exv10w1






Exhibit 10.1




Execution Version




 

 








OMNIBUS AGREEMENT




among



PLAINS ALL AMERICAN GP LLC



PLAINS ALL AMERICAN PIPELINE, L.P.



PNGS GP LLC



and



PAA NATURAL GAS STORAGE, L.P.




 

 












 









 








OMNIBUS AGREEMENT




     THIS OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of, the Closing Date
(as defined herein), and is by and among Plains All American GP LLC, a Delaware limited liability
company (“PAA GP”), Plains All American Pipeline, L.P., a Delaware limited partnership (“PAA”),
PNGS GP LLC, a Delaware limited liability company (the “General Partner”) and PAA Natural Gas
Storage, L.P., a Delaware limited partnership (the “Partnership”). The above-named entities are
sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”



R E C I T A L S:




     1. The Parties desire by their execution of this Agreement to evidence their agreement, as
more fully set forth in Article II, with respect to certain indemnification obligations of the
Parties.



     2. The Parties desire by their execution of this Agreement to evidence their agreement, as
more fully set forth in Article III, with respect to the amount to be paid by the Partnership for
certain general and administrative services to be performed by PAA GP and its Affiliates as well as
direct expenses, including operating expenses, incurred by PAA GP and its Affiliates for and on
behalf of the Partnership Group (as defined herein) and other services to be provided among the
Parties.



     3. The Parties desire by their execution of this Agreement to evidence their agreement, as
more fully set forth in Article IV, with respect to the granting of a license from PAA to the
Partnership Group and the General Partner.



     In consideration of the premises and the covenants, conditions, and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:



ARTICLE I

Definitions




     1.1 Definitions




     As used in this Agreement, the following terms shall have the respective meanings set
forth below:




     “Affiliate” has the meaning given such term in the Partnership Agreement.




     “Agreement” means this Omnibus Agreement, as it may be amended, modified or
supplemented from time to time in accordance with the terms hereof.




     “Cause” has the meaning given such term in the Partnership Agreement.



 









 






     “Change of Control” means, for purposes of Section 5.4 with respect to the General
Partner or the Partnership, the point in time when neither PAA nor PAA GP remains directly
or indirectly in control of the General Partner or the Partnership. For purposes of this
definition, the term “control” means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the General Partner or the
Partnership, whether through the ownership of Voting Securities, by contract or otherwise.




     “Closing Date” means the date of the closing of the Partnership’s initial public
offering of Common Units.




     “Common Units” has the meaning given such term in the Partnership Agreement.




     “Conflicts Committee” has the meaning given such term in the Partnership Agreement.




     “Covered Environmental Losses” means all environmental and toxic tort losses, damages,
liabilities, injuries, claims, demands, causes of action, judgments, settlements, fines,
penalties, costs and expenses (including, without limitation, costs and expenses of any
Environmental Activity, court costs and reasonable attorney’s and experts’ fees) of any and
every kind or character, by reason of or arising out of:




     (i) any violation or correction of violation of Environmental Laws, including without
limitation performance of any Environmental Activity; or




     (ii) any event, omission or condition associated with ownership or operation of the
Partnership Assets (including, without limitation, the exposure to or presence of Hazardous
Substances on, under, about or migrating to or from the Partnership Assets or the exposure
to or Release of Hazardous Substances arising out of operation of the Partnership Assets)
including, without limitation, (A) the cost and expense of any Environmental Activities, (B)
the cost or expense of the preparation and implementation of any closure, remedial or
corrective action or other plans required or necessary under Environmental Laws and (C) the
cost and expense for any environmental or toxic tort pre-trial, trial or appellate legal or
litigation support work.




     “Environmental Activity” shall mean any investigation, study, assessment, evaluation,
sampling, testing, monitoring, containment, removal, disposal, closure, corrective action,
remediation (regardless of whether active or passive), natural attenuation, restoration,
bioremediation, response, repair, corrective measure, cleanup or abatement that is required
or necessary under any applicable Environmental Law, including, but not limited to,
institutional or engineering controls or participation in a governmental voluntary cleanup
program to conduct voluntary investigatory and remedial actions for the clean-up, removal or
remediation of Hazardous Substances that exceed actionable levels established pursuant to
Environmental Laws, or participation in a supplemental environmental project in partial or
whole mitigation of a fine or penalty.




     “Environmental Laws” means all federal, state, and local laws, statutes, rules,
regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental



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Permits and other legally enforceable requirements and rules of common law relating to
(a) pollution or protection of the environment or natural resources including, without
limitation, the federal Comprehensive Environmental Response, Compensation and Liability
Act, the Superfund Amendments and Reauthorization Act, the Resource Conservation and
Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Oil Pollution Act of 1990, the Hazardous Materials
Transportation Act, the Marine Mammal Protection Act, the Endangered Species Act, the
National Environmental Policy Act, the Occupational Safety and Health Act and other
environmental conservation and protection laws, each as amended through the Closing Date,
(b) any Release or threatened Release of, or any exposure of any Person or property to, any
Hazardous Substances and (c) the generation, manufacture, processing, distribution, use,
treatment, storage, transport or handling of any Hazardous Substances.




     “Environmental Permit” means any permit, approval, identification number, license,
registration, consent, exemption, variance or other authorization required under or issued
pursuant to any applicable Environmental Law.




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




     “General Partner” has the meaning given such term in the introduction to this
Agreement.




     “Hazardous Substance” means (a) any substance that is designated, defined or classified
as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or
hazardous substance, or terms of similar meaning, or that is otherwise regulated under any
Environmental Law, including, without limitation, any hazardous substance as defined under
the Comprehensive Environmental Response, Compensation and Liability Act, as amended, (b)
oil as defined in the Oil Pollution Act of 1990, as amended, including oil, gasoline,
natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel and other refined
petroleum hydrocarbons and petroleum products and (c) radioactive materials, asbestos
containing materials or polychlorinated biphenyls.




     “Indemnified Party” means each Partnership Group Member or PAA GP, as the case may be,
in their capacities as parties entitled to indemnification in accordance with Article II.




     “Indemnifying Party” means each of the Partnership or PAA, as the case may be, in their
capacity as the parties from whom indemnification may be required in accordance with Article
II.




     “Losses” means all losses, damages, liabilities, claims, demands, causes of action,
judgments, settlements, fines, penalties, costs and expenses (including, without limitation,
court costs and reasonable attorney’s and experts’ fees) of any and every kind or character.




     “PAA” has the meaning given such term in the introduction to this Agreement.



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     “PAA GP” has the meaning given such term in the introduction to this Agreement.




     “Partnership” has the meaning given such term in the introduction to this Agreement.




     “Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of PAA Natural Gas Storage, L.P., dated as of the Closing Date, as such
agreement is in effect on the Closing Date, to which reference is hereby made for all
purposes of this Agreement.




     “Partnership Assets” means the natural gas storage assets and associated infrastructure
(including the assets and equity interests to be contributed to the Partnership in
connection with its initial public offering and as more completely described in the
Registration Statement) conveyed, contributed or otherwise transferred, directly or through
the transfer of equity interests, or intended to be conveyed, contributed or otherwise
transferred to any Partnership Group Member in connection with the Partnership’s initial
public offering.




     “Partnership Entities” means the General Partner and each Partnership Group Member.




     “Partnership Group” means the Partnership and its Subsidiaries.




     “Partnership Group Member” means any member of the Partnership Group.




     “Partnership Indemnitee” means any Person who is an Indemnitee as defined in the
Partnership Agreement; provided, however, that for purposes of this definition, the term
“Indemnitee” shall exclude PAA GP and any Affiliate of PAA GP which is not a Partnership
Group Member.




     “Party” and “Parties” are defined in the introduction to this Agreement.




     “Person” means an individual or a corporation, limited liability company, partnership,
joint venture, trust, business trust, employee benefit plan, unincorporated organization,
association, government agency or political subdivision thereof or other entity.




     “Registration Statement” means the Registration Statement on Form S-1, as amended,
(Registration No. 333-164492) filed with the Securities and Exchange Commission with respect
to the proposed initial public offering of Common Units by the Partnership.




     “Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching,
dumping or disposing into the environment.




     “Subsidiary” has the meaning given such term in the Partnership Agreement.



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     “Units” has the meaning given such term in the Partnership Agreement.




     “Voting Securities” means securities of any class of a Person entitling the holders
thereof to vote in the election of, or to appoint, members of the board of directors or
other similar governing body of the Person.



ARTICLE II

Indemnification




     2.1 Environmental Indemnification.



          (a) Subject to the provisions of Section 2.3 and provided that the Indemnified Party notifies
the Indemnifying Party of such claim prior to the third anniversary of the Closing Date, PAA shall
indemnify, defend and hold harmless the Partnership Group and the Partnership Indemnitees from and
against any Covered Environmental Losses suffered or incurred by the Partnership Group or any
Partnership Indemnitee relating to the Partnership Assets, but only to the extent the violations,
corrections, events or conditions giving rise to such Covered Environmental Losses occurred or
existed on or before the Closing Date, even if such liability does not accrue until after the
Closing Date.




          (b) Subject to the provisions of Section 2.3, the Partnership Group shall indemnify, defend
and hold harmless PAA GP and its Affiliates, other than any Partnership Group Member, from and
against any Covered Environmental Losses suffered or incurred by PAA GP and its Affiliates, other
than any Partnership Group Member, relating to the Partnership Assets, but only to the extent the
violations, corrections, events or conditions giving rise to such Covered Environmental Losses
occurred after the Closing Date.




          (c) The aggregate liability of PAA under Section 2.1(a) shall not exceed $15 million.




          (d) No claims may be made against PAA for indemnification pursuant to Section 2.1(a) unless
and until, and PAA shall only be liable to provide indemnification pursuant to this Section 2.1(a)
to the extent that, the aggregate dollar amount of the Losses suffered or incurred by the
Partnership Group or Partnership Indemnitees exceed $250,000, subject to the limitations of Section
2.1(c).




          (e) Notwithstanding anything herein to the contrary, in no event shall PAA have any
indemnification obligations under this Agreement for claims made as a result of additions to or
modifications of Environmental Laws promulgated after the Closing Date.




     2.2 Additional Indemnification.



          (a) Subject to the provisions of Section 2.3, PAA shall indemnify, defend and hold harmless
the Partnership Group and the Partnership Indemnitees from and against any Losses suffered or
incurred by the Partnership Group or any Partnership Indemnitee resulting from of or arising out
of:







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          (i) the failure of the Partnership Group to be the owner of (A) valid and indefeasible
easement rights, leasehold and/or fee ownership interests in and to the lands on which are
located any Partnership Assets and (B) valid title to 100% of the equity interest of PAA
Natural Gas Storage, LLC, Bluewater Natural Gas Holding, LLC, Bluewater Gas Storage, LLC,
BGS Kimball Gas Storage LLC, Pine Prairie Holding LLC, Pine Prairie Energy Center, LLC and
PPEC Bondholder, LLC, in each case to the extent that such failure renders the Partnership
Group liable or unable to use or operate the Partnership Assets in substantially the same
manner that the Partnership Assets were used and operated by PAA and its Affiliates
immediately prior to the Closing Date as described in the Registration Statement;




          (ii) the failure of the Partnership Group to have on the Closing Date any consent or
governmental permit necessary to allow (A) the transfer of any of the Partnership Assets,
including the 100% interest in PAA Natural Gas Storage, LLC, Bluewater Natural Gas Holding,
LLC, Bluewater Gas Storage, LLC, BGS Kimball Gas Storage LLC, Pine Prairie Holding LLC, Pine
Prairie Energy Center, LLC and PPEC Bondholder, LLC, to the Partnership Group on the Closing
Date or (B) any such Partnership Assets to cross the roads, waterways, railroads and other
areas upon which any such Partnership Assets are located as of the Closing Date, in each
case to the extent any such failure renders the Partnership Group unable to use or operate
the Partnership Assets in substantially the same manner that the Partnership Assets were
owned and operated by PAA and its Affiliates immediately prior to the Closing Date as
described in the Registration Statement;




          (iii) all federal, state and local income tax liabilities attributable to the ownership
or operation of the Partnership Assets prior to the Closing Date, including (A) any such
income tax liabilities of the Partnership Group that may result from the consummation of the
formation transactions for the Partnership Group occurring on or prior to the Closing Date
and (B) any income tax liabilities arising under Treasury Regulation Section 1.1502-6 and
any similar provision from applicable state, local or foreign law, by contract, as
successor, transferree or otherwise and which income tax is attributable to having been a
member of any consolidated combined or unitary group prior to the Closing Date; and




          (iv) the assets or operations of PAA GP and its Affiliates (other than the Partnership
Assets and the operations of any Partnership Group Member).


provided, however, that, in the case of clauses (i), (ii) and (iv) above, the Indemnified Party
must notify the Indemnifying Party of such claim prior to the third anniversary of the Closing
Date, and that in the case of clause (iii) above, the Indemnified Party must notify the
Indemnifying Party of such claim prior to the sixtieth day following the expiration of any
applicable statute of limitations;




          (b) Subject to the provisions of Section 2.3, in addition to and not in limitation of the
indemnification provided under this Article II, the Partnership Group shall indemnify, defend, and
hold harmless PAA and its Affiliates, other than any Partnership Group Member, from and against any
Losses suffered or incurred by PAA and its Affiliates, other than any






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Partnership Group Member, by reason of or arising out of events and conditions associated with
the operation of the Partnership Assets that occurs on or after the Closing Date (other than
Covered Environmental Losses, which are covered by Section 2.1) except to the extent that the
Partnership Group is indemnified with respect to any such Losses under Section 2.2(a).




          (c) Notwithstanding anything herein to the contrary, in no event will PAA be obligated to
indemnify the Partnership Group for any claims, losses or expenses or income taxes referred to in
Section 2.1(a) and Sections 2.2 (a)(i)-(iv), if, and to the extent that such claims, losses, or
expenses, or income taxes were either (i) reserved for in the Partnership’s financial statements as
of the Closing Date, or (ii) are recovered under available insurance coverage, from contractual
rights or other recoveries against any third party.




     2.3 Indemnification Procedures.



          (a) The Indemnified Party agrees that within a reasonable period of time after it becomes
aware of facts giving rise to a claim for indemnification pursuant to this Article II, it will
provide notice thereof in writing to the Indemnifying Party specifying the nature of and specific
basis for such claim; provided, however, that the Indemnified Party shall not submit claims more
frequently than once a calendar quarter (or twice in the case of the last calendar quarter prior to
the expiration of the applicable indemnity coverage under this Agreement). Notwithstanding the
foregoing, the Indemnified Party’s failure to provide notice under this Section 2.3 will not
relieve the Indemnifying Party from liability hereunder with respect to such matter except in the
event and only to the extent that the Indemnifying Party is materially prejudiced by such failure
or delay or the Indemnifying Party does not receive notice of the claim prior to the applicable
deadline for making such claim.




          (b) The Indemnifying Party shall have the right to control all aspects of the defense of (and
any counterclaims with respect to) any claims brought against the Indemnified Party that are
covered by the indemnification set forth in this Article II, including, without limitation, the
selection of counsel (provided that if such claim involves Covered Environmental Losses, such
counsel shall be reasonably acceptable to the Indemnified Party), determination of whether to
appeal any decision of any court or similar authority, performance of any Environmental Activity
associated with any Covered Environmental Losses and the settling of any matter or any issues
relating thereto; provided , however , that no such settlement shall be entered into without the
consent (which consent shall not be unreasonably withheld, conditioned or delayed) of the
Indemnified Party unless it includes a full release of the Indemnified Party from such matter or
issues, as the case may be.




          (c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party with respect
to all aspects of the defense of any claims covered by the indemnification set forth in this
Article II, including, without limitation, the prompt furnishing to the Indemnifying Party of any
correspondence or other notice relating thereto that the Indemnified Party may receive, permitting
the names of the Indemnified Party to be utilized in connection with such defense, the making
available to the Indemnifying Party of any files, records or other information of the Indemnified
Party that the Indemnifying Party considers relevant to such defense and the making available to
the Indemnifying Party of any employees of the Indemnified Party; provided, however, that in
connection therewith the Indemnifying Party agrees to use reasonable






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efforts to minimize the impact thereof on the operations of the Indemnified Party and further
agrees to maintain the confidentiality of all files, records and other information furnished by the
Indemnified Party pursuant to this Section 2.3. In no event shall the obligation of the Indemnified
Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence
be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in
connection with the defense of any claims covered by the indemnification set forth in this Article
II; provided, however, that the Indemnified Party may, at its own option, cost and expense, hire
and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any
such counsel hired by the Indemnified Party reasonably informed as to the status of any such
defense, but the Indemnifying Party shall have the right to retain sole control over such defense.




          (d) In determining the amount of any loss, cost, damage or expense for which the Indemnified
Party is entitled to indemnification under this Agreement, the gross amount of the indemnification
will be reduced by (i) any insurance proceeds realized by the Indemnified Party, and such
correlative insurance benefit shall be net of any incremental insurance premium that becomes due
and payable by the Indemnified Party as a result of such claim, (ii) all amounts recovered by the
Indemnified Party under contractual indemnities from third Persons and (iii) any correlative tax
benefit.




          (e) NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL ANY PARTY’S
INDEMNIFICATION OBLIGATION HEREUNDER COVER OR INCLUDE CONSEQUENTIAL, INDIRECT, INCIDENTAL,
PUNITIVE, EXEMPLARY, SPECIAL OR SIMILAR DAMAGES OR LOST PROFITS SUFFERED BY ANY OTHER PARTY
ENTITLED TO INDEMNIFICATION UNDER THIS AGREEMENT.




ARTICLE III

Provision of Services; Reimbursement




     3.1 Agreement to Provide Services. Until such time as this Agreement is terminated as
provided in Section 5.4, PAA GP hereby agrees to provide the Partnership Group with such general
and administrative services and management and operating services as may be necessary to manage and
operate the business and affairs of the Partnership, including, without limitation, accounting,
audit, business development, financial services, real property/land, legal, operations/engineering,
geology/geophysics, investor relations, risk management, commercial/marketing, information
technology, insurance, government relations/compliance, tax, payroll, human resources and
environmental, health and safety (collectively, “Services”). The Services shall be consistent in
nature and quality to the services of such type previously provided by PAA GP in connection with
its management and operation of the Partnership Assets prior to their acquisition by the
Partnership.



     3.2 Reimbursement. Subject to and in accordance with the terms and provisions of this Article
III and such reasonable allocation and other procedures as may be agreed upon by PAA GP and the
General Partner from time to time, the Partnership Group hereby agrees to reimburse PAA GP for all
reasonable direct and indirect costs and expenses incurred by PAA GP or its Affiliates in
connection with the provision of the Services to the Partnership Group, including, without
limitation, the following:



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          (a) any expenses incurred or payments made by PAA GP for insurance coverage with respect to
the Partnership Assets or the business of the Partnership Group;




          (b) any costs incurred in connection with the provision of information technology services;




          (c) salaries and related benefits and expenses of personnel employed by PAA GP or its
Affiliates (other than the Partnership Group) who render Services to the Partnership Group, plus
general and administrative expenses associated with such personnel; it being agreed, however, that
for purposes of allocating costs associated with executive or senior level management of PAA, such
allocation shall not include any costs attributable to incentive compensation arrangements that are
unrelated to the operations of the General Partner or the Partnership;




          (d) any capital expenditures, maintenance and repair costs, taxes or other direct expenses
paid by PAA GP or its Affiliates for the benefit of the Partnership Group; and




          (e) all expenses and expenditures incurred by PAA GP or its Affiliates as a result of the
Partnership becoming and continuing as a publicly traded entity, including, but not limited to,
costs associated with annual and quarterly reports, tax return and Schedule K-1 preparation and
distribution, independent auditor fees, partnership governance and compliance, registrar and
transfer agent fees, legal fees and independent director compensation.



it being agreed, however, that to the extent any reimbursable costs or expenses incurred by PAA GP
or its Affiliates consist of an allocated portion of costs and expenses incurred by PAA GP or its
Affiliates for the benefit of both the Partnership Group and the other Affiliates of PAA, such
allocation shall be made on a reasonable cost reimbursement basis as determined by PAA GP.




     3.3 Services Provided by Partnership Group. To the extent necessary in connection with any
gas storage or other assets that are owned or operated by PAA and its Affiliates (other than the
Partnership Group) following the Closing Date, upon request from PAA, the General Partner shall
provide such requested management and operating services to PAA on a reasonable cost reimbursement
basis, including any applicable taxes.



     3.4 Provision by PAA of Limited Guaranty/Trade Credit Support. PAA may from time to time, but
shall not be obligated to, provide the Partnership Group with guaranty or trade credit support as
requested by the General Partner to support the ongoing operations of the Partnership Group; it
being understood and agreed that (a) any such guaranties or credit support provided by PAA shall be
limited to ordinary course obligations of the Partnership Group and shall not extend to
indebtedness for borrowed money or other obligations that could be characterized as debt, (b) PAA
shall be under no obligation to provide any such guaranty or credit support and may refuse to do so
for any reason and (c) upon the receipt by PAA of a request for guaranty or credit support from the
General Partner, PAA GP and the General Partner shall promptly meet to discuss such request and, if
applicable, negotiate and agree upon the terms under which such guaranty or credit support will be
provided by PAA.



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ARTICLE IV

License of Name and Mark




     4.1 Grant of License. Upon the terms and conditions set forth in this Article IV, PAA hereby
grants and conveys to each of the entities currently or hereafter comprising a part of the
Partnership Group a nontransferable, nonexclusive, royalty free right and license (“License”) to
use the name “PAA” (the “Name”) and any associated or related marks (the “Mark”).



     4.2 Ownership and Quality. The Partnership agrees that ownership of the Name and the Mark and
the goodwill relating thereto shall remain vested in PAA both during the term of this License and
thereafter, and the Partnership further agrees, and agrees to cause the other members of the
Partnership Group, never to challenge, contest or question the validity of PAA’s ownership of the
Name and Mark or any registration thereto by PAA. In connection with the use of the Name and the
Mark, the Partnership and any other member of the Partnership Group shall not in any manner
represent that they have any ownership in the Name and the Mark or registration thereof except as
set forth herein, and the Partnership, on behalf of itself and the other members of the Partnership
Group, acknowledge that the use of the Name and the Mark shall not create any right, title or
interest in or to the Name and the Mark, and all use of the Name and the Mark by the Partnership or
any other member of the Partnership Group, shall inure to the benefit of PAA. The Partnership
agrees, and agrees to cause the other members of the Partnership Group, to use the Name and Marks
in accordance with such quality standards established by PAA and communicated to the Partnership
from time to time, it being understood that the products and services offered by the members of the
Partnership Group immediately before the Closing Date are of a quality that is acceptable to PAA
and justifies the License.



     4.3 Termination. The License shall terminate upon a termination of this Agreement pursuant to
Section 5.4.



ARTICLE V

Miscellaneous




     5.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and
governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that
might refer the construction or interpretation of this Agreement to the laws of another state.
Each Party hereby submits to the jurisdiction of the state and federal courts in the State of Texas
and to venue in Houston, Texas.



     5.2 Notice. All notices or requests or consents provided for by, or permitted to be given
pursuant to, this Agreement must be in writing and must be given by depositing same in the United
States mail, addressed to the Person to be notified, postpaid, and registered or certified with
return receipt requested or by delivering such notice in person or by telecopier or telegram to
such Party. Notice given by personal delivery or mail shall be effective upon actual receipt.
Notice given by telegram or telecopier shall be effective upon actual receipt if received during
the recipient’s normal business hours or at the beginning of the recipient’s next business day
after receipt if not received during the recipient’s normal business hours. All notices to be sent
to a Party pursuant to this Agreement shall be sent to or made at the address set forth below or at
such other address as such Party may stipulate to the other Parties in the manner provided in this
Section 5.2.


For notice to PAA GP:







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Plains All American GP LLC

333 Clay Street, Suite 1600

Houston, Texas 77002

Attention: General Counsel

Fax: (713) 646-4313



For notice to the Partnership Entities:



PAA Natural Gas Storage, L.P.

333 Clay Street, Suite 1500

Houston, Texas 77002

Attention: Vice President — Legal

Fax: (713) 652-3700




     5.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating
to the matters contained herein, superseding all prior contracts or agreements, whether oral or
written, relating to the matters contained herein. In the event of a conflict between the
provisions of this Agreement and the provisions of the Partnership Agreement, the provisions of the
Partnership Agreement shall control.



     5.4 Termination. Notwithstanding any other provision of this Agreement, if (i) the General
Partner is removed as general partner of the Partnership under circumstances where Cause does not
exist and the Common Units held by the General Partner and its Affiliates are not voted in favor of
such removal or (ii) a Change of Control occurs, then this Agreement, other than the provisions set
forth in Article II hereof, may immediately thereupon be terminated by PAA.



     5.5 Effect of Waiver or Consent. No waiver or consent, express or implied, by any Party to or
of any breach or default by any Person in the performance by such Person of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or
default in the performance by such Person of the same or any other obligations of such Person
hereunder. Failure on the part of a Party to complain of any act of any Person or to declare any
Person in default, irrespective of how long such failure continues, shall not constitute a waiver
by such Party of its rights hereunder until the applicable statute of limitations period has run.



     5.6 Amendment or Modification. This Agreement may be amended or modified from time to time
only by the written agreement of all the Parties; provided, however, that the Partnership may not,
without the prior approval of the Conflicts Committee, agree to any amendment or modification of
this Agreement that, in the reasonable discretion of the General Partner, would be adverse in any
material respect to the holders of Common Units. Each such instrument shall be reduced to writing
and shall be designated on its face an “Amendment” or an “Addendum” to this Agreement.



     5.7 Assignment; Third-Party Beneficiaries. No Party shall have the right to assign any of its
rights or obligations under this Agreement without the consent of the other Parties



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hereto. Each of the Parties hereto specifically intends that PAA GP and each entity
comprising the Partnership Entities, as applicable, whether or not a Party to this Agreement, shall
be entitled to assert rights and remedies hereunder as third-party beneficiaries hereto with
respect to those provisions of this Agreement affording a right, benefit or privilege to any such
entity. This Agreement does not create any rights or benefits for any entity or individual.




     5.8 Successors. This Agreement shall bind and inure to the benefit of the Parties and to
their respective successors and assigns.



     5.9 Continuation of Work During Dispute. Notwithstanding any dispute, it shall be the
responsibility of each Party to continue to perform its obligations under this Agreement pending
resolution of the dispute.



     5.10 Counterparts. This Agreement may be executed in any number of
counterparts, including facsimile 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.



     5.11 Severability. If any provision of this Agreement or the application thereof to any
Person or circumstance shall be held invalid or unenforceable by a court or regulatory body of
competent jurisdiction, the remainder of this Agreement and the application of such provision to
other Persons or circumstances shall not be affected thereby and shall be enforced to the greatest
extent permitted by law.



     5.12 Gender, Parts, Articles and Sections. Whenever the context requires, the gender of all
words used in this Agreement shall include the masculine, feminine and neuter, and the number of
all words shall include the singular and plural. All references to Article numbers and Section
numbers refer to Articles and Sections of this Agreement.



     5.13 Further Assurances. In connection with this Agreement and all transactions contemplated
by this Agreement, each Party agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as may be necessary or appropriate to effectuate,
carry out and perform all of the terms, provisions and conditions of this Agreement and all such
transactions.



     5.14 Withholding or Granting of Consent. Unless otherwise provided herein, each Party may,
with respect to any consent or approval that it is entitled to grant pursuant to this Agreement,
grant or withhold such consent or approval in its sole and uncontrolled discretion, with or without
cause, and subject to such conditions as it shall deem appropriate.



     5.15 Laws and Regulations. Notwithstanding any provision of this Agreement to the contrary,
no Party shall take any act, or fail to take any act, under this Agreement which would violate any
applicable law, statute, rule or regulation.



     5.16 Negation of Rights of Limited Partners,
Assignees and Third Parties. Except as set forth in Section 5.7, the provisions of this Agreement
are enforceable solely by the Parties, and no stockholder, limited partner, member or assignee of
PAA GP, the Partnership or other Person shall have the right, separate and apart from PAA GP or the Partnership, to enforce any
provision of this Agreement or to compel any Party to comply with the terms of this Agreement.



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     5.17 No Recourse Against Officers or Directors. For the avoidance of doubt, the provisions of
this Agreement shall not give rise to any right of recourse against any officer or director of PAA
GP, PAA, the General Partner, the Partnership or any entity comprising a part of the Partnership
Group.



     5.18 Legal Compliance.



     The Parties acknowledge and agree that this Agreement, and all services provided under this
Agreement, are intended to comply with any and all laws and legal obligations and that this
Agreement should be construed and interpreted with this purpose in mind. In this regard, the
Parties specifically agree as follows:




          (a) The Parties will comply with all equal employment opportunity requirements and
other applicable employment laws. Where a joint or combined action is required by the law
in order to comply with an employment obligation, the parties will cooperate fully and in
good faith to comply with the applicable obligation.




          (b) The Parties agree that they will adhere to the Fair Labor Standards Act of 1938, as
amended, any comparable state law and any law regulating the payment of wages or
compensation.



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     IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the
Closing Date.



	 	 	 	 	 
	 	PLAINS ALL AMERICAN GP LLC

 	 
	 	By:  	/s/ Tim Moore
 	 
	 	 	Name:  	Tim Moore 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 

	 

	 	PLAINS ALL AMERICAN PIPELINE, L.P.
	 
	 	 
	 

	 	By:  PAA GP LLC, its general partner
	 
	 	 
	 

	 	By:   Plains AAP, L.P., its sole member
	 
	 	 
	 

	 	By:   Plains All American GP LLC, its
general partner






	 	 	 	 	 
	 	 	 
	 	By:  	                  /s/ Tim Moore
 	 
	 	 	Name:  	Tim Moore 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	PNGS GP LLC

 	 
	 	By:  	/s/ Al Swanson
 	 
	 	 	Name:  	Al Swanson 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 



	 	 	 

	 

	 	PAA NATURAL GAS STORAGE, L.P.
	 
	 	 
	 

	 	By:  PNGS GP LLC, its general partner






	 	 	 	 	 
	 	 	 
	 	By:  	                   /s/ Al Swanson
 	 
	 	 	Name:  	Al Swanson 	 
	 	 	Title:  	Senior Vice President and Chief Financial
Officer 	 
	 



[Signature Page to the Omnibus Agreement]