Exhibit 10.19

 

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT is made as of the 22nd day of March, 2012 by and
among Dakota Plains, Inc., a Minnesota corporation (“Dakota Plains”), Travis T.
Jenson (“Jenson”), the President and a shareholder of MCT Holding Corporation, a
Nevada corporation (“MCT Holding”), and Thomas J. Howells (together with Jenson,
the “Indemnifying Parties”), a shareholder of MCT Holding.

WHEREAS, Dakota Plains, DP Acquisition Corporation, a Minnesota corporation and
wholly owned subsidiary of MCT Holding (“Merger Sub”); and MCT Holding have
entered into an Agreement and Plan of Merger (the “Merger Agreement”) dated as
of the date hereof whereby Merger Sub would merge with and into Dakota Plains
and Dakota Plains would thereby become a wholly owned subsidiary of MCT Holding;
and

WHEREAS, it is a condition to the obligation of MCT Holding and Merger Sub to
effect the closing of the transactions contemplated by the Merger Agreement that
MCT Holding and the Indemnifying Parties have entered into this Indemnification
Agreement.

NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows:

1.            Indemnification by the Indemnifying Parties.

(a)            Indemnification Relating to Representations and Warranties.
Subject to the limitations contained this Indemnification Agreement, the
Indemnifying Parties hereby agree, jointly and severally, to indemnify and hold
Dakota Plains harmless from and after the date of this Indemnification Agreement
from and against all damage it actually suffers as a result of any and all
losses, injuries, damages or deficiencies sustained by Dakota Plains in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of or pertaining
to any act or omission of MCT Holding prior to the Merger Time (as defined in
the Merger Agreement), including all judgments, costs, fees (including
reasonable attorneys’ fees), and other reasonable out of pocket expenses
incident to the foregoing. The obligations of the Indemnifying Parties to
indemnify Dakota Plains pursuant to this Section 1(a) are limited by and subject
to the following:

(i)            Time Limit. The obligation of the Indemnifying Parties to
indemnify Dakota Plains pursuant to this Section 1(a) will expire on two (2)
years from the Closing Date of the Merger Agreement (the “Section 1(a)
Expiration Date”), except with respect to (i) an indemnification claim pursuant
to this Section 1(a) theretofore asserted in writing which remains unresolved,
for which the obligation to indemnify continues until the claim is resolved and
resolved claims for which payment has not yet been made to Dakota Plains or (ii)
any claim alleging any fraud or intentional misconduct on the part of MCT
Holding prior to the Merger Time or on the part of any of the Indemnifying
Parties for which, in either case, the obligation of the Indemnifying Parties to
indemnify Dakota Plains shall not expire.

(ii)            Dollar Limit for Indemnification Claims by Dakota Plains. The
Indemnifying Parties shall be liable for all claims for indemnification pursuant
to this Section 1(a); provided, however, that in no event shall the cumulative
indemnification obligations of the Indemnifying Parties pursuant to this Section
1(a) exceed $2,000,000. Notwithstanding the foregoing, any claim alleging any
fraud or intentional misconduct on the part of MCT Holding prior to the Merger
Time or on the part of any of the Indemnifying Parties shall not be subject to
any of the limitations set forth in this Section 1(a)(ii) and shall not be
included in any calculation of the $2,000,000 cap included herein.

 

 

(b)            Notification and Opportunity to Confer. Dakota Plains agrees that
it will (i) notify the Indemnifying Parties within seven (7) business days of
Dakota Plains senior management becoming aware of a situation that is reasonably
likely to give rise to a claim for indemnification under this Indemnification
Agreement and (ii) give the Indemnifying Parties a reasonable opportunity to
resolve such situation. However, any failure to so notify the Indemnifying
Parties within such seven (7) day period shall not release the Indemnifying
Parties from their respective obligations to indemnify Dakota Plains as provided
in this Section 1, except to the extent that such failure has materially
prejudiced the Indemnifying Parties’ ability to resolve such claim on a more
favorable basis.

2.            Procedures for Indemnification. On or prior to the Section 1(a)
Expiration Date, Dakota Plains shall give the Indemnifying Parties written
notice, in reasonable detail, of all claims for indemnification being made by
Dakota Plains against the Indemnifying Parties under the applicable provisions
of this Indemnification Agreement and the amount of such claims (“Notice of
Claim”). If requested in writing by the Indemnifying Parties within fifteen (15)
days after receipt of the Notice of Claim, the Chief Executive Officer of Dakota
Plains shall meet with the Indemnifying Parties within ten (10) business days
thereafter to attempt to amicably resolve the dispute that is the subject of the
Notice of Claim. The Indemnifying Parties must give Dakota Plains written notice
of their intent to dispute the amount of a claim within thirty (30) business
days of receipt of a Notice of Claim. The eventual payment by the Indemnifying
Parties of any disputed amount shall include accrued interest of 8% per annum on
the disputed amount from the date of payment by Dakota Plains of the disputed
claim to the date of the payment to Dakota Plains by the Indemnifying Parties of
such amount.

3.            Counterparts. This Indemnification Agreement may be executed in
one or more counterparts each of which shall be deemed to constitute an original
and shall become effective when one or more counterparts have been signed by
each of the parties hereto.

4.            Governing Law. This Indemnification Agreement shall be governed by
the laws of the State of Minnesota without giving effect to conflict-of-laws
principles.

5.            Arbitration. Any unresolved dispute or controversy arising under
or in connection with this Indemnification Agreement or the transactions
contemplated hereby shall be settled exclusively by arbitration, conducted
before a single arbitrator in Minneapolis, Minnesota in accordance with the
rules of the American Arbitration Association then in effect. To the extent not
prohibited by governing law and to the extent not inconsistent with the rules of
the American Arbitration Association then in effect, the arbitrator shall have
full power and discretion to (i) authorize, direct and administer discovery,
(ii) determine all threshold issues (e.g., jurisdiction, adequacy of notice,
arbitrability, enforceability and scope), (iii) determine the applicability of
statutes of limitations, (iv) apply any substantive or procedural rule of law,
privilege or other standard, (v) receive evidence, with or without hearings, in
such form and manner as may be appropriate under the circumstances, (vi) issue
summary judgment or comparable disposition, (vii) allocate the costs and
expenses of arbitration and enforcement, including attorney’s fees, and (viii)
provide for such remedies or relief, including provisional or temporary relief
but excluding punitive damages, as equity or circumstances may warrant. The
arbitrator shall not, however, have the authority to add to, detract from or
modify any provision hereof. A decision by the arbitrator shall be final and
binding, without right of appeal for error or manifest disregard of law.
Judgment may be entered on the arbitrator’s award in any court having
jurisdiction.

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6.            Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, effective when
delivered, or if delivered by express delivery service, effective when
delivered, or if mailed by registered or certified mail (return receipt
requested), effective three business days after mailing, or if delivered by
telecopy, effective when telecopied with confirmation of receipt, to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):

If to the Indemnifying Parties, or either of them, to:

Travis T. Jenson

4685 So. Highland Drive, #202

Salt Lake City, Utah 84117

Thomas J. Howells

4685 So. Highland Drive, #202

Salt Lake City, Utah 84117

with a copy to:

Leonard W. Burningham, Esq.

455 East 500 South, #205

Salt Lake City, Utah 84111

If to Dakota Plains to:

c/o Gabriel G. Claypool

294 Grove Lane East

Wayzata, MN 55391

with a copy to:

Faegre & Benson LLP

c/o W. Morgan Burns

2200 Wells Fargo Center

90 South Seventh Street

Minneapolis, MN 55402-3901

7.            Severability. If any term or other provision of this
Indemnification Agreement is invalid, illegal or incapable of being enforced by
any rule of law, or public policy, all other conditions and provisions of this
Indemnification Agreement shall nevertheless remain in full force and effect.

8.            Entire Agreement. This Indemnification Agreement constitutes the
entire agreement with respect to the subject matter hereof.

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, the parties have caused this Indemnification Agreement to be
executed and delivered as of the date and year first above written.

  DAKOTA PLAINS, INC.                     By: /s/ Gabriel G. Claypool     Name: 
Gabriel G. Claypool     Its: Chief Executive Officer                     /s/
Travis T. Jenson     Travis T. Jenson                 /s/ Thomas J. Howells    
Thomas J. Howells  

 

 

 

 

 

 

 

[Signature Page to Indemnification Agreement]