Exhibit 10.4
 
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of December 30,
2010 (together with any Exhibits hereto, the “Agreement”), is entered into by
and among BreitBurn Energy Partners L.P. (“BreitBurn Partners”), BreitBurn
Management Company, LLC (“BMC”), BreitBurn GP, LLC (“BBGP”), and James G.
Jackson (the “Executive”).  As used herein, the term “Employer” shall be deemed
to refer to BreitBurn Partners, BMC and/or BBGP, as the context requires, and
the term “BreitBurn Entity” shall be deemed to refer to each Employer and its
subsidiaries.
 
WHEREAS, the Executive, BMC and BBGP are currently parties to that certain
Amended and Restated Employment Agreement, dated as of August 15, 2008, and as
amended on December 30, 2008 (the “Prior Agreement”);
 
WHEREAS, the Executive and the Employer wish to amend and restate the terms of
their employment and service relationship; and
 
WHEREAS, the Employer and the Executive wish to enter into this Second Amended
and Restated Employment Agreement, in the capacities and on the terms set forth
in this Agreement, and to supersede and replace in its entirety the Prior
Agreement.
 
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
 
1.           Definitions.  All capitalized terms not defined herein shall have
the meanings set forth in Exhibit A hereto.
 
2.           Employment Period.  The Employer hereby agrees to continue to
employ the Executive, and the Executive hereby agrees to continue such
employment, subject to the terms and conditions of this Agreement, during the
period (the “Employment Period”) beginning on December 30, 2010 (the
“Commencement Date”) and ending on January 1, 2014 or such earlier date upon
which the Executive’s employment is terminated as provided herein.  Provided
that the Employment Period has not theretofore terminated, commencing on January
1, 2014 (and on each January 1 thereafter), the term of this Agreement shall
automatically be extended for one additional year, unless at least ninety days
prior to any such January 1, the Employer or the Executive gives written notice
to the other party that it or he, as the case may be, does not wish to so extend
the term of this Agreement.  Notwithstanding the foregoing, the Employment
Period shall end on the Date of Termination; provided that if the date of the
Executive’s Separation from Service is later than the Date of Termination and
the Executive remains an employee of at least one Employer until the date of
such Separation from Service, the Employment Period shall instead end on the
date of such Separation from Service.
 
 
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3.           Terms of Employment.
 
(a)          Position and Duties.
 
(i)           Position.  During the Employment Period, the Executive shall be
employed as the Executive Vice President and Chief Financial Officer of the
Employer.  The Executive shall also serve subsidiaries and affiliates of the
Employer in such other capacities, in roles consistent with his position as
Executive Vice President and Chief Financial Officer, in addition to the
foregoing as the Employer shall designate, and the Executive shall have such
other duties, responsibilities and authority as the Boards of Directors of BMC
or BBGP, as applicable, (the “Board” or “Boards” as the context requires and
“BBGP Board” for the Board of Directors of BBGP) may specify from time to time,
in each case, in roles consistent with his position as Executive Vice President
and Chief Financial Officer; provided that in all events the Executive shall
hold similar position(s) with any general partner of BreitBurn
Partners.  Subject to Section 3(a)(ii) and Section 6 below, in no event shall
the Executive be entitled to any additional compensation (from the Employer or
otherwise) for services rendered to BreitBurn Partners or any of its
subsidiaries.  The Executive shall report directly to the Chief Executive
Officer or, if applicable, the Co-Chief Executive Officers.

(ii)           Exclusivity.  During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is entitled under this
Agreement, the Executive shall devote substantially full-time attention and time
during normal business hours to the business and affairs of the BreitBurn
Entities except as set forth in this Section 3(a)(ii).  During the Employment
Period it shall not be a violation of this Agreement for the Executive to (A)
carry on other non-competitive business ventures with the consent of BBGP or its
nominee (not to be unreasonably withheld), (B) serve on the boards or committees
of such ventures or trade associations or civic or charitable organizations or
to engage in activities with such entities, (C) deliver lectures, fulfill
speaking engagements or teach at educational institutions, (D) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive’s responsibilities as an employee of the Employer
in accordance with this Agreement and (E) serve as an officer or director of
BreitBurn Energy Holdings LLC (“BEH”), any other general partner or any parent
of the general partner of BreitBurn Energy Company L.P. (“BECLP”) or otherwise
perform services for such entities, any of their subsidiaries or
operations.  The Executive shall be entitled to retain all compensation
attributable to activities permitted under this Section 3(a)(ii).
 
(iii)           Location.  The Executive’s services shall be performed at the
headquarters of the Employer, and such location shall be in the Greater Los
Angeles metropolitan area.  Notwithstanding the foregoing, the Employer may from
time to time require the Executive to travel temporarily to other locations on
the business of the Employer (and/or other BreitBurn Entities).
 
(iv)           Operation of the Business.  It is the Employer’s current intent
to continue conducting its business in a manner that would not impede the
attainment of the Performance Objectives applicable to any Convertible
Performance Units granted to the Executive (the “CPUs”), provided that the
parties acknowledge that any action or inaction by the Board (or any other
person owing a fiduciary duty to the Employer) with respect to the conduct of
the Employer’s business must be consistent with the Board’s or such person’s
view of applicable fiduciary duties and law.  Accordingly, the Employer agrees
that, provided that its actions and inactions are consistent with applicable
fiduciary duties and law, the Employer shall not take any action (or permit any
inaction) that materially impedes the attainment of the Performance Objectives
applicable to the CPUs.  Notwithstanding the foregoing, nothing contained in
this Section 3(a)(iv) nor any breach thereof shall create any right in the
Executive (or any successor in interest to the Executive) to enjoin, preclude,
constrain or otherwise interfere with any lawful action taken by or on behalf of
the Employer, whether by injunction, restraining order, other equitable relief
or otherwise or shall serve as the basis for any claim by the Executive for any
punitive, consequential or incidental damages, and the Executive hereby agrees
that his sole remedy for a breach of this Section 3(a)(iv) shall be limited to
the payments and benefits to which he may be entitled under the terms of this
Agreement in the event that he terminates his employment for Good Reason.
 
 
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(b)          Compensation.
 
(i)           Base Salary.  During the Employment Period, the Executive shall
receive a base salary (the “Base Salary”) at an annual rate of $340,000, as the
same may be increased (but not decreased) thereafter in the discretion of the
Employer.  The Base Salary shall be paid at such regular intervals as the
Employer pays executive salaries generally, but in no event less frequently than
monthly. During the Employment Period, the Base Salary shall be reviewed at
least annually by the Employer for possible increase in the discretion of the
Employer.  Any increase in the Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement.  The Base Salary
shall not be reduced after any such increase, and the term Base Salary as
utilized in this Agreement shall refer to the Base Salary as so increased.
 
(ii)           Short-Term Incentives.  For each calendar year ending during the
Employment Period, the Executive shall be eligible to participate in the
Employer’s short-term incentive plan at the Executive Vice President level and
to earn an annual cash bonus based on the achievement of performance criteria
established by the Board as soon as administratively practicable following the
beginning of each such year (the “Annual Bonus”).  For each calendar year during
the Employment Period (including for all of 2010), (A) the target Annual Bonus
shall be an amount equal to 75% of the Executive’s Base Salary (the “Target
Bonus”), and (B) the maximum Annual Bonus shall be an amount equal to 150% of
the Executive’s Base Salary.  The Employer shall pay the Annual Bonus (if any)
for each such calendar year in a single, cash, lump sum after the end of the
applicable calendar year in accordance with procedures established by the Board,
but in no event later than the fifteenth day of the third month following the
end of such calendar year, subject to and conditioned upon the Executive’s
continued employment with the Employer through the date of payment of such
Annual Bonus (except as otherwise provided in Section 5 hereof).
 
(iii)           Long Term Incentives. The Executive shall be eligible to receive
additional awards under the First Amended and Restated BreitBurn Energy Partners
L.P. 2006 Long-Term Incentive Plan or any successor thereto (the “Plan”) and to
participate in any future long-term incentive programs available generally to
the Peer Executives in the future, both as determined in the sole discretion of
the BBGP Board or, if applicable, a committee thereof.  Subject to Section 12(c)
and Section 13(j) hereof, with respect to any equity and/or long-term incentive
award agreements (“LTIP Award Agreements”) in effect as of the date of this
Agreement, any reference to the Prior Agreement, including its definitions,
shall be deemed to be a reference to this Agreement.
 
 
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(iv)           Benefit Plans and Policies.  During the Employment Period, the
Executive and the Executive’s eligible dependents shall be eligible to
participate in the savings and retirement plans and policies, welfare plans and
policies (including, without limitation, medical and dental) and fringe benefit
plans and policies of the Employer, in each case, that are made generally
available to the Peer Executives on a basis no less favorable than that provided
generally to the Peer Executives.  Notwithstanding the foregoing, nothing herein
shall, or shall be construed so as to, require the Employer to adopt or continue
any plan or policy or to limit the Employer’s right to amend or terminate any
such plan or policy at any time.
 
(v)           Automobile.  During the Employment Period, the Employer shall pay
directly, or the Executive shall be entitled to receive prompt reimbursement of,
actual expenses of up to $1,000 per month associated with the lease or purchase
of an automobile, in addition to which the Employer shall pay or reimburse
expenses related to the maintenance and operation of such automobile in
accordance with the Employer’s automobile reimbursement policy applicable to the
Peer Executives, as in effect from time to time.
 
(vi)           Expenses.  During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for reasonable expenses incurred by the
Executive on behalf of or in furtherance of the business of any BreitBurn Entity
pursuant to the terms and conditions of the Employer’s applicable expense
reimbursement policies.  To the extent that any such expenses or any other
reimbursements or in-kind benefits provided to the Executive pursuant to this
Agreement or the Prior Agreement are deemed to constitute compensation to the
Executive subject to Code Section 409A, including without limitation any
payments or reimbursements in accordance with Section 3(b)(iv), 3(b)(v) or this
Section 3(b)(vi), such expenses shall be reimbursed no later than December 31 of
the year following the year in which the expense was incurred.  The amount of
any such compensatory expenses so reimbursed or in-kind benefits provided in one
year shall not affect the amount eligible for reimbursement or in-kind benefits
provided in any subsequent year and the Executive’s right to receive such
reimbursements or in-kind benefits shall not be subject to liquidation or
exchange for any other benefit.
 
(vii)           Vacation.  During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the Employer’s applicable vacation
policy, but in no event less than five (5) weeks per year.
 
4.            Termination of Employment.
 
(a)           Death or Disability.  The Executive’s employment with the Employer
shall terminate automatically upon the Executive’s death.  In addition, if the
Board determines in good faith that the Executive has incurred a Disability, it
may terminate the Executive’s employment upon thirty days’ written notice
provided in accordance with Section 13(b) hereof if the Executive shall not have
returned to full-time performance of the Executive’s duties hereunder prior to
the expiration of such thirty-day notice period.
 
(b)           With or Without Cause.  The Employer may terminate the Executive’s
employment for Cause or without Cause at any time, provided, that the Employer
may not terminate the Executive’s employment for Cause prior to obtaining the
requisite approval of the Board as required by the definition of “Cause.”
 
 
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(c)           With or Without Good Reason.  The Executive may terminate his
employment for Good Reason or without Good Reason.
 
(d)           Notice of Termination.  Any termination by the Employer or the
Executive shall be communicated by a Notice of Termination to the other parties
hereto given in accordance with Section 13(b) hereof.  Except as otherwise
required in the definition of Good Reason, the failure by the Executive or the
Employer to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Executive or the Employer, respectively, hereunder or preclude the
Executive or the Employer, respectively, from asserting such fact or
circumstance in enforcing the Executive’s or the Employer’s rights hereunder.
 
5.            Obligations of the Employer upon Termination; Change in
Control.  For the avoidance of doubt, for purposes of this Section 5, a
termination of the Executive’s employment with the Employer shall occur if the
Executive’s employment is terminated with any Employer; provided, however, that
in the event that the Executive’s services with one or more, but not all,
Employers or BreitBurn Entities are terminated or reduced by reason of an
internal restructuring (including, without limitation, a transfer or
reassignment of employment between such entities), such termination or reduction
shall not constitute a termination of employment hereunder and shall not
constitute Good Reason if, immediately following such event, the Executive
retains the same position, authority, duties, and responsibilities with respect
to the business conducted by the BreitBurn Entities immediately prior to such
event and within the overall organizational structure that includes the
remaining Employers (or the Employers’ successors).  Subject to the preceding
sentence, the parties hereby acknowledge that changes in the Executive’s status
as an employee of an Employer or a BreitBurn Entity (including any transfer of
the Executive’s employment between such entities) may, but shall not
necessarily, constitute Good Reason hereunder, and that the effect of such
changes on the Executive’s employment relationship shall be considered in
determining whether Good Reason exists hereunder.
 
(a)           Good Reason; Other Than for Cause, Death or Disability.  If,
during the Employment Period, the Employer terminates the Executive’s employment
without Cause (other than as a consequence of the Executive’s death or
Disability, which terminations shall be governed by Section 5(c) below), or the
Executive terminates his employment with the Employer for Good Reason, in either
case, constituting a Separation from Service, then the Executive shall be
entitled to receive the payments and benefits described below in this Section
5(a).
 
(i)           (A) The Executive shall be paid, in a single lump-sum payment
within thirty (30) days after the Executive’s Separation from Service (or any
shorter period prescribed by law), the aggregate amount of (1) the Executive’s
earned but unpaid Base Salary and accrued but unpaid vacation pay, if any,
through the Date of Termination, and (2) any unreimbursed business expenses or
other payments incurred by the Executive through the Date of Termination that
are reimbursable under Section 3(b)(vi) above; and (B) to the extent not
theretofore paid or provided, the Employer shall timely pay or provide to the
Executive any accrued benefits and other amounts or benefits required to be paid
or provided prior to the Date of Termination under any other plan, program,
policy, practice, contract or agreement of the Employer and its affiliates
according to their terms, including, without limitation, pursuant to any
outstanding LTIP Award Agreement (the payments and benefits described in this
Section 5(a)(i), the “Accrued Obligations”).
 
 
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(ii)           In addition to the Accrued Obligations, provided that the
Executive executes and delivers to the Employer a general release and waiver of
claims substantially in the form attached hereto as Exhibit B (as such form may
be updated to reflect changes in law, the “Release”) within forty-five (45) days
after the Executive’s Separation from Service and does not revoke such Release,
and further subject to Section 12 below, the Executive shall be entitled to
receive the following payments and benefits (the “Severance”):
 
(A)          Provided that the date of such Separation from Service occurs prior
to the date on which the Executive reaches age seventy (70), a payment (the
“Cash Severance Payment”) equal to one and one-half (1.5) times (the “Severance
Multiple”) the sum of (1) the Executive’s Base Salary as in effect immediately
prior to the Date of Termination (without regard to any reduction giving rise to
Good Reason), plus (2) the Executive’s Target Bonus as in effect immediately
prior to the Date of Termination (without regard to any reduction giving rise to
Good Reason) (the “Bonus Amount”), payable on the sixtieth (60th) day after the
date on which the Executive incurs a Separation from Service;
 
(B)          For a period of eighteen (18) months following the date on which
the Executive incurs a Separation from Service, but in no event longer than the
period of time during which the Executive would be entitled to continuation
coverage under Code Section 4980B absent this provision (the “COBRA Period”),
the Executive and the Executive’s eligible dependents shall continue to be
provided with medical, prescription and dental benefits at the levels in effect
immediately prior to the Date of Termination at the same cost to the Executive
as immediately prior to the Date of Termination, provided that the Executive
properly elects continuation healthcare coverage under Code Section 4980B;
following such continuation period, any further continuation of such coverage
under applicable law shall be at the Executive’s sole expense; provided,
however, that (a) if any plan pursuant to which such benefits are provided is
not, or ceases prior to the expiration of the period of continuation coverage to
be, exempt from the application of Code Section 409A under Treasury Regulation
Section 1.409A-1(a)(5), or (b) the Employer is otherwise unable to continue to
cover the Executive under its group health plans, then, in either case, an
amount equal to the monthly plan premium payment shall thereafter be paid to the
Executive as currently taxable compensation in substantially equal monthly
installments over the COBRA Period (or the remaining portion
thereof).  Notwithstanding the foregoing, the Executive and his dependents shall
cease to receive such medical, prescription and dental benefits on the date that
the Executive becomes eligible to receive benefits under another
employer-provided group health plan;
 
 
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(C)          Any RPUs and CPUs awarded prior to the Commencement Date shall be
treated in accordance with the terms of the applicable LTIP Award
Agreements.  In addition, except for any CPUs or other performance-vesting
awards, any other equity and/or long-term incentive awards awarded on or after
the Commencement Date shall fully vest on the date of the Executive’s Separation
from Service, with any vested awards which are exercisable remaining exercisable
for the remainder of their original terms and any awards subject to Code Section
409A remaining payable in accordance with the terms of the applicable award
agreement;

(D)          An amount equal to the product of the (1) the Bonus Amount, and (2)
a fraction, the numerator of which shall be the number of days elapsed through
the Date of Termination in the calendar year in which the Date of Termination
occurs and the denominator of which shall be 365 (the “Pro-Rata Bonus”), payable
in the calendar year following the calendar year in which the Executive’s
Separation from Service occurs, but in no event later than the fifteenth day of
the third month following the end of the calendar year in which the Date of
Termination occurs; and

(E)          Any unpaid Annual Bonus that would have become payable to the
Executive pursuant to Section 3(b)(ii) hereof in respect of any calendar year
that ends on or before the Date of Termination had the Executive remained
employed through the payment date of such Annual Bonus, payable in the calendar
year in which the Separation from Service occurs, but in no event later than the
date in such calendar year on which annual bonuses are paid to the Peer
Executives generally.

(b)           Cause; Resignation Other than for Good Reason.  If the Executive
incurs a Separation from Service because the Employer terminates the Executive’s
employment for Cause or the Executive terminates his employment other than for
Good Reason, the Employer shall pay to the Executive the Accrued Obligations
within thirty days after the Executive’s Separation from Service (or any shorter
period prescribed by law) or, in the case of payments or benefits described in
Section 5(a)(i)(B) above, as such payments or benefits become due.  Any
outstanding equity awards, including, without limitation, the RPUs and the CPUs,
shall be treated in accordance with the terms of the governing plan and award
agreement.
 
(c)           Death or Disability.  If the Executive incurs a Separation from
Service by reason of the Executive’s death or Disability during the Employment
Period:
 
(i)           The Accrued Obligations shall be paid to the Executive’s estate or
beneficiaries or to the Executive, as applicable, within thirty days after the
Executive’s Separation from Service (or any shorter period prescribed by law)
or, in the case of payments or benefits described in Section 5(a)(i)(B) above,
as such payments or benefits become due;
 
(ii)           In addition to the Accrued Obligations, subject to the
Executive’s (or his estate’s) execution and delivery to the Employer of a
Release within forty-five (45) days after the Executive’s Separation from
Service and non- revocation of such Release, the Executive (or his estate or
beneficiaries, if applicable) shall be entitled to receive the following
payments and benefits (the “Death/Disability Payments”):
 
 
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(A)          (1) the RPUs shall vest in full upon the Executive’s Separation
from Service and shall convert into Units as set forth in the applicable award
agreement; and (2) the CPUs shall vest and convert into Units as set forth in
the applicable award agreement.  In addition, except for any CPUs or other
performance-vesting awards, any other equity and/or long-term incentive awards
awarded on or after the Commencement Date shall fully vest on the date of the
Executive’s Separation from Service, with any vested awards which are
exercisable remaining exercisable for the remainder of their original terms and
any awards subject to Code Section 409A remaining payable in accordance with the
terms of the applicable award agreement;
 
(B)          For a period of eighteen (18) months following the date on which
the Executive incurs a Separation from Service, but in no event longer than the
COBRA Period, the Executive and the Executive’s eligible dependents shall
continue to be provided with medical, prescription and dental benefits as if the
Executive’s employment had not been terminated at the same cost to the Executive
(or the Executive’s estate or dependents) as immediately prior to the Date of
Termination provided that the Executive or his dependents, if applicable,
properly elect continuation healthcare coverage under Code Section 4980B;
following such continuation period, any further continuation of such coverage
under applicable law shall be at the Executive’s (or his estate’s or
dependents’) sole expense; provided, however, that (i) if any plan pursuant to
which such benefits are provided is not, or ceases prior to the expiration of
the period of continuation coverage to be, exempt from the application of Code
Section 409A under Treasury Regulation Section 1.409A-1(a)(5), or (ii) the
Employer is otherwise unable to continue to cover the Executive under its group
health plans, then, in either case, an amount equal to the monthly plan premium
payment shall thereafter be paid to the Executive as currently taxable
compensation in substantially equal monthly installments over the COBRA Period
(or the remaining portion thereof);
 
(C)          The Pro-Rata Bonus, payable in the calendar year following the
calendar year in which the Executive’s Separation from Service occurs, but in no
event later than the fifteenth day of the third month following the end of the
calendar year in which the Date of Termination occurs; and

(D)          Any unpaid Annual Bonus that would have become payable to the
Executive pursuant to Section 3(b)(ii) hereof in respect of any calendar year
that ends on or before the Date of Termination, had the Executive remained
employed through the payment date of such Annual Bonus, payable in the calendar
year in which the Separation from Service occurs, but in no event later than the
date in such calendar year on which annual bonuses are paid to the Peer
Executives generally.

(d)          Non-renewal.

(i)           Employer Non-Renewal.    If the Employer elects not to renew the
Employment Period in accordance with Section 2 above and, at the time of such
non-renewal, the Executive is willing and able to continue providing services in
accordance with the terms and conditions of the Employment Agreement, the
Executive’s employment with all Employer entities (and any other BreitBurn
Entities with whom the Executive may be or become employed) shall terminate as
of the last day of the Employment Period and such nonrenewal shall be treated
for purposes of Section 5(a) and Section 5(e) of this Agreement as a termination
of the Executive’s employment by the Employer without Cause as of the last day
of the Employment Period.
 
 
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(ii)           Executive Non-Renewal.    In the event that the Executive incurs
a Separation from Service by reason of the Executive’s election not to renew the
Employment Period in accordance with Section 2 above, the Employer shall pay to
the Executive the Accrued Obligations within thirty days after the Executive’s
Separation from Service (or any shorter period prescribed by law) or, in the
case of payments or benefits described in Section 5(a)(i)(B) above, as such
payments or benefits become due.  Any outstanding equity awards, including,
without limitation, the RPUs and the CPUs, shall be treated in accordance with
the terms of the governing plan and award agreement.
 
The Executive’s election not to renew the Employment Period and a termination of
his employment by the Executive resulting therefrom shall be deemed to
constitute a termination by the Executive without Good Reason for purposes of
this Agreement as of the last day of the Employment Period.

.
(e)
Change in Control.

(i)                      In the event that a Change in Control occurs during the
Employment Period, any RPUs and CPUs awarded prior to the Commencement Date
shall be treated in accordance with the terms of the applicable award
agreements.  In addition, except for any CPUs or other performance-vesting
awards, any other equity and/or long-term incentive awards awarded on or after
the Commencement Date shall fully vest upon or immediately prior to the Change
in Control, with any vested awards which are exercisable remaining exercisable
for the remainder of their original terms and any awards subject to Code Section
409A remaining payable in accordance with the terms of the applicable award
agreement.

(ii)                      If, during the period beginning sixty (60) days prior
to and ending two (2) years immediately following a Change in Control, either
(A) the Employer terminates the Executive’s employment without Cause (other than
as a consequence of the Executive’s death or Disability), or (B) the Executive
terminates his employment with the Employer for Good Reason, in either case,
constituting a Separation from Service, the Executive shall be entitled to the
Severance payments and benefits described in Section 5(a), subject to and in
accordance with the terms and conditions set forth in Section 5(a) (including,
without limitation, the requirement that the Executive execute, deliver and not
revoke the Release), except that for purposes of this Section 5(e), the
Severance Multiple for the Cash Severance Payment shall be two and one-half
(2.5) instead of one and one-half (1.5); provided, however, that the portion of
the Cash Severance Payment in excess of the amount payable under Section
5(a)(ii)(A) that is attributable to the increase in the Severance Multiple shall
be paid in a single, cash, lump-sum payment on the later to occur of (I) the
sixtieth (60th) day after the date on which the Executive incurs a Separation
from Service, and (II) the tenth (10th) day following the date on which such
Change in Control occurs (which, for the avoidance of doubt, shall in no event
be later than the last day of the applicable two and one-half (2 ½) month
short-term deferral period with respect to such payment, within the meaning of
Treasury Regulation Section 1.409A-1(b)(4)).

 
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(iii)                      (A)           Notwithstanding any other provisions of
this Agreement or otherwise, in the event that any payment, entitlement or
benefit paid or payable to, or for the benefit of, the Executive (including any
payment, entitlement or benefit paid or payable in connection with a Change in
Control or the termination of the Executive’s employment, whether pursuant to
the terms of this Agreement or any other plan, arrangement or agreement) (all
such payments, entitlements and benefits being hereinafter referred to as the
“Total Payments”) would be subject (in whole or part), to the excise tax imposed
under Code Section 4999 (the “Excise Tax”), then the Total Payments which
constitute “parachute payments” within the meaning of Code Section 280G and its
regulations shall be reduced (but not below zero) as set forth herein, to the
smallest extent necessary so that no portion of the Total Payments is subject to
the Excise Tax but only if (i) the net amount of such Total Payments, as so
reduced (and after subtracting the net amount of federal, state and local income
taxes on such reduced Total Payments and after taking into account the phase out
of itemized deductions and personal exemptions attributable to such reduced
Total Payments) is greater than or equal to (ii) the net amount of such Total
Payments without such reduction (but after subtracting the net amount of
federal, state and local income taxes on such Total Payments and the amount of
Excise Tax to which the Executive would be subject in respect of such unreduced
Total Payments and after taking into account the phase out of itemized
deductions and personal exemptions attributable to such unreduced Total
Payments).  The Total Payments which constitute “parachute payments” within the
meaning of Code Section 280G and its regulations shall be reduced in the
following order: (A) reduction of any cash severance payments otherwise payable
to the Executive, including without limitation, the Cash Severance Payment and
the Pro-Rata Bonus (but with respect to the Pro-Rata Bonus only that portion of
the full amount which is treated as contingent on the Code Section 280G change
in control pursuant to paragraph (a) of Treas. Reg. §1.280G-1, Q/A 24), in the
inverse order of their originally scheduled payment dates, (B) reduction of any
other cash payments or benefits otherwise payable to the Executive, but
excluding any payment attributable to the acceleration of vesting or payment
with respect to any equity or long-term incentive award, in the inverse order of
their originally scheduled payment dates , (C) reduction of any other payments
or benefits otherwise payable to the Executive on a pro-rata basis or such other
manner that complies with Code Section 409A, but excluding any payment
attributable to the acceleration of vesting and payment with respect to any
equity or long-term incentive award,  (D) reduction of any payments attributable
to the acceleration of vesting or payment with respect to any equity or
long-term incentive award other than RPUs or any stock option or stock
appreciation award, in the inverse order of their originally scheduled payment
dates, (E)  reduction of any payments attributable to the acceleration of
vesting or payment with respect to any RPUs, in the inverse order of their
originally scheduled payment dates, and (F) reduction of any payments
attributable to the acceleration of vesting or payment with respect to any stock
option or stock appreciation right.

 
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(B)           A determination as to whether any Excise Tax is payable with
respect to the Total Payments and if so, as to the amount thereof, and a
determination as to whether any reduction in the Total Payments is required
pursuant to the provisions of paragraph (A) above, and if so, as to the amount
of the reduction so required, shall be made by an independent auditor of
nationally recognized standing selected by the Employer (other than the
accounting firm that is regularly engaged by the Employer or any party that is
effecting the change in control) (“Independent Advisor”), all of whose fees and
expenses shall be borne and directly paid solely by the Employer.  The parties
hereto shall cooperate to cause the Independent Advisor to timely provide a
written report of its determinations, including detailed supporting
calculations, both to the Executive and to the Employer.

(C)           For purposes of determining whether and the extent to which the
Total Payments will be subject to the Excise Tax, (i) no portion of the Total
Payments the receipt or enjoyment of which the Executive shall have waived at
such time and in such manner as not to constitute a “payment” within the meaning
of Code Section 280G(b) shall be taken into account, (ii) no portion of the
Total Payments shall be taken into account which, in the written opinion of the
Independent Advisor, does not constitute a “parachute payment” within the
meaning of Code Section 280G(b)(2) (including by reason of Code Section
280G(b)(4)(A)) and, in calculating the Excise Tax, no portion of such Total
Payments shall be taken into account which, in the opinion of the Independent
Advisor, constitutes reasonable compensation for services actually rendered,
within the meaning of Code Section 280G(b)(4)(B), in excess of the Base Amount
(as defined in Code Section 280G(b)(3)) allocable to such reasonable
compensation, and (iii) the value of any non cash benefit or any deferred
payment or benefit included in the Total Payments shall be determined by the
Independent Advisor in accordance with the principles of Code Sections
280G(d)(3) and (4).

(e)           Termination of Offices and Directorships.  Upon termination of the
Executive’s employment for any reason, the Executive shall be deemed to have
resigned from all offices and directorships, if any, then held with the Employer
or any BreitBurn Entity, and shall take all actions reasonably requested by the
Employer to effectuate the foregoing.

 
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6.           Non-exclusivity of Rights.  Nothing in this Agreement shall prevent
or limit the Executive’s participation in any other plan, program, policy or
practice provided by any BreitBurn Entity (other than policies relating to
severance payments or obligations on termination of employment for any reason)
or by BEH or BECLP and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under any
contract or agreement with any BreitBurn Entity or with BEH or BECLP.  Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with any BreitBurn Entity or any of its affiliates at or subsequent to
the Date of Termination shall be payable, if at all, in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
 
7.           No Mitigation.  The Employer’s obligation to make the payments
provided for in this Agreement (including, without limitation, payments under
Section 5 hereof) and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Employer or any of their affiliates may have against
the Executive or others.  In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive as Severance or  Death/Disability Payments, and, except
as provided in Section 5(a)(ii)(B) hereof, such amounts shall not be reduced
whether or not the Executive obtains other employment.
 
8.           Executive’s Covenants.
 
(a)          Confidential Information.   The Executive shall hold in a fiduciary
capacity for the benefit of the Employer and each BreitBurn Entity all secret or
confidential information, knowledge and data relating to the Employer and each
BreitBurn Entity, and their respective businesses, including without limitation
any trade secrets, which shall have been obtained by the Executive during the
Executive’s employment with the Employer and which shall not be or have become
public knowledge or known within the relevant trade or industry (other than by
acts by the Executive or representatives of the Executive in violation of this
Agreement) (together, “Proprietary Information”).  The Executive shall not, at
any time during or after his employment, directly or indirectly, without the
prior written consent of the Board or as may otherwise be required by law or
legal process, use for his own benefit such Proprietary Information or
communicate or divulge any such Proprietary Information to anyone (other than an
authorized BreitBurn Entity or any such entity’s designee); provided, that if
the Executive receives actual notice that the Executive is or may be required by
law or legal process to communicate or divulge any such Proprietary Information,
unless otherwise prohibited by law or regulation, the Executive shall promptly
so notify the Board.  Anything herein to the contrary notwithstanding, the
provisions of this Section 8 shall not apply with respect to any litigation,
arbitration or mediation involving this Agreement or any other agreement between
the Executive and the Employer or any BreitBurn Entity; provided, that the
Executive shall take all reasonable steps to maintain such Proprietary
Information as confidential, including, without limitation, seeking protective
orders and filing documents containing such information under seal.   Nothing
herein shall be construed as prohibiting the Executive from using or disclosing
such Proprietary Information as may be reasonably necessary in his proper
performance of services hereunder.
 
 
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(b)          Non-Solicitation.

(i)           While employed by the Employer and for a period of two years
following the Date of Termination, regardless of the reason for the termination,
other than in the ordinary course of the Executive’s duties for the Employer or
any BreitBurn Entity, the Executive shall not, without the prior consent of the
Board, directly or indirectly solicit, induce, or encourage any employee of any
BreitBurn Entity or any of their respective affiliates who is employed on the
Date of Termination (or at any time within six  months of such date) to
terminate his or her employment with such entity; and

(ii)           While employed by the Employer and thereafter, regardless of the
reason for the termination, the Executive shall not, without the prior consent
of the Board, use any Proprietary Information to hire any employee of the
Employer or any BreitBurn Entity or any of their respective affiliates within
six months after that employee’s termination of employment with any BreitBurn
Entity or any of their respective affiliates.

The Employer acknowledges that its employees may join entities with which the
Executive is affiliated and that such event shall not constitute a violation of
this Agreement if the Executive was not involved in the solicitation, hiring or
identification of such employee as a potential recruit.

(c)           Irreparable Harm.  In recognition of the facts that irreparable
injury will result to the Employer in the event of a breach by the Executive of
his obligations under Sections 8(a) or 8(b) above, that monetary damages for
such breach would not be readily calculable, and that the Employer would not
have an adequate remedy at law therefor, the Executive acknowledges, consents
and agrees that, in the event of any such breach, or the threat thereof, the
Employer shall be entitled, in addition to any other legal remedies and damages
available, to specific performance thereof and to temporary and permanent
injunctive relief (without the necessity of posting a bond) to restrain the
violation or threatened violation of such obligations by the Executive.
 
(d)           Return of Property.  Upon the termination of the Executive’s
employment with the Employer for any reason, the Executive shall immediately
return and deliver to the Employer any and all Proprietary Information, and any
and all other papers, books, records, documents, memoranda and manuals, e-mail,
electronic or magnetic recordings or data, including all copies thereof,
belonging to the Employer or any other BreitBurn Entity or relating to their
business, in the Executive’s possession, whether prepared by the Executive or
others.  If at any time after the Employment Period, the Executive determines
that he has any Proprietary Information or other such materials in his
possession or control, or any copy thereof, the Executive shall immediately
return to the Employer all such information and materials, including all copies
and portions thereof.  Nothing herein shall prevent the Executive from retaining
a copy of his personal papers, information or documentation relating to his
compensation.

9.            Successors.
 
(a)           Assignment by the Executive.  This Agreement is personal to the
Executive and without the prior written consent of the Board shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution.  This Agreement, including any benefits or compensation payable
hereunder, shall inure to the benefit of and be enforceable by the Executive’s
legal representatives, including, without limitation, his heirs and/or
beneficiaries.  For the avoidance of doubt, if the Executive dies prior to the
payment of amounts that are owed to him under this Agreement, such amounts shall
be paid, in accordance with the terms of this Agreement, to the Executive’s
estate.
 
 
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(b)           Assignment by the Employer.  This Agreement shall inure to the
benefit of and be binding upon the Employer and its successors and assigns;
provided, that such assignment shall not relieve any Employer of its obligations
under Section 10 of this Agreement.  Except as specified in the preceding
sentence, no rights or obligations of the Employer under this Agreement may be
assigned or transferred by the Employer without the Executive’s prior written
consent, except that such rights or obligations may be assigned or transferred
in connection with an acquisition of all or substantially all of BreitBurn
Partners’ business or assets, whether by merger, consolidation, reorganization,
asset purchase or other similar corporate transaction, provided that the
assignee or transferee is the successor to all or substantially all of BreitBurn
Partners’ business or assets and assumes the liabilities, obligations and duties
of the Employer under this Agreement.
 
(c)           Express Assumption of Agreement.  The Employer shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Employer or any assign permitted under Section 9(b) above to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that the Employer would be required to perform it if no such succession had
taken place.  As used in this Section 9(c), “Employer” shall mean the Employer
as hereinbefore defined and any successor to its business and/or assets or
assigns as aforesaid which assumes and agrees to perform this Agreement by
operation of law or otherwise.
 
10.           Indemnification and Directors’ and Officers’ Insurance.
 
(a)           General.  During the Employment Period and thereafter, the
Employer shall indemnify the Executive to the fullest extent permitted under law
from and against any expenses (including but not limited to attorneys’ fees,
expenses of investigation and preparation and fees and disbursements of the
Executive’s accountants or other experts), judgments, fines, penalties and
amounts paid in settlement actually and reasonably incurred by the Executive in
connection with any proceeding in which the Executive was or is made party, was
or is involved (for example, as a witness) or is threatened to be made a party
to, in any case, by reason of the fact the Executive was or is employed by the
Employer or was performing services for any BreitBurn Entity.  Such
indemnification shall continue as to the Executive during the Employment Period
and for at least six years from the Date of Termination and in all events until
the expiration of the applicable statute of limitations with respect to acts or
omissions which occurred prior to his cessation of employment with the Employer
and shall inure to the benefit of the Executive’s heirs, executors and
administrators.  The Employer shall advance to the Executive all costs and
expenses incurred by him in connection with any proceeding covered by this
provision within twenty calendar days after receipt by the Employer of a written
request for such advance.  Such request shall include an undertaking by the
Executive to repay the amount of such advance if it shall ultimately be
determined that he is not entitled to be indemnified against any such costs
and/or expenses.
 
 
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(b)           Insurance.  The Employer agrees to maintain directors’ and
officers’ liability insurance policies covering the Executive on a basis no less
favorable than provided to the Peer Executives, which coverage shall continue as
to the Executive even if he has ceased to be a director, member, employee or
agent of the BreitBurn Entities with respect to acts or omissions which occurred
prior to such cessation.  The insurance contemplated under this Section 10(b)
shall inure to the benefit of the Executive’s heirs, executors and
administrators.
 
11.          Arbitration Agreement.
 
(a)           General. Any controversy, dispute or claim between the Executive
and any BreitBurn Entity, or any of their respective parents, subsidiaries,
affiliates or any of their officers, directors, agents or other employees,
relating to the Executive’s employment or the termination thereof, shall be
resolved by final and binding arbitration, at the request of any party
hereto.  The arbitrability of any controversy, dispute or claim under this
Agreement or any other agreement between the parties hereto shall be determined
by application of the substantive provisions of the Federal Arbitration Act
(9 U.S.C. sections 1 and 2) and by application of the procedural provisions of
California law, except as provided herein.  Arbitration shall be the exclusive
method for resolving any dispute and all remedies available from a court of
competent jurisdiction shall be available; provided, that either party may
request provisional relief from a court of competent jurisdiction if such relief
is not available in a timely fashion through arbitration.  The claims which are
to be arbitrated include, but are not limited to, any claim arising out of or
relating to this Agreement, the LTIP Award Agreements or the employment
relationship between the Executive and the Employer, claims for wages and other
compensation, claims for breach of contract (express or implied), claims for
violation of public policy, wrongful termination, tort claims, claims for
unlawful discrimination and/or harassment (including, but not limited to, race,
religious creed, color, national origin, ancestry, physical disability, mental
disability, gender identity or expression, medical condition, marital status,
age, pregnancy, sex or sexual orientation) to the extent allowed by law, and
claims for violation of any federal, state, or other government law, statute,
regulation, or ordinance, except for claims for workers’ compensation and
unemployment insurance benefits.  This Agreement shall not be interpreted to
provide for arbitration of any dispute that does not constitute a claim
recognized under applicable law.
 
(b)           Selection of Arbitrator.  The Executive and the Employer shall
select a single neutral arbitrator by mutual agreement.  If the Executive and
the Employer are unable to agree on a neutral arbitrator within thirty days of a
demand for arbitration, either party may elect to obtain a list of arbitrators
from the Judicial Arbitration and Mediation Service or the American Arbitration
Association, and the arbitrator shall be selected by alternate striking of names
from the list until a single arbitrator remains.  The party initiating the
arbitration shall be the first to strike a name.  Any demand for arbitration
must be in writing and must be made by the aggrieved party within the statute of
limitations period provided under applicable state and/or federal law for the
particular claim(s).  Failure to make a written demand within the applicable
statutory period constitutes a waiver of the right to assert that claim in any
forum.
 
 
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(c)           Venue; Process.  Arbitration proceedings shall be held in Los
Angeles, California.  The arbitrator shall apply applicable state and/or federal
substantive law to determine issues of liability and damages regarding all
claims to be arbitrated, and shall apply the Federal Rules of Evidence to the
proceeding.  The parties shall be entitled to conduct reasonable discovery and
the arbitrator shall have the authority to determine what constitutes reasonable
discovery.  The arbitrator shall hear motions for summary judgment/adjudication
as provided in the Federal Rules of Civil Procedure.  Within thirty days
following the hearing and the submission of the matter to the arbitrator, the
arbitrator shall issue a written opinion and award which shall be signed and
dated.  The arbitrator’s award shall decide all issues submitted by the parties,
but the arbitrator may not decide any issue not submitted.  The opinion and
award shall include factual findings and the reasons upon which the decision is
based.  The arbitrator shall be permitted to award only those remedies in law or
equity which are requested by the parties and allowed by law.
 
(d)           Costs.  The cost of the arbitrator and other incidental costs of
arbitration that would not be incurred in a court proceeding shall be borne by
the Employer.  The parties shall each bear their own costs and attorneys’ fees
in any arbitration proceeding, provided, that the arbitrator shall have the
authority to require either party to pay the costs and attorneys’ fees of the
other party to the extent permitted under applicable federal or state law, as a
part of any remedy that may be ordered.
 
(e)           Waiver of Rights.  Both the Employer and the Executive understand
that, by agreeing to use arbitration to resolve disputes, they are giving up any
right that they may have to a judge or jury trial with regard to all issues
concerning employment or otherwise covered by this Section 11.
 
12.           Internal Revenue Code Section 409A.
 
(a)           The parties hereto intend that all payments, compensation and
benefits to be made or provided to the Executive hereunder will be paid or
provided in compliance with all applicable requirements of Code Section 409A or
an exemption therefrom, and the provisions of this Agreement shall be construed
and administered in accordance with and to implement such intent.  In further of
the foregoing, the provisions set forth below shall apply not withstanding any
other provisions in this Agreement to the contrary.  To the extent that the
Board determines that any compensation or benefits payable under this Agreement
may not be compliant with or exempt from Code Section 409A, the Board and the
Executive shall cooperate and work together in good faith to timely amend this
Agreement in a manner intended to comply with the requirements of Code Section
409A or an exemption therefrom (including amendments with retroactive effect),
or take any other actions as they deem necessary or appropriate to (a) exempt
such compensation and benefits from Code Section 409A and/or preserve the
intended tax treatment with respect to such compensation and benefits, or (b)
comply with the requirements of Code Section 409A.  To the extent applicable,
this Agreement shall be interpreted in accordance with the provisions of Code
Section 409A.
 
(b)           Potential Six-Month Delay.  Notwithstanding anything to the
contrary in this Agreement, no compensation and benefits, including without
limitation any Severance payments or Death/Disability Payments, shall be paid to
the Executive during the 6-month period following his Separation from Service to
the extent that the Employer reasonably determines that paying such amounts at
the time or times indicated in this Agreement would result in a prohibited
distribution under Code Section 409A(a)(2)(b)(i).  If the payment of any such
amounts is delayed as a result of the previous sentence, then on the first
business day following the end of such 6-month period (or such earlier date upon
which such amount can be paid under Code Section 409A without resulting in a
prohibited distribution, including as a result of the Executive’s death), the
Employer shall pay to Executive (or his estate, if applicable) a lump-sum amount
equal to the cumulative amount that would have otherwise been payable to the
Executive during such 6-month period, plus interest thereon from the date of the
Executive’s Separation from Service through the payment date at a rate equal to
the then-current “applicable Federal rate” determined under Code Section
7872(f)(2)(A).

 
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(c)           Notwithstanding anything to the contrary in this Agreement, for
purposes of determining any compensation or benefits payable to the Executive
under this Agreement, including, without limitation, any equity awards that are
outstanding as of the date hereof pursuant to any LTIP Award Agreements, any
reference to the Prior Agreement shall be deemed to be a reference to this
Agreement; provided that if any amendment herein to the definition of “Good
Reason” (as defined in the Prior Agreement) or to any other provision of the
Prior Agreement would result in additional taxes, interest or penalties under
Code Section 409A, then such definition or provision shall continue to refer to
the definition of Good Reason or provision, as applicable, in the Prior
Agreement.

13.           Miscellaneous.
 
(a)           Governing Law; Captions; Amendment.  This Agreement shall be
governed by and construed in accordance with the laws of the State of
California, without reference to principles of conflict of laws.  The captions
of this Agreement are not part of the provisions hereof and shall have no force
or effect.  This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.
 
(b)           Notice.  All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party, by registered
or certified mail, return receipt requested, postage prepaid, or by any other
means agreed to by the parties, addressed as follows:
 
If to the Executive:  at the Executive’s most recent address on the records of
the Employer;
 
If to the Employer:
 
BreitBurn Management Company LLC
Attn.:     Halbert S. Washburn
515 South Flower Street, Suite 4800
Los Angeles, CA  90071
 
or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.
 
 
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(c)           Code of Conduct.  The Executive hereby agrees to comply with the
Employer’s Code of Business Conduct and Code of Ethics for Chief Executive
Officers and Senior Officers, receipt of which the Executive hereby
acknowledges.
 
(d)           Severability; Provisions Survive.  The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.  The
respective rights and obligations of the parties hereunder shall survive any
expiration or termination of the Employment Period to the extent necessary to
carry out the intentions of the parties as embodied in this Agreement.
 
(e)           Withholding.  The Employer may withhold from any amounts payable
under this Agreement such federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
 
(f)           Employer Representations.  The Employer represents and warrants
that (i) the execution, delivery and performance of this Agreement by it has
been fully and validly authorized, (ii) the entities signing this Agreement are
duly authorized to do so, (iii) the execution and delivery of this Agreement
does not violate any order, judgment or decree or any agreement, plan or
corporate governance document to which it is a party or by which it is bound and
(iv) upon execution and delivery of this Agreement by the parties, it shall be a
valid and binding obligation of the Employer, enforceable against it in
accordance with its terms, except to the extent that enforceability may be
limited by applicable laws, including, without limitation, bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights
generally.
 
(g)           Executive Representations and Acknowledgements.  The Executive
hereby represents and warrants to the Employer that (i) the Executive is
entering into this Agreement voluntarily and that the performance of his
obligations hereunder will not violate any agreement between the Executive and
any other person, firm, organization or other entity, and (ii) the Executive is
not bound by the terms of any agreement with any previous employer or other
party to refrain from competing, directly or indirectly, with the business of
such previous employer or other party that would be violated by his entering
into this Agreement and/or providing services to the Employer or its affiliates
pursuant to the terms of this Agreement.  The Executive hereby acknowledges
(A) that the Executive has consulted with or has had the opportunity to consult
with independent counsel of his own choice concerning this Agreement, and has
been advised to do so by the Employer, and (B) that the Executive has read and
understands this Agreement, is fully aware of its legal effect, and has entered
into it freely based on his own judgment.  Without limiting the generality of
the foregoing, the Executive acknowledges that he has had the opportunity to
consult with his own independent legal counsel to review this Agreement for
purposes of compliance with the requirements of Code Section 409A or an
exemption therefrom, and that he is relying solely on the advice of his
independent legal counsel for such purposes.
 
(h)           No Waiver.  No party’s failure to insist upon strict compliance
with any provision of this Agreement or to assert any right hereunder shall be
deemed to be a waiver of such provision or right or any other provision or right
arising under this Agreement.  Any waiver of any provision or right under this
Agreement shall be effective only if in a writing, specifically referencing the
provision being waived and signed by the party against whom the enforcement of
the waiver is being sought.
 
 
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(i)           Recoupment.  To the extent required by applicable law or any
applicable securities exchange listing standards adopted pursuant to the
Dodd-Frank Wall Street Reform and Consumer Protection Act, any amounts paid or
payable to the Executive under this Agreement (including, without limitation,
amounts paid prior to the effectiveness of such applicable law or listing
standards) shall be subject to forfeiture, repayment or recapture, but only to
the extent required by such applicable law or listing standards.
 
(j)           Entire Agreement; Construction.  This Agreement, together with the
LTIP Award Agreements and the Employer’s Code of Business Conduct and Code of
Ethics for Chief Executive Officers and Senior Officers, constitutes the entire
agreement of the parties with respect to the subject matter hereof and shall
supersede and replace all prior representations, warranties, agreements and
understandings, both written and oral, made by the Employer, any other BreitBurn
Entity or the Executive with respect to the subject matter covered hereby,
including without limitation, the Prior Agreement, provided, that to the extent
there is any inconsistency between this Agreement and the Employer’s Code of
Business Conduct and Code of Ethics for Chief Executive Officers and Senior
Officers, the terms of this Agreement shall control; provided, further, that
Section 3 of the Prior Agreement to the extent it is applicable to compensation
and benefits due to the Executive prior to the date of this Agreement and any
section of the Prior Agreement whose continued effectiveness is necessary in
order to avoid additional taxes, interest and penalties under Code Section 409A
shall remain in full force and effect and shall control over any conflicting
provisions of this Agreement.  The parties hereby agree that in connection with
the amendment of the Prior Agreement pursuant to this Agreement, the CPU
Agreement is hereby amended to delete Section 4(c) thereof in its entirety.  The
parties to this Agreement have participated jointly in the negotiation and
drafting of this Agreement.  If an ambiguity or question of intent or
interpretation arises with respect to any term or provision of this Agreement,
this Agreement shall be construed as if drafted jointly by the parties hereto,
and no presumption or burden of proof shall arise favoring or disfavoring any
party hereto by virtue of the authorship of any of the terms or provisions
hereof.
 
(k)           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
 
[Signature page follows]

 
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and the
Employer has caused these presents to be executed in its name on its behalf, all
as of the day and year first above written.
 
EXECUTIVE
 
 
James G. Jackson

 
BREITBURN ENERGY PARTNERS L.P.
 
By:  BreitBurn GP, LLC, its general partner
   
By:
 
Name:   Halbert S. Washburn
Title: Chief Executive Officer
 
BREITBURN MANAGEMENT COMPANY, LLC
 
By:  BreitBurn Energy Partners L.P., its sole member
   
By:
 
Name:   Halbert S. Washburn
Title: Chief Executive Officer
 
BREITBURN GP, LLC
   
By:
 
Name:   Halbert S. Washburn
Title: Chief Executive Officer

 
 
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EXHIBIT A
 
DEFINITIONS
 
“Accrued Obligations” has the meaning assigned thereto in Section 5(a)(i)
hereof.
 
“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with, the Person in question.  As used herein, the term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.
 
“Agreement” has the meaning assigned thereto in the Recitals hereof.
 
“Annual Bonus” has the meaning assigned thereto in Section 3(b)(ii) hereof.
 
“Base Salary” has the meaning assigned thereto in Section 3(b)(i) hereof.
 
“BBGP” has the meaning assigned thereto in the Recitals hereof.
 
“BBGP Board” has the meaning assigned thereto in Section 3(a)(i) hereof.
 
“BECLP” has the meaning assigned thereto in Section 3(a)(ii) hereof.
 
“BEH” has the meaning assigned thereto in Section 3(a)(ii) hereof.
 
“BMC” has the meaning assigned thereto in the Recitals hereof.
 
“Board” or “Boards” has the meaning assigned thereto in Section 3(a)(i) hereof.
 
“Bonus Amount” has the meaning assigned thereto in Section 5(a)(ii)(A) hereof.
 
“BreitBurn Entity” has the meaning assigned thereto in the Recitals hereof.
 
“BreitBurn Partners” has the meaning assigned thereto in the Recitals hereof.
 
“Cash Severance Payment” has the meaning assigned thereto in Section 5(a)(ii)(A)
hereof.
 
“Cause” means the following:
 
(i)           the willful and continued failure of the Executive to perform
substantially the Executive’s duties for the Employer or any BreitBurn Entity
(as described in the Recitals hereof) (other than any such failure resulting
from incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Employer (after a
vote to this effect by a majority of the Board) which specifically identifies
the manner in which the Board believes that the Executive has not substantially
performed the Executive’s duties and the Executive is given a reasonable
opportunity of not more than twenty (20) business days to cure any such failure
to substantially perform;
 
 
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(ii)           the willful engaging by the Executive in illegal conduct or gross
misconduct, in each case which is materially and demonstrably injurious to the
Employer or any BreitBurn Entity; or
 
(iii)           (A) any act of fraud, or material embezzlement or material theft
by the Executive, in each case, in connection with the Executive’s duties
hereunder or in the course of the Executive’s employment hereunder or (B) the
Executive’s admission in any court, or conviction, or plea of nolo contendere,
of a felony involving moral turpitude, fraud, or material embezzlement, material
theft or material misrepresentation, in each case, against or affecting the
Employer or any BreitBurn Entity.
 
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Employer or any
BreitBurn Entity.  Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Employer, including, without
limitation, the Board, or based upon the advice of counsel for the Employer
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Employer and the
BreitBurn Entities.  Notwithstanding the foregoing, termination of the
Executive’s employment shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution of the
Board duly adopted by an affirmative vote of the Board at a meeting of the Board
held for such purpose (after reasonable notice is provided to the Executive and
the Executive is given an opportunity, together with counsel for the Executive,
to be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in clauses (i), (ii) or
(iii) above, and specifying the particulars thereof in detail; provided, that if
the Executive is a member of the Board, the Executive shall not vote on such
resolution nor shall the Executive be counted.
 
“Change in Control” means, and shall be deemed to have occurred upon one or more
of the following events:
 
(i)            any “person” or “group” within the meaning of those terms as used
in Sections 13(d) and 14(d) of the Exchange Act, other than BreitBurn Partners,
any subsidiary of BreitBurn Partners, BreitBurn Energy Company L.P. (“BECLP”) or
an Affiliate of BECLP, shall become the beneficial owner, directly or
indirectly, by way of merger, consolidation, recapitalization, reorganization or
otherwise, of 50% or more of the combined voting power of the equity interests
in BMC, BBGP or BreitBurn Partners;
 
(ii)           the limited partners of BreitBurn Partners approve, in one or a
series of transactions, a plan of complete liquidation of BreitBurn Partners;
 
(iii)          the sale or other disposition by either BBGP or BreitBurn
Partners of all or substantially all of its assets in one or more transactions
to any Person other than BreitBurn Partners, any subsidiary of BreitBurn
Partners, BECLP or an Affiliate of BECLP;
 
 
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(iv)          a transaction resulting in a Person other than BreitBurn Partners,
any subsidiary of BreitBurn Partners, BECLP or an Affiliate of BECLP being the
general partner of BreitBurn Partners; or
 
(v)           any time at which individuals who, as of October 29, 2009,
constitute the BBGP Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the BBGP Board; provided, however, that any
individual becoming a director subsequent to October 29, 2009 whose election, or
nomination for election by BreitBurn Partner’s unitholders was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
or whose membership was required by any employment agreement with the Employer
will be considered as though such individuals were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as the result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Incumbent Board.
 
Notwithstanding the foregoing, if a Change in Control constitutes a payment
event with respect to any award or amount  which provides for the deferral of
compensation and is subject to Code Section 409A, then, to the extent required
to comply with Section 409A, the transaction or event described in clause (i),
(ii), (iii), (iv) or (v) above with respect to such award or amount must also
constitute a “change of control event” as defined in the Treasury Regulation
§1.409A-3(i)(5).
 
“Code” means the Internal Revenue Code of 1986, as amended and any regulations
or other official guidance promulgated thereunder.
 
“Commencement Date” has the meaning assigned thereto in Section 2 hereof.
 
“CPU Agreement” means that certain Convertible Phantom Unit Agreement by and
among BBGP and the Executive, evidencing the grant of CPUs to the Executive as
of December 26, 2007.
 
“CPUs” has the meaning assigned thereto in Section 3(a)(iv) hereof.
 
“Date of Termination” means (i) if the Executive’s employment is terminated by
the Employer without Cause (other than upon a notice of non-renewal), or by the
Executive with or without Good Reason, other than due to death or Disability,
the date specified in accordance with applicable provisions of this Agreement in
the Notice of Termination (which date shall not be more than thirty days after
the giving of such notice), provided, that any notice period may be waived by
the Employer without compensation in lieu thereof upon the Executive’s election
to terminate employment with or without Good Reason; (ii) if the Executive’s
employment is terminated by reason of the Executive’s death or Disability, the
date of the Executive’s death or the thirtieth day following notification by the
Employer of termination due to Disability in accordance with Section 4(a)
hereof, as the case may be; (iii) if the Executive’s employment is terminated
for Cause, the date of the receipt of the Notice of Termination by the Executive
or any later date specified therein; provided that such Notice of Termination
shall not be given until after the requisite Board vote provided for in the
definition of “Cause”; (iv) if either party provides a notice of non-renewal of
the Employment Period in accordance with Section 2 of the Agreement, the last
day of the then-current Employment Period; or (v) any other date mutually agreed
to by the parties hereto.
 
 
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“Death/Disability Payments” has the meaning assigned thereto in Section 5(c)(ii)
hereof.
 
“Disability” shall mean a “disability” within the meaning of Code Section 409A.
 
“Employer” has the meaning assigned thereto in the Recitals hereof.
 
“Employment Period” has the meaning assigned thereto in Section 2 hereof.
 
“Executive” has the meaning assigned thereto in the Recitals hereof.
 
“Excise Tax” has the meaning assigned thereto in Section 5(e)(iii)(A) hereof.
 
“Good Reason” means the occurrence of any of the following without the
Executive’s written consent:
 
 
(i)
a material diminution in the Executive’s Base Salary;

 
(ii)
a material diminution in the Executive’s authority, duties, or responsibilities;

 
(iii)
a material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report;

 
(iv)
a material diminution in the budget over which the Executive retains authority;

 
(v)
a material change in the geographic location at which the Executive must perform
services under this Agreement; or

 
(vi)
any other action or inaction that constitutes a material breach by any Employer
of this Agreement, including without limitation, a material breach of  Section
3(a)(iv) hereof or a breach of Section 9(c);

provided, that the Executive’s resignation shall only constitute a resignation
for “Good Reason” hereunder if (a) the Executive provides the Employer with
written notice setting forth the specific facts or circumstances constituting
Good Reason within thirty days after the initial existence of such facts or
circumstances, (b) the Employer has failed to cure such facts or circumstances
within thirty days after receipt of such written notice, and (c) the date of the
Executive’s Separation from Service occurs no later than seventy-five days after
the later of (i) the initial occurrence of the event constituting Good Reason or
(ii) the date the Executive learns or reasonably should have learned of such
event and with all time periods measured from the last event that makes an event
become material for purposes of this Good Reason definition.

 
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“Incumbent Board” has the meaning assigned thereto in the definition of “Change
in Control”.

“Independent Advisor” has the meaning assigned thereto in Section 5(e)(iii)(B)
hereof.
 
“LTIP Award Agreements” has the meaning assigned thereto in Section 3(b)(iii)
hereof.
 
“Notice of Termination” means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon; (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive’s employment under the
provision so indicated; and (iii) if the Date of Termination is other than the
date of receipt of such notice, specifies the termination date (which date shall
be not more than thirty (30) days after the giving of such notice).
 
“Peer Executives” means the Executive Vice Presidents of the Employer other than
the Executive.
 
“Performance Objectives” means the specified performance metrics set forth in
the CPU Agreement, as amended.
 
“Person” has the meaning assigned thereto in the Plan.
 
“Plan” has the meaning assigned thereto in Section 3(b)(iii) hereof
 
“Prior Agreement” has the meaning assigned thereto in the Recitals hereof.
 
“Proprietary Information” has the meaning assigned thereto in Section 8(a)
hereof.
 
“Pro-Rata Bonus” has the meaning assigned thereto in Section 5(a)(ii)(D) hereof.
 
“Release” has the meaning assigned thereto in Section 5(a)(ii) hereof.
 
“RPUs” means Restricted Phantom Units awarded to the Executive under the Plan.
 
“Separation from Service” means the Executive’s “separation from service” from
the Employer (and its Code Section 409A affiliates) within the meaning of Code
Section 409A(a)(2)(A)(i).
 
 “Severance” has the meaning assigned thereto in Section 5(a)(ii) hereof.
 
“Severance Multiple” has the meaning assigned thereto in Section 5(a)(ii)(A)
hereof.
 
“Target Bonus” has the meaning assigned thereto in Section 3(b)(ii) hereof.
 
“Total Payments” has the meaning assigned thereto in Section 5(e)(iii)(A)
hereof.
 
“Unit” shall have the meaning assigned thereto in the Plan.
 
 
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EXHIBIT B
 
FORM OF RELEASE
 
For valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the undersigned does hereby release and forever discharge the
“Releasees” hereunder, consisting of  BreitBurn Energy Partners L.P., BreitBurn
Management Company, LLC, and BreitBurn GP, LLC (the “Company”), and each of the
Company’s partners, associates, affiliates, subsidiaries, successors, heirs,
assigns, agents, directors, officers, employees, representatives, and all
persons acting by, through, or under them, or any of them, of and from any and
all manner of action or actions, cause or causes of action, in law or in equity,
suits, debts, liens, contracts, agreements, promises, liability, claims,
demands, damages, losses, costs, attorneys’ fees or expenses, of any nature
whatsoever, known or unknown, fixed or contingent (“Actions”), which the
undersigned now has or may hereafter have against the Releasees, or any of them,
by reason of any matter, cause, or thing whatsoever arising from the beginning
of time to the date hereof (hereinafter called “Claims”), provided, however,
that Claims shall not include any such Actions against any person or entity
other than the Company, its subsidiaries, affiliates, successors or assigns, in
any case, that is not properly the subject of defense and/or indemnity by the
Company (determined without regard to whether the Company actually defends or
indemnifies such action or cause of action) (the “Excluded Claims”).
 
The Claims released herein include, without limiting the generality of the
foregoing, any Claims in any way arising out of, based upon, or related to the
undersigned’s employment by the Releasees, or any of them, or the termination
thereof; any claim for wages, salary, commissions, bonuses, incentive payments,
profit-sharing payments, expense reimbursements, leave, vacation, severance pay
or other benefits; any claim for benefits under any stock option, restricted
stock or other equity-based incentive plan of the Releasees, or any of them (or
any related agreement to which any Releasee is a party); any alleged breach of
any express or implied contract of employment; any alleged torts or other
alleged legal restrictions on Releasee’s right to terminate the employment of
the undersigned; and any alleged violation of any federal, state or local
statute or ordinance including, without limitation, Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Equal Pay Act,
the Family Medical Leave Act, the Americans With Disabilities Act, the Employee
Retirement Income Security Act, the National Labor Relations Act, the California
Labor Code, the California Family Rights Act and the California Fair Employment
and Housing Act, each as amended.  Notwithstanding the foregoing, this Release
shall not operate to release any rights or claims (and such rights or claims
shall not be included in the definition of “Claims”) of the undersigned (i) with
respect to payments or benefits under Section 5 of that certain Employment
Agreement, dated as of December [__], 2010, among BreitBurn Energy Partners
L.P., BreitBurn Management Company, LLC, BreitBurn GP, LLC and the undersigned
(the “Employment Agreement”), (ii) with respect to Sections 7, 10 and 11 of the
Employment Agreement, (iii) to accrued or vested benefits he may have, if any,
under any applicable plan, policy, program, arrangement or agreement of any
BreitBurn Entity (as defined in the Employment Agreement), including, without
limitation, pursuant to any equity or long-term incentive plans, programs or
agreements, (iv) to indemnification and/or advancement of expenses pursuant to
the corporate governance documents of any BreitBurn Entity or applicable law, or
the protections of any director’ and officers’ liability policies of any
BreitBurn Entity, (v) with respect to claims which arise after the date the
undersigned executes this Release, or (vi) with respect to any Excluded Claims.
 
 
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THE UNDERSIGNED ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:
 
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”
 
THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY
RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW
PRINCIPLES OF SIMILAR EFFECT.
 
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE
UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
 
(1)                      HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE
SIGNING THIS RELEASE;
 
(2)                      HE HAS FORTY-FIVE (45) DAYS FROM HIS SEPARATION FROM
SERVICE (AS DEFINED IN THE EMPLOYMENT AGREEMENT) TO CONSIDER THIS RELEASE BEFORE
SIGNING IT; AND
 
(3)                      HE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO
REVOKE IT, AND THIS RELEASE WILL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT
REVOCATION PERIOD.
 
The undersigned represents and warrants that there has been no assignment or
other transfer of any interest in any Claim which he may have against Releasees,
or any of them, and the undersigned agrees to indemnify and hold Releasees, and
each of them, harmless from any liability, Claims, demands, damages, costs,
expenses and attorneys’ fees incurred by Releasees, or any of them, as the
result of any such assignment or transfer or any rights or Claims under any such
assignment or transfer.  It is the intention of the parties that this indemnity
does not require payment as a condition precedent to recovery by the Releasees
against the undersigned under this indemnity.
 
The undersigned agrees that if he hereafter commences any suit arising out of,
based upon, or relating to any of the Claims released hereunder or in any manner
asserts against Releasees, or any of them, any of the Claims released hereunder,
then the undersigned shall pay to Releasees, and each of them, in addition to
any other damages caused to Releasees thereby, all attorneys’ fees incurred by
Releasees in defending or otherwise responding to said suit or Claim.  Nothing
herein shall prevent the undersigned from raising or asserting any defense in
any suit, claim, proceeding or investigation brought by any of the Releasees,
and by raising or asserting any such defense, the undersigned shall not become
obligated to pay attorneys’ fees under this paragraph.
 
 
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The undersigned further understands and agrees that neither the payment of any
sum of money nor the execution of this Release shall constitute or be construed
as an admission of any liability whatsoever by the Releasees, or any of them,
who have consistently taken the position that they have no liability whatsoever
to the undersigned.
 
The undersigned acknowledges that different or additional facts may be
discovered in addition to what is now known or believed to be true by him with
respect to the matters released in this Agreement, and the undersigned agrees
that this Agreement shall be and remain in effect in all respects as a complete
and final release of the matters released, notwithstanding any different or
additional facts.
 
IN WITNESS WHEREOF, the undersigned has executed this Release this ____ day of
___________________, 20__.
 

     
James G. Jackson

 
 
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