<PAGE>
                                                                    EXHIBIT 10.1


                            INDEMNIFICATION AGREEMENT

      This INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered into
this ____ day of April, 2004 (the "Effective Date") by and between Lindows,
Inc., a Delaware corporation (the "Company"), and [______________] (the
"Indemnitee").

      WHEREAS, the Company believes it is essential to retain and attract
qualified directors and officers;

      WHEREAS, the Indemnitee is or intends to become a director and/or officer
of the Company;

      WHEREAS, both the Company and the Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies;

      WHEREAS, the Company's Amended and Restated Certificate of Incorporation
(the "Certificate of Incorporation") and Bylaws (the "Bylaws") require the
Company to indemnify and advance expenses to its directors and officers to the
extent permitted by the DGCL (as hereinafter defined);

      WHEREAS, in recognition of the Indemnitee's need for (i) substantial
protection against personal liability based on the Indemnitee's reliance on the
Certificate of Incorporation and Bylaws, and (ii) an inducement to provide
effective services to the Company as a director and/or officer thereof, the
Company wishes to provide for the indemnification of the Indemnitee and to
advance expenses to the Indemnitee to the fullest extent permitted by law and as
set forth in this Agreement, and, to the extent insurance is maintained by the
Company, to provide for the continued coverage of the Indemnitee under the
Company's directors' and officers' liability insurance policies; and

      WHEREAS, the Indemnitee (i) has been serving and intends to continue
serving as a director and/or officer of the Company in part in reliance on the
Certificate of Incorporation and Bylaws; or (ii) is relying upon the rights
afforded under this Agreement in accepting Indemnitee's position as a director,
officer or employee of the Company.

      NOW, THEREFORE, in consideration of the premises contained herein and of
the Indemnitee continuing to serve the Company directly or, at its request, with
another enterprise, and intending to be legally bound hereby, the parties hereto
agree as follows:

      1.    CERTAIN DEFINITIONS.

            (a)   A "Change in Control" shall be deemed to have occurred if:

                  (i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "Exchange Act"), other than (a) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company; (b) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company; or (c) any current beneficial stockholder or
group, as defined by
<PAGE>
                                                                    EXHIBIT 10.1


Rule 13d-5 of the Exchange Act, including the heirs, assigns and successors
thereof, of beneficial ownership, within the meaning of Rule 13d-3 of the
Exchange Act, of securities possessing more than 50% of the total combined
voting power of the Company's outstanding securities; hereafter becomes the
"beneficial owner," as defined in Rule 13d-3 of the Exchange Act, directly or
indirectly, of securities of the Company representing 20% or more of the total
combined voting power represented by the Company's then outstanding Voting
Securities;

                  (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors of the
Company (the "Board") and any new director whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or

                  (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company, in one transaction or a series of
transactions, of all or substantially all of the Company's assets.

            (b) "DGCL" shall mean the General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended or interpreted;
provided, however, that in the case of any such amendment or interpretation,
only to the extent that such amendment or interpretation permits the Company to
provide broader indemnification rights than were permitted prior thereto.

            (c) "Expense" shall mean attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing for any of the foregoing, any Proceeding relating to any Indemnifiable
Event.

            (d) "Indemnifiable Event" shall mean any event or occurrence that
takes place either prior to or after the execution of this Agreement, related to
the fact that the Indemnitee is or was a director or officer of the Company, or
is or was serving at the request of the Company as a director, officer,
employee, or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, or by reason of anything done or not done by the Indemnitee in any such
capacity.

            (e) "Proceeding" shall mean any threatened, pending or completed
action, suit, investigation or proceeding, and any appeal thereof, whether
civil, criminal, administrative or investigative and/or any inquiry or
investigation, whether conducted by the Company or any other party, that the
Indemnitee in good faith believes might lead to the institution of any such
action.
<PAGE>
                                                                    EXHIBIT 10.1


            (f) "Reviewing Party" shall mean any appropriate person or body
consisting of a member or members of the Company's Board or any other person or
body appointed by the Board (including the special independent counsel referred
to in Section 6) who is not a party to the particular Proceeding with respect to
which the Indemnitee is seeking indemnification.

            (g) "Voting Securities" shall mean any securities of the Company
which vote generally in the election of directors.

      2. INDEMNIFICATION. In the event the Indemnitee was, or is a party to or
is involved (as a party, witness, or otherwise) in any Proceeding by reason of
(or arising in part out of) an Indemnifiable Event, whether the basis of the
Proceeding is the Indemnitee's alleged action in an official capacity as a
director or officer or in any other capacity while serving as a director or
officer, the Company shall indemnify the Indemnitee to the fullest extent
permitted by the DGCL against any and all Expenses, liability, and loss
(including judgments, fines, ERISA excise taxes or penalties, and amounts paid
or to be paid in settlement, and any interest, assessments, or other charges
imposed thereon, and any federal, state, local, or foreign taxes imposed on any
director or officer as a result of the actual or deemed receipt of any payments
under this Agreement) (collectively, "Liabilities") reasonably incurred or
suffered by such person in connection with such Proceeding. The Company shall
provide indemnification pursuant to this Section 2 as soon as practicable, but
in no event later than 30 days after it receives written demand from the
Indemnitee. Notwithstanding anything in this Agreement to the contrary and
except as provided in Section 5 below, the Indemnitee shall not be entitled to
indemnification pursuant to this Agreement (i) in connection with any Proceeding
initiated by the Indemnitee against the Company or any director or officer of
the Company unless (A) such indemnification is required by applicable law or (B)
the Company has joined in or consented to the initiation of such Proceeding or
(ii) on account of any suit in which judgment is rendered against the Indemnitee
pursuant to Section 16(b) of the Exchange Act for an accounting of profits made
from the purchase or sale by the Indemnitee of securities of the Company.

      3. ADVANCEMENT OF EXPENSES. The Company shall advance Expenses to the
Indemnitee within 20 days of such request (an "Expense Advance"); provided,
however, that if required by applicable corporate laws such Expenses shall be
advanced only upon delivery to the Company of an undertaking by or on behalf of
the Indemnitee to repay such amount if it is ultimately determined that the
Indemnitee is not entitled to be indemnified by the Company; and provided
further, that the Company shall make such advances only to the extent permitted
by law.

      4. REVIEW PROCEDURE FOR INDEMNIFICATION. Notwithstanding the foregoing,
(i) the obligations of the Company under Sections 2 and 3 above shall be subject
to the condition that the Reviewing Party shall not have determined (in a
written opinion, in any case in which the special independent counsel referred
to in Section 6 hereof is involved) that the Indemnitee would not be permitted
to be indemnified under applicable law, and (ii) the obligation of the Company
to make an Expense Advance pursuant to Section 3 above shall be subject to the
condition that, if, when and to the extent that the Reviewing Party determines
that the Indemnitee would not be permitted to be so indemnified under applicable
law, the Company shall be entitled to be reimbursed by the Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore paid;
provided, however, that if the Indemnitee has commenced legal
<PAGE>
                                                                    EXHIBIT 10.1


proceedings in a court of competent jurisdiction pursuant to Section 5 below to
secure a determination that the Indemnitee should be indemnified under
applicable law, any determination made by the Reviewing Party that the
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and the Indemnitee shall not be required to reimburse the Company
for any Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or have lapsed). The Indemnitee's obligation to reimburse the Company for
Expense Advances pursuant to this Section 4 shall be unsecured and no interest
shall be charged thereon. If there has not been a Change in Control, the
Reviewing Party shall be selected by the Board, and if there has been such a
Change in Control, other than a Change in Control which has been approved by a
majority of the Company's Board who were directors immediately prior to such
Change in Control, the Reviewing Party shall be the special independent counsel
referred to in Section 6 hereof.

      5. ENFORCEMENT OF INDEMNIFICATION RIGHTS. If the Reviewing Party
determines that the Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, or if the Indemnitee has
not otherwise been paid in full pursuant to Sections 2 and 3 above within 30
days after a written demand has been received by the Company, the Indemnitee
shall have the right to commence litigation in any court in the State of
Delaware having subject matter jurisdiction thereof and in which venue is proper
to recover the unpaid amount of the demand (an "Enforcement Proceeding") and, if
successful in whole or in part, the Indemnitee shall be entitled to be paid any
and all Expenses in connection with such Enforcement Proceeding. The Company
hereby consents to service of process for such Enforcement Proceeding and to
appear in any such Enforcement Proceeding. Any determination by the Reviewing
Party otherwise shall be conclusive and binding on the Company and the
Indemnitee. In the event of an action instituted by or in the name of the
Company under this Agreement or to enforce or interpret any of the terms of this
Agreement, the Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action) if the Indemnitee is
successful in whole or in part in such action.

      6. CHANGE IN CONTROL. The Company agrees that if there is a Change in
Control of the Company, other than a Change in Control which has been approved
by a majority of the Company's Board who were directors immediately prior to
such Change in Control, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under applicable law or
the Company's Certificate of Incorporation or Bylaws now or hereafter in effect
relating to indemnification for Indemnifiable Events, the Company shall seek
legal advice only from special independent counsel selected by the Indemnitee
and approved by the Company, which approval shall not be unreasonably withheld.
Such special independent counsel shall not have otherwise performed services for
the Company or the Indemnitee, other than in connection with such matters,
within the last five years. Such 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 the Indemnitee in an action to determine the Indemnitee's rights under this
Agreement. Such counsel, among other things, shall render its written opinion to
the Company and the Indemnitee as to whether and to what extent the Indemnitee
would be permitted to be indemnified under applicable law. The
<PAGE>
                                                                    EXHIBIT 10.1


Company agrees to pay the reasonable fees of the special independent counsel
referred to above and to indemnify fully such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and damages arising
out of or relating to this Agreement or the engagement of special independent
counsel pursuant to this Agreement.

      7. PARTIAL INDEMNITY. If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses and Liabilities, but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify the Indemnitee for the portion thereof
to which the Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any or all Proceedings
relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, including dismissal without prejudice, the Indemnitee
shall be indemnified against all Expenses incurred in connection therewith. In
connection with any determination by the Reviewing Party or otherwise as to
whether the Indemnitee is entitled to be indemnified hereunder, the burden of
proof shall be on the Company to establish that the Indemnitee is not so
entitled.

      8. NON-EXCLUSIVITY. The rights of the Indemnitee hereunder shall be in
addition to any other rights the Indemnitee may have under any statute,
provision of the Company's Certificate of Incorporation or Bylaws, vote of
stockholders or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office. To the extent that a change in the DGCL permits greater indemnification
by agreement than would be afforded currently under the Company's Certificate of
Incorporation and Bylaws and this Agreement, it is the intent of the parties
hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change.

      9. LIABILITY INSURANCE. The Company hereby covenants and agrees that, so
long as the Indemnitee shall continue to serve as a director or officer of the
Company and thereafter so long as the Indemnitee shall be subject to any
possible proceeding by reason of the fact that Indemnitee was an agent of the
Company, the Company shall promptly obtain and maintain in full force and effect
directors' and officers' liability insurance in reasonable amounts from
established and reputable insurers ("D&O Insurance"). In all policies of D&O
Insurance, the Indemnitee shall be named as an insured in such a manner as to
provide the Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company's directors, if the Indemnitee is a director;
or of the Company's officers, if the Indemnitee is not a director of the Company
but is an officer. Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines in good
faith that such insurance is not reasonably available, the premium, retentions
or other costs for such insurance are disproportionate to the amount of coverage
provided, the coverage provided by such insurance is limited by exclusions or
otherwise so as to provide an insufficient benefit, the Indemnitee is covered by
similar insurance maintained by a subsidiary of the Company, or the Company is
prohibited from complying with this Section 9 by applicable law.

      10. SETTLEMENT OF CLAIMS. The Company shall not be liable to indemnify the
Indemnitee under this Agreement (a) for any amounts paid in settlement of any
action or claim effected without the Company's written consent, which consent
shall not be unreasonably
<PAGE>
                                                                    EXHIBIT 10.1


withheld; or (b) for any judicial award if the Company was not given a
reasonable and timely opportunity, at its expense, to participate in the defense
of such action.

      11. NO PRESUMPTION. For purposes of this Agreement, to the fullest extent
permitted by law, the termination of any Proceeding, action, suit or claim, by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that the Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law. In addition, neither the
failure of the Reviewing Party to have made a determination as to whether the
Indemnitee has met any particular standard of conduct or had any particular
belief, nor an actual determination by the Reviewing Party that the Indemnitee
has not met such standard of conduct or did not have such belief, prior to the
commencement of an Enforcement Proceeding under this Agreement, shall be a
defense to the Indemnitee's claim or create a presumption that the Indemnitee
has not met any particular standard of conduct or did not have any particular
belief.

      12. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause
of action shall be asserted by or on behalf of the Company or any affiliate of
the Company against the Indemnitee, the Indemnitee's spouse, heirs, executors or
personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, or such longer period as may be
required by state law under the circumstances, and any claim or cause of action
of the Company or its affiliate shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such period; provided,
however, that if any shorter period of limitations is otherwise applicable to
any such cause of action, such shorter period shall govern.

      13. AMENDMENT OF THIS AGREEMENT. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
effective against the Indemnitee or the Company unless in writing and signed by
the Indemnitee, and no waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions hereof (whether
or not similar), nor shall such waiver constitute a continuing waiver. Except as
specifically provided herein, no failure to exercise or any delay in exercising
any right or remedy hereunder shall constitute a waiver thereof.

      14. 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 the Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.

      15. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent the Indemnitee has otherwise actually received payment
(under any insurance policy, Bylaw, vote, agreement or otherwise) of the amounts
otherwise indemnifiable hereunder.

      16. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any
<PAGE>
                                                                    EXHIBIT 10.1


direct or indirect successor by purchase, merger, consolidation or otherwise to
all or substantially all of the business and/or assets of the Company, spouses,
heirs, and personal and legal representatives. The Company shall require and
cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business and/or assets of the Company, by written agreement in form and
substance satisfactory to the Indemnitee, expressly to 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. This
Agreement shall continue in effect regardless of whether the Indemnitee
continues to serve as a director or officer of the Company or of any other
enterprise at the Company's request.

      17. SEVERABILITY. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

      18. GOVERNING LAW; INTERPRETATION. 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. It is understood that the parties
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent permitted by law,
including those circumstances in which indemnification would otherwise be
discretionary.

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

      20. NOTICES. All notices, demands, and other communications required or
permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand, against receipt, or mailed, postage prepaid,
certified or registered mail, return receipt requested, and addressed to the
Company at:

                        Lindows, Inc.
                        9333 Genesee Ave., 3rd Floor
                        San Diego, CA  92121

      and to the Indemnitee at:

                        --------------------------

                        --------------------------

                        --------------------------
<PAGE>
                                                                    EXHIBIT 10.1


      Notice of change of address shall be effective only when done in
accordance with this Section. All notices complying with this Section shall be
deemed to have been received on the date of delivery or on the third business
day after mailing.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
                                                                    EXHIBIT 10.1


      IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day first set forth above.

                                    THE COMPANY:

                                    LINDOWS, INC.

                                    By:
                                       --------------------------------------

                                    Name:
                                         ------------------------------------

                                    Title:
                                          -----------------------------------



                                    INDEMNITEE:



                                    -----------------------------------------
                                                     Signature

                                    Print Name:
                                               ------------------------------






                  [SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT]