**EXHIBIT 10.6**
**FORM OF INDEMNITY AGREEMENT**
     This Indemnity Agreement (the “Agreement”) is effective as of ______by and between EncoreAcquisition Company, a Delaware corporation (the “Indemnitor”), and ______(the“Indemnitee”).
**RECITALS**
     The Indemnitee is a director and/or officer of the Indemnitor and/or an Affiliate Indemnitee(as hereinafter defined). The Indemnitor and the Indemnitee recognize the increased risk oflitigation and other claims being asserted against directors and officers in today’s environment.
     The Indemnitor’s Second Amended and Restated Bylaws (the “Bylaws”) require the Indemnitor toindemnify its directors and officers as currently provided therein, and the Indemnitee has beenserving and continues to serve as a director and/or officer of the Indemnitor in part in relianceon such provisions. The Bylaws permit the Indemnitor to purchase and maintain insurance or tofurnish similar protection or make other arrangements (any such insurance, protection orarrangement, an “Indemnification Arrangement”) on behalf of the Indemnitee against personalliability (including, but not limited to, providing for Advanced Amounts (as hereinafter defined))asserted against Indemnitee or incurred by or on behalf of Indemnitee in such capacity as adirector or officer of the Indemnitor or as an Affiliate Indemnitee, or arising out of Indemnitee’sstatus as such, whether or not the Indemnitor would have the power to indemnify Indemnitee againstsuch liability under the provisions of this Agreement or under the General Corporation Law of theState of Delaware (the “DGCL”), as it may then be in effect.
     In part to provide the Indemnitee with specific contractual assurance of substantialprotection against personal liability (regardless of, among other things, any amendment to orrevocation of the aforementioned provisions of the Bylaws or any change in the composition of theIndemnitor’s Board of Directors or control of the Indemnitor), the Indemnitor desires to enter intothis Agreement. DGCL Section 145(f) expressly recognizes that the indemnification provisions ofthe DGCL are not exclusive of any other rights to which a person seeking indemnification may beentitled under the Indemnitor’s Second Amended and Restated Certificate of Incorporation (the“Certificate of Incorporation) or Bylaws, or an agreement providing for indemnification, or aresolution of stockholders or directors, or otherwise, and the Bylaws expressly recognize that theindemnification provisions of the Bylaws shall not be deemed exclusive of, and shall not affect,any other rights to which a person seeking indemnification may be entitled under any agreement.
     In order to induce the Indemnitee to serve as a director and/or officer of the Indemnitor andin consideration of the Indemnitee’s so serving, the Indemnitor desires to hold harmless andindemnify the Indemnitee and to make arrangements pursuant to which the Indemnitee may be advancedor reimbursed expenses incurred by the Indemnitee in certain proceedings, in every case to thefullest extent authorized or permitted by the DGCL, or any
 

 

other applicable law, or by any amendment thereof or other statutory provisions authorizing orpermitting such indemnification that are adopted after the date hereof (but, in the case of anysuch amendment, only to the extent that such amendment permits the Indemnitor to provide broaderindemnification rights than the DGCL, or other applicable law, permitted the Indemnitor to provideprior to such amendment).
     NOW THEREFORE, in consideration of the foregoing recitals and of the Indemnitee’s continuingto serve the Indemnitor as a director and/or officer, the parties agree as follows:
     1. *Indemnification*. To the fullest extent allowed by law, the Indemnitor shall hold harmlessand indemnify the Indemnitee and Indemnitee’s spouse, heirs, executors and personal and legalrepresentatives against any and all expenses, liabilities and losses (including, withoutlimitation, investigation expenses, expert witnesses’ and attorneys’ fees and expenses, judgments,travel expenses, penalties, fines, amounts paid or to be paid in settlement any interest,assessments, or other charges imposed thereon and any federal, state, local or foreign taxesimposed as a result of actual or deemed receipt of any payment hereunder) actually incurred by theIndemnitee (net of any related insurance proceeds or other amounts received by the Indemnitee orpaid by or on behalf of an Indemnitor on the Indemnitee’s behalf in compensation of such expenses,liabilities or losses) in connection with any actual or threatened action, suit or proceeding,whether civil, criminal, administrative or investigative or in arbitration, to which the Indemniteeis a party or participant or is threatened to be made a party or participant (a “Proceeding”), as aplaintiff, defendant, respondent, witness or otherwise, based upon, arising from, relating to or byreason of the fact that the Indemnitee: (a) is, was, shall be or shall have been a director and/orofficer of the Indemnitor; or (b) is or was serving, shall serve, or shall have served at therequest of the Indemnitor as a director, officer, partner, trustee, fiduciary, employee or agent(“Affiliate Indemnitee”) of another foreign or domestic corporation or non-profit corporation,cooperative, partnership, limited liability company, joint venture, trust, employee benefit plan,or other incorporated or unincorporated enterprise (each, a “Company Affiliate”); or arising fromor relating to any action or omission to act taken by the Indemnitee in any of the foregoingcapacities; *provided, however,*that, except as provided in Section 9(b) hereof, the Indemnitorshall indemnify the Indemnitee in connection with a Proceeding initiated by the Indemnitee only ifsuch proceeding (or part thereof) was authorized by a two-thirds vote of the Board of Directors ofthe Indemnitor.
     The Indemnitee shall be presumed to be entitled to such indemnification under this Agreementupon submission of a written claim pursuant to Section 4 hereof. Thereafter, the Indemnitor shallhave the burden of proof to overcome the presumption that the Indemnitee is so entitled. Suchpresumption shall only be overcome by a judgment or other final adjudication, after all appeals andall time for appeals has expired (“Final Determination”), which is adverse to the Indemnitee andwhich establishes (i) that Indemnitee’s acts were committed in bad faith, or were the result ofactive and deliberate dishonesty, and were material to the cause of action so adjudicated and (ii)that the Indemnitee in fact personally gained a financial profit or other advantage to whichIndemnitee was not legally entitled. If the Indemnitee is not wholly successful in any Proceedingbut is successful, on the merits or otherwise, as to one or more but less than all claims, issuesor matters in such Proceeding, the Indemnitor agrees to indemnify the Indemnitee to the maximumextent permitted by law against all losses and expenses incurred by
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the Indemnitee in connection with each successfully resolved claim, issue or matter. Neitherthe failure of the Indemnitor (including its Board of Directors, its legal counsel or itsstockholders) to have made a determination prior to the commencement of such Proceeding thatindemnification of the Indemnitee is proper in the circumstances because such person has met theapplicable standard of conduct set forth in the DGCL, nor an actual determination by the Indemnitor(including its Board of Directors, its legal counsel or its stockholders) that the Indemnitee hasnot met the applicable standard of conduct, shall be a defense to the action or create apresumption that the Indemnitee has not met the applicable standard of conduct. The purchase,establishment or maintenance of any Indemnification Arrangement shall not in any way diminish,restrict, limit or adversely affect the rights and obligations of the Indemnitor or of theIndemnitee under this Agreement, except as expressly provided herein, and the execution anddelivery of this Agreement by the Indemnitor and the Indemnitee shall not in any way diminish,restrict, limit or adversely affect the Indemnitee’s right to indemnification from the Indemnitoror any other party or parties under any other Indemnification Arrangement, the Certificate ofIncorporation, the Bylaws or the DGCL.
     2. *Period of Limitations*. No legal action shall be brought and no cause of action shall beasserted by or on behalf of the Indemnitor or any affiliate of the Indemnitor against theIndemnitee, Indemnitee’s spouse, heirs, executors, or personal or legal representatives after theexpiration of two years from the date of accrual of such cause of action, or such longer period asmay be required by applicable law under the circumstances. Any claim or cause of action of theIndemnitor or its affiliates shall be extinguished and deemed released unless asserted by thetimely filing of a legal action within such period; *provided, however,*that if any shorter periodof limitations is otherwise applicable to any such cause of action the shorter period shall govern.
     3. *Insurance*. Subject only to the provisions of this Section 3, as long as the Indemniteeshall continue to serve as a director and/or officer of the Indemnitor (or shall continue at therequest of the Indemnitor to serve as an Affiliate Indemnitee) and, thereafter, as long as theIndemnitee shall be subject to any possible Proceeding by reason of the fact that the Indemniteewas a director and/or officer of the Indemnitor (or served in any of said other capacities), theIndemnitor shall, unless no such policies are available in any market, purchase and maintain ineffect for the benefit of the Indemnitee one or more valid, binding and enforceable policies (the“Insurance Policies”) of directors’ and officers’ liability insurance (“D&O Insurance”) providingadequate liability coverage for the Indemnitee’s acts as a director and/or officer of theIndemnitor or as an Affiliate Indemnitee. The Indemnitor shall promptly notify the Indemnitee ofany lapse, amendment or failure to renew said policy or policies or any provision thereof relatingto the extent or nature of coverage provided thereunder. In the event the Indemnitor does notpurchase and maintain in effect said policy or policies of D&O Insurance pursuant to the provisionsof this Section 3, the Indemnitor shall, in addition to and not in limitation of the other rightsgranted the Indemnitee under this Agreement, hold harmless and indemnify the Indemnitee to thefullest extent of coverage which would otherwise have been provided for the benefit of theIndemnitee pursuant to the Insurance Policies.
     4. *Claims for Payments*. The Indemnitee shall have the right to receive from the Indemnitor ondemand or, at his option, to have the Indemnitor pay promptly on his behalf, in advance of theFinal Determination of a Proceeding, all amounts payable by the Indemnitor
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pursuant to the terms of this Agreement as corresponding amounts are expended or incurred bythe Indemnitee in connection with any Proceeding or otherwise (such amounts so expended or incurredbeing referred to as “Advanced Amounts”). In making any claim for payment by the Indemnitor of anyamount, including any Advanced Amount, pursuant to this Agreement, the Indemnitee shall submit tothe Indemnitor a written request for payment (a “Claim”) which includes a schedule setting forth inreasonable detail the dollar amount expended (or incurred or expected to be expended or incurred).Each item on such schedule shall be supported by the bill, agreement or other documentationrelating thereto, a copy of which shall be appended to the schedule as an exhibit.
     Where the Indemnitee is requesting Advanced Amounts, the Indemnitee must also provide anundertaking to repay such Advanced Amounts if a Final Determination is made that the Indemnitee isnot entitled to indemnification hereunder. The Indemnitor will accept any such undertaking withoutreference to the financial ability of the Indemnitee to make repayment.
     5. *Section **16(b)**Liability*. The Indemnitor shall not be liable under this Agreement to makeany payment in connection with any claim made against the Indemnitee for an accounting of profitsmade from the purchase or sale by the Indemnitee of securities of the Indemnitor within the meaningof Section 16(b) of the Securities Exchange Act of 1934, and amendments thereto, or similarprovisions of any state statutory law or common law.
     6. *Nonexclusivity*. The agreements and obligations of the Indemnitor contained herein are notand will not be deemed exclusive of any other rights or remedies to which Indemnitee may at anytime be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement,a vote of stockholders or otherwise, but each such right or remedy hereunder will be cumulativewith all such other rights and remedies. No amendment, alteration or termination of this Agreementor any provision hereof will limit or restrict any right of Indemnitee hereunder in respect of anyaction Indemnitee has taken or omitted to take prior to that amendment, alteration or termination.To the extent that a change in Delaware law, whether by statute or judicial decision, permitsgreater indemnification by agreement than would be afforded currently under this Agreement, it isthe intent and agreement of the parties hereto that Indemnitee will enjoy by this Agreement thegreater benefits that change affords.
     7. *Continuation of Indemnity*. All agreements and obligations of the Indemnitor containedherein shall continue during the period the Indemnitee is a director and/or officer of theIndemnitor (or is serving at the request of the Indemnitor as an Affiliate Indemnitee) and shallcontinue thereafter so long as the Indemnitee shall be subject to any possible Proceeding by reasonof the fact that the Indemnitee was a director or officer of the Indemnitor or served as such anAffiliate Indemnitee.
     8. *Successors; Binding Agreement*. This Agreement shall be binding on, and shall inure to thebenefit of and be enforceable by, the Indemnitor’s successors and assigns and by the Indemnitee’spersonal or legal representatives, executors, administrators, successors, heirs, distributees,devisees and legatees. The Indemnitor shall require any successor or assignee (whether direct orindirect, by purchase, merger, consolidation or otherwise) to all or substantially all of thebusiness and/or assets of the Indemnitor, by written agreement in form
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and substance reasonably satisfactory to the Indemnitor and to the Indemnitee, expressly toassume and agree to perform this Agreement in the same manner and to the same extent that theIndemnitor would be required to perform if no such succession or assignment had taken place.
     9. *Notification and Defense of Claim*. Promptly after receipt by the Indemnitee of notice ofthe commencement of any Proceeding, the Indemnitee shall, if a claim in respect thereof is to bemade against the Indemnitor under this Agreement, notify the Indemnitor of the commencementthereof, but the failure to so notify the Indemnitor will not relieve the Indemnitor from anyliability which it may have to the Indemnitee. With respect to any such Proceeding:
     (i) The Indemnitor shall be entitled to participate therein at its own expense;
     (ii) Except with the prior written consent of the Indemnitee, the Indemnitorshall not be entitled to assume the defense of any Proceeding; and
     (iii) The Indemnitor shall not settle any Proceeding in any manner which wouldimpose any penalty or limitation on the Indemnitee without the Indemnitee’s priorwritten consent.
The Indemnitee shall not settle any Proceeding with respect to which the Indemnitee has receivedindemnified amounts or Advanced Amounts without the Indemnitor’s prior written consent, nor willthe Indemnitee unreasonably withhold consent to any proposed settlement.
     10. *Enforcement*. (a) The Indemnitor has entered into this Agreement and assumed theobligations imposed on the Indemnitor hereby in order to induce the Indemnitee to act as a directorand/or officer of the Indemnitor or as an Affiliate Indemnitee and acknowledges that the Indemniteeis relying upon this Agreement in continuing in such capacity.
     (a) All expenses incurred by the Indemnitee in connection with the preparation and submissionof the Indemnitee’s request for indemnification hereunder shall be borne by the Indemnitor. In theevent the Indemnitee has requested payment of any amount under this Agreement and has not receivedpayment thereof within thirty (30) days of such request, the Indemnitee may bring any action toenforce rights or collect moneys due under this Agreement, and, if the Indemnitee is successful insuch action, the Indemnitor shall reimburse the Indemnitee for all of the Indemnitee’s fees andexpenses in bringing and pursuing such action. If it is determined that the Indemnitee is entitledto indemnification for part (but not all) of the indemnification so requested, expenses incurred inseeking enforcement of such partial indemnification shall be reasonably prorated among the claims,issues or matters for which the Indemnitee is not so entitled. The Indemnitee shall be entitled tothe advancement of such amounts to the fullest extent contemplated by Section 4 hereof inconnection with such Proceeding.
     11. *Subrogation*. If the Indemnitor makes or causes to be made any payment hereunder, it willbe subrogated to the extent of that payment to all the rights of recovery of Indemnitee, who willexecute all papers required and take all action necessary to secure those
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rights, including execution of such documents as are necessary to enable the Indemnitor tobring suit to enforce those rights.
     12. *Severability*. If any provision or provisions of this Agreement shall be held to beinvalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality orenforceability of the remaining provisions of this Agreement (including, without limitation, allportions of any sections or subsections of this Agreement containing any such provision held to beinvalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (ii)to the fullest extent possible, the provisions of any section or subsections of this Agreementcontaining any such provisions held to be invalid, illegal or unenforceable shall be construed soas to give effect to the intent of the parties that the Indemnitor provide protection to theIndemnitee to the fullest extent enforceable.
     13. *Modification; Waiver; Discharge.*. No provisions of this Agreement may be modified, waivedor discharged unless such modification, waiver or discharge is agreed to in writing signed by theIndemnitee and an officer of the Indemnitor designated by the Board of Directors of the Indemnitor.No waiver by either party at any time of any breach by the other party of, or of noncompliancewith, any condition or provision of this Agreement to be performed by such other party shall bedeemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prioror subsequent time.
     14. *Governing Law.*The validity, interpretation, construction and performance of thisAgreement shall be governed by the laws of the State of Delaware, without giving effect to theprinciples of conflicts of laws thereof.
     15. *Jurisdiction*. The Indemnitee may bring an action seeking resolution of disputes orcontroversies arising under, or in any way related to, this Agreement in the state or federal courtjurisdiction in which the Indemnitee resides or in which Indemnitee’s place of business is locatedand in any related appellate courts, and the Indemnitor hereby consents to the jurisdiction of suchcourts and to such venue.
     16. *Notices*. Notices and all other communications provided for in this Agreement shall be inwriting and shall be deemed to have been duly given and received:
     (a) if personally delivered or if delivered by facsimile, electronic transmission or courierservice, when actually received by the party to whom the notice or other communication is sent; and
     (b) if delivered by mail, at the close of business on the third business day following the daywhen such notice or communication was sent by United States registered mail, return receiptrequested, postage prepaid, to the appropriate party at the address of that party set forth below:      If to the Indemnitee:                 
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      If to the Indemnitor: Encore Acquisition Company   777 Main Street, Suite 1400   Fort Worth, Texas 76102   Attn: Chief Executive Officer
or to such other address as either party may have furnished to the other in writing in accordanceherewith, except that notices of change of address shall be effective only upon receipt.
     17. *Counterparts*. This Agreement may be executed in one or more counterparts, each of whichshall be deemed to be an original but all of which together shall constitute one and the sameinstrument.
     18. *Effectiveness*. This Agreement shall be effective as of the day and year first abovewritten.
     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed effective as ofthe day and year first above written.       ENCORE ACQUISITION COMPANY       By: