Execution Version

Execution Version

June 14, 2015

Very truly yours,

BIF II SWAN FINANCE CO. (DELAWARE) LLC

By:

/s/ Darren Soice

Name:

Darren Soice

Title:

Senior Vice President

Accepted and agreed to as of

the date first written above by:

NISKA GAS STORAGE PARTNERS LLC

By:

/s/ William H. Shea, Jr.

Name:

William H. Shea, Jr.

Title:

President and Chief Executive Officer

Borrower:

Niska Gas Storage Partners LLC

Lender:

BIF II Swan Finance Co. (Delaware) LLC

Facility Type; Use of Proceeds:

Term loans available in multiple draws (the “Loans”), in minimum amounts and subject to procedures to be negotiated, governed by a new definitive written loan agreement (the “New Term Loan Agreement”).  Proceeds of Loans to be used for working capital purposes.

Guarantors:

All entities that are now or hereafter become guarantors under the Amended and Restated Credit Agreement dated as of June 29, 2012 (the “Credit Agreement”), among the Borrower, certain subsidiaries thereof, Royal Bank of Canada as Administrative Agent, and the other lenders party thereto. In addition, Niska Sponsor Holdings Cooperatief (“Riverstone”) will guarantee repayment of the Loans until the Guarantee Termination Date (as defined below) on terms reasonably satisfactory to the Lender. 

Guarantee Termination:

Riverstone’s guarantee of the Loans will terminate (and the Lender will release such guarantee) upon the earlier to occur of (i) the acquisition of the business of the Borrower and its subsidiaries pursuant to the Merger Agreement and (ii) the effectiveness of an amendment, restatement, refinancing or other modification of the Credit Agreement that permits the Borrower and certain of its subsidiaries to provide security over its assets to the Lender as described below (such earlier date, the “Guarantee Termination Date”).  The Lender agrees to act reasonably (i) in determining whether such amendment, restatement, refinancing or other modification of the Credit Agreement is satisfactory in form and substance to Lender, and (ii) in negotiating the corresponding release of Riverstone’s guarantee.

Collateral:

Riverstone’s obligations under its guarantee of the Loans would be secured by a first priority perfected security interest in all of the equity interests in Borrower owned by Riverstone.  Borrower will use commercially reasonable efforts to seek an amendment to the Credit Agreement, beginning as soon as possible after execution of the Commitment Letter, and will facilitate Lender’s participation in the negotiation of such amendment, to permit the grant of liens on collateral as contemplated herein. The collateral to be pledged by the Borrower and its subsidiaries will be substantially similar to the collateral currently pledged pursuant to the Credit Agreement. The secured parties under the Credit Agreement will retain a first priority lien on all accounts receivable,

inventory and related assets, including any assets comprising the “borrowing base” thereunder (other than fixed assets which currently comprise the “borrowing base”) (collectively, the “Current Assets”), and will have a second priority lien on all other collateral (the “Fixed Assets”), in each case, subject to permitted liens. The Lender will be granted a second priority lien on the Current Assets and a first priority lien on the Fixed Assets, in each case, subject to customary permitted liens to be negotiated. The relative priorities of the liens securing the Credit Agreement and the New Term Loan Agreement will be set forth in an intercreditor agreement reasonably satisfactory to the Borrower, the administrative agent under the Credit Agreement, and the Lender.

Principal Amount

$50 million

Maturity:

Earlier of (a) the date that is 18 months after the date of execution of the New Term Loan Agreement by the Borrower, the Lender and the Guarantors, and (b) the Trigger Date (as hereinafter defined).  “Trigger Date”  means the first to occur of (i) the acceleration of the Loans during the continuance of an Event of Default, (ii) the date on which the Merger Agreement is terminated in accordance with its terms, (iii) the date that is 90 days after the date on which the Lender provides written notice to Borrwer of the Lender’s determination, made reasonably and in good faith, that the acquisition of the business of Borrower and its subsidiaries cannot or will not be consummated for any reason, including without limitation regulatory matters or legal bars, and (iv) any uncured breach of any other agreement between the Borrower or Riverstone, on the one hand, and  Lender or any affiliate thereof, on the other hand, which breach results in termination of such agreement.

Interest Rate:

10.0% per annum.  Interest will be paid, at the Borrower’s option, either quarterly in arrears or by addition to the principal amount (and thus deferred) until maturity of the Loans.

Prepayment:

The Borrower will be permitted (but not required, except upon acceleration) to prepay all or a portion of the Loans at any time, without premium or penalty, provided that once prepaid, a Loan may not be reborrowed.

Representations and Warranties:

The New Term Loan Agreement will contain representations and warranties substantially consistent with the Credit Agreement (excluding any representations and warranties solely due to the asset-based nature of the Credit Agreement), including with respect to financial statements; no material adverse change; existence and standing; authorization and validity; compliance with law, including, without limitation, anti-corruption laws relating to bribery or corruption (“Anti-Corruption Laws”) and economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State (“Sanctions”); corporate power and authority; enforceability of the loan documents; no conflict with law or contractual obligations; no material litigation; no default; ownership of property; liens; intellectual property;

taxes; insurance; subsidiaries; environmental matters; labor matters; and accuracy of disclosure.

Affirmative Covenants:

Affirmative covenants substantially consistent with the Credit Agreement (excluding any affirmative covenants solely due to the asset-based nature of the Credit Agreement), including, without limiting the generality of the foregoing, covenants with respect to delivery of financial statements, compliance certificates and projections; delivery of other information requested by the Lender; payment of obligations; continuation of business and maintenance of existence and material rights and privileges; compliance with laws; compliance with Anti-Corruption Laws and applicable Sanctions; maintenance of property and insurance; maintenance of books and records; right of the Lender to inspect property and books and records; notices of defaults, litigation and other material events; compliance with environmental laws; entry into necessary intercreditor agreements (with lenders under the Credit Agreement) satisfactory in all respects to the Lender, related to the collateral to be obtained; execution of security agreements and other lien instruments reflecting such collateral, and containing substantially the same terms and provisions pertaining to collateral as those set forth in the Credit Agreement and related lien instruments; and use of proceeds, including in compliance with Anti-Corruption Laws and Sanctions.

Negative Covenants:

Negative covenants substantially consistent with the Credit Agreement (excluding any negative covenants solely due to the asset-based nature of the Credit Agreement), including, without limiting the generality of the foregoing, limitations on debt; liens; mergers, acquisitions and dissolutions; asset dispositions; payments of dividends and other payments in respect of equity interests; investments; limitation on payment of subordinated debt; transactions with affiliates; prepayments of indebtedness for borrowed money other than as permitted under the Merger Agreement; limitations on restrictions on payments and pledges; and amendment of material documents.

Events of Default

The New Term Loan Agreement will include events of default substantially consistent with the Credit Agreement (excluding any events of default solely due to the asset-based nature of the Credit Agreement), including, without limiting the generality of the foregoing, (a) cross defaults to (i) the Credit Agreement and (ii) the Indenture dated March 17, 2014, by Borrower, certain subsidiaries thereof as “issuers” of the 6.5% Senior Notes due 2019 and The Bank of New York Mellon as indenture trustee, in each case in the form existing on the closing date; (b) nonpayment of principal, interest, fees or other amounts when due (subject to grace periods consistent with the Credit Agreement); (c) representations and warranties are incorrect in any material respect; (d) bankruptcy events; (e) material judgments; (f) any of the Loan Documents, including Riverstone’s guarantee, shall cease to be in full force and effect of any party thereto shall so assert (except, with respect to the guarantee of Riverstone, as expressly contemplated herein); (g) any security interests granted to the Lender shall cease to be enforceable and of the same priority purported to be created by the Loan Documents; and (h) a change of control (the definition of which is to be agreed but in any event to permit

the transactions contemplated by the Merger Agreement).

Initial Conditions Precedent

The availability of the term loan facility will be conditioned upon satisfaction of, among other things, the following conditions precedent (the date upon which all such conditions precedent will be satisfied, the “Closing Date”):

(a)           The Borrower will have executed and delivered the New Term Loan Agreement and Riverstone will have executed and delivered a guarantee in accordance with the above (together with the New Term Loan Agreement, the “Loan Documents”) mutually satisfactory to the Borrower and the Lender and reflecting the terms and conditions set forth herein.

(b)           The Borrower will have reimbursed the Lender for all reasonable, out of pocket expenses in connection with the New Term Loan Agreement (excluding, for the avoidance of doubt, any expenses in connection with the Merger Agreement) for which invoices have been presented on or before the Closing Date.

(c)           The transactions contemplated by the New Term Loan Agreement do not result in the violation of applicable law by any party to the New Term Loan Agreement.

(d)           The Lender will have received from the Borrower resolutions, good standing certificates, incumbency certificates, a solvency certificate from the chief financial officer, opinions of counsel, organizational documents, and other customary documents and agreements substantially consistent with those required under the Credit Agreement at the closing thereof (other than instruments to create liens, which will not be required until the Credit Agreement is amended to permit same, as contemplated herein) all in form and substance reasonably acceptable to the Lender.

Ongoing Conditions Precedent

The making of each Loan will be conditioned upon (a) the accuracy and correctness of all representations and warranties in the Loan Documents; (b) there being no default or event of default under the New Term Loan Agreement in existence at the time of, or after giving effect to the making of, such extension of credit; (c) the absence of any determination by Lender, made reasonably and in good faith, that the acquisition of the business of Borrower and its subsidiaries cannot or will not be consummated for any reason, including without limitation regulatory matters or legal bars and (d) the Borrower will have delivered a borrowing request to the Lender describing the requested Loan and otherwise in form and substance satisfactory to the Lender.

Reimbursement of Expenses and Indemnification

The Borrower will pay (a) all reasonable, out-of-pocket expenses of the Lender associated with the preparation, execution, delivery and administration of the Loan Documents and any amendment or waiver with respect thereto (including the reasonable fees, disbursements and other charges of counsels as required by Lender) and (b) all expenses of the Lender (including the fees, disbursements and other charges of counsel) in connection with the enforcement of the Loan Documents, in each case, excluding, for the avoidance of doubt, any expenses in connection with the

Merger Agreement.  The Lender (and its affiliates and their respective officers, directors, employees, advisors and agents) will have no liability for, and will be indemnified and held harmless against, any loss, liability, cost or expense incurred in respect of any claim, litigation, investigation or proceeding relating to the financing contemplated hereby or the use of proceeds thereof (except to the extent found in a final judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the indemnified party (or its officers, directors or employees)).

Other Terms

The New Term Loan Agreement will contain provisions relating to tax matters, changes in law, assignments and participations, and other matters customarily found in credit agreements such as the Credit Agreement.

Governing Law:

New York

Process:

Lender will prepare initial drafts of all loan documentation based on the Credit Agreement (and related loan documents).  Loan documents will be governed by New York law.  The Lender’s legal fees for loan document preparation and otherwise incurred in connection with the loan facility will be paid or reimbursed by the Borrower upon execution of the New Term Loan Agreement (excluding, for the avoidance of doubt, any legal fees in connection with the Merger Agreement).