Exhibit 10.16


FORM OF
INDEMNIFICATION AGREEMENT


THIS
INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of                      , 2004 by and among
K-Sea General Partner GP, LLC, a Delaware limited liability company (the
“Company”), K-Sea General Partner, L.P., a Delaware limited partnership (the
“General Partner”), K-Sea Transportation Partners L.P., a Delaware limited
partnership (the “Partnership”), and                                  (“Indemnitee”).


PRELIMINARY STATEMENT


WHEREAS, qualified
persons are reluctant to serve organizations as directors or officers or in
other capacities unless they are provided with adequate protection against
inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of such organizations;


WHEREAS, the
parties hereto recognize that the legal risks and potential liabilities, and
the threat thereof, associated with lawsuits filed against persons serving the
Company, the General Partner, the Partnership and/or their respective
subsidiaries, and the resultant substantial time, expense and anxiety spent and
endured in defending lawsuits bears no reasonable relationship to the
compensation received by such persons, and thus poses a significant deterrent
and increased reluctance on the part of experienced and capable individuals to
serve the Company, the General Partner, the Partnership and/or their respective
subsidiaries;


WHEREAS, the
uncertainties related to obtaining adequate insurance and indemnification have
increased the difficulty of attracting and retaining such persons;


WHEREAS, it is
reasonable, prudent and necessary for the Company, the General Partners and the
Partnership to contractually agree to indemnify such persons to the fullest
extent permitted by law, so that such persons will serve or continue to serve
the Company, the General Partner, the Partnership and/or their respective
subsidiaries free from undue concern that they will not be adequately
indemnified; and


WHEREAS, the
Indemnitee is willing to serve, continue to serve and to take on additional
service for an on behalf of the Company, the General Partner and the
Partnership on the condition that the Indemnitee is indemnified according to
the terms of this Agreement;


NOW, THEREFORE, in
consideration of the premises and the covenants herein, the parties to this
Agreement agree as follows:


Section 1.  Services by Indemnitee.  Indemnitee will serve, or continue to serve,
as a Functionary of the Company and, as Indemnitee and the Company may agree,
as a Functionary of one or more Related Enterprises.  Indemnitee may at any time and for any reason resign from any
such service, subject to any other contractual obligation or any obligation
applicable law imposes.  This Agreement
is not and is not to be construed as an employment contract by the Company or
any other Related Enterprise with Indemnitee or as otherwise affecting
Indemnitee’s status, if any, as an employee of the Company or any Related
Enterprise.

















 


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


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


(A)          the fact that
Indemnitee serves or served as (1) a Functionary of the Company or, at the
request of the Company, (2) a Functionary of a Related Enterprise; or


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


and


(2)           Indemnitee (A)
engaged in the service or conduct at issue in that Proceeding in good faith and
in a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company and, in the event that Proceeding was or is a criminal
action or proceeding involving Indemnitee’s conduct, (B) had no reasonable cause
to believe that that conduct was unlawful,


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


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


(2)           in the case of each
Company Claim in that Proceeding, all Expenses Indemnitee reasonably has
incurred or will incur as a result of or in connection with that Company Claim;
provided, however, that the Partnership will not have any obligation under this
clause (2) to, or to cause another Partnership Entity to, indemnify
Indemnitee  against, or hold Indemnitee
harmless from or in respect of, any Company Claim as to which Indemnitee was or
is adjudged to be liable to the Company or any Related Enterprise unless, and
only to the extent that, the Court of Chancery or the court in which that
Company Claim was or is brought determines on application that, despite the
adjudication of liability, but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such of those
Expenses as the Court of Chancery or that other court shall deem proper.


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


 


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


(c)           If and whenever Indemnitee was, or
reasonably could have been expected to have been, or is, or reasonably could be
expected to be, by reason of the knowledge of facts Indemnitee actually or
allegedly has obtained in the course of his service as (1) a Functionary of the
Company or, at the request of the Company, (2) a Functionary of a Related
Enterprise, a witness in or a deponent in connection with any Proceeding to
which Indemnitee was or is not a party, the Partnership will, or will cause
another Partnership Entity to, indemnify Indemnitee against, and hold
Indemnitee harmless from and in respect of, all Expenses Indemnitee reasonably
has incurred or will incur in connection therewith.  The rights of Indemnitee under this Section 2(c) are in addition
to, and independent of, the rights of Indemnitee under Sections 2(b) or
2(c).


Section 3.  Advancement of Expenses. (a) If and
whenever Indemnitee is, or is threatened to be made, a party to any Proceeding
that may give rise to a right of Indemnitee to indemnification under Section
2(a), the Partnership will, or will cause another Partnership Entity to,
advance all Expenses reasonably incurred by or on behalf of Indemnitee in
connection with that Proceeding within 10 days after the Company receives a
statement or statements from Indemnitee requesting the advance or advances from
time to time, whether prior to or after final disposition of that Proceeding.  Each such statement must reasonably evidence
the Expenses incurred by or on behalf of Indemnitee and include or be preceded
or accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it ultimately is determined that Indemnitee is not
entitled to be indemnified by the Company under Section 2(a) against those
Expenses.  The Partnership will accept
any such undertaking without reference to the financial ability of Indemnitee
to make repayment.  If the Partnership or
another Partnership Entity advances Expenses in connection with any Claim as to
which Indemnitee has requested or may request indemnification under Section
2(a) and a determination is made under Section 5(c) that Indemnitee is not
entitled to that indemnification, Indemnitee will not be required to reimburse
the Partnership or that other Partnership Entity for those advances until the
180th day following the date of that determination; provided, however, that if
Indemnitee timely commences and thereafter prosecutes in good faith a judicial
proceeding or arbitration under Section 7(a) or otherwise to obtain that
indemnification, Indemnitee will not be required to reimburse the Partnership
or that other Partnership Entity for those Expenses until a determination in
that proceeding or arbitration that Indemnitee is not entitled to that
indemnification has become final and nonappealable.


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


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


 


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Section 4.  Notification and Defense of Claims.  (a) 
If Indemnitee receives notice, otherwise than from the Company, that
Indemnitee is or will be made, or is threatened to be made, a party to any
Proceeding in respect of which Indemnitee intends to seek indemnification
hereunder, Indemnitee must promptly notify the Company in writing of the nature
and, to Indemnitee’s knowledge, status of that Proceeding.  If this Section 4(a) requires Indemnitee to
give such a notice, but Indemnitee fails to do so, that failure will not
relieve the Company from, or otherwise affect, the obligations the Partnership
may have to indemnify Indemnitee under this Agreement, unless the Company can
establish that the failure has resulted in actual prejudice to the Company.


(b)           Except as this Section 4(b) otherwise
provides below, in the case of any Proceeding in respect of which Indemnitee
seeks indemnification hereunder:


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


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


(3)           if clause (2) above
entitles the Company or that Related Enterprise to assume the defense of any of
those Claims and it delivers to Indemnitee notice of that assumption under
clause (2), the Company will not be liable to Indemnitee hereunder for any fees
or expenses of legal counsel for Indemnitee which Indemnitee incurs after
Indemnitee receives that notice.


Indemnitee will have the
right to employ Indemnitee’s own legal counsel in that Proceeding, but, as
clause (3) of the preceding sentence provides, will bear the fees and expenses
of that counsel unless:


(1)           the Company has
authorized Indemnitee in writing to retain that counsel;


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


(3)           Indemnitee shall
have (A) reasonably concluded that a conflict of interest may exist between
Indemnitee and the Company as to the defense of one or more of those Claims and
(B) communicated that conclusion to the Company in writing.


(c)           The Partnership will not be obligated
hereunder to, or to cause another Partnership Entity to, indemnify Indemnitee
against or hold Indemnitee harmless from and in respect of any amounts paid, or
agreed to be paid, by Indemnitee in settlement of any Claim against Indemnitee
which Indemnitee effects without the Company’s prior written consent.  The Company will not settle any Claim
against Indemnitee in any manner that would impose any penalty or limitation on
Indemnitee without Indemnitee’s prior written consent.  Neither the 


 


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Company nor Indemnitee
will unreasonably delay or withhold consent to any such settlement the other
party proposes to effect.


Section 5.  Procedure for Determination of Entitlement to
Indemnification.  (a)  To obtain indemnification under this
Agreement, Indemnitee must submit to the Company a written request therefor
which includes, or is accompanied by, such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to that indemnification.  Indemnitee may request indemnification
hereunder at any time and from time to time as Indemnitee deems appropriate in Indemnitee’s
sole discretion.  In the case of any
request for indemnification under Section 2(a) as to any Claim which is pending
or threatened at the time Indemnitee delivers that request to the Company and
would not be resolved with finality, whether by judgment, order, settlement or
otherwise, on payment of the indemnification requested, the Company may defer
the determination under Section 5(c) of Indemnitee’s entitlement to that
indemnification to a date that is no later than 45 days after the effective
date of that final resolution if the Board concludes in good faith that an
earlier determination would be materially prejudicial to the Company or a
Related Enterprise.


(b)           On written request by Indemnitee
under Section 5(a) for indemnification under Section 2(a), the determination of
Indemnitee’s entitlement to that indemnification will be made:


(1)           if Indemnitee will
be a director or officer of the Company at the time that determination is made,
under Section 5(c) in each case; or


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


(c)           Each determination of Indemnitee’s
entitlement to indemnification under Section 2(a) to which this Section 5(c)
applies will be made as follows:


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


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


(3)           if (A) there are no
Disinterested Directors or (B) a majority vote of the Disinterested Directors
so directs, by an Independent Counsel in a written opinion to the Board, a copy
of which the Company will deliver to Indemnitee;


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


 


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


(1)           within 10 days after
that determination pay to Indemnitee all amounts (A) theretofore incurred by or
on behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination and (B) requested from the
Company in writing by Indemnitee; and


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


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


(1)           not privileged or
otherwise protected from disclosure;


(2)           reasonably available
to Indemnitee; and


(3)           reasonably necessary
to that determination.


(e)           If an Independent Counsel is to make
a determination under Section 5(c) of entitlement to indemnification under
Section 2(a), it will be selected by the Company with the consent of the
Indemnitee (which consent shall not be unreasonably withheld).  The Partnership will pay any and all
reasonable fees and expenses the Independent Counsel incurs in connection with
acting under Section 5(c), and the Partnership will pay all reasonable fees and
expenses incident to the procedures this Section 5(e) sets forth, regardless of
the manner in which the Independent Counsel is selected or appointed.  If Indemnitee becomes entitled to, and does,
initiate any judicial proceeding or arbitration under Section 7, the Company
will terminate its engagement of the person or firm acting as Independent
Counsel, whereupon that person or firm will be, subject to the applicable
standards of professional conduct then prevailing, relieved of any further
responsibility in the capacity of Independent Counsel.


(f)            The amount of any indemnification
against Expenses to which Indemnitee becomes entitled under any provision
hereof, including Section 2(a), will be determined subject to the provisions of
this Section 5(f).  Indemnitee will have
the burden of showing that Indemnitee actually has incurred the Expenses for
which Indemnitee requests indemnification. 
If the Partnership or a Partnership Entity has made any advance in
respect of any Expense incurred by Indemnitee without objecting in writing to
Indemnitee at the time of the advance to the reasonableness thereof, the
incurrence of that Expense by Indemnitee will be deemed for all purposes hereof
to have been reasonable.  In the case of
any Expense as to which such an objection has been made, or any Expense for
which no advance has been made, the incurrence of that Expense will be presumed
to have been reasonable, and the Company will have the burden of proof to
overcome that presumption.


 


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


Section 6.  Presumptions and Effect of Certain Proceedings.  (a) 
In making a determination under Section 5(c) with respect to entitlement
to indemnification under Section 2(a), the person, persons or entity
making that determination must presume that Indemnitee is entitled to that
indemnification if Indemnitee has submitted a request for indemnification in
accordance with Section 5(a), and the Company will have the burden of
proof to overcome that presumption in connection with the making by any person,
persons or entity of any determination contrary to that presumption.


(b)           The termination 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 itself adversely affect the right of
Indemnitee to indemnification hereunder or, in the case of any determination
under Section 5(c) of Indemnitee’s entitlement to indemnification under Section
2(a), create a presumption that Indemnitee did not act in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal action or proceeding,
that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful.


(c)           Any service of Indemnitee as a
Functionary of the Company or any Related Enterprise which imposes duties on,
or involves services by, Indemnitee with respect to any Related Enterprise that
is an employee benefit or welfare plan or related trust, if any, or the
participants or beneficiaries of that plan or trust will be deemed for all
purposes hereof as service at the request of the Company.  Any action Indemnitee takes or omits to take
in connection with any such plan or trust will, if taken or omitted in good
faith by Indemnitee and in a manner Indemnitee reasonably believed to be in the
interest of the participants in or beneficiaries of that plan or trust, be
deemed to have been taken or omitted in a manner “not opposed to the best
interests of the Company” for all purposes hereof.


Service by a
person as an agent or representative of an Enterprise means service on behalf
of that Enterprise in its relations with persons and entities other than the
Affiliates and Functionaries of that Enterprise.


(d)           For purposes of any determination
hereunder as to whether Indemnitee has performed services 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 in reliance on the records of the
Enterprise or on information, opinions, reports or statements, including
financial statements and 


 


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other financial
information, concerning the Enterprise or any other Person which were prepared
or supplied to Indemnitee by:


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


(2)           appraisers,
engineers, investment bankers, legal counsel or other Persons as to matters
Indemnitee reasonably believed were within the professional or expert
competence of those Persons; and


(3)           any committee of the
board of directors or equivalent managing body of the Enterprise of which
Indemnitee is or was, at the relevant time, not a member;


provided, however, that
if Indemnitee has actual knowledge as to any matter that makes any such
reliance unwarranted as to that matter, this Section 6(d) will not entitle
Indemnitee to any presumption that Indemnitee acted in good faith respecting
that matter.


(e)           For purposes of any determination
hereunder as to whether Indemnitee is entitled to indemnification under Section
2(a), neither the knowledge nor the conduct of any other Functionary of the
Company or any Related Enterprise, other than Indemnitee, shall be imputed to
Indemnitee, but Indemnitee will be irrebutably presumed to have read and
understood the Company’s code of business conduct for purposes of any
determination under the Charter Documents or this Agreement as to whether
Indemnitee has performed services or engaged in conduct on behalf of any
Enterprise in good faith.


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


(g)           If Indemnitee serves or served as a
Functionary of a Related Enterprise, that service will be deemed to be “at the
request of the Company” for all purposes hereof notwithstanding that the
request is not evidenced by a writing or shown to have been made orally.  In the event the Company were to extend the
rights of indemnification and advancement of Expenses hereunder to Indemnitee’s
serving at the request of the Company as a Functionary of any Enterprise other
than the Company or a Related Enterprise, Indemnitee must show that the request
was made by the Board or at its authorization.


Section 7.  Remedies of Indemnitee in Certain Cases.  (a) 
If Indemnitee makes a written request in compliance with Section 5(a)
for indemnification under Section 2(a) and either:


(1)           no determination as
to the entitlement of Indemnitee to that indemnification is made before the
last to occur of (A) the close of business on the date, if any, the Company has
specified under Section 5(a) as the outside date for that determination or (B)
the elapse of the 45-day period beginning the day after the date the Company
receives that request; or


 


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(2)           a determination is
made under Section 5(c) that Indemnitee is not entitled to that indemnification
in whole or in any part in respect of any Claim to which that request related,


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


(b)           If a determination has been made
under Section 5 that Indemnitee is not entitled to indemnification
hereunder, any judicial proceeding or arbitration commenced under this Section
7 will be conducted in all respects as a de novo trial or arbitration on the
merits, and Indemnitee will not be prejudiced by 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 to indemnification
hereunder, and the Company may not, for any purpose, refer to or introduce into
evidence any determination under Section 5(c) which is adverse to Indemnitee.


(c)           If a determination has been made
under Section 5 that Indemnitee is entitled to indemnification hereunder, the
Company will be bound by that determination in any judicial proceeding or
arbitration Indemnitee thereafter commences under this Section 7 or otherwise,
absent:


(1)            a misstatement by
Indemnitee of a material fact, or an omission by Indemnitee of a material fact
necessary to make Indemnitee’s statements not materially misleading, in
connection with Indemnitee’s request for indemnification; or


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


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


(e)           In any 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 its behalf to, assert that the procedures
or presumptions this Agreement establishes are not valid, binding and
enforceable; and


(2)           will stipulate that
it is bound by all the provisions hereof.


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


(b)           If the Company maintains an insurance
policy or policies providing liability insurance for Functionaries of the
Company or of any Related Enterprise who serve or served in the same capacities
as Indemnitee, Indemnitee will be covered by the policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available for any such Functionary under the policy or policies.  If the Company receives written notice from
any source of a pending Proceeding to which Indemnitee is a party and in
respect of which Indemnitee might be entitled to indemnification under Section
2(a) and the Company then maintains any such policy of which Indemnitee is a
beneficiary, the Company will:


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


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


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


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


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


 


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(e)           The Partnership’s obligation to make
or cause to be made any payment or advance hereunder to or for the account of
Indemnitee with respect to Indemnitee’s service at the request of the Company
as a Functionary of any Related Enterprise will be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from that Related Enterprise.


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


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


(2)           one year after the
final, nonappealable termination of any Proceeding then pending in respect of
which Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee under Section 7 or
otherwise.


This Agreement will be
binding on the Company and its successors and assigns and will inure to the
benefit of Indemnitee and his spouse, if Indemnitee resides in Texas or another
community property state, heirs, executors and administrators.


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


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


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


(3)           to the fullest
extent possible, the provisions hereof, including each portion of any Section
containing any such invalid, illegal or unenforceable provision which is not
itself invalid, illegal or unenforceable, will be construed so as to give
effect to the intent manifested thereby.


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


(1)           any Claim made
against Indemnitee for an accounting of profits, under Section 16(b) of the
Exchange Act or similar provision of state statutory or common law, from the
purchase and sale, or sale and purchase, by Indemnitee of securities of the
Company or any Related Enterprise;


 


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(2)           any Company Claim
made against Indemnitee for:


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


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


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


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


(3)           except for any Claim
initiated by Indemnitee, whether as a cause of action or as a defense to a
cause of action under Section 7 or otherwise, to enforce or establish, by
declaratory judgment or otherwise, Indemnitee’s rights or remedies hereunder,
any Claim initiated by Indemnitee without the prior authorization of the Board
against the Company or any Related Enterprise or any of their respective
present or former Functionaries.


Section 12.  Identical Counterparts.  This Agreement may be executed in one or
more counterparts, each of which will for all purposes be deemed to be an
original but all of which together will constitute one and the same
agreement.  Only one such counterpart
signed by the party against whom enforceability is sought needs to be produced
to evidence the existence of this Agreement.


Section 13.  Headings. 
The headings of the Sections hereof are inserted for convenience only
and do not and will not be deemed to constitute part of this Agreement or to
affect the construction thereof.


Section 14.  Definitions and Definitional Provisions.  (a) For purposes of this Agreement:


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


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


“Charter
Documents” means, with respect to any corporation or other entity at
any time, in each case as amended, modified and supplemented at that time:


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


(2)           the bylaws or
limited liability company agreement or regulations, limited partnership
agreement, or the equivalent governing documents, of that entity; and


 


12

















 


(3)           each document
setting forth the designation, amount and relative rights, limitations and preferences
of any class or series of that entity’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 of the Company or
a Related Enterprise against Indemnitee.


“Court of
Chancery” means the Court of Chancery of the State of Delaware.


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


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


“Exchange Act”
means the Securities Exchange Act of 1934, as amended.


“Expenses”
include all attorneys’ fees, retainers, court costs, 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 types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, or otherwise participating in, a
Proceeding.  Should any payments by the
Company or a Company Entity to or for the account of Indemnitee under this
Agreement be determined to be subject to any federal, state or local income or
excise tax, “Expenses” also will include such amounts as are necessary to place
Indemnitee in the same after-tax position, after giving effect to all
applicable taxes, Indemnitee would have been in had no 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 that Enterprise, including, in the case
of any employee benefit or welfare plan, any member of any committee
administering that plan or any individual to whom the duties of that committee
are delegated.


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


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


 


13

















 


(2)           any other party to
the Proceeding giving rise to a claim for indemnification hereunder.


Notwithstanding the
foregoing, the term “Independent Counsel” does not include at any time any
Person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Company or a Related Enterprise or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.


“Partnership Entity” means any Related Enterprise, other than
an employee benefit 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, joint stock company, joint venture or any other
entity of any kind having a separate legal status or any estate, trust, union or
employee organization or governmental authority.


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


“Related Enterprise” 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 or controlled,
directly or indirectly, at that time;


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


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


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


(b)           This Agreement uses the words
“herein,” “hereof” and “hereunder” and words of similar import to refer to this
Agreement as a whole and not to any provision of this Agreement, and the words
“Section” and “Preliminary Statement” refer to Sections of and the Preliminary
Statement in this Agreement, unless it otherwise specifies.


 


14

















 


(c)           Whenever the context so requires, the
singular number includes the plural and vice versa, and a reference to one
gender includes the other gender and the neuter.


(d)           The word “including,” and, with
correlative meaning, the word “include,” means including, without limiting the
generality of any description preceding that word, and the words “shall” and
“will” are used interchangeably and have the same meaning.


(e)           The language this Agreement uses will
be deemed to be the language the parties hereto have chosen to express their
mutual intent, and no rule of strict construction will be applied against
either party hereto.


Section 15.  Modification and Waiver.  No supplement to or modification or
amendment of this Agreement will be binding unless executed in writing by both
parties hereto.  No waiver of any
provision hereof will be deemed or will constitute a waiver of any other
provision hereof, whether or not similar, nor will any such waiver constitute a
continuing waiver.


Section 16.  Reliance. 
The Company confirms and agrees with Indemnitee that it has entered into
this Agreement and assumed the obligations this Agreement imposes on it in
order to induce Indemnitee to serve, or continue to serve, as a Functionary of
the Company or a Related Enterprise. 
The Company acknowledges that Indemnitee is relying on this Agreement in
so serving.


Section 17.  Notices. 
All notices, requests, demands and other communications  hereunder must be in writing or by
electronic transmission and will be deemed delivered and received:


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


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


(3)           If to Indemnitee,
to:


 


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


(4)           If to the Company,
to:


 


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K-Sea General Partner
G.P., L.L.C.

3245 Richmond Terrace

Staten Island, New York  10303

Attention:  Corporate Secretary

Fax No.:

E-mail:


 


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


(1)           the relative
benefits Indemnitee and the Partnership have received as a result of the
event(s) or transaction(s) giving rise to that Claim; or


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


Section 19.  Governing Law; Submission to Jurisdiction.  This Agreement and the legal relations among
the 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 laws
rules.  Except with respect to any
arbitration Indemnitee commences under Section 7 or as Section 2(a) expressly
contemplates otherwise, the Company and Indemnitee hereby irrevocably and
unconditionally:


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


(2)           consent to submit to
the exclusive jurisdiction of the Court of Chancery for purposes of any action
or proceeding arising out of or in connection with this Agreement;


(3)           waive any objection to
the laying of venue of any such action or proceeding in the Court of Chancery;
and


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


Section 20.  Entire Agreement.  This Agreement constitutes the entire
agreement and understanding between the Company and Indemnitee, and supersedes
all prior oral, written 


 


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or implied agreements and understandings of the
Company and Indemnitee with respect to the subject matter hereof.


 


17

















 


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


 


	
  ATTEST:

  	
   

  	
  K-SEA GENERAL PARTNER
  G.P. L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  K-SEA GENERAL PARTNER
  L.P.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  K-Sea General Partner
  G.P. L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  K-SEA TRANSPORTATION
  PARTNERS, L.P.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  K-Sea General Partner,
  L.P.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  K-Sea General Partner
  G.P. L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
											



 


 


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