Exhibit 10.7

  

 

INDEMNITY AGREEMENT

 

This Agreement made and entered into as of April 28, 2017, by and between
Bonanza Creek Energy, Inc., a Delaware corporation (the “Company”),
and                        (“Indemnitee”), who is currently serving the Company
in the capacity of director.

 

WITNESSETH:

 

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

 

WHEREAS, competent and experienced individuals are reluctant to serve as members
of the board of directors or executive officers of a corporation unless they are
provided with adequate protection through insurance or indemnification against
the risks of claims and actions against them arising out of such service;

 

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

 

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

 

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

 

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

 

1.                  Agreement to Serve. Indemnitee agrees to serve or continue
to serve as a director or executive officer of the Company for so long as he is
duly appointed and qualified in accordance with the provisions of the General
Corporation Law of the State of Delaware and the Certificate of Incorporation
and the Bylaws or until such time as he tenders his resignation. The Company
acknowledges that the Indemnitee is relying on this Agreement in so serving as a
director or executive officer.

 

 

 

2.                  Definitions. As used in this Agreement:

 

(a)                “Change in Control” means the occurrence of any of the
following:

 

(i)                 the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended) (a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the
then outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”). For purposes of this
Section 2(a), the following acquisitions by a Person will not constitute a
Change of Control: (1) any acquisition directly from the Company; (2) any
acquisition by the Company; (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; or (4) any acquisition by any corporation pursuant to
a transaction which complies with clauses (A), (B) and (C) of paragraph (iii)
below;

 

(ii)               the individuals who, as of the later of the date hereof or
the last amendment to this Agreement approved by the Board of Directors,
constitute the board of directors (the “Incumbent Board”) cease for any reason
to constitute at least a majority of the board of directors. Any individual
becoming a director subsequent to the later of the date hereof or the last
amendment to this Agreement approved by the Board of Directors whose election,
or nomination for election by the Company’s stockholders, is approved by a vote
of at least a majority of the directors then comprising the Incumbent Board of
Directors will be considered a member of the Incumbent Board as of the later of
the date hereof or the last amendment to this Agreement approved by the Board of
Directors, but any such individual whose initial assumption of office occurs as
a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Incumbent Board
of Directors will not be deemed a member of the Incumbent Board as of the later
of the date hereof or the last amendment to this Agreement approved by the Board
of Directors;

 

(iii)             the consummation of a reorganization, merger, consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a “Business Combination”), unless following such Business Combination:
(A) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock (or, for a
non-corporate entity, equivalent securities) and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (B) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Business

 

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Combination) beneficially owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock (or, for a
non-corporate entity, equivalent securities) of the corporation resulting from
such Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (C) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board of Directors,
providing for such Business Combination; or

 

(iv)             the approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

 

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

 

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

 

(d)               The term “Expenses” includes, without limitation, all
reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of
experts, witness fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, or
being or preparing to be a witness in, or otherwise involved in, a Proceeding.
Should any payments by the Company under this Agreement be determined to be
subject to any federal, state or local income or excise tax, Expenses will also
include such amounts as are necessary to place Indemnitee in the same after-tax
position, after giving effect to all applicable taxes, Indemnitee would have
been in had such tax not have been determined to apply to those payments.
Expenses also shall include (i) Expenses incurred in connection with any appeal
resulting from any Proceeding, including, without limitation, the premium,
security for, and other costs relating to any cost bond, supersedeas bond, or
other appeal bond or its equivalent and (ii) Expenses incurred by Indemnitee in
connection with the interpretation, enforcement or defense of Indemnitee’s
rights under this Agreement, by litigation or otherwise, but shall not include
the amount of judgments, fines or penalties actually levied against Indemnitee.

 

(e)                “Independent Counsel” means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent: (i) the Company
or Indemnitee in any matter material to either such party (other than with
respect to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement. The Company agrees to pay the reasonable fees and expenses of the
Independent Counsel referred to above and to fully indemnify such counsel
against any and all Expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.

 

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

 

(g)                References to “fines” shall include any (i) excise taxes
assessed with respect to any employee benefit plan and (ii) penalties;
references to “serving at the request of the Company” shall include any service
as a director, officer, trustee, general partner, managing member, fiduciary,
employee or agent which imposes duties on, or involves services by, such
director, officer, trustee, general partner, managing member, fiduciary,
employee or agent with respect to an Enterprise; and a person who acts in good
faith and in a manner he reasonably believed to be in the interest of the
Enterprise shall be deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this Agreement.

 

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

 

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

 

 

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

 

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

 

7.                  Advances of Expenses; Notification and Defense of Claim.

 

(a)                To the fullest extent permitted by applicable law, the
Expenses incurred by Indemnitee pursuant to Sections 3 and/or 4 of this
Agreement in connection with any Proceeding or any claim, issue or matter
therein shall be paid by the Company currently and in advance of the final
disposition of such Proceeding or any claim, issue or matter therein no later
than 20 days after receipt by the Company of a request for an Expense
advancement with appropriate documentation (which shall include invoices
received by Indemnitee in connection with such expenses but, in the case of
invoices in connection with legal services, any references to legal work
performed or to expenditures made that would cause Indemnitee to waive any
privilege accorded by applicable law shall not be included with the invoice);
provided, however, that Indemnitee shall deliver such request for an Expense
advancement to the Company within 60 days after the Indemnitee receives
appropriate documentation with regard to such Expense. The undersigned
Indemnitee hereby undertakes to repay the advanced Expenses to the Company to
the extent that it is ultimately determined pursuant to Section 8, or, in the
event the Indemnitee elects to pursue other remedies pursuant to Section 10,
that the undersigned Indemnitee is not entitled to be indemnified therefor by
the Company. This agreement of Indemnitee to repay is unsecured and interest
free.

 

(b)               Promptly after receipt by Indemnitee of notice of the
commencement of any Proceeding, Indemnitee shall, if a claim thereof is to be
made against the Company hereunder, notify the Company of the commencement
thereof. The failure to promptly notify the Company of the commencement of the
Proceeding, or Indemnitee’s request for indemnification, will not relieve the
Company from any liability that it may have to Indemnitee hereunder, except to
the extent that the Company is prejudiced in its defense of such Proceeding as a
result of such failure.

 

(c)                In the event the Company shall be obligated to pay the
expenses of Indemnitee with respect to an action, suit or proceeding, as
provided in this Agreement, the Company, if appropriate, shall be entitled to
assume the defense of such Proceeding, with counsel reasonably acceptable to
Indemnitee, upon the delivery to Indemnitee of written notice of its election to
do

 

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so. After delivery of such notice, the approval of such counsel by Indemnitee
and the retention of such counsel by the Company, the Company will not be liable
to Indemnitee under this Agreement for any fees of counsel subsequently incurred
by Indemnitee with respect to the same Proceeding, provided that (1) Indemnitee
shall have the right to employ Indemnitee’s own counsel in such Proceeding at
Indemnitee’s expense and (2) if (i) the employment of counsel by Indemnitee has
been previously authorized in writing by the Company, (ii) counsel to the
Company or Indemnitee shall have reasonably concluded that there may be a
conflict of interest or position, or reasonably believes that a conflict is
likely to arise, on any significant issue between the Company and Indemnitee in
the conduct of any such defense or (iii) the Company shall not, in fact, have
employed counsel to assume the defense of such Proceeding, then the fees and
expenses of Indemnitee’s counsel shall be at the expense of the Company, except
as otherwise expressly provided by this Agreement. The Company shall not be
entitled, without the consent of Indemnitee, to assume the defense of any claim
brought by or in the right of the Company or as to which counsel for the Company
or Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.

 

8.                  Procedure for Determination of Entitlement to
Indemnification.

 

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

 

(b)               Upon written request by Indemnitee for indemnification
pursuant to Section 8(a) hereof, a determination, if required by applicable law,
with respect to Indemnitee’s entitlement thereto shall be made in the specific
case: (i) if a Change in Control shall have occurred, the Disinterested
Directors shall direct Independent Counsel to make such determination in a
written opinion to the Board of Directors, a copy of which shall be delivered to
Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board of Directors, or (B) by a committee of the Disinterested Directors
designated by a majority vote of Disinterested Directors, even though less than
a quorum, or (C) if there are no Disinterested Directors or, if the
Disinterested Directors so direct, by Independent Counsel in a written opinion
to the Board of Directors, a copy of which shall be delivered to Indemnitee;
and, if it is so determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within 20 days after such determination. Any
costs or expenses (including attorneys’ fees and disbursements) incurred in
connection with successfully establishing Indemnitee’s right to indemnification,
in whole or in part, by Indemnitee in cooperating with the person, persons or
entity making the determination discussed in this Section 8(b) with respect to
Indemnitee’s entitlement to indemnification, shall be borne by the Company and
the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(c)                In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 8(b)
hereof, the Independent Counsel shall be selected as provided in this Section
8(c). If a Change in Control shall not have occurred, the Independent Counsel
shall be selected by the Board of Directors, and the Company shall give written
notice to Indemnitee advising him of the identity of the Independent Counsel so
selected. If a Change in Control shall have occurred, the Independent Counsel
shall be selected by Indemnitee (unless Indemnitee shall request that such
selection be made by the Board of Directors, in which event the preceding
sentence shall apply), and Indemnitee shall give written notice to the Company
advising it of the identity of the Independent Counsel so selected. In either
event, Indemnitee or the Company, as the case may be, may, within 10 days after
such written notice of selection shall have been given, deliver to the Company
or to Indemnitee, as the case may be, a written objection

 

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to such selection; provided, however, that such objection may be asserted only
on the ground that the Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined in this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 8(b)
hereof, no Independent Counsel shall have been selected and not objected to,
either the Company or Indemnitee may petition the Delaware Court of Chancery or
other court of competent jurisdiction for resolution of any objection which
shall have been made by the Company or Indemnitee to the other’s selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Court or by such other person as the Court shall
designate, and the person with respect to whom all objections are so resolved or
the person so appointed shall act as Independent Counsel under Section 8(a)
hereof.

 

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

 

9.                  Presumptions and Effect of Certain Provisions.

 

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

 

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

 

(c)                For purposes of any determination of whether Indemnitee acted
in good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the Company, and, with respect to any criminal Proceeding,
Indemnitee had no reasonable cause to believe his

 

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conduct was unlawful (collectively, “Good Faith”), Indemnitee shall be deemed to
have acted in Good Faith if Indemnitee’s action is based on the records or books
of account of the Company and any other Enterprise of which Indemnitee is or was
serving at the request of the Company as a director, officer, trustee, general
partner, managing member, fiduciary, employee or agent or information, opinions,
reports or statements, including financial statements and other financial
information, concerning the Company and any other Enterprise of which Indemnitee
is or was serving at the request of the Company as a director, officer, trustee,
general partner, managing member, fiduciary, employee or agent or any other
person which were prepared or supplied to Indemnitee by: (i) one or more
officers or employees of the Company and any Enterprise of which Indemnitee is
or was serving at the request of the Company as a director, officer, trustee,
general partner, managing member, fiduciary, employee or agent; (ii) appraisers,
engineers, investment bankers, legal counsel or other persons as to matters
Indemnitee reasonably believed were within the professional or expert competence
of those persons; and (iii) any committee of the Board of Directors or
equivalent managing body of the Company and any other Enterprise of which
Indemnitee is or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary, employee or agent
of which Indemnitee is or was, at the relevant time, not a member. The
provisions of this Section 9(c) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed to have
met the applicable standard of conduct set forth in this Agreement.

 

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

 

10.                  Remedies of Indemnitee.

 

(a)                In the event that (i) a determination is made pursuant to
Section 8(b) of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 7 of this Agreement, (iii) no determination of
entitlement to indemnification shall have been made pursuant to Section 8(b) of
this Agreement within the time period provided in Section 9(b) after receipt by
the Company of the request for indemnification, (iv) payment of indemnification
is not made pursuant to Section 5, Section 6, the last sentence of Section 8(b),
or the last sentence of Section 2(d) of this Agreement within 20 days after
receipt by the Company of a written request therefor, or (v) payment of
indemnification pursuant to Section 3 or Section 4 of this Agreement is not made
within 20 days after a determination has been made that Indemnitee is entitled
to indemnification, Indemnitee shall be entitled to an adjudication by the
Delaware Court of Chancery of his entitlement to such indemnification or
advancement of Expenses and appeals therefrom, concluding in a final and
unappealable judgment by the Delaware Supreme Court. The Board of Directors
shall not make a determination as to the final disposition of such adjudication.
The Company shall not oppose Indemnitee’s right to seek any such adjudication.

 

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

 

(c)                If a determination shall have been made pursuant to Section
8(b) of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such

 

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determination in any judicial proceeding commenced pursuant to this Section 10,
absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.

 

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

 

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

 

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

 

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

 

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

 

14.              No Construction as an Employment Agreement or Any Other
Commitment. Nothing contained in this Agreement shall be construed as giving
Indemnitee any right to be retained in

 

 9

 

the employ or as an officer of the Company or any of its subsidiaries, if
Indemnitee currently serves as an officer of the Company, or to be renominated
or reelected as a director of the Company, if Indemnitee currently serves as a
director of the Company.

 

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

 

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

 

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

 

18.              Exceptions. Notwithstanding any other provision in this
Agreement, the Company shall not be obligated pursuant to the terms of this
Agreement, to:

 

(a)                indemnify or advance Expenses to Indemnitee with respect to
any Proceeding initiated, brought or made by Indemnitee, including by way of
cross-claim, counter claim or the like, except with respect to a Proceeding
brought to establish or enforce a right to indemnification, unless Proceeding
was authorized or consented to by the Board of Directors;

 

(b)               indemnify Indemnitee with respect to any Proceeding in which
final judgment is rendered against Indemnitee for an accounting of profits made
from the purchase and sale or the sale and purchase by Indemnitee of securities
of the Company pursuant to the provisions of Section 16(b) of the Act; or

 

(c)                indemnify Indemnitee for any expenses incurred by Indemnitee
with respect to any Proceeding instituted by Indemnitee to enforce or interpret
this Agreement, unless Indemnitee is successful in establishing Indemnitee’s
right to indemnification in such Proceeding, in whole or in part, or unless and
to the extent that the court in such Proceeding shall determine that, despite
Indemnitee’s failure to establish his right to indemnification, Indemnitee is
entitled to indemnity for such expenses; provided, however that nothing in this
Section 18(c) is intended to limit the Company’s obligation with respect to the
advancement of expenses to Indemnitee in connection with any Proceeding
instituted by Indemnitee to enforce or interpret this Agreement, as provided in
Section 7 of this Agreement.

 

Notwithstanding any other provision of this Agreement to the contrary, with
respect to any reimbursements hereunder that are taxable as compensation to an
Indemnitee, the amount of the Expenses that are eligible for reimbursement
during one calendar year may not affect the amount of reimbursements to be
provided in any subsequent calendar year, the reimbursement of an eligible
expense shall be made on or before the last day of the calendar year following
the calendar year in which the expense was

 

 10

 

incurred, and the right to reimbursement of the expenses shall not be subject to
liquidation or exchange for any other benefit.

 

19.              Settlements. The Company shall not be required to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any action
or Proceeding effected without its written consent. The Company shall not settle
any action or claim in any manner which would impose any penalty or limitation
on Indemnitee without Indemnitee’s written consent. Neither the Company nor
Indemnitee may unreasonably withhold its consent to any proposed settlement.

 

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

 

21.              Contractual Rights. The right to be indemnified or to receive
advancement of Expenses under this Agreement (i) is a contract right based upon
good and valuable consideration, pursuant to which Indemnitee may sue, (ii) is
and is intended to be retroactive and shall be available as to events occurring
prior to the date of this Agreement and (iii) shall continue after any
rescission or restrictive modification of this Agreement as to events occurring
prior thereto.

 

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

 

23.              Successors; Binding Agreement. The Company shall require and
cause any successor (whether direct or indirect), by purchase, merger,
consolidation or otherwise, to all or substantially all of the business or
assets of the Company, by written agreement in form and substance reasonably
satisfactory to Indemnitee, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid that executes and delivers
the agreement provided for in this Section 23 or that otherwise becomes bound by
the terms and provisions of this Agreement by operation of law. This Agreement
shall be binding upon the Company and its successors and assigns (including,
without limitation, any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets
of the Company) and will inure to the benefit of Indemnitee (and Indemnitee’s
spouse, if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.

 

24.              Counterparts, Modification, Headings, Gender.

 

(a)                This Agreement may be executed in counterparts, each of which
shall constitute one and the same instrument, and either party hereto may
execute this Agreement by signing any such counterpart. Any such counterpart
delivered by facsimile or other electronic means shall constitute an original
signature for all purposes hereunder.

 

 11

 

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

 

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

 

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

 

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

 

26.              Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (a) 10 years after the date that Indemnitee shall
cease to serve as a director or executive officer of the Company or a director,
officer, trustee, general partner, managing member, fiduciary, employee or agent
of any other Enterprise which Indemnitee served at the request of the Company;
or (b) one year after the final, nonappealable termination of any Proceeding
then pending in respect of which Indemnitee is granted rights of indemnification
or advancement of Expenses hereunder and of any proceeding commenced by
Indemnitee pursuant to Section 10 of this Agreement relating thereto.

 

27.              Contribution. If it is established, under Section 8 or
otherwise, that Indemnitee has the right to be indemnified under this Agreement
in respect of any claim, but that right is unenforceable by reason of applicable
law or public policy, then, to the fullest extent applicable law permits, the
Company, in lieu of indemnifying or causing the indemnification of Indemnitee
under this Agreement, will contribute to the amount Indemnitee has incurred,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement or for Expenses reasonably incurred, in connection with that
Proceeding, in such proportion as is deemed fair and reasonable in light of all
the circumstances of that Proceeding in order to reflect:

 

 12

 

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

 

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

 

 

 

 13

 

 

 

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

 

BONANZA CREEK ENERGY, INC.     By:     Name:   Title:

 

 

 

 

INDEMNITEE:     By:     Name:   Title:

 

 

 

 

 

 

 14