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Exhibit 4.1    
    

 
 

REGISTRATION RIGHTS AGREEMENT
  
    by and among
  
    PLAINS ALL AMERICAN PIPELINE, L.P.,
  
    KAYNE ANDERSON ENERGY FUND II, L.P.,
  
    KAFU HOLDINGS, L.P.,
  
    KAYNE ANDERSON
CAPITAL INCOME PARTNERS (QP), L.P.,
  
    KAYNE ANDERSON MLP FUND, L.P.,
  
    TORTOISE ENERGY INFRASTRUCTURE CORPORATION,
  
    and
  
    VULCAN ENERGY II INC.    

 
 
 

REGISTRATION RIGHTS AGREEMENT    
    

        THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of April 15, 2004, by and
among PLAINS ALL AMERICAN PIPELINE, L.P., a Delaware limited partnership ("PAA") and each of KAYNE ANDERSON ENERGY FUND II, L.P., KAFU HOLDINGS, L.P.,
KAYNE ANDERSON CAPITAL INCOME PARTNERS (QP), L.P., and KAYNE ANDERSON MLP FUND, L.P. (for this Agreement only, collectively, "Kayne Anderson"), TORTOISE
ENERGY INFRASTRUCTURE CORPORATION, a Maryland corporation ("Tortoise"), and VULCAN ENERGY II INC., a Delaware corporation
("Vulcan") (each of Kayne Anderson, Tortoise and Vulcan a "Purchaser" and collectively, the
"Purchasers"). 

        This
Agreement is made in connection with the Closing of the issuance and sale of the Class C Units pursuant to the Class C Common Unit Purchase Agreement, dated as of
March 31, 2004, by and among PAA and the Purchasers (the "Purchase Agreement"). PAA has agreed to provide the registration and other rights set
forth in this Agreement for the benefit of the Purchasers of the Class C Units pursuant to Section 2.05(d) of the Purchase Agreement. In consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party hereto, the parties hereby agree as follows: 

 
 

ARTICLE I.
  DEFINITIONS    
    

        Section 1.01    Definitions.    Capitalized terms used herein without definition shall have the meanings given
to them in the Purchase Agreement. The terms set forth below are used herein as so defined: 

        "Affiliate" means, with respect to a specified Person, any other Person, 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. 

        "Business Day" means any day other than a Saturday, Sunday, or a legal holiday for commercial banks in Wilmington, Delaware. 

        "Class C Units" shall have the meaning set forth in the Purchase Agreement. 

        "Closing" shall have the meaning set forth in the Purchase Agreement. 

        "Commission" means the United States Securities and Exchange Commission. 

        "Common Units" means the common units of PAA that are publicly traded on the New York Stock Exchange. 

        "Conversion Units" means the Common Units issuable upon conversion of the Class C Units. 

        "Effectiveness Period" has the meaning specified therefore in Section 2.01(a) of this Agreement. 

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated
thereunder. 

        "Holder" means the record holder of any Registrable Securities. 

        "Included Registrable Securities" has the meaning specified therefor in Section 2.02(a) of this Agreement. 

        "Losses" has the meaning specified therefor in Section 2.08(a) of this Agreement. 

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        "Managing Underwriter" means, with respect to any Underwritten Offering, the book running lead manager of such Underwritten Offering. 

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

        "Piggyback Registration" has the meaning specified therefor in Section 2.02(a) of this Agreement. 

        "Purchase Agreement" has the meaning specified therefor in the Recital of this Agreement. 

        "Purchased Units" shall have the meaning set forth in the Purchase Agreement. 

        "Purchasers" has the meaning specified therefor in the introductory paragraph of this Agreement. 

        "Registrable Securities" means the Conversion Units until such time as such securities cease to be Registrable Securities pursuant to
Section 1.02 hereof. 

        "Registration Expenses" has the meaning specified therefor in Section 2.07(a) of this Agreement. 

        "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. 

        "Selling Expenses" has the meaning specified therefor in Section 2.07(a) of this Agreement. 

        "Selling Holder" means a Holder who is selling Registrable Securities pursuant to a registration statement. 

        "Shelf Registration" has the meaning specified therefor in Section 2.01(a) of this Agreement. 

        "Shelf Registration Statement" has the meaning specified therefor in Section 2.01(a) of this Agreement. 

        "Underwritten Offering" means an offering (including an offering pursuant to a Shelf Registration Statement) in which Common Units are
sold to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a "bought deal" with one or more investment banks. 

        Section 1.02    Registrable Securities.    Any Registrable Security will cease to be a Registrable Security
when (a) a registration statement covering such Registrable Security has been declared effective by the Commission and such Registrable Security has been sold or disposed of pursuant to such
effective registration statement; (b) such Registrable Security has been disposed of pursuant to any section of Rule 144 (or any similar provision then in force under the Securities
Act); or (c) such Registrable Security is held by PAA or one of its subsidiaries. 

 
 

ARTICLE II.
  REGISTRATION RIGHTS    
    

        Section 2.01    Shelf Registration.    

        (a)   Shelf Registration. As soon as practicable following the Closing of the purchase of the Class C Units pursuant to
the terms of the Purchase Agreement, but in any event within 180 days of the Closing, PAA shall prepare and file a registration statement under the Securities Act to permit the public
resale of the Registrable Securities from time to time as permitted by Rule 415 of the Securities Act (the "Shelf Registration Statement"). PAA
shall use its commercially reasonable efforts to cause the Shelf Registration Statement to become effective no later than 240 days after the date of the Closing (the
"Shelf Registration"). A Shelf Registration Statement filed pursuant to this Section 2.01(a) shall be on such appropriate registration form of
the Commission as shall be selected by PAA; provided, however, that if a prospectus supplement will be
used in connection with the marketing of an Underwritten Offering from the Shelf Registration Statement and the 

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Managing
Underwriter at any time shall notify PAA in writing that, in the sole judgment of such Managing Underwriter, inclusion of detailed information to be used in such prospectus supplement is of
material importance to the success of the Underwritten Offering of such Registrable Securities, PAA shall use its commercially reasonable efforts to include such information in the prospectus. PAA
will cause the Shelf Registration Statement filed pursuant to this Section 2.01(a) to be continuously effective under the Securities Act until all Registrable Securities covered by the Shelf
Registration Statement have been distributed in the manner set forth and as contemplated in the Shelf Registration Statement or there are no longer any Registrable Securities outstanding (the
"Effectiveness Period"). The Shelf Registration Statement when declared effective (including the documents incorporated therein by reference) will
comply as to form with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading. 

        (b)   Delay Rights. Notwithstanding anything to the contrary contained herein, PAA may, upon written notice to any Selling
Holder whose Registrable Securities are included in the Shelf Registration Statement, suspend such Selling Holder's use of any prospectus which is a part of the Shelf Registration Statement (in which
event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to the Shelf Registration Statement) if (i) PAA is pursuing an acquisition, merger, reorganization,
disposition or other similar transaction and PAA determines in good faith that PAA's ability to pursue or consummate such a transaction would be materially adversely affected by any required
disclosure of such transaction in the Shelf Registration Statement or (ii) PAA has experienced some other material non-public event the disclosure of which at such time, in the good
faith judgment of PAA, would materially adversely affect PAA. Upon disclosure of such information or the termination of the condition described above, PAA shall provide prompt notice to the Selling
Holders whose Registrable Securities are included in the Shelf Registration Statement, and shall promptly terminate any suspension of sales it has put into effect and shall take such other actions to
permit registered sales of Registrable Securities as contemplated in this Agreement. 

        Section 2.02    Piggyback Registration.    

        (a)   Participation. If PAA at any time proposes to file a prospectus supplement to an effective shelf registration
statement with respect to an Underwritten Offering of Common Units for its own account or to register any Common Units for its own account for sale to the public in an Underwritten Offering other than
(x) a registration relating solely to employee benefit plans, (y) a registration relating solely to a Rule 145 transaction, or (z) a registration on any registration form
which does not permit secondary sales or does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable
Securities), then, as soon as practicable following the engagement of counsel to PAA to prepare the documents to be used in connection with an Underwritten Offering, PAA shall give notice of such
proposed Underwritten Offering to the Holders and such notice shall offer the Holders the opportunity to include in such Underwritten Offering such number of Registrable Securities as each such Holder
may request in writing (a "Piggyback Registration"); provided, however, that PAA shall not be required to offer such opportunity to Holders if PAA has
been advised by the Managing Underwriter that the inclusion of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on the price, timing or distribution of the
Common Units. Subject to Section 2.02(b), PAA shall include in such Underwritten Offering all such Registrable Securities ("Included Registrable
Securities") with respect to which PAA has received requests within three hours after PAA's notice has been delivered in accordance with Section 3.01. If no request for
inclusion from a Holder is received within the specified time, such Holder shall have no further right to participate in such Piggyback Registration. If, at any time after giving written notice of its
intention to undertake an Underwritten Offering and prior to the closing of such Underwritten 

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Offering,
PAA shall determine for any reason not to undertake or to delay such Underwritten Offering, PAA may, at its election, give written notice of such determination to the Selling Holders and,
(x) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such
terminated Underwritten Offering, and (y) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for the
same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holder's request for inclusion of such Selling Holder's Registrable Securities
in such offering by giving written notice to PAA of such withdrawal up to and including the time of pricing of such offering. 

        (b)   Priority of Piggyback Registration. If the Managing Underwriter or Underwriters of any proposed Underwritten Offering of
Common Units included in a Piggyback Registration advises PAA that the total amount of Common Units which the Selling Holders and any other Persons intend to include in such offering exceeds the
number which can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Units offered or the market for the Common Units, then the
Common Units to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter or Underwriters advises PAA can be sold without having such
adverse effect, with such number to be allocated pro rata among the Selling Holders who have requested participation in the Piggyback Registration
(based, for each such Selling Holder, on the percentage derived by dividing (A) the number of Registrable Securities proposed to be sold by such Selling Holder in such offering; by
(B) the aggregate number of Common Units proposed to be sold by the Selling Holders and any other Persons participating in the Piggyback Registration to be included in such offering). 

        (c)   Termination of Piggyback Registration Rights. The Piggyback Registration rights granted pursuant to this
Section 2.02 shall terminate two years following the date on which the last of the Purchased Units is converted to Common Units pursuant to the terms hereof. 

        Section 2.03    Underwritten Offering.    

        (a)   Shelf Registration. In the event that a Selling Holder elects to dispose of Registrable Securities under the Shelf
Registration Statement pursuant to an Underwritten Offering, PAA shall enter into an underwriting agreement in customary form with the Managing Underwriter or Underwriters, which shall include, among
other provisions, indemnities to the effect and to the extent provided in Section 2.08, and shall take all such other reasonable actions as are requested by the Managing Underwriter in order to
expedite or facilitate the registration and disposition of the Registered Securities; provided, however,
the participation of PAA management in connection with an Underwritten Offering for the benefit of Selling Holders shall consist of not more than sixteen hours of teleconferences for the benefit of
each Purchaser annually; and provided further, that these marketing obligations are not transferable to any other Holders other than Affiliates of the Purchasers, notwithstanding the provisions of
Section 2.10 hereof. 

        (b)   General Procedures. In connection with any Underwritten Offering under this Agreement, PAA shall be entitled to select
the Managing Underwriter or Underwriters. In connection with an Underwritten Offering under Section 2.01 or 2.02 hereof, each Selling Holder and PAA shall be obligated to enter into an
underwriting agreement which contains such representations, covenants, indemnities and other rights and obligations as are customary in underwriting agreements for firm commitment offerings of
securities. No Selling Holder may participate in such Underwritten Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement
and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement. Each Selling Holder may, at its
option, require that any or all of the representations 

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and
warranties by, and the other agreements on the part of, PAA to and for the benefit of such underwriters also be made to and for such Selling Holder's benefit and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting agreement also be conditions precedent to its obligations. No Selling Holder shall be required to make any representations or
warranties to or agreements with PAA or the underwriters other than representations, warranties or agreements regarding such Selling Holder and its ownership of the securities being registered on its
behalf and its intended method of distribution and any other representation required by law. If any Selling Holder disapproves of the terms of an underwriting, such Selling Holder may elect to
withdraw therefrom by notice to PAA and the Managing Underwriter; provided, however, that such
withdrawal must be made prior to the time in the final sentence of Section 2.02(a) hereof to be effective. No such withdrawal or abandonment shall affect PAA's obligation to pay Registration
Expenses. 

        Section 2.04    Registration Procedures.    In connection with its obligations contained in Sections 2.01 and
2.02, PAA will, as expeditiously as possible: 

        (a)   prepare
and file with the Commission such amendments and supplements to the Shelf Registration Statement and the prospectus used in connection therewith as may be
necessary to keep the Shelf Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of
all securities covered by the Shelf Registration Statement; 

        (b)   furnish
to each Selling Holder (i) as far in advance as reasonably practicable before filing the Shelf Registration Statement or any other registration statement
contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each
document incorporated by reference therein to the extent then required by the rules and regulations of the Commission), and provide each such Selling Holder the opportunity to object to any
information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such
information prior to filing the Shelf Registration Statement or such other registration statement or supplement or amendment thereto, and (ii) such number of copies of the Shelf Registration
Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Persons may reasonably request in order to facilitate the public
sale or other disposition of the Registrable Securities covered by such Shelf Registration Statement or other registration statement; 

        (c)   if
applicable, use its commercially reasonable efforts to register or qualify the Registrable Securities covered by the Shelf Registration Statement or any other
registration statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing
Underwriter, shall reasonably request, provided that PAA will not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any
action which would subject it to general service of process in any such jurisdiction where it is not then so subject; 

        (d)   promptly
notify each Selling Holder and each underwriter, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of
(i) the filing of the Shelf Registration Statement or any other registration statement contemplated by this Agreement or any prospectus or prospectus supplement to be used in connection
therewith, or any amendment or supplement thereto, and, with respect to such Shelf Registration Statement or any other registration statement or any post-effective amendment thereto, when
the same has become effective; and (ii) any written comments from the Commission with respect to any filing referred to in clause (i) and any written request by the Commission for
amendments or supplements to the 

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Shelf
Registration Statement or any other registration statement or any prospectus or prospectus supplement thereto; 

        (e)   immediately
notify each Selling Holder and each underwriter, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of
(i) the happening of any event as a result of which the prospectus or prospectus supplement contained in the Shelf Registration Statement or any other registration statement contemplated by
this Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; (ii) the issuance or threat of issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration
Statement or any other registration statement contemplated by this Agreement, or the initiation of any proceedings for that purpose; or (iii) the receipt by PAA of any notification with respect
to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. Following the provision of such notice, PAA agrees
to as promptly as practicable amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing
and to take such other action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto; 

        (f)    furnish
to each Selling Holder copies of any and all transmittal letters or other correspondence with the Commission or any other governmental agency or
self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering of Registrable Securities; 

        (g)   in
the case of an Underwritten Offering, furnish upon request, (i) an opinion of counsel for PAA, dated the effective date of the applicable registration
statement or the date of any amendment or supplement thereto, and a letter of like kind dated the date of the closing under the underwriting agreement, and (ii) a "cold comfort" letter, dated
the effective date of the applicable registration statement or the date of any amendment or supplement thereto and a letter of like kind dated the date of the closing under the underwriting agreement,
in each case, signed by the independent public accountants who have certified PAA's financial statements included or incorporated by reference into the applicable registration statement, and each of
the opinion and the "cold comfort" letter shall be in customary form and covering substantially the same matters with respect to such registration statement (and the prospectus and any prospectus
supplement included therein) and as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to the underwriters in Underwritten Offerings of securities, such
other matters as such underwriters may reasonably request; 

        (h)   otherwise
use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at least 12 months, but not more than 18 months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder; 

        (i)    make
available to the appropriate representatives of the Managing Underwriter and Selling Holders access to such information and PAA personnel as is reasonable and
customary to enable such parties to establish a due diligence defense under the Securities Act; provided that PAA need not disclose any information to any such representative unless and until such
representative has entered into a confidentiality agreement with PAA; 

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        (j)    cause
all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which
similar securities issued by PAA are then listed; 

        (k)   use
its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may
be necessary by virtue of the business and operations of PAA to enable the Selling Holders to consummate the disposition of such Registrable Securities; 

        (l)    provide
a transfer agent and registrar for all Registrable Securities covered by such registration statement not later than the effective date of such registration
statement; and 

        (m)  enter
into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters, if any, in order to expedite or
facilitate the disposition of such Registrable Securities. 

        Each
Selling Holder, upon receipt of notice from PAA of the happening of any event of the kind described in subsection (e) of this Section 2.04, shall forthwith discontinue
disposition of the Registrable Securities until such Selling Holder's receipt of the copies of the supplemented or amended prospectus contemplated by subsection (e) of this Section 2.04
or until it is advised in writing by PAA that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings incorporated by reference in the prospectus,
and, if so directed by PAA, such Selling Holder will, or will request the managing underwriter or underwriters, if any, to deliver to PAA (at PAA's expense) all copies in their possession or control,
other than permanent file copies then in such Selling Holder's possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice. 

        Section 2.05    Cooperation by Holders.    PAA shall have no obligation to include in the Shelf Registration
Statement units of a Holder or in a Piggyback Registration units of a Selling Holder who has failed to timely furnish such information which, in the opinion of counsel to PAA, is reasonably required
in
order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act. 

        Section 2.06    Restrictions on Public Sale by Holders of Registrable Securities.    Each Holder of Registrable
Securities who is included in the Shelf Registration Statement agrees not to effect any public sale or distribution of the Registrable Securities during the 90 calendar day period beginning on the
date of a prospectus supplement filed with the Commission with respect to the pricing of an Underwritten Offering, provided that the duration of the foregoing restrictions shall be no longer than the
duration of the shortest restriction generally imposed by the underwriters on the officers or directors or any other unitholder of PAA on whom a restriction is imposed. 

        Section 2.07    Expenses.    

        (a)   Certain Definitions. "Registration Expenses" means all expenses incident
to PAA's performance under or compliance with this Agreement to effect the registration of Registrable Securities in a Shelf Registration or a Piggyback Registration, and the disposition of such
securities, including, without limitation, all registration, filing, securities exchange listing and NYSE fees, all registration, filing, qualification and other fees and expenses of complying with
securities or blue sky laws, fees of the National Association of Securities Dealers, Inc., transfer taxes and fees of transfer agents and registrars, all word processing, duplicating and
printing expenses, the fees and disbursements of counsel and independent public accountants for PAA, including the expenses of any special audits or "cold comfort" letters required by or incident to
such performance and compliance. Except as otherwise provided in Section 2.08 hereof, PAA shall not be responsible for legal fees incurred by Holders in connection with the exercise of such
Holders' rights hereunder. In addition, PAA shall not be responsible for any "Selling Expenses," which 

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means
all underwriting fees, discounts and selling commissions allocable to the sale of the Registrable Securities. 

        (b)   Expenses. PAA will pay all Registration Expenses in connection with the Shelf Registration Statement filed pursuant to
Section 2.01(a) of this Agreement, and PAA will pay all Registration Expenses in connection with a Piggyback Registration, whether or not the Shelf Registration Statement becomes effective or
any sale is made pursuant to the Shelf Registration Statement or Piggyback Registration. Each Selling Holder shall pay all Selling Expenses in connection with any sale of its Registrable Securities
hereunder. 

        Section 2.08    Indemnification.    

        (a)   By PAA. In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement,
PAA will indemnify and hold harmless each Selling Holder thereunder, its
directors and officers, and each underwriter, pursuant to the applicable underwriting agreement with such underwriter, of Registrable Securities thereunder and each Person, if any, who controls such
Selling Holder or underwriter within the meaning of the Securities Act and the Exchange Act, against any losses, claims, damages, expenses or liabilities (including reasonable attorneys' fees and
expenses) (collectively, "Losses"), joint or several, to which such Selling Holder or underwriter or controlling Person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the Shelf Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and will reimburse each such Selling Holder,
its directors and officers, each such underwriter and each such controlling Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such
Loss or actions or proceedings; provided, however, that PAA will not be liable in any such case if and
to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such
Selling Holder, such underwriter or such controlling Person in writing specifically for use in the Shelf Registration Statement or such other registration statement, or prospectus supplement, as
applicable. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder or any such director, officer or controlling Person, and
shall survive the transfer of such securities by such Selling Holder. 

        (b)   By Each Selling Holder. Each Selling Holder agrees severally and not jointly to indemnify and hold harmless PAA, its
directors and officers, and each Person, if any, who controls PAA within the meaning of the Securities Act or of the Exchange Act to the same extent as the foregoing indemnity from PAA to the Selling
Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in the Shelf Registration Statement or
prospectus supplement relating to the Registrable Securities, or any amendment or supplement thereto; provided,  however, that the liability of each Selling
Holder shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses)
received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification. 

        (c)   Notice. Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, 

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but
the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party other than under this Section 2.08. In any action brought
against any indemnified party, it shall notify the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to
assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided,  however, that, (i) if 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 additional 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
reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other
provision of this Agreement, no indemnified party shall settle any action brought against it with respect to which it is entitled to indemnification hereunder without the consent of the indemnifying
party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnifying party. 

        (d)   Contribution. If the indemnification provided for in this Section 2.08 is held by a court or government agency of
competent jurisdiction to be unavailable to PAA or any Selling Holder or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses as between PAA on the one hand and such Selling Holder on the other, in such
proportion as is appropriate to reflect the relative fault of PAA on the one hand and of such Selling Holder on the other in connection with the statements or omissions which resulted in such Losses,
as well as any other relevant equitable considerations; provided, however, that in no event shall such
Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of Registrable
Securities giving rise to such indemnification. The relative fault of PAA on the one hand and each Selling Holder on the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions
pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the first
sentence of this paragraph. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other
expenses reasonably incurred by such indemnified party in connection with investigating or defending any Loss which is the subject of this paragraph. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation. 

10

 

        (e)   Other Indemnification. The provisions of this Section 2.08 shall be in addition to any other rights to
indemnification or contribution which an indemnified party may have pursuant to law, equity, contract or otherwise. 

        Section 2.09    Rule 144 Reporting.    With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, PAA agrees to use its commercially reasonable efforts to: 

        (a)   Make
and keep public information regarding PAA available, as those terms are understood and defined in Rule 144 of the Securities Act, at all times from and after
the date hereof; 

        (b)   File
with the Commission in a timely manner all reports and other documents required of PAA under the Securities Act and the Exchange Act at all times from and after the
date hereof; and 

        (c)   So
long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request a copy of the most recent annual or quarterly report of PAA, and such
other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without
registration. 

        Section 2.10    Transfer or Assignment of Registration Rights.    The rights to cause PAA to register
Registrable Securities granted to the Purchasers by PAA under this Article II may be transferred or assigned by the Purchasers to one or more transferee(s) or assignee(s) of such Registrable
Securities, provided that (a) unless such transferee is an Affiliate of the transferring Purchaser, each such transferee or assignee holds Registrable Securities representing at least 15% of
the number of Class C Units sold pursuant to the terms of the Purchase Agreement, (b) PAA is given written notice prior to any said transfer or assignment, stating the name and address
of each such transferee and identifying the securities with respect to which such registration rights are being transferred or assigned, and (c) each such transferee assumes in writing
responsibility for its portion of the obligations of the Purchasers under this Agreement. 

 
 

ARTICLE III.
  MISCELLANEOUS    
    

        Section 3.01    Communications.    All notices and other communications provided for or permitted hereunder
shall be made in writing by facsimile, courier service or personal delivery: 

        (a)   if
to the Purchasers, at the most current addresses given by the Purchasers to PAA in accordance with the provisions of this Section 3.01, which addresses
initially are, with respect to the Purchasers, the addresses set forth in the Purchase Agreement, 

        (b)   if
to a transferee of the Purchaser, to such Holder at the address provided pursuant to Section 2.10 above, and 

        (c)   if
to PAA, at 333 Clay Street, Suite 1600, Houston, TX, 77002, notice of which is given in accordance with the provisions of this Section 3.01. 

        All
such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or sent
via Internet electronic mail; and when actually received, if sent by any other means. 

        Section 3.02    Successor and Assigns.    This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein. 

11

 

        Section 3.03    Assignment of Rights.    All or any portion of the rights and obligations of the Purchasers
under this Agreement may be transferred or assigned by the Purchasers in accordance with Section 2.10 hereof. 

        Section 3.04    Recapitalization, Exchanges, etc. Affecting the Common Units.    The provisions of this
Agreement shall apply to the full extent set forth herein with respect to any and all units of PAA or any successor or assign of PAA (whether by merger, consolidation, sale of assets or otherwise)
which may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, recapitalizations and the like occurring
after the date of this Agreement. 

        Section 3.05    Specific Performance.    Damages in the event of breach of this Agreement by a party hereto may
be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to an
injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto
hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will
not preclude any such Person from pursuing any other rights and remedies at law or in equity which such Person may have. 

        Section 3.06    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 and all of which counterparts, taken together, shall constitute
but one and the same Agreement. 

        Section 3.07    Headings.    The headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. 

        Section 3.08    Governing Law.    The laws of the State of Delaware shall govern this Agreement without regard
to principles of conflict of laws. 

        Section 3.09    Severability of Provisions.    Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting
or impairing the validity or enforceability of such provision in any other jurisdiction. 

        Section 3.10    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 PAA set forth herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter. 

        Section 3.11    Amendment.    This Agreement may be amended only by means of a written amendment signed by PAA
and the Holders of a majority of the then outstanding Registrable Securities; provided, however, that no such amendment shall materially and adversely
affect the rights of any Holder hereunder without the consent of such Holder. 

        Section 3.12    No Presumption.    In the event any claim is made by a party relating to any conflict,
omission, or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular
party or its counsel. 

[The
remainder of this page is intentionally left blank.] 

12

 

        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. 

	 	 	PLAINS ALL AMERICAN PIPELINE, LP.
	

 	
 	

By:	

Plains AAP, L.P.,

Its General Partner
	 	 	By:	Plains All American GP LLC,

Its General Partner
	

 	
 	

By:	

/s/ Tim Moore

	 	 	Name:	Tim Moore
	 	 	Title:	Vice President
	

 	
 	
KAYNE ANDERSON ENERGY FUND II, L.P.
	

 	
 	

By:	

Kayne Anderson Capital Advisors, L.P., its general partner
	

 	
 	

By:	

Kayne Anderson Investment Management, Inc., its general partner
	

 	
 	

By:	

/s/ David Shladovsky

	 	 	Name:	David Shladovsky
	 	 	Title:	General Counsel
	

 	
 	
KAFU HOLDINGS, L.P.
	

 	
 	

By:	

KAFU Holdings LLC, its general partner
	

 	
 	

By:	

/s/ David Shladovsky

	 	 	Name:	David Shladovsky
	 	 	Title:	General Counsel

13

 

	

 	
 	
KAYNE ANDERSON CAPITAL INCOME PARTNERS (QP), L.P.
	

 	
 	

By:	

Kayne Anderson Capital Advisors, L.P., its general partner
	

 	
 	

By:	

Kayne Anderson Investment Management, Inc., its general partner
	

 	
 	

By:	

/s/ David Shladovsky

	 	 	Name:	David Shladovsky
	 	 	Title:	General Counsel
	

 	
 	
KAYNE ANDERSON MLP FUND, L.P.
	

 	
 	

By:	

Kayne Anderson Capital Advisors, L.P., its general partner
	

 	
 	

By:	

Kayne Anderson Investment Management, Inc., its general partner
	

 	
 	

By:	

/s/ David Shladovsky

	 	 	Name:	David Shladovsky
	 	 	Title:	General Counsel
	

 	
 	
TORTOISE ENERGY INFRASTRUCTURE CORPORATION
	

 	
 	

By:	

/s/ David J. Schulte

	 	 	Name:	David J. Schulte
	 	 	Title:	President
	

 	
 	
VULCAN ENERGY II INC.
	

 	
 	

By:	

/s/ David N. Capobianco

	 	 	Name:	David N. Capobianco
	 	 	Title:	Vice President

14

QuickLinks

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT by and among PLAINS ALL AMERICAN PIPELINE, L.P., KAYNE ANDERSON ENERGY FUND II, L.P., KAFU HOLDINGS, L.P., KAYNE ANDERSON CAPITAL INCOME PARTNERS (QP), L.P., KAYNE ANDERSON MLP FUND,
L.P., TORTOISE ENERGY INFRASTRUCTURE CORPORATION, and VULCAN ENERGY II INC.

REGISTRATION RIGHTS AGREEMENT

ARTICLE I. DEFINITIONS

ARTICLE II. REGISTRATION RIGHTS

ARTICLE III. MISCELLANEOUSQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4.2    
    

Execution Copy

CLASS C COMMON UNIT

PURCHASE AGREEMENT  

 by and among  

 PLAINS ALL AMERICAN PIPELINE, L.P.,  

 KAYNE ANDERSON ENERGY FUND II, L.P.,  

 KAFU HOLDINGS, L.P.,  

 KAYNE ANDERSON CAPITAL INCOME PARTNERS, L.P.,  

 KAYNE ANDERSON MLP FUND, L.L.P.,  

 TORTOISE ENERGY INFRASTRUCTURE CORPORATION,  

 AND  

 VULCAN ENERGY II INC.  

 
 CLASS C COMMON UNIT PURCHASE AGREEMENT  

        CLASS C COMMON UNIT PURCHASE AGREEMENT, dated as of March    , 2004 (this "Agreement"), by and among PLAINS ALL AMERICAN PIPELINE, L.P ("PAA") and each
of KAYNE ANDERSON ENERGY FUND II, L.P. ("KAEF"), KAFU HOLDINGS, L.P. ("KAFU"), KAYNE ANDERSON CAPITAL INCOME PARTNERS, L.P. ("KACIP"), KAYNE ANDERSON MLP FUND, L.L.P. ("KAMLP") (collectively, "Kayne
Anderson"), TORTOISE ENERGY INFRASTRUCTURE CORPORATION ("Tortoise"), and VULCAN ENERGY II INC. ("Vulcan") (each of KAEF, KAFU, KACIP, KAMLP, Tortoise and Vulcan a "Purchaser" and collectively,
the "Purchasers"). 

        In
consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as
follows: 

 
 

ARTICLE I.
  DEFINITIONS    
    

        Section 1.01
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 Governmental
Authority, mediator or arbitrator. 

        "Amendment"    means the amendment to the Partnership Agreement providing for the Class C Amendment as well as the other
matters as are reflected on Exhibit B hereto. 

        "Basic Documents"    means, collectively, this Agreement, the Registration Rights Agreement, the Amendment and any and all other
agreements or instruments executed and delivered to the Purchasers by PAA or any Subsidiary of PAA hereunder or thereunder. 

        "Business Day"    means any day other than a Saturday, Sunday, or a legal holiday for commercial banks in Wilmington, Delaware. 

        "Class B Units"    means the Class B Common Units of PAA, as established by Section 5.12 of the Partnership
Agreement. 

        "Class C Amendment"    shall have the meaning specified in Section 2.01. 

        "Class C Units"    means the Class C Common Units of PAA, as established by the Class C Amendment. 

        "Class C Unit Price"    shall have the meaning specified in Section 2.06(b). 

        "Closing"    shall have the meaning specified in Section 2.03. 

        "Closing Date"    shall have the meaning specified in Section 2.03. 

        "Commission"    means the United States Securities and Exchange Commission. 

        "Commitment"    means, with respect to a particular Purchaser, the commitment of such Purchaser for a period of thirty
(30) days from the Commitment Date to purchase such Purchaser's Purchased Units on the terms and subject to the conditions set forth in this Agreement. 

        "Commitment Date"    means the date of this Agreement. 

2

 

        "Common Units"    means the common units of PAA that are publicly traded on the New York Stock Exchange. 

        "Confidential Information"    means all oral or written information, documents, records and data relating to the Mesa
Acquisition (including as referenced herein) that PAA or its Representatives furnishes or otherwise discloses to a 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 PAA or its Representatives who, insofar as is known to the recipient after
reasonable inquiry, is not prohibited from transmitting the information to the recipient by a contractual, legal, fiduciary or other obligation to PAA 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 PAA 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. 

        "Form 8-A"    shall have the meaning set forth in Section 3.02(a). 

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

        "Governmental Authority"    means, with respect to a particular Person, the country, state, county, city and political
subdivisions in which such Person or such Person's Property is located or which exercises valid jurisdiction over any such Person or such Person's Property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them and any monetary authority which exercises valid jurisdiction over any such Person or such Person's Property. Unless otherwise specified,
all references to Governmental Authority herein with respect to PAA means a Governmental Authority having jurisdiction over PAA, its Subsidiaries or any of their respective Properties. 

        "Indemnified Party"    shall have the meaning specified in Section 5.02(c). 

        "Indemnifying Party"    shall have the meaning specified in Section 5.02(c). 

        "Law"    means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award, decree, statute, law,
rule or regulation. 

        "Lien"    means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to the lien or security
interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. For the purpose of this
Agreement, a Person shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement
pursuant to which title to the Property has been retained by or vested in some other Person in a transaction intended to create a financing. 

3

 

        "Mesa Acquisition"    means the proposed acquisition of substantially all of the assets of Link Energy Limited Partnership, a
Texas limited partnership, Link Energy Pipeline Limited Partnership, a Texas limited partnership, and Link Energy Canada Limited Partnership, a Texas limited partnership. 

        "Mesa Closing Date"    means the date on which the Mesa Acquisition is consummated. 

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

        "PAA Financial Statements"    means the financial statement or statements described or referred to in Section 3.02. 

        "PAA Material Adverse Effect"    means any material and adverse effect on (a) the assets, liabilities, financial
condition, business, operations or affairs of PAA and its Subsidiaries taken as a whole measured against those assets, liabilities, financial condition, business, operations or affairs reflected in
the PAA SEC Documents or from the facts represented or warranted in any Basic Document, (b) the ability of PAA and its Subsidiaries taken as a whole to carry out their business as of the date
hereof or to meet their obligations under the Basic Documents on a timely basis, or (c) the ability of PAA to consummate the transactions under any Basic Document. 

        "PAA Related Parties"    shall have the meaning specified in Section 5.02(b). 

        "PAA SEC Documents"    shall have the meaning specified in Section 3.03. 

        "Partnership Agreement"    means the Third Amended and Restated Agreement of Limited Partnership of PAA, dated as of
June 27, 2001 (the "Partnership Agreement"), as amended as contemplated hereby. 

        "Partnership Securities"    means any class or series of equity interest in PAA (but excluding any options, rights, warrants and
appreciation rights relating to an equity interest in PAA), including without limitation Common Units, Class B Units, Class C Units and Incentive Distribution Rights (as defined in the
Partnership Agreement). 

        "Permits"    means, with respect to PAA or any of its Subsidiaries, any licenses, permits, variances, consents, authorizations,
waivers, grants, franchises, concessions, exemptions, orders, registrations and approvals of Governmental Authorities or other Persons necessary for the ownership, leasing, operation, occupancy and
use of its Properties and the conduct of its businesses as currently conducted. 

        "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. 

        "Property"    means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible. 

        "Purchase Price"    means, with respect to a particular Purchaser, the monetary commitment amount set forth opposite such
Purchaser's name under the column entitled "Purchase Price" on Schedule 2.01 hereto. 

        "Purchased Units"    means, with respect to a particular Purchaser, the number of Class C Units equal to the quotient
determined by dividing (a) the Purchase Price of such Purchaser by (b) the Class C Unit Price. 

        "Purchaser"    has the meaning set forth in the introductory paragraph. 

        "Purchaser Material Adverse Effect"    means, with respect to a particular Purchaser, any material and adverse effect on
(a) the assets, liabilities, financial condition, business, operations or affairs of 

4

 

such
Purchaser, (b) the ability of such Purchaser to carry out its business as of the date hereof or to meet its obligations under the Basic Documents on a timely basis or (c) the
ability of such Purchaser to consummate the transactions under any Basic Document. 

        "Purchaser Related Parties"    shall have the meaning specified in Section 5.02(a). 

        "Registration Rights Agreement"    means the Registration Rights Agreement, to be entered into at the Closing, between PAA and
the Purchasers in the form attached hereto as Exhibit A hereto. 

        "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. 

        "Subsidiary"    means, as to any Person, any corporation or other entity of which: (i) such Person or a Subsidiary of
such Person is a general partner or manager; or (ii) at least a majority of the outstanding equity interest having by the terms thereof ordinary voting power to elect a majority of the board of
directors or similar governing body of such corporation or other entity (irrespective of whether or not at the time any equity interest of any other class or classes of such corporation or other
entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries. 

        Section 1.02
Accounting Procedures and Interpretation. Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder shall be made, and all Financial Statements and certificates and reports as to financial matters required to be furnished
to the Purchasers hereunder shall be prepared, in accordance with GAAP applied on a consistent basis during the periods involved (except, in the case of unaudited statements, as permitted by
Form 10-Q promulgated by the Commission) and in compliance as to form in all material respects with applicable accounting requirements and with the published rules and regulations
of the Commission with respect thereto. 

 
 

ARTICLE II.
  AGREEMENT TO SELL AND PURCHASE    
    

        Section 2.01
Authorization of Sale of Class C Units. PAA has authorized the issuance and sale to each of the Purchasers of
such Purchaser's Purchased Units. The Purchased Units shall have those rights, preferences, privileges and restrictions governing the Class C Units which shall be reflected in an amendment to
the Partnership Agreement to be adopted immediately prior to the issuance and sale of Class C Units contemplated hereby (the "Class C Amendment"). 

        Section 2.02
Sale and Purchase. Following the consummation of the Mesa Acquisition and subject to the terms and conditions hereof,
at the Closing (as defined in Section 2.03 below) PAA hereby agrees to issue and sell to each Purchaser, and each Purchaser hereby agrees to purchase from PAA, such Purchaser's Purchased Units,
and each Purchaser agrees to pay PAA such Purchaser's Purchase Price. 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 PAA's waiver of, performance by any Purchaser does not excuse performance by any other Purchaser or PAA. In the event the Mesa Acquisition is not consummated PAA shall be
relieved of its obligation to issue and sell to each Purchaser such Purchaser's Purchased Units. 

        Section 2.03
Closing. Subject to the terms and conditions hereof, the consummation of the purchase and sale of the Purchased Units
hereunder (the "Closing") shall take place on any date following the Mesa Closing Date selected by PAA, but on or prior to April 30, 2004, provided that PAA 

5

 

shall
have given each Purchaser ten (10) Business Days (or such shorter period as shall be agreeable to all parties hereto) prior written notice of such designated closing date (such date, the
"Closing Date"), at the offices of Vinson & Elkins, L.L.P., 1001 Fannin, Suite 2300, Houston, Texas 77002. 

        Section 2.04
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 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, order, decree or regulation shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Authority of competent
jurisdiction which temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the transactions contemplated hereby or makes the transactions
contemplated hereby 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; and 

        (iii)  PAA
shall have consummated the Mesa Acquisition. 

        (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)    The
representations and warranties of PAA contained in this Agreement shall be true and correct in all material respects both when made and at and as of the Closing
Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), and such Purchaser shall have received a certificate signed on
behalf of PAA to such effect; 

        (ii)   PAA
shall have paid the Commitment Fee required by Section 2.06(a) hereof; and 

        (iii)  The
Amendment shall have been duly adopted and shall be in full force and effect. 

        (c)    PAA's Conditions.    The obligation of PAA to consummate the sale of each of the Purchaser's Purchased Units to
each of the Purchasers shall be subject to the satisfaction on or prior to the Closing Date of the condition (which may be waived by PAA in writing, in whole or in part, to the extent permitted by
applicable Law) that the representations and warranties of each of the Purchasers contained in this Agreement shall be true and correct in all material respects both when made and at and as of the
Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), and PAA shall have received a certificate from each of the
Purchasers signed on behalf of such Purchaser to such effect. 

        Section 2.05
Deliveries. At the Closing, subject to the terms and conditions hereof, PAA will deliver, or cause to be delivered, to
each Purchaser: 

                (a)   The
Purchased Units to be purchased by such Purchaser by delivery of certificates evidencing such Purchased Units at the Closing meeting the requirements
of the Partnership Agreement, all free and clear of any Liens, encumbrances or interests of any other party, and Purchaser will make payment to PAA of the Purchase Price hereto by wire transfer of
immediately available funds to an account designated by PAA in writing at least ten (10) Business Days (or such shorter period as shall be agreeable to all parties hereto) prior to the Closing; 

6

 

                (b)   A
certificate of the Secretary of State of the State of Delaware, dated a recent date, that PAA is in good standing; 

                (c)   An
opinion addressed to the Purchasers from legal counsel to PAA, dated as of the Closing, in the form and substance attached hereto as Exhibit C;
and 

                (d)   The
Registration Rights Agreement, which shall have been duly executed by PAA. 

        Section 2.06  Consideration.

                (a)   In
exchange for each Purchaser's Commitment to purchase its Purchased Units, PAA shall on the Commitment Date pay to each Purchaser a commitment fee in
cash of one percent (1%) of such Purchaser's Purchase Price (the "Commitment Fee") and as set forth on Schedule 2.01 hereto opposite such Purchaser's name under the column entitled "Commitment
Fee". The Commitment Fee shall be paid on the Commitment Date and represents consideration for each Purchaser's Commitment, irrespective of whether the Closing actually occurs. 

                (b)   The
amount per Class C Unit each Purchaser will pay to PAA to purchase the Purchased Units (the "Class C Unit Price") shall be $30.81 per
Class C Unit, an amount which represents ninety-four percent (94%) of the average closing price of the Common Units as reported by the Bloomberg Professional Financial Reporting
Service for the twenty (20) trading days immediately ending and including March 26, 2004. 

        Section 2.07
[Intentionally Omitted] 

        Section 2.08
Covenant to Vote. If at any time PAA submits to a vote or consent of the holders of Partnership Securities the
approval of a change in the terms of the Class C Units to provide that each Class C Unit is convertible into one Common Unit, each Purchaser hereby agrees to vote or express consent,
with respect to all Partnership Securities that such Purchaser has the power to vote, in favor of such approval. 

 
 

ARTICLE III.
  REPRESENTATIONS AND WARRANTIES RELATED TO PAA    
    

        PAA represents and warrants to each Purchaser as follows: 

        Section 3.01
Corporate Existence. PAA: (a) is a limited partnership duly organized, legally existing and in good standing
under the laws of the State of Delaware; and (b) has all requisite power and authority, and has all governmental licenses, authorizations, consents and approvals necessary, to own, lease, use
and operate its Properties and carry on its business as its business is now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not be
reasonably likely to have a PAA Material Adverse Effect. Each of PAA's Subsidiaries that is a corporation is a corporation duly organized, validly existing and in good standing under the laws of the
State or other jurisdiction of its incorporation and has all requisite power and authority, and has all governmental licenses, authorizations, consents and approvals necessary, to own, lease, use or
operate its respective Properties and carry on its business as now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not be reasonably
likely to have a PAA Material Adverse Effect. Each Subsidiary of PAA that is not a corporation has been duly formed, validly existing and in good standing under the laws of the State or other
jurisdiction of its organization and has all requisite power and authority, and has all governmental licenses, authorizations, consents and approvals necessary, to own, lease, use or operate its
respective Properties and carry on its business as now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not be reasonably likely to have
a PAA Material Adverse Effect. None of PAA or any of its Subsidiaries are in default in the performance, observance or fulfillment of any provision of, in the case of PAA, the Partnership Agreement or
its Certificate of Limited Partnership or, in the case of 

7

 

any
Subsidiary of PAA, its respective certificate of incorporation, bylaws or other similar organizational documents. Each of PAA and its Subsidiaries is duly qualified or licensed and in good
standing as a foreign corporation, and is authorized to do business, in each jurisdiction in which the ownership or leasing of its respective Properties or the character of its respective operations
makes such qualification necessary, except where the failure to obtain such qualification, license, authorization or good standing would not be reasonably likely to have a PAA Material Adverse Effect. 

        Section 3.02  Capitalization and Valid Issuance of Purchased Units.

                (a)   As
of the date of this Agreement, the issued and outstanding limited partner interests of PAA consist of 57,162,638 Common Units and 1,307,190
Class B Units. The only issued and outstanding general partner interests of PAA are the interest of the General Partner described in the Partnership Agreement. All outstanding Common Units and
Class B Units and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described under the caption "The Partnership Agreement—Limited
Liability" in the PAA's registration statement on Form S-1 (No. 333-64107) which is incorporated by reference into the Partnership's Registration Statement on
Form 8-A/A (File No. 001-14569) (the "Form 8-A")). 

                (b)   Other
than PAA's Long-Term Investment Plan and PAA's other equity compensation plans, as described in PAA's Annual Report on
Form 10-K for the period ended December 31, 2003, PAA has no equity compensation plans that contemplate the issuance of Common Units (or securities convertible into or
exchangeable for Common Units). No indebtedness having the right to vote (or convertible into or exchangeable for securities having the right to vote) on any matters on which PAA unitholders may vote
are issued or outstanding. Except as set forth in the first sentence of this Section 3.02(b) or as are contained in the Partnership Agreement, there are no outstanding or authorized
(i) options, warrants, preemptive rights, subscriptions, calls, or other rights, convertible securities, agreements, claims or commitments of any character obligating PAA or any of its
Subsidiaries to issue, transfer or sell any partnership interests or other equity interest in, PAA or any of its Subsidiaries or securities convertible into or exchangeable for such partnership
interests or equity interests, (ii) obligations of PAA or any of its Subsidiaries to repurchase, redeem or otherwise acquire any partnership interests or equity interests of PAA or any of its
Subsidiaries or any such securities or agreements listed in clause (i) of this sentence or (iii) voting trusts or similar agreements to which PAA or any of its Subsidiaries is a party
with respect to the voting of the equity interests of PAA or any of its Subsidiaries. At the Closing, except as described in this Section 3.02(b), there will not be any outstanding
subscriptions, options, warrants, calls, preemptive rights, subscriptions, or other rights, convertible or exchangeable securities, agreements, claims or commitments of any character by which PAA or
any of its Subsidiaries will be bound calling for the purchase or issuance of any partnership interests of PAA or any equity interest of any of its Subsidiaries or securities convertible into or
exchangeable for such partnership or equity interests or any other such securities or agreements 

                (c)   (i) All
of the issued and outstanding equity interests of each of PAA's Subsidiaries are owned, directly or indirectly, by PAA free and clear of any
Liens (except for such restrictions as may exist under applicable Law and except for such Liens as may be imposed under PAA's or PAA's Subsidiaries' credit facilities), and all such ownership
interests have been duly authorized, validly issued and are fully paid (to the extent required in the organizational documents of PAA's Subsidiaries, as applicable) and non-assessable
(except as nonassessability may be affected by Section 6.07 of the Texas Revised Uniform Limited Partnership Act, Section 18-607 of the Delaware Limited Liability Company
Act, Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, the laws of Nova Scotia or the organizational documents of PAA's Subsidiaries, as applicable) and free
of preemptive rights, with no personal liability attaching to the ownership thereof, and (ii) except as disclosed in the PAA SEC Documents, neither PAA nor any of its Subsidiaries owns any
shares of capital stock or other 

8

 

securities
of, or interest in, any other Person, or is obligated to make any capital contribution to or other investment in any other Person. 

                (d)   The
Class C Units being purchased by the Purchasers hereunder and the limited partner interests represented thereby, will be duly authorized by the
Partnership Agreement (as amended as contemplated by this Agreement) prior to the Closing 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 by the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in PAA's
registration statement on the Form 8-A and will be free of any and all Liens and restrictions on transfer, other than restrictions on transfer under the Partnership Agreement and
under applicable state and federal securities laws and other than such Liens as are created by the Purchaser. At the Closing the Common Units issuable upon conversion of the Class C Units, and
the limited partnership interests represented thereby, upon issuance in accordance with the terms of the Class C Units and the Partnership Agreement (as amended as contemplated by this
Agreement) will be validly issued, fully paid (to the extent required by the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in PAA's
registration statement on the Form 8-A) and will be free of any and all Liens and restrictions on transfer, other than restrictions on transfer under the Partnership Agreement and
under applicable state and federal securities laws and other than such Liens as are created by the Purchaser. 

                (e)   The
Common Units are listed on the New York Stock Exchange. The Common Units issuable upon conversion of such Purchased Units have, subject to issuance,
been approved for listing on the New York Stock Exchange. 

        Section 3.03
PAA SEC Documents. PAA has timely filed with the Commission all forms, registration statements, reports, schedules and
statements required to be filed by it under the Exchange Act or the Securities Act (all such documents, collectively "PAA SEC Documents"). The PAA SEC Documents, including, without limitation, any
audited or unaudited financial statements and any notes thereto or schedules included therein (the "PAA 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 PAA SEC 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 PAA 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 public accounting firm with respect to PAA and has not resigned or been
dismissed as independent public accountants of PAA as a result of or in connection with any disagreement with PAA on a matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure. 

        Section 3.04
No Material Adverse Change. Except as set forth in or contemplated by the PAA SEC Documents filed with the Commission
on or prior to the date hereof and except for the proposed Mesa Acquisition which has been discussed with each of the Purchasers, since the date of PAA's most recent Form 10-K
filing with the Commission, PAA and its Subsidiaries have conducted their respective businesses in the ordinary course, consistent with past practice, and there has been no (a) change, 

9

 

event,
occurrence, effect, fact, circumstance or condition that has had or would be reasonably likely to have a PAA Material Adverse Effect, other than those occurring as a result of general economic
or financial conditions or other developments that are not unique to PAA and its Subsidiaries but also affect other Persons who participate or are engaged in the lines of business of which PAA and its
Subsidiaries participate or are engaged, except, in each case, to the extent such condition or development affects PAA to a significantly greater extent than other similarly situated companies
generally, (b) acquisition or disposition of any material asset by PAA or any of its Subsidiaries or any contract or arrangement therefor, otherwise than for fair value in the ordinary course
of business or as disclosed in the PAA SEC Documents, or (c) material change in PAA's accounting principles, practices or methods. 

        Section 3.05
Litigation. Except as set forth in the PAA SEC Documents, there is no Action pending or, to the knowledge of PAA,
contemplated or threatened against or affecting PAA, any of its Subsidiaries or any of their respective officers, directors, properties or assets, which (individually or in the aggregate)
(a) questions the validity of this Agreement or the Registration Rights Agreement or the right of PAA to enter into this Agreement or the Registration Rights Agreement or to consummate the
transactions contemplated hereby and thereby or (b) would be reasonably likely to result in a PAA Material Adverse Effect. 

        Section 3.06  No Breach. The execution, delivery and performance by PAA of this Agreement, the Registration Rights Agreement and all
other agreements and instruments to be executed and delivered by PAA pursuant hereto or thereto or in connection with the transactions contemplated by this Agreement, the Registration Rights Agreement
or any such other agreements and instruments, and compliance by PAA with the terms and provisions hereof and thereof, the issuance and sale by PAA of the Purchaser Units and the adoption and execution
of the Amendment, do not and will not (a) violate any provision of any Law or Permit having applicability to PAA or any of its Subsidiaries or any of their respective Properties,
(b) conflict with or result in a violation of any provision of the Certificate of Limited Partnership or other organizational documents of PAA, or the Partnership Agreement, or any
organizational documents of any of PAA's Subsidiaries, (c) require any consent, approval or notice under or result in a violation or breach of or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any contract, agreement, instrument, obligation, note, bond, mortgage, license, loan or credit
agreement to which PAA or any of its Subsidiaries is a party or by which PAA or any of its Subsidiaries or any of their respective Properties may be bound, or (d) result in or require the
creation or imposition of any Lien upon or with respect to any of the Properties now owned or hereafter acquired by PAA or any of its Subsidiaries; with the exception of the conflicts stated in
clause (b) of this Section 3.06, except where such conflict, violation, default, breach, termination, cancellation, failure to receive consent or approval, or acceleration with respect
to the foregoing provisions of this Section 3.06 would not be, individually or in the aggregate, reasonably likely to have a PAA Material Adverse Effect. 

        Section 3.07
Authority. PAA has all necessary power and authority to execute, deliver and perform its obligations under the Basic
Documents; and the execution, delivery and performance by PAA of the Basic Documents have been duly authorized by all necessary action on its part; and the Basic Documents constitute the legal, valid
and binding obligations of PAA, enforceable in accordance with their 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. No approval from the holders of the Common Units is required in connection with (a) the approval, adoption or effectiveness of
the Amendment or (b) PAA's issuance and sale of the Purchased Units to Purchaser. 

        Section 3.08
Approvals. Except for the approvals required by the Commission in connection with PAA's obligations under the
Registration Rights Agreement, 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 

10

 

(a) the
approval, adoption or effectiveness of the Amendment or (b) the execution, delivery or performance by PAA of any of the Basic Documents, except where the failure to receive such
authorization, consent, approval, waiver, license, qualification or written exemption from, or to make such filing, declaration, qualification or registration would not, individually or in the
aggregate, be reasonably likely to have a PAA Material Adverse Effect. 

        Section 3.09
MLP Status. PAA has, for each taxable year beginning after December 31, 1987, during which PAA was in
existence, met the gross income requirements of Section 7704(c)(2) of the Internal Revenue Code of 1986, as amended. 

        Section 3.10
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 PAA nor any authorized
agent acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemptions. 

        Section 3.11
Investment Company Status. PAA is not an "investment company" within the meaning of the Investment Company Act of
1940, as amended. 

        Section 3.12
Certain Fees. Except for the Commitment Fees to be payable to each of the Purchasers pursuant to
Section 2.06(a) and for the participation fee to be paid by Tortoise to PAA as reflected on Schedule 2.01 hereto under the column "Participation Fee" and the fee to be paid by PAA to
Lehman Brothers Inc. related to the Tortoise investment, no fees or commissions will be payable by PAA to brokers, finders, or investment bankers with respect to the sale of any of the
Purchased Units or the consummation of the transaction contemplated by this Agreement. PAA agrees that it will indemnify and hold harmless each of the Purchasers from and against any and all claims,
demands, or liabilities for broker's, finder's, placement, or other similar fees or commissions incurred by PAA or alleged to have been incurred by PAA in connection with the sale of each Purchaser's
Purchased Units or the consummation of the transactions contemplated by this Agreement. 

        Section 3.13  No Side Agreements. Except for the participation fee to be paid by Tortoise to PAA as reflected on
Schedule 2.01 hereto under the column entitled "Participation Fee" and the fee to be paid by PAA to Lehman Brothers Inc. related to the Tortoise investment, there are no other agreements
by, among or between PAA or its Affiliates, on the one hand, and any of the Purchasers or their Affiliates, on the other hand, with respect to the transactions contemplated hereby nor promises or
inducements for future transactions between or among any of such parties. 

 
 

ARTICLE IV.
  REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER    
    

        Each Purchaser, severally and not jointly, represents and warrants to PAA with respect to itself: 

        Section 4.01
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 

11

 

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

        Section 4.02
Nature of Purchaser. Such Purchaser represents and warrants to, and covenants and agrees with, PAA 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 Class C 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 4.03
Receipt of Information; Authorization. Such Purchaser acknowledges that it has (a) had access to PAA's periodic
filings with the Commission, including PAA's Annual Report on Form 10-K for the year ended December 31, 2003 and the current reports of PAA filed on Forms 8-K on
January 15, February 17, March 1 and March 17, 2004, (b) had access to information regarding the proposed Mesa Acquisition and its potential effect on PAA's
operations and financial results and (c) been provided a reasonable opportunity to ask questions of and receive answers from Representatives of PAA regarding such matters. 

        Section 4.04
Corporate Existence. Such Purchaser, if an entity: (a) is duly organized, legally existing and in good standing
under the laws of its respective jurisdiction of organization; and (b) has all requisite power and authority, and has all governmental licenses, authorizations, consents and approvals
necessary, to own, lease, use and operate its Properties and carry on its business as its business is now being conducted, except where the failure to obtain such licenses, authorizations, consents
and approvals would not have or would not reasonably be expected to have a Purchaser Material Adverse Effect. Each such Purchaser is not in default in the performance, observance or fulfillment of any
provision of its organizational documents, except where such default would not have or would not be reasonably likely to have a Purchaser Material Adverse Effect. 

        Section 4.05
No Breach. The execution, delivery and performance by such Purchaser of this Agreement, 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 with the transactions contemplated by this Agreement, the
Registration Rights Agreement or any such other agreements and instruments, and compliance by such Purchaser with the terms and provisions hereof and thereof, and the purchase of such Purchaser's
Purchased Units by such Purchaser do not and will not (a) violate any provision of any Law or permit having applicability to such Purchaser or any of its Properties, (b) conflict with or
result in a violation of any provision of the organizational documents of such Purchaser, (c) require any consent, approval or notice under or result in a violation or breach of or constitute
(with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any contract, agreement, instrument, obligation, note,
bond, mortgage, license, loan or credit agreement to which such Purchaser is a party or by which such Purchaser or any of its Properties may be bound, or (d) result in or require the creation
or imposition of any Lien upon or with respect to any of the Properties now owned or hereafter acquired by such Purchaser; with the exception of the conflicts stated in clause (b) of this
Section 4.05, except where such conflict, violation, default, breach, termination, cancellation, failure to receive consent or approval, or acceleration with respect to the foregoing provisions
of this Section 4.05 would not, individually or in the aggregate, be reasonably likely to have a Purchaser Material Adverse Effect. 

        Section 4.06
Restricted Securities. Such Purchaser understands that the Purchased Units it is purchasing are characterized as
"restricted securities" under the federal securities laws inasmuch as they are being acquired from PAA in a transaction not involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the Securities 

12

 

Act
only in certain limited circumstances. In this connection, Purchaser represents that it is knowledgeable with respect to Rule 144 of the Commission promulgated under the Securities Act. 

        Section 4.07
Certain Fees. Except for the participation fee to be paid by Tortoise to PAA as reflected on Schedule 2.01
hereto under the column "Participation Fee" and the fee to be paid by PAA to Lehman Brothers Inc. related to the Tortoise investment, no fees or commissions will be payable by such Purchaser to
brokers, finders, or investment bankers with respect to the purchase of any of the Purchased Units or the consummation of the transaction contemplated by this Agreement. Such Purchaser agrees that it
will indemnify and hold harmless PAA 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 such Purchaser's Purchased Units or the consummation of the transactions contemplated by this Agreement. 

        Section 4.08  Legend. It is understood that the certificates evidencing the Securities 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 Company that such registration is not required or unless sold pursuant to Rule 144 of such Act." 

        Section 4.09
No Side Agreements. There are no other agreements by, among or between such Purchaser and any of its Affiliates, on
the one hand, and any of the other Purchasers or their Affiliates, on the other hand, with respect to the transactions contemplated hereby nor promises or inducements for future transactions between
or among any of such parties. 

 
 

ARTICLE V.
  MISCELLANEOUS    
    

        Section 5.01 Interpretation and Survival of Provisions. Article, Section, Schedule, and Exhibit 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 PAA has an obligation
under the Basic Documents, the expense of complying with that obligation shall be an expense of PAA unless otherwise specified. Whenever any determination, consent, or approval is to be made or given
by a Purchaser, such action shall be in such Purchaser's sole discretion unless otherwise specified in this Agreement. If any provision in the Basic Documents or the Amendment is held to be illegal,
invalid, not binding, or unenforceable, such provision shall be fully severable and the Basic Documents shall be construed and enforced as if such illegal, invalid, not binding, or unenforceable
provision had never comprised a part of the Basic Documents, and the remaining provisions shall remain in full force and effect. The Basic Documents have been reviewed and negotiated by sophisticated
parties with access to legal counsel and shall not be construed against the drafter. The representations and warranties set forth in Sections 3.01, 3.02, 3.06, 3.07, 3.08, 3.12, 3.13, 4.01, 4.02,
4.03, 4.04, 4.05, 4.06, 4.07 and 4.09 hereunder shall survive the execution and delivery of this Agreement indefinitely, and the other representations and warranties set forth herein shall survive for
a period of twelve (12) months following the Closing Date regardless of any investigation made by or on behalf of PAA or each of the Purchasers. The covenants made in this Agreement or any
other Basic Document 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 and repayment, conversion, exercise or repurchase thereof. All indemnification obligations of PAA and the provisions of Section 5.02 shall remain operative and in full force and effect
unless such obligations are 

13

 

expressly
terminated in a writing referencing that individual Section, regardless of any purported general termination of this Agreement. 

        Section 5.02
Indemnification, Costs and Expenses.

                (a)    Indemnification by PAA.    PAA agrees to indemnify each Purchaser and its officers, directors,
employees and agents (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 (i) any actual or proposed use by PAA of the proceeds of any sale of the Purchased Units or (ii) the breach of any of the
representations, warranties or covenants of PAA 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. 

                (b)    Indemnification by Purchasers.    Each Purchaser agrees, severally and not jointly, to indemnify
PAA, Plains AAP, L.P. and Plains All American GP LLC and their officers, directors, employees and agents (collectively, "PAA 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 such Purchaser contained herein, provided such claim for indemnification relating to a
breach of the representations and warranties is made prior to the expiration of such representations and warranties. 

                (c)    Indemnification Procedure.    Promptly after any PAA 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 

14

 

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 (i) at its
expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense
and employ counsel or (B) 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. 

                (d)    Survival.    The parties' obligations under this Section 5.02 shall survive any
termination of this Agreement. 

        Section 5.03
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 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 or any other Basic Document 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 or any other Basic Document, any waiver of any provision of this
Agreement or any other Basic Document, and any consent to any departure by PAA from the terms of any provision of this Agreement or any other Basic Document 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 on PAA in any case shall entitle PAA to any other
or further notice or demand in similar or other circumstances. 

        Section 5.04  Binding Effect; Assignment.

                (a)    Binding Effect.    This Agreement shall be binding upon PAA, each Purchaser, 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 Purchased Units.    All or any portion a Purchaser's Purchased Units purchased
pursuant to this Agreement may be sold, assigned or pledged by such Purchaser, subject to compliance with applicable securities laws. 

                (c)    Assignment of Rights.    All or any portion of the rights and obligations of each Purchaser under
this Agreement may not be transferred by such Purchaser without the written consent of PAA. 

        Section 5.05  Confidentiality. Notwithstanding anything herein to the contrary, each Purchaser that has executed or is otherwise
bound by a confidentiality agreement in favor of PAA shall continue to be bound by such confidentiality agreement. Each Purchaser that has not executed or is not otherwise not 

15

 

bound
by a confidentiality agreement in favor of PAA will refrain, and will cause its Representatives to refrain, from disclosing to any other Person any Confidential Information. Disclosure of
Confidential Information will not be deemed to be a breach of this Section 5.05 if such disclosure is made with the consent of PAA or pursuant to a subpoena or order issued by a court of
competent jurisdiction or by a judicial or administrative or legislative body or committee; provided, however, that upon receipt by a Purchaser of any subpoena or order covering Confidential
Information of PAA, such Purchaser will promptly notify PAA of such subpoena or order. 

        Section 5.06
Communications. All notices and demands provided for hereunder shall be in writing and shall be given by registered or
certified mail, return receipt requested, telecopy, air courier guaranteeing overnight delivery or personal delivery to the following addresses: 

	(a)
	If
to KAEF, KAFU, KACIP or KAMLP:

 1800
Avenue of the Stars, 2nd Floor

Los Angeles, California 90067

Attention: Bob Sinnott

Facsimile: (310) 284-6490 

	(b)
	If
to Tortoise:

 Tortoise
Energy Infrastructure Corporation

10801 Mastin Blvd, Suite 222

Overland Park, KS 66210

Attention: David Schulte

Facsimile: (913) 345 2763

 

with
a copy to

 

Blackwell
Sanders Peper Martin, LLP

2300 Main Street, Suite 1000

Kansas City, MO 64108

Attention: Steven F. Carman

Facsimile: (816) 983 8080 

	(c)
	If
to Vulcan:

 Vulcan
Energy II Inc.

505 Fifth Ave S

Suite 900

Seattle, Washington 98104

Telephone: 206-342-2034

Facsimile: 206-342-3000

Attention: David Capobianco

 

with
a copy to:

 

Skadden,
Arps, Slate, Meagher & Flom LLP

1600 Smith Street

Suite 4400

Houston, Texas 77002

Telephone: 713-655-5100

16

 

Facsimile:
713-655-5200

Attention: Frank Ed Bayouth II 

	(d)
	If
to PAA:

 Plains
All American Pipeline, L.P.

333 Clay Street, Suite 2900

Houston, TX 77002

Attention: Tim Moore

Facsimile: (713) 646-4313

 

with
a copy to:

 

Vinson &
Elkins L.L.P.

2300 First City Tower

1001 Fannin Street

Houston, Texas 77002

Attention: David Oelman, Esq.

Facsimile: (713) 615-5861 

or
to such other address as PAA or such 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 certified mail, return receipt requested, or regular mail, if mailed; when receipt acknowledged, if sent via facsimile; and upon actual receipt when delivered
to an air courier guaranteeing overnight delivery. 

        Section 5.07  Removal of Legend. Any Purchaser may request PAA to remove the legend described in Section 4.08 from the
certificates evidencing the Class C Units by submitting to PAA such certificates, together with an opinion of counsel to the effect that such legend is no longer required under the Securities
Act or applicable state laws, as the case may be. 

        Section 5.08
Entire Agreement. This Agreement, the other Basic Documents and the other agreements and documents referred to herein
are 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 and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein with respect to the rights
granted by PAA or any of its Affiliates or each of the Purchasers or any of their Affiliates set forth herein or therein. This Agreement, the other Basic Documents and the other agreements and
documents referred to herein supersede all prior agreements and understandings between the parties with respect to such subject matter. 

        Section 5.09  Governing Law. This Agreement will be construed in accordance with and governed by the laws of the State of Delaware
without regard to principles of conflicts of laws. 

        Section 5.10
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 and all of which counterparts, taken together, shall constitute but one
and the same Agreement. 

        Section 5.11
Termination.

                (a)   Notwithstanding
anything herein to the contrary, this Agreement shall automatically terminate if the Closing shall not have occurred on or before
April 30, 2004, unless the term hereof is extended by agreement of the parties hereto. 

17

 

                (b)   In
the event of the termination of this Agreement as provided in Section 5.11(a), this Agreement shall forthwith become null and void. In the event
of such termination, there shall be no liability on the part of any party hereto, except as set forth in Section 5.02 of this Agreement and except with respect to the requirement to comply with
any confidentiality agreement in favor of PAA; provided that nothing herein shall relieve any party from any liability or obligation with respect to any willful breach of this Agreement. 

        Section 5.12
Expenses. PAA hereby covenants and agrees to reimburse Vulcan, Tortoise and Kayne Anderson for reasonable and
documented costs and expenses incurred in connection with the negotiation, execution, delivery and performance of the Basic Documents and the transactions contemplated hereby and thereby (including,
without limitation, reasonable legal, consulting and due diligence fees and expenses), provided that such expenses do not exceed $20,000 with respect to Vulcan and $8,000 each with respect to Tortoise
and Kayne Anderson and that any request for such expense reimbursement by Vulcan, Tortoise or Kayne Anderson be accompanied by a detailed invoice for such amount. If any action at law or equity is
necessary to enforce or interpret the terms of the Basic Documents, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled. 

[The
remainder of this page is intentionally left blank.] 

18

 

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

	 	 	PLAINS ALL AMERICAN PIPELINE, LP.
	

 	
 	

By:	

PAA, AAP, L.P., its general partner
	

 	
 	

By:	

Plains All American GP LLC,

its general partner
	

 	
 	

By:	

/s/  TIM MOORE      

	 	 	Name:	Tim Moore
	 	 	Title:	Vice President

	 	 	KAYNE ANDERSON ENERGY FUND II, L.P.
	

 	
 	

By:	

Kayne Anderson Capital Advisors, L.P., its

general partner
	

 	
 	

By:	

Kayne Anderson Investment Management, Inc.,

its general partner
	

 	
 	

By:	

/s/  DAVID SHLADOVSKY      

	 	 	Name:	David Shladovsky
	 	 	Title:	General Counsel

	 	 	KAFU HOLDINGS, L.P.
	

 	
 	

By:	

KAFU Holdings LLC, its general partner
	

 	
 	

By:	

/s/  DAVID SHLADOVSKY      

	 	 	Name:	David Shladovsky
	 	 	Title:	General Counsel

	 	 	KAYNE ANDERSON CAPITAL INCOME

PARTNERS, L.P.
	

 	
 	

By:	

Kayne Anderson Capital Advisors, L.P.,

its general partner
	 	 	 	 

19

 

	

 	
 	

By:	

Kayne Anderson Investment Management, Inc.,

its general partner
	

 	
 	

By:	

/s/  DAVID SHLADOVSKY      

	 	 	Name:	David Shladovsky
	 	 	Title:	General Counsel

20

 

	 	 	KAYNE ANDERSON MLP FUND, L.L.P.
	

 	
 	

By:	

Kayne Anderson Capital Advisors, L.P.,

its general partner
	

 	
 	

By:	

Kayne Anderson Investment Management, Inc.,

its general partner
	

 	
 	

By:	

/s/  DAVID SHLADOVSKY      

	 	 	Name:	David Shladovsky
	 	 	Title:	General Counsel

	 	 	TORTOISE ENERGY INFRASTRUCTURE CORPORATION
	

 	
 	

By:	

/s/  DAVID J. SCHULTE      

	 	 	Name:	David J. Schulte
	 	 	Title:	President

	 	 	VULCAN ENERGY II INC.
	

 	
 	

By:	

/s/  DAVID CAPOBIANCO      

	 	 	Name:	David Capobianco
	 	 	Title:	Vice President

21

 
 
 

Exhibit B—Partnership Amendment    
    

See
Attached 

22

 
 
 

Exhibit C—Form of Opinion of PAA Counsel    
    

See
Attached 

23

 
 
 

Schedule 2.01    
    

	Purchaser
 
	 	Purchase Price
	 	Commitment Fee
	 	Participation Fee

	Kayne Anderson Energy Fund II, L.P.	 	$	30,000,000	 	$	300,000	 	$	0
	KAFU Holdings, L.P.	 	$	11,000,000	 	$	110,000	 	$	0
	Kayne Anderson Capital Income Partners, L.P.	 	$	2,000,000	 	$	20,000	 	$	0
	Kayne Anderson MLP Fund, L.L.P.	 	$	2,000,000	 	$	20,000	 	$	0
	Vulcan Energy II Inc.	 	$	40,000,000	 	$	400,000	 	$	0
	Tortoise Energy Infrastructure Corporation	 	$	15,000,000	 	$	150,000	 	$	450,000

24

QuickLinks

Exhibit 4.2

ARTICLE I. DEFINITIONS

ARTICLE II. AGREEMENT TO SELL AND PURCHASE

ARTICLE III. REPRESENTATIONS AND WARRANTIES RELATED TO PAA

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

ARTICLE V. MISCELLANEOUS

Exhibit B—Partnership Amendment

Exhibit C—Form of Opinion of PAA Counsel

Schedule 2.01

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