FOURTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

Exhibit 3.1

PLAINS AAP, L.P.

A Delaware Limited Partnership

FOURTH AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT

December 28, 2007

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS			1
ARTICLE II ORGANIZATION			10
2.1 Formation of Limited Partnership			10
2.2 Name of Partnership			10
2.3 Principal Office; Registered Office			10
2.4 Term of Partnership			10
2.5 Purpose of Partnership			11
2.6 Actions by Partnership			11
2.7 Reliance by Third Parties			11
ARTICLE III CAPITAL			11
3.1 Capital Contributions			11
3.2 Additional Capital Contributions			11
3.3 Loans			12
3.4 Maintenance of Capital Accounts			12
3.5 Capital Withdrawal Rights, Interest and Priority			13
3.6 Class B Partners Profits Interests			13
ARTICLE IV DISTRIBUTIONS			13
4.1 Distributions of Available Cash			13
4.2 Intentionally Omitted			15
4.3 Persons Entitled to Distributions			15
4.4 Limitations on Distributions			15
ARTICLE V ALLOCATIONS			15
5.1 Profits			15
5.2 Losses			15
5.3 Special Allocation to Class B Partners			16
5.4 Regulatory Allocations			16
5.5 Tax Allocations: Code Section 704(c)			17
5.6 Change in Partnership Interest			17
5.7 Withholding			18
ARTICLE VI MANAGEMENT			18
6.1 Duties and Powers of the General Partner			18
6.2 No Liability to Limited Partners			19
6.3 Indemnification of General Partner			19
6.4 Rights of Limited Partners			19
6.5 Class B Partners			19
6.6 Contributed Units			19
ARTICLE VII TRANSFERS OF PARTNERSHIP INTERESTS			20
7.1 Transfer of Limited Partnership Interests			20

		Page
7.2 Permitted Transferees			20
7.3 Substitute Limited Partners			22
7.4 Effect of Admission as a Substitute Limited Partner			22
7.5 Consent			22
7.6 No Dissolution			22
7.7 Additional Limited Partners			22
7.8 Right of First Refusal			23
ARTICLE VIII DISSOLUTION AND LIQUIDATION			24
8.1 Dissolution of Partnership			24
8.2 Final Accounting			24
8.3 Distributions Following Dissolution and Termination			25
8.4 Termination of the Partnership			26
8.5 No Action for Dissolution			27
ARTICLE IX ACCOUNTING; BOOKS AND RECORDS			27
9.1 Fiscal Year and Accounting Method			27
9.2 Books and Records			27
9.3 Delivery to Partners; Inspection			27
9.4 Financial Statements			28
9.5 Filings			28
9.6 Non-Disclosure			28
ARTICLE X NON-COMPETITION			29
10.1 Non-Competition			29
10.2 Damages			29
10.3 Limitations			29
ARTICLE XI GENERAL PROVISIONS			30
11.1 Waiver of Default			30
11.2 Amendment of Partnership Agreement			30
11.3 No Third Party Rights			30
11.4 Severability			30
11.5 Nature of Interest in the Partnership			30
11.6 Binding Agreement			31
11.7 Headings			31
11.8 Word Meanings			31
11.9 Counterparts			31
11.10 Entire Agreement			31
11.11 Partition			31
11.12 Governing Law; Consent to Jurisdiction and Venue			31

 - ii - 

FOURTH AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT

OF

PLAINS AAP, L.P.

     THIS FOURTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this “Agreement” ) of Plains AAP, L.P., a Delaware limited partnership (the “Partnership ”), is made and entered into as of this 28th day of December, 2007 by Plains All American GP LLC, a Delaware limited liability company, as the general partner, and, pursuant to Section 11.2(d) of the Third Amended and Restated Limited Partnership Agreement dated as of August 29, 2007, by and among the General Partner and the Limited Partners (the “ Third A&R Limited Partnership Agreement” ), is binding on the Persons listed as Limited Partners in Schedule I hereto, as such schedule may be amended or supplemented from time to time in accordance herewith.

     This Agreement amends and restates in its entirety the Third A&R Limited Partnership Agreement.

ARTICLE I
DEFINITIONS

     For purposes of this Agreement:

      “Acceptance Notice” shall have the meaning set forth in Section 7.8(b) .

      “Act” means the Delaware Revised Uniform Limited Partnership Act, as amended from time to time.

      “Adjusted Capital Account Deficit” means, with respect to a Partner, the deficit balance, if any, in such Partner’s Capital Account as of the end of the relevant Taxable Year, after giving effect to the following adjustments:

     (a) Credit to such Capital Account any amounts which such Partner is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to Regulation Sections 1.704-1(b)(2)(ii)( c ), 1.704-2(g)(1) and 1.704-2(i)(5); and

     (b) Debit to such Capital Account the items described in Regulation Sections 1.704-1(b)(2)(ii)( d )( 4 ), 1.704-1(b)(2)(ii)( d )( 5 ), and 1.704-1(b)(2)(ii)( d )( 6 ).

      “Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.

      “Agreement” means this Fourth Amended and Restated Limited Partnership Agreement, as amended from time to time in accordance with its terms.

      “Available Cash” means, with respect to a fiscal quarter, all cash and cash equivalents of the Partnership at the end of such quarter (other than Net Capital Transaction Proceeds and Contributed Unit Proceeds) less the amount of cash reserves that is necessary or appropriate in the reasonable discretion of the General Partner to (a) provide for the proper conduct of the business of the Partnership (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership) subsequent to such quarter or (b) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which the Partnership is a party or by which it is bound or its assets or Property is subject; provided, however, that disbursements made by the Master Limited Partnership to the Partnership or cash reserves established, increased or reduced after the expiration of such quarter (including receipt of any Distribution Loan Proceeds) but on or before the date of determination of Available Cash with respect to such quarter shall be deemed to have been made, established, increased or reduced, for purposes of determining Available Cash, during such quarter if the General Partner so determines in its reasonable discretion. For the avoidance of doubt, loan proceeds other than Distribution Loan Proceeds will not be included in Available Cash.

      “Business ” means all Hydrocarbon gathering, transportation, terminalling, storage, and marketing and all operations related thereto, including, without limitation, (a) the acquisition, construction, installation, maintenance or remediation and operation of pipelines, gathering lines, compressors, facilities, storage facilities and equipment, and (b) the gathering of Hydrocarbons from fields, interstate and intrastate transportation by pipeline, trucks or barges, tank storage of Hydrocarbons, transferring Hydrocarbons from pipelines and storage tanks to trucks, barges or other pipelines, acquisition of Hydrocarbons at the well or bulk purchase at pipeline and terminal facilities and subsequent resale thereof.

      “Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of New York.

      “Capital Account” means, with respect to any Partner, a separate account established by the Partnership and maintained for each Partner in accordance with Section 3.4 hereof.

      “Capital Contribution” means, with respect to any Partner, the amount of money, if any, and the initial Gross Asset Value of any Property (other than money), if any, contributed to the Partnership with respect to the interests purchased by such Partner pursuant to the terms of this Agreement, in return for which the Partner contributing such capital shall receive a Partnership Interest.

      “Certificate ” means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of Delaware, as amended or restated from time to time.

      “Class A Partner” means a Limited Partner all or any portion of whose Limited Partnership Interest is evidenced by Class A Units.

      “Class A Unit” means a Partnership Interest representing a fractional part of the Partnership Interests of all Limited Partners, and having the rights and obligations specified with respect to Class A Units in this Agreement.

      “Class B Partner” means a Limited Partner all or any portion of whose Limited Partnership Interest is evidenced by Class B Units.

      “Class B Restricted Unit Agreement” means an agreement, substantially in the form of Exhibit A hereto, between the Partnership and any Limited Partner that is issued Class B Units, as any such agreement shall be amended or modified from time to time by the parties thereto.

      “Class B Unit” means a Partnership Interest representing a fractional part of the Partnership Interests of all Limited Partners, and having the rights and obligations specified with respect to Class B Units in this Agreement and the Class B Restricted Unit Agreement pursuant to which it was issued.

      “Code” means the United States Internal Revenue Code of 1986, as amended.

      “Contributed Unit Proceeds” means (i) distributions attributable to the ownership by the Partnership of Contributed Units and (ii) proceeds of any Special Disposition or other disposition of Contributed Units.

     “ Contributed Units ” means the subordinated units in the Master Limited Partnership contributed to the Partnership in 2001, which subordinated units converted into common units in the Master Limited Partnership in accordance with the provisions of the Master Limited Partnership Agreement.

     “ Contribution Percentage ” means in respect of a Capital Contribution required to be made pursuant to Section 2.1(b), (i) in the case of the General Partner, 1%, (ii) in the case of a Class A Partner, 99% times a fraction, the numerator of which is the number of such Class A Partner’s Class A Units at such time, and the denominator of which is the sum of (x) the number of outstanding Class A Units at such time and (y) the product of the Conversion Factor and the aggregate number of Earned Units and Vested Units outstanding at such time, and (iii) in the case of a Class B Partner, 99% times a fraction, the numerator of which is the product of the Conversion Factor and the number of such Class B Partner’s Earned Units and Vested Units at such time, and the denominator of which is the sum of (x) the number of outstanding Class A Units at such time and (y) the product of the Conversion Factor and the aggregate number Earned Units and Vested Units outstanding at such time.

     “ Conversion Factor ” means, as of a particular time, a fraction, the numerator of which is the regular quarterly cash distribution, if any, paid with respect to an Earned Unit or Vested Unit for the most recent quarter, and the denominator of which is the regular quarterly cash distribution (excluding, for this purpose, any distribution pursuant to Section 4.1(a) paid with respect to a Class A Unit for such quarter).

      “Depreciation” means, for each Taxable Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such Taxable Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Taxable Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such Taxable Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal

income tax purposes of an asset at the beginning of such Taxable Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.

      “Distribution Loan” means a loan to the Partnership, the proceeds of which are intended for inclusion in Available Cash; provided, that if any proceeds of a loan are used for any purposes other than a distribution to the Class A Members pursuant to Section 4.1(a) , only the portion of such loan distributed to the Class A Members shall be deemed to be a “Distribution Loan.”

      “Distribution Loan Proceeds” means the proceeds of a Distribution Loan.

     “ Earned Unit ” means a Class B Unit that constitutes an “Earned Unit” under the Class B Restricted Unit Agreement pursuant to which such Class B Unit was issued.

     “ E-Holdings ” means E-Holdings, III L.P., a Texas limited partnership.

      “EnCap” shall have the meaning set forth in Section 10.1 .

      “Encumbrance” means any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge, encumbrance, adverse claim, any defect or imperfection in title, preferential arrangement or restriction, right to purchase, right of first refusal or other burden or encumbrance of any kind, other than those imposed by this Agreement.

      “First Refusal Notice” shall have the meaning set forth in Section 7.8(a) .

      “General Partner” means Plains All American GP LLC, a Delaware limited liability company, any successor thereto, and any Persons hereafter admitted as additional general partners, each in its capacity as a general partner of the Partnership.

      “Gross Asset Value” means with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows and as otherwise provided in Section 3.2(b) :

     (a) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as reasonably determined by the General Partner; provided, however, that the initial Gross Asset Values of the assets contributed to the Partnership pursuant to Section 3.1 hereof shall be as set forth in such section or the schedule referred to therein;

     (b) The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values (taking Code Section 7701(g) into account), as reasonably determined by the General Partner as of the following times: (i) the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property as consideration for an interest in the Partnership; (iii) the issuance by the Partnership of

Class B Units; and (iv) the liquidation of the Partnership within the meaning of Regulation Section 1.704-1(b)(2)(ii)(g); and

     (c) The Gross Asset Value of any item of Partnership assets distributed to any Partner shall be adjusted to equal the gross fair market value (taking Code Section 7701(g) into account) of such asset on the date of distribution as reasonably determined by the General Partner.

     If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (b), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Profits and Losses.

      “Hydrocarbons” means crude oil, natural gas, casinghead gas, condensate, sulphur, natural gas liquids, plant products, liquefied petroleum gas and other liquid or gaseous hydrocarbons produced in association therewith, including, without limitation, coalbed methane and gas and CO ₂ .

      “Initial Class A Holders” means the Persons listed as such on Schedule I hereto.

      “Initial Grant Date Partnership Capital” means, with respect to the Class B Partners, the amount set forth in Schedule I, which amount is equal to the aggregate Capital Account balances of the General Partner and the Class A Partners. Initial Grant Date Partnership Capital shall be reduced by the amount of any Distribution Loan Proceeds distributed under Section 4.1(a) and then increased by the principal amount of any Distribution Loan assumed or paid by any entity that directly or indirectly owns the Class A Units.

      “Kafu” means KAFU Holdings LP, a Delaware limited partnership.

      “Kayne Anderson” shall have the meaning set forth in Section 10.1 .

      “Limited Partner” means, unless the context otherwise requires, each Initial Class A Holder and each additional Person that becomes a Class A Partner or a Class B Partner pursuant to the terms of this Agreement and that is shown as such on the books and records of the Partnership, in each case, in such Person’s capacity as a limited partner of the Partnership.

      “Limited Partnership Interest” means the ownership interest of a Limited Partner in the Partnership, which may be evidenced by Class A Units, Class B Units or any other Partnership Security or a combination thereof or interest therein, and includes any and all benefits to which such Limited Partner is entitled as provided in this Agreement, together with all obligations of such Limited Partner to comply with the terms and provisions of this Agreement.

      “Liquidating Trustee” has the meaning set forth in Section 8.3(a) .

      “LLC Agreement ” means the Second Amended and Restated Agreement Limited Liability Company Agreement of the General Partner, dated as of September 12, 2005, by and among the members in the General Partner and any other Persons who become members in the General Partner as provided therein, as amended from time to time in accordance with the terms thereof.

      “Losses” has the meaning set forth in the definition of “Profits” and “Losses”.

     “ Management Entity ” shall mean PAA Management, L.P.

     “ Management Sale ” shall have the meaning set forth in Section 7.9 .

      “Master Limited Partnership” means Plains All American Pipeline, L.P., and any successor thereto.

      “Master Limited Partnership Agreement” means the Third Amended and Restated Agreement of Limited Partnership of the Master Limited Partnership, dated as of June 27, 2001, as amended on April 15, 2004 and November 15, 2006, and as may be further amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

      “Member” means a record holder of a Membership Interest.

      “Membership Interest” means, with respect to a Partner, such Partner’s limited liability company interest, if any, in the General Partner, which refers to all of such Partner’s rights and interests in the General Partner in such Partner’s capacity as a member thereof, all as provided in the LLC Agreement and the Delaware Limited Liability Company Act.

      “Membership Transfer” shall have the meaning set forth in Section 7.1(b) .

      “Net Capital Transaction Proceeds” means the cash, notes, equity interests and any other consideration derived from the sale or other disposition of all or a portion of the Partnership’s assets.

      “Non-Purchasing Partner” shall have the meaning set forth in Section 7.8(d) .

      “Non-Selling Partner” shall have the meaning set forth in Section 7.8(b) .

      “Notice” means a writing, containing the information required by this Agreement to be communicated to a party, and shall be deemed to have been received (a) when personally delivered or sent by telecopy, (b) one day following delivery by overnight delivery courier, with all delivery charges pre-paid, or (c) on the third Business Day following the date on which it was sent by United States mail, postage prepaid, to such party at the address or fax number, as the case may be, of such party as shown on the records of the Partnership.

      “Offer” shall have the meaning set forth in Section 7.8(a) .

      “Offeror” shall have the meaning set forth in Section 7.8(a) .

      “Option” means an option to purchase Contributed Units granted pursuant to the Option Plan, as amended.

      “Option Plan” means the Plains All American 2001 Performance Option Plan, as amended, and any successor employee incentive plan funded with Contributed Units.

      “Optioned Interest” shall have the meaning set forth in Section 7.8(a) .

      “Partner” means the General Partner or any of the Limited Partners, and “Partners” means the General Partner and all of the Limited Partners.

      “Partnership” shall have the meaning set forth in the preamble hereof.

      “Partnership Interest” means a Partner’s limited partnership or general partnership interest in the Partnership which refers to all of a Partner’s rights and interests in the Partnership in such Partner’s capacity as a Partner, all as provided in this Agreement and the Act.

      “Partnership Security” means any class or series of equity interest in the Partnership (but excluding any options, rights, warrants and appreciation rights relating to an equity interest in the Partnership), including without limitation, Class A Units and Class B Units.

      “Permitted Transfer” shall mean:

     (a) with respect to Class A Units, a Transfer of any or all of the Partnership Interest by any Partner who is a natural person to (i) such Partner’s spouse, children (including legally adopted children and stepchildren), spouses of children or grandchildren or spouses of grandchildren; (ii) a trust for the benefit of the Partner and/or any of the Persons described in clause (i); or (iii) a limited partnership or limited liability company whose sole partners or members, as the case may be, are the Partner and/or any of the Persons described in clause (i) or clause (ii); provided , that in any of clauses (i), (ii) or (iii), the Partner transferring such Partnership Interest, or portion thereof, retains exclusive power to exercise all rights under this Agreement;

     (b) a Transfer of any or all of the Partnership Interest by any Partner to the Partnership;

     (c) with respect to Class A Units, a Transfer of any or all of the Partnership Interest by a Partner to any Affiliate of such Partner; provided, however , that such transfer shall be a Permitted Transfer only so long as such Partnership Interest, or portion thereof, is held by such Affiliate or is otherwise transferred in another Permitted Transfer; and

     (d) with respect to Class B Units, a Transfer permitted under the applicable Class B Restricted Unit Agreement and any Transfer of Vested Units in accordance with applicable securities laws.

           Provided, however , that no Permitted Transfer shall be effective unless and until the transferee of the Partnership Interest, or portion thereof, so transferred complies with Sections 7.1(b) . Except in the case of a Permitted Transfer pursuant to clause (b) above, from and after the date on which a Permitted Transfer becomes effective, the Permitted Transferee of the Partnership Interest, or portion thereof, so transferred shall have the same rights, and shall be bound by the same obligations, under this Agreement as the transferor of such Partnership Interest, or portion thereof, and shall be deemed for all purposes hereunder a Partner and such Permitted Transferee shall, as a condition to such Transfer, agree in writing to be bound by the terms of this Agreement. No Permitted Transfer shall conflict with or result in any violation of any judgment, order, decree, statute, law, ordinance, rule or regulation or require the Company,

if not currently subject, to become subject, or if currently subject, to become subject to a greater extent, to any statute, law, ordinance, rule or regulation, excluding matters of a ministerial nature that are not materially burdensome to the Company.

      “Permitted Transferee” shall mean any Person who shall have acquired and who shall hold a Partnership Interest, or portion thereof, pursuant to a Permitted Transfer.

      “Person ” means any individual, partnership, corporation, limited liability company, trust, incorporated or unincorporated organization or other legal entity of any kind.

      “Profits” and “Losses” means, for each Taxable Year, an amount equal to the Partnership’s net taxable income or loss for a taxable year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in computing such taxable income or loss), with the following adjustments:

     (a) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss;

     (b) Any expenditures of the Partnership described in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses, shall be subtracted from such taxable income or loss;

     (c) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraphs (b) or (c) of the definition of Gross Asset Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses;

     (d) Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Gross Asset Value;

     (e) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Taxable Year, computed in accordance with the definition of Depreciation;

     (f) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulation Sections 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment

decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and

     (g) Profits and Losses shall not include any items specially allocated pursuant to Section 5.3 or 5.4.

      “Property” means all assets, real or intangible, that the Partnership may own or otherwise have an interest in from time to time.

      “Regulations” means the regulations, including temporary regulations, promulgated by the United States Department of Treasury with respect to the Code, as such regulations are amended from time to time, or corresponding provisions of future regulations.

      “Regulatory Allocations” shall have the meaning set forth in Section 5.4(c) .

      “Selling Partner” shall have the meaning set forth in Section 7.8(a) .

      “Special Disposition” means (i) the delivery of Contributed Units upon the exercise of an Option when the exercise price is paid in cash, (ii) the sale of Contributed Units in a “cashless” exercise of an Option, but only to the extent the proceeds of such sale satisfy the exercise price, (iii) in the case of the exercise of an Option in which the exercise price is satisfied by “netting” the units delivered to the optionee, the sale of Contributed Units equal in number to the netted units, (iv) the sale of Contributed Units with a value substantially equivalent to the deemed aggregate exercise price for any Options cancelled and paid in cash, and (iv) any other disposition of Contributed Units reasonably attributable to the payment of the exercise price of an Option.

      “Strome” means Mark E. Strome.

      “Strome Hedgecap” means Strome Hedgecap Fund, L.P.

      “Subsequent Grant Date” means any date on which any Class B Units are granted following the date of the initial grant of Class B Units (as set forth on Schedule I).

      “Subsequent Grant Date Partnership Capital” means, with respect to any Subsequent Grant Date, an amount equal to the aggregate Capital Account balances as of such date of the General Partner, the Class A Partners and the then-existing Class B Partners, which amount shall be set forth in an amendment to Schedule I approved by the General Partner in good faith. Each Subsequent Grant Date Partnership Capital shall be reduced by the amount of any Distribution Loan Proceeds distributed under Section 4.1(a) after the date of the such Subsequent Grant Date and increased by the principal amount of any Distribution Loan assumed or paid by any entity that directly or indirectly owns the Class A Units after the date of such Subsequent Grant Date.

      “Taxable Year” shall mean the calendar year.

      “ Third A&R Limited Partnership Agreement” shall have the meaning set forth in the recitals hereto.

      “Transfer” or “Transferred” means to give, sell, exchange, assign, transfer, pledge, hypothecate, bequeath, devise or otherwise dispose of or encumber, voluntarily or involuntarily, by operation of law or otherwise. When referring to a Partnership Interest, “Transfer” shall mean the Transfer of such Partnership Interest whether of record, beneficially, by participation or otherwise.

      “Unit Percentages” means the Unit Percentages set forth on Schedule I.

     “ Vested Unit ” means a Class B Unit that constitutes a “Vested Unit” under the Class B Restricted Unit Agreement pursuant to which such Class B Unit was issued.

     “ Wachovia ” means Wachovia Investors, Inc.

ARTICLE II
ORGANIZATION

     The General Partner has previously formed the Partnership as a limited partnership pursuant to the provisions of the Act and the parties hereto hereby agree to amend and restate the Third A&R Limited Partnership Agreement of the Partnership in its entirety. The parties hereto acknowledge that they intend that the Partnership be taxed as a partnership and not as an association taxable as a corporation for federal income tax purposes. No election may be made to treat the Partnership as other than a partnership for federal income tax purposes.

     The name of the Partnership is Plains AAP, L.P. or such other name as the General Partner may hereafter adopt from time to time. The General Partner shall execute and file in the proper offices such certificates as may be required by any assumed name act or similar law in effect in the jurisdictions in which the Partnership may elect to conduct business.

     The principal office address of the Partnership is located at 333 Clay Street, 16th Floor, Houston, Texas 77002, or such other place as the General Partner designates from time to time. The registered office address and the name of the registered agent of the Partnership for service of process on the Partnership in the State of Delaware is as stated in the Certificate or as designated from time to time by the General Partner.

     The term of the Partnership commenced on May 21, 2001 and shall continue until dissolved pursuant to Section 8.1 hereof. The legal existence of the Partnership as a separate legal entity continues until the cancellation of the Certificate.

     The Partnership is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Partnership is, (a) acting as the sole member of the limited liability company that acts as the general partner, of the Master Limited Partnership pursuant to the Master Limited Partnership Agreement, (b) holding any or all of the Contributed Units and the Incentive Distribution Rights (as such terms are defined in the Transfer Agreement) and (c) engaging in any and all activities necessary or incidental to the foregoing.

     The Partnership may execute, deliver and perform all contracts, agreements and other undertakings and engage in all activities and transactions as may in the opinion of the General Partner be necessary or advisable to carry out its objects.

     Persons dealing with the Partnership are entitled to rely conclusively upon the power and authority of the General Partner as herein set forth.

ARTICLE III
CAPITAL

     (a) As of the date hereof, there are 2,300,000 Class A Units authorized and outstanding, and 200,000 Class B Units authorized. Schedule I sets forth the ownership of outstanding Class A Units and Unit Percentages and the number of outstanding Class B Units, and may be amended from time to time by the Partnership to reflect the issuance of additional Class A Units or Class B Units.

     (b) Each Partner agrees to make Capital Contributions in proportion to such Partner’s then-applicable Contribution Percentage for equity issuances by the Master Limited Partnership pursuant to Section 5.2(b) of the Master Limited Partnership Agreement approved by the Members pursuant to the LLC Agreement.

     (a) No Partner shall be required to make any additional Capital Contribution other than as required under Section 3.1 .

     (b) Subject to the restrictions contained in Section 3.5 of the Class B Restricted Unit Agreement, the Partnership may offer additional Partnership Interests to any Person with the approval of the General Partner. The names, addresses and Capital Contributions of the Partners shall be reflected in the books and records of the Partnership.

     (a) No Partner shall be obligated to loan funds to the Partnership. Loans by a Partner to the Partnership shall not be considered Capital Contributions. The amount of any such loan shall be a debt of the Partnership owed to such Partner in accordance with the terms and conditions upon which such loan is made.

     (b) A Partner may (but shall not be obligated to) guarantee a loan made to the Partnership. If a Partner guarantees a loan made to the Partnership and is required to make payment pursuant to such guarantee to the maker of the loan, then the amounts so paid to the maker of the loan shall be treated as a loan by such Partner to the Partnership and not as an additional Capital Contribution.

     (a) The Partnership shall maintain for each Partner a separate Capital Account with respect to the Partnership Interest owned by such Partner in accordance with the following provisions:

          (i) To each Partner’s Capital Account there shall be credited (A) such Partner’s Capital Contributions, (B) such Partner’s share of Profits and items of income and gain allocated to such Partner pursuant to Sections 5.3 or 5.4, and (C) the amount of any Partnership liabilities assumed by such Partner or which are secured by any Property distributed to such Partner. The principal amount of a promissory note which is not readily traded on an established securities market and which is contributed to the Partnership by the maker of the note (or a Partner related to the maker of the note within the meaning of Regulation Section 1.704-1(b)(2)(ii)(c)) shall not be included in the Capital Account of any Partner until the Partnership makes a taxable disposition of the note or until (and only to the extent) principal payments are made on the note, all in accordance with Regulation Section 1.704-1(b)(2)(iv)(d)(2);

          (ii) To each Partner’s Capital Account there shall be debited (A) the amount of money and the Gross Asset Value of any Property distributed or treated as an advance distribution to such Partner pursuant to any provision of this Agreement (including without limitation any distributions pursuant to Section 4.1) , (B) such Partner’s share of Losses and items of loss and deduction allocated to such Partner pursuant to Section 5.4, and (C) the amount of any liabilities of such Partner assumed by the Partnership or which are secured by any Property contributed by such Partner to the Partnership;

          (iii) In the event Partnership Interests are Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent such Capital Account relates to the Transferred Partnership Interests; and

          (iv) In determining the amount of any liability for purposes of Sections 3.4(a)(i) and (ii) there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.

     (b) The foregoing Section 3.4(a) and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulation Section 1.704-1(b)

and, to the greatest extent practicable, shall be interpreted and applied in a manner consistent with such Regulation. The General Partner in its discretion and to the extent otherwise consistent with the terms of this Agreement shall (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of capital reflected on the Partnership’s balance sheet, as computed for book purposes, in accordance with Regulation Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulation Section 1.704-1(b).

     Except as expressly provided in this Agreement, no Partner shall be entitled to (a) withdraw or reduce such Partner’s Capital Contribution or to receive any distributions from the Partnership, or (b) receive or be credi