INDEMNIFICATION AGREEMENT
This AGREEMENT is made and entered into as of this ____ day of February 2014, by and between Enservco Corporation, a Delaware corporation (the “Company”), and the person named below as “Indemnitee”.
WHEREAS, Indemnitee has agreed to serve or continue to serve, as the case may be, as a director, officer, or in a similar capacity of one or more of the entities set forth on Exhibit A hereto (each, a “Covered Entity”), in reliance on the protections and benefits afforded to Indemnitee under and in accordance with this Agreement;
WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal liability and to encourage Indemnitee’s service to the Company and the applicable Covered Entity, and in view of the increasing difficulty in obtaining and maintaining satisfactory insurance coverage and Indemnitee’s reasonable reliance on assurance of indemnification, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest extent permitted by law (whether partial or complete) and as set forth in this Agreement, and, to the extent insurance is maintained by the Company or the applicable Covered Entity, for the coverage of Indemnitee under such directors’ and officers’ liability insurance policies; and
WHEREAS, it is reasonable, prudent and appropriate for the Company contractually to obligate itself to indemnify and to advance expenses on behalf of Indemnitee to the fullest extent permitted by applicable law so that he will serve or continue to serve the Company and the applicable Covered Entity free from undue concern that he will not be so indemnified.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements 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, agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following definitions shall apply:
(a) “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person. For purposes of this definition, the term “control” (including its correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
| Indemnification Agreement – Enservco Corporation | Page 1 |
(b) “Claim” shall be broadly construed and shall include without limitation any threatened, pending or completed action, suit or proceeding (including any mediation, arbitration or other alternative dispute resolution proceeding), whether instituted by or in the right of the Company, a Covered Entity or by any other Person, or any inquiry or investigation that Indemnitee reasonably believes might lead to the institution of any such action, suit or proceeding, whether civil (including intentional and unintentional tort claims), criminal, administrative, investigative or other.
(c) “Expenses” shall be broadly construed and shall include without limitation reasonable attorneys’ fees and all other reasonable costs, expenses and obligations paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in any Claim relating to any Indemnifiable Event.
(d) “Indemnifiable Event” shall be broadly construed and shall include without limitation any event or occurrence related to the fact that Indemnitee is or was a director, manager, member, officer, managing member or serves or served in a similar capacity of a Covered Entity.
(e) “Independent Legal Counsel” means an attorney or firm of attorneys, selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld), who shall not have otherwise performed services for Indemnitee or the Company or current or former Affiliates of the Company within the last five years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements or under the Company’s bylaws).
(f) “Person” means any individual, corporation, company, limited liability company, partnership, joint venture, governmental authority, business association or other entity.
(g) “Reviewing Party” means any appropriate Person or body consisting of a member or members of the Company’s Board of Directors or any other Person or body appointed by the Company’s Board of Directors who is neither a party to nor associated with the Claim for which Indemnitee is seeking indemnification.
2. Basic Indemnification Arrangement.
(a) In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest extent permitted by law as soon as practicable but in any event no later than 10 days after written demand is presented to the Company, against any and all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties or amounts paid in settlement) of such Claim; provided that Indemnitee makes a written demand for payment of such Expense, judgment, fine, penalty or other amount on or prior to the end of the calendar year following the calendar year in which Indemnitee incurs such Expense, judgment, fine, penalty or other amount. If so requested by Indemnitee, the Company shall advance (within 10 days of such request) any and all Expenses to Indemnitee (an “Expense Advance”). In the event the Company is also a defendant, Indemnitee hereby agrees to seek to engage the same counsel that represents the Company with regard to such Claim so long as in Indemnitee’s reasonable judgment such counsel will be able to provide Indemnitee an adequate and separate defense against such Claim.
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(b) Notwithstanding the foregoing, (i) the obligations of the Company under Section 2(a) shall be subject to the condition that the Reviewing Party shall not have determined that Indemnitee would not be permitted to be indemnified under applicable law, which determination shall be evidenced by a notice promptly delivered to Indemnitee, and (ii) the obligation of the Company to make an Expense Advance pursuant to Section 2(a) shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that (x) in the event the Reviewing Party makes such a determination under clause (i) or (ii) of this Section 2(b), the Company will be obligated to provide indemnification and an Expense Advance to Indemnitee pursuant to Section 2(a) notwithstanding such determination by the Reviewing Party in the event that Independent Legal Counsel provides to the Company within 45 days of such determination a written opinion to the effect that indemnification of Indemnitee would be permitted under applicable law with respect to the Claims in question and (y) if Indemnitee has commenced or thereafter commences legal proceeding in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party or Independent Legal Counsel, as applicable, that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and 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 right of appeal therefrom have been exhausted or lapsed). If the Reviewing Party and Independent Legal Counsel determine that Indemnitee substantively would not be permitted to be indemnified in whole or in part under application law, Indemnitee shall have the right to commence litigation in any federal or state court located in the City and County of Denver in the State of Colorado having subject matter jurisdiction thereof and in which venue is proper seeking an initial determination by the court or challenging any such determination by the Reviewing Party and Independent Legal Counsel, or any aspect thereof, including the legal or factual bases therefor, and the Company hereby consents to service of process and agrees to appear in any such proceeding. Notwithstanding the foregoing, the Company shall not be obligated under Section 2(a) to provide indemnification or make an Expense Advance if a court makes a final determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that such indemnification and Expense Advance is not permitted under applicable law. If Independent Legal Counsel determines that indemnification of Indemnitee would be permitted in whole or in part under applicable law with respect to the Claim in question, the Company shall have the right to commence litigation in any federal or state court located in City and County of Denver in the State of Colorado having subject matter jurisdiction thereof and in which venue is proper, seeking a determination by the court that such indemnification is not permitted under applicable law or challenging any such determination by Independent Legal Counsel, or any aspect thereof, including the legal or factual basis therefor, and Indemnitee hereby consents to service of process and agrees to appear in any such proceeding. Any determination by the Reviewing Party or Independent Legal Counsel, as applicable, otherwise shall be conclusive and binding on the Company and Indemnitee.
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3. Independent Legal Counsel. In the event Indemnitee’s right to indemnification and advancement of Expenses is referred to Independent Legal Counsel pursuant to Section 2(b) of this Agreement, such Independent Legal Counsel shall among other things, render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Legal Counsel and to fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
4. Indemnification for Additional Expenses. Provided that Indemnitee makes such request promptly, but in no event later than 90 days following the date Indemnitee incurred the applicable expense, the Company (a) shall (within 10 days of Indemnitee’s request for indemnification hereunder) indemnify Indemnitee against any and all reasonable expenses (including reasonable attorneys’ fees), and, (b) if requested by Indemnitee, shall (within 10 days of such request) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee (whether pursuant to Section 17 of this Agreement or otherwise) for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement, bylaw, limited liability company agreement or other similar organizational document of the Company or a Covered Entity, as the case may be, now or hereafter in effect relating to Claims for Indemnifiable Events or (ii) recovery under any directors’ and officers’ liability insurance policies maintained by the Company or a Covered Entity, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be.
5. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.
6. Burden of Proof. In connection with any determination by the Reviewing Party or Independent Legal Counsel, as applicable, or otherwise, as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled.
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7. No Presumptions. For purposes of this Agreement, the termination of any claim, action, suit or proceeding, 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 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 or Independent Legal Counsel, as applicable, to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party or Independent Legal Counsel, as applicable, that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified under applicable law, shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief.
8. Nonexclusivity; Subsequent Change in Law. The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the Company’s bylaws, under a Covered Entity’s bylaws, limited liability company agreement or other similar organizational document, under Delaware or other applicable law, or otherwise. To the extent that a change in Delaware or other applicable law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Company’s bylaws, a Covered Entity’s bylaws, limited liability company agreement or other similar organizational document or 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.
9. Liability Insurance: To the extent the Company or a Covered Entity maintains an insurance policy or policies providing directors’ and officers’ liability insurance, 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 Company director or officer in his (or her) then capacity as such; provided, however, this Agreement shall not impose any obligation on the Company or a Covered Entity to obtain or maintain any such insurance policy or policies.
10. Amendments; Waiver. 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 deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
11. 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 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.
12. 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 Indemnitee has otherwise actually received payment (under any insurance policy, bylaw, limited liability company agreement or other similar organizational document of the Company or a Covered Entity, or otherwise) of the amounts otherwise indemnifiable hereunder.
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13. 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 (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director, manager, member, officer, managing member or in a similar capacity of a Covered Entity.
14. 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 in any respect, and the validity and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired and shall remain enforceable to the fullest extent permitted by law. If a court determines that any portion of this Agreement is invalid, void or otherwise unenforceable, the court shall rewrite such provisions to most closely effect the intention of the parties as reflected by such provision determined to be invalid, void or otherwise unenforceable.
15. Effective Date. This Agreement shall be effective as of the date hereof and shall apply to any Claim for indemnification by Indemnitee on or after such date.
16. Governing Law. 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.
17. Equitable Relief. The parties hereto agree that Indemnitee may enforce this Agreement by seeking specific performance hereof or other injunctive or equitable relief, without any necessity of showing irreparable harm or posting a bond, which requirements are hereby waived, and that by seeking such specific performance or relief Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled.
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18. Further Assurance. If following the date hereof a Triggering Event (as defined below) occurs and as a result, in the good faith reasonable determination of a majority of the Covered Indemnitee Group (as defined below), the ability of the Company to satisfy its financial obligations to Indemnitee and the other members of the Covered Indemnitee Group in respect of providing indemnification and advancement of Expenses under this Agreement and the other Indemnity Agreements (as defined below) entered into with the other members of the Covered Indemnitee Group, is impaired such that it is reasonably likely that the Company will not be capable of meeting such financial obligations, then the Company’s Board of Directors will enter into good faith negotiations with the Designated Officer (as defined below) with respect to the Company’s obtaining alternative financial support for such indemnity and advancement of Expenses obligations (such as through obtaining director and officer liability insurance and similar actions). The “Designated Officer” will be a member of the Covered Indemnitee Group selected by a majority of the Covered Indemnitee Group to serve as the negotiator. A “Triggering Event” means, (x) a merger, consolidation or other business combination involving the Company, (y) a sale of all or a substantial portion of the assets and businesses of the Company or (z) the incurrence by the Company of significant indebtedness (excluding indebtedness incurred to refinance then-existing indebtedness, but including indebtedness incurred in connection with transactions referred to in clauses (x) or (y) above or in connection with acquisitions made outside the ordinary course of business of substantial assets and businesses by the Company). “Covered Indemnitee Group” means the group consisting of Indemnitee and the other persons who have entered into Indemnity Agreements. “Indemnity Agreements” means this Agreement and any other indemnification agreements substantially identical to this Agreement entered into substantially concurrently with this Agreement (or after the date hereof) by the Company with other persons serving as a director, manager, member, officer, managing member or in a similar capacity with one or more Covered Entities. The current members of the Covered Indemnity Group are set forth on Exhibit B. If the composition of the Covered Indemnity Group changes after the date hereof the Company will promptly provide Indemnitee with a revised Exhibit B reflecting such changes. The provisions of this paragraph shall terminate and be of no further force or effect on the tenth anniversary of the date upon which Indemnitee no longer serves as a director, manager, member, officer, managing member or in a similar capacity with any Covered Entity, provided, however, that if a Claim is pending on the tenth anniversary of such date, the provisions of this paragraph shall not terminate on such date but shall continue in full force and effect until such time as the pending Claim is resolved.
19. Form and Delivery of Communications. Any notice, request or other communication required or permitted to be given to the parties under this Agreement shall be in writing and either delivered in person or sent by facsimile, overnight mail or courier service, or certified or registered mail, return receipt requested, postage prepaid, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):
If to the Company:
Enservco Corporation
000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
If to Indemnitee, to the address set forth beneath Indemnitee’s signature line on the signature page to this Agreement.
20. Entire Agreement. This Agreement and the documents expressly referred to herein constitute the entire agreement between the parties hereto with respect to the indemnification of the Indemnitee by the Company for an Indemnifiable Event, and any other prior or contemporaneous oral or written understandings or agreements with respect to the indemnification of the Indemnitee by the Company for an Indemnifiable Event are expressly superseded by this Agreement.
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21. Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the federal and state courts located in the City and County of Denver in the State of Colorado for all purposes in connection with any action or proceeding that arises out of or relates to this Agreement. The Company and Indemnitee each further hereby agree that any action or proceeding that arises out of or relates to this Agreement shall be instituted only in the federal and state courts located in City and County of Denver in the State of Colorado.
22. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, notwithstanding that both parties are not signatories to the original or same counterpart.
23. Headings. The section and subsection headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above
| ENSERVCO CORPORATION | ||
| By: | ||
| Xxxx X. Xxxxx, | ||
| President | ||
| INDEMNITEE | |
| Name: | |
| Address: |
| Indemnification Agreement – Enservco Corporation | Page 8 |
Exhibit A
Covered Entities
| Name | State of Formation |
Ownership | ||
| Enservco Corporation | Delaware | Publicly Held | ||
| Dillco Fluid Service, Inc. (“Dillco”) | Kansas | 100% by Enservco | ||
| Heat Waves Hot Oil Service LLC (“Heat Waves”) | Colorado | 100% by Enservco | ||
| HE Services, LLC (“HES”) | Nevada | 100% by Heat Waves | ||
| Real GC, LLC (“Real GC”) | Colorado | 100% by Heat Waves | ||
| Trinidad Housing, LLC (“Trinidad Housing”) | Colorado | 100% by Dillco, but dissolved on May 29, 2013. | ||
| Enservco Frac Services, LLC | Delaware | 100% by Enservco, allowed to lapse under Delaware law (2013) | ||
| Aspen Gold Mining Company | Colorado | 100% by Enservco, but dissolved on May 29, 2013 | ||
| Heat Waves, LLC | Colorado | 100% by Dillco, but dissolved on May 29, 2013 |
| Indemnification Agreement – Enservco Corporation | Page 9 |
Exhibit B
Current Members of the Covered Indemnitee Group
| Name | Company | Title | ||
| Enservco Corporation | Chief Executive Officer, Chairman of the Board of Directors | |||
| Dillco Fluid Service, Inc. | Chief Executive Officer, Chairman of the Board of Directors | |||
| HE Services, LLC | Manager | |||
| Real GC, LLC | Manager | |||
| Xxxxxxx X. Xxxxxx | Heat Waves Hot Oil Service, LLC | Manager | ||
| Trinidad Housing, LLC | Manager | |||
| Enservco Frac Services, LLC |
Manager
Chief Executive Officer | |||
| Aspen Gold Mining Company |
Chairman of the Board of Directors
Chief Executive Officer | |||
| Heat Waves, LLC | Manager | |||
| Enservco Corporation |
Director
President
Chief Financial Officer
Treasurer | |||
| Xxxx X. Xxxxx | ||||
| Dillco Fluid Service, Inc. |
President
Chief Financial Officer
Treasurer | |||
| HE Services, LLC | Manager | |||
| Indemnification Agreement – Enservco Corporation | Page 10 |
| Real GC, LLC | Manager | |||
| Heat Waves Hot Oil Service, LLC | Manager | |||
| Trinidad Housing, LLC | Manager | |||
| Enservco Frac Services, LLC |
Manager
Chief Financial Officer
Treasurer | |||
| Aspen Gold Mining Company |
President
Chief Financial Officer
Treasurer
Secretary | |||
| Heat Waves, LLC | Manager | |||
| Enservco Corporation | Chief Financial Officer | |||
| Dillco Fluid Service, Inc. | Chief Financial Officer | |||
| Xxxxxx X. Xxxxxx | HE Services, LLC | Chief Financial Officer | ||
| Real GC, LLC | Chief Financial Officer | |||
| Heat Waves Hot Oil Service, LLC | Chief Financial Officer | |||
| Xxxxxx X. Xxxxxxxxx | Enservco Corporation | Director | ||
| Xxxxxx X. Xxxxxxx | Enservco Corporation | Director |
| Indemnification Agreement – Enservco Corporation | Page 11 |
| Enservco Corporation | Secretary | |||
| Xxxxxx Xxxxxx | ||||
| Dillco Fluid Service, Inc. | Secretary | |||
| Enservco Corporation | Vice President of Field Operations | |||
| Xxxxxx Xxxxx | Dillco Fluid Service, Inc. | Vice President of Field Operations | ||
| Heat Waves Hot Oil Service, LLC | Vice President of Field Operations |
| Indemnification Agreement – Enservco Corporation | Page 12 |
