Document:

exv10w4

 

EXHIBIT 10.4

FORM OF

AMENDED AND RESTATED

ADMINISTRATIVE SERVICES AGREEMENT

AMONG

ENCORE ENERGY PARTNERS GP LLC,

ENCORE ENERGY PARTNERS LP,

ENCORE ENERGY PARTNERS OPERATING LLC,

AND

ENCORE OPERATING, L.P.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	Section 1.1
	 	Definitions	 	 	1	 
	Section 1.2
	 	Construction	 	 	4	 
	 
	 	 	 	 	 	 
	ARTICLE II RETENTION OF ENCORE OPERATING; SCOPE OF SERVICES	 	 	4	 
	 
	 	 	 	 	 	 
	Section 2.1
	 	Retention of Encore Operating	 	 	4	 
	Section 2.2
	 	Scope of Services	 	 	5	 
	Section 2.3
	 	Exclusion of Services	 	 	5	 
	Section 2.4
	 	Performance of Services by Affiliates and Third Parties	 	 	5	 
	Section 2.5
	 	Intellectual Property	 	 	5	 
	Section 2.6
	 	Appointment of Independent Accounting Firm and Independent Petroleum Engineer	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE III BOOKS, RECORDS AND REPORTING	 	 	6	 
	 
	 	 	 	 	 	 
	Section 3.1
	 	Books and Records	 	 	6	 
	Section 3.2
	 	Audits	 	 	6	 
	Section 3.3
	 	Reports	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE IV PAYMENT AMOUNT	 	 	6	 
	 
	 	 	 	 	 	 
	Section 4.1
	 	Payment Amount	 	 	7	 
	Section 4.2
	 	Payment of Payment Amount	 	 	7	 
	Section 4.3
	 	Disputed Charges	 	 	8	 
	Section 4.4
	 	Set Off	 	 	8	 
	Section 4.5
	 	Encore Operating’s Employees	 	 	8	 
	Section 4.6
	 	Approval of Expenses	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE V FORCE MAJEURE	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE VI ASSIGNMENTS AND SUBCONTRACTS	 	 	9	 
	 
	 	 	 	 	 	 
	Section 6.1
	 	Assignments	 	 	9	 
	Section 6.2
	 	Other Requirements	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE VII TERMINATION	 	 	10	 
	 
	 	 	 	 	 	 
	Section 7.1
	 	Termination by the Partnership on behalf of the Partnership Group	 	 	10	 
	Section 7.2
	 	Termination by Encore Operating	 	 	11	 
	Section 7.3
	 	Effect of Termination	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE VIII CONFIDENTIAL INFORMATION	 	 	12	 
	 
	 	 	 	 	 	 
	Section 8.1
	 	Nondisclosure	 	 	12	 
	Section 8.2
	 	Permitted Disclosure	 	 	12	 

i

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ARTICLE IX LIMITATION OF LIABILITY; INDEMNIFICATION	 	 	12	 
	 
	 	 	 	 	 	 
	Section 9.1
	 	Limitation of Encore Operating’s Liability	 	 	12	 
	Section 9.2
	 	Partnership’s Indemnity	 	 	12	 
	Section 9.3
	 	Limitation of Damages	 	 	13	 
	Section 9.4
	 	Affiliate; Third Parties	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE X DISPUTE RESOLUTION	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE XI GENERAL PROVISIONS	 	 	13	 
	 
	 	 	 	 	 	 
	Section 11.1
	 	Notices	 	 	13	 
	Section 11.2
	 	Further Action	 	 	14	 
	Section 11.3
	 	Binding Effect	 	 	14	 
	Section 11.4
	 	Integration	 	 	14	 
	Section 11.5
	 	Creditors	 	 	14	 
	Section 11.6
	 	Waiver	 	 	15	 
	Section 11.7
	 	Counterparts	 	 	15	 
	Section 11.8
	 	Applicable Law	 	 	15	 
	Section 11.9
	 	Invalidity of Provisions	 	 	15	 
	Section 11.10
	 	Amendment or Restatement	 	 	15	 
	Section 11.11
	 	Directly or Indirectly	 	 	15	 

ii

 

AMENDED AND RESTATED

ADMINISTRATIVE SERVICES AGREEMENT

     THIS AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT is entered into on, and effective
as of _________, 2007 (the “Effective Date”), among Encore Energy Partners GP LLC, a Delaware
limited liability company (the “General Partner”), Encore Energy Partners LP, a Delaware limited
partnership (the “Partnership”), Encore Energy Partners Operating LLC, a Delaware limited liability
company (the “Operating Company”), and Encore Operating, L.P., a Texas limited partnership (“Encore
Operating,” and collectively with the General Partner, the Partnership and the Operating Company,
the “Parties” and each, a “Party”), and amends and restates in its entirety the Administrative
Services Agreement dated as of March 7, 2007.

RECITALS

     A. The Partnership is the owner, directly or indirectly, of interests in the Business (as
hereinafter defined);

     B. The Partnership Group (as hereinafter defined) requires certain services to operate the
Business and to fulfill other general and administrative functions relating to the Business; and

     C. The Partnership Group desires that Encore Operating provide such services, and Encore
Operating is willing to undertake such engagement, subject to the terms and conditions of this
Agreement;

     NOW, THEREFORE, the General Partner, the Partnership, the Operating Company and Encore
Operating 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.

     “Administrative Fee” is defined in Section 4.1.

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

     “Agreement” means this Amended and Restated Administrative Services Agreement, as it may be
amended, supplemented or restated from time to time.

     “Bankrupt” with respect to any Person means such Person shall generally be unable to pay its
debts as such debts become due, or shall so admit in writing or shall make a general

 

 

assignment for the benefit of creditors; or any proceeding shall be instituted by or against such Person seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property and, in the case of any such proceeding instituted against
it (but not instituted by it), shall remain undismissed or unstayed for a period of 30 days; or
such Person shall take any action to authorize any of the actions set forth above.

     “BOE” means one barrel of oil equivalent, calculated by converting natural gas to oil
equivalent barrels at a ratio of six thousand cubic feet of natural gas to one stock tank barrel,
or 42 U.S. gallons liquid volume, of oil.

     “Business” means the business of the Partnership Group.

     “Confidential Information” means non-public information about the disclosing Party’s or any of
its Affiliates’ business or activities that is proprietary and confidential, which shall include,
without limitation, all business, financial, technical and other information, including software
(source and object code) and programming code, of a Party or its Affiliates marked or designated
“confidential” or “proprietary” or by its nature or the circumstances surrounding its disclosure it
should reasonably be regarded as confidential. Confidential Information includes not only written
or other tangible information, but also information transferred orally, visually, electronically or
by any other means. Confidential Information does not include information that (i) is in or enters
the public domain without breach of this Agreement, or (ii) the receiving Party lawfully receives
from a third party without restriction on disclosure and to the receiving Party’s knowledge without
breach of a nondisclosure obligation.

     “COPAS” means the Council of Petroleum Accountants Societies.

     “Damages” is defined in Section 9.1.

     “Default Rate” means an interest rate (which shall in no event be higher than the rate
permitted by applicable law) equal to the prime interest rate of the Operating Company’s principal
lender.

     “Effective Date” is defined in the introductory paragraph.

     “Encore Acquisition Company” means Encore Acquisition Company, a Delaware corporation.

     “Encore Group” means Encore Acquisition Company and is Affiliates (other than any member of
the Partnership Group).

     “Encore Operating Party” is defined in Section 9.1.

     “Environmental Law” means current local, county, state, federal, and/or foreign law (including
common law), statute, code, ordinance, rule, order, judgment, decree, regulation or other legal
obligation relating to the protection of health, safety or the environment or natural

2

 

resources, including, without limitation, the Comprehensive Environmental Response Compensation and Liability
Act (42 U.S.C. section 9601 et seq.), as amended, the Resource Conservation and Recovery Act (42
U.S.C. section 6901 et seq.), as amended, the Federal Water Pollution Control Act (33 U.S.C.
section 1251 et seq.), as amended, the Clean Air Act (42 U.S.C. section 7401 et seq.), as amended,
the Toxic Substances Control Act (15 U.S.C. section 2601 et seq.), as amended, the Occupational
Safety and Health Act (29 U.S.C. section 651 et seq.), as amended, the Safe Drinking Water Act (42
U.S.C. section 300(f) et seq.), as amended, analogous state, tribal or local laws, and any similar,
implementing or successor law, and any amendment, rule, regulation, or directive issued thereunder,
including any determination by, or interpretation of any of the foregoing by any Governmental
Authority that has the force of law.

     “Force Majeure” means any cause beyond the reasonable control of a Party, including the
following causes (unless they are within such Party’s reasonable control): acts of God, strikes,
lockouts, acts of the public enemy, wars or warlike action (whether actual or impending), arrests
and other restraints of government (civil or military), blockades, embargoes, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, sabotage, tornadoes, named tropical storms
and hurricanes, floods, civil disturbances, terrorism, mechanical breakdown of machinery or
equipment, explosions, confiscation or seizure by any government or other public authority and any
order of any court of competent jurisdiction, regulatory agency or governmental body having
jurisdiction.

     “G&A Services” means those general and administrative services necessary or useful for the
conduct of the business of the Partnership Group, including, but not limited to, accounting,
corporate development, finance, land, marketing, legal and engineering.

     “Governmental Approval” means any material consent, authorization, certificate, permit,
right-of-way grant or approval of any Governmental Authority that is necessary for the
construction, ownership and operation of the Business in accordance with applicable Laws.

     “Governmental Authority” means any court or tribunal in any jurisdiction or any federal,
state, tribal, municipal or local government or other governmental body, agency, authority,
department, commission, board, bureau, instrumentality, arbitrator or arbitral body or any
quasi-governmental or private body lawfully exercising any regulatory or taxing authority.

     “Laws” means any applicable statute, Environmental Law, common law, rule, regulation,
judgment, order, ordinance, writ, injunction or decree issued or promulgated by any Governmental
Authority.

     “Parties” is defined in the introductory paragraph.

     “Partnership” is defined in the introductory paragraph.

     “Partnership Agreement” means the Second Amended and Restated Agreement of Limited Partnership
of the Partnership, as may be amended or restated from time to time.

     “Partnership Group” means the General Partner, the Partnership, the Operating Company and all
of their respective Subsidiaries.

3

 

     “Partnership Group Party” is defined in Section 9.1.

     “Payment Amount” is defined in Section 4.1.

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

     “Services” is defined in Section 2.2.

     “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) in which such
Person or a Subsidiary of such Person is, at the date of determination, a general or limited
partner of such partnership, but only if more than 50% of the partnership interests of such
partnership (considering all of the partnership interests of the partnership 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 or a partnership) 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.

     Other terms defined herein have the meanings so given them.

     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) references to Exhibits refer to the Exhibits attached
to this Agreement, each of which is made a part hereof for all purposes; (d) the terms “include”,
“includes”, “including” and words of like import shall be deemed to be followed by the words
“without limitation”; (e) the terms “hereof,” “herein” and “hereunder” refer to this Agreement as a
whole and not to any particular provision of this Agreement; and (f) references to money refer to
legal currency of the United States of America. 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

RETENTION OF ENCORE OPERATING; SCOPE OF SERVICES

     Section 2.1 Retention of Encore Operating. The Partnership hereby engages Encore Operating to perform the Services, as directed by the
General Partner, and to provide all personnel and any facilities, goods and equipment not otherwise
provided by the Partnership

4

 

Group necessary to perform the Services. Encore Operating hereby
accepts such engagement and agrees to perform the Services requested by the General Partner and to
provide any personnel, facilities, goods and equipment not otherwise provided by the Partnership
Group, and to provide all employees as may be reasonable and necessary to perform the Services.

     Section 2.2 Scope of Services. The “Services” shall consist of such services the General Partner determines may be reasonable
and necessary to operate the Business, including, without limitation, any G&A Services and those
services described on Schedule I hereto. Encore Operating hereby covenants and agrees that the
Services will be performed in accordance with (i) applicable material Governmental Approvals and
Laws and (ii) industry standards.

     Section 2.3 Exclusion of Services. The General Partner may temporarily or permanently exclude any particular service from the scope
of the Services upon 90 days’ notice to Encore Operating.

     Section 2.4 Performance of Services by Affiliates and Third Parties. The Parties hereby agree that in discharging its obligations hereunder, Encore Operating may
engage any of its Affiliates or any qualified third party to perform the Services (or any part of
the Services) on its behalf and that the performance of the Services (or any part of the Services)
by any such Affiliate or third party shall be treated as if Encore Operating performed such
Services itself. Notwithstanding the foregoing, nothing contained herein shall relieve Encore
Operating of its obligations hereunder.

     Section 2.5 Intellectual Property.

     (a) Any (i) inventions, whether patentable or not, developed or invented, or (ii)
copyrightable material (and the intangible rights of copyright therein) developed, by Encore
Operating, its Affiliates or its or their employees in connection with the performance of
the Services shall be the property of Encore Operating; provided, however, that the
Partnership Group shall be granted an irrevocable, royalty-free, non-exclusive and
non-transferable right and license to use such inventions or material; and further provided,
however, that the Partnership Group shall only be granted such a right and license to the
extent such grant does not conflict with, or result in a breach, default,
or violation of a right or license to use such inventions or material granted to Encore
Operating by any Person other than an Affiliate of Encore Operating. Notwithstanding the
foregoing, Encore Operating will use all commercially reasonable efforts to grant such right
and license to the Partnership Group.

     (b) The General Partner, the Partnership and the Operating Company hereby grant to
Encore Operating and its Affiliates an irrevocable, royalty-free, non-exclusive and
non-transferable right and license to use, during the term of this Agreement, any
intellectual property provided by the Partnership Group to Encore Operating or its
Affiliates, but only to the extent such use is necessary for the performance of the
Services. Encore Operating agrees that it and its Affiliates will utilize such intellectual
property solely in connection with the performance of the Services.

5

 

     Section 2.6 Appointment of Independent Accounting Firm and Independent Petroleum Engineer.
Notwithstanding anything to the contrary in this Agreement, the Parties hereby acknowledge and
agree that the General Partner shall have the exclusive authority to appoint an independent
registered public accounting firm to audit the financial statements of the Partnership and an
independent petroleum engineer to provide reports to the Partnership relating to estimates of
proved reserves for Securities and Exchange Commission and other reporting purposes.

ARTICLE III

BOOKS, RECORDS AND REPORTING

     Section 3.1 Books and Records. Encore Operating shall maintain accurate books and records regarding the performance of the
Services and its calculation of the Payment Amount, and shall maintain such books and records for
the period required by applicable accounting practices or Law.

     Section 3.2 Audits. The Partnership shall have the right, upon reasonable notice, and at all reasonable times during
usual business hours, to audit, examine and make copies of the books and records referred to in
Section 3.1. Such right may be exercised through any agent or employee of the Partnership Group
designated in writing by it or by an independent public accountant, engineer, attorney or other
agent so designated. The Partnership shall bear all costs and expenses incurred in any inspection,
examination or audit. Encore Operating shall review and respond in a timely manner to any claims
or inquiries made by the Partnership regarding matters revealed by any such inspection, examination
or audit.

     Section 3.3 Reports. Encore Operating shall prepare and deliver to the Partnership any reports provided for in this
Agreement and such other reports as the Partnership may reasonably request from time to time
regarding the performance of the Services.

ARTICLE IV

PAYMENT AMOUNT

Section 4.1 Payment Amount.

     (a) The Partnership shall on a quarterly basis (i) pay Encore Operating a fixed fee of
$1.75 per BOE of the Partnership Group’s total net oil and gas production for the then
completed quarter (the “Administrative Fee”) and (ii) reimburse Encore Operating for all
third-party expenses that Encore Operating incurs on behalf of the Partnership Group
(collectively with the Administrative Fee, the “Payment Amount”). In addition to the
Payment Amount, Encore Operating shall be entitled to retain any COPAS overhead charges
associated with drilling and operating wells that would otherwise be paid by third parties
to the operator of a well. The amount of the reimbursement shall be determined by Encore
Operating on any basis that it deems to be reasonable and need not be based on the amount of
services performed for the Partnership. For the avoidance of doubt,
the Partnership will pay all expenses that are directly chargeable to wells
under their respective joint operating agreements.

6

 

     (b) The Administrative Fee shall increase in the following circumstances:

     (i) Beginning on the first day of April in each year beginning with April 1,
2008, the Administrative Fee shall increase by an amount equal to the product of the
then-current Administrative Fee multiplied by COPAS Wage Index Adjustment for the
current year.

     (ii) If the Partnership or any other member of the Partnership Group acquires
additional assets, then Encore Operating may propose a revised Administrative Fee
that covers the provision of Services for such additional assets. If the General
Partner, on behalf of the Partnership Group and with the concurrence of the
conflicts committee of the board of directors of the General Partner, agrees to such
revised Administrative Fee, Encore Operating shall provide Services for the
additional assets pursuant to the terms set forth herein.

     (iii) If the Partnership and Encore Operating otherwise agree to increase the
Administrative Fee; provided, however, that any such increase shall be approved by
the board of directors of the General Partner with the concurrence of the conflicts
committee of such board.

     Section 4.2 Payment of Payment Amount. Encore Operating shall invoice the Partnership within 25 days after the close of each quarter
for the estimated Payment Amount, plus or minus any adjustment necessary to correct prior estimated
billings to actual billings. Subject to Section 4.3, all invoices shall be due and payable, in
immediately available funds, within thirty days after receipt of each invoice. Upon the request of
the Partnership, Encore Operating shall furnish a reasonable detail of the Services provided and
charges assessed during any quarter.

     Section 4.3 Disputed Charges. THE PARTNERSHIP MAY, WITHIN 120 DAYS AFTER RECEIPT OF A CHARGE FROM ENCORE OPERATING, TAKE
WRITTEN EXCEPTION TO SUCH CHARGE, ON THE GROUND THAT THE SAME WAS NOT A CORRECT CALCULATION OF THE
ADMINISTRATIVE FEE AND/OR A REASONABLE COST INCURRED BY ENCORE OPERATING OR ITS AFFILIATES IN
CONNECTION WITH THE SERVICES. THE PARTNERSHIP SHALL NEVERTHELESS PAY ENCORE OPERATING IN FULL WHEN
DUE THE FULL PAYMENT AMOUNT OWED TO ENCORE OPERATING. SUCH PAYMENT SHALL NOT BE DEEMED A WAIVER OF
THE RIGHT OF THE PARTNERSHIP TO RECOUP ANY CONTESTED PORTION OF ANY AMOUNT SO PAID. HOWEVER, IF THE
AMOUNT AS TO WHICH SUCH WRITTEN EXCEPTION IS TAKEN, OR ANY PART THEREOF, IS ULTIMATELY DETERMINED
NOT TO BE A CORRECT CALCULATION OF THE ADMINISTRATIVE FEE AND/OR A REASONABLE COST INCURRED BY
ENCORE OPERATING OR ITS AFFILIATES IN CONNECTION WITH ITS PROVIDING THE SERVICES HEREUNDER, SUCH
AMOUNT OR PORTION THEREOF (AS THE CASE MAY BE) SHALL BE REFUNDED BY ENCORE OPERATING TO THE
PARTNERSHIP TOGETHER WITH INTEREST THEREON AT THE DEFAULT RATE DURING THE PERIOD FROM THE DATE OF
PAYMENT BY THE PARTNERSHIP TO THE DATE OF REFUND BY ENCORE OPERATING.

     Section 4.4 Set Off. In the event that Encore Operating owes the Partnership a sum certain in an uncontested amount
under any other agreement, then any such amounts may be

7

 

aggregated and the Partnership and Encore
Operating may discharge their obligations by netting those amounts against any amounts owed by the
Partnership to Encore Operating under this Agreement. If the Partnership or Encore Operating owes
the other party a greater aggregate amount, that Party may pay to the other Party the difference
between the amounts owed.

     Section 4.5 Encore Operating’s Employees. The obligations under Sections 4.1 and 4.2, to the extent they relate to Services provided by
employees of Encore Operating or its Affiliates, shall be limited to payment to Encore Operating
for expenses in connection with its or its Affiliates’ employees engaged in the provision of
Services hereunder, and the Partnership shall not be obligated to pay to Encore Operating’s or its
Affiliates’ employees directly any compensation, salaries, wages, bonuses, benefits, social
security taxes, workers’ compensation insurance, retirement and insurance benefits, training and
other such expenses; provided, however, that the Partnership may, at its option, compensate such
employees under one or more equity-based incentive compensation plans for the provision of Services
hereunder; and provided further, however, that if Encore Operating fails to pay any employee, with
the exception of employee claims for amounts owed that Encore Operating disputes in good faith,
within 30 days of the date such employee’s payment is due:

     (a) The Partnership may (i) pay such employee directly, (ii) employ such employee
directly, (iii) notify Encore Operating and begin to pay all employees providing
service to the Partnership directly, or (iv) notify Encore Operating that this
Agreement is terminated and employ all employees directly; and

     (b) Encore Operating shall reimburse the Partnership, as the case may be, the amount
the Partnership paid to Encore Operating for employee services that Encore Operating did not
pay to any such employee.

     Section 4.6 Approval of Expenses. Encore Operating acknowledges that all charges for Services assessed by Encore Operating and
included in the Payment Amount must be approved by the persons authorized to approve such Payment
Amount pursuant to the Partnership’s governance and delegation-of-authority process. Additionally,
Encore Operating acknowledges that the Audit Committee of the Board of Directors of the General
Partner, or if there is no Audit Committee, the entire Board of Directors of the General Partner,
may at any time review the Payment Amounts and the levels of Services and, as a result, may direct
the Partnership to decrease the level of Services or to dispute a prior invoice pursuant to Section
4.3. In addition to the information Encore Operating is obligated to provide pursuant to Section
4.2, Encore Operating shall provide such other information as reasonably necessary to determine the
veracity or appropriateness of any Payment Amount hereunder.

ARTICLE V

FORCE MAJEURE

     A Party’s obligation under this Agreement shall be excused when and to the extent its
performance of that obligation is prevented due to Force Majeure; provided, however, that a Party
shall not be excused by Force Majeure from any obligation to pay money. The Party that is prevented
from performing its obligation by reason of Force Majeure shall promptly notify the

8

 

other Parties
of that fact and shall exercise due diligence to end its inability to perform as promptly as
practicable. Notwithstanding the foregoing, a Party is not required to settle any strike, lockout
or other labor dispute in which it may be involved; provided, however, that, in the event of a
strike, lockout or other labor dispute affecting Encore Operating, Encore Operating shall use
reasonable efforts to continue to perform all obligations hereunder by utilizing its management
personnel and that of its Affiliates.

ARTICLE VI

ASSIGNMENTS AND SUBCONTRACTS

     Section 6.1 Assignments.

     (a) Without the prior consent of Encore Operating, none of the Partnership or the other
members or the Partnership Group may sell, assign, transfer or convey any of its rights, or
delegate any of its obligations, under this Agreement to any Person.

     (b) Without the prior consent of the Partnership, Encore Operating may not sell,
assign, transfer or convey any of its rights, or delegate any of its obligations, under this
Agreement to any Person, other than the delegation of performance of Services to an
Affiliate of Encore Operating or a qualified third party as permitted by Section 2.4 and the
sale, assignment, transfer or conveyance of its rights hereunder to any such Affiliate.

     Section 6.2 Other Requirements. Subject to the other provisions hereof:

     (a) All materials and workmanship used or provided in performing the Services shall be
in accordance with applicable specifications and standards.

     (b) Encore Operating shall exercise reasonable diligence to obtain the most favorable
terms or warranties available from vendors, suppliers and other third parties, and where
appropriate, Encore Operating shall assign such warranties to the Partnership.

     (c) In rendering the Services, Encore Operating shall not discriminate against any
employee or applicant for employment because of race, creed, color, religion, sex, national
origin, age or handicap, and shall comply with all applicable provisions of Executive Order
11246 of September 24, 1965, and any successor order thereto. Subject to the above, Encore
Operating shall, to the extent practicable, engage employees who reside in or whose
businesses are located in the local area or state where the Services are performed.

     (d) Encore Operating agrees to exercise reasonable diligence to ensure that, during the
term of this Agreement, it shall not employ unauthorized aliens as defined in the
Immigration Reform and Control Act of 1986, or any successor law.

9

 

ARTICLE VII

TERMINATION

     Section 7.1 Termination by the Partnership on behalf of the Partnership Group.

     (a) Upon the occurrence of any of the following events, the Partnership, on behalf of
the Partnership Group, may terminate this Agreement by giving written notice of such
termination to Encore Operating:

     (i) Encore Acquisition Company and its Affiliates cease to maintain a direct or
indirect controlling interest in the General Partner or Encore Operating; or

     (ii) Encore Operating’s failure to pay any employee within thirty (30) days of
the date such employee’s payment is due, subject to the limitations described in
Section 4.5.

Any termination under this Section 7.1(a) shall become effective immediately upon delivery
of the notice first described in this Section 7.1(a), or such later time (not to exceed the
first anniversary of the delivery of such notice) as may be specified by the Partnership.

     (b) In addition to its rights under Section 7.1(a), the Partnership may terminate this
Agreement at any time by giving notice of such termination to Encore Operating. Any
termination under this Section 7.1(b) shall become effective 90 days after delivery of such
notice, or such later time (not to exceed the first anniversary of the delivery of such
notice) as may be specified by the Partnership.

     (c) In the event that Encore Operating becomes Bankrupt or dissolves and commences
liquidation or winding-up, this Agreement shall automatically terminate without notice to
Encore Operating.

     Section 7.2 Termination by Encore Operating.

     (a) Encore Operating may terminate this Agreement by giving written notice of such
termination to the Partnership in the event that Encore Acquisition Company and its
Affiliates cease to maintain a direct or indirect controlling interest in the General
Partner or Encore Operating.

Any termination under this Section 7.2(a) shall become effective immediately upon delivery
of the notice first described in this Section 7.2(a).

     (b) In addition to its rights under Section 7.2(a), Encore Operating may terminate this
Agreement at any time by giving notice of such termination to the Partnership. Any
termination under this Section 7.2(b) shall become effective 90 days after delivery of such
notice, or such later time (not to exceed the first anniversary of the delivery of such
notice) as may be specified by Encore Operating.

     Section 7.3 Effect of Termination. If this Agreement is terminated in accordance with Section 7.1 or 7.2, all rights and
obligations under this Agreement shall cease except for (a) obligations that expressly survive
termination of this Agreement; (b) liabilities and obligations

10

 

that have accrued prior to such
termination, including the obligation to pay any amounts that have become due and payable prior to
such termination, and (c) the obligation to pay any portion of the Payment Amount that has accrued
prior to such termination, even if such portion has not become due and payable at that time.

ARTICLE VIII

CONFIDENTIAL INFORMATION

     Section 8.1 Nondisclosure. Each of Encore Operating and the Partnership Group agrees that (i) it will not disclose to any
third party or use any Confidential Information disclosed to it by the other except as expressly
permitted in this Agreement, and (ii) it will take all reasonable measures to maintain the
confidentiality of all Confidential Information of the other Party in its possession or control,
which will in no event be less than the measures it uses to maintain the confidentiality of its own
information of similar type and importance.

     Section 8.2 Permitted Disclosure. Notwithstanding the foregoing, each Party may disclose Confidential Information (i) to the
extent required by a court of competent jurisdiction or other governmental authority or otherwise
as required by law, including without limitation disclosure obligations imposed under the federal
securities laws, provided that such Party has given the other Party prior notice of such
requirement when legally permissible to permit the other Party to take such legal action to prevent
the disclosure as it deems reasonable, appropriate or necessary, or (ii) to its consultants, legal
counsel, Affiliates, accountants, banks and other financing sources and their advisors.

ARTICLE IX

LIMITATION OF LIABILITY; INDEMNIFICATION

     Section 9.1 Limitation of Encore Operating’s Liability. Neither Encore Operating nor any of its controlling persons, directors, officers, employees,
agents and permitted assigns (each, an “Encore Operating Party”) shall have any liability to the
Partnership Group for any losses, damages (including, but not limited to, special, indirect,
punitive and/or consequential damages), claims, injury, liability, cost or expense (“Damages”)
arising out of this Agreement, whether such Damages arise on account of the furnishing of Services
hereunder, the failure to furnish Services hereunder, or otherwise, and whether or not such Damages
were caused by the negligence of the Encore Operating Party, including the Encore Operating Party’s
sole negligence; provided, however, that the foregoing limitation shall not apply to Damages caused
by the Encore Operating Party’s gross negligence or willful, intentional misconduct.

     Section 9.2 Partnership’s Indemnity. The Partnership agrees to indemnify, defend and hold harmless each Encore Operating Party from
and against any and all Damages arising out of this Agreement, whether such Damages arise on
account of the furnishing of Services hereunder, the failure to furnish Services hereunder, or
otherwise, and whether or not such Damages were caused by the negligence of any Encore Operating
Party, including the Encore Operating Party’s sole negligence; provided, however, that the
foregoing limitation shall not apply to Damages caused by the Encore Operating Party’s gross
negligence or willful, intentional misconduct.

11

 

     Section 9.3 Limitation of Damages. If the Partnership Group suffers Damages arising out of this Agreement, which Damages were
caused by the gross negligence or willful, intentional misconduct of Encore Operating, Encore
Operating’s sole liability to the Partnership Group shall be to properly perform the Services in
question at no additional cost to the Partnership Group and to pay the Partnership Group for any
and all direct damages suffered by the Partnership Group. Notwithstanding anything to the contrary
contained herein or at Law and in equity, in no event shall Encore Operating be liable for
punitive, special, indirect, incidental or consequential damages (including, without limitation,
damages for loss of business profits, business interruption or any other loss) arising from or
relating to any claim made under this Agreement or regarding the provision of or the failure to
provide Services, even if Encore Operating had been advised or was aware of the possibility of such
damages.

     Section 9.4 Affiliate; Third Parties. If Encore Operating uses the personnel of its Affiliates or third parties to provide Services,
Encore Operating shall be responsible for the acts and omissions of such personnel and third
parties to the extent provided in this Agreement, and no Affiliate of Encore Operating or third
party shall have any liability to the Partnership Group on account of any Damages suffered by the
Partnership Group arising out of this Agreement, whether or not such Damages were caused by their
negligence and/or gross negligence, including their sole negligence and/or sole gross negligence,
or their willful, intentional misconduct.

ARTICLE X

DISPUTE RESOLUTION

     If the Parties are unable to resolve any dispute regarding the validity or terms of this
Agreement or its termination, service or performance issues, there is a material breach of this
Agreement that has not been corrected within thirty (30) days of receipt of notice of such breach
or any other dispute between the parties related to this Agreement, either party hereto may refer
the matter to an arbitrator selected in accordance with the rules of JAMS in Tarrant County, Texas
as the exclusive remedy for any such dispute, and in lieu of any court action, which is hereby
waived. The only exception shall be a claim by either Party for injunctive relief pending
arbitration.

ARTICLE XI

GENERAL PROVISIONS

     Section 11.1 Notices. All notices or other communications required or permitted under, or otherwise in connection
with, this Agreement must be in writing and must be given by (1) depositing same in the mail,
addressed to the Person to be notified, postpaid and registered or certified with return receipt
requested, (2) transmitting by national overnight courier, (3) delivery in person or (4) facsimile
to such Party. Notice given by mail, national overnight courier or personal delivery shall be
effective upon actual receipt. Notice given by facsimile shall be effective upon confirmation of a
successful transmission. All notices to be sent to a Party pursuant to this Agreement shall be
sent to or made at the address, in each case as follows:

12

 

if to the General Partner or the Partnership:

Encore Energy Partners GP LLC

777 Main Street, Suite 1400

Fort Worth, TX 76102

Attention: President

Fax: (817) 877-1655

if to the Operating Company:

Encore Energy Partners Operating LLC

777 Main Street, Suite 1400

Fort Worth, TX 76102

Attention: President

Fax: (817) 877-1655

if to Encore Operating:

EAP Operating, Inc., its general partner

777 Main Street, Suite 1400

Fort Worth, TX 76102

Attention: President

Fax: (817) 877-1655

     Section 11.2 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 11.3 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 11.4 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 11.5 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 11.6 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 11.7 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.

13

 

     Section 11.8 Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State of
Texas, without regard to the principles of conflicts of law.

     Section 11.9 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.

     Section 11.10 Amendment or Restatement. This Agreement may be amended or restated only by a written instrument executed by each of the
Parties; provided, however, that after the completion of the Partnership’s initial public offering
of common units representing limited partner interests, the Partnership may not, without the prior
approval of the conflicts committee of the board of directors of the General Partner or, if there
is no such committee, the independent members of such board of directors, agree to any amendment or
modification of this Agreement that the General Partner determines will adversely affect the
holders of such common units. The Parties hereto agree that, for purposes of this Section 11.10,
any material change in the nature, quantity or duration of the Services to be provided under this
Agreement shall constitute a modification of this Agreement.

     Section 11.11 Directly or Indirectly. Where any provision of this Agreement refers to action to be taken by any Party, or which such
Party is prohibited from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Party, including actions taken by or on behalf of any Affiliate of
such Party.

14

 

     IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the
Effective Date.

	 	 	 	 	 
	 	ENCORE ENERGY PARTNERS GP LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ENCORE ENERGY PARTNERS LP

 	 
	 	By:  	Encore Energy Partners GP LLC, its General Partner
 	 
	 	 	 	 
	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ENCORE ENERGY PARTNERS OPERATING LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ENCORE OPERATING, L.P.

 	 
	 	By:  	EAP Operating, Inc., its General Partner
 	 
	 	 	 	 
	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

15

 

SCHEDULE I

SERVICES PROVIDED BY ENCORE OPERATING

TO THE PARTNERSHIP GROUP

	1.	 	Accounting
	 
	2.	 	Information Technology
	 
	3.	 	Real Property
	 
	4.	 	Legal
	 
	5.	 	Securities and Exchange Commission Reporting
	 
	6.	 	Operations/Reservoir Engineering/Geology/Geophysics
	 
	7.	 	Administrative Services
	 
	8.	 	Financial Services
	 
	9.	 	Insurance Services
	 
	10.	 	Risk Management
	 
	11.	 	Corporate Development
	 
	12.	 	Commercial and Marketing
	 
	13.	 	Treasury
	 
	14.	 	Tax
	 
	15.	 	Audit
	 
	16.	 	Sarbanes-Oxley Compliance
	 
	17.	 	Investor Relations

I-1exv10w7

 

Exhibit 10.7

FORM OF

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

AMONG

ENCORE ACQUISITION COMPANY,

ENCORE OPERATING, L.P.,

ENCORE ENERGY PARTNERS GP LLC,

ENCORE ENERGY PARTNERS LP

AND

ENCORE ENERGY PARTNERS OPERATING LLC

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	3	 
	Section 1.1          Terms
	 	 	3	 
	ARTICLE II CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS
	 	 	6	 
	Section 2.1          Public Cash Contribution
	 	 	6	 
	Section 2.2          Payment of Transaction Expenses by the Partnership; Cash Contribution by the Partnership to ENP Operating; Repayment of Indebtedness
	 	 	7	 
	Section 2.3          Contribution of Permian Basin Assets by Encore Operating to the Partnership
	 	 	7	 
	Section 2.4          Contribution of Permian Basin Assets by the Partnership to ENP Operating
	 	 	7	 
	Section 2.5          Over-Allotment Option
	 	 	8	 
	ARTICLE III ASSUMPTIONS OF CERTAIN LIABILITIES; INDEMNIFICATION
	 	 	8	 
	Section 3.1          Environmental Indemnification
	 	 	8	 
	Section 3.2          Limitations Regarding Environmental Indemnification
	 	 	9	 
	Section 3.3          Additional Indemnification
	 	 	9	 
	Section 3.4          Indemnification Procedures
	 	 	10	 
	ARTICLE IV TITLE MATTERS
	 	 	11	 
	Section 4.1          Encumbrances
	 	 	11	 
	Section 4.2          Disclaimer of Warranties; Subrogation; Waiver of Bulk Sales Laws
	 	 	12	 
	ARTICLE V FURTHER ASSURANCES
	 	 	13	 
	Section 5.1          Further Assurances
	 	 	13	 
	Section 5.2          Other Assurances
	 	 	13	 
	ARTICLE VI EFFECTIVE TIME
	 	 	14	 
	ARTICLE VII MISCELLANEOUS
	 	 	14	 
	Section 7.1          Order of Completion of Transactions
	 	 	14	 
	Section 7.2          Costs
	 	 	14	 
	Section 7.3          Headings; References; Interpretation
	 	 	15	 
	Section 7.4          Successors and Assigns
	 	 	15	 
	Section 7.5          No Third Party Rights
	 	 	15	 
	Section 7.6          Counterparts
	 	 	15	 
	Section 7.7          Governing Law
	 	 	15	 
	Section 7.8          Severability
	 	 	16	 
	Section 7.9          Amendment or Modification
	 	 	16	 
	Section 7.10          Integration
	 	 	16	 
	Section 7.11          Deed; Bill of Sale; Assignment
	 	 	16	 

 i 

 

 

FORM OF CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

          This Contribution, Conveyance and Assumption Agreement, dated as of ___, 2007, is
entered into by and among Encore Acquisition Company, a Delaware corporation (“EAC”), Encore
Operating, L.P., a Texas limited partnership (“Encore Operating”), Encore Energy Partners GP LLC, a
Delaware limited liability company (the “General Partner”), Encore Energy Partners LP, a Delaware
limited partnership (the “Partnership”), and Encore Energy Partners Operating LLC, a Delaware
limited liability company (“ENP Operating”). The above-named entities are sometimes referred to in
this Agreement each as a “Party” and collectively as the “Parties.” Capitalized terms used herein
shall have the meanings assigned to such terms in Section 1.1.

RECITALS

          WHEREAS, the General Partner and Encore Partners LP Holdings LLC, a Delaware limited liability
company (“LP Holdings”), have formed the Partnership pursuant to the Delaware Revised Uniform
Limited Partnership Act (the “Delaware LP Act”) for the purpose of engaging 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 LP Act;

          WHEREAS, in order to accomplish the objectives and purposes in the preceding recital, each of
the following actions has been taken prior to the date hereof:

          1. EAC formed a Delaware limited liability company named Encore Partners GP Holdings LLC (“GP
Holdings”) under the terms of the Delaware Limited Liability Company Act (the “Delaware LLC Act”)
and contributed $1,000 to GP Holdings in exchange for all of the membership interests in GP
Holdings;

          2. EAC formed LP Holdings under the terms of the Delaware LLC Act and contributed $1,000 to LP
Holdings in exchange for all of the membership interests in LP Holdings;

          3. GP Holdings formed the General Partner under the terms of the Delaware LLC Act and
contributed $512 to the General Partner in exchange for all of the membership interests in the
General Partner;

          4. the General Partner and LP Holdings formed the Partnership under the terms of the Delaware
LP Act and the General Partner contributed $12 to the Partnership in exchange for a 2% general
partner interest in the Partnership and LP Holdings contributed $588 to the Partnership in exchange
for a 98% limited partner interest in the Partnership;

          5. the Partnership formed ENP Operating under the terms of the Delaware LLC Act and
contributed $100 to ENP Operating in exchange for all of the membership interests in ENP Operating;

          6. ENP Operating formed a Delaware limited liability company named Encore Clear Fork Pipeline
LLC (“Clear Fork”) under the terms of the Delaware LLC Act and contributed $___to Clear Fork in
exchange for all of the membership interests in Clear Fork;

1

 

          7. EAC (through one or more subsidiaries) assigned to ENP Operating all of its rights and
duties under the Purchase Agreement (as defined herein) relating to the Elk Basin Assets (as
defined herein);

          8. EAC made a capital contribution to ENP Operating of $93,658,685 (98% through LP Holdings
and the Partnership and 2% through GP Holdings, the General Partner and the Partnership);

          9. EAC made a capital contribution of $120 million to EAP Operating, Inc., a Delaware
corporation (“EAP Operating”), which loaned all of such funds to ENP Operating (the “EAP Operating
Loan”);

          10. ENP Operating entered into the Credit Agreement (as defined herein);

          11. ENP Operating acquired the Elk Basin Assets under the Purchase Agreement in exchange for
$328,358,685;

          12. EAC assigned put contracts with a value of $9,402,558 to ENP Operating (98% through LP
Holdings and the Partnership and 2% through GP Holdings, the General Partner and the Partnership);

          13. LP Holdings’ limited partner interest in the Partnership was converted to 10,279,639
Common Units (as defined herein) and the General Partner’s general partner interest was converted
to ___General Partner Units (as defined herein);

          14. the Partnership issued 550,000 management incentive units to certain executives of the
General Partner;

          WHEREAS, concurrently with the consummation of the transactions contemplated hereby, each of
the following shall occur:

          1. in connection with the Partnership’s initial public offering (the “Offering”), the public,
through the Underwriters (as defined herein), will contribute $___in cash to the
Partnership, less the Underwriters’ discount of 7%, in exchange for ___Common Units
representing a ___% limited partner interest in the Partnership;

          2. the Partnership will use the proceeds from the Offering of Common Units to (a) pay
transaction expenses, which are estimated to be $______ million (exclusive of the Underwriters’
discount), and (b) contribute the remaining $______ to ENP Operating, which will use it to repay
(i) a portion of the indebtedness outstanding under the Credit Agreement, and (ii) all of the
indebtedness under the EAP Operating Loan, together with accrued interest;

          3. Encore Operating will contribute its interests in the Permian Basin Assets (as defined
herein) (provided that with respect to the Non-Consent Assets (as defined herein), the same will
only be contributed to the extent provided herein) to the Partnership in exchange for
___Common Units;

2

 

          4. the Partnership will contribute its interests in the Permian Basin Assets to ENP Operating
in exchange for the continuation of its membership interest in ENP Operating;

          5. to the extent that the Underwriters exercise their over-allotment option to purchase up to
___Common Units (the “Over-Allotment Option”), the Partnership will contribute the net
proceeds therefrom to ENP Operating, which will use such proceeds to repay a portion of the
indebtedness outstanding under the Credit Agreement; and

          6. the organizational documents of the Parties will be amended and restated as necessary to
reflect the applicable matters set forth above and as contained in this Agreement;

          NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the
Parties undertake and agree as follows:

ARTICLE I

DEFINITIONS

			
	Section 1.1	 	Terms.

          The following defined terms shall have the meanings given below:

          “Agreement” means this Contribution, Conveyance and Assumption Agreement.

          “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, directly or
indirectly, 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.

          “Assignment” means one or more Deed, Assignment and Bill of Sale substantially in the form
attached as Exhibit A.

          “Clear Fork” has the meaning as set forth in the Recitals of this Agreement.

          “Common Units” has the meaning as set forth in the Partnership Agreement.

          “Conflicts Committee” means the Conflicts Committee of the General Partner.

          “Covered Environmental Losses” is defined in Section 3.1.

          “Credit Agreement” means that certain Credit Agreement dated as of March 7, 2007 by and among
ENP Operating, the Partnership, Bank of America, N.A., as administrative agent and L/C Issuer, Banc
of America Securities LLC, as sole lead arranger and sole book manager, and the other lenders party
thereto.

          “Delaware LLC Act” has the meaning as set forth in the Recitals of this Agreement.

          “Delaware LP Act” has the meaning as set forth in the Recitals of this Agreement.

3

 

          “EAC” has the meaning as set forth in the opening paragraph of this Agreement.

          “EAP Operating” has the meaning as set forth in the Recitals of this Agreement.

          “EAP Operating Loan” has the meaning as set forth in the Recitals of this Agreement.

          “Effective Time” means 12:01 a.m. Eastern Daylight Time on ___, 2007.

          “Elk Basin Assets” means the oil and natural gas properties and related assets (including, but
not limited to, the Elk Basin Gas Plant and the Clear Fork pipeline) in or near the Elk Basin field
in Park County, Wyoming and Carbon County, Montana, that were acquired by ENP Operating under the
terms of the Purchase Agreement.

          “Encore Operating” has the meaning as set forth in the opening paragraph of this Agreement.

          “ENP Operating” has the meaning as set forth in the opening paragraph of this Agreement.

          “Environmental Laws” means all federal, state and local laws, statutes, rules, regulations,
orders and ordinances, legally enforceable requirements and rules of common law, now or hereafter
in effect, relating to the protection of the environment (including, but not limited to, any
natural resource damages, any generation, use, storage, treatment, Release or threatened Release of
Hazardous Substances, into the indoor or outdoor environment, and any exposure of any Person or
property to Hazardous Substances) including, without limitation, the federal Comprehensive
Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization
Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution
Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act,
the Hazardous Materials Transportation Act and all other environmental conservation and protection
laws, each as amended from time to time.

          “General Partner” has the meaning as set forth in the opening paragraph of this Agreement.

          “General Partner Units” has the meaning as set forth in the Partnership Agreement.

          “GP Holdings” has the meaning as set forth in the Recitals of this Agreement.

          “Hazardous Substance” means (a) any substance that is designated, defined or classified as a
solid waste, hazardous waste, hazardous material, pollutant, contaminant or toxic or hazardous
substance or words of similar meaning or impact, or that is otherwise regulated or as to which
liability may arise under any Environmental Law, including, without limitation, any hazardous
substance as such term is defined under the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, (b) petroleum, petroleum products, crude oil,
oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other
petroleum

4

 

hydrocarbons, whether refined or unrefined and (c) asbestos, whether in a friable or
non-friable condition, polychlorinated biphenyls or radon.

          “Indemnified Assets” means the Permian Basin Assets and the Elk Basin Assets.

          “Indemnified Party” means each member of the Partnership Group and each EAC Entity in their
capacities as parties entitled to indemnification in accordance with Article III.

          “Indemnifying Party” means each of EAC and the Partnership, as the case may be, in their
capacity as the parties from whom indemnification may be required in accordance with Article III.

          “LP Holdings” has the meaning as set forth in the Recitals of this Agreement.

          “Non-Consent Assets” has the meaning as set forth in Section 2.1 of this Agreement.

          “Offering” has the meaning as set forth in the Recitals of this Agreement.

          “Operations and Proceeds Agreement” means one or more agreements substantially in the form
attached as Exhibit B hereto.

          “Other Losses” is defined in Section 3.3(a).

          “Over-Allotment Option” has the meaning as set forth in the Recitals of this Agreement.

          “Party” or “Parties” has the meaning as set forth in the opening paragraph of this Agreement.

          “Partnership” has the meaning as set forth in the opening paragraph of this Agreement.

          “Partnership Agreement” means the Second Amended and Restated Agreement of Limited Partnership
of Encore Energy Partners LP, dated as of ___2007, to which reference is hereby made for
all purposes of this Agreement. No amendment or modification to the Partnership Agreement
subsequent to ___2007 shall be given effect for the purposes of this Agreement unless
consented to by each of the Parties to this Agreement.

          “Partnership Group” means the General Partner, the Partnership and all of their respective
Subsidiaries.

          “Permian Basin Assets” means the assets listed on Schedule A hereto and as described
in the Assignment with respect thereto.

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

5

 

          “Purchase Agreement” means that certain purchase and sale agreement dated January 16, 2007
among EAC and certain subsidiaries of Anadarko Petroleum Corporation.

          “Registration Statement” means the registration statement on Form S-1 filed by the Partnership
relating to the Offering.

          “Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping or
disposing.

          “Retained Assets” means the assets and investments owned by EAC and any of its Affiliates that
were not conveyed, contributed or otherwise Transferred to the Partnership Group pursuant to this
Agreement and other documents relating to the transactions referred to in this Agreement,
including, without limitation, the replacements and natural extensions thereof.

          “Risk-Based Cleanup Criteria” are a risk-based cleanup criteria authorized under applicable
Environmental Law for remediation of a particular property, taking into consideration the
Partnership Group’s use of the property being remediated and, if such property is not owned by the
Partnership Group, any contractual or other requirements imposed by the property owner.

          “Surface Use Agreement” means one or more agreements substantially in the form attached as
Exhibit C hereto.

          “Transfer” including the correlative terms “Transferring” or “Transferred” means any direct or
indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any other
disposition (whether voluntary, involuntary or by operation of law) of any assets, property or
rights.

          “Underwriters” means UBS Securities LLC, Lehman Brothers, Inc.,                                         ,
                                         and                                         .

          “Voluntary Cleanup Program” means a program of the United States or a state of the United
States enacted pursuant to Environmental Laws which provides for a mechanism for the written
approval of, or authorization to conduct, voluntary remedial action for the clean-up, removal or
remediation of contamination that exceeds actionable levels established pursuant to Environmental
Laws.

ARTICLE II

CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS

			
	Section 2.1	 	Public Cash Contribution.

          The Parties acknowledge a cash contribution by the public through the Underwriters to the
Partnership of $            
              
               ($                                         after the Underwriters’ discount of 7%)
in exchange for                                          Common Units representing a                     % limited partner
interest in the Partnership.

6

 

			
	Section 2.2	 	Payment of Transaction Expenses by the Partnership; Cash Contribution by the
Partnership to ENP Operating; Repayment of Indebtedness.

          The Parties acknowledge (a) the payment by the Partnership, in connection with the
transactions contemplated hereby, of transaction expenses in the amount of approximately $___
million (exclusive of the Underwriters’ discount), and (b) the contribution by the Partnership of
its remaining cash of approximately $___
 million as a capital contribution to ENP Operating,
which agrees to use such contribution to repay (i) a portion of the indebtedness outstanding under
the Credit Agreement, and (ii) all of the indebtedness under the EAP Operating Loan, together with
accrued interest.

			
	Section 2.3	 	Contribution of Permian Basin Assets by Encore Operating to the Partnership.

          Encore Operating hereby agrees to contribute, bargain, convey, assign, transfer, set over and
deliver to the Partnership its interests in the Permian Basin Assets, as a capital contribution,
pursuant to the Assignment and such other additional instruments and agreements as may be necessary
to affect same in exchange for the issuance of ___Common Units, and the Partnership
hereby accepts such contribution to the capital of the Partnership; provided however that the
underlying real property interests described in Part 2 of Schedule A and described in
“Exhibit A” to Exhibit B to this Agreement (collectively, the “Non-Consent Assets”) shall
only be contributed, if at all, following receipt of all consents deemed necessary to such
contribution by Encore Operating; and further provided that, with respect to the properties
described in Part 3 of Schedule A and described in “Exhibit A” to Exhibit C to this
Agreement, it is understood and agreed that the Surface Use Agreement related to each respective
property, as applicable, shall only be contributed, if at all, following receipt of all consents
deemed necessary to such contribution by Encore Operating. Concurrently, with such contribution,
Encore Operating and the Partnership shall enter into the Operations and Proceeds Agreement with
respect to the Non-Consent Assets.

			
	Section 2.4	 	Contribution of Permian Basin Assets by the Partnership to ENP Operating.

          The Partnership hereby grants, contributes, bargains, conveys, assigns, transfers, sets over
and delivers to ENP Operating, its successors and assigns, for its and their own use forever, the
Permian Basin Assets in exchange for a continuation of its membership interest in ENP Operating,
and ENP Operating hereby accepts the Permian Basin Assets as a contribution to the capital of ENP
Operating.

Section 2.5  Over-Allotment Option.

          The Parties acknowledge that in the event the Underwriters exercise their Over-Allotment
Option, the Partnership will contribute the net proceeds therefrom to ENP Operating, which will use
such proceeds to repay a portion of the indebtedness outstanding under the Credit Agreement.

7

 

ARTICLE III

ASSUMPTIONS OF CERTAIN LIABILITIES; INDEMNIFICATION

			
	Section 3.1	 	Environmental Indemnification.

          Subject to Section 3.2, EAC shall indemnify, defend and hold harmless the Partnership Group
for a period of one (1) year after the Closing Date from and against environmental claims, losses
and expenses (including, without limitation, court costs and reasonable attorneys’ and experts’
fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or
incurred by the Partnership Group by reason of or arising out of:

     (a) any violation, or correction of any violation, of Environmental Laws associated with the
ownership or operation of the Indemnified Assets; or

     (b) any event or condition associated with the ownership or operation of the Indemnified
Assets (including, without limitation, the presence of Hazardous Substances on, under, about or
Releasing to or from the Indemnified Assets or the Release of Hazardous Substances generated by the
operation of the Indemnified Assets at non-Indemnified Asset locations), including, without
limitation, (A) the cost and expense of any investigation, assessment, evaluation, monitoring,
containment, cleanup, abatement, repair, restoration, remediation, or other corrective action
required or necessary under Environmental Laws, using Risk-Based Cleanup Criteria, if applicable,
or to satisfy any applicable Voluntary Cleanup Program, using Risk-Based Cleanup Criteria, if
applicable, (B) the cost or expense of the preparation and implementation of any closure, remedial,
corrective action, or other plans required or necessary under Environmental Laws, using Risk-Based
Cleanup Criteria, if applicable, or to satisfy any applicable Voluntary Cleanup Program, using
Risk-Based Cleanup Criteria, if applicable, and (C) the cost and expense for any environmental
pre-trial, trial, or appellate legal or litigation support work;

but only to the extent that such violation complained of under Section 3.1(a) or such events or
conditions included under Section 3.1(b) occurred or existed on or before the date of this
Agreement (collectively, “Covered Environmental Losses”). Covered Environmental Losses shall not
include any claim, loss or expense arising from or related to the plugging and abandonment of wells
associated with the Indemnified Assets upon the determination that such well or wells have reached
its or their useful economic life. The term “plugging and abandonment” as used herein shall mean
all plugging, replugging, and abandonment associated with the Indemnified Assets, or any portion
thereof, and including, but not limited to, all
plugging and abandonment, associated removal, disposal or restoration of the surface, site
clearance and disposal of the wells, structures and personal property located on or associated with
the Indemnified Assets, the removal or capping and burying of all associated flowlines, the
recontouring of the surface in accordance with applicable laws or the terms and conditions of
applicable leases, licenses, franchises or contracts, site clearance and any disposal of related
waste materials or Hazardous Substances of the type ordinarily encountered in oil and gas
operations, but “plugging and abandonment” shall not include investigation or remediation of soil,
groundwater, or surface water contamination (requiring remediation or response action under
applicable Environmental Laws) exceeding the level of site restoration typically required for
normal plugging and abandonment activities.

8

 

			
	Section 3.2	 	Limitations Regarding Environmental Indemnification.

          The aggregate liability of EAC in respect of all Covered Environmental Losses under Section
3.1 shall not exceed $10.0 million, and EAC shall not have any obligation under Section 3.1 until
such Covered Environmental Losses exceed $500,000, and then only to the extent such aggregate
Covered Environmental Losses exceed $500,000. Notwithstanding anything herein to the contrary, in
no event shall EAC have any indemnification obligations under Section 3.1 for claims made as a
result of additions to or modifications of Environmental Laws promulgated after the Closing Date.

			
	Section 3.3	 	Additional Indemnification.

     (a) In addition to and not in limitation of the indemnification provided under Section 3.1,
EAC shall indemnify, defend and hold harmless the Partnership Group from and against any claims,
losses and expenses (including, without limitation, court costs and reasonable attorneys’ and
experts’ fees) of any and every kind or character, known or unknown, fixed or contingent, suffered
or incurred by the Partnership Group (“Other Losses”) by reason of or arising out of the following:

     (i) failure to convey good and defensible title to the Permian Basin Assets to one or
more members of the Partnership Group subject only to encumbrances that do not materially
adversely affect the value of the Permian Basin Assets or the ability of the Partnership
Group to operate the Permian Basin Assets in substantially the same manner as they were
operated immediately prior to the Closing Date;

     (ii) events and conditions associated with the Retained Assets whether occurring before
or after the Closing Date; and

     (iii) all federal, state and local income tax liabilities attributable to the operation
of the Permian Basin Assets prior to the Closing Date, including any such income tax
liabilities of EAC and its Affiliates that may result from the consummation of the formation
transactions for the Partnership Group;

provided, however, that the Partnership Group shall not be entitled to the indemnity in this
Section 3.3(a) for Other Losses to the extent caused by gross negligence, bad faith or fraud
or willful misconduct of any member of the Partnership Group or for Other Losses reserved on
the books of the Partnership Group as of the Closing Date; provided, further, that, in the
case of clause (i) above, such indemnification obligations shall terminate on the third
anniversary of the Closing Date, and in the case of clause (iii) above, such indemnification
obligations shall terminate after the expiration of any applicable statute of limitations.

     (b) In addition to and not in limitation of the indemnification provided under the Partnership
Agreement, the Partnership Group shall jointly and severally indemnify, defend, and hold harmless
EAC and its Affiliates from and against any claims, losses and expenses (including, without
limitation, court costs and reasonable attorneys’ and experts’ fees) of any and every kind or
character, known or unknown, fixed or contingent, suffered or incurred by EAC or its Affiliates by
reason of or arising out of events and conditions associated with the operation of

9

 

the Indemnified
Assets and occurring on or after the Closing Date (other than Covered Environmental Losses, which
are provided for under Section 3.1), unless such indemnification would not be permitted under the
Partnership Agreement by reason of one of the provisos contained in Section 7.7(a) of the
Partnership Agreement.

			
	Section 3.4	 	Indemnification Procedures.

     (a) The Indemnified Party agrees that promptly after it becomes aware of facts giving rise to
a claim for indemnification under this Article III, it will provide notice thereof in writing to
the Indemnifying Party, specifying the nature of and specific basis for such claim.

     (b) The Indemnifying Party shall have the right to control all aspects of the defense of (and
any counterclaims with respect to) any claims brought against the Indemnified Party that are
covered by the indemnification under this Article III, including, without limitation, the selection
of counsel, determination of whether to appeal any decision of any court and the settling of any
such matter or any issues relating thereto; provided, however, that no such settlement shall be
entered into without the consent of the Indemnified Party unless it includes a full release of the
Indemnified Party from such matter or issues, as the case may be, and does not include the
admission of fault, culpability or a failure to act, by or on behalf of such Indemnified Party.

     (c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with respect
to all aspects of the defense of any claims covered by the indemnification under this Article III,
including, without limitation, the prompt furnishing to the Indemnifying Party of any
correspondence or other notice relating thereto that the Indemnified Party may receive, permitting
the name of the Indemnified Party to be utilized in connection with such defense, the making
available to the Indemnifying Party of any files, records or other information of the Indemnified
Party that the Indemnifying Party considers relevant to such defense and the making available to
the Indemnifying Party of any employees of the Indemnified Party; provided, however, that in
connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact
thereof on the operations of the Indemnified Party and further agrees to
maintain the confidentiality of all files, records, and other information furnished by the
Indemnified Party pursuant to this Section 3.4. In no event shall the obligation of the
Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately
preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and
pay for counsel in connection with the defense of any claims covered by the indemnification set
forth in this Article III; provided, however, that the Indemnified Party may, at its own option,
cost and expense, hire and pay for counsel in connection with any such defense. The Indemnifying
Party agrees to keep any such counsel hired by the Indemnified Party informed as to the status of
any such defense, but the Indemnifying Party shall have the right to retain sole control over such
defense.

     (d) In determining the amount of any loss, cost, damage or expense for which the Indemnified
Party is entitled to indemnification under this Agreement, the gross amount of the indemnification
will be reduced by (i) any insurance proceeds realized by the Indemnified Party and (ii) all
amounts recovered by the Indemnified Party under contractual indemnities from third Persons. For
purposes of calculating the aggregate liability of EAC under Section 3.1, EAC will be deemed to
have incurred any such liability when incurred or paid (and such liability shall be

10

 

applied toward
the $10.0 million limitation on liability set forth in Section 3.2), regardless of the status of
any insurance claims in respect thereof, and such liability (and the application thereof toward the
$10.0 million limitation on liability set forth in Section 3.2) will be reduced when any insurance
proceeds in respect thereof are actually received by EAC to the extent that EAC is not required to
pay such proceeds over to any members of the Partnership Group.

     (e) The date on which notification of a claim for indemnification is received by the
Indemnifying Party shall determine whether such claim is timely made.

ARTICLE IV

TITLE MATTERS

			
	Section 4.1	 	Encumbrances.

     (a) Except to the extent provided in any other document executed in connection with this
Agreement or the Offering, the contribution and conveyance (by operation of law or otherwise) of
the Permian Basin Assets pursuant to this Agreement are made expressly subject to all recorded and
unrecorded liens (other than consensual liens), encumbrances, agreements, defects, restrictions,
adverse claims and all laws, rules, regulations, ordinances, judgments and orders of governmental
authorities or tribunals having or asserting jurisdiction over the Permian Basin Assets and
operations conducted thereon or in connection therewith, in each case to the extent the same are
valid and enforceable and affect the Permian Basin Assets, including all matters that a current
survey or visual inspection of the Permian Basin Assets would reflect.

     (b) To the extent that certain jurisdictions in which the Permian Basin Assets are located may
require that documents be recorded in order to evidence the transfers of title reflected in this
Agreement, then the provisions set forth in Section 4.1(a) immediately above shall also be
applicable to the conveyances under such documents.

			
	Section 4.2	 	Disclaimer of Warranties; Subrogation; Waiver of Bulk Sales Laws.

     (a) EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION
WITH THIS AGREEMENT OR THE OFFERING, THE PARTIES ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS
MADE, DOES NOT MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER,
WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (A) THE VALUE,
NATURE, QUALITY OR CONDITION OF THE PERMIAN BASIN ASSETS INCLUDING THE WATER, SOIL, GEOLOGY OR
ENVIRONMENTAL CONDITION OF THE PERMIAN BASIN ASSETS GENERALLY, INCLUDING THE PRESENCE OR LACK OF
HAZARDOUS SUBSTANCES OR OTHER MATTERS ON THE PERMIAN BASIN ASSETS, (B) THE INCOME TO BE DERIVED
FROM THE PERMIAN BASIN ASSETS, (C) THE SUITABILITY OF THE PERMIAN BASIN ASSETS FOR ANY AND ALL
ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREON, (D) THE COMPLIANCE OF OR BY THE PERMIAN BASIN
ASSETS OR THEIR OPERATION WITH ANY LAWS (INCLUDING ANY ZONING,

11

 

ENVIRONMENTAL PROTECTION, POLLUTION
OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (E) THE HABITABILITY,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PERMIAN
BASIN ASSETS. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN
CONNECTION WITH THIS AGREEMENT OR THE OFFERING, THE PARTIES ACKNOWLEDGE AND AGREE THAT EACH HAS HAD
THE OPPORTUNITY TO INSPECT THE PERMIAN BASIN ASSETS, AND EACH IS RELYING SOLELY ON ITS OWN
INVESTIGATION OF THE PERMIAN BASIN ASSETS AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY
ANY OF THE PARTIES. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN
CONNECTION WITH THIS AGREEMENT OR THE OFFERING, NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY
MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
PERMIAN BASIN ASSETS FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EXCEPT TO THE
EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR
THE OFFERING, EACH OF THE PARTIES ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE
CONTRIBUTION OF THE PERMIAN BASIN ASSETS AS PROVIDED FOR HEREIN IS MADE IN AN “AS IS”, “WHERE IS”
CONDITION WITH ALL FAULTS, AND THE PERMIAN BASIN ASSETS ARE CONTRIBUTED AND CONVEYED SUBJECT TO ALL
OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE SUCH CONTRIBUTION AND
CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN
NEGOTIATED BY THE PARTIES AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND
NEGATION OF ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS,
IMPLIED OR STATUTORY, WITH RESPECT TO THE PERMIAN BASIN ASSETS THAT MAY ARISE PURSUANT TO ANY
LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE, EXCEPT AS SET FORTH IN THIS AGREEMENT OR ANY OTHER
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING.

     (b) The contributions of the Permian Basin Assets made under this Agreement are made with full
rights of substitution and subrogation of the respective Parties receiving such contributions, and
all persons claiming by, through and under such Parties, to the extent assignable, in and to all
covenants and warranties by the predecessors-in-title of the Parties contributing the Permian Basin
Assets, and with full subrogation of all rights accruing under applicable statutes of limitation
and all rights of action of warranty against all former owners of the Permian Basin Assets.

     (c) Each of the Parties agrees that the disclaimers contained in this Section 4.2 are
“conspicuous” disclaimers. Any covenants implied by statute or law by the use of the words
“grant,” “contribute,” “distribute,” “convey,” “bargain,” “assign,” “transfer,” “deliver” or “set
over” or any of them or any other words used in this Agreement are hereby expressly disclaimed,
waived or negated.

12

 

     (d) Each of the Parties hereby waives compliance with any applicable bulk sales law or any
similar law in any applicable jurisdiction in respect of the transactions contemplated by this
Agreement.

ARTICLE V

FURTHER ASSURANCES

			
	Section 5.1	 	Further Assurances.

          From time to time after the Effective Time, and without any further consideration the Parties
agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale,
conveyances, instruments, notices, releases, acquittances and other documents, and will do all such
other acts and things, all in accordance with applicable law, as may be necessary or appropriate
(a) more fully to assure that the applicable Parties own all of the properties, rights, titles,
interests, estates, remedies, powers and privileges granted by this Agreement, or which are
intended to be so granted, or (b) more fully and effectively to vest in the applicable Parties and
their respective successors and assigns beneficial and record title to the interests contributed
and assigned by this Agreement or intended so to be and to more fully and effectively carry out the
purposes and intent of this Agreement.

			
	Section 5.2	 	Other Assurances.

          From time to time after the Effective Time, and without any further consideration, each of the
Parties shall execute, acknowledge and deliver all such additional instruments,
notices and other documents, and will do all such other acts and things, all in accordance
with applicable law, as may be necessary or appropriate to more fully and effectively carry out the
purposes and intent of this Agreement. Without limiting the generality of the foregoing, the
Parties acknowledge that the Parties have used their good faith efforts to attempt to identify all
the assets being contributed to the Partnership Group as required in connection with the Offering.

          However, it is possible that assets intended to be contributed to the Partnership Group were
not identified and therefore are not included in the Permian Basin Assets. It is the express
intent of the Parties that the Partnership Group will own all assets necessary to operate the
assets that are identified on Schedule A to this Agreement and in the Registration
Statement. To the extent any assets were not identified but are necessary to the operation of
assets that were identified, then the intent of the Parties is that all such unidentified assets
are intended to be conveyed to the appropriate members of the Partnership Group. To the extent
such assets are identified at a later date, the Parties shall take the appropriate actions required
in order to convey all such assets to the appropriate members of the Partnership Group. Likewise,
to the extent that assets are identified at a later date that were not intended by the Parties to
be conveyed as reflected in the Registration Statement, the Parties shall take the appropriate
actions required in order to convey all such assets to the appropriate party.

ARTICLE VI

EFFECTIVE TIME

          Notwithstanding anything contained in this Agreement to the contrary, none of the provisions
of Article II or Article III of this Agreement shall be operative or have any effect

13

 

until the
Effective Time, at which time all the provisions of Article II or Article III of this Agreement
shall be effective and operative in accordance with Section 7.1 and this Article VI, without
further action by any Party.

ARTICLE VII

MISCELLANEOUS

			
	Section 7.1	 	Order of Completion of Transactions.

          The transactions provided for in Article II of this Agreement (other than Section 2.5) shall
be completed immediately following the Effective Time in the order set forth in Article II of this
Agreement. The transactions provided for in Section 2.5 of this Agreement shall be completed after
those provided for in Article II of this Agreement.

			
	Section 7.2	 	Costs.

          Except for the transaction expenses set forth in Section 2.2, ENP Operating shall pay all
expenses, fees and costs, including sales, use and similar taxes arising out of the contributions,
conveyances and deliveries to be made hereunder, and shall pay all documentary, filing, recording,
transfer, deed and conveyance taxes and fees required in connection therewith.
In addition, ENP Operating shall be responsible for all costs, liabilities and expenses
(including court costs and reasonable attorneys’ fees) incurred in connection with the
implementation of any conveyance or delivery pursuant to Article V of this Agreement.

			
	Section 7.3	 	Headings; References; Interpretation.

          All Article and Section headings in this Agreement are for convenience only and shall not be
deemed to control or affect the meaning or construction of any of the provisions hereof. The words
“hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole, including, without limitation, all Schedules and Exhibits
attached hereto, and not to any particular provision of this Agreement. All references herein to
Articles, Sections, Schedules and Exhibits shall, unless the context requires a different
construction, be deemed to be references to the Articles and Sections of this Agreement, and the
Schedules and Exhibits attached hereto, and all such Schedules and Exhibits attached hereto are
hereby incorporated herein and made a part hereof for all purposes. All personal pronouns used in
this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other
genders, and the singular shall include the plural and vice versa. The terms “include,”
“includes,” “including” or words of like import shall be deemed to be followed by the words
“without limitation.”

			
	Section 7.4	 	Successors and Assigns.

          The Agreement shall be binding upon and inure to the benefit of the Parties and their
respective successors and assigns.

14

 

			
	Section 7.5	 	No Third Party Rights.

          The provisions of this Agreement are intended to bind the Parties as to each other and are not
intended to and do not create rights in any other person or confer upon any other person any
benefits, rights or remedies and no person is or is intended to be a third party beneficiary of any
of the provisions of this Agreement.

			
	Section 7.6	 	Counterparts.

          This Agreement may be executed in any number of counterparts, all of which together shall
constitute one agreement binding on the Parties.

			
	Section 7.7	 	Governing Law.

          This Agreement shall be governed by, and construed in accordance with, the laws of the State
of Texas applicable to contracts made and to be performed wholly within such state without giving
effect to conflict of law principles thereof.

			
	Section 7.8	 	Severability.

          If any of the provisions of this Agreement are held by any court of competent jurisdiction to
contravene, or to be invalid under, the laws of any political body having jurisdiction over the
subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement.
Instead, this Agreement shall be construed as if it did not contain the particular provision or
provisions held to be invalid, and an equitable adjustment shall be made and necessary provision
added so as to give effect to the intention of the Parties as expressed in this Agreement at the
time of execution of this Agreement.

			
	Section 7.9	 	Amendment or Modification.

          This Agreement may be amended or modified from time to time only by the written agreement of
all the Parties. Each such instrument shall be reduced to writing and shall be designated on its
face as an amendment to this Agreement.

			
	Section 7.10	 	Integration.

          This Agreement and the instruments referenced herein supersede all previous understandings or
agreements among the Parties, whether oral or written, with respect to its subject matter. This
document and such instruments contain the entire understanding of the Parties. No understanding,
representation, promise or agreement, whether oral or written, is intended to be or shall be
included in or form part of this Agreement unless it is contained in a written amendment hereto
executed by the Parties after the date of this Agreement.

			
	Section 7.11	 	Deed; Bill of Sale; Assignment.

          To the extent required and permitted by applicable law, this Agreement shall also constitute a
“deed,” “bill of sale” or “assignment” of the assets and interests referenced herein; (but
specifically excluding the Non-Consent Assets); provided that in such event, as regards the

15

 

Permian
Basin Assets, any conflict between this Agreement and the Assignment shall be construed in favor of
the Assignment.

[SIGNATURE PAGE FOLLOWS]

16

 

          IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of the date first
written above.

	 	 	 	 	 	 	 
	 	 	ENCORE ACQUISITION COMPANY
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 	 	 	 	[Name]
	 	 	 	 	[Title]
	 
	 	 	 	 	 	 
	 	 	ENCORE OPERATING, L.P.
	 
	 	 	 	 	 	 
	 	 	By:	 	EAP Operating, Inc.,
	 	 	 	 	its General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	[Name]
	 

	 	 	 	 	 	[Title]
	 
	 	 	 	 	 	 
	 	 	ENCORE ENERGY PARTNERS GP LLC
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	[Name]
	 

	 	 	 	 	 	[Title]
	 
	 	 	 	 	 	 
	 	 	ENCORE ENERGY PARTNERS LP
	 
	 	 	 	 	 	 
	 	 	By:	 	Encore Energy Partners GP LLC,
	 	 	 	 	its General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	[Name]
	 

	 	 	 	 	 	[Title]
	 
	 	 	 	 	 	 
	 	 	ENCORE ENERGY PARTNERS OPERATING LLC
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	[Name]
	 

	 	 	 	 	 	[Title]

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]