EXHIBIT 10.1

 

EXECUTION VERSION

 

 

 

 

CONTRIBUTION, ASSIGNMENT AND ASSUMPTION AGREEMENT

 

NISKA GAS STORAGE PARTNERS LLC

 

Dated as of May 7, 2010

 

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I

DEFINITIONS

 

Section 1.1

Definitions

5

 

 

 

ARTICLE II

CANADIAN RESTRUCTURING

 

 

 

Section 2.1

Purchase of Niska II Interest

9

Section 2.2

Assumption of Note A-1

9

Section 2.3

Cancellation of Note B

9

Section 2.4

Contribution of Note A-1 and Note A-2 to Niska II Holdings

9

Section 2.5

Distribution of the Gas Storage Canada GP Interests

9

 

 

 

ARTICLE III

LEVERAGED DISTRIBUTION

 

 

 

 

Section 3.1

Canadian Distribution

10

Section 3.2

US Distribution

10

 

 

 

ARTICLE IV

CONTRIBUTIONS AND DISTRIBUTIONS ON EFFECTIVE DATE

 

 

 

 

Section 4.1

Execution of LLC Agreement

10

Section 4.2

US Asset Contribution

10

Section 4.3

Conveyance of Company Interests to DutchCo

10

Section 4.4

Transfer of Niska II Interests to DutchCo

11

Section 4.5

Conveyance of Equity to Holdco

11

Section 4.6

Conveyance of Equity to GP ULC

11

Section 4.7

Conveyance of Equity to GP Canada LLC

11

Section 4.8

Contribution of Equity to Niska II Holdings

11

Section 4.9

Conveyance of Equity to Gas Storage Canada GP

11

Section 4.10

Distribution of Equity to Niska II Holdings

11

Section 4.11

Contribution of Niska II Interest to Holdco

11

Section 4.12

Contribution of Niska II Indebtedness to Niska II

12

Section 4.13

US Contribution and Canadian Contribution to Sponsor Holdings

12

Section 4.14

Contribution of Manager Contribution Interest to the Manager

12

Section 4.15

Distribution of Equity in Sponsor Holdings to Niska Canada

12

Section 4.16

Execution of Registration Rights Agreement

12

Section 4.17

Underwriters’ Cash Contribution

12

 

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ARTICLE V

DEFERRED ISSUANCE AND DISTRIBUTION

 

 

 

Section 5.1

Deferred Issuance and Distribution

13

 

 

 

ARTICLE VI

MISCELLANEOUS PROVISIONS

 

 

 

Section 6.1

Effective Time

13

Section 6.2

Further Assurances

13

Section 6.3

Headings; References, Interpretation

13

Section 6.4

Successors and Assigns

14

Section 6.5

No Third Party Rights

14

Section 6.6

Counterparts

14

Section 6.7

Applicable Law; Forum, Venue and Jurisdiction

14

Section 6.8

Severability

15

Section 6.9

Amendment or Modification

15

Section 6.10

Integration

15

Section 6.11

Deed; Bill of Sale; Assignment

15

 

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CONTRIBUTION, ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This CONTRIBUTION, ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”), dated
as of May 7, 2010 is made by and among Niska GS Holdings US, L.P., a Delaware
limited partnership (“Niska US”), Niska Gas Storage Partners LLC, a Delaware
limited liability company (the “Company”), Niska Partners Coöperatief U.A., a
coöperatief formed in the Netherlands (“DutchCo”), Niska II Holdings, L.P., a
Delaware limited partnership (“Niska II Holdings”), Niska HoldCo ULC, an Alberta
unlimited liability corporation (“Holdco”), Niska GP ULC, an Alberta unlimited
liability corporation (“GP ULC”), Niska II GP LLC, a Delaware limited liability
company (“GP Canada LLC”), Niska Gas Storage Canada GP, LLC, a Delaware limited
liability company (“Gas Storage Canada GP”), Niska GS Holdings II, L.P., a
Delaware limited partnership (“Niska II”), Niska GS Holdings I, L.P, a Delaware
limited partnership (“Niska I”), Niska Sponsor Holdings Coöperatief U.A., a
coöperatief formed in the Netherlands (“Sponsor Holdings”), Niska GS Holdings
Canada, L.P., a Delaware limited partnership (“Niska Canada”),  Niska Gas
Storage Management LLC, a Delaware limited liability company (the “Manager”),
AECO Gas Storage Partnership, an Alberta general partnership (“AECO”), Niska Gas
Storage US, LLC, a Delaware limited liability company (“Gas Storage US”), Niska
Gas Storage Canada ULC, an Alberta unlimited liability corporation (“Gas Storage
Canada”), and Niska Gas Storage Canada, L.P., a Delaware limited partnership
(“NGSC”).  The above-named entities are sometimes referred to in this Agreement
each as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, the Manager has formed the Company pursuant to the Delaware Limited
Liability Company Act for the purposes set forth in the Operating Agreement of
the Company, dated as of January 26, 2010 (the “Original LLC Agreement”);

 

WHEREAS, each of the following actions has been taken prior to the date hereof:

 

1.             Carlyle Riverstone Energy Partners III, L.P., a Delaware limited
partnership (“GP3”) has formed the Manager to which it has contributed US $1,000
in exchange for all of the membership interests in the Manager;

 

2.             The Manager has formed the Company to which it has contributed US
$1,000 in exchange for all of the membership interests in the Company;

 

3.             GP3 and Thomas Walker have collectively formed Niska US and Niska
Canada;

 

4.             (i) Niska US has formed Niska US GP LLC, a Delaware limited
liability company, and (ii)  Niska Canada has formed GP Canada LLC;

 

5.             Thomas Walker has withdrawn from Niska US, and the limited
partners of Niska I have received all of the limited partner interests in Niska
US in exchange for the contribution of their limited partner interests in Niska
I to Niska US;

 

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6.             GP3 has received a non-economic (0%) general partner interest in
Niska US in exchange for the contribution of the general partner interest of
Niska I to Niska US GP LLC, a Delaware limited liability company (“GP US LLC”);

 

7.             Thomas Walker has withdrawn from Niska Canada, and the limited
partners of Niska II have received all of the limited partner interests in Niska
Canada in exchange for the contribution of their limited partner interests in
Niska II to Niska Canada;

 

8.             GP3 has received a non-economic (0%) general partner interest in
Niska Canada in exchange for the contribution of the general partner interest in
Niska II to GP Canada LLC;

 

9.             Niska US has formed a Delaware limited liability company named
Niska GS Venture Holdings LLC (“Upper Co-op Holdings”);

 

10.           Niska US and Upper Co-op Holdings have formed Sponsor Holdings to
which they have contributed US$990 and US$10, respectively, in exchange for 99%
and 1%, respectively, of the membership interests in Sponsor Holdings;

 

11.           The Company has formed Niska Gas Storage Operations LLC, a
Delaware limited liability company (“Lower Co-op Holdings”);

 

12.           The Company and Lower Co-Op Holdings have formed DutchCo to which
they have contributed US$990 and US$10, respectively, in exchange for 99% and
1%, respectively, of the membership interests in DutchCo;

 

13.           DutchCo has formed Holdco to which it has contributed CN$100 in
exchange for debt and equity in(1) Holdco;

 

14.           Holdco has formed GP ULC to which it has contributed CN$100 in
exchange for all of the equity in GP ULC;

 

15.           Niska Canada and GP Canada LLC have formed Niska II Holdings to
which they have contributed US$999.99 and US$0.01, respectively, in exchange for
a 99.999% limited partner interest in Niska II Holdings and a 0.001% general
partner interest in Niska II Holdings, respectively; and

 

16.           Sponsor Holdings has paid GP3 US $1,000 in exchange for all of the
membership interests in the Manager.

 

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(1)       To be a ratio of 2:1.

 

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WHEREAS, pursuant hereto, each of the following will occur at the times
specified hereinafter:

 

1.             Niska Canada will transfer the 99.999% limited partner interest
in Niska II to Niska II Holdings in exchange for a US$540,000,000 note with an
initial interest rate of 11.219% (“Note A-1”) and a note in an amount equal to
the difference between the Series A Principal Amount and US$540,000,000 with an
initial interest rate of 11.219% (“Note A-2”);

 

2.             Niska II will assume Note A-1 and Note A-2, and the obligations
of Niska II Holdings thereunder, in exchange for a note in an amount equal to
the Series A Principal Amount with an initial interest rate of 11.219% (“Note
B”);

 

3.             Niska II will distribute Note B to Niska II Holdings as a return
of capital and Note B will be cancelled;

 

4.             Niska Canada will contribute Note A-1 and Note A-2 to Niska II
Holdings as a capital contribution and Niska II will distribute its limited
liability company interests in Gas Storage Canada GP to Niska II Holdings;

 

5.             AECO will loan Gas Storage Canada an amount equal to 65% of the
Leveraged Distribution; Gas Storage Canada will loan NGSC an amount equal to 65%
of the Leveraged Distribution; NGSC will loan Niska II an amount equal to 65% of
the Leveraged Distribution;  Niska II will use the loan proceeds to repay a
portion of the principal on Note A-2 in an amount equal to 65% of the Leveraged
Distribution; Niska II Holdings will distribute an amount equal to 65% of the
Leveraged Distribution to Niska Canada; Niska Canada will distribute an amount
equal to 65% of the Leveraged Distribution to its limited partners in accordance
with the terms of the Second Amended & Restated Limited Partnership Agreement of
Niska Canada, dated March 4, 2010 (the “Niska Canada Agreement”);

 

6.             Gas Storage US will loan an amount equal to 35% of the Leveraged
Distribution to Niska I;

 

7.             Niska I will make a distribution in an amount equal to 35% of the
Leveraged Distribution to Niska US; Niska US will distribute an amount equal to
35% of the Leveraged Distribution to its limited partners in accordance with the
terms of the First Amended & Restated Limited Partnership Agreement of Niska US,
dated March 4, 2010 (the “Niska US Agreement”);

 

8.             Niska US will transfer its membership interests in Niska I and GP
US LLC to the Company in exchange for (a) 35% of the Sponsor Common Units,
(b) 35% of the Sponsor Subordinated Units, (c) 35% of the Manager Contribution
Interest, (d) 35% of the IDRs, and (e) the right to receive 35% of the Deferred
Issuance and Distribution (collectively, the “US Consideration”);

 

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9.             The Company will transfer (a) 65% of the Sponsor Common Units,
(b) 65% of the Sponsor Subordinated Units, (c) 65% of the Manager Contribution
Interest, (d) 65% of the IDRs and (e) the right to receive 65% of the Deferred
Issuance and Distribution to DutchCo (collectively, the “Canadian
Consideration”) in exchange for a US$540,000,000 note with an initial interest
rate of 9.9222% (“Note 1”), a note in an amount equal to 85% of the difference
between the value of the Canadian Consideration and US$540,000,000 with an
initial interest rate of 11.0441% (“Note 2”) and equity interests of DutchCo
with a value equal to 15% of the difference between the value of the Canadian
Consideration and US$540,000,000;

 

10.           Niska II Holdings will transfer Note A-1 and Note A-2, each owed
to it by Niska II, and the 99.999% limited partner interest in Niska II to
DutchCo in exchange for all of the Canadian Consideration other than 10 Common
Units and 10 Subordinated Units (the “Residual Units”);

 

11.           DutchCo will convey the Residual Units to Holdco as a capital
contribution and Holdco will add the fair market value of the Residual Units to
the stated capital account of Holdco’s issued and outstanding shares;

 

12.           Holdco will convey the Residual Units to GP ULC as a capital
contribution and GP ULC will add the fair market value of the Residual Units to
the stated capital account of GP ULC’s issued and outstanding shares;

 

13.           GP ULC will convey 5 Common Units and 5 Subordinated Units (a
portion of the Residual Units) to GP Canada LLC in exchange for GP Canada LLC’s
0.001% general partner interest in Niska II;

 

14.           GP Canada LLC will contribute the portion of the Residual Units it
received to Niska II Holdings;

 

15.           GP ULC will convey 5 Common Units and 5 Subordinated Units (a
portion of the Residual Units) to Gas Storage Canada GP in exchange for Gas
Storage Canada GP’s 0.001% general partner interest in NGSC;

 

16.           Gas Storage Canada GP will distribute the portion of the Residual
Units it received to Niska II Holdings;

 

17.           DutchCo will sell Note A-1 to Holdco in exchange for a
US$540,000,000 note with an initial interest rate of 11.219% (“Note C”) and will
contribute the limited partner interests in Niska II and Note A-2 to Holdco in
exchange for Holdco equity with a value equal to the difference between the sum
of the Series A Principal Amount plus the value of the 99.999% limited partner
interest in Niska II and the sum of US$540,000,000 plus 65% of the Leveraged
Distribution;

 

18.           Holdco will contribute Note A-1 and Note A-2 to Niska II in
exchange for additional limited partner interests in Niska II;

 

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19.           Niska US and Niska II Holdings will collectively contribute:
(a) the Sponsor Common Units, (b) the Sponsor Subordinated Units, (c) 100% of
the IDRs, (d) 100% of the right to receive the Deferred Issuance and
Distribution and (e) the 2.0% membership interest, to Sponsor Holdings in
exchange for 100%(2) of the equity of Sponsor Holdings;

 

20.           Niska II Holdings will distribute its equity interest in Sponsor
Holdings to Niska Canada as a return of capital;

 

21.           Sponsor Holdings will contribute the Manager Contribution Interest
to the Manager; and

 

22.           In connection with the Offering, the public, through the
underwriters, will contribute an amount agreed upon by the Underwriters and the
Company pursuant to the Underwriting Agreement, less the Underwriters’ Spread in
exchange for the Firm Units.

 

WHEREAS, the members of Sponsor Holdings have unanimously consented to the
transactions contemplated by this Agreement;

 

WHEREAS, the members of DutchCo have unanimously consented to the transactions
contemplated by this Agreement;

 

WHEREAS, stockholders, members or partners of the Parties have taken all
corporate, partnership and limited liability company action, as the case may be,
required to be taken to approve the transactions contemplated by this Agreement;
and

 

WHEREAS, the Company may adjust upward or downward the number of Firm Units to
be offered to the public through the Underwriters.

 

NOW THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1             Definitions.  The following defined terms will have the
meanings given below:

 

“AECO” has the meaning set forth in the opening paragraph of this Agreement.

 

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(2)       The prior capital contribution of US$10.00 by Upper Co-op Holdings, a
wholly-owned subsidiary of Niska US to Sponsor Holdings and the prior
contribution of US$1000.00 by Niska Canada (includes a $10.00 contribution by
Niska Sundance Holdings LLC, a wholly-owned subsidiary of Niska Canada) are each
immaterial for the purposes hereof.

 

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“Agreement” means this Contribution, Assignment and Assumption Agreement.

 

“Canadian Consideration” has the meaning set forth in the Recitals to this
Agreement.

 

“Commission” means the Securities and Exchange Commission.

 

“Common Unit” means a common unit representing a limited liability company
interest in the Company having the rights set forth in the LLC Agreement.

 

“Company” has the meaning set forth in the opening paragraph of this Agreement.

 

“Deferred Issuance and Distribution” has the meaning set forth in the LLC
Agreement.

 

“DutchCo” has the meaning set forth in the opening paragraph of this Agreement.

 

“Effective Time” means 8:00 a.m. prevailing Eastern Time on the date of the
closing of the Offering.

 

“Firm Units” means the Common Units to be sold to the Underwriters pursuant to
the terms of the Underwriting Agreement, but does not include any Option Units.

 

“Gas Storage Canada” has the meaning set forth in the opening paragraph of this
Agreement.

 

“Gas Storage Canada GP” has the meaning set forth in the opening paragraph of
this Agreement.

 

“Gas Storage US” has the meaning set forth in the opening paragraph of this
Agreement.

 

“GP3” has the meaning set forth in the Recitals of this Agreement.

 

“GP Canada LLC” has the meaning set forth in the opening paragraph of this
Agreement.

 

“GP ULC” has the meaning set forth in the opening paragraph of this Agreement.

 

“GP US LLC” has the meaning set forth in the Recitals of the Agreement.

 

“Holdco” has the meaning set forth in the opening paragraph of this Agreement.

 

“IDRs” means the incentive distribution rights of the Company having the rights
set forth in the LLC Agreement.

 

“Leveraged Distribution” means the borrowing by AECO and Gas Storage US and the
distribution, directly or indirectly (and including by means of inter-company
loans), of an amount equal to the proceeds of the Offering, less the
Underwriters’ Spread on the Firm Units, Offering Expenses, and Retained Cash.

 

“LLC Agreement” means the First Amended and Restated Operating Agreement of the
Company, substantially in the form attached as Appendix A to the Registration
Statement.

 

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“Lower Co-op Holdings” has the meaning set forth in the Recitals of this
Agreement.

 

“Manager” has the meaning set forth in the opening paragraph of this Agreement.

 

“Manager Contribution Interest” means a membership interest in the Company that,
when contributed to the Manager pursuant to Section 4.14 will be the Managing
Member Interest (as defined in, and having the rights set forth in, the LLC
Agreement), which Managing Member Interest will result in the Manager having a
Percentage Interest of 2% after giving effect to any exercise of the
Over-Allotment Option and the Deferred Issuance and Distribution.

 

“NGSC” has the meaning set forth in the opening paragraph of this Agreement.

 

“Niska Canada” has the meaning set forth in the opening paragraph of this
Agreement.

 

“Niska Canada Agreement” has the meaning set forth in the Recitals of this
Agreement.

 

“Niska I” has the meaning set forth in the opening paragraph of this Agreement.

 

“Niska II” has the meaning set forth in the opening paragraph of this Agreement.

 

“Niska II Holdings” has the meaning set forth in the opening paragraph of this
Agreement.

 

“Niska US” has the meaning set forth in the opening paragraph of this Agreement.

 

“Niska US Agreement” has the meaning set forth in the Recitals of this
Agreement.

 

“Note 1” has the meaning set forth in the Recitals of this Agreement.

 

“Note 2” has the meaning set forth in the Recitals of this Agreement.

 

“Note A-1” has the meaning set forth in the Recitals of this Agreement.

 

“Note A-2” has the meaning set forth in the Recitals of this Agreement.

 

“Note B” has the meaning set forth in the Recitals of this Agreement.

 

“Note C” has the meaning set forth in the Recitals of this Agreement.

 

“Offering” means the initial public offering of the Company.

 

“Offering Expenses” shall mean the retention by the Company of $4.0 million to
pay estimated expenses incurred by the Company in connection with the Offering.

 

“Option Units” means the Common Units that the Company will agree to issue upon
exercise of the Over-Allotment Option.

 

“Original LLC Agreement” has the meaning set forth in the Recitals of this
Agreement.

 

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“Over-Allotment Option” means a number of Common Units equal to 15% of the Firm
Units, which the Company will agree to sell to the Underwriters, at their
option, to cover over-allotments in connection with the Offering.

 

“Party” or “Parties” has the meaning set forth in the opening paragraph of this
Agreement.

 

“Registration Statement” means the Registration Statement on Form S-1 filed with
the Commission (Registration No. 333-165007), as amended.

 

“Residual Units” has the meaning set forth in the Recitals of this Agreement.

 

“Retained Cash” means $60.0 million of proceeds of the Offering to be retained
by the Company for general company purposes.

 

“Series A Principal Amount” means an amount equal to the difference between the
sum of 65% of the Leveraged Distribution plus the value of the Canadian
Consideration(3) and the sum of the value of the 99.999% limited partner
interest in Niska II(4) plus the value of the Residual Units.

 

“Sponsor Common Units” means 13,679,305 Common Units, provided that if the
Company increases the number of Firm Units, the Sponsor Common Units will be
decreased by a number of Common Units equal to 115% (to accommodate the
corresponding increase in the number of Option Units and Deferred Issuance and
Distribution) of such increase and if the Company decreases the number of Common
Units offered to the public through the Underwriters, the Sponsor Common Units
will be increased by a number of Common Units equal to 115% of such decrease.

 

“Sponsor Holdings” has the meaning set forth in the opening paragraph of this
Agreement.

 

“Sponsor Subordinated Units” means 33,804,745 Subordinated Units.

 

“Subordinated Unit” means a subordinated unit representing a member interest in
the Company having the rights set forth in the LLC Agreement.

 

“Underwriters” the underwriting syndicate listed in the Underwriting Agreement.

 

“Underwriting Agreement” means a firm commitment underwriting agreement to be
entered into between the Company and the underwriters named in the Registration
Statement.

 

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(3)       In this Agreement, the value of each Common Unit and Subordinated Unit
is equal to the price to public per Common Unit in this Offering as set forth in
on Schedule II(A) to the Underwriting Agreement; and the value of the Manager
Contribution Interests is equal to 2/98ths of the total value of the Firm Units,
Option Units and Subordinated Units.

 

(4)       The value of the 99.999% limited partner interest in Niska II is
US$100.

 

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“Underwriters’ Spread” shall mean the total amount of the Underwriters’ discount
and structuring fee.

 

“Upper Co-op Holdings” has the meaning set forth in the Recitals of this
Agreement.

 

“US Consideration” has the meaning set forth in the Recitals of this Agreement.

 

Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the LLC Agreement.

 

ARTICLE II

CANADIAN RESTRUCTURING

 

After the execution of the Underwriting Agreement, but prior to the Effective
Time, the following transactions, loans, distributions and contributions shall
be completed in the order set forth below.

 

Section 2.1             Purchase of Niska II Interest.  Niska Canada hereby
grants, contributes, bargains, conveys, assigns, transfers, sets over and
delivers the 99.999% limited partner interest in Niska II to Niska II Holdings,
its successors and assigns, for its and their own use forever, and Niska II
Holdings hereby accepts such grant, contribution, bargain, conveyance,
assignment, transfer, set over and delivery and in exchange Niska II Holdings
hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and
delivers Note A-1 and Note A-2 to Niska Canada, its successors and assigns and
Niska Canada hereby accepts such grant, contribution, bargain, conveyance,
assignment, transfer, set over and delivery of Note A-2 and Note A-2.

 

Section 2.2             Assumption of Note A-1.  Niska II Holdings hereby
grants, contributes, bargains, conveys, assigns, transfers, sets over and
delivers the Note B to Niska II, its successors and assigns, and Niska II hereby
accepts such grant, contribution, bargain, conveyance, assignment, transfer, set
over and delivery and in exchange Niska II hereby assumes Note A-1 and Note A-2
and the promises and obligations of Niska II Holdings thereunder.

 

Section 2.3             Cancellation of Note B.  Niska II hereby distributes
Note B to Niska II Holdings as a return of partnership capital, Niska II
Holdings hereby accepts Note B and Note B is hereby cancelled.

 

Section 2.4             Contribution of Note A-1 and Note A-2 to Niska II
Holdings.  Niska Canada hereby grants, contributes, bargains, conveys, assigns,
transfers, sets over and delivers Note A-1 and Note A-2 to Niska II Holdings,
and Niska II Holdings hereby accepts such grant, contribution, bargain,
conveyance, assignment, transfer, set over and delivery as a capital
contribution and will credit the partnership capital account in respect of the
aforementioned contribution.

 

Section 2.5             Distribution of the Gas Storage Canada GP Interests. 
Niska II hereby distributes all of the limited liability company interests in
Gas Storage Canada GP to Niska II Holdings and Niska II Holdings hereby accepts
the distribution of the limited liability company interests in Gas Storage
Canada GP.

 

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ARTICLE III

LEVERAGED DISTRIBUTION

 

After the consummation of the transactions, loans, distributions and
contributions described in Article II, but prior to the Effective Time, the
following borrowings, loans and distributions shall occur:

 

Section 3.1             Canadian Distribution.  AECO will borrow an amount equal
to 65% of the Leveraged Distribution under its revolving credit facility and
loan such funds to Gas Storage Canada; Gas Storage Canada will loan such funds
to NGSC; NGSC will loan such funds to Niska II; Niska II will use such funds to
repay a portion of the principal on Note A-2 owed to Niska II Holdings; Niska II
Holdings will distribute such funds to Niska Canada; and Niska Canada will
distribute such funds to its limited partners in accordance with the terms of
the Niska Canada Agreement.

 

Section 3.2             US Distribution.  Gas Storage US will borrow an amount
equal to 35% of the Leveraged Distribution under its revolving credit facility
and loan such amount to Niska I; Niska I will distribute such funds to Niska US;
and Niska US and Niska US will distribute such funds to its limited partners in
accordance with the terms of the Niska US Agreement.

 

ARTICLE IV

CONTRIBUTIONS AND DISTRIBUTIONS ON EFFECTIVE DATE

 

The following shall be completed immediately following the Effective Time in the
order set forth herein.

 

Section 4.1             Execution of LLC Agreement.  The Manager shall amend and
restate the Original LLC Agreement by executing the LLC Agreement in
substantially the form included as Appendix A to the Registration Statement,
with such changes as are necessary to reflect any adjustment to the number of
Firm Units and Option Units as the Company may agree with the Underwriters and
such other changes as the Company, Niska Canada and Niska US may agree.

 

Section 4.2             US Asset Contribution.  Niska US hereby grants,
contributes, bargains, conveys, assigns, transfers, sets over and delivers to
the Company, its successors and assigns, for its and their own use forever, and
the Company hereby accepts such grant, contribution, bargain, conveyance,
assignment, transfer, set over and delivery of all of its interests in Niska I
and GP US LLC in exchange for the US Consideration.

 

Section 4.3             Conveyance of Company Interests to DutchCo.  The Company
hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and
delivers the Canadian Consideration to DutchCo, its successors and assigns, for
its and their own use forever, and DutchCo hereby accepts such grant,
contribution, bargain, conveyance, assignment, transfer, set over and delivery
in exchange for Note 1, Note 2 and equity interests of DutchCo with a value
equal to 15% of the difference between the value of the Canadian Consideration
and US$540,000,000.

 

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Section 4.4             Transfer of Niska II Interests to DutchCo.  Niska II
Holdings hereby grants, contributes, bargains, conveys, assigns, transfers, sets
over and delivers Note A-1 and Note A-2 and the 99.999% limited partner interest
in Niska II to DutchCo, it successors and assigns, for its and their own use
forever, and DutchCo hereby accepts such grant, contribution, bargain,
conveyance, assignment, transfer, set over and delivery in exchange for all of
the Canadian Consideration other than the Residual Units.

 

Section 4.5             Conveyance of Equity to Holdco.  DutchCo hereby grants,
contributes, bargains, conveys, assigns, transfers, sets over and delivers the
Residual Units to Holdco its successors and assigns, for its and their own use
forever, and Holdco hereby accepts such grant, contribution, bargain,
conveyance, assignment, transfer, set over and delivery as a capital
contribution, and Holdco will add the fair market value of the Residual Units to
the stated capital account of Holdco’s issued and outstanding shares.

 

Section 4.6             Conveyance of Equity to GP ULC.  Holdco hereby grants,
contributes, bargains, conveys, assigns, transfers, sets over and delivers the
Residual Units to GP ULC its successors and assigns, for its and their own use
forever, and GP ULC hereby accepts such grant, contribution, bargain,
conveyance, assignment, transfer, set over and delivery as a capital
contribution, and GP ULC will add the fair market value of the Residual Units to
the stated capital account of GP ULC’s issued and outstanding shares.

 

Section 4.7             Conveyance of Equity to GP Canada LLC.  GP ULC hereby
grants, contributes, bargains, conveys, assigns, transfers, sets over and
delivers 5 Common Units and 5 Subordinated Units to GP Canada LLC its successors
and assigns, for its and their own use forever, and GP Canada LLC hereby accepts
such grant, contribution, bargain, conveyance, assignment, transfer, set over
and delivery in exchange for GP Canada LLC’s 0.001% general partner interest in
Niska II.

 

Section 4.8             Contribution of Equity to Niska II Holdings.  GP Canada
LLC hereby grants, contributes, bargains, conveys, assigns, transfers, sets over
and delivers 5 Common Units and 5 Subordinated Units to Niska II Holdings, its
successors and assigns, for its and their own use forever, and Niska II Holdings
hereby accepts such grant, contribution, bargain, conveyance, assignment,
transfer, set over and delivery.

 

Section 4.9             Conveyance of Equity to Gas Storage Canada GP.  GP ULC
hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and
delivers 5 Common Units and 5 Subordinated Units to Gas Storage Canada GP, its
successors and assigns, for its and their own use forever in exchange for Gas
Storage Canada GP’s 0.001% general partner interest in NGSC.

 

Section 4.10           Distribution of Equity to Niska II Holdings.  Gas Storage
Canada GP hereby grants, contributes, bargains, conveys, assigns, transfers,
sets over and delivers 5 Common Units and 5 Subordinated Units to Niska II
Holdings, its successors and assigns, for its and their own use forever.

 

Section 4.11           Contribution of Niska II Interest to Holdco.  DutchCo
hereby sells, grants, bargains, conveys, assigns, transfers, sets over and
delivers Note A-1 to Holdco, its successors

 

11

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and assigns, for its and their own use forever, and Holdco hereby accepts such
sale, grant, bargain, conveyance, assignment, transfer, set over and delivery in
exchange for Note C, and DutchCo hereby contributes, grants, bargains, conveys,
assigns, transfers, sets over and delivers Note A-2 and the 99.999% limited
partner interest in Niska II to Holdco in exchange for Holdco equity with a
value equal to the difference between the sum of the Series A Principal Amount
plus the value of the 99.999% limited partner interest in Niska II and the sum
of US$540,000,000 plus 65% of the Leveraged Distribution.

 

Section 4.12           Contribution of Niska II Indebtedness to Niska II. 
Holdco hereby grants, contributes, bargains, conveys, assigns, transfers, sets
over and delivers the Note A-1 and Note A-2 to Niska II and Niska II hereby
accepts such grant, contribution, bargain, conveyance, assignment, transfer, set
over and delivery of such note and issues to Holdco limited partner interests in
Niska II in exchange for such note; and Holdco and Niska II acknowledge and
confirm that (i) Niska II will credit the partnership capital account in respect
of the aforementioned contribution by Holdco in an amount equal to the
outstanding principal amount Note A-1 and Note A-2 owed by Niska II to Holdco
and (ii) the fair market value of the limited partnership interests so issued to
Holdco equals the outstanding principal amount of Note A-1 and Note A-2.

 

Section 4.13           US Contribution and Canadian Contribution to Sponsor
Holdings.  Niska US hereby grants, contributes, bargains, conveys, assigns,
transfers, sets over and delivers the US Consideration to Sponsor Holdings, its
successors and assigns, for its and their own use forever in exchange for 35% of
the equity interests in Sponsor Holdings, and Niska II Holdings hereby grants,
contributes, bargains, conveys, assigns, transfers, sets over and delivers the
Canadian Consideration to Sponsor Holdings, its successors and assigns, for its
and their own use forever in exchange for 65% of the equity interests in Sponsor
Holdings.(5)

 

Section 4.14           Contribution of Manager Contribution Interest to the
Manager.  Sponsor Holdings hereby grants, contributes, bargains, conveys,
assigns, transfers, sets over and delivers the Manager Contribution Interest to
the Manager, its successors and assigns, for its and their own use forever.

 

Section 4.15           Distribution of Equity in Sponsor Holdings to Niska
Canada.  Niska II Holdings hereby distributes its 65% equity interest in Sponsor
Holdings to Niska Canada as a return of Niska Canada’s capital.

 

Section 4.16           Execution of Registration Rights Agreement.  Sponsor
Holdings and the Company shall execute the registration rights agreement, in
substantially the form attached as Exhibit 10.7 to the Registration Statement,
pursuant to which the Company shall agree to register with the Commission
certain equity interests in the Company in accordance with the terms provided
therein.

 

Section 4.17           Underwriters’ Cash Contribution.  The Parties acknowledge
that the Company is undertaking the Offering, and the Underwriters will,
pursuant to the Underwriting Agreement, agree to make a capital contribution to
the Company of an amount determined

 

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(5)       See footnote 2.

 

12

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pursuant to the terms of the Underwriting Agreement in exchange for the issuance
by the Partnership to the Underwriters of the Firm Units.

 

ARTICLE V

DEFERRED ISSUANCE AND DISTRIBUTION

 

Section 5.1             Deferred Issuance and Distribution.  Upon the earlier to
occur of the expiration of the Over-Allotment Option period or the exercise in
full of the Over-Allotment Option, the Company shall issue to Sponsor Holdings a
number of additional Common Units that is equal to the excess, if any, of
(x) the total number of Option Units over (y) the aggregate number of Common
Units, if any, actually purchased by and issued to the Underwriters pursuant to
the exercise(s) of the Over-Allotment Option.  Upon each exercise of the
Over-Allotment Option, the Company shall distribute to Sponsor Holdings an
amount of cash equal to the net proceeds (after underwriting discounts) of each
such exercise.

 

ARTICLE VI

MISCELLANEOUS PROVISIONS

 

Section 6.1             Effective Time.  Notwithstanding anything contained in
this Agreement to the contrary, the provisions of Article III, Article IV,
Article V and Section 6.2 shall not be binding or have any effect until the
Company executes the Underwriting Agreement, at which time all such provisions
shall be effective and operative without further action by any Party hereto.

 

Section 6.2             Further Assurances.  From time to time, and without any
further consideration, the Parties agree to execute, acknowledge and deliver all
such additional deeds, assignment, bills of sale, conveyances, instruments,
notices, releases, acquittances and other documents, and to do all such other
acts and things, all in accordance with applicable law, as may be necessary or
appropriate (a) more fully to assure that the applicable Parties own all of the
properties, rights, titles, interests, estates, remedies, powers and privileges
granted by this Agreement, or which are intended to be so granted, (b) more full
and effectively to vest in the applicable Parties and their respective
successors and assigns beneficial and record title to the interests contributed
and assigned by this Agreement or intended to be so and (c) more fully and
effectively to carry out the purposes and intend of this Agreement.

 

Section 6.3             Headings; References, Interpretation.  All Article and
Section headings in this Agreement are for convenience only and shall not be
deemed to control or affect the meaning or construction of any of the provisions
hereof. The words “hereof,” “herein” and “hereunder” and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole,
including, without limitation, all Schedules and Exhibits attached hereto, and
not to any particular provision of this Agreement. All references herein to
Articles, Sections, Schedules and Exhibits shall, unless the context requires a
different construction, be deemed to be references to the Articles and Sections
of this Agreement and the Schedules and Exhibits attached hereto, and all such
Schedules and Exhibits attached hereto are hereby incorporated herein and made a
part hereof for all purposes. All personal pronouns used in this Agreement,

 

13

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whether used in the masculine, feminine or neuter gender, shall include all
other genders, and the singular shall include the plural and vice versa. The use
herein of the word “including” following any general statement, term or matter
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not non-limiting language (such as “without limitation,”
“but not limited to” or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that could
reasonably fall within the broadest possible scope of such general statement,
term or matter.

 

Section 6.4             Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns.

 

Section 6.5             No Third Party Rights.  The provisions of this Agreement
are intended to bind the Parties as to each other and are not intended to and do
not create rights in any other person or confer upon any other person any
benefits, rights or remedies, and no person is or is intended to be a third
party beneficiary of any of the provisions of this Agreement.

 

Section 6.6             Counterparts.  This Agreement may be executed in any
number of counterparts with the same effect as if all signatory Parties had
signed the same document. All counterparts shall be construed together and shall
constitute one and the same instrument.  The delivery of an executed counterpart
copy of this Agreement by facsimile or electronic transmission in PDF format
shall be deemed to be the equivalent of delivery of the originally executed copy
thereof.

 

Section 6.7             Applicable Law; Forum, Venue and Jurisdiction.

 

(A)           THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAW.

 

(B)           EACH OF THE PARTIES:

 

(I)            IRREVOCABLY AGREES THAT ANY CLAIMS, SUITS, ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT SHALL BE EXCLUSIVELY
BROUGHT IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE;

 

(II)           IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURT OF
CHANCERY OF THE STATE OF DELAWARE IN CONNECTION WITH ANY SUCH CLAIM, SUIT,
ACTION OR PROCEEDING;

 

(III)          AGREES NOT TO, AND WAIVES ANY RIGHT TO, ASSERT IN ANY SUCH CLAIM,
SUIT, ACTION OR PROCEEDING THAT (A) IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF THE COURT OF CHANCERY OF THE STATE OF DELAWARE OR OF ANY OTHER
COURT TO WHICH PROCEEDINGS IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE MAY
BE APPEALED, (B) SUCH CLAIM, SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, OR (C) THE VENUE OF SUCH CLAIM, SUIT, ACTION OR PROCEEDING
IS IMPROPER;

 

(IV)          EXPRESSLY WAIVES ANY REQUIREMENT FOR THE POSTING OF A BOND BY A
PARTY BRINGING SUCH CLAIM, SUIT, ACTION OR PROCEEDING; AND

 

14

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(V)           CONSENTS TO PROCESS BEING SERVED IN ANY SUCH CLAIM, SUIT, ACTION
OR PROCEEDING BY MAILING, CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A COPY
THEREOF TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES HEREUNDER, AND AGREES
THAT SUCH SERVICES SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND
NOTICE THEREOF; PROVIDED, NOTHING IN CLAUSE (V) HEREOF SHALL AFFECT OR LIMIT ANY
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

Section 6.8             Severability. If any of the provisions of this Agreement
are held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over the subject
matter hereof, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as if it did not contain
the particular provisions or provisions held to be invalid and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the Parties as expressed in this Agreement at the time of
execution of this Agreement.

 

Section 6.9             Amendment or Modification. This Agreement may be amended
or modified from time to time only by the written agreement of all the Parties.
Each such instrument shall be reduced to writing and shall be designated on its
face as an amendment to this Agreement.

 

Section 6.10           Integration. This Agreement and the instruments
referenced herein supersede all previous understandings or agreements among the
Parties, whether oral or written, with respect to the subject matter of this
Agreement and such instruments. This Agreement and such instruments contain the
entire understanding of the Parties with respect to the subject matter hereof
and thereof. No understanding, representation, promise or agreement, whether
oral or written, is intended to be or shall be included in or form part of this
Agreement unless it is contained in a written amendment hereto executed by the
Parties after the date of this Agreement.

 

Section 6.11           Deed; Bill of Sale; Assignment. To the extent required
and permitted by applicable law, this Agreement shall also constitute a “deed,”
“bill of sale” or “assignment” of the assets and interests referenced herein.

 

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

 

15

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

 

 

 

Niska GS Holdings US, L.P.

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

Niska Gas Storage Partners LLC

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

Niska Partners Coöperatief U.A.

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

Managing Director A

 

 

 

 

 

 

 

 

 

 

By:

/s/ N.J.J.M. Wolthius-Geeraedts

 

 

Name:

N.J.J.M. Wolthius-Geeraedts

 

 

Title:

Managing Director B

 

 

 

 

 

 

 

 

 

 

Niska II Holdings, L.P.

 

 

 

 

 

By:

Niska II GP LLC, its general partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

Authorized Person

 

SIGNATURE PAGE
TO
CONTRIBUTION, ASSIGNMENT AND ASSUMPTION AGREEMENT

 

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Niska Holdco ULC

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

Niska GP ULC

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

Niska II GP LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

Authorized Person

 

 

 

 

 

 

 

 

 

 

Niska Gas Storage Canada GP, LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

Niska GS Holdings II, L.P.

 

 

 

 

 

 

By:

Niska II GP LLC, its general partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

Authorized Person

 

SIGNATURE PAGE
TO
CONTRIBUTION, ASSIGNMENT AND ASSUMPTION AGREEMENT

 

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Niska Sponsor Holdings Coöperatief, U.A.

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

Managing Director A

 

 

 

 

 

 

 

 

 

 

By:

/s/ N.J.J.M. Wolthius-Geeraedts

 

 

Name:

N.J.J.M. Wolthius-Geeraedts

 

 

Title:

Managing Director B

 

 

 

 

 

 

 

 

 

 

Niska GS Holdings Canada, L.P.

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

Niska Gas Storage Management LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

AECO Gas Storage Partnership

 

 

 

 

 

 

 

By: Niska Gas Storage Canada, ULC, its managing partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

President

 

SIGNATURE PAGE
TO
CONTRIBUTION, ASSIGNMENT AND ASSUMPTION AGREEMENT

 

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Niska Gas Storage US, LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

President

 

 

 

 

 

 

 

 

 

 

Niska Gas Storage Canada, ULC

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

President

 

 

 

 

 

 

 

 

 

 

Niska Gas Storage Canada, L.P.

 

 

 

 

 

 

 

By:  Niska Gas Storage Canada GP, LLC, its general partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

Niska GS Holdings I, L.P.

 

 

 

 

 

 

 

By:  Niska US GP LLC, its general partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ David F. Pope

 

 

Name:

David F. Pope

 

 

Title:

Authorized Person

 

SIGNATURE PAGE
TO
CONTRIBUTION, ASSIGNMENT AND ASSUMPTION AGREEMENT

 

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