ASSIGNMENT AND ASSUMPTION AGREEMENT
Exhibit 10.5
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.”
RECITALS
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
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
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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 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.
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(b) In connection with the assignment by GP Holdings of the 2% Elk Basin Interest and the 2%
Put Interest to the General Partner, as set forth in Section 1.4(a) above, the General
Partner hereby assumes and agrees to duly and timely pay, perform and discharge the 2% Liabilities,
to the full extent that GP Holdings 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 the
General Partner with respect to the 2% Liabilities beyond that of GP Holdings, (ii) waive any valid
defense that was available to GP Holdings with respect to the 2% Liabilities or (iii) enlarge any
rights or remedies of any third party under any of the 2% Liabilities.
1.5 Assignment by the General Partner of the 2% Elk Basin Interest and the 2% Put Interest to
the Partnership, and Assumption of Related Obligations and Liabilities by the Partnership.
(a) The General Partner hereby grants, distributes, transfers, assigns and conveys to the
Partnership, its successors and assigns, for its and their own use forever, the 2% Elk Basin
Interest and the 2% Put Interest, and the Partnership hereby accepts the assignment of the 2% Elk
Basin Interest and the 2% Put Interest from the General Partner.
TO HAVE AND TO HOLD the 2% Elk Basin Interest and the 2% 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 the General Partner of the 2% Elk Basin Interest and
the 2% Put Interest to the Partnership, as set forth in Section 1.5(a) above, the
Partnership hereby assumes and agrees to duly and timely pay, perform and discharge the 2%
Liabilities, to the full extent that the General Partner 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 the Partnership with respect to the 2% Liabilities beyond that of
the General Partner, (ii) waive any valid defense that was available to the General Partner with
respect to the 2% Liabilities or (iii) enlarge any rights or remedies of any third party under any
of the 2% Liabilities.
1.6 Assignment by the Partnership of the 100% Elk Basin Interest and the 100% Put Interest to
OLLC, and Assumption of Related Obligations and Liabilities by OLLC.
(a) The Partnership hereby grants, distributes, transfers, assigns and conveys to OLLC, its
successors and assigns, for its and their own use forever, the 98% Elk Basin Interest and the 2%
Elk Basin Interest (collectively, the “100% Elk Basin Interest”) and the 98% Put Interest
and the 2% Put Interest (collectively, the “100% Put Interest”), and OLLC hereby accepts
the assignment of the 100% Elk Basin Interest and the 100% Put Interest from the Partnership.
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TO HAVE AND TO HOLD the 100% Elk Basin Interest and the 100% Put Interest unto OLLC, 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 Partnership of the 100% Elk Basin Interest and
the 100% Put Interest to OLLC, as set forth in Section 1.6(a) above, OLLC hereby assumes
and agrees to duly and timely pay, perform and discharge all obligations and liabilities relating
to the 100% Elk Basin Interest and the 100% Put Interest (collectively, the “100%
Liabilities”), to the full extent that the Partnership has been heretofore or would have been
in the future obligated to pay, perform and discharge the 100% 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 100% Liabilities shall
not (i) increase the obligation of OLLC with respect to the 100% Liabilities beyond that of the
Partnership, (ii) waive any valid defense that was available to the Partnership with respect to the
100% Liabilities or (iii) enlarge any rights or remedies of any third party under any of the 100%
Liabilities.
1.7 Assignment by OLLC of the Pipeline Interest to Pipeline LLC, and Assumption of Related
Obligations and Liabilities by Pipeline LLC.
(a) Immediately after its purchase of the Pipeline Interest, OLLC hereby grants, distributes,
transfers, assigns and conveys to Pipeline LLC, its successors and assigns, for its and their own
use forever, the Pipeline Interest, and Pipeline LLC hereby accepts the assignment of the Pipeline
Interest from OLLC.
TO HAVE AND TO HOLD the Pipeline Interest unto Pipeline LLC, 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 OLLC of the Pipeline Interest to Pipeline LLC, as set
forth in Section 1.7(a) above, Pipeline LLC hereby assumes and agrees to duly and timely
pay, perform and discharge all obligations and liabilities relating to the Pipeline Interest (the
“Pipeline Liabilities”), to the full extent that OLLC has been heretofore or would have
been in the future obligated to pay, perform and discharge the Pipeline 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 Pipeline Liabilities
shall not (i) increase the obligation of Pipeline LLC with respect to the Pipeline Liabilities
beyond that of OLLC, (ii) waive any valid defense that was available to OLLC with
respect to the Pipeline Liabilities or (iii) enlarge any rights or remedies of any third party
under any of the Pipeline Liabilities.
1.8 General Provisions Relating to Assumption of Liabilities. Notwithstanding anything to the
contrary contained in this Agreement including, without limitation, the terms and provisions of
this Article I, none of the Parties shall be deemed to have assumed, and the Elk Basin Interest,
Put Interest and Pipeline Interest have not and are not being assigned, subject to, any liens or
security interests securing consensual indebtedness covering such interests, and all
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such liens and security interests shall be deemed to be excluded from the assumptions of liabilities made under
this Article I.
ARTICLE II
FURTHER ASSURANCES
FURTHER ASSURANCES
2.1 Further Assurances. From time to time after the date hereof, 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, (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 (c) to more fully and
effectively carry out the purposes and intent of this Agreement.
2.2 Other Assurances. From time to time after the date hereof, 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. It is the express intent of the Parties that
(1) OLLC or its subsidiaries own the Elk Basin Interest and the Put Interest and (2) Pipeline LLC
or its subsidiaries own the Pipeline Interest, each as identified in this Agreement.
ARTICLE III
MISCELLANEOUS
MISCELLANEOUS
3.1 Order of Completion of Transactions. The transactions provided for in Article I of this
Agreement shall be completed on March 6, 2007 in the order set forth above.
3.2 Costs. OLLC and Pipeline LLC, as the case may be, shall pay all sales, use and similar
taxes arising out of the assignments, 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.
3.3 Successors and Assigns. The Agreement shall be binding upon and inure to the benefit of
the parties signatory hereto and their respective successors and assigns.
3.4 No Third Party Rights. The provisions of this Agreement are intended to bind the parties
signatory hereto 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.
3.5 Counterparts. This Agreement may be executed in any number of counterparts, all of which
together shall constitute one agreement binding on the parties hereto.
3.6 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
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wholly within such state without giving effect to conflict of law principles thereof, except to the extent that it is
mandatory that the law of some other jurisdiction, wherein the interests are located, shall apply.
3.7 Assignment; Amendment. Neither this Agreement nor any of the rights, interests, or
obligations hereunder may be assigned by any Party without the prior written consent of each of the
Parties. This Agreement may be amended or modified from time to time only by the written agreement
of all the Parties hereto and affected thereby.
3.8 Director and Officer Liability. Except to the extent that they are a party hereto, the
directors, managers, officers, partners and securityholders of the Parties and their respective
affiliates shall not have any personal liability or obligation arising under this Agreement
(including any claims that another party may assert).
3.9 Severability. If any term or other provision of this Agreement is invalid, illegal, or
incapable of being enforced under applicable law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein are not affected in any manner
adverse to any Party. Upon such determination that any term or other provision of this Agreement
is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the Parties as closely as possible in
a mutually acceptable manner in order that the transactions contemplated herein are consummated as
originally contemplated to the fullest extent possible.
3.10 Integration. This Agreement and the instruments referenced herein supersede any and all
previous understandings or agreements among the Parties, whether oral or written, with respect to
their subject matter. This Agreement and such instruments contain the entire understanding of the
Parties with respect to the subject matter hereof and thereof. 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 or any such instrument unless it is contained in a written amendment hereto
or thereto and executed by the Parties hereto or thereto after the date of this Agreement or such
instrument.
3.11 Effect of Amendment. The Parties ratify and confirm that except as otherwise expressly
provided herein, in the event this Agreement conflicts in any way with any instrument of conveyance
covering the Elk Basin Interest, the Put Interest or the Pipeline Interest, the terms and
provisions of this Agreement shall control.
[Signature Page Follows]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date
first above written.
| ENCORE ACQUISITION COMPANY |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Senior Vice President, Chief Financial Officer and Treasurer | |||
| ENCORE PARTNERS GP HOLDINGS LLC |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Vice President, Treasurer and Secretary | |||
| ENCORE PARTNERS LP HOLDINGS LLC |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Vice President, Treasurer and Secretary | |||
| ENCORE ENERGY PARTNERS GP LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Senior Vice President, Chief Financial Officer and Treasurer | |||
| ENCORE ENERGY PARTNERS LP |
||||
| By: | ENCORE ENERGY PARTNERS GP LLC, | |||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Senior Vice President, Chief Financial Officer and Treasurer | |||
| ENCORE ENERGY PARTNERS OPERATING LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Senior Vice President, Chief Financial Officer, Treasurer and Secretary | |||
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| ENCORE CLEAR FORK PIPELINE LLC |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Vice President, Treasurer and Secretary | |||
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