ASSIGNMENT AND ASSUMPTION
AGREEMENT
THIS ASSIGNMENT
AND ASSUMPTION AGREEMENT (this “ Agreement
”) dated as of March 6, 2007, is made and entered into
by and among Encore Acquisition Company, a Delaware corporation
(the “ Company ”), Encore Partners GP
Holdings LLC, a Delaware limited liability company (“
GP Holdings ”), Encore Partners LP Holdings
LLC, a Delaware limited liability company (“ LP
Holdings ”), 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 (“ OLLC ”), and Encore
Clear Fork Pipeline LLC, a Delaware limited liability company
(“ Pipeline LLC ”). The above-named
entities are sometimes referred to in this Agreement each as a
“ Party ” and collectively as the “
Parties .”
WHEREAS, the
Company has entered into that certain purchase and sale agreement
dated January 16, 2007 (the “ Big Horn Purchase
Agreement ”) with subsidiaries of Anadarko Petroleum
Corporation (collectively, the “ Big Horn
Sellers ”) pursuant to which the Company will acquire
from the Big Horn Sellers certain oil and natural gas properties
and related assets in the Big Horn Basin of Wyoming and Montana
(the “ Big Horn Basin Assets ”) for a
purchase price of $400 million, subject to customary purchase
price adjustments;
WHEREAS, the Big
Horn Basin Assets include oil and natural gas properties and
related assets (including, but not limited to, the Elk Basin Gas
Plant) in or near the Elk Basin field in Park County, Wyoming and
Carbon County, Montana, including, without limitation, those
properties and assets set forth on Exhibit A-1 hereto
(the “ Elk Basin Assets ”);
WHEREAS, the Elk
Basin Assets include the Clearfork pipeline and related assets,
including, without limitation, those pipeline and related assets
set forth on Exhibit A-2 hereto (the “
Pipeline Assets ”);
WHEREAS,
Section 12.10 of the Big Horn Purchase Agreement provides that
the Company may assign or delegate any of its rights and duties
under the Big Horn Purchase Agreement to a subsidiary of the
Company;
WHEREAS, the
Company (through one or more of its subsidiaries) desires to assign
to OLLC all rights and duties under the Big Horn Purchase Agreement
relating to the Elk Basin Assets (the “ Elk Basin
Interest ”);
WHEREAS, the
Company (through one or more of its subsidiaries) desires to assign
certain put contracts covering current and future production from
the Elk Basin Assets to OLLC (the “ Put
Interest ”); and
WHEREAS,
immediately upon completion of the purchase of the Elk Basin
Assets, OLLC desires to assign to Pipeline LLC all of its rights
and interest in the Pipeline Assets (the “ Pipeline
Interest ”);
NOW THEREFORE, in
consideration of their mutual undertakings and agreements set forth
herein, the Parties undertake and agree as follows:
ARTICLE I
ASSIGNMENT AND ASSUMPTION
1.1 Assignment
by the Company of 98% of the Elk Basin Interest and 98% of the Put
Interest to LP Holdings, and Assumption of Related Obligations and
Liabilities by LP Holdings .
(a) The
Company hereby grants, distributes, transfers, assigns and conveys
to LP Holdings, its successors and assigns, for its and their own
use forever, 98% of the Elk Basin Interest (the “ 98%
Elk Basin Interest ”) and 98% of the Put Interest
(the “ 98% Put Interest ”), and LP
Holdings hereby accepts the assignment of the 98% Elk Basin
Interest and the 98% Put Interest from the Company.
TO
HAVE AND TO HOLD the 98% Elk Basin Interest and the 98% Put
Interest unto LP Holdings, its successors and assigns, together
with all and singular the rights and appurtenances thereto in
anywise belonging, subject, however, to the terms and conditions
stated in this Agreement, forever.
(b) In
connection with the assignment by the Company of the 98% Elk Basin
Interest and the 98% Put Interest to LP Holdings, as set forth in
Section 1.1(a) above, LP Holdings hereby assumes and
agrees to duly and timely pay, perform and discharge all
obligations and liabilities relating to the 98% Elk Basin Interest
and the 98% Put Interest (collectively, the “ 98%
Liabilities ”), to the full extent that the Company
has been heretofore or would have been in the future obligated to
pay, perform and discharge the 98% Liabilities were it not for such
assignment and the execution and delivery of this Agreement;
provided, however, that said assumption and agreement to
duly and timely pay, perform and discharge the 98% Liabilities
shall not (i) increase the obligation of LP Holdings with
respect to the 98% Liabilities beyond that of the Company,
(ii) waive any valid defense that was available to the Company
with respect to the 98% Liabilities or (iii) enlarge any
rights or remedies of any third party under any of the 98%
Liabilities.
1.2 Assignment
by the Company of 2% of the Elk Basin Interest and 2% of the Put
Interest to GP Holdings, and Assumption of Related Obligations and
Liabilities by GP Holdings .
(a) The
Company hereby grants, distributes, transfers, assigns and conveys
to GP Holdings, its successors and assigns, for its and their own
use forever, 2% of the Elk Basin Interest (the “ 2% Elk
Basin Interest ”) and 2% of the Put Interest (the
“ 2% Put Interest ”), and GP Holdings
hereby accepts the assignment of the 2% Elk Basin Interest and the
2% Put Interest from the Company.
TO
HAVE AND TO HOLD the 2% Elk Basin Interest and the 2% Put Interest
unto GP Holdings, its successors and assigns, together with all and
singular the rights and appurtenances thereto in anywise belonging,
subject, however, to the terms and conditions stated in this
Agreement, forever.
(b) In
connection with the assignment by the Company of the 2% Elk Basin
Interest and the 2% Put Interest to GP Holdings, as set forth in
Section 1.2(a) above, GP Holdings hereby assumes and
agrees to duly and timely pay, perform and discharge all
-2-
obligations and
liabilities relating to the 2% Elk Basin Interest and the 2% Put
Interest (collectively the “ 2% Liabilities
”), to the full extent that the Company has been heretofore
or would have been in the future obligated to pay, perform and
discharge the 2% Liabilities were it not for such assignment and
the execution and delivery of this Agreement; provided,
however, that said assumption and agreement to duly and timely
pay, perform and discharge the 2% Liabilities shall not
(i) increase the obligation of GP Holdings with respect to the
2% Liabilities beyond that of the Company, (ii) waive any
valid defense that was available to the Company with respect to the
2% Liabilities or (iii) enlarge any rights or remedies of any
third party under any of the 2% Liabilities.
1.3 Assignment
by LP Holdings of the 98% Elk Basin Interest and the 98% Put
Interest to the Partnership, and Assumption of Related Obligations
and Liabilities by the Partnership .
(a) LP
Holdings hereby grants, distributes, transfers, assigns and conveys
to the Partnership, its successors and assigns, for its and their
own use forever, the 98% Elk Basin Interest and the 98% Put
Interest, and the Partnership hereby accepts the assignment of the
98% Elk Basin Interest and the 98% Put Interest from LP
Holdings.
TO
HAVE AND TO HOLD the 98% Elk Basin Interest and the 98% Put
Interest unto the Partnership, its successors and assigns, together
with all and singular the rights and appurtenances thereto in
anywise belonging, subject, however, to the terms and conditions
stated in this Agreement, forever.
(b) In
connection with the assignment by LP Holdings of the 98% Elk Basin
Interest and the 98% Put Interest to the Partnership, as set forth
in Section 1.3(a) above, the Partnership hereby assumes
and agrees to duly and timely pay, perform and discharge the 98%
Liabilities, to the full extent that LP Holdings has been
heretofore or would have been in the future obligated to pay,
perform and discharge the 98% Liabilities were it not for such
assignment and the execution and delivery of this Agreement;
provided, however, that said assumption and agreement to
duly and timely pay, perform and discharge the 98% Liabilities
shall not (i) increase the obligation of the Partnership with
respect to the 98% Liabilities beyond that of LP Holdings,
(ii) waive any valid defense that was available to LP Holdings
with respect to the 98% Liabilities or (iii) enlarge any
rights or remedies of any third party under any of the 98%
Liabilities.
1.4 Assignment
by GP Holdings of the 2% Elk Basin Interest and the 2% Put Interest
to the General Partner, and Assumption of Related Obligations and
Liabilities by the General Partner .
(a) GP
Holdings hereby grants, distributes, transfers, assigns and conveys
to the General Partner, its successors and assigns, for its and
their own use forever, the 2% Elk Basin Interest and the 2% Put
Interest, and the General Partner hereby accepts the assignment of
the 2% Elk Basin Interest and the 2% Put Interest from GP
Holdings.
TO
HAVE AND TO HOLD the 2% Elk Basin Interest and the 2% Put Interest
unto the General Partner, its suc
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