Document:

Exhibit 10.1

 

OMNIBUS
AGREEMENT

 

AMONG

 

MAJEED
S. NAMI,

 

ARIANA
ENERGY LLC,

 

TRUST
ENERGY COMPANY, LLC,

 

VANGUARD
NATURAL GAS, LLC

 

AND

 

VANGUARD
NATURAL RESOURCES, LLC

 

 

OMNIBUS
AGREEMENT

 

THIS OMNIBUS
AGREEMENT is entered into on, and effective as of, October 29, 2007 (the “Execution
Date”), among Vanguard Natural Resources, LLC, a Delaware limited liability
company (the “Company”), Ariana Energy LLC, a Tennessee limited
liability company (“Ariana”), Trust Energy Company, a Kentucky limited liability
company (“TEC”), Vanguard Natural Gas, LLC, a Delaware limited liability
company (“VNG”) and Majeed S. Nami (“Nami”). The above-named
entities are sometimes referred to in this Agreement each as a “Party”
and collectively as the “Parties.”

 

WHEREAS, the
Parties desire by their execution of this Agreement to evidence their
understanding, as more fully set forth in Article 2 of this Agreement,
with respect to certain indemnification obligations of Nami.

 

NOW,
THEREFORE, in consideration of the premises and the covenants, conditions and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:

 

ARTICLE 1

Construction

 

Section 1.1             Definitions. Capitalized terms
used, but not defined herein, shall have the meanings given them in the LLC
Agreement. As used in this Agreement, the following terms shall have the
respective meanings set forth below:

 

“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under
common control with the Person in question.

 

“Agreement”
means this Omnibus Agreement, as it may be amended, modified or supplemented
from time to time in accordance with the terms hereof.

 

“Ariana”
has the meaning given such term in the preamble to this Agreement.

 

“Nami
Entity” means any of Nami and Persons controlled by Nami, in each case
other than the members of the Company Group.

 

“Claim
Notice” has the meaning provided such term in Section 2.3(a).

 

“Closing
Date” means April 18, 2007.

 

“Common
Units” has the meaning given such term in the LLC Agreement.

 

“Company”
has the meaning given such term in the preamble to this Agreement.

 

“Company Assets” means all of the
assets contributed to and/or retained by the Company Group in connection with
the Nami Restructuring Plan and includes the assets, or portions thereof,
conveyed, contributed or otherwise transferred or intended to be conveyed,
contributed 

 

 

or otherwise transferred to any member of the Company Group not
subsequently conveyed to Vinland, or owned by or necessary for the operation of
the business, properties or assets of any member of the Company Group, prior to
or as of the Execution Date.

 

“Company
Group” means the Company, TEC, Ariana, VNG and any Subsidiary of any such
Person.

 

“Conflicts
Committee” has the meaning given such term in the LLC Agreement.

 

“Control”
or “control” means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of Voting Securities, by contract or otherwise.

 

“Covered
Counsel” has the meaning given such term in Section 2.3(b).

 

“Covered Environmental Losses” means all losses, damages, liabilities,
claims, demands, causes of action, judgments, settlements, fines, penalties,
costs and expenses (including, without limitation, costs and expenses of any
Environmental Activity, court costs and reasonable attorney’s and experts’
fees) of any and every kind or character, by reason of or arising out of:

 

(i)            any violation or correction of violation of
Environmental Laws, including such corrections constituting performance of any
Environmental Activity; or

 

(ii)           any event, omission or condition associated
with ownership or operation of the Company Assets (including the exposure to or
presence of Hazardous Substances on, under, about or migrating to or from the Company
Assets or the exposure to or Release or threatened Release of Hazardous
Substances on, under, or about or from any non-Company Asset to the extent
arising out of operation of the Company Assets, including the transport or
disposal or arrangement for transport or disposal of Hazardous Substances to
such non-Company Assets) including, without limitation, (A) the cost and
expense of any Environmental Activities and (B) the cost and expense for any
environmental or toxic tort pre-trial, trial or appellate legal or litigation
support work.

 

but only to the extent that such violation
described in clause (i) or such events, omissions or conditions described in
clause (ii) occurred before the Closing Date.

 

“Direct
Claim” has the meaning given such term in Section 2.3(d).

 

“Environmental Activities” shall
mean any investigation, study, assessment, evaluation, sampling, testing,
monitoring, containment, removal, disposal, closure, corrective action,
remediation (regardless of whether active or passive), natural attenuation,
restoration, bioremediation, response, repair, corrective measure, cleanup or
abatement that is required or necessary under any applicable Environmental Law,
including institutional or engineering controls or participation in a
governmental voluntary cleanup program to conduct voluntary investigatory and remedial
actions for the clean-up, removal or remediation of Hazardous Substances that
exceed actionable levels established pursuant to Environmental Laws, or
participation in a supplemental environmental project in partial or whole
mitigation of a fine or penalty.

 

2

 

“Environmental Laws” means all
federal, state, and local laws, statutes, rules, regulations, orders,
judgments, ordinances, codes, injunctions, decrees, Environmental Permits and
other legally enforceable requirements and rules of common law relating to (a)
pollution or protection of the environment or natural resources including,
without limitation, the federal Comprehensive Environmental Response,
Compensation and Liability Act, the Superfund Amendments and Reauthorization
Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean
Water Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the
Oil Pollution Act of 1990, the Hazardous Materials Transportation Law, the
Marine Mammal Protection Act, the Endangered Species Act, the National
Environmental Policy Act and other environmental conservation and protection
laws, each as amended through the Closing Date, (b) any Release or threatened
Release of, or any exposure of any Person or property to, any Hazardous
Substances and (c) the generation, manufacture, processing, distribution, use,
treatment, storage, transport or handling of any Hazardous Substances.

 

“Environmental Permit” means any
permit, approval, identification number, license, registration, consent,
exemption, variance or other authorization required under or issued pursuant to
any applicable Environmental Law.

 

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

 

“Execution
Date” has the meaning given such term in the preamble to this Agreement.

 

“Expiration
Date” has the meaning given such term in Section 2.1.

 

“Governmental
Authority” means any governmental,
quasi-governmental, state, county, city or other political subdivision of the
United States or any other country, or any agency, court or instrumentality,
foreign or domestic, or statutory or regulatory body thereof.

 

“Hazardous Substance” means (a)
any substance that is designated, defined or classified under any Environmental
Law as a hazardous waste, solid waste, hazardous material, pollutant,
contaminant or toxic or hazardous substance, or terms of similar meaning, or
that is otherwise regulated under any Environmental Law, including, without
limitation, any hazardous substance as defined under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, (b) oil as
defined in the Oil Pollution Act of 1990, as amended, including oil, gasoline,
natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel and other
refined petroleum hydrocarbons and petroleum products and (c) radioactive
materials, asbestos containing materials or polychlorinated biphenyls.

 

“Indemnified
Parties” shall have the meaning assigned to such term in Section 2.2.

 

“Indemnity
Agreement” means the Amended and Restated Indemnity Agreement, dated as of
September 11, 2007, by and among the Company, TEC, Ariana, VNG, Nami Resources
Company L.L.C. and Vinland Energy Eastern, LLC.

 

“LLC
Agreement” means the Second Amended and Restated Limited Liability Company
Agreement of the Company, dated as of the Execution Date, as such agreement is
in effect on the Execution Date, to which reference is hereby made for all
purposes of this Agreement. An amendment or modification to the LLC Agreement
subsequent to the Execution Date shall be 

 

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given effect for the purposes of this Agreement only if it has received
the approval that would be required pursuant to Section 3.5 hereof if such
amendment or modification were an amendment or modification of this Agreement.

 

“Losses”
means any liabilities, losses, damages, awards, costs and expenses (including
reasonable fees and expenses of counsel, consultants, experts and other
professional fees and any and all costs and expenses (including reasonable
legal fees and accounting fees)).

 

“Nami”
has the meaning given such term in the preamble to this Agreement.

 

“Nami
Restructuring Plan” means the restructuring plan involving the Company
Group as described in the Registration Statement.

 

“Person”
means a natural person, corporation, partnership, joint venture, trust, limited
liability company, unincorporated organization or any other entity, including
any Governmental Authority.

 

“Prospectus”
means the final prospectus, dated September    , 2007, relating
to the initial public offering of common units representing limited liability
company interests in the Company, as filed with Securities and Exchange
Commission pursuant to Rule 424(b) under the Securities Act of 1933.

 

“Registration Statement” means the Registration Statement on
Form S-1 (Registration No. 333-142363) filed with the Securities and Exchange
Commission with respect to the initial public offering of Common Units by the
Company.

 

“Release”
means any release, spill, emission, leaking, pumping, migrating, injecting,
deposit, disposal, discharge, dispersal, or leaching into the indoor or outdoor
environment, including into or out of any real property.

 

“Subsidiary”
has the meaning given such term in the LLC Agreement.

 

“Tax
Authority” means any Governmental Authority having jurisdiction over the
assessment, determination, collection or imposition of any Tax.

 

“Tax
Returns” means any report, return, election, document, estimated tax
filing, declaration or other filing provided to any Tax Authority, including
any amendments thereto.

 

“Taxes”
means (i) all taxes, assessments, charges, duties, levies, imposts,
unclaimed property and escheat obligations or other similar charges imposed by
a Governmental Authority, including all income, franchise, profits, capital
gains, capital stock, transfer, gross receipts, sales, use, transfer, service,
occupation, excise, severance, windfall profits, premium, stamp, license,
payroll, employment, social security, unemployment, disability, environmental
(including taxes under Code section 59A), alternative minimum, add-on,
value-added, withholding and other taxes, assessments, charges, duties, levies,
imposts or other similar charges of any kind whatsoever (whether payable directly
or by withholding and whether or not requiring the filing of a Tax Return), and
all estimated taxes, deficiency assessments, additions to tax, additional
amounts imposed by any Governmental Authority, penalties and interest, but
excluding any and 

 

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all ad valorem, property or similar taxes; (ii) any liability for
the payment of any amount of the type described in the immediately preceding clause (i)
as a result of being a member of a consolidated, affiliated, unitary, combined,
or similar group with any other corporation or entity at any time on or prior
to the Closing Date; and (iii) any liability for the payment of any amount
of the type described in the preceding clauses (i) or (ii) whether as a result
of contractual obligations to any other Person or operation of law.

 

“TEC”
has the meaning given such term in the preamble to this Agreement.

 

“Third-Party
Claim” has the meaning provided such term in Section 2.3(a).

 

“VNG”
has the meaning given such term in the preamble to this Agreement.

 

“Voting
Securities” means securities of any class of Person entitling the holders
thereof to vote in the election of members of the board of directors or other
similar governing body of the Person.

 

Section 1.2             Construction. Unless the context
requires otherwise: (a) any pronoun used in this Agreement shall include
the corresponding masculine, feminine or neuter forms, and the singular form of
nouns, pronouns and verbs shall include the plural and vice versa; (b) references
to Articles and Sections refer to Articles and Sections of this Agreement; and
(c) the term “include” or “includes” means includes, without limitation,
and “including” means including, without limitation.

 

ARTICLE 2

Indemnification

 

Section 2.1             Survival. Any right of
indemnification or reimbursement pursuant to this Article 2 shall expire
with respect to (a) Losses arising from any matters covered by Section 2.2(a),
at the close of business Houston, Texas time on the date that is 60 days after
the expiration of the applicable statute of limitations; (b) Losses arising
from any matters covered by Section 2.2(b) or Section 2.2(e), at the close
of business Houston, Texas time on the third anniversary of the Closing Date;
(c) Losses arising from any matters covered by Section 2.2(c), at the
close of business Houston, Texas time on the first anniversary of the Closing
Date; and (d) Losses arising from any matters covered by Section 2.2(d),
at the close of business Houston, Texas time on April 18, 2009 (each, an “Expiration
Date”); unless on or prior to the applicable Expiration Date, Nami has
received written notice in good faith from the Indemnified Party of such
breach, inaccuracy or non-fulfillment, in which case the Indemnified Party may
continue to pursue its right to indemnification or reimbursement hereunder
beyond the applicable Expiration Date with respect to the matter as to which Nami
has so received such written notice.

 

Section 2.2             Indemnification. Subject to the
provisions of Section 2.4, Nami shall indemnify, defend and hold harmless
each entity of the Company Group and their respective successors and permitted
assigns (the “Indemnified Parties”) from and against:

 

(a)           all
Losses incurred or suffered by them as a result of, relating to or arising out
of any and all Taxes that relate to or result from the income, business or
operations of any member of the Company Group prior to the Closing Date,
including, but not limited 

 

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to, the
formation of the members of the Company Group and the Nami Restructuring Plan;

 

(b)           all
Covered Environmental Losses suffered or incurred by the Company Group or any
Indemnified Party relating to or arising out of the Company Assets or
operations associated therewith;

 

(c)           all
Losses incurred or suffered by them as a result of, relating to or arising out
of the failure of the Company Group to have on the Closing Date any consent or
governmental permit that renders the Company Group unable to use or operate the
Company Assets in substantially the same manner that the Company Assets were
owned and operated by Nami and his Affiliates immediately prior to the Closing
Date as described in the Registration Statement;

 

(d)           all
Losses incurred or suffered by them as a result of, relating to or arising out
of all assets and liabilities conveyed out of the Company Group, other than the
mere fact of such conveyances, in the separation with Vinland Energy Eastern,
LLC or its Affiliates (excluding members of the Company Group) (collectively, “Vinland”);
and

 

(e)           all
Losses incurred or suffered by them as a result of, relating to or arising out
of the failure of the Company Group to be the owner of valid and indefeasible
easement rights, leasehold and/or fee ownership interests in and to the lands
on which are located any Company Assets, including, without limitation, oil,
gas and mineral leases (including wells), and such failure renders the Company
Group liable or unable to use or operate the Company Assets in substantially
the same manner that the Company Assets were used and operated by Nami and his
Affiliates immediately prior to the Closing Date as described in the
Registration Statement;

 

Section 2.3             Indemnification Procedures. Claims
for indemnification under this Agreement shall be asserted and resolved as
follows:

 

(a)           If any of the Indemnified Parties receives
notice of the assertion or commencement of any claim, demand, action, suit or
proceeding made or brought by any third party (a “Third-Party Claim”)
against such Indemnified Party with respect to which Nami is obligated to
provide indemnification under this Agreement, the Indemnified Party will give Nami
reasonably prompt written notice thereof (“Claim Notice”), but in no
event later than 30 days after such Indemnified Party’s receipt of such notice
of such Third-Party Claim. The Claim Notice by the Indemnified Party will
describe the Third-Party Claim in reasonable detail, will include copies of all
available material written evidence thereof and will indicate the estimated
amount, if reasonably practicable, of the Losses that have been or may be
sustained by the Indemnified Party. Failure to timely provide such Claim Notice
shall not affect the right of the Indemnified Party to indemnification
hereunder, except to the extent Nami is prejudiced by such delay or omission.

 

(b)           Nami shall have the right to defend the
Indemnified Party against such Third-Party Claim. If Nami notifies the
Indemnified Party in writing that Nami elects to assume the defense of the
Third-Party Claim (such election to be without prejudice to the right of Nami 

 

6

 

to dispute whether such claim is an indemnifiable Loss under this Article 2),
then Nami shall have the right to defend such Third-Party Claim with counsel
selected by Nami (who shall be reasonably satisfactory to the Indemnified
Party), by all appropriate proceedings, to a final conclusion or settlement at
the discretion of Nami in accordance with this Section 2.3(b); provided, however, that the
Indemnified Party may employ separate counsel, and Nami will bear the
reasonable expenses of such separate counsel (a “Covered Counsel”), if,
in the written opinion of counsel to the Indemnified Party, use of counsel of Nami’s
choice would be expected to give rise to a conflict of interest. Subject to the
proviso of the preceding sentence, Nami shall have full control of such defense
and proceedings, including any compromise or settlement thereof; provided that Nami shall not enter into any settlement agreement
without the written consent of the Indemnified Party (which consent shall not
be unreasonably withheld, conditioned or delayed), provided
further, that such consent shall not be required if (i) the
settlement agreement contains a complete and unconditional general release by
the third party asserting the Third-Party Claim in favor of all Indemnified
Parties affected by such claim, (ii) Nami has assumed all liability
(without deduction) with regard to such settlement, and (iii) the
settlement agreement does not contain any sanction or restriction upon the
conduct of any business by the Indemnified Party or its Affiliates. If
requested by Nami, the Indemnified Party agrees, at the sole cost and expense
of Nami, to cooperate with Nami and his counsel in contesting any Third-Party
Claim that Nami elects to contest, including the making of any related
counterclaim against the Person asserting the Third-Party Claim or any
cross-complaint against any Person. The Indemnified Party may participate in,
but not control, any defense or settlement of any Third-Party Claim controlled
by Nami pursuant to this Section 2.3(b), and the Indemnified Party shall
bear its own costs and expenses with respect to such participation except with
respect to any Covered Counsel.

 

(c)           If Nami does not notify the Indemnified
Party that Nami elects to defend the Indemnified Party pursuant to Section 2.3(b),
then the Indemnified Party shall have the right to defend, and be reimbursed
for its reasonable cost and expense (but only if the Indemnified Party is
actually entitled to indemnification hereunder) with respect to the Third-Party
Claim with counsel selected by the Indemnified Party (who shall be reasonably
satisfactory to Nami), by all appropriate proceedings, which proceedings shall
be prosecuted diligently by the Indemnified Party. In such circumstances, the
Indemnified Party shall defend any such Third-Party Claim in good faith and
have full control of such defense and proceedings; provided,
however, that the Indemnified Party may not enter into any compromise or
settlement of such Third-Party Claim if indemnification is to be sought
hereunder, without Nami’s consent (which consent shall not be unreasonably
withheld, conditioned or delayed). Nami may participate in, but not control,
any defense or settlement controlled by the Indemnified Party pursuant to this Section 2.3(c),
and Nami shall bear his own costs and expenses with respect to such
participation.

 

(d)           Subject to the other provisions of this Article 2,
a claim for indemnification for any matter not involving a Third-Party Claim (a
“Direct Claim”) may be asserted by written notice to Nami. Such notice
by the Indemnified Party will describe the Direct Claim in reasonable detail,
will include copies of all available material written evidence thereof and will
indicate the estimated amount, if reasonably practicable, of Losses that have
been or may be sustained by the Indemnified Party. Nami will have a period of
30 days within which to respond in writing to such Direct Claim. If Nami does
not so respond within such 30-

 

7

 

day period, Nami will be deemed to have rejected such claim, in which
event the Indemnified Party will be free to pursue such remedies as may be
available to the Indemnified Party on the terms and subject to the provisions
of this Agreement.

 

(e)           In the event an Indemnified Party shall
recover Losses in respect of a claim of indemnification under this Article 2,
no other Indemnified Party shall be entitled to recover the same Losses in
respect of a claim for indemnification.

 

Section 2.4             Limitations on Liability. Notwithstanding
anything to the contrary herein:

 

(a)           in no event shall Nami’s aggregate liability
arising out of or relating to (i) the matters specified in Section 2.2(b)
exceed $1,500,000.00; (ii) the matters specified in Section 2.2(c) exceed
$1,000,000.00; and (iii) the matters specified in Section 2.2(e) exceed (A)
$15,000,000.00 for claims made prior to the first anniversary of the Closing
Date (B) $12,500,000 for claims made prior to the second anniversary of the Closing
Date and (C) $10,000,000 for claims made prior to the third anniversary of the Closing
Date.

 

(b)           no claims may be made against Nami for
indemnification pursuant to Section 2.2(b), Section 2.2(c), Section 2.2(d) or
Section 2.2(e) unless the aggregate dollar amount of the Losses suffered or
incurred by the Indemnified Parties pursuant to such Section 2.2(b), Section
2.2(c), Section 2.2(d) or Section 2.2(e) exceed $250,000, after such time Nami
shall be liable for the full amount of such claims.

 

(c)           no Indemnified Party shall be entitled to
indemnification under this Article 2 for any Losses to the extent that
such Person has received insurance proceeds or reimbursement payments from any
third party in respect of such Loss. Each member of the Company Group agrees to
use its commercially reasonable best efforts to realize any applicable
insurance proceeds or to recover any amounts under contractual indemnity or
reimbursement rights available to such Person.

 

Section 2.5             Exclusive Remedy.

 

(a)           Notwithstanding anything to the contrary
herein, the indemnity provisions in this Article 2 and the Indemnity
Agreement shall constitute the sole and exclusive remedies of all Indemnified
Parties under or by reason of any of the matters specified in this Agreement.

 

(b)           NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, NAMI SHALL NOT BE LIABLE FOR PUNITIVE, EXEMPLARY OR CONSEQUENTIAL
DAMAGES, LOST PROFITS OR LOST BENEFITS, LOSS OF ENTERPRISE VALUE, DIMINUTION IN
VALUE OF ANY BUSINESS, DAMAGES TO REPUTATION OR LOSS TO GOODWILL, WHETHER BASED
ON CONTRACT, TORT, STRICT LIABILITY, OTHER LAW OR OTHERWISE AND WHETHER OR NOT
ARISING FROM ANY OTHER PARTY’S SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT
LIABILITY OR OTHER FAULT; PROVIDED, HOWEVER, THAT THIS SECTION 2.5 SHALL NOT LIMIT A PARTY’S
RIGHT TO RECOVERY UNDER THIS ARTICLE 2 FOR ANY SUCH DAMAGES TO THE EXTENT SUCH
PARTY IS REQUIRED TO PAY SUCH DAMAGES TO A THIRD PARTY IN CONNECTION WITH A
MATTER FOR WHICH SUCH PARTY IS OTHERWISE ENTITLED TO INDEMNIFICATION UNDER THIS
ARTICLE 2 .

 

8

 

ARTICLE 3

Miscellaneous

 

Section 3.1             Choice of Law; Submission to
Jurisdiction. This Agreement shall be subject to and governed by the laws
of the State of Texas, excluding any conflicts-of-law rule or principle that
might refer the construction or interpretation of this Agreement to the laws of
another state. Each Party hereby submits to the non-exclusive jurisdiction of
the federal courts in the State of Texas and to venue in Houston, Texas.

 

Section 3.2             Notice. All notices or requests or
consents provided for or permitted to be given pursuant to this Agreement must
be in writing and must be given by depositing same in the United States mail,
addressed to the Person to be notified, postpaid and registered or certified
with return receipt requested or by delivering such notice in person or by fax
to such Party. Notice given by personal delivery or mail shall be effective
upon actual receipt. Notice given by fax shall be effective upon actual receipt
if received during the recipient’s normal business hours, or at the beginning
of the recipient’s next business day after receipt if not received during the
recipient’s normal business hours. All notices to be sent to a Party pursuant
to this Agreement shall be sent to or made at the address set forth below such
Party’s signature to this Agreement, or at such other address as such Party may
provide to the other Parties in the manner provided in this Section 3.2.

 

Section 3.3             Entire Agreement. This Agreement
constitutes the entire agreement of the Parties relating to the matters
contained herein, superseding all prior contracts or agreements, whether oral
or written, relating to the matters contained herein.

 

Section 3.4             Effect of Waiver or Consent. No
waiver or consent, express or implied, by any Party to or of any breach or
default by any Person in the performance by such Person of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance by such Person of the same or any
other obligations of such Person hereunder. Failure on the part of a Party to
complain of any act of any Person or to declare any Person in default,
irrespective of how long such failure continues, shall not constitute a waiver
by such Party of its rights hereunder until the applicable statute of
limitations period has run.

 

Section 3.5             Amendment or Modification. This
Agreement may be amended, restated or modified from time to time only by the
written agreement of all the Parties; provided, however, that no member of the Company Group may, without
the prior approval of the Conflicts Committee, agree to any amendment or
modification of this Agreement that will adversely affect the holders of Common
Units. Each such instrument shall be reduced to writing and shall be designated
on its face an “Amendment,” “Addendum” or a “Restatement” to this Agreement.

 

Section 3.6             Assignment. No Party shall have the
right to assign its rights or obligations under this Agreement without the
prior written consent of all of the other Parties.

 

9

 

Section 3.7             Counterparts. This Agreement may be
executed in any number of counterparts with the same effect as if all signatory
Parties had signed the same document. All counterparts shall be construed
together and shall constitute one and the same instrument.

 

Section 3.8             Severability. If any provision of
this Agreement or the application thereof to any Person or circumstance shall
be held invalid or unenforceable to any extent by a court or regulatory body of
competent jurisdiction, the remainder of this Agreement and the application of
such provision to other Persons or circumstances shall not be affected thereby
and shall be enforced to the greatest extent permitted by law.

 

Section 3.9             Withholding or Granting of Consent.
Except as expressly provided to the contrary in this Agreement, each Party may,
with respect to any consent or approval that it is entitled to grant pursuant
to this Agreement, grant or withhold such consent or approval in its sole and
uncontrolled discretion, with or without cause, and subject to such conditions
as it shall deem appropriate.

 

Section 3.10           Laws and Regulations.
Notwithstanding any provision of this Agreement to the contrary, no Party shall
be required to take any act, or fail to take any act, under this Agreement if
the effect thereof would be to cause such Party to be in violation of any
applicable law, statute, rule or regulation.

 

Section 3.11           Rights of Nami,
Members, Assignees and Third Parties. The provisions of this Agreement are
enforceable solely by each of the Parties, their successors and permitted
assigns, and no other Person shall have the right, separate and apart from the
Parties, their successors and permitted assigns, to enforce any provision of
this Agreement or to compel any Party to comply with the terms of this
Agreement. The provisions of this Agreement shall not give rise to any right of
recourse against any employee, officer, director or agent of any Nami Entity or
any member of the Company Group.

 

[SIGNATURE
PAGES FOLLOWS]

 

10

 

IN WITNESS
WHEREOF, the Parties have executed this Agreement on, and effective as of, the Execution
Date.

 

	
   

  	
  MAJEED
  S. NAMI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Majeed S. Nami

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notice:

  
	
   

  	
  104 Nami Plaza, Suite 1

  
	
   

  	
  London, Kentucky 40741

  
	
   

  	
  Attention: Majeed S. Nami

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VANGUARD
  NATURAL RESOURCES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott W. Smith

  
	
   

  	
  Name:

  	
  Scott W. Smith

  
	
   

  	
  Title:

  	
  President and Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  Address for Notice:

  
	
   

  	
  7700 San Felipe, Suite 485

  
	
   

  	
  Houston, Texas 77063

  
	
   

  	
  Phone: (832) 327-2259

  
	
   

  	
  Attention: Scott W. Smith

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VANGUARD
  NATURAL GAS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Vanguard Natural Resources,
  LLC

  
	
   

  	
   

  	
  its Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott W. Smith

  
	
   

  	
  Name:

  	
  Scott W. Smith

  
	
   

  	
  Title:

  	
  President and Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  Address for Notice:

  
	
   

  	
  7700 San Felipe, Suite 485

  
	
   

  	
  Houston, Texas 77063

  
	
   

  	
  Phone: (832) 327-2259

  
	
   

  	
  Attention: Scott W. Smith

  
				

 

 

	
   

  	
  TRUST
  ENERGY COMPANY, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Vanguard Natural Gas, LLC

  
	
   

  	
   

  	
  its Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott W. Smith

  
	
   

  	
  Name:

  	
  Scott W. Smith

  
	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  
	
   

  	
  Address for Notice:

  
	
   

  	
  7700 San Felipe, Suite 485

  
	
   

  	
  Houston, Texas 77063

  
	
   

  	
  Phone: (832) 327-2259

  
	
   

  	
  Attention: Scott W. Smith

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ARIANA
  ENERGY LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Vanguard Natural Gas, LLC

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott W. Smith

  
	
   

  	
  Name:

  	
  Scott W. Smith

  
	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  
	
   

  	
  Address for Notice:

  
	
   

  	
  7700 San Felipe, Suite 485

  
	
   

  	
  Houston, Texas 77063

  
	
   

  	
  Phone: (832) 327-2259

  
	
   

  	
  Attention: Scott W. SmithExhibit 10.1

 

NUVEEN INVESTMENTS, INC.

333 West Wacker Drive

Chicago, IL 60606

 

October 31, 2007

VIA FACSIMILE AND U.S. MAIL

Timothy
Schwertfeger

Nuveen
Investments, Inc.

333 West Wacker
Drive

Chicago, IL 60606

 

Mr. Schwertfeger,

Your leadership of Nuveen Investments, Inc. (“JNC”)
since 1996 has helped establish it as one of the premier asset management firms
in the United States.  During this
period, JNC’s assets under management grew from approximately $30 billion of
municipal assets to approximately $170 billion of fixed income and equity
assets, a remarkable record of growth and development.  As JNC embarks on a new path as a private
company in a landmark transaction, it is appropriate to more formally address
your ongoing arrangements with JNC and its affiliates.

Effective July 1, 2007, the Board of Directors of JNC
(the “JNC Board”) appointed a new Chief Executive Officer of JNC and you agreed
to continue to provide leadership and strategic direction as non-executive
Chairman of the JNC Board and as Chairman of the Nuveen fund board.  As we have discussed, assuming the proposed
acquisition (the “Merger”) of JNC by Windy City Investments Holdings, L.L.C. (“WCI”)
closes, you will continue as a Nuveen employee and will receive your base
salary as provided in your employment agreement, dated as of November 1, 2002
(the “Employment Agreement”) through the end of the 2007 calendar year and you
will also be entitled to a bonus for 2007 of $6,000,000.  This bonus shall be payable at the time that
bonuses are paid generally to other executives of JNC, but in any event before
March 15, 2008.  Assuming that the Merger
closes, you have agreed that after the end of the 2007 calendar year, you will
retire as a Nuveen employee as of December 31, 2007 and will no longer receive
a salary or bonus or additional equity awards. 
You shall however be entitled to receive employee benefits available to
retirees, including benefits under our pension plan as discussed below and our
retiree medical plan, as the same may be amended from time to time.  In connection with your continuing service on
the Nuveen fund board as a JNC representative as described below, JNC shall
provide you with administrative support and travel arrangements.

In order to formalize your retirement and the transition
of leadership to members of the outstanding senior management team you retained
and mentored during your tenure, you agree to resign, and will be deemed to
have resigned, from all of your positions with JNC and its subsidiaries upon
the closing of the Merger, except that you will remain an employee of JNC until
your retirement on December 31, 2007 as noted above.  Upon the request of the Chief Executive
Officer of JNC and WCI you also agree to resign as a member and Chairman of the

 

 

Nuveen fund board
sometime after the closing of the Merger. 
The current schedule is for this transition to occur by the end of the
second quarter of 2008.

With respect to your participation in the Nuveen
Investments Employee’s Retirement Plan (the “Retirement Plan”) and the Nuveen
Excess Benefit Retirement Plan (the “Excess Plan”), notwithstanding the fact
that your retirement on December 31, 2007 would not otherwise entitle you to a
Full Career Retirement Benefit under the above plans as you will not have
satisfied the called “Rule of 90” provision (when the combination of your age
and years of service equals 90) until March 28, 2008, you will nevertheless be
entitled to the equivalent of a Full Career Retirement Benefit as follows: (1)
you will receive from the Retirement Plan an Early Retirement Benefit
calculated based on your December 31, 2007 retirement, and (2) you will receive
under the Excess Plan a Full Career Retirement Benefit calculated as if your
December 31, 2007 retirement date qualified you for the Rule of 90.  In consideration for these benefits, you
hereby agree to waive any rights under the Retirement Plan or Excess Plan or
otherwise to receive any of the above described benefits as a lump sum benefit
and agree to take them in the form of monthly annuity payments.

As part of your transition upon closing of the Merger,
WCI is pleased to offer you the opportunity to invest $20 million in exchange
for an appropriate amount of Class A Common Units issued by WCI and you hereby
agree to invest such amount.  In
recognition of your continuing efforts on behalf of the JNC and contingent upon
such investment in Class A Common Units, WCI will grant you Class B Common
Units representing 0.5% of the Class B Common Units to be issued to management
of JNC in connection with the Merger. The terms and conditions of your Class A
Common Unit investment and the Class B Common Units issued to you will be
governed by the limited liability agreement of WCI and the relevant
unitholders, subscription, grant and other agreements used with respect to
investments by, and grants of Class A and B Common Units to, management of JNC
generally.

In consideration of the mutual covenants set forth in
this agreement, you hereby agree, effective only upon the closing of the
Merger, to waive any and all rights to receive the severance benefits set forth
in Section 5 of the Employment Agreement. 
For the sake of clarity, you agree that, effective only upon the closing
of the Merger, you shall not be entitled to terminate your employment for “Good
Reason” as defined in your Employment Agreement for any reason, including the
change in your positions that occurred on or prior to the closing of the
Merger, and that the no action taken by JNC or its affiliates shall be
considered to be a termination without “Cause,” as defined in your Employment
Agreement.  You agree that you will not
seek the benefits described above prior to the closing of the Merger.  You may terminate this agreement in the event
the Merger agreement terminates in accordance with its terms.

This letter may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.

Please confirm your agreement as indicated above by
signing below.

 

2

	
   

  	
  Very Truly Yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NUVEEN
  INVESTMENTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John P. Amboian

  
	
   

  	
  Name:

  	
  John P. Amboian

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  WINDY CITY INVESTMENTS HOLDINGS, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed on October 31, 2007:

  	
  By:

  	
  /s/ Mark B. Tresnowski

  
	
   

  	
  Name:

  	
  Mark B. Tresnowski

  
	
   

  	
  Title:

  	
  General Counsel

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Timothy R. Schwertfeger

  	
   

  
	
  Name:

  	
  Timothy R. Schwertfeger

  	
   

  
					

 

 

3

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