Exhibit 10.2

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (this “Agreement”), effective as of July 6, 2006,
between Western Gas Resources, Inc., a Delaware corporation (the “Company”), and
John F. Chandler (the “Indemnitee”).

 

WHEREAS, it is essential to the Company to retain and attract as officers the
most capable persons available;

 

WHEREAS, Indemnitee is an officer of the Company;

 

WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against officers of public companies
in today’s environment;

 

WHEREAS, the Bylaws of the Company require the Company to indemnify and advance
expenses to its officers to the full extent permitted by law and the Indemnitee
has been serving and continues to serve as an officer of the Company in part in
reliance on such Bylaws;

 

WHEREAS, in recognition of Indemnitee’s need for substantial protection against
personal liability in order to enhance Indemnitee’s continued service to the
Company in an effective manner and Indemnitee’s reliance on the aforesaid
Bylaws, and in part to provide Indemnitee with specific contractual assurance
that the protection promised by such Bylaws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of such
Bylaws, or any change in the composition of the Company’s Board of Directors or
acquisition transaction relating to the Company), the Company wishes to provide
in this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the fullest extent (whether partial or complete) permitted by law
and as set forth in this Agreement, and, to the extent insurance is maintained,
for the continued coverage of Indemnitee under the Company’s directors’ and
officers’ liability insurance policies; and

 

WHEREAS, prior hereto, the Company and the Indemnitee had entered into an
indemnification agreement that the parties desire to restate.

 

NOW, THERFORE, in consideration of the premises and of Indemnitee continuing to
serve the Company directly or, at its request, another enterprise, and intending
to be legally bound hereby, the parties hereto agree as follows:

 

1.             Certain Definitions.

 

(a)           Change in Control:

 

(i)            The acquisition by any individual, entity or group (within the
meaning of Section 12(d) (3) or 13(d) (2) of the Exchange Act (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than thirty-five (35%) percent of either (A) the then
outstanding shares of common stock of the

 

--------------------------------------------------------------------------------

 

Company (the “Outstanding Common Stock”) or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Voting Securities”); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change in Control: (A) any acquisition by the Company,
(B) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or
(C) any acquisition by any entity pursuant to a transaction which complies with
Subsection 1(a)(iii); or

 

(ii)           Individuals who, as of the date hereof, constitute the Board of
Directors (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the
Incumbent Board; or

 

(iii)          Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, and (B) no person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 35% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the

 

--------------------------------------------------------------------------------

 

time of the execution of the initial agreement, or of the action of the
Incumbent Board providing for such Business Combination; or

 

(iv)          Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

 

(b)           Claim:  any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether instituted by the Company
or any other party, that Indemnitee in good faith, believes might lead to the
institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other, by reason of any action taken by
Indemnitee or of any inaction on Indemnitee’s part while acting as a director,
officer, employee or agent or by reason of the fact that Indemnitee is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, limited liability
company or other enterprise; in each case whether or not Indemnitee is acting or
serving in any such capacity at the time any liability or expense is incurred
for which indemnification or reimbursement can be provided under this Agreement;
provided that any such action, suit or proceeding which is brought by Indemnitee
against the Company or directors, officers, employees or agents of the Company
shall not be deemed a Claim, except (i) with respect to actions or proceedings
to establish or enforce a right to indemnify under this Agreement or any other
agreement or insurance policy or under the Company’s Certificate of
Incorporation or Bylaws now or hereafter in effect relating to Claims for
Indemnifiable Events (as defined below), (ii) in specific cases if the Board of
Directors has approved the initiation or bringing of such Claim, or (iii) as
otherwise required under the Delaware General Company Law (“DGCL”), regardless
of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be.

 

(c)           Costs:     all Expenses, judgments, fines, penalties and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of such Expenses, judgments, fines,
penalties or amounts paid in settlement) related to or arising as a result of
any Claim.

 

(d)           Expenses: shall include, without limitation, attorneys’ fees and
all other costs, expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, be a witness in or participate in any Claim
relating to any Indemnifiable Event.

 

(e)           Indemnifiable Event: any event or occurrence, act or omission to
act, related to the fact that Indemnitee is or was a director, officer,
employee, agent or fiduciary of the Company, or is or was serving at the request
of the Company as a director, officer, employee, trustee, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit plan, trust or
other enterprise, or by reason of anything done or not done by Indemnitee in any
such capacity, including, without limitation, under the Securities Act of 1933,
as amended (the “Securities Act”), the Securities Exchange Act of 1934, as

 

--------------------------------------------------------------------------------

 

amended (the “Exchange Act”) or other federal or state statutory law or
regulation, at common law or otherwise, and which may relate directly or
indirectly to the registration, purchase, sale or ownership of any securities of
the Company or to any fiduciary obligation owed with respect thereto.

 

(f)            Independent Legal Counsel: an attorney or firm of attorneys,
selected in accordance with the provisions of Section 3, who shall not have
otherwise performed services for the Company or Indemnitee within the last three
years (other than with respect to matters concerning the rights of Indemnitee
under this Agreement, or of other indemnitees under similar indemnity
agreements).

 

(g)           Potential Change in Control: shall be deemed to have occurred if
(i) the Company enters into an agreement, the consummation of which would result
in the occurrence of a Change in Control; (ii) any person (including the
Company) publicly announces an intention to take or to consider taking actions
which if consummated would constitute a Change in Control; or (iii) the Board
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.

 

(h)           Reviewing Party: any appropriate person or body consisting of a
member or members of the Company’s Board of Directors or any other person or
body appointed by the Board who is not a party to the particular Claim for which
Indemnitee is seeking indemnification, or Independent Legal Counsel.

 

(i)            Voting Securities: any securities of the Company which vote
generally in the election of directors.

 

2.             Basic Indemnification Arrangement.

 

(a)           In the event Indemnitee was, is or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify, defend and hold harmless
Indemnitee to the fullest extent permitted by law, even if such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company’s Certificate of Incorporation, Bylaws or by statute.  In the event of
any change after the date of this Agreement in any applicable law, statute or
rule which expands the right of a Delaware corporation to indemnify a member of
its Board of Directors or an officer, employee, controlling person, agent or
fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits afforded by such change.  In the event of
any change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its Board of Directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties’ rights and obligations
hereunder.

 

(b)           Notwithstanding the foregoing, the obligations of the Company
under Section 2(a) shall be subject to the condition that the Reviewing Party
shall not have determined (in a written opinion, in any case in which the
Independent

 

--------------------------------------------------------------------------------

 

Legal Counsel referred to in Section 4 hereof is involved) that Indemnitee would
not be permitted to be indemnified under applicable law.

 

(c)           If so requested by Indemnitee, the Company shall advance (within
two business days of such request) any and all Expenses to Indemnitee (an
“Expense Advance”).  Such obligation of the Company to make an Expense Advance
shall be subject to Indemnitee having made the undertaking in Section 8 and the
condition that, if, when and to the extent that the Reviewing Party determines
that Indemnitee would not be permitted to be so indemnified under applicable
law, the Company shall be entitled to be reimbursed by Indemnitee for all such
amounts theretofore paid; provided, however, that if Indemnitee has commenced or
thereafter commences legal proceedings in a court, of competent jurisdiction to
secure a determination that Indemnitee should be indemnified under applicable
law, any determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or lapsed).

 

(d)           If there has not been a Change in Control, the Reviewing Party
shall be selected by the Board of Directors, and if there has been such a Change
in Control, the Reviewing Party shall be the Independent Legal Counsel referred
to in Section 4 hereof.

 

(e)           Any indemnification under this Agreement, other than pursuant to
Section 2(c) above, shall be made no later than 60 days after receipt by the
Company of the written request of Indemnitee, accompanied by substantiating
documentation of the Costs incurred by or for Indemnitee and shall not require
evidence that Indemnitee has previously paid such costs.  If there has been no
determination by the Reviewing Party within 60 days after written request by
Indemnitee or if the Reviewing Party determines that Indemnitee substantively
would not be permitted to be indemnified in whole or in part under applicable
law, Indemnitee shall have the right to commence litigation in any court in the
States of Colorado or Delaware having subject matter jurisdiction thereof and in
which venue is proper seeking an initial determination by the court or
challenging any such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and the Company hereby consents
to service of process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive end binding on the Company and
Indemnitee.

 

(f)            Notwithstanding anything else contained herein, in no event shall
Indemnitee be entitled to indemnification under this Agreement for any Claims
that relate to liability: (i) under Section 16(b) of the Securities Exchange Act
of 1934, as amended; (ii) from conduct finally adjudged as violating federal or
state securities laws for “insider trading”; (iii) from conduct finally adjudged
as constituting active or deliberate dishonesty or willful fraud or illegality;
(iv) from conduct finally adjudged as producing an, unlawful personal benefit to
Indemnitee; (v) from any disgorgement of bonus or other incentive-based or
equity based compensation or profits from the sale of securities as the result
of a

 

--------------------------------------------------------------------------------

 

restatement pursuant to Section 304 of the Sarbanes-Oxley Act, or (vi) prior to
a Change of Control and except to enforce this Agreement, under any Claim
initiated by the Indemnitee unless the Board of Directors of the Company shall
have authorized or consented to such Claim.

 

3.             Contribution. If the indemnification provided for in Section 2
for any reason is held by a court of competent jurisdiction to be unavailable to
an Indemnitee in respect of any losses, claims, damages, expenses or liabilities
referred to therein, then the Company, in lieu of indemnifying Indemnitee
thereunder, shall contribute to the amount paid or payable by Indemnitee as a
result of such losses, claims, damages, expenses or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and Indemnitee, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and Indemnitee in connection with the action
or inaction which resulted in such losses, claims, damages, expenses or
liabilities, as well as any other relevant equitable considerations. In
connection with the registration of the Company’s securities, the relative
benefits received by the Company and Indemnitee shall be deemed to be in the
same respective proportions that the net proceeds from the offering (before
deducting expenses) received by the Company and the Indemnitee, in each case as
set forth in the table on the cover page of the applicable prospectus, bear to
the aggregate public offering price of the securities so offered.  The relative
fault of the Company and Indemnitee shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or Indemnitee and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

 

The Company and Indemnitee agree that it would not be just and equitable if
contribution pursuant to this Section 3 were determined by pro rata or per
capita allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph.  In connection with any registration of the Company’s securities, in
no event and notwithstanding the other provisions of this Section 3 shall an
Indemnitee be required to contribute any amount hereunder in excess of the
lesser of (i) that proportion of the total of such losses, claims, damages or
liabilities indemnified against equal to the proportion of the total securities
sold under such registration statement that is being sold by Indemnitee or
(ii) the proceeds received by Indemnitee from its sale of securities under such
registration statement. No person found guilty of fraudulent misrepresentation
(within the meaning of Section 10(f) of the Securities Act) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation.

 

4.             Change in Control. The Company agrees that if there is a Change
in Control of the Company then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and Expense Advances
under this Agreement or any other agreement or Company Bylaw now or hereafter
in; effect relating to Claims for Indemnifiable Events, the Company shall seek
legal advice only from Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld).
Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law.

 

--------------------------------------------------------------------------------

 

The Company agrees to pay the reasonable fees of the Independent Legal Counsel
referred to above and to fully indemnify such counsel against any and all
expenses (including attorneys’, fees, claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto.

 

5.             Establishment of Trust.

 

(a)           In the event of a Potential Change in Control, the Company shall:
(i) upon written request by Indemnitee, create a trust for the benefit of
Indemnitee, with the trustee chosen by Indemnitee; (ii) from time to time upon
written request of Indemnitee fund such trust, provide an irrevocable letter of
credit, or other collateral or other financial arrangement satisfactory to
Indemnitee, in an amount sufficient to satisfy any and all Expenses reasonably
anticipated at the time of each such request to be incurred in connection with
investigating, preparing for and defending any Claim relating to an
Indemnifiable Event, and any and all judgments, fines, penalties and settlement
amounts of any end all Claims relating to en Indemnifiable Event from time to
time actually paid or claimed, reasonably anticipated or proposed to be paid.

 

(b)           Notwithstanding anything else contained herein, in no event shall
the Company be required to deposit more than Five Hundred Thousand Dollars
($500,000) (whether in cash or an irrevocable letter of credit) in any trust
created hereunder in excess of amounts deposited in respect of reasonably
anticipated Expenses.

 

(c)           The amount or amounts to be deposited in the trust pursuant to the
foregoing funding obligation shall be determined by the Reviewing Party, in any
case in which the Independent Legal Counsel referred to above is involved.

 

(d)           The terms of the trust shall provide that upon a Change in Control
(i) the trust shall not be revoked or the principal thereof invaded, without the
written consent of the Indemnitee, (ii) the trustee shall advance, within two
business days of a request by the Indemnitee, any and all Expenses to the
Indemnitee (and the Indemnitee hereby agrees to reimburse the trust under the
circumstances under which the Indemnitee would be required to reimburse the
Company under Section 2(b) of this Agreement), (iii) the trust shall continue to
be funded by the Company in accordance with the funding obligation set forth
herein, (iv) the trustee shall promptly pay to Indemnitee all amounts for which
Indemnitee shall be entitled to indemnification pursuant to this Agreement or
otherwise, and (vi) all unexpended funds in such trust shall revert to the
Company upon a final determination by the Reviewing Party or a court of
competent jurisdiction, as the case may be, that Indemnitee has been fully
indemnified under the terms of this Agreement.

 

6.             Indemnification for Additional Expenses. The Company shall
indemnify Indemnitee against any and all Expenses (including attorneys’ fees)
and, if requested by Indemnitee, shall (within two business days of such
request) make an Expense Advance to Indemnitee, which are incurred by Indemnitee
in connection with any action brought by Indemnitee for (i) indemnification or
an Expense Advance by the Company under this Agreement or any other agreement or
Company Bylaw now or hereafter in effect relating to Claims for Indemnifiable
Events and/or (ii) recovery under any directors’ and officers’

 

--------------------------------------------------------------------------------

 

liability insurance policies maintained by the Company, regardless of’ whether
Indemnitee ultimately is determined to be entitled to such indemnification,
Expense Advance or insurance recovery, as the case may be, unless, as a part of
such action, a court of competent jurisdiction over such action determines that
the material assertions made by Indemnitee as a basis for such action were not
made in good faith or were frivolous.

 

7.             Partial Indemnity Etc. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties and amounts paid in
settlement of a Claim but not, however, for all of the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Moreover, notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.

 

8.             Undertaking by Indemnitee.  Indmenitee hereby undertakes to repay
to the Company any Expense Advance pursuant to Section 2 to the extent that it
is ultimately determined that Indemnitee is not entitled to indemnification in
accordance with the provisions of Section 2.

 

9.             Burden of Proof. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.

 

10.           No Presumptions. For purposes of this Agreement, the termination
of any claim, action, suit or proceeding, by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law. In addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not mat such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law shall be a defense to Indemnitee’s claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief.

 

11.           Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall
be in addition to any other rights Indemnitee may have under the Company’s
Bylaws or the DGCL or otherwise.

 

12.           Liability Insurance.

 

(a)           The Company hereby covenants and agrees that, so long as the
Indemnitee shall continue to serve as a member of its Board of Directors or an
officer, employee, controlling person, agent or fiduciary of the Company and
thereafter so long as the Indemnitee shall be subject to any possible Claim by
reason of the fact that the

 

--------------------------------------------------------------------------------

 

Indemnitee was a member of its Board of Directors or an officer, employee,
controlling person, agent or fiduciary of the Company, the Company shall
promptly maintain in full force and effect directors’ and officers’ liability
insurance in reasonable amounts from established and reputable insurers.

 

(b)           In all policies of directors’ and officers’ liability insurance,
the Indemnitee shall be named as an insured in such a manner as to provide the
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company’s directors, if the Indemnitee is a director; or of the
Company’s officers, if the Indemnitee is not a director of the Company but is an
officer; or of the Company’s key employees, if the Indemnitee is not a director
or officer of the Company.

 

(c)           If, at the time of the receipt by the Company of a notice of a
Claim pursuant to Section 2(a) hereof, the Company has liability insurance in
effect which may cover such Claim, the Company shall give prompt notice of the
commencement of such Claim to the insurers in accordance with the procedures set
forth in each of the Company’s policies.  The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable as a result of such action, suit, proceeding,
inquiry or investigation in accordance with the terms of such policies.

 

13.           Choice of Counsel.  If Indemnitee is not an officer of the
Company, Indemnitee, together with the other directors who are not officers of
the Company (the “Outside Directors”), shall be entitled to employ, and be
reimbursed for the fees and disbursements of, counsel separate from that chosen
by Indemnitees who are officers of the Company.  The principal counsel for
Outside Directors (“Principal Counsel”) shall be determined by majority vote of
the Outside Directors, and the Principal Counsel for the Indemnitees who are not
Outside Directors (“Separate Counsel”) shall be determined by majority vote of
such Indemnitees.  The obligation of the Company to reimburse Indemnitee for the
fees and disbursements of counsel hereunder shall not extend to the fees and
disbursements of any counsel employed by Indemnitee other than Principal Counsel
or Separate Counsel, as the case may be, provided that (i) Indemnitee shall have
the right to employ Indemnitee’s counsel in any such Claim at Indemnitee’s
expense and (ii) if (A) the employment of counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded with the advice of counsel that there is a substantial possibility
that Principal Counsel or Separate Counsel, as the case may be, will have a
conflict of interest in representing Indemnitee, or (C) the Company shall not
continue to retain Principal Counsel or Separate Counsel, as the case may be, to
defend such Claim, then the fees and expenses of Indemnitee’s counsel shall be
at the expense of the Company

 

14.           Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless, asserted by the timely filing of a
legal action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action such
shorter period shall govern.

 

--------------------------------------------------------------------------------

 

15.           Amendments, Etc. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.

 

16.           Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.

 

17.           Settlement of Claims.  The Company shall not be liable to
indemnify indemnitee under this Agreement for any amounts paid in settlement of
any Claim effected without the Company’s prior written consent.  The Company
shall not settle any Claim in any manner which would impose any penalty or
limitation on Indemnitee without Indemnitee’s prior written consent.  Neither
the Company nor Indemnitee will unreasonably withhold or delay their consent to
any proposed settlement.  The Company shall not be liable to indemnify
Indemnitee under this Agreement with regard to any judicial award if the Company
was not given a reasonable and timely opportunity, at its expense, to
participate in the defense of such action.

 

18.           No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Bylaw or otherwise) of the amounts otherwise
indemnifiable hereunder.

 

19.           Binding Effect, Etc.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Company, spouses, heirs, executors and personal
and legal representatives. This Agreement shall continue in effect regardless of
whether Indemnitee continues to serve as an officer or director of the Company
or of any other enterprise at the Company’s request.

 

20.           Severability. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable in any respect, and
the validity and enforceability of any such provision in every other respect and
of the remaining provisions hereof shall not be in any way impaired and shall
remain enforceable to the fullest extent permitted by law.

 

21.           Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.

 

[Signature Page Follows]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
July 6, 2006.

 

 

 

WESTERN GAS RESOURCES, INC.

 

 

 

 

 

By:

/s/ Peter A. Dea

 

 

Name:

Peter A. Dea

 

Title:

President and Chief Executive

 

Officer

 

 

 

 

 

INDEMNITEE:

 

 

 

 

 

By:

/s/ John F. Chandler

 

 

Name: John F. Chandler

 

--------------------------------------------------------------------------------