**Exhibit 10.12**

 

**FORM OF INDEMNIFICATIONAGREEMENT**

 

THIS INDEMNIFICATIONAGREEMENT (this “Agreement”) is made as of                        by and among K-Sea General Partner GP, LLC, a Delaware limited liabilitycompany (the “Company”), K-Sea General Partner, L.P., a Delaware limitedpartnership (the “General Partner”), K-Sea Transportation Partners L.P., aDelaware limited partnership (the “Partnership”), and                             (“Indemnitee”).

 

PRELIMINARY STATEMENT

 

WHEREAS, qualifiedpersons are reluctant to serve organizations as directors or officers or inother capacities unless they are provided with adequate protection againstinordinate risks of claims and actions against them arising out of theirservice to and activities on behalf of such organizations;

 

WHEREAS, the partieshereto recognize that the legal risks and potential liabilities, and the threatthereof, associated with lawsuits filed against persons serving the Company,the General Partner, the Partnership and/or their respective subsidiaries, andthe resultant substantial time, expense and anxiety spent and endured indefending lawsuits bears no reasonable relationship to the compensationreceived by such persons, and thus poses a significant deterrent and increasedreluctance on the part of experienced and capable individuals to serve theCompany, the General Partner, the Partnership and/or their respectivesubsidiaries;

 

WHEREAS, theuncertainties related to obtaining adequate insurance and indemnification haveincreased the difficulty of attracting and retaining such persons;

 

WHEREAS, it isreasonable, prudent and necessary for the Company, the General Partners and thePartnership to contractually agree to indemnify such persons to the fullestextent permitted by law, so that such persons will serve or continue to servethe Company, the General Partner, the Partnership and/or their respectivesubsidiaries free from undue concern that they will not be adequatelyindemnified; and

 

WHEREAS, the Indemniteeis willing to serve, continue to serve and to take on additional service for anon behalf of the Company, the General Partner and the Partnership on thecondition that the Indemnitee is indemnified according to the terms of thisAgreement;

 

NOW, THEREFORE, inconsideration of the premises and the covenants herein, the parties to thisAgreement agree as follows:

 

# Section 1.  *Services byIndemnitee.*  Indemniteewill serve, or continue to serve, as a Functionary of the Company and, asIndemnitee and the Company may agree, as a Functionary of one or more RelatedEnterprises.  Indemnitee may at any timeand for any reason resign from any such service, subject to any othercontractual obligation or any obligation applicable law imposes.  This Agreement is not and is not to beconstrued as an employment contract by the Company or any other RelatedEnterprise with Indemnitee or as otherwise affecting Indemnitee’s status, ifany, as an employee of the Company or any Related Enterprise.

 

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# Section 2.  *Indemnification*.  (a)  If and whenever:

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### (1)                                  Indemniteewas or is, or is threatened to be made, a party to any Proceeding by reason of:

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##### (A)                              thefact that Indemnitee serves or served as (1) a Functionary of the Companyor, at the request of the Company, (2) a Functionary of a RelatedEnterprise; or

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##### (B)                                the actual or alleged service or conduct of Indemnitee inIndemnitee’s capacity as that Functionary, including any act actually orallegedly done or not done by Indemnitee;

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and

 

### (2)                                  Indemnitee(A) engaged in the service or conduct at issue in that Proceeding in goodfaith and in a manner Indemnitee reasonably believed to be in or not opposed tothe best interests of the Company and, in the event that Proceeding was or is acriminal action or proceeding involving Indemnitee’s conduct, (B) had noreasonable cause to believe that that conduct was unlawful,

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thePartnership will, or will cause another Partnership Entity to, indemnifyIndemnitee against, and hold Indemnitee harmless from and in respect of:

 

### (1)                                  inthe case of each Claim in that Proceeding, other than a Company Claim, allliabilities and losses, including the amounts of all judgments, penalties andfines, including excise taxes, and amounts paid in settlement, Indemnitee hassuffered or will suffer, and all Expenses Indemnitee reasonably has incurred orwill incur, as a result of or in connection with that Claim; and

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### (2)                                  inthe case of each Company Claim in that Proceeding, all Expenses Indemniteereasonably has incurred or will incur as a result of or in connection with thatCompany Claim; provided, however, that the Partnership will not have anyobligation under this clause (2) to, or to cause another PartnershipEntity to, indemnify Indemnitee against, or hold Indemnitee harmless from or inrespect of, any Company Claim as to which Indemnitee was or is adjudged to beliable to the Company or any Related Enterprise unless, and only to the extentthat, the Court of Chancery or the court in which that Company Claim was or isbrought determines on application that, despite the adjudication of liability,but in view of all the circumstances of the case, Indemnitee is fairly andreasonably entitled to indemnity for such of those Expenses as the Court ofChancery or that other court shall deem proper.

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(b)                                 Ifand whenever Indemnitee was or is, or is threatened to be made, a party to anyProceeding of any type to which Section 2(a) refers and has beensuccessful, on the merits or otherwise, in defense of that Proceeding, or indefense of any Claim therein, the Partnership will, or will cause another PartnershipEntity to, indemnify Indemnitee against, and hold Indemnitee harmless from andin respect of, all Expenses Indemnitee reasonably has incurred in connection 

 

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therewith.  The rights of Indemnitee under this Section 2(b) arein addition to, and independent of, the rights of Indemnitee under Sections 2(a) or2(c).

 

(c)                                  Ifand whenever Indemnitee was, or reasonably could have been expected to havebeen, or is, or reasonably could be expected to be, by reason of the knowledgeof facts Indemnitee actually or allegedly has obtained in the course of hisservice as (1) a Functionary of the Company or, at the request of theCompany, (2) a Functionary of a Related Enterprise, a witness in or adeponent in connection with any Proceeding to which Indemnitee was or is not aparty, the Partnership will, or will cause another Partnership Entity to,indemnify Indemnitee against, and hold Indemnitee harmless from and in respectof, all Expenses Indemnitee reasonably has incurred or will incur in connectiontherewith.  The rights of Indemniteeunder this Section 2(c) are in addition to, and independent of, therights of Indemnitee under Sections 2(a) or 2(b).

 

# Section 3.  *Advancementof Expenses.***(a) Ifand whenever Indemnitee is, or is threatened to be made, a party to anyProceeding that may give rise to a right of Indemnitee to indemnification underSection 2(a), the Partnership will, or will cause another PartnershipEntity to, advance all Expenses reasonably incurred by or on behalf ofIndemnitee in connection with that Proceeding within 10 days after the Companyreceives a statement or statements from Indemnitee requesting the advance oradvances from time to time, whether prior to or after final disposition of thatProceeding.  Each such statement mustreasonably evidence the Expenses incurred by or on behalf of Indemnitee andinclude or be preceded or accompanied by an undertaking by or on behalf ofIndemnitee to repay any Expenses advanced if it ultimately is determined thatIndemnitee is not entitled to be indemnified by the Company under Section 2(a) againstthose Expenses.  The Partnership willaccept any such undertaking without reference to the financial ability ofIndemnitee to make repayment.  If the Partnershipor another Partnership Entity advances Expenses in connection with any Claim asto which Indemnitee has requested or may request indemnification under Section 2(a) anda determination is made under Section 5(c) that Indemnitee is notentitled to that indemnification, Indemnitee will not be required to reimbursethe Partnership or that other Partnership Entity for those advances until the180th day following the date of that determination; provided, however, that ifIndemnitee timely commences and thereafter prosecutes in good faith a judicialproceeding or arbitration under Section 7(a) or otherwise to obtainthat indemnification, Indemnitee will not be required to reimburse thePartnership or that other Partnership Entity for those Expenses until adetermination in that proceeding or arbitration that Indemnitee is not entitledto that indemnification has become final and nonappealable.

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## (b)                                 ThePartnership or another Partnership Entity may advance Expenses under Section 3(a) toIndemnitee or, at the Company’s option, directly to the Person to which thoseExpenses are owed, and Indemnitee hereby consents to any such direct payment,to Indemnitee’s legal counsel or any other Person.

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## (c)                                  Forthe avoidance of doubt, the parties agree that the provisions of this Section 3shall be applicable during the pendancy of any determination of the right ofthe Indemnitee to indemnification under Section 2(a), including thependancy of any court or arbitration proceeding contemplated by Section 7.

 

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# Section 4.  *Notificationand Defense of Claims*. (a)  If Indemnitee receives notice, otherwise than from theCompany, that Indemnitee is or will be made, or is threatened to be made, aparty to any Proceeding in respect of which Indemnitee intends to seekindemnification hereunder, Indemnitee must promptly notify the Company inwriting of the nature and, to Indemnitee’s knowledge, status of thatProceeding.  If this Section 4(a) requiresIndemnitee to give such a notice, but Indemnitee fails to do so, that failurewill not relieve the Company from, or otherwise affect, the obligations thePartnership may have to indemnify Indemnitee under this Agreement, unless theCompany can establish that the failure has resulted in actual prejudice to theCompany.

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## (b)                                 Exceptas this Section 4(b) otherwise provides below, in the case of anyProceeding in respect of which Indemnitee seeks indemnification hereunder:

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### (1)                                  the Company and any Related Enterprise that also may beobligated to indemnify Indemnitee in respect of that Proceeding will beentitled to participate at its own expense in that Proceeding;

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### (2)                                  theCompany or that Related Enterprise, or either of them, will be entitled toassume the defense of all Claims, other than (A) Company Claims, if any,and (B) other Claims, if any, as to which Indemnitee shall reasonablyreach the conclusion clause (3) of the next sentence describes, inthat Proceeding against Indemnitee by prompt written notice of that election toIndemnitee; and

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### (3)                                  ifclause (2) above entitles the Company or that Related Enterprise to assumethe defense of any of those Claims and it delivers to Indemnitee notice of thatassumption under clause (2), the Company will not be liable to Indemniteehereunder for any fees or expenses of legal counsel for Indemnitee whichIndemnitee incurs after Indemnitee receives that notice.

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Indemnitee will have theright to employ Indemnitee’s own legal counsel in that Proceeding, but, asclause (3) of the preceding sentence provides, will bear the fees andexpenses of that counsel unless:

 

### (1)                                  the Company has authorized Indemnitee in writing to retainthat counsel;

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### (2)                                  the Company shall not within a reasonable period of timeactually have employed counsel to assume the defense of those Claims; or

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### (3)                                  Indemniteeshall have (A) reasonably concluded that a conflict of interest may existbetween Indemnitee and the Company as to the defense of one or more of thoseClaims and (B) communicated that conclusion to the Company in writing.

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## (c)                                  ThePartnership will not be obligated hereunder to, or to cause another PartnershipEntity to, indemnify Indemnitee against or hold Indemnitee harmless from and inrespect of any amounts paid, or agreed to be paid, by Indemnitee in settlementof any Claim against Indemnitee which Indemnitee effects without the Company’sprior written consent.  The Company willnot settle any Claim against Indemnitee in any manner that would impose anypenalty or limitation on Indemnitee without Indemnitee’s prior writtenconsent.  Neither the 

 

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## Companynor Indemnitee will unreasonably delay or withhold consent to any suchsettlement the other party proposes to effect.

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# Section 5.  *Procedurefor Determination of Entitlement to Indemnification*.  (a)  To obtain indemnification underthis Agreement, Indemnitee must submit to the Company a written requesttherefor which includes, or is accompanied by, such documentation andinformation as is reasonably available to Indemnitee and is reasonablynecessary to determine whether and to what extent Indemnitee is entitled tothat indemnification.  Indemnitee mayrequest indemnification hereunder at any time and from time to time asIndemnitee deems appropriate in Indemnitee’s sole discretion.  In the case of any request forindemnification under Section 2(a) as to any Claim which is pendingor threatened at the time Indemnitee delivers that request to the Company andwould not be resolved with finality, whether by judgment, order, settlement orotherwise, on payment of the indemnification requested, the Company may deferthe determination under Section 5(c) of Indemnitee’s entitlement tothat indemnification to a date that is no later than 45 days after theeffective date of that final resolution if the Board concludes in good faiththat an earlier determination would be materially prejudicial to the Company ora Related Enterprise.

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## (b)                                 Onwritten request by Indemnitee under Section 5(a) for indemnificationunder Section 2(a), the determination of Indemnitee’s entitlement to thatindemnification will be made:

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### (1)                                  if Indemnitee will be a director or officer of the Companyat the time that determination is made, under Section 5(c) in eachcase; or

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### (2)                                  ifIndemnitee will not be a director or officer of the Company at the time thatdetermination is made, under Section 5(c) in any case, if sorequested in writing by Indemnitee or so directed by the Board, or, in theabsence of that request and direction, as the Board shall duly authorize ordirect.

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## (c)                                  Eachdetermination of Indemnitee’s entitlement to indemnification under Section 2(a) towhich this Section 5(c) applies will be made as follows:

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### (1)                                  bya majority vote of the Disinterested Directors, even though less than a quorum;or

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### (2)                                  bya committee of Disinterested Directors designated by a majority vote of theDisinterested Directors, even though less than a quorum; or

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### (3)                                  if (A) there are no Disinterested Directors or (B) amajority vote of the Disinterested Directors so directs, by an IndependentCounsel in a written opinion to the Board, a copy of which the Company willdeliver to Indemnitee;

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provided,however, that if Indemnitee has so requested in Indemnitee’s request forindemnification, an Independent Counsel will make that determination in awritten opinion to the Board, a copy of which the Company will deliver toIndemnitee.

 

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## (d)                                 Ifit is determined that Indemnitee is entitled to indemnification under Section 2(a),the Partnership will, or will cause another Partnership Entity to, subject tothe provisions of Section 5(f):

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### (1)                                  within10 days after that determination pay to Indemnitee all amounts (A) theretoforeincurred by or on behalf of Indemnitee in respect of which Indemnitee isentitled to that indemnification by reason of that determination and (B) requestedfrom the Company in writing by Indemnitee; and

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### (2)                                  thereafteron written request by Indemnitee, pay to Indemnitee within 10 days after thatrequest such additional amounts theretofore incurred by or on behalf ofIndemnitee in respect of which Indemnitee is entitled to that indemnificationby reason of that determination.

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Indemnitee will cooperatewith the person, persons or entity making the determination under Section 5(c) withrespect to Indemnitee’s entitlement to indemnification under Section 2(a),including providing to such person, persons or entity, on reasonable advancerequest, any documentation or information that is:

 

### (1)                                  not privileged or otherwise protected from disclosure;

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### (2)                                  reasonablyavailable to Indemnitee; and

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### (3)                                  reasonably necessary to that determination.

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## (e)                                  Ifan Independent Counsel is to make a determination under Section 5(c) ofentitlement to indemnification under Section 2(a), it will be selected bythe Company with the consent of the Indemnitee (which consent shall not beunreasonably withheld).  The Partnershipwill pay any and all reasonable fees and expenses the Independent Counselincurs in connection with acting under Section 5(c), and the Partnershipwill pay all reasonable fees and expenses incident to the procedures this Section 5(e) setsforth, regardless of the manner in which the Independent Counsel is selected orappointed.  If Indemnitee becomesentitled to, and does, initiate any judicial proceeding or arbitration under Section 7,the Company will terminate its engagement of the person or firm acting asIndependent Counsel, whereupon that person or firm will be, subject to theapplicable standards of professional conduct then prevailing, relieved of anyfurther responsibility in the capacity of Independent Counsel.

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## (f)                                    Theamount of any indemnification against Expenses to which Indemnitee becomesentitled under any provision hereof, including Section 2(a), will bedetermined subject to the provisions of this Section 5(f).  Indemnitee will have the burden of showingthat Indemnitee actually has incurred the Expenses for which Indemniteerequests indemnification.  If thePartnership or a Partnership Entity has made any advance in respect of anyExpense incurred by Indemnitee without objecting in writing to Indemnitee atthe time of the advance to the reasonableness thereof, the incurrence of thatExpense by Indemnitee will be deemed for all purposes hereof to have beenreasonable.  In the case of any Expenseas to which such an objection has been made, or any Expense for which noadvance has been made, the incurrence of that Expense will be presumed to havebeen reasonable, and the Company will have the burden of proof to overcome thatpresumption.

 

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Subject to theprovisions of the preceding paragraph, the advancement of Expenses toIndemnitee under Section 3 will not, of itself, create a presumption thatthe Proceeding or Claim therein to which those Expenses relate is a Proceedingor Claim of the type to which Section 2(a) applies.  If the Company, prior to or in connectionwith the making any advance of Expenses under Section 3 to or for thebenefit of Indemnitee, notifies Indemnitee in writing that the Proceeding orany Claim therein is or reasonably could be expected to be in whole or in anyspecified part not one to which Section 2(a) applies, Indemniteewill, to the extent those Expenses are reasonably allocable among the claims,issues and matters involved in that Proceeding, cause Indemnitee’s counsel andother service providers to effect that allocation.

 

# Section 6.  *Presumptionsand Effect of Certain Proceedings.*  (a)  In making a determination under Section 5(c) withrespect to entitlement to indemnification under Section 2(a), the person,persons or entity making that determination must presume that Indemnitee isentitled to that indemnification if Indemnitee has submitted a request forindemnification in accordance with Section 5(a), and the Company will havethe burden of proof to overcome that presumption in connection with the makingby any person, persons or entity of any determination contrary to thatpresumption.

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## (b)                                 Thetermination of any Proceeding or of any Claim therein, by judgment, order,settlement or conviction, or on a plea of nolo contendere or its equivalent,will not, except as this Agreement otherwise expressly provides, of itselfadversely affect the right of Indemnitee to indemnification hereunder or, inthe case of any determination under Section 5(c) of Indemnitee’sentitlement to indemnification under Section 2(a), create a presumptionthat Indemnitee did not act in good faith and in a manner Indemnitee reasonablybelieved to be in or not opposed to the best interests of the Company or, withrespect to any criminal action or proceeding, that Indemnitee had reasonablecause to believe that Indemnitee’s conduct was unlawful.

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## (c)                                  Anyservice of Indemnitee as a Functionary of the Company or any Related Enterprisewhich imposes duties on, or involves services by, Indemnitee with respect toany Related Enterprise that is an employee benefit or welfare plan or relatedtrust, if any, or the participants or beneficiaries of that plan or trust willbe deemed for all purposes hereof as service at the request of theCompany.  Any action Indemnitee takes oromits to take in connection with any such plan or trust will, if taken oromitted in good faith by Indemnitee and in a manner Indemnitee reasonablybelieved to be in the interest of the participants in or beneficiaries of thatplan or trust, be deemed to have been taken or omitted in a manner “not opposedto the best interests of the Company” for all purposes hereof.

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Service by aperson as an agent or representative of an Enterprise means service on behalfof that Enterprise in its relations with persons and entities other than theAffiliates and Functionaries of that Enterprise.

 

## (d)                                 Forpurposes of any determination hereunder as to whether Indemnitee has performedservices or engaged in conduct on behalf of any Enterprise in good faith,Indemnitee will be deemed to have acted in good faith if Indemnitee acted inreliance on the records of the Enterprise or on information, opinions, reportsor statements, including financial statements and 

 

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## otherfinancial information, concerning the Enterprise or any other Person which wereprepared or supplied to Indemnitee by:

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### (1)                                  one or more of the officers or employees of the Enterprise;

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### (2)                                  appraisers,engineers, investment bankers, legal counsel or other Persons as to mattersIndemnitee reasonably believed were within the professional or expertcompetence of those Persons; and

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### (3)                                  any committee of the board of directors or equivalentmanaging body of the Enterprise of which Indemnitee is or was, at the relevanttime, not a member;

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provided,however, that if Indemnitee has actual knowledge as to any matter that makesany such reliance unwarranted as to that matter, this Section 6(d) willnot entitle Indemnitee to any presumption that Indemnitee acted in good faithrespecting that matter.

 

## (e)                                  Forpurposes of any determination hereunder as to whether Indemnitee is entitled toindemnification under Section 2(a), neither the knowledge nor the conductof any other Functionary of the Company or any Related Enterprise, other thanIndemnitee, shall be imputed to Indemnitee, but Indemnitee will be irrebutablypresumed to have read and understood the Company’s code of business conduct forpurposes of any determination under the Charter Documents or this Agreement asto whether Indemnitee has performed services or engaged in conduct on behalf ofany Enterprise in good faith.

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## (f)                                    Indemniteewill be deemed a party to a Proceeding for all purposes hereof if Indemnitee isnamed as a defendant or respondent in a complaint or petition for relief inthat Proceeding, regardless of whether Indemnitee ever is served with processor makes an appearance in that Proceeding.

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## (g)                                 IfIndemnitee serves or served as a Functionary of a Related Enterprise, thatservice will be deemed to be “at the request of the Company” for all purposeshereof notwithstanding that the request is not evidenced by a writing or shownto have been made orally.  In the event theCompany were to extend the rights of indemnificationand advancement of Expenses hereunder to Indemnitee’s serving at the request ofthe Company as a Functionary of any Enterprise other than the Company or aRelated Enterprise, Indemnitee must show that the request was made by the Boardor at its authorization.

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# Section 7.  *Remedies ofIndemnitee in Certain Cases*. (a)  If Indemnitee makes a written request in compliance with Section 5(a) forindemnification under Section 2(a) and either:

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### (1)                                  nodetermination as to the entitlement of Indemnitee to that indemnification ismade before the last to occur of (A) the close of business on the date, ifany, the Company has specified under Section 5(a) as the outside datefor that determination or (B) the elapse of the 45-day period beginningthe day after the date the Company receives that request; or

 

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### (2)                                  adetermination is made under Section 5(c) that Indemnitee is notentitled to that indemnification in whole or in any part in respect of anyClaim to which that request related,

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Indemnitee will beentitled to an adjudication from the Court of Chanceryof Indemnitee’s entitlement to that indemnification.  Alternatively, Indemnitee, at Indemnitee’soption, may seek an award in arbitration to be conducted by a single arbitratorin accordance with the Commercial Arbitration Rules of the AmericanArbitration Association.  In the case ofany determination under Section 5(c) that is adverse to Indemnitee,Indemnitee must commence any such judicial proceeding or arbitration within 180days following the date on which Indemnitee first has the right to commencethat proceeding under this Section 7(a) or Indemnitee will be boundby that determination for all purposes of this Agreement.

 

## (b)                                 Ifa determination has been made under Section 5 that Indemnitee is notentitled to indemnification hereunder, any judicial proceeding or arbitrationcommenced under this Section 7 will be conducted in all respects as a denovo trial or arbitration on the merits, and Indemnitee will not be prejudicedby reason of that adverse determination. In any judicial proceeding or arbitration commenced under this Section 7,the Company will have the burden of proving that Indemnitee is not entitled toindemnification hereunder, and the Company may not, for any purpose, refer toor introduce into evidence any determination under Section 5(c) whichis adverse to Indemnitee.

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## (c)                                  Ifa determination has been made under Section 5 that Indemnitee is entitledto indemnification hereunder, the Company will be bound by that determinationin any judicial proceeding or arbitration Indemnitee thereafter commences underthis Section 7 or otherwise, absent:

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### (1)                                  amisstatement by Indemnitee of a material fact, or an omission by Indemnitee ofa material fact necessary to make Indemnitee’s statements not materiallymisleading, in connection with Indemnitee’s request for indemnification; or

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### (2)                                  a prohibition of that indemnification under applicable law.

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## (d)                                 IfIndemnitee, under this Section 7 or otherwise, seeks a judicialadjudication of or an award in arbitration to enforce Indemnitee’s rights underthis Agreement, Indemnitee will be entitled to recover from the Partnership,and will be indemnified by the Partnership against, any and all Expensesreasonably incurred by or on behalf of Indemnitee in that judicial adjudicationor arbitration, but only if Indemnitee prevails therein.  If it is determined in that judicial adjudicationor arbitration that Indemnitee is entitled to receive part of, but not all, theindemnification or advancement of expenses sought, the expenses incurred byIndemnitee in connection with that judicial adjudication or arbitration will beappropriately prorated between those in respect of which this Agreemententitles Indemnitee to indemnification and those Indemnitee must bear.

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## (e)                                  Inany judicial proceeding or arbitration under this Section 7, the Company:

 

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### (1)                                  will not, and will not permit any other Person acting on itsbehalf to, assert that the procedures or presumptions this Agreementestablishes are not valid, binding and enforceable; and

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### (2)                                  will stipulate that it is bound by all the provisionshereof.

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# Section 8.  *Non-exclusivity;Survival of Rights; Insurance; Subrogation.*  (a)  The rights to indemnification andadvancement of Expenses and the remedies this Agreement provides are not andwill not be deemed exclusive of any other rights or remedies to whichIndemnitee may at any time be entitled under applicable law, the Company’sCharter Documents, any agreement, a vote of unitholders of the Partnership orDisinterested Directors, or otherwise, but each such right or remedy hereunderwill be cumulative with all such other rights and remedies.  No amendment, alteration or termination ofthis Agreement or any provision hereof will limit or restrict any right ofIndemnitee hereunder in respect of any action Indemnitee has taken or omittedin Indemnitee’s capacity as a Functionary of the Company or any RelatedEnterprise prior to that amendment, alteration or termination.

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## (b)                                 Ifthe Company maintains an insurance policy or policies providing liabilityinsurance for Functionaries of the Company or of any Related Enterprise whoserve or served in the same capacities as Indemnitee, Indemnitee will becovered by the policy or policies in accordance with its or their terms to themaximum extent of the coverage available for any such Functionary under thepolicy or policies.  If the Companyreceives written notice from any source of a pending Proceeding to whichIndemnitee is a party and in respect of which Indemnitee might be entitled toindemnification under Section 2(a) and the Company then maintains anysuch policy of which Indemnitee is a beneficiary, the Company will:

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### (1)                                  promptly give notice of that Proceeding to the relevantinsurers in accordance with the applicable policy procedures; and

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### (2)                                  thereafter take all action necessary to cause those insurersto pay, on behalf of Indemnitee, all amounts payable in accordance with theapplicable policy terms as a result of that Proceeding;

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provided,however that the Company need not comply with the provisions of this sentenceif its failure to do so would not actually be prejudicial to Indemnitee in anymaterial respect.

 

## (c)                                  ThePartnership will not be liable under this Agreement to make or cause to be madeany payment of amounts otherwise indemnifiable hereunder, or to make or causeto be made any advance this Agreement otherwise requires it to make or cause tobe made, to or for the account of Indemnitee, if and to the extent thatIndemnitee has otherwise actually received or had applied for Indemnitee’sbenefit that payment or advance or obtained the entire benefit therefrom underany insurance policy, any other contract or agreement or otherwise.

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## (d)                                 Ifthe Partnership makes or causes to be made any payment hereunder, it will besubrogated to the extent of that payment to all the rights of recovery ofIndemnitee, who will execute all papers required and take all action necessaryto secure those rights, including execution of such documents as are necessaryto enable the Company to bring suit to enforce those rights.

 

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## (e)                                  ThePartnership’s obligation to make or cause to be made any payment or advancehereunder to or for the account of Indemnitee with respect to Indemnitee’sservice at the request of the Company as a Functionary of any RelatedEnterprise will be reduced by any amount Indemnitee has actually received asindemnification or advancement of expenses from that Related Enterprise.

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# Section 9.  *Duration ofAgreement; Binding Effect*. This Agreement will continue until and terminate on the later of:

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### (1)                                  10years after the date that Indemnitee has ceased to serve as a Functionary ofthe Company and each Related Enterprise that Indemnitee served at the requestof the Company; or

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### (2)                                  oneyear after the final, nonappealable termination of any Proceeding then pendingin respect of which Indemnitee is granted rights of indemnification oradvancement of Expenses hereunder and of any proceeding commenced by Indemniteeunder Section 7 or otherwise.

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This Agreement will bebinding on the Company and its successors and assigns and will inure to the benefitof Indemnitee and his spouse, if Indemnitee resides in Texas or anothercommunity property state, heirs, executors and administrators.

 

# Section 10.  *Severability.*  If any provision or provisions hereof is orare invalid, illegal or unenforceable for any reason whatsoever:

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### (1)                                  thevalidity, legality and enforceability of the remaining provisions hereof,including each portion of any Section containing any such invalid, illegalor unenforceable provision which is not itself invalid, illegal or unenforceable,will not in any way be affected or impaired thereby;

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### (2)                                  such provision or provisions will be deemed reformed to theextent necessary to conform to applicable law and to give the maximum effect tothe intent of the parties hereto; and

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### (3)                                  tothe fullest extent possible, the provisions hereof, including each portion ofany Section containing any such invalid, illegal or unenforceableprovision which is not itself invalid, illegal or unenforceable, will beconstrued so as to give effect to the intent manifested thereby.

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# Section 11.  *Exceptionsto Right of Indemnification or Advancement of Expenses.*  No provision in this Agreement will obligatethe Partnership to pay or cause to be paid any indemnity to or for the accountof Indemnitee, or to advance or cause to be advanced Expenses under Section 3,in connection with or as a result of:

#  

### (1)                                  anyClaim made against Indemnitee for an accounting of profits, under Section 16(b) ofthe Exchange Act or similar provision of state statutory or common law, fromthe purchase and sale, or sale and purchase, by Indemnitee of securities of theCompany or any Related Enterprise;

 

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### (2)                                  any Company Claim made against Indemnitee for:

###  

(A)                              any unauthorized conversion to personal use, embezzlement ormisappropriation of assets of the Company or any Related Enterprise or anytransaction from which Indemnitee derived an improper personal benefit;

 

(B)                                any forgery or alteration of negotiable instruments of theCompany or any Related Enterprise;

 

(C)                                any falsification of the records or financial statements ofthe Company or any Related Enterprise for personal or other reasons; or

 

(D)                               any breach of a contractual obligation to pay or repay orotherwise return money to the Company or any Related Enterprise; or

 

### (3)                                  exceptfor any Claim initiated by Indemnitee, whether as a cause of action or as adefense to a cause of action under Section 7 or otherwise, to enforce orestablish, by declaratory judgment or otherwise, Indemnitee’s rights orremedies hereunder, any Claim initiated by Indemnitee without the priorauthorization of the Board against the Company or any Related Enterprise or anyof their respective present or former Functionaries.

###  

# Section 12.  *IdenticalCounterparts.*  ThisAgreement may be executed in one or more counterparts, each of which will forall purposes be deemed to be an original but all of which together willconstitute one and the same agreement. Only one such counterpart signed by the party against whom enforceabilityis sought needs to be produced to evidence the existence of this Agreement.

#  

# Section 13.  *Headings.*  The headings of the Sections hereof areinserted for convenience only and do not and will not be deemed to constitutepart of this Agreement or to affect the construction thereof.

#  

# Section 14.  *Definitionsand Definitional Provisions*. (a) For purposes of this Agreement:

#  

“*Affiliate*” has the meaning Exchange Act Rule 12b-2specifies.

 

*“Board”*means the Board of Directors of the Company.

 

“*Charter Documents*” means, with respect to any corporation orother entity at any time, in each case as amended, modified and supplemented atthat time:

 

#### (1)                                  the articles or certificate of formation, incorporation ororganization, or the equivalent organizational documents, of that entity;

####  

#### (2)                                  thebylaws or limited liability company agreement or regulations, limitedpartnership agreement, or the equivalent governing documents, of that entity;and

 

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#### (3)                                  each document setting forth the designation, amount andrelative rights, limitations and preferences of any class or series of thatentity’s capital stock or other equity interests.

####  

*“Claim”*means any claim for damages or a declaratory, equitable or other substantive remedy,or any other issue or matter, in any Proceeding.

 

“*Company Claim*” means any Claim brought by or in the right ofthe Company or a Related Enterprise against Indemnitee.

 

“*Court of Chancery*” means the Court of Chancery of the Stateof Delaware.

 

“*Disinterested Director*” means a director of the Company whois not and was not a party to the Proceeding, or any Claim therein, in respectof which indemnification is sought by Indemnitee hereunder.

 

*“Enterprise”*means any business trust, corporation, joint venture, limited liabilitycompany, partnership or other entity or enterprise, including any operationaldivision of any entity or any operational group of entities or divisions ofentities, or any employee benefit or welfare plan or related trust.

 

“*Exchange Act*” means the Securities Exchange Act of 1934, asamended.

 

“*Expenses*” include all attorneys’ fees, retainers, courtcosts, transcript costs, fees of experts, witness fees, travel expenses,duplicating costs, printing and binding costs, telephone charges, postage,delivery service fees, all other disbursements or expenses of the typescustomarily incurred in connection with prosecuting, defending, preparing toprosecute or defend, investigating, being or preparing to be a witness in, orotherwise participating in, a Proceeding. Should any payments by the Company or a Company Entity to or for theaccount of Indemnitee under this Agreement be determined to be subject to anyfederal, state or local income or excise tax, “Expenses” also will include suchamounts as are necessary to place Indemnitee in the same after-tax position,after giving effect to all applicable taxes, Indemnitee would have been in hadno such tax been determined to apply to those payments.

 

*“Functionary”*of any Enterprise means any natural person who is a director, officer, manager,administrator, employee, agent, representative or other functionary of thatEnterprise, including, in the case of any employee benefit or welfare plan, anymember of any committee administering that plan or any individual to whom theduties of that committee are delegated.

 

“*Independent Counsel*” means in the case of any determinationunder Section 5 a law firm, or a member of a law firm that or who isexperienced in matters of corporation law and neither presently is, nor in thepast five years has been, retained to represent:

 

#### (1)                                  the Company or any of its Affiliates or Indemnitee in anymatter material to any such Person; or

 

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#### (2)                                  any other party to the Proceeding giving rise to a claim forindemnification hereunder.

####  

Notwithstanding theforegoing, the term “Independent Counsel” does not include at any time anyPerson who, under the applicable standards of professional conduct thenprevailing, would have a conflict of interest in representing either theCompany or a Related Enterprise or Indemnitee in an action to determineIndemnitee’s rights under this Agreement.

 

*“PartnershipEntity”* means any Related Enterprise, other than an employeebenefit or welfare plan or its related trust, if any.

 

“*Person*” means any natural person, sole proprietorship,corporation, partnership, limited liability company, business trust,unincorporated organization or association, mutual company, jointstock company, joint venture or any other entity of any kind having aseparate legal status or any estate, trust, union or employee organization orgovernmental authority.

 

“*Proceeding*” includes any threatened, pending or completedaction, suit, arbitration, alternate dispute resolution procedure,investigation, inquiry or other threatened, actual or completed proceeding,whether of a civil, criminal, administrative, investigative or private natureand irrespective of the initiator thereof, and any appeal in any suchproceeding.

 

*“RelatedEnterprise”* means at any time any Enterprise:

 

#### (1)                                  50%or more of the outstanding capital stock or other ownership interests of which,or the assets of which, the Company owns or controls, or previously owned orcontrolled, directly or indirectly, at that time;

####  

#### (2)                                  50%or more of the outstanding voting power of the outstanding capital stock orother ownership interests of which the Company owns or controls, or previouslyowned or controlled, directly or indirectly, at that time;

####  

#### (3)                                  thatis, or previously was, an Affiliate of the Company which the Company controls,or previously controlled, by ownership, contract or otherwise and whether aloneor together with another Person, directly or indirectly, at that time; or

####  

#### (4)                                  if that Enterprise is an employee benefit or welfare plan orrelated trust, whose participants or beneficiaries are present or formeremployees of the Company or any other Related Enterprise.

####  

## (b)                                 ThisAgreement uses the words “herein,” “hereof” and “hereunder” and words ofsimilar import to refer to this Agreement as a whole and not to any provisionof this Agreement, and the words “Section” and “Preliminary Statement” refer toSections of and the Preliminary Statement in this Agreement, unless itotherwise specifies.

 

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## (c)                                  Wheneverthe context so requires, the singular number includes the plural and viceversa, and a reference to one gender includes the other gender and the neuter.

##  

## (d)                                 Theword “including,” and, with correlative meaning, the word “include,” meansincluding, without limiting the generality of any description preceding thatword, and the words “shall” and “will” are used interchangeably and have thesame meaning.

##  

## (e)                                  Thelanguage this Agreement uses will be deemed to be the language the partieshereto have chosen to express their mutual intent, and no rule of strictconstruction will be applied against either party hereto.

##  

# Section 15.  *Modificationand Waiver*.  Nosupplement to or modification or amendment of this Agreement will be bindingunless executed in writing by both parties hereto.  No waiver of any provision hereof will bedeemed or will constitute a waiver of any other provision hereof, whether ornot similar, nor will any such waiver constitute a continuing waiver.

#  

# Section 16.  *Reliance*.  The Company confirms and agrees withIndemnitee that it has entered into this Agreement and assumed the obligationsthis Agreement imposes on it in order to induce Indemnitee to serve, orcontinue to serve, as a Functionary of the Company or a RelatedEnterprise.  The Company acknowledgesthat Indemnitee is relying on this Agreement in so serving.

#  

# Section 17.  *Notices*.  All notices, requests, demands and othercommunications hereunder must be in writing or by electronic transmission andwill be deemed delivered and received:

#  

#### (1)                                  if personally delivered or if delivered by telex, telegram,facsimile, electronic transmission or courier service, when actually receivedby the party to whom the notice or communication is sent; or

####  

#### (2)                                  ifdelivered by mail, whether actually received or not, at the close of businesson the third business day in the city in which the Company’s principalexecutive office is located next following the day when placed in the U.S.mail, postage prepaid, certified or registered, addressed to the appropriateparty at the address of that party set forth below, or at such other address asthat party may designate by notice in writing or by electronic transmission tothe other party in accordance herewith:

####  

#### (3)                                  Ifto Indemnitee, to:

####  

[Name]

[Address]

 

with a copy, which will not constitute notice forpurposes of this Agreement, to such legal counsel, if any, as Indemnitee maydesignate in writing or by electronic transmission; and

 

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#### (4)                                  Ifto the Company, to:

####  

K-Sea General PartnerG.P., L.L.C.

3245 Richmond Terrace

Staten Island, New York10303

Attention:  Corporate Secretary

Fax No.:(718) 720-7207

E-mail:  rfalcinelli@k-sea.com

 

# Section 18.  *Contribution*.  If it is established, under Section 5(c) orotherwise, that Indemnitee has the right to be indemnified under Section 2(a) inrespect of any claim, but that right is unenforceable by reason of anyapplicable law or public policy, then, to the fullest extent applicable lawpermits, the Partnership, in lieu of indemnifying or causing theindemnification of Indemnitee under Section 2(a), will, or will cause aPartnership Entity to, contribute to the amount Indemnitee has incurred,whether for judgments, fines, penalties, excise taxes, amounts paid or to bepaid in settlement or for Expenses reasonably incurred, in connection with thatClaim, in such proportion as is deemed fair and reasonable in light of all thecircumstances of that Claim in order to reflect:

#  

### (1)                                  the relative benefits Indemnitee and the Partnership havereceived as a result of the event(s) or transaction(s) giving rise to thatClaim; or

###  

### (2)                                  the relative fault of Indemnitee and of the Partnership andits other Functionaries in connection with those event(s) or transaction(s).

###  

# Section 19.  *GoverningLaw; Submission to Jurisdiction.*  This Agreement and the legal relations amongthe parties will be governed by, and construed and enforced in accordance with,the laws of the State of Delaware, without regard to its conflict of lawsrules.  Except with respect to anyarbitration Indemnitee commences under Section 7 or as Section 2(a) expresslycontemplates otherwise, the Company and Indemnitee hereby irrevocably andunconditionally:

#  

### (1)                                  agree that any action or proceeding arising out of or inconnection with this Agreement will be brought only in the Court of Chanceryand not in any other state or federal court in the United States of America orany court in any other country;

###  

### (2)                                  consent to submit to the exclusive jurisdiction of the Courtof Chancery for purposes of any action or proceeding arising out of or inconnection with this Agreement;

###  

### (3)                                  waiveany objection to the laying of venue of any such action or proceeding in theCourt of Chancery; and

###  

### (4)                                  waive, and agree not to plead or to make, any claim that anysuch action or proceeding brought in the Court of Chancery has been brought inan improper or otherwise inconvenient forum.

 

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# Section 20.  *EntireAgreement*.  ThisAgreement constitutes the entire agreement and understanding between theCompany and Indemnitee, and supersedes all prior oral, written or impliedagreements and understandings of the Company and Indemnitee with respect to thesubject matter hereof.

 

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IN WITNESS WHEREOF, the parties hereto have executedthis Agreement effective as of the day and year first above written.

 
| **ATTEST:** | **K-SEA GENERAL PARTNER GP LLC**       |
|-------------|----------------------------------------|
|        |                                   |   |
|        |                                   |   |
| By:         |                                   |   | By: |   |   |
|        |                                   |   | [Name] |
|        |                                   | [Title] |
|        |                                   | * * |
|        |                                   |   |
| **ATTEST:** | **K-SEA GENERAL PARTNER L.P.**         |
|        |                                   |   |
|        | By:                                    | **K-Sea General Partner GP LLC,** |
|        |                                   | its general partner |
|        |                                   |   |
|        |                                   |   |
| By:         |                                   |   |   | By: |   |   |
|        |                                   |   |   | [Name] |
|        |                                   |   | [Title] |
|        |                                   |   |
|        |                                   |   |
| **ATTEST:** | **K-SEA TRANSPORTATION PARTNERS L.P.** |
|        |                                   |   |
|        | By:                                    | **K-Sea General Partner L.P.,** |
|        |                                   | its general partner |
|        |                                   |   |
|        |                                   | By: | **K-Sea General Partner GP LLC,** |
|        |                                   |   | its general partner |
|        |                                   |   |
| By:         |                                   |   |   | By: |   |   |
|        |                                   |   |   | [Name] |
|        |                                   |   | [Title] |
|        |                                   |   |
|        |                                   |   |
| **ATTEST:** | **INDEMNITEE:**                        |
|        |                                   |   |
|        |                                   |   |
| By:         |                                   |   |   |   |
|        |                                   | [Name] |
|             |                                        |  |  |  |  |  |  |  |

 

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