Document:

CERTIFICATE OF LIMITED PARTNERSHIP
                                      OF
                  PAINEWEBBER/GEODYNE INSTITUTIONAL/PENSION
                    ENERGY INCOME LIMITED PARTNERSHIP P-3

       The undersigned  General Partner hereby duly executes this Certificate of
Limited Partnership of PaineWebber/Geodyne  Institutional/Pension  Energy Income
Limited  Partnership  P-3 (the  "Partnership"),  which is being  filed  with the
Secretary of State of Oklahoma in accordance  with the Oklahoma  Revised Uniform
Limited Partnership Act.

       1.    The   name   of   the    Partnership    is    PaineWebber/Geodyne
Institutional/Pension Energy Income Limited Partnership P-3.

       2. The address of the registered  office of the  Partnership is 320 South
Boston,  The Mezzanine,  Tulsa,  Oklahoma 74103,  and the name of the registered
agent whose business  office  address will be the same as the registered  office
address is Geodyne Properties, Inc.

       3.    The address of the  principal  office of the  Partnership  in the
United States where its  partnership  records are to be kept or made available
is c/o Geodyne  Properties,  Inc.,  320 South Boston  Avenue,  the  Mezzanine,
Tulsa, Oklahoma 74103-3708.

       4. The name,  the mailing  address and the street address of the business
or residence of each general partner of the Partnership are as follows:

Name                       Mailing Address              Business Address
----                       ---------------              ----------------
Geodyne Properties,        320 S. Boston Ave.           320 S. Boston Ave.
Inc.                       The Mezzanine                The Mezzanine
                           Tulsa, OK 74103--3708         Tulsa, OK 74103--3708

       5.    The latest  date upon which the  Partnership  is to  dissolve  is
December 31, 2015.

       SIGNED on this 13th day of February, 1989.

                                        GENERAL PARTNER:

                                        Geodyne Properties, Inc.,
                                        a Delaware corporation

                                        By:  /s/ Michael E. Luttrell
                                            ------------------------------
                                             Michael E. Luttrell
                                             Executive Vice PresidentPAINEWEBBER/GEODYNE INSTITUTIONAL/PENSION
                      ENERGY INCOME P-3 LIMITED PARTNERSHIP
                              AMENDED AND RESTATED
                                    AGREEMENT
                             OF LIMITED PARTNERSHIP

       Amended and Restated Agreement of Limited Partnership,  dated as of May
10, 1989, among Geodyne Properties,  Inc., a Delaware corporation,  as General
Partner,   and   Geodyne   Institutional   Depositary   Company,   a  Delaware
corporation, the Depositary.

       WHEREAS,  PaineWebber/Geodyne  Institutional/Pension  Energy  Income  P-3
Limited  Partnership has heretofore been formed as a limited  partnership  under
the Oklahoma Revised Uniform Limited  Partnership Act pursuant to an Certificate
of Limited  Partnership dated as of February 13, 1989, and filed for recordation
in the office of the Secretary of State of the State of Oklahoma on February 14,
1989; and

       WHEREAS,  the parties  hereto  desire to amend the  Agreement  of Limited
Partnership  of the Limited  Partnership  and to restate  said  Agreement in its
entirety;

       Now,  therefore,  in  consideration of the mutual promises and agreements
made  herein,  the  parties,  intending  to be legally  bound,  hereby  agree as
follows:

                                   ARTICLE ONE
                                  Defined Terms

       The  defined  terms used in this  Agreement  shall,  unless  the  context
otherwise  requires,  have the  meanings  specified  in this  Article  One.  The
singular  shall  include the plural and the  masculine  gender shall include the
feminine,  the neuter and vice versa, as the context requires. Any terms used in
this Agreement  which are defined in the NPI  Partnership  Agreement and are not
otherwise defined herein shall have the respective meanings set forth in the NPI
Partnership Agreement.

       "Accountants"  shall mean Arthur Young & Company or such other nationally
recognized firm of independent  certified public accountants as shall be engaged
from time to time by the General Partner for the Limited Partnership.

       "Act" shall mean the Oklahoma Revised Uniform Limited Partnership Act, as
amended from time to time.

       "Activation" or "Activated" shall mean the date on which (i) with respect
to the Limited Partnership, the Depositary, on behalf of the Unit Holders, shall
have contributed the Unit Holders'  Subscriptions to the Limited Partnership and
(ii) with respect to the NPI  Partnership,  the Limited  Partnership  shall have
made its capital contribution to the NPI Partnership.

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       "Affiliate"  shall mean, when used with reference to a specified  Person:
(a) any Person directly or indirectly owning, controlling, or holding with power
to vote  10% or more  of the  outstanding  voting  securities  of the  specified
Person;  (b) any Person 10% or more of whose  outstanding  voting securities are
directly  or  indirectly  owned,  controlled,  or held with power to vote by the
specified Person; (c) any Person directly or indirectly controlling,  controlled
by, or under common control with, the specified Person; (d) any Person who is an
officer,  director,  partner or trustee of, or serves in a similar capacity with
respect to, the specified Person or of which the specified Person is an officer,
director,  partner or trustee,  or with  respect to which the  specified  Person
serves in a similar  capacity;  and (e) any relative or spouse of the  specified
Person.  Notwithstanding  the  foregoing,  no  Person  shall be  deemed to be an
Affiliate  solely by reason of its  ownership  of  Depositary  Units or  limited
partnership interests in a limited partnership.

       "Affiliated  Program" shall mean a drilling or income program (whether in
the  form of a  limited  partnership,  general  partnership,  joint  venture  or
otherwise) interests in which were offered (but not necessarily  exclusively) to
persons or entities  not  engaged in a trade or business  within the oil and gas
industry (other than by virtue of their  participation in an Affiliated Program)
and of which  the  General  Partner  or  Affiliate  serves as  general  partner,
venturer, sponsor or manager.

       "Agreement"  shall mean this  Amended and  Restated  Agreement of Limited
Partnership as originally executed and as amended from time to time.

       "Capital  Account"  shall  mean,  as to any  Partner or Unit  Holder,  an
account  maintained on the books of the Limited  Partnership in accordance  with
the provisions of Section 5.3D) below.

       "Capital  Contribution"  shall mean the cash contribution of a Partner to
the Limited Partnership.

       "Code" shall mean the Internal  Revenue Code of 1986,  as amended (or any
corresponding provisions of succeeding law).

       "Commissions"  shall mean the cash fees payable to the Dealer Manager and
the Selected  Dealers in connection with their  participation in the offering of
Depositary Units.

       "Consent"  shall  mean the  consent  of a Person,  given as  provided  in
Section 12.1, to do the act or thing for which the consent is solicited,  or the
act of granting such consent, as the context may require.

       "Dealer  Manager"  shall  mean  PaineWebber   Incorporated,   a  Delaware
corporation.

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       "Depositary"  shall mean  Geodyne  Institutional  Depositary  Company,  a
Delaware  corporation  and the Limited  Partner or any Person who at the time of
reference thereto has been admitted to the Limited  Partnership with the consent
of the General  Partner as a successor to the Interest of Geodyne  Institutional
Depositary Company in the Limited Partnership.

       "Depositary  Receipt" shall mean a certificate  issued in registered form
by the Depositary evidencing the ownership of one or more Depositary Units.

       "Depositary  Unit"  shall  mean an  increment  of the  attributes  of the
Interest  of the  Depositary  as a Limited  Partner  that is  assigned to a Unit
Holder.

       "Direct  Administrative Costs" shall mean the actual and necessary direct
costs  attributable to services  provided to the Limited  Partnership by parties
other  than the  General  Partner or its  Affiliates,  whether  incurred  by the
Limited  Partnership  directly  or  incurred  by  the  General  Partner  or  its
Affiliates,  including the annual audit fees, legal fees and expenses,  the cost
of  reviewing  tax  returns and  reports,  the cost of  evaluations  prepared by
independent  petroleum engineers pursuant to Section 10.4C of this Agreement and
all other such costs  directly  incurred  by or for the  benefit of the  Limited
Partnership.

       "Distributable   Cash"   shall   mean,   with   respect  to  the  Limited
Partnership's  operations at any time, the amount of cash assets on hand at such
time less amounts  required to be retained out of such cash assets,  in the sole
judgment of the General  Partner,  to pay costs,  expenses or other  obligations
whether then accrued or anticipated to accrue in the future.

       "Eligible Investor" shall mean a Person who is an "independent  producer"
for purposes of the Crude Oil Windfall  Profit Tax Act of 1980 and who qualifies
for the lower rate of tax on Tier 1 and Tier 2 oil. As of the date  hereof,  the
term "independent  producer" means any Person other than a Person who either (i)
sells petroleum products,  directly or through "related" Persons, through retail
outlets,  if gross sales of petroleum products exceed $5,000,000 in any calendar
year or (ii) refines,  in conjunction with "related"  Persons,  more than 50,000
barrels of crude oil on any day  during a  calendar  year.  A  "related"  Person
includes any Person in which a Person has a significant  ownership  interest (5%
or  more),  or which has such an  interest  in the  Person,  or in which a third
Person having such an interest in the Person also has an interest.

       "Fiscal Year" shall mean the calendar year.

       "General and  Administrative  Costs" shall mean all customary and routine
legal,  accounting,  data  processing,  depreciation  (other  than  depreciation
relating  to real  property),  geological,  engineering,  travel,  office  rent,
telephone, secretarial, employee compensation and

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<PAGE>

benefits,  and other items of a general and administrative  nature, whether like
or unlike the foregoing,  and any other incidental expenses reasonably necessary
to the conduct of the  Limited  Partnership's  business,  and  generated  by the
General  Partner  or any  Affiliate  (including  the  Depositary)  other than an
Affiliated  Program computed on a cost basis,  determined by the General Partner
in accordance  with  generally  accepted  accounting  principles  and subject to
review by an independent  public  accountant or certified  public  accountant in
connection with the annual audit of the Limited  Partnership and its Affiliates.
General and  Administrative  Costs  shall not include any Direct  Administrative
Costs or costs of the NPI Partnership.

       "General  Partner"  shall  mean  Geodyne  Properties,  Inc.,  a  Delaware
corporation,  acting in such  capacity,  and any  other  Person  admitted  as an
additional or substituted  General Partner pursuant to the provisions of Article
Six of this Agreement.

       "Geodyne  Properties" shall mean Geodyne  Properties,  Inc., a Delaware
corporation.

       "Hydrocarbons" shall mean crude oil, natural gas, condensate, natural gas
liquids and other liquid or gaseous hydrocarbons.

       "Incapacity" or "Incapacitated" shall mean the adjudication of bankruptcy
(except that, in the case of the General Partner,  the term  "bankruptcy"  shall
mean only being  subject to Chapter 7 of the  Federal  Bankruptcy  Reform Act of
1978),  of  interdiction,  of  incompetence,  or  of  insanity,  or  the  death,
dissolution or termination  (other than by merger or  consolidation  under which
the   surviving   entity   agrees  to  assume   all  of  the   obligations   and
responsibilities  of the  merged  or  consolidated  Person  set  forth  in  this
Agreement), as the case may be, of any Person.

       "Income"  shall mean the gross income of the Limited  Partnership  or the
NPI  Partnership  (as the context may require) as determined  for Federal income
tax purposes, including all capital or Code Section 1231 gains (but not losses).

       "Income Program" shall mean any program whose investment  objective is to
directly  acquire,  hold,  operate,  and/or  dispose  of  producing  oil and gas
properties.  An Income  Program may acquire any type of ownership  interest in a
producing property,  including but not limited to working interests,  royalties,
or  production  payments.  A  program  which  spends  at  last  90%  of  capital
contributions  and  funds  borrowed   (excluding   offering  and  organizational
expenses) in the above described activities is presumed to be an Income Program.

       "Interest"  shall mean the entire  ownership  interest (which may, either
for a Partner's Capital Account or a Partner's  interest in Distributable  Cash,
be expressed as a  percentage)  of a Partner in the Limited  Partnership  at any
particular time, including the rights and obligations of such Partner under this
Agreement and the Act.

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<PAGE>

       "Limited Partner" shall mean the Depositary.

       "Limited  Partnership"  shall  mean  the  limited  partnership  continued
hereby.

       "Limited  Partnership  Account"  shall mean the bank  account or accounts
established by the General Partner pursuant to Section 10.3 of this Agreement.

       "Limited  Partnership  Property"  shall mean all  interest,  property and
right of any type owned by the Limited Partnership.

       "Managing   Partner"  shall  mean  Geodyne  Energy  Company,  a  Delaware
corporation, in such capacity, and any successor acting in such capacity.

       "Net  Profits  Interest"  shall mean an interest in a Producing  Property
which  entitles the holder thereof to a share of the gross revenues from oil and
gas  production  from the  Producing  Property less all  operating,  production,
development,  transportation,  transmission and marketing  expenses,  severance,
sales,  ad  valorem  and  excise  taxes  (including  the  windfall  profit  tax)
attributable to such production.

       "Notification" shall mean a writing,  containing the information required
by this Agreement to be  communicated  to any Person,  hand delivered or sent by
registered or certified mail, return receipt requested, postage prepaid, to such
Person at the last  known  address  of such  Person,  the date of the  certified
receipt (or such other  evidence of receipt)  therefor  being deemed the date of
the giving of Notification;  provided,  however,  that any written communication
containing the information sent or delivered to the Person and actually received
by the Person shall constitute Notification for all purposes of this Agreement.

       "NPI Partnership" shall mean the general partnership of which the Limited
Partnership shall be a general partner.

       "NPI   Partnership   Agreement"  shall  mean  the  agreement  of  general
partnership  under which the NPI Partnership is formed,  as amended from time to
time.

       "NPI  Partnership  Well" shall mean any well in which the NPI Partnership
has a Royalty or Net Profits Interest.

       "Organization  and  Offering  Costs"  shall  mean all costs and  expenses
incurred  by the General  Partner  and its  Affiliates  in  connection  with the
organization  and  activation  of the Limited  Partnership,  including,  without
limitation, the legal, printing,  accounting and other direct and indirect costs
incurred in connection with  preparing,  filing and recording of this Agreement,
the costs incurred with respect to the registration for offer and sale of the

                                      -5-
<PAGE>

Depositary  Units  under  applicable  federal  and state  securities  laws,  the
wholesale  offering and  marketing  fees and expenses of the Dealer  Manager and
Geodyne  Securities,  Inc.,  a  subsidiary  of  Geodyne  Resources  which  is  a
registered broker-dealer, and other front--end fees (other than any organization
and offering costs as defined in the NPI  Partnership  Agreement).  Organization
and Offering Costs shall not include the Commissions  paid to the Dealer Manager
or  reallowed  to the  Selected  Dealers,  but shall  include  fees and expenses
(including  expense  reimbursements)  paid to  persons  in  connection  with the
offering and sale of Depositary Units and issuing Depositary Receipts, including
due  diligence  costs;  and,  subject to the  Dealer  Manager's  control,  sales
incentive  items,  including but not limited to travel  bonuses,  and awards for
account executives  participating in the offering and sales incentives and other
payments  offered  to  representatives  of the Dealer  Manager  to  promote  the
solicitation of subscriptions.

       "Partner" shall mean the General Partner or any Limited Partner.

       "Person" shall mean any individual,  partnership,  corporation,  trust or
other entity.

       "Prior Limited Partnership" shall mean any limited partnership  activated
prior to the Activation of the Limited  Partnership of which depositary units or
units of limited  partnership  interest  were  offered and sold  pursuant to the
Prospectus or pursuant to the  prospectus  prepared for the  PaineWebber/Geodyne
Energy Income Programs I and II.

       "Producing  Property"  shall  mean  any  property  (or  interest  in such
property) with a well or wells capable of producing  Hydrocarbons  in commercial
quantities or properties unitized with such properties or properties adjacent to
such  properties  which are acquired as an incidental part of the acquisition of
such properties. The term also includes well machinery and equipment,  gathering
systems,  storage facilities or processing  installations or other equipment and
property associated with the production of Hydrocarbons.

       "Profits"  and  "Losses"  shall  mean the net income or net losses of the
Limited  Partnership for federal income tax purposes  determined as of the close
of the Limited Partnership's Fiscal Year, as well as, when the context requires,
any tax-exempt income and nondeductible expenses.

       "Prospectus"  shall mean the prospectus  pursuant to which the Depositary
Units were offered, including all supplements or amendments thereto delivered in
such offering, if any.

       "Proved  Reserves" shall mean those  quantities of  Hydrocarbons,  which,
upon analysis of geologic and engineering data, appear with reasonable certainty
to be recoverable in the future from known Hydrocarbon reservoirs under existing
economic  and  operating  conditions.  Proved  Reserves  are  limited  to  those
quantities  of  Hydrocarbons  which can be expected,  with little  doubt,  to be
recoverable commercially at current prices and costs, under existing

                                      -6-
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regulatory  practices  and with  existing  conventional  equipment and operating
methods. Depending upon their status of development,  such Proved Reserves shall
be  subdivided  into  the  following  classifications  and  have  the  following
definitions:

             (a) "Proved  Developed  Reserves"  shall mean Proved Reserves which
       can be expected to be  recovered  through  existing  wells with  existing
       equipment and operating methods. This classification shall include:

                   (1) "Proved  Developed  Producing  Reserves" which are Proved
             Developed  Reserves which are expected to be produced from existing
             wells; and

                   (2)  "Proved  Developed  Non-Producing  Reserves"  which  are
             Proved Developed Reserves which exist behind the casing of existing
             wells,  or at minor depths below the present  bottom of such wells,
             which  are  expected  to be  produced  through  these  wells in the
             predictable future, where the cost of making Hydrocarbons available
             for production should be relatively small compared to the cost of a
             new well.

             Additional   Hydrocarbons  expected  to  be  obtained  through  the
       application  of  improved  recovery  techniques  are  included as "Proved
       Developed  Reserves"  only after  testing by a pilot project or after the
       operation  of an  installed  program  has  confirmed  through  production
       responses that increased recovery will be achieved.

             (b) "Proved Undeveloped Reserves" shall mean all reserves which are
       expected  to be  recovered  from new wells on  undrilled  acreage or from
       existing  wells where a  relatively  major  expenditure  is required  for
       recompletion.  Such  reserves on  undrilled  acreage are limited to those
       drilling units offsetting  productive units which are reasonably  certain
       of  production  when  drilled;  provided  that proved  reserves for other
       undrilled  units  can  be  claimed  where  it can  be  demonstrated  with
       certainty,  based on accepted  geological,  geophysical  and  engineering
       studies and data, that there is continuity of production from an existing
       productive  formation.  No estimates for Proved Undeveloped  Reserves are
       attributable to any acreage for which improved  recovery is contemplated,
       unless the techniques to be employed have been proved effective by actual
       tests in the same area and reservoir.

       "Remove",  "Removed"  or  "Removal"  shall mean,  with  reference  to the
removal of the General Partner, the termination of the management powers, duties
and  responsibilities of the General Partner pursuant to Sections 6.3 and 6.5 of
this Agreement and the removal of the General Partner as a Partner.

       "Royalty"  shall mean an interest,  including an overriding  royalty,  in
gross  production  or the  proceeds  therefrom  which does not require the owner
thereof  to  bear  any of the  cost of  production,  development,  operation  or
maintenance.

                                      -7-
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       "Sale" shall mean any event or  transaction  that is, for federal  income
tax  purposes,  considered  a  sale,  exchange  or  abandonment  by the  Limited
Partnership of any Limited Partnership Property.

       "Selected  Dealer"  shall mean a member in good  standing of the National
Association  of Securities  Dealers,  Inc. which has been selected by the Dealer
Manager to offer and sell the Depositary Units.

       "Sponsor"  shall mean any person  directly or indirectly  instrumental in
organizing  a  program  or any  person  who will  manage or  participate  in the
management of a program,  including the general  partner(s) and any other person
who  regularly  performs or selects the person who  performs  25% of more of the
exploratory,  developmental or producing  activities of the program,  or segment
thereof.  "Sponsor"  does not include wholly  independent  third parties such as
attorneys,   accountants,  and  underwriters  whose  only  compensation  is  for
professional  services  rendered in  connection  with the offering of Depositary
Units but does include Affiliates of the Sponsor.

       "State" shall mean the State of Oklahoma.

       "Subscription  Agreement"  shall mean the  Subscription  Agreement in the
form attached to the Prospectus as Exhibit C.

       "Subsequent  Limited  Partnership"  shall  mean any  limited  partnership
activated  after the Activation of the Limited  Partnership of which  Depositary
Units are offered and sold pursuant to the Prospectus.

       "Substituted  Limited  Partner"  shall  mean any Person  admitted  to the
Limited Partnership as a Partner pursuant to Section 7.3 or Sections 8.1 and 8.2
of this Agreement.

       "Unit  Holders"  shall mean any Person who holds  Depositary  Receipts in
accordance with Section 7.1 or Section 8.3 hereof as reflected in the records of
the Partnership and the Depositary.

       "Unit  Holders'  Subscription"  shall mean the  aggregate  dollar  amount
initially subscribed for by Persons to acquire the Depositary Units.

       "Working  Interest"  shall mean the interest  (whether  held  directly or
indirectly) in a lease (as defined in the NPI  Partnership  Agreement)  which is
subject to some portion of the expense of production,  development, operation or
maintenance.

                                   ARTICLE TWO

       Continuation; Name, Place of Business and Office; Term

       Section 2.1. Continuation

       The parties  hereto hereby  continue the limited  partnership  heretofore
formed pursuant to the Act, and the rights and liabilities of the Partners shall
be as  provided  in the Act,  except as  otherwise  expressly  provided  in this
Agreement.

                                      -8-
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       Section 2.2.  Name, Place of Business and Office, Agent

       The   Limited   Partnership   shall   be   conducted   under   the   name
PaineWebber/Geodyne Institutional/Pension Energy Income P-2 Limited Partnership.
The business of the Limited  Partnership  may,  however,  be conducted under any
other name deemed  necessary  or  desirable  by the General  Partner in order to
comply with  applicable  laws. The office and principal place of business of the
Limited  Partnership  shall be c/o Geodyne  Properties,  Inc.,  320 South Boston
Avenue, The Mezzanine,  Tulsa, Oklahoma 74103-3708.  The registered agent of the
Limited  Partnership shall be Geodyne  Properties,  Inc., 320 South Boston,  The
Mezzanine,  Tulsa,  Oklahoma  74103-3708.  The  General  Partner  may change the
principal  place of business and the  location of such office and may  establish
such  additional  offices as they deem  advisable  from time to time;  provided,
however,  that in the event  the  principal  place of  business  of the  Limited
Partnership  shall be changed,  the General  Partner shall provide  Notification
thereof to the Unit  Holders.  The General  Partner  shall not be  obligated  to
provide a copy of the  Certificate  of  Limited  Partnership  as filed  with the
Oklahoma Secretary of State to the Limited Partner or Unit Holders.

       Section 2.3.  Purpose

       The business and purpose of the Limited  Partnership shall be to become a
general partner in the NPI Partnership.  Such business and purpose shall include
the  doing  of any and all  things  incident  thereto  or  connected  therewith,
including the carrying on of the business of the NPI Partnership in the event of
its  termination  if it is determined  by the General  Partner to be in the best
interests of the Unit Holders.  The Limited  Partnership shall not engage in any
other business or activity.

       Section 2.4  Term

       The Limited Partnership shall continue in force and effect until December
31, 2005, provided that the General Partner shall extend the term of the Limited
Partnership  for up to five  periods of two years each in the event that the NPI
Partnership's  term has been so extended,  or until  dissolution  prior  thereto
pursuant to the provisions hereof.

                                  ARTICLE THREE

                              Partners and Capital

       Section 3.1.  General Partner

       A. The name,  address and Capital  Contribution  of the General Partner
are set forth in Schedule A attached hereto and are incorporated herein.

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<PAGE>

       B. The General  Partner shall not be required to contribute  funds to the
Limited  Partnership to pay for Limited Partnership costs allocated to it except
to the extent necessary to pay costs referred to in Section 5.2B and any amounts
required to satisfy its obligations under Section 9.2.

       Section 3.2.  Limited Partner

       A. The name,  address and Capital  Contribution  of the  Depositary  as
Limited  Partner  are set  forth in  Schedule  A hereto  and are  incorporated
herein.

       B.  Neither the  Depositary  nor any Unit  Holder  shall be required to
make any additional capital contribution to the Limited Partnership.

       C. The Depositary shall engage in no business activity and shall incur no
liabilities  other than acting as Depositary for the Limited  Partnership or any
other limited  partnership in which depositary  units evidencing  assignments of
limited  partnership  interests are offered by the  Prospectus.  The  Depositary
shall not amend its  Certificate of  Incorporation  or By-laws without the prior
Consent of the Limited Partnership.

       Section 3.3.  Certain Returns of Capital

       Any portion of the capital contribution of the Limited Partnership to the
NPI  Partnership  which is  distributed to the Limited  Partnership  pursuant to
Section 3.4 of the NPI Partnership  Agreement  shall be distributed  promptly to
the Unit Holders in proportion to the Depositary  Units held by them as a return
of part of their Subscription. In addition, the General Partner shall contribute
cash to the Limited  Partnership (with respect to which its Capital Account will
be credited)  in an amount  equal to the amounts paid to the General  Partner or
its Affiliates  from the Unit Holders'  Subscriptions  in respect of Commissions
and Organization and Offering Costs  attributable (on a proportionate  basis) to
the amount of the unexpended Unit Holders' Subscriptions so refunded, which cash
shall  be  refunded  pro  rata  to  the  Limited   Partners  (except  that  cash
representing  refunded  Commissions  and  amounts  charged as  Organization  and
Offering  Costs shall be  distributed  to each Unit Holder in  proportion to the
manner in which Commissions and Organization and Offering Costs  attributable to
his  subscription  were  payable)  together  with the  unexpended  Unit Holders'
Subscriptions.

       Section 3.4.  Limited Partnership Capital

       A. No Partner shall be paid interest on any Capital  Contribution  to the
Limited  Partnership or on such Partner's Capital Account,  notwithstanding  any
disproportion therein as between Partners.

                                      -10-
<PAGE>

       B.  Except  as  provided  in  Sections  3.2,  3.3,  6.1  and  9.2 of this
Agreement, no Partner or Unit Holder shall have the right to withdraw or receive
any return of the Capital Contribution.  Under circumstances  involving a return
of any  Capital  Contribution,  no  Limited  Partner or Unit  Holder  shall have
priority  over any other  Limited  Partner  nor shall any Partner or Unit Holder
have the right to receive any property other than cash,  except as may otherwise
be provided in Sections 6.4 and 9.2A of this Agreement.

       C. Any  provision  herein to the  contrary  notwithstanding,  no  Limited
Partner or Unit Holder should have an  obligation  to restore a deficit  balance
that may exist in its Capital  Account  following  the winding up of the Limited
Partnership's business.

       Section 3.5.  Application of Capital Contributions

       A. The General Partner shall deposit in the Limited  Partnership  Account
the Capital  Contributions  attributable  to the Limited Partner and shall apply
such Capital  Contributions to (i) pay to the General Partner an amount equal to
3.5%  of the  Unit  Holders'  Subscriptions  in  consideration  of  the  General
Partner's  payment of Organization  and Offering Costs,  less the amounts of any
reduced  charges  for  such  costs  allowed  by the  General  Partner,  (ii) pay
Commissions,  (iii)  establish a  reasonable  reserve  for  working  capital and
payment of the Unit Holders' allocable share of Direct Administrative Costs, and
(iv) contribute the balance of the Partners'  Capital  Contributions  to the NPI
Partnership in exchange for the Limited Partnership's interest therein.

       Section 3.6.  Liability of Partners and Unit Holders

       A.  Except as provided in the Act,  neither the  Depositary  nor the Unit
Holders  shall be  personally  liable for any debts,  liabilities,  contracts or
obligations  of the Limited  Partnership.  To the extent  that any  distribution
pursuant  to  Sections  5.1 or 9.2 is deemed to  constitute  a return of capital
under the Act, the General  Partner  shall not seek to recover any  distribution
unless the General Partner has applied all other available  Limited  Partnership
assets  to the  payment  of  liabilities  of the  Limited  Partnership  and  the
liabilities of the Limited  Partnership,  other than to Partners,  have not been
fully paid, satisfied,  assumed or discharged.  In no event shall the Depositary
or any  Unit  Holder  be  obligated  to make  any  contribution  to the  Limited
Partnership for any purpose  whatsoever other than Capital  Contributions of the
Depositary representing the proceeds of the offering of Depositary Units.

       B. Geodyne  Properties and any General Partner  subsequently  admitted to
the Limited  Partnership  agrees that it shall remain  generally  liable for any
obligation or recourse liability of the Limited Partnership  incurred during the
period  in  which  it is a  General  Partner  and  to  the  extent  the  Limited
Partnership has incurred personal liability.

                                      -11-
<PAGE>

                                  ARTICLE FOUR
                                   Management

       Section 4.1.   Management and Control of the Limited Partnership

       A. The General Partner,  within the authority  granted to it under and in
accordance  with  the  provisions  of this  Agreement,  shall  have the full and
exclusive  right to manage and control the  business  and affairs of the Limited
Partnership  and to make all  decisions  regarding  the  business of the Limited
Partnership  and shall  have all of the  rights,  powers  and  obligations  of a
general partner of a limited partnership under the laws of the State.

       B. Neither the Depositary or any Unit Holder,  as such, shall participate
in the management of or have any control over the Limited Partnership's business
nor  shall  the  Depositary  or any  Unit  Holder,  as such,  have the  power to
represent,  act  for,  sign  for or bind  the  General  Partner  or the  Limited
Partnership.  The Depositary and the Unit Holders hereby consent to the exercise
by the General Partner of the powers conferred on it by this Agreement.

       Section 4.2.  Powers of the General Partner

       A. In addition to any other rights and powers  which the General  Partner
may possess under this Agreement and the Act, the General Partner shall have the
power,  except and subject to the extent  otherwise  provided or limited in this
Agreement:

             (i) to contribute  the balance  (after payment and retention of the
       amounts set forth in Section 3.5) of all Capital Contributions to the NPI
       Partnership as required by the Limited  Partnership's  interest  therein,
       and to execute the NPI Partnership Agreement (including any amendment and
       restatement thereof) on behalf of the Limited Partnership;

             (ii) if the  NPI  Partnership  is  dissolved,  to  enter  into  all
       transactions  contemplated by the NPI Partnership  Agreement,  subject to
       the  limitations  and  provisions   contained  therein,   notwithstanding
       anything to the contrary contained herein;

             (iii)  to   maintain   the  books  and  records  of  the  Limited
       Partnership in accordance with the provisions of Section 10.1;

             (iv) subject to Sections 4.5D, 4.5E and 4.5F, to consent to certain
       actions  on  behalf  of the  Limited  Partnership  pursuant  to  the  NPI
       Partnership Agreement;

             (v) to engage in any kind of  activity  and  execute,  perform  and
       carry out contracts, agreements and other documents of any kind necessary
       or  incidental  to, or in  connection  with,  the  accomplishment  of the
       purposes of the Limited Partnership; and

                                      -12-
<PAGE>

             (vi) to perform all duties imposed by Sections 6221 through 6232 of
       the Code on the General  Partner as "tax matters  partner" of the Limited
       Partnership,  including (but not limited to) the following: (a) the power
       to conduct  all audits and other  administrative  proceedings  (including
       windfall  profits tax audits)  with  respect to Limited  Partnership  tax
       items;  (b) the  power to  extend  the  statute  of  limitations  for all
       Partners and Unit Holders with respect to Limited  Partnership tax items;
       (c) the power to file a petition  with an  appropriate  federal court for
       review of a final Limited Partnership  administrative adjustment; and (d)
       the power to enter into a settlement with the Internal Revenue Service on
       behalf of, and binding upon, the Depositary and those Unit Holders having
       less than a 1% interest in Profits  unless the  Depositary or Unit Holder
       notifies the Internal  Revenue  Service and the General  Partner that the
       General Partner may not act on its behalf.

       B. No person,  firm or corporation  dealing with the Limited  Partnership
shall be required to inquire into the  authority of the General  Partner to take
or refrain from taking any action or make or refrain  from making any  decision,
but any person so inquiring  shall be entitled to rely upon a certificate of the
General Partner as to its due authorization.

       Section 4.3.  Prohibited Transactions

        Notwithstanding  any other  provision of this Agreement to the contrary,
the following transactions are expressly prohibited:

             (i)   the  Limited  Partnership  shall  not make any loans to the
       General Partner or any Affiliate;

             (ii) except as expressly  contemplated hereby, no agent,  attorney,
       accountant or other  independent  consultant  or  contractor  who is also
       employed on a full-time  basis by the  General  Partner or any  Affiliate
       shall be compensated by the Limited Partnership for his services;

             (iii) there shall be no commingling of Limited  Partnership funds
       with funds of any other entity;

             (iv) the Limited  Partnership  shall not make any advance payment
       to the General Partner or its Affiliates; and

             (v) no  creditor  who  makes  a  nonrecourse  loan  to the  Limited
       Partnership  may have or  acquire,  at any time as a result of making the
       loan, any direct or indirect interest in the profits, capital or property
       of the Limited Partnership other than as a secured creditor.

                                      -13-
<PAGE>

       Section 4.4.  Other Agreements of the General Partner

       A.      Anything in this Agreement to the contrary notwithstanding,  it
is agreed that:

             (i) the  General  Partner  and its  Affiliates  shall  not take any
       action with respect to the assets or property of the Limited  Partnership
       which does not benefit primarily the Limited  Partnership,  including the
       utilization of Limited Partnership funds as compensating balances for the
       benefit of the General Partner or its Affiliates;

             (ii) neither the General  Partner nor any Affiliate shall render to
       the Limited  Partnership  any  services  nor sell or lease to the Limited
       Partnership any equipment or supplies unless:

                   (a)  the   General   Partner   or   Affiliate   is   engaged,
             independently  of  the  Limited  Partnership,  in the  business  of
             rendering  such  services or selling or leasing such  equipment and
             supplies to a  substantial  extent to other Persons in the industry
             in addition to drilling  and income  programs in which they have an
             interest;

                   (b) the compensation, price or rental therefor is competitive
             with the compensation, price or rental of other Persons in the area
             engaged in the business of rendering comparable services or selling
             or leasing comparable equipment and supplies which could reasonably
             be made available to the Limited Partnership; and

                   (c) provided that, if the General Partner or Affiliate is not
             engaged in a business  within the meaning of subdivision  (a), then
             such  compensation,  price  or  rental  shall  be the  cost of such
             services, equipment or supplies to the General Partner or Affiliate
             or the  competitive  rate  which  could be  obtained  in the  area,
             whichever is less.

       B. In the event the Limited  Partnership  acquires a direct interest in a
Producing Property, the General Partner shall be subject to the same limitations
imposed  upon  the  Managing  Partner  set  forth  in  Section  4.3C  of the NPI
Partnership Agreement.

       Section 4.5.  Restrictions on the Authority of the General Partner

       A. The General Partner shall not have the authority to:

             (i)   do any act in  contravention  of this  Agreement  or  which
       would  make it  impossible  to carry on the  ordinary  business  of the
       Limited Partnership;

             (ii)  confess a judgment against the Limited Partnership;

                                      -14-
<PAGE>

             (iii) possess  Limited  Partnership  Property or assign,  pledge or
       hypothecate  rights in specific  Limited  Partnership  Property for other
       than a Limited Partnership purpose;

             (iv)  admit a Person as a General  Partner  or a Limited  Partner
       except as otherwise provided herein; or

             (v) perform any act which would result in loss of the  Depositary's
       status as a limited partner under the Act or the laws of the State or the
       loss of limited  liability  under the laws of any other  jurisdiction  in
       which the Limited  Partnership is doing business,  or would subject it or
       any Unit Holder to  liability  as a general  partner in any  jurisdiction
       including use of the Depositary's or any Unit Holder's name in conducting
       the business of the Limited Partnership.

       B. The  General  Partner  shall not lease,  sell,  abandon  or  otherwise
dispose of any assets of the Limited  Partnership  to the General  Partner or to
any of its Affiliates; provided, however, that if the Limited Partnership should
own any  inventory  or  other  materials  which  is used  tangible  property  or
equipment used in production or  transportation  of Hydrocarbons  (but excluding
Hydrocarbons),  such  inventory or materials may be  transferred  to the General
Partner  or any of its  Affiliates  at the  applicable  rates  set  forth in the
standard  form of  accounting  procedure  then  recommended  by the  Council  of
Petroleum Accountants Societies of North America.

       C.  Without  the  consent of the  Depositary,  which  shall be given upon
receipt of the Consent of Unit Holders  owning more than 50% of the  outstanding
Depositary Units, the General Partner shall not have the authority to:

             (i) lease,  sell,  or  otherwise  dispose of at any one time all or
       substantially all of the assets of the Limited  Partnership other than in
       the ordinary course of business;

             (ii)  elect to dissolve and wind up the Limited Partnership; or

             (iii) except as set forth in Article Eleven,  adopt any amendment
       to this Agreement.

       D. The General Partner shall not cause the Limited Partnership to consent
to, or join in, any amendment,  or modification  of, or supplement to, or waiver
of the terms of, the NPI Partnership  Agreement  unless:  (i) in the judgment of
the General Partner such amendment, modification, supplement or waiver would not
materially  adversely  affect the Limited  Partnership's  rights  under the then
existing NPI Partnership Agreement or such amendment, modification,  supplement,
or  waiver  is in the  best  interests  of the  Unit  Holders;  or  (ii)  if the
conditions  of Section  12.3 are  satisfied,  the Consent of the  Depositary  is
obtained,  which shall be given if the Consent of Unit Holders  owning more than
50% of the outstanding Depositary Units

                                      -15-
<PAGE>

is  obtained.  If the  conditions  of Section  12.3 are  satisfied,  the General
Partner shall propose any amendment to the NPI  Partnership  Agreement on behalf
of the Limited Partnership which is proposed by Unit Holders owning at least 10%
of the outstanding Depositary Units.

       E. Unless the conditions of Section 12.3 are satisfied and the Consent of
the Depositary is obtained,  which shall be given if the Consent of Unit Holders
owning  more  than 50% of the  outstanding  Depositary  Units is  obtained,  the
General Partner shall not have the authority to consent on behalf of the Limited
Partnership to the:

             (i)   lease,  sale or other disposition at any one time of all or
       substantially all of the assets of the  NPI Partnership; or

             (ii)  dissolution and winding up of the NPI Partnership.

       F. Unless the conditions of Section 12.3 are satisfied and the Consent of
the Depositary is obtained,  which shall be given if the Consent of Unit Holders
owning  more  than 50% of the  outstanding  Depositary  Units is  obtained,  the
General Partner shall not have the authority to cause the Limited Partnership to
(i) remove the Managing  Partner,  or (ii) appoint a successor  Managing Partner
pursuant to Sections 6.2 and 6.3 of the NPI Partnership Agreement.

       Section 4.6.   Duties and Obligations of the General Partner

       The General Partner shall:

       (i) use its best  efforts to take all actions  that may be  necessary  or
appropriate for the continuation of the Limited Partnership's valid existence as
a limited  partnership or  partnership in commendam  under the laws of the State
and the laws of any other jurisdiction in which the Limited Partnership is doing
business, and for the acquisition and holding, in accordance with the provisions
of this Agreement and applicable  laws and  regulations,  of the interest of the
Limited Partnership in the NPI Partnership;

       (ii) devote to the Limited  Partnership the time that it shall deem to be
necessary to conduct the Limited Partnership's  business and affairs in the best
interests of the Limited Partnership;

       (iii) be under a fiduciary  duty and obligation to conduct the affairs of
the  Limited  Partnership  in the best  interests  of the  Limited  Partnership,
including the  safekeeping and use of all Limited  Partnership  funds and assets
(whether or not in the immediate  possession or control of the General  Partner)
and the use thereof for the benefit of the Limited Partnership;

       (iv) at all times act with  integrity  and good  faith and  exercise  due
diligence  in all  activities  relating  to the  conduct of the  business of the
Limited Partnership and in resolving conflicts of interest;

                                      -16-
<PAGE>

       (v) use its best efforts at all times to maintain its aggregate net worth
at a level that is sufficient to meet all present and future requirements set by
statute,  Treasury  Regulations,  the Internal  Revenue Service or the courts to
ensure that the Limited  Partnership  will not fail to be classified for Federal
income tax purposes as a partnership, rather than as an association taxable as a
corporation, on account of the net worth of the General Partner;

       (vi)  prepare or cause to be prepared and shall file on or before the due
date (or any extension thereof) any Federal, state or local tax returns required
to be filed by the Limited Partnership;

       (vii) cause the  Limited  Partnership  to pay any taxes  payable by the
Limited Partnership;

       (viii)  use its best  efforts  to cause  the  Limited  Partnership  to be
formed,  reformed,  qualified to do business, or registered under any applicable
assumed or  fictitious  name  statute  or similar  law in any state in which the
Limited Partnership then owns property or transacts business, if such formation,
reformation,  qualification  or  registration  is  necessary or advisable in its
counsel's  opinion to protect the limited  liability of the  Depositary  and the
Unit  Holders or to permit the Limited  Partnership  lawfully to own property or
transact business;

       (ix) from time to time, prepare and file all amendments to this Agreement
and other  similar  documents  that are required by law to be filed and recorded
for any reason, in the office or offices that are required under the laws of the
State or any other  state in which the  Limited  Partnership  is then  formed or
qualified:

       (x) do all  other  acts and  things  (including  making  publications  or
periodic  filings  of this  Agreement  or  amendments  hereto  or other  similar
documents  without the necessity of mailing or delivering copies of them to each
Unit Holder)  that may now or  hereafter be deemed by the General  Partner to be
necessary,

             (a)   for  the  perfection  and  continued   maintenance  of  the
       Limited  Partnership  as a  limited  partnership  under the laws of the
       State,

             (b) to protect the limited liability of the Depositary and the Unit
       Holders under the laws of the State and other  jurisdictions in which the
       Limited Partnership is doing business, and

             (c) to cause this  Agreement,  certificates  or other  documents to
       reflect  accurately  the  agreement of the Partners and the Unit Holders,
       the identity of the  Depositary as the Limited  Partner and the amount of
       its Capital  Contribution  made by the  Depositary  on behalf of the Unit
       Holders;

                                      -17-
<PAGE>

       (xi)  monitor the  activities  of the NPI  Partnership  and keep the Unit
Holders informed of them in the manner provided in this Agreement;

       (xii)  from  time to time  submit  to any  appropriate  state  securities
administrator all documents, papers, statistics and reports required to be filed
with or submitted to such state securities administrator; and

       (xiii)  inform  each  Unit  Holder  of all  administrative  and  judicial
proceedings  for an adjustment  at the Limited  Partnership  or NPI  Partnership
level for  partnership  tax items and forward to each Unit Holder within 30 days
of receipt all notices received from the Internal Revenue Service  regarding the
commencement of a partnership level audit or a final partnership  administrative
adjustment,  and to perform all other  duties  imposed by Sections  6221 through
6232 of the Code on Geodyne  Properties as "tax matters  partner" of the Limited
Partnership,  including  (but not  limited to) the  following:  (a) the power to
conduct  all audits and other  administrative  proceedings  (including  windfall
profit tax audits) with respect to Limited  Partnership tax items; (b) the power
to extend the statute of  limitations  for all Partners  with respect to Limited
Partnership tax items;  and (c) the power to file a petition with an appropriate
federal court for review of a final partnership administrative adjustment.

       Section 4.7.  Compensation      of the General Partner

       A.  Except as provided in  Articles  Four and Five,  the General  Partner
shall  not,  either in its  capacity  as General  Partner  or in its  individual
capacity, receive any salary, fees or profits from the Limited Partnership.

       B. In  consideration  of its payment of Organization  and Offering Costs,
the General Partner shall be paid by the Limited  Partnership an amount equal to
3.5%  of  the  Unit  Holders'  Subscriptions  upon  Activation  of  the  Limited
Partnership.  The General Partner shall be reimbursed by the Limited Partnership
for General and Administrative Costs and Direct Administrative Costs incurred by
it  on  behalf  of  the   Limited   Partnership.   The  amount  of  General  and
Administrative Costs allocable to the accounts of the Unit Holders for which the
General  Partner will be reimbursed by the Limited  Partnership and the Managing
Partner  by the NPI  Partnership  will not (i) in the first 12 months  following
Activation  of the Limited  Partnership,  exceed an amount  equal to 2.5% of the
Unit Holders'  Subscription,  and (ii) in any succeeding 12 month period, exceed
an amount equal to 1% of the Unit Holders' Subscriptions.

       All General and  Administrative  costs  allocable  to the accounts of the
Unit Holders will be paid solely out of cash generated from Limited  Partnership
Income otherwise distributable to the Unit Holders. To the extent that Income is
insufficient to generate cash sufficient to pay such General and  Administrative
Costs in the period

                                      -18-
<PAGE>

in which they are  incurred  or accrued or if the General  Partner,  in its sole
discretion,  elects to defer  payment of such General and  Administrative  Costs
(and not charge  interest  thereon during such deferred  period),  and in either
case the amounts  actually  reimbursed by the Limited  Partnership do not exceed
the forgoing limitations, such unreimbursed General and Administrative Costs may
be carried  forward  and paid out of cash  generated  from  Limited  Partnership
Income otherwise available in the future for distribution to the Unit Holders or
increase the maximum amount of reimbursable General and Administrative Costs for
any other  period.  The  General  Partner  shall be paid any excess of  interest
income  over the  costs  incurred  in  connection  with the  maintenance  of the
reinvestment account referred to in Section 5.1(B)(i).

       Section 4.8.  Contracts with the General Partner and Affiliates

        All services provided to the Limited  Partnership by the General Partner
or any  Affiliate  for which it is  compensated  shall be  embodied in a written
contract   precisely   setting  forth  the  services  to  be  rendered  and  the
compensation to be paid.  Each such contract,  other than this Agreement and the
NPI  Partnership  Agreement,  shall  contain  a  provision  which  shall  permit
termination  of the contract by the Limited  Partnership  without  penalty on 30
days' prior written notice.

       Section 4.9.  Other Operations

        The  General  Partner and its  Affiliates  shall at all times be free to
engage in all aspects of the oil, gas and natural  resources  business for their
own accounts and for the accounts of others.  Without limiting the generality of
the foregoing,  the General  Partner and its Affiliates  shall have the right to
organize and operate  other  partnerships,  joint  ventures or other oil and gas
investment programs similar to the Limited Partnership or the NPI Partnership.

       Section   4.10.   Prosecution,   Defense  and   Settlement  of  Claims;
Indemnification

       A. The General  Partner  shall arrange to  prosecute,  defend,  settle or
compromise actions at law or in equity at the expense of the Limited Partnership
as may  be  necessary  to  enforce  or  protect  the  interests  of the  Limited
Partnership. The General Partner shall satisfy any judgment, decree, decision or
settlement,  first, out of any insurance proceeds available therefor,  next, out
of the Limited Partnership assets and income, and, finally, out of the assets of
the General Partner.

       B. The General  Partner and its  Affiliates  shall have no liability to
the Limited  Partnership  or to any Unit Holders for any loss  suffered by the
Limited  Partnership which arises out of any action or inaction of the General
Partner or its Affiliates if the General Partner and its  Affiliates,  in good
faith,  determined  that such course of conduct was in the best  interests  of
the  Limited  Partnership  and  such  course  of  conduct  did not  constitute
negligence  or  misconduct  of the  General  Partner  or its  Affiliates.  The
General Partner and its

                                      -19-
<PAGE>

Affiliates shall be indemnified by the Limited  Partnership  against any losses,
judgments,  liabilities,  expenses and amounts paid in  settlement of any claims
sustained by it in connection  with the Limited  Partnership,  provided that the
same were not the result of  negligence or misconduct on the part of the General
Partner or its Affiliates.  Any indemnification under this Section 4.10 shall be
satisfied solely out of the assets and Income of the Limited  Partnership and no
Unit Holder or Limited Partner shall have any liability therefor.

       C.  Notwithstanding the above, the General Partner and its Affiliates and
any Person acting as a  broker-dealer  shall not be indemnified  for liabilities
arising  under  federal  and state  securities  laws unless (i) there has been a
successful  adjudication  on the merits of each count  involving  securities law
violations and the court approves such  indemnification and the litigation costs
thereof; or (ii) such claims have been dismissed with prejudice on the merits by
a court of competent  jurisdiction  and the court approves such  indemnification
and the litigation  costs thereof.  In any such case, the General  Partner shall
apprise the court of the current  published  positions,  if any, of the federal,
Massachusetts   State  Securities   Administrator  and  other  applicable  state
securities administrators regarding indemnification of program sponsors prior to
obtaining court approval of any such indemnification.

       D. The Limited Partnership shall not incur the cost of the portion of any
insurance  which  insures any party against any liability as to which such party
is herein prohibited from being indemnified.

       E. For purposes of this Section 4.10, the term  Affiliates  shall include
only those Affiliates, as defined in Article I, performing services on behalf of
the Limited Partnership.

       Section 4.11.  Dealer Manager

        The Dealer Manager shall have no duties, responsibilities or obligations
to the  Limited  Partnership,  the General  Partner or any Limited  Partner as a
consequence of its right to receive  Commissions,  except to the extent provided
under the  Securities  Act of 1933,  as  amended.  The  Dealer  Manager  has not
assumed,  and will not assume,  any  responsibility  with respect to the Limited
Partnership  nor will it be  permitted  by the  General  Partner  to assume  any
duties, responsibilities or obligations regarding the management,  operations or
any of the business affairs of the Limited Partnership subsequent to the date on
which the Limited Partnership is Activated.

                                  ARTICLE FIVE

                       Distributions, Fees and Allocations

       Section 5.1.  Distributions of Limited Partnership Funds

       A.  The  Distributable  Cash  of  the  Limited   Partnership  shall  be
distributed  simultaneously  to  the  Unit  Holders  for  the  account  of the
Depositary (either directly to such Unit Holders or as they shall

                                      -20-
<PAGE>

direct by their  notice to the  General  Partner  pursuant  to the  reinvestment
option set forth in Section 5.lB) and the General Partner  promptly upon receipt
of cash  distributions  from  the NPI  Partnership.  Subject  to  Section  9.2B,
Distributable  Cash shall be distributed 99% to the Depositary (on behalf of the
Unit  Holders  as a class) and 1% to the  General  Partner  except  that (i) any
Distributable  Cash  attributable  to the  receipt  by the  NPI  Partnership  of
investment  income  (as  defined  in the NPI  Partnership  Agreement)  shall  be
distributed  100% to the  Depositary  (on behalf of the Unit Holders as a class)
and, (ii) any  Distributable  Cash which is attributable to a return pursuant to
Section 3.3 shall be distributed entirely to those Persons (other than corporate
affiliates of Geodyne Resources, Inc. or the Dealer Manager or any purchasers of
Depositary  Units therefrom with respect to the distribution of cash contributed
by the Managing  Partner to the NPI  Partnership  pursuant to Section 3.4 of the
NPI Partnership  Agreement or to the Limited  Partnership by the General Partner
pursuant  to  Section  3.4 of  this  Agreement)  who  are,  at the  time  of the
distribution, Unit Holders. Distributions to the Unit Holders shall be allocated
to each Unit Holder pursuant to Section 5.3. All  distributions of Distributable
Cash shall  reduce  dollar-for-dollar  the  balances of the  Partners'  and Unit
Holders' Capital Accounts.

       B.

             (i)  Prior  to  the  first  cash   distribution   by  the   Limited
       Partnership,  each Unit Holder will be given an  opportunity  to elect to
       have all or a portion of such Unit Holder's cash  distributions  (1) paid
       directly  to the  Unit  Holder  in cash,  or (2)  held in a  reinvestment
       account  established  for Unit  Holders of the Limited  Partnership,  any
       Prior  Limited  Partnerships  and  any  Subsequent  Limited  Partnership,
       pending the  reinvestment of such cash  distributions in a minimum amount
       of $100 (with  reinvestment  in excess of such minimum being permitted in
       whole increments of $100) in Depositary  Units of any Subsequent  Limited
       Partnership.  After  receipt  of  the  Prospectus  with  respect  to  any
       Subsequent  Limited  Partnership,  each Unit  Holder may revoke such Unit
       Holder's  prior  election to have such Unit Holder's  cash  distributions
       held in the  reinvestment  account  invested in  Depositary  Units of the
       Subsequent Limited Partnership. Such revocation shall be made by the Unit
       Holder's  delivery  to the  Limited  Partnership  of a written  notice of
       revocation.  On or before  30 days  prior to the  reinvestment  of a Unit
       Holder's cash  distributions  in a Subsequent  Limited  Partnership,  the
       General Partner shall provide each Unit Holder who has previously elected
       to have cash  distributions  from the Limited  Partnership  reinvested in
       Depositary Units of a Subsequent Limited Partnership, and who has $100 or
       more held in the  reinvestment  account on such Unit Holder's  behalf,  a
       form for the Unit Holder to provide the Limited  Partnership such written
       notice of revocation. The cash distributions of a Unit Holder held in the
       reinvestment  account  shall  at all  times be the  property  of the Unit
       Holder,  and the Unit Holder may withdraw such cash distributions held in
       the  reinvestment  account on such Unit Holder's behalf upon thirty days'
       prior written notice to the

                                      -21-
<PAGE>

      Limited  Partnership.  No interest shall be payable to Unit Holders on the
      amount of their  cash  distributions  held in such  reinvestment  account;
      provided,  however,  that the General  Partner shall hold the Unit Holders
      harmless  against any losses  sustained  therein  and the General  Partner
      shall  deposit into the  reinvestment  account an amount equal to any loss
      suffered by a Unit Holder prior to the earlier of the time the Unit Holder
      withdraws the Unit Holder's share or an investment in a Subsequent Limited
      Partnership  is made on behalf of the Unit Holder.  Prior to investment in
      Depositary  Units of a Subsequent  Limited  Partnership or distribution of
      such  funds,  monies held in the  reinvestment  account may be invested in
      investments permitted under Section 10.3 of this Agreement.  Any costs and
      interest  income  attributable  to the  maintenance  of  the  reinvestment
      account  shall be paid or  credited,  as the case may be,  to the  General
      Partner.

            (ii) Cash distributions  held in the reinvestment  account on behalf
      of a Unit Holder will be delivered to such Unit Holder,  and no investment
      in a Subsequent  Limited  Partnership  will be made on such Unit  Holder's
      behalf,  upon (1) a  decision  by the  General  Partner  not to offer,  or
      continue  the  offering  of,  Depositary  Units  of a  Subsequent  Limited
      Partnership,  (2) a  decision  by such  Unit  Holder  not to  invest  in a
      Subsequent  Limited  Partnership,  or (3) such cash distributions have not
      been invested in a Subsequent  Limited  Partnership within 180 days of the
      date such  distributions  were  initially  deposited  in the  reinvestment
      accounts.  Subject to the Limited Partnership's receipt of a Unit Holder's
      written notice of revocation or withdrawal referred to in Section 5.1B(i),
      amounts held in the reinvestment  account on behalf of a Unit Holder which
      are not reinvested in a Subsequent  Limited  Partnership  (either  because
      such  amount is less than  $100 or is in  excess of a whole  increment  of
      $100) shall remain in such reinvestment account.

            (iii)  A Unit  Holder's  cash  distribution  will be  reinvested  in
      Depositary   Units  of  a  Subsequent   Limited   Partnership  only  if  a
      registration  statement  covering  interests  in  the  Subsequent  Limited
      Partnership is in effect under the Securities Act of 1933, the offering of
      Depositary  Units  is  qualified  for  sale  under  the  applicable  state
      securities  laws and the Unit  Holder  meets the  appropriate  suitability
      standards.  The General  Partner may  terminate its offering of Depositary
      Units in a  Subsequent  Limited  Partnership  at any time and will have no
      obligation to continue to offer Depositary Units or to permit reinvestment
      of  Distributable  Cash therein.  In the event the General  Partner or its
      Affiliates offer limited  partnerships  other than the Subsequent  Limited
      Partnerships  and provide Unit Holders the  opportunity  to reinvest  cash
      distributions  from the Limited  Partnership in such  Depositary  Units of
      limited partnerships,  the terms and conditions of such reinvestment shall
      be determined by the General  Partner or its  Affiliates in its discretion
      (which  may  differ  from the  terms and  conditions  of  reinvestment  in
      Depositary Units of Subsequent Limited Partnerships provided herein).

                                      -22-
<PAGE>

       Section  5.2.  Allocation  of  Income,   Gain,  Loss,  Cost,  Deduction
and Credit

       A. Each item of Income,  gain,  loss,  cost,  deduction and credit of the
Limited  Partnership  shall be  determined  and  allocated  with respect to each
Fiscal Year of the Limited Partnership on or before March 15 of each year.

       B.  Direct  Administrative  Costs and General  and  Administrative  Costs
directly  incurred by the Limited  Partnership  shall be allocated to, and borne
by, the  Partners in the same amounts and  proportions  as they would be if such
costs were incurred or borne by only the NPI Partnership.

       C.  Except as set forth in  Sections  5.2B,  5.2F and 5.2G,  each item of
Income,  gain, loss, cost, deduction and credit of the Limited Partnership shall
be  allocated  between the Partners  and  credited to or charged  against  their
Capital Accounts in the following ratio:

       Depositary (on behalf of
       the Unit Holders as a class)         99%
       Geodyne Properties                    1%

       D.  Notwithstanding  anything to the  contrary  that may be  expressed or
implied in this Agreement,  the interest of the General Partner in each material
item of Partnership Income, gain, loss, deduction or credit shall be equal to at
least one  percent of each such item at all times  during the  existence  of the
Partnership. In determining the General Partner's interest in such items for the
purpose of this Section 5.2D,  Depositary Units or units of limited  partnership
interest owned by the General Partner shall not be taken into account.

       E.  Notwithstanding any other provision of this Agreement,  if, under any
provision of this  Agreement,  the Capital Account of any Partner or Unit Holder
is  adjusted  to  reflect  the  difference  between  the  basis  to the  Limited
Partnership  of  Limited  Partnership  Property  and  such  Limited  Partnership
Property's  fair  market  value,  then all  items of  Income,  gain,  loss,  and
deduction with respect to such Limited  Partnership  Property shall be allocated
among the  Partners  and Unit  Holders so as to take  account  of the  variation
between the basis of such Limited Partnership Property and its fair market value
at  the  time  of  the   adjustment  to  such  Partner's   Capital   Account  in
accordancewith the requirements of subsection 704(c) of the Code, or in the same
manner as provided under subsection 704(c) of the Code.

                                      -23-
<PAGE>

       F. Notwithstanding anything to the contrary stated herein,

             (i) There shall be  allocated  to the  General  Partner any item of
       loss,  deduction,  credit or allowance  that,  but for this Section 5.2F,
       would have been allocated to a Unit Holder thereby  causing or increasing
       a deficit balance in such Unit Holder's  Capital Account as of the end of
       the Limited  Partnership's  taxable year to which such allocation related
       (after taking into consideration the provisions of Section 5.3D(v));

             (ii) Any Unit  Holder  who  unexpectedly  receives  an  adjustment,
       allocation or  distribution  specified in Section 5.3D(v) hereof shall be
       allocated items of Income and gain in an amount and manner  sufficient to
       eliminate such deficit balance as quickly as possible; and

             (iii) In the event any  allocations of loss,  deduction,  credit or
       allowance are made to the General Partner  pursuant to clause (i) of this
       Section 5.2F,  the General  Partner shall be  subsequently  allocated all
       items of Income and gain until the aggregate  amount of such  allocations
       of  Income  and  gain  is  equal  to the  aggregate  amount  of any  such
       allocations  of loss,  deduction,  credit or  allowance  allocated to the
       General Partner pursuant to clause (i) of this Section 5.2F.

       G. Commissions and  Organizational  and Offering Costs shall be allocated
1% to the  General  Partner  and 99% to the  Depositary  (on  behalf of the Unit
Holders as a class), and will be allocated and charged among the Unit Holders as
follows:  (i)  to the  extent  necessary,  to  each  Unit  Holder  in an  amount
sufficient to cause all of the Unit Holders'  Capital Account  balances to be in
the  ratio of the  Depositary  Units  owned by the  Unit  Holders,  and (ii) any
remaining amount pursuant to Section 5.3.

       Section 5.3.  Determinations  of Allocations  and  Distributions  Among
Unit Holders

       A. Except as set forth in Section 5.lA, each item of Income,  gain, loss,
cost,  deduction or credit allocated to the Unit Holders,  as a class,  shall be
allocated  to each Unit  Holder in the ratio that (i) the  number of  Depositary
Units  held of  record by each  Unit  Holder  as of the first day of each  month
during  the  period  ("Record  Date")  bears to (ii)  the  aggregate  number  of
Depositary Units outstanding on each such monthly Record Date.  Distributions of
Distributable Cash for a calendar quarter will be made to Unit Holders of record
on the first day of such  calendar  quarter in the ratio which (i) the number of
Depositary  Units  owned of record by each Unit Holder on such record date bears
to (ii) the aggregate  number of  Depositary  Units  outstanding  on such record
date.  Unless otherwise  designated by the General Partner,  the record date for
distributions of Distributable Cash will be the last day of the calendar quarter
to which such  distributions are  attributable.  Each distribution in respect of
Depositary  Units shall be paid by the Limited  Partnership  only to the Persons
who are record  holders of Depositary  Units as of the first day of the calendar
quarter for which such distribution is being made. Such payment shall constitute
full payment and satisfaction of the Limited Partnership's  liability in respect
of such payment  regardless  of any claim of any Person who may have an interest
in such payment by reason of an assignment or otherwise.

                                      -24-
<PAGE>

       B. The  Limited  Partnership's  share of the NPI  Partnership's  adjusted
basis in each of its Net Profits Interests and Royalties  (allocated pursuant to
the  Managing  Partner's  and  the  Limited   Partnership's   interests  in  NPI
Partnership  capital  at the date of  acquisition  of the  respective  Producing
Properties)  shall be allocated  pursuant to Section  613A(c)(7)(D)  of the Code
among the Unit Holders and Partners in proportion to the interest of each in the
Limited Partnership capital ultimately used to acquire that property.

       C. All items of Income,  gain, loss, expense deduction and credit and all
recapture  of such  deductions  and credits  shall be  allocated  and charged or
credited to the Partners and Unit Holders in the same manner that the  revenues,
costs or expenses giving rise to such items of Income, gain, loss, deduction and
credit are  allocated and charged.  Federal  income tax  deductions  for cost or
percentage  depletion with respect to any Net Profits  Interest or Royalty shall
be determined at the Partner or Unit Holder level and shall be determined in the
case of percentage  depletion on the same basis that Income from the Net Profits
Interest or Royalty is allocated.

       D. Capital  Accounts shall be established and maintained for each Partner
and Unit Holder in  accordance  with tax  accounting  principles  and with valid
regulations  issued by the U.S.  Treasury  Department under subsection 704(b) of
the Code (the "704 Regulations").  To the extent that tax accounting  principles
and the 704  Regulations may conflict,  the latter shall control.  In connection
with the establishment  and maintenance of such Capital Accounts,  the following
provisions shall apply:

             (i) Each  Partner's or Unit Holder's  Capital  Account shall be (a)
       increased  by the  amount  of cash  contributed  by or on  behalf of such
       Partner or Unit Holder, the fair market value of property  contributed by
       it or on its  behalf  to the  Limited  Partnership  (net  of  liabilities
       securing  such  contributed  property  that the  Limited  Partnership  is
       considered  to assume or take  subject to under  section 752 of the Code)
       and  allocations  to it of Income and gain  (except  to the  extent  such
       Income or gain has previously  been  reflected in its Capital  Account by
       adjustments  thereto) and (b)  decreased  by the amount of  Distributable
       Cash distributed to it, the fair market value of property  distributed to
       it  by  the  Limited  Partnership  (net  of  liabilities   securing  such
       distributed  property  that such Partner or Unit Holder is  considered to
       assume or take subject to under section 752 of the Code) and  allocations
       to it of Limited  Partnership loss,  deduction (except to the extent such
       loss or deduction has previously been reflected in its Capital Account by
       adjustments  thereto) and expenditures  described in Section 705(a)(2)(B)
       of the Code.

                                      -25-
<PAGE>

            (ii) In the event Limited  Partnership  Property is distributed to a
      Partner or Unit Holder,  then,  before the Capital Account of such Partner
      or Unit Holder is adjusted as required by clause (i) of this Section 5.3D,
      the Capital Accounts of the Partners and Unit Holders shall be adjusted to
      reflect  the  manner  in  which  the  unrealized  Income,  gain,  loss and
      deduction inherent in such Limited Partnership Property (that has not been
      reflected in such Capital  Accounts  previously)  would be allocated among
      the Partners and Unit Holders if there were a taxable  disposition of such
      Limited  Partnership  Property  for its fair  market  value on the date of
      distribution.

            (iii) If, pursuant to this Agreement,  Limited Partnership  Property
      is reflected on the books of the Limited  Partnership at a book value that
      differs from the adjusted tax basis of such Limited Partnership  Property,
      then the Partners' and Unit Holders' Capital Accounts shall be adjusted in
      accordance  with the 704  Regulations  for allocations to the Partners and
      Unit Holders of depreciation,  depletion,  amortization, and gain or loss,
      as computed for book  purposes,  with respect to such Limited  Partnership
      Property.

            (iv) The  Partners'  and Unit  Holders'  Capital  Accounts  shall be
      reduced by a  simulated  depletion  allowance  computed on each oil or gas
      property  using  either  the  cost  depletion  method  or  the  percentage
      depletion  method (without regard to the limitations  under the Code which
      could apply to less than all Partners or Unit Holders); provided, however,
      that the choice  between  the cost  depletion  method  and the  percentage
      depletion   method   shall   be  made  by  the   General   Partner   on  a
      property-by-property  basis  and  such  choice  shall be  binding  for all
      Limited Partnership taxable years during which such oil or gas property is
      held by the Limited  Partnership.  Such reductions for depletion shall not
      exceed the  aggregate  adjusted  basis  allocated to the Partners and Unit
      Holders  with respect to such oil or gas  property.  Such  reductions  for
      depletion shall be allocated among the Partners' and Unit Holders' Capital
      Accounts in the same  proportions  as the adjusted basis in the particular
      property is allocated  to each  Partner or Unit  Holder.  Upon the taxable
      disposition  of an oil or gas  property  by the Limited  Partnership,  the
      Limited  Partnership's  simulated  gain or loss  shall  be  determined  by
      subtracting its simulated adjusted basis (aggregate  adjusted tax basis of
      the Partners and Unit Holders less simulated depletion allowances) in such
      property from the amount  realized on such  disposition  and the Partners'
      and Unit Holders  Capital  Accounts shall be increased or reduced,  as the
      case  may  be,  by the  amount  of the  simulated  gain  or  loss  on such
      disposition  in proportion  to the  Partners' and Unit Holders'  allocable
      shares of the total amount realized on such disposition.

             (v) For purposes of determining  the Capital Account balance of any
       Partner or Unit Holder as of the end of any Limited  Partnership  taxable
       year for  purposes  of Section  5.2G,  such  Partner's  or Unit  Holder's
       Capital Account shall be reduced by:

                                      -26-
<PAGE>

                   (a) Adjustments that, as of the end of such year,  reasonably
             are expected to be made to such Partner's or Unit Holder's  Capital
             Account pursuant to paragraph  (b)(2)(iv)(k) of the 704 Regulations
             for depletion  allowances with respect to oil and gas properties of
             the Limited Partnership, and

                   (b)  Allocations of loss and deduction that, as of the end of
             such year,  reasonably  are  expected to be made to such Partner or
             Unit  Holder  pursuant  to Code  section  704(e)(2),  Code  section
             706(d), and paragraph  (b)(2)(ii) of section 1.751-1 of regulations
             promulgated under the Code, and

                   (c)  Distributions   that,  as  of  the  end  of  such  year,
             reasonably  are  expected to be made to such  Partner to the extent
             they exceed offsetting increases to such Partner's or Unit Holder's
             Capital  Account that  reasonably  are expected to occur during (or
             prior  to) the  Limited  Partnership  taxable  years in which  such
             distributions reasonably are expected to be made.

       E. The Capital  Accounts of those  Partners  and Unit  Holders  which are
charged with an expense shall be credited with any portion of that expense which
is finally determined,  judicially or administratively,  to be nondeductible for
federal  income tax purposes,  less any  amortization  or  depreciation  thereof
incurred prior to the date that the credit is made.

                                   ARTICLE SIX

                   Withdrawal or Removal of General Partner

       Section 6.1.  Withdrawal of General Partner

        The General  Partner  (including  by definition  any  successor  General
Partner) shall have the right to retire or withdraw,  upon 120 days Notification
to the Unit  Holders,  subject to its  obligation  to pay all costs and expenses
incurred by the Limited Partnership by virtue of such retirement or withdrawal.

       Section 6.2.  Assignment of General Partner Interest

        Subject  to  Section  12.3 and  Section  6.5B,  upon the  Consent of the
Depositary, which shall be given if the Consent of Unit Holders owning more than
50% of the  outstanding  Depositary  Units is obtained,  the General Partner may
assign or transfer its General  Partner  Interest to a person who shall become a
successor  General  Partner;  provided,  however,  that no such Consent shall be
required in connection  with an  assignment or transfer  pursuant to the merger,
consolidation  or  transfer  of all or  substantially  all of the  assets of the
General Partner.

                                      -27-
<PAGE>

       Section 6.3.  Removal of General Partner

       A. Subject to Section  12.3,  upon the Consent of the  Depositary,  which
shall  be given if the  Consent  of Unit  Holders  owning  more  than 50% of the
outstanding  Depositary  Units is  obtained,  the  power  shall be vested in the
Depositary to (a) remove the General Partner and (b) cause the General  Partner,
on behalf of the Limited Partnership, to Remove the Managing Partner.

       B. (i) If the Unit  Holders  elect  to  Remove  the  General  Partner  as
       permitted under this Section,  and further elect to continue the business
       of the Limited  Partnership with one or more successor  General Partners,
       the  removed  General  Partner  shall not be  Removed  until a  successor
       General Partner has been selected by the Unit Holders and admitted to the
       Limited Partnership pursuant to Section 11.2.

             (ii)  Notwithstanding  Section 3.6B, any General  Partner who shall
       withdraw or be Removed from the Limited  Partnership shall be released by
       any successor General Partner from all liability for Limited  Partnership
       debts and obligations  incurred by the Limited  Partnership  prior to the
       time of such Removal.

       6.4 Option to Purchase Interest from Former General Partner

        In the event the General Partner withdraws or is Removed and a successor
General Partner selected, the incoming General Partner and the departing General
Partner shall, by mutual agreement,  select an independent  petroleum consultant
to value the departing General Partner's Interest in the Limited Partnership. If
no  agreement  can be reached on the  selection of a qualified  consultant,  the
departing  General  Partner and incoming  General  Partner  shall each select an
independent petroleum consultant,  who together shall select a third consultant,
and the three consultants  shall together  determine a value of the interests of
the departing  General Partner.  The incoming  General  Partner,  or the Limited
Partnership,  shall have the option to purchase at least 20% of the interests of
the  departing  General  Partner  for the value  determined  by the  independent
appraisal.  The departing General Partner's Interest in the Limited  Partnership
shall be transferred to the successor General Partner, and the successor General
Partner  shall  assign to the  departing  General  Partner a portion  of Limited
Partnership  Income,  costs and  Distributable  Cash as and when such  items are
allocated or distributed,  as the case may be, by the Limited  Partnership equal
to the  percentage  interest  of the  departing  General  Partner in the Limited
Partnership  prior to  Removal,  less the  portion  purchased  by the  successor
General Partner or the Limited Partnership.

       6.5 Power to Admit Successor General Partner

       A. If the General Partner has withdrawn or been Removed,  the power shall
be vested in the Unit Holders to Consent to the admission of a successor General
Partner  meeting  the  requirements  of  Section  6.5B to take the  place of the
departing  General  Partner upon the Consent of the  Depositary,  which shall be
given if the Consent of Unit  Holders  owning  more than 50% of the  outstanding
Depositary Units is obtained.

                                      -28-
<PAGE>

       B. If there is admitted to the Limited  Partnership  a successor  General
Partner,  such  admission  shall not become  effective  unless  (a) the  Limited
Partnership shall have received a certificate,  duly executed by or on behalf of
such  proposed  successor  General  Partner,  to  the  effect  that:  (i)  it is
experienced in performing (or employs  sufficient  personnel who are experienced
in  performing)  functions  of the type then being  performed  by the  departing
General Partner and (ii) it has a net worth  sufficient to satisfy the net worth
requirements of the Code, Treasury Regulations,  the Internal Revenue Service or
the courts applicable to a general partner in a limited  partnership in order to
ensure that the Limited  Partnership  will not fail to be classified for federal
income tax purposes as a  partnership,  and (iii) such Person,  if other than an
individual,  has the authority to become a successor  General  Partner under the
terms of this Agreement;  and (b) the proposed  successor  General Partner shall
have (i) become a party to, and adopted all of the terms and conditions of, this
Agreement and (ii) paid all reasonable legal fees of the Limited Partnership and
filing  and  publication  costs in  connection  with such  Person's  becoming  a
successor General Partner.

       Section 6.6.  Incapacity of the General Partner

       A. In the event of the  Incapacity  of the General  Partner,  the Limited
Partnership  shall  be  dissolved.   However,  within  90  days  thereafter  the
Depositary,  upon  the  Consent  of Unit  Holders  owning  more  than 50% of the
outstanding  Depositary Units, may elect to reconstitute the Limited Partnership
prior to application of the liquidation provisions of Section 9.2.

       B. Upon the  Incapacity  of the  General  Partner,  the Person who is its
legal  representative  shall  have all the rights of a General  Partner  for the
purpose of settling or managing  its estate and such power as the  Incapacitated
General Partner  possessed to assign all or any part of its Interest and to join
with such assignee in satisfying  conditions precedent to such assignee becoming
a Substituted Partner.

       Section  6.7.   Termination  of  Contracts  with  General   Partner  or
Managing Partner

        Subject to and upon fulfilling the conditions of Section 12.3, the power
shall be vested in the Unit Holders to terminate  any or all  contracts  between
the General  Partner or any Affiliate and the Limited  Partnership,  or to cause
the General  Partner,  on behalf of the Limited  Partnership,  to terminate  any
contracts between the Managing Partner or any Affiliate and the NPI Partnership,
and select, or cause the General Partner, on behalf of the Limited  Partnership,
to select, as the case may be, a replacement Person therefor upon the Consent of
the Depositary,  which shall be given if the Consent of Unit Holders owning more
than 50% of the outstanding Depositary Units is obtained.

                                      -29-
<PAGE>

                                  ARTICLE SEVEN
       Assignment of Limited Partner Interests to Unit Holders

       Section 7.1      Assignments of the Interests of the Depositary.

       A. Pursuant to Sections 7.lB and 13.1, the Depositary shall issue to each
Person purchasing one or more Depositary Units a Depositary  Receipt  evidencing
such Depositary Units. The Limited Partnership shall recognize as a Unit Holder,
for the  number  of  Depositary  Units for which  the  Limited  Partnership  has
received  proceeds,  each  Person  to whom the  Depositary  issues a  Depositary
Receipt as of the date  provided  in Section  13.1 or  otherwise  as the General
Partner shall determine in accordance with the provisions of this Agreement.

       B.  The  Depositary,  by the  execution  of this  Agreement,  irrevocably
assigns to the Unit Holders all of the  Depositary's  rights and interest in and
to the  Interests,  except  as  otherwise  provided  herein,  as of the  date of
Activation of the Limited  Partnership.  The rights and interest so  transferred
and assigned shall include, without limitation, the following:

             (i) all  rights to  receive  distributions  of  uninvested  Capital
       Contributions pursuant to Section 3.3 and the right to receive rebates of
       Commissions and Organization and Offering Costs pursuant to Section 3.3;

             (ii)  all rights to receive  distributions of Distributable  Cash
       pursuant to Section 5.1;

           (iii) all rights in respect of  allocations  of  Profits,  Losses and
       each other item of Income,  gain, loss,  deduction and credit pursuant to
       Sections 5.2 and 5.3;

             (iv) all  rights in respect of  allocations  to Capital  Accounts
       pursuant to Section 5.3;

             (v)   all rights to receive any  proceeds of  liquidation  of the
       Limited Partnership pursuant to Section 9.2;

             (vi) all  rights to  inspect  books and  records  and to  receive
       reports pursuant to Article Ten;

             (vii) the right to bring derivative actions pursuant to the Act (in
       the event any such action  must be brought in the name of the  Depositary
       as a Limited Partner,  the Depositary agrees to bring such action, at the
       expense of the Unit Holder(s) requesting such action); and

           (viii) all rights which  limited  partners  have,  or may have in the
       future,  under this  Agreement or the Act,  except as otherwise  provided
       herein.

                                      -30-
<PAGE>

       C. The General Partner,  by the execution of this Agreement,  irrevocably
consents  to and  acknowledges  that (i) the  foregoing  assignment  pursuant to
Section 7.1B by the  Depositary to the Unit Holders of the  Depositary's  rights
and  interest  in the  Interests  is  effective  and (ii) the Unit  Holders  are
intended to be  third-party  beneficiaries  of all rights and  privileges of the
Depositary in respect of the Interests. The General Partner covenants and agrees
that,  in  accordance  with  the  foregoing  transfer  and  assignment,  all the
Depositary's  rights and  privileges in respect of Interests may be exercised by
the Unit Holders, including, without limitation, those listed in Section 7.lB.

       D. The Depositary, by execution of this Agreement, irrevocably commits to
exercise its voting rights as the Limited  Partner in accordance with directions
it receives from the Unit Holders such that it will vote a  proportionate  share
of its  Interest  as the owner,  as shown on the books of the  Depositary,  of a
corresponding Depositary Unit shall direct in writing, by proxy or otherwise.

       E. The  Depositary may transfer its Interest as the Depositary to another
Person only with the Consent of the General  Partner and Unit  Holders  owning a
majority of the outstanding Depositary Units.

       F. All  Persons  becoming  Unit  Holders  will by their  payment  for and
acceptance of Depositary Receipts agree to comply with and be bound by the terms
and  conditions of and will be entitled to all rights of Unit Holders under this
Agreement.

       G. Other than pursuant to Sections  7.1B,  7.1E and 7.2, the Depositary
shall  not  transfer,  assign,  encumber,  pledge  or  hypothecate  any of its
Interest.

       Section 7.2  Rights of Unit     Holders

       A. In accordance  with the transfer and  assignment  described in Section
7.1B, it is the intention of the parties hereto that Unit Holders shall have the
same rights and obligations  that Limited Partners have under this Agreement and
under the Act. The fiduciary  duties and  obligations of the General  Partner to
the Limited  Partner under the Act and this  Agreement  shall extend to the Unit
Holders.

       B. Without  limiting the  generality of Section 7.2A,  persons who become
Limited Partners pursuant to Section 7.3 below and Unit Holders shall share pari
passu on the basis of one Limited Partner  Interest for one Depositary Unit, and
shall be  considered  as a single  class,  with respect to all rights to receive
distributions and allocations pursuant to this Agreement.

       C. Limited  Partners  (other than the  Depositary) and Unit Holders shall
vote on all  matters in respect of which they are  entitled  to vote  (either in
person, by proxy, or by written  consent),  as a single class, with each Limited
Partner  Interest  and each  Depositary  Unit  entitled  to one vote;  provided,
however, that the Depositary shall vote on behalf of and only as directed by the
Unit Holders.

                                      -31-
<PAGE>

       Section  7.3.   Conversion  of  Depositary  Units  into  Limited  Partner
Interests.  Subject to the consent of the General Partner,  which consent may be
granted or withheld in its absolute  discretion,  any Unit Holder who desires to
convert his Depositary  Units into an equal number of Limited Partner  Interests
may do so following  Activation of the Limited  Partnership by delivering to the
Depositary  all (but no less  than  all) of his  Depositary  Receipts  (properly
endorsed),  an executed  subscription  agreement and transfer application (which
are available  upon request from the General  Partner),  accompanied  by written
instructions  which  set forth an  intention  to  become a  Substituted  Limited
Partner and request admission as such to the Limited Partnership,  together with
such other instruments or documents as the General Partner or the Depositary may
deem  necessary or desirable,  including the written  acceptance and adoption by
such  Unit  Holder  of the  provisions  of this  Agreement  and  the  execution,
acknowledgment  and  delivery  to the  General  Partner  of a  special  power of
attorney,  the form and  content  of which are  reasonably  satisfactory  to the
General Partner.  Such Depositary  Receipts shall be accompanied by a payment to
the Limited  Partnership  by such Unit Holder of a fee (not to exceed  $100) for
legal and  administrative  costs  and  recording  fees.  Unit  Holders  becoming
Substituted  Limited  Partners  will  be  admitted  to the  Limited  Partnership
quarterly,  or as  promptly  as  possible  after  the  commencement  of the next
calendar  quarter.  Persons who effect such  conversion will receive one Limited
Partner  Interest for each  Depositary Unit they convert and will not be able to
re-exchange  their Limited Partner  Interests for Depositary  Units. The Capital
Account of the  Depositary  shall be reduced by an amount  equal to the  Capital
Account of such  former  Unit  Holder and such  amount  will be  credited as the
former Unit  Holder's  new Capital  Account as a  Substituted  Limited  Partner.
Depositary  Units which have been converted into Limited Partner  Interests will
be cancelled and will not be reissued.  Except as specifically  stated or as the
context  otherwise  requires,  references in all but Articles Seven and Eight of
this Agreement to Unit Holders shall include Substituted Limited Partners and to
Depositary Units shall include Limited Partner Interests of Substituted  Limited
Partners.

                                  ARTICLE EIGHT

                 Transferability of Limited Partner Interests
                              and Depositary Units

       Section  8.1.  Assignments  of  Limited  Partner  Interests  by Limited
Partners Other than the Depositary.

       A.  Subject to the  provisions  of Section  8.6, no  Substituted  Limited
Partner may assign,  sell or transfer his Limited Partner  Interests without the
approval  of the General  Partner.  In  exercising  its  obligations  under this
Section 8.1A,  the General  Partner shall use its best effort to ensure that the
terms of transfer  are not in  contravention  of any of the  provisions  of this
Agreement and shall not approve any transfer:

                                      -32-
<PAGE>

             (i)   to a Person who makes a market in the  Depositary  Units or
       Limited Partner Interests;

             (ii)  which  is  effected  through  a  matching  agent  unless  the
       procedures  of such  matching  agent  with  respect  to the  transfer  of
       Depositary  Units or Limited Partner  Interests have been approved by the
       General  Partner  as not  being  incident  to a  public  trading  of such
       securities within the meaning of Code Sections 7704, 469(k) or 512(c);

             (iii) if such sale,  assignment,  transfer or exchange  would be in
       violation of any applicable  federal or state  securities laws (including
       any  applicable  suitability  standard  and, with respect to transfers by
       residents of California,  the  restrictions on transfer set forth in Rule
       260.l41.11 of Title 10 of the  California  Administrative  Code) or would
       cause  the  Limited  Partnership  to be taxed as an entity  other  than a
       partnership under the Code;

             (iv)  except for  transfers  by gift or  inheritance,  intra-family
       transfers,  transfers  resulting from family  dissolutions,  transfers to
       Affiliates or transfers of such transferor's  entire remaining holding of
       Limited  Partner  Interests,  if the  transferor  would hold less than 10
       Limited Partner Interests.

       B. Any attempted sale, assignment,  transfer or exchange in contravention
of the provisions of this Section 8.1 shall, unless otherwise  determined by the
General Partner in its sole discretion, be void and deemed ineffectual and shall
not bind or be recognized by the Limited Partnership.

       C. The Limited  Partnership  need not recognize for any purpose any sale,
assignment or transfer of the Limited Partner Interests of a Substituted Limited
Partner  unless  there  shall have been filed with the Limited  Partnership  and
recorded on the Limited  Partnership's  books a duly  executed and  acknowledged
instrument of assignment,  and such instrument  evidences the written acceptance
by the assignee of all of the terms and provisions of this Agreement, represents
that  such  assignment  was  made in  accordance  with all  applicable  laws and
regulations  and in all other respects is  satisfactory in form and substance to
the General Partner.

       D. The  Partnership  shall not  recognize  for any purpose any  purported
sale,  assignment  or  transfer  of all or part  of the  Interest  of a  Limited
Partner, and such purported sale,  assignment or transfer shall be null and void
if, in the opinion of counsel:

                                      -33-
<PAGE>

             (i) such sale,  transfer,  assignment  or transfer  would cause the
       Limited  Partnership  to  be  treated  as  an  association  taxable  as a
       corporation  for federal  income tax purposes or, when added to the total
       of all other sales or  exchanges  or  Interests  within the  preceding 12
       months,  would result in the Limited Partnership being considered to have
       terminated within the meaning of Section 708 of the Code; and the General
       Partner is expressly  authorized to enforce this  provision by suspending
       transfers  if and when any such  transfer  would  result in  transfers of
       Interests in the Limited Partnership which represent in the aggregate 40%
       or more of all Interests;

             (ii) such sale,  transfer  or  assignment  would  violate any state
       securities  or "blue  sky" laws  (including  any  applicable  suitability
       standards)  applicable to the Limited  Partnership  or the Interest to be
       transferred  or assigned,  except in the case of transfers upon the death
       of the Limited  Partner (by bequest or  inheritance)  or by  operation of
       law; or

             (iii) such sale,  transfer  or  assignment  might cause the Limited
       Partnership to be classified as a publicly traded  partnership within the
       meaning of Code Sections 7702 469(k) or 512(c).

       E. Unless otherwise provided by the General Partner, any sale, assignment
or transfer of a Substituted  Limited Partner's  Interest shall be recognized by
the Limited  Partnership as of the first business day of the month following the
approval of such  assignment  or transfer  by the  General  Partner,  or as soon
thereafter  as  practicable.  The  General  Partner  shall  not  approve  sales,
assignments or transfers  more  frequently  than quarterly  unless it receives a
written opinion of counsel that more frequent approvals shall not jeopardize the
Limited  Partnership's  federal income tax status as a partnership.  The Limited
Partnership  and the General  Partner shall be entitled to treat the assignor of
such Limited  Partner  Interests as the absolute  owner thereof in all respects,
and shall incur no liability for any allocation of Profit or Loss, distribution,
or  transmittal  of reports or notice  required to be given to Limited  Partners
hereunder  which is made in good faith to such  assignor  until such time as the
written  instrument of assignment  has been received by the Limited  Partnership
and recorded on its books.

       F. The General Partner may reasonably interpret, and is hereby authorized
to take such action as it deems necessary or desirable to effect,  the foregoing
provisions  of this  Section 8.1.  The General  Partner  may, in its  reasonable
discretion,  and without the  approval of the Limited  Partner or Unit  Holders,
amend the  provisions  of this  Agreement  in such manner as may be necessary or
desirable  to (i)  preserve  the tax  status  of the  Limited  Partnership  as a
partnership  or (ii) avoid a  classification  of the  Limited  Partnership  as a
publicly traded  partnership within the meaning of Code Sections 7704, 469(k) or
512(c). The General Partner may, in its reasonable  discretion,  and without the
approval of the Limited Partners or Unit Holders, also

                                      -34-
<PAGE>

amend the  provisions  of this  Agreement to include  provisions  governing  the
transferability of Interests in the Limited Partnership which may be approved in
future  legislation,  Treasury  Regulations,  administrative  rulings  and other
pronouncements or judicial decisions.

       G. No  purported  sale,  assignment  or  transfer by a  transferor  of an
Interest shall be recognized  unless (i) the transferor  shall have  represented
that such transfer (x) was effected  through a  broker-dealer  or matching agent
whose procedures with respect to the transfer of Interests have been approved by
the General  Partner as not being  incident to a public  trading  market and not
through any other  broker-dealer  or  matching  agent or (y)  otherwise  was not
effected  through a  broker-dealer  or  matching  agent  which makes a market in
Interests or which provides a readily available, regular and ongoing opportunity
to holders of Interests  to sell or exchange  their  Interests  through a public
means of obtaining or providing  information  of offers to buy, sell or exchange
Interests and (ii) the General Partner determines that such sale,  assignment or
transfer  would not, by itself or together  with any other  sales,  transfers or
assignments,  likely result in the Limited  Partnership's  being classified as a
publicly-traded partnership.

       Section 8.2.  Substituted Limited Partners.

       A. The  consent  of the  General  Partner  shall be  required  before the
assignee  of any Limited  Partner  Interest  shall be admitted as a  Substituted
Limited  Partner,  which  consent  may be  withheld  in the  sole  and  absolute
discretion of the General Partner.

       B. No  person  shall  have the right to  become a  Substituted  Limited
Partner in place of his assignor  unless all of the following  conditions  are
first satisfied:

             (i)  a  duly  executed  and  acknowledged   written  instrument  of
       assignment  complying  with  Section  8.1 shall  have been filed with the
       Limited  Partnership and recorded on its books,  which  instrument  shall
       specify the Limited  Partner  Interests  being assigned and set forth the
       intention of the assignor  that the  assignee  succeed to the  assignor's
       interest as a Substituted Limited Partner in his place;

             (ii) the  transferor  and his  assignee  shall  have  executed  and
       acknowledged  such other  instruments  as the  General  Partner  may deem
       necessary or desirable to effect such substitution, including the written
       acceptance  and  adoption  by the  assignee  of the  provisions  of  this
       Agreement, as the same may be amended, and his execution,  acknowledgment
       and delivery to the General  Partner of a special power of attorney,  the
       form and  content of which are  reasonably  satisfactory  to the  General
       Partner; and

             (iii) a transfer fee  sufficient to cover all  reasonable  expenses
       connected with such substitution (not to exceed $50) shall have been paid
       to the Limited Partnership.

                                      -35-
<PAGE>

       C. By  executing or adopting  this  Agreement,  each Limited  Partner and
Substituted Limited Partner and, by the purchase of a Depositary Unit, each Unit
Holder hereby consents to the admission of Substituted  Limited  Partners by the
General Partner in accordance with the foregoing.

       D. The  General  Partner  shall amend this  Agreement  at least once each
quarter if necessary to effect the substitution of Substituted Limited Partners.

       Section 8.3  Transferability of Depositary Units.

       A.  Depositary  Units  may  be  transferred  only  as  provided  in  this
Agreement.  The Depositary Units shall be evidenced by Depositary Receipts which
shall be issued in registered form only and shall be transferable subject to the
same  restrictions  and  conditions  applicable to transfers of Limited  Partner
Interests  set forth in Section 8.1 above.  The  Depositary  shall not recognize
transfers  of  Depositary  Units  except by a transfer  of  Depositary  Receipts
therefor.  Unit Holders who are residents of the State of  California  must meet
the  restrictions  on transfers set forth in Rule  260.14l.11 of Title 10 of the
California  Administrative  Code. Except as provided in Section 8.4, no transfer
of  Depositary  Receipts  will  be  recorded  or  otherwise  recognized  by  the
Depositary or Limited  Partnership for any purpose  whatsoever  unless and until
the transferee has certified to the Depositary  that he is an Eligible  Investor
and,  unless  the  transfer  is among  members  of the  immediate  family of the
transferor Unit Holder,  paid a transfer fee to reimburse the Depositary for all
actual,  reasonable and necessary  expenses (not to exceed $50 per  transaction)
incurred in connection with the transfer.

       B. A transferee who has accepted  delivery of a Depositary  Receipt shall
be  deemed to have  agreed  to comply  with and be bound by all of the terms and
conditions of this Agreement.

       Section 8.4 Eligible Investors.  If the General Partner determines that a
Unit Holder or Substituted  Limited Partner is not an Eligible Investor (i) then
the Unit  Holder  shall  immediately  be  divested  of his  rights to Consent on
matters submitted to Unit Holders and Substituted  Limited Partners (and no such
Depositary  Units shall be  Consented  by the  Depositary  or  otherwise  deemed
outstanding for purposes of Consents of Unit Holders under this Agreement),  and
(ii) if such Person is subject to a higher rate of windfall profits tax than the
rate imposed  upon other Unit  Holders and  Substituted  Limited  Partners,  the
General Partner shall adjust actual cash distributions payable to such Person in
order to reflect  accurately  any varying rate of windfall  profits tax imposed.
Any amounts so  withheld  shall be deemed to have been  distributed  and the tax
shall be treated as paid by the Person.

       Section  8.5  Death,  Incompetency  or  Dissolution  of  a  Substituted
Limited Partner or Unit Holder.

                                      -36-
<PAGE>

        If a  Substituted  Limited  Partner or Unit Holder who is an  individual
dies or a court of  competent  jurisdiction  adjudges him to be  incompetent  to
manage his person or his property,  such Substituted Limited Partner's executor,
administrator,  guardian, conservator or other legal representative may exercise
all of such  Substituted  Limited  Partner's  or Unit  Holder's  rights  for the
purpose of settling his estate or  administering  his  property,  including  any
power  under this  Agreement  of an  assignee  to become a  Substituted  Limited
Partner or Unit Holder.  If a  Substituted  Limited  Partner or Unit Holder is a
corporation, trust or other entity and is dissolved or terminated, the powers of
such  Substituted  Limited  Partner or Unit Holder may be exercised by its legal
representative or successor.

                                  ARTICLE NINE
                   Dissolution, Liquidation and Termination
                           of the Limited Partnership

       Section 9.1.  Events Causing Dissolution

       A. The Limited  Partnership  shall be dissolved  upon the  happening of
any of the following events:

             (i) the expiration of its term, without any continuation  thereof
       as set forth in Section 2.3;

             (ii) the  Incapacity  of the  General  Partner.  However,  within
       ninety days thereafter the Unit Holders may elect to  reconstitute  the
       Limited Partnership prior to application of the liquidation  provisions
       of Section 9.2;

             (iii)  the  Sale  or  other  disposition  at  one  time  of  all or
       substantially  all of the assets of the Limited  Partnership  existing at
       the time of such Sale (including the liquidation or redemption other than
       in kind of its interest in the NPI Partnership);

             (iv) the  election to dissolve the Limited  Partnership  (a) by the
       General  Partner  (which  election  shall be Consented to by Unit Holders
       owning more than 50% of the outstanding  Depositary Units), or (b) by the
       Consent  of  Unit  Holders  owning  more  than  50%  of  the  outstanding
       Depositary Units;

             (v) ninety days after the Removal or withdrawal of the sole General
       Partner (unless a successor is elected pursuant to Section 6.5);

             (vi)  the  dissolution  and  liquidation  of the NPI  Partnership
       without the  continuance  of its  business  by the Limited  Partnership
       pursuant to Section 4.2A(ii); or

                                      -37-
<PAGE>

             (vii) the happening of any other event causing the  dissolution  of
       the  Limited  Partnership  under the laws of the State,  except  that the
       Incapacity  of the  Depositary  or any Unit Holder shall not dissolve the
       Limited  Partnership  and the seizure of the  Interest of the  Depositary
       shall not dissolve the Limited Partnership.

       B. Dissolution of the Limited  Partnership  shall be effective on the day
on which  the event  occurs  giving  rise to the  dissolution,  but the  Limited
Partnership  shall not terminate until the General Partner has recorded a notice
of  dissolution of the Limited  Partnership  with the office of the Secretary of
State of the State and shall have  complied with the laws of the other states in
which its does  business  and the assets of the  Limited  Partnership  have been
distributed as provided in Section 9.2.

       C. Nothing  contained in this Agreement  shall impair,  restrict or limit
the rights and powers of the  Partners  under the laws of the State or any other
jurisdiction  in which the Limited  Partnership  is doing business to reform and
reconstitute  themselves as a limited partnership  following  dissolution of the
Limited Partnership either under provisions  identical to those set forth herein
or under any other provisions.

       D. If the Limited  Partnership  is  dissolved as a result of an event set
forth in Sections  9.lA(ii),  (v) or (vi), Unit Holders owning a majority of the
outstanding  Depositary  Units may  appoint  an interim  manager of the  Limited
Partnership,  who shall have and may exercise only the rights, powers and duties
of a general partner necessary to preserve Limited Partnership assets, until (a)
a successor  General Partner is elected  pursuant to Section 6.5, if the Limited
Partnership  is  reconstituted,  or (b) the Limited  Partnership  is  liquidated
pursuant to Section  9.2. The interim  manager  shall not be liable as a general
partner  to the  Depositary  or Unit  Holders  and shall,  while  acting in such
capacity,  be  entitled to the same  indemnification  rights as are set forth in
Section 4.10.

       Section 9.2.  Liquidation

       A. Upon dissolution of the Limited Partnership,  its liabilities shall be
paid in the order provided  herein.  The General  Partner shall sell the Limited
Partnership's  property so that such disposition is in the best interests of the
Unit  Holders,  and  shall  execute  all  amendments   terminating  the  Limited
Partnership. In connection with any such Sale, the General Partner shall attempt
to obtain the best prices for such  property.  Pending  such Sales,  the General
Partner  shall have the right to continue to operate and  otherwise to deal with
Limited Partnership  property. In the event the Limited Partnership is dissolved
on account of the  Incapacity  or Removal of the  General  Partner,  the Limited
Partnership  shall elect, in accordance with the provisions of Article Twelve, a
person (the "Liquidating Agent") to

                                      -38-
<PAGE>

perform the  function of the General  Partner in  liquidating  the assets of the
Limited  Partnership  and  winding  up  its  affairs,  and  shall  pay  to  such
Liquidating  Agent its  reasonable  fees and  expenses  incurred  in  connection
therewith. Gain or loss realized on the Sale or other disposition of the Limited
Partnership's  assets  will be  credited  to (in the case of  gain)  or  charged
against (in the case of loss) each Partner's or Unit Holder's Capital Account to
the extent  allocable to such Partner or Unit Holder under Sections 5.2 and 5.3.
Any  liquidation  of the Limited  Partnership  shall take place out of court and
without application being made therefor to the Secretary of State of the State.

       The  Liquidating  Agent shall agree not to resign at any time  without 15
days'  prior  written  notice and (if other  than the  General  Partner)  may be
removed at any time,  with or without  cause,  by notice of removal  approved by
Unit  Holders  owning a  majority  of the  outstanding  Depositary  Units.  Upon
dissolution,  removal,  or resignation of the Liquidating Agent, a successor and
substitute  Liquidating Agent (who shall have and succeed to all rights,  powers
and duties of the original  Liquidating Agent) shall, within 30 days thereafter,
be selected by Unit  Holders  owning a majority  of the  outstanding  Depositary
Units. The right to appoint a successor or substitute  Liquidating  Agent in the
manner  provided  herein shall be recurring  and  continuing  for so long as the
functions and services of the Liquidating Agent are authorized to continue under
the provisions hereof, and every reference herein to the Liquidating Agent shall
be deemed  to refer  also to any such  successor  substitute  Liquidating  Agent
appointed in the manner herein  provided.  The Liquidating  Agent shall have and
may exercise,  without  further  authorization  or Consent of any of the parties
hereto,  all of the powers conferred upon the General Partner under the terms of
this Agreement (but subject to all of the  applicable  limitations,  contractual
and  otherwise,  upon the exercise of such powers,  other than the limitation on
sales set forth in Section  4.5B) to the extent  necessary  or  desirable in the
good  faith  judgment  of the  Liquidating  Agent to carry  out the  duties  and
functions of the Liquidating  Agent hereunder for and during such period of time
as shall be reasonably  required in the good faith  judgment of the  Liquidating
Agent to complete the winding-up and  liquidation of the Limited  Partnership as
provided for herein.

       Notwithstanding   the  provision  of  Section  9.1  which   requires  the
liquidation of the assets of the Limited  Partnership,  but subject to the order
or priorities set forth herein, if on dissolution of the Limited Partnership the
General Partner or Liquidating  Agent  determines that an immediate sale of part
or all of the Limited Partnership's assets would be impracticable or would cause
undue loss to the Unit Holders, the General Partner or Liquidating Agent may, in
its absolute  discretion,  defer for a reasonable  time the  liquidation  of any
assets except those necessary to satisfy  liabilities of the Limited Partnership
(other than those to Partners).

                                      -39-
<PAGE>

       B. In  settling  accounts  after  dissolution,  the assets of the Limited
Partnership  shall  be paid  out in the  following  order:  (i) to  third  party
creditors,  in the order or priority  as  provided  by law;  (ii) to the General
Partner and any  Liquidating  Agent for any expenses of the Limited  Partnership
paid by or payable  to them to the extent  they are  entitled  to  reimbursement
therefor  pursuant to this  Agreement;  (iii) to all of the Unit  Holders in the
amount  equivalent to the amount of their positive  Capital Account balances (as
adjusted  pursuant  to Section  9.2A) on the date of  distribution;  (iv) to the
General Partner in the amount  equivalent to the amount of its positive  Capital
Account  balance  (as  adjusted  pursuant  to  Section  9.2A)  on  the  date  of
distribution;  and (v) the  balance,  if any,  shall be paid to the Partners and
Unit Holders in the manner in which Income is then being allocated.

       C. If the General  Partner has a deficit  balance in its Capital  Account
following the distribution(s)  provided for in Section 9.2B above, as determined
after taking into account all adjustments to its Capital Account for the taxable
year of the Limited  Partnership  during which such  distribution(s)  occur,  it
shall  restore the amount of such  deficit  balance to the  Limited  Partnership
within 90 days and such amount shall be  distributed  to the other  Partners and
Unit Holders in accordance with their positive Capital Account balances.

       D. Notwithstanding  anything to the contrary in this Agreement,  upon the
dissolution  and  termination  of the  Partnership,  the  General  Partner  will
contribute  to the  Partnership  the lesser of: (a) the  deficit  balance in its
capital  account;  or (b)  the  excess  of 1.01  percent  of the  total  Capital
Contribution  of the Depositary over the capital  previously  contributed by the
General Partner.

                                 ARTICLE TEN
              Books and Records Accounting; Tax Elections; etc.

       Section 10.1.  Books and Records

        The books and records of the Limited Partnership,  including information
relating  to the  sale by the  General  Partner  or any  Affiliates  of goods or
services to the Limited  Partnership,  and a list of the names and addresses and
Depositary Units of all Unit Holders and Limited  Partners,  shall be maintained
by the General Partner at the principal office of the Limited  Partnership for a
period of five years following the close of the Fiscal Year to which they relate
and shall be available  for  examination  there by any Partner or Unit Holder or
its duly authorized representatives at any and all reasonable times. Any Partner
or Unit Holder, or its duly authorized representatives, upon paying the costs of
collection, duplication and mailing, shall be entitled for any proper purpose to
a copy of the list of  names  and  addresses  and  Depositary  Units of the Unit
Holders and Limited  Partners.  The Limited  Partnership may maintain such other
books and records and may provide  such  financial  or other  statements  as the
General Partner in its discretion deems advisable.

                                      -40-
<PAGE>

       Section 10.2.  Accounting Basis for Tax and Reporting Purposes;  Fiscal
Year

       The books and records of the Limited  Partnership  for tax purposes,  for
purposes of this Agreement and for the purpose of reports to the Partners, shall
be kept on the accrual basis. The Fiscal Year of the Limited  Partnership  shall
be the calendar year to the extent permissible and the General Partner shall use
its best efforts to obtain any necessary approvals therefor.

       Section 10.3  Bank Accounts

       The  General  Partner  shall  maintain a bank  account or  accounts to be
maintained by the General Partner on behalf of the Limited  Partnership with any
bank in the United  States  having total assets in excess of  $100,000,000.  The
General Partner shall not deposit Limited  Partnership  funds in an account with
any bank in an  aggregate  amount in excess of 5% of such bank's  total  assets.
Withdrawals   shall  be  made  only  in  the  regular   course  of  the  Limited
Partnership's  business on such  signature or signatures as the General  Partner
may  determine.  All deposits and other funds not needed in the operation of the
business  may  be  deposited  in  interest--hearing  accounts,  certificates  of
deposit,  unaffiliated  money  market  funds or  invested,  in short term United
States  Government  obligations  maturing within one year,  commercial  paper of
United States  corporations  having the highest credit rating granted by Moody's
Investors  Services,  Inc. or  Standard & Poors  Corporation,  or other  similar
highly liquid investments.

       Section 10.4  Reports

       A. The General  Partner  shall close the  Limited  Partnerships  books of
account  promptly at the close of each Fiscal Year and an annual  examination of
the Limited Partnership's financial statements shall be performed at the expense
of the Limited Partnership by the Accountants. The General Partner shall furnish
to the Unit  Holders  an annual  report  within 120 days after the close of each
Fiscal Year of the Limited Partnership  commencing with the Fiscal Year in which
the Limited  Partnership  was  Activated.  If requested  by a Unit  Holder,  the
General Partner shall also furnish such Unit Holder with a report within 75 days
after the end of the first six months of the Fiscal  Year in which such  request
was made, or within 75 days after the request is made,  whichever is later. Such
report will contain at least the following information:

             (i) Financial statements for the Limited  Partnership's and the NPI
       Partnership's  accounts,  including a balance sheet, statement of income,
       statement  of changes in  partners'  capital and  statement of changes in
       financial  position  prepared  on an  accrual  basis in  accordance  with
       generally accepted  accounting  principles and accompanied by a report of
       the  Accountants  together  with their opinion  thereon,  except that the
       semi-annual financial statements need not be audited;

                                      -41-
<PAGE>

             (ii) A summary itemization,  by type and/or classification,  of the
       total fees and compensation,  including any overhead reimbursement,  paid
       by the Limited  Partnership  or NPI  Partnership  or  indirectly on their
       behalf, to the General Partner or Managing Partner and any Affiliate;

             (iii) A description of each  acquisition  of Net Profits  Interests
       and Royalties, including the costs therefor, in which the NPI Partnership
       owns an interest,  except  succeeding  reports need contain only material
       changes (including all farmouts,  development drilling, improved recovery
       operations on and  abandonments of any Producing  Properties in which the
       NPI Partnership  owns an interest and which may have a material effect on
       the NPI Partnership's activities), if any, regarding Producing Properties
       already  reported  upon.  In the case of wells  that have been  abandoned
       after production has commenced,  a statement  justifying such abandonment
       shall be included if the General Partner or an Affiliate is the operator.
       In the case of farmouts,  the statement shall include a justification  of
       the farmout,  location,  time, to whom made, and a general description of
       terms;

       B. Within 60 days after the end of each fiscal  quarter  each Unit Holder
will receive a "participant  statement" which summarizes his allocable  interest
in the  Limited  Partnership.  The  participant  statement  will detail the Unit
Holder's cash receipts and disbursements for the Unit Holder's Depositary Units.

       C. Within 120 days after the end of the Fiscal Year  following the Fiscal
Year in  which  Activation  of the  Limited  Partnership  occurs,  and  annually
thereafter,  the General Partner shall furnish to the Unit Holders a computation
as of the end of the immediately  preceding  Fiscal Year, based upon engineering
reports  prepared by one or more  qualified  independent  petroleum  engineering
firms with respect to Producing  Properties  containing Proved Reserves equal to
at least 80% of the Proved Reserves of the NPI Partnership (with the computation
as to any  balance of the NPI  Partnership's  Proved  Reserves  being based upon
petroleum  engineering reports prepared by the General Partner or an Affiliate),
of the total estimated Proved  Developed  Producing  Reserves,  Proved Developed
Non-Producing  Reserves  and  Proved  Undeveloped  Reserves  owned  by  the  NPI
Partnership,  the estimated  dollar value thereof stated in then existing prices
and  escalated  prices (as provided by the General  Partner).  In addition,  the
computation shall include an estimate of the time required for the extraction of
such  reserves and the present  worth of such  reserves  and the estimate  shall
contain a statement  that  because of the time period  required to extract  such
reserves the present value of revenues to be obtained in the future is less than
if immediately receivable.

       D.  In  addition  to the  report  described  in  Section  10.4C  of  this
Agreement,  if an event occurs to the  knowledge  of the General  Partner or its
Affiliates  leading to a reduction or an increase of such  Reserves of more than
10 percent,  excluding reduction as a result of normal production, an additional
computation  and estimate  similar to that  described in Section  10.4C shall be
sent to each Unit Holder as soon as possible.

                                      -42-
<PAGE>

       E. By March 15 of each year, the General Partner will furnish a report to
each Unit Holder  containing such  information as is pertinent for completion of
his respective federal, state, and other income tax returns.

       F. By January 31 of each year, the General  Partner will furnish a report
to each IRA and Retirement Plan owning Depositary Units as of December 31 of the
preceding  year  setting  forth an  evaluation  of the fair market  value of the
Depositary Units as of such December 31 of the preceding year.

       G. The General  Partner shall file on a timely basis with the  Securities
and  Exchange  Commission  all  filings  required  to be  made  by  the  Limited
Partnership  and NPI  Partnership  pursuant to the  Securities  Act of 1933, the
Securities  Exchange  Act of 1934,  and the  rules and  regulations  promulgated
thereunder. The General Partner shall make available to any Unit Holder upon the
Unit Holder's request, copies of any report filed by or on behalf of the Limited
Partnership or the NPI Partnership with the Securities and Exchange  Commission.
The General  Partner  shall cause a copy of the report sent to the Unit  Holders
under paragraphs A, C, D and E hereof to be sent to the California  Commissioner
of Corporations.

       H.  The  General  Partner  agrees  to make  all  relevant  financial  and
engineering  reports  available  for  review by a Unit  Holder on request at the
offices of the Limited Partnership.

       Section 10.5.  Elections

        The General  Partner  shall cause the  Limited  Partnership  to make all
elections required or permitted to be made by the Limited  Partnership under the
Code and not otherwise  expressly provided for in this Agreement,  in the manner
that the General Partner believes will be most advantageous to the Unit Holders,
except  that (i) the General  Partner  shall not be required to make an election
under Section 754 of the Code or  corresponding  provisions of applicable  state
income tax laws,  and (ii) the General  Partner  shall make the  election  under
Section  263(c) of the Code to expense all intangible  drilling and  development
costs in the initial Limited Partnership Federal income tax return filed for the
Fiscal Year in which such costs are incurred.

                                 ARTICLE ELEVEN
                                   Amendments

       Section 11.1.  Proposal and Adoption of Amendments General

       A. Notwithstanding anything to the contrary contained herein, the General
Partner  may,  without  prior  notice or consent of any Unit  Holder,  amend any
provision of this  Agreement  (including  an  amendment  to admit an  additional
General Partner or a successor General Partner in the event of the withdrawal or
Removal of the General Partner) if,

                                      -43-
<PAGE>

in its opinion,  such amendment does not have a material adverse effect upon the
Unit  Holders.   Amendments  to  this  Agreement  to  reflect  the  addition  or
substitution  of a Limited  Partner  or the  admission  of a  successor  General
Partner shall be made at the time and in the manner referred to in Section 11.2.
Any other  amendment to this Agreement may be proposed by the General Partner or
holders of at least 10% of the outstanding  Depositary Units. The Unit Holder or
Unit Holders proposing such amendment shall submit a Notification containing (a)
the text of such amendment and (b) a statement of the purpose of such amendment.
The General  Partner  shall,  within 15 days after receipt of any proposal under
this Section 11.1A,  give  Notification to all Partners and Unit Holders of such
proposed amendment and of such statement of purpose, together, in the case of an
amendment proposed by other Partners or Unit Holders, with the views, if any, of
the General Partner with respect to such proposed amendment,  unless the General
Partner has received prior thereto an opinion of counsel to the effect that such
amendment is permitted by the Act, will impair the limited liability of the Unit
Holders,  or will adversely affect the classification of the Limited Partnership
as a partnership for federal income tax purposes.

       B.  Amendments to this Agreement  shall be adopted if: (i) in the case of
amendments  other  than  those  referred  to in  Section  11.2,  the  conditions
specified  in  Section  7.1E shall have been  satisfactorily  completed  and the
Limited  Partnership  has not  received  an opinion  of  counsel to the  Limited
Partnership  to the  effect  that  such  amendment  will  adversely  affect  the
classification  of the Limited  Partnership as a partnership  for federal income
tax purposes;  (ii) in the case of amendments  referred to in Section 11.2,  the
conditions  specified in Section 6.5B shall have been satisfactorily  completed;
or (iii) in the case of all other  amendments,  such  amendment  shall have been
Consented to by the  Depositary,  which  Consent will be given if the Consent of
Unit  Holders  owning  more  than  50% of the  outstanding  Depositary  Units is
obtained (unless such Consent is not required  pursuant to Section 11.1A of this
Agreement);  provided,  however,  that no such  amendment  may:  (a) enlarge the
obligations  of any Partner or Unit Holder  under this  Agreement or convert the
Interest of any Limited Partner into the Interest of a General Partner or modify
the  limited  liability  of any  Limited  Partner  without  the  Consent of such
Partner;  (b) modify the method  provided  in Article  Five of  determining  and
allocating or distributing,  as the case may be, Profits, Losses,  Distributable
Cash and each item of Income,  gain, loss, cost, deduction or credit without the
Consent of each Partner or Unit Holder adversely  affected by such modification;
(c) amend  Sections 4.9,  4.10,  6.1, 6.2, 6.3 or 6.4 without the Consent of the
General Partner.

       C. Upon the adoption of any  amendment to this  Agreement,  the amendment
shall be  executed  by the  General  Partner  and the  Depositary  and  shall be
recorded  in the proper  records  of the State and any other  state in which the
Limited Partnership is then doing business.

                                      -44-
<PAGE>

       Section 11.2.  Amendments on Admission or Removal of Partners

        If this Agreement  shall be amended to reflect the withdrawal or Removal
of the  General  Partner  and the  continuation  of the  business of the Limited
Partnership,  such  amendment  shall be signed  by the  remaining  or  successor
General Partner, the Removed General Partner and the Depositary.

                                 ARTICLE TWELVE
                          Consents, Voting and Meeting

       Section 12.1.  Method of Giving Consent

        Any Consent of a Unit Holder  required by this Agreement may be given by
a Unit Holder as follows:  (i) at a meeting,  in person,  by a written  proxy or
signed  writing  directing the manner in which it desires that its vote be cast,
which writing must be received by the General Partner prior to such meeting,  or
(ii) without a meeting,  by a signed  writing  directing  the manner in which it
desires that its vote be cast,  which writing must be received by the Depositary
prior to the date upon which the vote of Unit  Holders  are to be  counted.  Any
Partner or Unit Holder may waive notice of or  attendance  at any meeting of the
Unit  Holders and Partners and may execute a signed  written  consent.  Only the
votes of Unit  Holders of record on the date set by the General  Partner  (which
date  shall be not less than 10 days and not more than 60 days prior to the date
set for the  meeting or  consent)  whether at a meeting or  otherwise,  shall be
counted.  The laws of the State  pertaining to the validity and use of corporate
proxies shall govern the validity and use of proxies given by Unit Holders.

       Section 12.2.  Meetings of Partners and Unit Holders

        The General  Partner may at any time call a meeting of the Unit  Holders
or for a vote, without a meeting,  of the Unit Holders on matters upon which the
Unit Holders are entitled to provide  their  Consent,  and shall call for such a
meeting or vote upon receipt by the General  Partner of a request  therefor made
by Unit Holders owning at least 10% of the  outstanding  Depositary  Units as of
the date of receipt of such  Notification.  Within 15 days of the receipt of the
Notification,  the General Partner shall notify all Unit Holders of record as of
the date set by the General  Partner  (which date shall be not less than 10 days
and not more than 60 days prior to the date set for the  meeting or  consent) as
to the time and place of the meeting,  if called,  and the general nature of the
business to be transacted thereat, or if no such meeting has been called, of the
matter or  matters  to be voted  upon and the date upon  which the votes will be
counted.  Any Unit Holders meeting or the date upon which such votes,  without a
meeting,  will be counted  (regardless of whether the General Partner has called
for such meeting or vote upon the request of Unit Holders or has initiated  such
event  without  such  request)  shall be not less  than 30 or more  than 60 days
following  mailing of the  Notification  thereof  by the  General  Partner.  All
expenses of the  meetings,  voting and such  Notification  shall be borne by the
Limited Partnership.

                                      -45-
<PAGE>

       Section 12 .3.  Limitations on Requirements for Consents

        Notwithstanding  anything to the contrary  contained in this  Agreement,
the powers of the Unit Holders set forth in Sections  4.5D,  4.5E,  4.5F,  6.3A,
6.6A,  6.7 and 12.5  shall not be deemed to be  granted  to the Unit  Holders or
exercisable  by them if, prior to the  exercise of such powers,  counsel for the
Limited Partnership or counsel designated by Unit Holders owning at least 10% of
the  outstanding  Depositary  Units delivers to the Depositary an opinion to the
effect that the grant or the exercise of those powers is  prohibited by the Act,
will impair the limited  liability of the Depositary or the Unit Holders or will
affect the  classification  of the  Limited  Partnership  as a  partnership  for
Federal income tax purposes.

       Section  12.4.  Submissions to Unit Holders

        The General Partner shall give all the Unit Holders  Notification of any
proposal or other matter  required by any provisions of this Agreement or by law
to be submitted for the  consideration  and approval of the Unit  Holders.  Such
Notification shall include any information required by the relevant provision of
the Agreement or by law.

       Section 12.5.  Acting without Concurrence of General Partner

       Except as limited by Sections 12.3,  12.6 and 11.18,  Unit Holders owning
more than 50% of the  outstanding  Depositary  Units,  without the necessity for
concurrence by the General Partner, may cause the Depositary to vote to:

       (a) amend the  Agreement or cause the NPI  Partnership  Agreement to be
amended;

       (b) dissolve the Limited  Partnership  or cause the NPI  Partnership to
be dissolved;

       (c) remove the General  Partner or cause the Managing  Partner of the NPI
Partnership  to be  removed  and elect a new  General  Partner  or cause the NPI
Partnership to elect a new Managing Partner;

       (d) approve or  disapprove  the sale of all or  substantially  all of the
assets of the Limited Partnership or cause the NPI Partnership to sell or not to
sell all or substantially all of its assets; or

       (e)  cancel or amend  the terms of any  contract  for  services  with the
General  Partner or any Affiliate or cause the NPI  Partnership  to do so, which
shall be without penalty, provided 30 days written notice is given.

       Section 12.6  Restricted  Voting Rights for  Depositary  Units of General
Partner.  The General Partner and its Affiliates shall not vote on any proposals
submitted to the Unit Holders to amend  Sections 2.3, 4.3, 4.4, 4.6,  Article XI
or Section 12.3.

                                      -46-
<PAGE>

                                ARTICLE THIRTEEN
                                 The Depositary

       Section 13.1  Depositary Receipts.

       A. Within 45 days of the  Activation of the  Partnership,  the Depositary
shall execute and forward to each Unit Holder Depositary Receipts evidencing the
ownership by the Unit Holder as of the date of Activation the  Depositary  Units
for which such Unit Holder subscribed.

       B.  Pursuant  to the terms of  Section  8.3,  upon  receipt of a properly
executed  application for transfer,  the Depositary  shall within three business
days execute and forward Depositary Receipts to the respective transferees.

       C.  Depositary  Receipts may be endorsed with,  have  incorporated in the
text  thereof or be  accompanied  by such legends or  recitals,  attachments  or
changes,  not  inconsistent  with the  provisions of this  Agreement,  as may be
required to comply with any  applicable  law or regulation or with the rules and
regulations  of any securities  exchange upon which the Depositary  Units may be
listed,  or to conform with any usage with respect  thereto,  or to indicate any
special limitation or restriction to which any particular Depositary Unit may be
subject,  or as may for any other reason be required.  Each  Depositary  Receipt
shall bear the Depositary's  corporate seal and shall be duly executed on behalf
of the  Depositary by the manual or facsimile  signature of the duly  authorized
officers  of the  Depositary.  No  Depositary  Receipt  shall be entitled to any
benefit  under this  Agreement or be valid for any purpose  unless it bears such
signatures and corporate seal.

       D. All Depositary  Receipts  executed by the Depositary shall be numbered
consecutively.  The Unit Holder of each  numbered  Depositary  Receipt  shall be
registered on the books of the Depositary maintained pursuant to Section 13.3A.

       E. Upon  surrender  by the Unit  Holder  in person or by duly  authorized
attorney  of one or  more  Depositary  Receipts  at the  Depositary's  principal
office,  or at any other office it may designate for the purpose,  for split--up
or  combination,  the Depositary  shall,  subject to the terms and conditions of
this Agreement and the Depositary  Receipt,  execute and deliver one or more new
Depositary  Receipts in authorized  denominations  as requested,  evidencing the
same  aggregate  number  of  Depositary  Units as  evidenced  by the  Depositary
Receipt(s) surrendered.

       F. If any Depositary Receipt is mutilated, destroyed, lost or stolen, the
Depositary shall execute and deliver a Depositary Receipt in like form and tenor
in  exchange  and  substitution  for the  mutilated,  destroyed,  lost or stolen
Depositary Receipt; provided, that the Depositary may require the Unit Holder to
(i) surrender any mutilated  Depositary Receipt,  (ii) file with the Depositary,
in a form and

                                      -47-
<PAGE>

manner satisfactory to it, proof of the destruction,  loss or theft, and of such
Unit  Holder's  ownership,  of the  Depositary  Receipt and (iii) furnish to the
Depositary reasonable  indemnification  (including posting of an indemnity bond)
satisfactory to the Depositary.

       G. As a condition  precedent to the  execution  and  delivery,  transfer,
split-up,  combination,  surrender,  conversion  or exchange  of any  Depositary
Receipt,  the  Depositary  may  require  (i)  payment  of a sum  sufficient  for
reimbursement of any tax or other governmental charge with respect thereto, (ii)
production of proof satisfactory to it as to the identity and genuineness of any
signature or endorsement  or as to the due  authorization  of the action,  (iii)
filing of such  information  and execution of such  documents by the  transferor
and/or the  transferee  as may be required by this  Agreement or the  Depositary
Receipt or otherwise is deemed  necessary or  appropriate  by the Depositary and
(iv)  compliance with such other  conditions as may be imposed under  applicable
laws and  regulations.  The Depositary shall be entitled to rely upon, and shall
not have any liability to the Limited Partnership, the General Partner, any Unit
Holder or any other Person with respect to the content of any proof submitted to
it pursuant to this Section 13.1G. and shall have no obligation to inquire as to
the truth and accuracy thereof (except for acts or omissions  resulting from the
Depositary's gross negligence).

       H.  All  Depositary  Receipts  surrendered  to the  Depositary  shall  be
cancelled.  The Depositary  shall retain all cancelled  Depositary  Receipts and
other  instruments,  documents and records in  accordance  with the policies and
regulations  of the  Depositary,  federal  securities  laws  and the  rules  and
regulations  of any  securities  exchange  or market  upon which the  Depositary
Receipts may be listed or quoted.

       Section 13.2  Depositary as Transfer Agent and Registrar.  The Depositary
shall also be the  transfer  agent and  registrar  for the  Depositary  Receipts
unless  prohibited  by law,  regulation or any  applicable  rule of a securities
exchange or market. In its capacity as such, subject to the terms and conditions
of this  Agreement,  the  Depositary  shall  transfer  record  ownership  of the
Depositary  Units by  bookkeeping  entry on the  books  and  records  maintained
pursuant to Section l3.3A.

       Section 13.3 Duties of Depositary

       A.    In performing its duties hereunder the Depositary shall:

             (i)  maintain at its  principal  office a current  list of the full
       name and last known home or  business  address of each Unit  Holder,  set
       forth in alphabetical order which list shall be available during ordinary
       business hours for examination and copying at the reasonable request, and
       at the expense, of any Unit Holder or his duly authorized representative,
       or copies of such list may be requested in writing for any proper purpose
       by any Unit Holder or his duly authorized representative; provided

                                      -48-
<PAGE>

      that the reasonable  costs of fulfilling such request,  including  copying
      expenses,  shall  be paid by the  Unit  Holder  making  such  request.  In
      addition, the Depositary shall, as required, furnish to the Securities and
      Exchange  Commission,  any report,  financial  statement or  communication
      received from the Limited  Partnership or the General Partner that is made
      generally available to Unit Holders;

             (ii)  keep  all  records  required  to be  kept,  for  the  periods
       specified, and shall file with the Securities and Exchange Commission all
       materials required to be so filed,  under the Securities  Exchange Act of
       1934, by virtue of its status as Depositary. A copy of any material filed
       by the Depositary with the Securities and Exchange  Commission shall also
       be provided to the Limited Partnership within two business days after its
       filing. To the extent that any such filing requires  information from the
       Limited  Partnership or the General Partner,  such  information  shall be
       furnished to the Depositary by the General Partner in sufficient quantity
       and a sufficient time in advance of the date the filing is required to be
       made to enable the Depositary to comply with such requirements; and

             (iii)  keep  books at its  corporate  office  for the  transfer  of
       Depositary Receipts. The books shall be open during normal business hours
       for inspection by the Unit Holders.  The Depositary may,  however,  close
       the  transfer  books,  at any  time or from  time to  time,  when  deemed
       expedient  by it  in  connection  with  the  performance  of  its  duties
       hereunder.

       B. Upon the request of the Limited  Partnership,  the Depositary shall as
promptly as  practicable  furnish to the Limited  Partnership  a list, as of the
date specified in such request,  of the names,  addresses and social security or
taxpayer identification numbers of all Unit Holders.

       Section 13.4 Depositary Not a Trustee, Issuer, etc. The Depositary is not
a trustee and it is intended that the Depositary, in its capacity as depositary,
shall not be deemed to be an "issuer" or  "underwriter"  of securities under the
federal  securities laws or applicable state securities laws; it being expressly
understood  and agreed  that the  Depositary,  in its  capacity  as the  limited
partner of the Limited Partnership, is acting only in a ministerial capacity.

       Section 13.5 Indemnification of the Depositary.

        The Depositary  shall be  indemnified by the Limited  Partnership to the
same extent and subject to the same  conditions and  restrictions as provided in
Section  4.10 of this  Agreement  with  respect  to the  indemnification  of the
General Partner.

                                      -49-
<PAGE>

       Section 13.6  Limitation of Expense Reimbursements

        The expenses of the Depositary  otherwise  reimbursable  to it under the
terms of this  Agreement  and the fees payable to it hereunder  shall not exceed
the lesser of (i) an amount equal to 90% of the competitive price which would be
charged by  non-affiliated  persons  rendering  similar  services in the same or
comparable  geographic location or (ii) the costs and expenses of the Depositary
incurred in rendering such services.

                                ARTICLE FOURTEEN
                            Miscellaneous Provisions

       Section 14.1.  Notification  to the Limited  Partnership or the General
Partner

        Any Notification to the Limited Partnership or the General Partner shall
be sent to the principal office of the Limited Partnership, as set forth in this
Agreement. Except as provided herein, any Notification to a Unit Holder shall be
sent to its last known address.

       Section 14.2.  Binding Provisions

        The covenants and agreements  contained herein shall be binding upon and
inure to the benefit of the heirs,  executors,  administrators,  successors  and
assigns of the respective parties hereto.

       Section 14.3.  Applicable Law

        This  Agreement  shall be construed and enforced in accordance  with the
laws of the State.

       Section 14.4.  Separability of Provisions

         If for any reason  any  provision  or  provisions  hereofwhich  are not
material to the purposes or business of the Limited  Partnership  or of the Unit
Holders'  Depositary  Units are  determined  to be invalid  and  contrary to any
existing or future law,  such  invalidity  shall not impair the  operation of or
affect those portions of this Agreement that are valid.

       Section 14.5.  Appointment of the General Partner as Attorney- in-Fact

        The  Depositary,  by  the  execution  of  this  Agreement,   irrevocably
constitutes  and  appoints  the General  Partner,  its true and lawful agent and
attorney-in-fact  with full power and authority in its name,  place and stead to
execute,  acknowledge,  deliver,  swear to,  file and record at the  appropriate
public offices such documents, instruments and conveyances that may be necessary
or appropriate to carry out the

                                      -50-
<PAGE>

provisions or purposes of this Agreement,  including without limitation: (i) all
certificates and other instruments  (including  counterparts of this Agreement),
and any  amendment  thereof,  including  any  amendment  substituting  a Limited
Partner pursuant to Section 7.lE and Section 8.2, that the General Partner deems
appropriate to form, reform,  qualify or continue the Limited  Partnership (or a
new  partnership  with   substantially   the  same  provisions  as  the  Limited
Partnership)  as a limited  partnership  (or a partnership in which the Partners
will have  limited  liability  comparable  to that  provided  by the Act) in the
jurisdiction  in which the Limited  Partnership may conduct  business;  (ii) all
amendments and other instruments necessary to admit into the Limited Partnership
additional  or  substituted   Partners  pursuant  to  Section  11.2;  (iii)  all
instruments  that the General  Partner deems  appropriate to reflect a change or
modification  of the Limited  Partnership  in accordance  with the terms of this
Agreement   (including   those   necessary   to   reflect   additional   Capital
Contributions);  (iv) all  conveyances  and other  instruments  that the General
Partner deems  appropriate  to reflect the  dissolution  and  termination of the
Limited  Partnership;   (v)  all  amendments  that  the  General  Partner  deems
appropriate to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provisions herein, or to make any other
provisions  with respect to matters or questions  arising  under this  Agreement
which will not be inconsistent  with the provisions of this Agreement;  and (vi)
to delete or add any  provision of this  Agreement  required to be so deleted or
added by the staff of the  Securities  and Exchange  Commission  or by any state
securities commissioner or similar such official,  which addition or deletion is
deemed by such  commissioner  or official to be for the benefit or protection of
the Limited Partner or Unit Holders.

       Section  14.6.  Entire Agreement

        This Agreement  constitutes the entire agreement among the parties. This
Agreement  supersedes any prior agreement or understanding among the parties and
may not be modified or amended in any manner  other than as set forth  herein or
deletion  is deemed by such  commissioner  or  official to be for the benefit or
protection of the Limited Partner or Unit Holders.

       Section 14.6.  Entire Agreement

        This Agreement  constitutes the entire agreement among the parties. This
Agreement  supersedes any prior agreement or understanding among the parties and
may not be modified or amended in any manner other than as set forth herein.

       Section 14.7.  Paragraph Titles

        Article and section titles are for  descriptive  purposes only and shall
not control or alter the meaning of this Agreement as set forth in the text.

                                      -51-
<PAGE>

       Section 14.8.  Counterparts

        This  Agreement  may be executed in several  counterparts,  all of which
together  shall  constitute  one  agreement   binding  on  all  parties  hereto,
notwithstanding that all the parties have not signed the same counterpart except
that no counterpart shall be binding unless signed by the General Partner.

                                       GEODYNE PROPERTIES, INC., as
                                       General Partner

                                       By: /s/ Michael E. Luttrell
                                           -------------------------------
                                            Michael E. Luttrell,
                                            Executive Vice President

                                       GEODYNE INSTITUTIONAL DEPOSITARY
                                       COMPANY, as the Limited Partner

                                       By:  /s/ Michael W. Tomasso
                                            ------------------------------
                                            Michael W. Tomasso
                                            President

                                      -52-
<PAGE>

                                   SCHEDULE A

                                 General Partner

Name and Address                                Capital Contribution
----------------                                --------------------

Geodyne Properties, Inc.                              $100
320 South Boston Avenue
The Mezzanine
Tulsa, Oklahoma 74103-3708

                                 Limited Partner

Name and Address                                Capital Contribution
----------------                                --------------------

Geodyne Properties, Inc.                              $16,963,700
320 South Boston Avenue
The Mezzanine
Tulsa, Oklahoma 74103-3708

                                      -53-

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