Exhibit
10.1


ORRI
DISTRIBUTION AGREEMENT

AND

LIMITED PARTNER INTEREST

PURCHASE AND SALE AGREEMENT


 


by and
among


 


BREITBURN
ENERGY PARTNERS I, L.P.


 


TIFD
III-X LLC,


 


and


 


BREITBURN
OPERATING L.P.


 


May 24,
2007
















TABLE OF CONTENTS


	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I TERMS OF THE
  TRANSACTION

  	
   

  	
  1

  
	
   

  	
  Section 1.1.

  	
   

  	
  Agreement to Distribute Override and Sell and
  Purchase Interest

  	
   

  	
  1

  
	
   

  	
  Section 1.2.

  	
   

  	
  Purchase Price

  	
   

  	
  1

  
	
   

  	
  Section 1.3.

  	
   

  	
  Effective Date

  	
   

  	
  1

  
	
   

  	
  Section 1.4.

  	
   

  	
  Payment

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II CLOSING

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS
  AND WARRANTIES OF SELLER

  	
   

  	
  2

  
	
   

  	
  Section 3.1.

  	
   

  	
  Title to Interests

  	
   

  	
  2

  
	
   

  	
  Section 3.2.

  	
   

  	
  Organization and Standing

  	
   

  	
  2

  
	
   

  	
  Section 3.3.

  	
   

  	
  Authority

  	
   

  	
  2

  
	
   

  	
  Section 3.4.

  	
   

  	
  Valid and Binding Agreement

  	
   

  	
  3

  
	
   

  	
  Section 3.5.

  	
   

  	
  Non-Contravention

  	
   

  	
  3

  
	
   

  	
  Section 3.6.

  	
   

  	
  Approvals

  	
   

  	
  3

  
	
   

  	
  Section 3.7.

  	
   

  	
  Pending Litigation

  	
   

  	
  3

  
	
   

  	
  Section 3.8.

  	
   

  	
  Brokers

  	
   

  	
  3

  
	
   

  	
  Section 3.9.

  	
   

  	
  Representations and Warranties on the Closing Date

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV DISCLAIMER

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS
  AND WARRANTIES OF BUYER

  	
   

  	
  5

  
	
   

  	
  Section 5.1.

  	
   

  	
  Organization

  	
   

  	
  5

  
	
   

  	
  Section 5.2.

  	
   

  	
  Power and Authority

  	
   

  	
  5

  
	
   

  	
  Section 5.3.

  	
   

  	
  Valid and Binding Agreement

  	
   

  	
  5

  
	
   

  	
  Section 5.4.

  	
   

  	
  Non-Contravention

  	
   

  	
  5

  
	
   

  	
  Section 5.5.

  	
   

  	
  Approvals

  	
   

  	
  5

  
	
   

  	
  Section 5.6.

  	
   

  	
  Proceedings

  	
   

  	
  6

  
	
   

  	
  Section 5.7.

  	
   

  	
  Investment Experience

  	
   

  	
  6

  
	
   

  	
  Section 5.8.

  	
   

  	
  Restricted Securities

  	
   

  	
  6

  
	
   

  	
  Section 5.9.

  	
   

  	
  Accredited Investor; Investment Intent

  	
   

  	
  6

  
	
   

  	
  Section 5.10.

  	
   

  	
  Independent Evaluation

  	
   

  	
  6

  
	
   

  	
  Section 5.11.

  	
   

  	
  Brokers

  	
   

  	
  6

  
	
   

  	
  Section 5.12.

  	
   

  	
  Disclosure to Seller

  	
   

  	
  6

  
	
   

  	
  Section 5.13.

  	
   

  	
  Representations and Warranties on Closing Date

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI COVENANTS OF THE
  PARTIES

  	
   

  	
  7

  
	
   

  	
  Section 6.1.

  	
   

  	
  Reasonable Best Efforts

  	
   

  	
  7

  
	
   

  	
  Section 6.2.

  	
   

  	
  Notice of Litigation

  	
   

  	
  7

  
	
   

  	
  Section 6.3.

  	
   

  	
  Fees and Expenses

  	
   

  	
  7

  
	
   

  	
  Section 6.4.

  	
   

  	
  Public Announcements

  	
   

  	
  7

  
	
   

  	
  Section 6.5.

  	
   

  	
  Tax Matters

  	
   

  	
  8

  
	
   

  	
  Section 6.6.

  	
   

  	
  Partnership Hedges

  	
   

  	
  8

  
							



 



 i
 









 


	
  

  	
  Section 6.7.

  	
   

  	
  Access to Books and Records

  	
   

  	
  9

  
	
   

  	
  Section 6.8.

  	
   

  	
  Assumption

  	
   

  	
  9

  
	
   

  	
  Section 6.9.

  	
   

  	
  Compliance With Partnership Agreement

  	
   

  	
  9

  
	
   

  	
  Section 6.10.

  	
   

  	
  Conveyance of Override

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII CLOSING
  CONDITIONS

  	
   

  	
  9

  
	
   

  	
  Section 7.1.

  	
   

  	
  Conditions Precedent to Parties’ Obligations to
  Close

  	
   

  	
  9

  
	
   

  	
  Section 7.2.

  	
   

  	
  Conditions Precedent to Seller’s Obligations

  	
   

  	
  10

  
	
   

  	
  Section 7.3.

  	
   

  	
  Conditions Precedent to Buyer’s Obligations

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII TERMINATION,
  AMENDMENT AND WAIVER

  	
   

  	
  11

  
	
   

  	
  Section 8.1.

  	
   

  	
  Termination

  	
   

  	
  11

  
	
   

  	
  Section 8.2.

  	
   

  	
  Effect of Termination

  	
   

  	
  11

  
	
   

  	
  Section 8.3.

  	
   

  	
  Amendment

  	
   

  	
  12

  
	
   

  	
  Section 8.4.

  	
   

  	
  Waiver

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX SURVIVAL OF
  REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION

  	
   

  	
  12

  
	
   

  	
  Section 9.1.

  	
   

  	
  Survival

  	
   

  	
  12

  
	
   

  	
  Section 9.2.

  	
   

  	
  Indemnification by Seller

  	
   

  	
  12

  
	
   

  	
  Section 9.3.

  	
   

  	
  Indemnification by Buyer

  	
   

  	
  13

  
	
   

  	
  Section 9.4.

  	
   

  	
  Indemnification Proceedings

  	
   

  	
  13

  
	
   

  	
  Section 9.5.

  	
   

  	
  Exclusivity

  	
   

  	
  13

  
	
   

  	
  Section 9.6.

  	
   

  	
  Indemnification Despite Negligence

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS

  	
   

  	
  14

  
	
   

  	
  Section 10.1.

  	
   

  	
  Notices

  	
   

  	
  14

  
	
   

  	
  Section 10.2.

  	
   

  	
  Entire Agreement

  	
   

  	
  15

  
	
   

  	
  Section 10.3.

  	
   

  	
  Binding Effect; Assignment; No Third Party Benefit

  	
   

  	
  15

  
	
   

  	
  Section 10.4.

  	
   

  	
  Severability

  	
   

  	
  15

  
	
   

  	
  Section 10.5.

  	
   

  	
  Governing Law

  	
   

  	
  15

  
	
   

  	
  Section 10.6.

  	
   

  	
  Further Assurances

  	
   

  	
  15

  
	
   

  	
  Section 10.7.

  	
   

  	
  Counterparts

  	
   

  	
  15

  
	
   

  	
  Section 10.8.

  	
   

  	
  Injunctive Relief

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI DEFINITIONS AND
  REFERENCES

  	
   

  	
  16

  
	
   

  	
  Section 11.1.

  	
   

  	
  Certain Defined Terms

  	
   

  	
  16

  
	
   

  	
  Section 11.2.

  	
   

  	
  Certain Additional Defined Terms

  	
   

  	
  17

  
	
   

  	
  Section 11.3.

  	
   

  	
  References and Construction

  	
   

  	
  18

  
	
   

  	
  Section 11.4.

  	
   

  	
  Joinder

  	
   

  	
  19

  



 



 ii















ORRI DISTRIBUTION AGREEMENT

AND

LIMITED PARTNER INTEREST

PURCHASE AND SALE AGREEMENT


THIS ORRI DISTRIBUTION AGREEMENT AND LIMITED
PARTNER INTEREST PURCHASE AND SALE AGREEMENT dated as of May 24,
2007, is made by and among Breitburn Energy Partners I, L.P., a Texas limited
partnership (the “Partnership”),
TIFD III-X LLC, a Delaware limited liability company (“Seller”),
and Breitburn Operating L.P., a Delaware limited partnership (“Buyer”).


RECITALS:


A.            Reference is
herein made to that certain Amended and Restated Agreement of Limited
Partnership dated as of May 5, 2003 (the “Partnership Agreement”),
governing the Partnership.  Seller’s
interest in the Partnership as a limited partner is herein called the “Interest”.


B.            The Partnership
desires to distribute the Override (as defined herein) to Seller, on the terms
and conditions set forth herein.


C.            Seller desires to
sell the Interest to Buyer, and Buyer desires to purchase the Interest from
Seller, on the terms and conditions set forth herein.


AGREEMENT:


NOW, THEREFORE, in consideration
of the foregoing Recitals and the mutual covenants and agreements contained
herein, Seller and Buyer do hereby agree as follows:


ARTICLE I

TERMS OF THE TRANSACTION


Section 1.1.           Agreement to
Distribute Override and Sell and Purchase Interest.   Subject
to the terms and provisions herein, the Partnership agrees to distribute to
Seller (or its designee) the Override (as defined herein) and Seller agrees to
sell and Buyer agrees to purchase, for the consideration hereinafter set forth,
the Interest.


Section 1.2.           Purchase Price.   In consideration of the sale of the Interest
to Buyer, Buyer shall pay to Seller a cash purchase price of $82,100,000 (the “Purchase Price”).


Section 1.3.           Effective Date.   The distribution of the Override shall be
effective as of 7:00 a.m., local Los Angeles, California time, on May 1, 2007,
and the purchase and sale of the Interest shall be effective immediately
thereafter (the “Effective Date”).


Section 1.4.           Payment. 


(a)           Contemporaneously
with the execution and delivery of this Agreement, Buyer shall tender to an
interest bearing account designated by Seller cash equal to $8,000,000 as a 













deposit (the “Deposit”). 
The Deposit shall be (i) applied to the Purchase Price pursuant to Section 1.4(b),
(ii) retained by Seller pursuant to Section 8.2 or
(iii) returned to Buyer pursuant to Section 8.2.  For federal income tax purposes, the interest
or other income earned on the Deposit shall be reported by Buyer, if the
Deposit is applied to the Purchase Price or returned to Buyer, and by Seller,
if the Deposit is retained by Seller.


(b)           At
the Closing, Buyer shall pay to Seller cash equal to the Purchase Price minus
the Deposit.  Payments by Buyer to Seller
of the Purchase Price shall be made in immediately available funds by confirmed
wire transfer to a bank account or accounts designated by Seller in writing to
Buyer.


ARTICLE
II

CLOSING


The closing of the transactions contemplated hereby
(the “Closing”) shall take place (i) at
the offices of Thompson & Knight LLP, 333 Clay Street, Suite 3300, Houston,
Texas, at 9:00 a.m. (local Houston, Texas time), on May 25, 2007, or
(ii) at such other time or place or on such other date as the parties
hereto shall agree.  The date on which
the Closing is required to take place is herein referred to as the “Closing Date.”  The
Closing of the distribution of the Override by Partnership to Seller shall
close first, and the Closing of the sale of the Interest shall close
immediately thereafter.


ARTICLE
III

REPRESENTATIONS AND WARRANTIES OF SELLER


Seller represents and warrants to Buyer that:


Section 3.1.           Title to Interests.   Seller
is (and at the Closing will be) the record and beneficial owner of, and upon
consummation of the transactions contemplated hereby Buyer will acquire good, valid,
and marketable title to, the Interest, free and clear of all Liens, other than
(i) those that may arise by virtue of any actions taken by or on behalf of
Buyer or its Affiliates, (ii) restrictions on transfer that may be imposed
by federal or state securities laws, (iii) restrictions on transfer under
the Partnership Agreement or (iv) Liens, if any, released at Closing.


Section 3.2.           Organization and
Standing.   Seller is duly
organized, validly existing and in good standing under the laws of the state of
its formation.


Section 3.3.           Authority.   Seller
has all requisite power and authority to execute, deliver, and perform this
Agreement and to consummate the transactions contemplated hereby.  This Agreement has been duly executed and
delivered by Seller and constitutes, and each other agreement, instrument, or
document executed or to be executed by Seller in connection with the
transactions contemplated hereby has been, or when executed will be, duly
executed and delivered by Seller and constitutes, or when executed and
delivered will constitute, a valid and legally binding obligation of Seller,
enforceable against Seller in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to the enforcement of creditors’
rights 



 2
 









generally and
the application of general principles of equity (regardless of whether that
enforceability is considered in a proceeding at law or in equity).


Section 3.4.           Valid and Binding
Agreement.   This Agreement has been duly executed and
delivered by Seller and constitutes, and each other agreement, instrument, or
document executed or to be executed by Seller in connection with the
transactions contemplated hereby to which it is a party has been, or when
executed will be, duly executed and delivered by Seller, and constitutes, or
when executed and delivered will constitute, a valid and legally binding
obligation of Seller, enforceable against it in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of
creditors’ rights generally and the application of general principles of equity
(regardless of whether that enforceability is considered in a proceeding at law
or in equity).


Section 3.5.           Non-Contravention.   Neither the execution, delivery, and
performance by Seller of this Agreement and each other agreement, instrument,
or document executed or to be executed by Seller in connection with the
transactions contemplated hereby to which Seller is a party nor the
consummation by Seller of the transactions contemplated hereby and thereby do
or will (i) conflict with or result in a violation of any provision of
Seller’s Governing Documents, (ii) do and will conflict with or result in
a violation of any provision of, or constitute (with or without the giving of
notice or the passage of time or both) a default under, or give rise (with or
without the giving of notice or the passage of time or both) to any right of
termination, cancellation, or acceleration under, any bond, debenture, note,
mortgage or indenture, or any material contract, agreement, or other instrument
or obligation to which Seller is a party or by which such Seller or any of such
Seller’s properties may be bound, or (iii) violate any Applicable Law
binding upon such Seller.


Section 3.6.           Approvals.   No
consent, approval, order, or authorization of, or declaration, filing, or
registration with, any Governmental Entity or of any third party is required to
be obtained or made by Seller in connection with the execution, delivery, or
performance by Seller of this Agreement, each other agreement, instrument, or
document executed or to be executed by Seller in connection with the
transactions contemplated hereby to which Seller is a party or the consummation
by Seller of the transactions contemplated hereby and thereby.


Section 3.7.           Pending Litigation.   There are no Proceedings pending or, to Seller’s
Knowledge, threatened, in which Seller is or may be a party affecting the
execution and delivery of this Agreement by Seller or the consummation of the
transactions contemplated hereby by Seller.


Section 3.8.           Brokers.   No
broker, investment banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Seller.


Section 3.9.           Representations and
Warranties on the Closing Date.   The representations and warranties made by
Seller in this Article III will be true and correct in all material
respects on and as of the Closing Date with the same force and effect as if
such representations and warranties had been made by Seller on and as of the
Closing Date, except 



 3
 









that any such
representations and warranties which expressly relate only to an earlier date
shall be true and correct on the Closing Date as of such earlier date.


ARTICLE
IV

DISCLAIMER


EXCEPT AS SET FORTH IN THIS AGREEMENT, SELLER WILL
CONVEY TO BUYER THE INTEREST WITHOUT ANY EXPRESS, STATUTORY, OR IMPLIED
WARRANTY OR REPRESENTATION OF ANY KIND FROM SELLER OR ANY OF ITS AFFILIATES,
INCLUDING WARRANTIES OR REPRESENTATIONS RELATING TO (I) THE PARTNERSHIP,
(II) TITLE OF THE PARTNERSHIP IN AND TO ITS PROPERTIES AND OTHER ASSETS
(THE “PARTNERSHIP PROPERTIES”), (III) THE CONDITION OF THE PARTNERSHIP
PROPERTIES, (IV) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY OF THE
PARTNERSHIP PROPERTIES, (V) ANY IMPLIED OR EXPRESS WARRANTY OF THE FITNESS
OF THE PARTNERSHIP PROPERTIES FOR A PARTICULAR PURPOSE, (VI) ANY IMPLIED
OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS,
(VII) ANY AND ALL OTHER IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW
NOW OR HEREAFTER IN EFFECT, OR (VIII) ANY IMPLIED OR EXPRESS WARRANTY
REGARDING COMPLIANCE WITH ANY APPLICABLE ENVIRONMENTAL LAWS, THE RELEASE OF
MATERIALS INTO THE ENVIRONMENT, OR PROTECTION OF THE ENVIRONMENT OR HEALTH.  EXCEPT AS SET FORTH IN THIS AGREEMENT, IN
PURCHASING THE INTEREST BUYER ACCEPTS THE PARTNERSHIP PROPERTIES “AS IS,”  “WHERE IS,” AND “WITH ALL FAULTS” AND IN THEIR PRESENT
CONDITION AND STATE OF REPAIR.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS SET FORTH IN THIS
AGREEMENT, SELLER MAKES NO REPRESENTATION OR WARRANTY AS TO (A) THE
AMOUNT, VALUE, QUALITY, QUANTITY, VOLUME, OR DELIVERABILITY OF ANY OIL, GAS, OR
OTHER MINERALS OR RESERVES IN, UNDER, OR ATTRIBUTABLE TO THE PARTNERSHIP
PROPERTIES, (B) THE PHYSICAL, OPERATING, REGULATORY COMPLIANCE, SAFETY, OR
ENVIRONMENTAL CONDITION OF THE PARTNERSHIP PROPERTIES, (C) THE GEOLOGICAL
OR ENGINEERING CONDITION OF THE PARTNERSHIP PROPERTIES OR ANY VALUE THEREOF OR
(D) THE ACCURACY, COMPLETENESS, OR MATERIALITY OF ANY DATA, INFORMATION,
OR RECORDS FURNISHED TO BUYER BY SELLER IN CONNECTION WITH THE PARTNERSHIP OR
THE PARTNERSHIP PROPERTIES.  BUYER
EXPRESSLY ACKNOWLEDGES AND AGREES THAT (X) SELLER IS A LIMITED PARTNER OF
THE PARTNERSHIP; (Y) AS A LIMITED PARTNER, SELLER IS GENERALLY A “PASSIVE”
INVESTOR AND IS NOT INVOLVED IN THE DAY-TO-DAY OPERATIONS OF THE PARTNERSHIP
AND DOES NOT HAVE CONTROL OVER OR IMMEDIATE ACCESS TO PARTNERSHIP BOOKS,
RECORDS AND OTHER DATA OR INFORMATION; AND (Z) THAT AN AFFILIATE OF BUYER
IS THE GENERAL PARTNER OF THE PARTNERSHIP AND, IN THAT CAPACITY, HAS BEEN
PRIMARILY RESPONSIBLE FOR THE CONDUCT BY THE PARTNERSHIP OF ITS BUSINESS AND
OPERATIONS SINCE INCEPTION.  BUYER
AGREES THAT THE FOREGOING DISCLAIMER IS “CONSPICUOUS.”



 4
 









ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER


Buyer represent and
warrant to Seller that:


Section 5.1.           Organization.   Buyer is validly existing and in good standing
under the laws of the jurisdiction of its organization and has requisite power
and authority to carry on its business as now being conducted.


Section 5.2.           Power and Authority.   Buyer has all requisite power and authority to
execute, deliver, and perform this Agreement and each other agreement,
instrument, or document executed or to be executed by Buyer in connection with
the transactions contemplated hereby to which it is a party and to consummate
the transactions contemplated hereby and thereby.  The execution, delivery, and performance of
this Agreement and each other agreement, instrument, or document executed or to
be executed by Buyer in connection with the transactions contemplated hereby to
which it is a party, and the consummation by it of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
action of Buyer.


Section 5.3.           Valid and Binding
Agreement.   This Agreement has been duly executed and
delivered by Buyer and constitutes, and each other agreement, instrument, or
document executed or to be executed by Buyer in connection with the
transactions contemplated hereby to which it is a party has been, or when
executed will be, duly executed and delivered by Buyer, and constitutes, or
when executed and delivered will constitute, a valid and legally binding
obligation of Buyer, enforceable against it in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of
creditors’ rights generally and the application of general principles of equity
(regardless of whether that enforceability is considered in a proceeding at law
or in equity).


Section 5.4.           Non-Contravention.   Neither the execution, delivery, and
performance by Buyer of this Agreement and each other agreement, instrument, or
document executed or to be executed by Buyer in connection with the
transactions contemplated hereby to which it is a party nor the consummation by
it of the transactions contemplated hereby and thereby do or will
(i) conflict with or result in a violation of any provision of Buyer’s
Governing Documents, (ii) conflict with or result in a violation of any
provision of, or constitute (with or without the giving of notice or the
passage of time or both) a default under, or give rise (with or without the
giving of notice or the passage of time or both) to any right of termination,
cancellation, or acceleration under, any bond, debenture, note, mortgage or
indenture, or any material contract, agreement, or other instrument or
obligation to which Buyer is a party or by which Buyer or any of Buyer’s
properties may be bound, or (iii) violate any Applicable Law binding upon
Buyer.


Section 5.5.           Approvals.   No
consent, approval, order, or authorization of, or declaration, filing, or
registration with, any Governmental Entity or of any third party is required to
be obtained or made by Buyer in connection with the execution, delivery, or
performance by Buyer of this Agreement, each other agreement, instrument, or
document executed or to be executed by Buyer in connection with the
transactions contemplated hereby to which it is a party or the consummation by
it of the transactions contemplated hereby and thereby.



 5
 









Section 5.6.           Proceedings.  There are no Proceedings pending or, to Buyer’s
Knowledge, threatened, in which Buyer is or may be a party affecting the
execution and delivery of this Agreement by Buyer or the consummation of the
transactions contemplated hereby by Buyer.


Section 5.7.           Investment
Experience.   Buyer acknowledges that it can bear the
economic risk of its investment in the Interest, and has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of an investment in the Interest.  Buyer is an Affiliate of the General Partner.


Section 5.8.           Restricted Securities.   Buyer understands that the Interest will not
have been registered pursuant to the Securities Act or any applicable state
securities laws, that the Interest will be characterized as “restricted
securities” under federal securities laws, and that under such laws and
applicable regulations the Interests cannot be sold or otherwise disposed of
without registration under the Securities Act or an exemption therefrom.


Section 5.9.           Accredited Investor;
Investment Intent.   Buyer is an accredited investor as defined in
Regulation D under the Securities Act. Buyer is acquiring the Interest for its
own account for investment and not with a view to, or for sale or other
disposition in connection with, any distribution of all or any part thereof,
except in compliance with applicable federal and state securities laws.


Section 5.10.        Independent Evaluation.   Buyer is an experienced and knowledgeable
investor in the oil and gas business and the business of owning and operating
oil, gas and mineral properties.  Buyer,
as a result of its affiliation with the General Partner, has had full and
complete access to the Partnership Properties, the officers, consultants and
other representatives of the Partnership, and the books, records, and files of
the Partnership (including those relating to the Partnership Properties).  In making the decision to enter into this
Agreement and to consummate the transactions contemplated hereby, Buyer, as a
result of its affiliation with the General Partner, has relied on (i) the
basis of its own independent investigation and knowledge of the Partnership and
the Partnership Properties, and (ii) the representations and warranties
made by Seller, and has been advised by and has relied solely on its own
expertise and legal, land, tax, reservoir engineering, and other professional
counsel concerning this transaction, the Partnership, the Partnership
Properties and the values thereof.


Section 5.11.        Brokers.   No
broker, investment banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Buyer.


Section 5.12.        Disclosure to Seller.   In view of (i) Buyer’s affiliation with the
General Partner and (ii) the General Partner’s duties and obligations as
general partner of the Partnership to Seller (in its capacity as the limited
partner thereof), and given Buyer’s access to information with respect to the
Partnership, the Partnership’s operations and the Partnership Properties, Buyer
represents and warrants that, to Buyer’s Knowledge, the General Partner has
made all material information concerning the Partnership and the Partnership
Properties available to, and has not withheld any material information from,
Seller (exclusive of facts and circumstances which 



 6
 









Seller
recognizes to be of a nature generally recognized and known in the oil and gas
industry (e.g., hydrocarbon prices may rise or fall)).


Section 5.13.        Representations and
Warranties on Closing Date.   The representations and warranties made in
this Article V will be true and correct in all material respects on
and as of the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of the Closing Date,
except that any such representations and warranties which expressly relate only
to an earlier date shall be true and correct on the Closing Date as of such
earlier date.


ARTICLE
VI

COVENANTS OF THE PARTIES


Section 6.1.           Reasonable Best
Efforts.   Each party hereto agrees that it will not
voluntarily undertake any course of action inconsistent with the provisions or
intent of this Agreement and will use its Reasonable Best Efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
reasonably necessary, proper, or advisable under Applicable Laws to consummate
the transactions contemplated by this Agreement.


Section 6.2.           Notice of
Litigation.   Until the Closing, (i)  Buyer, upon learning
of the same, shall promptly notify Seller of any Proceeding which is commenced
or threatened against Buyer which affects this Agreement or the transactions
contemplated hereby and (ii) Seller, upon learning of the same, shall
promptly notify Buyer of any Proceeding which is commenced or threatened
against Seller which affects this Agreement or the transactions contemplated
hereby.


Section 6.3.           Fees and Expenses.


(a)           All
fees and expenses incurred in connection with this Agreement by Seller will be borne
by and paid by Seller, except as provided in Section 6.6 or unless
the transactions contemplated hereby are not consummated through no fault of
Seller (in which event, Buyer shall bear and pay such fees and expenses).


(b)           Without
limiting its covenants and agreements in Section 6.6, all expenses
incurred in connection with this Agreement by Buyer, the General Partner or by
the Partnership will be borne by and paid by Buyer, regardless of whether or
not the transactions contemplated hereby are consummated.


Section 6.4.           Public
Announcements.   Except as may be required by Applicable Law,
neither Buyer, Affiliates of the General Partner or the Partnership, on the one
hand, nor Seller, on the other, shall issue any press release or otherwise make
any statement to the public generally with respect to this Agreement or the
transactions contemplated hereby without the prior consent of the other parties
(which consent shall not be unreasonably withheld and which consent, if given
verbally, shall be confirmed in writing within one Business Day
thereafter).  Any such press release or
statement required by Applicable Law shall only be made after reasonable notice
to the other parties.



 7
 









Section 6.5.           Tax Matters.


(a)           The parties agree that the basis of the Override distributed to
Seller will be determined by Seller and Buyer as promptly as practicable
after the Closing by allocating to the Override a portion of the Partnership’s
basis in the leases burdened by the Override based on the relative fair market
value of the Override and the Partnership’s operating interests in such leases.


(b)           The
parties acknowledge that the sale of the Interest by Seller to Buyer will cause
the Partnership to terminate for federal income tax purposes on the Effective
Date pursuant to Section 708(b)(1)(B) of the Code.  Buyer hereby agrees to prepare, submit for
Seller’s approval in the manner provided in Section 6.10 of the
Partnership Agreement and timely file with the IRS or any other appropriate
taxing authorities all tax returns due for the Partnership (including the final
federal income tax return on IRS Form 1065 for the Partnership’s taxable period
that ends at the Effective Date) in accordance with Section 6.10 of the
Partnership Agreement.  If Seller fails
to approve any tax return referenced in the immediately preceding sentence,
Seller and Buyer agree to use their reasonable best efforts to resolve any
disagreement or dispute between them in respect of such return as promptly as
reasonably practicable. The parties further agree that no items of income,
gain, loss, deduction or credit attributable to periods after the Closing Date
shall be allocated to Seller and that Seller shall not be liable for any
Partnership-level Taxes or other Taxes attributable to periods, operations, or
oil and gas production after the Closing Date, except as attributable to the Override.


(c)           Pursuant
to Section 6.9 of the Partnership Agreement, the General Partner will elect in
accordance with Section 754 of the Code to adjust the basis upon the transfer
of the Interest.


Section 6.6.           Partnership Hedges.


(a)           (i) No later than one Business Day after the
date of this Agreement and subject to the terms of this Section 6.6, the
General Partner agrees to (and Buyer agrees to cause the General Partner)
to terminate the Partnership’s Hedges and (ii) at any time after this Agreement
is fully executed, the General Partner, at the sole discretion of the Buyer,
may cause the Partnership to enter into new Hedges (such Hedges, whether one or
more, the “New Hedge”).   Buyer agrees that all costs incurred by
Buyer, the General Partner, the Partnership or Seller and their respective
Affiliates in connection with the performance by Buyer of its covenants and
agreements in this Section 6.6 (including “breakage” costs) shall
be borne and paid exclusively by Buyer and the General Partner (in proportion
to the LP Sharing Percentage and GP Sharing Percentage, respectively, as
defined in the Partnership Agreement) or the Partnership, and if paid by the
Partnership will not otherwise affect the amount due Seller hereunder or under
the Partnership Agreement if the transactions contemplated hereby are not
consummated.


(b)           Seller,
in its capacity as the limited partner of the Partnership and by its execution
and delivery of this Agreement, hereby agrees and consents to the actions of
the General Partner and the Partnership described in subsection (a)
above for purposes of the Partnership Agreement, including Sections 5.7 and
6.2(j) thereof, subject to the following: 
(i) notwithstanding anything in the Partnership Agreement (including
Section 5.7 thereof) or herein to the contrary, in no instance will Seller, or
any Affiliate of Seller (including GE Capital Corporation) be required to
guarantee or otherwise have any personal liability or responsibility for the
New Hedge; and 



 8
 









(ii) prior
to entering into the New Hedge (if the New Hedge is entered into prior to the
Closing), the General Partner and the Seller must mutually agree on the
percentage amount of the Partnership’s forecast production from the proved
producing oil and gas reserves attributable to the Partnership’s Properties to
be hedged under the New Hedge.


Section 6.7.           Access to Books and
Records.  Buyer will preserve or
cause to be preserved all books and records of the Partnership for a period of
six years following the Closing and will allow Seller and its representatives
reasonable access to such records at all reasonable times for a purpose
reasonably related to (i) Seller’s ownership of the Interest in the
Partnership, (ii) the performance by Seller of its obligations, and the
enforcement by it of its rights, hereunder, or (iii) Seller’s contest of
the imposition of any Taxes resulting from its ownership of the Interest.  If Buyer desires to dispose of any such
records prior to the expiration of the six-year period referenced above, Buyer
shall provide notice of same to Seller, and Seller shall have a period of 10
Business Days to deliver written notice to Buyer that Seller elects to have
such records delivered to it (at the expense of Seller).  If Seller fails to deliver such notice within
the 10-Business Day period referenced above, Buyer shall the right to dispose
of the subject records.


Section 6.8.           Assumption.  Buyer will, at Closing, be deemed to have
assumed any and all duties, liabilities and obligations of Seller under the
Partnership Agreement, whether arising before, on or after the Effective Date
(the “Assumed Obligations”).


Section 6.9.           Compliance With
Partnership Agreement.   Buyer,
Seller and, by its execution hereof, the General Partner, agree that upon
consummation of the transactions contemplated hereby, (a) Section 9.1 of
the Partnership Agreement, which deals with assignments by the limited partners
of the Partnership, will be deemed to have been complied with in all respects,
and (b) Section 9.6 of the Partnership Agreement (Right of First Offer) will be
deemed to have been waived.


Section 6.10.        Conveyance of Override.  At Closing, Buyer or its Affiliates
(including the General Partner) will cause the
Partnership  to  execute and deliver to Seller (or its
designee) that certain Conveyance of Overriding Royalty Interest in the form
attached hereto as Exhibit 6.10 (the “Override”).


ARTICLE
VII

CLOSING CONDITIONS


Section 7.1.           Conditions Precedent
to Parties’ Obligations to Close. 
The obligation of Seller, on the one hand, or Buyer, on the other, to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment on or prior to the Closing Date of each of the following
conditions:


(a)           No
Proceeding (excluding any Proceeding initiated by Seller, Buyer, the General
Partner or the Partnership or any of their respective Affiliates) shall, on the
Closing Date, be pending or threatened seeking to restrain, prohibit, or obtain
damages or other relief in connection with this Agreement or the consummation
of the transactions contemplated hereby.


(b)           No
order, writ, injunction or decree shall have been entered and be in effect by
any court or any Governmental Entity of competent jurisdiction, and no statute,
rule, regulation 



 9
 









or other
requirement shall have been promulgated or enacted and be in effect, that on a
temporary or permanent basis restrains, enjoins or invalidates the transactions
contemplated hereby.


Section 7.2.           Conditions Precedent
to Seller’s Obligations.   The obligation of Seller to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment
on or prior to the Closing Date of each of the following conditions:


(a)           Each
of the representations and warranties of Buyer contained in this Agreement
shall be true and correct in all material respects as of the date made and
(having been deemed to have been made again on and as of the Closing Date in
the same language) shall be true and correct in all material respects on and as
of the Closing Date.


(b)           Buyer
shall have performed and complied with in all material respects all covenants
and agreements required by this Agreement to be performed or complied with by
it on or prior to the Closing Date (including its covenants and agreements
contained in Section 6.6).


(c)           Seller
shall have received a certificate executed by a duly authorized officer of
Buyer dated the Closing Date, representing and certifying that the conditions
set forth in Sections 7.2 (a) and (b) have been satisfied.


(d)           Seller
shall have received all other agreements, instruments and documents which are
required by other terms of this Agreement to be executed or delivered by Buyer,
the General Partner or the Partnership prior to or in connection with the
Closing (including the Override).


Section 7.3.           Conditions Precedent
to Buyer’s Obligations.   The obligation of Buyer to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment
on or prior to the Closing Date of each of the following conditions:


(a)           Each
of the representations and warranties of Seller contained in this Agreement
shall be true and correct in all material respects as of the date made and
(having been deemed to have been made again on and as of the Closing Date in
the same language) shall be true and correct in all material respects on and as
of the Closing Date.


(b)           Seller
shall have performed and complied with in all material respects all covenants
and agreements required by this Agreement to be performed or complied with by
it on or prior to the Closing Date.


(c)           Buyer
shall have received one or more certificates executed by a duly authorized
officer of Seller dated the Closing Date, (i) representing and certifying that
the conditions set forth in Sections 7.3 (a) and (b) have
been satisfied and (ii) certifying to the adoption and effectiveness of
resolutions adopted by the sole member of Seller authorizing the transactions
contemplated hereby.


(d)           Seller
shall have executed and delivered an Assignment of Limited Partner Interest
substantially in the form of Exhibit 7.3(d) in all material
respects.



 10
 









(e)           Buyer
shall have received all other agreements, instruments and documents which are
required by other terms of this Agreement to be executed or delivered by Seller
prior to or in connection with the Closing.


ARTICLE
VIII

TERMINATION, AMENDMENT AND WAIVER


Section 8.1.           Termination.   This Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing in
the following manner:


(a)           by
mutual written consent of Seller and Buyer; or


(b)           by
either Seller, on the one hand, or Buyer, on the other, if:


(i)            the Closing shall not
have occurred on or before June 15, 2007, unless such failure to close shall be
due to a breach of this Agreement by the party seeking to terminate this
Agreement pursuant to this clause (i); or


(ii)           there shall be any
statute, rule, or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or a Governmental Entity
shall have issued an order, decree, or ruling or taken any other action
permanently restraining, enjoining, or otherwise prohibiting the consummation
of the transactions contemplated hereby, and such order, decree, ruling, or
other action shall have become final and nonappealable; or


(c)           by
Seller, if (i) Buyer shall have failed to fulfill in any material respect
any of its other obligations under this Agreement; or (ii) any of the
representations and warranties of Buyer contained in this Agreement shall not
be true and correct in all material respects and, in the case of each of clauses (i)
and (ii), such failure, misrepresentation, or breach of warranty
(provided it can be cured) has not been cured within ten days after written
notice thereof from Seller to Buyer, as the case may be; or


(d)           by
Buyer, if (i) Seller shall have failed to fulfill in any material respect
any of its obligations under this Agreement; or (ii) any of the
representations and warranties of Seller contained in this Agreement shall not
be true and correct in all material respects and, in the case of each of clauses (i)
and (ii), such failure, misrepresentation, or breach of warranty
(provided it can be cured) has not been cured within ten days after written
notice thereof from Buyer to Seller.


Section 8.2.           Effect of
Termination.   In the event of the termination of this
Agreement pursuant to Section 8 .1 by Seller, on the one hand, or
Buyer, on the other, written notice thereof shall forthwith be given to the
other party or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall become void and have no effect,
except that the agreements contained in this Article VIII, in Sections 6.3,
6.4 and 6.6 and in Articles X and XI  shall survive the termination hereof.  Except as provided in the immediately
following sentence, nothing contained in this Section shall relieve any party
from liability for damages actually incurred as a result of any breach of this
Agreement.  If this Agreement is
terminated by Seller pursuant to (i) Section 8.1(b)(i) (and
Buyer is in material breach of this Agreement) or (ii) Section 8.1(c),
Seller shall retain the Deposit as liquidated damages (it being 



 11
 









agreed by the
parties that (x) the amount of actual damages incurred by Seller would be
difficult to calculate and (y) retention by Seller of the Deposit shall
not constitute a distribution to Seller by the Partnership under the
Partnership Agreement).  If this
Agreement is terminated under Section 8.1 for any other reason, the
Deposit shall be promptly returned to Buyer by Seller.


Section 8.3.           Amendment.   This
Agreement may not be amended except by an instrument in writing signed by or on
behalf of all the parties hereto.


Section 8.4.           Waiver.  Seller on the one hand, or Buyer, on the
other, may:  (i) waive any
inaccuracies in the representations and warranties of the other contained
herein or in any document, certificate, or writing delivered pursuant hereto,
or (ii) waive compliance by the other with any of the other’s agreements
or fulfillment of any conditions to its own obligations contained herein.  Any agreement on the part of a party hereto
to any such waiver shall be valid only if set forth in an instrument in writing
signed by or on behalf of such party.  No
failure or delay by a party hereto in exercising any right, power, or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege.


ARTICLE
IX

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION


Section 9.1.           Survival.


(a)           Each
representation and warranty of the parties hereto contained in this Agreement
shall survive the Closing until the first anniversary of the Closing Date (such
anniversary being called the “Survival Date”).  From and after a Survival Date, no party
hereto shall be under any liability hereunder with respect to any
representation or warranty, except with respect to matters as to which notice
has been received in accordance with Section 9.1(b).  All covenants of the parties hereto, to the
extent not otherwise fully performed at Closing, will survive the Closing.


(b)           No
party hereto shall have any indemnification obligation pursuant to this Article IX
or otherwise in respect of any representation, warranty or covenant unless it
shall have received from the party seeking indemnification written notice of
the existence of the claim for or in respect of which indemnification in
respect of such representation, warranty or covenant is being sought.  Such notice shall set forth with reasonable
specificity (i) the basis under this Agreement, and the facts that
otherwise form the basis of such claim, (ii) the estimate of the amount of
such claim (which estimate shall not be conclusive of the final amount of such
claim) and an explanation of the calculation of such estimate, including a
statement of any significant assumptions employed therein, and (iii) the
date on and manner in which the party delivering such notice became aware of
the existence of such claim.


Section 9.2.           Indemnification by
Seller.   Subject to the terms and conditions of this Article IX,
Seller shall indemnify, defend and hold harmless Buyer from and against any and
all claims, actions, causes of action, demands assessments, losses,
damages, liabilities, judgments, settlements, penalties, costs, and expenses
(including reasonable attorneys’ fees and expenses), of any nature whatsoever
(collectively, “Damages”),
asserted against, resulting to, 



 12
 









imposed upon,
or incurred by Buyer, directly or indirectly, by reason of or resulting
from any breach by Seller of (i) Seller’s representations and
warranties contained in Article III or (ii) Seller’s covenants
contained in this Agreement.


Section 9.3.           Indemnification by
Buyer.   Subject to the terms and conditions of this Article IX,
Buyer shall indemnify, defend and hold harmless Seller from and against any and
all Damages, asserted against, resulting to, imposed upon, or incurred by
Seller, directly or indirectly, by reason of or resulting from (i) any
breach by Buyer of its representations, warranties and covenants contained in
this Agreement, (ii) the Assumed Obligations or (iii) the Partnership
and its ownership and operation of its properties and other assets.


Section 9.4.           Indemnification
Proceedings.   In the event that any claim or demand for
which a party (an “Indemnifying Party”),
would be liable to the another party under Section 9.2 or Section 9.3
(an “Indemnified Party”) is
asserted against or sought to be collected from an Indemnified Party by a third
party, the Indemnified Party shall with reasonable promptness notify the
Indemnifying Party of such claim or demand, but the failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of its obligations
under this Article IX, except to the extent the Indemnifying Party
demonstrates that the defense of such claim or demand is materially prejudiced
thereby.  The Indemnifying Party shall have
30 days from receipt of the above notice from the Indemnified Party (in this Section 9.4,
the “Notice Period”) to notify the
Indemnified Party whether or not the Indemnifying Party desires, at the
Indemnifying Party’s sole cost and expense, to defend the Indemnified Party
against such claim or demand; provided, that the Indemnified Party is hereby
authorized prior to and during the Notice Period to file any motion, answer or
other pleading that it shall deem necessary or appropriate to protect its interests
or those of the Indemnifying Party and not prejudicial to the Indemnifying
Party.  If the Indemnifying Party elects
to assume the defense of any such claim or demand, the Indemnified Party shall
have the right to employ separate counsel at its own expense and to participate
in the defense thereof.  If the
Indemnifying Party elects not to assume the defense of such claim or demand (or
fails to give notice to the Indemnified Party during the Notice Period), the Indemnified
Party shall be entitled to assume the defense of such claim or demand with
counsel of its own choice, at the expense of the Indemnifying Party.  If the claim or demand is asserted against
both the Indemnifying Party and the Indemnified Party and based on the advice
of counsel reasonably satisfactory to the Indemnifying Party it is determined
that there is a conflict of interest which renders it inappropriate for the
same counsel to represent both the Indemnifying Party and the Indemnified
Party, the Indemnifying Party shall be responsible for paying separate counsel
for the Indemnified Party; provided, however, that the Indemnifying Party shall
not be responsible for paying for more than one separate firm of attorneys to
represent all of the Indemnified Parties, regardless of the number of
Indemnified Parties.  If the Indemnifying
Party elects to assume the defense of such claim or demand, (i) no
compromise or settlement thereof may be effected by the Indemnifying Party
without the Indemnified Party’s written consent (which shall not be unreasonably
withheld) unless the sole relief provided is monetary damages that are paid in
full by the Indemnifying Party and (ii) the Indemnifying Party shall have
no liability with respect to any compromise or settlement thereof effected
without its written consent (which shall not be unreasonably withheld).


Section 9.5.           Exclusivity.   The
parties hereto agree that after Closing, in relation to any breach, default, or
nonperformance of any representation, warranty, covenant, or agreement made or
entered into by a party hereto pursuant to this Agreement or any certificate,
instrument, 



 13
 









or document
delivered pursuant hereto, the only relief and remedy available to the other
party hereto in respect of said breach, default, or nonperformance shall be
Damages, but only to the extent properly claimable hereunder and subject to the
terms and provisions of this Article IX; provided, however, that
the foregoing shall not be deemed to limit or modify the parties’ rights under Section
10.8.


Section 9.6.           Indemnification
Despite Negligence.   It is the express intention of the parties
hereto that each party to be indemnified pursuant to this Article IX shall
be indemnified and held harmless from and against all Damages as to which
indemnity is provided for under this Article IX, notwithstanding that any
such Damages arise out of or result from the ordinary, strict, sole, or
contributory negligence of such party and regardless of whether any other party
(including the other parties to this Agreement) is or is not also negligent.  The parties hereto acknowledge that the
foregoing complies with the express negligence rule and is conspicuous.


ARTICLE X

MISCELLANEOUS


Section 10.1.        Notices.  All notices, requests, demands, and other
communications required or permitted to be given or made hereunder by any party
hereto shall be in writing and shall be deemed to have been duly given or made
if (i) delivered personally, (ii) transmitted by first class
registered or certified mail, postage prepaid, return receipt requested,
(iii) sent by a recognized prepaid overnight courier service (which
provides a receipt), or (iv) sent by telecopy or facsimile transmission,
with receipt acknowledged, to the parties at the following addresses (or at
such other addresses as shall be specified by the parties by like notice):


If to Seller:


TIFD III-X LLC

c/o GE Commercial Finance—EFS

Stamford, Connecticut 06927-1550

Attention:  Carl W. Petersen

Fax No.:  203-961-5818


With a copy to (which shall not constitute notice to
any Seller):


Thompson & Knight LLP

333 Clay Street, Suite 3300

Houston, Texas 77002

Attention:  Michael K. Pierce

Fax No.:  832-397-8049


If to Buyer:


515 South Flower, Suite 4800

Los Angeles, California 90071

Attention:  Randall H. Breitenbach or
Halbert S. Washburn

Fax No.:  213-225-5916



 14
 









Such notices, requests, demands, and other
communications shall be effective upon receipt.


Section 10.2.        Entire Agreement.   This
Agreement, together with any Exhibits and Schedules hereto and other writings
referred to herein or delivered pursuant hereto, constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.


Section 10.3.        Binding Effect;
Assignment; No Third Party Benefit. 
 This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors, and permitted assigns.  Except as otherwise expressly provided in
this Agreement, neither this Agreement nor any of the rights, interests, or
obligations hereunder shall be assigned by any of the parties hereto without
the prior written consent of the other parties. 
Except as provided in Article IX, nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person other than
the parties hereto, and their respective heirs, legal representatives,
successors, and permitted assigns, any rights, benefits, or remedies of any
nature whatsoever under or by reason of this Agreement.


Section 10.4.        Severability.   If any
provision of this Agreement is held to be unenforceable, this Agreement shall
be considered divisible and such provision shall be deemed inoperative to the
extent it is deemed unenforceable, and in all other respects this Agreement
shall remain in full force and effect; provided, however, that if any such
provision may be made enforceable by limitation thereof, then such provision
shall be deemed to be so limited and shall be enforceable to the maximum extent
permitted by Applicable Law.


Section 10.5.        GOVERNING LAW.   THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
OF LAWS THEREOF.


Section 10.6.        Further Assurances.   From
time to time following the Closing, at the request of any party hereto and
without further consideration, the other party or parties hereto shall execute
and deliver to such requesting party such instruments and documents and take
such other action (but without incurring any material financial obligation) as
such requesting party may reasonably request in order to consummate more fully
and effectively the transactions contemplated hereby.


Section 10.7.        Counterparts.   This
instrument may be executed in any number of identical counterparts, each of
which for all purposes shall be deemed an original, and all of which shall
constitute collectively, one instrument. 
It is not necessary that each party hereto execute the same counterpart
so long as identical counterparts are executed by each such party hereto.  This instrument may be validly executed and
delivered by facsimile or other electronic transmission.


Section 10.8.        Injunctive Relief.   The parties hereto acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached.  It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of the 



 15
 









provisions of
this Agreement, and shall be entitled to enforce specifically the provisions of
this Agreement, in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which the parties may be
entitled under this Agreement or at law or in equity.


ARTICLE
XI

DEFINITIONS AND REFERENCES


Section 11.1.        Certain Defined Terms.   When used in this Agreement, the following
terms shall have the respective meanings assigned to them in this Section 11.1:


“Affiliate”
means any person directly or indirectly controlling, controlled by or under
common control with another person.


“Agreement”
means this Limited Partner Interest Purchase and Sale Agreement, as hereafter
amended or modified in accordance with the terms hereof.


“Applicable Law”
means any statute, law, principle of common law, rule, regulation, judgment,
order, ordinance, requirement, code, writ, injunction, or decree of any Governmental
Entity.


“Business Day” means a day other than a Saturday, Sunday
or day on which commercial banks in the United States are authorized or
required to be closed for business.


“Code” means the
Internal Revenue Code of 1986, or any successor statute thereto, as amended.


“Dollars” or “$” means U.S.
Dollars.


“Environmental Laws”
means all national, state, municipal or local laws, rules, regulations,
statutes, ordinances or orders of any Governmental Entity relating to
(a) the control of any potential pollutant or protection of the air, water
or land, (b) solid, gaseous or liquid waste generation, handling,
treatment, storage, disposal or transportation or (c) the regulation of or
exposure to hazardous, toxic or other substances alleged to be harmful (including
Hazardous Materials).


“General Partner”
means BEP (GP) I, LLC, a Delaware limited liability company.


“Governing Documents”
means, when used with respect to an entity, the documents governing the
formation and operation of such entity, including (a) in the instance of a
corporation, the articles or incorporation and bylaws of such corporation,
(b) in the instance of a partnership, the partnership agreement, and
(c) in the instance of a limited liability company, the certificate of
formation and limited liability company agreement.


“Governmental Entity”
means any court or tribunal in any jurisdiction (domestic or foreign) or any
federal, state, county, municipal, or other governmental or quasi-governmental
body, agency, authority, department, commission, board, bureau, or
instrumentality (domestic or foreign).



 16
 









“Hazardous Materials”
means (a) any substance or material that is listed, defined or otherwise
designated as a “hazardous substance” under Section 101(14) of CERCLA,
(b) any petroleum or petroleum products, (c) radioactive materials,
urea formaldehyde, asbestos and PCBs and (d) any other chemical substance
or waste that is regulated by any Governmental Entity under any Environmental
Law.


“Hedge” means the Partnership hedges
identified in Schedule I.


“Hydrocarbons”
means oil, gas, other liquid or gaseous hydrocarbons, or any of them or any
combination thereof, and all products and substances extracted, separated,
processed and produced therefrom.


“IRS” means the
Internal Revenue Service.


“Knowledge” of a
specified Person (or similar references to a Person’s knowledge) means all
information actually or constructively known to (a) in the case of a
Person who is an individual, such Person, or (b) in the case of a Person
which is corporation or other entity, an executive officer or employee who
devoted substantive attention to matters of such nature during the ordinary
course of his employment by such Person. 
A Person has “constructive knowledge” of those matters which the
individual involved could reasonably be expected to have as a result of
undertaking an investigation of such a scope and extent as a reasonably prudent
man would undertake concerning the particular subject matter.


“Lien” means any
claim, lien, mortgage, security interest, pledge, charge, option, right-of-way,
easement, encroachment, or encumbrance of any kind.


“Person” means
any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, enterprise, unincorporated organization, or
Governmental Entity.


“Proceedings”
means all proceedings, actions, claims, suits, investigations, and inquiries by
or before any arbitrator or Governmental Entity.


“Reasonable Best Efforts”
means a party’s reasonable best efforts in accordance with reasonable
commercial practice.


“Securities Act”  means the Securities Act of 1933, as amended.


“Taxes” means
any income taxes or similar assessments or any sales, excise, occupation, use,
ad valorem, property, production, severance, transportation, employment,
payroll, franchise, or other tax imposed by any United States federal, state,
or local (or any foreign or provincial) taxing authority, including any
interest, penalties, or additions attributable thereto.


Section 11.2.        Certain Additional
Defined Terms.   In addition to the terms as are defined in Section 11.1,
the following terms are used in this Agreement as defined in the Articles,
Sections or other subdivisions set forth opposite such terms:



 17
 









 


	
  Defined Term

  	
   

  	
  Reference

  
	
   

  	
   

  	
   

  
	
  Assumed Obligations

  	
   

  	
  Section 6.8

  
	
  Buyer

  	
   

  	
  Preamble

  
	
  Closing

  	
   

  	
  Article II

  
	
  Closing Date

  	
   

  	
  Article II

  
	
  Damages

  	
   

  	
  Section 9.2

  
	
  Deposit

  	
   

  	
  Section 1.4(a)

  
	
  Effective Date

  	
   

  	
  Section 1.3

  
	
  Indemnified
  Party

  	
   

  	
  Section 9.4

  
	
  Indemnifying
  Party

  	
   

  	
  Section 9.4

  
	
  Interest

  	
   

  	
  Recital A

  
	
  New Hedge

  	
   

  	
  Section 6.6

  
	
  Notice Period

  	
   

  	
  Section 9.4

  
	
  Override

  	
   

  	
  Section 6.10

  
	
  Partnership

  	
   

  	
  Recital A

  
	
  Partnership
  Agreement

  	
   

  	
  Recital A

  
	
  Purchase Price

  	
   

  	
  Section 1.2

  
	
  Seller

  	
   

  	
  Preamble

  
	
  Survival Date

  	
   

  	
  Section 9.1(a)

  



 


Section 11.3.        References and
Construction.   All references in
this Agreement to articles, sections, subsections and other subdivisions refer
to corresponding articles, sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise.


(a)           Titles
appearing at the beginning of any of such subdivisions are for convenience only
and shall not constitute part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions.


(b)           The
words “this Agreement,” “this instrument,” “herein,” “hereof,” “hereby,” “hereunder”
and words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited.


(c)           Words
in the singular form shall be construed to include the plural and vice  versa,
unless the context otherwise requires. Pronouns in masculine, feminine and
neuter genders shall be construed to include any other gender.


(d)           Examples
shall not be construed to limit, expressly or by implication, the matter they
illustrate.


(e)           Unless
the context otherwise requires or unless otherwise provided herein, the terms
defined in this Agreement which refer to a particular agreement, instrument or
document also refer to and include all renewals, extensions, modifications,
amendments or restatements of such agreement, instrument or document, provided
that nothing contained in this subsection shall be construed to authorize such
renewal, extension, modification, amendment or restatement.


(f)            The
word “or” is not intended to be exclusive and the word “includes” and its
derivatives means “includes, but is not limited to” and corresponding
derivative expressions.



 18
 









(g)           No
consideration shall be given to the fact or presumption that one party had a
greater or lesser hand in drafting this Agreement.


Section 11.4.        Joinder.    The
General Partner joins in the execution of this Agreement for the purpose of
evidencing its agreement to the terms of Sections 6.3, 6.4, 6.6, 6.9 and
6.10.  By its execution and
delivery hereof, Seller, in its capacity as the limited partner of the
Partnership, hereby consents to the General Partner executing and delivering
this Agreement in the name and on behalf of the Partnership for purposes of the
Partnership Agreement, including Section 6.2 thereof.


[Remainder
of Page Intentionally Left Blank—Signature Pages Follow]



 19















IN WITNESS WHEREOF, the
undersigned have executed and delivered this Agreement as of the date set forth
above.


	
  

  	
  PARTNERSHIP:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BREITBURN
  ENERGY PARTNERS I, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BEP (GP) I, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Halbert S. Washburn

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BREITBURN
  OPERATING L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BREITBURN OPERATING GP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Halbert S. Washburn

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  FOR
  PURPOSES OF SECTION 11.4:

  
	
   

  	
   

  
	
   

  	
  BEP (GP)
  I, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


 


SIGNATURE PAGE TO ORRI
DISTRIBUTION AGREEMENT AND LIMITED

PARTNER INTEREST PURCHASE AND SALE AGREEMENT













IN WITNESS WHEREOF, the
undersigned have executed and delivered this Agreement as of the date set forth
above.


	
  

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TIFD
  III-X LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  AIRCRAFT SERVICES CORPORATION,

  
	
   

  	
   

  	
  as sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Raymond G. Edgar, Jr.

  
	
   

  	
  Title:

  	
  Vice President

  



 


SIGNATURE PAGE TO ORRI
DISTRIBUTION AGREEMENT AND LIMITED

PARTNER INTEREST PURCHASE AND SALE AGREEMENT