Document:

exv10w3

 

Exhibit 10.3

Execution Version

 

 

SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

ENCORE ENERGY PARTNERS LP

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	
ARTICLE I	 	 	 	 
	
DEFINITIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.1

	 	Definitions	 	 	1	 
	Section 1.2

	 	Construction	 	 	19	 
	
ARTICLE II	 	 	 	 
	
ORGANIZATION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.1

	 	Formation	 	 	19	 
	Section 2.2

	 	Name	 	 	19	 
	Section 2.3

	 	Registered Office; Registered Agent;
Principal Office; Other Offices	 	 	20	 
	Section 2.4

	 	Purpose and Business	 	 	20	 
	Section 2.5

	 	Powers	 	 	20	 
	Section 2.6

	 	Power of Attorney	 	 	21	 
	Section 2.7

	 	Term	 	 	22	 
	Section 2.8

	 	Title to Partnership Assets	 	 	22	 
	Section 2.9

	 	Certain Undertakings Relating to the
Separateness of the Partnership	 	 	23	 
	
ARTICLE III	 	 	 	 
	
RIGHTS OF LIMITED PARTNERS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.1

	 	Limitation of Liability	 	 	24	 
	Section 3.2

	 	Management of Business	 	 	24	 
	Section 3.3

	 	Outside Activities of the Limited Partners	 	 	 24	 
	Section 3.4

	 	Rights of Limited Partners	 	 	24	 
	
ARTICLE IV	 	 	 	 
	
CERTIFICATES; RECORD HOLDERS; TRANSFER OF 

PARTNERSHIP INTERESTS; REDEMPTION OF 

PARTNERSHIP INTERESTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.1

	 	Certificates	 	 	25	 
	Section 4.2

	 	Mutilated, Destroyed, Lost or Stolen
Certificates	 	 	26	 
	Section 4.3

	 	Record Holders	 	 	27	 
	Section 4.4

	 	Transfer Generally	 	 	27	 
	Section 4.5

	 	Registration and Transfer of Limited
Partner Interests	 	 	28	 
	Section 4.6

	 	Transfer of the General Partner’s General
Partner Interest	 	 	29	 
	Section 4.7

	 	Restrictions on Transfers	 	 	30	 
	Section 4.8

	 	Eligible Holder Certifications;
Non-Eligible Holders	 	 	31	 
	Section 4.9

	 	Redemption of Partnership Interests of
Non-Eligible Holders	 	 	32	 

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

 

 

	 	 	 	 	 	 	 
	
ARTICLE V	 	 	 	 
	
CAPITAL CONTRIBUTIONS AND ISSUANCE OF 

PARTNERSHIP INTERESTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.1

	 	Organizational Contributions; Interim
Closing	 	 	33	 
	Section 5.2

	 	Contributions by the General Partner and
its Affiliates	 	 	34	 
	Section 5.3

	 	Contributions by Initial Limited Partners	 	 	34	 
	Section 5.4

	 	Interest and Withdrawal	 	 	35	 
	Section 5.5

	 	Capital Accounts	 	 	35	 
	Section 5.6

	 	Issuances of Additional Partnership
Securities	 	 	37	 
	Section 5.7

	 	Limited Preemptive Right	 	 	38	 
	Section 5.8

	 	Splits and Combinations	 	 	39	 
	Section 5.9

	 	Fully Paid and Non-Assessable Nature of
Limited Partner Interests	 	 	39	 
	Section 5.10

	 	Rights of Holders of Management Incentive
Units	 	 	39	 
	
ARTICLE VI	 	 	 	 
	
ALLOCATIONS AND DISTRIBUTIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.1

	 	Allocations for Capital Account Purposes	 	 	45	 
	Section 6.2

	 	Allocations for Tax Purposes	 	 	51	 
	Section 6.3

	 	Requirement and Characterization of
Distributions; Distributions to Record
Holders	 	 	54	 
	Section 6.4

	 	Special Provisions Relating to the Holders
of Management Incentive Units	 	 	55	 
	
ARTICLE VII	 	 	 	 
	
MANAGEMENT AND OPERATION OF BUSINESS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.1

	 	Management	 	 	55	 
	Section 7.2

	 	Certificate of Limited Partnership	 	 	58	 
	Section 7.3

	 	Restrictions on the General Partner’s
Authority	 	 	58	 
	Section 7.4

	 	Reimbursement of the General Partner	 	 	58	 
	Section 7.5

	 	Outside Activities	 	 	59	 
	Section 7.6

	 	Loans from the General Partner; Loans or
Contributions from the Partnership or
Group Members	 	 	61	 
	Section 7.7

	 	Indemnification	 	 	61	 
	Section 7.8

	 	Liability of Indemnitees	 	 	63	 
	Section 7.9

	 	Resolution of Conflicts of Interest;
Standards of Conduct and Modification of
Duties	 	 	63	 
	Section 7.10

	 	Other Matters Concerning the General
Partner	 	 	65	 
	Section 7.11

	 	Purchase or Sale of Partnership Securities	 	 	 66	 
	Section 7.12

	 	Registration Rights of the General Partner
and its Affiliates	 	 	66	 
	Section 7.13

	 	Reliance by Third Parties	 	 	68	 

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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ARTICLE VIII	 	 	 	 
	
BOOKS, RECORDS, ACCOUNTING AND REPORTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.1

	 	Records and Accounting	 	 	69	 
	Section 8.2

	 	Fiscal Year	 	 	69	 
	Section 8.3

	 	Reports	 	 	69	 
	
ARTICLE IX	 	 	 	 
	
TAX MATTERS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.1

	 	Tax Returns and Information	 	 	70	 
	Section 9.2

	 	Tax Elections	 	 	70	 
	Section 9.3

	 	Tax Controversies	 	 	71	 
	Section 9.4

	 	Withholding	 	 	71	 
	
ARTICLE X	 	 	 	 
	
ADMISSION OF PARTNERS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.1

	 	Admission of Initial Limited Partners	 	 	71	 
	Section 10.2

	 	Admission of Substituted Limited Partners	 	 	71	 
	Section 10.3

	 	Admission of Successor General Partner	 	 	72	 
	Section 10.4

	 	Admission of Additional Limited Partners	 	 	72	 
	Section 10.5

	 	Amendment of Agreement and Certificate of
Limited Partnership	 	 	73	 
	
ARTICLE XI	 	 	 	 
	
WITHDRAWAL OR REMOVAL OF PARTNERS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 11.1

	 	Withdrawal of the General Partner	 	 	73	 
	Section 11.2

	 	Removal of the General Partner	 	 	75	 
	Section 11.3

	 	Interest of Departing General Partner and
Successor General Partner	 	 	75	 
	Section 11.4

	 	Withdrawal of Limited Partners	 	 	77	 
	
ARTICLE XII	 	 	 	 
	
DISSOLUTION AND LIQUIDATION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 12.1

	 	Dissolution	 	 	77	 
	Section 12.2

	 	Continuation of the Business of the
Partnership After Dissolution	 	 	78	 
	Section 12.3

	 	Liquidator	 	 	78	 
	Section 12.4

	 	Liquidation	 	 	79	 
	Section 12.5

	 	Cancellation of Certificate of Limited
Partnership	 	 	79	 
	Section 12.6

	 	Return of Contributions	 	 	80	 
	Section 12.7

	 	Waiver of Partition	 	 	80	 

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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	Section 12.8

	 	Capital Account Restoration	 	 	80	 
	
ARTICLE XIII	 	 	 	 
	
AMENDMENT OF PARTNERSHIP AGREEMENT;

MEETINGS; RECORD DATE	 	 	 	 
	 
	 	 	 	 	 	 
	Section 13.1

	 	Amendments to be Adopted Solely by the
General Partner	 	 	80	 
	Section 13.2

	 	Amendment Procedures	 	 	82	 
	Section 13.3

	 	Amendment Requirements	 	 	82	 
	Section 13.4

	 	Special Meetings	 	 	83	 
	Section 13.5

	 	Notice of a Meeting	 	 	83	 
	Section 13.6

	 	Record Date	 	 	83	 
	Section 13.7

	 	Adjournment	 	 	84	 
	Section 13.8

	 	Waiver of Notice; Approval of Meeting;
Approval of Minutes	 	 	84	 
	Section 13.9

	 	Quorum and Voting	 	 	84	 
	Section 13.10

	 	Conduct of a Meeting	 	 	85	 
	Section 13.11

	 	Action Without a Meeting	 	 	85	 
	Section 13.12

	 	Right to Vote and Related Matters	 	 	86	 
	
ARTICLE XIV	 	 	 	 
	
MERGER OR CONVERSION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 14.1

	 	Authority	 	 	86	 
	Section 14.2

	 	Procedure for Merger, Consolidation or
Conversion	 	 	86	 
	Section 14.3

	 	Approval by Limited Partners	 	 	88	 
	Section 14.4

	 	Certificate of Merger or Conversion	 	 	89	 
	Section 14.5

	 	Amendment of Partnership Agreement	 	 	89	 
	Section 14.6

	 	Effect of Merger, Consolidation or
Conversion	 	 	89	 
	
ARTICLE XV	 	 	 	 
	
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 15.1

	 	Right to Acquire Limited Partner Interests	 	 	 90	 
	
ARTICLE XVI	 	 	 	 
	
GENERAL PROVISIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 16.1

	 	Addresses and Notices; Written
Communications	 	 	92	 
	Section 16.2

	 	Further Action	 	 	93	 
	Section 16.3

	 	Binding Effect	 	 	93	 
	Section 16.4

	 	Integration	 	 	93	 
	Section 16.5

	 	Creditors	 	 	93	 
	Section 16.6

	 	Waiver	 	 	93	 

ENCORE ENERGY PARTNERS LP

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	Section 16.7

	 	Counterparts	 	 	93	 
	Section 16.8

	 	Applicable Law	 	 	93	 
	Section 16.9

	 	Invalidity of Provisions	 	 	93	 
	Section 16.10

	 	Consent of Partners	 	 	94	 
	Section 16.11

	 	Facsimile Signatures	 	 	94	 
	Section 16.12

	 	Third-Party Beneficiaries	 	 	94	 

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED

PARTNERSHIP OF ENCORE ENERGY PARTNERS LP

     THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ENCORE ENERGY PARTNERS LP
dated as of September 17, 2007, is entered into by and among Encore Energy Partners GP LLC, a
Delaware limited liability company, as the General Partner, and the other parties hereto, as
limited partners, together with any other Persons who become Partners in the Partnership or parties
hereto as provided herein, and amends and restates in its entirety the Agreement of Limited
Partnership of Encore Energy Partners LP dated as of February 13, 2007, as amended and restated by
the First Amended and Restated Agreement of Limited Partnership of Encore Energy Partners LP dated
as of May 10, 2007. In consideration of the covenants, conditions and agreements contained herein,
the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

     The following definitions shall be for all purposes, unless otherwise clearly indicated to the
contrary, applied to the terms used in this Agreement.

     “Additional Book Basis” means the portion of any remaining Carrying Value of an Adjusted
Property that is attributable to positive adjustments made to such Carrying Value as a result of
Book-Up Events. For purposes of determining the extent that Carrying Value constitutes Additional
Book Basis:

          (a) Any negative adjustment made to the Carrying Value of an Adjusted Property as a result of
either a Book-Down Event or a Book-Up Event shall first be deemed to offset or decrease that
portion of the Carrying Value of such Adjusted Property that is attributable to any prior positive
adjustments made thereto pursuant to a Book-Up Event or Book-Down Event.

          (b) If Carrying Value that constitutes Additional Book Basis is reduced as a result of a
Book-Down Event and the Carrying Value of other property is increased as a result of such Book-Down
Event, an allocable portion of any such increase in Carrying Value shall be treated as Additional
Book Basis; provided, that the amount treated as Additional Book Basis pursuant hereto as a result
of such Book-Down Event shall not exceed the amount by which the Aggregate Remaining Net Positive
Adjustments after such Book-Down Event exceeds the remaining Additional Book Basis attributable to
all of the Partnership’s Adjusted Property after such Book-Down Event (determined without regard to
the application of this clause (b) to such Book-Down Event).

     “Additional Book Basis Derivative Items” means any Book Basis Derivative Items that are
computed with reference to Additional Book Basis. To the extent that the Additional Book Basis attributable to all of the Partnership’s Adjusted Property as of the beginning of any
taxable period exceeds the Aggregate Remaining Net Positive Adjustments as of the beginning of such

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

 

 

period (the “Excess Additional Book Basis”), the Additional Book Basis Derivative Items for
such period shall be reduced by the amount that bears the same ratio to the amount of Additional
Book Basis Derivative Items determined without regard to this sentence as the Excess Additional
Book Basis bears to the Additional Book Basis as of the beginning of such period.

     “Additional Limited Partner” means a Person admitted to the Partnership as a Limited Partner
pursuant to Section 10.4 and who is shown as such on the books and records of the Partnership.

     “Adjusted Capital Account” means the Capital Account maintained for each Partner as of the end
of each fiscal year of the Partnership, (a) increased by any amounts that such Partner is obligated
to restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is
deemed obligated to restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and
(b) decreased by (i) the amount of all deductions in respect of depletion that, as of the end of
such fiscal year, are reasonably expected to be made to such Partner’s Capital Account in respect
of the oil and gas properties of the Partnership, (ii) the amount of all losses and deductions
that, as of the end of such fiscal year, are reasonably expected to be allocated to such Partner in
subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation Section
1.751-1(b)(2)(ii), and (iii) the amount of all distributions that, as of the end of such fiscal
year, are reasonably expected to be made to such Partner in subsequent years in accordance with the
terms of this Agreement or otherwise to the extent they exceed offsetting increases to such
Partner’s Capital Account that are reasonably expected to occur during (or prior to) the year in
which such distributions are reasonably expected to be made (other than increases as a result of a
minimum gain chargeback pursuant to Section 6.1(d)(i) or 6.1(d)(ii)). The foregoing definition of
Adjusted Capital Account is intended to comply with the provisions of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The “Adjusted Capital
Account” of a Partner in respect of the General Partner Interest, a Common Unit, a Management
Incentive Unit or any other Partnership Interest shall be the amount that such Adjusted Capital
Account would be if such General Partner Interest, Common Unit, Management Incentive Unit or other
Partnership Interest were the only interest in the Partnership held by such Partner from and after
the date on which such General Partner Interest, Common Unit, Management Incentive Unit or other
Partnership Interest was first issued.

     “Adjusted Property” means any property the Carrying Value of which has been adjusted pursuant
to Section 5.5(d)(i) or 5.5(d)(ii).

     “Affiliate” means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under common control with, the
Person in question. As used herein, the term “control” means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.

     “Aggregate Remaining Net Positive Adjustments” means, as of the end of any taxable period, the
sum of the Remaining Net Positive Adjustments of all the Partners.

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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     “Agreed Allocation” means any allocation, other than a Required Allocation, of an item of
income, gain, loss or deduction pursuant to the provisions of Section 6.1, including a Curative
Allocation (if appropriate to the context in which the term “Agreed Allocation” is used).

     “Agreed Value” of any Contributed Property means the fair market value of such property or
other consideration at the time of contribution as determined by the General Partner. The General
Partner shall use such method as it determines to be appropriate to allocate the aggregate Agreed
Value of Contributed Properties contributed to the Partnership in a single or integrated
transaction among each separate property on a basis proportional to the fair market value of each
Contributed Property.

     “Agreement” means this Second Amended and Restated Agreement of Limited Partnership of Encore
Energy Partners LP, as it may be amended, supplemented or restated from time to time.

     “Amended and Restated Administrative Services Agreement” means the Amended and Restated
Administrative Services Agreement, dated as of September 17, 2007, among the General Partner, the
Partnership, the Operating Company and Encore Operating, L.P., as it may be amended, supplemented
or restated from time to time.

     “Anniversary Date” means the first anniversary of the Conversion Date of a Management
Incentive Unit.

     “Assignee” means a Person to whom one or more Limited Partner Interests have been transferred
in a manner permitted under this Agreement and who has executed and delivered a Transfer
Application, including a Eligible Holder Certification, as required by this Agreement, but who has
not been admitted as a Substituted Limited Partner.

     “Associate” means, when used to indicate a relationship with any Person, (a) any corporation
or organization of which such Person is a director, officer or partner or is, directly or
indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any
trust or other estate in which such Person has at least a 20% beneficial interest or as to which
such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of
such Person, or any relative of such spouse, who has the same principal residence as such Person.

     “Available Cash” means, with respect to any Quarter ending prior to the Liquidation Date:

          (a) all cash and cash equivalents of the Partnership Group on hand on the date of
determination of Available Cash with respect to such Quarter, less

          (b) the amount of any cash reserves established by the General Partner to (i) provide for the
proper conduct of the business of the Partnership Group (including reserves for future capital
expenditures and for anticipated future credit needs of the Partnership Group) subsequent to such
Quarter, (ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt
instrument or other agreement or obligation to which any Group

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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Member is a party or by which it is bound or its assets are subject or (iii) provide funds for
distributions under Section 6.3 in respect of any one or more of the next four Quarters; provided,
however, that disbursements made by a Group Member or cash reserves established, increased or
reduced after the end of such Quarter but on or before the date of determination of Available Cash
with respect to such Quarter shall be deemed to have been made, established, increased or reduced,
for purposes of determining Available Cash, within such Quarter if the General Partner so
determines.

     Notwithstanding the foregoing, “Available Cash” with respect to the Quarter in which the
Liquidation Date occurs and any subsequent Quarter shall equal zero.

     “Board of Directors” means the board of directors or managers, as applicable, of a corporation
or limited liability company or the board of directors or board of managers, as applicable, of the
general partner of a limited partnership.

     “Book Basis Derivative Items” means any item of income, deduction, gain, loss, Simulated
Depletion, Simulated Gain or Simulated Loss included in the determination of Net Income or Net Loss
that is computed with reference to the Carrying Value of an Adjusted Property (e.g., depreciation,
Simulated Depletion, or gain, loss, Simulated Gain or Simulated Loss, with respect to an Adjusted
Property).

     “Book-Down Event” means an event that triggers a negative adjustment to the Capital Accounts
of the Partners pursuant to Section 5.5(d).

     “Book-Tax Disparity” means with respect to any item of Contributed Property or Adjusted
Property, as of the date of any determination, the difference between the Carrying Value of such
Contributed Property or Adjusted Property and the adjusted basis thereof for federal income tax
purposes as of such date. A Partner’s share of the Partnership’s Book-Tax Disparities in all of its
Contributed Property and Adjusted Property will be reflected by the difference between such
Partner’s Capital Account balance as maintained pursuant to Section 5.5 and the hypothetical
balance of such Partner’s Capital Account computed as if it had been maintained strictly in
accordance with federal income tax accounting principles.

     “Book-Up Event” means an event that triggers a positive adjustment to the Capital Accounts of
the Partners pursuant to Section 5.5(d).

     “Business Day” means Monday through Friday of each week, except that a legal holiday
recognized as such by the government of the United States of America or the States of New York or
Texas shall not be regarded as a Business Day.

     “Capital Account” means the capital account maintained for a Partner pursuant to Section 5.5.
The “Capital Account” of a Partner in respect of a General Partner Interest, a Common Unit, a
Management Incentive Unit or any other Partnership Interest shall be the amount that such Capital
Account would be if such General Partner Interest, Common Unit, Management Incentive Unit or other
Partnership Interest were the only interest in the Partnership held by such Partner from and after
the date on which such General Partner Interest, Common Unit, Management Incentive Unit or other
Partnership Interest was first issued.

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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     “Capital Contribution” means any cash, cash equivalents or the Net Agreed Value of
Contributed Property (which, in the case of a Capital Contribution by the General Partner pursuant
to Section 5.2(b) may include Units (other than General Partner Units) owned by the General
Partner) that a Partner contributes to the Partnership pursuant to this Agreement.

     “Carrying Value” means (a) with respect to a Contributed Property, the Agreed Value of such
property reduced (but not below zero) by all depreciation, depletion (including Simulated
Depletion), amortization and cost recovery deductions charged to the Partners’ and Assignees’
Capital Accounts in respect of such Contributed Property, and (b) with respect to any other
Partnership property, the adjusted basis of such property for federal income tax purposes, all as
of the time of determination. The Carrying Value of any property shall be adjusted from time to
time in accordance with Sections 5.5(d)(i) and 5.5(d)(ii) and to reflect changes, additions or
other adjustments to the Carrying Value for dispositions and acquisitions of Partnership
properties, as deemed appropriate by the General Partner.

     “Cause” means a court of competent jurisdiction has entered a final, non-appealable judgment
finding the General Partner liable for actual fraud or willful misconduct in its capacity as a
general partner of the Partnership.

     “Certificate” means (a) a certificate (i) substantially in the form of Exhibit A to this
Agreement, (ii) issued in global form in accordance with the rules and regulations of the
Depositary or (iii) in such other form as may be adopted by the General Partner, issued by the
Partnership evidencing ownership of one or more Common Units or (b) a certificate, in such form as
may be adopted by the General Partner, issued by the Partnership evidencing ownership of one or
more other Partnership Securities.

     “Certificate of Limited Partnership” means the Certificate of Limited Partnership of the
Partnership filed with the Secretary of State of the State of Delaware as referenced in Section
7.2, as such Certificate of Limited Partnership may be amended, supplemented or restated from time
to time.

     “Change-in-Control” means (a) a “Change in Control” as defined in Parent’s 2000 Incentive
Stock Plan, as such plan may be amended, supplemented or restated from time to time, (b) any
Person or group, other than Parent or its Affiliates, becomes the beneficial owner, by way of
merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the
combined voting power of the equity interests in the General Partner or the Partnership, (c) the
Limited Partners approve, in one or a series of transactions, a plan of complete liquidation of the
Partnership, (d) the sale or other disposition by either the General Partner or the Partnership of
all or substantially all of its assets in one or more transactions to any person other than the
General Partner or an Affiliate of the General Partner, (e) a transaction resulting in a Person
other than Encore Energy Partners GP LLC or one of its Affiliates being the general partner of the
Partnership, or (f) a transaction resulting in the general partner of the Partnership ceasing to be
an Affiliate of Parent.

     “claim” (as used in Section 7.12(c)) has the meaning assigned to such term in Section 7.12(c).

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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     “Closing Date” means the first date on which Common Units are sold by the Partnership to
the Underwriters pursuant to the provisions of the Underwriting Agreement.

     “Closing Price” means, in respect of any class of Limited Partner Interests, as of the date of
determination, the last sale price on such day, regular way, or in case no such sale takes place on
such day, the average of the closing bid and asked prices on such day, regular way, as reported in
the principal consolidated transaction reporting system with respect to securities listed on the
principal National Securities Exchange (other than the NASDAQ Global Select Market) on which the
respective Limited Partner Interests are listed or admitted to trading or, if such Limited Partner
Interests are not listed or admitted to trading on any National Securities Exchange (other than the
NASDAQ Global Select Market), the last quoted price on such day or, if not so quoted, the average
of the high bid and low asked prices on such day in the over-the-counter market, as reported by the
NASDAQ Global Select Market or such other system then in use, or, if on any such day such Limited
Partner Interests of such class are not quoted by any such organization, the average of the closing
bid and asked prices on such day as furnished by a professional market maker making a market in
such Limited Partner Interests of such class selected by the General Partner, or if on any such day
no market maker is making a market in such Limited Partner Interests of such class, the fair value
of such Limited Partner Interests on such day as determined by the General Partner.

     “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time.
Any reference herein to a specific section or sections of the Code shall be deemed to include a
reference to any corresponding provision of any successor law.

     “Combined Interest” has the meaning assigned to such term in Section 11.3(a).

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

     “Common Unit” means a Partnership Interest representing a fractional part of the Partnership
Interests of all Limited Partners and Assignees, and having the rights and obligations specified
with respect to Common Units in this Agreement.

     “Common Unit Equivalents” means the number of Common Units which a Management Incentive Unit
is considered to represent under Section 5.10(d) or, if applicable, under Section 6.3(d).

     “Conflicts Committee” means a committee of the Board of Directors of the General Partner
composed entirely of two or more directors who are not (a) security holders, officers or employees
of the General Partner, (b) officers, directors or employees of any Affiliate of the General
Partner or (c) holders of any ownership interest in the Partnership Group other than Common Units
and who also meet the independence standards required of directors who serve on an audit committee
of a board of directors established by the Securities Exchange Act and the rules and regulations of
the Commission thereunder and by the National Securities Exchange on which the Common Units are
listed or admitted to trading.

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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     “Continuous Employment” means continued employment by Parent (or any successor), any
subsidiary of Parent (or any successor), the Partnership, the General Partner or any Affiliate of
the Partnership or the General Partner.

     “Contributed Property” means each property or other asset, in such form as may be permitted by
the Delaware Act, but excluding cash, contributed to the Partnership. Once the Carrying Value of a
Contributed Property is adjusted pursuant to Section 5.5(d), such property shall no longer
constitute a Contributed Property, but shall be deemed an Adjusted Property.

     “Contribution Agreement” means that certain Contribution, Conveyance and Assumption Agreement,
dated as of the Closing Date, among the General Partner, the Partnership, the Operating Company and
certain other parties, together with the additional conveyance documents and instruments
contemplated or referenced thereunder, as such may be amended, supplemented or restated from time
to time.

     “Conversion Date” means the date that a Management Incentive Unit is converted into Common
Units pursuant to Section 5.10(e).

     “Conversion Notice” has the meaning assigned to such term in Section 5.10.

     “Curative Allocation” means any allocation of an item of income, gain, deduction, loss or
credit pursuant to the provisions of Section 6.1(d)(xi).

     “Current Market Price” means, in respect of any class of Limited Partner Interests, as of the
date of determination, the average of the daily Closing Prices per Limited Partner Interest of such
class for the 20 consecutive Trading Days immediately prior to such date.

     “Delaware Act” means the Delaware Revised Uniform Limited Partnership Act, 6 Del C. Section
17-101, et seq., as amended, supplemented or restated from time to time, and any successor to such
statute.

     “Departing General Partner” means a former General Partner from and after the effective date
of any withdrawal or removal of such former General Partner pursuant to Section 11.1 or 11.2.

     “Depositary” means, with respect to any Units issued in global form, The Depository Trust
Company and its successors and permitted assigns.

     “Economic Risk of Loss” has the meaning set forth in Treasury Regulation Section 1.752-2(a).

     “Eligible Holder” means a person or entity qualified to hold an interest in oil and gas leases
on federal lands. As of the date hereof, Eligible Holder means: (1) a citizen of the United States;
(2) a corporation organized under the laws of the United States or of any state thereof; (3) a
public body, including a municipality; or (4) an association of United States citizens, such as a
partnership or limited liability company, organized under the laws of the United States or of any
state thereof, but only if such association does not have any direct or indirect foreign ownership,
other than foreign ownership of stock in a parent corporation organized under the laws of the

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United States or of any state thereof. For the avoidance of doubt, onshore mineral leases or
any direct or indirect interest therein may be acquired and held by aliens only through stock
ownership, holding or control in a corporation organized under the laws of the United States or of
any state thereof.

     “Eligible Holder Certification” means a properly completed certificate in such form as may be
specified by the General Partner by which an Assignee or a Limited Partner certifies that he (and
if he is a nominee holding for the account of another Person, that to the best of his knowledge
such other Person) is an Eligible Holder.

     “Excess Allocations” has the meaning assigned to such term in Section 6.1(c)(i)(B).

     “Excess Available Cash” has the meaning assigned to such term in Section 6.3(d).

     “Executive” means any of I. Jon Brumley, Jon S. Brumley, Robert C. Reeves, L. Ben Nivens or
John W. Arms or their Permitted Transferees.

     “Event of Withdrawal” has the meaning assigned to such term in Section 11.1(a).

     “Fifth Target Distribution” has the meaning assigned to such term in Section 5.10(d)(v).

     “First Conversion Milestone” has the meaning assigned to such term in Section 5.10(e)(i).

     “First Target Distribution” has the meaning assigned to such term in Section 5.10(d)(i).

     “Fourth Conversion Milestone” has the meaning assigned to such term in Section 5.10(e)(i).

     “Fourth Target Distribution” has the meaning assigned to such term in Section 5.10(d)(iv).

     “General Partner” means Encore Energy Partners GP LLC, a Delaware limited liability company,
and its successors and permitted assigns that are admitted to the Partnership as general partner of
the Partnership, in its capacity as general partner of the Partnership (except as the context
otherwise requires).

     “General Partner Interest” means the ownership interest of the General Partner in the
Partnership (in its capacity as a general partner without reference to any Limited Partner Interest
held by it), which is evidenced by General Partner Units, and includes any and all benefits to
which the General Partner is entitled as provided in this Agreement, together with all obligations
of the General Partner to comply with the terms and provisions of this Agreement.

     “General Partner Unit” means a fractional part of the General Partner Interest having the
rights and obligations specified with respect to the General Partner Interest. A General Partner
Unit is not a Unit.

     “Grantee” has the meaning assigned to such term in Section 5.10(f)(i).

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     “Group” means a Person that with or through any of its Affiliates or Associates has any
agreement, contract, arrangement, understanding or relationship for the purpose of acquiring,
holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in
response to a proxy or consent solicitation made to 10 or more Persons), exercising investment
power or disposing of any Partnership Interests with any other Person that beneficially owns, or
whose Affiliates or Associates beneficially own, directly or indirectly, Partnership Interests.

     “Group Member” means a member of the Partnership Group.

     “Group Member Agreement” means the partnership agreement of any Group Member, other than the
Partnership, that is a limited or general partnership, the limited liability company agreement of
any Group Member that is a limited liability company, the certificate of incorporation and bylaws
or similar organizational documents of any Group Member that is a corporation, the joint venture
agreement or similar governing document of any Group Member that is a joint venture and the
governing or organizational or similar documents of any other Group Member that is a Person other
than a limited or general partnership, limited liability company, corporation or joint venture, as
such may be amended, supplemented or restated from time to time.

     “Holder” as used in Section 7.12, has the meaning assigned to such term in Section 7.12(a).

     “Indemnified Persons” has the meaning assigned to such term in Section 7.12(c).

     “Indemnitee” means (a) the General Partner, (b) any Departing General Partner, (c) any Person
who is or was an Affiliate of the General Partner or any Departing General Partner, (d) any Person
who is or was a member, partner, director, officer, fiduciary or trustee of any Group Member, the
General Partner or any Departing General Partner or any Affiliate of any Group Member, the General
Partner or any Departing General Partner, (e) any Person who is or was serving at the request of
the General Partner or any Departing General Partner or any Affiliate of the General Partner or any
Departing General Partner as an officer, director, member, partner, fiduciary or trustee of another
Person; provided that a Person shall not be an Indemnitee by reason of providing, on a
fee-for-services basis, trustee, fiduciary or custodial services, and (f) any Person the General
Partner designates as an “Indemnitee” for purposes of this Agreement.

     “Initial Common Units” means the Common Units sold in the Initial Offering.

     “Initial Limited Partners” means the Organizational Limited Partner, I. Jon Brumley, Jon S.
Brumley, Robert C. Reeves, L. Ben Nivens, John W. Arms, Encore Operating, L.P., a Texas limited
partnership, and the Underwriters, in each case upon being admitted to the Partnership in
accordance with Section 10.1.

     “Initial Offering” means the initial offering and sale of Common Units to the public, as
described in the Registration Statement.

     “Interim Closing Date” means May 10, 2007.

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     “Issuance Date” means any date following the Conversion Date and prior to the Anniversary Date
on which the Partnership issues additional Partnership Securities.

     “Issue Price” means the price at which a Unit is purchased from the Partnership, net of any
sales commission or underwriting discount charged to the Partnership.

     “Limited Partner” means, unless the context otherwise requires, (a) the Organizational Limited
Partner, each Initial Limited Partner, each Substituted Limited Partner, each Additional Limited
Partner and any Departing General Partner upon the change of its status from General Partner to
Limited Partner pursuant to Section 11.3, in each case, in such Person’s capacity as a limited
partner of the Partnership; provided, however, that when the term “Limited Partner” is used herein
in the context of any vote or other approval, including Articles XIII and XIV, such term shall not,
solely for such purpose, include any holder of a Management Incentive Unit (solely with respect to
its Management Incentive Units and not with respect to any other Limited Partner Interest held by
such Person) except as may otherwise be required by law or (b) solely for purposes of Articles V,
VI, VII, IX and XII, each Assignee.

     “Limited Partner Interest” means the ownership interest of a Limited Partner or Assignee in
the Partnership, which may be evidenced by Common Units, Management Incentive Units, or other
Partnership Securities or a combination thereof or interest therein, and includes any and all
benefits to which such Limited Partner or Assignee is entitled as provided in this Agreement,
together with all obligations of such Limited Partner or Assignee to comply with the terms and
provisions of this Agreement; provided, however, that when the term “Limited Partner Interest” is
used herein in the context of any vote or other approval, including Articles XIII and XIV, such
term shall not, solely for such purpose, include a Management Incentive Unit except as may
otherwise be required by law.

     “Liquidation Date” means (a) in the case of an event giving rise to the dissolution of the
Partnership of the type described in clauses (a) and (b) of the first sentence of Section 12.2, the
date on which the applicable time period during which the holders of Outstanding Units have the
right to elect to continue the business of the Partnership has expired without such an election
being made, and (b) in the case of any other event giving rise to the dissolution of the
Partnership, the date on which such event occurs.

     “Liquidator” means one or more Persons selected by the General Partner to perform the
functions described in Section 12.4 as liquidating trustee of the Partnership within the meaning of
the Delaware Act.

     “Management Incentive Unit” means a Partnership Security representing a fractional part of the
Partnership Interests of all Limited Partners and having the rights and obligations specified with
respect to Management Incentive Units in this Agreement.

     “Merger Agreement” has the meaning assigned to such term in Section 14.1.

     “MIU Allocation Limit” has the meaning assigned to such term in Section 6.1(c)(i)(B).

     “MIU Conversion Limit” has the meaning assigned to such term in Section 5.10(e).

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     “MIU Distribution Limit” has the meaning assigned to such term in Section 6.3(d).

     “MIU Limits” has the meaning assigned to such term in Section 5.10(i).

     “National Securities Exchange” means an exchange registered with the Commission under Section
6(a) of the Securities Exchange Act, and any successor to such statute.

     “Net Agreed Value” means, (a) in the case of any Contributed Property, the Agreed Value of
such property reduced by any liabilities either assumed by the Partnership upon such contribution
or to which such property is subject when contributed, and (b) in the case of any property
distributed to a Partner or Assignee by the Partnership, the Partnership’s Carrying Value of such
property (as adjusted pursuant to Section 5.5(d)(ii)) at the time such property is distributed,
reduced by any indebtedness either assumed by such Partner or Assignee upon such distribution or to
which such property is subject at the time of distribution, in either case, as determined under
Section 752 of the Code.

     “Net Income” means, for any taxable year, the excess, if any, of the Partnership’s items of
income and gain (other than those items taken into account in the computation of Net Termination
Gain or Net Termination Loss) for such taxable year over the Partnership’s items of loss and
deduction (other than those items taken into account in the computation of Net Termination Gain or
Net Termination Loss) for such taxable year. The items included in the calculation of Net Income
shall be determined in accordance with Section 5.5(b) and shall include Simulated Gains, Simulated
Losses and Simulated Depletion, but shall not include any items specially allocated under Section
6.1(d); provided, that the determination of the items that have been specially allocated under
Section 6.1(d) shall be made as if Section 6.1(d)(xii) were not in this Agreement.

     “Net Loss” means, for any taxable year, the excess, if any, of the Partnership’s items of loss
and deduction (other than those items taken into account in the computation of Net Termination Gain
or Net Termination Loss) for such taxable year over the Partnership’s items of income and gain
(other than those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation of Net Loss shall be
determined in accordance with Section 5.5(b) and shall include Simulated Gains, Simulated Losses
and Simulated Depletion, but shall not include any items specially allocated under Section 6.1(d);
provided, that the determination of the items that have been specially allocated under Section
6.1(d) shall be made as if Section 6.1(d)(xii) were not in this Agreement.

     “Net Positive Adjustments” means, with respect to any Partner, the excess, if any, of the
total positive adjustments over the total negative adjustments made to the Capital Account of such
Partner pursuant to Book-Up Events and Book-Down Events.

     “Net Termination Gain” means, for any taxable year, the sum, if positive, of all items of
income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items
included in the determination of Net Termination Gain shall be determined in accordance with Section 5.5(b) and shall include Simulated Gains, Simulated Losses and Simulated

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Depletion, but shall not include any items of income, gain or loss specially allocated under
Section 6.1(d).

     “Net Termination Loss” means, for any taxable year, the sum, if negative, of all items of
income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items
included in the determination of Net Termination Loss shall be determined in accordance with
Section 5.5(b) and shall include Simulated Gains, Simulated Losses and Simulated Depletion, but
shall not include any items of income, gain or loss specially allocated under Section 6.1(d).

     “Non-Eligible Holder” means a Person whom the General Partner has determined does not
constitute an Eligible Holder and as to whose Partnership Interest the General Partner has become
the Substituted Limited Partner, pursuant to Section 4.8.

     “Non-Recourse Built-in Gain” means with respect to any Contributed Properties or Adjusted
Properties that are subject to a mortgage or pledge securing a Non-Recourse Liability, the amount
of any taxable gain that would be allocated to the Partners pursuant to Sections 6.2(d)(i)(A),
6.2(d)(ii)(A) and 6.2(d)(iii) if such properties were disposed of in a taxable transaction in full
satisfaction of such liabilities and for no other consideration.

     “Non-Recourse Deductions” means any and all items of loss, deduction or expenditure (including
any expenditure described in Section 705(a)(2)(B) of the Code), Simulated Depletion or Simulated
Loss that, in accordance with the principles of Treasury Regulation Section 1.704-2(b), are
attributable to a Non-Recourse Liability.

     “Non-Recourse Liability” has the meaning set forth in Treasury Regulation Section
1.752-1(a)(2).

     “Notice of Election to Purchase” has the meaning assigned to such term in Section 15.1(b).

     “Operating Company” means Encore Energy Partners Operating LLC, a Delaware limited liability
company, and any successors thereto.

     “Opinion of Counsel” means a written opinion of counsel (who may be regular counsel to the
Partnership or the General Partner or any of its Affiliates) acceptable to the General Partner.

     “Option Closing Date” means the date or dates on which any Common Units are sold by the
Partnership to the Underwriters upon exercise of the Over-Allotment Option.

     “Organizational Limited Partner” means Encore Partners LP Holdings LLC, a Delaware limited
liability company, in its capacity as the organizational limited partner of the Partnership
pursuant to this Agreement.

     “Outstanding” means, with respect to Partnership Securities, all Partnership Securities that
are issued by the Partnership and reflected as outstanding on the Partnership’s books and records
as of the date of determination; provided, however, that if at any time any Person or Group (other than the General Partner or its Affiliates) beneficially owns 20% or more of the

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Outstanding Partnership Securities of any class then Outstanding, all Partnership Securities owned
by such Person or Group shall not be voted on any matter and shall not be considered to be
Outstanding when sending notices of a meeting of Limited Partners to vote on any matter (unless
otherwise required by law), calculating required votes, determining the presence of a quorum or for
other similar purposes under this Agreement, except that Units so owned shall be considered to be
Outstanding for purposes of Section 11.1(b)(iv) (such Units shall not, however, be treated as a
separate class of Partnership Securities for purposes of this Agreement); provided, further, that
the foregoing limitation shall not apply to (i) any Person or Group who acquired 20% or more of the
Outstanding Partnership Securities of any class then Outstanding directly from the General Partner
or its Affiliates, (ii) any Person or Group who acquired 20% or more of the Outstanding Partnership
Securities of any class then Outstanding directly or indirectly from a Person or Group described in
clause (i) provided that the General Partner shall have notified such Person or Group in writing
that such limitation shall not apply, or (iii) any Person or Group who acquired 20% or more of any
Partnership Securities issued by the Partnership with the prior approval of the Board of Directors
of the General Partner.

     “Over-Allotment Option” means the over-allotment option granted to the Underwriters by the
Partnership pursuant to the Underwriting Agreement.

     “Parent” means Encore Acquisition Company and its successors and permitted assigns.

     “Partner Non-Recourse Debt” has the meaning set forth in Treasury Regulation Section
1.704-2(b)(4).

     “Partner Non-Recourse Debt Minimum Gain” has the meaning set forth in Treasury Regulation
Section 1.704-2(i)(2).

     “Partner Non-Recourse Deductions” means any and all items of loss, deduction or expenditure
(including any expenditure described in Section 705(a)(2)(B) of the Code), Simulated Depletion or
Simulated Loss that, in accordance with the principles of Treasury Regulation Section 1.704-2(i),
are attributable to a Partner Non-Recourse Debt.

     “Partners” means the General Partner and the Limited Partners.

     “Partnership” means Encore Energy Partners LP, a Delaware limited partnership.

     “Partnership Group” means the Partnership and its Subsidiaries treated as a single
consolidated entity.

     “Partnership Interest” means an interest in the Partnership, which shall include the General
Partner Interest and Limited Partner Interests.

     “Partnership Minimum Gain” means that amount determined in accordance with the principles of
Treasury Regulation Section 1.704-2(d).

     “Partnership Security” means any class or series of equity interest in the Partnership (but
excluding any options, rights, warrants and appreciation rights relating to an equity interest in
the Partnership), including Common Units, Management Incentive Units and General Partner Units.

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     “Percentage Interest” means as of any date of determination (a) as to the General Partner (in
its capacity as General Partner without reference to any Limited Partner Interests held by it) with
respect to General Partner Units and as to any Unitholder or Assignee with respect to Common Units,
the product obtained by multiplying (i) 100% less the percentage applicable to clause (b) below by
(ii) the quotient obtained by dividing (A) the number of General Partner Units held by the General
Partner, the number of Common Units held by such Unitholder or Assignee, or the number of Common
Unit Equivalents held or, if the provisions of Section 6.3(d) apply, deemed to be held by such
Unitholder or Assignee, as the case may be, by (B) the total number of Outstanding Common Units,
the total number of Outstanding Common Unit Equivalents and General Partner Units, and (b) as to
the holders of other Partnership Securities issued by the Partnership in accordance with Section
5.6, the percentage established as a part of such issuance; provided, that with respect to the
calculations in Section 5.10(e)(vi) and Section 5.10(e)(vii), in-the-money options, rights,
warrants and appreciation rights relating to Partnership Securities shall be deemed to be
Outstanding in the form of the associated Partnership Securities to the extent vested.

     “Permitted Transferee” means (i) the Partnership and (ii) an Executive’s Relatives, any trust
of which there are no principal beneficiaries other than such Executive or one or more of such
Executive’s Relatives, or a corporation, partnership, limited liability company or other Person of
which there are no owners other than such Executive, one or more of such Executive’s Relatives or
another entity of which there are no other owners other than such Executive or one or more of such
Executive’s Relatives (provided that each such transferee agrees to be bound by the terms of this
Agreement as if it were an original party hereto and further agrees that it shall not thereafter
transfer such Management Incentive Units to any Person to whom such transferor would not be
permitted to transfer such Management Incentive Units pursuant to the terms of this Agreement).

     “Person” means an individual or a corporation, firm, limited liability company, partnership,
joint venture, trust, unincorporated organization, association, government agency or political
subdivision thereof or other entity.

     “Plan of Conversion” has the meaning assigned to such term in Section 14.1.

     “Pro Rata” means (a) when used with respect to Units or any class thereof, apportioned equally
among all designated Units in accordance with their relative Percentage Interests, (b) when used
with respect to Partners and Assignees or Record Holders, apportioned among all Partners and
Assignees or Record Holders in accordance with their relative Percentage Interests, and (c) when
used with respect to holders of Management Incentive Units, apportioned equally among all holders
of Management Incentive Units in accordance with the relative number or percentage of Management
Incentive Units held by each such holder.

     “Purchase Date” means the date determined by the General Partner as the date for purchase of
all Outstanding Limited Partner Interests of a certain class (other than Limited Partner Interests
owned by the General Partner and its Affiliates) pursuant to Article XV.

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     “Quarter” means, unless the context requires otherwise, a fiscal quarter of the Partnership,
or, with respect to the fiscal quarter of the Partnership which includes the Closing Date, the
portion of such fiscal quarter after the Closing Date.

     “Recapture Income” means any gain recognized by the Partnership (computed without regard to
any adjustment required by Section 734 or Section 743 of the Code) upon the disposition of any
property or asset of the Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such property or asset.

     “Record Date” means the date established by the General Partner or otherwise in accordance
with this Agreement for determining (a) the identity of the Record Holders entitled to notice of,
or to vote at, any meeting of Limited Partners or entitled to vote by ballot or give approval of
Partnership action in writing without a meeting or entitled to exercise rights in respect of any
lawful action of Limited Partners or (b) the identity of Record Holders entitled to receive any
report or distribution or to participate in any offer.

     “Record Holder” means (a) the Person in whose name a Common Unit is registered on the books of
the Transfer Agent as of the opening of business on a particular Business Day, or (b) with respect
to other Partnership Interests, the Person in whose name any such other Partnership Interest is
registered on the books that the General Partner has caused to be kept as of the opening of
business on such Business Day.

     “Redeemable Interests” means any Partnership Interests for which a redemption notice has been
given, and has not been withdrawn, pursuant to Section 4.9.

     “Registration Statement” means the Registration Statement on Form S-1 (Registration No.
333-142847) as it has been or as it may be amended or supplemented from time to time, filed by the
Partnership with the Commission under the Securities Act to register the offering and sale of the
Common Units in the Initial Offering.

     “Relatives” means, collectively, an Executive’s spouse, parents, children, grandchildren,
siblings, mothers and fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law.

     “Remaining Net Positive Adjustments” means as of the end of any taxable period, (a) with
respect to the Unitholders holding Common Units, the excess of (i) the Net Positive Adjustments of
the Unitholders holding Common Units as of the end of such period over (ii) the sum of those
Partners’ Share of Additional Book Basis Derivative Items for each prior taxable period, (b) with
respect to the General Partner (as holder of the General Partner Interest), the excess of (i) the
Net Positive Adjustments of the General Partner as of the end of such period over (ii) the sum of
the General Partner’s Share of Additional Book Basis Derivative Items with respect to the General
Partner Interest for each prior taxable period, and (c) with respect to the holders of Management
Incentive Units, the excess of (a) the Net Positive Adjustments of the holders of Management Incentive Units as of the end of such period over (b) the sum of the Share of Additional Book
Basis Derivative Items of the holders of the Management Incentive Units for each prior taxable
period.

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     “Required Allocations” means (a) any limitation imposed on any allocation of Net Losses
or Net Termination Losses under Section 6.1(b) or 6.1(c)(ii) and (b) any allocation of an item of
income, gain, loss, deduction, Simulated Depletion or Simulated Loss pursuant to Section 6.1(d)(i),
6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or 6.1(d)(ix).

     “Residual Gain” or “Residual Loss” means any item of gain or loss, as the case may be, of the
Partnership recognized for federal income tax purposes resulting from a sale, exchange or other
disposition of a Contributed Property or Adjusted Property, to the extent such item of gain or loss
or Simulated Depletion or Simulated Loss is not allocated pursuant to Section 6.2(d)(i)(A) or
6.2(d)(ii)(A), respectively, to eliminate Book-Tax Disparities.

     “Second Conversion Milestone” has the meaning assigned to such term in Section 5.10(e)(i).

     “Second Target Distribution” has the meaning assigned to such term in Section 5.10(d)(ii).

     “Securities Act” means the Securities Act of 1933, as amended, supplemented or restated from
time to time and any successor to such statute.

     “Securities Exchange Act” means the Securities Exchange Act of 1934, as amended, supplemented
or restated from time to time and any successor to such statute.

     “Seventh Target Distribution” has the meaning assigned to such term in Section 5.10(d)(vii).

     “Share of Additional Book Basis Derivative Items” means in connection with any allocation of
Additional Book Basis Derivative Items for any taxable period, (a) with respect to the Unitholders
holding Common Units, the amount that bears the same ratio to such Additional Book Basis Derivative
Items as the Unitholders’ Remaining Net Positive Adjustments as of the end of such period bears to
the Aggregate Remaining Net Positive Adjustments as of that time, (b) with respect to the General
Partner (as holder of the General Partner Interest), the amount that bears the same ratio to such
Additional Book Basis Derivative Items as the General Partner’s Remaining Net Positive Adjustments
as of the end of such period bears to the Aggregate Remaining Net Positive Adjustment as of that
time, and (c) with respect to the Partners holding Management Incentive Units, the amount that
bears the same ratio to such Additional Book Basis Derivative Items as the Remaining Net Positive
Adjustments of the Partners holding the Management Incentive Units as of the end of such period
bears to the Aggregate Remaining Net Positive Adjustments as of that time.

     “Sharing Percentage” means as of any date of determination (a) as to the General Partner (in
its capacity as General Partner without reference to any Limited Partner Interests held by it) with
respect to General Partner Units and as to any Unitholder or Assignee with respect to
Common Units, the product obtained by multiplying (i) 100% less the percentage applicable to
clause (b) below by (ii) the quotient obtained by dividing (A) the number of General Partner Units
held by the General Partner or the number of Common Units held by such Unitholder or Assignee, as
the case may be, by (B) the total number of Outstanding Common Units and

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General Partner Units, and (b) as to the holders of other Partnership Securities issued by the Partnership in accordance with
Section 5.6, the percentage established as a part of such issuance. The Management Incentive Units
will be disregarded in the computation of “Sharing Percentage.”

     “Simulated Basis” means the Carrying Value of any oil and gas property (as defined in Section
614 of the Code).

     “Simulated Depletion” means, with respect to an oil and gas property (as defined in Section
614 of the Code), a depletion allowance computed in accordance with federal income tax principles
(as if the Simulated Basis of the property was its adjusted tax basis) and in the manner specified
in Treasury Regulation § 1.704-1(b)(2)(iv)(k)(2). For purposes of computing Simulated Depletion
with respect to any property, the Simulated Basis of such property shall be deemed to be the
Carrying Value of such property, and in no event shall such allowance for Simulated Depletion, in
the aggregate, exceed such Simulated Basis.

     “Simulated Gain” means the excess of the amount realized from the sale or other disposition of
an oil or gas property over the Carrying Value of such property.

     “Simulated Loss” means the excess of the Carrying Value of an oil or gas property over the
amount realized from the sale or other disposition of such property.

     “Sixth Target Distribution” has the meaning assigned to such term in Section 5.10(d)(vi).

     “Special Approval” means approval by a majority of the members of the Conflicts Committee
acting in good faith.

     “Stated Distribution” means $0.35 per Common Unit or such other amount determined by the
Conflicts Committee upon reissuance of a Management Incentive Unit as contemplated by Section
5.10(f)(iii).

     “Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of
the voting power of shares entitled (without regard to the occurrence of any contingency) to vote
in the election of directors or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such
Person or a combination thereof, (b) a partnership (whether general or limited) or limited
liability company in which such Person or a Subsidiary of such Person is, at the date of
determination, a general or limited partner of such partnership or member of such limited liability
company, but only if more than 50% of the partnership interests of such partnership or membership
interests of such limited liability company (considering all of the partnership interests or
membership interests as a single class) is owned, directly or indirectly, at the date of
determination, by such Person, by one or more Subsidiaries of such Person, or a combination
thereof, or (c) any other Person (other than a corporation, a partnership or a limited liability
company) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or
indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii)
the power to elect or direct the election of a majority of the directors or other governing body of
such Person.

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     “Substituted Limited Partner” means a Person who is admitted as a Limited Partner to the
Partnership pursuant to Section 10.2 in place of and with all the rights of a Limited Partner and
who is shown as a Limited Partner on the books and records of the Partnership.

     “Surviving Business Entity” has the meaning assigned to such term in Section 14.2(b)(ii).

     “Target Distribution” means the First Target Distribution, the Second Target Distribution, the
Third Target Distribution, the Fourth Target Distribution, the Fifth Target Distribution, the Sixth
Target Distribution or the Seventh Target Distribution, as the case may be.

     “Third Conversion Milestone” has the meaning assigned to such term in Section 5.10(e)(i).

     “Third Target Distribution” has the meaning assigned to such term in Section 5.10(d)(iii).

     “Trading Day” means, for the purpose of determining the Current Market Price of any class of
Limited Partner Interests, a day on which the principal National Securities Exchange on which such
class of Limited Partner Interests is listed is open for the transaction of business or, if Limited
Partner Interests of a class are not listed on any National Securities Exchange, a day on which
banking institutions in New York City generally are open.

     “transfer” has the meaning assigned to such term in Section 4.4(a).

     “Transfer Agent” means such bank, trust company or other Person (including the General Partner
or one of its Affiliates) as shall be appointed from time to time by the General Partner to act as
registrar and transfer agent for the Common Units; provided, that if no Transfer Agent is
specifically designated for any other Partnership Securities, the General Partner shall act in such
capacity.

     “Transfer Application” means an application and agreement for transfer of Units in the form
set forth on the back of a Certificate or in a form substantially to the same effect in a separate
instrument.

     “Underwriter” means each Person named as an underwriter in Schedule I to the Underwriting
Agreement who purchases Common Units pursuant thereto.

     “Underwriting Agreement” means that certain Underwriting Agreement dated as of September 11,
2007, among the Underwriters, the Partnership, the General Partner, the Operating Company and the
other parties thereto, providing for the purchase of Common Units by the Underwriters.

     “Unit” means a Partnership Security that is designated as a “Unit” and shall include Common
Units and Management Incentive Units but shall not include the General Partner Interest.

     “Unitholders” means the holders of Units.

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     “Unit Majority” means at least a majority of the Outstanding Common Units.

     “Unrealized Gain” attributable to any item of Partnership property means, as of any date of
determination, the excess, if any, of (a) the fair market value of such property as of such date
(as determined under Section 5.5(d)) over (b) the Carrying Value of such property as of such date
(prior to any adjustment to be made pursuant to Section 5.5(d) as of such date).

     “Unrealized Loss” attributable to any item of Partnership property means, as of any date of
determination, the excess, if any, of (a) the Carrying Value of such property as of such date
(prior to any adjustment to be made pursuant to Section 5.5(d) as of such date) over (b) the fair
market value of such property as of such date (as determined under Section 5.5(d)).

     “U.S. GAAP” means United States generally accepted accounting principles consistently applied.

     “Withdrawal Opinion of Counsel” has the meaning assigned to such term in Section 11.1(b).

Section 1.2 Construction.

     Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include
the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and
verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to
Articles and Sections of this Agreement; (c) the terms “include”, “includes”, “including” and words
of like import shall be deemed to be followed by the words “without limitation”; and (d) the terms
“hereof”, “herein” and “hereunder” refer to this Agreement as a whole and not to any particular
provision of this Agreement. The table of contents and headings contained in this Agreement are
for reference purposes only, and shall not affect in any way the meaning or interpretation of this
Agreement.

ARTICLE II

ORGANIZATION

Section 2.1 Formation.

     The General Partner and the Organizational Limited Partners have previously formed the
Partnership as a limited partnership pursuant to the provisions of the Delaware Act and hereby
amend and restate the First Amended and Restated Agreement of Limited Partnership of Encore Energy
Partners LP in its entirety. This amendment and restatement shall become effective on the date of
this Agreement. Except as expressly provided to the contrary in this Agreement, the rights, duties
(including fiduciary duties), liabilities and obligations of the Partners and the administration, dissolution and termination of the Partnership shall be governed by the
Delaware Act. All Partnership Interests shall constitute personal property of the owner thereof for
all purposes.

Section 2.2 Name.

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     The name of the Partnership shall be “Encore Energy Partners LP” The Partnership’s business
may be conducted under any other name or names as determined by the General Partner, including the
name of the General Partner. The words “Limited Partnership,” “LP,” “Ltd.” or similar words or
letters shall be included in the Partnership’s name where necessary for the purpose of complying
with the laws of any jurisdiction that so requires. The General Partner may change the name of the
Partnership at any time and from time to time and shall notify the Limited Partners of such change
in the next regular communication to the Limited Partners.

Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices.

     Unless and until changed by the General Partner, the registered office of the Partnership in
the State of Delaware shall be located at 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801, and the registered agent for service of process on the Partnership in the State of
Delaware at such registered office shall be The Corporation Trust Company. The principal office of
the Partnership shall be located at 777 Main Street, Suite 1400, Fort Worth, Texas 76102 or such
other place as the General Partner may from time to time designate by notice to the Limited
Partners. The Partnership may maintain offices at such other place or places within or outside the
State of Delaware as the General Partner shall determine necessary or appropriate. The address of
the General Partner shall be 777 Main Street, Suite 1400, Fort Worth, Texas 76102 or such other
place as the General Partner may from time to time designate by notice to the Limited Partners.

Section 2.4 Purpose and Business.

     The purpose and nature of the business to be conducted by the Partnership shall be to (a)
engage directly in, or enter into or form, hold and dispose of any corporation, partnership, joint
venture, limited liability company or other arrangement to engage indirectly in, any business
activity that is approved by the General Partner and that lawfully may be conducted by a limited
partnership organized pursuant to the Delaware Act and, in connection therewith, to exercise all of
the rights and powers conferred upon the Partnership pursuant to the agreements relating to such
business activity, and (b) do anything necessary or appropriate to the foregoing, including the
making of capital contributions or loans to a Group Member; provided, however, that the General
Partner shall not cause the Partnership to engage, directly or indirectly, in any business activity
that the General Partner determines would cause the Partnership to be treated as an association
taxable as a corporation or otherwise taxable as an entity for federal income tax purposes. To the
fullest extent permitted by law, the General Partner shall have no duty or obligation to propose or
approve, and may decline to propose or approve, the conduct by the Partnership of any business free
of any fiduciary duty or obligation whatsoever to the Partnership, any Limited Partner or Assignee
and, in declining to so propose or approve, shall not be required to act in good faith or pursuant
to any other standard imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Delaware Act
or any other law, rule or regulation or at equity.

Section 2.5 Powers.

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     The Partnership shall be empowered to do any and all acts and things necessary or appropriate
for the furtherance and accomplishment of the purposes and business described in Section 2.4 and
for the protection and benefit of the Partnership.

Section 2.6 Power of Attorney.

          (a) Each Limited Partner and each Assignee hereby constitutes and appoints the General Partner
and, if a Liquidator shall have been selected pursuant to Section 12.3, the Liquidator (and any
successor to the Liquidator by merger, transfer, assignment, election or otherwise) and each of
their authorized officers and attorneys-in-fact, as the case may be, with full power of
substitution, as his true and lawful agent and attorney-in-fact, with full power and authority in
his name, place and stead, to:

          (i) execute, swear to, acknowledge, deliver, file and record in the appropriate public
offices (A) all certificates, documents and other instruments (including this Agreement and
the Certificate of Limited Partnership and all amendments or restatements hereof or thereof)
that the General Partner or the Liquidator determines to be necessary or appropriate to
form, qualify or continue the existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners have limited liability) in the
State of Delaware and in all other jurisdictions in which the Partnership may conduct
business or own property; (B) all certificates, documents and other instruments that the
General Partner or the Liquidator determines to be necessary or appropriate to reflect, in
accordance with its terms, any amendment, change, modification or restatement of this
Agreement; (C) all certificates, documents and other instruments (including conveyances and
a certificate of cancellation) that the General Partner or the Liquidator determines to be
necessary or appropriate to reflect the dissolution and liquidation of the Partnership
pursuant to the terms of this Agreement; (D) all certificates, documents and other
instruments relating to the admission, withdrawal, removal or substitution of any Partner
pursuant to, or other events described in, Article IV, X, XI or XII; (E) all certificates,
documents and other instruments relating to the determination of the rights, preferences and
privileges of any class or series of Partnership Securities issued pursuant to Section 5.6;
and (F) all certificates, documents and other instruments (including agreements and a
certificate of merger) relating to a merger, consolidation or conversion of the Partnership
pursuant to Article XIV; and

          (ii) execute, swear to, acknowledge, deliver, file and record all ballots, consents,
approvals, waivers, certificates, documents and other instruments that the General Partner
or the Liquidator determines to be necessary or appropriate to (A) make, evidence, give,
confirm or ratify any vote, consent, approval, agreement or other action that is made or
given by the Partners hereunder or is consistent with the terms of this Agreement or (B)
effectuate the terms or intent of this Agreement; provided, that when required by Section
13.3 or any other provision of this Agreement that establishes a percentage of the Limited Partners or of the Limited Partners of any class or series
required to take any action, the General Partner and the Liquidator may exercise the power
of attorney made in this Section 2.6(a)(ii) only after the necessary vote, consent or
approval of the Limited Partners or of the Limited Partners of such class or series, as
applicable.

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Nothing contained in this Section 2.6(a) shall be construed as authorizing the General Partner to
amend this Agreement except in accordance with Article XIII or as may be otherwise expressly
provided for in this Agreement.

          (b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled
with an interest, and it shall survive and, to the maximum extent permitted by law, not be affected
by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or
termination of any Limited Partner or Assignee and the transfer of all or any portion of such
Limited Partner’s or Assignee’s Partnership Interest and shall extend to such Limited Partner’s or
Assignee’s heirs, successors, assigns and personal representatives. Each such Limited Partner or
Assignee hereby agrees to be bound by any representation made by the General Partner or the
Liquidator acting in good faith pursuant to such power of attorney; and each such Limited Partner
or Assignee, to the maximum extent permitted by law, hereby waives any and all defenses that may be
available to contest, negate or disaffirm the action of the General Partner or the Liquidator taken
in good faith under such power of attorney. Each Limited Partner or Assignee shall execute and
deliver to the General Partner or the Liquidator, within 15 days after receipt of the request
therefor, such further designation, powers of attorney and other instruments as the General Partner
or the Liquidator may request in order to effectuate this Agreement and the purposes of the
Partnership.

Section 2.7 Term.

     The term of the Partnership commenced upon the filing of the Certificate of Limited
Partnership in accordance with the Delaware Act and shall continue in existence until the
dissolution of the Partnership in accordance with the provisions of Article XII. The existence of
the Partnership as a separate legal entity shall continue until the cancellation of the Certificate
of Limited Partnership as provided in the Delaware Act.

Section 2.8 Title to Partnership Assets.

     Title to Partnership assets, whether real, personal or mixed and whether tangible or
intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner or
Assignee, individually or collectively, shall have any ownership interest in such Partnership
assets or any portion thereof. Title to any or all of the Partnership assets may be held in the
name of the Partnership, the General Partner, one or more of its Affiliates or one or more
nominees, as the General Partner may determine. The General Partner hereby declares and warrants
that any Partnership assets for which record title is held in the name of the General Partner or
one or more of its Affiliates or one or more nominees shall be held by the General Partner or such
Affiliate or nominee for the use and benefit of the Partnership in accordance with the provisions
of this Agreement; provided, however, that the General Partner shall use reasonable efforts to
cause record title to such assets (other than those assets in respect of which the General Partner
determines that the expense and difficulty of conveyancing makes transfer of record title to
the Partnership impracticable) to be vested in the Partnership as soon as reasonably practicable;
provided, further, that, prior to the withdrawal or removal of the General Partner or as soon
thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer
of record title to the Partnership and, prior to any such transfer, will provide for the use of
such assets in a manner satisfactory to the General Partner. All Partnership assets shall be
recorded as

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the property of the Partnership in its books and records, irrespective of the name in
which record title to such Partnership assets is held.

Section 2.9 Certain Undertakings Relating to the Separateness of the Partnership.

          (a) Separateness Generally. The Partnership shall conduct its business and operations
separate and apart from those of any other Person (other than the General Partner) in accordance
with this Section 2.9.

          (b) Separate Records. The Partnership shall maintain (i) its books and records, (ii) its
accounts, and (iii) its financial statements, separate from those of any other Person, except its
consolidated Subsidiaries.

          (c) Separate Assets. The Partnership shall not commingle or pool its funds or other assets
with those of any other Person, except its consolidated Subsidiaries, and shall maintain its assets
in a manner that is not costly or difficult to segregate, ascertain or otherwise identify as
separate from those of any other Person.

          (d) Separate Name. The Partnership shall (i) conduct its business in its own name, (ii) use
separate stationery, invoices, and checks, (iii) correct any known misunderstanding regarding its
separate identity, and (iv) generally hold itself out as a separate entity.

          (e) Separate Credit. The Partnership shall not (i) pay its own liabilities from a source
other than its own funds, (ii) guarantee or become obligated for the debts of any other Person,
except its Subsidiaries, (iii) hold out its credit as being available to satisfy the obligations of
any other Person, except its Subsidiaries, (iv) acquire obligations or debt securities of the
General Partner or its Affiliates (other than the Partnership or its Subsidiaries), or (v) pledge
its assets for the benefit of any Person or make loans or advances to any Person, except its
Subsidiaries; provided that the Partnership may engage in any transaction described in clauses
(ii)–(v) of this Section 2.9(e) if prior Special Approval has been obtained for such transaction
and either (A) the Conflicts Committee has determined, or has obtained reasonable written assurance
from a nationally recognized firm of independent public accountants or a nationally recognized
investment banking or valuation firm, that the borrower or recipient of the credit extension is not
then insolvent and will not be rendered insolvent as a result of such transaction or (B) in the
case of transactions described in clause (iv), such transaction is completed through a public
auction or a National Securities Exchange.

          (f) Separate Formalities. The Partnership shall (i) observe all partnership formalities and
other formalities required by its organizational documents, the laws of the jurisdiction of its
formation, or other laws, rules, regulations and orders of governmental authorities exercising
jurisdiction over it, (ii) engage in transactions with the General Partner and its Affiliates (other than another Group Member) in conformity with the requirements of
Section 7.9, and (iii) promptly pay, from its own funds, and on a current basis, its allocable
share of general and administrative expenses, capital expenditures, and costs for shared services
performed by Affiliates of the General Partner (other than another Group Member). Each material
contract between the Partnership or another Group Member, on the one hand, and the

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Affiliates of the General Partner (other than a Group Member), on the other hand, shall be in writing.

          (g) No Effect. Failure by the General Partner or the Partnership to comply with any of the
obligations set forth above shall not affect the status of the Partnership as a separate legal
entity, with its separate assets and separate liabilities. The General Partner and the Partnership
may be consolidated for financial reporting purposes with Encore Acquisition Company and its
subsidiaries; provided, however, that such consolidation shall not affect the status of the
Partnership as a separate legal entity with its separate assets and separate liabilities.

ARTICLE III

RIGHTS OF LIMITED PARTNERS

Section 3.1 Limitation of Liability.

     The Limited Partners and the Assignees shall have no liability under this Agreement except as
expressly provided in this Agreement or the Delaware Act.

Section 3.2 Management of Business.

     No Limited Partner or Assignee, in its capacity as such, shall participate in the operation,
management or control (within the meaning of the Delaware Act) of the Partnership’s business,
transact any business in the Partnership’s name or have the power to sign documents for or
otherwise bind the Partnership. Any action taken by any Affiliate of the General Partner or any
officer, director, employee, manager, member, general partner, agent or trustee of the General
Partner or any of its Affiliates, or any officer, director, employee, manager, member, general
partner, agent or trustee of a Group Member, in its capacity as such, shall not be deemed to be
participation in the control of the business of the Partnership by a limited partner of the
Partnership (within the meaning of Section 17-303(a) of the Delaware Act) and shall not affect,
impair or eliminate the limitations on the liability of the Limited Partners or Assignees under
this Agreement.

Section 3.3 Outside Activities of the Limited Partners.

     Subject to the provisions of Section 7.5, any Limited Partner or Assignee shall be entitled to
and may have business interests and engage in business activities in addition to those relating to
the Partnership, including business interests and activities in direct competition with the
Partnership Group. Neither the Partnership nor any of the other Partners or Assignees shall have
any rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee.

Section 3.4 Rights of Limited Partners.

          (a) In addition to other rights provided by this Agreement or by applicable law, and except as
limited by Section 3.4(b), each Limited Partner shall have the right, for a purpose reasonably
related to such Limited Partner’s interest as a Limited Partner in the

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Partnership, upon reasonable written demand stating the purpose of such demand, and at such Limited Partner’s own expense:

          (i) to obtain true and full information regarding the status of the business and
financial condition of the Partnership;

          (ii) promptly after its becoming available, to obtain a copy of the Partnership’s
federal, state and local income tax returns for each year;

          (iii) to obtain a current list of the name and last known business, residence or
mailing address of each Partner;

          (iv) to obtain a copy of this Agreement and the Certificate of Limited Partnership and
all amendments thereto, together with copies of the executed copies of all powers of
attorney pursuant to which this Agreement, the Certificate of Limited Partnership and all
amendments thereto have been executed;

          (v) to obtain true and full information regarding the amount of cash and a description
and statement of the Net Agreed Value of any other Capital Contribution by each Partner and
that each Partner has agreed to contribute in the future, and the date on which each became
a Partner; and

          (vi) to obtain such other information regarding the affairs of the Partnership as is
just and reasonable.

          (b) The General Partner may keep confidential from the Limited Partners and Assignees, for
such period of time as the General Partner deems reasonable, (i) any information that the General
Partner reasonably believes to be in the nature of trade secrets or (ii) other information the
disclosure of which the General Partner in good faith believes (A) is not in the best interests of
the Partnership Group, (B) could damage the Partnership Group or its business or (C) that any Group
Member is required by law or by agreement with any third party to keep confidential (other than
agreements with Affiliates of the Partnership the primary purpose of which is to circumvent the
obligations set forth in this Section 3.4).

ARTICLE IV

CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;

REDEMPTION OF PARTNERSHIP INTERESTS

Section 4.1 Certificates.

     Upon the Partnership’s issuance of Common Units to any Person, the Partnership shall issue,
upon the request of such Person, one or more Certificates in the name of such Person evidencing the number of such Units being so issued. In addition, (a) upon the General
Partner’s request, the Partnership shall issue to it one or more Certificates in the name of the
General Partner evidencing its General Partner Interest and (b) upon the request of any Person
owning Management Incentive Units or any other Partnership Securities other than Common Units, the

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Partnership shall issue to such Person one or more certificates evidencing such Management
Incentive Units or other Partnership Securities other than Common Units. Certificates shall be
executed on behalf of the Partnership by the Chairman of the Board, Chief Executive Officer,
President or any Executive Vice President, Senior Vice President or Vice President and the Chief
Financial Officer or the Secretary or any Assistant Secretary of the General Partner. No Common
Unit Certificate shall be valid for any purpose until it has been countersigned by the Transfer
Agent; provided, however, the Units may be certificated or uncertificated as provided in the
Delaware Act; provided, further that if the General Partner elects to issue Common Units in global
form, the Common Unit Certificates shall be valid upon receipt of a certificate from the Transfer
Agent certifying that the Common Units have been duly registered in accordance with the directions
of the Partnership. Subject to the requirements of Section 6.4, the Partners holding Certificates
evidencing Management Incentive Units may exchange such Certificates for Certificates evidencing
Common Units on or after the date on which such Management Incentive Units are converted into
Common Units pursuant to the terms of Section 5.10.

Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates.

          (a) If any mutilated Certificate is surrendered to the Transfer Agent, the appropriate
officers of the General Partner on behalf of the Partnership shall execute, and the Transfer Agent
shall countersign and deliver in exchange therefor, a new Certificate evidencing the same number
and type of Partnership Securities as the Certificate so surrendered.

          (b) The appropriate officers of the General Partner on behalf of the Partnership shall execute
and deliver, and the Transfer Agent shall countersign, a new Certificate in place of any
Certificate previously issued, or issue uncertificated Units, if the Record Holder of the
Certificate:

          (i) makes proof by affidavit, in form and substance satisfactory to the General
Partner, that a previously issued Certificate has been lost, destroyed or stolen;

          (ii) requests the issuance of a new Certificate or the issuance of uncertificated Units
before the General Partner has notice that the Certificate has been acquired by a purchaser
for value in good faith and without notice of an adverse claim;

          (iii) if requested by the General Partner, delivers to the General Partner a bond, in
form and substance satisfactory to the General Partner, with surety or sureties and with
fixed or open penalty as the General Partner may direct to indemnify the Partnership, the
Partners, the General Partner and the Transfer Agent against any claim that may be made on
account of the alleged loss, destruction or theft of the Certificate; and

          (iv) satisfies any other reasonable requirements imposed by the General Partner.

     If a Limited Partner or Assignee fails to notify the General Partner within a reasonable
period of time after he has notice of the loss, destruction or theft of a Certificate, and a
transfer of the Limited Partner Interests represented by the Certificate is registered before the
Partnership,

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the General Partner or the Transfer Agent receives such notification, the Limited
Partner or Assignee shall be precluded from making any claim against the Partnership, the General
Partner or the Transfer Agent for such transfer or for a new Certificate or uncertificated Units.

          (c) As a condition to the issuance of any new Certificate or uncertificated Units under this
Section 4.2, the General Partner may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Transfer Agent) reasonably connected therewith.

Section 4.3 Record Holders.

     The Partnership shall be entitled to recognize the Record Holder as the Partner or Assignee
with respect to any Partnership Interest and, accordingly, shall not be bound to recognize any
equitable or other claim to, or interest in, such Partnership Interest on the part of any other
Person, regardless of whether the Partnership shall have actual or other notice thereof, except as
otherwise provided by law or any applicable rule, regulation, guideline or requirement of any
National Securities Exchange on which such Partnership Interests are listed or admitted to trading.
Without limiting the foregoing, when a Person (such as a broker, dealer, bank, trust company or
clearing corporation or an agent of any of the foregoing) is acting as nominee, agent or in some
other representative capacity for another Person in acquiring and/or holding Partnership Interests,
as between the Partnership on the one hand, and such other Persons on the other, such
representative Person (a) shall be the Partner or Assignee (as the case may be) of record and
beneficially, (b) must execute and deliver a Transfer Application and (c) shall be bound by this
Agreement and shall have the rights and obligations of a Partner or Assignee (as the case may be)
hereunder and as, and to the extent, provided for herein.

Section 4.4 Transfer Generally.

          (a) The term “transfer,” when used in this Agreement with respect to a Partnership Interest,
shall be deemed to refer to a transaction (i) by which the General Partner assigns its General
Partner Interest to another Person or by which a holder of Management Incentive Units assigns its
Management Incentive Units to another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise or (ii)
by which the holder of a Limited Partner Interest (other than a Management Incentive Unit) assigns
such Limited Partner Interest to another Person who is or becomes a Limited Partner or an Assignee,
and includes a sale, assignment, gift, exchange or any other disposition by law or otherwise,
including any transfer upon foreclosure of any pledge, encumbrance, hypothecation or mortgage.

          (b) No Partnership Interest shall be transferred, in whole or in part, except in accordance
with the terms and conditions set forth in this Article IV. Any transfer or purported transfer of a
Partnership Interest not made in accordance with this Article IV shall be null and void.

          (c) Nothing contained in this Agreement shall be construed to prevent a disposition by any
stockholder, member, partner or other owner of the General Partner of any or

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all of the shares of stock, membership interests, partnership interests or other ownership interests in the General
Partner.

Section 4.5 Registration and Transfer of Limited Partner Interests.

          (a) The General Partner shall keep or cause to be kept on behalf of the Partnership a register
in which, subject to such reasonable regulations as it may prescribe and subject to the provisions
of Section 4.5(b), the Partnership will provide for the registration and transfer of Limited
Partner Interests. The Transfer Agent is hereby appointed registrar and transfer agent for the
purpose of registering Common Units and transfers of such Common Units as herein provided. The
Partnership shall not recognize transfers of Certificates evidencing Limited Partner Interests
unless such transfers are effected in the manner described in this Section 4.5. Upon surrender of a
Certificate for registration of transfer of any Limited Partner Interests evidenced by a
Certificate, and subject to the provisions of Section 4.5(b), the appropriate officers of the
General Partner on behalf of the Partnership shall execute and deliver, and in the case of Common
Units, the Transfer Agent shall countersign and deliver, in the name of the holder or the
designated transferee or transferees, as required pursuant to the holder’s instructions, one or
more new Certificates evidencing the same aggregate number and type of Limited Partner Interests as
was evidenced by the Certificate so surrendered.

          (b) Except as otherwise provided in Section 4.8, the General Partner shall not recognize any
transfer of Limited Partner Interests until the Certificates evidencing such Limited Partner
Interests are surrendered for registration of transfer and such Certificates are accompanied by a
Transfer Application properly completed and duly executed by the transferee (or the transferee’s
attorney-in-fact duly authorized in writing). No charge shall be imposed by the General Partner
for such transfer; provided, that as a condition to the issuance of any new Certificate under this
Section 4.5, the General Partner may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed with respect thereto. No distributions or
allocations will be made in respect of the Limited Partner Interests until a properly completed
Transfer Application has been delivered.

          (c) Upon the receipt of proper transfer instructions from the registered owner of
uncertificated Common Units, such uncertificated Common Units shall be cancelled, issuance of new
equivalent uncertificated Common Units or Certificates shall be made to the holder of Common Units
entitled thereto and the transaction shall be recorded upon the books of the Partnership.

          (d) Limited Partner Interests may be transferred only in the manner described in this Section
4.5. The transfer of any Limited Partner Interests and the admission of any new Limited Partner
shall not constitute an amendment to this Agreement.

          (e) Until admitted as a Substituted Limited Partner pursuant to Section 10.2, the Record
Holder of a Limited Partner Interest shall be an Assignee in respect of such Limited Partner
Interest. Limited Partners may include custodians, nominees or any other individual or entity in
its own or any representative capacity.

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          (f) A transferee of a Limited Partner Interest who has completed and delivered a Transfer
Application shall be deemed to have (i) requested admission as a Substituted Limited Partner, (ii)
agreed to comply with and be bound by and to have executed this Agreement, (iii) represented and
warranted that such transferee has the right, power and authority and, if an individual, the
capacity to enter into this Agreement, (iv) granted the powers of attorney set forth in this
Agreement and (v) given the consents and approvals and made the waivers contained in this
Agreement.

          (g) The General Partner and its Affiliates shall have the right at any time to transfer their
Common Units to one or more Persons.

          (h) Notwithstanding the foregoing, no Executive may transfer any Management Incentive Unit,
except to a Permitted Transferee, without the prior written consent of the General Partner, and any
such purported transfer in conflict with the foregoing is void.

Section 4.6 Transfer of the General Partner’s General Partner Interest.

          (a) Subject to Section 4.6(c) below, prior to June 30, 2017, the General Partner shall not
transfer all or any part of its General Partner Interest to a Person unless such transfer (i) has
been approved by the prior written consent or vote of the holders of at least a majority of the
Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) or
(ii) is of all, but not less than all, of its General Partner Interest to (A) an Affiliate of the
General Partner (other than an individual) or (B) another Person (other than an individual) in
connection with the merger or consolidation of the General Partner with or into such other Person
or the transfer by the General Partner of all or substantially all of its assets to such other
Person.

          (b) Subject to Section 4.6(c) below, on or after June 30, 2017, the General Partner may at its
option transfer all or any of its General Partner Interest without Unitholder approval.

          (c) Notwithstanding anything herein to the contrary, no transfer by the General Partner of all
or any part of its General Partner Interest to another Person shall be permitted unless (i) the
transferee agrees to assume the rights and duties of the General Partner under this Agreement and
to be bound by the provisions of this Agreement, (ii) the Partnership receives an Opinion of
Counsel that such transfer would not result in the loss of limited liability under Delaware law of
any Limited Partner or cause the Partnership to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent
not already so treated or taxed) and (iii) such transferee also agrees to purchase all (or the
appropriate portion thereof, if applicable) of the partnership or membership interest of the
General Partner as the general partner or managing member, if any, of each other Group Member. In
the case of a transfer pursuant to and in compliance with this Section 4.6, the transferee or
successor (as the case may be) shall, subject to compliance with the terms of Section 10.3, be
admitted to the Partnership as the General Partner immediately prior to the transfer of the General
Partner Interest, and the business of the Partnership shall continue without dissolution.

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Section 4.7 Restrictions on Transfers.

          (a) Except as provided in Section 4.7(c) below, and notwithstanding the other provisions of
this Article IV, no transfer of any Partnership Interests shall be made if such transfer would (i)
violate the then applicable federal or state securities laws or rules and regulations of the
Commission, any state securities commission or any other governmental authority with jurisdiction
over such transfer, (ii) terminate the existence or qualification of the Partnership under the laws
of the jurisdiction of its formation, or (iii) cause the Partnership to be treated as an
association taxable as a corporation or otherwise to be taxed as an entity for federal income tax
purposes (to the extent not already so treated or taxed).

          (b) The General Partner may impose restrictions on the transfer of Partnership Interests if it
receives an Opinion of Counsel that such restrictions are necessary to avoid a significant risk of
the Partnership becoming taxable as a corporation or otherwise becoming taxable as an entity for
federal income tax purposes. The General Partner may impose such restrictions by amending this
Agreement; provided, however, that any amendment that would result in the delisting or suspension
of trading of any class of Limited Partner Interests on the principal National Securities Exchange
on which such class of Limited Partner Interests is then listed or admitted to trading must be
approved, prior to such amendment being effected, by the holders of at least a majority of the
Outstanding Limited Partner Interests of such class.

          (c) Nothing contained in this Article IV, or elsewhere in this Agreement, shall preclude the
settlement of any transactions involving Partnership Interests entered into through the facilities
of any National Securities Exchange on which such Partnership Interests are listed or admitted to
trading.

          (d) Each certificate evidencing Partnership Interests shall bear a conspicuous legend in
substantially the following form:

     THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF
ENCORE ENERGY PARTNERS LP THAT THIS SECURITY MAY NOT BE SOLD,
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IF SUCH TRANSFER
WOULD (A) VIOLATE THE THEN APPLICABLE FEDERAL OR STATE SECURITIES
LAWS OR RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE
COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER
GOVERNMENTAL AUTHORITY WITH JURISDICTION OVER SUCH TRANSFER, (B)
TERMINATE THE EXISTENCE OR QUALIFICATION OF ENCORE ENERGY PARTNERS
LP UNDER THE LAWS OF THE STATE OF DELAWARE, OR (C) CAUSE ENCORE
ENERGY PARTNERS LP TO BE TREATED AS AN ASSOCIATION TAXABLE AS A
CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR FEDERAL INCOME
TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED).
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PARTNERS GP LLC, THE GENERAL PARTNER OF ENCORE ENERGY PARTNERS
LP, MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE TRANSFER OF THIS
SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS
ARE NECESSARY TO AVOID A SIGNIFICANT RISK OF ENCORE ENERGY PARTNERS
LP BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE
AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES. THE RESTRICTIONS SET
FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS
INVOLVING THIS SECURITY ENTERED INTO THROUGH THE FACILITIES OF ANY
NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED OR
ADMITTED TO TRADING.

Section 4.8 Eligible Holder Certifications; Non-Eligible Holders.

          (a) If a transferee of a Limited Partner Interest fails to furnish a properly completed
Eligible Holder Certification in a Transfer Application or if, upon receipt of such Eligible Holder
Certification or otherwise, the General Partner determines that such transferee is not an Eligible
Holder, the Limited Partner Interests owned by such transferee shall be subject to redemption in
accordance with the provisions of Section 4.9.

          (b) The General Partner may request any Limited Partner or Assignee to furnish to the General
Partner, within 30 days after receipt of such request, an executed Eligible Holder Certification or
such other information concerning his nationality, citizenship or other related status (or, if the
Limited Partner or Assignee is a nominee holding for the account of another Person, the
nationality, citizenship or other related status of such Person) as the General Partner may
request. If a Limited Partner or Assignee fails to furnish to the General Partner within the
aforementioned 30-day period such Eligible Holder Certification or other requested information or
if upon receipt of such Eligible Holder Certification or other requested information the General
Partner determines that a Limited Partner or Assignee is not an Eligible Holder, the Limited
Partner Interests owned by such Limited Partner or Assignee shall be subject to redemption in
accordance with the provisions of Section 4.9. In addition, the General Partner may require that
the status of any such Limited Partner or Assignee be changed to that of a Non-Eligible Holder and,
thereupon, the General Partner shall be substituted for such Non-Eligible Holder as the Limited
Partner in respect of the Non-Eligible Holder’s Limited Partner Interests.

          (c) The General Partner shall, in exercising voting rights in respect of Limited Partner
Interests held by it on behalf of Non-Eligible Holders, distribute the votes in the same ratios as
the votes of Partners (including the General Partner) in respect of Limited Partner Interests other
than those of Non-Eligible Holders are cast, either for, against or abstaining as to the matter.

          (d) Upon dissolution of the Partnership, a Non-Eligible Holder shall have no right to receive
a distribution in kind pursuant to Section 12.4 but shall be entitled to the cash equivalent
thereof, and the Partnership shall provide cash in exchange for an assignment of the

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Non-Eligible Holder’s share of any distribution in kind. Such payment and assignment shall be
treated for Partnership purposes as a purchase by the Partnership from the Non-Eligible Holder of
its Limited Partner Interest (representing its right to receive its share of such distribution in
kind).

          (e) At any time after a Non-Eligible Holder can and does certify that it has become an
Eligible Holder, a Non-Eligible Holder may, upon application to the General Partner, request
admission as a Substituted Limited Partner with respect to any Limited Partner Interests of such
Non-Eligible Holder not redeemed pursuant to Section 4.9, and upon admission of such Non-Eligible
Holder pursuant to Section 10.2, the General Partner shall cease to be deemed to be the Limited
Partner in respect of the Non-Eligible Holder’s Limited Partner Interests.

Section 4.9 Redemption of Partnership Interests of Non-Eligible Holders.

          (a) If at any time a Limited Partner or Assignee fails to furnish an Eligible Holder
Certification or other information requested within the 30-day period specified in Section 4.8(b),
or if upon receipt of such Eligible Holder Certification or other information the General Partner
determines, with the advice of counsel, that a Limited Partner or Assignee is not an Eligible
Holder, the Partnership may, unless the Limited Partner or Assignee establishes to the satisfaction
of the General Partner that such Limited Partner or Assignee is an Eligible Holder or has
transferred his Partnership Interests to a Person who is an Eligible Holder and who furnishes an
Eligible Holder Certification to the General Partner prior to the date fixed for redemption as
provided below, redeem the Limited Partner Interest of such Limited Partner or Assignee as follows:

          (i) The General Partner shall, not later than the 30th day before the date fixed for
redemption, give notice of redemption to the Limited Partner or Assignee, at his last
address designated on the records of the Partnership or the Transfer Agent, by registered or
certified mail, postage prepaid. The notice shall be deemed to have been given when so
mailed. The notice shall specify the Redeemable Interests or, if uncertificated, upon
receipt of evidence satisfactory to the General Partner of the ownership of the Redeemable
Interests, the date fixed for redemption, the place of payment, that payment of the
redemption price will be made upon surrender of the Certificate evidencing the Redeemable
Interests and that on and after the date fixed for redemption no further allocations or
distributions to which the Limited Partner or Assignee would otherwise be entitled in
respect of the Redeemable Interests will accrue or be made.

          (ii) The aggregate redemption price for Redeemable Interests shall be an amount equal to the
Current Market Price (the date of determination of which shall be the date fixed for redemption) of
Limited Partner Interests of the class to be so redeemed multiplied by the number of Limited
Partner Interests of each such class included among the Redeemable Interests. The redemption price
shall be paid, as determined by the General Partner, in cash or by delivery of a promissory note of
the Partnership in the principal amount of the redemption price, bearing interest at the rate of 5%
annually and payable in three equal annual installments of principal together with accrued
interest, commencing one year after the redemption date.

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          (iii) Upon surrender by or on behalf of the Limited Partner or Assignee, at the place
specified in the notice of redemption, of (x) if certificated, the Certificate evidencing
the Redeemable Interests, duly endorsed in blank or accompanied by an assignment duly
executed in blank, or (y) if uncertificated, upon receipt of evidence satisfactory to the
General Partner of the ownership of the Redeemable Interests, the Limited Partner or
Assignee or his duly authorized representative shall be entitled to receive the payment
therefor.

          (iv) After the redemption date, Redeemable Interests shall no longer constitute issued
and Outstanding Limited Partner Interests.

          (b) The provisions of this Section 4.9 shall also be applicable to Limited Partner Interests
held by a Limited Partner or Assignee as nominee of a Person determined to be other than an
Eligible Holder.

          (c) Nothing in this Section 4.9 shall prevent the recipient of a notice of redemption from
transferring his Limited Partner Interest before the redemption date if such transfer is otherwise
permitted under this Agreement. Upon receipt of notice of such a transfer, the General Partner
shall withdraw the notice of redemption, provided the transferee of such Limited Partner Interest
certifies to the satisfaction of the General Partner in a Transfer Application that he is an
Eligible Holder. If the transferee fails to make such certification, such redemption shall be
effected from the transferee on the original redemption date.

ARTICLE V

CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

Section 5.1 Organizational Contributions; Interim Closing.

          (a) In connection with the formation of the Partnership under the Delaware Act, the General
Partner made an initial Capital Contribution to the Partnership in the amount of $12.00 for the
General Partner Interest in the Partnership and has been admitted as the general partner of the
Partnership, and the Organizational Limited Partner made an initial Capital Contribution to the
Partnership in the amount of $588.00 for a 98% Limited Partner Interest in the Partnership and has
been admitted as a limited partner of the Partnership.

          (b) On the Interim Closing Date, the Partnership converted the Limited Partner Interest of the
Organizational Limited Partner into 10,279,639 Common Units and the General Partner Interest of the
General Partner into 221,013 General Partner Units. Also on the Interim Closing Date, the
Partnership issued to the Management Incentive Units as follows:

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	Name	 	Partnership Interest
	I. Jon Brumley
	 	143,000 Management Incentive Units
	Jon S. Brumley
	 	143,000 Management Incentive Units
	Robert C. Reeves
	 	110,000 Management Incentive Units
	L. Ben Nivens
	 	77,000 Management Incentive Units
	John W. Arms
	 	77,000 Management Incentive Units

Section 5.2 Contributions by the General Partner and its Affiliates.

          (a) On the Closing Date and pursuant to the Contribution Agreement, (i) Encore Operating, L.P.
shall contribute to the Partnership, as a Capital Contribution, certain oil and natural gas
properties located in the Permian Basin of West Texas in exchange for 4,043,478 Common Units and
(ii) the General Partner shall contribute to the Partnership, as a Capital Contribution, 260,870
Common Units in exchange for 260,870 General Partner Units.

          (b) Upon the issuance of any additional Limited Partner Interests by the Partnership, the
General Partner may, in exchange for a proportionate number of General Partner Units, make
additional Capital Contributions in an amount equal to the product obtained by multiplying (i) the
quotient determined by dividing (A) the General Partner’s Percentage Interest by (B) 100 less the
General Partner’s Percentage Interest times (ii) the amount contributed to the Partnership by the
Limited Partners in exchange for such additional Limited Partner Interests. Except as set forth in
Article XII, the General Partner shall not be obligated to make any additional Capital
Contributions to the Partnership.

Section 5.3 Contributions by Initial Limited Partners.

          (a) On the Closing Date and pursuant to the Underwriting Agreement, each Underwriter shall
contribute to the Partnership cash in an amount equal to the Issue Price per Initial Common Unit,
multiplied by the number of Common Units specified in the Underwriting Agreement to be purchased by
such Underwriter at the Closing Date. In exchange for such Capital Contributions by the
Underwriters, the Partnership shall issue Common Units to each Underwriter on whose behalf such
Capital Contribution is made in an amount equal to the quotient obtained by dividing (i) the cash
contribution to the Partnership by or on behalf of such Underwriter by (ii) the Issue Price per
Initial Common Unit.

          (b) Upon the exercise of the Over-Allotment Option, each Underwriter shall contribute to the
Partnership cash in an amount equal to the Issue Price per Initial Common Unit, multiplied by the
number of Common Units to be purchased by such Underwriter at the Option Closing Date. In exchange
for such Capital Contributions by the Underwriters, the Partnership shall issue Common Units to
each Underwriter on whose behalf such Capital Contribution is made in an amount equal to the
quotient obtained by dividing (i) the cash contributions to the Partnership by or on behalf of such
Underwriter by (ii) the Issue Price per Initial Common Unit.

          (c) No Limited Partner Interests will be issued or issuable as of or at the Closing Date other
than (i) the Common Units issuable pursuant to Section 5.2(a) in aggregate number equal to
4,043,478, (ii) the Common Units issuable pursuant to subparagraph (a) hereof in aggregate number
equal to 9,000,000, and (iii) the “Option Units” as such term is used in the

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Underwriting Agreement in an aggregate number up to 1,350,000 issuable upon exercise of the
Over-Allotment Option pursuant to subparagraph (b) hereof.

Section 5.4 Interest and Withdrawal.

     No interest shall be paid by the Partnership on Capital Contributions. No Partner or Assignee
shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent, if
any, that distributions made pursuant to this Agreement or upon termination of the Partnership may
be considered as such by law and then only to the extent provided for in this Agreement. Except to
the extent expressly provided in this Agreement, no Partner or Assignee shall have priority over
any other Partner or Assignee either as to the return of Capital Contributions or as to profits,
losses or distributions. Any such return shall be a compromise to which all Partners and Assignees
agree within the meaning of Section 17-502(b) of the Delaware Act.

Section 5.5 Capital Accounts.

          (a) The Partnership shall maintain for each Partner (or a beneficial owner of Partnership
Interests held by a nominee in any case in which the nominee has furnished the identity of such
owner to the Partnership in accordance with Section 6031(c) of the Code or any other method
acceptable to the General Partner) owning a Partnership Interest a separate Capital Account with
respect to such Partnership Interest in accordance with the rules of Treasury Regulation Section
1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of all Capital
Contributions made to the Partnership with respect to such Partnership Interest and (ii) all items
of Partnership income and gain (including Simulated Gain and income and gain exempt from tax)
computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest
pursuant to Section 6.1, and decreased by (x) the amount of cash or Net Agreed Value of all actual
and deemed distributions of cash or property made with respect to such Partnership Interest and (y)
all items of Partnership deduction and loss (including Simulated Depletion and Simulated Loss)
computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest
pursuant to Section 6.1.

          (b) For purposes of computing the amount of any item of income, gain, loss, deduction,
Simulated Depletion, Simulated Gain or Simulated Loss which is to be allocated pursuant to Article
VI and is to be reflected in the Partners’ Capital Accounts, the determination, recognition and
classification of any such item shall be the same as its determination, recognition and
classification for federal income tax purposes (including any method of depreciation, cost recovery
or amortization used for that purpose), provided, that:

          (i) Solely for purposes of this Section 5.5, the Partnership shall be treated as owning
directly its proportionate share (as determined by the General Partner based upon the
provisions of the applicable Group Member Agreement) of all property owned by any other
Group Member that is classified as a partnership for federal income tax purposes and any
other partnership, limited liability company, unincorporated business or other entity
classified as a partnership for federal income tax purposes of which a Group Member is,
directly or indirectly, a partner.

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          (ii) All fees and other expenses incurred by the Partnership to promote the sale of (or
to sell) a Partnership Interest that can neither be deducted nor amortized under Section 709
of the Code, if any, shall, for purposes of Capital Account maintenance, be treated as an
item of deduction at the time such fees and other expenses are incurred and shall be
allocated among the Partners pursuant to Section 6.1.

          (iii) Except as otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m),
the computation of all items of income, gain, loss, deduction, Simulated Depletion,
Simulated Gain and Simulated Loss shall be made without regard to any election under Section
754 of the Code which may be made by the Partnership and, as to those items described in
Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the fact that such items
are not includable in gross income or are neither currently deductible nor capitalized for
federal income tax purposes. To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining
Capital Accounts, the amount of such adjustment in the Capital Accounts shall be treated as
an item of gain or loss.

          (iv) Any income, gain, loss, Simulated Gain or Simulated Loss attributable to the
taxable disposition of any Partnership property shall be determined as if the adjusted basis
of such property as of such date of disposition were equal in amount to the Partnership’s
Carrying Value with respect to such property as of such date.

          (v) In accordance with the requirements of Section 704(b) of the Code, any deductions
for depreciation, cost recovery, amortization or Simulated Depletion attributable to any
Contributed Property shall be determined as if the adjusted basis of such property on the
date it was acquired by the Partnership were equal to the Agreed Value of such property.
Upon an adjustment pursuant to Section 5.5(d) to the Carrying Value of any Partnership
property subject to depreciation, cost recovery, amortization or Simulated Depletion, any
further deductions for such depreciation, cost recovery, amortization or Simulated Depletion
attributable to such property shall be determined as if the adjusted basis of such property
were equal to the Carrying Value of such property immediately following such adjustment.

          (vi) If the Partnership’s adjusted basis in a depreciable or cost recovery property is
reduced for federal income tax purposes pursuant to Section 48(q)(1) or 48(q)(3) of the
Code, the amount of such reduction shall, solely for purposes hereof, be deemed to be an
additional depreciation or cost recovery deduction in the year such property is placed in
service and shall be allocated among the Partners pursuant to Section 6.1. Any restoration
of such basis pursuant to Section 48(q)(2) of the Code shall, to the extent possible, be
allocated in the same manner to the Partners to whom such deemed deduction was allocated.

          (c) A transferee of a Partnership Interest shall succeed to a pro rata portion of the Capital
Account of the transferor relating to the Partnership Interest so transferred.

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          (d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance of
additional Partnership Interests for cash or Contributed Property, the issuance of Partnership
Interests as consideration for the provision of services or the conversion of the General Partner’s
Combined Interest to Common Units pursuant to Section 11.3(b), the Capital Account of all Partners
and the Carrying Value of each Partnership property immediately prior to such issuance shall be
adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized on an
actual sale of each such property immediately prior to such issuance and had been allocated to the
Partners at such time pursuant to Section 6.1(c) in the same manner as any item of gain, loss,
Simulated Gain or Simulated Loss actually recognized during such period would have been allocated.
In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair market
value of all Partnership assets (including cash or cash equivalents) immediately prior to the
issuance of additional Partnership Interests shall be determined by the General Partner using such
method of valuation as it may adopt; provided, however, that the General Partner, in arriving at
such valuation, must take fully into account the fair market value of the Partnership Interests of
all Partners at such time. The General Partner shall allocate such aggregate value among the assets
of the Partnership (in such manner as it determines) to arrive at a fair market value for
individual properties.

          (ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately
prior to any actual or deemed distribution to a Partner of any Partnership property (other
than a distribution of cash that is not in redemption or retirement of a Partnership
Interest), the Capital Accounts of all Partners and the Carrying Value of all Partnership
property shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized
Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized
Loss had been recognized in a sale of such property immediately prior to such distribution
for an amount equal to its fair market value, and had been allocated to the Partners, at
such time, pursuant to Section 6.1(c) in the same manner as any item of gain, loss,
Simulated Gain or Simulated Loss actually recognized during such period would have been
allocated. In determining such Unrealized Gain or Unrealized Loss the aggregate cash amount
and fair market value of all Partnership assets (including cash or cash equivalents)
immediately prior to a distribution shall (A) in the case of an actual distribution that is
not made pursuant to Section 12.4 or in the case of a deemed distribution, be determined and
allocated in the same manner as that provided in Section 5.5(d)(i) or (B) in the case of a
liquidating distribution pursuant to Section 12.4, be determined and allocated by the
Liquidator using such method of valuation as it may adopt.

Section 5.6 Issuances of Additional Partnership Securities.

          (a) The Partnership may issue additional Partnership Securities and options, rights, warrants
and appreciation rights relating to the Partnership Securities for any Partnership purpose at any
time and from time to time to such Persons for such consideration and on such terms and conditions
as the General Partner shall determine, all without the approval of any Limited Partners.

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          (b) Each additional Partnership Security authorized to be issued by the Partnership pursuant
to Section 5.6(a) may be issued in one or more classes, or one or more series of any such classes,
with such designations, preferences, rights, powers and duties (which may be senior to existing
classes and series of Partnership Securities), as shall be fixed by the General Partner, including
(i) the right to share in Partnership profits and losses or items thereof; (ii) the right to share
in Partnership distributions; (iii) the rights upon dissolution and liquidation of the Partnership;
(iv) whether, and the terms and conditions upon which, the Partnership may or shall be required to
redeem the Partnership Security (including sinking fund provisions); (v) whether such Partnership
Security is issued with the privilege of conversion or exchange and, if so, the terms and
conditions of such conversion or exchange; (vi) the terms and conditions upon which each
Partnership Security will be issued, evidenced by certificates and assigned or transferred; (vii)
the method for determining the Percentage Interest as to such Partnership Security; and (viii) the
right, if any, of each such Partnership Security to vote on Partnership matters, including matters
relating to the relative rights, preferences and privileges of such Partnership Security.

          (c) The General Partner shall take all actions that it determines to be necessary or
appropriate in connection with (i) each issuance of Partnership Securities and options, rights,
warrants and appreciation rights relating to Partnership Securities pursuant to this Section 5.6,
(ii) the conversion of the General Partner Interest (represented by General Partner Units) or any
Management Incentive Units into Common Units pursuant to the terms of this Agreement, (iii) the
admission of Additional Limited Partners and (iv) all additional issuances of Partnership
Securities. The General Partner shall determine the relative rights, powers and duties of the
holders of the Units or other Partnership Securities being so issued. The General Partner shall do
all things necessary to comply with the Delaware Act and is authorized and directed to do all
things that it determines to be necessary or appropriate in connection with any future issuance of
Partnership Securities or in connection with the conversion of the General Partner Interest or any
Management Incentive Units into Common Units pursuant to the terms of this Agreement, including
compliance with any statute, rule, regulation or guideline of any federal, state or other
governmental agency or any National Securities Exchange on which the Units or other Partnership
Securities are listed or admitted to trading.

          (d) The Partnership shall not issue fractional Units upon any distribution, subdivision or
combination of Units. If a distribution, subdivision or combination of Units would result in the
issuance of fractional Units but for the provisions of this Section 5.6(d), each fractional Unit
shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the next higher
Unit).

Section 5.7 Limited Preemptive Right.

     Except as provided in this Section 5.7 and in Section 5.2, no Person shall have any
preemptive, preferential or other similar right with respect to the issuance of any Partnership
Security, whether unissued, held in the treasury or hereafter created. The General Partner shall
have the right, which it may from time to time assign in whole or in part to any of its Affiliates,
to purchase Partnership Securities from the Partnership whenever, and on the same terms that, the
Partnership issues Partnership Securities to Persons other than the General Partner and its
Affiliates, to the extent necessary to maintain the Percentage Interests of the General Partner and

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its Affiliates equal to that which existed immediately prior to the issuance of such Partnership Securities.

Section 5.8 Splits and Combinations.

          (a) Subject to Section 5.6(d), the Partnership may make a Pro Rata distribution of Partnership
Securities to all Record Holders or may effect a subdivision or combination of Partnership
Securities so long as, after any such event, each Partner shall have the same Percentage Interest
in the Partnership as before such event, and any amounts calculated on a per Unit basis or stated
as a number of Units are proportionately adjusted.

          (b) Whenever such a distribution, subdivision or combination of Partnership Securities is
declared, the General Partner shall select a Record Date as of which the distribution, subdivision
or combination shall be effective and shall send notice thereof at least 20 days prior to such
Record Date to each Record Holder as of a date not less than 10 days prior to the date of such
notice. The General Partner also may cause a firm of independent public accountants selected by it
to calculate the number of Partnership Securities to be held by each Record Holder after giving
effect to such distribution, subdivision or combination. The General Partner shall be entitled to
rely on any certificate provided by such firm as conclusive evidence of the accuracy of such
calculation.

          (c) Promptly following any such distribution, subdivision or combination, the Partnership may
issue Certificates or uncertificated Partnership Securities to the Record Holders of Partnership
Securities as of the applicable Record Date representing the new number of Partnership Securities
held by such Record Holders, or the General Partner may adopt such other procedures that it
determines to be necessary or appropriate to reflect such changes. If any such combination results
in a smaller total number of Partnership Securities Outstanding, the Partnership shall require, as
a condition to the delivery to a Record Holder of such new Certificate or uncertificated
Partnership Securities, the surrender of any Certificate held by such Record Holder immediately
prior to such Record Date.

Section 5.9 Fully Paid and Non-Assessable Nature of Limited Partner Interests.

     All Limited Partner Interests issued pursuant to, and in accordance with the requirements of,
this Article V shall be fully paid and non-assessable Limited Partner Interests in the Partnership,
except as such non-assessability may be affected by Section 17-607 of the Delaware Act.

Section 5.10 Rights of Holders of Management Incentive Units.

          (a) Vesting. If an Executive remains in Continuous Employment, the Management Incentive Units
held by such Executive shall vest in three equal installments as follows: 33 1/3 percent on each
of the Closing Date, the first anniversary of the Closing Date and the second anniversary of the
Closing Date. If an Executive ceases to be in Continuous Employment, any unvested Management
Incentive Units shall be immediately forfeited to the Partnership, except as expressly provided
otherwise below.

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          (b) Voting and Other Rights. An Executive shall not be entitled to any voting rights or any
Sharing Percentage with respect to a Management Incentive Unit, but for all other purposes an
Executive shall have all of the rights and obligations of a Limited Partner holding Common Units
hereunder.

          (c) Termination of Employment; Forfeiture.

          (i) Upon termination of an Executive’s Continuous Employment as a result of the death
of such Executive, the conditions in Section 5.10(a) shall be deemed satisfied with respect
to the Executive’s Management Incentive Units, and the restrictions on such units shall
lapse and such units shall vest in the Executive’s legal representative, beneficiary or
heir.

          (ii) Upon termination of an Executive’s Continuous Employment as a result of the
disability of such Executive, the Management Incentive Units held by such Executive shall
continue to be subject to the restrictions set forth herein, which restrictions shall lapse
and such units shall vest in the Executive. The disability of an Executive shall mean (1)
the total disability of the Executive as determined in accordance with Parent’s long-term
disability insurance benefit plan or (2) the total and permanent disability as determined by
the Board of Directors of the General Partner in its sole discretion.

          (iii) Upon termination of an Executive’s Continuous Employment for any reason other
than as described in subsections (i) and (ii) above, all Management Incentive Units held by
such Executive as to which the restrictions thereon shall not have previously lapsed shall
be immediately forfeited to the Partnership.

          (d) Common Unit Equivalents. For purposes of determining the right of a Management Incentive
Unit to distributions under Section 6.3, each Management Incentive Unit will be considered to equal
a number of Common Unit Equivalents determined as follows:

          (i) if distributions of Available Cash per Common Unit with respect to a Quarter are
less than the Stated Distribution multiplied by 1.1 (the “First Target Distribution”), each
Management Incentive Unit shall represent 1.0000 Common Unit Equivalents with respect to
such Quarter;

          (ii) if distributions of Available Cash per Common Unit with respect to a Quarter are
equal to or greater than the First Target Distribution but less than the First Target
Distribution multiplied by 1.1 (the “Second Target Distribution”), each Management Incentive
Unit shall represent 1.2500 Common Unit Equivalents with respect to such Quarter;

          (iii) if distributions of Available Cash per Common
Unit with respect to a Quarter are equal to or greater than the Second
Target Distribution but less than the Second Target Distribution
multiplied by 1.1 (the “Third Target Distribution”), each Management
Incentive Unit shall represent 1.5625 Common Unit Equivalents with
respect to such Quarter;

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          (iv) if distributions of Available Cash per Common Unit with respect to a Quarter are
equal to or greater than the Third Target Distribution but less than the Third Target
Distribution multiplied by 1.1 (the “Fourth Target Distribution”), each Management Incentive
Unit shall represent 1.9531 Common Unit Equivalents with respect to such Quarter;

          (v) if distributions of Available Cash per Common Unit with respect to a Quarter are
equal to or greater than the Fourth Target Distribution but less than the Fourth Target
Distribution multiplied by 1.1 (the “Fifth Target Distribution”), each Management Incentive
Unit shall represent 2.4414 Common Unit Equivalents with respect to such Quarter;

          (vi) if distributions of Available Cash per Common Unit with respect to a Quarter are
equal to or greater than the Fifth Target Distribution but less than the Fifth Target
Distribution multiplied by 1.1 (the “Sixth Target Distribution”), each Management Incentive
Unit shall represent 3.0518 Common Unit Equivalents with respect to such Quarter;

          (vii) if distributions of Available Cash per Common Unit with respect to a Quarter are
equal to or greater than the Sixth Target Distribution but less than the Sixth Target
Distribution multiplied by 1.1 (the “Seventh Target Distribution”), each Management
Incentive Unit shall represent 3.8147 Common Unit Equivalents with respect to such Quarter;
and

          (viii) if distributions of Available Cash per Common Unit with respect to a Quarter are
equal to or greater than the Seventh Target Distribution, each Management Incentive Unit
shall represent 4.7684 Common Unit Equivalents.

For purposes of this Section 5.10, the determination of Available Cash per Common Unit will
be tentatively determined based upon the number of Common Units represented by the then
Outstanding number of Management Incentive Units under this Section 5.10(d) with respect to
the previous Quarter (as adjusted for any conversions in the current Quarter). If the
computation of the Available Cash per Common Unit under the previous sentence causes the
number of Common Unit Equivalents to increase or decrease under the terms of this Section
5.10(d), the Available Cash per Common Unit will be recomputed using the increased or
decreased number of Common Unit Equivalents. If the recomputation of the Available Cash per
Common Unit taking into account the increased or decreased Common Unit Equivalents is less
than (or greater than) the applicable Target Distribution that caused the Common Unit
Equivalents to tentatively increase (or decrease), the Common Unit Equivalents will be the
same as those Outstanding for the previous Quarter (or, if applicable, the Common Unit
Equivalents associated with the level of Target Distribution which is supported following
recomputation).

          (e) Conversion of Management Incentive Units. Management Incentive Units shall convert into
Common Units as provided in this Section 5.10(e). Immediately upon the conversion of a Management
Incentive Unit into a Common Unit pursuant to this Section

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5.10(e), the Executive shall possess all of the rights and obligations of a Unitholder holding a
Common Unit hereunder. Common Units received upon conversion of Management Incentive Units shall
be fully vested, regardless of the vesting schedule set forth in Section 5.10(a). Notwithstanding
the foregoing, a Management Incentive Unit that has converted into a Common Unit pursuant to this
Section 5.10(e) shall be subject to the provisions of Section 6.1(d)(x) and Section 6.4.

          (i) If the Partnership makes distributions of Available Cash per Common Unit with
respect to four consecutive Quarters in an amount equal to or greater than the Fourth Target
Distribution multiplied by four (the “First Conversion Milestone”), the Fifth Target
Distribution multiplied by four (the “Second Conversion Milestone”), the Sixth Target
Distribution multiplied by four (the “Third Conversion Milestone”) or the Seventh Target
Distribution multiplied by four (the “Fourth Conversion Milestone”), then, at any time and
from time to time for so long as the Partnership makes distributions of Available Cash per
Common Unit in an amount equal to or greater than the First Conversion Milestone, the Second
Conversion Milestone, the Third Conversion Milestone or the Fourth Conversion Milestone, an
Executive shall be entitled to convert such Executive’s Management Incentive Units, in whole
or in part and whether vested or unvested, into Common Units at a conversion ratio equal to
2.4414, 3.0518, 3.8147 or 4.7864 Common Units per Management Incentive Unit, respectively.
If an Executive desires to convert Management Incentive Units as provided in the immediately
preceding sentence, then such Executive shall deliver to the General Partner a written
notice of conversion (a “Conversion Notice”) together with any Certificates representing
such Management Incentive Units duly endorsed for transfer. Upon receipt of the Conversion
Notice and any Certificates representing such Management Incentive Units duly endorsed for
transfer, an Executive shall be deemed to be the holder of record of the number of Common
Units issuable upon conversion, notwithstanding that the Certificates representing such
Common Units shall not then actually be delivered to such person. Upon conversion, each
Management Incentive Unit shall be canceled by the General Partner, subject to the
provisions of Section 5.10(f).

          (ii) [Reserved]

          (iii) If an Executive ceases Continuous Employment other than by reason of death or
disability, then the Board of Directors of the General Partner may, in its sole discretion,
elect to convert all or a portion of the Management Incentive Units held by such Executive
into Common Units at a conversion ratio equal the number of Common Unit Equivalents then
represented by a Management Incentive Unit pursuant to Section 5.10(d).

          (iv) If an Executive ceases Continuous Employment due to death or disability (as
described in Section 5.10(c)(i) or Section 5.10(c)(ii)), all of the Management Incentive
Units held by such Executive shall be automatically converted into Common Units at a
conversion ratio equal the number of Common Unit Equivalents then represented by a
Management Incentive Unit pursuant to Section 5.10(d).

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          (v) All Management Incentive Units shall be fully vested and, at the election of the
Executive, shall be convertible into Common Units at any time and from time to time
following a Change-in-Control at a conversion ratio equal the number of Common Unit
Equivalents represented by a Management Incentive Unit pursuant to Section 5.10(d) at the
time of the Executive’s election.

          (vi) Notwithstanding anything in this Section 5.10(e) to the contrary, in no event
shall the Management Incentive Units, in the aggregate, be convertible into Common Units
having a Percentage Interest of more than 5.1% (after giving effect to the conversion of
such Management Incentive Units) (the “MIU Conversion Limit”). If at any time the
Management Incentive Units would be convertible, except for the preceding sentence, into a
number of Common Units that would exceed the MIU Conversion Limit, then the conversion ratio
with respect to such Management Incentive Units shall be deemed to equal the conversion
ratio that would result in the Management Incentive Units, in the aggregate, being
convertible into Common Units having a Percentage Interest of 5.1% (after giving effect to
the conversion of such Management Incentive Units). Any reduction in the deemed Common Unit
Equivalents pursuant to the previous sentence shall be done on a pro rata basis, such that
the Common Unit Equivalents associated with each Management Incentive Unit is reduced by an
equal amount.

          (vii) If the number of Common Units issued upon conversion of a Management Incentive
Unit is limited by the provisions of Section 5.10(e)(vi) and the Partnership issues
additional Partnership Securities prior to the Anniversary Date, then the holder who
converted such Management Incentive Unit shall be entitled to receive as of the first
distribution of available Cash after each Issuance Date a number of additional Common Units
equal to (A) the number of Common Units which such holder would have been entitled to
receive for such Management Incentive Unit if such conversion had occurred on the date of
the first distribution of Available Cash after each Issuance Date (after taking into
consideration any limitations in Section 5.10(e)(vi)) less (B) the number of Common Units
which such holder has previously received in respect of such Management Incentive Unit. The
provisions of this Section 5.10(e)(vii) shall be applied to each successive issuance of
Partnership Securities prior to the Anniversary Date.

          (f) Reissuance of Management Incentive Units. Management Incentive Units that have been
forfeited or converted as provided in this Section 5.10 may be reissued, with the approval of the
Conflicts Committee, as set forth in this Section 5.10(f):

          (i) In the event any Management Incentive Units are forfeited to the Partnership as
provided in Section 5.10(a) or Section 5.10(c)(iii), then the General Partner may, with the
approval of the Conflicts Committee, reissue such Management Incentive Units to one or more
Persons (a “Grantee”). In the event of any such reissuance, such Management Incentive Units
shall have all of the rights and obligations under this Agreement as if such Management
Incentive Units had been continuously held by the Grantee, subject to any vesting or other
restrictions imposed by the Conflicts Committee.

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          (ii) In the event any Management Incentive Units are converted to Common Units as
provided in Section 5.10(e)(i), Section 5.10(e)(iii) or Section 5.10(e)(iv), then the
General Partner may, with the approval of the Conflicts Committee, reissue the Management
Incentive Units that were so converted to one or more Grantees. In the event of any such
reissuance, such Management Incentive Units shall have all of the rights and obligations
under this Agreement as if such Management Incentive Units had been continuously held by the
Grantee, subject to any vesting or other restrictions and restrictions on conversion
privileges imposed by the Conflicts Committee.

          (iii) In the event the Management Incentive Units are converted to Common Units and
distributions of Available Cash per Common Unit with respect to a Quarter are equal to or
greater than the Seventh Target Distribution, then the General Partner may, with the
approval of the Conflicts Committee, reissue the Management Incentive Units that were so
converted to one or more Grantees. In the event of any such reissuance, (i) the Stated
Distribution with respect to such reissued Management Incentive Units shall be determined by
the Conflicts Committee and (ii) the Management Incentive Units shall be subject to any
vesting or other restrictions imposed by the Conflicts Committee.

          (g) Deemed Distributions; Conversion Ratio Adjustments. For purposes of this Section 5.10,
distributions of Available Cash with respect to a Quarter shall be deemed to have been made when
the Board of Directors of the General Partner determines that such distributions shall be payable
to holders of Common Units. If a conversion event described in Section 5.10(e) occurs during the
period between the end of a Quarter and the date when the Board of Directors of the General Partner
determines the amount of the distribution of Available Cash with respect to such Quarter, then the
Board of Directors of the General Partner may determine that Management Incentive Units represent a
greater or lesser number of Common Unit Equivalents based on the expected distribution of Available
Cash with respect to such Quarter.

          (h) Delivery of Certificates. The issuance or delivery of Certificates representing Common
Units upon the conversion of Management Incentive Units shall be made without charge to an
Executive or for any tax in respect of the issuance or delivery of such Certificates or the
securities represented thereby, and such Certificates shall be issued or delivered in the
respective names of, or in such names as may be directed by, such Executive; provided, however,
that the Partnership shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such Certificate in a name other than that of
the Executive, and the Partnership shall not be required to issue or deliver such Certificate
unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid
to the Partnership the amount of such tax or shall have established to the reasonable satisfaction
of the Partnership that such tax has been paid; provided, further, however, that the Partnership
shall not be required to issue or deliver any such Certificates to the extent such action would be
in violation of federal or state securities laws.

          (i) Adjustment of MIU Conversion Limit, MIU Distribution Limit and MIU Allocation Limit. In
the event that Management Incentive Units are converted pursuant to Section 5.10(e) or are
forfeited pursuant to Section 5.10(c), the MIU Conversion Limit, the MIU

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Distribution Limit and the MIU Allocation Limit (the “MIU Limits”) shall be adjusted by reducing
each MIU Limit by the aggregate Percentage Interest of the forfeited or converted Management
Incentive Units immediately prior to the conversion or forfeiture; provided, that if Management
Incentive Units are subsequently reissued after forfeiture or conversion as provided in Section
5.10(f), then the MIU Limits shall again be adjusted by increasing each MIU Limit (up to a maximum
of 5.1%) by the aggregate Percentage Interest of the Management Incentive Units that were reissued
immediately following such reissuance.

          (j) Fractional Common Units. The Partnership shall not issue fractional Common Units to a
holder of Management Incentive Units upon any conversion of Management Incentive Units or upon the
issuance of additional Common Units as contemplated by Section 5.10(e)(vii). If the conversion of
Management Incentive Units or the issuance of additional Common Units as contemplated by Section
5.10(e)(vii), in the aggregate, would result in the issuance of fractional Common Units to such
holder but for the provisions of this Section 5.10(j), each fractional Common Unit shall be rounded
to the nearest whole Common Unit (and a 0.5 Common Unit shall be rounded to the next higher Common
Unit).

ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS

Section 6.1 Allocations for Capital Account Purposes.

     For purposes of maintaining the Capital Accounts and in determining the rights of the Partners
among themselves, the Partnership’s items of income, gain, loss, deduction, Simulated Depletion,
Simulated Gain and Simulated Loss (computed in accordance with Section 5.5(b)) shall be allocated
among the Partners in each taxable year (or portion thereof) as provided herein below.

          (a) Net Income. After giving effect to the special allocations set forth in Section 6.1(d)
and any allocations to other Partnership Securities, Net Income for each taxable year and all items
of income, gain, loss, deduction, Simulated Depletion, Simulated Gain and Simulated Loss taken into
account in computing Net Income for such taxable year shall be allocated to the Partners in
accordance with their respective Sharing Percentages.

          (b) Net Losses. After giving effect to the special allocations set forth in Section 6.1(d) and
any allocations to other Partnership Securities, Net Losses for each taxable period and all items
of income, gain, loss, deduction, Simulated Depletion, Simulated Gain and Simulated Loss taken into
account in computing Net Losses for such taxable period shall be allocated to the Partners in
accordance with their respective Sharing Percentages; provided that Net Losses shall not be
allocated pursuant to this Section 6.1(b) to the extent that such allocation would cause any
Limited Partner to have a deficit balance in its Adjusted Capital Account at the end of such
taxable year (or increase any existing deficit balance in its Adjusted Capital Account), instead
any such Net Losses shall be allocated to the General Partner.

          (c) Net Termination Gains and Losses. After giving effect to the special allocations set forth
in Section 6.1(d), all items of income, gain, loss, deduction, Simulated

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Depletion, Simulated Gain and Simulated Loss taken into account in computing Net Termination Gain
or Net Termination Loss for such taxable period shall be allocated in the same manner as such Net
Termination Gain or Net Termination Loss is allocated hereunder. All allocations under this Section
6.1(c) shall be made after Capital Account balances have been adjusted by all other allocations
provided under this Section 6.1 and after all distributions of Available Cash provided under
Section 6.3 have been made; provided, however, that solely for purposes of this Section 6.1(c),
Capital Accounts shall not be adjusted for distributions made pursuant to Section 12.4.

          (i) If a Net Termination Gain is recognized (or deemed recognized pursuant to Section
5.5(d)), such Net Termination Gain shall be allocated among the Partners in the following
manner (and the Capital Accounts of the Partners shall be increased by the amount so
allocated in each of the following subclauses, in the order listed, before an allocation is
made pursuant to the next succeeding subclause):

          (A) First, to each Partner having a deficit balance in its Capital Account, in
the proportion that such deficit balance bears to the total deficit balances in the
Capital Accounts of all Partners, until each such Partner has been allocated Net
Termination Gain equal to any such deficit balance in its Capital Account; and

          (B) Second, 100% to all Partners in accordance with their Percentage Interests;
provided, however, that in no event shall the holders of Management Incentive Units
be allocated, in the aggregate, Net Termination Gain in an amount in excess of the
amount that, when all such Net Termination Gain is allocated to all Partners, would
cause the Capital Accounts of the holders of the Management Incentive Units, in the
aggregate, to exceed 5.1% of the Capital Accounts of all Partners immediately
following the allocation of Net Termination Gain (the “MIU Allocation Limit”). If
the holders of Management Incentive Units would be entitled, except for the
preceding sentence, to be allocated Net Termination Gain in an amount in excess of
the MIU Allocation Limit (“Excess Allocations”), then the holders of Management
Incentive Units shall be deemed to hold, in the aggregate, such number of Common
Unit Equivalents as would entitle such holders to an allocation of an amount of Net
Termination Gain such that, when all such Net Termination Gain is allocated to all
Partners, the Capital Accounts of the holders of the Management Incentive Units, in
the aggregate, would equal 5.1% of the Capital Accounts of all Partners immediately
following the allocation of Net Termination Gain, and all Excess Allocations shall
instead be allocated to the Partners in accordance with their respective Percentage
Interests (but ignoring the Percentage Interests of the holders of the Common Unit
Equivalents). Any reduction in the Common Unit Equivalents pursuant to the previous
sentence shall be done on a pro rata basis, such that the Common Unit Equivalents
associated with each Management Incentive Unit is reduced by an equal amount.

          (ii) If a Net Termination Loss is recognized (or deemed recognized pursuant to Section
5.5(d)), such Net Termination Loss shall be allocated among the Partners in the following
manner:

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          (A) First, 100% to all Partners in the proportions of their relative Capital
Accounts per Unit and per General Partner Unit, until the Capital Account in respect
of each Common Unit then Outstanding, in respect of each Management Incentive Unit
then Outstanding and each General Partner Unit then Outstanding have all been
reduced to zero; and

          (B) Second, the balance, if any, 100% to the General Partner.

          (d) Special Allocations. Notwithstanding any other provision of this Section 6.1, the
following special allocations shall be made for such taxable period:

          (i) Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this
Section 6.1, if there is a net decrease in Partnership Minimum Gain during any Partnership
taxable period, each Partner shall be allocated items of Partnership income, gain and
Simulated Gain for such period (and, if necessary, subsequent periods) in the manner and
amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and
1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each
Partner’s Adjusted Capital Account balance shall be determined, and the allocation of
income, gain and Simulated Gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section 6.1(d) with respect to such
taxable period (other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii)).
This Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain chargeback
requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently
therewith.

          (ii) Chargeback of Partner Non-Recourse Debt Minimum Gain. Notwithstanding the other
provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in
Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Partner
Non-Recourse Debt Minimum Gain during any Partnership taxable period, any Partner with a
share of Partner Non-Recourse Debt Minimum Gain at the beginning of such taxable period
shall be allocated items of Partnership income, gain and Simulated Gain for such period
(and, if necessary, subsequent periods) in the manner and amounts provided in Treasury
Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For
purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be
determined, and the allocation of income, gain and Simulated Gain required hereunder shall
be effected, prior to the application of any other allocations pursuant to this Section
6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Sections
6.1(d)(vi) and 6.1(d)(vii), with respect to such taxable period. This Section 6.1(d)(ii) is
intended to comply with the chargeback of items of income and gain requirement in Treasury
Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

          (iii) Priority Allocations. All or any portion of
the remaining items of Partnership gross income or gain for the taxable
period, if any, shall be allocated to the holders of Management
Incentive Units in proportion to and to the extent of the excess of (A)
the cumulative amount of all distributions made to such holder of
Management Incentive Units with respect to each Management Incentive
Unit held by such holder

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from the Closing Date to a date 45 days after the end of the current taxable
year, over (B) the aggregate amount of such items allocated with respect to
such Management Incentive Unit held by such holder pursuant to this Section
6.1(d)(iii) for the current taxable year and all previous taxable years.

          (iv) Qualified Income Offset. In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of
Partnership income, gain and Simulated Gain shall be specially allocated to such Partner in
an amount and manner sufficient to eliminate, to the extent required by the Treasury
Regulations promulgated under Section 704(b) of the Code, the deficit balance, if any, in
its Adjusted Capital Account created by such adjustments, allocations or distributions as
quickly as possible unless such deficit balance is otherwise eliminated pursuant to Section
6.1(d)(i) or (ii).

          (v) Gross Income Allocations. In the event any Partner has a deficit balance in its
Capital Account at the end of any Partnership taxable period in excess of the sum of (A) the
amount such Partner is required to restore pursuant to the provisions of this Agreement and
(B) the amount such Partner is deemed obligated to restore pursuant to Treasury Regulation
Sections 1.704-2(g) and 1.704-2(i)(5), such Partner shall be specially allocated items of
Partnership income, gain and Simulated Gain in the amount of such excess as quickly as
possible; provided, that an allocation pursuant to this Section 6.1(d)(v) shall be made only
if and to the extent that such Partner would have a deficit balance in its Capital Account
as adjusted after all other allocations provided for in this Section 6.1 have been
tentatively made as if this Section 6.1(d)(v) were not in this Agreement.

          (vi) Non-Recourse Deductions. Non-Recourse Deductions for any taxable period shall be
allocated to the Partners in accordance with their respective Sharing Percentages. If the
General Partner determines that the Partnership’s Non-Recourse Deductions should be
allocated in a different ratio to satisfy the safe harbor requirements of the Treasury
Regulations promulgated under Section 704(b) of the Code, the General Partner is authorized,
upon notice to the other Partners, to revise the prescribed ratio to the numerically closest
ratio that does satisfy such requirements.

          (vii) Partner Non-Recourse Deductions. Partner Non-Recourse Deductions for any taxable
period shall be allocated 100% to the Partner that bears the Economic Risk of Loss with
respect to the Partner Non-Recourse Debt to which such Partner Non-Recourse Deductions are
attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one
Partner bears the Economic Risk of Loss with respect to a Partner Non-Recourse Debt, such
Partner Non-Recourse Deductions attributable thereto shall be allocated between or among
such Partners in accordance with the ratios in which they share such Economic Risk of Loss.

          (viii) Non-Recourse Liabilities. For purposes of Treasury Regulation Section
1.752-3(a)(3), the Partners agree that Non-Recourse Liabilities of the
Partnership in excess of the sum of (A) the amount of Partnership
Minimum Gain and (B) the total

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amount of Non-Recourse Built-in Gain shall be allocated among the Partners
in accordance with their respective Sharing Percentages.

          (ix) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required,
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain or Simulated Gain (if the adjustment increases the basis of the
asset) or loss or Simulated Loss (if the adjustment decreases such basis), and such item of
gain, loss, Simulated Gain or Simulated Loss shall be specially allocated to the Partners in
a manner consistent with the manner in which their Capital Accounts are required to be
adjusted pursuant to such Section of the Treasury Regulations.

          (x) Economic Uniformity. With respect to any taxable period ending upon, or after, the
date a Conversion Notice is given by a holder of Management Incentive Units pursuant to
Section 5.10, items of Partnership income and gain shall be allocated 100% to each Partner
holding such to be converted Management Incentive Units until each such Partner has been
allocated an amount of Partnership income or gain that increases the Capital Account
maintained with respect to each to be converted Management Incentive Unit to an amount equal
to the product of (1) the number of Common Units into which such to be converted Management
Incentive Units are to be converted and (2) the then existing Capital Account for each
Common Unit. The purpose for this allocation is to establish uniformity between the Capital
Accounts underlying converted Management Incentive Units and the Capital Accounts underlying
Common Units held by Persons other than the General Partner and its Affiliates other than
the Executives immediately prior to the conversion of Management Incentive Units into Common
Units.

          (xi) Curative Allocation.

          (A) Notwithstanding any other provision of this Section 6.1, other than the
Required Allocations, the Required Allocations shall be taken into account in making
the Agreed Allocations so that, to the extent possible, the net amount of items of
income, gain, loss, deduction, Simulated Depletion, Simulated Gain and Simulated
Loss allocated to each Partner pursuant to the Required Allocations and the Agreed
Allocations, together, shall be equal to the net amount of such items that would
have been allocated to each such Partner under the Agreed Allocations had the
Required Allocations and the related Curative Allocation not otherwise been provided
in this Section 6.1. Notwithstanding the preceding sentence, Required Allocations
relating to (1) Non-Recourse Deductions shall not be taken into account except to
the extent that there has been a decrease in Partnership Minimum Gain and (2)
Partner Non-Recourse Deductions shall not be taken into account except to the extent
that there has been a decrease in Partner Non-Recourse Debt Minimum Gain.
Allocations pursuant to this Section 6.1(d)(xi)(A) shall only be made with respect
to Required Allocations to the extent the General Partner determines that such
allocations will otherwise

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be inconsistent with the economic agreement among the Partners. Further,
allocations pursuant to this Section 6.1(d)(xi)(A) shall be deferred with respect to
allocations pursuant to clauses (1) and (2) hereof to the extent the General Partner
determines that such allocations are likely to be offset by subsequent Required
Allocations.

          (B) The General Partner shall, with respect to each taxable period, (1) apply
the provisions of Section 6.1(d)(xi)(A) in whatever order is most likely to minimize
the economic distortions that might otherwise result from the Required Allocations,
and (2) divide all allocations pursuant to Section 6.1(d)(xi)(A) among the Partners
in a manner that is likely to minimize such economic distortions.

          (xii) Corrective Allocations. In the event of any allocation of Additional Book Basis
Derivative Items or any Book-Down Event or any recognition of a Net Termination Loss, the
following rules shall apply:

          (A) In the case of any allocation of Additional Book Basis Derivative Items
(other than an allocation of Unrealized Gain or Unrealized Loss under Section 5.5(d)
hereof), the General Partner shall allocate additional items of income and gain away
from the holders of Management Incentive Units to the Unitholders and the General
Partner, or additional items of deduction and loss away from the Unitholders and the
General Partner to the holders of Management Incentive Units, to the extent that the
Additional Book Basis Derivative Items allocated to the Unitholders or the General
Partner exceed their Share of Additional Book Basis Derivative Items. For this
purpose, the Unitholders and the General Partner shall be treated as being allocated
Additional Book Basis Derivative Items to the extent that such Additional Book Basis
Derivative Items have reduced the amount of income that would otherwise have been
allocated to the Unitholders or the General Partner under the Partnership Agreement
(e.g., Additional Book Basis Derivative Items taken into account in computing cost
of goods sold would reduce the amount of book income otherwise available for
allocation among the Partners). Any allocation made pursuant to this Section
6.1(d)(xii)(A) shall be made after all of the other Agreed Allocations have been
made as if this Section 6.1(d)(xii) were not in this Agreement and, to the extent
necessary, shall require the reallocation of items that have been allocated pursuant
to such other Agreed Allocations.

          (B) In the case of any negative adjustments to the Capital Accounts of the
Partners resulting from a Book-Down Event or from the recognition of a Net
Termination Loss, such negative adjustment (1) shall first be allocated, to the
extent of the Aggregate Remaining Net Positive Adjustments, in such a manner, as
determined by the General Partner, that to the extent possible the aggregate Capital
Accounts of the Partners will equal the amount that would have been the Capital
Account balance of the Partners if no prior Book-Up Events had occurred, and (2) any
negative adjustment in excess of the Aggregate

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Remaining Net Positive Adjustments shall be allocated pursuant to Section 6.1(c)
hereof.

          (C) In making the allocations required under this Section 6.1(d)(xii), the
General Partner may apply whatever conventions or other methodology it determines
will satisfy the purpose of this Section 6.1(d)(xii). The General Partner may, in
its discretion, amend the provisions of this Section 6.1(d)(xii) to provide for an
alternative mechanism for making special allocations to holders of Management
Incentive Units and Common Units if it determines that such an alternative mechanism
would be administrative convenient.

Section 6.2 Allocations for Tax Purposes.

          (a) Except as otherwise provided herein, for federal income tax purposes, each item of income,
gain, loss and deduction shall be allocated among the Partners in the same manner as its
correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 6.1.

          (b) The deduction for depletion with respect to each separate oil and gas property (as defined
in Section 614 of the Code) shall be computed for federal income tax purposes separately by the
Partners rather than by the Partnership in accordance with Section 613A(c)(7)(D) of the Code.
Except as provided in Section 6.2(c)(iii), for purposes of such computation (before taking into
account any adjustments resulting from an election made by the Partnership under Section 754 of the
Code), the adjusted tax basis of each oil and gas property (as defined in Section 614 of the Code)
shall be allocated among the Partners in accordance with their respective Sharing Percentages.

          Each Partner shall separately keep records of his share of the adjusted tax basis in each oil
and gas property, allocated as provided above, adjust such share of the adjusted tax basis for any
cost or percentage depletion allowable with respect to such property, and use such adjusted tax
basis in the computation of its cost depletion or in the computation of his gain or loss on the
disposition of such property by the Partnership.

          (c) Except as provided in Section 6.2(c)(iii), for the purposes of the separate computation of
gain or loss by each Partner on the sale or disposition of each separate oil and gas property (as
defined in Section 614 of the Code), the Partnership’s allocable share of the “amount realized” (as
such term is defined in Section 1001(b) of the Code) from such sale or disposition shall be
allocated for federal income tax purposes among the Partners as follows:

          (i) first, to the extent such amount realized constitutes a recovery of the Simulated
Basis of the property, to the Partners in the same proportion as the depletable basis of
such property was allocated to the Partners pursuant to Section 6.2(b) (without regard to
any special allocation of basis under Section 6.2(c)(iii);

          (ii) second, the remainder of such amount realized, if any, to the Partners so that, to
the maximum extent possible, the amount realized allocated to each

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Partner under this Section 6.2(c)(ii) will equal such Partner’s share of the Simulated
Gain recognized by the Partnership from such sale or disposition.

          (iii) The Partners recognize that with respect to Contributed Property and Adjusted
Property there will be a difference between the Carrying Value of such property at the time
of contribution or revaluation, as the case may be, and the adjusted tax basis of such
property at that time. All items of tax depreciation, cost recovery, amortization, adjusted
tax basis of depletable properties, amount realized and gain or loss with respect to such
Contributed Property and Adjusted Property shall be allocated among the Partners to take
into account the disparities between the Carrying Values and the adjusted tax basis with
respect to such properties in accordance with the principles of Treasury Regulation Section
1.704-3(d).

          (iv) Any elections or other decisions relating to such allocations shall be made by the
Board of Directors in any manner that reasonably reflects the purpose and intention of the
Agreement.

          (d) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or
Adjusted Property, other than oil and gas properties pursuant to Section 6.2(c), items of income,
gain, loss, depreciation, amortization and cost recovery deductions shall be allocated for federal
income tax purposes among the Partners as follows:

          (i) (A) In the case of a Contributed Property, such items attributable thereto shall be
allocated among the Partners in the manner provided under Section 704(c) of the Code that
takes into account the variation between the Agreed Value of such property and its adjusted
basis at the time of contribution; and (B) any item of Residual Gain or Residual Loss
attributable to a Contributed Property shall be allocated among the Partners in the same
manner as its correlative item of “book” gain or loss is allocated pursuant to Section 6.1.

          (ii) (A) In the case of an Adjusted Property, such items shall (1) first, be allocated
among the Partners in a manner consistent with the principles of Section 704(c) of the Code
to take into account the Unrealized Gain or Unrealized Loss attributable to such property
and the allocations thereof pursuant to Section 5.5(d)(i) or 5.5(d)(ii), and (2) second, in
the event such property was originally a Contributed Property, be allocated among the
Partners in a manner consistent with Section 6.2(d)(i)(A); and (B) any item of Residual Gain
or Residual Loss attributable to an Adjusted Property shall be allocated among the Partners
in the same manner as its correlative item of “book” gain or loss is allocated pursuant to
Section 6.1.

          (iii) The General Partner shall apply the principles of Treasury Regulation Section
1.704-3(d) to eliminate Book-Tax Disparities.

          (e) For the proper administration of the Partnership and for the preservation of uniformity of
the Limited Partner Interests (or any class or classes thereof), the General Partner shall (i)
adopt such conventions as it deems appropriate in determining the amount of depreciation,
amortization and cost recovery deductions; (ii) make special allocations for federal

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income tax purposes of income (including gross income) or deductions; and (iii) amend the
provisions of this Agreement as appropriate (x) to reflect the proposal or promulgation of Treasury
Regulations under Section 704(b) or Section 704(c) of the Code or (y) otherwise to preserve or
achieve uniformity of the Limited Partner Interests (or any class or classes thereof). The General
Partner may adopt such conventions, make such allocations and make such amendments to this
Agreement as provided in this Section 6.2(e) only if such conventions, allocations or amendments
would not have a material adverse effect on the Partners, the holders of any class or classes of
Limited Partner Interests issued and Outstanding or the Partnership, and if such allocations are
consistent with the principles of Section 704 of the Code.

          (f) The General Partner may determine to depreciate or amortize the portion of an adjustment
under Section 743(b) of the Code attributable to unrealized appreciation in any Adjusted Property
(to the extent of the unamortized Book-Tax Disparity) using a predetermined rate derived from the
depreciation or amortization method and useful life applied to the Partnership’s common basis of
such property, despite any inconsistency of such approach with Treasury Regulation Section
1.167(c)-l(a)(6), Treasury Regulation Section 1.197-2(g)(3), the legislative history of Section 743
of the Code or any successor regulations thereto. If the General Partner determines that such
reporting position cannot reasonably be taken, the General Partner may adopt depreciation and
amortization conventions under which all purchasers acquiring Limited Partner Interests in the same
month would receive depreciation and amortization deductions, based upon the same applicable rate
as if they had purchased a direct interest in the Partnership’s property. If the General Partner
chooses not to utilize such aggregate method, the General Partner may use any other depreciation
and amortization conventions to preserve the uniformity of the intrinsic tax characteristics of any
Limited Partner Interests, so long as such conventions would not have a material adverse effect on
the Limited Partners or the Record Holders of any class or classes of Limited Partner Interests.

          (g) Any gain allocated to the Partners upon the sale or other taxable disposition of any
Partnership asset shall, to the extent possible, after taking into account other required
allocations of gain pursuant to this Section 6.2, be characterized as Recapture Income in the same
proportions and to the same extent as such Partners (or their predecessors in interest) have been
allocated any deductions directly or indirectly giving rise to the treatment of such gains as
Recapture Income.

          (h) All items of income, gain, loss, deduction and credit recognized by the Partnership for
federal income tax purposes and allocated to the Partners in accordance with the provisions hereof
shall be determined without regard to any election under Section 754 of the Code that may be made
by the Partnership; provided, however, that such allocations, once made, shall be adjusted (in the
manner determined by the General Partner) to take into account those adjustments permitted or
required by Sections 734 and 743 of the Code.

          (i) Each item of Partnership income, gain, loss and deduction, for federal income tax
purposes, shall be determined on an annual basis and prorated on a monthly basis and shall be
allocated to the Partners as of the opening of the New York Stock Exchange on the first Business
Day of each month; provided, however, that such items for the period beginning on the Closing Date
and ending on the last day of the month in which the Option Closing Date or the expiration of the
Over-Allotment Option occurs shall be allocated to the Partners as of the

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opening of the New York Stock Exchange on the first Business Day of the next succeeding month;
and provided, further, that gain or loss on a sale or other disposition of any assets of the
Partnership or any other extraordinary item of income or loss realized and recognized other than in
the ordinary course of business, as determined by the General Partner, shall be allocated to the
Partners as of the opening of the New York Stock Exchange on the first Business Day of the month in
which such gain or loss is recognized for federal income tax purposes. The General Partner may
revise, alter or otherwise modify such methods of allocation to the extent permitted or required by
Section 706 of the Code and the regulations or rulings promulgated thereunder.

          (j) Allocations that would otherwise be made to a Limited Partner under the provisions of this
Article VI shall instead be made to the beneficial owner of Limited Partner Interests held by a
nominee in any case in which the nominee has furnished the identity of such owner to the
Partnership in accordance with Section 6031(c) of the Code or any other method determined by the
General Partner.

Section 6.3 Requirement and Characterization of Distributions; Distributions to Record Holders.

          (a) Except as described in Section 6.3(b), Section 6.3(d) or Section 6.3(e), within 45 days
following the end of each Quarter commencing with the Quarter ending on September 30, 2007, an
amount equal to 100% of Available Cash with respect to such Quarter shall, subject to Section
17-607 of the Delaware Act, be distributed to the Partners in accordance with this Article VI by
the Partnership to the Partners in accordance with their respective Percentage Interests as of the
Record Date selected by the General Partner. All distributions required to be made under this
Agreement shall be made subject to Section 17-607 of the Delaware Act.

          (b) The General Partner may treat taxes paid by the Partnership on behalf of, or amounts
withheld with respect to, all or less than all of the Partners, as a distribution of Available Cash
to such Partners.

          (c) Each distribution in respect of a Partnership Interest shall be paid by the Partnership,
directly or through the Transfer Agent or through any other Person or agent, only to the Record
Holder of such Partnership Interest as of the Record Date set for such distribution. Such payment
shall constitute full payment and satisfaction of the 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.

          (d) Notwithstanding anything in this Agreement to the contrary, in no event shall the holders
of Management Incentive Units receive, in the aggregate, distributions of Available Cash with
respect to a Quarter in an amount in excess of 5.1% of all distributions of Available Cash with
respect to such Quarter (the “MIU Distribution Limit”). If the holders of Management Incentive
Units would be entitled, except for the preceding sentence, to receive distributions of Available
Cash with respect to a Quarter in an amount in excess of the MIU Distribution Limit (“Excess
Available Cash”), then with respect to such Quarter the holders of Management Incentive Units shall
be deemed to hold, in the aggregate, such number of Common Unit Equivalents as would entitle such
holders to 5.1% of all distributions of Available Cash

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with respect to such Quarter and all Excess Available Cash shall be distributed by the
Partnership to the Partners in accordance with their respective Percentage Interests (but ignoring
the Percentage Interests of the holders of the Common Unit Equivalents). Any reduction in the
deemed Common Unit Equivalents pursuant to the previous sentence shall be done on a pro rata basis,
such that the Common Unit Equivalents associated with each Management Incentive Unit is reduced by
an equal amount.

          (e) With respect to the distribution for the Quarter in which the Closing Date occurs, the
amount of Available Cash distributed to the Partners in accordance with Section 6.3(a) shall equal
100% of the Available Cash with respect to such Quarter multiplied by a fraction of which the
numerator is the number of days in the period commencing on the Closing Date and ending on the last
day of the Quarter in which the Closing Date occurs and of which the denominator is the number of
days in such Quarter. The remaining Available Cash with respect to such Quarter shall be
distributed to the Partners of the Partnership immediately prior to the closing of the Initial
Closing Date Pro Rata.

Section 6.4 Special Provisions Relating to the Holders of Management Incentive Units.

     The holder of a Management Incentive Unit that has converted into one or more Common Units
pursuant to Section 5.10 shall not be issued a Certificate representing Common Units pursuant to
Section 4.1 and shall not be permitted to transfer its converted Management Incentive Units to a
Person that is not a Permitted Transferee until such time as the General Partner determines, based
on advice of counsel, that a converted Management Incentive Unit should have, as a substantive
matter, like intrinsic economic and United States federal income tax characteristics, in all
material respects, to the intrinsic economic and United States federal income tax characteristics
of the Common Units held by Persons other than the General Partner and its Affiliates immediately
prior to the conversion of such Management Incentive Units into Common Units. In connection with
the condition imposed by this Section 6.4, the General Partner shall take whatever steps are
required to provide economic uniformity to the converted Management Incentive Units in preparation
for a transfer of such converted Management Incentive Units, including the application of Section
6.1(d)(xii); provided, however, that, except for the application of Section 6.1(d)(xii), the
General Partner shall not take any such steps which would have a material adverse effect on the
Unitholders holding Common Units.

ARTICLE VII

MANAGEMENT AND OPERATION OF BUSINESS

Section 7.1 Management.

          (a) The General Partner shall conduct, direct and manage all activities of the Partnership.
Except as otherwise expressly provided in this Agreement, all management powers over the business
and affairs of the Partnership shall be exclusively vested in the General Partner, and no Limited
Partner or Assignee shall have any management power over the business and affairs of the
Partnership. In addition to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or that are granted to the General Partner under any

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other provision of this Agreement, the General Partner, subject to Section 7.3, shall
have full power and authority to do all things and on such terms as it determines to be necessary
or appropriate to conduct the business of the Partnership, to exercise all powers set forth in
Section 2.5 and to effectuate the purposes set forth in Section 2.4, including the following:

          (i) the making of any expenditures, the lending or borrowing of money, the assumption
or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance
of evidences of indebtedness, including indebtedness that is convertible into Partnership
Securities, and the incurring of any other obligations;

          (ii) the making of tax, regulatory and other filings, or rendering of periodic or other
reports to governmental or other agencies having jurisdiction over the business or assets of
the Partnership;

          (iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or
exchange of any or all of the assets of the Partnership or the merger or other combination
of the Partnership with or into another Person (the matters described in this clause (iii)
being subject, however, to any prior approval that may be required by Section 7.3 and
Article XIV);

          (iv) the use of the assets of the Partnership (including cash on hand) for any purpose
consistent with the terms of this Agreement, including the financing of the conduct of the
operations of the Partnership Group; subject to Section 7.6(a), the lending of funds to
other Persons (including other Group Members); the repayment or guarantee of obligations of
any Group Member; and the making of capital contributions to any Group Member;

          (v) the negotiation, execution and performance of any contracts, conveyances or other
instruments (including instruments that limit the liability of the Partnership under
contractual arrangements to all or particular assets of the Partnership, with the other
party to the contract to have no recourse against the General Partner or its assets other
than its interest in the Partnership, even if same results in the terms of the transaction
being less favorable to the Partnership than would otherwise be the case);

          (vi) the distribution of Partnership cash;

          (vii) the selection and dismissal of employees
(including employees having titles such as “president,” “vice
president,” “secretary” and “treasurer”) and agents, outside attorneys,
accountants, consultants and contractors and the determination of their
compensation and other terms of employment or hiring;

          (viii) the maintenance of insurance for the benefit of the Partnership Group, the
Partners and Indemnitees;

          (ix) the formation of, or acquisition of an interest in, and the contribution of
property and the making of loans to, any further limited or general partnerships, joint
ventures, corporations, limited liability companies or other

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relationships (including the
acquisition of interests in, and the contributions of property to, any Group Member from
time to time) subject to the restrictions set forth in Section 2.4;

          (x) the control of any matters affecting the rights and obligations of the Partnership,
including the bringing and defending of actions at law or in equity and otherwise engaging
in the conduct of litigation, arbitration or mediation and the incurring of legal expense
and the settlement of claims and litigation;

          (xi) the indemnification of any Person against liabilities and contingencies to the
extent permitted by law;

          (xii) the entering into of listing agreements with any National Securities Exchange and
the delisting of some or all of the Limited Partner Interests from, or requesting that
trading be suspended on, any such exchange (subject to any prior approval that may be
required under Section 4.7);

          (xiii) the purchase, sale or other acquisition or disposition of Partnership
Securities, or the issuance of options, rights, warrants, appreciation rights and tracking
and phantom interests relating to Partnership Securities;

          (xiv) the undertaking of any action in connection with the Partnership’s participation
in any Group Member; and

          (xv) the entering into of agreements with any of its Affiliates to render services to a
Group Member or to itself in the discharge of its duties as General Partner of the
Partnership.

          (b) Notwithstanding any other provision of this Agreement, any
Group Member Agreement, the Delaware Act or any applicable law, rule or
regulation, each of the Partners and the Assignees and each other Person who
may acquire an interest in Partnership Securities hereby (i) approves, ratifies
and confirms the execution, delivery and performance by the parties thereto of
this Agreement, the Group Member Agreement of each other Group Member, the
Underwriting Agreement, the Amended and Restated
Administrative Services Agreement, the Contribution Agreement
and the other agreements described in or filed as
exhibits to the Registration Statement that are related to the
transactions contemplated by the Registration Statement; (ii) agrees that the
General Partner (on its own or through any officer of the Partnership) is
authorized to execute, deliver and perform the agreements referred to in clause
(i) of this sentence and the other agreements, acts, transactions and matters
described in or contemplated by the Registration Statement on behalf of the
Partnership without any further act, approval or vote of the Partners or the
Assignees or the other Persons who may acquire an interest in Partnership
Securities; and (iii) agrees that the execution, delivery or performance by the
General Partner, any Group Member or any Affiliate of any of them of this
Agreement or any agreement authorized or permitted under this Agreement
(including the exercise by the General Partner or any Affiliate of the General
Partner of the rights accorded pursuant to Article XV) shall not constitute a
breach by the General Partner of any duty that the General Partner may owe

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the Partnership or the Limited Partners or any other Persons under this Agreement
(or any other agreements) or of any duty stated or implied by law or equity.

Section 7.2 Certificate of Limited Partnership.

     The General Partner has caused the Certificate of Limited Partnership to be filed with the
Secretary of State of the State of Delaware as required by the Delaware Act. The General Partner
shall use all reasonable efforts to cause to be filed such other certificates or documents that the
General Partner determines to be necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which the limited
partners have limited liability) in the State of Delaware or any other state in which the
Partnership may elect to do business or own property. To the extent the General Partner determines
such action to be necessary or appropriate, the General Partner shall file amendments to and
restatements of the Certificate of Limited Partnership and do all things to maintain the
Partnership as a limited partnership (or a partnership or other entity in which the limited
partners have limited liability) under the laws of the State of Delaware or of any other state in
which the Partnership may elect to do business or own property. Subject to the terms of Section
3.4(a), the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate of
Limited Partnership, any qualification document or any amendment thereto to any Limited Partner.

Section 7.3 Restrictions on the General Partner’s Authority.

     Except as provided in Articles XII and XIV, the General Partner may not sell, exchange or
otherwise dispose of all or substantially all of the assets of the Partnership Group, taken as a
whole, in a single transaction or a series of related transactions (including by way of merger,
consolidation, other combination or sale of ownership interests of the Partnership’s Subsidiaries)
without the approval of holders of a Unit Majority; provided, however, that this provision shall
not preclude or limit the General Partner’s ability to mortgage, pledge, hypothecate or grant a
security interest in all or substantially all of the assets of the Partnership Group and shall not
apply to any forced sale of any or all of the assets of the Partnership Group pursuant to the
foreclosure of, or other realization upon, any such encumbrance. Without the approval of holders of
a Unit Majority, the General Partner shall not, on behalf of the Partnership, except as permitted
under Sections 4.6, 11.1 and 11.2, elect or cause the Partnership to elect a successor general
partner of the Partnership.

Section 7.4 Reimbursement of the General Partner.

          (a) Except as provided in this Section 7.4 and elsewhere in this Agreement, the General
Partner shall not be compensated for its services as a general partner or managing member of any
Group Member.

          (b) Subject to any limitations contained in the Amended and Restated Administrative Services
Agreement, the General Partner shall be reimbursed on a quarterly basis, or such other basis as the
General Partner may determine, for (i) all direct and indirect expenses it incurs or payments it
makes on behalf of the Partnership Group (including salary, bonus, incentive compensation and other
amounts paid to any Person, including Affiliates of the General Partner to perform services for the
Partnership Group or for the General Partner in the

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discharge of its duties to the Partnership Group), and (ii) all other expenses allocable to the Partnership Group or otherwise incurred by the
General Partner in connection with operating the Partnership Group’s business (including expenses
allocated to the General Partner by its Affiliates). The General Partner shall determine the
expenses that are allocable to the Partnership Group. Reimbursements pursuant to this Section 7.4
shall be in addition to any reimbursement to the General Partner as a result of indemnification
pursuant to Section 7.7.

          (c) The General Partner, without the approval of the Limited Partners (who shall have no right
to vote in respect thereof), may propose and adopt on behalf of the Partnership employee benefit
plans, employee programs and employee practices (including plans, programs and practices involving
the issuance of Partnership Securities or options to purchase or rights, warrants or appreciation
rights or phantom or tracking interests relating to Partnership Securities), or cause the Partnership to issue Partnership Securities in
connection with, or pursuant to, any employee benefit plan, employee program or employee practice
maintained or sponsored by the General Partner or any of its Affiliates, in each case for the
benefit of employees and directors of the General Partner or its Affiliates, or any Group Member or
its Affiliates, or any of them, in respect of services performed, directly or indirectly, for the
benefit of the Partnership Group. The Partnership agrees to issue and sell to the General Partner
or any of its Affiliates any Partnership Securities that the General Partner or such Affiliates are
obligated to provide to any employees and directors pursuant to any such employee benefit plans,
employee programs or employee practices. Expenses incurred by the General Partner in connection
with any such plans, programs and practices (including the net cost to the General Partner or such
Affiliates of Partnership Securities purchased by the General Partner or such Affiliates from the
Partnership to fulfill options or awards under such plans, programs and practices) shall be
reimbursed in accordance with Section 7.4(b). Any and all obligations of the General Partner under
any employee benefit plans, employee programs or employee practices adopted by the General Partner
as permitted by this Section 7.4(c) shall constitute obligations of the General Partner hereunder
and shall be assumed by any successor General Partner approved pursuant to Section 11.1 or 11.2 or
the transferee of or successor to all of the General Partner’s General Partner Interest pursuant to
Section 4.6.

Section 7.5 Outside Activities.

          (a) After the Closing Date, the General Partner, for so long as it is the General Partner of
the Partnership (i) agrees that its sole business will be to act as a general partner or managing
member, as the case may be, of the Partnership and any other partnership or limited liability
company of which the Partnership is, directly or indirectly, a partner or member and to undertake
activities that are ancillary or related thereto (including being a limited partner in the
Partnership) and (ii) shall not engage in any business or activity or incur any debts or
liabilities except in connection with or incidental to (A) its performance as general partner or
managing member, if any, of one or more Group Members or as described in or contemplated by the
Registration Statement or (B) the acquiring, owning or disposing of debt or equity securities in
any Group Member.

          (b) Subject to the terms of Section 7.5(a), each Indemnitee (other than the General Partner)
shall have the right to engage in businesses of every type and description and other activities for
profit and to engage in and possess an interest in other business ventures of

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any and every type or description, whether in businesses engaged in or anticipated to be engaged in by any Group Member,
independently or with others, including business interests and activities in direct competition
with the business and activities of any Group Member, and none of the same shall constitute a
breach of this Agreement or any duty expressed or implied by law to any Group Member or any Partner
or Assignee. None of any Group Member, any Limited Partner or any other Person shall have any rights by virtue of this Agreement, any Group
Member Agreement, or the partnership relationship established hereby in any business ventures of
any Indemnitee. Notwithstanding anything to the contrary in this Agreement, (i) the engaging in
competitive activities by any Indemnitees (other than the General Partner) in accordance with the
provisions of this Section 7.5 is hereby approved by the Partnership and all Partners, (ii) it
shall be deemed not to be a breach of any fiduciary duty or any other obligation of any type
whatsoever of the General Partner or of any Indemnitee for the Indemnitees (other than the General
Partner) to engage in such business interests and activities in preference to or to the exclusion
of the Partnership and (iii) the Indemnitees shall have no obligation hereunder or as a result of
any duty expressed or implied by law to present business opportunities to the Partnership.

          (c) Subject to the terms of Section 7.5(a) and Section 7.5(b), but otherwise notwithstanding
anything to the contrary in this Agreement, the doctrine of corporate opportunity, or any analogous
doctrine, shall not apply to any Indemnitee (including the General Partner) and no Indemnitee
(including the General Partner) who acquires knowledge of a potential transaction, agreement,
arrangement or other matter that may be an opportunity for the Partnership shall have any duty to
communicate or offer such opportunity to the Partnership, and such Indemnitee (including the
General Partner) shall not be liable to the Partnership, to any Limited Partner or any other Person
for breach of any fiduciary or other duty by reason of the fact that such Indemnitee (including the
General Partner) pursues or acquires for itself, directs such opportunity to another Person or does
not communicate such opportunity or information to the Partnership; provided such Indemnitee does
not engage in such business or activity as a result of or using confidential or proprietary
information provided by or on behalf of the Partnership to such Indemnitee.

          (d) The General Partner and each of its Affiliates may acquire Units or other Partnership
Securities in addition to those acquired on the Closing Date and, except as otherwise provided in
this Agreement, shall be entitled to exercise, at their option, all rights relating to all Units or
other Partnership Securities acquired by them. The term “Affiliates” when used in this Section
7.5(d) with respect to the General Partner shall not include any Group Member.

          (e) Notwithstanding anything to the contrary in this Agreement, to the extent that any
provision of this Section 7.5 purports or is interpreted to have the effect of restricting,
eliminating or otherwise modifying the fiduciary duties that might otherwise, as a result of
Delaware or other applicable law, be owed by the General Partner to the Partnership and its Limited
Partners, or to constitute a waiver or consent by the Limited Partners to any such fiduciary duty,
such provisions in this Section 7.5 shall be deemed to have been approved by the Partners.

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Section 7.6 Loans from the General Partner; Loans or Contributions from the
Partnership or Group Members.

          (a) The General Partner or any of its Affiliates may lend to any Group Member, and any Group
Member may borrow from the General Partner or any of its Affiliates, funds needed or desired by the
Group Member for such periods of time and in such amounts as the General Partner may determine;
provided, however, that in any such case the lending party may not charge the borrowing party
interest at a rate greater than the rate that would be charged the borrowing party or impose terms
less favorable to the borrowing party than would be charged or imposed on the borrowing party by
unrelated lenders on comparable loans made on an arm’s-length basis (without reference to the
lending party’s financial abilities or guarantees), all as determined by the General Partner. The
borrowing party shall reimburse the lending party for any costs (other than any additional interest
costs) incurred by the lending party in connection with the borrowing of such funds. For purposes
of this Section 7.6(a) and Section 7.6(b), the term “Group Member” shall include any Affiliate of a
Group Member that is controlled by the Group Member.

          (b) The Partnership may lend or contribute to any Group Member, and any Group Member may
borrow from the Partnership, funds on terms and conditions determined by the General Partner. No
Group Member may lend funds to the General Partner or any of its Affiliates (other than another
Group Member).

Section 7.7 Indemnification.

          (a) To the fullest extent permitted by law but subject to the limitations expressly provided
in this Agreement, all Indemnitees shall be indemnified and held harmless by the Partnership from
and against any and all losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise, by reason of its status as an Indemnitee; provided, that the
Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable
judgment entered by a court of competent jurisdiction determining that, in respect of the matter
for which the Indemnitee is seeking indemnification pursuant to this Section 7.7, the Indemnitee
acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter,
acted with knowledge that the Indemnitee’s conduct was unlawful; provided, further, no
indemnification pursuant to this Section 7.7 shall be available to the General Partner or its
Affiliates (other than a Group Member) with respect to its or their obligations incurred pursuant
to the Underwriting Agreement, the Amended and Restated Administrative Services Agreement or the
Contribution Agreement (other than obligations incurred by the General Partner on behalf of the
Partnership). Any indemnification pursuant to this Section 7.7 shall be made only out of the assets
of the Partnership, it being agreed that the General Partner shall not be personally liable for such indemnification and shall have no obligation to contribute
or loan any monies or property to the Partnership to enable it to effectuate such indemnification.

          (b) To the fullest extent permitted by law, expenses (including legal fees and expenses)
incurred by an Indemnitee who is indemnified pursuant to Section 7.7(a) in defending

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any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Partnership prior
to a determination that the Indemnitee is not entitled to be indemnified upon receipt by the
Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall
be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section
7.7.

          (c) The indemnification provided by this Section 7.7 shall be in addition to any other rights
to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the holders of
Outstanding Limited Partner Interests, as a matter of law or otherwise, both as to actions in the
Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity (including any
capacity under the Underwriting Agreement), and shall continue as to an Indemnitee who has ceased
to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          (d) The Partnership may purchase and maintain (or reimburse the General Partner or its
Affiliates for the cost of) insurance, on behalf of the General Partner, its Affiliates and such
other Persons as the General Partner shall determine, against any liability that may be asserted
against, or expense that may be incurred by, such Person in connection with the Partnership’s
activities or such Person’s activities on behalf of the Partnership, regardless of whether the
Partnership would have the power to indemnify such Person against such liability under the
provisions of this Agreement.

          (e) For purposes of this Section 7.7, the Partnership shall be deemed to have requested an
Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan
or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning
of Section 7.7(a); and action taken or omitted by it with respect to any employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in the best interest of
the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in the
best interests of the Partnership.

          (f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason
of the indemnification provisions set forth in this Agreement.

          (g) An Indemnitee shall not be denied indemnification in whole or in part under this Section
7.7 because the Indemnitee had an interest in the transaction with respect to
which the indemnification applies if the transaction was otherwise permitted by the terms
of this Agreement.

          (h) The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs,
successors, assigns and administrators and shall not be deemed to create any rights for the benefit
of any other Persons.

          (i) No amendment, modification or repeal of this Section 7.7 or any provision hereof shall in
any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be
indemnified by the Partnership, nor the obligations of the Partnership to

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indemnify any such Indemnitee under and in accordance with the provisions of this Section 7.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless
of when such claims may arise or be asserted.

Section 7.8 Liability of Indemnitees.

          (a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall
be liable for monetary damages to the Partnership, the Limited Partners, the Assignees or any other
Persons who have acquired interests in the Partnership Securities, for losses sustained or
liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a
final and non-appealable judgment entered by a court of competent jurisdiction determining that, in
respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful
misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct
was criminal.

          (b) Subject to its obligations and duties as General Partner set forth in Section 7.1(a), the
General Partner may exercise any of the powers granted to it by this Agreement and perform any of
the duties imposed upon it hereunder either directly or by or through its agents, and the General
Partner shall not be responsible for any misconduct or negligence on the part of any such agent
appointed by the General Partner in good faith.

          (c) To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary
duties) and liabilities relating thereto to the Partnership or to the Partners, the General Partner
and any other Indemnitee acting in connection with the Partnership’s business or affairs shall not
be liable to the Partnership or to any Partner for its good faith reliance on the provisions of
this Agreement.

          (d) Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be
prospective only and shall not in any way affect the limitations on the liability of the
Indemnitees under this Section 7.8 as in effect immediately prior to such amendment, modification
or repeal with respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such claims may arise or
be asserted.

Section 7.9 Resolution of Conflicts of Interest; Standards of Conduct and Modification
of Duties.

          (a) Unless otherwise expressly provided in this Agreement or any Group Member Agreement,
whenever a potential conflict of interest exists or arises between the General Partner or any of
its Affiliates, on the one hand, and the Partnership, any Group Member, any Partner or any
Assignee, on the other, any resolution or course of action by the General Partner or its Affiliates
in respect of such conflict of interest shall be permitted and deemed approved by all Partners, and
shall not constitute a breach of this Agreement, of any Group Member Agreement, of any agreement
contemplated herein or therein, or of any duty stated or implied by law or equity, if the
resolution or course of action in respect of such conflict of interest is (i) approved by Special
Approval, (ii) approved by the vote of a majority of the

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Common Units (excluding Common Units owned by the General Partner and its Affiliates), (iii) on terms no less favorable to the Partnership
than those generally being provided to or available from unrelated third parties or (iv) fair and
reasonable to the Partnership, taking into account the totality of the relationships between the
parties involved (including other transactions that may be particularly favorable or advantageous
to the Partnership). The General Partner shall be authorized but not required in connection with
its resolution of such conflict of interest to seek Special Approval of such resolution, and the
General Partner may also adopt a resolution or course of action that has not received Special
Approval. If Special Approval is sought, then it shall be presumed that, in making its decision,
the Conflicts Committee acted in good faith, and if Special Approval is not sought and the Board of
Directors of the General Partner determines that the resolution or course of action taken with
respect to a conflict of interest satisfies either of the standards set forth in clauses (iii) or
(iv) above, then it shall be presumed that, in making its decision, the Board of Directors acted in
good faith, and in either case, in any proceeding brought by any Limited Partner or Assignee or by
or on behalf of such Limited Partner or Assignee or any other Limited Partner or Assignee or the
Partnership challenging such approval, the Person bringing or prosecuting such proceeding shall
have the burden of overcoming such presumption. Notwithstanding anything to the contrary in this
Agreement or any duty otherwise existing at law or equity, the existence of the conflicts of
interest described in the Registration Statement are hereby approved by all Partners and shall not
constitute a breach of this Agreement.

          (b) Whenever the General Partner makes a determination or takes or declines to take any other
action, or any of its Affiliates causes it to do so, in its capacity as the general partner of the
Partnership as opposed to in its individual capacity, whether under this Agreement, any Group
Member Agreement or any other agreement contemplated hereby or otherwise, then, unless another
express standard is provided for in this Agreement, the General Partner, or such Affiliates causing
it to do so, shall make such determination or take or decline to take such other action in good
faith and shall not be subject to any other or different standards imposed by this Agreement, any
Group Member Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity. In order for a
determination or other action to be in “good faith” for purposes of this Agreement, the Person or
Persons making such determination or taking or declining to take such other action must believe
that the determination or other action is in the best interests of the Partnership.

          (c) Whenever the General Partner makes a determination or takes or declines to take any other
action, or any of its Affiliates causes it to do so, in its individual capacity as opposed to in
its capacity as the general partner of the Partnership, whether under this Agreement, any Group
Member Agreement or any other agreement contemplated hereby or otherwise, then the General Partner,
or such Affiliates causing it to do so, are entitled to make such determination or to take or
decline to take such other action free of any fiduciary duty or obligation whatsoever to the
Partnership, any Limited Partner or Assignee, and the General Partner, or such Affiliates causing
it to do so, shall not be required to act in good faith or pursuant to any other standard imposed
by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the
Delaware Act or any other law, rule or regulation or at equity. By way of illustration and not of
limitation, whenever the phrase, “at the option of the General Partner,” or some variation of that
phrase, is used in this Agreement, it

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indicates that the General Partner is acting in its
individual capacity. For the avoidance of doubt, whenever the General Partner votes or transfers
its General Partner Interest, to the extent permitted under this Agreement, or refrains from voting
or transferring its General Partner Interest, it shall be acting in its individual capacity. The
General Partner’s organizational documents may provide that determinations to take or decline to
take any action in its individual, rather than representative, capacity may or shall be determined
by its members, if the General Partner is a limited liability company, stockholders, if the General
Partner is a corporation, or the members or stockholders of the General Partner’s general partner,
if the General Partner is a limited partnership.

          (d) Notwithstanding anything to the contrary in this Agreement, the General Partner and its
Affiliates shall have no duty or obligation, express or implied, to (i) sell or otherwise dispose
of any asset of the Partnership Group other than in the ordinary course of business or (ii) permit
any Group Member to use any facilities or assets of the General Partner and its Affiliates, except
as may be provided in contracts entered into from time to time specifically dealing with such use.
Any determination by the General Partner or any of its Affiliates to enter into such contracts
shall be at its option.

          (e) Except as expressly set forth in this Agreement, neither the General Partner nor any other
Indemnitee shall have any duties or liabilities, including fiduciary duties, to the Partnership or
any Limited Partner or Assignee and the provisions of this Agreement, to the extent that they
restrict, eliminate or otherwise modify the duties and liabilities, including fiduciary duties, of
the General Partner or any other Indemnitee otherwise existing at law or in
equity, are agreed by the Partners to replace such other duties and liabilities of the
General Partner or such other Indemnitee.

          (f) The Unitholders hereby authorize the General Partner, on behalf of the Partnership as a
partner or member of a Group Member, to approve of actions by the general partner or managing
member of such Group Member similar to those actions permitted to be taken by the General Partner
pursuant to this Section 7.9.

Section 7.10 Other Matters Concerning the General Partner.

          (a) The General Partner may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties.

          (b) The General Partner may consult with legal counsel, accountants, appraisers, management
consultants, investment bankers and other consultants and advisers selected by it, and any act
taken or omitted to be taken in reliance upon the advice or opinion (including an Opinion of
Counsel) of such Persons as to matters that the General Partner reasonably believes to be within
such Person’s professional or expert competence shall be conclusively presumed to have been done or
omitted in good faith and in accordance with such advice or opinion.

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          (c) The General Partner shall have the right, in respect of any of its powers or obligations
hereunder, to act through any of its duly authorized officers, a duly appointed attorney or
attorneys-in-fact or the duly authorized officers of the Partnership or any Group Member.

Section 7.11 Purchase or Sale of Partnership Securities.

     The General Partner may cause the Partnership to purchase or otherwise acquire Partnership
Securities. As long as Partnership Securities are held by any Group Member, such Partnership
Securities shall not be considered Outstanding for any purpose, except as otherwise provided
herein. The General Partner or any Affiliate of the General Partner may also purchase or otherwise
acquire and sell or otherwise dispose of Partnership Securities for its own account, subject to the
provisions of Articles IV and X.

Section 7.12 Registration Rights of the General Partner and its Affiliates.

          (a) If (i) the General Partner or any Affiliate of the General Partner (including for purposes
of this Section 7.12, any Person that is an Affiliate of the General Partner at the date hereof
notwithstanding that it may later cease to be an Affiliate of the General Partner) (the “Holder”),
holds Partnership Securities that it desires to sell and (ii) Rule 144 of the Securities Act (or
any successor rule or regulation to Rule 144) or another exemption from registration is
not available to enable the Holder to dispose of the number of Partnership Securities it
desires to sell at the time it desires to do so without registration under the Securities Act, then
at the option and upon the request of the Holder, the Partnership shall file with the Commission as
promptly as practicable after receiving such request, and use commercially reasonable efforts to
cause to become effective and remain effective for a period of not less than six months following
its effective date or such shorter period as shall terminate when all Partnership Securities
covered by such registration statement have been sold, a registration statement under the
Securities Act (including a “shelf” registration statement) registering the offering and sale of
the number of Partnership Securities specified by the Holder; provided, however, that the
Partnership shall not be required to effect more than three registrations pursuant to this Section
7.12(a); and provided further, however, that if the Conflicts Committee determines in good faith
that the requested registration would be materially detrimental to the Partnership and its Partners
because such registration would (x) materially interfere with a significant acquisition,
reorganization or other similar transaction involving the Partnership, (y) require premature
disclosure of material information that the Partnership has a bona fide business purpose for
preserving as confidential or (z) render the Partnership unable to comply with requirements under
applicable securities laws, then the Partnership shall have the right to postpone such requested
registration for a period of not more than six months after receipt of the Holder’s request, such
right pursuant to this Section 7.12(a) not to be utilized more than once in any twelve-month
period. In connection with any registration pursuant to the first sentence of this Section
7.12(a), the Partnership shall (i) promptly prepare and file (A) such documents as may be necessary
to register or qualify the securities subject to such registration under the securities laws of
such states as the Holder shall reasonably request; provided, however, that no such qualification
shall be required in any jurisdiction where, as a result thereof, the Partnership would become
subject to general service of process or to taxation or qualification to do business as a foreign
corporation or partnership doing business in such jurisdiction solely as a result of such
registration, and (B) such documents

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as may be necessary to apply for listing or to list the
Partnership Securities subject to such registration on such National Securities Exchange as the
Holder shall reasonably request, and (ii) do any and all other acts and things that may be
necessary or appropriate to enable the Holder to consummate a public sale of such Partnership
Securities in such states. Except as set forth in Section 7.12(d), all costs and expenses of any
such registration and offering (other than the underwriting discounts and commissions) shall be
paid by the Partnership, without reimbursement by the Holder.

          (b) If the Partnership shall at any time propose to file a registration statement under the
Securities Act for an offering of equity securities of the Partnership for cash (other than an
offering relating solely to an employee benefit plan), the Partnership shall notify all Holders of
such proposal and use all commercially reasonable efforts to include such number or amount of
securities held by any Holder in such registration statement as the Holder shall request; provided,
that the Partnership is not required to make any effort or take any action to so include the
securities of the Holder once the registration statement becomes or is declared effective by
the Commission, including any registration statement providing for the offering from time
to time of securities pursuant to Rule 415 of the Securities Act. If the proposed offering pursuant
to this Section 7.12(b) shall be an underwritten offering, then, in the event that the managing
underwriter or managing underwriters of such offering advise the Partnership and the Holder in
writing that in their opinion the inclusion of all or some of the Holder’s Partnership Securities
would adversely and materially affect the success of the offering, the Partnership shall include in
such offering only that number or amount, if any, of securities held by the Holder that, in the
opinion of the managing underwriter or managing underwriters, will not so adversely and materially
affect the offering. Except as set forth in Section 7.12(c), all costs and expenses of any such
registration and offering (other than the underwriting discounts and commissions) shall be paid by
the Partnership, without reimbursement by the Holder.

          (c) If underwriters are engaged in connection with any registration referred to in this
Section 7.12, the Partnership shall provide indemnification, representations, covenants, opinions
and other assurance to the underwriters in form and substance reasonably satisfactory to such
underwriters. Further, in addition to and not in limitation of the Partnership’s obligation under
Section 7.7, the Partnership shall, to the fullest extent permitted by law, indemnify and hold
harmless the Holder, its officers, directors and each Person who controls the Holder (within the
meaning of the Securities Act) and any agent thereof (collectively, “Indemnified Persons”) from and
against any and all losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any Indemnified Person may be involved, or is threatened
to be involved, as a party or otherwise, under the Securities Act or otherwise (hereinafter
referred to in this Section 7.12(c) as a “claim” and in the plural as “claims”) based upon, arising
out of or resulting from any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which any Partnership Securities were registered
under the Securities Act or any state securities or Blue Sky laws, in any preliminary prospectus
(if used prior to the effective date of such registration statement), or in any summary or final
prospectus or any free writing prospectus or in any amendment or supplement thereto (if used during
the period the Partnership is required to keep the registration statement current), or

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arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein not misleading;
provided, however, that the Partnership shall not be liable to any Indemnified Person to the extent
that any such claim arises out of, is based upon or results from an untrue statement or alleged
untrue statement or omission or alleged omission made in such registration statement, such
preliminary, summary or final prospectus or any free writing prospectus or such amendment or
supplement, in reliance upon and in conformity with written information furnished to the
Partnership by or on behalf of such Indemnified Person specifically for use in the preparation
thereof.

          (d) The provisions of Section 7.12(a) and Section 7.12(b) shall continue to be applicable
with respect to the General Partner (and any of the General Partner’s Affiliates) after it ceases
to be a general partner of the Partnership, during a period of two years subsequent to the
effective date of such cessation and for so long thereafter as is required for the Holder to sell
all of the Partnership Securities with respect to which it has requested during such two-year
period inclusion in a registration statement otherwise filed or that a registration statement be
filed; provided, however, that the Partnership shall not be required to file successive
registration statements covering the same Partnership Securities for which registration was
demanded during such two-year period. The provisions of Section 7.12(c) shall continue in effect
thereafter.

          (e) The rights to cause the Partnership to register Partnership Securities pursuant to this
Section 7.12 may be assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such Partnership Securities, provided (i) the Partnership is, within a reasonable time
after such transfer, furnished with written notice of the name and address of such transferee or
assignee and the Partnership Securities with respect to which such registration rights are being
assigned; and (ii) such transferee or assignee agrees in writing to be bound by and subject to the
terms set forth in this Section 7.12.

          (f) Any request to register Partnership Securities pursuant to this Section 7.12 shall (i)
specify the Partnership Securities intended to be offered and sold by the Person making the
request, (ii) express such Person’s present intent to offer such Partnership Securities for
distribution, (iii) describe the nature or method of the proposed offer and sale of Partnership
Securities, and (iv) contain the undertaking of such Person to provide all such information and
materials and take all action as may be required in order to permit the Partnership to comply with
all applicable requirements in connection with the registration of such Partnership Securities.

Section 7.13 Reliance by Third Parties.

     Notwithstanding anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner and any officer of the General
Partner authorized by the General Partner to act on behalf of and in the name of the Partnership
has full power and authority to encumber, sell or otherwise use in any manner any and all assets of
the Partnership and to enter into any authorized contracts on behalf of the Partnership, and such
Person shall be entitled to deal with the General Partner or any such officer as if it were the
Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby
waives any and all defenses or other remedies that may be available against such Person to contest,
negate or disaffirm any action of the General Partner or any such officer in connection

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with any such dealing. In no event shall any Person dealing with the General Partner or any such officer or
its representatives be obligated to ascertain that the terms of this Agreement have been complied
with or to inquire into the necessity or expedience of any act or action of the General Partner or
any such officer or its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its representatives
shall be conclusive evidence in favor of any and every Person relying thereon or claiming
thereunder that (a) at the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (b) the Person executing and delivering
such certificate, document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (c) such certificate, document or instrument was duly executed and
delivered in accordance with the terms and provisions of this Agreement and is binding upon the
Partnership.

ARTICLE VIII

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 8.1 Records and Accounting.

     The General Partner shall keep or cause to be kept at the principal office of the Partnership
appropriate books and records with respect to the Partnership’s business, including all books and
records necessary to provide to the Limited Partners any information required to be provided
pursuant to Section 3.4(a). Any books and records maintained by or on behalf of the Partnership in
the regular course of its business, including the record of the Record Holders and Assignees of
Units or other Partnership Securities, books of account and records of Partnership proceedings, may
be kept on, or be in the form of, computer disks, hard drives, punch cards, magnetic tape,
photographs, micrographics or any other information storage device; provided, that the books and
records so maintained are convertible into clearly legible written form within a reasonable period
of time. The books of the Partnership shall be maintained, for financial reporting purposes, on an
accrual basis in accordance with U.S. GAAP.

Section 8.2 Fiscal Year.

     The fiscal year of the Partnership shall be a fiscal year ending December 31.

Section 8.3 Reports.

          (a) As soon as practicable, but in no event later than 120 days after the close of each fiscal
year of the Partnership, the General Partner shall cause to be mailed or made available, by any
reasonable means (including posting on or accessible through the Partnership’s or the Commission’s
website), to each Record Holder of a Unit as of a date selected by the General Partner, an annual
report containing financial statements of the Partnership for such fiscal year of the Partnership,
presented in accordance with U.S. GAAP, including a balance sheet and statements of operations,
Partnership equity and cash flows, such statements to be audited by an independent registered
public accounting firm selected by the General Partner.

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          (b) As soon as practicable, but in no event later than 90 days after the close of each
Quarter except the last Quarter of each fiscal year, the General Partner shall cause to be mailed
or made available, by any reasonable means (including posting on or accessible through the
Partnership’s or the Commission’s website), to each Record Holder of a Unit, as of a date selected
by the General Partner, a report containing unaudited financial statements of the Partnership and
such other information as may be required by applicable law, regulation or rule of any National
Securities Exchange on which the Units are listed or admitted to trading, or as the General Partner
determines to be necessary or appropriate.

ARTICLE IX

TAX MATTERS

Section 9.1 Tax Returns and Information.

     The Partnership shall timely file all returns of the Partnership that are required for
federal, state and local income tax purposes on the basis of the accrual method and the taxable
year or years that it is required by law to adopt, from time to time, as determined by the General
Partner. In the event the Partnership is required to use a taxable year other than a year ending
on December 31, the General Partner shall use reasonable efforts to change the taxable year of the
Partnership to a year ending on December 31. The tax information reasonably required by Record
Holders for federal and state income tax reporting purposes with respect to a taxable year shall be
furnished to them within 90 days of the close of the calendar year in which the Partnership’s
taxable year ends. The classification, realization and recognition of income, gain, losses and
deductions and other items shall be on the accrual method of accounting for federal income tax
purposes.

Section 9.2 Tax Elections.

          (a) The Partnership shall make the election under Section 754 of the Code in accordance with
applicable regulations thereunder, subject to the reservation of the right to seek to revoke any
such election upon the General Partner’s determination that such revocation is in the best
interests of the Limited Partners. Notwithstanding any other provision herein contained, for the
purposes of computing the adjustments under Section 743(b) of the Code, the General Partner shall
be authorized (but not required) to adopt a convention whereby the price paid by a transferee of a
Limited Partner Interest will be deemed to be the lowest quoted closing price of the Limited
Partner Interests on any National Securities Exchange on which such Limited Partner Interests are
listed or admitted to trading during the calendar month in which such transfer is deemed to occur
pursuant to Section 6.2(i) without regard to the actual price paid by such transferee.

          (b) Except as otherwise provided herein, the General Partner shall determine whether the
Partnership should make any other elections permitted by the Code.

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Section 9.3 Tax Controversies.

     Subject to the provisions hereof, the General Partner is designated as the Tax Matters Partner
(as defined in the Code) and is authorized and required to represent the Partnership (at the
Partnership’s expense) in connection with all examinations of the Partnership’s affairs by tax
authorities, including resulting administrative and judicial proceedings, and to expend Partnership
funds for professional services and costs associated therewith. Each Partner agrees to cooperate
with the General Partner and to do or refrain from doing any or all things reasonably required by
the General Partner to conduct such proceedings.

Section 9.4 Withholding.

     Notwithstanding any other provision of this Agreement, the General Partner is authorized to
take any action that may be required to cause the Partnership and other Group Members to comply
with any withholding requirements established under the Code or any other federal, state or local
law including pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that the
Partnership is required or elects to withhold and pay over to any taxing authority any amount
resulting from the allocation or distribution of income to any Partner or Assignee (including by
reason of Section 1446 of the Code), the General Partner may treat the amount withheld as a
distribution of cash pursuant to Section 6.3 in the amount of such withholding from such Partner.

ARTICLE X

ADMISSION OF PARTNERS

Section 10.1 Admission of Initial Limited Partners.

          (a) The Organizational Limited Partner, I. Jon Brumley, Jon S. Brumley, Robert C. Reeves, L.
Ben Nivens and John W. Arms were admitted to the Partnership as Initial Limited Partners in respect
of the Common Units and Management Incentive Units issued to them on the Interim Closing Date as
described in Section 5.1(b).

          (b) Upon the issuance by the Partnership of Common Units to Encore Operating, L.P. and to the
Underwriters as described in Section 5.2(a) and Section 5.3, respectively, in connection with the
Initial Offering, the General Partner shall admit such parties to the Partnership as Initial
Limited Partners in respect of the Common Units issued to them.

Section 10.2 Admission of Substituted Limited Partners.

     By transfer of a Limited Partner Interest in accordance with Article IV, the transferor shall
be deemed to have given the transferee the right to seek admission as a Substituted Limited Partner
subject to the conditions of, and in the manner permitted under, this Agreement. A transferor of a
Certificate representing a Limited Partner Interest shall, however, only have the authority to
convey to a purchaser or other transferee who does not execute and deliver a Transfer Application
(a) the right to negotiate such Certificate to a purchaser or other transferee and (b) the right to
transfer the right to request admission as a Substituted Limited Partner to

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such purchaser or other transferee in respect of the transferred Limited Partner Interests. No
transferor of a Limited Partner Interest or other Person shall have any obligation or
responsibility to provide a Transfer Application to a transferee or assist or participate in any
way with respect to the completion or delivery thereof. Each transferee of a Limited Partner
Interest (including any nominee holder or an agent acquiring such Limited Partner Interest for the
account of another Person) who executes and delivers a properly completed Transfer Application
shall, by virtue of such execution and delivery, be an Assignee. Such Assignee shall automatically
be admitted to the Partnership as a Substituted Limited Partner with respect to the Limited Partner
Interests so transferred to such Person at such time as such transfer is recorded in the books and
records of the Partnership, and until so recorded, such transferee shall be an Assignee. The
General Partner shall periodically, but no less frequently than on the first Business Day of each
calendar quarter, cause any unrecorded transfers of Limited Partner Interests with respect to which
a properly completed, duly executed Transfer Application has been received to be recorded in the
books and records of the Partnership. An Assignee shall have an interest in the Partnership
equivalent to that of a Limited Partner with respect to allocations and distributions, including
liquidating distributions, of the Partnership. With respect to voting rights attributable to
Limited Partner Interests that are held by Assignees, the General Partner shall be deemed to be the
Limited Partner with respect thereto and shall, in exercising the voting rights in respect of such
Limited Partner Interests on any matter, vote such Limited Partner Interests at the written
direction of the Assignee who is the Record Holder of such Limited Partner Interests. If no such
written direction is received, such Limited Partner Interests will not be voted. An Assignee shall
have no other rights of a Limited Partner.

Section 10.3 Admission of Successor General Partner.

     A successor General Partner approved pursuant to Section 11.1 or 11.2 or the transferee of or
successor to all of the General Partner Interest pursuant to Section 4.6 who is proposed to be
admitted as a successor General Partner shall be admitted to the Partnership as the General
Partner, effective immediately prior to the withdrawal or removal of the predecessor or
transferring General Partner, pursuant to Section 11.1 or 11.2 or the transfer of the General
Partner Interest pursuant to Section 4.6, provided, however, that no such successor shall be
admitted to the Partnership until compliance with the terms of Section 4.6 has occurred and such
successor has executed and delivered such other documents or instruments as may be required to
effect such admission. Any such successor shall, subject to the terms hereof, carry on the business
of the members of the Partnership Group without dissolution.

Section 10.4 Admission of Additional Limited Partners.

          (a) A Person (other than the General Partner, an Initial Limited Partner or a Substituted
Limited Partner) who makes a Capital Contribution to the Partnership in accordance with this
Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner:

          (i) evidence of acceptance in form satisfactory to the General Partner of all of the
terms and conditions of this Agreement, including the power of attorney granted in Section
2.6, and

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          (ii) such other documents or instruments as may be required by the General Partner to
effect such Person’s admission as an Additional Limited Partner.

          (b) Notwithstanding anything to the contrary in this Section 10.4, no Person shall be admitted
as an Additional Limited Partner without the consent of the General Partner. The admission of any
Person as an Additional Limited Partner shall become effective on the date upon which the name of
such Person is recorded as such in the books and records of the Partnership, following the consent
of the General Partner to such admission.

Section 10.5 Amendment of Agreement and Certificate of Limited Partnership.

     To effect the admission to the Partnership of any Partner, the General Partner shall take all
steps necessary or appropriate under the Delaware Act to amend the records of the Partnership to
reflect such admission and, if necessary, to prepare as soon as practicable an amendment to this
Agreement and, if required by law, the General Partner shall prepare and file an amendment to the
Certificate of Limited Partnership, and the General Partner may for this purpose, among others,
exercise the power of attorney granted pursuant to Section 2.6.

ARTICLE XI

WITHDRAWAL OR REMOVAL OF PARTNERS

Section 11.1 Withdrawal of the General Partner.

          (a) The General Partner shall be deemed to have withdrawn from the Partnership upon the
occurrence of any one of the following events (each such event herein referred to as an “Event of
Withdrawal”);

          (i) The General Partner voluntarily withdraws from the Partnership by giving written
notice to the other Partners;

          (ii) The General Partner transfers all of its rights as General Partner pursuant to
Section 4.6;

          (iii) The General Partner is removed pursuant to Section 11.2;

          (iv) The General Partner (A) makes a general assignment for the benefit of creditors;
(B) files a voluntary bankruptcy petition for relief under Chapter 7 of the United States
Bankruptcy Code; (C) files a petition or answer seeking for itself a liquidation,
dissolution or similar relief (but not a reorganization) under any law; (D) files an answer
or other pleading admitting or failing to contest the material allegations of a petition
filed against the General Partner in a proceeding of the type described in clauses (A)-(C)
of this Section 11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment of a
trustee (but not a debtor-in-possession), receiver or liquidator of the General Partner or
of all or any substantial part of its properties;

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          (v) A final and non-appealable order of relief under Chapter 7 of the United States
Bankruptcy Code is entered by a court with appropriate jurisdiction pursuant to a voluntary
or involuntary petition by or against the General Partner; or

          (vi) (A) in the event the General Partner is a corporation, a certificate of
dissolution or its equivalent is filed for the General Partner, or 90 days expire after the
date of notice to the General Partner of revocation of its charter without a reinstatement
of its charter, under the laws of its state of incorporation; (B) in the event the General
Partner is a partnership or a limited liability company, the dissolution and commencement of
winding up of the General Partner; (C) in the event the General Partner is acting in such
capacity by virtue of being a trustee of a trust, the termination of the trust; (D) in the
event the General Partner is a natural person, his death or adjudication of incompetency;
and (E) otherwise in the event of the termination of the General Partner.

If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or (vi)(A), (B), (C) or (E) occurs,
the withdrawing General Partner shall give notice to the Limited Partners within 30 days after such
occurrence. The Partners hereby agree that only the Events of Withdrawal described in this Section
11.1 shall result in the withdrawal of the General Partner from the Partnership.

          (b) Withdrawal of the General Partner from the Partnership upon the occurrence of an Event of
Withdrawal shall not constitute a breach of this Agreement under the following circumstances: (i)
at any time during the period beginning on the Closing Date and ending at 12:00 midnight,
prevailing Central Time, on June 30, 2017, the General Partner voluntarily withdraws by giving at
least 90 days’ advance notice of its intention to withdraw to the Limited Partners; provided, that
prior to the effective date of such withdrawal, the withdrawal is approved by Unitholders holding
at least a majority of the Outstanding Common Units (excluding Common Units held by the General
Partner and its Affiliates) and the General Partner delivers to the Partnership an Opinion of
Counsel (“Withdrawal Opinion of Counsel”) that such withdrawal (following the selection of the
successor General Partner) would not result in the loss of the limited liability of any Limited
Partner or any Group Member or cause any Group Member to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent
not already so treated or taxed); (ii) at any time after 12:00 midnight, prevailing Central Time,
on June 30, 2017, the General Partner voluntarily withdraws by giving at least 90 days’ advance
notice to the Unitholders, such withdrawal to take effect on the date specified in such notice;
(iii) at any time that the General Partner ceases to be the General Partner pursuant to Section
11.1(a)(ii) or is removed pursuant to Section 11.2; or (iv) notwithstanding clause (i) of this
sentence, at any time that the General Partner voluntarily withdraws by giving at least 90 days’
advance notice of its intention to withdraw to the Limited Partners, such withdrawal to take effect
on the date specified in the notice, if at the time such notice is given one Person and its
Affiliates (other than the General Partner and its Affiliates) own beneficially or of record or
control at least 50% of the Outstanding Units. The withdrawal of the General Partner from the
Partnership upon the occurrence of an Event of Withdrawal shall also constitute the withdrawal of
the General Partner as general partner or managing member, if any, to the extent applicable, of the
other Group Members. If the General Partner gives a notice of withdrawal pursuant to Section
11.1(a)(i), the holders of a Unit Majority, may, prior to the

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effective date of such withdrawal, elect a successor General Partner. The Person so elected
as successor General Partner shall automatically become the successor general partner or managing
member, to the extent applicable, of the other Group Members of which the General Partner is a
general partner or a managing member. If, prior to the effective date of the General Partner’s
withdrawal, a successor is not selected by the Unitholders as provided herein or the Partnership
does not receive a Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance
with Section 12.1. Any successor General Partner elected in accordance with the terms of this
Section 11.1 shall be subject to the provisions of Section 10.3.

Section 11.2 Removal of the General Partner.

     The General Partner may be removed if such removal is approved by the Unitholders holding at
least 66 2/3% of the Outstanding Units (including Units held by the General Partner and its
Affiliates) voting as a single class. Any such action by such holders for removal of the General
Partner must also provide for the election of a successor General Partner by the Unitholders of a
Unit Majority. Such removal shall be effective immediately following the admission of a successor
General Partner pursuant to Section 10.3. The removal of the General Partner shall also
automatically constitute the removal of the General Partner as general partner or managing member,
to the extent applicable, of the other Group Members of which the General Partner is a general
partner or a managing member. If a Person is elected as a successor General Partner in accordance
with the terms of this Section 11.2, such Person shall, upon admission pursuant to Section 10.3,
automatically become a successor general partner or managing member, to the extent applicable, of
the other Group Members of which the General Partner is a general partner or a managing member. The
right of the holders of Outstanding Units to remove the General Partner shall not exist or be
exercised unless the Partnership has received an opinion opining as to the matters covered by a
Withdrawal Opinion of Counsel. Any successor General Partner elected in accordance with the terms
of this Section 11.2 shall be subject to the provisions of Section 10.3.

Section 11.3 Interest of Departing General Partner and Successor General Partner.

          (a) In the event of (i) withdrawal of the General Partner under circumstances where such
withdrawal does not violate this Agreement or (ii) removal of the General Partner by the holders of
Outstanding Units under circumstances where Cause does not exist, if the successor General Partner
is elected in accordance with the terms of Section 11.1 or 11.2, the Departing General Partner
shall have the option, exercisable prior to the effective date of the departure of such Departing
General Partner, to require its successor to purchase its General Partner Interest and its general
partner interest (or equivalent interest), if any, in the other Group Members (collectively, the
“Combined Interest”) in exchange for an amount in cash equal to the fair market value of such
Combined Interest, such amount to be determined and payable as of the effective date of its
departure. If the General Partner is removed by the Unitholders under circumstances where Cause
exists or if the General Partner withdraws under circumstances where such withdrawal violates this
Agreement, and if a successor General Partner is elected in accordance with the terms of Section
11.1 or 11.2 (or if the business of the Partnership is continued pursuant to Section 12.2 and the
successor General Partner is not the former General Partner), such successor shall have the option,
exercisable prior to the effective date of the departure of such Departing General Partner (or, in
the event the business of the Partnership is

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continued, prior to the date the business of the Partnership is continued), to purchase the
Combined Interest for such fair market value of such Combined Interest of the Departing General
Partner. In either event, the Departing General Partner shall be entitled to receive all
reimbursements due such Departing General Partner pursuant to Section 7.4, including any
employee-related liabilities (including severance liabilities), incurred in connection with the
termination of any employees employed by the Departing General Partner or its Affiliates (other
than any Group Member) for the benefit of the Partnership or the other Group Members.

     For purposes of this Section 11.3(a), the fair market value of the Departing General Partner’s
Combined Interest shall be determined by agreement between the Departing General Partner and its
successor or, failing agreement within 30 days after the effective date of such Departing General
Partner’s departure, by an independent investment banking firm or other independent expert selected
by the Departing General Partner and its successor, which, in turn, may rely on other experts, and
the determination of which shall be conclusive as to such matter. If such parties cannot agree upon
one independent investment banking firm or other independent expert within 45 days after the
effective date of such departure, then the Departing General Partner shall designate an independent
investment banking firm or other independent expert, the Departing General Partner’s successor
shall designate an independent investment banking firm or other independent expert, and such firms
or experts shall mutually select a third independent investment banking firm or independent expert,
which third independent investment banking firm or other independent expert shall determine the
fair market value of the Combined Interest of the Departing General Partner. In making its
determination, such third independent investment banking firm or other independent expert may
consider the then current trading price of Units on any National Securities Exchange on which Units
are then listed or admitted to trading, the value of the Partnership’s assets, the rights and
obligations of the Departing General Partner and other factors it may deem relevant.

          (b) If the Combined Interest is not purchased in the manner set forth in Section 11.3(a), the
Departing General Partner (or its transferee) shall become a Limited Partner and its Combined
Interest shall be converted into Common Units pursuant to a valuation made by an investment banking
firm or other independent expert selected pursuant to Section 11.3(a), without reduction in such
Partnership Interest (but subject to proportionate dilution by reason of the admission of its
successor). Any successor General Partner shall indemnify the Departing General Partner (or its
transferee) as to all debts and liabilities of the Partnership arising on or after the date on
which the Departing General Partner (or its transferee) becomes a Limited Partner. For purposes of
this Agreement, conversion of the Combined Interest of the Departing General Partner to Common
Units will be characterized as if the Departing General Partner (or its transferee) contributed its
Combined Interest to the Partnership in exchange for the newly issued Common Units.

          (c) If a successor General Partner is elected in accordance with the terms of Section 11.1 or
11.2 (or if the business of the Partnership is continued pursuant to Section 12.2 and the successor
General Partner is not the former General Partner) and the option described in Section 11.3(a) is
not exercised by the party entitled to do so, the successor General Partner shall, at the effective
date of its admission to the Partnership, contribute to the Partnership cash in the amount equal to
the product of the (x) quotient obtained by dividing (A) the Sharing

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Percentage of the General Partner Interest of the Departing General Partner by (B) a
percentage equal to 100% less the Sharing Percentage of the General Partner Interest of the
Departing General Partner and (y) the Net Agreed Value of the Partnership’s assets on such date. In
such event, such successor General Partner shall, subject to the following sentence, be entitled to
its Sharing Percentage and its Percentage Interest, as the case may be, of all Partnership
allocations and distributions to which the Departing General Partner was entitled. In addition, the
successor General Partner shall cause this Agreement to be amended to reflect that, from and after
the date of such successor General Partner’s admission, the successor General Partner’s interest in
all Partnership distributions and allocations shall be its Sharing Percentage or its Percentage
Interest, as the case may be.

Section 11.4 Withdrawal of Limited Partners.

     No Limited Partner shall have any right to withdraw from the Partnership; provided, however,
that when a transferee of a Limited Partner’s Limited Partner Interest becomes a Record Holder of
the Limited Partner Interest so transferred, such transferring Limited Partner shall cease to be a
Limited Partner with respect to the Limited Partner Interest so transferred.

ARTICLE XII

DISSOLUTION AND LIQUIDATION

Section 12.1 Dissolution.

     The Partnership shall not be dissolved by the admission of Substituted Limited Partners or
Additional Limited Partners or by the admission of a successor General Partner in accordance with
the terms of this Agreement. Upon the removal or withdrawal of the General Partner, if a successor
General Partner is elected pursuant to Section 11.1 or 11.2, the Partnership shall not be dissolved
and such successor General Partner shall continue the business of the Partnership. The Partnership
shall dissolve, and (subject to Section 12.2) its affairs shall be wound up, upon:

          (a) an Event of Withdrawal of the General Partner as provided in Section 11.1(a) (other than
Section 11.1(a)(ii)), unless a successor is elected and an Opinion of Counsel is received as
provided in Section 11.1(b) or 11.2 and such successor is admitted to the Partnership pursuant to
Section 10.3;

          (b) an election to dissolve the Partnership by the General Partner that is approved by the
holders of a Unit Majority;

          (c) the entry of a decree of judicial dissolution of the Partnership pursuant to the
provisions of the Delaware Act; or

          (d) at any time there are no Limited Partners, unless the Partnership is continued without
dissolution in accordance with the Delaware Act.

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Section 12.2 Continuation of the Business of the Partnership After Dissolution.

     Upon (a) dissolution of the Partnership following an Event of Withdrawal caused by the
withdrawal or removal of the General Partner as provided in Section 11.1(a)(i) or (iii) and the
failure of the Partners to select a successor to such Departing General Partner pursuant to Section
11.1 or 11.2, then within 90 days thereafter, or (b) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v) or (vi), then, to the
maximum extent permitted by law, within 180 days thereafter, the holders of a Unit Majority may
elect to continue the business of the Partnership on the same terms and conditions set forth in
this Agreement by appointing as a successor General Partner a Person approved by the holders of a
Unit Majority. Unless such an election is made within the applicable time period as set forth
above, the Partnership shall conduct only activities necessary to wind up its affairs. If such an
election is so made, then:

          (i) the Partnership shall continue without dissolution unless earlier dissolved in
accordance with this Article XII;

          (ii) if the successor General Partner is not the former General Partner, then the
interest of the former General Partner shall be treated in the manner provided in Section
11.3; and

          (iii) the successor General Partner shall be admitted to the Partnership as General
Partner, effective as of the Event of Withdrawal, by agreeing in writing to be bound by this
Agreement; provided, that the right of the holders of a Unit Majority to approve a successor
General Partner and to continue the business of the Partnership shall not exist and may not
be exercised unless the Partnership has received an Opinion of Counsel that (x) the exercise
of the right would not result in the loss of limited liability of any Limited Partner and
(y) neither the Partnership nor any Group Member would be treated as an association taxable
as a corporation or otherwise be taxable as an entity for federal income tax purposes upon
the exercise of such right to continue (to the extent not already so treated or taxed).

Section 12.3 Liquidator.

     Upon dissolution of the Partnership, unless the business of the Partnership is continued
pursuant to Section 12.2, the General Partner shall select one or more Persons to act as
Liquidator. The Liquidator (if other than the General Partner) shall be entitled to receive such
compensation for its services as may be approved by holders of a Unit Majority. The Liquidator (if
other than the General Partner) shall agree not to resign at any time without 15 days’ prior notice
and may be removed at any time, with or without cause, by notice of removal approved by holders of
a Unit Majority. Upon dissolution, removal or resignation of the Liquidator, a successor and
substitute Liquidator (who shall have and succeed to all rights, powers and duties of the original
Liquidator) shall within 30 days thereafter be approved by holders of a Unit Majority. The right
to approve a successor or substitute Liquidator in the manner provided herein shall be deemed to
refer also to any such successor or substitute Liquidator approved in the manner herein provided.
Except as expressly provided in this Article XII, the Liquidator approved in the manner provided
herein shall have and may exercise, without further

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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 sale set forth in Section 7.3) necessary or appropriate to carry out the duties and functions of
the Liquidator hereunder for and during the period of time required to complete the winding up and
liquidation of the Partnership as provided for herein.

Section 12.4 Liquidation.

     The Liquidator shall proceed to dispose of the assets of the Partnership, discharge its
liabilities, and otherwise wind up its affairs in such manner and over such period as determined by
the Liquidator, subject to Section 17-804 of the Delaware Act and the following:

          (a) The assets may be disposed of by public or private sale or by distribution in kind to one
or more Partners on such terms as the Liquidator and such Partner or Partners may agree. If any
property is distributed in kind, the Partner receiving the property shall be deemed for purposes of
Section 12.4(c) to have received cash equal to its fair market value; and contemporaneously
therewith, appropriate cash distributions must be made to the other Partners. The Liquidator may
defer liquidation or distribution of the Partnership’s assets for a reasonable time if it
determines that an immediate sale or distribution of all or some of the Partnership’s assets would
be impractical or would cause undue loss to the Partners. The Liquidator may distribute the
Partnership’s assets, in whole or in part, in kind if it determines that a sale would be
impractical or would cause undue loss to the Partners.

          (b) Liabilities of the Partnership include amounts owed to the Liquidator as compensation for
serving in such capacity (subject to the terms of Section 12.3) and amounts to Partners otherwise
than in respect of their distribution rights under Article VI. With respect to any liability that
is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidator
shall either settle such claim for such amount as it thinks appropriate or establish a reserve of
cash or other assets to provide for its payment. When paid, any unused portion of the reserve shall
be distributed as additional liquidation proceeds.

          (c) All property and all cash in excess of that required to discharge liabilities as provided
in Section 12.4(b) shall be distributed to the Partners in accordance with, and to the extent of,
the positive balances in their respective Capital Accounts, as determined after taking into account
all Capital Account adjustments (other than those made by reason of distributions pursuant to this
Section 12.4(c)) for the taxable year of the Partnership during which the liquidation of the
Partnership occurs (with such date of occurrence being determined pursuant to Treasury Regulation
Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such taxable year
(or, if later, within 90 days after said date of such occurrence).

Section 12.5 Cancellation of Certificate of Limited Partnership.

     Upon the completion of the distribution of Partnership cash and property as provided in
Section 12.4 in connection with the liquidation of the Partnership, the Certificate of Limited
Partnership and all qualifications of the Partnership as a foreign limited partnership in

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jurisdictions other than the State of Delaware shall be canceled and such other actions as may
be necessary to terminate the Partnership shall be taken.

Section 12.6 Return of Contributions.

     The General Partner shall not be personally liable for, and shall have no obligation to
contribute or loan any monies or property to the Partnership to enable it to effectuate, the return
of the Capital Contributions of the Limited Partners or Unitholders, or any portion thereof, it
being expressly understood that any such return shall be made solely from Partnership assets.

Section 12.7 Waiver of Partition.

     To the maximum extent permitted by law, each Partner hereby waives any right to partition of
the Partnership property.

Section 12.8 Capital Account Restoration.

     No Limited Partner shall have any obligation to restore any negative balance in its Capital
Account upon liquidation of the Partnership. The General Partner shall be obligated to restore any
negative balance in its Capital Account upon liquidation of its interest in the Partnership by the
end of the taxable year of the Partnership during which such liquidation occurs, or, if later,
within 90 days after the date of such liquidation.

ARTICLE XIII

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

Section 13.1 Amendments to be Adopted Solely by the General Partner.

     Each Partner agrees that the General Partner, without the approval of any Partner or Assignee,
may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and
record whatever documents may be required in connection therewith, to reflect:

          (a) a change in the name of the Partnership, the location of the principal place of business
of the Partnership, the registered agent of the Partnership or the registered office of the
Partnership;

          (b) admission, substitution, withdrawal or removal of Partners in accordance with this
Agreement;

          (c) a change that the General Partner determines to be necessary or advisable to qualify or
continue the qualification of the Partnership as a limited partnership or a partnership in which
the Limited Partners have limited liability under the laws of any state or to ensure that the Group
Members will not be treated as associations taxable as corporations or otherwise taxed as entities
for federal income tax purposes;

          (d) a change that the General Partner determines, (i) does not adversely affect the Limited
Partners (including any particular class of Partnership Interests as compared to other

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classes of Partnership Interests) in any material respect, (ii) to be necessary or appropriate
to (A) satisfy any requirements, conditions or guidelines contained in any opinion, directive,
order, ruling or regulation of any federal or state agency or judicial authority or contained in
any federal or state statute (including the Delaware Act) or (B) facilitate the trading of the
Units (including the division of any class or classes of Outstanding Units into different classes
to facilitate uniformity of tax consequences within such classes of Units) or comply with any rule,
regulation, guideline or requirement of any National Securities Exchange on which the Units are or
will be listed or admitted to trading, (iii) to be necessary or advisable in connection with action
taken by the General Partner pursuant to Section 5.8 or (iv) is required to effect the intent
expressed in the Registration Statement or the intent of the provisions of this Agreement or is
otherwise contemplated by this Agreement;

          (e) a change in the fiscal year or taxable year of the Partnership and any other changes that
the General Partner determines to be necessary or appropriate as a result of a change in the fiscal
year or taxable year of the Partnership including, if the General Partner shall so determine, a
change in the definition of “Quarter” and the dates on which distributions are to be made by the
Partnership;

          (f) an amendment that is necessary, in the Opinion of Counsel, to prevent the Partnership, or
the General Partner or its directors, officers, trustees or agents from in any manner being
subjected to the provisions of the Investment Company Act of 1940, as amended, the Investment
Advisers Act of 1940, as amended, or “plan asset” regulations adopted under the Employee Retirement
Income Security Act of 1974, as amended, regardless of whether such are substantially similar to
plan asset regulations currently applied or proposed by the United States Department of Labor;

          (g) an amendment that the General Partner determines to be necessary or appropriate in
connection with the authorization of issuance of any class or series of Partnership Securities
pursuant to Section 5.6;

          (h) any amendment expressly permitted in this Agreement to be made by the General Partner
acting alone;

          (i) an amendment effected, necessitated or contemplated by a Merger Agreement or Plan of
Conversion approved in accordance with Section 14.3;

          (j) an amendment that the General Partner determines to be necessary or appropriate to reflect
and account for the formation by the Partnership of, or investment by the Partnership in, any
corporation, partnership, joint venture, limited liability company or other entity, in connection
with the conduct by the Partnership of activities permitted by the terms of Section 2.4;

          (k) a change that the General Partner determines to be necessary or advisable to effect the
reissuance of the Management Incentive Units as contemplated by Section 5.10(f) or, to the extent
approved by the Conflicts Committee, a change in the definition of “Change-in-Control” or
modification to other provisions of Section 5.10 relating to the vesting, forfeiture, conversion or
delivery of the Management Incentive Units;

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          (l) a merger or conveyance or conversion pursuant to Section 14.3(d); or

          (m) any other amendments substantially similar to the foregoing.

Section 13.2 Amendment Procedures.

     Except as provided in Sections 13.1 and 13.3, all amendments to this Agreement shall be made
in accordance with the following requirements. Amendments to this Agreement may be proposed only by
the General Partner; provided, however, that the General Partner shall have no duty or obligation
to propose any amendment to this Agreement and may decline to do so free of any fiduciary duty or
obligation whatsoever to the Partnership, any Limited Partner or Assignee and, in declining to
propose an amendment, to the fullest extent permitted by law shall not be required to act in good
faith or pursuant to any other standard imposed by this Agreement, any Group Member Agreement, any
other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation
or at equity. A proposed amendment shall be effective upon its approval by the General Partner and
the holders of a Unit Majority, unless a greater or different percentage is required under this
Agreement or by Delaware law. Each proposed amendment that requires the approval of the holders of
a specified percentage of Outstanding Units shall be set forth in a writing that contains the text
of the proposed amendment. If such an amendment is proposed, the General Partner shall seek the
written approval of the requisite percentage of Outstanding Units or call a meeting of the
Unitholders to consider and vote on such proposed amendment. The General Partner shall notify all
Record Holders upon final adoption of any such proposed amendments.

Section 13.3 Amendment Requirements.

          (a) Notwithstanding the provisions of Sections 13.1 and 13.2, no provision of this Agreement
that establishes a percentage of Outstanding Units (including Units deemed owned by the General
Partner and its Affiliates) required to take any action shall be amended, altered, changed,
repealed or rescinded in any respect that would have the effect of reducing such voting percentage
unless such amendment is approved by the written consent or the affirmative vote of holders of
Outstanding Units whose aggregate Outstanding Units constitute not less than the voting requirement
sought to be reduced.

          (b) Notwithstanding the provisions of Sections 13.1 and 13.2, no amendment to this Agreement
may (i) enlarge the obligations of any Limited Partner without its consent, unless such shall be
deemed to have occurred as a result of an amendment approved pursuant to Section 13.3(c) or (ii)
enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way
the amounts distributable, reimbursable or otherwise payable to, the General Partner or any of its
Affiliates without its consent, which consent may be given or withheld at its option.

          (c) Except as provided in Section 14.3, and without limitation of the General Partner’s
authority to adopt amendments to this Agreement without the approval of any Partners or Assignees
as contemplated in Section 13.1, any amendment that would have a material adverse effect on the
rights or preferences of any class of Partnership Interests in relation to other

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classes of Partnership Interests must be approved by the holders of not less than a majority
of the Outstanding Partnership Interests of the class affected.

          (d) Notwithstanding any other provision of this Agreement, except for amendments pursuant to
Section 13.1 and except as otherwise provided by Section 14.3(b), no amendments shall become
effective without the approval of the holders of at least 90% of the Outstanding Units voting as a
single class unless the Partnership obtains an Opinion of Counsel to the effect that such amendment
will not affect the limited liability of any Limited Partner under applicable law.

          (e) Except as provided in Section 13.1, this Section 13.3 shall only be amended with the
approval of the holders of at least 90% of the Outstanding Units.

Section 13.4 Special Meetings.

     All acts of Limited Partners to be taken pursuant to this Agreement shall be taken in the
manner provided in this Article XIII. Special meetings of the Limited Partners may be called by
the General Partner or by Limited Partners owning 20% or more of the Outstanding Units of the class
or classes for which a meeting is proposed. Limited Partners shall call a special meeting by
delivering to the General Partner one or more requests in writing stating that the signing Limited
Partners wish to call a special meeting and indicating the general or specific purposes for which
the special meeting is to be called. Within 60 days after receipt of such a call from Limited
Partners or within such greater time as may be reasonably necessary for the Partnership to comply
with any statutes, rules, regulations, listing agreements or similar requirements governing the
holding of a meeting or the solicitation of proxies for use at such a meeting, the General Partner
shall send a notice of the meeting to the Limited Partners either directly or indirectly through
the Transfer Agent. A meeting shall be held at a time and place determined by the General Partner
on a date not less than 10 days nor more than 60 days after the mailing of notice of the meeting.
Limited Partners shall not vote on matters that would cause the Limited Partners to be deemed to be
taking part in the management and control of the business and affairs of the Partnership so as to
jeopardize the Limited Partners’ limited liability under the Delaware Act or the law of any other
state in which the Partnership is qualified to do business.

Section 13.5 Notice of a Meeting.

     Notice of a meeting called pursuant to Section 13.4 shall be given to the Record Holders of
the class or classes of Units for which a meeting is proposed in writing by mail or other means of
written communication in accordance with Section 16.1. The notice shall be deemed to have been
given at the time when deposited in the mail or sent by other means of written communication.

Section 13.6 Record Date.

     For purposes of determining the Limited Partners entitled to notice of or to vote at a meeting
of the Limited Partners or to give approvals without a meeting as provided in Section 13.11 the
General Partner may set a Record Date, which shall not be less than 10 nor more than 60 days before
(a) the date of the meeting (unless such requirement conflicts with any rule,

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regulation, guideline or requirement of any National Securities Exchange on which the Units
are listed or admitted to trading, in which case the rule, regulation, guideline or requirement of
such National Securities Exchange shall govern) or (b) in the event that approvals are sought
without a meeting, the date by which Limited Partners are requested in writing by the General
Partner to give such approvals. If the General Partner does not set a Record Date, then (a) the
Record Date for determining the Limited Partners entitled to notice of or to vote at a meeting of
the Limited Partners shall be the close of business on the day next preceding the day on which
notice is given, and (b) the Record Date for determining the Limited Partners entitled to give
approvals without a meeting shall be the date the first written approval is deposited with the
Partnership in care of the General Partner in accordance with Section 13.11.

Section 13.7 Adjournment.

     When a meeting is adjourned to another time or place, notice need not be given of the
adjourned meeting and a new Record Date need not be fixed, if the time and place thereof are
announced at the meeting at which the adjournment is taken, unless such adjournment shall be for
more than 45 days. At the adjourned meeting, the Partnership may transact any business which might
have been transacted at the original meeting. If the adjournment is for more than 45 days or if a
new Record Date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given in accordance with this Article XIII.

Section 13.8 Waiver of Notice; Approval of Meeting; Approval of Minutes.

     The transactions of any meeting of Limited Partners, however called and noticed, and whenever
held, shall be as valid as if it had occurred at a meeting duly held after regular call and notice,
if a quorum is present either in person or by proxy. Attendance of a Limited Partner at a meeting
shall constitute a waiver of notice of the meeting, except when the Limited Partner attends the
meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction
of any business because the meeting is not lawfully called or convened; and except that attendance
at a meeting is not a waiver of any right to disapprove the consideration of matters required to be
included in the notice of the meeting, but not so included, if the disapproval is expressly made at
the meeting.

Section 13.9 Quorum and Voting.

     The holders of a majority of the Outstanding Units of the class or classes for which a meeting
has been called (including Outstanding Units deemed owned by the General Partner) represented in
person or by proxy shall constitute a quorum at a meeting of Limited Partners of such class or
classes unless any such action by the Limited Partners requires approval by holders of a greater
percentage of such Units, in which case the quorum shall be such greater percentage. At any meeting
of the Limited Partners duly called and held in accordance with this Agreement at which a quorum is
present, the act of Limited Partners holding Outstanding Units that in the aggregate represent a
majority of the Outstanding Units entitled to vote and be present in person or by proxy at such
meeting shall be deemed to constitute the act of all Limited Partners, unless a greater or
different percentage is required with respect to such action under the provisions of this
Agreement, in which case the act of the Limited Partners holding Outstanding Units that in the
aggregate represent at least such greater or different percentage shall be required. The Limited

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Partners present at a duly called or held meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of enough Limited Partners to
leave less than a quorum, if any action taken (other than adjournment) is approved by the required
percentage of Outstanding Units specified in this Agreement (including Outstanding Units deemed
owned by the General Partner). In the absence of a quorum any meeting of Limited Partners may be
adjourned from time to time by the affirmative vote of holders of at least a majority of the
Outstanding Units entitled to vote at such meeting (including Outstanding Units deemed owned by the
General Partner) represented either in person or by proxy, but no other business may be transacted,
except as provided in Section 13.7.

Section 13.10 Conduct of a Meeting.

     The General Partner shall have full power and authority concerning the manner of conducting
any meeting of the Limited Partners or solicitation of approvals in writing, including the
determination of Persons entitled to vote, the existence of a quorum, the satisfaction of the
requirements of Section 13.4, the conduct of voting, the validity and effect of any proxies and the
determination of any controversies, votes or challenges arising in connection with or during the
meeting or voting. The General Partner shall designate a Person to serve as chairman of any meeting
and shall further designate a Person to take the minutes of any meeting. All minutes shall be kept
with the records of the Partnership maintained by the General Partner. The General Partner may make
such other regulations consistent with applicable law and this Agreement as it may deem advisable
concerning the conduct of any meeting of the Limited Partners or solicitation of approvals in
writing, including regulations in regard to the appointment of proxies, the appointment and duties
of inspectors of votes and approvals, the submission and examination of proxies and other evidence
of the right to vote, and the revocation of approvals in writing.

Section 13.11 Action Without a Meeting.

     If authorized by the General Partner, any action that may be taken at a meeting of the Limited
Partners may be taken without a meeting if an approval in writing setting forth the action so taken
is signed by Limited Partners owning not less than the minimum percentage of the Outstanding Units
(including Units deemed owned by the General Partner) that would be necessary to authorize or take
such action at a meeting at which all the Limited Partners were present and voted (unless such
provision conflicts with any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Units are listed or admitted to trading, in which case the rule, regulation,
guideline or requirement of such National Securities Exchange shall govern). Prompt notice of the
taking of action without a meeting shall be given to the Limited Partners who have not approved in
writing. The General Partner may specify that any written ballot submitted to Limited Partners for
the purpose of taking any action without a meeting shall be returned to the Partnership within the
time period, which shall be not less than 20 days, specified by the General Partner. If a ballot
returned to the Partnership does not vote all of the Units held by the Limited Partners, the
Partnership shall be deemed to have failed to receive a ballot for the Units that were not voted.
If approval of the taking of any action by the Limited Partners is solicited by any Person other
than by or on behalf of the General Partner, the written approvals shall have no force and effect
unless and until (a) they are deposited with the Partnership in care of the General Partner, (b)
approvals sufficient to take the action proposed are dated as of a date not more than 90 days prior
to the date sufficient approvals are deposited with

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the Partnership and (c) an Opinion of Counsel is delivered to the General Partner to the
effect that the exercise of such right and the action proposed to be taken with respect to any
particular matter (i) will not cause the Limited Partners to be deemed to be taking part in the
management and control of the business and affairs of the Partnership so as to jeopardize the
Limited Partners’ limited liability, and (ii) is otherwise permissible under the state statutes
then governing the rights, duties and liabilities of the Partnership and the Partners.

Section 13.12 Right to Vote and Related Matters.

          (a) Only those Record Holders of the Units on the Record Date set pursuant to Section 13.6
(and also subject to the limitations contained in the definition of “Outstanding”) shall be
entitled to notice of, and to vote at, a meeting of Limited Partners or to act with respect to
matters as to which the holders of the Outstanding Units have the right to vote or to act. All
references in this Agreement to votes of, or other acts that may be taken by, the Outstanding Units
shall be deemed to be references to the votes or acts of the Record Holders of such Outstanding
Units.

          (b) With respect to Units that are held for a Person’s account by another Person (such as a
broker, dealer, bank, trust company or clearing corporation, or an agent of any of the foregoing),
in whose name such Units are registered, such other Person shall, in exercising the voting rights
in respect of such Units on any matter, and unless the arrangement between such Persons provides
otherwise, vote such Units in favor of, and at the direction of, the Person who is the beneficial
owner, and the Partnership shall be entitled to assume it is so acting without further inquiry. The
provisions of this Section 13.12(b) (as well as all other provisions of this Agreement) are subject
to the provisions of Section 4.3.

ARTICLE XIV

MERGER OR CONVERSION

Section 14.1 Authority.

     The Partnership may merge or consolidate with or into one or more corporations, limited
liability companies, statutory trusts or associations, real estate investment trusts, common law
trusts or unincorporated businesses, including a partnership (whether general or limited (including
a limited liability partnership)), or convert into any such entity, whether such entity is formed
under the laws of the State of Delaware or any other state of the United States of America,
pursuant to a written agreement of merger or consolidation (“Merger Agreement”), or a written plan
of conversion (“Plan of Conversion”), as the case may be, in accordance with this Article XIV.

Section 14.2 Procedure for Merger, Consolidation or Conversion.

          (a) Merger, consolidation or conversion of the Partnership pursuant to this Article XIV
requires the prior consent of the General Partner; provided, however, that, to the fullest extent
permitted by law, the General Partner shall have no duty or obligation to consent to any merger,
consolidation or conversion of the Partnership and may decline to do so free of any

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fiduciary duty or obligation whatsoever to the Partnership, any Limited Partner or Assignee
and, in declining to consent to a merger, consolidation or conversion, shall not be required to act
in good faith or pursuant to any other standard imposed by this Agreement, any Group Member
Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule
or regulation or at equity.

          (b) If the General Partner shall determine to consent to the merger or consolidation, the
General Partner shall approve the Merger Agreement, which shall set forth:

          (i) the names and jurisdictions of formation or organization of each of the business
entities proposing to merge or consolidate;

          (ii) the name and jurisdiction of formation or organization of the business entity that
is to survive the proposed merger or consolidation (the “Surviving Business Entity”);

          (iii) the terms and conditions of the proposed merger or consolidation;

          (iv) the manner and basis of exchanging or converting the equity securities of each
constituent business entity for, or into, cash, property or interests, rights, securities or
obligations of the Surviving Business Entity; and (i) if any general or limited partner
interests, securities or rights of any constituent business entity are not to be exchanged
or converted solely for, or into, cash, property or interests, rights, securities or
obligations of the Surviving Business Entity, the cash, property or general or limited
partner interests, rights, securities or obligations of any general or limited partnership,
corporation, trust, limited liability company, unincorporated business or other entity
(other than the Surviving Business Entity) which the holders of such interests, securities
or rights are to receive in exchange for, or upon conversion of their interests, securities
or rights, and (ii) in the case of securities represented by certificates, upon the
surrender of such certificates, which cash, property or interests, rights, securities or
obligations of the Surviving Business Entity or any general or limited partnership,
corporation, trust, limited liability company, unincorporated business or other entity
(other than the Surviving Business Entity), or evidences thereof, are to be delivered;

          (v) a statement of any changes in the constituent documents or the adoption of new
constituent documents (the articles or certificate of incorporation, articles of trust,
declaration of trust, certificate or agreement of limited partnership, operating agreement
or other similar charter or governing document) of the Surviving Business Entity to be
effected by such merger or consolidation;

          (vi) the effective time of the merger, which may be the date of the filing of the
certificate of merger pursuant to Section 14.4 or a later date specified in or determinable
in accordance with the Merger Agreement (provided, that if the effective time of the merger
is to be later than the date of the filing of such certificate of merger, the effective time
shall be fixed at a date or time certain at or prior to the time of the filing of such
certificate of merger and stated therein); and

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          (vii) such other provisions with respect to the proposed merger or consolidation that
the General Partner determines to be necessary or appropriate.

          (c) If the General Partner shall determine to consent to the conversion, the General Partner
may approve and adopt a Plan of Conversion containing such terms and conditions that the General
Partner determines to be necessary or appropriate.

Section 14.3 Approval by Limited Partners.

          (a) Except as provided in Sections 14.3(d) and 14.3(e), the General Partner, upon its approval
of the Merger Agreement or the Plan of Conversion, as the case may be, shall direct that the Merger
Agreement or the Plan of Conversion, as applicable, be submitted to a vote of Limited Partners,
whether at a special meeting or by written consent, in either case in accordance with the
requirements of Article XIII. A copy or a summary of the Merger Agreement or the Plan of
Conversion, as the case may be, shall be included in or enclosed with the notice of a special
meeting or the written consent.

          (b) Except as provided in Sections 14.3(d) and 14.3(e), the Merger Agreement or the Plan of
Conversion, as the case may be, shall be approved upon receiving the affirmative vote or consent of
the holders of a Unit Majority.

          (c) Except as provided in Sections 14.3(d) and 14.3(e), after such approval by vote or consent
of the Limited Partners, and at any time prior to the filing of the certificate of merger or
certificate of conversion pursuant to Section 14.4, the merger, consolidation or conversion may be
abandoned pursuant to provisions therefor, if any, set forth in the Merger Agreement or the Plan of
Conversion, as the case may be.

          (d) Notwithstanding anything else contained in this Article XIV or in this Agreement, the
General Partner is permitted, without Limited Partner approval, to convert the Partnership or any
Group Member into a new limited liability entity, to merge the Partnership or any Group Member
into, or convey all of the Partnership’s assets to, another limited liability entity which shall be
newly formed and shall have no assets, liabilities or operations at the time of such conversion,
merger or conveyance other than those it receives from the Partnership or other Group Member if (i)
the General Partner has received an Opinion of Counsel that the conversion, merger or conveyance,
as the case may be, would not result in the loss of the limited liability of any Limited Partner or
cause the Partnership to be treated as an association taxable as a corporation or otherwise to be
taxed as an entity for federal income tax purposes (to the extent not previously treated as such),
(ii) the sole purpose of such conversion, merger or conveyance is to effect a mere change in the
legal form of the Partnership into another limited liability entity and (iii) the governing
instruments of the new entity provide the Limited Partners and the General Partner with the same
rights and obligations as are herein contained.

          (e) Additionally, notwithstanding anything else contained in this Article XIV or in this
Agreement, the General Partner is permitted, without Limited Partner approval, to merge or
consolidate the Partnership with or into another entity if (A) the General Partner has received an
Opinion of Counsel that the merger or consolidation, as the case may be, would not result in the
loss of the limited liability of any Limited Partner or cause the Partnership to be

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treated as an association taxable as a corporation or otherwise to be taxed as an entity for
federal income tax purposes (to the extent not previously treated as such), (B) the merger or
consolidation would not result in an amendment to the Partnership Agreement, other than any
amendments that could be adopted pursuant to Section 13.1, (C) the Partnership is the Surviving
Business Entity in such merger or consolidation, (D) each Unit Outstanding immediately prior to the
effective date of the merger or consolidation is to be an identical Unit of the Partnership after
the effective date of the merger or consolidation, and (E) the number of Partnership Securities to
be issued by the Partnership in such merger or consolidation do not exceed 20% of the Partnership
Securities Outstanding immediately prior to the effective date of such merger or consolidation.

Section 14.4 Certificate of Merger or Conversion.

     Upon the required approval by the General Partner and the Unitholders of a Merger Agreement or
a Plan of Conversion, as the case may be, a certificate of merger or certificate of conversion, as
applicable, shall be executed and filed with the Secretary of State of the State of Delaware in
conformity with the requirements of the Delaware Act.

Section 14.5 Amendment of Partnership Agreement.

     Pursuant to Section 17-211(g) of the Delaware Act, an agreement of merger or consolidation
approved in accordance with this Article XIV may (a) effect any amendment to this Agreement or (b)
effect the adoption of a new partnership agreement for the Partnership if it is the Surviving
Business Entity. Any such amendment or adoption made pursuant to this Section 14.5 shall be
effective at the effective time or date of the merger or consolidation.

Section 14.6 Effect of Merger, Consolidation or Conversion.

          (a) At the effective time of the certificate of merger:

          (i) all of the rights, privileges and powers of each of the business entities that has
merged or consolidated, and all property, real, personal and mixed, and all debts due to any
of those business entities and all other things and causes of action belonging to each of
those business entities, shall be vested in the Surviving Business Entity and after the
merger or consolidation shall be the property of the Surviving Business Entity to the extent
they were of each constituent business entity;

          (ii) the title to any real property vested by deed or otherwise in any of those
constituent business entities shall not revert and is not in any way impaired because of the
merger or consolidation;

          (iii) all rights of creditors and all liens on or security interests in property of any
of those constituent business entities shall be preserved unimpaired; and

          (iv) all debts, liabilities and duties of those constituent business entities shall
attach to the Surviving Business Entity and may be enforced against it to the same extent as
if the debts, liabilities and duties had been incurred or contracted by it.

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          (b) At the effective time of the certificate of conversion:

          (i) the Partnership shall continue to exist, without interruption, but in the
organizational form of the converted entity rather than in its prior organizational form;

          (ii) all rights, title, and interests to all real estate and other property owned by
the Partnership shall continue to be owned by the converted entity in its new organizational
form without reversion or impairment, without further act or deed, and without any transfer
or assignment having occurred, but subject to any existing liens or other encumbrances
thereon;

          (iii) all liabilities and obligations of the Partnership shall continue to be
liabilities and obligations of the converted entity in its new organizational form without
impairment or diminution by reason of the conversion;

          (iv) all rights of creditors or other parties with respect to or against the prior
interest holders or other owners of the Partnership in their capacities as such in existence
as of the effective time of the conversion will continue in existence as to those
liabilities and obligations and may be pursued by such creditors and obligees as if the
conversion did not occur;

          (v) a proceeding pending by or against the Partnership or by or against any of Partners
in their capacities as such may be continued by or against the converted entity in its new
organizational form and by or against the prior partners without any need for substitution
of parties; and

          (vi) the Partnership Securities that are to be converted into partnership interests, shares, evidences of ownership, or other securities in the converted entity as provided in
the Plan of Conversion or certificate of conversion shall be so converted, and Partners
shall be entitled only to the rights provided in the Plan of Conversion or certificate of
conversion.

          (c) A merger, consolidation or conversion effected pursuant to this Article shall not be
deemed to result in a transfer or assignment of assets or liabilities from one entity to another.

ARTICLE XV

RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS

Section 15.1 Right to Acquire Limited Partner Interests.

          (a) Notwithstanding any other provision of this Agreement, if at
any time the General Partner and its Affiliates hold more than 80% of the total
Limited Partner Interests of any class then Outstanding, the General Partner
shall then have the right, which right it may assign and transfer in whole or
in part to the Partnership or any Affiliate of the General Partner,

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exercisable at its option, to purchase all, but not less than all, of such Limited Partner
Interests of such class then Outstanding held by Persons other than the General Partner and its
Affiliates, at the greater of (x) the Current Market Price as of the date three days prior to the
date that the notice described in Section 15.1(b) is mailed and (y) the highest price paid by the
General Partner or any of its Affiliates for any such Limited Partner Interest of such class
purchased during the 90-day period preceding the date that the notice described in Section 15.1(b)
is mailed.

          (b) If the General Partner, any Affiliate of the General Partner or the Partnership elects to
exercise the right to purchase Limited Partner Interests granted pursuant to Section 15.1(a), the
General Partner shall deliver to the Transfer Agent notice of such election to purchase (the
“Notice of Election to Purchase”) and shall cause the Transfer Agent to mail a copy of such Notice
of Election to Purchase to the Record Holders of Limited Partner Interests of such class (as of a
Record Date selected by the General Partner) at least 10, but not more than 60, days prior to the
Purchase Date. Such Notice of Election to Purchase shall also be published for a period of at least
three consecutive days in at least two daily newspapers of general circulation printed in the
English language and published in the Borough of Manhattan, New York. The Notice of Election to
Purchase shall specify the Purchase Date and the price (determined in accordance with Section
15.1(a)) at which Limited Partner Interests will be purchased and state that the General Partner,
its Affiliate or the Partnership, as the case may be, elects to purchase such Limited Partner
Interests, upon surrender of Certificates representing such Limited Partner Interests in exchange
for payment, at such office or offices of the Transfer Agent as the Transfer Agent may specify, or
as may be required by any National Securities Exchange on which such Limited Partner Interests are
listed. Any such Notice of Election to Purchase mailed to a Record Holder of Limited Partner
Interests at his address as reflected in the records of the Transfer Agent shall be conclusively
presumed to have been given regardless of whether the owner receives such notice. On or prior to
the Purchase Date, the General Partner, its Affiliate or the Partnership, as the case may be, shall
deposit with the Transfer Agent cash in an amount sufficient to pay the aggregate purchase price of
all of such Limited Partner Interests to be purchased in accordance with this Section 15.1. If the
Notice of Election to Purchase shall have been duly given as aforesaid at least 10 days prior to
the Purchase Date, and if on or prior to the Purchase Date the deposit described in the preceding
sentence has been made for the benefit of the holders of Limited Partner Interests subject to
purchase as provided herein, then from and after the Purchase Date, notwithstanding that any
Certificate shall not have been surrendered for purchase, all rights of the holders of such Limited
Partner Interests (including any rights pursuant to Articles IV, V, VI, and XII) shall thereupon
cease, except the right to receive the purchase price (determined in accordance with Section
15.1(a)) for Limited Partner Interests therefor, without interest, upon surrender to the Transfer
Agent of the Certificates representing such Limited Partner Interests, and such Limited Partner
Interests shall thereupon be deemed to be transferred to the General Partner, its Affiliate or the
Partnership, as the case may be, on the record books of the Transfer Agent and the Partnership, and
the General Partner or any Affiliate of the General Partner, or the Partnership, as the case may
be, shall be deemed to be the owner of all such Limited Partner Interests from and after the
Purchase Date and shall have all rights as the owner of such Limited Partner Interests (including
all rights as owner of such Limited Partner Interests pursuant to Articles IV, V, VI and XII).

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          (c) At any time from and after the Purchase Date, a holder of an Outstanding Limited Partner
Interest subject to purchase as provided in this Section 15.1 may surrender his Certificate
evidencing such Limited Partner Interest to the Transfer Agent in exchange for payment of the
amount described in Section 15.1(a), therefor, without interest thereon.

ARTICLE XVI

GENERAL PROVISIONS

Section 16.1 Addresses and Notices; Written Communications.

          (a) Any notice, demand, request, report or proxy materials required or permitted to be given
or made to a Partner or Assignee under this Agreement shall be in writing and shall be deemed given
or made when delivered in person or when sent by first class United States mail or by other means
of written communication to the Partner or Assignee at the address described below. Any notice,
payment or report to be given or made to a Partner or Assignee hereunder shall be deemed
conclusively to have been given or made, and the obligation to give such notice or report or to
make such payment shall be deemed conclusively to have been fully satisfied, upon sending of such
notice, payment or report to the Record Holder of such Partnership Securities at his address as
shown on the records of the Transfer Agent or as otherwise shown on the records of the Partnership,
regardless of any claim of any Person who may have an interest in such Partnership Securities by
reason of any assignment or otherwise. An affidavit or certificate of making of any notice, payment
or report in accordance with the provisions of this Section 16.1 executed by the General Partner,
the Transfer Agent or the mailing organization shall be prima facie evidence of the giving or
making of such notice, payment or report. If any notice, payment or report addressed to a Record
Holder at the address of such Record Holder appearing on the books and records of the Transfer
Agent or the Partnership is returned by the United States Postal Service marked to indicate that
the United States Postal Service is unable to deliver it, such notice, payment or report and any
subsequent notices, payments and reports shall be deemed to have been duly given or made without
further mailing (until such time as such Record Holder or another Person notifies the Transfer
Agent or the Partnership of a change in his address) if they are available for the Partner or
Assignee at the principal office of the Partnership for a period of one year from the date of the
giving or making of such notice, payment or report to the other Partners and Assignees. Any notice
to the Partnership shall be deemed given if received by the General Partner at the principal office
of the Partnership designated pursuant to Section 2.3. The General Partner may rely and shall be
protected in relying on any notice or other document from a Partner, Assignee or other Person if
believed by it to be genuine.

          (b) The terms “in writing”, “written communications,” “written notice” and words of similar
import shall be deemed satisfied under this Agreement by use of e-mail and other forms of
electronic communication.

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Section 16.2 Further Action.

     The parties shall execute and deliver all documents, provide all information and take or
refrain from taking action as may be necessary or appropriate to achieve the purposes of this
Agreement.

Section 16.3 Binding Effect.

     This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
heirs, executors, administrators, successors, legal representatives and permitted assigns.

Section 16.4 Integration.

     This Agreement constitutes the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.

Section 16.5 Creditors.

     None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.

Section 16.6 Waiver.

     No failure by any party to insist upon the strict performance of any covenant, duty, agreement
or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute waiver of any such breach of any other covenant, duty, agreement or condition.

Section 16.7 Counterparts.

     This Agreement may be executed in counterparts, all of which together shall constitute an
agreement binding on all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto or, in the case of a Person acquiring a
Unit, upon accepting the certificate evidencing such Unit or executing and delivering a Transfer
Application as herein described, independently of the signature of any other party.

Section 16.8 Applicable Law.

     This Agreement shall be construed in accordance with and governed by the laws of the State of
Delaware, without regard to the principles of conflicts of law.

Section 16.9 Invalidity of Provisions.

     If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions contained herein
shall not be affected thereby.

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Section 16.10 Consent of Partners.

     Each Partner hereby expressly consents and agrees that, whenever in this Agreement it is
specified that an action may be taken upon the affirmative vote or consent of less than all of the
Partners, such action may be so taken upon the concurrence of less than all of the Partners and
each Partner shall be bound by the results of such action.

Section 16.11 Facsimile Signatures.

     The use of facsimile signatures affixed in the name and on behalf of the transfer agent and
registrar of the Partnership on certificates representing Common Units is expressly permitted by
this Agreement.

Section 16.12 Third-Party Beneficiaries.

     Each Partner agrees that any Indemnitee shall be entitled to assert rights and remedies
hereunder as a third-party beneficiary hereto with respect to those provisions of this Agreement
affording a right, benefit or privilege to such Indemnitee.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

94

 

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

	 	 	 	 	 
	 	GENERAL PARTNER:

ENCORE ENERGY PARTNERS GP LLC

 	 
	 	By:  	/s/ Jon S. Brumley
 	 
	 	 	Jon S. Brumley 	 
	 	 	Chief Executive Officer and President 	 
	 
	 	LIMITED PARTNERS:

ENCORE PARTNERS LP HOLDINGS LLC

 	 
	 	By:  	/s/ Jon S. Brumley
 	 
	 	 	Jon S. Brumley 	 
	 	 	President 	 
	 
	 	ENCORE OPERATING, L.P.

 	 
	 	By:  	EAP OPERATING, INC., its general partner
 	 
	 	 	 
	 	By:  	                /s/ Jon S. Brumley
 	 
	 	 	Jon S. Brumley 	 
	 	 	President and Chief Executive Officer 	 
	 	 	 
	 	                         /s/ I. Jon Brumley
 	 
	 	I. Jon Brumley 	 
	 	 	 
	 	                                                   /s/ Jon S. Brumley
 	 
	 	Jon S. Brumley 	 

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

Signature Page

 

 

	 	 	 	 	 
	 	   /s/ Robert C. Reeves 	 
	 	Robert C. Reeves 	 
	 	 	 
	 	                                                   /s/ L. Ben Nivens
 	 
	 	L. Ben Nivens 	 
	 	 	 
	 	                                                   /s/ John W. Arms
 	 
	 	John W. Arms 	 
	 
	 	All Limited Partners now and hereafter admitted as

Limited Partners of the Partnership, pursuant to
powers of attorney now and hereafter executed in

favor of, and granted and delivered to the General
Partner.

ENCORE ENERGY PARTNERS GP LLC
 	 
	 	By:  	/s/ Jon S. Brumley
 	 
	 	 	Jon S. Brumley 	 
	 	 	Chief Executive Officer and President 	 

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

Signature Page

 

 

EXHIBIT A

to the Second Amended and Restated

Agreement of Limited Partnership of

Encore Energy Partners LP

Certificate Evidencing Common Units

Representing Limited Partner Interests in

Encore Energy Partners LP

			
	No.                     
	 	                     Common Units

     In accordance with
Section 4.1 of the Second Amended and Restated Agreement of Limited
Partnership of Encore Energy Partners LP, as amended, supplemented or restated from time to time
(the “Partnership Agreement”), Encore Energy Partners LP, a Delaware limited partnership (the
“Partnership”), hereby certifies that             
                   (the “Holder”) is the registered owner of
                 
      
        Common Units representing limited partner interests in the Partnership (the
“Common Units”) transferable on the books of the Partnership, in person or by duly authorized
attorney, upon surrender of this Certificate properly endorsed and accompanied by a properly
executed application for transfer of the Common Units represented by this Certificate. The rights,
preferences and limitations of the Common Units are set forth in, and this Certificate and the
Common Units represented hereby are issued and shall in all respects be subject to the terms and
provisions of, the Partnership Agreement. Copies of the Partnership Agreement are on file at, and
will be furnished without charge on delivery of written request to the Partnership at, the
principal office of the Partnership located at 777 Main Street, Suite 1400, Fort Worth, Texas
76102. Capitalized terms used herein but not defined shall have the meanings given them in the
Partnership Agreement.

     The Holder, by accepting this Certificate, is deemed to have (i) requested admission as, and
agreed to become, a Limited Partner and to have agreed to comply with and be bound by and to have
executed the Partnership Agreement, (ii) represented and warranted that the Holder has all right,
power and authority and, if an individual, the capacity necessary to enter into the Partnership
Agreement and is an Eligible Holder, (iii) granted the powers of attorney provided for in the
Partnership Agreement and (iv) made the waivers and given the consents and approvals contained in
the Partnership Agreement.

     This Certificate shall be governed by, and construed in accordance with, the laws of the State
of Delaware, without regard to principles of conflicts of laws thereof.

     THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF ENCORE ENERGY PARTNERS LP THAT
THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IF SUCH TRANSFER
WOULD (A) VIOLATE THE THEN APPLICABLE FEDERAL OR STATE SECURITIES LAWS OR RULES AND REGULATIONS OF
THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER GOVERNMENTAL
AUTHORITY WITH JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR QUALIFICATION OF
ENCORE ENERGY PARTNERS

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

A-1

 

LP UNDER THE LAWS OF THE STATE OF DELAWARE, OR (C) CAUSE ENCORE ENERGY PARTNERS LP TO BE
TREATED AS AN ASSOCIATION TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR
FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED). ENCORE ENERGY
PARTNERS GP LLC, THE GENERAL PARTNER OF ENCORE ENERGY PARTNERS LP, MAY IMPOSE ADDITIONAL
RESTRICTIONS ON THE TRANSFER OF THIS SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH
RESTRICTIONS ARE NECESSARY TO AVOID A SIGNIFICANT RISK OF ENCORE ENERGY PARTNERS LP BECOMING
TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY FOR FEDERAL INCOME TAX
PURPOSES. THE RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS
INVOLVING THIS SECURITY ENTERED INTO THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON
WHICH THIS SECURITY IS LISTED OR ADMITTED TO TRADING.

     This Certificate shall not be valid for any purpose unless it has been countersigned and
registered by the Transfer Agent and Registrar.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dated:                                          	 	 	 	Encore Energy Partners LP	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Countersigned and Registered by:	 	 	 	By:	 	Encore Energy Partners GP LLC,
its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	as Transfer Agent and Registrar	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Authorized Signature	 	 	 	 	 	Secretary
	 	 

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

A-2

 

[Reverse of Certificate]

ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of this Certificate,
shall be construed as follows according to applicable laws or regulations:

	 	 	 	 	 	 	 	 	 
	TEN COM -	 	as tenants in common	 	UNIF GIFT MIN ACT
	TEN ENT -

	 	as tenants by the entireties
	 	 	 	Custodian	 	 
	 

	 	 	 	 
	 	 	 	 
	 

	 	 	 	(Cust)
	 	 	 	(Minor)
	JT TEN -	 	as joint tenants with right of	 	under Uniform Gifts to
	 	 	survivorship and not as	 	Minors Act              
                   
	 	 	tenants in common	 	                         
       (State)	 	 

     Additional abbreviations, though not in the above list, may also be used.

ASSIGNMENT OF COMMON UNITS

IN

ENCORE ENERGY PARTNERS LP

	 	 	 	 	 
	     FOR VALUE RECEIVED,                      hereby assigns, conveys, sells and transfers unto
	 
	 	 	 	 
	 

	 	 	 	 
	(Please print or typewrite name

	 	(Please insert Social Security or other
	 	 
	and address of Assignee)

	 	identifying number of Assignee)	 	 

                     Common Units representing limited partner interests evidenced by this Certificate,
subject to the Partnership Agreement, and does hereby irrevocably constitute and appoint                     
as its attorney-in-fact with full power of substitution to transfer the same on the books of Encore
Energy Partners LP.

	 	 	 	 	 
	Date:     
                             

	 	NOTE
	 	The signature to any
endorsement hereon must
correspond with the name as
written upon the face of this
Certificate in every
particular, without alteration,
enlargement or change.

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

A-3

 

	 	 	 	 	 
	THE SIGNATURE(S) MUST BE

GUARANTEED BY AN ELIGIBLE 

GUARANTOR INSTITUTION (BANKS, 

STOCKBROKERS, SAVINGS 
AND LOAN
ASSOCIATIONS 
AND CREDIT UNIONS
WITH 
MEMBERSHIP IN AN 
APPROVED
SIGNATURE 
GUARANTEE MEDALLION 

PROGRAM), PURSUANT TO 
S.E.C.
RULE 17A(d)-15	 	(Signature) 	 	 
	 	 	 	 
	 	(Signature)
	 	 
	 	 	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 

     No transfer of the Common Units evidenced hereby will be registered on the books of the
Partnership, unless the Certificate evidencing the Common Units to be transferred is surrendered
for registration or transfer and an Application for Transfer of Common Units has been executed by a
transferee either (a) on the form set forth below or (b) on a separate application that the
Partnership will furnish on request without charge. A transferor of the Common Units shall have no
duty to the transferee with respect to execution of the transfer application in order for such
transferee to obtain registration of the transfer of the Common Units.

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

A-4

 

APPLICATION FOR TRANSFER OF COMMON UNITS

     Transferees of Common Units must execute and deliver this application to Encore Energy
Partners LP, c/o Encore Energy Partners GP LLC, 777 Main Street, Suite 1400, Fort Worth, Texas
76102; Attn: Chief Financial Officer, to be admitted as limited partners to Encore Energy Partners
LP.

     The undersigned (“Assignee”) hereby applies for transfer to the name of the Assignee of the
Common Units evidenced hereby and hereby certifies to Encore Energy Partners LP (the “Partnership”)
that the Assignee (including to the best of Assignee’s knowledge, any person for whom the Assignee
will hold the Common Units) is an Eligible Holder.1

     The Assignee (a) requests admission as a Substituted Limited Partner and agrees to comply with
and be bound by, and hereby executes, the Second Amended and Restated Agreement of Limited
Partnership of Encore Energy Partners LP, as amended, supplemented or restated to the date hereof
(the “Partnership Agreement”), (b) represents and warrants that the Assignee has all right, power
and authority and, if an individual, the capacity necessary to enter into the Partnership
Agreement, (c) appoints the General Partner of the Partnership and, if a Liquidator shall be
appointed, the Liquidator of the Partnership as the Assignee’s attorney-in-fact to execute, swear
to, acknowledge and file any document, including, without limitation, the Partnership Agreement and
any amendment thereto and the Certificate of Limited Partnership of the Partnership and any
amendment thereto, necessary or appropriate for the Assignee’s admission as a Substituted Limited
Partner and as a party to the Partnership Agreement, (d) gives the powers of attorney provided for
in the Partnership Agreement, and (e) makes the waivers and gives the consents and approvals
contained in the Partnership Agreement. Capitalized terms not defined herein have the meanings
assigned to such terms in the Partnership Agreement.

Date:       
                 
                         

	 	 	 
	 

	 	 
	Social Security or other identifying number
of Assignee

	 	Signature of Assignee
	 
 
	 	 
	 

	 	 
	Purchase Price including commissions, if any

	 	Name and Address of Assignee

Type of Entity (check one):

     
o     
Individual                    
o     Partnership
                    
o     Corporation

 

			
	1	 	The term Eligible Holder means a person or
entity qualified to hold an interest in oil and gas leases on federal lands. As
of the date hereof, Eligible Holder means: (1) a citizen of the United States;
(2) a corporation organized under the laws of the United States or of any state
thereof; (3) a public body, including a municipality; or (4) an association of
United States citizens, such as a partnership or limited liability company,
organized under the laws of the United States or of any state thereof, but only
if such association does not have any direct or indirect foreign ownership,
other than foreign ownership of stock in a parent corporation organized under
the laws of the United States or of any state thereof. For the avoidance of
doubt, onshore mineral leases or any direct or indirect interest therein may be
acquired and held by aliens only through stock ownership, holding or control in
a corporation organized under the laws of the United States or of any state
thereof.

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

A-5

 

	 	 	 
	     o     Trust

	 	o     Other (specify)
	 
	 	 
	Nationality (check one):
	 	 
	 
	 	 
	     o     U.S. Citizen, Resident or Domestic Entity
	 
	 	 
	     o     Foreign Corporation

	 	o     Non-resident Alien

     If the U.S. Citizen, Resident or Domestic Entity box is checked, the following certification
must be completed.

     Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the “Code”), the
Partnership must withhold tax with respect to certain transfers of property if a holder of an
interest in the Partnership is a foreign person. To inform the Partnership that no withholding is
required with respect to the undersigned interestholder’s interest in it, the undersigned hereby
certifies the following (or, if applicable, certifies the following on behalf of the
interestholder).

Complete Either A or B:

	A.	 	Individual Interestholder

	 	1.	 	I am not a non-resident alien for purposes of U.S. income taxation.
	 
	 	2.	 	My U.S. taxpayer identification number (Social Security Number) is                     .
	 
	 	3.	 	My home address is                                                             
                
              
          .

	B.	 	Partnership, Corporation or Other Interestholder

	 	1.	 	                               is not a foreign corporation, foreign partnership, foreign
trust (Name of Interestholder) or foreign estate (as those terms are defined in the
Code and Treasury Regulations).
	 
	 	2.	 	The interestholder’s U.S. employer identification number is                     .
	 
	 	3.	 	The interestholder’s office address and place of incorporation (if applicable)
is                     .

     The interestholder agrees to notify the Partnership within ten (10) days of the date the
interestholder becomes a foreign person.

     The interestholder understands that this certificate may be disclosed to the Internal Revenue
Service by the Partnership and that any false statement contained herein could be punishable by
fine, imprisonment or both.

     Under penalties of perjury, I declare that I have examined this certification and to the best
of my knowledge and belief it is true, correct and complete and, if applicable, I further declare
that I have authority to sign this document on behalf of:

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

A-6

 

                                                                       
         

Name of Interestholder

                                                                                

Signature and Date

                                                                                

Title (if applicable)

     Note: If the Assignee is a broker, dealer, bank, trust company, clearing corporation, other
nominee holder or an agent of any of the foregoing, and is holding for the account of any other
person, this application should be completed by an officer thereof or, in the case of a broker or
dealer, by a registered representative who is a member of a registered national securities exchange
or a member of the Financial Industry Regulatory Authority, or, in the case of any other nominee
holder, a person performing a similar function. If the Assignee is a broker, dealer, bank, trust
company, clearing corporation, other nominee owner or an agent of any of the foregoing, the above
certification as to any person for whom the Assignee will hold the Common Units shall be made to
the best of the Assignee’s knowledge.

ENCORE ENERGY PARTNERS LP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

A-7exv10w5

 

Exhibit
10.5

Compellent Technologies, Inc.

2007 Equity Incentive Plan

Approved by the Board: August 16, 2007

Approved by the Stockholders: September 12, 2007

Termination Date: August 15, 2017

1. General.

     (a) Eligible Award Recipients. The persons eligible to receive Awards are Employees,
Directors and Consultants.

     (b) Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, (iii) Restricted Stock Awards, (iv) Restricted
Stock Unit Awards, (v) Stock Appreciation Rights, (vi) Performance Stock Awards, (vii) Performance
Cash Awards and (viii) Other Stock Awards.

     (c) Purpose. The Company, by means of the Plan, seeks to secure and retain the services of
the group of persons eligible to receive Awards as set forth in Section 1(a), to provide incentives
for such persons to exert maximum efforts for the success of the Company and any Affiliate, and to
provide a means by which such eligible recipients may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of Stock Awards.

2. Administration.

     (a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c).

     (b) Powers of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

          (i) To determine from time to time (A) which of the persons eligible under the Plan shall be
granted Awards; (B) when and how each Award shall be granted; (C) what type or combination of types
of Awards shall be granted; (D) the provisions of each Award granted (which need not be identical),
including the time or times when a person shall be permitted to receive cash or Common Stock
pursuant to an Award; and (E) the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person.

          (ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement or in
the written terms of a Performance Cash Award, in a manner and to the extent it shall deem
necessary or expedient to make the Plan or Award fully effective.

          (iii) To settle all controversies regarding the Plan and Awards granted under it.

          (iv) To accelerate the time at which a Stock Award may first be exercised or the time during
which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the
provisions in the Award stating the time at which it may first be exercised or the time during
which it will vest.

1.

 

          (v) To effect, at any time and from time to time, (A) the reduction of the exercise price of
any outstanding Option or the strike price of any outstanding Stock Appreciation Right; (B) the
cancellation of any outstanding Option or Stock Appreciation Right and the grant in substitution
therefor of (I) a new Option or Stock Appreciation Right under the Plan or another equity plan of
the Company covering the same or different number of shares of Common Stock, (II) a Restricted
Stock Award, (III) a Restricted Stock Unit Award, (IV) an Other Stock Award, (V) cash, and/or (VI)
other valuable consideration as determined by the Board in its sole discretion; or (C) any other
action that is treated as a repricing under generally accepted accounting principles.

          (vi) To suspend or terminate the Plan at any time. Suspension or termination of the Plan
shall not impair rights and obligations under any Award granted while the Plan is in effect except
with the written consent of the adversely affected Participant.

          (vii) To amend the Plan in any respect the Board deems necessary or advisable, including,
without limitation, relating to Incentive Stock Options and certain nonqualified deferred
compensation under Section 409A of the Code and/or to bring the Plan or Awards granted under the
Plan into compliance therewith, subject to the limitations, if any, of applicable law. However,
except as provided in Section 10(a) relating to Capitalization Adjustments, stockholder approval
shall be required for any amendment of the Plan that either (A) materially increases the number of
shares of Common Stock available for issuance under the Plan, (B) materially expands the class of
individuals eligible to receive Awards under the Plan, (C) materially increases the benefits
accruing to Participants under the Plan or materially reduces the price at which shares of Common
Stock may be issued or purchased under the Plan, (D) materially extends the term of the Plan, or
(E) expands the types of Awards available for issuance under the Plan, but in each of (A) through
(E) only to the extent required by applicable law or listing requirements. Except as provided
above, rights under any Award granted before amendment of the Plan shall not be impaired by any
amendment of the Plan unless the Company requests the consent of the adversely affected
Participant, and such Participant consents in writing.

          (viii) To submit any amendment to the Plan for stockholder approval, including, but not
limited to, material amendments to the Plan intended to satisfy the requirements of (A) Section
162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based
compensation from the limit on corporate deductibility of compensation paid to Covered Employees,
(B) Section 422 of the Code regarding Incentive Stock Options, or (C) Rule 16b-3.

          (ix) To approve forms of Award Agreements for use under the Plan and to amend the terms of any
one or more Awards, including, but not limited to, amendments to provide terms more favorable than
previously provided in the Award Agreement, subject to any specified limits in the Plan that are
not subject to Board discretion; provided however, that, the rights under any Award shall not be
impaired by any such amendment unless the Company requests the consent of the adversely affected
Participant, and such Participant consents in writing. Notwithstanding anything to the contrary
herein, subject to the limitations of applicable law, if any, and without the adversely affected
Participant’s consent, the Board may amend the terms of any one or more Awards, or correct any
clerical errors, if necessary to maintain the qualified status of the Stock Award as an Incentive
Stock Option or to bring the Award into compliance with Section 409A of the Code and the related
guidance thereunder.

          (x) Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company and that are not in conflict with the
provisions of the Plan or Awards.

2.

 

          (xi) To adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees, Directors or Consultants who are foreign nationals or
employed outside the United States.

     (c) Delegation to Committee.

          (i) General. The Board may delegate some or all of the administration of the Plan to a
Committee or Committees. If administration is delegated to a Committee, the Committee shall have,
in connection with the administration of the Plan, the powers theretofore possessed by the Board
that have been delegated to the Committee, including the power to delegate to a subcommittee of the
Committee any of the administrative powers the Committee is authorized to exercise (and references
in the Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however,
to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time
to time by the Board. The Board may retain the authority to concurrently administer the Plan with
the Committee and may, at any time, revest in the Board some or all of the powers previously
delegated.

          (ii) Section 162(m) and Rule 16b-3 Compliance. In the sole discretion of the Board, the
Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of
the Code, and/or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3. In
addition, the Board or the Committee, in its sole discretion, may (A) delegate to a Committee who
need not be Outside Directors the authority to grant Awards to eligible persons who are either (I)
not then Covered Employees and are not expected to be Covered Employees at the time of recognition
of income resulting from such Award, or (II) not persons with respect to whom the Company wishes to
comply with Section 162(m) of the Code, and/or (B) delegate to a Committee who need not be
Non-Employee Directors the authority to grant Awards to eligible persons who are not then subject
to Section 16 of the Exchange Act.

     (d) Delegation to Officers. The Board may delegate to one or more Officers the authority to
do one or both of the following (i) designate Officers and Employees of the Company or any of its
Subsidiaries to be recipients of Options (and, to the extent permitted by Delaware law, other
Awards) and the terms thereof, and (ii) determine the number of shares of Common Stock to be
subject to such Stock Awards granted to such Officers and Employees; provided, however, that the
Board resolutions regarding such delegation shall specify the total number of shares of Common
Stock that may be subject to the Stock Awards granted by such Officers and that such Officer may
not grant a Stock Award to himself or herself. Notwithstanding anything to the contrary in this
Section 2(d), the Board may not delegate to an Officer authority to determine the Fair Market Value
of the Common Stock pursuant to Section 14(x)(ii) below.

     (e) Effect of Board’s Decision. All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

3. Shares Subject to the Plan.

     (a) Share Reserve. Subject to the provisions of Section 10(a) relating to Capitalization
Adjustments, the aggregate number of shares of common stock of the Company that may be issued
pursuant to Stock Awards under the Plan shall not exceed four million two hundred thousand
(4,200,000) shares of Common Stock, plus any shares subject to outstanding stock awards granted
under the Prior Plan that expire or terminate for any reason prior to exercise or settlement shall
become available for issuance pursuant to Awards granted hereunder. In addition, the number of
shares of Common Stock available for issuance under the Plan shall automatically increase on
January 1st of each

3.

 

year commencing in 2008 and ending on (and including) January 1, 2017, in an amount equal to
the lesser of (A) four percent (4%) of the total number of shares of Common Stock outstanding on
December 31st of the preceding calendar year, or (B) four million (4,000,000) shares.
Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year, to
provide that there shall be no increase in the share reserve for such calendar year or that the
increase in the share reserve for such calendar year shall be a lesser number of shares of Common
Stock than would otherwise occur pursuant to the preceding sentence. Shares may be issued in
connection with a merger or acquisition as permitted by NASD Rule 4350(i)(1)(A)(iii) or, if
applicable, NYSE Listed Company Manual Section 303A.08, or AMEX Company Guide Section 711 and such
issuance shall not reduce the number of shares available for issuance under the Plan.

     (b) Reversion of Shares to the Share Reserve. If (i) any Stock Award shall for any reason
expire or otherwise terminate, in whole or in part, without having been exercised in full, (ii) any
shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited back to or
repurchased by the Company because of the failure to meet a contingency or condition required for
the vesting of such shares, (iii) a Stock Award is settled in cash, (iv) any shares of Common Stock
are cancelled in accordance with the cancellation and regrant provisions of Section 3(b)(v), then
the shares of Common Stock not issued under such Stock Award, or forfeited to or repurchased by the
Company, shall revert to and again become available for issuance under the Plan. If any shares
subject to a Stock Award are not delivered to a Participant because such shares are withheld for
the payment of taxes or the Stock Award is exercised through a reduction of shares subject to the
Stock Award (i.e., “net exercised”) or an appreciation distribution in respect of a Stock
Appreciation right is paid in shares of Common Stock, the number of shares subject to the Stock
Award that are not delivered to the Participant shall remain available for subsequent issuance
under the Plan. If the exercise price of any Stock Award is satisfied by tendering shares of
Common Stock held by the Participant (either by actual delivery or attestation), then the number of
shares so tendered shall remain available for issuance under the Plan.

     (c) Incentive Stock Option Limit. Notwithstanding anything to the contrary in this Section
3(c), subject to the provisions of Section 10(a) relating to Capitalization Adjustments the
aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of
Incentive Stock Options shall be four million two hundred thousand (4,200,000) shares of Common
Stock immediately following the IPO Date, plus the amount of any increase in the number of shares
that may be available for issuance pursuant to Stock Awards pursuant to Section 3(a).

     (d) Source of Shares. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the Company on the open
market.

4. Eligibility.

     (a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such
terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive
Stock Options may be granted to Employees, Directors and Consultants.

     (b) Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive
Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value of the Common Stock on the date of grant and the Option is not exercisable
after the expiration of five (5) years from the date of grant.

     (c) Section 162(m) Limitation. Subject to the provisions of Section 10(a) relating to

4.

 

Capitalization Adjustments, at such time as the Company may be subject to the applicable
provisions of Section 162(m) of the Code, no Employee shall be eligible to be granted during any
calendar year Stock Awards whose value is determined by reference to an increase over an exercise
or strike price of at least one hundred percent (100%) of the Fair Market Value of the Common Stock
on the date the Stock Award is granted covering more than two hundred thousand (200,000) shares of
Common Stock.

5. Option Provisions.

     Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates shall be issued for shares of Common Stock purchased on exercise of
each type of Option. If an Option is not specifically designated as an Incentive Stock Option,
then the Option shall be a Nonstatutory Stock Option. The provisions of separate Options need not
be identical; provided, however, that each Option Agreement shall conform to (through incorporation
of provisions hereof by reference in the Option Agreement or otherwise) the substance of each of
the following provisions:

     (a) Term. Subject to the provisions of Section 4(a) regarding Ten Percent Stockholders, no
Option shall be exercisable after the expiration of ten (10) years from the date of its grant or
such shorter period specified in the Option Agreement.

     (b) Exercise Price. Subject to the provisions of Section 4(a) regarding Ten Percent
Stockholders, and notwithstanding anything in the Option Agreement to the contrary, the exercise
price of each Option shall be not less than one hundred percent (100%) of the Fair Market Value of
the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the
foregoing, an Option may be granted with an exercise price lower than one hundred percent (100%) of
the Fair Market Value of the Common Stock subject to the Option if such Option is granted pursuant
to an assumption or substitution for another option in a manner consistent with the provisions of
Sections 409A and 424(a) of the Code (whether or not such options are Incentive Stock Options).

     (c) Consideration. The purchase price of Common Stock acquired pursuant to the exercise of an
Option shall be paid, to the extent permitted by applicable law and as determined by the Board in
its sole discretion, by any combination of the methods of payment set forth below. The Board shall
have the authority to grant Options that do not permit all of the following methods of payment (or
otherwise restrict the ability to use certain methods) and to grant Options that require the
consent of the Company to utilize a particular method of payment. The methods of payment permitted
by this Section 5(c) are:

          (i) by cash, check, bank draft or money order payable to the Company;

          (ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of the stock subject to the Option, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;

          (iii) by delivery to the Company (either by actual delivery or attestation) of shares of
Common Stock;

          (iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of
shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair
Market Value that does not exceed the aggregate exercise price; provided, however, that the Company
shall accept a cash or other permitted payment from the Participant to the extent of any

5.

 

remaining balance of the aggregate exercise price not satisfied by such reduction in the
number of whole shares to be issued; provided, further, that shares of Common Stock will no longer
be outstanding under an Option and will not be exercisable thereafter to the extent that (A) shares
are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the
Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding
obligations; or

          (v) in any other form of legal consideration that may be acceptable to the Board in its sole
discretion and permissible under applicable law.

     (d) Transferability of Options. The Board may, in its sole discretion, impose such
limitations on the transferability of Options as the Board shall determine. If the Board
determines that an Option will be transferable, the Option will contain such additional terms and
conditions as the Board deems appropriate. In the absence of such a determination by the Board to
the contrary, the following restrictions on the transferability of Options shall apply:

          (i) Restrictions on Transfer. An Option shall not be transferable except by will or by the
laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder; provided, however, that the Board may, in its sole discretion, permit
transfer of the Option in a manner that is consistent with applicable tax and securities laws upon
the Optionholder’s request.

          (ii) Domestic Relations Orders. Notwithstanding the foregoing, an Option may be transferred
pursuant to a domestic relations order, provided, however, that if an Option is an Incentive Stock
Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

          (iii) Beneficiary Designation. Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form provided by or otherwise satisfactory to the
Company and any broker designated by the Company to effect Option exercises, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise
the Option. In the absence of such a designation, the executor or administrator of the
Optionholder’s estate shall be entitled to exercise the Option.

     (e) Vesting of Options Generally. The total number of shares of Common Stock subject to an
Option may vest and therefore become exercisable in periodic installments that may or may not be
equal. The Option may be subject to such other terms and conditions on the time or times when it
may or may not be exercised (which may be based on the satisfaction of Performance Goals or other
criteria) as the Board may deem appropriate. The vesting provisions of individual Options may
vary. The provisions of this Section 5(e) are subject to any Option provisions governing the
minimum number of shares of Common Stock as to which an Option may be exercised.

     (f) Termination of Continuous Service. In the event that an Optionholder’s Continuous Service
terminates (other than for Cause or upon the Optionholder’s death or Disability), the Optionholder
may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination of Continuous Service) but only within such period of time
ending on the earlier of (i) the date three (3) months following the termination of the
Optionholder’s Continuous Service (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement.
If, after termination of Continuous Service, the Optionholder does not exercise his or her Option
within the time specified herein or in the Option Agreement (as applicable), the Option shall
terminate.

6.

 

     (g) Extension of Termination Date. An Optionholder’s Option Agreement may provide that if the
exercise of the Option following the termination of the Optionholder’s Continuous Service (other
than for Cause or upon the Optionholder’s death or Disability) would be prohibited at any time
solely because the issuance of shares of Common Stock would violate the registration requirements
under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of a
period of three (3) months after the termination of the Optionholder’s Continuous Service during
which the exercise of the Option would not be in violation of such registration requirements and
would not subject the Optionholder to short-swing liability under Section 16(b) of the Exchange
Act, or (ii) the expiration of the term of the Option as set forth in the Option Agreement.

     (h) Disability of Optionholder. In the event that an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination of Continuous Service), but only within such period of time ending on the earlier of
(i) the date twelve (12) months following such termination of Continuous Service (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option
as set forth in the Option Agreement. If, after termination of Continuous Service, the
Optionholder does not exercise his or her Option within the time specified herein or in the Option
Agreement (as applicable), the Option shall terminate.

     (i) Death of Optionholder. In the event that (i) an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s death, or (ii) the Optionholder dies within the period
(if any) specified in the Option Agreement after the termination of the Optionholder’s Continuous
Service for a reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s
estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the option upon the Optionholder’s death, but only within the period
ending on the earlier of (A) the date eighteen (18) months following the date of death (or such
longer or shorter period specified in the Option Agreement), or (B) the expiration of the term of
such Option as set forth in the Option Agreement. If, after the Optionholder’s death, the Option
is not exercised within the time specified herein or in the Option Agreement (as applicable), the
Option shall terminate.

     (j) Termination for Cause. Except as otherwise explicitly provided in an Optionholder’s
Option Agreement, in the event that an Optionholder’s Continuous Service is terminated for Cause,
the Option shall terminate immediately and cease to remain outstanding.

     (k) Non-Exempt Employees. No Option granted to an Employee that is a non-exempt employee for
purposes of the Fair Labor Standards Act shall be first exercisable for any shares of Common Stock
until at least six months following the date of grant of the Option. The foregoing provision is
intended to operate so that any income derived by a non-exempt employee in connection with the
exercise or vesting of an Option will be exempt from his or her regular rate of pay.

6. Provisions of Stock Awards other than Options.

     (a) Restricted Stock Awards. Each Restricted Stock Award Agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. To the extent
consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock may be (i)
held in book entry form subject to the Company’s instructions until any restrictions relating to
the Restricted Stock Award lapse; or (ii) evidenced by a certificate, which certificate shall be
held in such form and manner as determined by the Board. The terms and conditions of Restricted
Stock Award Agreements may change from time to time, and the terms and conditions of separate
Restricted Stock Award

7.

 

Agreements need not be identical, provided, however, that each Restricted Stock Award
Agreement shall conform to (through incorporation of the provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

          (i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash,
check, bank draft or money order payable to the Company; (B) past or future services actually or to
be rendered to the Company or an Affiliate; or (C) any other form of legal consideration that may
be acceptable to the Board in its sole discretion and permissible under applicable law.

          (ii) Vesting. Shares of Common Stock awarded under a Restricted Stock Award Agreement may be
subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the
Board.

          (iii) Termination of Participant’s Continuous Service. In the event a Participant’s
Continuous Service terminates, the Company may receive via a forfeiture condition or a repurchase
right, any or all of the shares of Common Stock held by the Participant which have not vested as of
the date of termination of Continuous Service under the terms of the Restricted Stock Award
Agreement.

          (iv) Transferability. Rights to acquire shares of Common Stock under the Restricted Stock
Award Agreement shall be transferable by the Participant only upon such terms and conditions as are
set forth in the Restricted Stock Award Agreement, as the Board shall determine in its sole
discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains
subject to the terms of the Restricted Stock Award Agreement.

     (b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem appropriate. The terms
and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical,
provided, however, that each Restricted Stock Unit Award Agreement shall conform to (through
incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

          (i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will
determine the consideration, if any, to be paid by the Participant upon delivery of each share of
Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by
the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid
in any form of legal consideration that may be acceptable to the Board in its sole discretion and
permissible under applicable law.

          (ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose
such restrictions or conditions to the vesting of the Restricted Stock Unit Award as it, in its
sole discretion, deems appropriate.

          (iii) Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of
Common Stock, their cash equivalent, any combination thereof or in any other form of consideration,
as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

          (iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the
Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery
of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award
to a time after the vesting of such Restricted Stock Unit Award.

8.

 

          (v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common
Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend
equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock
Unit Award in such manner as determined by the Board. Any additional shares covered by the
Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all
the terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they
relate.

          (vi) Termination of Participant’s Continuous Service. Except as otherwise provided in the
applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award
that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

          (vii) Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set
forth herein, any Restricted Stock Unit Award granted under the Plan that is not exempt from the
requirements of Section 409A of the Code shall contain such provisions so that such Restricted
Stock Unit Award will comply with the requirements of Section 409A of the Code. Such restrictions,
if any, shall be determined by the Board and contained in the Restricted Stock Unit Award Agreement
evidencing such Restricted Stock Unit Award. For example, such restrictions may include, without
limitation, a requirement that any Common Stock that is to be issued in a year following the year
in which the Restricted Stock Unit Award vests must be issued in accordance with a fixed
pre-determined schedule.

     (c) Stock Appreciation Rights. Each Stock Appreciation Right Agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate. Stock
Appreciation Rights may be granted as stand-alone Stock Awards or in tandem with other Stock
Awards. The terms and conditions of Stock Appreciation Right Agreements may change from time to
time, and the terms and conditions of separate Stock Appreciation Right Agreements need not be
identical; provided, however, that each Stock Appreciation Right Agreement shall conform to
(through incorporation of the provisions hereof by reference in the agreement or otherwise) the
substance of each of the following provisions:

          (i) Term. No Stock Appreciation Right shall be exercisable after the expiration of ten (10)
years from the date of its grant or such shorter period specified in the Stock Appreciation Right
Agreement.

          (ii) Strike Price. Each Stock Appreciation Right will be denominated in shares of Common Stock
equivalents. Notwithstanding anything in the applicable Stock Award Agreement to the contrary, the
strike price of each Stock Appreciation Right shall not be less than one hundred percent (100%) of
the Fair Market Value of the Common Stock equivalents subject to the Stock Appreciation Right on
the date of grant.

          (iii) Calculation of Appreciation. The appreciation distribution payable on the exercise of a
Stock Appreciation Right will be not greater than an amount equal to the excess of (A) the
aggregate Fair Market Value (on the date of the exercise of the Stock Appreciation Right) of a
number of shares of Common Stock equal to the number of share of Common Stock equivalents in which
the Participant is vested under such Stock Appreciation Right, and with respect to which the
Participant is exercising the Stock Appreciation Right on such date, over (B) the aggregate strike
price of the Common Stock equivalents being exercised.

9.

 

          (iv) Vesting. At the time of the grant of a Stock Appreciation Right, the Board may impose
such restrictions or conditions to the vesting of such Stock Appreciation Right as it, in its sole
discretion, deems appropriate.

          (v) Exercise. To exercise any outstanding Stock Appreciation Right, the Participant must
provide written notice of exercise to the Company in compliance with the provisions of the Stock
Appreciation Right Agreement evidencing such Stock Appreciation Right.

          (vi) Payment. The appreciation distribution in respect of a Stock Appreciation Right may be
paid in Common Stock, in cash, in any combination of the two or in any other form of consideration,
as determined by the Board and set forth in the Stock Appreciation Right Agreement evidencing such
Stock Appreciation Right.

          (vii) Termination of Continuous Service. In the event that a Participant’s Continuous Service
terminates (other than for Cause), the Participant may exercise his or her Stock Appreciation Right
(to the extent that the Participant was entitled to exercise such Stock Appreciation Right as of
the date of termination of Continuous Service) but only within such period of time ending on the
earlier of (A) the date three (3) months following the termination of the Participant’s Continuous
Service (or such longer or shorter period specified in the Stock Appreciation Right Agreement), or
(B) the expiration of the term of the Stock Appreciation Right as set forth in the Stock
Appreciation Right Agreement. If, after termination of Continuous Service, the Participant does
not exercise his or her Stock Appreciation Right within the time specified herein or in the Stock
Appreciation Right Agreement (as applicable), the Stock Appreciation Right shall terminate.

          (viii) Termination for Cause. Except as explicitly provided otherwise in an Participant’s
Stock Appreciation Right Agreement, in the event that a Participant’s Continuous Service is
terminated for Cause, the Stock Appreciation Right shall terminate upon the termination date of
such Participant’s Continuous Service, and the Participant shall be prohibited from exercising his
or her Stock Appreciation Right from and after the time of such termination of Continuous Service.

          (ix) Extension of Termination Date. If the exercise of the Stock Appreciation Right following
the termination of the Participant’s Continuous Service would either (A) be prohibited at any time
solely because the issuance of shares of Common Stock would violate the registration requirements
under the Securities Act, or (B) subject the Participant to short-swing liability under Section
16(b) of the Exchange Act, then the Stock Appreciation Right shall terminate on the earlier of (I)
the expiration of a period of ninety (90) days after the termination of the Participant’s
Continuous Service during which the exercise of the Stock Appreciation Right would not be in
violation of such registration requirements and would not subject the Participant to short-swing
liability under Section 16(b) of the Exchange Act, or (II) the expiration of the term of the Stock
Appreciation Right as set forth in the Stock Appreciation Right Agreement.

          (x) Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set
forth herein, any Stock Appreciation Rights granted under the Plan that are not exempt from the
requirements of Section 409A of the Code shall contain such provisions so that such Stock
Appreciation Rights will comply with the requirements of Section 409A of the Code. Such
restrictions, if any, shall be determined by the Board and contained in the Stock Appreciation
Right Agreement evidencing such Stock Appreciation Right. For example, such restrictions may
include, without limitation, a requirement that a Stock Appreciation Right that is to be paid
wholly or partly in cash must be exercised and paid in accordance with a fixed pre-determined
schedule.

     (d) Performance Awards.

10.

 

          (i) Performance Stock Awards. A Performance Stock Award is either a Restricted Stock Award or
Restricted Stock Unit Award that may be granted or may vest based upon the attainment during a
Performance Period of certain Performance Goals. A Performance Stock Award may, but need not,
require the completion of a specified period of Continuous Service. The length of any Performance
Period, the Performance Goals to be achieved during the Performance Period, and the measure of
whether and to what degree such Performance Goals have been attained shall be conclusively
determined by the Committee in its sole discretion. The maximum Performance Stock Award that may
be granted in a calendar year to any Participant pursuant to this Section 6(c)(ix)(i) shall not
exceed the value of two hundred thousand (200,000) shares of Common Stock (as determined at the
time of grant). In addition, to the extent permitted by applicable law and the applicable Award
Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.

          (ii) Performance Cash Awards. A Performance Cash Award is a cash award granted pursuant to
this Section 6(d)(ii) that is paid upon the attainment during a Performance Period of certain
Performance Goals. A Performance Cash Award may also require the completion of a specified period
of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved
during the Performance Period, and the measure of whether and to what degree such Performance Goals
have been attained shall be conclusively determined by the Committee in its sole discretion. The
maximum Performance Cash Award that may be granted to a Participant in a calendar year and made
subject to the future attainment of one or more Performance Goals shall not exceed one million
dollars ($1,000,000). The Board may provide for or, subject to such terms and conditions as the
Board may specify, may permit a Participant to elect for, the payment of any Performance Cash Award
to be deferred to a specified date or event. The Committee may specify the form of payment of
Performance Cash Awards, which may be cash or other property, or may provide for a Participant to
have the option for his or her Performance Cash Award, or such portion thereof as the Board may
specify, to be paid in whole or in part in cash or other property. In addition, to the extent
permitted by applicable law and the applicable Award Agreement, the Board may determine that Common
Stock authorized under this Plan may be used in payment of Performance Cash Awards, including
additional shares in excess of the Performance Cash Award as an inducement to hold shares of Common
Stock.

          (iii) Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set
forth herein, any Performance Stock Award or Performance Cash Award granted under the Plan that is
not exempt from the requirements of Section 409A of the Code shall incorporate terms and conditions
necessary to avoid the consequences of Section 409A(a)(1) of the Code (or any similar provision).
Such restrictions, if any, shall be determined by the Board and contained in the applicable Award
Agreement.

     (e) Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock (“Other Stock Awards”) may be granted either alone or in
addition to Stock Awards provided for under Section 5 and the preceding provisions of this Section
6. Such Other Stock Awards will be subject to a written Award Agreement between the Company and a
holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award, and
each Other Stock Award shall be subject to the terms and conditions of the Plan. Subject to the
provisions of the Plan, the Board shall have sole and complete authority to determine the persons
to whom and the time or times at which such Other Stock Awards will be granted, the number of
shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock
Awards and all other terms and conditions of such Other Stock Awards.

11.

 

7. Grants to Non-Employee Directors

     Except as otherwise provided in the applicable Award Agreement, the following provisions shall
apply to each Stock Award granted to a Non-Employee Director:

     (a) Termination Upon Change in Control. In the event that a Non-Employee Director’s
Continuous Service terminates, immediately prior to, as of, or within twelve (12) months following
a Change in Control, the Non-Employee Director may exercise his or her Stock Awards (to the extent
that the Non-Employee Director was entitled to exercise such Stock Awards as of the date of
termination of Continuous Service) within such period of time ending on the earlier of (i) the date
twelve (12) months following the effective date of the Change in Control (or such longer or shorter
period specified in the Award Agreement), or (ii) the expiration of the term of the Stock Award as
set forth in the Award Agreement. If, after termination of Continuous Service, the Non-Employee
Director does not exercise his or her Option within the time specified herein or in the Award
Agreement (as applicable), the Stock Award shall terminate.

     (b) Corporate Transaction. In the event of a Corporate Transaction in which the surviving
corporation or acquiring corporation (or its parent company) does not assume or continue
outstanding Stock Awards granted to a Non-Employee Director or substitute similar stock awards for
such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed,
continued or substituted prior to the effective time of the Corporate Transaction, the vesting and
exercisability of such Stock Awards shall (contingent upon the effectiveness of the Corporate
Transaction) be accelerated in full to a date prior to the effective time of such Corporate
Transaction as the Board shall determine (or, if the Board shall not determine such a date, to the
date that is five (5) days prior to the effective time of the Corporate Transaction), and such
Stock Awards shall terminate if not exercised at or prior to the effective time of the Corporate
Transaction, and any reacquisition or repurchase rights held by the Company with respect to such
Stock Awards shall lapse (contingent upon the effectiveness of the Corporate Transaction).

     (c) Change in Control. In the event that a Non-Employee Director (i) is required to resign
his or her position as a Non-Employee Director as a condition of a Change in Control, or (ii) is
removed from his or her position as a Non-Employee Director in connection with a Change in Control,
the outstanding Stock Awards held by such Non-Employee Director shall become fully vested and
exercisable immediately prior to the effectiveness of such resignation or removal (and contingent
upon the effectiveness of such Change in Control).

8. Covenants of the Company.

     (a) Availability of Shares. During the terms of the Awards, the Company shall keep available
at all times the number of shares of Common Stock required to satisfy such Awards.

     (b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such
Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority that counsel for the Company deems necessary for the lawful
issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability
for failure to issue and sell Common Stock upon exercise of such Awards or make payments of cash or
other property in settlement of Awards unless and until such authority is obtained. A Participant
shall not be eligible for the grant of

12.

 

a Stock Award or the subsequent issuance of Common Stock pursuant to the Stock Award if such
grant or issuance would be in violation of any applicable securities laws.

     (c) No Obligation to Notify. The Company shall have no duty or obligation to any holder of an
Award to advise such holder as to the time or manner of exercising or settling such Award.
Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder
of a pending termination or expiration of an Award or a possible period in which the Award may not
be exercised or settled. The Company has no duty or obligation to minimize the tax consequences of
an Award to the holder of such Award.

9. Miscellaneous.

     (a) Use of Proceeds. Proceeds from the sale of shares of Common Stock pursuant to Stock
Awards shall constitute general funds of the Company.

     (b) Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by
the Company of an Award to any Participant shall be deemed completed as of the date of such
corporate action, unless otherwise determined by the Board, regardless of when the instrument,
certificate, or letter evidencing the Award is communicated to, or actually received or accepted
by, the Participant. If the Board determines that the terms of an Award do not reflect the
appropriate exercise, strike or purchase price on the appropriate date of grant in accordance with
the requirements of the Plan, the terms of the Award shall be automatically corrected to reflect
the appropriate price or other terms provided for under the Plan, as determined by the Board,
without the need for consent of the Participant; provided, however, that no such correction shall
result in a direct or indirect reduction in the exercise price or strike price of the Award.

     (c) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to an Award unless and
until (i) such Participant has satisfied all requirements for exercise or settlement of the Award
pursuant to its terms, and (ii) the issuance of the Common Stock pursuant to such exercise or
settlement has been entered into the books and records of the Company.

     (d) No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or other
instrument executed thereunder or in connection with any Award granted pursuant to the Plan shall
confer upon any Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice and with or without
cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with
the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of the state in which
the Company or the Affiliate is incorporated, as the case may be.

     (e) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof that exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of
the applicable Option Agreement(s) or any Board or Committee resolutions related thereto.

13.

 

     (f) Investment Assurances. The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Award, (i) to give written assurances satisfactory
to the Company as to the Participant’s knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and risks of exercising
the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the
Participant is acquiring Common Stock subject to the Award for the Participant’s own account and
not with any present intention of selling or otherwise distributing the Common Stock. The
foregoing requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (A) the issuance of the shares upon the exercise or acquisition of Common Stock
under the Award has been registered under a then currently effective registration statement under
the Securities Act, or (B) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or appropriate in order to
comply with applicable securities laws, including, but not limited to, legends restricting the
transfer of the Common Stock.

     (g) Withholding Obligations. Unless prohibited by the terms of an Award Agreement, the
Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation
relating to an Award by any of the following means (in addition to the Company’s right to withhold
from any compensation paid to the Participant by the Company) or by a combination of such means:
(i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from
the shares of Common Stock issued or otherwise issuable to the Participant in connection with the
Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the
minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to
avoid classification of the Stock Award as a liability for financial accounting purposes); (iii)
withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise
payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement.

     (h) Electronic Delivery. Any reference herein to a “written” agreement or document shall
include any agreement or document delivered electronically or posted on the Company’s intranet.

     (i) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion,
may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting
or settlement of all or a portion of any Award may be deferred and may establish programs and
procedures for deferral elections to be made by Participants. Deferrals by Participants will be
made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the
Board may provide for distributions while a Participant is still an employee. The Board is
authorized to make deferrals of Awards and determine when, and in what annual percentages,
Participants may receive payments, including lump sum payments, following the Participant’s
termination of employment or retirement, and implement such other terms and conditions consistent
with the provisions of the Plan and in accordance with applicable law.

     (j) Compliance with Section 409A. To the extent that the Board determines that any Award
granted under the Plan is, or may reasonably be, subject to Section 409A of the Code (together,
with any state law of similar effect, “Section 409A”), the Award Agreement evidencing such Award
shall incorporate the terms and conditions necessary to avoid the consequences described in Section
409A(a)(1) of the Code (or any similar provision). To the extent applicable and permitted by law,
the Plan and Award Agreements shall be interpreted in accordance with Section 409A and Department
of

14.

 

Treasury regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or other guidance that may be issued or amended after the Effective
Date.

          (i) Notwithstanding any provision of the Plan to the contrary, in the event that following the
Effective Date the Board determines that any Award is, or may reasonably be, subject to Section
409A and related Department of Treasury guidance (including such Department of Treasury guidance as
may be issued after the Effective Date), the Board may adopt such amendments to the Plan and the
applicable Award Agreement or adopt other policies and procedures (including amendments, policies
and procedures with retroactive effect), or take any other actions, that the Board determines are
necessary or appropriate to (A) exempt the Award from Section 409A and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (B) comply with the requirements
of Section 409A and related Department of Treasury guidance.

          (ii) In addition, and except as otherwise set forth in the applicable Award Agreement, if the
Company determines that any Award granted under this Plan constitutes, or may reasonably
constitute, “deferred compensation” under Section 409A and the Participant is a “specified
employee” of the Company at the relevant date, as such term is defined in Section 409A(a)(2)(B)(i)
(a “Specified Employee”), then, solely to the extent necessary to avoid the incurrence of the
adverse personal tax consequences under Section 409A, the time at which cash payments shall be
paid, or shares of Common Stock issued, to such Participant shall be automatically delayed as
follows: on the earlier to occur of (A) the date that is six months and one day after the date of
termination of the Participant’s Continuous Service or (B) the date of the Participant’s death
(such earlier date, the “Delayed Initial Payment Date”), the Company shall (I) pay to the
Participant a lump sum amount equal to the sum of the cash payments, and issue to the Participant
that number of shares of Common Stock, that the Participant would otherwise have received through
the Delayed Initial Payment Date if such issuance or payment had not been delayed pursuant to this
Section 9(j), in each case, without liability to the Participant for interest during such period of
delay, and (II) commence paying or issuing the balance of the amounts due under the Award in
accordance with the applicable schedules set forth in the Award Agreement.

     (k) Notwithstanding anything to the contrary contained herein, neither the Company nor any of
its Affiliates shall not be responsible for, or required to reimburse or otherwise make any
participant whole for, any tax or penalty imposed on, or losses incurred by, any Participant that
arises in connection with the potential or actual application of Section 409A to any Award granted
hereunder.

10. Adjustments upon Changes in Common Stock; Other Corporate Events.

     (a) Capitalization Adjustments. In the event of a Capitalization Adjustment, in order to
prevent diminution or enlargement of the benefits or potential benefits intended to be made
available under the Plan, the Board shall appropriately and proportionately adjust: (i) the
class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a) (including
Section 3(a)(ii)); (ii) the class(es) and maximum number of securities that may be issued pursuant
to the exercise of Incentive Stock Options pursuant to Section 3(c); (iii) the class(es) and
maximum number of securities that may be awarded to any person pursuant to Section 4(c) and
6(c)(ix)(i); and (iv) the class(es) and number of securities and price per share of stock subject
to outstanding Awards. The Board shall make such adjustments, and its determination shall be
final, binding and conclusive.

     (b) Dissolution or Liquidation. Except as otherwise provided in a Stock Award Agreement, in
the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than
Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a
forfeiture condition or the Company’s right of repurchase) shall terminate immediately prior to the
completion of such dissolution or liquidation, and the shares of Common Stock subject to the

15.

 

Company’s repurchase rights may be repurchased by the Company notwithstanding the fact that
the holder of such Stock Award is providing Continuous Service, provided, however, that the Board
may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable
and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not
previously expired or terminated) before the dissolution or liquidation is completed but contingent
on its completion. All other Awards that are not Stock Awards shall be treated in accordance with
the applicable Award Agreements.

     (c) Corporate Transaction. The following provisions shall apply to Awards in the event of a
Corporate Transaction unless otherwise provided in Section 7 hereof, the Award Agreement or any
other applicable written agreement between the Company or any Affiliate and the holder of the
Award, or unless otherwise expressly provided by the Board at the time of grant of an Award.
Except as otherwise stated in the Award Agreement, in the event of a Corporate Transaction, then,
notwithstanding any other provision of the Plan, the Board shall take one or more of the following
actions with respect to Awards, contingent upon the closing or completion of the Corporate
Transaction:

          (i) arrange for the surviving corporation or acquiring corporation (or the surviving or
acquiring corporation’s parent company) to assume or continue the Award or to substitute a similar
award for the Award (including, but not limited to, an award to acquire the same consideration paid
to the stockholders of the Company pursuant to the Corporate Transaction);

          (ii) arrange for the assignment of any reacquisition or repurchase rights held by the Company
in respect of Common Stock issued pursuant to the Award to the surviving corporation or acquiring
corporation (or the surviving or acquiring corporation’s parent company);

          (iii) accelerate the vesting of the Award (and, if applicable, the time at which the Award may
be exercised or settled) to a date prior to the effective time of such Corporate Transaction as the
Board shall determine (or, if the Board shall not determine such a date, to the date that is five
(5) days prior to the effective date of the Corporate Transaction), with such Award terminating if
not exercised (if applicable) at or prior to the effective time of the Corporate Transaction;

          (iv) arrange for the lapse of any reacquisition or repurchase rights held by the Company with
respect to the Award; and

          (v) cancel or arrange for the cancellation of the Award, in exchange for the payment, in such
form as may be determined by the Board, in an amount equal to the excess, if any, of (A) the value
of the property the holder of the Award would have received upon the exercise or settlement of the
Award as to all shares subject to the Award, over (B) any exercise or purchase price payable by
such holder in connection with such exercise or settlement.

     The Board need not take the same action with respect to all Awards or with respect to all
Participants.

     (d) Change in Control. An Award may be subject to additional acceleration of vesting and
exercisability upon or after a Change in Control as may be provided in the Award Agreement for such
Award or as may be provided in Section 7 hereof and/or any other applicable written agreement
between the Company or any Affiliate and the Participant. An Award may vest as to all or any
portion of the cash or shares subject to the Award (i) immediately upon the occurrence of a Change
in Control, whether or not such Award is assumed, continued, or substituted by a surviving or
acquiring entity in the Change in Control, or (ii) in the event a Participant’s Continuous Service
is terminated, actually or constructively, within a designated period following the occurrence of a
Change in Control. In the absence of such provisions, no such acceleration shall occur.

16.

 

11. Termination or Suspension of the Plan.

     (a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless terminated
sooner, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is adopted by the Board. No Awards may be granted under the Plan while the Plan is suspended
or after it is terminated.

     (b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights
and obligations under any Award granted while the Plan is in effect except with the written consent
of the adversely affected Participant.

12. Effective Date of Plan.

     The Plan shall become effective on the IPO Date, but no Stock Award shall be exercised (or, in
the case of a Restricted Stock Award, Restricted Stock Unit Award, Performance Stock Award, or
Other Stock Award shall be granted and no Performance Cash Award shall be settled) unless and until
the Plan has been approved by the stockholders of the Company, which approval shall be within
twelve (12) months after the date the Plan is adopted by the Board.

13. Choice of Law.

     The law of the State of Delaware shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.

14. Definitions. 

     As used in the Plan, the following definitions shall apply to the capitalized terms indicated
below:

     (a) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the
Company as such terms are defined in Rule 405 of the Securities Act. The Board shall have the
authority to determine the time or times at which “parent” or “subsidiary” status is determined
within the foregoing definition.

     (b) “Annual Meeting” means the annual meeting of the stockholders of the Company.

     (c) “Award” means a Stock Award or a Performance Cash Award.

     (d) “Award Agreement” means a Stock Award Agreement or the written terms of a Performance Cash
Award. Each Award Agreement shall be subject to the terms and conditions of the Plan.

     (e) “Board” means the Board of Directors of the Company.

     (f) “Capitalization Adjustment” means any change that is made in, or other events that occur
with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the
Effective Date without the receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than
cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in
corporate structure or other transaction not involving the receipt of consideration by the
Company). Notwithstanding the foregoing, the conversion of any convertible securities of the
Company shall not be treated as a transaction “without the receipt of consideration” by the
Company.

17.

 

     (g) “Cause” means with respect to a Participant, the occurrence of any of the following
events: (i) such Participant’s commission of any felony or any crime involving fraud, dishonesty
or moral turpitude under the laws of the United States or any state thereof; (ii) such
Participant’s attempted commission of, or participation in, a fraud or act of dishonesty against
the Company; (iii) such Participant’s intentional, material violation of any contract or agreement
between the Participant and the Company or of any statutory duty owed to the Company; (iv) such
Participant’s unauthorized use or disclosure of the Company’s confidential information or trade
secrets; or (v) such Participant’s gross misconduct. The determination that a termination of the
Participant’s Continuous Service is either for Cause or without Cause shall be made by the Board in
its sole discretion. Any determination by the Board that the Continuous Service of a Participant
was terminated with or without Cause for the purposes of outstanding Awards held by such
Participant shall have no effect upon any determination of the rights or obligations of the Company
or such Participant for any other purpose.

     (h) “Change in Control” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

          (i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power of the Company’s
then outstanding securities other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person from the Company in a transaction or series of related transactions the primary
purpose of which is to obtain financing for the Company through the issuance of equity securities
or (B) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”)
exceeds the designated percentage threshold of the outstanding voting securities as a result of a
repurchase or other acquisition of voting securities by the Company reducing the number of shares
outstanding, provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of voting securities by the Company, and after such share
acquisition, the Subject Person becomes the Owner of any additional voting securities that,
assuming the repurchase or other acquisition had not occurred, increases the percentage of the then
outstanding voting securities Owned by the Subject Person over the designated percentage threshold,
then a Change in Control shall be deemed to occur;

          (ii) there is consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company and, immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly
or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%)
of the combined outstanding voting power of the surviving Entity in such merger, consolidation or
similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power
of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each
case in substantially the same proportions as their Ownership of the outstanding voting securities
of the Company immediately prior to such transaction;

          (iii) there is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a
sale, lease, license or other disposition of all or substantially all of the consolidated assets of
the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting
power of the voting securities of which are Owned by stockholders of the Company in substantially
the same proportions as their Ownership of the outstanding voting securities of the Company
immediately prior to such sale, lease, license or other disposition; or

18.

 

          (iv) over a twelve month period, individuals who, on the date the Plan is adopted by the
Board, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least
a majority of the members of the Board; provided, however, that if the appointment or election (or
nomination for election) of any new Board member was approved or recommended by a majority vote of
the members of the Incumbent Board then still in office, such new member shall, for purposes of the
Plan, be considered as a member of the Incumbent Board.

     For avoidance of doubt, the term Change in Control shall not include a sale of assets, merger
or other transaction effected exclusively for the purpose of changing the domicile of the Company.

     Notwithstanding the foregoing or any other provision of the Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the Company or any
Affiliate and the Participant shall supersede the foregoing definition with respect to Awards
subject to such agreement; provided, however, that if no definition of Change in Control or any
analogous term is set forth in such an individual written agreement, the foregoing definition shall
apply.

     (i) “Code” means the Internal Revenue Code of 1986, as amended.

     (j) “Committee” means a committee of one (1) or more Directors to whom authority has been
delegated by the Board in accordance with Section 2(c).

     (k) “Common Stock” means the common stock of the Company.

     (l) “Company” means Compellent Technologies, Inc., a Delaware corporation.

     (m) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is compensated for such services, or
(ii) serving as a member of the board of directors of an Affiliate and is compensated for such
services. However, service solely as a Director, or payment of a fee for such service, shall not
cause a Director to be considered a “Consultant” for purposes of the Plan.

     (n) “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A
change in the capacity in which the Participant renders service to the Company or an Affiliate as
an Employee, Consultant or Director or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of the Participant’s service
with the Company or an Affiliate, shall not, by itself, terminate a Participant’s Continuous
Service; provided, however, if the Entity for which a Participant is rendering services ceases to
qualify as an “Affiliate,” as determined by the Board in its sole discretion, such Participant’s
Continuous Service shall be considered to have terminated on the date such Entity ceases to qualify
as an Affiliate. To the extent a Participant, upon a change in capacity of service, ceases to
provide service at a rate of more than 20% of his or her rate of service (immediately prior to the
change in capacity), such Participant may be deemed to have suffered a termination of Continuous
Service. To the extent permitted by law, the Board or the chief executive officer of the Company,
in that party’s sole discretion, may determine whether Continuous Service shall be considered
interrupted in the case of: (i) any leave of absence approved by the Board of the chief executive
officer of the Company, including sick leave, military leave or any other personal leave; or (ii)
transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing,
and except as otherwise required by applicable law or as otherwise determined by the Company, a
leave of absence shall be treated as Continuous Service for purposes of vesting in a Stock Award
only to such extent as may be provided in the Company’s leave of absence policy, in the written
terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise
required by law.

19.

 

     (o) “Corporate Transaction” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

          (i) a sale or other disposition of all or substantially all, as determined by the Board in its
sole discretion, of the consolidated assets of the Company and its Subsidiaries;

          (ii) a sale or other disposition of at least ninety percent (90%) of the outstanding
securities of the Company;

          (iii) the consummation of a merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or

          (iv) the consummation of a merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of
the merger, consolidation or similar transaction into other property, whether in the form of
securities, cash or otherwise.

     (p) “Covered Employee” shall have the meaning provided in Section 162(m)(3) of the Code and
the regulations promulgated thereunder.

     (q) “Director” means a member of the Board.

     (r) “Disability” means, with respect to a Participant, the inability of such Participant to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, as provided in Section 22(e)(3) and 409A(a)(2)(c)(i)
of the Code.

     (s) “Effective Date” means the effective date of the Plan as set forth in Section 12.

     (t) “Employee” means any person employed by the Company or an Affiliate. However, service
solely as a Director, or payment of a fee for such services, shall not cause a Director to be
considered an “Employee” for purposes of the Plan.

     (u) “Entity” means a corporation, partnership, limited liability company or other entity.

     (v) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (w) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include
(i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or
any Subsidiary of the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned,
directly or indirectly, by the stockholders of the Company in substantially the same proportions as
their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the
meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the
Owner, directly or indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then outstanding securities.

20.

 

     (x) “Fair Market Value” means, as of any date, the value of the Common Stock determined as
follows:

          (i) If the Common Stock is listed on any established stock exchange or traded on any
established market, the Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or
market (or the exchange or market with the greatest volume of trading in the Common Stock) on the
date of determination, as reported in The Wall Street Journal or such other source as the Board
deems reliable. Unless otherwise provided by the Board, if there is no closing sales price (or
closing bid if no sales were reported) for the Common Stock on the date of determination, then the
Fair Market Value shall be the mean between the bid and asked prices for the Common Stock on the
last preceding date for which such quotation exists.

          (ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined by the Board in good faith and in a manner that complies with Section 409A of the Code.

     (y) “Incentive Stock Option” means an Option which qualifies as an “incentive stock option”
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

     (z) “IPO Date” means the date of the underwriting agreement between the Company and the
underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the
Common Stock is priced for the initial public offering.

     (aa) “Non-Employee Director” means a Director who either (i) is not a current employee or
officer of the Company or an Affiliate, does not receive compensation, either directly or
indirectly, from the Company or an Affiliate for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure
would be required under Item 404(a) of Regulation S-K, and is not engaged in a business
relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or
(ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

     (bb) “Nonstatutory Stock Option” means an Option that does not qualify as an Incentive Stock
Option.

     (cc) “Officer” means a person who is an officer of the Company within the meaning of Section
16 of the Exchange Act and the rules and regulations promulgated thereunder.

     (dd) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase
shares of Common Stock granted pursuant to the Plan.

     (ee) “Option Agreement” means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an Option grant. Each Option Agreement shall be subject to
the terms and conditions of the Plan.

     (ff) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.

21.

 

     (gg) “Other Stock Award” means an award based in whole or in part by reference to the Common
Stock which is granted pursuant to the terms and conditions of Section 6(c)(ix).

     (hh) “Outside Director” means a Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated
corporation” who receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or
an “affiliated corporation,” and does not receive remuneration from the Company or an “affiliated
corporation,” either directly or indirectly, in any capacity other than as a Director, or (ii) is
otherwise considered an “outside director” for purposes of Section 162(m) of the Code.

     (ii) “Own,” “Owned,” “Owner,” “Ownership” A person or Entity shall be deemed to “Own,” to
have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or
Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to direct the voting,
with respect to such securities.

     (jj) “Participant” means a person to whom an Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Award.

     (kk) “Performance Criteria” means the one or more criteria that the Board shall select for
purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria
that shall be used to establish such Performance Goals may be based on any one of, or combination
of, on a U.S. generally accepted accounting standards or non-generally accepted accounting
standards basis, the following: (i) earnings per share; (ii) earnings before interest, taxes and
depreciation; (iii) earnings before interest, taxes, depreciation and amortization (EBITDA); (iv)
total stockholder return; (v) return on equity; (vi) return on assets, investment, or capital
employed; (vii) operating margin; (viii) gross margin; (ix) operating income; (x) net income
(before or after taxes); (xi) net operating income; (xii) net operating income after tax; (xiii)
pre- and after-tax income; (xiv) pre-tax profit; (xv) operating cash flow; (xvi) sales or revenue
targets; (xvii) orders and revenue; (xviii) increases in revenue or product revenue; (xix) expenses
and cost reduction goals; (xx) improvement in or attainment of expense levels; (xxi) improvement in
or attainment of working capital levels; (xxii) economic value added (or an equivalent metric);
(xxiii) market share; (xxiv) cash flow; (xxv) cash flow per share; (xxvi) share price performance;
(xxvii) debt reduction; (xxviii) implementation or completion of projects or processes; (xxix)
customer satisfaction; (xxx) stockholders’ equity; (xxxi) quality measures; and (xxxii) to the
extent that a Stock Award is not intended to comply with Section 162(m) of the Code, other measures
of performance selected by the Board. Partial achievement of the specified criteria may result in
the payment or vesting corresponding to the degree of achievement as specified in the Award
Agreement. The Board shall, in its sole discretion, define the manner of calculating the
Performance Criteria it selects to use for such Performance Period.

     (ll) “Performance Goals” means, for a Performance Period, the one or more goals established by
the Board for the Performance Period based upon the satisfaction of the Performance Criteria.
Performance Goals may be based on a Company-wide basis, with respect to one or more business units,
divisions, Affiliates, or business segments, and in either absolute terms or relative to the
performance of one or more comparable companies or the performance of one or more relevant indices.
At the time of the grant of any Award, the Board is authorized to determine whether, when
calculating the attainment of Performance Goals for a Performance Period: (i) to exclude
restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as
applicable, for non-U.S. dollar denominated net sales and operating earnings; (iii) to exclude the
effects of changes to generally

22.

 

accepted accounting standards required by the Financial Accounting Standards Board; (iv) to
exclude the effects of any statutory adjustments to corporate tax rates; and (v) to exclude the
effects of any “extraordinary items” as determined under generally accepted accounting principles.
In addition, the Board retains the discretion to reduce or eliminate the compensation or economic
benefit due upon attainment of Performance Goals.

     (mm) “Performance Period” means one or more periods of time, which may be of varying and
overlapping duration, as the Committee may select, over which the attainment of one or more
Performance Goals will be measured for the purpose of determining a Participant’s right to and the
payment of a Performance Stock Award or a Performance Cash Award.

     (nn) “Performance Stock Award” means a Restricted Stock Award or Restricted Stock Unit Award
which is granted pursuant to the terms and conditions of Section 6(c)(ix)(i).

     (oo) “Plan” means this Compellent Technologies, Inc. 2007 Equity Incentive Plan.

     (pp) “Prior Plan” means the Company’s 2002 Stock Option Plan as in effect immediately prior to
the Effective Date.

     (qq) “Restricted Stock Award” means an award of shares of Common Stock which is granted
pursuant to the terms and conditions of Section 6(a).

     (rr) “Restricted Stock Award Agreement” means a written agreement between the Company and a
holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award
grant. Each Restricted Stock Award Agreement shall be subject to the terms and conditions of the
Plan.

     (ss) “Restricted Stock Unit Award” means a right to receive shares of Common Stock which is
granted pursuant to the terms and conditions of Section 6(b).

     (tt) “Restricted Stock Unit Award Agreement” means a written agreement between the Company and
a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock
Unit Award grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms and
conditions of the Plan.

     (uu) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.

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

     (ww) “Stock Appreciation Right” means a right to receive the appreciation on Common Stock that
is granted pursuant to the terms and conditions of Section 6(c).

     (xx) “Stock Appreciation Right Agreement” means a written agreement between the Company and a
holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation
Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions
of the Plan.

     (yy) “Stock Award” means any right to receive Common Stock granted under the Plan, including
an Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, a
Performance Stock Award, or Other Stock Award.

23.

 

     (zz) “Stock Award Agreement” means a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be
subject to the terms and conditions of the Plan.

     (aaa) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, stock
of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company,
and (ii) any partnership, limited liability company or other entity in which the Company has a
direct or indirect interest (whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%).

     (bbb) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Affiliate.

24.

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