exv10w6






Exhibit 10.6




FORM OF DIRECTOR INDEMNIFICATION AGREEMENT




     This Indemnification Agreement (this “Agreement”) is made and entered into as of this
[Insert Day] day of [Insert Month], 20      , by and among QRE GP, LLC, a Delaware limited liability
company (the “General Partner”); QR Energy, LP, a Delaware limited partnership (the
“Partnership,” and together with the General Partner, the “Companies” and each a
“Company”); and [Insert Director Name] (“Indemnitee”). Each of the defined terms
used in this Agreement shall have the definition set forth in Section 14 of this Agreement.



     WHEREAS, in light of the litigation costs and risks to directors and officers resulting from
their service to companies and the desire of the Companies to attract and retain qualified
individuals to serve as directors and officers, it is reasonable, prudent and necessary for the
Companies to indemnify and advance expenses on behalf of the directors (including directors that
also serve as officers) of the General Partner to the extent permitted by applicable law so that
they will serve or continue to serve the Companies free from undue concern regarding such risks;



     WHEREAS, the Companies have requested that Indemnitee serve or continue to serve as a director
(and officer, as applicable) of the General Partner and may have requested or may in the future
request that Indemnitee serve one or more Enterprises as a director or in other capacities;



     WHEREAS, in order to induce Indemnitee to serve, or to continue to serve, as a director of the
General Partner, and to agree to serve, from time to time, as any Company may request, in any other
Corporate Status, the Companies are executing this Agreement;



     WHEREAS, Indemnitee is willing to serve as a director of the General Partner or in any other
Corporate Status on the condition that Indemnitee be so indemnified;



     WHEREAS, the indemnification provisions of this Agreement are a supplement to and in
furtherance of the Certificate of Limited Partnership of the Partnership, as amended from time to
time after the date hereof (the “Partnership Certificate”), the First Amended and Restated
Agreement of Limited Partnership of the Partnership, as amended from time to time after the date
hereof in accordance with the terms thereof (the “Partnership Agreement”), the Certificate
of Formation of the General Partner, as amended from time to time after the date hereof (the
“General Partner Certificate”), and the Amended and Restated Limited Liability Company
Agreement of the General Partner, as amended from time to time after the date hereof in accordance
with the terms thereof (the “General Partner Agreement” and, together with the Partnership
Certificate, the Partnership Agreement and the General Partner Certificate, the “Company
Organizational Documents”), any organizational documents of any other Enterprise (collectively,
the “Enterprise Organizational Documents”) and any resolutions adopted by the Board of
Directors (pursuant to the General Partner Agreement or the Partnership Agreement) or similar
governing body of any other Enterprise, and shall not be deemed to be a substitute therefor nor to
diminish or abrogate any rights of Indemnitee thereunder; and



     WHEREAS, to the extent Indemnitee is employed by a Sponsor Company, Indemnitee may have
certain rights to indemnification, advancement of expenses or insurance provided by



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the Designating Partners (or their affiliates), which Indemnitee, the Companies and the
Designating Partners (or their affiliates) intend to be secondary to the primary obligation of the
Enterprise Entities to indemnify Indemnitee as provided herein or as provided in the Company
Organizational Documents or other Enterprise Organizational Documents, with the Companies’
acknowledgement of and agreement to the foregoing being a material condition to Indemnitee’s
willingness to serve as a director of the General Partner or in any other Corporate Status.




     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Companies and Indemnitee do hereby covenant and agree as follows:


1. Services by Indemnitee. Indemnitee will serve or continue to serve as a director of the
General Partner (and an officer, if applicable), for so long as Indemnitee is duly elected or
appointed or until Indemnitee tenders Indemnitee’s resignation or is removed in accordance with the
General Partner Agreement. Indemnitee may from time to time also agree to serve, as any Company
may request from time to time, in any other Corporate Status. Indemnitee and each Company each
acknowledge that they have entered into this Agreement as a means of inducing Indemnitee to serve,
or continue to serve, the Companies and any Enterprise in such capacities. Indemnitee may at any
time and for any reason resign from such position or positions (subject to any other contractual
obligation or any obligation imposed by operation of law).



2. Indemnification—General. On the terms and subject to the conditions of this Agreement,
the Companies shall, to the fullest extent permitted under applicable law and so long as Indemnitee
has not engaged in Disabling Conduct, indemnify Indemnitee with respect to, and hold Indemnitee
harmless from and against, all losses, liabilities, judgments, fines, penalties, costs, Expenses
and other amounts that Indemnitee reasonably incurs and that result from, arise in connection with
or are by reason of Indemnitee’s Corporate Status and shall advance Expenses to Indemnitee. The
obligations of the Companies under this Agreement (a) are joint and several obligations of each
Company, (b) shall continue after such time as Indemnitee ceases to serve as a director of the
General Partner or in any other Corporate Status and (c) include, without limitation, claims for
monetary damages against Indemnitee in respect of any actual or alleged liability or other loss of
Indemnitee, to the fullest extent permitted under applicable law as in existence on the date hereof
(and to such greater extent as applicable law may hereafter from time to time permit) provided that
Indemnitee has not engaged in Disabling Conduct. The other provisions in this Agreement are
provided in addition to and as a means of furtherance and implementation of, and not in limitation
of, the obligations expressed in this Section 2.



3. Proceedings Other Than Proceedings by or in the Right of the Companies. If, in
connection with or by reason of Indemnitee’s Corporate Status, Indemnitee was, is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of any of the Companies to procure a judgment in its favor, the Companies shall, to the
fullest extent permitted under applicable law and so long as Indemnitee has not engaged in
Disabling Conduct, indemnify Indemnitee with respect to, and hold Indemnitee harmless from and
against, all Expenses, liabilities, judgments, penalties, fines and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in connection with or in
respect of such liabilities, judgments, penalties, fines and amounts paid in settlement) reasonably
incurred by Indemnitee or on behalf of Indemnitee in connection with such Proceeding or any claim,
issue or matter therein.







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4. Proceedings by or in the Right of the Companies. If, by reason of Indemnitee’s
Corporate Status, Indemnitee was, is, or is threatened to be made, a party to or a participant in
any Proceeding by or in the right of any of the Companies to procure a judgment in its favor, the
Companies shall, to the fullest extent permitted under applicable law and so long as Indemnitee has
not engaged in Disabling Conduct, indemnify Indemnitee with respect to, and hold Indemnitee
harmless from and against, all Expenses reasonably incurred by Indemnitee or on behalf of
Indemnitee in connection with such Proceeding; provided, however, that
indemnification against such Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged by a court of competent
jurisdiction to be liable to the applicable Company only if (and only to the extent that) the court
in which such Proceeding shall have been brought or is pending shall determine that, despite such
adjudication of liability and in view of all circumstances, Indemnitee is fairly and reasonably
entitled to indemnity for such Expenses which the court shall deem proper.



5. Mandatory Indemnification in Case of Successful Defense. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate
Status, a party to (or a participant in) and is successful, on the merits or otherwise, in defense
of any Proceeding (including, without limitation, any Proceeding brought by or in the right of any
Company), the Companies shall, to the fullest extent permitted under applicable law and so long as
Indemnitee has not engaged in Disabling Conduct, indemnify Indemnitee with respect to, and hold
Indemnitee harmless from and against, all Expenses reasonably incurred by Indemnitee or on behalf
of Indemnitee in connection therewith. If Indemnitee is not wholly successful in defense of such
Proceeding but is successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Companies shall, to the fullest extent permitted
under applicable law and so long as Indemnitee has not engaged in Disabling Conduct, indemnify
Indemnitee against all Expenses reasonably incurred by Indemnitee or on behalf of Indemnitee in
connection with each successfully resolved claim, issue or matter. For purposes of this
Section 5 and without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, on substantive or procedural grounds, shall be
deemed to be a successful result as to such claim, issue or matter.



6. Partial Indemnification. If Indemnitee is entitled under any provision of this
Agreement or otherwise to indemnification by any of the Companies for some or a portion of the
Expenses, liabilities, judgments, penalties, fines and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or in respect of such
liabilities, judgments, penalties, fines and amounts paid in settlement) incurred by Indemnitee or
on behalf of Indemnitee in connection with a Proceeding or any claim, issue or matter therein, in
whole or in part, the Companies shall, to the fullest extent permitted under applicable law and so
long as Indemnitee has not engaged in Disabling Conduct, indemnify Indemnitee to the fullest extent
to which Indemnitee is entitled to such indemnification.



7. Indemnification for Additional Expenses Incurred to Secure Recovery or as Witness.





	 	(a)	 	The Companies shall, to the fullest extent permitted under applicable law and
so long as Indemnitee has not engaged in Disabling Conduct, indemnify Indemnitee with
respect to, and hold Indemnitee harmless from and against, any and all Expenses and, if
requested by Indemnitee, shall advance on an as-incurred basis




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	 	 	 	(as provided in Section 8 of this Agreement) such Expenses to Indemnitee,
which are reasonably incurred by Indemnitee in connection with any action or
proceeding or part thereof brought by Indemnitee for (i) indemnification or advance
payment of Expenses by the Companies under this Agreement, the Company
Organizational Documents or other Enterprise Organizational Document, or any other
agreement; or (ii) recovery under any director and officer liability insurance
policies maintained by any Company or other Enterprise.






	 	(b)	 	To the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a
witness (or is forced or asked to respond to discovery requests) in any Proceeding to
which Indemnitee is not a party, the Companies shall, to the fullest extent permitted
under applicable law and so long as Indemnitee has not engaged in Disabling Conduct,
indemnify Indemnitee with respect to, and hold Indemnitee harmless from and against,
and the Companies will advance on an as-incurred basis (as provided in Section
8 of this Agreement), all Expenses reasonably incurred by Indemnitee or on behalf
of Indemnitee in connection therewith.




8. Advancement of Expenses. The Companies shall, to the fullest extent permitted under
applicable law, pay on a current and as-incurred basis all Expenses incurred by Indemnitee in
connection with any Proceeding in any way connected with, resulting from or relating to
Indemnitee’s Corporate Status. The advancement of such Expenses shall be paid within ten (10) days
after receipt by any Company of a properly submitted written request for advancement from
Indemnitee pursuant to Section 9(c)(i) of this Agreement, without regard to whether an Adverse
Determination has been or may be made, except as contemplated by the last sentence of Section
9(f) of this Agreement. Upon submission of a request for advancement of Expenses pursuant to
Section 9(c)of this Agreement, Indemnitee shall be entitled to advancement of Expenses as
provided in this Section 8, and such advancement of Expenses shall continue until such time
(if any) as there is a final non-appealable judicial determination that Indemnitee is not entitled
to indemnification or that Indemnitee engaged in Disabling Conduct. Indemnitee shall repay all
such amounts advanced if and to the extent that it shall ultimately be determined in a decision by
a court of competent jurisdiction from which no appeal can be taken that Indemnitee is not entitled
to be indemnified by the Companies for such Expenses or that Indemnitee engaged in Disabling
Conduct. Such repayment obligation shall be unsecured and shall not bear interest. The Companies
shall not impose on Indemnitee additional conditions to advancement or require from Indemnitee
additional undertakings regarding repayment, except as set forth in this Agreement.



9. Indemnification Procedures.





	 	(a)	 	Notice of Proceeding. Indemnitee agrees to notify the Companies promptly upon
being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding or matter which may be subject to
indemnification or advancement of Expenses hereunder. Any failure by Indemnitee to
notify any Company will relieve such Company of its advancement or indemnification
obligations under this Agreement only to the extent such Company can establish that
such omission to notify resulted in actual prejudice to it, and the omission to notify
such Company will, in any event, not relieve any




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	 	 	 	Company from any liability which it may have to indemnify Indemnitee or advance
Expenses to Indemnitee otherwise than under this Agreement. If, at the time of
receipt of any such notice, the Companies have director and officer insurance
policies in effect, the Companies will promptly notify the relevant insurers in
accordance with the procedures and requirements of such policies.






	 	(b)	 	Defense; Settlement.






	 	(i)	 	The Companies shall not, without the prior written consent of
Indemnitee, which may be provided or withheld in Indemnitee’s sole discretion,
effect any settlement of any Proceeding against Indemnitee, or any proceeding
which could have been brought against Indemnitee or which potentially or
actually imposes any cost, liability, exposure or burden on Indemnitee, unless
such settlement solely involves the payment of money or performance of any
obligation by Persons other than Indemnitee and includes an unconditional
release of Indemnitee from all liability on any matters that are the subject of
such Proceeding and an acknowledgment that Indemnitee denies all wrongdoing in
connection with such matters. The Companies shall not be obligated to
indemnify Indemnitee for amounts paid in settlement of a Proceeding against
Indemnitee if such settlement is effected by Indemnitee without the Companies’
prior written consent, which consent shall not be unreasonably withheld.
	 
	 	(ii)	 	In any Proceeding in connection with which Indemnitee has
submitted a Company with a written request for advancement and/or
indemnification of Expenses pursuant to Section 9(c) of this Agreement,
such Company shall be entitled to assume the defense of such Proceeding, with
counsel approved by Indemnitee, which approval shall not be unreasonably
withheld, upon the delivery to Indemnitee of written notice of such Company’s
election to do so. After delivery of such notice, approval of such counsel by
Indemnitee, and retention of such counsel by such Company, Indemnitee shall
nevertheless be entitled to employ or continue to employ his own counsel in
such Proceeding. Employment of such counsel by Indemnitee shall be at the cost
and expense of the Companies unless and until the Companies shall have
demonstrated to the reasonable satisfaction of Indemnitee and Indemnitee’s
counsel that there is no conflict of interest between the Company and
Indemnitee in such Proceeding, after which time, further employment of such
counsel by the Indemnitee shall be at the cost and expense of Indemnitee.






	 	(c)	 	Request for Advancement; Request for Indemnification.






	 	(i)	 	To obtain advancement of Expenses under this Agreement,
Indemnitee shall submit to the Companies a written request therefor, together
with such invoices or other supporting information as may be reasonably




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	 	 	 	requested by the Companies and reasonably available to Indemnitee, and, only
to the extent required by applicable law which cannot be waived, an
unsecured written undertaking to repay amounts advanced. The Companies
shall make advance payment of Expenses to Indemnitee no later than ten (10)
days after receipt of the written request for advancement (and each
subsequent request for advancement) by Indemnitee. If, at the time of
receipt of any such written request for advancement of Expenses, the
Companies have director and officer insurance policies in effect, the
Companies will promptly notify the relevant insurers in accordance with the
procedures and requirements of such policies.






	 	(ii)	 	To obtain indemnification under this Agreement, Indemnitee
shall submit a written request therefor. The time at which Indemnitee submits
a written request for indemnification shall be determined by the Indemnitee in
the Indemnitee’s sole discretion. Once Indemnitee submits such a written
request for indemnification (and only at such time that Indemnitee submits such
a written request for indemnification), a Determination shall thereafter be
made, as provided in and only to the extent required by Section 9(d) of
this Agreement. In no event shall a Determination be made, or required to be
made, as a condition to or otherwise in connection with any advancement of
Expenses pursuant to Section 8 and Section 9(c)(i) of this
Agreement. If, at the time of receipt of any such request for indemnification,
the Companies have director and officer insurance policies in effect, the
Companies will promptly notify the relevant insurers in accordance with the
procedures and requirements of such policies.






	 	(d)	 	Determination. Any Determination shall be made within thirty (30) days after
receipt of Indemnitee’s written request for indemnification pursuant to Section
9(c)(ii) (or in the case of a Determination to be made by Independent Counsel within
thirty (30) days of the selection of Independent Counsel) and such Determination shall
be made, subject to Section 9(g), in the specific case as follows:






	 	(i)	 	If a Potential Change in Control or a Change in Control shall
have occurred, by Independent Counsel (selected in accordance with Section
9(e)) in a written opinion to the Board of Directors, a copy of which opinion
shall be delivered to Indemnitee, unless Indemnitee shall request that such
Determination be made by the Board of Directors, or a committee of the Board of
Directors, in which case the Determination shall be made by the Persons and in
the manners provided for in clauses (x) or (y) of Section 9(d)(ii) below; or
	 
	 	(ii)	 	If a Potential Change in Control or a Change in Control shall
not have occurred, (x) by the Board of Directors by a majority vote of the
Disinterested Directors even though less than a quorum of the Board of
Directors, (y) by a majority vote of a committee consisting solely of one or
more Disinterested Directors designated to act in the matter by a majority




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	 	 	 	vote of all Disinterested Directors, even though less than a quorum of the
Board of Directors, or (z) if there are no Disinterested Directors or, if
such Disinterested Directors so direct, by Independent Counsel in a written
opinion to the Board of Directors, a copy of which shall be delivered to
Indemnitee, with Independent Counsel being selected by a vote of the
Disinterested Directors as set forth in clauses (x) or (y) of this Section
9(d)(ii), or if such vote is not obtainable or such a committee of
Disinterested Directors cannot be established, by a majority vote of the
Board of Directors.






	 	 	 	If a Determination is made that Indemnitee is entitled to indemnification, payment
to Indemnitee shall be made within ten (10) days after such Determination.
Indemnitee shall reasonably cooperate with the Persons making such Determination,
including providing to such Persons upon reasonable advance request any
documentation or information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and reasonably necessary
to the making of such Determination. Any Expenses incurred by Indemnitee in so
cooperating with the Persons making such Determination shall be advanced and borne
by the Companies (irrespective of the Determination as to Indemnitee’s entitlement
to indemnification), and each Company shall indemnify and hold Indemnitee harmless
therefrom.
	 
	 	(e)	 	Independent Counsel. If a Potential Change in Control or a Change in Control
shall not have occurred and the Determination is to be made by Independent Counsel, the
Independent Counsel shall be selected by (i) a majority vote of the Disinterested
Directors, even though less than a quorum of the Board or (ii) if there are no
Disinterested Directors, a majority vote of the Board, and the General Partner shall
give written notice to Indemnitee, within ten (10) days after receipt by the General
Partner of Indemnitee’s request for indemnification, specifying the identity and
address of the Independent Counsel so selected. If a Potential Change in Control or a
Change in Control shall have occurred and the Determination is to be made by
Independent Counsel, the Independent Counsel shall be selected by Indemnitee, and
Indemnitee shall give written notice to the General Partner, within ten (10) days after
submission of Indemnitee’s request for indemnification, specifying the identity and
address of the Independent Counsel so selected (unless Indemnitee shall request that
such selection be made by (i) a majority vote of the Disinterested Directors, even
though less than a quorum of the Board, or (ii) if there are no Disinterested
Directors, a majority vote of the Board, in which event the General Partner shall give
written notice to Indemnitee within ten (10) days after receipt of Indemnitee’s request
that such selection be made by a majority vote of the Disinterested Directors or the
Board, as applicable, specifying the identity and address of the Independent Counsel so
selected). In either event, (A) such notice to Indemnitee or the General Partner, as
the case may be, shall be accompanied by a written affirmation of the Independent
Counsel so selected that it satisfies the requirements of the definition of
“Independent Counsel” in Section 14 of this Agreement and that it agrees to serve in
such capacity and (B) Indemnitee or the General Partner, as the case may be, may,




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	 	 	 	within seven (7) days after such written notice of selection shall have been given,
deliver to the General Partner or to Indemnitee, as the case may be, a written
objection to such selection. Any objection to the selection of Independent Counsel
pursuant to this Section 9(e) may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of the definition of
“Independent Counsel” in Section 14 of this Agreement, and the objection shall set
forth with particularity the factual basis of such assertion. If such written
objection is timely made, the Independent Counsel so selected may not serve as
Independent Counsel unless and until a court of competent jurisdiction (a “Court”)
has determined that such objection is without merit. In the event of a timely
written objection to a choice of Independent Counsel, the party originally selecting
the Independent Counsel shall have seven (7) days to make an alternate selection of
Independent Counsel and to give written notice of such selection to the other party,
after which time such other party shall have five (5) days to make a written
objection to such alternate selection. If, within thirty (30) days after submission
of Indemnitee’s request for indemnification pursuant to Section 9(c)(ii), no
Independent Counsel shall have been selected and not objected to, either the General
Partner or Indemnitee may petition the Court for resolution of any objection that
shall have been made by the General Partner or Indemnitee to the other’s selection
of Independent Counsel or for the appointment as Independent Counsel of a Person
selected by the Court or by such other Person as the Court shall designate, and the
Person with respect to whom an objection is so resolved or the Person so appointed
shall act as Independent Counsel under Section 9(d). The Companies shall pay any
and all fees and expenses reasonably incurred by such Independent Counsel in
connection with acting pursuant to Section 9(d), and the Companies shall pay all
fees and expenses reasonably incurred incident to the procedures of this Section
9(e), regardless of the manner in which such Independent Counsel was selected or
appointed. Upon the due commencement of any Proceeding or arbitration pursuant to
Section 9(f) of this Agreement, Independent Counsel shall be discharged and relieved
of any further responsibility in such capacity, pending final disposition of such
Proceeding or arbitration and subject to the applicable standards of professional
conduct then prevailing.






	 	(f)	 	Consequences of Determination; Remedies of Indemnitee. The Companies shall be
bound by and shall have no right to challenge a Favorable Determination. If an Adverse
Determination is made, or if for any other reason the Companies do not make timely
indemnification payments or advances of Expenses, Indemnitee shall have the right to
commence a Proceeding before a Court to challenge such Adverse Determination or to
require the Companies to make such payments or advances (and the Companies shall have
the right to defend their position in such Proceeding and to appeal any adverse
judgment in such Proceeding). Indemnitee shall be entitled to be indemnified for all
Expenses incurred in connection with such a Proceeding and to have such Expenses
advanced by the Companies in accordance with Section 8 of this Agreement. If
Indemnitee fails to challenge an Adverse Determination, or if Indemnitee challenges an
Adverse Determination and such Adverse Determination has been upheld by a final
judgment of a Court




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	 	 	 	from which no appeal can be taken, then, to the extent and only to the extent
required by such Adverse Determination or final judgment, the Companies shall not be
obligated to indemnify Indemnitee under this Agreement.






	 	(g)	 	Presumptions; Burden and Standard of Proof. The parties intend and agree that,
to the extent permitted by law, in connection with any Determination by any Person,
including a Court:






	 	(i)	 	it will be presumed that Indemnitee is entitled to
indemnification under this Agreement, and the Enterprise or any other Person
challenging such right will have the burden of proof to overcome that
presumption in connection with any Determination contrary to that presumption;
	 
	 	(ii)	 	the termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that Indemnitee did not
act in good faith and in a manner which Indemnitee reasonably believed to be in
or not opposed to the best interests of the applicable Enterprise, or, with
respect to any criminal action or proceeding, that Indemnitee had reasonable
cause to believe that Indemnitee’s conduct was unlawful, or that Indemnitee did
not act in accordance with any other applicable standard of conduct imposed by
contract, applicable law or otherwise;
	 
	 	(iii)	 	Indemnitee will be deemed to have acted in good faith if it is
determined by a majority of the board of directors or other governing body of
the applicable Enterprise or by Independent Counsel, as applicable, that
Indemnitee’s action is based on the records or books of account of the
applicable Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers, employees, or committees of the board
of directors or other governing body of the applicable Enterprise, or on the
advice of legal counsel for the applicable Enterprise or on information or
records given in reports made to the applicable Enterprise by an independent
certified public accountant or by an appraiser or other expert or advisor
selected by the applicable Enterprise; and
	 
	 	(iv)	 	the knowledge and actions, or failure to act, of any director,
officer, manager, representative, agent or employee of any Enterprise or other
relevant enterprises will not be imputed to Indemnitee in a manner that limits
or otherwise adversely affects Indemnitee’s rights hereunder.





     The provisions of this Section 9(g) shall not be deemed to be exclusive or to limit in
any way the other circumstances in which Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.


10. Insurance; Subrogation; Other Rights of Recovery, Etc.





	 	(a)	 	Each Company shall use its reasonable best efforts to purchase and maintain a
policy or policies of insurance with reputable insurance companies with A.M.




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	 	 	 	Best ratings of “A” or better, providing Indemnitee with coverage for any liability
asserted against, and incurred by, Indemnitee or on Indemnitee’s behalf by reason of
Indemnitee’s Corporate Status, or arising out of Indemnitee’s status as such,
whether or not any such Company would have the power to indemnify Indemnitee against
such liability. Such insurance policies shall have coverage terms and policy limits
at least as favorable to Indemnitee as the insurance coverage provided to any other
current or former officer or director of the General Partner. If a Company has such
insurance in effect at the time it receives from Indemnitee any notice of the
commencement of an action, suit, proceeding or other claim, such Company shall give
prompt notice of the commencement of such action, suit, proceeding or other claim to
the insurers in accordance with the procedures set forth in the policy. The
Companies 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 or other claim in accordance with the terms of such policy,
provided that the Companies shall not be liable to pay or advance to Indemnitee any
amounts otherwise indemnifiable under this Agreement or under any other
indemnification agreement if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement or
otherwise. The Companies shall continue to provide such insurance coverage to
Indemnitee for a period of at least [six (6)] years after Indemnitee ceases to serve
as a director or any other Corporate Status.
	 
	 	(b)	 	Subject to Section 10(d), in the event of any payment by any Company
under this Agreement, such Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee against any other Enterprise, and
Indemnitee hereby agrees, as a condition to obtaining any advancement or
indemnification from the Companies, to assign to such Company all of Indemnitee’s
rights to obtain from such other Enterprise such amounts to the extent that they have
been paid by such Company to or for the benefit of Indemnitee as advancement or
indemnification under this Agreement and are adequate to indemnify Indemnitee with
respect to the costs, Expenses or other items to the full extent that Indemnitee is
entitled to indemnification or other payment hereunder; and Indemnitee will (upon
request by the Companies) execute all papers required and take all action necessary to
secure such rights, including execution of such documents as are necessary to enable
such Company to bring suit or enforce such rights. In addition, if the General
Partner, on behalf of itself, pays or causes to be paid (including advancement of
Expenses), for any reason, any amounts otherwise indemnifiable or payable hereunder or
under any other indemnification agreement or arrangement (whether pursuant to contract,
Company Organizational Documents or other Enterprise Organizational Documents or
otherwise) with Indemnitee, then the Partnership shall fully indemnify, reimburse and
hold harmless the General Partner for all such payments actually made by the General
Partner.
	 
	 	(c)	 	Each of the Companies hereby unconditionally and irrevocably waives,
relinquishes and releases, and covenants and agrees not to exercise (and to cause




- 10 -









 






	 	 	 	each of the other Enterprises not to exercise), any rights that such Company or
other Enterprise, as the case may be, may now have or hereafter acquire against any
Designating Partner (or former Designating Partner) or any of their respective
affiliates that arise from or relate to the existence, payment, performance or
enforcement of the Companies’ obligations under this Agreement or under any other
indemnification agreement or arrangement (whether pursuant to contract, Company
Organizational Documents or other Enterprise Organizational Documents or otherwise)
with any Person, including, without limitation, any right of subrogation (whether
pursuant to contract or common law), reimbursement, exoneration, contribution or
indemnification, or to be held harmless, and any right to participate in any claim
or remedy of Indemnitee against any Designating Partner (or former Designating
Partner) or any of their respective affiliates, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from any Designating Partner (or former
Designating Partner) or any of their respective affiliates, directly or indirectly,
in cash or other property or by set-off or in any other manner, payment or security
on account of such claim, remedy or right.






	 	(d)	 	The Companies shall not be liable to pay or advance to Indemnitee any amounts
otherwise indemnifiable under this Agreement or under any other indemnification
agreement if and to the extent that Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise; provided,
however, that (i) the Companies hereby agree on behalf of themselves and each
other Enterprise Entity, that, irrespective of whether Indemnitee is employed by a
Sponsor Company and therefore may have certain rights to indemnification, advancement
of expenses or insurance provided by the Designating Partners or their affiliates, the
Enterprise Entities are the indemnitors of first resort under this Agreement, the
Company Organizational Documents or other Enterprise Organizational Documents or any
other indemnification agreement, arrangement or undertaking (i.e., the
Enterprise Entities’ obligations to Indemnitee under this Agreement or any other
agreement or undertaking to provide advancement of Expenses and indemnification to
Indemnitee are primary without regard to any rights Indemnitee may have to seek or
obtain indemnification or advancement of Expenses from any Designating Partner or any
of its affiliates other than an Enterprise Entity (or any former Designating Partner or
any of its affiliates other than an Enterprise Entity) or from any insurance policy for
the benefit of such Indemnitee (other than any directors’ and officers’ insurance
policy for the benefit of such Indemnitee maintained or paid for by any Enterprise),
and any obligation of any Designating Partner (or any affiliate thereof other than any
Enterprise) to provide advancement or indemnification for all or any portion of the
same Expenses, liabilities, judgments, penalties, fines and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses, liabilities, judgments, penalties, fines and
amounts paid in settlement) incurred by Indemnitee and any rights of recovery of
Indemnitee under any insurance policy for the benefit of such Indemnitee (other than
any directors’ and officers’




- 11 -









 






	 	 	 	insurance policy for the benefit of such Indemnitee maintained or paid for by any
Enterprise) are secondary), and (ii) if any Designating Partner or any of its
affiliates other than an Enterprise Entity (or any former Designating Partner or any
of its affiliates other than an Enterprise Entity) pays or causes to be paid, for
any reason, or if Indemnitee collects under any insurance policy for the benefit of
such Indemnitee (other than any directors’ and officers’ insurance policy for the
benefit of such Indemnitee maintained or paid for by any Enterprise), any amounts
otherwise payable or indemnifiable hereunder or under any other indemnification
agreement, arrangement or undertaking (whether pursuant to contract, organizational
document or otherwise) with Indemnitee, then (x) such Designating Partner, former
Designating Partner (or affiliate, as the case may be) or insurer, as applicable,
shall be fully subrogated to all rights of Indemnitee with respect to such payment
and (y) the Companies shall fully indemnify, reimburse and hold harmless such
Designating Partner, former Designating Partner (or such affiliate) or insurer, as
applicable, for all such payments actually made by such Designating Partner, former
Designating Partner (or such affiliate) or insurer.






	 	(e)	 	Subject to Section 10(d), the Companies’ obligation to indemnify or
advance Expenses hereunder to Indemnitee in respect of or relating to Indemnitee’s
Corporate Status shall be reduced by any amount Indemnitee has actually received as
payment of indemnification or advancement of Expenses from such other Enterprise,
except to the extent that such indemnification payments and advance payment of Expenses
when taken together with any such amount actually received from other Enterprises or
under director and officer insurance policies maintained by one or more Enterprises are
inadequate to fully pay all costs, Expenses or other items to the full extent that
Indemnitee is otherwise entitled to indemnification or other payment hereunder.
	 
	 	(f)	 	Except for the rights set forth in Sections 10(c), 10(d) and
10(e) of this Agreement, the rights to indemnification and advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any other
rights to which Indemnitee may at any time, whenever conferred or arising, be entitled
under applicable law, the Company Organizational Documents or other Enterprise
Organizational Documents or any other agreement, resolution of directors (or similar
governing body) of any Enterprise, or otherwise. Indemnitee’s rights under this
Agreement are present contractual rights that fully vest upon Indemnitee’s first
service as a director (and officer, if applicable) of the General Partner. The Parties
hereby agree that Sections 10(c), 10(d) and 10(e) of this
Agreement shall be deemed exclusive and shall be deemed to modify, amend and clarify
any right to indemnification or advancement provided to Indemnitee under any other
contract, agreement or document with any Enterprise relating to advancement or
indemnification.
	 
	 	(g)	 	No amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect of any
action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to
such amendment, alteration or repeal. The assertion or employment of




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	 	 	 	any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.




11. Employment Rights; Successors; Third Party Beneficiaries.





	 	(a)	 	Nothing contained in this Agreement shall be construed as giving Indemnitee any
right to be, or to be retained, in the employment of any of the Enterprise Entities.
This Agreement shall continue in force as provided above after Indemnitee has ceased to
serve as a director of the General Partner or in any other Corporate Status.
	 
	 	(b)	 	This Agreement shall be binding upon each of the Companies and their successors
and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs,
executors and administrators.
	 
	 	(c)	 	The Designating Partners are express third party beneficiaries of this
Agreement, are entitled to rely upon this Agreement, and may specifically enforce the
Companies’ obligations hereunder (including but not limited to the obligations
specified in Section 10 of this Agreement) as though a party hereunder.




12. Severability. If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby; (b) such provision or provisions shall 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 (c) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested thereby.



13. Exceptions to Right of Indemnification or Advancement of Expenses. Notwithstanding any
other provision of this Agreement and except as provided in Section 7(a) of this Agreement
or as may otherwise be agreed by any Company, Indemnitee shall not be entitled to indemnification
or advancement of Expenses under this Agreement with respect to any Proceeding initiated by
Indemnitee (other than a Proceeding by Indemnitee (i) to enforce Indemnitee’s rights under this
Agreement or (ii) to enforce any other rights of Indemnitee to indemnification, advancement or
contribution from the Companies under any other contract, Company Organizational Document,
Enterprise Organizational Document or under statute or other law), unless the initiation of such
Proceeding or making of such claim shall have been approved by the Board of Directors of the
General Partner. In addition, notwithstanding any other provision of this Agreement to the
contrary, to the extent that Indemnitee is an officer of a Company or any Enterprise, Indemnitee
shall not be entitled to indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding if it is determined by a majority of the board of directors or other
governing body of the applicable Enterprise or by Independent Counsel, as applicable, that
Indemnitee did not act in good faith and in a manner






- 13 -









 







Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Companies or
any such Enterprise.



14. Definitions. For purposes of this Agreement:





	 	(a)	 	“Adverse Determination” shall have the meaning set forth in the
definition of Determination.
	 
	 	(b)	 	“Beneficial Owner” shall have the meanings set forth in Rule 13d-3
promulgated under the Exchange Act as in effect on the date hereof.
	 
	 	(c)	 	“Board of Directors” or “Board” means the board of directors of
the General Partner.
	 
	 	(d)	 	“Change of Control” shall be deemed to have occurred with respect to
the General Partner or the Partnership if any change in control or similar event,
however denominated, shall occur under and as defined in the General Partner Agreement.
	 
	 	(e)	 	“Corporate Status” describes the status of a person by reason of such
person’s past, present or future service as a director or officer or in any capacity
for any Enterprise at the request of a Company.
	 
	 	(f)	 	“Designating Partners” means any of the Sponsors Companies, in each
case so long as an individual employed by a Sponsor Company, or any of their respective
affiliates, serves as a director of the General Partner or in any other Corporate
Status.
	 
	 	(g)	 	“Determination” means a determination that either (x) indemnification
of Indemnitee is proper in the circumstances because Indemnitee met a particular
standard of conduct (a “Favorable Determination”) or (y) indemnification of
Indemnitee is not proper in the circumstances because Indemnitee failed to meet a
particular standard of conduct (an “Adverse Determination”). An Adverse
Determination shall include the decision that a Determination was required in
connection with indemnification and the decision as to the applicable standard of
conduct.
	 
	 	(h)	 	“Disabling Conduct” means, with respect to Indemnitee, any act or
omission resulting from fraud, gross negligence, willful breach of any Company
Organizational Document or other Enterprise Organizational Document or a willful
illegal act (other than an act or omission treated as a criminal violation in a foreign
country that is not a criminal violation in the United States).
	 
	 	(i)	 	“Disinterested Director” means, with respect to any request by
Indemnitee for indemnification hereunder, a director of the General Partner who at the
time of the vote is not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.










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	 	(j)	 	“Enterprise” shall mean each of the Companies and their respective
subsidiaries and any other entity, constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger to which any Company (or any of its
subsidiaries) is a party, limited liability company, partnership, joint venture, trust,
employee benefit plan, or other enterprise of which Indemnitee is or was serving at the
request of a Company as a director, officer, trustee, manager, venturer, proprietor,
partner, member, employee, agent, fiduciary or similar functionary.
	 
	 	(k)	 	“Enterprise Entity” means any Enterprise.
	 
	 	(l)	 	“Equity Interests” means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial interests in
a trust or other equity ownership interests in a Person, and any warrants, options or
other rights entitling the holder thereof to purchase or acquire any such equity
interest.
	 
	 	(m)	 	“Exchange Act” means the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder.
	 
	 	(n)	 	“Expenses” shall mean all reasonable direct and indirect costs, fees
and expenses of any type or nature whatsoever and shall specifically include, without
limitation, all reasonable attorneys’ fees, retainers, court costs, transcript costs,
fees and costs of experts, witness fees, travel expenses, duplicating costs, printing
and binding costs, telephone charges, postage, delivery service fees, and 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, including,
but not limited to, the premium for appeal bonds, attachment bonds or similar bonds and
all interest, assessments and other charges paid or payable in connection with or in
respect of any such Expenses, and shall also specifically include, without limitation,
all reasonable attorneys’ fees and all other expenses incurred by or on behalf of
Indemnitee in connection with preparing and submitting any requests or statements for
indemnification, advancement, contribution or any other right provided by this
Agreement. “Expenses,” however, shall not include amounts paid in settlement by
Indemnitee or the amounts of judgments or fines against Indemnitee.
	 
	 	(o)	 	“Favorable Determination” shall have the meaning set forth in the
definition of Determination.






	 	(p)	 	“Independent Counsel” means, at any time, any law firm, or a member of
a law firm, that (a) is experienced in matters of limited partnership, limited
liability company or corporation law, as applicable, and (b) is not, at such time, or
has not been in the three years prior to such time, retained to represent: (i) any
Enterprise or Indemnitee in any matter material to either such party (other than with
respect to matters concerning Indemnitee under this Agreement, or of other indemnities
under similar indemnification agreements), (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder or (iii) the Beneficial Owner,




- 15 -









 






	 	 	 	directly or indirectly, of securities of any Company representing 5% or more of the
ownership interests or the voting power of such Company’s then outstanding ownership
interests or voting securities, respectively. Notwithstanding the foregoing, the
term “Independent Counsel” shall not include any Person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of interest
in representing any of the Companies or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Companies agree to pay the reasonable
fees and expenses of the Independent Counsel referred to above and to fully
indemnify such counsel against any and all Expenses, claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant hereto and
to be jointly and severally liable therefor.






	 	(q)	 	“Person” means any individual, entity or group (within the meaning of
Rule 13d-5 of the Exchange Act but excluding any employee benefit plan of such person
and its subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan).
	 
	 	(r)	 	“Potential Change in Control” shall be deemed to have occurred if (i)
any Person shall have announced publicly an intention to take actions to effect a
Change in Control, or commenced any action that, if successful, would reasonably be
expected to result in the occurrence of a Change in Control; (ii) the General Partner
enters into an agreement or arrangement on behalf of itself or the Partnership, the
consummation of which would result in the occurrence of a Change in Control; or (iii)
any other event occurs that the Board declares to be a Potential Change of Control.
	 
	 	(s)	 	“Proceeding” includes any actual, threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened, pending or completed
proceeding, whether brought by or in the right of any Enterprise or otherwise and
whether civil, criminal, administrative or investigative in nature, in which Indemnitee
was, is, may be or will be involved as a party, witness or otherwise, by reason of
Indemnitee’s Corporate Status or by reason of any action taken by Indemnitee or of any
inaction on Indemnitee’s part while acting as director (or officer, as applicable) of
the General Partner or serving any other Enterprise (in each case whether or not he is
acting or serving in any such capacity or has such status at the time any liability or
expense is incurred for which indemnification or advancement of Expenses can be
provided under this Agreement).
	 
	 	(t)	 	“Sponsor Companies” means The Quantum Aspect Partnership, LP, a
Delaware limited partnership, QA GP, LLC, a Delaware limited liability company, and any
other investment fund or related management company or general partner (i) that is an
affiliate of The Quantum Aspect Partnership, LP (other than the Companies) or (ii) that
is advised by the same investment adviser as any of the foregoing entities or by an
affiliate of such investment adviser.










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15. Construction. Whenever required by the context, as used in this Agreement the singular
number shall include the plural, the plural shall include the singular, and all words herein in any
gender shall be deemed to include (as appropriate) the masculine, feminine and neuter genders.



16. Reliance. The Companies expressly confirm and agree that they have entered into this
Agreement and assumed the obligations imposed on each of them hereby in order to induce Indemnitee
to serve as a director (and officer, as applicable) of the General Partner, and the Companies
acknowledge that Indemnitee is relying upon this Agreement in serving as a director (and officer,
as applicable) of the General Partner or in any other Corporate Status.



17. Modification and Waiver. No supplement, modification or amendment of this Agreement
shall be binding unless executed in a writing identified as such by all 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.



18. Notice Mechanics. All notices, requests, demands or other communications hereunder
shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and
receipted for by the party to whom said notice or other communication shall have been direct, or
(ii) mailed by certified or registered mail with postage prepaid, on the third business day after
the date on which it is so mailed:





	 	(a)	 	If to Indemnitee to:




[                    ]

[                    ]

[                    ]

Attn: [Name of Indemnitee]





	 	(b)	 	If to any Company, to:




QRE GP, LLC

5 Houston Center

1401 McKinney Street, Suite 2400

Houston, Texas 77010



or to such other address as may have been furnished (in the manner prescribed above) as follows:
(a) in the case of a change in address for notices to Indemnitee, furnished by Indemnitee to the
Companies and (b) in the case of a change in address for notices to any Company, furnished by the
Companies to Indemnitee.



19. Contribution. To the fullest extent permitted under applicable law and so long as
Indemnitee has not engaged in Disabling Conduct, if the indemnification provided for in this
Agreement is unavailable to Indemnitee for any reason whatsoever, the Companies, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement or for






- 17 -









 







reasonably incurred Expenses, in connection with any claim relating to an indemnifiable event under
this Agreement, in such proportion as is deemed fair and reasonable in light of all of the
circumstances of such Proceeding in order to reflect (i) the relative benefits received by the
Companies and Indemnitee as a result of the event(s) or transaction(s) giving cause to such
Proceeding; or (ii) the relative fault of the Companies (and their other directors, officers,
employees and agents) and Indemnitee in connection with such event(s) or transaction(s).



20. Governing Law; Submission to Jurisdiction; Appointment of Agent for Service of Process.
This Agreement and the legal relations among the parties shall, to the fullest extent permitted by
law, 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. The Companies and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in
connection with this Agreement shall be brought only in the Court of Chancery of the State of
Delaware (the “Trial Court”), and not in any other state or federal court in the United
States of America or any court in any other country, (ii) consent to submit to the exclusive
jurisdiction of the Trial Court for purposes of any action or proceeding arising out of or in
connection with this Agreement, (iii) waive any objection to the laying of venue of any such action
or proceeding in the Trial Court and (iv) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the Trial Court has been brought in an improper or
otherwise inconvenient forum.



21. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.



22. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original but all of which together shall constitute
one and the same Agreement.




[Remainder of Page Intentionally Blank]




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



	 	 	 	 	 	 	 

	General Partner:	 	QRE GP, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	Partnership:	 	QR Energy, LP	 	 
	 
	 	 	 	 	 	 
	 	 	By: QRE GP, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	Indemnitee:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 






Signature Page to Director Indemnification Agreement—[Name of Indemnitee]