Document:

Exhibit 10.40

FIRST AMENDMENT TO
LEASE

This FIRST AMENDMENT TO
LEASE made as of this 29th day of November, 2006, by and between CambridgePark
125 Realty Corporation, a Delaware corporation (“Landlord”) and Advanced
Magnetics, Inc., a Delaware corporation (“Tenant”).

W
I T N E S S E T H :

WHEREAS, Landlord and Tenant entered into a lease
dated February 28, 2006, (the “Lease”), for approximately 8,230 square
feet of Rentable Floor Area (the “Premises”) located on the sixth (6th) floor of the building known
as 125 CambridgePark Drive, Cambridge, Massachusetts (the “Building”) as more
particularly described in the Lease; and

WHEREAS, Landlord and Tenant wish to expand the
Premises and otherwise amend the Lease as set forth herein.

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant agree to amend the Lease as follows:

1.     All
capitalized terms used herein and not defined herein shall have the meanings
ascribed to them in the Lease.

2.     Effective as of the Expansion Date (as
defined below), Section 1.1 of the Lease is hereby amended by deleting the
data which corresponds to the following subjects and replacing it with the data
set forth below which follows such subject:

	
  “MANAGING AGENT:

  	
  Jones Lang LaSalle Americas, Inc.”

  
	
  “LANDLORD’S &
  MANAGING AGENT’S ADDRESS:

  	
  Jones Lang LaSalle
  Americas, Inc. 

  150 CambridgePark Drive

  Cambridge, MA 02140

  Attn: Chief Financial Officer”

  
	
  “LANDLORD’S
  REPRESENTATIVE:

  	
  John M. Kane”

  
	
  “PREMISES:

  	
  The space located on the
  sixth (6th)
  floor of the Building as shown on Exhibit B (the “Original Premises”)
  and the space located on the second (2nd) floor of the Building as shown on Exhibit B-1
  (the “Expansion Premises”).”

  
	
  “RENTABLE FLOOR AREA OF
  THE PREMISES:

  	
  Approximately 8,230
  square feet on the sixth (6th) floor of the Building and approximately 8,154
  rentable square feet on the second (2nd) floor of the Building for a total of 16,384 rentable
  square feet.”

  
	
  “LEASE TERM OR TERM:

  	
  Commencing on
  February 28, 2006 and continuing until February 28, 2009 (the
  “Original Term”), unless sooner terminated as provided herein or extended as
  provided herein.”

  

 

	
  “ANNUAL RENT:

  	
  (a)  With respect
  to the Original Premises, $22.75 per square foot of Rentable Floor Area of
  the Premises, or $15,602.71 per calendar month, for the first year of the
  Term, plus the partial month at the beginning of the Term, if any; $23.75 per
  square foot of Rentable Floor Area of the Premises, or $16,288.54 per
  calendar month, for the next year of the Term; and $24.75 per square foot of
  Rentable Floor Area of the Premises, or $16,974.38 per calendar month, for
  the last year of the Original Term; plus (b) with respect to the
  Expansion Premises, $27.00 per square foot of Rentable Floor Area of the
  Expansion Premises, or $18,346.50 per calendar month for the first (1st) year following the
  Expansion Date; $28.00 per square foot of Rentable Floor Area of the
  Expansion Premises, or $19,026.00 per calendar month for the second (2nd) year following the
  Expansion Date; $29.00 per square foot of Rentable Floor Area of the
  Expansion Premises, or $19,705.50 per calendar month for the remainder of the
  Original Term; and (c) with respect to the entire Term, proportionally
  at such rate for any partial month and net of Tenant’s charges for electrical
  consumption in the Premises.”

  
	
  “EXPANSION ALLOWANCE

  	
  $122,310.00”

  
	
  “TENANT’S PROPORTIONATE
  SHARE:

  	
  8.91%”

  
	
  “SECURITY DEPOSIT:

  	
  $33,949.21”

  
	
  “TENANT’S PARKING ACCESS
  CARDS:

  	
  A total of 49 (the “Base
  Cards”), 16 of which are for spaces located in the lot behind the Building
  (the “Blue Lot”) and 33 of which are for spaces located in the lot behind
  100 & 150 CambridgePark Drive (the “Red Lot”); together with 16
  additional cards for spaces located in the Red Lot (the “Additional Cards”),
  at Tenant’s request, subject to availability, provided that Landlord shall
  have the right to terminate any or all of the Additional Cards upon thirty
  (30) days’ prior notice to Tenant. The Blue Lot and the Red Lot are located
  substantially as shown on the Site Plan attached as Exhibit A-1.

  

 

3.     Effective
on November 20, 2006, (the “Effective Date”) the Premises shall be
expanded to include the space on the second (2nd) floor of the Building shown on Exhibit B-1 attached hereto (the “Expansion
Premises”) consisting of approximately 8,154 square feet of Rentable Floor Area.
As of the Expansion Date, all references to the Premises shall be deemed to
refer to the original premises described in the Lease (the “Original Premises”)
together with the Expansion Premises, and Exhibit B-1
attached 

 2
 

hereto shall be deemed to
attached to the Lease as Exhibit B-1.
Tenant acknowledges that Tenant has had an opportunity to inspect the Expansion
Premises and that, except as set forth herein and in the Lease, the Expansion
Premises, shall be delivered to and accepted by Tenant As Is, Where Is, with
all faults and without representation, warranty or guaranty of any kind by
Landlord to Tenant.

Notwithstanding any
other provision hereof, Landlord shall make the improvements to the Expansion
Premises, shown on the plan attached hereto as Exhibit C
and shall provide paint, VCT tile and carpet; install a new refrigerator and
dishwasher in the kitchen area; and repair water damaged areas along the window
line (“Landlord’s Work”). All work shall be performed using Building standard
materials and finishes. In connection therewith, Landlord shall provide an
allowance equal to $122,310.00 (the “Allowance”). Tenant shall reimburse
Landlord for the amount, if any, by which the out-of-pocket costs incurred by Landlord
in connection with Landlord’s Work, including architectural and engineering
fees and the cost of the work (the “Landlord’s Cost”) exceeds the Allowance, no later than ten (10) days
after Landlord’s notice to Tenant setting forth such costs in reasonable detail.
In the event that Landlord’s Cost is less than the Allowance, Landlord shall
provide notice to Tenant setting forth the difference between Landlord’s Cost
and the Allowance (the “Difference”), which Difference shall be available to
reimburse Tenant for relocation costs incurred by Tenant, including information
technology, moving and furniture costs (“Relocation Costs”). Tenant shall
receive a credit from Landlord against rent next coming due for Relocation
Costs incurred by Tenant in an amount not to exceed the Difference, if any, no
later than ten (10) days after Tenant’s notice to Landlord setting forth
such the Relocation Costs in reasonable detail.

4.     Provided
that Tenant is not then in default of its obligations under the Lease, unless
the same is cured within the applicable cure period, if any, Tenant shall not
be required to pay Annual Rent with respect to the Expansion Premises until
that date which is three (3) months after the Effective Date (the “Expansion
Rent Commencement Date”). Notwithstanding the foregoing, in the event of a
default by Tenant before the Expansion Rent Commencement Date, which continues
after notice and the expiration of the applicable cure period, if any, Tenant
shall be responsible for payment of all Annual Rent, including Annual Rent for
the Expansion Premises, with respect to the period commencing with the
Expansion Date.

5.     Provided
that Tenant has not assigned this Lease other than to an Affiliate or sublet
more than 25% of the Premises other than to an Affiliate, and that no event of
default or condition which with the giving of notice or the passage of time, or
both, would constitute an event of default then exists, unless the same is
cured within the applicable cure period, if any, and subject to prior rights of
expansion, refusal or other rights to occupy space on the sixth (6th) floor of the Building held
by any existing Tenant, Landlord shall provide notice to Tenant (“Landlord’s
Notice”), if any space on the sixth (6th)
floor of the Building, which becomes available for lease after the date hereof
(“Available Space”), specifying in reasonable detail the Available Space. If
Tenant notifies Landlord in writing within twenty (20) days after Landlord’s
Notice that it wishes to relocate the Expansion Premises to the Available
Space, Tenant shall within the later of (a) thirty (30) days after
Landlord’s Notice  and (b) twenty
(20) days after Landlord’s delivery of a draft amendment to the Lease (the “Execution
Deadline”), execute an amendment to the Lease, under which Tenant shall lease
such space As Is, Where Is, with all faults and without representation,
warranty or guaranty of any kind by Landlord to Tenant upon the same rent per
square foot of Rentable Floor Area as set forth herein for the Expansion
Premises and otherwise upon the same provisions hereof applicable to the
Expansion Premises, other than the provisions hereof regarding Landlord’s Work
(the “New Lease Amendment”). If Tenant does not notify Landlord in writing
within said twenty (20) days after Landlord’s Notice that it elects to rent
such space upon the terms set forth in Landlord’s Notice, Landlord shall
thereafter be free to lease such space or any other space on the sixth (6th) floor of the Building to any
party on whatever terms Landlord may negotiate with such other party. If Tenant
does so notify Landlord but fails to execute the New Lease Amendment by the
Execution Deadline, such failure shall constitute a default by Tenant under the
Lease and Landlord shall thereafter be free to lease such space or any other
space on the sixth (6th)
floor of the Building to any party on whatever terms Landlord may negotiate
with such other party. If Tenant so notifies Landlord in writing within said
twenty (20) days after Landlord’s 

 3
 

Notice, and executes the
New Lease Amendment by the Execution Deadline, then the Expansion Premises
shall be removed from the Premises and all of Tenant’s personal property
removed therefrom, and the Available Space shall be added to the Premises on
that date which is sixty (60) days after Landlord’s Notice, unless otherwise
agreed by the parties in the New Lease Amendment. If Tenant fails to vacate the
Expansion Premises and remove all of Tenant’s personal property within ten (10) days
after such date, such failure shall be treated as a holdover with respect to
the Expansion Premises in accordance with the provisions of Section 6.1.16
of the Lease.

Provided that
Tenant has not assigned this Lease other than to an Affiliate or sublet more
than 25% of the Premises other than to an Affiliate, and that no event of
default or condition which with the giving of notice or the passage of time, or
both, would constitute an event of default then exists, unless the same is
cured within the applicable cure period, if any, in addition to the foregoing
right and option, if the space (the “HBSS Space”) on the sixth (6th) floor currently occupied by
Harris, Bertall Sullivan & Smith L.L.C. (“HBSS”) is made available by
HBSS for sublease, and if Landlord does not elect to recapture the HBSS Space
in accordance with its lease with HBSS, then Tenant shall have the right to
enter into a sublease with HBSS for the HBSS Space, provided that HBSS agrees
to sublease the HBSS Space to Tenant. In the event that HBSS and Tenant agree
to a sublease of the HBSS Space and Tenant occupies the HBSS Space in
accordance therewith, then, unless Tenant has already relocated from the
Expansion Premises pursuant to Section 4 of this Amendment, the Expansion
Premises shall be removed from the Premises and all of Tenant’s personal
property removed therefrom no later than the later of (i) ten (10) days
after the date on which the term of such sublease commences and Tenant occupies
the HBSS Space and (ii) thirty (30) days after notice from Tenant to
Landlord notifying Landlord that Tenant has entered into a sublease with HBSS
for the HBSS Space and the date on which the term of such sublease will
commence, together with an amount equal to the Sublease Fee. For purposes
hereof, the Sublease Fee shall be equal to the product of  $216,651.00
(which amount represents the sum of the Expansion Allowance, the value of free
rent, the Broker’s commissions, and attorneys’ fees and expenses) and a
fraction, the numerator of which is the number of months remaining in the Term
as set forth in Sectioon 1.1 of the Lease and the denominator of which is 24. If
Tenant fails to vacate the Expansion Premises and remove all of Tenant’s
personal property on such date, such failure shall be treated as a holdover with
respect to the Expansion Premises in accordance with the provisions of Section 6.1.16
of the Lease.

6.     Tenant and
Landlord represent and warrant to each other that each has dealt with no
brokers other than Jones Lang LaSalle Americas, Inc. and Cushman &
Wakefield (together, the “Brokers”). Tenant and Landlord agree to defend,
indemnify and hold the other harmless from and against any and all costs,
expenses or liability for any compensation, commissions or charges claimed by a
broker or agent with which such party has had any dealings, other than the
Brokers, with respect to this First Amendment to Lease. Landlord will pay the
commissions owing to the Brokers and agrees to defend, indemnify and hold
Tenant harmless from and against commissions claimed by the Brokers with
respect to this First Amendment to Lease.

7.     (a)   Tenant
acknowledges that it has been advised that an affiliate of the Landlord is a
collective investment fund (the “Fund”) which holds the assets of one or more
employee benefit plans or retirement arrangements which are subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
and/or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”)
(each a “Plan”), and with respect to which JPMorgan Chase Bank, N.A. (“JPMCB”)
is the Trustee and that, as a result, Landlord may be prohibited by law from
engaging in certain transactions.

(b)   Landlord hereby
represents and warrants to Tenant that, as of the date hereof, the only Plans
whose assets are invested in the Fund which, together with the interests of any
other Plans maintained by the same employer or employee organization, represent
a collective interest in the Fund in excess of ten percent (10%) of the total
interests in the Fund (each, a “10% Plan”) are referenced on Exhibit A (collectively, the “Existing 10% Plans”)
hereto.

 4
 

(c)   Tenant
represents and warrants that as of the date hereof, and at all times while it
is a Tenant under this Lease, one of the following statements is, and will
continue to be, true:  (1) Tenant is not a “party in interest” (as
defined in Section 3(14) of ERISA) or a “disqualified person” (as defined
in Section 4975 of the Code) (each a “Party in Interest”) with respect to
the Existing 10% Plans or, (2) if
Tenant is a Party in Interest, that:

(i)    neither
Tenant nor its “affiliate” (as defined in Section V(c) of PTCE 84-14,
“Affiliate”) has, or during the immediately preceding one (1) year has,
exercised the authority to either:  (i) appoint or terminate JPMCB as
the qualified professional asset manager (as defined in Section V(a) of
PTCE 84-14, “QPAM”) of any of the assets of the Existing 10% Plan with
respect to which Tenant or its Affiliate is a Party in Interest; or (ii) negotiate
the terms of the management agreement with JPMCB, including renewals or
modifications thereof, on behalf of the Existing 10% Plan; and

(ii)   neither
Tenant nor any entity controlling, or controlled by, Tenant owns a five percent
(5%) or more interest (within the meaning of PTCE 84-14, “5% Interest”)
in J.P. Morgan Chase & Co.

(d)   If Landlord or
the Fund notifies Tenant in writing that a Plan other than the Existing 10%
Plan may become a 10% Plan, Tenant will, within 10 days of such notification,
inform the Fund in writing as to whether it can make the representations in
clause (i) or (ii) of subsection (c) of this Section with
respect to such prospective 10% Plan. Thereafter, if based on such
representations made by Tenant such Plan becomes a 10% Plan, Tenant represents
and warrants that, at all times during the period Tenant is a tenant under the
Lease, the statements set forth in clause (i) or (ii) of subsection (c) will
be true with respect to such 10% Plan.

(e)   In the event
that Tenant becomes aware that any statement in subsection (c) is no
longer true with respect to a 10% Plan, Tenant will immediately notify
Landlord, and Tenant will cooperate with Landlord and/or the Fund in its efforts
to take whatever action is necessary under ERISA to rectify the situation.

8.     Except as
otherwise expressly provided in this First Amendment to Lease, all of the
terms, conditions and provisions of the Lease remain unaltered and in full
force and effect and are hereby ratified and confirmed. Time is of the essence
of the provisions hereof. This First Amendment to Lease together with the
original Lease shall be read and construed as one document. Notwithstanding the
foregoing, if an event of default by Tenant, or condition which with the giving
of notice or the passage of time, or both, would constitute an event of
default, exists on the Expansion Date, this First Amendment to Lease shall, at
the option of Landlord exercised by written notice to Tenant, be null and void
and of no further force and effect.

[Remainder
of page intentionally left blank.]

 5
 

EXECUTED as a sealed
instrument on the date and year first written above.

	
  

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
  CAMBRIDGEPARK 125 REALTY CORPORATION

  
	
   

  	
   

  	
  By:

  	
   

  	
  Canary Garrett

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Canary Garrett

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
  ADVANCED MAGNETICS, INC.

  
	
   

  	
   

  	
  By:

  	
   

  	
  Joseph L. Farmer

  
	
   

  	
   

  	
   

  	
   

  	
  Name Joseph L. Farmer

  
	
   

  	
   

  	
   

  	
   

  	
  Title: General Counsel & VP of Legal
  Affairs

  
	
   

  	
   

  	
   

  	
   

  	
  Hereunto duly authorized

  

 

 6

EXHIBIT A

Existing 10% Plans

1.                 General Motors
Hourly - Rate Employees Pension Plan

2.                 General Motors
Retirement Program for Salaried Employees

EXHIBIT B-1

Plan of Expansion Premises

[Graphic Depiction of Premises Floor Plan]

EXHIBIT C

Plan of Landlord’s Work

[Summary of Landlord’s Work]Exhibit 10.1

THIRD AMENDMENT TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDMENT TO
THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”),
dated and effective as of November 29, 2006 (the “Amendment Effective Date”),
which amends that certain Second Amended and Restated Credit Agreement dated as
of March 30, 2006, as amended by the First Amendment to the Second Amended and
Restated Credit Agreement dated as of May 2, 2006 and the Second Amendment to
Second Amended and Restated Credit Agreement dated as of October 25, 2006, by
and among VENOCO, INC., a Delaware corporation (the “Company”),
the Guarantors, each of the Lenders party thereto, BANK OF MONTREAL, a Canadian
chartered bank acting through certain of its U.S. branches or agencies, as
Administrative Agent (in such capacity, the “Administrative
Agent”), CREDIT SUISSE, CAYMAN ISLANDS BRANCH, and LEHMAN
COMMERCIAL PAPER INC., as Co-Syndication Agents and FORTIS CAPITAL CORP., as
Documentation Agent (as in effect immediately prior to the Amendment Effective
Date, the “Credit Agreement”), is by and
among the Company, the Guarantors, each of the Lenders party hereto and the
Administrative Agent.

WHEREAS,
the Company has requested that the Credit Agreement be amended to make certain
changes to the Credit Agreement on the terms and conditions set forth in this
Amendment; and

WHEREAS, all of the
Lenders have agreed to such amendments subject to the terms and conditions set
forth in this Amendment.

NOW, THEREFORE, in
consideration of the mutual agreements, provisions and covenants contained
herein and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:

Section 1.               Defined Terms; Interpretation.

(a)           Capitalized
terms used but not otherwise defined herein shall have the meanings assigned
such terms in the Credit Agreement.

(b)           The
rules of interpretation set forth in Section 1.2 of the Credit Agreement are
incorporated in this Amendment as if set forth herein.

Section 2.               Amendments.  The Credit Agreement is hereby amended as
follows:

(a)           The
following new definitions are hereby inserted into the Credit Agreement in the
appropriate alphabetical order:

“Denbury”
means Denbury Onshore, LLC, a Delaware limited liability company, and its
successors and assigns.

 1
 

 

“Denbury
Option” means the “Option to Purchase”, as such term is defined
in the Denbury Option Agreement.

“Denbury
Option Agreement” means the Option Agreement by and between
TexCal South, as Optionor, and Denbury, as Optionee, dated November 1, 2006, a
copy of which (without Exhibits and Schedules) is filed under cover of the
Company’s Current Report on Form 8-K dated November 8, 2006, filed with the SEC
on November 9, 2006.

“Denbury
Option Payments” mean the aggregate amount of cash received by
TexCal South pursuant to Section 2.3 of the Denbury Option Agreement in
consideration for the initial term of the Denbury Option.

“Hastings
Assets” means the “Assets”, as such term is defined in the
Denbury Option Agreement.

“Hastings
Borrowing Base Assets” means such of the Hastings Assets as
comprise a portion of the Borrowing Base at the relevant time.  As of the Amendment Effective Date, the
Hastings Borrowing Base Assets are composed of the Oil and Gas Properties and
all categories of associated reserves identified as the “Hastings”, “Hastings
East” and “Hastings West” Fields in the Reserve Report dated as of
July 31, 2006 prepared by DeGolyer & MacNaughton.

“Hastings
Borrowing Base Assets Value” means at the particular time in
question, the Borrowing Base value of the Hastings Assets as determined
pursuant to Section 2.6(g).

“Option
Closing Date” means the “Closing Date” as such term is defined
in the Denbury Option Agreement.

“TexCal
South” means TexCal Energy South Texas L.P., a Texas limited
partnership, which is a Guarantor. 

(b)           Section 2.6 of the Credit Agreement
is hereby amended by adding a new subsection (g) as follows:

“(g)         Hastings
Borrowing Base Assets Value.  In
addition, the Administrative Agent shall, contemporaneously with each
redetermination of the Borrowing Base pursuant to Section 2.6(b) and Section
2.6(c) commencing with the Semi-Annual Proposed Borrowing Base to be determined
as of July 1, 2008, determine (in the same manner and subject to the same
approvals as prescribed in Section 2.6(b) for the
redetermination of the Borrowing Base) the value
attributable to the Hastings Borrowing Base Assets for purposes of each
redetermined Borrowing Base.  The Administrative
Agent shall notify the Company of the resulting Hastings Borrowing Base Assets
Value at the same time notice is given of the related redetermined Borrowing
Base.” 

(c)           Section 2.6(f)(ii) of the Credit Agreement is hereby amended by replacing
the phrase “Section 8.2(f) or Section 8.2(i),” contained therein with the
phrase “any of Sections 8.2(f), 8.2(i) or 8.2(j)”.

 2
 

 

(d)           Section 2.6(f)(iii) of the Credit Agreement is hereby amended by replacing
the phrase “Section 8.2(f) or Section 8.2(i),” contained therein each time when
it appears with the phrase “any of Sections 8.2(f), 8.2(i) or 8.2(j)”.

(e)           Section
8.2 of the Credit Agreement is hereby amended by
(1) deleting the word “or” at the end of clause (h) thereof and (2) inserting
at the end of clause (i) thereof, immediately prior to the period, the
following:

“; or

(j) (i) the
grant of the Denbury Option pursuant to the Denbury Option Agreement and (ii)
the Disposition pursuant to the Denbury Option Agreement of the Hastings Assets
on an Option Closing Date at any time after November 1, 2008; provided,
however, that any such Disposition shall immediately and automatically, and
without the need for further act or evidence, reduce the Borrowing Base by the
Hastings Borrowing Base Assets Value and any resulting Deficiency shall be
immediately cured by the Company pursuant to Section 2.6(f)(ii).”

(f)            Section
8.2(f) of the Credit Agreement is hereby amended
by inserting the phrase “and the Hastings Assets” following “the Non-Hastings
Texas Oil and Gas Properties” in the first line thereof.

(g)           Section
8.4(h) is hereby amended and restated to read in its entirety as follows:

“(h)
acquisitions of proved Hydrocarbon Interests and related assets; provided,
however, that, prior to a Qualifying IPO, acquisitions of proved Hydrocarbon
Interests and related assets shall not exceed, in the aggregate for the Company
and the Guarantors, $30,000,000 during the fiscal quarter ending December 31,
2006 and during each calendar year (commencing January 1, 2007) the lesser of
(x) the difference between (1) the sum of (A) the aggregate Net Cash Proceeds
received subsequent to the date hereof of permitted Dispositions of Oil and Gas
Properties plus (B) the Denbury Option Payments, and (2) the aggregate purchase
prices paid subsequent to the date hereof for acquisitions permitted by this
Section 8.4(h) and (y) $15,000,000.”

(h)           Article
VIII of the Credit Agreement is hereby amended by
adding the following new Section 8.25:

“8.25       Limitation on Amendments to Denbury Option Agreement.  The Company shall not, directly or
indirectly:

(a) (i) amend,
supplement or otherwise modify any material term or condition (pursuant to a
waiver granted by or to such Person or otherwise) of the Denbury 

 3
 

 

Option
Agreement or (ii) fail to enforce strictly the terms and conditions of the
Denbury Option Agreement, or the indemnities and rights furnished to the
Company or any of its Subsidiaries pursuant thereto such that after giving
effect to any such amendment, supplement or modification, or any such failure
to enforce, the Denbury Option Agreement or such indemnities or rights shall be
materially less favorable to the interests of the Company, the Loan Parties or
the Lenders with respect thereto; or

(b)           otherwise amend, supplement or
otherwise modify or fail to enforce the terms and conditions of the Denbury
Option Agreement except to the extent that any such amendment, supplement or
modification or failure to enforce could not reasonably be expected to have a
Material Adverse Effect.”

(i)            Section
11.27(a) of the Credit Agreement is amended by
adding as the new last sentence thereof the following:

“With respect
to any Disposition of the Hastings Assets permitted under Section 8.2(j), the
Administrative Agent’s security interest in the related Collateral comprised of
(i) the reserved overriding royalty interest referred to in Section 1.29(a) of
the Denbury Option Agreement, (ii) the Reversionary Interest (as defined in the
Denbury Option Agreement) and, if applicable, (iii) the Volumetric Production
Payment (as defined in the Denbury Option Agreement) shall not be released.”

Section 3.               Amendment and Ratification.  Upon the effectiveness hereof as provided in
Section 4 of this Amendment, this Amendment shall be deemed to be an
amendment to the Credit Agreement, and the Credit Agreement, as modified
hereby, is hereby ratified, approved and confirmed to be in full force and
effect in each and every respect.  Except
as expressly provided by the amendments set forth in Section 2 of this
Amendment, the execution, delivery and effectiveness of this Amendment shall
neither operate as a waiver of any right, power or remedy of any Lender or any
Agent, nor constitute a waiver of any provision of any of the Loan
Documents.  All references to the Credit
Agreement in any other document, instrument, agreement or writing shall
hereafter be deemed to refer to the Credit Agreement as amended hereby.

Section 4.               Conditions to Effectiveness.
 The effectiveness of this Amendment is subject to the condition that, on
or before the Amendment Effective Date, the Administrative Agent shall have
received all of the following, in form and substance satisfactory to the
Administrative Agent and each Lender, and in sufficient copies for each Lender:

(a)           Amendment.  This Amendment, duly executed and delivered
by each of the Company and the Guarantors;

(b)           Resolutions; Incumbency; Organization Documents.  (i) Resolutions of the board of directors of
the Company and members or the board of directors of each Guarantor or its
general partner, as applicable, authorizing this Amendment, certified as of the
Amendment Effective Date by the Secretary or an Assistant Secretary of such
Person; (ii) certificates of the Secretary of the Company and the Secretary of
each Guarantor certifying the names and true 

 4
 

 

signatures of the officers of such Person authorized to execute,
deliver and perform, as applicable, this Amendment; and (iii) the Organization
Documents of the Company and of each Guarantor as in effect on the Amendment
Effective Date, certified by the Secretary or Assistant Secretary of the such
Person as of the Amendment Effective Date;

(c)           Payment of Fees.  Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses owed pursuant to the Credit
Agreement or this Amendment, in each case to the extent then due and payable at
the Amendment Effective Date, including any such costs, fees and expenses
arising under or referenced in Sections 2.8 and 11.4 of the Credit Agreement;

(d)           Certificate.  A certificate signed by a Responsible
Officer, dated as of the Amendment Effective Date, stating that (i) the
representations and warranties contained in Article VI and Section 4.5(b) of
the Credit Agreement are true and correct on and as of the Amendment Effective
Date, as though made on and as of such date; (ii) no litigation is pending or
threatened against the Company or any Subsidiary in which there is a reasonable
probability of an adverse decision which would result in a Material Adverse
Effect; and (iii) there has occurred no event or circumstance that has resulted
or would reasonably be expected to result in a Material Adverse Effect since
December 31, 2004; and

(e)           Other Documents.  Such other approvals, opinions, documents or
materials as the Administrative Agent or any Lender may reasonably request.

Section 5.               Representations and Warranties.  The Company and each Guarantor each hereby
represent and warrant that, as of the Amendment Effective Date, after giving
effect to this Amendment:

(a)           Bring-Down
of Representations and Warranties. 
The representations and warranties of the Company and each Guarantor
contained in Article VI and Section 4.5(b) of the Credit Agreement are true and
correct on and as of the Amendment Effective Date, as though made on and as of
such date.

(b)           No Litigation.  No litigation is pending or threatened
against the Company or any Subsidiary in which there is a reasonable
probability of an adverse decision which would result in a Material Adverse
Effect.

(c)           No Material Adverse Effect.  There has occurred no event or circumstance
that has resulted or would reasonably be expected to result in a Material
Adverse Effect since December 31, 2004.

(d)           No
Default or Event of Default.  No
event has occurred and is continuing which constitutes a Default, an Event of
Default or both.

Section 6.               Governing Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 5
 

 

Section 7.               Costs and Expenses.   The Company shall pay all reasonable costs
and expenses incurred by the Administrative Agent or any other Agent, the
Lenders or any of their Affiliates in connection with the development,
preparation, administration and execution of this Amendment, including Attorney
Costs incurred by any such Person with respect thereto.

Section 8.               Counterparts.  This Amendment may be executed in any number
of separate counterparts, no one of which need be signed by all parties; each
of which, when so executed, shall be deemed an original, and all of such
counterparts taken together shall be deemed to constitute but one and the same
instrument.  A fully executed counterpart
of this Amendment by facsimile signatures shall be binding upon the parties
hereto.

[Signature
Pages Follow]

 6

IN WITNESS WHEREOF, the parties hereto have caused
this Third Amendment to the Second Amended and Restated Credit Agreement be
duly executed and delivered by their respective duly authorized officers as of
the date first set forth above, to be effective as of the Amendment Effective
Date.

 

	
  

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  VENOCO, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy M. Marquez

  	
   

  
	
   

  	
   

  	
  Timothy M. Marquez

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  WHITTIER PIPELINE CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy M. Marquez

  	
   

  
	
   

  	
   

  	
  Timothy M. Marquez

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BMC, LTD.

  
	
   

  	
   

  
	
   

  	
  By: Venoco, Inc., General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy M. Marquez

  	
   

  
	
   

  	
   

  	
  Timothy M.
  Marquez

  
	
   

  	
   

  	
  Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TEXCAL ENERGY (LP) LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy M. Marquez

  	
   

  
	
   

  	
   

  	
  Timothy M. Marquez

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TEXCAL ENERGY (GP) LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy M. Marquez

  	
   

  
	
   

  	
   

  	
  Timothy M. Marquez

  
	
   

  	
   

  	
  Chief Executive Officer

  
							

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  TEXCAL ENERGY NORTH CAL L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  TEXCAL ENERGY (GP) LLC, 

  
	
   

  	
   

  	
  as general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Timothy M. Marquez

  
	
   

  	
   

  	
   

  	
  Timothy M. Marquez

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  TEXCAL ENERGY SOUTH CAL L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  TEXCAL ENERGY (GP) LLC, 

  
	
   

  	
   

  	
  as general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Timothy M. Marquez

  
	
   

  	
   

  	
   

  	
  Timothy M. Marquez

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  TEXCAL ENERGY SOUTH TEXAS L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  TEXCAL ENERGY (GP) LLC, 

  
	
   

  	
   

  	
  as general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Timothy M. Marquez

  
	
   

  	
   

  	
   

  	
  Timothy M. Marquez

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Address for Notice to the Company and the 

  Guarantors: 

  Principal Place of Business 

  and Chief Executive Office:

  
	
   

  	
   

  
	
   

  	
  370 17th Street, Suite 2950 

  Denver, Colorado 80202-1370 

  Attention: Chief Financial Officer 

  Facsimile No.: (303) 626-8315

  

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  ADMINISTRATIVE
  AGENT AND A LENDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK
  OF MONTREAL, acting through its U.S. 

  branches and agencies, including its Chicago, 

  Illinois branch, as Administrative Agent and as a 

  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph A.
  Bliss

  
	
   

  	
   

  	
  Joseph A. Bliss

  
	
   

  	
   

  	
  Director

  

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  CO-SYNDICATION AGENT AND A LENDER

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE, CAYMAN ISLANDS 

  BRANCH

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Vanessa Gomez

  
	
   

  	
   

  	
  Name: Vanessa Gomez

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shaheen
  Malik

  
	
   

  	
   

  	
  Name: Shaheen Malik

  
	
   

  	
   

  	
  Title: Associate

  

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  CO-SYNDICATION AGENT AND A LENDER

  
	
   

  	
   

  
	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Maria M.
  Lund

  
	
   

  	
   

  	
  Name: Maria M. Lund

  
	
   

  	
   

  	
  Title: Authorized signatory

  

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  DOCUMENTATION AGENT AND A LENDER

  
	
   

  	
   

  
	
   

  	
  FORTIS CAPITAL CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Casey Lowary

  
	
   

  	
   

  	
  Name: Casey Lowary

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Deirdre Sanborn

  
	
   

  	
   

  	
  Name: Deirdre Sanborn

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  A LENDER

  
	
   

  	
   

  
	
   

  	
  ALLIED IRISH BANKS P.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Connelly

  
	
   

  	
   

  	
  Name: Mark Connelly

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David
  O’Driscoll

  
	
   

  	
   

  	
  Name: David O’Driscoll

  
	
   

  	
   

  	
  Title: Assistant Vice President

  

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  A LENDER

  
	
   

  	
   

  
	
   

  	
  AMEGY BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chris R.
  Petersen

  
	
   

  	
   

  	
  Name: Chris R. Petersen

  
	
   

  	
   

  	
  Title: Banking Officer

  

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  A LENDER

  
	
   

  	
   

  
	
   

  	
  CITIBANK TEXAS, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  Benavides

  
	
   

  	
   

  	
  Name: Thomas Benavides

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  A LENDER

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NOVA SCOTIA

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William E.
  Zarrett

  
	
   

  	
   

  	
  Name: William E. Zarrett

  
	
   

  	
   

  	
  Title: Managing Director

  

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  A LENDER

  
	
   

  	
   

  
	
   

  	
  UNION BANK OF CALIFORNIA, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly
  Coll

  
	
   

  	
   

  	
  Name: Kimberly Coll

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

Venoco Third Amendment
Signature Page

 

 

	
  

  	
  A LENDER

  
	
   

  	
   

  
	
   

  	
  BANK OF OKLAHOMA,

  
	
   

  	
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Monica
  Morton

  
	
   

  	
   

  	
  Name: Monica Morton

  
	
   

  	
   

  	
  Title: Commerical Banking Officer

  

 

 

Venoco Third Amendment
Signature Page

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