Document:

exv10w3

 

Exhibit 10.3

CONTRIBUTION AGREEMENT

EnerVest Management Partners, Ltd.

EnerVest Operating, L.L.C.

CGAS Exploration, Inc.

EV Investors, L.P.

EVCP GP, L.L.C.

EV Clinton 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.

[•], 2006

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	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	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE II. CONTRIBUTION BY OWNERS OF PROPERTIES LP	 	 	3	 
	 
	 	Section 2.1   Capitalization of the General Partner	 	 	3	 
	 
	 	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
	 	 	6	 
	 
	 	Section 3.4   Representations and Warranties of EVMP Regarding Ownership and Transfer of Interests in Properties GP and Properties LP
	 	 	7	 
	 
	 	Section 3.5   Representations and Warranties of EVOC Regarding Ownership and Transfer of Interests in Properties LP	 	 	8	 
	 
	 	Section 3.6   Representation and Warranties of EnCap Funds Regarding Ownership and Transfer of Interests in Properties LP
	 	 	8	 
	 
	 	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	 	 	9	 
	 
	 	Section 3.9   Representations and Warranties of the General Partner Regarding Interests Issued	 	 	9	 
	 
	 	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	 	 	1	 
	 
	 	Section 4.1   Consent to Admission as a Member or Partner	 	 	1	 
	 
	 	Section 4.2   Further Assurances	 	 	1	 
	 
	 	Section 4.3   Conveyance of the Clinton Properties.  CGAS agrees that prior to the Closing,
it will convey the Clinton Properties to Clinton LP pursuant to the Clinton Conveyance
	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE V. THE CLOSING	 	 	1	 

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	 	 	 	 	 	Page	 
	 
	 	Section 5.1   The Closing	 	 	1	 
	 
	 	Section 5.2  Deliveries at Closing by Sole Member of Properties GP, Limited Partners of Properties LP and Properties GP and CGAS
	 	 	1	 
	 
	 	Section 5.3   Deliveries at Closing by General Partner	 	 	2	 
	 
	 	Section 5.4   Deliveries at Closing by the Partnership	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE VI. MISCELLANEOUS	 	 	2	 
	 
	 	Section 6.1   Headings	 	 	2	 
	 
	 	Section 6.2   Notices	 	 	2	 
	 
	 	Section 6.3   Assignment	 	 	2	 
	 
	 	Section 6.4   Entire Agreement	 	 	2	 
	 
	 	Section 6.5   Counterparts	 	 	3	 
	 
	 	Section 6.6   Governing Law	 	 	3	 
	 
	 	Section 6.7   Severability	 	 	3	 
	 
	 	Section 6.8   No Survival of Representations and Warranties and Covenants	 	 	3	 
	 
	 	 	 	 	 	 
	Properties LP Subsidiaries
	 	Schedule 3.2	 
	Record Owners of Properties LP
	 	Schedule 3.3	 
	EnCap Ownership Percents
	 	Schedule 3.6	 

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CONTRIBUTION AGREEMENT

          This Contribution Agreement (“Agreement”), dated as of [•], 2006, is entered into by and
among EnerVest Management Partners, Ltd., a Texas limited partnership (“EVMP”), 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”), EVCP GP, L.L.C., a
Delaware limited liability company (“Clinton GP”), EV Clinton Properties, L.P., a Delaware limited
partnership (“Clinton LP”), 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 as a wholly owned subsidiary;

          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;

          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;

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          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; and

          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;

          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.

          “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.

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          “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:

	 	 	 
	Term	 	Section
	Closing
	 	5.1
	Agreement
	 	First Paragraph
	CGAS
	 	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
	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

     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.

     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.

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     (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].

     (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 and a cash payment of $[14,519,564.03].

     (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].

     (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].

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     (vi) CGAS will contribute a 99.99% limited partnership interest in Clinton LP
to the Partnership in exchange for 343,256 Common Units, 1,698,800 Subordinated
Units and a cash payment of $[34,806,771.14].

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 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

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     (iv) violate any federal, state or local or other governmental law ordinance,
or any order, writ, injunction, decree, rule or regulation of any Governmental
Authority applicable to it.

     Section 3.2 Representations of EVMP Regarding Properties LP, Properties GP, Clinton and Clinton GP.
EVMP hereby represents and warrants to the Partnership and General Partner at and as of the
Closing Date as follows:

     (a) Organization and Good Standing of Properties GP and Clinton GP. Each of Properties
GP and Clinton GP is a limited liability company legally formed, duly organized, validly
existing and in good standing under the laws of the state of Delaware, and has full
corporate power and authority and all necessary licenses and permits to own, lease and
operate the properties used in its business and to act as the general partner of Properties
LP or Clinton LP (as the case may be). Each of Properties GP and Clinton GP is duly
qualified to do business and is in good standing as a foreign limited liability company 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) Organization and Good Standing of Properties LP and Clinton LP. Properties LP and
Clinton LP each is a limited partnership legally formed, duly organized, validly existing
and in good standing under the laws of the state of Delaware, with full corporate power and
authority and all necessary licenses and permits to own, lease and operate the properties
used in its business and to engage in the businesses it is currently engaged in. Properties
LP and Clinton LP each is duly qualified to do business and is in good standing as a foreign
limited partnership 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.

     (c) Organization and Good Standing of Subsidiaries of Properties LP. Schedule
3.2 sets forth the name and state of incorporation or formation of each subsidiary of
Properties LP (each a “Subsidiary”). Each Subsidiary is a limited liability company, a
limited partnership or other entity legally formed, duly organized, validly existing and, if
applicable, in good standing under the laws of the state of its formation, with full power
and authority and all necessary licenses and permits to own, lease and operate the
properties used in its business and to engage in the businesses it is currently engaged in.
Each Subsidiary is duly qualified to do business and is in good standing as a foreign
limited partnership 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. All of the equity interests in each Subsidiary are owned, directly or
indirectly, by Properties LP.

     Section 3.3 Representations of EVMP Regarding Capitalization and Ownership of Properties GP,
Properties LP, Clinton GP and Clinton LP. EVMP represents to the Partnership as follows:

     (a) Capitalization of Properties GP and Clinton GP. The authorized capitalization of
Properties GP and Clinton GP consist of an unlimited number of

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membership interests. All of the outstanding membership interests of Properties GP and
Clinton GP are be validly issued, fully paid and nonassessable, and will be owned
beneficially and of record, in the case of Properties GP, by EVMP, and in the case of
Clinton GP, by a Subsidiary. Other than as contemplated by this Agreement, there are not
any outstanding agreements, warrants, options, calls, preemptive or other rights, or other
commitments of any nature which obligate Properties GP or Clinton GP to issue any additional
membership interests. Other than as provided in the limited liability company agreement for
Properties GP or Clinton GP, and under applicable law, there are no obligations on the part
of the owners of membership interests of Properties GP or Clinton GP to make any capital
contributions to Properties GP or Clinton GP or to loan funds to Properties GP or Clinton
GP.

     (b) Capitalization of Properties LP. The authorized capitalization of Properties LP
consists of a 0.01% general partnership interest and a 99.99% limited partnership interest,
each of which were validly issued. The entire general partnership interest of Properties LP
is owned beneficially and of record by Properties GP, and the record owners of Properties LP
are set forth on Schedule [3.3]. There are not any outstanding agreements,
warrants, options, calls, preemptive or other rights, or other commitments of any nature
which obligate Properties LP to issue additional general or limited partnership interests.
Other than as provided in the partnership agreement for Properties LP, and under applicable
law, there are no obligations on the part of the general or limited partner of Properties LP
to make any capital contributions to Properties LP or to loan funds to Properties LP.

     (c) Capitalization of Clinton. The authorized capitalization of Clinton LP consists of
a 0.01% general partnership interest and a 99.99% limited partnership interest, each of
which were validly issued. The entire general partnership interest in Clinton LP is owned
beneficially and of record by Clinton GP, and the record owner of the entire limited
partnership interest is CGAS. There are not any outstanding agreements, warrants, options,
calls, preemptive or other rights, or other commitments of any nature which obligate Clinton
LP to issue additional general or limited partnership interests. Other than as provided in
the partnership agreement for Clinton LP and under applicable law, there are no obligations
on the part of the general or limited partner of Clinton LP to make any capital
contributions to Clinton LP or to loan funds to Clinton LP.

     Section 3.4 Representations and Warranties of EVMP Regarding Ownership and Transfer of
Interests in Properties GP and Properties LP. EVMP hereby represents and warrants to the General
Partner and Partnership as follows:

     (a) Properties GP is the sole general partner of Properties LP. Properties GP is the
record and beneficial owner of a 0.01% general partner interest in Properties LP, free and
clear of any restrictions on transfer (other than any restrictions under applicable
organizational or formation documents, the Securities Act of 1933, as amended (“Securities
Act”) and state securities laws), security interests, options, warrants, purchase rights,
contracts, commitments, equities, liens, claims, encumbrances and demands (collectively,
“Claims”).

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     (b) EVMP is the record and beneficial owner of the entire membership interest in
Properties GP free and clear of any Claims. EVMP is not a party to any option, warrant,
purchase right, or other contract or commitment that could require EVMP to sell, transfer,
or otherwise dispose of any ownership interest in Properties GP (other than this Agreement
and the Investor’s Agreement). EVMP is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any ownership interest in
Properties GP. Upon transfer by EVMP of the membership interests in Properties GP to the
General Partner as contemplated by this Agreement, the General Partner will acquire the
membership interests in Properties GP, free and clear of any Claims created by EVMP.

     (c) EVMP is the record and beneficial owner of a 7.71% limited partnership interest in
Properties LP, free and clear of any Claims. EVMP is not a party to any option, warrant,
purchase right, or other contract or commitment that could require EVMP to sell, transfer,
or otherwise dispose of any ownership interest in Properties LP (other than this Agreement
and the Investor’s Agreement). EVMP is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any ownership interest in
Properties LP. Upon transfer by EVMP of the limited partnership interests in Properties LP
to the General Partner and the Partnership as contemplated by this Agreement, the General
Partner or the Partnership (as the case may be) will acquire the limited partnership
interests in Properties LP, free and clear of any Claims created by EVMP.

     Section 3.5 Representations and Warranties of EVOC Regarding Ownership and Transfer of
Interests in Properties LP.

          EVOC represents and warrants to the Partnership as follows:

     (a) EVOC is the record and beneficial owner of a 54.03% limited partnership interest in
Properties LP, free and clear of any Claims. EVOC is not a party to any option, warrant,
purchase right, or other contract or commitment that could require EVOC to sell, transfer,
or otherwise dispose of any ownership interest in Properties LP (other than this Agreement
and the Investor’s Agreement). EVOC is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any ownership interest in
Properties LP. Upon transfer by EVOC of the limited partnership interests in Properties LP
to the General Partner and the Partnership as contemplated by this Agreement, the General
Partner or the Partnership (as the case may be) will acquire the limited partnership
interests in Properties LP, free and clear of any Claims created by EVMP.

     Section 3.6 Representation and Warranties of EnCap Funds Regarding Ownership and Transfer of
Interests in Properties LP.

          The EnCap Funds represent and warrant to the General Partner and the Partnership as follows:

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     (a) Each EnCap Fund is the record and beneficial owner of a the limited partnership
interest in Properties LP set forth opposite its name on Schedule 3.6, free and
clear of any Claims. An EnCap Fund is not a party to any option, warrant, purchase right,
or other contract or commitment that could require the EnCap Fund to sell, transfer, or
otherwise dispose of any ownership interest in Properties LP (other than this Agreement and
the Investor’s Agreement). An EnCap Fund is not a party to any voting trust, proxy, or
other agreement or understanding with respect to the voting of any ownership interest in
Properties LP. Upon transfer by the EnCap Fund of the limited partnership interests in
Properties LP to the General Partner and the Partnership as contemplated by this Agreement,
the General Partner or the Partnership (as the case may be) will acquire the limited
partnership interests in Properties LP, free and clear of any Claims created by EVMP.

     Section 3.7 Representations and Warranties of CGAS Regarding Ownership and Transfer of
Interests in Clinton LP. CGAS hereby represents and warrants to the Partnership as follows:

     (a) CGAS is the record and beneficial owner of a 99.99% limited partnership interest in
Clinton LP, free and clear of any Claims. CGAS is not a party to any option, warrant,
purchase right, or other contract or commitment that could require CGAS to sell, transfer,
or otherwise dispose of any ownership interest in Clinton LP (other than this Agreement and
the Investor’s Agreement). CGAS is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any ownership interest in Clinton
LP. Upon transfer by CGAS of the limited partnership interests in Clinton LP to the
Partnership as contemplated by this Agreement, the Partnership will acquire the limited
partnership interests in Clinton LP, free and clear of any Claims created by CGAS.

     Section 3.8 Representations and Warranties of Investors Regarding Ownership and Transfer of
Interests in Properties LP.

     (a) Investors is the record and beneficial owner of a 5.00% limited partnership
interest in Properties LP, free and clear of any Claims. Investors is not a party to any
option, warrant, purchase right, or other contract or commitment that could require
Investors to sell, transfer, or otherwise dispose of any ownership interest in Properties LP
(other than this Agreement and the Investor’s Agreement). Investors is not a party to any
voting trust, proxy, or other agreement or understanding with respect to the voting of any
ownership interest in Properties LP. Upon transfer by Investors of the limited partnership
interests in Properties LP to the General Partner and the Partnership as contemplated by
this Agreement, the General Partner or the Partnership (as the case may be) will acquire the
limited partnership interests in Properties LP, free and clear of any Claims created by
Investors.

     Section 3.9 Representations and Warranties of the General Partner Regarding Interests
Issued. The General Partner hereby represents and warrants to each person acquiring a
limited partnership interest in the General Partner pursuant to this Agreement, as follows:

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     (a) When issued and paid for as contemplated by this Agreement, the limited partnership
interests in the General Partner will have been duly and validly when issued in compliance
with the provisions of this Agreement and the GP Partnership Agreement, will be validly
issued, fully paid and non-assessable. Such limited partnership interests are not subject
to any preemptive rights or rights of first refusal.

     Section 3.10 Representations and Warranties of the Partnership Regarding Common and
Subordinated Units. The Partnership hereby represents and warrants to each person acquiring
Common Units or Subordinated Units pursuant this Agreement, as follows:

     (a) When issued and paid for as contemplated by this Agreement, the Common Units and
Subordinated Units representing limited partnership interests in the Partnership will have
been duly and validly when issued in compliance with the provisions of this Agreement and
the GP Partnership Agreement, will be validly issued, fully paid and non-assessable. Such
Common Units and Subordinated Units are not subject to any preemptive rights or rights of
first refusal.

     Section 3.11 Representations and Warranties of EVMP, EVOC, the EnCap Funds and CGAS regarding
securities laws. Each of EVMP, EVOC, the EnCap Funds, Investors and CGAS, severally as to
itself, hereby represents to the General Partner and the Partnership, as follows:

     (a) It is acquiring its interest in the General Partner or Partnership under this
Agreement for its own account for investment and not with a view towards the resale,
transfer or distribution thereof, nor with any present intention of distributing the
interest. Investor understands that the interest in the General Partner, the Common Units,
the Subordinated Units and the Incentive Distribution Rights are “restricted securities” as
defined in Rule 144 under the Securities Act.

     (b) It has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of its investment in the General partner and the
Partnership as contemplated by this Agreement, and is able to bear the economic risk of such
investment for an indefinite period of time. It has been furnished access to such
information and documents as it has requested and has been afforded an opportunity to ask
questions of and receive answers from representatives of the General Partner and the
Partnership concerning the terms and conditions of this Agreement and an investment in the
General Partner and the Partnership.

     (c) It is an “accredited investor” as defined in Rule 501(a) promulgated under the
Securities Act and has such knowledge and experience in financial and business matters that
it is fully capable of evaluating the risks and merits of its investment under this
Agreement in the General Partner and the Partnership.

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ARTICLE IV.

COVENANTS

     Section 4.1 Consent to Admission as a Member or Partner. Each of EVMP, EVOC, CGAS, Investors,
EnCap Fund V and EnCap Fund V-B, with respect to the limited partner interest in Properties LP and
Clinton LP transferred by it, and the membership interests in Properties GP transferred by it,
hereby grants to the assignee of such interest the right to be admitted to Properties LP or Clinton
LP as a substitute limited partner, or to Properties GP as a substitute member. Each limited
partner of Properties LP and Clinton LP, and each member of Properties GP, hereby consents to such
admission as a substitute limited partner or member, as the case may be. The General Partner, with
respect to the membership interest in Properties GP and the limited partnership interest in
Properties LP transferred by it, hereby grants to the Partnership the right to be admitted to
Properties GP as a substitute member and to Properties GP as a substitute limited partner. Each
member of Properties GP and each partner of Properties LP hereby consent to such admission as a
substitute limited partner or member, as the case may be.

     Section 4.2 Further Assurances. Subject to the terms and conditions of this Agreement, each
of the parties hereto will use all reasonable efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all things necessary, proper or advisable, under applicable laws
and regulations to fulfill its obligations under this Agreement and to consummate and make
effective the transactions contemplated by this Agreement.

     Section 4.3 Conveyance of the Clinton Properties. CGAS agrees that prior to the Closing, it
will convey the Clinton Properties to Clinton LP pursuant to the Clinton Conveyance.

ARTICLE V.

THE CLOSING

     Section 5.1 The Closing. The closing of the transactions herein contemplated (“Closing”)
shall be held at the offices of Haynes and Boone, L.L.P., One Houston Center, Suite 2100, Houston,
Texas 77002 contemporaneously with the execution of this Agreement.

     Section 5.2 Deliveries at Closing by Sole Member of Properties GP, Limited Partners of
Properties LP and Properties GP and CGAS. At the Closing,

     (a) EVMP, as the sole member of Properties GP, shall deliver to the General Partner an
assignment of the entire membership interest in Properties GP;

     (b) Each of EVMP, Investors, EnCap Fund V and EnCap Fund V-B shall deliver to the
General Partner (i) an assignment of the limited partnership interest in Properties LP being
assigned to the General Partner by such party as contemplated by this Agreement (ii) a duly
executed counterpart of the GP Partnership Agreement; and

     (c) Each of EVMP, EVOC, Investors, CGAS, EnCap Fund V and EnCap Fund V-B shall deliver
to the Partnership an assignment of the limited partnership interest in Properties LP being
assigned to the Partnership by such party as contemplated by this Agreement.

1

 

     Section 5.3 Deliveries at Closing by General Partner. At the Closing,

     (a) The General Partner shall deliver to the Partnership an assignment of the entire
membership interests in Properties GP and the portion of the limited partnership interest in
Properties LP assigned to it pursuant to this Agreement; and

     (b) The General Partner shall deliver to each of EVMP, Investors, EnCap Fund V and
EnCap Fund V-B a counterpart, duly executed by it, of the GP Partnership Agreement.

     Section 5.4 Deliveries at Closing by the Partnership. At the Closing,

     (a) The Partnership shall deliver to each of EVMP, EVOC, Investors, CGAS, EnCap Fund V
and EnCap Fund V-B a duly executed copy of the MLP Partnership Agreement;

     (b) The Partnership shall deliver to each of EVMP, EVOC, Investors, CGAS, EnCap Fund V
and EnCap Fund V-B certificates representing the Common Units and Subordinated Units, if
any, to which such party is entitled under this Agreement;

     (c) The Partnership will wire transfer to each of EVMP, EVOC, CGAS, EnCap Fund V and
EnCap Fund V-B to the accounts specified by such party the cash payment to which such party
is entitled under this Agreement in immediately available funds.

ARTICLE VI.

MISCELLANEOUS

     Section 6.1 Headings. The section headings herein are for convenience of reference only, do
not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of
the provisions hereof.

     Section 6.2 Notices. Unless otherwise provided herein, all notices or other communications
required or permitted hereunder shall be given in writing and shall be hand delivered or sent by
registered or certified mail, postage prepaid, at the address opposite such party’s name on the
signature page hereof or such other address as shall be furnished in writing by such party in
accordance with this Section 6.2, and any such notice or communication shall be effective
and be deemed to have been given as of the date so delivered or received.

     Section 6.3 Assignment. This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and permitted
assigns, provided, however, that neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by a party hereto without the prior written consent of all
other parties.

     Section 6.4 Entire Agreement. This Agreement (including Schedules hereto) embody the entire
agreement and understanding of the parties with respect to the transactions contemplated hereby and
supersede all prior written or oral commitments, arrangements or

2

 

understandings with respect thereto. There are no restrictions, agreements, promises,
warranties, covenants or undertakings with respect to the transactions contemplated hereby other
than those expressly set forth herein or therein.

     Section 6.5 Counterparts. This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement and each of which shall be deemed an original.

     Section 6.6 Governing Law. This Agreement shall be governed by the laws of the State of Texas
(regardless of the laws that might be applicable under principles of conflicts of law) as to all
matters including, but not limited to matters of validity, construction, effect and performance.

     Section 6.7 Severability. If any one or more of the provisions of this Agreement shall be
held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the
remaining provisions of this Agreement shall not be affected thereby. To the extent permitted by
applicable law, each party waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.

     Section 6.8 No Survival of Representations and Warranties and Covenants. All representations,
warranties, covenants, agreements and obligations contained in this Agreement, or in any Schedule,
certificate, document or statement delivered pursuant hereto, shall terminate at the Closing and
shall not survive the Closing. No party hereto shall have any liability to any other party or any
other person by reason of this Agreement following the Closing, except for intentional and knowing
breach of a representation or warranty.

3

 

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as
of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	ENERVEST MANAGEMENT PARTNERS, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	EnerVest Management GP, L.C.,	 	 
	 

	 	 	 	a Texas limited liability company,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Mark A. Houser	 	 
	 

	 	 	 	Executive Vice President and	 	 
	 

	 	 	 	Chief Operating Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ENERVEST OPERATING, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Mark A. Houser	 	 
	 

	 	 	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	EV INVESTORS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	EnerVest Management Partners, Ltd.	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	EnerVest Management GP, L.C.,	 	 
	 

	 	 	 	a Texas limited liability company,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Mark A. Houser	 	 
	 

	 	 	 	Executive Vice President and	 	 
	 

	 	 	 	Chief Operating Officer	 	 
	 
	 	 	CGAS EXPLORATION, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

4

 

	 	 	 	 	 	 	 
	 	 	EV CLINTON PROPERTIES, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	EVCP, L.L.C.	 	 
	 

	 	 	A Delaware limited liability company,
	 	 
	 

	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	EVCP, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	 	 	ENCAP ENERGY CAPITAL FUND V, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EnCap Equity Fund V GP, L.P., a Texas limited

partnership, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EnCap Investments LP, a Delaware limited

partnership, its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EnCap Investments GP, L.L.C., a Delaware limited

liability company, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

5

 

	 	 	 	 	 	 	 	 	 
	 	 	ENCAP V-B ACQUISITIONS, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EnCap V-B Acquisitions GP, LLC, a

Delaware limited liability company, its

General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EnCap Energy Capital Fund V-B, L.P., a 

Texas limited partnership, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EnCap Equity Fund V GP, L.P., a Texas limited

partnership, its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EnCap Investment L.P., a Delaware limited

partnership, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EnCap Investment GP LLC, a Delaware

limited liability company, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	EV ENERGY PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	EV Energy GP, L.P.,	 	 
	 

	 	 	 	A Delaware limited partnership,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	EV Management, L.L.C.,	 	 
	 

	 	 	 	A Delaware limited liability company,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Michael E. Mercer	 	 
	 

	 	 	 	Senior Vice President and	 	 
	 

	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EV ENERGY GP, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	EV Management, L.L.C.,	 	 
	 

	 	 	 	a Delaware limited liability company	 	 
	 

	 	 	 	its General Partner	 	 

6

 

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Michael E. Mercer	 	 
	 

	 	 	 	Senior Vice President and	 	 
	 

	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EV MANAGEMENT, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Michael E. Mercer	 	 
	 

	 	 	 	Senior Vice President and	 	 
	 

	 	 	 	Chief Financial Officer	 	 

7exv10w4

 

Exhibit 10.4

OMNIBUS AGREEMENT

AMONG

ENERVEST MANAGEMENT PARTNERS, LTD

EV MANAGEMENT LLC

EV ENERGY GP, LP

EV ENERGY PARTNERS, LP

AND

EV PROPERTIES, L.P.

[ • ], 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	OMNIBUS AGREEMENT
	 	 	1	 
	RECITALS:
	 	 	1	 
	ARTICLE I. Definitions
	 	 	1	 
	Section 1.1 Definitions
	 	 	1	 
	ARTICLE II. Indemnification
	 	 	5	 
	Section 2.1 Environmental Indemnification
	 	 	5	 
	Section 2.2 Tax Indemnity
	 	 	5	 
	Section 2.3 Limitations Regarding Indemnification
	 	 	6	 
	Section 2.4 Indemnification Procedures
	 	 	6	 
	ARTICLE III. Reimbursement Obligations
	 	 	7	 
	Section 3.1 Reimbursement for Operating and General and Administrative Expenses 
	 	 	7	 
	Section 3.2 Reimbursement for Insurance 
	 	 	7	 
	Section 3.3 Limitations on Reimbursement 
	 	 	8	 
	ARTICLE IV. Miscellaneous
	 	 	8	 
	Section 4.1 Choice of Law; Submission to Jurisdiction
	 	 	8	 
	Section 4.2 Notice
	 	 	8	 
	Section 4.3 Entire Agreement
	 	 	9	 
	Section 4.4 Termination
	 	 	9	 
	Section 4.5 Effect of Waiver or Consent
	 	 	9	 
	Section 4.6 Amendment or Modification
	 	 	9	 
	Section 4.7 Assignment; Third Party Beneficiaries
	 	 	9	 
	Section 4.8 Counterparts
	 	 	9	 
	Section 4.9 Severability
	 	 	10	 
	Section 4.10 Gender, Parts, Articles and Sections
	 	 	10	 
	Section 4.11 Further Assurances
	 	 	10	 
	Section 4.12 Withholding or Granting of Consent
	 	 	10	 
	Section 4.13 Laws and Regulations
	 	 	10	 
	Section 4.14 Negation of Rights of Limited Partners, Assignees and Third Parties
	 	 	10	 
	Section 4.15 No Recourse Against Officers or Directors
	 	 	10	 

i

 

OMNIBUS AGREEMENT

     THIS OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of, the Closing Date
(as defined herein), and is by and among EnerVest Management Partners, Ltd., a Texas limited
partnership (“EnerVest”), EV Management LLC, a Delaware limited liability company (“EV Management”)
EV Energy GP, LP, a Delaware limited partnership (the “General Partner”), EV Energy Partners, LP, a
Delaware limited partnership (the “Partnership”), and EV Properties, L.P., a Delaware limited
partnership (“OLP”). The above-named entities are sometimes referred to in this Agreement each as a
“Party “ and collectively as the “Parties.”

RECITALS:

     The Parties desire by their execution of this Agreement to evidence their understanding, as
more fully set forth in Article II and Article III of this Agreement, with respect
to certain indemnification and reimbursement obligations of the Parties.

     In consideration of the premises and the covenants, conditions, and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I.

DEFINITIONS

     Section 1.1 Definitions.

     (a) Capitalized terms used herein but not defined shall have the meanings given them in the
MLP Agreement.

     (b) As used in this Agreement, the following terms shall have the respective meanings set
forth below:

     “Agreement” means this Omnibus Agreement, as it may be amended, modified or supplemented from
time to time in accordance with the terms hereof.

     “Cause” has the meaning ascribed thereto in the MLP Agreement.

     “Cap” has the meaning given such term in Section 2.3(a).

     “Change of Control” means, with respect to any Person (the “Applicable Person”), any of the
following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the Applicable Person’s assets to any other
Person, unless immediately following such sale, lease, exchange or other transfer such assets are
owned, directly or indirectly, by the Applicable Person; (ii) the dissolution or liquidation of the
Applicable Person; (iii) the consolidation or merger of the Applicable Person with or into another
Person pursuant to a transaction in which the outstanding Voting Securities of the Applicable
Person are changed into or exchanged for cash, securities or other property, other than any such
transaction where (a) the outstanding Voting Securities of the Applicable

1

 

Person are changed into or exchanged for Voting Securities of the surviving Person or its
parent and (b) the holders of the Voting Securities of the Applicable Person immediately prior to
such transaction own, directly or indirectly, not less than a majority of the outstanding Voting
Securities of the surviving Person or its parent immediately after such transaction; and (iv) a
“person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act) being or
becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of
more than 50% of all of the then outstanding Voting Securities of the Applicable Person, except in
a merger or consolidation which would not constitute a Change of Control under clause (iii) above.

     “Closing Date” means the date of the closing of the initial public offering of common units
representing limited partner interests in the MLP.

     “Common Unit” has the meaning given such term in the MLP Agreement.

     “Conflicts Committee” has the meaning given such term in the MLP Agreement.

     “Covered Environmental Losses” means all environmental losses, damages, liabilities, claims,
demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including,
without limitation, costs and expenses of any Environmental Activity, court costs and reasonable
attorney’s and experts’ fees) of any and every kind or character, by reason of or arising out of:

     (i) any violation or correction of violation, including without limitation performance
of any Environmental Activity, of Environmental Laws; or

     (ii) any event, omission or condition associated with ownership or operation of the MLP
Assets or (including, without limitation, the exposure to or presence of Hazardous
Substances on, under, about or migrating to or from the MLP Assets or the exposure to or
Release of Hazardous Substances arising out of operation of the MLP Assets or at non-MLP
Asset locations) including, without limitation, (A) the cost and expense of any
Environmental Activities, (B) the cost or expense of the preparation and implementation of
any closure, remedial or corrective action or other plans required or necessary under
Environmental Laws and (C) the cost and expense for any environmental or toxic tort
pre-trial, trial or appellate legal or litigation support work; provided, in the case of
clauses (A) and (B), such cost and expense shall not include the costs of and associated
with project management and soil and ground water monitoring; but only to the extent that
such violation complained of under clause (i), or such events or conditions included in
clause (ii), occurred before the Closing Date.

     “Environmental Activities” shall mean any investigation, study, assessment, evaluation,
sampling, testing, monitoring, containment, removal, disposal, closure, corrective action,
remediation (regardless of whether active or passive), natural attenuation, restoration,
bioremediation, response, repair, corrective measure, cleanup or abatement that is required or
necessary under any applicable Environmental Law, including, but not limited to, institutional or
engineering controls or participation in a governmental voluntary cleanup program to conduct
voluntary investigatory and remedial actions for the clean-up, removal or remediation of

2

 

Hazardous Substances that exceed actionable levels established pursuant to Environmental Laws,
or participation in a supplemental environmental project in partial or whole mitigation of a fine
or penalty.

     “Environmental Laws” means all federal, state, and local laws, statutes, rules, regulations,
orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally
enforceable requirements and rules of common law relating to (a) pollution or protection of the
environment or natural resources including, without limitation, the federal Comprehensive
Environmental Response, Compensation and Liability Act, the Superfund Amendments and
Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water
Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Oil Pollution Act of 1990,
the Hazardous Materials Transportation Act, the Marine Mammal Protection Act, the Endangered
Species Act, the National Environmental Policy Act and other environmental conservation and
protection laws, each as amended through the Closing Date, (b) any Release or threatened Release
of, or any exposure of any Person or property to, any Hazardous Substances and (c) the generation,
manufacture, processing, distribution, use, treatment, storage, transport or handling of any
Hazardous Substances.

     “Environmental Permit” means any permit, approval, identification number, license,
registration, consent, exemption, variance or other authorization required under or issued pursuant
to any applicable Environmental Law.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “G&A Expenses Limit” has the meaning given such term in Section 3.3.

     “General Partner” has the meaning given such term in the introduction to this Agreement.

     “Hazardous Substance” means (a) any substance that is designated, defined or classified as a
hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or hazardous
substance, or terms of similar meaning, or that is otherwise regulated under any Environmental Law,
including, without limitation, any hazardous substance as defined under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, (b) oil as defined in the Oil
Pollution Act of 1990, as amended, including oil, gasoline, natural gas, fuel oil, motor oil, waste
oil, diesel fuel, jet fuel and other refined petroleum hydrocarbons and petroleum products and (c)
radioactive materials, asbestos containing materials or polychlorinated biphenyls.

     “Indemnified Party” means either the Partnership Group or EnerVest, as the case may be, in
their capacity as the parties entitled to indemnification in accordance with Article II.

     “Indemnifying Party” means either the Partnership Group or EnerVest, as the case may be, in
their capacity as the parties from whom indemnification may be required in accordance with
Article II.

     “Losses” means any losses, damages, liabilities, claims, demands, causes of action, judgments,
settlements, fines, penalties, costs and expenses (including, without limitation, court

3

 

costs and reasonable attorney’s and experts’ fees) of any and every kind or character.

     “MLP” has the meaning given such term in the introduction to this Agreement.

     “MLP Agreement” means the Amended and Restated Agreement of Limited Partnership of the MLP,
dated as of the Closing Date, as such agreement is in effect on the Closing Date, to which
reference is hereby made for all purposes of this Agreement. An amendment or modification to the
MLP Agreement subsequent to the Closing Date shall be given effect for the purposes of this
Agreement only if it has received the approval of the Conflicts Committee that would be required,
if any, pursuant to Section 4.6 hereof if such amendment or modification were an amendment
or modification of this Agreement.

     “MLP Assets” means the oil and gas properties conveyed, contributed or otherwise transferred
or intended to be conveyed, contributed or otherwise transferred to any member of the Partnership
Group, or owned by any member of the Partnership Group, prior to or as of the Closing Date.

     “OLP” has the meaning given such term in the introduction to this Agreement.

     “Organizational Documents” means certificates of incorporation, by-laws, certificates of
formation, limited liability company operating agreements, certificates of limited partnership or
limited partnership agreements or other formation or governing documents of a particular entity.

     “Partnership Entities” means EV Management, the General Partner and each member of the
Partnership Group.

     “Partnership Group” means the MLP, the OLP and any Subsidiary of the MLP or the OLP.

     “Partnership Indemnitee” means any Person who is an Indemnitee (as defined in the Partnership
Agreement); provided, that the term “Partnership Indemnitee” shall exclude EnerVest and any
Affiliate of EnerVest (as defined in the Partnership Agreement) which is not a member of the
Partnership Group.

     “Party” or “Parties” have the meaning given such terms in the introduction to this Agreement.

     “Person” means an individual, corporation, partnership, joint venture, trust, limited
liability company, unincorporated organization or any other entity.

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

     “Subsidiary” has the meaning given such term in the MLP Agreement.

4

 

     “Voting Securities” means securities of any class of Person entitling the holders thereof to
vote in the election of, or to appoint, members of the board of directors or other similar
governing body of the Person.

ARTICLE II.

INDEMNIFICATION

     Section 2.1 Environmental Indemnification.

     (a) Subject to the provisions of Section 2.3 and Section 2.4, EnerVest shall
indemnify, defend and hold harmless the Partnership Group and the Partnership Indemnitees from and
against any Covered Environmental Losses suffered or incurred by the Partnership Group or any
Partnership Indemnitee relating to the MLP Assets for a period of one year from the Closing Date.

     (b) The Partnership Group shall indemnify, defend and hold harmless EnerVest, and its
Subsidiaries and Affiliates, other than any Subsidiary constituting part of the Partnership Group,
from and against any Covered Environmental Losses suffered or incurred by EnerVest, and its
Subsidiaries and Affiliates, other than any Subsidiary constituting part of the Partnership Group,
relating to the MLP Assets occurring after the Closing Date, except to the extent that the
Partnership Group is indemnified with respect to any of such Covered Environmental Losses under
Section 2.1(a).

     (c) In addition to, and not in limitation of, the indemnification provided under this
Article II, the Partnership Group shall indemnify, defend, and hold harmless EnerVest and
its Subsidiaries and Affiliates, other than any Subsidiary constituting part of the Partnership
Group, from and against any Losses suffered or incurred by EnerVest and its Subsidiaries and
Affiliates, other than any Subsidiary constituting part of the Partnership Group, by reason of or
arising out of events and conditions associated with the operation of the MLP Assets that occurs on
or after the Closing Date.

     Section 2.2 Additional Indemnity. Subject to the provisions of Section 2.4,
EnerVest shall indemnify, defend and hold harmless the Partnership Group and the Partnership
Indemnitees from and against any Losses suffered or incurred by the Partnership Group or any
Partnership Indemnitee by reason of or arising out of:

     (a) all federal, state and local income tax liabilities attributable to the ownership or
operation of the MLP Assets prior to the Closing Date, including any such income tax liabilities of
EnerVest and its Subsidiaries that may result from the consummation of the formation transactions
for the Partnership Group occurring on or prior to the Closing Date, but excluding any federal,
state and local income taxes reserved on the books of the Partnership Group as of the Closing Date;

     (b) for
a period of one year from the Closing Date, all liabilities, other than Covered Environmental Liabilities, relating to the operation
of the MLP Assets prior to the Closing Date that were not disclosed in the pro forma
balance sheet of the Partnership dated June 30, 2006, or
incurred in the ordinary course of
business thereafter;

5

 

     (c) all liabilities attributable to any assets or liabilities retained by EnerVest following
the Closing Date.

     Section 2.3 Limitations Regarding Indemnification.

     (a) The aggregate liability of EnerVest under Section 2.1 shall not exceed, in the aggregate, $1,500,000 (the “Cap”). No claims may be made against EnerVest
for indemnification pursuant to Section 2.1(a) unless the aggregate dollar amount of the
Losses suffered or incurred by the Partnership Group or Partnership Indemnitees exceed $200,000,
after such time EnerVest shall be liable for the full amount of such claims, subject to the
limitations of Section 2.3(a).

     (b) Notwithstanding anything herein to the contrary, in no event shall EnerVest have any
indemnification obligations under this Agreement for claims made as a result of additions to or
modifications of Environmental Laws promulgated after the Closing Date.

     Section 2.4 Indemnification Procedures.

     (a) The Indemnified Party agrees that within a reasonable period of time after it becomes
aware of facts giving rise to a claim for indemnification pursuant to this Article II, they
will provide notice thereof in writing to the Indemnifying Party specifying the nature of and
specific basis for such claim; provided, however, that the Indemnified Party shall not submit
claims more frequently than once a calendar quarter (or twice in the case of the last calendar
quarter prior to the expiration of the applicable indemnity coverage under this Agreement).

     (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 set forth in this Article II, 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 (which consent shall not be unreasonably
withheld, conditioned or delayed) of the Indemnified Party unless it includes a full release of the
Indemnified Party from such matter or issues, as the case may be.

     (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 set forth in Article
II, 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 names 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 2.4. In no event shall the obligation of
the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately

6

 

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 II; 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 reasonably
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 such
correlative insurance benefit shall be net of any incremental insurance premium that becomes due
and payable by the Indemnified Party as a result of such claim and (ii) all amounts recovered by
the Indemnified Party under contractual indemnities from third Persons.

ARTICLE III.

REIMBURSEMENT OBLIGATIONS

     Section 3.1 Reimbursement for Operating and General and Administrative Expenses.

     (a) EnerVest hereby agrees to continue to provide the Partnership Group with certain general
and administrative services, such as legal, accounting, treasury, insurance administration and
claims processing, risk management, health, safety and environmental, information technology, human
resources, credit, payroll, internal audit, taxes, engineering and senior management oversight.
These general and administrative services shall be substantially identical in nature and quality to
the services of such type previously provided by EnerVest in connection with their management and
operation of the MLP Assets during the one-year period prior to the Closing Date.

     (b) Subject to the provisions of Section 3.3, the Partnership Group hereby agrees to
reimburse EnerVest for all third-party expenses and expenditures it incurs or payments it makes on
behalf of the Partnership Group for these general and administrative services.

     (c) The General Partner shall be entitled to allocate any such out-of-pocket expenses and
expenditures made in accordance with the foregoing provision between the Partnership Group, on the
one hand, and EnerVest on the other hand on any reasonable basis.

     Section 3.2 Reimbursement for Insurance. The Partnership Group hereby agrees to reimburse
EnerVest and its Subsidiaries other than any Subsidiary constituting part of the Partnership Group
for all expenses it incurs or payments it makes on behalf of the Partnership Group and the
Partnership Indemnitees for (i) insurance coverage with respect to the MLP Assets, (ii) insurance
coverage with respect to claims related to fiduciary obligations of officers, directors and control
persons of the Partnership Group and (iii) insurance coverage with respect to claims under federal
and state securities laws
related to any of the Partnership Group and any of the officers, directors and control persons
thereof.

7

 

     Section 3.3 Limitations on Reimbursement.

     (a) The Partnership shall pay EnerVest a fee of $90,000 per month for the services described
herein, subject to adjustment as provided in this section (“Monthly Fee”). After December 31,
2006, the Monthly Fee shall be adjusted annually over the next two years by the percentage increase
or decrease in the Annual Overhead Adjustment Factor as published by the Council of Petroleum
Accountants Societies. In the event that the Partnership Group makes any acquisitions of assets or
businesses or the business of the Partnership Group otherwise expands before December 31, 2008,
then the Monthly Fee shall be appropriately increased or decreased in order to account for
adjustments in the nature and extent of the general and administrative services by EnerVest to the
Partnership Group, with any such increase or decrease in the Monthly Fee subject to the approval of
the Conflicts Committee. After December 31, 2008, EnerVest and the General Partner will determine
the amount of general and administrative expenses that will be properly allocated to the
Partnership in accordance with the terms of the Partnership Agreement which determination will be
subject to approval by the Conflicts Committee.

     (b) The obligation of the Partnership Group to reimburse EnerVest and its Subsidiaries
pursuant to Section 3.2 shall not be subject to any monetary limitation.

ARTICLE IV.

MISCELLANEOUS

     Section 4.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and
governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that
might refer the construction or interpretation of this Agreement to the laws of another state. Each
Party hereby submits to the jurisdiction of the state and federal courts in the State of Texas and
to venue in Texas.

     Section 4.2 Notice. All notices, requests or consents provided for or permitted to be given
pursuant to this Agreement must be in writing and must be given by depositing same in the United
States mail, addressed to the Person to be notified, postpaid, and registered or certified with
return receipt requested or by delivering such notice in person or by telecopier or telegram to
such Party. Notice given by personal delivery or mail shall be effective upon actual receipt.
Notice given by telegram or telecopier shall be effective upon actual receipt if received during
the recipient’s normal business hours, or at the beginning of the recipient’s next business day
after receipt if not received during the recipient’s normal business hours. All notices to be sent
to a Party pursuant to this Agreement shall be sent to or made at the address set forth below or at
such other address as such Party may stipulate to the other Parties in the manner provided in this
Section 4.2.

For notices to EnerVest:

1001 Fannin Street, Suite 800

Houston, Texas 77002

Attention: John B. Walker

8

 

For notices to Management, the General Partner, the MLP or the OLP:

1001 Fannin Street, Suite 900

Houston, Texas 77002

Attention: Michael E. Mercer

     Section 4.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties
relating to the matters contained herein, superseding all prior contracts or agreements, whether
oral or written, relating to the matters contained herein.

     Section 4.4 Termination. Notwithstanding any other provision of this Agreement, if the
General Partner is removed as general partner of the Partnership under circumstances where Cause
does not exist and Units held by the General Partner and its Affiliates are not voted in favor of
such removal, this Agreement, other than the provisions set forth in Article II hereof, may
immediately thereupon be terminated by EnerVest. The provisions of Article III of this
Agreement shall also terminate upon a Change of Control of EV Management, the General Partner or
the MLP.

     Section 4.5 Effect of Waiver or Consent. No waiver or consent, express or implied, by any
Party to or of any breach or default by any Person in the performance by such Person of its
obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other
breach or default in the performance by such Person of the same or any other obligations of such
Person hereunder. Failure on the part of a Party to complain of any act of any Person or to declare
any Person in default, irrespective of how long such failure continues, shall not constitute a
waiver by such Party of its rights hereunder until the applicable statute of limitations period has
run.

     Section 4.6 Amendment or Modification. This Agreement may be amended or modified from time to
time only by the written agreement of all the Parties; provided, however, that the MLP and the OLP
may not, without the prior approval of the Conflicts Committee, agree to any amendment or
modification of this Agreement that, in the reasonable discretion of the General Partner, will
adversely affect the holders of Common Units. Each such instrument shall be reduced to writing and
shall be designated on its face an “Amendment” or an “Addendum” to this Agreement.

     Section 4.7 Assignment; Third Party Beneficiaries.
No Party shall have the right to assign its rights or obligations under this Agreement without
the consent of the other Parties. Each of the Parties hereto specifically intends that EnerVest and
each entity comprising the Partnership Entities, as applicable, whether or not a Party to this
Agreement, shall be entitled to assert rights and remedies hereunder as third-party beneficiaries
hereto with respect to those provisions of this Agreement affording a right, benefit or privilege
to any such entity.

     Section 4.8 Counterparts. This Agreement may be executed in any number of counterparts with
the same effect as if all signatory Parties had signed the same document. All counterparts shall be
construed together and shall constitute one and the same instrument.

9

 

     Section 4.9 Severability. If any provision of this Agreement or the application thereof to
any Person or circumstance shall be held invalid or unenforceable to any extent, the remainder of
this Agreement and the application of such provision to other Persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.

     Section 4.10 Gender, Parts, Articles and Sections. Whenever the context requires, the gender
of all words used in this Agreement shall include the masculine, feminine and neuter, and the
number of all words shall include the singular and plural. All references to Article numbers and
Section numbers refer to Articles and Sections of this Agreement.

     Section 4.11 Further Assurances. In connection with this Agreement and all transactions
contemplated by this Agreement, each Party agrees to execute and deliver such additional documents
and instruments and to perform such additional acts as may be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.

     Section 4.12 Withholding or Granting of Consent. Each Party may, with respect to any consent
or approval that it is entitled to grant pursuant to this Agreement, grant or withhold such consent
or approval in its sole and uncontrolled discretion, with or without cause, and subject to such
conditions as it shall deem appropriate.

     Section 4.13 Laws and Regulations. Notwithstanding any provision of this Agreement to the
contrary, no Party shall be required to take any act, or fail to take any act, under this Agreement
if the effect thereof would be to cause such Party to be in violation of any applicable law,
statute, rule or regulation.

     Section 4.14 Negation of Rights of Limited Partners, Assignees and Third Parties.
The provisions of this Agreement are enforceable solely by the Parties, and no limited
partner, member, or assignee of EnerVest, the MLP, OLP or other Person shall have the right,
separate and apart from EnerVest, the MLP or OLP, to enforce any provision of this Agreement or to
compel any Party to comply with the terms of this Agreement.

     Section 4.15 No Recourse Against Officers or Directors. For the avoidance of doubt, the
provisions of this Agreement shall not give rise to any right of recourse against any officer or
director of EnerVest or any Partnership Entity.

[Signature Page on Following Page]

10

 

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

	 	 	 	 	 	 	 	 	 
	 	 	ENERVEST MANAGEMENT PARTNERS, LTD.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EnerVest Management GP, L.C.,	 	 
	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EV MANAGEMENT, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EV ENERGY GP, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EV Management, LLC,	 	 
	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EV ENERGY PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	EV Energy GP, L.P.,	 	 
	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	EV Management, LLC,	 	 
	 

	 	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EV PROPERTIES, L.P.	 	 

11

 

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	EV Properties GP, LLC,	 	 
	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	EV Energy Partners, L.P.,	 	 
	 

	 	 	 	 	 	its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	EV Energy GP, L.P.,	 	 
	 

	 	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	EV Management, LLC	 	 
	 

	 	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 

12

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