exv10w1






Exhibit 10.1




Execution Version




COMMON UNIT

PURCHASE AGREEMENT




by and among



PAA NATURAL GAS STORAGE, L.P.



and



THE PURCHASERS PARTY HERETO



January 19, 2011



 









 





COMMON UNIT

PURCHASE AGREEMENT




     This COMMON UNIT PURCHASE AGREEMENT is made and entered into as of January 19, 2011 (this
“Agreement”), by and among PAA NATURAL GAS STORAGE, L.P., a Delaware limited partnership
(“Seller”), and the Purchasers listed on Schedule 2.1 hereto (each a “Purchaser”
and collectively, the “Purchasers”).



     WHEREAS, Seller desires to sell to the Purchasers, and the Purchasers desire to purchase from
Seller, certain common units representing limited partner interests in Seller (the “Common
Units”), subject to the terms and conditions set forth in this Agreement.



     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and each of the Purchasers, severally and not jointly, hereby agree as follows:



ARTICLE I.

DEFINITIONS




     Section 1.1 Definitions. As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings indicated:



     “Action” against a Person means any lawsuit, action, proceeding, investigation or
complaint before any court, governmental authority, mediator or arbitrator.



     “Affiliate” means, with respect to a specified Person, any other Person, whether now
in existence or hereafter created, directly or indirectly controlling, controlled by or under
direct or indirect common control with such specified Person. For purposes of this definition,
“control” (including, with correlative meanings, “controlling,” “controlled by,” and “under common
control with”) means the power to direct or cause the direction of the management and policies of
such Person, directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.



     “Agreement” shall have the meaning specified in the Preamble.



     “Baker Botts Legal Fees” shall have the meaning set forth in Section 7.10.



     “Basic Documents” means, collectively, this Agreement, the Registration Rights
Agreement and any and all other agreements or instruments executed and delivered to the Purchasers
by Seller hereunder or thereunder.



     “Business Day” means any day other than a Saturday, Sunday or a legal holiday or other
date on which the NYSE does not open for trading.



     “Common Unit Price” shall have the meaning specified in Section 2.2.



     “Closing” shall have the meaning specified in Section 2.3.



     “Closing Date” shall have the meaning specified in Section 2.3.



     “Commission” means the United States Securities and Exchange Commission.



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     “Commitment” or “Commitments” means the commitment of each Purchaser or the
commitments of all of the Purchasers, as applicable, to purchase and the obligation of Seller to
sell, as applicable, the Purchased Units set forth opposite such Purchaser’s name on Schedule 2.1
to this Agreement.



     “Commitment Date” means the date hereof.



     “Commitment Fee” means a fee to be paid in cash on the Closing Date or the termination
of this Agreement by the Seller to certain Purchasers as noted on Schedule 2.1 to this Agreement,
which fee, if paid on the Closing Date, will be netted against and reduce each such Purchaser’s
Purchase Price. In the event the Commitment Period terminates on the Reference Date, the Commitment
Fee will be equal to the amount set forth on Schedule 2.1. In the event the Commitment Period does
not terminate on the Reference Date, the Commitment Fee will be increased by 1.0% per each sixty
day period, prorated on a day-for-day basis, for the period from the Reference Date until the
Closing Date or date of termination of this Agreement.



     “Commitment Period” means the date commencing on the Commitment Date and extending
through the Reference Date; provided, however, that if the Closing Date has been set for a date
after the Reference Date, the Commitment Period will be automatically extended through such Closing
Date, but in no event shall the Commitment Period be extended beyond March 15, 2011.



     “Common Unit Price” shall have the meaning set forth in Section 2.2.



     “Common Units” means the common units representing limited partner interests in
Seller.



     “Confidential Information” means, with respect to each Purchaser, all oral or written
information, documents, records and data that Seller or its Representatives furnishes or otherwise
discloses to such Purchaser or any of its Representatives, together with all copies, extracts,
analyses, compilations, studies, memoranda, notes or other documents, records or data (in whatever
form maintained, whether documentary, computer or other electronic storage or otherwise) prepared
by any Person that contain or otherwise reflect or are generated from such information, documents,
records, or data. The term “Confidential Information” does not include any information that (a) at
the time of disclosure or thereafter is generally available to the public (other than as a result
of a disclosure by such Purchaser or its Representatives), (b) is developed by such Purchaser or
any of its Representatives, independent of, and without reliance in whole or in part on, any
Confidential Information or any knowledge of Confidential Information, (c) becomes available to
such Purchaser or its Representatives on a non-confidential basis from a source other than Seller
or its Representatives who, insofar as is known to the recipient, is not prohibited from
transmitting the information to the recipient by a contractual, legal, fiduciary or other
obligation to Purchaser or (d) was available to such Purchaser or its Representatives on a
non-confidential basis prior to its disclosure to such Purchaser or its Representatives by Seller
or its Representatives.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, and the rules and regulations of the Commission promulgated thereunder.



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     “GAAP” means generally accepted accounting principles in the United States of America
as in effect from time to time.



     “Indemnified Party” shall have the meaning specified in Section 6.3.



     “Indemnifying Party” shall have the meaning specified in Section 6.3.



     “Lead Purchaser” means Kayne Anderson MLP Fund, LP.



     “Major Acquisition” means the proposed acquisition by Seller of SG Resources
Mississippi, LLC.



     “NYSE” means the New York Stock Exchange.



     “PAA” means Plains All American Pipeline, L.P., a Delaware limited partnership.



     “Parties” means the Seller and the Purchasers.



     “Partnership Agreement” means the Second Amended and Restated Agreement of Limited
Partnership of Seller, dated as of August 16, 2010.



     “Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated organization or
government or any agency, instrumentality or political subdivision thereof, or any other form of
entity.



     “Private Placement Value” has the meaning specified in Section 7.15.



     “Purchase Price” means, with respect to a particular Purchaser, the amount set forth
opposite such Purchaser’s name under the column entitled “Purchase Price” on Schedule 2.1 to this
Agreement.



     “Purchased Units” means, with respect to a particular Purchaser, the number of Common
Units equal to the quotient determined by dividing (a) the Purchase Price of such Purchaser by (b)
the Common Unit Price; rounded to the nearest whole number.



     “Purchaser” or “Purchasers” shall have the meaning specified in the Preamble.



     “Purchaser Material Adverse Effect” means, with respect to each Purchaser, any
material and adverse effect on (i) the ability of such Purchaser to meet its obligations under the
Basic Documents on a timely basis or (ii) the ability of such Purchaser to consummate the
transactions under any Basic Document.



     “Purchaser Related Parties” shall have the meaning specified in Section 6.1.



     “Reference Date” means February 21, 2011.



     “Registration Rights Agreement” means the Registration Rights Agreement, to be entered
into at the Closing, by and among Seller and the Purchasers and certain other parties in the form
attached hereto as Exhibit A.



     “Representatives” of any Person means the officers, directors, employees, agents,
counsel, investment bankers and other representatives of such Person.



     “Securities Act” means the Securities Act of 1933, as amended from time to time, and
the rules and regulations of the Commission promulgated thereunder.



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     “Seller” shall have the meaning specified in the Preamble.



     “Seller Material Adverse Effect” means any material adverse effect on (i) the
condition (financial or otherwise), business, prospects, properties, net worth or results of
operations of Seller and its subsidiaries, taken as a whole, (ii) the ability of Seller to meet its
obligations under the Basic Documents on a timely basis, or (iii) the ability of Seller to
consummate the transactions under the Basic Documents.



     “Seller Related Parties” shall have the meaning specified in Section 6.2.



     “Seller Commission Documents” shall have the meaning specified in Section 3.3.



     “Seller Financial Statements” shall have the meaning specified in Section 3.3.



     “Short Sales” means, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and
forward sale contracts, options, puts, calls, short sales, “put equivalent positions” (as defined
in Rule 16a-1(h) under the Exchange Act) and similar arrangements, and sales and other transactions
through non-U.S. broker dealers or foreign regulated brokers.



ARTICLE II.

AGREEMENT TO SELL AND PURCHASE




     Section 2.1 Sale and Purchase. On the basis of the representations and warranties
contained herein and subject to the terms and conditions hereof, at the Closing (as defined in
Section 2.3 below), Seller hereby agrees to issue and sell to each Purchaser, and each Purchaser
hereby agrees to purchase from such Seller, the number of Purchased Units set forth opposite such
Purchaser’s name on Schedule 2.1 to this Agreement, and each Purchaser agrees to pay Seller the
amount of the Purchase Price in respect of such Purchased Units set forth opposite such Purchaser’s
name on Schedule 2.1 to this Agreement as consideration for the Purchased Units.



     Section 2.2 Consideration. The amount per Common Unit each Purchaser will pay to
Seller to purchase the Purchased Units (the “Common Unit Price”) shall be $21.75 per Common
Unit; subject to adjustment in accordance with Section 5.4(a) and Section 7.13. Upon payment of
each Purchaser’s Purchase Price at Closing, such Purchaser’s Purchased Units shall be fully paid
for.



     Section 2.3 Closing. Subject to the terms and conditions hereof, the consummation of
the purchase and sale of the Purchased Units hereunder (the “Closing”) shall occur no
earlier than five Business Days following the date on which Seller provides notice to the
Purchasers of its election to exercise the Commitment (such date, the “Closing Date”), at
the offices of Vinson & Elkins L.L.P., 1001 Fannin, Suite 2500, Houston, Texas 77002.



     Section 2.4 Independent Obligations. The obligation of each Purchaser hereunder is
several and not joint and is independent of the obligation of each other Purchaser, and the failure
of, or Seller’s waiver of, performance by any Purchaser does



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not excuse performance by any other Purchaser or Seller. No Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under this Agreement.
Nothing contained herein, and no action taken by any Purchaser pursuant hereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by this Agreement. Each
Purchaser shall be entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser
has been represented by its own separate legal counsel in its review and negotiation of this
Agreement. Seller has elected to provide all Purchasers with the same material terms and this
Agreement for the convenience of Seller and not because it was required or requested to do so by
the Purchasers.




     Section 2.5 Major Acquisition. If the Major Acquisition has not been consummated at a
price of not more than 1% greater than the Base Purchase Price (excluding working capital and
capital expenditure adjustments), as defined in the definitive purchase and sale agreement relating
to the Major Acquisition set forth on Exhibit B, within two (2) Business Days of the Closing Date,
then Seller shall promptly, but in no event more than one (1) Business Day later, (i) refund the
amount of the Purchase Price paid by each Purchaser in accordance with Section 2.1 in exchange for
the return of the certificates evidencing the Purchased Units and (ii) pay the Commitment Fee to
each Purchaser entitled to such fee as specified on Schedule 2.1.



ARTICLE III.

REPRESENTATIONS AND WARRANTIES

RELATED TO SELLER




     Seller hereby represents and warrants to Purchasers as follows:



     Section 3.1 Existence. Seller (a) is a limited partnership duly formed, validly
existing and in good standing under the laws of the State of Delaware and (b) has all requisite
limited partnership power necessary to own its assets and carry on its business as its business is
now being conducted.



     Section 3.2 Valid Issuance of Purchased Units. The offer and sale of the Purchased
Units and the limited partner interests represented thereby have been duly authorized by Seller
and, when issued and delivered to the Purchasers against payment therefor in accordance with the
terms of this Agreement, will be validly issued, fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such nonassessability may be affected by such
matters described under the caption “The Partnership Agreement — Limited Liability” in Seller’s
Registration Statement on Form S-1 (File No. 333-164492), which is incorporated by reference into
Seller’s Registration Statement on Form 8-A (File No. 001-34722)).



     Section 3.3 Seller Commission Documents. Seller has filed with the Commission all
forms, registration statements, reports, schedules and statements required



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to be filed by it under the Exchange Act or the Securities Act (all such documents,
collectively “Seller Commission Documents”). The Seller Commission Documents, including,
without limitation, any audited or unaudited financial statements and any notes thereto or
schedules included therein (the “Seller Financial Statements”), at the time filed (in the
case of registration statements, solely on the dates of effectiveness) (except to the extent
corrected by a subsequently filed Seller Commission Document filed prior to the date hereof) (a)
did not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, (b) complied in all material respects
with the applicable requirements of the Exchange Act and the Securities Act, as the case may be,
(c) complied as to form in all material respects with applicable accounting requirements and with
the published rules and regulations of the Commission with respect thereto, (d) were prepared in
accordance with GAAP applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q
of the Commission), and (e) fairly present (subject in the case of unaudited statements to normal,
recurring and year-end audit adjustments) in all material respects the consolidated financial
position and status of the business of Seller as of the dates thereof and the consolidated results
of its operations and cash flows for the periods then ended. PricewaterhouseCoopers LLP is an
independent registered public accounting firm with respect to Seller and has not resigned or been
dismissed as independent registered public accountants of Seller as a result of or in connection
with any disagreement with Seller on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedures.




     Section 3.4 No Conflicts. The execution, delivery and performance by Seller of this
Agreement, the Registration Rights Agreement and all other agreements and instruments to be
executed and delivered by Seller pursuant hereto or in connection with the transactions
contemplated by this Agreement and the Registration Rights Agreement, and compliance by Seller with
the terms and provisions hereof and thereof, do not and will not (a) violate any provision of any
statute, rule, regulation or order of any court or governmental authority having jurisdiction over
Seller or any of its properties or assets, (b) conflict with or result in a violation of Seller’s
certificate of limited partnership or the Partnership Agreement, or (c) result in a violation or
breach of or constitute a default under any material agreement to which Seller is a party or by
which Seller or any of its properties is bound, except, in the case of clauses (a) and (c), where
such violation, breach or default would not, individually or in the aggregate, reasonably be
expected to have a Seller Material Adverse Effect.



     Section 3.5 Authority. Seller has all necessary limited partnership power and
authority to execute, deliver and perform its obligations under this Agreement and the Registration
Rights Agreement and to consummate the transactions contemplated hereby and thereby; the execution,
delivery and performance by Seller of this Agreement and the Registration Rights Agreement and the
consummation of the transactions contemplated hereby and thereby, have been duly authorized by all
necessary limited partnership action on its part; and this Agreement and the Registration Rights
Agreement constitute the legal, valid and binding obligation of Seller, enforceable in accordance
with its terms,



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except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer
and similar laws affecting creditors’ rights generally or by general principles of equity.




     Section 3.6 Approvals. No authorization, consent, approval, waiver, license,
qualification or written exemption from, nor any filing, declaration, qualification or registration
with, any governmental authority or any other Person is required in connection with the execution,
delivery or performance by Seller of this Agreement and the Registration Rights Agreement, except
where the failure to receive such authorization, consent, approval, waiver, license, qualification
or written exemption, or to make such filing, declaration, qualification or registration, would
not, individually or in the aggregate, reasonably be expected to have a Seller Material Adverse
Effect.



     Section 3.7 Investment Company Status. Seller is not an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.



     Section 3.8 Certain Fees. No fees or commissions will be payable by Seller to
brokers, finders, or investment bankers with respect to the sale of any of the Purchased Units or
the consummation of the transactions contemplated by this Agreement.



     Section 3.9 No Side Agreements. Other than any existing confidentiality agreements in
favor of Seller that have been executed by any Purchaser or to which any Purchaser is otherwise
bound, there are no other agreements by, among or between Seller or its Affiliates, on the one
hand, and any Purchaser or its Affiliates, on the other hand, with respect to the transactions
contemplated hereby.



     Section 3.10 MLP Status. Seller has, since its formation, met the gross income
requirements of Section 7704(c)(2) of the Internal Revenue Code of 1986, as amended.



     Section 3.11 Offering. Assuming the accuracy of the representations and warranties of
the Purchasers contained in this Agreement, the sale and issuance of the Purchased Units to each of
the Purchasers pursuant to this Agreement is exempt from the registration requirements of the
Securities Act, and neither Seller nor any authorized agent acting on its behalf has taken or will
take any action hereafter that would cause the loss of such exemptions.



ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF PURCHASERS




     Each Purchaser, severally and not jointly, hereby represents and warrants to Seller as
follows:



     Section 4.1 Existence. Such Purchaser (a) is an entity duly organized, validly
existing and in good standing, as applicable, under the laws of its jurisdiction of organization
and (b) has all requisite power necessary to own its assets and carry on its business as its
business is now being conducted.



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     Section 4.2 No Conflicts. The execution, delivery and performance by such Purchaser
of this Agreement and the Registration Rights Agreement and all other agreements and instruments to
be executed and delivered by such Purchaser pursuant hereto or thereto or in connection herewith,
compliance by such Purchaser with the terms and provisions hereof or thereof and the purchase of
the Purchased Units by such Purchaser do not and will not (a) violate any provision of any statute,
rule, regulation or order of any court or governmental authority having jurisdiction over such
Purchaser or any of its properties or assets, (b) conflict with or result in a violation of any
provision of the organizational documents of such Purchaser, or (c) result in a violation or breach
of or constitute a default under any material agreement to which such Purchaser is a party or by
which such Purchaser or any of its properties is bound, except, in the case of clauses (a) and (c),
where such violation, breach or default would not, individually or in the aggregate, reasonably be
expected to have a Purchaser Material Adverse Effect.



     Section 4.3 Authority. Such Purchaser has all necessary power and authority to
execute, deliver and perform its obligations under this Agreement and the Registration Rights
Agreement and to consummate the transactions contemplated hereby and thereby; the execution,
delivery and performance by such Purchaser of this Agreement and the Registration Rights Agreement
and the consummation of the transactions contemplated hereby and thereby, have been duly authorized
by all necessary action on its part; and this Agreement and the Registration Rights Agreement
constitute the legal, valid and binding obligation of such Purchaser, enforceable in accordance
with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer and similar laws affecting creditors rights generally or by general principles of equity.



     Section 4.4 Ownership of Securities. Such Purchaser and its Affiliates do not, as of
the date hereof, and, as of the Closing Date, will not, own ten percent or more of Seller’s issued
and outstanding Common Units.



     Section 4.5 Trading Activities. Such Purchaser’s trading activities, if any, with
respect to Seller’s Common Units will be in compliance with all applicable state and federal
securities laws, rules and regulations and the rules and regulations of the NYSE.



     Section 4.6 Investment. The Purchased Units are being acquired for its own account,
not as a nominee or agent, and with no intention of distributing the Purchased Units or any part
thereof, and that such Purchaser has no present intention of selling or granting any participation
in or otherwise distributing the same in any transaction in violation of the securities laws of the
United States of America or any State, without prejudice, however, to such Purchaser’s right at all
times to sell or otherwise dispose of all or any part of the Purchased Units under a registration
statement under the Securities Act and applicable state securities laws or under an exemption from
such registration available thereunder (including, without limitation, if available, Rule 144
promulgated thereunder). If such Purchaser should in the future decide to dispose of any of the
Purchased Units, such Purchaser understands and agrees (a) that it may do so only (i) in compliance
with the Securities Act and applicable state securities law, as then in effect, or (ii) in the
manner contemplated by any registration statement pursuant to which such



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securities are being offered, and (b) that stop-transfer instructions to that effect will be
in effect with respect to such securities.




     Section 4.7 Nature of Purchaser. Such Purchaser represents and warrants to, and
covenants and agrees with, Seller that, (a) it is an “accredited investor” within the meaning of
Rule 501 of Regulation D promulgated by the Securities and Exchange Commission pursuant to the
Securities Act and (b) by reason of its business and financial experience it has such knowledge,
sophistication and experience in making similar investments and in business and financial matters
generally so as to be capable of evaluating the merits and risks of the prospective investment in
the Purchased Units, is able to bear the economic risk of such investment and, at the present time,
would be able to afford a complete loss of such investment.



     Section 4.8 Receipt of Information. Such Purchaser acknowledges that it has (a) had
access to Seller’s periodic filings with the Commission and (b) been provided a reasonable
opportunity to ask questions of and receive answers from Representatives of Seller regarding such
matters. Such Purchaser acknowledges that certain information that Seller would be required to
provide to such Purchaser in a registered offering, including historical and pro forma financial
information relating to the Major Acquisition, has not been made available to such Purchaser.



     Section 4.9 Legend. It is understood that the certificates evidencing the Common
Units may bear the following legend: “These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel satisfactory to the Partnership that such registration is
not required.”



     Section 4.10 Certain Fees. No fees or commissions will be payable by such Purchaser
to brokers, finders, or investment bankers with respect to the sale of any of the Purchased Units
or the consummation of the transactions contemplated by this Agreement.



     Section 4.11 No Side Agreements. Other than any existing confidentiality agreements
in favor of Seller that have been executed by such Purchaser or to which such Purchaser is
otherwise bound, there are no other agreements by, among or between such Purchaser or any of its
Affiliates, on the one hand, and Seller or any of its Affiliates, on the other hand, with respect
to the transactions contemplated hereby.



ARTICLE V.

CLOSING CONDITIONS




     Section 5.1 Conditions to the Closing.




     (a) Mutual Conditions. The respective obligation of each Party to consummate
the purchase and issuance and sale of the Purchased Units shall be subject to the
satisfaction on or prior to the Closing Date of each of the following



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conditions (any or all of which may be waived by a particular Party on behalf of
itself in writing, in whole or in part, to the extent permitted by applicable law):




     (i) no statute, rule, regulation or order shall have been enacted or
promulgated, and no action shall have been taken, by any governmental authority of
competent jurisdiction that temporarily, preliminarily or permanently restrains,
precludes, enjoins or otherwise prohibits the consummation of the transactions
contemplated by this Agreement or makes the transactions contemplated by this
Agreement illegal;




     (ii) there shall not be pending any suit, action or proceeding by any
governmental authority seeking to restrain, preclude, enjoin or prohibit the
transactions contemplated by this Agreement;




     (iii) the Purchased Units shall have been approved for listing on the NYSE,
subject to notice of issuance;




     (iv) the material conditions associated with the closing of the Major
Acquisition shall have been satisfied and Seller shall have notified the Purchasers
of its intent to effect the closing of the Major Acquisition at a price of not more
than 1% greater than the Base Purchase Price (excluding working capital and capital
expenditure adjustments), as defined in the definitive purchase and sale agreement
relating to the Major Acquisition set forth on Exhibit B, and on terms
substantially similar to those in such definitive purchase and sale agreement no
later than one Business Day following the Closing hereunder; and




     (v) the Seller shall have obtained (A) gross equity proceeds of at least $600
million (including the equity proceeds pursuant to this Agreement) and (B) debt
financing of at least $200 million at a fixed interest rate of no higher than 5.5%
per annum and an initial minimum term of three years.




     (b) Each Purchaser’s Conditions. The respective obligation of each Purchaser
to consummate the purchase of its Purchased Units shall be subject to the satisfaction on
or prior to the Closing Date of each of the following conditions (any or all of which may
be waived by a particular Purchaser on behalf of itself in writing, in whole or in part, to
the extent permitted by applicable law):




     (i) Seller shall have performed and complied with the covenants and agreements
contained in this Agreement that are required to be performed and complied with by
Seller on or prior to the Closing Date;




     (ii) the representations and warranties of Seller contained in this Agreement
that are qualified by materiality or Seller Material Adverse Effect shall be true
and correct when made and as of the Closing Date and all other representations and
warranties shall be true and correct in all material respects when made and as of
the Closing Date, in each case as



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though made at and as of the Closing Date (except that representations made as
of a specific date shall be required to be true and correct as of such date only);




     (iii) Seller shall have delivered, or caused to be delivered, to the
Purchasers at the Closing, Seller’s closing deliveries described in Section 5.3 of
this Agreement; and




     (iv) since September 30, 2010, no Seller Material Adverse Effect shall have
occurred and be continuing.




     (c) Seller’s Conditions. The obligation of Seller to consummate the sale of
the Purchased Units to each of the Purchasers shall be subject to the satisfaction on or
prior to the Closing Date of each of the following conditions with respect to each
Purchaser individually and not the Purchasers jointly (any or all of which may be waived by
Seller in writing, in whole or in part, to the extent permitted by applicable law):




     (i) such Purchaser shall have performed and complied with the covenants and
agreements contained in this Agreement that are required to be performed and
complied with by that Purchaser on or prior to the Closing Date;




     (ii) the representations and warranties of such Purchaser contained in this
Agreement that are qualified by materiality or Purchaser Material Adverse Effect
shall be true and correct when made and as of the Closing Date and all other
representations and warranties shall be true and correct in all material respects
when made and as of the Closing Date, in each case as though made at and as of the
Closing Date (except that representations made as of a specific date shall be
required to be true and correct as of such date only);




     (iii) such Purchaser shall have delivered, or caused to be delivered, to
Seller at the Closing, such Purchaser’s closing deliveries described in Section 5.4
of this Agreement; and




     (iv) since the date hereof, no Purchaser Material Adverse Effect shall have
occurred and be continuing.



     Section 5.2 Termination.




     (a) Any Purchaser (with respect to itself) may terminate its respective Commitment and
Seller (with respect to all of the Purchasers) may terminate all of the Commitments at any
time after the expiration of the Commitment Period.




     (b) In the event that any condition to a Party’s obligation to close specified in
Section 5.1 is not satisfied or waived on the Closing Date, such Party may terminate this
Agreement upon written notice to the other Party; provided,



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however, that no Party may exercise such termination right to the extent that it has
not satisfied or complied with its obligations under this Agreement.




     (c) In the event of any termination of this Agreement pursuant to Sections 5.2(a) or
(b) hereof, this Agreement shall forthwith become null and void solely with respect to the
Parties to such termination. In the event that this Agreement is terminated in accordance
with Section 5.2(a) hereof or by a Purchaser in accordance with Section 5.2(b) hereof,
within two (2) Business Days following such termination, Seller shall pay the Commitment
Fee to each Purchaser entitled to such fee as specified on Schedule 2.1 in immediately
available funds by wire transfer. Except as provided in the immediately preceding
sentence, in the event of any termination in accordance with Section 5.2(a) or (b), there
shall be no liability on the part of any Party to such termination; provided, however, that
nothing herein shall relieve any Party from any liability or obligation with respect to any
willful breach of this Agreement. Notwithstanding the foregoing, any termination of this
Agreement by any Purchaser shall not serve to terminate this Agreement as between any
Purchaser not so terminating and Seller.



     Section 5.3 Seller Deliveries. At the Closing, subject to the terms and conditions of
this Agreement, Seller will deliver, or cause to be delivered, to the Purchasers:




     (a) the applicable Purchased Units by delivery of certificates evidencing such
Purchased Units at the Closing meeting the requirements of the Partnership Agreement,
registered in such name(s) as such Purchaser shall, with reasonable notice, have
designated, all free and clear of any liens, encumbrances or interests of any other Person;




     (b) an officer’s certificate in form reasonably satisfactory to the Purchasers
attesting to the matters set forth in Sections 5.1(b)(i), (ii) and (iii); and




     (c) the Registration Rights Agreement, which shall have been duly executed by the
Seller.



     Section 5.4 Purchaser Deliveries. At the Closing, subject to the terms and conditions
of this Agreement, each Purchaser will deliver, or cause to be delivered, to Seller:




     (a) payment to Seller of the amount of the applicable Purchase Price set forth
opposite such Purchaser’s name on Schedule 2.1 to this Agreement (which Purchase Price
shall be net of any applicable Commitment Fee) for the applicable Purchased Units, by wire
transfer of immediately available funds to an account designated by Seller in writing at
least two (2) Business Days (or such shorter period as shall be agreeable to the applicable
Parties) prior to the Closing;




     (b) an officer’s certificate in form reasonably acceptable to Seller attesting to the
matters set forth in Sections 5.1(c)(i), (ii) and (iii); and



12









 






     (c) the Registration Rights Agreement, which shall have been duly executed by the
Purchaser.



ARTICLE VI.

INDEMNIFICATION




     Section 6.1 Indemnification by Seller. Seller agrees to indemnify each Purchaser and
its Affiliates and each of their respective Representatives (collectively, “Purchaser Related
Parties”), from, and hold each of them harmless against any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), demands, and causes of action, and, in
connection therewith, and promptly upon demand, pay or reimburse each of them for all reasonable
costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including,
without limitation, the reasonable fees and disbursements of counsel and all other reasonable
expenses incurred in connection with investigating, defending or preparing to defend any such
matter that may be incurred by them or asserted against or involve any of them as a result of,
arising out of, or in any way related to the breach of any of the representations, warranties or
covenants of Seller contained herein, provided such claim for indemnification relating to a breach
of a representation or warranty is made prior to the expiration of such representation or warranty.
Furthermore, Seller agrees that it will indemnify and hold harmless each Purchaser and Purchaser
Related Parties from and against any and all claims, demands or liabilities for broker’s, finder’s,
placement or other similar fees or commissions incurred by Seller or alleged to have been incurred
by Seller in connection with the sale of any of the Purchased Units or the consummation of the
transactions contemplated by this Agreement.



     Section 6.2 Indemnification by Purchasers. Each Purchaser agrees, severally and not
jointly, to indemnify Seller and its Affiliates and each of their respective Representatives
(collectively, “Seller Related Parties”) from, and hold each of them harmless against any
and all actions, suits, proceedings (including any investigations, litigation, or inquiries),
demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or
reimburse each of them for all reasonable costs, losses, liabilities, damages, or expenses of any
kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of
counsel and all other reasonable expenses incurred in connection with investigating, defending or
preparing to defend any such matter to the extent that it may be incurred by them or asserted
against or involve any of them as a result of, arising out of, or in any way related to the breach
of any of the representations, warranties or covenants of such Purchaser contained herein, provided
such claim for indemnification relating to a breach of the representations and warranties by such
Purchaser is made prior to the expiration of such representations and warranties. Furthermore,
each Purchaser agrees, severally and not jointly, that it will indemnify and hold harmless Seller
and Seller Related Parties from and against any and all claims, demands or liabilities for
broker’s, finder’s, placement or other similar fees or commissions incurred by such Purchaser or
alleged to have been incurred by such Purchaser in connection with the purchase of any of the
Purchased Units or the consummation of the transactions contemplated by this Agreement.



13









 





     Section 6.3 Indemnification Procedures. Promptly after any Seller Related Party or
Purchaser Related Party (hereinafter, the “Indemnified Party”) has received notice of any
indemnifiable claim hereunder, or the commencement of any Action or proceeding by a third person,
which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement,
the Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”)
written notice of such claim or the commencement of such Action or proceeding, but failure to so
notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may
have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is
materially prejudiced by such failure. Such notice shall state the nature and the basis of such
claim to the extent then known. The Indemnifying Party shall have the right to defend and settle,
at its own expense and by its own counsel, any such matter as long as the Indemnifying Party
pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or
settle, it shall promptly notify the Indemnified Party of its intention to do so, and the
Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially
reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall
include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and
other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s
possession or control. Such cooperation of the Indemnified Party shall be at the cost of the
Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its
intention to undertake to defend or settle any such asserted liability, and for so long as the
Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for
any additional legal expenses incurred by the Indemnified Party in connection with any defense or
settlement of such asserted liability; provided, however, that the Indemnified Party shall be
entitled (a) at its expense, to participate in the defense of such asserted liability and the
negotiations of the settlement thereof and (b) if (i) the Indemnifying Party has failed to assume
the defense and employ counsel or (ii) if the defendants in any such Action include both the
Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party shall have
concluded that there may be reasonable defenses available to the Indemnified Party that are
different from or in addition to those available to the Indemnifying Party or if the interests of
the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying
Party, then the Indemnified Party shall have the right to select a separate counsel and to assume
such legal defense and otherwise to participate in the defense of such Action, with the expenses
and fees of such separate counsel and other expenses related to such participation to be reimbursed
by the Indemnifying Party as incurred. Notwithstanding any other provision of this Agreement, the
Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified
Party, unless the settlement thereof imposes no liability or obligation on, and includes a complete
release from liability of, the Indemnified Party.



     Section 6.4 Survival. The Parties’ obligations under this Article VI shall only
become operative following the Closing Date and shall not survive any termination of this Agreement
pursuant to Section 5.2.



14









 





ARTICLE VII.

MISCELLANEOUS




     Section 7.1 Interpretation of Provisions. Article, Section and Schedule references
are to this Agreement, unless otherwise specified. All references to instruments, documents,
contracts, and agreements are references to such instruments, documents, contracts, and agreements
as the same may be amended, supplemented, and otherwise modified from time to time, unless
otherwise specified. The word “including” shall mean “including but not limited to.” Whenever a
Party has an obligation under this Agreement, the expense of complying with that obligation shall
be an expense of such Party unless otherwise specified. Whenever any determination, consent, or
approval is to be made or given by a Party, such action shall be in such Party’s sole discretion
unless otherwise specified in this Agreement. If any provision in this Agreement is held to be
illegal, invalid, not binding, or unenforceable, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid, not binding, or
unenforceable provision had never comprised a part of this Agreement, and the remaining provisions
shall remain in full force and effect. This Agreement has been reviewed and negotiated by
sophisticated parties with access to legal counsel and shall not be construed against the drafter.



     Section 7.2 Survival. The representations and warranties set forth in Section 3.2,
Section 3.8, Section 3.9, Section 3.10, Section 4.10 and Section 4.11 hereunder shall survive
indefinitely, and the other representations and warranties set forth herein shall survive for a
period of twelve (12) months, in each case, following the Closing Date regardless of any
investigation made by or on behalf of Seller or the Purchasers. The covenants made in this
Agreement shall survive the Closing of the transactions described herein and remain operative and
in full force and effect regardless of acceptance of any of the Purchased Units and payment
therefor.



     Section 7.3 No Waiver; Modifications in Writing.




     (a) Delay. No failure or delay on the part of any Party in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be available to a
Party at law or in equity or otherwise.




     (b) Specific Waiver. Except as otherwise provided herein, no amendment,
waiver, consent, modification or termination of any provision of this Agreement shall be
effective unless signed by each of the Parties hereto or thereto affected by such
amendment, waiver, consent, modification or termination. Any amendment, supplement or
modification of or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure from the terms of any provision of this
Agreement shall be effective only in the specific instance and for the specific purpose for
which made or given. Except where notice is specifically required by this Agreement, no
notice to or demand



15









 






on a Party in any case shall entitle such Party to any other or further notice or
demand in similar or other circumstances.



     Section 7.4 Binding Effect; Assignment.




     (a) Binding Effect. This Agreement shall be binding upon Seller, the
Purchasers and their respective successors and permitted assigns. Except as expressly
provided in this Agreement, this Agreement shall not be construed so as to confer any right
or benefit upon any Person other than the Parties to this Agreement, and their respective
successors and permitted assigns.




     (b) Assignment of Rights. All or any portion of the rights and obligations of
each Purchaser under this Agreement may be transferred to any Affiliate of such Purchaser
but may not otherwise be transferred by such Purchaser without the prior written consent of
Seller.



     Section 7.5 Confidentiality. Notwithstanding anything herein to the contrary, to the
extent that any Purchaser has executed or is otherwise bound by a confidentiality agreement in
favor of Seller, such Purchaser shall continue to be bound by such confidentiality agreement
(notwithstanding any termination provision contained therein). To the extent that any Purchaser
has not executed or is not otherwise bound by a confidentiality agreement in favor of Seller, and
has actually received Confidential Information from Seller, such Purchaser will refrain, and will
cause its Representatives to refrain, from disclosing to any other Person any Confidential
Information; provided, however, that with respect to any Purchaser who has not executed and is not
otherwise bound by a confidentiality agreement in favor of Seller, Seller acknowledges that Seller
has not provided such Purchaser any Confidential Information unless requested by such Purchaser.
Disclosure of Confidential Information will not be deemed to be a breach of this Section 7.5 if
such disclosure is made with the consent of Seller or pursuant to a subpoena or order issued by a
court of competent jurisdiction or by a judicial, administrative or legislative body or committee;
provided, however, that upon receipt by any Purchaser of any subpoena or order covering
Confidential Information of Seller, such Purchaser will to the extent reasonably practicable
promptly notify Seller of such subpoena or order.



     Section 7.6 Communications. All notices and communications provided for hereunder
shall be in writing and shall be given by registered or certified mail, return receipt requested,
regular mail, telecopy, air courier guaranteeing overnight delivery or personal delivery to the
following addresses:



16









 






     (a) If to Purchasers, to the addresses listed on Schedule 7.6, with a copy to:



Baker Botts L.L.P.


98 San Jacinto Blvd., Suite 1500


Austin, Texas 78701


Attention: Laura Lanza Tyson


Facsimile: (512) 322-8377




     (b) If to Seller:



PAA Natural Gas Storage, L.P.


333 Clay Street


Houston, Texas 77002


Attention: Richard McGee


Facsimile: (713) 652-3700




     with a copy to:



Vinson & Elkins L.L.P.


1001 Fannin Street, Suite 2500


Houston, Texas 77002


Attention: Alan Beck


Facsimile: (713) 615-5620



or to such other address as Seller or any Purchaser may designate in writing. All notices and
communications shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; upon actual receipt if sent by registered or certified mail, return receipt
requested, or regular mail, if mailed; when receipt acknowledged, if sent via telecopy; and upon
actual receipt when delivered to an air courier guaranteeing overnight delivery.




     Section 7.7 Entire Agreement. This Agreement is intended by the Parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the Parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the rights granted by Seller or any of its Affiliates
or Purchasers or any of their Affiliates set forth herein. This Agreement supersedes all prior
agreements and understandings between the Parties with respect to such subject matter, including
any term sheets and commitment letters.



     Section 7.8 Governing Law. This Agreement will be construed in accordance with and
governed by the laws of the State of Texas without regard to principles of conflicts of laws.



     Section 7.9 Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different Parties hereto in separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original




17












 




and all of which counterparts, taken together, shall constitute but one and the same
Agreement.




     Section 7.10 Costs and Expenses. Each Party shall be responsible for such Party’s own
expenses in connection with this Agreement and the transactions contemplated hereby, except that
Seller will reimburse the Lead Purchaser for up to $25,000 of legal fees incurred by Baker Botts
L.L.P. (“Baker Botts Legal Fees”). Any Baker Botts Legal Fees in excess of $25,000 shall
be paid pro rata by all Purchasers in proportion to the aggregate number of Purchased Units set
forth opposite the names of such Purchasers on Schedule 2.1.



     Section 7.11 Short Selling Acknowledgement and Agreement. Each Purchaser understands
and acknowledges, severally and not jointly with any other Purchaser, that the Commission currently
takes the position that coverage of Short Sales of securities “against the box” prior to the
effective date of a registration statement is a violation of Section 5 of the Securities Act. Each
Purchaser agrees, severally and not jointly , that it will not (and shall cause its Affiliates not
to) engage in any Short Sales that result in the disposition of the Common Units acquired hereunder
by the Purchaser until such time as the Shelf Registration Statement (as defined in the
Registration Rights Agreement) is declared or deemed effective by the Commission. Each Purchaser
further agrees, severally and not jointly, that it will not (and shall cause its Affiliates not to)
enter into any Short Sales that result in the disposition of the Common Units owned by it from the
date hereof through the Closing Date; provided that this provision shall not limit any Purchaser’s
ability to fulfill contractual obligations existing on the date hereof.



     Section 7.12 Unit Split Affecting the Purchased Units. In the event that Seller
declares a unit split with respect to its Common Units and the record date for such unit split is
after the date of this Agreement and prior to the Closing Date, the number of Purchased Units to be
delivered to Purchasers hereunder and the Common Unit Price and the Purchase Price therefor shall
be appropriately adjusted so that the Purchasers would be in the same relative economic position as
they would be if such Purchased Units would have been issued and delivered to the Purchasers prior
to the record date for any such unit split.



     Section 7.13 Distributions. If the Closing Date is after the record date relating to
a distribution to be made to holders of Common Units with respect to the fiscal quarter ended
December 31, 2010 (the Seller anticipates paying such distribution on or about February 15, 2011)
or any other distribution to be made to holders of Common Units, then the Purchasers shall not be
entitled to receive such distribution but the Common Unit Price payable by Purchasers entitled to
receive a Commitment Fee as specified on Schedule 2.1 shall be reduced by the per Common Unit
amount of such distribution and the number of Purchased Units set forth on Schedule 2.1 shall be
increased accordingly. For the avoidance of doubt, the Common Unit Price payable by Purchasers not
entitled to receive a Commitment Fee as specified on Schedule 2.1 shall not be reduced by the
amount of such distribution and the number of Purchased Units set forth on Schedule 2.1 with regard
to such Purchasers shall not be increased.



18









 





     Section 7.14 Removal of Legend. In connection with a sale of the Purchased Units by a
Purchaser in reliance on Rule 144, the applicable Purchaser or its broker shall deliver to the
Seller a broker representation letter providing any information the Seller deems necessary to
determine that the sale of the Purchased Units is made in compliance with Rule 144, including, as
may be appropriate, a certification that the Purchaser is not an affiliate of the Seller and
regarding the length of time the Purchased Units have been held. Upon receipt of such
representation letter, the Seller shall as soon as reasonably practicable exchange unit
certificates bearing the legend described in Section 4.9 for unit certificates without such legend.
After any Purchaser or its permitted assigns have held the Purchased Units for one year, if such
Purchased Units still bear the legend described in Section 4.9, the Purchaser may request the
Seller to remove the legend and the Seller agrees to take all steps necessary to effect the removal
of the legend as soon as reasonably practicable. The Seller shall bear all direct costs and
expenses associated with the removal of a legend pursuant to this Section 7.14, regardless of
whether the request is made in connection with a sale or otherwise, so long as such Purchaser or
its permitted assigns provide to the Seller any information the Seller deems necessary to determine
that the legend is no longer required under the Securities Act or applicable state laws, including
a certification that the holder is not an affiliate of the Seller and regarding the length of time
the Purchased Units have been held; provided, however, that the Seller shall not be responsible for
any legal fees and expenses of counsel incurred by the Purchaser in connection therewith.



     Section 7.15 Certain Special Allocations of Book and Taxable Income. To the extent
that the Common Unit Price differs from the trading price of the Common Units on the NYSE as of the
Closing Date (the “Private Placement Value”), the general partner of the Seller intends to
specially allocate Seller items of book and taxable income, gain, loss or deduction to the
Purchasers so that their capital accounts in their Purchased Units are equal, on a per-Unit basis,
with the capital accounts of the other holders of Common Units (and thus to assure fungibility of
all Common Units). Such special allocation will occur upon the earlier to occur of any taxable
period of Seller ending upon, or after, (a) a book-up event or book-down event in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv)(f) or a sale of all or substantially all of the
assets of Seller occurring after the date of the issuance of the Purchased Units, or (b) the
transfer of the Purchased Units to a Person that is not an Affiliate of the Purchaser, in which
case, such allocation shall be made only with respect to the Purchased Units so transferred. A
Purchaser holding a Purchased Unit shall be required to provide notice to the general partner of
the Seller of a transfer of a Purchased Unit to a Person who is not an Affiliate of the Purchaser
no later than the last Business Day of the calendar year during which such transfer occurred,
unless by virtue of the application of clause (a) above, the general partner of the Seller has
determined that the capital accounts of Common Units transferred are equal, on a per-Unit basis,
with the capital accounts of the other holders of Common Units. The initial capital account
balance in respect of each Purchased Unit shall be the Private Placement Value for such Purchased
Unit. To provide Purchasers of the Purchased Units with a net capital account in the Purchased
Units on the date of purchase equal to the Common Unit Price paid by those Purchasers for the
Purchased Units, immediately following the creation of a capital account balance in respect of each
Purchased Unit, each holder acquiring a Purchased Unit at original issuance shall be



19









 




deemed to have (x) received a cash distribution in respect of each Purchased Unit in an amount
equal to any excess of the Private Placement Value over the Common Unit Price of the Purchased Unit
or (y) made a cash contribution in respect of each Purchased Unit in an amount equal to any excess
of the Common Unit Price over the Private Placement Value of the Purchased Unit.




20









 





     IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first
above written.



	 	 	 	 	 
	 	PAA NATURAL GAS STORAGE, L.P.

 	 
	 	By:  	PNGS GP LLC, its general partner
 	 
	 
	 	By:  	
 /s/ Richard K. McGee	 
	 	 	Name:  	Richard K. McGee 	 
	 	 	Title:  	Vice President — Legal and Business
Development 	 



[Signature Page to Purchase Agreement]









 









 











[PURCHASERS — to come]




[Signature Page to Purchase Agreement]



 









 





Exhibit A — Form of Registration Rights Agreement



See
Exhibit 10.2 to the Current Report on Form 8-K of which this Agreement is a part




Exhibit A






 









 








Exhibit B — Purchase and Sale Agreement dated December 28, 2010 by and among

SGR Holdings, L.L.C., Southern Pines Energy Investment Co., LLC and PAA

Natural Gas Storage, L.P.



See
Exhibit 2.1 to the Current Report on Form 8-K of which this Agreement is a part




Exhibit B







 









 








Schedule 2.1




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Purchase	 	Purchased	 	Commitment
	Purchaser	 	Price*	 	Units	 	Fee**
	Kayne Anderson MLP Fund, LP
	 	$	14,917,500	 	 	 	689,655	 	 	$	82,500	 
	Kayne Anderson Non-Traditional
Investments, LP
	 	 	994,500	 	 	 	45,977	 	 	 	5,500	 
	Kayne Anderson Capital Income
Partners (QP), LP
	 	 	1,989,000	 	 	 	91,954	 	 	 	11,000	 
	Kayne Anderson Midstream
Institutional Fund, LP
	 	 	1,989,000	 	 	 	91,954	 	 	 	11,000	 
	KA-Sabes Investments, LLC
	 	 	7,956,000	 	 	 	367,816	 	 	 	44,000	 
	KA-Sabes Investments II, LLC
	 	 	1,989,000	 	 	 	91,954	 	 	 	11,000	 
	Hallco, Inc.
	 	 	6,961,500	 	 	 	321,839	 	 	 	38,500	 
	Aribo Investments LLC
	 	 	4,972,500	 	 	 	229,885	 	 	 	27,500	 
	Gary Lieberthal, TTEE
	 	 	2,983,500	 	 	 	137,931	 	 	 	16,500	 
	WHI Equity Managers Fund LLC
	 	 	1,989,000	 	 	 	91,954	 	 	 	11,000	 
	James J. Dunne III
	 	 	1,989,000	 	 	 	91,954	 	 	 	11,000	 
	Brener International Group, LLC
	 	 	1,989,000	 	 	 	91,954	 	 	 	11,000	 
	Mason Liquid Fund LLC
	 	 	1,989,000	 	 	 	91,954	 	 	 	11,000	 
	Jonathan E. Fielding, TTEE
	 	 	2,983,500	 	 	 	137,931	 	 	 	16,500	 
	Kenneth F. Yontz and Harry V.
Carlson, Jr., TTEES
	 	 	1,491,750	 	 	 	68,966	 	 	 	8,250	 
	Richard Glenn Merrill and Mary
Kathleen Merrill TTEES
	 	 	497,250	 	 	 	22,989	 	 	 	2,750	 
	Allan Rudnick and Paula Rudnick,
TTES
	 	 	540,759	 	 	 	25,000	 	 	 	2,991	 
	Allan M. Rudnick Custodian for
Zoe B. Rudnick
	 	 	43,261	 	 	 	2,000	 	 	 	239	 
	Allan M. Rudnick Custodian for
Allison H. Rudnick
	 	 	43,261	 	 	 	2,000	 	 	 	239	 
	Larry Sheakley
	 	 	994,500	 	 	 	45,977	 	 	 	5,500	 
	William E. B. Siart
	 	 	298,350	 	 	 	13,793	 	 	 	1,650	 
	Dennis S. Beck
	 	 	994,500	 	 	 	45,977	 	 	 	5,500	 
	Tiger Veda, LP
	 	 	1,370,421	 	 	 	63,356	 	 	 	7,579	 
	Tiger Veda Global LP
	 	 	618,579	 	 	 	28,598	 	 	 	3,421	 
	Hartz Capital Investments, LLC
	 	 	2,983,500	 	 	 	137,931	 	 	 	16,500	 
	New Eagle Holdings LLC
	 	 	5,469,750	 	 	 	252,874	 	 	 	30,250	 
	The American Academy in Berlin
	 	 	497,250	 	 	 	22,989	 	 	 	2,750	 
	Eagle Income Appreciation
Partners L.P.
	 	 	4,276,350	 	 	 	197,701	 	 	 	23,650	 
	Eagle Income Appreciation II L.P.
	 	 	3,182,400	 	 	 	147,126	 	 	 	17,600	 
	Granite Growth 1234, LLC
	 	 	1,989,000	 	 	 	91,954	 	 	 	11,000	 
	Rian A. A. Dartnell
	 	 	994,500	 	 	 	45,977	 	 	 	5,500	 
	Becker Drapkin Partners (QP), LP
	 	 	1,706,562	 	 	 	78,897	 	 	 	9,438	 
	Becker Drapkin Partners, LP
	 	 	282,438	 	 	 	13,057	 	 	 	1,562	 
	The Northwestern Mutual Life
Insurance Company
	 	 	21,750,000	 	 	 	1,000,000	 	 	 	0	 





Schedule 2.1














 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Purchase	 	Purchased	 	Commitment
	Purchaser	 	Price*	 	Units	 	Fee**
	Broadhaven LLC
	 	 	652,500	 	 	 	30,000	 	 	 	0	 
	Thomas A. Harenburg Roth IRA
	 	 	528,525	 	 	 	24,300	 	 	 	0	 
	Bransford Living Trust
	 	 	1,000,000	 	 	 	45,977	 	 	 	0	 








 




			
	*	 	Purchase Price shown is net of Commitment Fee and assumes Closing Date is during the Commitment
Period.
	 
	**	 	Commitment Fee assumes Closing Date is during the Commitment Period.





Schedule 2.1




 









 








Schedule 7.6




Kayne Anderson MLP Fund, LP

Kayne Anderson Non-Traditional Investments, LP

Kayne Anderson Capital Income Partners (QP), LP

Kayne Anderson Midstream Institutional Fund, LP

KA-Sabes Investments, LLC

KA-Sabes Investments II, LLC




Address:

Kayne Anderson Capital Advisors, L.P.

1800 Avenue of the Stars, Second Floor

Los Angeles, CA 90067

Attention: David Shladovsky




Hallco, Inc.




Address:

Hallco Inc.

1726 Cedarwood

Minden, Nevada 89423

Attention: Arthur E. Hall, President




Aribo Investments, LLC




Address:

Heritage Group

1999 Avenue of the Stars, #2590

Los Angeles, California 90067

Attention: Robert Choi




Heritage Provider Network

3115 Ocean Front Walk, #301

Marina del Rey, CA 90292

Attention: Dr. Richard Merkin




The Lieberthal Trust dtd 3/23/99




Address:

Gary Lieberthal, TTEE

991 Bel Air Road

Bel Air, California 90077




Schedule 7.6










 









 








WHI Equity Managers Fund LLC




Address:

WHI Equity Managers Fund LLC

191 N. Wacker Drive

Suite 1500

Chicago, Illinois 60606

Attention: Michael Resnick




James J. Dunne III




Address:

Sandler O’Neill & Partners, LP

919 Third Avenue

6th Floor

New York, NY 10022

Attention: James J. Dunne III




Brener International Group, LLC




Address:

Brener International Group, LLC

421 North Beverly Drive

Suite 300

Beverly Hills, California 90210

Attention: Clive Fleissig, Chief Operating Officer




Mason Liquid Fund LLC




Address:

Mason Liquid Fund LLC

111 East Wacker Drive

Suite 2607

Chicago, Illinois 60601

Attention: Matthew Shapiro




Jonathan E. Fielding Living Trust dtd 12/21/93




Address:

Jonathan E. Fielding, TTEE

12735 Hanover Street

Los Angeles, California 90049




Schedule 7.6







 









 








Kenneth F. Yontz 1996 Trust dtd 12/18/96 as amended




Address:

Kenneth F. Yontz and Harry V. Carlson, Jr., TTEES

74-465 Quail Lakes Drive

Indian Wells, California 92210




Merrill Family Living Trust uad 3/1/95




Address:

Richard Glenn Merrill and Mary Kathleen Merrill, TTEES

256 West Stafford

Westlake Village, California 91361




Rudnick Living Trust dtd 7/22/91

Allan M. Rudnick, Custodian for Zoe B. Rudnick

Allan M. Rudnick, Custodian for Allison H. Rudnick




Address:

Allan M. Rudnick

9465 Wilshire Boulevard

Suite 400

Beverly Hills, California 90212




Larry Sheakley




Address:

The Sheakley Group

321 Broadway

Cincinnati, Ohio 45202

Attention: Tom Pappas




William E. B. Siart




Address:

William E. B. Siart

266 Toyopa Drive

Pacific Palisades, CA 90272




Dennis S. Beck




Address:

Beck Capital, LLC

345 N. Maple Drive, #280

Beverly Hills, California 90210

Attention: Dennis S. Beck




Schedule 7.6




 









 








Tiger Veda, LP

Tiger Veda Global LP




Address:

Tiger Veda Management, LLC

101 Park Avenue

New York, New York 10178

Attention: David Gleason, COO




Hartz Capital Investments, LLC




Address:

Hartz Capital, Inc.

400 Plaza Drive

Secaucus, New Jersey 07094

Attention: Noah Lerner




New Eagle Holdings LLC

The American Academy in Berlin




Address:

Arnhold & S. Bleischroeder Advisors

(First Eagle Investment Management)

1345 Avenue of the Americas

New York, New York 10105

Attention: Andrew Gundlach




Eagle Income Appreciation Partners L.P.

Eagle Income Appreciation II L.P.




Address:

Eagle Income Appreciation GP LLC

5847 San Felipe, Suite 930

Houston, TX 77057

Attention: Malcom Day




Schedule 7.6





 









 








Granite Growth 124, LLC




Addresses:

Granite Associates, L.P.

570 Lexington Avenue, 30th Floor

New York, New York 10022

Attention: Boris Raykin




Granite Associates, L.P.

570 Lexington Avenue, 30th Floor

New York, New York 10022

Attention: Rian Dartnell




Granite Associates, L.P.

One Cablevision Center

Liberty, New York 12754

Attention: Christopher Grillo




Rian A. A. Dartnell




Address:

Granite Associates, L.P.

570 Lexington Avenue, 30th Floor

New York, New York 10022

Attention: Rian Dartnell




Becker Drapkin Partners (QP), LP

Becker Drapkin Partners, LP




Address:

Becker Drapkin Partners (QP), LP

Becker Drapkin Partners, LP

300 Crescent Court, Suite 1111

Dallas, Texas 75201




Schedule 7.6




 









 








The Northwestern Mutual Life Insurance Company




Address:

The Northwestern Mutual Life Insurance Company

720 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

Attention: Sean Twohig




The Northwestern Mutual Life Insurance Company

720 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

Attention: Abim Kolawole




Broadhaven LLC




Address:

Broadhaven LLC

274 Riverside Avenue

3rd Floor

Westport, CT 06880

Attention: Jonathan Farber




Thomas A. Harenburg Roth IRA




Address:

Thomas A. Harenburg

6360 E. Decorah Ave.

Oshkosh, Wisconsin 54902




Bransford Living Trust




Address:

Bransford Living Trust

17682 Mitchell North #200

Irvine, California 92614

Attention: Walter Jackson Bransford, Trustee




Schedule 7.6