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<PAGE>
EXHIBIT 10.5
Execution copy
CONTRIBUTION
AGREEMENT
EnerVest Management
Partners, Ltd.
EnerVest
Operating, L.L.C.
CGAS
Exploration, Inc.
EV
Investors, L.P.
EVCG GP,
L.L.C.
CGAS Properties, L.P.
EnCap
Energy
Capital
Fund V, L.P.
EnCap V-B
Acquisitions, L.P.
EV
Management, L.L.C.
EV Energy GP, L.P.
EV Energy
Partners, L.P.
CGas
Holdings, LLC
EVEC
Holdings, LLC
September
29, 2006
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I. Definitions
2
Section 1.1 Defined
Terms...................................... 2
Section 1.2 Other Defined
Terms................................ 3
Section 1.3
Construction....................................... 3
Section 1.4
References......................................... 4
ARTICLE II. CONTRIBUTION BY OWNERS OF PROPERTIES LP.................... 4
Section 2.1 Capitalization of the General
Partner.............. 4
Section 2.2 Capitalization of the
Partnership..................
4
ARTICLE III. Representations and Warranties............................ 5
Section 3.1 Representations and Warranties of All
Parties...... 5
Section 3.2 Representations of EVMP Regarding
Properties LP,
Properties GP, Clinton and Clinton
GP.............. 6
Section 3.3 Representations of EVMP Regarding
Capitalization
and Ownership of
Properties GP, Properties LP,
Clinton GP and
Clinton LP.......................... 7
Section 3.4 Representations and Warranties of EVMP
Regarding
Ownership and
Transfer of Interests in Properties
GP and Properties
LP............................... 8
Section 3.5 Representations and Warranties of EVOC
Regarding
Ownership and
Transfer of Interests in
Properties
LP...................................... 9
Section 3.6 Representation and Warranties of EnCap
Funds
Regarding Ownership
and Transfer of Interests
in Properties
LP................................... 9
Section 3.7 Representations and Warranties of CGAS Regarding
Ownership and
Transfer of Interests in
Clinton
LP......................................... 9
Section 3.8 Representations and Warranties of Investors
Regarding Ownership
and Transfer of Interests
in Properties
LP................................... 10
Section 3.9 Representations and Warranties of the
General
Partner Regarding
Interests Issued................. 10
Section 3.10 Representations and Warranties of the
Partnership
Regarding Common and
Subordinated Units............
10
Section 3.11 Representations and Warranties of EVMP,
EVOC,
the EnCap Funds and CGAS regarding securities
laws............................................... 10
ARTICLE IV. COVENANTS.................................................. 11
Section 4.1 Consent to Admission as a Member or
Partner........ 11
Section 4.2 Further
Assurances................................. 11
Section 4.3 Conveyance of the Clinton
Properties............... 11
</TABLE>
i
<PAGE>
<TABLE>
<S>
<C>
ARTICLE V. THE CLOSING................................................. 11
Section 5.1 The Closing........................................ 11
Section 5.2 Deliveries at Closing by Sole Member of
Properties GP,
Limited Partners of Properties
LP and Properties
GP and CGAS..................... 11
Section 5.3 Deliveries at Closing by General
Partner........... 12
Section 5.4 Deliveries at Closing by the
Partnership........... 12
ARTICLE VI. MISCELLANEOUS.............................................. 12
Section 6.1
Headings........................................... 12
Section 6.2
Notices............................................ 13
Section 6.3
Assignment......................................... 13
Section 6.4 Entire
Agreement................................... 13
Section 6.5
Counterparts....................................... 13
Section 6.6 Governing Law...................................... 13
Section 6.7
Severability....................................... 13
Section 6.8 No Survival of Representations and
Warranties
and
Covenants...................................... 13
PROPERTIES LP SUBSIDIARIES............................................ Schedule 3.2
RECORD OWNERS OF PROPERTIES LP........................................ Schedule 3.3
ENCAP OWNERSHIP PERCENTS.............................................. Schedule 3.6
</TABLE>
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<PAGE>
CONTRIBUTION
AGREEMENT
This Contribution Agreement
("AGREEMENT"), dated as of September 29, 2006,
is entered into by and among EnerVest Management Partners, Ltd., a Texas
limited
partnership ("EVMP"), EVEC Holdings, LLC, a Delaware limited
liability Company
("EVH"), EnerVest Operating, L.L.C., a Delaware limited liability
company
("EVOC"), CGAS Exploration, Inc., an Ohio corporation
("CGAS"), EV Investors,
L.P., a Delaware limited partnership ("INVESTORS"), EVCG GP, L.L.C.,
a Delaware
limited liability company ("CLINTON GP"), CGAS Properties, L.P., a
Delaware
limited partnership ("CLINTON LP"), CGas Holdings, LLC, a Delaware
limited
liability company ("CGH") EnCap Energy Capital Fund V, L.P., a Texas
limited
partnership ("ENCAP FUND V"), EnCap V-B Acquisitions, L.P., a Texas
limited
partnership ("ENCAP FUND V-B" and, together with EnCap Fund V, the
"ENCAP
FUNDS"), EV Management, L.L.C., a Delaware limited liability company
("MANAGEMENT"), EV Energy GP, L.P., a Delaware limited partnership
(the "GENERAL
PARTNER"), and EV Energy Partners, L.P., a Delaware limited partnership
(the
"PARTNERSHIP").
WHEREAS, EVMP previously formed
Management and EVH as a wholly owned
subsidiaries;
WHEREAS, EVMP, as limited partner,
and Management, as general partner,
formed the General Partner as a Delaware limited partnership;
WHEREAS, EVMP, as organizational
limited partner, and the General Partner,
as general partner, formed the Partnership as a Delaware limited partnership;
WHEREAS, EVMP formed EV Properties
GP, L.L.C., as a wholly-owned Delaware
limited liability company ("PROPERTIES GP");
WHEREAS, EVMP, EV Investors and the
EnCap Funds, as limited partners, and
Properties GP, as general partner, formed EV Properties, L.P., as a Delaware
limited partnership ("PROPERTIES LP");
WHEREAS, EVMP, EnCap Investments
GP, L.L.C., a Delaware limited liability
company ("ENCAP"), and the Partnership have entered into the
Investor's
Agreement, dated May 12, 2006 ("INVESTOR'S AGREEMENT"), pursuant to
which EVMP,
EnCap and the Partnership agreed to take all steps necessary to cause the
transactions described in this Agreement to occur;
WHEREAS, as contemplated by the Investor's
Agreement, EVMP will contribute
its membership interest in Properties GP to the General Partner in exchange for
a limited partnership interest in the General Partner;
WHEREAS, as contemplated by the
Investor's Agreement, EVMP, and the EnCap
Funds will contribute a portion of their limited partner interests in
Properties
LP to the General Partner in exchange for limited partnership interests in the
General Partner;
WHEREAS, EV Investors will
contribute $144,150 in cash to the General
Partner in exchange for limited partnership interests in the General Partner;
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<PAGE>
WHEREAS, as contemplated by the
Investor's Agreement, the General Partner
will contribute the membership interest in Properties GP and the limited
partner
interests in Properties LP to the Partnership to maintain its 2% general
partner
interest;
WHEREAS, as contemplated by the
Investor's Agreement, EVMP, EVOC,
Investors and the EnCap Funds desire to contribute the remainder of their
limited partnership interests in Properties LP to the Partnership in exchange
for Common Units, Subordinated Units and cash;
WHEREAS, as contemplated by the
Investor's Agreement, Properties LP has
formed Clinton GP as a wholly owned Delaware limited liability company;
WHEREAS, as contemplated by the
Investor's Agreement, Clinton GP, as
general partner, and CGAS, as limited partner, have formed Clinton LP as a
Delaware limited partnership;
WHEREAS, as contemplated by the Investor's
Agreement, CGAS contributed the
Clinton Properties to Clinton LP in exchange for a limited partnership interest
in Clinton LP;
WHEREAS, as contemplated by the
Investor's Agreement, CGAS will contribute
the limited partnership interest in Clinton LP to the Partnership in exchange
for Common Units, Subordinated Units and cash;
WHEREAS, CGAS formed CGH as a
wholly owned subsidiary; and
WHEREAS, EVMP and EVOC assigned
their right to receive Subordinated Units
to EVH and CGAS assigned its right to receive Subordinated Units to CGH;
NOW THEREFORE, for good and
valuable consideration, the parties agree as
follows:
ARTICLE I.
Definitions
SECTION 1.1.DEFINED TERMS. The
following terms have the meanings set forth
below when used in this Agreement:
"CLINTON CONVEYANCE"
means the conveyance of even date between CGAS, as
grantor, and Clinton LP, as grantee.
"CLINTON PROPERTIES"
means those interests in oil and gas properties
described in Exhibit A to the Clinton Conveyance.
"COMMON UNITS" has the
meaning set forth in the MLP Partnership Agreement.
"GOVERNMENTAL AUTHORITY"
means the United States, any foreign country,
state, county, city or other incorporated or unincorporated political
subdivision, agency or instrumentality thereof.
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<PAGE>
"GP PARTNERSHIP
AGREEMENT" means the amended and restated agreement of
limited partnership of the General Partner.
"INCENTIVE DISTRIBUTION
RIGHTS" has the meaning set forth in the MLP
Partnership Agreement.
"MLP PARTNERSHIP
AGREEMENT" means the amended and restated agreement of
the limited partnership of the Partnership.
"PERSON" shall mean a
corporation, an association, a partnership, an
organization, a business, an individual or a Governmental Authority.
"SUBORDINATED UNITS" has
the meaning set forth in the MLP Partnership
Agreement.
SECTION 1.2.OTHER DEFINED TERMS. The
following terms are defined in the
sections indicated:
<TABLE>
<CAPTION>
Term Section
------------ ----------
<S> <C>
Closing 5.1
Agreement First Paragraph
CGAS First Paragraph
CGH First Paragraph
Claim Section 3.4
Clinton GP First Paragraph
Clinton LP First Paragraph
Closing Section 5.1
EnCap Recitals
EnCap Fund V Recitals
EnCap Funds V-B Recitals
EVH First Paragraph
EVMP First Paragraph
EVOC First Paragraph
Investors First Paragraph
Investor's Agreement Recitals
General Partner First Paragraph
Management First Paragraph
Partnership First Paragraph
Properties GP Recitals
Properties LP Recitals
Securities ACT Section 3.4
</TABLE>
SECTION 1.3.CONSTRUCTION. Whenever
the context requires, the gender of all
words used herein shall include the masculine, feminine and neuter, and the
number of all words shall include the singular and plural.
3
<PAGE>
SECTION 1.4.REFERENCES. Unless
specified, references in this Agreement to
"Sections", "Subsections", "Paragraphs" or
"Articles" refer to the sections,
subsections, paragraphs or articles in this Agreement.
ARTICLE II.
CONTRIBUTION BY
OWNERS OF PROPERTIES LP
SECTION 2.1.CAPITALIZATION OF THE GENERAL PARTNER.
(a)At the Closing, pursuant to the
Investor's Agreement, Management will
contribute $288.30 to the General Partner to retain its 0.01% interest in the
General Partner as general partner.
(b) At the Closing, pursuant to the
Investor's Agreement,
(i) EVMP will contribute the
entire membership interest in
Properties GP and a 3.44% limited
partnership interest in Properties LP to
the General Partner, in exchange
for a 71.24% interest as a limited
partner in the General Partner;
(ii) Investors will
contribute $144,150 to the General Partner in
exchange for a 5.00% interest as a
limited partner in the General Partner;
(iii) EnCap Fund V will
contribute a 0.66% interest in Properties LP
to the General Partner in exchange
for a 13.26% interest as a limited
partner in the General Partner; and
(iv) EnCap Fund V-B will contribute a
0.52% interest in Properties
LP to the General Partner in
exchange for a 10.49% interest as a limited
partner in the General Partner.
SECTION 2.2 CAPITALIZATION OF THE
PARTNERSHIP.
(a) At the Closing, pursuant to the
Investor's Agreement, the General
Partner will contribute the entire membership interest in Properties GP, a
4.63%
limited partnership interest in Properties LP and $144,150 in cash to the
Partnership. In exchange for the contribution contemplated by this Section
2.2(a), the General Partner will retain its 2.00% general partnership interest
in the Partnership and will be issued the Incentive Distribution Rights by the
Partnership and be admitted as a limited partner with respect to such Incentive
Distribution Rights.
(b) At the Closing, pursuant to the
Investor's Agreement,
(i) EVMP will
contribute a 4.27% limited partnership interest
in Properties LP to the
Partnership in exchange for 25,244 Common
Units and a cash payment of
$2,072,327.22, less its share of
expenses, if any, in excess
of $2.0 million.
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<PAGE>
(ii) EVOC will
contribute a 54.03% limited partnership
interest in Properties LP to
the Partnership in exchange for 138,381
Common Units, 810,030
Subordinated Units (which will be issued to
and held by EVH) and a cash
payment of $14,519,564.03, less its
share of expenses, if any, in
excess of $2.0 million.
(iii) Investors will
contribute a 5.00 % limited partnership
interest in Properties LP to
the Partnership in exchange for 155,000
Subordinated Units.
(iv) EnCap Fund V will contribute a
17.95% limited partnership
in interest Properties LP to
the Partnership in exchange for 49,207
Common Units, 243,350
Subordinated Units and a cash payment of
$4,989,634.21, less its share
of expenses, if any, in excess of $2.0
million.
(v) EnCap Fund V-B will
contribute a 14.21% limited
partnership in interest in
Properties LP to the Partnership in
exchange for 38,913 Common
Units, 192,820 Subordinated Units and a
cash payment of
$3,945,853.41, less its share of expenses, if any,
in excess of $2.0 million.
(vi) CGAS will
contribute a 99.99% limited partnership
interest in Clinton LP to the
Partnership in exchange for 343,255
Common Units, 1,698,800
Subordinated Units (which will be issued to
and held by CGH) and a cash
payment of $34,806,771.14, less its
share of expenses, if any, in
excess of $2.0 million.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND
WARRANTIES OF ALL PARTIES.
Each of the parties to this
Agreement hereby represents and warrants
severally as to itself to each other party as follows:
(a) Formation and Good
Standing. That it is a corporation, limited
partnership or limited liability
company legally incorporated or formed,
duly organized, validly existing
and, if applicable, in good standing
under the laws of the state of its
formation and that it is duly qualified
to do business and is in good
standing as a foreign corporation,
partnership or other entity in each
jurisdiction where the character of
the properties owned or leased by
it or the nature of the businesses
transacted by it requires it to be
so qualified.
(b) Authority, Execution and
Enforceability. That it has full
corporate, partnership or other
power and authority to enter into this
Agreement and to perform its
obligations hereunder. That its execution,
delivery and performance of this
Agreement and the consummation of the
transactions contemplated hereby
have been duly authorized and approved by
it. That it has duly executed and
delivered this Agreement, and that this
Agreement constitutes its legal,
valid and binding obligation, enforceable
against it in accordance with its
terms (except as enforceability may be
limited by
5
<PAGE>
applicable bankruptcy, insolvency,
reorganization, moratorium or similar
laws affecting creditors' rights
generally or by the principles governing
the availability of equitable
remedies).
(c) No Conflicts. Neither its
execution, delivery nor performance of
this Agreement will:
(i) require the
approval or consent of any Governmental
Authority;
(ii) conflict with or
result in the breach or violation of any
term or provision of, or will
constitute a default under, or will
otherwise impair the good
standing, validity or effectiveness of,
any provision of its certificate
or articles of incorporation,
by-laws, partnership
agreement or other formation documents;
(iii) result in the
breach or violation by it of any material
term or provision of, or
constitute a default or give rise to any
right of termination,
cancellation or acceleration under any of the
terms, conditions or
provisions of any material agreement to which
it is bound or by which its
property or business is affected, except
for such defaults (or rights of
termination, cancellation or
acceleration) as to which
requisite waivers or consents are intended
to be obtained by it prior to
the Closing; or
(iv) violate any
federal, state or local or other governmental
law ordinance, or any order,
writ, injunction, decree, rule or






