EXHIBIT 10.25

FORM OF INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of _________, 2007
by and among Abraxas General Partner, LLC, a Delaware limited liability company
(the “Company”), Abraxas Energy Partners, L.P., a Delaware limited partnership
(the “Partnership”), and ____________ (“Indemnitee”).

PRELIMINARY STATEMENT

WHEREAS, qualified persons are reluctant to serve organizations as directors or
officers or in other capacities unless they are provided with adequate
protection against risks of claims and actions against them arising out of their
service to and activities on behalf of such organizations;

WHEREAS, the parties hereto recognize that the legal risks and potential
liabilities, and the threat thereof, associated with lawsuits filed against
persons serving the Company, the Partnership and/or their respective
subsidiaries, and the resultant substantial time, expense and anxiety spent and
endured in defending lawsuits bears no reasonable relationship to the
compensation received by such persons, and thus poses a significant deterrent
and increased reluctance on the part of experienced and capable individuals to
serve the Company, the Partnership and/or their respective subsidiaries;

WHEREAS, the uncertainties related to obtaining adequate insurance and
indemnification have increased the difficulty of attracting and retaining such
persons;

WHEREAS, it is reasonable, prudent and necessary for the Company and the
Partnership to contractually agree to indemnify such persons to the fullest
extent permitted by law, so that such persons will serve or continue to serve
the Company, the Partnership and/or their respective subsidiaries free from
undue concern that they will not be adequately indemnified; and

WHEREAS, the Indemnitee is willing to serve, continue to serve and to take on
additional service for and on behalf of the Company and the Partnership on the
condition that the Indemnitee is indemnified according to the terms of this
Agreement;

NOW, THEREFORE, in consideration of the premises and the covenants herein, the
parties to this Agreement agree as follows:

 

Section 1.

Definitions and Definitional Provisions.

 

(a)

For purposes of this Agreement:

“Affiliate” has the meaning Exchange Act Rule 12b-2 specifies.

“Board” means the Board of Directors of the Company.

“Charter Documents” means, with respect to any Enterprise at any time, in each
case as amended, modified and supplemented at that time:

 

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(1)       the articles or certificate of formation, incorporation or
organization, or the equivalent organizational documents, of that entity;

(2)       the bylaws or limited liability company agreement or regulations,
limited partnership agreement, or the equivalent governing documents, of that
entity; and

(3)       each document setting forth the designation, amount and relative
rights, limitations and preferences of any class or series of that entity’s
capital stock or other equity interests.

“Claim” means any claim for damages or a declaratory, equitable or other
substantive remedy, or any other issue or matter, in any Proceeding.

“Company Claim” means any Claim brought by or in the right of the Company, the
Partnership or a Related Enterprise against Indemnitee.

“Court of Chancery” means the Court of Chancery of the State of Delaware.

“Disinterested Director” means a director of the Company who is not and was not
a party to the Proceeding, or any Claim therein, in respect of which
indemnification is sought by Indemnitee hereunder.

“Enterprise” means any business trust, corporation, joint venture, limited
liability company, partnership or other entity or enterprise, including any
operational division of any entity or any operational group of entities or
divisions of entities, or any employee benefit or welfare plan or related trust.

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

“Expenses” include all attorneys’ fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
all other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise participating
in, a Proceeding. Should any payments by the Company, the Partnership or a
Related Enterprise to or for the account of Indemnitee under this Agreement be
determined to be subject to any federal, state or local income or excise tax,
“Expenses” also will include such amounts as are necessary to place Indemnitee
in the same after-tax position, after giving effect to all applicable taxes,
Indemnitee would have been in had no such tax been determined to apply to those
payments.

“Functionary” of any Enterprise means any natural person who is a director,
officer, manager, administrator, employee, agent, representative or other
functionary of that Enterprise, including, in the case of any employee benefit
or welfare plan, any member of any committee administering that plan or any
individual to whom the duties of that committee are delegated.

 

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“Independent Counsel” means in the case of any determination under Section 6 a
law firm, or a member of a law firm that or who is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent:

(1)       the Company, the Partnership or any of their Affiliates or Indemnitee
in any matter material to any such Person; or

(2)       any other party to the Proceeding giving rise to a claim for
indemnification hereunder.

Notwithstanding the foregoing, the term “Independent Counsel” does not include
at any time any Person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or a Related Enterprise or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement.

“Partnership Entity”means any Related Enterprise of the Company or the
Partnership, other than an employee benefit or welfare plan or its related
trust, if any.

“Person” means any natural person, sole proprietorship, corporation,
partnership, limited liability company, business trust, unincorporated
organization or association, mutual company, joint stock company, joint venture
or any other entity of any kind having a separate legal status or any estate,
trust, union or employee organization or governmental authority.

“Proceeding” includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution procedure, investigation, inquiry or
other threatened, actual or completed proceeding, whether of a civil, criminal,
administrative, investigative or private nature and irrespective of the
initiator thereof, and any appeal in any such proceeding.

“Related Enterprise”means at any time any Enterprise:

(1)       50% or more of the outstanding capital stock or other ownership
interests of which, or the assets of which, the Company or the Partnership owns
or controls, or previously owned or controlled, directly or indirectly, at that
time;

(2)       50% or more of the outstanding voting power of the outstanding capital
stock or other ownership interests of which the Company or the Partnership owns
or controls, or previously owned or controlled, directly or indirectly, at that
time;

(3)       that is, or previously was, an Affiliate of the Company or the
Partnership which the Company or the Partnership controls, or previously
controlled, by ownership, contract or otherwise and whether alone or together
with another Person, directly or indirectly, at that time; or

 

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(4)       if that Enterprise is an employee benefit or welfare plan or related
trust, whose participants or beneficiaries are present or former employees of
the Company, the Partnership or any other Related Enterprise.

(b)       This Agreement uses the words “herein,” “hereof” and “hereunder” and
words of similar import to refer to this Agreement as a whole and not to any
provision of this Agreement, and the words “Section” and “Preliminary Statement”
refer to Sections of and the Preliminary Statement in this Agreement, unless it
otherwise specifies.

(c)       Whenever the context so requires, the singular number includes the
plural and vice versa, and a reference to one gender includes the other gender
and the neuter.

(d)       The word “including,” and, with correlative meaning, the word
“include,” means including, without limiting the generality of any description
preceding that word, and the words “shall” and “will” are used interchangeably
and have the same meaning.

(e)       The language this Agreement uses will be deemed to be the language the
parties hereto have chosen to express their mutual intent, and no rule of strict
construction will be applied against either party hereto.

Section 2.         Services by Indemnitee. Indemnitee will serve, or continue to
serve, as a Functionary of the Company or the Partnership and, as Indemnitee,
the Company and the Partnership may agree, as a Functionary of one or more
Related Enterprises. Indemnitee may at any time and for any reason resign from
any such service, subject to any other contractual obligation or any obligation
applicable law imposes. This Agreement is not and is not to be construed as an
employment contract by the Company or any other Related Enterprise with
Indemnitee or as otherwise affecting Indemnitee’s status, if any, as an employee
of the Company, the Partnership or any Related Enterprise.

 

Section 3.

Indemnification.

 

(a)

Subject to Section 12, if and whenever:

(1)       Indemnitee was or is, or is threatened to be made, a party to any
Proceeding by reason of: (A) the fact that Indemnitee serves or served as (i) a
Functionary of the Company or the Partnership or, at the request of the Company
or the Partnership, (ii) a Functionary of a Related Enterprise; or (B) the
actual or alleged service or conduct of Indemnitee in Indemnitee’s capacity as
that Functionary, including any act actually or allegedly done or not done by
Indemnitee;

(2)       Indemnitee (A) engaged in the service or conduct at issue in that
Proceeding in good faith and in a manner Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company or the Partnership and, in
the event that Proceeding was or is a criminal action or proceeding involving
Indemnitee’s conduct, (B) had no reasonable cause to believe that that conduct
was unlawful,

 

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the Company and the Partnership will, or will cause another Partnership Entity
to, indemnify Indemnitee against, and hold Indemnitee harmless from and in
respect of:

(1)       in the case of each Claim in that Proceeding, other than a Company
Claim, all liabilities and losses, including the amounts of all judgments,
penalties and fines, including excise taxes, and amounts paid in settlement,
Indemnitee has suffered or will suffer, and all Expenses Indemnitee reasonably
has incurred or will incur, as a result of or in connection with that Claim; and

(2)       in the case of each Company Claim in that Proceeding, all Expenses
Indemnitee reasonably has incurred or will incur as a result of or in connection
with that Company Claim; provided, however, that the Company and the Partnership
will not have any obligation under this clause (2) to, or to cause another
Partnership Entity to, indemnify Indemnitee against, or hold Indemnitee harmless
from or in respect of, any Company Claim as to which Indemnitee was or is
adjudged to be liable to the Company or any Related Enterprise unless, and only
to the extent that, the Court of Chancery or the court in which that Company
Claim was or is brought determines on application that, despite the adjudication
of liability, but in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnity for such of those Expenses as the
Court of Chancery or that other court shall deem proper.

(b)       Subject to Section 12, if and whenever Indemnitee was or is, or is
threatened to be made, a party to any Proceeding of any type to which
Section 3(a) refers and has been successful, on the merits or otherwise, in
defense of that Proceeding, or in defense of any Claim therein, the Company and
the Partnership will, or will cause another Partnership Entity to, indemnify
Indemnitee against, and hold Indemnitee harmless from and in respect of, all
Expenses Indemnitee reasonably has incurred in connection therewith. The rights
of Indemnitee under this Section 3(b) are in addition to, and independent of,
the rights of Indemnitee under Section 3(a) or Section 3(c).

(c)       Subject to Section 12, if and whenever Indemnitee was, or reasonably
could have been expected to have been, or is, or reasonably could be expected to
be, by reason of the knowledge of facts Indemnitee actually or allegedly has
obtained in the course of his service as (1) a Functionary of the Company or the
Partnership or, at the request of the Company or the Partnership, (2) a
Functionary of a Related Enterprise, a witness in or a deponent in connection
with any Proceeding to which Indemnitee was or is not a party, the Company and
the Partnership will, or will cause another Partnership Entity to, indemnify
Indemnitee against, and hold Indemnitee harmless from and in respect of, all
Expenses Indemnitee reasonably has incurred or will incur in connection
therewith. The rights of Indemnitee under this Section 3(c) are in addition to,
and independent of, the rights of Indemnitee under Section 3(a) or Section 3(b).

 

Section 4.

Advancement of Expenses.

(a)       If and whenever Indemnitee is, or is threatened to be made, a party to
any Proceeding that may give rise to a right of Indemnitee to indemnification
under Section 3(a), the Company and the Partnership will, or will cause another
Partnership

 

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Entity to, advance all Expenses reasonably incurred by or on behalf of
Indemnitee in connection with that Proceeding within five (5) days after the
Company or the Partnership receives a statement or statements from Indemnitee
requesting the advance or advances from time to time, whether prior to or after
final disposition of that Proceeding. Each such statement must reasonably
evidence the Expenses incurred by or on behalf of Indemnitee and include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay
any Expenses advanced if it ultimately is determined that Indemnitee is not
entitled to be indemnified by the Company and the Partnership under Section 3(a)
against those Expenses. The Company and the Partnership will accept any such
undertaking without reference to the financial ability of Indemnitee to make
repayment. If the Company, the Partnership or another Partnership Entity
advances Expenses in connection with any Claim as to which Indemnitee has
requested or may request indemnification under Section 3(a) and a determination
is made under Section 6(c) that Indemnitee is not entitled to that
indemnification, Indemnitee will not be required to reimburse the Company, the
Partnership or that other Partnership Entity for those advances until the 180th
day following the date of that determination; provided, however, that if
Indemnitee timely commences and thereafter prosecutes in good faith a judicial
proceeding or arbitration under Section 8(a) or otherwise to obtain that
indemnification, Indemnitee will not be required to reimburse the Company, the
Partnership or that other Partnership Entity for those Expenses until a
determination in that proceeding or arbitration that Indemnitee is not entitled
to that indemnification has become final and nonappealable.

(b)       The Company, the Partnership or another Partnership Entity may advance
Expenses under Section 4(a) to Indemnitee or, at the Company’s and the
Partnership’s option, directly to the Person to which those Expenses are owed,
and Indemnitee hereby consents to any such direct payment, to Indemnitee’s legal
counsel or any other Person.

(c)       For the avoidance of doubt, the parties agree that the provisions of
this Section 4 shall be applicable during the pendancy of any determination of
the right of the Indemnitee to indemnification under Section 3(a), including the
pendancy of any court or arbitration proceeding contemplated by Section 8.

 

Section 5.

Notification and Defense of Claims.

(a)       If Indemnitee receives notice, otherwise than from the Company or the
Partnership, that Indemnitee is or will be made, or is threatened to be made, a
party to any Proceeding in respect of which Indemnitee intends to seek
indemnification hereunder, Indemnitee must promptly notify the Company and the
Partnership in writing of the nature and, to Indemnitee’s knowledge, status of
that Proceeding. If this Section 5(a) requires Indemnitee to give such a notice,
but Indemnitee fails to do so, that failure will not relieve the Company or the
Partnership from, or otherwise affect, the obligations the Company or the
Partnership may have to indemnify Indemnitee under this Agreement, unless the
Company and the Partnership can establish that the failure has resulted in
actual prejudice to the Company and the Partnership.

 

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(b)       Except as this Section 5(b) otherwise provides below, in the case of
any Proceeding in respect of which Indemnitee seeks indemnification hereunder:

(1)       the Company, the Partnership any Related Enterprise that also may be
obligated to indemnify Indemnitee in respect of that Proceeding will be entitled
to participate at its own expense in that Proceeding;

(2)       the Company, the Partnership or that Related Enterprise, or either of
them, will be entitled to assume the defense of all Claims, other than
(i) Company Claims, if any, and (ii) other Claims, if any, as to which
Indemnitee shall reasonably reach the conclusion described in clause (C) of the
next sentence below, in that Proceeding against Indemnitee by prompt written
notice of that election to Indemnitee; and

(3)       if clause (2) above entitles the Company or that Related Enterprise to
assume the defense of any of those Claims and it delivers to Indemnitee notice
of that assumption under clause (2), the Company and the Partnership will not be
liable to Indemnitee hereunder for any fees or expenses of legal counsel for
Indemnitee which Indemnitee incurs after Indemnitee receives that notice.

Indemnitee will have the right to employ Indemnitee’s own legal counsel in that
Proceeding, but, as clause (3) of the preceding sentence provides, will bear the
fees and expenses of that counsel unless:

(A)      the Company or the Partnership has authorized Indemnitee in writing to
retain that counsel;

(B)      the Company or the Partnership shall not within a reasonable period of
time actually have employed counsel to assume the defense of those Claims; or

(C)      Indemnitee shall have (i) reasonably concluded that a conflict of
interest may exist between Indemnitee, on the one hand, and the Company or the
Partnership, on the other hand, as to the defense of one or more of those Claims
and (ii) communicated that conclusion to the Company and the Partnership in
writing.

(c)       The Company and the Partnership will not be obligated hereunder to, or
to cause another Partnership Entity to, indemnify Indemnitee against or hold
Indemnitee harmless from and in respect of any amounts paid, or agreed to be
paid, by Indemnitee in settlement of any Claim against Indemnitee which
Indemnitee effects without the Company’s or the Partnership’s prior written
consent. The Company and the Partnership will not settle any Claim against
Indemnitee in any manner that would impose any penalty or limitation on
Indemnitee without Indemnitee’s prior written consent. Neither the Company, the
Partnership nor Indemnitee will unreasonably delay or withhold consent to any
such settlement the other party proposes to effect.

 

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Section 6.

Procedure for Determination of Entitlement to Indemnification.

(a)       To obtain indemnification under this Agreement, Indemnitee must submit
to the Company and the Partnership a written request therefore which includes,
or is accompanied by, such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to that indemnification. Indemnitee may
request indemnification hereunder at any time and from time to time as
Indemnitee deems appropriate in Indemnitee’s sole discretion. In the case of any
request for indemnification under Section 3(a) as to any Claim which is pending
or threatened at the time Indemnitee delivers that request to the Company and
the Partnership and would not be resolved with finality, whether by judgment,
order, settlement or otherwise, on payment of the indemnification requested, the
Company and the Partnership may defer the determination under Section 6(c) of
Indemnitee’s entitlement to that indemnification to a date that is no later than
45 days after the effective date of that final resolution if the Board concludes
in good faith that an earlier determination would be materially prejudicial to
the Company, the Partnership or a Related Enterprise.

(b)       On written request by Indemnitee under Section 6(a) for
indemnification under Section 3(a), the determination of Indemnitee’s
entitlement to that indemnification will be made:

(1)       if Indemnitee will be a director or officer of the Company or the
Partnership at the time that determination is made, under Section 6(c) in each
case; or

(2)       if Indemnitee will not be a director or officer of the Company or the
Partnership at the time that determination is made, under Section 6(c) in any
case, if so requested in writing by Indemnitee or so directed by the Board, or,
in the absence of that request and direction, as the Board shall duly authorize
or direct.

(c)       Each determination of Indemnitee’s entitlement to indemnification
under Section 3(a) to which this Section 6(c) applies will be made as follows:

(1)       by a majority vote of the Disinterested Directors, even though less
than a quorum; or

(2)       by a committee of Disinterested Directors designated by a majority
vote of the Disinterested Directors, even though less than a quorum; or

(3)       if (A) there are no Disinterested Directors or (B) a majority vote of
the Disinterested Directors so directs, by an Independent Counsel in a written
opinion to the Board, a copy of which the Company and the Partnership will
deliver to Indemnitee; provided, however, that if Indemnitee has so requested in
Indemnitee’s request for indemnification, an Independent Counsel will make that

 

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determination in a written opinion to the Board, a copy of which the Company and
the Partnership will deliver to Indemnitee.

(d)       If it is determined that Indemnitee is entitled to indemnification
under Section 3(a), the Company and the Partnership will, or will cause another
Partnership Entity to, subject to the provisions of Section 6(f):

(1)       within 10 days after that determination pay to Indemnitee all amounts
(A) theretofore incurred by or on behalf of Indemnitee in respect of which
Indemnitee is entitled to that indemnification by reason of that determination
and (B) requested from the Company or the Partnership in writing by Indemnitee;
and

(2)       thereafter on written request by Indemnitee, pay to Indemnitee within
10 days after that request such additional amounts theretofore incurred by or on
behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination.

Indemnitee will cooperate with the person, persons or entity making the
determination under Section 6(c) with respect to Indemnitee’s entitlement to
indemnification under Section 3(a), including providing to such person, persons
or entity, on reasonable advance request, any documentation or information that
is:

 

(1)

not privileged or otherwise protected from disclosure;

 

(2)

reasonably available to Indemnitee; and

 

(3)

reasonably necessary to that determination.

(e)       If an Independent Counsel is to make a determination under
Section 6(c) of entitlement to indemnification under Section 3(a), it will be
selected by the Company and the Partnership with the consent of the Indemnitee
(which consent shall not be unreasonably withheld). The Company and the
Partnership will pay any and all reasonable fees and expenses the Independent
Counsel incurs in connection with acting under Section 6(c), and the Company and
the Partnership will pay all reasonable fees and expenses incident to the
procedures this Section 6(e) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If Indemnitee becomes entitled to,
and does, initiate any judicial proceeding or arbitration under Section 8, the
Company and the Partnership will terminate its engagement of the person or firm
acting as Independent Counsel, whereupon that person or firm will be, subject to
the applicable standards of professional conduct then prevailing, relieved of
any further responsibility in the capacity of Independent Counsel.

(f)        The amount of any indemnification against Expenses to which
Indemnitee becomes entitled under any provision hereof, including Section 3(a),
will be determined subject to the provisions of this Section 6(f). Indemnitee
will have the burden of showing that Indemnitee actually has incurred the
Expenses for which Indemnitee requests

 

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indemnification. If the Company, the Partnership or a Partnership Entity has
made any advance in respect of any Expense incurred by Indemnitee without
objecting in writing to Indemnitee at the time of the advance to the
reasonableness thereof, the incurrence of that Expense by Indemnitee will be
deemed for all purposes hereof to have been reasonable. In the case of any
Expense as to which such an objection has been made, or any Expense for which no
advance has been made, the incurrence of that Expense will be presumed to have
been reasonable, and the Company and the Partnership will have the burden of
proof to overcome that presumption.

Subject to the provisions of the preceding paragraph, the advancement of
Expenses to Indemnitee under Section 4 will not, of itself, create a presumption
that the Proceeding or Claim therein to which those Expenses relate is a
Proceeding or Claim of the type to which Section 3(a) applies. If the Company or
the Partnership, prior to or in connection with the making any advance of
Expenses under Section 4 to or for the benefit of Indemnitee, notifies
Indemnitee in writing that the Proceeding or any Claim therein is or reasonably
could be expected to be in whole or in any specified part not one to which
Section 3(a) applies, Indemnitee will, to the extent those Expenses are
reasonably allocable among the claims, issues and matters involved in that
Proceeding, cause Indemnitee’s counsel and other service providers to effect
that allocation.

 

Section 7.

Presumptions and Effect of Certain Proceedings.

(a)       In making a determination under Section 6(c) with respect to
entitlement to indemnification under Section 3(a), the person, persons or entity
making that determination must presume that Indemnitee is entitled to that
indemnification if Indemnitee has submitted a request for indemnification in
accordance with Section 6(a), and the Company and the Partnership will have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that presumption.

(b)       The termination of any Proceeding or of any Claim therein, by
judgment, order, settlement or conviction, or on a plea of nolo contendere or
its equivalent, will not, except as this Agreement otherwise expressly provides,
of itself adversely affect the right of Indemnitee to indemnification hereunder
or, in the case of any determination under Section 6(c) of Indemnitee’s
entitlement to indemnification under Section 3(a), create a presumption that
Indemnitee did not act in good faith and in a manner Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or the
Partnership or, with respect to any criminal action or proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful.

(c)       Any service of Indemnitee as a Functionary of the Company, the
Partnership or any Related Enterprise which imposes duties on, or involves
services by, Indemnitee with respect to any Related Enterprise that is an
employee benefit or welfare plan or related trust, if any, or the participants
or beneficiaries of that plan or trust will be deemed for all purposes hereof as
service at the request of the Company and the Partnership. Any action Indemnitee
takes or omits to take in connection with any such plan or trust will, if taken
or omitted in good faith by Indemnitee and in a manner Indemnitee reasonably
believed to be in the interest of the participants in or beneficiaries

 

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of that plan or trust, be deemed to have been taken or omitted in a manner “not
opposed to the best interests of the Company and the Partnership” for all
purposes hereof.

Service by a person as an agent or representative of an Enterprise means service
on behalf of that Enterprise in its relations with persons and entities other
than the Affiliates and Functionaries of that Enterprise.

(d)       For purposes of any determination hereunder as to whether Indemnitee
has performed services or engaged in conduct on behalf of any Enterprise in good
faith, Indemnitee will be deemed to have acted in good faith if Indemnitee acted
in reliance on the records of the Enterprise or on information, opinions,
reports or statements, including financial statements and other financial
information, concerning the Enterprise or any other Person which were prepared
or supplied to Indemnitee by:

 

(1)

one or more of the officers or employees of the Enterprise;

(2)       appraisers, engineers, investment bankers, legal counsel or other
Persons as to matters Indemnitee reasonably believed were within the
professional or expert competence of those Persons; and

(3)       any committee of the board of directors or equivalent managing body of
the Enterprise of which Indemnitee is or was, at the relevant time, not a
member; provided, however, that if Indemnitee has actual knowledge as to any
matter that makes any such reliance unwarranted as to that matter, this
Section 7(d) will not entitle Indemnitee to any presumption that Indemnitee
acted in good faith respecting that matter.

(e)       For purposes of any determination hereunder as to whether Indemnitee
is entitled to indemnification under Section 3(a), neither the knowledge nor the
conduct of any other Functionary of the Company, the Partnership or any Related
Enterprise, other than Indemnitee, shall be imputed to Indemnitee, but
Indemnitee will be irrebutably presumed to have read and understood the
Company’s and the Partnership’s code of business conduct and ethics and either
for purposes of any determination under the Charter Documents or this Agreement
as to whether Indemnitee has performed services or engaged in conduct on behalf
of any Enterprise in good faith.

(f)        Indemnitee will be deemed a party to a Proceeding for all purposes
hereof if Indemnitee is named as a defendant or respondent in a complaint or
petition for relief in that Proceeding, regardless of whether Indemnitee ever is
served with process or makes an appearance in that Proceeding.

(g)       If Indemnitee serves or served as a Functionary of a Related
Enterprise, that service will be deemed to be “at the request of the Company and
the Partnership” for all purposes hereof notwithstanding that the request is not
evidenced by a writing or shown to have been made orally. In the event the
Company or the Partnership were to extend the rights of indemnification and
advancement of Expenses hereunder to Indemnitee’s serving at the request of the
Company or the Partnership as a Functionary of

 

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any Enterprise other than the Company, the Partnership or a Related Enterprise,
Indemnitee must show that the request was made by the Board or at its
authorization.

 

Section 8.

Remedies of Indemnitee in Certain Cases.

(a)       If Indemnitee makes a written request in compliance with Section 6(a)
for indemnification under Section 3(a) and either:

(1)       no determination as to the entitlement of Indemnitee to that
indemnification is made before the last to occur of (A) the close of business on
the date, if any, the Company or the Partnership has specified under
Section 6(a) as the outside date for that determination or (B) the elapse of the
45-day period beginning the day after the date the Company or the Partnership
receives that request; or

(2)       a determination is made under Section 6(c) that Indemnitee is not
entitled to that indemnification in whole or in any part in respect of any Claim
to which that request related,

Indemnitee will be entitled to an adjudication from the Court of Chancery of
Indemnitee’s entitlement to that indemnification. Alternatively, Indemnitee, at
Indemnitee’s option, may seek an award in arbitration to be conducted by a
single arbitrator in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. In the case of any determination under
Section 6(c) that is adverse to Indemnitee, Indemnitee must commence any such
judicial proceeding or arbitration within 180 days following the date on which
Indemnitee first has the right to commence that proceeding under this
Section 8(a) or Indemnitee will be bound by that determination for all purposes
of this Agreement.

(b)       If a determination has been made under Section 6 that Indemnitee is
not entitled to indemnification hereunder, any judicial proceeding or
arbitration commenced under this Section 8 will be conducted in all respects as
a de novo trial or arbitration on the merits, and Indemnitee will not be
prejudiced by reason of that adverse determination. In any judicial proceeding
or arbitration commenced under this Section 8, the Company and the Partnership
will have the burden of proving that Indemnitee is not entitled to
indemnification hereunder.

(c)       If a determination has been made under Section 6 that Indemnitee is
entitled to indemnification hereunder, the Company and the Partnership will be
bound by that determination in any judicial proceeding or arbitration Indemnitee
thereafter commences under this Section 8 or otherwise, absent:

(1)       a misstatement by Indemnitee of a material fact, or an omission by
Indemnitee of a material fact necessary to make Indemnitee’s statements not
materially misleading, in connection with Indemnitee’s request for
indemnification; or

 

(2)

a prohibition of that indemnification under applicable law.

 

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(d)       If Indemnitee, under this Section 8 or otherwise, seeks a judicial
adjudication of or an award in arbitration to enforce Indemnitee’s rights under
this Agreement, Indemnitee will be entitled to recover from the Company and the
Partnership, and will be indemnified by the Company and the Partnership against,
any and all Expenses reasonably incurred by or on behalf of Indemnitee in that
judicial adjudication or arbitration, but only if Indemnitee prevails therein.
If it is determined in that judicial adjudication or arbitration that Indemnitee
is entitled to receive part of, but not all, the indemnification or advancement
of expenses sought, the expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Agreement entitles Indemnitee to indemnification
and those Indemnitee must bear.

(e)       In any judicial proceeding or arbitration under this Section 8, the
Company and the Partnership:

(1)       will not, and will not permit any other Person acting on its behalf
to, assert that the procedures or presumptions this Agreement establishes are
not valid, binding and enforceable; and

 

(2)

will stipulate that it is bound by all the provisions hereof.

 

Section 9.

Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(a)       The rights to indemnification and advancement of Expenses and the
remedies this Agreement provides are not and will not be deemed exclusive of any
other rights or remedies to which Indemnitee may at any time be entitled under
applicable law, the Company’s or the Partnership’s Charter Documents, any
agreement, a vote of members of the Company or unitholders of the Partnership or
Disinterested Directors, or otherwise, but each such right or remedy hereunder
will be cumulative with all such other rights and remedies. No amendment,
alteration or termination of this Agreement or any provision hereof will limit
or restrict any right of Indemnitee hereunder in respect of any action
Indemnitee has taken or omitted in Indemnitee’s capacity as a Functionary of the
Company, the Partnership or any Related Enterprise prior to that amendment,
alteration or termination.

(b)       If the Company or the Partnership maintains an insurance policy or
policies providing liability insurance for Functionaries of the Company, the
Partnership or of any Related Enterprise who serve or served in the same
capacities as Indemnitee, Indemnitee will be covered by the policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such Functionary under the policy or policies. If the Company
or the Partnership receives written notice from any source of a pending
Proceeding to which Indemnitee is a party and in respect of which Indemnitee
might be entitled to indemnification under Section 3(a) and the Company or the
Partnership then maintains any such policy of which Indemnitee is a beneficiary,
the Company and the Partnership will:

 

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(1)       promptly give notice of that Proceeding to the relevant insurers in
accordance with the applicable policy procedures; and

(2)       thereafter take all action necessary to cause those insurers to pay,
on behalf of Indemnitee, all amounts payable in accordance with the applicable
policy terms as a result of that Proceeding;

provided, however that the Company and the Partnership need not comply with the
provisions of this sentence if its failure to do so would not actually be
prejudicial to Indemnitee in any material respect.

(c)       The Company and the Partnership will not be liable under this
Agreement to make or cause to be made any payment of amounts otherwise
indemnifiable hereunder, or to make or cause to be made any advance this
Agreement otherwise requires it to make or cause to be made, to or for the
account of Indemnitee, if and to the extent that Indemnitee has otherwise
actually received or had applied for Indemnitee’s benefit that payment or
advance or obtained the entire benefit therefrom under any insurance policy, any
other contract or agreement or otherwise.

(d)       If the Company or the Partnership makes or causes to be made any
payment hereunder, it will be subrogated to the extent of that payment to all
the rights of recovery of Indemnitee, who will execute all papers required and
take all action necessary to secure those rights, including execution of such
documents as are necessary to enable the Company and the Partnership to bring
suit to enforce those rights.

(e)       The Company’s and the Partnership’s obligation to make or cause to be
made any payment or advance hereunder to or for the account of Indemnitee with
respect to Indemnitee’s service at the request of the Company or the Partnership
as a Functionary of any Related Enterprise will be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from that Related Enterprise.

Section 10.       Duration of Agreement; Binding Effect. This Agreement will
continue until and terminate on the later of:

(1)       10 years after the date that Indemnitee has ceased to serve as a
Functionary of the Company, the Partnership and each Related Enterprise that
Indemnitee served at the request of the Company or the Partnership; or

(2)       one year after the final, nonappealable termination of any Proceeding
then pending in respect of which Indemnitee is granted rights of indemnification
or advancement of Expenses hereunder and of any proceeding commenced by
Indemnitee under Section 8 or otherwise.

This Agreement will be binding on the Company, the Partnership and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse, if Indemnitee resides in Texas or another community property state,
heirs, executors and administrators.

 

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Section 11.       Severability. If any provision or provisions hereof is or are
invalid, illegal or unenforceable for any reason whatsoever:

(1)       the validity, legality and enforceability of the remaining provisions
hereof, including each portion of any Section containing any such invalid,
illegal or unenforceable provision which is not itself invalid, illegal or
unenforceable, will not in any way be affected or impaired thereby;

(2)       such provision or provisions will be deemed reformed to the extent
necessary to conform to applicable law and to give the maximum effect to the
intent of the parties hereto; and

(3)       to the fullest extent possible, the provisions hereof, including each
portion of any Section containing any such invalid, illegal or unenforceable
provision which is not itself invalid, illegal or unenforceable, will be
construed so as to give effect to the intent manifested thereby.

Section 12.       Exceptions to Right of Indemnification or Advancement of
Expenses. No provision in this Agreement will obligate the Company or the
Partnership to pay or cause to be paid any indemnity to or for the account of
Indemnitee, or to advance or cause to be advanced Expenses under Section 4, in
connection with or as a result of:

(1)       any Claim made against Indemnitee for an accounting of profits, under
Section 16(b) of the Exchange Act or similar provision of state statutory or
common law, from the purchase and sale, or sale and purchase, by Indemnitee of
securities of the Company, the Partnership or any Related Enterprise;

 

(2)

any Company Claim made against Indemnitee for:

(A)      any unauthorized conversion to personal use, embezzlement or
misappropriation of assets of the Company, the Partnership or any Related
Enterprise or any transaction from which Indemnitee derived an improper personal
benefit;

(B)      any forgery or alteration of negotiable instruments of the Company, the
Partnership or any Related Enterprise;

(C)      any falsification of the records or financial statements of the
Company, the Partnership or any Related Enterprise for personal or other
reasons; or

(D)      any breach of a contractual obligation to pay or repay or otherwise
return money to the Company, the Partnership or any Related Enterprise; or

(3)       except for any Claim initiated by Indemnitee, whether as a cause of
action or as a defense to a cause of action under Section 8 or otherwise, to
enforce

 

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or establish, by declaratory judgment or otherwise, Indemnitee’s rights or
remedies hereunder, any Claim initiated by Indemnitee without the prior
authorization of the Board against the Company, the Partnership or any Related
Enterprise or any of their respective present or former Functionaries.

Section 13.       Counterparts. This Agreement may be executed in one or more
counterparts, each of which will for all purposes be deemed to be an original
but all of which together will constitute one and the same agreement. Only one
such counterpart signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Agreement.

Section 14.       Headings. The headings of the Sections hereof are inserted for
convenience only and do not and will not be deemed to constitute part of this
Agreement or to affect the construction thereof.

Section 15.       Modification and Waiver. No supplement to or modification or
amendment of this Agreement will be binding unless executed in writing by the
parties hereto. No waiver of any provision hereof will be deemed or will
constitute a waiver of any other provision hereof, whether or not similar, nor
will any such waiver constitute a continuing waiver.

Section 16.       Reliance. The Company and the Partnership confirm and agree
with Indemnitee that it has entered into this Agreement and assumed the
obligations this Agreement imposes on it in order to induce Indemnitee to serve,
or continue to serve, as a Functionary of the Company or a Related Enterprise.
The Company and the Partnership acknowledge that Indemnitee is relying on this
Agreement in so serving.

Section 17.       Notices. All notices, requests, demands and other
communications hereunder must be in writing or by electronic transmission and
will be deemed delivered and received:

(1)       if personally delivered or if delivered by telex, telegram, facsimile,
electronic transmission or courier service, when actually received by the party
to whom the notice or communication is sent; or

(2)       if delivered by mail, whether actually received or not, at the close
of business on the third business day in the city in which the Company’s and the
Partnership’s principal executive office is located next following the day when
placed in the U.S. mail, postage prepaid, certified or registered, addressed to
the appropriate party at the address of that party set forth below, or at such
other address as that party may designate by notice in writing or by electronic
transmission to the other party in accordance herewith:

 

(3)

If to Indemnitee, to:

________________________

________________________

________________________

 

16

4891835v.3

Attention: _______________

Fax No.: ________________

E-mail: _________________

with a copy, which will not constitute notice for purposes of this Agreement, to
such legal counsel, if any, as Indemnitee may designate in writing or by
electronic transmission; and

 

(4)

If to the Company or the Partnership, to:

Abraxas General Partner, LLC

500 North Loop 1604 East, Suite 100

San Antonio, Texas 78232

Attention: President

Fax No.: (210) 490-8816

E-mail: bstuckey@abraxaspetroleum.com

Section 18.       Contribution. If it is established, under Section 6(c) or
otherwise, that Indemnitee has the right to be indemnified under Section 3(a) in
respect of any claim, but that right is unenforceable by reason of any
applicable law or public policy, then, to the fullest extent applicable law
permits, the Company and the Partnership, in lieu of indemnifying or causing the
indemnification of Indemnitee under Section 3(a), will, or will cause a
Partnership Entity to, contribute to the amount Indemnitee has incurred, whether
for judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement or for Expenses reasonably incurred, in connection with that Claim,
in such proportion as is deemed fair and reasonable in light of all the
circumstances of that Claim in order to reflect:

(1)       the relative benefits Indemnitee and the Partnership have received as
a result of the event(s) or transaction(s) giving rise to that Claim; or

(2)       the relative fault of Indemnitee and of the Partnership and its other
Functionaries in connection with those event(s) or transaction(s).

Section 19.       Governing Law; Submission to Jurisdiction. This Agreement and
the legal relations among the parties will be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration Indemnitee
commences under Section 8 or as Section 3(a) expressly contemplates otherwise,
the Company, the Partnership and Indemnitee hereby irrevocably and
unconditionally:

(1)       agree that any action or proceeding arising out of or in connection
with this Agreement will be brought only in the Court of Chancery and not in any
other state or federal court in the United States of America or any court in any
other country;

 

17

4891835v.3

(2)       consent to submit to the exclusive jurisdiction of the Court of
Chancery for purposes of any action or proceeding arising out of or in
connection with this Agreement;

(3)       waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery; and

(4)       waive, and agree not to plead or to make, any claim that any such
action or proceeding brought in the Court of Chancery has been brought in an
improper or otherwise inconvenient forum.

Section 20.       Entire Agreement. This Agreement constitutes the entire
agreement and understanding among the Company, the Partnership and Indemnitee
with respect to the subject matter hereof, and supersedes all prior oral,
written or implied agreements and understandings of the Company, the Partnership
and Indemnitee with respect to the subject matter hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the day and year first above written.

ABRAXAS GENERAL PARTNER, LLC

 

 

By:

Barbara M. Stuckey

President and Chief Operating Officer

 

ABRAXAS ENERGY PARTNERS, L.P.

 

By:

Abraxas General Partner, LLC,

its general partner

 

 

By:

Barbara M. Stuckey

President and Chief Operating Officer

 

INDEMNITEE:

 

[Name]

 

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