Document:

exv10w1

 

Exhibit 10.1

AMENDED AND RESTATED GAS PROCESSING CONTRACT

BETWEEN

KINDER MORGAN TEXAS PIPELINE, L.P. AND

COPANO PROCESSING, L.P.

FEBRUARY 1, 2006

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS
HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS
(**).

 

 

AMENDED AND RESTATED GAS PROCESSING CONTRACT

BETWEEN

KINDER MORGAN TEXAS PIPELINE, L.P.

AND

COPANO PROCESSING, L.P.

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	ARTICLE 1. — DEFINITIONS	 	 	2	 
	 
	 	1.1.	 	Words and Terms	 	 	2	 
	ARTICLE 2. — CERTAIN OBLIGATIONS OF THE PARTIES	 	 	5	 
	 
	 	2.1.	 	Commitments of the Parties	 	 	5	 
	 
	 	2.2.	 	Bypass; Suspension of Processing	 	 	5	 
	 
	 	2.3.	 	Hydrocarbon Dew Point Control	 	 	5	 
	 
	 	2.4.	 	Termination of KMTP Conditioning and Blending Fees	 	 	6	 
	 
	 	2.5.	 	Entitlement to Products; Replacement of PTR.	 	 	6	 
	 
	 	2.6.	 	Copano Contract Gas	 	 	6	 
	ARTICLE 3. — ALLOCATION OF INLET GAS	 	 	6	 
	 
	 	3.1.	 	KMTP Information	 	 	6	 
	 
	 	3.2.	 	KMTP Gas Calculations	 	 	7	 
	ARTICLE 4. — DETERMINATION OF THE PROCESSING MARGIN	 	 	7	 
	ARTICLE 5. — PAYMENTS	 	 	8	 
	 
	 	5.1.	 	Payments by Copano	 	 	8	 
	 
	 	5.2.	 	Payments by KMTP	 	 	8	 
	 
	 	5.3.	 	Processing Payment - PCL Gas	 	 	8	 
	ARTICLE 6. — PRESSURES	 	 	9	 
	 
	 	6.1.	 	Delivery Pressure	 	 	9	 
	 
	 	6.2.	 	Pressure Drop	 	 	9	 
	ARTICLE 7. — CONTENT TESTS	 	 	9	 
	 
	 	7.1.	 	Sampling	 	 	9	 
	 
	 	7.2.	 	Notices of Tests	 	 	9	 
	 
	 	7.3.	 	Btu Content	 	 	9	 
	ARTICLE 8. – PRODUCT AND PTR ALLOCATION	 	 	10	 
	 
	 	8.1.	 	Procedures for Allocating Products and PTR	 	 	10	 
	ARTICLE 9. — RESIDUE GAS REDELIVERY	 	 	10	 
	 
	 	9.1.	 	Residue Gas Allocation to KMTP Gas	 	 	10	 
	 
	 	9.2.	 	Transfer of Custody and Responsibility for Residue Gas	 	 	10	 
	 
	 	9.3.	 	Residue Gas Volumes	 	 	10	 
	ARTICLE 10. — MAKE-UP OF PTR	 	 	10	 
	 
	 	10.1.	 	Obligation	 	 	10	 
	 
	 	10.2.	 	PTR Make-up Gas Balancing	 	 	10	 
	 
	 	10.3.	 	Notice of Volumes	 	 	11	 

 

 

	 	 	 	 	 	 	 	 	 
	ARTICLE 11. — MEASUREMENT	 	 	11	 
	 
	 	11.1.	 	Assumed Atmospheric Pressure	 	 	11	 
	 
	 	11.2.	 	Unit of Volume	 	 	11	 
	 
	 	11.3.	 	Adjustment for Supercompressibility	 	 	12	 
	 
	 	11.4.	 	Determination of Heating Value	 	 	12	 
	 
	 	11.5.	 	Determination of Flowing Temperature	 	 	12	 
	 
	 	11.6.	 	Determination of Specific Gravity	 	 	13	 
	ARTICLE 12. — MEASURING EQUIPMENT AND TESTING	 	 	13	 
	 
	 	12.1.	 	Equipment	 	 	13	 
	 
	 	12.2.	 	Calibration and Tests of Meters	 	 	14	 
	 
	 	12.3.	 	Access to Meters and Records	 	 	14	 
	 
	 	12.4.	 	Correction of Metering Errors	 	 	15	 
	 
	 	12.5.	 	Failure of Meters	 	 	15	 
	 
	 	12.6.	 	Check Measuring Equipment	 	 	15	 
	 
	 	12.7.	 	New Measurement Techniques	 	 	15	 
	 
	 	12.8.	 	Liquid Measurement	 	 	16	 
	ARTICLE 13. — QUALITY	 	 	16	 
	 
	 	13.1.	 	Gas Quality Specifications	 	 	16	 
	 
	 	13.2.	 	Testing	 	 	17	 
	 
	 	13.3.	 	Failure to Meet Quality Specifications	 	 	18	 
	ARTICLE 14. — ACCOUNTING	 	 	18	 
	 
	 	14.1.	 	Statements	 	 	18	 
	 
	 	14.2.	 	Payments	 	 	18	 
	 
	 	14.3.	 	Auditing	 	 	18	 
	 
	 	14.4.	 	Failure to Pay	 	 	18	 
	ARTICLE 15. — FORCE MAJEURE	 	 	19	 
	 
	 	15.1.	 	Definition	 	 	19	 
	 
	 	15.2.	 	Strikes and Lockouts	 	 	20	 
	 
	 	15.3.	 	Plant Loss	 	 	20	 
	ARTICLE 16. — TAXES	 	 	20	 
	 
	 	16.1.	 	Taxes	 	 	20	 
	ARTICLE 17. — LIABILITY; TITLE AND WARRANTIES	 	 	20	 
	 
	 	17.1.	 	Transfer of Custody of and Responsibility For Gas	 	 	20	 
	 
	 	17.2.	 	Title to Products	 	 	21	 
	 
	 	17.3.	 	Title to PTR	 	 	21	 
	 
	 	17.4.	 	Liability	 	 	21	 
	 
	 	17.5.	 	Warranties	 	 	21	 
	ARTICLE 18. — SUCCESSORS AND ASSIGNS	 	 	21	 
	 
	 	18.1.	 	Binding of Terms	 	 	21	 
	 
	 	18.2.	 	Conditions	 	 	21	 
	 
	 	18.3.	 	Pledged Rights	 	 	21	 
	ARTICLE 19. — NOTICES	 	 	22	 
	 
	 	19.1.	 	Addresses	 	 	22	 

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	ARTICLE 20. — TERM	 	 	23	 
	 
	 	20.1.	 	Term	 	 	23	 
	ARTICLE 21. — MISCELLANEOUS	 	 	23	 
	 
	 	21.1.	 	Upstream Processing	 	 	23	 
	 
	 	21.2.	 	Indemnity	 	 	24	 
	 
	 	21.3.	 	Waiver	 	 	24	 
	 
	 	21.4.	 	Performance	 	 	24	 
	 
	 	21.5.	 	Drafting	 	 	24	 
	 
	 	21.6.	 	Headings	 	 	25	 
	 
	 	21.7.	 	Third Party Beneficiaries	 	 	25	 
	 
	 	21.8.	 	Prior Contract	 	 	25	 

iii

 

AMENDED AND RESTATED GAS PROCESSING CONTRACT

BETWEEN

KINDER MORGAN TEXAS PIPEINE, L.P.

AND

COPANO PROCESSING, L.P.

     THIS AMENDED AND RESTATED GAS PROCESSING CONTRACT, made and entered into as of February 1,
2006 (the “Effective Date”), by and between KINDER MORGAN TEXAS PIPELINE, L.P. (“KMTP”) and COPANO
PROCESSING, L.P. (“COPANO”).

W I T N E S S E T H:

     WHEREAS, COPANO owns and operates a natural gas processing plant known as the Houston Central
Plant located in the O.K. Winn and Francis Mayhar Surveys, Colorado County, Texas (the “Plant”),
and

     WHEREAS, KMTP owns and operates a 30-inch pipeline system extending from the vicinity of
Laredo, Texas, to the Plant (said pipeline system and any extensions and loops thereof shall be
referred to herein as the “KMTP Line”); and

     WHEREAS, COPANO and/or its Affiliates (defined below) own natural gas pipeline facilities that
deliver gas into the KMTP Line (the “Copano Pipeline Facilities”) which gas is delivered to the
Plant for Processing (all such gas so delivered from the Copano Pipeline Facilities shall be
referred to herein as “Copano Pipeline Gas”); and

     WHEREAS, subject to KMTP’s written consent, COPANO and/or its Affiliates (as defined below)
may enter into gas Processing or gas conditioning arrangements with producers or other third
parties delivering gas to the KMTP Line pursuant to which COPANO shall have the right to Process or
condition gas produced, delivered or supplied by such third parties (such gas may be referred to
herein as “Copano Contract Gas”, and together with the Copano Pipeline Gas, shall be referred to
herein as “Copano Gas”); and

     WHEREAS, KMTP transports certain quantities of Gas other than Copano Gas (“KMTP Gas”) in the
KMTP Line that is delivered to the Plant and desires that such gas be Processed in the Plant, and

     WHEREAS, COPANO desires to Process the KMTP Gas for KMTP, and

     WHEREAS, COPANO and KMTP are parties to that certain Amended and Restated Gas Processing
Contract entered into as of

 

 

January 1, 2004 which provides for the Processing of Gas by COPANO at the Plant (the “2004 Gas
Processing Agreement”), and

     WHEREAS, COPANO and KMTP desire to amend and restate the 2004 Gas Processing Agreement in its
entirety to: (i) revise the hydrocarbon dew point specifications, and (ii) effectuate certain other
amendments and modifications as provided herein,

     NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and benefits
contained herein, KMTP and COPANO hereby agree as follows:

ARTICLE 1. — DEFINITIONS

     1.1. Words and Terms

     Unless the context indicates a different meaning, the following words and terms shall have the
meanings set out below:

     “2004 Gas Processing Agreement” has the meaning set forth in the recitals above.

     “Affiliate” means, as to any Person, any other Person that directly or indirectly, through one
or more intermediaries, controls or is controlled by, or is under common control with, such Person.
The term control means the possession, directly or indirectly, of the power to direct or cause
direction of the management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.

     “Alternate Redelivery Point” means the flange or weld on the downstream side of the emergency
shut—down valve installed downstream of the Plant at the point of connection to any pipeline
connected to the Plant as of the Effective Date other than the KMTP pipeline.

     “Btu” means British thermal unit.

     “Business Day” means a day other than a Saturday, Sunday or legal holiday for commercial banks
under either the laws applicable to national banking associations or those applicable to Texas
state chartered banks.

     “COPANO” has the meaning set forth in the preamble.

     “Copano Contract Gas” has the meaning set forth in the recitals above.

     “Copano Gas” has the meaning set forth in the recitals above.

     “Copano Pipeline Facilities” has the meaning set forth in the recitals above.

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     “Copano Pipeline Gas” has the meaning set forth in the recitals above.

     “Creditor Party” has the meaning set forth in Section 14.2.

     “Day” means a period beginning at 9:00 a.m. (local time) on a calendar day and ending at 9:00
a.m. (local time) on the next succeeding calendar day. The date of a Day shall be that of its
beginning.

     “Debtor Party” has the meaning set forth in Section 14.2.

     “Delivery Point” means the flange or weld on the upstream side of the emergency shut—down
valve installed upstream of the Plant.

     “Effective Date” has the meaning set forth in the preamble above.

     “Gas”, as used herein, means natural gas, as produced in its natural state from oil wells or
from gas wells or gas condensate wells.

     “GPM” means the amount of gallons of ethane and/or heavier Products per Mcf.

     “Inlet Gas” means all Gas delivered into the Plant from the KMTP Line, being the Copano Gas
and the KMTP Gas.

     “KMTP” has the meaning set forth in the preamble.

     “KMTP Gas” has the meaning set forth in the recitals above.

     “KMTP Line” has the meaning set forth in the recitals above.

     “Mcf” means one thousand (1,000) cubic feet, and “MMcf” means one million (1,000,000) cubic
feet.

     “MMBtu” means one million (1,000,000) Btu.

     “Month” means a period beginning at 9:00 a.m. (local time) on the first day of a calendar
month and ending at 9:00 a.m. (local time) on the first day of the next succeeding calendar month.

     “Payment Date” has the meaning set forth in Section 14.2.

     “PCL” or “Process Confirmation Letter” has the meaning set forth in Section 5.3.

     “PCL Gas” means that portion of the KMTP Gas that is processed under a PCL.

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     “Person” means any individual, corporation, business trust, association, company, partnership,
joint venture, governmental authority, or other entity.

     “Plant” has the meaning set forth in the recitals above.

     “Process” or “Processing” means the processing of Gas for the recovery of liquefiable
hydrocarbons and/or the control of hydrocarbon dew point.

     “Processing Margin” has the meaning set forth in Article 4.

     “Production Month” has the meaning set forth in Section 3.1.

     “Products” means commercial products fractionated either in the Plant or elsewhere, including,
but not limited to, condensate, natural gasoline, butane, isobutane, propane and ethane.

     “Psia” means pounds per square inch absolute.

     “Psig” means pounds per square inch gauge.

     “PTR” means plant thermal reduction, that is, the amount (expressed in MMBtu) by which Inlet
Gas is reduced by reason of shrinkage (including recovered condensate), fuel, flares and other
losses in the Plant during operations.

     “PTR Make-up Gas” has the meaning set forth in Section 10.1.

     “Residue Gas” means the Gas remaining at the outlet of the Plant after the reduction of Inlet
Gas by PTR.

     “Residue Gas Redelivery Point” means the flange or weld on the downstream side of the
emergency shut—down valve installed downstream of the Plant and connecting to KMTP’s pipeline.

     “Ship Channel Index” means the Index published in Inside F.E.R.C.’s Gas Market Report for the
first of each month under the heading “Market Center Spot-Gas Prices,” subheading “East Texas,
Houston Ship Channel” or if Inside F.E.R.C.’s Gas Market Report ceases to be published or fails to
publish said index price, an alternative index price that is comparable selected by the parties.

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ARTICLE 2. — CERTAIN OBLIGATIONS OF THE PARTIES

     2.1. Commitments of the Parties

     Subject to the terms and conditions herein, KMTP agrees to deliver or cause to be delivered to
COPANO at the Delivery Point all of the Gas in the KMTP Line available for delivery at the Delivery
Point. COPANO shall have the exclusive right and option to Process all such Gas in the Plant.

     Notwithstanding the foregoing, KMTP shall have the right to require COPANO to bypass the Plant
with all or part of the Inlet Gas during any period in which the threat of hurricanes or freezing
weather in the U. S. Gulf Coast area is imminent, present or recent, if, in KMTP’s sole opinion,
such Inlet Gas is needed to fulfill KMTP’s contract obligations. During such period, to the extent
of such bypass, the payment obligations of the parties hereto under Article 5, and COPANO’s
performance obligations under Section 2.3 shall be deemed suspended and waived by both KMTP and
COPANO.

     2.2. Bypass; Suspension of Processing.

     Subject to the provisions of the immediately succeeding sentence, COPANO shall have the right
to: (i) bypass the Plant with all or a portion of the KMTP Gas, (ii) suspend processing, or (iii)
suspend or curtail the operation of the Plant at any time and from time to time during the term of
this Agreement. However, notwithstanding such bypass, suspension or curtailment, unless such
bypass, suspension or curtailment is the result of force majeure or KMTP’s request to bypass the
KMTP Gas: (i) each of the parties hereto shall continue to pay the amounts it is required to pay
under Article 5 hereof; and (ii) COPANO shall condition Gas hereunder as required by Section 2.3.

     2.3. Hydrocarbon Dew Point Control.

     Upon execution of this Agreement, COPANO shall promptly commence design and construction of an
additional electric propane refrigeration compressor to be located at the Plant. COPANO
anticipates that said refrigeration compressor will be operational within 180 days. Until said
refrigeration compressor is operational, COPANO shall condition Gas delivered to the Plant such
that all Gas in the KMTP Line immediately downstream of the Plant shall have a hydrocarbon dew
point no greater than ** degrees (**o) Fahrenheit at the pressures existing in the KMTP Line from
time to time. After said refrigeration compressor is operational, COPANO shall condition Gas
delivered to the Plant such that all Gas in the KMTP Line immediately downstream of the Plant shall
have a cricondentherm hydrocarbon dew point no greater than ** degrees (**o) Fahrenheit. COPANO
shall provide such gas conditioning service by any means it determines, including but not limited
to the Processing of a partial quantity of Inlet Gas sufficient to enable it to meet the
specifications set out above. Notwithstanding the foregoing, COPANO shall not be obligated to

5

 

Process more than a total of 550 MMcf of Gas per day. If the volume of Gas delivered by KMTP
to the Plant exceeds 550 MMcf per day, COPANO may, but shall not be obligated to Process volumes in
excess of 550 MMcf per day. In such case, the hydrocarbon dew point of Gas in the KMTP Line
immediately downstream of the Plant may exceed the specifications set forth in this Section 2.3 to
the extent resulting from the delivery by KMTP of Inlet Gas in excess of 550 MMcf per day.

     2.4. Termination of KMTP Conditioning and Blending Fees

     From and after the Effective Date, notwithstanding any prior agreement or agreements between
the parties hereto or any of their Affiliates to the contrary, COPANO and its Affiliates shall not
be obligated to bear or pay, and KMTP and its Affiliates shall not charge COPANO or any of its
Affiliates, or deduct from any payments made to COPANO or any of its Affiliates, any fees to
condition or blend COPANO Gas to meet KMTP’s hydrocarbon dew point specifications. From and after
the Effective Date, notwithstanding any prior agreement or agreements between KMTP and any of its
Affiliates and any third party to the contrary, no third party shall be obligated to bear or pay,
and KMTP and its Affiliates shall not charge any third party, or deduct from payments made to any
third party, any fees to condition or blend COPANO Gas to meet KMTP’s hydrocarbon dew point
specifications unless COPANO and KMTP agree in writing that such charges or deductions may be made
by KMTP or its Affiliates. KMTP and COPANO shall amend any existing agreements between them and/or
execute any new agreement(s) necessary to effectuate the agreement set forth in this Section.

     2.5. Entitlement to Products; Replacement of PTR.

     COPANO shall retain one hundred percent (100%) of the Products obtained by the processing of
KMTP Gas in the Plant, and shall replace one hundred percent (100%) of the PTR attributable to such
processing of the KMTP Gas.

     2.6. Copano Contract Gas

     Copano may only enter into agreements for the processing or conditioning of Copano Contract
Gas after obtaining the written consent of KMTP thereto.

ARTICLE 3. — ALLOCATION OF INLET GAS

     3.1. KMTP Information

     KMTP shall provide COPANO with the volume, average Btu per Mcf, average GPM, and any other
information necessary for the processing allocation of the KMTP Gas and the Copano Gas by the fifth
Business Day of each Month following the Month such KMTP Gas and/or Copano Gas is delivered to the
Plant (the “Production Month”). Such information shall be provided separately for (i) PCL Gas,
(ii) Inlet Gas; (iii) Copano Contract Gas; and (iv) Copano Pipeline Gas.

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     3.2. KMTP Gas Calculations.

KMTP shall calculate and report to COPANO by the fifth Business Day of each Month following
the Production Month the Mcf, MMBtu, Btu factor, and average GPM by component of the KMTP Gas as
follows:

KMTP Gas Btu factor =Heating Value of KMTP Gas (expressed in MMBtu)/Volume of KMTP Gas
(expressed in Mcf)

KMTP Gas MMBtu =Heating Value of Inlet Gas (expressed in MMBtu) minus the Heating Value of
Copano Gas (expressed in MMBtu)

KMTP Gas Mcf =Volume of Inlet Gas (expressed in Mcf) minus the Volume of Copano Gas
(expressed in Mcf)

KMTP Gas GPM by component = (Inlet Gas theoretical gallons by component minus the Copano Gas
theoretical gallons by component)/Volume of KMTP Gas Mcf(expressed in Mcf)

Sum of each Copano Gas theoretical gallons by component = the sum of each Copano Gas GPM by
component times the applicable Copano Gas Mcf

Inlet Gas theoretical gallons by component = Inlet Gas GPM by component times the Inlet Gas
(expressed in Mcf)

An example of the foregoing procedure for the calculation of Mcf, MMBtu, Btu factor, and average
GPM by component for the KMTP Gas is set forth in Exhibit A attached hereto.

ARTICLE 4. — DETERMINATION OF THE PROCESSING MARGIN

KMTP and COPANO shall calculate the processing margin for each Production Month (the
“Processing Margin”) in accordance with the formulae set forth in Part 1 of Exhibit D hereto and
the provisions of this Article 4. Part 2 of Exhibit D hereto is an example of the Processing
Margin calculation for a Production Month in which: (i) GPM values are assumed to be those set
forth in cells C13 through C19, (ii) the Ship Channel Index is assumed to be $** per MMBtu (cell
H7), (iii) Product prices less deductions referred to in the last sentence of this Article 4 are
assumed to be those set forth in cells L13 through L19; and (iv) the Heating Value of KMTP Gas is
assumed to be ** MMBtu/Mcf (cell D23). In calculating the Processing Margin, the parties shall use
the following inputs: (i) the actual GPM values for the Production Month for each Product
attributable to the KMTP Gas (as reported the following month by KMTP pursuant to Article 3), (ii)
the actual KMTP Gas Btu factor for the full Production Month (as reported the following month by
KMTP pursuant to Article 3), (iii) the Ship Channel Index (cell H7) for the Production Month, and
(iv) the actual prices received by Copano

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for the Production Month for each Product, less any third party transportation and
fractionation fees, other third party costs or deductions, and less ** per gallon.

ARTICLE 5. — PAYMENTS 

5.1. Payments by Copano

For any Production Month for which the Processing Margin is greater than ** per gallon, Copano
shall pay KMTP an amount calculated as follows:

KMTP Gas Mcf X (Processing Margin – $** per Gallon) X Recovered GPM of KMTP Gas X
**%

The “Recovered GPM of KMTP Gas” as used in this Section 5.1 and in Section 5.2 shall be determined
as set forth in cell E21 of Exhibit D part 2.

5.2. Payments by KMTP

For any Production Month for which the Processing Margin is less than ** per gallon, KMTP
shall pay COPANO the lesser of the following amounts:

(A) KMTP Gas Mcf X ($** per Gallon — Processing Margin) X Recovered GPM of KMTP
Gas;

or

(B) $** per Mcf X KMTP Gas Mcf.

5.3. Processing Payment — PCL Gas

The parties acknowledge that it may be necessary to structure alternate processing
arrangements to attract rich gas supplies to the KMTP Line and the Plant. A Process Confirmation
Letter (“PCL”) in substantially the form of Exhibit B hereto shall set forth the terms for
processing such Gas, referred to herein as PCL Gas, as mutually agreed upon by COPANO and KMTP.
The PCL shall set forth the procedure for determining the Products and PTR attributable to the PCL
Gas. In the absence of entry by the parties into a PCL, the terms contained in the body of this
contract shall control in regard to all processing carried out pursuant hereto.

5.4 For purposes of the calculations contained in this Article 5, “KMTP Gas” shall be deemed
to include only that KMTP Gas actually processed at the Plant.

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ARTICLE 6. — PRESSURES

     6.1. Delivery Pressure

     Inlet Gas shall be delivered to COPANO at the Delivery Point at the pressure that exists in
the KMTP Line. Although the pressure in the KMTP Line may vary, KMTP will make reasonable efforts
to effect deliveries of Gas at the Delivery Point at a pressure of not less than 750 psig and not
more than 1000 psig. COPANO will accept Gas at the Delivery Point at the KMTP Line pressures;
provided, however, that if KMTP effects deliveries that are outside of the range of pressures
listed above, then COPANO may refuse to accept such deliveries of KMTP Gas for processing,
bypassing all or a part of said Gas as COPANO deems necessary for safe and efficient operation of
the Plant.

     6.2. Pressure Drop

     COPANO shall deliver and KMTP shall receive Residue Gas at the Residue Gas Redelivery Point or
the Alternate Redelivery Point at a pressure that is not more than 50 psig less than the pressure
at which KMTP Gas was delivered at the Delivery Point, unless KMTP will accept a lesser pressure at
the Residue Gas Redelivery Point or the Alternate Redelivery Point.

ARTICLE 7. — CONTENT TESTS

     7.1. Sampling

     The inlet and outlet gas metering and sampling facilities at or near the Delivery Point and
the Residue Gas Redelivery Point shall be owned and operated by KMTP. Such facilities shall be
equipped with chromatographs to provide a continuous chromatographic analysis of KMTP Gas and
Residue Gas returned to KMTP on a daily basis. KMTP shall be responsible for determining the
contents of the Copano Gas by taking samples and analyzing with a chromatograph or by use of a
continuous chromatographic analysis.

     7.2. Notices of Tests

     KMTP shall give COPANO sufficient notice in advance of each test of the gas chromatographs in
order to permit COPANO to have a representative present to witness such tests, and KMTP shall
furnish COPANO in writing the results of each such test of the gas chromatographs.

     7.3. Btu Content

     Heating value determination shall be done according to methods prescribed in Article 11.
Daily MMBtu shall be calculated and accumulated using continuous data from a chromatograph when
available. The average monthly Btu per cubic foot shall be calculated by dividing the sum of the
daily total MMBtu for the month by the sum of the daily total Mcf for the month.

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ARTICLE
8. — PRODUCT AND PTR ALLOCATION

     8.1. Procedures for Allocating Products and PTR

     Each month COPANO shall determine the Products and PTR attributable to each source of Inlet
Gas. The procedure for determining the Products and PTR attributable to KMTP Gas is set forth in
Exhibit ‘C’ attached hereto. COPANO may change the procedure described in Exhibit C hereto upon
written consent of KMTP, which consent shall not be unreasonably withheld. The procedure for
determining the Products and PTR for PCL Gas shall be set forth in the applicable PCL.

ARTICLE 9. — RESIDUE GAS REDELIVERY

     9.1. Residue Gas Allocation to KMTP Gas

     The volume of KMTP Gas at the Delivery Point, less the volumes of PTR allocated pursuant to
Section 8.1, shall be the volume of Residue Gas attributable to KMTP Gas each month.

     9.2. Transfer of Custody and Responsibility for Residue Gas

     COPANO agrees to deliver Residue Gas attributable to KMTP Gas to KMTP or its designee at the
Residue Gas Redelivery Point or the Alternate Redelivery Point as directed by KMTP from time to
time. Custody of and responsibility for Residue Gas attributable to KMTP shall pass from COPANO to
KMTP at such points.

     9.3. Residue Gas Volumes

     COPANO shall use reasonable commercial efforts each day to deliver Residue Gas attributable to
KMTP Gas in the same day as such Gas was delivered to the Plant. Any imbalances in deliveries of
Residue Gas shall be cashed out each month in the same manner specified for PTR Make-Up Gas in
Section 10.2 below.

ARTICLE 10. — MAKE-UP OF PTR

     10.1. Obligation

     COPANO agrees to deliver or cause to be delivered to KMTP, or its designee, a volume of Gas
with an MMBtu content equal to one hundred percent (100%) of the difference between the number of
MMBtu contained in KMTP Gas and the number of MMBtu contained in Residue Gas attributable to KMTP
Gas. Gas so delivered is herein called “PTR Make-up Gas”. COPANO also agrees to deliver or cause
to be delivered to KMTP, or its designee, COPANO’s share of the PTR Make-up Gas attributable to the
PCL Gas in accordance with the terms of the particular PCL.

     10.2. PTR Make-up Gas Balancing

     COPANO shall use reasonable commercial efforts each month to deliver PTR Make-up Gas due KMTP
in the same month as such Gas was delivered to the Plant. The number of MMBtu delivered

10

 

by COPANO as PTR Make-up Gas may not equal the amount due from time to time, and COPANO shall
maintain an account of the over- and under-deliveries of PTR Make-up Gas. Any imbalance in
deliveries of PTR Make-up Gas shall be cashed out each month in accordance with the following:

(a) Over-delivery of PTR Make-up Gas shall be sold to KMTP at a price equal to ** of
the Ship Channel Index for: (i) the month in which the Gas was processed which gave
rise to the PTR Make-up Gas obligation, and (ii) the following month.

(b) Under-delivery of PTR Make-up Gas shall be purchased from KMTP by COPANO at a
price equal to ** of the Ship Channel Index for: (i) the month in which the Gas was
processed which gave rise to the PTR Make-up Gas obligation, and (ii) the following
month.

     10.3. Notice of Volumes

     On or before the third work day preceding the end of each month, KMTP will provide COPANO with
KMTP’s reasonable estimate of Gas volume anticipated to be delivered to the Plant from the KMTP
Line during the next succeeding month, and shall make reasonable efforts to give COPANO advance
notice of expected material changes in this volume. Following each month, COPANO will provide KMTP
by the eighth (8th) workday with a complete listing of PTR Make-up Gas and Residue Gas deliveries.

ARTICLE 11. — MEASUREMENT

     11.1. Assumed Atmospheric Pressure

     The average atmospheric pressure shall be assumed to be fourteen and seven tenths pounds per
square inch (14.7 psi), irrespective of actual elevation or location of the delivery point(s) above
sea level or variations in such atmospheric pressure from time to time, unless specified otherwise.

     11.2. Unit of Volume

     The unit of volume for measurement of Gas for all purposes shall be one (1) cubic foot of Gas
at a base temperature of sixty degrees Fahrenheit (60o F.) and at a base pressure of fourteen and
seventy-three hundredths pounds per square inch absolute (14.73 psia). Where measurement is by
orifice meter, all fundamental constants, observations, records and procedures involved in the
determination and/or verification of the quantity and other characteristics of Gas delivered
hereunder shall be made according to the latest revision of ANSI/API 2530-92 Chapter 14.3, Part 1-4
(AGA Report No. 3), with any revisions, amendments or supplements as may be mutually acceptable to
KMTP and COPANO, unless otherwise specified herein. Measurement by turbine meter, unless specified
otherwise, shall be in accordance with A.G.A. Report No. 7, with any revisions, amendments or
supplements as maybe mutually

11

 

agreeable to the parties hereto. When positive displacement or turbine meters are used for
the measurement of Gas, the flowing temperature of the Gas shall be assumed to be sixty degrees
Fahrenheit (6O° F.) and no correction shall be made for any variation therefrom; provided, however,
KMTP shall have the option of installing or causing to be installed a recording thermometer, should
chart measurement be used, and if KMTP exercises such option and installs or causes to be installed
such thermometer, correction shall be made for each degree variation in the average flowing
temperature for each meter recording. Where measurement is by other than orifice, turbine or
positive meter, standards commonly acceptable in the natural gas industry shall be used in the
determination of all factors involved in the computation of Gas volumes.

     11.3. Adjustment for Supercompressibility

     Adjustment to measured Gas volumes for the effects of supercompressibility shall be made
according to accepted AGA standards. Measuring party shall obtain representative relative density,
gas composition, carbon dioxide and nitrogen mole fraction values, from the Gas samples obtained
for the Gas delivered or received as may be required to compute such adjustments according to
standard testing procedures. Equations for the calculation of supercompressibility will be taken
from the latest revision of AGA Report No. 8, Compressibility for Natural Gas and Other Hydrocarbon
Gases. Each month, the supercompressibility will be calculated using the latest gas analysis and
the monthly average of the flowing temperature and pressure.

     11.4. Determination of Heating Value.

     At the mutual agreement of KMTP and COPANO, the heating value of the Gas may be determined by
recording calorimeter or by the use of a chromatograph, a continuous gas sampler or by taking spot
Gas samples. The arithmetical average of the hourly heating value recorded by a recording
instrument during periods of flow each day shall be considered as the heating value of the Gas
delivered hereunder during such day. If spot or continuous samples are taken, the samples shall be
analyzed on the measuring party’s calorimeter or chromatograph. The result of a sample shall be
applied to Gas deliveries on the first day of the month the sample is removed and for all
succeeding months until a new sample is taken. All heating value determinations made with a
chromatograph shall use physical gas constants for gas compounds as outlined in the latest revision
of GPA 2172 or revisions to related reports to which the parties may mutually agree. Heating value
shall be determined to the nearest whole Btu.

     11.5. Determination of Flowing Temperature

     The temperature of the Gas flowing through the meter or meters shall be determined by the
continuous use of a recording thermometer installed so that it will properly record the

12

 

temperature of the Gas flowing through the meter or meters should chart measurement be used.
The average of the temperature recorded each day shall be used in computing the volumes of Gas for
that day. Temperature shall be determined to the nearest whole degree in Fahrenheit.

     11.6. Determination of Specific Gravity

     The specific gravity of the Gas flowing through the meter or meters may be determined by the
use of a recording gravitometer or chromatograph so that it will properly record the specific
gravity of the Gas flowing through the meter or meters. The average of specific gravity recorded
each day shall be used in computing the volume of Gas for that day. At the mutual agreement of KMTP
and COPANO, the specific gravity of the Gas flowing through the meter or meters may be determined
by means of a portable gravitometer or chromatograph, by taking Gas samples or by the use of a
continuous gas sampler in lieu of a recording gravitometer. In the event Gas samples are taken or a
continuous gas sampler is installed, the samples shall be run on the measuring party’s gravitometer
or chromatograph at another location. If spot or continuous samples are taken, to determine
specific gravity of the Gas, the result of such sample shall be applied to Gas deliveries on the
first day of the month the sample is removed and for all succeeding months until a new sample is
taken. All specific gravity determinations made with a chromatograph shall use physical constants
for gas compounds as outlined in the latest revision of GPA 2172 or revisions to related Reports to
which the parties may mutually agree. Specific gravity shall be determined to the nearest one
thousandth (0.001).

ARTICLE 12. — MEASURING EQUIPMENT AND TESTING

     12.1. Equipment

     At or near each point at which either KMTP Gas or COPANO Gas is measured, KMTP, or its
designee, shall, at its expense, operate and maintain in accurate working order, the meters,
instruments and equipment of standard type necessary to measure the Gas to be delivered hereunder.
KMTP shall likewise furnish, install, operate and maintain, or cause the same to be done, such
instruments and equipment as may be necessary at points other than such point(s) of delivery and
other than any Alternate Redelivery Point to obtain the information to measure the Gas to be
delivered hereunder. The metering and other equipment installed, together with any buildings
erected for such equipment, shall be and remain the property of KMTP.

     As specified by KMTP, all measuring stations provided hereunder shall be equipped with orifice
meter runs, orifice meter gauges, recording gauges or other types of meter or meters of standard
make and design commonly accepted in the natural gas industry in order to accurately measure the
Gas delivered

13

 

hereunder. At KMTP’s and COPANO’S mutual agreement, a computer, transducers and other
associated sensing devices may be installed to accurately measure the Gas delivered hereunder in
accordance with A.G.A. Report Nos. 3,5,6 and 7, as appropriate, in lieu of mechanical devices with
charts. If a computer and associated devices are installed, the values for gross heating value and
specific gravity may be entered either manually (but not more frequently than once per month) or as
real time data if such data is available. Values for carbon dioxide and nitrogen used in
supercompressibility correction determinations shall be entered as real time data if such data is
available or shall be entered manually at intervals mutually agreed upon, but at least once every
six (6) months.

     12.2. Calibration and Tests of Meters

     The measuring party shall calibrate chromatographs, if used, at least once each month against
a standard gas sample. All other measuring equipment shall be calibrated and adjusted as necessary
by the measuring party or as frequently as deemed necessary by KMTP but not less frequently than
once each month. COPANO may, at its option, be present for such calibration and adjustment. KMTP
shall give COPANO notice of the time of all tests sufficiently in advance of conducting same so
that both parties may conveniently have their representatives present. Following any test, any
measuring equipment found to be inaccurate to any degree shall be adjusted immediately to measure
accurately. Each party shall have the right, at any time, to challenge the accuracy of any
measuring equipment used hereunder and may request additional tests. If, upon testing, the
challenged equipment is found to be in error, then it shall be repaired and calibrated. The cost of
any such special testing, repair and calibration shall be borne by the party requiring the special
test if the percentage of inaccuracy is found to be two percent (2%) or less (one percent [1%] if
electronic flow measurement equipment is utilized). Otherwise, the cost shall be borne by the
party operating the challenged measuring equipment.

     12.3. Access to Meters and Records

     The other party shall have access at all reasonable times to the measuring equipment and all
other instruments used by the measuring party in determining the measurement and quality of the Gas
delivered hereunder, but the reading, calibrating, and adjusting thereof shall be done only by
employees, agents or representatives of the measuring party. The measuring party shall keep on
file copies of original records for a period of three (3) years for mutual use of KMTP and COPANO.
Upon request, the measuring party shall submit to the other party copies of original records from
such equipment, subject to return by the party within sixty (60) days after receipt thereof.

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     12.4. Correction of Metering Errors

     If, upon any test, the measuring equipment, in the aggregate for any measurement facility, is
found to be inaccurate by more than two percent (2%) (one percent [1%] if electronic flow
measurement equipment is utilized), registration thereof and any payments based upon such
registration shall be corrected at the rate of such inaccuracy for any period of inaccuracy which
is definitely known or agreed upon; provided, however, if such period is not definitely known or
agreed upon, then such registration and payment shall be corrected for a period extending back
one-half (1/2) of the time elapsed since the last day of calibration.

     12.5. Failure of Meters

     If, for any reason, the measuring equipment is out of service or out of repair so that the
quantity of Gas delivered hereunder through such measuring equipment cannot be ascertained or
computed from the readings thereof, the quantity of Gas so delivered during the period such
equipment is out of service or out of repair shall be estimated and agreed upon by KMTP and COPANO
upon the basis of the best available data, using the first of the following methods which is
feasible:

(a) By using the registration of any duplicate measuring equipment installed by the
measuring party, if installed and registering correctly;

(b) By using the registration of any check measuring equipment of the other party,
if installed and registered accurately;

(c) By correcting the error if the percentage of error is ascertainable by
calibration, test or mathematical calculation;

(d) By estimating the quantity of deliveries by using the volumes delivered under
similar conditions during preceding periods when the measuring equipment was
registering accurately.

     12.6. Check Measuring Equipment.

     COPANO may install, maintain and operate at its own expense, at or near the Delivery Point
hereof, such check measuring equipment as desired; provided, however, that such equipment shall be
installed so as not to interfere with the operation of any other measuring equipment. KMTP shall
have access to such check measuring equipment at all reasonable times, but the reading, calibration
and adjusting thereof and the changing of charts shall be done only by COPANO.

     12.7. New Measurement Techniques

     If, at any time during the term hereof, a new method or technique is developed with respect to
gas measurement or

15

 

liquids measurement or to the determination of the factors used in such measurements, such new
method or technique may be substituted for the method set forth in this Article 12 when the party
employing such new method or technique receives consent from the other party.

     12.8. Liquid Measurement

     COPANO shall measure Products and condensate by utilizing meters operated and maintained in
accordance with recognized industry standards. Measurement procedures and calculations will be in
accordance with the API Manual of Petroleum Measurement. Meter tests and calibration will be
conducted as determined by COPANO, but at least once each month. Procedures used in testing and
calibration will be in accordance with the aforementioned API Manual of Petroleum Measurement to
ensure measurement accuracy to within one—half of one percent. Consecutive meter factors differing
by more than 50/10,000 will result in an adjustment to recorded volumes. KMTP shall have access to
the measuring equipment at all reasonable times, but readings, calibrations and adjustments thereof
shall be done by employees or agents of COPANO. COPANO shall notify KMTP in advance of the
performance of tests and calibrations so that KMTP may have its representative present as a
witness.

ARTICLE 13. — QUALITY

     13.1. Gas Quality Specifications

     All KMTP Gas delivered to the Plant, and PTR Make-up Gas and Residue Gas returned to KMTP
hereunder shall meet the following specifications:

(a) The Gas shall be free of water and other objectionable liquids at the
temperature and pressure at which the Gas is delivered and the Gas shall not contain
any hydrocarbons which might condense to free liquids in the pipeline under normal
pipeline conditions and shall in no event contain water vapor in excess of seven (7)
pounds per one million (1,000,000) cubic feet, measured at fourteen and
seventy-three hundredths pounds per square inch absolute (14.73 psia) at a standard
temperature of sixty degrees Fahrenheit (60° F.).

(b) The Gas shall not contain more than one-quarter (1/4) grain of hydrogen sulphide
per one hundred (100) cubic feet as determined by quantitative methods in general
use within the natural gas industry and as mutually acceptable to the parties
hereto.

(c) The Gas shall not contain more than two (2) grains of total sulphur per one
hundred (100) cubic feet as determined by quantitative methods in general

16

 

use within the natural gas industry and as mutually acceptable to the parties
hereto.

(d) The Gas shall not contain more than one-quarter (1/4) grain of mercaptan per one
hundred (100) cubic feet as determined by quantitative methods in general use within
the natural gas industry and as mutually acceptable to the parties hereto.

(e) The Gas shall not contain in excess of:

(1) Three percent (3%) by volume of carbon dioxide (C02)

(2) Ten parts per million (10 ppm) by volume of oxygen (O2);

(3) Three percent (3%) by volume of nitrogen (N2),

(f) The Gas shall contain no carbon monoxide, halogens or unsaturated hydrocarbons
and not more than four hundred parts per million (400 ppm) of hydrogen.

(g) The Gas shall have a temperature of not more than one hundred and twenty degrees
Fahrenheit (120o F) nor less than forty degrees Fahrenheit (40o F).

(h) The Gas shall contain a daily average heating content of not less than nine
hundred fifty (950) Btu per cubic foot and not more than one thousand one hundred
seventy—five (1,175) Btu per cubic at 14.73 psia, dry.

(i) The Gas shall be commercially free from dust, gum, gum forming constituents or
other objectionable liquid or solid matter that might become separated from the Gas
in the course of transmission through pipelines.

     13.2. Testing

     Tests to determine the quality of Gas shall be conducted by either party at its sole expense
and shall be made as often as mutually agreed upon and as reasonably required by approved standard
methods in general use by the gas industry. The testing party shall promptly furnish the other
party with copies of all test results. The testing party shall give the other party reasonable
notice of all such tests in order that the other party may have its representatives present if it
so desires.

17

 

     13.3. Failure to Meet Quality Specifications

     If any Gas subject hereto fails to meet an applicable quality specification, the receiving
party shall have the right to waive such failure and to continue to receive such Gas. If the
receiving party refuses to receive such Gas and if the delivering party does not elect to treat the
Gas so as to cause the same to meet such quality specification, then such delivering party shall
stop the delivery of Gas that fails to meet such quality specification.

ARTICLE 14. — ACCOUNTING

     14.1. Statements

     COPANO shall provide KMTP by the twentieth (20th) day of each calendar month a statement for
the previous month setting forth the payments due to KMTP or to COPANO pursuant to Article 5 and
any amounts owed to or by KMTP for Residue Gas pursuant to Section 9.3 and for PTR Make—up Gas
pursuant to Section 10.2.

     14.2. Payments

     The party that is owed the greater amount as reflected in a statement referred to in Section
14.1 (the “Creditor Party”) shall net its obligation against the obligation of the other party (the
“Debtor Party”). Specifically, the Debtor Party shall make payment of the difference between
amounts owed by the Creditor Party hereunder and amounts owed by the Debtor Party hereunder.
Payment of such difference shall be made not later than the twenty-fifth (25th) day of
the month following the month of delivery (the “Payment Date”). If the amounts owed by each party
to the other are equal, neither party shall make payment. If the Payment Date falls on a Saturday,
or a bank holiday other than Monday, payment shall be made on the preceding banking day. If the
Payment Date falls on a Sunday or a Monday bank holiday, payment shall be made on the succeeding
banking day.

     14.3. Auditing

     Each party shall have the right at reasonable hours to examine the books, records, and charts
of the other party to the extent necessary to verify the accuracy of any statement, payment,
calculation, or determination made pursuant to the provisions of this Contract. If any such
examination shall reveal, or if either party shall discover, any error or inaccuracy in its own or
the other party’s statement, payment, calculation, or determination, then proper adjustment and
correction thereof shall be made as promptly as practicable thereafter, provided that all
statements, payments, calculations and determinations shall be final unless questioned within three
(3) years of the date thereof.

     14.4. Failure to Pay

     If either party fails to pay any amount payable to the other hereunder when due, interest
thereon shall accrue and be

18

 

payable from the date on which payment was due until the date payment is made. The rate of
such interest shall be the prime rate of interest quoted by Fleet National Bank; provided, that the
interest rate provided herein shall never exceed the highest rate of interest permitted by
applicable law. If any such failure to pay continues for thirty (30) days after protest in
writing, the aggrieved party may suspend deliveries or acceptance of deliveries of Gas hereunder
and, in addition, may terminate this Contract upon written notice to the non—paying party as
applicable. The exercise of any such right by either party shall be in addition to any and all
other remedies available to such party.

ARTICLE 15. — FORCE MAJEURE

     15.1. Definition.

     If either party is rendered unable, wholly or in part, by force majeure to carry out its
obligations (except financial obligations) under this Contract, it is agreed that, on such party’s
giving notice and reasonably full particulars of such force majeure in writing or by telegraph to
the other party within a reasonable time after the occurrence of the cause relied on, then the
obligations of the party giving such notice, so far as they are affected by force majeure, shall be
suspended during the continuance of any inability so caused, but for no longer period, and such
cause shall so far as possible be remedied with all reasonable dispatch. The term “force majeure,”
as employed herein, means acts of God, strikes, lockouts or other industrial disturbances, acts of
the public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, storms, hurricanes, floods, high water, washouts, arrests and restraints of
government and people, civil disturbances, explosions, breakage or accident to machinery or lines
of pipe, freezing of wells or lines of pipe, partial or entire failure of wells, and any other
causes, whether of the kind herein enumerated or otherwise, not reasonably within the control of
the party claiming suspension; such term shall likewise include (a) in those instances where either
party hereto is required to obtain servitudes, rights—of-way grants, permits or licenses to enable
such party to perform hereunder, the inability of such party to acquire, or the delays on the part
of such party in acquiring, at reasonable cost and after the exercise of reasonable diligence, such
servitudes, rights-of—way grants, permits or licenses, and (b) in those instances where either
party hereto is required to furnish materials and supplies for the purpose of constructing or
maintaining facilities or is required to secure permits or

19

 

permissions from any governmental agency to enable such party to perform hereunder, the
inability of such party to acquire, or the delays on the part of such party in acquiring, at
reasonable costs and after the exercise of reasonable diligence, such materials and supplies,
permits and permissions.

     15.2. Strikes and Lockouts

     It is understood and agreed that the settlement of strikes or lockouts shall be entirely
within the discretion of the party having the difficulty, and that the above requirement that any
force majeure shall be remedied with all reasonable dispatch shall not require the settlement of
strikes or lockouts by acceding to the demands of an opposing party when such course is inadvisable
in the discretion of the party having the difficulty.

     15.3. Plant Loss

     In the event of loss of or damage to all or a substantial part of the Plant or the KMTP Line
for any cause, COPANO and KMTP shall have no obligation to repair, rebuild, or replace same unless
each party determines, in its sole discretion, to do so, and the above requirement that any force
majeure shall be remedied with all reasonable dispatch shall not apply in such event.

ARTICLE 16. — TAXES

     16.1. Taxes

     As between the parties hereto, KMTP shall be responsible for all taxes and assessments levied
on facilities owned by KMTP and activities prior to the delivery of COPANO Gas and KMTP Gas at the
Delivery Point and after the redelivery at the Residue Gas Redelivery Point or Alternate Redelivery
Point. COPANO shall be responsible for all taxes and assessments levied on facilities owned by
COPANO and activities from the time Copano Gas and/or KMTP Gas is so delivered to Copano until the
redelivery of Gas to KMTP at the Residue Gas Redelivery Point or the Alternate Delivery Point.

ARTICLE 17. — LIABILITY; TITLE AND WARRANTIES

     17.1. Transfer of Custody of and Responsibility For Gas

     As between KMTP and COPANO, KMTP shall be in control and possession of the Gas until such Gas
has been delivered to COPANO at the Delivery Point and after it has been redelivered to KMTP at the
Residue Gas Redelivery Point or Alternate Redelivery Point. As between COPANO and KMTP, COPANO
shall be in control and possession of the Gas after it has been delivered to COPANO at the Delivery
Point and until it is redelivered to KMTP at the Residue Gas Redelivery Point or Alternate
Redelivery Point. Nothing in this Section 17.1 shall affect title to the Gas, which will remain
with the owner thereof.

20

 

     17.2. Title to Products

     Title to Products attributable to KMTP Gas shall be transferred to COPANO at the Delivery
Point.

     17.3. Title to PTR

     Title to PTR Make-up Gas shall be transferred to KMTP at the point at which said PTR Make-Up
Gas is delivered to KMTP.

     17.4. Liability

     Neither Party shall be liable to the other for punitive or exemplary damages under this
Agreement.

     17.5. Warranties

     KMTP hereby warrants that it has the right to have processed all KMTP Gas delivered from the
KMTP Line and agrees, if notified by COPANO, to indemnify COPANO against all suits, actions, debts,
accounts, damages, costs (including attorneys’ fees), losses and expenses arising from or out of
any adverse legal claims of any and all persons with respect to such processing rights. COPANO
hereby warrants that it has the right to process COPANO Gas and warrants title to PTR Make—up Gas
and agrees, if notified by KMTP, to indemnify KMTP against all suits, actions, debts, accounts,
damages, costs (including attorneys’ fees), losses and expenses arising from or out of any adverse
legal claims of any and all persons with respect to such right to process and/or title.

ARTICLE 18. — SUCCESSORS AND ASSIGNS

     18.1. Binding of Terms

     All the terms and conditions of this Contract shall extend to and be binding upon the
respective successors and assigns of the parties hereto.

     18.2. Conditions

     No assignment of an interest in this Contract shall be made by either party without the prior
written consent of the other party; which consent shall not be unreasonably withheld, provided,
that prior written consent shall not be required: (i) for an assignment to an Affiliate of a party
in connection with a corporate consolidation, amalgamation, merger or reorganization or (ii) for an
assignment by either party to a purchaser in connection with a sale of the KMTP Line by KMTP or the
Plant by COPANO.

     18.3. Pledged Rights

     Notwithstanding any provision hereof to the contrary, any party hereto shall have the right to
pledge, mortgage or grant a security interest in its rights hereunder to secure the indebtedness of
such party and the consent of the other party

21

 

shall not be required in connection with the foreclosure of any liens, security interests
created by any such pledge, mortgage or security agreement.

ARTICLE 19. — NOTICES

     19.1. Addresses

     All notices to be given hereunder shall be in writing and shall be delivered personally or by
prepaid mail, overnight delivery service, telefacsimile, or telegram to the respective parties at
the addresses stated below or to such other addresses as they shall respectively designate
hereafter in writing from time to time:

To KMTP:

Address for Notices:

KINDER MORGAN TEXAS PIPELINE, L.P.

One Allen Center

500 Dallas Street, Suite 1000

Houston, Texas 77002

ATTN:   Accounting Dept. (For Accounting Matters)

Telephone:       (713)369-9000

Facsimile:          (713)369-9385

KINDER MORGAN TEXAS PIPELINE, L.P.

One Allen Center

500 Dallas Street, Suite 1000

Houston, Texas 77002

ATTN:   Vice President, Gas Supply & Processing (For all other matters)

Telephone:      (713)369-8860

Facsimile:         (713)369-9395

Address for Payments:

KINDER MORGAN TEXAS PIPELINE, L.P.

The Chase Manhattan Bank, New York

ABA No.     **

Acct. No.     **

22

 

To COPANO:

Address for Notices:

Copano Processing, L.P.

ATTN:       Contract Services (For Contract Matters)

2727 Allen Parkway, Suite 1200

Houston, Texas 77019-2154

Telephone:        713-621-9547

Facsimile:         713-621-9553

Copano Processing, L.P.

ATTN:       Plant Accounting (For Accounting Matters)

2727 Allen Parkway, Suite 1200

Houston, Texas 77019-2154

Telephone:        713-621-9547

Facsimile:         713-621-9545

Copano Processing, L.P.

ATTN:      Vice President Gas Processing (For all other matters)

2727 Allen Parkway, Suite 1200

Houston, Texas 77019-2154

Telephone:        713-621-9547

Facsimile:         713-621-9545

Address for Payments:

Copano Processing, L.P.

Comerica Bank — Texas

ABA No.       **

Acct No.       **

ARTICLE 20. — TERM

     20.1. Term

     This Contract shall be effective as of the Effective Date and shall continue in full force and
effect for a primary term ending on January 31, 2011, and year to year thereafter, unless canceled
by either party giving advance written notice to the other at least 180 days before the date of
termination of the primary term or any subsequent anniversary date thereof.

ARTICLE 21. — MISCELLANEOUS

     21.1. Upstream Processing

     KMTP shall not process or arrange for processing of any of the Gas in the KMTP Line upstream
of the Plant or prior to delivery of such Gas into the KMTP Line with a third party

23

 

processor except that KMTP shall have the sole option to process or arrange for processing of
any Gas upstream of the Plant from any pipeline or plant that KMTP or any Affiliate of KMTP
acquires after the date of this Agreement if such Gas was subject to a processing agreement on the
effective date of the acquisition of such pipeline or plant by KMTP or its Affiliate. Arrangements
for processing by a third party seller or transporter of Gas delivered into the KMTP Line shall
not, for purposes hereof, be deemed arrangements by KMTP.

     21.2. Indemnity

     KMTP and COPANO each hereby releases, relinquishes and discharges and, at the sole cost and
expense of each, shall indemnify, protect, save harmless and defend the other of and from any and
all claims, demands, causes of actions, damages, liabilities and costs, (including reasonable
attorneys’ fees,) of any and every nature whatsoever arising out of the performance of this
Contract which are asserted against the indemnitee by any person, whether they be third persons or
employees of either of the parties hereto, for personal injury, death, or loss of or damage to
property where such personal injury, death, or loss of or damage to property is due to the sole
negligence or sole willful misconduct of the indemnitor, its employees, agents, contractors or
subcontractors. Where personal injury, death, or loss of or damage to property is the result of
joint negligence or willful misconduct of KMTP and COPANO, their employees, agents, contractors or
subcontractors, the indemnitor’s duty of indemnification shall be in the same proportion that the
indemnitor’s negligent acts or omissions contributed thereto. If KMTP or COPANO is held strictly
liable under law, the indemnitor’s duty of indemnification shall be in the same proportion that the
indemnitor’s negligent acts or omissions contributed to the personal injury, death, or losses of or
damage to property for which the indemnitee is held strictly liable.

     21.3. Waiver

     No waiver by KMTP or COPANO of any default of the other party under this Contract shall
operate as a waiver of any subsequent default, whether of a like or a different character.

     21.4. Performance

     Any provision herein that requires action by either party where a performance date is not
specified shall require performance of such action within a reasonable time.

     21.5. Drafting

     As between the parties hereto, it shall be conclusively presumed that each and every provision
of this Contract was drafted jointly by KMTP and COPANO.

24

 

     21.6. Headings

     The Table of Contents and headings contained in this Contract are used solely for convenience
and do not constitute a part of the agreement between the parties hereto, and they should not be
used to aid in any manner in construing this Contract.

     21.7. Third Party Beneficiaries

     It is the specific intention of the parties hereto that the provisions of this Contract shall
not impart rights enforceable by any person, firm, or organization not a party or not a successor
or assignee of a party to this Contract and, therefore, that there be no third party beneficiary to
this agreement.

     21.8. Prior Contract

     This Agreement supersedes and replaces the 2004 Gas Processing Agreement as of the Effective
Date. This Agreement shall not alter or affect any rights or obligations of the parties under the
2004 Gas Processing Agreement that accrued prior to the Effective Date.

     21.10 Replacement Indices.

     Should any index utilized by the parties be unavailable or cease to be published, the parties
shall promptly meet and in good faith determine an alternative index or payment methodology that
will place each in a comparable economic position to that they would have been in had the original
index have been available and utilized. Should the parties be unable to so reach agreement, either
may submit the matter for arbitration pursuant to the expedited rules of the American Arbitration
Association.

     IN WITNESS WHEREOF, this Contract is executed in multiple originals as of the dates signified
below, effective as of the date first above written.

COPANO PROCESSING, L.P.

by Copano Processing (Texas), L.L.C.

its Managing General Partner

By:                                                                                 

Title:   Senior Vice President

Date:                                                             

25

 

KINDER MORGAN TEXAS PIPELINE, L.P.

By Kinder Morgan Tejas Pipeline GP, LLC

its general partner

By:                                                                                 

Title:      VICE PRESIDENT

Date:                                                             

26

 

EXHIBIT B

PROCESSING CONFIRMATION LETTER (PCL)

KMTP METER STATION NO.______

Name of Producer:

Field(s):

County:

Quantity:

Quality:

Effective Date:

Term of Contract:

Renewal:

KMTP share of:

Products:

PTR:

Direct Operating Costs:

Allocation Procedure: To be attached

Other Fees Paid:

Other Provisions:

This Processing Confirmation Letter is accepted by and agreed to by:

	 	 	 	 	 	 	 	 	 
	Kinder Morgan Texas Pipeline, L.P.	 	 	 	COPANO PROCESSING, L.P.
	 
	 	 	 	 	 	 	 	 
	This ____ day of                                         , 200__	 	 	 	This ____ day of                                         , 200__
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 

 

 

EXHIBIT C

DETERMINATION OF PLANT PRODUCTS, PTR AND RESIDUE GAS

A.   Determination of Plant Products

     The quantity of Products attributable to the KMTP Gas delivered to COPANO hereunder shall be
determined by multiplying the total quantity of each such Product contained as a component in the
KMTP Gas by the recovery factor for each Product. The Recovery Factor shall equal a fraction, the
numerator of which is the quantity of each such Plant Product recovered and saved in the Plant, and
the denominator of which is the total quantity of each such Plant Product contained as a component
of Gas from all sources delivered to the Plant for processing.

B.   Determination of PTR

     The PTR shall be the sum of the Plant fuel and shrinkage as determined below:

	 	(i)	 	The quantity of the KMTP Gas, stated in MMBtu’s, that is
consumed as Plant fuel, flare and vent in the processing of the KMTP Gas during
a given Month shall be determined by multiplying the total quantity of MMBtu’s
consumed as Plant Fuel, flare and vent in Plant operations during such Month by
a fraction, the numerator of which is the total quantity of KMTP Gas in MMBtu
and the denominator of which is the total quantity in MMBtu of Gas from all
sources delivered to the Plant for processing; and
	 
	 	(ii)	 	Shrinkage shall be calculated each Month by multiplying the
number of gallons of each component recovered and allocated to the KMTP Gas by
the Btu equivalent of each such component as set forth in the GPA Technical
Standards Publication No. 2145-96, as revised from time to time and as adjusted
to sixty degrees Fahrenheit (60°) and 14.73 psia pressure base; the aggregate
Btu’s of all such components shall constitute the shrinkage hereunder.

 

 

C.   Determination of Residue Gas

The quantity of Residue Gas shall be determined by subtracting the quantity of PTR in MMBtu
attributable to the KMTP Gas from the quantity of KMTP Gas in MMBtu delivered for processing
at the Plant.

2

 

EXHIBIT D PART 1 FORMULAE

Processing Margin Calculation

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	PRODUCER	 	KMTP	 	 	 	 	 	Ship Channel Index	 	**	 	 	 	 	 	 
	PLANT	 	HOUSTON CENTRAL	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	ACTUAL PROD. PRICES
	 	 	 	 	 	 	RECOVERY	 	RECOVERED	 	LIQUID VOLUME	 	LIQUID PRICE	 	COMPOSITE PRICE	 	COMPONENT	 	COMPOSITE	 	LESS DEDUCTIONS
	COMPONENT	 	 	 	GPM	 	%	 	GPM	 	%	 	$/GAL	 	$/GAL	 	Btu/GAL	 	Btu/GAL	 	$/GAL
	Ethane
	 	 	 	**	 	**	 	=(C13*D13)/100	 	=E13/E$21	 	=L13	 	=F13*G13	 	66369	 	=F13*I13	 	**
	Propane
	 	 	 	**	 	**	 	=(C14*D14)/100	 	=E14/E$21	 	=L14	 	=F14*G14	 	91599	 	=F14*I14	 	**
	I-Butane
	 	 	 	**	 	**	 	=(C15*D15)/100	 	=E15/E$21	 	=L15	 	=F15*G15	 	99652	 	=F15*I15	 	**
	n-Butane
	 	 	 	**	 	**	 	=(C16*D16)/100	 	=E16/E$21	 	=L16	 	=F16*G16	 	103724	 	=F16*I16	 	**
	I-Pentane
	 	 	 	**	 	**	 	=(C17*D17)/100	 	=E17/E$21	 	=L17	 	=F17*G17	 	109584	 	=F17*I17	 	**
	n-Pentane
	 	 	 	**	 	**	 	=(C18*D18)/100	 	=E18/E$21	 	=L18	 	=F18*G18	 	110946	 	=F18*I18	 	**
	Hexanes+
	 	 	 	**	 	**	 	=(C19*D19)/100	 	=E19/E$21	 	=L19	 	=F19*G19	 	121000	 	=F19*I19	 	**
	 
	TOTALS
	 	 	 	=SUM(C13:C20)	 	 	 	=SUM(E13:E20)	 	=SUM(F13:F20)	 	 	 	=SUM(H13:H20)	 	 	 	=SUM(J13:J20)	 	 
	 
	KMTP GAS (Btu/cf)
	 	 	 	 	 	**	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	GAS SALES VALUE($/MMBtu)
	 	 	 	 	 	**	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	SHRINKAGE VALUE($/Gal)
	 	 	 	 	 	=(J21/1000000)*D25
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	FRAC MARGIN($/Gal)
	 	 	 	 	 	=H21-D27
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	FUEL CONSUMPTION(MMBtu/Gal)
	 	 	 	 	 	** * D23/1000)/E21
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	FUEL COST($/Gal)
	 	 	 	 	 	=D31*D25
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	PROCESSING MARGIN($/Gal)
	 	 	 	 	 	=D29-D33
	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT D PART 2 EXEMPLAR WITH REPRESENTATIVE VALUES

Processing Margin Calculation

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	PRODUCER	 	KMTP	 	 	 	 	 	Ship Channel Index	 	**	 	 	 	 	 	 
	PLANT	 	HOUSTON CENTRAL	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	ACTUAL PROD. PRICES
	 	 	 	 	 	 	RECOVERY	 	RECOVERED	 	LIQUID VOLUME	 	LIQUID PRICE	 	COMPOSITE PRICE	 	COMPONENT	 	COMPOSITE	 	LESS DEDUCTIONS
	COMPONENT	 	 	 	GPM	 	%	 	GPM	 	%	 	$/GAL	 	$/GAL	 	Btu/GAL	 	Btu/GAL	 	$/GAL
	Ethane
	 	 	 	**	 	**	 	**	 	0.50638	 	**	 	0.27344	 	66,369	 	33,608	 	**
	Propane
	 	 	 	**	 	**	 	**	 	0.23328	 	**	 	0.21462	 	91,599	 	21,368	 	**
	I-Butane
	 	 	 	**	 	**	 	**	 	0.06757	 	**	 	0.08446	 	99,652	 	6,733	 	**
	n-Butane
	 	 	 	**	 	**	 	**	 	0.06201	 	**	 	0.07318	 	103,724	 	6,432	 	**
	I-Pentane
	 	 	 	**	 	**	 	**	 	0.03236	 	**	 	0.04951	 	109,584	 	3,546	 	**
	n-Pentane
	 	 	 	**	 	**	 	**	 	0.01656	 	**	 	0.02533	 	110,946	 	1,837	 	**
	Hexanes+
	 	 	 	**	 	**	 	**	 	0.08184	 	**	 	0.12521	 	121,000	 	9,903	 	**
	 
	TOTALS
	 	 	 	**	 	 	 	**	 	1.00000	 	 	 	0.84576	 	 	 	83,428	 	 
	 
	KMTP GAS (Btu/cf)
	 	 	 	 	 	**	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	GAS SALES VALUE($/MMBtu)
	 	 	 	 	 	**	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	SHRINKAGE VALUE($/Gal)
	 	 	 	 	 	**	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	FRAC MARGIN($/Gal)
	 	 	 	 	 	**	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	FUEL CONSUMPTION(MMBtu/Gal)
	 	 	 	 	 	**	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	FUEL COST($/Gal)
	 	 	 	 	 	**	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	PROCESSING MARGIN($/Gal)
	 	 	 	 	 	$0.0900exv10w2

 

Exhibit 10.2

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) dated as of the 26th day of
January, 2006, by and among COPANO ENERGY, L.L.C. (“Borrower”), BANK OF AMERICA, N.A., as
Administrative Agent, and the Lenders party hereto.

W I T N E S S E T H:

     WHEREAS, Borrower, Administrative Agent and Lenders named therein entered into that certain
Credit Agreement dated as of August 1, 2005 (the “Original Agreement”) for the purposes and
consideration therein expressed; and

     WHEREAS, Borrower, Administrative Agent and Lenders desire to amend the Original Agreement for
the purposes described herein;

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

ARTICLE I. — Definitions and References

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

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

          “Amendment” means this First Amendment to Credit Agreement.

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

ARTICLE II. — Amendments

     § 2.1. Indebtedness. Section 7.03(b) of the Original Agreement is hereby amended to
read as follows:

     (b) unsecured Indebtedness under the Senior Bridge Facility (or any unsecured
refinancing or replacement thereof with a maturity not earlier than 91 days after the
Maturity Date and on terms and conditions not materially more restrictive than the Loan
Documents taken as a whole);

     § 2.2. Hedging Contracts. The references to “an Approved Counterparty” in Section
7.12(a)(iii) and Section 7.12(b) of the Original Agreement are hereby amended to refer instead to
“a Lender Counterparty or an Approved Counterparty”.

     § 2.3. Burdensome Agreements. Section 7.09(b) of the Original Agreement is hereby
amended in its entirety to read as follows:

1

 

     (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is
granted to secure another obligation of such Person, unless such Contractual Obligation
provides that such requirement shall not apply with respect to Liens granted to secure the
Obligations.

ARTICLE III. — Conditions of Effectiveness

     § 3.1. Effective Date. This Amendment shall become effective as of the date first
written above, when and only when

     (i) Administrative Agent shall have received, at Administrative Agent’s office a
counterpart of this Amendment executed and delivered by Borrower and Required Lenders;

     (ii) Administrative Agent shall have additionally received all of the following
documents, each document (unless otherwise indicated) being dated the date of receipt
thereof by Administrative Agent, duly authorized, executed and delivered, and in form and
substance satisfactory to Administrative Agent:

Supporting Documents. Such supporting documents as Administrative Agent may
reasonably request.

ARTICLE IV. — Representations and Warranties

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

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

     (b) No Default exists.

     (c) No Material Adverse Effect has occurred, and no event or circumstance has occurred that
could reasonably be expected to cause a Material Adverse Effect, relating to the consolidated
financial condition or business of the Loan Parties since the date of the date of the most recent
financial statements delivered pursuant to Section 4.01(a)(viii) or Section 6.01 of
the Credit Agreement, as applicable.

     (d) Each Loan Party is Solvent.

     (e) The execution, delivery and performance by each Loan Party of this Amendment has been duly
authorized by all necessary corporate or other organizational action, and do not and will not (a)
contravene the terms of any of such Person’s Organization Documents; (b)

2

 

conflict with or result in any breach or contravention of, or the creation of any Lien under,
or require any payment to be made under (i) any Contractual Obligation to which such Person is a
party or affecting such Person or the properties of such Person or any of its Restricted
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its property is subject; or (c) violate any Law.

     (f) No approval, consent, exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority or any other Person is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, any Loan Party of this
Amendment.

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

ARTICLE V. — Miscellaneous

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

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

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

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

3

 

     § 5.5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA IN ALL RESPECTS, INCLUDING CONSTRUCTION, VALIDITY AND PERFORMANCE.

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

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

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

	 	By:
	 	/s/ Matthew J. Assiff	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Matthew J. Assiff	 	 
	 

	 	Title:
	 	Senior Vice President and	 	 
	 

	 	 	 	Chief Financial Officer	 	 

4

 

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

	 	By:
	 	/s/ Todd G. MacNeill	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Todd G. MacNeill	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 

5

 

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

	 	By:
	 	/s/ Gregory B. Hanson	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gregory B. Hanson	 	 
	 

	 	Title:
	 	Vice President	 	 

6

 

	 	 	 	 	 	 	 
	 	 	COMERICA BANK,
	 	 	as a Lender and Co-Syndication Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Huma Vadgama	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Huma Vadgama	 	 
	 

	 	Title:
	 	Vice President	 	 

7

 

	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,
	 	 	as a Lender and Co-Syndication Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Justin M. Alexander	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Justin M. Alexander	 	 
	 

	 	Title:
	 	Vice President	 	 

8

 

	 	 	 	 	 	 	 
	 	 	BANK OF SCOTLAND,
	 	 	as a Lender and Co-Documentation Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Karen Weich	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Karen Weich	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 

9

 

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

	 	By:
	 	/s/ Darrell Holley	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Darrell Holley	 	 
	 

	 	Title:
	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Casey Lowary	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Casey Lowary	 	 
	 

	 	Title:
	 	Senor Vice President	 	 

10

 

	 	 	 	 	 	 	 
	 	 	ROYAL BANK OF CANADA, as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jason York	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Jason York	 	 
	 

	 	Title:
	 	Attorney-In-Fact	 	 

11

 

	 	 	 	 	 	 	 
	 	 	HARRIS NESBITT FINANCING, INC.,
	 	 	as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Cahal B. Carmody	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Cahal B. Carmody	 	 
	 

	 	Title:
	 	Vice President	 	 

12

 

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

	 	By:
	 	/s/ Pedro Ramirez	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Pedro Ramirez	 	 
	 

	 	Title:
	 	Authorized Signatory	 	 

13

 

	 	 	 	 	 	 	 
	 	 	AMEGY BANK NATIONAL ASSOCIATION,
	 	 	as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mark A. Serice	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Mark A. Serice	 	 
	 

	 	Title:
	 	Vice President	 	 

14

 

	 	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST COMPANY
	 	 	AMERICAS, as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Susan Lefevre	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Susan Lefevre	 	 
	 

	 	Title:
	 	Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lana Gifas	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Lana Gifas	 	 
	 

	 	Title:
	 	Vice President	 	 

15

 

	 	 	 	 	 	 	 
	 	 	KEYBANK, NATIONAL ASSOCIATION,
	 	 	as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas Rajan	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Thomas Rajan	 	 
	 

	 	Title:
	 	Vice President	 	 

16

 

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

	 	By:
	 	/s/ Mari Salazar	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Mari Salazar	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 

17

 

	 	 	 	 	 	 	 
	 	 	NATEXIS BANQUES POPULAIRES,
	 	 	as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Louis P. Laville, III	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Louis P. Laville, III	 	 
	 

	 	Title:
	 	Vice President / Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Daniel Payer	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Daniel Payer	 	 
	 

	 	Title:
	 	Vice President	 	 

18

 

	 	 	 	 	 	 	 
	 	 	STERLING BANK, as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeff A. Forbis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Jeff A. Forbis	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

19

 

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

	 	By:
	 	/s/ Andrew J. Watson	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Andrew J. Watson	 	 
	 

	 	Title:
	 	Vice President	 	 

20

 

CONSENT OF GUARANTORS

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

	 	 	 	 	 	 	 
	 	 	ScissorTail Energy, LLC	 	 
	 	 	Copano Energy/Rocky Mountains and Mid-Continent, L.L.C.	 	 
	 	 	Copano Processing GP, L.L.C.	 	 
	 	 	Copano NGL Services GP, L.L.C.	 	 
	 	 	Copano Field Services GP L.L.C.	 	 
	 	 	Copano Pipelines GP, L.L.C.	 	 
	 	 	Copano Pipelines, (Texas) GP, L.L.C.	 	 
	 	 	Copano Energy Services GP, L.L.C.	 	 
	 	 	Copano Energy Services (Texas) GP, L.L.C.	 	 
	 	 	Copano Field Services/Central Gulf Coast GP, L.L.C.	 	 
	 	 	Copano/Webb-Duval Pipeline GP, L.L.C.	 	 
	 	 	CPNO Services GP, L.L.C.	 	 
	 	 	Copano Energy Finance Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Matthew J. Assiff	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Matthew J. Assiff	 	 
	 

	 	 	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	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	 	 

21

 

	 	 	 	 	 	 	 
	 	 	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	 	 
	 
	 	 	 	 	 	 
	 	 	Copano Field Services/Agua Dulce, L.P.	 	 
	 	 	Copano Field Services/Copano Bay, L.P.	 	 
	 	 	Copano Field Services/Karnes, L.P.	 	 
	 	 	Copano Field Services/Live Oak, L.P.	 	 
	 	 	Copano Field Services/South Texas, L.P.	 	 
	 	 	Copano Field Services/Upper Gulf Coast, L.P.	 	 
	 	 	By: Copano Field Services GP L.L.C., General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/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	 	 
	 
	 	 	 	 	 	 
	 	 	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	 	 

22

 

	 	 	 	 	 	 	 
	 	 	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	 	 
	 
	 	 	 	 	 	 
	 	 	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	 	 

23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]