Exhibit
10.1


 


INDEMNIFICATION AGREEMENT


 


This Indemnification Agreement (hereinafter the “Agreement”) is made as
of the 25th day of October, 2005 by and between Venoco, Inc., a
Delaware corporation, (hereinafter the “Company”) and                     (hereinafter
the “Indemnitee”).


 


WHEREAS, competent and experienced persons often are reluctant to serve
as directors of corporations unless they are protected by comprehensive polices
of insurance and/or indemnification, due to the number of lawsuits against such
corporations and their directors, the attendant expense of defending against
such lawsuits, and the exposure of such directors to unreasonably high damages;


 


WHEREAS, present laws and interpretations are not always sufficiently
certain to provide such directors with adequate, reliable knowledge of the
legal risks to which they might be exposed as a result of serving a
corporation;


 


WHEREAS, the Company has concluded that protecting its directors
against such risks helps to attract the most capable persons to such positions;


 


WHEREAS, applicable law empowers the Company to indemnify persons who
served or are serving as a director of the Company and further empowers the
Company to purchase and maintain insurance (on behalf of such persons) against
liability which may be asserted against or incurred by such persons in any such
capacity, or arising out of their status as such, whether or not the Company
would have the power to indemnify against such liability under the provisions
of said laws;


 


WHEREAS, the Company desires to have Indemnitee serve or continue to
serve as a director of the Company free from undue concern for damages by
reason of Indemnitee being a director of the Company or by reason of his
decisions or actions on its behalf, and Indemnitee is willing to serve or to
continue to serve in one or more of such capacities, only if he is furnished
the indemnity provided for hereinafter; and


 


WHEREAS, to induce Indemnitee to serve or continue to serve as a
director of the Company, the Company has determined to grant to Indemnitee, as
permitted by Section 145(f) of the General Corporation Law of the
State of Delaware (hereinafter, the “DGCL”), rights to indemnification and
advancement of expenses as provided herein, whether or not expressly provided
in the Certificate of Incorporation or the By-Laws of the Company or other
provisions of Section 145 of the DGCL.


 


NOW, THEREFORE, in consideration of Indemnitee’s service as a director
of the Company after the date hereof, the sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:


 


Section 1.   Indemnification.
(a) The Company shall hold harmless and indemnify Indemnitee against
expenses (including, without limitation, attorneys’ fees; all costs, expenses
and obligations incurred in connection with being or preparing to be a witness
in a Proceeding (as defined below); and any federal, state, local or foreign
taxes imposed on Indemnitee as a result of the actual or deemed receipt of any
payments under this


 


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Agreement), judgments, fines
and amounts paid in settlement (hereinafter, collectively “Losses”) actually
and reasonably incurred by Indemnitee in connection with any threatened,
pending or completed action, suit, alternative dispute resolution mechanism or
proceeding, whether civil, criminal, administrative or investigative, to which
Indemnitee was or is a party or is threatened to be made a party by reason of
the fact that Indemnitee is or was a director of the Company, or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation,  partnership,
joint venture, trust, employee benefit plan or other enterprise (hereinafter, a  “Proceeding”), to the fullest extent
permitted by Delaware law; provided, however, that the Company shall not be
required to indemnify Indemnitee in connection with any action, suit or
proceeding (or part thereof) initiated by Indemnitee (excluding compulsory
counterclaims and affirmative defenses) unless: (i) such indemnification
is expressly required to be made by law, (ii) the proceeding was
authorized by a majority of the Company’s disinterested directors, whether or
not such directors constitute a quorum, or (iii) such indemnification is
provided by the Company, in its sole discretion, pursuant to the powers vested
in the Company under the DGCL.


 


(b) Selection of Counsel. Indemnitee shall provide written notice
(a “Claim Notice”) to the Company promptly after receiving notice of any
Proceeding initiated by a third party that may give rise to a claim for
indemnification hereunder. Following its receipt of the Claim Notice, the
Company shall be entitled to assume the defense of such Proceeding with counsel
approved by Indemnitee, which approval shall not be unreasonably withheld, upon
the delivery to Indemnitee of written notice of its election to do so within 30
days of its receipt of the Claim Notice. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company shall 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 (i) Indemnitee shall have the right to
employ Indemnitee’s counsel in any such Proceeding at Indemnitee’s expense and (ii) if
(A) the employment of counsel by Indemnitee has been previously authorized
by the Company, (B) Indemnitee shall have reasonably concluded that there
is a conflict of interest between the Company and  Indemnitee in the conduct of any such
defense, or (C) the Company shall not continue to retain such counsel to
defend such Proceeding, then the fees and expenses of Indemnitee’s counsel
shall be at the expense of the Company.


 


(c) If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the Losses
actually and reasonably incurred by Indemnitee in a Proceeding, but not,
however, for the total amount thereof, the Company shall indemnify Indemnitee
for the portion of such Losses to which Indemnitee is entitled.


 


Section 2.   Advancement
of Expenses. (a) Expenses (including attorneys’ fees) incurred by
Indemnitee in defending a Proceeding shall be paid by the Company in advance of
the final disposition of such Proceeding upon receipt of an undertaking
(hereinafter, an “Undertaking”) by or on behalf of Indemnitee to repay such
amount if, and to the extent, it shall ultimately be determined as follows that
Indemnitee is not entitled to be indemnified by the Company: (i) if
Indemnitee does not file suit against the Company for indemnification in
accordance with Section 3 hereof, (A) if requested by


 


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Indemnitee or if there are no
disinterested directors, by Independent Counsel (as defined below) or (B) by
a majority vote of the Company’s disinterested directors, even though less than
a quorum, or by a majority vote of a committee of disinterested directors
designated by a majority vote of disinterested directors, even though less than
a quorum, or (ii) if Indemnitee files suit against the Company for
indemnification in accordance with Section 3 hereof, by a final judicial
decision from which there is no further right to appeal. No security shall be
required in connection with any Undertaking and any Undertaking shall be
accepted without reference to Indemnitee’s ability to repay. For purposes of
this Agreement, “Independent Counsel” means a law firm, a member of a law firm,
or an independent practitioner that is experienced in matters of Delaware
corporation law and shall include any such person who, under the applicable
standards of professional conduct then prevailing, would not have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights hereunder. Independent Counsel shall be selected
by the Board of Directors.


 


(b) Notwithstanding any provision to the contrary in Section 2(a) above,
the Company shall not be required to advance such expenses to Indemnitee in
connection with any action, suit or proceeding (excluding compulsory
counterclaims and affirmative defenses) initiated by Indemnitee, unless such
advancement is specifically approved by a majority of the Company’s
disinterested directors, whether or not such directors constitute a quorum.


 


Section 3.   Right of
Indemnitee to Enforce Indemnification and Advancement Obligations; Presumptions.
(a) If a claim under Section 1 of this Agreement is not paid in full
by the Company within 30 days after a written claim for indemnification has
been received by the Company or a claim under Section 2 of this Agreement
is not paid in full by the Company within 20 days after a written claim for
advancement of expenses has been received by the Company, Indemnitee shall be
entitled at any time thereafter to bring suit against the Company to recover
the unpaid amount of any such claim, provided in each case that the written
claim satisfies any applicable requirements under the DGCL and the Company’s
Certificate of Incorporation. If successful in whole or in part in any such
suit, or in a suit brought by the Company seeking to recover a prior
advancement of expenses to Indemnitee, 
Indemnitee shall be entitled additionally to be paid, and to seek as an
award in connection with any such suit, the cost and expenses (including
attorneys’ fees) incurred by Indemnitee in prosecuting or defending such suit. (b) 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 3
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, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of the
suit as to whether indemnification of Indemnitee is proper in the circumstances
because the Indemnitee has met any applicable standard of conduct set forth in
Delaware law, nor an actual determination by the Company (including its Board
of Directors, independent legal counsel, or its stockholders) that Indemnitee
has not met any such applicable standard of conduct, shall be a defense to the
suit or create a


 


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presumption for purposes of
such suit that the Indemnitee has not met any applicable standard of conduct.


 


(c) If the person, persons or entity empowered or selected to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within 20 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 20-day period may be extended for a reasonable time, not to exceed an
additional 5 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.


 


Section 4.   Settlement.
The Company shall have no obligation to indemnify Indemnitee under this
Agreement for any amounts paid by or on behalf of Indemnitee in settlement of
any action, suit or proceeding effected without the Company’s prior written
consent. The Company shall not settle any claim in any manner that would impose
any fine, penalty, obligation or limitation on Indemnitee without Indemnitee’s
written consent. Neither the Company nor Indemnitee shall unreasonably withhold
their consent to any proposed settlement.


 


Section 5.   Rights not
Exclusive; Additional Indemnification Rights.


 


(a)  The rights provided herein shall not be deemed exclusive of
any other rights that Indemnitee may have or hereafter acquire under any
statute, provision of the Company’s Certificate of Incorporation or Bylaws,
agreement, directors’ and officers’ liability insurance policy, vote of
stockholders or disinterested directors, or otherwise, both as to action in
Indemnitee’s official capacity and as to action in any other capacity while
holding such office.


 


(b)  The right to be indemnified or to receive advancement of
expenses under this Agreement is and is intended to be retroactive and shall be
available as to events occurring prior to the date of this Agreement.


 


(c)  In the event of any change after the date of this Agreement
in any applicable law, statute or rule which expands the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, employee, agent or fiduciary, it is the intent of the parties hereto
that Indemnitee shall enjoy by this Agreement the greater benefits afforded by
such change. In the event of any change in any applicable law, statute or rule which
narrows the right of a Delaware corporation to indemnify a member of its board
of directors or an officer, employee, agent or fiduciary, such change, to the
extent not otherwise required by such law, statute or rule to be applied
to this Agreement, shall have no effect on this Agreement or the parties’
rights and obligations hereunder.


 


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Section 6.   Consideration.
The Company expressly confirms and agrees that it has entered into this
Agreement and has assumed the obligations imposed on the Company hereby in
order to induce Indemnitee to continue as a director of the Company, and
acknowledges that Indemnitee is relying upon this Agreement in continuing in
such capacity.


 


Section 7.   Subrogation.
In the event of payment under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the rights of recovery of Indemnitee,
who shall execute all documents required and shall do all acts that may be
necessary to secure such rights and to enable the Company effectively to bring
suit to enforce such rights.


 


Section 8.   Contribution.
If it is established 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, shall contribute to the amount Indemnitee has
incurred, in connection with that Proceeding, in such proportion as is deemed
fair and reasonable in light of all the circumstances of that Proceeding in
order to reflect:


 


(a) the relative benefits Indemnitee and the Company have received
as a result of the event(s) or transaction(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).


 


Section 9.  Severability.
In the event that a court shall determine that any provision of this Agreement
requires the Company to do or to fail to do an act in violation of applicable
law, such provision shall be limited or modified in its application to the
minimum extent necessary to avoid a violation of law, and, as so limited or
modified, such provision and the balance of this Agreement shall be enforceable
in accordance with their respective terms.


 


Section 10.  Choice of
Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware.


 


Section 11.  Consent to
Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to
the jurisdiction of the courts of the State of Delaware for all purposes in
connection with any action, suit or proceeding which arises out of or relates
to this Agreement and agree that any action instituted under this Agreement
shall be brought only in the Court of Chancery of the State of Delaware (or in
any other state court of Delaware if it is determined that the Court of
Chancery does not have jurisdiction over such action).


 


Section 12.  Binding
Effect; Successors and Assigns. This Agreement shall be binding upon
Indemnitee and upon the Company, its successors and assigns. The rights
conferred by this Agreement shall continue after Indemnitee has ceased to be a
director and shall inure to the benefit of Indemnitee, Indemnitee’s heirs,
personal representatives and assigns and to the benefit of the Company, its
successors and assigns.


 


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Section 13.   Amendment
and Termination. No amendment, modification, termination or cancellation of
this Agreement shall be effective unless made in writing signed by both of the
parties hereto.


 


Section 14.   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 in writing, and
shall be addressed if to Indemnitee, at Indemnitee’s address as set forth
beneath Indemnitee’s signature to this Agreement and if to the Company, at the
address of its principal corporate offices (Attention: Secretary) or at such
other address as a party may designate by 10 days’ advance written notice to
the other party hereto.


 


Section 15.   Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
constitute an original.


 


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


 


	
   

  	
  VENOCO, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
				



 


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