Exhibit
10.27


 


DOUGLAS
DYNAMICS, INC. INDEMNIFICATION AGREEMENT


 


This
INDEMNIFICATION AGREEMENT, dated as of                     ,
2010 (this “Agreement”), is by and between Douglas Dynamics, Inc.,
a Delaware corporation (the “Company”), and the individual whose name
appears below on the signature page (“Indemnitee”).


 


WHEREAS,
the Board of Directors has determined that the inability to attract and retain
qualified persons as directors and officers is detrimental to the best
interests of the Company’s stockholders and that the Company should act to
assure such persons that there shall be adequate certainty of protection
through insurance and indemnification against risks of claims and actions
against them arising out of their service to and activities on behalf of the
Company; and


 


WHEREAS,
the Company has adopted provisions in its Certificate of Incorporation and By-laws
providing for indemnification and advancement of expenses of its directors and
officers to the fullest extent authorized by the Delaware General Corporation
Law, and the Company wishes to clarify and enhance the rights and obligations
of the Company and Indemnitee with respect to indemnification and advancement
of expenses; and


 


WHEREAS,
in order to induce and encourage highly experienced and capable persons such as
Indemnitee to serve and continue to serve as directors and officers of the
Company and in any other capacity with respect to the Company as the Company
may request (including, without limitation, as directors and officers of direct
and indirect subsidiaries of the Company), and to otherwise promote the
desirable end that such persons shall resist what they consider unjustified
lawsuits and claims made against them in connection with the good faith
performance of their duties to the Company, with the knowledge that certain
costs, judgments, penalties, fines, liabilities and expenses incurred by them
in their defense of such litigation are to be borne by the Company and they shall
receive the maximum protection against such risks and liabilities as may be
afforded by applicable law, the Board of Directors of the Company has
determined that the following Agreement is reasonable and prudent to promote
and ensure the best interests of the Company and its stockholders; and


 


WHEREAS,
the Company desires to have Indemnitee serve or continue to serve as a director
or officer of the Company and in such other capacity with respect to the
Company as the Company may request, as the case may be, free from undue concern
for unpredictable, inappropriate or unreasonable legal risks and personal
liabilities by reason of Indemnitee acting in good faith in the performance of Indemnitee’s
duty to the Company; and Indemnitee desires to serve or continue so to serve
the Company, provided, and on the express condition, that he or she is
furnished with the indemnity set forth hereinafter.


 


NOW,
THEREFORE, in consideration of Indemnitee’s continued service as a director or
officer of the Company, the parties hereto agree as follows:


 


1.                                       Service by Indemnitee.  Indemnitee shall serve and/or continue to
serve as a director or officer of the Company faithfully and to the best of Indemnitee’s
ability so long as Indemnitee is duly elected or appointed as a director or
officer of the Company and until such 


 

















 


time
as Indemnitee’s successor is elected and qualified or Indemnitee is removed as
permitted by applicable law or tenders a resignation in writing.


 


2.                                       Indemnification
and Advancement of Expenses.  The Company shall indemnify and hold harmless
Indemnitee, and shall pay to Indemnitee in advance of the final disposition of
any Proceeding (as defined below) all Expenses (as defined below) incurred by Indemnitee
in defending any such Proceeding, to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be amended or
interpreted, all on the terms and conditions set forth in this Agreement.  Without diminishing the scope of the rights provided
by this Section, the rights of Indemnitee to indemnification and advancement of
Expenses provided hereunder shall include but shall not be limited to those
rights hereinafter set forth, except that no indemnification or advancement of
Expenses shall be paid to Indemnitee:


 


(a)                                  to the extent
expressly prohibited by applicable law or the Certificate of Incorporation and By-laws
of the Company;


 


(b)                                 for which payment
is actually made to Indemnitee with respect to the claim in question under a
valid and collectible insurance policy or under a valid and enforceable
indemnity clause, provision of the Certificate of Incorporation or By-laws, or
agreement of the
Company or any other company or organization where Indemnitee is or was serving
at the request of the Company (and Indemnitee shall reimburse the Company for
any amounts paid by the Company and subsequently so recovered by Indemnitee), except in
respect of any indemnity or advancement of Expenses exceeding the payment under
such insurance, indemnity clause, provision of the Certificate of Incorporation
or By-laws, or agreement; provided, however, that this Section 2(b) shall
not apply to any payment(s) actually made to Indemnitee that Indemnitee
has been required to return or that Indemnitee has been otherwise disgorged of
through no fault of Indemnitee; or


 


(c)                                  in connection
with an action, suit or proceeding, or part thereof (including claims and
counterclaims) initiated by Indemnitee, except a judicial proceeding or arbitration
pursuant to Section 11 to enforce rights under this Agreement, unless the
action, suit or proceeding (or part thereof) was authorized or ratified by the
Board of Directors of the Company.


 


3.                                       Action or
Proceedings Other than an Action by or in the Right of the Company.  Except as limited by Section 2 above, Indemnitee
shall be entitled to the indemnification rights provided in this Section if
Indemnitee was or is a party to, or is threatened to be made a party to, or is
or was otherwise involved in, any Proceeding (other than an action by or in the
right of the Company) by reason of the fact that Indemnitee is or was a
director or officer of the Company, or while a director or officer of the
Company is or was serving at the request of the Company as a director, officer,
employee, agent or trustee of another corporation (including, without
limitation, any direct or indirect subsidiary of the Company), partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan; or by reason of anything done or not done by Indemnitee
in any such capacity.  Pursuant to this
Section, Indemnitee shall be indemnified against all Losses (as defined below) actually
and reasonably incurred by Indemnitee in connection with such Proceeding, if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of 


 


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the
Company, and with respect to any criminal Proceeding, had no reasonable cause
to believe his or her conduct was unlawful.


 


4.                                       Indemnity in
Proceedings by or in the Right of the Company.  Except as limited by Section 2 above, Indemnitee
shall be entitled to the indemnification rights provided in this Section if
Indemnitee was or is a party to, or is threatened to be made a party to, or is
or was otherwise involved in, any Proceeding brought by or in the right of the
Company to procure a judgment in its favor by reason of the fact that Indemnitee
is or was a director or officer of the Company, or while a director or officer
of the Company is or was serving at the request of the Company as a director,
officer, employee, agent or trustee of another corporation (including, without
limitation, any direct or indirect subsidiary of the Company), partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan; or by reason of anything done or not done by Indemnitee
in any such capacity.  Pursuant to this
Section, Indemnitee shall be indemnified against all Losses actually and
reasonably incurred by Indemnitee in connection with such Proceeding if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company; provided, however,
that no such indemnification shall be made in respect of any claim, issue, or
matter as to which Delaware law expressly prohibits such indemnification by
reason of any adjudication of liability of Indemnitee to the Company, unless
and only to the extent that the Court of Chancery of the State of Delaware or
the court in which such Proceeding was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is entitled to indemnification for such Losses
as such court shall deem proper.


 


5.                                       Indemnification
for Costs, Charges and Expenses of Successful Party.  Notwithstanding the limitations of Sections 3
and 4 above, to the extent that Indemnitee has been successful, on the merits
or otherwise, in whole or in part, in defense of any Proceeding or in defense
of any claim, issue or matter therein, including, without limitation, the
dismissal of any action without prejudice, or if it is ultimately determined by
final judicial decision of a court of competent jurisdiction from which there
is no further right to appeal that Indemnitee is otherwise entitled to be
indemnified against Expenses, Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by Indemnitee in connection
therewith.


 


6.                                       Jointly
Indemnifiable Claims.


 


(a)                                  The Company
acknowledges that Indemnitee may have certain rights to indemnification,
advancement of Expenses and/or insurance provided by one or more
Indemnitee-Related Entities (as defined below) due to the service of Indemnitee
as a director, officer, employee, agent or trustee of the Company at the
request of the Indemnitee-Related Entities or otherwise.  Notwithstanding such rights, the Company
acknowledges and agrees that it is the indemnitor of first resort (i.e., its
obligations to Indemnitee are primary and any obligation of the Indemnitee-Related
Entities to provide indemnification or to advance Expenses for the same
Expenses or amounts incurred by Indemnitee are secondary), and the Company
shall be fully responsible for payment to Indemnitee in respect of indemnification
or advancement of Expenses in connection with any Jointly Indemnifiable Claim (as
defined below) pursuant to and in accordance with the terms of this Agreement,
irrespective of any right of recovery Indemnitee may have from any of the Indemnitee-Related
Entities.


 


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(b)                                 Under no
circumstance shall the Company be entitled to any right of subrogation or
contribution by, or any other right of recovery of any kind against, the Indemnitee-Related
Entities with respect to Indemnitee.


 


(c)                                  In the event of
a Jointly Indemnifiable Claim, Indemnitee shall first seek recovery against the
Company pursuant to this Agreement, the Company’s Certificate of Incorporation
or Bylaws, any Company insurance policy or any other indemnity or insurance
policy or provision available to Indemnitee from the Company before seeking to
recover under any indemnification rights granted, or any insurance policy
maintained by, any of the Indemnitee-Related Entities.  In the event any of the Indemnitee-Related
Entities (or an insurance provider pursuant to a policy maintained by or on
behalf of such Indemnitee-Related Entity) makes any payment or advancement to Indemnitee
with respect to any Jointly Indemnifiable Claim, (i) the Indemnitee-Related
Entity making such payment or advancement shall be subrogated to the extent of
such payment or advancement to all of the rights of recovery of Indemnitee
against the Company, (ii) the Company shall reimburse, indemnify and hold
harmless such Indemnitee-Related Entities for all such payments or advancements
made and (iii) Indemnitee shall execute all papers reasonably required and
shall do all things that may be reasonably necessary to secure such rights,
including the execution of such documents as may be necessary to enable the Indemnitee-Related
Entities effectively to bring suit to enforce such rights.  If Indemnitee subsequently receives or
recovers from the Company such amounts paid or advanced by the Indemnitee-Related
Parties (or insurance provider), Indemnitee shall promptly pay over the amounts
so received or recovered to such Indemnitee-Related Entity.  No right of advancement or recovery Indemnitee
may have or receive from any of the Indemnitee-Related Entities (or any of
their insurance providers) shall reduce or otherwise alter the rights of Indemnitee
or the obligations of the Company hereunder.


 


(d)                                 The Company
acknowledges and agrees that its obligations to indemnify and advance Expenses
to Indemnitee pursuant to this Agreement or any other indemnity or insurance
policy or provision available to Indemnitee from the Company or any other
company or organization where Indemnitee is serving at the request of the
Company (including, without limitation, any direct or indirect subsidiary of
the Company) shall not be discharged to the extent Indemnitee has been required
to return or has been otherwise disgorged of such payment(s) through no
fault of Indemnitee.  In such an event, Indemnitee
shall be entitled to seek indemnification and/or advancement of Expenses
against the Company, and only thereafter against the Indemnity-Related Parties
to the extent Indemnitee has any such rights against the Indemnity-Related
Parties.


 


(e)                                  The Company and
Indemnitee agree that each of the Indemnitee-Related Entities shall be
third-party beneficiaries with respect to this Section 6, entitled to
enforce this Section 6 as though each such Indemnitee-Related Entity was a
party to this Agreement.


 


7.                                       Partial
Indemnification.  If Indemnitee
is entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of the Losses actually and reasonably incurred in
connection with any Proceeding, or in connection with any judicial proceeding
or arbitration pursuant to Section 11 to enforce rights under this
Agreement, but not, however, for all of the total amount thereof, the Company
shall nevertheless indemnify 


 


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Indemnitee
for the portion of such Losses actually and reasonably incurred to which Indemnitee
is entitled.


 


8.                                       Indemnification
for Expenses of a Witness. 
Notwithstanding any other provision of this Agreement, to the maximum
extent permitted by the Delaware General Corporation Law, Indemnitee shall be
entitled to indemnification against all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf if Indemnitee appears as a
witness or otherwise incurs legal expenses as a result of or related to Indemnitee’s
service as a director or officer of the Company, in any threatened, pending or
completed action, suit, arbitration, alternative dispute mechanism, inquiry, judicial,
administrative, or legislative hearing, investigation, or any other threatened,
pending or completed proceeding, whether civil, criminal, administrative, legislative,
investigative or other nature, to which Indemnitee neither is, nor is
threatened to be made, a party.


 


9.                                       Determination
of Entitlement to Indemnification.  To receive indemnification under this
Agreement, Indemnitee shall submit a written request to the Secretary of the
Company.  Such request shall include
documentation or information which is necessary for such determination and which
is reasonably available to Indemnitee.  Upon
receipt by the Secretary of the Company of a written request by Indemnitee for
indemnification pursuant to Sections 3, 4, 5, 7 or 8, the entitlement of Indemnitee
to indemnification, to the extent not provided pursuant to the terms of this
Agreement, shall be determined, subject to Section 11, by the following
person or persons who shall be empowered to make such determination:  (a) the Board of Directors of the
Company by a majority vote of Disinterested Directors (as defined below),
whether or not such majority constitutes a quorum; (b) a committee of
Disinterested Directors designated by a majority vote of such directors,
whether or not such majority constitutes a quorum; (c) if there are no
Disinterested Directors, or if the Disinterested Directors so direct, by
Independent Counsel (as defined below) in a written opinion to the Board of
Directors, a copy of which shall be delivered to Indemnitee; (d) the
stockholders of the Company; or (e) in the event that a Change in Control (as
defined below) has occurred, by Independent Counsel in a written opinion to the
Board of Directors, a copy of which shall be delivered to Indemnitee.  Such Independent Counsel shall be selected by
the Board of Directors and approved by Indemnitee, except that in the event
that a Change in Control has occurred, Independent Counsel shall be selected by
Indemnitee.  Upon failure of the Board of
Directors so to select such Independent Counsel or upon failure of Indemnitee
so to approve (or so to select in the event that a Change in Control has
occurred), such Independent Counsel shall be selected upon application to a
court of competent jurisdiction.  The determination
of entitlement to indemnification shall be made and, unless a contrary
determination is made, such indemnification shall be paid in full by the
Company not later than 60 calendar days after receipt by the Secretary of the
Company of the written request for indemnification from Indemnitee.  If the person making such determination shall
determine that Indemnitee is entitled to indemnification as to part (but not
all) of the application for indemnification, such person shall reasonably
prorate such partial indemnification among the claims, issues or matters at
issue at the time of the determination.


 


10.                                 Presumptions
and Effect of Certain Proceedings.  The Secretary of the Company shall, promptly
upon receipt of Indemnitee’s written request for indemnification, advise in
writing the Board of Directors of the Company or such other person or persons
empowered to make the determination as provided in Section 9 above that Indemnitee
has made such request 


 


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for
indemnification.  Upon making such
request for indemnification, Indemnitee shall be presumed to be entitled to
indemnification hereunder and the Company shall have the burden of proof in
making any determination contrary to such presumption.  If the person or persons so empowered to make
such determination shall have failed to make the requested determination with
respect to indemnification within 60 calendar days after receipt by the
Secretary of the Company of such request, a requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be absolutely entitled to such indemnification, absent actual fraud in
the request for indemnification.  The
termination of any Proceeding described in Sections 3 or 4 by judgment,
order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself:  (a) create a presumption that Indemnitee
did not act in good faith and in a manner which Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company, or, with respect
to any criminal Proceeding, that Indemnitee had reasonable cause to believe that
Indemnitee’s conduct was unlawful; or (b) otherwise adversely affect the
rights of Indemnitee to indemnification except as may be provided herein.


 


11.                                 Remedies of Indemnitee
in Cases of Determination not to Indemnify or to Advance Expenses; Right to
Bring Suit.  In the
event that a determination is made that Indemnitee is not entitled to
indemnification hereunder or if payment has not been timely made following a
determination of entitlement to indemnification pursuant to Sections 9 and
10, or if an advancement of Expenses is not timely made pursuant to Section 16,
Indemnitee may at any time thereafter bring suit against the Company in a court
of competent jurisdiction in the State of Delaware seeking an adjudication of
entitlement to such indemnification or advancement of Expenses.  Alternatively, Indemnitee at Indemnitee’s
option may seek an award in an arbitration to be conducted by a single
arbitrator in the State of Delaware pursuant to the rules of the American
Arbitration Association, such award to be made within 60 calendar days
following the filing of the demand for arbitration.  The Company shall not oppose Indemnitee’s
right to seek any such adjudication or award in arbitration.  Additionally, Indemnitee may at any time
bring suit for recovery under any directors’ and officers’ liability insurance
policy maintained by the Company.  The
determination in any such judicial proceeding or arbitration shall be made de novo and Indemnitee shall not be prejudiced by reason of
a determination (if so made) pursuant to Sections 9 or 10 that
Indemnitee is not entitled to indemnification. 
In any suit or arbitration brought by Indemnitee to enforce a right to
indemnification hereunder (but not in a suit or arbitration brought by Indemnitee
to enforce a right to an advancement of Expenses) it shall be a defense that Indemnitee
has not met any applicable standard for indemnification set forth in the
General Corporation Law of the State of Delaware.  Further, in any suit brought by the Company
to recover an advancement of Expenses pursuant to the terms of an undertaking,
the Company shall be entitled to recover such expenses upon a final adjudication
that Indemnitee has not met any applicable standard for indemnification set
forth in the General Corporation Law of the State of Delaware.  Neither the failure of the Company (including
the Disinterested Directors, a committee of Disinterested Directors,
Independent Counsel, or its stockholders) to have made a determination prior to
the commencement of such suit or arbitration that indemnification of Indemnitee
is proper in the circumstances because Indemnitee has met the standard of
conduct described above, nor an actual determination by the Company (including
the Disinterested Directors, a committee of Disinterested Directors,
Independent Counsel, or its stockholders) that Indemnitee has not met the standard
of conduct described above shall create a presumption that Indemnitee has not
met the standard of conduct described above, or, in the case of such a suit
brought by Indemnitee, be a defense to such suit.  In any suit brought by Indemnitee to enforce
a 


 


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right
to indemnification or to an advancement of Expenses hereunder, or brought by
the Corporation to recover an advancement of Expenses pursuant to the terms of
an undertaking, the burden of proving that Indemnitee is not entitled to be
indemnified, or to such advancement of expenses, under this Section 11 or
otherwise shall be on the Company.  If a
determination is made or deemed to have been made pursuant to the terms of Section 9
or 10 that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination and is precluded from asserting that such
determination has not been made or that the procedure by which such determination
was made is not valid, binding and enforceable. 
The Company further agrees to stipulate in any such court or before any such
arbitrator pursuant to this Section 11 that the Company is bound by all
the provisions of this Agreement and is precluded from making any assertions to
the contrary.  If the court or arbitrator
shall determine that Indemnitee is entitled to any indemnification or advancement
of Expenses hereunder, or that Indemnitee is entitled to recovery under any
directors’ and officers’ liability insurance policy maintained by the Company,
the Company shall pay all Expenses actually and reasonably incurred by Indemnitee
in connection with such adjudication, award or recovery in arbitration
(including, but not limited to, any appellate proceedings) to the fullest
extent permitted by law, and in any suit brought by the Company to recover an
advancement of Expenses pursuant to the terms of an undertaking, the Company
shall pay all Expenses actually and reasonably incurred by Indemnitee in connection
with such suit to the extent Indemnitee has been successful, on the merits or
otherwise, in whole or in part, in defense of such suit, to the fullest extent
permitted by law.


 


12.                                 Non-Exclusivity
of Rights.  The rights
to indemnification and to the advancement of Expenses provided by this
Agreement shall not be deemed exclusive of any other right that Indemnitee may
now or hereafter acquire under any applicable law, agreement, vote of
stockholders or Disinterested Directors, provisions of the Certificate of
Incorporation or By-laws, or otherwise.


 


13.                                 Expenses to
Enforce Agreement.  In the
event that Indemnitee is subject to or intervenes in any action, suit or proceeding
in which the validity or enforceability of this Agreement is at issue or seeks
an adjudication or award in arbitration to enforce Indemnitee’s rights under,
or to recover damages for breach of, this Agreement, Indemnitee, if Indemnitee
prevails in whole or in part in such action, suit or proceeding, shall be
entitled to recover from the Company and shall be indemnified by the Company
against any Expenses actually and reasonably incurred by Indemnitee in
connection therewith.


 


14.                                 Continuation of
Indemnity.  All
agreements and obligations of the Company contained herein shall continue during
the period Indemnitee is a director or officer of the Company or while a
director or officer is serving at the request of the Company as a director,
officer, employee, agent or trustee of another corporation (including, without
limitation, any direct or indirect subsidiary of the Company), partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan; and shall continue thereafter with respect to any
possible claims based on the fact that Indemnitee was a director, officer,
employee, agent or trustee of the Company or was serving at the request of the
Company as a director, officer, employee, agent or trustee of another
corporation (including, without limitation, any direct or indirect subsidiary
of the Company), partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan.  This Agreement shall be binding upon all
successors and assigns of the Company (including any transferee of all or 


 


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substantially
all of its assets and any successor by merger or operation of law) and shall
inure to the benefit of Indemnitee’s heirs, executors, and administrators.  The Company shall require and cause any
successor to all, substantially all or a substantial part of the business
and/or assets of the Company (whether by direct or indirect purchase, merger,
consolidation or otherwise) to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place in a written
agreement reasonably satisfactory to Indemnitee.


 


15.                                 Notification
and Defense of Proceeding. 
Promptly after receipt by Indemnitee of notice of any Proceeding, Indemnitee
shall, if a request for indemnification or an advancement of Expenses in
respect thereof is to be made against the Company under this Agreement, notify
the Company in writing of the commencement thereof; but the omission so to notify
the Company shall not relieve it from any liability that it may have to Indemnitee.  Notwithstanding any other provision of this
Agreement, with respect to any such Proceeding of which Indemnitee notifies the
Company:


 


(a)                                  The Company
shall be entitled to participate therein at its own expense; and


 


(b)                                 Except as
otherwise provided in this Section 15(b), to the extent that it may wish,
the Company, jointly with any other indemnifying party similarly notified,
shall be entitled to assume the defense thereof, with counsel satisfactory to Indemnitee.  After notice from the Company to Indemnitee
of its election so to assume the defense thereof, the Company shall not be
liable to Indemnitee under this Agreement for any expenses of counsel
subsequently incurred by Indemnitee in connection with the defense thereof
except as otherwise provided below.  Indemnitee
shall have the right to employ Indemnitee’s own counsel in such Proceeding, but
the fees and expenses of such counsel incurred after notice from the Company of
its assumption of the defense thereof shall be at the expense of Indemnitee
unless (i) the employment of counsel by Indemnitee has been authorized by
the Company, (ii) Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and Indemnitee in the conduct
of the defense of such Proceeding, or (iii) the Company shall not within
60 calendar days of receipt of notice from Indemnitee in fact have employed
counsel to assume the defense of the Proceeding, in each of which cases the
fees and expenses of Indemnitee’s counsel shall be at the expense of the
Company.  The Company shall not be
entitled to assume the defense of any Proceeding brought by or on behalf of the
Company or as to which Indemnitee shall have made the conclusion provided for
in (ii) above; and


 


(c)                                  The Company
shall not be liable to indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any Proceeding effected without the Company’s
written consent, or for any judicial or arbitral award if the Company was not
given an opportunity, in accordance with this Section 15, to participate
in the defense of such Proceeding.  The
Company shall not settle any Proceeding in any manner that would impose any
penalty or limitation on or disclosure obligation with respect to Indemnitee
without Indemnitee’s written consent. 
Neither the Company nor Indemnitee shall unreasonably withhold its
consent to any proposed settlement.


 


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16.                                 Advancement of
Expenses.  To the
fullest extent not prohibited by law, all Expenses incurred by Indemnitee in
defending any Proceeding described in Section 3 or 4 shall be paid by the
Company in advance of the final disposition of such Proceeding at the request
of Indemnitee.  To receive an advancement
of Expenses under this Agreement, Indemnitee shall submit a written request to the
Secretary of the Company.  Such request
shall reasonably evidence the Expenses incurred by Indemnitee and shall include
or be accompanied by an undertaking, by or on behalf of Indemnitee, to repay
all amounts so advanced if it is ultimately determined by final judicial
decision of a court of competent jurisdiction from which there is no further
right to appeal that Indemnitee is not entitled to be indemnified against such
Expenses by the Company as provided by this Agreement or otherwise.  Indemnitee’s undertaking to repay any such
amounts is not required to be secured. 
Each such advancement of Expenses shall be made within 20 calendar days
after the receipt by the Secretary of the Company of such written request.  Indemnitee’s entitlement to such Expenses
shall include those incurred in connection with any action, suit or proceeding
by Indemnitee seeking an adjudication or award in arbitration pursuant to Section 11
of this Agreement (including the enforcement of this provision) to the extent
the court or arbitrator shall determine that Indemnitee is entitled to an
advancement of Expenses hereunder.


 


17.                                 Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, all portions of
any paragraphs of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that are not by themselves invalid, illegal
or unenforceable) shall not in any way be affected or impaired thereby, and (b) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraph of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent of the parties that the Company provide protection to Indemnitee
to the fullest enforceable extent.


 


18.                                 Headings;
References; Pronouns.  The
headings of the sections of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.  References herein
to section numbers are to sections of this Agreement.  All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular or plural as
appropriate.


 


19.                                 Definitions.  For purposes of this Agreement:


 


(a)                                  A “Change in
Control” will be deemed to have occurred if the individuals who, as of the date
of this Agreement, constitute the Board of Directors of the Company (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
of Directors; provided, however, that any individual becoming a
director subsequent to the date of this Agreement whose election, or nomination
for election by the stockholders of the Company, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of 


 


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directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board of Directors.


 


(b)                                 “Disinterested
Director” means a director of the Company who is not or was not a party to
the Proceeding in respect of which indemnification is being sought by
Indemnitee.


 


(c)                                  “Expenses”
includes, without limitation, expenses incurred in connection with the defense
or settlement of any Proceeding, attorneys’ fees, witness fees and expenses,
fees and expenses of accountants and other advisors, retainers and
disbursements and advances thereon, the premium, security for, and other costs
relating to any bond (including cost bonds, appraisal bonds or their
equivalents), any federal, state, local or foreign taxes imposed as a result of
the actual or deemed receipt of any payments under this Agreement and any
expenses of establishing a right to indemnification or advancement under
Sections 9, 11, 13, and 16 above, but shall not include the amount of
judgments, fines, ERISA excise taxes or penalties actually levied against
Indemnitee, or any amounts paid in settlement by or on behalf of Indemnitee.


 


(d)                                 “Indemnitee-Related
Entities” means any corporation, limited liability company, general or
limited partnership, joint venture, trust, employee benefit plan or other
enterprise (other than the Company or any other corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan or other
enterprise for which Indemnitee has agreed, on behalf of the Company or at the
Company’s request, to serve as a director, officer, employee, agent or
fiduciary and which service is covered by the indemnity described in this
Agreement) from whom Indemnitee may be entitled to indemnification or
advancement of Expenses with respect to which, in whole or in part, the Company
may also have an indemnification or advancement obligation (other than as a
result of obligations under an insurance policy), including, without
limitation, Aurora Management Partners LLC, Aurora Advisors II LLC, Aurora Overseas
Advisors II, LDC, Aurora Capital Partners II L.P., Aurora Overseas Capital
Partners II, L.P., Aurora Equity Partners II L.P. (“AEP II”), Aurora
Overseas Equity Partners II, L.P. (“AOEP II”) and any portfolio
companies (other than the Company) owned or controlled by AEP II or AOEP II.


 


(e)                                  “Independent
Counsel” means a law firm or a member of a law firm that neither is
presently nor in the past five years has been retained to represent: (i) the
Company or Indemnitee in any matter material to either such party, or (ii) any
other party to the Proceeding giving rise to a request for indemnification
hereunder.  Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s right to indemnification under this
Agreement.


 


(f)                                    “Jointly
Indemnifiable Claim” shall be broadly construed and shall include, without
limitation, any Proceeding for which Indemnitee shall be entitled to
indemnification or advancement of Expenses from (i) one or more of the Indemnitee-Related
Entities and (ii) the Company pursuant to applicable law, any agreement or
the certificate of incorporation, bylaws, partnership agreement, operating
agreement, certificate of formation, 


 


10

















 


certificate
of limited partnership or comparable organizational documents of the Company, or
any parent or subsidiary of the Company, or the Indemnitee-Related Entities, as
applicable.


 


(g)                                 “Losses”
means any expense, liability or loss (including attorneys’ fees, judgments,
fines, ERISA excise taxes or penalties, amounts paid in settlement by or on
behalf of Indemnitee, and Expenses).


 


(h)                                 “Proceeding”
means any action, suit, arbitration, alternative dispute mechanism, inquiry,
judicial, administrative or legislative hearing, investigation, or any other
threatened, pending or completed proceeding, whether brought by or in the right
of the Company or otherwise, including any and all appeals, whether civil,
criminal, administrative, legislative, investigative or other nature, to which
Indemnitee was or is a party or is threatened to be made a party or is
otherwise involved in by reason of the fact that Indemnitee is or was a
director or officer of the Company, or while a director or officer is or was
serving, at the request of the Company, as a director, officer, employee, agent
or trustee of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan, or by
reason of anything done or not done by Indemnitee in any such capacity, whether
or not Indemnitee is serving in such capacity at the time any Loss is incurred
for which indemnification or advancement can be provided under this Agreement.


 


20.                                 Other
Provisions.


 


(a)                                  This Agreement and
all disputes or controversies arising out of or related to this Agreement shall
be governed by, and construed in accordance with, the internal laws of the
State of Delaware, without regard to the laws of any other jurisdiction that
might be applied because of conflicts of laws principles of the State of
Delaware.


 


(b)                                 This Agreement
may be executed in one or more counterparts, all of which shall be considered one
and the same instrument and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
party.


 


(c)                                  This Agreement
shall not be deemed an employment contract between the Company and any
Indemnitee who is an officer of the Company, and, if Indemnitee is an officer
of the Company, Indemnitee specifically acknowledges that Indemnitee may be
discharged at any time for any reason, with or without cause, and with or
without severance compensation, except as may be otherwise provided in a
separate written contract between Indemnitee and the Company.


 


(d)                                 Except as
provided in Section 6 above, upon a payment to Indemnitee 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 documents and
instruments required and shall take such other actions as may be necessary to
secure such rights, including the execution of such documents as may be necessary
to enable the Company effectively to bring suit to enforce such rights; provided,
however, that such rights of subrogation and any documents or
instruments executed by Indemnitee shall automatically terminate in the event
that Indemnitee is required to return or is otherwise disgorged of any
indemnification payments and/or advancement of Expenses through no fault of Indemnitee.  In the event of such disgorgement and 


 


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if
the Company has recovered any payments or other consideration from any third
party for such liability, the Company shall be obligated to deliver such
payments or other consideration to Indemnitee.


 


(e)                                  This Agreement
may not be amended, modified, or supplemented in any manner, whether by course
of conduct or otherwise, except by an instrument in writing specifically
designated as an amendment hereto, signed on behalf of each party.  No failure or delay of either party in
exercising any right or remedy hereunder shall operate as a waiver thereof, and
no single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, or any course of
conduct, preclude any other or further exercise thereof or the exercise of any
other right or power.


 


[Signature Page Follows.]


 


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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first above written.


 


 


	
   

  	
  DOUGLAS
  DYNAMICS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
				



 


Signature
Page to Douglas Dynamics, Inc. Indemnification Agreement