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turv_s8grizzleexh10.htm

 

EXHIBIT 10.1

NAVIDEC FINANCIAL SERVICES, INC.

2005 STOCK OPTION PLAN

ARTICLE I

ESTABLISHMENT AND PURPOSE

     1.1 Establishment. Navidec Financial Services, Inc., a Colorado corporation (the  "Company"),  hereby  establishes  a stock  option plan for key  employees, consultants  and  members  of the  Board of  Directors  of the  Company  or of a subsidiary of the Company,  providing  material  services to the Company,  which shall be known as the Navidec  Financial  Services  2005 Stock  Option Plan (the "Plan").  The Company shall enter into Option agreements with Optionees pursuant to the Plan.

     1.2  Purpose.  The purpose of the Plan is to enhance  shareholder  value by attracting,  retaining and motivating key employees,  consultants and members of the Board of  Directors of the Company and of any  subsidiary  of the Company by providing  them with a means to acquire a proprietary  interest in the Company's success.

ARTICLE II

ELIGIBILITY AND PARTICIPATION

     All current and former  employees,  consultants and members of the Board of Directors of the Company (the  "Board"),  and of any  subsidiary of the Company, are  eligible to  participate  in the Plan and receive  Options  under the Plan. Optionees under the Plan shall be selected by the Board, in its sole discretion, from among those current and former  employees,  consultants  and members of the Board of the Company, and of any subsidiary of the Company,  who, in the opinion of the  Board,  are or  were  in a  position  to  contribute  materially  to the Company's continued growth and development and to its long-term success.

ARTICLE III

ADMINISTRATION

     3.1  Administration.  The Board shall be responsible for  administering the Plan.

     (a) The Board is authorized to interpret the Plan; to prescribe, amend, and rescind rules and  regulations  relating to the Plan; to provide for  conditions and  assurances  deemed  necessary or advisable to protect the  interests of the Company with respect to the Plan; and to make all other determinations necessary or   advisable   for   the   administration   of   the   Plan.   Determinations, interpretations, or other actions made or taken by the Board with respect to the Plan and  Options  granted  under  the  Plan  shall be  final  and  binding  and conclusive for all purposes and upon all persons.

     (b) At the  discretion  of the  Board  the  Plan may be  administered  by a Committee  of two or more  non-employee  Directors  appointed  by the Board (the "Committee").  The members of the Committee may be Directors who are eligible to receive  Options under the Plan, but Options may be granted to such persons only by action of the full Board and not by action of the  Committee.  The  Committee shall have full power and authority,  subject to the limitations of the Plan and any limitations imposed by the Board, to construe, interpret and administer the Plan and to make  determinations  which shall be final,  conclusive  and binding upon all  persons,  including  any persons  having any  interests in any Options which may be granted  under the Plan,  and,  by  resolution  or  resolutions  to provide for the creation and issuance of any Option, to fix the terms upon which and the time or times at or within  which,  and the price or prices at which any shares may be purchased  from the Company  upon the exercise of an Option.  Such terms,  time or times and price or prices shall,  in every case, be set forth or incorporated by reference in the instrument or instruments evidencing an Option, and shall be consistent with the provisions of the Plan.

  

  

  

     (c)  Where a  Committee  has been  created  by the Board  pursuant  to this Article III, references in the Plan to actions to be taken by the Board shall be deemed to refer to the Committee as well, except where limited by the Plan or by the Board.

     (d) No member of the Board or the Committee  shall be liable for any action or  determination  made in good  faith  with  respect  to the Plan or any Option granted under it.

ARTICLE IV

STOCK SUBJECT TO THE PLAN

     4.1 Number.  The total number of shares of common stock of the Company (the "Stock")  hereby made  available  and reserved for issuance  under the Plan upon  exercise of Options shall be 5,000,000 shares. The aggregate number of shares of Stock  available  under the Plan shall be subject to  adjustment  as provided in Section 4.3.

     4.2 Unused  Stock.  If an Option shall  expire or terminate  for any reason without having been exercised in full, or if an "immaculate  cashless  exercise" (as  described in Section  5.4)  results in the issuance of a reduced  number of shares in  satisfaction  of an option  grant,  the  unpurchased  shares of Stock subject thereto shall (unless the Plan shall have  terminated)  become available for other Options under the Plan.

     4.3  Adjustment  in  Capitalization.  In the  event  of any  change  in the outstanding  shares of Stock of the  Company  by reason of a stock  dividend  or split, recapitalization,  reclassification, or other similar capital change, the aggregate  number  of  shares  of  Stock  set  forth  in  Section  4.1  shall be appropriately adjusted by the Board, whose determination shall be conclusive. In any such case,  the  number and kind of shares of Stock that are  subject to any Option and the Option price per share shall be proportionately and appropriately adjusted  without any change in the  aggregate  Option price to be paid therefore upon exercise of the Option.

ARTICLE V

TERMS OF STOCK OPTIONS

     5.1 Grant of  Options.  Subject to Section  4.1,  Options may be granted to current  and  former  employees,  consultants  and  members  of the Board of the Company and of any  subsidiary  of the Company at any time and from time to time as  determined  by the  Board.  The Board  shall  have  complete  discretion  in determining  the terms and  conditions  and  number of  Options  granted to each Optionee.  In making such  determinations,  the Board may take into  account the nature of services  rendered by such current and former  employees,  consultants and members of the Board,  their  present  and  potential  contributions  to the Company  and such  other  factors  as the  Board in its  discretion  shall  deem relevant.

     5.2  Option  Agreement;  Terms and  Conditions  to Apply  Unless  Otherwise Specified. As determined by the Board on the date of grant, each Option shall be evidenced by an option agreement (the "Option  Agreement")  that specifies:  the Option price; the duration of the Option; the number of shares of Stock to which the Option applies; such vesting or exercisability  restrictions which the Board may impose;  and any other terms or conditions  which the Board may impose.  All such terms and conditions  shall be determined by the Board at the time of grant of the Option.

     (a) If not  otherwise  specified  by the  Board,  the  following  terms and conditions shall apply to Options granted under the Plan:

          (i) Term.  The  duration of the Option shall be for ten years from the date of grant.

  

  

  

          (ii)  Exercise  of  Option.  If an  Option  is  subject  to a  vesting schedule,  (A)  an  Option  held  by  an  Optionee  who  retires  from employment with the Company after having both reached the age of sixty  and completed  twelve years of service with the Company shall continue to vest in  accordance  with the  vesting  schedule  set  forth in the applicable  Option  Agreement  notwithstanding  the termination of the           Optionee's  employment  with the Company,  provided  that prior to the exercise of the Option such  Optionee  does not after such  retirement  become  employed on a full-time  basis by a competitor  of the Company prior  to  reaching  age  sixty-five,  and  (B) an  Option  held  by a  non-employee  Director of the Company who retires from the Board after completing  at least five years of service to the Company shall become fully vested.

          (iii)  Termination.  Each  Option  granted  pursuant to the Plan shall expire on the earliest to occur of:

               (A) The date set forth in such  Option,  not to exceed  ten years from the date of grant;

               (B) The third anniversary of the completion of the merger or sale of  substantially  all of the Stock or assets of the Company with or to another  company in a  transaction  in which the Company is not the  survivor,  except for the merger of the  Company  into a wholly-owned  subsidiary (and the Company shall not be considered the surviving  corporation  for purposes hereof if the Company or any of its  subsidiaries is the survivor of a reverse  triangular merger and the Company's  shareholders  immediately  prior to the merger  own less  than 50% of the  value of the  Company's  stock immediately after the merger); or

               (C) The termination of the employment of an Optionee for cause by the Company.

          (iv) Acceleration. An Option shall become fully vested and exercisable irrespective  of its other  provisions  (A)  immediately  prior to the completion of the merger or sale of substantially  all of the stock or assets of the Company in a transaction in which the Company is not the survivor,  except for the merger of the  Company  into a  wholly-owned subsidiary  (and the Company  shall not be  considered  the  surviving           corporation  for  purposes  hereof  if  the  Company  or  any  of  it   subsidiaries  is the survivor of a reverse  triangular  merger and the Company's  shareholders  immediately prior to the merger own less than 50% of the value of the Company's stock immediately after the merger); (B) upon termination of the Optionee's  employment with the Company or a subsidiary thereof because of death, disability or normal retirement upon  reaching  the age of  sixty-five;  or (C) in the event  that the Optionee is a non-employee member of the Company's Board of Directors, upon  retirement  from the Company's Board of Directors after reaching the age of seventy.

          (v)  Transferability.  In addition to the Optionee, the Option may be exercised, to the extent exercisable by the Optionee, by the person or persons to whom the Optionee's rights under the Option pass by will or the laws of descent and distribution, by the spouse or the descendants of the Optionee or by trusts for such  persons,  to whom or which the Optionee may have transferred the Option,  or by legal  representative of any of the  foregoing.  Any such  transfer  shall  be made  only in compliance with the  Securities  Act of  1933,  as  amended,  and the requirements therefor as set forth by the Company.

     (b) The Board shall be free to specify terms and conditions  other than and in addition to those set forth above, in its discretion.

     (c) All Option  Agreements shall  incorporate the provisions of the Plan by reference.

  

  

  

     5.3 Option  Price.  No Option  granted  pursuant  to the Plan shall have an Option  price that is less than the fair  market  value of Stock on the date the Option is granted,  as determined by the Board.  The Option exercise price shall be subject to adjustment as provided in Section 4.3 above.

     5.4 Payment. Payment for all shares of Stock shall be made at the time that an Option,  or any part  thereof,  is  exercised,  and no shares shall be issued until full payment therefor has been made. Payment shall be made (i) in cash, or (ii) in Stock, or, if acceptable to the Board, in some other form.

     5.5  Repricing.  An  outstanding  Option  may be  repriced  after the grant thereof to provide for a lower Option exercise price, whether through adjustment or  amendment  to the Option  exercise  price,  issuance  of an amended  Option, cancellation of the Option and issuance of a replacement Option, or by any other means with substantially the same economic effect, with approval of the Board.

ARTICLE VI

WRITTEN NOTICE, ISSUANCE OF STOCK

CERTIFICATES, SHAREHOLDER PRIVILEGES

     6.1 Written  Notice.  An Optionee  wishing to exercise an Option shall give written notice to the Company,  in the form and manner  prescribed by the Board. Full  payment  for the shares of Stock  acquired  pursuant  to the  Option  must accompany the written notice.

     6.2  Issuance  of Stock  Certificates.  As soon as  practicable  after  the receipt of written notice and payment, the Company shall deliver to the Optionee a certificate or certificates for the requisite number of shares of Stock.

     6.3 Privileges of a Shareholder.  An Optionee or any other person  entitled to  exercise an Option  under the Option  Agreement  shall not have  shareholder privileges  with  respect to any Stock  covered by the Option  until the date of issuance of a stock certificate for such Stock.

ARTICLE VII

RIGHTS OF OPTIONEES

     Nothing in the Plan shall  interfere  with or limit in any way the right of the  Company  or  a  subsidiary  corporation  to  terminate  any  employee's  or consultant's  employment at any time, nor confer upon any employee or consultant any right to continue in the employ of the Company or a subsidiary corporation.

ARTICLE VIII

AMENDMENT, MODIFICATION, AND

TERMINATION OF THE PLAN

     The  Board  may at any time  terminate  and from  time to time may amend or modify the Plan. Any amendment or  modification  of the Plan by the Board may be accomplished  without  approval  of  the  shareholders  of the  Company,  unless shareholder approval of such amendment or modification is required by any law or regulation governing the Company.

     No amendment,  modification, or termination of the Plan shall in any manner adversely  affect any  outstanding  Option under the Plan without the consent of the Optionee holding the Option.

  

  

  

ARTICLE IX

ACQUISITION, MERGER OR LIQUIDATION

     9.1 Acquisition.

     (a) In the event that an  acquisition  occurs with  respect to the Company, the Company shall have the option,  but not the  obligation,  to cancel  Options outstanding  as of the effective date of such  acquisition,  whether or not such Options  are then  exercisable,  in return for  payment to the  Optionees  of an amount equal to a reasonable  estimate of an amount  (hereinafter the "Spread"), determined  by the Board,  equal to the  difference  between  the net amount per share payable in the  acquisition  or as a result of the  acquisition,  less the exercise price of the Option. In estimating the Spread, appropriate adjustments to give effect to the  existence of the Options  shall be made,  such as deeming the Options to have been  exercised,  with the Company  receiving  the  exercise price payable thereunder, and treating the Stock receivable upon exercise of the Options as being outstanding in determining the net amount per share.

     (b)  For  purposes  of  this  section,  an  "acquisition"  shall  mean  any transaction in which  substantially  all of the Company's assets are acquired or in which a controlling amount of the Company's  outstanding shares are acquired, in each case by a single person or entity or an affiliated  group of persons and entities.  For purposes of this section,  a  controlling  amount shall mean more than fifty percent of the issued and outstanding shares of Stock of the Company. The Company shall have the above option to cancel Options  regardless of how the acquisition  is  effectuated,  whether by direct  purchase,  through a merger or similar  corporate  transaction,  or otherwise.  In cases where the  acquisition consists of the  acquisition of assets of the Company,  the net amount per share shall be  calculated on the basis of the net amount  receivable  with respect to shares upon a distribution and liquidation by the Company after giving effect to expenses and charges, including but not limited to taxes, payable by the Company before the liquidation can be completed.

     (c) Where the Company  does not  exercise its option under this Section 9.1 the  remaining  provisions  of  this  Article  IX  shall  apply,  to the  extent applicable.

     9.2  Merger  or  Consolidation.  If the  Company  shall  be  the  surviving corporation in any merger or  consolidation,  any Option granted hereunder shall pertain to and apply to the securities to which a holder of the number of shares of Stock  subject  to the  Option  would have been  entitled  in such  merger or consolidation,  provided that the Company shall not be considered  the surviving corporation for purposes hereof if the Company or any of its subsidiaries is the survivor  of  a  reverse  triangular  merger  and  the  Company's   shareholders immediately  prior to the merger and less than 50% of the value of the Company's stock immediately after the merger.

     9.3 Other Transactions.  A merger and consolidation in which the Company is not the surviving corporation (the Company shall not be considered the surviving corporation for purposes hereof if the Company or any of its subsidiaries is the survivor  of  a  reverse  triangular  merger  and  the  Company's   shareholders immediately  prior to the merger and less than 50% of the value of the Company's stock  immediately  after the  merger)  shall  cause  every  Option  outstanding hereunder to terminate on the third  anniversary  date of the effective  date of such merger or consolidation.  A dissolution or liquidation of the Company shall cause every Option outstanding  hereunder to terminate  effective as of the date of such dissolution or liquidation of the Company.  However,  if the Optionee is offered a firm  commitment  whereby the resulting or surviving  corporation in a merger or  consolidation  will tender to the Optionee an option (the "Substitute option") to  purchase  its shares on terms and  conditions  both as to number of shares and  otherwise,  which will  substantially  preserve to the  Optionee the rights and benefits of the Option outstanding  hereunder granted by the Company, the  Option  shall  remain  exercisable  upon its  terms.  The Board  shall have absolute and uncontrolled  discretion to determine whether the Optionee has been offered a firm  commitment  and  whether  the  tendered  Substitute  Option will substantially  preserve to the  Optionee  the rights and  benefits of the Option outstanding hereunder.

  

  

  

ARTICLE X

SECURITIES REGISTRATION

     10.1 Securities  Registration.  In the event that the Company shall deem it necessary or desirable to register  under the Securities Act of 1933, as amended (the  "Securities  Act"), or any other  applicable  statute,  any Options or any Stock  with  respect  to which an Option  may be or shall  have been  granted or exercised,  or to qualify any such Options or Stock under the Securities Act, or any other statute,  then the Optionee shall  cooperate with the Company and take such action as is  necessary to permit  registration  or  qualification  of such Options or Stock.

     10.2 Representations.  Unless the Company has determined that the following  representation  is unnecessary,  each person exercising an Option under the Plan may be required by the Company,  as a condition to the issuance of the shares of Stock pursuant to exercise of the Option,  to make a  representation  in writing (i) that he is acquiring  such shares for his own account for investment and not with a view to, or for sale in connection  with,  the  distribution  of any part thereof  within the  meaning of the  Securities  Act,  and (ii) that  before any transfer  in  connection  with the  resale of such  shares,  he will  obtain the written opinion of counsel for the Company,  or other counsel  acceptable to the Company,  that such shares may be transferred without registration  thereof. The Company may also require that the certificates  representing such shares contain legends reflecting the foregoing.  To the extent permitted by law, including the Securities Act,  nothing herein shall restrict the right of a person  exercising an Option to sell the shares received in an open market transaction.

ARTICLE XI

TAX WITHHOLDING

     Whenever  shares  of Stock  are to be issued  in  satisfaction  of  Options exercised  under the Plan,  the  Company  shall  have the power to  require  the recipient of the Stock to remit to the Company an amount  sufficient  to satisfy federal, state, and local withholding tax requirements, if any.

ARTICLE XII

INDEMNIFICATION

     To the extent  permitted  by law,  each  person who is or shall have been a member of the Board or the Committee  shall be indemnified  and held harmless by the Company against and from any loss, cost,  liability,  or expense that may be imposed upon or reasonably  incurred by him in connection with or resulting from any claim, action, suit, or proceeding to which he may be a party or in which he may be involved  by reason of any action  taken or failure to act under the Plan and against and from any and all amounts paid by him in settlement thereof, with the Company's  approval,  or paid by him in satisfaction of judgment in any such action,  suit, or proceeding  against him, provided he shall give the Company an opportunity,  at its own  expense,  to  handle  and  defend  the same  before he undertakes  to handle and defend it on his own behalf.  The  foregoing  right of indemnification shall not be exclusive of any other rights of indemnification to which  such  persons  may  be  entitled  under  the  Company's   certificate  of incorporation or bylaws, as a matter of law, or otherwise, or any power that the Company or a  Subsidiary  Corporation  may have to  indemnify  them or hold them harmless.

  

  

  

ARTICLE XIII

REQUIREMENTS OF LAW

     13.1  Requirements  of Law.  The  granting of Options  and the  issuance of shares  of  Stock  upon the  exercise  of an  Option  shall  be  subject  to all applicable  laws,  rules,  and  regulations,   and  to  such  approvals  by  any governmental agencies or national securities exchanges as may be required.

     13.2  Governing  Law.  The Plan,  and all  agreements  hereunder,  shall be construed in accordance with and governed by the laws of the State of Colorado.

ARTICLE XIV

EFFECTIVE DATE OF PLAN

     The Plan shall be effective on September 21, 2004.

 

 

ARTICLE XV

NO OBLIGATION TO EXERCISE OPTION

     The  granting  of an Option  shall  impose no  obligation  upon the  holder thereof to exercise such Option.

     THIS STOCK OPTION PLAN was adopted by the Board of Directors of the Company on May 6, 2005.

                                                      By: /s/ John McKowen

John R. McKowen, Presidentexhibit10-1.htm

EXHIBIT 10.1

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made as of __________________, 2011 by and among Encore Energy Partners GP LLC, a Delaware limited liability company (the "Company"), Encore Energy Partners LP, a Delaware limited partnership (the "Partnership"), and _______________ ("Indemnitee").

 

PRELIMINARY STATEMENT

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 1.   Services by Indemnitee.  Indemnitee will serve, or continue to serve, as a Functionary of the Company or the Partnership and, as Indemnitee, the Company and the Partnership may agree, as a Functionary of one or more Related Enterprises.  Indemnitee may at any time and for any reason resign from any such service, subject to any other contractual obligation or any obligation applicable law imposes.  This Agreement is not and is not to be construed as an employment contract by the Company, the Partnership or any other Related Enterprise with Indemnitee.

 

  

  

  

Section 2.   Indemnification.

 

(a) Each of the Partnership and the Company hereby agrees, to the fullest extent permitted by law (subject to the provisions of Section 11 below), to (or to cause another Partnership Entity to) hold harmless and indemnify Indemnitee against Losses arising from any Proceeding in which Indemnitee may be involved, or is threatened to be involved (as a party, witness, deponent or otherwise), by reason of (1) the fact that Indemnitee serves or served as (A) a Functionary of the Company or the Partnership or, (B) at the request of the Company or the Partnership, a Functionary of a Related Enterprise, or (2) the actual or alleged service or conduct of Indemnitee in Indemnitee's capacity as that Functionary, including any act actually or allegedly done or not done by Indemnitee; provided that the Indemnitee shall not be indemnified and held harmless under this Section 2(a) if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 2(a), the Indemnitee acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful.  The rights of Indemnitee under this Section 2(a) are in addition to, and independent of, the rights of Indemnitee under Sections 2(b), 2(c) or 18(a).

 

(b) If and whenever Indemnitee was or is, or is threatened to be made, a party to any Proceeding of any type to which Section 2(a) refers and has been successful, on the merits or otherwise, in defense of that Proceeding, or in defense of any Claim therein, the Company and the Partnership will, or will cause another Partnership Entity to, indemnify Indemnitee against, and hold Indemnitee harmless from and in respect of, all Expenses Indemnitee reasonably has incurred in connection therewith.  The rights of Indemnitee under this Section 2(b) are in addition to, and independent of, the rights of Indemnitee under Sections 2(a), 2(c) or 18(a).

 

(c) If and whenever Indemnitee was, or reasonably could have been expected to have been, or is, or reasonably could be expected to be, by reason of the knowledge of facts Indemnitee actually or allegedly has obtained in the course of his service as (1) a Functionary of the Company or the Partnership or, (2) at the request of the Company or the Partnership, a Functionary of a Related Enterprise, or otherwise, a witness in or a deponent in connection with or otherwise involved in any Proceeding to which Indemnitee is not a party, the Company and the Partnership will, or will cause another Partnership Entity to, indemnify Indemnitee against, and hold Indemnitee harmless from and in respect of, all Expenses Indemnitee reasonably has incurred or will incur in connection therewith.  The rights of Indemnitee under this Section 2(c) are in addition to, and independent of, the rights of Indemnitee under Sections 2(a), 2(b) or 18(a).

 

Section 3.   Advancement of Expenses.  (a) If and whenever Indemnitee is, or is threatened to be made, a party to any Proceeding that may give rise to a right of Indemnitee to indemnification under Section 2(a) or 2(b), the Company and the Partnership will, or will cause another Partnership Entity to, advance all Expenses reasonably incurred by or on behalf of Indemnitee in connection with that Proceeding within five (5) days after the Company or the Partnership receives a statement or statements from Indemnitee requesting the advance or advances from time to time, whether prior to or after final disposition of that Proceeding.  Each such statement must reasonably evidence the Expenses incurred by or on behalf of Indemnitee and include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it ultimately is determined that Indemnitee is not entitled to be indemnified by the Company and the Partnership under this Agreement against those Expenses. The Company and the Partnership will accept any such undertaking without reference to the financial ability of Indemnitee to make repayment.  No objections based on or involving any question regarding the reasonableness of such Expenses shall be grounds for failure to advance to Indemnitee, or reimburse Indemnitee for, the amount claimed within such five (5) day period.  If the Company, the Partnership or another Partnership Entity advances Expenses in connection with any Claim as to which Indemnitee has requested or may request indemnification under Section 2(a) and a final and non-appealable judgment has been entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to Section 2(a) Indemnitee acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful, Indemnitee will not be required to reimburse the Company, the Partnership or that other Partnership Entity for those advances until the 180th day following the date of that determination.

 

  

  

  

(b) The Company, the Partnership or another Partnership Entity may advance Expenses under Section 3(a) to Indemnitee or, at the Company's and the Partnership's option, directly to the Person to which those Expenses are owed, and Indemnitee hereby consents to any such direct payment, to Indemnitee's legal counsel or any other Person.

 

(c) For the avoidance of doubt, the parties agree that the provisions of this Section 3 shall be applicable during the pendancy of any determination of the right of the Indemnitee to indemnification under Section 2(a).

 

Section 4.   Notification and Defense of Claims.  (a) If Indemnitee receives notice, otherwise than from the Company or the Partnership, that Indemnitee is or will be made, or is threatened to be made, a party to any Proceeding in respect of which Indemnitee intends to seek indemnification hereunder, Indemnitee must promptly notify the Company and the Partnership in writing of the nature and, to Indemnitee's knowledge, status of that Proceeding. If this Section 4(a) requires Indemnitee to give such a notice, but Indemnitee fails to do so, that failure will not relieve the Company or the Partnership from, or otherwise affect, the obligations the Company or the Partnership may have to indemnify Indemnitee (1) under this Agreement, unless the Company and the Partnership can establish that the failure has resulted in actual material prejudice to the Company and the Partnership or (2) otherwise than under this Agreement.

 

(b) Except as this Section 4(b) otherwise provides below, in the case of any Proceeding in respect of which Indemnitee seeks indemnification hereunder:

 

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

 

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

 

  

  

  

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

 

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

 

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

(B) the Company or the Partnership shall not actually have assumed the defense and employed counsel satisfactory to Indemnitee to assume the defense of those Claims; or

(C) Indemnitee shall have (i) reasonably concluded either that (a) a conflict of interest may exist between Indemnitee, on the one hand, and the Company, the Partnership or a Related Enterprise, on the other hand, as to the defense of one or more of those Claims or (b) Indemnitee may have defenses to one or more of those Claims in addition to or different than the defenses available to the Company and the Partnership and (ii) communicated that conclusion to the Company and the Partnership in writing,

in which cases the Company and the Partnership will continue to be liable to Indemnitee hereunder for fees and expenses of legal counsel for Indemnitee.

 

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

 

Section 5.   Procedure to Request Indemnification.  (a) To obtain indemnification under this Agreement, Indemnitee must submit to the Company and the Partnership a written request therefor which includes, or is accompanied by, a brief description of the matters or amounts to be indemnified.  Indemnitee may request indemnification hereunder at any time and from time to time as Indemnitee deems appropriate in Indemnitee's sole discretion.

 

(b) The amount of any indemnification against Expenses to which Indemnitee becomes entitled under any provision hereof, including Section 2(a), will be determined subject to the provisions of this Section 5(b).  Indemnitee will have the burden of showing that Indemnitee actually has incurred the Expenses for which Indemnitee requests indemnification.  If the Company, the Partnership or a Partnership Entity has made any advance in respect of any Expense incurred by Indemnitee without objecting in writing to Indemnitee at the time of the advance to the reasonableness thereof, the incurrence of that Expense by Indemnitee will be deemed for all purposes hereof to have been reasonable.  In the case of any Expense as to which such an objection has been made, or any Expense for which no advance has been made, the incurrence of that Expense will be presumed to have been reasonable, and the Company and the Partnership will have the burden of proof to overcome that presumption.

 

  

  

  

Section 6.   Presumptions and Effect of Certain Proceedings.  (a) In any determination with respect to entitlement to indemnification under this Agreement, it must be presumed that Indemnitee is entitled to that indemnification if Indemnitee has submitted a request for indemnification in accordance with Section 5(a), and the Company and the Partnership will have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.

 

(b) The termination of any Proceeding or of any Claim therein, by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent, will not, except as this Agreement otherwise expressly provides in Section 2(a), of itself adversely affect the right of Indemnitee to indemnification hereunder or create a presumption that Indemnitee is not entitled to indemnification.

 

(c) Any service of Indemnitee as a Functionary of the Company, the Partnership or any Related Enterprise which imposes duties on, or involves services by, Indemnitee with respect to any Related Enterprise that is an employee benefit or welfare plan or related trust, if any, or the participants or beneficiaries of that plan or trust, will be deemed for all purposes hereof as service at the request of the Company and the Partnership.

 

(d) For purposes of any determination hereunder as to whether Indemnitee is entitled to indemnification hereunder, neither the knowledge nor the conduct of any other Functionary of the Company, the Partnership or any Related Enterprise, other than Indemnitee, shall be imputed to Indemnitee.

 

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

 

(f) If Indemnitee serves or served as a Functionary of a Related Enterprise, that service will be deemed to be "at the request of the Company and the Partnership" for all purposes hereof notwithstanding that the request is not evidenced by a writing or shown to have been made orally.

 

Section 7.   Remedies of Indemnitee in Certain Cases.  (a) If Indemnitee makes a written request for indemnification under Section 5(a) or a request for advancement of expenses under Section 3(a) and that request has not been paid in full by the Company or the Partnership or another Partnership Entity within forty-five (45) days after that request has been received by the Company or the Partnership (except in the case of a request for advancement of expenses, in which case the applicable period shall be five (5) days), Indemnitee may within one year thereafter bring suit against the Company or the Partnership or both, including in the courts of the State of Texas or the Court of Chancery, to recover the unpaid amount.  Alternatively, Indemnitee, at Indemnitee's option, may seek an award in arbitration to be conducted by a single arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association.

 

  

  

  

(b) In any judicial proceeding or arbitration commenced under this Section 7, the Company and the Partnership will have the burden of proving that Indemnitee is not entitled to indemnification or advancement of expenses, as the case may be, hereunder, and the Company and the Partnership may not, for any purpose, refer to or introduce into evidence any determination hereunder which is adverse to Indemnitee.

 

(c) If a determination has been made hereunder that Indemnitee is entitled to indemnification hereunder, the Company and the Partnership will be bound by that determination in any judicial proceeding or arbitration Indemnitee thereafter commences under this Section 7 or otherwise, absent a prohibition of that indemnification under applicable law.

 

(d) If Indemnitee, under this Section 7 or otherwise, seeks a judicial adjudication of or an award in arbitration to enforce Indemnitee's rights under this Agreement, Indemnitee will be entitled to recover from the Company and the Partnership, and will be indemnified by the Company and the Partnership against, any and all Expenses reasonably incurred by or on behalf of Indemnitee in that judicial adjudication or arbitration if Indemnitee prevails therein.  If it is determined in that judicial adjudication or arbitration that Indemnitee is entitled to receive part of, but not all, the indemnification or advancement of Expenses sought, the expenses incurred by Indemnitee in connection with that judicial adjudication or arbitration will be appropriately prorated between those in respect of which this Agreement entitles Indemnitee to indemnification and those Indemnitee must bear.

 

(e) In any judicial proceeding or arbitration under this Section 7, the Company and the Partnership:

 

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

 

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

 

Section 8.   Non-exclusivity; Survival of Rights; Insurance; Subrogation.  (a) The rights to indemnification and advancement of Expenses and the remedies this Agreement provides are not and will not be deemed exclusive of any other rights or remedies to which Indemnitee may at any time be entitled under applicable law, the Company's or the Partnership's Charter Documents, any agreement, a vote of members or unitholders of the Company or the Partnership or directors, or otherwise, but each such right or remedy hereunder will be cumulative with all such other rights and remedies. No amendment, alteration or termination of this Agreement or any provision hereof will limit or restrict any right of Indemnitee hereunder in respect of any action Indemnitee has taken or omitted in Indemnitee's capacity as a Functionary of the Company, the Partnership or any Related Enterprise or other Person prior to that amendment, alteration or termination.

 

  

  

  

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

 

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

 

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

 

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

 

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

 

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

 

Section 9.   Binding Effect.  This Agreement will be binding on the Company, the Partnership and their successors and assigns and will inure to the benefit of Indemnitee and his spouse, if Indemnitee resides in Texas or another community property state, heirs, executors and administrators.

 

  

  

  

Section 10.   Severability.  If any provision or provisions hereof is or are invalid, illegal or unenforceable for any reason whatsoever:

 

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

 

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

 

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

 

Section 11.   Exceptions to Right of Indemnification or Advancement of Expenses.  No provision in this Agreement will obligate the Company or the Partnership to pay or cause to be paid any indemnity to or for the account of Indemnitee, or to advance or cause to be advanced Expenses under Section 3, in connection with or as a result of:

 

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

 

(2) except for any Claim initiated by Indemnitee, whether as a cause of action or as a defense to a cause of action under Section 7 or otherwise, to enforce or establish, by declaratory judgment or otherwise, Indemnitee's (A) rights or remedies hereunder, or (B) other rights to indemnification, advancement of expenses, reimbursement, contribution or similar rights, any Claim initiated by Indemnitee without the prior authorization of the Board against the Company, the Partnership or any Related Enterprise or any of their respective present or former Functionaries.

 

Section 12.   Counterparts.  This Agreement may be executed in one or more counterparts, each of which will for all purposes be deemed to be an original but all of which together will constitute one and the same agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

Section 13.   Headings.  The headings of the Sections hereof are inserted for convenience only and do not and will not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

  

  

  

Section 14.   Definitions and Definitional Provisions.  (a) For purposes of this Agreement:

 

"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies. "Board" means the Board of Directors of the Company.

"Charter Documents" means, with respect to any Enterprise:

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

 

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

 

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

 

 

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

 

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

 

"Court of Chancery" means the Court of Chancery of the State of Delaware.

 

"Delaware LLC Act" means the Delaware Limited Liability Company Act.

 

"Delaware LP Act" means the Delaware Revised Uniform Limited Partnership Act.

 

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

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended,

 

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

 

  

  

  

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

 

"Losses" mean any and all Expenses, losses, claims, damages (whether actual, consequential, special, punitive, exemplary, multiplied or otherwise), liabilities, joint or several, judgments, fines (including any excise tax assessed with respect to any employee benefit or welfare plan), penalties, interest, settlements and other amounts arising from or in connection with any Proceeding.  Should any payments by the Company, the Partnership or a Related Enterprise to or for the account of Indemnitee under this Agreement be determined to be subject to any federal, state or local income or excise tax, "Losses" also will include such amounts as are necessary to place Indemnitee in the same after-tax position, after giving effect to all applicable taxes, Indemnitee would have been in had no such tax been determined to apply to those payments.

 

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

 

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

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

"Related Enterprise" means at any time any Enterprise:

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

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

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

  

  

  

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

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

 

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

 

(d) The word "including," and, with correlative meaning, the word "include," means including, without limiting the generality of any description preceding that word, and the words "shall" and "will" are used interchangeably and have the same meaning.  The word "or" is not exclusive.

 

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

 

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

 

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

 

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

 

 

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

 

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

  

  

  

If to Indemnitee, to:

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

If to the Company or the Partnership, to:

Encore Energy Partners GP LLC 5847 San Felipe, Suite 3000

Houston, Texas 77057

Attention: Richard Robert

Fax No.: (832) 327-2260

E-mail: rrobert@vnrllc.com

Section 18.   Additional Indemnifications; Contribution.  (a) In addition to the indemnification and advancement of Expenses provided above, each of the Partnership and the Company hereby further agrees (subject to the provisions of Section 11) to (or to cause another Partnership Entity to) hold harmless and indemnify Indemnitee, and advance Expenses to Indemnitee, to the fullest extent authorized or permitted by law (including the applicable provisions of the Delaware LP Act and the Delaware LLC Act) against Losses arising from any Proceeding in which Indemnitee may be involved (as a party, witness, deponent or otherwise) by reason of (1) the fact that Indemnitee serves or served as (A) a Functionary of the Company or the Partnership or any Affiliate thereof or (B) at the request of the Company or the Partnership or any Affiliate thereof, a Functionary of another Person, or (2) the actual or alleged service or conduct of Indemnitee in Indemnitee's capacity as that Functionary, including any act actually or allegedly done or not done by Indemnitee.  The phrase "to the fullest extent permitted by law" shall include, but not be limited to (a) to the fullest extent permitted by any provision of the Delaware LP Act and the Delaware LLC Act that authorizes or permits additional indemnification by agreement or otherwise, or the corresponding provision of any amendment to or replacement of the Delaware LP Act and the Delaware LLC Act and (b) to the fullest extent authorized or permitted by any amendments to or replacements of the Delaware LP Act and the Delaware LLC Act adopted after the date of this Agreement that increase the extent to which an entity may indemnify its officers, directors, other Functionaries or persons serving in any capacity in which Indemnitee serves.  Any amendment, alteration or repeal of the Delaware LP Act and the Delaware LLC Act that adversely affects any right of Indemnitee shall be prospective only and shall not limit or eliminate any such right with respect to any Proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.  The rights of Indemnitee under this Section 18(a) are in addition to, and independent of, the rights of Indemnitee under Sections 2(a), 2(b), 2(c) or 3(a).

 

  

  

  

(b) If Indemnitee would have the right to be indemnified under Section 2(a) or otherwise under this Agreement in respect of any Claim, but that right is unenforceable by reason of any applicable law or public policy, then, to the fullest extent applicable law permits, the Company and the Partnership, in lieu of indemnifying or causing the indemnification of Indemnitee under Section 2(a) or otherwise under this Agreement, will, or will cause a Partnership Entity to, contribute to the amount Indemnitee has incurred, whether for Expenses reasonably incurred or for Losses, in connection with that Claim, in such proportion as is deemed fair and reasonable in light of all the circumstances of that Claim in order to reflect:

 

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

(2) if the allocation provided in clause (1) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (1), but also the relative fault of Indemnitee and of the Company, the Partnership and any Related Enterprise and their other Functionaries in connection with those event(s) or transaction(s).

Section 19.   Governing Law.  This Agreement and the legal relations among the parties will be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules.

 

Section 20.   Entire Agreement.  This Agreement constitutes the entire agreement and understanding among the Company, the Partnership and Indemnitee, and supersedes all prior oral, written or implied agreements and understandings of the Company, the Partnership and Indemnitee with respect to the subject matter hereof, other than indemnification, contribution, reimbursement, advances of expenses or similar rights Indemnitee may have under the Charter Documents of the Company, the Partnership or any Affiliate or Related Enterprise or the Delaware LLC Act, the Delaware LP Act or other law.

 

  

  

  

 

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

 

ENCORE ENERGY PARTNERS GP LLC

By:                                                                      

Name:

Title:

ENCORE ENERGY PARTNERS LP

  By:   Encore Energy Partners GP LLC,

     its general partner

By:                 

Name:

Title:

INDEMNITEE:

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