Document:

exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) is entered into by and between Offshore
Logistics, Inc., a Delaware corporation (the “Company”) and Michael R. Suldo, an individual (the
“Executive”), effective as of the 1st day of June, 2005 (“Effective Date”). Except as
otherwise provided herein, capitalized terms used herein shall have the meaning specified in
Section 10.

     WHEREAS, the Company desires to employ the Executive and to enter into an employment agreement
embodying the terms of such employment and services; and

     WHEREAS, the Executive desires to accept such employment and service as a Senior Vice
President of the Company and to enter into this Agreement.

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the receipt of which is mutually acknowledged, the Company
and the Executive agree as follows:

     1. Employment, Duties and Acceptance.

     (a) Employment Period.

     (i) The Company hereby agrees to employ the Executive for a term commencing on the
Effective Date and expiring at the end of the day on May 31, 2007 (the “Initial Employment
Period”).

     (ii) The Initial Employment Period shall be automatically further extended at the end
of the Initial Employment Period and on each anniversary thereafter (each such date being a
“Renewal Date”), so as to terminate one (1) year from such Renewal Date, unless at least
ninety (90) days prior to a Renewal Date either Party gives a Notice of Non-Renewal to the
other Party that the Employment Period should not be further extended after the next Renewal
Date, in which event the end of the term of the Executive’s employment by the Company shall
be the Renewal Date next following such Notice of Non-Renewal. As used in this Agreement,
the “Employment Period” shall mean the period beginning on the Effective Date and ending on
the expiration of the term of the Executive’s employment with the Company pursuant to this
Section 1(a), subject to earlier termination of the Executive’s employment with the Company
pursuant to Section 3 hereof.

     (iii) Notwithstanding the foregoing provisions of this Section 1(a), if a Change of
Control Effective Date (as defined in Section 10(i) hereof) occurs during the Employment
Period, then the Employment Period shall extend to include and shall terminate at the end of
the Change of Control Period, subject to earlier termination pursuant to Section 3 hereof,
and the Employment Period shall no longer be subject to extension on the Renewal Date.

     (b) Position. From and after the Effective Date during the remainder of the
Employment Period, the Executive shall serve as a Senior Vice President of the Company and

 

 

shall report to the President and Chief Executive Officer of the Company. Executive shall
also serve in those offices and directorships of subsidiary corporations or entities of the Company
to which the Executive may from time to time be appointed or elected, including, but not limited
to, President of Air Logistics, L.L.C. During the Employment Period, the Executive shall devote
substantially all of the Executive’s business time, energy and talents to the Company and its
Affiliated Group. During the Employment Period, it shall not be a violation of this Agreement for
the Executive, subject to the requirements of Section 5, to (A) serve on corporate, civic or
charitable boards or committees, provided that, without the written approval of the Board, the
Executive shall be permitted to serve on no more than one such corporate board, (B) deliver
lectures or fulfill speaking engagements and (C) manage personal investments, so long as such
activities do not interfere with the performance of the Executive’s responsibilities as a Senior
Vice President of the Company or violate any Company policies.

     (c) Location of Services. The Executive’s principal location of employment shall be
at the Company offices located in New Iberia, Louisiana; provided, that the Executive will
be required to travel frequently outside of the applicable principal location of employment in
connection with the performing the Executive’s duties under this Agreement.

     (d) Duties. The Executive agrees that during the Employment Period, the Executive
shall be the Chief Operating Officer of the Company in the Western Hemisphere responsible for the
management and supervision of the aircraft operations functions of the Company and the Affiliated
Group in the Western Hemisphere. During any Change of Control Period, the Executive’s position
(including status, offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with the most significant
of those held, exercised and assigned to the Executive at any time during the 120-day period
immediately preceding the Change of Control Effective Date.

     (e) Acceptance of Employment by the Executive. The Executive hereby accepts such
employment and shall render the services and perform the duties described above.

     2. Compensation and Benefits.

     (a) Base Salary. During the Employment Period, the Executive shall receive an
annualized base salary (“Annual Base Salary”) at the rate of $215,000 (Company salary grade 12),
payable semi-monthly or such other payroll period pursuant to the Company’s normal payroll
practices for its senior executives. The current Annual Base Salary shall be reviewed at such time
as the salaries of other senior executives of the Company are reviewed generally; provided,
that the Executive’s reviews shall occur at least annually and may be increased and decreased, but
not decreased below $215,000 per year, during the Employment Period. All such reviews shall
consider factors the Company deems material; including, but not limited to: (i) market
benchmarking; (ii) increases in cost of living; (iii) Executive’s job performance; and (iv) overall
Company performance. During any Change of Control Period, the Annual Base Salary shall be at least
equal to 12 times the highest monthly base salary paid or payable, including any base salary which
has been earned but deferred, to the Executive by the Company and the Affiliated Group in respect
of the 12-month period immediately preceding the month in which the Change of Control Effective
Date occurs. During any Change of Control Period, (x) Annual

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Base Salary shall not be reduced, and (y) the term “Annual Base Salary” as utilized in this
Agreement shall refer to Annual Base Salary as determined pursuant to the foregoing subpart (x).

     (b) Annual Bonus. For each fiscal year completed during the Employment Period, the
Executive shall be eligible to receive an annual cash bonus (“Annual Bonus”) based upon performance
targets that are established by the Committee, provided that the Executive’s target Annual
Bonus shall be equal to 50% of the Executive’s Annual Base Salary (the “Target Bonus”), and the
maximum Annual Bonus shall be equal to 100% of the Executive’s Annual Base Salary. Annual
performance metrics will be set by the Committee based upon objective performance criteria of the
Company, such as earnings per share and return on capital employed, as well as individual
performance and, with respect to the Company’s fiscal year ending March 31, 2006, pursuant to the
provisions of the FY 2006 Annual Incentive Compensation Plan. During any Change of Control Period,
the Executive shall be awarded, for each fiscal year ending during the Change of Control Period, an
Annual Bonus in cash at least equal to the Recent Annual Bonus. Each such Annual Bonus shall be
paid no later than the end of the third month of the fiscal year next following the fiscal year for
which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such
Annual Bonus.

     (c) Stock Option Grant. The Company shall grant to the Executive stock options
pursuant to the Incentive Plan to purchase 3,700 shares of the Company’s common stock (the “Stock
Options”). The Stock Options shall have a per share exercise price equal to the closing price of a
share of common stock of the Company on the date of grant which shall be as soon as reasonably
practicable after approval of this Agreement by the Committee, shall have a ten-year term, and
shall vest in three annual installments on each of the first three anniversaries of the Effective
Date, with 33% of the Stock Options vesting on each of first two anniversaries of the Effective
Date, and the remaining 34% vesting on the third anniversary of the Effective Date,
provided in each case that the Executive remains in the employ of the Company through such
date. Except as specifically provided herein, the terms and conditions of the Stock Options shall
be subject to the terms of the Incentive Plan and the award agreement evidencing the grant. During
the Employment Period, the Executive may receive such additional Awards (as defined in the
Incentive Plan), if any, pursuant to the Incentive Plan as may be determined, from time to time, by
the Committee.

     (d) Performance Accelerated Restricted Stock Unit Grant. The Company shall grant to
the Executive pursuant to the Incentive Plan, 3,700 Performance Accelerated Restricted Stock Units
(the “Restricted Shares”). The Restricted Shares will vest five years after the Effective Date so
long as Executive has been continuously employed by the Company and the Company’s annualized total
shareholder return (as defined in the award agreement) is at least 3% during the entire vesting
period. Vesting of the Restricted Shares will be accelerated if the Company’s annualized total
shareholder returns during such vesting period reach certain thresholds provided in the award
agreement evidencing the grant of the Restricted Shares (which thresholds shall be consistent with
those provided in awards to other senior executives of the Company) and under the circumstances
described in Section 3(e). Except as specifically provided herein, the terms and conditions of the
Restricted Shares shall be subject to the terms of the Incentive Plan and the award agreement
evidencing the grant. During the Employment Period, the Executive may receive such additional
Awards (as defined in the Incentive Plan), if any, pursuant to the Incentive Plan as may be
determined, from time to time, by the Committee.

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     (e) Deferred Compensation. As soon as reasonably practicable after December 31 of
each year during the Employment Period the Company will credit an amount equal to fifteen percent
(15%) of the aggregate cash paid by the Company to Executive as Annual Base Salary and Annual Bonus
for the calendar year ended December 31 (less Company contributions to qualified plans) into a
Company deferred compensation plan (the Offshore Logistics, Inc. Deferred Compensation Plan
Effective: January 1, 2004, as amended from time to time), which will be subject to the vesting
schedule set forth in such plan. In the event that legislation implemented subsequent to the date
of this Agreement causes the deferrals contemplated hereby not to be respected for tax purposes,
such amounts shall be paid to the Executive in the year of accrual on December 31st of each such
year (conditioned on the Executive’s continued employment on such date), on a fully taxable basis,
and without adjustment for tax impact.

     (f) Employee Benefits. During the Employment Period, the Executive (subject to
applicable law and regulation) shall be eligible for participation in the Company health and
medical, welfare, retirement (including the Offshore Logistics, Inc. Employee Savings and
Retirement Plan, as amended from time to time), non-qualified deferred compensation, perquisite,
fringe benefit, and other benefit plans, practices, policies and programs, as may be in effect from
time to time, for executives of the Company generally; provided, that, except as otherwise
provided in this Agreement, the Executive shall not be eligible for any Company severance benefit
plans, practices, policies and programs. As soon as reasonably practicable after execution and
delivery of this Agreement by the Company and the Executive and thereafter during the Employment
Period, the Company shall provide the Executive with a Company-paid portable, term life insurance
policy covering the Executive’s life in the amount of $500,000 with death benefits payable to the
Executive’s designated beneficiaries. The Executive shall cooperate with the Company in applying
for such coverage, including submitting to a physical exam and providing all relevant health and
personal data. During any Change of Control Period, in no event shall the benefits described in
this Section 2(f) provide the Executive with benefits that are less favorable, in the aggregate,
than the most favorable of such benefits in effect for the Executive at any time during the 120-day
period immediately preceding the Change of Control Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Change of Control Effective Date to other
peer executives of the Company and the Affiliated Group.

     (g) Expenses. During the Employment Period, the Executive shall be eligible for
prompt reimbursement for business expenses reasonably incurred by the Executive in accordance with
the policies of the Company as may be in effect from time to time for Company executives generally.

     (h) Vacation. During the Employment Period, the Executive shall be eligible for paid
vacation at the rate of four (4) weeks per year in accordance with the policies of the Company.

     (i) Company Automobile. During the Employment Period, the Company shall provide the
Executive with an automobile allowance of $1,500 per month to be used by Executive to acquire,
maintain and operate an automobile which Executive may use for business purposes during the
Employment Period.

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     (j) Office and Support Staff. During any Change of Control Period, the Executive
shall be entitled to an office or offices of a size and with furnishings and other appointments,
and to exclusive personal secretarial and other assistants, at least equal to the most favorable of
the foregoing provided to the Executive by the Company and the Affiliated Group at any time during
the 120-day period immediately preceding the Change of Control Effective Date or, if more favorable
to the Executive, as provided generally at any time thereafter with respect to other peer
executives of the Company and the Affiliated Group.

     3. Termination of Employment.

     (a) Death or Disability. The Executive’s employment shall terminate automatically
upon the Executive’s death during the Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may provide the Executive with written notice in
accordance with Section 9(b) of this Agreement of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with the Company shall terminate effective
on the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”),
provided that, within the 30-day period after such receipt, the Executive shall not have returned
to full time performance of the Executive’s duties.

     (b) Cause. The Company may terminate the Executive’s employment during the Employment
Period with or without Cause.

     (c) Good Reason. The Executive’s employment may be terminated by the Executive with
or without Good Reason. The Executive’s employment may be terminated by the Executive for Good
Reason if (x) an event or circumstance set forth in Section 10(aa) shall have occurred and the
Executive provides the Company with written notice thereof within 30 days after the Executive has
knowledge of the occurrence or existence of such event or circumstance, which notice shall
specifically identify the event or circumstance that the Executive believes constitutes Good
Reason, (y) the Company fails to correct the circumstance or event so identified within 30 days
after the receipt of such notice, and (z) the Executive resigns within 90 days after the date of
delivery of the notice referred to in clause (x) above.

     (d) Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to the other Party hereto
given in accordance with Section 9(b) of this Agreement. The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such
fact or circumstance in enforcing the rights of the Executive or the Company hereunder.

     (e) Special Vesting Terms for Stock Option and Awards. All unvested Stock Options and
other Awards (including, without limitation, the Restricted Shares) granted pursuant to this
Agreement or the Incentive Plan will become fully vested and unrestricted (i) in the event of the
Company’s termination of the Executive’s employment without Cause during the Employment Period,
(ii) upon termination of the Executive’s employment by the Company due to the

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Executive’s death or Disability, or (iii) upon the occurrence of a Change of Control. If the
Executive’s employment is terminated prior to the Termination Date, the period of exercise for the
Executive’s vested Stock Options shall be as follows:

     (i) Upon the Executive’s termination of employment by reason of the Executive’s death
or Disability, any Stock Options held by the Executive that were exercisable immediately
before the Date of Termination may be exercised at any time until the earlier of (A) the
second anniversary of the Date of Termination and (B) the expiration date of the Stock
Options.

     (ii) Upon the Executive’s termination of employment by the Company for Cause, any Stock
Options and Restricted Shares held by the Executive shall be forfeited, effective as of the
Date of Termination.

     (iii) Upon termination of the Executive’s employment for any reason other than the
Executive’s death or Disability or termination by the Company for Cause, any Stock Options
held by the Executive that were exercisable immediately before the Date of Termination may
be exercised at any time until the earlier of (A) the 90th day following the Date
of Termination and (B) the expiration date of such Stock Options.

     (iv) Notwithstanding the foregoing provisions of this Section 3(e), if the Executive
dies after the Executive’s employment by the Company is terminated but while any of the
Stock Options remain exercisable as set forth above, such Stock Options may be exercised at
any time until the later of (A) the earlier of (1) the first anniversary of the date of such
death and (2) the expiration date of such Stock Options and (B) the last date on which such
Stock Options would have been exercisable, absent this Section 3(e)(iv).

     (v) Notwithstanding the foregoing provisions of this Section 3(e), upon the termination
of the Executive’s employment with the Company for any reason, other than termination for
Cause by the Company, during the 24-month period following any Change of Control Effective
Date, any Stock Options held by the Executive as of the Change of Control Effective Date
that remain outstanding as of the Date of Termination may thereafter be exercised, until the
later of (A) the last date on which such Stock Options would be exercisable in the absence
of this Section 3(e)(v) and (B) the earlier of (1) the third anniversary of the Change of
Control Effective Date and (2) the expiration date of such Stock Options.

Notwithstanding anything in this Agreement to the contrary, express or implied, except as provided
in Section 4(a)(ii), the provisions of this Agreement are in addition to and not in limitation of
the Executive’s rights under the Incentive Plan and any other plan, program, policy or practice
provided by the Company or any of the Affiliated Group and for which the Executive may qualify.

     (f) Resignation from All Positions. Notwithstanding any other provision of this
Agreement, upon the termination of the Executive’s employment for any reason, unless otherwise
requested by the President and Chief Executive Officer and accepted by the Executive, the Executive
shall immediately resign as of the Date of Termination from all positions that the

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Executive holds or has ever held with the Company and any other member of the Affiliated Group
(and with any other entities with respect to which the Company has requested the Executive to
perform services and which has been accepted by the Executive), including, without limitation, all
boards of directors of any member of the Affiliated Group. The Executive hereby agrees to execute
any and all documentation to effectuate such resignations upon request by the Company, but the
Executive shall be treated for all purposes as having so resigned upon termination of the
Executive’s employment, regardless of when or whether the Executive executes any such
documentation.

     4. Obligations upon Termination.

     (a) Good Reason; Other Than for Cause; Non-Renewal by Company; Expiration. If, during
the Employment Period, (1) the Company shall terminate the Executive’s employment other than for
Cause, death or Disability, (2) the Executive shall terminate the Executive’s employment for Good
Reason, (3) the Executive’s employment terminates voluntarily or involuntarily by reason of the
Company providing to the Executive a Notice of Non-Renewal, or (4) the Executive’s employment
terminates voluntarily or involuntarily upon expiration of the term of this Agreement at the end of
a Change of Control Period unless the Company provides the Executive with a Comparable Offer at
least ninety (90) days prior to the end of the Change of Control Period:

     (i) The Company shall pay to the Executive in a lump sum in cash within 30 days after
the Date of Termination the aggregate of the following amounts:

	 	A.	 	the Accrued Amounts (as defined in Section 10(a) hereof); and
	 
	 	B.	 	an amount equal to:

	 	(1)	 	in the event such termination occurs at any
time other than a Change of Control Period, the product of (x) two and
(y) the sum of (i) the Executive’s Annual Base Salary at the Date of
Termination and (ii) the Target Bonus; or
	 
	 	(2)	 	in the event such termination occurs during or
at the end of a Change of Control Period, the product of (x) three and
(y) the sum of (i) the Executive’s Annual Base Salary and (ii) the
Highest Annual Bonus.

     (ii) To the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or provided or
which the Executive is eligible to receive under any plan, program, policy or practice or
contract or agreement (other than, in the event the Executive’s termination occurs outside
of a Change of Control Period, any severance plan, program, policy or practice or contract
or agreement) of the Company and its Affiliated Group (such amounts and benefits, the “Other
Benefits”) in accordance with the terms and normal procedures of each such plan, program,
policy or practice, based on accrued benefits through the Date of Termination.

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     (iii) Until the earlier to occur of (A) the expiration of eighteen months after the
Date of Termination, (B) the date on which the Executive attains the age of 65, (C) the date
the Executive first becomes eligible to receive health benefits under another
employer-provided plan, from and after the Executive’s Date of Termination, or (D) the death
of the Executive, the Company shall, via proper COBRA election by Executive, continue
medical and dental benefits to the Executive (and, if applicable, to the spouse and
dependents of the Executive who received such benefits under the Executive’s coverage
immediately prior to the Date of Termination) at least equal to those that would have been
provided to the Executive (and to any such dependent) in accordance with the plans,
programs, practices and policies of the Company had the Executive remained actively
employed, provided that Executive makes all required COBRA payments to the Company, and the
Company shall immediately reimburse Executive for each such COBRA payment.

     (iv) As a condition to the Executive’s receipt of payments and benefits described under
Sections 4(a)(i), 4(a)(ii) and 4(a)(iii) in the event the Executive’s termination occurs
outside of a Change of Control Period, the Executive must execute and deliver to the Company
a full release of all claims that the Executive may have (and such release must become
irrevocable) against the Company, its Affiliated Group, and all of their officers,
employees, directors, and agents, in a form mutually and reasonably agreeable to the Parties
hereunder; provided, however, that the Executive shall retain the Executive’s
indemnification and related rights as a former officer and director under the Certificate of
Incorporation and Bylaws of the Company and the Executive’s rights under the Directors and
Officers Insurance Policy(ies) maintained by the Company from time to time.

     (b) Cause; Without Good Reason; Non-Renewal by Executive. If the Executive’s
employment shall be terminated for Cause during the Employment Period, if the Executive shall
resign without Good Reason during the Employment Period, or if the Executive’s employment
terminates by reason of the Executive providing to the Company a Notice of Non-Renewal, this
Agreement shall terminate without further obligations to the Executive, other than the Company’s
obligation to pay or provide to the Executive an amount equal to the Accrued Amounts and the Other
Benefits. For purposes of this Section 4(b) only, the Accrued Amounts shall not include the amount
described in Section 10(a)(i)(2).

     (c) Death or Disability. If the Executive’s employment is terminated by reason of the
Executive’s death or Disability during the Employment Period, this Agreement shall terminate
without further obligations to the Executive’s legal representatives under this Agreement, other
than the Company’s obligation to pay or provide to Executive’s estate, heirs or beneficiaries or to
Executive, as the case may be: (i) the Accrued Amounts; and (ii) the Other Benefits. With respect
to the provision of Other Benefits, in the event the Executive’s termination occurs during a Change
of Control Period, the term “Other Benefits” as utilized in this Section 4(c) shall include,
without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to receive,
benefits at least equal to the most favorable benefits provided by the Company and the Affiliated
Group to the estates and beneficiaries of peer executives of the Company and the Affiliated Group
under such plans, programs, practices and policies relating to death benefits, if any, as in effect
with respect to other peer executives and their beneficiaries at any time during

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the 120-day period immediately preceding the Change of Control Effective Date or, if more
favorable to the Executive’s estate and/or the Executive’s beneficiaries, as in effect on the date
of the Executive’s death with respect to other peer executives of the Company and the Affiliated
Group and their beneficiaries.

     5. Covenants. The Executive recognizes that the Company’s willingness to enter into
this Agreement is based in material part on the Executive’s agreement to the provisions of this
Section 5, and that the Executive’s breach of the provisions of this Section 5 could materially
damage the Company.

     (a) Confidential Information. The Company will provide its confidential and trade
secret information to the Executive, and the Executive agrees to hold in a fiduciary capacity for
the benefit of the Company and the Affiliated Group, all Confidential Information. The Executive
shall not communicate, divulge or disseminate Confidential Information at any time during or after
the Executive’s employment with the Company and the Affiliated Group, except with the prior written
consent of the Company, or as otherwise required by law or legal process or governmental inquiry or
as such disclosure or use may be required in the course of the Executive performing the Executive’s
duties and responsibilities hereunder. Notwithstanding the foregoing provisions, if the Executive
is required to disclose any such confidential or proprietary information pursuant to applicable law
or governmental inquiry or a subpoena or court order, the Executive shall promptly notify the
Company in writing of any such requirement so that the Company or the appropriate member of the
Company and the Affiliated Group may seek an appropriate protective order or other appropriate
remedy. The Executive shall reasonably cooperate with the Company and the Affiliated Group to
obtain such a protective order or other remedy. If such order or other remedy is not obtained
prior to the time the Executive is required to make the disclosure, then unless the Company waives
compliance with the provisions hereof, the Executive shall disclose only that portion of the
confidential or proprietary information which the Executive is advised by counsel in writing
(either the Executive’s or the Company’s) that the Executive is legally required to so disclose.
Upon the Executive’s termination of employment with the Company and the Affiliated Group for any
reason, the Executive shall promptly return to the Company all records, files, memoranda,
correspondence, notebooks, notes, reports, customer lists, drawings, plans, documents, and other
documents and the like relating to the business of the Company and the Affiliated Group or
containing any trade secrets relating to the Company and the Affiliated Group or that the Executive
uses, prepares or comes into contact with during the course of the Executive’s employment with the
Company and the Affiliated Group, and all keys, credit cards and passes, and such materials shall
remain the sole property of the Company and/or the Affiliated Group, as applicable. The Executive
agrees to execute any standard form confidentiality agreements with the Company that the Company
generally enters into or may enter into in the future with its senior executives. The Executive
agrees to represent in writing to the Company upon termination of employment that the Executive has
complied with the foregoing provisions of this Section 5(a).

     (b) Work Product and Inventions. The Company and/or its nominees or assigns shall own
all right, title and interest in and to the Developments, whether or not patentable, reduced to
practice or registrable under patent, copyright, trademark or other intellectual property law
anywhere in the world, made, authored, discovered, reduced to practice, conceived, created,
developed or otherwise obtained by the Executive (alone or jointly with others) during the

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Executive’s employment with the Company and the Affiliated Group, and arising from or relating
to such employment or the business of the Company or of other member of the Affiliated Group
(whether during business hours or otherwise, and whether on the premises of using the facilities or
materials of the Company or of other members of the Affiliated Group or otherwise). The Executive
shall promptly and fully disclose to the Company and to no one else all Developments, and hereby
assigns to the Company without further compensation all right, title and interest the Executive has
or may have in any Developments, and all patents, copyrights, or other intellectual property rights
relating thereto, and agrees that the Executive has not acquired and shall not acquire any rights
during the course of the Executive’s employment with the Affiliated Group or thereafter with
respect to any Developments.

     (c) Non-Solicitation of Affiliated Group Employees. The Executive shall not, at any
time during the Restricted Period, other than in the ordinary exercise of the Executive’s duties
while serving as a Senior Vice President, without the prior written consent of the Company,
directly or indirectly, solicit, recruit, or employ (whether as an employee, officer, agent,
consultant or independent contractor) any person who is or was at any time during the previous 12
months, an employee, representative, officer or director of the Company or any member of the
Affiliated Group. Further, during the Restricted Period, the Executive shall not take any action
that could reasonably be expected to have the effect of directly encouraging or inducing any person
to cease their relationship with the Company or any member of the Affiliated Group for any reason.
A general employment advertisement by an entity of which the Executive is a part will not
constitute solicitation or recruitment.

     (d) Non-Competition. In consideration of the Company’s promise to provide the
Executive with the confidential and trade secret information of the Company, the Executive agrees
as follows:

     (i) Areas Other Than Louisiana. Except with respect to competition in the
State of Louisiana, or with respect to competition in or above the waters off the State of
Louisiana in the areas specified in subparagraph (B) of Section 5(d)(ii) of this Agreement,
during the Restricted Period, the Executive shall not, either directly or indirectly,
compete with the business of the Company anywhere in the world where the Company or any
member of the Affiliated Group conducts business by (1) becoming an officer, agent,
employee, partner or director of any other corporation, partnership or other entity, or
otherwise render services to or assist or hold an interest (except as a less than 2-percent
shareholder of a publicly traded corporation or as a less than 5-percent shareholder of a
corporation that is not publicly traded) in any Competitive Business, or (2) soliciting,
servicing, or accepting the business of (A) any active customer of the Company or any member
of the Affiliated Group, or (B) any person or entity who is or was at any time during the
previous twelve months a customer of the Company or any member of the Affiliated Group,
provided that such business is competitive with any significant business of the Company or
any member of the Affiliated Group.

     (ii) Louisiana. With respect to competition in the State of Louisiana, or with
respect to competition in or above the waters specified in subparagraph (B) of this Section
5(d)(ii).

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	 	A.	 	Executive, during the Restricted Period, agrees to refrain from
carrying on or engaging in a business similar to the business of the Company or
any member of the Affiliated Group, or from soliciting customers of the
business of the Company or any member of the Affiliated Group, within the
Parishes of Lafayette, Vermillion, Cameron, Iberia, St. Mary, Plaquemines,
Terrebonne, Lafourche, St. Bernard, Orleans, Calcasieu and Jefferson in the
State of Louisiana, so long as the Company or any member of the Affiliated
Group carries on a like business therein during the Restricted Period, and
	 
	 	B.	 	Executive, during the Restricted Period, agrees to refrain from
carrying on or engaging in a business similar to the business of the Company or
any member of the Affiliated Group or from soliciting customers of the business
of the Company or any member of the Affiliated Group in or above the waters of
the Gulf of Mexico adjacent to the Parishes of Lafayette, Vermillion, Cameron,
Iberia, St. Mary, Plaquemines, Terrebonne, Lafourche, St. Bernard, Orleans,
Calcasieu and Jefferson in the State of Louisiana, so long as the Company or
any member of the Affiliated Group carries on a like business therein during
the Restricted Period.
	 
	 	C.	 	All non-capitalized terms in subparagraphs (A) and (B) of this
Section 5(d)(ii) are intended to and shall have the same meanings that those
terms (to the extent they appear therein) have in La. R.S. 23:921.C. Subject
to and only to the extent not inconsistent with the foregoing sentence, the
Parties understand the following phases to have the following meanings:

	 	(1)	 	The phrase “carrying on or engaging in a
business similar to the business of the Company or any member of the
Affiliated Group” includes engaging, as principal, agent, trustee, or
through the agency of any corporation, partnership, association or
agent or agency, in any business that conducts an offshore oil and gas
helicopter service business in competition with the Company or any
member of the Affiliated Group or being the owner (except as a less
than 2-percent shareholder of a publicly traded corporation or as a
less than 5-percent shareholder of a corporation that is not publicly
traded) of any interest in any corporation or other entity, or an
officer, director, or employee of any corporation or other entity
(other than the Company or any member of the Affiliated Group), or a
member or employee or any partnership, or an owner or employee of any
other business that conducts an offshore oil and gas helicopter service
business in competition with the Company or any member of the
Affiliated Group. Moreover, the term also includes (i) directly or
indirectly inducing any current customers of the Company or any member
of the Affiliated Group to patronize any offshore oil and gas
helicopter service business in competition with the Company or any
member of the Affiliated

11

 

	 	 	 	Group; (ii) canvassing, soliciting, or accepting any offshore oil and
gas helicopter service business of the type conducted by the Company
or any member of the Affiliated Group; (iii) directly or indirectly
requesting or advising any current customers of the Company or any
member of the Affiliated Group to withdraw, curtail or cancel such
customer’s offshore oil and gas helicopter service business with the
Company or any member of the Affiliated Group; or (iv) directly or
indirectly disclosing to any other person, firm, corporation or
entity, the names and addresses of any of the current customers of
the Company or any member of the Affiliated Group. In addition, the
term includes, directly or indirectly, through any person, firm,
association, corporation or other entity with which Executive is now
or may hereafter become associated, causing or inducing any present
employee of the Company or any of its subsidiaries to leave the
employ of the Company or any of its subsidiaries to accept employment
with the Executive or with such person, firm association,
corporation, or other entity.

	 	(2)	 	The phrase “a similar business to the business
of the Company or any member of the Affiliated Group” means an offshore
oil and gas helicopter service business.
	 
	 	(3)	 	The phrase “carries on a like business”
includes, without limitation, actions taken by or through a
wholly-owned subsidiary or other affiliated corporation or entity.

	 	D.	 	Notwithstanding any other provision of this Agreement, Section
5(d)(ii) of this Agreement shall not apply with respect to any geographic area
outside of the geographic territory expressly set forth in this Section
5(d)(ii).

     (e) Assistance. The Executive agrees that during and after the Executive’s employment
by the Company, upon request by the Company, the Executive will assist the Company and the
Affiliated Group in the defense of any claims, or potential claims that may be made or threatened
to be made against the Company and/or any member of the Affiliated Group in any Proceeding, and
will assist the Company and the Affiliated Group in the prosecution of any claims that may be made
by the Company and/or any member of the Affiliated Group in any Proceeding, to the extent that such
claims may relate to the Executive’s employment or the period of the Executive’s employment by the
Company. The Executive agrees, unless precluded by law, to promptly inform the Company if the
Executive is asked to participate (or otherwise become involved) in any Proceeding involving such
claims or potential claims. The Executive also agrees, unless precluded by law, to promptly inform
the Company if the Executive is asked to assist in any investigation (whether governmental or
otherwise) of the Company and/or any member of the Affiliated Group (or their actions), regardless
of whether a lawsuit has then been filed against the Company and/or any member of the Affiliated
Group with respect to such investigation. The Executive agrees to fully and completely cooperate
with any investigations conducted by or on behalf of the Company and for any member of the
Affiliated Group from

12

 

time to time. The Company agrees to reimburse the Executive for all of the Executive’s
reasonable out-of-pocket expenses associated with such assistance, including travel expenses and
any attorneys’ fees, and shall pay a reasonable per diem fee for the Executive’s service. In
addition, the Executive agrees to provide such services as are reasonably requested by the Company
to assist any successor to the Executive in the transition of duties and responsibilities to such
successor. Any services or assistance contemplated in this Section 5(e) shall be at mutually
agreed to and convenient times.

     (f) Remedies. The Executive acknowledges and agrees that the terms of this Section 5:
(i) are reasonable in geographic and temporal scope, (ii) are necessary to protect legitimate
proprietary and business interests of the Company in, inter alia, near permanent customer
relationships and confidential information. The Executive further acknowledges and agrees that (x)
the Executive’s breach of the provisions of this Section 5 will cause the Company irreparable harm,
which cannot be adequately compensated by money damages, and (y) if the Company elects to prevent
the Executive from breaching such provisions by obtaining an injunction against the Executive,
there is a reasonable probability of the Company’s eventual success on the merits. The Executive
consents and agrees that if the Executive commits any such breach or threatens to commit any
breach, the Company shall be entitled to temporary and permanent injunctive relief from a court of
competent jurisdiction, in addition to, and not in lieu of, such other remedies as may be available
to the Company for such breach, including the recovery of money damages. If any of the provisions
of this Section 5 are determined to be wholly or partially unenforceable, the Executive hereby
agrees that this Agreement or any provision hereof may be reformed so that it is enforceable to the
maximum extent permitted by law. If any of the provisions of this Section 5 are determined to be
wholly or partially unenforceable in any jurisdiction, such determination shall not be a bar to or
in any way diminish the Company’s right to enforce any such covenant in any other jurisdiction.

     6. Non-Exclusivity of Rights. Except as provided in Section 4(a)(ii), nothing in this
Agreement shall prevent or limit the Executive’s continuing or future participation in any plan,
program, policy or practice provided by the Company or any of the Affiliated Group and for which
the Executive may qualify, nor, subject to Section 9(g), shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement with the Company or
any of the Affiliated Group. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any contract or agreement
with the Company or any of the Affiliated Group at or subsequent to the Date of Termination shall
be payable in accordance with such plan, policy, practice or program or contract or agreement
except as explicitly modified by this Agreement.

     7. No Duty to Mitigate. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and except as specifically provided in Section
4(a)(iii), such amounts shall not be reduced whether or not the Executive obtains other employment.

13

 

     8. Assignment; Successors.

     (a) No Assignment. This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive other than by will or the
laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s legal representatives. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.

     (b) Successors. The Company shall cause any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all or a substantial portion
of its business and/or assets to assume expressly and agree to perform this Agreement immediately
upon such succession in the same manner and to the same extent that the Company would be required
to perform it if no such succession had taken place.

     9. Miscellaneous.

     (a) Governing Law; Captions; Amendments. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without reference to principles of
conflict of laws. The Parties hereto irrevocably agree to submit to the jurisdiction and venue of
the courts of the State of Delaware in any Delaware Proceeding. In the event of a Delaware
Proceeding, the Company shall pay all of the Executive’s reasonable travel expenses incurred by him
for the Executive’s travel between the Executive’s principal residence and/or principal place of
business at such time and Delaware in connection with such Delaware Proceeding. The captions of
this Agreement are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement executed by the
Parties hereto or their respective successors and legal representatives.

     (b) Notices. All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other Party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

If to the Executive:

At the address most recently on file for the Executive at the Company at the time of such notice.

If to the Company:

Offshore Logistics, Inc.

2000 W. Sam Houston Parkway South, Suite 1700

Houston, Texas 77042

Attention: President and Chief Executive Officer

14

 

With a Copy to:

Gardere Wynne Sewell LLP

1000 Louisiana, Suite 3400

Houston, Texas 77002-5011

Attention: N. L. Stevens III

or to such other address as either Party shall have furnished to the other Party in writing in
accordance herewith. Notice and communications shall be effective when actually received by the
addressee.

     (c) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

     (d) Withholding. Notwithstanding any other provision of this Agreement, the Company
may withhold from any amounts payable or benefits provided under this Agreement any Federal, state,
local and foreign taxes as shall be required to be withheld pursuant to any applicable law or
regulation.

     (e) No Waiver. The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any right the Executive or
the Company may have hereunder, shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement.

     (f) Press Release. The Parties agree that the Company may issue a press release and
may otherwise publicly disclose the Executive’s employment with the Company.

     (g) Director’s and Officer’s Insurance. The Company shall provide the Executive with
Director’s and Officer’s insurance coverage, including indemnification, on terms no less favorable
than the terms of the coverage provided to similarly situated current and former directors and
officers of the Company. In the event that the validity of this Agreement is challenged (other
than by the Executive or the Executive’s representatives), the Executive’s reasonable expenses
incurred therewith shall be reimbursed by the Company.

     (h) Representations and Understandings. The Executive hereby represents and warrants
to the Company that the Executive is not party to any contract, understanding, agreement or policy,
whether or not written, with the Executive’s current employer (or any other previous employer) or
otherwise, that would be breached by the Executive’s entering into, or performing services under,
this Agreement, and that the Executive is fully able to assume the duties and responsibilities set
forth in this Agreement without restrictions of any kind. The Executive further represents that
the Executive has disclosed to the Company in writing all material threatened, pending, or actual
claims that are unresolved and still outstanding as of the Effective Date, in each case, against
the Executive of which the Executive is aware, if any, as a result of the Executive’s employment
with the Executive’s current employer (or any other previous employer) or the Executive’s
membership on any boards of directors.

15

 

     (i) Entire Agreement; Conflicts. This Agreement and the other agreements referred to
herein, constitute the entire agreement between the Parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understanding, both written and oral. In the
event of direct conflict between the provisions of this Agreement and any Company policies or
practices, the provisions of this Agreement shall control.

     (j) Counterparts. This Agreement may be executed by facsimile and in multiple
counterparts, each of which shall constitute an original and all of which shall constitute one and
the same document.

     (k) Section 280G Limitation on Payments.

     (i) In the event that all or any portion of the benefits provided under this Agreement,
either alone or together with other payments and benefits that the Executive receives or is
then entitled to receive from the Company or any member of the Affiliated Group, would
constitute a “parachute payment” within the meaning of Section 280G of the Code, the Company
shall reduce such payments and benefits provided to the Executive under this Agreement to
the extent necessary so that no portion thereof shall be subject to the excise tax imposed
by Section 4999 of the Code; but only if, by reason of such reduction, the net after-tax
benefit to the Executive shall exceed the net after-tax benefit if such reduction were not
made. “Net after-tax benefit” for these purposes shall mean (A) the total amount payable to
the Executive under this Agreement (and all other payments and benefits which the Executive
receives or is then entitled to receive from the Company or any member of the Affiliated
Group) that would constitute a “parachute payment” within the meaning of Section 280G of the
Code, less (B) the amount of federal income taxes payable with respect to the foregoing
calculated at the Executive’s applicable marginal income tax rate for each year in which the
foregoing shall be paid to the Executive (based upon the rate in effect for such year as set
forth in the Code at the time of the payment under this Agreement), less (C) the amount of
excise taxes imposed with respect to the payments and benefits described in (A) above by
Section 4999 of the Code. The amount of any reduction made under this Section 9(k) in the
payment to which the Executive is entitled under this Agreement is hereinafter referred to
as the “Relinquished Amount.”

     (ii) All determinations required to be made under this Section 9(k), including whether
and when a Relinquished Amount shall be imposed and the amount of such Relinquished Amount,
shall be made by the Company’s independent auditing firm used immediately prior to the
Change of Control (the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Company and the Executive. The Company shall provide any and all
information, records and documents relating to Executive’s compensation and benefits paid or
payable by the Company as may be reasonably requested by the Accounting Firm in connection
with its determination of the Relinquished Amount. In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting the Change of
Control, the Executive shall appoint another nationally recognized accounting firm to make
the determinations required hereunder (which accounting firm shall then be referred to as
the Accounting

16

 

Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by
the Company.

     (iii) Notwithstanding anything herein to the contrary, expressed or implied, the
Company’s obligations to the Executive pursuant to this Section 9(k) shall be limited to
providing to the Executive payments and benefits in accordance with the determinations of
the Accounting Firm. The Company shall not be liable for any inaccuracies in the
determination of the Relinquished Amount by such Accounting Firm.

     (l) Section 409A Compliance. The Parties acknowledge that Section 409A of the Code
was enacted pursuant to the American Jobs Creation Act of 2004, generally effective with respect to
amounts deferred after January 1, 2005, and only limited guidance has been issued by the Internal
Revenue Service with respect to the application of Code Section 409A to certain arrangements, such
as this Agreement. The Internal Revenue Service has indicated that it will provide further
guidance regarding interpretation and application of Section 409A of the Code during 2005. The
Parties acknowledge that the full effect of Section 409A of the Code on potential payments pursuant
to this Agreement cannot be determined at the time that the Parties are entering into this
Agreement. The Parties agree to work together in good faith in an effort to comply with Section
409A of the Code based on further guidance issued by the Internal Revenue Service from time to
time, provided that the Company shall not be required to assume any increased economic burden.

     10. Definitions. As used in this Agreement, the following terms shall have the
respective meanings assigned to them below:

     (a) “Accrued Amounts” shall mean:

     (i) in the event termination of the Executive’s employment occurs at any time other
than a Change of Control Period, the sum of (1) the Executive’s Annual Base Salary through
the Date of Termination, to the extent not theretofore paid, (2) the product of (x) the
Target Bonus and (y) a fraction (which, for purposes of clarity, shall equal less than 1),
the numerator of which is the number of days in the then-current fiscal year through the
Date of Termination, and the denominator of which is 365, (3) the Executive’s business
expenses that are reimbursable pursuant to this Agreement but have not been reimbursed by
the Company as of the Date of Termination, (4) any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon) and any accrued but
unused vacation allowances for the year in which the Date of Termination occurs, and (5) any
Annual Bonus earned prior to the Termination Date but unpaid; or

     (ii) in the event termination of the Executive’s employment occurs during a Change of
Control Period, the sum of (1) the Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (2) the product of (x) the higher of (I) the
Recent Annual Bonus and (II) the Annual Bonus paid or payable, including any bonus or
portion thereof which has been earned but deferred (and annualized for any fiscal year
consisting of less than twelve full months or during which the Executive was employed for
less than twelve full months or during which the Executive was employed

17

 

for less than twelve full months), for the most recently completed fiscal year during
the Employment Period, if any (such higher amount being referred to as the “Highest Annual
Bonus”) and (y) a fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of which is 365, (3) the
Executive’s business expenses that are reimbursable pursuant to this Agreement but have not
been reimbursed by the Company as of the Date of Termination, (4) any compensation
previously deferred by the Executive (together with any accrued interest or earnings
thereon) and any accrued vacation pay, in each case to the extent not therefore paid, and
(5) any Annual Bonus earned prior to the Termination Date but unpaid.

     (b) “Affiliated Group” shall mean any entity controlled by, controlling or under common
control with the Company.

     (c) “Agreement” is defined in the Preamble to this Agreement.

     (d) “Annual Base Salary” is defined in Section 2(a).

     (e) “Annual Bonus” is defined in Section 2(b).

     (f) “Board” shall mean the Board of Directors of the Company.

     (g) “Cause” shall mean:

     (i) the Executive’s willful failure to substantially perform the Executive’s duties
under this Agreement, or the Executive’s willful failure to perform specific directives of
the President and Chief Executive Officer of the Company, which directives are consistent
with the scope and nature of the Executive’s duties as set forth in Section 1(d) hereof,
other than any such failure resulting from incapacity due to physical or mental illness,
which failure has continued for a period of at least 30 days following delivery to the
Executive of a written demand for substantial performance specifying the manner in which the
Executive has failed hereunder; or

     (ii) the Executive’s commission of malfeasance, fraud, or dishonesty, or the
Executive’s willful and material violation of Company policies; or

     (iii) the Executive’s indictment or formal charge for, and subsequent conviction of, or
plea of guilty or nolo contendere to, a felony, or a misdemeanor involving moral turpitude;
or

     (iv) the Executive’s material breach of Section 5 of this Agreement.

A termination of employment of the Executive shall not be deemed to be for “Cause” unless
and until there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than a majority of the entire membership of the
Board at a meeting of the Board called and held for such purpose, finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct described in one or more
of the clauses in Section 10(g) above, and specifying the particulars thereof.

18

 

     (h) “Change of Control” shall mean:

     (i) the acquisition by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (x) the
then outstanding shares of common stock of the Company (the “Outstanding Company Common
Stock”) or (y) the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the “Outstanding Company
Voting Securities”); provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change of Control: (A) any acquisition
directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (D) any acquisition by any corporation pursuant to
a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this
Section 10(h)(i); or

     (ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s stockholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or

     (iii) consummation by the Company of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company or the
acquisition of assets of another corporation (a “Business Combination”), in each case,
unless, following such Business Combination, (A) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50.1% of, respectively, the
then outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one or more
subsidiaries ) in substantially the same proportions as their ownership, immediately prior
to such Business Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan
(or related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly 35% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the Business
Combination, and

19

 

(C) at least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the Board, providing for such
Business Combination; or

     (iv) approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

     (i) “Change of Control Effective Date” shall mean the first date during the Employment Period
on which a Change of Control occurs. Anything in this Agreement to the contrary notwithstanding,
if a Change of Control occurs and if the Executive’s employment with the Company is terminated
prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by
the Executive that such termination of employment (1) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (2) otherwise arose in
connection with or anticipation of a Change of Control, then for all purposes of this Agreement the
“Change of Control Effective Date” shall mean the date immediately prior to the date of such
termination of employment.

     (j) “Change of Control Period” shall mean the greater of (i) the period commencing on the
Change of Control Effective Date and ending on the Termination Date in effect on the Change of
Control Effective Date, and (ii) the period commencing on the Change of Control Effective Date and
ending on the second anniversary of the Change of Control Effective Date.

     (k) “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (l) “Committee” shall mean the Compensation Committee of the Company.

     (m) “Company” shall mean Offshore Logistics, Inc., a Delaware corporation, and any successor
to its business and/or assets that assumes and agrees to perform this Agreement by operation of
law, or otherwise.

     (n) “Comparable Offer” shall mean a binding offer of employment by the Company to the
Executive on terms substantially the same as the terms of this Agreement, or on terms more
beneficial to the Executive, including, without limitation, terms and provisions regarding (i) the
Executive’s position, title, duties, authority, and responsibilities, (ii) base salary, annual
bonus, options, restricted shares, severance payments and other compensation provided to the
Executive, and (iii) health and medical, welfare, retirement, deferred compensation, perquisite,
fringe benefit and other benefit plans in which the Executive will be eligible for participation.

     (o) “Competitive Business” shall mean any person or entity (including any joint venture,
partnership, firm, corporation, or limited liability company) that engages in any principal or
significant business of the Company or any member of the Affiliated Group as of the Date of
Termination (or any material or significant business being actively pursued as of the Date of
Termination that the Company or any member of the Affiliated Group enters into during the
Restricted Period).

     (p) “Confidential Information” shall mean any and all secret or confidential information,
knowledge or data relating to the Company and the Affiliated Group and their

20

 

businesses (including, without limitation, any proprietary and not publicly available
information concerning any processes, methods, trade secrets, research or secret data, costs, names
of users or purchasers of their respective products or services, business methods, operating
procedures or programs or methods of promotion and sale) that the Executive obtains during the
Executive’s employment by the Company and the Affiliated Group that is not public knowledge.

     (q) “Date of Termination” means (i) if the Executive’s employment is terminated by the Company
for Cause or by the Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein within 30 days of such notice, as the case may be; (ii) if the
Executive’s employment is terminated by the Company, other than for Cause or Disability, the date
on which the Company notifies the Executive of such termination; (iii) if the Executive voluntarily
resigns without Good Reason, the date on which the Executive notifies the Company of such
termination; (iv) if the Executive’s employment is terminated by reason of death, the date of death
of the Executive; (v) if the Executive’s employment is terminated by the Company due to Disability,
the Disability Effective Date; or (vi) if the Executive’s employment is terminated by the Executive
or the Company as a result of a Notice of Non-Renewal, the end of the applicable Employment Period.

     (r) “Delaware Proceeding” shall mean any action or proceeding brought under, with respect to
or in connection with this Agreement in the courts of Delaware.

     (s) “Developments” shall mean any and all inventions, ideas, trade secrets, technology,
devices, discoveries, improvements, processes, developments, designs, know how, show-how, data,
computer programs, algorithms, formulae, works of authorship, works modifications, trademarks,
trade names, documentation, techniques, designs, methods, trade secrets, technical specifications,
technical data, concepts, expressions, patents, patent rights, copyrights, moral rights, and all
other intellectual property rights or other developments whatsoever.

     (t) “Disability” shall mean the inability of the Executive to perform the Executive’s duties
with the Company on a full-time basis for 150 consecutive days during the Employment Period as a
result of incapacity due to mental or physical illness, which is determined to be total and
permanent by a licensed physician selected by the Company or its insurers and reasonably acceptable
to the Executive or the Executive’s legal representative. If the Parties cannot agree on a
licensed physician, each Party shall select a licensed physician and the two physicians shall
select a third who shall be the approved licensed physician for these purposes.

     (u) “Disability Effective Date” is defined in Section 3(a).

     (v) “Effective Date” is defined in the Preamble to this Agreement.

     (w) “Employment Period” is defined in Section 1(a)(iii).

     (x) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     (y) “Executive” is defined in the Preamble to this Agreement.

     (z) “Extended Employment Period” is defined in Section 1(a)(ii).

21

 

     (aa) “Good Reason” shall mean, during any Change of Control Period and in the absence of the
Executive’s consent, (i) any reduction in the position or duties of the Executive, (ii) any failure
by the Company to comply with Section 2 hereof, or (iii) the relocation of the Executive’s job
location to a location more than fifty (50) miles from New Iberia, Louisiana.

     (bb) “Highest Annual Bonus” is defined in Section 10(a)(ii).

     (cc) “Incentive Plan” shall mean the Company’s 2004 Stock Incentive Plan and any successor
plan, as each may be amended.

     (dd) “Initial Employment Period” is defined in Section 1(a)(i).

     (ee) “Notice of Non-Renewal” is defined in Section 1(a)(ii).

     (ff) “Notice of Termination” shall mean a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated, and (iii) if the Date of Termination is
other than the date of receipt of such notice, specifies the termination date (which date shall be
not more than thirty days after the giving of such notice).

     (gg) “Other Benefits” is defined in Section 4(a)(ii) and Section 4(c).

     (hh) “Party” shall mean the Company and the Executive, individually, and “Parties” shall mean
the Company and the Executive collectively.

     (ii) “Proceeding” shall mean any action, suit or proceeding, whether civil, criminal,
administrative, investigative or otherwise.

     (jj) “Recent Annual Bonus” shall mean the Executive’s highest Annual Bonus for the last three
fiscal years prior to the Change of Control Effective Date (annualized in the event that the
Executive is not employed by the Company for the whole of such fiscal year).

     (kk) “Renewal Date” is defined in Section 1(a)(iii).

     (ll) “Restricted Period” shall mean the period from the Effective Date through the date
eighteen (18) months following the Date of Termination; provided, however, that there shall be no
Restricted Period in the event that the termination of the Executive’s employment occurs during a
Change of Control Period.

     (mm) “Restricted Shares” is defined in Section 2(d).

     (nn) “Stock Options” is defined in Section 2(c).

     (oo) “Target Bonus” is defined in Section 2(b).

     (pp) “Termination Date” shall mean May 31, 2007, or such later date to which the Employment
Period of this Agreement is extended in accordance with the terms of Section 1(a).

22

 

          IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, the Company has
caused this Agreement to be executed in its name and on its behalf, as of the Effective Date.

	 	 	 	 	 
	 

	 	“EXECUTIVE”	 	 
	 
	 	 	 	 
	 

	 	 

Michael R. Suldo
	 	 
	 
	 	 	 	 
	 

	 	“COMPANY”	 	 
	 
	 	 	 	 
	 

	 	OFFSHORE LOGISTICS, INC.	 	 
	 
	 	 	 	 
	 

	 	 

William E. Chiles
	 	 
	 

	 	President and Chief Executive Officer	 	 

23exv4w1

 

 

COPANO ENERGY, L.L.C.

COPANO ENERGY FINANCE CORPORATION

AND

THE GUARANTORS NAMED ON THE SIGNATURE PAGE HEREOF

 

8.125% SENIOR NOTES DUE 2016

 

INDENTURE

Dated as of February 7, 2006

 

U.S. BANK NATIONAL ASSOCIATION,

As Trustee

 

 

 

CROSS-REFERENCE TABLE*

	 	 	 	 	 
	Trust Indenture	 	Indenture
	Act Section	 	Section
	310(a)(1)
	 	 	7.10	 
	(a)(2)
	 	 	7.10	 
	(a)(3)
	 	 	N/A	 
	(a)(4)
	 	 	N/A	 
	(a)(5)
	 	 	7.10	 
	(b)
	 	 	7.10	 
	(c)
	 	 	N/A	 
	311(a)
	 	 	7.11	 
	(b)
	 	 	7.11	 
	(c)
	 	 	N/A	 
	312(a)
	 	 	2.05	 
	(b)
	 	 	11.03	 
	(c)
	 	 	11.03	 
	313(a)
	 	 	7.06	 
	(b)(1)
	 	 	7.06	 
	(b)(2)
	 	 	7.06, 7.07	 
	(c)
	 	 	7.06, 11.02	 
	(d)
	 	 	7.06	 
	314(a)
	 	 	4.03, 4.04, 11.02	 
	(b)
	 	 	N/A	 
	(c)(1)
	 	 	11.04	 
	(c)(2)
	 	 	11.04	 
	(c)(3)
	 	 	N/A	 
	(d)
	 	 	N/A	 
	(e)
	 	 	11.05	 
	(f)
	 	 	N/A	 
	315(a)
	 	 	7.01	 
	(b)
	 	 	7.05, 11.02	 
	(c)
	 	 	7.01	 
	(d)
	 	 	7.01	 
	(e)
	 	 	6.11	 
	316(a)(last sentence)
	 	 	2.08	 
	(a)(1)(A)
	 	 	6.05	 
	(a)(1)(B)
	 	 	6.04	 
	(a)(2)
	 	 	N/A	 
	(b)
	 	 	6.07	 
	(c)
	 	 	9.04	 
	317(a)(1)
	 	 	6.08	 
	(a)(2)
	 	 	6.09	 
	(b)
	 	 	2.04	 
	318(a)
	 	 	11.01	 
	(b)
	 	 	N/A	 
	(c)
	 	 	11.01	 

 

			
	 	 	N/A means not applicable.
	 
	 	 	*This Cross-Reference Table is not part of the Indenture.

i

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	1	 
	 

	 	Section 1.01.
	 	Definitions.
	 	 	1	 
	 

	 	Section 1.02.
	 	Other Definitions.
	 	 	24	 
	 

	 	Section 1.03.
	 	Incorporation by Reference of Trust Indenture Act.
	 	 	25	 
	 

	 	Section 1.04.
	 	Rules of Construction.
	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 2 THE NOTES	 	 	26	 
	 

	 	Section 2.01.
	 	Form and Dating.
	 	 	26	 
	 

	 	Section 2.02.
	 	Execution and Authentication.
	 	 	26	 
	 

	 	Section 2.03.
	 	Registrar and Paying Agent.
	 	 	27	 
	 

	 	Section 2.04.
	 	Paying Agent to Hold Money in Trust.
	 	 	27	 
	 

	 	Section 2.05.
	 	Noteholder Lists.
	 	 	27	 
	 

	 	Section 2.06.
	 	Transfer and Exchange.
	 	 	28	 
	 

	 	Section 2.07.
	 	Replacement Notes.
	 	 	28	 
	 

	 	Section 2.08.
	 	Outstanding Notes.
	 	 	28	 
	 

	 	Section 2.09.
	 	Temporary Notes.
	 	 	29	 
	 

	 	Section 2.10.
	 	Cancellation.
	 	 	29	 
	 

	 	Section 2.11.
	 	Defaulted Interest.
	 	 	29	 
	 

	 	Section 2.12.
	 	CUSIP Numbers.
	 	 	29	 
	 

	 	Section 2.13.
	 	Issuance of Additional Notes.
	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 3 REDEMPTION AND PREPAYMENT	 	 	30	 
	 

	 	Section 3.01.
	 	Notices to Trustee.
	 	 	30	 
	 

	 	Section 3.02.
	 	Selection of Notes to Be Redeemed.
	 	 	30	 
	 

	 	Section 3.03.
	 	Notice of Redemption.
	 	 	31	 
	 

	 	Section 3.04.
	 	Effect of Notice of Redemption.
	 	 	32	 
	 

	 	Section 3.05.
	 	Deposit of Redemption Price.
	 	 	32	 
	 

	 	Section 3.06.
	 	Notes Redeemed in Part.
	 	 	33	 
	 

	 	Section 3.07.
	 	Optional Redemption.
	 	 	33	 
	 

	 	Section 3.08.
	 	Mandatory Redemption.
	 	 	34	 
	 

	 	Section 3.09.
	 	Offer to Purchase by Application of Excess Proceeds.
	 	 	34	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 4 COVENANTS	 	 	35	 
	 

	 	Section 4.01.
	 	Payment of Notes
	 	 	35	 
	 

	 	Section 4.02.
	 	Maintenance of Office or Agency
	 	 	36	 
	 

	 	Section 4.03.
	 	Reports
	 	 	37	 
	 

	 	Section 4.04.
	 	Compliance Certificate
	 	 	37	 
	 

	 	Section 4.05.
	 	Taxes
	 	 	38	 
	 

	 	Section 4.06.
	 	Stay, Extension and Usury Laws
	 	 	38	 
	 

	 	Section 4.07.
	 	Limitation on Restricted Payments
	 	 	38	 
	 

	 	Section 4.08.
	 	Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries
	 	 	41	 
	 

	 	Section 4.09.
	 	Limitation on Incurrence of Indebtedness and
Issuance of Preferred Stock
	 	 	43	 

ii

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 

	 	Section 4.10.
	 	Limitation on Asset Sales.
	 	 	46	 
	 

	 	Section 4.11.
	 	Limitation on Transactions with Affiliates
	 	 	47	 
	 

	 	Section 4.12.
	 	Limitation on Liens
	 	 	49	 
	 

	 	Section 4.13.
	 	Additional Subsidiary Guarantees
	 	 	49	 
	 

	 	Section 4.14.
	 	Corporate Existence
	 	 	50	 
	 

	 	Section 4.15.
	 	Offer to Repurchase Upon Change of Control
	 	 	50	 
	 

	 	Section 4.16.
	 	No Inducements
	 	 	52	 
	 

	 	Section 4.17.
	 	Permitted Business Activities.
	 	 	53	 
	 

	 	Section 4.18.
	 	Sale and Leaseback Transactions.
	 	 	53	 
	 

	 	Section 4.19.
	 	Covenant Termination.
	 	 	53	 
	 

	 	Section 4.20.
	 	Designation of Restricted and Unrestricted Subsidiaries.
	 	 	53	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 5 SUCCESSORS	 	 	54	 
	 

	 	Section 5.01.
	 	Merger, Consolidation, or Sale of Assets
	 	 	54	 
	 

	 	Section 5.02.
	 	Successor Substituted
	 	 	56	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 6 DEFAULTS AND REMEDIES	 	 	56	 
	 

	 	Section 6.01.
	 	Events of Default
	 	 	56	 
	 

	 	Section 6.02.
	 	Acceleration
	 	 	58	 
	 

	 	Section 6.03.
	 	Other Remedies
	 	 	59	 
	 

	 	Section 6.04.
	 	Waiver of Past Defaults
	 	 	59	 
	 

	 	Section 6.05.
	 	Control by Majority
	 	 	59	 
	 

	 	Section 6.06.
	 	Limitation on Suits
	 	 	60	 
	 

	 	Section 6.07.
	 	Rights of Holders of Notes to Receive Payment
	 	 	60	 
	 

	 	Section 6.08.
	 	Collection Suit by Trustee
	 	 	60	 
	 

	 	Section 6.09.
	 	Trustee May File Proofs of Claim
	 	 	60	 
	 

	 	Section 6.10.
	 	Priorities
	 	 	61	 
	 

	 	Section 6.11.
	 	Undertaking for Costs
	 	 	61	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 7 TRUSTEE	 	 	62	 
	 

	 	Section 7.01.
	 	Duties of Trustee
	 	 	62	 
	 

	 	Section 7.02.
	 	Rights of Trustee
	 	 	63	 
	 

	 	Section 7.03.
	 	Individual Rights of Trustee
	 	 	63	 
	 

	 	Section 7.04.
	 	Trustee’s Disclaimer
	 	 	64	 
	 

	 	Section 7.05.
	 	Notice of Defaults
	 	 	64	 
	 

	 	Section 7.06.
	 	Reports by Trustee to Holders of the Notes
	 	 	64	 
	 

	 	Section 7.07.
	 	Compensation and Indemnity
	 	 	64	 
	 

	 	Section 7.08.
	 	Replacement of Trustee
	 	 	65	 
	 

	 	Section 7.09.
	 	Successor Trustee by Merger, etc.
	 	 	66	 
	 

	 	Section 7.10.
	 	Eligibility; Disqualification
	 	 	66	 
	 

	 	Section 7.11.
	 	Preferential Collection of Claims Against Issuers
	 	 	67	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE	 	 	67	 
	 

	 	Section 8.01.
	 	Option to Effect Legal Defeasance or Covenant Defeasance
	 	 	67	 
	 

	 	Section 8.02.
	 	Legal Defeasance and Discharge
	 	 	67	 
	 

	 	Section 8.03.
	 	Covenant Defeasance
	 	 	68	 
	 

	 	Section 8.04.
	 	Conditions to Legal or Covenant Defeasance
	 	 	68	 
	 

	 	Section 8.05.
	 	Deposited Money and Government Securities to
be Held in Trust; Other Miscellaneous Provisions
	 	 	70	 

iii

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 

	 	Section 8.06.
	 	Repayment to Issuers
	 	 	70	 
	 

	 	Section 8.07.
	 	Reinstatement
	 	 	71	 
	 

	 	Section 8.08.
	 	Discharge.
	 	 	71	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER	 	 	72	 
	 

	 	Section 9.01.
	 	Without Consent of Holders of Notes
	 	 	72	 
	 

	 	Section 9.02.
	 	With Consent of Holders of Notes
	 	 	73	 
	 

	 	Section 9.03.
	 	Compliance with Trust Indenture Act
	 	 	74	 
	 

	 	Section 9.04.
	 	Revocation and Effect of Consents
	 	 	74	 
	 

	 	Section 9.05.
	 	Notation on or Exchange of Notes
	 	 	75	 
	 

	 	Section 9.06.
	 	Trustee to Sign Amendments, etc.
	 	 	75	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 10 GUARANTEES OF NOTES	 	 	75	 
	 

	 	Section 10.01.
	 	Subsidiary Guarantees
	 	 	75	 
	 

	 	Section 10.02.
	 	[Reserved]
	 	 	76	 
	 

	 	Section 10.03.
	 	Guarantors May Consolidate, etc., on Certain Terms
	 	 	77	 
	 

	 	Section 10.04.
	 	Releases of Subsidiary Guarantees
	 	 	77	 
	 

	 	Section 10.05.
	 	[Reserved]
	 	 	78	 
	 

	 	Section 10.06.
	 	Limitation on Guarantor Liability
	 	 	78	 
	 

	 	Section 10.07.
	 	“Trustee” to Include Paying Agent
	 	 	78	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 11 MISCELLANEOUS	 	 	78	 
	 

	 	Section 11.01.
	 	Trust Indenture Act Controls
	 	 	78	 
	 

	 	Section 11.02.
	 	Notices
	 	 	78	 
	 

	 	Section 11.03.
	 	Communication by Holders of Notes with Other Holders of Notes
	 	 	79	 
	 

	 	Section 11.04.
	 	Certificate and Opinion as to Conditions Precedent
	 	 	80	 
	 

	 	Section 11.05.
	 	Statements Required in Certificate or Opinion
	 	 	80	 
	 

	 	Section 11.06.
	 	Rules by Trustee and Agents
	 	 	80	 
	 

	 	Section 11.07.
	 	No Personal Liability of Directors, Officers, Employees
and Unitholders
	 	 	80	 
	 

	 	Section 11.08.
	 	Governing Law
	 	 	81	 
	 

	 	Section 11.09.
	 	No Adverse Interpretation of Other Agreements
	 	 	81	 
	 

	 	Section 11.10.
	 	Successors
	 	 	81	 
	 

	 	Section 11.11.
	 	Severability
	 	 	81	 
	 

	 	Section 11.12.
	 	Table of Contents, Headings, etc.
	 	 	81	 
	 

	 	Section 11.13.
	 	Counterparts
	 	 	81	 

iv

 

APPENDIX AND ANNEXES

	 	 	 	 	 
	RULE 144A/REGULATION S APPENDIX	 	App. - 1
	 
	 	 	 	 
	 

	 	EXHIBIT 1 Form of Initial Note	 	 
	 

	 	EXHIBIT A Form of Exchange	 	 
	 

	 	Note or Private Exchange Note	 	 
	 
	 	 	 	 
	ANNEX A

	 	Form of Supplemental Indenture
	 	A - 1
	 
	 	 	 	 
	ANNEX B

	 	Form of Registration Rights Agreement
	 	B - 1

v

 

     This Indenture, dated as of February 7, 2006 is among Copano Energy, L.L.C., a Delaware
limited liability company (the “Company”), Copano Energy Finance Corporation, a Delaware
corporation (“Finance Corp.” and, together with the Company, the “Issuers”), the guarantors listed
on the signature page hereof (each, a “Guarantor” and, collectively, the “Guarantors”) and U.S.
Bank National Association, a national banking association, as trustee (the “Trustee”).

     The Issuers, the Guarantors and the Trustee agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders of the Issuers’ Initial Notes, Exchange Notes,
Private Exchange Notes and Additional Notes:

ARTICLE 1

DEFINITIONS AND INCORPORATION

BY REFERENCE

Section 1.01. Definitions.

     “Acquired Debt” means, with respect to any specified Person:

     (1) Indebtedness of any other Person existing at the time such other Person was merged
with or into or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other Person
merging with or into, or becoming a Subsidiary of, such specified Person, but excluding
Indebtedness which is extinguished, retired or repaid in connection with such Person merging
with or becoming a Subsidiary or such specified Person; and

     (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified
Person.

     “Additional Interest” means all Additional Interest then owing pursuant to Section 5 of the
Registration Rights Agreement referred to in clause (1) of the definition of “Registration Rights
Agreement” in the Appendix. Unless the context indicates otherwise, all references to “interest”
in this Indenture or the Notes shall be deemed to include any Additional Interest.

     “Additional Notes” means, subject to the Company’s compliance with Section 4.09, 8.125% Senior
Notes due 2016 issued from time to time after the Initial Issuance Date under the terms of this
Indenture (other than pursuant to Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than
Exchange Notes or Private Exchange Notes issued pursuant to an exchange offer for other Notes
outstanding under this Indenture).

     “Administrative and Operating Services Agreement” means the Administrative and Operating
Services Agreement, dated as of November 1, 2004, by and among Copano/Operations, Inc., a Texas
corporation, the Company and the additional entities named therein.

     “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For
purposes of this definition, “control,” as used with respect to any Person, means the

 

 

possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided, however, that beneficial ownership of 10% or more of the Voting
Stock of a Person will be deemed to be control by the other Person; and further, that any third
Person which also beneficially owns 10% or more of the Voting Stock of a specified Person shall not
be deemed to be an Affiliate of either the specified Person or the other Person merely because of
such common ownership in such specified Person. For purposes of this definition, the terms
“controlling,” “controlled by” and “under common control with” have correlative meanings.

     “Agent” means any Registrar or Paying Agent.

     “Agent Members” has the meaning provided in the Appendix.

     “Applicable Law,” except as the context may otherwise require, means all applicable laws,
rules, regulations, ordinances, judgments, decrees, injunctions, writs and orders of any court or
governmental or congressional agency or authority and rules, regulations, orders, licenses and
permits of any United States federal, state, municipal, regional, or other governmental body,
instrumentality, agency or authority.

     “Applicable Procedures” means, with respect to any transfer or exchange of beneficial
interests in a Global Note, the rules and procedures of the Depository that apply to such transfer
and exchange.

     “Asset Sale” means:

     (1) the sale, lease, conveyance or other disposition of any properties or assets
(including by way of a sale and leaseback transaction); provided, however, that the
disposition of all or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by the provisions of Section 4.15
and/or the provisions of Section 5.01 and not by the provisions of Section 4.10; and

     (2) the issuance of Equity Interests in any of the Company’s Restricted Subsidiaries or
the sale of Equity Interests in any of its Restricted Subsidiaries.

Notwithstanding the preceding, the following items will not be deemed to be Asset Sales:

     (1) any single transaction or series of related transactions that involves properties
or assets having a fair market value of less than $10.0 million;

     (2) a transfer of assets between or among any of the Company and its Restricted
Subsidiaries,

     (3) an issuance or sale of Equity Interests by a Restricted Subsidiary to the Company
or to another Restricted Subsidiary;

     (4) the sale, lease or other disposition of equipment, inventory, accounts receivable
or other properties or assets in the ordinary course of business;

2

 

     (5) the sale or other disposition of cash or Cash Equivalents, Hedging Contracts or
other financial instruments in the ordinary course of business;

     (6) a Restricted Payment that is permitted by Section 4.07 or a Permitted Investment;

     (7) any trade or exchange by the Company or any Restricted Subsidiary of properties or
assets for properties or assets owned or held by another Person, provided that the fair
market value of the properties or assets traded or exchanged by the Company or such
Restricted Subsidiary (together with any cash) is reasonably equivalent to the fair market
value of the properties or assets (together with any cash) to be received by the Company or
such Restricted Subsidiary, and provided further that any net cash received must be applied
in accordance with the provisions of Section 4.10;

     (8) the creation or perfection of a Lien that is not prohibited by Section 4.12;

     (9) dispositions in connection with Permitted Liens;

     (10) surrender or waiver of contract rights or the settlement, release or surrender of
contract, tort or other claims of any kind; and

     (11) the grant in the ordinary course of business of any non-exclusive license of
patents, trademarks, registrations therefor and other similar intellectual property.

     “Attributable Debt” in respect of a sale and leaseback transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be extended. Such
present value shall be calculated using a discount rate equal to the rate of interest implicit in
such transaction, determined in accordance with GAAP. As used in the preceding sentence, the “net
rental payments” under any lease for any such period shall mean the sum of rental and other
payments required to be paid with respect to such period by the lessee thereunder, excluding any
amounts required to be paid by such lessee on account of maintenance and repairs, insurance, taxes,
assessments, water rates or similar charges. In the case of any lease that is terminable by the
lessee upon payment of penalty, such net rental payment shall also include the amount of such
penalty, but no rent shall be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated.

     “Available Cash” has the meaning assigned to such term in the LLC Agreement, as in effect on
the date of this Indenture.

     “Bankruptcy Law” means Title 11, United States Code, as may be amended from time to time, or
any similar federal or state law for the relief of debtors.

     “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that in calculating the beneficial ownership of any particular “person”
(as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to
have beneficial ownership of all securities that such “person” has the right to acquire

3

 

by conversion or exercise of other securities, whether such right is currently exercisable or
is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns”
and “Beneficially Owned” have correlative meanings.

“Board of Directors” means:

     (1) with respect to Finance Corp., the board of directors of Finance Corp.;

     (2) with respect to the Company, the Board of Directors of the Company or any
authorized committee thereof; and

     (3) with respect to any other Person, the board or committee of such Person serving a
similar function.

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the applicable Person to have been duly adopted by the Board of Directors of such
Person and to be in full force and effect on the date of such certification, and delivered to the
Trustee.

     “Business Day” means each day that is not a Saturday, Sunday or other day on which banking
institutions in Houston, Texas or in New York, New York or another place of payment are authorized
or required by law to close.

     “Capital Lease Obligation” means, at the time any determination is to be made, the amount of
the liability in respect of a capital lease that would at that time be required to be capitalized
on a balance sheet in accordance with GAAP.

“Capital Stock” means:

     (1) in the case of a corporation, corporate stock;

     (2) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;

     (3) in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and

     (4) any other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing Person.

“Cash Equivalents” means:

     (1) United States dollars;

     (2) securities issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States government

4

 

(provided that the full faith and credit of the United States is pledged in support of
those securities) having maturities of not more than six months from the date of
acquisition;

     (3) certificates of deposit and eurodollar time deposits with maturities of one year or
less from the date of acquisition, bankers’ acceptances with maturities not exceeding one
year and overnight bank deposits, in each case, with any lender party to the Credit
Agreement or with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of “B” or better;

     (4) repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (2) and (3) above entered into with any
financial institution meeting the qualifications specified in clause (3) above;

     (5) commercial paper having the highest rating obtainable from Moody’s or S&P and in
each case maturing within six months after the date of acquisition; and

     (6) money market funds at least 95% of the assets of which constitute Cash Equivalents
of the kinds described in clauses (1) through (5) of this definition.

“Change of Control” means the occurrence of any of the following:

     (1) the direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets (including Capital Stock of the
Restricted Subsidiaries) of the Company and its Restricted Subsidiaries taken as a whole, to
any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), which
occurrence is followed by a Rating Decline within 90 days of the consummation of such
transaction;

     (2) the adoption of a plan relating to the liquidation or dissolution of the Company;

     (3) the consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” (as that term is used in Section
13(d)(3) of the Exchange Act) becomes the Beneficial Owner, directly or indirectly, of more
than 50% of the Voting Stock of the Company, measured by voting power
rather than number of shares, units or the like, which occurrence is followed by a Rating Decline within 90 days
thereof; or

     (4) the first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors, which occurrence is followed by a Rating Decline
within 90 days thereof.

     Notwithstanding the preceding, a conversion of the Company or any of its Restricted
Subsidiaries from a limited liability company, corporation, limited partnership or other form of
entity to a limited liability company, corporation, limited partnership or other form of entity or
an exchange of all of the outstanding Equity Interests in one form of entity for Equity Interests
for another form of entity shall not constitute a Change of Control, so long as following such

5

 

conversion or exchange the “persons” (as that term is used in Section 13(d)(3) of the Exchange
Act) who Beneficially Owned the Capital Stock of the Company immediately prior to such transactions
continue to Beneficially Own in the aggregate more than 50% of the Voting Stock of such entity, or
continue to Beneficially Own sufficient Equity Interests in such entity to elect a majority of its
directors, managers, trustees or other persons serving in a similar capacity for such entity, and,
in either case no “person” Beneficially Owns more than 50% of the Voting Stock of such entity.

     “Clearstream” means Clearstream Banking, société anonyme, or any successor securities clearing
agency.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any
successor statute.

     “Commission” or “SEC” means the Securities and Exchange Commission.

     “Consolidated Cash Flow” means, with respect to any specified Person for any period, the
Consolidated Net Income of such Person for such period plus:

     (1) an amount equal to any net loss realized by such Person or any of its Restricted
Subsidiaries in connection with an Asset Sale, to the extent such losses were deducted in
computing such Consolidated Net Income; plus

     (2) provision for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was deducted in
computing such Consolidated Net Income; plus

     (3) consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including, without
limitation, amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers’ acceptance financings), and net of the effect of all
payments made or received pursuant to interest rate Hedging Contracts, to the extent that
any such expense was deducted in computing such Consolidated Net Income; plus

     (4) depreciation and amortization (including amortization of intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period), impairment and
other non-cash expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future period or amortization
of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation and amortization,
impairment and other non-cash expenses were deducted in computing such Consolidated Net
Income; plus

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     (5) unrealized non-cash losses resulting from foreign currency balance sheet
adjustments required by GAAP to the extent such losses were deducted in computing such
Consolidated Net Income; plus

     (6) all extraordinary, unusual or non-recurring items of gain or loss, or revenue or
expense; minus

     (7) non-cash items increasing such Consolidated Net Income for such period, other than
items that were accrued in the ordinary course of business;

in each case, on a consolidated basis and determined in accordance with GAAP.

     “Consolidated Net Income” means, with respect to any specified Person for any period, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP, provided that:

     (1) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting will be included, but only to the
extent of the amount of dividends or distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;

     (2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted Subsidiary
of that Net Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly, by operation
of the terms of its charter or any judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, partners or
members;

     (3) the cumulative effect of a change in accounting principles will be excluded;

     (4) unrealized losses and gains under derivative instruments included in the
determination of Consolidated Net Income, including, without limitation those resulting from
the application of Statement of Financial Accounting Standards No. 133 will be excluded; and

     (5) any nonrecurring charges relating to any premium or penalty paid, write off of
deferred finance costs or other charges in connection with redeeming or retiring any
Indebtedness prior to its Stated Maturity will be excluded.

     “Consolidated Net Tangible Assets” means, with respect to any Person at any date of
determination, the aggregate amount of total assets included in such Person’s most recent quarterly
or annual consolidated balance sheet prepared in accordance with GAAP less applicable reserves
reflected in such balance sheet, after deducting the following amounts: (a) all current
liabilities reflected in such balance sheet, and (b) all goodwill, trademarks, patents, unamortized
debt discounts and expenses and other like intangibles reflected in such balance sheet.

7

 

     “Continuing Directors” means, as of any date of determination, any member of the Board of
Directors of the Company who:

     (1) was a member of such Board of Directors on the date of this Indenture; or

     (2) was nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board at the time of such
nomination or election.

     “Corporate Trust Office of the Trustee” means the office of the Trustee in the City of New
York at which at any time its corporate trust business shall be administered, which office at the
date hereof is located at 100 Wall Street, Suite 1600, New York, New York 10005, Attn: Corporate
Trust Department, or such other address in the City of New York as the Trustee may designate from
time to time by notice to the Holders and the Issuers, or the principal corporate trust office in
the City of New York of any successor Trustee (or such other address as a successor Trustee may
designate from time to time by notice to the Holders and the Issuers).

     “Credit Agreement” means that certain Credit Agreement, dated as of August 1, 2005, among the
Company, Bank of America, N.A., as Administrative Agent and L/C Issuer, and the other lenders party
thereto, including any related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, restated, modified, renewed,
refunded, replaced or refinanced from time to time.

     “Credit Facilities” means one or more debt facilities (including, without limitation, the
Credit Agreement), commercial paper facilities or secured capital markets financings, in each case
with banks or other institutional lenders or institutional investors providing for revolving credit
loans, term loans, receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such receivables),
letters of credit or secured capital markets financings, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced (including refinancing with any capital markets
transaction) in whole or in part from time to time.

     “Custodian” means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.

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

     “Depository” has the meaning provided in the Appendix.

     “Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any
security into which it is convertible, or for which it is exchangeable, in each case at the option
of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that
would constitute Disqualified Stock solely because the holders of the Capital Stock have the right
to require the Company to repurchase or redeem such Capital Stock upon the occurrence of

8

 

a change of control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with Section 4.07.

     “Domestic Subsidiary” means any Restricted Subsidiary of the Company that was formed under the
laws of the United States or any state of the United States or the District of Columbia.

     “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire
Capital Stock (but excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).

     “Equity Offering” means any public or private sale of Capital Stock (other than Disqualified
Stock) made for cash on a primary basis by the Company after the date of this Indenture, provided
that at any time on or after a Change of Control, any sale of Capital Stock to an Affiliate of the
Company shall not be deemed an Equity Offering.

     “Euroclear” means Euroclear Bank S.A./N.V. or any successor securities clearing agency.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Exchange Notes” has the meaning specified in the Appendix.

     “Existing Indebtedness” means the aggregate principal amount of Indebtedness of the Company
and its Restricted Subsidiaries (other than Indebtedness under the Credit Agreement which is
considered incurred under the first paragraph of Section 4.09 and other than intercompany
indebtedness) in existence on the date of this Indenture, until such amounts are repaid.

     “FERC Subsidiary” means a Restricted Subsidiary of the Company that is subject to the
regulatory jurisdiction of the Federal Energy Regulatory Commission (or any successor thereof).

     “Fixed Charge Coverage Ratio” means with respect to any specified Person for any four-quarter
reference period, the ratio of the Consolidated Cash Flow of such Person for such period to the
Fixed Charges of such Person for such period. In the event that the specified Person or any of its
Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases or redeems any
Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems
preferred stock subsequent to the commencement of the applicable four-quarter reference period and
on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage
Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, guarantee, repayment, repurchase or
redemption of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the
use of the proceeds therefrom as if the same had occurred at the beginning of such period.

9

 

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

     (1) acquisitions that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers, consolidations or otherwise (including acquisitions
of assets used in a Permitted Business), and including in each case any related financing
transactions (including repayment of Indebtedness) during the four-quarter reference period
or subsequent to such reference period and on or prior to the Calculation Date, will be
given pro forma effect as if they had occurred on the first day of the four-quarter
reference period, including any Consolidated Cash Flow and any pro forma expense and cost
reductions that have occurred or are reasonably expected to occur, in the reasonable
judgment of the chief financial or accounting officer of the Company (regardless of whether
those cost savings or operating improvements could then be reflected in pro forma financial
statements in accordance with Regulation S-X promulgated under the Securities Act or any
other regulation or policy of the Commission related thereto);

     (2) the Consolidated Cash Flow attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the Calculation
Date, will be excluded;

     (3) the Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the Calculation
Date, will be excluded, but only to the extent that the obligations giving rise to such
Fixed Charges will not be obligations of the specified Person or any of its Restricted
Subsidiaries following the Calculation Date; and

     (4) interest income reasonably anticipated by such Person to be received during the
applicable four-quarter period from cash or Cash Equivalents held by such Person or any
Restricted Subsidiary of such Person, which cash or Cash Equivalents exist on the
Calculation Date or will exist as a result of the transaction giving rise to the need to
calculate the Fixed Charge Coverage Ratio, will be included.

     “Fixed Charges” means, with respect to any specified Person for any period, the sum, without
duplication, of:

     (1) the consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued (including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of letter of
credit or bankers’ acceptance financings), and net of the effect of all payments made or
received pursuant to interest rate Hedging Contracts; plus

     (2) the consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus

10

 

     (3) any interest expense on Indebtedness of another Person that is guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person
or one of its Restricted Subsidiaries, whether or not such guarantee or Lien is called upon;
plus

     (4) all dividends on any series of preferred securities of such Person or any of its
Restricted Subsidiaries, whether paid or accrued and whether or not in cash, other than
dividends on Equity Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company,

in each case, on a consolidated basis and in accordance with GAAP.

     “GAAP” means generally accepted accounting principles in the United States, which are in
effect on the date of this Indenture.

     “Global Note” has the meaning provided in the Appendix.

     “Government Securities” means direct obligations of, or obligations guaranteed by, the United
States of America for the payment of which guarantee or obligations the full faith and credit of
the United States is pledged.

     The term “guarantee” means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any manner including, without
limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements
in respect thereof, of all or any part of any Indebtedness. When used as a verb, “guarantee” has a
correlative meaning.

     “Guarantors” means each of (a) the Subsidiaries of the Company, other than Finance Corp.,
executing this Indenture as initial Guarantors, (b) any other Restricted Subsidiary of the Company
that executes a supplement to this Indenture in accordance with Section 4.13 or 10.03 hereof and
(c) the respective successors and assigns of such Restricted Subsidiaries, as required under
Article 10 hereof, in each case until such time as any such Restricted Subsidiary shall be released
and relieved of its obligations pursuant to Section 8.02, 8.03 or 10.04 hereof.

“Hedging Contracts“” means, with respect to any specified Person:

     (1) interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements entered into with one of more financial institutions and designed to
protect the Person or any of its Restricted Subsidiaries entering into the agreement against
fluctuations in interest rates with respect to Indebtedness incurred;

     (2) foreign exchange contracts and currency protection agreements entered into with one
of more financial institutions and designed to protect the Person or any of its Restricted
Subsidiaries entering into the agreement against fluctuations in currency exchanges rates
with respect to Indebtedness incurred and not for purposes of speculation;

11

 

     (3) any commodity futures contract, commodity option or other similar agreement or
arrangement designed to protect against fluctuations in the price of Hydrocarbons used,
produced, processed or sold by that Person or any of its Restricted Subsidiaries at the
time; and

     (4) other agreements or arrangements designed to protect such Person or any of its
Restricted Subsidiaries against fluctuations in interest rates, commodity prices or currency
exchange rates,

and in each case are entered into only in the normal course of business and not for speculative
purposes.

     “Holder” or “Noteholder” means a Person in whose name a Note is registered.

     “Hydrocarbons” means crude oil, natural gas, casinghead gas, drip gasoline, natural gasoline,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all constituents, elements or
compounds thereof and products refined or processed therefrom.

     “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent:

          (1) in respect of borrowed money;

          (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit
(or reimbursement agreements in respect thereof);

          (3) in respect of bankers’ acceptances;

          (4) representing Capital Lease Obligations;

          (5) representing the balance deferred and unpaid of the purchase price of any property,
except any such balance that constitutes an accrued expense or trade payable; or

          (6) representing any obligations under Hedging Contracts,

if and to the extent any of the preceding items (other than letters of credit and obligations under
Hedging Contracts) would appear as a liability upon a balance sheet of the specified Person
prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness
of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness
is assumed by the specified Person) and, to the extent not otherwise included, the guarantee by the
specified Person of any Indebtedness of any other Person. For the avoidance of doubt, the term
“Indebtedness” excludes any obligation arising from any agreement providing for indemnities,
purchase price adjustments, holdbacks, contingency payment obligations based on the performance of
the acquired or disposed assets or similar obligations (other than guarantees of Indebtedness)
incurred by the Company or any of its Restricted Subsidiaries in connection with the acquisition or
disposition of assets.

12

 

The amount of any Indebtedness outstanding as of any date will be:

     (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount;

     (2) in the case of obligations under any Hedging Contracts, the termination value of
the agreement or arrangement giving rise to such obligations that would be payable by such
Person at such date; and

     (3) the principal amount of the Indebtedness, together with any interest on the
Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.

“Indenture” means this Indenture, as amended or supplemented from time to time.

“Initial Issuance Date” means February 7, 2006.

“Initial Notes” has the meaning provided in the Appendix.

“Initial Purchasers” has the meaning provided in the Appendix.

     “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s and BBB- (or the equivalent) by S&P.

     “Investments” means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the forms of loans (including guarantees or other
obligations), advances or capital contributions (excluding (1) commission, travel and similar
advances to officers and employees made in the ordinary course of business and (2) advances to
customers in the ordinary course of business that are recorded as accounts receivable on the
balance sheet of the lender), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted
Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company will be
deemed to have made an Investment on the date of any such sale or disposition in an amount equal to
the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of
in an amount determined as provided in the final paragraph of Section 4.07. The acquisition by the
Company or any Subsidiary of the Company of a Person that holds an Investment in a third Person
will be deemed to be an Investment made by the Company or such Subsidiary in such third Person in
an amount equal to the fair market value of the Investment held by the acquired Person in such
third Person on the date of any such acquisition in an amount determined as provided in the final
paragraph of Section 4.07.

     “Joint Venture” means any Person that is not a direct or indirect Subsidiary of the Company in
which the Company or any of its Restricted Subsidiaries makes any Investment.

13

 

     “Legal Holiday” means any calendar day other than a Business Day. If a payment date is a
Legal Holiday, payment may be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.

     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under Applicable Law, including any conditional sale or other title retention agreement,
any lease in the nature thereof, any option or other agreement to sell or give a security interest
in and any filing of or agreement to give any financing statement under the Uniform Commercial Code
(or equivalent statutes) of any jurisdiction other than a precautionary financing statement
respecting a lease not intended as a security agreement.

     “LLC Agreement” means the Second Amended and Restated Limited Liability Company Agreement of
Copano Energy, L.L.C., dated as of November 15, 2004, as in effect on the date of this Indenture
and as such may be further amended, modified or supplemented from time to time.

     “Make Whole Premium” means, with respect to a Note at any time, the excess, if any, of (a) the
present value at such time of (i) the redemption price of such Note at March 1, 2011 pursuant to
Section 3.07(a) plus (ii) any required interest payments due on such Note through March 1, 2011
(except for currently accrued and unpaid interest), computed using a discount rate equal to the
Treasury Rate plus 50 basis points, discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months), over (b) the principal amount of
such Note.

     “Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business
thereof.

     “Net Income” means, with respect to any specified Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect of preferred stock
dividends, excluding, however:

     (1) any gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of
any securities by such Person or the extinguishment of any Indebtedness of such Person; and

     (2) any extraordinary gain (but not loss), together with any related provision for
taxes on such extraordinary gain (but not loss).

     “Net Proceeds” means the aggregate cash proceeds received by the Company or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash
received upon the sale or other disposition of any non-cash consideration received in any Asset
Sale), net of:

     (1) the direct costs relating to such Asset Sale, including, without limitation, legal,
accounting and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale,

14

 

     (2) taxes paid or payable as a result of the Asset Sale, in each case, after
taking into account any available tax credits or deductions and any tax sharing
arrangements,

     (3) amounts required to be applied to the repayment of Indebtedness secured by a Lien
on the properties or assets that were the subject of such Asset Sale, and

     (4) any amounts to be set aside in any reserve established in accordance with GAAP or
any amount placed in escrow, in either case for adjustment in respect of the sale price of
such properties or assets or for liabilities associated with such Asset Sale and retained by
the Company or any of its Restricted Subsidiaries until such time as such reserve is
reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include
only the amount of the reserve so reversed or the amount returned to the Company or its
Restricted Subsidiaries from such escrow arrangement, as the case may be.

     “Non-Recourse Debt” means Indebtedness:

     (1) as to which neither the Company nor any of its Restricted Subsidiaries (a) provides
credit support of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise,
or (c) is the lender;

     (2) no default with respect to which (including any rights that the holders of the
Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would
permit upon notice, lapse of time or both any holder of any other Indebtedness (other than
the Notes) of the Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable
prior to its Stated Maturity; and

     (3) as to which the lenders have been notified in writing that they will not have any
recourse to the stock or assets of the Company or any of its Restricted Subsidiaries except
as contemplated by clause (9) of the definition of Permitted Liens.

     For purposes of determining compliance with Section 4.09, in the event that any Non-Recourse
Debt of any of the Company’s Unrestricted Subsidiaries ceases to be Non-Recourse Debt of such
Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company.

     “Notes” has the meaning specified in the Appendix.

     “Notes Custodian” has the meaning specified in the Appendix.

     “Obligations” means any principal, premium, if any, interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization, whether or not a claim for
post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses,
indemnifications, reimbursement obligations, damages, guarantees, and other liabilities or amounts
payable under the documentation governing any Indebtedness or in respect thereto.

15

 

     “Offering Memorandum” means the offering memorandum of the Issuers dated January 31, 2006
relating to the offering of the Initial Notes.

     “Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer,
any Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or any Vice
President of such Person.

     “Officers’ Certificate” means a certificate signed on behalf of each of the Company and
Finance Corp. by two of its Officers, one of whom must be the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer of the Company or
Finance Corp., as the case may be, that meets the requirements of Section 11.05 hereof.

     “Operating Surplus” has the meaning assigned to such term in the LLC Agreement, as in effect
on the date of this Indenture.

     “Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the
Trustee, that meets the requirements of Section 11.05 hereof. The counsel may be an employee of or
counsel to the Company, any Subsidiary of the Company or the Trustee.

     “Pari Passu Indebtedness” means, with respect to any Excess Proceeds from Asset Sales,
Indebtedness of an Issuer or any Guarantor that ranks equally in right of payment with the Notes or
the Subsidiary Guarantees, as the case may be, and the terms of which require the Company or any of
its Restricted Subsidiaries to apply such Excess Proceeds to offer to repurchase such Indebtedness.

     “Permitted Business” means either (1) gathering, transporting, treating, processing,
marketing, distributing, storing or otherwise handling Hydrocarbons, or activities or services
reasonably related or ancillary thereto including entering into Hedging Contracts to support these
businesses, or (2) any other business that generates gross income that constitutes “qualifying
income” under Section 7704(d) of the Code.

     “Permitted Business Investments” means Investments by the Company or any of its Restricted
Subsidiaries in any Unrestricted Subsidiary of the Company or in any Joint Venture, provided that:

     (1) either (a) at the time of such Investment and immediately thereafter, the Company
could incur $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.09 or (b) such Investment does not exceed the
aggregate amount of Incremental Funds (as defined in Section 4.09) not previously expended
at the time of making such Investment;

     (2) if such Unrestricted Subsidiary or Joint Venture has outstanding Indebtedness at
the time of such Investment, either (a) all such Indebtedness is Non-Recourse Debt or (b)
any such Indebtedness of such Unrestricted Subsidiary or Joint Venture that is recourse to
the Company or any of its Restricted Subsidiaries (which shall include, without limitation,
all Indebtedness of such Unrestricted Subsidiary or Joint Venture for which the Company or
any of its Restricted Subsidiaries may be directly or

16

 

indirectly, contingently or otherwise, obligated to pay, whether pursuant to the terms
of such Indebtedness, by law or pursuant to any guarantee ,including, without limitation,
any “claw-back,” “make-well” or “keep-well” arrangement) could, at the time such Investment
is made, be incurred at that time by the Company and its Restricted Subsidiaries under the
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and

     (3) such Unrestricted Subsidiary’s or Joint Venture’s activities are not outside the
scope of the Permitted Business.

     “Permitted Investments” means:

     (1) any Investment in the Company or in a Restricted Subsidiary of the Company;

     (2) any Investment in Cash Equivalents;

     (3) any Investment by the Company or any Restricted Subsidiary of the Company in a
Person, if as a result of such Investment:

          (a) such Person becomes a Restricted Subsidiary of the Company; or

          (b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its properties or assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company;

     (4) any Investment made as a result of the receipt of non-cash consideration from:

          (a) an Asset Sale that was made pursuant to and in compliance with Section
4.10;

          (b) pursuant to clause (7) of the items deemed not to be Asset Sales under the
definition of “Asset Sale;”

     (5) any Investment in any Person solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company;

     (6) any Investments received in compromise of obligations of trade creditors or
customers that were incurred in the ordinary course of business, including pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade
creditor or customer, or as a result of a foreclosure by the Company or any of its
Restricted Subsidiaries with respect to any secured Investment in default;

     (7) Hedging Contracts;

     (8) Permitted Business Investments; and

17

 

     (9) other Investments in any Person having an aggregate fair market value (measured on
the date each such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this clause (9) that
are at the time outstanding, not to exceed the greater of $25.0 million or 4.0% of the
Company’s Consolidated Net Tangible Assets.

     “Permitted Liens” means:

     (1) Liens securing any Indebtedness under any of the Credit Facilities;

     (2) Liens in favor of the Company or the Guarantors;

     (3) Liens on property of a Person existing at the time such Person is merged with or
into or consolidated with the Company or any Restricted Subsidiary of the Company, provided
that such Liens were in existence prior to the contemplation of such merger or consolidation
and do not extend to any assets other than those of the Person merged into or consolidated
with the Company or the Restricted Subsidiary;

     (4) Liens on property existing at the time of acquisition of the property by the
Company or any Restricted Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such acquisition;

     (5) any interest or title of a lessor to the property subject to a Capital Lease
Obligation;

     (6) Liens on any property or asset acquired, constructed or improved by the Company or
any of its Restricted Subsidiaries (a “Purchase Money Lien”), which (a) are in favor of the
seller of such property or assets, in favor of the Person developing, constructing,
repairing or improving such asset or property, or in favor of the Person that provided the
funding for the acquisition, development, construction, repair or improvement cost, as the
case may be, of such asset or property, (b) are created within 360 days after the
acquisition, development, construction, repair or improvement, (c) secure the purchase price
or development, construction, repair or improvement cost, as the case may be, of such asset
or property in an amount up to 100% of the fair market value (as determined by the Board of
Directors of the Company if such fair market value is $15.0 million or more) of such
acquisition, construction or improvement of such asset or property, and (d) are limited to
the asset or property so acquired, constructed or improved (including the proceeds thereof,
accessions thereto and upgrades thereof);

     (7) Liens existing on the date of this Indenture other than Liens securing the Credit
Facilities;

     (8) Liens to secure the performance of tenders, bids, statutory obligations, surety or
appeal bonds, government contracts, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;

     (9) Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any
Joint Venture owned by the Company or any Restricted Subsidiary of

18

 

the Company to the extent securing Non-Recourse Debt or other Indebtedness of such
Unrestricted Subsidiary or Joint Venture;

     (10) Liens on pipelines or pipeline facilities that arise by operation of law;

     (11) Liens arising under operating agreements, joint venture agreements, partnership
agreements, oil and gas leases, farmout agreements, division orders, contracts for sale,
transportation or exchange of crude oil and natural gas, unitization and pooling
declarations and agreements, area of mutual interest agreements and other agreements arising
in the ordinary course of business of the Company and its Restricted Subsidiaries that are
customary in the Permitted Business;

     (12) Liens upon specific items of inventory, receivables or other goods or proceeds of
the Company or any of its Restricted Subsidiaries securing such Person’s obligations in
respect of bankers’ acceptances or receivables securitizations issued or created for the
account of such Person to facilitate the purchase, shipment or storage of such inventory,
receivables or other goods or proceeds and permitted by Section 4.09;

     (13) Liens securing Obligations of the Issuers or any Guarantor under the Notes or the
Subsidiary Guarantees, as the case may be;

     (14) Liens securing any Indebtedness equally and ratably with all Obligations due under
the Notes or any Subsidiary Guarantee pursuant to a contractual covenant that limits Liens
in a manner substantially similar to Section 4.12;

     (15) Liens to secure performance of Hedging Contracts of the Company or any of its
Restricted Subsidiaries;

     (16) Liens incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company, provided that, after giving effect to any such incurrence, the
aggregate principal amount of all Indebtedness then outstanding and secured by any Liens
incurred pursuant to this clause (16) does not exceed the greater of $15.0 million or 2.5%
of the Company’s Consolidated Net Tangible Assets; and

     (17) any Lien renewing, extending, refinancing or refunding a Lien permitted by clauses
(1) through (15) above, provided that (a) the principal amount of the Indebtedness secured
by such Lien is not increased and (b) no assets encumbered by any such Lien other than the
assets permitted to be encumbered immediately prior to such renewal, extension, refinance or
refund are encumbered thereby.

     After termination of the covenants referred to in the first paragraph of Section 4.19, for
purposes of complying with Section 4.12, the Liens described in clauses (1) and (16) of this
definition of “Permitted Liens” will be Permitted Liens only to the extent those Liens secure
Indebtedness not exceeding, at the time of determination, 10% of the Consolidated Net Tangible
Assets of the Company. Once effective, this 10% limitation on Permitted Liens will continue to
apply during any later period in which the Notes do not have an Investment Grade Rating by both S&P
and Moody’s.

19

 

     “Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its
Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

     (1) the principal amount of such Permitted Refinancing Indebtedness does not exceed the
principal amount of the Indebtedness being extended, refinanced, renewed, replaced, defeased
or refunded (plus all accrued interest on the Indebtedness and the amount of all expenses
and premiums incurred in connection therewith);

     (2) such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;

     (3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes or the Subsidiary Guarantees, such
Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes or the
Subsidiary Guarantees on terms at least as favorable to the Noteholders as those contained
in the documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and

     (4) such Indebtedness is not incurred by a Restricted Subsidiary of the Company if the
Company is the obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.

     Notwithstanding the preceding, any Indebtedness incurred under Credit Facilities pursuant to
Section 4.09 shall be subject only to the refinancing provision in the definition of Credit
Facilities and not pursuant to the requirements set forth in the definition of Permitted
Refinancing Indebtedness.

     “Person” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability company or government or
other entity.

     “Private Exchange” has the meaning provided in the Appendix.

     “Private Exchange Notes” has the meaning provided in the Appendix.

     “Purchase Agreement” has the meaning provided in the Appendix.

     “QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Securities
Act.

     “Rating Category” means:

     (1) with respect to S&P, any of the following categories: AAA, AA, A, BBB, BB, B, CCC,
CC, C and D (or equivalent successor categories); and

20

 

     (2) with respect to Moody’s, any of the following categories: Aaa, Aa, A, Baa, Ba, B,
Caa, Ca, C and D (or equivalent successor categories).

     “Rating Decline” means a decrease in the rating of the Notes by either Moody’s or S&P by one
or more gradations (including gradations within Rating Categories as well as between Rating
Categories). In determining whether the rating of the Notes has decreased by one or more
gradations, gradations within Rating Categories, namely + or – for S&P, and 1, 2, and 3 for
Moody’s, will be taken into account; for example, in the case of S&P, a rating decline either from
BB+ to BB or BB- to B+ will constitute a decrease of one gradation.

     “Registered Exchange Offer” has the meaning provided in the Appendix.

     “Registration Rights Agreement” has the meaning provided in the Appendix.

     “Regulation S” has the meaning provided in the Appendix.

     “Reporting Default” means a Default described in Section 6.01(d).

     “Responsible Officer,” when used with respect to the Trustee, means any officer within the
corporate trust department of the Trustee having direct responsibility for the administration of
this Indenture.

     “Restricted Global Note” has the meaning provided in the Appendix.

     “Restricted Investment” means an Investment other than a Permitted Investment.

     “Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an
Unrestricted Subsidiary. Notwithstanding anything in this Indenture to the contrary, Finance Corp.
shall be a Restricted Subsidiary of the Company.

     “Rule 144A” has the meaning provided in the Appendix.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
or any successor to the rating agency business thereof.

     “Sale and Leaseback Transaction” means an arrangement relating to property owned by the
Company or a Restricted Subsidiary on the Initial Issuance Date or thereafter acquired by the
Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such
property to a Person and the Company or a Restricted Subsidiary leases it from such Person.

     “SEC” or “Commission” means the Securities and Exchange Commission.

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

21

 

     “Senior Debt” means

     (1) all Indebtedness of the Company or any of its Restricted Subsidiaries outstanding
under Credit Facilities and all obligations under Hedging Contracts with respect thereto;

     (2) any other Indebtedness of the Company or any of its Restricted Subsidiaries
permitted to be incurred under the terms of this Indenture, unless the instrument under
which such Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes or any Subsidiary Guarantee; and

     (3) all Obligations with respect to the items listed in the preceding clauses (1) and
(2).

     Notwithstanding anything to the contrary in the preceding sentence, Senior Debt will not
include:

	 	(a)	 	any intercompany Indebtedness of the Company or any of its Restricted
Subsidiaries to the Company or any of its Affiliates; or
	 
	 	(b)	 	any Indebtedness that is incurred in violation of this Indenture.

For the avoidance of doubt, “Senior Debt” will not include any trade payables or taxes owed or
owing by the Company or any Restricted Subsidiary.

     “Shelf Registration Statement” has the meaning provided in the Appendix.

     “Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as
defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as
such Regulation is in effect on the date of this Indenture.

     “Stated Maturity” means, with respect to any installment of interest or principal on any
series of Indebtedness, the date on which the payment of interest or principal was scheduled to be
paid in the original documentation governing such Indebtedness, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

     “Subsidiary” means, with respect to any specified Person:

     (1) any corporation, association or other business entity (other than a partnership or
limited liability company) of which more than 50% of the total voting power of Voting Stock
is at the time owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and

     (2) any partnership (whether general or limited) or limited liability company (a) the
sole general partner or member of which is such Person or a Subsidiary of such

22

 

Person, or (b) if there is more than a single general partner or member, either (x) the
only managing general partners or managing members of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof) or (y) such Person owns or
controls, directly or indirectly, a majority of the outstanding general partner interests,
member interests or other Voting Stock of such partnership or limited liability company,
respectively, plus in the case of both subclauses (x) and (y) of this clause (b) such Person
consolidates the financial results of such partnership or limited liability company with its
own financial results in accordance with GAAP.

     “Subsidiary Guarantees” means the joint and several guarantees issued by all of the Guarantors
pursuant to Article 10 hereof.

     “TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) and the rules and
regulations thereunder, as in effect on the date on which this Indenture is qualified under the TIA
(except as provided in Section 9.01(i) and 9.03 hereof).

     “Transfer Restricted Securities” has the meaning provided in the Appendix.

     “Treasury Rate” means the yield to maturity at the time of computation of United States
Treasury securities with a constant maturity (as compiled and published in the most recent Federal
Reserve Statistical Release H.15(519) which has become publicly available at least two Business
Days prior to the date fixed for redemption (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly equal to the period
from the redemption date to March 1, 2011; provided, however, that if such period is not equal to
the constant maturity of a United States Treasury security for which a weekly average yield is
given, the Company shall obtain the Treasury Rate by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities
for which such yields are given, except that if the period from the redemption date to March 1,
2011 is less than one year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used. The Company will (a)
calculate the Treasury Rate on the second Business Day preceding the applicable redemption date and
(b) prior to such redemption date file with the Trustee an Officers’ Certificate setting forth the
Make Whole Premium and the Treasury Rate and showing the calculation of each in reasonable detail.

     “Trustee” means the party named as such above until a successor replaces it in accordance with
the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

     “Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to
time.

     “Unrestricted Subsidiary” means any Subsidiary of the Company (other than Finance Corp.) that
is designated by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:

23

 

     (1) except to the extent permitted by subclause (2)(b) of the definition of “Permitted
Business Investments,” has no Indebtedness other than Non-Recourse Debt owing to any Person
other than the Company or any of its Restricted Subsidiaries;

     (2) is not party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons who are not
Affiliates of the Company;

     (3) is a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity
Interests or (b) to maintain or preserve such Person’s financial condition or to cause such
Person to achieve any specified levels of operating results; and

     (4) has not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries.

     Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced
to the Trustee by filing with the Trustee a Board Resolution giving effect to such designation and
an Officers’ Certificate certifying that such designation complied with the preceding conditions
and was permitted by Section 4.07. If, at any time, any Unrestricted Subsidiary would fail to meet
the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will
be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.09, the Company will
be in default of such covenant.

     “Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at
the time entitled (without regard to the occurrence of any contingency) to vote in the election of
the Board of Directors of such Person.

     “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing:

     (1) the sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment; by

     (2) the then outstanding principal amount of such Indebtedness.

Section 1.02. Other Definitions.

	 	 	 	 	 
	Term	 	Defined in Section
	 
	“Affiliate Transaction”

	 	 	4.11	 
	“Appendix”

	 	 	2.01	 

24

 

	 	 	 	 	 
	Term	 	Defined in Section
	 
	“Asset Sale Offer”

	 	 	3.09	 
	“Change of Control Offer”

	 	 	4.15	 
	“Change of Control Payment”

	 	 	4.15	 
	“Change of Control Purchase Date”

	 	 	4.15	 
	“Change of Control Settlement Date”

	 	 	4.15	 
	“Covenant Defeasance”

	 	 	8.03	 
	“Discharge”

	 	 	8.08	 
	“Event of Default”

	 	 	6.01	 
	“Excess Proceeds”

	 	 	4.10	 
	“Incremental Funds”

	 	 	4.07	 
	“incur”

	 	 	4.09	 
	“Legal Defeasance”

	 	 	8.02	 
	“Offer Amount”

	 	 	3.09	 
	“Offer Period”

	 	 	3.09	 
	“Paying Agent”

	 	 	2.03	 
	“Payment Default”

	 	 	6.01	 
	“Permitted Debt”

	 	 	4.09	 
	“Registrar”

	 	 	2.03	 
	“Restricted Payments”

	 	 	4.07	 
	“Settlement Date”

	 	 	3.09	 
	“Termination Date”

	 	 	3.09	 

Section 1.03. Incorporation by Reference of Trust Indenture Act.

     Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. Any terms incorporated in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.

     Section 1.04. Rules of Construction.

     Unless the context otherwise requires:

     (1) a term has the meaning assigned to it;

     (2) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

     (3) “or” is not exclusive;

     (4) words in the singular include the plural, and in the plural include the singular;

     (5) provisions apply to successive events and transactions;

25

 

     (6) references to sections of or rules under the Securities Act or the Exchange Act
shall be deemed to include substitute, replacement or successor sections or rules adopted by
the SEC from time to time; and

     (7) “herein,” “hereof” and other words of similar import refer to this Indenture as a
whole (as amended or supplemented from time to time) and not to any particular Article,
Section or other subdivision

ARTICLE 2

THE NOTES

Section 2.01. Form and Dating.

     Provisions relating to the Initial Notes, the Private Exchange Notes and the Exchange Notes
are set forth in the Rule 144A/Regulation S Appendix attached hereto (the “Appendix”) which is
hereby incorporated in and expressly made part of this Indenture. The Initial Notes and the
Trustee’s certificate of authentication therefor shall be substantially in the form of Exhibit 1 to
the Appendix which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Notes, the Private Exchange Notes and the Trustee’s certificate of authentication therefor
shall be substantially in the form of Exhibit A to the Appendix, which is hereby incorporated in
and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which an Issuer is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable to the Company).
Each Note shall be dated the date of its authentication. The terms of the Notes set forth in the
Appendix are part of the terms of this Indenture.

Section 2.02. Execution and Authentication.

     An Officer shall sign the Notes on behalf of each Issuer by manual or facsimile signature.

     If an Officer whose signature is on a Note no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless.

     A Note shall not be valid until an authorized signatory of the Trustee manually signs the
certificate of authentication on the Note. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.

     On the Initial Issuance Date, the Trustee shall authenticate and deliver $225.0 million of
8.125% Senior Notes due 2016 and, at any time and from time to time thereafter, the Trustee shall
authenticate and deliver Notes for original issue in an aggregate principal amount specified in
such order, in each case upon a written order of the Issuers. Such order shall specify the amount
of the Notes to be authenticated, the date on which the original issue of Notes is to be
authenticated and to whom the Notes shall be registered and delivered and, in the case of an
issuance of Additional Notes pursuant to Section 2.13 after the Initial Issuance Date, shall
certify that such issuance is in compliance with Section 4.09.

     The Trustee may appoint an authenticating agent reasonably acceptable to the Issuers to
authenticate the Notes. Unless limited by the terms of such appointment, an authenticating agent

26

 

may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An authenticating agent has
the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

Section 2.03. Registrar and Paying Agent.

     The Issuers shall maintain an office or agency where Notes may be presented for registration
of transfer or for exchange (the “Registrar”) and an office or agency in New York, New York where
Notes may be presented for payment (the “Paying Agent”). The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Issuers may have one or more co-registrars and
one or more additional paying agents. The term “Registrar” includes any co-registrar, and the term
“Paying Agent” includes any additional paying agent.

     The Issuers shall enter into an appropriate agency agreement with any Registrar or Paying
Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent. The Issuers shall
notify the Trustee of the name and address of any such agent. If the Issuers fail to maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07. The Company or any Subsidiary may act as Paying
Agent or Registrar.

     The Issuers initially appoint the Trustee as Registrar and Paying Agent in connection with the
Notes at the Corporate Trust Office of the Trustee.

Section 2.04. Paying Agent to Hold Money in Trust.

     Prior to 11:00 a.m. New York City time, on each due date of the principal and interest on any
Note, an Issuer shall deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Issuers shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of
Noteholders or the Trustee all money held by the Paying Agent for the payment of principal of or
interest on the Notes and shall notify the Trustee of any default by the Issuers in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by
it as Paying Agent and hold it as a separate trust fund. The Issuers at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.

Section 2.05. Noteholder Lists.

     The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Noteholders. If the Trustee is not the
Registrar, the Issuers shall furnish to the Trustee, in writing at least five Business Days before
each interest payment date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names and addresses of
Noteholders.

27

 

Section 2.06. Transfer and Exchange.

     The Notes shall be issued in registered form and shall be transferable only upon the surrender
of a Note for registration of transfer. When a Note is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of this Indenture and Section 8-401(a) of the Uniform Commercial Code
are met. When Notes are presented to the Registrar with a request to exchange them for an equal
principal amount of Notes of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. The Issuers may require payment of a sum sufficient to
cover any taxes, assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchange or transfer pursuant to Section 3.06, 4.10, 4.15 or
9.05).

Section 2.07. Replacement Notes.

If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note
has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code
are met and the Holder satisfies any other reasonable requirements of the Trustee. If required by
the Trustee or the Issuers, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Issuers and the Trustee to protect the Issuers, the Trustee, the Paying Agent and the
Registrar from any loss which any of them may suffer if a Note is replaced. The Issuers and the
Trustee may charge the Holder for their expenses in replacing a Note. In the event any such Note
shall have matured, instead of issuing a new Note, the Trustee may pay the same without surrender
thereof upon the Holder furnishing the Issuers and the Trustee with indemnity satisfactory to them
and complying with such other reasonable regulations as the Trustee may prescribe and paying such
reasonable expenses as the Issuer and the Trustee may incur in connection therewith.

     Every replacement Note is an additional obligation of the Issuers.

Section 2.08. Outstanding Notes.

     Notes outstanding at any time are all Notes authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in this Section as not
outstanding. Except as otherwise provided in TIA §316(a), a Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.

     If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the
Trustee, any provider of an indemnity bond and the Issuers receive proof satisfactory to them that
the replaced Note is held by a bona fide purchaser.

     If the Paying Agent segregates and holds in trust, in accordance with this Indenture, by 11:00
a.m. New York time, on a redemption date or other maturity date money sufficient to pay all
principal, premium, if any, interest and Additional Interest, if any, payable on that date with
respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on

28

 

and after that date such Notes (or portions thereof) cease to be outstanding and interest and
Additional Interest, if any, on them cease to accrue.

Section 2.09. Temporary Notes.

     Until definitive Notes are ready for delivery, the Issuers may prepare and the Trustee shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive
Notes but may have variations that the Issuers consider appropriate for temporary Notes. Without
unreasonable delay, the Issuers shall prepare and the Trustee shall authenticate definitive Notes
and deliver them in exchange for temporary Notes.

Section 2.10. Cancellation.

     An Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and
the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel (subject to the record
retention requirements of the Exchange Act) all Notes surrendered for registration of transfer,
exchange, payment or cancellation. Upon written request, the Trustee will deliver a certificate of
such cancellation to the Issuers unless the Issuers direct the Trustee to deliver canceled Notes to
the Issuers instead. The Issuers may not issue new Notes to replace Notes they have redeemed, paid
or delivered to the Trustee for cancellation.

Section 2.11. Defaulted Interest.

     If the Issuers default in a payment of interest on the Notes, the Issuers shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The
Issuers may pay the defaulted interest to the Persons who are Noteholders on a subsequent special
record date. The Issuers shall fix or cause to be fixed any such special record date and payment
date to the reasonable satisfaction of the Trustee and shall promptly mail to each Noteholder a
notice that states the special record date, the payment date and the amount of defaulted interest
to be paid.

Section 2.12. CUSIP Numbers.

     The Issuers in issuing the Notes may use “CUSIP” numbers and corresponding “ISINs” (if then
generally in use) and, if so, the Trustee shall use “CUSIP” numbers and corresponding “ISINs” in
notices of redemption as a convenience to Holders; provided, however, that any such notice may
state that no representation is made as to the correctness of such numbers either as printed on the
Notes or as contained in any notice of a redemption and that reliance may be placed only on the
other identification numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers.

Section 2.13. Issuance of Additional Notes.

     The Issuers shall be entitled, subject to their compliance with Section 4.09, to issue
Additional Notes under this Indenture which shall have identical terms as the Initial Notes issued
on the Initial Issuance Date, other than with respect to the date of issuance and issue price. The
Initial Notes issued on the Initial Issuance Date, any Additional Notes and all Exchange Notes or

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Private Exchange Notes issued in exchange therefor shall be treated as a single class for all
purposes under this Indenture, including, without limitation, waivers, consents, directions,
declarations, amendments, redemptions and offers to purchase.

     With respect to any Additional Notes, the Issuers shall set forth in an Officers’ Certificate,
which shall be delivered to the Trustee, the following information:

     (1) the aggregate principal amount of such Additional Notes to be authenticated and
delivered pursuant to this Indenture;

     (2) the issue price, the issue date and the CUSIP number and any corresponding ISIN of
such Additional Notes; provided, however, that no Additional Notes may be issued at a price
that would cause such Additional Notes to have “original issue discount” within the meaning
of Section 1273 of the Code; and

     (3) whether such Additional Notes shall be Transfer Restricted Securities and issued in
the form of Initial Notes as set forth in Exhibit 1 to the Appendix to this Indenture or
shall be issued in the form of Exchange Notes as set forth in Exhibit A to the Appendix.

ARTICLE 3

REDEMPTION AND PREPAYMENT

Section 3.01. Notices to Trustee.

     If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Section
3.07 hereof, they shall furnish to the Trustee, at least five Business Days (unless a shorter
period shall be agreeable to the Trustee) before the date of giving notice of the redemption
pursuant to Section 3.03, an Officers’ Certificate setting forth (i) the clause of Section 3.07
pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount
of Notes to be redeemed, (iv) the redemption price, and (v) whether it requests the Trustee to give
notice of such redemption. Any such notice may be cancelled at any time prior to the mailing of
notice of such redemption to any Holder and shall thereby be void and of no effect.

Section 3.02. Selection of Notes to Be Redeemed.

     If less than all of the Notes are to be redeemed at any time, the Trustee shall select the
Notes to be redeemed among the Holders of the Notes as follows: (1) if the Notes are listed on any
national securities exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed; or (2) if the Notes are not listed on any
national securities exchange, on a pro rata basis. In the event of partial redemption other than
on a pro rata basis, the particular Notes to be redeemed shall be selected, not less than five (5)
Business Days (unless a shorter period shall be agreeable to the Trustee) prior to the giving of
notice of the redemption pursuant to Section 3.03, by the Trustee from the outstanding Notes not
previously called for redemption.

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     The Trustee shall promptly notify the Issuers in writing of the Notes selected for redemption
and, in the case of any Note selected for partial redemption, the principal amount thereof to be
redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed.
Provisions of this Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption.

     The provisions of the two preceding paragraphs of this Section 3.02 shall not apply with
respect to any redemption affecting only a Global Note, whether such Global Note is to be redeemed
in whole or in part. In case of any such redemption in part, the unredeemed portion of the
principal amount of the Global Note shall be in an authorized denomination.

Section 3.03. Notice of Redemption.

     Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days
before a redemption date, except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a Legal Defeasance, Covenant Defeasance
or Discharge, the Issuers shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered address.

     The notice shall identify the Notes to be redeemed and shall state:

     (a) the redemption date;

     (b) the redemption price or, if the redemption price is not then determinable, the
manner in which it is to be determined;

     (c) if any Note is being redeemed in part, the portion of the principal amount of such
Note to be redeemed and that, after the redemption date upon surrender of such Note, a new
Note or Notes in a principal amount equal to the unredeemed portion shall be issued in the
name of the Holder upon cancellation of the original Note;

     (d) the name and address of the Paying Agent;

     (e) that Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;

     (f) that, unless the Issuers default in making such redemption payment, interest and
Additional Interest, if any, on Notes called for redemption cease to accrue on and after the
redemption date and the only remaining right of the Holders of such Notes is to receive
payment of the redemption price upon surrender to the Paying Agent of the Notes redeemed;

     (g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the
Notes called for redemption are being redeemed; and

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     (h) that no representation is made as to the correctness or accuracy of the CUSIP or
ISIN number, if any, listed in such notice or printed on the Notes.

     If any of the Notes to be redeemed is in the form of a Global Note, then the Issuers shall
modify such notice to the extent necessary to accord with the procedures of the Depository
applicable to redemption.

     At the Issuers’ request, the Trustee shall give the notice of optional redemption in the
Issuers’ names and at their expense; provided, however, that the Issuers shall have delivered to
the Trustee, as provided in Section 3.01, an Officers’ Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as provided in the second
preceding paragraph.

Section 3.04. Effect of Notice of Redemption.

     Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the redemption price. A
notice of redemption may not be conditional. If mailed in the manner provided for in Section 3.03,
the notice of redemption shall be conclusively presumed to have been given whether or not a Holder
receives such notice. Failure to give timely notice or any defect in the notice shall not affect
the validity of the redemption.

Section 3.05. Deposit of Redemption Price.

     Prior to 11:00 a.m., New York City time, on the redemption date, the Issuers shall deposit
with the Paying Agent (or, if the Company or a Subsidiary thereof is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 2.04 hereof) money sufficient in same day
funds to pay the redemption price of and accrued interest and Additional Interest, if any, on all
Notes to be redeemed on that date. The Paying Agent shall promptly return to the Issuers any money
deposited with the Paying Agent by an Issuer in excess of the amounts necessary to pay the
redemption price of and accrued interest and Additional Interest, if any, on all Notes to be
redeemed.

     If the Issuers comply with the provisions of the preceding paragraph, on and after the
redemption date, interest and Additional Interest, if any, shall cease to accrue on the Notes or
the portions of Notes called for redemption whether or not such Notes are presented for payment,
and the only remaining right of the Holders of such Notes shall be to receive payment of the
redemption price upon surrender to the Paying Agent of the Notes redeemed. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the failure of an Issuer
to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, and to the extent lawful, on any interest and
Additional Interest, if any, not paid on such unpaid principal, in each case at the rate provided
in the Notes and in Section 4.01 hereof.

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Section 3.06. Notes Redeemed in Part.

     Upon surrender of a Note that is redeemed in part, the Issuers shall issue in the name of the
Holder and the Trustee shall authenticate for the Holder at the expense of the Issuers a new Note
equal in principal amount to the unredeemed portion of the Note surrendered.

Section 3.07. Optional Redemption.

     (a) Except as set forth in clauses (b) and (c) of this Section 3.07, the Issuers shall not
have the option to redeem the Notes pursuant to this Section 3.07 prior to March 1, 2011.
On or after March 1, 2011, the Issuers shall have the option to redeem the Notes, in
whole or in part at any time, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning on March 1 of the
years indicated below:

	 	 	 	 	 
	YEAR	 	PERCENTAGE
	2011
	 	 	104.0625	%
	2012
	 	 	102.7083	%
	2013
	 	 	101.3542	%
	2014 and thereafter
	 	 	100.0000	%

     (b) Notwithstanding the provisions of clause (a) of this Section 3.07, at any time prior to
March 1, 2009, the Issuers may on one or more occasions redeem up to 35% of the aggregate
principal amount of Notes (including any Additional Notes) issued under this Indenture at a
redemption price of 108.125% of the principal amount thereof, plus accrued and unpaid interest and
Additional Interest, if any, to the redemption date, with the net cash proceeds of one or more
Equity Offerings, provided that:

     (1) at least 65% of the aggregate principal amount of Notes (including any Additional
Notes) issued under this Indenture remains outstanding immediately after the occurrence of
each such redemption (excluding any Notes held by the Company and its Subsidiaries); and

     (2) each such redemption occurs within 120 days of the date of the closing of each such
Equity Offering.

     (c) Prior to March 1, 2011, the Issuers may redeem all or part of the Notes at a redemption
price equal to the sum of:

	 	(1)	 	100% of the principal amount thereof, plus
	 
	 	(2)	 	accrued and unpaid interest, if any, to the redemption date, plus
	 
	 	(3)	 	the Make Whole Premium at the redemption date.

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     (d) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of
Section 3.01 through Section 3.06 hereof.

Section 3.08. Mandatory Redemption.

     Except as set forth under Sections 4.10 and 4.15 hereof, neither of the Issuers shall be
required to make mandatory redemption or sinking fund payments with respect to the Notes or to
repurchase the Notes at the option of the Holders.

Section 3.09. Offer to Purchase by Application of Excess Proceeds.

     In the event that, pursuant to Section 4.10 hereof, the Company shall be required to commence
an offer to all Holders to purchase Notes (an “Asset Sale Offer”), it shall follow the procedures
specified below.

     The Asset Sale Offer shall remain open for a period of 20 Business Days following its
commencement and no longer, except to the extent that a longer period is required by Applicable Law
(the “Offer Period”). No later than five Business Days after the termination of the Offer Period
(the “Settlement Date”), the Company shall purchase and pay for the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the “Offer Amount”) or, if less than the
Offer Amount has been tendered, all Notes validly tendered in response to the Asset Sale Offer.
Payment for any Notes so purchased shall be made in the manner prescribed in the Notes.

     Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a
notice to each of the Holders, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset
Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the
terms of the Asset Sale Offer, shall state:

     (a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section
4.10 hereof and the length of time the Asset Sale Offer shall remain open, including the
time and date the Asset Sale Offer will terminate (the “Termination Date”);

     (b) the Offer Amount and the purchase price;

     (c) that any Note not tendered or accepted for payment shall continue to accrue
interest and Additional Interest, if any;

     (d) that, unless the Company defaults in making such payment, any Note accepted for
payment pursuant to the Asset Sale Offer shall cease to accrue interest and Additional
Interest, if any, after the Settlement Date;

     (e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may
only elect to have all of such Note purchased and may not elect to have only a portion of
such Note purchased;

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     (f) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer
shall be required to surrender the Note, with the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Note completed, to the Company or a Paying Agent at the
address specified in the notice, before the Termination Date;

     (g) that Holders shall be entitled to withdraw their election if the Company or the
Paying Agent, as the case may be, receives, prior to the Termination Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;

     (h) that, if the aggregate principal amount of Notes surrendered by Holders, and Pari
Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount the
Company is required to repurchase, the Trustee shall select the Notes and Pari Passu
Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal
amount of tendered Notes and Pari Passu Indebtedness (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased); and

     (i) that Holders whose Notes were purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer).

     If any of the Notes subject to an Asset Sale Offer is in the form of a Global Note, then the
Company shall modify such notice to the extent necessary to accord with the procedures of the
Depository applicable to repurchases.

     Promptly after the Termination Date, the Company shall, to the extent lawful, accept for
payment Notes or portions thereof tendered pursuant to the Asset Sale Offer in the aggregate
principal amount required by Section 4.10 hereof, and prior to the Settlement Date it shall
deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section 3.09 and Section
4.10. Prior to 11:00 a.m., New York City time, on the Settlement Date, the Company or the Paying
Agent, as the case may be, shall mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and
the Company shall issue a new Note, and the Trustee shall authenticate and mail or deliver such new
Note to such Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on or
before the Settlement Date.

ARTICLE
4

COVENANTS

     Section 4.01. Payment of Notes.

     The Issuers shall pay or cause to be paid the principal of, premium, if any, interest and
Additional Interest, if any, on the Notes on the dates and in the manner provided in the Notes.

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Principal, premium, if any, interest and Additional Interest, if any, shall be considered paid on
the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
11:00 a.m., New York City time, on the due date money deposited by an Issuer or a Guarantor in
immediately available funds and designated for and sufficient to pay all principal, premium, if
any, interest and Additional Interest, if any, then due.

     The Issuers shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at the rate equal to the interest rate on the Notes to the
extent lawful; and they shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest and Additional Interest, if any
(without regard to any applicable grace period), at the same rate to the extent lawful.

Section 4.02. Maintenance of Office or Agency.

     The Issuers shall maintain an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee) in New York, New York where Notes may be presented or surrendered for
payment and they shall maintain an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee) where Notes may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Issuers in respect of the Notes and this
Indenture may be served. The Issuers shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any time the Issuers
shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee.

     The Issuers may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations. Further, if at any time there shall be no such office or agency in the
City of New York where the Notes may be presented or surrendered for payment, the Issuers shall
forthwith designate and maintain such an office or agency in the City of New York, in order that
the Notes shall at all times be payable in the City of New York. The Issuers shall give prompt
written notice to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

     The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or
agency of the Company in accordance with Section 2.03.

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Section 4.03. Reports.

     (a) Notwithstanding that the Company may not be subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, so long as any Notes are outstanding, the Company will
file with the SEC (unless the SEC will not accept such a filing) for public availability within the
time periods specified in the SEC’s rules and regulations under the Exchange Act and, within five
Business Days of filing, or attempting to file, the same with the SEC, furnish to the Trustee and,
upon its prior request, to any of the Holders or Beneficial Owners of the Notes:

     (1) all quarterly and annual financial and other information with respect to the
Company and its Subsidiaries that would be required to be contained in a filing with the SEC
on Forms 10-Q and 10-K if the Company were required to file such forms, including a
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and,
with respect to the annual information only, a report thereon by the Company’s certified
independent accountants; and

     (2) all current reports that would be required to be filed with the SEC on Form 8-K if
the Company were required to file such reports.

The Company shall at all times comply with TIA § 314(a).

     (b) The Company and the Guarantors shall furnish to the Holders and Beneficial Owners of the
Notes, prospective purchasers of the Notes and securities analysts, upon their request, the
information, if any, required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

     (c) If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then,
to the extent material, the quarterly and annual financial information required by paragraph (a) of
this Section 4.03 shall include a reasonably detailed presentation, either on the face of the
financial statements or in the footnotes to the financial statements and in Management’s Discussion
and Analysis of Financial Condition and Results of Operations, of the financial condition and
results of operations of the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries.

     (d) Delivery of reports, information and documents to the Trustee under this Section is for
informational purposes only and the Trustee’s receipt of the foregoing shall not constitute
constructive notice of any information contained therein or determinable from information contained
therein.

Section 4.04. Compliance Certificate.

     (a) The Issuers shall deliver to the Trustee, within 90 days after the end of each fiscal year
ending after December 31, 2005, an Officers’ Certificate stating that a review of the activities of
the Company and its Restricted Subsidiaries during the preceding fiscal year has been made under
the supervision of the signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his or her

37

 

knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms, provisions and conditions
of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments of interest on the Notes
are prohibited or if such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto.

     (b) [Reserved].

     (c) The Issuers shall, so long as any of the Notes are outstanding, deliver to the Trustee,
forthwith upon any of their respective Officers becoming aware of any Default or Event of Default,
an Officers’ Certificate specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.

Section 4.05. Taxes.

     The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency,
all material taxes, assessments, and governmental levies except such as are contested in good faith
and by appropriate proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Notes.

Section 4.06. Stay, Extension and Usury Laws.

     Each of the Issuers and each of the Guarantors covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of this
Indenture; and each Issuer (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer
and permit the execution of every such power as though no such law has been enacted.

Section 4.07. Limitation on Restricted Payments.

     The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly:

     (1) declare or pay any dividend or make any other payment or distribution on account of
the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving the Company
or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company’s
or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other
than dividends or distributions payable in Equity Interests (other than Disqualified Stock)
of the Company or payable to the Company or a Restricted Subsidiary of the Company);

38

 

     (2) purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation involving the Company) any Equity
Interests of the Company or any direct or indirect parent of the Company;

     (3) make any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated to the Notes or the
Subsidiary Guarantees, except a payment of interest or principal at the Stated Maturity
thereof; or

     (4) make any Restricted Investment (all such payments and other actions set forth in
these clauses (1) through (4) above being collectively referred to as “Restricted
Payments”),

unless, at the time of and after giving effect to such Restricted Payment, no Default (except a
Reporting Default) or Event of Default has occurred and is continuing or would occur as a
consequence of such Restricted Payment and either:

     (1) if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full
fiscal quarters for which internal financial statements are available at the time of such
Restricted Payment is not less than 1.75 to 1.0, such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company and its Restricted
Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4) and (5) of
the next succeeding paragraph) with respect to the quarter for which such Restricted Payment
is made, is less than the sum, without duplication, of:

     (a) Available Cash from Operating Surplus with respect to the Company’s
preceding fiscal quarter, plus

     (b) 100% of the aggregate net cash proceeds received by the Company (including
the fair market value of any Permitted Business or long-term assets that are used or
useful in a Permitted Business to the extent acquired in consideration of Equity
Interests of the Company (other than Disqualified Stock)) after the date of this
Indenture as a contribution to its common equity capital or from the issue or sale
of Equity Interests of the Company (other than Disqualified Stock) or from the issue
or sale of convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted into or
exchanged for such Equity Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Restricted Subsidiary of the Company), plus

     (c) to the extent that any Restricted Investment that was made after the date
of this Indenture is sold for cash or otherwise liquidated or repaid for cash, the
cash return of capital with respect to such Restricted Investment (less the cost of
disposition, if any), plus

     (d) the net reduction in Restricted Investments resulting from dividends,
repayments of loans or advances, or other transfers of assets in each case to the
Company or any of its Restricted Subsidiaries from any Person

39

 

(including, without
limitation, Unrestricted Subsidiaries) or from redesignations of Unrestricted
Subsidiaries as Restricted Subsidiaries, to the extent such amounts have not been
included in Available Cash from Operating Surplus for any period commending on or
after the date of the indenture (items (b), (c) and (d) being referred to as
“Incremental Funds”), minus

     (e) the aggregate amount of Incremental Funds previously expended pursuant to
this clause (1) and clause (2) below; or

     (2) if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full
fiscal quarters for which internal financial statements are available at the time of such
Restricted Payment is less than 1.75 to 1.00, such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the
Company and its Restricted Subsidiaries (excluding Restricted Payments permitted by
clauses (2), (3), (4) and (5) of the next succeeding paragraph) with respect to the quarter
for which such Restricted Payment is made (such Restricted Payments for purposes of this
clause (2) meaning only distributions on common units of the Company), is less than the sum,
without duplication, of:

     (a) $45.0 million less the aggregate amount of all prior Restricted Payments
made by the Company and its Restricted Subsidiaries pursuant to this clause (2)(a)
since the date of this Indenture, plus

     (b) Incremental Funds to the extent not previously expended pursuant to this
clause (2) or clause (1) above.

     So long as no Default (except a Reporting Default) or Event of Default has occurred and is
continuing or would be caused thereby (except with respect to clause (1) below under which the
payment of a distribution or dividend is permitted), the preceding provisions will not prohibit:

     (1) the payment of any dividend or distribution within 60 days after the date of its
declaration, if at the date of declaration the payment would have complied with the
provisions of this Indenture;

     (2) the redemption, repurchase, retirement, defeasance or other acquisition of any
subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the
Company in exchange for, or out of the net cash proceeds of the substantially concurrent (a)
contribution (other than from a Restricted Subsidiary of the Company) to the equity capital
of the Company or (b) sale (other than to a Restricted Subsidiary of the Company) of, Equity
Interests of the Company (other than Disqualified Stock), with a sale being deemed
substantially concurrent if such redemption, repurchase, retirement, defeasance or
acquisition occurs not more than 120 days after such sale; provided, however, that the
amount of any such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition will be excluded or deducted from the
calculation of Available Cash from Operating Surplus and Incremental Funds;

40

 

     (3) the defeasance, redemption, repurchase, retirement or other acquisition of
subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an
incurrence of, or in exchange for, Permitted Refinancing Indebtedness;

     (4) the payment of any dividend or distribution by a Restricted Subsidiary of the
Company to the holders of its Equity Interests on a pro rata basis; or

     (5) the repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Restricted Subsidiary of the Company pursuant to any
director or employee equity subscription agreement or equity option agreement or other
employee benefit plan or to satisfy obligations under any Equity Interests appreciation
rights or option plan or similar arrangement; provided, however, that the aggregate price
paid for all such repurchased, redeemed, acquired or retired
Equity Interests may not exceed $2.0 million in any calendar year, with any portion of
such $2.0 million amount that is unused in any calendar year to be carried forward to
successive calendar years and added to such amount.

     The amount of all Restricted Payments (other than cash) will be the fair market value on the
date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued
by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The fair market value of any assets or securities that are required to be valued by this
covenant will be determined, in the case of amounts under $10.0 million, by an officer of the
Company and, in the case of amounts over $10.0 million, by the Board of Directors of the Company,
whose determination shall be evidenced by a Board Resolution. Not later than the date of making
any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2),
(3), (4) or (5)) the Company will deliver to the Trustee an Officers’ Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in
the event that a Restricted Payment meets the criteria of more than one of the categories of
Restricted Payments described in the preceding clauses (1) — (5), the Company will be permitted to
classify (or later classify or reclassify in whole or in part in its sole discretion) such
Restricted Payment in any manner that complies with this Section 4.07.

Section 4.08. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.

     The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or permit to exist or become effective any consensual encumbrance or restriction
on the ability of any Restricted Subsidiary to:

     (1) pay dividends or make any other distributions on its Capital Stock to the Company
or any of its Restricted Subsidiaries, or pay any Indebtedness or other obligations owed to
the Company or any of its Restricted Subsidiaries;

     (2) make loans or advances to the Company or any of its Restricted Subsidiaries; or

41

 

     (3) transfer any of its properties or assets to the Company or any of its Restricted
Subsidiaries.

     However, the preceding restrictions of this Section 4.08 will not apply to encumbrances or
restrictions existing under or by reason of:

     (1) agreements as in effect on the date of this Indenture and any amendments,
modifications, restatements, renewals, increases, supplements, refundings, replacements or
refinancings of those agreements or the Indebtedness to which they relate, provided that the
amendments, modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive, taken as a whole, with
respect to such dividend, distribution and other payment restrictions than those
contained in those agreements on the date of this Indenture;

     (2) this Indenture, the Notes and the Subsidiary Guarantees;

     (3) Applicable Law;

     (4) any instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition,
which encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the Person, so
acquired, provided that, in the case of Indebtedness, such Indebtedness was otherwise
permitted by the terms of this Indenture to be incurred;

     (5) customary non-assignment provisions in Hydrocarbon purchase and sale or exchange
agreements or similar operational agreements or in licenses or leases, in each case entered
into in the ordinary course of business and consistent with past practices;

     (6) Capital Lease Obligations, mortgage financings or purchase money obligations, in
each case for property acquired in the ordinary course of business that impose restrictions
on that property of the nature described in clause (3) of the preceding paragraph;

     (7) any agreement for the sale or other disposition of a Restricted Subsidiary of the
Company that restricts distributions by that Restricted Subsidiary pending its sale or other
disposition;

     (8) Permitted Refinancing Indebtedness, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are not materially more
restrictive, taken as a whole, than those contained in the agreements governing the
Indebtedness being refinanced;

     (9) Liens securing Indebtedness otherwise permitted to be incurred under the provisions
of Section 4.12 that limit the right of the debtor to dispose of the assets subject to such
Liens;

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     (10) provisions with respect to the disposition or distribution of assets or property
in joint venture agreements, asset sale agreements, stock sale agreements and other similar
agreements entered into in the ordinary course of business;

     (11) any agreement or instrument relating to any property or assets acquired after the
date of this Indenture, so long as such encumbrance or restriction relates only to the
property or assets so acquired and is not and was not created in anticipation of such
acquisitions;

     (12) restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business; and

     (13) any instrument governing Indebtedness of an FERC Subsidiary, provided that such
Indebtedness was otherwise permitted by the terms of this Indenture to be incurred.

Section 4.09. Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock.

     The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness
(including Acquired Debt), the Company will not issue any Disqualified Stock, and the Company will
not permit any of its or its Restricted Subsidiaries Restricted Subsidiaries to issue any preferred
securities; provided, however, that the Company and any of its Restricted Subsidiaries may incur
Indebtedness (including Acquired Debt) or issue Disqualified Stock, if the Fixed Charge Coverage
Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such additional Indebtedness is
incurred or such Disqualified Stock is issued would have been at least 2.0 to 1.0, determined on a
pro forma basis (including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may
be, at the beginning of such four-quarter period.

     The first paragraph of this Section 4.09 will not prohibit the incurrence of any of the
following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any preferred
securities described in clause (11) below:

     (1) the incurrence by the Company or any of its Restricted Subsidiaries of additional
Indebtedness (including letters of credit) under one or more Credit Facilities, provided
that, after giving effect to any such incurrence, the aggregate principal amount of all
Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company and its
Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $400.0
million or (b) $300.0 million plus 15% of the Company’s Consolidated Net Tangible Assets;

     (2) the incurrence by the Company or any of its Restricted Subsidiaries of the Existing
Indebtedness;

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     (3) the incurrence by the Company and the Guarantors of Indebtedness represented by (a)
the Notes issued and sold on the Initial Issuance Date and the related Subsidiary Guarantees
issued on the date of this Indenture and (b) the Exchange Notes and the related Subsidiary
Guarantees issued pursuant to any Registration Rights Agreement;

     (4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money obligations,
in each case, incurred for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property, plant or equipment
used in the business of the Company or such Restricted Subsidiary, including all
Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or
refund any Indebtedness incurred pursuant to this clause (4), provided that after giving
effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to
this clause (4) and then outstanding does not exceed the greater of (a) $15.0 million or (b)
2.5% of the Company’s Consolidated Net Tangible Assets at such time;

     (5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund Indebtedness that was permitted by this
Indenture to be incurred under the first paragraph of this Section 4.09 or clause (2) or (3)
of this paragraph or this clause (5);

     (6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided,
however, that:

     (a) if the Company is the obligor on such Indebtedness and a Guarantor is not
the obligee, such Indebtedness must be expressly subordinated to the prior payment
in full in cash of all Obligations with respect to the Notes, or if a Guarantor is
the obligor on such Indebtedness and neither the Company nor another Guarantor is
the obligee, such Indebtedness must be expressly subordinated to the prior payment
in full in cash of all Obligations with respect to the Subsidiary Guarantee of such
Guarantor; and

     (b) (i) any subsequent issuance or transfer of Equity Interests that results in
any such Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary of the Company and (ii) any sale or other transfer of any such
Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of
the Company will be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that
was not permitted by this clause (6);

     (7) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging
Contracts;

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     (8) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness
of the Company or any of its Restricted Subsidiaries that was permitted to be incurred by
another provision of this Section 4.09;

     (9) the incurrence by the Company or any of its Restricted Subsidiaries of obligations
relating to net gas balancing positions arising in the ordinary course of business and
consistent with past practice;

     (10) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness in respect of bid, performance, surety and similar bonds issued for the account
of the Company and any of its Restricted Subsidiaries in the ordinary course of
business, including guarantees and obligations of the Company or any of its Restricted
Subsidiaries with respect to letters of credit supporting such obligations (in each case
other than an obligation for money borrowed);

     (11) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to
any of its Restricted Subsidiaries of any preferred securities; provided, however, that:

     (a) any subsequent issuance or transfer of Equity Interests that results in any
such preferred securities being held by a Person other than the Company or a
Restricted Subsidiary of the Company; and

     (b) any sale or other transfer of any such preferred securities to a Person
that is not either the Company or a Restricted Subsidiary of the Company

shall be deemed, in each case, to constitute an issuance of such preferred securities by
such Restricted Subsidiary that was not permitted by this clause (11); and

     (12) the incurrence by the Company or any of its Restricted Subsidiaries of liability
in respect of the Indebtedness of any Unrestricted Subsidiary of the Company or any Joint
Venture but only to the extent that such liability is the result of the Company’s or any
such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or
Joint Venture and not as guarantor of such Indebtedness and provided that, after giving
effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred
under this clause (12) and then outstanding does not exceed $25.0 million;

     (13) the incurrence by the Company or any of its Restricted Subsidiaries of Acquired
Debt in connection with a merger or consolidation meeting either one of the financial tests
set forth in clause (d) of Section 5.01; and

     (14) the incurrence by the Company or any of its Restricted Subsidiaries of additional
Indebtedness, provided that, after giving effect to any such incurrence, the aggregate
principal amount of all Indebtedness incurred under this clause (14) and then outstanding
does not exceed the greater of (a) $25.0 million or (b) 4.0% of the Company’s Consolidated
Net Tangible Assets.

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     For purposes of determining compliance with this Section 4.09, in the event that an item of
Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of
Permitted Debt described in clauses (1) through (14) above, or is entitled to be incurred pursuant
to the first paragraph of this Section 4.09, the Company will be permitted to classify (or later
classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness in any
manner that complies with this covenant. Any Indebtedness under Credit Facilities on the date of
this Indenture shall be considered incurred under the first paragraph of this Section 4.09.

     The accrual of interest, the accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional shares of the
same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this Section 4.09, provided, in each such case, that
the amount thereof is included in Fixed Charges of the Company as accrued.

Section 4.10. Limitation on Asset Sales.

     The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an
Asset Sale unless:

     (1) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the fair market value of the
assets or Equity Interests issued or sold or otherwise disposed of;

     (2) the fair market value is determined by (a) an executive officer of the Company if
the value is less than $10.0 million and evidenced by an Officers’ Certificate delivered to
the Trustee, or (b) the Company’s Board of Directors if the value is $10.0 million or more
and evidenced by a resolution of the Board of Directors set forth in an Officers’
Certificate delivered to the Trustee; and

     (3) at least 75% of the aggregate consideration received by the Company and its
Restricted Subsidiaries in the Asset Sale and all other Asset Sales since the date of this
Indenture is in the form of cash. For purposes of this provision, each of the following
will be deemed to be cash:

     (a) any liabilities, as shown on the Company’s or such Restricted Subsidiary’s
most recent balance sheet, of the Company or any Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes or any
Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant
to a customary novation agreement that releases the Company or such Subsidiary from
further liability; and

     (b) any securities, notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are, within 90 days after the
Asset Sale, converted by the Company or such Subsidiary into cash, to the extent of
the cash received in that conversion.

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     Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company or any
such Restricted Subsidiary may apply those Net Proceeds at its option to any combination of the
following:

     (I) to repay Senior Debt;

     (II) to acquire all or substantially all of the properties or assets of a Person primarily
engaged in a Permitted Business;

     (III) to acquire a majority of the Voting Stock of a Person primarily engaged a Permitted
Business;

     (IV) to make capital expenditures; or

     (V) to acquire other long-term assets that are used or useful in a Permitted Business.

     Pending the final application of any Net Proceeds, the Company or any such Restricted
Subsidiary may invest the Net Proceeds in any manner that is not prohibited by this Indenture. Any
Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding
paragraph will constitute “Excess Proceeds.”

     On the 361st day after the Asset Sale (or, at the Company’s option, any earlier date), if the
aggregate amount of Excess Proceeds then exceeds $20.0 million, the Company will make an Asset Sale
Offer to all Holders of Notes, and to all holders of Pari Passu Indebtedness then outstanding, to
purchase the maximum principal amount of Notes and such Pari Passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to
100% of principal amount plus accrued and unpaid interest, if any, to the Settlement Date, subject
to the right of Holders of record on the relevant record date to receive interest due on an
interest payment date that is on or prior to the Settlement Date, and will be payable in cash. If
any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use those
Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and Pari Passu Indebtedness tendered into such Asset Sale Offer exceeds
the amount of Excess Proceeds, the Trustee will select the Notes and such Pari Passu Indebtedness
to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds will be reset at zero.

     The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the
extent that the provisions of any securities laws or regulations conflict with the provisions of
this Section 4.10, the Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under such provisions by virtue of such
conflict.

Section 4.11. Limitation on Transactions with Affiliates.

     The Company will not, and will not permit any of its Restricted Subsidiaries to, make any
payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or

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purchase any property or assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate
(each, an “Affiliate Transaction”), unless:

     (1) the Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

     (2) the Company delivers to the Trustee:

     (a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $10.0 million, a
resolution of the Board of Directors of the Company set forth in an Officers’
Certificate certifying that such Affiliate Transaction complies with this Section
4.11 and that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors; and

     (b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $25.0 million, a written
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing.

     The following items will not be deemed to be Affiliate Transactions and, therefore, will not
be subject to the provisions of the prior paragraph of this Section 4.11:

     (1) any employment equity award, equity option or equity appreciation agreement or plan
entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of
business;

     (2) transactions between or among any of the Company and its Restricted Subsidiaries;

     (3) transactions with a Person that is an Affiliate of the Company solely because the
Company owns an Equity Interest in such Person;

     (4) customary compensation, indemnification and other benefits made available to
officers, directors or employees of the Company or a Restricted Subsidiary or Affiliate of
the Company, including reimbursement or advancement of out-of-pocket expenses and provisions
of officers’ and directors’ liability insurance;

     (5) sales of Equity Interests (other than Disqualified Stock) to Affiliates of the
Company;

     (6) Restricted Payments that are permitted by Section 4.07;

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     (7) transactions effected in accordance with the terms of the Administrative and
Operating Services Agreement that are described under the caption “Certain Relationships and
Related Transactions — Copano/Operations, Inc.” in the Offering Memorandum, as such
agreement is in effect on the date of this Indenture, and any amendment or extension of such
agreement so long as such amendment or extension agreement is no less advantageous to the
Company in any material respect than the agreement so amended or extended;

     (8) the purchase by the Company or any of its Restricted Subsidiaries of natural gas
from John R. Eckel, Jr., or any of his Affiliates and any related transactions,
or the gathering or compressing of any natural gas by the Company or any of its
Restricted Subsidiaries for the account of John R. Eckel, Jr. or any of his Affiliates and
any related transactions, in each case in the ordinary course of business;

     (9) the guarantee by ScissorTail Energy LLC of the performance by Southern Dome, LLC of
its obligations under the Gas Purchase and Processing Agreement effective as of May 1, 2005
between Southern Dome, LLC and New Dominion, L.L.C., as such agreement is in effect on the
date of this Indenture, and any amendment or extension of such agreement so long as such
amendment or extension agreement is no less advantageous to the Company in any material
respect than the agreement so amended or extended;

     (10) transactions effected in accordance with the terms of the Management Agreement
dated as of August 1, 2005 between Southern Dome, LLC and ScissorTail Energy LLC, as such
agreement is in effect on the date of this Indenture, and any amendment or extension of such
agreement so long as such amendment or extension agreement is no less advantageous to the
Company in any material respect than the agreement so amended or extended; and

     (11) the transportation of natural gas across the gathering systems of Webb/Duval
Gatherers and its Subsidiaries in the ordinary course of business and consistent with past
practices.

Section 4.12. Limitation on Liens.

     The Company will not and will not permit any of its Restricted Subsidiaries to, create, incur,
assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than
Permitted Liens) securing Indebtedness or Attributable Debt upon any of their property or assets,
now owned or hereafter acquired, unless the Notes or any Subsidiary Guarantee of such Restricted
Subsidiary, as applicable, is secured on an equal and ratable basis (or on a senior basis to, in
the case of obligations subordinated in right of payment to the Notes or such Subsidiary Guarantee,
as the case may be) with the obligations so secured until such time as such obligations are no
longer secured by a Lien.

Section 4.13. Additional Subsidiary Guarantees.

     If, after the date of this Indenture, any Restricted Subsidiary of the Company that is not
already a Guarantor guarantees any other Indebtedness of either of the Issuers or any

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Indebtedness
of any Guarantor, or any Domestic Subsidiary, if not then a Guarantor, incurs any Indebtedness
under any of the Credit Facilities, then in either case that Subsidiary will become a Guarantor by
executing a supplemental indenture substantially in the form of Annex A hereto and delivering it to
the Trustee within twenty Business Days of the date on which it guaranteed or incurred such
Indebtedness, as the case may be, together with any Officers’ Certificate or Opinion of Counsel
required by Section 9.06; provided, however, that the preceding shall not
apply to Subsidiaries of the Company that have properly been designated as Unrestricted
Subsidiaries in accordance with this Indenture for so long as they continue to constitute
Unrestricted Subsidiaries. Notwithstanding the preceding, any Subsidiary Guarantee of a Restricted
Subsidiary that was incurred pursuant to this Section 4.13 as a result of its guarantee of any
Indebtedness shall provide by its terms that it shall be automatically and unconditionally released
upon the release or discharge of the guarantee that resulted in the creation of such Restricted
Subsidiary’s Subsidiary Guarantee, except a discharge or release by, or as a result of payment
under, such guarantee.

Section 4.14. Corporate Existence.

     Except as otherwise permitted pursuant to the terms hereof (including consolidation and merger
permitted by Section 5.01), the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, and the corporate, partnership
or other existence of each of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the Company or any such
Restricted Subsidiary; provided, however, that the Company shall not be required to preserve the
existence of any of its Restricted Subsidiaries (except Finance Corp.) if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries taken as a whole and that the loss thereof is not
adverse in any material respect to the Holders of the Notes.

Section 4.15. Offer to Repurchase Upon Change of Control.

     (1) Within 30 days following the occurrence of a Change of Control, the Company shall
make an offer (a “Change of Control Offer”) to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of each Holder’s Notes at a purchase price (the “Change of
Control Payment”) in cash equal to 101% of the aggregate principal amount of Notes
repurchased, plus accrued and unpaid interest and Additional Interest, if any, thereon to
the date of settlement (the “Change of Control Settlement Date”), subject to the right of
Holders of record on the relevant record date to receive interest due on an interest payment
date that is on or prior to the Change of Control Settlement Date. Within 30 days following
a Change of Control, the Company shall mail a notice of the Change of Control Offer to each
Holder and the Trustee describing the transaction that constitutes the Change of Control and
stating:

     (a) that the Change of Control Offer is being made pursuant to this Section
4.15 and that all Notes validly tendered and not withdrawn will be accepted for
payment;

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     (b) the purchase price and the purchase date, which shall be no earlier than 30
days but no later than 60 days from the date such notice is mailed (the “Change of
Control Purchase Date”);

     (c) that the Change of Control Offer will expire as of the time specified in
such notice on the Change of Control Purchase Date and that the Company shall pay
the Change of Control Purchase Price for all Notes purchased as of the Change of
Control Purchase Date promptly thereafter on the Change of Control Settlement Date;

     (d) that any Note not tendered will continue to accrue interest and Additional
Interest, if any;

     (e) that, unless the Company defaults in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest and Additional Interest, if any, after the Change of
Control Settlement Date;

     (f) that Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Notes, properly endorsed for
transfer, together with the form entitled “Option of Holder to Elect Purchase” on
the reverse of the Notes completed and such customary documents as the Company may
reasonably request, to the Paying Agent at the address specified in the notice prior
to the termination of the Change of Control Offer on the Change of Control Purchase
Date;

     (g) that Holders will be entitled to withdraw their election if the Paying
Agent receives, prior to the termination of the Change of Control Offer, a telegram,
facsimile transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing its election to have the Notes purchased; and

     (h) that Holders whose Notes are being purchased only in part will be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in principal amount
or an integral multiple thereof.

If any of the Notes subject to a Change of Control Offer is in the form of a Global Note,
then the Company shall modify such notice to the extent necessary to accord with the
procedures of the Depository applicable to repurchases. Further, the Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes as a result of a Change of Control. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of this
Section 4.15, the Company will comply with the applicable securities laws and regulations
and will not be deemed to have breached its obligations under such provisions by virtue of
such conflict.

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     (2) On the Change of Control Purchase Date, the Company shall, to the extent lawful,
accept for payment all Notes or portions thereof (in integral multiples of $1,000)
properly tendered pursuant to the Change of Control Offer. Promptly thereafter on the
Change of Control Settlement Date the Company shall:

     (a) deposit with the Paying Agent by 11:00 a.m., New York City time, an amount
equal to the Change of Control Payment in respect of all Notes or portions thereof
so tendered; and

     (b) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers’ Certificate stating the aggregate principal amount of
Notes or portions of Notes being purchased by the Company.

On the Change of Control Settlement Date, the Paying Agent shall mail to each Holder of
Notes properly tendered the Change of Control Payment for such Notes (or, if all the Notes
are then in global form, make such payment through the facilities of the Depository) and the
Trustee shall authenticate and mail (or cause to be transferred by book entry) to each
Holder a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided, however, that each such new Note will be in a principal
amount of $1,000 or an integral multiple of $1,000. The Company shall publicly announce the
results of the Change of Control Offer on or as soon as practicable after the Change of
Control Purchase Date.

     (3) The Change of Control provisions described above shall be applicable whether or nor
any other provisions of this Indenture are applicable.

     (4) Prior to complying with any of the provisions of this Section 4.15, but in any
event no later than the Change of Control Purchase Date, the Company or any Guarantor must
either repay all of its other outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing such Senior Debt to permit the repurchase of Notes
required by this Section 4.15.

     (5) The Company shall not be required to make a Change of Control Offer following a
Change of Control if a third party makes the Change of Control Offer in the manner, at the
time and otherwise in compliance with the requirements set forth in this Indenture
applicable to a Change of Control Offer made by the Company and purchases all Notes properly
tendered and not withdrawn under such Change of Control Offer.

Section 4.16. No Inducements.

     The Company shall not, and the Company shall not permit any of its Subsidiaries, either
directly or indirectly, to pay (or cause to be paid) any consideration, whether by way of interest,
fee or otherwise, to any Beneficial Owner or Holder of the Notes for or as an inducement to any
consent to any waiver, amendment or supplement of any terms or provisions of this Indenture or the
Notes, unless such consideration is offered to be paid (or agreed to be paid) to all Beneficial
Owners and Holders of the Notes which so consent in the time frame set forth in the solicitation
documents relating to such consent.

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Section 4.17. Permitted Business Activities.

     The Company will not, and will not permit any Restricted Subsidiary to, engage in any business
other than a Permitted Business, except to such extent as would not be material to the Company and
its Restricted Subsidiaries taken as a whole.

     Finance Corp. shall not incur Indebtedness unless (1) the Company is a co-obligor or guarantor
of such Indebtedness or (2) the net proceeds of such Indebtedness are loaned to the Company, used
to acquire outstanding debt securities issued by the Company or used to repay Indebtedness of the
Company as permitted under Section 4.09. Finance Corp. shall not engage in any business not
related directly or indirectly to obtaining money or arranging financing for the Company or its
Restricted Subsidiaries.

Section 4.18. Sale and Leaseback Transactions.

     The Company will not, and will not permit any of its Restricted Subsidiaries to, enter into
any Sale and Leaseback Transaction; provided, however, that the Company or any of its Restricted
Subsidiaries may enter into a Sale and Leaseback Transaction if:

     (1) the Company or that Restricted Subsidiary, as applicable, could have (a) incurred
Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback
transaction under the Fixed Charge Coverage Ratio test in the first paragraph of Section
4.09 and (b) incurred a Lien to secure such Indebtedness pursuant to Section 4.12;

     (2) the gross cash proceeds of that Sale and Leaseback Transaction are at least equal
to the fair market value, as determined in good faith by the Board of Directors of the
Company and set forth in an Officers’ Certificate delivered to the Trustee, of the property
that is the subject of that Sale and Leaseback Transaction; and

     (3) the transfer of assets in that Sale and Leaseback Transaction is permitted by, and
the Company applies the proceeds of such transaction in compliance with, Section 4.10.

Section 4.19. Covenant Termination.

     If at any time (a) the rating assigned to the Notes by both S&P and Moody’s is an Investment
Grade Rating and (b) no Default has occurred and is continuing under this Indenture, the Company
and its Restricted Subsidiaries will no longer be subject to the provisions of Sections 3.09, 4.07,
4.08, 4.09, 4.10, 4.11, 4.17, clauses (1)(a) and (3) of Section 4.18, and clause (d) of Section
5.01 of this Indenture. However, the Company and its Restricted Subsidiaries will remain subject
to all of the other provisions of this Indenture.

Section 4.20. Designation of Restricted and Unrestricted Subsidiaries.

     The Board of Directors of the Company may designate any Restricted Subsidiary of the Company
to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted
Subsidiary of the Company is designated as an Unrestricted Subsidiary, the aggregate

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fair market value of all outstanding Investments owned by the Company and its Restricted
Subsidiaries in the Subsidiary properly designated will be deemed to be an Investment made as of
the time of the designation and will reduce the amount available for Restricted Payments under the
first paragraph of Section 4.07 or represent Permitted Investments, as determined by the Company.
That designation shall only be permitted if the Investment would be permitted at that time and if
the Subsidiary so designated otherwise meets the definition of an Unrestricted Subsidiary.

     The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to
be a Restricted Subsidiary of the Company; provided that such designation will be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if (1)
such Indebtedness is permitted under Section 4.09, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period, and (2) no Default
or Event of Default would be in existence following such designation.

ARTICLE
5

SUCCESSORS

Section 5.01. Merger, Consolidation, or Sale of Assets.

     Neither of the Issuers may, directly or indirectly, (1) consolidate or merge with or into
another Person (whether or not such Issuer is the survivor), or (2) sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or assets in one or more
related transactions to another Person, unless:

     (a) either (1) such Issuer is the survivor or (2) the Person formed by or surviving any
such consolidation or merger (if other than such Issuer ) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made is a Person organized
or existing under the laws of the United States, any state of the United States or the
District of Columbia; provided, however, that Finance Corp. may not consolidate or merge
with or into any Person other than a corporation satisfying such requirement so long as the
Company is not a corporation;

     (b) the Person formed by or surviving any such consolidation or merger (if other than
such Issuer) or the Person to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made assumes all the obligations of such Issuer under the
Notes, this Indenture and the applicable Registration Rights Agreement pursuant to a
supplemental indenture or other agreement in a form reasonably satisfactory to the Trustee;

     (c) immediately after such transaction no Default or Event of Default exists;

     (d) in the case of a transaction involving the Company and not Finance Corp., either;

     (i) the Company or the Person formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale,

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assignment, transfer, lease, conveyance or other disposition shall have
been made will, at the time of such transaction and after giving pro forma effect
thereto and any related financing transaction as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in the first paragraph of Section 4.09 hereof; or

     (ii) immediately after giving effect to such transaction on a pro forma basis
and any related financing transactions as if the same had occurred at the beginning
of the Company’s most recently ended four full quarters for which internal financial
statements are available immediately preceding the date of the transactions, the
Fixed Charge Coverage Ratio of the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition has been made will be
equal to or greater than the Fixed Charge Coverage Ratio of the Company immediately
before such transactions; and

     (e) such Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or disposition and such supplemental
indenture (if any) comply with this Indenture.

     Notwithstanding the preceding paragraph of this Section 5.01, the Company may reorganize as
any other form of entity in accordance with the following procedures provided that:

     (1) the reorganization involves the conversion (by merger, sale, contribution or
exchange of assets or otherwise) of the Company into a form of entity other than a limited
liability company formed under Delaware law;

     (2) the entity so formed by or resulting from such reorganization is an entity
organized or existing under the laws of the United States, any state thereof or the District
of Columbia;

     (3) the entity so formed by or resulting from such reorganization assumes all the
obligations of the Company under the Notes, the Indenture and the applicable Registration
Rights Agreement pursuant to agreements reasonably satisfactory to the Trustee;

     (4) immediately after such reorganization no Default or Event of Default exists; and

     (5) such reorganization is not materially adverse to the Holders or Beneficial Owners
of the Notes (for purposes of this clause (5) a reorganization will not be considered
materially adverse to the Holders or Beneficial Owners of the Notes solely because the
successor or survivor of such reorganization (a) is subject to federal or state income
taxation as an entity or (b) is considered to be an “includable corporation” of an
affiliated group of corporations with the meaning of Section 1504(b)(i) of the Code or any
similar state or local law).

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Section 5.02. Successor Substituted.

     Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the properties or assets of an Issuer in
accordance with Section 5.01 hereof, the successor formed by such consolidation or into or with
which such Issuer is merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and may exercise every right and power of, such Issuer under
this Indenture with the same effect as if such successor had been named as such Issuer herein and
shall be substituted for such Issuer (so that from and after the date of such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this
Indenture referring to the “Company” or “Finance Corp.,” as the case may be, shall refer instead to
the successor and not to the Company or Finance Corp., as the case may be); and thereafter, if an
Issuer is dissolved following a transfer of all or substantially all of its properties or assets in
accordance with this Indenture, it shall be discharged and released from all obligations and
covenants under this Indenture and the Notes. The Trustee shall enter into a supplemental
indenture to evidence the succession and substitution of such successor and such discharge and
release of such Issuer.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01. Events of Default.

     An “Event of Default” occurs if one of the following shall have occurred and be continuing
(whatever the reason for such Event of Default and whether it shall be involuntary or be effected
by operation of law):

     (a) an Issuer defaults in the payment when due of interest or Additional Interest, if
any, with respect to, the Notes, and such default continues for a period of 30 days;

     (b) an Issuer defaults in the payment of the principal of or premium, if any, on the
Notes when due at its Stated Maturity, upon optional redemption, upon required repurchase,
upon declaration or otherwise;

     (c) the Company fails to comply with the provisions of Section 3.09, 4.10, 4.15 or 5.01
hereof;

     (d) the Company fails to comply with the provisions of Section 4.03 for 90 days after
notice to the Company by the Trustee or the Holders of at least 25% in principal amount of
the Notes then outstanding of such failure;

     (e) the Company fails to comply with any other covenant or other agreement in this
Indenture or the Notes for 60 days after notice to the Company by the Trustee or the Holders
of at least 25% in principal amount of the Notes then outstanding of such failure;

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     (f) a default occurs under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed
by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or
guarantee now exists or is created after the Initial Issuance Date, if such default:

     (1) is caused by a failure to pay principal of, or interest or premium, if any,
on such Indebtedness prior to the expiration of any grace period provided in such
Indebtedness (a “Payment Default”); or

     (2) results in the acceleration of such Indebtedness prior to its Stated
Maturity

and, in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a Payment Default
or the maturity of which has been so accelerated, aggregates $20.0 million or more;
provided, however, that if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 60 days from the continuation
of such default beyond the applicable grace period or the occurrence of such acceleration,
as the case may be, such Event of Default and any consequential acceleration of the Notes
shall be automatically rescinded, so long as such rescission does not conflict with any
judgment or decree;

     (g) the Company or any of its Restricted Subsidiaries fails to pay final judgments
aggregating in excess of $20.0 million, which judgments are not paid, discharged or stayed
for a period of 60 days;

     (h) except as permitted by this Indenture, any Subsidiary Guarantee is held in any
judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full
force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, denies
or disaffirms its obligations under its Subsidiary Guarantee; and

     (i) the Company, Finance Corp., any of the Company’s Restricted Subsidiaries that is a
Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the Company
that, taken together, would constitute a Significant Subsidiary of the Company pursuant to
or within the meaning of Bankruptcy Law:

     (1) commences a voluntary case,

     (2) consents in writing to the entry of an order for relief against it in an
involuntary case,

     (3) consents in writing to the appointment of a Custodian of it or for all or
substantially all of its property,

     (4) makes a general assignment for the benefit of its creditors, or

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     (5) admits in writing it generally is not paying its debts as they become due;
or

     (j) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:

     (1) is for relief against the Company, Finance Corp., any of the Company’s
Restricted Subsidiaries that is a Significant Subsidiary of the Company or any group
of Restricted Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary of the Company in an involuntary case;

     (2) appoints a Custodian of the Company, Finance Corp., any of the Company’s
Restricted Subsidiaries that is a Significant Subsidiary of the Company or any group
of Restricted Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary of the Company or for all or substantially all of the
property of the Company, Finance Corp., any of the Company’s Restricted Subsidiaries
that is a Significant Subsidiary of the Company or any group of Restricted
Subsidiaries of the Company, that, taken together, would constitute a Significant
Subsidiary of the Company; or

     (3) orders the liquidation of the Company, Finance Corp., any of the Company’s
Restricted Subsidiaries that is a Significant Subsidiary of the Company or any group
of Restricted Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary of the Company;

and the order or decree remains unstayed and in effect for 60 consecutive days.

Section 6.02. Acceleration.

     If any Event of Default occurs and is continuing, the Trustee, by notice to the Issuers, or
the Holders of at least 25% in principal amount of the then outstanding Notes, by notice to the
Issuers and the Trustee, may declare all the Notes to be due and payable immediately. Upon any
such declaration, the Notes shall become due and payable immediately, together with all accrued and
unpaid interest, Additional Interest, if any, and premium, if any, thereon. Notwithstanding the
preceding, if an Event of Default specified in clause (i) or (j) of Section 6.01 hereof occurs with
respect to the Company, Finance Corp., any of the Company’s Restricted Subsidiaries that is a
Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary of the Company, all outstanding Notes
shall become due and payable without further action or notice, together with all accrued and unpaid
interest, Additional Interest, if any, and premium, if any, thereon. The Holders of a majority in
principal amount of the then outstanding Notes by notice to the Trustee may on behalf of all of the
Holders rescind an acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except with respect to nonpayment of
principal, interest, premium or Additional Interest, if any, that have become due solely because of
the acceleration) have been cured or waived.

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     If an Event of Default occurs by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of an Issuer with the intention of avoiding payment of the premium that the
Issuers would have had to pay if the Issuers then had elected to redeem the Notes pursuant to
Section 3.07(a) hereof, an equivalent premium shall also become and be immediately due and payable
to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs
prior to March 1, 2011 by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of an Issuer with the intention of avoiding the prohibition on redemption of the Notes prior
to that date, then the premium specified in Section 3.07(a) with respect to the first year that the
Notes may be redeemed at the Issuers’ option pursuant to Section 3.07(a) will also become
immediately due and payable to the extent permitted by law upon the acceleration of the Notes.

Section 6.03. Other Remedies.

     If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of principal of and premium, interest and Additional Interest, if any, on
the Notes or to enforce the performance of any provision of the Notes or this Indenture.

     The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note
in exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

Section 6.04. Waiver of Past Defaults.

     Holders of a majority in principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of or premium, interest or Additional Interest, if any, on the Notes
(including in connection with an offer to purchase). Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.

Section 6.05. Control by Majority.

     Holders of a majority in principal amount of the then outstanding Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal
liability.

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Section 6.06. Limitation on Suits.

     A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if:

     (a) the Holder of a Note gives to the Trustee written notice of a continuing Event of
Default;

     (b) the Holders of at least 25% in principal amount of the then outstanding Notes make
a written request to the Trustee to pursue the remedy;

     (c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the
Trustee indemnity or security satisfactory to the Trustee against any loss, liability or
expense;

     (d) the Trustee does not comply with the request within 60 days after receipt of the
request and the offer and, if requested, the provision of indemnity; and

     (e) during such 60-day period the Holders of a majority in principal amount of the then
outstanding Notes do not give the Trustee a direction inconsistent with the request.

     A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note
or to obtain a preference or priority over another Holder of a Note.

Section 6.07. Rights of Holders of Notes to Receive Payment.

     Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal of and premium, interest and Additional Interest, if any, on the Note,
on or after the respective due dates expressed in the Note (including in connection with an offer
to purchase), or to bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08. Collection Suit by Trustee.

     If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the
Trustee is authorized to recover judgment in its own name and as trustee of an express trust
against the Issuers and the Guarantors for the whole amount of principal of, premium, interest and
Additional Interest, if any, remaining unpaid on the Notes and interest on overdue principal and,
to the extent lawful, interest and Additional Interest, if any, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09. Trustee May File Proofs of Claim.

     The Trustee is authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents

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and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the
Issuers (or any other obligor upon the Notes), their creditors or their property and shall be
entitled and empowered to collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof.
To the extent that the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07
hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

Section 6.10. Priorities.

     If the Trustee collects any money pursuant to this Article, it shall pay out the money in the
following order:

     First: to the Trustee, its agents and attorneys for amounts due under Section 7.07
hereof, including payment of all compensation, expense and liabilities incurred, and all
advances made, by the Trustee and the Trustee’s costs and expenses of collection;

     Second: to Holders of Notes for amounts due and unpaid on the Notes for principal,
premium, interest and Additional Interest, if any, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Notes for principal, premium,
interest and Additional Interest, if any, respectively; and

     Third: to the Issuers or to such party as a court of competent jurisdiction shall
direct.

     The Trustee may fix a record date and payment date for any payment to Holders of Notes
pursuant to this Section 6.10.

Section 6.11. Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit

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by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10%
in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

Section 7.01. Duties of Trustee.

     (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of care and skill in
its exercise, as a prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

     (b) Except during the continuance of an Event of Default:

     (i) the duties of the Trustee shall be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and

     (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.

     (c) The Trustee may not be relieved from liabilities for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

     (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

     (ii) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and

     (iii) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.05
hereof.

     (d) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

     (e) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with an Issuer. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.

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Section 7.02. Rights of Trustee.

     (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.

     (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee
may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.

     (c) The Trustee may act through its attorneys and agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.

     (d) The Trustee shall not be liable for any action it takes or omits to take in good faith
that it believes to be authorized or within the rights or powers conferred upon it by this
Indenture.

     (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from an Issuer shall be sufficient if signed by an Officer of such Issuer.

     (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders unless such Holder shall
have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities that might be incurred by it in compliance with such request or direction.

     (g) The Trustee shall have no duty to inquire as to the performance of the Company’s covenants
in Article 4 hereof. In addition, the Trustee shall not be deemed to have knowledge of any Default
or Event of Default except: (1) any Event of Default occurring pursuant to Section 6.01(a) or
6.01(b) hereof; or (2) any Default or Event of Default of which a Responsible Officer shall have
received written notification or obtained actual knowledge.

     (h) The permissive right of the Trustee to act hereunder shall not be construed as a duty.

Section 7.03. Individual Rights of Trustee.

     The Trustee in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuers, any Guarantor or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that the Trustee acquires
any conflicting interest (as defined in the TIA) after a Default has occurred and is continuing, it
must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee
or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to
Sections 7.10 and 7.11 hereof.

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Section 7.04. Trustee’s Disclaimer.

     The Trustee shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for either Issuer’s use of the
proceeds from the Notes or any money paid to an Issuer or upon either Issuer’s direction under any
provision of this Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document in connection with
the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05. Notice of Defaults.

     If a Default or Event of Default occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90
days after it occurs. Except in the case of a Default or Event of Default in payment of principal
of or premium, if any, interest or Additional Interest, if any, on any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the Notes.

Section 7.06. Reports by Trustee to Holders of the Notes.

     Within 60 days after each May 15 beginning with the May 15 following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of
the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no
event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date,
no report need be transmitted). The Trustee also shall comply with TIA § 313(b)(2) and §
313(b)(1). The Trustee shall also transmit by mail all reports as required by TIA § 313(c).

     A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to
the Issuers and filed with the SEC and each stock exchange on which the Notes are listed in
accordance with TIA § 313(d). The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange.

Section 7.07. Compensation and Indemnity.

     The Issuers shall pay to the Trustee from time to time such reasonable compensation as the
Issuers and the Trustee may agree in writing for the Trustee’s acceptance of this Indenture and
services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of
a trustee of an express trust. The Issuers shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee’s agents and counsel.

     The Issuers and the Guarantors shall indemnify the Trustee, jointly and severally, against any
and all losses, liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the costs and expenses
of enforcing this Indenture against the Issuers and the Guarantors (including this Section 7.07)
and defending itself against any claim (whether asserted by an Issuer, any Guarantor or any

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Holder or any other Person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence, bad faith or willful misconduct. The Trustee shall notify the
Issuers and the Guarantors promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuers and the Guarantors shall not relieve the Issuers or the Guarantors
of their obligations hereunder. The Issuers and the Guarantors shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Issuers and
the Guarantors shall pay the reasonable fees and expenses of such counsel; provided that the
Issuers and the Guarantors will not be required to pay such fees and expenses if they assume the
Trustee’s defense with counsel acceptable to and approved by the Trustee (such approval not to be
unreasonably withheld) and there is no conflict of interest between the Issuers and the Trustee in
connection with such defense. The Issuers and the Guarantors need not pay for any settlement made
without their consent, which consent shall not be unreasonably withheld. Neither the Issuers nor
the Guarantors need reimburse the Trustee for any expense or indemnity against any liability or
loss of the Trustee to the extent such expense, liability or loss is attributable to the
negligence, bad faith or willful misconduct of the Trustee.

     The obligations of the Issuers and the Guarantors under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.

     To secure the Issuers’ and the Guarantors’ payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all money or property held or collected by the
Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien
shall survive the satisfaction and discharge of this Indenture.

     When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.01(i) or (j) hereof occurs, the expenses and the compensation for the services (including
the fees and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.

     The Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.

Section 7.08. Replacement of Trustee.

     A resignation or removal of the Trustee and appointment of a successor Trustee shall become
effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.

     The Trustee may resign in writing upon 30 days notice at any time and be discharged from the
trust hereby created by so notifying the Issuers. The Holders of Notes of a majority in principal
amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the
Issuers in writing and may appoint a successor trustee with the consent of the Issuers. The
Issuers may remove the Trustee if:

     (a) the Trustee fails to comply with Section 7.10 hereof;

     (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;

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     (c) a receiver, Custodian or public officer takes charge of the Trustee or its
property; or

     (d) the Trustee becomes incapable of acting.

     If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Issuers shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the
Issuers.

     If a successor Trustee does not take office within 30 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Issuers or the Holders of Notes of at least 10% in
principal amount of the then outstanding Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.

     If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note
for at least six months, fails to comply with Section 7.10 hereof, such Holder of a Note may
petition any court of competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee.

     A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuers. Thereupon, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid
and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the
Trustee pursuant to this Section 7.08, the Issuers’ and the Guarantors’ obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee.

     Section 7.09. Successor Trustee by Merger, etc.

     If the Trustee consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation without any further
act shall be the successor Trustee. As soon as practicable, the successor Trustee shall mail a
notice of its succession to the Issuers and the Holders of the Notes.

Section 7.10. Eligibility; Disqualification.

     There shall at all times be a Trustee hereunder that is a corporation organized and doing
business under the laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.

     This Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1),
(2) and (5). The Trustee is subject to TIA § 310(b).

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Section 7.11. Preferential Collection of Claims Against Issuers.

     The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA §
311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent
indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.

     The Issuers may, at the option of their respective Boards of Directors evidenced by a
resolution set forth in an Officers’ Certificate, at any time, exercise their rights under either
Section 8.02 or 8.03 hereof with respect to all outstanding Notes upon compliance with the
conditions set forth below in this Article 8.

     Section 8.02. Legal Defeasance and Discharge.

     Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section
8.02, the Issuers shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have discharged their obligations with respect to all outstanding Notes, and
each Guarantor shall be deemed to have discharged its obligations with respect to its Subsidiary
Guarantee, on the date the conditions set forth in Section 8.04 below are satisfied (hereinafter,
“Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuers shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding Notes, and each
Guarantor shall be deemed to have paid and discharged its Subsidiary Guarantee (which in each case
shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the
other Sections of this Indenture referred to in (a) and (b) below) and to have satisfied all its
other obligations under such Notes or Subsidiary Guarantee and this Indenture (and the Trustee, on
demand of and at the expense of the Issuers, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the
trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments
in respect of the principal of and premium, if any, interest and Additional Interest, if any, on
such Notes when such payments are due, (b) the Issuers’ obligations with respect to such Notes
under Sections 2.03, 2.04, 2.07, 2.09 and 4.02 hereof and the Appendix, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Issuers’ and the Guarantors’
obligations in connection therewith and (d) the Legal Defeasance provisions of this Article 8.
Subject to compliance with this Article 8, the Issuers may exercise their option under this Section
8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

     If the Issuers exercise their Legal Defeasance option, each Guarantor will be released and
relieved of any obligations under its Subsidiary Guarantee, and any security for the Notes (other
than the trust) will be released.

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Section 8.03. Covenant Defeasance.

     Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section
8.03, the Issuers shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from their obligations under the covenants contained in Article 4 (other than
those in Sections 4.01, 4.02, 4.06 and 4.14) and in clause (d) of Section 5.01 hereof on and after
the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”), and the
Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any thereof) in connection with
such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it
being understood that such Notes shall not be deemed outstanding for accounting purposes). For
this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuers
and any Guarantor may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or indirectly, by reason
of any reference elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such omission to comply shall
not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition,
upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section 8.03
hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(f) through 6.01(h) hereof shall not constitute Events of Default.

     If the Issuers exercise their Covenant Defeasance option, each Guarantor will be released and
relieved of any obligations under its Subsidiary Guarantee and any security for the Notes (other
than the trust) will be released.

Section 8.04. Conditions to Legal or Covenant Defeasance.

     In order to exercise either Legal Defeasance or Covenant Defeasance:

     (a) the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of and premium, interest and
Additional Interest, if any, on the outstanding Notes on the date of fixed maturity or on
the applicable redemption date, as the case may be, and the Issuers must specify whether the
Notes are being defeased to the date of fixed maturity or to a particular redemption date;

     (b) in the case of an election under Section 8.02 hereof, the Issuers shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that:

     (1) the Issuers have received from, or there has been published by, the
Internal Revenue Service a ruling; or

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     (2) since the Initial Issuance Date, there has been a change in the applicable
federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred;

     (c) in the case of an election under Section 8.03 hereof, the Issuers shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;

     (d) no Default or Event of Default shall have occurred and be continuing on the date of
such deposit (other than a Default or Event of Default resulting from the incurrence of
Indebtedness or the grant of Liens securing such Indebtedness, all or a portion of the
proceeds of which will be used to defease the Notes pursuant to this Article 8 concurrently
with such incurrence or within 30 days thereof) or insofar as Events of Default described in
clause (i) or (j) of Section 6.01 are concerned, at any time in the period ending on the
91st day after the day of deposit;

     (e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, any material agreement or instrument (other
than this Indenture) to which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries is bound;

     (f) the Issuers shall have delivered to the Trustee an Opinion of Counsel (which may be
based on such solvency certificates or solvency opinions as counsel deems necessary or
appropriate) to the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally;

     (g) the Issuers shall have delivered to the Trustee an Officers’ Certificate stating
that the deposit was not made by the Issuers with the intent of preferring the Holders over
any other creditors of the Issuers or with the intent of defeating, hindering, delaying or
defrauding creditors of the Issuers or others; and

     (h) the Issuers shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for or relating to
the Legal Defeasance or the Covenant Defeasance have been complied with.

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Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.

     Subject to Section 8.06 hereof, all money and non-callable Government Securities (including
the proceeds thereof) deposited with the Trustee pursuant to Section 8.04 or 8.08 hereof in respect
of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company or any of its Subsidiaries acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due thereon in respect of
principal, premium, if any, interest and Additional Interest, if any, but such money need not be
segregated from other funds except to the extent required by law.

     The Issuers shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the cash or non-callable Government Securities deposited pursuant to Section
8.04 or 8.08 hereof or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

     Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay
to the Issuers from time to time upon the written request of the Issuers any money or non-callable
Government Securities held by it as provided in Section 8.04 or 8.08 hereof which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance, Covenant Defeasance or Discharge, as the case may be.

     Section 8.06. Repayment to Issuers.

     Subject to applicable escheat and abandoned property laws, any money or non-callable
Government Securities deposited with the Trustee or any Paying Agent, or then held by an Issuer, in
trust for the payment of the principal of or premium, interest or Additional Interest, if any, on
any Note and remaining unclaimed for two years after such principal, premium, interest or
Additional Interest, if any, has become due and payable shall be paid to the Issuers on their
written request or (if then held by an Issuer) shall be discharged from such trust; and the Holder
of such Note shall thereafter, as an unsecured creditor, look only to the Issuers for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money or
non-callable Government Securities, and all liability of the Issuers as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to
make any such repayment, may at the expense of the Issuers cause to be published once, in the New
York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then remaining will be repaid
to the Issuers.

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     Section 8.07. Reinstatement.

     If the Trustee or Paying Agent is unable to apply any money or non-callable Government
Securities in accordance with Section 8.05 hereof, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such application, then
the Issuers’ obligations under this Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.05
hereof; provided, however, that, if an Issuer makes any payment of principal of or premium,
interest, Additional Interest, if any, on any Note following the reinstatement of its obligations,
such Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

     Section 8.08. Discharge.

     This Indenture shall be satisfied and discharged and shall cease to be of further effect as to
all Notes issued hereunder (except for (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in clause (b) of this Section 8.08, and as more fully set
forth in such clause (b), payments in respect of the principal of and premium, if any, interest and
Additional Interest, if any, on such Notes when such payments are due, (b) the Issuers’ obligations
with respect to such Notes under Sections 2.03, 2.04, 2.07, 2.09 and 4.02 hereof and the Appendix
and (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuers’
obligations in connection therewith), when:

     (1) either:

     (a) all Notes that have been authenticated, except lost, stolen or destroyed Notes that
have been replaced or paid and Notes for whose payment money has been deposited in trust and
thereafter repaid to the Issuers, have been delivered to the Trustee for cancellation; or

     (b) all Notes that have not been delivered to the Trustee for cancellation have become
due and payable or will become due and payable within one year by reason of the mailing of a
notice of redemption or otherwise, and the Issuers or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a
combination of cash in U.S. dollars and non-callable Government Securities, in amounts as
will be sufficient without consideration of any reinvestment of interest, to pay and
discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation
for principal, premium, if any, and accrued interest and Additional Interest, if any, to the
date of fixed maturity or redemption;

     (2) no Default or Event of Default has occurred and is continuing on the date of the deposit
or will occur as a result of the deposit and the deposit will not result in a breach or violation
of, or constitute a default under, any material agreement or instrument (other than this Indenture)
to which the Company or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;

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     (3) the Issuers or any Guarantor has paid or caused to be paid all sums payable by it under
this Indenture;

     (4) the Issuers have delivered irrevocable instructions to the Trustee to apply the deposited
money toward the payment of the Notes at fixed maturity or the redemption date, as the case may be;
and

     (5) the Issuers have delivered an Officers’ Certificate and an Opinion of Counsel to the
Trustee stating that all conditions precedent to satisfaction and discharge of this Indenture
(“Discharge”) have been satisfied.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes.

     Notwithstanding Section 9.02 of this Indenture, the Issuers, the Guarantors and the Trustee
may amend or supplement this Indenture or the Notes without the consent of any Holder of a Note:

     (a) to cure any ambiguity, defect or inconsistency;

     (b) to provide for uncertificated Notes in addition to or in place of certificated
Notes;

     (c) to provide for the assumption of an Issuer’s obligations to the Holders of Notes
pursuant to Article 5 hereof;

     (d) to make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights hereunder of any
Holder, provided that any change to conform this Indenture to the Offering Memorandum shall
not be deemed to adversely affect the legal rights hereunder of any Holder;

     (e) to secure the Notes or the Subsidiary Guarantees pursuant to the requirements of
Section 4.12 or otherwise;

     (f) to provide for the issuance of Additional Notes in accordance with the limitations
set forth in this Indenture;

     (g) to add any additional Guarantor with respect to the Notes or to evidence the
release of any Guarantor from its Subsidiary Guarantee in accordance with Article 10 hereof;

     (h) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA; or

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     (i) to evidence or provide for the acceptance of appointment under this Indenture of a
successor Trustee.

     Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Issuers
and the Guarantors in the execution of any amended or supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or immunities under this
Indenture or otherwise.

Section 9.02. With Consent of Holders of Notes.

     Except as provided above in Section 9.01 and below in this Section 9.02, the Issuers, the
Guarantors and the Trustee may amend or supplement this Indenture and the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal amount of the then
outstanding Notes (including consents obtained in connection with a purchase of, or tender offer or
exchange offer for, Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default or compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a purchase of, tender offer or exchange offer for
Notes). However, without the consent of each Holder affected, an amendment, supplement or waiver
may not (with respect to any Notes held by a non-consenting Holder):

     (a) reduce the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;

     (b) reduce the principal of or change the fixed maturity of any Note or alter any of the
provisions with respect to the redemption or repurchase of the Notes (except as provided in
Sections 3.09, 4.10 and 4.15 hereof);

     (c) reduce the rate of or change the time for payment of interest on any Note;

     (d) waive a Default or Event of Default in the payment of principal of or premium, interest or
Additional Interest, if any, on the Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in principal amount of the Notes and a waiver of the payment default
that resulted from such acceleration);

     (e) make any Note payable in money other than that stated in the Notes;

     (f) make any change in the provisions of this Indenture relating to waivers of past Defaults
or Events of Default or the rights of Holders of Notes to receive payments of principal of or
premium, interest or Additional Interest, if any, on the Notes (except as permitted in clause (g)
below);

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     (g) waive a redemption or repurchase payment with respect to any Note (other than a payment
required by Sections 3.09, 4.10 and 4.15 hereof);

     (h) release any Guarantor from any of its obligations under its Subsidiary Guarantee or this
Indenture, except in accordance with the terms of this Indenture; or

     (i) make any change in the preceding amendment, supplement and waiver provisions.

     Upon the request of the Issuers accompanied by Board Resolutions authorizing their execution
of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt
by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the
Issuers and the Guarantors in the execution of such amended or supplemental indenture, unless such
amended or supplemental indenture affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated
to, enter into such amended or supplemental indenture.

     It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to
approve the particular form of any proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof.

     After an amendment, supplement or waiver under this Section becomes effective, the Company
shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such amended or supplemental
Indenture or waiver.

Section 9.03. Compliance with Trust Indenture Act.

     Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended
or supplemental Indenture that complies with the TIA as then in effect.

     A consent to any amendment, supplement or waiver under this Indenture by any Holder given in
connection with a purchase, tender or exchange of such Holder’s Notes shall not be rendered invalid
by such purchase, tender or exchange.

Section 9.04. Revocation and Effect of Consents.

     Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note
is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of
a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the
consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note
may revoke the consent as to its Note if the Trustee receives written notice of revocation before
the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every Holder.

74

 

     The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment or waiver or revoke any consent previously
given, whether or not such Persons continue to be Holders after such record date. No consent shall
be valid or effective for more than 90 days after such record date except to the extent that the
requisite number of consents to the amendment, supplement or waiver have been obtained within such
90-day period or as set forth in the next paragraph of this Section 9.04.

     After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless
it makes a change described in any of clauses (a) through (i) of Section 9.02, in which case, the
amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and
every subsequent Holder of a Note or portion of a Note that evidences the same indebtedness as the
consenting Holder’s Note.

Section 9.05. Notation on or Exchange of Notes.

     The Trustee may place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Issuers, in exchange for all Notes, may issue and the Trustee
shall authenticate new Notes that reflect the amendment, supplement or waiver.

     Failure to make the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.

Section 9.06. Trustee to Sign Amendments, etc.

     The Trustee shall sign any amended or supplemental indenture authorized pursuant to this
Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Indenture.

ARTICLE 10

GUARANTEES OF NOTES

Section 10.01. Subsidiary Guarantees.

     Subject to this Article 10, each of the Guarantors hereby, jointly and severally,
unconditionally guarantees, on a senior unsecured basis, to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Notes held thereby and the Obligations of the
Issuers hereunder and thereunder, that: (a) the principal of and premium, interest and Additional
Interest, if any, on the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at Stated Maturity, by acceleration, upon repurchase or redemption or
otherwise, and interest on the overdue principal of and premium, (to the extent permitted by law)

75

 

interest and Additional Interest, if any, on the Notes, and all other payment Obligations of
the Issuers to the Holders or the Trustee hereunder or thereunder will be promptly paid in full and
performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of
time of payment or renewal of any Notes or any of such other Obligations, the same will be promptly
paid in full when due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at Stated Maturity, by acceleration, upon
repurchase or redemption or otherwise. Failing payment when so due of any amount so guaranteed for
whatever reason, the Guarantors will be jointly and severally obligated to pay the same
immediately. An Event of Default under this Indenture or the Notes shall constitute an event of
default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the
obligations of the Guarantors hereunder in the same manner and to the same extent as the
Obligations of the Issuers.

     The Guarantors hereby agree that their obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against an Issuer, any action to enforce
the same or any other circumstance (other than complete performance) which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor further, to
the extent permitted by law, hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of an Issuer, any right to require a
proceeding first against an Issuer, protest, notice and all demands whatsoever and covenants that
its Subsidiary Guarantee will not be discharged except by complete performance of the Obligations
contained in the Notes and this Indenture.

     If any Holder or the Trustee is required by any court or otherwise to return to an Issuer, the
Guarantors, or any Custodian, Trustee or other similar official acting in relation to any of the
Issuers or the Guarantors, any amount paid by an Issuer or any Guarantor to the Trustee or such
Holder, the Subsidiary Guarantees, to the extent theretofore discharged, shall be reinstated in
full force and effect. Each Guarantor agrees that it shall not be entitled to, and hereby waives,
any right of subrogation in relation to the Holders in respect of any Obligations guaranteed
hereby.

     Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (a) the maturity of the Obligations guaranteed hereby
may be accelerated as provided in Article 6 hereof for the purposes of its Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect
of the Obligations guaranteed thereby, and (b) in the event of any declaration of acceleration of
such Obligations as provided in Article 6 hereof, such Obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantor for the purpose of its Subsidiary
Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor
so long as the exercise of such right does not impair the rights of the Holders under the
Subsidiary Guarantees.

Section 10.02. [Reserved].

76

 

Section 10.03. Guarantors May Consolidate, etc., on Certain Terms.

     (a) No Guarantor shall sell or otherwise dispose of all or substantially all of its properties
or assets to, or consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person), another Person (other than the Company or another Guarantor), unless, (i) either
(1) the Person acquiring the properties or assets in any such sale or other disposition or the
Person formed by or surviving any such consolidation or merger (if other than such Guarantor)
unconditionally assumes all the obligations of such Guarantor, pursuant to a supplemental
indenture, substantially in the form of Annex A hereto, under the Notes, this Indenture and its
Subsidiary Guarantee on terms set forth therein, or (2) the Net Proceeds of such sale or other
disposition are applied in accordance with the provisions of Section 4.10, and (ii) immediately
after giving effect to such transaction, no Default or Event of Default exists.

     (b) In the case of any such consolidation or merger and upon the assumption by the successor
Person, by supplemental indenture, executed and delivered to the Trustee and substantially in the
form of Annex A hereto, of the Subsidiary Guarantee and the due and punctual performance of all of
the covenants of this Indenture to be performed by the Guarantor, such successor Person shall
succeed to and be substituted for the Guarantor with the same effect as if it had been named herein
as a Guarantor.

Section 10.04. Releases of Subsidiary Guarantees.

     The Subsidiary Guarantee of a Guarantor shall be released: (1) in connection with any sale or
other disposition of all or substantially all of the properties or assets of such Guarantor
(including by way of merger or consolidation) to a Person that is not (either before or after
giving effect to such transaction) a Restricted Subsidiary of the Company, if the sale or other
disposition complies with Section 4.10; (2) in connection with any sale or other disposition of all
of the Capital Stock of such Guarantor to a Person that is not (either before or after giving
effect to such transaction) a Restricted Subsidiary of the Company, if the sale or other
disposition complies with Section 4.10; (3) if the Company designates any Restricted Subsidiary
that is a Guarantor as an Unrestricted Subsidiary in accordance with Section 4.20 of this
Indenture; (4) upon Legal Defeasance or Covenant Defeasance or Discharge in accordance with Article
8; or (5) at such time as such Guarantor ceases to guarantee any other Indebtedness of either of
the Issuers and any Indebtedness of any other Guarantor, provided that it is then no longer an
obligor with respect to any Indebtedness under any Credit Facility.

     Upon delivery by the Company to the Trustee of an Officers’ Certificate to the effect that any
of the conditions described in the foregoing clauses (1) – (6) has occurred, the Trustee shall
execute any documents reasonably requested by the Company in order to evidence the release of any
Guarantor from its obligations under its Subsidiary Guarantee. Any Guarantor not released from its
obligations under its Subsidiary Guarantee shall remain liable for the full amount of principal of
and premium, interest and Additional Interest, if any, on the Notes and for the other obligations
of such Guarantor under this Indenture as provided in this Article 10.

77

 

Section 10.05. [Reserved].

Section 10.06. Limitation on Guarantor Liability.

     The obligations of each Guarantor under its Subsidiary Guarantee will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under its Subsidiary
Guarantee or pursuant to its contribution obligations under this Indenture, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under federal or state law and not otherwise being void or
voidable under any similar laws affecting the rights of creditors generally.

Section 10.07. “Trustee” to Include Paying Agent.

     In case at any time any Paying Agent other than the Trustee shall have been appointed and be
then acting hereunder, the term “Trustee” as used in this Article 10 shall in each case (unless the
context shall otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying Agent were named in
this Article 10 in place of the Trustee.

ARTICLE 11

MISCELLANEOUS

Section 11.01. Trust Indenture Act Controls.

     If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by
TIA §318(c), such TIA-imposed duties shall control.

Section 11.02. Notices.

     Any notice or communication by an Issuer, any Guarantor or the Trustee to the others is duly
given if in writing (in the English language) and delivered in person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight air courier
guaranteeing next day delivery, to the others’ address:

     If to any of the Issuers or the Guarantors:

Copano Energy, L.L.C.

2727 Allen Parkway, Suite 1200

Houston, Texas 77019

Attention: Chief Financial Officer

Telecopier No.: (713) 737-9047

78

 

     with a copy to:

Vinson & Elkins L.L.P.

2300 First City Tower

1001 Fannin St.

Houston, Texas 77002-6760

Attention: David P. Oelman

Telecopier No.: (713) 615-5861

     If to the Trustee:

U.S. Bank National Association

EX-TX-DCRE

14241 Dallas Parkway, Suite 490

Dallas, Texas 75254

Attention: Corporate Trust Department

Telecopier No.: (972) 789-9605

     An Issuer, any of the Guarantors or the Trustee, by notice to the others, may designate
additional or different addresses for subsequent notices or communications.

     All notices and communications (other than those sent to Holders) shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if telecopied; and
the next Business Day after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery in each case to the address shown above.

     Any notice or communication to a Holder shall be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. Any notice or communication shall also be
so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.

     If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.

     If either of the Issuers mails a notice or communication to Holders, it shall mail a copy to
the Trustee and each Agent at the same time.

Section 11.03. Communication by Holders of Notes with Other Holders of Notes.

     Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their
rights under this Indenture or the Notes. The Issuers, the Trustee, the Registrar and anyone else
shall have the protection of TIA § 312(c).

79

 

Section 11.04. Certificate and Opinion as to Conditions Precedent.

     Upon any request or application by an Issuer to the Trustee to take any action under this
Indenture, such Issuer shall furnish to the Trustee:

          (a) an Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that,
in the opinion of the signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied; and

          (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which shall include the statements set forth in Section 11.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 11.05. Statements Required in Certificate or Opinion.

     Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply
with the provisions of TIA § 314(e) and shall include:

          (a) a statement that the person making such certificate or opinion has read such
covenant or condition;

          (b) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;

          (c) a statement that, in the opinion of such person, he or she has made such
examination or investigation as is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been satisfied; and

          (d) a statement as to whether or not, in the opinion of such person, such condition or
covenant has been satisfied.

Section 11.06. Rules by Trustee and Agents.

     The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar
or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 11.07. No Personal Liability of Directors, Officers, Employees and Unitholders.

     No past, present or future director, officer, partner, employee, incorporator, manager or
unitholder or other owner of Capital Stock of the Issuers or any Guarantor, as such, shall have any
liability for any obligations of the Issuers or any Guarantor under the Notes, the Subsidiary
Guarantees or this Indenture or for any claim based on, in respect of, or by reason of, such

80

 

obligations or their creation. Each Holder of Notes by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration for issuance of the
Notes.

Section 11.08. Governing Law.

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

Section 11.09. No Adverse Interpretation of Other Agreements.

     This Indenture may not be used to interpret any other indenture, loan or debt agreement of the
Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.

Section 11.10. Successors.

     All agreements of the Issuers and the Guarantors in this Indenture and the Notes shall bind
their respective successors. All agreements of the Trustee in this Indenture shall bind its
successors.

Section 11.11. Severability.

     In case any provision in this Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

Section 11.12. Table of Contents, Headings, etc.

     The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be considered a part of
this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 11.13. Counterparts.

     This Indenture may be signed in counterparts and by the different parties hereto in separate
counterparts, each of which shall constitute an original and all of which together shall constitute
one and the same instrument.

[Signatures on following page]

81

 

SIGNATURES

	 	 	 	 	 
	 	 	Copano Energy, L.L.C.
	 
	 	 	 	 
	 	 	By:	 /s/ Matthew J. Assiff
	 
	 	 	 	 
	 	 	Matthew J. Assiff
	 	 	Senior Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	Copano Energy Finance Corporation
	 
	 	 	 	 
	 	 	By:	 /s/ Matthew J. Assiff
	 

	 	 	 	 
	 	 	Matthew J. Assiff
	 	 	Senior Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	Guarantors

	 
	 	 	 	 
	 	 	Scissortail Energy, LLC
	 	 	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.
	 	 	Nueces Gathering, L.L.C.
	 	 	Estes Cove facilities, L.L.C.
	 
	 	 	 	 
	 	 	By:	 /s/ Matthew J. Assiff
	 

	 	 	 	 
	 	 	Matthew J. Assiff
	 	 	Senior Vice President and Chief Financial Officer

82

 

	 	 	 	 	 
	 	 	Copano Processing, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Copano Processing GP, L.L.C.,
	 

	 	 	 	General Partner
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Matthew J. Assiff
	 

	 	 	 	 
	 	 	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:	 	 /s/ Matthew J. Assiff
	 

	 	 	 	 
	 	 	Matthew J. Assiff

	 	 	Senior Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	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:	 	 /s/ Susan T. Dubb
	 

	 	 	 	 
	 	 	Susan T. Dubb
	 	 	Vice President and Assistant Secretary

83

 

	 	 	 	 	 
	 	 	Copano Field Services/Aqua 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.LC.,
	 

	 	 	 	General Partner
	 
	 	 	 	 
	 

	 	By:	 	/s/ Matthew J. Assiff 
	 

	 	 	 	 
	 	 	 	 	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:	 	/s/ Matthew J. Assiff 
	 

	 	 	 	 
	 	 	 	 	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:	 	/s/ Matthew J. Assiff 
	 

	 	 	 	 
	 	 	 	 	Matthew J. Assiff

	 	 	 	 	Senior Vice President and Chief Financial Officer

84

 

	 	 	 	 	 
	 	 	Copano Field Services/Central Gulf 

	 	 	 Coast, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Copano Field Services/Central

 Gulf coast GP, L.L.C., General Partner
	 
	 	 	 	 
	 

	 	By:	 	/s/ Matthew J. Assiff 
	 

	 	 	 	 
	 	 	 	 	Matthew J. Assiff

	 	 	 	 	Senior Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	Copano Energy Services/Upper Gulf
	 	 	 Coast, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Copano
Energy Services GP, L.L.C.,

General Partner
	 
	 	 	 	 
		 	By:	 	/s/ Matthew J. Assiff 
	 

	 	 	 	 
	 	 	 	 	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:	 	/s/ Matthew J. Assiff 
	 

	 	 	 	 
	 	 	 	 	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:	 	/s/ Matthew J. Assiff 
	 

	 	 	 	 
	 	 	 	 	Matthew J. Assiff

	 	 	 	 	Senior Vice President and Chief Financial Officer

85

 

	 	 	 	 	 
	 	 	CPNO Services, L.P.

	 	 	Copano Risk Management, L.P.
	 
	 	 	 	 
	 

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

General Partner
	 
	 	 	 	 
	 

	 	By:	 	/s/ Matthew J. Assiff 
	 

	 	 	 	 
	 	 	 	 	Matthew J. Assiff

	 	 	 	 	Senior Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	U.S. Bank National Association, as Trustee
	 
	 	 	 	 
	 

	 	By:	 	/s/ Kevin McIllwaine 
	 

	 	 	 	 
	 	 	[Name]
	 	 	[Title]

86

 

RULE 144A/REGULATION S APPENDIX

PROVISIONS RELATING TO INITIAL NOTES,

PRIVATE EXCHANGE NOTES

AND EXCHANGE NOTES

1. Definitions

     1.1 Definitions.

     For the purposes of this Appendix the following terms shall have the meanings indicated below:

     “Depository” means The Depository Trust Company, its nominees and their respective successors.

     “Exchange Notes” means (1) the 8.125% Senior Notes due 2016 issued pursuant to the Indenture
in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2)
Additional Notes, if any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.

     “Initial Notes” means (1) $225.0 million aggregate principal amount of 8.125% Senior Notes due
2016 issued on the Initial Issuance Date and (2) Additional Notes, if any, issued in a transaction
exempt from the registration requirements of the Securities Act.

          “Initial Purchasers” means (1) with respect to the Initial Notes issued on the Initial
Issuance Date, Banc of America Securities LLC, Credit Suisse Securities (USA) LLC, Goldman, Sachs &
Co., Lehman Brothers Inc., Comerica Securities, Inc., Fortis Securities LLC, KeyBanc Capital
Markets, a Division of McDonald Investments Inc., Piper Jaffray & Co., RBC Capital Markets
Corporation and Sanders Morris Harris Inc., and (2) with respect to each issuance of Additional
Notes, the Persons purchasing such Additional Notes under the related Purchase Agreement.

     “Notes” means the Initial Notes, the Additional Notes, the Exchange Notes and the Private
Exchange Notes, treated as a single class.

     “Notes Custodian” means the custodian with respect to a Global Note (as appointed by the
Depository), or any successor Person thereto and shall initially be the Trustee.

     “Private Exchange” means the offer by the Company, pursuant to a Registration Rights
Agreement, to the Initial Purchasers to issue and deliver to each Initial Purchaser, in exchange
for the Initial Notes held by the Initial Purchaser as part of its initial distribution, a like
aggregate principal amount of Private Exchange Notes.

     “Private Exchange Notes” means any 8.125% Senior Notes due 2016 issued in connection with a
Private Exchange.

App. -1

 

     “Purchase Agreement” means (1) with respect to the Initial Notes issued on the Initial
Issuance Date, the Purchase Agreement dated January 31, 2006 among the Issuers, the Guarantors and
the Initial Purchasers, and (2) with respect to each issuance of Additional Notes, the purchase
agreement or underwriting agreement among the Issuers and the Persons purchasing such Additional
Notes.

     “Registered Exchange Offer” means the offer by the Issuers, pursuant to a Registration Rights
Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange
for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the
Securities Act.

     “Registration Rights Agreement” means (1) with respect to the Initial Notes issued on the
Initial Issuance Date, the Registration Rights Agreement dated February 7, 2006 among the Issuers,
the Guarantors and the Initial Purchasers, a form of which is attached to this Indenture as Annex
B, and (2) with respect to each issuance of Additional Notes issued in a transaction exempt from
the registration requirements of the Securities Act, the registration rights agreement, if any,
among the Issuers and the Persons purchasing such Additional Notes under the related Purchase
Agreement.

     “Shelf Registration Statement” means the registration statement issued by the Company in
connection with the offer and sale of Initial Notes or Private Exchange Notes pursuant to a
Registration Rights Agreement.

     “Transfer Restricted Securities” means Notes that bear or are required to bear the legend set
forth in Section 2.3(b) hereof.

     1.2 Other Definitions.

	 	 	 	 	 
	Term	 	Defined in Section:
	“Agent Members”
	 	 	2.1	(b)
	“Distribution Compliance Period”
	 	 	2.1	(b)
	“Global Note”
	 	 	2.1	(a)
	“Regulation S”
	 	 	2.1	(a)
	“Regulation S Notes”
	 	 	2.1	(a)
	“Restricted Global Note”
	 	 	2.1	(a)
	“Rule 144A”
	 	 	2.1	(a)
	“Rule 144A Notes”
	 	 	2.1	(a)

2. The Notes.

     2.1 (a) Form and Dating. Initial Notes offered and sold to QIBs in reliance on Rule
144A (“Rule 144A Notes”) under the Securities Act (“Rule 144A”) or in reliance on Regulation S
(“Regulation S Notes”) under the Securities Act (“Regulation S”), in each case as provided in a
Purchase Agreement, and Private Exchange Notes, as provided in a Registration Rights Agreement,
shall be issued initially in the form of one or more permanent global Notes in definitive, fully
registered form without interest coupons with the global Notes legend and

App. -2

 

restricted Notes legend set forth in Exhibit 1 hereto (each, a “Restricted Global Note”),
which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with
the Trustee, as custodian for the Depository (or with such other custodian as the Depository may
direct), and registered in the name of the Depository or a nominee of the Depository, duly executed
by the Issuers and authenticated by the Trustee as hereinafter provided. Beneficial interests in a
Restricted Global Note representing Initial Notes sold in reliance on either Rule 144A or
Regulation S may be held through Euroclear or Clearstream, as indirect participants in the
Depository. The aggregate principal amount of the Global Notes may from time to time be increased
or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as
hereinafter provided. Exchange Notes shall be issued in global form (with the global Notes legend
set forth in Exhibit 1 hereto) or in certificated form as provided in Section 2.4 of this Appendix.
Exchange Notes issued in global form and Restricted Global Notes are sometimes referred to in this
Appendix as “Global Notes”.

     (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Note
deposited with or on behalf of the Depository.

     The Issuers shall execute and the Trustee shall, in accordance with this Section 2.1(b),
authenticate and deliver initially one or more Global Notes that (a) shall be registered in the
name of the Depository for such Global Note or Global Notes or the nominee of such Depository and
(b) shall be delivered by the Trustee to such Depository or pursuant to such Depository’s
instructions or held by the Trustee as custodian for the Depository. If such Global Notes are
Restricted Global Notes, then separate Global Notes shall be issued to represent Rule 144A Notes
and Regulation S Notes so long as required by law or the Depository.

     Members of, or participants in, the Depository (“Agent Members”) shall have no rights under
this Indenture with respect to any Global Note held on their behalf by the Depository or by the
Trustee as the custodian of the Depository or under such Global Note, and the Issuers, the Trustee
and any agent of the Issuers or the Trustee shall be entitled to treat the Depository as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Issuers, the Trustee or any agent of the Issuers or the Trustee
from giving effect to any written certification, proxy or other authorization furnished by the
Depository or impair, as between the Depository and its Agent Members, the operation of customary
practices of such Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Note.

     Until the 40th day after the later of the commencement of the offering of any Initial Notes
and the original issue date of such Initial Notes (such period, the “Distribution Compliance
Period”), a beneficial interest in a Restricted Global Note representing Regulation S Notes may be
transferred to a Person who takes delivery in the form of an interest in a Restricted Global Note
representing Rule 144A Notes only if the transferor first delivers to the Trustee a written
certificate (in the form provided in Exhibit 1 hereto) to the effect that such transfer is being
made to a Person who the transferor reasonably believes is purchasing for its own account or
accounts as to which it exercises sole investment discretion and that such Person is a QIB, in each
case in a transaction meeting the requirements of Rule 144A and in accordance with any applicable
securities laws of any state of the United States or any other jurisdiction. After the expiration
of the Distribution Compliance Period, such certification requirements shall not apply to such
transfers of beneficial interests in a Restricted Global Note representing Regulation S Notes.

App. -3

 

     Beneficial interests in a Restricted Global Note representing Rule 144A Notes may be
transferred to a Person who takes delivery in the form of an interest in a Restricted Global Note
representing Regulation S Notes, whether before or after the expiration of the Distribution
Compliance Period, only if the transferor first delivers to the Trustee a written certificate (in
the form provided in Exhibit 1 hereto) to the effect that such transfer is being made in accordance
with Rule 904 of Regulation S or Rule 144 (if available).

     (c) Certificated Notes. Except as provided in Section 2.3 or 2.4, owners of
beneficial interests in Restricted Global Notes shall not be entitled to receive physical delivery
of certificated Notes. Certificated Notes shall not be exchangeable for beneficial interests in
Global Notes.

     2.2 Authentication. The Trustee shall authenticate and deliver: (1) on the Initial
Issuance Date, an aggregate principal amount of $225.0 million 8.125% Senior Notes due 2016, (2)
any Additional Notes for an original issue in an aggregate principal amount specified in the
written order of the Issuers pursuant to Section 2.02 of the Indenture and (3) Exchange Notes or
Private Exchange Notes for issue only in a Registered Exchange Offer or a Private Exchange,
respectively, pursuant to a Registration Rights Agreement, for a like principal amount of Initial
Notes, in each case upon a written order of the Issuers. Such order shall specify the amount of
the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated
and to whom the Notes shall be registered and delivered and, in the case of any issuance of
Additional Notes pursuant to Section 2.13 of the Indenture, shall certify that such issuance is in
compliance with Section 4.09 of the Indenture.

     2.3 Transfer and Exchange.

     (a) Transfer and Exchange of Global Notes. (i) The transfer and exchange of Global
Notes or beneficial interests therein shall be effected through the Depository, in accordance with
this Indenture (including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depository therefor. A transferor of a beneficial interest in a Global Note
shall deliver to the Registrar a written order given in accordance with the Depository’s procedures
containing information regarding the participant account of the Depository to be credited with a
beneficial interest in the Global Note. The Registrar shall, in accordance with such instructions
instruct the Depository to credit to the account of the Person specified in such instructions a
beneficial interest in the Global Note and to debit the account of the Person making the transfer
the beneficial interest in the Global Note being transferred.

     (ii) Notwithstanding any other provisions of this Appendix, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such successor
Depository.

     (iii) In the event that a Restricted Global Note is exchanged for Notes in certificated
form pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered
Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such
Notes, such Notes may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial Notes

App. -4

 

intended to ensure that such transfers comply with Rule 144A or Regulation S, as the
case may be) and such other procedures as may from time to time be adopted by the Company.

     (b) Legend.

     (i) Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note
certificate evidencing the Restricted Global Notes (and all Notes issued in exchange
therefor or in substitution thereof) shall bear a legend in substantially the following
form:

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE
HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH AN ISSUER OR ANY AFFILIATE OF AN ISSUER WAS THE OWNER
OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) (THE “RESALE RESTRICTION TERMINATION DATE”)
ONLY (A) TO AN ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES
TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) PRIOR TO THE END
OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.

App. -5

 

     (ii) Upon any sale or transfer of a Transfer Restricted Security (including any
Transfer Restricted Security represented by a Restricted Global Note) pursuant to Rule 144
under the Securities Act, the Registrar shall permit the transferee thereof to exchange such
Transfer Restricted Security for a certificated Note that does not bear the legend set forth
above and rescind any restriction on the transfer of such Transfer Restricted Security, if
the transferor thereof certifies in writing to the Registrar that such sale or transfer was
made in reliance on Rule 144 (such certification to be in the form set forth on the reverse
of the Note).

     (iii) After a transfer of any Initial Notes or Private Exchange Notes pursuant to and
during the period of the effectiveness of a Shelf Registration Statement with respect to
such Initial Notes or Private Exchange Notes, as the case may be, all requirements
pertaining to legends on such Initial Note or such Private Exchange Note will cease to
apply, the requirements requiring any such Initial Note or such Private Exchange Note issued
to certain Holders be issued in global form will cease to apply, and a certificated Initial
Note or Private Exchange Note or an Initial Note or Private Exchange Note in global form, in
each case without restrictive transfer legends, will be available to the transferee of the
Holder of such Initial Notes or Private Exchange Notes upon exchange of such transferring
Holder’s certificated Initial Note or Private Exchange Note or directions to transfer such
Holder’s interest in the Global Note, as applicable.

     (iv) Upon the consummation of a Registered Exchange Offer with respect to the Initial
Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to
certain Holders be issued in global form will still apply with respect to Holders of such
Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated
or global form will be available to Holders that exchange such Initial Notes in such
Registered Exchange Offer.

     (v) Upon the consummation of a Private Exchange with respect to the Initial Notes, all
requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders
be issued in global form will still apply with respect to Holders of such Initial Notes that
do not exchange their Initial Notes, and Private Exchange Notes in global form with the
global Notes legend and the Restricted Notes legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Notes in such Private Exchange.

     (c) Cancellation or Adjustment of Global Note. At such time as all beneficial
interests in a Global Note have either been exchanged for certificated Notes, redeemed, purchased
or canceled, such Global Note shall be returned to the Trustee for cancellation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal
amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on
the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with
respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.

App. -6

 

(d) Obligations with Respect to Transfers and Exchanges of Notes.

     (i) To permit registrations of transfers and exchanges, the Issuers shall execute and
the Trustee shall authenticate certificated Notes and Global Notes at the Registrar’s
request.

     (ii) No service charge shall be made for any registration of transfer or exchange, but
the Issuers may require payment of a sum sufficient to cover any transfer tax, assessments
or similar governmental charge payable in connection therewith (other than any such transfer
taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant
to Sections 3.06, 4.10, 4.15 and 9.05 and of the Indenture).

     (iii) The Registrar shall not be required to register the transfer of or exchange of
any Note or portion of a Note selected for redemption, except for the unredeemed portion of
any Note being redeemed in part. Also, it need not exchange or register the transfer of any
Notes for a period of 15 days before a selection of Notes to be redeemed.

     (iv) Prior to the due presentation for registration of transfer of any Note, the
Issuers, the Guarantors, the Trustee, the Paying Agent or the Registrar may deem and treat
the Person in whose name a Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of, premium, if any, interest and Additional
Interest, if any, on such Note and for all other purposes whatsoever, whether or not such
Note is overdue, and none of the Issuers, the Guarantors, the Trustee, the Paying Agent or
the Registrar shall be affected by notice to the contrary.

     (v) All Notes issued upon any transfer or exchange pursuant to the terms of this
Indenture shall evidence the same debt and shall be entitled to the same benefits under this
Indenture as the Notes surrendered upon such transfer or exchange.

(e) No Obligation of the Trustee.

     (i) The Trustee shall have no responsibility or obligation to any beneficial owner of a
Global Note, a member of, or a participant in the Depository or other Person with respect to
the accuracy of the records of the Depository or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Notes or with respect to the delivery
to any participant, member, beneficial owner or other Person (other than the Depository) of
any notice (including any notice of optional redemption) or the payment of any amount, under
or with respect to such Notes. All notices and communications to be given to the Holders
and all payments to be made to Holders under the Notes shall be given or made only to or
upon the order of the registered Holders (which shall be the Depository or its nominee in
the case of a Global Note). The rights of beneficial owners in any Global Note shall be
exercised only through the Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its members, participants and any beneficial
owners.

     (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as
to compliance with any restrictions on transfer imposed under this Indenture or under
Applicable Law with respect to any transfer of any interest in any Note (including any
transfers between or among Depository participants, members or beneficial owners in

App. -7

 

any Global Note) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.

2.4 Certificated Notes.

     (a) A Global Note deposited with the Depository or with the Trustee as custodian for the
Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the
form of certificated Notes in an aggregate principal amount equal to the principal amount of such
Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and
(i) the Depository notifies the Issuers that it is unwilling or unable to continue as Depository
for such Global Note or if at any time such Depository ceases to be a “clearing agency” registered
under the Exchange Act and in either event a successor depositary is not appointed by the Issuers
within 90 days, or (ii) an Event of Default has occurred and is continuing and DTC notifies the
Trustee of its decision to exchange the Global Notes.

     (b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this
Section shall be surrendered by the Depository or the Notes Custodian to the Trustee located at its
Corporate Trust Office to be so transferred, in whole or from time to time in part, without charge,
and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global
Note, an equal aggregate principal amount of certificated Notes of authorized denominations. Any
portion of a Global Note transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 principal amount and any integral multiple thereof and
registered in such names as the Depository shall direct. Any certificated Note or Private Exchange
Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided
by Section 2.3(b), bear the restricted Notes legend set forth in Exhibit 1 hereto.

     (c) Subject to the provisions of Section 2.4(b), the Holder of a Global Note shall be entitled
to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is entitled to take under
this Indenture or the Notes.

     (d) In the event of the occurrence of any of the events specified in Section 2.4(a), the
Issuers shall promptly make available to the Trustee a reasonable supply of certificated Notes in
definitive, fully registered form without interest coupons.

App. -8

 

EXHIBIT 1 TO RULE 144A/REGULATION S APPENDIX

[FORM OF FACE OF INITIAL NOTE]

[Global Notes Legend]

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO AN ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) 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.

     TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Restricted Notes Legend]

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH AN
ISSUER OR ANY AFFILIATE OF AN ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE)
(THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO AN ISSUER OR ANY SUBSIDIARY THEREOF, (B)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES
TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED

Ex. 1 to App. -1

 

STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE
(D) PRIOR TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION
DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.

Ex. 1 to App. -2

 

COPANO ENERGY, L.L.C.

COPANO ENERGY FINANCE CORPORATION

	 	 	 	 	 
	No.

	 	 	$	 

CUSIP No.

ISIN No.

8.125% Senior Note due 2016

     Copano Energy, L.L.C., a Delaware limited liability company, and Copano Energy Finance
Corporation, a Delaware corporation, jointly and severally promise to pay to ___, or
registered assigns, the principal sum of                     Dollars on March 1, 2016 [or such greater or
lesser amount as may be indicated on Schedule A hereto].1

     Interest Payment Dates: March 1 and September 1.

     Record Dates: February 15 and August 15.

     Additional provisions of this Note are set forth on the other side of this Note.

	 	 	 	 	 	 	 
	 	 	Copano Energy, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	Copano Energy Finance Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

			
	1	 	If this Note is a Global Note, add this provision.

Ex. 1 to App. -3

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

U.S. Bank National Association,

as Trustee, certifies that

this is one of the Notes

referred to in the Indenture.

	 	 	 	 	 
	By
	 	 	 	 
	 

	 	 

Authorized Signatory
	 	 
	Dated:	 	 

Ex. 1 to App. -4

 

[FORM OF REVERSE SIDE OF INITIAL NOTE]

8.125% Senior Note due 2016

     Capitalized terms used herein but not defined shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

     1. Interest. Copano Energy, L.L.C., a Delaware limited liability company (the
“Company”), and Copano Energy Finance Corporation, a Delaware corporation (the “Finance Corp.” and,
together with the Company, the “Issuers”), jointly and severally promise to pay interest on the
principal amount of this Note at 8.125% per annum from February 7, 2006 until maturity and shall
pay the Additional Interest payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Issuers will pay interest and Additional Interest, if any, semi-annually in
arrears on March 1 and September 1 of each year, commencing September 1, 2006, or if any such day
is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”).
Interest on the Notes will accrue from the most recent date to which interest has been paid or, if
no interest has been paid, from the date of original issuance; provided that if there is no
existing Default or Event of Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date, except in the case of the
original issuance of Notes, in which case interest shall accrue from the date of authentication.
The Issuers shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate
that is the rate then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest
(without regard to any applicable grace periods) from time to time on demand at the same rate to
the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

     2. Method of Payment. The Issuers will pay interest on the Notes (except defaulted
interest) and Additional Interest to the Persons who are registered Holders of Notes at the close
of business on the February 15 or August 15 next preceding the Interest Payment Date, even if such
Notes are cancelled after such record date and on or before such Interest Payment Date, except as
provided in Section 2.11 of the Indenture with respect to defaulted interest. Holders must
surrender Notes to the Paying Agent to collect payments of principal and premium, if any, together
with accrued and unpaid interest and Additional Interest, if any, due at maturity. The Notes will
be payable as to principal, premium, if any, interest and Additional Interest, if any, at the
office or agency of the Issuers maintained for such purpose within the City and State of New York,
or, at the option of the Issuers, payment of interest and Additional Interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders, and provided that
payment by wire transfer of immediately available funds will be required with respect to any
amounts due on all Global Notes and all other Notes the Holders of which shall have provided wire
transfer instructions to the Issuers or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal tender for payment of
public and private debts.

     3. Paying Agent and Registrar. Initially, U.S. Bank National Association, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may change

Ex. 1 to App. -5

 

any Paying Agent or Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.

     4. Indenture. The Issuers issued the Notes under an Indenture dated as of February 7,
2006 (“Indenture”) among the Issuers, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are unsecured senior obligations of the Issuers limited to $225,000,000 aggregate
principal amount in the case of Notes issued on the Initial Issuance Date (as defined in the
Indenture).

     5. Optional Redemption.

     (a) Except as set forth in subparagraphs (b) and (c) of this Paragraph 5, the Issuers shall
not have the option to redeem the Notes prior to March 1, 2011. On or after March 1, 2011, the
Issuers shall have the option to redeem the Notes, in whole or in part at any time, upon prior
notice as set forth in Paragraph 8, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, to the
applicable redemption date (subject to the right of Holders of record on the relevant record date
to receive interest due on an Interest Payment Date that is on or prior to the redemption date), if
redeemed during the twelve-month period beginning on March 1 of the years indicated below:

	 	 	 	 	 
	YEAR	 	PERCENTAGE
	2011
	 	 	104.0625	%
	2012
	 	 	102.7083	%
	2013
	 	 	101.3542	%
	2014 and thereafter
	 	 	100.0000	%

     (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior
to March 1, 2009, the Issuers may on any one or more occasions redeem up to 35% of the aggregate
principal amount of Notes (including any Additional Notes) issued under the Indenture at a
redemption price of 108.125% of the principal amount thereof, plus accrued and unpaid interest and
Additional Interest, if any, thereon to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest Payment Date that is on
or prior to the redemption date), with the net cash proceeds of one or more Equity Offerings by the
Company; provided that (i) at least 65% of the aggregate principal amount of Notes (including any
Additional Notes) issued under the Indenture remains outstanding immediately after the occurrence
of each such redemption (excluding any Notes held by the Company and its Subsidiaries) and (ii)
each such redemption occurs within 120 days of the date of the closing of each such Equity
Offering.

     (c) Prior to March 1, 2011, the Issuers may redeem all or part of the notes upon not less than
30 nor more than 60 days’ notice, at a redemption price equal to the sum of (1) the principal
amount thereof, plus (2) accrued and unpaid interest, if any, to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest due on an

Ex. 1 to App. -6

 

interest payment date that is on or prior to the redemption date), plus (3) the Make Whole
Premium at the redemption date.

     6. Mandatory Redemption.

     Except as set forth in Paragraph 7 below, neither of the Issuers shall be required to make
mandatory redemption or sinking fund payments with respect to the Notes or to repurchase the Notes
at the option of the Holders.

     7. Repurchase at Option of Holder.

     (a) Within 30 days following the occurrence of a Change of Control, the Company shall make an
offer (a “Change of Control Offer”) to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of each Holder’s Notes at a purchase price equal to 101% of the aggregate
principal amount of Notes repurchased, plus accrued and unpaid interest and Additional Interest, if
any, to the date of settlement (the “Change of Control Settlement Date”), subject to the right of
Holders of record on the relevant record date to receive interest due on an Interest Payment Date
that is on or prior to the Change of Control Settlement Date. Within 30 days following a Change of
Control, the Company shall mail a notice of the Change of Control Offer to each Holder and the
Trustee describing the transaction that constitutes the Change of Control and setting forth the
procedures governing the Change of Control Offer as required by Section 4.15 of the Indenture.

     (b) On the 361st day after an Asset Sale, if the aggregate amount of Excess Proceeds then
exceeds $20.0 million, the Company shall commence an offer to all Holders of Notes (an “Asset Sale
Offer”) pursuant to Section 3.09 of the Indenture, and to all holders of any Pari Passu
Indebtedness then outstanding, to purchase the maximum principal amount of Notes and such Pari
Passu Indebtedness that may be purchased out of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the principal amount of the Notes plus accrued and unpaid interest and
Additional Interest, if any, thereon to the date of settlement, subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest Payment Date that is on
or prior to the Change of Control Settlement Date, in accordance with the procedures set forth in
the Indenture. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such remaining Excess Proceeds for any purpose not otherwise prohibited by the
Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and Pari
Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and Pari Passu Indebtedness to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in
denominations of $1,000, or integral multiples thereof, shall be purchased) on the basis of the
aggregate principal amount of tendered Notes and Pari Passu Indebtedness. Holders of Notes that
are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to
any related purchase date and may elect to have such Notes purchased by completing the form
entitled “Option of Holder to Elect Purchase” on the reverse of the Notes.

     8. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not
more than 60 days (except as otherwise provided in the Indenture if the notice is issued in

Ex. 1 to App. -7

 

connection with a Legal Defeasance, Covenant Defeasance or Discharge) before the redemption
date to each Holder whose Notes are to be redeemed at its registered address. If mailed in the
manner provided for in Section 3.03 of the Indenture, the notice of optional redemption shall be
conclusively presumed to have been given whether or not a Holder receives such notice. Failure to
give timely notice or any defect in the notice shall not affect the validity of the redemption.
Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption
date interest and Additional Interest, if any, cease to accrue on Notes or portions thereof called
for redemption.

     9. Guarantees. The payment by the Issuers of the principal of and premium, interest
and Additional Interest, if any, on the Notes is fully and unconditionally guaranteed on a joint
and several senior unsecured basis by each of the Guarantors to the extent set forth in the
Indenture.

     10. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be
registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements and transfer
documents, and the Company may require a Holder to pay any taxes due on transfer or exchange. The
Issuers need not exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in part. Also, they need
not exchange or register the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed.

     11. Persons Deemed Owners. The registered Holder of a Note may be treated as its
owner for all purposes.

     12. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or
the Notes may be amended or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority
in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented (1) to cure any ambiguity, defect or
inconsistency, (2) to provide for uncertificated Notes in addition to or in place of certificated
Notes, (3) to provide for the assumption of an Issuer’s obligations to Holders of the Notes
pursuant to Article 5 of the Indenture, (4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, provided that any change to conform the Indenture to the
Offering Memorandum shall not be deemed to adversely affect the legal rights under the Indenture of
any Holder, (5) to secure the Notes or the Subsidiary Guarantees pursuant to Section 4.12 of the
Indenture or otherwise, (6) to provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture, (7) to add any additional Guarantor with respect to the
Notes or to evidence the release of any Guarantor from its Subsidiary Guarantee, in each case as
provided in the Indenture, (8) to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture

Ex. 1 to App. -8

 

Act or (9) to evidence or provide for the acceptance of appointment under the Indenture of a
successor Trustee.

     13. Defaults and Remedies. Events of Default include: (i) default for 30 days in the
payment when due of interest or Additional Interest, if any, on the Notes; (ii) default in payment
when due of the principal of or premium, if any, on the Notes when due at Stated Maturity, upon
optional redemption, upon required repurchase, upon declaration or otherwise; (iii) failure by the
Company to comply with Section 3.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the
Company for 90 days after notice to comply with Section 4.03 of the Indenture; (v) failure by the
Company for 60 days after notice to comply with any of its other agreements in the Indenture or the
Notes; (vi) default under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of
its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after
the Initial Issuance Date, if such default (a) is caused by a failure to pay principal of, or
premium or interest, if any, on such Indebtedness prior to the expiration of any grace period
provided in such Indebtedness (a “Payment Default”) or (b) results in the acceleration of such
Indebtedness prior to its Stated Maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess
of $20.0 million provided that if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 60 days from the continuation of such
default beyond the applicable grace period or the occurrence of such acceleration, as the case may
be, such Event of Default and any consequential acceleration of the Notes shall be automatically
rescinded, so long as such rescission does not conflict with any judgment or decree; (vii) failure
by the Company or any of its Subsidiaries to pay final judgments aggregating in excess of $20.0
million, which judgments are not paid, discharged or stayed for a period of 60 days; (viii) except
as permitted by the Indenture, any Subsidiary Guarantee is held in any judicial proceeding to be
unenforceable or invalid or ceases for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its
Subsidiary Guarantee; and (ix) certain events of bankruptcy, insolvency or reorganization with
respect to the Company, Finance Corp., any of the Company’s Restricted Subsidiaries that is a
Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary of the Company as specified in Section
6.01(i) or 6.01(j) of the Indenture. If any Event of Default occurs and is continuing, the
Trustee, by notice to the Issuers, or the Holders of at least 25% in principal amount of the then
outstanding Notes, by notice to the Issuers and the Trustee, may declare all the Notes to be due
and payable immediately. Notwithstanding the preceding, in the case of an Event of Default arising
from such events of bankruptcy, insolvency or reorganization described in Section 6.01(i) or
6.01(j) of the Indenture, all outstanding Notes will become due and payable without further action
or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power conferred on it. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except
a Default or Event of Default relating to the payment of principal, interest, premium or Additional
Interest) if it determines that withholding notice is in their interest. The Holders of a

Ex. 1 to App. -9

 

majority in principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default in the payment of
the principal of or premium, interest or Additional Interest, if any, on the Notes. The Issuers
are required to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and, so long as any Notes are outstanding, the Issuers are required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.

     14. Defeasance and Discharge. The Notes are subject to defeasance and discharge upon
the terms and conditions specified in the Indenture.

     15. No Recourse Against Others. No past, present or future director, officer,
partner, employee, incorporator, manager or unitholder or other owner of Capital Stock of the
Issuers or any Guarantor, as such, shall have any liability for any obligations of the Issuers or
any Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of the consideration
for the issuance of the Notes.

     16. Authentication. This Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee or an authenticating agent.

     17. Abbreviations. Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).

     18. Additional Rights of Holders of Transfer Restricted Securities. In addition to
the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted
Securities shall have all the rights set forth in the Registration Rights Agreement dated as of
___, among the Issuers, the Guarantors and the Initial Purchasers (the “Registration
Rights Agreement”).

     19. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers and corresponding
ISIN numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.

     20. Governing Law. THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     21. Successors. In the event a successor assumes all the obligations of an Issuer
under the Notes and the Indenture, pursuant to the terms thereof, such Issuer will be released from
all such obligations.

Ex. 1 to App. -10

 

     The Company will furnish to any Holder upon written request and without charge a copy of the
Indenture or the Registration Rights Agreement. Requests may be made to:

Copano Energy, L.L.C.

2727 Allen Parkway, Suite 1200

Houston, Texas 77019

Attention: Chief Financial Officer

Ex. 1 to App. -11

 

ASSIGNMENT FORM

     To assign this Note, fill in the form below:

     I or we assign and transfer this Note to

 

Print or type assignee’s name, address and zip code)

 

 

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint                                        agent to transfer this Note on the books of the Issuers.
The agent may substitute another to act for him.

	 	 	 	 	 	 	 
	Date:                                                             	 	Your
Signature:	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Sign exactly as your name appears on the other side of this Note.

	 	 	 	 	 
	Signature Guarantee:
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	(Signature must be guaranteed)
	 	 	 	 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the 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 Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

 

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior
to the expiration of the period referred to in Rule 144(k) under the Securities Act after the later
of the date of original issuance of such Notes and the last date, if any, on which such Notes were
owned by the Company or any Affiliate of the Company (or, in the case of Regulation S Notes, prior
to the expiration of the Distribution Compliance Period), the undersigned confirms that such Notes
are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

	 	 	 	 	 	 	 	 	 
	 

	 	 	(1	)	 	o
	 	to an Issuer; or
	 
	 	 	 	 	 	 	 	 
	 

	 	 	(2	)	 	o
	 	pursuant to an effective registration statement under the Securities Act of
1933; or
	 
	 	 	 	 	 	 	 	 
	 

	 	 	(3	)	 	o
	 	inside the United States to a person who the undersigned reasonably believes is
a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of
1933) that is purchasing for its own account or for the account of a qualified
institutional buyer to whom notice is given that such

Ex. 1 to App. -12

 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	transfer is being made in reliance on Rule 144A, in each case pursuant to
and in compliance with Rule 144A under the Securities Act of 1933; or
	 
	 	 	 	 	 	 	 	 
	 

	 	 	(4	)	 	o
	 	outside the United States in an offshore transaction within the meaning of
Regulation S under the Securities Act in compliance with Rule 904 under the Securities
Act of 1933; or
	 
	 	 	 	 	 	 	 	 
	 

	 	 	(5	)	 	o
	 	pursuant to the exemption from registration provided by Rule 144 under the
Securities Act of 1933.

     Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced
by this certificate in the name of any person other than the registered holder thereof; provided,
however, that if box (4) or (5) is checked, the Trustee shall be entitled to require, prior to
registering any such transfer of the Notes, such legal opinions, certifications and other
information as the Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.

	 	 	 	 	 
	 

	 	 

Signature
	 	 

Ex. 1 to App. -13

 

TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an
account with respect to which it exercises sole investment discretion and that it and any such
account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuers and any Guarantors as the
undersigned has requested pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by Rule 144A.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

Notice: To be executed by an executive officer
	 	 

Ex. 1 to App. -14

 

OPTION OF HOLDER TO ELECT PURCHASE

     If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or
4.15 of the Indenture, check the box below:

	 	 	 	 	 	 	 
	 

	 	o Section 4.10
	 	o Section 4.15
	 	 

     If you want to elect to have only part of this Note purchased by the Company pursuant to
Section 4.10 or Section 4.15 of the Indenture, state the amount (in minimum denomination of $1,000
or integral multiples thereof) you elect to have purchased: $                    

	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Your Signature:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	(Sign exactly as your name appears on the other side of this Note)

Soc. Sec. or Tax Identification No.:                     

	 	 	 	 	 
	Signature Guarantee:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	(signature must be guaranteed)	 	 

     Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the 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 Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.

Ex. 1 to App. -15

 

[TO BE ATTACHED TO GLOBAL NOTE]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

The following increases or decreases in this Global Note have been made:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Principal	 	 	 	 
	 	 	Amount of	 	 	Amount of	 	 	Amount of this	 	 	Signature of	 
	 	 	decrease in	 	 	increase in	 	 	Global Note	 	 	authorized	 
	 	 	Principal	 	 	Principal	 	 	following such	 	 	officer	 
	 	 	Amount of this	 	 	Amount of this	 	 	decrease or	 	 	of Trustee or	 
	Date	 	Global Note	 	 	Global Note	 	 	increase	 	 	Notes Custodian	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Ex. 1 to App. -16

 

EXHIBIT A TO RULE 144A/REGULATION S APPENDIX

[FORM OF FACE OF EXCHANGE NOTE

OR PRIVATE EXCHANGE NOTE] ___*/**/

*/ If the Note is to be issued in global form add the Global Notes Legend from Exhibit 1 to Rule
144A/Regulation S Appendix and the attachment from such Exhibit 1 captioned “[TO BE ATTACHED TO
GLOBAL NOTES] — SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE”.

**/ If the Note is a Private Exchange Note issued in a Private Exchange to an Initial Purchaser
holding an unsold portion of its initial allotment, add the Restricted Notes Legend from Exhibit 1
to Rule 144A/Regulation S Appendix and replace the Assignment Form included in this Exhibit A with
the Assignment Form included in such Exhibit 1.

All references to “Additional Interest” in the Note shall be deleted unless if at the date of
issuance of the Exchange Note or Private Exchange Note (as the case may be) any Registration
Default (as defined in the Registration Rights Agreement) has occurred with respect to the related
Initial Notes during the interest period in which such date of issuance occurs.

Ex. A to App. -1

 

[FORM OF FACE OF EXCHANGE NOTE OR

PRIVATE EXCHANGE NOTE]

COPANO ENERGY, L.L.C.

COPANO ENERGY FINANCE CORPORATION

	 	 	 	 	 
	No.

	 	$ 	 	 
	 
	 	 	 	 
	 

	 	CUSIP No.

	 

	 	ISIN No.

8.125% Senior Note due 2016

     Copano Energy, L.L.C., a Delaware limited liability company, and Copano Energy Finance
Corporation, a Delaware corporation, jointly and severally promise to pay to                     , or
registered assigns, the principal sum of
                     Dollars on March 1, 2016 [or such greater or
lesser amount as may be indicated on Schedule A
hereto].2

     Interest Payment Dates: March 1 and September 1.

     Record Dates: February 15 and August 15.

     Additional provisions of this Note are set forth on the other side of this Note.

	 	 	 	 	 	 	 
	 	 	Copano energy, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	Copano Energy Finance Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

			
	2
 If this Note is a Global Note, add this provision.

Ex. A to App. -2

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

	 	 	 
	U.S.

	 	Bank National Association,
	 

	 	as Trustee, certifies that

this is one of the Notes

referred to in the Indenture.

	 	 	 	 	 
	By
	 	 	 	 
	 

	 	 

	 	 
	 

	 	Authorized Signatory	 	 

Dated:

Ex. A to App. -3

 

[FORM OF REVERSE SIDE OF EXCHANGE NOTE OR

PRIVATE EXCHANGE NOTE]

8.125% Senior Note due 2016

     Capitalized terms used herein but not defined shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

     1. Interest. Copano Energy, L.L.C., a Delaware limited liability company (the
“Company”), and Copano Energy Finance Corporation, a Delaware corporation (the “Finance Corp.” and,
together with the Company, the “Issuers”), jointly and severally promise to pay interest on the
principal amount of this Note at 8.125% per annum from February 7, 2006 until maturity and shall
pay the Additional Interest payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Issuers will pay interest and Additional Interest, if any, semi-annually in
arrears on March 1 and September 1 of each year, commencing September 1, 2006, or if any such day
is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”).
Interest on the Notes will accrue from the most recent date to which interest has been paid or, if
no interest has been paid, from the date of original issuance; provided that if there is no
existing Default or Event of Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date, except in the case of the
original issuance of Notes, in which case interest shall accrue from the date of authentication.
The Issuers shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate
that is the rate then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest
(without regard to any applicable grace periods) from time to time on demand at the same rate to
the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

     2. Method of Payment. The Issuers will pay interest on the Notes (except defaulted
interest) and Additional Interest to the Persons who are registered Holders of Notes at the close
of business on the February 15 or August 15 next preceding the Interest Payment Date, even if such
Notes are cancelled after such record date and on or before such Interest Payment Date, except as
provided in Section 2.11 of the Indenture with respect to defaulted interest. Holders must
surrender Notes to the Paying Agent to collect payments of principal and premium, if any, together
with accrued and unpaid interest and Additional Interest, if any, due at maturity. The Notes will
be payable as to principal, premium, if any, interest and Additional Interest, if any, at the
office or agency of the Issuers maintained for such purpose within the City and State of New York,
or, at the option of the Issuers, payment of interest and Additional Interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders, and provided that
payment by wire transfer of immediately available funds will be required with respect to any
amounts due on all Global Notes and all other Notes the Holders of which shall have provided wire
transfer instructions to the Issuers or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal tender for payment of
public and private debts.

Ex. A to App. - 4

 

     3. Paying Agent and Registrar. Initially, U.S. Bank National Association, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.

     4. Indenture. The Issuers issued the Notes under an Indenture dated as of February 7,
2006 (“Indenture”) among the Issuers, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are unsecured senior obligations of the Issuers limited to $225,000,000 aggregate
principal amount in the case of Notes issued on the Initial Issuance Date (as defined in the
Indenture).

     5. Optional Redemption.

     (a) Except as set forth in subparagraphs (b) and (c) of this Paragraph 5, the Issuers shall
not have the option to redeem the Notes prior to March 1, 2011. On or after March 1, 2011, the
Issuers shall have the option to redeem the Notes, in whole or in part at any time, upon prior
notice as set forth in Paragraph 8, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, to the
applicable redemption date (subject to the right of Holders of record on the relevant record date
to receive interest due on an Interest Payment Date that is on or prior to the redemption date), if
redeemed during the twelve-month period beginning on March 1 of the years indicated below:

	 	 	 	 	 
	YEAR	 	PERCENTAGE	 
	2011
	 	 	104.0625	%
	2012
	 	 	102.7083	%
	2013
	 	 	101.3542	%
	2014 and thereafter
	 	 	100.0000	%

     (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior
to March 1, 2009, the Issuers may on any one or more occasions redeem up to 35% of the aggregate
principal amount of Notes (including any Additional Notes) issued under the Indenture at a
redemption price of 108.125% of the principal amount thereof, plus accrued and unpaid interest and
Additional Interest, if any, thereon to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest Payment Date that is on
or prior to the redemption date), with the net cash proceeds of one or more Equity Offerings by the
Company; provided that (i) at least 65% of the aggregate principal amount of Notes (including any
Additional Notes) issued under the Indenture remains outstanding immediately after the occurrence
of each such redemption (excluding any Notes held by the Company and its Subsidiaries) and (ii)
each such redemption occurs within 120 days of the date of the closing of each such Equity
Offering.

     (c) Prior to March 1, 2011, the Issuers may redeem all or part of the notes upon not less than
30 nor more than 60 days’ notice, at a redemption price equal to the sum of (1) the principal
amount thereof, plus (2) accrued and unpaid interest, if any, to the redemption date

Ex. A to App. - 5

 

(subject to the right of Holders of record on the relevant record date to receive interest due on
an interest payment date that is on or prior to the redemption date), plus (3) the Make Whole
Premium at the redemption date.

     6. Mandatory Redemption.

     Except as set forth in Paragraph 7 below, neither of the Issuers shall be required to make
mandatory redemption or sinking fund payments with respect to the Notes or to repurchase the Notes
at the option of the Holders.

     7. Repurchase at Option of Holder.

     (a) Within 30 days following the occurrence of a Change of Control, the Company shall make an
offer (a “Change of Control Offer”) to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of each Holder’s Notes at a purchase price equal to 101% of the aggregate
principal amount of Notes repurchased, plus accrued and unpaid interest and Additional Interest, if
any, to the date of settlement (the “Change of Control Settlement Date”), subject to the right of
Holders of record on the relevant record date to receive interest due on an Interest Payment Date
that is on or prior to the Change of Control Settlement Date. Within 30 days following a Change of
Control, the Company shall mail a notice of the Change of Control Offer to each Holder and the
Trustee describing the transaction that constitutes the Change of Control and setting forth the
procedures governing the Change of Control Offer as required by Section 4.15 of the Indenture.

     (b) On the 361st day after an Asset Sale, if the aggregate amount of Excess Proceeds then
exceeds $20.0 million, the Company shall commence an offer to all Holders of Notes (an “Asset Sale
Offer”) pursuant to Section 3.09 of the Indenture, and to all holders of any Pari Passu
Indebtedness then outstanding, to purchase the maximum principal amount of Notes and such Pari
Passu Indebtedness that may be purchased out of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the principal amount of the Notes plus accrued and unpaid interest and
Additional Interest, if any, thereon to the date of settlement, subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest Payment Date that is on
or prior to the Change of Control Settlement Date, in accordance with the procedures set forth in
the Indenture. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such remaining Excess Proceeds for any purpose not otherwise prohibited by the
Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and Pari
Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and Pari Passu Indebtedness to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in
denominations of $1,000, or integral multiples thereof, shall be purchased) on the basis of the
aggregate principal amount of tendered Notes and Pari Passu Indebtedness. Holders of Notes that
are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to
any related purchase date and may elect to have such Notes purchased by completing the form
entitled “Option of Holder to Elect Purchase” on the reverse of the Notes.

Ex. A to App. - 6

 

     8. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not
more than 60 days (except as otherwise provided in the Indenture if the notice is issued in
connection with a Legal Defeasance, Covenant Defeasance or Discharge) before the redemption date to
each Holder whose Notes are to be redeemed at its registered address. If mailed in the manner
provided for in Section 3.03 of the Indenture, the notice of optional redemption shall be
conclusively presumed to have been given whether or not a Holder receives such notice. Failure to
give timely notice or any defect in the notice shall not affect the validity of the redemption.
Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption
date interest and Additional Interest, if any, cease to accrue on Notes or portions thereof called
for redemption.

     9. Guarantees. The payment of the Issuers of the principal of and premium, interest
and Additional Interest, if any, on the Notes is fully and unconditionally guaranteed on a joint
and several senior unsecured basis by each of the Guarantors to the extent set forth in the
Indenture.

     10. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be
registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements and transfer
documents, and the Company may require a Holder to pay any taxes due on transfer or exchange. The
Issuers need not exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in part. Also, they need
not exchange or register the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed.

     11. Persons Deemed Owners. The registered Holder of a Note may be treated as its
owner for all purposes.

     12. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or
the Notes may be amended or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority
in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented (1) to cure any ambiguity, defect or
inconsistency, (2) to provide for uncertificated Notes in addition to or in place of certificated
Notes, (3) to provide for the assumption of an Issuer’s obligations to Holders of the Notes
pursuant to Article 5 of the Indenture, (4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, provided that any change to conform the Indenture to the
Offering Memorandum shall not be deemed to adversely affect the legal rights under the Indenture of
any Holder, (5) to secure the Notes or the Subsidiary Guarantees pursuant to Section 4.12 of the
Indenture or otherwise, (6) to provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture, (7) to add any additional Guarantor with respect to the
Notes or to evidence the release of any Guarantor from its Subsidiary Guarantee, in each case as
provided in the Indenture, (8) to comply with the requirements of the

Ex. A to App. - 7

 

SEC in order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act or (9) to evidence or provide for the acceptance of appointment under the Indenture
of a successor Trustee.

     13. Defaults and Remedies. Events of Default include: (i) default for 30 days in the
payment when due of interest or Additional Interest, if any, on the Notes; (ii) default in payment
when due of the principal of or premium, if any, on the Notes when due at Stated Maturity, upon
optional redemption, upon required repurchase, upon declaration or otherwise; (iii) failure by the
Company to comply with Section 3.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the
Company for 90 days after notice to comply with Section 4.03 of the Indenture; (v) failure by the
Company for 60 days after notice to comply with any of its other agreements in the Indenture or the
Notes; (vi) default under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of
its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after
the Initial Issuance Date, if such default (a) is caused by a failure to pay principal of, or
premium or interest, if any, on such Indebtedness prior to the expiration of any grace period
provided in such Indebtedness (a “Payment Default”) or (b) results in the acceleration of such
Indebtedness prior to its Stated Maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess
of $20.0 million provided that if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 60 days from the continuation of such
default beyond the applicable grace period or the occurrence of such acceleration, as the case may
be, such Event of Default and any consequential acceleration of the Notes shall be automatically
rescinded, so long as such rescission does not conflict with any judgment or decree; (vii) failure
by the Company or any of its Subsidiaries to pay final judgments aggregating in excess of $20.0
million, which judgments are not paid, discharged or stayed for a period of 60 days; (viii) except
as permitted by the Indenture, any Subsidiary Guarantee is held in any judicial proceeding to be
unenforceable or invalid or ceases for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its
Subsidiary Guarantee; and (ix) certain events of bankruptcy, insolvency or reorganization with
respect to the Company, Finance Corp., any of the Company’s Restricted Subsidiaries that is a
Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary of the Company as specified in Section
6.01(i) or 6.01(j) of the Indenture. If any Event of Default occurs and is continuing, the
Trustee, by notice to the Issuers, or the Holders of at least 25% in principal amount of the then
outstanding Notes, by notice to the Issuers and the Trustee, may declare all the Notes to be due
and payable immediately. Notwithstanding the preceding, in the case of an Event of Default arising
from such events of bankruptcy, insolvency or reorganization described in Section 6.01(i) or
6.01(j) of the Indenture, all outstanding Notes will become due and payable without further action
or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power conferred on it. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except
a Default or Event of Default relating to the payment of principal, interest, premium or

Ex. A to App. - 8

 

Additional Interest) if it determines that withholding notice is in their interest. The
Holders of a majority in principal amount of the Notes then outstanding by notice to the Trustee
may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and
its consequences under the Indenture except a continuing Default or Event of Default in the payment
of the principal of or premium, interest or Additional Interest, if any, on the Notes. The Issuers
are required to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and, so long as any Notes are outstanding, the Issuers are required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.

     14. Defeasance and Discharge. The Notes are subject to defeasance and discharge upon
the terms and conditions specified in the Indenture.

     15. No Recourse Against Others. No past, present or future director, officer,
partner, employee, incorporator, manager or unitholder or other owner of Capital Stock of the
Issuers or any Guarantor, as such, shall have any liability for any obligations of the Issuers or
any Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of the consideration
for the issuance of the Notes.

     16. Authentication. This Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee or an authenticating agent.

     17. Abbreviations. Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).

     18. [Additional Rights of Holders of Transfer Restricted Securities. In addition to
the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted
Securities shall have all the rights set forth in the Registration Rights Agreement dated as of
                    , among the Issuers, the Guarantors and the Initial Purchasers (the “Registration
Rights
Agreement”).]3

     19. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on
the Notes and the Trustee may use CUSIP numbers and corresponding ISIN numbers in notices of
redemption as a convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.

     20. Governing Law. THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

			
	3
  Delete if this Note is not being issued in exchange for an Initial Note.

Ex. A to App. - 9

 

     21. Successors. In the event a successor assumes all the obligations of an Issuer
under the Notes and the Indenture, pursuant to the terms thereof, such Issuer will be released from
all such obligations.

     The Company will furnish to any Holder upon written request and without charge a copy of the
Indenture [and/or the Registration Rights
Agreement]4. Requests may be made to:

Copano Energy, L.L.C.

2727 Allen Parkway, Suite 1200

Houston, Texas 77019

Attention: Chief Financial Officer

 

			
	4
 Delete if this Note is not being issued in exchange for an Initial Note.

Ex. A to App. - 10

 

ASSIGNMENT FORM

     To assign this Note, fill in the form below:

     I or we assign and transfer this Note to

 

Print or type assignee’s name, address and zip code)

 

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint                                          agent to transfer this Note on the books of the Issuers.
The agent may substitute another to act for him.

	 	 	 	 	 	 	 
	Date:

	 	 	 	Your Signature:	 	 
	 

	 	 
	 	 	 	 
	 	 	 	 	              Sign exactly as your name appears on the other side of this Note.

     Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the 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 Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.

Ex. A to App. - 11

 

OPTION OF HOLDER TO ELECT PURCHASE

     If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or
4.15 of the Indenture, check the box below:

o

     If you want to elect to have only part of this Note purchased by the Company pursuant to
Section 4.10 or Section 4.15 of the Indenture, state the amount (in minimum denomination of $1,000
or integral multiples thereof) you elected to have purchased: $                                        

	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	Your	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Signature:	 	 	 	 
	 	 	 	 	 	 	(Sign exactly as your name appears on the other side of this Note)
	 
	 	 	 	 	 	 	 	 

	 	 	 	 	 
	 

	 	      Soc. Sec. or Tax Identification No.:	 	 
	 

	 	 	 

	 	 	 	 	 
	Signature Guarantee:
	 	 	 	 
	 

	 	 

(Signature must be guaranteed)
	 	 

     Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements
of the 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 Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

Ex. A to App. - 12

 

ANNEX A

 

COPANO ENERGY, L.L.C.

COPANO ENERGY FINANCE CORPORATION

and

the Guarantors named herein

 

8.125% SENIOR NOTES DUE 2016

 

 

FORM OF SUPPLEMENTAL INDENTURE

AND AMENDMENT — SUBSIDIARY GUARANTEE

DATED AS OF ____________  ___,____

 

U.S. BANK NATIONAL ASSOCIATION,

Trustee

 

 

A-1

 

     This
SUPPLEMENTAL INDENTURE, dated as of                      ___, ___ is among Copano Energy, L.L.C.,
a Delaware limited liability company (the “Company”), Copano Energy Finance Corporation, a Delaware
corporation ( “Finance Corp.” and, together with the Company, the “Issuers”), each of the parties
identified under the caption “Guarantors” on the signature page hereto (the “Guarantors”) and U.S.
Bank National Association, a national banking association, as Trustee.

RECITALS

     WHEREAS, the Issuers, the initial Guarantors and the Trustee entered into an Indenture, dated
as of February 7, 2006 (the “Indenture”), pursuant to which the Company has issued $                     in
principal amount of 8.125% Senior Notes due 2015 (the “Notes”);

     WHEREAS, Section 9.01(g) of the Indenture provides that the Issuers, the Guarantors and the
Trustee may amend or supplement the Indenture in order to comply with Section 4.13 or 10.03
thereof, without the consent of the Holders of the Notes; and

     WHEREAS, all acts and things prescribed by the Indenture, by law and by the Certificate of
Incorporation and the Bylaws (or comparable constituent documents) of the Issuers, of the
Guarantors and of the Trustee necessary to make this Supplemental Indenture a valid instrument
legally binding on the Issuers, the Guarantors and the Trustee, in accordance with its terms, have
been duly done and performed;

     NOW, THEREFORE, to comply with the provisions of the Indenture and in consideration of the
above premises, the Issuers, the Guarantors and the Trustee covenant and agree for the equal and
proportionate benefit of the respective Holders of the Notes as follows:

ARTICLE 1

     Section 1.01. This Supplemental Indenture is supplemental to the Indenture and does and shall
be deemed to form a part of, and shall be construed in connection with and as part of, the
Indenture for any and all purposes.

     Section 1.02. This Supplemental Indenture shall become effective immediately upon its
execution and delivery by each of the Issuers, the Guarantors and the Trustee.

ARTICLE 2

     From this date, in accordance with Section 4.13 or 10.03 and by executing this Supplemental
Indenture, the Guarantors whose signatures appear below are subject to the provisions of the
Indenture to the extent provided for in Article 10 thereunder.

ARTICLE 3

     Section 3.01. Except as specifically modified herein, the Indenture and the Notes are in all
respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in
accordance with their terms with all capitalized terms used herein without definition having the
same respective meanings ascribed to them as in the Indenture.

A-2

 

     Section 3.02. Except as otherwise expressly provided herein, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this
Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee
subject to all the terms and conditions set forth in the Indenture with the same force and effect
as if those terms and conditions were repeated at length herein and made applicable to the Trustee
with respect hereto.

     Section 3.03. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

     Section 3.04. The parties may sign any number of copies of this Supplemental Indenture. Each
signed copy shall be an original, but all of such executed copies together shall represent the same
agreement.

[NEXT PAGE IS SIGNATURE PAGE]

A-3

 

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

	 	 	 	 	 	 	 	 	 
	 	 	Copano Energy, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Copano Energy Finance Corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	GUARANTORS	 	 
	 	 	[                                                                                       
          ]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	U.S. Bank National Association,

as Trustee	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 

A-4

 

ANNEX B

FORM OF REGISTRATION RIGHTS AGREEMENT

See attached.

D-1

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