8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
May 24, 2007

BREITBURN ENERGY PARTNERS L.P.

(Exact name of Registrant as specified in its charter)

Delaware	001-33055	74-3169953
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

515 South Flower Street, Suite 4800

Los Angeles, CA 90071

(Address of principal executive office)

(213) 225-5900

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

BreitBurn Energy Partners L.P. (the “Partnership”) previously announced in its Form 8-K filed on May 22, 2007 that it had entered into a Unit Purchase Agreement (the “Unit Purchase Agreement”) with Kayne Anderson MLP Investment Company, Kayne Anderson Energy Total Return Fund, Inc., Kayne Anderson Energy Development Company, GPS New Equity Fund L.P., GPS MLP Fund LP, Royal Bank of Canada, Lehman Brothers MLP Opportunity Fund L.P., ZLP Fund, L.P. and Structured Finance Americas, LLC (the “Purchasers”) to sell approximately $130 million of common units representing limited partner interests of the Partnership (the “Common Units”) in a private placement (the “Private Placement”). The Partnership issued and sold 4,062,500 Common Units to the Purchasers pursuant to the Unit Purchase Agreement on May 24, 2007.  The Partnership used the net proceeds from the Private Placement to fund the cash consideration for the Calumet Acquisition (as defined below).  The remainder of the proceeds was used to repay indebtedness under the Partnership’s credit facility.  The negotiated purchase price for the Common Units was $32.00 per unit.  The Private Placement was made in reliance upon an exemption from the registration requirements of the Securities Act of 1933 pursuant to Section 4(2) thereof.  A copy of the Unit Purchase Agreement is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by reference.

On May 24, 2007, BreitBurn Operating L.P. (“BreitBurn Operating”), a wholly owned subsidiary of the Partnership, entered into an Amended and Restated Asset Purchase Agreement (the “Asset Purchase Agreement”) with Calumet Florida, L.L.C. (“Calumet”), pursuant to which BreitBurn Operating agreed to acquire certain interests in oil and gas leases and related assets from Calumet (the “Calumet Acquisition”) through the acquisition of a limited liability company that owns all of the named assets (the “Amended and Restated Calumet Acquisition”).  A copy of the Amended and Restated Asset Purchase Agreement is filed as Exhibit 10.2 to this Form 8-K and is incorporated herein by reference.  The transaction was closed on May 24, 2007.  The purchase price was $100 million with an effective date of January 1, 2007.  After adjustments for costs and revenues for the period between the effective date and the closing, including interest paid to the seller, and after taking into account more than 220,000 barrels of crude oil held in storage as of the closing date(1) (which is expected to be delivered and sold over the next 45 days), BreitBurn Operating paid Calumet approximately $107 million at closing.

In connection with the closing of the Unit Purchase Agreement, the Partnership entered into a Registration Rights Agreement (the “Registration Rights Agreement”) dated May 24, 2007 with the Purchasers.  A copy of the Registration Rights Agreement is filed as Exhibit 4.1 to this Form 8-K and is incorporated herein by reference.  Pursuant to the Registration Rights Agreement, the Partnership is required to file a shelf registration statement to register the Common Units and use its commercially reasonable efforts to cause the registration statement to become effective within 275 days of the closing date (the “Registration Deadline”). In addition, the Registration Rights Agreement gives the Purchasers piggyback registration rights under certain circumstances.  These registration rights are transferable to affiliates of the Purchasers and, in certain circumstances, to third parties.

If the shelf registration statement is not effective by the Registration Deadline, then the Partnership must pay the Purchasers liquidated damages of 0.25% of the product of the purchase price times the number of registrable securities held by the Purchasers per 30-day period for the first 60 days following the Registration Deadline. This amount will increase by an additional 0.25% of the product of the purchase price times the number of registrable securities held by the Purchasers per 30-day period for each subsequent 60 days, up to a maximum of 1.0% of the product of the purchase price times the number of registrable securities held by the Purchasers per 30-day period. The aggregate amount of liquidated damages the Partnership must pay will not exceed 10.0% of the aggregate purchase price.

2.01  Completion of Acquisition or Disposition of Assets.

On May 24, 2007, the Amended and Restated Calumet Acquisition was completed and the Partnership, through BreitBurn Operating, acquired the named assets pursuant to the amended and restated Asset Purchase Agreement. The information set forth under Item 1.01 above is incorporated herein by reference.

(1) The sales value of these 220,000 barrels when sold over the next 45 days and assuming no significant change in oil prices is expected to be approximately $11 million.

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Item 3.02  Unregistered Sales of Equity Securities.

The information set forth above under Item 1.01 is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On May 24, 2007, the Partnership issued a press release announcing the closing of the Calumet Acquisition. A copy of the press release is furnished and attached as Exhibit 99.1 hereto and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 7.01 and in Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless the Partnership specifically states that the information is to be considered “filed” under the Exchange Act or incorporates it by reference into a filing under the Exchange Act or the Securities Act of 1933, as amended.

Item 9.01  Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The financial statements required in connection with the Calumet Acquisition are not included in this Current Report. The Company will file the required financial statements within 71 calendar days after the date this Current Report was required to be filed with the Securities and Exchange Commission.

(b) Pro forma financial information.

The financial statements required in connection with the Calumet Acquisition are not included in this Current Report. The Company will file the required financial statements within 71 calendar days after the date this Current Report was required to be filed with the Securities and Exchange Commission.

(c) Shell company transactions.

Not applicable.

(d) Exhibits.

4.1		Registration Rights Agreement, dated as of May 24, 2007, by and among BreitBurn Energy Partners L.P. and each of the Purchasers set forth therein.
10.1	*	Unit Purchase Agreement, dated as of May 16, 2007, by and among BreitBurn Energy Partners L.P. and each of the Purchasers set forth therein.
10.2	*	Amended and Restated Asset Purchase Agreement, dated as of May 16, 2007, by and among BreitBurn Operating L.P. and Calumet Florida, LLC
99.1		Press Release of BreitBurn Energy Partners L.P., dated May 24, 2007

*The schedules to this agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K.  The Company will furnish copies of such schedules to the Securities and Exchange Commission upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	BREITBURN ENERGY PARTNERS L.P.
	By:	BreitBurn GP, LLC,
		its general partner
Date:     May 31, 2007	By:	/s/Halbert S. Washburn
		Halbert S. Washburn
		Co-Chief Executive Officer

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EXHIBIT INDEX

4.1		Registration Rights Agreement, dated as of May 24, 2007, by and among BreitBurn Energy Partners L.P. and each of the Purchasers set forth therein.
10.1	*	Unit Purchase Agreement, dated as of May 16, 2007, by and among BreitBurn Energy Partners L.P. and each of the Purchasers set forth therein.
10.2	*	Amended and Restated Asset Purchase Agreement, dated as of May 16, 2007, by and among BreitBurn Operating L.P. and Calumet Florida, LLC
99.1		Press Release of BreitBurn Energy Partners L.P., dated May 24, 2007

*The schedules to this agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K.  The Company will furnish copies of such schedules to the Securities and Exchange Commission upon request.

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EX-4.1

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

BREITBURN ENERGY PARTNERS L.P.

AND

THE PURCHASERS NAMED HEREIN

TABLE OF CONTENTS

		Page
ARTICLE I
DEFINITIONS
Section 1.1	Definitions	1
Section 1.2	Registrable Securities	3
ARTICLE II
REGISTRATION RIGHTS
Section 2.1	Registration	3
Section 2.2	Piggyback Rights	5
Section 2.3	Underwritten Offering	7
Section 2.4	Sale Procedures	7
Section 2.5	Cooperation by Holders	11
Section 2.6	Restrictions on Public Sale by Holders of Registrable Securities	11
Section 2.7	Expenses	11
Section 2.8	Indemnification	12
Section 2.9	Rule 144 Reporting	14
Section 2.10	Transfer or Assignment of Registration Rights	15
Section 2.11	Limitation on Subsequent Registration Rights	15
ARTICLE III
MISCELLANEOUS
Section 3.1	Communications	15
Section 3.2	Successor and Assigns	15
Section 3.3	Aggregation of Purchased Units	16
Section 3.4	Recapitalization, Exchanges, Etc. Affecting the Common Units	16
Section 3.5	Specific Performance	16
Section 3.6	Counterparts	16
Section 3.7	Headings	16
Section 3.8	Governing Law	16
Section 3.9	Severability of Provisions	16
Section 3.10	Entire Agreement	16
Section 3.11	Amendment	17
Section 3.12	No Presumption	17
Section 3.13	Obligations Limited to Parties to Agreement	17
Section 3.14	Interpretation	17

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REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of May 18 2007 by and among BreitBurn Energy Partners L.P., a Delaware limited partnership (“BreitBurn”), and each of Kayne Anderson MLP Investment Company, Kayne Anderson Energy Total Return Fund, Inc., Kayne Anderson Energy Development Company, GPS New Equity Fund LP, GPS MLP Fund LP, Royal Bank of Canada, Lehman Brothers MLP Opportunity Fund L.P., ZLP Fund, L.P. and Structured Finance Americas, LLC (a “Purchaser” and, collectively, the “Purchasers”).

WHEREAS, this Agreement is made in connection with the Closing of the issuance and sale of the Purchased Units pursuant to the Unit Purchase Agreement, dated as of May 16, 2007, by and among BreitBurn and the Purchasers (the “Purchase Agreement”);

WHEREAS, BreitBurn has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Purchasers pursuant to the Purchase Agreement; and

WHEREAS, it is a condition to the obligations of each Purchaser and BreitBurn under the Purchase Agreement that this Agreement be executed and delivered.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1  Definitions.  Capitalized terms used herein without definition shall have the meanings given to them in the Purchase Agreement.  The terms set forth below are used herein as so defined:

“Agreement” has the meaning specified therefor in the introductory paragraph.

“BreitBurn” has the meaning specified therefor in the introductory paragraph.

“Effectiveness Period” has the meaning specified therefor in Section 2.1(a)(i) of this Agreement.

“Holder” means the record holder of any Registrable Securities.

“Included Registrable Securities” has the meaning specified therefor in Section 2.2(a) of this Agreement.

“Liquidated Damages” has the meaning specified therefor in Section 2.1(a)(ii) of this Agreement.

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“Liquidated Damages Multiplier” means the product of $32.00 times the number of Common Units purchased by such Purchaser.

“Losses” has the meaning specified therefor in Section 2.8(a) of this Agreement.

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

“Opt Out Notice” has the meaning specified therefor in Section 2.2(a) of this Agreement.

“Other Holders” has the meaning specified therefor in Section 2.2(b).

“Partnership Agreement” means the First Amended and Restated Limited Partnership Agreement of BreitBurn Energy Partners L.P., dated as of October 10, 2006.

“Purchase Agreement” has the meaning specified therefor in the Recitals of this Agreement.

“Purchaser” and “Purchasers” have the meanings specified therefor in the introductory paragraph of this Agreement.

“Purchaser Underwriter Registration Statement” has the meaning specified therefor in Section 2.4(o) of this Agreement.

“Registrable Securities” means:  (i) the Purchased Units, and (ii) any Common Units issued as Liquidated Damages pursuant to this Agreement, all of which Registrable Securities are subject to the rights provided herein until such rights terminate pursuant to the provisions hereof.

“Registration Deadline” means 275 days from the Closing Date.

“Registration Expenses” has the meaning specified therefor in Section 2.7(a) of this Agreement.

“Registration Statement” has the meaning specified therefor in Section 2.1(a)(i) of this Agreement.

“Selling Expenses” has the meaning specified therefor in Section 2.7(a) of this Agreement.

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

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

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Section 1.2  Registrable Securities.  Any Registrable Security will cease to be a Registrable Security when:  (a) a registration statement covering such Registrable Security has been declared effective by the Commission and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) such Registrable Security has been disposed of pursuant to any section of Rule 144 (or any similar provision then in force) under the Securities Act; (c) such Registrable Security can be disposed of pursuant to Rule 144(k) (or any similar provision then in force) under the Securities Act; (d) such Registrable Security is held by BreitBurn or one of its Subsidiaries; or (e) such Registrable Security has been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities.

ARTICLE II

REGISTRATION RIGHTS

Section 2.1  Registration.

(a)           Registration

(i)            Deadline To Go Effective.  BreitBurn shall prepare and file a registration statement under the Securities Act to permit the resale of the Registrable Securities from time to time, including as permitted by Rule 415 under the Securities Act (or any similar provision then in force) with respect to all of the Registrable Securities (the “Registration Statement”).  BreitBurn shall use its commercially reasonable efforts to cause the Registration Statement to become effective no later than the Registration Deadline.  A Registration Statement filed pursuant to this Section 2.1 shall be on such appropriate registration form of the Commission as shall be selected by BreitBurn.  BreitBurn will use its commercially reasonable efforts to cause the Registration Statement filed pursuant to this Section 2.1 to be continuously effective under the Securities Act until the date which all Registrable Securities have ceased to be Registrable Securities pursuant to Section 1.2 (the “Effectiveness Period”).  The Registration Statement when declared effective (including the documents incorporated therein by reference) shall comply as to form with all applicable requirements of the Securities Act and the Exchange Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

(ii)           Failure To Go Effective.  If the Registration Statement required by Section 2.1 of this Agreement is not declared effective by the Registration Deadline, then each Purchaser shall be entitled to a payment with respect to the Purchased Units of each such Purchaser, as liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages Multiplier per 30-day period for the first 60 days following the Registration Deadline, increasing by an additional 0.25% of the Liquidated Damages Multiplier per 30-day period for each subsequent 60 days, up to a maximum of 1.0% of the Liquidated Damages Multiplier per 30-day period (the “Liquidated Damages”); provided, however, the aggregate amount of Liquidated Damages payable by BreitBurn under this Agreement to each Purchaser shall not exceed 10.0% of the aggregate proceeds from the

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sale of the Purchased Units.  The Liquidated Damages payable pursuant to the immediately preceding sentence shall be payable within ten (10) Business Days of the end of each such 30-day period.  Any Liquidated Damages shall be paid to each Purchaser in cash or immediately available funds; provided, however, if BreitBurn certifies that it is unable to pay Liquidated Damages in cash or immediately available funds because such payment would result in a breach under any of BreitBurn’s or BreitBurn’s Subsidiaries’ credit facilities or other indebtedness filed as exhibits to the BreitBurn SEC Documents, then BreitBurn may pay the Liquidated Damages in kind in the form of the issuance of additional Common Units.  Upon any issuance of Common Units as Liquidated Damages, BreitBurn shall promptly prepare and file an amendment to the Registration Statement prior to its effectiveness adding such Common Units to such Registration Statement as additional Registrable Securities.  The determination of the number of Common Units to be issued as Liquidated Damages shall be equal to the amount of Liquidated Damages divided by the volume weighted average closing price of the Common Units (as reported by The Nasdaq Global Market) for the ten (10) trading days immediately preceding the date on which the Liquidated Damages payment is due.  The payment of Liquidated Damages to a Purchaser shall cease at the earlier of (i) the effectiveness of the Registration Statement and (ii) such time as the Purchased Units of such Purchaser become eligible for resale under Rule 144(k) promulgated under the Securities Act.  As soon as practicable following the date that the Registration Statement becomes effective, but in any event within two Business Days of such date, BreitBurn shall provide the Purchasers with written notice of the effectiveness of the Registration Statement.

(iii)          Waiver of Liquidated Damages.  If BreitBurn is unable to cause a Registration Statement to go effective by the Registration Deadline as a result of an acquisition, merger, reorganization, disposition or other similar transaction, then BreitBurn may request a waiver of the Liquidated Damages, which may be granted or withheld by the consent of the Holders of a majority of the Purchased Units, taken as a whole, in their sole discretion.

(iv)          Termination of Purchaser’s Rights.  A Purchaser’s rights (and any transferee’s rights pursuant to Section 2.10 of this Agreement) under this Section 2.1 shall terminate upon the termination of the Effectiveness Period.

(b)           Delay Rights.  Notwithstanding anything to the contrary contained herein, BreitBurn may, upon written notice to any Selling Holder whose Registrable Securities are included in the Registration Statement, suspend such Selling Holder’s use of any prospectus which is a part of the Registration Statement (in which event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to the Registration Statement, but such Selling Holder may settle any such sales of Registrable Securities) if (i) BreitBurn is pursuing an acquisition, merger, reorganization, disposition or other similar transaction and BreitBurn determines in good faith that BreitBurn’s ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in the Registration Statement or (ii) BreitBurn has experienced some other material non-public event the disclosure of which at such time, in the good faith judgment of BreitBurn, would materially

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adversely affect BreitBurn; provided, however, in no event shall the Purchasers be suspended for a period that exceeds an aggregate of 60 days in any 180-day period or 90 days in any 365-day period.  Upon disclosure of such information or the termination of the condition described above, BreitBurn shall provide prompt notice to the Selling Holders whose Registrable Securities are included in the Registration Statement, shall promptly terminate any suspension of sales it has put into effect and shall take such other actions to permit registered sales of Registrable Securities as contemplated in this Agreement.

(c)           Additional Rights to Liquidated Damages.  If (i) the Holders shall be prohibited from selling their Registrable Securities under the Registration Statement as a result of a suspension pursuant to Section 2.1(b) of this Agreement in excess of the periods permitted therein or (ii) the Registration Statement is filed and declared effective but, during the Effectiveness Period, shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded by a post-effective amendment to the Registration Statement, a supplement to the prospectus or a report filed with the Commission pursuant to Sections 13(a), 13(c), 14 or l5(d) of the Exchange Act, then, until the suspension is lifted or a post-effective amendment, supplement or report is filed with the Commission, but not including any day on which a suspension is lifted or such amendment, supplement or report is filed and declared effective, if applicable, BreitBurn shall owe the Holders an amount equal to the Liquidated Damages, following (x) the date on which the suspension period exceeded the permitted period under 2.1(b) of this Agreement or (y) the day after the Registration Statement ceased to be effective or failed to be useable for its intended purposes, as liquidated damages and not as a penalty.  For purposes of this Section 2.1(c), a suspension shall be deemed lifted on the date that notice that the suspension has been lifted is delivered to the Holders pursuant to Section 3.1 of this Agreement.

Section 2.2   Piggyback Rights.

(a)           Participation.  If BreitBurn proposes to file a prospectus supplement to an effective shelf registration statement, other than the Registration Statement contemplated by Section 2.1 of this Agreement, or BreitBurn proposes to file a registration statement, other than a shelf registration statement, in either case, for the sale of Common Units in an Underwritten Offering for its own account and/or another Person, then as soon as practicable but not less than three Business Days prior to the filing of (x) any preliminary prospectus supplement relating to such Underwritten Offering pursuant to Rule 424(b) under the Securities Act, (y) the prospectus supplement relating to such Underwritten Offering pursuant to Rule 424(b) under the Securities Act (if no preliminary prospectus supplement is used) or (z) such registration statement, as the case may be, then BreitBurn shall give notice (including, but not limited to, notification by electronic mail) of such proposed Underwritten Offering to the Holders and such notice shall offer the Holders the opportunity to include in such Underwritten Offering such number of Registrable Securities (the “Included Registrable Securities”) as each such Holder may request in writing; provided, however, that if BreitBurn has been advised by the Managing Underwriter that the inclusion of Registrable Securities for sale for the benefit of the Holders will have a material adverse effect on the price, timing or distribution of the Common Units in the Underwritten Offering, then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.2(b) of this Agreement; provided,

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further, that BreitBurn shall not be obligated to include any Registrable Securities in any Underwritten Offering unless the Holders request inclusion of at least $5 million of Registrable Securities in such offering.  The notice required to be provided in this Section 2.2(a) to Holders shall be provided on a Business Day pursuant to Section 3.1 hereof and receipt of such notice shall be confirmed by such Holder.  Each such Holder shall then have three Business Days after receiving such notice to request inclusion of Registrable Securities in the Underwritten Offering, except that such Holder shall have one Business Day after such Holder confirms receipt of the notice to request inclusion of Registrable Securities in the Underwritten Offering in the case of a “bought deal” or “overnight transaction” where no preliminary prospectus is used.  If no request for inclusion from a Holder is received within the specified time, such Holder shall have no further right to participate in such Underwritten Offering.  If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, BreitBurn shall determine for any reason not to undertake or to delay such Underwritten Offering, BreitBurn may, at its election, give written notice of such determination to the Selling Holders and, (x) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering, and (y) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for the same period as the delay in the Underwritten Offering.  Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such offering by giving written notice to BreitBurn of such withdrawal up to and including the time of pricing of such offering.  Each Holder’s rights under this Section 2.2(a) shall terminate when such Holder (together with any Affiliates or swap counterparties of such Holder) holds less than $10 million of Purchased Units, based on the Commitment Amounts.  Notwithstanding the foregoing, any Holder may deliver written notice (an “Opt Out Notice”) to BreitBurn requesting that such Holder not receive notice from BreitBurn of any proposed Underwritten Offering; provided that such Holder may later revoke any such notice.

(b)           Priority of Rights.  If the Managing Underwriter or Underwriters of any proposed Underwritten Offering of Common Units included in an Underwritten Offering involving Included Registrable Securities advises BreitBurn that the total amount of Common Units that the Selling Holders and any other Persons intend to include in such offering exceeds the number that can be sold in such offering without being likely to have a material adverse effect on the price, timing or distribution of the Common Units offered or the market for the Common Units, then the Common Units to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter or Underwriters advises BreitBurn can be sold without having such adverse effect, with such number to be allocated (i) first, to BreitBurn, and (ii) second, pro rata among the Selling Holders party to this Agreement and any other Persons who have been or are granted registration rights on or after the date of this Agreement (including the General Partner, “Other Holders”) who have requested participation in the Underwritten Offering, in each case, who have requested participation in such Underwritten Offering.  The pro rata allocations for each such Selling Holder shall be the product of (a) the aggregate number of Common Units proposed to be sold by all Selling Holders and Other Holders in such Underwritten Offering multiplied by (b) the fraction derived by dividing (x) the number of Common Units owned on the Registration Deadline by such Selling Holder or Other

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Holder by (y) the aggregate number of Common Units owned on the Registration Deadline by all Selling Holders and Other Holders participating in the Underwritten Offering.  All participating Selling Holders shall have the opportunity to share pro rata that portion of such priority allocable to any Selling Holder(s) not so participating.  As of the date of execution of this Agreement, there are no other Persons with Registration Rights relating to Common Units other than as described in this Section 2.2(b) and as set forth in the Partnership Agreement.

Section 2.3   Underwritten Offering.

(a)           General Procedures.  In connection with any Underwritten Offering under this Agreement, BreitBurn shall be entitled to select the Managing Underwriter or Underwriters.  In connection with an Underwritten Offering contemplated by this Agreement in which a Selling Holder participates, each Selling Holder and BreitBurn shall be obligated to enter into an underwriting agreement that contains such representations, covenants, indemnities and other rights and obligations as are customary in underwriting agreements for firm commitment offerings of securities.  No Selling Holder may participate in such Underwritten Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement.  Each Selling Holder may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, BreitBurn to and for the benefit of such underwriters also be made to and for such Selling Holder’s benefit and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also be conditions precedent to its obligations.  No Selling Holder shall be required to make any representations or warranties to or agreements with BreitBurn or the underwriters other than representations, warranties or agreements regarding such Selling Holder and its ownership of the securities being registered on its behalf, its intended method of distribution and any other representation required by Law.  If any Selling Holder disapproves of the terms of an underwriting, such Selling Holder may elect to withdraw therefrom by notice to BreitBurn and the Managing Underwriter; provided, however, that such withdrawal may only be made up to and including the time of pricing of such Underwritten Offering.  No such withdrawal or abandonment shall affect BreitBurn’s obligation to pay Registration Expenses.

(b)           No Demand Rights. Notwithstanding any other provision of this Agreement, no Holder of Registrable Securities shall be entitled to any “demand” rights or similar rights that would require BreitBurn to effect an Underwritten Offering solely on behalf of such Holder.

Section 2.4   Sale Procedures.  In connection with its obligations under this Article II, BreitBurn will, as expeditiously as possible:

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

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(b)           if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering from the Registration Statement and the Managing Underwriter at any time shall notify BreitBurn in writing that, in the sole judgment of such Managing Underwriter, inclusion of detailed information to be used in such prospectus supplement is of material importance to the success of the Underwritten Offering of such Registrable Securities, use its commercially reasonable efforts to include such information in such prospectus supplement;

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

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

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

(f)            immediately notify each Selling Holder and each underwriter of Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in the Registration Statement or any other registration statement

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

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

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

(i)            otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

(j)            make available to the appropriate representatives of the Managing Underwriter and Selling Holders access to such information and BreitBurn personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act; provided, however, that BreitBurn need not disclose any such information to any such representative unless and until such representative has entered into or is otherwise subject to a confidentiality agreement with BreitBurn satisfactory to BreitBurn (including, if applicable, any confidentiality agreement referenced in Section 8.6 of the Purchase Agreement);

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(k)           cause all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange on which similar securities issued by BreitBurn are then listed;

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

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

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

(o)           BreitBurn agrees that, if any Purchaser could reasonably be deemed to be an “underwriter”, as defined in Section 2(a)(11) of the Securities Act, in connection with the registration statement in respect of any registration of BreitBurn’s securities of any Purchaser pursuant to this Agreement, and any amendment or supplement thereof (any such registration statement or amendment or supplement a “Purchaser Underwriter Registration Statement”), then BreitBurn will cooperate with such Purchaser in allowing such Purchaser to conduct customary “underwriter’s due diligence” with respect to BreitBurn and satisfy its obligations in respect thereof.  In addition, at any Purchaser’s request, BreitBurn will furnish to such Purchaser, on the date of the effectiveness of any Purchaser Underwriter Registration Statement and thereafter from time to time on such dates as such Purchaser may reasonably request, (i) a letter, dated such date, from BreitBurn’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to such Purchaser, and (ii) an opinion, dated as of such date, of counsel representing BreitBurn for purposes of such Purchaser Underwriter Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, including a standard “10b-5” opinion for such offering, addressed to such Purchaser.  BreitBurn will also permit legal counsel to such Purchaser to review and comment upon any such Purchaser Underwriter Registration Statement at least five Business Days prior to its filing with the Commission and all amendments and supplements to any such Purchaser Underwriter Registration Statement within a reasonable time period prior to their filing with the Commission and not file any Purchaser Underwriter Registration Statement or amendment or supplement thereto in a form to which such Purchaser’s legal counsel reasonably objects.

(p)           Each Selling Holder, upon receipt of notice from BreitBurn of the happening of any event of the kind described in Section 2.4(f) of this Agreement, shall forthwith discontinue disposition of the Registrable Securities until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.4(f) of this Agreement or until it is advised in writing by BreitBurn that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by BreitBurn, such Selling Holder will, or will request the managing underwriter or underwriters, if any, to deliver to BreitBurn (at BreitBurn’s expense) all

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copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

(q)           If requested by a Purchaser, BreitBurn shall:  (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as such Purchaser reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement.

Section 2.5  Cooperation by Holders.  BreitBurn shall have no obligation to include in the Registration Statement Common Units of a Holder, or in an Underwritten Offering pursuant to Section 2.2 of this Agreement, Common Units of a Selling Holder who has failed to timely furnish such information that, in the opinion of counsel to BreitBurn, is reasonably required in order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act.

Section 2.6   Restrictions on Public Sale by Holders of Registrable Securities.  For one year following the Closing Date, each Holder of Registrable Securities who is included in the Registration Statement agrees not to effect any public sale or distribution of the Registrable Securities during the 30-day period following pricing of an Underwritten Offering of equity securities by BreitBurn (except as provided in this Section 2.6); provided, however, that the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters on the officers or directors or any other Common Unitholder of BreitBurn on whom a restriction is imposed in connection with such public offering.  In addition, the provisions of this Section 2.6 shall not apply with respect to a Holder that (A) owns less than $10 million of Purchased Units, based on the Commitment Amounts, (B) has delivered an Opt Out Notice to BreitBurn pursuant to Section 2.2 hereof or (C) has submitted a notice requesting the inclusion of Registrable Securities in an Underwritten Offering pursuant to Section 2.2 hereof but is unable to do so as a result of the priority provisions contained in Section 2.2(b) hereof.

Section 2.7   Expenses.

(a)           Certain Definitions.  “Registration Expenses” means all expenses incident to BreitBurn’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on the Registration Statement pursuant to Section 2.1 hereof or an Underwritten Offering covered under this Agreement, and the disposition of such securities, including, without limitation, all registration, filing, securities exchange listing and The Nasdaq Global Market fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the National Association of Securities Dealers, Inc., transfer taxes and fees of transfer agents and registrars, all word processing,

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duplicating and printing expenses and the fees and disbursements of counsel and independent public accountants for BreitBurn, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance.  “Selling Expenses” means all underwriting fees, discounts and selling commissions allocable to the sale of the Registrable Securities.

(b)           Expenses.  BreitBurn will pay all reasonable Registration Expenses as determined in good faith, including, in the case of an Underwritten Offering, whether or not any sale is made pursuant to such Underwritten Offering.  In addition, except as otherwise provided in Section 2.8 hereof, BreitBurn shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder.  Each Selling Holder shall pay all Selling Expenses in connection with any sale of its Registrable Securities hereunder.

Section 2.8   Indemnification.

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

(b)           By Each Selling Holder.  Each Selling Holder agrees severally and not jointly to indemnify and hold harmless BreitBurn, its directors and officers, and each Person, if any, who

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controls BreitBurn within the meaning of the Securities Act or of the Exchange Act, and its directors and officers, to the same extent as the foregoing indemnity from BreitBurn to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in the Registration Statement or any preliminary prospectus or final prospectus included therein, or any amendment or supplement thereto; provided, however, that the liability of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.

(c)           Notice.  Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party other than under this Section 2.8.  In any action brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof.  The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.8 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however, that, (i) if the indemnifying party has failed to assume the defense or employ counsel reasonably acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select one separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred.  Notwithstanding any other provision of this Agreement, no indemnified party shall settle any action brought against it with respect to which it is entitled to indemnification hereunder without the consent of the indemnifying party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnifying party.  Notwithstanding any other provision of this Agreement, no indemnifying party shall settle any action brought against an indemnified party with respect to which it is entitled to indemnification hereunder without the consent of the indemnified party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnified party.

(d)           Contribution.  If the indemnification provided for in this Section 2.8 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold it harmless in respect of any Losses, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by

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

(e)           Other Indemnification.  The provisions of this Section 2.8 shall be in addition to any other rights to indemnification or contribution that an indemnified party may have pursuant to law, equity, contract or otherwise.

Section 2.9   Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, BreitBurn agrees to use its commercially reasonable efforts to:

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

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

(c)           so long as a Holder owns any Registrable Securities, furnish, unless otherwise not available at no charge by access electronically to the Commission’s EDGAR filing system, to such Holder forthwith upon request a copy of the most recent annual or quarterly report of BreitBurn, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration.

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Section 2.10   Transfer or Assignment of Registration Rights.  The rights to cause BreitBurn to register Registrable Securities granted to the Purchasers by BreitBurn under this Section 2.10 may be transferred or assigned by one or more Holders to one or more transferee(s) or assignee(s) of such Registrable Securities; provided, however, that (a) unless such transferee is a Holder or an Affiliate of the transferring Holder, or the transfer is to a swap counterparty, following such transfer or assignment, each such transferee or assignee holds Registrable Securities representing at least $10 million of the Purchased Units, based on the Commitment Amounts, (b) BreitBurn is given written notice prior to any said transfer or assignment, stating the name and address of each such transferee and identifying the securities with respect to which such registration rights are being transferred or assigned, and (c) each such transferee assumes in writing responsibility for its portion of the obligations of such Purchaser under this Agreement.

Section 2.11   Limitation on Subsequent Registration Rights.  From and after the date hereof, BreitBurn shall not, without the prior written consent of the Holders of a majority of the outstanding Registrable Securities, enter into any agreement with any current or future holder of any securities of BreitBurn that would allow such current or future holder to require BreitBurn to include securities in any registration statement filed by BreitBurn on a basis other than pari passu with, or subject to priority in favor of, the Purchasers hereunder.

ARTICLE III

MISCELLANEOUS

Section 3.1   Communications.  All notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, electronic mail, courier service or personal delivery:

(a)           if to Purchaser, to the address set forth under that Purchaser’s signature block in accordance with the provisions of this Section 3.1;

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

(c)           if to BreitBurn, at 515 South Flower Street, Suite 4800, Los Angeles, California  90071 (facsimile:  (213) 225-5916)), notice of which is given in accordance with the provisions of this Section 3.1.

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

Section 3.2   Successor and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.

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Section 3.3   Aggregation of Purchased Units.  All Purchased Units held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

Section 3.4   Recapitalization, Exchanges, Etc. Affecting the Common Units.  The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all units of BreitBurn or any successor or assign of BreitBurn (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, unit splits, recapitalizations and the like occurring after the date of this Agreement.

Section 3.5   Specific Performance.  Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief.  The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity which such Person may have.

Section 3.6   Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

Section 3.7   Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

Section 3.8   Governing Law.  The Laws of the State of New York shall govern this Agreement.

Section 3.9   Severability of Provisions.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

Section 3.10   Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by BreitBurn set forth herein.  This Agreement and the Purchase Agreement supersede all prior agreements and understandings between the parties with respect to such subject matter.

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

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

Section 3.13   Obligations Limited to Parties to Agreement.  Each of the Parties hereto covenants, agrees and acknowledges that no Person other than the Purchasers (and their permitted assignees) and BreitBurn shall have any obligation hereunder and that, notwithstanding that one or more of the Purchasers may be a corporation, partnership or limited liability company, no recourse under this Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Purchasers or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Purchasers or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for any obligations of the Purchasers under this Agreement or the Purchase Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation.

Section 3.14   Interpretation.  Article and Section references are to this Agreement, unless otherwise specified.  All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified.  The word “including” shall mean “including but not limited to”.  Whenever any determination, consent or approval is to be made or given by a Purchaser under this Agreement, such action shall be in such Purchaser’s sole discretion unless otherwise specified.

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

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

BREITBURN ENERGY PARTNERS L.P.
By:	BreitBurn GP, LLC,
	its general partner
By:
	Name:	Halbert S. Washburn
	Title:	Co-Chief Executive Officer

18

ROYAL BANK OF CANADA
by its agent
RBC CAPITAL MARKETS CORPORATION
By:
	Josef Muskatel
	Director and Senior Counsel
By:
	David Weiner
	Managing Director

19

GPS NEW EQUITY FUND LP
By:	GPS Partners, LLC, its General Partner
By:
	Brett S. Messing, Managing Partner
GPS MLP FUND LP
By:	GPS Partners, LLC, its General Partner
By:
	Brett S. Messing, Managing Partner

20

ZLP FUND, L.P.
By:	Zimmer Lucas Partners, LLC,
	its General Partner
By:
	Craig M. Lucas
	Managing Member

21

LEHMAN BROTHERS MLP OPPORTUNITY FUND L.P.
By:	Lehman Brothers MLP Opportunity Associates L.P., its general partner
By:	Lehman Brothers MLP Opportunity Associates L.L.C., its general partner
By:
	Name:
	Title:

22

KAYNE ANDERSON MLP INVESTMENT COMPANY
By:
	Name: James C. Baker
	Title: Vice President
KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC.
By:
	Name: James C. Baker
	Title: Vice President
KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
By:
	Name: James C. Baker
	Title: Vice President

23

STRUCTURED FINANCE AMERICAS, LLC
By:
	Name:
	Title:
By:
	Name:
	Title:

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EX-10.1

Exhibit 10.1

UNIT PURCHASE AGREEMENT

BY AND AMONG

BREITBURN ENERGY PARTNERS L.P.

AND

THE PURCHASERS NAMED HEREIN

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

Section 1.1	Definitions	1
Section 1.2	Accounting Procedures and Interpretation	5

ARTICLE II

SALE AND PURCHASE

Section 2.1	Sale and Purchase	5
Section 2.2	Closing	6
Section 2.3	Termination	6

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BREITBURN

Section 3.1	Existence	7
Section 3.2	Capitalization and Valid Issuance of Purchased Units	7
Section 3.3	BreitBurn SEC Documents	9
Section 3.4	No Material Adverse Change	9
Section 3.5	Litigation	9
Section 3.6	No Breach	10
Section 3.7	Authority	10
Section 3.8	Compliance with Laws	10
Section 3.9	Approvals	11
Section 3.10	MLP Status	11
Section 3.11	Investment Company Status	11
Section 3.12	Offering	11
Section 3.13	Certain Fees	11
Section 3.14	No Side Agreements	11
Section 3.15	Internal Accounting Controls	11
Section 3.16	Material Agreements	12
Section 3.17	Preemptive Rights or Registration Rights	12
Section 3.18	Insurance	12
Section 3.19	Acknowledgment Regarding Purchase of Purchased Common Units	12

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

Section 4.1	Valid Existence	13
Section 4.2	Authorization, Enforceability	13
Section 4.3	No Breach	13

Section 4.4	Investment	14
Section 4.5	Nature of Purchaser	14
Section 4.6	Receipt of Information; Authorization	14
Section 4.7	Restricted Securities	14
Section 4.8	Certain Fees	14
Section 4.9	Legend	15
Section 4.10	No Side Agreements	15

ARTICLE V

COVENANTS

Section 5.1	Certain Special Allocations of Book and Taxable Income	15
Section 5.2	Subsequent Public Offerings	15
Section 5.3	Purchaser Lock-Up	16
Section 5.4	Taking of Necessary Action	16
Section 5.5	Use of Proceeds	16
Section 5.6	Tax Information	17

ARTICLE VI

CLOSING CONDITIONS

Section 6.1	Conditions to the Closing	17
Section 6.2	BreitBurn Deliveries	18
Section 6.3	Purchaser Deliveries	19

ARTICLE VII

INDEMNIFICATION, COSTS AND EXPENSES

Section 7.1	Indemnification by BreitBurn	19
Section 7.2	Indemnification by Purchasers	20
Section 7.3	Indemnification Procedure	20

ARTICLE VIII

MISCELLANEOUS

Section 8.1	Interpretation of Provisions	21
Section 8.2	Survival of Provisions	21
Section 8.3	No Waiver; Modifications in Writing	22
Section 8.4	Binding Effect; Assignment	22
Section 8.5	Confidentiality and Non-Disclosure	23
Section 8.6	Communications	23
Section 8.7	Removal of Legend	26
Section 8.8	Entire Agreement	27
Section 8.9	Governing Law	27
Section 8.10	Execution in Counterparts	27

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Section 8.11	Termination	27
Section 8.12	Expenses	28
Section 8.13	Recapitalization, Exchanges, Etc. Affecting the Purchased Units	28
Section 8.14	Obligations Limited to Parties to Agreement	28

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UNIT PURCHASE AGREEMENT

UNIT PURCHASE AGREEMENT, dated as of May 16, 2007 (this “Agreement”), by and among BREITBURN ENERGY PARTNERS L.P., a Delaware limited partnership (“BreitBurn”), and each of KAYNE ANDERSON MLP INVESTMENT COMPANY, KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY, KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC., GPS MLP FUND LP, GPS NEW EQUITY FUND LP, ROYAL BANK OF CANADA, LEHMAN BROTHERS MLP OPPORTUNITY FUND L.P., ZLP FUND, L.P. and STRUCTURED FINANCE AMERICAS, LLC (a “Purchaser” and, collectively, the “Purchasers”).

WHEREAS, contemporaneous with the execution of this Agreement, BreitBurn, through its indirect ownership of BreitBurn Operating L.P., a Delaware limited partnership, is entering into a definitive purchase agreement to acquire all of Calumet’s right, title and interest in and to certain oil and gas leases and related assets described in the Calumet Asset Purchase Agreement upon the terms and conditions and for the consideration set forth in the Calumet Asset Purchase Agreement from Calumet (the “Calumet Acquisition”);

WHEREAS, BreitBurn desires to finance the Calumet Acquisition and reduce indebtedness under the BreitBurn Credit Facility through the sale of an aggregate of $130 million of Common Units and the Purchasers desire to purchase an aggregate of $130 million of Common Units from BreitBurn, each in accordance with the provisions of this Agreement;

WHEREAS, BreitBurn has agreed to provide the Purchasers with certain registration rights with respect to the Purchased Units acquired pursuant to this Agreement; and

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, BreitBurn and each of the Purchasers, severally and not jointly, hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1   Definitions.   As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

“Action” against a Person means any lawsuit, action, proceeding, investigation, inquiry, complaint or litigation before any Governmental Authority, mediator or arbitrator.

“Affiliate” means, with respect to a specified Person, any other Person, whether now in existence or hereafter created, directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control” (including, with correlative meanings, “controlling”, “controlled by” and “under common control with”) means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” shall have the meaning specified in the introductory paragraph.

“Basic Documents” means, collectively, this Agreement, the Calumet Asset Purchase Agreement, the Registration Rights Agreement and any and all other agreements or instruments executed and delivered by the Parties to evidence the execution, delivery and performance of this Agreement, and any amendments, supplements, continuations or modifications thereto.

“Board of Directors” means the board of directors of the General Partner.

“BreitBurn” shall have the meaning specified in the opening paragraph.

“BreitBurn Credit Facility” means the Credit Agreement, dated October 10, 2006 by and among BreitBurn Operating L.P., as Borrower, and BreitBurn Energy Partners L.P., Alamitos Company LLC, Alamitos Company, Phoenix Production Company and Preventive Maintenance Services, LLC and BreitBurn Operating GP, LLC, as Guarantors, Wells Fargo Bank, National Association, as Lead Arranger, Administrative Agent and Issuing Lender, and the other Lenders party thereto.

“BreitBurn Financial Statements” shall have the meaning specified in Section 3.3.

“BreitBurn Material Adverse Effect” means any material and adverse effect on (i) the assets, liabilities, financial condition, business, operations, prospects or affairs of BreitBurn and its Subsidiaries and the Calumet Assets, taken as a whole, other than those occurring as a result of general economic or financial conditions or other developments that are not unique to and do not have a material disproportionate impact on BreitBurn and its Subsidiaries but also affect other Persons who participate in or are engaged in the lines of business of which BreitBurn and its Subsidiaries participate or are engaged, (ii) the ability of BreitBurn Parties, taken as a whole, to carry on their business as their business is conducted as of the date hereof or to meet their obligations under the Basic Documents on a timely basis or (iii) the ability of BreitBurn to consummate the transactions under any Basic Document; provided, however, that with respect to Section 6.1(b)(ii), Section 6.2(e) and Section 8.11, a BreitBurn Material Adverse Effect shall not include any material and adverse effect on the foregoing to the extent such material and adverse effect results from, arises out of, or relates to (x) a general deterioration in the economy or changes in the general state of the industries in which the BreitBurn Parties operate, except to the extent that the BreitBurn Parties, taken as a whole, are adversely affected in a disproportionate manner as compared to other industry participants, (y) the outbreak or escalation of hostilities involving the United States, the declaration by the United States of a national emergency or war or the occurrence of any other calamity or crisis, including acts of terrorism, or (z) any change in accounting requirements or principles imposed upon BreitBurn and its Subsidiaries or their respective businesses or any change in applicable Law, or the interpretation thereof.

“BreitBurn Parties” means BreitBurn, the General Partner, and all of BreitBurn’s Subsidiaries.

“BreitBurn Related Parties” shall have the meaning specified in Section 7.2.

“BreitBurn SEC Documents” shall have the meaning specified in Section 3.3.

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“Breitenbach Amended and Restated Employment Agreement” means the Amended and Restated Employment Agreement by and between Pro GP Corp., BreitBurn Management Company, LLC, BreitBurn GP, LLC and Randall Breitenbach, dated as of October 10, 2006.

“Business Day” means any day other than a Saturday, Sunday or a holiday on which The Nasdaq Global Market is closed.

“Calumet” means Calumet Florida, L.L.C., a Delaware limited liability company.

“Calumet Acquisition” shall have the meaning specified in the recitals.

“Calumet Assets” means those certain oil and gas assets purchased pursuant to the Calumet Asset Purchase Agreement.

“Calumet Asset Purchase Agreement” means that certain Asset Purchase Agreement dated as of May 16, 2007, between Calumet Florida, L.L.C., a Delaware limited liability company, and BreitBurn Operating L.P., a Delaware limited partnership, acting through its general partner, BreitBurn Operating GP, LLC, a Delaware limited liability company, which is attached hereto as Exhibit E.

“Calumet Closing Date” means the date on which the Calumet Acquisition is consummated.

“Closing” shall have the meaning specified in Section 2.2.

“Closing Date” shall have the meaning specified in Section 2.2.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Commission” means the United States Securities and Exchange Commission.

“Commitment Amount” means the dollar amount set forth opposite each Purchaser’s name on Schedule 2.1 to this Agreement under the heading “Commitment Amount.”

“Common Unit Price” shall have the meaning specified in Section 2.1(b).

“Common Units” means the common units of BreitBurn representing limited partner interests.

“Delaware LLC Act” shall have the meaning specified in Section 3.2(c).

“Delaware LP Act” shall have the meaning specified in Section 3.2(c).

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

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

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“General Partner” means BreitBurn GP, LLC, a Delaware limited liability company and the general partner of BreitBurn.

“Governmental Authority” means, with respect to a particular Person, the country, state, county, city and political subdivisions in which such Person or such Person’s Property is located or that exercises valid jurisdiction over any such Person or such Person’s Property, and any court, agency, department, commission, board, bureau or instrumentality of any of them and any monetary authorities that exercise valid jurisdiction over any such Person or such Person’s Property.  Unless otherwise specified, all references to Governmental Authority herein shall mean a Governmental Authority having jurisdiction over, where applicable, BreitBurn, its Subsidiaries or any of their Property or any of the Purchasers.

“Indemnified Party” shall have the meaning specified in Section 7.3.

“Indemnifying Party” shall have the meaning specified in Section 7.3.

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

“Lien” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes.

“Lock-Up Date” means 90 days from the Closing Date.

“Partnership Agreement” shall have the meaning specified in Section 2.1(a).

“Party” or “Parties” means BreitBurn and the Purchasers, individually or collectively, as the case may be.

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

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

“Purchased Units” means the Common Units to be issued and sold to the Purchasers pursuant to this Agreement.

“Purchaser” shall have the meaning specified in the introductory paragraph.

“Purchaser Material Adverse Effect” means any material and adverse effect on (i) the ability of a Purchaser to meet its obligations under this Agreement or the Registration Rights Agreement on a timely basis or (ii) the ability of a Purchaser to consummate the transactions under this Agreement or the Registration Rights Agreement.

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“Purchaser Related Parties” shall have the meaning specified in Section 7.1.

“Registration Rights Agreement” means the Registration Rights Agreement, substantially in the form attached to this Agreement as Exhibit B, to be entered into at the Closing, among BreitBurn and the Purchasers.

“Representatives” of any Person means the officers, managers, directors, employees, agents and other representatives of such Person.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

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

“Terminating Breach” shall have the meaning specified in Section 8.11(a)(ii).

“Unitholders” means the common unitholders of BreitBurn (within the meaning of the Partnership Agreement).

“Washburn Amended and Restated Employment Agreement” means the Amended and Restated Employment Agreement by and between Pro GP Corp., BreitBurn Management Company, LLC, BreitBurn GP, LLC and Halbert Washburn, dated as of October 10, 2006.

Section 1.2Accounting Procedures and Interpretation.  Unless otherwise specified in this Agreement, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters under this Agreement shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Purchasers under this Agreement shall be prepared, in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q promulgated by the Commission) and in compliance as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto.

ARTICLE II

SALE AND PURCHASE

Section 2.1Sale and Purchase.  Contemporaneously with the consummation of the Calumet Acquisition and subject to the terms and conditions of this Agreement, at the Closing, BreitBurn hereby agrees to issue and sell to each Purchaser, and each Purchaser hereby agrees,

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severally and not jointly, to purchase from BreitBurn, the dollar amount of Purchased Units, set forth opposite its name on Schedule 2.1 hereto.  Each Purchaser agrees to pay BreitBurn the Common Unit Price for each Purchased Unit, in each case as set forth in Section 2.1(b).  The respective obligations of each Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under this Agreement.  The failure or waiver of performance under this Agreement by any Purchaser, or on its behalf, does not excuse performance by any other Purchaser.  Nothing contained herein or in any other Basic Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by any Basic Document.  Except as otherwise provided in this Agreement or in the Registration Rights Agreement, each Purchaser shall be entitled to independently protect and enforce its rights, including the rights arising out of this Agreement or out of the Registration Rights Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.

(a)           Common Units.  The number of Purchased Units to be issued and sold to each Purchaser shall be equal to the quotient determined by dividing (i) the amount for such Purchaser under the column entitled “Commitment  Amount” on Schedule 2.1 by (ii) the Common Unit Price (as defined in Section 2.1(b) below).  The Purchased Units shall have those rights, preferences, privileges and restrictions governing the Common Units as set forth in the First Amended and Restated Limited Partnership Agreement of BreitBurn, dated as of October 10, 2006 (the “Partnership Agreement”).

(b)           Consideration.  The amount per Common Unit each Purchaser will pay to BreitBurn to purchase the Purchased Units (the “Common Unit Price”) shall be $32.00.

Section 2.2   Closing.   The execution and delivery of the Basic Documents (other than this Agreement), the delivery of certificates representing the Purchased Units, the payment by each Purchaser of its respective Commitment Amount and execution and delivery of all other instruments, agreements and other documents required by this Agreement (the “Closing”) shall take place on a date (the “Closing Date”) contemporaneous with the Calumet Closing Date, but on or prior to June 15, 2007, at the offices of Vinson & Elkins L.L.P., 666 Fifth Avenue, 26th Floor, New York, New York  10103.

Section 2.3   Termination.   Notwithstanding anything to the contrary contained herein, in the event BreitBurn does not receive at least $70,000,000 of the Commitment Amounts on the Closing Date, this Agreement shall automatically terminate and any payments of a Purchaser’s Commitment Amount received by BreitBurn shall be returned to such Purchaser within two Business Days.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BREITBURN

BreitBurn represents and warrants to the Purchasers, on and as of the date of this Agreement and on and as of the Closing Date, as follows:

Section 3.1   Existence.   Each of BreitBurn and BreitBurn’s Subsidiaries:  (i) is a corporation, limited partnership or limited liability company, as applicable, duly organized, validly existing and in good standing under the Laws of the state or other jurisdiction of its incorporation or organization; (ii) has all requisite power and authority, and has all material governmental licenses, authorizations, consents and approvals, necessary to own, lease, use and operate its Properties and carry on its business as its business is now being conducted as described in the BreitBurn SEC Documents and as will be conducted following the Calumet Acquisition, except where the failure to obtain such licenses, authorizations, consents and approvals would not reasonably be expected to have a BreitBurn Material Adverse Effect.  None of BreitBurn or any of its Subsidiaries are in default in the performance, observance or fulfillment of any provision of, in the case of BreitBurn, the Partnership Agreement or its Certificate of Limited Partnership or, in the case of any Subsidiary of BreitBurn, its respective certificate of incorporation, certificate of formation, bylaws, limited liability company agreement, limited partnership agreement or other similar organizational documents.  Each of BreitBurn and its Subsidiaries is duly qualified or licensed and in good standing as a foreign limited partnership, limited liability company or corporation, as applicable, and is authorized to do business in each jurisdiction in which the ownership or leasing of its respective Properties or the character of its respective operations makes such qualification necessary, except where the failure to obtain such qualification, license, authorization or good standing would not reasonably be expected to have a BreitBurn Material Adverse Effect.

Section 3.2   Capitalization and Valid Issuance of Purchased Units.

(a)           The Purchased Units shall have those rights, preferences, privileges and restrictions governing the Common Units as set forth in the Partnership Agreement.

(b)           As of the date of this Agreement, the issued and outstanding limited partner interests of BreitBurn consist of 21,975,758 Common Units.  The only issued and outstanding general partner interests of BreitBurn are the interests of the General Partner described in the Partnership Agreement.  All outstanding Common Units and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with applicable Law and the Partnership Agreement and are fully paid (to the extent required by applicable Law and the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in Sections 17-303, 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”).  All general partner interests of BreitBurn have been duly authorized and validly issued in accordance with the Partnership Agreement.

(c)           Other than the BreitBurn 2006 Long-Term Incentive Plan, the Washburn Amended and Restated Employment Agreement or the Breitbenbach Amended and Restated

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Employment Agreement, BreitBurn has no equity compensation plans that contemplate the issuance of partnership interests of BreitBurn (or securities convertible into or exchangeable for partnership interests of BreitBurn).  No indebtedness having the right to vote (or convertible into or exchangeable for securities having the right to vote) on any matters on which the Unitholders may vote are issued or outstanding.  Except as set forth in the first sentence of this Section 3.2(c), as contemplated by this Agreement or as are contained in the Partnership Agreement, there are no outstanding or authorized (i) options, warrants, preemptive rights, subscriptions, calls or other rights, convertible or exchangeable securities, agreements, claims or commitments of any character obligating BreitBurn or any of its Subsidiaries to issue, transfer or sell any partnership interests or other equity interests in BreitBurn or any of its Subsidiaries or securities convertible into or exchangeable for such partnership interests, (ii) obligations of BreitBurn or any of its Subsidiaries to repurchase, redeem or otherwise acquire any partnership interests or equity interests in BreitBurn or any of its Subsidiaries or any such securities or agreements listed in clause (i) of this sentence or (iii) voting trusts or similar agreements to which BreitBurn or any of its Subsidiaries is a party with respect to the voting of the equity interests of BreitBurn or any of its Subsidiaries.

(d)           (i) All of the issued and outstanding equity interests of each of BreitBurn’s Subsidiaries are owned, directly or indirectly, by BreitBurn free and clear of any Liens (except for such restrictions as may exist under applicable Law and except for such Liens as may be imposed under BreitBurn’s Credit Facility) and all such ownership interests have been duly authorized, validly issued and are fully paid (to the extent required by applicable Law or in the organizational documents of BreitBurn’s Subsidiaries, as applicable) and nonassessable (except as nonassessability may be affected by matters described in Sections 17-303, 17-607 and 17-804 of the Delaware LP Act and Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act (the “Delaware LLC Act”)) and free of preemptive rights, with no personal liability attaching to the ownership thereof; and (ii) except as disclosed in the BreitBurn SEC Documents, neither BreitBurn nor any of its Subsidiaries owns any shares of capital stock or other securities of, or interest in, any other Person, or is obligated to make any capital contribution to or other investment in any other Person.

(e)           The offer and sale of the Purchased Units and the limited partner interests represented thereby, have been, or prior to the Closing Date, will be duly authorized by BreitBurn pursuant to the Partnership Agreement and, when issued and delivered to such Purchaser against payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid (to the extent required by applicable law and the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act) and will be free of any and all Liens and restrictions on transfer, other than restrictions on transfer under the Partnership Agreement, this Agreement or the Registration Rights Agreement and under applicable state and federal securities laws and other than such Liens as are created by the Purchasers.

(f)            The Purchased Units will be issued in compliance with all applicable rules of The Nasdaq Global Market.  Prior to the Closing Date, BreitBurn will submit to The Nasdaq Global Market a Notification Form:  Listing of Additional Common Units with respect to the Purchased Units.  BreitBurn’s currently outstanding Common Units are quoted on The Nasdaq Global Market and BreitBurn has not received any notice of delisting.

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Section 3.3   BreitBurn SEC Documents.   BreitBurn has filed timely with the Commission all forms, registration statements, reports, schedules and statements required to be filed by it under the Exchange Act or the Securities Act (all such documents filed on or prior to the date of this Agreement, collectively, the “BreitBurn SEC Documents”).  The BreitBurn SEC Documents, including, without limitation, any audited or unaudited financial statements and any notes thereto or schedules included therein (the “BreitBurn Financial Statements”), at the time filed (in the case of registration statements, solely on the dates of effectiveness) (except to the extent corrected by a subsequently filed BreitBurn SEC Document filed prior to the date hereof) (i) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein (in the case of any prospectus, in light of the circumstances under which they were made) not misleading, (ii) complied as to form in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as applicable, (iii) in the case of the BreitBurn Financial Statements, complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, (iv) in the case of the BreitBurn Financial Statements, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the Commission) and (v) in the case of the BreitBurn Financial Statements, fairly present (subject in the case of unaudited statements to normal, recurring and year-end audit adjustments) in all material respects the consolidated financial position of BreitBurn and its Subsidiaries as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended.  PricewaterhouseCoopers LLP is an independent registered public accounting firm with respect to BreitBurn and the General Partner and has not resigned or been dismissed as independent registered public accountants of BreitBurn and the General Partner as a result of or in connection with any disagreement with BreitBurn or the General Partner on a matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.

Section 3.4   No Material Adverse Change.   Except as set forth in or contemplated by the BreitBurn SEC Documents, and except for the proposed Calumet Acquisition, which has been disclosed to, and discussed with, each of the Purchasers, since December 31, 2006, BreitBurn and its Subsidiaries have conducted their business in the ordinary course, consistent with past practice, and there has been no (i) change that has had or would reasonably be expected to have a BreitBurn Material Adverse Effect (ii) acquisition or disposition of any material assets by BreitBurn or any of its Subsidiaries or any contract or arrangement therefor, otherwise than for fair value in the ordinary course of business, (iii) material change in BreitBurn’s accounting principles, practices or methods or (iv) incurrence of material indebtedness (other than the incurrence of such indebtedness as is contemplated in connection with the Calumet Acquisition).

Section 3.5   Litigation.   Except as set forth in the BreitBurn SEC Documents, there is no Action pending or, to the knowledge of BreitBurn, threatened against the General Partner, BreitBurn or any of its Subsidiaries or any of their respective officers, directors or Properties, as applicable, that (a) questions the validity of this Agreement or the Registration Rights Agreement or the right of BreitBurn to enter into this Agreement or the Registration Rights Agreement or to consummate the transactions contemplated hereby and thereby or (b) (individually or in the aggregate) would reasonably be expected to result in a BreitBurn Material Adverse Effect.

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Section 3.6   No Breach.   The execution, delivery and performance by the BreitBurn Parties of the Basic Documents to which they are parties and compliance by the BreitBurn Parties with the terms and provisions hereof and thereof, and the issuance and sale by BreitBurn of the Purchased Units, do not and will not (a) assuming the accuracy of the representations and warranties of the Purchasers contained herein and their compliance with the covenants contained herein, violate any provisions of any Law, governmental permit, determination or award having applicability to BreitBurn or any of its Subsidiaries or any of their respective Properties, (b) conflict with or result in a violation or breach of any provision of the certificate of limited partnership or the other organizational documents of BreitBurn or organizational documents of any of BreitBurn’s Subsidiaries, (c) require any consent, approval or notice under or result in a violation or breach of or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any contract, agreement, instrument, obligation, note, bond, mortgage, license, or loan or credit agreement to which BreitBurn or any of its Subsidiaries is a party or by which BreitBurn or any of its Subsidiaries or any of their respective Properties may be bound, or (d) result in or require the creation or imposition of any Lien upon or with respect to any of the Properties now owned or hereafter acquired by BreitBurn or any of its Subsidiaries, except in the cases of clauses (a), (c) and (d) where any such violation, default, breach, termination, cancellation, failure to receive consent approval or notice, or acceleration with respect to the foregoing provisions of this Section 3.6 would not, individually or in the aggregate, reasonably likely to result in a BreitBurn Material Adverse Effect.

Section 3.7   Authority.   Each BreitBurn Party has all necessary power and authority to execute, deliver and perform its obligations under the Basic Documents; and the execution, delivery and performance by each BreitBurn Party of the Basic Documents has been duly authorized by all necessary action on its part; and the Basic Documents constitute the legal, valid and binding obligations of the BreitBurn Parties that are parties thereto, enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally or by general principles of equity including principles of commercial reasonableness, fair dealing and good faith.  No approval from the holders of the Common Units is required in connection with BreitBurn’s issuance and sale of the Purchased Units to the Purchasers.

Section 3.8   Compliance with Laws.   Neither BreitBurn nor any of its Subsidiaries is in violation of any judgment, decree or order or any Law applicable to BreitBurn or its Subsidiaries, except as would not, individually or in the aggregate, have a BreitBurn Material Adverse Effect.  BreitBurn and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a BreitBurn Material Adverse Effect, and neither BreitBurn nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit, except where such potential revocation or modification would not have, individually or in the aggregate, a BreitBurn Material Adverse Effect.  Neither BreitBurn, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of BreitBurn or any of its Subsidiaries has, in the course of its actions for, or on behalf of, BreitBurn or any of its Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or

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other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

Section 3.9   Approvals.   Except as contemplated by this Agreement or as required by the Commission in connection with BreitBurn’s obligations under the Registration Rights Agreement, no authorization, consent, approval, waiver, license, qualification or written exemption from, nor any filing, declaration, qualification or registration with, any Governmental Authority or any other Person is required in connection with the execution, delivery or performance by any BreitBurn Party of any of the Basic Documents to which it is a party, except (i) for such consents, approvals and waivers as have been obtained or, in the case of the Calumet Asset Purchase Agreement, will be obtained by closing, or (ii) where the failure to receive such authorization, consent, approval, waiver, license, qualification or written exemption from, or to make such filing, declaration, qualification or registration would not, individually or in the aggregate, reasonably be expected to have a BreitBurn Material Adverse Effect.

Section 3.10   MLP Status.   BreitBurn has, since its inception in March 2006, met the gross income requirements of Section 7704(c)(2) of the Code and accordingly BreitBurn is not, and does not reasonably expect to be, taxed as a corporation for U.S. federal income tax purposes.

Section 3.11   Investment Company Status.   BreitBurn is not now, and after the sale of the Purchased Units and the application of the net proceeds from such sale will not be, and is not controlled by or under common control with, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

Section 3.12   Offering.   Assuming the accuracy of the representations and warranties of the Purchasers contained in this Agreement, the sale and issuance of the Purchased Units pursuant to this Agreement are exempt from the registration requirements of the Securities Act, and neither BreitBurn nor any authorized Representative acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption.

Section 3.13   Certain Fees.   No fees or commissions will be payable by BreitBurn to brokers, finders or investment bankers with respect to the sale of any of the Purchased Units or the consummation of the transactions contemplated by this Agreement.

Section 3.14   No Side Agreements.   Except for the confidentiality agreements and the Registration Rights Agreement entered into by and between each of the Purchasers and BreitBurn, there are no other agreements by, among or between BreitBurn or any of its Affiliates, on the one hand, and any of the Purchasers or their Affiliates, on the other hand, with respect to the transactions contemplated hereby nor promises or inducements for future transactions between or among any of such parties.

Section 3.15   Internal Accounting Controls.   BreitBurn and its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i)

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transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (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 the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

Section 3.16   Material Agreements.   BreitBurn has provided the Purchasers with, or made available to the Purchasers through the BreitBurn SEC Documents, correct and complete copies of all material agreements (as defined in Section 601(b)(10) of Regulation S-K promulgated by the Commission) and of all exhibits to the BreitBurn SEC Documents, including amendments to or other modifications of pre-existing material agreements, entered into by BreitBurn.

Section 3.17   Preemptive Rights or Registration Rights.   Except (i) as set forth in the Partnership Agreement, (ii) as provided in the Basic Documents or (iii) for existing awards under BreitBurn’s 2006 Long-Term Incentive Plan, the Washburn Amended and Restated Employment Agreement or the Breitenbach Amended and Restated Employment Agreement, there are no preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any Common Units or other limited partnership or membership interests of BreitBurn or any of its Subsidiaries, in each case pursuant to any other agreement or instrument to which any of such Persons is a party or by which any one of them may be bound.  Neither the execution of this Agreement, nor the issuance of the Purchased Units as contemplated by this Agreement gives rise to any rights for or relating to the registration of any securities of BreitBurn, other than pursuant to the Registration Rights Agreement or the Partnership Agreement.

Section 3.18   Insurance.   BreitBurn and its Subsidiaries are insured against such losses and risks and in such amounts as BreitBurn believes in its sole discretion to be prudent for its businesses.  BreitBurn does not have any reason to believe that it or any Subsidiary will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business.

Section 3.19   Acknowledgment Regarding Purchase of Purchased Common Units.   BreitBurn acknowledges and agrees that (i) each of the Purchasers is participating in the transactions contemplated by this Agreement and the other Basic Documents at BreitBurn’s request and BreitBurn has concluded that such participation is in BreitBurn’s best interest and is consistent with BreitBurn’s objectives and (ii) each of the Purchasers is acting solely in the capacity of an arm’s length purchaser.  BreitBurn further acknowledges that no Purchaser is acting or has acted as an advisor, agent or fiduciary of BreitBurn (or in any similar capacity) with respect to this Agreement or the other Basic Documents and any advice given by any Purchaser or any of its respective Representatives in connection with this Agreement or the other Basic Documents is merely incidental to the Purchasers’ purchase of the Purchased Units.  BreitBurn further represents to each Purchaser that BreitBurn’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by BreitBurn and its Representatives.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

Each Purchaser, severally and not jointly, represents and warrants to BreitBurn with respect to itself, on and as of the date of this Agreement and on and as of the Closing Date, as follows:

Section 4.1  Valid Existence.  Such Purchaser (i) is duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization and (ii) has all requisite power, and has all material governmental licenses, authorizations, consents and approvals, necessary to own its Properties and carry on its business as its business is now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not have and would not reasonably be expected to have a Purchaser Material Adverse Effect.

Section 4.2  Authorization, Enforceability.  Such Purchaser has all necessary power and authority to execute, deliver and perform its obligations under this Agreement and the Registration Rights Agreement and to consummate the transactions contemplated thereby, and the execution, delivery and performance by such Purchaser of this Agreement and the Registration Rights Agreement has been duly authorized by all necessary action on the part of the Purchaser; and each of this Agreement and the Registration Rights Agreement constitute the legal, valid and binding obligations of such Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally or by general principles of equity, including principles of commercial reasonableness, fair dealing and good faith.

Section 4.3  No Breach.  The execution, delivery and performance by such Purchaser of this Agreement and the Registration Rights Agreement to which it is a party and all other agreements and instruments in connection with the transactions contemplated by this Agreement and the Registration Rights Agreement to which it is a party, and compliance by such Purchaser with the terms and provisions hereof and thereof and the purchase of the Purchased Units by such Purchaser do not and will not (a) violate any provision of any Law, governmental permit, determination or award having applicability to such Purchaser or any of its Properties, (b) conflict with or result in a violation of any provision of the organizational documents of such Purchaser or (c) require any consent (other than standard internal consents), approval or notice under or result in a violation or breach of or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under (i) any note, bond, mortgage, license, or loan or credit agreement to which such Purchaser is a party or by which such Purchaser or any of its Properties may be bound or (ii) any other such agreement, instrument or obligation, except in the case of clauses (a) and (c) where such violation, default, breach, termination, cancellation, failure to receive consent or approval, or acceleration with respect to the foregoing provisions of this Section 4.2 would not, individually or in the aggregate, have a Purchaser Material Adverse Effect.

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Section 4.4  Investment.  The Purchased Units are being acquired for such Purchaser’s own account, or the accounts of clients for whom such Purchaser exercises discretionary investment authority, not as a nominee or agent, and with no present intention of distributing the Purchased Units or any part thereof, and such Purchaser has no present intention of selling or granting any participation in or otherwise distributing the same in any transaction in violation of the securities Laws of the United States of America or any state, without prejudice, however, to such Purchaser’s right at all times to sell or otherwise dispose of all or any part of the Purchased Units under a registration statement under the Securities Act and applicable state securities Laws or under an exemption from such registration available thereunder (including, if available, Rule 144 promulgated thereunder).  If such Purchaser should in the future decide to dispose of any of the Purchased Units, such Purchaser understands and agrees (a) that it may do so only (i) in compliance with the Securities Act and applicable state securities Law, as then in effect, or pursuant to an exemption therefrom or (ii) in the manner contemplated by any registration statement pursuant to which such securities are being offered, and (b) that stop-transfer instructions to that effect will be in effect with respect to such securities.  Notwithstanding the foregoing, each Purchaser may at any time enter into one or more total return swaps with respect to such Purchaser’s Purchased Units with a third party provided that such transactions are exempt from registration under the Securities Act.

Section 4.5  Nature of Purchaser.  Such Purchaser represents and warrants to, and covenants and agrees with, BreitBurn that (a) it is a “qualified institutional buyer” within the meaning of Rule 144A promulgated by the Securities and Exchange Commission pursuant to the Securities Act or an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated by the Commission pursuant to the Securities Act and (b) by reason of its business and financial experience it has such knowledge, sophistication and experience in making similar investments and in business and financial matters generally so as to be capable of evaluating the merits and risks of the prospective investment in the Purchased Units, is able to bear the economic risk of such investment and, at the present time, would be able to afford a complete loss of such investment.

Section 4.6  Receipt of Information; Authorization.  Such Purchaser acknowledges that it has (a) had access to the BreitBurn SEC Documents, (b) had access to information regarding the Calumet Acquisition and its potential effect on BreitBurn’s operations and financial results and (c) been provided a reasonable opportunity to ask questions of and receive answers from Representatives of BreitBurn regarding such matters including matters with respect to the Calumet Acquisition.

Section 4.7  Restricted Securities.  Such Purchaser understands that the Purchased Units it is purchasing are characterized as “restricted securities” under the federal securities Laws inasmuch as they are being acquired from BreitBurn in a transaction not involving a public offering and that under such Laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances.  In this connection, such Purchaser represents that it is knowledgeable with respect to Rule 144 of the Commission promulgated under the Securities Act.

Section 4.8  Certain Fees.  No fees or commissions will be payable by such Purchaser to brokers, finders or investment bankers with respect to the sale of any of the Purchased Units or

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the consummation of the transactions contemplated by this Agreement.  BreitBurn will not be liable for any such fees or commissions.

Section 4.9  Legend.  It is understood that the certificates evidencing the Purchased Units will initially bear the following legend:  “These securities have not been registered under the Securities Act of 1933, as amended.  They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or pursuant to an exemption from registration thereunder and, in the case of a transaction exempt from registration, unless sold pursuant to Rule 144 under such Act or the issuer has received documentation reasonably satisfactory to it that such transaction does not require registration under such Act.”

Section 4.10  No Side Agreements.  Except for the confidentiality agreements and the Registration Rights Agreement entered into by and between such Purchaser and BreitBurn, there are no other agreements by, among or between BreitBurn or its Affiliates, on the one hand, and such Purchaser or its Affiliates, on the other hand, with respect to the transactions contemplated hereby nor promises or inducements for future transactions between or among any of such parties.

ARTICLE V

COVENANTS

Section 5.1  Certain Special Allocations of Book and Taxable Income.  To the extent that the Common Unit Price is less than the trading price of the Common Units on The Nasdaq Global Market as of the Closing Date, the General Partner intends to specially allocate items of book and taxable income to the Purchasers so that their capital accounts in their Common Units are consistent, on a per-Common Unit basis, with the capital accounts of the other holders of Common Units (and thus to assure fungibility of all Common Units).  Such special allocation will occur upon the earlier to occur of any taxable period of BreitBurn ending upon, or after, (i) a book-up event or book-down event in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f) or a sale of all or substantially all of the assets of BreitBurn occurring after the date of the issuance of the Common Units or (ii) the transfer of the Common Units to a Person that is not an Affiliate of the holder.  A Purchaser holding a Common Unit shall be required to provide notice to the General Partner of the transfer of a Common Unit to a Person that is not an Affiliate of the Purchaser no later than the last Business Day of the calendar year during which such transfer occurred, unless by virtue of the application of clause (i) above, the General Partner has determined that the Common Units are consistent, on a per-Common Unit basis, with the capital accounts of the other holders of Common Units; provided, that such Purchaser may cure any failure to provide such notice by providing such notice within 20 days of the last Business Day of such calendar year; provided, further, that the sole and exclusive remedy for any Purchaser’s failure to provide any such notice shall be the enforcement of the remedy of specific performance against such Purchaser and there will be no monetary damages.

Section 5.2  Subsequent Public Offerings.  Without the written consent of the holders of a majority of the Purchased Units, taken as a whole, from the date of this Agreement until the Lock-Up Date, BreitBurn shall not grant, issue or sell any Common Units, or other equity or

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voting securities of BreitBurn (“Partnership Securities”), any securities convertible into or exchangeable therefor or take any other action that may result in the issuance of any of the foregoing, other than (i) the issuance of the Purchased Units, (ii) the issuance of Awards (as defined in BreitBurn’s 2006 Long-Term Incentive Plan), the issuance of Common Units upon the exercise of options to purchase Common Units granted pursuant to the BreitBurn 2006 Long-Term Incentive Plan and the issuance of equity-based securities pursuant to a management or employee benefit plan or in connection with the restructuring of such a plan, (iii) the issuance or sale of Partnership Securities issued or sold in a registered public offering to finance future acquisitions that are accretive to distributable cash flow per Common Unit (or the repayment of indebtedness incurred in connection with such accretive acquisitions), (iv) the issuance or sale of Partnership Securities issued, including without limitation to Provident Energy Trust and its affiliates, as payment of any part of the purchase price for businesses that are acquired by the Partnership from Provident Energy Trust and its affiliates or any third party, and (v) the issuance or sale of Partnership Securities issued or sold through a private placement provided that (Y) the Purchasers individually are granted the right to participate in such private placement and to purchase a percentage of the Partnership Securities sold in such private placement pro rata based upon their purchase of the Purchased Units sold hereby and (Z) each party participating in such private placement shall agree that it will not sell any of its Partnership Securities for a period of 90-days following the closing of such private placement.  Notwithstanding the foregoing, BreitBurn shall not, and shall cause its directors, officers and Affiliates not to, sell, offer for sale or solicit offers to buy any security (as defined in the Securities Act) that would be integrated with the sale of the Purchased Units in a manner that would require the registration under the Securities Act of the sale of the Purchased Units to the Purchasers.

Section 5.3  Purchaser Lock-Up.  Without the prior written consent of BreitBurn, each Purchaser agrees that from and after the Closing it will not sell any of its Purchased Units prior to the Lock-Up Date; provided, however, that each Purchaser may:  (i) enter into one or more total return swaps or similar transactions at any time with respect to the Purchased Units purchased by such Purchaser provided that such transactions are exempt from registration under the Securities Act; or (ii) transfer its Purchased Units to an Affiliate of such Purchaser or to any other Purchaser or an Affiliate of such other Purchaser provided that such Affiliate agrees to the restrictions in this Section 5.3.

Section 5.4   Taking of Necessary Action.  Each of the Parties hereto shall use its commercially reasonable efforts promptly to take or cause to be taken all action and promptly to do or cause to be done all things necessary, proper or advisable under applicable Law and regulations to consummate and make effective the transactions contemplated by this Agreement; provided, that nothing contained herein shall require BreitBurn to consummate the Calumet Acquisition.  Without limiting the foregoing, BreitBurn and each Purchaser will use its commercially reasonable efforts to make all filings and obtain all consents of Governmental Authorities that may be necessary or, in the reasonable opinion of the Purchasers or BreitBurn, as the case may be, advisable for the consummation of the transactions contemplated by this Agreement and the other Basic Documents.

Section 5.5  Use of Proceeds.  BreitBurn shall use the collective proceeds from the sale of the Purchased Units to finance the Calumet Acquisition.  The remainder of the proceeds, if any, shall be used to repay indebtedness under the BreitBurn Credit Facility.

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Section 5.6  Tax Information.  BreitBurn shall cooperate with the Purchasers and provide the Purchasers with any reasonably requested tax information related to their ownership of the Purchased Units.

ARTICLE VI

CLOSING CONDITIONS

Section 6.1  Conditions to the Closing.

(a)           Mutual Conditions.  The respective obligation of each Party to consummate the purchase and issuance and sale of the Purchased Units shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by a particular Party on behalf of itself in writing, in whole or in part, to the extent permitted by applicable Law):

(i)            no Law shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Authority of competent jurisdiction that temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement illegal;

(ii)           there shall not be pending any Action by any Governmental Authority seeking to restrain, preclude, enjoin or prohibit the transactions contemplated by this Agreement; and

(iii)          the closing of the Calumet Asset Purchase Agreement shall occur concurrently with Closing and all conditions set forth in Section 10.2 (Buyer’s Closing Conditions) of the Calumet Asset Purchase Agreement, shall have been satisfied in all material respects or the fulfillment of any such conditions to BreitBurn Operating L.P.’s obligations shall have been waived, except for those conditions that, by their nature, will be satisfied concurrently with the Closing.

(b)           Each Purchaser’s Conditions.  The respective obligation of each Purchaser to consummate the purchase of its Purchased Units shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by a particular Purchaser on behalf of itself in writing, in whole or in part, to the extent permitted by applicable Law):

(i)            BreitBurn shall have performed and complied with the covenants and agreements contained in this Agreement in all material respects that are required to be performed and complied with by BreitBurn on or prior to the Closing Date;

(ii)           the representations and warranties of BreitBurn contained in this Agreement that are qualified by materiality or BreitBurn Material Adverse Effect shall be true and correct when made and as of the Closing Date and all other representations and warranties of BreitBurn shall be true and correct in all material respects when made and as of the Closing Date, in each case as though made at and as of the Closing Date (except

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that representations made as of a specific date shall be required to be true and correct as of such date only);

(iii)          BreitBurn shall have submitted to The Nasdaq Global Market a Notification Form:  Listing of Additional Common Units with respect to the Purchased Units and no notice of delisting from The Nasdaq Global Market shall have been received by BreitBurn with respect to the Common Units; and

(iv)          BreitBurn shall have delivered, or caused to be delivered, to the Purchasers at the Closing, BreitBurn’s closing deliveries described in Section 6.2 of this Agreement.

(c)           BreitBurn’s Conditions.  The obligation of BreitBurn to consummate the sale of the Purchased Units to each of the Purchasers shall be subject to the satisfaction on or prior to the Closing Date of the following conditions with respect to each Purchaser individually and not the Purchasers jointly (which may be waived by BreitBurn in writing, in whole or in part, to the extent permitted by applicable Law):

(i)            each Purchaser shall have performed and complied with the covenants and agreements contained in this Agreement in all material respects that are required to be performed and complied with by that Purchaser on or prior to the Closing Date;

(ii)           the representations and warranties of each Purchaser contained in this Agreement that are qualified by materiality or Purchaser Material Adverse Effect shall be true and correct when made and as of the Closing Date and all other representations and warranties of each Purchaser shall be true and correct in all material respects when made and as of the Closing Date, in each case as though made at and as of the Closing Date (except that representations made as of a specific date shall be required to be true and correct as of such date only); and

(iii)          each Purchaser shall have delivered, or caused to be delivered, to BreitBurn at the Closing, such Purchaser’s closing deliveries described in Section 6.3 of this Agreement.

Section 6.2  BreitBurn Deliveries.  At the Closing, subject to the terms and conditions of this Agreement, BreitBurn will deliver, or cause to be delivered, to each Purchaser:

(a)           the Purchased Units by delivering certificates (bearing the legend set forth in Section 4.9) evidencing such Purchased Units at the Closing, all free and clear of any Liens, encumbrances or interests of any other party;

(b)           opinions addressed to the Purchasers from outside legal counsel to BreitBurn and from the General Counsel of BreitBurn, Gregory C. Brown, each dated the Closing Date, substantially similar in substance to the form of opinions attached to this Agreement as Exhibit A;

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(c)           the Registration Rights Agreement in substantially the form attached to this Agreement as Exhibit B, which shall have been duly executed by BreitBurn;

(d)           a fully executed copy of the Calumet Asset Purchase Agreement in substantially the form attached to this Agreement as Exhibit E.

(e)           the Officer’s Certificate substantially in the form attached to this Agreement as Exhibit C;

(f)            a certificate of the Secretary of BreitBurn dated as of the Closing Date, as to certain matters; and

(g)           a certificate dated as of a recent date of the Secretary of State of the State of Delaware with respect to the due organization and good standing in the State of Delaware of BreitBurn.

(h)           a cross-receipt, dated the Closing Date, executed by BreitBurn and delivered to each Purchaser to the effect that BreitBurn has received the Commitment Amount with respect to the Purchased Units issued and sold to all Purchasers.

Section 6.3  Purchaser Deliveries.  At the Closing, subject to the terms and conditions of this Agreement, each Purchaser will deliver, or cause to be delivered, to BreitBurn:

(a)           payment to BreitBurn of such Purchaser’s Commitment Amount by wire transfer(s) of immediately available funds to an account designated by BreitBurn in writing at least two (2) Business Days (or such shorter period as shall be agreeable to all Parties hereto) prior to the Closing;

(b)           the Registration Rights Agreement in substantially the form attached to this Agreement as Exhibit B, which shall have been duly executed by such Purchaser;

(c)           an Officer’s Certificate substantially in the form attached to this Agreement as Exhibit D; and

(d)           a cross receipt dated the Closing Date, executed by such Purchaser to the effect that such Purchaser has received certificates evidencing its Purchased Units.

ARTICLE VII

INDEMNIFICATION, COSTS AND EXPENSES

Section 7.1  Indemnification by BreitBurn.  BreitBurn agrees to indemnify each Purchaser and its Representatives (collectively, “Purchaser Related Parties”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands and causes of action, and, in connection therewith, and promptly upon demand, pay and reimburse each of them for all reasonable costs, losses, liabilities,

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damages or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of or in any way related to the breach of any of the representations, warranties or covenants of BreitBurn contained herein; provided that such claim for indemnification is made prior to the expiration of such representation or warranty; provided further, that no Purchaser Related Party shall be entitled to recover special, consequential (including lost profits) or punitive damages.  Notwithstanding anything to the contrary, consequential damages shall not be deemed to include diminution in value, which is specifically included in damages covered by Purchaser Related Parties indemnification.

Section 7.2  Indemnification by Purchasers.  Each Purchaser agrees, severally and not jointly, to indemnify BreitBurn, the General Partner, and their respective Representatives (collectively, “BreitBurn Related Parties”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all reasonable costs, losses, liabilities, damages or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of or in any way related to the breach of any of the representations, warranties or covenants of such Purchaser contained herein; provided that such claim for indemnification relating to a breach of any representation or warranty is made prior to the expiration of such representation or warranty; and provided further, that no BreitBurn Related Party shall be entitled to recover special, consequential (including lost profits) or punitive damages.  Notwithstanding anything to the contrary, consequential damages shall not be deemed to include diminution in value, which is specifically included in damages covered by BreitBurn Related Parties indemnification.

Section 7.3  Indemnification Procedure.  Promptly after any BreitBurn Related Party or Purchaser Related Party (hereinafter, the “Indemnified Party”) has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third person that the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”) written notice of such claim or the commencement of such action, suit or proceeding, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure.  Such notice shall state the nature and the basis of such claim to the extent then known.  The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel who shall be reasonably acceptable to the Indemnified Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith.  If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof.  Such cooperation shall include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and other

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information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control.  Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party.  After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that the Indemnified Party shall be entitled (i) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense or employ counsel reasonably acceptable to the Indemnified Party or (B) if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party shall have the right to select one separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred.  Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, involves no admission of wrongdoing or malfeasance by, and includes a complete release from liability of, the Indemnified Party.

ARTICLE VIII

MISCELLANEOUS

Section 8.1  Interpretation of Provisions.  Article, Section, Schedule and Exhibit references are to this Agreement, unless otherwise specified.  All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified.  The word “including” shall mean “including but not limited to”.  Whenever any party has an obligation under the Basic Documents, the expense of complying with that obligation shall be an expense of such party unless otherwise specified.  Whenever any determination, consent or approval is to be made or given by a Purchaser under this Agreement, such action shall be in such Purchaser’s sole discretion unless otherwise specified in this Agreement.  If any provision in the Basic Documents is held to be illegal, invalid, not binding or unenforceable, such provision shall be fully severable and the Basic Documents shall be construed and enforced as if such illegal, invalid, not binding or unenforceable provision had never comprised a part of the Basic Documents, and the remaining provisions shall remain in full force and effect.  The Basic Documents have been reviewed and negotiated by sophisticated parties with access to legal counsel and shall not be construed against the drafter.

Section 8.2  Survival of Provisions.  The representations and warranties set forth in Sections 3.1, 3.2, 3.6 through 3.14 and 4.1 through 4.8 shall survive the execution and delivery of this Agreement and the Closing indefinitely, and the other representations set forth in this

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Agreement shall survive for a period of 12 months following the Closing Date.  The covenants made in this Agreement or any other Basic Document shall survive the closing of the transactions described herein and remain operative and in full force and effect regardless of acceptance of any of the Purchased Units and payment therefor and repayment, conversion, exercise or repurchase thereof.  All indemnification obligations of BreitBurn and the Purchasers pursuant to Article VII of this Agreement shall remain operative and in full force and effect unless such obligations are expressly terminated in writing by the Parties referencing the particular Article or Section, regardless of any purported general termination of this Agreement.

Section 8.3  No Waiver; Modifications in Writing.

(a)           Delay.  No failure or delay on the part of any Party in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any right, power or remedy.  The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to a Party at law or in equity or otherwise.

(b)           Specific Waiver.  Except as otherwise provided in this Agreement or the Registration Rights Agreement, no amendment, waiver, consent, modification or termination of any provision of any Basic Document shall be effective unless signed by each of the Parties or each of the original signatories thereto affected by such amendment, waiver, consent, modification or termination.  Any amendment, supplement or modification of or to any provision of any Basic Document, any waiver of any provision of this Agreement or any other Basic Document and any consent to any departure by BreitBurn or any Purchaser from the terms of any provision of any Basic Document shall be effective only in the specific instance and for the specific purpose for which made or given.  Except where notice is specifically required by this Agreement, no notice to or demand on any Party in any case shall entitle any Party to any other or further notice or demand in similar or other circumstances.

Section 8.4  Binding Effect; Assignment.

(a)           Binding Effect.  This Agreement shall be binding upon BreitBurn, each Purchaser, and their respective successors and permitted assigns.  Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the Parties to this Agreement and as provided in Article VII, and their respective successors and permitted assigns.

(b)           Assignment of Purchased Units.  All or any portion of a Purchaser’s Purchased Units purchased pursuant to this Agreement may be sold, assigned or pledged by such Purchaser, subject to compliance with applicable securities Laws, Section 5.3 of this Agreement, and the Registration Rights Agreement.

(c)           Assignment of Rights.  Each Purchaser may assign all or any portion of its rights and obligations under this Agreement without the consent of BreitBurn (i) to any Affiliate of such Purchaser or (ii) in connection with a total return swap or similar transaction with respect to the Purchased Units purchased by such Purchaser, and in each case the assignee shall be deemed to be a Purchaser hereunder with respect to such assigned rights or obligations and shall agree to

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be bound by the provisions of this Agreement.  Except as expressly permitted by this Section 8.4(c), such rights and obligations may not otherwise be transferred except with the prior written consent of BreitBurn (which consent shall not be unreasonably withheld), in which case the assignee shall be deemed to be a Purchaser hereunder with respect to such assigned rights or obligations and shall agree to be bound by the provisions of this Agreement.

Section 8.5  Confidentiality and Non-Disclosure.  Notwithstanding anything herein to the contrary, each Purchaser that has executed a confidentiality agreement in favor of BreitBurn shall continue to be bound by such confidentiality agreement in accordance with the terms thereof until BreitBurn discloses with the Commission (on Form 8-K or otherwise) the transactions contemplated hereby.

Section 8.6  Communications.  All notices and demands provided for hereunder shall be in writing and shall be given by regular mail, registered or certified mail, return receipt requested, facsimile, air courier guaranteeing overnight delivery, electronic mail or personal delivery to the following addresses:

(a)           If to Kayne Anderson MLP Investment Company:

Kayne Anderson MLP Investment Company
1800 Avenue of the Stars,
Second Floor
Los Angeles, CA 90067
Attention: David Shladovsky
Facsimile: (310) 284-6490

with a copy to:

717 Texas Avenue, Suite 3100
Houston, Texas 77002
Attention: Kevin McCarthy
Facsimile: (713) 655-7359

and  a copy to:

Baker Botts L.L.P.
98 San Jacinto Boulevard
Suite 1500
Austin, Texas  78701
Attention: Laura L. Tyson, Esq.
Facsimile: (512) 322-8377

23

(b)           If to Kayne Anderson Energy Development Company:

Kayne Anderson Energy Development Company
1800 Avenue of the Stars,
Second Floor
Los Angeles, CA 90067
Attention: David Shladovsky
Facsimile: (310) 284-6490

with a copy to:

717 Texas Avenue, Suite 3100
Houston, Texas 77002
Attention: Kevin McCarthy
Facsimile: (713) 655-7359

and a copy to:

Baker Botts L.L.P.
98 San Jacinto Boulevard
Suite 1500
Austin, Texas  78701
Attention: Laura L. Tyson, Esq.
Facsimile: (512) 322-8377

(c)           If to Kayne Anderson Energy Total Return Fund, Inc.:

Kayne Anderson Energy Total Return Fund, Inc.
1800 Avenue of the Stars,
Second Floor
Los Angeles, CA 90067
Attention: David Shladovsky
Facsimile: (310) 284-6490

with a copy to:

717 Texas Avenue, Suite 3100
Houston, Texas 77002
Attention: Kevin McCarthy
Facsimile: (713) 655-7359

24

and a copy to:

Baker Botts L.L.P.
98 San Jacinto Boulevard
Suite 1500
Austin, Texas  78701
Attention: Laura L. Tyson, Esq.
Facsimile: (512) 322-8377

(d)           If to GPS MLP Fund LP:

c/o GPS Partners
100 Wilshire Blvd., Suite 900
Santa Monica, CA 90401
Attention: Jeff Farron
Phone: (310) 496-5365

(e)           If to GPS New Equity Fund LP:

c/o GPS Partners
100 Wilshire Blvd., Suite 900
Santa Monica, CA 90401
Attention: Jeff Farron
Phone: (310) 496-5365

(f)            If to Royal Bank of Canada:

Royal Bank of Canada
c/o Daniel Weinstein
One Liberty Plaza
Second Floor
New York, NY 10006

(g)           If to Lehman Brothers MLP Opportunity Fund L.P.:

Lehman Brothers MLP Opportunity Fund L.P.
399 Park Avenue, 9th Floor
New York, New York 10022
Attention: Michael J. Cannon

(h)           If to ZLP Fund, L.P.:

c/o Zimmer Lucas Partners, LLC
Harborside Financial Center
Plaza 10, Suite 301
Jersey City, NJ 07311

25

with a copy to:

Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, NY 10036-4039

(i)            If to Structured Finance Americas, LLC:

Structured Finance Americas, LLC
c/o Deutsche Bank Securities Inc.
60 Wall Street, 4th Floor
Attention: Nicholas Bozzuto
New York, NY 10005

(j)            If to BreitBurn:

BreitBurn Energy Partners L.P.
515 South Flower Street, Suite 4800
Los Angeles, California  90071
Attention:  Gregory C. Brown
Facsimile:  (213) 225-5917
Email:  gbrown@breitburn.com

with a copy to:

Vinson & Elkins L.L.P.
666 Fifth Avenue
26th Floor
New York, New York  10103
Attention:  Alan P. Baden
Facsimile:  (917) 849-5337
Email:  abaden@velaw.com

or to such other address as BreitBurn or such Purchaser may designate in writing.  All notices and communications shall be deemed to have been duly given:  at the time delivered by hand, if personally delivered; upon actual receipt if sent by registered or certified mail, return receipt requested, or regular mail, if mailed; when receipt acknowledged, if sent via facsimile; and upon actual receipt when delivered to an air courier guaranteeing overnight delivery or via electronic mail.

Section 8.7  Removal of Legend.  Each Purchaser may request BreitBurn to remove the legend described in Section 4.9 from the certificates evidencing the Purchased Units by submitting to BreitBurn such certificates, together with an opinion of counsel to the effect that such legend is no longer required under the Securities Act or applicable state laws, as the case may be. BreitBurn shall cooperate with such Purchaser to effect the removal of such legend; provided, that no opinion of counsel shall be required in the event a Purchaser is effecting a sale

26

of such Purchased Units pursuant to Rule 144 (unless required by BreitBurn’s transfer agent) or an effective registration statement.

Section 8.8  Entire Agreement.  This Agreement and the Registration Rights Agreement are intended by the Parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the Parties hereto and thereto in respect of the subject matter contained herein and therein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein with respect to the rights granted by BreitBurn or a Purchaser set forth herein or therein.  This Agreement and the Registration Rights Agreement supersede all prior agreements and understandings between the Parties with respect to such subject matter.

Section 8.9  Governing Law.  This Agreement will be construed in accordance with and governed by the Laws of the State of New York.

Section 8.10  Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different Parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

Section 8.11  Termination.

(a)           Notwithstanding anything herein to the contrary, this Agreement may be terminated on or any time prior to the Closing:

(i)            by the mutual written consent of the Purchasers entitled to purchase a majority of the Purchased Units based on their Commitment Amounts and BreitBurn; or

(ii)           by the written consent of the Purchasers entitled to purchase a majority of the Purchased Units based on their Commitment Amounts or by BreitBurn, (i) if any representation or warranty of the other Party set forth in this Agreement shall be untrue in any material respect when made, or (ii) upon a breach in any material respect of any covenant or agreement on the part of the other set forth in this Agreement (either (i) or (ii) above being a “Terminating Breach”); provided, that each Terminating Breach would cause the conditions to the non-terminating Party’s obligations not to be satisfied and such Terminating Breach is not cured within 20 days after written notice from the non-breaching Party.

(b)           Notwithstanding anything herein to the contrary, this Agreement shall automatically terminate on or any time prior to the Closing:

(i)            if the Closing shall not have occurred on or before June 15, 2007;

(ii)           if the Calumet Asset Purchase Agreement shall have been terminated pursuant to its terms; or

(iii)          if a Law shall have been enacted or promulgated, or if any Action shall have been taken by any Governmental Authority of competent jurisdiction that

27

permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the transactions contemplated by this Agreement or the Calumet Asset Purchase Agreement or makes the transactions contemplated by this Agreement illegal.

(c)           In the event of the termination of this Agreement as provided in Section 8.11(a) or Section 8.11(b), this Agreement shall forthwith become null and void.  In the event of such termination, there shall be no liability on the part of any Party hereto, except with respect to the requirement to comply with any confidentiality agreement in favor of BreitBurn; provided that nothing herein shall relieve any Party from any liability or obligation with respect to any willful breach of this Agreement.

Section 8.12  Expenses.  BreitBurn shall pay up to $75,000 of legal fees of Baker Botts L.L.P., counsel to the Purchasers, incurred in connection with the negotiation, execution, delivery and performance of this Agreement and the Registration Rights Agreement and the transactions contemplated hereby and thereby, provided that any request for such payment is accompanied by a satisfactory written invoice for such expenses.  If any action at law or equity is necessary to enforce or interpret the terms of any Basic Document, the prevailing Party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such Party may be entitled.

Section 8.13  Recapitalization, Exchanges, Etc. Affecting the Purchased Units.  The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all Common Units of BreitBurn or any successor or assign of BreitBurn (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Purchased Units, and shall be appropriately adjusted for combinations, Common Unit splits, recapitalizations and the like occurring after the date of this Agreement.

Section 8.14  Obligations Limited to Parties to Agreement.  Each of the parties hereto covenants, agrees and acknowledges that no Person other than the Purchasers (and their permitted assignees) and BreitBurn shall have any obligation hereunder and that, notwithstanding that one or more of the Purchasers may be a corporation, partnership or limited liability company, no recourse under this Agreement or the Registration Rights Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Purchasers or BreitBurn or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Purchasers or BreitBurn or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for any obligations of the Purchasers and BreitBurn under this Agreement or the Registration Rights Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation.

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

28

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

BREITBURN ENERGY PARTNERS L.P.
By:	BREITBURN GP, LLC,
	its general partner
By:
	Name:	Halbert S. Washburn
	Title:	Co-Chief Executive Officer

29

ROYAL BANK OF CANADA
by its agent
RBC CAPITAL MARKETS CORPORATION
By:
	Josef Muskatel
	Director and Senior Counsel
By:
	David Weiner
	Managing Director

30

GPS NEW EQUITY FUND LP
By:	GPS Partners, LLC, its General Partner
By:
	Brett S. Messing, Managing Partner
GPS MLP FUND LP
By:	GPS Partners, LLC, its General Partner
By:
	Brett S. Messing, Managing Partner

31

ZLP FUND, L.P.
By:	Zimmer Lucas Partners, LLC,
	its General Partner
By:
	Craig M. Lucas
	Managing Member

32

LEHMAN BROTHERS MLP OPPORTUNITY FUND L.P.
By:	Lehman Brothers MLP Opportunity
	Associates L.P., its general partner
By:	Lehman Brothers MLP Opportunity
	Associates L.L.C., its general partner
By:
	Name:
	Title:

33

KAYNE ANDERSON MLP INVESTMENT COMPANY
By:
	Name:	James C. Baker
	Title:	Vice President
KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC
By:
	Name:	James C. Baker
	Title:	Vice President
KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
By:
	Name:	James C. Baker
	Title:	Vice President

34

STRUCTURED FINANCE AMERICAS, LLC
By:
	Name:
	Title:
By:
	Name:
	Title:

35

EX-10.2

Exhibit 10.2

AMENDED AND RESTATED ASSET PURCHASE AGREEMENT

DATED AS OF MAY 16, 2007,

BY AND BETWEEN

CALUMET FLORIDA, L.L.C.,

AS SELLER ,

AND

BREITBURN OPERATING L.P.,

AS BUYER

TABLE OF CONTENTS

		PAGE
ARTICLE I.	DEFINITIONS	1
Section 1.1	Certain Defined Terms	1
Section 1.2	References, Gender, Number	1
ARTICLE II.	SALE AND PURCHASE OF ASSETS	2
Section 2.1	Sale and Purchase	2
Section 2.2	Intercompany Accounts	2
ARTICLE III.	PURCHASE PRICE AND PAYMENT	2
Section 3.1	Purchase Price	2
Section 3.2	Payment	2
Section 3.3	Adjustment Period Cash Flow	2
Section 3.4	Post Closing Review	3
ARTICLE IV.	REPRESENTATIONS AND WARRANTIES	4
Section 4.1	Representations and Warranties of Seller	4
(a)	Organization and Qualification	4
(b)	Authority	5
(c)	Enforceability	5
(d)	No Conflict or Violation	5
(e)	Consents	5
(f)	Actions	5
(g)	Compliance With Laws	5
(h)	Brokerage Fees and Commissions	5
(i)	Bankruptcy	6
(j)	Material Contracts	6
(k)	Compliance with Contracts	6
(l)	Tax Matters	7
(m)	Status of Seller	7
(n)	Payments for Production	7
(o)	Payout Balance	7
(p)	Tax Partnership	7
(q)	AFEs and Other Commitments	7
(r)	Wells	7
(s)	Production Allowables	7
(t)	Plugging and Abandonment	7
(u)	Seller’s Knowledge	8
(v)	Condemnation	8
(w)	Special Title Warranty	8
Section 4.2	Representations and Warranties of Buyer	8

i

(a)	Organization and Qualification	8
(b)	Authority	8
(c)	Enforceability	8
(d)	No Conflict or Violation	8
(e)	Consents	9
(f)	Actions	9
(g)	Brokerage Fees and Commissions	9
(h)	Qualified Owner	9
(i)	Funds	9
(j)	Buyer’s Knowledge	9
(k)	No Distribution	9
(l)	Bankruptcy	10
ARTICLE V.	ACCESS TO INFORMATION; NO WARRANTY; ETC	10
Section 5.1	General Access	10
Section 5.2	Confidential Information	10
Section 5.3	No Warranty or Representation	10
ARTICLE VI.	FORMATION OF AND CONVEYANCE TO COMPANY	11
Section 6.1	Formation of Company	11
Section 6.2	Conveyance to Company	11
ARTICLE VII.	TRANSFER REQUIREMENTS	11
Section 7.1	Compliance	11
Section 7.2	Certain Consents	12
ARTICLE VIII.	COVENANTS OF SELLER AND BUYER	12
Section 8.1	Conduct of Business Pending Closing	12
(a)	Changes in Business	12
(b)	Liens	12
(c)	Operation of Assets	13
(d)	Contracts and Agreements	13
Section 8.2	Qualifications on Conduct	14
(a)	Emergencies; Legal Requirements	14
(b)	Non-Operated Properties	14
(c)	Certain Operations	14
Section 8.3	Assignment of Membership Interests	15
Section 8.4	Public Announcements	15
Section 8.5	Amendment of Schedules	16
Section 8.6	Parties’ Efforts and Further Assurances	16

ii

Section 8.7	Asset Records	16
Section 8.8	Recording	17
Section 8.9	Casualty and Condemnation	17
Section 8.10	Transition Agreement	17
Section 8.11	Employees	17
(a)	Company Employees	17
(b)	Continuing Employees	18
(c)	Savings Plans	18
(d)	Post-Closing Benefits for Continuing Employees	18
Section 8.12	Joint Development and AMI Agreement	19
Section 8.13	3-D Seismic Data License Agreement	19
Section 8.14	Cooperation in Connection with Preparation and Audit of Financial Statements	19
ARTICLE IX.	CLOSING CONDITIONS	20
Section 9.1	Seller’s Closing Conditions	20
(a)	Representations, Warranties and Covenants	20
(b)	Officer’s Certificate	20
(c)	Closing Documents	20
(d)	No Action	20
(e)	Opinion of Counsel	20
Section 9.2	Buyer’s Closing Conditions	20
(a)	Representations, Warranties and Covenants	20
(b)	Officer’s Certificate	21
(c)	Closing Documents	21
(d)	No Action	21
(e)	Opinion of Counsel	21
(f)	Derivative Transfer	21
(g)	Other Consents	21
Section 9.3	Failure to Disclose	21
ARTICLE X.	CLOSING	22
Section 10.1	Closing	22
Section 10.2	Seller’s Closing Obligations	22
Section 10.3	Buyer’s Closing Obligations	22
ARTICLE XI.	EFFECT OF CLOSING	23
Section 11.1	Revenues	23
Section 11.2	Expenses	23
Section 11.3	Payments and Obligations	23

iii

Section 11.4	Survival	23
Section 11.5	Certain Post-Closing Obligations	24
ARTICLE XII.	LIMITATIONS	24
Section 12.1	Disclaimer of Warranties	24
Section 12.2	Texas Deceptive Trade Practices Act Waiver	25
Section 12.3	Damages	26
Section 12.4	Plugging and Abandonment Obligations	26
Section 12.5	Environmental Release	26
ARTICLE XIII.	INDEMNIFICATION	27
Section 13.1	Indemnification By Buyer	27
Section 13.2	Indemnification By Seller	27
Section 13.3	Indemnification and Defense Procedures	28
Section 13.4	Seller’s General Liability Limitation	30
Section 13.5	Materiality Exclusion	31
ARTICLE XIV.	TERMINATION; REMEDIES	31
Section 14.1	Termination	31
(a)	Termination of Agreement	31
(b)	Effect of Termination	31
Section 14.2	Remedies	32
(a)	Seller’s Remedies	32
(b)	Buyer’s Remedies	32
ARTICLE XV.	MISCELLANEOUS	32
Section 15.1	Counterparts	32
Section 15.2	Governing Law; Jurisdiction; Process	32
Section 15.3	Entire Agreement	33
Section 15.4	Expenses	33
Section 15.5	Notices	34
Section 15.6	Successors and Assigns	34
Section 15.7	Amendments and Waivers	34
Section 15.8	Appendices, Schedules and Exhibits	35
Section 15.9	Interpretation	35
Section 15.10	Arbitration	35
Section 15.11	Agreement for the Parties’ Benefit Only	35
Section 15.12	Attorneys’ Fees	36
Section 15.13	Severability	36
Section 15.14	No Recordation	36
Section 15.15	Time of Essence	36
Section 15.16	Confidentiality	36

iv

EXHIBITS

Exhibit 6.1	—	Form of Limited Liability Company Agreement
		Form of Certificate of Formation of Company
Exhibit 6.2	—	Conveyance
Exhibit 7.2	—	Operations and Proceeds Agreement
Exhibit 8.3	—	Form of Assignment of Membership Interests
Exhibit 8.4	—	Form of Buyer’s Press Release
Exhibit 8.10	—	Transition Agreement
Exhibit 8.12	—	Joint Development and AMI Agreement
Exhibit 8.13	—	Data License Agreement
Exhibit 9.1(e)	—	Buyer’s Counsel’s Opinion
Exhibit 9.2(e)	—	Seller’s Counsel’s Opinion
Exhibit 10.2(e)	—	Affidavit of Non-Foreign Status
Exhibit 10.3(d)	—	Form of Parent Guarantee
Exhibit A-1	—	Arbitration Procedures

SCHEDULES

Schedule A-1	—	Property Schedule
Schedule A-2	—	Excluded Assets
Schedule A-3	—	Certain Permitted Encumbrances
Schedule A-4	—	Royalty Accounts
Schedule 4.1(e)	—	Seller’s Consents
Schedule 4.1(f)	—	Seller’s Actions
Schedule 4.1(g)	—	Compliance with Laws
Schedule 4.1(j)	—	Material Contracts

v

Schedule 4.1(k)	—	Compliance with Material Contracts
Schedule 4.1(l)	—	Tax Matters
Schedule 4.1(p)	—	Tax Partnerships
Schedule 4.1(q)	—	AFEs and Other Commitments
Schedule 4.1(r)	—	Wells Being Drilled
Schedule 4.1(t)	—	Plugging and Abandonment
Schedule 7.1	—	Transfer Requirements
Schedule 8.1	—	Conduct of Business
Schedule 8.11(a)	—	Company Employees

vi

AMENDED AND RESTATED ASSET PURCHASE AGREEMENT

THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of May 16, 2007, is by and between CALUMET FLORIDA, L.L.C., a Delaware limited liability company (“Seller”), and BREITBURN OPERATING L.P., a Delaware limited partnership (“Buyer”).

WHEREAS, Seller and Buyer made and entered into that certain Asset Purchase Agreement dated as of May, 16, 2007 (the “Original Agreement”) pursuant to which Seller agreed to sell and Buyer agreed to purchase the Assets (as defined therein) upon the terms and subject to the conditions set forth in the Original Agreement; and

WHEREAS, Buyer has requested that, prior to Closing, Seller convey the Assets to a single member Delaware limited liability company of which Seller is the sole member, and assign to Buyer at Closing, all of the issued and outstanding membership interests in and to such company; and

WHREAS, Seller has agreed to accommodate such requests by Buyer upon the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, the Parties desire to amend and restate the Original Agreement in it entirety to reflect the foregoing agreements and certain other agreements between the Parties, as hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth in this Agreement, the parties hereto agree that the Original Agreement shall be amended and restated in its entirety as follows:

ARTICLE I.
DEFINITIONS

Section 1.1             Certain Defined Terms.  Unless the context otherwise requires, the respective terms defined in Appendix A attached hereto and incorporated herein shall, when used herein, have the respective meanings therein specified, with each such definition to be equally applicable both to the singular and the plural forms of the term so defined.

Section 1.2             References, Gender, Number.  All references in this Agreement to an “Article,” “Section,” or “subsection” shall be to an Article, Section, or subsection of this Agreement, unless the context requires otherwise.  Unless the context otherwise requires, the words “this Agreement,” “hereof,” “hereunder,” “herein,” “hereby,” or words of similar import shall refer to this Agreement as a whole and not to a particular Article, Section, subsection, clause or other subdivision hereof.  Whenever the context requires, the words used herein shall include the masculine, feminine and neuter gender, and the singular and the plural.

ARTICLE II.
SALE AND PURCHASE OF ASSETS

Section 2.1             Sale and Purchase.  On and subject to the terms and conditions of this Agreement, Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, all limited liability company interests (including all membership interests and other equity interests) in and to the Company (collectively, the “Membership Interests”).

Section 2.2             Intercompany Accounts.  On or before the Closing Date, Seller shall eliminate any intercompany accounts that exist between (a) Seller and its Affiliates (other than the Company) and (b) the Company.

ARTICLE III.
PURCHASE PRICE AND PAYMENT

Section 3.1             Purchase Price.  The purchase price for the sale and conveyance of the Company to Buyer is One Hundred Million Dollars $100,000,000.00 (the “Purchase Price”), subject to adjustment in accordance with the terms of this Agreement.  The “Initial Adjusted Purchase Price” shall be the Purchase Price as adjusted by the Initial Adjustment Amount determined pursuant to Section 3.3.  The “Adjusted Purchase Price” shall be the Purchase Price (i) as adjusted in the manner provided in the immediately preceding sentence,  (ii) as adjusted downward for the Royalty Accounts and (iii) as adjusted upward by an amount equal to interest on the Initial Adjusted Purchase Price, as adjusted in the manner provided in items (i) and (ii) above, from the Effective Time until the Closing Date at the Agreed Rate.

Section 3.2             Payment.  At the Closing, Buyer shall wire transfer the Adjusted Purchase Price in immediately available funds to Wells Fargo Bank, in Houston, Texas, ABA No. 121000248 for the account of Seller, Account No. 41211799007, named “Calumet Florida, L.L.C.”, or such other account or accounts specified by Seller to Buyer on or prior to the Business Day immediately preceding the Closing Date.

Section 3.3             Adjustment Period Cash Flow.  (a)  The Purchase Price shall be increased or decreased, as the case may be, by an amount equal to the Net Cash Flow with respect to the Assets for the time period (the “Adjustment Period”) beginning at the Effective Time and ending at 7:00 a.m. (local time) on the Closing Date.  Seller shall deliver to Buyer on or prior to the calendar day preceding the Closing Date a statement (the “Adjustment Statement”) setting forth Seller’s preliminary determination (the “Initial Adjustment Amount”) of the Net Cash Flow.  If the Initial Adjustment Amount shown on the Adjustment Statement is a positive number, then the Purchase Price shall be increased by such amount.  If the Initial Adjustment Amount shown on the Adjustment Statement is a negative number, then the Purchase Price shall be decreased by such amount.

(b)           The Adjustment Statement shall be based upon actual information available to Seller at the time of its preparation and upon Seller’s good faith estimates and assumptions.  There shall be attached to the Adjustment Statement such supporting

2

documentation and other data as is reasonably necessary to provide a basis for the Net Cash Flow shown therein.

(c)           The “Net Cash Flow” shall be the algebraic sum of (i) a positive amount equal to the sum of (A) the aggregate amount incurred by Seller as costs of maintenance and operation of the Pipeline System Assets incurred with respect to the Adjustment Period and (B) the aggregate amount incurred by Seller as Seller’s share of the costs of exploration, development, maintenance, operation, abandonment and production of the E & P Assets incurred with respect to the Adjustment Period, which costs referred to in clauses (A) and (B) above shall include, but shall not be limited to, royalties, overriding royalties, net profit interests and other similar burdens on production, general, administrative and indirect costs and fees in a total amount not to exceed Sixty Thousand Dollars ($60,000) per month (prorated on a daily basis for partial months), Taxes (other than income Taxes, franchise Taxes and taxes similar to income or franchise Taxes), the cost of maintaining leaseholds or other interests included in the Assets, the cost of extension or renewal of any interest included in the Assets, the cost of treating, processing, storing, compressing, transporting, selling, marketing and otherwise handling and dealing with hydrocarbon production with respect to the Assets, the cost of any exploration or development activities on the Assets performed in accordance with Article VIII, and costs of insurance coverage (including prepayments of any costs in accordance with Article VIII), (ii) a negative amount equal to sum of (A) the aggregate gross revenue received by Seller from the operation of the Pipeline System Assets during the Adjustment Period and (B) the aggregate gross proceeds received by Seller from the sale of hydrocarbons produced from or attributable to the E&P Assets during the Adjustment Period or from the sale, salvage or other disposition of any Assets during the Adjustment Period (excluding any payments accounted for under clause (ii) of Section 3.1), and (iii) a negative amount equal to the aggregate amount of any costs incurred under clause (i) above and reimbursed to Seller by any third party (unless such reimbursement is accounted for under clause (ii) above).

Section 3.4             Post Closing Review.  After the Closing, Seller shall review the Adjustment Statement and determine the actual Net Cash Flow and, if applicable, the correct interest calculation based on the Adjusted Purchase Price rather than the Initial Adjusted Purchase Price.  On or prior to the 60th day after the Closing Date, Seller shall present Buyer with a statement of the actual Net Cash Flow and such supporting documentation as is reasonably necessary to support the Net Cash Flow shown therein (the “Final Adjustment Statement”).  To the extent reasonably necessary to Seller, Buyer will give personnel, accountants and representatives of Seller reasonable access to the Assets and Buyer’s premises and to its books and records for purposes of preparing the Final Adjustment Statement and will cause appropriate personnel of Buyer to assist Seller and Seller’s personnel, accountants and representatives, with no charge to Seller for such assistance, in the preparation of the Final Adjustment Statement.  Seller will give personnel, accountants and representatives of Buyer reasonable access to Seller’s premises and to its books and records for purposes of reviewing the calculation of Net Cash Flow and will cause appropriate personnel of Seller to assist Buyer and Buyer’s personnel, accountants and representatives, with no charge to Buyer for such assistance, in verification of such calculation.  The Final Adjustment Statement shall become final and binding on Seller and Buyer as to the Net Cash Flow 30 days following the date the Final Adjustment Statement is received by Buyer, except to the extent that prior to the expiration of

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such 30-day period Buyer shall deliver to Seller one or more notices, as hereinafter required, of its disagreement with the contents of the Final Adjustment Statement.  Such notices shall be in writing and set forth all of Buyer’s disagreements with respect to any portion of the Final Adjustment Statement, together with Buyer’s proposed changes thereto, and shall include an explanation in reasonable detail of, and such supporting documentation as is reasonably necessary to support, such changes.  Any disagreements with or changes to the Final Adjustment Statement not included in such notices shall be waived by Buyer.  If Buyer has timely delivered one or more notices of disagreement to Seller in the manner required above, then, upon written agreement between Buyer and Seller resolving all disagreements of Buyer set forth in such notices, the Final Adjustment Statement (including any revisions thereto as are so agreed) will become final and binding on Buyer and Seller as to the Net Cash Flow.  If the Final Adjustment Statement has not become final and binding by the 120th day following the Closing Date, then Buyer or Seller may submit any unresolved disagreements of Buyer set forth in the aforesaid notices to Ernst & Young, Houston, Texas for final and binding determination.  The fees and expenses of said accounting firm in making such determination shall be shared equally by Buyer and Seller.  Upon resolution of such unresolved disagreements of Buyer, the Final Adjustment Statement (including any revisions thereto as are so resolved or agreed), shall be conclusive, final and binding on Buyer and Seller as to the Net Cash Flow.  If the final amount of Net Cash Flow is more or less than the Initial Adjustment Amount, the Initial Adjusted Purchase Price shall be redetermined under Section 3.1 using such final amount of Net Cash Flow.  If such redetermination under Section 3.1 results in a reduction in the Initial Adjusted Purchase Price, Seller shall pay Buyer the amount of such reduction.  If such redetermination results in an increase in the Initial Adjusted Purchase Price, Buyer shall pay Seller the amount of such increase.  Within three (3) Business Days after the Final Adjustment Statement (as so resolved or agreed) becomes final and binding, Seller or Buyer, as appropriate, shall pay to the other party the amount of such increase or reduction, if any, in the Initial Adjusted Purchase Price, together with interest on the amount of such increase or reduction from the Closing Date until paid at the Agreed Rate.  Except for specific costs which are expressly set forth and accounted for in the final and binding Final Adjustment Statement, neither the Final Adjustment Statement nor this Section 3.4 shall operate to waive, release or impair the indemnity and hold harmless obligations of Buyer under Sections 5.1, and 13.1 or Seller under 13.2.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES

Section 4.1             Representations and Warranties of Seller.  Seller represents and warrants to Buyer as follows:

(a)   Organization and Qualification.   Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite company power to carry on its business as it is now being conducted.  Seller is duly qualified to do business, and is in good standing, in the State of Florida and each other jurisdiction in which the Assets owned or leased by it makes such qualification necessary, except where the failure to so qualify and be in good standing will not have a Material Adverse Effect.

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(b)   Authority.  Seller has all requisite company power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite limited liability company action on the part of Seller.

(c)   Enforceability.  This Agreement constitutes a valid and binding agreement of Seller enforceable against Seller in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application with respect to creditors, (ii) general principles of equity and (iii) the power of a court to deny enforcement of remedies generally based upon public policy.

(d)   No Conflict or Violation.  Except for any exceptions set forth in Section 4.1(e) (or referenced in Schedule 4.1(e)), neither the execution and delivery of this Agreement nor the consummation of the transactions and performance of the terms and conditions contemplated hereby by Seller will (i) conflict with or result in a violation or breach of or default under any provision of the certificate of formation, by-laws or other similar governing documents of Seller, (ii) conflict with or result in a violation or breach of or default under any agreement, indenture or other instrument under which Seller is bound and to which any Asset is subject, other than such conflicts, breaches, violations or defaults as will not have a Material Adverse Effect, or (iii) violate or conflict with any Law applicable to Seller or the Assets.

(e)   Consents.  Except for (i) consents or approvals of or filings with applicable Governmental Authorities in connection with assignments of the Subject Interests and Membership Interests as contemplated by Section 7.2, and (ii) consents, approvals, authorizations, permits, filings, notices or Preference Rights referenced in Schedule 4.1(e), to Seller’s knowledge (x) no consent, approval, authorization or permit of, or filing with or notification to, any Person is required for or in connection with the execution and delivery of this Agreement by Seller or for or in connection with the consummation of the transactions and performance of the terms and conditions contemplated hereby by Seller and (y) there are no Preference Rights which are applicable to the sale of the Assets by Seller as contemplated by this Agreement.

(f)    Actions.  Except as set forth in Schedule 4.1(f), there is no Action pending (with service of process therein having been made on Seller) or, to the knowledge of Seller, threatened (or pending without service of process therein having been made on Seller) to which Seller is (or is threatened to be made) a party and which relates to the Assets.

(g)   Compliance With Laws.  Except as set forth in Schedule 4.1(g), Seller has no knowledge of any material violation by Seller of any Law with respect to the Assets, provided that, Seller makes no representation or warranty, express or implied, with respect to (i) any Environmental Law, (ii) any Tax Law, except as set forth in Section 4.1(l), or (iii) Seller’s title to the Assets, except as set forth in Section 4.1(w).

(h)   Brokerage Fees and Commissions.  Neither Seller nor any Affiliate of Seller has incurred any obligation or entered into any agreement for any investment banking, brokerage or finder’s fee or commission in respect of the transactions contemplated by this Agreement for which Buyer shall incur any liability.

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(i)    Bankruptcy.  There are no bankruptcy, reorganization or arrangement proceedings pending against, being contemplated by, or, to the knowledge of Seller, threatened against Seller or any Affiliate of Seller.

(j)    Material Contracts.  Schedule 4.1(j) sets forth a list of the following contracts, agreements or commitments to which the Assets are subject or by which Seller is bound with respect to the Assets:

(1)       any joint operating agreement, unitization or pooling agreement, unit operating agreement, purchase agreement, farmin or farmout agreement, exploration agreement, participation agreement or similar agreement providing for the earning of an interest;

(2)       any partnership agreement, tax partnership agreement or joint venture agreement;

(3)       any agreement containing a right of first refusal, preferential purchase right or restriction on competition, or delineating an area of mutual interest;

(4)       any written contract or agreement with Seller or any Affiliate of Seller relating to the Assets;

(5)       any contract, agreement or commitment that commits Seller and its assigns to aggregate expenditures with respect to the Subject Interests or other Assets of more than $100,000 in any calendar year; excluding the Subject Interests and any contracts or agreements creating interests or rights in the Subject Interests or in any Hydrocarbon Interests, wells or units;

(6)       any contract, agreement or commitment that commits Seller and its assigns to purchase, sell, exchange, process, treat, handle, store or transport any Hydrocarbon production attributable to the Subject Interests; excluding the Subject Interests;

(7)       any contract, agreement or commitment that commits Seller to gather or transport any Hydrocarbon production in the Pipeline System; and

(8)       any future, option, swap, hedge or other derivative or any commitment to enter into any of the same (individually and collectively, a “Derivative”).

(k)   Compliance with Contracts.  Except as set forth in Schedule 4.1(k), neither  Seller nor, to Seller’s knowledge, any other party thereto is, as of the date hereof, in material breach of or material default under any contract, agreement or commitment listed in Schedule 4.1(j), and there does not exist under any provision thereof, to Seller’s knowledge, as of the date hereof, any event that, with the giving of notice or the lapse of time or both, would constitute such a breach or default.

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(l)    Tax Matters.  Except for Taxes being contested in connection with the matters set forth in Schedule 4.1(l), Seller is not delinquent in the payment of any Taxes (other than Income Taxes, Franchise Taxes and similar Taxes) attributable to any periods through the Effective Time relating to or in connection with the Assets, including all excise, property, sales, transfer, severance and production Taxes.

(m)  Status of Seller.  Seller is not an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(n)   Payments for Production.  To Seller’s knowledge, all rentals, royalties, excess royalty, overriding royalty interests and other payments due and payable by Seller to overriding royalty holders and other interest owners under or with respect to the E & P Assets and the Hydrocarbons produced therefrom or attributable thereto have been paid except for the amounts held in suspense in the Royalty Accounts.

(o)   Payout Balance.  To Seller’s knowledge, there is no “payout” balance attributable to the wells and units comprising the E & P Assets.

(p)   Tax Partnership.  Except as set forth in Schedule 4.1(p), none of the Assets is held by or is subject to any contractual arrangement between Seller and any other Persons, whether owning undivided interests therein or otherwise, that is treated as or constitutes a partnership for United States federal Tax purposes.

(q)   AFEs and Other Commitments.  Except as set forth in Schedule 4.1(q), as of the date of this Agreement, there are no AFEs, capital expenditures related to the drilling or reworking of wells, or other commitments for capital expenditures outstanding with respect to the Assets.

(r)    Wells.  The only wells being drilled on the Subject Interests as of the date of this Agreement are those set forth in Schedule 4.1(r).

(s)   Production Allowables.  To Seller’s knowledge, Seller has not received written notice that there has been any change proposed in the production allowables for any wells located on the Subject Interests.

(t)    Plugging and Abandonment.  To Seller’s knowledge, since the Effective Time, Seller has not abandoned, and is not in the process of abandoning, any wells (nor has it removed, nor is it in the process of removing, any material items of personal property, except those replaced by items of substantially equivalent suitability and value).  Except as set forth in Schedule 4.1(t), there are no wells located on the Subject Interests:

(1)       with respect to which Seller has received an order from any Governmental Authority requiring that such well be plugged and abandoned;

(2)       that formerly produced but that are currently shut in or temporarily abandoned; or

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(3)       that, to Seller’s knowledge, have been plugged and abandoned but have not been plugged in accordance with all applicable requirements of each Governmental Authority having jurisdiction over the Subject Interests.

(u)   Seller’s Knowledge.  Seller has no knowledge of any fact which results in any representation or warranty of Buyer in Section 4.2 being breached.  If after the date of this Agreement Seller obtains knowledge of any fact which results in any representation or warranty of Buyer in Section 4.2 being breached, Seller will promptly furnish Buyer written notice thereof.

(v)   Condemnation.  There is no actual or, to Seller’s knowledge, threatened taking (whether permanent, temporary, whole or partial) of any part of the Assets by reason of condemnation or the threat of condemnation.

(w)  Special Title Warranty.  The Subject Interests and real property interests comprising the Pipeline System are free from the claims of any persons lawfully claiming or to claim the same or any part thereof, by, through or under Seller, by virtue of any prior conveyance, lien or encumbrance made, done or suffered by Seller from and after August 1, 2005, except for Permitted Encumbrances.

Section 4.2             Representations and Warranties of Buyer.  Buyer represents and warrants to Seller as follows:

(a)   Organization and Qualification.  Buyer is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite company power to carry on its business as it is now being conducted.  Buyer is duly qualified to do business, and is in good standing, in each jurisdiction in which the Assets to be acquired by it makes such qualification necessary.

(b)   Authority.  Buyer has all requisite partnership power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.  The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite partnership action on the part of Buyer.

(c)   Enforceability.  This Agreement constitutes a valid and binding agreement of Buyer enforceable against Buyer in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application with respect to creditors, (ii) general principles of equity and (iii) the power of a court to deny enforcement of remedies generally based upon public policy.

(d)   No Conflict or Violation.  Except for any exceptions set forth in Section 4.2(e), neither the execution and delivery of this Agreement nor the consummation of the transactions and performance of the terms and conditions contemplated hereby by Buyer will (i) conflict with or result in a violation or breach of or default under any provision of the certificate of limited partnership, partnership agreement or other similar governing documents of Buyer or any material agreement, indenture or other instrument under which Buyer is bound or (ii) violate or conflict with any Law applicable to Buyer or the Assets.

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(e)   Consents.  Except for consents or approvals of or filings with the applicable Governmental Authorities in connection with assignments of the Subject Interests and Membership Interests as contemplated by Section 7.2, no consent, approval, authorization or permit of, or filing with or notification to, any Person is required for or in connection with the execution and delivery of this Agreement by Buyer or for or in connection with the consummation of the transactions and performance of the terms and conditions contemplated hereby by Buyer.

(f)    Actions.  There is no Action pending (with service of process therein having been made on Buyer) or, to the knowledge of Buyer, threatened (or pending without service of process therein having been made on Buyer) to which Buyer is (or is threaten to be made) a party, other than Actions which are not reasonably expected by Buyer to have a material adverse effect on Buyer.

(g)   Brokerage Fees and Commissions.  Neither Buyer nor any Affiliate of Buyer has incurred any obligation or entered into any agreement for any investment banking, brokerage or finder’s fee or commission in respect of the transactions contemplated by this Agreement for which Seller shall incur any liability.

(h)   Qualified Owner.  At or prior to the termination of the Transition Agreement, the Company (i) shall be qualified under Law to own the Assets and (ii) will have complied with all necessary governmental bonding requirements required for its ownership of the Assets.

(i)    Funds.  As of the Closing Buyer will have sufficient funds available to enable Buyer to consummate the transactions contemplated hereby and to pay the Initial Adjusted Purchase Price and all related fees and expenses of Buyer.

(j)    Buyer’s Knowledge.  Buyer has no knowledge of any fact which results in any representation or warranty of Seller in Section 4.1 being breached.  If after the date of this Agreement, Buyer obtains knowledge of any fact which results in any representation or warranty of Seller in Section 4.1 being breached, Buyer will promptly furnish Seller written notice thereof.

(k)   No Distribution.  Buyer is an experienced and knowledgeable investor in the oil and gas business, Buyer is able to bear the economic risks of its acquisition and ownership of the Company and the Assets, and Buyer is capable of evaluating (and has evaluated) the merits and risks of the Company and the Assets and Buyer’s acquisition and ownership the Company.  Prior to entering into this Agreement, Buyer was advised by its counsel and such other Persons it has deemed appropriate concerning this Agreement and has relied solely on an independent investigation and evaluation of, and appraisal and judgment with respect to, the geologic and geophysical characteristics of the Subject Interests, the estimated reserves recoverable therefrom, and the price and expense assumptions applicable thereto.  Buyer is an “accredited investor,” as such term is defined in Regulation D of the Securities Act of 1933, as amended, and will acquire the Membership Interests for its own account and not with a view to a sale or distribution thereof in violation of the Securities Act of 1933, as amended, and the rules and regulations thereunder, any applicable state blue sky laws or any other applicable securities laws.

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(l)    Bankruptcy.  There are no bankruptcy, reorganization or arrangement proceedings pending against, being contemplated by, or to the knowledge of Buyer, threatened against Buyer or any Affiliate of Buyer.

ARTICLE V.
ACCESS TO INFORMATION; NO WARRANTY; ETC.

Section 5.1             General Access.  Promptly following the execution of this Agreement and until the Closing Date (or earlier termination of this Agreement), Seller shall:

(a)   permit Buyer and its representatives to have reasonable access at reasonable times in the Seller’s offices, and in a manner so as not to interfere unduly with the business operations of Seller, to Seller’s books, records, contracts, abstracts of title, title opinions, title files, ownership maps, lease files, assignments, division orders, and documents relating to the Assets insofar as the same are in Seller’s possession and insofar as Seller may do so without (i) violating legal constraints or any legal obligation or (ii) waiving any attorney/client, work product or like privilege; and

(b)   subject to any required consent of any third Person, permit Buyer and its representatives at reasonable times and at Buyer’s sole risk, cost and expense, to conduct, in the presence of Seller’s representatives, reasonable inspections of the Assets;

provided, however, Buyer shall repair any damage to the Assets resulting from such inspections and Buyer does hereby indemnify and hold harmless, release and agree to defend the Seller Indemnified Persons from and against any and all Covered Liabilities arising, in whole or in part, from Buyer’s inspection of the Assets, regardless of any concurrent negligence or strict liability on the part of the Seller Indemnified Persons and regardless of the form of claim whether at common law, strict liability, negligence or under any statute or regulation.  Nothing in this Agreement shall be construed to permit Buyer or its representatives to have access to any files, records, contracts or documents of Seller relating to this transaction, including, without limitation, any bids or offers received by Seller for the sale of the Assets in competition with the Buyer’s bid or offer, it being agreed that all such competing bids or offers shall be the sole property of Seller.

Section 5.2             Confidential Information.  Buyer agrees to maintain all information made available to it pursuant to this Agreement confidential and to cause its partners, directors, officers, employees, agents, representatives, consultants and advisors to maintain all information made available to them pursuant to this Agreement confidential, to the extent provided in that certain confidentiality agreement dated December 27, 2006 (the “Confidentiality Agreement”), by and between Vulcan Resources Florida Inc. and Buyer, the terms of which are incorporated herein by reference and made a part of this Agreement.

Section 5.3             No Warranty or Representation.  Seller makes no warranty or representation, express, implied, statutory or otherwise, with respect to any Environmental Matters.  Furthermore, without limiting the provisions of the eighth grammatical paragraph of the Confidentiality Agreement (which shall continue in full force and effect)

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and except for the representations and warranties made by Seller in Section 4.1, Seller makes no warranty or representation, express, implied, statutory or otherwise, with respect to the accuracy or completeness of the information, records and data now, heretofore or hereafter made available to Buyer in connection with this Agreement; including, without limitation, any description of the Assets, pricing assumptions, potential for production of oil, gas or other hydrocarbons from the Subject Interests, projected development costs, projected plugging and abandonment costs or any other matters contained in or related to the Reserve Report; any environmental information; or any other material furnished to Buyer by Seller or any director, officer, shareholder, employee, counsel, agent or advisor of Seller.

ARTICLE VI.
FORMATION OF AND CONVEYANCE TO COMPANY

Section 6.1             Formation of Company.  Prior to the Closing, Seller shall form a single member Delaware limited liability company of which Seller is (and shall remain until Closing) the sole member (the “Company”).  The name of the Company shall be “Calumet Sunniland, LLC” or such other name as may be agreed by Seller and Buyer.  In furtherance of the foregoing, Seller shall execute a Limited Liability Company Agreement and shall cause to be filed with the Secretary of State of Delaware a Certificate of Formation of the Company, substantially in the respective forms attached hereto as Exhibit 6.1.  Promptly upon receipt of evidence of such filing with the Secretary of State of Delaware, Seller shall furnish a copy of such evidence of filing with Buyer.  Promptly following the formation of the Company, Seller shall cause the Company to be authorized to do business in the State of Florida as a foreign limited liability company.

Section 6.2             Conveyance to Company.  After formation of the Company and prior to Closing, Seller shall execute and deliver to the Company the General Conveyance, in substantially the form attached hereto as Exhibit 6.2 (the “Conveyance”), together with all special governmental assignment forms as may be required by Law to be executed in connection with the conveyance of specific Assets; provided that the terms and provisions of the Conveyance shall control as to any conflict between the Conveyance and any such special assignment forms.  To the extent any liens or security interests securing indebtedness (other than Permitted Encumbrances) encumber any of the Assets, Seller shall cause such liens and security interests to be terminated and released concurrently with the Closing.

ARTICLE VII.
TRANSFER REQUIREMENTS

Section 7.1             Compliance.  Buyer’s purchase of the Membership Interests is expressly subject to all validly existing and applicable Transfer Requirements.  Prior to the Closing Date, Seller shall initiate all procedures which in Seller’s good faith judgment are reasonably required to comply with or obtain the waiver of all Transfer Requirements set forth in Schedule 7.1 with respect to the transactions contemplated by this Agreement.  Seller shall not be obligated to pay any consideration to (or incur any cost or expense for the benefit of) the holder of any Transfer Requirement in order to obtain the waiver thereof or compliance therewith.

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Section 7.2             Certain Consents.  Seller  and Buyer will use commercially reasonable efforts after Closing to obtain all approvals and consents from, and make all filings with, any applicable party, including Governmental Authorities, that may be required under the terms of (or regulations specifically applicable to) the oil and gas leases and material contracts identified on Schedule 4.1(e) with respect to the assignment of the interests covered therein from Seller to the Company and the assignment of the Membership Interests to Buyer.  Until such approvals and consents are obtained, Seller shall continue to hold legal title to and to remain in privity under such oil and gas leases and material contracts as nominee for the Company.  In furtherance of the foregoing, and if required pursuant to Section 9.2(g), the Parties will execute an Operations and Proceeds Agreement substantially in the form attached hereto as Exhibit 7.2 (the “Operations and Proceeds Agreement”).  Seller shall not be obligated to incur any expenses in Seller’s capacity as nominee.  From and after the Closing Date, and for purposes of Article XIII, Seller and Buyer shall treat and deal with such interests as if full legal and equitable title to such interests had passed from Seller to the Company at Closing.

ARTICLE VIII.
COVENANTS OF SELLER AND BUYER

Section 8.1             Conduct of Business Pending Closing.  Subject to Section 8.2 and the constraints of applicable operating agreements and other existing agreements, from the date hereof through the Closing, except as disclosed in Schedule 8.1 or as otherwise consented to or approved by Buyer (which consent or approval shall not be unreasonably withheld or delayed), Seller covenants and agrees that:

(a)           Changes in Business.  Seller shall not:

(1)           make any material change in the conduct of its business or operations with respect to the Assets;

(2)           except in the ordinary course of business and consistent with past practices, enter into, assign, terminate or amend, in any material respect, any contract or agreement required to be disclosed pursuant to Section 4.1(j);

(3)           sell, lease or otherwise dispose of any of the Assets, except (i) oil, gas and other hydrocarbons sold or otherwise disposed of in the ordinary course of business, (ii) incident to the exploration, operation or development of the Assets in accordance with this Section 8.1 or Section 8.2, (iii) personal property or equipment which is replaced with personal property or equipment of comparable or better value and utility in connection with the maintenance, repair and operation of the Assets, and (iv) any item of personal property or equipment having a value of less than $5,000; or

(4)           materially increase or change the wages, salaries and benefits payable to the Company Employees.

(b)           Liens.  Seller shall not create any express lien or security interest on any Assets, except to the extent (i) required or permitted incident to the exploration, operation or development of the Assets pursuant to this Section 8.1 or Section 8.2, (ii) required or evidenced by

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the Hydrocarbon Interests, joint operating agreements or unitization or pooling agreements relating to the Subject Interests, or (iii) required or evidenced by any contract or agreement required to be disclosed pursuant to Section 4.1(j).

(c)           Operation of Assets.  Seller shall:

(1)           cause the Assets to be maintained and operated (and the production attributable thereto marketed, sold, exchanged, processed and otherwise handled) in the ordinary course of business in accordance with Seller’s past practices (including the repair or replacement of damaged, destroyed, obsolete, depreciated, non-working or non-economical items of equipment or other personal property without regard to the limitation of Section 8.1(c)(2) below), maintain insurance now in force with respect to the Assets, and pay or cause to be paid all costs and expenses in connection therewith promptly when due;

(2)           not commit to participate in the drilling of any new well or other new operations on the E & P Assets the projected cost of which (net to Seller’s interest and without consideration of any cost overruns) is in excess of $25,000 in any single instance, without the advance written consent of Buyer, which consent or non-consent must be given by Buyer within the lesser of (x) ten (10) days of Buyer’s receipt of the notice from Seller or (y) one-half (½) of the applicable notice period within which Seller is contractually obligated to respond to third parties to avoid a deemed election by Seller regarding such operation, as specified in Seller’s notice to Buyer requesting such consent; provided that, failure by Buyer to respond within the aforesaid applicable period shall constitute Buyer’s consent to Seller’s participation in such well or other operation;

(3)           maintain and keep the Assets in full force and effect, except where such failure is due to (i) the failure to pay a delay rental, royalty, shut in royalty or other payment by mistake or oversight (including Seller’s negligence) unless caused by Seller’s gross negligence or willful misconduct, or (ii) the failure to participate in an operation which Buyer does not timely approve; and

(4)           use Seller’s reasonable best efforts to maintain its relationships with suppliers, customers and others having material business relations with Seller with respect to the Assets so that they will be preserved for the Company on and after the Closing Date.

(d)           Contracts and Agreements.  Seller shall not:

(1)           grant or create any Preference Right or Transfer Requirement with respect to the Assets except (i) in connection with the performance by Seller of an obligation or agreement existing on the Effective Time or pursuant to this Agreement or (ii) in connection with the renewal or extension of Assets after the Effective Time if granting or creating such Preference Right or Transfer Requirement is a condition of such renewal or extension;

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(2)           enter into any oil, gas or other hydrocarbon sales, exchange, gathering, processing or transportation contract with respect to the Assets having a term in excess of one (1) year which is not terminable without penalty on notice of ninety (90) days or less;

(3)           voluntarily relinquish Seller’s position as operator with respect to any of the Assets; or

(4)           enter into, terminate early, amend or default under any Derivative without Buyer’s prior written consent.

Section 8.2             Qualifications on Conduct.

(a)           Emergencies; Legal Requirements.  Seller may take (or not take, as the case may be) any of the actions mentioned in Section 8.1 if reasonably necessary under emergency circumstances (or if required or prohibited, as the case may be, pursuant to Law) and provided Buyer is notified as soon thereafter as practicable.

(b)           Non-Operated Properties.  If Seller is not the operator of a particular portion of the Assets, the obligations of Seller in Section 8.1 with respect to such portion of the Assets, which have reference to operations or activities that pursuant to existing contracts are carried out or performed by the operator, shall be construed to require only that Seller use its reasonable best efforts (without being obligated to incur any expense or institute any cause of action) to cause the operator of such portion of the Assets to take such actions or render such performance within the constraints of the applicable operating agreements and other applicable agreements.

(c)           Certain Operations.

(1)           Should Seller not wish to pay any lease rental or other payment or participate in any reworking, deepening, drilling, completion, equipping or other operation on or with respect to any well or other Property Subdivision constituting part of the E & P Assets which may otherwise be required by Section 8.1, Seller shall give Buyer written notice thereof at least fifteen (15) days prior to the date such rental or other payment is due or, in the case of an operation, promptly after Seller receives notice of such proposed operation from the operator of such property (or if Seller is the operator, at the same time Seller gives or is required to give notice of such proposed operation to the non-operators of such property).  Seller shall not be obligated to make any such payment or to elect to participate in any such operation which Seller does not wish to make or participate in unless Seller receives from Buyer, within a reasonable time prior to the date when such payment or election is required to be made by Seller, (a) the written election and agreement of Buyer (i) to require Seller to take such action and (ii) to pay all costs and expenses of Seller with respect to such lease rental or other payment or such operation and (b) the funds necessary for such payment or operation as contained in the applicable AFE therefor or estimated by Seller.  Notwithstanding the foregoing, Seller shall not be obligated to pay any lease rental or other payment or to elect to participate in any operation if the operator of the property involved recommends that such action not be taken.  If Buyer advances any funds pursuant to this Section 8.2(c) with respect to a

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particular portion of the E & P Assets, such portion of the Assets is excluded from the Assets pursuant to the terms hereof or Closing does not occur, and such funds are not reimbursed to Buyer within thirty (30) days after the earlier of Closing or termination of this Agreement, then with respect to such particular portion of the E & P Assets, (i) Buyer shall own and be entitled to any interest of Seller that would have lapsed but for such payment or (ii) in the case of operations, Buyer shall be entitled to receive the penalty, if any, that Seller, as nonconsenting party, would have suffered under the applicable operating or other agreement with respect to such operations as if Buyer were a consenting party thereunder; in each case, subject to and after deduction of any damages or other relief to which Seller may be entitled with respect to any breach by Buyer of this Agreement.

(2)           If a notice delivered to Buyer pursuant to Section 8.1(c)(2) sets forth a recommendation that Seller participate in an operation or capital expenditure the failure in which to participate will cause the forfeiture of all or any portion of a Subject Interest (or any interest in production attributable thereto) and Buyer timely notifies Seller that it does not desire Seller to participate in same, then, on or before the Closing, Seller may elect to exclude from the Assets and reserve to Seller the Subject Interest (or the interest therein or interest in production therefrom) that would be so forfeited, together with a pro rata share of all Incidental Rights, oil, gas and other hydrocarbons and other assets attributable or appurtenant thereto (but only to the extent such Incidental Rights, oil, gas and other hydrocarbons and other assets are practicably severable from the Assets without adversely impacting in any material respect the value or operations of the remaining Assets).  If such Incidental Rights, oil, gas and other hydrocarbons and other assets are not so practicably severable from the Assets, Buyer shall execute and deliver to Seller at Closing a perpetual use agreement on commercially reasonable terms which grants to Seller and its successors and assigns the practical benefits Seller would have received from such Incidental Rights, oil, gas and other hydrocarbons and other assets had they been so excluded and reserved to Seller.  No reduction in the Purchase Price shall be made on account of any exclusion, reservation, use agreement or other matter provided for in this Section 8.2(c)(2).

Section 8.3             Assignment of Membership Interests.  Upon the terms and subject to the conditions of this Agreement, at or prior to the Closing, Seller and Buyer shall execute and deliver or cause the execution and delivery of the Assignment of Membership Interests, in substantially the form attached hereto as Exhibit 8.3 (the “Assignment”).  To the extent any liens or security interests securing indebtedness encumber any of the Membership Interests, Seller shall cause such liens and security interests to be terminated and released concurrently with the Closing.

Section 8.4             Public Announcements.  Prior to the Closing Date, without the prior written approval of the other party hereto, which approval shall not be unreasonably withheld, no party hereto will issue, or permit any agent or Affiliate of it to issue, any press releases or otherwise make, or cause any agent or Affiliate of it to make, any public statements with respect to this Agreement and the transactions contemplated hereby, except where such release or statement is deemed in good faith by the releasing party to be required by Law or under the rules

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and regulations of the NASDAQ or New York stock exchanges (or other public stock exchange of similar reputation and standing) on which the shares of such party or any of its Affiliates are listed.  In each case to which such exception applies, the releasing party will use its reasonable best efforts to provide a copy of such release or statement to the other parties prior to releasing or making the same.  Seller approves Buyer’s issuance of a press release in the form of Exhibit 8.4 immediately after the execution of this Agreement by both parties.

Section 8.5             Amendment of Schedules.  As of the Closing Date, all Schedules hereto shall be deemed amended and supplemented to include reference to any matter (a) relating to Seller or the Assets which first arises or occurs after the date of execution of this Agreement and does not result from a breach by Seller of Section 8.1, (b) which results in an adjustment to the Purchase Price pursuant to Section 3.1, or (c) which relates to a property excluded from the Assets pursuant to Section 8.2(c)(2).

Section 8.6             Parties’ Efforts and Further Assurances.  Buyer covenants and agrees to take all actions which are necessary for it to be in compliance with its warranties and representations contained in Sections 4.2(h), 4.2(i) and 4.2(j) on the Closing Date.  Each of the parties agrees to use commercially reasonable efforts (and to cause its Affiliates to use commercially reasonable efforts) to refrain from taking any action within its control which would cause a breach of any of its representations and warranties contained in Article IV or which would prevent it from delivering to the other parties the certificate which it is required to deliver pursuant to Section 9.1(b) or 9.2(b), as the case may be.  Seller and Buyer each agree that from time to time after the Closing Date, each of them will execute and deliver or cause their respective Affiliates to execute and deliver such further instruments, and take (or cause their respective Affiliates to take) such other action, as may be reasonably necessary to carry out the purposes and intents of this Agreement.

Section 8.7             Asset Records.  Within a reasonable period of time following the end of the term of the Transition Agreement, Seller shall make all Asset Records available for delivery to Buyer at Seller’s offices in Houston, Texas or at the locations of the Assets in the case of Asset Records maintained at such locations.  Buyer agrees to maintain all Asset Records until the fifth anniversary of the Closing Date (or for such longer period of time as Seller shall advise Buyer is necessary in order to have the Asset Records available with respect to open years for Tax audit purposes), or, if any of the Asset Records pertain to any claim or dispute pending on the fifth anniversary of the Closing Date, Buyer shall maintain any of the Asset Records designated by Seller until such claim or dispute is finally resolved and the time for all appeals has been exhausted.  Buyer shall provide Seller and its representatives reasonable access to and the right to copy the Asset Records for the purposes of (i) preparing and delivering any accounting provided for under this Agreement and adjusting, prorating and settling the charges and credits provided for in this Agreement, (ii) complying with any Law affecting Seller’s interest in the Assets prior to the Closing Date, (iii) conducting and preparing any audit of the books and records of any third party relating to Seller’s interest in the Assets prior to the Closing Date, or responding to any audit conducted or prepared by such third parties, (iv) preparing Tax returns, (v) responding to or disputing any Tax audit or (vi) asserting, defending or otherwise dealing with any claim or dispute under this Agreement or with respect to the Assets.  In no event shall Buyer or any of its Affiliates destroy any Asset Records without giving Seller sixty (60) days’

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advance written notice thereof and the opportunity, at Seller’s expense, to obtain such Asset Records prior to their destruction.

Section 8.8             Recording.  Immediately following the Closing, Buyer, at its cost and expense, shall record the Conveyance and all other instruments of assignment in the appropriate governmental offices of the jurisdictions in which the Assets are located.  Promptly following such recording, Buyer shall advise Seller in writing of the pertinent recording data.

Section 8.9             Casualty and Condemnation.  If after the Effective Time and prior to the Closing any part of the Assets shall be destroyed or damaged by fire or other casualty or if any part of the Assets shall be taken in condemnation or under the right of eminent domain or if proceedings for such purposes shall be pending or threatened, this Agreement shall remain in full force and effect notwithstanding any such destruction, taking or proceeding or the threat thereof.  To the extent insurance proceeds, condemnation awards or other payments are not committed, used or applied by Seller prior to the Closing Date to repair, restore or replace such damaged, destroyed or taken Assets, Seller shall at the Closing (i) assign to the Company Seller’s right to receive all insurance or condemnation proceeds, awards or payments owed to Seller by reason of such destruction or taking, less any reasonable costs and expenses incurred by Seller in collecting same or in connection with such proceedings or the threat thereof, and (ii) pay to the Company all insurance or condemnation proceeds, awards or payments theretofore paid to Seller by reason of such destruction or taking, less any reasonable costs and expenses incurred by Seller in collecting same or in connection with such proceedings or the threat thereof.  Notwithstanding the foregoing, any insurance or condemnation proceeds, awards or payments (or any rights thereto) by reason of such destruction or taking which are held by or owed to Seller for the account or benefit of any third party joint interest owners shall not be paid or assigned by Seller to the Company pursuant to this Section and shall instead be transferred to the successor operator or other Person responsible therefor pursuant to the terms of the applicable operating or other agreement.

Section 8.10           Transition Agreement.  At Closing, Seller and the Company shall execute and deliver a Transition Services Agreement (the “Transition Agreement”) providing for the performance by Seller or its Affiliates of certain transition services with respect to the operation of the Assets after Closing in substantially the form attached hereto as Exhibit 8.10.

Section 8.11           Employees.

(a)           Company Employees.  “Company Employees” shall mean the employees of Seller listed on Schedule 8.11(a) attached hereto.  Effective as of 12:01 a.m. on the day immediately following the date of termination of the Transition Agreement (the Transition Termination Date”), the employment of the Company Employees with Seller shall terminate. Buyer or another member of the controlled group (within the meaning of Section 414(b), (c), (m) or (o) of the Code) of which Buyer is a member (the “Buyer Controlled Group”) shall have the right commencing on the Transition Termination Date to make a comparable offer of employment to any or all of the Company Employees in its sole discretion.  A comparable offer of employment to a Company Employee shall be an offer of employment (a) at the Company Employee’s current base salary with Seller as of the date of this Agreement (as set out on Schedule 8.11(a)); (b) with substantially the

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same duties and responsibilities; (c) at the same location (or such other worksite as the Company Employee may agree to), and (d) made only after prior written notice to Seller of the name of each such Company Employee and the terms of such offer.

(b)           Continuing Employees.  Company Employees who accept an offer of employment and become employed by a member of the Buyer Controlled Group on such day following the Transition Termination Date, are hereinafter referred to as the “Continuing Employees.”  The effective date of employment of the Continuing Employee with the employing member of the Buyer Controlled Group shall be such day following the Transition Termination Date.  Nothing contained herein shall confer upon any Continuing Employee any right with respect to continuance of employment by Buyer or any other member of the Buyer Controlled Group, nor shall anything herein interfere in any way with the right of an employing member of the Buyer Controlled Group to terminate the employment of a Continuing Employee at any time with or without cause.  Seller shall remain solely responsible for all its obligations with respect to Company Employees who do not become Continuing Employees.

(c)           Savings Plans.  To the extent a Continuing Employee has an outstanding plan loan from a Seller 401(k) plan, such Continuing Employee shall be entitled to rollover such loan to a Buyer Controlled Group 401(k) plan to the extent permitted by the Code.

(d)           Post-Closing Benefits for Continuing Employees.

(i)            Buyer shall, or shall cause another member of the Buyer Controlled Group to, provide coverage and benefits for each Continuing Employee in each employee benefit plan, program, practice and policy (within the meaning of Section 3(3) of ERISA) and any other similar arrangement of the Buyer Controlled Group member employing the Continuing Employee, on at least as favorable a basis as Buyer or such other member of the Buyer Controlled Group provides to its other employees similarly situated.  Each Continuing Employee shall be given credit for eligibility and vesting under each employee benefit plan, program, practice and policy of the Buyer Controlled Group employing member for all service prior to the day following the Transition Termination Date, with Seller, or any predecessor employer (to the extent such credit was given by Seller).  Further, no preexisting condition, exclusion or limitation shall be applicable with respect to the participation of any Continuing Employee in any medical benefit plan of any member of the Buyer Controlled Group and each Continuing Employee shall be given credit under each Buyer Controlled Group medical benefit plan for all deductibles such employee has paid under the Seller group medical plan.

(ii)           Each Buyer Controlled Group employing member shall calculate a Continuing Employee’s vacation entitlement by crediting each such Continuing Employee with years of service and seniority with Seller as well as all unused vacation days previously accrued with Seller.  Seller shall also credit the amount of accrued vacation of such Continuing Employee as of the day following the Transition Termination Date, in determining vacation entitlement for the current year.

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Section 8.12           Joint Development and AMI Agreement.  Upon the terms and subject to the conditions of this Agreement, at or prior to Closing, Seller and the Company shall execute and deliver or cause the execution and delivery of a Joint Development and Area of Mutual Interest Agreement, in substantially the form attached hereto as Exhibit 8.12 (the “Joint Development and AMI Agreement”).

Section 8.13           3-D Seismic Data License Agreement.  Upon the terms and subject to the conditions of this Agreement, at or prior to Closing, Seller and the Company shall execute and deliver or cause the execution and delivery of a 3-D Seismic Data License Agreement, in substantially the form attached hereto as Exhibit 8.13 (the “Data License Agreement”).

Section 8.14           Cooperation in Connection with Preparation and Audit of Financial Statements.

(a)           Seller shall, and shall use its good faith efforts to cause its Affiliates and their respective officers, employees, independent auditor and other advisors (collectively, “Representatives”) to, cooperate with Buyer, its Affiliates and their Representatives in connection with (i) the preparation and audit of any financial statements relating to the Assets and the operations and business conducted by Seller in connection with the Assets (the “Business and Assets”) that may be required to be filed by Buyer or its Affiliates with the Securities and Exchange Commission (the “SEC”) pursuant to the Securities Act of 1933, as amended (the “Act”), and the rules and regulations thereunder, or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder, or to be filed with, or provided to, any other regulatory authority or pursuant to any other applicable law, and (ii) the preparation and audit of any financial statements relating to the Business and Assets that may be required in connection with any financing transaction by Buyer and its Affiliates.

(b)           In connection with the preparation and audit of any financial statements as contemplated in clause (a) above, Seller agrees to make available to Buyer and its Affiliates and their Representatives copies of (i) any and all books, records, information and documents that are attributable to the Business and Assets that are in Seller’s or its Affiliates’ possession as may be required by Buyer and its Affiliates in order for Buyer and its Affiliates to prepare such financial statements in accordance with the requirements of Regulation S-X under the Securities Act, and (ii) any documentation attributable to the Business and Assets that is in Seller’s or its Affiliates’ possession as may be required to complete any audit associated with such financial statements.

(c)           Without limiting the generality of the foregoing, Seller shall, and shall use its good faith efforts to cause its Affiliates and their respective Representatives to, cooperate with the independent auditor of Buyer and its Affiliates in connection with any audit of any financial statements relating to the Business and Assets that Buyer or any of its Affiliates requires in connection with such audit, including without limitation, to execute any representation letters for pre-Closing periods that may be required to be delivered in connection with such audit that are reasonably satisfactory to Seller.

(d)           For a period of five (5) years following the Closing, Seller shall, and shall cause it Affiliates to, retain all books, records, information and documents in its or its Affiliates’

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possession that may be necessary in connection with the preparation and audit of financial statements with respect to the Business and Assets.

(e)           Buyer shall reimburse Seller for all costs and expenses incurred by Seller or its Affiliates, including fees and expenses of third Persons providing accounting or other services to Seller or its Affiliates, in complying with the provisions of this Section 8.14.

ARTICLE IX.
CLOSING CONDITIONS

Section 9.1             Seller’s Closing Conditions.  The obligation of Seller to proceed with the Closing contemplated hereby is subject, at the option of Seller, to the satisfaction on or prior to the Closing Date of all of the following conditions:

(a)   Representations, Warranties and Covenants.  The (i) representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects (and in all respects, in the case of representations and warranties which are qualified by the requirement of a material adverse effect) on and as of the Closing Date, and (ii) covenants and agreements of Buyer to be performed on or before the Closing Date in accordance with this Agreement shall have been duly performed in all material respects.

(b)   Officer’s Certificate.  Seller shall have received a certificate dated as of the Closing Date, executed on behalf of Buyer by a duly authorized officer of the general partner of Buyer, to the effect that the conditions set forth in subsection (a) of this Section 9.1 have been satisfied.

(c)   Closing Documents.  On or prior to the Closing Date, Buyer shall have delivered, or be standing ready to deliver at Closing, all agreements, instruments and other documents required to be delivered by Buyer pursuant to Section 10.3.

(d)   No Action.  On the Closing Date, no suit, action or other proceeding (excluding any such matter initiated by Seller or any of its Affiliates) shall be pending or threatened before any court or governmental agency or body of competent jurisdiction seeking to enjoin or restrain the consummation of the Closing or recover damages from Seller or any Affiliate of Seller resulting therefrom.

(e)   Opinion of Counsel.  Buyer shall have delivered to Seller the written opinion, dated as of the Closing Date, of Vinson & Elkins, L.L.P., counsel to Buyer, substantially in the form attached hereto as Exhibit 9.1(e).

Section 9.2             Buyer’s Closing Conditions.  The obligation of Buyer to proceed with the Closing contemplated hereby is subject, at the option of Buyer, to the satisfaction on or prior to the Closing Date of all of the following conditions:

(a)   Representations, Warranties and Covenants.  The (i) representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects (and in all respects, in the case of representations and warranties which are qualified by materiality

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or the requirement of a Material Adverse Effect) on and as of the Closing Date as though made as of the Closing Date with the Schedules to this Agreement amended and supplemented in accordance with Section 8.5, and (ii) covenants and agreements of Seller to be performed on or before the Closing Date in accordance with this Agreement shall have been duly performed in all material respects.

(b)   Officer’s Certificate.  Buyer shall have received a certificate dated as of the Closing Date, executed on behalf of Seller by a duly authorized officer of Seller, to the effect that the conditions set forth in subsection (a) of this Section 9.2 have been satisfied.

(c)   Closing Documents.  On or prior to the Closing Date, Seller shall have delivered, or be standing ready to deliver at the Closing, all agreements, instruments and other documents required to be delivered by Seller pursuant to Section 10.2.

(d)   No Action.  On the Closing Date, no suit, action or other proceeding (excluding any such matter initiated by Buyer or any of its Affiliates) shall be pending or threatened before any court or governmental agency or body of competent jurisdiction seeking to enjoin or restrain the consummation of the Closing or recover damages from Buyer or any Affiliate of Buyer resulting therefrom.

(e)   Opinion of Counsel.  Seller shall have delivered to Buyer the written opinion, dated as of the Closing Date, of Fulbright & Jaworski L.L.P., counsel to Seller, substantially in the form attached hereto as Exhibit 9.2(e).

(f)    Derivative Transfer.  All documentation in a form reasonably acceptable to Buyer required to fully transfer to the Company, on the same terms and conditions, the Derivatives, including (i) Crude Oil Purchase Contract (No. 6340-1003) dated February 24, 2006, by and between Calumet Florida Division of Plains Resources and Plains Marketing, L.P., as amended by First Amendment dated May 15, 2006, and Third Amendment dated January 18, 2007, (ii) Crude Oil Marketing Agreement dated November 17, 1998, by and among Plains Resources, Inc., Calumet Florida, Inc., Plains Illinois, Stocker Resources and Plains Marketing, as amended by the Amended and Restated Crude Oil Marketing Agreement dated July 23, 2004, and (iii) Crude Oil Purchase Contract (No. 6340-1004) dated May 8, 2006, by and between Calumet Florida Division of Plains Resources and Plains Marketing, L.P., as amended by First Amendment dated January 18, 2007.

(g)   Other Consents.  All consents to assign or transfer required pursuant to the terms of the oil and gas lease and material contracts set forth in Schedule 4.1(e) shall have been obtained, provided, however, that in the event that such consents have not been fully obtained as of Closing, the Parties shall enter into the Operations and Proceeds Agreement, whereupon this condition to Closing shall be deemed waived by Buyer.

Section 9.3             Failure to Disclose.  The breach by Buyer of its obligation to give notice to Seller under Section 4.2(j) shall not constitute a failure of the conditions to Closing under Section 9.1.  From and after Closing, Seller shall not have any obligation or liability under this Agreement or otherwise in connection with the transaction contemplated in this Agreement for any breach of a representation or warranty by Seller prior to Closing by reason of any fact or

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facts of which Buyer had knowledge prior to Closing if and to the extent Buyer breached its obligation to give notice of such fact or facts to Seller pursuant to Section 4.2(j).  From and after Closing, Buyer shall not have any obligation or liability under this Agreement or otherwise in connection with the transaction contemplated in this Agreement for any breach of a representation or warranty by Buyer prior to Closing by reason of any fact or facts of which Seller had knowledge prior to Closing if and to the extent Seller breached its obligation to give notice of such fact or facts to Buyer pursuant to Section 4.l(u).

ARTICLE X.
CLOSING

Section 10.1           Closing.  The Closing shall be held on the Closing Date at 10:00 a.m., Houston time, at the offices of Fulbright & Jaworski L.L.P., Fulbright Tower, 1301 McKinney, Suite 5100, Houston, Texas, or at such other time or place as Seller and Buyer may otherwise agree in writing.

Section 10.2           Seller’s Closing Obligations.  At Closing, Seller shall execute and deliver, or cause to be executed and delivered, to Buyer the following:

(a)           The Assignment contemplated by Section 8.3, the Joint Development and AMI Agreement contemplated by Section 8.12, the Transition Agreement contemplated by Section 8.10, and the Data License Agreement contemplated by Section 8.13;

(b)           The officer’s certificate referred to in Section 9.2(b);

(c)           The legal opinion referred to in Section 9.2(e);

(d)           Letters in lieu of division and transfer orders executed by Seller relating to the Subject Interests in form reasonably necessary to reflect the conveyances contemplated hereby;

(e)           A non-foreign affidavit, as such affidavit is referred to in Section 1445(b)(2) of the Code, in form attached hereto as Exhibit 10.2(e), dated as of the Closing Date; and

(f)            Any other agreements, instruments and documents which are required by other terms of this Agreement to be executed and/or delivered by Seller to Buyer at the Closing.

Section 10.3           Buyer’s Closing Obligations.  At Closing, Buyer shall (i) deliver, or cause to be delivered, the Initial Adjusted Purchase Price to Seller in immediately available funds to the bank account as provided in Section 3.2 and (ii) execute and deliver, or cause to be executed and delivered, to Seller the following:

(a)           The officer’s certificate of Buyer referred to in Section 9.1(b);

(b)           The legal opinion referred to in Section 9.1(e);

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(c)           The Joint Development and AMI Agreement contemplated by Section 8.12, the Transition Agreement contemplated by Section 8.10, and the Data License Agreement contemplated by Section 8.13;

(d)           A parent guarantee pursuant to which Buyer shall guarantee the obligations of the Company to Seller under the Conveyance, the Joint Development and AMI Agreement, the Transition Agreement and the Data License Agreement, in substantially the form attached hereto as Exhibit 10.3(d); and

(e)           Any other agreements, instruments and documents which are required by other terms of this Agreement to be executed and/or delivered by Buyer to Seller at the Closing.

ARTICLE XI.
EFFECT OF CLOSING

Section 11.1           Revenues.  After Closing, all proceeds, accounts receivable, notes receivable, income, revenues, monies and other items included in or attributable to the Excluded Assets and all other Excluded Assets shall belong to and be paid over to Seller, and all proceeds, accounts receivable, notes receivable, income, revenues, monies and other items included in or attributable to the Assets with respect to any period of time after the Effective Time shall belong to and be paid over to the Company, except that, to the extent any such items are credited to the Company in calculating the Initial Adjusted Purchase Price, as adjusted pursuant to Section 3.4, the same shall belong to and be paid over to Seller.

Section 11.2           Expenses.  After Closing, all accounts payable and other costs and expenses with respect to the Assets for which Seller is given credit in the determination of Net Cash Flow pursuant to Section 3.3, as adjusted pursuant to Section 3.4, shall be borne by Seller.  Ad valorem taxes related to the Assets and not accounted for in the determination of Net Cash Flow will be prorated as of the Effective Time.  For any such ad valorem taxes for a period which the Effective Time splits and which are paid by Seller, Buyer shall reimburse Seller for the portion thereof equal to the percentage of such period represented by the portion of such period beginning at the Effective Time.  For any such ad valorem taxes for a period which the Effective Time splits and which are not paid by Seller, Buyer shall pay such taxes and Seller shall reimburse Buyer for a percentage of such taxes equal to the portion of such period which ends on the day immediately preceding the Effective Time.

Section 11.3           Payments and Obligations.  If monies are received by any party hereto which, under the terms of this Article XI, belong to another party, the same shall immediately be paid over to the proper party.  If an invoice or other evidence of an obligation is received which under the terms of this Article XI is partially the obligation of Seller and partially the obligation of the Company, then the parties shall consult each other and each shall promptly pay its portion of such obligation to the obligee.

Section 11.4           Survival.  Except as provided in this Section 11.4, no representations, warranties, covenants and agreements made herein shall survive the Closing.  Each representation, warranty, covenant and agreement made herein shall terminate and cease to be of

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further force and effect as of the Closing or such later date after Closing as is expressly stipulated in this Section 11.4 for the survival thereof.  Following the Closing or such later date stipulated in this Section 11.4 for the survival thereof, such representation, warranty, covenant or agreement shall not form the basis for or give rise to any claim, demand, cause of action, counterclaim, defense, damage, indemnity, obligation or liability which is asserted, claimed, made or filed following the Closing or such later date stipulated for survival.  It is expressly agreed that the terms and provisions of:

(a)   Sections 3.4, 8.1 and 8.2 and Article IV (other than Sections 4.1(b), 4.1(c), 4.1(w), 4.2(b) and 4.2(c)) shall survive the Closing for a period of eight (8) months from the Closing Date, and

(b)   Sections 4.1(b), 4.1(c), 4.1(w), 4.2(b), 4.2(c), 5.2, 5.3, 7.2, 8.5, 8.6, 8.7, 8.8, 8.11, 8.14, and 9.3, Articles XI, XII, XIII, XIV and XV and Buyer’s indemnity and hold harmless of the Seller Indemnified Persons under Section 5.1 shall survive the Closing indefinitely or for such shorter period of time as may be stipulated in such provisions.

Any claim, demand, cause of action, counterclaim, defense, damage, indemnity, obligation or liability which is asserted, claimed or made in writing to the other Party within the applicable survival period shall be deemed timely made under this Agreement.  In addition, the definitions set forth in Appendix A to this Agreement or in any other provision of this Agreement which are used in the representations, warranties, covenants and agreements which survive the Closing pursuant to this Section 11.4 shall survive the Closing to the extent necessary to give operative effect to such surviving representations, warranties, covenants and agreements.

Section 11.5           Certain Post-Closing Obligations.  Within twenty (20) days after the Closing, Buyer shall (i) obtain and file with the appropriate Governmental Authorities replacement surety bonds and/or guarantees for all Assets for which Seller has surety bonds and/or guarantees outstanding (as reflected in a list of such surety bonds and/or guarantees to be provided to Buyer by Seller), (ii) obtain the full and complete release of Seller from (or the full and complete cancellation of) all such bonds and/or guarantees insofar as they relate to the Assets, and (iii) furnish Seller appropriate evidence of Buyer’s compliance with the requirements of clauses (i) and (ii), including copies of such replacement bonds and/or guarantees and such releases and/or cancellations.  Within a reasonable period of time following the Closing, Buyer shall remove or paint over, as appropriate, any logo, service mark, trade name or trademark which constitutes an Excluded Asset and is on the Assets.

ARTICLE XII.
LIMITATIONS

Section 12.1           Disclaimer of Warranties.  NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF THIS AGREEMENT, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT SELLER IS NOT MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, BEYOND THOSE REPRESENTATIONS OR WARRANTIES EXPRESSLY GIVEN IN THIS AGREEMENT AND THE SPECIAL

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WARRANTY OF TITLE SET FORTH IN THE CONVEYANCE, AND IT IS UNDERSTOOD THAT, WITHOUT LIMITING SUCH EXPRESS REPRESENTATIONS AND WARRANTIES AND SPECIAL WARRANTY OF TITLE, BUYER TAKES THE COMPANY, THE MEMBERSHIP INTERESTS AND THE ASSETS AS IS AND WHERE IS AND WITH ALL FAULTS.  WITHOUT LIMITING THE GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE, SELLER HEREBY (I) EXPRESSLY DISCLAIMS AND NEGATES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE, RELATING TO (A) THE CONDITION OF THE ASSETS, THE COMPANY AND THE MEMBERSHIP INTERESTS (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, OR THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS IN OR ON, OR DISPOSED OF OR DISCHARGED FROM, THE ASSETS) OR (B) ANY INFRINGEMENT BY SELLER OR ANY OF ITS AFFILIATES OF ANY PATENT OR PROPRIETARY RIGHT OF ANY THIRD PARTY; AND (II) NEGATES ANY RIGHTS OF BUYER UNDER STATUTES TO CLAIM DIMINUTION OF CONSIDERATION AND ANY CLAIMS BY BUYER FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN, IT BEING THE INTENTION OF SELLER AND BUYER THAT THE ASSETS, THE COMPANY AND THE MEMBERSHIP INTERESTS ARE TO BE ACCEPTED BY BUYER IN THEIR PRESENT CONDITION AND STATE OF REPAIR.

Section 12.2           Texas Deceptive Trade Practices Act Waiver.  BUYER (A) REPRESENTS AND WARRANTS TO SELLER THAT IT (I) IS ACQUIRING THE COMPANY, THE MEMBERSHIP INTERESTS AND THE ASSETS FOR COMMERCIAL OR BUSINESS USE, (II) IS REPRESENTED BY LEGAL COUNSEL, (III) ACKNOWLEDGES THE CONSIDERATION PAID OR TO BE PAID FOR THE ASSETS WILL EXCEED $500,000, AND (IV) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS SUCH THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION WITH RESPECT TO THE SELLER; AND (B) HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY AND ALL RIGHTS OR REMEDIES IT MAY HAVE UNDER THE DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT OF THE STATE OF TEXAS, TEX. BUS. & COM. CODE § 17.41 ET SEQ. TO THE MAXIMUM EXTENT IT CAN DO SO UNDER APPLICABLE LAW, IF SUCH ACT WOULD FOR ANY REASON BE DEEMED APPLICABLE TO THE TRANSACTIONS CONTEMPLATED HEREBY.

WAIVER OF CONSUMER RIGHTS

BUYER WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.  AFTER CONSULTATION WITH AN ATTORNEY OF BUYER’S OWN SELECTION, BUYER VOLUNTARILY CONSENTS TO THIS WAIVER.

FURTHERMORE, WITH RESPECT TO ASSETS WHICH ARE LOCATED IN A STATE OR SUBJECT TO A JURISDICTION OTHER THAN TEXAS, BUYER WAIVES ANY COMPARABLE PROVISION OF THE LAW OF THE STATE OR OTHER JURISDICTION WHERE SUCH ASSETS ARE LOCATED OR TO WHICH SUCH ASSETS ARE SUBJECT.

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Section 12.3           Damages.  NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF THIS AGREEMENT, SELLER AND BUYER AGREE THAT, EXCEPT FOR THE LIQUIDATED DAMAGES SPECIFICALLY PROVIDED FOR IN SECTIONS 13.4 AND 14.2, THE RECOVERY BY EITHER PARTY HERETO OF ANY DAMAGES SUFFERED OR INCURRED BY IT AS A RESULT OF ANY BREACH BY THE OTHER PARTY OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS UNDER THIS AGREEMENT SHALL BE LIMITED TO THE ACTUAL DAMAGES SUFFERED OR INCURRED BY THE NON-BREACHING PARTY (AND THE INDEMNIFIED PERSONS TO WHICH SUCH OBLIGATIONS MAY EXTEND UNDER THE TERMS HEREOF) AS A RESULT OF THE BREACH BY THE BREACHING PARTY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS HEREUNDER AND IN NO EVENT SHALL THE BREACHING PARTY BE LIABLE TO THE NON-BREACHING PARTY OR ANY INDEMNIFIED PERSON FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT OF LOST PROFITS OR OPPORTUNITIES, BUSINESS INTERRUPTION OR LOST OR DELAYED PRODUCTION) SUFFERED OR INCURRED BY THE NON-BREACHING PARTY OR ANY INDEMNIFIED PERSON AS A RESULT OF THE BREACH BY THE BREACHING PARTY OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS HEREUNDER.  For purposes of the foregoing, actual damages may, however, include indirect, consequential, special, exemplary or punitive damages to the extent (i) the injuries or losses resulting in or giving rise to such damages are incurred or suffered by a Person which is not a Seller Indemnified Person, a Buyer Indemnified Person or an Affiliate of any of the foregoing and (ii) such damages are recovered against an Indemnified Person by a Person which is not a Seller Indemnified Person, a Buyer Indemnified Person or an Affiliate of any of the foregoing.  This Section 12.3 shall operate only to limit a party’s liability and shall not operate to increase or expand any contractual obligation of a party hereunder or cause any contractual obligation of a party hereunder to survive longer than provided in Section 11.4.

Section 12.4           Plugging and Abandonment Obligations.  NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF THIS AGREEMENT, IT IS EXPRESSLY AGREED FOR ALL PURPOSES OF THIS AGREEMENT THAT (I) THE PLUGGING AND ABANDONMENT OBLIGATIONS CONSTITUTE COMPANY LIABILITIES, UNLESS AND TO THE EXTENT SELLER IS REQUIRED TO INDEMNIFY BUYER FOR THE SAME PURSUANT TO SECTION 13.2, (II) THE PLUGGING AND ABANDONMENT OBLIGATIONS SHALL NOT CONSTITUTE ENVIRONMENTAL LIABILITIES OR ENVIRONMENTAL MATTERS, (III) EXCEPT FOR THE REPRESENTATION SET FORTH IN SECTION 4.1(t), SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO THE PLUGGING AND ABANDONMENT OBLIGATIONS, AND (IV) SELLER SHALL HAVE NO LIABILITIES OR OBLIGATIONS WITH RESPECT TO PLUGGING AND ABANDONMENT OBLIGATIONS EXCEPT TO THE EXTENT SUCH OBLIGATIONS RELATE TO PROPERTY LOCATED ON THE EXCLUDED ASSETS AND UNLESS AND TO THE EXTENT SELLER IS REQUIRED TO INDEMNIFY BUYER FOR THE SAME PURSUANT TO SECTION 13.2.

Section 12.5           Environmental Release.  From and after Closing, the Buyer Indemnified Persons shall have no rights to recovery or indemnification for Environmental Liabilities or any Environmental Matters relating to the Assets under this Agreement or Law, and all rights or remedies which any Buyer Indemnified Person may have at or under Law with respect to any Environmental Liabilities or Environmental Matters are expressly waived.  FROM AND AFTER

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CLOSING, ALL BUYER INDEMNIFIED PERSONS DO HEREBY AGREE, WARRANT AND COVENANT TO RELEASE, ACQUIT AND FOREVER DISCHARGE ALL SELLER INDEMNIFIED PERSONS FROM ANY AND ALL CLAIMS, DEMANDS AND CAUSES OF ACTION OF WHATSOEVER NATURE, INCLUDING WITHOUT LIMITATION ALL CLAIMS, DEMANDS AND CAUSES OF ACTION FOR CONTRIBUTION AND INDEMNITY UNDER STATUTE, INCLUDING THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT, OR COMMON LAW, WHICH COULD BE ASSERTED NOW OR IN THE FUTURE AND THAT RELATE TO OR IN ANY WAY ARISE OUT OF ENVIRONMENTAL LIABILITIES OR ENVIRONMENTAL MATTERS RELATING TO THE ASSETS.  FROM AND AFTER CLOSING, ALL BUYER INDEMNIFIED PERSONS WARRANT, AGREE AND COVENANT NOT TO SUE OR INSTITUTE ARBITRATION AGAINST ANY SELLER INDEMNIFIED PERSON UPON ANY CLAIM, DEMAND OR CAUSE OF ACTION FOR INDEMNITY AND CONTRIBUTION THAT HAVE BEEN ASSERTED OR COULD BE ASSERTED FOR ANY ENVIRONMENTAL LIABILITIES OR ENVIRONMENTAL MATTERS RELATING TO THE ASSETS.

ARTICLE XIII.
INDEMNIFICATION

Section 13.1           Indemnification By Buyer.  From and after the Closing, the Company shall assume, pay, perform, fulfill and discharge all Company Liabilities, and Buyer and the Company, jointly and severally, shall indemnify and hold harmless Seller, Seller’s Affiliates, each of Seller’s and its Affiliates’ respective past, present and future directors, officers, employees, consultants and agents, and each of the directors, officers, heirs, executors, successors and assigns of any of the foregoing (collectively, the “Seller Indemnified Persons”) from and against any and all (i) Company Liabilities incurred by or asserted against any of the Seller Indemnified Persons, INCLUDING, WITHOUT LIMITATION, ANY COMPANY LIABILITY BASED ON NEGLIGENCE, GROSS NEGLIGENCE OR STRICT LIABILITY OF THE SELLER INDEMNIFIED PERSON OR ON ANY OTHER THEORY OF LIABILITY, WHETHER IN LAW (WHETHER COMMON OR STATUTORY) OR EQUITY and (ii) subject to the limitations of Section 11.4 and Article XII, any Covered Liability resulting from any breach or nonfulfillment of any representation, warranty, covenant or agreement on the part of Buyer which is expressly set forth in this Agreement, including Buyer’s agreements to pay Taxes, fees, costs, expenses and other amounts as provided in Section 15.4.

Section 13.2           Indemnification By Seller.  Subject to the provisions of Section 13.4, from and after the Closing, Seller shall indemnify and hold harmless Buyer, the Company, each of their respective present and future partners, directors, officers, employees, consultants and agents, and each of the directors, officers, heirs, executors, successors and assigns of any of the foregoing (collectively, the “Buyer Indemnified Persons”) from and against any and all (i) Excluded Liabilities incurred by or asserted against any of the Buyer Indemnified Persons, INCLUDING, WITHOUT LIMITATION, ANY EXCLUDED LIABILITY BASED ON NEGLIGENCE, GROSS NEGLIGENCE OR STRICT LIABILITY OF THE BUYER INDEMNIFIED PERSON OR ON ANY OTHER THEORY OF LIABILITY, WHETHER IN LAW (WHETHER COMMON OR STATUTORY) OR EQUITY and (ii) subject to the limitations of Section 11.4 and Article XII, any Covered Liability resulting from any breach or nonfulfillment of any representation, warranty, covenant or agreement on the part of Seller which is expressly set forth in this Agreement.

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Section 13.3           Indemnification and Defense Procedures.  A Person which is entitled to be indemnified under Section 5.1, 13.1 or 13.2 is herein referred to as an “Indemnified Person” and the party which is obligated to indemnify an Indemnified Person under Section 5.1, 13.1 or 13.2 is herein referred to as the “Indemnifying Party” with respect to the matter for which it is obligated to indemnify such Indemnified Person.  All claims for indemnification under Sections 5.1, 13.1 and 13.2 shall be asserted and resolved as follows:

(a)           If a third party claim for which an Indemnified Person is entitled to indemnity under Sections 5.1, 13.1 and/or 13.2 (an “Indemnified Claim”) is made against an Indemnified Person, and if Buyer or Seller intends to seek indemnity with respect thereto by or from an Indemnifying Party pursuant to Sections 5.1, 13.1 and/or 13.2, then the party electing to seek indemnity on behalf of such Indemnified Person shall promptly transmit to the Indemnifying Party a written notice (“Claim Notice”) (i) notifying such Indemnifying Party of such Indemnified Claim and requesting indemnity on behalf of such Indemnified Person with respect to such Indemnified Claim under Sections 5.1, 13.1 and/or 13.2, as the case may be, (ii) setting forth the full name, address for all notices and the authorized representatives of such Indemnified Person with respect to such Indemnified Claim, and (iii) describing in reasonable detail the nature of the Indemnified Claim, including a copy of all papers served with respect to such Indemnified Claim (if any) and the basis of such request for indemnification under Sections 5.1, 13.1 and/or 13.2, as the case may be.  Failure to provide such Claim Notice promptly shall not affect the right of the Indemnified Person to indemnification hereunder except to the extent the Indemnifying Party is prejudiced thereby; provided that, the Indemnifying Party shall not be obligated to defend, indemnify or otherwise hold harmless an Indemnified Person with respect to a third party claim until a Claim Notice meeting the foregoing requirements is furnished to the Indemnifying Party by the party seeking indemnity hereunder.  Within 30 days after receipt of any Claim Notice (the “Election Period”), the Indemnifying Party shall notify the party who sent the Claim Notice (A) whether the Indemnifying Party disputes its potential liability to indemnify the Indemnified Person under Sections 5.1, 13.1 and/or 13.2, as the case may be, with respect to such third party claim and (B) whether the Indemnifying Party desires to defend the Indemnified Person against such third party claim; provided that, if the Indemnifying Party fails to so notify the Indemnified Person during the Election Period, the Indemnifying Party shall be deemed to have elected to dispute such liability and not to defend against such third party claim.

(b)           If the Indemnifying Party notifies the party who sent the Claim Notice within the Election Period that the Indemnifying Party (i) does not dispute its liability to indemnify the Indemnified Person under Sections 5.1, 13.1 and/or 13.2, as the case may be (or reserves the right to dispute whether such claim is an Indemnified Claim under Sections 5.1, 13.1 and/or 13.2) and (ii) elects to assume the defense of such Indemnified Person with respect to such third party claim, then the Indemnifying Party shall have the right to defend, at its sole cost and expense, such third party claim by all appropriate proceedings, which proceedings shall be prosecuted diligently by the Indemnifying Party to a final conclusion or settled at the discretion of the Indemnifying Party in accordance with this Section 13.3(b).  If an Indemnifying Party elects pursuant to the foregoing to assume the defense of an Indemnified Person with respect to a third party claim which is subsequently determined not to be an Indemnified Claim, the Indemnifying Party shall not be entitled to recover from the Indemnified Person the costs and expenses incurred by the Indemnifying Party in providing such defense.  The Indemnifying Party

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shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided that the Indemnifying Party shall not enter into any settlement agreement (or settle or compromise any such third party claim in a manner) which provides for or results in any payment by or liability of the Indemnified Person of or for any damages or other amount, any lien, charge or encumbrance on any property of the Indemnified Person, any finding of responsibility or liability on the part of the Indemnified Person or any sanction or restriction upon the conduct of any business by the Indemnified Person without the Indemnified Person’s express written consent, which consent shall not be unreasonably withheld.  The Indemnified Person is hereby authorized, at the sole cost and expense of the Indemnifying Party (but only if the Indemnified Person is actually entitled to indemnification hereunder), to file, during the Election Period, any motion, answer or other pleadings which the Indemnified Person shall deem necessary or appropriate to protect its interests or those of the Indemnifying Party and not reasonably expected to be prejudicial to the Indemnifying Party.  If requested by the Indemnifying Party, the Indemnified Person agrees, at the sole cost and expense of the Indemnifying Party, to cooperate with the Indemnifying Party and its counsel in contesting any such third party claim which the Indemnifying Party elects to contest, including the making of any related counterclaim or cross-complaint against any Person (other than a Buyer Indemnified Person, if the Indemnified Person is a Buyer Indemnified Person, or a Seller Indemnified Person, if the Indemnified Person is a Seller Indemnified Person).  The Indemnified Person may participate in, but not control, any defense or settlement of any third party claim controlled by the Indemnifying Party pursuant to this Section 13.3(b), and the Indemnified Person shall bear its own costs and expenses with respect to such participation.  The prosecution of the defense of a third party claim with reasonable diligence shall include the taking of such action (including the posting of a bond, deposit or other security) as may be necessary to prevent any action to foreclose a lien against or attachment of the property of the Indemnified Person for payment of such third party claim.

(c)           If the Indemnifying Party (i) fails to notify the party who sent the Claim Notice within the Election Period that the Indemnifying Party elects to defend the Indemnified Person pursuant to Section 13.3(b) or (ii) elects to defend the Indemnified Person pursuant to Section 13.3(b) but fails to prosecute the defense of (or to settle) the third party claim with reasonable diligence, then the Indemnified Person shall have the right to defend, at the sole cost and expense of the Indemnifying Party (but only if the Indemnified Person is actually entitled to indemnification hereunder), the third party claim by all appropriate proceedings, which proceedings shall be promptly and vigorously prosecuted by the Indemnified Person to a final conclusion or settled.  The Indemnified Person shall have full control of such defense and proceedings; provided, however, that the Indemnified Person may not enter into any compromise or settlement of such third party claim, without the Indemnifying Party’s express written consent, which shall not be unreasonably withheld.  The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Person pursuant to this Section 13.3(c), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.

(d)           If the Indemnifying Party elects not to assume the defense of a third party claim, or elects to assume the defense of a third party claim, but reserves the right to dispute whether such claim is an Indemnified Claim under Sections 5.1, 13.1 and/or 13.2, as the case

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may be, the determination of whether the Indemnified Person is entitled to indemnification hereunder shall be resolved pursuant to arbitration as provided in Section 15.10.

(e)           If an Indemnified Person is entitled to indemnity under Sections 5.1, 13.1 and/or 13.2 for a claim or other matter which does not involve a third party claim, and if Buyer or Seller intends to seek indemnity on behalf of an Indemnified Person with respect thereto by or from an Indemnifying Party pursuant to Sections 5.1, 13.1 and/or 13.2, then the party electing to seek indemnity on behalf of an Indemnified Person shall promptly transmit to the Indemnifying Party a written notice describing in reasonable detail the nature of such claim or other matter, the Indemnified Person’s best estimate of the amount of damages attributable to such claim or other matter and the basis for the Indemnified Person’s entitlement to indemnification under Sections 5.1, 13.1 and/or 13.2, as the case may be.  If the Indemnifying Party does not notify the party who sent such notice within 30 days from its receipt of such notice that the Indemnifying Party does not dispute such claim for indemnity, the Indemnifying Party shall be deemed to have disputed such claim.  If the Indemnifying Party has disputed such claim, such dispute shall be resolved pursuant to arbitration as provided in Section 15.10.

(f)            To the extent any claim, action, suit or proceeding includes one or more Indemnified Claims with respect to an Indemnified Person and one or more third party claims which are not Indemnified Claims with respect to such Indemnified Person, any such non-Indemnified Claim insofar as it is with respect to such Indemnified Person shall not be covered by the indemnity in Sections 5.1, 13.1 and 13.2, the Indemnifying Party shall not be obligated to undertake, conduct and control the defense or settlement of such non-Indemnified Claim insofar as it is with respect to such Indemnified Person, and such Indemnified Person shall be responsible for its own defense and settlement of such non-Indemnified Claim.  The seeking by a party of indemnity hereunder on behalf of any Indemnified Person with respect to any third party claim or other claim or matter shall not prevent such party from then or thereafter also seeking indemnity hereunder on behalf of any other Indemnified Person with respect to such third party claim or other claim or matter and shall not prevent the other party from seeking indemnity hereunder on behalf of any Indemnified Person with respect to the same third party claim or other claim or matter.

(g)           The term “Indemnified Transfer Tax Claim” as used herein means a claim by or on behalf of any Governmental Authority in the State of Florida for any Tax or fee described in the first sentence of Section 15.4.  Notwithstanding the provisions of Sections 13.3(b) and (c), with respect to any Indemnified Transfer Tax Claim, any Seller Indemnified Person may enter into any compromise or settlement of such Indemnified Transfer Tax Claim, in such Seller Indemnified Person’s sole discretion, without the Indemnifying Party’s prior consent, and no Seller Indemnified Person shall be required to make any related counterclaim or cross-complaint against any Person in connection with such Indemnified Transfer Tax Claim or otherwise cooperate with the Indemnifying Party or its counsel in contesting any such Indemnified Transfer Tax Claim.

Section 13.4           Seller’s General Liability Limitation.  (a) Notwithstanding anything herein provided to the contrary, Seller shall have no liability to Buyer or any of the other Buyer Indemnified Persons pursuant to Section 13.2 or for any breach by Seller of any representation or

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warranty made by Seller in clauses (a) and (d) through (u) of Section 4.1 to the extent that the aggregate amount of all Covered Liabilities attributable to all such liabilities or breaches exceeds an amount equal to fifty percent (50%) of the Adjusted Purchase Price.

(b)           Notwithstanding anything herein provided to the contrary but without in any way affecting the obligations of a Buyer Indemnified Person to notify Seller of a third party claim pursuant to Section 13.3, Seller shall not have any liability to a Buyer Indemnified Person with respect to any Covered Liability pursuant to Section 13.2 unless and until Buyer has used reasonable efforts to enforce its rights and remedies, if any, with respect to such Covered Liability against any other Person pursuant to (i) any insurance maintained for the joint account under any operating agreement with respect to the Assets and (ii) any other agreements for insurance, indemnification, guarantee or similar assurances which may be included in the Assets.

Section 13.5           Materiality Exclusion.  Notwithstanding anything to the contrary contained in this Agreement, for purposes of determining if there has been a breach of any representation or warranty hereunder by Seller or Buyer and the amount of the Covered Liabilities in respect thereof, the representations and warranties of Seller and Buyer shall, for purposes of this Article XIII, be read without giving effect to any materiality, Material Adverse Effect or qualification with a similar meaning in such representation or warranty.

ARTICLE XIV.
TERMINATION; REMEDIES

Section 14.1           Termination.

(a)   Termination of Agreement.  This Agreement and the transactions contemplated hereby may be terminated at any time prior to the Closing:

(1)       By the mutual consent of Seller and Buyer; or

(2)       If the Closing has not occurred by the close of business on the Closing Date, then (i) by Seller if any condition specified in Section 9.1 has not been satisfied on or before such close of business, and shall not theretofore have been waived by Seller, or (ii) by Buyer if any condition specified in Section 9.2 has not been satisfied on or before such close of business, and shall not theretofore have been waived by Buyer; provided, in each case, that the failure to consummate the transactions contemplated hereby on or before such date did not result from the failure by the party or parties seeking termination of this Agreement to fulfill any undertaking or commitment provided for herein on the part of such party or parties that is required to be fulfilled on or prior to Closing.

(b)   Effect of Termination.  In the event of termination of this Agreement by Seller, on the one hand, or Buyer, on the other hand, pursuant to Section 14.1(a), written notice thereof shall forthwith be given by the terminating party or parties to the other party or parties hereto, and this Agreement shall thereupon terminate; provided, however, that following such termination Buyer will continue to be bound by its obligations set forth in Sections 5.1 and 5.2.  If this Agreement is terminated as provided herein all filings, applications and other submissions made

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to any Governmental Authority shall, to the extent practicable, be withdrawn from the Governmental Authority to which they were made.

Section 14.2           Remedies.

(a)   Seller’s Remedies.  Notwithstanding anything herein provided to the contrary, if this Agreement is not terminated by Buyer pursuant to Section 14.1(a) and Buyer fails to satisfy on or prior to the Closing Date the conditions to Closing or the Closing obligations, as the case may be, set forth in Sections 9.1(a), 9.1(b), 9.1(c), 9.1(e) or 10.3, Seller, at its sole option, may (i) enforce specific performance of this Agreement or (ii) terminate this Agreement and, without waiving or releasing Buyer’s obligations under Sections 5.1 and 5.2, recover from Buyer the sum of $50,000,000.00 as liquidated damages.  Such remedies shall be Seller’s sole and exclusive remedies for such failure, all other remedies being expressly waived by Seller.  Seller and Buyer agree upon such amount as liquidated damages due to the difficulty and inconvenience of measuring actual damages and the uncertainty thereof, and Seller and Buyer agree that such amount is a reasonable estimate of Seller’s loss in the event of any such failure by Buyer.  Without waiving or releasing Buyer from any of its other representations, warranties, covenants and agreements contained herein, specific performance with respect to clause (ii)(a) of Section 10.3 shall not require Buyer to make a false statement in the officer’s certificate of Buyer.

(b)   Buyer’s Remedies.  Notwithstanding anything herein provided to the contrary, if this Agreement is not terminated by Seller pursuant to Section 14.1(a) and Seller fails to satisfy on or prior to the Closing Date the conditions to Closing or the Closing obligations, as the case may be, set forth in Sections 9.2(a), 9.2(b), 9.2(c), 9.2(e) or 10.2, Buyer, at its sole option, may (i) enforce specific performance of this Agreement or (ii) terminate this Agreement and recover from Seller the sum of $50,000,000.00, as liquidated damages.  Such remedies shall be Buyer’s sole and exclusive remedies for such failure, all other remedies being expressly waived by Buyer.  Seller and Buyer agree upon such amount as liquidated damages due to the difficulty and inconvenience of measuring actual damages and the uncertainty thereof, and Seller and Buyer agree that such amount is a reasonable estimate of Buyer’s loss in the event of any such failure by Seller.  Without waiving or releasing Seller from any of its other representations, warranties, covenants and agreements contained herein, specific performance with respect to Section 10.2(b) shall not require Seller to make a false statement in the officer’s certificate of Seller.

ARTICLE XV.
MISCELLANEOUS

Section 15.1           Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party.

Section 15.2           Governing Law; Jurisdiction; Process.

(a)           THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF

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TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW RULES THAT WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT IT IS MANDATORY THAT THE LAW OF ANOTHER JURISDICTION, WHEREIN OR ADJACENT TO WHICH THE ASSETS ARE LOCATED, SHALL APPLY.

(b)           SUBJECT TO THE ARBITRATION AGREEMENT SET FORTH IN SECTION 15.10, BUYER CONSENTS TO PERSONAL JURISDICTION IN ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT IN ANY COURT, FEDERAL OR STATE, WITHIN HARRIS COUNTY, TEXAS, HAVING SUBJECT MATTER JURISDICTION AND WITH RESPECT TO ANY SUCH CLAIM, BUYER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY CLAIM, OR ANY OBJECTION THAT BUYER MAY NOW OR HEREAFTER HAVE, THAT VENUE OR JURISDICTION IS NOT PROPER WITH RESPECT TO ANY SUCH LEGAL ACTION, SUIT OR PROCEEDING BROUGHT IN SUCH COURT IN HARRIS COUNTY, TEXAS, INCLUDING ANY CLAIM THAT SUCH LEGAL ACTION, SUIT OR PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND ANY CLAIM THAT BUYER IS NOT SUBJECT TO PERSONAL JURISDICTION OR SERVICE OF PROCESS IN SUCH HARRIS COUNTY, TEXAS FORUM.

Section 15.3           Entire Agreement.  This Agreement (including the Confidentiality Agreement) and the Appendices, Schedules and Exhibits hereto contain the entire agreement between the parties with respect to the subject matter hereof and there are no agreements, understandings, representations or warranties between the parties other than those set forth or referred to herein.

Section 15.4           Expenses.  Buyer shall be responsible for and agrees to pay in full (i) any sales Taxes, including any penalties and interest, which may become due and owing by reason of the transfer of the Assets to the Company and/or the assignment of the Membership Interests to Buyer hereunder, (ii) all transfer, stamp, documentary and similar Taxes, including any penalties and interest, imposed on the parties hereto (or on either party) with respect to all transfers of property contemplated pursuant to this Agreement, including the transfer of the Assets to the Company and the assignment of the Membership Interests to Buyer hereunder, and (iii) all recording, filing or registration fees, including any penalties and interest, relating to the filing, recording or registration of the Conveyance, the special governmental assignment forms contemplated by Section 6.2 and any other instruments or documents transferring title in or to the Assets or any part thereof from Seller to the Company pursuant to this Agreement.  Further, Buyer shall be responsible for and agrees to pay in full all costs and expenses incurred by Seller (including attorney’s fees, accountant’s fees and fees of other professionals) in connection with Seller’s undertakings to accommodate Buyer’s request mentioned in the recitals of this Agreement, including fees and expenses incurred in connection with the amendment and restatement of this Agreement, the formation of the Company in Delaware and qualification of the Company in Florida, and the preparation and modification of closing documents contemplated herein and relating to such amendment and restatement.  All other costs and expenses incurred by each party hereto in connection with all things required to be done by it hereunder, including attorney’s fees, accountant’s fees and the expense of environmental and title examination, shall be borne by the party incurring same.

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Section 15.5           Notices.  Unless otherwise expressly provided in this Agreement, all notices required or permitted hereunder shall be in writing and deemed sufficiently given for all purposes hereof if (i) delivered in person, by courier or by registered or certified United States Mail to the Person to be notified, with receipt obtained, or (ii) sent by telecopy, telefax or other facsimile or electronic transmission, with “answer back” or other “advice of receipt” obtained, in each case to the appropriate address or number as set forth below.  Each notice shall be deemed effective on receipt by the addressee as aforesaid; provided that, notice received by telex, telecopy, telefax or other facsimile or electronic transmission after 5:00 p.m. at the location of the addressee of such notice shall be deemed received on the first Business Day following the date of such electronic receipt.  Notices to Seller shall be addressed as follows:

Calumet Florida, L.L.C.

c/o Vulcan Resources Florida, Inc.

700 Louisiana, Suite 4150

Houston, Texas 77002

Attention:   Mr. Tim Goff

Telecopy No.: (713) 579-5110

or at such other address or to such other telecopy, telefax or other facsimile or electronic transmission number and to the attention of such other Person as Seller may designate by written notice to Buyer.  Notices to Buyer shall be addressed to:

BreitBurn Operating L.P.
515 S. Flower St., Suite 4800
Los Angeles, CA  90071
Attention:   Gregory C. Brown
Telecopy No.:  (213) 225-5916

or at such other address or to such other telecopy, telefax or other facsimile or electronic transmission number and to the attention of such other Person as Buyer may designate by written notice to Seller.

Section 15.6           Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that the respective rights and obligations of the parties hereto shall not be assignable or delegable by any party hereto without the express written consent of the non-assigning or non-delegating party.

Section 15.7           Amendments and Waivers.  Except as contemplated by Section 8.5, this Agreement may not be modified or amended except by an instrument or instruments in writing signed by the party against whom enforcement of any such modification or amendment is sought.  Any party hereto may, only by an instrument in writing, waive compliance by another party hereto with any term or provision of this Agreement on the part of such other party hereto to be performed or complied with.  The waiver by any party hereto of a breach of any term or provision of this Agreement shall not be construed as a waiver of any subsequent breach.

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Section 15.8           Appendices, Schedules and Exhibits.  All Appendices, Schedules and Exhibits hereto which are referred to herein are hereby made a part of this Agreement and incorporated herein by such reference.

Section 15.9           Interpretation.  It is expressly agreed that this Agreement shall not be construed against any party, and no consideration shall be given or presumption made, on the basis of who drafted this Agreement or any particular provision hereof or who supplied the form of Agreement.  Each party agrees that this Agreement has been purposefully drawn and correctly reflects its understanding of the transaction that this Agreement contemplates.  In construing this Agreement:

(a)           examples shall not be construed to limit, expressly or by implication, the matter they illustrate;

(b)           the word “includes” and its derivatives means “includes, but is not limited to” and corresponding derivative expressions;

(c)           a defined term has its defined meaning throughout this Agreement and each Appendix, Exhibit and Schedule to this Agreement, regardless of whether it appears before or after the place where it is defined;

(d)           each Exhibit and Schedule to this Agreement is a part of this Agreement, but if there is any conflict or inconsistency between the main body of this Agreement (including Appendix A which shall be considered part of the main body of this Agreement) and any Exhibit or Schedule, the provisions of the main body of this Agreement shall prevail;

(e)           the term “cost” includes expense and the term “expense” includes cost; and

(f)            the headings and titles herein are for convenience only and shall have no significance in the interpretation hereof.

Section 15.10         Arbitration.  It is agreed, as a severable and independent arbitration agreement separately enforceable from the remainder of this Agreement, that if the parties hereto, the Indemnified Persons or the respective successors, assigns, heirs or legal representatives of any of the foregoing are unable to amicably resolve any dispute or difference arising under or out of, in relation to or in any way connected with this Agreement (whether contractual, tortious, equitable, statutory or otherwise), such matter shall be finally and exclusively referred to and settled by arbitration under the Commercial Arbitration Rules of the American Arbitration Association pursuant and subject to the arbitration procedures set forth in the Arbitration Procedures; provided that, the foregoing shall not prevent Seller or its Affiliates from seeking specific performance, an injunction or other equitable relief with respect to their rights under the Confidentiality Agreement through judicial means in any jurisdiction.  In the event of any conflict between the Commercial Arbitration Rules of the American Arbitration Association and the Arbitration Procedures, the Arbitration Procedures shall govern and control.

Section 15.11         Agreement for the Parties’ Benefit Only.  This Agreement is for the sole benefit of Buyer, Seller and their respective successors and assigns as permitted herein and no

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other Person shall be entitled to enforce this Agreement, rely on any representation, warranty, covenant or agreement contained herein, receive any rights hereunder or be a third party beneficiary of this Agreement.  Any Indemnified Person which is a third party shall be indemnified and held harmless under the terms of this Agreement only to the extent that a party expressly elects to exercise such right of indemnity and hold harmless on behalf of such third party Indemnified Person pursuant to Section 13.3; and no party shall have any direct liability or obligation to any third party or be liable to any third party for any election or non-election or any act or failure to act under or in regard to any term of this Agreement.  Any claim for indemnity or hold harmless hereunder on behalf of an Indemnified Person must be made and administered by a party to this Agreement.  Any claim on behalf of an Indemnified Person may only be brought against the defaulting party or parties.

Section 15.12         Attorneys’ Fees.  The prevailing party in any legal proceeding brought under or to enforce this Agreement shall be additionally entitled to recover court costs, reasonable costs of arbitration and reasonable attorneys’ fees from the nonprevailing party.

Section 15.13         Severability.  If any term, provision or condition of this Agreement, or any application thereof, is held invalid, illegal or unenforceable in any respect under any Law, this Agreement shall be reformed to the extent necessary to conform, in each case consistent with the intention of the parties, to such Law, and to the extent such term, provision or condition cannot be so reformed, then such term, provision or condition (or such invalid, illegal or unenforceable application thereof) shall be deemed deleted from (or prohibited under) this Agreement, as the case may be, and the validity, legality and enforceability of the remaining terms, provisions and conditions contained herein (and any other application such term, provision or condition) shall not in any way be affected or impaired thereby.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

Section 15.14         No Recordation.  Without limiting any party’s right to file suit to compel arbitration to enforce its rights under this Agreement, Buyer and Seller expressly covenant and agree not to record or place of record this Agreement or any copy or memorandum hereof.

Section 15.15         Time of Essence.  Time is of the essence in this Agreement.  If the date specified in this Agreement for giving any notice or taking any action is not a Business Day (or if the period during which any notice is required to be given or any action taken expires on a date which is not a Business Day), then the date for giving such notice or taking such action (and the expiration date of such period during which notice is required to be given or action taken) shall be the next day which is a Business Day.

Section 15.16         Confidentiality.  At the Closing Seller and Buyer shall take (or cause to be taken) such actions as are necessary to terminate the Confidentiality Agreement.

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IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of the parties as of the day first above written.

SELLER:
CALUMET FLORIDA, L.L.C.,
a Delaware limited liability company
By:	Vulcan Resources Florida, Inc.
	a Delaware corporation,
	its Sole Managing Member
By:
Name:			Tim J. Goff
Title:		President and Chief Executive Officer
BUYER:
BREITBURN OPERATING L.P.,
a Delaware limited partnership
By:	BreitBurn Operating GP, LLC,
	a Delaware limited liability company,
	its General Partner
By:
Name:			Randall H. Breitenbach
Title:		Co-Chief Executive Officer

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APPENDIX A

TO

ASSET PURCHASE AGREEMENT

DEFINITIONS

“Action” shall mean any action, suit, proceeding, condemnation or audit by or before any court or other Governmental Authority or any arbitration proceeding.

“Adjusted Purchase Price” shall be as defined in Section 3.1.

“Adjustment Period” shall be as defined in Section 3.3(a).

“Adjustment Statement” shall be as defined in Section 3.3(a).

“Affiliate” shall mean, as to the Person specified, any Person controlling, controlled by or under common control with such specified Person.  The concept of control, controlling or controlled as used in the aforesaid context means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of another, whether through the ownership of voting securities, by contract or otherwise.  No Person shall be deemed an Affiliate of any Person by reason of the exercise or existence of rights, interests or remedies under this Agreement.

“Agreed Rate” shall mean an annual rate of interest equal to the lesser of (i) eight percent (8%) and (ii) the maximum rate of interest allowed by Law.

“Arbitration Procedures” shall mean the arbitration procedures set forth in Exhibit A-1.

“Assets” shall mean (i) the E & P Assets, (ii) the Pipeline System Assets, (iii) the Office Buildings and Yard, and (iv) all Derivatives in existence as of the Closing Date.

“Asset Records” shall mean, except to the extent constituting Excluded Assets, and except to the extent the transfer thereof may not be made without violating legal constraints or legal obligations or waiving any attorney/client privilege, any and all lease files, land files, division order files, production marketing files, well files, production records, seismic, geological, geophysical and engineering data, litigation files, and all other files, maps and data (in whatever form) arising out of or relating to the Subject Interests or the ownership, use, maintenance or operation of the Assets.

“Assignment” shall be as defined in Section 8.3.

“Business Day” shall mean any day which is not a Saturday, Sunday or legal holiday recognized by the United States of America.

“Buyer Controlled Group” shall be as defined in Section 8.11(a).

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“Buyer Indemnified Persons” shall be as defined in Section 13.2.

“Claim Notice” shall be as defined in Section 13.3.

“Claims” shall mean all right, title and interest of Seller to any claims to the extent attributable to ownership, use, construction, maintenance or operation of the Assets subsequent to the Effective Time, including, without limitation, past, present or future claims, whether or not previously asserted by Seller, excluding, however, any claims against Seller or any past or present Affiliate of Seller.

“Closing” shall be the consummation of the transaction contemplated by Article X.  The Closing with respect to part of the Assets may be delayed or extended as provided in Section 7.2.

“Closing Date” shall mean (a) May 24, 2007; or (b) such other date as may be mutually agreed to by Seller and Buyer.  The Closing Date with respect to part of the Assets may also be delayed or extended as provided in Section 7.2.

“Code” shall mean the Internal Revenue Code of 1986, as amended, and any successor thereto, together with all regulations promulgated thereunder.

“Company” shall be as defined in Section 6.1.

“Company Employees” shall be as defined in Section 8.11(a).

“Company Liabilities” shall mean (i) all Covered Liabilities arising out of the enforcement or assertion of any Claim referenced in the definition of the term “E&P Assets”, all Covered Liabilities with respect to the Royalty Accounts, title to the Assets and/or any Permitted Encumbrances with respect to the Assets (other than Taxes allocated to Seller  pursuant to Section 11.2), (ii) the Plugging and Abandonment Obligations, (iii) all Covered Liabilities to the extent arising out of or attributable to the ownership, use, construction, maintenance or operation of any of the Assets on or subsequent to the Effective Time, (iv) any and all Environmental Liabilities and any and all other Covered Liabilities arising out of or attributable to any Environmental Matter with respect to the Assets or any Environmental Matter arising out of or attributable to the ownership, use, construction, maintenance or operation of any of the Assets before or after the Effective Time, and (v) all Covered Liabilities arising out of or attributable to any injury, death or damage to person or property occurring on or after the Closing Date on or to the Assets or the Lands (or any adjacent lands or any pooled or unitized lands) or in connection with any operations or activities relating thereto to the extent arising out of or attributable to the use, construction, maintenance or operation of any of the Assets before or after the Closing Date; provided that, the Company Liabilities shall not include any Covered Liability resulting from any breach or nonfulfillment of any representation, warranty, covenant or agreement on the part of Seller hereunder for which Seller is obligated to indemnify the Buyer pursuant to clause (ii) of Section 13.2.

“Confidentiality Agreement” shall be as defined in Section 5.2.

“Continuing Employees” shall be as defined in Section 8.11(b).

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“Conveyance” shall be as defined in Section 6.2.

“Covered Liabilities” shall mean any and all debts, losses, liabilities, duties, fines, damages, claims, Taxes, costs and expenses (including, without limitation, those arising out of any demand, assessment, settlement, judgment or compromise relating to any actual or threatened Action and any court costs, reasonable fees and expenses of expert witnesses, reasonable investigative expenses, reasonable fees and disbursements of legal counsel and other reasonable legal and investigative fees and expenses incurred in investigating, preparing or defending any Action), matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown, including, without limitation, any of the foregoing arising under, out of or in connection with any Action, any order or consent decree of any Governmental Authority, any award of any arbitrator, or any Law, contract, commitment or undertaking.

“Data License Agreement” shall be as defined in Section 8.13.

“Derivative” shall be as defined in Section 4.1(j)(8).

“Disputed Issues” shall be as defined in the Arbitration Procedures.

“E & P Assets” shall mean the following described assets and properties (except to the extent constituting Excluded Assets):

(a)           the Subject Interests;

(b)           the Incidental Rights attributable to the Subject Interests;

(c)           the Claims attributable to the Subject Interests;

(d)           the Royalty Accounts; and

(e)           all (i) oil, gas and other hydrocarbons produced from or attributable to the Subject Interests with respect to all periods subsequent to the Effective Time and (ii) proceeds from or of such oil, gas and other hydrocarbons.

“Effective Time” shall mean 7:00 a.m., Houston Time, on January 1, 2007; provided that, with respect to occurrences, prorations and allocations with respect to a particular Asset, Effective Time shall be 7:00 a.m. at the location of such Asset on January 1, 2007.

“Election Period” shall be as defined in Section 13.3.

“Environmental Laws” shall mean all Laws relating to (a) the control of any potential pollutant or Hazardous Materials, or protection of the air, water or land or other natural resources, (b) solid, gaseous or liquid waste generation, handling, treatment, storage, disposal or transportation, and (c) exposure to hazardous, toxic or other substances alleged to be harmful, or Hazardous Materials.  “Environmental Laws” shall include, but are not limited to, the Clean Air Act, the Clean Water Act, the Resource Conservation Recovery Act, the Superfund Amendments

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and Reauthorization Act, the Toxic Substances Control Act, the Safe Drinking Water Act, and CERCLA and shall also include all state, local and municipal Laws dealing with the subject matter of the above listed Federal statutes or promulgated by any governmental or quasi-governmental agency thereunder in order to carry out the purposes of any Federal, state, local or municipal Law.

“Environmental Liabilities” shall mean any and all costs (including costs of remediation), damages, settlements, expenses, penalties, fines, taxes, prejudgment and post-judgment interest, court costs and attorneys’ fees incurred or imposed (i) pursuant to any order, notice of responsibility, directive (including requirements embodied in Environmental Laws), injunction, judgment or similar act (including settlements) by any Governmental Authority to the extent arising out of or under Environmental Laws (excluding any claim or cause of action of Buyer or any Affiliate of Buyer) or (ii) pursuant to any claim or cause of action by a Governmental Authority or other third Person (other than Buyer and any Affiliate of Buyer) for personal injury, property damage, damage to natural resources, remediation or response costs to the extent arising out of or attributable to any violation of, or any remedial obligation under, any Environmental Law.

“Environmental Matters” shall mean (i) any order, decree, notice of responsibility, directive (including requirements embodied in Environmental Laws), injunction, judgment or similar act (including settlements) by any Governmental Authority arising out of or under any Environmental Laws or (ii) pursuant to any claim or cause of action by a Governmental Authority or other Person for personal injury, property damage, damage to natural resources, remediation or response costs arising out of or attributable to any Hazardous Materials or any violation of, or any remedial obligation under, any Environmental Law.

“Excluded Assets” shall mean the following:

(a)           the right to retain copies (but not the originals) of all Asset Records;

(b)           except to the extent constituting the Royalty Accounts, all deposits, cash, checks, funds and accounts receivable attributable to Seller’s interests in the Assets with respect to any period of time prior to the Effective Time;

(c)           all (i) oil, gas and other hydrocarbons produced from or attributable to the Subject Interests with respect to all periods prior to the Effective Time, (ii) oil, gas and other hydrocarbons attributable to the Subject Interests which, at the Effective Time, are in storage, within processing plants, in pipelines or otherwise held in inventory, and (iii) proceeds from or of such oil, gas and other hydrocarbons;

(d)           any interests, properties and assets which Seller elects to exclude from the Assets pursuant to Section 8.2(c)(2), in each case together with a pro rata share of all applicable Incidental Rights, oil, gas and other minerals, and other

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assets attributable or appurtenant thereto which are excluded from the Assets in connection therewith;

(e)           all receivables and cash proceeds which were expressly taken into account and for which credit was given in the determination of Net Cash Flow pursuant to Section 3.3, as adjusted pursuant to Section 3.4;

(f)            claims of Seller for refund of or loss carry forwards with respect to (i) Taxes attributable to any period prior to the Effective Time or (ii) any Taxes attributable to the Excluded Assets;

(g)           all corporate, financial, tax and legal records of Seller;

(h)           all rights, interests, assets and properties, including the seismic, geological, geophysical, engineering and other data, files and records, described in Schedule A-2;

(i)            except as otherwise provided in Section 8.9, all rights, titles, claims and interests of Seller or any Affiliate of Seller (i) under any policy or agreement of insurance, (ii) under any bond, or (iii) to any insurance or condemnation proceeds or awards;

(j)            all computer or communications software or intellectual property (including tapes, data and program documentation and all tangible manifestations and technical information relating thereto) owned, licensed or used by Seller; and

(k)           any logo, service mark, copyright, trade name or trademark of or associated with Seller or any Affiliate of Seller or any business of Seller or of any Affiliate of Seller.

“Excluded Liabilities” shall mean (i) any and all Covered Liabilities to the extent arising out of or attributable to the ownership, use, construction, maintenance or operation of the Excluded Assets, (ii) any and all Covered Liabilities arising out of or attributable to any injury, death or damage to person or property occurring prior to the Closing Date to the extent arising out of or attributable to the use, construction, maintenance or operation of the Assets by Seller prior to the Closing Date, (iii) any and all Covered Liabilities to the extent arising out of or attributable to the disposal prior to the Effective Time, by Seller or any Person engaged by Seller, of Hazardous Materials resulting from the operation of the Assets at locations other than the properties comprising the Assets, (iv) fines, penalties and sanctions asserted or levied by any Governmental Authority and arising out of the ownership, use, maintenance or operation of the Assets prior to the Effective Time, and (v) any and all claims, demands and actions, and related liabilities and obligations, for the non-payment, underpayment, or miscalculation of royalties, overriding royalties, Taxes and similar items attributable to the production of oil, gas and other hydrocarbons from the Assets prior to the Effective Time, in each case excluding any Covered Liability which any Buyer Indemnified Person or any Affiliate thereof may have without regard to the Company’s acquisition of the Assets from Seller and Buyer’s acquisition of the Membership Interests from Seller.

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“Final Adjustment Statement” shall be as defined in Section 3.4.

“Governmental Authority” shall mean (i) the United States of America, (ii) any state, county, municipality or other governmental subdivision within the United States of America, and (iii) any court or any governmental department, commission, board, bureau, agency or other instrumentality of the United States of America or of any state, county, municipality or other governmental subdivision within the United States of America.

“Hazardous Materials” shall mean any explosives, radioactive materials, asbestos material, urea formaldehyde, hydrocarbon contaminants, underground tanks, pollutants, contaminants, hazardous, corrosive or toxic substances, special waste or waste of any kind, including compounds known as chlorobiophenyls and any material or substance the storage, manufacture, disposal, treatment, generation, use, transport, mediation or release into the environment of which is prohibited, controlled, regulated or licensed under Environmental Laws, including, but not limited to, (i) all “hazardous substances” as that term is defined in Section 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act, as amended, and (ii) petroleum and petroleum products.

“Hydrocarbon Interests” shall mean (a) mineral servitudes and leases affecting, relating to or covering any oil, gas and other hydrocarbons in place and the leasehold interests and estates in the nature of working or operating interests under such leases, as well as overriding royalties, net profits interests, production payments, carried interests, rights of recoupment and other interests in, under or relating to such leases, (b) fee interests in oil, gas or other hydrocarbons in place, (c) royalty interests in oil, gas or other hydrocarbons in place, (d) any other interest in oil, gas or other hydrocarbons in place, (e) any economic or contractual rights, options or interests in and to any of the foregoing, including, without limitation, any sublease, farmout or farmin agreement or production payment affecting any interest or estate in oil, gas or other hydrocarbons in place, and (f) any and all rights and interests attributable or allocable thereto by virtue of any pooling, unitization, communitization, production sharing or similar agreement, order or declaration.

“Incidental Rights” shall mean, with respect to the E & P Assets, all right, title and interest of Seller in and to or derived from the following insofar as the same are attributable to the Subject Interests:  (a) all rights with respect to the use and occupancy of the surface of and the subsurface depths under the Lands; (b) all rights with respect to any pooled, communitized or unitized acreage by virtue of any Subject Interest being a part thereof; (c) all agreements and contracts, easements, rights-of-way, servitudes and other estates; and (d) all real and personal property located upon the Lands and used in connection with the exploration, development or operation of the Subject Interests; and (e) the Asset Records relating to the Subject Interests.  “Incidental Rights” shall mean, with respect to the Pipeline System Assets, all right, title and interest of Seller in and to or derived from the following insofar as the same are attributable to the Pipeline System: (a) all gathering agreements, equipment leases, operating, service or maintenance agreements and other agreements entered into or used primarily in connection with, or otherwise pertaining primarily to, the ownership or operation of the Pipeline System and (b) the Asset Records relating to the Pipeline System.

“Indemnified Claim” shall be as defined in Section 13.3.

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“Indemnified Person” shall be as defined in Section 13.3.

“Indemnified Transfer Tax Claim” shall be as defined in Section 13.3(g).

“Indemnifying Party” shall be as defined n Section 13.3.

“Initial Adjusted Purchase Price” shall be as defined in Section 3.1.

“Initial Adjustment Amount” shall be as defined in Section 3.3(a).

“Joint Development and AMI Agreement” shall be as defined in Section 8.12.

“knowledge” shall mean the actual knowledge (excluding any imputed or implied knowledge) of any fact, circumstance or condition by a current officer or manager of the party involved.

“Lands” shall mean the lands covered by or subject to the Subject Interests.

“Law” shall mean any applicable statute, law (including common law), ordinance, regulation, rule, ruling, order, writ, injunction, decree or other official act of or by any Governmental Authority.

“Material Adverse Effect” shall mean a material adverse effect on the value of the Assets (taken as a whole and after taking into account any insurance, indemnity and other recoveries payable in respect thereof), excluding any effect resulting from any change in economic, industry or market conditions (whether general or regional in nature or limited to any area where any Assets are located) or from any change in Law or regulatory policy.

“Membership Interests” shall be as defined in Section 2.1.

“Net Cash Flow” shall be as defined in Section 3.3(c).

“Net Revenue Interest” shall mean an interest (expressed as a percentage or decimal fraction) in and to all oil and gas produced and saved from or attributable to a Property Subdivision.

“Office Buildings and Yard” shall mean the real property constituting the “Office Buildings and Yard” as described in Part III of the Schedule A-1.

“Operations and Proceeds Agreement” shall be as defined in Section 7.2.

“Original Agreement” shall be as defined in the recitals of this Agreement.

“Permitted Encumbrances” shall mean any of the following matters:

(a)           all agreements, instruments, documents, liens, encumbrances, and other matters which are described in Schedule A-3 or any other Schedule or Exhibit to this Agreement;

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(b)           any (i) inchoate liens or charges constituting or securing the payment of expenses which were incurred incidental to maintenance, development, production or operation of the Assets or for the purpose of developing, producing or processing oil, gas or other hydrocarbons therefrom or therein and (ii) materialman’s, mechanics’, repairman’s, employees’, contractors’, operators’ or other similar liens, security interests or charges for liquidated amounts arising in the ordinary course of business incidental to construction, maintenance, development, production or operation of the Assets or the production or processing of oil, gas or other hydrocarbons therefrom, that are not delinquent and that will be paid in the ordinary course of business or, if delinquent, that are being contested in good faith;

(c)           any liens for Taxes not yet delinquent or, if delinquent, that are being contested in good faith in the ordinary course of business;

(d)           any liens or security interests created by Law or reserved in oil, gas and/or mineral leases for royalty, bonus or rental or for compliance with the terms of the Subject Interests;

(e)           except as otherwise specifically provided for in the Agreement, all Transfer Requirements;

(f)            any easements, rights-of-way, servitudes, permits, licenses, surface leases and other rights with respect to operations to the extent such matters do not interfere in any material respect with Seller’s operation of the portion of the Assets burdened thereby;

(g)           all agreements and obligations relating to (1) imbalances with respect to the production, gathering, transportation or processing of gas, (2) calls or purchase options on oil, gas or other minerals exercisable at current fair market prices or the posted prices of such purchaser, or (3) processing rights or commitments, in the case of clauses (2) and (3) preceding to the extent the same are disclosed in any Schedule or Exhibit to this Agreement;

(h)           all royalties, overriding royalties, net profits interests, carried interests, reversionary interests and other burdens to the extent that the net cumulative effect of such burdens, as to a particular Property Subdivision, does not operate to reduce the Net Revenue Interest of Seller in such Property Subdivision as specified in the Property Schedule or increase the Working Interest of Seller in such Property Subdivision as specified in the Property Schedule;

(i)            all obligations by virtue of a prepayment, advance payment or similar arrangement under any contract for the sale of gas production, including by virtue of “take-or-pay” or similar provisions, to deliver gas produced from or attributable to the Subject Interests after the Effective Time without then or

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thereafter being entitled to receive full payment therefor, in each case to the extent the same are disclosed in any Schedule or Exhibit to this Agreement;

(j)            all liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects, irregularities and other matters affecting any Asset which individually or in the aggregate are not such as to interfere materially with the operation, value or use of such Asset or increase the Working Interest of Seller in such Property Subdivision as specified in the Property Schedule;

(k)           rights reserved to or vested in any Governmental Authority to control or regulate any of the wells or units or other properties  included in the Assets and all applicable laws, rules, regulations and orders of such authorities so long as the same do not decrease Seller’s Net Revenue Interest below the Net Revenue Interest shown in the Property Schedule or increase the Working Interest of Seller in such Property Subdivision as specified in the Property Schedule;

(l)            the terms and conditions of all contracts and agreements relating to the Subject Interests, including, without limitation, exploration agreements, gas sales contracts, processing agreements, farmins, farmouts, operating agreements, area of mutual interest agreements, and right-of-way agreements, to the extent such terms and conditions do not decrease Seller’s Net Revenue Interest below the Net Revenue Interest shown in the Property Schedule or increase the Working Interest of Seller in such Property Subdivision as specified in the Property Schedule;

(m)          rights of reassignment requiring notice and/or the reassignment (or granting an opportunity to receive a reassignment) of a leasehold interest to the holders of such reassignment rights prior to surrendering or releasing such leasehold interest; and

(n)           all consents and approvals of or filings with applicable Governmental Authorities in connection with assignments of the Subject Interests or Membership Interests as contemplated by Section 7.2.

“Person” shall mean any Governmental Authority or any individual, firm, partnership, corporation, association, joint venture, trust, unincorporated organization or other entity or organization.

“Pipeline System” shall mean the oil pipeline system known as the 23 mile Raccoon Point Pipeline located in Collier and Broward Counties, Florida, as more particularly described in Part II of Schedule A-1, including, without limitation the following described assets and properties (except to the extent constituting Excluded Assets):

(a) those certain rights-of-way, easements, fee interests, leasehold interests, property rights and other rights and interests in land created by the conveyances, deeds, leases and other instruments listed in Part II of Schedule A-1,

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and all the rights, interests and privileges granted by such instruments or reserved to Seller (or Seller’s predecessors in title) in such instruments;

(b) those certain servitudes, permits, licenses, franchises, certificates, orders, approvals, authorizations and similar rights and privileges described in Part II of Schedule A-1 and having been secured in connection with the herein described oil pipeline system from private agencies or Governmental Authorities;

(c) all of Seller’s rights, titles and interests in and to all other rights-of-way, easements, servitudes, permits, licenses, franchises, certificates, orders, approvals, authorizations and similar rights and privileges of every kind and nature acquired, used or useful for or in connection with, or otherwise pertaining to, the ownership or operation of , or the transportation, measurement, metering, treatment, or other handling of oil, gas and other hydrocarbons in the pipeline system and related facilities described in paragraph (d) below;

(d) those certain pipelines and all appurtenances thereto situated upon, over and across the aforesaid rights-of-way, easements, fee interests, leasehold interests, property rights and other rights and interests in land depicted or described in said Part II of Schedule A-1 and any other facilities for the transportation, measurement, treatment or other handling of hydrocarbons in connection with said pipelines; and

(e) all pipe, valves, compressors, generators, motors, gauges, meters and other measuring equipment, power lines, fuel lines, improvements, fittings, fixtures, machinery and equipment incorporated or installed in the above-described pipelines.

“Pipeline System Assets” shall mean the following described assets and properties (except to the extent constituting Excluded Assets):

(a)           the Pipeline System;

(b)           the Incidental Rights attributable to the Pipeline System; and

(c)           the Claims attributable to the Pipeline System.

“Plugging and Abandonment Obligations” shall mean any and all Covered Liabilities arising out of or attributable to the plugging, abandonment or removal, or any obligation to plug, abandon or remove, any well, platform, pipeline, facilities, equipment, fixtures or other property described or referenced in the Property Schedule or located on the Assets which as of the Effective Time has not been plugged, abandoned and removed in accordance with the terms of the Subject Interests and all Laws applicable thereto, but excluding any such Covered Liabilities for which Seller is obligated to indemnify Buyer pursuant to Section 13.2.

“Preference Right” shall mean any right or agreement that enables or may enable any Person to purchase or acquire any Asset or any interest therein or portion thereof as a result of or

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in connection with (i) the sale, assignment, encumbrance or other transfer of any Asset or any interest therein or portion thereof or (ii) the execution or delivery of this Agreement or the consummation or performance of the terms and conditions contemplated by this Agreement.

“Property Schedule” means Schedule A-1 attached to and made a part of this Agreement.

“Property Subdivision” means each well, well completion, multiple well completion, unit, lease or other subdivision of property described or referenced in the Property Schedule.

“Purchase Price” shall be as defined in Section 3.1.

“Representatives” shall be as defined in Section 8.14(a).

“Reserve Report” shall mean that certain reserve report dated February 2, 2006, prepared by Netherland, Sewell & Associates, Inc., with respect to the Subject Interests as of December 31, 2005.

“Rights-of-Way” shall mean, with respect to the Pipeline System, those certain rights, interests and privileges described in paragraph (a) of the definition of Pipeline System set forth in this Appendix A.

“Royalty Accounts” shall mean those separately identifiable accounts (and all monies contained therein) which are expressly identified and set forth in Schedule A-4 in which Seller or any third party operator is holding as of the Effective Time monies which (i) are owing to third party owners of royalty, overriding royalty, working or other interests in respect of past production of oil, gas or other hydrocarbons attributable to the E & P Assets or (ii) may be subject to refund by royalty owners or other third parties to purchasers of past production of oil, gas or other hydrocarbons attributable to the E & P Assets.

“Seller Indemnified Persons” shall be as defined in Section 13.1.

“Subject Interests” shall mean and include (i) the undivided interests specified in the Property Schedule in, to or under the Hydrocarbon Interests specifically described in the Property Schedule, and (ii) all other interests of Seller in, to or under any Hydrocarbon Interests in, to or under or derived from any lands covered by or subject to any of the Hydrocarbon Interests described in the Property Schedule, even though such interests of Seller may be incorrectly described or referred to in, or a description thereof may be omitted from, the Property Schedule, excluding any interests which become Excluded Assets.

“Tax” shall mean any federal, state and local tax or similar assessment or fee, together with all interest, fines, penalties and additions thereto.

“Transfer Requirement” shall mean any consent, approval, authorization or permit of, or filing with or notification to, any Person which is required to be obtained, made or complied with for or in connection with any sale, assignment, transfer or encumbrance of any Asset or any interest therein, or any sale, assignment, transfer or encumbrance of the Membership Interests, other than any consent or approval of or filing with any Governmental Authority in connection

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with the assignment of any Subject Interest or Membership Interests as contemplated by Section 7.2.

“Transition Agreement” shall be as defined in Section 8.10.

“Transition Termination Date” shall be as defined in Section 8.11(a).

“Working Interest” shall mean the percentage of costs and expenses attributable to the maintenance, development and operation of a Property Subdivision.

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE May 24, 2007

BreitBurn Energy Partners L.P. Completes Acquisition of Florida Oil Properties

Los Angeles, CA. — BreitBurn Energy Partners L.P. (NASDAQ: BBEP) (BreitBurn) announced today that it has completed the purchase of certain oil and gas properties along the Sunniland Trend in Florida from Calumet Florida, L.L.C. The purchase was made pursuant to the terms and conditions of a Purchase and Sale Agreement with Calumet previously announced on May 17, 2007.

About BreitBurn Energy Partners L.P.

BreitBurn Energy Partners L.P. is an independent oil and gas limited partnership, formed in 2006 by a subsidiary of Provident Energy Trust, focused on the acquisition, exploitation and development of oil and gas properties.  BreitBurn’s assets consist primarily of producing and non-producing crude oil reserves located in the Los Angeles Basin in California, the Wind River and Big Horn Basins in central Wyoming, the Permian Basin in West Texas and, the Sunniland Trend in Florida.  Visit BreitBurn online at www.BreitBurn.com

Investor Relations Contact:

James G. Jackson

Executive Vice President and Chief Financial Officer

(213) 225-5900 x273

Or

Pierre Hirsch of Kalt Rosen Group/Ruder Finn/West

(415) 692-3060

BBEP-IR

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