**Exhibit 10.31**

 

**BRIDGE LOAN AGREEMENT**

 

Dated as ofAugust 1, 2005

 

among

 

**COPANOENERGY, L.L.C.,**as the Borrower,

 

**BANC OFAMERICA BRIDGE LLC,**as Administrative Agent

 

and

 

The OtherLenders Party Hereto

 

**BANC OFAMERICA SECURITIES LLC,**asSole Lead Arranger and Sole Book Manager

 

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**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                                                                 |   |
|                                                      |        |                                                                                  |        |  |

 

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| 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                                                                                         |   |

 

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| 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 |   |

 

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| **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 |   |

 

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**BRIDGE LOAN AGREEMENT**

 

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

 

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

 

Inconsideration of the mutual covenants and agreements herein contained, theparties hereto covenant and agree as follows:

 

# **ARTICLE I.DEFINITIONS AND ACCOUNTING TERMS**

#  

## **1.01        DefinedTerms. **As usedin 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 ofScissorTail pursuant to the Acquisition Agreement.

 

“AcquisitionAgreement” means that certain Membership Interest Purchase Agreement datedas 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.

 

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

 

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

 

“AdditionalDebt” means Indebtedness for borrowed money other than Indebtednessdescribed in Section 7.03 hereof.

 

“AdditionalEquity” means any contribution to the equity capital of any Person whetheror not occurring in connection with the issuance or sale of Equity Interests bysuch Person.

 

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

 

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

 

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“AdministrativeQuestionnaire” means an Administrative Questionnaire in a form supplied bythe Administrative Agent.

 

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

 

“AggregateCommitments” means the Commitments of all the Lenders.

 

“Agreement”means this Bridge Loan Agreement.

 

“ApplicablePercentage” means, with respect to any Lender at any time, the percentage(carried out to the ninth decimal place) of the Aggregate Commitmentsrepresented by (i) on or prior to the Closing Date, such Lender’s Commitment atsuch time and (ii) thereafter, the principal amount of such Lender’s Loans atsuch time.  The initial ApplicablePercentage of each Lender in respect of the Bridge Facility is set forthopposite the name of such Lender on Schedule 2.01 or in the Assignmentand Assumption pursuant to which such Lender becomes a party hereto, asapplicable.

 

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

 

“ApprovedFund” 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 thatadministers or manages a Lender.

 

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

 

“AssigneeGroup” means two or more Eligible Assignees that are Affiliates of oneanother or two or more Approved Funds managed by the same investment advisor.

 

“Assignmentand Assumption” means an assignment and assumption entered into by a Lenderand an Eligible Assignee (with the consent of any party whose consent isrequired by Section 10.06(b)), and accepted by the AdministrativeAgent, in substantially the form of Exhibit E or any other form approvedby the Administrative Agent.

 

“AttributableIndebtedness” means, on any date, (a) in respect of any capital lease ofany Person, the capitalized amount thereof that would appear on a balance sheetof such Person prepared as of such date in accordance with GAAP, and (b) inrespect of any Synthetic Lease Obligation, the capitalized amount of theremaining lease payments under the relevant lease that would appear on abalance sheet of such Person prepared as of such date in accordance with GAAPif such lease were accounted for as a capital lease.

 

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

 

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consolidatedstatements of income or operations, members’ capital and cash flows for suchfiscal year of the Borrower and its Subsidiaries, including the notes thereto.

 

“AvailableCash” for any fiscal quarter has the meaning set forth in the Borrower LLCAgreement.

 

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

 

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

 

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

 

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

 

“BorrowerLLC Agreement” means the Second Amended and Restated Limited LiabilityCompany Agreement of the Borrower dated as of November 15, 2004.

 

“BorrowerMaterials” has the meaning specified in Section 6.02.

 

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

 

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

 

“BridgeLoan” has the meaning specified in Section 2.01.

 

“BridgeMaturity Date” means the first anniversary of the Closing Date.

 

“BridgeNote” means a promissory note made by the Borrower in favor of a Lenderevidencing Bridge Loans made by such Lender, in substantially the form of ExhibitB.

 

“BusinessDay” means any day other than a Saturday, Sunday or other day on whichcommercial banks are authorized to close under the Laws of, or are in factclosed in, the state where the Administrative Agent’s Office is located and, ifsuch day relates to any Eurodollar Rate Loan, means any such day on whichdealings in Dollar deposits are conducted by and between banks in the Londoninterbank eurodollar market.

 

“CapitalExpenditures” means, for any period, for the Borrower and its RestrictedSubsidiaries on a consolidated basis, an amount equal to the sum of (i) theaggregate amount of all expenditures of the Borrower and its RestrictedSubsidiaries for fixed or capital assets made during such period which, inaccordance with GAAP, would be classified as capital expenditures plus (ii) theaggregate amount of all capitalized lease liabilities incurred during suchperiod.

 

“Change inLaw” means the occurrence, after the date of this Agreement, of any of thefollowing: (a) the adoption or taking effect of any law, rule, regulationor treaty, (b) any change

 

3

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

 

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

 

(a)           any “person” or “group” (as suchterms are used in Sections 13(d) and 14(d) of the Securities Exchange Actof 1934, but excluding any employee benefit plan of such person or itssubsidiaries, and any person or entity acting in its capacity as trustee, agentor other fiduciary or administrator of any such plan) becomes the “beneficialowner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Actof 1934), except that a person or group shall be deemed to have “beneficialownership” of all securities that such person or group has the right to acquire(such right, an “option right”), whether such right is exercisableimmediately 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 membersof the board of directors or equivalent governing body of the Borrower on a fully-dilutedbasis (and taking into account all such securities that such person or grouphas the right to acquire pursuant to any option right);

 

(b)           during any period of 12 consecutivemonths, a majority of the members of the board of directors or other equivalentgoverning body of the Borrower cease to be composed of individuals (i) who weremembers of that board or equivalent governing body on the first day of suchperiod, (ii) whose election or nomination to that board or equivalent governingbody was approved by individuals referred to in clause (i) aboveconstituting at the time of such election or nomination at least a majority ofthat board or equivalent governing body or (iii) whose election or nominationto that board or other equivalent governing body was approved by individualsreferred to in clauses (i) and (ii) above constituting at the time of suchelection or nomination at least a majority of that board or equivalentgoverning body (excluding, in the case of both clause (ii) and clause (iii), anyindividual whose initial nomination for, or assumption of office as, a memberof that board or equivalent governing body occurs as a result of an actual orthreatened solicitation of proxies or consents for the election or removal ofone or more directors by any person or group other than a solicitation for theelection of one or more directors by or on behalf of the board of directors);or

 

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

 

“Change of Control Notice” has the meaning specified in Section2.04(c).

 

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“Change of Control Offer” has the meaning specified in Section2.04(c).

 

“Change of Control Payment” has the meaning specified in Section2.04(c).

 

“Change of Control Payment Date” has the meaning specified in Section2.04(c).

 

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

 

“Code”means the Internal Revenue Code of 1986.

 

“ComericaCredit Facility” means that certain Credit Agreement among Copano HoustonCentral, L.L.C., Copano Processing, L.P., Copano NGL Services, L.P. andComerica Bank dated as of November 15, 2004, as the same has been amended priorto the date hereof.

 

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

 

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

 

“ConsolidatedEBITDA” means, for any period, for the Borrower and its RestrictedSubsidiaries on a consolidated basis, an amount equal to Consolidated NetIncome for such period plus (a) the following to the extent deducted incalculating such Consolidated Net Income: (i) Consolidated Interest Charges forsuch period, (ii) the provision for Federal, state, local and foreign incometaxes payable by the Borrower and its Restricted Subsidiaries for such period,(iii) depreciation and amortization expense and (iv) other expenses of theBorrower and its Restricted Subsidiaries reducing such Consolidated Net Incomewhich 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 NetIncome:  (i) Federal, state, local andforeign income tax credits of the Borrower and its Restricted Subsidiaries forsuch period and (ii) all non-cash items increasing Consolidated Net Income forsuch period; provided that for the purposes of Section 7.21, ifthe Borrower or any Restricted Subsidiary shall acquire or dispose of anymaterial property or a Subsidiary shall be redesignated as either anUnrestricted Subsidiary or a Restricted Subsidiary, in any case, during theperiod of four fiscal quarters ending on the last day of the fiscal quarterimmediately preceding the date of determination for which financial statementsare available and up to and including the date of the consummation of suchacquisition, disposition or redesignation, then Consolidated EBITDA shall becalculated, in a manner satisfactory to the Administrative Agent in itsreasonable discretion, after giving pro forma effect to such acquisition(including the revenues of the properties acquired), merger, disposition orredesignation, as if such acquisition, merger, disposition or redesignation hadoccurred on the first day of such period.

 

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

 

“ConsolidatedFixed Charges” means, for any period, for the Borrower and its RestrictedSubsidiaries on a consolidated basis, an amount equal to the sum (withoutduplication) of the following (in each case, eliminating all offsetting debitsand credits between the Borrower and its Restricted Subsidiaries and all otheritems required to be eliminated in the course of the preparation of consolidatedfinancial statements of the Borrower and its Restricted Subsidiaries inaccordance with GAAP): (a) Consolidated Interest Charges; plus (b) all fees, expensesand charges in respect of letters of credit issued for the account of theBorrower or any of its Restricted Subsidiaries, which are accrued during suchperiod and whether expensed in such period or capitalized; plus(c) payments of principal in respect of Indebtedness of the Borrower orits Restricted Subsidiaries (including the principal component of paymentsunder capital leases) paid or payable in such period (other than payments ofprincipal of Indebtedness under the Credit Agreement which is available to bereborrowed under the Credit Agreement).

 

“ConsolidatedFunded Indebtedness” means, as of any date of determination, for theBorrower and its Restricted Subsidiaries on a consolidated basis, the sum of(a) the outstanding principal amount of all obligations, whether current orlong-term, for borrowed money (including Obligations hereunder) and allobligations evidenced by bonds, debentures, notes, loan agreements or othersimilar instruments, (b) all purchase money Indebtedness, (c) all directobligations 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 orservices (other than trade accounts payable in the ordinary course ofbusiness), (e) Attributable Indebtedness in respect of capital leases andSynthetic Lease Obligations, (f) without duplication, all Guarantees withrespect to outstanding Indebtedness of the types specified in clauses (a)through (e) above of Persons other than the Borrower or any RestrictedSubsidiary, and (g) all Indebtedness of the types referred to in clauses (a)through (f) above of any partnership or joint venture (other than a jointventure that is itself a corporation or limited liability company) in which theBorrower or a Restricted Subsidiary is a general partner or joint venturer,unless such Indebtedness is expressly made non-recourse to the Borrower or suchRestricted Subsidiary.

 

“ConsolidatedInterest Charges” means, for any period, for the Borrower and itsRestricted Subsidiaries on a consolidated basis, the sum of (a) all interest,premium payments, debt discount, fees, charges and related expenses of theBorrower and its Restricted Subsidiaries in connection with borrowed money(including capitalized interest) or in connection with the deferred purchaseprice of assets, in each case to the extent treated as interest in accordancewith GAAP, excluding (i) distributions and payments to the Borrower’s preferredunitholders and warrantholders prior to November 15, 2004 and (ii) one-timecharges in respect of loan origination or similar fees and non-cash amortizedamounts with respect thereto, and (b) the portion of rent expense of theBorrower and its Restricted Subsidiaries with respect to such period undercapital leases that is treated as interest in accordance with GAAP.

 

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

 

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“ConsolidatedNet Income” means, for any period, for the Borrower and its RestrictedSubsidiaries’ gross revenues for such period, including any cash dividends ordistributions actually received from any other Person during such period, minusthe Borrower’s and its Restricted Subsidiaries’ expenses and other propercharges against income (including taxes on income to the extent imposed),determined on a consolidated basis in accordance with GAAP consistently appliedafter eliminating earnings or losses attributable to outstanding minorityinterests and excluding the net earnings of any Person other than a RestrictedSubsidiary in which the Borrower or any of its Subsidiaries has an ownershipinterest.  Consolidated Net Income shallnot include (i) any gain or loss from the Disposition of assets, (ii) anyextraordinary gains or losses or (iii) any non-cash gains or losses resultingfrom mark to market activity as a result of the implementation of Statement ofFinancial Accounting Standards 133, “Accounting for Derivative Instruments andHedging Activities” (“SFAS 133”).

 

“ConsolidatedSenior Funded Indebtedness” means, as of any date of determination,Consolidated Funded Indebtedness, but excluding Indebtedness under the BridgeFacility and Subordinated Indebtedness.

 

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

 

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

 

“ContractualObligation” means, as to any Person, any provision of any security issuedby such Person or of any agreement, instrument or other undertaking to whichsuch 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 causethe direction of the management or policies of a Person, whether through theability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”have meanings correlative thereto.

 

“CovenantRelease Date” means the first date on which (a) the Rollover Date shallhave occurred, (b) the shelf registration statement shall have been filed withthe SEC pursuant to Section 6.17(c), (c) no Specified Default shall haveoccurred and be continuing (unless in the case of a Specified Default under Section8.0l(a), such Default shall have been cured or waived), and (d) no Event ofDefault relating to Section 6.16 or Section 6.17 shall haveoccurred and be continuing (unless such Event of Default shall have been curedor waived).

 

“CovenantRelease Notice” means a certificate by the Chief Financial Officer of theBorrower certifying that each condition to the Covenant Release Date has beensatisfied.

 

“CreditAgreement” means the Credit Agreement dated as of the date hereof among theBorrower, the lenders party thereto and the Credit Facility Agent, as the samemay be amended, supplemented, modified, restated, renewed, refunded, replacedor refinanced from time to time.

 

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“CreditFacility Agent” means Bank of America, as the administrative agent pursuantto the Credit Agreement, and any successor as administrative agent thereunder.

 

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

 

“DebtorRelief Laws” means the Bankruptcy Code of the United States, and all otherliquidation, conservatorship, bankruptcy, assignment for the benefit ofcreditors, moratorium, rearrangement, receivership, insolvency, reorganization,or similar debtor relief Laws of the United States or other applicablejurisdictions from time to time in effect and affecting the rights of creditorsgenerally.

 

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

 

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

 

“Disposition”or “Dispose” means the sale, transfer, license, lease or otherdisposition (including any sale and leaseback transaction) of any property byany Person, including any sale, assignment, transfer or other disposal, with orwithout recourse, of any notes or accounts receivable or any rights and claimsassociated therewith.

 

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

 

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

 

“EngagementLetter” means the letter agreement, dated June 20, 2005, between the Borrowerand the Arranger.

 

“EnvironmentalLaws” means any and all Federal, state, local, and foreign statutes, laws,regulations, ordinances, rules, judgments, orders, decrees, permits,concessions, grants, franchises, licenses, agreements or governmentalrestrictions relating to pollution and the protection of the environment or therelease of any Hazardous Materials into the environment, including thoserelated to hazardous substances or wastes, air emissions and discharges towaste or public systems.

 

“Environmental Liability” means any liability, contingent orotherwise (including any liability for damages, costs of environmentalremediation, fines, penalties or indemnities), of the Borrower, any other LoanParty or any Restricted Subsidiary directly or indirectly resulting from orbased upon (a) violation of any Environmental Law, (b) the generation, use,handling, transportation, storage, treatment or disposal of any HazardousMaterials, (c) exposure to any Hazardous Materials, (d) the release or threatenedrelease of any Hazardous Materials into the environment or (e) any contract,agreement or other consensual arrangement pursuant to which liability isassumed or imposed with respect to any of the foregoing.

 

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“EquityInterests” means, with respect to any Person, all of the shares of capitalstock of (or other ownership or profit interests in) such Person, all of thewarrants, options or other rights for the purchase or acquisition from suchPerson of shares of capital stock of (or other ownership or profit interestsin) such Person, all of the securities convertible into or exchangeable forshares of capital stock of (or other ownership or profit interests in) suchPerson or warrants, rights or options for the purchase or acquisition from suchPerson of such shares (or such other interests), and all of the other ownershipor profit interests in such Person (including partnership, member or trustinterests therein), whether voting or nonvoting, and whether or not suchshares, warrants, options, rights or other interests are outstanding on anydate of determination.

 

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

 

“ERISAAffiliate” means any trade or business (whether or not incorporated) undercommon control with the Borrower within the meaning of Section 414(b) or (c) ofthe Code (and Sections 414(m) and (o) of the Code for purposes of provisionsrelating to Section 412 of the Code).

 

“ERISAEvent” means (a) a Reportable Event with respect to a Pension Plan; (b) awithdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subjectto Section 4063 of ERISA during a plan year in which it was a substantialemployer (as defined in Section 4001(a)(2) of ERISA) or a cessation ofoperations 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 Affiliatefrom a Multiemployer Plan or notification that a Multiemployer Plan is inreorganization; (d) the filing of a notice of intent to terminate, thetreatment of a Plan amendment as a termination under Sections 4041 or 4041A ofERISA, or the commencement of proceedings by the PBGC to terminate a PensionPlan or Multiemployer Plan; (e) an event or condition which constitutes groundsunder Section 4042 of ERISA for the termination of, or the appointment of atrustee to administer, any Pension Plan or Multiemployer Plan; or (f) theimposition of any liability under Title IV of ERISA, other than for PBGCpremiums due but not delinquent under Section 4007 of ERISA, upon the Borroweror any ERISA Affiliate.

 

“EurodollarRate” means for any Interest Period with respect to a Eurodollar Rate Loan,the rate per annum equal to the British Bankers Association LIBOR Rate (“BBALIBOR”), as published by Reuters (or other commercially available sourceproviding quotations of BBA LIBOR as designated by the Administrative Agentfrom time to time) at approximately 11:00 a.m., London time, two Business Daysprior to the commencement of such Interest Period, for Dollar deposits (fordelivery on the first day of such Interest Period) with a term equivalent tosuch Interest Period.  If such rate isnot available at such time for any reason, then the “Eurodollar Rate” for suchInterest Period shall be the rate per annum determined by the AdministrativeAgent to be the rate at which deposits in Dollars for delivery on the first dayof such Interest Period in same day funds in the approximate amount of theEurodollar Rate Loan being made, continued or converted by Bank of America andwith a term equivalent to such Interest Period would be offered by Bank ofAmerica’s London Branch to major banks in the London interbank Eurodollarmarket at their request at approximately 11:00 a.m. (London time) two BusinessDays prior to the commencement of such Interest Period.

 

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“EurodollarRate Loan” means a Loan that bears interest at a rate based on theEurodollar Rate.

 

“Event ofDefault” has the meaning specified in Section 8.01.

 

“ExchangeNote Indenture” has the meaning specified in Section 6.17.

 

“ExchangeNotes” means the senior exchange notes of the Borrower, guaranteed by theGuarantors, to be issued in exchange for certain Rollover Loans pursuant to Section2.03 and the Exchange Note Indenture, in the form to be attached as anexhibit to the Exchange Note Indenture.

 

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

 

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

 

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

 

“ExcludedTaxes” means, with respect to the Administrative Agent, any Lender or anyother recipient of any payment to be made by or on account of any obligation ofthe Borrower or any other Loan Party hereunder or under any other LoanDocument, (a) taxes imposed on or measured by its net income (howeverdenominated), and franchise taxes imposed on it, by the United States or by thejurisdiction (or any political subdivision thereof) under the laws of whichsuch recipient is organized or resident or in which its principal office islocated or in which it is doing or has done business or, in the case of anyLender, in which its applicable Lending Office is located or in which it isdoing or has done business, (b) any branch profits taxes imposed by the UnitedStates or any similar tax imposed by any other jurisdiction (or any politicalsubdivision thereof) in which the Borrower is located and (c) in the case of aForeign Lender (other than an assignee pursuant to a request by the Borrowerunder Section 10.13), any withholding tax that is imposed onamounts payable to such Foreign Lender at the time such Foreign Lender becomesa party hereto (or designates a new Lending Office) or is attributable to suchForeign Lender’s failure to comply with Section 3.01(h) or its failureor 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) wasentitled, at the time of designation of a new Lending Office (or assignment),to receive additional amounts from the Borrower with respect to suchwithholding tax pursuant to Section 3.01(a).

 

“ExistingCredit Agreement” means that certain Amended and Restated Credit Agreementdated 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/UpperGulf Coast, L.P., Copano Pipelines/South Texas, L.P., Copano Pipelines/UpperGulf Coast, L.P., Copano Pipelines/Hebbronville, L.P., Copano Energy Services/UpperGulf Coast, L.P., Bank of America, N.A. (successor by merger to Fleet NationalBank), as agent, and a syndicate of lenders, as amended or supplemented to theClosing Date.

 

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“FederalFunds Rate”means, forany day, the rate per annum equal to the weighted average of the rates onovernight Federal funds transactions with members of the Federal Reserve Systemarranged by Federal funds brokers on such day, as published by the FederalReserve Bank of New York on the Business Day next succeeding such day; providedthat (a) if such day is not a Business Day, the Federal Funds Rate for such dayshall be such rate on such transactions on the next preceding Business Day asso published on the next succeeding Business Day, and (b) if no such rate is sopublished on such next succeeding Business Day, the Federal Funds Rate for suchday shall be the average rate (rounded upward, if necessary, to a wholemultiple of 1/100 of 1%) charged to Bank of America on such day on suchtransactions as determined by the Administrative Agent.

 

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

 

“ForeignLender” means any Lender that is organized under the laws of a jurisdictionother than that in which the Borrower is resident for tax purposes.  For purposes of this definition, the UnitedStates, each State thereof and the District of Columbia shall be deemed toconstitute a single jurisdiction.

 

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

 

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

 

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

 

“GovernmentalAuthority” means the government of the United States or any other nation,or of any political subdivision thereof, whether state or local, and anyagency, authority, instrumentality, regulatory body, court, central bank orother entity exercising executive, legislative, judicial, taxing, regulatory oradministrative powers or functions of or pertaining to government (includingany supra-national bodies such as the European Union or the European CentralBank).

 

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

 

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

 

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obligee inrespect of such Indebtedness or other obligation of the payment or performanceof such Indebtedness or other obligation, (iii) to maintain working capital,equity capital or any other financial statement condition or liquidity or levelof income or cash flow of the primary obligor so as to enable the primaryobligor to pay such Indebtedness or other obligation, or (iv) entered into forthe purpose of assuring in any other manner the obligee in respect of suchIndebtedness or other obligation of the payment or performance thereof or toprotect 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 otherobligation of any other Person, whether or not such Indebtedness or otherobligation is assumed by such Person (or any right, contingent or otherwise, ofany holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemedto be an amount equal to the stated or determinable amount of the relatedprimary obligation, or portion thereof, in respect of which such Guarantee ismade.  The term “Guarantee” as a verb hasa corresponding meaning.

 

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

 

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

 

“Hazardous Materials” means all explosive or radioactivesubstances or wastes and all hazardous or toxic substances, wastes or otherpollutants, including petroleum or petroleum distillates, asbestos orasbestos-containing materials, polychlorinated biphenyls, radon gas, infectiousor medical wastes and all other substances or wastes of any nature regulatedpursuant 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 orequity index swaps or options, bond or bond price or bond index swaps or optionsor 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 anyother similar transactions or any combination of any of the foregoing(including any options to enter into any of the foregoing), whether or not anysuch transaction is governed by or subject to any master agreement, and (b) anyand all transactions of any kind, and the related confirmations, which aresubject to the terms and conditions of, or governed by, any form of masteragreement published by the International Swaps and Derivatives Association, Inc.,any International Foreign Exchange Master Agreement, or any other masteragreement (any such master agreement, together with any related schedules, a “MasterAgreement”), including any such obligations or liabilities under any MasterAgreement.

 

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

 

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market or other readily available quotations provided by any recognizeddealer in such Hedging Contracts (which may include a Lender or any Affiliateof a Lender).

 

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

 

(a)           all obligations of such Person for borrowed moneyand all obligations of such Person evidenced by bonds, debentures, notes, loanagreements or other similar instruments;

 

(b)           all direct or contingent obligations of such Personarising 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 HedgingContract;

 

(d)           all obligations of such Person to pay the deferredpurchase price of property or services (other than trade accounts payable inthe ordinary course of business and, in each case, not past due for more than 60days 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 titleretention agreements), whether or not such indebtedness shall have been assumedby 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 Interestin such Person (other than as permitted pursuant to Section 7.06) or anyother Person, valued, in the case of a redeemable preferred interest, at thegreater of its voluntary or involuntary liquidation preference plusaccrued and unpaid dividends; and

 

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

 

For allpurposes hereof, the Indebtedness of any Person shall include the Indebtednessof any partnership or joint venture (other than a joint venture that is itselfa corporation or limited liability company) in which such Person is a generalpartner or a joint venturer, unless such Indebtedness is expressly madenon-recourse to such Person.  The amountof any net obligation under any Hedging Contract on any date shall be deemed tobe the Hedging Termination Value thereof as of such date.  The amount of any capital lease or SyntheticLease Obligation as of any date shall be deemed to be the amount ofAttributable Indebtedness in respect thereof as of such date.

 

“IndemnifiedTaxes” means Taxes other than Excluded Taxes.

 

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

 

“Information”has the meaning specified in Section 10.07.

 

“InitialFinancial Statements” means:

 

(a)           the Audited Financial Statements;

 

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

 

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

 

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

 

“InterestPayment Date” means the last day of each Interest Period and the applicableMaturity Date.

 

“InterestPeriod” means each successive three-month period commencing on the ClosingDate; provided that:

 

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

 

(ii)           any Interest Period that begins on the lastBusiness Day of a calendar month (or on a day for which there is no numericallycorresponding 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 suchInterest Period; and

 

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

 

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

 

“Investment”means, as to any Person, any direct or indirect acquisition or investment bysuch Person, whether by means of (a) the purchase or other acquisition ofEquity Interests of another Person, or (b) a loan, advance or capitalcontribution to, Guarantee or assumption of Indebtedness of, or purchase orother acquisition of any other Indebtedness or Equity Interests of, anotherPerson, including any partnership or joint venture interest in such otherPerson and any arrangement pursuant to which the investor GuaranteesIndebtedness of such other Person.  Forpurposes of covenant compliance, the amount of any Investment shall be theamount actually

 

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

 

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

 

“IRS”means the United States Internal Revenue Service.

 

“KinderMorgan Gas Processing Agreement” means that certain Gas Processing Contractdated as of January 1, 2004, between Copano Processing, L.P. and Kinder Morgan TexasPipeline, L.P., and that certain related Letter Agreement between CopanoProcessing, L.P. and Kinder Morgan Texas Pipeline, L.P., regarding prepaymentof carbon dioxide handling fees, together with all amendments and modificationsthereto permitted to be made by this Agreement.

 

“Laws”means, collectively, all international, foreign, Federal, state and localstatutes, treaties, rules, guidelines, regulations, ordinances, codes andadministrative or judicial precedents or authorities, including the interpretationor administration thereof by any Governmental Authority charged with theenforcement, interpretation or administration thereof, and all applicableadministrative orders, directed duties, requests, licenses, authorizations andpermits of, and agreements with, any Governmental Authority, in each casewhether or not having the force of law.

 

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

 

“LendingOffice” means, as to any Lender, the office or offices of such Lenderdescribed as such in such Lender’s Administrative Questionnaire, or such otheroffice or offices as a Lender may from time to time notify the Borrower and theAdministrative Agent.

 

“Lien”means any mortgage, pledge, hypothecation, assignment, deposit arrangement,encumbrance, lien (statutory or other), charge, or preference, priority orother security interest or preferential arrangement in the nature of a securityinterest of any kind or nature whatsoever (including any conditional sale orother title retention agreement, any easement, right of way or otherencumbrance on title to real property, and any financing lease havingsubstantially 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, theGuaranty and all other agreements, certificates, documents, instruments andwritings at any time delivered in connection herewith (exclusive of term sheetsand commitment letters).

 

“LoanParties” means, collectively, the Borrower and each Guarantor.

 

“MaintenanceCapital Expenditures” means, for any period, all amounts properlyclassified as capital expenditures under GAAP that are employed to replacepartially or fully depreciated assets to maintain the existing operatingcapacity of assets and to extend their useful lives, or other amountsclassified as capital expenditures under GAAP that are incurred in maintainingexisting system volumes and related cash flows, excluding all costs associatedwith new well hook-ups.

 

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

 

“MaterialContracts” means (a) the Acquisition Documents, (b) the Kinder Morgan GasProcessing Agreement, (c) the New Dominion Gas Purchase Agreement, and (d) anyother contract or arrangement to which the Borrower or any of its RestrictedSubsidiaries is a party (other than the Loan Documents) that constitutes tenpercent (10%) or more of the aggregate revenue of the Loan Parties on aconsolidated basis.

 

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

 

“MaximumRate” has the meaning specified in Section 10.09.

 

“MinimumRate” 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 Periodafter the Closing Date, and the applicable percentage per annum will continueto increase by 0.50% per annum at the end of each Interest Period thereafter.

 

“Moody’s”means Moody’s Investors Service, Inc.****and anysuccessor thereto.

 

“MultiemployerPlan” 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 tomake contributions, or during the preceding five plan years, has made or beenobligated to make contributions.

 

“Net CashProceeds” means the remainder of (a) the gross proceeds received by anyLoan Party from (i) a Disposition,****(ii) theissuance of Additional Debt, or (iii) the issuance of Additional Equity, asapplicable, less (b) underwriter discounts and commissions, investment bankingfees, legal, accounting and other professional fees and expenses, and otherusual and customary transaction costs, in each case only to the extent paid orpayable by a Loan Party in cash and related to such Disposition, AdditionalDebt issuance, or Additional Equity issuance, as applicable.

 

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

 

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

 

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and/or anyother 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 ofthe property of the Borrower or any Restricted Subsidiary, whether forprincipal, interest, fees, expenses or otherwise; and (b) with respect to anysuch Indebtedness of any Unrestricted Subsidiary in which the Borrower directlyor indirectly owns 75% or more of the Equity Interests thereof, the terms andconditions relating to the non-recourse nature of such Indebtedness are in formand 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 andduties of, any Loan Party arising under any Loan Document or otherwise withrespect to any****Loan, whether direct or indirect(including those acquired by assumption), absolute or contingent, due or tobecome due, now existing or hereafter arising and including interest and feesthat accrue after the commencement by or against any Loan Party of anyproceeding under any Debtor Relief Laws naming such Person as the debtor insuch proceeding, regardless of whether such interest and fees are allowedclaims in such proceeding.

 

“OfferingMaterials” has the meaning specified in Section 6.16.

 

“OfferingRequirements” means the provisions, conditions, requirements,recommendations and preferences (a) under Regulation S-X under the SecuritiesAct (“Regulation S-X”) and all other accounting rules and regulations ofthe SEC promulgated under the Securities Act, applicable to a registrationstatement under the Securities Act on Form S-1, (b) as would be necessary forcustomary “comfort” (including “negative assurance” comfort) from independentaccountants in connection with any offering of any Permanent Financing, and (c)as are customary and appropriate for such a document and as may otherwise bereasonably required by the Arranger (including, without limitation, allaudited, *pro forma*and otherfinancial statements and schedules of the type that would be required in aregistered public offering of any Permanent Financing on Form S-1).

 

“OrganizationDocuments” means, (a) with respect to any corporation, the certificate orarticles of incorporation and the bylaws (or equivalent or comparableconstitutive documents with respect to any non-U.S. jurisdiction); (b) withrespect to any limited liability company, the certificate or articles offormation or organization and operating agreement; and (c) with respect to anypartnership, joint venture, trust or other form of business entity, thepartnership, joint venture or other applicable agreement of formation ororganization and any agreement, instrument, filing or notice with respectthereto filed in connection with its formation or organization with theapplicable Governmental Authority in the jurisdiction of its formation ororganization and, if applicable, any certificate or articles of formation ororganization of such entity.

 

“OtherTaxes” means all present or future stamp or documentary taxes or any otherexcise or property taxes, charges or similar levies arising from any paymentmade hereunder or under any other Loan Document or from the execution, deliveryor enforcement of, or otherwise with respect to, this Agreement or any otherLoan Document.

 

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

 

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

 

“PBGC”means the Pension Benefit Guaranty Corporation.

 

“PensionPlan” means any “employee pension benefit plan” (as such term is defined inSection 3(2) of ERISA), other than a Multiemployer Plan, that is subject toTitle IV of ERISA and is sponsored or maintained by the Borrower or any ERISAAffiliate or to which the Borrower or any ERISA Affiliate contributes or has anobligation to contribute, or in the case of a multiple employer or other plandescribed in Section 4064(a) of ERISA, has made contributions at any timeduring the immediately preceding five plan years.

 

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

 

“PermanentFinancing Documents” means, with respect to any Permanent Financing, theagreements, indentures, notes, guaranties, supplements, instruments and otherdocuments (including any exchange notes and securities) pursuant to which suchPermanent Financing, if any, is issued or incurred or otherwise setting forththe terms of the Permanent Financing.

 

“Person”means any natural person, corporation, limited liability company, trust, jointventure, association, company, partnership, Governmental Authority or otherentity.

 

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

 

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

 

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

 

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

 

“RelatedParties” means, with respect to any Person, such Person’s Affiliates andthe partners, directors, officers, employees, agents and advisors of suchPerson and of such Person’s Affiliates.

 

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

 

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“RequiredLenders” means, as of any date of determination, registered holders ofExchange Notes and Lenders holding more than 50% of the sum of the OutstandingAmounts.

 

“ResponsibleOfficer” means the chief executive officer, president, chief financialofficer, vice president, manager, treasurer or assistant treasurer of a LoanParty (or any general partner, managing member or Person in a similar capacitywith respect thereto).  Any documentdelivered hereunder that is signed by a Responsible Officer of a Loan Partyshall be conclusively presumed to have been authorized by all necessarycorporate, partnership and/or other action on the part of such Loan Party andsuch Responsible Officer shall be conclusively presumed to have acted on behalfof such Loan Party.

 

“RestrictedPayment” means any dividend or other distribution (whether in cash,securities or other property) with respect to any Equity Interest of theBorrower 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, cancellationor termination of any such Equity Interest, or on account of any return ofcapital to the Borrower’s stockholders, partners or members (or the equivalentPerson thereof).

 

“RestrictedSubsidiary” means each Subsidiary of the Borrower that is not anUnrestricted Subsidiary.

 

“RiskManagement Policy” means the Risk Management Policy attached hereto as ExhibitI, as the same may be revised, amended, supplemented, modified or replacedfrom time to time (with any material revisions, amendments, supplements,modifications or replacements being reasonably satisfactory to AdministrativeAgent).

 

“RolloverDate” means the first anniversary of the Closing Date if the conditions setforth in Section 2.02 shall have been satisfied, or such later date as permittedby Section 2.02.

 

“RolloverLoan” has the meaning specified in Section 2.02.

 

“RolloverMaturity Date” means, if the Rollover Date shall have occurred, the seventhanniversary of the Closing Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“SecuritiesLaws” means the Securities Act, the Securities Exchange Act of 1934,Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standardsand practices promulgated, approved or incorporated by the SEC or the PublicCompany Accounting Oversight Board, as each of the foregoing may be amended andin 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 isgreater than the total amount of liabilities, including, without limitation,contingent liabilities, of such Person, (ii) the present fair salable value ofthe assets of such Person is not less than the amount that will be required topay the probable liability of such Person on its debts as they become absoluteand matured, (iii) such Person does not intend to, and does not believe that itwill, incur debts or liabilities beyond such Person’s ability to pay such debtsand liabilities as they mature, and (iv) such Person is not engaged in businessor a transaction, and is not about to engage in business or a transaction, forwhich such Person’s property would constitute an unreasonably small capital,and (b) such Loan Party is “solvent” within the meaning given that term andsimilar terms under applicable laws relating to fraudulent transfers andconveyances.  The amount of contingentliabilities at any time shall be computed as the amount that, in the light ofall the facts and circumstances existing at such time, represents the amountthat can reasonably be expected to become an actual or matured liability(irrespective of whether such contingent liabilities meet the criteria foraccrual under Statement of Financial Accounting Standard No. 5).

 

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

 

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

 

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

 

“SubordinateDocuments” means those agreements, documents, instruments and writings atany time delivered in connection with or evidencing Subordinated Debt, asamended, supplemented or restated.

 

“SubordinatedDebt” means all Indebtedness of the Borrower and its RestrictedSubsidiaries on a consolidated basis for money borrowed (a) the structure,amount, term, tenor and incurrence thereof is approved in writing by theRequired Lenders, (b) on terms and conditions less restrictive than the LoanDocuments, and (c) subordinated, upon terms satisfactory to the AdministrativeAgent (which may include payment restrictions, restrictions on enforcement ofremedies, restrictions on amendment or modification of the terms and conditionsof such Indebtedness and restrictions on such creditor’s rights in insolvencyor bankruptcy proceedings), in right of payment to the payment in full in cashof all Obligations.

 

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“Subsidiary”of a Person means a corporation, partnership, joint venture, limited liabilitycompany or other business entity of which a majority of the shares ofsecurities or other interests having ordinary voting power for the election ofdirectors or other governing body (other than securities or interests havingsuch power only by reason of the happening of a contingency) are at the timebeneficially owned, or the management of which is otherwise controlled,directly, or indirectly through one or more intermediaries, or both, by suchPerson.  Unless otherwise specified, allreferences herein to a “Subsidiary” or to “Subsidiaries” shall refer to aSubsidiary or Subsidiaries of the Borrower.

 

“SyndicationInformation” means any written marketing materials, including all financialinformation and data, and any information memorandum used by the Arranger inconnection with the syndication of the Bridge Facility.

 

“SyntheticLease Obligation” means the monetary obligation of a Person under (a) aso-called synthetic, off-balance sheet or tax retention lease, or (b) anagreement for the use or possession of property creating obligations that donot appear on the balance sheet of such Person but which, upon the insolvencyor bankruptcy of such Person, would be characterized as the indebtedness ofsuch 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 GovernmentalAuthority, including any interest, additions to tax or penalties applicablethereto.

 

“ThresholdAmount” means $5,000,000.

 

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

 

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

 

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

 

## **1.02        Other InterpretiveProvisions. **Withreference to this Agreement and each other Loan Document, unless otherwisespecified herein or in such other Loan Document:

##  

### (a)           The definitions of terms herein shallapply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronounshall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes”and “including” shall be deemed to be followed by the phrase “withoutlimitation.”  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 suchagreement, instrument or other document as from time to time amended, supplementedor

 

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### otherwise modified (subject to anyrestrictions on such amendments, supplements or modifications set forth hereinor in any other Loan Document), (ii) any reference herein to any Person shallbe construed to include such Person’s successors and assigns, (iii) the words “herein,”“hereof” and “hereunder,” and words of similar import when usedin any Loan Document, shall be construed to refer to such Loan Document in itsentirety and not to any particular provision thereof, (iv) all references in aLoan Document to Articles, Sections, Exhibits and Schedules shall be construedto refer to Articles and Sections of, and Exhibits and Schedules to, the LoanDocument in which such references appear, (v) any reference to any Law shallinclude all statutory and regulatory provisions consolidating, amending,replacing or interpreting such Law and any reference to any Law or regulationshall, 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 effectand 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 timefrom a specified date to a later specified date, the word “from” means “fromand including;” the words “to” and “until” each mean “tobut excluding;” and the word “through” means “to and including.”

###  

### (c)           Section headings herein and in theother Loan Documents are included for convenience of reference only and shallnot affect the interpretation of this Agreement or any other Loan Document.

###  

## **1.03        AccountingTerms.**

##  

### (a)           Generally.  Allaccounting terms not specifically or completely defined herein shall beconstrued in conformity with, and all financial data (including financialratios and other financial calculations) required to be submitted pursuant tothis Agreement shall be prepared in conformity with, GAAP applied on aconsistent basis, as in effect from time to time, applied in a mannerconsistent with that used in preparing the Audited Financial Statements, exceptas otherwise specifically prescribed herein.

###  

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

###  

### (c)           Consolidation of Variable InterestEntities.  All references herein to consolidated financialstatements of the Borrower and its Subsidiaries or to the determination of anyamount for the Borrower and its Subsidiaries on a consolidated basis or anysimilar reference shall, in

 

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

###  

## **1.04        Rounding.**  Any financial ratios required to bemaintained by the Borrower pursuant to this Agreement shall be calculated bydividing the appropriate component by the other component, carrying the resultto one place more than the number of places by which such ratio is expressedherein and rounding the result up or down to the nearest number (with arounding-up if there is no nearest number).

##  

## **1.05        Timesof Day. **Unlessotherwise specified, all references herein to times of day shall be referencesto Eastern time (daylight or standard, as applicable).

##  

# **ARTICLE II.THE BRIDGE FACILITY**

#  

## **2.01        TheBridge Loans.** (a) Subject to the terms and conditions set forth herein, each Lenderseverally agrees to make a loan (each a “Bridge Loan”) to the Borroweron the Closing Date in the amount of such Lender’s Commitment.  The Bridge Borrowing shall consist of BridgeLoans made simultaneously by the Lenders in accordance with their respectiveApplicable Percentage of the Bridge Facility. Amounts borrowed under this Section 2.01 and repaid or prepaidmay not be reborrowed.

##  

### (b)           Each Lender shall make the amount ofits Bridge Loan available to the Administrative Agent in immediately availablefunds at the Administrative Agent’s Office not later than 1:00 p.m. on theClosing Date.  Upon satisfaction of theconditions set forth in Section 4.01, the Administrative Agent shallmake all funds so received available to the Borrower in like funds as receivedby the Administrative Agent either by (i) crediting the account of the Borroweron 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 instructionsprovided to (and reasonably acceptable to) the Administrative Agent by theBorrower.

###  

### (c)           The Administrative Agent shallpromptly notify the Borrower and the Lenders of the interest rate applicable toany Interest Period upon determination of such interest rate.

###  

## **2.02        Conversion to RolloverLoans.**  (a) Onthe Bridge Maturity Date, or such later date as permitted by the next sentenceof this Section 2.02(a), the Bridge Loans of each Lender shallautomatically be converted to a senior term loan maturing on the RolloverMaturity Date (each, a “Rollover Loan”) if the following conditionsshall have been satisfied on such date: (i) no Default or Event of Defaultshall have occurred and be continuing, (ii) all fees due to the Arranger andthe Lenders shall have been paid in full and (iii) the Administrative Agentshall have received a certificate from a Responsible Officer of the Borrowercertifying to the foregoing and requesting a conversion of the Bridge Loans toRollover Loans (the “Conversion Notice”).  If the foregoing conditions shall not havebeen satisfied on the Bridge Maturity Date, the Rollover Date shall not occurunless and until (x) each Lender waives satisfaction of the foregoingconditions, or (y) each Lender otherwise agrees.  The Borrower shall repay to the

 

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

##  

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

###  

### (c)           Upon the Rollover Date, theobligations of the Borrower and each of its Subsidiaries under Section 7.21shall be discharged and released and, thereafter, any failure to comply with Section7.21 will not constitute a Default or Event of Default; provided, that,notwithstanding the foregoing, if it is subsequently determined or discoveredthat a Default under Section 8.0l(f) or (g) had occurred and wascontinuing 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 berescinded and the provisions of Section 7.21 shall be reinstated andapply to the Borrower and each of its Subsidiaries, in each case, as in effectprior to giving effect to the release and modifications contemplated in this Section2.02(c).

###  

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

##  

### (b)           Not later than the third Business Dayafter delivery of an Exchange Notice:

###  

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

 

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#### (ii)           the Administrative Agent shalldeliver the applicable Exchange Notes to the Exchange Note Trustee forauthentication and delivery to the holder or holders thereof specified in theExchange Notice.

####  

### (c)           Each Exchange Note issued pursuant tothis Section 2.03 shall continue to bear and accrue interest at the rate*per annum*applicable to theRollover Loans until such rate *per annum*shallbecome fixed in accordance with the terms of the Exchange Note Indenture, inwhich case, the applicable rate *per annum*shallbe determined pursuant to the Exchange Note Indenture.  Unless otherwise provided in the ExchangeNote Indenture, accrued but unpaid interest on Rollover Loans through the dateof such exchange shall be paid on the date of such exchange, together with anyadditional amounts required pursuant to Section 3.05, and the ExchangeNotes received in such exchange shall bear and accrue interest from andincluding the date of issuance of such Exchange Note.

###  

### (d)           If the Covenant Release Date shallhave occurred, upon delivery of a Covenant Release Notice to the AdministrativeAgent, (A) the obligations of the Borrower and each of its Subsidiaries undereach of the covenants set forth in Article VI and Article VIIshall be discharged and released and, thereafter, any failure to comply withthose covenants will not constitute a Default or Event of Default, (B)concurrently with such discharge and release, each of the covenants set forthin the Exchange Note Indenture applicable to the Borrower or the “Company”, the“Issuer”, a “Guarantor”, a “Subsidiary” or a “Restricted Subsidiary” thereundershall automatically be incorporated herein by reference, and form a parthereof, and shall automatically apply mutatis mutandis to the Borrower and eachof its Subsidiaries hereunder as if the Borrower were the “Company” or the “Issuer”thereunder, each Guarantor were a “Guarantor” thereunder and each Subsidiary ofthe Borrower were a “Subsidiary” and a “Restricted Subsidiary” or “UnrestrictedSubsidiary” of the Borrower, as applicable, thereunder and the AdministrativeAgent were the “Trustee” or “Indenture Trustee” thereunder, and the Borrowerand 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) eachof the Events of Default set forth in Section 8.01 shall replaced intheir entirety with the events of default specified in the Exchange NotesIndenture; provided, that, notwithstanding the foregoing, if it is subsequentlydetermined 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 ReleaseCertificate, (x) such Default and any other Default then continuing shallnonetheless be, and continue to constitute, a Default hereunder, which, for theavoidance of doubt shall automatically be reinstated, and this Section2.03(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 theprovisions of Articles VI, VII and VIII shall be reinstated andapply to the Borrower and each of its Subsidiaries or Restricted Subsidiaries,as applicable, in each case, as in effect prior to giving effect to thedischarges, releases, replacements and modifications contemplated in this Section2.03(d).

 

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

 

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## in a principal amount of $1,000,000 or awhole multiple of $500,000 in excess thereof or, if less, the entire principalamount thereof then outstanding.  Eachsuch notice shall specify the date and amount of such prepayment.  The Administrative Agent will promptly notifyeach Lender of its receipt of each such notice, and of the amount of suchLender’s ratable portion of such prepayment (based on such Lender’s ApplicablePercentage).  If such notice is given bythe Borrower, the Borrower shall make such prepayment and the payment amountspecified in such notice shall be due and payable on the date specifiedtherein.  Any prepayment of a EurodollarRate Loan shall be accompanied by all accrued interest thereon, together withany additional amounts required pursuant to Section 3.05.

##  

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

###  

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

####  

#### (iii)          Uponthe incurrence or issuance by any Loan Party or any of its Subsidiaries of anyunsecured Indebtedness not permitted to be incurred or issued pursuant to Section7.03, the Borrower shall prepay an aggregate principal amount of the BridgeFacility equal to 100% of all Net Cash Proceeds received therefrom immediatelyupon receipt thereof.

####  

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

###  

#### (ii)           Uponthe occurrence of a Change of Control, each Lender will have the right to requirethe Borrower to prepay all or any part of such Lender’s Loans pursuant to theChange of Control Offer at a prepayment price in cash equal to 101% of theaggregate principal amount thereof plus accrued and unpaid interestthereon, if any, to the date of prepayment (the “Change of Control Payment”).  Within 10 days following any Change ofControl, the Borrower will deliver a written notice (the “Change of ControlNotice”) to the Administrative Agent in the manner provided for notices in Section10.02 and the Administrative Agent will promptly forward such Change ofControl Notice to each Lender in such manner. The Change of Control Notice shall describe the transaction ortransactions that constituted the Change of Control and offer to repay theLoans on the date specified in such Change of Control Notice, which date shallbe no earlier than 30 days but no later than 60 days from the date of theoccurrence of the Change of Control (the “Change of Control Payment Date”),pursuant to the procedures set forth below.

 

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#### (iii)          TheChange of Control Offer shall remain open from the time of mailing of theChange of Control Notice until ten Business Days prior to the anticipatedChange of Control Payment Date.  TheChange of Control Notice shall contain all instructions and materials necessaryto enable the Lenders to elect to be prepaid pursuant to the Change of ControlOffer.  To accept the Change of ControlOffer, in whole or in part, a Lender shall notify the Borrower in writing (witha copy to the Administrative Agent) in the manner provided for notices in Section10.02 or as otherwise provided in the Change of Control Offer not laterthan ten Business Days prior to the anticipated Change of Control Payment Date.

####  

#### (iv)          Onthe Change of Control Payment Date, the Borrower shall (A) make the Change ofControl Payment for each Loan (or portion thereof) elected to be repaidpursuant to the Change of Control Offer by delivering the Change of ControlPayments to the Administrative Agent for transmittal to the applicable Lenders(such delivery by the Borrower constituting the satisfaction of its obligationsto make such Change of Control Payments) and (B) deliver to each such Lender anew Note (if requested) equal in principal amount (excluding premiums, if any)to the unpurchased portion of the corresponding Note surrendered by suchLender, if any.  Each Lender requesting anew Note shall, as a condition to the issuance of a new Note deliver itsexisting Note to the Borrower or to the Administrative Agent on the Borrower’sbehalf in which case the Administrative Agent shall deliver such Note to theBorrower upon the Borrower’s issuance of the new Note.  The Administrative Agent will notify theremaining Lenders of the results of the Change of Control Offer on or as soonas practicable after the Change of Control Payment Date.

####  

## **2.05****        Reduction ofCommitments. **The aggregateCommitments shall be automatically and permanently reduced to zero on the dateof the Bridge Borrowing.

##  

## **2.06****        Repayment of BridgeLoans. **The Bridge Loans will matureon the Bridge Maturity Date.  Subject to Section2.02, the Borrower shall repay to the Administrative Agent for the ratableaccount of the Lenders the aggregate principal amount of the Bridge Loans onthe Bridge Maturity Date.

##  

## **2.07****        Interest. **(a) Subject to the provisions of Section2.07(b), each Loan shall bear and accrue interest on the outstandingprincipal amount thereof for each Interest Period at a rate equal to thegreater of (a) the Eurodollar Rate for such Interest Period (as determinedpursuant to Section 2.09) plus the Applicable Rate and (b) the MinimumRate in effect during such Interest Period; provided, that, except asprovided in Section 2.07(b), such interest shall not exceed a rate of11.00% per annum; provided, further, that the portion, if any, ofany interest payable at a rate in excess of 10.50% per annum may be paid bycapitalizing such interest and adding it to the principal of such Loan.

##  

### (b)           Notwithstandingthe limitations set forth in Section 2.07(a):

###  

#### (i)            uponthe occurrence and during the continuance of any Specified Default, theBorrower shall pay interest on all outstanding Obligations under the LoanDocuments

 

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

####  

#### (ii)           ifa shelf registration statement shall not have been filed pursuant to Section6.17(c) on or prior to the date that is 270 days after the Closing Date, theBorrower shall pay additional interest on all outstanding Obligations under theLoan 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 thatis 271 days after the Closing Date to and excluding the date that is 360 daysafter the Closing Date, (B) 0.50% *per annum*fromand including the date that is 360 days after the Closing Date to and excludingthe date that is 450 days after the Closing Date, (C) 0.75% *per annum*from and including the date thatis 450 days after the Closing Date to and excluding the date that is 540 daysafter the Closing Date, and (D) 1.00% *perannum*from and including the date that is 540 days after the ClosingDate to and excluding the date on which the shelf registration shall have beenfiled;

####  

#### (iii)          ifa shelf registration statement shall have been filed, but not declaredeffective, pursuant to Section 6.17(c) on or prior to the date that is450 days after the Closing Date, the Borrower shall pay additional interest onall outstanding Obligations under the Loan Documents until the shelfregistration shall have been declared effective at a rate per annum equal to0.25% *per annum*from andincluding the date that is 451 days after the Closing Date to and excluding thedate on which the shelf registration shall have been declared effective; and

####  

#### (iv)          ifthe Offering Materials shall not have been completed and made availablepursuant to Section 6.16(a) on or prior to the date that is 60 daysafter the Closing Date, the Borrower shall pay additional interest on alloutstanding Obligations; under the Loan Documents until the Offering Materialsshall have been completed and made available at a rate *per annum*equal to (A) 0.25% *per annum*from and including the date thatis 61 days after the Closing Date to and excluding the date that is 90 daysafter the Closing Date, (B) 0.50% *per annum*fromand including the date that is 90 days after the Closing Date to and excludingthe date that is 180 days after the Closing Date, (C) 0.75% *per annum*from and including the date thatis 180 days after the Closing Date to and excluding the date that is 270 daysafter the Closing Date, and (D) 1.00% *perannum*from and including the date that is 270 days after the ClosingDate to and excluding the date on which the Offering Materials shall have beencompleted and made available;

####  

provided,that (A) interest payable under clauses (i), (ii), (iii) and (iv) shallbe cumulative and not mutually exclusive, and (B) the aggregate rate *per annum*with respect to additionalinterest payable pursuant to clauses (ii) and (iv) shall not exceed1.00% *per annum.*

 

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

 

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

##  

## **2.09****        Computation of Interestand Fees. **The Administrative Agentshall determine the Eurodollar Rate no more than 3 Business Days, and no lessthan 1 Business Day, prior to the Closing Date and thereafter, the first day ofeach subsequent Interest Period.  Uponsuch determination, the Administrative Agent shall notify the Borrower and eachLender of such determination.  Allcomputations of fees and interest shall be made on the basis of a 360-day yearand 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 theday on which the Loan is made, and shall not accrue on a Loan, or any portionthereof, for the day on which the Loan or such portion is paid, providedthat any Loan that is repaid on the same day on which it is made shall, subjectto Section 2.11(a), bear interest for one day.  Each determination by the AdministrativeAgent of an interest rate or fee hereunder shall be conclusive and binding forall purposes, absent manifest error.

##  

## **2.10****        Evidenceof Debt.** The Loans made by eachLender shall be evidenced by one or more accounts or records maintained by suchLender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by theAdministrative Agent and each Lender shall be conclusive absent manifest errorof the amount of the Loans made by the Lenders to the Borrower and the interestand payments thereon.  Any failure to sorecord or any error in doing so shall not, however, limit or otherwise affectthe obligation of the Borrower hereunder to pay any amount owing with respectto the Obligations.  In the event of anyconflict between the accounts and records maintained by any Lender and theaccounts and records of the Administrative Agent in respect of such matters,the accounts and records of the Administrative Agent (set forth in theRegister) shall control in the absence of manifest error.  Upon the request of any Lender made throughthe Administrative Agent, the Borrower shall execute and deliver to such Lender(through the Administrative Agent) a Bridge Note, which shall evidence suchLender’s Bridge Loans in addition to such accounts or records.  Each Lender may attach schedules to itsBridge Note and endorse thereon the date, amount and maturity of its BridgeLoans 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 withoutcondition or deduction for any counterclaim, defense, recoupment orsetoff.  Except as otherwise expresslyprovided herein, all payments by the Borrower hereunder shall be made to theAdministrative Agent, for the account of the respective Lenders to which suchpayment is owed, at the Administrative Agent’s Office in Dollars and inimmediately available funds not later than 2:00 p.m. on the date specifiedherein.  The Administrative Agent willpromptly distribute to each Lender its Applicable Percentage (or other applicableshare as provided herein) of such payment in like funds as received by wiretransfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shallbe deemed received on the next succeeding Business Day and any applicableinterest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day otherthan a Business Day, payment shall be made on the

 

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## next following Business Day, and suchextension of time shall be included in computing interest or fees, as the casemay be.

##  

### (b)           (i)Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall havereceived notice from a Lender prior to the Closing Date that such Lender willnot make available to the Administrative Agent such Lender’s share of theBridge Loans, the Administrative Agent may assume that such Lender has madesuch share available on such date in accordance with Section 2.01 andmay, in reliance upon such assumption, make available to the Borrower acorresponding amount.  In such event, ifa Lender has not in fact made its share of the Bridge Loans available to theAdministrative Agent, then the applicable Lender and the Borrower severallyagree to pay to the Administrative Agent forthwith on demand such correspondingamount in immediately available funds with interest thereon, for each day fromand including the date such amount is made available to the Borrower to butexcluding the date of payment to the Administrative Agent, at (A) in the caseof a payment to be made by such Lender, the greater of the Federal Funds Rateand a rate determined by the Administrative Agent in accordance with bankingindustry rules on interbank compensation and (B) in the case of a payment to bemade by the Borrower, the Minimum Rate. If the Borrower and such Lender shall pay such interest to theAdministrative Agent for the same or an overlapping period, the AdministrativeAgent shall promptly remit to the Borrower the amount of such interest paid bythe Borrower for such period.  If suchLender pays its share of the Bridge Loans to the Administrative Agent, then theamount so paid shall constitute such Lender’s Bridge Loans.  Any payment by the Borrower shall be withoutprejudice to any claim the Borrower may have against a Lender that shall havefailed to make such payment to the Administrative Agent.

###  

#### (ii)           Paymentsby Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall havereceived notice from the Borrower prior to the time at which any payment is dueto the Administrative Agent for the account of the Lenders hereunder that theBorrower will not make such payment, the Administrative Agent may assume thatthe Borrower has made such payment on such date in accordance herewith and may,in reliance upon such assumption, distribute to the Lenders the amountdue.  In such event, if the Borrower hasnot in fact made such payment, then each of the Lenders severally agrees torepay to the Administrative Agent forthwith on demand the amount so distributedto such Lender, in immediately available funds with interest thereon, for eachday from and including the date such amount is distributed to it to butexcluding the date of payment to the Administrative Agent, at the greater ofthe Federal Funds Rate and a rate determined by the Administrative Agent inaccordance with banking industry rules on interbank compensation.

####  

A notice ofthe Administrative Agent to any Lender or the Borrower with respect to anyamount owing under this subsection (b) shall be conclusive, absent manifesterror.

 

### (c)           Failureto Satisfy Conditions Precedent.  Ifany Lender makes available to the Administrative Agent funds for any BridgeLoan to be made by such Lender as provided in the foregoing provisions of this ArticleII,****and such funds are not made availableto the Borrower by the Administrative Agent because the conditions to theborrowing of Bridge Loans set forth in Article IV are not satisfied orwaived in accordance with the terms hereof, the Administrative

 

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

###  

### (d)           Obligationsof Lenders Several.  The obligationsof the Lenders hereunder to make Bridge Loans and to make payments pursuant to Section10.04(c) are several and not joint. The failure of any Lender to make any Bridge Loan or to make any paymentunder Section 10.04(c) on any date required hereunder shall not relieveany other Lender of its corresponding obligation to do so on such date, and noLender shall be responsible for the failure of any other Lender to so make itsBridge Loan or to make its payment under Section 10.04(c).

###  

### (e)           FundingSource.  Nothing herein shall bedeemed to obligate any Lender to obtain the funds for any Loan in anyparticular place or manner or to constitute a representation by any Lender thatit has obtained or will obtain the funds for any Loan in any particular place ormanner.

###  

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

###  

## **2.12****        Sharing of Payments byLenders.** If any Lender shall, byexercising any right of setoff or counterclaim or otherwise, obtain payment inrespect of any principal of or interest on any of the Loans made by it held byit resulting in such Lender’s receiving payment of a proportion of theaggregate amount of such Loans or participations and accrued interest thereongreater than its pro rata share thereof of Bridge Facility as provided herein,then the Lender receiving such greater proportion shall (a) notify theAdministrative Agent of such fact, and (b) purchase (for cash at face value)participations in the Loans of the other Lenders, or make such otheradjustments as shall be equitable, so that the benefit of all such paymentsshall be shared by the Lenders ratably in accordance with the aggregate amountof principal of and accrued interest on the Outstanding Amount of theirrespective Loans and other amounts owing them, provided that:

##  

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

####  

#### (ii)           theprovisions of this Section shall not be construed to apply to (A) any payment madeby the Borrower pursuant to and in accordance with the express terms of thisAgreement or (B) any payment obtained by a Lender as consideration for theassignment of or sale of a participation in any of its Loans to any assignee orparticipant, other than to the Borrower or any Subsidiary thereof (as to whichthe provisions of this Section shall apply).

####  

Each Loan Party consents to the foregoing and agrees, to the extent itmay effectively do so under applicable Law, that any Lender acquiring a participationpursuant to the foregoing

 

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

 

# **ARTICLE III.TAXES, YIELD PROTECTION AND ILLEGALITY**

#  

## **3.01****        Taxes.**

##  

### (a)           PaymentsFree of Taxes.  Any and all payments by or on account of anyobligation of the Borrower hereunder or under any other Loan Document shall bemade free and clear of and without reduction or withholding for any IndemnifiedTaxes or Other Taxes, provided that if the Borrower shall be required byapplicable Law to deduct any Indemnified Taxes (including any Other Taxes) fromsuch payments, then (i) the sum payable shall be increased as necessary so thatafter making all required deductions (including deductions applicable toadditional 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 receivedhad no such deductions been made, (ii) the Borrower shall make such deductionsand (iii) the Borrower shall timely pay the full amount deducted to therelevant Governmental Authority in accordance with applicable Law.

###  

### (b)           Paymentof Other Taxes by the Borrower.  Without limiting the provisionsof subsection (a) above, the Borrower shall timely pay any Other Taxes to therelevant Governmental Authority in accordance with applicable Law.

###  

### (c)           Indemnificationby the Borrower.  The Borrower shall indemnify the AdministrativeAgent and each Lender, within 10 days after demand therefor, for the fullamount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes orOther Taxes imposed or asserted on or attributable to amounts payable underthis Section) paid by the Administrative Agent or such Lender, as the case maybe, and any penalties, interest and reasonable expenses arising therefrom orwith respect thereto, whether or not such Indemnified Taxes or Other Taxes werecorrectly or legally imposed or asserted by the relevant GovernmentalAuthority.  A certificate as to theamount of such payment or liability delivered to the Borrower by a Lender (witha copy to the Administrative Agent), or by the Administrative Agent on its ownbehalf or on behalf of a Lender, shall be conclusive absent manifest error.

###  

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

###  

### (e)           Statusof Lenders.  Each Foreign Lender that is entitled to an exemptionfrom or reduction of withholding tax under the Law of the jurisdiction in whichthe Borrower is resident for tax purposes, or any treaty to which suchjurisdiction is a party, with respect to payments hereunder or under any otherLoan Document shall deliver to the Borrower (with a copy to the AdministrativeAgent), at the time or times prescribed by applicable Law or reasonably

 

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### requested by the Borrower or theAdministrative Agent, such properly completed and executed documentationprescribed by applicable Law as will permit such payments to be made withoutwithholding or at a reduced rate of withholding.  In addition, any Lender, if requested by theBorrower or the Administrative Agent, shall deliver such other documentationprescribed by applicable Law or reasonably requested by the Borrower or the AdministrativeAgent as will enable the Borrower or the Administrative Agent to determinewhether or not such Lender is subject to backup withholding or informationreporting requirements.

###  

Withoutlimiting the generality of the foregoing, in the event that the Borrower isresident for tax purposes in the United States, each Foreign Lender shalldeliver to the Borrower and the Administrative Agent (in such number of copiesas shall be requested by the recipient) on or prior to the date on which suchForeign Lender becomes a Lender under this Agreement (and from time to timethereafter upon the request of the Borrower or the Administrative Agent, butonly if such Foreign Lender is legally entitled to do so), whichever of thefollowing is applicable:

 

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

####  

#### (ii)           dulycompleted copies of Internal Revenue Service Form W-8ECI,

####  

#### (iii)          inthe case of a Foreign Lender claiming the benefits of the exemption forportfolio interest under section 881(c) of the Code, (x) a certificate to theeffect that such Foreign Lender is not (A) a “bank” within the meaning ofsection 881(c)(3)(A) of the Code, (B) a holder of ten percent (10%) or more ofthe capital or profit interests of the Borrower within the meaning of section871(h)(3)(B) of the Code, or (C) a “controlled foreign corporation” describedin section 881(c)(3)(C) of the Code and (y) duly completed copies of  Internal Revenue Service Form W-8BEN, or

####  

#### (iv)          anyother form prescribed by applicable Law as a basis for claiming exemption fromor a reduction in United States Federal withholding tax duly completed togetherwith such supplementary documentation as may be prescribed by applicable Law topermit the Borrower to determine the withholding or deduction required to bemade.

####  

### (f)          UnitedStates Lenders.  Upon request of theBorrower or the Administrative Agent, a Lender that is a United States personwithin the meaning of Section 7701(a)(30) of the Code shall deliver to suchrequesting party (in such number of copies as shall be requested thereby) dulycompleted copies of Internal Revenue Service Form W-9, or any successor orother applicable form.

###  

### (g)           Treatmentof Certain Refunds.  If the Administrative Agent or any Lenderdetermines, in its sole discretion, that it has received a refund of any Taxesor Other Taxes as to which it has been indemnified by the Borrower or withrespect to which the Borrower has paid additional amounts pursuant to thisSection, it shall pay to the Borrower an amount equal to such refund (but onlyto the extent of indemnity payments made, or additional amounts paid, by theBorrower under this Section with respect to the Taxes or Other Taxes givingrise to such refund),

 

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### net of all out-of-pocket expenses of theAdministrative Agent or such Lender, as the case may be, and without interest(other than any interest paid by the relevant Governmental Authority withrespect to such refund), provided that the Borrower, upon the request ofthe Administrative Agent, or such Lender, agrees to repay the amount paid overto the Borrower (plus any penalties, interest or other charges imposed by therelevant Governmental Authority) to the Administrative Agent or such Lender inthe event the Administrative Agent or such Lender is required to repay suchrefund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agentor any Lender to make available its tax returns (or any other informationrelating to its taxes that it deems confidential) to the Borrower or any otherPerson.

###  

## **3.02****        Illegality. **If any Lender determines that any Changein Law has made it unlawful, or that any Governmental Authority has assertedthat it is unlawful, for any Lender or its applicable Lending Office to make,maintain or fund Eurodollar Rate Loans, or to determine or charge interestrates based upon the Eurodollar Rate, or any Governmental Authority has imposedmaterial restrictions on the authority of such Lender to purchase or sell, orto take deposits of, Dollars in the London interbank market, then, on noticethereof by such Lender to the Borrower through the Administrative Agent, anyobligation of such Lender to make or continue Eurodollar Rate Loans shall besuspended until such Lender notifies the Administrative Agent and the Borrowerthat the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrowershall, upon demand from such Lender (with a copy to the Administrative Agent),prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender toLoans bearing interest at the Minimum Rate in effect at such time, either onthe last day of the Interest Period therefor, if such Lender may lawfullycontinue to maintain such Eurodollar Rate Loans to such day, or immediately, ifsuch Lender may not lawfully continue to maintain such Eurodollar RateLoans.  Upon any such prepayment or conversion,the Borrower shall also pay accrued interest on the amount so prepaid orconverted.

##  

## **3.03****        Inability to DetermineRates. **If the Required Lendersdetermine that for any reason in connection with any Eurodollar Rate Loans that(a) Dollar deposits are not being offered to banks in the London interbankeurodollar market for the applicable amount and Interest Period of suchEurodollar Rate Loans, (b) adequate and reasonable means do not exist fordetermining the Eurodollar Ratefor any Interest Period with respect to a Eurodollar Rate Loan, or (c) the Eurodollar Rate for any InterestPeriod with respect to a Eurodollar Rate Loan does not adequately and fairlyreflect the cost to such Lenders of funding such Loan, the Administrative Agentwill promptly so notify the Borrower and each Lender.  In such event, the rate of interest for theapplicable Interest Period shall be the Minimum Rate in effect at suchtime.  Thereafter, the obligation of theLenders to make or continue Eurodollar Rate Loans shall be suspended until theAdministrative Agent (upon the instruction of the Required Lenders) revokessuch notice.

##  

## **3.04****        Increased Costs; Reserveson Eurodollar Rate Loans.**

##  

### (a)           IncreasedCosts Generally.  If any Change inLaw shall:

###  

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

 

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

####  

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

####  

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

####  

and the resultof any of the foregoing shall be to increase the cost to such Lender of makingor maintaining any Eurodollar Rate Loan (or of maintaining its obligation tomake any such Loan), or to reduce the amount of any sum received or receivableby such Lender hereunder (whether of principal, interest or any other amount)then, upon request of such Lender, the Borrower will pay to such Lender suchadditional amount or amounts as will compensate such Lender for such additionalcosts incurred or reduction suffered.

 

### (b)           CapitalRequirements.  If any Lender determines that any Change in Lawaffecting such Lender or any Lending Office of such Lender or such Lender’sholding company, if any, regarding capital requirements has or would have theeffect of reducing the rate of return on such Lender’s capital or on thecapital of such Lender’s holding company, if any, as a consequence of thisAgreement, the Commitments of such Lender or the Loans made by such Lender to alevel below that which such Lender or such Lender’s holding company could haveachieved but for such Change in Law (taking into consideration such Lender’spolicies and the policies of such Lender’s holding company with respect tocapital adequacy), then from time to time the Borrower will pay to such Lendersuch additional amount or amounts as will compensate such Lender or such Lender’sholding company for any such reduction suffered.

###  

### (c)           Certificatesfor Reimbursement.  A certificate of a Lender setting forth theamount 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 anddelivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amountshown as due on any such certificate within 10 days after receipt thereof.

###  

### (d)           Delayin Requests.  Failure or delay on the part of any Lender todemand compensation pursuant to the foregoing provisions of this Section shallnot constitute a waiver of such Lender’s right to demand such compensation, providedthat the Borrower shall not be required to compensate a Lender pursuant to theforegoing provisions of this Section for any increased costs incurred or reductionssuffered more than nine months prior to the date that such Lender notifies theBorrower of the Change in Law giving rise to such increased costs or reductionsand of such Lender’s intention to claim compensation therefor (except that, ifthe Change in Law giving rise to such increased costs or reductions isretroactive, then the nine-month period referred to above shall be extended toinclude the period of retroactive effect thereof).

 

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### (e)           Reserveson Eurodollar Rate Loans.  TheBorrower shall pay to each Lender, as long as such Lender shall be required tomaintain reserves with respect to liabilities or assets consisting of orincluding Eurocurrency funds or deposits (currently known as “Eurocurrencyliabilities”), additional interest on the unpaid principal amount of eachEurodollar Rate Loan equal to the actual costs of such reserves allocated tosuch Loan by such Lender (as determined by such Lender in good faith, whichdetermination shall be conclusive absent manifest error), which shall be dueand payable on each date on which interest is payable on such Loan, providedthe Borrower shall have received at least 10 days’ prior notice (with a copy tothe Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice 10 daysprior to the relevant Interest Payment Date, such additional interest shall bedue and payable 10 days from receipt of such notice.

###  

## **3.05****        Compensation forLosses. **Upon demand of any Lender (witha copy to the Administrative Agent) from time to time, the Borrower shallpromptly compensate such Lender for and hold such Lender harmless from anyloss, cost or expense incurred by it as a result of:

##  

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

###  

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

###  

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

###  

including anyloss of anticipated profits and any loss or expense arising from theliquidation or reemployment of funds obtained by it to maintain such Loan orfrom fees payable to terminate the deposits from which such funds wereobtained.  The Borrower shall also payany customary administrative fees charged by such Lender in connection with theforegoing.

 

For purposesof 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 itat the EurodollarRate for such Loan by a matching deposit or other borrowing in theLondon interbank eurodollar market for a comparable amount and for a comparableperiod, whether or not such Eurodollar Rate Loan was in fact so funded.

 

## **3.06****        Mitigation Obligations;Replacement of Lenders.**

##  

### (a)           Designationof a Different Lending Office.  Ifany Lender requests compensation under Section 3.04, or theBorrower is required to pay any additional amount to any Lender or anyGovernmental 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 suchLender shall use reasonable efforts to designate a different Lending Office forfunding or booking its Loans hereunder or to assign its rights and obligationshereunder to another of its offices, branches or affiliates, if, in thejudgment of such Lender, such designation or assignment (i) would eliminate orreduce amounts payable pursuant to Section 3.01 or 3.04,as the case may be, in the future, or eliminate the need

 

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

###  

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

###  

## **3.07****        Survival. **All of the Borrower’s obligations underthis Article III shall survive termination of the Aggregate Commitmentsand repayment of all other Obligations hereunder.

##  

# **ARTICLE IV.CONDITIONS PRECEDENT TO BRIDGE LOANS**

#  

## **4.01****        Conditions Precedent toBridge Loans. **The obligation of eachLender to make its Bridge Loan hereunder is subject to satisfaction of thefollowing conditions precedent:

##  

### (a)           TheAdministrative Agent’s receipt of the following, each of which shall beoriginals or telecopies (followed promptly by originals) unless otherwisespecified, each properly executed by a Responsible Officer of the signing LoanParty, each dated the Closing Date (or, in the case of certificates ofgovernmental officials, a recent date before the Closing Date) and each in formand substance satisfactory to the Administrative Agent and each of the Lenders:

###  

#### (i)            executedcounterparts of this Agreement and the Guaranty, sufficient in number fordistribution to the Administrative Agent, each Lender and the Borrower;

####  

#### (ii)           aBridge Note executed by the Borrower in favor of each Lender requesting aBridge Note;

####  

#### (iii)          suchcertificates of resolutions or other action, incumbency certificates and/orother certificates of Responsible Officers of each Loan Party as theAdministrative Agent may require evidencing the identity, authority andcapacity of each Responsible Officer thereof authorized to act as a ResponsibleOfficer in connection with this Agreement and the other Loan Documents to whichsuch Loan Party is a party;

####  

#### (iv)          suchdocuments and certifications as the Administrative Agent may reasonably requireto evidence that each Loan Party is duly organized or formed, and that each ofthe Borrower and each Guarantor is validly existing, in good standing andqualified to engage in business in each jurisdiction required by Section5.01;

####  

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

 

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

####  

#### (vii)         theInitial Financial Statements;

####  

#### (viii)        acertificate signed by a Responsible Officer of the Borrower certifying(A) that the representations and warranties of the Borrower and each otherLoan Party contained in Article V or any other Loan Document are trueand correct in all material respects on and as of the Closing Date, except tothe extent that such representations and warranties specifically refer to anearlier date, in which case they shall be true and correct in all materialrespects as of such earlier date, (B) that no Default exists, or would resultfrom 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 AuditedFinancial 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 lettersof credit issued or deemed issued thereunder) incurred by the Borrower underthe Credit Agreement on the Closing Date, the Borrower could borrow at least anadditional $75,000,000 under the Credit Agreement, and (E) thatcontemporaneously with the making of the Bridge Loans, the Borrower shallreceive gross proceeds of at least $175,000,000 from the issuance of EquityInterests;

####  

(ix)**         **evidence that allinsurance required to be maintained pursuant to the Loan Documents has beenobtained 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 theScissorTail Credit Facility to the Credit Facility Agent on the Closing Date,and confirming the termination of such credit facilities;

####  

#### (xi)          areport summarizing all Hedging Contracts entered into by the Borrower or anyRestricted Subsidiary and in effect as of the Closing Date, which HedgingContracts shall be sufficient to mitigate Borrower’s and RestrictedSubsidiaries’ commodity price risk as of the Closing Date as determined byAdministrative Agent;

####  

#### (xii)         acertificate from a Responsible Officer of the Borrower, in substantially theform of Exhibit H hereto, attesting to the Solvency of each Loan Partybefore and after giving effect to the transactions contemplated by thisAgreement and the Acquisition Documents;

####  

#### (xiii)        acertificate from a Responsible Officer of the Borrower (A) attaching forecasts,in form reasonably satisfactory to the Administrative Agent, of incomestatements for the fiscal quarter ending December 31, 2005 and for each yearcommencing with the first fiscal year of the Borrower following the ClosingDate

 

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#### through the fifth anniversary of the ClosingDate, (B) certifying that (1) the pro forma Consolidated EBITDA (calculatedgiving pro forma effect to the Acquisition) for the twelve months ended March31, 2005 was not less than $72,000,000, (2) the pro forma Consolidated TotalLeverage Ratio (calculated giving pro forma effect to the Acquisition) for thetwelve 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 faithon 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 financialstatements and forecasts are necessarily based upon professional opinions,estimates and projections and that the Borrower does not warrant that suchopinions, estimates and projections will ultimately prove to have been accurate),and (C) certifying (prior to giving effect to the Acquisition) as to mattersthat would be required by Section 302 of Sarbanes-Oxley;

####  

#### (xiv)        acopy of each Acquisition Document, together with a certificate from theResponsible Officer of the Borrower certifying that (A) such copies areaccurate and complete and represent the complete understanding and agreement ofthe parties thereto, (B) no material right or obligation of any party theretohas been modified, amended or waived, except as otherwise disclosed in suchcertificate, (C) the Borrower has obtained all approvals (if any) requiredpursuant to the Hart-Scott-Rodino Antitrust Improvement Act of 1976, asamended, or the waiting period with respect thereto has expired, and (D)subject only to the contemporaneous funding of the Bridge Borrowing to be madehereunder and the incurrence on the Closing Date of Indebtedness under theCredit Agreement, the Acquisition has been consummated on the terms set forthin such Acquisition Documents; and

####  

#### (xv)         suchother assurances, certificates, documents, consents or opinions as theAdministrative Agent or the Required Lenders reasonably may require.

####  

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

###  

### (c)           Thetransactions contemplated by the Credit Agreement shall have beencontemporaneously consummated upon terms and conditions satisfactory to theAdministrative Agent.

###  

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

###  

Withoutlimiting the generality of the provisions of Section 9.04, forpurposes of determining compliance with the conditions specified in this Section 4.01,each Lender that has signed this Agreement shall be deemed to have consentedto, approved or accepted or to be satisfied with, each document or other matterrequired thereunder to be consented to or approved by or acceptable orsatisfactory to a Lender unless the Administrative Agent shall have receivednotice from such Lender prior to the proposed Closing Date specifying itsobjection thereto.

 

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# **ARTICLE V.REPRESENTATIONS AND WARRANTIES**

#  

The Borrowerrepresents 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 existingand in good standing under the Laws of the jurisdiction of its incorporation ororganization, (b) has all requisite power and authority and all requisitegovernmental licenses, authorizations, consents and approvals to (i) own orlease its assets and carry on its business and (ii) execute, deliver andperform 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 Lawsof each jurisdiction where its ownership, lease or operation of properties orthe conduct of its business requires such qualification or license, and (d) isin compliance with all Laws applicable to it; except in each case referred toin clause (b)(i), (c) or (d), to the extent that failure to do so could notreasonably be expected to have a Material Adverse Effect.

##  

## **5.02****        Authorization; NoContravention. **The execution,delivery and performance by each Loan Party of each Loan Document to which suchPerson is party, have been duly authorized by all necessary corporate or otherorganizational action, and do not and will not (a) contravene the terms of anyof such Person’s Organization Documents; (b) conflict with or result in anybreach or contravention of, or the creation of any Lien under, or require anypayment to be made under (i) any Contractual Obligation to which such Person isa party or affecting such Person or the properties of such Person or any of itsRestricted Subsidiaries or (ii) any order, injunction, writ or decree of anyGovernmental Authority or any arbitral award to which such Person or itsproperty is subject; or (c) violate any Law. Each Loan Party is in compliance with all Contractual Obligationsreferred to in clause (b)(i), except to the extent that failure to do so couldnot 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 filingwith, any Governmental Authority or any other Person is necessary or requiredin connection with the execution, delivery or performance by, or enforcementagainst, any Loan Party of this Agreement or any other Loan Document or anyAcquisition Document.

##  

## **5.04****        Binding Effect. **This Agreement has been, and each otherLoan Document, when delivered hereunder, will have been, duly executed anddelivered by each Loan Party that is party thereto.  This Agreement constitutes, and each otherLoan Document when so delivered will constitute, a legal, valid and bindingobligation of such Loan Party, enforceable against each Loan Party that isparty 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 ofwhether considered in a proceeding in equity or at Law.

 

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## **5.05****        Financial Statements; NoMaterial Adverse Effect; No Internal Control Event.**

##  

### (a)           TheAudited Financial Statements (i) were prepared in accordance with GAAPconsistently applied throughout the period covered thereby, except as otherwiseexpressly noted therein; (ii) fairly present in all material respects thefinancial condition of the Borrower and its Subsidiaries as of the date thereofand their results of operations for the period covered thereby in accordancewith GAAP consistently applied throughout the period covered thereby, except asotherwise expressly noted therein; and (iii) show all material indebtedness andother liabilities, direct or contingent, of the Borrower and its Subsidiariesas of the date thereof, including liabilities for taxes and Indebtedness.

###  

### (b)           Theunaudited consolidated balance sheets of the Borrower and its Subsidiariesdated March 31, 2005, and the related consolidated statements of income oroperations, members’ capital and cash flows for the fiscal quarter ended onthat date (i) were prepared in accordance with GAAP consistently appliedthroughout the period covered thereby, except as otherwise expressly notedtherein, and (ii) fairly present in all material respects the financialcondition of the Borrower and its Subsidiaries as of the date thereof and theirresults of operations for the period covered thereby, subject, in the case ofclauses (i) and (ii), to the absence of footnotes and to normal year-end auditadjustments.  Schedule 5.05 setsforth all material indebtedness and other liabilities, direct or contingent, ofthe Borrower and its consolidated Subsidiaries as of the date hereof, includingliabilities for taxes and Indebtedness, not disclosed in the Initial FinancialStatements.

###  

### (c)           Sincethe date of the Audited Financial Statements, there has been no event orcircumstance, either individually or in the aggregate, that has had or couldreasonably be expected to have a Material Adverse Effect.

###  

### (d)           Sincethe date of the Audited Financial Statements, no Internal Control Event hasoccurred.

###  

### (e)           Theconsolidated pro forma balance sheet of the Borrower and its RestrictedSubsidiaries as at March 31, 2005 (taking into account the Acquisition), andthe related consolidated pro forma statements of income of the Borrower and itsRestricted Subsidiaries for the period covered thereby, certified by the chieffinancial officer of the Borrower, copies of which have been furnished to eachLender, fairly present in all material respects the consolidated pro formafinancial condition of the Borrower and its Restricted Subsidiaries (aftergiving effect to the Acquisition) as at such date and the consolidated proforma results of operations of the Borrower and its Restricted Subsidiaries forthe period ended on such date, all in accordance with GAAP.

###  

## **5.06****        Litigation. **Thereare no actions, suits, investigations, proceedings, claims or disputes pendingor, to the knowledge of the Borrower after due and diligent investigation,threatened or contemplated, at law, in equity, in arbitration or before anyGovernmental Authority, by or against the Borrower or any of its RestrictedSubsidiaries or against any of their properties or revenues that (a) purport toaffect or pertain to this Agreement or any other Loan Document, or theextensions of credit contemplated hereby, (b) purport to affect or pertain tothe

 

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## 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 RestrictedSubsidiary is in default under or with respect to any Contractual Obligationthat could, either individually or in the aggregate, reasonably be expected tohave a Material Adverse Effect.  NoDefault has occurred and is continuing or would result from the consummation ofthe transactions contemplated by this Agreement or any other Loan Document.

##  

## **5.08****        Ownership of Property;Liens. **Each of the Borrower and eachRestricted Subsidiary has good record and marketable title to, or validleasehold interests in, all real property necessary or used in the ordinaryconduct of its business, except for such defects in title as could not,individually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect.  The property of theBorrower and its Restricted Subsidiaries is subject to no Liens, other thanLiens permitted by Section 7.01.

##  

## **5.09****        EnvironmentalCompliance. **The Borrower and itsRestricted Subsidiaries periodically conduct in the ordinary course of businessa review of the effect of existing Environmental Laws and claims allegingpotential liability or responsibility for violation of any Environmental Law ontheir respective businesses, operations and properties, and as a result thereofthe Borrower has reasonably concluded that, except as specifically disclosed inSchedule 5.09, such Environmental Laws and claims could not,individually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect.

##  

## **5.10****        Insurance. **The properties of the Borrower and itsRestricted Subsidiaries are insured with financially sound and reputableinsurance companies not Affiliates of the Borrower, in such amounts, with suchdeductibles and covering such risks as are customarily carried by companiesengaged in similar businesses and owning similar properties in localities wherethe Borrower or the applicable Restricted Subsidiary operates.

##  

## **5.11****        Taxes. **The Borrower and its Subsidiaries havefiled all Federal, state and other material tax returns and reports required tobe filed, and have paid all Federal, state and other material taxes,assessments, fees and other governmental charges levied or imposed upon them ortheir properties, income or assets otherwise due and payable, except thosewhich are being contested in good faith by appropriate proceedings diligentlyconducted and for which adequate reserves have been provided in accordance withGAAP.  There is no proposed taxassessment against the Borrower or any Subsidiary that would, if made, have aMaterial Adverse Effect.  Neither anyLoan Party nor any Subsidiary thereof is party to any tax sharing agreement.

##  

## **5.12****        ERISACompliance.**

##  

### (a)           EachPlan is in compliance in all material respects with the applicable provisionsof ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify underSection 401(a) of the Code has received a favorable determination letter fromthe IRS or an application for such a letter is currently being processed by theIRS with respect thereto and, to the best knowledge of the Borrower, nothinghas occurred which would prevent, or cause the loss of, such qualification.  The Borrower and each ERISA Affiliate havemade all required

 

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### contributions to each Plan subject to Section412 of the Code, and no application for a funding waiver or an extension of anyamortization period pursuant to Section 412 of the Code has been made withrespect to any Plan.

###  

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

###  

### (c)           (i)  NoERISA Event has occurred or is reasonably expected to occur; (ii) no PensionPlan has any Unfunded Pension Liability; (iii) neither the Borrower nor anyERISA Affiliate has incurred, or reasonably expects to incur, any liability underTitle IV of ERISA with respect to any Pension Plan (other than premiums due andnot delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor anyERISA Affiliate has incurred, or reasonably expects to incur, any liability(and no event has occurred which, with the giving of notice under Section 4219of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISAwith respect to a Multiemployer Plan; and (v) neither the Borrower nor anyERISA Affiliate has engaged in a transaction that could be subject to Sections4069 or 4212(c) of ERISA.

###  

## **5.13****        Subsidiaries; EquityInterests. **The Borrower has noSubsidiaries other than those specifically disclosed in Part (a) of Schedule5.13, and all of the outstanding Equity Interests in such Subsidiaries havebeen 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 permittedunder Section 7.01.  The Borrowerhas no equity investments in any other corporation or entity other than thosespecifically disclosed in Part (b) of Schedule 5.13.  Schedule 5.13 identifies eachSubsidiary as either Restricted or Unrestricted, its state of organization, andits organizational identification number, and each Restricted Subsidiary onsuch schedule is a wholly-owned Subsidiary.

##  

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

##  

### (a)           TheBorrower is not engaged and will not engage, principally or as one of itsimportant activities, in the business of purchasing or carrying margin stock(within the meaning of Regulation U issued by the FRB), or extending credit forthe purpose of purchasing or carrying margin stock.

###  

### (b)           Noneof the Borrower, any Person Controlling the Borrower, or any Subsidiary (i) isa “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) isor is required to be registered as an “investment company” under the InvestmentCompany Act of 1940.

###  

## **5.15****        Disclosure. **The Borrower has disclosed to theAdministrative Agent and the Lenders all agreements, instruments and corporateor other restrictions to which it or any of its Restricted Subsidiaries issubject, and all other matters known to it, that, individually or in the

 

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## aggregate, could reasonably be expected toresult in a Material Adverse Effect.  Noreport, financial statement, certificate or other written informationfurnished, including Syndication Information, by or on behalf of any Loan Partyto the Arranger, the Administrative Agent or any Lender in connection with thetransactions contemplated hereby and the negotiation of this Agreement ordelivered hereunder or under any other Loan Document or the syndication of theBridge Facility (in each case, as modified or supplemented by other informationso furnished) contains any misstatement of fact or omits to state any factnecessary to make the statements therein, in the light of the circumstancesunder which they were made, not materially misleading with respect to theBorrower and its Restricted Subsidiaries and their operations, business andproperties, taken as a whole; provided that, with respect to projectedfinancial information, the Borrower represents only that such information wasprepared in good faith based upon assumptions believed to be reasonable at thetime.  The Offering Materials, whencompleted, for any Permanent Financing will not contain any untrue statement ofa material fact or omit to state a material fact necessary in order to make thestatements therein, in light of the circumstances in which they are made, notmaterially misleading.

##  

## **5.16****        Compliance with Laws. **Each of the Borrower and each RestrictedSubsidiary is in compliance in all material respects with the requirements ofall Laws and all orders, writs, injunctions and decrees applicable to it or toits properties, except in such instances in which (a) such requirement of Lawor order, writ, injunction or decree is being contested in good faith byappropriate proceedings diligently conducted or (b) the failure to complytherewith, either individually or in the aggregate, could not reasonably beexpected to have a Material Adverse Effect.

##  

## **5.17****        Intellectual Property;Licenses, Etc. **The Borrower and itsRestricted Subsidiaries own, or possess the right to use, all of thetrademarks, service marks, trade names, copyrights, patents, patent rights,franchises, licenses and other intellectual property rights (collectively, “IPRights”) that are reasonably necessary for the operation of theirrespective businesses, without conflict with the rights of any otherPerson.  To the best knowledge of theBorrower, no slogan or other advertising device, product, process, method,substance, part or other material now employed, or now contemplated to beemployed, by the Borrower or any Restricted Subsidiary infringes upon any rightsheld by any other Person.  No claim orlitigation regarding any of the foregoing is pending or, to the best knowledgeof 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 ofGod****.**** **Neither the businessnor 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 tohave a Material Adverse Effect.

##  

## **5.19****        Solvency. **Upon giving effect to the execution ofthis Agreement and the other Loan Documents by the Borrower and each Guarantorthat is a party thereto, the consummation of the transactions contemplatedhereby and thereby, the consummation of the transactions

 

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

##  

## **5.20****        AcquisitionClosing.**

##  

### (a)           Aftergiving effect to the Acquisition, all representations and warranties made byany Loan Party in any Loan Document will be true and correct in all materialrespects on and as of the Closing Date.

###  

### (b)           Onthe Closing Date, each of the representations and warranties made by any partyin the Acquisition Documents is true and correct in all material respects,other than with respect to those matters of which a Responsible Officer hasobtained knowledge thereof following the Closing Date, which the Borrowerreasonably believes do not result in an aggregate diminution in value of theassets and properties acquired pursuant to the Acquisition in an amount inexcess of escrowed funds under the Acquisition Agreement that will be disbursedto the Borrower as a result thereof; and none of such parties has failed toperform any material obligation or covenant required by the AcquisitionDocuments to be performed or complied with by it on or before the ClosingDate.  Simultaneously with the making ofthe Bridge Loans on the Closing Date, the Acquisition will have been consummatedin compliance with the material terms and conditions of the AcquisitionDocuments and all conditions precedent to such consummation will be fullysatisfied or waived.

###  

# **ARTICLE VI.AFFIRMATIVE COVENANTS**

#  

So long as anyLender shall have any Commitment hereunder, or any Loan or other Obligation hereundershall remain unpaid or unsatisfied, the Borrower shall, and shall (except inthe 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 andeach Lender, in form and detail satisfactory to the Administrative Agent andthe Required Lenders:

##  

### (a)           assoon as available, but in any event within 90 days after the end of each fiscalyear of the Borrower, a consolidated balance sheet of the Borrower and itsSubsidiaries (with consolidating balance sheets breaking out (i) the Borrowerand 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 insuch consolidated balance sheet, Unrestricted Subsidiaries with aggregateassets in excess of $1,000,000), as at the end of such fiscal year, and therelated consolidated and consolidatingstatements of income or operations and members’ capital (or other form ofowners’ equity) and consolidated cash flows for such fiscal year, setting forthin each case in comparative form the figures for the previous fiscal year, allin reasonable detail and prepared in accordance with GAAP, such consolidated statements to beaudited and accompanied by (i) a report and opinion of a Registered PublicAccounting Firm of nationally recognized standing reasonably acceptable to theRequired Lenders, which report and opinion shall be prepared in accordance withgenerally accepted auditing standards and applicable Securities Laws and shallnot be subject to

 

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### any “going concern” or like qualification orexception 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 theBorrower’s internal controls pursuant to Section 404 of Sarbanes-Oxley thatdoes not identify any material weaknesses or scope limitations, other than (1)scope limitations related to acquisitions by the Borrower or the RestrictedSubsidiaries that are effected during the period covered by the attestationreport or (2) material weaknesses or scope limitations to which the RequiredLenders do not object; and suchconsolidating statements to be certified by a Responsible Officer of theBorrower to the effect that such statements are fairly stated in all materialrespects when considered in relation to the consolidated financial statementsof the Borrower and its Subsidiaries; and

###  

### (b)           assoon as available, but in any event within 45 days (or, with respect to thefiscal quarter ending September 30, 2005, 60 days) after the end of each of thefirst three fiscal quarters of each fiscal year of the Borrower (commencing with the fiscal quarter endedSeptember 30, 2005), a consolidated balance sheet of the Borrower andits Subsidiaries (with consolidating balance sheets breaking out (i) theBorrower 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 includedin such consolidated balance sheet, Unrestricted Subsidiaries with aggregateassets in excess of $1,000,000), as at the end of such fiscal quarter, and therelated consolidated and consolidatingstatements of income or operations and members’ capital (or other form ofowners’ equity) and consolidated cash flows for such fiscal quarter and for theportion of the Borrower’s fiscal year then ended, setting forth in each case incomparative form the figures for the corresponding fiscal quarter of theprevious fiscal year and the corresponding portion of the previous fiscal year,all in reasonable detail, suchconsolidated statements to be certified by a Responsible Officer of theBorrower as fairly presenting in all material respects the financial condition,results of operations, members’ capital (or other owners’ equity) and cashflows of the Borrower and its Subsidiaries in accordance with GAAP, subjectonly to normal year-end audit adjustments and the absence of footnotes and such consolidating statements to becertified by a Responsible Officer of the Borrower to the effect that suchstatements are fairly stated in all material respects when considered inrelation to the consolidated financial statements of the Borrower and itsSubsidiaries.

###  

As to any informationcontained in materials furnished pursuant to Section 6.02(d), theBorrower shall not be separately required to furnish such information underclause (a) or (b) above, but the foregoing shall not be in derogation of theobligation of the Borrower to furnish the information and materials describedin clauses (a) and (b) above at the times specified therein.

 

## **6.02****        Certificates; OtherInformation. **Deliver to theAdministrative Agent, in form and detail reasonably satisfactory to theAdministrative Agent and the Required Lenders:

##  

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

###  

### (b)           concurrentlywith 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 theBorrower;

 

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### (c)           promptlyafter any request by the Administrative Agent or any Lender, copies of anydetailed audit reports, management letters or recommendations submitted to theboard of directors (or the audit committee of the board of directors) of theBorrower by independent accountants in connection with the accounts or books ofthe Borrower or any Subsidiary, or any audit of any of them;

###  

### (d)           promptlyafter the same are available, copies of each annual report, proxy or financialstatement or other report or communication sent to the members of the Borrower,and copies of all annual, regular, periodic and special reports andregistration statements which the Borrower has filed with the SEC under Section13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise requiredto be delivered to the Administrative Agent pursuant hereto;

###  

### (e)           promptlyafter the furnishing thereof, copies of any statement or report furnished toany holder of debt securities of any Loan Party or any Restricted Subsidiarythereof pursuant to the terms of any indenture, loan or credit or similaragreement and not otherwise required to be furnished to the Lenders pursuant toSection 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 LoanParty, copies of each notice or other correspondence received from the SEC (orcomparable agency in any applicable non-U.S. jurisdiction) concerning anyinvestigation or possible investigation or other inquiry by such agencyregarding financial or other operational results of any Loan Party or anySubsidiary thereof;

###  

### (g)           promptlyupon the occurrence thereof, notice of any acquisition or divestiture by theBorrower or any of its Restricted Subsidiaries of any assets or properties inexcess of $5,000,000;

###  

### (h)           promptlyupon its becoming available, copies of all notices or documents received by theBorrower or any other Loan Party pursuant to any Material Contract alleging amaterial default or nonperformance by such Person thereunder or terminating orsuspending any such Material Contract;

###  

### (i)            assoon as available, and in any event within 60 days after the end of each fiscalyear, a financial plan for the Borrower (in form reasonably satisfactory to theAdministrative Agent), prepared or caused to be prepared by a ResponsibleOfficer of the Borrower, setting forth for the then calendar year and financialprojections for the Borrower;

###  

### (j)            concurrentlywith the annual renewal of the Loan Parties’ insurance policies, if requestedby the Administrative Agent, a certificate of insurance showing all insurancerequired to be maintained pursuant to the Loan Documents has been obtained andis in effect; and

###  

### (k)           promptly,such additional information regarding the business, financial or corporateaffairs of the Borrower or any Subsidiary, or compliance with the terms of theLoan Documents, as the Administrative Agent or any Lender may from time to timereasonably request.

###  

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

 

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the date (i)on which the Borrower posts such documents, or provides a link thereto on theBorrower’s website on the Internet at the website address listed on Schedule10.02, or (ii) on which such documents are posted on the Borrower’s behalfon an Internet or intranet website, if any, to which each Lender and theAdministrative Agent have access (whether a commercial, third-party website orwhether sponsored by the Administrative Agent); or (iii) on which Borrower providesto the Administrative Agent by electronic mail electronic versions (i.e.,soft copies) of such documents (delivery of the Compliance Certificatesrequired to be delivered pursuant to Section 6.02(d) also being deemeddelivered on such date if included within such electronic mail under thisclause (iii)); provided, the Borrower shall upon the request ofAdministrative Agent provide to the Administrative Agent paper copies of anysuch electronically delivered Compliance Certificates); provided further,that the Borrower shall notify the Administrative Agent (by telecopier orelectronic mail) of the posting of any such documents pursuant to clause (i) or(ii) above and provide to the Administrative Agent by electronic mailelectronic versions (i.e., soft copies) of such documents, andAdministrative hereby agrees that it shall use reasonable commercial efforts topost such documents received pursuant to this clause (iii) on the Borrower’sbehalf to a commercial, third-party or other website sponsored by theAdministrative Agent and notify the Lenders of such posting.  Except as expressly provided in the foregoingclause (iii) the Administrative Agent shall have no obligation to request thedelivery or to maintain copies of the documents referred to above, and in anyevent shall have no responsibility to monitor compliance by the Borrower withany such request for delivery, and each Lender shall be solely responsible forrequesting delivery to it or maintaining its copies of such documents.

 

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

 

## **6.03****        Notices. **Promptly notify the Administrative Agentand each Lender after any Responsible Officer has knowledge:

 

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### (a)           ofthe occurrence of any Default;

###  

### (b)           ofany matter that has resulted or could reasonably be expected to result in aMaterial Adverse Effect, including (i) breach or non-performance of, or anydefault under, a Contractual Obligation of the Borrower or any Restricted Subsidiary;(ii) any dispute, litigation, investigation, proceeding or suspension betweenthe Borrower or any Subsidiary and any Governmental Authority; or (iii) thecommencement of, or any material development in, any litigation or proceedingaffecting the Borrower or any Subsidiary, including pursuant to any applicableEnvironmental Laws;

###  

### (c)           ofthe occurrence of any ERISA Event;

###  

### (d)           ofany material change in accounting policies or financial reporting practicesadopted by the Borrower or any Restricted Subsidiary; and

###  

### (e)           ofthe occurrence of any Internal Control Event the occurrence of which wouldrequire disclosure under the Securities Laws.

###  

Each noticepursuant to this Section shall be accompanied by a statement of a ResponsibleOfficer of the Borrower setting forth details of the occurrence referred totherein and stating what action the Borrower has taken and proposes to takewith respect thereto.  Each noticepursuant to Section 6.03(a) shall describe with particularity anyand all provisions of this Agreement and any other Loan Document that have beenbreached.

 

## **6.04****        Payment ofObligations. **Pay and discharge asthe same shall become due and payable, all its obligations and liabilities,including (a) all tax liabilities, assessments and governmental charges orlevies upon it or its properties or assets, unless the same are being contestedin good faith by appropriate proceedings diligently conducted and adequatereserves in accordance with GAAP are being maintained by the Borrower or suchRestricted Subsidiary; and (b) all lawful claims which, if unpaid, would by Lawbecome a Lien upon its property, unless the same are being contested in goodfaith by appropriate proceedings diligently conducted and adequate reserves inaccordance with GAAP are being maintained by the Borrower or such RestrictedSubsidiary.

##  

## **6.05****        Preservation of Existence,Etc. **(a) Preserve, renew andmaintain in full force and effect its legal existence and good standing underthe Laws of the jurisdiction of its organization except in a transactionpermitted by Section 7.04 or 7.05; (b) take allreasonable action to maintain all rights, privileges, permits, licenses andfranchises necessary or desirable in the normal conduct of its business, exceptto the extent that failure to do so could not reasonably be expected to have aMaterial Adverse Effect; and (c) preserve or renew all of its registeredpatents, trademarks, trade names and service marks, the non-preservation ofwhich could reasonably be expected to have a Material Adverse Effect.

##  

## **6.06****        Maintenance ofProperties. **(a) Maintain,preserve and protect all of its material properties and equipment necessary inthe operation of its business in good working order and condition, ordinarywear and tear excepted; (b) make all necessary repairs thereto andrenewals and replacements thereof except where the failure to do so could notreasonably be expected to

 

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

##  

## **6.07****        Maintenance ofInsurance. **Maintain with financiallysound and reputable insurance companies not Affiliates of the Borrower,insurance with respect to its properties and business against loss or damage ofthe kinds customarily insured against by Persons engaged in the same or similarbusiness, of such types and in such amounts as are customarily carried undersimilar circumstances by such other Persons and providing (a) that suchpolicies may not be canceled or reduced or affected in any material manner forany 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 therequirements of all Laws and all orders, writs, injunctions and decreesapplicable to it or to its business or property, except in such instances inwhich (a) such requirement of Law or order, writ, injunction or decree is beingcontested in good faith by appropriate proceedings diligently conducted; or (b)the failure to comply therewith could not reasonably be expected to have aMaterial Adverse Effect.

##  

## **6.09****        Books and Records. **Maintain proper books of record inconformity with GAAP consistently applied regarding all financial transactionsand matters involving the assets and business of the Borrower or suchRestricted Subsidiary, as the case may be.

##  

## **6.10****        Inspection Rights. **Permit representatives and independentcontractors of the Administrative Agent and each Lender to visit and inspectany of its properties, to examine its corporate, financial and operatingrecords, and make copies thereof or abstracts therefrom, and to discuss itsaffairs, finances and accounts with its directors, officers, and independentpublic accountants, all at the expense of the Borrower and at such reasonabletimes 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 (orany of their respective representatives or independent contractors) may do anyof the foregoing at the expense of the Borrower at any time during normalbusiness 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 outstandingIndebtedness under the Existing Credit Agreement, (c) to retire the outstandingIndebtedness under the Comerica Credit Facility and the ScissorTail CreditFacility, and (d) for the payment of fees and expenses relating to theAcquisition, the Credit Agreement and this Agreement.

##  

## **6.12****        AdditionalGuarantors. **Notify theAdministrative Agent at the time that any Person becomes a RestrictedSubsidiary of the Borrower, and promptly thereafter (and in any event within 15days), cause such Person to (a) become a Guarantor by executing and deliveringto the Administrative Agent a counterpart of the Guaranty or a joinder theretoin the form attached as Exhibit F, and (b) deliver to the AdministrativeAgent documents of the types referred to in clauses (iii) and (iv) of Section4.01(a) and, upon request of the Administrative Agent, favorable opinionsof counsel to such Person (which shall cover, among other things, the

 

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## legality, validity, binding effect andenforceability 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 hereafterapplicable to such Person as well as all contractual obligations and agreementswith respect to environmental remediation or other environmental matters, (ii)obtain, at or prior to the time required by applicable Environmental Laws, allpermits, licenses and other authorizations under applicable Environmental Lawsnecessary for its then current operations and will maintain such authorizationsin full force and effect, (iii) conduct any investigation, study, sampling andtesting, and undertake any cleanup, removal, remedial or other action necessaryto remove and clean up Hazardous Materials at or from any of its properties, asmay be required by, and in accordance with the requirements of, applicableEnvironmental Laws.  Promptly pay anddischarge when due all debts, claims, liabilities and obligations with respectto any clean-up or remediation measures necessary to comply with EnvironmentalLaws unless, in each case, the same are being contested in good faith byappropriate proceedings diligently conducted and adequate reserves inaccordance with GAAP are being maintained by the applicable Person.

###  

### (b)           Promptlyfurnish to Administrative Agent all written notices of violation, orders,claims, citations, complaints, penalty assessments, suits or other proceedingsreceived by such Person, or of which it has notice, pending or threatenedagainst such Person, the potential liability of which exceeds $5,000,000 orcould reasonably be expected to have a Material Adverse Effect if resolvedadversely against such Person, by any Governmental Authority with respect toany alleged violation of or non-compliance with any applicable EnvironmentalLaws or any permits, licenses or authorizations required under applicableEnvironmental Laws in connection with its ownership or use of its properties orthe operation of its business.

###  

### (c)           Promptlyfurnish to Administrative Agent all written requests for information, noticesof claim, demand letters, and other written notifications, received by suchPerson in connection with its ownership or use of its properties or the conductof its business, relating to potential responsibility with respect to anyinvestigation or clean-up of Hazardous Material arising from its operations atany location, the potential liability of which exceeds $5,000,000 or couldreasonably be expected to have a Material Adverse Effect if resolved adverselyagainst such Person.

###  

## **6.14****        Compliance withAgreements.**  Observe, perform orcomply 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 AdverseEffect.

##  

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

 

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## so that each Unrestricted Subsidiary that isa corporation or other legal entity will be treated as an entity separate anddistinct from the Borrower and the Restricted Subsidiaries.

##  

## **6.16****        Permanent Financing. **Use all commercially reasonable effortsto refinance, or cause the refinancing of, the Loans with the proceeds of thePermanent Financing as promptly as practicable after the Closing Date, whichshall include, without limitation:

##  

### (a)           Assoon as possible, but not later than 60 days after the Closing Date, theBorrower shall (i) complete and make available to the Arranger and potentialinvestors a preliminary offering memorandum, circular or prospectus for theoffer, sale or placement of any Permanent Financing pursuant to Rule 144A ofthe rules and regulations under the Securities Act (the “Offering Materials”)with registration rights, containing such information, data and disclosures asmay be required pursuant to the Offering Requirements, and (ii) cause anyPermanent Financing to have been rated by S&P and Moody’s; provided,that the Administrative Agent may, in its reasonable discretion, extend such 60day period with respect to either, or both, of clauses (i) and (ii) byadditional successive periods of up to 60 days each (the duration of each suchperiod to be in the sole discretion of the Administrative Agent) so long as nosuch period extends to, or any date after, the Bridge Maturity Date.

###  

### (b)           TheBorrower shall comply with the terms of the Fee Letter and the EngagementLetter, each of which the Borrower hereby confirms and agrees remains in fullforce and effect and shall continue as such in accordance with their respectiveterms notwithstanding the execution and delivery of this Agreement; providedthat, to the extent that the provisions of Section 2 of the Fee Letterdirectly conflict with Section 6.16(a) hereof, the provisions of Section6.16(a) shall control.

###  

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

##  

### (a)           TheBorrower shall commence preparation of an indenture (the “Exchange Note Indenture”)pursuant to which the Exchange Notes shall be issued and governing the termsand conditions of the Exchange Notes and a registration rights agreement (the “RegistrationRights Agreement”), in each case in the form of the Arranger’s standardindentures and registration rights agreements, in each case, which shallcontain 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 orother financings of the type similar to Exchange Notes issued in connectionwith a bridge financing, all as determined by the Arranger in its reasonablediscretion, as well as such other terms and conditions as the Arranger and itscounsel may consider appropriate in light of then prevailing market conditionsapplicable to similar financings or in light of any aspect of the PermanentFinancing or the Transaction that requires such other terms or conditions;

###  

### (b)           Nolater 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, theExchange Note Indenture, the Registration Rights Agreement, legal opinions,comfort letters, officers’ certificates and all other customary closingdocuments and requirements, all in form and substance reasonably satisfactoryto the Arranger and its counsel; and

 

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### (c)           TheLoan Parties shall, as soon as practicable and in any event no later than 365days after the Closing Date, file a shelf registration statement with the SECand cause such shelf registration statement to be declared effective, and shalluse their commercially reasonable efforts to keep such shelf registrationstatement effective, with respect to resales of the Exchange Notes, for as longas it is required by the holders to resell the Exchange Notes; provided,that the Administrative Agent may, in its reasonable discretion, extend such365 day period by additional successive periods of up to 30 days each (theduration of each such period to be in the sole discretion of the AdministrativeAgent).

###  

# **ARTICLE VII.NEGATIVE COVENANTS**

#  

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

 

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

##  

### (a)           Lienspursuant to any Credit Facility Loan Document;

###  

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

###  

### (c)           Liensfor taxes not yet due or which are being contested in good faith and byappropriate proceedings diligently conducted, if adequate reserves with respectthereto are maintained on the books of the applicable Person in accordance withGAAP;

###  

### (d)           Landlords’,carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other likeLiens arising in the ordinary course of business which are not overdue for aperiod of more than 30 days or which are being contested in good faith and byappropriate proceedings diligently conducted, if adequate reserves with respectthereto are maintained on the books of the applicable Person;

###  

### (e)           pledgesor 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)            depositsto secure the performance of bids, trade contracts and leases (other thanIndebtedness), statutory obligations, surety and appeal bonds, performancebonds and other obligations of a like nature incurred in the ordinary course ofbusiness;

###  

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

 

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

###  

### (h)           Lienssecuring judgments for the payment of money not constituting an Event ofDefault under Section 8.01(h);

###  

### (i)            Lienssecuring Indebtedness permitted under Section 7.03(g); providedthat (i) such Liens do not at any time encumber any property other thanthe property financed by such Indebtedness and (ii) the Indebtedness securedthereby does not exceed the cost or fair market value, whichever is lower, ofthe property being acquired on the date of acquisition;

###  

### (j)            Liensarising solely by virtue of any statutory or common law provision relating tobanker’s liens, rights of set-off or similar rights and remedies, or undergeneral depository or brokerage agreements, and burdening only deposit orbrokerage accounts or other funds and assets maintained with a creditordepository institution or brokerage; and

###  

### (k)           Liensarising from precautionary UCC financing statements relating to operatingleases and other contractual arrangements entered into in the ordinary courseof business that describe only the property subject to such operating lease orcontractual arrangement; and

###  

### (l)            statutoryLiens arising in the ordinary course of business relating to purchases of crudeoil, natural gas and other hydrocarbons in favor of producers (“firstpurchaser Liens”); provided that (i) such Liens do not at any timeencumber any property other than the crude oil, natural gas or otherhydrocarbons being purchased and secure only amounts due for the purchasethereof, and (ii) the amount secured thereby is not overdue for a period ofmore than 30 days or is otherwise being contested in good faith and byappropriate proceedings diligently conducted, if adequate reserves with respectthereto are maintained on the books of the applicable Person;

###  

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

 

## **7.02****        Investments. **Make any Investments, except:

##  

### (a)           Investmentsheld by the Borrower or such Loan Party in the form of cash equivalents orshort-term marketable debt securities;

###  

### (b)           advancesto officers, directors and employees of the Borrower and RestrictedSubsidiaries in an aggregate amount not to exceed $100,000 at any timeoutstanding, for travel, entertainment, relocation and analogous ordinarybusiness purposes;

###  

### (c)           Investmentsof the Borrower in any wholly-owned Subsidiary that is a Guarantor andInvestments of any wholly-owned Subsidiary that is a Guarantor in the Borroweror in another wholly-owned Subsidiary that is a Guarantor;

###  

### (d)           Investmentsconsisting of extensions of credit in the nature of accounts receivable ornotes receivable arising from the grant of trade credit in the ordinary courseof business, and

 

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### Investments received in satisfaction orpartial satisfaction thereof from financially troubled account debtors to theextent reasonably necessary in order to prevent or limit loss;

###  

### (e)           Guaranteespermitted by Section 7.03;

###  

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

###  

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

###  

## **7.03****        Indebtedness. **Create, incur, assume or suffer to existany Indebtedness, except:

##  

### (a)           Indebtednessunder the Loan Documents;

###  

### (b)           Indebtednessunder the Credit Facility Loan Documents;

###  

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

###  

### (d)           Guaranteesof the Borrower or any Guarantor in respect of Indebtedness otherwise permittedhereunder of the Borrower or any other Guarantor;

###  

### (e)           unsecuredIndebtedness of the Borrower or any Guarantor, provided that (i) the LoanParties comply with the provisions of Section 2.05(e) and (ii) suchIndebtedness qualifies as Subordinated Debt;

###  

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

###  

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

 

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### (h)           Indebtedness of any Loan Party owingto another Loan Party;

###  

### (i)            Indebtedness (other than asdescribed 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 theordinary course of business by Webb/Duval Gatherers and is Indebtedness ofWebb/Duval GP solely by virtue of the fact that it is a general partner ofWebb/Duval Gatherers and (B) a general partner of Webb/Duval GP with respect tothe Indebtedness described in clause (A) solely by virtue of the fact that itis such general partner; and

###  

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

###  

## **7.04        FundamentalChanges. **Merge,dissolve, liquidate, consolidate with or into another Person, or Dispose of(whether in one transaction or in a series of transactions) all orsubstantially all of its assets (whether now owned or hereafter acquired) to orin favor of any Person, except that, so long as no Default exists or wouldresult therefrom:

##  

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

###  

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

###  

The Borrower will not issue any Equity Interests which (i) may be classifiedin whole or part as Indebtedness, (ii) require mandatory distributions (otherthan distributions of Available Cash permitted under Section 7.06(d)) ormandatory redemption prior to 91 days after the Rollover Maturity Date, or(iii) provide for a scheduled distribution above generally prevailing marketrates at the time of issuance.  NoRestricted Subsidiary of the Borrower will issue any additional EquityInterests, except a direct Subsidiary of a Loan Party may issue additionalEquity Interests to such Loan Party or to the Borrower so long as suchRestricted Subsidiary is a wholly-owned Restricted Subsidiary of the Borrowerafter giving effect thereto.  NoRestricted Subsidiary of the Borrower that is a partnership will allow anyreduction of the Borrower’s interest (direct or indirect) therein.

 

## **7.05        Dispositions. **Make any Dispositionor enter into any agreement to make any Disposition, except:

##  

### (a)           Dispositions of obsolete, surplus orworn out property, whether now owned or hereafter acquired, in the ordinarycourse of business;

###  

### (b)           Dispositions of inventory in theordinary course of business;

###  

### (c)           Dispositions of equipment or realproperty so long as (i) the purchase price for such asset shall be paidsolely in cash; (ii) the aggregate purchase price paid to Loan Parties forsuch asset and all other such assets sold by Loan Parties during any period offour consecutive fiscal quarters pursuant to this clause (c) shall notexceed $5,000,000; (iii) if the portion of the

 

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### aggregate annual Consolidated EBITDA derivedfrom all assets sold pursuant to this clause (c) during any period of fourfiscal quarters and based on the four fiscal quarters (as to any assets of theBorrower or any Restricted Subsidiary other than ScissorTail and its RestrictedSubsidiaries) or annualized portion thereof (as to any assets of ScissorTailand its Restricted Subsidiaries as provided in Section 7.21(e)) prior tothe sale of such asset would exceed $2,000,000, the consent (not to beunreasonably withheld) of the Required Lenders is obtained in connection withany such sale; (iv) no Default or Event of Default shall exist prior to orafter giving effect to such sale; and (v) the Net Cash Proceeds of suchsale 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 purchaseof capital assets used in its business or (B) to the extent Net CashProceeds have not been applied pursuant to the immediately precedingclause (A), such amount (the “Excess SaleProceeds”) shall have been applied to prepayIndebtedness outstanding under the Credit Agreement as provided in the CreditAgreement;

###  

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

###  

### (e)           Dispositions permitted by Section 7.04;

###  

### (f)            Dispositions of Equity Interests inUnrestricted Subsidiaries; and

###  

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

###  

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

 

## **7.06        RestrictedPayments. **Declareor make, directly or indirectly, any Restricted Payment, or incur anyobligation (contingent or otherwise) to do so, except that, so long as noDefault shall have occurred and be continuing at the time of any actiondescribed below or would result therefrom (except as otherwise provided insubsection (d) below):

##  

### (a)           each Restricted Subsidiary may makeRestricted Payments to the Borrower or any Guarantor ratably according to theirrespective holdings of the type of Equity Interest in respect of which suchRestricted Payment is being made;

###  

### (b)           the Borrower and each RestrictedSubsidiary may declare and make dividend payments or other distributionspayable solely of the type of Equity Interests in respect of which suchRestricted Payment is being made;

###  

### (c)           the Borrower and each RestrictedSubsidiary may purchase, redeem or otherwise acquire Equity Interests (otherthan preferred Equity Interests dissimilar in type to new Equity Interestsbeing concurrently issued) issued by it with the proceeds received from thesubstantially concurrent issue of new Equity Interests; and

###  

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

 

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### transaction, the Borrower may declare cashquarterly distributions to its members in an amount equal to Available Cashand, notwithstanding the occurrence of any Default or Event of Defaultfollowing such declaration, pay such declared distributions.

###  

## **7.07        Change in Nature ofBusiness. **Engagein any material line of business substantially different from those lines ofbusiness conducted by the Borrower and its Restricted Subsidiaries on the datehereof or any business substantially related or incidental thereto.

##  

## **7.08        Transactions withAffiliates. **Enterinto any transaction of any kind with any Affiliate of the Borrower, whether ornot in the ordinary course of business, other than on fair and reasonable termssubstantially as favorable to the Borrower or such Restricted Subsidiary aswould be obtainable by the Borrower or such Restricted Subsidiary at the timein a comparable arm’s length transaction with a Person other than an Affiliate,provided that the foregoing restriction shall not apply to (i) transactionsbetween or among the Borrower and any Guarantor or between and among anyGuarantors or (ii) ScissorTail’s guarantee of the performance by Southern Domeof its obligations under that certain Gas Purchase and Processing Agreementeffective May 1, 2005 by and between Southern Dome and New Dominion, L.L.C.

##  

## **7.09        BurdensomeAgreements. **Enterinto any Contractual Obligation (other than this Agreement, any other LoanDocument or any Credit Facility Loan Document) that (a) limits the ability (i)of any Restricted Subsidiary to make Restricted Payments to the Borrower or anyGuarantor or to otherwise transfer property to the Borrower or any Guarantor,(ii) of any Restricted Subsidiary to Guarantee the Indebtedness of the Borroweror (iii) of the Borrower or any Restricted Subsidiary to create, incur, assumeor suffer to exist Liens on property of such Person in favor of the CreditFacility Agent and the lenders under the Credit Agreement; provided, however,that this clause (iii) shall not prohibit any negative pledge incurred orprovided 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 financedby or the subject of such Indebtedness; or (b) requires the grant of a Lien tosecure an obligation of such Person if a Lien is granted to secure anotherobligation of such Person.

##  

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

##  

## **7.11        ProhibitedContracts. **Otherthan those listed on Schedule 7.11:

##  

### (a)           enter into any “take-or-pay” contractor other contract or arrangement for the purchase of goods or services whichobligates it to pay for such goods or service regardless of whether they aredelivered or furnished to it, other than contracts for pipeline capacity or forservices in either case reasonably anticipated to be utilized in the ordinarycourse of business;

###  

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

 

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### affect the rights and benefits ofAdministrative Agent or any Lender under or acquired pursuant to any LoanDocument; or

###  

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

###  

## **7.12        HedgingContracts. **Be aparty to or in any manner be liable on any Hedging Contract, except:

##  

### (a)           Hedging Contracts entered into by aLoan Party with the purpose and effect of fixing interest rates on a principalamount of Indebtedness of such Loan Party that is accruing interest at avariable rate, provided that (i) the aggregate notional amount of suchcontracts never exceeds one hundred percent (100%) of the anticipatedoutstanding principal balance of the Indebtedness to be hedged by suchcontracts or an average of such principal balances calculated using a generallyaccepted method of matching interest swap contracts to declining principalbalances and (ii) the floating rate index of each such contract generallymatches the index used to determine the floating rates of interest on thecorresponding Indebtedness to be hedged by such contract; and

###  

### (b)           Hedging Contracts entered into incompliance with the Risk Management Policy.

###  

## **7.13        Subsidiaries. **Create or acquireany additional Restricted Subsidiary or redesignate an Unrestricted Subsidiaryas a Restricted Subsidiary unless the Borrower gives written notice to theAdministrative Agent of such creation or acquisition and complies with Sections6.12 and 7.18.

##  

## **7.14        Limitation on CreditExtensions. **Exceptfor Investments permitted under Section 7.02 and Hedging Contractspermitted hereunder, extend credit, make advances or make loans other thannormal and prudent extensions of credit to customers buying goods and servicesin the ordinary course of business or to another Loan Party in the ordinarycourse of business, which extensions shall not be for longer periods than thoseextended by similar businesses operated in a normal and prudent manner.

##  

## **7.15        Risk ManagementCompliance. **Enterinto any Hedging Contract that is in violation of the Risk ManagementPolicy.  The Borrower agrees that uponrequest by the Administrative Agent, from time to time, the Borrower and theAdministrative Agent will review and evaluate the Borrowers’ Risk ManagementPolicy.

##  

## **7.16        SubordinatedDebt. **Make anypayments of principal or interest on the Subordinated Debt except in accordancewith the terms and conditions thereof.

##  

## **7.17        MaterialContracts. **(a)Cancel or terminate any Material Contract (or consent to or accept anycancellation or termination thereof), or (b) amend or otherwise modify anyprovision of any Material Contract or give any consent, waiver or approvalthereunder, or waive any material breach of or material default under anyMaterial Contract that could reasonably be expected to detrimentally affect therights and benefits of the Administrative Agent and/or the Lenders hereunder orunder any other Loan Document.

 

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## **7.18        Designation andConversion of Restricted and Unrestricted Subsidiaries; Debt of UnrestrictedSubsidiaries.**

##  

### (a)           Unless designated as an UnrestrictedSubsidiary on Schedule 5.13 as of the Closing Date, designate any Personthat becomes a Subsidiary of the Borrower or any Restricted Subsidiary as anUnrestricted Subsidiary, except the Borrower may designate by writtennotification thereof to the Administrative Agent, any Restricted Subsidiary,including a newly formed or newly acquired Subsidiary, as an UnrestrictedSubsidiary if (i) prior, and after giving effect, to such designation, noDefault would exist and (ii) such designation is deemed to be an Investment inan Unrestricted Subsidiary in an amount equal to the fair market value as ofthe date of such designation of the Borrower’s direct and indirect ownershipinterest in such Subsidiary and such Investment would be permitted to be madeat the time of such designation under Section 7.02(f).

###  

### (b)           Designate any Unrestricted Subsidiaryto be a Restricted Subsidiary, except if after giving effect to suchdesignation, which shall be deemed to be a cash dividend in an amount equal tothe lesser of the fair market value of the Borrower’s direct and indirectownership interest in such Subsidiary or the amount of the Borrower’s cashinvestment previously made for purposes of the limitation on Investments under Section7.02(f), (i) the representations and warranties of the Borrower and itsRestricted Subsidiaries contained in each of the Loan Documents are true andcorrect in all material respects on and as of such date as if made on and as ofthe date of such redesignation (or, if stated to have been made expressly as ofan earlier date, were true and correct as of such date), (ii) no Default wouldexist, and (iii) the Borrower and such newly-designated Restricted Subsidiarycomplies with the requirements of Sections 6.12.

###  

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

###  

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

###  

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

###  

## **7.19        CapitalExpenditures. **Usethe proceeds of any Indebtedness incurred under the Credit Agreement to make orcommit to make Capital Expenditures in any fiscal year in excess of 10% of theAggregate Commitments (as used in this Section 7.19, as such term isdefined in the Credit Agreement) in respect of Capital Expenditures relating toacquisitions or construction (other than acquisitions or construction ofnatural gas, natural gas liquids and crude oil pipelines, processing, treatingand gathering systems, including compression, metering, dehydrating and similarequipment, natural gas and natural gas liquids storage facilities, and in eachcase, related facilities); provided such Persons may make CapitalExpenditures as are required by any Law (including Environmental Laws).

##  

## **7.20        Amendments toOrganizational Documents. **(a)Amend or otherwise modify the definition of “Available Cash” as set forth inthe Borrower LLC Agreement, or (b) enter into or permit any other modificationof, or waive any material right or obligation of any Person under, itsOrganization Documents that could reasonably be expected to detrimentallyaffect the

 

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

##  

## **7.21        FinancialCovenants.**

##  

### (a)           Consolidated Fixed Charge CoverageRatio.  Permit the Consolidated Fixed Charge Coverage Ratio as ofthe end of any fiscal quarter of the Borrower to be less than the ratio setforth 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 CoverageRatio.  Permit the Consolidated Interest Coverage Ratio as of theend of any fiscal quarter of the Borrower to be less than the ratio set forthbelow 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.  Permitthe Consolidated Senior Leverage Ratio at any time during any period of fourfiscal quarters of the Borrower set forth below to be greater than the ratioset forth below opposite such period:

 

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| **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.  Permitthe Consolidated Total Leverage Ratio at any time during any period of fourfiscal quarters of the Borrower set forth below to be greater than the ratioset 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.  Withrespect to the calculation of the Fixed Charge Coverage Ratio, the ConsolidatedInterest Coverage Ratio, the Senior Leverage Ratio and the Consolidated TotalLeverage Ratio in this Section 7.21 (and Consolidated EBITDA as used in Section7.05(c)), Consolidated EBITDA, Consolidated Fixed Charges, ConsolidatedInterest Charges and Consolidated Net Income of ScissorTail and its RestrictedSubsidiaries (if any) (i) shall be determined for the quarter ended September30, 2005 by grossing-up the applicable component results from the Closing Date through the last day of suchquarter to a quarterly amount and (ii) shall, prior to June 30, 2006, bedetermined for the periods ending on September 30, 2005, December 31, 2005 andMarch 31, 2005 on an annualized basis; e.g.: for the period ending September30, 2005, results for the quarter will be annualized by multiplying suchresults by four; for the period ending December 31, 2005, results for thetwo-quarter period will be annualized by multiplying such results by two; andfor the period ending March 31, 2006, results for the three-quarter period willbe annualized by multiplying such results by one and one-third.

###  

# **ARTICLE VIII.EVENTS OF DEFAULT AND REMEDIES**

#  

## **8.01        Events ofDefault. **Any ofthe following shall constitute an Event of Default:

 

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### (a)           Non-Payment.  TheBorrower or any other Loan Party fails to pay (i) when and as required to bepaid herein, any amount of principal of any Loan, or (ii) within three BusinessDays after the same becomes due, any interest on any Loan, or any fee duehereunder, or (iii) within five  BusinessDays after the same becomes due, any other amount payable hereunder or underany other Loan Document; or

###  

### (b)           Specific Covenants.  TheBorrower fails to perform or observe any term, covenant or agreement containedin any of Sections 6.03, 6.05(a), 6.10, 6.11 or 6.12 or ArticleVII; or

###  

### (c)           Other Defaults.  AnyLoan Party fails to perform or observe any other covenant or agreement (notspecified in subsection (a) or (b) above) contained in any Loan Document on itspart to be performed or observed and such failure continues for 30 days afterthe earlier of (i) the date on which the Administrative Agent notifies Borrowerof such failure or (ii) the date on which a Responsible Officer of any LoanParty first becomes aware of such failure; or

###  

### (d)           Representations and Warranties.  Anyrepresentation, warranty, certification or statement of fact made or deemedmade by or on behalf of the Borrower or any other Loan Party herein, in anyother Loan Document, or in any document delivered in connection herewith ortherewith shall be incorrect or misleading in any material respect when made ordeemed made; or

###  

### (e)           Cross-Default.  (i) TheBorrower or any Restricted Subsidiary (A) fails to make any payment whendue (whether by scheduled maturity, required prepayment, acceleration, demand,or otherwise) in respect of any Indebtedness or Guarantee (other thanIndebtedness hereunder and Indebtedness under Hedging Contracts) having anaggregate principal amount (including undrawn committed or available amountsand including amounts owing to all creditors under any combined or syndicatedcredit arrangement) of more than the Threshold Amount, or (B) fails toobserve or perform any other agreement or condition relating to any suchIndebtedness or Guarantee or contained in any instrument or agreementevidencing, securing or relating thereto, or any other event occurs, the effectof which default or other event is to cause, or to permit the holder or holdersof such Indebtedness or the beneficiary or beneficiaries of such Guarantee (ora trustee or agent on behalf of such holder or holders or beneficiary orbeneficiaries) to cause, with the giving of notice if required, suchIndebtedness 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 statedmaturity, or such Guarantee to become payable or cash collateral in respectthereof to be demanded; or (ii) there occurs under any Hedging Contract anEarly Termination Date (as defined in such Hedging Contract) resulting from(A) any event of default under such Hedging Contract as to which theBorrower or any Subsidiary is the Defaulting Party (as defined in such HedgingContract) or (B) any Termination Event (as so defined) under such HedgingContract as to which the Borrower or any Restricted Subsidiary is an AffectedParty (as so defined) and, in either event, the Hedging Termination Value owedby the Borrower or such Restricted Subsidiary as a result thereof is greaterthan the Threshold Amount; or

###  

### (f)            Insolvency Proceedings, Etc.  TheBorrower or any Subsidiary institutes or consents to the institution of anyproceeding under any Debtor Relief Law, or makes an assignment for the benefitof creditors; or applies for or consents to the appointment of any

 

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### receiver, trustee, custodian, conservator,liquidator, rehabilitator or similar officer for it or for all or any materialpart of its property; or any receiver, trustee, custodian, conservator,liquidator, rehabilitator or similar officer is appointed without theapplication or consent of such Person and the appointment continues undischargedor unstayed for 60 calendar days; or any proceeding under any Debtor Relief Lawrelating to any such Person or to all or any material part of its property isinstituted without the consent of such Person and continues undismissed orunstayed for 60 calendar days, or an order for relief is entered in any suchproceeding; or

###  

### (g)           Inability to Pay Debts; Attachment.  (i) TheBorrower or any Subsidiary becomes unable or admits in writing its inability orfails generally to pay its debts as they become due, or (ii) any writ orwarrant of attachment or execution or similar process is issued or leviedagainst all or any material part of the property of any such Person and is notreleased, vacated or fully bonded within 30 days after its issue or levy; or

###  

### (h)           Judgments.  There isentered against the Borrower or any Restricted Subsidiary (i) a final judgmentor order for the payment of money in an aggregate amount exceeding theThreshold Amount (to the extent not covered by independent third-partyinsurance as to which the insurer does not dispute coverage), or (ii) any oneor more non-monetary final judgments that have, or could reasonably be expectedto have, individually or in the aggregate, a Material Adverse Effect and, ineither case, (A) enforcement proceedings are commenced by any creditor uponsuch judgment or order, or (B) there is a period of 30 consecutive days duringwhich a stay of enforcement of such judgment, by reason of a pending appeal orotherwise, is not in effect; or

###  

### (i)            ERISA.  (i) AnERISA Event occurs with respect to a Pension Plan or Multiemployer Plan whichhas resulted or could reasonably be expected to result in liability of theBorrower under Title IV of ERISA to the Pension Plan, Multiemployer Planor 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 expirationof any applicable grace period, any installment payment with respect to itswithdrawal liability under Section 4201 of ERISA under a Multiemployer Plan inan aggregate amount in excess of the Threshold Amount; or

###  

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

###  

## **8.02        Remedies Upon Event ofDefault.**

##  

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

 

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

 

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

###  

### (c)           exercise on behalf of itself and theLenders all rights and remedies available to it and the Lenders under the LoanDocuments;

###  

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

 

## **8.03        Application ofFunds. **Afterthe exercise of remedies provided for in Section 8.02 (or after theLoans have automatically become immediately due and payable as set forth in theproviso to Section 8.02), any amounts received on account of the Obligationsshall be applied by the Administrative Agent in the following order:

##  

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

 

Second, to payment of that portion of theObligations constituting fees, indemnities and other amounts (other thanprincipal and interest) payable to the Lenders (including fees, charges anddisbursements of counsel to the respective Lenders and amounts payable under ArticleIII), ratably among them in proportion to the respective amounts describedin this clause Second payable to them;

 

Third, to payment of that portion of theObligations constituting accrued and unpaid interest on the Loans and otherObligations, ratably among the Lenders in proportion to the respective amountsdescribed in this clause Third payable to them;

 

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

 

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

 

# **ARTICLE IX.ADMINISTRATIVE AGENT**

#  

## **9.01        Appointment andAuthority. **Eachof the Lenders hereby irrevocably appoints Banc of America Bridge to act on itsbehalf as the Administrative Agent hereunder and under the other Loan Documentsand authorizes the Administrative Agent to take such actions on its behalf andto exercise such powers as are delegated to the Administrative Agent by theterms hereof or

 

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

##  

## **9.02        Rights as aLender. **ThePerson serving as the Administrative Agent hereunder shall have the same rightsand powers in its capacity as a Lender as any other Lender and may exercise thesame as though it were not the Administrative Agent and the term “Lender” or “Lenders”shall, unless otherwise expressly indicated or unless the context otherwiserequires, include the Person serving as the Administrative Agent hereunder inits individual capacity.  Such Person andits Affiliates may accept deposits from, lend money to, act as the financialadvisor or in any other advisory capacity for and generally engage in any kindof business with the Borrower or any Subsidiary or other Affiliate thereof asif such Person were not the Administrative Agent hereunder and without any dutyto account therefor to the Lenders.

##  

## **9.03        ExculpatoryProvisions. **TheAdministrative Agent shall not have any duties or obligations except thoseexpressly set forth herein and in the other Loan Documents.  Without limiting the generality of theforegoing, the Administrative Agent:

##  

### (a)           shall not be subject to any fiduciaryor other implied duties, regardless of whether a Default has occurred and iscontinuing;

###  

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

###  

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

###  

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

 

TheAdministrative Agent shall not be responsible for or have any duty to ascertainor inquire into (i) any statement, warranty or representation made in or inconnection with this Agreement or any other Loan Document, (ii) the contents ofany certificate, report or other

 

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

 

## **9.04        Reliance byAdministrative Agent. **TheAdministrative Agent shall be entitled to rely upon, and shall not incur anyliability for relying upon, any notice, request, certificate, consent,statement, instrument, document or other writing (including any electronicmessage, Internet or intranet website posting or other distribution) believedby it to be genuine and to have been signed, sent or otherwise authenticated bythe proper Person.  The AdministrativeAgent also may rely upon any statement made to it orally or by telephone andbelieved by it to have been made by the proper Person, and shall not incur anyliability for relying thereon.  Indetermining compliance with any condition hereunder to the making of a Loan,that by its terms must be fulfilled to the satisfaction of a Lender, theAdministrative Agent may presume that such condition is satisfactory to suchLender unless the Administrative Agent shall have received notice to thecontrary from such Lender prior to the making of such Loan.  The Administrative Agent may consult withlegal counsel (who may be counsel for the Borrower), independent accountantsand other experts selected by it, and shall not be liable for any action takenor not taken by it in accordance with the advice of any such counsel,accountants or experts.

##  

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

##  

## **9.06        Resignation ofAdministrative Agent. **TheAdministrative Agent may at any time give notice of its resignation to theLenders and the Borrower.  Upon receiptof any such notice of resignation, the Required Lenders shall have the right,in consultation with the Borrower, to appoint a successor, which shall be abank with an office in the United States, or an Affiliate of any such bank withan office in the United States.  If nosuch successor shall have been so appointed by the Required Lenders and shallhave accepted such appointment within 30 days after the retiringAdministrative Agent gives notice of its resignation, then the retiringAdministrative Agent may on behalf of the Lenders, appoint a successorAdministrative Agent meeting the qualifications set forth above; providedthat if the Administrative Agent shall notify the Borrower and the Lenders thatno qualifying Person has accepted such appointment, then such resignation shallnonetheless become effective in accordance with such notice and (1) theretiring Administrative Agent shall be discharged from its duties andobligations hereunder and under the other Loan Documents (except that in the case of any collateralsecurity held by the Administrative Agent on behalf of the Lenders under any ofthe Loan Documents, the retiring Administrative Agent shall continue to holdsuch collateral security until such time as a

 

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## successor Administrative Agent isappointed) and (2) all payments, communications anddeterminations provided to be made by, to or through the Administrative Agentshall instead be made by or to each Lender directly, until such time as theRequired Lenders appoint a successor Administrative Agent as provided for abovein this Section.  Upon the acceptance ofa successor’s appointment as Administrative Agent hereunder, such successorshall succeed to and become vested with all of the rights, powers, privilegesand duties of the retiring (or retired) Administrative Agent, and the retiringAdministrative Agent shall be discharged from all of its duties and obligationshereunder or under the other Loan Documents (if not already dischargedtherefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agentshall be the same as those payable to its predecessor unless otherwise agreedbetween the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder andunder the other Loan Documents, the provisions of this Article and Section 10.04shall continue in effect for the benefit of such retiring Administrative Agent,its sub-agents and their respective Related Parties in respect of any actionstaken or omitted to be taken by any of them while the retiring AdministrativeAgent was acting as Administrative Agent.

##  

## **9.07        Non-Reliance onAdministrative Agent and Other Lenders. **EachLender and acknowledges that it has, independently and without reliance uponthe Administrative Agent or any other Lender or any of their Related Partiesand based on such documents and information as it has deemed appropriate, madeits 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 otherLender or any of their Related Parties and based on such documents andinformation as it shall from time to time deem appropriate, continue to makeits own decisions in taking or not taking action under or based upon thisAgreement, any other Loan Document or any related agreement or any documentfurnished hereunder or thereunder.

##  

## **9.08       ****No Other Duties, Etc. **Anythingherein to the contrary notwithstanding, none of the bookrunners, syndicationagents or documentation agents listed on the cover page hereof shall have anypowers, duties or responsibilities under this Agreement or any of the otherLoan Documents, except in its capacity, as applicable, as the AdministrativeAgent or a Lender hereunder.

##  

## **9.09        Administrative AgentMay File Proofs of Claim. **Incase of the pendency of any receivership, insolvency, liquidation, bankruptcy,reorganization, arrangement, adjustment, composition or other judicialproceeding relative to any Loan Party, the Administrative Agent (irrespectiveof whether the principal of any Loan shall then be due and payable as hereinexpressed or by declaration or otherwise and irrespective of whether theAdministrative Agent shall have made any demand on the Borrower) shall beentitled and empowered, by intervention in such proceeding or otherwise

##  

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

 

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

###  

### (b)           to collect and receive any monies orother property payable or deliverable on any such claims and to distribute thesame;

###  

and any custodian, receiver,assignee, trustee, liquidator, sequestrator or other similar official in anysuch judicial proceeding is hereby authorized by each Lender to make suchpayments to the Administrative Agent and, in the event that the AdministrativeAgent shall consent to the making of such payments directly to the Lenders, topay to the Administrative Agent any amount due for the reasonable compensation,expenses, disbursements and advances of the Administrative Agent and its agentsand counsel, and any other amounts due the Administrative Agent under Sections2.08 and 10.04.

 

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

 

## **9.10        Guaranty Matters. **The Lendersirrevocably authorize the Administrative Agent, at its option and in itsdiscretion, to release any Guarantor from its obligations under the Guaranty ifsuch Person ceases to be a Restricted Subsidiary as a result of a transactionpermitted hereunder.

##  

Upon requestby the Administrative Agent at any time, the Required Lenders will confirm inwriting the Administrative Agent’s authority to release or subordinate itsinterest in particular types or items of property, or to release any Guarantorfrom its obligations under the Guaranty pursuant to this Section 9.10.

 

# **ARTICLE X.MISCELLANEOUS**

#  

## **10.01      Amendments, Etc. **No amendment orwaiver of any provision of this Agreement or any other Loan Document, and noconsent to any departure by the Borrower or any other Loan Party therefrom,shall be effective unless in writing signed by the Required Lenders and theBorrower or the applicable Loan Party, as the case may be, and acknowledged bythe Administrative Agent, and each such waiver or consent shall be effectiveonly 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 ofany Lender (or reinstate any Commitment terminated pursuant to Section 8.02)without the written consent of such Lender;

###  

### (c)           postpone any date fixed by thisAgreement or any other Loan Document for any scheduled payment or mandatoryprepayment of principal, interest, fees or other amounts due to

 

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### the Lenders (or any of them) hereunder orunder any other Loan Document without the written consent of each Lenderdirectly affected thereby;

###  

### (d)           reduce the principal of, or the rateof interest specified herein on, any Loan, or (subject to clause (iv) of thesecond proviso to this Section 10.01) any fees or other amountspayable hereunder or under any other Loan Document, without the written consentof each Lender directly affected thereby; provided, however, thatonly the consent of the Required Lenders shall be necessary (i) to amend thedefinition of “Default Rate” or to waive any obligation of the Borrower to payinterest 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 wouldbe to reduce the rate of interest on any Loan or to reduce any fee payablehereunder;

###  

### (e)           change Section 8.03 in amanner that would alter the pro rata sharing of payments required therebywithout the written consent of each Lender;

###  

### (f)            change any provision of this Sectionor the definition of “Required Lenders” or any other provision hereofspecifying the number or percentage of Lenders required to amend, waive orotherwise modify any rights hereunder or make any determination or grant anyconsent hereunder, without the written consent of each Lender; or

###  

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

###  

and, providedfurther, that (i) no amendment, waiver or consent shall, unless inwriting and signed by the Administrative Agent in addition to the Lendersrequired above, affect the rights or duties of the Administrative Agent underthis Agreement or any other Loan Document; (ii) Section 10.06(h) may not beamended, waived or otherwise modified without the consent of each GrantingLender all or any part of whose Loans are being funded by an SPC at the time ofsuch amendment, waiver or other modification; and (iii) the Fee Lettermay be amended, or rights or privileges thereunder waived, in a writingexecuted only by the parties thereto.

 

## **10.02      Notices; Effectiveness;Electronic Communication.**

##  

### (a)           Notices Generally.  Exceptin the case of notices and other communicationsexpressly permitted to be given by telephone (and except as provided insubsection (b) below), all notices and other communications provided for hereinshall be in writing and shall be delivered by hand or overnight courierservice, mailed by certified or registered mail or sent by telecopier asfollows, and all notices and other communications expressly permitted hereunderto be given by telephone shall be made to the applicable telephone number, asfollows:

###  

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

####  

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

 

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Notices sentby hand or overnight courier service, or mailed by certified or registeredmail, shall be deemed to have been given when received; notices sent bytelecopier shall be deemed to have been given when sent (except that, if notgiven during normal business hours for the recipient, shall be deemed to havebeen given at the opening of business on the next business day for therecipient).  Notices delivered throughelectronic communications to the extent provided in subsection (b) below, shallbe effective as provided in such subsection (b).

 

### (b)           Electronic Communications.  Noticesand other communications to the Lenders hereunder may be delivered or furnishedby electronic communication (including e-mail and Internet or intranetwebsites) pursuant to procedures approved by the Administrative Agent, providedthat the foregoing shall not apply to notices to any Lender pursuant to ArticleII if such Lender has notified the Administrative Agent that it isincapable of receiving notices under such Article by electroniccommunication.  The Administrative Agentor the Borrower may, in its discretion, agree to accept notices and othercommunications to it hereunder by electronic communications pursuant toprocedures approved by it, provided that approval of such procedures maybe limited to particular notices or communications.

###  

Unless theAdministrative Agent otherwise prescribes, (i) notices and othercommunications sent to an e-mail address shall be deemed received upon the sender’sreceipt of an acknowledgement from the intended recipient (such as by the “returnreceipt requested” function, as available, return e-mail or other writtenacknowledgement), provided that if such notice or other communication isnot sent during the normal business hours of the recipient, such notice orcommunication shall be deemed to have been sent at the opening of business onthe next business day for the recipient, and (ii) notices orcommunications posted to an Internet or intranet website shall be deemedreceived upon the deemed receipt by the intended recipient at its e-mailaddress as described in the foregoing clause (i) of notification that suchnotice or communication is available and identifying the website addresstherefor.

 

### (c)           The Platform.  THEPLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOTWARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACYOF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONSFROM THE BORROWER MATERIALS.  NO WARRANTYOR ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OFMERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRDPARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANYAGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent orany of its Related Parties (collectively, the “Agent Parties”) have anyliability to the Borrower, any Lender or any other Person for losses, claims,damages, liabilities or expenses of any kind (whether in tort, contract orotherwise) arising out of the Borrower’s or the Administrative Agent’stransmission of Borrower Materials through the Internet, except to the extentthat such losses, claims, damages, liabilities or expenses are determined by acourt of competent jurisdiction by a final and nonappealable judgment to haveresulted from the gross negligence or willful misconduct of such Agent Party; provided,however, that in no event shall any Agent Party have any liability tothe 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.  Eachof the Borrower and the Administrative Agent may change its address, telecopieror telephone number for notices and other communications hereunder by notice tothe other parties hereto.  Each other Lendermay change its address, telecopier or telephone number for notices and othercommunications hereunder by notice to the Borrower and the AdministrativeAgent.  In addition, each Lender agreesto notify the Administrative Agent from time to time to ensure that the AdministrativeAgent has on record (i) an effective address, contact name, telephone number,telecopier number and electronic mail address to which notices and othercommunications may be sent and (ii) accurate wire instructions for such Lender.

###  

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

###  

## **10.03      No Waiver; CumulativeRemedies. **Nofailure by any Lender or the Administrative Agent to exercise, and no delay byany such Person in exercising, any right, remedy, power or privilege hereundershall operate as a waiver thereof; nor shall any single or partial exercise ofany right, remedy, power or privilege hereunder preclude any other or furtherexercise thereof or the exercise of any other right, remedy, power orprivilege.  The rights, remedies, powersand privileges herein provided are cumulative and not exclusive of any rights,remedies, powers and privileges provided by law.

##  

## **10.04      Expenses; Indemnity; DamageWaiver.**

##  

### (a)           Costs and Expenses.  TheBorrower shall pay (i) all reasonable out-of-pocket expenses incurred bythe Administrative Agent and its Affiliates (including the reasonable fees,charges and disbursements of counsel for the Administrative Agent), inconnection with the syndication of the credit facilities provided for herein,the preparation, negotiation, execution, delivery and administration of thisAgreement and the other Loan Documents or any amendments, modifications orwaivers of the provisions hereof or thereof (whether or not the transactionscontemplated hereby or thereby shall be consummated) and (ii) all out-of-pocketexpenses incurred by the Administrative Agent or any Lender (including thefees, charges and disbursements of any counsel for the Administrative Agent orany 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 theLoans made hereunder, including all such out-of-pocket expenses incurred duringany workout, restructuring or negotiations in respect of such Loans.

###  

### (b)           Indemnification by the Borrower.  TheBorrower 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 suchPerson being called an “Indemnitee”) against, and hold each Indemniteeharmless from, any and all losses, claims, damages, liabilities and relatedexpenses (including the fees, charges and disbursements of any counsel for anyIndemnitee), incurred by any Indemnitee or asserted against any Indemnitee byany third party or by the Borrower or any other Loan Party arising out of, inconnection with, or as a result of (i) the execution or delivery of thisAgreement, any other Loan Document or any agreement or instrument contemplatedhereby or thereby, the performance by the parties hereto of their respectiveobligations hereunder or thereunder, or the consummation of the transactionscontemplated hereby or thereby, or in the case of the Administrative Agent (andany sub-agent thereof) and its Related Parties only, the administration of thisAgreement and the other Loan Documents, (ii) any Loan or the use orproposed use of the proceeds therefrom, (iii) any actual or allegedpresence or release of Hazardous Materials on or from any property owned oroperated by the Borrower or any of its Subsidiaries, or any Environmental Liabilityrelated in any way to the Borrower or any of its Subsidiaries, or (iv) anyactual or prospective claim, litigation, investigation or proceeding relatingto 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 allcases, whether or not caused by or arising, in whole or in part, out of thecomparative, contributory or sole negligence of the Indemnitee**;provided that such indemnity shall not, as to any Indemnitee, beavailable to the extent that such losses, claims, damages, liabilities orrelated expenses (x) are determined by a court of competent jurisdictionby final and nonappealable judgment to have resulted from the gross negligenceor willful misconduct of such Indemnitee or (y) result from a claimbrought by the Borrower or any other Loan Party against an Indemnitee forbreach in bad faith of such Indemnitee’s obligations hereunder or under anyother Loan Document, if the Borrower or such Loan Party has obtained a finaland nonappealable judgment in its favor on such claim as determined by a courtof competent jurisdiction.

###  

### (c)           Reimbursement by Lenders.  Tothe extent that the Borrower for any reason fails to indefeasibly pay anyamount required under subsection (a) or (b) of this Section to bepaid by it to the Administrative Agent (or any sub-agent thereof) or anyRelated Party of any of the foregoing, each Lender severally agrees to pay tothe Administrative Agent (or any such sub-agent) or such Related Party, as thecase may be, such Lender’s Applicable Percentage (determined as of the timethat the applicable unreimbursed expense or indemnity payment is sought) ofsuch unpaid amount, provided that the unreimbursed expense orindemnified loss, claim, damage, liability or related expense, as the case maybe, was incurred by or asserted against the Administrative Agent (or any suchsub-agent) in its capacity as such, or against any Related Party of any of theforegoing acting for the Administrative Agent (or any such sub-agent) inconnection with such capacity.  Theobligations of the Lenders under this subsection (c) are subject to theprovisions of Section 2.11(d).

###  

### (d)           Waiver of Consequential Damages,Etc.  To the fullest extent permitted by applicable Law, theBorrower shall not assert, and hereby waives, any claim against any Indemnitee,on any theory of liability, for special, indirect, consequential or punitivedamages (as opposed to direct or actual damages) arising out of, in connectionwith, or as a result of, this Agreement, any other Loan Document or anyagreement or instrument contemplated hereby, the transactions contemplatedhereby 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 anyinformation or other materials distributed by it through telecommunications,electronic or other information transmission systems in connection with thisAgreement or the other Loan Documents or the transactions contemplated herebyor thereby in the absence of its own gross negligence or willful misconduct.

###  

### (e)           Payments.  Allamounts due under this Section shall be payable not later than ten BusinessDays after demand therefor; provided such demand shall be accompanied bya reasonably detailed invoice outlining the costs and expenses to bereimbursed.

###  

### (f)            Survival.  Theagreements in this Section shall survive the resignation of the AdministrativeAgent, the replacement of any Lender, the termination of the AggregateCommitments and the repayment, satisfaction or discharge of all the otherObligations.

###  

## **10.05      Payments SetAside. **To theextent that any payment by or on behalf of the Borrower is made to theAdministrative Agent or any Lender, or the Administrative Agent or any Lenderexercises its right of setoff, and such payment or the proceeds of such setoffor any part thereof is subsequently invalidated, declared to be fraudulent orpreferential, set aside or required (including pursuant to any settlemententered into by the Administrative Agent or such Lender in its discretion) tobe repaid to a trustee, receiver or any other party, in connection with anyproceeding under any Debtor Relief Law or otherwise, then (a) to the extent ofsuch recovery, the obligation or part thereof originally intended to besatisfied shall be revived and continued in full force and effect as if suchpayment had not been made or such setoff had not occurred, and (b) each Lenderseverally agrees to pay to the Administrative Agent upon demand its applicableshare (without duplication) of any amount so recovered from or repaid by theAdministrative Agent, plus interest thereon from the date of such demand to thedate such payment is made at a rate per annum equal to the Federal Funds Ratefrom time to time in effect.  Theobligations of the Lenders under clause (b) of the preceding sentence shallsurvive the payment in full of the Obligations and the termination of thisAgreement.

##  

## **10.06      Successors and Assigns.**

##  

### (a)           Successors and Assigns Generally.  Theprovisions of this Agreement shall be binding upon and inure to the benefit of theparties 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 LoanParty may assign or otherwise transfer any of its rights or obligationshereunder without the prior written consent of the Administrative Agent andeach Lender and no Lender may assign or otherwise transfer any of its rights orobligations hereunder except (i) to an Eligible Assignee in accordance with theprovisions of subsection (b) of this Section, (ii) by way of participation inaccordance with the provisions of subsection (d) of this Section, (iii) by wayof pledge or assignment of a security interest subject to the restrictions ofsubsection (f) of this Section, or (iv) to an SPC in accordance with theprovisions of subsection (h) of this Section (and any other attemptedassignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed orimplied, shall be construed to confer upon any Person (other than the partieshereto, their respective successors and assigns permitted hereby, Participantsto the extent provided in subsection (d) of this Section and, to the extentexpressly contemplated hereby, the Related Parties of each of the

 

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### Administrative Agent and the Lenders) anylegal 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 ormore Eligible Assignees all or a portion of its rights and obligations underthis Agreement (including all or a portion of its Commitment and the Loans atthe time owing to it); provided that

###  

#### (i)            except in the case of an assignmentof the entire remaining amount of the assigning Lender’s Commitment and theLoans at the time owing to it or in the case of an assignment to a Lender or anAffiliate of a Lender or an Approved Fund with respect to a Lender, theaggregate amount of the Commitment (which for this purpose includes Loansoutstanding thereunder) or, if the Commitment is not then in effect, theprincipal outstanding balance of the Loans of the assigning Lender subject toeach such assignment, determined as of the date the Assignment and Assumptionwith respect to such assignment is delivered to the Administrative Agent or, if“Trade Date” is specified in the Assignment and Assumption, as of the TradeDate, shall not be less than $5,000,000****unless theArranger otherwise consents (such consent not to be unreasonably withheld ordelayed); provided, however, that concurrent assignments tomembers of an Assignee Group and concurrent assignments from members of anAssignee Group to a single Eligible Assignee (or to an Eligible Assignee andmembers of its Assignee Group) will be treated as a single assignment forpurposes of determining whether such minimum amount has been met;

####  

#### (ii)           each partial assignment shall be madeas an assignment of a proportionate part of all the assigning Lender’s rightsand obligations under this Agreement with respect to the Loans or theCommitment assigned;

####  

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

####  

#### (iv)          the parties to each assignment shallexecute and deliver to the Administrative Agent an Assignment and Assumption,together with a processing and recordation fee in the amount, if any, requiredas set forth in Schedule 10.06 and the Eligible Assignee, if it shallnot be a Lender, shall deliver to the Administrative Agent an AdministrativeQuestionnaire.

####  

Subject toacceptance and recording thereof by the Administrative Agent pursuant tosubsection (c) of this Section, from and after the effective date specified ineach Assignment and Assumption, the Eligible Assignee thereunder shall be aparty to this Agreement and, to the extent of the interest assigned by suchAssignment and Assumption, have the rights and obligations of a Lender underthis Agreement, and the assigning Lender thereunder shall, to the extent of theinterest assigned by such Assignment and Assumption, be released from itsobligations under this Agreement (and, in the case of an Assignment andAssumption covering all of the assigning Lender’s rights and obligations underthis Agreement, such Lender shall cease to be a party hereto) but shallcontinue 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 priorto the effective date of such assignment. Upon request, the Borrower (at its expense) shall execute and deliver aNote to the assignee Lender.  Anyassignment or transfer by a Lender of rights or obligations under thisAgreement that does not comply with this subsection shall be treated forpurposes of this Agreement as a sale by such Lender of a participation in suchrights and obligations in accordance with subsection (d) of this Section.

 

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

###  

### (d)           Participations.  AnyLender may at any time, without the consent of, or notice to, the Borrower orthe Administrative Agent, sell participations to any Person (other than anatural person or the Borrower or any of the Borrower’s Affiliates orSubsidiaries) (each, a “Participant”) in all or a portion of such Lender’srights and/or obligations under this Agreement (including all or a portion ofits 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 partieshereto for the performance of such obligations and (iii) the Borrower, theAdministrative Agent and the Lenders shall continue to deal solely and directlywith such Lender in connection with such Lender’s rights and obligations underthis Agreement.

###  

Any agreementor instrument pursuant to which a Lender sells such a participation shallprovide that such Lender shall retain the sole right to enforce this Agreementand to approve any amendment, modification or waiver of any  provision of this Agreement; providedthat such agreement or instrument may provide that such Lender will not,without the consent of the Participant, agree to any amendment, waiver or othermodification described in the first proviso to Section 10.01 thataffects such Participant.  Subject tosubsection (e) of this Section, the Borrower agrees that each Participant shallbe 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 acquiredits interest by assignment pursuant to subsection (b) of this Section.  To the extent permitted by law, eachParticipant also shall be entitled to the benefits of Section 10.08**as though it were a Lender, provided suchParticipant agrees to be subject to Section 2.12 as though it werea Lender.

 

### (e)           Limitations upon ParticipantRights.  A Participant shall not be entitled to receive anygreater payment under Section 3.01 or 3.04**than the applicable Lender would have been entitled toreceive with respect to the participation sold to such Participant, unless thesale of the participation to such Participant is made with the Borrower’s priorwritten consent.  A

 

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

###  

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

###  

### (g)           Electronic Execution ofAssignments.  The words “execution,” “signed,” “signature,” andwords of like import in any Assignment and Assumption shall be deemed toinclude electronic signatures or the keeping of records in electronic form,each of which shall be of the same legal effect, validity or enforceability asa 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 CommerceAct, the New York State Electronic Signatures and Records Act, or any othersimilar state laws based on the Uniform Electronic Transactions Act.

###  

### (h)           Special Purpose Funding Vehicles.  Notwithstandinganything to the contrary contained herein, any Lender (a “Granting Lender”)may grant to a special purpose funding vehicle identified as such in writingfrom time to time by the Granting Lender to the Administrative Agent and theBorrower (an “SPC”) the option to provide all or any part of any Loanthat such Granting Lender would otherwise be obligated to make pursuant to thisAgreement; provided that (i) nothing herein shall constitute acommitment by any SPC to fund any Loan, and (ii) if an SPC elects not toexercise 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 termshereof or, if it fails to do so, to make such payment to the AdministrativeAgent 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 shallincrease the costs or expenses or otherwise increase or change the obligationsof the Borrower under this Agreement (including its obligations under Section 3.04),(ii) no SPC shall be liable for any indemnity or similar payment obligationunder this Agreement for which a Lender would be liable, and (iii) the GrantingLender shall for all purposes, including the approval of any amendment, waiveror other modification of any provision of any Loan Document, remain the lenderof record hereunder.  The making of aLoan by an SPC hereunder shall utilize the Commitment of the Granting Lender tothe same extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each partyhereto hereby agrees (which agreement shall survive the termination of thisAgreement) that, prior to the date that is one year and one day after thepayment in full of all outstanding commercial paper or other senior debt of anySPC, it will not institute against, or join any other Person in institutingagainst, such SPC any bankruptcy, reorganization, arrangement, insolvency, orliquidation proceeding under the laws of the United States or any Statethereof.  Notwithstanding anything to thecontrary contained herein, any SPC may (i) with notice to, but without priorconsent of the Borrower and the Administrative Agent and with the payment of aprocessing fee in the amount of $3,500, assign all or any portion of its rightto

 

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### receive payment with respect to any Loan tothe Granting Lender and (ii) disclose on a confidential basis any non-publicinformation relating to its funding of Loans to any rating agency, commercialpaper dealer or provider of any surety or guarantee or credit or liquidityenhancement to such SPC.

###  

## **10.07      Treatment of CertainInformation; Confidentiality. **Eachof the Administrative Agent and the Lenders agrees to maintain theconfidentiality of the Information (as defined below), except that Informationmay be disclosed (a) to its Affiliates and to its and its Affiliates’respective partners, directors, officers, employees, agents, advisors andrepresentatives (it being understood that the Persons to whom such disclosureis made will be informed of the confidential nature of such Information andinstructed to keep such Information confidential), (b) to the extentrequested by any regulatory authority purporting to have jurisdiction over it(including any self-regulatory authority, such as the National Association ofInsurance Commissioners), (c) to the extent required by applicable Laws orregulations or by any subpoena or similar legal process, (d) to any otherparty hereto, (e) in connection with the exercise of any remedieshereunder or under any other Loan Document or any action or proceeding relatingto this Agreement or any other Loan Document or the enforcement of rightshereunder or thereunder, (f) subject to an agreement containing provisionssubstantially the same as those of this Section, to (i) any assignee of orParticipant in, or any prospective assignee of or Participant in, any of itsrights or obligations under this Agreement or (ii) any actual or prospectivecounterparty (or its advisors) to any Hedging Contract relating to the Borrowerand its obligations, (g) with the consent of the Borrower or (h) tothe extent such Information (x) becomes publicly available other than as aresult of a breach of this Section or (y) becomes available to theAdministrative Agent, any Lender or any of their respective Affiliates on anonconfidential basis from a source other than the Borrower.

##  

For purposesof this Section, “Information” means all information received from theBorrower or any Subsidiary relating to the Borrower or any Subsidiary or any oftheir respective businesses, other than any such information that is availableto the Administrative Agent or any Lender on a nonconfidential basis prior todisclosure by the Borrower or any Subsidiary, provided that, in the caseof information received from the Borrower or any Subsidiary after the datehereof, such information is clearly identified at the time of delivery asconfidential.  Any Person required tomaintain the confidentiality of Information as provided in this Section shallbe considered to have complied with its obligation to do so if such Person hasexercised the same degree of care to maintain the confidentiality of suchInformation as such Person would accord to its own confidential information.

 

Each of theAdministrative Agent and the Lenders acknowledges that (a) the Information mayinclude material non-public information concerning the Borrower or aSubsidiary, as the case may be, (b) it has developed compliance proceduresregarding the use of material non-public information and (c) it will handlesuch material non-public information in accordance with applicable Law,including Federal and state securities Laws.

 

## **10.08      Right of Setoff. **If an Event of Defaultshall have occurred and be continuing, each Lender and each of their respectiveAffiliates is hereby authorized at any time and from time to time, to thefullest extent permitted by applicable Law, to set off and apply any and alldeposits (general or special, time or demand, provisional or final, in whatevercurrency) at any

 

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## time held and other obligations (in whatevercurrency) at any time owing by such Lender or any such Affiliate to or for thecredit or the account of the Borrower orany other Loan Party against any and all of the obligations of theBorrower or such Loan Party nowor hereafter existing under this Agreement or any other Loan Document to suchLender, irrespective of whether or not such Lender shall have made any demandunder this Agreement or any other Loan Document and although such obligationsof the Borrower or such Loan Partymay be contingent or unmatured or are owed to a branch or office of such Lenderdifferent from the branch or office holding such deposit or obligated on suchindebtedness.  The rights of each Lenderand their respective Affiliates under this Section are in addition to otherrights and remedies (including other rights of setoff) that such Lender ortheir respective Affiliates may have. Each Lender agrees to notify the Borrower and the Administrative Agentpromptly after any such setoff and application, provided that thefailure to give such notice shall not affect the validity of such setoff andapplication.

##  

## **10.09      Interest RateLimitation. **Notwithstandinganything to the contrary contained in any Loan Document, the interest paid oragreed to be paid under the Loan Documents shall not exceed the maximum rate ofnon-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lendershall receive interest in an amount that exceeds the Maximum Rate, the excessinterest shall be applied to the principal of the Loans or, if it exceeds suchunpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or receivedby the Administrative Agent or a Lender exceeds the Maximum Rate, such Personmay, to the extent permitted by applicable Law, (a) characterize any paymentthat 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 ofinterest throughout the contemplated term of the Obligations hereunder.

##  

## **10.10      Counterparts;Integration; Effectiveness. **ThisAgreement may be executed in counterparts (and by different parties hereto indifferent counterparts), each of which shall constitute an original, but all ofwhich when taken together shall constitute a single contract.  This Agreement and the other Loan Documentsconstitute the entire contract among the parties relating to the subject matterhereof and supersede any and all previous agreements and understandings, oralor 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 theAdministrative Agent and when the Administrative Agent shall have receivedcounterparts hereof that, when taken together, bear the signatures of each ofthe other parties hereto.  Delivery of anexecuted counterpart of a signature page of this Agreement by telecopy shall beeffective as delivery of a manually executed counterpart of this Agreement.

##  

## **10.11      Survival ofRepresentations and Warranties. **Allrepresentations and warranties made hereunder and in any other Loan Document orother document delivered pursuant hereto or thereto or in connection herewithor therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have beenor will be relied upon by the Administrative Agent and each Lender, regardlessof any investigation made by the Administrative Agent or any Lender or on theirbehalf and notwithstanding that the Administrative Agent or any Lender may havehad notice or knowledge of any Default at the time of any Loan, and shallcontinue in full force and effect as long as any Loan or any other Obligationhereunder shall remain unpaid or unsatisfied.

 

79

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## **10.12      Severability. **If any provision ofthis Agreement or the other Loan Documents is held to be illegal, invalid orunenforceable, (a) the legality, validity and enforceability of the remainingprovisions of this Agreement and the other Loan Documents shall not be affectedor impaired thereby and (b) the parties shall endeavor in good faithnegotiations to replace the illegal, invalid or unenforceable provisions withvalid provisions the economic effect of which comes as close as possible tothat of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particularjurisdiction shall not invalidate or render unenforceable such provision in anyother jurisdiction.

##  

## **10.13      Replacement ofLenders. **If (a)any Lender requests compensation under Section 3.04 or gives noticepursuant to Section 3.02, (b) the Borrower is required to pay anyadditional amount to any Lender or any Governmental Authority for the accountof any Lender pursuant to Section 3.01, (c) any Lender fails toconsent to an election, consent, amendment, waiver or other modification tothis Agreement or any other Loan Document that requires the consent of agreater percentage of the Lenders than the Required Lenders and such election,consent, amendment, waiver or other modification is otherwise consented to bythe Required Lenders, or (d) if anyother circumstance exists hereunder that gives the Borrower the right toreplace a Lender as a party hereto, then the Borrower may, at its soleexpense and effort, upon notice to such Lender and the Administrative Agent,require such Lender to assign and delegate, without recourse (in accordancewith 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 therelated Loan Documents to an assignee that shall assume such obligations (whichassignee may be another Lender, if a Lender accepts such assignment), providedthat:

##  

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

###  

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

###  

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

###  

### (d)           such assignment does not conflictwith applicable Laws.

###  

A Lender shallnot be required to make any such assignment or delegation if, prior thereto, asa result of a waiver by such Lender or otherwise, the circumstances entitlingthe Borrower to require such assignment and delegation cease to apply.

 

## **10.14      Governing Law;Jurisdiction; Etc.**

##  

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

 

80

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### (b)           SUBMISSION TO JURISDICTION.  THEADMINISTRATIVE 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 OFTHE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATESDISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURTFROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TOTHIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OFANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLYAGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARDAND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTEDBY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCHACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONSBY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHERLOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANYLENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THISAGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITSPROPERTIES IN THE COURTS OF ANY JURISDICTION.

###  

### (c)           WAIVER OF VENUE.  THEADMINISTRATIVE 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 MAYNOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDINGARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANYCOURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLYWAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF ANINCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCHCOURT.

###  

### (d)           SERVICE OF PROCESS.  EACHPARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDEDFOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TOSERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

###  

## **10.15      Waiver of JuryTrial. **EACHPARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BYAPPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGALPROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENTOR 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 NOREPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,EXPRESSLY OR

 

81

----

 

## OTHERWISE,THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCETHE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIESHERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOANDOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THISSECTION.

##  

## **10.16      USA Patriot ActNotice. **EachLender that is subject to the Act (as hereinafter defined) and theAdministrative Agent (for itself and not on behalf of any Lender) herebynotifies 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 theBorrower, which information includes the name and address of the Borrower andother information that will allow such Lender or the Administrative Agent, asapplicable, to identify the Borrower in accordance with the Act.

##  

## **10.17      ENTIRE AGREEMENT. **THIS AGREEMENT ANDTHE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES ANDMAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENTORAL AGREEMENTS OF THE PARTIES.  THEREARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

##  

 [THE REMAINDER OF THIS PAGE ISINTENTIONALLY LEFT BLANK.]

 

82

----

 

*IN WITNESS WHEREOF,*the parties hereto havecaused 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***

** **

**COMMITMENTSAND 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 thefollowing capital lease for two compressor units:  Schedule No. 4, dated February 8, 2002, toMaster Finance Lease dated August 14, 2001 between Caterpillar FinancialServices Corporation and ScissorTail Energy, LLC

 

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

 

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

 

4.             Liabilities in connection withoffice lease dated August 1, 2000 between Noble Building Investors andScissorTail Energy, LLC

 

5.             Liabilities in connection withoffice lease dated November 1, 1988 between Arrow Energy, Inc and ScissorTailEnergy, LLC

 

6.             Liabilities in connection withBusiness Lease dated February 26, 2001 between Don and Lavonna Kinnamon andScissorTail Energy, LLC

 

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

 

8.             Pursuant to the Amended andRestated Operating Agreement of Southern Dome, LLC (“Southern Dome”) dated asof August 1, 2005, ScissorTail Energy, LLC is obligated to make certain capitalcontributions to Southern Dome

 

----

 

***SCHEDULE 5.09***

 

**ENVIRONMENTAL MATTERS**

 

NONE

 

----

 

***SCHEDULE 5.13***

 

**SUBSIDIARIES ANDOTHER 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, LPCopano  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)  ScissorTailEnergy, LLC is obligated to make 100% of capital contributions until such timeas its capital account balance equals 73% of the aggregate capital accountbalances of the members.

 

Part (b).  Other Equity Investments.

 

None.

 

----

 

***SCHEDULE 7.01***

 

**EXISTING LIENS**

 

Liensgranted in connection with the liabilities described in Items 1-3 of Schedule5.05

 

----

 

***SCHEDULE 7.03***

 

**EXISTING INDEBTEDNESS**

 

Indebtednessin connection with the following capital lease for two compressor units:  Schedule No. 4, dated February 8, 2002, toMaster Finance Lease dated August 14, 2001 between Caterpillar FinancialServices Corporation and ScissorTail Energy, LLC

 

----

 

***SCHEDULE7.11***

 

**PROHIBITEDCONTRACTS**

 

**NONE**

 

----

 

***SCHEDULE 10.02***

 

**ADMINISTRATIVE AGENT’S OFFICE;CERTAIN ADDRESSES FOR NOTICES**

 

**BORROWER:**

 

2727 Allen Parkway, Suite 1200Houston, Texas 77019

 

Attention:  Matt AssiffTelephone:  713-621-9547Telecopier:  713-621-9545Electronic Mail: matt.assiff@copanoenergy.comWebsite Address:  www.copanoenergy.com

 

**ADMINISTRATIVE AGENT:**

 

*AdministrativeAgent’s Office (for payments):*Banc of America Bridge LLC101 North Tryon StreetMail Code:  NC1-001-15-04Charlotte, North Carolina  28255Attention:  Melissa MullisTelephone:  (704) 386-9372Telecopier:  (704) 264-2445Electronic Mail:  Melissa.mullis@bankofamerica.com

 

*Wire Instructions:***Bank of America

New York, New York

ABA 026009593

Acct # 1366212250600

Acct Name: Corporate CreditServices

Ref: Copano Energy LLCBridge

 

*OtherNotices to Administrative Agent:*Banc of America Bridge LLC100 North Tryon StreetMail Code:  NC1-007-13-06Charlotte, North Carolina  28255-0001Attention:  Coleigh McKayTelephone:  (704) 387-4054Telecopier:  (704) 409-0174Electronic Mail:  Coleigh.b.mckay@bankofamerica.com

 

----

 

***SCHEDULE 10.06***

 

**PROCESSING AND RECORDATION FEES**

 

The Administrative Agent will charge aprocessing and recordation fee (an “Assignment Fee”) in the amount of $3,500for each assignment; provided, however, that in the event of two or moreconcurrent assignments to members of the same Assignee Group (which may beeffected by a suballocation of an assigned amount among members of the sameAssignee Group) or two or more concurrent assignments by members of the sameAssignee Group to a single Eligible Assignee (or to an Eligible Assignee andmembers of its Assignee Group), the Assignee Fee will be $3,500 plus the amountset 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 provisionsof the Agreement (as hereinafter defined), the principal amount of each Loanfrom time to time made by the Lender to the Borrower under that certain BridgeLoan 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 theBorrower, the Lenders and other agents from time to time party thereto, and Bancof America Bridge LLC, as Administrative Agent.

 

The Borrower promises to pay interest on theunpaid principal amount of each Loan from the date of such Loan until suchprincipal amount is paid in full, at such interest rates and at such times asprovided in the Agreement.  All paymentsof principal and interest shall be made to the Administrative Agent for the accountof the Lender in Dollars in immediately available funds at the AdministrativeAgent’s Office.  If any amount is notpaid in full when due hereunder, such unpaid amount shall bear interest, to bepaid 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 forthin the Agreement.

 

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

 

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

 

----

 

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

 
|   | COPANO ENERGY, L.L.C. |
|--------|-----------------------|
|   |                  |
|   |                  |
|   | By:                   |   |   |
|   | Name:                 |
|   | Title:                |

 

2

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**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

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***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 provisionsof the Agreement (as hereinafter defined), the principal amount of each Loanfrom time to time made by the Lender to the Borrower under that certain BridgeLoan 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 theBorrower, the Lenders and other agents from time to time party thereto, andBanc of America Bridge LLC, as Administrative Agent.

 

The Borrower promises to pay interest on theunpaid principal amount of each Loan from the date of such Loan until suchprincipal amount is paid in full, at such interest rates and at such times asprovided in the Agreement.  All paymentsof principal and interest shall be made to the Administrative Agent for theaccount of the Lender in Dollars in immediately available funds at theAdministrative Agent’s Office.  If anyamount is not paid in full when due hereunder, such unpaid amount shall bearinterest, to be paid upon demand, from the due date thereof until the date ofactual payment (and before as well as after judgment) computed at the per annumrate set forth in the Agreement.

 

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

 

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

 

----

 

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

 
|   | COPANO ENERGY, L.L.C. |
|--------|-----------------------|
|   |                  |
|   |                  |
|   | By:                   |   |   |
|   | Name:                 |
|   | Title:                |

 

2

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**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

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***EXHIBIT D***

 

**FORM OF COMPLIANCE CERTIFICATE**

** **

Financial Statement Date:               ,

 

To:          Banc of America Bridge LLC, asAdministrative Agent

 

Ladies andGentlemen:

 

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

 

The undersigned Responsible Officer herebycertifies as of the date hereof that he/she is the                                             of the Borrower, and that, as such, he/she is authorized to execute and deliverthis Certificate to the Administrative Agent on the behalf of the Borrower, andthat:

 

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

 

1.             Attached hereto as Schedule 1are 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 abovedate, together with the report and opinion of a Registered Public AccountingFirm required by such section.

 

*[Usefollowing paragraph 1 for fiscal **quarter-end**financial statements]*

 

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

 

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

 

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

 

----

 

***[select one:]***

**[to the knowledge of the undersigned afterdue inquiry during such fiscal period, the Borrower performed and observed eachcovenant and condition of the Loan Documents applicable to it, and no Defaulthas occurred and is continuing.]**

 

***–or–***

**[the following covenants or conditions havenot been performed or observed and the following is a list of each such Defaultand its nature and status:]**

 

1.             The representations and warranties of the Borrowercontained in Article V of the Agreement, and any representations andwarranties of the Borrower thatare contained in any document furnished at any time under or in connection withthe Loan Documents, are true and correct in all material respects on and as ofthe date hereof, except to the extent that such representations and warrantiesspecifically refer to an earlier date, in which case they are true and correctin all material respects as of such earlier date, and except that for purposesof this Compliance Certificate, the representations and warranties contained insubsections (a) and (b) of Section 5.05 of the Agreement shall bedeemed to refer to the most recent statements furnished pursuant to clauses (a)and (b), respectively, of Section 6.01 of the Agreement, includingthe statements in connection with which this Compliance Certificate isdelivered.

 

2.             The financial covenant analyses and information setforth on Schedule 2 attached hereto are true and accurate in allmaterial 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                               (“StatementDate”)

 

**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                           (“StatementDate”)

 

**SCHEDULE 3**to the Compliance Certificate($ in 000’s)

 

**Consolidated EBITDA**(in accordance with the definition of ConsolidatedEBITDAas 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

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***EXHIBIT E***

 

**ASSIGNMENT AND ASSUMPTION**

 

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

 

For an agreed consideration, the Assignorhereby irrevocably sells and assigns to the Assignee, and the Assignee herebyirrevocably purchases and assumes from the Assignor, subject to and inaccordance with the Standard Terms and Conditions and the Bridge Loan Agreement,as of the Effective Date inserted by the Administrative Agent as contemplatedbelow (i) all of the Assignor’s rights and obligations as a Lender under the BridgeLoan Agreement and any other documents or instruments delivered pursuantthereto to the extent related to the amount and percentage interest identifiedbelow of all of such outstanding rights and obligations of the Assignor underthe respective facilities identified below and (ii) to the extent permitted tobe assigned under applicable law, all claims, suits, causes of action and anyother 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 LoanAgreement, any other documents or instruments delivered pursuant thereto or theloan transactions governed thereby or in any way based on or related to any ofthe foregoing, including, but not limited to, contract claims, tort claims,malpractice claims, statutory claims and all other claims at law or in equityrelated 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 recourseto the Assignor and, except as expressly provided in this Assignment andAssumption, without representation or warranty by the Assignor.

 

1.                                      Assignor:                                                                           

 

2.                                      Assignee:                                                                            [andis an Affiliate/Approved Fund of [*identify Lender*]]

 

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

 

4.                                      AdministrativeAgent: Banc of America Bridge LLC, as the administrative agent under the BridgeLoan Agreement

 

5.                                      BridgeLoan Agreement:    Bridge LoanAgreement, dated as of August 1, 2005, among Copano Energy, L.L.C., the Lendersfrom time to time party thereto, and Bancof America Bridge LLC, as Administrative Agent

 

----

 

6.                                      AssignedInterest:

 
| **Facility Assigned** | ** ** | **Aggregate  Amount of  Commitment/Loans  for all Lenders*** | ** ** | **Amount of  Commitment/Loans  Assigned*** | ** ** | **Percentage  Assigned of  Commitment/Loans** | ** ** | **CUSIP Number** | ** ** |
|-----------------------|------------|--------------------------------------------------------------|------------|--------------------------------------------|------------|-----------------------------------------------|------------|------------------|------------|
|                  |       |                                                         |       |                                       |       |                                          |       |             |       |
|                  |       | $                                                            |       | $                                          |       |                                          | %          |             |       |
|                  |       | $                                                            |       | $                                          |       |                                          | %          |             |       |
|                  |       | $                                                            |       | $                                          |       |                                          | %          |             |       |
|                  |       |                                                         |       |                                       |       |                                          |       |             |       |

 

[7.                                  TradeDate:                                              

 

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

 

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

 

2

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|                                | 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 ANDASSUMPTION***

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1.             Representationsand Warranties.

 

1.1.         Assignor.  The Assignor (a) represents and warrants that(i) it is the legal and beneficial owner of the Assigned Interest, (ii) theAssigned Interest is free and clear of any lien, encumbrance or other adverseclaim and (iii) it has full power and authority, and has taken all actionnecessary, to execute and deliver this Assignment and Assumption and toconsummate the transactions contemplated hereby; and (b) assumes noresponsibility with respect to (i) any statements, warranties orrepresentations made in or in connection with the Bridge Loan Agreement or anyother Loan Document, (ii) the execution, legality, validity, enforceability,genuineness, sufficiency or value of the Loan Documents or any collateralthereunder, (iii) the financial condition of the Borrower, any of itsSubsidiaries or Affiliates or any other Person obligated in respect of any LoanDocument or (iv) the performance or observance by the Borrower, any of itsSubsidiaries or Affiliates or any other Person of any of their respectiveobligations 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, toexecute and deliver this Assignment and Assumption and to consummate thetransactions contemplated hereby and to become a Lender under the Bridge LoanAgreement, (ii) it meets all requirements of an Eligible Assignee under the BridgeLoan Agreement (subject to receipt of such consents as may be required underthe Bridge Loan Agreement), (iii) from and after the Effective Date, it shallbe bound by the provisions of the Bridge Loan Agreement as a Lender thereunderand, to the extent of the Assigned Interest, shall have the obligations of aLender thereunder, (iv) it has received a copy of the Bridge Loan Agreement,together with copies of the most recent financial statements delivered pursuantto Section           thereof, asapplicable, and such other documents and information as it has deemedappropriate to make its own credit analysis and decision to enter into thisAssignment and Assumption and to purchase the Assigned Interest on the basis ofwhich it has made such analysis and decision independently and without relianceon the Administrative Agent or any other Lender, and (v) if it is a ForeignLender, attached hereto is any documentation required to be delivered by itpursuant to the terms of the Bridge Loan Agreement, duly completed and executedby the Assignee; and (b) agrees that (i) it will, independently and withoutreliance on the Administrative Agent, the Assignor or any other Lender, andbased on such documents and information as it shall deem appropriate at thetime, continue to make its own credit decisions in taking or not taking actionunder the Loan Documents, and (ii) it will perform in accordance with theirterms all of the obligations which by the terms of the Loan Documents arerequired to be performed by it as a Lender.

 

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

 

4

----

 

3.             GeneralProvisions.  This Assignment andAssumption shall be binding upon, and inure to the benefit of, the partieshereto and their respective successors and assigns.  This Assignment and Assumption may beexecuted in any number of counterparts, which together shall constitute oneinstrument.  Delivery of an executedcounterpart of a signature page of this Assignment and Assumption by telecopyshall be effective as delivery of a manually executed counterpart of thisAssignment and Assumption.  ThisAssignment and Assumption shall be governed by, and construed in accordancewith, 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 followingSections 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 UNDERSIGNEDHEREBY CERTIFIES AS FOLLOWS:**

 

1.             I am thechief financial officer of **Copano Energy, L.L.C.,**aDelaware limited liability company (**“Borrower”**).

 

2.             Referenceis made to that certain Bridge Loan Agreement, dated as of August 1, 2005 (asit may be amended, supplemented or otherwise modified, the **“Bridge Loan Agreement”**; the terms definedtherein 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 AdministrativeAgent.

 

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

 

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

 

The foregoing certifications aremade 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 MANAGEMENTPOLICY**

 

**(See attached)**

 

----