Document:

<PAGE>
                                                                               .
                                                                               .
                                                                               .
                                                                    EXHIBIT 10.2

SUMMARY OF COMPENSATION AND PERFORMANCE GOALS AND BUSINESS CRITERIA FOR PAYMENT
OF INCENTIVE AWARDS

      Compensation

<Table>
<Caption>
                                                                   ANNUAL SALARY
                                                                   -------------
<S>                                                                <C>
Julia A. Harper, Vice President of Corporate Operations              $240,000

Brian Bronson, Chief Financial Officer                               $261,000
</Table>

      Incentive Awards

      Bonus targets are set between the 50th and 75th percentile of market data
as an average. The officers were assigned the following target annual bonus
amounts:

<Table>
<Caption>
                                                                   TARGET ANNUAL
                                                                   BONUS AMOUNT
                                                                   ------------
<S>                                                                <C>
Julia A. Harper, Vice President of Corporate Operations               $160,000
Brian Bronson, Chief Financial Officer                                $121,000
Keith Lambert, Vice President of Manufacturing Operations             $100,000
</Table>

       Actual bonus payouts are calculated and paid semi-annually and are based
on achievement of planned operating income, as well as the following parameters:

<Table>
<Caption>
PARAMETER               PAYOUT                                        WEIGHT
-------------------     ----------------------------------          -----------
<S>                     <C>                                         <C>
Individual objectives   Payout from 0 - 200% based on results           50%

Design win target       Payout from 0 - 200% based on results           20%

Revenue target          Payout from 0 - 200% based on results           15%

Gross margin target     Payout from 0 - 200% based on results           15%

</Table>exv10w1

 

Exhibit 10.1

Execution Version

PLAINS ALL AMERICAN PIPELINE, L.P.

PAA FINANCE CORP.

$400,000,000 6.125% Notes due 2017

$600,000,000 6.650% Notes due 2037

Purchase Agreement

October 23, 2006

Citigroup Global Markets Inc.

UBS Securities LLC

Banc of America Securities LLC

J.P. Morgan Securities Inc.

Wachovia Capital Markets, LLC

BNP Paribas Securities Corp.

SunTrust Capital Markets, Inc.

Comerica Securities, Inc.

Commerzbank Capital Markets Corp.

DnB NOR Markets, Inc.

Fortis Securities LLC

HSBC Securities (USA) Inc.

ING Financial Markets LLC

Mitsubishi UFJ Securities International plc

Piper Jaffray & Co.

RBC Capital Markets Corporation

Scotia Capital (USA) Inc.

Daiwa Securities America Inc.

SG Americas Securities, LLC

Wedbush Morgan Securities Inc.

Wells Fargo Securities, LLC

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”) $400,000,000 aggregate principal amount of 6.125% Notes due 2017 (the
“2017 Securities”) and $600,000,000 aggregate principal amount of 6.650% Notes due 2037 (the “2037
Securities,” and together with the 2017 Securities, the

 

 

“Securities”). The Securities are to be issued under an indenture dated as of September 25,
2002 (the “Base Indenture”), among the Issuers and U.S. Bank National Association, as successor
trustee (the “Trustee”), as amended by the Ninth Supplemental Indenture and the Tenth Supplemental
Indenture, each to be dated as of October 30, 2006, among the Issuers, the Trustee and the
subsidiaries of the Partnership named therein (the Base Indenture, as so amended, the “Indenture”).
Each series of the Securities will have the benefit of a registration rights agreement (each, a
“Registration Rights Agreement”), to be dated as of the Closing Date (as defined in Section 3),
among the Issuers, the other Plains Parties party thereto 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 19 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.”), which is 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”); a 100% membership interest in Plains Marketing International GP LLC, a Delaware limited
liability company (“PMI GP LLC”); a 99.999% limited partner interest in Plains LPG Services, L.P.,
a Delaware limited partnership (“LPG Services LP”); a 99.999% limited partner interest in Plains
LPG Marketing, L.P., a Texas limited partnership (“LPG Marketing LP”) and a 99.999% limited partner
interest in Plains Marketing International, L.P., a Texas limited partnership (“PMI LP”). LPG LLC
owns a 0.001% general partner interest in LPG Services LP and a 0.001% general partner interest in
LPG Marketing LP. LPG Services LP owns a 100% membership interest in Lone Star Trucking, LLC, a
California limited liability company (“Lone Star”). PMI GP LLC owns a 0.001% general partner
interest in PMI LP. 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 Services LP, LPG Marketing
LP, PMI GP LLC, PMI 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

2

 

Services LP, LPG Marketing LP, PMI GP LLC, PMI 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 October 23, 2006 (the “Preliminary Offering Memorandum”), and have
prepared a pricing supplement (the “Pricing Supplement”), dated October 23, 2006, the form of which
is attached as Exhibit A hereto, describing the terms of each series 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 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 Partnership 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 its date and on the Closing Date, the Final Offering Memorandum 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 Final
Offering Memorandum, or any amendment or supplement thereto, in

3

 

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.

     (b) The Offering Memorandum, as of the Execution Time does not contain, and on 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 in reliance upon and in conformity with written
information furnished 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.

     (c) 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.

     (d) 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.

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

     (f) 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.

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

     (h) 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.

     (i) 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).

4

 

     (j) 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.

     (k) 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.

     (l) 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; 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; LPG LLC has full limited liability
company power and authority to act as the general partner of LPG Services LP and LPG
Marketing LP; PMI GP LLC has full limited liability company power and authority to act as
the general partner of PMI LP, in each case in all material respects.

     (m) 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

5

 

capitalized term is defined in the Partnership Agreement) free and clear of all liens,
encumbrances, security interests, equities, charges or claims.

     (n) 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.

     (o) 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 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.

     (p) 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.

     (q) The Partnership has no direct or indirect majority-owned subsidiaries other than
the Subsidiaries, Atchafalaya Pipeline, L.L.C. (“Atchafalaya Pipeline”) and Andrews
Partners, LLC (“Andrews Partners”). None of Atchafalaya Pipeline 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

6

 

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.

     (r) 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 Agreements, the Indenture and
the Registration Rights Agreements 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 Agreements, 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.

     (s) 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.

     (t) 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 of the Base Indenture and the Ninth and Tenth Supplemental Indentures thereto by
the Trustee, when such Ninth and Tenth Supplemental Indentures are 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

7

 

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 applicable 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 each
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.

     (u) 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 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 Limited Liability Company Agreement of PMI GP LLC (as in effect on the date hereof and
as the same may be amended or restated prior to the Closing Date, the “PMI GP LLC
Agreement”) has been duly authorized,

8

 

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 Services LP (as in effect on the date hereof and as the same may
be amended or restated prior to the Closing Date, the “LPG Services 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 agreement of limited
partnership of LPG Marketing LP (as in effect on the date hereof and as the same may be
amended or restated prior to the Closing Date, the “LPG Marketing 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 agreement of limited partnership of
PMI LP (as in effect on the date hereof and as the same may be amended or restated prior to
the Closing Date, the “PMI LP Partnership Agreement”) is a valid and legally binding
agreement of PMI GP 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 Services LP and
is a valid and legally binding agreement of LPG Services 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).

     (v) 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
Agreements 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)
(“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

9

 

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.

     (w) 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 Agreements 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 Agreements, under the Act and the Trust
Indenture Act, and as may be required under the Exchange Act and state securities or “Blue
Sky” laws.

     (x) 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.

     (y) 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.

10

 

     (z) At June 30, 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 pro forma financial statements and other pro
forma financial information included or incorporated by reference in the Offering Memorandum
(and any amendment or supplement thereto) (i) present fairly in all material respects the
information shown therein, (ii) have been prepared in accordance with the Commission’s rules
and guidelines with respect to pro forma financial statements and (iii) have been properly
computed on the bases described therein. The assumptions used in the preparation of the pro
forma financial statements and other pro forma financial information included or
incorporated by reference in the Offering Memorandum (and any amendment or supplement
thereto) are reasonable, and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to 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.

     (aa) 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.

     (bb) 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

11

 

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
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.

     (cc) 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.

     (dd) 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

12

 

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.

     (ee) 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 “gas utility,” within the meaning of Tex.
Util. Code § 121.001 or (iii) 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; other than in respect of any subsidiary of Pacific Energy
Partners, L.P. that is under the jurisdiction of the California Public Utilities Commission.

     (ff) 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.

     (gg) 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.

     (hh) 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.

     (ii) 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

13

 

insurance is outstanding and duly in force on the date hereof and will be outstanding
and duly in force on the Closing Date.

     (jj) 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 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
Agreements.

     (kk) 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).

     (ll) 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.

     (mm) 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

14

 

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
Purchaser, and each Initial Purchaser severally agrees to purchase from the Issuers the principal
amount of the 2017 Securities set forth opposite such Initial Purchaser’s name on Schedule 1 hereto
at a purchase price of 98.912% of the principal amount thereof and the principal amount of the 2037
Securities set forth opposite such Initial Purchaser’s name on Schedule 1 hereto at a purchase
price of 98.296% of the principal amount thereof, plus, in each case, accrued interest, if any,
from October 30, 2006, if closing occurs after such date.

          3. Delivery and Payment. Delivery of and payment for the Securities shall be made at
10:00 A.M., New York City time, on October 30, 2006, or at such time on such later date (not later
than November 2, 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,

15

 

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
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

16

 

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 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, the issuance of
$250,000,000 principal amount of 6.70% Senior Notes due 2036 pursuant to the Issuer’s
Registration Statement on Form S-4 (Registration No. 333-136925), as amended, and borrowings
under the Second Amended and Restated Credit Agreement [US/Canada Facilities] dated July 31,
2006 (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,
the Interim 364-Day Credit

17

 

Agreement among the Partnership, JPMorgan Chase Bank, N.A., as administrative agent,
and the lenders named therein 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, 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 Agreements); (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:

18

 

     (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 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

19

 

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 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

20

 

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 forth in this
Agreement, the Registration Rights Agreements, 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 Base Indenture and the Ninth and Tenth Supplemental Indentures thereto
have 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) the Indenture 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.

21

 

     (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 applicable 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) Each of the Registration Rights Agreements 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
opinion), and (assuming the due authorization, execution and delivery thereof by the
Initial Purchasers) 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 PMI GP LLC Agreement has been duly authorized,
executed and delivered by Plains Marketing

22

 

and is a valid and legally binding agreement of Plains Marketing, enforceable
against it in accordance with its terms; the PMI LP Partnership Agreement is a valid
and legally binding agreement of PMI GP LLC and Plains Marketing, enforceable
against each of them in accordance with its terms; the LPG Services 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 LPG Marketing 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 Services
LP and is a valid and legally binding agreement of LPG Services 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.

     (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 Agreements 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

23

 

whole, it being understood that such counsel need not express any opinion in
clause (C) of this paragraph (xiv) with respect to any securities or other
anti-fraud law.

     (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 Agreements 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 Agreements, 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, it being understood that such counsel need not express any opinion pursuant
to this paragraph (xv) with respect to the matters addressed in its opinion pursuant
to paragraph (xviii) below.

     (xvi) The statements in the Offering Memorandum under the caption “Material
U.S. Federal Income Tax Consequences,” 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.

     (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

24

 

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 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 Agreements 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).

25

 

     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
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 Agreements 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

26

 

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.

     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

27

 

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 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.

28

 

     (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.

     (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 Agreements 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.

29

 

     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 Agreements, the
Offering Memorandum and other related matters the Initial Purchasers may reasonably require.

     (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 each of PricewaterhouseCoopers LLP and KPMG LLP, 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 and certain pro forma
financial information filed by the Partnership in its Current Reports on Form 8-K filed on
July 14, 2006 and August 24, 2006.

     (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.

30

 

     (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 Rancho LP, LPG
LLC, LPG Services LP, LPG Marketing LP, PMI GP LLC, PMI LP and Lone Star 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, Rancho
LP, LPG LLC, LPG Services LP, LPG Marketing LP, PMI GP LLC, PMI LP and Lone Star 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).

     (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.

31

 

     (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.

          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

32

 

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 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

33

 

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 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

34

 

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 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,

35

 

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.

          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.

36

 

          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 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.

37

 

          “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.

38

 

          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:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief

            Financial Officer
	 
	 	 	 	 	 	 	 	 
	 	 	PAA FINANCE CORP.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	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:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief

            Financial Officer

 

 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	PLAINS ALL AMERICAN GP LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer
	 
	 	 	 	 	 	 	 	 
	 	 	PLAINS MARKETING, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING GP INC.	 	 
	 	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer
	 
	 	 	 	 	 	 	 	 
	 	 	PLAINS PIPELINE, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING GP INC.	 	 
	 	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer
	 
	 	 	 	 	 	 	 	 
	 	 	PLAINS MARKETING GP INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer

2

 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	PLAINS MARKETING CANADA LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING, L.P.	 	 
	 	 	 	 	its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING GP INC.	 	 
	 	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer
	 
	 	 	 	 	 	 	 	 
	 	 	PMC (NOVA SCOTIA) COMPANY	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President
	 
	 	 	 	 	 	 	 	 
	 	 	PLAINS MARKETING CANADA, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PMC (NOVA SCOTIA) COMPANY	 	 
	 	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	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:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer

3

 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	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:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	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:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	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:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer

4

 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	PLAINS LPG SERVICES GP LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING, L.P.	 	 
	 	 	 	 	its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING GP INC.	 	 
	 	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	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:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer

5

 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	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:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer
	 
	 	 	 	 	 	 	 	 
	 	 	PLAINS MARKETING INTERNATIONAL GP LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING, L.P.	 	 
	 	 	 	 	its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING GP INC.	 	 
	 	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer

6

 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	PLAINS MARKETING INTERNATIONAL, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING INTERNATIONAL GP LLC	 	 
	 	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING, L.P.	 	 
	 	 	 	 	its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	PLAINS MARKETING GP INC.	 	 
	 	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer
	 
	 	 	 	 	 	 	 	 
	 	 	PLAINS LPG MARKETING, 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:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Phil Kramer
	 	 	 	 	 	 	Title:   Executive Vice President and Chief 

            Financial Officer

7

 

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

Banc of America Securities LLC

J.P. Morgan Securities Inc.

Wachovia Capital Markets, LLC

BNP Paribas Securities Corp.

SunTrust Capital Markets, Inc.

Comerica Securities, Inc.

Commerzbank Capital Markets Corp.

DnB NOR Markets, Inc.

Fortis Securities LLC

HSBC Securities (USA) Inc.

ING Financial Markets LLC

Mitsubishi UFJ Securities International plc

Piper Jaffray & Co.

RBC Capital Markets Corporation

Scotia Capital (USA) Inc.

Daiwa Securities America Inc.

SG Americas Securities, LLC

Wedbush Morgan Securities Inc.

Wells Fargo Securities, LLC

	 	 	 	 	 
	 

	 	 	 	 
	By:

	 	Citigroup Global Markets Inc.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name: Brian Bednarski

Title:   Director	 	 

 

 

Schedule 1

	 	 	 	 	 	 	 	 	 
	 	 	Principal Amount of	 	 	Principal Amount of	 
	 	 	2017 Securities to be	 	 	2037 Securities to be	 
	Initial Purchasers	 	Purchased	 	 	Purchased	 
	Citigroup Global Markets Inc.
	 	$	61,250,000	 	 	$	91,875,000	 
	UBS Securities LLC
	 	 	61,250,000	 	 	 	91,875,000	 
	Banc of America Securities LLC
	 	 	54,000,000	 	 	 	81,000,000	 
	J.P. Morgan Securities Inc.
	 	 	54,000,000	 	 	 	81,000,000	 
	Wachovia Capital Markets, LLC
	 	 	54,000,000	 	 	 	81,000,000	 
	BNP Paribas Securities Corp.
	 	 	20,000,000	 	 	 	30,000,000	 
	SunTrust Capital Markets, Inc.
	 	 	20,000,000	 	 	 	30,000,000	 
	Fortis Securities LLC
	 	 	10,750,000	 	 	 	16,125,000	 
	Scotia Capital (USA) Inc.
	 	 	10,750,000	 	 	 	16,125,000	 
	Comerica Securities, Inc.
	 	 	4,500,000	 	 	 	6,750,000	 
	Commerzbank Capital Markets Corp.
	 	 	4,500,000	 	 	 	6,750,000	 
	Daiwa Securities America Inc.
	 	 	4,500,000	 	 	 	6,750,000	 
	DnB NOR Markets, Inc.
	 	 	4,500,000	 	 	 	6,750,000	 
	HSBC Securities (USA) Inc.
	 	 	4,500,000	 	 	 	6,750,000	 
	ING Financial Markets LLC
	 	 	4,500,000	 	 	 	6,750,000	 
	Mitsubishi UFJ Securities International plc
	 	 	4,500,000	 	 	 	6,750,000	 
	Piper Jaffray & Co.
	 	 	4,500,000	 	 	 	6,750,000	 
	RBC Capital Markets Corporation
	 	 	4,500,000	 	 	 	6,750,000	 
	SG Americas Securities, LLC
	 	 	4,500,000	 	 	 	6,750,000	 
	Wedbush Morgan Securities Inc.
	 	 	4,500,000	 	 	 	6,750,000	 
	Wells Fargo Securities, LLC
	 	 	4,500,000	 	 	 	6,750,000	 
	 
	 	 	 	 	 	 
	Total
	 	$	400,000,000	 	 	$	600,000,000	 

2

 

EXHIBIT A

Form of Pricing Supplement

PRICING SUPPLEMENT DATED October 23, 2006

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

SIZE: $400,000,000

MATURITY/MATURITY DATE: January 15, 2017 (10 yr)

ISSUE PRICE: 99.562%

NET PROCEEDS TO ISSUERS: $395,648,000

COUPON: 6.125%

MAKE WHOLE CALL: T + 25 bp

SPECIAL REDEMPTION: 101% Call if PPX merger does not close by 2/15/2007

SPREAD: 135 bp

YIELD: 6.180%

INTEREST PAYMENT DATES: January 15 and July 15

FIRST INTEREST PAYMENT: July 15, 2007

FORMAT: 144A and Regulation S

BOOKS: Citigroup

JT BOOK-RUNNING MGRS: UBS Securities LLC, Bank of America Securities
LLC, JPMorgan, Wachovia Securities

LD MGRS: BNP Paribas, SunTrust Robinson Humphrey

SR CO MGRS: Fortis Securities, Scotia Capital

CO MGRS: Comerica Securities, Commerzbank Corporates & Markets,
DnB NOR Markets, HSBC, ING Financial Markets, Mitsubishi UFJ
Securities, Piper Jaffray, RBC Capital Markets, Societe Generale,
Daiwa Securities America Inc., Wedbush Morgan Securities Inc., Wells Fargo Securities

USE of PROCEEDS: Repay outstanding indebtedness and general partnership purposes

SETTLEMENT: (T+5) October 30, 2006

MARKETING: Preliminary Offering Memorandum dated October 23, 2006

SIZE: $600,000,000

MATURITY/MATURITY DATE: January 15, 2037 (30 yr)

ISSUE PRICE: 99.171%

NET PROCEEDS TO ISSUERS: $589,776,000

COUPON: 6.650%

MAKE WHOLE CALL: T + 30 bp

SPECIAL REDEMPTION: 101% Call if PPX merger does not close by 2/15/2007

SPREAD: 175 bp

YIELD: 6.712%

INTEREST PAYMENT DATES: January 15 and July 15

FIRST INTEREST PAYMENT: July 15, 2007

FORMAT: 144A and Regulation S

BOOKS: Citigroup

JT BOOK-RUNNING MGRS: UBS Securities LLC, Bank of America Securities LLC, JPMorgan,

Wachovia Securities

LD MGRS: BNP Paribas, SunTrust Robinson Humphrey

SR CO MGRS: Fortis Securities, Scotia Capital

CO MGRS: Comerica Securities, Commerzbank Corporates & Markets,
DnB NOR Markets, HSBC, ING Financial Markets, Mitsubishi UFJ
Securities, Piper Jaffray, RBC Capital Markets, Societe Generale,
Daiwa Securities America Inc., Wedbush Morgan Securities Inc., Wells Fargo Securities

USE of PROCEEDS: Repay outstanding indebtedness and general partnership purposes

A-1

 

SETTLEMENT: (T+5) October 30, 2006

MARKETING: Preliminary Offering Memorandum dated October 23, 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.

 

 

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
	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
	Plains Marketing International GP LLC

	 	None
	Plains Marketing International, L.P.

	 	None
	Plains LPG Marketing, L.P.

	 	None

 C-1

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