Document:

Exhibit 4.3

 

SEVENTH
SUPPLEMENTAL INDENTURE

 

THIS SEVENTH SUPPLEMENTAL INDENTURE (this “Supplemental
Indenture”), dated as of May 12, 2006, is among Plains All American
Pipeline, L.P., a Delaware limited partnership (the “Partnership”), PAA Finance
Corp., a Delaware corporation (“PAA Finance” and, together with the
Partnership, the “Issuers”), Plains LPG Services GP LLC, a Delaware limited
liability company (“LPG LLC”), Plains LPG Services, L.P., a Delaware limited
partnership (“LPG LP”) and Lone Star Trucking, LLC a California limited
liability company (“Lone Star” and, together with LPG LLC and LPG LP, the “Subsidiary
Guarantors”), direct or indirect subsidiaries of Plains All American Pipeline,
L.P. (or its successor), a Delaware limited partnership (the “Partnership”),
and Wachovia Bank, National Association, as trustee under the indenture
referred to below (the “Trustee”).

 

WITNESSETH

 

WHEREAS, the Issuers have heretofore executed and
delivered to the Trustee an indenture (the “Original Indenture”), dated as of
September 25, 2002, as supplemented by the First, Second, Third, Fourth and
Fifth Supplemental Indentures (the Original Indenture as so supplemented, the “Indenture”),
dated as of September 25, 2002, December 10, 2003, August 12,
2004, August 12, 2004 and May 27, 2005, respectively, among the
Issuers, the Subsidiary Guarantors and the Trustee, providing for the issuance
of the Issuers’ 73⁄4% Senior Notes due 2012, 55/8% Senior
Notes due 2013, 4.750% Senior Notes due 2009, 5.875% Senior Notes due 2016 and
5.25% Senior Notes due 2015, respectively (such Senior Notes being hereinafter
referred to collectively as the “Notes”);

 

WHEREAS, Section 5.10 of the First Supplemental
Indenture and Section 5.05 of the Second, Third, Fourth and Fifth Supplemental
Indentures provide that under certain circumstances the Partnership is required
to cause the Subsidiary Guarantors to execute and deliver to the Trustee a
supplemental indenture pursuant to which the Subsidiary Guarantors shall
unconditionally guarantee all of the Issuers’ obligations under the Notes
pursuant to a Guarantee on the terms and conditions set forth herein; and

 

WHEREAS, pursuant to Section 9.01 of the Original
Indenture, the Issuers and the Trustee are authorized to execute and deliver
this Supplemental Indenture;

 

NOW THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Issuers, the Subsidiary Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Notes as follows:

 

1.             Definitions.
(a) Capitalized terms used herein without definition shall have the meanings
assigned to them in the Indenture.

 

(b)           For
all purposes of this Supplemental Indenture, except as otherwise herein
expressly provided or unless the context otherwise requires: (i) the terms and
expressions used herein shall have the same meanings as corresponding terms and
expressions used in the Indenture; and (ii) the words “herein,” “hereof and “hereby”
and other words of similar import

 

 

used in this Supplemental Indenture refer to this Supplemental
Indenture as a whole and not to any particular section hereof.

 

2.             Agreement
to Guarantee. The Subsidiary Guarantors hereby agree, jointly and severally
with all other Subsidiary Guarantors under the Indenture, to guarantee the
Issuers’ obligations under the Notes on the terms and subject to the conditions
set forth in Article IX of the First, Second, Third, Fourth and Fifth
Supplemental Indentures, as applicable, and to be bound by all other applicable
provisions of the Indenture. Except as expressly amended hereby, the Indenture
is in all respects ratified and confirmed and all the terms, conditions and
provisions thereof shall remain in full force and effect. This Supplemental
Indenture shall form a part of the Indenture for all purposes, and every holder
of Notes heretofore or hereafter authenticated and delivered shall be bound
hereby.

 

3.             GOVERNING LAW. THIS SUPPLEMENTAL
INDENTURE SHALL BE DEEMED TO BE A NEW YORK CONTRACT, AND FOR ALL PURPOSES SHALL
BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

4.             Trustee
Makes No Representation. The Trustee makes no representation as to the
validity or sufficiency of this Supplemental Indenture.

 

5.             Counterparts.
The parties may sign any number of copies of this Supplemental Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.

 

6.             Effect
of Headings. The Section headings herein are for convenience only and shall
not effect the construction thereof.

 

[Signature page follows.]

 

2

 

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

 

	
   

  	
  PLAINS ALL
  AMERICAN PIPELINE, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Plains AAP,
  L.P., its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Plains All
  American GP LLC, its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  	
   

  
	
   

  	
   

  	
  Phil Kramer

  
	
   

  	
   

  	
  Executive Vice
  President

  
	
   

  	
   

  	
    and Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PAA FINANCE
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Phil Kramer

  	
   

  
	
   

  	
   

  	
  Phil Kramer

  
	
   

  	
   

  	
  Executive Vice
  President

  
	
   

  	
   

  	
    and Chief
  Financial Officer

  
						

 

 

Signature Page to Supplemental Indenture

 

 

	
   

  	
  PLAINS LPG
  SERVICES GP LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Plains
  Marketing, L.P., its Sole Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Plains Marketing
  GP Inc., its General

  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  	
   

  
	
   

  	
   

  	
  Phil Kramer

  
	
   

  	
   

  	
  Executive Vice
  President and Chief

  
	
   

  	
   

  	
  Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  PLAINS LPG
  SERVICES, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Plains LPG
  Services GP LLC, its General

  Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Plains
  Marketing, L.P., its Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Plains Marketing
  GP Inc., its General

  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  	
   

  
	
   

  	
   

  	
  Phil Kramer

  
	
   

  	
   

  	
  Executive Vice
  President and Chief

  
	
   

  	
   

  	
  Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  LONE STAR
  TRUCKING, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Plains LPG
  Services, L.P., its Sole Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Plains LPG
  Services GP LLC, its General

  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Plains
  Marketing, L.P., its Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Plains Marketing
  GP Inc., its General

  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  	
   

  
	
   

  	
   

  	
  Phil Kramer

  
	
   

  	
   

  	
  Executive Vice
  President and Chief

  
	
   

  	
   

  	
  Financial
  Officer

  

 

 

Signature Page to Supplemental Indenture

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL

  
	
   

  	
    ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronda L. Porman

  	
   

  
	
   

  	
  Name:

  	
  Ronda L. Porman

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
						

 

 

Signature Page to Supplemental IndentureExhibit
10.1

 

PLAINS
ALL AMERICAN PIPELINE, L.P.

 

PAA
FINANCE CORP.

 

$250,000,000 6.70%
Notes due 2036

 

Purchase Agreement

 

May 9, 2006

 

	
  Citigroup Global Markets Inc.

  
	
  UBS Securities LLC

  
	
  BNP
  Paribas Securities Corp.

  
	
  Banc of America Securities LLC

  
	
  Fortis Securities LLC

  
	
  J.P. Morgan Securities Inc.

  
	
  Piper Jaffray & Co.

  
	
  Wachovia Capital Markets, LLC

  
	
  Amegy Bank National Association

  
	
  Commerzbank Capital Markets Corp.

  
	
  DnB NOR Markets, Inc.

  
	
  HSBC Securities (USA) Inc.

  
	
  Mitsubishi UFJ Securities International plc

  

 

c/o       Citigroup
Global Markets Inc.

388 Greenwich St., 34th Floor

New York, New York 10013

 

Ladies
and Gentlemen:

 

Plains All American Pipeline, L.P., a Delaware limited
partnership (the “Partnership”), and PAA Finance Corp., a Delaware corporation
(“PAA Finance,” and together with the Partnership, the “Issuers”), propose to
issue and sell to the several initial purchasers named in Schedule 1 hereto
(the “Initial Purchasers”) $250,000,000 aggregate principal amount of 6.70%
Notes due 2036 (the “Securities”). The Securities are to be issued under an
indenture dated as of September 25, 2002, among the Issuers and Wachovia
Bank, National Association, as trustee (the “Trustee”), as amended by the Sixth
Supplemental Indenture to be dated as of May 12, 2006, among the Issuers, the
Trustee and the subsidiaries of the Partnership named therein (as amended, the “Indenture”).
The Securities will have the benefit of a registration rights agreement (the “Registration
Rights Agreement”), to be dated as of the Closing Date (as defined in Section
3), among the Issuers and the Initial Purchasers, pursuant to which and subject
to the terms and conditions therein, the Issuers will agree to exchange the
Securities with securities (the “Exchange Securities”) that have been registered
under the Act. Certain terms used herein are defined in Section 17 hereof.

 

 

Plains AAP, L.P., a Delaware limited partnership (the “General
Partner”), is the general partner of the Partnership. Plains All American GP
LLC, a Delaware limited liability company (“GP LLC”), is the general partner of
the General Partner. The Partnership owns 100% of the issued and outstanding
shares of Plains Marketing GP Inc., a Delaware corporation (“GP Inc.”) and the
general partner of each of Plains Marketing, L.P., a Texas limited partnership
(“Plains Marketing”), and Plains Pipeline, L.P., a Texas limited partnership (“Plains
Pipeline”). Plains Marketing owns 100% of the issued and outstanding shares of
PAA Finance, a 100% membership interest in Plains Marketing Canada LLC, a
Delaware limited liability company (“PMC LLC”), a 99.99% limited partner
interest in Plains Marketing Canada, L.P., an Alberta limited partnership (“PMC
LP”), a 100% membership interest in Plains LPG Services GP LLC, a Delaware
limited liability company (“LPG LLC”) and a 99.99% limited partner interest in
Plains LPG Services, L.P., a Delaware limited partnership (“LPG LP”). LPG LLC
owns a 0.001% general partner interest in LPG LP. LPG LP owns a 100% membership
interest in Lone Star Trucking, LLC, a California limited partnership (“Lone
Star”). PMC LLC owns 100% of the issued and outstanding share capital of PMC
(Nova Scotia) Company, a Nova Scotia unlimited liability company (“PMC NS”). PMC
NS owns a 0.01% general partner interest in PMC LP. Plains Pipeline owns 100%
membership interests in each of Basin Holdings GP LLC, a Delaware limited
liability company (“Basin LLC”), and Rancho Holdings GP LLC, a Delaware limited
liability company (“Rancho LLC”), and 99.999% limited partner interests in Basin
Pipeline Holdings, L.P., a Delaware limited partnership (“Basin LP”) and Rancho
Pipeline Holdings, L.P., a Delaware limited partnership (“Rancho LP”). The
Partnership owns a 50% membership interest in PAA/Vulcan Gas Storage, LLC, a
Delaware limited liability company (the “Joint Venture”). Basin LLC owns a
0.001% general partner interest in Basin LP, and Rancho LLC owns a 0.001%
general partner interest in Rancho LP. GP Inc., Plains Marketing, Plains
Pipeline, PAA Finance, PMC LLC, PMC LP, PMC NS, Basin LLC, Basin LP, Rancho
LLC, Rancho LP, LPG LLC, LPG LP and Lone Star are collectively called the “Subsidiaries.”  PMC LP and PMC NS are collectively called the
“Canadian Subsidiaries.”  The
Partnership, PAA Finance, the General Partner, GP LLC, GP Inc., Plains
Marketing, Plains Pipeline, PMC LLC, PMC LP, PMC NS, Basin LLC, Basin LP,
Rancho LLC, Rancho LP, LPG LLC, LPG LP and Lone Star are collectively called
the “Plains Parties.”

 

The sale of the Securities to the Initial Purchasers
will be made without registration of the Securities under the Act in reliance
upon exemptions from the registration requirements of the Act.

 

In connection with the sale of the Securities, the
Issuers have prepared a preliminary offering memorandum dated May 9, 2006 (the “Preliminary
Offering Memorandum”), and have prepared a pricing supplement (the “Pricing
Supplement”), dated May 9, 2006, the form of which is attached as Exhibit A
hereto, describing the terms of the Securities, each for use by the Initial
Purchasers in connection with their solicitation of offers to purchase the
Securities. As used herein, “Offering
Memorandum” shall mean the Preliminary Offering Memorandum, as
supplemented by the Pricing Supplement and any exhibits thereto and any
information incorporated by reference therein, in the most recent form that has
been prepared and delivered to the Initial Purchasers in connection with their
solicitation of offers to purchase Securities prior to the date and time that
this Agreement is executed and delivered by the parties hereto (the “Execution Time”). Promptly after the
Execution Time and in any event no later than the second business day following
the Execution Time, the Issuers shall deliver or cause to be

 

2

 

delivered copies, in such quantities and at such places as the Initial
Purchasers shall reasonably request, of the Final Offering Memorandum (the “Final Offering Memorandum”), which
will consist of the Preliminary Offering Memorandum with only such changes thereto
as are required to reflect the information contained in the Pricing Supplement
and such other changes as the Company reasonably deems appropriate following
notice to the Initial Purchasers or their legal counsel, and from and after the
time the Final Offering Memorandum is delivered as set forth in this sentence,
all references herein to the Offering Memorandum shall be deemed to be a
reference to the Offering Memorandum and the Final Offering Memorandum. The
Issuers hereby confirm that they have authorized the use of the Offering
Memorandum and the Final Offering Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Securities by the Initial
Purchasers. Unless stated to the contrary, any references herein to the terms “amend,”
“amendment” or “supplement” with respect to the Offering Memorandum and the
Final Offering Memorandum shall be deemed to refer to and include any
information filed under the Exchange Act subsequent to the date of such
Offering Memorandum or Final Offering Memorandum which is incorporated by
reference therein.

 

1.                                       Representations and Warranties of the Plains
Parties. The Plains Parties,
jointly and severally, represent and warrant to the Initial Purchasers as set
forth below in this Section 1.

 

(a)                                  As
of the Execution Time and on the Closing Date, the Offering Memorandum did not,
and will not (and any amendment or supplement thereto, at the date thereof and
at the Closing Date, will not), contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Issuers make no
representation or warranty as to the information contained in or omitted from
the Offering Memorandum, or any amendment or supplement thereto, in reliance
upon and in conformity with information furnished in writing to the Issuers by
or on behalf of the Initial Purchasers specifically for inclusion therein. The
documents incorporated by reference in the Offering Memorandum, when filed with
the Commission, conformed or will conform, as the case may be, in all material
respects to the applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and did not and will 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
the light of the circumstances under which they were made, not misleading.

 

(b)                                 None
of the Plains Parties, nor any person acting on its or their behalf has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of the Securities under the Act.

 

(c)                                  None
of the Plains Parties, nor any person acting on its or their behalf has engaged
in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with any offer or sale of the Securities in
the United States.

 

3

 

(d)                                 The
Securities satisfy the eligibility requirements of Rule 144A(d)(3) under the
Act.

 

(e)                                  None
of the Plains Parties, nor any person acting on its or their behalf has engaged
in any directed selling efforts with respect to the Securities, and each of
them has complied with the offering restrictions requirement of
Regulation S. Terms used in this paragraph have the meanings given to them
by Regulation S.

 

(f)                                    The
Partnership is subject to and in compliance with the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act.

 

(g)                                 Subject
to compliance by the Initial Purchasers with the procedures set forth in
Section 4 hereof, it is not necessary in connection with the offer, sale and
delivery of the Securities by the Issuers to the Initial Purchasers and the
initial resale by the Initial Purchasers in the manner contemplated by this
Agreement and the Offering Memorandum to register the Securities under the Act
or to qualify the Indenture under the Trust Indenture Act.

 

(h)                                 The
Issuers have not paid or agreed to pay to any person any compensation for
soliciting another to purchase any securities of the Issuers (except as contemplated
by this Agreement).

 

(i)                                     None
of the Plains Parties, nor any person acting on its or their behalf has taken,
directly or indirectly, any action designed to cause or which has constituted
or which might reasonably be expected to cause or result, under the Exchange
Act or otherwise, in the stabilization or manipulation of the price of any
security of the Issuers to facilitate the sale or resale of the Securities.

 

(j)                                     Each
of the Plains Parties and the Joint Venture has been duly formed or
incorporated and is validly existing in good standing as a limited partnership,
limited liability company, corporation or unlimited liability company under the
laws of its respective jurisdiction of formation or incorporation with full
corporate, partnership, limited liability company or unlimited liability
company power and authority, as the case may be, to own or lease its properties
and to conduct its business, in each case in all material respects. Each of the
Plains Parties and the Joint Venture is duly registered or qualified as a
foreign corporation, limited partnership, limited liability company or
unlimited liability company, as the case may be, for the transaction of
business under the laws of each jurisdiction in which the character of the
business conducted by it or the nature or location of the properties owned or
leased by it makes such registration or qualification necessary, except where
the failure so to register or qualify would not have a material adverse effect
on the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Partnership, the Subsidiaries and the
Joint Venture, taken as a whole.

 

(k)                                  GP
LLC has full limited liability company power and authority to act as the
general partner of the General Partner; the General Partner has full
partnership power and authority to act as the general partner of the
Partnership; GP Inc. has full corporate 

 

4

 

power and
authority to act as the general partner of Plains Marketing and Plains
Pipeline; Basin LLC has full limited liability company power and authority to
act as the general partner of Basin LP; Rancho LLC has full limited liability
company power and authority to act as the general partner of Rancho LP; PMC NS
has full unlimited liability company power and authority to act as the general
partner of PMC LP; and LPG LLC has full limited liability company power and
authority to act as the general partner of LPG LP, in each case in all material
respects.

 

(l)                                     GP
LLC is the sole general partner of the General Partner, with a 1.0% general
partner interest in the General Partner, and the General Partner is the sole
general partner of the Partnership, with a 2.0% general partner interest in the
Partnership; such general partner interests have been duly authorized and
validly issued in accordance with the agreement of limited partnership of the
General Partner (as in effect on the date hereof and as the same may be amended
or restated prior to the Closing Date, such agreement being referred to herein
as the “General Partner Partnership Agreement”) and the Third Amended and
Restated Agreement of Limited Partnership of the Partnership (as the same may
be amended or restated prior to the Closing Date, the “Partnership Agreement”),
respectively; GP LLC owns such general partner interest in the General Partner
and the General Partner owns such general partner interest in the Partnership,
in each case, free and clear of all liens, encumbrances, security interests,
equities, charges or claims; and the General Partner owns all of the Incentive
Distribution Rights (as such capitalized term is defined in the Partnership
Agreement) free and clear of all liens, encumbrances, security interests,
equities, charges or claims.

 

(m)                               GP
Inc. is the sole general partner of Plains Marketing, with a .001% general
partner interest in Plains Marketing, and the sole general partner of Plains
Pipeline, with a .001% general partner interest in Plains Pipeline; such
general partner interests have been duly authorized and validly issued in
accordance with the agreement of limited partnership of Plains Marketing and
the agreement of limited partnership of Plains Pipeline, respectively (in each
case, as in effect on the date hereof and as the same may be amended or
restated prior to the Closing Date, such agreements being referred to herein as
the “Plains Marketing Partnership Agreement” and the “Plains Pipeline
Partnership Agreement,” respectively); and GP Inc. owns such general partner
interests free and clear of all liens, encumbrances, security interests,
equities, charges or claims.

 

(n)                                 All
of the outstanding shares of capital stock or other equity interests (other
than general partner interests) of each Subsidiary and the Joint Venture (a)
have been duly authorized and validly issued (in the case of an interest in a
limited partnership or limited liability company, in accordance with the
Organizational Documents (as defined in Section 1(u) below) of such Subsidiary
or the Joint Venture), are fully paid (in the case of an interest in a limited
partnership or limited liability company, to the extent required under the
Organizational Documents of such Subsidiary or the Joint Venture) and
nonassessable (except (i) in the case of an interest in a Delaware limited
partnership or Delaware limited liability company, as such nonassessability may
be affected by Section 17-607 of the Delaware Revised Uniform Limited
Partnership Act (the “Delaware LP Act”) or Section 18-607 of the Delaware
Limited Liability Company Act (the “Delaware LLC Act”), as applicable, (ii) in
the case of an interest in a limited

 

5

 

partnership or
limited liability company formed under the laws of another domestic state, as
such nonassessability may be affected by similar provisions of such state’s
limited partnership or limited liability company statute, as applicable, and
(iii) in the case of an interest in an entity formed under the laws of a
foreign jurisdiction, as such nonassessability may be affected by similar
provisions of such jurisdiction’s corporate, partnership or limited liability
company statute, if any, as applicable) and (b) except for a 50% membership
interest in the Joint Venture owned by Vulcan Gas Storage LLC, are owned, directly
or indirectly, by the Partnership, free and clear of all liens, encumbrances,
security interests, equities, charges or claims.

 

(o)                                 All
outstanding general partner interests in each Subsidiary that is a partnership
have been duly authorized and validly issued in accordance with the
Organizational Documents of such Subsidiaries and are owned, directly or
indirectly, by the Partnership, free and clear of all liens, encumbrances,
security interests, equities, charges or claims.

 

(p)                                 The
Partnership has no direct or indirect majority-owned subsidiaries other than
the Subsidiaries, Plains LPG Marketing, L.P., a Texas limited partnership (“LPG
Marketing”), Atchafalaya Pipeline, L.L.C. (“Atchafalaya Pipeline”), Plains
Marketing International GP LLC (“PMI GP LLC”), Plains Marketing International,
L.P. (“PMI LP”) and Andrews Partners, LLC (“Andrews Partners”). None of LPG
Marketing, Atchafalaya Pipeline, PMI GP LLC, PMI LP or Andrews Partners,
individually or considered as a whole, would be deemed to be a significant
subsidiary (as such term is defined in Rule 405 under the Act). The Issuers
have no independent assets or operations and the guarantees of the Subsidiaries
are full and unconditional and joint and several. The footnotes to the
Partnership’s financial statements included or incorporated by reference in the
Offering Memorandum include the appropriate disclosure required by Note 1 to
Rule 3-10(f) of Regulation S-X, including the narrative disclosures specified
in paragraphs (i)(9) and (i)(10) of Rule 3-10.

 

(q)                                 The
offering and sale of the Securities as contemplated by this Agreement do not
give rise to any rights for or relating to the registration of any other
securities of the Issuers, except such rights as have been waived or satisfied.
The Securities, when issued and delivered against payment therefor as provided
herein, the Exchange Securities, when issued and delivered as provided in the
Registration Rights Agreement, the Indenture and Registration Rights Agreement,
will conform in all material respects to the descriptions thereof contained in
the Offering Memorandum. The Issuers have all requisite power and authority to
issue, sell and deliver the Securities, in accordance with and upon the terms
and conditions set forth in this Agreement, their respective Organizational
Documents, the Indenture and the Offering Memorandum and to issue and deliver
the Exchange Securities, in accordance with and upon the terms and conditions
set forth in this Agreement, the Registration Rights Agreement, their respective
Organizational Documents, the Indenture and the Offering Memorandum. At the
Closing Date, all corporate, partnership and limited liability company action,
as the case may be, required to be taken by the Plains Parties or any of their
stockholders, partners or members for the authorization, issuance, sale and
delivery of the Securities shall have been validly taken.

 

6

 

(r)                                    The
execution and delivery of, and the performance by each of the Plains Parties of
their respective obligations under, this Agreement have been duly and validly
authorized by each of the Plains Parties, and this Agreement has been duly
executed and delivered by each of the Plains Parties, and constitutes the valid
and legally binding agreement of each of the Plains Parties, enforceable
against each of the Plains Parties in accordance with its terms, provided
that the enforceability hereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating to or
affecting creditors’ rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as rights to indemnity and contribution hereunder
may be limited by federal or state securities laws.

 

(s)                                  The
execution and delivery of, and the performance by each of the Plains Parties of
their respective obligations under, the Indenture have been duly and validly
authorized by each of the Plains Parties, and the Indenture, assuming due
authorization, execution and delivery thereof by the Trustee, when executed and
delivered by each of the Plains Parties, will constitute the valid and legally
binding agreement of each of the Plains Parties, enforceable against each of
the Plains Parties in accordance with its terms; the Securities have been duly
authorized, and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers, will have been duly executed and delivered by each of the Issuers
and will constitute the valid and legally binding obligations of the Issuers,
enforceable against the Issuers in accordance with their terms and entitled to
the benefits of the Indenture; the Exchange Securities have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered in accordance with the Registration
Rights Agreement, will have been duly executed and delivered by each of the Issuers
and will constitute the valid and legally binding obligations of the Issuers,
enforceable against the Issuers in accordance with their terms and entitled to
the benefits of the Indenture; and the Registration Rights Agreement has been
duly and validly authorized and, when executed and delivered by each of the
Plains Parties, will constitute the valid and legally binding agreement of each
of the Plains Parties, enforceable against each of the Plains Parties in
accordance with its terms; provided that, with respect to each, the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors’ rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws.

 

(t)                                    The
Partnership Agreement is a valid and legally binding agreement of the General
Partner, enforceable against the General Partner in accordance with its terms;
the Plains Marketing Partnership Agreement is a valid and legally binding
agreement of GP Inc. and the Partnership, enforceable against each of them in
accordance with its terms; the Plains Pipeline Partnership Agreement is a valid
and legally binding agreement of GP Inc. and Plains Marketing, enforceable
against each of them in accordance with its terms; the agreement of limited
partnership of Basin LP (as in effect on the date hereof and as the same may be
amended or restated prior to the Closing Date, the “Basin LP Partnership
Agreement”) is a valid and legally binding agreement of Basin LLC and 

 

7

 

Plains Pipeline,
enforceable against each of them in accordance with its terms; the agreement of
limited partnership of Rancho LP (as in effect on the date hereof and as the
same may be amended or restated prior to the Closing Date, the “Rancho LP
Partnership Agreement”) is a valid and legally binding agreement of Rancho LLC
and Plains Pipeline, enforceable against each of them in accordance with its
terms; and the agreement of limited partnership of PMC LP (as in effect on the
date hereof and as the same may be amended or restated prior to the Closing
Date, the “PMC LP Partnership Agreement”) has been duly authorized, executed
and delivered by each of PMC NS and Plains Marketing and is a valid and legally
binding agreement of PMC NS and Plains Marketing enforceable against each of
them in accordance with its terms; the Limited Liability Company Agreement of
PMC LLC (as in effect on the date hereof and as the same may be amended or
restated prior to the Closing Date, the “PMC LLC Agreement”) has been duly
authorized, executed and delivered by Plains Marketing and is a valid and
legally binding agreement of Plains Marketing, enforceable against it in
accordance with its terms; the Limited Liability Company Agreement of LPG LLC
(as in effect on the date hereof and as the same may be amended or restated
prior to the Closing Date, the “LPG LLC Agreement”) has been duly authorized,
executed and delivered by Plains Marketing and is a valid and legally binding
agreement of Plains Marketing, enforceable against it in accordance with its
terms; the agreement of limited partnership of LPG LP (as in effect on the date
hereof and as the same may be amended or restated prior to the Closing Date,
the “LPG LP Partnership Agreement”) is a valid and legally binding agreement of
LPG LLC and Plains Marketing, enforceable against each of them in accordance
with its terms; the Limited Liability Company Agreement of Lone Star (as in
effect on the date hereof and as the same may be amended or restated prior to
the Closing Date, the “Lone Star LLC Agreement”) has been duly authorized,
executed and delivered by LPG LP and is a valid and legally binding agreement
of LPG LP, enforceable against it in accordance with its terms; and the Limited
Liability Company Agreement of the Joint Venture (as in effect on the date
hereof and as the same may be amended or restated prior to the Closing Date,
the “Gas Storage LLC Agreement”) has been duly authorized, executed and
delivered by the Partnership and, assuming due authorization, execution and
deliver by the other parties, thereto, is a valid and legally binding agreement
of the Partnership, enforceable against it in accordance with its terms; provided
that, with respect to each such agreement, the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws relating to or affecting creditors’ rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

 

(u)                                 None
of the offering, issuance and sale by the Issuers of the Securities, the
issuance of the Exchange Securities, the execution, delivery and performance of
this Agreement by the Plains Parties, the consummation of the transactions
contemplated hereby, the execution, delivery and performance of the Indenture
and the Registration Rights Agreement by the Plains Parties which are parties
thereto or the consummation of the transactions contemplated thereby (i)
conflicts or will conflict with or constitutes or will constitute a violation
of the agreement or certificate of limited partnership, limited liability
company agreement, certificate of formation, certificate or articles of
incorporation, bylaws or other similar organizational documents (in each case
as in effect on the date hereof and as the same may be amended or restated
prior to the Closing Date) 

 

8

 

(“Organizational
Documents”) of any of the Plains Parties, (ii) conflicts or will conflict with or
constitutes or will constitute a breach or violation of, a change of control or
a default under (or an event which, with notice or lapse of time or both, would
constitute such an event), any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which any of the Plains
Parties is a party or by which any of them or any of their respective
properties may be bound, (iii) violates or will violate any statute, law or
regulation or any order, judgment, decree or injunction of any court or
governmental agency or body directed to any of the Plains Parties or any of
their properties in a proceeding to which any of them or their property is a
party or (iv) will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any of the Plains Parties or the
Joint Venture, which conflicts, breaches, violations or defaults, in the case
of clauses (ii), (iii) or (iv), would have a material adverse effect upon the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Partnership, the Subsidiaries and the Joint
Venture, taken as a whole.

 

(v)                                 No
permit, consent, approval, authorization, order, registration, filing or
qualification of or with any court, governmental agency or body is required in
connection with the offering, issuance and sale by the Issuers of the
Securities, the issuance of the Exchange Securities, the execution, delivery
and performance of this Agreement by the Plains Parties, the consummation of
the transactions contemplated hereby, the execution, delivery and performance
of the Indenture and the Registration Rights Agreement by the Plains Parties
which are parties thereto or the consummation of the transactions contemplated thereby,
except for such permits, consents, approvals and similar authorizations as will
be obtained pursuant to the Registration Rights Agreement, under the Act and
the Trust Indenture Act, and as may be required under the Exchange Act and
state securities or “Blue Sky” laws.

 

(w)                               None
of the Plains Parties is in (i) violation of its Organizational Documents, or
of any law, statute, ordinance, administrative or governmental rule or
regulation applicable to it or of any decree of any court or governmental agency
or body having jurisdiction over it or (ii) breach, default (or an event which,
with notice or lapse of time or both, would constitute such an event) or
violation in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any agreement, indenture, lease or other instrument to which it is a party
or by which it or any of its properties may be bound, which breach, default or
violation would, if continued, have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Partnership, the Subsidiaries and the Joint Venture, taken as
a whole, or could materially impair the ability of any of the Plains Parties to
perform its obligations under this Agreement. To the knowledge of the Plains
Parties, no third party to any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any of the Plains Parties
is a party or by which any of them is bound or to which any of their properties
are subject, is in default under any such agreement, which breach, default or
violation would, if continued, have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Partnership, the Subsidiaries and the Joint Venture, taken as
a whole.

 

9

 

(x)                                   The
accountants, PricewaterhouseCoopers LLP, who have certified or shall certify
the audited financial statements included or incorporated by reference in the
Offering Memorandum (or any amendment or supplement thereto), are independent
registered public accountants with respect to the Plains Parties as required by
the Act and the applicable published rules and regulations thereunder.

 

(y)                                 At
March 31, 2006, the Partnership would have had, on an as adjusted basis as
indicated in the Offering Memorandum (and any amendment or supplement thereto),
a total capitalization as set forth therein. The financial statements
(including the related notes and supporting schedules) and other financial
information included or incorporated by reference in the Offering Memorandum
(and any amendment or supplement thereto) present fairly in all material
respects the financial position, results of operations and cash flows of the
entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated, except to the extent disclosed therein. The summary and selected
historical financial information included or incorporated by reference in the
Offering Memorandum (and any amendment or supplement thereto) is accurately
presented in all material respects and prepared on a basis consistent with the
audited and unaudited historical consolidated financial statements from which
it has been derived, except as described therein. The Partnership and the
Subsidiaries do not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations), not disclosed in the
Offering Memorandum. Since March 28, 2003, the Partnership has complied in all
material respects with Regulation G of the Exchange Act and Item 10 of
Regulation S-K of the Act, as applicable, in connection with the Offering
Memorandum and filings made by the Partnership with the Commission.

 

(z)                                   Except
as disclosed in the Offering Memorandum (or any amendment or supplement
thereto), subsequent to the respective dates as of which such information is
given in the Offering Memorandum (and any amendment or supplement thereto),
(i) none of the Plains Parties has incurred any liability or obligation, indirect,
direct or contingent, or entered into any transactions, not in the ordinary
course of business, that, singly or in the aggregate, is material to the Plains
Parties, taken as a whole, (ii) there has not been any material change in the
capitalization, or material increase in the short-term debt or long-term debt,
of the Plains Parties and (iii) there has not been any material adverse change,
or any development involving or which may reasonably be expected to involve,
singly or in the aggregate, a prospective material adverse change in the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Plains Parties, taken as a whole.

 

(aa)                            The
Plains Parties have good and indefeasible title to all real property and good
title to all personal property described in the Offering Memorandum as being
owned by them, free and clear of all liens, claims, security interests or other
encumbrances except (i) as provided in the Restated Credit Facility
(Uncommitted Senior Secured Discretionary Contango Facility) dated November 19,
2004 (as amended, the “Contango Credit Agreement”) among Plains Marketing, Bank
of America, N.A., as administrative agent thereunder and the lenders from time
to time party thereto, described 

 

10

 

in the Offering
Memorandum and (ii) such as do not materially interfere with the use of such
properties taken as a whole as described in the Offering Memorandum; and all
real property and buildings held under lease by any of the Plains Parties are
held under valid and subsisting and enforceable leases with such exceptions as
do not materially interfere with the use of such properties taken as a whole as
described in the Offering Memorandum.

 

(bb)                          Each
of the Plains Parties has such permits, consents, licenses, franchises,
certificates and authorizations of governmental or regulatory authorities (“permits”)
as are necessary to own its properties and to conduct its business in the
manner described in the Offering Memorandum, subject to such qualifications as
may be set forth in the Offering Memorandum and except for such permits the
failure of which to have obtained would not have, individually or in the
aggregate, a material adverse effect upon the ability of the Partnership, the
Subsidiaries and the Joint Venture considered as a whole to conduct their
businesses in all material respects as currently conducted and as contemplated
by the Offering Memorandum to be conducted; each of the Plains Parties has
fulfilled and performed all of its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any
impairment of the rights of the holder of any such permit, except for such
failures to perform, revocations, terminations and impairments that would not
have a material adverse effect upon the ability of the Partnership, the
Subsidiaries and the Joint Venture considered as a whole to conduct their businesses
in all material respects as currently conducted and as contemplated by the
Offering Memorandum to be conducted, subject in each case to such qualification
as may be set forth in the Offering Memorandum; and, except as described in the
Offering Memorandum, none of such permits contains any restriction that is
materially burdensome to the Plains Parties considered as a whole.

 

(cc)                            Each
of the Plains Parties has such consents, easements, rights-of-way or licenses
from any person (“rights-of-way”) as are necessary to conduct its business in
the manner described in the Offering Memorandum, subject to such qualifications
as may be set forth in the Offering Memorandum and except for such
rights-of-way the failure of which to have obtained would not have, individually
or in the aggregate, a material adverse effect upon the ability of the
Partnership, the Subsidiaries and the Joint Venture considered as a whole to
conduct their businesses in all material respects as currently conducted and as
contemplated by the Offering Memorandum to be conducted; each of the Plains
Parties has fulfilled and performed all its material obligations with respect
to such rights-of-way and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or would result
in any impairment of the rights of the holder of any such rights-of-way, except
for such failures to perform, revocations, terminations and impairments that
will not have a material adverse effect upon the ability of the Partnership,
the Subsidiaries and the Joint Venture considered as a whole to conduct their
businesses in all material respects as currently conducted and as contemplated
by the Offering Memorandum to be conducted, subject in each case to such qualification
as may be set forth in the Final Offering Memorandum; and, except as described
in the Offering Memorandum, none of such rights-of-way contains any restriction
that is materially burdensome to the Plains Parties considered as a whole.

 

11

 

(dd)                          None
of the Plains Parties is now, and after sale of the Securities to be sold by
the Issuers hereunder and application of the net proceeds from such sale as
described in the Offering Memorandum under the caption “Use of Proceeds,” none
of the Plains Parties will be, (i) an “investment company” or a company “controlled
by” an “investment company” within the meaning of the Investment Company Act,
(ii) a “public utility company,” “holding company” or a “subsidiary company”
of a “holding company” or an “affiliate” thereof, under the Public Utility
Holding Company Act of 1935, as amended, (iii) a “gas utility,” within the
meaning of Tex. Util. Code § 121.001 or (iv) a “public utility” or “utility”
within the meaning of the Public Utility Regulatory Act of Texas or under
similar laws of any state in which any such Plains Party does business.

 

(ee)                            None
of the Plains Parties has sustained since the date of the latest audited
financial statements included in the Offering Memorandum any material loss or
interference with its business from fire, explosion, flood or other calamity
whether or not covered by insurance, or from any labor dispute or court or
governmental action, investigation, order or decree, otherwise than as set forth
or contemplated in the Offering Memorandum.

 

(ff)                                Except
as described in the Offering Memorandum, none of the Plains Parties has
violated any environmental, safety, health or similar law or regulation
applicable to its business relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental Laws”), or lacks any permits, licenses or other
approvals required of them under applicable Environmental Laws to own, lease or
operate their properties and conduct their business as described in the
Offering Memorandum or is violating any terms and conditions of any such
permit, license or approval, which in each case would have a material adverse
effect on the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Partnership, the Subsidiaries and the
Joint Venture, taken as a whole.

 

(gg)                          No
labor dispute by the employees of any of the Plains Parties exists or, to the
knowledge of the Plains Parties, is imminent, which might reasonably be
expected to have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Partnership, the Subsidiaries and the Joint Venture, taken as a whole.

 

(hh)                          The
Plains Parties maintain insurance covering their properties, operations,
personnel and businesses against such losses and risks as are reasonably
adequate to protect them and their businesses in a manner consistent with other
businesses similarly situated. None of the Plains Parties has received notice
from any insurer or agent of such insurer that substantial capital improvements
or other expenditures will have to be made in order to continue such insurance,
and all such insurance is outstanding and duly in force on the date hereof and
will be outstanding and duly in force on the Closing Date.

 

(ii)                                  Except
as described in the Offering Memorandum, there is (i) no action, suit or
proceeding before or by any court, arbitrator or governmental agency, body or 

 

12

 

official, domestic or
foreign, now pending or, to the knowledge of the Plains Parties, threatened, to
which any of the Plains Parties, or any of their respective subsidiaries, is or
may be a party or to which the business or property of any of the Plains
Parties, or any of their respective subsidiaries, is or may be subject, (ii) no
statute, rule, regulation or order that has been enacted, adopted or issued by
any governmental agency or, to the knowledge of the Plains Parties, that has
been proposed by any governmental body and (iii) no injunction, restraining
order or order of any nature issued by a federal or state court or foreign
court of competent jurisdiction to which any of the Plains Parties, or any of
their respective subsidiaries, is or may be subject, that, in the case of
clauses (i), (ii) and (iii) above, is reasonably expected to (A) singly or in
the aggregate have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Partnership, the Subsidiaries and the Joint Venture, taken as a whole,
(B) prevent or result in the suspension of the offering and issuance of the
Securities or prevent the issuance of the Exchange Securities or
(C) challenge the validity of this Agreement, the Indenture, the
Securities, the Exchange Securities or the Registration Rights Agreement.

 

(jj)                                  No
Subsidiary is currently prohibited, directly or indirectly, from paying any
dividends to the Partnership, from making any other distribution on such
Subsidiary’s capital stock or partnership or limited liability company
interests, from repaying to the Partnership any loans or advances to such Subsidiary
from the Partnership or from transferring any of such Subsidiary’s property or
assets to the Partnership or any other Subsidiary of the Partnership, except as
described in or contemplated by the Offering Memorandum (exclusive of any
amendment or supplement thereto).

 

(kk)                            The
Partnership, each of the Subsidiaries and the Joint Venture maintains a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

 

(ll)                                  The
Partnership and, to the knowledge of the Plains Parties, the directors and
officers of GP LLC in their capacities as such, are in compliance in all
material respects with all applicable and effective provisions of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated
thereunder.

 

Any certificate signed by any officer of the Plains
Parties and delivered to the Initial Purchasers or counsel for the Initial
Purchasers in connection with the offering of the Securities shall be deemed a
representation and warranty by the Plains Parties, as to matters covered
thereby, to the Initial Purchasers.

 

2.                                       Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Issuers
agree to sell to each Initial 

 

13

 

Purchaser,
and each Initial Purchaser severally agrees to purchase from the Issuers, at a
purchase price of 98.944% of the principal amount thereof, the Securities.

 

3.                                       Delivery and Payment. Delivery of and payment for the Securities shall
be made at 10:00 A.M., New York City time, on May 12, 2006, or at such time on
such later date (not later than May 19, 2006,) as the Initial Purchasers shall
designate, which date and time may be postponed by agreement between the
Initial Purchasers and the Issuers (such date and time of delivery and payment
for the Securities being herein called the “Closing Date”). Delivery of the
Securities shall be made to the Initial Purchasers against payment by the
Initial Purchasers of the purchase price thereof to or upon the order of the
Issuers by wire transfer payable in same-day funds to the account specified by
the Issuers. Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Initial Purchasers shall otherwise
instruct.

 

4.                                       Offering by Initial Purchasers. Each Initial Purchaser represents and warrants
to and agrees with the Issuers that:

 

(a)                                  It
has not offered or sold, and will not offer or sell, any Securities except
(i) to those it reasonably believes to be qualified institutional buyers
(as defined in Rule 144A under the Act) and that, in connection with each such
sale, it has taken or will take reasonable steps to ensure that the purchaser of
such Securities is aware that such sale is being made in reliance on Rule 144A
or (ii) in accordance with the restrictions set forth in Exhibit B hereto.

 

(b)                                 Neither
it nor any person acting on its behalf has made or will make offers or sales of
the Securities in the United States by means of any form of general
solicitation or general advertising (within the meaning of Regulation D)
in the United States.

 

5.                                       Agreements. Each of the Plains Parties, jointly and severally, acknowledges and
agrees with the Initial Purchasers that:

 

(a)                                  The
Issuers will furnish to the Initial Purchasers and to counsel for the Initial
Purchasers, without charge, during the period referred to in paragraph (c)
below, as many copies of the Offering Memorandum and any amendments and supplements
thereto as they may reasonably request.

 

(b)                                 The
Issuers will not amend or supplement the Offering Memorandum, other than by
filing documents under the Exchange Act that are incorporated by reference
therein, without the prior written consent of the Initial Purchasers; provided,
however, that, prior to the completion of the distribution of the
Securities by the Initial Purchasers (as determined by the Initial Purchasers),
the Issuers will not file any document under the Exchange Act that is incorporated
by reference in the Offering Memorandum unless (i) prior to such proposed
filing, the Issuers have furnished the Initial Purchasers with a copy of such
document for their review and the Initial Purchasers have not reasonably
objected to the filing of such document or (ii) the Initial Purchasers have
reasonably objected and the Issuers have received advice of counsel that such
filing is necessary and appropriate. The Issuers will promptly advise the
Initial Purchasers when any document 

 

14

 

filed under the Exchange
Act that is incorporated by reference in the Offering Memorandum shall have
been filed with the Commission.

 

(c)                                  If
at any time prior to the completion of the distribution of the Securities by the
Initial Purchasers (as determined by the Initial Purchasers), any event occurs
as a result of which the Offering Memorandum, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it should be
necessary to amend or supplement the Offering Memorandum to comply with
applicable law, the Issuers promptly (i) will notify the Initial Purchasers of
any such event; (ii) subject to the requirements of paragraph (b) of this
Section 5, will prepare an amendment or supplement that will correct such
statement or omission or effect such compliance; and (iii) will supply any
supplemented or amended Offering Memorandum to the Initial Purchasers and
counsel for the Initial Purchasers without charge in such quantities as they
may reasonably request.

 

(d)                                 The
Issuers will arrange, if necessary, for the qualification of the Securities for
sale by the Initial Purchasers under the laws of such jurisdictions as the
Initial Purchasers may reasonably designate and will maintain such
qualifications in effect so long as reasonably required for the sale of the
Securities; provided that in no event shall either Issuer be obligated
to qualify to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject. The Issuers will promptly advise
the Initial Purchasers of the receipt by the Issuers of any notification with
respect to the suspension of the qualification of the Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose.

 

(e)                                  During
the period of two years after the Closing Date, none of the Plains Parties will
resell any Securities that have been acquired by any of them.

 

(f)                                    None
of the Plains Parties, nor any person acting on behalf of any of the Plains
Parties (other than the Initial Purchasers, as to whom the Plains Parties make
no representation), will, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, that is or will be integrated
with the sale of the Securities in a manner that would require the registration
of the Securities under the Act.

 

(g)                                 None
of the Plains Parties, nor any person acting on behalf of any of the Plains
Parties (other than the Initial Purchasers, as to whom the Plains Parties make
no representation), will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities in the United States.

 

(h)                                 So
long as any of the Securities are “restricted securities” within the meaning of
Rule 144(a)(3) under the Act, the Issuers will, during any period in which they
are not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act or they are not exempt from such reporting requirements pursuant
to and in compliance with 

 

15

 

Rule 12g3-2(b) under the
Exchange Act, provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Act. This
covenant is intended to be for the benefit of the holders, and the prospective
purchasers designated by such holders, from time to time of such restricted
securities. The information provided by the Issuers pursuant to this
Section 5(h) will not, at the date thereof, contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

 

(i)                                     None
of the Plains Parties, nor any person acting on behalf of any of the Plains
Parties (other than the Initial Purchasers, as to whom the Plains Parties make
no representation), will engage in any directed selling efforts with respect to
the Securities, and each of them will comply with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the
meanings given to them by Regulation S.

 

(j)                                     The
Issuers will cooperate with and assist the Initial Purchasers to permit the
Securities to be eligible for clearance and settlement through The Depository
Trust Company.

 

(k)                                  The
Plains Parties will not, for a period 60 days following the Execution Time,
without the prior written consent of the Initial Purchasers, offer, sell or
contract to sell, pledge or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by any of the Plains Parties or any person
in privity with the Plains Parties), directly or indirectly, or announce the
offering of, any U.S. dollar-denominated debt securities registered under the
Act or eligible for trading pursuant to Rule 144A issued or guaranteed by the
Plains Parties (other than the Securities), except the issuance of the Exchange
Securities or borrowings under the Amended and Restated Credit Agreement
[US/Canada Facilities] dated November 4, 2005 (as amended, the “Revolving
Agreement”) among the Partnership, PMC NS, PMC LP, as borrowers thereunder, Bank
of America, N.A., as administrative agent thereunder, Bank of America, N.A.,
acting through its Canada Branch, as Canadian administrative agent thereunder,
and various other agents thereunder and lenders from time to time party
thereto, and/or the Contango Credit Agreement.

 

(l)                                     None
of the Plains Parties, nor any person acting on its or their behalf, will take,
directly or indirectly, any action designed to or which has constituted or
which might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any security of
the Issuers to facilitate the sale or resale of the Securities.

 

(m)                               The
Issuers agree to pay the costs and expenses relating to the following
matters:  (i) the issuance of the
Securities and the fees of the Trustee; (ii) the preparation, printing or
reproduction of the Offering Memorandum and each amendment or supplement
thereto; (iii) the printing (or reproduction) and delivery (including postage, 

 

16

 

air freight charges and
charges for counting and packaging) of such copies of the Final Offering
Memorandum, and all amendments or supplements thereto, as may be reasonably
requested for use in connection with the offering and sale of the Securities;
(iv) the preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (v) the printing
(or reproduction) and delivery of this Agreement, any blue sky memorandum and
all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities (including, without limitation,
the Indenture and the Registration Rights Agreement); (vi) any registration or
qualification of the Securities for offer and sale under the securities or blue
sky laws of the several states as provided in Section 5(d) hereof
(including filing fees and the reasonable fees and expenses of counsel for the
Initial Purchasers relating to such registration and qualification);
(vii) if required, admitting the Securities for trading in the PORTAL
Market; (viii) the transportation and other expenses incurred by or on behalf of
the Issuers’ representatives in connection with presentations to prospective
purchasers of the Securities; (ix) the fees and expenses of the Issuers’
accountants and the fees and expenses of counsel (including local and special
counsel) for the Issuers; and (x) all other costs and expenses incident to the
performance by the Issuers of their obligations hereunder.

 

(n)                                 Without
the prior written consent of the Initial Purchasers, the Plains Parties have
not given and will not give to any prospective purchaser of the Securities any
written information relating to the offer and sale of the Securities, other
than the Offering Memorandum.

 

6.                                       Conditions to the Obligations of the Initial
Purchasers. The obligations of
the Initial Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Plains
Parties contained herein at the Execution Time and the Closing Date, to the
accuracy of the statements of the Plains Parties made in any certificates
pursuant to the provisions hereof, to the performance by the Plains Parties of
their obligations hereunder and to the following additional conditions:

 

(a)                                  The
Issuers shall have requested and caused Vinson & Elkins L.L.P.,
counsel for the Issuers, to furnish to the Initial Purchasers its opinion,
dated the Closing Date and addressed to the Initial Purchasers, to the effect
that:

 

(i)                                     Each
of GP LLC, the General Partner, the Partnership. the Subsidiaries (other than
the Canadian Subsidiaries) and the Joint Venture has been duly formed or
incorporated and is validly existing in good standing as a limited partnership,
limited liability company or corporation under the laws of its jurisdiction of
formation or incorporation with full partnership, limited liability company or
corporate power and authority, as the case may be, to own or lease its
properties and to conduct its business in each case in all material respects. Each
of GP LLC, the General Partner, the Partnership, the Subsidiaries (other than
the Canadian Subsidiaries) and the Joint Venture is duly registered or
qualified as a foreign limited partnership, limited liability company or
corporation, as the case 

 

17

 

may be, for the
transaction of business and is in good standing under the laws of the
jurisdictions set forth on Exhibit C to this Agreement.

 

(ii)                                  GP
LLC has full limited liability company power and authority to act as the
general partner of the General Partner; the General Partner has full
partnership power and authority to act as the general partner of the
Partnership; GP Inc. has full corporate power and authority to act as the
general partner of Plains Marketing and Plains Pipeline; Rancho LLC has full
limited liability company power and authority to act as the general partner of
Rancho LP and Basin LLC has full limited liability company power and authority
to act as the general partner of Basin LP, in each case in all material
respects.

 

(iii)                               GP
LLC is the sole general partner of the General Partner, with a 1.0% general
partner interest in the General Partner, and the General Partner is the sole
general partner of the Partnership, with a 2.0% general partner interest in the
Partnership; such general partner interests have been duly authorized and
validly issued in accordance with the General Partner Partnership Agreement and
the Partnership Agreement, respectively; the General Partner owns all of the
Incentive Distribution Rights; GP LLC owns such general partner interest in the
General Partner, and the General Partner owns such general partner interest in
the Partnership and the Incentive Distribution Rights, in each case, free and
clear of all liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial Code of the
States of Delaware or Texas naming GP LLC or the General Partner as debtor is
on file in the office of the Secretary of State of the States of Delaware or
Texas or (B) otherwise known to such counsel, without independent investigation,
other than those created by or arising under the Delaware LP Act.

 

(iv)                              GP
Inc. is the sole general partner of Plains Marketing, with a .001% general
partner interest in Plains Marketing, and the sole general partner of Plains
Pipeline, with a .001% general partner interest in Plains Pipeline; such
general partner interests have been duly authorized and validly issued in
accordance with the Plains Marketing Partnership Agreement and the Plains
Pipeline Partnership Agreement, respectively; and GP Inc. owns such general
partner interests free and clear of all liens, encumbrances, security
interests, charges or claims (A) in respect of which a financing statement
under the Uniform Commercial Code of the States of Delaware or Texas naming GP
Inc. as debtor is on file in the office of the Secretary of State of the States
of Delaware or Texas or (B) otherwise known to such counsel, without
independent investigation, other than those created by or arising under the
Texas LP Act.

 

(v)                                 All
of the outstanding shares of capital stock or other equity interests (other
than general partner interests) of each Subsidiary (other than the Canadian
Subsidiaries, as to which such counsel need not express any opinion) and the
Joint Venture (a) have been duly authorized and validly issued (in the case of
an interest in a limited partnership or limited liability company, in
accordance with the Organizational Documents of such Subsidiary or the Joint
Venture), are 

 

18

 

fully paid (in the
case of an interest in a limited partnership or limited liability company, to
the extent required under the Organizational Documents of such Subsidiary or
the Joint Venture) and nonassessable (except (i) in the case of an interest in
a Delaware limited partnership or Delaware limited liability company, as such
nonassessability may be affected by Section 17-607 of the Delaware LP Act or
Section 18-607 of the Delaware LLC Act, as applicable and (ii) in the case of
an interest in a limited partnership or limited liability company formed under
the laws of another domestic state, as such nonassessability may be affected by
similar provisions of such state’s limited partnership or limited liability
company statute, as applicable) and (b) except for a 50% membership interest in
the Joint Venture owned by Vulcan Gas Storage LLC, are owned, directly or
indirectly, by the Partnership, free and clear of all liens, encumbrances,
security interests, charges or claims (A) in respect of which a financing
statement under the Uniform Commercial Code of the States of Delaware or Texas
naming the Partnership as debtor or, in the case of capital stock or other
equity interests of a Subsidiary owned directly by one or more other
Subsidiaries (other than the Canadian Subsidiaries), naming any such other
Subsidiaries as debtor(s), is on file in the office of the Secretary of State
of the States of Delaware or Texas or (B) otherwise known to such counsel,
without independent investigation, other than those created by or arising under
the corporate, limited liability company or partnership laws of the
jurisdiction of formation or incorporation of the respective Subsidiary (other
than such laws of the jurisdiction of formation or incorporation of the
Canadian Subsidiaries) or the Joint Venture, as the case may be.

 

(vi)                              All
outstanding general partner interests in each Subsidiary that is a partnership
(other than the Canadian Subsidiaries) have been duly authorized and validly
issued in accordance with the respective Organizational Documents of such
Subsidiary and are owned, directly or indirectly, by the Partnership, free and
clear of all liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial Code of the
States of Delaware or Texas naming the Partnership as debtor or, in the case of
general partner interests of a Subsidiary owned directly by one or more other
Subsidiaries (other than the Canadian Subsidiaries), naming any such other
Subsidiaries as debtor(s), is on file in the office of the Secretary of State
of the States of Delaware or Texas or (B) otherwise known to such counsel,
without independent investigation, other than those created by or arising under
the partnership laws of the jurisdiction of formation of the respective
Subsidiary, as the case may be.

 

(vii)                           To
such counsel’s knowledge, the offering or sale of the Securities as
contemplated by this Agreement does not give rise to any rights for or relating
to the registration of any other securities of the Issuers, except such rights
as have been waived or satisfied. The Issuers have all requisite power and
authority to issue, sell and deliver the Securities, in accordance with and
upon the terms and conditions set forth in this Agreement, their respective
Organizational Documents, the Indenture and Offering Memorandum and to issue
and deliver the Exchange Securities, in accordance with and upon the terms and
conditions set 

 

19

 

forth in this Agreement,
the Registration Rights Agreement, their respective Organizational Documents,
the Indenture and the Offering Memorandum.

 

(viii)                        This
Agreement has been duly authorized, executed and delivered by each of the
Plains Parties (other than the Canadian Subsidiaries, as to which such counsel
need not express an opinion).

 

(ix)                                The
Indenture has been duly authorized, executed and delivered by each of the
Plains Parties (other than the Canadian Subsidiaries, as to which such counsel
need not express an opinion) and (assuming the due authorization, execution and
delivery thereof by the Trustee) is a valid and legally binding agreement of
each of the Plains Parties, enforceable against each of them in accordance with
its terms; provided that the enforceability thereof may be limited by
(A) applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws from time to time in effect affecting creditors’
rights and remedies generally and by general principles of equity (regardless
of whether such principles are considered in a proceeding in equity or at law)
and (B) public policy, applicable law relating to fiduciary duties and
indemnification and an implied covenant of good faith and fair dealing.

 

(x)                                   The
Securities have been duly and validly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers under this Agreement, will constitute
legal, valid, binding and enforceable obligations of the Issuers entitled to
the benefits of the Indenture; provided that the enforceability thereof
may be limited by (A) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws from time to time in effect affecting
creditors’ rights and remedies generally and by general principles of equity
(regardless of whether such principles are considered in a proceeding in equity
or at law) and (B) public policy, applicable law relating to fiduciary duties
and indemnification and an implied covenant of good faith and fair dealing.

 

(xi)                                The
Exchange Securities have been duly and validly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered pursuant to the Registration Rights Agreement, will constitute legal,
valid, binding and enforceable obligations of the Issuers entitled to the
benefits of the Indenture; provided that the enforceability thereof may
be limited by (A) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws from time to time in effect
affecting creditors’ rights and remedies generally and by general principles of
equity (regardless of whether such principles are considered in a proceeding in
equity or at law) and (B) public policy, applicable law relating to
fiduciary duties and indemnification and an implied covenant of good faith and
fair dealing.

 

(xii)                             The
Registration Rights Agreement has been duly authorized, executed and delivered
by each of the Plains Parties that are a party thereto (other than the Canadian
Subsidiaries, as to which such counsel need not express an 

 

20

 

opinion), and is a
valid and legally binding agreement of each of the Plains Parties, enforceable
against each of them in accordance with its terms; provided that the
enforceability thereof may be limited by (A) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws from time to
time in effect affecting creditors’ rights and remedies generally and by
general principles of equity (regardless of whether such principles are
considered in a proceeding in equity or at law) and (B) public policy,
applicable law relating to fiduciary duties and indemnification and an implied
covenant of good faith and fair dealing.

 

(xiii)                          The
Partnership Agreement is a valid and legally binding agreement of the General
Partner, enforceable against the General Partner in accordance with its terms;
the Plains Marketing Partnership Agreement is a valid and legally binding
agreement of GP Inc. and the Partnership, enforceable against each of them in
accordance with its terms; the Plains Pipeline Partnership Agreement is a valid
and legally binding agreement of GP Inc. and Plains Marketing enforceable
against each of them in accordance with its terms; the Basin LP Partnership
Agreement is a valid and legally binding agreement of Basin LLC and Plains
Pipeline, enforceable against each of them in accordance with its terms; the Rancho
LP Partnership Agreement is a valid and legally binding agreement of Rancho LLC
and Plains Pipeline, enforceable against each of them in accordance with its
terms; the PMC LP Partnership Agreement has been duly authorized, executed and
delivered by Plains Marketing and is a valid and legally binding agreement of
Plains Marketing enforceable against it in accordance with its terms; the PMC
LLC Agreement has been duly authorized, executed and delivered by Plains
Marketing and is a valid and legally binding agreement of Plains Marketing,
enforceable against it in accordance with its terms; the LPG LLC Agreement has
been duly authorized, executed and delivered by Plains Marketing and is a valid
and legally binding agreement of Plains Marketing, enforceable against it in
accordance with its terms; the LPG LP Partnership Agreement is a valid and
legally binding agreement of LPG LLC and Plains Marketing, enforceable against
each of them in accordance with its terms; the Lone Star LLC Agreement has been
duly authorized, executed and delivered by LPG LP and is a valid and legally
binding agreement of LPG LP, enforceable against it in accordance with its
terms; the Gas Storage LLC Agreement has been duly authorized, executed and
delivered by the Partnership and, assuming due authorization, execution and
delivery by the other parties thereto, is a valid and legally binding agreement
of the Partnership enforceable against it in accordance with its terms; provided
that, with respect to each such agreement (other than the PMC LP Partnership
Agreement, as to which such counsel need not express an opinion), the
enforceability thereof may be limited by (A) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws from time to
time in effect affecting creditors’ rights and remedies generally and by
general principles of equity (regardless of whether such principles are
considered in a proceeding in equity or at law) and (B) public policy,
applicable law relating to fiduciary duties and indemnification and an implied
covenant of good faith and fair dealing.

 

21

 

(xiv)                         None
of the offering, issuance and sale by the Issuers of the Securities, the
issuance of the Exchange Securities, the execution, delivery and performance of
this Agreement by the Plains Parties, the consummation of the transactions
contemplated hereby, the execution, delivery and performance of the Indenture
and the Registration Rights Agreement by the Plains Parties which are parties
thereto or the consummation of the transactions contemplated thereby (A)
constitutes or will constitute a violation of the Organizational Documents
(other than the Organizational Documents of the Canadian Subsidiaries) of any
of the Plains Parties, (B) conflicts or will conflict with or constitutes
or will constitute a breach or violation of, a change of control or a default
under (or an event which, with notice or lapse of time or both, would
constitute such an event), any agreement filed as an exhibit to any document
incorporated by reference into the Offering Memorandum (including any amendment
or supplement thereto) (other than the Revolving Agreement and the Contango
Credit Agreement, as to which such counsel need not express an opinion), (C) results
or will result in any violation of the Delaware LP Act, the Delaware LLC Act,
the DGCL, the laws of the State of Texas or federal law, or (D) results or will
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of any of the Plains Parties (other than the Canadian
Subsidiaries) or the Joint Venture, which in the case of clauses (B), (C) or
(D) would reasonably be expected to have a material adverse effect on the
financial condition, business or results of operations of the Partnership, the
Subsidiaries and the Joint Venture, taken as a whole.

 

(xv)                            No
permit, consent, approval, authorization, order, registration, filing or
qualification of or with any federal, Delaware or Texas court, governmental
agency or body having jurisdiction over the Plains Parties or any of their
respective properties is required for the offering, issuance and sale by the
Issuers of the Securities, the issuance of the Exchange Securities, the
execution, delivery and performance of this Agreement by the Plains Parties,
the consummation of the transactions contemplated hereby, the execution,
delivery and performance of the Indenture and the Registration Rights Agreement
by the Plains Parties which are parties thereto or the consummation of the
transactions contemplated thereby, except as will be obtained pursuant to the
Registration Rights Agreement, under the Act and the Trust Indenture Act and as
may be required under the Exchange Act and state securities or “Blue Sky” laws,
as to which such counsel need not express any opinion.

 

(xvi)                         The
statements in the Offering Memorandum under the captions “Description of Notes,”
“Exchange Offer; Registration Rights” and “Certain United States Federal Income
Tax Considerations,” insofar as they constitute descriptions of agreements or
refer to statements of law or legal conclusions, are accurate in all material
respects, and the Securities, the Exchange Securities, the Indenture and the
Registration Rights Agreement conform in all material respects to the
descriptions thereof contained in the Offering Memorandum.

 

22

 

(xvii)                      None
of the Plains Parties is an “investment company” as such term is defined in the
Investment Company Act.

 

(xviii)                   Assuming
the accuracy of the representations and warranties and compliance with the
agreements contained herein, no registration of the Securities under the Act,
and no qualification of an indenture under the Trust Indenture Act, are
required for the offer and sale by the Issuers to the Initial Purchasers and
the initial resale by the Initial Purchasers of the Securities in the manner
contemplated by this Agreement.

 

(xix)                           The
documents incorporated by reference in the Offering Memorandum (including any
amendment or supplement thereto) (except for financial statements and the notes
and schedules thereto and other financial information included in any such
incorporated documents, as to which such counsel need not express any opinion)
comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder.

 

In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Plains Parties, representatives of the independent registered public
accountants of the Partnership and your representatives, at which the contents
of the Offering Memorandum and related matters were discussed, and although
such counsel has not independently verified, is not passing on, and is not
assuming any responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum (except to the extent specified
in the foregoing opinion), no facts have come to such counsel’s attention that
lead such counsel to believe that the Preliminary Offering Memorandum and the
Pricing Supplement as of the Execution Time and as of the Closing Date, and the
Final Offering Memorandum as of its date and as of the Closing Date (in each
case other than (i) the financial statements included or incorporated by
reference therein, including the notes and schedules thereto and the auditors’
reports thereon, and (ii) the other financial and statistical information
included or incorporated by reference therein, as to which such counsel need
not comment), contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.

 

In rendering such opinion, such counsel may (A) rely
in respect of matters of fact upon certificates of officers and employees of
the Plains Parties and upon information obtained from public officials, (B)
assume that all documents submitted to them as originals are authentic, that
all copies submitted to them conform to the originals thereof, and that the
signatures on all documents examined by them are genuine, (C) state that their
opinion is limited to federal laws, the Delaware LP Act, the Delaware LLC Act,
the DGCL, the laws of the State of Texas and the contract laws of the State of
New York, (D) with respect to the opinions expressed in paragraph (i) above as
to the due qualification or registration as a foreign limited partnership, corporation
or limited liability company, as the case may be, of each of the Plains
Parties, state that such opinions are based upon certificates of foreign
qualification or registration provided by the Secretary of State of 

 

23

 

the States listed on Exhibit C hereto (each of which
shall be dated as of a date not more than fourteen days prior to the Closing
Date and shall be provided to you) and (E) state that they express no opinion
with respect to (i) any permits to own or operate any real or personal property
or (ii) state or local taxes or tax statutes to which any of the limited
partners of the Partnership or any of the Plains Parties may be subject.

 

(b)                                 The
Initial Purchasers shall have received on the Closing Date, an opinion of
Fulbright & Jaworski L.L.P., special counsel for the Plains Parties, dated
the Closing Date and addressed to the Initial Purchasers, to the effect that
none of the offering, issuance or sale by the Issuers of the Securities, the
issuance of the Exchange Securities, the execution, delivery and performance of
this Agreement by the Plains Parties, the consummation of the transactions
contemplated hereby, the execution, delivery and performance of the Indenture
and the Registration Rights Agreement by the Plains Parties which are parties
thereto or the consummation of the transactions contemplated thereby, result in
a breach of, or constitutes a default under (or an event which, with notice or
lapse of time or both, would constitute such an event) the provisions of any
Credit Facility (as defined in Annex A to such opinion, which shall include the
Revolving Agreement and the Contango Credit Agreement).

 

In rendering such opinion, such counsel may (A) rely
in respect of matters of fact upon certificates of officers and employees of
the Plains Parties and upon information obtained from public officials, (B)
assume that all documents submitted to them as originals are authentic, that
all copies submitted to them conform to the originals thereof, and that the
signatures on all documents examined by them are genuine and (C) state that
such opinions are limited to the laws of the State of Texas, excepting
therefrom municipal and local ordinances and regulations.

 

In rendering such opinion, such counsel shall state
that such opinion letter may be relied upon only by the Initial Purchasers and
their counsel in connection with the transactions contemplated by this
Agreement and no other use or distribution of such opinion letter may be made
without such counsel’s prior written consent.

 

(c)                                  The
Initial Purchasers shall have received on the Closing Date an opinion of Tim
Moore, general counsel for GP LLC, dated the Closing Date and addressed to the
Initial Purchasers, to the effect that:

 

(i)                                     To
the knowledge of such counsel, none of the Plains Parties is in (A) breach or
violation of the provisions of its Organizational Documents or (B) default (and
no event has occurred which, with notice or lapse of time or both, would
constitute such a default) or violation in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any agreement, indenture, lease or other
instrument to which it is a party or by which it or any of its properties may
be bound, which breach, default or violation, if continued, would reasonably be
expected to have a material adverse effect on the condition, business or
operations of the Partnership, the Subsidiaries and the Joint Venture, taken as
a whole, or would reasonably be 

 

24

 

expected to
materially impair the ability of any of the Plains Parties to perform their
obligations under this Agreement.

 

(ii)                                  None
of the offering, issuance and sale by the Issuers of the Securities, the
issuance of the Exchange Securities, the execution, delivery and performance by
the Plains Parties of this Agreement, the consummation of the transactions
contemplated hereby, the execution, delivery and performance of the Indenture
and the Registration Rights Agreement by the Plains Parties which are parties
thereto or the consummation of the transactions contemplated thereby
(A) constitutes or will constitute a breach or violation of, a change of
control or a default under (or an event which, with notice or lapse of time or
both, would constitute such an event) any bond, debenture, note or any other
evidence of indebtedness, indenture or any other material agreement or
instrument known to such counsel to which a Plains Party is a party or by which
any one of them may be bound (other than any other agreement filed as an
exhibit to any documents incorporated by reference into the Offering Memorandum
(including any amendment or supplement thereto) or any Credit Agreement (as
defined in Annex A to such opinion)) or (B) violates or will violate any
statute, law or regulation or any order, judgment, decree or injunction of any
court or governmental agency or body directed to any of the Plains Parties or
any of their properties in a proceeding to which any of them is a party, which
would, in the case of either (A) or (B), reasonably be expected to have a
material adverse effect on the condition, business or operations of the
Partnership, the Subsidiaries and the Joint Venture, taken as a whole.

 

(iii)                               To
the knowledge of such counsel, each of the Plains Parties has such permits,
consents, licenses, franchises and authorizations (“permits”) issued by the
appropriate federal, state or local governmental or regulatory authorities as
are necessary to own or lease its properties and to conduct its business in the
manner described in the Offering Memorandum, subject to such qualifications as
may be set forth in the Offering Memorandum, and except for such permits which,
if not obtained, would not reasonably be expected to have, individually or in
the aggregate, a material adverse effect upon the operations conducted by the
Partnership, the Subsidiaries and the Joint Venture, taken as a whole; and, to
the knowledge of such counsel, none of the Plains Parties has received any
notice of proceedings relating to the revocation or modification of any such
permits which, individually or in the aggregate, would reasonably be expected
to have a material adverse effect upon the operations conducted by the Partnership,
the Subsidiaries and the Joint Venture, taken as a whole.

 

(iv)                              Except
as described in the Offering Memorandum, to the knowledge of such counsel,
there is no litigation proceeding, or governmental investigation pending or
threatened against any of the Plains Parties which would be reasonably likely
to have a material adverse effect on the condition, business, properties, or
operations of the Partnership, the Subsidiaries and the Joint Venture, taken as
a whole.

 

25

 

In addition, such counsel shall state that he has
participated in discussions with officers and other representatives of the
Plains Parties and the independent registered public accountants of the
Partnership and your representatives, at which the contents of the Offering
Memorandum and related matters were discussed, and although such counsel has
not independently verified, is not passing on, and is not assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in, the Offering Memorandum, no facts have come to such counsel’s
attention that lead such counsel to believe that the Preliminary Offering
Memorandum and the Pricing Supplement as of the Execution Time and as of the
Closing Date, and the Final Offering Memorandum as of its date and as of the
Closing Date (in each case other than (i) the financial statements included or
incorporated by reference therein, including the notes and schedules thereto
and the auditors’ reports thereon, and (ii) the other financial and statistical
information included or incorporated by reference therein, as to which such
counsel need not comment), contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.

 

In rendering such opinion, such counsel may (A) rely
in respect of matters of fact upon certificates of officers and employees of
the Plains Parties and upon information obtained from public officials, (B)
assume that all documents submitted to him as originals are authentic, that all
copies submitted to him conform to the originals thereof, and that the
signatures on all documents examined by him are genuine, (C) state that such
opinions are limited to federal laws and the Delaware LP Act, the Delaware LLC
Act and the DGCL and the laws of the State of Texas and (D) state that he
expresses no opinion with respect to state or local taxes or tax statutes.

 

(d)                                 The
Initial Purchasers shall have received on the Closing Date, an opinion of
Bennett Jones LLP with respect to the Province of Alberta, the Province of Nova
Scotia and the federal laws of Canada, dated the Closing Date and addressed to
the Initial Purchasers, to the effect that:

 

(i)                                     Each
of the Canadian Subsidiaries has been duly formed and is validly existing in
good standing as a limited partnership or unlimited liability company under the
laws of its jurisdiction of formation with all necessary partnership or corporate
power and authority to own or lease its properties, as the case may be, in all
material respects as described in the Offering Memorandum, and to conduct its
business as currently conducted and as proposed in the Offering Memorandum to
be conducted. PMC NS has all necessary corporate power and authority to act as
general partner of PMC LP in all material respects as described in the Offering
Memorandum. Each of the Canadian Subsidiaries is duly registered extra-provincially
for the transaction of business and is in good standing under the laws of the
jurisdictions set forth on Exhibit C to this Agreement.

 

(ii)                                  PMC
NS is the sole general partner of PMC LP with a 0.01% interest in PMC LP; such
interest has been duly authorized and validly issued in accordance with the PMC
LP Partnership Agreement; and PMC NS owns such 

 

26

 

interest free and
clear of all liens, encumbrances, security interests, charges or claims in
respect of which a financing statement under the laws of the Provinces of Nova
Scotia or Alberta naming PMC NS as debtor is on file.

 

(iii)                               Plains
Marketing is the sole limited partner of PMC LP with a 99.99% limited partner
interest in PMC LP; such limited partner interest has been duly authorized and
validly issued in accordance with the PMC LP Partnership Agreement and is fully
paid (to the extent required under the PMC LP Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by matters
described in the PMC LP Partnership Agreement).

 

(iv)                              PMC
LLC is the registered holder of 100% of the issued and outstanding capital
stock of PMC NS; such share capital has been duly authorized and validly issued
in accordance with the PMC NS Memorandum and Articles of Association, as fully
paid and nonassessable shares (except as such nonassessability may be affected
by the laws of the Province of Nova Scotia).

 

(v)                                 This
Agreement has been duly authorized and validly executed and delivered by each
of PMC LP and PMC NS.

 

(vi)                              The
Indenture has been duly authorized, executed and delivered by each of PMC LP
and PMC NS. The laws of the Province of Alberta would permit an action to be
brought against PMC LP or PMC NS before a court of competent jurisdiction in
the Province of Alberta to enforce a final and conclusive in personam judgment
for a sum certain obtained in a New York court relating to the Indenture which
is not impeachable as void or voidable under the internal laws of the State of
New York which action is predicated solely upon civil liability, subject to
certain exceptions set forth in such opinion.

 

(vii)                           No
permit, consent, approval, authorization, order, registration, filing or
qualification of or with any court, governmental agency or body of the federal
government of Canada or the Province of Alberta is required for the offering,
issuance and sale by the Issuers of the Securities, the issuance of the
Exchange Securities, or the execution, delivery and performance of the
Indenture by the Plains Parties.

 

(viii)                        The
PMC LP Partnership Agreement has been duly authorized, executed and delivered
by PMC NS and is a valid and legally binding agreement of PMC NS and Plains
Marketing enforceable against each of them in accordance with its terms; provided
that, with respect to such agreement, the enforceability thereof may be limited
by (A) applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws from time to time in effect affecting creditors’
rights and remedies generally and by general principles of equity (regardless
of whether such principles are considered in a proceeding in equity or at law)
and (B) public policy, applicable law relating to fiduciary duties and
indemnification and an implied covenant of good faith and fair dealing.

 

27

 

(ix)                                None
of the offering, issuance and sale by the Issuers of the Securities, the
issuance of the Exchange Securities, the execution, delivery and performance of
this Agreement by the Plains Parties, the consummation of the transactions
contemplated hereby, the execution, delivery and performance of the Indenture
and the Registration Rights Agreement by the Plains Parties which are parties
thereto or the consummation of the transactions contemplated thereby
constitutes or will constitute a violation of the Organizational Documents of
the Canadian Subsidiaries.

 

(x)                                   To
the knowledge of such counsel, each of PMC LP and PMC NS has such permits,
consents, licenses, franchises and authorizations (“permits”) issued by the
appropriate federal or provincial or regulatory authorities as are necessary to
own or lease its properties and to conduct its business as currently conducted
and as proposed in the Offering Memorandum to be conducted, subject to such
qualifications as may be set forth in the Offering Memorandum, and except for
such permits, consents, licenses, franchises and authorizations which, if not
obtained would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect upon the operations conducted by PMC LP
and PMC NS taken as a whole.

 

In rendering such opinion, such counsel may (A) rely
in respect of matters of fact upon certificates of officers and employees of
the Plains Parties and upon information obtained from public officials, (B)
assume that all documents submitted to them as originals are authentic, that
all copies submitted to them conform to the originals thereof, and that the
signatures on all documents examined by them are genuine, (C) state that such opinions
are limited to federal laws of Canada and the laws of the Provinces of Alberta
and Nova Scotia, excepting therefrom municipal and local ordinances and
regulations and (D) state that they express no opinion with respect to state or
local taxes or tax statutes to which any of the limited partners of the
Partnership or any of the Plains Parties may be subject.

 

In rendering such opinion, such counsel shall state
that (A) Vinson & Elkins L.L.P. is thereby authorized to rely upon such
opinion letter in connection with the transactions contemplated by this
Agreement as if such opinion letter were addressed and delivered to them on the
date thereof and (B) subject to the foregoing, such opinion letter may be
relied upon only by the Initial Purchasers and their counsel in connection with
the transactions contemplated by this Agreement and no other use or
distribution of this opinion letter may be made without such counsel’s prior
written consent.

 

(e)                                  The
Initial Purchasers shall have received on the Closing Date an opinion of Baker
Botts L.L.P., counsel for the Initial Purchasers, dated the Closing Date and
addressed to the Initial Purchasers, with respect to the issuance and sale of
the Securities, the issuance of the Exchange Securities, the Indenture, the Registration
Rights Agreement, the Offering Memorandum and other related matters the Initial
Purchasers may reasonably require.

 

28

 

(f)                                    The
Initial Purchasers shall have received letters addressed to the Initial
Purchasers, dated, respectively, the date of this Agreement, the time of
purchase and the Closing Date from PricewaterhouseCoopers LLP, independent
registered public accountants, in form and substance satisfactory to the
Initial Purchasers, containing statements and information of the type
ordinarily included in accountants’ “comfort letters” to initial purchasers,
delivered according to Statement of Auditing Standards Nos. 72, 76 and 100 (or
any successor bulletins), with respect to the audited and unaudited financial
statements and certain financial information contained or incorporated by
reference in the Preliminary Offering Memorandum, the Pricing Supplement and
the Final Offering Memorandum.

 

(g)                                 The
Plains Parties shall not have failed at or prior to the Closing Date to have
performed or complied in all material respects with any of their agreements
herein contained and required to be performed or complied with by them
hereunder at or prior to the Closing Date.

 

(h)                                 The
Plains Parties shall have furnished or caused to be furnished to you such
further certificates and documents as you shall have reasonably requested.

 

(i)                                     There
shall have been furnished to you at the Closing Date a certificate reasonably
satisfactory to you, signed on behalf of the Partnership by the President or
any Vice President and the Chief Financial Officer or Chief Accounting Officer
of GP LLC to the effect that:  (A) the
representations and warranties of each of the Partnership, the General Partner
and GP LLC contained in this Agreement were true and correct at and as of the
Execution Time and are true and correct at and as of the Closing Date as though
made at and as of the Closing Date; (B) each of the Partnership, the
General Partner and GP LLC has in all material respects performed all
obligations and satisfied all conditions required to be performed or satisfied
by it pursuant to the terms of this Agreement at or prior to the Closing Date;
and (C) since the date of the most recent financial statements included or
incorporated by reference in the Offering Memorandum (exclusive of any
amendment or supplement thereto), there has been no material adverse change in
the condition (financial or otherwise), business, prospects, properties, net
worth or results of operations of the Partnership and the Subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Offering Memorandum
(exclusive of any amendment or supplement thereto).

 

(j)                                     There
shall have been furnished to you at the Closing Date a certificate reasonably
satisfactory to you, signed on behalf of GP Inc. by the President or any Vice
President of GP Inc. to the effect that: 
(A) the representations and warranties of each of GP Inc., Plains
Marketing, Plains Pipeline, PMC LLC, Basin LLC, Basin LP, Rancho LLC and Rancho
LP contained in this Agreement were true and correct at and as of the Execution
Time and are true and correct at and as of the Closing Date as though made at
and as of the Closing Date; (B) each of GP Inc., Plains Marketing, Plains
Pipeline, PMC LLC, Basin LLC, Basin LP, Rancho LLC and Rancho LP has in all
material respects performed all obligations and satisfied all conditions
required to be performed or satisfied by it pursuant to the terms of this
Agreement at or prior to the Closing Date; and (C) 

 

29

 

since the date of
the most recent financial statements included or incorporated by reference in
the Offering Memorandum (exclusive of any amendment or supplement thereto),
there has been no material adverse change in the condition (financial or
otherwise), business, prospects, properties, net worth or results of operations
of the Partnership and the Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated by the Offering Memorandum (exclusive of any amendment
or supplement thereto).

 

(k)                                  There
shall have been furnished to you at the Closing Date a certificate reasonably
satisfactory to you, signed on behalf of PAA Finance by the President or any
Vice President of PAA Finance to the effect that:  (A) the representations and warranties of PAA
Finance contained in this Agreement were true and correct at and as of the
Execution Time and are true and correct at and as of the Closing Date as though
made at and as of the Closing Date and (B) PAA Finance has in all material
respects performed all obligations and satisfied all conditions required to be
performed or satisfied by it pursuant to the terms of this Agreement at or
prior to the Closing Date.

 

(l)                                     There
shall have been furnished to you at the Closing Date a certificate reasonably
satisfactory to you, signed on behalf of PMC NS by the President or any Vice
President of PMC NS to the effect that: 
(A) the representations and warranties of each of PMC NS and PMC LP
contained in this Agreement were true and correct at and as of the Execution
Time and are true and correct at and as of the Closing Date as though made at
and as of the Closing Date and (B) each of PMC NS and PMC LP has in all
material respects performed all obligations and satisfied all conditions
required to be performed or satisfied by it pursuant to the terms of this
Agreement at or prior to the Closing Date.

 

(m)                               (i)
Subsequent to the date of the initial letter or letters referred to in
paragraph (f) of this Section 6, there shall not have been any change or
decrease specified in such letter or letters; or (ii) subsequent to the
Execution Time or, if earlier, the dates as of which information is given in
the Offering Memorandum (exclusive of any amendment or supplement thereto),
there shall not have been any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
prospects, earnings, business or properties of the Partnership, the
Subsidiaries and the Joint Venture, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth in or
contemplated in the Preliminary Offering Memorandum (exclusive of any amendment
or supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Initial Purchasers, so
material and adverse as to make it impractical or inadvisable to market the
Securities as contemplated by the Offering Memorandum (exclusive of any
amendment or supplement thereto).

 

All such opinions, certificates, letters and other
documents referred to in this Section 6 will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and
substance to you and your counsel. The Issuers shall furnish to the Initial
Purchasers conformed copies of such opinions, certificates, letters and other
documents in such number as they shall reasonably request.

 

30

 

If any of the conditions specified in this
Section 6 shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement shall not be in all material
respects reasonably satisfactory in form and substance to the Initial
Purchasers and counsel for the Initial Purchasers, this Agreement and all
obligations of the Initial Purchasers hereunder may be cancelled at, or at any
time prior to, the Closing Date by the Initial Purchasers. Notice of such
cancellation shall be given to the Issuers in writing or by telephone or
facsimile confirmed in writing.

 

The documents required to be delivered by this
Section 6 will be delivered at the office of counsel for the Partnership,
at 1001 Fannin, Houston, Texas 77002, on the Closing Date.

 

7.                                       Reimbursement of Expenses. If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because
of any termination pursuant to Section 10(i) hereof based on the
suspension of trading in the Partnership’s Common Units by the Commission or
the NYSE or Section 10(iii) or because of any refusal, inability or
failure on the part of the Issuers to perform any agreement herein or comply
with any provision hereof other than by reason of a default by the Initial
Purchasers, the Issuers will reimburse the Initial Purchasers on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.

 

8.                                       Indemnification and Contribution. (a) Each of the Plains Parties, jointly and
severally, agrees to indemnify and hold harmless each Initial Purchaser, the
directors, officers, employees and agents of each Initial Purchaser and each
person who controls any Initial Purchaser within the meaning of either the Act
or the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum, the Pricing Supplement, the Final Offering
Memorandum (or in any supplement or amendment to the Final Offering Memorandum)
or any other written information used by the Plains Parties in connection with
the offer and sale of the Securities or any information provided by the Issuers
to any holder or prospective purchaser of Securities pursuant to
Section 5(h) hereof, or in any amendment thereof or supplement thereto, 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 light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Plains Parties
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made in the
Preliminary Offering Memorandum, the Pricing Supplement or the Final Offering
Memorandum, or in any amendment thereof or supplement thereto, in reliance upon
and in conformity with 

 

31

 

written
information furnished to the Issuers or GP LLC by or on behalf of the Initial
Purchasers specifically for inclusion therein. This indemnity agreement will be
in addition to any liability which any Plains Party may otherwise have.

 

(b)                                 The
Initial Purchasers, severally and not jointly, agree to indemnify and hold
harmless the Plains Parties, their respective directors and the officers and
each person who controls the Plains Parties within the meaning of either the
Act or the Exchange Act, to the same extent as the foregoing indemnity from the
Plains Parties to the Initial Purchasers, but only with reference to written
information relating to the Initial Purchasers furnished to the Issuers or GP
LLC by or on behalf of the Initial Purchasers specifically for inclusion in the
Preliminary Offering Memorandum, the Pricing Supplement or the Final Offering
Memorandum (or in any amendment or supplement to the Final Offering Memorandum).
This indemnity agreement will be in addition to any liability which the Initial
Purchasers may otherwise have.

 

(c)                                  Promptly
after receipt by an indemnified party under this Section 8 of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof, but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party’s choice at the
indemnifying party’s expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party’s election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent (i) includes an unconditional release of each indemnified party
from all liability arising out of such claim, action, suit or proceeding and
(ii) does not include a statement 

 

32

 

as to or an admission of fault, culpability or failure to act by or on
behalf of any indemnified party.

 

(d)                                 In
the event that the indemnity provided in paragraph (a) or (b) of this
Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Plains Parties and the Initial Purchasers
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively “Losses”) to which the Plains
Parties and the Initial Purchasers may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Plains Parties on
the one hand and by the Initial Purchasers on the other from the offering of
the Securities; provided, however, that in no case shall the
Initial Purchaser be responsible for any amount in excess of the purchase
discount or commission applicable to the Securities purchased by the Initial
Purchaser hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Plains Parties and the Initial
Purchasers shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Plains Parties
on the one hand and of the Initial Purchasers on the other in connection with
the statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. Benefits received by the Plains Parties
shall be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions in each case set forth on the cover of the Final Offering
Memorandum. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information provided by the Plains Parties on the one hand or the Initial
Purchasers on the other, the intent of the parties and their relative
knowledge, information and opportunity to correct or prevent such untrue
statement or omission. The Plains Parties and the Initial Purchasers agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls the Initial
Purchasers within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of the Initial Purchasers shall have the
same rights to contribution as the Initial Purchasers, and any person who
controls the Plains Parties within the meaning of either the Act or the
Exchange Act and the respective officers and directors of the Plains Parties shall
have the same rights to contribution as the Plains Parties, subject in each
case to the applicable terms and conditions of this paragraph (d).

 

9.                                       Default by an Initial Purchaser. If any one or more of the Initial Purchasers
shall fail or refuse to purchase Securities which it or they are obligated to
purchase hereunder on the Closing Date, and the aggregate principal amount of
Securities which such defaulting Initial Purchaser or Initial Purchasers are
obligated but fail or refuse to purchase is not more than one tenth of the
aggregate principal amount of the Securities which the Initial Purchasers are
obligated to purchase on the Closing Date, each non-defaulting Initial
Purchaser shall be obligated, severally, in the proportion which the principal
amount of Securities set 

 

33

 

forth
opposite its name in Schedule 1 hereto bears to the aggregate principal amount
of Securities set forth opposite the names of all non-defaulting Initial
Purchasers, to purchase the Securities which such defaulting Initial Purchaser
or Initial Purchasers are obligated, but fail or refuse, to purchase. If any
one or more of the Initial Purchasers shall fail or refuse to purchase
Securities which it or they are obligated to purchase on the Closing Date and
the aggregate principal amount of Securities with respect to which such default
occurs is more than one tenth of the aggregate principal amount of Securities
which the Initial Purchasers are obligated to purchase on the Closing Date and
arrangements satisfactory to the Initial Purchasers and the Issuers for the
purchase of such Securities by one or more non-defaulting Initial Purchasers or
other party or parties approved by the Initial Purchasers and the Issuers are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any party hereto (other than any defaulting
Initial Purchaser). In any such case which does not result in termination of
this Agreement, either the Initial Purchasers or the Issuers shall have the
right to postpone the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the Offering Memorandum or any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Initial Purchaser from liability in
respect of any such default of any such Initial Purchaser under this Agreement.
The term “Initial Purchaser” as used in this Agreement includes, for all
purposes of this Agreement, any party not listed in Schedule 1 hereto who, with
the approval of the Initial Purchasers and the approval of the Issuers,
purchases Securities which a defaulting Initial Purchaser is obligated, but
fails or refuses, to purchase.

 

Any notice under this Section 9
may be made by telecopy or telephone but shall be subsequently confirmed by
letter.

 

10.                                 Termination of Agreement. This Agreement shall be subject to termination
in your absolute discretion, without liability on the part of any of the
Initial Purchasers to any Plains Party, by notice to the Issuers prior to
delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Partnership’s Common Units shall have been suspended by the
Commission or the NYSE or trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market shall have
been suspended or limited or minimum prices shall have been established; (ii) a
banking moratorium shall have been declared either by federal or New York or
Texas state authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States shall have
occurred; (iii) (a) a downgrading shall have occurred in any rating accorded
the Securities or any other debt securities of any Plains Parties by any “nationally
recognized statistical rating organization”, as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, or (b) any such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of the Securities or
any other debt securities of any Plains Parties; or (iv) there shall have
occurred any outbreak or escalation of hostilities or acts of terrorism,
declaration by the United States of a national emergency or war or other
calamity or crisis or any change in financial, political or economic conditions
in the United States or elsewhere, the effect of which on financial markets is
such as to make it, in the sole judgment of the Initial Purchasers,
impracticable or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Offering Memorandum (exclusive of any
amendment or supplement thereto). Notice of such termination may be given to
the Issuers by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.

 

34

 

11.                                 Representations and Indemnities to Survive. The respective agreements, representations,
warranties, indemnities and other statements of the Plains Parties or their
respective officers and of the Initial Purchasers set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Initial Purchasers or the Plains
Parties or any of the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.

 

12.                                 Notices. All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Initial Purchasers, will be mailed, delivered or
telefaxed to Citigroup Global Markets Inc. General Counsel (fax no.: (212)
816-7912) and confirmed to the General Counsel at Citigroup Global Markets
Inc., 388 Greenwich Street, New York, New York 10013, Attention: General
Counsel; or, if sent to any of the Plains Parties, will be mailed, delivered or
telefaxed to the Issuers at 333 Clay, Suite 1600, Houston, TX 77002, fax no.:
(713) 646-4313 and confirmed to it at (713) 646-4100, attn: Tim Moore.

 

13.                                 Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers and directors
and controlling persons referred to in Section 8 hereof, and, except as
expressly set forth in Section 5(h) hereof, no other person will have any
right or obligation hereunder.

 

14.                                 Integration. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Plains Parties and the Initial
Purchasers, or any of them, with respect to the subject matter hereof.

 

15.                                 Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York. This Agreement
may be signed in various counterparts which together constitute one and the
same instrument. If signed in counterparts, this Agreement shall not become
effective unless at least one counterpart hereof shall have executed and
delivered on behalf of each party hereto.

 

16.                                 Headings. The Section headings used herein are for convenience only and shall
not affect the construction hereof.

 

17.                                 Effective Date of Agreement. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.

 

18.                                 No Fiduciary Duty. The Plains Parties hereby acknowledge that (a)
the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length
commercial transaction between the Plains Parties, on the one hand, and the
Initial Purchasers and any affiliate through which it may be acting, on the
other, (b) the Initial Purchasers are acting as principal and not as an agent
or fiduciary of the Plains Parties and (c) the Plains Parties’ engagement of
the Initial Purchasers in connection with the offering and the process leading
up to the offering is as independent contractors and not in any other capacity.
Furthermore, the Plains Parties agree that they are solely responsible for
making their own judgments in 

 

35

 

connection
with the offering (irrespective of whether any of the Initial Purchasers has
advised or is currently advising the Plains Parties on related or other
matters). The Plains Parties agree that they will not claim that the Initial
Purchasers have rendered advisory services of any nature or respect, or owe an
agency, fiduciary or similar duty to the Plains Parties, in connection with
such transaction or the process leading thereto.

 

19.                                 Definitions. The terms which follow, when used in this Agreement, shall have the
meanings indicated.

 

“Act” shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated
thereunder.

 

“Commission” shall mean the Securities and Exchange
Commission.

 

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

 

“Investment Company Act” shall mean the Investment
Company Act of 1940, as amended, and the rules and regulations of the
Commission promulgated thereunder.

 

“Regulation D” shall mean Regulation D under
the Act.

 

“Regulation S” shall mean Regulation S under
the Act.

 

“Trust Indenture Act” shall mean the Trust Indenture
Act of 1939, as amended, and the rules and regulations of the Commission
promulgated thereunder.

 

36

 

If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicate hereof, whereupon this Agreement and your acceptance shall represent
a binding agreement among the Plains Parties and the Initial Purchasers.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  PLAINS ALL AMERICAN PIPELINE, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS AAP, L.P.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS ALL AMERICAN GP LLC

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PAA FINANCE CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PLAINS AAP, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS ALL AMERICAN GP LLC

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PLAINS ALL AMERICAN GP LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  

 

37

 

	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PLAINS MARKETING, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PLAINS PIPELINE, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  

 

38

 

	
   

  	
  PLAINS MARKETING CANADA LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING, L.P.

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PMC (NOVA SCOTIA) COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PLAINS MARKETING CANADA, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PMC (NOVA SCOTIA) COMPANY

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BASIN HOLDINGS GP LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS PIPELINE, L.P.

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  

 

39

 

	
   

  	
  BASIN PIPELINE HOLDINGS, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BASIN HOLDINGS GP LLC

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS PIPELINE, L.P.

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RANCHO HOLDINGS GP LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS PIPELINE, L.P.

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RANCHO PIPELINE HOLDINGS, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  RANCHO HOLDINGS GP LLC

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS PIPELINE, L.P.

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  

 

40

 

	
   

  	
  PLAINS LPG SERVICES GP LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING, L.P.

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PLAINS LPG SERVICES, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS LPG SERVICES GP LLC

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING, L.P.

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  

 

41

 

	
   

  	
  LONE STAR TRUCKING, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS LPG SERVICES, L.P.

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS LPG SERVICES GP LLC

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING, L.P.

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PLAINS MARKETING GP INC.

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Phil Kramer

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Phil Kramer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  

 

42

 

The
foregoing Agreement is hereby

confirmed and accepted by the Initial

Purchasers
as of the date first above written.

 

Citigroup Global Markets Inc.

UBS Securities LLC

BNP
Paribas Securities Corp.

Banc of America Securities LLC

Fortis Securities LLC

J.P. Morgan Securities Inc.

Piper Jaffray & Co.

Wachovia Capital Markets, LLC

Amegy Bank National Association

Commerzbank Capital Markets Corp.

DnB NOR Markets, Inc.

HSBC Securities (USA) Inc.

Mitsubishi UFJ Securities International plc

 

	
  By:

  	
  Citigroup
  Global Markets Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian
  Bednarski

  	
   

  
	
   

  	
  Name: Brian
  Bednarski

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  UBS
  Securities LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Scott D.
  Whitney

  	
   

  
	
   

  	
  Name: Scott D.
  Whitney

  
	
   

  	
  Title: Executive
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Marc J.
  Ordona

  	
   

  
	
   

  	
  Name: Marc J.
  Ordona

  
	
   

  	
  Title: Director

  

 

43

 

Schedule 1

 

	
  Initial Purchasers

  	
   

  	
  Principal Amount of 

  Securities to be 

  Purchased

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Citigroup Global Markets Inc.

  	
   

  	
  75,000,000

  	
   

  
	
  UBS Securities LLC

  	
   

  	
  75,000,000

  	
   

  
	
  BNP
  Paribas Securities Corp.

  	
   

  	
  25,000,000

  	
   

  
	
  Banc of America Securities LLC

  	
   

  	
  10,000,000

  	
   

  
	
  Fortis Securities LLC

  	
   

  	
  10,000,000

  	
   

  
	
  J.P. Morgan Securities Inc.

  	
   

  	
  10,000,000

  	
   

  
	
  Piper Jaffray & Co.

  	
   

  	
  10,000,000

  	
   

  
	
  Wachovia Capital Markets, LLC

  	
   

  	
  10,000,000

  	
   

  
	
  Amegy Bank National Association

  	
   

  	
  5,000,000

  	
   

  
	
  Commerzbank Capital Markets Corp.

  	
   

  	
  5,000,000

  	
   

  
	
  DnB NOR Markets, Inc.

  	
   

  	
  5,000,000

  	
   

  
	
  HSBC Securities (USA) Inc.

  	
   

  	
  5,000,000

  	
   

  
	
  Mitsubishi UFJ Securities International plc

  	
   

  	
  5,000,000

  	
   

  
	
  Total

  	
   

  	
  $

  	
  250,000,000

  	
   

  
					

 

44

 

EXHIBIT A

 

Form of
Pricing Supplement

 

PRICING SUPPLEMENT DATED
May 9, 2006

 

ISSUERS: Plains All
American Pipeline, L.P. and PAA Finance Corp.

 

SIZE:   $250mm

MATURITY/MATURITY DATE:   May 15, 2036 (30 yr)

ISSUE PRICE:   99.819%

NET PROCEEDS TO ISSUERS:   $246,760,000

COUPON:  6.70%

MAKE WHOLE CALL: T + 25 bp

SPREAD:   140 bp

YIELD:   6.714%

INTEREST PAYMENT DATES:   May 15 and November 15

FIRST INTEREST PAYMENT:   November 15, 2006

FORMAT:            144A
and Regulation S

BOOKS:   Citigroup, UBS Investment Bank

LD MGR:   BNP Paribas

SR CO MGRS:   Banc of America Securities LLC, Fortis Securities
LLC, JPMorgan, Piper Jaffray, Wachovia Securities

CO MGRS:   Amegy Bank National Association, Commerzbank
Corporates & Markets, DnB NOR Markets, HSBC, Mitsubishi UFJ Securities

USE of PROCEEDS:   Repay outstanding indebtedness under
revolving credit facility

SETTLEMENT:         (T+3) May 12, 2006

MARKETING:          Preliminary
Offering Memorandum dated May 9, 2006

 

The information in this
Pricing Supplement supplements the Preliminary Offering Memorandum and supersedes
the information in the Preliminary Offering Memorandum to the extent
inconsistent with the information in the Preliminary Offering Memorandum.

 

The securities referred
to herein have not been registered under the Securities Act of 1933 and may not
be offered or sold in the United States or to US persons other than “qualified
institutional buyers” as defined in Rule 144A under the Securities Act or
outside the United States to non-US persons pursuant to Regulation S under the
Securities Act. Nothing in this communication shall constitute an offer to sell
or the solicitation of an offer to buy securities in any jurisdiction in which
such offer or sale would be unlawful. Offers of these securities are made only
by means of the offering memorandum. You are reminded that this notice has been
delivered to you on the basis that you are a person into whose possession this
notice may be lawfully delivered in accordance with the laws of jurisdiction in
which you are located and you may not nor are you authorized to deliver this
notice to any other person and you agree not to copy or retransmit this notice.
See “Notice to Investors” in the Preliminary Offering Memorandum.

 

A-1

 

EXHIBIT B

 

Selling Restrictions for Offers and

Sales Outside the United States

 

(1)(a)  The Securities have not been and
will not be registered under the Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons (other than
a distributor) except in accordance with Regulation S under the Act or
pursuant to an exemption from the registration requirements of the Act. The
Initial Purchasers represent and agree that, except as otherwise permitted by
Section 4(a)(i) of the Agreement to which this is an exhibit, they have
not offered and sold the Securities, and will not offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the Closing
Date, except in accordance with Rule 903 of Regulation S under the Act or
another exemption from the registration requirements of the Act. The Initial
Purchasers represent and agree that neither they, nor any of their Affiliates
nor any person acting on their behalf or on behalf of their Affiliates has
engaged or will engage in any directed selling efforts with respect to the
Securities, and that they and their Affiliates have complied and will comply
with the offering restrictions requirement of Regulation S. The Initial
Purchasers agree that, at or prior to the confirmation of sale of Securities
(other than a sale of Securities pursuant to Section 4(a)(i) of the
Agreement to which this is an exhibit), they shall have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from them during the distribution
compliance period referred to in Regulation S under the Act a confirmation or
notice to substantially the following effect:

 

“The Securities covered
hereby have not been registered under the U.S. Securities Act of 1933 (the “Act”)
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the date of the
Securities were first offered to persons other than “distributors” (as defined
in Regulation S under the Act) in reliance upon Regulation S under the Act and
the Closing Date, except in either case in accordance with Regulation S or
Rule 144A under the Act. Terms used above have the meanings given to them by
Regulation S under the Act.”

 

(b)                                 The
Initial Purchasers also represent and agree that they have not entered and will
not enter into any contractual arrangement with any distributor with respect to
the distribution of the Securities, except with their Affiliates or with the
prior written consent of the Partnership.

 

(c)                                  Terms
used in this Section have the meanings given to them by Regulation S.

 

(2)                                  The
Initial Purchasers represent and agree that (i) they have not offered or sold
and, prior to the date six months after the date of issuance of the Securities,
will not offer or sell any Securities to persons in the United Kingdom except
to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) 

 

B-1

 

for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995, as amended; (ii) they have complied and will comply with all
applicable provisions of the Financial Services and Markets Act 2000 (the “FSMA”)
with respect to anything done by them in relation to the Securities in, from or
otherwise involving the United Kingdom; and (iii) they have only communicated,
or caused to be communicated, and will only communicate, or cause to be
communicated, any invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the FSMA) received by them in connection
with the issue or sale of the Securities in circumstances in which Section 21(1)
of the FSMA does not apply to us.

 

 

EXHIBIT C

 

Form of
Exhibit A to Opinions in Sections 6(a) and (d)

 

	
  Entity

  	
   

  	
  Jurisdiction in which registered or qualified

  
	
   

  	
   

  	
   

  
	
  Plains All American
  Pipeline, L.P.

  	
   

  	
  Texas

  
	
   

  	
   

  	
   

  
	
  PAA Finance Corp.

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  Plains AAP, L.P.

  	
   

  	
  Texas

  
	
   

  	
   

  	
   

  
	
  Plains All American GP
  LLC

  	
   

  	
  California, Louisiana,
  Oklahoma,

  
	
   

  	
   

  	
  Texas

  
	
   

  	
   

  	
   

  
	
  Plains Marketing GP
  Inc.

  	
   

  	
  California, Illinois,
  Louisiana,

  
	
   

  	
   

  	
  Oklahoma, Texas

  
	
   

  	
   

  	
   

  
	
  Plains Marketing, L.P.

  	
   

  	
  California, Illinois,
  Louisiana, Oklahoma

  
	
   

  	
   

  	
   

  
	
  Plains Pipeline, L.P.

  	
   

  	
  California, Illinois,
  Louisiana, Oklahoma, Texas

  
	
   

  	
   

  	
   

  
	
  Plains Marketing Canada
  LLC

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  PMC (Nova Scotia)
  Company

  	
   

  	
  Alberta, British
  Columbia, Manitoba, Ontario, Saskatchewan

  
	
   

  	
   

  	
   

  
	
  Plains Marketing
  Canada, L.P.

  	
   

  	
  Manitoba, Saskatchewan,
  California, Louisiana, Maryland, Michigan, North Dakota, Oklahoma, Texas

  
	
   

  	
   

  	
   

  
	
  Basin Holdings GP LLC

  	
   

  	
  Oklahoma, Texas

  
	
   

  	
   

  	
   

  
	
  Basin Pipeline
  Holdings, LP

  	
   

  	
  Oklahoma, Texas

  
	
   

  	
   

  	
   

  
	
  Rancho Holdings GP LLC

  	
   

  	
  Texas

  
	
   

  	
   

  	
   

  
	
  Rancho Pipeline
  Holdings, L.P.

  	
   

  	
  Texas

  
	
   

  	
   

  	
   

  
	
  PAA/Vulcan Gas Storage,
  LLC

  	
   

  	
  Texas

  
	
   

  	
   

  	
   

  
	
  Plains LPG Services GP
  LLC

  	
   

  	
  Illinois, Mississippi,
  North Dakota

  
	
   

  	
   

  	
   

  
	
  Plains LPG Services,
  L.P.

  	
   

  	
  California, Illinois,
  Michigan, New Hampshire, Oklahoma, Texas

  
	
   

  	
   

  	
   

  
	
  Lone Star Trucking, LLC

  	
   

  	
  None

  

 

C-1

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