Copano Processing, L.P., Copano NGL Services, L.P. and
Comerica Bank dated as of November 15, 2004, as the same has been amended prior
to the date hereof.


 


“Commitment”
means, as to each Lender, its obligation to make Bridge Loans to the Borrower
pursuant to Section 2.01 in the aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender’s name
on Schedule 2.01 or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement.


 


“Compliance
Certificate” means a certificate substantially in the form of Exhibit D.


 


“Consolidated
EBITDA” means, for any period, for the Borrower and its Restricted
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net
Income for such period plus (a) the following to the extent deducted in
calculating such Consolidated Net Income: (i) Consolidated Interest Charges for
such period, (ii) the provision for Federal, state, local and foreign income
taxes payable by the Borrower and its Restricted Subsidiaries for such period,
(iii) depreciation and amortization expense and (iv) other expenses of the
Borrower and its Restricted Subsidiaries reducing such Consolidated Net Income
which do not represent a cash item in such period or any future period and minus
(b) the following to the extent included in calculating such Consolidated Net
Income:  (i) Federal, state, local and
foreign income tax credits of the Borrower and its Restricted Subsidiaries for
such period and (ii) all non-cash items increasing Consolidated Net Income for
such period; provided that for the purposes of Section 7.21, if
the Borrower or any Restricted Subsidiary shall acquire or dispose of any
material property or a Subsidiary shall be redesignated as either an
Unrestricted Subsidiary or a Restricted Subsidiary, in any case, during the
period of four fiscal quarters ending on the last day of the fiscal quarter
immediately preceding the date of determination for which financial statements
are available and up to and including the date of the consummation of such
acquisition, disposition or redesignation, then Consolidated EBITDA shall be
calculated, in a manner satisfactory to the Administrative Agent in its
reasonable discretion, after giving pro forma effect to such acquisition
(including the revenues of the properties acquired), merger, disposition or
redesignation, as if such acquisition, merger, disposition or redesignation had
occurred on the first day of such period.


 


5





















 


“Consolidated
Fixed Charge Coverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated EBITDA minus Maintenance Capital Expenditures for the
applicable period to (b) Consolidated Fixed Charges for the applicable period.


 


“Consolidated
Fixed Charges” means, for any period, for the Borrower and its Restricted
Subsidiaries on a consolidated basis, an amount equal to the sum (without
duplication) of the following (in each case, eliminating all offsetting debits
and credits between the Borrower and its Restricted Subsidiaries and all other
items required to be eliminated in the course of the preparation of consolidated
financial statements of the Borrower and its Restricted Subsidiaries in
accordance with GAAP): 
(a) Consolidated Interest Charges; plus (b) all fees, expenses
and charges in respect of letters of credit issued for the account of the
Borrower or any of its Restricted Subsidiaries, which are accrued during such
period and whether expensed in such period or capitalized; plus
(c) payments of principal in respect of Indebtedness of the Borrower or
its Restricted Subsidiaries (including the principal component of payments
under capital leases) paid or payable in such period (other than payments of
principal of Indebtedness under the Credit Agreement which is available to be
reborrowed under the Credit Agreement).


 


“Consolidated
Funded Indebtedness” means, as of any date of determination, for the
Borrower and its Restricted Subsidiaries on a consolidated basis, the sum of
(a) the outstanding principal amount of all obligations, whether current or
long-term, for borrowed money (including Obligations hereunder) and all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all direct
obligations arising under letters of credit (including standby and commercial),
bankers’ acceptances, bank guaranties, surety bonds and similar instruments,
(d) all obligations in respect of the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of
business), (e) Attributable Indebtedness in respect of capital leases and
Synthetic Lease Obligations, (f) without duplication, all Guarantees with
respect to outstanding Indebtedness of the types specified in clauses (a)
through (e) above of Persons other than the Borrower or any Restricted
Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a)
through (f) above of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which the
Borrower or a Restricted Subsidiary is a general partner or joint venturer,
unless such Indebtedness is expressly made non-recourse to the Borrower or such
Restricted Subsidiary.


 


“Consolidated
Interest Charges” means, for any period, for the Borrower and its
Restricted Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, debt discount, fees, charges and related expenses of the
Borrower and its Restricted Subsidiaries in connection with borrowed money
(including capitalized interest) or in connection with the deferred purchase
price of assets, in each case to the extent treated as interest in accordance
with GAAP, excluding (i) distributions and payments to the Borrower’s preferred
unitholders and warrantholders prior to November 15, 2004 and (ii) one-time
charges in respect of loan origination or similar fees and non-cash amortized
amounts with respect thereto, and (b) the portion of rent expense of the
Borrower and its Restricted Subsidiaries with respect to such period under
capital leases that is treated as interest in accordance with GAAP.


 


“Consolidated
Interest Coverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated EBITDA to (b)
Consolidated Interest Charges for the applicable period.


 


6





















 


“Consolidated
Net Income” means, for any period, for the Borrower and its Restricted
Subsidiaries’ gross revenues for such period, including any cash dividends or
distributions actually received from any other Person during such period, minus
the Borrower’s and its Restricted Subsidiaries’ expenses and other proper
charges against income (including taxes on income to the extent imposed),
determined on a consolidated basis in accordance with GAAP consistently applied
after eliminating earnings or losses attributable to outstanding minority
interests and excluding the net earnings of any Person other than a Restricted
Subsidiary in which the Borrower or any of its Subsidiaries has an ownership
interest.  Consolidated Net Income shall
not include (i) any gain or loss from the Disposition of assets, (ii) any
extraordinary gains or losses or (iii) any non-cash gains or losses resulting
from mark to market activity as a result of the implementation of Statement of
Financial Accounting Standards 133, “Accounting for Derivative Instruments and
Hedging Activities” (“SFAS 133”).


 


“Consolidated
Senior Funded Indebtedness” means, as of any date of determination,
Consolidated Funded Indebtedness, but excluding Indebtedness under the Bridge
Facility and Subordinated Indebtedness.


 


“Consolidated
Senior Leverage Ratio” means, as of any date of determination, the ratio of
(a) Consolidated Senior Funded Indebtedness as of such date to (b) Consolidated
EBITDA for the applicable period ending on such date.


 


“Consolidated
Total Leverage Ratio” means, as of any date of determination, the ratio of
(a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA
for the applicable period ending on such date.


 


“Contractual
Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.


 


“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.


 


“Covenant
Release Date” means the first date on which (a) the Rollover Date shall
have occurred, (b) the shelf registration statement shall have been filed with
the SEC pursuant to Section 6.17(c), (c) no Specified Default shall have
occurred and be continuing (unless in the case of a Specified Default under Section
8.0l(a), such Default shall have been cured or waived), and (d) no Event of
Default relating to Section 6.16 or Section 6.17 shall have
occurred and be continuing (unless such Event of Default shall have been cured
or waived).


 


“Covenant
Release Notice” means a certificate by the Chief Financial Officer of the
Borrower certifying that each condition to the Covenant Release Date has been
satisfied.


 


“Credit
Agreement” means the Credit Agreement dated as of the date hereof among the
Borrower, the lenders party thereto and the Credit Facility Agent, as the same
may be amended, supplemented, modified, restated, renewed, refunded, replaced
or refinanced from time to time.


 


7





















 


“Credit
Facility Agent” means Bank of America, as the administrative agent pursuant
to the Credit Agreement, and any successor as administrative agent thereunder.


 


“Credit
Facility Loan Documents” means the Credit Agreement and each of the other
Loan Documents (as defined therein).


 


“Debtor
Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.


 


“Default”
means any event or condition that constitutes an Event of Default or that, with
the giving of any notice, the passage of time, or both, would be an Event of
Default.


 


“Default
Rate” means an interest rate equal to the interest rate (including the
Applicable Rate) otherwise applicable to the Loans plus 2.00% per annum.


 


“Disposition”
or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.


 


“Dollar”
and “$” mean lawful money of the United States.


 


“Eligible
Assignee” means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural
person) approved by the Arranger; provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include the Borrower or any of the
Borrower’s Affiliates or Subsidiaries.


 


“Engagement
Letter” means the letter agreement, dated June 20, 2005, between the Borrower
and the Arranger.


 


“Environmental
Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any Hazardous Materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.


 


“Environmental Liability” means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower, any other Loan
Party or any Restricted Subsidiary directly or indirectly resulting from or
based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened
release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.


 


8





















 


“Equity
Interests” means, with respect to any Person, all of the shares of capital
stock of (or other ownership or profit interests in) such Person, all of the
warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests
in) such Person, all of the securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or acquisition from such
Person of such shares (or such other interests), and all of the other ownership
or profit interests in such Person (including partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such
shares, warrants, options, rights or other interests are outstanding on any
date of determination.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974.


 


“ERISA
Affiliate” means any trade or business (whether or not incorporated) under
common control with the Borrower within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).


 


“ERISA
Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.


 


“Eurodollar
Rate” means for any Interest Period with respect to a Eurodollar Rate Loan,
the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent
from time to time) at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period.  If such rate is
not available at such time for any reason, then the “Eurodollar Rate” for such
Interest Period shall be the rate per annum determined by the Administrative
Agent to be the rate at which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Bank of America and
with a term equivalent to such Interest Period would be offered by Bank of
America’s London Branch to major banks in the London interbank Eurodollar
market at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.


 


9





















 


“Eurodollar
Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.


 


“Event of
Default” has the meaning specified in Section 8.01.


 


“Exchange
Note Indenture” has the meaning specified in Section 6.17.


 


“Exchange
Notes” means the senior exchange notes of the Borrower, guaranteed by the
Guarantors, to be issued in exchange for certain Rollover Loans pursuant to Section
2.03 and the Exchange Note Indenture, in the form to be attached as an
exhibit to the Exchange Note Indenture.


 


“Exchange
Note Trustee” means, on any date of determination, the trustee under the
Exchange Note Indenture.


 


“Exchange
Notice” has the meaning specified in Section 2.03(a).


 


“Excess
Sale Proceeds” has the meaning specified in Section 7.05(c).


 


“Excluded
Taxes” means, with respect to the Administrative Agent, any Lender or any
other recipient of any payment to be made by or on account of any obligation of
the Borrower or any other Loan Party hereunder or under any other Loan
Document, (a) taxes imposed on or measured by its net income (however
denominated), and franchise taxes imposed on it, by the United States or by the
jurisdiction (or any political subdivision thereof) under the laws of which
such recipient is organized or resident or in which its principal office is
located or in which it is doing or has done business or, in the case of any
Lender, in which its applicable Lending Office is located or in which it is
doing or has done business, (b) any branch profits taxes imposed by the United
States or any similar tax imposed by any other jurisdiction (or any political
subdivision thereof) in which the Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 10.13), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party hereto (or designates a new Lending Office) or is attributable to such
Foreign Lender’s failure to comply with Section 3.01(h) or its failure
or inability (other than as a result of a Change in Law) to comply with Section 3.01(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment),
to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 3.01(a).


 


“Existing
Credit Agreement” means that certain Amended and Restated Credit Agreement
dated as of February 13, 2004, among Copano Pipelines Group, L.L.C.,
Copano Field Services/Copano Bay, L.P., Copano Field Services/Agua Dulce, L.P.,
Copano Field Services/South Texas, L.P., Copano Field Services/Live Oak, L.P.,
Copano Field Services/Central Gulf Coast, L.P., Copano Field Services/Upper
Gulf Coast, L.P., Copano Pipelines/South Texas, L.P., Copano Pipelines/Upper
Gulf Coast, L.P., Copano Pipelines/Hebbronville, L.P., Copano Energy Services/Upper
Gulf Coast, L.P., Bank of America, N.A. (successor by merger to Fleet National
Bank), as agent, and a syndicate of lenders, as amended or supplemented to the
Closing Date.


 


10





















 


“Federal
Funds Rate”  means, for
any day, the rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.


 


“Fee Letter”
means the letter agreement, dated June 20, 2005, among the Borrower, the
Administrative Agent, the Arranger, and Bank of America.


 


“Foreign
Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is resident for tax purposes.  For purposes of this definition, the United
States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.


 


“FRB”
means the Board of Governors of the Federal Reserve System of the United
States.


 


“Fund”
means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.


 


“GAAP”
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.


 


“Governmental
Authority” means the government of the United States or any other nation,
or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).


 


“Granting
Lender” has the meaning specified in Section 10.06(h).


 


“Guarantee”
means, as to any Person, (a) any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services
for the purpose of assuring the


 


11





















 


obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemed
to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made.  The term “Guarantee” as a verb has
a corresponding meaning.


 


“Guarantors”
means, collectively, each Restricted Subsidiary of the Borrower.


 


“Guaranty”
means the Guaranty made by the Guarantors in favor of the Administrative Agent
and the Lenders, substantially in the form of Exhibit F.


 


“Hazardous Materials” means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.


 


“Hedging Contract” means (a) any and all rate swap transactions,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or options
or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions,
floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot contracts, or any
other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any
such transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.


 


“Hedging Termination Value” means, in respect of any one or more
Hedging Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Hedging Contracts, (a) for any
date on or after the date such Hedging Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the mark-to-market value(s) for such Hedging Contracts,
as determined based upon one or more mid-


 


12





















 


market or other readily available quotations provided by any recognized
dealer in such Hedging Contracts (which may include a Lender or any Affiliate
of a Lender).


 


“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:


 


(a)           all obligations of such Person for borrowed money
and all obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;


 


(b)           all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;


 


(c)           net obligations of such Person under any Hedging
Contract;


 


(d)           all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts payable in
the ordinary course of business and, in each case, not past due for more than 60
days after the date on which such trade account payable was created);


 


(e)           indebtedness (excluding prepaid interest thereon)
secured by a Lien (other than Liens described in Section 7.01(l))on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse;


 


(f)            capital leases and Synthetic Lease Obligations;


 


(g)           all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any Equity Interest
in such Person (other than as permitted pursuant to Section 7.06) or any
other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends; and


 


(h)           all Guarantees of such Person in respect of any of
the foregoing.


 


For all
purposes hereof, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture (other than a joint venture that is itself
a corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.  The amount
of any net obligation under any Hedging Contract on any date shall be deemed to
be the Hedging Termination Value thereof as of such date.  The amount of any capital lease or Synthetic
Lease Obligation as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date.


 


“Indemnified
Taxes” means Taxes other than Excluded Taxes.


 


13





















 


“Indemnitee”
has the meaning specified in Section 10.04(b).


 


“Information”
has the meaning specified in Section 10.07.


 


“Initial
Financial Statements” means:


 


(a)           the Audited Financial Statements;


 


(b)           the audited consolidated financial
statements of the Borrower as of December 31, 2002 and December 31, 2003;


 


(c)           the unaudited consolidated financial
statements of the Borrower as of March 31, 2005; and


 


(d)           the pro forma
consolidated balance sheet of the Borrower and the Restricted Subsidiaries as
of March 31, 2005 after giving effect to the Acquisition.


 


“Interest
Payment Date” means the last day of each Interest Period and the applicable
Maturity Date.


 


“Interest
Period” means each successive three-month period commencing on the Closing
Date; provided that:


 


(i)            any Interest Period that would otherwise end on a
day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;


 


(ii)           any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and


 


(iii)          no Interest Period shall extend beyond the
applicable Maturity Date.


 


“Internal
Control Event” means (a) a determination of a material weakness in, or (b)
any fraud that involves management or other employees who have a significant
role in, the Borrower’s internal controls over financial reporting, in each
case as described in the Securities Laws.


 


“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
Equity Interests of another Person, or (b) a loan, advance or capital
contribution to, Guarantee or assumption of Indebtedness of, or purchase or
other acquisition of any other Indebtedness or Equity Interests of, another
Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor Guarantees
Indebtedness of such other Person.  For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually


 


14





















 


invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.


 


“IP Rights”
has the meaning specified in Section 5.17.


 


“IRS”
means the United States Internal Revenue Service.


 


“Kinder
Morgan Gas Processing Agreement” means that certain Gas Processing Contract
dated as of January 1, 2004, between Copano Processing, L.P. and Kinder Morgan Texas
Pipeline, L.P., and that certain related Letter Agreement between Copano
Processing, L.P. and Kinder Morgan Texas Pipeline, L.P., regarding prepayment
of carbon dioxide handling fees, together with all amendments and modifications
thereto permitted to be made by this Agreement.


 


“Laws”
means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the interpretation
or administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law.


 


“Lender”
has the meaning specified in the introductory paragraph hereto.


 


“Lending
Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.


 


“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or
other security interest or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).


 


“Loan”
means a Bridge Loan or a Rollover Loan, as applicable.


 


“Loan Documents”
means this Agreement, each Note, the Fee Letter, the Engagement Letter, the
Guaranty and all other agreements, certificates, documents, instruments and
writings at any time delivered in connection herewith (exclusive of term sheets
and commitment letters).


 


“Loan
Parties” means, collectively, the Borrower and each Guarantor.


 


“Maintenance
Capital Expenditures” means, for any period, all amounts properly
classified as capital expenditures under GAAP that are employed to replace
partially or fully depreciated assets to maintain the existing operating
capacity of assets and to extend their useful lives, or other amounts
classified as capital expenditures under GAAP that are incurred in maintaining
existing system volumes and related cash flows, excluding all costs associated
with new well hook-ups.


 


15





















 


“Material
Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent) or condition (financial or otherwise) of the Borrower or the
Borrower and its Restricted Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations under
any Loan Document to which it is a party; or (c) a material adverse effect upon
the legality, validity, binding effect or enforceability against any Loan Party
of any Loan Document to which it is a party.


 


“Material
Contracts” means (a) the Acquisition Documents, (b) the Kinder Morgan Gas
Processing Agreement, (c) the New Dominion Gas Purchase Agreement, and (d) any
other contract or arrangement to which the Borrower or any of its Restricted
Subsidiaries is a party (other than the Loan Documents) that constitutes ten
percent (10%) or more of the aggregate revenue of the Loan Parties on a
consolidated basis.


 


“Maturity
Date” means, with respect to the Bridge Loans, the Bridge Maturity Date,
and with respect to the Rollover Loans, the Rollover Maturity Date.


 


“Maximum
Rate” has the meaning specified in Section 10.09.


 


“Minimum
Rate” means a percentage per annum initially equal to 8.50% per annum,
which shall increase by 0.50% per annum at the end of the first Interest Period
after the Closing Date, and the applicable percentage per annum will continue
to increase by 0.50% per annum at the end of each Interest Period thereafter.


 


“Moody’s”
means Moody’s Investors Service, Inc. and any
successor thereto.


 


“Multiemployer
Plan” means any employee benefit plan of the type described in Section 4001(a)(3)
of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.


 


“Net Cash
Proceeds” means the remainder of (a) the gross proceeds received by any
Loan Party from (i) a Disposition, (ii) the
issuance of Additional Debt, or (iii) the issuance of Additional Equity, as
applicable, less (b) underwriter discounts and commissions, investment banking
fees, legal, accounting and other professional fees and expenses, and other
usual and customary transaction costs, in each case only to the extent paid or
payable by a Loan Party in cash and related to such Disposition, Additional
Debt issuance, or Additional Equity issuance, as applicable.


 


“New
Dominion Gas Purchase Agreement” means that certain Amended and Restated
Gas Purchase and Processing Agreement dated May 1, 2005 between ScissorTail,
Buyer/Processor, and New Dominion, L.L.C., Supplier.


 


“Non-Recourse
Debt” means any Indebtedness of any Unrestricted Subsidiary, in each case
in respect of which: (a) the holder or holders thereof (i) shall have recourse
only to, and shall have the right to require the obligations of such
Unrestricted Subsidiary to be performed, satisfied, and paid only out of, the
property of such Unrestricted Subsidiary and/or one or more of its Subsidiaries
(but only to the extent that such Subsidiaries are Unrestricted Subsidiaries)


 


16





















 


and/or any
other Person (other than the Borrower and/or any Restricted Subsidiary) and
(ii) shall have no direct or indirect recourse (including by way of guaranty,
support or indemnity) to the Borrower or any Restricted Subsidiary or to any of
the property of the Borrower or any Restricted Subsidiary, whether for
principal, interest, fees, expenses or otherwise; and (b) with respect to any
such Indebtedness of any Unrestricted Subsidiary in which the Borrower directly
or indirectly owns 75% or more of the Equity Interests thereof, the terms and
conditions relating to the non-recourse nature of such Indebtedness are in form
and substance reasonably acceptable to the Administrative Agent.


 


“Note”
means a Bridge Note or a Rollover Note, as the context may require.


 


“Obligations”
means all advances to, and debts, liabilities, obligations, covenants and
duties of, any Loan Party arising under any Loan Document or otherwise with
respect to any Loan, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Loan Party of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in
such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding.


 


“Offering
Materials” has the meaning specified in Section 6.16.


 


“Offering
Requirements” means the provisions, conditions, requirements,
recommendations and preferences (a) under Regulation S-X under the Securities
Act (“Regulation S-X”) and all other accounting rules and regulations of
the SEC promulgated under the Securities Act, applicable to a registration
statement under the Securities Act on Form S-1, (b) as would be necessary for
customary “comfort” (including “negative assurance” comfort) from independent
accountants in connection with any offering of any Permanent Financing, and (c)
as are customary and appropriate for such a document and as may otherwise be
reasonably required by the Arranger (including, without limitation, all
audited, pro forma and other
financial statements and schedules of the type that would be required in a
registered public offering of any Permanent Financing on Form S-1).


 


“Organization
Documents” means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.


 


“Other
Taxes” means all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made hereunder or under any other Loan Document or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.


 


17





















 


“Outstanding
Amount” means, with respect to, (a) Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Loans, as the case may be, occurring on such date;
and (b) Exchange Notes on any date, the aggregate outstanding principal amount
thereof after giving effect to any exchanges, issuances, prepayments,
repayments and redemptions of Exchange Notes, as the case may be, occurring on
such date.


 


“Participant”
has the meaning specified in Section 10.06(d).


 


“PBGC”
means the Pension Benefit Guaranty Corporation.


 


“Pension
Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA
Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.


 


“Permanent
Financing” means any debt securities or other Indebtedness issued or
incurred by the Borrower for the purpose of refinancing the Bridge Facility.


 


“Permanent
Financing Documents” means, with respect to any Permanent Financing, the
agreements, indentures, notes, guaranties, supplements, instruments and other
documents (including any exchange notes and securities) pursuant to which such
Permanent Financing, if any, is issued or incurred or otherwise setting forth
the terms of the Permanent Financing.


 


“Person”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other
entity.


 


“Plan”
means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by the Borrower or, with respect to any such plan that is
subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.


 


“Register”
has the meaning specified in Section 10.06(c).


 


“Registered
Public Accounting Firm” has the meaning specified in the Securities Laws
and shall be independent of the Borrower as prescribed by the Securities Laws.


 


“Registration
Rights Agreement” has the meaning specified in Section 6.17(a).


 


“Related
Parties” means, with respect to any Person, such Person’s Affiliates and
the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.


 


“Reportable
Event” means any of the events set forth in Section 4043(c) of ERISA, other
than events for which the 30 day notice period has been waived.


 


18





















 


“Required
Lenders” means, as of any date of determination, registered holders of
Exchange Notes and Lenders holding more than 50% of the sum of the Outstanding
Amounts.


 


“Responsible
Officer” means the chief executive officer, president, chief financial
officer, vice president, manager, treasurer or assistant treasurer of a Loan
Party (or any general partner, managing member or Person in a similar capacity
with respect thereto).  Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.


 


“Restricted
Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interest of the
Borrower or any Restricted Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit,
on account of the purchase, redemption, retirement, acquisition, cancellation
or termination of any such Equity Interest, or on account of any return of
capital to the Borrower’s stockholders, partners or members (or the equivalent
Person thereof).


 


“Restricted
Subsidiary” means each Subsidiary of the Borrower that is not an
Unrestricted Subsidiary.


 


“Risk
Management Policy” means the Risk Management Policy attached hereto as Exhibit
I, as the same may be revised, amended, supplemented, modified or replaced
from time to time (with any material revisions, amendments, supplements,
modifications or replacements being reasonably satisfactory to Administrative
Agent).


 


“Rollover
Date” means the first anniversary of the Closing Date if the conditions set
forth in Section 2.02 shall have been satisfied, or such later date as permitted
by Section 2.02.


 


“Rollover
Loan” has the meaning specified in Section 2.02.


 


“Rollover
Maturity Date” means, if the Rollover Date shall have occurred, the seventh
anniversary of the Closing Date.


 


“Rollover
Note” means a promissory note made by the Borrower in favor of a Lender, in
substantially the form of Exhibit C, issued by the Borrower to such
Lender in exchange for its Bridge Note.


 


“S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.


 


“Sarbanes-Oxley”
means the Sarbanes-Oxley Act of 2002.


 


“ScissorTail”
means ScissorTail Energy, LLC, a Delaware limited liability company.


 


“ScissorTail
Credit Facility” means that certain Amended and Restated Loan and Security
Agreement, dated as of May 30, 2002, as amended, among ScissorTail, Bank of
America, N.A. and the other lenders party thereto.


 


19





















 


“SEC”
means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.


 


“Security
Act” means the Security Act of 1933, as amended.


 


“Securities
Laws” means the Securities Act, the Securities Exchange Act of 1934,
Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards
and practices promulgated, approved or incorporated by the SEC or the Public
Company Accounting Oversight Board, as each of the foregoing may be amended and
in effect on any applicable date hereunder.


 


“Solvent”
and “Solvency” mean, with respect to any Person on a particular date,
that on such date both (a) (i) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (iii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay such debts
and liabilities as they mature, and (iv) such Person is not engaged in business
or a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute an unreasonably small capital,
and (b) such Loan Party is “solvent” within the meaning given that term and
similar terms under applicable laws relating to fraudulent transfers and
conveyances.  The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under Statement of Financial Accounting Standard No. 5).


 


“Southern
Dome” means Southern Dome, LLC, a Delaware limited liability company, in
which Borrower owns, directly or indirectly, a majority interest.


 


“SPC”
has the meaning specified in Section 10.06(h).


 


“Specified
Default” means any Event of Default under Section 8.01(a), (f) or (g).


 


“Subordinate
Documents” means those agreements, documents, instruments and writings at
any time delivered in connection with or evidencing Subordinated Debt, as
amended, supplemented or restated.


 


“Subordinated
Debt” means all Indebtedness of the Borrower and its Restricted
Subsidiaries on a consolidated basis for money borrowed (a) the structure,
amount, term, tenor and incurrence thereof is approved in writing by the
Required Lenders, (b) on terms and conditions less restrictive than the Loan
Documents, and (c) subordinated, upon terms satisfactory to the Administrative
Agent (which may include payment restrictions, restrictions on enforcement of
remedies, restrictions on amendment or modification of the terms and conditions
of such Indebtedness and restrictions on such creditor’s rights in insolvency
or bankruptcy proceedings), in right of payment to the payment in full in cash
of all Obligations.


 


20





















 


“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.  Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Borrower.


 


“Syndication
Information” means any written marketing materials, including all financial
information and data, and any information memorandum used by the Arranger in
connection with the syndication of the Bridge Facility.


 


“Synthetic
Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).


 


“Taxes”
means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.


 


“Threshold
Amount” means $5,000,000.


 


“Unfunded
Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan year.


 


“United
States” and “U.S.” mean the United States of America.


 


“Unrestricted
Subsidiary” means Estes Cove Facilities, L.L.C., Nueces Gathering, L.L.C.,
Southern Dome, Webb/Duval Gatherers, or any other Subsidiary of the Borrower
designated as such on Schedule 5.13 or which the Borrower has designated
in writing to the Administrative Agent to be an Unrestricted Subsidiary
pursuant to Section 7.18.


 


1.02        Other Interpretive
Provisions.  With
reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:


 


(a)           The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i)
any definition of or reference to any agreement, instrument or other document
(including any Organization Document) shall be construed as referring to such
agreement, instrument or other document as from time to time amended, supplemented
or


 


21





















 


otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall
be construed to include such Person’s successors and assigns, (iii) the words “herein,”
“hereof” and “hereunder,” and words of similar import when used
in any Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references in a
Loan Document to Articles, Sections, Exhibits and Schedules shall be construed
to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any Law shall
include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such Law and any reference to any Law or regulation
shall, unless otherwise specified, refer to such Law or regulation as amended,
modified or supplemented from time to time, and (vi) the words “asset”
and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.


 


(b)           In the computation of periods of time
from a specified date to a later specified date, the word “from” means “from
and including;” the words “to” and “until” each mean “to
but excluding;” and the word “through” means “to and including.”


 


(c)           Section headings herein and in the
other Loan Documents are included for convenience of reference only and shall
not affect the interpretation of this Agreement or any other Loan Document.


 


1.03        Accounting
Terms.


 


(a)           Generally.  All
accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial
ratios and other financial calculations) required to be submitted pursuant to
this Agreement shall be prepared in conformity with, GAAP applied on a
consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein.


 


(b)           Changes in GAAP.  If
at any time any change in GAAP would affect the computation of any financial
ratio or requirement set forth in any Loan Document, and either the Borrower or
the Required Lenders shall so request, the Administrative Agent, the Lenders
and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower
shall provide to the Administrative Agent and the Lenders financial statements
and other documents required under this Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.


 


(c)           Consolidation of Variable Interest
Entities.  All references herein to consolidated financial
statements of the Borrower and its Subsidiaries or to the determination of any
amount for the Borrower and its Subsidiaries on a consolidated basis or any
similar reference shall, in


 


22





















 


each case, be deemed to include each variable
interest entity that the Borrower is required to consolidate pursuant to FASB
Interpretation No. 46 — Consolidation of Variable Interest Entities: an
interpretation of ARB No. 51 (January 2003) as if such variable interest
entity were a Subsidiary as defined herein.


 


1.04        Rounding.  Any financial ratios required to be
maintained by the Borrower pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).


 


1.05        Times
of Day.  Unless
otherwise specified, all references herein to times of day shall be references
to Eastern time (daylight or standard, as applicable).


 


ARTICLE II.

THE BRIDGE FACILITY


 


2.01        The
Bridge Loans. 
(a) Subject to the terms and conditions set forth herein, each Lender
severally agrees to make a loan (each a “Bridge Loan”) to the Borrower
on the Closing Date in the amount of such Lender’s Commitment.  The Bridge Borrowing shall consist of Bridge
Loans made simultaneously by the Lenders in accordance with their respective
Applicable Percentage of the Bridge Facility. 
Amounts borrowed under this Section 2.01 and repaid or prepaid
may not be reborrowed.


 


(b)           Each Lender shall make the amount of
its Bridge Loan available to the Administrative Agent in immediately available
funds at the Administrative Agent’s Office not later than 1:00 p.m. on the
Closing Date.  Upon satisfaction of the
conditions set forth in Section 4.01, the Administrative Agent shall
make all funds so received available to the Borrower in like funds as received
by the Administrative Agent either by (i) crediting the account of the Borrower
on the books of Banc of America Bridge with the amount of such funds or (ii)
wire transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) the Administrative Agent by the
Borrower.


 


(c)           The Administrative Agent shall
promptly notify the Borrower and the Lenders of the interest rate applicable to
any Interest Period upon determination of such interest rate.


 


2.02        Conversion to Rollover
Loans.  (a) On
the Bridge Maturity Date, or such later date as permitted by the next sentence
of this Section 2.02(a), the Bridge Loans of each Lender shall
automatically be converted to a senior term loan maturing on the Rollover
Maturity Date (each, a “Rollover Loan”) if the following conditions
shall have been satisfied on such date: (i) no Default or Event of Default
shall have occurred and be continuing, (ii) all fees due to the Arranger and
the Lenders shall have been paid in full and (iii) the Administrative Agent
shall have received a certificate from a Responsible Officer of the Borrower
certifying to the foregoing and requesting a conversion of the Bridge Loans to
Rollover Loans (the “Conversion Notice”).  If the foregoing conditions shall not have
been satisfied on the Bridge Maturity Date, the Rollover Date shall not occur
unless and until (x) each Lender waives satisfaction of the foregoing
conditions, or (y) each Lender otherwise agrees.  The Borrower shall repay to the


 


23





















 


Administrative Agent for the ratable account
of the Lenders the aggregate principal amount of the Rollover Loans on the
Rollover Maturity Date.


 


(b)           Each Lender shall deliver its Bridge
Note to the Administrative Agent within three Business Days following delivery
of the Conversion Notice.  Not later than
the third Business Day after delivery of the Conversion Notice, the
Administrative Agent shall deliver each Bridge Note so delivered to it to the
Borrower for cancellation and the Borrower shall issue a replacement Rollover
Note to each Lender in an amount equal to the then outstanding principal amount
of such Lender’s Loan.


 


(c)           Upon the Rollover Date, the
obligations of the Borrower and each of its Subsidiaries under Section 7.21
shall be discharged and released and, thereafter, any failure to comply with Section
7.21 will not constitute a Default or Event of Default; provided, that,
notwithstanding the foregoing, if it is subsequently determined or discovered
that a Default under Section 8.0l(f) or (g) had occurred and was
continuing on the Rollover Date, (i) this Section 2.02(c) shall not be,
or be deemed to constitute, a waiver thereof, and (ii) each of the discharges,
release set forth in this Section 2.02(c) shall automatically be
rescinded and the provisions of Section 7.21 shall be reinstated and
apply to the Borrower and each of its Subsidiaries, in each case, as in effect
prior to giving effect to the release and modifications contemplated in this Section
2.02(c).


 


2.03        Option to Exchange
Rollover Loans for Exchange Notes; Exchange Notes Provisions.  (a) On any Business
Day on or after the Rollover Date, any Lender may elect to exchange all or any
portion of its Rollover Loan for one or more Exchange Notes by giving not less
than three Business Days’ prior irrevocable written notice of such election to
the Borrower, the Administrative Agent and the Exchange Note Trustee,
specifying the principal amount of its Rollover Loan to be exchanged (which
shall be at least $1,000,000 and integral multiples in excess thereof), the
name of the proposed registered holder and, subject to the terms of the
Exchange Note Indenture, the amount of each Exchange Note requested to be
issued (each such notice, an “Exchange Notice”).  Upon Lenders holding an aggregate principal
amount of the Rollover Loans in an amount equal to or greater than $42,500,000
having made such election, the Borrower shall issue Exchange Notes in exchange
for such Rollover Loans and any additional Rollover Loans elected to be
exchanged for Exchange Notes.  Any such
exchanging Lender shall deliver any Rollover Notes held by it evidencing the
amount of its Rollover Loan requested to be exchanged to the Administrative
Agent within three Business Days following delivery of an Exchange Notice.  Rollover Loans exchanged for Exchange Notes
pursuant to this Section 2.03 shall be deemed repaid and canceled and
the Exchange Notes so issued shall be governed by the provisions of the
Exchange Note Indenture.


 


(b)           Not later than the third Business Day
after delivery of an Exchange Notice:


 


(i)            the Administrative Agent shall
deliver each Rollover Note so delivered to it to the Borrower for cancellation
and, if applicable, the Borrower shall issue a replacement Rollover Note to
each exchanging Lender in an amount equal to the principal amount of such
Lender’s Rollover Loan that is not being exchanged, or the Administrative Agent
shall make a notation on the surrendered Rollover Note to the effect that a
portion of the Rollover Loan represented thereby has been repaid; and


 


24





















 


(ii)           the Administrative Agent shall
deliver the applicable Exchange Notes to the Exchange Note Trustee for
authentication and delivery to the holder or holders thereof specified in the
Exchange Notice.


 


(c)           Each Exchange Note issued pursuant to
this Section 2.03 shall continue to bear and accrue interest at the rate
per annum applicable to the
Rollover Loans until such rate per annum shall
become fixed in accordance with the terms of the Exchange Note Indenture, in
which case, the applicable rate per annum shall
be determined pursuant to the Exchange Note Indenture.  Unless otherwise provided in the Exchange
Note Indenture, accrued but unpaid interest on Rollover Loans through the date
of such exchange shall be paid on the date of such exchange, together with any
additional amounts required pursuant to Section 3.05, and the Exchange
Notes received in such exchange shall bear and accrue interest from and
including the date of issuance of such Exchange Note.


 


(d)           If the Covenant Release Date shall
have occurred, upon delivery of a Covenant Release Notice to the Administrative
Agent, (A) the obligations of the Borrower and each of its Subsidiaries under
each of the covenants set forth in Article VI and Article VII
shall be discharged and released and, thereafter, any failure to comply with
those covenants will not constitute a Default or Event of Default, (B)
concurrently with such discharge and release, each of the covenants set forth
in the Exchange Note Indenture applicable to the Borrower or the “Company”, the
“Issuer”, a “Guarantor”, a “Subsidiary” or a “Restricted Subsidiary” thereunder
shall automatically be incorporated herein by reference, and form a part
hereof, and shall automatically apply mutatis mutandis to the Borrower and each
of its Subsidiaries hereunder as if the Borrower were the “Company” or the “Issuer”
thereunder, each Guarantor were a “Guarantor” thereunder and each Subsidiary of
the Borrower were a “Subsidiary” and a “Restricted Subsidiary” or “Unrestricted
Subsidiary” of the Borrower, as applicable, thereunder and the Administrative
Agent were the “Trustee” or “Indenture Trustee” thereunder, and the Borrower
and each of its Subsidiaries shall be, and hereby agrees that it shall be,
bound by the terms of such covenants as if fully set forth herein, and (C) each
of the Events of Default set forth in Section 8.01 shall replaced in
their entirety with the events of default specified in the Exchange Notes
Indenture; provided, that, notwithstanding the foregoing, if it is subsequently
determined or discovered that a Default under Section 8.0l(f) or (g)
had occurred and was continuing at the time of delivery of the Covenant Release
Certificate, (x) such Default and any other Default then continuing shall
nonetheless be, and continue to constitute, a Default hereunder, which, for the
avoidance of doubt shall automatically be reinstated, and this Section
2.03(d) shall not be, or be deemed to constitute, a waiver thereof, and (y)
each of the discharges, releases, replacements and modifications set forth in clauses
(A), (B), (C) and (D) shall automatically be rescinded and the
provisions of Articles VI, VII and VIII shall be reinstated and
apply to the Borrower and each of its Subsidiaries or Restricted Subsidiaries,
as applicable, in each case, as in effect prior to giving effect to the
discharges, releases, replacements and modifications contemplated in this Section
2.03(d).


 


2.04        Prepayments.  (a) Optional.  The Borrower may, upon notice to the Administrative
Agent, at any time or from time to time voluntarily prepay Loans, in whole or
in part, without premium or penalty; provided that (i) such notice must
be received by the Administrative Agent not later than 11:00 a.m. three
Business Days prior to any date of prepayment of Eurodollar Rate Loans and (ii)
any prepayment of Eurodollar Rate Loans shall be


 


25





















 


in a principal amount of $1,000,000 or a
whole multiple of $500,000 in excess thereof or, if less, the entire principal
amount thereof then outstanding.  Each
such notice shall specify the date and amount of such prepayment.  The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s ratable portion of such prepayment (based on such Lender’s Applicable
Percentage).  If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.  Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest thereon, together with
any additional amounts required pursuant to Section 3.05.


 


(b)           Mandatory.
(i) If any Permanent Financing is issued or incurred, on the date any Loan
Party receives the Net Cash Proceeds of the issuance or incurrence of such
Permanent Financing, the Borrower shall immediately apply all such Net Cash
Proceeds to prepay the aggregate principal Outstanding Amounts under the Bridge
Facility and, thereafter, in accordance with Section 8.03.


 


(ii)           Upon
the sale or issuance by the Borrower of any of its Equity Interests (other than
any sales or issuances of Equity Interests by the Borrower to any directors,
officers or employees of the Borrower or any of its Subsidiaries), the Borrower
shall prepay an aggregate principal amount of Bridge Facility equal to 100% of
all Net Cash Proceeds received therefrom immediately upon receipt thereof.


 


(iii)          Upon
the incurrence or issuance by any Loan Party or any of its Subsidiaries of any
unsecured Indebtedness not permitted to be incurred or issued pursuant to Section
7.03, the Borrower shall prepay an aggregate principal amount of the Bridge
Facility equal to 100% of all Net Cash Proceeds received therefrom immediately
upon receipt thereof.


 


(c)           Change
of Control (i) Within 30 days after the occurrence of a Change of Control,
the Borrower shall either repay all obligations under the Credit Agreement or
obtain any required consents under the Credit Agreement to make the offer
described below (the “Change of Control Offer”).


 


(ii)           Upon
the occurrence of a Change of Control, each Lender will have the right to require
the Borrower to prepay all or any part of such Lender’s Loans pursuant to the
Change of Control Offer at a prepayment price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of prepayment (the “Change of Control Payment”).  Within 10 days following any Change of
Control, the Borrower will deliver a written notice (the “Change of Control
Notice”) to the Administrative Agent in the manner provided for notices in Section
10.02 and the Administrative Agent will promptly forward such Change of
Control Notice to each Lender in such manner. 
The Change of Control Notice shall describe the transaction or
transactions that constituted the Change of Control and offer to repay the
Loans on the date specified in such Change of Control Notice, which date shall
be no earlier than 30 days but no later than 60 days from the date of the
occurrence of the Change of Control (the “Change of Control Payment Date”),
pursuant to the procedures set forth below.


 


26





















 


(iii)          The
Change of Control Offer shall remain open from the time of mailing of the
Change of Control Notice until ten Business Days prior to the anticipated
Change of Control Payment Date.  The
Change of Control Notice shall contain all instructions and materials necessary
to enable the Lenders to elect to be prepaid pursuant to the Change of Control
Offer.  To accept the Change of Control
Offer, in whole or in part, a Lender shall notify the Borrower in writing (with
a copy to the Administrative Agent) in the manner provided for notices in Section
10.02 or as otherwise provided in the Change of Control Offer not later
than ten Business Days prior to the anticipated Change of Control Payment Date.


 


(iv)          On
the Change of Control Payment Date, the Borrower shall (A) make the Change of
Control Payment for each Loan (or portion thereof) elected to be repaid
pursuant to the Change of Control Offer by delivering the Change of Control
Payments to the Administrative Agent for transmittal to the applicable Lenders
(such delivery by the Borrower constituting the satisfaction of its obligations
to make such Change of Control Payments) and (B) deliver to each such Lender a
new Note (if requested) equal in principal amount (excluding premiums, if any)
to the unpurchased portion of the corresponding Note surrendered by such
Lender, if any.  Each Lender requesting a
new Note shall, as a condition to the issuance of a new Note deliver its
existing Note to the Borrower or to the Administrative Agent on the Borrower’s
behalf in which case the Administrative Agent shall deliver such Note to the
Borrower upon the Borrower’s issuance of the new Note.  The Administrative Agent will notify the
remaining Lenders of the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.


 


2.05        Reduction of
Commitments.  The aggregate
Commitments shall be automatically and permanently reduced to zero on the date
of the Bridge Borrowing.


 


2.06        Repayment of Bridge
Loans.  The Bridge Loans will mature
on the Bridge Maturity Date.  Subject to Section
2.02, the Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders the aggregate principal amount of the Bridge Loans on
the Bridge Maturity Date.


 


2.07        Interest.  (a) Subject to the provisions of Section
2.07(b), each Loan shall bear and accrue interest on the outstanding
principal amount thereof for each Interest Period at a rate equal to the
greater of (a) the Eurodollar Rate for such Interest Period (as determined
pursuant to Section 2.09) plus the Applicable Rate and (b) the Minimum
Rate in effect during such Interest Period; provided, that, except as
provided in Section 2.07(b), such interest shall not exceed a rate of
11.00% per annum; provided, further, that the portion, if any, of
any interest payable at a rate in excess of 10.50% per annum may be paid by
capitalizing such interest and adding it to the principal of such Loan.


 


(b)           Notwithstanding
the limitations set forth in Section 2.07(a):


 


(i)            upon
the occurrence and during the continuance of any Specified Default, the
Borrower shall pay interest on all outstanding Obligations under the Loan
Documents


 


27





















 


at a rate per annum equal to the Default Rate to the
fullest extent permitted by applicable Laws;


 


(ii)           if
a shelf registration statement shall not have been filed pursuant to Section
6.17(c) on or prior to the date that is 270 days after the Closing Date, the
Borrower shall pay additional interest on all outstanding Obligations under the
Loan Documents until the shelf registration shall have been filed at a rate per annum equal to (A) 0.25% per annum from and including the date that
is 271 days after the Closing Date to and excluding the date that is 360 days
after the Closing Date, (B) 0.50% per annum from
and including the date that is 360 days after the Closing Date to and excluding
the date that is 450 days after the Closing Date, (C) 0.75% per annum from and including the date that
is 450 days after the Closing Date to and excluding the date that is 540 days
after the Closing Date, and (D) 1.00% per
annum from and including the date that is 540 days after the Closing
Date to and excluding the date on which the shelf registration shall have been
filed;


 


(iii)          if
a shelf registration statement shall have been filed, but not declared
effective, pursuant to Section 6.17(c) on or prior to the date that is
450 days after the Closing Date, the Borrower shall pay additional interest on
all outstanding Obligations under the Loan Documents until the shelf
registration shall have been declared effective at a rate per annum equal to
0.25% per annum from and
including the date that is 451 days after the Closing Date to and excluding the
date on which the shelf registration shall have been declared effective; and


 


(iv)          if
the Offering Materials shall not have been completed and made available
pursuant to Section 6.16(a) on or prior to the date that is 60 days
after the Closing Date, the Borrower shall pay additional interest on all
outstanding Obligations; under the Loan Documents until the Offering Materials
shall have been completed and made available at a rate per annum equal to (A) 0.25% per annum from and including the date that
is 61 days after the Closing Date to and excluding the date that is 90 days
after the Closing Date, (B) 0.50% per annum from
and including the date that is 90 days after the Closing Date to and excluding
the date that is 180 days after the Closing Date, (C) 0.75% per annum from and including the date that
is 180 days after the Closing Date to and excluding the date that is 270 days
after the Closing Date, and (D) 1.00% per
annum from and including the date that is 270 days after the Closing
Date to and excluding the date on which the Offering Materials shall have been
completed and made available;


 


provided,
that (A) interest payable under clauses (i), (ii), (iii) and (iv) shall
be cumulative and not mutually exclusive, and (B) the aggregate rate per annum with respect to additional
interest payable pursuant to clauses (ii) and (iv) shall not exceed
1.00% per annum.


 


(c)           Interest
on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable
in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding with respect to the Borrower under any
Debtor Relief Law.


 


28





















 


2.08        Fees.  The Borrower shall pay to the Arranger
and the Administrative Agent for their own respective accounts fees in the
amounts and at the times specified in the Fee Letter.  The Borrower shall pay to the Administrative
Agent such fees as shall have been separately agreed upon in writing in the
amounts and at the times so specified. 
Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.


 


2.09        Computation of Interest
and Fees.  The Administrative Agent
shall determine the Eurodollar Rate no more than 3 Business Days, and no less
than 1 Business Day, prior to the Closing Date and thereafter, the first day of
each subsequent Interest Period.  Upon
such determination, the Administrative Agent shall notify the Borrower and each
Lender of such determination.  All
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.11(a), bear interest for one day.  Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding for
all purposes, absent manifest error.


 


2.10        Evidence
of Debt.  The Loans made by each
Lender shall be evidenced by one or more accounts or records maintained by such
Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Loans made by the Lenders to the Borrower and the interest
and payments thereon.  Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower hereunder to pay any amount owing with respect
to the Obligations.  In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent (set forth in the
Register) shall control in the absence of manifest error.  Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Bridge Note, which shall evidence such
Lender’s Bridge Loans in addition to such accounts or records.  Each Lender may attach schedules to its
Bridge Note and endorse thereon the date, amount and maturity of its Bridge
Loans and payments with respect thereto.


 


2.11        Payments Generally;
Administrative Agent’s Clawback.  (a)
General All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or
setoff.  Except as otherwise expressly
provided herein, all payments by the Borrower hereunder shall be made to the
Administrative Agent, for the account of the respective Lenders to which such
payment is owed, at the Administrative Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein.  The Administrative Agent will
promptly distribute to each Lender its Applicable Percentage (or other applicable
share as provided herein) of such payment in like funds as received by wire
transfer to such Lender’s Lending Office. 
All payments received by the Administrative Agent after 2:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue. 
If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the


 


29





















 


next following Business Day, and such
extension of time shall be included in computing interest or fees, as the case
may be.


 


(b)           (i)
Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have
received notice from a Lender prior to the Closing Date that such Lender will
not make available to the Administrative Agent such Lender’s share of the
Bridge Loans, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with Section 2.01 and
may, in reliance upon such assumption, make available to the Borrower a
corresponding amount.  In such event, if
a Lender has not in fact made its share of the Bridge Loans available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case
of a payment to be made by such Lender, the greater of the Federal Funds Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation and (B) in the case of a payment to be
made by the Borrower, the Minimum Rate. 
If the Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to the Borrower the amount of such interest paid by
the Borrower for such period.  If such
Lender pays its share of the Bridge Loans to the Administrative Agent, then the
amount so paid shall constitute such Lender’s Bridge Loans.  Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.


 


(ii)           Payments
by Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have
received notice from the Borrower prior to the time at which any payment is due
to the Administrative Agent for the account of the Lenders hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders the amount
due.  In such event, if the Borrower has
not in fact made such payment, then each of the Lenders severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender, in immediately available funds with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of
the Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.


 


A notice of
the Administrative Agent to any Lender or the Borrower with respect to any
amount owing under this subsection (b) shall be conclusive, absent manifest
error.


 


(c)           Failure
to Satisfy Conditions Precedent.  If
any Lender makes available to the Administrative Agent funds for any Bridge
Loan to be made by such Lender as provided in the foregoing provisions of this Article
II, and such funds are not made available
to the Borrower by the Administrative Agent because the conditions to the
borrowing of Bridge Loans set forth in Article IV are not satisfied or
waived in accordance with the terms hereof, the Administrative


 


30





















 


Agent shall return such funds (in like funds
as received from such Lender) to such Lender, without interest.


 


(d)           Obligations
of Lenders Several.  The obligations
of the Lenders hereunder to make Bridge Loans and to make payments pursuant to Section
10.04(c) are several and not joint. 
The failure of any Lender to make any Bridge Loan or to make any payment
under Section 10.04(c) on any date required hereunder shall not relieve
any other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Bridge Loan or to make its payment under Section 10.04(c).


 


(e)           Funding
Source.  Nothing herein shall be
deemed to obligate any Lender to obtain the funds for any Loan in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan in any particular place or
manner.


 


(f)            Insufficient
Payment.  Whenever any payment
received by the Administrative Agent under this Agreement or any of the other
Loan Documents is insufficient to pay in full all amounts due and payable to
the Administrative Agent and the Lenders under or in respect of this Agreement
and the other Loan Documents on any date, such payment shall be distributed by
the Administrative Agent and applied by the Administrative Agent and the
Lenders in the order of priority set forth in Section 8.03.


 


2.12        Sharing of Payments by
Lenders.  If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of the Loans made by it held by
it resulting in such Lender’s receiving payment of a proportion of the
aggregate amount of such Loans or participations and accrued interest thereon
greater than its pro rata share thereof of Bridge Facility as provided herein,
then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on the Outstanding Amount of their
respective Loans and other amounts owing them, provided that:


 


(i)            if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and
the purchase price restored to the extent of such recovery, without interest;
and


 


(ii)           the
provisions of this Section shall not be construed to apply to (A) any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or (B) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary thereof (as to which
the provisions of this Section shall apply).


 


Each Loan Party consents to the foregoing and agrees, to the extent it
may effectively do so under applicable Law, that any Lender acquiring a participation
pursuant to the foregoing


 


31





















 


arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Loan
Party in the amount of such participation.


 


ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY


 


3.01        Taxes.


 


(a)           Payments
Free of Taxes.  Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrower shall be required by
applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender,
as the case may be, receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall timely pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable Law.


 


(b)           Payment
of Other Taxes by the Borrower.  Without limiting the provisions
of subsection (a) above, the Borrower shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable Law.


 


(c)           Indemnification
by the Borrower.  The Borrower shall indemnify the Administrative
Agent and each Lender, within 10 days after demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) paid by the Administrative Agent or such Lender, as the case may
be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender (with
a copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest error.


 


(d)           Evidence
of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.


 


(e)           Status
of Lenders.  Each Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the Law of the jurisdiction in which
the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable Law or reasonably


 


32





















 


requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation
prescribed by applicable Law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable Law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements.


 


Without
limiting the generality of the foregoing, in the event that the Borrower is
resident for tax purposes in the United States, each Foreign Lender shall
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:


 


(i)            duly
completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States is a party,


 


(ii)           duly
completed copies of Internal Revenue Service Form W-8ECI,


 


(iii)          in
the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a holder of ten percent (10%) or more of
the capital or profit interests of the Borrower within the meaning of section
871(h)(3)(B) of the Code, or (C) a “controlled foreign corporation” described
in section 881(c)(3)(C) of the Code and (y) duly completed copies of  Internal Revenue Service Form W-8BEN, or


 


(iv)          any
other form prescribed by applicable Law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable Law to
permit the Borrower to determine the withholding or deduction required to be
made.


 


(f)          United
States Lenders.  Upon request of the
Borrower or the Administrative Agent, a Lender that is a United States person
within the meaning of Section 7701(a)(30) of the Code shall deliver to such
requesting party (in such number of copies as shall be requested thereby) duly
completed copies of Internal Revenue Service Form W-9, or any successor or
other applicable form.


 


(g)           Treatment
of Certain Refunds.  If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section, it shall pay to the Borrower an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section with respect to the Taxes or Other Taxes giving
rise to such refund),


 


33





















 


net of all out-of-pocket expenses of the
Administrative Agent or such Lender, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund), provided that the Borrower, upon the request of
the Administrative Agent, or such Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. 
This subsection shall not be construed to require the Administrative Agent
or any Lender to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other
Person.


 


3.02        Illegality.  If any Lender determines that any Change
in Law has made it unlawful, or that any Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable Lending Office to make,
maintain or fund Eurodollar Rate Loans, or to determine or charge interest
rates based upon the Eurodollar Rate, or any Governmental Authority has imposed
material restrictions on the authority of such Lender to purchase or sell, or
to take deposits of, Dollars in the London interbank market, then, on notice
thereof by such Lender to the Borrower through the Administrative Agent, any
obligation of such Lender to make or continue Eurodollar Rate Loans shall be
suspended until such Lender notifies the Administrative Agent and the Borrower
that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrower
shall, upon demand from such Lender (with a copy to the Administrative Agent),
prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to
Loans bearing interest at the Minimum Rate in effect at such time, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate
Loans.  Upon any such prepayment or conversion,
the Borrower shall also pay accrued interest on the amount so prepaid or
converted.


 


3.03        Inability to Determine
Rates.  If the Required Lenders
determine that for any reason in connection with any Eurodollar Rate Loans that
(a) Dollar deposits are not being offered to banks in the London interbank
eurodollar market for the applicable amount and Interest Period of such
Eurodollar Rate Loans, (b) adequate and reasonable means do not exist for
determining the Eurodollar Rate
for any Interest Period with respect to a Eurodollar Rate Loan, or (c) the Eurodollar Rate for any Interest
Period with respect to a Eurodollar Rate Loan does not adequately and fairly
reflect the cost to such Lenders of funding such Loan, the Administrative Agent
will promptly so notify the Borrower and each Lender.  In such event, the rate of interest for the
applicable Interest Period shall be the Minimum Rate in effect at such
time.  Thereafter, the obligation of the
Lenders to make or continue Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice.


 


3.04        Increased Costs; Reserves
on Eurodollar Rate Loans.


 


(a)           Increased
Costs Generally.  If any Change in
Law shall:


 


(i)            impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with


 


34





















 


or for the account of, or credit extended or
participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e));


 


(ii)           subject
any Lender to any tax of any kind whatsoever with respect to this Agreement or
any Eurodollar Rate Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Indemnified Taxes or
Other Taxes covered by Section 3.01 and the imposition of, or any
change in the rate of, any Excluded Tax payable by such Lender); or


 


(iii)          impose
on any Lender or the London interbank market any other condition, cost or
expense affecting this Agreement or Eurodollar Rate Loans made by such Lender;


 


and the result
of any of the foregoing shall be to increase the cost to such Lender of making
or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to
make any such Loan), or to reduce the amount of any sum received or receivable
by such Lender hereunder (whether of principal, interest or any other amount)
then, upon request of such Lender, the Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.


 


(b)           Capital
Requirements.  If any Lender determines that any Change in Law
affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s capital or on the
capital of such Lender’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by such Lender to a
level below that which such Lender or such Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such Lender’s
holding company for any such reduction suffered.


 


(c)           Certificates
for Reimbursement.  A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company,
as the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.


 


(d)           Delay
in Requests.  Failure or delay on the part of any Lender to
demand compensation pursuant to the foregoing provisions of this Section shall
not constitute a waiver of such Lender’s right to demand such compensation, provided
that the Borrower shall not be required to compensate a Lender pursuant to the
foregoing provisions of this Section for any increased costs incurred or reductions
suffered more than nine months prior to the date that such Lender notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s intention to claim compensation therefor (except that, if
the Change in Law giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to
include the period of retroactive effect thereof).


 


35





















 


(e)           Reserves
on Eurodollar Rate Loans.  The
Borrower shall pay to each Lender, as long as such Lender shall be required to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each
Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive absent manifest error), which shall be due
and payable on each date on which interest is payable on such Loan, provided
the Borrower shall have received at least 10 days’ prior notice (with a copy to
the Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice 10 days
prior to the relevant Interest Payment Date, such additional interest shall be
due and payable 10 days from receipt of such notice.


 


3.05        Compensation for
Losses.  Upon demand of any Lender (with
a copy to the Administrative Agent) from time to time, the Borrower shall
promptly compensate such Lender for and hold such Lender harmless from any
loss, cost or expense incurred by it as a result of:


 


(a)           any
continuation, conversion, payment or prepayment of any Loan on a day other than
the last day of the Interest Period for such Loan (whether voluntary,
mandatory, automatic, by reason of acceleration, or otherwise);


 


(b)           any
failure by the Borrower (for a reason other than the failure of such Lender to
make a Loan) to prepay, borrow, continue or convert any Loan on the date or in
the amount notified by the Borrower; or


 


(c)           any assignment of a Eurodollar Rate Loan on a
day other than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 10.13;


 


including any
loss of anticipated profits and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were
obtained.  The Borrower shall also pay
any customary administrative fees charged by such Lender in connection with the
foregoing.


 


For purposes
of calculating amounts payable by the Borrower to the Lenders under this Section 3.05,
each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it
at the Eurodollar
Rate for such Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Loan was in fact so funded.


 


3.06        Mitigation Obligations;
Replacement of Lenders.


 


(a)           Designation
of a Different Lending Office.  If
any Lender requests compensation under Section 3.04, or the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01,
or if any Lender gives a notice pursuant to Section 3.02, then such
Lender shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need


 


36





















 


for the notice pursuant to Section 3.02,
as applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.  The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.


 


(b)           Replacement
of Lenders.  If any Lender requests compensation under Section 3.04,
or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 3.01
or if any Lender gives a notice pursuant to Section 3.02, the Borrower
may replace such Lender in accordance with Section 10.13.


 


3.07        Survival.  All of the Borrower’s obligations under
this Article III shall survive termination of the Aggregate Commitments
and repayment of all other Obligations hereunder.


 


ARTICLE IV.

CONDITIONS PRECEDENT TO BRIDGE LOANS


 


4.01        Conditions Precedent to
Bridge Loans.  The obligation of each
Lender to make its Bridge Loan hereunder is subject to satisfaction of the
following conditions precedent:


 


(a)           The
Administrative Agent’s receipt of the following, each of which shall be
originals or telecopies (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and each of the Lenders:


 


(i)            executed
counterparts of this Agreement and the Guaranty, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;


 


(ii)           a
Bridge Note executed by the Borrower in favor of each Lender requesting a
Bridge Note;


 


(iii)          such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Agreement and the other Loan Documents to which
such Loan Party is a party;


 


(iv)          such
documents and certifications as the Administrative Agent may reasonably require
to evidence that each Loan Party is duly organized or formed, and that each of
the Borrower and each Guarantor is validly existing, in good standing and
qualified to engage in business in each jurisdiction required by Section
5.01;


 


(v)           favorable
opinions of Vinson & Elkins LLP, counsel to the Loan Parties, addressed to
the Administrative Agent and each Lender, as to the matters set forth in Exhibit G
and such other matters concerning the Loan Parties and the Loan Documents as
the Required Lenders may reasonably request;


 


37





















 


(vi)          a
certificate of a Responsible Officer of the Borrower either (A) attaching
copies of all consents, licenses and approvals required in connection with the
execution, delivery and performance by any Loan Party and the validity against
any such Loan Party of the Loan Documents to which it is a party, and such
consents, licenses and approvals shall be in full force and effect, or (B)
stating that no such consents, licenses or approvals are so required;


 


(vii)         the
Initial Financial Statements;


 


(viii)        a
certificate signed by a Responsible Officer of the Borrower certifying
(A) that the representations and warranties of the Borrower and each other
Loan Party contained in Article V or any other Loan Document are true
and correct in all material respects on and as of the Closing Date, except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct in all material
respects as of such earlier date, (B) that no Default exists, or would result
from such the Bridge Loans or from the application of the proceeds thereof; (C)
that there has been no event or circumstance since the date of the Audited
Financial Statements that has had or could be reasonably expected to have,
either individually or in the aggregate, a Material Adverse Effect;
(D) that, after giving effect to the Indebtedness (including all letters
of credit issued or deemed issued thereunder) incurred by the Borrower under
the Credit Agreement on the Closing Date, the Borrower could borrow at least an
additional $75,000,000 under the Credit Agreement, and (E) that
contemporaneously with the making of the Bridge Loans, the Borrower shall
receive gross proceeds of at least $175,000,000 from the issuance of Equity
Interests;


 


(ix)          evidence that all
insurance required to be maintained pursuant to the Loan Documents has been
obtained and is in effect;


 


(x)           documents,
in form and substance reasonably satisfactory to Administrative Agent,
assigning the Indebtedness and Liens under the Comerica Credit Facility and the
ScissorTail Credit Facility to the Credit Facility Agent on the Closing Date,
and confirming the termination of such credit facilities;


 


(xi)          a
report summarizing all Hedging Contracts entered into by the Borrower or any
Restricted Subsidiary and in effect as of the Closing Date, which Hedging
Contracts shall be sufficient to mitigate Borrower’s and Restricted
Subsidiaries’ commodity price risk as of the Closing Date as determined by
Administrative Agent;


 


(xii)         a
certificate from a Responsible Officer of the Borrower, in substantially the
form of Exhibit H hereto, attesting to the Solvency of each Loan Party
before and after giving effect to the transactions contemplated by this
Agreement and the Acquisition Documents;


 


(xiii)        a
certificate from a Responsible Officer of the Borrower (A) attaching forecasts,
in form reasonably satisfactory to the Administrative Agent, of income
statements for the fiscal quarter ending December 31, 2005 and for each year
commencing with the first fiscal year of the Borrower following the Closing
Date


 


38





















 


through the fifth anniversary of the Closing
Date, (B) certifying that (1) the pro forma Consolidated EBITDA (calculated
giving pro forma effect to the Acquisition) for the twelve months ended March
31, 2005 was not less than $72,000,000, (2) the pro forma Consolidated Total
Leverage Ratio (calculated giving pro forma effect to the Acquisition) for the
twelve months ended March 31, 2005 was not greater than 5.9 to 1.0, and (3)
such pro forma financial statements and forecasts were prepared in good faith
on the basis of assumptions that were fair in light of then existing conditions
(subject to the proviso that it is understood that such pro forma financial
statements and forecasts are necessarily based upon professional opinions,
estimates and projections and that the Borrower does not warrant that such
opinions, estimates and projections will ultimately prove to have been accurate),
and (C) certifying (prior to giving effect to the Acquisition) as to matters
that would be required by Section 302 of Sarbanes-Oxley;


 


(xiv)        a
copy of each Acquisition Document, together with a certificate from the
Responsible Officer of the Borrower certifying that (A) such copies are
accurate and complete and represent the complete understanding and agreement of
the parties thereto, (B) no material right or obligation of any party thereto
has been modified, amended or waived, except as otherwise disclosed in such
certificate, (C) the Borrower has obtained all approvals (if any) required
pursuant to the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as
amended, or the waiting period with respect thereto has expired, and (D)
subject only to the contemporaneous funding of the Bridge Borrowing to be made
hereunder and the incurrence on the Closing Date of Indebtedness under the
Credit Agreement, the Acquisition has been consummated on the terms set forth
in such Acquisition Documents; and


 


(xv)         such
other assurances, certificates, documents, consents or opinions as the
Administrative Agent or the Required Lenders reasonably may require.


 


(b)           The
Acquisition shall have been contemporaneously completed pursuant to the terms
of the Acquisition Documents, and as a result thereof, the Acquisition
Subsidiary shall have directly or indirectly acquired good title to all of the
Equity Interests contemplated to be transferred by the Acquisition Documents,
free and clear of all liens except Liens permitted under Section 7.01.


 


(c)           The
transactions contemplated by the Credit Agreement shall have been
contemporaneously consummated upon terms and conditions satisfactory to the
Administrative Agent.


 


(d)           Any
fees required to be paid by the Borrower to the Administrative Agent, the
Arranger and the Lenders on or before the Closing Date shall have been paid.


 


Without
limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.


 


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ARTICLE V.

REPRESENTATIONS AND WARRANTIES


 


The Borrower
represents and warrants to the Administrative Agent and the Lenders that:


 


5.01        Existence,
Qualification and Power; Compliance with Laws. 
Each Loan Party (a) is duly organized or formed, validly existing
and in good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own or
lease its assets and carry on its business and (ii) execute, deliver and
perform its obligations under the Loan Documents to which it is a party,
(c) is duly qualified and is licensed and in good standing under the Laws
of each jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification or license, and (d) is
in compliance with all Laws applicable to it; except in each case referred to
in clause (b)(i), (c) or (d), to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect.


 


5.02        Authorization; No
Contravention.  The execution,
delivery and performance by each Loan Party of each Loan Document to which such
Person is party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or any of its
Restricted Subsidiaries or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject; or (c) violate any Law. 
Each Loan Party is in compliance with all Contractual Obligations
referred to in clause (b)(i), except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect.


 


5.03        Governmental Authorization;
Other Consents.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document or any
Acquisition Document.


 


5.04        Binding Effect.  This Agreement has been, and each other
Loan Document, when delivered hereunder, will have been, duly executed and
delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is
party thereto in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other Laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at Law.


 


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5.05        Financial Statements; No
Material Adverse Effect; No Internal Control Event.


 


(a)           The
Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present in all material respects the
financial condition of the Borrower and its Subsidiaries as of the date thereof
and their results of operations for the period covered thereby in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show all material indebtedness and
other liabilities, direct or contingent, of the Borrower and its Subsidiaries
as of the date thereof, including liabilities for taxes and Indebtedness.


 


(b)           The
unaudited consolidated balance sheets of the Borrower and its Subsidiaries
dated March 31, 2005, and the related consolidated statements of income or
operations, members’ capital and cash flows for the fiscal quarter ended on
that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.  Schedule 5.05 sets
forth all material indebtedness and other liabilities, direct or contingent, of
the Borrower and its consolidated Subsidiaries as of the date hereof, including
liabilities for taxes and Indebtedness, not disclosed in the Initial Financial
Statements.


 


(c)           Since
the date of the Audited Financial Statements, there has been no event or
circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.


 


(d)           Since
the date of the Audited Financial Statements, no Internal Control Event has
occurred.


 


(e)           The
consolidated pro forma balance sheet of the Borrower and its Restricted
Subsidiaries as at March 31, 2005 (taking into account the Acquisition), and
the related consolidated pro forma statements of income of the Borrower and its
Restricted Subsidiaries for the period covered thereby, certified by the chief
financial officer of the Borrower, copies of which have been furnished to each
Lender, fairly present in all material respects the consolidated pro forma
financial condition of the Borrower and its Restricted Subsidiaries (after
giving effect to the Acquisition) as at such date and the consolidated pro
forma results of operations of the Borrower and its Restricted Subsidiaries for
the period ended on such date, all in accordance with GAAP.


 


5.06        Litigation.  There
are no actions, suits, investigations, proceedings, claims or disputes pending
or, to the knowledge of the Borrower after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against the Borrower or any of its Restricted
Subsidiaries or against any of their properties or revenues that (a) purport to
affect or pertain to this Agreement or any other Loan Document, or the
extensions of credit contemplated hereby, (b) purport to affect or pertain to
the


 


41





















 


Acquisition or any Acquisition Document, or
(c) either individually or in the aggregate, if determined adversely,
could reasonably be expected to have a Material Adverse Effect.


 


5.07        No Default.  Neither the Borrower nor any Restricted
Subsidiary is in default under or with respect to any Contractual Obligation
that could, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.  No
Default has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Loan Document.


 


5.08        Ownership of Property;
Liens.  Each of the Borrower and each
Restricted Subsidiary has good record and marketable title to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  The property of the
Borrower and its Restricted Subsidiaries is subject to no Liens, other than
Liens permitted by Section 7.01.


 


5.09        Environmental
Compliance.  The Borrower and its
Restricted Subsidiaries periodically conduct in the ordinary course of business
a review of the effect of existing Environmental Laws and claims alleging
potential liability or responsibility for violation of any Environmental Law on
their respective businesses, operations and properties, and as a result thereof
the Borrower has reasonably concluded that, except as specifically disclosed in
Schedule 5.09, such Environmental Laws and claims could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.


 


5.10        Insurance.  The properties of the Borrower and its
Restricted Subsidiaries are insured with financially sound and reputable
insurance companies not Affiliates of the Borrower, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower or the applicable Restricted Subsidiary operates.


 


5.11        Taxes.  The Borrower and its Subsidiaries have
filed all Federal, state and other material tax returns and reports required to
be filed, and have paid all Federal, state and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those
which are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in accordance with
GAAP.  There is no proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect.  Neither any
Loan Party nor any Subsidiary thereof is party to any tax sharing agreement.


 


5.12        ERISA
Compliance.


 


(a)           Each
Plan is in compliance in all material respects with the applicable provisions
of ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from
the IRS or an application for such a letter is currently being processed by the
IRS with respect thereto and, to the best knowledge of the Borrower, nothing
has occurred which would prevent, or cause the loss of, such qualification.  The Borrower and each ERISA Affiliate have
made all required


 


42





















 


contributions to each Plan subject to Section
412 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.


 


(b)           There
are no pending or, to the best knowledge of the Borrower, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan that could reasonably be expected to have a Material Adverse
Effect.  There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.


 


(c)           (i)  No
ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension
Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA
with respect to a Multiemployer Plan; and (v) neither the Borrower nor any
ERISA Affiliate has engaged in a transaction that could be subject to Sections
4069 or 4212(c) of ERISA.


 


5.13        Subsidiaries; Equity
Interests.  The Borrower has no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule
5.13, and all of the outstanding Equity Interests in such Subsidiaries have
been issued and are owned by a Loan Party in the amounts specified on Part (a)
of Schedule 5.13 free and clear of all Liens other than Liens permitted
under Section 7.01.  The Borrower
has no equity investments in any other corporation or entity other than those
specifically disclosed in Part (b) of Schedule 5.13.  Schedule 5.13 identifies each
Subsidiary as either Restricted or Unrestricted, its state of organization, and
its organizational identification number, and each Restricted Subsidiary on
such schedule is a wholly-owned Subsidiary.


 


5.14        Margin Regulations;
Investment Company Act; Public Utility Holding Company Act.


 


(a)           The
Borrower is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock.


 


(b)           None
of the Borrower, any Person Controlling the Borrower, or any Subsidiary (i) is
a “holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate”
of a “holding company” or of a “subsidiary company” of a “holding company,”
within the meaning of the Public Utility Holding Company Act of 1935, or (ii) is
or is required to be registered as an “investment company” under the Investment
Company Act of 1940.


 


5.15        Disclosure.  The Borrower has disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate
or other restrictions to which it or any of its Restricted Subsidiaries is
subject, and all other matters known to it, that, individually or in the


 


43





















 


aggregate, could reasonably be expected to
result in a Material Adverse Effect.  No
report, financial statement, certificate or other written information
furnished, including Syndication Information, by or on behalf of any Loan Party
to the Arranger, the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document or the syndication of the
Bridge Facility (in each case, as modified or supplemented by other information
so furnished) contains any misstatement of fact or omits to state any fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not materially misleading with respect to the
Borrower and its Restricted Subsidiaries and their operations, business and
properties, taken as a whole; provided that, with respect to projected
financial information, the Borrower represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.  The Offering Materials, when
completed, for any Permanent Financing will not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances in which they are made, not
materially misleading.


 


5.16        Compliance with Laws.  Each of the Borrower and each Restricted
Subsidiary is in compliance in all material respects with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such requirement of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.


 


5.17        Intellectual Property;
Licenses, Etc.  The Borrower and its
Restricted Subsidiaries own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other
Person.  To the best knowledge of the
Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or any Restricted Subsidiary infringes upon any rights
held by any other Person.  No claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of the Borrower, threatened, which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.


 


5.18        Labor Disputes and Acts of
God.  Neither the business
nor the properties of any Loan Party has been affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), which could reasonably be expected to
have a Material Adverse Effect.


 


5.19        Solvency.  Upon giving effect to the execution of
this Agreement and the other Loan Documents by the Borrower and each Guarantor
that is a party thereto, the consummation of the transactions contemplated
hereby and thereby, the consummation of the transactions


 


44





















 


contemplated by the Credit Agreement and the
incurrence of Indebtedness thereunder and the consummation of the Acquisition,
the Borrower and each Guarantor will be Solvent.


 


5.20        Acquisition
Closing.


 


(a)           After
giving effect to the Acquisition, all representations and warranties made by
any Loan Party in any Loan Document will be true and correct in all material
respects on and as of the Closing Date.


 


(b)           On
the Closing Date, each of the representations and warranties made by any party
in the Acquisition Documents is true and correct in all material respects,
other than with respect to those matters of which a Responsible Officer has
obtained knowledge thereof following the Closing Date, which the Borrower
reasonably believes do not result in an aggregate diminution in value of the
assets and properties acquired pursuant to the Acquisition in an amount in
excess of escrowed funds under the Acquisition Agreement that will be disbursed
to the Borrower as a result thereof; and none of such parties has failed to
perform any material obligation or covenant required by the Acquisition
Documents to be performed or complied with by it on or before the Closing
Date.  Simultaneously with the making of
the Bridge Loans on the Closing Date, the Acquisition will have been consummated
in compliance with the material terms and conditions of the Acquisition
Documents and all conditions precedent to such consummation will be fully
satisfied or waived.


 


ARTICLE VI.

AFFIRMATIVE COVENANTS


 


So long as any
Lender shall have any Commitment hereunder, or any Loan or other Obligation hereunder
shall remain unpaid or unsatisfied, the Borrower shall, and shall (except in
the case of the covenants set forth in Sections 6.01, 6.02,
and 6.03) cause each Restricted Subsidiary (as applicable) to:


 


6.01        Financial Statements.  Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:


 


(a)           as
soon as available, but in any event within 90 days after the end of each fiscal
year of the Borrower, a consolidated balance sheet of the Borrower and its
Subsidiaries (with consolidating balance sheets breaking out (i) the Borrower
and its Subsidiaries, excluding (x) ScissorTail and its Subsidiaries (if any)
and (y) any Unrestricted Subsidiaries described in clause (iii) below, (ii)
ScissorTail and its Subsidiaries (if any), and (iii) to the extent included in
such consolidated balance sheet, Unrestricted Subsidiaries with aggregate
assets in excess of $1,000,000), as at the end of such fiscal year, and the
related consolidated and consolidating
statements of income or operations and members’ capital (or other form of
owners’ equity) and consolidated cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be
audited and accompanied by (i) a report and opinion of a Registered Public
Accounting Firm of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and applicable Securities Laws and shall
not be subject to


 


45





















 


any “going concern” or like qualification or
exception or any qualification or exception as to the scope of such audit and
(ii) an attestation report of such Registered Public Accounting Firm as to the
Borrower’s internal controls pursuant to Section 404 of Sarbanes-Oxley that
does not identify any material weaknesses or scope limitations, other than (1)
scope limitations related to acquisitions by the Borrower or the Restricted
Subsidiaries that are effected during the period covered by the attestation
report or (2) material weaknesses or scope limitations to which the Required
Lenders do not object; and such
consolidating statements to be certified by a Responsible Officer of the
Borrower to the effect that such statements are fairly stated in all material
respects when considered in relation to the consolidated financial statements
of the Borrower and its Subsidiaries; and


 


(b)           as
soon as available, but in any event within 45 days (or, with respect to the
fiscal quarter ending September 30, 2005, 60 days) after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower (commencing with the fiscal quarter ended
September 30, 2005), a consolidated balance sheet of the Borrower and
its Subsidiaries (with consolidating balance sheets breaking out (i) the
Borrower and its Subsidiaries, excluding (x) ScissorTail and its Subsidiaries
(if any) and (y) Unrestricted Subsidiaries described in clause (iii) below,
(ii) ScissorTail and its Subsidiaries (if any) and (iii) to the extent included
in such consolidated balance sheet, Unrestricted Subsidiaries with aggregate
assets in excess of $1,000,000), as at the end of such fiscal quarter, and the
related consolidated and consolidating
statements of income or operations and members’ capital (or other form of
owners’ equity) and consolidated cash flows for such fiscal quarter and for the
portion of the Borrower’s fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail, such
consolidated statements to be certified by a Responsible Officer of the
Borrower as fairly presenting in all material respects the financial condition,
results of operations, members’ capital (or other owners’ equity) and cash
flows of the Borrower and its Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes and such consolidating statements to be
certified by a Responsible Officer of the Borrower to the effect that such
statements are fairly stated in all material respects when considered in
relation to the consolidated financial statements of the Borrower and its
Subsidiaries.


 


As to any information
contained in materials furnished pursuant to Section 6.02(d), the
Borrower shall not be separately required to furnish such information under
clause (a) or (b) above, but the foregoing shall not be in derogation of the
obligation of the Borrower to furnish the information and materials described
in clauses (a) and (b) above at the times specified therein.


 


6.02        Certificates; Other
Information.  Deliver to the
Administrative Agent, in form and detail reasonably satisfactory to the
Administrative Agent and the Required Lenders:


 


(a)           concurrently
with the delivery of the financial statements referred to in Section 6.01(a),
the audit report and opinion referred to therein;


 


(b)           concurrently
with the delivery of the financial statements referred to in Sections 6.01(a)
and (b),
a duly completed Compliance Certificate signed by a Responsible Officer of the
Borrower;


 


46





















 


(c)           promptly
after any request by the Administrative Agent or any Lender, copies of any
detailed audit reports, management letters or recommendations submitted to the
board of directors (or the audit committee of the board of directors) of the
Borrower by independent accountants in connection with the accounts or books of
the Borrower or any Subsidiary, or any audit of any of them;


 


(d)           promptly
after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the members of the Borrower,
and copies of all annual, regular, periodic and special reports and
registration statements which the Borrower has filed with the SEC under Section
13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required
to be delivered to the Administrative Agent pursuant hereto;


 


(e)           promptly
after the furnishing thereof, copies of any statement or report furnished to
any holder of debt securities of any Loan Party or any Restricted Subsidiary
thereof pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders pursuant to
Section 6.01 or any other clause of this Section 6.02;


 


(f)            promptly,
and in any event within five Business Days after receipt thereof by any Loan
Party, copies of each notice or other correspondence received from the SEC (or
comparable agency in any applicable non-U.S. jurisdiction) concerning any
investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of any Loan Party or any
Subsidiary thereof;


 


(g)           promptly
upon the occurrence thereof, notice of any acquisition or divestiture by the
Borrower or any of its Restricted Subsidiaries of any assets or properties in
excess of $5,000,000;


 


(h)           promptly
upon its becoming available, copies of all notices or documents received by the
Borrower or any other Loan Party pursuant to any Material Contract alleging a
material default or nonperformance by such Person thereunder or terminating or
suspending any such Material Contract;


 


(i)            as
soon as available, and in any event within 60 days after the end of each fiscal
year, a financial plan for the Borrower (in form reasonably satisfactory to the
Administrative Agent), prepared or caused to be prepared by a Responsible
Officer of the Borrower, setting forth for the then calendar year and financial
projections for the Borrower;


 


(j)            concurrently
with the annual renewal of the Loan Parties’ insurance policies, if requested
by the Administrative Agent, a certificate of insurance showing all insurance
required to be maintained pursuant to the Loan Documents has been obtained and
is in effect; and


 


(k)           promptly,
such additional information regarding the business, financial or corporate
affairs of the Borrower or any Subsidiary, or compliance with the terms of the
Loan Documents, as the Administrative Agent or any Lender may from time to time
reasonably request.


 


Documents
required to be delivered pursuant to Section 6.01(a) or (b)
or Section 6.02(d) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on


 


47





















 


the date (i)
on which the Borrower posts such documents, or provides a link thereto on the
Borrower’s website on the Internet at the website address listed on Schedule
10.02, or (ii) on which such documents are posted on the Borrower’s behalf
on an Internet or intranet website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); or (iii) on which Borrower provides
to the Administrative Agent by electronic mail electronic versions (i.e.,
soft copies) of such documents (delivery of the Compliance Certificates
required to be delivered pursuant to Section 6.02(d) also being deemed
delivered on such date if included within such electronic mail under this
clause (iii)); provided, the Borrower shall upon the request of
Administrative Agent provide to the Administrative Agent paper copies of any
such electronically delivered Compliance Certificates); provided further,
that the Borrower shall notify the Administrative Agent (by telecopier or
electronic mail) of the posting of any such documents pursuant to clause (i) or
(ii) above and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents, and
Administrative hereby agrees that it shall use reasonable commercial efforts to
post such documents received pursuant to this clause (iii) on the Borrower’s
behalf to a commercial, third-party or other website sponsored by the
Administrative Agent and notify the Lenders of such posting.  Except as expressly provided in the foregoing
clause (iii) the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Borrower with
any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.


 


The Borrower hereby acknowledges that (a) the Administrative Agent
and/or the Arranger will make available to the Lenders materials and/or
information provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with
respect to the Borrower or its securities) (each, a “Public Lender”).  The Borrower hereby agrees that so long as
the Borrower is the issuer of any outstanding debt or equity securities that
are registered or issued pursuant to a private offering or is actively
contemplating issuing any such securities (w) all Borrower Materials that are
to be made available to Public Lenders shall be clearly and conspicuously
marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall
appear prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Borrower shall be deemed to have authorized the Administrative
Agent, the Arranger and the Lenders to treat such Borrower Materials as not
containing any material non-public information with respect to the Borrower or
its securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 10.07); (y)
all Borrower Materials marked “PUBLIC” are permitted to be made available
through a portion of the Platform designated “Public Investor;” and (z) the
Administrative Agent and the Arranger shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Investor.”


 


6.03        Notices.  Promptly notify the Administrative Agent
and each Lender after any Responsible Officer has knowledge:


 


48





















 


(a)           of
the occurrence of any Default;


 


(b)           of
any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Borrower or any Restricted Subsidiary;
(ii) any dispute, litigation, investigation, proceeding or suspension between
the Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;


 


(c)           of
the occurrence of any ERISA Event;


 


(d)           of
any material change in accounting policies or financial reporting practices
adopted by the Borrower or any Restricted Subsidiary; and


 


(e)           of
the occurrence of any Internal Control Event the occurrence of which would
require disclosure under the Securities Laws.


 


Each notice
pursuant to this Section shall be accompanied by a statement of a Responsible
Officer of the Borrower setting forth details of the occurrence referred to
therein and stating what action the Borrower has taken and proposes to take
with respect thereto.  Each notice
pursuant to Section 6.03(a) shall describe with particularity any
and all provisions of this Agreement and any other Loan Document that have been
breached.


 


6.04        Payment of
Obligations.  Pay and discharge as
the same shall become due and payable, all its obligations and liabilities,
including (a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings diligently conducted and adequate
reserves in accordance with GAAP are being maintained by the Borrower or such
Restricted Subsidiary; and (b) all lawful claims which, if unpaid, would by Law
become a Lien upon its property, unless the same are being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the Borrower or such Restricted
Subsidiary.


 


6.05        Preservation of Existence,
Etc.  (a) Preserve, renew and
maintain in full force and effect its legal existence and good standing under
the Laws of the jurisdiction of its organization except in a transaction
permitted by Section 7.04 or 7.05; (b) take all
reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.


 


6.06        Maintenance of
Properties.  (a) Maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary
wear and tear excepted; (b) make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not
reasonably be expected to


 


49





















 


have a Material Adverse Effect; and
(c) use the standard of care typical in the industry in the operation and
maintenance of its facilities.


 


6.07        Maintenance of
Insurance.  Maintain with financially
sound and reputable insurance companies not Affiliates of the Borrower,
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons and providing (a) that such
policies may not be canceled or reduced or affected in any material manner for
any reason without 30 days prior notice to the Administrative Agent, and (b)
for any other matters which the Administrative Agent may reasonably require.


 


6.08        Compliance with Laws.  Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.


 


6.09        Books and Records.  Maintain proper books of record in
conformity with GAAP consistently applied regarding all financial transactions
and matters involving the assets and business of the Borrower or such
Restricted Subsidiary, as the case may be.


 


6.10        Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of the Borrower and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Borrower; provided, however,
that when an Event of Default exists the Administrative Agent or any Lender (or
any of their respective representatives or independent contractors) may do any
of the foregoing at the expense of the Borrower at any time during normal
business hours and without advance notice.


 


6.11        Use of Proceeds.  Use the proceeds of the Bridge Borrowing
(a) to partially finance the Acquisition, (b) to refinance outstanding
Indebtedness under the Existing Credit Agreement, (c) to retire the outstanding
Indebtedness under the Comerica Credit Facility and the ScissorTail Credit
Facility, and (d) for the payment of fees and expenses relating to the
Acquisition, the Credit Agreement and this Agreement.


 


6.12        Additional
Guarantors.  Notify the
Administrative Agent at the time that any Person becomes a Restricted
Subsidiary of the Borrower, and promptly thereafter (and in any event within 15
days), cause such Person to (a) become a Guarantor by executing and delivering
to the Administrative Agent a counterpart of the Guaranty or a joinder thereto
in the form attached as Exhibit F, and (b) deliver to the Administrative
Agent documents of the types referred to in clauses (iii) and (iv) of Section
4.01(a) and, upon request of the Administrative Agent, favorable opinions
of counsel to such Person (which shall cover, among other things, the


 


50





















 


legality, validity, binding effect and
enforceability of the documentation referred to in clause (a)), all in form,
content and scope reasonably satisfactory to the Administrative Agent.


 


6.13        Environmental Matters;
Environmental Reviews.


 


(a)           (i)
Comply in all material respects with all Environmental Laws now or hereafter
applicable to such Person as well as all contractual obligations and agreements
with respect to environmental remediation or other environmental matters, (ii)
obtain, at or prior to the time required by applicable Environmental Laws, all
permits, licenses and other authorizations under applicable Environmental Laws
necessary for its then current operations and will maintain such authorizations
in full force and effect, (iii) conduct any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action necessary
to remove and clean up Hazardous Materials at or from any of its properties, as
may be required by, and in accordance with the requirements of, applicable
Environmental Laws.  Promptly pay and
discharge when due all debts, claims, liabilities and obligations with respect
to any clean-up or remediation measures necessary to comply with Environmental
Laws unless, in each case, the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the applicable Person.


 


(b)           Promptly
furnish to Administrative Agent all written notices of violation, orders,
claims, citations, complaints, penalty assessments, suits or other proceedings
received by such Person, or of which it has notice, pending or threatened
against such Person, the potential liability of which exceeds $5,000,000 or
could reasonably be expected to have a Material Adverse Effect if resolved
adversely against such Person, by any Governmental Authority with respect to
any alleged violation of or non-compliance with any applicable Environmental
Laws or any permits, licenses or authorizations required under applicable
Environmental Laws in connection with its ownership or use of its properties or
the operation of its business.


 


(c)           Promptly
furnish to Administrative Agent all written requests for information, notices
of claim, demand letters, and other written notifications, received by such
Person in connection with its ownership or use of its properties or the conduct
of its business, relating to potential responsibility with respect to any
investigation or clean-up of Hazardous Material arising from its operations at
any location, the potential liability of which exceeds $5,000,000 or could
reasonably be expected to have a Material Adverse Effect if resolved adversely
against such Person.


 


6.14        Compliance with
Agreements.  Observe, perform or
comply with each Material Contract, unless any such failure to so observe,
perform or comply is remedied within the applicable period of grace (if any)
provided in such Material Contract or unless such failure to so observe,
perform or comply would not reasonably be expected to have a Material Adverse
Effect.


 


6.15        Unrestricted
Subsidiaries.  Will cause the
management, business and affairs of each of the Borrower and its Restricted
Subsidiaries to be conducted in such a manner (including, without limitation,
by keeping separate books of account, furnishing separate financial statements
of Unrestricted Subsidiaries to creditors and potential creditors thereof and
by not permitting properties of the Borrower and its Restricted Subsidiaries to
be commingled)


 


51





















 


so that each Unrestricted Subsidiary that is
a corporation or other legal entity will be treated as an entity separate and
distinct from the Borrower and the Restricted Subsidiaries.


 


6.16        Permanent Financing.  Use all commercially reasonable efforts
to refinance, or cause the refinancing of, the Loans with the proceeds of the
Permanent Financing as promptly as practicable after the Closing Date, which
shall include, without limitation:


 


(a)           As
soon as possible, but not later than 60 days after the Closing Date, the
Borrower shall (i) complete and make available to the Arranger and potential
investors a preliminary offering memorandum, circular or prospectus for the
offer, sale or placement of any Permanent Financing pursuant to Rule 144A of
the rules and regulations under the Securities Act (the “Offering Materials”)
with registration rights, containing such information, data and disclosures as
may be required pursuant to the Offering Requirements, and (ii) cause any
Permanent Financing to have been rated by S&P and Moody’s; provided,
that the Administrative Agent may, in its reasonable discretion, extend such 60
day period with respect to either, or both, of clauses (i) and (ii) by
additional successive periods of up to 60 days each (the duration of each such
period to be in the sole discretion of the Administrative Agent) so long as no
such period extends to, or any date after, the Bridge Maturity Date.


 


(b)           The
Borrower shall comply with the terms of the Fee Letter and the Engagement
Letter, each of which the Borrower hereby confirms and agrees remains in full
force and effect and shall continue as such in accordance with their respective
terms notwithstanding the execution and delivery of this Agreement; provided
that, to the extent that the provisions of Section 2 of the Fee Letter
directly conflict with Section 6.16(a) hereof, the provisions of Section
6.16(a) shall control.


 


6.17        Exchange Note Indenture.  If any Obligations under the Bridge Facility
remain outstanding on the date that is 270 days after the Closing Date:


 


(a)           The
Borrower shall commence preparation of an indenture (the “Exchange Note Indenture”)
pursuant to which the Exchange Notes shall be issued and governing the terms
and conditions of the Exchange Notes and a registration rights agreement (the “Registration
Rights Agreement”), in each case in the form of the Arranger’s standard
indentures and registration rights agreements, in each case, which shall
contain such terms, covenants, conditions, representations, warranties,
defaults, indemnities and shall have the form, term, yield, guarantees,
subordination provisions and other terms as are customary for securities or
other financings of the type similar to Exchange Notes issued in connection
with a bridge financing, all as determined by the Arranger in its reasonable
discretion, as well as such other terms and conditions as the Arranger and its
counsel may consider appropriate in light of then prevailing market conditions
applicable to similar financings or in light of any aspect of the Permanent
Financing or the Transaction that requires such other terms or conditions;


 


(b)           No
later than 300 days after the Closing Date, each Loan Party shall execute,
deliver into escrow and comply with, or cause to be delivered into escrow, the
Exchange Note Indenture, the Registration Rights Agreement, legal opinions,
comfort letters, officers’ certificates and all other customary closing
documents and requirements, all in form and substance reasonably satisfactory
to the Arranger and its counsel; and


 


52





















 


(c)           The
Loan Parties shall, as soon as practicable and in any event no later than 365
days after the Closing Date, file a shelf registration statement with the SEC
and cause such shelf registration statement to be declared effective, and shall
use their commercially reasonable efforts to keep such shelf registration
statement effective, with respect to resales of the Exchange Notes, for as long
as it is required by the holders to resell the Exchange Notes; provided,
that the Administrative Agent may, in its reasonable discretion, extend such
365 day period by additional successive periods of up to 30 days each (the
duration of each such period to be in the sole discretion of the Administrative
Agent).


 


ARTICLE VII.

NEGATIVE COVENANTS


 


So long as any
Lender shall have any Commitment hereunder, or any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, the Borrower shall not, nor shall
it permit any Restricted Subsidiary to, directly or indirectly:


 


7.01        Liens.  Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than the following:


 


(a)           Liens
pursuant to any Credit Facility Loan Document;


 


(b)           Liens
existing on the date hereof and listed on Schedule 7.01 and any renewals
or extensions thereof, provided that (i) the property covered thereby is
not changed, (ii) the amount secured or benefited thereby is not increased
(except as provided in Section 7.03(c)), (iii) the direct or any
contingent obligor with respect thereto is not changed, and (iv) any renewal or
extension of the obligations secured or benefited thereby is permitted by Section 7.03(c);


 


(c)           Liens
for taxes not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP;


 


(d)           Landlords’,
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
Liens arising in the ordinary course of business which are not overdue for a
period of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;


 


(e)           pledges
or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation,
other than any Lien imposed by ERISA;


 


(f)            deposits
to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of
business;


 


(g)           easements,
rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, do not materially detract from the value of
the property


 


53





















 


subject thereto or materially interfere with
the ordinary conduct of the business of the applicable Person;


 


(h)           Liens
securing judgments for the payment of money not constituting an Event of
Default under Section 8.01(h);


 


(i)            Liens
securing Indebtedness permitted under Section 7.03(g); provided
that (i) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (ii) the Indebtedness secured
thereby does not exceed the cost or fair market value, whichever is lower, of
the property being acquired on the date of acquisition;


 


(j)            Liens
arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies, or under
general depository or brokerage agreements, and burdening only deposit or
brokerage accounts or other funds and assets maintained with a creditor
depository institution or brokerage; and


 


(k)           Liens
arising from precautionary UCC financing statements relating to operating
leases and other contractual arrangements entered into in the ordinary course
of business that describe only the property subject to such operating lease or
contractual arrangement; and


 


(l)            statutory
Liens arising in the ordinary course of business relating to purchases of crude
oil, natural gas and other hydrocarbons in favor of producers (“first
purchaser Liens”); provided that (i) such Liens do not at any time
encumber any property other than the crude oil, natural gas or other
hydrocarbons being purchased and secure only amounts due for the purchase
thereof, and (ii) the amount secured thereby is not overdue for a period of
more than 30 days or is otherwise being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;


 


provided, nothing in this Section 7.01
shall in and of itself constitute or be deemed to constitute an agreement or
acknowledgment by the Administrative Agent or any Lender that any Indebtedness
subject to or secured by any Lien, right or other interest permitted under
subsections (a) through (i) above ranks in priority to any Obligation.


 


7.02        Investments.  Make any Investments, except:


 


(a)           Investments
held by the Borrower or such Loan Party in the form of cash equivalents or
short-term marketable debt securities;


 


(b)           advances
to officers, directors and employees of the Borrower and Restricted
Subsidiaries in an aggregate amount not to exceed $100,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;


 


(c)           Investments
of the Borrower in any wholly-owned Subsidiary that is a Guarantor and
Investments of any wholly-owned Subsidiary that is a Guarantor in the Borrower
or in another wholly-owned Subsidiary that is a Guarantor;


 


(d)           Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and


 


54





















 


Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;


 


(e)           Guarantees
permitted by Section 7.03;


 


(f)            Investments
in Unrestricted Subsidiaries (net of any distributions received by the Borrower
and Restricted Subsidiaries with respect to such Investments), provided that
(i) the aggregate amount of all such Investments made after the Closing Date
shall not at any time exceed $25,000,000, and (ii) after giving effect to any
such Investment, the Borrower has at least $10,000,000 in unused availability
under the Credit Agreement; and


 


(g)           other
Investments (including Investments in Persons that are not Subsidiaries) not
exceeding $1,000,000 in the aggregate in any fiscal year of the Borrower.


 


7.03        Indebtedness.  Create, incur, assume or suffer to exist
any Indebtedness, except:


 


(a)           Indebtedness
under the Loan Documents;


 


(b)           Indebtedness
under the Credit Facility Loan Documents;


 


(c)           Indebtedness
outstanding on the date hereof and listed on Schedule 7.03 and any refinancings,
refundings, renewals or extensions thereof; provided that the amount of
such Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such refinancing and by an amount equal to any existing
commitments unutilized thereunder;


 


(d)           Guarantees
of the Borrower or any Guarantor in respect of Indebtedness otherwise permitted
hereunder of the Borrower or any other Guarantor;


 


(e)           unsecured
Indebtedness of the Borrower or any Guarantor, provided that (i) the Loan
Parties comply with the provisions of Section 2.05(e) and (ii) such
Indebtedness qualifies as Subordinated Debt;


 


(f)            obligations
(contingent or otherwise) of the Borrower or any Restricted Subsidiary existing
or arising under any Hedging Contract, provided that (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by
such Person, and not for purposes of speculation or taking a “market view;” and
(ii) such Hedging Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party;


 


(g)           Indebtedness
in respect of capital leases, Synthetic Lease Obligations and purchase money
obligations within the limitations set forth in Section 7.01(i); provided,
however, that the aggregate amount of all such Indebtedness at any one
time outstanding shall not exceed $5,000,000;


 


55





















 


(h)           Indebtedness of any Loan Party owing
to another Loan Party;


 


(i)            Indebtedness (other than as
described in clause (a) of the definition of the term “Indebtedness”) of (A)
Copano/Webb-Duval Pipeline, L.P. (“Webb/Duval GP”) that was incurred in the
ordinary course of business by Webb/Duval Gatherers and is Indebtedness of
Webb/Duval GP solely by virtue of the fact that it is a general partner of
Webb/Duval Gatherers and (B) a general partner of Webb/Duval GP with respect to
the Indebtedness described in clause (A) solely by virtue of the fact that it
is such general partner; and


 


(j)            Other unsecured Indebtedness in an
aggregate principal amount not to exceed $5,000,000 at any time outstanding.


 


7.04        Fundamental
Changes.  Merge,
dissolve, liquidate, consolidate with or into another Person, or Dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, except that, so long as no Default exists or would
result therefrom:


 


(a)           any wholly-owned Restricted
Subsidiary may merge with (i) the Borrower, provided that the Borrower
shall be the continuing or surviving Person, or (ii) any one or more other
wholly-owned Restricted Subsidiaries; and


 


(b)           any Restricted Subsidiary may Dispose
of all or substantially all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or to a wholly-owned Restricted Subsidiary.


 


The Borrower will not issue any Equity Interests which (i) may be classified
in whole or part as Indebtedness, (ii) require mandatory distributions (other
than distributions of Available Cash permitted under Section 7.06(d)) or
mandatory redemption prior to 91 days after the Rollover Maturity Date, or
(iii) provide for a scheduled distribution above generally prevailing market
rates at the time of issuance.  No
Restricted Subsidiary of the Borrower will issue any additional Equity
Interests, except a direct Subsidiary of a Loan Party may issue additional
Equity Interests to such Loan Party or to the Borrower so long as such
Restricted Subsidiary is a wholly-owned Restricted Subsidiary of the Borrower
after giving effect thereto.  No
Restricted Subsidiary of the Borrower that is a partnership will allow any
reduction of the Borrower’s interest (direct or indirect) therein.


 


7.05        Dispositions.  Make any Disposition
or enter into any agreement to make any Disposition, except:


 


(a)           Dispositions of obsolete, surplus or
worn out property, whether now owned or hereafter acquired, in the ordinary
course of business;


 


(b)           Dispositions of inventory in the
ordinary course of business;


 


(c)           Dispositions of equipment or real
property so long as (i) the purchase price for such asset shall be paid
solely in cash; (ii) the aggregate purchase price paid to Loan Parties for
such asset and all other such assets sold by Loan Parties during any period of
four consecutive fiscal quarters pursuant to this clause (c) shall not
exceed $5,000,000; (iii) if the portion of the


 


56





















 


aggregate annual Consolidated EBITDA derived
from all assets sold pursuant to this clause (c) during any period of four
fiscal quarters and based on the four fiscal quarters (as to any assets of the
Borrower or any Restricted Subsidiary other than ScissorTail and its Restricted
Subsidiaries) or annualized portion thereof (as to any assets of ScissorTail
and its Restricted Subsidiaries as provided in Section 7.21(e)) prior to
the sale of such asset would exceed $2,000,000, the consent (not to be
unreasonably withheld) of the Required Lenders is obtained in connection with
any such sale; (iv) no Default or Event of Default shall exist prior to or
after giving effect to such sale; and (v) the Net Cash Proceeds of such
sale shall have been applied as follows (A) within one-hundred eighty
(180) days after the date of such receipt of Net Cash Proceeds to the purchase
of capital assets used in its business or (B) to the extent Net Cash
Proceeds have not been applied pursuant to the immediately preceding
clause (A), such amount (the “Excess Sale
Proceeds”) shall have been applied to prepay
Indebtedness outstanding under the Credit Agreement as provided in the Credit
Agreement;


 


(d)           Dispositions of property by any Loan
Party to another Loan Party;


 


(e)           Dispositions permitted by Section 7.04;


 


(f)            Dispositions of Equity Interests in
Unrestricted Subsidiaries; and


 


(g)           Dispositions by the Borrower and its
Restricted Subsidiaries not otherwise permitted under this Section 7.05;
provided that (i) at the time of such Disposition, no Default shall
exist or would result from such Disposition and (ii) the aggregate book value
of all property Disposed of in reliance on this clause (g) in any fiscal year
shall not exceed $1,000,000;


 


provided,
however, that any Disposition pursuant to clauses (a) through (g) shall
be for fair market value.


 


7.06        Restricted
Payments.  Declare
or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except that, so long as no
Default shall have occurred and be continuing at the time of any action
described below or would result therefrom (except as otherwise provided in
subsection (d) below):


 


(a)           each Restricted Subsidiary may make
Restricted Payments to the Borrower or any Guarantor ratably according to their
respective holdings of the type of Equity Interest in respect of which such
Restricted Payment is being made;


 


(b)           the Borrower and each Restricted
Subsidiary may declare and make dividend payments or other distributions
payable solely of the type of Equity Interests in respect of which such
Restricted Payment is being made;


 


(c)           the Borrower and each Restricted
Subsidiary may purchase, redeem or otherwise acquire Equity Interests (other
than preferred Equity Interests dissimilar in type to new Equity Interests
being concurrently issued) issued by it with the proceeds received from the
substantially concurrent issue of new Equity Interests; and


 


(d)           so long as no Event of Default has
occurred and is continuing at such time and so long as no Default or Event of
Default would exist after giving pro forma effect to such


 


57





















 


transaction, the Borrower may declare cash
quarterly distributions to its members in an amount equal to Available Cash
and, notwithstanding the occurrence of any Default or Event of Default
following such declaration, pay such declared distributions.


 


7.07        Change in Nature of
Business.  Engage
in any material line of business substantially different from those lines of
business conducted by the Borrower and its Restricted Subsidiaries on the date
hereof or any business substantially related or incidental thereto.


 


7.08        Transactions with
Affiliates.  Enter
into any transaction of any kind with any Affiliate of the Borrower, whether or
not in the ordinary course of business, other than on fair and reasonable terms
substantially as favorable to the Borrower or such Restricted Subsidiary as
would be obtainable by the Borrower or such Restricted Subsidiary at the time
in a comparable arm’s length transaction with a Person other than an Affiliate,
provided that the foregoing restriction shall not apply to (i) transactions
between or among the Borrower and any Guarantor or between and among any
Guarantors or (ii) ScissorTail’s guarantee of the performance by Southern Dome
of its obligations under that certain Gas Purchase and Processing Agreement
effective May 1, 2005 by and between Southern Dome and New Dominion, L.L.C.


 


7.09        Burdensome
Agreements.  Enter
into any Contractual Obligation (other than this Agreement, any other Loan
Document or any Credit Facility Loan Document) that (a) limits the ability (i)
of any Restricted Subsidiary to make Restricted Payments to the Borrower or any
Guarantor or to otherwise transfer property to the Borrower or any Guarantor,
(ii) of any Restricted Subsidiary to Guarantee the Indebtedness of the Borrower
or (iii) of the Borrower or any Restricted Subsidiary to create, incur, assume
or suffer to exist Liens on property of such Person in favor of the Credit
Facility Agent and the lenders under the Credit Agreement; provided, however,
that this clause (iii) shall not prohibit any negative pledge incurred or
provided in favor of any holder of Indebtedness permitted under Section 7.03(g)
solely to the extent any such negative pledge relates to the property financed
by or the subject of such Indebtedness; or (b) requires the grant of a Lien to
secure an obligation of such Person if a Lien is granted to secure another
obligation of such Person.


 


7.10        Use of Proceeds.  Use the proceeds of
the Bridge Financing, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase or carry margin stock (within the
meaning of Regulation U of the FRB) or to extend credit to others for the
purpose of purchasing or carrying margin stock or to refund indebtedness
originally incurred for such purpose.


 


7.11        Prohibited
Contracts.  Other
than those listed on Schedule 7.11:


 


(a)           enter into any “take-or-pay” contract
or other contract or arrangement for the purchase of goods or services which
obligates it to pay for such goods or service regardless of whether they are
delivered or furnished to it, other than contracts for pipeline capacity or for
services in either case reasonably anticipated to be utilized in the ordinary
course of business;


 


(b)           amend or permit any amendment to any
Material Contract which releases, qualifies, limits, makes contingent or
otherwise could reasonably be expected to detrimentally


 


58





















 


affect the rights and benefits of
Administrative Agent or any Lender under or acquired pursuant to any Loan
Document; or


 


(c)           incur any obligation to contribute to
any Multiemployer Plan or permit any ERISA Affiliate to do so.


 


7.12        Hedging
Contracts.  Be a
party to or in any manner be liable on any Hedging Contract, except:


 


(a)           Hedging Contracts entered into by a
Loan Party with the purpose and effect of fixing interest rates on a principal
amount of Indebtedness of such Loan Party that is accruing interest at a
variable rate, provided that (i) the aggregate notional amount of such
contracts never exceeds one hundred percent (100%) of the anticipated
outstanding principal balance of the Indebtedness to be hedged by such
contracts or an average of such principal balances calculated using a generally
accepted method of matching interest swap contracts to declining principal
balances and (ii) the floating rate index of each such contract generally
matches the index used to determine the floating rates of interest on the
corresponding Indebtedness to be hedged by such contract; and


 


(b)           Hedging Contracts entered into in
compliance with the Risk Management Policy.


 


7.13        Subsidiaries.  Create or acquire
any additional Restricted Subsidiary or redesignate an Unrestricted Subsidiary
as a Restricted Subsidiary unless the Borrower gives written notice to the
Administrative Agent of such creation or acquisition and complies with Sections
6.12 and 7.18.


 


7.14        Limitation on Credit
Extensions.  Except
for Investments permitted under Section 7.02 and Hedging Contracts
permitted hereunder, extend credit, make advances or make loans other than
normal and prudent extensions of credit to customers buying goods and services
in the ordinary course of business or to another Loan Party in the ordinary
course of business, which extensions shall not be for longer periods than those
extended by similar businesses operated in a normal and prudent manner.


 


7.15        Risk Management
Compliance.  Enter
into any Hedging Contract that is in violation of the Risk Management
Policy.  The Borrower agrees that upon
request by the Administrative Agent, from time to time, the Borrower and the
Administrative Agent will review and evaluate the Borrowers’ Risk Management
Policy.


 


7.16        Subordinated
Debt.  Make any
payments of principal or interest on the Subordinated Debt except in accordance
with the terms and conditions thereof.


 


7.17        Material
Contracts.  (a)
Cancel or terminate any Material Contract (or consent to or accept any
cancellation or termination thereof), or (b) amend or otherwise modify any
provision of any Material Contract or give any consent, waiver or approval
thereunder, or waive any material breach of or material default under any
Material Contract that could reasonably be expected to detrimentally affect the
rights and benefits of the Administrative Agent and/or the Lenders hereunder or
under any other Loan Document.


 


59





















 


7.18        Designation and
Conversion of Restricted and Unrestricted Subsidiaries; Debt of Unrestricted
Subsidiaries.


 


(a)           Unless designated as an Unrestricted
Subsidiary on Schedule 5.13 as of the Closing Date, designate any Person
that becomes a Subsidiary of the Borrower or any Restricted Subsidiary as an
Unrestricted Subsidiary, except the Borrower may designate by written
notification thereof to the Administrative Agent, any Restricted Subsidiary,
including a newly formed or newly acquired Subsidiary, as an Unrestricted
Subsidiary if (i) prior, and after giving effect, to such designation, no
Default would exist and (ii) such designation is deemed to be an Investment in
an Unrestricted Subsidiary in an amount equal to the fair market value as of
the date of such designation of the Borrower’s direct and indirect ownership
interest in such Subsidiary and such Investment would be permitted to be made
at the time of such designation under Section 7.02(f).


 


(b)           Designate any Unrestricted Subsidiary
to be a Restricted Subsidiary, except if after giving effect to such
designation, which shall be deemed to be a cash dividend in an amount equal to
the lesser of the fair market value of the Borrower’s direct and indirect
ownership interest in such Subsidiary or the amount of the Borrower’s cash
investment previously made for purposes of the limitation on Investments under Section
7.02(f), (i) the representations and warranties of the Borrower and its
Restricted Subsidiaries contained in each of the Loan Documents are true and
correct in all material respects on and as of such date as if made on and as of
the date of such redesignation (or, if stated to have been made expressly as of
an earlier date, were true and correct as of such date), (ii) no Default would
exist, and (iii) the Borrower and such newly-designated Restricted Subsidiary
complies with the requirements of Sections 6.12.


 


(c)           will not incur, assume, Guarantee or
otherwise be or become liable for any Indebtedness of any of the Unrestricted
Subsidiaries, except as described in Section 7.03(i).


 


(d)           will not permit any Unrestricted
Subsidiary to hold any Equity Interest in, or any Indebtedness of, the Borrower
or any Restricted Subsidiary.


 


(e)           shall not permit the aggregate
principal amount of all Non-Recourse Debt outstanding at any one time to exceed
$10,000,000.


 


7.19        Capital
Expenditures.  Use
the proceeds of any Indebtedness incurred under the Credit Agreement to make or
commit to make Capital Expenditures in any fiscal year in excess of 10% of the
Aggregate Commitments (as used in this Section 7.19, as such term is
defined in the Credit Agreement) in respect of Capital Expenditures relating to
acquisitions or construction (other than acquisitions or construction of
natural gas, natural gas liquids and crude oil pipelines, processing, treating
and gathering systems, including compression, metering, dehydrating and similar
equipment, natural gas and natural gas liquids storage facilities, and in each
case, related facilities); provided such Persons may make Capital
Expenditures as are required by any Law (including Environmental Laws).


 


7.20        Amendments to
Organizational Documents.  (a)
Amend or otherwise modify the definition of “Available Cash” as set forth in
the Borrower LLC Agreement, or (b) enter into or permit any other modification
of, or waive any material right or obligation of any Person under, its
Organization Documents that could reasonably be expected to detrimentally
affect the


 


60





















 


rights and benefits of Administrative Agent
and/or Lenders hereunder or under any other Loan Document.


 


7.21        Financial
Covenants.


 


(a)           Consolidated Fixed Charge Coverage
Ratio.  Permit the Consolidated Fixed Charge Coverage Ratio as of
the end of any fiscal quarter of the Borrower to be less than the ratio set
forth below opposite such quarter:


 




	
  Four Fiscal Quarters Ending

  	
   

  	
  Minimum

  Consolidated Fixed

  Charge Coverage

  Ratio

  
	
  Closing
  Date through September 30, 2005

  	
   

  	
  1.00 to 1.0

  
	
  December
  31, 2005 and each fiscal quarter thereafter

  	
   

  	
  1.25 to 1.0

  






 


(b)           Consolidated Interest Coverage
Ratio.  Permit the Consolidated Interest Coverage Ratio as of the
end of any fiscal quarter of the Borrower to be less than the ratio set forth
below opposite such fiscal quarter:


 




	
  Four Fiscal Quarters Ending

  	
   

  	
  Minimum

  Consolidated

  Interest Coverage

  Ratio

  
	
  Closing
  Date through September 30, 2005

  	
   

  	
  2.00 to 1.0

  
	
  December
  31, 2005 through June 30, 2006

  	
   

  	
  2.25 to 1.0

  
	
  September
  30, 2006 and each fiscal quarter thereafter

  	
   

  	
  2.50 to 1.0

  






 


(c)           Consolidated Senior Leverage Ratio.  Permit
the Consolidated Senior Leverage Ratio at any time during any period of four
fiscal quarters of the Borrower set forth below to be greater than the ratio
set forth below opposite such period:


 


61





















 




	
  Four Fiscal Quarters Ending

  	
   

  	
  Maximum

  Consolidated

  Senior Leverage

  Ratio

  
	
  Closing
  Date through September 30, 2005

  	
   

  	
  4.25 to 1.0

  
	
  December
  31, 2005 and each fiscal quarter thereafter

  	
   

  	
  4.00 to 1.0

  






 


(d)           Consolidated Total Leverage Ratio.  Permit
the Consolidated Total Leverage Ratio at any time during any period of four
fiscal quarters of the Borrower set forth below to be greater than the ratio
set forth below opposite such period:


 




	
  Four Fiscal Quarters Ending

  	
   

  	
  Maximum

  Consolidated

  Total Leverage

  Ratio

  
	
  Closing
  Date through September 30, 2005

  	
   

  	
  6.00 to 1.0

  
	
  December
  31, 2005 through June 30, 2006

  	
   

  	
  5.50 to 1.0

  
	
  September
  30, 2006 and each fiscal quarter thereafter

  	
   

  	
  5.25 to 1.0

  






 


(e)           Calculation of Financial Covenants.  With
respect to the calculation of the Fixed Charge Coverage Ratio, the Consolidated
Interest Coverage Ratio, the Senior Leverage Ratio and the Consolidated Total
Leverage Ratio in this Section 7.21 (and Consolidated EBITDA as used in Section
7.05(c)), Consolidated EBITDA, Consolidated Fixed Charges, Consolidated
Interest Charges and Consolidated Net Income of ScissorTail and its Restricted
Subsidiaries (if any) (i) shall be determined for the quarter ended September
30, 2005 by grossing-up the applicable 
component results from the Closing Date through the last day of such
quarter to a quarterly amount and (ii) shall, prior to June 30, 2006, be
determined for the periods ending on September 30, 2005, December 31, 2005 and
March 31, 2005 on an annualized basis; e.g.: for the period ending September
30, 2005, results for the quarter will be annualized by multiplying such
results by four; for the period ending December 31, 2005, results for the
two-quarter period will be annualized by multiplying such results by two; and
for the period ending March 31, 2006, results for the three-quarter period will
be annualized by multiplying such results by one and one-third.


 


ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES


 


8.01        Events of
Default.  Any of
the following shall constitute an Event of Default:


 


62





















 


(a)           Non-Payment.  The
Borrower or any other Loan Party fails to pay (i) when and as required to be
paid herein, any amount of principal of any Loan, or (ii) within three Business
Days after the same becomes due, any interest on any Loan, or any fee due
hereunder, or (iii) within five  Business
Days after the same becomes due, any other amount payable hereunder or under
any other Loan Document; or


 


(b)           Specific Covenants.  The
Borrower fails to perform or observe any term, covenant or agreement contained
in any of Sections 6.03, 6.05(a), 6.10, 6.11 or 6.12 or Article
VII; or


 


(c)           Other Defaults.  Any
Loan Party fails to perform or observe any other covenant or agreement (not
specified in subsection (a) or (b) above) contained in any Loan Document on its
part to be performed or observed and such failure continues for 30 days after
the earlier of (i) the date on which the Administrative Agent notifies Borrower
of such failure or (ii) the date on which a Responsible Officer of any Loan
Party first becomes aware of such failure; or


 


(d)           Representations and Warranties.  Any
representation, warranty, certification or statement of fact made or deemed
made by or on behalf of the Borrower or any other Loan Party herein, in any
other Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading in any material respect when made or
deemed made; or


 


(e)           Cross-Default.  (i) The
Borrower or any Restricted Subsidiary (A) fails to make any payment when
due (whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) in respect of any Indebtedness or Guarantee (other than
Indebtedness hereunder and Indebtedness under Hedging Contracts) having an
aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or (B) fails to
observe or perform any other agreement or condition relating to any such
Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or
a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Hedging Contract an
Early Termination Date (as defined in such Hedging Contract) resulting from
(A) any event of default under such Hedging Contract as to which the
Borrower or any Subsidiary is the Defaulting Party (as defined in such Hedging
Contract) or (B) any Termination Event (as so defined) under such Hedging
Contract as to which the Borrower or any Restricted Subsidiary is an Affected
Party (as so defined) and, in either event, the Hedging Termination Value owed
by the Borrower or such Restricted Subsidiary as a result thereof is greater
than the Threshold Amount; or


 


(f)            Insolvency Proceedings, Etc.  The
Borrower or any Subsidiary institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any


 


63





















 


receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or


 


(g)           Inability to Pay Debts; Attachment.  (i) The
Borrower or any Subsidiary becomes unable or admits in writing its inability or
fails generally to pay its debts as they become due, or (ii) any writ or
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the property of any such Person and is not
released, vacated or fully bonded within 30 days after its issue or levy; or


 


(h)           Judgments.  There is
entered against the Borrower or any Restricted Subsidiary (i) a final judgment
or order for the payment of money in an aggregate amount exceeding the
Threshold Amount (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage), or (ii) any one
or more non-monetary final judgments that have, or could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect and, in
either case, (A) enforcement proceedings are commenced by any creditor upon
such judgment or order, or (B) there is a period of 30 consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or


 


(i)            ERISA.  (i) An
ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result in liability of the
Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan
or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii)
the Borrower or any ERISA Affiliate fails to pay when due, after the expiration
of any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of the Threshold Amount; or


 


(j)            Invalidity of Loan Documents.  Any
provision of any Loan Document,
at any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any provision of any Loan Document; or any
Loan Party denies that it has any or further liability or obligation under any
Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document.


 


8.02        Remedies Upon Event of
Default.


 


If any Event
of Default occurs and is continuing, the Administrative Agent shall, at the
request of, or may, with the consent of, the Required Lenders, take any or all
of the following actions:


 


(a)           declare the Commitment of each Lender
to make Loans to be terminated, whereupon such Commitments and obligation shall
be terminated;


 


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(b)           declare the unpaid principal amount
of all outstanding Loans, all interest accrued and unpaid thereon, and all
other amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
and


 


(c)           exercise on behalf of itself and the
Lenders all rights and remedies available to it and the Lenders under the Loan
Documents;


 


provided,
however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans shall automatically
terminate, and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable, in each case without further act of the Administrative Agent or any Lender.


 


8.03        Application of
Funds.  After
the exercise of remedies provided for in Section 8.02 (or after the
Loans have automatically become immediately due and payable as set forth in the
proviso to Section 8.02), any amounts received on account of the Obligations
shall be applied by the Administrative Agent in the following order:


 


First, to payment of that portion of the
Obligations constituting fees, indemnities, expenses and other amounts
(including fees, charges and disbursements of counsel to the Administrative
Agent and amounts payable under Article III) payable to the
Administrative Agent in its capacity as such;


 


Second, to payment of that portion of the
Obligations constituting fees, indemnities and other amounts (other than
principal and interest) payable to the Lenders (including fees, charges and
disbursements of counsel to the respective Lenders and amounts payable under Article
III), ratably among them in proportion to the respective amounts described
in this clause Second payable to them;


 


Third, to payment of that portion of the
Obligations constituting accrued and unpaid interest on the Loans and other
Obligations, ratably among the Lenders in proportion to the respective amounts
described in this clause Third payable to them;


 


Fourth, to payment of that portion of the
Obligations constituting unpaid principal of the Loans, ratably among the
Lenders in proportion to the respective amounts described in this clause Fourth
held by them; and


 


Last, the balance, if any, after all of the
Obligations have been indefeasibly paid in full, to the Borrower or as
otherwise required by Law.


 


ARTICLE IX.

ADMINISTRATIVE AGENT


 


9.01        Appointment and
Authority.  Each
of the Lenders hereby irrevocably appoints Banc of America Bridge to act on its
behalf as the Administrative Agent hereunder and under the other Loan Documents
and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the
terms hereof or


 


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thereof, together with such actions and
powers as are reasonably incidental thereto. 
The provisions of this Article are solely for the benefit of the
Administrative Agent and the Lenders, and neither the Borrower nor any other Loan Party shall have rights as
a third party beneficiary of any of such provisions.


 


9.02        Rights as a
Lender.  The
Person serving as the Administrative Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the Administrative Agent and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated or unless the context otherwise
requires, include the Person serving as the Administrative Agent hereunder in
its individual capacity.  Such Person and
its Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with the Borrower or any Subsidiary or other Affiliate thereof as
if such Person were not the Administrative Agent hereunder and without any duty
to account therefor to the Lenders.


 


9.03        Exculpatory
Provisions.  The
Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the
foregoing, the Administrative Agent:


 


(a)           shall not be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing;


 


(b)           shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in the other Loan Documents), provided
that the Administrative Agent shall not be required to take any action that, in
its opinion or the opinion of its counsel, may expose the Administrative Agent
to liability or that is contrary to any Loan Document or applicable Law; and


 


(c)           shall not, except as expressly set
forth herein and in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the Borrower or any of its Affiliates that is communicated to or obtained by
the Person serving as the Administrative Agent or any of its Affiliates in any
capacity.


 


The
Administrative Agent shall not be liable for any action taken or not taken by
it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the Administrative
Agent shall believe in good faith shall be necessary, under the circumstances
as provided in Sections 10.01 and 8.02) or (ii) in the
absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until notice describing such
Default is given to the Administrative Agent by the Borrower or a Lender.


 


The
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other


 


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document
delivered hereunder or thereunder or in connection herewith or therewith,
(iii) the performance or observance of any of the covenants, agreements or
other terms or conditions set forth herein or therein or the occurrence of any
Default, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument or
document or (v) the satisfaction of any condition set forth in Article IV
or elsewhere herein, other than to confirm receipt of items expressly required
to be delivered to the Administrative Agent.


 


9.04        Reliance by
Administrative Agent.  The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed
by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper Person.  The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon.  In
determining compliance with any condition hereunder to the making of a Loan,
that by its terms must be fulfilled to the satisfaction of a Lender, the
Administrative Agent may presume that such condition is satisfactory to such
Lender unless the Administrative Agent shall have received notice to the
contrary from such Lender prior to the making of such Loan.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.


 


9.05        Delegation of
Duties.  The
Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any
one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. 
The exculpatory provisions of this Article shall apply to any such sub-agent
and to the Related Parties of the Administrative Agent and any such sub-agent,
and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.


 


9.06        Resignation of
Administrative Agent.  The
Administrative Agent may at any time give notice of its resignation to the
Lenders and the Borrower.  Upon receipt
of any such notice of resignation, the Required Lenders shall have the right,
in consultation with the Borrower, to appoint a successor, which shall be a
bank with an office in the United States, or an Affiliate of any such bank with
an office in the United States.  If no
such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided
that if the Administrative Agent shall notify the Borrower and the Lenders that
no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the case of any collateral
security held by the Administrative Agent on behalf of the Lenders under any of
the Loan Documents, the retiring Administrative Agent shall continue to hold
such collateral security until such time as a


 


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successor Administrative Agent is
appointed) and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender directly, until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above
in this Section.  Upon the acceptance of
a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged
therefrom as provided above in this Section). 
The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. 
After the retiring Administrative Agent’s resignation hereunder and
under the other Loan Documents, the provisions of this Article and Section 10.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.


 


9.07        Non-Reliance on
Administrative Agent and Other Lenders.  Each
Lender and acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document
furnished hereunder or thereunder.


 


9.08        No Other Duties, Etc.  Anything
herein to the contrary notwithstanding, none of the bookrunners, syndication
agents or documentation agents listed on the cover page hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other
Loan Documents, except in its capacity, as applicable, as the Administrative
Agent or a Lender hereunder.


 


9.09        Administrative Agent
May File Proofs of Claim.  In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective
of whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise


 


(a)           to file and prove a claim for the
whole amount of the principal and interest owing and unpaid in respect of the
Loans and all other Obligations that are owing and unpaid and to file such
other documents as may be necessary or advisable in order to have the claims of
the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders
and the Administrative Agent and their


 


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respective agents and counsel and all other
amounts due the Lenders and the Administrative Agent under Sections 2.08
and 10.04) allowed in such judicial proceeding; and


 


(b)           to collect and receive any monies or
other property payable or deliverable on any such claims and to distribute the
same;


 


and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Lender to make such
payments to the Administrative Agent and, in the event that the Administrative
Agent shall consent to the making of such payments directly to the Lenders, to
pay to the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under Sections
2.08 and 10.04.


 


Nothing contained herein
shall be deemed to authorize the Administrative Agent to authorize or consent
to or accept or adopt on behalf of any Lender any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or to authorize the Administrative Agent to vote in respect of
the claim of any Lender in any such proceeding.


 


9.10        Guaranty Matters.  The Lenders
irrevocably authorize the Administrative Agent, at its option and in its
discretion, to release any Guarantor from its obligations under the Guaranty if
such Person ceases to be a Restricted Subsidiary as a result of a transaction
permitted hereunder.


 


Upon request
by the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agent’s authority to release or subordinate its
interest in particular types or items of property, or to release any Guarantor
from its obligations under the Guaranty pursuant to this Section 9.10.


 


ARTICLE X.

MISCELLANEOUS


 


10.01      Amendments, Etc.  No amendment or
waiver of any provision of this Agreement or any other Loan Document, and no
consent to any departure by the Borrower or any other Loan Party therefrom,
shall be effective unless in writing signed by the Required Lenders and the
Borrower or the applicable Loan Party, as the case may be, and acknowledged by
the Administrative Agent, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall:


 


(a)           waive any condition set forth in Section 4.01(a)
without the written consent of each Lender;


 


(b)           extend or increase the Commitment of
any Lender (or reinstate any Commitment terminated pursuant to Section 8.02)
without the written consent of such Lender;


 


(c)           postpone any date fixed by this
Agreement or any other Loan Document for any scheduled payment or mandatory
prepayment of principal, interest, fees or other amounts due to


 


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the Lenders (or any of them) hereunder or
under any other Loan Document without the written consent of each Lender
directly affected thereby;


 


(d)           reduce the principal of, or the rate
of interest specified herein on, any Loan, or (subject to clause (iv) of the
second proviso to this Section 10.01) any fees or other amounts
payable hereunder or under any other Loan Document, without the written consent
of each Lender directly affected thereby; provided, however, that
only the consent of the Required Lenders shall be necessary (i) to amend the
definition of “Default Rate” or to waive any obligation of the Borrower to pay
interest at the Default Rate or (ii) to amend any financial covenant hereunder
(or any defined term used therein) even if the effect of such amendment would
be to reduce the rate of interest on any Loan or to reduce any fee payable
hereunder;


 


(e)           change Section 8.03 in a
manner that would alter the pro rata sharing of payments required thereby
without the written consent of each Lender;


 


(f)            change any provision of this Section
or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender; or


 


(g)           release all or substantially all of
the value of the Guaranty without the written consent of each Lender, except as
provided in Section 9.10;


 


and, provided
further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; (ii) Section 10.06(h) may not be
amended, waived or otherwise modified without the consent of each Granting
Lender all or any part of whose Loans are being funded by an SPC at the time of
such amendment, waiver or other modification; and (iii) the Fee Letter
may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto.


 


10.02      Notices; Effectiveness;
Electronic Communication.


 


(a)           Notices Generally.  Except
in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:


 


(i)            if to the Borrower or the
Administrative Agent, to the address, telecopier number, electronic mail
address or telephone number specified for such Person on Schedule 10.02;
and


 


(ii)           if to any other Lender, to the
address, telecopier number, electronic mail address or telephone number
specified in its Administrative Questionnaire.


 


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Notices sent
by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through
electronic communications to the extent provided in subsection (b) below, shall
be effective as provided in such subsection (b).


 


(b)           Electronic Communications.  Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender pursuant to Article
II if such Lender has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic
communication.  The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may
be limited to particular notices or communications.


 


Unless the
Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the sender’s
receipt of an acknowledgement from the intended recipient (such as by the “return
receipt requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.


 


(c)           The Platform.  THE
PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT
WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY
OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS
FROM THE BORROWER MATERIALS.  NO WARRANTY
OR ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY
AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or
any of its Related Parties (collectively, the “Agent Parties”) have any
liability to the Borrower, any Lender or any other Person for losses, claims,
damages, liabilities or expenses of any kind (whether in tort, contract or
otherwise) arising out of the Borrower’s or the Administrative Agent’s
transmission of Borrower Materials through the Internet, except to the extent
that such losses, claims, damages, liabilities or expenses are determined by a
court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent Party; provided,
however, that in no event shall any Agent Party have any liability to
the Borrower, any Lender or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual damages).


 


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(d)           Change of Address, Etc.  Each
of the Borrower and the Administrative Agent may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to
the other parties hereto.  Each other Lender
may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the Borrower and the Administrative
Agent.  In addition, each Lender agrees
to notify the Administrative Agent from time to time to ensure that the Administrative
Agent has on record (i) an effective address, contact name, telephone number,
telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender.


 


(e)           Reliance by Administrative Agent
and Lenders.  The Administrative Agent and the Lenders shall be
entitled to rely and act upon any notices purportedly given by or on behalf of
the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  The Borrower shall indemnify the
Administrative Agent, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower.  All telephonic notices to and other
telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.


 


10.03      No Waiver; Cumulative
Remedies.  No
failure by any Lender or the Administrative Agent to exercise, and no delay by
any such Person in exercising, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers
and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.


 


10.04      Expenses; Indemnity; Damage
Waiver.


 


(a)           Costs and Expenses.  The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent), in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated) and (ii) all out-of-pocket
expenses incurred by the Administrative Agent or any Lender (including the
fees, charges and disbursements of any counsel for the Administrative Agent or
any Lender), in connection with the enforcement or protection of its rights
(A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (B) in connection with the
Loans made hereunder, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans.


 


(b)           Indemnification by the Borrower.  The
Borrower shall indemnify the Administrative Agent (and any sub-agent thereof)
and each Lender, and each Related Party of


 


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any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses (including the fees, charges and disbursements of any counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, or the consummation of the transactions
contemplated hereby or thereby, or in the case of the Administrative Agent (and
any sub-agent thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents, (ii) any Loan or the use or
proposed use of the proceeds therefrom, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Borrower or any of its Subsidiaries, or any Environmental Liability
related in any way to the Borrower or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by the Borrower or any other Loan Party,
and regardless of whether any Indemnitee is a party thereto, in all
cases, whether or not caused by or arising, in whole or in part, out of the
comparative, contributory or sole negligence of the Indemnitee;
provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrower or any other Loan Party against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrower or such Loan Party has obtained a final
and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.


 


(c)           Reimbursement by Lenders.  To
the extent that the Borrower for any reason fails to indefeasibly pay any
amount required under subsection (a) or (b) of this Section to be
paid by it to the Administrative Agent (or any sub-agent thereof) or any
Related Party of any of the foregoing, each Lender severally agrees to pay to
the Administrative Agent (or any such sub-agent) or such Related Party, as the
case may be, such Lender’s Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent (or any such
sub-agent) in its capacity as such, or against any Related Party of any of the
foregoing acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity.  The
obligations of the Lenders under this subsection (c) are subject to the
provisions of Section 2.11(d).


 


(d)           Waiver of Consequential Damages,
Etc.  To the fullest extent permitted by applicable Law, the
Borrower shall not assert, and hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or the use of the proceeds thereof.  No Indemnitee referred to in subsection
(b) above shall be liable for any damages arising from the


 


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use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby
or thereby in the absence of its own gross negligence or willful misconduct.


 


(e)           Payments.  All
amounts due under this Section shall be payable not later than ten Business
Days after demand therefor; provided such demand shall be accompanied by
a reasonably detailed invoice outlining the costs and expenses to be
reimbursed.


 


(f)            Survival.  The
agreements in this Section shall survive the resignation of the Administrative
Agent, the replacement of any Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all the other
Obligations.


 


10.05      Payments Set
Aside.  To the
extent that any payment by or on behalf of the Borrower is made to the
Administrative Agent or any Lender, or the Administrative Agent or any Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent or such Lender in its discretion) to
be repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share (without duplication) of any amount so recovered from or repaid by the
Administrative Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect.  The
obligations of the Lenders under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Agreement.


 


10.06      Successors and Assigns.


 


(a)           Successors and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby,
except that (other than pursuant to a transaction permitted by Section 7.04)
neither the Borrower nor any other Loan
Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
subsection (f) of this Section, or (iv) to an SPC in accordance with the
provisions of subsection (h) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in subsection (d) of this Section and, to the extent
expressly contemplated hereby, the Related Parties of each of the


 


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Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.


 


(b)           Assignments by Lenders.  Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that


 


(i)            except in the case of an assignment
of the entire remaining amount of the assigning Lender’s Commitment and the
Loans at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000 unless the
Arranger otherwise consents (such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to
members of an Assignee Group and concurrent assignments from members of an
Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and
members of its Assignee Group) will be treated as a single assignment for
purposes of determining whether such minimum amount has been met;


 


(ii)           each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender’s rights
and obligations under this Agreement with respect to the Loans or the
Commitment assigned;


 


(iii)          any assignment of a Commitment must be
approved by the Arranger (such approval not to be unreasonably withheld) unless
the Person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and


 


(iv)          the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee in the amount, if any, required
as set forth in Schedule 10.06 and the Eligible Assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.


 


Subject to
acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 3.01, 3.04,


 


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3.05,
and 10.04 with respect to facts and circumstances occurring prior
to the effective date of such assignment. 
Upon request, the Borrower (at its expense) shall execute and deliver a
Note to the assignee Lender.  Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this Section.


 


(c)           Register.  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). 
The entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower at any reasonable time and from time to time upon
reasonable prior notice.  In addition, at
any time that a request for a consent for a material or substantive change to
the Loan Documents is pending, any Lender may request and receive from the
Administrative Agent a copy of the Register.


 


(d)           Participations.  Any
Lender may at any time, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to any Person (other than a
natural person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement.


 


Any agreement
or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement
and to approve any amendment, modification or waiver of any  provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, waiver or other
modification described in the first proviso to Section 10.01 that
affects such Participant.  Subject to
subsection (e) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to subsection (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.12 as though it were
a Lender.


 


(e)           Limitations upon Participant
Rights.  A Participant shall not be entitled to receive any
greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.  A


 


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Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 3.01
unless the Borrower is notified of the participation sold to such Participant
and provided with all information required to be included in the Register and
such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(e)
as though it were a Lender.


 


(f)            Certain Pledges.  Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Note, if any)
to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such
pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.


 


(g)           Electronic Execution of
Assignments.  The words “execution,” “signed,” “signature,” and
words of like import in any Assignment and Assumption shall be deemed to
include electronic signatures or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as
a manually executed signature or the use of a paper-based recordkeeping system,
as the case may be, to the extent and as provided for in any applicable Law,
including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.


 


(h)           Special Purpose Funding Vehicles.  Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”)
may grant to a special purpose funding vehicle identified as such in writing
from time to time by the Granting Lender to the Administrative Agent and the
Borrower (an “SPC”) the option to provide all or any part of any Loan
that such Granting Lender would otherwise be obligated to make pursuant to this
Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to
exercise such option or otherwise fails to make all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof or, if it fails to do so, to make such payment to the Administrative
Agent as is required under Section 2.11(b)(ii).  Each party hereto hereby agrees that (i)
neither the grant to any SPC nor the exercise by any SPC of such option shall
increase the costs or expenses or otherwise increase or change the obligations
of the Borrower under this Agreement (including its obligations under Section 3.04),
(ii) no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement for which a Lender would be liable, and (iii) the Granting
Lender shall for all purposes, including the approval of any amendment, waiver
or other modification of any provision of any Loan Document, remain the lender
of record hereunder.  The making of a
Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to
the same extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior debt of any
SPC, it will not institute against, or join any other Person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceeding under the laws of the United States or any State
thereof.  Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrower and the Administrative Agent and with the payment of a
processing fee in the amount of $3,500, assign all or any portion of its right
to


 


77





















 


receive payment with respect to any Loan to
the Granting Lender and (ii) disclose on a confidential basis any non-public
information relating to its funding of Loans to any rating agency, commercial
paper dealer or provider of any surety or guarantee or credit or liquidity
enhancement to such SPC.


 


10.07      Treatment of Certain
Information; Confidentiality.  Each
of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’
respective partners, directors, officers, employees, agents, advisors and
representatives (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent
requested by any regulatory authority purporting to have jurisdiction over it
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable Laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any Hedging Contract relating to the Borrower
and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrower.


 


For purposes
of this Section, “Information” means all information received from the
Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of
their respective businesses, other than any such information that is available
to the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower or any Subsidiary, provided that, in the case
of information received from the Borrower or any Subsidiary after the date
hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.


 


Each of the
Administrative Agent and the Lenders acknowledges that (a) the Information may
include material non-public information concerning the Borrower or a
Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle
such material non-public information in accordance with applicable Law,
including Federal and state securities Laws.


 


10.08      Right of Setoff.  If an Event of Default
shall have occurred and be continuing, each Lender and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any


 


78





















 


time held and other obligations (in whatever
currency) at any time owing by such Lender or any such Affiliate to or for the
credit or the account of the Borrower or
any other Loan Party against any and all of the obligations of the
Borrower or such Loan Party now
or hereafter existing under this Agreement or any other Loan Document to such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such obligations
of the Borrower or such Loan Party
may be contingent or unmatured or are owed to a branch or office of such Lender
different from the branch or office holding such deposit or obligated on such
indebtedness.  The rights of each Lender
and their respective Affiliates under this Section are in addition to other
rights and remedies (including other rights of setoff) that such Lender or
their respective Affiliates may have. 
Each Lender agrees to notify the Borrower and the Administrative Agent
promptly after any such setoff and application, provided that the
failure to give such notice shall not affect the validity of such setoff and
application.


 


10.09      Interest Rate
Limitation.  Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrower. 
In determining whether the interest contracted for, charged, or received
by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any payment
that is not principal as an expense, fee, or premium rather than interest, (b)
exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.


 


10.10      Counterparts;
Integration; Effectiveness.  This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof.  Except as provided in Section 4.01,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.


 


10.11      Survival of
Representations and Warranties.  All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been
or will be relied upon by the Administrative Agent and each Lender, regardless
of any investigation made by the Administrative Agent or any Lender or on their
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default at the time of any Loan, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied.


 


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10.12      Severability.  If any provision of
this Agreement or the other Loan Documents is held to be illegal, invalid or
unenforceable, (a) the legality, validity and enforceability of the remaining
provisions of this Agreement and the other Loan Documents shall not be affected
or impaired thereby and (b) the parties shall endeavor in good faith
negotiations to replace the illegal, invalid or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


10.13      Replacement of
Lenders.  If (a)
any Lender requests compensation under Section 3.04 or gives notice
pursuant to Section 3.02, (b) the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.01, (c) any Lender fails to
consent to an election, consent, amendment, waiver or other modification to
this Agreement or any other Loan Document that requires the consent of a
greater percentage of the Lenders than the Required Lenders and such election,
consent, amendment, waiver or other modification is otherwise consented to by
the Required Lenders, or (d) if any
other circumstance exists hereunder that gives the Borrower the right to
replace a Lender as a party hereto, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in, and consents required by, Section 10.06),
all of its interests, rights and obligations under this Agreement and the
related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that:


 


(a)           the Borrower shall have paid to the
Administrative Agent the assignment fee specified in Section 10.06(b);


 


(b)           such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder
and under the other Loan Documents (including any amounts under Section 3.05)
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts);


 


(c)           in the case of any such assignment
resulting from a claim for compensation under Section 3.04 or
payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter;
and


 


(d)           such assignment does not conflict
with applicable Laws.


 


A Lender shall
not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
the Borrower to require such assignment and delegation cease to apply.


 


10.14      Governing Law;
Jurisdiction; Etc.


 


(a)           GOVERNING LAW.  THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.


 


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(b)           SUBMISSION TO JURISDICTION.  THE
ADMINISTRATIVE AGENT, EACH LENDER, THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, IN SUCH FEDERAL COURT. 
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER
LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY
LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.


 


(c)           WAIVER OF VENUE.  THE
ADMINISTRATIVE AGENT, EACH LENDER, THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.


 


(d)           SERVICE OF PROCESS.  EACH
PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED
FOR NOTICES IN SECTION 10.02. 
NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.


 


10.15      Waiver of Jury
Trial.  EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR


 


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OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.


 


10.16      USA Patriot Act
Notice.  Each
Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”),
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.


 


10.17      ENTIRE AGREEMENT.  THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.


 


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INTENTIONALLY LEFT BLANK.]


 


82





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


	
   

  	
  COPANO
  ENERGY, L.L.C.,

  
	
   

  	
  as Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John R.
  Eckel, Jr.

  
	
   

  	
  Title:

  	
  Chairman of
  the Board and

  
	
   

  	
   

  	
  Chief
  Executive Officer

  
					



 


S-1





















 


	
   

  	
  BANC OF
  AMERICA BRIDGE LLC, as

  
	
   

  	
  Administrative
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


S-2





















 


	
   

  	
  BANC OF
  AMERICA BRIDGE LLC, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


S-3





















 


SCHEDULE 2.01


 


COMMITMENTS

AND APPLICABLE PERCENTAGES


 


	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Applicable

  Percentage

  	
   

  
	
  Banc of America
  Bridge LLC

  	
   

  	
  $

  	
  170,000,000.00

  	
   

  	
  100.000000000

  	
  %

  
	
  Total

  	
   

  	
  $

  	
  170,000,000.00

  	
   

  	
  100.000000000

  	
  %

  



 


 





















 


SCHEDULE 5.05


 


SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS


 


1.             Liabilities in connection with the
following capital lease for two compressor units:  Schedule No. 4, dated February 8, 2002, to
Master Finance Lease dated August 14, 2001 between Caterpillar Financial
Services Corporation and ScissorTail Energy, LLC


 


2.             Liabilities in connection with
operating leases with Caterpillar (two compressor units), USA Compression
Partners (three compressor units), Hanover Compression Limited (one compressor
unit) and J-W Power Company (one compressor unit)


 


3.             Liabilities in connection with
vehicles leased pursuant to that certain Lease Agreement dated June 24, 2003
between Automotive Rentals, Inc. and ScissorTail Energy, LLC


 


4.             Liabilities in connection with
office lease dated August 1, 2000 between Noble Building Investors and
ScissorTail Energy, LLC


 


5.             Liabilities in connection with
office lease dated November 1, 1988 between Arrow Energy, Inc and ScissorTail
Energy, LLC


 


6.             Liabilities in connection with
Business Lease dated February 26, 2001 between Don and Lavonna Kinnamon and
ScissorTail Energy, LLC


 


7.             Irrevocable Standby  Letter of Credit of Bank of America dated
November 30, 2004 for the benefit of ONEOK Hydrocarbon, L.P., as amended
(ScissorTail Energy, LLC as applicant)


 


8.             Pursuant to the Amended and
Restated Operating Agreement of Southern Dome, LLC (“Southern Dome”) dated as
of August 1, 2005, ScissorTail Energy, LLC is obligated to make certain capital
contributions to Southern Dome


 





















 


SCHEDULE 5.09


 


ENVIRONMENTAL MATTERS


 


NONE


 





















 


SCHEDULE 5.13


 


SUBSIDIARIES AND

OTHER EQUITY INVESTMENTS


 


Part (a).  Subsidiaries.


 


	
  Subsidiary

  	
   

  	
  Jurisdiction &

  Formation ID#

  	
   

  	
  Owner

  	
   

  	
  Ownership

  Interest

  	
   

  	
  Restricted/

  Unrestricted

  
	
  Copano Pipelines Group, L.L.C.

  	
   

  	
  DE 3424624

  	
   

  	
  Copano Energy, L.L.C.

  	
   

  	
  1,000 MU

  	
   

  	
  Restricted

  
	
  Copano General Partners, Inc.

  	
   

  	
  DE 3424786

  	
   

  	
  Copano Pipelines Group, L.L.C.

  	
   

  	
  1,000 CS

  	
   

  	
  Restricted

  
	
  CPG LP Holdings, L.L.C.

  	
   

  	
  DE 3876775

  	
   

  	
  Copano Pipelines Group, L.L.C.

  	
   

  	
  1,000 MU

  	
   

  	
  Restricted

  
	
  Copano Field Services GP, L.L.C.

  	
   

  	
  DE 3876785

  	
   

  	
  Copano General Partners, Inc.

  	
   

  	
  1,000 MU

  	
   

  	
  Restricted

  
	
  Copano
  Pipelines GP, L.L.C.

  	
   

  	
  DE 3876777

  	
   

  	
  Copano General Partners, Inc.

  	
   

  	
  1,000 MU

  	
   

  	
  Restricted

  
	
  Copano
  Pipelines (Texas) GP, L.L.C.

  	
   

  	
  DE 3876778

  	
   

  	
  Copano General Partners, Inc

  	
   

  	
  100% MI

  	
   

  	
  Restricted

  
	
  Copano
  Energy Services GP, L.L.C.

  	
   

  	
  DE 3876779

  	
   

  	
  Copano General Partners, Inc

  	
   

  	
  1,000 MU

  	
   

  	
  Restricted

  
	
  Copano
  Energy Services (Texas) GP, L.L.C.

  	
   

  	
  DE 3876780

  	
   

  	
  Copano General Partners, Inc

  	
   

  	
  100% MI

  	
   

  	
  Restricted

  
	
  Copano Field Services/Copano Bay,
  L.P.

  	
   

  	
  TX 8894810

  	
   

  	
  Copano Field Services GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  20   GPU

  980  LPU

  	
   

  	
  Restricted

  
	
  Copano Field Services/South Texas,
  L.P.

  	
   

  	
  TX 8905310

  	
   

  	
  Copano Field Services GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  20    GPU

  980  LPU

  	
   

  	
  Restricted

  
	
  Copano
  Field Services/Agua Dulce, L.P.

  	
   

  	
  TX 8732510

  	
   

  	
  Copano Field Services GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  20    GPU

  980   LPU

  	
   

  	
  Restricted

  
	
  Copano Field Services/Upper Gulf
  Coast, L.P.

  	
   

  	
  TX 9617310

  	
   

  	
  Copano Field Services GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  20G  PU

  980  LPU

  	
   

  	
  Restricted

  
	
  Copano Field Services/Live Oak,
  L.P.

  	
   

  	
  TX 800060858

  	
   

  	
  Copano Field Services GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  20    GPU

  980  LPU

  	
   

  	
  Restricted

  
	
  Copano Field Services/Karnes, L.P.

  	
   

  	
  TX 800324300

  	
   

  	
  Copano Field Services GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  .01   GPU

  999.99 LPU

  	
   

  	
  Restricted

  
	
  Copano Pipelines/South Texas, L.P.

  	
   

  	
  TX 11010710

  	
   

  	
  Copano Pipelines GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  20    GPU

  980  LPU

  	
   

  	
  Restricted

  
	
  Copano Pipelines/Upper Gulf Coast,
  L.P.

  	
   

  	
  TX 9617110

  	
   

  	
  Copano Pipelines GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  20    GPU

  980  LPU

  	
   

  	
  Restricted

  
	
  Copano
  Pipelines/Hebbronville, L.P.

  	
   

  	
  TX 14502810

  	
   

  	
  Copano Pipelines GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  20    GPU

  980  LPU

  	
   

  	
  Restricted

  
	
  Copano Energy Services/Upper Gulf
  Coast, L.P.

  	
   

  	
  TX 9617210

  	
   

  	
  Copano Energy Services GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  20    GPU

  980  LPU

  	
   

  	
  Restricted

  
	
  Copano Pipelines/Texas Gulf Coast,
  L.P.

  	
   

  	
  TX 13728110

  	
   

  	
  Copano Pipelines (Texas) GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  2%   GPI

  98% LPI

  	
   

  	
  Restricted

  



 





















 


	
  Subsidiary

  	
   

  	
  Jurisdiction &

  Formation ID#

  	
   

  	
  Owner

  	
   

  	
  Ownership

  Interest

  	
   

  	
  Restricted/

  Unrestricted

  
	
  Copano Energy Services/Texas Gulf
  Coast, L.P.

  	
   

  	
  TX 13728210

  	
   

  	
  Copano Energy Services (TX) GP, L.L.C. CPG LP
  Holdings, L.L.C.

  	
   

  	
  2%    GPI

  98%  LPI

  	
   

  	
  Restricted

  
	
  Nueces Gathering, L.L.C.

  	
   

  	
  TX
  800079790

  	
   

  	
  Copano
  Field Services/Agua Dulce, L.P.

  	
   

  	
  100% MI

  	
   

  	
  Unrestricted

  
	
  Estes Cove Facilities, L.L.C.

  	
   

  	
  TX 07045019

  	
   

  	
  Copano
  Pipelines/South Texas, LP

  Copano
  Field Services/Copano Bay, L.P.

  	
   

  	
  2%   MI

  98% MI

  	
   

  	
  Unrestricted

  
	
  Copano Field Services/Central Gulf
  Coast GP, L.L.C.

  	
   

  	
  DE 3876773

  	
   

  	
  Copano Pipelines Group, L.L.C.

  	
   

  	
  1,000 LLCU

  	
   

  	
  Restricted

  
	
  Copano Field Services/Central Gulf
  Coast, L.P.

  	
   

  	
  TX 13656510

  	
   

  	
  CFS/Central Gulf Coast GP, L.L.C.

  CPG LP Holdings, L.L.C.

  	
   

  	
  .01    GPU

  999.99 LPU

  	
   

  	
  Restricted

  
	
  Copano Houston Central, L.L.C.

  	
   

  	
  DE 3396043

  	
   

  	
  Copano Energy, L.L.C.

  	
   

  	
  900,000 LLCU

  	
   

  	
  Restricted

  
	
  Copano NGL Services GP, L.L.C.

  	
   

  	
  DE 3876781

  	
   

  	
  Copano Houston Central, L.L.C.

  	
   

  	
  1,000 LLCU

  	
   

  	
  Restricted

  
	
  Copano Processing GP, L.L.C.

  	
   

  	
  DE 3876783

  	
   

  	
  Copano Houston Central, L.L.C.

  	
   

  	
  1,000 LLCU

  	
   

  	
  Restricted

  
	
  CHC LP Holdings, L.L.C.

  	
   

  	
  DE 3876782

  	
   

  	
  Copano Houston Central, L.L.C.

  	
   

  	
  1,000 LLCU

  	
   

  	
  Restricted

  
	
  Copano NGL
  Services, L.P.

  	
   

  	
  TX 13656610

  	
   

  	
  Copano NGL Services GP, L.L.C.

  CHC LP Holdings, L.L.C.

  	
   

  	
  .01  GPU

  999.99 LPU

  	
   

  	
  Restricted

  
	
  Copano Processing, L.P.

  	
   

  	
  TX 13656410

  	
   

  	
  Copano Processing GP, L.L.C.

  CHC LP Holdings, L.L.C.

  	
   

  	
  .01  GPU

  999.99 LPU

  	
   

  	
  Restricted

  
	
  Copano/Webb-Duval Pipeline GP,
  L.L.C.

  	
   

  	
  DE 3859219

  	
   

  	
  Copano Energy, L.L.C.

  	
   

  	
  100% MI

  	
   

  	
  Restricted

  
	
  CWDPL LP Holdings, L.L.C.

  	
   

  	
  DE 3876770

  	
   

  	
  Copano Energy, L.L.C.

  	
   

  	
  1,000 MU

  	
   

  	
  Restricted

  
	
  Copano/Webb-Duval Pipeline, L.P.

  	
   

  	
  DE 2146807

  	
   

  	
  Copano/Webb-Duval P GP, L.L.C. CWDPL LP Holdings,
  L.L.C.

  	
   

  	
  0.001% GPI

  99.999% LPI

  	
   

  	
  Restricted

  
	
  Webb/Duval Gatherers

  	
   

  	
   

  	
   

  	
  Copano/Webb-Duval Pipeline, L.P.

  	
   

  	
  62.5% GPI

  	
   

  	
  Unrestricted

  
	
  CPNO Services GP, L.L.C.

  	
   

  	
  DE 3903915

  	
   

  	
  Copano Energy, L.L.C.

  	
   

  	
  100% MI

  	
   

  	
  Restricted

  
	
  CPNO Services LP Holdings, L.L.C.

  	
   

  	
  DE 3903964

  	
   

  	
  Copano Energy, L.L.C.

  	
   

  	
  100% MI

  	
   

  	
  Restricted

  
	
  CPNO Services, L.P.

  	
   

  	
  TX 800433302

  	
   

  	
  CPNO Services GP, L.L.C.
CPNO Services LP Holdings, L.L.C.

  	
   

  	
  0.001% GPI 99.999% LPI

  	
   

  	
  Restricted

  
	
  Copano Energy/Rocky Mountains and Mid-Continent,
  L.L.C.

  	
   

  	
  DE 3985803

  	
   

  	
  Copano Energy, L.L.C.

  	
   

  	
  100% MI

  	
   

  	
  Restricted

  
	
  ScissorTail Energy, LLC

  	
   

  	
  DE 3238223

  	
   

  	
  Copano Energy/Rocky Mountains and Mid-Continent,
  L.L.C.

  	
   

  	
  100% MI

  	
   

  	
  Restricted

  
	
  Southern Dome, LLC

  	
   

  	
  DE 3899484

  	
   

  	
  ScissorTail Energy, LLC

  	
   

  	
  73% MI(1)

  	
   

  	
  Unrestricted

  
	
  Copano Energy Finance Corporation

  	
   

  	
  DE 4000518

  	
   

  	
  Copano Energy, L.L.C.

  	
   

  	
  1,000 CS

  	
   

  	
  Restricted

  
	
  Copano
  Risk Management, L.P.

  	
   

  	
  TX
  800521188

  	
   

  	
  CPNO
  Services GP, L.L.C.
CPNO Services LP Holdings, L.L.C.

  	
   

  	
  0.001% GPI

  99.999% LPI

  	
   

  	
  Restricted

  



 





















 


 


	
  MI – Membership
  Interest

  	
   

  	
  MU – Membership
  Units

  	
   

  	
  CS – Common
  Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GPI – General
  Partner Interest

  	
   

  	
  GPU – General
  Partner Units

  	
   

  	
  LLCU – LLC Units

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LPI – Limited
  Partner Interest

  	
   

  	
  LPU - Limited Partner
  Units

  	
   

  	
   

  



 










(1)  ScissorTail
Energy, LLC is obligated to make 100% of capital contributions until such time
as its capital account balance equals 73% of the aggregate capital account
balances of the members.


 


Part (b).  Other Equity Investments.


 


None.


 





















 


SCHEDULE 7.01


 


EXISTING LIENS


 


Liens
granted in connection with the liabilities described in Items 1-3 of Schedule
5.05


 





















 


SCHEDULE 7.03


 


EXISTING INDEBTEDNESS


 


Indebtedness
in connection with the following capital lease for two compressor units:  Schedule No. 4, dated February 8, 2002, to
Master Finance Lease dated August 14, 2001 between Caterpillar Financial
Services Corporation and ScissorTail Energy, LLC


 





















 


SCHEDULE
7.11


 


PROHIBITED
CONTRACTS


 


NONE


 





















 


SCHEDULE 10.02


 


ADMINISTRATIVE AGENT’S OFFICE;

CERTAIN ADDRESSES FOR NOTICES


 


BORROWER:


 


2727 Allen Parkway, Suite 1200

Houston, Texas 77019


 


Attention:  Matt Assiff

Telephone:  713-621-9547

Telecopier:  713-621-9545

Electronic Mail: matt.assiff@copanoenergy.com

Website Address:  www.copanoenergy.com


 


ADMINISTRATIVE AGENT:


 


Administrative
Agent’s Office (for payments):

Banc of America Bridge LLC

101 North Tryon Street

Mail Code:  NC1-001-15-04

Charlotte, North Carolina  28255

Attention:  Melissa Mullis

Telephone:  (704) 386-9372

Telecopier:  (704) 264-2445

Electronic Mail:  Melissa.mullis@bankofamerica.com


 


Wire Instructions: 

Bank of America


New York, New York


ABA 026009593


Acct # 1366212250600


Acct Name: Corporate Credit
Services


Ref: Copano Energy LLC
Bridge


 


Other
Notices to Administrative Agent:

Banc of America Bridge LLC

100 North Tryon Street

Mail Code:  NC1-007-13-06

Charlotte, North Carolina  28255-0001

Attention:  Coleigh McKay

Telephone:  (704) 387-4054

Telecopier:  (704) 409-0174

Electronic Mail:  Coleigh.b.mckay@bankofamerica.com


 





















 


SCHEDULE 10.06


 


PROCESSING AND RECORDATION FEES


 


The Administrative Agent will charge a
processing and recordation fee (an “Assignment Fee”) in the amount of $3,500
for each assignment; provided, however, that in the event of two or more
concurrent assignments to members of the same Assignee Group (which may be
effected by a suballocation of an assigned amount among members of the same
Assignee Group) or two or more concurrent assignments by members of the same
Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and
members of its Assignee Group), the Assignee Fee will be $3,500 plus the amount
set forth below:  


 




	
  Transaction

  	
   

  	
  Assignment Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First four
  concurrent assignments or suballocations to members of an Assignee Group (or
  from members of an Assignee Group, as applicable)

  	
   

  	
  -0-

  	
   

  
	
  Each additional
  concurrent assignment or suballocation to a member of such Assignee Group (or
  from a member of such Assignee Group, as applicable)

  	
   

  	
  $

  	
  500

  	
   

  
					






 





















 


EXHIBIT B


 


FORM OF BRIDGE NOTE


 


FOR VALUE RECEIVED, the undersigned (the “Borrower”)
hereby promises to pay to                                                 
or registered assigns (the “Lender”), in accordance with the provisions
of the Agreement (as hereinafter defined), the principal amount of each Loan
from time to time made by the Lender to the Borrower under that certain Bridge
Loan Agreement, dated as of August 1, 2005 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Agreement;”
the terms defined therein being used herein as therein defined), among the
Borrower, the Lenders and other agents from time to time party thereto, and Banc
of America Bridge LLC, as Administrative Agent.


 


The Borrower promises to pay interest on the
unpaid principal amount of each Loan from the date of such Loan until such
principal amount is paid in full, at such interest rates and at such times as
provided in the Agreement.  All payments
of principal and interest shall be made to the Administrative Agent for the account
of the Lender in Dollars in immediately available funds at the Administrative
Agent’s Office.  If any amount is not
paid in full when due hereunder, such unpaid amount shall bear interest, to be
paid upon demand, from the due date thereof until the date of actual payment
(and before as well as after judgment) computed at the per annum rate set forth
in the Agreement.


 


This Note is one of the Bridge Notes referred
to in the Agreement, is entitled to the benefits thereof and may be prepaid in
whole or in part subject to the terms and conditions provided therein.  This Note is also entitled to the benefits of
the Guaranty.  Upon the occurrence and
continuation of one or more of the Events of Default specified in the
Agreement, all amounts then remaining unpaid on this Note shall become, or may
be declared to be, immediately due and payable all as provided in the
Agreement.  Loans made by the Lender
shall be evidenced by one or more loan accounts or records maintained by the
Lender in the ordinary course of business. 
The Lender may also attach schedules to this Note and endorse thereon
the date, amount and maturity of its Loans and payments with respect thereto.


 


The Borrower, for itself, its successors and
assigns, hereby waives diligence, presentment, protest and demand and notice of
protest, demand, dishonor and non-payment of this Note.


 





















 


THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


	
   

  	
  COPANO ENERGY, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


2





















 


LOANS AND PAYMENTS WITH RESPECT THERETO


 


	
  Date

  	
   

  	
  Amount of

  Loan Made

  	
   

  	
  End of

  Interest

  Period

  	
   

  	
  Amount of

  Principal or

  Interest

  Paid This

  Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


3





















 


EXHIBIT C


 


FORM OF ROLLOVER NOTE


 


FOR VALUE RECEIVED, the undersigned (the “Borrower”)
hereby promises to pay to                                               
or registered assigns (the “Lender”), in accordance with the provisions
of the Agreement (as hereinafter defined), the principal amount of each Loan
from time to time made by the Lender to the Borrower under that certain Bridge
Loan Agreement, dated as of August 1, 2005 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Agreement;”
the terms defined therein being used herein as therein defined), among the
Borrower, the Lenders and other agents from time to time party thereto, and
Banc of America Bridge LLC, as Administrative Agent.


 


The Borrower promises to pay interest on the
unpaid principal amount of each Loan from the date of such Loan until such
principal amount is paid in full, at such interest rates and at such times as
provided in the Agreement.  All payments
of principal and interest shall be made to the Administrative Agent for the
account of the Lender in Dollars in immediately available funds at the
Administrative Agent’s Office.  If any
amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum
rate set forth in the Agreement.


 


This Note is one of the Rollover Notes
referred to in the Agreement, is entitled to the benefits thereof and may be prepaid
in whole or in part subject to the terms and conditions provided therein.  This Note is also entitled to the benefits of
the Guaranty.  Upon the occurrence and
continuation of one or more of the Events of Default specified in the
Agreement, all amounts then remaining unpaid on this Note shall become, or may
be declared to be, immediately due and payable all as provided in the
Agreement.  Loans made by the Lender
shall be evidenced by one or more loan accounts or records maintained by the
Lender in the ordinary course of business. 
The Lender may also attach schedules to this Note and endorse thereon
the date, amount and maturity of its Loans and payments with respect thereto.


 


The Borrower, for itself, its successors and
assigns, hereby waives diligence, presentment, protest and demand and notice of
protest, demand, dishonor and non-payment of this Note.


 





















 


THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


	
   

  	
  COPANO ENERGY, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


2





















 


LOANS AND PAYMENTS WITH RESPECT THERETO


 


	
  Date

  	
   

  	
  Amount of

  Loan Made

  	
   

  	
  End of

  Interest

  Period

  	
   

  	
  Amount of

  Principal or

  Interest

  Paid This

  Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


3





















 


EXHIBIT D


 


FORM OF COMPLIANCE CERTIFICATE


 


Financial Statement Date:               ,


 


To:          Banc of America Bridge LLC, as
Administrative Agent


 


Ladies and
Gentlemen:


 


Reference is made to that certain Bridge Loan
Agreement, dated as of August 1, 2005 (as amended, restated, extended, supplemented
or otherwise modified in writing from time to time, the “Agreement;” the
terms defined therein being used herein as therein defined), among COPANO
ENERGY, L.L.C., a Delaware limited liability company (the “Borrower”),
the Lenders from time to time party thereto, and Banc of America Bridge LLC, as
Administrative Agent.


 


The undersigned Responsible Officer hereby
certifies as of the date hereof that he/she is the                                             
of the Borrower, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Administrative Agent on the behalf of the Borrower, and
that:


 


[Use following paragraph 1 for fiscal year-end
financial statements]


 


1.             Attached hereto as Schedule 1
are the year-end audited financial statements required by Section 6.01(a)
of the Agreement for the fiscal year of the Borrower ended as of the above
date, together with the report and opinion of a Registered Public Accounting
Firm required by such section.


 


[Use
following paragraph 1 for fiscal quarter-end
financial statements]


 


1.             Attached hereto as Schedule 1 are the unaudited
financial statements required by Section 6.01(b) of the Agreement
for the fiscal quarter of the Borrower ended as of the above date.  Such financial statements fairly present in
all material respects the financial condition, results of operations and cash
flows of the Borrower and its Subsidiaries in accordance with GAAP as at such
date and for such period, subject only to normal year-end audit adjustments and
the absence of footnotes.


 


2.             The undersigned has reviewed and is familiar with the
terms of the Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and condition (financial or
otherwise) of the Borrower during the accounting period covered by the attached
financial statements.


 


3.             A review of the activities of the Borrower during such
fiscal period has been made under the supervision of the undersigned with a
view to determining whether during such fiscal period the Borrower performed
and observed all its Obligations under the Loan Documents, and


 





















 


[select one:]


[to the knowledge of the undersigned after
due inquiry during such fiscal period, the Borrower performed and observed each
covenant and condition of the Loan Documents applicable to it, and no Default
has occurred and is continuing.]


 


–or–


[the following covenants or conditions have
not been performed or observed and the following is a list of each such Default
and its nature and status:]


 


1.             The representations and warranties of the Borrower
contained in Article V of the Agreement, and any representations and
warranties of the Borrower that
are contained in any document furnished at any time under or in connection with
the Loan Documents, are true and correct in all material respects on and as of
the date hereof, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
in all material respects as of such earlier date, and except that for purposes
of this Compliance Certificate, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 of the Agreement shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a)
and (b), respectively, of Section 6.01 of the Agreement, including
the statements in connection with which this Compliance Certificate is
delivered.


 


2.             The financial covenant analyses and information set
forth on Schedule 2 attached hereto are true and accurate in all
material respects on and as of the date of this Certificate.


 


IN WITNESS WHEREOF,
the undersigned has executed this Certificate as of                                                                                            ,
                                   .


 


	
   

  	
  COPANO ENERGY, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


2





















 


For the Quarter/Year ended                               (“Statement
Date”)


 


SCHEDULE 2
to the Compliance Certificate

($ in 000’s)


 


	
  I.

  	
   

  	
  Section 7.21(a)
  – Fixed Charge Coverage Ratio.

  
	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  Section 7.21(b)
  – Consolidated Interest Coverage Ratio.

  
	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  Section 7.21(c)
  – Consolidated Senior Leverage Ratio.

  
	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  Section 7.21(d)
  – Consolidated Total Leverage Ratio.

  



 


3





















 


For the Quarter/Year ended                           (“Statement
Date”)


 


SCHEDULE 3
to the Compliance Certificate

($ in 000’s)


 


Consolidated EBITDA
(in accordance with the definition of Consolidated
EBITDA

as set forth in the Agreement)


 


	
  Consolidated

  EBITDA

  	
   

  	
  Quarter

  Ended

  	
   

  	
  Quarter

  Ended

  	
   

  	
  Quarter

  Ended

  	
   

  	
  Quarter

  Ended

  	
   

  	
  Twelve

  Months

  Ended

  	
   

  
	
  Net Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  + distributions
  received

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  - equity
  earnings

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  + equity
  losses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  = Consolidated
  Net Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  + Consolidated
  Interest Charges

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  + income
  taxes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  + depreciation
  and amortization expense

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  + non-cash
  expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  - income
  tax credits

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  - non-cash
  income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  = Consolidated
  EBITDA

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


4





















 


EXHIBIT E


 


ASSIGNMENT AND ASSUMPTION


 


This Assignment and Assumption (this “Assignment
and Assumption”) is dated as of the Effective Date set forth below and is
entered into by and between [Insert name of Assignor]
(the “Assignor”) and [Insert name of Assignee]
(the “Assignee”).  Capitalized
terms used but not defined herein shall have the meanings given to them in the Bridge
Loan Agreement identified below (the “Bridge Loan Agreement”), receipt
of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth
in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.


 


For an agreed consideration, the Assignor
hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby
irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the Standard Terms and Conditions and the Bridge Loan Agreement,
as of the Effective Date inserted by the Administrative Agent as contemplated
below (i) all of the Assignor’s rights and obligations as a Lender under the Bridge
Loan Agreement and any other documents or instruments delivered pursuant
thereto to the extent related to the amount and percentage interest identified
below of all of such outstanding rights and obligations of the Assignor under
the respective facilities identified below and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Bridge Loan
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as, the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.


 


1.                                      Assignor:                                                                           


 


2.                                      Assignee:                                                                            [and
is an Affiliate/Approved Fund of [identify Lender]]


 


3.                                      Borrower:              Copano Energy, L.L.C.


 


4.                                      Administrative
Agent: Banc of America Bridge LLC, as the administrative agent under the Bridge
Loan Agreement


 


5.                                      Bridge
Loan Agreement:    Bridge Loan
Agreement, dated as of August 1, 2005, among Copano Energy, L.L.C., the Lenders
from time to time party thereto, and Banc
of America Bridge LLC, as Administrative Agent


 





















 


6.                                      Assigned
Interest:


 


	
  Facility Assigned

  	
   

  	
  Aggregate

  Amount of

  Commitment/Loans

  for all Lenders*

  	
   

  	
  Amount of

  Commitment/Loans

  Assigned*

  	
   

  	
  Percentage

  Assigned of

  Commitment/Loans

  	
   

  	
  CUSIP Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


[7.                                  Trade
Date:                                              


 


Effective Date:                                           ,
20       [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]


 


The terms set
forth in this Assignment and Assumption are hereby agreed to:


 


2





















 


	
   

  	
  ASSIGNOR

  
	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [NAME OF
  ASSIGNEE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Accepted:

  	
   

  
	
   

  	
   

  
	
  BANK OF
  AMERICA, N.A., as

  	
   

  
	
  Administrative
  Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Consented to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BANC OF
  AMERICA SECURITIES LLC, as

  	
   

  	
   

  
	
  Arranger

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


3





















 


ANNEX 1 TO ASSIGNMENT AND
ASSUMPTION


 


STANDARD TERMS AND CONDITIONS FOR


 


ASSIGNMENT AND ASSUMPTION


 


1.             Representations
and Warranties.


 


1.1.         Assignor.  The Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Bridge Loan Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.


 


1.2.         Assignee.  The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Bridge Loan
Agreement, (ii) it meets all requirements of an Eligible Assignee under the Bridge
Loan Agreement (subject to receipt of such consents as may be required under
the Bridge Loan Agreement), (iii) from and after the Effective Date, it shall
be bound by the provisions of the Bridge Loan Agreement as a Lender thereunder
and, to the extent of the Assigned Interest, shall have the obligations of a
Lender thereunder, (iv) it has received a copy of the Bridge Loan Agreement,
together with copies of the most recent financial statements delivered pursuant
to Section           thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Bridge Loan Agreement, duly completed and executed
by the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.


 


2.             Payments.  From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.


 


4





















 


3.             General
Provisions.  This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed
counterpart of a signature page of this Assignment and Assumption by telecopy
shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York.


 


5





















 


EXHIBIT F


 


FORM OF GUARANTY


 


(See attached)


 





















 


EXHIBIT G


 


OPINION MATTERS


 


The matters contained in the following
Sections of the Bridge Loan Agreement should be covered by the legal opinion:


 


	
  •

  	
  Section 5.01(a), (b) and
  (c)

  
	
   

  	
   

  
	
  •

  	
  Section 5.02

  
	
   

  	
   

  
	
  •

  	
  Section 5.03

  
	
   

  	
   

  
	
  •

  	
  Section 5.04

  
	
   

  	
   

  
	
  •

  	
  Section 5.06

  
	
   

  	
   

  
	
  •

  	
  Section 5.14(b)

  



 





















 


EXHIBIT H


 


SOLVENCY CERTIFICATE


 


THE UNDERSIGNED
HEREBY CERTIFIES AS FOLLOWS:


 


1.             I am the
chief financial officer of Copano Energy, L.L.C., a
Delaware limited liability company (“Borrower”).


 


2.             Reference
is made to that certain Bridge Loan Agreement, dated as of August 1, 2005 (as
it may be amended, supplemented or otherwise modified, the “Bridge Loan Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among BORROWER, the LENDERS
party thereto from time to time and BANC OF AMERICA BRIDGE LLC as Administrative
Agent.


 


3.             I have
reviewed the terms and provisions of the Bridge Loan Agreement, together with
each of the Loan Documents, and, in my opinion, have made, or have caused to be
made under my supervision, such examination or investigation as is necessary to
enable me to express an informed opinion as to the matters referred to herein.


 


4.             Based
upon my review and examination described in paragraph 3 above, I certify that
as of the date hereof, upon giving effect to the execution of the Bridge Loan
Agreement and the other Loan Documents by the Borrower and each Guarantor that
is a party thereto, the consummation of the transactions contemplated thereby,
the consummation of the transactions contemplated by the Credit Facility Loan
Documents and the consummation of the Acquisition, the Borrower and each
Guarantor is Solvent.


 


The foregoing certifications are
made and delivered as of August 1, 2005.


 


	
   

  	
  COPANO ENERGY, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Matthew J. Assiff

  
	
   

  	
  Title:

  	
  Senior Vice President and Chief

  
	
   

  	
   

  	
  Financial Officer

  
					



 





















 


EXHIBIT I


 


RISK MANAGEMENT
POLICY


 


(See attached)