On July 23, 2014, Breitburn Energy Partners LP (“Breitburn”), Breitburn GP LLC (“Breitburn GP”) and Boom Merger Sub, LLC, a direct wholly owned subsidiary of Breitburn (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with QR Energy, LP (“QR Energy”) and QRE GP, LLC (“QRE”), pursuant to which Breitburn will acquire QR Energy in exchange for common units representing limited partner interests in Breitburn (“Breitburn Common Units”), implying a transaction value of approximately $3.0 billion, including the assumption of QR Energy’s existing net debt and the payment of cash to the holders of the outstanding Class C Convertible Preferred Units of QR Energy (each, a “Class C Unit”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into QR Energy, with QR Energy continuing as the surviving entity and a direct wholly owned subsidiary of Breitburn (the “Merger”).

Under the terms of the Merger Agreement, each outstanding Common Unit representing a limited partner interest in QR Energy (a “Common Unit”) and Class B Unit representing a limited partner interest in QR Energy (a “Class B Unit”) will be converted into the right to receive 0.9856 newly issued Breitburn Common Units (the “Merger Consideration”). A number of Class B Units issuable upon a change of control of QR Energy equal to (i) 6,748,067, minus (ii) the excess of (A) the number of performance units that vest and are settled in Common Units of QR Energy in connection with the Merger over (B) 383,900 will be issued and treated as outstanding Class B Units and converted into the right to receive the Merger Consideration. Each outstanding Class C Unit of QR Energy will be converted into the right to receive cash in an amount equal to $350 million divided by the number of Class C Units outstanding immediately prior to the effective time of the Merger. In no event will Breitburn be obligated to issue in excess of 72,001,686 Breitburn Common Units as part of the Merger Consideration.

In connection with the Merger Agreement, each award of restricted Common Units issued under QR Energy’s equity plans that is subject to vesting or forfeiture, that is subject to time-based vesting and that is outstanding and unvested immediately prior to the effective time of the Merger will become fully vested and will be converted into the right to receive the Merger Consideration. Each award of performance units with respect to Common Units of QR Energy issued under QR Energy’s equity plans that is outstanding immediately prior to the effective time of the Merger will vest and be settled in a number of Common Units determined based on actual attainment of the applicable performance goal(s) as of two business days prior to the effective time of the Merger, and the resulting Common Units will be converted into the right to receive the Merger Consideration.

The completion of the Merger is subject to satisfaction or waiver of customary closing conditions, including (1) the adoption of the Merger Agreement by holders of a majority of the outstanding Common Units, Class B Units and Class C Units, voting as a single class, (2) the effectiveness of a registration statement on Form S-4, (3) the approval for listing of the Breitburn Common Units issuable as part of the Merger Consideration on the NASDAQ and (4) other customary conditions such as expiration of the waiting period under the Hart-Scott-Rodino Act.

The Merger Agreement contains certain termination rights for both Breitburn and QR Energy and further provides that, upon termination of the Merger Agreement, under certain circumstances, either party may be required to reimburse the other party’s expenses up to $16,425,000, and QR Energy may be required to pay Breitburn a termination fee equal to $64,875,000 less any previous expense reimbursement by QR Energy.

The summary of the Merger Agreement in this Current Report on Form 8-K does not purport to be complete and is qualified by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 to the Current Report on Form 8-K filed by QR Energy with the U.S. Securities and Exchange Commission (the “SEC”) on July 29, 2014, and is incorporated herein by reference.

On July 23, 2014, Breitburn also entered into a Transaction, Voting and Support Agreement (the “Voting Agreement”) with each of Quantum Resources A1, LP, Quantum Resources B, LP, Quantum Resources C, LP, QAB Carried WI, LP, QAC Carried WI, LP and Black Diamond Resources, LLC (collectively, the “Fund Unitholders”), and each of QR Holdings (QRE), LLC and QR Energy Holdings, LLC (collectively, the “Management Unitholders” and, together with the Fund Unitholders, the “Unitholders”) with respect to the Merger Agreement. The Voting Agreement generally requires that the Unitholders vote or caused to be voted all Common Units, Class B Units and Class C Units owned by such Unitholder in favor of the merger and against alternative transactions. The Voting Agreement also provides that, upon termination of the Merger Agreement and QR Energy’s acceptance of an alternative transaction, each Unitholder may be required to pay Breitburn a termination fee equal to the lesser of (1) such Unitholder’s pro rata share of 2% of the equity value of such alternative transaction or (2) the excess of the aggregate consideration paid to such Unitholder in such alternative transaction over the aggregate consideration that would have been received by such Unitholder under the Merger Agreement. Subject to certain exceptions, the Voting Agreement will terminate upon the earlier of (i) the consummation of the Merger and (ii) the termination of the Merger Agreement.

The summary of the Voting Agreement in this Current Report on Form 8-K does not purport to be complete and is qualified by reference to the full text of the Voting Agreement, which is filed as Exhibit 2.2 to the Current Report on Form 8-K filed by QR Energy with the SEC on July 29, 2014, and is incorporated herein by reference.

On July 23, 2014, Breitburn also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with each of QR Holdings (QRE), LLC, QR Energy Holdings, LLC, Quantum Resources B, LP, Quantum Resources A1, LP, Quantum Resources C, LP, QAB Carried WI, LP, QAC Carried WI, LP and Black Diamond Resources, LLC (collectively, the “Fund”). Under the Registration Rights Agreement, Breitburn is required to file or cause to be filed with the SEC a registration statement with respect to the public resale of the Breitburn Common Units issued to the Fund as part of the Merger Consideration. Breitburn is required to file or cause to be filed the registration statement within 90 days following the closing under the Merger Agreement and is required to cause the registration statement to become effective as soon as reasonably practicable thereafter but in no event later than 120 days after the closing under the Merger Agreement.

The summary of the Registration Rights Agreement in this Current Report on Form 8-K does not purport to be complete and is qualified by reference to the full text of the Registration Rights Agreement, which is filed as Exhibit 4.1 to the Current Report on Form 8-K filed by QR Energy with the SEC on July 29, 2014, and is incorporated herein by reference.

The Merger Agreement, the Voting Agreement and the Registration Rights Agreement and the above descriptions have been included to provide investors and security holders with information regarding the terms of the Merger Agreement, the Voting Agreement and the Registration Rights Agreement. They are not intended to provide any other factual information about Breitburn, QR Energy or their respective subsidiaries or affiliates or equityholders. The representations, warranties and covenants contained in the Merger Agreement, the Voting Agreement and the Registration Rights Agreement were made only for purposes of those agreements and as of specific dates; were solely for the benefit of the respective parties to the Merger Agreement, the Voting Agreement and the Registration Rights Agreement; and may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made by each contracting party to the other for the purposes of allocating contractual risk between them that differ from those applicable to investors. Investors should be aware that the representations, warranties and covenants or any description thereof may not reflect the actual state of facts or condition of Breitburn, QR Energy or any of their respective subsidiaries, affiliates, businesses, or equityholders. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, the Voting Agreement and the Registration Rights Agreement, which subsequent information may or may not be fully reflected in public disclosures by Breitburn or QR Energy. Accordingly, investors should read the representations and warranties in the Merger Agreement, the Voting Agreement and the Registration Rights Agreement not in isolation but only in conjunction with the other information about Breitburn, QR Energy and their respective subsidiaries that the respective companies include in reports, statements and other filings they make with the SEC.