Exhibit 10.2


 


INDEMNITY
AGREEMENT


 


This
Agreement made and entered into as of this      day of
                     ,
2005, by and between Stroud Energy, Inc., a Delaware corporation (the “Company”),
and                     
(“Indemnitee”), who is currently serving the Company in the capacity of a
director and/or officer thereof;


 


W
I T N E S S E T H:


 


WHEREAS,
the Company and Indemnitee recognize that the interpretation of ambiguous
statutes, regulations and court opinions and of the Certificate of Incorporation
and Bylaws of the Company, and the vagaries of public policy, are too uncertain
to provide the directors and officers of the Company with adequate or reliable
advance knowledge or guidance with respect to the legal risks and potential
liabilities to which they become personally exposed as a result of performing
their duties in good faith for the Company; and


 


WHEREAS,
the Company and the Indemnitee are aware that highly experienced and capable
persons are often reluctant to serve as directors or officers of a corporation
unless they are protected to the fullest extent permitted by law by
comprehensive insurance and indemnification, especially since the legal risks
and potential liabilities, and the very threat thereof, associated with
lawsuits filed against the officers and directors of a corporation, and the
resultant substantial time, expense, harassment, ridicule, abuse and anxiety
spent and endured in defending against such lawsuits, whether or not
meritorious, bear no reasonable or logical relationship to the amount of
compensation received by the directors or officers from the corporation; and


 


WHEREAS,
Section 145 of the General Corporation Law of the State of Delaware and
the Certificate of Incorporation of the Company, which set forth certain provisions
relating to the mandatory and permissive indemnification of, and advancement of
expenses to, officers and directors (among others) of a Delaware corporation by
such corporation, are specifically not exclusive of other rights to which those
indemnified thereunder may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise; and


 


WHEREAS,
after due consideration and investigation of the terms and provisions of this
Agreement and the various other options available to the Company and the
Indemnitee in lieu thereof, the Board of Directors of the Company has
determined that the following Agreement is not only reasonable and prudent but
necessary to promote and ensure the best interests of the Company and its stockholders;
and


 


WHEREAS,
the Company desires to have Indemnitee serve or continue to serve as an officer
and/or director of the Company, free from undue concern for unpredictable,
inappropriate or unreasonable legal risks and personal liabilities by reason of
his acting in good faith in the performance of his duty to the Company; and
Indemnitee desires to serve, or to continue to serve (provided that he is
furnished the indemnity provided for hereinafter), in either or both of such
capacities;


 





















 


NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Indemnitee,
intending to be legally bound, do hereby agree as follows:


 


1.             Agreement
to Serve.  Indemnitee
agrees to serve or continue to serve as director and/or officer of the Company
and as Indemnitee and the Company may agree, as a director, officer, trustee,
general partner, managing member, fiduciary, employee or agent of another Enterprise,
for so long as he is duly elected or appointed and qualified in accordance with
the provisions of the General Corporation Law of the State of Delaware and the
Certificate of Incorporation and Bylaws of the Company or until such time as he
tenders his resignation.  The Company
acknowledges that the Indemnitee is relying on this Agreement in so serving.


 


2.             Definitions.  As used in this Agreement:


 


(a)           “Change in Control” means a
change in control of the Company of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A
(or in response to any similar item on any similar schedule or form)
promulgated under the Securities Exchange Act of 1934 (the “Act”), whether or
not the Company is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed to
have occurred if (i) any “person” (as such term is used in Sections 13(d) and
14(d) of the Act) other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing 15% or more of the combined voting
power of the Company’s then outstanding securities without the prior approval
of at least two-thirds of the members of the Board of Directors of the Company
in office immediately prior to such person attaining such percentage interest; (ii) there
occurs a proxy contest, or the Company is a party to a merger, consolidation,
sale of assets, plan of liquidation or other reorganization not approved by at
least two-thirds of the members of the Board of Directors of the Company then
in office, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; or (iii) during any period
of two consecutive years, other than as a result of an event described in
clause (ii) of this subsection (a), individuals who at the beginning
of such period constituted the Board of Directors of the Company (including for
this purpose any new director whose election or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.


 


(b)           “Disinterested Director” means a
director of the Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee.


 





















 


(c)           “Enterprise” shall mean any
other corporation, limited liability company, partnership, joint venture,
trust, employee benefit plan, organization or other enterprise of which Indemnitee
is or was serving at the request of the Company as a director, officer,
trustee, general partner, managing member, fiduciary, employee or agent.


 


(d)           The term “Expenses” includes,
without limitation, all reasonable 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 and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in, or otherwise involved
in, a Proceeding.  Should any payments by
the Company under this Agreement be determined to be subject to any federal,
state or local income or excise tax, Expenses will also 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 such tax not
have been determined to apply to those payments.  Expenses also shall include (i) Expenses
incurred in connection with any appeal resulting from any Proceeding,
including, without limitation, the premium, security for, and other costs
relating to any cost bond, supersedeas bond, or other appeal bond or its
equivalent and (ii) Expenses incurred by Indemnitee in connection with the
interpretation, enforcement or defense of Indemnitee’s rights under this
Agreement, by litigation or otherwise.


 


(e)           “Independent Counsel” means a
law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent:  (i) the
Company or Indemnitee in any matter material to either such party (other than
with respect to matters concerning the Indemnitee under this Agreement, or of
other indemnitees under similar indemnification agreements), or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder.  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 either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement.  The Company agrees 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.


 


(f)            “Proceeding” shall mean any
threatened, pending or completed action, suit, or proceeding, whether civil,
criminal, administrative, arbitrative or investigative, any appeal in such an
action, suit, or proceeding, and any inquiry or investigation that could lead
to such an action, suit or proceeding irrespective of the initiator
thereof.  The final disposition of a
Proceeding shall be as determined by a settlement or the judgment of a court or
other investigative or administrative body. 
The Board of Directors shall not make a determination as to the final
disposition of a Proceeding.


 


(g)           References to “fines” shall
include any (i) excise taxes assessed with respect to any employee benefit
plan and (ii) penalties; references to “serving at the


 





















 


request
of the Company” shall include any service as a director, officer, trustee,
general partner, managing member, fiduciary, employee or agent which imposes
duties on, or involves services by, such director, officer, trustee, general
partner, managing member, fiduciary, employee or agent with respect to an Enterprise;
and a person who acts in good faith and in a manner he reasonably believed to
be in the interest of the Enterprise shall be deemed to have acted in a manner “not
opposed to the best interests of the Company” as referred to in this Agreement.


 


3.             Indemnity
in Third Party Proceedings.  The Company shall indemnify Indemnitee in
accordance with the provisions of this Section 3 if Indemnitee is a party
to or is threatened to be made a party to or is otherwise involved in any
Proceeding (other than a Proceeding by or in the right of the Company to
procure a judgment in its favor) by reason of the fact that Indemnitee is or was
a director and/or officer of the Company, or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of an Enterprise, against all Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee (or on his behalf) in connection with such Proceeding or any claim,
issue or matter therein, provided it is determined pursuant to Section 8
of this Agreement or by the court having jurisdiction in the matter, that
Indemnitee acted in good faith and in a manner that he reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal Proceeding, had no reasonable cause to believe his conduct was
unlawful.  The termination of any
Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner that he reasonably believed to be in or not opposed to the best
interests of the Company, or, with respect to any criminal Proceeding, had
reasonable cause to believe that his conduct was unlawful.  Indemnitee shall have the right to employ
Indemnitee’s own legal counsel in any Proceeding for which indemnification is
available under this Section 3.


 


4.             Indemnity
in Proceedings By or In the Right of the Company.  The Company shall indemnify Indemnitee in
accordance with the provisions of this Section 4 if Indemnitee is a party
to or is threatened to be made a party to or otherwise involved in any
Proceeding by or in the right of the Company to procure a judgment in its favor
by reason of the fact that Indemnitee is or was a director and/or officer of
the Company, or is or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary, employee or
agent of an Enterprise, against all Expenses actually and reasonably incurred
by Indemnitee (or on his behalf) in connection with such Proceeding provided it
is determined pursuant to Section 8 of this Agreement or by the court
having jurisdiction in the matter, that Indemnitee acted in good faith and in a
manner that he reasonably believed to be in or not opposed to the best
interests of the Company, except that no indemnification shall be made under
this Section 4 in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Company unless and only to the
extent that the Delaware Court of Chancery or the court in which such
Proceeding was brought or is pending, shall determine upon 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
Expenses as the Delaware Court of Chancery or such other court shall deem
proper.  Indemnitee shall have the right
to employ Indemnitee’s own legal counsel in any Proceeding for which
indemnification is available under this Section 4.


 





















 


5.             Indemnification
for Expenses of a Witness.  Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was a director and/or officer of the Company, or is or was serving
at the request of the Company as a director, officer, trustee, general partner,
managing member, fiduciary, employee or agent of an Enterprise, a witness in
any Proceeding to which Indemnitee is not a party, he shall be indemnified
against all Expenses actually and reasonably incurred by Indemnitee (or on his
behalf) in connection therewith.


 


6.             Indemnification
for Expenses of Successful Party.  Notwithstanding any other provision of this
Agreement to the contrary, to the extent that Indemnitee has been successful on
the merits or otherwise in defense of any Proceeding referred to in Sections 3
and/or 4 of this Agreement, or in defense of any claim, issue or matter
therein, including dismissal with or without prejudice, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by Indemnitee
(or on his behalf) in connection therewith. 
If Indemnitee is not wholly successful in any Proceeding referred to in
Sections 3 and/or 4 of this Agreement, but is successful on the merits or
otherwise (including dismissal with or without prejudice) as to one or more,
but less than all claims, issues or matters therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by Indemnitee (or on his behalf) in connection with each
successfully resolved claim, issue or matter. 
For purposes of this Section 6, and without limitation, the
termination of any claim, issue or matter in any Proceeding referred to in
Sections 3 and/or 4 of this Agreement by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or matter.


 


7.             Advances
of Expenses. 
To the fullest extent permitted by applicable law, the Expenses incurred
by Indemnitee pursuant to Sections 3 and/or 4 of this Agreement in connection
with any Proceeding or any claim, issue or matter therein shall be paid by the
Company currently and in advance of the final disposition of such Proceeding or
any claim, issue or matter therein no later than 10 days after receipt by the
Company of a request for an Expense advancement with appropriate
documentation.  The undersigned
Indemnitee hereby undertakes to repay the advanced Expenses to the Company to
the extent that it is ultimately determined pursuant to Section 8, or, in
the event the Indemnitee elects to pursue other remedies pursuant to Section 10,
that the undersigned Indemnitee is not entitled to be indemnified therefor by
the Company.  This agreement of
Indemnitee to repay is unsecured and interest free.


 


8.             Procedure
for Determination of Entitlement to Indemnification.


 


(a)           To obtain indemnification under
this Agreement, Indemnitee shall submit to the Company a written request.


 


(b)           Upon written request by
Indemnitee for indemnification pursuant to Section 8(a) hereof, a
determination, if required by applicable law, with respect to Indemnitee’s
entitlement thereto shall be made in the specific case:  (i) if a Change in Control shall have
occurred, the Disinterested Directors shall direct Independent Counsel to make
such determination in a written opinion to the Board of Directors of the
Company, a copy of which shall be delivered to Indemnitee; or (ii) if a
Change in Control


 





















 


shall
not have occurred, (A) by a majority vote of the Disinterested Directors,
even though less than a quorum of the Board of Directors of the Company, or (B) by
a committee of the Disinterested Directors designated by a majority vote of
Disinterested Directors, even though less than a quorum, or (C) if there
are no Disinterested Directors or, if the Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board of Directors of the Company,
a copy of which shall be delivered to Indemnitee; and, if it is so determined
that Indemnitee is entitled to indemnification, payment to Indemnitee shall be
made within 10 days after such determination. 
Any costs or expenses (including attorneys’ fees and disbursements)
incurred by Indemnitee in cooperating with the person, persons or entity making
the determination discussed in this Section 8(b) with respect to
Indemnitee’s entitlement to indemnification, shall be borne by the Company
(irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.


 


(c)           In the event the determination
of entitlement to indemnification is to be made by Independent Counsel pursuant
to Section 8(b) hereof, the Independent Counsel shall be selected as
provided in this Section 8(c).  If a
Change in Control shall not have occurred, the Independent Counsel shall be
selected by the Board of Directors of the Company, and the Company shall give
written notice to Indemnitee advising him of the identity of the Independent
Counsel so selected.  If a Change in
Control shall have occurred, the Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by the Board
of Directors of the Company, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected.  In either event, Indemnitee or the Company,
as the case may be, may, within 10 days after such written notice of selection
shall have been given, deliver to the Company or to Indemnitee, as the case may
be, a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in
this Agreement, and the objection shall set forth with particularity the
factual basis of such assertion.  Absent
a proper and timely objection, the person so selected shall act as Independent
Counsel.  If such written objection is so
made and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit.  If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 8(b) hereof,
no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the Delaware Court of Chancery or other
court of competent jurisdiction for resolution of any objection which shall
have been made by the Company or Indemnitee to the other’s selection of
Independent Counsel and/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 all objections are so resolved
or the person so appointed shall act as Independent Counsel under Section 8(a) hereof.


 


(d)           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 is ever served with process
or makes an appearance in that Proceeding.


 


9.             Presumptions
and Effect of Certain Provisions.


 


(a)           In making a determination with
respect to entitlement to indemnification hereunder, the person or persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 8(a) of this Agreement,
and the Company shall have the burden of proof in overcoming such presumption
by clear and convincing evidence. 
Neither the failure of the Company (including its Board of Directors or
independent legal counsel) to have made a determination prior to the
commencement of such action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including its Board of
Directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.


 


(b)           If the person, persons or entity
empowered or selected under Section 8 of this Agreement to determine
whether Indemnitee is entitled to indemnification shall not have made a
determination within 30 days after receipt by the Company therefor, the
requisite determination of entitlement to indemnification shall be deemed to
have been made and Indemnitee shall be entitled to such indemnification, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law; provided, however,
that such 30-day period may be extended for a reasonable time, not to exceed an
additional 15 days, if the person, persons or entity making the determination
with respect to entitlement to indemnification in good faith requires such
additional time for the obtaining or evaluating of documentation and/or
information relating thereto.


 


(c)           For purposes of any
determination of whether Indemnitee acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal Proceeding, Indemnitee had no
reasonable cause to believe his conduct was unlawful (collectively, “Good Faith”),
Indemnitee shall be deemed to have acted in Good Faith if Indemnitee’s action
is based on the records or books of account of the Company and any other Enterprise
of which Indemnitee is or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary, employee or
agent or information, opinions, reports or statements, including financial
statements and other financial information, concerning the Company and any
other Enterprise of which Indemnitee is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent or any other person which were prepared or
supplied to Indemnitee by: (i) one or more officers or employees of the Company
and any Enterprise of which Indemnitee is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary,


 





















 


employee
or agent; (ii) 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 (iii) any
committee of the Board of Directors or equivalent managing body of the Company
and any other Enterprise of which Indemnitee is or was serving at the request
of the Company as a director, officer, trustee, general partner, managing
member, fiduciary, employee or agent of which Indemnitee is or was, at the
relevant time, not a member.  The
provisions of this Section 9(c) shall not be deemed to be exclusive
or to limit in any way the other circumstances in which the Indemnitee may be
deemed to have met the applicable standard of conduct set forth in this
Agreement.


 


(d)           The knowledge and/or actions, or
failure to act, of any director, officer, agent or employee of the Company and
any other Enterprise of which Indemnitee is or was serving at the request of
the Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.


 


10.          Remedies
of Indemnitee.


 


(a)           In the event that (i) a
determination is made pursuant to Section 8(b) of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 7 of this Agreement, (iii) no
determination of entitlement to indemnification shall have been made pursuant
to Section 8(b) of this Agreement within the time period provided in Section 9(b) after
receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 5, Section 6, the
last sentence of Section 8(b), or the last sentence of Section 2(d) of
this Agreement within 10 days after receipt by the Company of a written request
therefor, or (v) payment of indemnification pursuant to Section 3 or Section 4
of this Agreement is not made within 10 days after a determination has been
made that Indemnitee is entitled to indemnification, Indemnitee shall be
entitled to an adjudication by the Delaware Court of Chancery of his
entitlement to such indemnification or advancement of Expenses and appeals
therefrom, concluding in a final and unappealable judgment by the Delaware
Supreme Court.  The Board of Directors
shall not make a determination as to the final disposition of such
adjudication.  The Company shall not
oppose Indemnitee’s right to seek any such adjudication.


 


(b)           In the event that a
determination shall have been made pursuant to Section 8(b) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding commenced pursuant to this Section 10 shall be conducted in all
respects as a de novo trial on the merits and Indemnitee shall not be
prejudiced by reason of that adverse determination.


 


(c)           If a determination shall have
been made pursuant to Section 8(b) of this Agreement that Indemnitee
is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding commenced pursuant to this Section 10,
absent (i) a misstatement by Indemnitee of a material fact, or an omission
of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection


 





















 


with
the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law.


 


(d)           In the event that Indemnitee,
pursuant to this Section 10, seeks a judicial adjudication of his rights
under, or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all expenses (of the types described in the definition of
Expenses in Section 2(d) of this Agreement) actually and reasonably
incurred by him in such judicial adjudication regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification.


 


(e)           The Company shall be precluded
from asserting in any judicial proceeding commenced pursuant to this Section 10
that the procedures and presumptions of this Agreement are not valid, binding
and enforceable and shall stipulate in any such court that the Company is bound
by all the provisions of this Agreement.


 


11.          Indemnification
and Advancement of Expenses Under this Agreement Not Exclusive; Survival of
Rights.  The
rights of indemnification and to receive advancement of Expenses as provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under the Certificate of Incorporation or Bylaws of
the Company, any other agreement, any vote of stockholders or disinterested
directors, the General Corporation Law of the State of Delaware, or
otherwise.  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 prior to such amendment, alteration or repeal.  To the extent that a change in the General
Corporation Law of the State of Delaware, whether by statute or judicial
decision, permits greater indemnification or advancement of Expenses than would
be afforded currently under the Certificate of Incorporation of the Company and
this Agreement, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right
and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other right or remedy.


 


12.          Partial
Indemnification. 
If Indemnitee is entitled under any provision of this Agreement to
indemnification or to receive advancement by the Company for a portion of the
Expenses, judgments, fines, penalties or amounts paid in settlement actually
and reasonably incurred by Indemnitee (or on his behalf) in connection with
such Proceeding, or any claim, issue or matter therein, but not, however, for
the total amount thereof, the Company shall nevertheless indemnify Indemnitee
for the portion thereof to which Indemnitee is entitled.


 


13.          Rights
Continued.  The
rights of indemnification and to receive advancement of Expenses as provided by
this Agreement shall continue as to Indemnitee even though Indemnitee may have
ceased to be a director or officer of the Company and shall inure to the
benefit of Indemnitee’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.


 





















 


14.          No
Construction as an Employment Agreement or Any Other Commitment.  Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ or as an officer of the Company or any of its subsidiaries, if
Indemnitee currently serves as an officer of the Company, or to be renominated
or reelected as a director of the Company, if Indemnitee currently serves as a
director of the Company.


 


15.          Liability
Insurance.  To
the extent the Company maintains an insurance policy or policies providing liability
insurance for directors, officers, trustees, general partners, managing
members, fiduciaries, employees or agents of the Company or any other Enterprise
which such person serves at the request of the Company, Indemnitee shall be
covered by such policy or policies in accordance with its or their terms, to
the maximum extent of the coverage available for any director, officer, trustee,
general partner, managing member, fiduciary, employee or agent under such
policy or policies.


 


16.          No
Duplication of Payments.  The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable under this
Agreement if, and to the extent that, Indemnitee has otherwise actually
received such payment under any contract, agreement or insurance policy, the
Certificate of Incorporation or Bylaws of the Company, or otherwise.


 


17.          Subrogation.  In the event of payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all the rights of recovery of Indemnitee, who shall execute all
papers required and shall do everything that may be necessary to secure such
rights, including without limitation the execution of such documents as may be
necessary to enable the Company effectively to bring suit to enforce such
rights.


 


18.          Exceptions.  Notwithstanding any other
provision in this Agreement, the Company shall not be obligated pursuant to the
terms of this Agreement, to (i) indemnify or advance Expenses to
Indemnitee with respect to any claim, issue or matter therein, brought or made
by Indemnitee by way of cross-claim, counter claim or the like, or (ii) indemnify
Indemnitee with respect to any Proceeding in which final judgment is rendered
against Indemnitee for an accounting of profits made from the purchase and sale
or the sale and purchase by Indemnitee of securities of the Company pursuant to
the provisions of Section 16(b) of the Act.


 


19.          Notices.  Any notice or other
communication required or permitted to be given or made to the Company or
Indemnitee pursuant to this Agreement shall be given if made in writing and
deposited in the United States mail, with postage thereon prepaid, addressed to
the person to whom such notice or communication is directed at the address of
such person on the records of the Company, and such notice or communication
shall be deemed given or made at the time when the same shall be so deposited
in the United States mail.  Any such
notice or communication to the Company shall be addressed to the Secretary of
the Company.


 


20.          Contractual
Rights.  The
right to be indemnified or to receive advancement of Expenses under this
Agreement (i) is a contract right based upon good and valuable


 





















 


consideration,
pursuant to which Indemnitee may sue, (ii) is and is intended to be
retroactive and shall be available as to events occurring prior to the date of
this Agreement and (iii) shall continue after any rescission or
restrictive modification of this Agreement as to events occurring prior
thereto.


 


21.          Severability.  If any provision or provisions
of this Agreement shall be held to be invalid, illegal or unenforceable for any
reason whatsoever, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby;  to the fullest extent possible, the
provisions of this Agreement shall be construed so as to give effect to the
intent manifested by the provisions held invalid, illegal or unenforceable; and
those provision or provisions held to be invalid, illegal or unenforceable for
any reason whatsoever 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.


 


22.          Successors;
Binding Agreement. 
The Company shall require and cause any successor (whether direct or
indirect) by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by written
agreement in form and substance reasonably satisfactory to Indemnitee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform if no such
succession had taken place.  As used in
this Agreement, “Company” shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid that executes and
delivers the agreement provided for in this Section 22 or that otherwise
becomes bound by the terms and provisions of this Agreement by operation of
law.  This Agreement shall be binding
upon the Company and its successors and assigns (including, without limitation,
any direct or indirect successor by purchase, merger, consolidation or
otherwise to all or substantially all of the business or assets of the Company)
and will inure to the benefit of Indemnitee (and Indemnitee’s spouse, if
Indemnitee resides in Texas or another community property state), heirs,
executors and administrators.


 


23.          Counterparts,
Modification, Headings, Gender.


 


(a)           This Agreement may be executed
in counterparts, each of which shall constitute one and the same instrument,
and either party hereto may execute this Agreement by signing any such
counterpart.


 


(b)           No provisions of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by Indemnitee and an appropriate
officer of the Company.  No waiver by any
party at any time of any breach by any other party of, or compliance with, any
condition or provision of this Agreement to be performed by any other party shall
be deemed a waiver of similar or dissimilar provisions or conditions at the
same time or at any prior or subsequent time.


 


(c)           Section headings are not to
be considered part of this Agreement, are solely for convenience of reference,
and shall not affect the meaning or interpretation of this Agreement or any
provision set forth herein.


 





















 


(d)           Pronouns in masculine, feminine
and neuter genders shall be construed to include any other gender, and words in
the singular form shall be construed to include the plural and vice versa,
unless the context otherwise requires.


 


24.          Exclusive
Jurisdiction; Governing Law.  The Company and Indemnitee agree that all
disputes in any way relating to or arising under this Agreement, including,
without limitation, any action for advancement of Expenses or indemnification,
shall be litigated, if at all, exclusively in the Delaware Court of Chancery,
and if necessary, the corresponding appellate courts.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without giving
effect to the principles of conflicts of laws. 
The Company and Indemnitee (i) expressly submit themselves to the
personal jurisdiction of the Delaware Court of Chancery for purposes of any
action or proceeding arising out of or in connection with this Agreement, (ii) irrevocably
appoint, to the extent such party is not a resident of the State of Delaware,
The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801
as its agent in the State of Delaware as such party’s agent for acceptance of
legal process in connection with any such action or proceeding against such
party with the same legal force and validity as if served upon such party
personally within the State of Delaware, (iii) waive any objection to the
laying of venue of any such action or proceeding in the Delaware Court of
Chancery, and (iv) waive, and agree not to plead or to make, any claim
that any such action or proceeding brought in the Delaware Court of Chancery
has been brought in an improper or otherwise inconvenient forum.


 


25.          Duration
of Agreement. 
This Agreement shall continue until and terminate upon the later of: (a) 10
years after the date that Indemnitee shall have ceased to serve as a director
and/or officer of the Company or director, officer, trustee, general partner,
managing member, fiduciary, employee or agent of any other Enterprise which
Indemnitee served at the request of the Company; or (b) 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 pursuant to Section 10
of this Agreement relating thereto.


 


26.          Contribution.  If it is established, under Section 8
or otherwise, that Indemnitee has the right to be indemnified under this
Agreement in respect of any claim, but that right is unenforceable by reason of
applicable law or public policy, then, to the fullest extent applicable law
permits, the Company, in lieu of indemnifying or causing the indemnification of
Indemnitee under this Agreement, will 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 Proceeding, in such proportion as is deemed fair and reasonable in
light of all the circumstances of that Proceeding in order to reflect:


 


(a)           the relative benefits Indemnitee
and the Company have received as a result of the event(s) or transactions(s)
giving rise to that Proceeding; or


 


(b)           the relative fault of Indemnitee
and of the Company and its other functionaries in connection with those
event(s) or transaction(s).


 





















 


IN WITNESS WHEREOF, the Company
and Indemnitee have executed this Agreement as of the date and year first above
written.


 


	
   

  	
  STROUD ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE