Document:

exv10w40

 

Exhibit 10.40

FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) dated as of
the 19th day of October, 2007, by and among COPANO ENERGY, L.L.C. (“Borrower”), BANK OF AMERICA,
N.A., as Administrative Agent, LC Issuer and Swing Line Lender, JPMORGAN CHASE BANK, N.A. and
WACHOVIA BANK, NATIONAL ASSOCIATION, as Co-Syndication Agents, FORTIS CAPITAL CORP. and MERRILL
LYNCH CAPITAL, as Co-Documentation Agents, the Lenders party hereto and BANC OF AMERICA SECURITIES
LLC, as Sole Lead Arranger and Sole Book Manager.

W I T N E S S E T H:

     WHEREAS, Borrower, Administrative Agent and the lenders named therein entered into that
certain Amended and Restated Credit Agreement dated as of January 12, 2007 (the “Original
Agreement”) for the purposes and consideration therein expressed; and

     WHEREAS, Borrower, Administrative Agent and Lenders desire to amend the Original Agreement to
increase the Aggregate Commitments from $200,000,000 to $550,000,000, to extend the Maturity Date
to October 18, 2012, to provide financing for the Cantera Acquisition, including the refinancing of
certain Indebtedness of Cantera, and for the other purposes described herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
contained herein and in the Original Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as
follows:

ARTICLE I. — Definitions and References

     § 1.1. Terms Defined in the Original Agreement. Unless the context otherwise requires
or unless otherwise expressly defined herein, the terms defined in the Original Agreement shall
have the same meanings whenever used in this Amendment.

     § 1.2. Other Defined Terms. Unless the context otherwise requires, the following
terms when used in this Amendment shall have the meanings assigned to them in this § 1.2.

     “Amendment” means this First Amendment to Credit Agreement.

     “Credit Agreement” means the Original Agreement as amended hereby.

     “New Lender” means each of the new Lenders identified on Schedule 2.01 attached
hereto.

ARTICLE II. — Amendments

     § 2.1. Definitions. Section 1.01 of the Original Agreement and the definitions
therein are hereby amended as follows:

     The table in the definition of “Applicable Rate” shall read as follows:

 

 

Applicable Rate

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Eurodollar	 	 
	 	 	 	 	 	 	 	 	Rate +*	 	 
	Pricing	 	Consolidated	 	Commitment	 	Letters of	 	Base Rate
	Level	 	Leverage Ratio	 	Fee*	 	Credit*	 	+*
	    1

	 	>5.00:1
	 	 	0.375	%	 	 	2.50	%	 	 	1.50	%
	    2

	 	>4.50:1 but <
5.00:1
	 	 	0.375	%	 	 	2.25	%	 	 	1.25	%
	    3

	 	>4.00:1 but < 4.50:1
	 	 	0.300	%	 	 	2.00	%	 	 	1.00	%
	    4

	 	>3.50:1 but < 4.00:1
	 	 	0.250	%	 	 	1.75	%	 	 	0.75	%
	    5

	 	>3.00:1 but < 3.50:1
	 	 	0.250	%	 	 	1.50	%	 	 	0.50	%
	    6

	 	<3.00:1
	 	 	0.200	%	 	 	1.25	%	 	 	0.25	%

     The first sentence of the definition of “Base Rate” is amended by adding the following proviso
at the end thereof: “; provided that, as to any Swing Line Loan, the Base Rate means, for any day,
a rate per annum equal to the LIBOR Monthly Floating Base Rate”; and a new sentence is added at the
end of such definition, to read as follows:

	 	 	For purposes of this definition, “LIBOR Monthly Floating Base Rate” means, for any
day, the fluctuating rate of interest (rounded upwards, as necessary, to the nearest 1/100
of 1%) equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing quotations of BBA
LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00
a.m., London time, on such day, or if such day is not a Business Day, then the immediately
preceding Business Day (or if not so reported, then as determined by the Administrative
Agent from another recognized source or interbank quotation), for Dollar deposits with a
term of one month, as adjusted from time to time in the Administrative Agent’s sole
discretion for changes in deposit insurance requirements and other regulatory costs.

     New definitions of “Base Rate Committed Loan” and “Bighorn” are added in appropriate
alphabetical order, to read as follows:

     “Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.

     “Bighorn” means Bighorn Gas Gathering, L.L.C., a Delaware limited liability
company.

     The definition of “Borrowing” shall read as follows:

     “Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the
context may require.

     New definitions of “Cantera:, “Cantera Acquisition”, “Cantera Acquisition Agreement”, “Cantera
Acquisition Documents”, “Cantera Credit Facility”, “Cantera Equity Offering”,

2

 

     “Cantera Gas Holdings”, “CMS Subordinated Note” and “CMS Subordinated Security Agreement” are
added in appropriate alphabetical order, to read as follows:

     “Cantera” means Cantera Natural Gas, LLC, a Delaware limited liability company.

     “Cantera Acquisition” means the acquisition by Copano Energy/Rocky Mountains,
L.L.C., a wholly-owned Subsidiary of Borrower, of all of the Equity Interests in Cantera
pursuant to the Cantera Acquisition Agreement.

     “Cantera Acquisition Agreement” means the Purchase Agreement dated as of August
31, 2007 among Borrower, Copano Energy/Rocky Mountains, L.L.C., and Cantera Resources
Holdings, LLC relating to the purchase and sale of 100% of the Equity Interests in Cantera.

     “Cantera Acquisition Documents” means (a) the Cantera Acquisition Agreement,
(b) documents evidencing the termination of the Cantera Credit Facility and the termination
and release of all Liens securing the Cantera Credit Facility, and (c) all other agreements,
assignments, deeds, conveyances, certificates and other documents and instruments now or
hereafter executed and delivered in connection with the Cantera Acquisition.

     “Cantera Credit Facility” means that certain Fourth Amended and Restated Credit
Agreement dated as of March 3, 2005 among Cantera, the lenders party thereto, and Wells
Fargo Bank, National Association, as administrative agent and issuing bank, as amended,
refinanced as of the First Amendment Effective Date by proceeds of Loans hereunder.

     “Cantera Equity Offering” means the issuance by Borrower of Equity Interests,
the proceeds of which are to be used to finance the Cantera Acquisition.

     “Cantera Gas Holdings” means Cantera Gas Holdings, LLC, a Delaware limited
liability company, and a wholly-owned Subsidiary of Cantera.

     “CMS Subordinated Note” means that certain Amended and Restated Promissory Note
dated February 27, 2004 made by Cantera Gas Holdings and payable to the order of CMS Gas
Transmission Company in the original principal amount of $50,000,000.

     “CMS Subordinated Security Agreement” means that certain Security Agreement
dated as of February 27, 2004 between Cantera Gas Holdings in favor of CMS Gas Transmission
Company, pledging Cantera Gas Holdings’ Equity Interests (and interest, dividends and
distributions in respect thereof) in Bighorn and Fort Union.

     The reference to “Loans” in clause (a) of the definition of “Commitment” shall refer instead
to “Committed Loans”; “and” immediately prior to clause (b) thereof shall be deleted, and “(b)
purchase participations in L/C Obligations,” shall read “(b) purchase participations in L/C
Obligations, and (c) purchase participations in Swing Line Loans,”

     New definitions of “Committed Borrowing”, “Committed Loan” and “Committed Loan Notice” are
added in appropriate alphabetical order, to read as follows:

3

 

     “Committed Borrowing” means a borrowing consisting of simultaneous Committed
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period made by each of the Lenders pursuant to Section 2.01.

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

     “Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation of
Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A.

     The references to “Loans” and “participations in L/C Obligations” in clause (a) of the
definition of “Defaulting Lender” shall refer instead to “Committed Loans” and “participations in
L/C Obligations or participations in Swing Line Loans”, respectively.

     The reference to “a Loan” in the definition of “Eurodollar Rate Loan” shall refer instead to
“a Committed Loan”.

     New definitions of “First Amendment Effective Date” and “Fort Union” are added in appropriate
alphabetical order, to read as follows:

     “First Amendment Effective Date” has the meaning given such term in that
certain First Amendment to Credit Agreement dated October 19, 2007 among Borrower,
Administrative Agent and the Lenders a party thereto, amending this Agreement.

     “Fort Union” means Fort Union Gas Gathering, L.L.C., a Delaware limited
liability company.

     The reference to “as to any Base Rate Loan” in clause (b) of the definition of “Interest
Payment Date” shall refer instead to “as to any Base Rate Loan (including a Swing Line Loan)”.

     The reference to “Borrowing” in the definition of “L/C Borrowing” shall refer instead to
“Committed Borrowing”.

     The definition of “Lender” shall include at the end thereof: “and, as the context requires,
includes the Swing Line Lender”.

     The reference to “$25,000,000” in the definition of “Letter of Credit Sublimit” shall refer
instead to “$50,000,000”.

     The definition of “Loan” shall read as follows:

     “Loan” means an extension of credit by a Lender to the Borrower under
Article II in the form of a Committed Loan or a Swing Line Loan.

     The definition of “Loan Notice” is deleted in its entirety.

     The “and” immediately prior to clause (c) of the definition of “Material Contracts” is
deleted, clause (c) thereof is redesignated as clause (d), and a new clause (c) is added to read as
follows: “(c) the Cantera Acquisition Agreement, and”.

4

 

     The definition of “Maturity Date” shall read as follows:

     “Maturity Date” means October 18, 2012.

     The two references to “Loans” in clause (i) of the definition of “Outstanding Amount” shall
refer instead to “Committed Loans and Swing Line Loans”

     The definition of “Request for Credit Extension” shall read as follows:

     “Request for Credit Extension” means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to
an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing
Line Loan, a Swing Line Loan Notice.

     The reference to “risk participation and funded participation in L/C Obligations” in the
definition of “Required Lenders” shall refer instead to “risk participation and funded
participation in L/C Obligations and Swing Line Loans”.

     The new definitions of “Swing Line Borrowing”, “Swing Line Lender”, “Swing Line Loan”, “Swing
Line Loan Notice” and “Swing Line Sublimit” are hereby added in appropriate alphabetical order, to
read as follows:

     “Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

     “Swing Line Lender” means Bank of America in its capacity as provider of Swing
Line Loans, or any successor swing line lender hereunder.

     “Swing Line Loan” has the meaning specified in Section 2.04(a).

     “Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.

     “Swing Line Sublimit” means an amount equal to the lesser of (a) $50,000,000
and (b) the Aggregate Commitments. The Swing Line Sublimit is part of, and not in addition
to, the Aggregate Commitments.

     The first reference to “Loan” in the definition of “Type” shall refer instead to “Committed
Loan”.

     § 2.2. Committed Loans. Section 2.01 of the Original Agreement is hereby amended as
follows:

     All references to “Loan”, “Loans” or “Borrowing” shall refer instead to “Committed
Loan”, “Committed Loans” or “Committed Borrowing”, respectively.

     The reference to “such Lender’s Applicable Percentage of the Outstanding Amount of all
L/C Obligations” in clause (ii) shall refer instead to “such Lender’s Applicable Percentage
of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans”.

5

 

     § 2.3. Borrowings, Conversions and Continuations of Committed Loans. Section 2.02 of
the Original Agreement is hereby amended as follows:

     All references to “Borrowing”, “Loan”, “Loans”, “Base Rate Loans” or “Loan Notice”
shall refer instead to “Committed Borrowing”, “Committed Loan”, “Committed Loans”,
“Committed Base Rate Loans” or “Committed Loan Notice”, respectively.

     § 2.4. Letters of Credit. Section 2.03 of the Original Agreement is hereby amended as
follows:

     Clause (y) of the proviso in the first sentence of Section 2.03(a)(i) shall read as
follows: “(y) the aggregate Outstanding Amount of the Committed Loans of any Lender,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of
all Swing Line Loans shall not exceed such Lender’s Commitment, and”.

     The references to “Borrowing” and “Loan Notice” in the fourth sentence of Section
2.03(c)(i) shall refer instead to “Committed Borrowing” and “Committed Loan Notice”
respectively.

     The reference to “Base Rate Loan” in the first sentence of Section 2.03(c)(ii) shall
refer instead to “Base Rate Committed Loan”.

     The reference to “Borrowing” in the first sentence of Section 2.03(c)(iii) shall refer
instead to “Committed Borrowing”.

     The reference to “Loan” in Section 2.03(c)(iv) shall refer instead to “Committed Loan”.

     The two references to “Loans” and the reference to “Loan Notice” in the first sentence
of Section 2.03(c)(v) shall refer instead to “Committed Loans” and to “Committed Loan
Notice” respectively.

     § 2.5. Swing Line Loans. Section 2.04 of the Original Agreement is hereby amended in
its entirety to read as follows:

     2.04 Swing Line Loans.

     (a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in
this Section 2.04, to make loans (each such loan, a “Swing Line Loan”) to
the Borrower from time to time on any Business Day during the Availability Period in an
aggregate amount not to exceed at any time outstanding the amount of the Swing Line
Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the
Applicable Percentage of the Outstanding Amount of Committed Loans and L/C Obligations of
the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Commitment;
provided, however, that after giving effect to any Swing Line Loan, (i) the
Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus

6

 

such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans
shall not exceed such Lender’s Commitment, and provided, further, that the
Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding
Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.04, prepay under Section
2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a
Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing
Line Lender a risk participation in such Swing Line Loan in an amount equal to the product
of such Lender’s Applicable Percentage times the amount of such Swing Line Loan.

     (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which
may be given by telephone. Each such notice must be received by the Swing Line Lender and
the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall
specify (i) the amount to be borrowed, which shall be a minimum of $500,000, and (ii) the
requested borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a
written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer
of the Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing
Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has also received such Swing Line
Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by
telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at the request
of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A)
directing the Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the first proviso to the first sentence of Section 2.04(a),
or (B) that one or more of the applicable conditions specified in Article IV is not
then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender
will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower at its office by
crediting the account of the Borrower on the books of the Swing Line Lender in immediately
available funds.

     (c) Refinancing of Swing Line Loans.

     (i) The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the Borrower (which hereby irrevocably authorizes the Swing
Line Lender to so request on its behalf), that each Lender make a Base Rate
Committed Loan in an amount equal to such Lender’s Applicable Percentage of the
amount of Swing Line Loans then outstanding. Such request shall be made in writing
(which written request shall be deemed to be a Committed Loan Notice for purposes
hereof) and in accordance with the requirements of Section 2.02, without
regard to the minimum and multiples specified therein for the principal amount of
Base Rate Loans, but subject to the

7

 

unutilized portion of the Aggregate Commitments and the conditions set forth in
Section 4.02. The Swing Line Lender shall furnish the Borrower with a copy
of the applicable Committed Loan Notice promptly after delivering such notice to the
Administrative Agent. Each Lender shall make an amount equal to its Applicable
Percentage of the amount specified in such Committed Loan Notice available to the
Administrative Agent in immediately available funds for the account of the Swing
Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day
specified in such Committed Loan Notice, whereupon, subject to Section
2.04(c)(ii), each Lender that so makes funds available shall be deemed to have
made a Base Rate Committed Loan to the Borrower in such amount. The Administrative
Agent shall remit the funds so received to the Swing Line Lender.

     (ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Committed Borrowing in accordance with Section 2.04(c)(i), the request for
Base Rate Committed Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the Lenders
fund its risk participation in the relevant Swing Line Loan and each Lender’s
payment to the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such
participation.

     (iii) If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment is required
to the date on which such payment is immediately available to the Swing Line Lender
at a rate per annum equal to the greater of the Federal Funds Rate and a rate
determined by the Swing Line Lender in accordance with banking industry rules on
interbank compensation, plus any administrative, processing or similar fees
customarily charged by the Swing Line Lender in connection with the foregoing. If
such Lender pays such amount (with interest and fees as aforesaid), the amount so
paid shall constitute such Lender’s Committed Loan included in the relevant
Committed Borrowing or funded participation in the relevant Swing Line Loan, as the
case may be. A certificate of the Swing Line Lender submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under this
clause (iii) shall be conclusive absent manifest error.

     (iv) Each Lender’s obligation to make Committed Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section 2.04(c)
shall be absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the Swing Line Lender, the Borrower or any other Person
for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C)
any other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender’s obligation to make

8

 

Committed Loans pursuant to this Section 2.04(c) is subject to the
conditions set forth in Section 4.02. No such funding of risk
participations shall relieve or otherwise impair the obligation of the Borrower to
repay Swing Line Loans, together with interest as provided herein.

     (d) Repayment of Participations.

     (i) At any time after any Lender has purchased and funded a risk participation
in a Swing Line Loan, if the Swing Line Lender receives any payment on account of
such Swing Line Loan, the Swing Line Lender will distribute to such Lender its
Applicable Percentage thereof in the same funds as those received by the Swing Line
Lender.

     (ii) If any payment received by the Swing Line Lender in respect of principal
or interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the Swing Line Lender in its discretion),
each Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on
demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned, at a rate per annum equal to the Federal
Funds Rate. The Administrative Agent will make such demand upon the request of the
Swing Line Lender. The obligations of the Lenders under this clause shall survive
the payment in full of the Obligations and the termination of this Agreement.

     (e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each
Lender funds its Base Rate Committed Loan or risk participation pursuant to this Section
2.04 to refinance such Lender’s Applicable Percentage of any Swing Line Loan, interest
in respect of such Applicable Percentage shall be solely for the account of the Swing Line
Lender.

     (f) Payments Directly to Swing Line Lender. The Borrower shall make all
payments of principal and interest in respect of the Swing Line Loans directly to the Swing
Line Lender.

     § 2.6. Prepayments. Section 2.05 of the Original Agreement is hereby amended as
follows:

     The reference to “Loans” and two references to “Base Rate Loans” in the first sentence
of Section 2.05(a) shall refer instead to “Committed Loans” and to “Base Rate Committed
Loans” respectively, and the references to “Loans” in the second sentence and last sentence
of Section 2.05(a) shall refer instead to “Committed Loans”.

     Section 2.05(b) shall read as follows:

     (b) The Borrower may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans
in whole or in part without premium or penalty; provided that (i) such notice

9

 

must be received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum
principal amount of $500,000. Each such notice shall specify the date and amount of such
prepayment. If such notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and payable on the
date specified therein.

     Original Sections 2.05(b), (c) and (d) of the Original Agreement are redesignated
Sections 2.05(c), (d) and (e), respectively.

     The reference to “Section 2.05(b)” in original Section 2.05(b) shall refer instead to
“Section 2.05(c)”; the reference to “Section 2.05(d)” in original Section 2.05(c) shall
refer instead to “Section 2.05(e)”; and the reference to Section 2.05(c) in original Section
2.05(d) shall refer instead to “Section 2.05(d).

     § 2.7. Termination or Reduction of Commitments. The reference to “the Letter of
Credit Sublimit” in clause (iv) of Section 2.06 of the Original Agreement is hereby amended to
refer instead to “the Letter of Credit Sublimit or the Swing Line Sublimit”.

     § 2.8. Repayment of Loans. Section 2.07 of the Original Agreement is hereby amended
in its entirety to read as follows:

     2.07 Repayment of Loans.

     (a) The Borrower shall repay to the Lenders on the Maturity Date the aggregate
principal amount of Committed Loans outstanding on such date.

     (b) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the
date ten Business Days after such Loan is made and (ii) the Maturity Date.

     § 2.9. Interest. The reference to “Base Rate Loan” in Section 2.08(a)(ii) of the
Original Agreement is hereby amended to refer instead to “Base Rate Committed Loan” and such
Section 2.08(a)(ii) is further amended by deleting “and” immediately prior to clause (ii) thereof
and adding the following at the end thereof: “; and (iii) each Swing Line Loan shall bear interest
on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate plus the Applicable Rate.”

     § 2.10. Fees. The reference to “Outstanding Amount of Loans” in clause (i) of Section
2.09(a) of the Original Agreement is hereby amended to refer instead to “Outstanding Amount of
Committed Loans”.

     § 2.11. Payments Generally. All references to “Borrowing” and “Loan” in Section
2.12(b)(i) and Section 2.12(d) of the Original Agreement are hereby amended to refer instead to
“Committed Borrowing” and “Committed Loan” respectively, and the reference to “participations in
Letters of Credit” in the first sentence of Section 2.12(d) of the Original Agreement is hereby
amended to refer instead to “participations in Letters of Credit and Swing Line Loans”.

     § 2.12. Sharing of Payments by Lenders. Section 2.13 of the Original Agreement is
hereby amended as follows:

10

 

     All references to “Loans” shall refer instead to “Committed Loans”.

     The reference to “participations in L/C Obligations” in the first sentence shall refer
instead to “participations in L/C Obligations or in Swing Line Loans”.

     The first reference to “subparticipations in L/C Obligations” in clause (b) shall refer
instead to “subparticipations in L/C Obligations and Swing Line Loans”, and the reference in
subclause (ii) of such clause (b) shall refer to “subparticipations in L/C Obligations or
Swing Line Loans”.

     § 2.13. Increase in Commitments. The reference to “and the L/C Issuer” in the second
sentence of Section 2.14(c) of the Original Agreement is hereby amended to refer instead to “, the
L/C Issuer and the Swing Line Lender”, and the references to “Loans” in the last sentence of
Section 2.14(e) of the Original Agreement is hereby amended to refer instead to “Committed Loans”.

     § 2.14. Illegality. The reference to “Base Rate Loans” in the first sentence of
Section 3.02 of the Original Agreement is hereby amended to refer instead to “Base Rate Committed
Loans”.

     § 2.15. Inability to Determine Rates. The reference to “Borrowing” in the last
sentence of Section 3.03 of the Original Agreement is hereby amended to refer instead to “Committed
Borrowing”.

     § 2.16. Conditions to All Credit Extensions. All references to “Loan Notice” and
“Loans” in Section 4.02 of the Original Agreement shall refer instead to “Committed Loan Notice”
and “Committed Loans” respectively, and the reference to “the L/C Issuer” in Section 4.02(e) of the
Original Agreement is hereby amended to refer instead to “the L/C Issuer or the Swing Line Lender”.

     § 2.17. Liens. Sections 7.01(j), (k) and (l) of the Original Agreement are hereby
redesignated as Section 7.01(k), (l) and (m) respectively, and a new section 7.01(j) is hereby
added immediately following Section 7.01(i), to read as follows:

     (j) (A) Liens on Cantera Gas Holdings’ Equity Interests in Fort Union (and on interest,
dividends or distributions in respect thereof) securing Indebtedness of Fort Union, and (B)
subordinate Liens on Cantera Gas Holdings’ Equity Interests in each of Bighorn and Fort
Union (and on interest, dividends or distributions in respect thereof) under the CMS
Subordinated Security Agreement securing the subordinate Indebtedness under the CMS
Subordinated Note; provided, that pursuant to the terms set forth in the CMS
Subordinated Security Agreement, such subordinate Liens shall at all times be subordinate to
any and all Liens thereon securing the Obligations.

     § 2.18. Investments. Section 7.02(f) of the Original Agreement is hereby amended to
in its entirety to read as follows:

     (f) Investments in Unrestricted Subsidiaries, Bighorn and Fort Union (net of any
distributions received by the Borrower and Restricted Subsidiaries with respect to such
Investments), provided that (i) the aggregate amount of all such Investments made

11

 

after the First Amendment Effective Date shall not at any time exceed $35,000,000, and
(ii) after giving effect to any such Investment, the Borrower has at least $10,000,000 in
unused availability under the Commitments;

     § 2.19. Indebtedness. The reference to “Section 2.05(d) in Section 7.03(e) of the
Original Agreement is hereby amended to refer instead to “Section 2.05(e)”, the “and” at the end of
Section 7.03(i) of the Original Agreement is hereby deleted, Section 7.03(j) is hereby redesignated
as Section 7.03(l), and new Sections 7.03(j) and (k) are hereby added immediately following Section
7.03(i), to read as follows:

     (j) subordinate Indebtedness under the CMS Subordinated Note; provided, the
Obligations shall at all times constitute “Senior Indebtedness” thereunder, and such
Indebtedness under the CMS Subordinated Note shall be subordinate to the Obligations
pursuant to the terms set forth therein;

     (k) for the avoidance of doubt, the Amended and Restated Sponsor Guarantee, dated as of
April 30, 2007, made by Cantera in favor of Bank of America, N.A., as administrative agent
for the lenders under that certain Amended and Restated Credit Agreement of even date
therewith among Fort Union, such administrative agent and such lenders, as amended,
guaranteeing the performance by Cantera of its obligations under a gas gathering agreement
with Fort Union specified therein; and

     § 2.20. Consolidated Interest Coverage Ratio. Section 7.20(a) of the Original
Agreement is hereby amended in its entirety to read as follows:

     (a) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less than 2.50 to
1.00.

     § 2.21. Bighorn. Article VII of the Original Agreement is hereby amended by adding a
new Section 7.21 at the end thereof, to read as follows:

     7.21 Bighorn. Support, consent to, approve or vote its Equity Interests in Bighorn in
favor of, or otherwise cause any of the following:

     (a) the creation, incurrence or assumption by Bighorn of any Indebtedness, other than
Indebtedness in respect of capital leases and purchase money obligations of Bighorn (and
within the limitations set forth in Section 7.01(i)(ii)); provided that the
aggregate amount of all such Indebtedness at any one time outstanding shall not exceed
$2,500,000;

     (b) the creation, incurrence or assumption by Bighorn of any Liens upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other than Liens of
the type described in Section 7.01(c), (d), (e), (f), (g), (i) (solely with respect to
capital leases and purchase money obligations permitted pursuant to Section 7.21(a) above
and within the limitations set forth in Section 7.01(i)(i)), (j), (k) or (l); or

12

 

     (c) the entrance by Bighorn into any Contractual Obligation that limits the ability of
Bighorn to make Restricted Payments to Cantera and its other members, or to otherwise
transfer property of Bighorn to Cantera and such other members;

in each case except as would, in the reasonable judgment of Borrower, constitute a violation
of (i) applicable Laws; (ii) Cantera Gas Holdings’ obligations under the Limited Liability
Company Agreement of Bighorn, as amended through the First Amendment Effective Date; or
(iii) any fiduciary duty owed by Cantera Gas Holdings to Bighorn or its members.

     § 2.22. Events of Default. Section 8.01(k) of the Original Agreement is hereby
amended by replacing the “.” at the end thereof with “; or” and adding a new Section 8.01(l)
following thereafter, to read as follows:

     (l) (1) either Bighorn or Fort Union shall for any reason be unable to make dividends
or other distributions with respect to the Equity Interest of the Borrower or any Guarantor
therein, whether due to any Law, Governmental Authority, Contractual Obligation,
Organizational Document or other restriction or prohibition applicable thereto or otherwise,
and (2) Borrower shall, within thirty (30) days thereafter (or, within five (5) days
thereafter, if such inability results from Bighorn or Fort Union instituting or consenting
to the institution of any proceeding under any Debtor Relief Law or makes an assignment for
the benefit of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for
all or any material part of its property), fail to deliver to Administrative Agent and
Required Lenders a certificate from a Responsible Officer of the Borrower attaching pro
forma financial statements in form and substance satisfactory to Administrative Agent and
Required Lenders, showing the financial covenants contained in Section 7.20 are
satisfied on a pro forma basis as of the date of the most recent Compliance Certificate
delivered pursuant to Section 6.02(b) hereof, after giving effect to such inability to make
dividends or other distributions.

     § 2.23. Resignation of Administrative Agent. The first three references to “L/C
Issuer” in the second paragraph of Section 9.06 of the Original Agreement are hereby amended to
refer instead to “L/C Issuer and Swing Line Lender”.

     § 2.24. Amendments, Etc.. Clauses (ii), (iii), (iv) and (v) of the proviso at the end
of Section 10.01 of the Original Agreement are hereby redesignated clauses (iii), (iv), (v) and
(vi), and a new clause (ii) is hereby added immediately following clause (i) thereof, to read as
follows:

(ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line
Lender in addition to the Lenders required above, affect the rights or duties of the Swing
Line Lender under this Agreement;

     § 2.25. Notices. The reference to “or the L/C Issuer” in Section 10.02(a)(i) of the
Original Agreement is hereby amended to refer instead to “the L/C Issuer or the Swing Line Lender”;
the references to “and the L/C Issuer” in Section 10.02(d) of the Original Agreement are hereby
amended to refer instead to “, the L/C Issuer and the Swing Line Lender”; and the reference to
“Loan Notices” in the parenthetical in the first sentence of Section 10.02(e) of the

13

 

Original Agreement is hereby amended to refer instead to “Committed Loan Notices and Swing
Line Notices”.

     § 2.26. Expenses; Indemnity; Damage Waiver. The reference to “and the L/C Issuer” in
Section 10.04(f) of the Original Agreement is hereby amended to refer instead to “, the L/C Issuer
and the Swing Line Lender”.

     § 2.27. Successors and Assigns. Section 10.06 of the Original Agreement is hereby
amended as follows:

     The reference to “participations in L/C Obligations” in Section 10.06(b) shall refer
instead to “participations in L/C Obligations and in Swing Line Loans”.

     The following is added at the end of Section 10.06(b)(ii): “, except that this clause
(ii) shall not apply to the Swing Line Lender’s rights and obligations in respect of Swing
Line Loans”.

     The reference to “the L/C Issuer” in Section 10.06(b)(iii) shall refer instead to “the
L/C Issuer and the Swing Line Lender”.

     The reference to “participations in L/C Obligations” in the third parenthetical in the
first sentence of Section 10.06(d) shall refer instead to “participations in L/C Obligations
and/or Swing Line Loans”.

     The references to “Loan” in Section 10.06(h) shall refer instead to “Committed Loan”.

     The reference to “upon 30 days’ notice to the Borrower and the Lenders, resign as L/C
Issuer” in the first sentence of Section 10.06(i) shall refer instead to “(i) upon 30 days’
notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’
notice to the Borrower, resign as Swing Line Lender”.

     The references to “L/C Issuer” in the second sentence of Section 10.06(i) shall refer
instead to “L/C Issuer or Swing Line Lender” and the references to “Base Rate Loans” shall
refer instead to “Base Rate Committed Loans”.

     The following new sentence is added immediately following the second sentence of
Section 10.06(i): “If Bank of America resigns as Swing Line Lender, it shall retain all the
rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including the right to
require the Lenders to make Base Rate Committed Loans or fund risk participations in
outstanding Swing Line Loans pursuant to Section 2.04(c).”

     The first reference to “L/C Issuer” in the last sentence of Section 10.06(i) shall
refer instead to “L/C Issuer and/or Swing Line Lender”.

     The reference to “retiring L/C Issuer” in Section 10.06(i)(a) shall refer instead to
“retiring L/C Issuer or Swing Line Lender, as the case may be”.

14

 

     § 2.28. Schedules. Schedules 2.01, 5.13, 7.01, 7.03 7.11 and 10.02 to the Original
Agreement are hereby amended in their entirety to read as set forth on such Schedules attached
hereto.

     § 2.29. Exhibits. Exhibits A and B to the Original Agreement are hereby amended in
their entirety to read as set forth on Exhibits A and B attached hereto.

     § 2.30. New Lenders. Upon its execution and as of the First Amendment Effective Date,
each New Lender shall be a party to the Credit Agreement and shall have the rights and obligations
of a Lender thereunder.

     § 2.31. Reallocation of Existing Commitments, Committed Loans and L/C Obligations. In
connection herewith, contemporaneously with the effectiveness hereof, Lenders hereby acknowledge
and agree that they shall sell, assign, transfer and convey to other Lenders, and/or purchase and
accept from other Lenders, a portion of the outstanding aggregate Commitments, Committed Loans and
L/C Obligations immediately prior to the effectiveness hereof (and if any such sale, assignment,
transfer or conveyance includes the assignment of any Eurodollar Rate Loan on a day other than the
last day of the Interest Period therefor, Borrower agrees that it shall pay any amounts requested
by an affected Lender pursuant to Section 3.05 of the Credit Agreement), such that (i) each
Lender’s Commitment shall equal the Commitment amount set forth opposite such Lender’s name on
Schedule 2.01 attached hereto, and (ii) the Outstanding Amount of each Lender’s Committed
Loans and L/C Obligations shall equal such Lender’s Applicable Percentage (as set forth in
Schedule 2.01 attached hereto) of the Total Outstandings. Borrower, Administrative Agent
and each Lender a party hereto hereby (x) consents to all reallocations and assignments of the
Commitments, Committed Loans and L/C Obligations effected pursuant to the foregoing, (y)
acknowledges and agrees that such reallocations and assignments shall be deemed effective as if
such reallocations and assignments were evidenced by Assignments and Assumptions among Lenders
delivered pursuant to Section 10.06(b) of the Credit Agreement, and (z) agrees that
Lenders shall make full cash settlement of such reallocations and assignments through the
Administrative Agent, as the Administrative Agent may direct or approve, such that after giving
effect to such settlement, each Lender’s Commitment and Outstanding Amount of Committed Loans and
L/C Obligations shall be as set forth above.

     § 2.32. Consolidated EBITDA Pro Forma Adjustment — Restated WIC Agreements. Cantera
Gas Holdings is a party to that certain Firm Transportation Service Agreement Rate Schedule FT
dated September 1, 1999, amended and restated as of April 1, 2007, between Cantera Gas Holdings and
Wyoming Interstate Company, Ltd. and that certain Firm Transportation Service Agreement Rate
Schedule FT dated December 1, 2001, amended and restated as of April 1, 2007, between Cantera Gas
Holdings and Wyoming Interstate Company, Ltd. (collectively, the “WIC Agreements”).
Required Lenders hereby agree that for the four-fiscal quarter periods ending September 30, 2007
and December 31, 2007, Consolidated EBITDA shall be calculated, in a manner satisfactory to the
Administrative Agent in its reasonable discretion, after giving pro forma effect to the WIC
Agreements as restated, as if such WIC Agreements were restated and effective on the first day of
each such period.

     § 2.33. Designation of Unrestricted Subsidiary. Borrower hereby designates DBGG, LLC
as an Unrestricted Subsidiary and hereby represents and warrants that (i) prior, and after giving
effect, to such designation, no Default exists and (ii) such designation is deemed to be an

15

 

Investment in an Unrestricted Subsidiary in an amount equal to the fair market value as of the
date of such designation of the Borrower’s direct and indirect ownership interest in such
Subsidiary and such Investment is permitted to be made as of the date hereof under Section 7.02(f)
of the Credit Agreement.

     § 2.34. Contingent Payments under CMS Subordinated Note. Required Lenders hereby
consent to the making by Cantera Gas Holdings of the contingent payments due under the CMS
Subordinated Note on the “2008 Payment Date” and “2009 Payment Date” (as defined therein) in the
first fiscal quarter of each of 2008 and 2009, and agree that such payments shall be deemed to be
repayments of Indebtedness (as opposed to an expense or charge against income for the period when
made); provided, the amounts of each such contingent payment shall be calculated and paid
as set forth in the CMS Subordinated Note as in effect on the date hereof, estimated as of the date
hereof to be approximately $16,000,000 in the aggregate.

     § 2.35. Investment in Bighorn and Fort Union. Required Lenders hereby consent to
Cantera’s initial Investments in Bighorn and Fort Union as of the First Amendment Effective Date in
connection with the consummation of the Cantera Acquisition.

ARTICLE III. — Conditions of Effectiveness

     § 3.1. Effective Date. This Amendment shall become effective as of the first date all
the conditions precedent in this Section 3.1 are satisfied or waived in accordance with Section
10.01 of the Credit Agreement (the “First Amendment Effective Date”)

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

     (i) executed counterparts of this Amendment and the attached Consent of
Guarantors, sufficient in number for distribution to the Administrative Agent, each
Lender and the Borrower;

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

     (iii) a Guaranty Supplement and a Pledge Agreement Supplement, executed by
Cantera and its Subsidiaries, including Cantera Gas Holdings, pledging, among other
things, its ownership interests in Bighorn, and amendments to the Security
Documents, each in form and substance satisfactory to the Administrative Agent;

     (iv) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity of
each Responsible Officer thereof authorized to act as a Responsible

16

 

Officer in connection with this Amendment and the other Loan Documents to which
such Loan Party is a party;

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

     (vi) favorable opinions of Vinson & Elkins LLP, counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, in form and substance
substantially as set forth in the opinions delivered in connection with the Closing
Date, and with respect to such other matters concerning the Loan Parties and the
Loan Documents as the Required Lenders may reasonably request, including without
limitation the authorization, execution, delivery and enforceability of the Cantera
Acquisition Agreement, and favorable opinions of Dubberstein Heinen & Morris PC,
special Oklahoma counsel to the Administrative Agent, addressed to the
Administrative Agent and each Lender;

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

     (viii) Cantera’s audited annual financial statements as of December 31, 2006,
Cantera’s unaudited quarterly financial statements as of June 30, 2007, and the pro
forma consolidated balance sheet of the Borrower and the Restricted Subsidiaries as
of June 30, 2007 after giving effect to the Cantera Acquisition, the Cantera Equity
Offering, this Amendment and the Credit Extension to be made on the First Amendment
Effective Date;

     (ix) a certificate signed by a Responsible Officer of the Borrower certifying
that (A) the conditions specified in this Section 3.1 and Section 4.02(b) of the
Credit Agreement have been satisfied; (B) there has been no event or circumstance
since December 31, 2006 that has had or could be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect; (C) after giving effect
to the Credit Extension requested on the First Amendment Effective Date, the
Aggregate Commitments will exceed the Total Outstandings by an amount of at least
equal to $70,000,000; and (D) contemporaneously with the making of such Credit
Extension, the Borrower is receiving gross proceeds of at least $250,000,000 from
the Cantera Equity Offering;

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

17

 

     (xi) documents, in form and substance reasonably satisfactory to Administrative
Agent, confirming the refinancing and termination of the Cantera Credit Facility and
termination of any and all Liens securing the Cantera Credit Facility;

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

     (xiii) a certificate from a Responsible Officer of the Borrower (A) attaching
forecasts, in form reasonably satisfactory to the Administrative Agent, of income
statements for the two-fiscal quarter period ending December 31, 2007 and for each
of the fiscal years ending December 31, 2008 through December 31, 2011, (B)
certifying that the consolidated pro forma balance sheet delivered pursuant to
Section 3.1(a)(viii) above and such forecasts were prepared in good faith on the
basis of assumptions that were fair in light of then existing conditions (subject to
the proviso that it is understood that such pro forma consolidated balance sheet and
forecasts are necessarily based upon professional opinions, estimates or projections
and that the Borrower does not warrant that such opinions, estimates or projections
will ultimately prove to have been accurate), (C) certifying that the pro forma
consolidated balance sheet of the Borrower and its Restricted Subsidiaries as at
June 30, 2007 fairly presents in all material respects the consolidated pro forma
financial condition of the Borrower and its Restricted Subsidiaries (after giving
effect to the Cantera Acquisition and Borrower’s acquisition of Cimmarron Gathering,
LP on May 1, 2007 (the “Cimmarron Acquisition”)) as at such date, and (D)
certifying (prior to giving effect to the Cantera Acquisition and the Cimmarron
Acquisition) as to matters that would be required by Section 302 of Sarbanes-Oxley;

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

     (xvi) a certificate from a Responsible Officer of the Borrower certifying that
no default or event of default has occurred and is continuing under that certain
Indenture dated as of February 7, 2006 among Borrower, Copano Energy Finance
Corporation, the guarantors named therein, and U.S. Bank National Association, as
Trustee, no default or event of default shall occur as a result of this Amendment or
the consummation of the Cantera Acquisition, and

18

 

     (xvii) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent, the L/C Issuer, or the Required Lenders reasonably may
require.

     (b) The Cantera Acquisition shall have been contemporaneously completed pursuant to the
terms of the Cantera Acquisition Documents, including without limitation the issuance of
$112,500,000 of Borrower’s Class D Units on the terms and conditions set forth therein, and
as a result thereof, Copano Energy/Rocky Mountains, L.L.C. shall have directly or indirectly
acquired good title to all of the Equity Interests contemplated to be transferred by the
Cantera Acquisition Documents, free and clear of all liens except Liens permitted under
Section 7.01.

     (c) The Cantera Equity Offering shall have been contemporaneously consummated upon the
terms and conditions set forth in the Cantera Equity Offering documents.

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

Without limiting the generality of the provisions of Section 9.04 of the Credit Agreement,
for purposes of determining compliance with the conditions specified in this Section 3.1,
each Lender that has signed this Amendment shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the First Amendment Effective Date specifying its
objection thereto.

ARTICLE IV. — Representations and Warranties

     § 4.1. Representations and Warranties of Borrower. In order to induce Administrative
Agent and Lenders to enter into this Amendment, Borrower represents and warrants to Administrative
Agent and each Lender that:

     (a) Immediately prior to and after giving effect to the Cantera Acquisition, the
representations and warranties of the Borrower and each other Loan Party contained in Article
V of the Credit Agreement or any other Loan Document are true and correct in all material
respects on and as of the First Amendment Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this Section 4.1(a), the
representations and warranties contained in subsections (a) and (b) of Section 5.05 of the
Credit Agreement are deemed to refer to the most recent statements furnished pursuant to clauses
(a) and (b), respectively, of Section 6.01 of the Credit Agreement.

     (b) No Default exists or will result herefrom.

     (c) No Material Adverse Effect has occurred, and no event or circumstance has occurred that
could reasonably be expected to cause a Material Adverse Effect, relating to the consolidated
financial condition or business of the Loan Parties since the date of the date of the

19

 

most recent financial statements delivered pursuant to Section 4.01(a)(viii) or
Section 6.01 of the Credit Agreement, as applicable.

     (d) Each Loan Party is Solvent.

     (e) The execution, delivery and performance by each Loan Party of this Amendment and the
Cantera Acquisition Documents has been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, or require any payment to be made under (i) any material Contractual
Obligation to which such Person is a party or affecting such Person or the properties of such
Person or any of its Restricted Subsidiaries or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its property is subject; or
(c) violate any Law.

     (f) Except as obtained prior to the date hereof, no approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any Governmental Authority or any
other Person is necessary or required in connection with the execution, delivery or performance by,
or enforcement against, any Loan Party of this Amendment or the Cantera Acquisition Documents.
There are no actions, suits, investigations, proceedings, claims or disputes pending or, to the
knowledge of the Borrower after due and diligent investigation, threatened or contemplated, at law,
in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any
of its Restricted Subsidiaries or against any of their properties or revenues that purport to
affect or pertain to the Cantera Acquisition or any Cantera Acquisition Document.

     (g) This Amendment has been duly executed and delivered by each Loan Party that is party
hereto. This Amendment constitutes a legal, valid and binding obligation of such Loan Party,
enforceable against each Loan Party that is party hereto in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting creditors’
rights generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at Law.

     (h) On the First Amendment Effective Date, each of the representations and warranties made by
any party in the Cantera Acquisition Documents is true and correct in all material respects, other
than with respect to those matters of which a Responsible Officer has obtained knowledge thereof
following August 31, 2007, which the Borrower reasonably believes do not result in an aggregate
diminution in value of the assets and properties acquired pursuant to the Cantera Acquisition; and
none of such parties has failed to perform any material obligation or covenant required by the
Cantera Acquisition Documents to be performed or complied with by it on or before the First
Amendment Effective Date. Simultaneously with the making of the Loans on the First Amendment
Effective Date, the Cantera Acquisition will have been consummated in compliance with the material
terms and conditions of the Cantera Acquisition Documents and all conditions precedent to such
consummation will be fully satisfied or waived.

ARTICLE V. — Miscellaneous

     § 5.1. Ratification of Agreements. The Original Agreement, as hereby amended, is
hereby ratified and confirmed in all respects. The Loan Documents, as they may be amended or

20

 

affected by this Amendment, are hereby ratified and confirmed in all respects by Borrower and
each Loan Party that is party hereto. Any reference to the Credit Agreement in any Loan Document
shall be deemed to refer to this Amendment also. The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of Administrative Agent or any Lender under the Credit Agreement or any other Loan
Document nor constitute a waiver of any provision of the Credit Agreement or any other Loan
Document.

     § 5.2. Ratification of Security Documents. Each Loan Party, Administrative Agent, and
Lenders each acknowledge and agree that any and all indebtedness, liabilities or obligations,
arising under or in connection with the Loans, Letters of Credit or the Notes, are Obligations and
are secured indebtedness under, are guarantied by, and are secured by, each and every Security
Document. Each Loan Party hereby re-pledges, re-grants and re-assigns a security interest in and
lien on every asset of such Loan Party described as Collateral in any Security Document.

     § 5.3. Survival of Agreements. All representations, warranties, covenants and
agreements of Loan Parties shall survive the execution and delivery of this Amendment and the
performance hereof, including without limitation the making or granting of each Loan, and shall
further survive until all of the Obligations under the Credit Agreement are paid in full. All
statements and agreements contained in any certificate or instrument delivered by any Loan Party
hereunder or under the Credit Agreement to Administrative Agent or any Lender shall be deemed to
constitute representations and warranties by, or agreements and covenants of, Borrower under this
Amendment and under the Credit Agreement.

     § 5.4. Loan Documents. This Amendment is a Loan Document, and all provisions in the
Credit Agreement pertaining to Loan Documents apply hereto.

     § 5.5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     § 5.6. Counterparts. This Amendment may be separately executed in counterparts and by
the different parties hereto in separate counterparts, each of which when so executed shall be
deemed to constitute one and the same Amendment. Delivery of an executed signature page by
facsimile transmission shall be effective as delivery of a manual executed counterpart.

[Remainder of Page Intentionally Left Blank, Signature Pages Follow]

21

 

     IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

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

 	 
	 	By:  	/s/ Matthew J. Assiff
 	 
	 	 	Name:  	Matthew J. Assiff 	 
	 	 	Title:  	Senior Vice President and

Chief Financial Officer 	 

S-1

 

	 	 	 	 	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,
as Administrative Agent

 	 
	 	By:  	
 /s/ Authorized Signatory	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-2

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,
as a Lender, L/C Issuer and Swing Line Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-3

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,
as a Co-Syndication Agent and a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-4

 

	 	 	 	 	 
	 	WACHOVIA BANK, N.A.,
as a Co-Syndication Agent and a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-5

 

	 	 	 	 	 
	 	FORTIS CAPITAL CORP.,
as a Co-Documentation Agent and a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-6

 

	 	 	 	 	 
	 	MERRILL LYNCH CAPITAL,

A division of Merrill Lynch Business Financial

Services, Inc., as a Co-Documentation Agent

and a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-7

 

	 	 	 	 	 
	 	COMPASS BANK, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-8

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,
 as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-9

 

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-10

 

	 	 	 	 	 
	 	SUNTRUST BANK, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-11

 

	 	 	 	 	 
	 	COMERICA BANK, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-12

 

	 	 	 	 	 
	 	ROYAL BANK OF CANADA, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-13

 

	 	 	 	 	 
	 	BANK OF SCOTLAND, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-14

 

	 	 	 	 	 
	 	NATIXIS, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-15

 

	 	 	 	 	 
	 	UNION BANK OF CALIFORNIA, N.A.,
 as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-16

 

	 	 	 	 	 
	 	BANK OF TEXAS, N.A., as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-17

 

	 	 	 	 	 
	 	STERLING BANK, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-18

 

	 	 	 	 	 
	 	MORGAN STANLEY BANK, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-19

 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-20

 

	 	 	 	 	 
	 	KEYBANK, NATIONAL ASSOCIATION,
 as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-21

 

	 	 	 	 	 
	 	GUARANTY BANK, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-22

 

	 	 	 	 	 
	 	AMEGY BANK NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-23

 

	 	 	 	 	 
	 	BAYERISCHES HYPO-UND VEREINSBANK AG,
 NEW YORK BRANCH, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-24

 

	 	 	 	 	 
	 	CREDIT SUISSE, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-25

 

	 	 	 	 	 
	 	CITIBANK, N.A., as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-26

 

	 	 	 	 	 
	 	TRUSTMARK NATIONAL BANK, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-27

 

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-28

 

	 	 	 	 	 
	 	CALYON NEW YORK BRANCH, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-29

 

	 	 	 	 	 
	 	REGIONS BANK, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-30

 

	 	 	 	 	 
	 	SUMITOMO MITSUI BANKING CORPORATION, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-31

 

	 	 	 	 	 
	 	MIZUHO CORPORATE BANK, LTD.,
 as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-32

 

	 	 	 	 	 
	 	BARCLAYS BANK PLC, as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-33

 

	 	 	 	 	 
	 	GOLDMAN SACHS CREDIT PARTNERS L.P.,
 as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-34

 

EXHIBIT A

FORM OF COMMITTED LOAN NOTICE

Date:                     ,           

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that certain Amended and Restated Credit Agreement, dated as of January
12, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time
to time, the “Agreement;” the terms defined therein being used herein as therein defined),
among Copano Energy, L.L.C., a Delaware limited liability company (the “Borrower”), the
Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent and L/C
Issuer.

     The undersigned hereby requests (select one):

     o A Borrowing of Loans                      o A conversion or continuation of Loans

     On                      (a Business Day).

     In the amount of $                    .

     Comprised of                     

                    [Type of Loan requested]

     For Eurodollar Rate Loans: with an Interest Period of            months.

     The Borrowing, if any, requested herein complies with the provisos to the first sentence of
Section 2.01 of the Agreement.

	 	 	 	 	 
	 	COPANO ENERGY, L.L.C.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

EXHIBIT B

FORM OF SWING LINE NOTICE

Date:                     ,
          

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that certain Amended and Restated Credit Agreement, dated as of January
12, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time
to time, the “Agreement;” the terms defined therein being used herein as therein defined),
among Copano Energy, L.L.C., a Delaware limited liability company (the “Borrower”), the
Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C
Issuer and Swing Line Lender.

     The undersigned hereby requests a Swing Line Loan:

     1.   On                     
                     (a Business Day).

     2.   In the amount of $                    .

     The Swing Line Borrowing requested herein complies with the requirements of the provisos to
the first sentence of Section 2.04(a) of the Agreement.

	 	 	 	 	 
	 	COPANO ENERGY, L.L.C.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

CONSENT OF GUARANTORS

     Each of the undersigned Guarantors hereby consents to the provisions of this Amendment and the
transactions contemplated herein and therein and hereby (i) ratifies, confirms and approves the
Credit Agreement, the Amendment, the Guaranty and the other Loan Documents and, in particular, any
provisions thereof which relate to such Guarantor, (ii) acknowledges and agrees that any and all
indebtedness, liabilities or obligations arising under or in connection with the Credit Agreement
and the Notes are Obligations and are guarantied indebtedness under the Guaranty and are secured
indebtedness under, and are secured by each and every Security Document, (iii) ratifies and
confirms the Guaranty and each Security Document to which it is a party, (iv) expressly
acknowledges and agrees that such Guarantor guarantees all Obligations arising under or in
connection with the Credit Agreement and the Notes pursuant to the terms of the Guaranty, and
hereby re-pledges, re-grants and re-assigns a security interest in and lien on every asset of such
Guarantor described as Collateral in any Security Document to secure all such Obligations, and (v)
agrees that its obligations and covenants under the Guaranty and each Security Document to which it
is a party are unimpaired hereby and shall remain in full force and effect.

	 	 	 	 	 
	 	ScissorTail Energy, LLC 

Copano Energy/Mid-Continent, L.L.C. (f/k/a Copano

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

Copano Processing GP, L.L.C.

Copano NGL Services GP, L.L.C.

Copano Field Services GP, L.L.C.

Copano Pipelines GP, L.L.C.

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

Copano Energy Services GP, L.L.C.

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

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

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

CPNO Services GP, L.L.C.

Copano Energy Finance Corporation

 	 
	 	By:  	
 	 
	 	 	Matthew J. Assiff 	 
	 	 	Senior Vice President and Chief Financial Officer 
	 

	 	 	 	 	 
	 	Copano Processing, L.P.
 By:   Copano Processing GP, L.L.C., General Partner

 
	 	By:  	 	 
	 	 	Matthew J. Assiff 	 
	 	 	Senior Vice President and Chief Financial Officer 
	 

	 	 	 	 	 
	 	Copano NGL Services, L.P.
 By:   Copano NGL Services GP, L.L.C., General Partner

 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 
	 	 	 	 
	 

1

 

	 	 	 	 	 
	 	Copano Houston Central, L.L.C.

CHC LP Holdings, L.L.C.

Copano Pipelines Group, L.L.C.

Copano General Partners, Inc.

CPG LP Holdings, L.L.C.

CWDPL LP Holdings, L.L.C.

CPNO Services LP Holdings, L.L.C.

 	 
	 	By:  	
 	 
	 	 	Susan T. Dubb
                                           Vice President and Assistant Secretary 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Copano Field Services/Agua Dulce, L.P.

Copano Field Services/Copano Bay, L.P.

Copano Field Services/Karnes, L.P.

Copano Field Services/Live Oak, L.P.

Copano Field Services/South Texas, L.P.

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

By:   Copano Field Services GP L.L.C., General Partner

 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 
	 	 	 	 
	 

	 	 	 	 	 
	 	Copano Pipelines/Hebbronville, L.P.

Copano Pipelines/South Texas, L.P.

Copano Pipelines/Upper Gulf Coast, L.P.

By:    Copano Pipelines GP, L.L.C., General Partner

 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 
	 	 	 	 
	 

	 	 	 	 	 
	 	Copano Pipelines/Texas Gulf Coast, L.P.
 By:    Copano Pipelines, (Texas) GP, L.L.C., General Partner

 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 
	 	 	 	 
	 

	 	 	 	 	 
	 	Copano Field Services/Central Gulf
Coast, L.P.
 By:    Copano Field Services/Central
Gulf Coast GP, L.L.C.,
          General Partner

 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 
	 	 	 	 
	 

2

 

	 	 	 	 	 
	 	Copano Energy Services/Upper Gulf Coast, L.P.
 By:    Copano Energy Services GP, L.L.C.,
          General Partner

 	 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Copano Energy Services/Texas Gulf Coast, L.P.
 By:    Copano Energy Services (Texas) GP, L.L.C., 
          General Partner

 	 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Copano/Webb Duval Pipeline, L.P.
 By:    Copano/Webb-Duval Pipeline GP, L.L.C., 
          General Partner

 	 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	CPNO Services, L.P.

Copano Risk Management, L.P.

By:    CPNO Services GP, L.L.C., General Partner

 	 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Cimmarron Gathering, LP

By:    Copano/Red River Gathering GP, L.L.C., 
          its general partner

 	 
	 	By:  	
 	 
	 	 	Matthew J. Assiff 	 
	 	 	Senior Vice President and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	Copano/Red River Gathering GP, L.L.C.

 	 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Copano/Red River Gathering LP Holdings, L.L.C.

 	 
	 	By:  	
 	 
	 	 	Susan T. Dubb
                                           Vice President and Assistant Secretary 	 
	 	 	 	 
	 

3

 

	 	 	 	 	 
	 	CMW Energy Services, L.L.C.

Greenwood Gathering, L.L.C.

Copano Energy/Rocky Mountains, L.L.C.

Cantera Natural Gas, LLC

Cantera Gas Holdings LLC

Cantera Gas Company LLC

Cantera Field Services Holdings LLC

 	 
	 	By:  	
 	 
	 	 	Matthew J. Assiff
                                           Senior Vice President and Chief Financial Officer 	 
	 	 	 	 
	 

4exv4w3

 

Exhibit 4.3

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE “DEPOSITARY,” WHICH TERM INCLUDES ANY
SUCCESSOR DEPOSITARY FOR THE CERTIFICATES) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

THE NOTES ARE BEING ISSUED WITH “ORIGINAL ISSUE DISCOUNT” FOR PURPOSES OF SECTIONS 1273 AND 1275 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. A HOLDER OF NOTES MAY OBTAIN THE ISSUE PRICE,
AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY ON THE NOTES, DETERMINED BY
CAPITALSOURCE INC., BY REGISTERED OR CERTIFIED MAIL IN A POST OFFICE LETTER BOX OR SENT BY
TELECOPIER TRANSMISSION ADDRESSED AS FOLLOWS: TO CAPITALSOURCE INC., 4445 WILLARD AVENUE, 12TH
FLOOR, CHEVY CHASE, MARYLAND 20815, TELECOPIER NO.: 301-841-2307, ATTENTION: CHIEF FINANCIAL
OFFICER.

1

 

Exhibit
4.3

CAPITALSOURCE INC.

7.250% SENIOR SUBORDINATED CONVERTIBLE NOTE DUE 2037

	 	 	 
	CUSIP:

	 	14055X AG7
	ISIN:

	 	US14055XAG79

			
	No. 1

	 	$250,000,000

CapitalSource Inc., a corporation duly organized and validly existing under the laws of the State
of Delaware (herein called the “Company,” which term includes any successor corporation
under the Indenture referred to on the reverse hereof), for value received hereby promises to pay
to CEDE & CO. or its registered assigns, the principal sum set forth on Schedule I hereto on July
15, 2037 at the office or agency of the Company maintained for that purpose in accordance with the
terms of the Indenture, dated as of July 30, 2007 (the “Original Indenture”) and the First
Supplemental Indenture thereto, dated as of July 30, 2007 (the “First Supplemental
Indenture” and together with the Original Indenture, the “Indenture”), in such coin or
currency of the United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay interest, semiannually on January 15 and July 15 of
each year, commencing January 15, 2008, on said principal sum at said office or agency, in like
coin or currency, at the rate per annum of 7.250%. On January 15, 2008, the Company promises to
pay to the Person entitled thereto as it appears in the Note Register on the Regular Record Date,
which shall be January 1, 2008 (whether or not a Business Day), as provided in the Indenture,
interest accruing at 7.250% per annum from, and including, the date of this 7.250% Senior
Subordinated Convertible Note Due 2037 (“Note”). Except as otherwise provided in the
Indenture, the interest payable on the Note pursuant to the Indenture on any January 15 or July 15
will be paid to the Person entitled thereto as it appears in the Note Register on the Regular
Record Date, which shall be the January 1 or July 1 (whether or not a Business Day) next preceding
such January 15 or July 15, as provided in the Indenture; provided, that any such interest not
punctually paid or duly provided for shall be payable as provided in the Indenture. The Company
shall pay interest (i) on any Notes in certificated form by check mailed to the address of the
Person entitled thereto as it appears in the Note Register (or, upon written notice, by wire
transfer in immediately available funds, if such Person is entitled to interest on Notes with an
aggregate principal amount in excess of $2,000,000) or (ii) on any Global Note by wire transfer of
immediately available funds to the account of the Depositary or its nominee.

Reference is made to the further provisions of this Note set forth on the reverse hereof,
including, without limitation, provisions giving the holder of this Note the right to convert this
Note into Common Stock of the Company on the terms and subject to the limitations referred to on
the reverse hereof and as more fully specified in the Indenture. Such further provisions shall for
all purposes have the same effect as though fully set forth at this place.

This Note shall be deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with and governed by the laws of the State of New
York (including Section 5-1401 of the New York General Obligations Law or any successor to such
statute).

This Note shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been manually signed by the Trustee or a duly authorized
authenticating agent under the Indenture.

 

 

GUARANTEE

For value received, the undersigned hereby unconditionally guarantees to the holder of this Note
the payment of principal of, and Interest on this Note in the amounts and at the time when due and
Interest on the overdue principal and Interest, if any, of this Note, if lawful, and the payment of
all other obligations of the Company under the Indenture or the Notes, to the holder of this Note
and the Trustee, all in accordance with and subject to the terms and limitations of this Note and
the Indenture. This Guarantee will not become effective until the Trustee duly executes the
certificate of authentication on this Note.

	 	 	 	 	 
	 	CAPITALSOURCE FINANCE LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 2

 

	 	 	 	 	 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

	 	 	 	 	 
	 	CAPITALSOURCE INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

July 30, 2007

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

THIS IS ONE OF THE NOTES DESCRIBED IN THE WITHIN-NAMED INDENTURE.

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 3

 

	 	 	 	 	 

[REVERSE OF NOTE]

CAPITALSOURCE INC.

7.250% SENIOR SUBORDINATED CONVERTIBLE NOTE DUE 2037

This Note is one of a duly authorized issue of Notes of the Company, designated as its Senior
Subordinated Convertible Notes due 2037 (herein called the “Notes”), initially limited in
aggregate principal amount to $287,500,000, issued and to be issued under and pursuant to an
Indenture, dated as of July 30, 2007 (the “Original Indenture”) and the First Supplemental
Indenture thereto, dated as of July 30, 2007 (the “First Supplemental Indenture” and,
together with the Original Indenture, the “Indenture”), among the Company and CapitalSource
Finance LLC, as guarantor (herein called the “Guarantor”), and Wells Fargo Bank, N.A., as
trustee (herein called the “Trustee”), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company, the Guarantor and the
holders of the Notes.

In case an Event of Default shall have occurred and be continuing, the principal of and accrued
Interest on all Notes may be declared by either the Trustee or the holders of not less than 25% in
aggregate principal amount of the Notes then outstanding, and upon said declaration shall become
due and payable in the manner, with the effect and subject to the conditions provided in the
Indenture.

The Indenture contains provisions permitting the Company and the Trustee, with the consent of the
holders of at least a majority in aggregate principal amount of the Notes at the time outstanding,
to execute supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in
any manner the rights of the holders of the Notes; provided, that no such supplemental indenture
shall (A) extend the Stated Maturity of any Note, or (B) reduce the rate or extend the time for
payment of Interest thereon, or (C) reduce the principal amount thereof, or (D) reduce any amount
payable on redemption or repurchase thereof, or (E) impair the right of any holder to institute
suit for the payment thereof, or (F) make the principal thereof or Interest thereon payable in any
coin or currency other than that provided in the Notes, or (G) affect the obligation of the Company
to redeem any Note on a Redemption Date in a manner adverse to the holders of Notes, or (H) affect
the obligation of the Company to repurchase any Note upon the happening of a Fundamental Change in
a manner adverse to the holders of Notes, or (I) affect the obligation of the Company to repurchase
any Note on a Company Repurchase Date in a manner adverse to the holders of Notes, or (J) impair
the right to convert the Notes into Common Stock subject to the terms set forth in the First
Supplemental Indenture, including Section 9.07 thereof, or (K) reduce the number of shares of
Common Stock, the amount of cash or the amount of other property receivable upon conversion, in
each case, without the consent of the holder of each Note so affected, or (L) modify any of the
provisions of Sections 512 and 1013 of the Original Indenture or Sections 5.03 and 6.03 of the
First Supplemental Indenture, except to increase any such percentage or to provide that certain
other provisions of this First Supplemental Indenture cannot be modified or waived without the
consent of the holder of each Note so affected, or (M) reduce the quorum or voting requirements set
forth in Article XV of the Original Indenture or (N) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture, without the consent of
the holders of all Notes then outstanding. Subject to the provisions of the Indenture, the holders
of a majority in aggregate principal amount of the Notes at the time outstanding may on behalf of
the holders of all of the Notes waive any past default or Event of Default under the Indenture and
its consequences except (A) a default in the payment of Interest on or the principal of any of the
Notes, (B) a failure by the Company to convert any Notes into Common Stock, cash or a combination
of cash and Common Stock of the Company, (C) a default in the payment of the Redemption Price
pursuant to Article III of the First Supplemental

 4

 

Indenture, (D) a default in the payment of the Company Repurchase Price or Fundamental Change
Repurchase Price pursuant to Article III of the First Supplemental Indenture, or (E) a default in
respect of a covenant or provision of the Indenture which under Article VI of the First
Supplemental Indenture cannot be modified or amended without the consent of the holders of each or
all Notes then outstanding or affected thereby. Any such consent or waiver by the holder of this
Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder
and upon all future holders and owners of this Note and any Notes which may be issued in exchange
or substitution hereof, irrespective of whether or not any notation thereof is made upon this Note
or such other Notes.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional, to pay the principal
of and Interest on this Note at the place, at the respective times, at the rate and in the coin or
currency herein prescribed.

Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.

The Notes are issuable in fully registered form, without interest coupons, in denominations of
$1,000 principal amount and any multiple of $1,000. At the office or agency of the Company
referred to on the face hereof, and in the manner and subject to the limitations provided in the
Indenture, without payment of any service charge but with payment of a sum sufficient to cover any
tax, assessment or other governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a like aggregate principal amount of
Notes of any other authorized denominations.

At any time on or after July 20, 2012 and prior to maturity, the Notes may be redeemed at the
option of the Company, in whole or in part, in cash, or a combination of cash and shares of Common
Stock, upon mailing a notice of such redemption not less than 30 days but not more than 60 days
before the Redemption Date to the holders of Notes at their last registered addresses, all as
provided in the Indenture, at a Redemption Price equal to 100% of the principal amount of Notes
being redeemed plus accrued and unpaid Interest to, but excluding, the Redemption Date; provided,
that if the applicable Redemption Date is an Interest Payment Date, the Interest payable on such
Interest Payment Date shall be paid on such Interest Payment Date to the holders of record of such
Notes on the applicable Record Date instead of the holders surrendering such Notes for redemption
on such date.

In no event will any Note be redeemable at the option of the Company before July 20, 2012.

The Company may not give notice of any redemption of the Notes if a default in the payment of
Interest on the Notes has occurred and is continuing.

The Notes are not subject to redemption through the operation of any sinking fund.

If a Fundamental Change occurs at any time prior to maturity of the Notes, each holder shall have
the right, at such holder’s option, to require the Company to repurchase this Note for cash, or
subject to certain conditions, Common Stock, on a Fundamental Change Repurchase Date, specified by
the Company, which shall be no later than 30 Business Days after notice thereof, at a Fundamental
Change Repurchase Price equal to at least 100% of the principal amount thereof, together with
accrued Interest to, but excluding, the Fundamental Change Repurchase Date. The Company shall mail
to all holders of record of the Notes a notice of the occurrence of a Fundamental Change and of the
repurchase right arising as a result thereof on or before the 30th day after the occurrence of such
Fundamental Change. For a Note to be so repurchased at the option of the holder, the Company must
receive at the office or agency of the Company maintained for that purpose in accordance with the
terms of the Indenture, such Note with the form entitled “Form of Fundamental Change Repurchase
Notice” on the reverse thereof

5

 

duly completed, together with such Note, duly endorsed for transfer at any time prior to the close
of business on the Business Day immediately preceding the Fundamental Change Repurchase Date.

Subject to the terms and conditions of the Indenture, the Company shall become obligated to
repurchase, at the option of the holder, all or any portion of the Notes held by such holder on
July 15, 2012, July 15, 2017, July 15, 2022, July 15, 2027, and July 15, 2032 in integral multiples
of $1,000 at a Company Repurchase Price of 100% of the principal amount, plus any accrued and
unpaid Interest on such Note to but excluding the Company Repurchase Date. To exercise such right,
a holder shall deliver to the Company such Note with the form entitled “Form of Company Repurchase
Election” on the reverse thereof duly completed, together with the Note, duly endorsed for
transfer, at any time from the opening of business on the 20th Business Day prior to such Company
Repurchase Date until the close of business on the Business Day immediately preceding the Company
Repurchase Date, and shall deliver, or arrange for book-entry transfer of, the Notes to the Trustee
(or other Paying Agent appointed by the Company) as set forth in the Indenture.

The Company Repurchase Price to be paid on any of July 15, 2012, July 15, 2017, July 15, 2022, July
15, 2027, and July 15, 2032 shall be paid in cash and the Fundamental Change Repurchase Price to be
paid on any Fundamental Change Repurchase Date shall be paid in cash or Common Stock, subject to
the terms and conditions of the Indenture.

Holders have the right to withdraw any Repurchase Election by delivering to the Trustee (or other
Paying Agent appointed by the Company) a written notice of withdrawal up to the close of business
on the Business Day immediately preceding the Repurchase Date, all as provided in the Indenture.

If money or Common Stock, if allowed under the Indenture, sufficient to pay the Repurchase Price
with respect to all Notes or portions thereof to be repurchased as of any Repurchase Date is
deposited with the Trustee (or other Paying Agent appointed by the Company), then on and after such
Repurchase Date, such Notes will cease to be outstanding, Interest will cease to accrue on such
Notes (or portions thereof), and the holder thereof shall have no other rights as such other than
the right to receive the Repurchase Price upon surrender of such Note.

Subject to the occurrence of certain events and in compliance with the provisions of the Indenture,
prior to the Stated Maturity of the Notes, the holder hereof has the right, at its option, to
convert each $1,000 principal amount of the Notes into 36.9079 shares of the Common Stock (a
Conversion Price of approximately $27.09 per share), as such shares shall be constituted at the
date of conversion and subject to adjustment from time to time as provided in the Indenture, upon
surrender of this Note with the form entitled “Form of Notice of Conversion” on the reverse hereof
duly completed, to the Company at the office or agency of the Company maintained for that purpose
in accordance with the terms of the Indenture, or at the option of such holder, the Corporate Trust
Office, and, unless the shares issuable on conversion are to be issued in the same name as this
Note, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the
Company duly executed by, the holder or by his duly authorized attorney. The Company will notify
the holder thereof of any event triggering the right to convert the Notes as specified above in
accordance with the Indenture.

If the Company (i) is a party to a consolidation, merger, statutory share exchange or combination,
(ii) reclassifies the Common Stock, or (iii) sells or conveys its properties and assets
substantially as an entirety to any Person, the right to convert a Note into shares of Common Stock
will be changed into a right to convert it into the kind or amount of cash, securities or other
property receivable upon such event, in each case in accordance with the Indenture.

 6

 

No adjustment in respect of Interest on any Note converted or dividends on any shares issued upon
conversion of such Note will be made upon any conversion except as set forth in the next sentence.
If this Note (or portion hereof) is surrendered for conversion during the period from the close of
business on any Record Date for the payment of Interest to the opening of business on the
immediately following Interest Payment Date, this Note (or portion hereof being converted) must be
accompanied by payment, in immediately available funds or other funds acceptable to the Company, of
an amount equal to the Interest otherwise payable on such Interest Payment Date on the principal
amount being converted; provided, that no such payment shall be required (1) if the Company has
specified a Redemption Date that is after a Record Date and prior to the next Interest Payment
Date, (2) if the Company has specified a Repurchase Date following a Fundamental Change that is
after a Record Date and on or prior to the next Interest Payment Date or (3) to the extent of any
Defaulted Interest, if any Defaulted Interest exists at the time of conversion with respect to such
Note.

No fractional shares of Common Stock will be issued upon any conversion, but an adjustment and
payment in cash will be made, as provided in the Indenture, in respect of any fraction of a share
of Common Stock which would otherwise be issuable upon the surrender of any Note or Notes for
conversion.

A Note in respect of which a holder is exercising its right to require repurchase upon a
Fundamental Change or repurchase on a Repurchase Date may be converted only if such holder
withdraws its election to exercise such right in accordance with the terms of the Indenture.

Upon due presentment for registration of transfer of this Note at the office or agency of the
Company maintained for that purpose in accordance with the terms of the Indenture, a Note or Notes
of authorized denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof, subject to the limitations provided in the Indenture, without
charge except for any tax, assessment or other governmental charge imposed in connection therewith.

The Company, the Guarantor, the Trustee, any authenticating agent, any Paying Agent, any Conversion
Agent and any Note Registrar may deem and treat the registered holder hereof as the absolute owner
of this Note (whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon made by anyone other than the Company or any Note Registrar) for
the purpose of receiving payment on or account of the principal hereof and the Interest hereon, for
the conversion hereof and for all other purposes, and neither the Company nor the Trustee nor any
other authenticating agent nor any Paying Agent nor other Conversion Agent nor any Note Registrar
shall be affected by any notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and discharge liability for
monies payable on this Note.

No recourse for the payment of the principal of or Interest on this Note, or for any claim based
hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company or the Guarantor in the Indenture or any supplemental indenture or in any
Note, or because of the creation of any Indebtedness represented thereby, or for any of the
obligations of the Guarantor under the Guarantee shall be had against any incorporator,
shareholder, member, employee, agent, officer or director or subsidiary, as such, past, present or
future, of the Company, the Guarantor, or of any successor corporation or limited liability
company, either directly or through the Company, or the Guarantor, or any successor corporation or
limited liability company, whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being, by acceptance
hereof and as part of the consideration for the issue hereof, expressly waived and released.

Terms used in this Note and defined in the Indenture are used herein as therein defined.

 7

 

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Note, shall be
construed as though they were written out in full according to applicable laws or regulations.

	 	 	 	 	 
	TEN COM —

	 	as tenants in common
	 	UNIF GIFT MIN
ACT—                      Custodian                     
	TEN ENT —

	 	as tenant by the entireties
	 	(Cust) (Minor)
	JT TEN —

	 	as joint tenants with right of
	 	under Uniform Gifts to Minors Act
	 

	 	survivorship and not as tenants in
common	 	 

(State)                                                                

Additional abbreviations may also be used though not in the above list.

 8

 

FORM OF

NOTICE OF CONVERSION

TO:   CAPITALSOURCE INC.

          WELLS FARGO BANK, N.A.

The undersigned registered owner of this Note hereby irrevocably exercises the option to convert
this Note, or the portion thereof (which is $1,000 or a multiple thereof) below designated, into
shares of Common Stock of CapitalSource Inc. and/or cash in accordance with the terms of the
Indenture referred to in this Note, and directs that the shares issuable and deliverable and/or
cash payable upon such conversion, together with any check in payment for fractional shares and any
Notes representing any unconverted principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. Capitalized terms used
herein but not defined shall have the meanings ascribed to such terms in the Indenture. If shares,
any portion of this Note not converted or a check for cash payable are to be issued in the name of
a person other than the undersigned, the undersigned will provide the appropriate information below
and pay all transfer taxes payable with respect thereto. Any amount required to be paid by the
undersigned on account of Interest accompanies this Note.

Dated:                                         

	 	 	 	 	 
	 	

 	 
	 	 	 
	 	Signature(s) 	 

	 	 	 	Signature(s) must be guaranteed by an “eligible
guarantor institution” meeting the requirements of
the Note Registrar, which requirements include
membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such
other “signature guarantee program” as may be
determined by the Note Registrar in addition to, or
in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
	 
	 	 	 	Signature Guarantee

NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon
the face of the Note in every particular without alteration or enlargement or any change whatever.

9

 

Fill in the registration of shares of Common Stock if to be issued, and Notes if to be delivered,
other than to and in the name of the registered holder:

	 	 	 	(Name)                                                                         
	 
	 	 	 	(Street Address)                                                                       
	 
	 	 	 	(City, State and Zip Code)                                                       
	 
	 	 	 	Please print name and address
	 
	 	 	 	Principal amount to be converted (if less than all):
$           
	 
	 	 	 	Social Security or Other Taxpayer Identification
Number:                                                                         

10

 

FORM OF

FUNDAMENTAL CHANGE REPURCHASE NOTICE

TO:   CAPITALSOURCE INC.

          WELLS FARGO BANK, N.A.

The undersigned registered owner of this Note hereby irrevocably acknowledges receipt of a notice
from CapitalSource Inc. (the “Company”) as to the occurrence of a Fundamental Change with
respect to the Company and requests and instructs the Company to repurchase the entire principal
amount of this Note, or the portion thereof (which is $1,000 or a multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this Note at the price
equal to at least 100% of such entire principal amount or portion thereof, together with accrued
Interest to, but excluding, the Fundamental Change Repurchase Date, to the registered holder
hereof. Capitalized terms used herein but not defined shall have the meanings ascribed to such
terms in the Indenture.

Dated:                                         

	 	 	 	 	 
	 	

 	 
	 	 	 
	 	Signature(s) 	 

NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon
the face of the Note in every particular without alteration or enlargement or any change whatever.

 

Note Certificate Number (if applicable):                                                             

 

                    Principal amount to be repurchased (if less than all):                                         
                    

 

                             Social Security or Other Taxpayer Identification Number:                     
                                        

11

 

FORM OF

COMPANY REPURCHASE ELECTION

TO:   CAPITALSOURCE INC.

          WELLS FARGO BANK, N.A.

The undersigned registered owner of this Note hereby irrevocably acknowledges receipt of a notice
from CapitalSource Inc. (the “Company”) regarding the right of holders to elect to require
the Company to repurchase the Notes and requests and instructs the Company to repay the entire
principal amount of this Note, or the portion thereof (which is $1,000 or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture at the price of 100% of
such entire principal amount or portion thereof, together with accrued Interest to, but excluding,
the Company Repurchase Date, to the registered holder hereof. Capitalized terms used herein but
not defined shall have the meanings ascribed to such terms in the Indenture. The Notes shall be
repurchased by the Company as of the Company Repurchase Date pursuant to the terms and conditions
specified in the Indenture.

Dated:                                         

	 	 	 	 	 
	 	

 	 
	 	 	 
	 	Signature(s) 	 

NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon
the face of the Note in every particular without alteration or enlargement or any change whatever.

 

Note Certificate Number (if applicable):                                                             

 

      
              
Principal amount to be repurchased (if less than all):     
              
                                          

 

 
               
             
Social Security or Other Taxpayer Identification Number:   
             
            
       
         
          
       

12

 

ASSIGNMENT

For value received                      hereby sell(s) assign(s) and transfer(s) unto                      (please insert
social security or other Taxpayer Identification Number of assignee) the within Note, and hereby
irrevocably constitutes and appoints                      attorney to transfer said Note on the books of the
Company, with full power of substitution in the premises.

Dated:                                                             

	 	 	 	 	 
	 	

 	 
	 	 	 
	 	Signature(s) 	 

	 	 	 	Signature(s) must be guaranteed by an “eligible
guarantor institution” meeting the requirements of
the Note Registrar, which requirements include
membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such
other “signature guarantee program” as may be
determined by the Note Registrar in addition to, or
in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
	 
	 	 	 	Signature Guarantee

NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon
the face of the Note in every particular without alteration or enlargement or any change whatever.

13

 

Schedule I

CAPITALSOURCE INC.

7.250% Senior Subordinated Convertible Notes due 2037

No. 1

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Notation Explaining	 	 	Authorized Signature	 
	 	 	 	 	 	 	 	 	Principal Amount	 	 	of Trustee or	 
	Date	 	 	Principal Amount	 	 	Recorded	 	 	Custodian

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]